Federal Register / Vol. 84, No. 218 / Tuesday, November 12, 2019 / Rules and Regulations

61142 Federal Register / Vol. 84, No.
218 / Tuesday, November 12, 2019 / Rules and Regulations
DEPARTMENT OF HEALTH AND DATES: via email Scott.Talaga@cms.hhs.gov or

HUMAN SERVICES Effective date: This final rule is at 410–786–4142 or Mitali Dayal via
effective on January 1, 2020. email Mitali.Dayal2@cms.hhs.gov or at
Centers for Medicare & Medicaid Comment period: To be assured 410–786–4329.
Services consideration, comments on the Ambulatory Surgical Center Quality
payment classifications assigned to the Reporting (ASCQR) Program
42 CFR Parts 405, 410, 412, 414, 416, interim APC assignments and/or status Administration, Validation, and
419, and 486 indicators of new or replacement Level Reconsideration Issues, contact Anita
II HCPCS codes in this final rule with Bhatia via email Anita.Bhatia@
[CMS–1717–FC] comment period must be received at one cms.hhs.gov or at 410–786–7236.
RIN 0938–AT74 of the addresses provided in the Ambulatory Surgical Center Quality
ADDRESSES section no later than 5 p.m. Reporting (ASCQR) Program Measures,
Medicare Program: Changes to EST on December 2, 2019. contact Nicole Hewitt via email
Hospital Outpatient Prospective ADDRESSES: In commenting, please refer Nicole.Hewitt@cms.hhs.gov or at 410–
Payment and Ambulatory Surgical to file code CMS–1717–FC when 786–7778.
Center Payment Systems and Quality commenting on the issues in this final Blood and Blood Products, contact
Reporting Programs; Revisions of rule with comment period. Because of Josh McFeeters via email
Organ Procurement Organizations staff and resource limitations, we cannot Joshua.McFeeters@cms.hhs.gov or at
Conditions of Coverage; Prior accept comments by facsimile (FAX) 410–786–9732.
Authorization Process and transmission. Cancer Hospital Payments, contact
Requirements for Certain Covered Comments, including mass comment Scott Talaga via email Scott.Talaga@
Outpatient Department Services; submissions, must be submitted in one cms.hhs.gov or at 410–786–4142.
Potential Changes to the Laboratory of the following three ways (please CMS Web Posting of the OPPS and
Date of Service Policy; Changes to choose only one of the ways listed): ASC Payment Files, contact Chuck
Grandfathered Children’s Hospitals- 1. Electronically. You may (and we Braver via email Chuck.Braver@
Within-Hospitals; Notice of Closure of encourage you to) submit electronic cms.hhs.gov or at 410–786–6719.
Two Teaching Hospitals and comments on this regulation to http:// Control for Unnecessary Increases in
Opportunity To Apply for Available www.regulations.gov. Follow the Volume of Outpatient Services, contact
Slots instructions under the ‘‘submit a Elise Barringer via email
comment’’ tab. Elise.Barringer@cms.hhs.gov or at 410–
AGENCY: Centers for Medicare & 2. By regular mail. You may mail
Medicaid Services (CMS), HHS. 786–9222.
written comments to the following
ACTION: Final rule with comment period. Composite APCs (Low Dose
address ONLY: Centers for Medicare &
Brachytherapy and Multiple Imaging),
Medicaid Services, Department of
SUMMARY: This final rule with comment contact Elise Barringer via email
Health and Human Services, Attention:
period revises the Medicare hospital Elise.Barringer@cms.hhs.gov or at 410–
CMS–1717–FC, P.O. Box 8013,
outpatient prospective payment system 786–9222.
Baltimore, MD 21244–1850.
(OPPS) and the Medicare ambulatory Please allow sufficient time for mailed Comprehensive APCs (C–APCs),
surgical center (ASC) payment system comments to be received before the contact Lela Strong-Holloway via email
for Calendar Year 2020 based on our close of the comment period. Lela.Strong@cms.hhs.gov or at 410–786–
continuing experience with these 3. By express or overnight mail. You 3213, or Mitali Dayal via email at
systems. In this final rule with comment may send written comments via express Mitali.Dayal2@cms.hhs.gov or at 410–
period, we describe the changes to the or overnight mail to the following 786–4329.
amounts and factors used to determine address ONLY: Centers for Medicare & CPT and Level II HCPCS Codes,
the payment rates for Medicare services Medicaid Services, Department of contact Marjorie Baldo via email
paid under the OPPS and those paid Health and Human Services, Attention: Marjorie.Baldo@cms.hhs.gov or at 410–
under the ASC payment system. Also, CMS–1717–FC, Mail Stop C4–26–05, 786–4617.
this final rule with comment period 7500 Security Boulevard, Baltimore, MD Grandfathered Children’s Hospitals-
updates and refines the requirements for 21244–1850. within-Hospitals, contact Michele
the Hospital Outpatient Quality b. For delivery in Baltimore, MD— Hudson via email Michele.Hudson@
Reporting (OQR) Program and the ASC Centers for Medicare & Medicaid cms.hhs.gov or 410–786–4487.
Quality Reporting (ASCQR) Program. In Services, Department of Health and Hospital Cost Reporting and
addition, this final rule with comment Human Services, 7500 Security Chargemaster Comment Solicitation,
period establishes a process and Boulevard, Baltimore, MD 21244–1850. contact Dr. Terri Postma at 410–786–
requirements for prior authorization for For information on viewing public 4169.
certain covered outpatient department comments, we refer readers to the Hospital Outpatient Quality Reporting
services; revise the conditions for beginning of the SUPPLEMENTARY (OQR) Program Administration,
coverage of organ procurement INFORMATION section. Validation, and Reconsideration Issues,
organizations; and revise the regulations FOR FURTHER INFORMATION CONTACT: contact Anita Bhatia via email
to allow grandfathered children’s 2–Midnight Rule (Short Inpatient Anita.Bhatia@cms.hhs.gov or at 410–
hospitals-within-hospitals to increase Hospital Stays), contact Lela Strong- 786–7236.
the number of beds without resulting in Holloway via email Lela.Strong@ Hospital Outpatient Quality Reporting
the loss of grandfathered status; and cms.hhs.gov or at 410–786–3213. (OQR) Program Measures, contact
provides notice of the closure of two Advisory Panel on Hospital Vinitha Meyyur via email
teaching hospitals and the opportunity Outpatient Payment (HOP Panel), Vinitha.Meyyur@cms.hhs.gov or at 410–
to apply for available slots for purposes contact the HOP Panel mailbox at 786–8819.
of indirect medical education (IME) and APCPanel@cms.hhs.gov. Hospital Outpatient Visits (Emergency
direct graduate medical education Ambulatory Surgical Center (ASC) Department Visits and Critical Care
(DGME) payments. Payment System, contact Scott Talaga Visits), contact Elise Barringer via email
VerDate Sep<11>2014 20:50 Nov 08, 2019 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\12NOR2.SGM 12NOR2
Federal Register / Vol. 84, No. 218 / Tuesday, November 12, 2019 / Rules and Regulations 61143
Elise.Barringer@cms.hhs.gov or at 410– Payment Policy Mailbox at Current Procedural Terminology (CPT)

786–9222. PHPPaymentPolicy@cms.hhs.gov. Copyright Notice
Inpatient Only (IPO) Procedures List, Prior Authorization Process and Throughout this final rule with
contact Lela Strong-Holloway via email Requirements for Certain Hospital comment period, we use CPT codes and
Lela.Strong@cms.hhs.gov or at 410–786– Outpatient Department Services, contact descriptions to refer to a variety of
3213, or Au’Sha Washington via email Thomas Kessler via email at services. We note that CPT codes and
at Ausha.Washington@cms.hhs.gov or at Thomas.Kessler@cms.hhs.gov or at 410– descriptions are copyright 2018
410–786–3736. 786–1991. American Medical Association. All
New Technology Intraocular Lenses Rural Hospital Payments, contact Josh Rights Reserved. CPT is a registered
(NTIOLs), contact Scott Talaga via email McFeeters via email at trademark of the American Medical
Scott.Talaga@cms.hhs.gov or at 410– Joshua.McFeeters@cms.hhs.gov or at Association (AMA). Applicable Federal
786–4142. 410–786–9732. Acquisition Regulations (FAR and
No Cost/Full Credit and Partial Credit
Skin Substitutes, contact Josh Defense Federal Acquisition Regulations
Devices, contact Scott Talaga via email
McFeeters via email Joshua.McFeeters@ (DFAR) apply.
Scott.Talaga@cms.hhs.gov or at 410–
786–4142. cms.hhs.gov or at 410–786–9732. Table of Contents
Notice of Closure of Two Teaching Supervision of Outpatient
Therapeutic Services in Hospitals and I. Summary and Background
Hospitals and Opportunity to Apply for A. Executive Summary of This Document
Available Slots, contact Michele CAHs, contact Josh McFeeters via email B. Legislative and Regulatory Authority for
Hudson via email Michele.Hudson@ Joshua.McFeeters@cms.hhs.gov or at the Hospital OPPS
cms.hhs.gov or 410–786–4487. 410–786–9732. C. Excluded OPPS Services and Hospitals
OPPS Brachytherapy, contact Scott All Other Issues Related to Hospital D. Prior Rulemaking
Talaga via email Scott.Talaga@ Outpatient and Ambulatory Surgical E. Advisory Panel on Hospital Outpatient
cms.hhs.gov or at 410–786–4142. Center Payments Not Previously Payment (the HOP Panel or the Panel)
OPPS Data (APC Weights, Conversion Identified, contact Elise Barringer via F. Public Comments Received in Response
to the CY 2020 OPPS/ASC Proposed
Factor, Copayments, Cost-to-Charge email Elise.Barringer@cms.hhs.gov or at Rule
Ratios (CCRs), Data Claims, Geometric 410–786–9222. G. Public Comments Received on the CY
Mean Calculation, Outlier Payments, SUPPLEMENTARY INFORMATION: 2019 OPPS/ASC Final Rule With
and Wage Index), contact Erick Chuang Comment Period
via email Erick.Chuang@cms.hhs.gov or Inspection of Public Comments: All
II. Updates Affecting OPPS Payments
at 410–786–1816, or Scott Talaga via comments received before the close of A. Recalibration of APC Relative Payment
email Scott.Talaga@cms.hhs.gov or at the comment period are available for Weights
410–786–4142, or Josh McFeeters via viewing by the public, including any B. Conversion Factor Update
email at Joshua.McFeeters@cms.hhs.gov personally identifiable or confidential C. Wage Index Changes
or at 410–786–9732. business information that is included in D. Statewide Average Default Cost-to-
a comment. We post all comments Charge Ratios (CCRs)
OPPS Drugs, Radiopharmaceuticals, E. Adjustment for Rural Sole Community
Biologicals, and Biosimilar Products, received before the close of the
comment period on the following Hospitals (SCHs) and Essential Access
contact Josh McFeeters via email Community Hospitals (EACHs) Under
Joshua.McFeeters@cms.hhs.gov or at website as soon as possible after they Section 1833(t)(13)(B) of the Act for CY
410–786–9732. have been received: http:// 2020
OPPS New Technology Procedures/ www.regulations.gov/. Follow the search F. Payment Adjustment for Certain Cancer
Services, contact the New Technology instructions on that website to view Hospitals for CY 2020
APC mailbox at public comments. G. Hospital Outpatient Outlier Payments
H. Calculation of an Adjusted Medicare
NewTechAPCapplications@ Addenda Available Only Through the Payment From the National Unadjusted
cms.hhs.gov. Internet on the CMS Website Medicare Payment
OPPS Packaged Items/Services, I. Beneficiary Copayments
contact Lela Strong-Holloway via email In the past, a majority of the Addenda III. OPPS Ambulatory Payment Classification
Lela.Strong@cms.hhs.gov or at 410–786– referred to in our OPPS/ASC proposed (APC) Group Policies
3213, or Mitali Dayal via email at and final rules were published in the A. OPPS Treatment of New and Revised
Mitali.Dayal2@cms.hhs.gov or at 410– Federal Register as part of the annual HCPCS Codes
786–4329. rulemakings. However, beginning with B. OPPS Changes—Variations Within APCs
OPPS Pass-Through Devices, contact the CY 2012 OPPS/ASC proposed rule, C. New Technology APCs
the Device Pass-Through mailbox at all of the Addenda no longer appear in D. APC-Specific Policies
the Federal Register as part of the IV. OPPS Payment for Devices
DevicePTapplications@cms.hhs.gov. A. Pass-Through Payments for Devices
OPPS Status Indicators (SI) and annual OPPS/ASC proposed and final
B. Device-Intensive Procedures
Comment Indicators (CI), contact rules to decrease administrative burden V. OPPS Payment Changes for Drugs,
Marina Kushnirova via email and reduce costs associated with Biologicals, and Radiopharmaceuticals
Marina.Kushnirova@cms.hhs.gov or at publishing lengthy tables. Instead, these A. OPPS Transitional Pass-Through
410–786–2682. Addenda are published and available Payment for Additional Costs of Drugs,
Organ Procurement Organization only on the CMS website. The Addenda Biologicals, and Radiopharmaceuticals
(OPO) Conditions for Coverage (CfCs), relating to the OPPS are available at: B. OPPS Payment for Drugs, Biologicals,
contact Alpha-Banu Wilson via email at https://www.cms.gov/Medicare/ and Radiopharmaceuticals Without Pass-
AlphaBanu.Wilson@cms.hhs.gov or at Medicare-Fee-for-Service-Payment/ Through Payment Status
VI. Estimate of OPPS Transitional Pass-
410–786–8687, or Diane Corning via HospitalOutpatientPPS/index.html. The
Through Spending for Drugs, Biologicals,
email at Diane.Corning@cms.hhs.gov or Addenda relating to the ASC payment Radiopharmaceuticals, and Devices
at 410–786–8486. system are available at: https:// A. Background
Partial Hospitalization Program (PHP) www.cms.gov/Medicare/Medicare-Fee- B. Estimate of Pass-Through Spending
and Community Mental Health Center for-Service-Payment/Hospital VII. OPPS Payment for Hospital Outpatient
(CMHC) Issues, contact the PHP OutpatientPPS/index.html. Visits and Critical Care Services
61144 Federal Register / Vol. 84, No. 218 / Tuesday, November 12, 2019 / Rules and Regulations
VIII. Payment for Partial Hospitalization XVII. Organ Procurement Organizations F. Potential Revisions to the Laboratory
Services (OPOs) Conditions for Coverage (CfCs): Date of Service Policy
A. Background Revision of the Definition of ‘‘Expected G. Effect of Changes to Requirements for
B. PHP APC Update for CY 2020 Donation Rate’’ Grandfathered Children’s Hospitals-
C. Outlier Policy for CMHCs A. Background Within-Hospitals (HwHs)
D. Update to PHP Allowable HCPCS Codes B. Revision of the Definition of ‘‘Expected H. Regulatory Review Costs
IX. Procedures That Will Be Paid Only as Donation Rate’’ I. Regulatory Flexibility Act (RFA)
Inpatient Procedures C. Request for Information Regarding Analysis
A. Background Potential Changes to the Organ J. Unfunded Mandates Reform Act
B. Changes to the Inpatient Only (IPO) List Procurement Organization and Analysis
X. Nonrecurring Policy Changes Transplant Center Regulations K. Reducing Regulation and Controlling
A. Changes in the Level of Supervision of XVIII. Clinical Laboratory Fee Schedule: Regulatory Costs
Outpatient Therapeutic Services in Potential Revisions to the Laboratory L. Conclusion
Hospitals and Critical Access Hospitals Date of Service Policy XXVII. Federalism Analysis
(CAHs) A. Background on the Medicare Part B Regulation Text
B. Short Inpatient Hospital Stays Laboratory Date of Service Policy
C. Method To Control Unnecessary B. Medicare DOS Policy and the ‘‘14-Day I. Summary and Background
Increases in the Volume of Clinic Visit Rule’’
Services Furnished in Excepted Off- C. Billing and Payment for Laboratory A. Executive Summary of This
Campus Provider-Based Departments Services Under the OPPS Document
(PBDs) D. ADLTs Under the New Private Payor
XI. CY 2020 OPPS Payment Status and Rate-Based CLFS
1. Purpose
Comment Indicators E. Additional Laboratory DOS Policy
A. CY 2020 OPPS Payment Status Indicator In this final rule with comment
Exception for the Hospital Outpatient
Definitions Setting period, we are updating the payment
B. CY 2020 Comment Indicator Definitions F. Potential Revisions to Laboratory DOS policies and payment rates for services
XII. MedPAC Recommendations Policy and Request for Public Comments furnished to Medicare beneficiaries in
A. OPPS Payment Rates Update XIX. Prior Authorization Process and hospital outpatient departments
B. ASC Conversion Factor Update Requirements for Certain Hospital (HOPDs) and ambulatory surgical
C. ASC Cost Data Outpatient Department (OPD) Services
XIII. Updates to the Ambulatory Surgical
centers (ASCs), beginning January 1,
A. Background 2020. Section 1833(t) of the Social
Center (ASC) Payment System B. Prior Authorization Process for Certain
A. Background Security Act (the Act) requires us to
OPD Services
B. ASC Treatment of New and Revised annually review and update the
C. List of Outpatient Department Services
Codes
Requiring Prior Authorization payment rates for services payable
C. Update to the List of ASC Covered under the Hospital Outpatient
XX. Comments Received in Response to
Surgical Procedures and Covered Prospective Payment System (OPPS).
Comment Solicitation on Cost Reporting,
Ancillary Services Specifically, section 1833(t)(9)(A) of the
Maintenance of Hospital Chargemasters,
D. Update and Payment for ASC Covered
Surgical Procedures and Covered and Related Medicare Payment Issues Act requires the Secretary to review
Ancillary Services XXI. Changes to Requirements for certain components of the OPPS not less
E. New Technology Intraocular Lenses Grandfathered Children’s Hospitals- often than annually, and to revise the
(NTIOLs) Within-Hospitals (HwHs) groups, the relative payment weights,
XXII. Notice of Closure of Two Teaching
F. ASC Payment and Comment Indicators and the wage and other adjustments that
G. Calculation of the ASC Payment Rates Hospitals and Opportunity To Apply for
Available Slots take into account changes in medical
and the ASC Conversion Factor practices, changes in technologies, and
XIV. Requirements for the Hospital XXIII. Files Available to the Public via the
Internet the addition of new services, new cost
Outpatient Quality Reporting (OQR)
Program XXIV. Collection of Information data, and other relevant information and
A. Background Requirements factors. In addition, under section
B. Hospital OQR Program Quality A. Statutory Requirement for Solicitation 1833(i) of the Act, we annually review
Measures of Comments and update the ASC payment rates. This
C. Administrative Requirements B. ICRs for the Hospital OQR Program final rule with comment period also
D. Form, Manner, and Timing of Data C. ICRs for the ASCQR Program
includes additional policy changes
Submitted for the Hospital OQR Program D. ICRs for Revision of the Definition of
‘‘Expected Donation Rate’’ for Organ made in accordance with our experience
E. Payment Reduction for Hospitals That with the OPPS and the ASC payment
Fail To Meet the Hospital OQR Program Procurement Organizations
Requirements for the CY 2020 Payment E. ICR for Prior Authorization Process and system. We describe these and various
Determination Requirements for Certain Hospital other statutory authorities in the
XV. Requirements for the Ambulatory Outpatient Department (OPD) Services relevant sections of this final rule with
Surgical Center Quality Reporting F. Potential Revisions to Laboratory Date of comment period. In addition, this final
(ASCQR) Program Service (DOS) Policy rule with comment period updates and
A. Background G. Total Reduction in Burden Hours and in refines the requirements for the Hospital
B. ASCQR Program Quality Measures Costs
C. Administrative Requirements XXV. Response to Comments
XXVI. Economic Analyses Program and the ASC Quality Reporting
D. Form, Manner, and Timing of Data
Submitted for the ASCQR Program A. Statement of Need (ASCQR) Program.
E. Payment Reduction for ASCs That Fail B. Overall Impact for the Provisions of This In this final rule with comment
To Meet the ASCQR Program Final Rule period, we establish a process and
Requirements C. Detailed Economic Analyses requirements for prior authorization for
XVI. Requirements for Hospitals To Make D. Effects of Prior Authorization Process
certain covered outpatient department
Public a List of Their Standard Charges and Requirements for Certain Hospital
and Request for Information (RFI): Outpatient Department (OPD) Services services; revise the conditions for
Quality Measurement Relating to Price E. Effects of Requirement Relating to coverage for organ procurement
Transparency for Improving Beneficiary Changes in the Definition of Expected organizations; and revise the regulations
Access to Provider and Supplier Charge Donation Rate for Organ Procurement to allow grandfathered children’s
Information Organizations hospitals-within-hospitals to increase
the number of beds without resulting in to control unnecessary increases in the continue the 7.1 percent adjustment for
the loss of grandfathered status. volume of this service. We acknowledge future years in the absence of data to
that the district court vacated the suggest a different percentage
2. Summary of the Major Provisions
volume control policy for CY 2019 and adjustment should apply.
• OPPS Update: For CY 2020, we are we are working to ensure affected 2019 • 340B-Acquired Drugs: We are
increasing the payment rates under the claims for clinic visits are paid continuing to pay ASP–22.5 percent for
OPPS by an Outpatient Department consistent with the court’s order. We do 340B-acquired drugs including when
(OPD) fee schedule increase factor of 2.6 not believe it is appropriate at this time furnished in nonexcepted off-campus
percent. This increase factor is based on to make a change to the second year of PBDs paid under the PFS. In light of
the final hospital inpatient market the two-year phase-in of the clinic visit ongoing litigation, we also summarized
basket percentage increase of 3.0 policy. The government has appeal comments received on a potential
percent for inpatient services paid rights, and is still evaluating the rulings remedy for 2018 and 2019. CMS
under the hospital inpatient prospective and considering, at the time of this announced in the Federal Register (84
payment system (IPPS), minus the writing, whether to appeal from the FR 51590) its intent to conduct a 340B
multifactor productivity (MFP) final judgment. hospital survey to collect drug
adjustment required by the Affordable • Device Pass-Through Payment acquisition cost data for CY 2018 and
Care Act of 0.4 percentage point. Based Applications: For CY 2020, we 2019. Such survey data may be used in
on this update, we estimate that total evaluated seven applications for device setting the Medicare payment amount
payments to OPPS providers (including pass-through payments and based on for drugs acquired by 340B hospitals for
beneficiary cost-sharing and estimated public comments received, we are cost years going forward, and also may
changes in enrollment, utilization, and approving four of these applications for be used to devise a remedy for prior
case-mix) for calendar year (CY) 2020 device pass-through payment status. years in the event of an adverse decision
will be approximately $79.0 billion, an Additionally, we are approving an on appeal. In the event 340B hospital
increase of approximately $6.3 billion additional application that was not survey data are not used to devise a
compared to estimated CY 2019 OPPS discussed in the CY 2020 OPPS/ASC remedy, we intend to consider the
payments. proposed rule, but has received a suggestions commenters submitted in
We are continuing to implement the Breakthrough Devices designation from response to the comment solicitation in
statutory 2.0 percentage point reduction the Food and Drug Administration the proposed rule to propose a remedy
in payments for hospitals failing to meet (FDA) and qualifies for the alternative in the CY 2021 OPPS/ASC proposed
the hospital outpatient quality reporting pathway to the OPPS device pass- rule.
requirements, by applying a reporting through substantial clinical • ASC Payment Update: For CYs
factor of 0.981 to the OPPS payments improvement criterion. 2019 through 2023, we adopted a policy
and copayments for all applicable • Changes to Substantial Clinical to update the ASC payment system
services. Improvement Criterion: For CY 2020, we using the hospital market basket update.
• 2-Midnight Rule (Short Inpatient are finalizing an alternative pathway to Using the hospital market basket
Hospital Stays): For CY 2020, we are the substantial clinical improvement methodology, for CY 2020, we are
establishing a 2-year exemption from criterion for devices approved under the increasing payment rates under the ASC
Beneficiary and Family-Centered Care FDA Breakthrough Devices Program to payment system by 2.6 percent for ASCs
Quality Improvement Organizations qualify for device pass-through status that meet the quality reporting
(BFCC–QIOs) referrals to Recovery beginning with determinations effective requirements under the ASCQR
Audit Contractors (RACs) and RAC on or after January 1, 2020. Program. This increase is based on a
reviews for ‘‘patient status’’ (that is, site- • Cancer Hospital Payment hospital market basket percentage
of-service) for procedures that are Adjustment: For CY 2020, we are increase of 3.0 percent minus a
removed from the inpatient only (IPO) continuing to provide additional proposed multifactor productivity
list under the OPPS beginning on payments to cancer hospitals so that a adjustment required by the Affordable
January 1, 2020. cancer hospital’s payment-to-cost ratio Care Act of 0.4 percentage point. Based
• Comprehensive APCs: For CY 2020, (PCR) after the additional payments is on this update, we estimate that total
we are creating two new comprehensive equal to the weighted average PCR for payments to ASCs (including
APCs (C–APCs). These new C–APCs the other OPPS hospitals using the most beneficiary cost-sharing and estimated
include the following: C–APC 5182 recently submitted or settled cost report changes in enrollment, utilization, and
(Level 2 Vascular Procedures) and C– data. However, section 16002(b) of the case-mix) for CY 2020 will be
APC 5461 (Level 1 Neurostimulator and 21st Century Cures Act requires that this approximately $4.96 billion, an increase
Related Procedures). This increases the weighted average PCR be reduced by 1.0 of approximately $230 million
total number of C–APCs to 67. percentage point. Based on the data and compared to estimated CY 2019
• Changes to the Inpatient Only (IPO) the required 1.0 percentage point Medicare payments.
List: For CY 2020, we are removing reduction, we are providing that a target • Changes to the List of ASC Covered
Total Hip Arthroplasty, six spinal PCR of 0.89 will be used to determine Surgical Procedures: For CY 2020, we
procedure codes, and five anesthesia the CY 2020 cancer hospital payment are adding several procedures to the
codes from the inpatient only list. adjustment to be paid at cost report ASC list of covered surgical procedures.
• Method to Control Unnecessary settlement. That is, the payment Additions to the list include a total knee
Increases in the Volume of Clinic Visit adjustments will be the additional arthroplasty procedure, a mosaicplasty
Services Furnished in Excepted Off- payments needed to result in a PCR procedure, as well as six coronary
Campus Provider-Based Departments equal to 0.89 for each cancer hospital. intervention procedures, as well as 12
(PBDs): For CY 2020, we are completing • Rural Adjustment: For 2020 and surgical procedures with new CPT
the phase-in of the reduction in subsequent years, we are continuing the codes for CY 2020.
payment for the clinic visit services 7.1 percent adjustment to OPPS • Changes to the Level of Supervision
described by HCPCS code G0463 payments for certain rural SCHs, of Outpatient Therapeutic Services in
furnished in expected off-campus including essential access community Hospitals and Critical Access Hospitals:
provider based departments as a method hospitals (EACHs). We intend to For CY 2020, we are changing the
minimum required level of supervision a. Impacts of All OPPS Changes d. Impacts of the OPD Fee Schedule
from direct supervision to general Table 70 in section XXV.B of this final Increase Factor
supervision for all hospital outpatient rule with comment period displays the
therapeutic services provided by all For the CY 2020 OPPS/ASC, we are
distributional impact of all the OPPS establishing an OPD fee schedule
hospitals and CAHs. This ensures a changes on various groups of hospitals
standard minimum level of supervision increase factor of 2.6 percent and
and CMHCs for CY 2020 compared to all
for each hospital outpatient service applying that increase factor to the
estimated OPPS payments in CY 2019.
furnished incident to a physician’s conversion factor for CY 2020. As a
We estimate that the policies in this
service. result of the OPD fee schedule increase
• Hospital Outpatient Quality final rule with comment period will
result in a 1.3 percent overall increase factor and other budget neutrality
Reporting (OQR) Program: For the adjustments, we estimate that urban
Hospital OQR Program, we are removing in OPPS payments to providers. We
estimate that total OPPS payments for hospitals will experience an increase of
OP–33: External Beam Radiotherapy for approximately 2.7 percent and that rural
Bone Metastases for the CY 2022 CY 2020, including beneficiary cost-
sharing, to the approximately 3,732 hospitals will experience an increase of
payment determination and subsequent 2.8 percent. Classifying hospitals by
years with modification. facilities paid under the OPPS
(including general acute care hospitals, teaching status, we estimate
• Ambulatory Surgical Center Quality
Reporting (ASCQR) Program: For the children’s hospitals, cancer hospitals, nonteaching hospitals will experience
ASCQR Program, we are adopting one and CMHCs) will increase by an increase of 2.8 percent, minor
new measure, ASC–19: Facility-Level 7- approximately $1.21 billion compared teaching hospitals will experience an
Day Hospital Visits after General to CY 2019 payments, excluding our increase of 2.9 percent, and major
Surgery Procedures Performed at estimated changes in enrollment, teaching hospitals will experience an
Ambulatory Surgical Centers, beginning utilization, and case-mix. increase of 2.4 percent. We also
with the CY 2024 payment We estimated the isolated impact of classified hospitals by the type of
determination and for subsequent years. our OPPS policies on CMHCs because ownership. We estimate that hospitals
• Prior Authorization Process and CMHCs are only paid for partial with voluntary ownership will
Requirements for Certain Hospital hospitalization services under the experience an increase of 2.6 percent in
Outpatient Department (OPD) Services: OPPS. Continuing the provider-specific payments, while hospitals with
We are finalizing a prior authorization structure we adopted beginning in CY government ownership will experience
process using the authority at section 2011, and basing payment fully on the an increase of 2.8 percent in payments.
1833(t)(2)(F) of the Act as a method for type of provider furnishing the service, We estimate that hospitals with
controlling unnecessary increases in the we estimate a 3.7 percent increase in CY proprietary ownership will experience
volume of the following five categories 2020 payments to CMHCs relative to
an increase of 3.2 percent in payments.
of services: (1) Blepharoplasty, (2) their CY 2019 payments.
botulinum toxin injections, (3) b. Impacts of the Updated Wage Indexes e. Impacts of the ASC Payment Update
panniculectomy, (4) rhinoplasty, and (5)
vein ablation. We estimate that our update of the For impact purposes, the surgical
• Organ Procurement Organizations wage indexes based on the FY 2020 procedures on the ASC list of covered
(OPOs) Conditions for Coverage (CfCs) IPPS proposed rule wage indexes will procedures are aggregated into surgical
Revision of the Definition of ‘‘Expected result in no estimated payment change specialty groups using CPT and HCPCS
Donation Rate.’’ We are revising the for urban hospitals under the OPPS and code range definitions. The percentage
definition of ‘‘expected donation rate’’ an estimated increase of 0.7 percent for change in estimated total payments by
that is included in the second outcome rural hospitals. These wage indexes specialty groups under the CY 2020
measure to match the Scientific Registry include the continued implementation payment rates, compared to estimated
of Transplant Recipients (SRTR) of the OMB labor market area CY 2019 payment rates, generally ranges
definition. In conjunction with this delineations based on 2010 Decennial between an increase of 1 and 5 percent,
change, we are also temporarily Census data, with updates, as discussed depending on the service, with some
suspending the requirement that OPOs in section II.C. of this final rule with exceptions. We estimate the impact of
meet two of three outcome measures for comment period. applying the hospital market basket
the 2022 recertification cycle only. c. Impacts of the Rural Adjustment and update to ASC payment rates will
• Request for Information Regarding the Cancer Hospital Payment increase payments by $230 million
Potential Changes to the Organ Adjustment under the ASC payment system in CY
Procurement Organization and 2020.
Transplant Center Regulations: We There are no significant impacts of
solicited public comments regarding our CY 2020 payment policies for f. Impact of the Changes to the Hospital
what revisions may be appropriate for hospitals that are eligible for the rural OQR Program
the current OPO CfCs and the current adjustment or for the cancer hospital
transplant center CoPs. In addition, we payment adjustment. We are not making Across 3,300 hospitals participating
solicited public comments on two any change in policies for determining in the Hospital OQR Program, we
potential outcome measures for OPOs. the rural hospital payment adjustments. estimate that our requirements will
While we are implementing the required result in the following changes to costs
3. Summary of Costs and Benefits reduction to the cancer hospital and burdens related to information
In sections XXVI. and XXVII. of this payment adjustment required by section collection for the Hospital OQR Program
final rule with comment period, we set 16002 of the 21st Century Cures Act for compared to previously adopted
forth a detailed analysis of the CY 2020, the target payment-to-cost requirements: There is a net reduction
regulatory and federalism impacts that ratio (PCR) for CY 2020 is 0.89, of one measure reported by hospitals,
the changes will have on affected compared to 0.88 for CY 2019, and which results in a minimal net
entities and beneficiaries. Key estimated therefore has a slight impact on budget reduction in burden of $21,379.
impacts are described below. neutrality adjustments.
g. Impacts of the Revision of the 2003 (MMA) (Pub. L. 108–173); the comment period. Section 1833(t)(1)(B)
Definition of ‘‘Expected Donation Rate’’ Deficit Reduction Act of 2005 (DRA) of the Act provides for payment under
for Organ Procurement Organizations (Pub. L. 109–171), enacted on February the OPPS for hospital outpatient
We are finalizing our revision to the 8, 2006; the Medicare Improvements services designated by the Secretary
definition of ‘‘expected donation rate’’ and Extension Act under Division B of (which includes partial hospitalization
used in the second outcome measure of Title I of the Tax Relief and Health Care services furnished by CMHCs), and
the OPO CfCs at 42 CFR 486.318(a) and Act of 2006 (MIEA–TRHCA) (Pub. L. certain inpatient hospital services that
(b) to eliminate the potential for 109–432), enacted on December 20, are paid under Medicare Part B.
confusion in the OPO community due to 2006; the Medicare, Medicaid, and The OPPS rate is an unadjusted
different definitions of the same term; SCHIP Extension Act of 2007 (MMSEA) national payment amount that includes
however, due to comments received on (Pub. L. 110–173), enacted on December the Medicare payment and the
the CY 2020 OPPS/ASC proposed rule 29, 2007; the Medicare Improvements beneficiary copayment. This rate is
we are finalizing a policy that would not for Patients and Providers Act of 2008 divided into a labor-related amount and
require all OPOs to meet the standards (MIPPA) (Pub. L. 110–275), enacted on a nonlabor-related amount. The labor-
of the second outcome measure for the July 15, 2008; the Patient Protection and related amount is adjusted for area wage
2022 recertification cycle only. As a Affordable Care Act (Pub. L. 111–148), differences using the hospital inpatient
result, OPOs will only have to meet one enacted on March 23, 2010, as amended wage index value for the locality in
of the remaining outcome measures, by the Health Care and Education which the hospital or CMHC is located.
which may provide temporary relief for Reconciliation Act of 2010 (Pub. L. 111– All services and items within an APC
a small number of OPOs that, absent 152), enacted on March 30, 2010 (these group are comparable clinically and
this waiver, might have faced de- two public laws are collectively known with respect to resource use, as required
certification and the appeal process due as the Affordable Care Act); the by section 1833(t)(2)(B) of the Act. In
to only meeting one outcome measure. Medicare and Medicaid Extenders Act accordance with section 1833(t)(2)(B) of
For subsequent recertification cycles, of 2010 (MMEA, Pub. L. 111–309); the the Act, subject to certain exceptions,
all 58 OPOs will once again be required Temporary Payroll Tax Cut items and services within an APC group
to meet two out of three outcome Continuation Act of 2011 (TPTCCA, cannot be considered comparable with
measures detailed in the OPO CfCs. The Pub. L. 112–78), enacted on December respect to the use of resources if the
revised definition of ‘‘expected donation 23, 2011; the Middle Class Tax Relief highest median cost (or mean cost, if
rate’’ used in the second outcome and Job Creation Act of 2012 elected by the Secretary) for an item or
measure will not affect data collection (MCTRJCA, Pub. L. 112–96), enacted on service in the APC group is more than
or reporting by the OPTN and SRTR, nor February 22, 2012; the American 2 times greater than the lowest median
their statistical evaluation of OPO Taxpayer Relief Act of 2012 (Pub. L. cost (or mean cost, if elected by the
performance; therefore, it will not result 112–240), enacted January 2, 2013; the Secretary) for an item or service within
in any quantifiable financial impact. Pathway for SGR Reform Act of 2013 the same APC group (referred to as the
(Pub. L. 113–67) enacted on December ‘‘2 times rule’’). In implementing this
B. Legislative and Regulatory Authority 26, 2013; the Protecting Access to provision, we generally use the cost of
for the Hospital OPPS Medicare Act of 2014 (PAMA, Pub. L. the item or service assigned to an APC
When Title XVIII of the Act was 113–93), enacted on March 27, 2014; the group.
enacted, Medicare payment for hospital Medicare Access and CHIP For new technology items and
outpatient services was based on Reauthorization Act (MACRA) of 2015 services, special payments under the
hospital-specific costs. In an effort to (Pub. L. 114–10), enacted April 16, OPPS may be made in one of two ways.
ensure that Medicare and its 2015; the Bipartisan Budget Act of 2015 Section 1833(t)(6) of the Act provides
beneficiaries pay appropriately for (Pub. L. 114–74), enacted November 2, for temporary additional payments,
services and to encourage more efficient 2015; the Consolidated Appropriations which we refer to as ‘‘transitional pass-
delivery of care, the Congress mandated Act, 2016 (Pub. L. 114–113), enacted on through payments,’’ for at least 2 but not
replacement of the reasonable cost- December 18, 2015, the 21st Century more than 3 years for certain drugs,
based payment methodology with a Cures Act (Pub. L. 114–255), enacted on biological agents, brachytherapy devices
prospective payment system (PPS). The December 13, 2016; the Consolidated used for the treatment of cancer, and
Balanced Budget Act of 1997 (BBA) Appropriations Act, 2018 (Pub. L. 115– categories of other medical devices. For
(Pub. L. 105–33) added section 1833(t) 141), enacted on March 23, 2018; and new technology services that are not
to the Act, authorizing implementation the Substance Use-Disorder Prevention eligible for transitional pass-through
of a PPS for hospital outpatient services. that Promotes Opioid Recovery and payments, and for which we lack
The OPPS was first implemented for Treatment for Patients and Communities sufficient clinical information and cost
services furnished on or after August 1, Act (Pub. L. 115–271), enacted on data to appropriately assign them to a
2000. Implementing regulations for the October 24, 2018. clinical APC group, we have established
OPPS are located at 42 CFR parts 410 Under the OPPS, we generally pay for special APC groups based on costs,
and 419. hospital Part B services on a rate-per- which we refer to as New Technology
The Medicare, Medicaid, and SCHIP service basis that varies according to the APCs. These New Technology APCs are
Balanced Budget Refinement Act of APC group to which the service is designated by cost bands which allow
1999 (BBRA) (Pub. L. 106–113) made assigned. We use the Healthcare us to provide appropriate and consistent
major changes in the hospital OPPS. Common Procedure Coding System payment for designated new procedures
The following Acts made additional (HCPCS) (which includes certain that are not yet reflected in our claims
changes to the OPPS: The Medicare, Current Procedural Terminology (CPT) data. Similar to pass-through payments,
Medicaid, and SCHIP Benefits codes) to identify and group the services an assignment to a New Technology
Improvement and Protection Act of within each APC. The OPPS includes APC is temporary; that is, we retain a
2000 (BIPA) (Pub. L. 106–554); the payment for most hospital outpatient service within a New Technology APC
Medicare Prescription Drug, services, except those identified in until we acquire sufficient data to assign
Improvement, and Modernization Act of section I.C. of this final rule with it to a clinically appropriate APC group.
C. Excluded OPPS Services and The hospital OPPS was first composed of appropriate representatives
Hospitals implemented for services furnished on of providers (currently employed full-
Section 1833(t)(1)(B)(i) of the Act or after August 1, 2000. Section time, not as consultants, in their
authorizes the Secretary to designate the 1833(t)(9)(A) of the Act requires the respective areas of expertise) who
hospital outpatient services that are Secretary to review certain components review clinical data and advise CMS
paid under the OPPS. While most of the OPPS, not less often than about the clinical integrity of the APC
hospital outpatient services are payable annually, and to revise the groups, groups and their payment weights.
under the OPPS, section relative payment weights, and the wage Since CY 2012, the Panel also is charged
1833(t)(1)(B)(iv) of the Act excludes and other adjustments that take into with advising the Secretary on the
payment for ambulance, physical and account changes in medical practices, appropriate level of supervision for
occupational therapy, and speech- changes in technologies, and the individual hospital outpatient
language pathology services, for which addition of new services, new cost data, therapeutic services. The Panel is
payment is made under a fee schedule. and other relevant information and technical in nature, and it is governed
It also excludes screening factors. by the provisions of the Federal
mammography, diagnostic Since initially implementing the Advisory Committee Act (FACA). The
mammography, and effective January 1, OPPS, we have published final rules in current charter specifies, among other
2011, an annual wellness visit providing the Federal Register annually to requirements, that the Panel—
implement statutory requirements and • May advise on the clinical integrity
personalized prevention plan services.
changes arising from our continuing of Ambulatory Payment Classification
The Secretary exercises the authority
experience with this system. These rules (APC) groups and their associated
granted under the statute to also exclude
can be viewed on the CMS website at: weights;
from the OPPS certain services that are • May advise on the appropriate
paid under fee schedules or other https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/ supervision level for hospital outpatient
payment systems. Such excluded services;
services include, for example, the HospitalOutpatientPPS/Hospital-
Outpatient-Regulations-and- • Continues to be technical in nature;
professional services of physicians and • Is governed by the provisions of the
nonphysician practitioners paid under Notices.html.
FACA;
the Medicare Physician Fee Schedule E. Advisory Panel on Hospital • Has a Designated Federal Official
(MPFS); certain laboratory services paid Outpatient Payment (the HOP Panel or (DFO); and
under the Clinical Laboratory Fee the Panel) • Is chaired by a Federal Official
Schedule (CLFS); services for designated by the Secretary.
beneficiaries with end-stage renal 1. Authority of the Panel
The Panel’s charter was amended on
disease (ESRD) that are paid under the Section 1833(t)(9)(A) of the Act, as November 15, 2011, renaming the Panel
ESRD prospective payment system; and amended by section 201(h) of Public and expanding the Panel’s authority to
services and procedures that require an Law 106–113, and redesignated by include supervision of hospital
inpatient stay that are paid under the section 202(a)(2) of Public Law 106–113, outpatient therapeutic services and to
hospital IPPS. In addition, section requires that we consult with an add critical access hospital (CAH)
1833(t)(1)(B)(v) of the Act does not external advisory panel of experts to representation to its membership. The
include applicable items and services annually review the clinical integrity of Panel’s charter was also amended on
(as defined in subparagraph (A) of the payment groups and their weights November 6, 2014 (80 FR 23009), and
paragraph (21)) that are furnished on or under the OPPS. In CY 2000, based on the number of members was revised
after January 1, 2017 by an off-campus section 1833(t)(9)(A) of the Act, the from up to 19 to up to 15 members. The
outpatient department of a provider (as Secretary established the Advisory Panel’s current charter was approved on
defined in subparagraph (B) of Panel on Ambulatory Payment November 19, 2018, for a 2-year period
paragraph (21). We set forth the services Classification Groups (APC Panel) to (84 FR 26117).
that are excluded from payment under fulfill this requirement. In CY 2011, The current Panel membership and
the OPPS in regulations at 42 CFR based on section 222 of the Public other information pertaining to the
419.22. Health Service Act, which gives Panel, including its charter, Federal
Under § 419.20(b) of the regulations, discretionary authority to the Secretary Register notices, membership, meeting
we specify the types of hospitals that are to convene advisory councils and dates, agenda topics, and meeting
excluded from payment under the committees, the Secretary expanded the reports, can be viewed on the CMS
OPPS. These excluded hospitals panel’s scope to include the supervision website at: https://www.cms.gov/
include: of hospital outpatient therapeutic Regulations-and-Guidance/Guidance/
• Critical access hospitals (CAHs); services in addition to the APC groups FACA/AdvisoryPanelonAmbulatory
• Hospitals located in Maryland and and weights. To reflect this new role of PaymentClassificationGroups.html.
paid under Maryland’s All-Payer or the panel, the Secretary changed the
3. Panel Meetings and Organizational
Total Cost of Care Model; panel’s name to the Advisory Panel on
Structure
• Hospitals located outside of the 50 Hospital Outpatient Payment (the HOP
States, the District of Columbia, and Panel or the Panel). The HOP Panel is The Panel has held many meetings,
Puerto Rico; and not restricted to using data compiled by with the last meeting taking place on
• Indian Health Service (IHS) CMS, and in conducting its review, it August 19, 2019. Prior to each meeting,
hospitals. may use data collected or developed by we publish a notice in the Federal
organizations outside the Department. Register to announce the meeting and,
D. Prior Rulemaking when necessary, to solicit nominations
On April 7, 2000, we published in the 2. Establishment of the Panel for Panel membership, to announce new
Federal Register a final rule with On November 21, 2000, the Secretary members, and to announce any other
comment period (65 FR 18434) to signed the initial charter establishing changes of which the public should be
implement a prospective payment the Panel, and, at that time, named the aware. Beginning in CY 2017, we have
system for hospital outpatient services. APC Panel. This expert panel is transitioned to one meeting per year (81
FR 31941). Further information on the generally announced through either a same basic methodology that we
2019 summer meeting can be found in separate Federal Register notice or described in the CY 2019 OPPS/ASC
the meeting notice titled ‘‘Medicare subregulatory channel such as the CMS final rule with comment period (83 FR
Program: Announcement of the website, or both. 58827 through 58828), using updated
Advisory Panel on Hospital Outpatient CY 2018 claims data. That is, as we
F. Public Comments Received in
Payment (the Panel) Meeting on August proposed, we recalibrate the relative
Response to the CY 2020 OPPS/ASC
19 through 20, 2019’’ (84 FR 26117). payment weights for each APC based on
In addition, the Panel has established Proposed Rule
claims and cost report data for hospital
an operational structure that, in part, We received over 3400 timely pieces outpatient department (HOPD) services,
currently includes the use of three of correspondence on the CY 2020 using the most recent available data to
subcommittees to facilitate its required OPPS/ASC proposed rule that appeared construct a database for calculating APC
review process. The three current in the Federal Register on August 9, group weights.
subcommittees include the following: 2019 (84 FR 39398). We note that we For the purpose of recalibrating the
• APC Groups and Status Indicator received some public comments that APC relative payment weights for CY
Assignments Subcommittee, which were outside the scope of the CY 2020 2020, we began with approximately 164
advises the Panel on the appropriate OPPS/ASC proposed rule. Out-of-scope- million final action claims (claims for
status indicators to be assigned to public comments are not addressed in which all disputes and adjustments
HCPCS codes, including but not limited this CY 2020 OPPS/ASC final rule with have been resolved and payment has
to whether a HCPCS code or a category comment period. Summaries of those been made) for HOPD services furnished
of codes should be packaged or public comments that are within the on or after January 1, 2018, and before
separately paid, as well as the scope of the proposed rule and our January 1, 2019, before applying our
appropriate APC assignment of HCPCS responses are set forth in the various exclusionary criteria and other
codes regarding services for which sections of this final rule with comment methodological adjustments. After the
separate payment is made; period under the appropriate headings. application of those data processing
• Data Subcommittee, which is changes, we used approximately 88
G. Public Comments Received on the CY
responsible for studying the data issues million final action claims to develop
2019 OPPS/ASC Final Rule With
confronting the Panel and for the proposed CY 2020 OPPS payment
Comment Period
recommending options for resolving weights. For exact numbers of claims
them; and We received over 540 timely pieces of used and additional details on the
• Visits and Observation correspondence on the CY 2019 OPPS/ claims accounting process, we refer
Subcommittee, which reviews and ASC final rule with comment period readers to the claims accounting
makes recommendations to the Panel on that appeared in the Federal Register on narrative under supporting
all technical issues pertaining to November 30, 2018 (83 FR 61567), some documentation for the CY 2020 OPPS/
observation services and hospital of which contained comments on the ASC proposed rule on the CMS website
outpatient visits paid under the OPPS. interim APC assignments and/or status at: http://www.cms.gov/Medicare/
Each of these subcommittees was indicators of new or replacement Level Medicare-Fee-for-Service-Payment/
established by a majority vote from the II HCPCS codes (identified with HospitalOutpatientPPS/index.html.
full Panel during a scheduled Panel comment indicator ‘‘NI’’ in OPPS Addendum N to the proposed rule
meeting, and the Panel recommended at Addendum B, ASC Addendum AA, and (which is available via the internet on
the August 19, 2019, meeting that the ASC Addendum BB to that final rule). the CMS website) included the
subcommittees continue. We accepted Summaries of the public comments on proposed list of bypass codes for CY
this recommendation. new or replacement Level II HCPCS 2020. The proposed list of bypass codes
For discussions of earlier Panel codes are set forth in the CY 2020 contained codes that were reported on
meetings and recommendations, we OPPS/ASC proposed rule and this final claims for services in CY 2018 and,
refer readers to previously published rule with comment period under the therefore, included codes that were in
OPPS/ASC proposed and final rules, the appropriate subject matter headings. effect in CY 2018 and used for billing,
CMS website mentioned earlier in this II. Updates Affecting OPPS Payments but were deleted for CY 2019. We
section, and the FACA database at retained these deleted bypass codes on
http://facadatabase.gov. A. Recalibration of APC Relative the proposed CY 2020 bypass list
Comment: One commenter supported Payment Weights because these codes existed in CY 2018
CMS’ extension of the HOP Panel 1. Database Construction and were covered OPD services in that
meeting presentation submission period, and CY 2018 claims data were
deadline when there is a truncated a. Database Source and Methodology used to calculate CY 2020 payment
submittal timeframe due to delayed Section 1833(t)(9)(A) of the Act rates. Keeping these deleted bypass
publication of the OPPS/ASC proposed requires that the Secretary review not codes on the bypass list potentially
rule. However, to avoid the need to less often than annually and revise the allows us to create more ‘‘pseudo’’
modify the submission deadline in the relative payment weights for APCs. In single procedure claims for ratesetting
future, the commenter suggested that the April 7, 2000 OPPS final rule with purposes. ‘‘Overlap bypass codes’’ that
CMS revise the submission deadline in comment period (65 FR 18482), we are members of the proposed multiple
the Federal Register notice from a firm explained in detail how we calculated imaging composite APCs were
date to a fluid 21 days from the the relative payment weights that were identified by asterisks (*) in the third
proposed rule display date to avoid this implemented on August 1, 2000 for each column of Addendum N to the proposed
deadline issue in the future. APC group. rule. HCPCS codes that we proposed to
Response: We appreciate the In the CY 2020 OPPS/ASC proposed add for CY 2020 were identified by
commenter’s request to modify the HOP rule (84 FR 39406), for CY 2020, we asterisks (*) in the fourth column of
Panel meeting submission deadline proposed to recalibrate the APC relative Addendum N.
format. However, frequency, timing, and payment weights for services furnished Table 1 contains the list of codes that
presentation deadlines are outside the on or after January 1, 2020, and before we proposed to remove from the CY
scope of the proposed rule and are January 1, 2021 (CY 2020), using the 2020 bypass list.
b. Calculation and Use of Cost-to-Charge hospital-specific departmental level. For use ‘‘square feet’’ as the cost allocation
Ratios (CCRs) a discussion of the hospital-specific statistic. We provided that this finalized
For CY 2020, in the CY 2020 OPPS/ overall ancillary CCR calculation, we policy would sunset in 4 years to
ASC proposed rule (84 FR 39407), we refer readers to the CY 2007 OPPS/ASC provide a sufficient time for hospitals to
proposed to continue to use the final rule with comment period (71 FR transition to a more accurate cost
hospital-specific overall ancillary and 67983 through 67985). The calculation allocation method and for the related
departmental cost-to-charge ratios of blood costs is a longstanding data to be available for ratesetting
(CCRs) to convert charges to estimated exception (since the CY 2005 OPPS) to purposes (78 FR 74847). Therefore,
costs through application of a revenue this general methodology for calculation beginning CY 2018, with the sunset of
code-to-cost center crosswalk. To of CCRs used for converting charges to the transition policy, we would estimate
calculate the APC costs on which the costs on each claim. This exception is the imaging APC relative payment
CY 2020 APC payment rates are based, discussed in detail in the CY 2007 weights using cost data from all
we calculated hospital-specific overall OPPS/ASC final rule with comment providers, regardless of the cost
ancillary CCRs and hospital-specific period and discussed further in section allocation statistic employed. However,
departmental CCRs for each hospital for II.A.2.a.(1) of the proposed rule and this in the CY 2018 OPPS/ASC final rule
which we had CY 2018 claims data by final rule with comment period. with comment period (82 FR 59228 and
comparing these claims data to the most In the CY 2014 OPPS/ASC final rule 59229) and in the CY 2019 OPPS/ASC
recently available hospital cost reports, with comment period (78 FR 74840 final rule with comment period (83 FR
which, in most cases, are from CY 2017. through 74847), we finalized our policy 58831), we finalized a policy to extend
For the proposed CY 2020 OPPS of creating new cost centers and distinct the transition policy for 1 additional
payment rates, we used the set of claims CCRs for implantable devices, magnetic year and we continued to remove claims
processed during CY 2018. We applied resonance imaging (MRIs), computed from providers that use a cost allocation
the hospital-specific CCR to the tomography (CT) scans, and cardiac method of ‘‘square feet’’ to calculate CT
hospital’s charges at the most detailed catheterization. However, in response to and MRI CCRs for the CY 2018 OPPS
level possible, based on a revenue code- the CY 2014 OPPS/ASC proposed rule, and the CY 2019 OPPS.
to-cost center crosswalk that contains a commenters reported that some As we discussed in the CY 2018
hierarchy of CCRs used to estimate costs hospitals used a less precise ‘‘square OPPS/ASC final rule with comment
from charges for each revenue code. feet’’ allocation methodology for the period (82 FR 59228), some stakeholders
That crosswalk is available for review costs of large moveable equipment like have raised concerns regarding using
and continuous comment on the CMS CT scan and MRI machines. They claims from all providers to calculate
website at: http://www.cms.gov/ indicated that while CMS recommended CT and MRI CCRs, regardless of the cost
Medicare/Medicare-Fee-for-Service- using two alternative allocation allocations statistic employed (78 FR
Payment/HospitalOutpatientPPS/ methods, ‘‘direct assignment’’ or ‘‘dollar 74840 through 74847). Stakeholders
index.html. value,’’ as a more accurate methodology noted that providers continue to use the
To ensure the completeness of the for directly assigning equipment costs, ‘‘square feet’’ cost allocation method
revenue code-to-cost center crosswalk, industry analysis suggested that and that including claims from such
we reviewed changes to the list of approximately only half of the reported providers would cause significant
revenue codes for CY 2018 (the year of cost centers for CT scans and MRIs rely reductions in the imaging APC payment
claims data we used to calculate the on these preferred methodologies. In rates.
proposed CY 2020 OPPS payment rates) response to concerns from commenters, Table 2 demonstrates the relative
and found that the National Uniform we finalized a policy for the CY 2014 effect on imaging APC payments after
Billing Committee (NUBC) did not add OPPS to remove claims from providers removing cost data for providers that
any new revenue codes to the NUBC that use a cost allocation method of report CT and MRI standard cost centers
2018 Data Specifications Manual. ‘‘square feet’’ to calculate CCRs used to using ‘‘square feet’’ as the cost
In accordance with our longstanding estimate costs associated with the APCs allocation method by extracting HCRIS
policy, we calculate CCRs for the for CT and MRI (78 FR 74847). Further, data on Worksheet B–1. Table 3
standard and nonstandard cost centers we finalized a transitional policy to provides statistical values based on the
accepted by the electronic cost report estimate the imaging APC relative CT and MRI standard cost center CCRs
database. In general, the most detailed payment weights using only CT and using the different cost allocation
level at which we calculate CCRs is the MRI cost data from providers that do not methods.
ER12NO19.000</GPH>
Our analysis shows that since the CY transition, we have extended the MRI cost center CCRs, including those
2014 OPPS in which we established the transition an additional 2 years to offer that use a ‘‘square feet’’ cost allocation
transition policy, the number of valid provider flexibility in applying cost method, to estimate costs for the APCs
MRI CCRs has increased by 18.8 percent allocation methodologies for CT and for CT and MRI identified in Table 2.
to 2,207 providers and the number of MRI cost centers other than ‘‘square We noted that we did not believe
valid CT CCRs has increased by 16.0 feet.’’ We noted that we believed we had another extension was warranted and
percent to 2,291 providers. However, as provided sufficient time for providers to expected to determine the imaging APC
shown in Table 2, nearly all imaging adopt an alternative cost allocation relative payment weights for CY 2020
APCs would see an increase in payment methodology for CT and MRI cost using cost data from all providers,
rates for CY 2020 if claims from centers if they intended to do so. regardless of the cost allocation method
providers that report using the ‘‘square However, many providers continue to employed.
feet’’ cost allocation method were use the ‘‘square feet’’ cost allocation Comment: One commenter noted that
removed. This can be attributed to the methodology, which we believe approximately half of all hospitals paid
generally lower CCR values from indicates that these providers believe under the OPPS had CT and/or MRI cost
providers that use a ‘‘square feet’’ cost this methodology is a sufficient method centers that were reporting CCRs using
allocation method as shown in Table 2. for attributing costs to this cost center. the preferred methods (‘‘dollar value’’ or
We noted in the CY 2020 OPPS/ASC Additionally, we generally believe that ‘‘direct assignment’’). This commenter
ER12NO19.002</GPH>
proposed rule that the CT and MRI cost increasing the amount of claims data further suggested that hospitals not
center CCRs have been available for available for use in ratesetting improves using these preferred methods are either
ratesetting since the CY 2014 OPPS in our ratesetting process. Therefore, we unable or unwilling to make the change
which we established the transition proposed that for the CY 2020 OPPS we to using these preferred methods. This
ER12NO19.001</GPH>
policy. Since the initial 4-year would use all claims with valid CT and commenter stated that some CT and
MRI procedures show a significant extend the transition for 2 additional However, it is important to note that
number of CCRs that are close to zero, years and stated that we should study since we initially established the
and that the commenter believed that the effects of this policy even further to transition policy in the OPPS in CY
these hospitals are likely unable to better understand its payment impacts. 2014, we have continued to develop the
accurately reallocate these costs across One commenter noted that we should OPPS as a prospective payment system.
hospital departments to new CT and continue the transition policy of This includes greater packaging and the
MRI departmental cost centers. This removing provider claims using the development of comprehensive APCs.
commenter acknowledged that the ‘‘square feet’’ cost allocation method to As we have packaged a greater number
number of valid CT and MRI CCRs has calculate cost-to-charge ratios (CCRs) of items and services with imaging
increased over time, but noted that associated with CT and MRI procedures payment under the OPPS, we believe
incorrect cost allocation has negative into 2020 and require providers to imaging payments are somewhat less
effects on payment rates for almost all report costs via the direct assignment or sensitive to the cost allocation method
imaging APCs. dollar value methodologies moving being used than they previously were.
Several commenters recommended forward. Another commenter noted that We also note that we still find value in
that CMS continue to exclude ‘‘square the use of separate CT and MRI CCRs obtaining more specific cost data and
feet’’ cost allocation data and continue creates unintended consequences on the that the CT and MRI-specific cost
to educate hospitals on the importance technical component of CT and MRI
of reporting direct CT and MRI services. centers provide useful cost and charge
codes in the Medicare Physician Fee
Several commenters requested that CMS data for ratesetting purposes.
Schedule (MPFS). The commenter noted
not use the CT and MRI-specific cost the resulting reductions in hospital However, to address concerns in the
centers and instead estimate cost using payments would also affect the comments about the amount of the
the single diagnostic radiology cost physician office practice setting. They decrease in imaging payment in CY
center, believing this will solve the believed that the OPPS technical 2020 due to ending of the transition
inaccurate reporting of costs for CT and payments would fall below the payment period, we are finalizing a 2-year
MR services. They further suggested that rates in the MPFS causing further cuts phased-in approach, as suggested by
we should advise hospitals through as mandated by the Deficit Reduction some commenters, that will apply 50
regulation and cost reporting Act of 2005 (DRA), which mandates percent of the payment impact from
instructions to no longer report costs CMS pay the lesser of MPFS or OPPS ending the transition in CY 2020 and
separately for CT and MRI cost centers rate. 100 percent of the payment impact from
and make sure they review their One commenter suggested that, ending the transition in CY 2021. For
diagnostic radiology cost center because CMS has various APC CY 2020, we will calculate the imaging
inclusive of CT and MR equipment, groupings for MRI and CT, the payment rates using both the transition
space, labor and over factors. This same individual MRI and CT cost centers are methodology (excluding providers that
commenter noted that the benefits of no longer needed. This commenter use a ‘‘square feet’’ cost allocation
using a single diagnostic radiology cost suggested that, at the time separate cost method) and the standard methodology
center include consistency across centers for these services were (including all providers, regardless of
hospitals, properly accounting for high- established, the classification of imaging cost allocation method) and will assign
cost medical equipment, simplifying procedures into APCs was very specific, the imaging APCs a payment rate that
and standardizing cost reporting within but that CMS is now ‘‘intermingling’’
includes data representing 50 percent of
the diagnostic radiology cost center, the MRI and CT costs with other
the transition methodology payment
eliminating partial allocation of costs to imaging services.
Response: We appreciate the rate and includes data representing 50
CT and MRI cost centers, and reducing
burden. One commenter requested that comments regarding the use of CT and percent of the standard methodology
we work with various hospital MRI cost center CCRs. As we stated in payment rate. Beginning in CY 2021, we
organizations to help educate the prior rulemaking, we recognize the will set the imaging APC payment rates
hospital community on how to report concerns with regard to the application at 100 percent of the payment rate using
these costs on the CT and MRI CCRs in of the CT and MRI standard cost center the standard payment methodology
hopes to transition to this policy over CCRs and their use in the OPPS (including all providers, regardless of
time. ratesetting. We understand that there is cost allocation method). Table 4 below
Other commenters requested that we greater sensitivity to the cost allocation illustrates the estimated impact on
extend the transition to using all claims method being used on the cost report geometric mean costs for CT and MRI
for one additional year. These same forms for these relatively new standard APCs under our blended approach of
commenters requested that if extending imaging cost centers under the OPPS utilizing 50 percent of the transitional
the transition 1 additional year is not due to the limited size of the OPPS payment methodology and 50 percent of
possible, that we phase in the payment payment bundles and because the OPPS the standard payment methodology for
impacts of this transition over 2 years. applies the CCRs at the departmental CY 2020.
One commenter requested that CMS level for cost estimation purposes. BILLING CODE 4120–01–P
BILLING CODE 4120–01–C on other payment systems. We 2. Data Development and Calculation of
As noted earlier, the Deficit Reduction understand that payment reductions for Costs Used for Ratesetting
Act (DRA) of 2005 requires Medicare to imaging services under the OPPS could
limit Medicare payment for certain have significant payment impacts under In this section of this final rule with
imaging services covered by the the Physician Fee Schedule (PFS) where comment period, we discuss the use of
physician fee schedule to not exceed the technical component payment for claims to calculate the OPPS payment
what Medicare pays for these services many imaging services is capped at the rates for CY 2020. The Hospital OPPS
under the OPPS. As required by law, for page on the CMS website on which this
OPPS payment amount. We will
certain imaging series paid for under the final rule with comment period is
continue to monitor OPPS imaging
MPFS, we cap the technical component posted (http://www.cms.gov/Medicare/
payments in the future and consider the
of the PFS payment amount for the Medicare-Fee-for-Service-Payment/
potential impacts of payment changes
applicable year at the OPPS payment HospitalOutpatientPPS/index.html)
on the PFS and the ASC payment
amount (71 FR 69659 through 69661). provides an accounting of claims used
system.
As we stated in the CY 2014 OPPS/ASC in the development of the final payment
final rule with comment period (78 FR rates. That accounting provides
74845), we have noted the potential additional detail regarding the number
ER12NO19.003</GPH>
impact the CT and MRI CCRs may have of claims derived at each stage of the
process. In addition, below in this are not paid under the OPPS, in the CY data set. This change in processing logic
section, we discuss the file of claims 2019 OPPS/ASC final rule with had no effect on ratesetting and all of
that comprises the data set that is comment period (83 FR 58832), we the lines with modifier ‘‘PN’’ are
available upon payment of an finalized a policy to remove those claim excluded from the OPPS ratesetting
administrative fee under a CMS data use lines reported with modifier ‘‘PN’’ from process for both CY 2019 and CY 2020.
agreement. The CMS website http:// the claims data used in ratesetting for We are including these lines as non-
www.cms.gov/Medicare/Medicare-Fee- the CY 2019 OPPS and subsequent OPPS claims in the CY 2020 OPPS final
for-Service-Payment/Hospital years. For the CY 2020 OPPS, we will rule limited data set, but as discussed,
OutpatientPPS/index.html, includes continue to remove these claim lines are continuing to exclude them for
information about obtaining the ‘‘OPPS with modifier ‘‘PN’’ from the ratesetting ratesetting purposes.
Limited Data Set,’’ which now includes process. For details of the claims accounting
the additional variables previously Comment: Several commenters noted process used in this final rule with
available only in the OPPS Identifiable a potential issue with missing lines with comment period, we refer readers to the
Data Set, including ICD–10–CM the PN modifier. Specifically, these claims accounting narrative under
diagnosis codes and revenue code commenters believed that the CY 2020 supporting documentation for this CY
payment amounts. This file is derived proposed rule data, based on CY 2018 2020 OPPS/ASC final rule with
from the CY 2018 claims that were used claims, excluded approximately 400,000 comment period on the CMS website at:
to calculate the final payment rates for lines with Healthcare Common http://www.cms.gov/Medicare/
this CY 2020 OPPS/ASC final rule with Procedure Coding System (HCPCS) Medicare-Fee-for-Service-Payment/
comment period. codes and the PN modifier. They noted HospitalOutpatientPPS/index.html.
Previously, the OPPS established the that this would mean that there was
scaled relative weights, on which 2. Final Data Development and
over an 80 percent decline from the CY
payments are based using APC median Calculation of Costs Used for Ratesetting
2017 claims data, which had
costs, a process described in the CY approximately 2.8 million lines with a. Calculation of Single Procedure APC
2012 OPPS/ASC final rule with HCPCS and the PN modifier. These Criteria-Based Costs
comment period (76 FR 74188). commenters reviewed the 2018 (1) Blood and Blood Products
However, as discussed in more detail in Outpatient Standard Analytic File (SAF)
section II.A.2.f. of the CY 2013 OPPS/ and noted that they found (a) Methodology
ASC final rule with comment period (77 approximately 3.5 million lines with Since the implementation of the OPPS
FR 68259 through 68271), we finalized HCPCS codes and the PN modifier. in August 2000, we have made separate
the use of geometric mean costs to These commenters asserted that the payments for blood and blood products
calculate the relative weights on which ratesetting data included substantially through APCs rather than packaging
the CY 2013 OPPS payment rates were less PN modifiers than in the SAF file payment for them into payments for the
based. While this policy changed the for the same time period. These same procedures with which they are
cost metric on which the relative commenters assert that if the PN lines administered. Hospital payments for the
payments are based, the data process in were not included in the ratesetting costs of blood and blood products, as
general remained the same, under the process then the OPPS payment weights well as for the costs of collecting,
methodologies that we used to obtain are accurate. They noted that, processing, and storing blood and blood
appropriate claims data and accurate conversely, if the PN lines were products, are made through the OPPS
cost information in determining included in the payment weights then payments for specific blood product
estimated service cost. For CY 2020, in payments would be inaccurate. These APCs.
the CY 2020 OPPS/ASC proposed rule commenters wanted CMS to explain In the CY 2020 OPPS/ASC proposed
(84 FR 39409), we proposed to continue what occurred in the proposed rule data rule (84 FR 39409), we proposed to
to use geometric mean costs to calculate files to ensure that the APC payment continue to establish payment rates for
the proposed relative weights on which weights correctly reflect the exclusion of blood and blood products using our
the CY 2020 OPPS payment rates are PN modifier claims in the final rule. blood-specific CCR methodology, which
based. Response: We thank the commenters utilizes actual or simulated CCRs from
We used the methodology described for their input. First, we would like to the most recently available hospital cost
in sections II.A.2.a. through II.A.2.c. of note that claim lines with the PN reports to convert hospital charges for
this final rule with comment period to modifier are excluded from the blood and blood products to costs. This
calculate the costs we used to establish ratesetting process. Please note that the methodology has been our standard
the relative payment weights used in difference between the 2019 OPPS Final ratesetting methodology for blood and
calculating the OPPS payment rates for Rule and the 2020 OPPS Proposed rule blood products since CY 2005. It was
CY 2020 shown in Addenda A and B to is the following: We processed the claim developed in response to data analysis
this final rule with comment period lines with the PN modifier differently indicating that there was a significant
(which are available via the internet on between the two rules, which resulted difference in CCRs for those hospitals
the CMS website). We refer readers to in the decrease in the number of PN with and without blood-specific cost
section II.A.4. of this final rule with lines in the OPPS limited data set as centers, and past public comments
comment period for a discussion of the noted above. Specifically, the programs indicating that the former OPPS policy
conversion of APC costs to scaled used for the CY 2020 proposed rule of defaulting to the overall hospital CCR
payment weights. were modified to not factor in those for hospitals not reporting a blood-
We note that under the OPPS, CY lines as being OPPS lines, which specific cost center often resulted in an
2019 was the first year in which claims resulted in more lines, and potentially, underestimation of the true hospital
data containing lines with the modifier more total claims being categorized as costs for blood and blood products.
‘‘PN’’ were available, which indicate non-OPPS claims. Previously, even Specifically, in order to address the
nonexcepted items and services though those lines were excluded from differences in CCRs and to better reflect
furnished and billed by off-campus OPPS for ratesetting purposes, they hospitals’ costs, we proposed to
provider-based departments (PBDs) of were still considered OPPS in continue to simulate blood CCRs for
hospitals. Because nonexcepted services categorizing the claims for the limited each hospital that does not report a
blood cost center by calculating the ratio claims as services assigned to the C– concerned that there may have been
of the blood-specific CCRs to hospitals’ APCs (we refer readers to the CY 2015 confusion among the provider
overall CCRs for those hospitals that do OPPS/ASC final rule with comment community about the services that
report costs and charges for blood cost period (79 FR 66796)). HCPCS code P9072 described. That is,
centers. We also proposed to apply this We also referred readers to as early as 2016, there were discussions
mean ratio to the overall CCRs of Addendum B to the CY 2020 OPPS/ASC about changing the descriptor for
hospitals not reporting costs and proposed rule (which is available via HCPCS code P9072 to include the
charges for blood cost centers on their the internet on the CMS website) for the phrase ‘‘or rapid bacterial tested’’,
cost reports in order to simulate blood- proposed CY 2020 payment rates for which is a less costly technology than
specific CCRs for those hospitals. We blood and blood products (which are pathogen reduction. In addition,
proposed to calculate the costs upon identified with status indicator ‘‘R’’). effective January 2017, the code
which the proposed CY 2020 payment For a more detailed discussion of the descriptor for HCPCS code P9072 was
rates for blood and blood products are blood-specific CCR methodology, we changed to describe rapid bacterial
based using the actual blood-specific refer readers to the CY 2005 OPPS testing of platelets and, effective July 1,
CCR for hospitals that reported costs proposed rule (69 FR 50524 through 2017, the descriptor for the temporary
and charges for a blood cost center and 50525). For a full history of OPPS successor code (HCPCS code Q9988) for
a hospital-specific, simulated blood- payment for blood and blood products, HCPCS code P9072 was changed again
specific CCR for hospitals that did not we refer readers to the CY 2008 OPPS/ back to the original descriptor for
report costs and charges for a blood cost ASC final rule with comment period (72 HCPCS code P9072 that was in place for
center. FR 66807 through 66810). 2016.
We continue to believe that the We did not receive any comments on Based on the ongoing discussions
hospital-specific, simulated blood- our proposal to establish payment rates involving changes to the original HCPCS
specific, CCR methodology better for blood and blood products using our code P9072 established in CY 2016, we
responds to the absence of a blood- blood-specific CCR methodology and we believed that claims from CY 2016 for
specific CCR for a hospital than are finalizing this policy as proposed. pathogen reduced platelets may have
alternative methodologies, such as (b) Pathogen-Reduced Platelets Payment potentially reflected certain claims for
defaulting to the overall hospital CCR or Rate rapid bacterial testing of platelets.
applying an average blood-specific CCR Therefore, we decided to continue to
across hospitals. Because this In the CY 2016 OPPS/ASC final rule crosswalk the payment amount for
methodology takes into account the with comment period (80 FR 70322 services described by HCPCS code
unique charging and cost accounting through 70323), we reiterated that we P9073 (the successor code to HCPCS
structure of each hospital, we believe calculate payment rates for blood and code P9072 established January 1, 2018)
that it yields more accurate estimated blood products using our blood-specific to the payment amount for services
costs for these products. We stated in CCR methodology, which utilizes actual described by HCPCS code P9037 for CY
the proposed rule that we continue to or simulated CCRs from the most 2018 (82 FR 59232), to determine the
believe that this methodology in CY recently available hospital cost reports payment rate for services described by
2020 would result in costs for blood and to convert hospital charges for blood HCPCS code P9072. In the CY 2019
blood products that appropriately reflect and blood products to costs. Because OPPS/ASC proposed rule (83 FR 37058),
the relative estimated costs of these HCPCS code P9072 (Platelets, pheresis, for CY 2019, we discussed that we had
products for hospitals without blood pathogen reduced or rapid bacterial reviewed the CY 2017 claims data for
cost centers and, therefore, for these tested, each unit), the predecessor code the two predecessor codes to HCPCS
blood products in general. to HCPCS code P9073 (Platelets, code P9073 (HCPCS codes P9072 and
We note that, as discussed in section pheresis, pathogen-reduced, each unit), Q9988), along with the claims data for
II.A.2.b.(1). of the CY 2019 OPPS/ASC was new for CY 2016, there were no the CY 2017 temporary code for
final rule with comment period (82 FR claims data available on the charges and pathogen test for platelets (HCPCS code
58837 through 58843), we defined a costs for this blood product upon which Q9987), which describes rapid bacterial
comprehensive APC (C–APC) as a to apply our blood-specific CCR testing of platelets. We found that there
classification for the provision of a methodology. Therefore, we established were over 2,200 claims billed with
primary service and all adjunctive an interim payment rate for HCPCS code either HCPCS code P9072 or Q9988 in
services provided to support the P9072 based on a crosswalk to existing the CY 2017 claims data available for
delivery of the primary service. Under blood product HCPCS code P9037 CY 2019 rulemaking. Accordingly, we
this policy, we include the costs of (Platelets, pheresis, leukocytes reduced, believed that there were a sufficient
blood and blood products when irradiated, each unit), which we number of claims to calculate a payment
calculating the overall costs of these C– believed provided the best proxy for the rate for HCPCS code P9073 for CY 2019
APCs. In the CY 2020 OPPS/ASC costs of the new blood product. In without using a crosswalk.
proposed rule (84 FR 39410), we addition, we stated that once we had We also performed checks to estimate
proposed to continue to apply the claims data for HCPCS code P9072, we the share of claims that may have been
blood-specific CCR methodology would calculate its payment rate using billed for rapid bacterial testing of
described in this section when the claims data that should be available platelets as compared to the share of
calculating the costs of the blood and for the code beginning in CY 2018, claims that may have been billed for
blood products that appear on claims which is our practice for other blood pathogen-reduced, pheresis platelets
with services assigned to the C–APCs. product HCPCS codes for which claims (based on when HCPCS code P9072 was
Because the costs of blood and blood data have been available for 2 years. an active procedure code from January
products would be reflected in the We stated in the CY 2018 OPPS/ASC 1, 2017 to June 30, 2017). First, we
overall costs of the C–APCs (and, as a final rule with comment period (82 FR found that the geometric mean cost for
result, in the payment rates of the C– 59233) that, although our standard pathogen-reduced, pheresis platelets, as
APCs), we proposed to not make practice for new codes involves using reported by HCPCS code Q9988 when
separate payments for blood and blood claims data to set payment rates once billed separately from rapid bacterial
products when they appear on the same claims data become available, we were testing of platelets, was $453.87, and
that over 1,200 claims were billed for for CY 2019 to calculate the payment and P9037 (Platelets, pheresis,
services described by HCPCS code rate for services described by HCPCS leukocytes reduced, irradiated, each
Q9988. Next, we found that the code P9073 using claims payment unit) and calculate the payment rate for
geometric mean cost for rapid bacterial history. Instead, for CY 2019, we services described by HCPCS code
testing of platelets, as reported by established the payment rate for services P9073 using claims payment history.
HCPCS code Q9987 on claims, was described by HCPCS code P9073 by The commenters stated that the 2018
$33.44, and there were 59 claims crosswalking the payment rate for the claims data used to establish the CY
reported for services described by services described by HCPCS code 2020 payment rate for pathogen-reduced
HCPCS code Q9987, of which 3 were P9073 from the payment rate for platelets continue to include erroneous
separately paid. services described by HCPCS code claims and is therefore inaccurate. The
These findings implied that almost all P9037 (83 FR 58834). commenters further state, as an example
of the claims billed for services reported For CY 2020 and subsequent years, of the inaccuracies of the 2018 claims
with HCPCS code P9072 were for we proposed to calculate the payment data, that approximately 30 percent of
pathogen-reduced, pheresis platelets. In rate for services described by HCPCS the 2018 claims data for P9073 contain
addition, the geometric mean cost for code P9073 by using claims payment costs that are at least $100 lower than
services described by HCPCS code history, which is the standard the costs of P9037, which is a less
P9072, which may have contained rapid methodology used under the OPPS to expensive technology. The commenters
bacterial testing of platelets claims, was calculate payment rates for HCPCS requested that we continue the
$468.11, which was higher than the codes with at least 2 years of claims crosswalk between these two codes for
geometric mean cost for services history. Claims for HCPCS code P9073 both CYs 2020 and 2021 to allow
described by HCPCS code Q9988 of and its predecessor codes have been hospitals time to continue to correct
$453.87, which should not have billed under the OPPS for over 3 years errors in their chargemasters and to
contained claims for rapid bacterial and we believe providers have had prevent underpayment to hospitals for
testing of platelets. Because the sufficient time to become familiar with pathogen-reduced platelets. The
geometric mean for services described the services covered by the procedure commenters also claim that hospitals
by HCPCS code Q9987 was only $33.44, code and the appropriate charges and may be reluctant to adopt a relatively
it would be expected that if a significant CCRs used to report the service. Also, it new technology, such as pathogen-
share of claims billed for services has been more than a year and half since reduced platelets, if the payment is too
described by HCPCS code P9072 were the issue in which payment for low.
for the rapid bacterial testing of pathogen-reduced platelets and
platelets, the geometric mean cost for payment for rapid bacterial testing were Response: We continue to believe
services described by HCPCS code combined under the same code was that, beginning in CY 2020, it is
P9072 would be lower than the resolved. In our analysis of claims data appropriate to calculate the payment
geometric mean cost for services from CY 2018, we found that rate for services described by HCPCS
described by HCPCS code Q9988. approximately 4,700 claims have been code P9073 using the standard
Instead, we found that the geometric billed for services described by HCPCS methodology (which involves using data
mean cost for services described by code P9073 and the estimated payment from CY 2018 claims for the code). We
HCPCS code Q9988 was higher than the rate for services described by HCPCS have previously acknowledged (83 FR
geometric mean cost for services code P9073 based on the claims data 58834) that there was confusion among
described by HCPCS code P9072. was approximately $585. The claims- the provider community surrounding
However, we received many based payment rate for services the reporting and billing for P9073 and
comments from providers and other described by HCPCS code P9073 was have made exceptions to our standard
stakeholders including blood product approximately $60 less than the methodology for calculating payment
industry stakeholder groups and the estimated crosswalked payment rate rates for this service. At this time, we
company who developed the pathogen- using HCPCS code P9037 of believe providers have had sufficient
reduced platelets technology requesting approximately $645. The claims data time to become familiar with the
that we not implement our proposal for show that services described by HCPCS services covered by the procedure code
CY 2019, and instead that we should code P9073 have been reported and we believe the issue in which
once again establish the payment rate regularly by providers during CY 2018 payment for pathogen-reduced platelets
for HCPCS code P9073 by performing a and the payment rate is close to the and payment for rapid bacterial testing
crosswalk from the payment amount for payment rate of the crosswalked was combined under the same code has
services described by HCPCS code payment rate for services described by been resolved. Additionally, in response
P9073 to the payment amount for HCPCS code P9037. Therefore, we to concerns that hospitals may be
services described by HCPCS code believe that the payment rate for reluctant to adopt the pathogen-reduced
P9037. The commenters were concerned services described by HCPCS code platelet technology based on a payment
that the payment rate for HCPCS code P9073 can be determined using claims rate that is too low, in our analysis of
P9073 calculated by using claims data data without a crosswalk from the claims data from CY 2018, we found
for that service was too low. Several payment rate for services described by that approximately 5,300 claims have
commenters believed the claim costs for HCPCS code P9037. been billed for services described by
pathogen-reduced platelets were lower We refer readers to Addendum B of HCPCS code P9073, which is
than actual costs because of coding the proposed rule for the proposed significantly higher that the
errors by providers, providers who did payment rate for services described by approximately 2,200 claims billed in
not use pathogen-reduced platelets HCPCS code P9073 reportable under the 2017 for services described by the
when billing the service, and confusion OPPS. Addendum B is available via the predecessor codes for HCPCS code
over whether to use the hospital CCR or internet on the CMS website. P9073, HCPCS codes Q9988 and P9072.
the blood center CCR to report charges Comment: We received comments Also, the estimated CY 2020 payment
for pathogen-reduced platelets. We that opposed the proposal to end the rate for services described by HCPCS
considered the comments we received crosswalk between P9073 (Platelets, code P9073 based on the CY 2018
and decided not to finalize our proposal pheresis, pathogen-reduced, each unit) claims data is approximately $600
which is comparable to the CY 2020 vast majority of items and services paid the CMS website) and were identified
estimated crosswalked payment rate under the OPPS. We refer readers to the with status indicator ‘‘U’’.
using HCPCS code P9037 of CY 2016 OPPS/ASC final rule with For CY 2018, we assigned status
approximately $620. These data suggest comment period (80 FR 70323 through indicator ‘‘U’’ (Brachytherapy Sources,
that a crosswalk is no longer necessary. 70325) for further discussion of the Paid under OPPS; separate APC
Further, we have now used a cross-walk history of OPPS payment for payment) to HCPCS code C2645
for P9073 and its predecessor codes for brachytherapy sources. (Brachytherapy planar source,
4 years, which is longer than the typical palladium-103, per square millimeter)
In the CY 2020 OPPS/ASC proposed in the absence of claims data and
2-year period for which we normally
rule, for CY 2020, we proposed to use established a payment rate using
cross-walk new HCPCS codes. We
agreed with past commenters that an the costs derived from CY 2018 claims external data (invoice price) at $4.69 per
extended period of cross-walking data to set the proposed CY 2020 mm2. For CY 2019, in the absence of
payment for P9073 was necessary to payment rates for brachytherapy sources sufficient claims data, we continued to
address the coding confusion in 2016 because CY 2018 is the year of data we establish a payment rate for C2645 at
that may have led to the claims data proposed to use to set the proposed $4.69 per mm2. For CY 2020, we
reflecting costs for services not payment rates for most other items and proposed to continue to assign status
described by HCPCS code P9073. services that would be paid under the indicator ‘‘U’’ to HCPCS code C2645
However, the above-referenced coding CY 2020 OPPS. We proposed to base the (Brachytherapy planar source,
issues were resolved in January 2018, so payment rates for brachytherapy sources palladium-103, per square millimeter).
we have no reason to believe that the on the geometric mean unit costs for Our CY 2018 claims data available for
data may reflect the costs for services each source, consistent with the the proposed CY 2020 rule, included
other than those described by P9073. methodology that we proposed for other two claims with over 9,000 units of
Accordingly, for CY 2020 and items and services paid under the OPPS, HCPCS code C2645. Therefore, we
subsequent years, we are finalizing the as discussed in section II.A.2. of the stated our belief that the CY 2018 claims
policy to calculate the payment rate for proposed rule. We also proposed to data were adequate to establish an APC
services described by HCPCS code continue the other payment policies for payment rate for HCPCS code C2645
P9073 by using claims payment history brachytherapy sources that we finalized and to discontinue our use of external
and to end the crosswalk between and first implemented in the CY 2010 data for this brachytherapy source.
HCPCS codes P9037 and P9073. OPPS/ASC final rule with comment Specifically, we proposed to set the
period (74 FR 60537). We proposed to proposed CY 2020 payment rate at the
(2) Brachytherapy Sources
pay for the stranded and nonstranded geometric mean cost of HCPCS code
Section 1833(t)(2)(H) of the Act not otherwise specified (NOS) codes, C2645 based on CY 2018 claims data,
mandates the creation of additional HCPCS codes C2698 (Brachytherapy which is $1.02 per mm2.
groups of covered OPD services that source, stranded, not otherwise Comment: One commenter stated that
classify devices of brachytherapy specified, per source) and C2699 the reduction in the payment rate for
consisting of a seed or seeds (or HCPCS code C2645 (Brachytherapy
(Brachytherapy source, non-stranded,
radioactive source) (‘‘brachytherapy planar source, palladium-103, per
not otherwise specified, per source), at
sources’’) separately from other services square millimeter) for CY 2020 will
a rate equal to the lowest stranded or
or groups of services. The statute preclude outpatient use for an FDA-
nonstranded prospective payment rate
provides certain criteria for the cleared, predominantly outpatient
for such sources, respectively, on a per
additional groups. For the history of indication, for C2645. Additionally, the
OPPS payment for brachytherapy source basis (as opposed to, for
commenter argued that the two claims
sources, we refer readers to prior OPPS example, a per mCi), which is based on
used to establish the payment rate for
final rules, such as the CY 2012 OPPS/ the policy we established in the CY
C2645 are not a sufficient volume for
ASC final rule with comment period (77 2008 OPPS/ASC final rule with
ratesetting and that the claims are most
FR 68240 through 68241). As we have comment period (72 FR 66785). We also
likely erroneous in that the
stated in prior OPPS updates, we proposed to continue the policy we first brachytherapy source was used for
believe that adopting the general OPPS implemented in the CY 2010 OPPS/ASC procedures on the inpatient-only list.
prospective payment methodology for final rule with comment period (74 FR Response: Claims that include
brachytherapy sources is appropriate for 60537) regarding payment for new brachytherapy sources along with
a number of reasons (77 FR 68240). The brachytherapy sources for which we procedures on the inpatient-only list are
general OPPS methodology uses costs have no claims data, based on the same sufficient and appropriate to use for our
based on claims data to set the relative reasons we discussed in the CY 2008 ratesetting process as brachytherapy
payment weights for hospital outpatient OPPS/ASC final rule with comment sources are line-item paid. However,
services. This payment methodology period (72 FR 66786; which was given the limited number of claims for
results in more consistent, predictable, delayed until January 1, 2010 by section HCPCS C2645 for both CY 2020 and
and equitable payment amounts per 142 of Pub. L. 110–275). Specifically, previous calendar years and the new
source across hospitals by averaging the this policy is intended to enable us to FDA-approved outpatient indication for
extremely high and low values, in assign new HCPCS codes for new HCPCS code C2645, we are persuaded
contrast to payment based on hospitals’ brachytherapy sources to their own that the proposed CY 2020 payment
charges adjusted to costs. We believe APCs, with prospective payment rates rate, which is significantly lower than
that the OPPS methodology, as opposed set based on our consideration of that of the rate in effect in prior years,
to payment based on hospitals’ charges external data and other relevant may not adequately represent the costs
adjusted to cost, also would provide information regarding the expected associated with C2645. Therefore, we
hospitals with incentives for efficiency costs of the sources to hospitals. The are using our equitable adjustment
in the provision of brachytherapy proposed CY 2020 payment rates for authority under section 1833(t)(2)(E) of
services to Medicare beneficiaries. brachytherapy sources were included in the Act, which states that the Secretary
Moreover, this approach is consistent Addendum B to the proposed rule shall establish, in a budget neutral
with our payment methodology for the (which is available via the internet on manner, other adjustments as
determined to be necessary to ensure occur when providing a service because, policy and added 1 additional level to
equitable payments, to maintain the CY in addition to the individual cost values both the Orthopedic Surgery and
2019 rate for this brachytherapy source, that are reflected by medians, geometric Vascular Procedures clinical families,
despite the lower geometric mean costs means reflect the magnitude of the cost which increased the total number of C–
of $1.03 per mm2 available in the claims measurements, and thus are more APCs to 37 for CY 2016. In the CY 2017
data used for this final rule with sensitive to changes in the data. OPPS OPPS/ASC final rule with comment
comment period. We believe this relative payment weights based on period (81 FR 79584 through 79585), we
situation is unique, given the very geometric mean costs would better finalized another 25 C–APCs for a total
limited number of claims for this capture the range of costs associated of 62 C–APCs. In the CY 2018 OPPS/
brachytherapy source for both CY 2020 with providing services. Further, ASC final rule with comment period, we
ratesetting purposes and previous geometric means capture cost changes did not change the total number of C–
calendar years. that are introduced slowly into the APCs from 62. In the CY 2019 OPPS/
After consideration of the public system on a case-by-case or hospital-by- ASC final rule with comment period, we
comment we received, we are not hospital basis. For these reasons, we created 3 new C–APCs, increasing the
finalizing the proposed rate for C2645 believe it would be inappropriate to total number to 65 (83 FR 58844 through
and are instead assigning the remove outliers when determining 58846).
brachytherapy source described by brachytherapy geometric mean costs Under our C–APC policy, we
HCPCS code C2645 a payment rate of and payment rates. designate a service described by a
$4.69 mm2 for CY 2020 through use of We continue to invite hospitals and HCPCS code assigned to a C–APC as the
our equitable adjustment authority. other parties to submit primary service when the service is
Comment: Some commenters recommendations to us for new codes to identified by OPPS status indicator
recommended that we reevaluate our describe new brachytherapy sources. ‘‘J1’’. When such a primary service is
approach to ratesetting HCPCS C2642 Such recommendations should be reported on a hospital outpatient claim,
(Brachytherapy source, stranded, directed to the Division of Outpatient taking into consideration the few
cesium-131, per source) and stated that Care, Mail Stop C4–01–26, Centers for exceptions that are discussed below, we
our proposed CY 2020 payment rate of Medicare and Medicaid Services, 7500 make payment for all other items and
$67.29 per source for HCPCS code Security Boulevard, Baltimore, MD services reported on the hospital
C2642 would be too low to ensure fair 21244. We will continue to add new outpatient claim as being integral,
and adequate reimbursement. brachytherapy source codes and ancillary, supportive, dependent, and
Additionally, one provider who billed descriptors to our systems for payment adjunctive to the primary service
C2642 stated there was a clerical error on a quarterly basis. (hereinafter collectively referred to as
and that it may have inadvertently ‘‘adjunctive services’’) and representing
underreported the actual costs for C2642 b. Comprehensive APCs (C–APCs) for components of a complete
incurred by the provider. CY 2020 comprehensive service (78 FR 74865
Response: Based on the most current (1) Background and 79 FR 66799). Payments for
available data for the CY 2020 OPPS/ adjunctive services are packaged into
ASC final rule with comment period, In the CY 2014 OPPS/ASC final rule the payments for the primary services.
the geometric mean for HCPCS code with comment period (78 FR 74861 This results in a single prospective
C2642 based on 85 claims from CY 2018 through 74910), we finalized a payment for each of the primary,
is $75.06 per source. We note that the comprehensive payment policy that comprehensive services based on the
CY 2019 payment rate for HCPCS Code packages payment for adjunctive and costs of all reported services at the claim
C2642 was $79.94 per source. We secondary items, services, and level.
believe that the variation in costs for procedures into the most costly primary Services excluded from the C–APC
HCPCS code C2642 does not appear procedure under the OPPS at the claim policy under the OPPS include services
unusual or erroneous and that the CY level. The policy was finalized in CY that are not covered OPD services,
2020 geometric mean for HCPCS code 2014, but the effective date was delayed services that cannot by statute be paid
C2642 based on CY 2018 claims data is until January 1, 2015, to allow for under the OPPS, and services that
consistent with historical payment rates additional time for further analysis, are required by statute to be separately
for this brachytherapy source. opportunity for public comment, and paid. This includes certain
Comment: One commenter stated that systems preparation. The mammography and ambulance services
the geometric mean cost and payment comprehensive APC (C–APC) policy that are not covered OPD services in
for brachytherapy sources has fluctuated was implemented effective January 1, accordance with section
significantly since 2013. The commenter 2015, with modifications and 1833(t)(1)(B)(iv) of the Act;
argued that such fluctuations may put clarifications in response to public brachytherapy seeds, which also are
financial pressure on providers and comments received regarding specific required by statute to receive separate
create access barriers for beneficiaries to provisions of the C–APC policy (79 FR payment under section 1833(t)(2)(H) of
receive brachytherapy. The commenter 66798 through 66810). the Act; pass-through payment drugs
requested we review and consider A C–APC is defined as a classification and devices, which also require separate
removing outliers to ensure payment for the provision of a primary service payment under section 1833(t)(6) of the
stability for low-volume brachytherapy and all adjunctive services provided to Act; self-administered drugs (SADs) that
sources in future rulemaking. support the delivery of the primary are not otherwise packaged as supplies
Response: We thank the commenter service. We established C–APCs as a because they are not covered under
for their recommendation and will take category broadly for OPPS payment and Medicare Part B under section
it under consideration in future implemented 25 C–APCs beginning in 1861(s)(2)(B) of the Act; and certain
rulemaking. As discussed in the CY CY 2015 (79 FR 66809 through 66810). preventive services (78 FR 74865 and 79
2013 OPPS/ASC final rule with In the CY 2016 OPPS/ASC final rule FR 66800 through 66801). A list of
comment period (77 FR 68259 through with comment period (80 FR 70332), we services excluded from the C–APC
68271), geometric mean costs better finalized 10 additional C–APCs to be policy is included in Addendum J to
encompass the variation in costs that paid under the existing C–APC payment this final rule with comment period
(which is available via the internet on HCPCS code G0381 (Type B emergency therapists under a plan of care in
the CMS website). department visit (Level 2)); HCPCS code accordance with section 1835(a)(2)(C)
The C–APC policy payment G0382 (Type B emergency department and section 1835(a)(2)(D) of the Act and
methodology set forth in the CY 2014 visit (Level 3)); HCPCS code G0383 are paid for under section 1834(k) of the
OPPS/ASC final rule with comment (Type B emergency department visit Act, subject to annual therapy caps as
period for the C–APCs and modified (Level 4)); HCPCS code G0384 (Type B applicable (78 FR 74867 and 79 FR
and implemented beginning in CY 2015 emergency department visit (Level 5)); 66800). However, certain other services
is summarized as follows (78 FR 74887 CPT code 99291 (Critical care, similar to therapy services are
and 79 FR 66800): evaluation and management of the considered and paid for as hospital
Basic Methodology. As stated in the critically ill or critically injured patient; outpatient department services.
CY 2015 OPPS/ASC final rule with first 30–74 minutes); or HCPCS code Payment for these nontherapy
comment period, we define the C–APC G0463 (Hospital outpatient clinic visit outpatient department services that are
payment policy as including all covered for assessment and management of a reported with therapy codes and
OPD services on a hospital outpatient patient); and provided with a comprehensive service
claim reporting a primary service that is • Does not contain services described is included in the payment for the
assigned to status indicator ‘‘J1’’, by a HCPCS code to which we have packaged complete comprehensive
excluding services that are not covered assigned status indicator ‘‘J1’’. service. We note that these services,
OPD services or that cannot by statute The assignment of status indicator even though they are reported with
be paid for under the OPPS. Services ‘‘J2’’ to a specific combination of therapy codes, are hospital outpatient
and procedures described by HCPCS services performed in combination with department services and not therapy
codes assigned to status indicator ‘‘J1’’ each other allows for all other OPPS services. We refer readers to the July
are assigned to C–APCs based on our payable services and items reported on 2016 OPPS Change Request 9658
usual APC assignment methodology by the claim (excluding services that are (Transmittal 3523) for further
evaluating the geometric mean costs of not covered OPD services or that cannot instructions on reporting these services
the primary service claims to establish by statute be paid for under the OPPS) in the context of a C–APC service.
resource similarity and the clinical to be deemed adjunctive services Items included in the packaged
characteristics of each procedure to representing components of a payment provided in conjunction with
establish clinical similarity within each comprehensive service and resulting in the primary service also include all
APC. a single prospective payment for the drugs, biologicals, and
In the CY 2016 OPPS/ASC final rule comprehensive service based on the radiopharmaceuticals, regardless of cost,
with comment period, we expanded the costs of all reported services on the except those drugs with pass-through
C–APC payment methodology to claim (80 FR 70333 through 70336). payment status and SADs, unless they
qualifying extended assessment and Services included under the C–APC function as packaged supplies (78 FR
management encounters through the payment packaging policy, that is, 74868 through 74869 and 74909 and 79
‘‘Comprehensive Observation Services’’ services that are typically adjunctive to FR 66800). We refer readers to Section
C–APC (C–APC 8011). Services within the primary service and provided during 50.2M, Chapter 15, of the Medicare
this APC are assigned status indicator the delivery of the comprehensive Benefit Policy Manual for a description
‘‘J2’’. Specifically, we make a payment service, include diagnostic procedures, of our policy on SADs treated as
through C–APC 8011 for a claim that: laboratory tests, and other diagnostic hospital outpatient supplies, including
• Does not contain a procedure tests and treatments that assist in the lists of SADs that function as supplies
described by a HCPCS code to which we delivery of the primary procedure; visits and those that do not function as
have assigned status indicator ‘‘T’’ and evaluations performed in supplies.
• Contains 8 or more units of services association with the procedure; We define each hospital outpatient
described by HCPCS code G0378 uncoded services and supplies used claim reporting a single unit of a single
(Hospital observation services, per during the service; durable medical primary service assigned to status
hour); equipment as well as prosthetic and indicator ‘‘J1’’ as a single ‘‘J1’’ unit
• Contains services provided on the orthotic items and supplies when procedure claim (78 FR 74871 and 79
same date of service or 1 day before the provided as part of the outpatient FR 66801). Line item charges for
date of service for HCPCS code G0378 service; and any other components services included on the C–APC claim
that are described by one of the reported by HCPCS codes that represent are converted to line item costs, which
following codes: HCPCS code G0379 services that are provided during the are then summed to develop the
(Direct admission of patient for hospital complete comprehensive service (78 FR estimated APC costs. These claims are
observation care) on the same date of 74865 and 79 FR 66800). then assigned one unit of the service
service as HCPCS code G0378; CPT code In addition, payment for hospital with status indicator ‘‘J1’’ and later used
99281 (Emergency department visit for outpatient department services that are to develop the geometric mean costs for
the evaluation and management of a similar to therapy services and the C–APC relative payment weights.
patient (Level 1)); CPT code 99282 delivered either by therapists or (We note that we use the term
(Emergency department visit for the nontherapists is included as part of the ‘‘comprehensive’’ to describe the
evaluation and management of a patient payment for the packaged complete geometric mean cost of a claim reporting
(Level 2)); CPT code 99283 (Emergency comprehensive service. These services ‘‘J1’’ service(s) or the geometric mean
department visit for the evaluation and that are provided during the cost of a C–APC, inclusive of all of the
management of a patient (Level 3)); CPT perioperative period are adjunctive items and services included in the C–
code 99284 (Emergency department services and are deemed not to be APC service payment bundle.) Charges
visit for the evaluation and management therapy services as described in section for services that would otherwise be
of a patient (Level 4)); CPT code 99285 1834(k) of the Act, regardless of whether separately payable are added to the
(Emergency department visit for the the services are delivered by therapists charges for the primary service. This
evaluation and management of a patient or other nontherapist health care process differs from our traditional cost
(Level 5)) or HCPCS code G0380 (Type workers. We have previously noted that accounting methodology only in that all
B emergency department visit (Level 1)); therapy services are those provided by such services on the claim are packaged
(except certain services as described These criteria identify paired code reported in combination with a base
above). We apply our standard data combinations that occur commonly and code that describes a primary ‘‘J1’’
trims, which exclude claims with exhibit materially greater resource service are evaluated for a complexity
extremely high primary units or extreme requirements than the primary service. adjustment.
costs. The CY 2017 OPPS/ASC final rule with To determine which combinations of
The comprehensive geometric mean comment period (81 FR 79582) included primary service codes reported in
costs are used to establish resource a revision to the complexity adjustment conjunction with an add-on code may
similarity and, along with clinical eligibility criteria. Specifically, we qualify for a complexity adjustment for
similarity, dictate the assignment of the finalized a policy to discontinue the CY 2020, in the CY 2020 OPPS/ASC
primary services to the C–APCs. We requirement that a code combination proposed rule (84 FR 39414), we
establish a ranking of each primary (that qualifies for a complexity proposed to apply the frequency and
service (single unit only) to be assigned adjustment by satisfying the frequency cost criteria thresholds discussed above,
to status indicator ‘‘J1’’ according to its and cost criteria thresholds described testing claims reporting one unit of a
comprehensive geometric mean costs. above) also not create a 2 times rule single primary service assigned to status
For the minority of claims reporting violation in the higher level or receiving indicator ‘‘J1’’ and any number of units
more than one primary service assigned APC. of a single add-on code for the primary
to status indicator ‘‘J1’’ or units thereof, After designating a single primary ‘‘J1’’ service. If the frequency and cost
we identify one ‘‘J1’’ service as the service for a claim, we evaluate that criteria thresholds for a complexity
primary service for the claim based on service in combination with each of the adjustment are met and reassignment to
our cost-based ranking of primary other procedure codes reported on the the next higher cost APC in the clinical
services. We then assign these multiple claim assigned to status indicator ‘‘J1’’ family is appropriate (based on meeting
‘‘J1’’ procedure claims to the C–APC to (or certain add-on codes) to determine if the criteria outlined above), we make a
which the service designated as the there are paired code combinations that complexity adjustment for the code
primary service is assigned. If the meet the complexity adjustment criteria. combination; that is, we reassign the
reported ‘‘J1’’ services on a claim map For a new HCPCS code, we determine primary service code reported in
to different C–APCs, we designate the initial C–APC assignment and conjunction with the add-on code to the
‘‘J1’’ service assigned to the C–APC with qualification for a complexity next higher cost C–APC within the same
the highest comprehensive geometric adjustment using the best available clinical family of C–APCs. As
mean cost as the primary service for that information, crosswalking the new previously stated, we package payment
claim. If the reported multiple ‘‘J1’’ HCPCS code to a predecessor code(s) for add-on codes into the C–APC
services on a claim map to the same C– when appropriate. payment rate. If any add-on code
Once we have determined that a reported in conjunction with the ‘‘J1’’
APC, we designate the most costly
particular code combination of ‘‘J1’’ primary service code does not qualify
service (at the HCPCS code level) as the
services (or combinations of ‘‘J1’’ for a complexity adjustment, payment
primary service for that claim. This
services reported in conjunction with for the add-on service continues to be
process results in initial assignments of
certain add-on codes) represents a packaged into the payment for the
claims for the primary services assigned complex version of the primary service primary service and is not reassigned to
to status indicator ‘‘J1’’ to the most because it is sufficiently costly, the next higher cost C–APC. We listed
appropriate C–APCs based on both frequent, and a subset of the primary the complexity adjustments for ‘‘J1’’ and
single and multiple procedure claims comprehensive service overall add-on code combinations for CY 2020,
reporting these services and clinical and according to the criteria described along with all of the other proposed
resource homogeneity. above, we promote the claim including complexity adjustments, in Addendum J
Complexity Adjustments. We use the complex version of the primary to the CY 2020 OPPS/ASC proposed
complexity adjustments to provide service as described by the code rule (which is available via the internet
increased payment for certain combination to the next higher cost C– on the CMS website).
comprehensive services. We apply a APC within the clinical family, unless Addendum J to the proposed rule
complexity adjustment by promoting the primary service is already assigned included the cost statistics for each code
qualifying paired ‘‘J1’’ service code to the highest cost APC within the C– combination that would qualify for a
combinations or paired code APC clinical family or assigned to the complexity adjustment (including
combinations of ‘‘J1’’ services and only C–APC in a clinical family. We do primary code and add-on code
certain add-on codes (as described not create new APCs with a combinations). Addendum J to the
further below) from the originating C– comprehensive geometric mean cost proposed rule also contained summary
APC (the C–APC to which the that is higher than the highest geometric cost statistics for each of the paired code
designated primary service is first mean cost (or only) C–APC in a clinical combinations that describe a complex
assigned) to the next higher paying C– family just to accommodate potential code combination that would qualify for
APC in the same clinical family of C– complexity adjustments. Therefore, the a complexity adjustment and were
APCs. We apply this type of complexity highest payment for any claim including proposed to be reassigned to the next
adjustment when the paired code a code combination for services higher cost C–APC within the clinical
combination represents a complex, assigned to a C–APC would be the family. The combined statistics for all
costly form or version of the primary highest paying C–APC in the clinical proposed reassigned complex code
service according to the following family (79 FR 66802). combinations were represented by an
criteria: We package payment for all add-on alphanumeric code with the first 4
• Frequency of 25 or more claims codes into the payment for the C–APC. digits of the designated primary service
reporting the code combination However, certain primary service add- followed by a letter. For example, the
(frequency threshold); and on combinations may qualify for a proposed geometric mean cost listed in
• Violation of the 2 times rule, as complexity adjustment. As noted in the Addendum J for the code combination
stated in section 1833(t)(2) of the Act CY 2016 OPPS/ASC final rule with described by complexity adjustment
and section III.B.2. of this final rule, in comment period (80 FR 70331), all add- assignment 3320R, which is assigned to
the originating C–APC (cost threshold). on codes that can be appropriately C–APC 5224 (Level 4 Pacemaker and
Similar Procedures), includes all paired to believe that the complexity complex, costly subset of the primary
code combinations that were proposed adjustment criteria, which require a service.
to be reassigned to C–APC 5224 when frequency of 25 or more claims With regard to the requests for further
CPT code 33208 is the primary code. reporting a code combination and a complexity adjustments for blue light
Providing the information contained in violation of the 2 times rule in the cystoscopy procedures using the drug
Addendum J to the proposed rule originating C–APC in order to receive Cysview, as discussed in the CY 2018
allowed stakeholders the opportunity to payment in the next higher cost C–APC OPPS/ASC final rule with comment
better assess the impact associated with within the clinical family, are adequate period (82 FR 59243–59246), we
the proposed reassignment of claims to determine if a combination of acknowledged that there are additional
with each of the paired code procedures represents a complex, costly equipment, supplies, operating room
combinations eligible for a complexity subset of the primary service. If a code time, and other resources required to
adjustment. combination meets these criteria, the perform blue light cystoscopy in
Comment: Several commenters combination receives payment at the addition to white light cystoscopy. We
requested that CMS alter the established next higher cost C–APC. Code also acknowledged stakeholder
C–APC complexity adjustment combinations that do not meet these concerns that the payment for blue light
eligibility criteria to allow additional criteria receive the C–APC payment rate cystoscopy procedures involving
code combinations to qualify for associated with the primary ‘‘J1’’ Cysview® may be creating a barrier to
complexity adjustments. Some service. A minimum of 25 claims is beneficiaries receiving access to
commenters reiterated their request to already a very low threshold for a reasonable and necessary care for which
allow clusters of procedures, consisting national payment system. Lowering the there may not be a clinically comparable
of a ‘‘J1’’ code-pair and multiple other minimum of 25 claims further could alternative. Based on these issues, in CY
associated add-on codes used in lead to unnecessary complexity 2018, we created a HCPCS C-code
combination with that ‘‘J1’’ code-pair to adjustments for service combinations (C9738—Adjunctive blue light
qualify for complexity adjustments. that are rarely performed. cystoscopy with fluorescent imaging
Other commenters requested that CMS We also do not believe that it is agent (list separately in addition to code
allow procedures assigned status necessary to provide payment for claims for primary procedure)) to describe blue
indicator ‘‘S’’ or ‘‘T’’ to be eligible for including qualifying code combinations light cystoscopy with fluorescent
complexity adjustments, to allow a C– at two APC levels higher than the imaging agent and allowed this code to
APC to receive payment at the C–APC originating APC. As stated in the CY be eligible for complexity adjustments
rate two levels higher within the clinical when billed with procedure codes used
2019 OPPS/ASC final rule with
family when there is a violation of the to describe white light cystoscopy of the
comment period (83 FR 58842), we
two-times rule in the receiving C–APC bladder, although this code is not a ‘‘J1’’
believe that payment at the next higher
and also to account for patient service or an add-on code for the
paying C–APC is adequate for code
characteristics such as comorbidities primary ‘‘J1’’ service. For CY 2020, there
combinations that exhibit materially
and sociodemographic factors in the are three code combinations of six total
greater resource requirements than the
complexity adjustment policy. One involving C9738 and procedure codes
primary service and that, in many cases,
commenter recommended that HCPCS used to describe white light cystoscopy
paying the rate assigned to two levels
code 0546T—Radiofrequency that will qualify for a complexity
higher may lead to a significant
spectroscopy, real time, intraoperative adjustment. At this time, we do not
margin assessment, at the time of partial overpayment. As mentioned previously,
believe that further modifications to the
mastectomy, with report—be assigned to we do not create new APCs with a
C–APC policy are necessary.
APC 5091—Level 1 Breast/Lymphatic comprehensive geometric mean cost After consideration of the public
Surgery and Related Procedures and that is higher than the highest geometric comments we received on the proposed
designated for complexity adjustment to mean cost C–APC in a clinical family complexity adjustment policy, we are
APC 5092—Level 2 Breast/Lymphatic just to accommodate potential finalizing the C–APC complexity
Surgery and Related Procedures for CY complexity adjustments. The highest adjustment policy for CY 2020, as
2020. payment for any claim including a code proposed, without modification.
We also received a comment combination for services assigned to a
requesting that CMS modify its C–APC would be the highest paying C– (2) Additional C–APCs for CY 2020
complexity adjustment criteria and APC in the clinical family (79 FR For CY 2020 and subsequent years, in
apply the complexity adjustment to all 66802). Therefore, a policy to pay for the CY 2020 OPPS/ASC proposed rule
blue light cystoscopy with Cysview claims with qualifying code (84 FR 39414), we proposed to continue
procedures in the HOPD, including combinations at two C–APC levels to apply the C–APC payment policy
eliminating the claim frequency higher than the originating APC is not methodology. We refer readers to the CY
requirement to determine eligibility for always feasible. 2017 OPPS/ASC final rule with
the complexity adjustment and Lastly, as stated in the CY 2019 OPPS/ comment period (81 FR 79583) for a
expanding the eligibility for a ASC final rule with comment period (83 discussion of the C–APC payment
complexity adjustment to other APCs FR 58843), we do not believe that it is policy methodology and revisions.
besides C–APCs. necessary to adjust the complexity Each year, in accordance with section
Response: We appreciate these adjustment criteria to allow claims that 1833(t)(9)(A) of the Act, we review and
comments. However, at this time, we do include more than two ‘‘J1’’ procedures, revise the services within each APC
not believe changes to the C–APC procedures that are not assigned to C– group and the APC assignments under
complexity adjustment criteria are APCs, or procedures performed at the OPPS. As a result of our annual
necessary or that we should make certain hospitals with patients with review of the services and the APC
exceptions to the criteria to allow claims more comorbidities, to qualify for a assignments under the OPPS, in the
with the code combinations suggested complexity adjustment. As mentioned proposed rule (84 FR 39414), we
by the commenters to receive earlier, we believe the current criteria proposed to add two C–APCs under the
complexity adjustments. As stated are adequate to determine if a existing C–APC payment policy in CY
previously (81 FR 79582), we continue combination of procedures represents a 2020: Proposed C–APC 5182 (Level 2
Vascular Procedures); and proposed C– rates by allowing a greater number of the CY 2017 OPPS/ASC final rule with
APC 5461 (Level 1 Neurostimulator and claims to be used in the rate setting comment period (81 FR 79584),
Related Procedures). These APCs were process. The Advisory Panel on procedures assigned to C–APCs are
selected to be included in this proposal Hospital Outpatient Payment (HOP primary services (mostly major surgical
because, similar to other C–APCs, these Panel) also recommended that CMS procedures) that are typically the focus
APCs include primary, comprehensive consider creating a comprehensive APC of the hospital outpatient stay. In
services, such as major surgical for autologous stem cell transplantation addition, with regard to the packaging of
procedures, that are typically reported and that CMS provide a rationale if it the drugs based on the C–APC policy, as
with other ancillary and adjunctive decides not to create such an APC. stated in previous rules (78 FR 74868
services. Also, similar to other APCs Response: We thank the commenter through 74869 and 74909 and 79 FR
that have been converted to C–APCs, for this comment. In order to determine 66800), items included in the packaged
there are higher APC levels within the whether it would be appropriate to payment provided with the primary
clinical family or related clinical family create a C–APC for autologous ‘‘J1’’ service include all drugs,
of these APCs that have previously been hematopoietic stem cell transplant, we biologicals, and radiopharmaceuticals
assigned to a C–APC. Table 4 of the modeled this change with APC 5242— payable under the OPPS, regardless of
proposed rule listed the proposed C– Level 2 Blood Product Exchange and cost, except those drugs with pass-
APCs for CY 2020. All C–APCs were Related Services, which includes CPT through payment status. In accordance
displayed in Addendum J to the code 38241 Hematopoietic progenitor with section 1833(t)(2) of the Act and
proposed rule (which is available via cell (hpc); autologous transplantation as § 419.31 of the regulations, we annually
the internet on the CMS website). well as APC 5243—Level 3 Blood review the items and services within an
Addendum J to the proposed rule also Product Exchange and Related Services, APC group to determine if there are any
contained all of the data related to the in keeping with our practice of APC violations of the 2 times rule and
C–APC payment policy methodology, converting APCs to C–APCs that have whether there are any revisions to APC
including the list of proposed higher APC levels within the clinical assignments that may be necessary or
complexity adjustments and other family that are assigned to a C–APC. any exceptions that should be made.
information. After analyzing the results, we found Comment: Several commenters,
We also are considering developing that creating a C–APC for APC 5242 including device manufacturer
an episode-of-care for skin substitutes would increase the number of single associations, expressed concern that the
and are interested in comments claims available for ratesetting for this C–APC payment rates may not
regarding a future C–APC for procedures APC by approximately 8 percent, adequately reflect the costs associated
using skin substitute products furnished however creating new C–APCs in the with services and requested that CMS
in the hospital outpatient department Stem Cell Transplant clinical family not establish any additional C–APCs.
setting. We note that this comment would decrease the geometric mean cost These comments questioned the broader
solicitation is discussed in section of C–APC 5244—Level 4 Blood Product C–APC payment methodology,
V.B.7. of the proposed rule and this Exchange and Related Services by ratesetting accuracy, the impact of C–
final rule with comment period. approximately 75 percent due to APCs on broader agency objectives, and
Comment: Several commenters complexity adjustments of code recommended methodological changes
supported the creation of the two new combinations within the clinical family, to better capture costs of providing
proposed C–APCs, encouraging CMS to specifically complexity adjustments comprehensive services before further
continue to evaluate outpatient charge from C–APC 5243 to C–APC 5244. expansion. Some commenters were
and cost data for additions to the list of Therefore, at this time we do not believe concerned that hospital are not correctly
C–APCs during future rulemaking it is appropriate to create a C–APC for charging for procedures assigned to C–
periods. One commenter requested that autologous hematopoietic stem cell APCs and urged CMS to invest in
CMS closely monitor payments for the transplant. policies and education for hospitals
proposed C–APC 5461 (Level 1 Comment: Two manufacturers of regarding correct billing patterns. These
Neurostimulator and Related Products) drugs used in ocular procedures commenters also requested that CMS
relative to costs of the procedure to requested that CMS discontinue the C– provide an analysis of the impact of the
ensure accurate compensation and APC payment policy for existing C– C–APC policy on affected procedures
availability in the ASC setting. APCs that include procedures involving and patient access to services.
Response: We appreciate the their drugs and instead provide separate Response: We appreciate the
commenters’ support and note that we payment for the drugs. The comments. We continue to believe that
annually review the most recent data manufacturer commenters believed that the proposed new C–APCs for CY 2020
available to determine costs associated the C–APC packaging policy, which are appropriate to be added to the
with furnishing a service and update packages payment for certain drugs that existing C–APC payment policy. We
payment rates accordingly. are adjunctive to the primary service, also note that, in the CY 2018 OPPS/
Comment: We received comments results in underpayment for the drugs ASC final rule with comment period (82
requesting that CMS create a C–APC for and violates the 2 times rule. FR 59246), we conducted an analysis of
autologous hematopoietic stem cell Response: We continue to believe that the effects of the C–APC policy. The
transplant similar to the C–APC the procedures assigned to the proposed analysis looked at data from CY 2016
established for allogeneic hematopoietic C–APCs, including the procedures OPPS/ASC final rule with comment
stem cell transplant. The commenters involving the drugs used in ocular period, the CY 2017 OPPS/ASC final
stated CMS’ APC rate-setting process of procedures mentioned by the rule with comment period, and the CY
using single and pseudo-single commenters, are appropriately paid 2018 OPPS/ASC proposed rule, which
procedure claims results in an through a C–APC and the costs of drugs involved claims data from CY 2014
inadequately low APC payment rate for (as well as other items or services (before C–APCs became effective) to CY
autologous stem cell transplant and furnished with the procedures) are 2016. We looked at separately payable
believed that the creation of a C–APC reflected in hospital billing, and codes that were then assigned to C–
for autologous hematopoietic stem cell therefore the rates that are established APCs and, overall, we observed an
transplant would improve payment for the ocular procedures. As stated in increase in claim line frequency, units
billed, and Medicare payment for those determine if any modifications to this visit (Level 3)); HCPCS code G0383
procedures, which suggest that the C– policy are warranted in future (Type B emergency department visit
APC payment policy did not adversely rulemaking. (Level 4)); HCPCS code G0384 (Type B
affect access to care or reduce payments Comment: We received requests for emergency department visit (Level 5));
to hospitals. clarifications related to C–APC 8011 CPT code 99291 (Critical care,
Comment: One commenter requested Comprehensive Observation Services evaluation and management of the
that CMS discontinue the C–APC (status indicator ‘‘J2’’). One commenter critically ill or critically injured patient;
payment policy for single session requested that CMS clarify the first 30–74 minutes); or HCPCS code
stereotactic radiosurgery (SRS) distinction between status indicators for G0463 (Hospital outpatient clinic visit
procedures, stating concerns that the C– ‘‘V’’ and ‘‘J2’’. Another commenter for assessment and management of a
APC methodology does not account for questioned the rationale for the patient); and
the complexity of delivering radiation established criteria for payment through • Does not contain services described
therapy and fails to capture C–APC 8011, specifically the by a HCPCS code to which we have
appropriately coded claims. The requirement that the claim does not assigned status indicator ‘‘J1’.’
commenters also requested that CMS contain a procedure described by a The assignment of status indicator
continue to make separate payments for HCPCS code to which we have assigned ‘‘J2’’ results in a single prospective
the 10 planning and preparation codes status indicator ‘‘T’’ that is reported payment for the comprehensive
related to SRS and include the HCPCS with a date of service on the same day observation services based on the costs
code for IMRT planning (77301) on the or 1 day earlier than the date of service of all reported services on the claim. We
list of planning and preparation codes, associated with services described by make payment for all other items and
stating that the service has become more HCPCS code G0378. services reported on the hospital
common in single fraction radiosurgery Response: The comprehensive outpatient claim as being adjunctive to
treatment planning. observation services C–APC (C–APC the specific combination of observation
Response: At this time, we do not 8011) was established in CY 2016 (80 services. The assignment of status
believe that it is necessary to FR 70333 through 70336) to provide indicator ‘‘V’’ describes a clinic or
discontinue the C–APCs that include payment for extended assessment and emergency department visit. It does not
single session SRS procedures. We management encounters. C–APC 8011 is describe services paid through a
continue to believe that the C–APC paid and status indicator ‘‘J2’’ is comprehensive APC and it will not
policy is appropriately applied to these assigned when a specific combination of trigger payment through C–APC 8011.
surgical procedures for the reasons cited services is performed. This combination With regard to the comment
when this policy was first adopted and of services was described in previous questioning the rationale for the
note that the commenters did not rulemaking (80 FR 70333 through requirement that the claim does not
provide any empirical evidence to 70336) in detail and is repeated for contain a procedure described by a
support their claims that the existing C– clarity below. Specifically, we make a HCPCS code to which we have assigned
APC policy does not adequately pay for payment through C–APC 8011 for a status indicator ‘‘T’’ that is reported
these procedures. Also, we will claim that: with a date of service on the same day
continue in CY 2020 to pay separately • Does not contain a procedure or 1 day earlier than the date of service
for the 10 planning and preparation described by a HCPCS code to which we associated with services described by
services (HCPCS codes 70551, 70552, have assigned status indicator ‘‘T;’’ HCPCS code G0378 in order to be paid
70553, 77011, 77014, 77280, 77285, • Contains 8 or more units of services through C–APC 8011, this criterion was
77290, 77295, and 77336) adjunctive to described by HCPCS code G0378 incorrectly quoted as the final policy in
the delivery of the SRS treatment using (Hospital observation services, per the CY 2020 OPPS/ASC proposed rule
either the Cobalt-60-based or LINAC hour); (84 FR 39412). This language has been
based technology when furnished to a • Contains services provided on the updated in this final rule with comment
beneficiary within 1 month of the SRS same date of service or 1 day before the period. This criterion was proposed in
treatment for CY 2020 (82 FR 59242 and date of service for HCPCS code G0378 the CY 2016 OPPS/ASC proposed rule,
59243). that are described by one of the however a modification of this criterion
Comment: Several commenters following codes: HCPCS code G0379 was finalized. We refer readers to the
requested that CMS discontinue the C– (Direct admission of patient for hospital discussion of the establishment of C–
APC payment policy for all surgical observation care) on the same date of APC 8011 in the CY 2016 OPPS/ASC
insertion codes required for service as HCPCS code G0378; CPT code Final Rule with comment period (80 FR
brachytherapy treatment. The 99281 (Emergency department visit for 70335–70336). In this rule, we stated in
commenters stated concerns about how the evaluation and management of a response to commenters’ concerns
the C–APC methodology impacts patient (Level 1)); CPT code 99282 regarding packaging payment for
radiation oncology, particularly the (Emergency department visit for the potentially high-cost surgical
delivery of brachytherapy for the evaluation and management of a patient procedures into the payment for an
treatment of cervical cancer. They also (Level 2)); CPT code 99283 (Emergency observation C–APC, we finalized a
stated that they oppose C–APC payment department visit for the evaluation and policy that claims reporting procedures
for cancer care given the complexity of management of a patient (Level 3)); CPT assigned status indicator ‘‘T’’ should not
coding, serial billing for cancer care, code 99284 (Emergency department qualify for payment through C–APC
and potentially different sites of service visit for the evaluation and management 8011, regardless of whether the
for the initial surgical device insertion of a patient (Level 4)); CPT code 99285 procedure assigned status indicator ‘‘T’’
and subsequent treatment delivery or (Emergency department visit for the was furnished before or after
other supportive services. evaluation and management of a patient observation services (described by
Response: While we continue to (Level 5)) or HCPCS code G0380 (Type HCPCS code G0378) were provided. We
believe that the C–APC policy is B emergency department visit (Level 1)); state the final criteria for assignment for
appropriately applied to these surgical HCPCS code G0381 (Type B emergency payment through C–APC 8011 in the CY
procedures, we will continue to department visit (Level 2)); HCPCS code 2016 OPPS/ASC final rule with
examine these concerns and will G0382 (Type B emergency department comment period, including that the
claims must not contain a procedure 2020. Table 4 below lists the final C– with comment period also contains all
described by a HCPCS code to which we APCs for CY 2020. All C–APCs are of the data related to the C–APC
have assigned status indicator ‘‘T’’ (80 displayed in Addendum J to this final payment policy methodology, including
FR 70335). rule with comment period (which is the list of complexity adjustments and
After consideration of the public available via the internet on the CMS other information for CY 2020.
comments we received, we are website). Addendum J to this final rule BILLING CODE 4120–01–P
finalizing the proposed C–APCs for CY
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BILLING CODE 4120–01–C reduced. This was contrary to the To address this issue and help ensure
(3) Exclusion of Procedures Assigned to objective of the New Technology APC that there is sufficient claims data for
New Technology APCs from the C–APC payment policy, which is to gather services assigned to New Technology
Policy sufficient claims data to enable us to APCs, in the CY 2019 OPPS/ASC final
assign the service to an appropriate rule with comment period (83 FR
Services that are assigned to New
clinical APC. 58847), we proposed excluded payment
Technology APCs are typically new
for any procedure that is assigned to a
procedures that do not have sufficient For example, for CY 2017, there were
New Technology APC (APCs 1491
claims history to establish an accurate seven claims generated for HCPCS code
payment for the procedures. Beginning through 1599 and APCs 1901 through
0100T (Placement of a subconjunctival
in CY 2002, we retain services within 1908) from being packaged when
retinal prosthesis receiver and pulse included on a claim with a ‘‘J1’’ service
New Technology APC groups until we generator, and implantation of
gather sufficient claims data to enable assigned to a C–APC. For CY 2020, we
intraocular retinal electrode array, with proposed to continue to exclude
us to assign the service to an vitrectomy), which involves the use of
appropriate clinical APC. This policy payment for any procedure that is
the Argus® II Retinal Prosthesis System. assigned to a New Technology APC
allows us to move a service from a New However, several of these claims were
Technology APC in less than 2 years if from being packaged when included on
not available for ratesetting because a claim with a ‘‘J1’’ service assigned to
sufficient data are available. It also HCPCS code 0100T was reported with a
allows us to retain a service in a New a C–APC.
‘‘J1’’ procedure and, therefore, payment Some stakeholders have raised
Technology APC for more than 2 years
was packaged into the associated C– questions about whether the policy
if sufficient data upon which to base a
APC payment. If these services had been established in the CY 2019 OPPS/ASC
decision for reassignment have not been
separately paid under the OPPS, there final rule with comment period would
collected (82 FR 59277).
The C–APC payment policy packages would be at least two additional single also apply to comprehensive
payment for adjunctive and secondary claims available for ratesetting. As observation services assigned status
items, services, and procedures into the mentioned previously, the purpose of indicator ‘‘J2.’’ We recognize that the
most costly primary procedure under the new technology APC policy is to policy described and adopted in the CY
the OPPS at the claim level. Prior to CY ensure that there are sufficient claims 2019 rulemaking may have been
2019 when a procedure assigned to a data for new services, which is ambiguous with respect to this issue.
New Technology APC was included on particularly important for services with While our intention in the CY 2019
the claim with a primary procedure, a low volume such as procedures rulemaking was only to exclude
identified by OPPS status indicator described by HCPCS code 0100T. payment for services assigned to New
‘‘J1’’, payment for the new technology Another concern is the costs reported Technology APCs from being bundled
service was typically packaged into the for the claims when payment is not into the payment for a comprehensive
payment for the primary procedure. packaged for a new technology ‘‘J1’’ service, we believe that there may
Because the new technology service was procedure may not be representative of also be some instances in which it
not separately paid in this scenario, the all of the services included on a claim would be clinically appropriate to
overall number of single claims that is generated, which may also affect provide a new technology service when
available to determine an appropriate our ability to assign the new service to providing comprehensive observation
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clinical APC for the new service was the most appropriate clinical APC. services. We would not generally expect
that to be the case, because procedures appropriate clinical APC and therefore, refer readers to the CY 2008 OPPS/ASC
assigned to New Technology APCs we excluded procedures assigned to final rule with comment period (72 FR
typically are new or low-volume New Technology APCs from packaging 66611 through 66614 and 66650 through
surgical procedures, or are specialized under the C–APC policy. In the CY 2019 66652) for a full discussion of the
tests to diagnosis a specific condition. In final rule, we specifically stated that the development of the composite APC
addition, it is highly unlikely a general exclusion policy included methodology, and the CY 2012 OPPS/
observation procedure would be circumstances when New Technology ASC final rule with comment period (76
assigned to a New Technology APC procedures were billed with FR 74163) and the CY 2018 OPPS/ASC
because there are clinical APCs already comprehensive services assigned to final rule with comment period (82 FR
established under the OPPS to classify status indicator ‘‘J1’’, however we 59241 through 59242 and 59246 through
general observation procedures. As we believe this rationale is also applicable 52950) for more recent background.
stated in the CY 2016 OPPS/ASC final to comprehensive observation services
(1) Mental Health Services Composite
rule with comment period, observation that are assigned status indicator ‘‘J2’’.
APC
services may not be used for post- Therefore, we are modifying our policy
operative recovery and, as such, for excluding procedures assigned to In the CY 2020 OPPS/ASC proposed
observation services furnished with New Technology APCs from the C–APC rule (84 FR 39398), we proposed to
services assigned to status indicator ‘‘T’’ policy. For CY 2020, we are finalizing continue our longstanding policy of
will always be packaged (80 FR 70334). our policy to continue to exclude limiting the aggregate payment for
Therefore, we proposed that payment payment for any procedure that is specified less resource-intensive mental
for services assigned to a New assigned to a New Technology APC health services furnished on the same
Technology APC when included on a from being packaged when included on date to the payment for a day of partial
claim for a service assigned status a claim with a ‘‘J1’’ service assigned to hospitalization services provided by a
indicator ‘‘J2’’ assigned to a C–APC will a C–APC. For CY 2020, we are also hospital, which we consider to be the
be packaged into the payment for the finalizing a policy to exclude payment most resource-intensive of all outpatient
comprehensive service. Nonetheless, we for any procedures that are assigned to mental health services. We refer readers
sought public comments on whether it a New Technology APC from being to the April 7, 2000 OPPS final rule
would be clinically appropriate to packaged into the payment for with comment period (65 FR 18452
exclude payment for any New comprehensive observation services through 18455) for the initial discussion
Technology APC procedures from being assigned to status indicator ‘‘J2’’ when of this longstanding policy and the CY
packaged into the payment for a they are included on a claim with ‘‘J2’’ 2012 OPPS/ASC final rule with
comprehensive ‘‘J2’’ service starting in procedures. comment period (76 FR 74168) for more
CY 2020. recent background.
Comment: Several commenters, c. Calculation of Composite APC In the CY 2017 OPPS/ASC final rule
including device manufacturers, device Criteria-Based Costs with comment period (81 FR 79588
manufacturer associations and As discussed in the CY 2008 OPPS/ through 79589), we finalized a policy to
physicians were opposed to our ASC final rule with comment period (72 combine the existing Level 1 and Level
proposal to package payment for FR 66613), we believe it is important 2 hospital-based PHP APCs into a single
procedures assigned to a New that the OPPS enhance incentives for hospital-based PHP APC, and thereby
Technology APC into the payment for hospitals to provide necessary, high discontinue APCs 5861 (Level 1—Partial
comprehensive observation services quality care as efficiently as possible. Hospitalization (3 services) for Hospital-
assigned status indicator ‘‘J2’’. The For CY 2008, we developed composite Based PHPs) and 5862 (Level—2 Partial
commenters stated that there were APCs to provide a single payment for Hospitalization (4 or more services) for
instances where beneficiaries receiving groups of services that are typically Hospital-Based PHPs) and replace them
observation services may require the performed together during a single with APC 5863 (Partial Hospitalization
types of procedures that are assigned to clinical encounter and that result in the (3 or more services per day)).
new technology APCs. Several provision of a complete service. In the CY 2018 OPPS/ASC proposed
commenters specifically mentioned the Combining payment for multiple, rule and final rule with comment period
HeartFlow Analysis, and stated that it independent services into a single OPPS (82 FR 33580 through 33581 and 59246
could be performed appropriately for a payment in this way enables hospitals through 59247, respectively), we
patient receiving observation services. to manage their resources with proposed and finalized the policy for
The commenters also stated that maximum flexibility by monitoring and CY 2018 and subsequent years that,
providing separate payment for this new adjusting the volume and efficiency of when the aggregate payment for
technology procedure will allow CMS to services themselves. An additional specified mental health services
collect sufficient claims data to enable advantage to the composite APC model provided by one hospital to a single
assignment of the procedure to an is that we can use data from correctly beneficiary on a single date of service,
appropriate clinical APC. coded multiple procedure claims to based on the payment rates associated
Response: We appreciate the calculate payment rates for the specified with the APCs for the individual
stakeholders’ comments regarding this combinations of services, rather than services, exceeds the maximum per
proposal and agree that, although rare, relying upon single procedure claims diem payment rate for partial
there are situations in which it is which may be low in volume and/or hospitalization services provided by a
clinically appropriate to provide a new incorrectly coded. Under the OPPS, we hospital, those specified mental health
technology service when providing currently have composite policies for services will be paid through composite
comprehensive observation services. As mental health services and multiple APC 8010 (Mental Health Services
discussed in the CY 2019 OPPS/ASC imaging services. (We note that, in the Composite). In addition, we set the
final rule with comment period (83 FR CY 2018 OPPS/ASC final rule with payment rate for composite APC 8010
58847), the purpose of the new comment period, we finalized a policy for CY 2018 at the same payment rate
technology APC policy is to ensure that to delete the composite APC 8001 (LDR that will be paid for APC 5863, which
there are sufficient claims data for new Prostate Brachytherapy Composite) for is the maximum partial hospitalization
services to assign these procedures to an CY 2018 and subsequent years.) We per diem payment rate for a hospital,
and finalized a policy that the hospital (2) Multiple Imaging Composite APCs (noncomposite) APC assignments
will continue to be paid the payment (APCs 8004, 8005, 8006, 8007, and continue to apply for single imaging
rate for composite APC 8010. Under this 8008) procedures and multiple imaging
policy, the I/OCE will continue to Effective January 1, 2009, we provide procedures performed across families.
determine whether to pay for these a single payment each time a hospital For a full discussion of the development
specified mental health services submits a claim for more than one of the multiple imaging composite APC
individually, or to make a single imaging procedure within an imaging methodology, we refer readers to the CY
payment at the same payment rate family on the same date of service, in 2009 OPPS/ASC final rule with
established for APC 5863 for all of the comment period (73 FR 68559 through
order to reflect and promote the
specified mental health services 68569).
efficiencies hospitals can achieve when
In the CY 2020 OPPS/ASC proposed
furnished by the hospital on that single performing multiple imaging procedures rule (84 FR 39398), we proposed to
date of service. We continue to believe during a single session (73 FR 41448 continue to pay for all multiple imaging
that the costs associated with through 41450). We utilize three procedures within an imaging family
administering a partial hospitalization imaging families based on imaging performed on the same date of service
program at a hospital represent the most modality for purposes of this using the multiple imaging composite
resource intensive of all outpatient methodology: (1) Ultrasound; (2) APC payment methodology. We stated
mental health services. Therefore, we do computed tomography (CT) and that we continue to believe that this
not believe that we should pay more for computed tomographic angiography policy would reflect and promote the
mental health services under the OPPS (CTA); and (3) magnetic resonance efficiencies hospitals can achieve when
than the highest partial hospitalization imaging (MRI) and magnetic resonance performing multiple imaging procedures
per diem payment rate for hospitals. angiography (MRA). The HCPCS codes during a single session.
subject to the multiple imaging The proposed CY 2020 payment rates
In the CY 2020 OPPS/ASC proposed composite policy and their respective
rule (84 FR 39398), for CY 2020, we for the five multiple imaging composite
families are listed in Table 12 of the CY APCs (APCs 8004, 8005, 8006, 8007,
proposed that when the aggregate 2014 OPPS/ASC final rule with
payment for specified mental health and 8008) were based on proposed
comment period (78 FR 74920 through geometric mean costs calculated from
services provided by one hospital to a 74924). CY 2018 claims available for the CY
single beneficiary on a single date of While there are three imaging 2020 OPPS/ASC proposed rule that
service, based on the payment rates families, there are five multiple imaging qualified for composite payment under
associated with the APCs for the composite APCs due to the statutory the current policy (that is, those claims
individual services, exceeds the requirement under section 1833(t)(2)(G) reporting more than one procedure
maximum per diem payment rate for of the Act that we differentiate payment within the same family on a single date
partial hospitalization services provided for OPPS imaging services provided of service). To calculate the proposed
by a hospital, those specified mental with and without contrast. While the geometric mean costs, we used the same
health services would be paid through ultrasound procedures included under methodology that we have used to
composite APC 8010 for CY 2020. In the policy do not involve contrast, both calculate the geometric mean costs for
addition, we proposed to set the CT/CTA and MRI/MRA scans can be these composite APCs since CY 2014, as
proposed payment rate for composite provided either with or without described in the CY 2014 OPPS/ASC
APC 8010 at the same payment rate that contrast. The five multiple imaging final rule with comment period (78 FR
we proposed for APC 5863, which is the composite APCs established in CY 2009 74918). The imaging HCPCS codes
maximum partial hospitalization per are: referred to as ‘‘overlap bypass codes’’
diem payment rate for a hospital, and • APC 8004 (Ultrasound Composite); that we removed from the bypass list for
that the hospital continue to be paid the • APC 8005 (CT and CTA without purposes of calculating the proposed
proposed payment rate for composite Contrast Composite); multiple imaging composite APC
APC 8010. • APC 8006 (CT and CTA with geometric mean costs, in accordance
Contrast Composite); with our established methodology as
We did not receive any public
• APC 8007 (MRI and MRA without stated in the CY 2014 OPPS/ASC final
comment on these proposals. Therefore, Contrast Composite); and rule with comment period (78 FR
we are finalizing our proposal, without • APC 8008 (MRI and MRA with 74918), were identified by asterisks in
modification, that when the aggregate Contrast Composite). Addendum N to the CY 2020 OPPS/ASC
payment for specified mental health We define the single imaging session proposed rule (which is available via
services provided by one hospital to a for the ‘‘with contrast’’ composite APCs the internet on the CMS website) and
single beneficiary on a single date of as having at least one or more imaging were discussed in more detail in section
service, based on the payment rates procedures from the same family II.A.1.b. of the CY 2020 OPPS/ASC
associated with the APCs for the performed with contrast on the same proposed rule.
individual services, exceeds the date of service. For example, if the For the CY 2020 OPPS/ASC proposed
maximum per diem payment rate for hospital performs an MRI without rule, we were able to identify
partial hospitalization services provided contrast during the same session as at approximately 700,000 ‘‘single session’’
by a hospital, those specified mental least one other MRI with contrast, the claims out of an estimated 4.9 million
health services would be paid through hospital will receive payment based on potential claims for payment through
composite APC 8010 for CY 2020. In the payment rate for APC 8008, the composite APCs from our ratesetting
addition, we are finalizing our proposal ‘‘with contrast’’ composite APC. claims data, which represents
to set the payment rate for composite We make a single payment for those approximately 14 percent of all eligible
APC 8010 for CY 2020 at the same imaging procedures that qualify for claims, to calculate the proposed CY
payment rate that we set for APC 5863, payment based on the composite APC 2020 geometric mean costs for the
which is the maximum partial payment rate, which includes any multiple imaging composite APCs.
hospitalization per diem payment rate packaged services furnished on the Table 5 of the CY 2020 OPPS/ASC
for a hospital. same date of service. The standard proposed rule listed the proposed
HCPCS codes that would be subject to Therefore, we are finalizing our that will be subject to the multiple
the multiple imaging composite APC proposal to continue the use of multiple imaging composite APC policy and their
policy and their respective families and imaging composite APCs to pay for respective families and approximate
approximate composite APC proposed services providing more than one composite APC final geometric mean
geometric mean costs for CY 2020. imaging procedure from the same family costs for CY 2020.
We did not receive any public on the same date, without modification. BILLING CODE 4120–01–P
comments on these proposals. Table 6 below lists the HCPCS codes
ER12NO19.007</GPH>
ER12NO19.008</GPH>
ER12NO19.009</GPH>
ER12NO19.010</GPH>
BILLING CODE 4120–01–C cost cases requiring many ancillary services for which we believe payment
3. Changes to Packaged Items and items and services and lower cost cases would be appropriately packaged into
Services requiring fewer ancillary items and payment for the primary service that
services. Because packaging encourages they support. Specifically, we examined
a. Background and Rationale for efficiency and is an essential component the HCPCS code definitions (including
Packaging in the OPPS of a prospective payment system, CPT code descriptors) and outpatient
Like other prospective payment packaging payments for items and hospital billing patterns to determine
systems, the OPPS relies on the concept services that are typically integral, whether there were categories of codes
of averaging to establish a payment rate ancillary, supportive, dependent, or for which packaging would be
for services. The payment may be more adjunctive to a primary service has been appropriate according to existing OPPS
or less than the estimated cost of a fundamental part of the OPPS since its packaging policies or a logical
providing a specific service or a bundle implementation in August 2000. For an expansion of those existing OPPS
of specific services for a particular extensive discussion of the history and packaging policies. In the CY 2020
beneficiary. The OPPS packages background of the OPPS packaging OPPS/ASC proposed rule (84 FR 39423
payments for multiple interrelated items policy, we refer readers to the CY 2000 through 39424), beginning in CY 2020,
and services into a single payment to OPPS final rule (65 FR 18434), the CY we proposed to conditionally package
create incentives for hospitals to furnish 2008 OPPS/ASC final rule with the costs of selected newly identified
services most efficiently and to manage comment period (72 FR 66580), the CY ancillary services into payment with a
their resources with maximum 2014 OPPS/ASC final rule with primary service where we believe that
flexibility. Our packaging policies comment period (78 FR 74925), the CY the packaged item or service is integral,
support our strategic goal of using larger 2015 OPPS/ASC final rule with ancillary, supportive, dependent, or
payment bundles in the OPPS to comment period (79 FR 66817), the CY adjunctive to the provision of care that
maximize hospitals’ incentives to 2016 OPPS/ASC final rule with was reported by the primary service
provide care in the most efficient comment period (80 FR 70343), the CY HCPCS code. Below we discuss the
manner. For example, where there are a 2017 OPPS/ASC final rule with proposed and finalized changes to the
variety of devices, drugs, items, and comment period (81 FR 79592), the CY packaging policies beginning in CY
supplies that could be used to furnish 2018 OPPS/ASC final rule with 2020.
a service, some of which are more costly comment period (82 FR 59250), and the Comment: We received several
than others, packaging encourages CY 2019 OPPS/ASC final rule with comments from patient advocates,
hospitals to use the most cost-efficient comment period (83 FR 58854). As we physicians, drug manufacturers, and
item that meets the patient’s needs, continue to develop larger payment professional medical societies regarding
rather than to routinely use a more groups that more broadly reflect services payment for blue light cystoscopy
expensive item, which may occur if provided in an encounter or episode of procedures involving Cysview®
separate payment is provided for the care, we have expanded the OPPS (hexaminolevulinate HCl) (described by
item. packaging policies. Most, but not HCPCS code C9275). Cysview® is a drug
Packaging also encourages hospitals necessarily all, categories of items and that functions as a supply in a
to effectively negotiate with services currently packaged in the OPPS diagnostic test or procedure and
manufacturers and suppliers to reduce are listed in 42 CFR 419.2(b). Our therefore payment for this product is
the purchase price of items and services overarching goal is to make payments packaged with payment for the primary
or to explore alternative group for all services under the OPPS more procedure in the OPPS and ASC
purchasing arrangements, thereby consistent with those of a prospective settings. Commenters stated that
encouraging the most economical health payment system and less like those of a utilization of Cysview® is low in the
care delivery. Similarly, packaging per-service fee schedule, which pays HOPD and ASC settings, which they
encourages hospitals to establish separately for each coded item. As a part attributed to the packaging of Cysview
protocols that ensure that necessary of this effort, we have continued to as a drug that functions as a supply in
services are furnished, while examine the payment for items and a diagnostic test or procedure.
scrutinizing the services ordered by services provided under the OPPS to Commenters indicated that packaged
practitioners to maximize the efficient determine which OPPS services can be payment does not adequately pay for the
use of hospital resources. Packaging packaged to further achieve the blue light cystoscopy procedures,
payments into larger payment bundles objective of advancing the OPPS toward particularly in the ASC setting where
promotes the predictability and a more prospective payment system. payment is generally approximately 55
accuracy of payment for services over For CY 2020, we examined the items percent of the HOPD payment.
time. Finally, packaging may reduce the and services currently provided under Commenters believe that providers have
importance of refining service-specific the OPPS, reviewing categories of been deterred from the use of this
payment because packaged payments integral, ancillary, supportive, technology, especially in the ASC, and
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include costs associated with higher dependent, or adjunctive items and as a result a significant percentage of
beneficiaries are not able to access the separately for Cysview® when it is used • 93572—Intravascular doppler
procedure. with blue light cystoscopy in either the velocity and/or pressure derived
Commenters also stated that there has HOPD or ASC setting. We also do not coronary flow reserve measurement
been literature published showing that believe that it would be appropriate to (coronary vessel or graft) during
Blue Light Cystoscopy with Cysview® is utilize our equitable adjustment coronary angiography including
more effective than white light authority at section 1833(t)(2)(E) of the pharmacologically induced stress; each
cystoscopy alone at detecting and Act to provide an ‘‘add-on’’ or ‘‘drug additional vessel (list separately in
eliminating nonmuscle invasive bladder intensive’’ payment to ASCs when using addition to code for primary
cancer tumors, leading to a reduction in Cysview® in blue light cystoscopy procedure));
bladder cancer recurrence. procedures nor do we have any • 92978—Endoluminal imaging of
Commenters made various evidence to show that separate payment coronary vessel or graft using
recommendations for payment for blue for all diagnostic imaging drugs intravascular ultrasound (ivus) or
light cystoscopy procedures involving (radiopharmaceuticals, contrast agents) optical coherence tomography (oct)
Cysview®, including to pay separately is required. However, we will continue during diagnostic evaluation and/or
for Cysview® when it is used with blue to examine payment for blue light therapeutic intervention including
light cystoscopy in the HOPD and ASC cystoscopy procedures involving imaging supervision, interpretation and
settings, to pay separately for Cysview® Cysview to determine if any changes to report; initial vessel (list separately in
when it is used with blue light this policy would be appropriate in addition to code for primary procedure);
cystoscopy in the ASC setting, similar to future rulemaking. and
the policy finalized for Exparel® in the Comment: Some commenters • 92979—Endoluminal imaging of
CY 2019 OPPS/ASC final rule with requested that we eliminate the coronary vessel or graft using
comment period (83 FR 58860), or to packaging policy for drugs that function intravascular ultrasound (ivus) or
utilize our equitable adjustment as a supply when used in a diagnostic optical coherence tomography (oct)
authority at section 1833(t)(2)(E) of the test or procedure. during diagnostic evaluation and/or
Act to provide an ‘‘add-on’’ or ‘‘drug Response: In the CY 2014 OPPS/ASC therapeutic intervention including
intensive’’ payment to ASCs when using final rule with comment period, we imaging supervision, interpretation and
Cysview® in blue light cystoscopy established a policy to package drugs, report; each additional vessel (list
procedures. Other commenters biologicals, and radiopharmaceuticals separately in addition to code for
requested separate payment for all that function as supplies when used in primary procedure)).
diagnostic imaging drugs a diagnostic test or procedure. In Response: As stated in the CY 2008
(radiopharmaceuticals and contrast particular, we referred to drugs, OPPS/ASC final rule with comment
agents). biologicals, and radiopharmaceuticals period (72 FR 66630), we continue to
Response: We acknowledge the that function as supplies as a part of a believe that IVUS and FFR are
concerns of the numerous stakeholders larger, more encompassing service or dependent services that are always
who commented on this issue and procedure, namely, the diagnostic test provided in association with a primary
understand the importance of blue light or procedure in which the drug, service. Add-on codes represent services
cystoscopy procedures involving biological, or radiopharmaceutical is that are integral, ancillary, supportive,
Cysview®. Cysview has been packaged employed (78 FR 74927). At this time, dependent, or adjunctive items and
as a drug, biological, or we do not believe it is necessary to services for which we believe payment
radiopharmaceutical that functions as a eliminate this policy. As previously would be appropriately packaged into
supply in a diagnostic test or procedure noted, the OPPS packages payments for
payment for the primary service that
since CY 2014 (78 FR 74930). As we multiple interrelated items and services
they support. As we have noted in past
stated in the CY 2018 OPPS/ASC final into a single payment to create
rule with comment period (82 FR rules, add-on codes do not represent
incentives for hospitals to furnish
59244), we recognize that blue light standalone procedures and are inclusive
services most efficiently and to manage
cystoscopy represents an additional to other procedures performed at the
their resources with maximum
elective but distinguishable service as same time (79 FR 66818). We continue
flexibility. Our packaging policies
compared to white light cystoscopy that, to believe it is unnecessary to provide
support our strategic goal of using larger
in some cases, may allow greater separate payment for the previously
payment bundles in the OPPS to
detection of bladder tumors in mentioned add-on codes at this time.
maximize hospitals’ incentives to
beneficiaries relative to white light provide care in the most efficient b. Packaging Policy for Non-Opioid Pain
cystoscopy alone. Given the additional manner. Management Treatments
equipment, supplies, operating room Comment: One commenter requested
time, and other resources required to (1) Background on OPPS/ASC Non-
separate payment for add-on codes for
perform blue light cystoscopy in Opioid Pain Management Packaging
Fractional Flow Reserve Studies (FFR/
addition to white light cystoscopy, in Policies
iFR) and Intravascular Ultrasound
CY 2018, we created a new HCPCS C- (IVUS). The commenter stated that they In the CY 2018 OPPS/ASC proposed
code to describe blue light cystoscopy believe the packaging of these codes rule (82 FR 33588), within the
and since CY 2018 have allowed for will disincentivize physicians to framework of existing packaging
complexity adjustments to higher perform these adjunct procedures categories, such as drugs that function
paying C–APCs for qualifying white because of cost. The codes include: as supplies in a surgical procedure or
light and blue light cystoscopy code • 93571—Intravascular doppler diagnostic test or procedure, we
combinations. At this time, we continue velocity and/or pressure derived requested stakeholder feedback on
to believe that Cysview® is a drug that coronary flow reserve measurement common clinical scenarios involving
functions as a supply in a diagnostic test (coronary vessel or graft) during currently packaged items and services
or procedure and payment for this drug coronary angiography including described by HCPCS codes that
is packaged with payment for the pharmacologically induced stress; stakeholders believe should not be
diagnostic procedure. Therefore, we do initial vessel (list separately in addition packaged under the OPPS. We also
not believe it is necessary to pay to code for primary procedure); expressed interest in stakeholder
feedback on common clinical scenarios packaging policies under the OPPS and most recently renewed on April 19,
involving separately payable HCPCS consider these policies in future 2019.8
codes for which payment would be most rulemaking. For the CY 2019 rulemaking, we
appropriately packaged under the OPPS. reviewed available literature with
In addition to stakeholder feedback
Commenters who responded to the CY respect to Exparel®, including a briefing
regarding OPPS packaging policies in
2018 OPPS/ASC proposed rule document 9 submitted for FDA Advisory
response to the CY 2019 OPPS/ASC Committee Meeting held February 14–
expressed a variety of views on
proposed rule, the President’s 15, 2018, by the manufacturer of
packaging under the OPPS. In the CY
2018 OPPS/ASC final rule with Commission on Combating Drug Exparel® that notes that ‘‘. . .
comment period (82 FR 59255), we Addiction and the Opioid Crisis (the Bupivacaine, the active pharmaceutical
summarized these public comments. Commission) had recommended that ingredient in Exparel®, is a local
The public comments ranged from CMS examine payment policies for anesthetic that has been used for
requests to unpackage most items and certain drugs that function as a supply, infiltration/field block and peripheral
services that are either conditionally or specifically non-opioid pain nerve block for decades’’ and that ‘‘since
unconditionally packaged under the management treatments (83 FR 37068). its approval, Exparel® has been used
OPPS, including drugs and devices, to The Commission was established in extensively, with an estimated 3.5
specific requests for separate payment 2017 to study ways to combat and treat million patient exposures in the US.’’ 10
for a specific drug or device. drug abuse, addiction, and the opioid On April 6, 2018, FDA approved
In terms of Exparel® in particular, we crisis. The Commission’s report 3 Exparel®’s new indication for use as an
received several requests to pay included a recommendation for CMS to interscalene brachial plexus nerve block
separately for the drug Exparel® rather ‘‘. . . review and modify ratesetting to produce postsurgical regional
than packaging payment for it as a policies that discourage the use of non- analgesia.11 Therefore, we also stated in
surgical supply. We had previously opioid treatments for pain, such as the CY 2019 OPPS/ASC proposed rule
stated that we considered Exparel® to be certain bundled payments that make that, based on our review of currently
a drug that functions as a surgical alternative treatment options cost available OPPS Medicare claims data
supply because it is indicated for the prohibitive for hospitals and doctors, and public information from the
alleviation of postoperative pain (79 FR particularly those options for treating manufacturer of the drug, we did not
66874 and 66875). We had also stated immediate postsurgical pain . . . .’’ 4 believe that the OPPS packaging policy
before that we considered all items With respect to the packaging policy, had discouraged the use of Exparel® for
related to the surgical outcome and the Commission’s report states that either of the drug’s indications when
provided during the hospital stay in ‘‘. . . the current CMS payment policy furnished in the hospital outpatient
which the surgery is performed, for ‘supplies’ related to surgical department setting.
including postsurgical pain In the CY 2019 OPPS/ASC proposed
procedures creates unintended
management drugs, to be part of the rule, in response to stakeholder
incentives to prescribe opioid comments on the CY 2018 OPPS/ASC
surgery for purposes of our drug and
medications to patients for postsurgical final rule with comment period (82 FR
biological surgical supply packaging
policy. (We note that Exparel® is a pain instead of administering non- 52485) and in light of the
liposome injection of bupivacaine, an opioid pain medications. Under current recommendations regarding payment
amide local anesthetic, indicated for policies, CMS provides one all-inclusive policies for certain drugs, we evaluated
single-dose infiltration into the surgical bundled payment to hospitals for all the impact of our packaging policy for
site to produce postsurgical analgesia. In ‘surgical supplies,’ which includes drugs that function as a supply when
2011, Exparel® was approved by FDA hospital administered drug products used in a surgical procedure on the
for single-dose infiltration into the intended to manage patients’ utilization of these drugs in both the
surgical site to provide postsurgical postsurgical pain. This policy results in hospital outpatient department and the
analgesia.1 2 Exparel® had pass-through the hospitals receiving the same fixed ASC setting. Our packaging policy is
payment status from CYs 2012 through fee from Medicare whether the surgeon that the costs associated with packaged
2014 and was separately paid under administers a non-opioid medication or drugs that function as a supply are
both the OPPS and the ASC payment not.’’ 5 HHS also presented an Opioid included in the ratesetting methodology
system during this 3-year period. Strategy in April 2017 6 that aims in part for the surgical procedures with which
Beginning in CY 2015, Exparel® was to support cutting-edge research and they are billed, and the payment rate for
packaged as a surgical supply under advance the practice of pain the associated procedure reflects the
both the OPPS and the ASC payment management. On October 26, 2017, the costs of the packaged drugs and other
system.) President declared the opioid crisis a packaged items and services to the
In the CY 2018 OPPS/ASC final rule national public health emergency under extent they are billed with the
with comment period (82 FR 52485, we Federal law 7 and this declaration was procedure. In our evaluation, we used
reiterated our position with regard to currently available data to analyze the
payment for Exparel®, stating that we 3 President’s Commission on Combating Drug utilization patterns associated with
believed that payment for this drug is Addiction and the Opioid Crisis, Report (2017).
appropriately packaged with the Available at: https://www.whitehouse.gov/sites/ 8 Available at: https://www.phe.gov/emergency/
primary surgical procedure. We also whitehouse.gov/files/images/Final_Report_Draft_ news/healthactions/phe/Pages/default.aspx.

11-1-2017.pdf. 9 Food and Drug Administration, Meeting of the
stated in the CY 2018 OPPS/ASC final 4 Ibid, at page 57, Recommendation 19.
Anesthetic and Analgesic Drug Products Advisory
rule with comment period that CMS 5 Ibid. Committee Briefing Document (2018). Available at:
would continue to explore and evaluate 6 Available at: https://www.hhs.gov/about/ https://www.fda.gov/downloads/
leadership/secretary/speeches/2017-speeches/ AdvisoryCommittees/CommitteesMeetingMaterials/
1 2011 product label available at: https:// secretary-price-announces-hhs-strategy-for-fighting- Drugs/AnestheticAndAnalgesicDrugProducts
www.accessdata.fda.gov/drugsatfda_docs/label/ opioid-crisis/index.html. AdvisoryCommittee/UCM596314.pdf.
10 Ibid, page 9.
2011/022496s000lbl.pdf. 7 Available at: https://www.hhs.gov/about/news/
2 2011 FDA approval letter available at: https:// 2017/10/26/hhs-acting-secretary-declares-public- 11 2018 updated product label available at:
www.accessdata.fda.gov/drugsatfda_docs/nda/ health-emergency-address-national-opioid- https://www.accessdata.fda.gov/drugsatfda_docs/

2011/022496Orig1s000Approv.pdf. crisis.html. label/2018/022496s009lbledt.pdf.
specific drugs that function as a supply of the Act, the Secretary must consider We also evaluated drugs that function
over a 5-year time period to determine the extent to which revisions to such as surgical supplies over a 6-year time
whether this packaging policy reduced payments (such as the creation of period (CYs 2013 through 2018). During
the use of these drugs. If the packaging additional groups of covered OPD our evaluation, we did not observe
policy discouraged the use of drugs that services to separately classify those significant declines in the total number
function as a supply or impeded access procedures that utilize opioids and non- of units used in the hospital outpatient
to these products, we would expect to opioid alternatives for pain department for a majority of the drugs
see a significant decline in utilization of management) would reduce the included in our analysis. In fact, under
these drugs over time, although we note payment incentives for using opioids the OPPS, we observed the opposite
that a decline in utilization could also instead of non-opioid alternatives for effect for several drugs that function as
reflect other factors, such as the pain management. In conducting this surgical supplies, including Exparel®
availability of alternative products, or a review and considering any revisions, (HCPCS code C9290). This trend
combination thereof. the Secretary must focus on covered indicates appropriate packaged
The results of the evaluation of our OPD services (or groups of services) payments that adequately reflect the
packaging policies under the OPPS and assigned to C–APCs, APCs that include cost of the drug and are not prohibiting
the ASC payment system showed surgical services, or services determined beneficiary access.
decreased utilization for certain drugs by the Secretary that generally involve From CYs 2013 through 2018, we
that function as a supply in the ASC treatment for pain management. If the found that there was an overall increase
setting, in comparison to the hospital Secretary identifies revisions to in the OPPS Medicare utilization of
outpatient department setting. In light of payments pursuant to section Exparel® of approximately 491 percent
these results, as well as the 1833(t)(22)(A)(iii) of the Act, section (from 2.3 million units to 13.6 million
Commission’s recommendation to 1833(t)(22)(C) of the Act requires the units) during this 6-year time period.
examine payment policies for non- Secretary to, as determined appropriate, The total number of claims reporting the
opioid pain management drugs that begin making revisions for services use of Exparel® increased by 463
function as a supply, we stated that we furnished on or after January 1, 2020. percent (from 10,609 claims to 59,724
believe it was appropriate to pay Any revisions under this paragraph are claims) over this 6-year time period.
separately for evidence-based non- required to be treated as adjustments for This increase in utilization continued,
opioid pain management drugs that purposes of paragraph (9)(B), which even after the expiration of the 3-year
function as a supply in a surgical requires any adjustments to be made in period of pass-through payment status
procedure in the ASC setting to address a budget neutral manner. Pursuant to for this drug in 2014, resulting in a 109-
the decreased utilization of these drugs these requirements, in our evaluation of percent overall increase in the total
and to encourage use of these types of whether there are payment incentives number of units used between CYs 2015
drugs rather than prescription opioids. for using opioids instead of non-opioid and 2018, from 6.5 million units to 13.6
Therefore, in the CY 2019 OPPS/ASC alternatives, for the CY 2020 OPPS/ASC million units. The number of claims
final rule with comment period (83 FR proposed rule, we used currently reporting the use of Exparel® increased
58855 through 58860), we finalized the available data to analyze the payment by 112 percent during this time period,
proposed policy to unpackage and pay and utilization patterns associated with from 28,166 claims to 59,724 claims.
separately at ASP + 6 percent for the The results of our review and
specific non-opioid alternatives,
cost of non-opioid pain management evaluation of our claims data do not
including drugs that function as a
drugs that function as surgical supplies provide evidence to indicate that the
supply, nerve blocks, and
when they are furnished in the ASC OPPS packaging policy has had the
neuromodulation products, to
setting for CY 2019. We also stated that unintended consequence of
determine whether our packaging discouraging the use of non-opioid
we would continue to analyze the issue
policies have reduced the use of non- treatments for postsurgical pain
of access to non-opioid alternatives in
opioid alternatives. We focused on management in the hospital outpatient
the hospital outpatient department
covered OPD services for this review, department. Therefore, based on this
setting and in the ASC setting as we
including services assigned to C–APCs, data evaluation, we stated in the
implemented section 6082 of the
surgical APCs, and other pain proposed rule that we do not believe
Substance Use–Disorder Prevention that
management services. We believed that that changes are necessary under the
Promotes Opioid Recovery and
Treatment for Patients and Communities if the packaging policy discouraged the OPPS for the packaged drug policy for
(SUPPORT) Act (Pub. L. 115–271) use of these non-opioid alternatives or drugs that function as a surgical supply,
enacted on October 24, 2018 (83 FR impeded access to these products, we nerve blocks, surgical injections, and
58860 through 58861). would expect to see a decline in the neuromodulation products when used
utilization over time, although we note in a surgical procedure in the OPPS
(2) Evaluation and CY 2020 Proposal for that a decline in utilization could also setting at this time.
Payment for Non-Opioid Alternatives reflect other factors, such as the For Exparel®, we reviewed claims
Section 1833(t)(22)(A)(i) of the Act, as availability of alternative products or a data for development of the CY 2020
added by section 6082(a) of the combination thereof. OPPS/ASC proposed rule and, based on
SUPPORT Act, states that the Secretary We evaluated continuous peripheral these data and available literature, we
must review payments under the OPPS nerve blocks and neuromodulation concluded that there is no clear
for opioids and evidence-based non- alternatives to determine if the current evidence that the OPPS packaging
opioid alternatives for pain management packaging policy represented a barrier policy discourages the use of Exparel®
(including drugs and devices, nerve to access. For each product, we for either of the drug’s indications in the
blocks, surgical injections, and examined the most recently available hospital outpatient department setting
neuromodulation) with a goal of Medicare claims data. All of the because the use of Exparel® continues to
ensuring that there are not financial alternatives examined showed increase in this setting. Accordingly, we
incentives to use opioids instead of non- consistent or increasing utilization in stated in the proposed rule that we
opioid alternatives. As part of this recent years, with no products showing continue to believe it is appropriate to
review, under section 1833(t)(22)(A)(iii) decreases in utilization. package payment for the use of
Exparel®, as we do for other to, or reduce the need for, opioid Response: As we stated in the CY
postsurgical pain management drugs, prescriptions. 2019 OPPS/ASC final rule (83 FR
when it is furnished in a hospital After reviewing the data from 58856), we do not believe that there is
outpatient department. In addition, our stakeholders and Medicare claims data, sufficient evidence that non-opioid pain
updated review of claims data for the we did not find compelling evidence to management drugs should be paid
proposed rule showed a continued suggest that revisions to our OPPS separately in the hospital outpatient
decline in the utilization of Exparel® in payment policies for non-opioid pain setting at this time. The commenters did
the ASC setting, which we believed management alternatives are necessary not provide evidence that the OPPS
supports our proposal to continue for CY 2020. Additionally, MedPAC’s packaging policy for Exparel (or other
paying separately for Exparel® in the March 2019 Report to Congress supports non-opioid drugs) creates a barrier to
ASC setting. our conclusion; specifically, Chapter 16 use of Exparel in the hospital setting.
Therefore, for CY 2020, we proposed of MedPAC’s report, titled Mandated Further, while we received some public
to continue our policy to pay separately Report: Opioids and Alternatives in comments suggesting that, as a result of
at ASP+6 percent for the cost of non- Hospital Settings—Payments, using Exparel in the OPPS setting,
opioid pain management drugs that Incentives, and Medicare Data, providers may prescribe fewer opioids
function as surgical supplies in the concludes that there is no clear for Medicare beneficiaries, we do not
performance of surgical procedures indication that Medicare’s OPPS believe that the OPPS payment policy
when they are furnished in the ASC provides systematic payment incentives presents a barrier to use of Exparel or
setting and to continue to package that promote the use of opioid affects the likelihood that providers will
payment for non-opioid pain analgesics over non-opioid analgesics.12 prescribe fewer opioids in the HOPD
management drugs that function as However, we invited public comments setting. Several drugs are packaged
surgical supplies in the performance of on whether there were other non-opioid under the OPPS and payment for such
surgical procedures in the hospital pain management alternatives for which drugs is included in the payment for the
outpatient department setting for CY our payment policy should be revised to associated primary procedure. We were
2020. However, we invited public allow separate payment. We requested not persuaded by the information
comments on this proposal and asked public comments that provided supplied by commenters suggesting that
the public to provide peer-reviewed evidence-based support, such as some providers avoid use of non-opioid
evidence, if any, to describe existing published peer-reviewed literature, that alternatives (including Exparel) solely
evidence-based non-opioid pain we could use to determine whether because of the OPPS packaged payment
management therapies used in the these products help to deter or avoid policy. We observed increasing Exparel
outpatient and ASC setting. We also prescription opioid use and addiction as utilization in the HOPD setting with the
invited the public to provide detailed well as evidence that the current total units increasing from 9.0 million in
claims-based evidence to document how packaged payment for such non-opioid 2017 to 13.6 million in 2018, despite the
specific unfavorable utilization trends alternatives presents a barrier to access bundled payment in the OPPS setting.
are due to the financial incentives of the to care and therefore warrants revised, This upward trend has been consistent
payment systems rather than other including possibly separate, payment since 2015, as the data shows
factors. under the OPPS. We noted that approximately 6.5 million total units in
Multiple stakeholders, largely evidence that current payment policy 2015 and 8.1 million total units in 2016.
manufacturers of devices and drugs, provides a payment incentive for using Therefore, we do not believe that the
requested separate payments for various opioids instead of non-opioid current OPPS payment methodology for
non-opioid pain management alternatives should align with available Exparel and other non-opioid pain
treatments, such as continuous nerve Medicare claims data.
blocks (including a disposable management drugs presents a
We provide a summary of the
elastomeric pump that delivers non- widespread barrier to their use.
comments received and our responses to
opioid local anesthetic to a surgical site those comments below. In addition, higher use in the hospital
or nerve), cooled thermal Comment: Multiple commenters, outpatient setting not only supports the
radiofrequency ablation, and local including hospital associations, medical notion that the packaged payment for
anesthetics designed to reduce specialty societies, and drug Exparel is not causing an access to care
postoperative pain for cataract surgery manufacturers, requested that we pay issue, but also that the payment rate for
and other procedures. These separately for Exparel and other drugs primary procedures in the HOPD using
stakeholders suggested various that function as surgical supply in the Exparel adequately reflects the cost of
mechanisms through which separate hospital outpatient setting. Some of the drug. That is, because Exparel is
payment or a higher-paying APC these commenters noted that Exparel is commonly used and billed under the
assignment for the primary service more frequently used in this setting and OPPS, the APC rates for the primary
could be made. The stakeholders offered the use of non-opioid pain management procedures reflect such utilization.
surveys, reports, studies, and anecdotal treatments should also be encouraged in Therefore, the higher utilization in the
evidence of varying degrees to support the hospital outpatient department. The OPPS setting should mitigate the need
why the devices, drugs, or services offer manufacturer of Exparel, Pacira for separate payment. We remind
an alternative to or a reduction of the Pharmaceuticals, presented a 5-year readers that the OPPS is a prospective
need for opioid prescriptions. The OPPS claims data analysis of hospital payment system, not a cost-based
majority of these stakeholder offerings trends in Exparel use and a 200 hospital system and, by design, is based on a
lacked adequate sample size, contained survey on purchasing decisions for non- system of averages under which
possible conflicts of interest such as opioid alternatives, concluding that payment for certain cases may exceed
studies conducted by employees of Medicare’s packaging policy has led to the costs incurred, while for others, it
device manufacturers, have not been hospitals reducing or stopping Exparel may not. As stated earlier in this
fully published in peer-reviewed use. section, the OPPS packages payments
literature, or have only provided for multiple interrelated items and
anecdotal evidence as to how the drug 12 Available at: http://www.medpac.gov/- services into a single payment to create
or device could serve as an alternative documents-/reports. incentives for hospitals to furnish
services most efficiently and to manage goals in both settings. While Commenters claim that Prialt is only
their resources with maximum unpackaging and paying separately for paid at invoice cost, which they believe
flexibility. Our packaging policies drugs that function as surgical supplies discourages provider use.
support our strategic goal of using larger is a departure from our overall Response: We thank commenters for
payment bundles in the OPPS to packaging policy for drugs, we believe their feedback and for their support of
maximize hospitals’ incentives to that the proposed change will continue the continued assignment of status
provide care in the most efficient to incentivize the use of non-opioid indicator ‘‘K’’ to HCPCS J2278. Prialt is
manner. We continue to invite pain management drugs and is paid at its average sales price plus 6
stakeholders to share evidence, such as responsive to the Commission’s percent according to the ASP
published peer-reviewed literature, on recommendation to examine payment methodology under the OPPS. We note
these non-opioid alternatives. We also policies for non-opioid pain that under section 1833(t)(8) of the Act,
intend to continue to analyze the management drugs that function as a the payment is subject to applicable
evidence and monitor utilization of non- supply, with the overall goal of deductible and coinsurance, and we are
opioid alternatives in the OPD and ASC combating the current opioid addiction unaware of statutory authority to alter
settings for potential future rulemaking. crisis. As previously noted, a discussion beneficiary coinsurance for payments
We also stated in the CY 2020 OPPS/ of the CY 2020 proposal for payment of made under the OPPS. We note that
ASC proposed rule that, although we non-opioid pain management drugs in because the dollar value of beneficiary
found increases in utilization for the ASC setting was presented in further coinsurance is directly proportionate to
Exparel when it is paid under the OPPS, detail in section XIII.D.3 of the CY 2020 the payment rate (which is ASP + 6
we did notice a continued decline in OPPS/ASC proposed rule, and we refer percent for HCPCS code J2278), a lower
Exparel utilization in the ASC setting. readers to section XIII.D.3 of this CY sales price for the drug (which would
While several variables may contribute 2020 OPPS/ASC final rule with lead to a lower Medicare payment rate
to this difference in utilization and comment period for further discussion under current policy) would be
claims reporting between the hospital of the final policy for CY 2020. As stated necessary for beneficiaries to have a
outpatient department and the ASC above, we also requested public lower coinsurance amount.
setting, one potential explanation is comments in the CY 2020 OPPS/ASC Comment: Many commenters
that, in comparison to hospital proposed rule that provide peer- requested that the drug Omidria (HCPCS
outpatient departments, ASCs tend to reviewed evidence, such as published code C9447, injection, phenylephrine
provide specialized care and a more peer-reviewed literature, that we could ketorolac) be excluded from the
limited range of services. Also, ASCs are use to determine whether these packaging policy once its pass-through
paid, in aggregate, approximately 55 products help to deter or avoid status expires on September 30, 2020.
percent of the OPPS rate. Therefore, Omidria is indicated for maintaining
prescription opioid use and addiction as
fluctuations in payment rates for pupil size by preventing intraoperative
well as evidence that the current
specific services may impact these miosis and reducing postoperative
packaged payment for such non-opioid
providers more acutely than hospital ocular pain in cataract or intraocular
alternatives presents a barrier to access
outpatient departments, and as a result, surgeries. The commenters stated that
to care and therefore warrants revised,
ASCs may be less likely to choose to the available data and multiple peer-
including possibly separate, payment
furnish non-opioid postsurgical pain reviewed articles on Omidria meet the
under the OPPS. We also stated that
management treatments, which are section 6082 criteria for packaging
evidence that current payment policy
typically more expensive than opioids. exclusion. Commenters asserted that the
provides a payment incentive for using
Another possible contributing factor is use of Omidria decreases patients’ need
opioids instead of non-opioid for fentanyl during surgeries and
that ASCs do not typically report
alternatives should align with available another commenter stated that Omidria
packaged items and services and,
Medicare claims data. reduces opioid use after cataract
accordingly, our analysis may be
undercounting the number of Exparel Comment: Several commenters surgeries. In addition, commenters
units utilized in the ASC setting. supported the assignment of status asserted that the OPPS and ASC
Therefore, we are finalizing our indicator ‘‘K’’ (Nonpass-Through Drugs payment system do not address the cost
proposal to continue to unpackage and and Nonimplantable Biologicals, of packaged products used by small
pay separately for the cost of non-opioid Including Therapeutic patient populations. Therefore, the
pain management drugs that function as Radiopharmaceuticals) and continuing OPPS and ASC payment structures for
surgical supplies when they are to pay separately for the drug Prialt packaged supplies creates an access
furnished in the ASC setting without (HCPCS J2278, injection, ziconitide), a barrier and patients are forced to use
modification. This policy and related non-narcotic pain reliever administered inferior products that have increased
comments are addressed in section via intrathecal injection. Commenters complication risk and require the
XIII.D.3. of this final rule with comment provided data indicating that Prialt continued use of opioids to manage
period. potentially could lower opioid use, pain. One commenter referenced the
As we stated previously in the CY including opioids such as morphine. In results of a study that showed that
2018 OPPS/ASC final rule with addition to continued separate payment, Omidria reduces the need for opioids
comment period (82 FR 59250), our several commenters recommended CMS during cataract surgery by nearly 80
packaging policies are designed to reduce or eliminate the coinsurance for percent while decreasing pain scores by
support our strategic goal of using larger the drug in order to increase beneficiary more than 50 percent.
payment bundles in the OPPS to access. Commenters stated that due to Response: We thank commenters for
maximize hospitals’ incentives to the drug’s significant cost, the 20 their feedback on Omidria. Omidria
provide clinically appropriate care in percent coinsurance would put the drug received pass-through status for a 3-year
the most efficient manner. The out of reach for beneficiaries. period from 2015 to 2017. After
packaging policies established under the Additionally, commenters stated that expiration of its pass-through status, it
OPPS also typically apply when there is not enough financial incentive was packaged per OPPS policy.
services are provided in the ASC setting, for providers to use Prialt in their Subsequently, Omidria’s pass-through
and the policies have the same strategic patients compared to lower cost opioids. status was reinstated in October 2018
through September 30, 2020 as required (NCT03653520) that supports sublingual approximately $30 each year during that
by section 1833(t)(6)(G) of the Act, as MKO Melt for use during cataract 4-year period. We acknowledge that use
added by section 1301(a)(1)(C) of the surgeries to replace opioids. The study of these items may help in the reduction
Consolidated Appropriations Act 2018 looked at 611 patients that were divided of opioid use. However, we note that
(Pub. L. 115–141). While our analysis into three arms: (1) MKO melt arm, (2) packaged payment of such an item does
supports the commenter’s assertion that diazepam/tramadol/ondansetron arm, not prevent the use of these items, as we
there was a decrease in the utilization (3) diazepam only arm. The study found with the overall increased
of Omidria in 2018 following its pass- concluded that the MKO melt arm had utilization of this product. We do not
through expiration, we note that there the lowest incidence for supplemental believe that the current utilization
could be many reasons that utilization injectable anesthesia to control pain. trends for HCPCS code A4306 suggest
declines after the pass-through period Response: We thank the commenter that the packaged payment is preventing
ends that are unrelated to the lack of for the comment. Based on the use and remind readers that payment for
separate payment, including the information provided, we are not able to packaged items is included in the
availability of other alternatives on the validate that MKO Melt reduces the use payment for the primary service. We
market (many of which had been used of opioids. We note that ketamine, one share the commenter’s concern about
for several years before Omidria came of the components of MKO melt, the need to reduce opioid use and will
on the market and are sold for a lower exhibits some addictive properties. take the commenter’s suggestion
price), or physician preference among Moreover, we did not identify any regarding the need for separate payment
others. compelling evidence that MKO Melt is for HCPCS code A4306 into
Further, our clinical advisors’ review effective for patients with a prior opioid consideration for future rulemaking.
of the clinical evidence submitted addiction nor did we receive any data Comment: Multiple commenters
concluded that the study the commenter demonstrating that the current OPPS identified other non-opioid pain
submitted was not sufficiently packaging policy incentivized providers management alternatives that they
compelling or authoritative to overcome to use opioids over MKO Melt. In believe decrease the dose, duration,
contrary evidence. Moreover, the results accordance with our review under and/or number of opioid prescriptions
of a CMS study of cataract procedures section 1833(t)(22)(A)(i) of the Act, as beneficiaries receive during and
performed on Medicare beneficiaries in well as the lack of HCPCS code for the following an outpatient visit or
the OPPS between January 2015 and drug, and FDA approval, we were not procedure (especially for beneficiaries at
July 2019 comparing procedures able to establish any compelling high-risk for opioid addiction) and that
performed with Omidria to procedures evidence that MKO should be excluded may warrant separate payment for CY
performed without Omidria did not from packaged payment. 2020. Commenters representing various
demonstrate a significant decrease in Comment: Several commenters, stakeholders requested separate
fentanyl utilization during the cataract including individual physicians, payments for various non-opioid pain
surgeries in the OPPS when Omidria medical associations, and device management treatments, such as
was used. Our results also did not manufacturers, supported separate continuous nerve blocks,
suggest any decrease in opioid payment for continuous peripheral neuromodulation radiofrequency
utilization post-surgery for procedures nerve blocks as the commenters ablation, implants for lumbar stenosis,
involving Omidria. At this time, we do believed they significantly reduce enhanced recovery after surgery, IV
not have compelling evidence to opioid use. One commenter suggested acetaminophen, IV ibuprofen, Polar ice
exclude Omidria from packaging after that CMS provide separate payment for devices for postoperative pain relief,
its current pass-through expires on HCPCS code A4306 (Disposable drug THC oil, acupuncture, and dry needling
September 30, 2020. We will continue delivery system, flow rate of less than procedures.
to analyze the evidence and monitor 50 ml per hour) in the hospital For neuromodulation, several
utilization of this drug. outpatient department setting and the commenters noted that spinal cord
Comment: One commenter requested ASC setting because packaging stimulators (SCS) may lead to a
that MKO Melt, a non-FDA-approved, represents a cost barrier for providers. reduction in the use of opioids for
compounded drug comprised of The commenter contended that chronic pain patients. One manufacturer
midazolam/ketamine/ondansetron be continuous nerve block procedures have commented that SCS provides the
excluded from the packaging policy been shown in high quality clinical opportunity to potentially stabilize or
under section 1833(t)(22)(A)(iii) of the studies to reduce the use of opioids, decrease opioid usage and that
Act. The commenter contended that attaching studies for review. The neuromodulation retains its efficacy
MKO Melt are drugs functioning as a commenter stated that separate payment over multiple years. Regarding barriers
surgical supply in the ASC setting. The for A4306 will remove the financial to access, the commenter noted that
commenter provided a reference to a disincentive for HOPDs and ASCs to use Medicare beneficiaries often do not have
study titled, ‘‘Anesthesia for opioid these items, and would encourage access to SCS until after they have
addict: Challenges for perioperative continuous nerve blocks as a non-opioid exhausted other treatments, which often
physician’’ by Goyal et al., on the need alternative for post-surgical pain includes opioids. The commenter
for pain management in the opioid- management. presented evidence from observational
dependent patient. The commenter also Response: We appreciate the studies that use of SCS earlier in a
referenced a review article, commenters’ suggestion. We examined patient’s treatment could help reduce
‘‘Perioperative Management of Acute the data for A4306 and noted an overall opioid use while controlling pain,
Pain in the Opioid-dependent Patient,’’ trend of increasing utilization from CY suggesting CMS look for ways to
by Mitra et al., on the special needs of 2014 through CY 2017. There was a incorporate SCS earlier in the treatment
opioid-dependent patients in surgeries slight decrease in utilization in CY continuum.
and the potential opioid relapse in those 2018. However, we note that this slight Another commenter asserted that the
patients who are recovering from opioid decline may be an outlier, given the four standard endpoints, such as a greater
use disorder. Additionally, the year trend of consistently increasing than 50 percent reduction in pain, that
commenter referenced a clinical trial utilization. Additionally, the geometric are used to determine if a
registered in clinicaltrials.gov mean cost for HCPCS code A4306 was neuromodulation-based non-opioid pain
alternative therapy is effective are well- opioid pain management alternatives have been previously addressed
established and validated in all types of described above to warrant separate throughout this section. CMS recognizes
clinical trials and that CMS should payment under the OPPS or ASC that medical exposure to opioids entails
establish a general, national coverage payment systems for CY 2020. We plan inherent risks, which may include
determination for neuromodulation- to take these comments and suggestions delayed recovery, diversion, misuse,
based non-opioid pain therapy based on into consideration for future accidental overdose, development or re-
these endpoints, rather than taking the rulemaking. We agree that providing emergence of addiction, and neonatal
time to create and process specific incentives to avoid and/or reduce abstinence syndrome. However, there
national coverage determinations or opioid prescriptions may be one of are challenges in developing a
local coverage determinations. The several strategies for addressing the methodology to identify disincentives to
commenter suggested that this would be opioid epidemic. To the extent that the use opioid alternatives. In the context of
a much faster and streamlined process items and services mentioned by the the opioid crisis, and given the central
for enhancing Medicare beneficiary commenters are effective alternatives to role the federal government plays in
access to neuromodulation-based pain opioid prescriptions, we encourage addressing it, these issues are of
management therapies. providers to use them when medically particular concern to CMS. Because of
One of the manufacturers of a high- necessary. We note that some of the this, CMS intends to work with an
frequency SCS device stated that items and services mentioned by interagency task force to review
additional payment was warranted for commenters are not covered by available data and to develop criteria for
non-opioid pain management treatments Medicare, and we do not intend to revisions to payment for opioid
because they provide an alternative establish payment for noncovered items alternatives that are effective for pain
treatment option to opioids for patients and services at this time. We look relief or in reducing opioid use.
with chronic, leg, or back pain. The forward to working with stakeholders as After consideration of the public
commenter provided supporting studies we further consider suggested comments we received, we are
that claimed that patients treated with refinements to the OPPS and the ASC finalizing the proposed policy, without
their high-frequency SCS device payment system that will encourage use modification, to unpackage and pay
reported a statistically significant of medically necessary items and separately at ASP+6 percent for the cost
average decrease in opioid use services that have demonstrated efficacy of non-opioid pain management drugs
compared to the control group. This in decreasing opioid prescriptions and/ that function as surgical supplies when
commenter also submitted data that or opioid abuse or misuse during or they are furnished in the ASC setting for
showed a decline in the mean daily after an outpatient visit or procedure. CY 2020. Under this policy, the only
dosage of opioid medication taken and After reviewing the non-opioid pain FDA-approved drug that meets this
that fewer patients were relying on management alternatives suggested by criteria is Exparel.
opioids at all to manage their pain when the commenters as well as the studies We will continue to analyze the issue
they used the manufacturer’s device. and other data provided to support the of access to non-opioid alternatives in
Other commenters wrote regarding request for separate payment, we have the OPPS and the ASC settings for any
their personal experiences with not determined that separate payment is subsequent reviews we conduct under
radiofrequency ablation for sacral iliac warranted at this time for any of the section 1833(t)(22)(A)(ii). We are
joints and knees. One commenter non-opioid pain management continuing to examine whether there are
referenced several studies, one of which alternatives discussed above. other non-opioid pain management
found a decrease in analgesic Comment: Several commenters alternatives for which our payment
medications associated with addressed payment barriers that may policy should be revised to allow
radiofrequency ablation; however, it did inhibit access to non-opioid pain separate payment. We will be reviewing
not provide evidence regarding a management treatments discussed evidence-based support, such as
decrease in opioid usage. throughout this section. Several published peer-reviewed literature, that
One national hospital association commenters disagreed with CMS’s we could use to determine whether
commenter recommended that while assessment that current payment these products help to deter or avoid
‘‘certainly not a solution to the opioid policies do not represent barriers to prescription opioid use and addiction as
epidemic, unpackaging appropriate non- access for certain non-opioid pain well as evidence that the current
opioid therapies, like Exparel, is a low- management alternatives. Commenters packaged payment for such non-opioid
cost tactic that could change long- encouraged CMS to provide timely alternatives presents a barrier to access
standing practice patterns without major insurance coverage for evidence- to care and therefore warrants revised,
negative consequences.’’ This same informed interventional procedures including possibly separate, payment
commenter suggested that Medicare early in the course of treatment when under the OPPS. This policy is also
consider separate payment for IV clinically appropriate. Several other discussed in section XII.D.3 of this final
acetaminophen, IV ibuprofen, and Polar commenters encouraged CMS to more rule with comment period.
ice devices for postoperative pain relief broadly evaluate all of its packaging
after knee procedures. The commenter policies to help ensure patient access to 4. Calculation of OPPS Scaled Payment
also noted that therapeutic massage, appropriate therapies and to evaluate Weights
topically applied THC oil, acupuncture, how packaging affects the utilization of We established a policy in the CY
and dry needling procedures are very a medicine. 2013 OPPS/ASC final rule with
effective therapies for relief of both Response: We appreciate the various, comment period (77 FR 68283) of using
postoperative pain and long-term and insightful comments we received from geometric mean-based APC costs to
chronic pain. Several other commenters stakeholders regarding barriers that may calculate relative payment weights
expressed support for separate payment inhibit access to non-opioid alternatives under the OPPS. In the CY 2019 OPPS/
for IV acetaminophen. for pain treatment and management in ASC final rule with comment period (83
Response: We appreciate the detailed order to more effectively address the FR 58860 through 58861), we applied
responses from commenters on this opioid epidemic. We will take these this policy and calculated the relative
topic. At this time, we have not found comments into consideration for future payment weights for each APC for CY
compelling evidence for other non- rulemaking. Many of these comments 2019 that were shown in Addenda A
and B to that final rule with comment weights for CY 2020. Therefore, we are calculate an estimated aggregate weight
period (which were made available via finalizing our proposal and assigning for the year. For CY 2020, we proposed
the internet on the CMS website) using APC 5012 the relative payment weight to apply the same process using the
the APC costs discussed in sections of 1.00, and using the relative payment estimated CY 2020 unscaled relative
II.A.1. and II.A.2. of that final rule with weight for APC 5012 to derive the payment weights rather than scaled
comment period. For CY 2020, as we unscaled relative payment weight for relative payment weights. We proposed
did for CY 2019, we proposed to each APC for CY 2020. to calculate the weight scalar by
continue to apply the policy established We note that in the CY 2019 OPPS/ dividing the CY 2019 estimated
in CY 2013 and calculate relative ASC final rule with comment period (83 aggregate weight by the unscaled CY
payment weights for each APC for CY FR 59004 through 59015), we discuss 2020 estimated aggregate weight.
2020 using geometric mean-based APC our policy, implemented on January 1, For a detailed discussion of the
costs. 2019, to control for unnecessary weight scalar calculation, we refer
For CY 2012 and CY 2013, outpatient increases in the volume of covered readers to the OPPS claims accounting
clinic visits were assigned to one of five outpatient department services by document available on the CMS website
levels of clinic visit APCs, with APC paying for clinic visits furnished at at: https://www.cms.gov/Medicare/
0606 representing a mid-level clinic excepted off-campus provider-based Medicare-Fee-for-Service-Payment/
visit. In the CY 2014 OPPS/ASC final department (PBD) at a reduced rate, and HospitalOutpatientPPS/index.html.
rule with comment period (78 FR 75036 we are continuing the policy with the Click on the CY 2020 OPPS final rule
through 75043), we finalized a policy second year of the two-year transition in link and open the claims accounting
that created alphanumeric HCPCS code CY 2020. While the volume associated document link at the bottom of the page.
G0463 (Hospital outpatient clinic visit with these visits is included in the We proposed to compare the
for assessment and management of a impact model, and thus used in estimated unscaled relative payment
patient), representing any and all clinic calculating the weight scalar, the policy weights in CY 2020 to the estimated
visits under the OPPS. HCPCS code has a negligible effect on the scalar. total relative payment weights in CY
G0463 was assigned to APC 0634 Specifically, under this policy, there is 2019 using CY 2018 claims data,
(Hospital Clinic Visits). We also no change to the relativity of the OPPS holding all other components of the
finalized a policy to use CY 2012 claims payment weights because the payment system constant to isolate
data to develop the CY 2014 OPPS adjustment is made at the payment level changes in total weight. Based on this
payment rates for HCPCS code G0463 rather than in the cost modeling. comparison, we proposed to adjust the
based on the total geometric mean cost Further, under this policy, the savings calculated CY 2020 unscaled relative
of the levels one through five CPT E/M that will result from the change in payment weights for purposes of budget
codes for clinic visits previously payments for these clinic visits will not neutrality. We proposed to adjust the
recognized under the OPPS (CPT codes be budget neutral. Therefore, the impact estimated CY 2020 unscaled relative
99201 through 99205 and 99211 through of this policy will generally not be payment weights by multiplying them
99215). In addition, we finalized a reflected in the budget neutrality by a proposed weight scalar of 1.4401 to
policy to no longer recognize a adjustments, whether the adjustment is ensure that the proposed CY 2020
distinction between new and to the OPPS relative weights or to the relative payment weights are scaled to
established patient clinic visits. OPPS conversion factor. We refer be budget neutral. The proposed CY
For CY 2016, we deleted APC 0634 readers to section X.C. of this CY 2020 2020 relative payment weights listed in
and reassigned the outpatient clinic OPPS/ASC final rule with comment Addenda A and B to the proposed rule
visit HCPCS code G0463 to APC 5012 period for further discussion of this (which are available via the internet on
(Level 2 Examinations and Related final policy. the CMS website) were scaled and
Services) (80 FR 70372). For CY 2020, Section 1833(t)(9)(B) of the Act incorporated the recalibration
as we did for CY 2019, we proposed to requires that APC reclassification and adjustments discussed in sections II.A.1.
continue to standardize all of the recalibration changes, wage index and II.A.2. of the proposed rule.
relative payment weights to APC 5012. changes, and other adjustments be made Section 1833(t)(14) of the Act
We believe that standardizing relative in a budget neutral manner. Budget provides the payment rates for certain
payment weights to the geometric mean neutrality ensures that the estimated SCODs. Section 1833(t)(14)(H) of the
of the APC to which HCPCS code G0463 aggregate weight under the OPPS for CY Act provides that additional
is assigned maintains consistency in 2020 is neither greater than nor less expenditures resulting from this
calculating unscaled weights that than the estimated aggregate weight that paragraph shall not be taken into
represent the cost of some of the most would have been calculated without the account in establishing the conversion
frequently provided OPPS services. For changes. To comply with this factor, weighting, and other adjustment
CY 2020, as we did for CY 2019, we requirement concerning the APC factors for 2004 and 2005 under
proposed to assign APC 5012 a relative changes, we proposed to compare the paragraph (9), but shall be taken into
payment weight of 1.00 and to divide estimated aggregate weight using the CY account for subsequent years. Therefore,
the geometric mean cost of each APC by 2019 scaled relative payment weights to the cost of those SCODs (as discussed in
the geometric mean cost for APC 5012 the estimated aggregate weight using the section V.B.2. of this final rule with
to derive the unscaled relative payment proposed CY 2020 unscaled relative comment period) is included in the
weight for each APC. The choice of the payment weights. budget neutrality calculations for the CY
APC on which to standardize the For CY 2019, we multiplied the CY 2020 OPPS.
relative payment weights does not affect 2019 scaled APC relative payment We did not receive any public
payments made under the OPPS weight applicable to a service paid comments on the proposed weight
because we scale the weights for budget under the OPPS by the volume of that scalar calculation. Therefore, we are
neutrality. service from CY 2018 claims to calculate finalizing our proposal to use the
We did not receive any public the total relative payment weight for calculation process described in the
comments on our proposal to continue each service. We then added together proposed rule, without modification, for
to use the geometric mean cost of APC the total relative payment weight for CY 2020. Using updated final rule
5012 to standardize relative payment each of these services in order to claims data, we are updating the
estimated CY 2020 unscaled relative in the FY 2016 IPPS/LTCH PPS final made to the wage index and rural
payment weights by multiplying them rule (80 FR 49509). According to the FY adjustment were made on a budget
by a weight scalar of 1.4349 to ensure 2020 IPPS/LTCH PPS proposed rule (84 neutral basis. We proposed to calculate
that the final CY 2020 relative payment FR 19402), the proposed MFP an overall budget neutrality factor of
weights are scaled to be budget neutral. adjustment for FY 2020 was 0.5 0.9993 for wage index changes. This
The final CY 2020 relative payments percentage point. adjustment was comprised of a 1.0005
weights listed in Addenda A and B to For CY 2020, we proposed that the proposed budget neutrality adjustment,
this final rule with comment period MFP adjustment for the CY 2020 OPPS using our standard calculation, of
(which are available via the internet on is 0.5 percentage point (84 FR 39428). comparing proposed total estimated
the CMS website) were scaled and We proposed that if more recent data payments from our simulation model
incorporate the recalibration become subsequently available after the using the proposed FY 2020 IPPS wage
adjustments discussed in sections II.A.1. publication of the proposed rule (for indexes to those payments using the FY
and II.A.2. of this final rule with example, a more recent estimate of the 2019 IPPS wage indexes, as adopted on
comment period. market basket increase and the MFP a calendar year basis for the OPPS as
adjustment), we would use such well as a 0.9988 proposed budget
B. Conversion Factor Update updated data, if appropriate, to neutrality adjustment for the proposed
Section 1833(t)(3)(C)(ii) of the Act determine the CY 2020 market basket CY 2020 5 percent cap on wage index
requires the Secretary to update the update and the MFP adjustment, which decreases to ensure that this transition
conversion factor used to determine the are components in calculating the OPD wage index is implemented in a budget
payment rates under the OPPS on an fee schedule increase factor under neutral manner, consistent with the
annual basis by applying the OPD fee sections 1833(t)(3)(C)(iv) and proposed FY 2020 IPPS wage index
schedule increase factor. For purposes 1833(t)(3)(F) of the Act, in this CY 2020 policy (84 FR 19398). We stated in the
of section 1833(t)(3)(C)(iv) of the Act, OPPS/ASC final rule with comment proposed rule that we believed it was
subject to sections 1833(t)(17) and period. appropriate to ensure that this proposed
1833(t)(3)(F) of the Act, the OPD fee We note that section 1833(t)(3)(F) of wage index transition policy (that is, the
schedule increase factor is equal to the the Act provides that application of this proposed CY 2020 5 percent cap on
hospital inpatient market basket subparagraph may result in the OPD fee wage index decreases) did not increase
percentage increase applicable to schedule increase factor under section estimated aggregate payments under the
hospital discharges under section 1833(t)(3)(C)(iv) of the Act being less OPPS beyond the payments that would
1886(b)(3)(B)(iii) of the Act. In the FY than 0.0 percent for a year, and may be made without this transition policy.
2020 IPPS/LTCH PPS proposed rule (84 result in OPPS payment rates being less We proposed to calculate this budget
FR 19401), consistent with current law, than rates for the preceding year. As neutrality adjustment by comparing
based on IHS Global, Inc.’s fourth described in further detail below, we
total estimated OPPS payments using
quarter 2018 forecast of the FY 2020 proposed for CY 2020 an OPD fee
the FY 2020 IPPS wage index, adopted
market basket increase, the proposed FY schedule increase factor of 2.7 percent
on a calendar year basis for the OPPS,
2020 IPPS market basket update was 3.2 for the CY 2020 OPPS (which was 3.2
where a 5 percent cap on wage index
percent. However, sections 1833(t)(3)(F) percent, the final estimate of the
decreases is not applied to total
and 1833(t)(3)(G)(v) of the Act, as added hospital inpatient market basket
estimated OPPS payments where the 5
by section 3401(i) of the Patient percentage increase, less the final 0.5
Protection and Affordable Care Act of percent cap on wage index decreases is
percentage point MFP adjustment).
2010 (Pub. L. 111–148) and as amended We proposed that hospitals that fail to applied. We stated in the proposed rule
by section 10319(g) of that law and meet the Hospital OQR Program that these two proposed wage index
further amended by section 1105(e) of reporting requirements would be subject budget neutrality adjustments would
the Health Care and Education to an additional reduction of 2.0 maintain budget neutrality for the
Reconciliation Act of 2010 (Pub. L. 111– percentage points from the OPD fee proposed CY 2020 OPPS wage index
152), provide adjustments to the OPD schedule increase factor adjustment to (which, as we discussed in section II.C
fee schedule increase factor for CY 2020. the conversion factor that would be of the proposed rule, would use the FY
Specifically, section 1833(t)(3)(F)(i) of used to calculate the OPPS payment 2020 IPPS post-reclassified wage index
the Act requires that, for 2012 and rates for their services, as required by and any adjustments, including without
subsequent years, the OPD fee schedule section 1833(t)(17) of the Act. For limitation any adjustments finalized
increase factor under subparagraph further discussion of the Hospital OQR under the IPPS to address wage index
(C)(iv) be reduced by the productivity Program, we refer readers to section disparities).
adjustment described in section XIV. of this final rule with comment We did not receive any public
1886(b)(3)(B)(xi)(II) of the Act. Section period. comments on our proposed
1886(b)(3)(B)(xi)(II) of the Act defines In the CY 2020 OPPS/ASC proposed methodology for calculating the wage
the productivity adjustment as equal to rule, we proposed to amend 42 CFR index budget neutrality adjustments
the 10-year moving average of changes 419.32(b)(1)(iv)(B) by adding a new discussed earlier in this section.
in annual economy-wide, private paragraph (11) to reflect the requirement Therefore, for the reasons discussed
nonfarm business multifactor in section 1833(t)(3)(F)(i) of the Act that, above and in the CY 2020 OPPS/ASC
productivity (MFP) (as projected by the for CY 2020, we reduce the OPD fee proposed rule (84 FR 39428 through
Secretary for the 10-year period ending schedule increase factor by the MFP 39429), we are finalizing our
with the applicable fiscal year, year, adjustment as determined by CMS. methodology for calculating the wage
cost reporting period, or other annual To set the OPPS conversion factor for index budget neutrality adjustments as
period) (the ‘‘MFP adjustment’’). In the CY 2020, we proposed to increase the proposed, without modification. For CY
FY 2012 IPPS/LTCH PPS final rule (76 CY 2019 conversion factor of $79.490 by 2020, we are finalizing an overall budget
FR 51689 through 51692), we finalized 2.7 percent. In accordance with section neutrality factor of 0.9981 for wage
our methodology for calculating and 1833(t)(9)(B) of the Act, we proposed index changes. This adjustment is
applying the MFP adjustment, and then further to adjust the conversion factor comprised of a 0.9990 budget neutrality
revised this methodology, as discussed for CY 2020 to ensure that any revisions adjustment, using our standard
calculation of comparing total estimated Therefore, the proposed conversion OPPS spending for the difference in
payments from our simulation model factor would be adjusted by the pass-through spending that resulted in a
using the final FY 2020 IPPS wage difference between the 0.14 percent proposed conversion factor for CY 2020
indexes to those payments using the FY estimate of pass-through spending for of $81.398. We referred readers to
2019 IPPS wage indexes, as adopted on CY 2019 and the 0.34 percent estimate section XXVI.B. of the proposed rule for
a calendar year basis for the OPPS as of proposed pass-through spending for a discussion of the estimated effect on
well as a 0.9991 budget neutrality CY 2020, resulting in a proposed the conversion factor of a policy to pay
adjustment for the CY 2020 5 percent decrease for CY 2020 of 0.20 percent. for 340B-acquired drugs at ASP + 3
cap on wage index decreases to ensure Proposed estimated payments for percent, which is a policy on which we
that this transition wage index is outliers would remain at 1.0 percent of solicited comments for potential future
implemented in a budget neutral total OPPS payments for CY 2020. We rulemaking in the event of an adverse
manner. We note that the final wage estimated for the proposed rule that decision on appeal in the ongoing
index budget neutrality adjustment outlier payments would be 1.03 percent litigation involving our payment policy
figures set forth above differ from the of total OPPS payments in CY 2019; the for 340B-acquired drugs.
figures set forth in the proposed rule 1.00 percent for proposed outlier Comment: One commenter, a state
due to updated data for the final rule. payments in CY 2020 would constitute hospital association, asserts its member
For the CY 2020 OPPS, we are a 0.03 percent increase in payment in hospitals receive payments from CMS
maintaining the current rural CY 2020 relative to CY 2019. that are substantially lower than the
adjustment policy, as discussed in For the CY 2020 OPPS/ASC proposed costs their members incur to provide
section II.E. of the proposed rule. rule, we also proposed that hospitals services. The commenter believes
Therefore, the proposed budget that fail to meet the reporting underpayments occur because the CMS
neutrality factor for the rural adjustment requirements of the Hospital OQR hospital market basket estimate of
is 1.0000. Program would continue to be subject to inflation of 2.7 percent substantially
For the CY 2020 OPPS/ASC proposed a further reduction of 2.0 percentage underestimates overall health care
rule, we proposed to continue points to the OPD fee schedule increase inflation which the commenter claims
previously established policies for factor. For hospitals that fail to meet the to be between 5.5 percent and 7 percent.
implementing the cancer hospital requirements of the Hospital OQR The commenter also states that hospital
payment adjustment described in Program, we proposed to make all other payments from CMS are reduced
section 1833(t)(18) of the Act, as adjustments discussed above, but use a because of payment sequestration and
discussed in section II.F. of the reduced OPD fee schedule update factor the policy to reduce payment rates for
proposed rule and this final rule with of 0.7 percent (that is, the proposed OPD clinic visits at off-campus hospital
comment period. We proposed to fee schedule increase factor of 2.7 outpatient departments to 40 percent of
calculate a CY 2020 budget neutrality percent further reduced by 2.0 the standard OPPS payment rate. The
adjustment factor for the cancer hospital percentage points). This would result in commenter suggests that CMS should
payment adjustment by comparing a proposed reduced conversion factor help hospitals in all states regain this
estimated total CY 2020 payments under for CY 2020 of $79.770 for hospitals that lost revenue by implementing a much
section 1833(t) of the Act, including the fail to meet the Hospital OQR Program larger annual increase in the market
proposed CY 2020 cancer hospital requirements (a difference of ¥1.628 in basket amount. The commenter
payment adjustment, to estimated CY the conversion factor relative to advocates a 4.7 percent market basket
2020 total payments using the CY 2019 hospitals that met the requirements). adjustment in CY 2020, and even larger
final cancer hospital payment In summary, for CY 2020, we percentage increases in following years.
adjustment, as required under section proposed to amend § 419.32 by adding Response: The percentage change in
1833(t)(18)(B) of the Act. The proposed a new paragraph (b)(1)(iv)(B)(11) to the hospital market basket reflects the
CY 2020 estimated payments applying reflect the reductions to the OPD fee average change in the price of goods and
the proposed CY 2020 cancer hospital schedule increase factor that are services purchased by hospitals in order
payment adjustment were the same as required for CY 2020 to satisfy the to provide medical care. A general
estimated payments applying the CY statutory requirements of sections measure of health care inflation (such as
2019 final cancer hospital payment 1833(t)(3)(F) and (t)(3)(G)(v) of the Act. the Consumer Price Index for Medical
adjustment. Therefore, we proposed to We proposed to use a reduced Care Services) would not be appropriate
apply a budget neutrality adjustment conversion factor of $79.770 in the as it is not specific to hospital medical
factor of 0.9998 to the conversion factor calculation of payments for hospitals services and is not reflective of the
for the cancer hospital payment that fail to meet the Hospital OQR input price changes experienced by
adjustment. In accordance with section Program requirements (a difference of hospitals but rather the inflation
16002(b) of the 21st Century Cures Act, ¥1.628 in the conversion factor relative experienced by the consumer for their
we stated in the proposed rule that we to hospitals that met the requirements). medical expenses. In addition, the OPPS
are applying a budget neutrality factor For CY 2020, we proposed to use a conversion factor is not designed to
calculated as if the proposed cancer conversion factor of $81.398 in the redress payment reductions made in a
hospital adjustment target payment-to- calculation of the national unadjusted non-budget neutral manner. The
cost ratio was 0.90, not the 0.89 target payment rates for those items and policies cited by the commenter are
payment-to-cost ratio we applied as services for which payment rates are intended to reduce Medicare
stated in section II.F. of the proposed calculated using geometric mean costs; expenditures. If the conversion factor
rule. that is, the proposed OPD fee schedule was to be increased to offset these
For the CY 2020 OPPS/ASC proposed increase factor of 2.7 percent for CY payment reductions, it would defeat the
rule, we estimated that proposed pass- 2020, the required proposed wage index intent of these policy initiatives.
through spending for drugs, biologicals, budget neutrality adjustment of Comment: A commenter expressed
and devices for CY 2020 would equal approximately 0.9993, the proposed their support for the proposed market
approximately $268.8 million, which cancer hospital payment adjustment of basket increase of 2.7 percent.
represented 0.34 percent of total 0.9998, and the proposed adjustment of Response: We appreciate the support
projected CY 2020 OPPS spending. ¥0.20 percentage point of projected of the commenter.
After reviewing the public comments adjustment for rural hospitals in the CY State floor shall not be applied in a
we received, we are finalizing these 2006 OPPS final rule with comment budget neutral manner. We codified
proposals without modification. For CY period (70 FR 68553). In the CY 2020 these requirements at § 419.43(c)(2) and
2020, we proposed to continue OPPS/ASC proposed rule (84 FR 39429), (3) of our regulations. For the CY 2020
previously established policies for we proposed to continue this policy for OPPS, we proposed to implement this
implementing the cancer hospital the CY 2020 OPPS. We refer readers to provision in the same manner as we
payment adjustment described in section II.H. of this final rule with have since CY 2011. Under this policy,
section 1833(t)(18) of the Act (discussed comment period for a description and the frontier State hospitals would
in section II.F. of this final rule with an example of how the wage index for receive a wage index of 1.00 if the
comment period). Based on the final a particular hospital is used to otherwise applicable wage index
rule updated data used in calculating determine payment for the hospital. We (including reclassification, the rural
the cancer hospital payment adjustment did not receive any public comments on floor, and rural floor budget neutrality)
in section II.F. of this final rule with this proposal. Therefore, for the reasons is less than 1.00. Because the HOPD
comment period, the target payment-to- discussed above and in the CY 2020 receives a wage index based on the
cost ratio for the cancer hospital OPPS/ASC proposed rule (84 FR 39429), geographic location of the specific
payment adjustment, which was 0.88 for we are finalizing our proposal, without inpatient hospital with which it is
CY 2019, is 0.89 for CY 2020. As a modification, to continue this policy as associated, we stated that the frontier
result, we are applying a budget discussed above for the CY 2020 OPPS. State wage index adjustment applicable
neutrality adjustment factor of 0.9999 to As discussed in the claims accounting for the inpatient hospital also would
the conversion factor for the cancer narrative included with the supporting apply for any associated HOPD. In the
hospital payment adjustment. documentation for this final rule with CY 2020 OPPS/ASC proposed rule (84
As a result of these finalized policies, comment period (which is available via FR 39430), we referred readers to the FY
the OPD fee schedule increase factor for the internet on the CMS website), for 2011 through FY 2019 IPPS/LTCH PPS
the CY 2020 OPPS is 2.6 percent (which estimating APC costs, we standardize 60 final rules for discussions regarding this
reflects the 3.0 percent final estimate of percent of estimated claims costs for provision, including our methodology
the hospital inpatient market basket geographic area wage variation using the for identifying which areas meet the
percentage increase, less the final 0.4 same FY 2020 pre-reclassified wage definition of ‘‘frontier States’’ as
percentage point MFP adjustment). For index that that is used under the IPPS provided for in section
CY 2020, we are using a conversion to standardize costs. This 1886(d)(3)(E)(iii)(II) of the Act: For FY
factor of $80.784 in the calculation of standardization process removes the 2011, 75 FR 50160 through 50161; for
the national unadjusted payment rates effects of differences in area wage levels FY 2012, 76 FR 51793, 51795, and
for those items and services for which from the determination of a national 51825; for FY 2013, 77 FR 53369
payment rates are calculated using unadjusted OPPS payment rate and through 53370; for FY 2014, 78 FR
geometric mean costs; that is, the OPD copayment amount. 50590 through 50591; for FY 2015, 79
fee schedule increase factor of 2.6 Under 42 CFR 419.41(c)(1) and
FR 49971; for FY 2016, 80 FR 49498; for
percent for CY 2020, the required wage 419.43(c) (published in the OPPS April
FY 2017, 81 FR 56922; for FY 2018, 82
index budget neutrality adjustment of 7, 2000 final rule with comment period
FR 38142; and for FY 2019, 83 FR
approximately 0.9981, and the (65 FR 18495 and 18545)), the OPPS
41380. We did not receive any public
adjustment of 0.88 percentage point of adopted the final fiscal year IPPS post-
comments on this proposal.
projected OPPS spending for the reclassified wage index as the calendar
Accordingly, for the reasons discussed
difference in pass-through spending that year wage index for adjusting the OPPS
above and in the CY 2020 OPPS/ASC
results in a conversion factor for CY standard payment amounts for labor
market differences. Therefore, the wage proposed rule (84 FR 39430), we are
2020 of $80.784.
index that applies to a particular acute finalizing our proposal, without
C. Wage Index Changes care, short-stay hospital under the IPPS modification, to continue to implement
Section 1833(t)(2)(D) of the Act also applies to that hospital under the the frontier State floor under the OPPS
requires the Secretary to determine a OPPS. As initially explained in the in the same manner as we have since CY
wage adjustment factor to adjust the September 8, 1998 OPPS proposed rule 2011.
portion of payment and coinsurance (63 FR 47576), we believe that using the In addition to the changes required by
attributable to labor-related costs for IPPS wage index as the source of an the Affordable Care Act, we noted in the
relative differences in labor and labor- adjustment factor for the OPPS is CY 2020 OPPS/ASC proposed rule (84
related costs across geographic regions reasonable and logical, given the FR 39430) that the FY 2020 IPPS wage
in a budget neutral manner (codified at inseparable, subordinate status of the indexes continue to reflect a number of
42 CFR 419.43(a)). This portion of the HOPD within the hospital overall. In adjustments implemented over the past
OPPS payment rate is called the OPPS accordance with section 1886(d)(3)(E) of few years, including, but not limited to,
labor-related share. Budget neutrality is the Act, the IPPS wage index is updated reclassification of hospitals to different
discussed in section II.B. of this final annually. geographic areas, the rural floor
rule with comment period. The Affordable Care Act contained provisions, an adjustment for
The OPPS labor-related share is 60 several provisions affecting the wage occupational mix, and an adjustment to
percent of the national OPPS payment. index. These provisions were discussed the wage index based on commuting
This labor-related share is based on a in the CY 2012 OPPS/ASC final rule patterns of employees (the out-migration
regression analysis that determined that, with comment period (76 FR 74191). adjustment). Also, we noted that, as
for all hospitals, approximately 60 Section 10324 of the Affordable Care discussed in the FY 2020 IPPS/LTCH
percent of the costs of services paid Act added section 1886(d)(3)(E)(iii)(II) PPS proposed rule (84 FR 19393
under the OPPS were attributable to to the Act, which defines a frontier State through 19399), we proposed a number
wage costs. We confirmed that this and amended section 1833(t) of the Act of policies under the IPPS to address
labor-related share for outpatient to add paragraph (19), which requires a wage index disparities between high
services is appropriate during our frontier State wage index floor of 1.00 in and low wage index value hospitals. In
regression analysis for the payment certain cases, and states that the frontier particular, in the FY 2020 IPPS/LTCH
PPS proposed rule, we proposed to (1) counties that became urban, and the FY 2020 IPPS wage indexes, we are
calculate the rural floor without existing CBSAs that were split apart using the OMB delineations that were
including the wage data of urban (OMB Bulletin 13–01). This bulletin can adopted, beginning with FY 2015 (based
hospitals that have reclassified as rural be found at: https:// on the revised delineations issued in
under section 1886(d)(8)(E) of the Act obamawhitehouse.archives.gov/sites/ OMB Bulletin No. 13–01) to calculate
(as implemented in § 412.103) (84 FR default/files/omb/bulletins/2013/b13- the area wage indexes, with updates as
19396 through 19398); (2) remove the 01.pdf. In the FY 2015 IPPS/LTCH PPS reflected in OMB Bulletin Nos. 15–01
wage data of urban hospitals that have final rule (79 FR 49950 through 49985), and 17–01. Similarly, in the CY 2020
reclassified as rural under § 412.103 for purposes of the IPPS, we adopted the OPPS/ASC proposed rule (84 FR 39431),
from the calculation of ‘‘the wage index use of the OMB statistical area for the proposed CY 2020 OPPS wage
for rural areas in the State’’ for purposes delineations contained in OMB Bulletin indexes, we proposed to continue to use
of applying section 1886(d)(8)(C)(iii) of No. 13–01, effective October 1, 2014. the OMB delineations that were adopted
the Act (84 FR 19398); (3) increase the For purposes of the OPPS, in the CY under the OPPS, beginning with CY
wage index values for hospitals with a 2015 OPPS/ASC final rule with 2015 (based on the revised delineations
wage index below the 25th percentile comment period (79 FR 66826 through issued in OMB Bulletin No. 13–01) to
wage index value across all hospitals by 66828), we adopted the use of the OMB calculate the area wage indexes, with
half the difference between the statistical area delineations contained in updates as reflected in OMB Bulletin
otherwise applicable final wage index OMB Bulletin No. 13–01, effective Nos. 15–01 and 17–01. We did not
value for a year for that hospital and the January 1, 2015, beginning with the CY receive any public comments on our
25th percentile wage index value for 2015 OPPS wage indexes. In the FY proposal. Accordingly, for the reasons
that year, and to offset the estimated 2017 IPPS/LTCH PPS final rule (81 FR discussed above and in the CY 2020
increase in payments to hospitals with 56913), we adopted revisions to OPPS/ASC proposed rule (84 FR 39430
wage index values below the 25th statistical areas contained in OMB through 39431), we are finalizing our
percentile by decreasing the wage index Bulletin No. 15–01, issued on July 15, proposal to continue to use the OMB
values for hospitals with wage index 2015, which provided updates to and delineations that were adopted
values above the 75th percentile wage superseded OMB Bulletin No. 13–01 beginning with CY 2015 to calculate
index value across all hospitals (84 FR that was issued on February 28, 2013. area wage indexes under the OPPS, with
19394 through 19396); and (4) apply a For purposes of the OPPS, in the CY updates as reflected in the OMB
5-percent cap for FY 2020 on any 2017 OPPS/ASC final rule with Bulletin Nos. 15–01, and 17–01.
decrease in a hospital’s final wage index comment period (81 FR 79598), we
CBSAs are made up of one or more
from the hospital’s final wage index in adopted the revisions to the OMB
constituent counties. Each CBSA and
FY 2019, as a proposed transition wage statistical area delineations contained in
constituent county has its own unique
index to help mitigate any significant OMB Bulletin No. 15–01, effective
identifying codes. The FY 2018 IPPS/
negative impacts on hospitals (84 FR January 1, 2017, beginning with the CY
LTCH PPS final rule (82 FR 38130)
19398). In addition, in the FY 2020 2017 OPPS wage indexes.
On August 15, 2017, OMB issued discussed the two different lists of codes
IPPS/LTCH PPS proposed rule (84 FR to identify counties: Social Security
19398), we proposed to apply a budget OMB Bulletin No. 17–01, which
provided updates to and superseded Administration (SSA) codes and Federal
neutrality adjustment to the Information Processing Standard (FIPS)
OMB Bulletin No. 15–01 that was issued
standardized amount so that our codes. Historically, CMS listed and used
on July 15, 2015. The attachments to
proposed transition wage index for SSA and FIPS county codes to identify
OMB Bulletin No. 17–01 provide
hospitals that may be negatively and crosswalk counties to CBSA codes
detailed information on the update to
impacted (described in item (4) above) for purposes of the IPPS and OPPS wage
the statistical areas since July 15, 2015,
would be implemented in a budget indexes. However, the SSA county
and are based on the application of the
neutral manner. Furthermore, in the FY codes are no longer being maintained
2010 Standards for Delineating
2020 IPPS/LTCH PPS proposed rule (84 and updated, although the FIPS codes
Metropolitan and Micropolitan
FR 19398 through 19399), we noted that continue to be maintained by the U.S.
Statistical Areas to Census Bureau
our proposed adjustment relating to the Census Bureau. The Census Bureau’s
population estimates for July 1, 2014
rural floor calculation also would be and July 1, 2015. In the CY 2019 OPPS/ most current statistical area information
budget neutral. We referred readers to ASC final rule with comment period (83 is derived from ongoing census data
the FY 2020 IPPS/LTCH PPS proposed FR 58863 through 58865), we adopted received since 2010; the most recent
rule (84 FR 19373 through 19399) for a the updates set forth in OMB Bulletin data are from 2015. The Census Bureau
detailed discussion of all proposed No. 17–01, effective January 1, 2019, maintains a complete list of changes to
changes to the FY 2020 IPPS wage beginning with the CY 2019 wage index. counties or county equivalent entities
indexes. We continue to believe that it is on the website at: https://
Furthermore, as discussed in the FY important for the OPPS to use the latest www.census.gov/geo/reference/county-
2015 IPPS/LTCH PPS final rule (79 FR labor market area delineations available changes.html (which, as of May 6, 2019,
49951 through 49963) and in each as soon as is reasonably possible in migrated to: https://www.census.gov/
subsequent IPPS/LTCH PPS final rule, order to maintain a more accurate and programs-surveys/geography.html). In
including the FY 2019 IPPS/LTCH PPS up-to-date payment system that reflects the FY 2018 IPPS/LTCH PPS final rule
final rule (83 FR 41362), the Office of the reality of population shifts and labor (82 FR 38130), for purposes of
Management and Budget (OMB) issued market conditions. For a complete crosswalking counties to CBSAs for the
revisions to the labor market area discussion of the adoption of the IPPS wage index, we finalized our
delineations on February 28, 2013 updates set forth in OMB Bulletin No. proposal to discontinue the use of the
(based on 2010 Decennial Census data), 17–01, we refer readers to the CY 2019 SSA county codes and begin using only
that included a number of significant OPPS/ASC final rule with comment the FIPS county codes. Similarly, for the
changes, such as new Core Based period (83 FR 58864 through 58865). purposes of crosswalking counties to
Statistical Areas (CBSAs), urban As we stated in the FY 2020 IPPS/ CBSAs for the OPPS wage index, in the
counties that became rural, rural LTCH PPS final rule (84 FR 42301), for CY 2018 OPPS/ASC final rule with
comment period (82 FR 59260), we consider this solution temporary until These commenters noted that any
finalized our proposal to discontinue the wage index is more equitable reduction in Medicare payments would
the use of SSA county codes and begin between hospitals. force hospitals to reduce staff and/or
using only the FIPS county codes. For Response: We appreciate the salary and benefits. One commenter
CY 2020, under the OPPS, we are commenters’ support. In response to the noted that, for many years, the
continuing to use only the FIPS county comment that CMS should consider the disparities among geographic areas have
codes for purposes of crosswalking increase in the wage index for hospitals continued to grow and have resulted in
counties to CBSAs. with wage index values below the 25th challenges recruiting staff. Some
In the CY 2020 OPPS/ASC proposed percentile wage index value (that it, low commenters recommended CMS
rule (84 FR 39431), we proposed to use wage index hospitals) temporary until convene a meeting to understand all of
the FY 2020 hospital IPPS post- the wage index is more equitable the challenges and issues in order to
reclassified wage index for urban and between hospitals, as we stated in the develop a comprehensive reform of the
rural areas as the wage index for the FY 2020 IPPS/LTCH PPS final rule (84 wage index. One commenter
OPPS to determine the wage FR 42326 through 42327), the increase recommended that, if CMS is going to
adjustments for both the OPPS payment in the IPPS wage index for low wage redistribute the area wage index, CMS
rate and the copayment standardized index hospitals is not intended to be offset the increased wage index for very
amount for CY 2020. Therefore, we permanent. As we stated in the FY 2020 low wage areas with a budget neutrality
stated in the proposed rule that any IPPS/LTCH PPS final rule (84 FR 42326 adjustment to the wage index applied
adjustments for the FY 2020 IPPS post- through 42327), we expect that this evenly to all hospitals. However, this
reclassified wage index, including, but policy will be in place for at least 4 commenter preferred that CMS not use
not limited to, any policies finalized years in order to allow employee budget neutrality for the area wage
under the IPPS to address wage index compensation increases implemented index. They did not believe that the
disparities between low and high wage by low wage index hospitals sufficient budget neutrality adjustment policy
index value hospitals, would be time to be reflected in the wage index follows statutory requirements for
reflected in the final CY 2020 OPPS calculation. We stated in the FY 2020 adjusting the area wage index that
wage index beginning on January 1, IPPS/LTCH PPS final rule (84 FR 42327) require CMS to address real differences
2020. (We referred readers to the FY that, once there has been sufficient time in labor costs. Several commenters
2020 IPPS/LTCH PPS proposed rule (84 for that increased employee believed CMS went beyond its authority
FR 19373 through 19399) and the compensation to be reflected in the in reallocating funding from hospitals in
proposed FY 2020 hospital wage index wage data, there should not be a high wage areas, to provide funding to
files posted on the CMS website.) With continuing need for this policy. low wage area hospitals, without any
regard to budget neutrality for the CY Comment: Several commenters relationship to actual wage-related data
2020 OPPS wage index, we referred supported the proposal to increase the
for the impacted areas. Another
readers to section II.B. of the CY 2020 wage index for low wage index
commenter strongly opposed decreasing
OPPS/ASC proposed rule. We stated hospitals but wanted it implemented in
payments to some or all hospitals to
that we continue to believe that using a non-budget neutral manner. They
offset an increase in the area wage index
the IPPS wage index as the source of an believe this would mitigate disparities
for low wage index hospitals and did
adjustment factor for the OPPS is for median wage index hospitals.
not believe the rationale in the FY 2020
reasonable and logical, given the Several commenters opposed the
IPPS final rule supported this change.
inseparable, subordinate status of the proposal to recalculate the wage index
One commenter opposed CMS making a
HOPD within the hospital overall. to help the lowest wage hospitals. These
budget neutrality adjustment across all
Summarized below are the comments commenters believed that applying a
budget neutrality adjustment for all hospitals as well as the transition wage
we received regarding our proposal to
hospitals to offset the increase in index adjustment to ensure that no
use the final FY 2020 hospital IPPS
payments for low wage index hospitals hospital’s wage index decreases by more
post-reclassified wage index for urban
would result in a significant loss of than 5 percent. This commenter
and rural areas as the wage index for the
resources for patient care in other believed that these adjustments
OPPS, including any adjustments for the
hospitals. While these commenters negatively impact hospitals in the
final FY 2020 IPPS post-reclassified
understood and appreciated the goal of bottom quartile of wage index that
wage index as discussed above, along
with our responses. the proposed changes to increase the would have seen a larger increase in
Comment: Several commenters wage index for low wage hospitals, they payment without these additional
supported CMS adopting the finalized did not believe that these policies adjustments.
post-reclassified wage index from the would help rural hospitals. They Response: As we stated in the FY
FY 2020 IPPS/LTCH PPS final rule for believed that certain communities 2020 IPPS/LTCH PPS final rule (84 FR
use under the OPPS. Many of these would benefit from increasing the wage 42331), the intent of the wage index
commenters noted that the gap in index for low wage hospitals but increase for hospitals with wage indexes
payment between rural and urban believed this policy does not adequately below the 25th percentile wage index
hospitals has contributed to disparities recognize differences in geographic value across all hospitals (that is, low
in care and noted that increasing the labor markets. They further claimed that wage index hospitals) is to increase the
wage index for hospitals with wage the offsetting reductions to the wage accuracy of the wage index as a
index values below the 25th percentile index in some areas will hinder technical adjustment, and not to use the
wage index value will help to lessen the hospitals’ ability to attract and recruit wage index as a policy tool to address
gap. Some of these commenters noted quality health care practitioners. non-wage issues related to rural
that this change will help rural areas Some commenters noted that OPPS hospitals, or the laudable goals of the
have access to quality, affordable health payments to hospitals in their respective overall financial health of hospitals in
care. One commenter supported the states would decrease by millions in CY low wage areas or broader wage index
proposal to increase the wage index for 2020 due to the budget neutral reform. As we stated in the FY 2020
hospitals with wage index values below implementation of the increase in the IPPS/LTCH PPS final rule, we believe
the 25th percentile, but wanted CMS to wage index for low wage hospitals. the wage index increase we finalized for
low wage index hospitals increases the budget neutrality. In addition, we refer applicable law in Section 1886(d)(8)(E)
accuracy of the wage index as a relative readers to the FY 2020 IPPS/LTCH PPS of the Act. One of the commenter’s
measure because it allows low wage final rule (84 FR 42328 through 42332) believed that removing the urban to
index hospitals to increase their for further discussion of the final FY rural reclassifications from the
employee compensation in ways that we 2020 IPPS wage index policies calculation of the rural floor penalizes
would expect if there were no lag in (including the transition wage index hospitals that are allowed to reclassify
reflecting compensation adjustments in adjustment) and detailed responses to under HHS authority.
the wage index. Thus, we stated in the similar comments. One commenter believed that CMS
FY 2020 IPPS/LTCH PPS final rule that In the CY 2020 OPPS/ASC proposed should put more structure around the
we believe the IPPS wage index rule (84 FR 39431), we proposed to use rural floor policy and should not apply
adjustment for low wage index hospitals the FY 2020 IPPS post-reclassified wage the rural floor in primarily urban states
will appropriately reflect the relative index for urban and rural areas as the with only one or two rural facilities. The
hospital wage level in those areas wage index under the OPPS to commenter believed that this would
compared to the national average wage determine the wage adjustments for reduce the potential for gaming the
level. We further stated in the FY 2020 both the OPPS payment rate and the system in determining an equitable
IPPS/LTCH PPS final rule that because copayment standardized amount. wage adjustment.
this policy is based on the actual wages Because we continue to believe that Response: We addressed similar
that we expect low wage index hospitals using the IPPS post-reclassified wage comments in the FY 2020 IPPS/LTCH
to pay, it falls within the scope of the index as the source of the wage index PPS final rule (84 FR 42334 through
authority of section 1886(d)(3)(E) of the adjustment factor under the OPPS is 42336). As provided in the FY 2020
Act. reasonable and logical given the IPPS/LTCH final rule (84 FR 42334), in
inseparable, subordinate status of the the absence of broader wage index
However, we note that, in the FY 2020 reform from Congress, we believe it is
HOPD within the hospital overall, as
IPPS/LTCH PPS final rule (84 FR 42331 appropriate to revise the rural floor
proposed, we are finalizing the use of
through 42332), we did not finalize our calculation as part of an effort to reduce
the FY 2020 hospital IPPS post-
budget neutrality proposal to decrease wage index disparities. Regarding
reclassified wage index for urban and
the wage index for hospitals with wage CMS’s statutory authority to exclude the
rural areas as the wage index under the
index values above the 75th percentile wage data of urban hospitals reclassified
OPPS to determine the wage
wage index value to offset the estimated adjustments for both the OPPS payment as rural from the IPPS rural floor
increase in payments to low wage index rate and the copayment standardized calculation, as we stated in the FY 2020
hospitals. Instead, in the FY 2020 IPPS/ amount for CY 2020. Accordingly, any IPPS/LTCH PPS final rule (84 FR
LTCH PPS final rule, consistent with adjustments for the final FY 2020 IPPS 42334), we believe our calculation
our current methodology for post-reclassified wage index, including, methodology is permissible under
implementing wage index budget but not limited to, any policies finalized section 1886(d)(8)(E) of the Act (as
neutrality under the IPPS, we finalized in the FY 2020 IPPS/LTCH PPS final implemented in § 412.103) and the rural
a budget neutrality adjustment to the rule to address wage index disparities floor statute (section 4410 of Pub. L.
IPPS national standardized amount for between low and high wage index value 105–33). Further, as we discussed in the
all hospitals so that the increase in the hospitals, will be reflected in the final FY 2020 IPPS/LTCH PPS final rule (84
IPPS wage index for low wage index CY 2020 OPPS wage index beginning on FR 42336), we do not believe this policy
hospitals is implemented in a budget January 1, 2020. penalizes or adversely impacts urban
neutral manner. As explained in the FY Comment: Several commenters noted hospitals that have reclassified as rural.
2020 IPPS/LTCH PPS final rule (84 support for the revised rural floor policy We refer readers to the FY 2020 IPPS/
FR42331), under section 1886(d)(3)(E) of finalized in the FY 2020 IPPS/LTCH LTCH PPS final rule (84 FR 42332
the Act, the IPPS wage index adjustment final rule. Many of these commenters through 42336) for further discussion of
is required to be implemented in a supported the proposal to exclude the this policy and detailed responses to
budget neutral manner. We further wage data of urban hospitals that similar comments. We note that impact
noted in the FY 2020 IPPS/LTCH PPS reclassify as rural in calculating the files and supporting data files available
final rule that, even if the wage index rural floor. These commenters suggested on the FY 2020 IPPS Final Rule Home
were not required to be budget neutral, that including the wage data of these Page provide the data necessary to
we would consider it inappropriate to hospitals in the rural floor calculation understand the impact of the finalized
use the wage index to increase or has inflated wage index values in policies under the IPPS. Furthermore,
decrease overall spending. Similarly, certain states and that excluding the we appreciate the comment that CMS
under section 1886(t)(2)(D) and (9)(B) of wage data of these hospitals will have should not apply the rural floor in
the Act, the OPPS wage index positive effects on OPPS payment for primarily urban states with only one or
adjustment is required to be rural hospitals. two rural facilities; however, because
implemented in a budget neutral Response: We thank commenters for we consider this comment to be outside
manner. Accordingly, consistent with their support. the scope of the CY 2020 OPPS wage
the policy finalized in the FY 2020 Comment: A few commenters index proposals, we are not addressing
IPPS/LTCH PPS final rule, in this CY opposed the change to exclude the wage it in this final rule with comment
2020 OPPS/ASC final rule with data of urban hospitals that have been period.
comment period, we are finalizing a reclassified as rural in calculating the As we discussed above, we continue
budget neutrality adjustment to the IPPS rural floor. One of these to believe that using the IPPS post-
conversion factor for all hospitals paid commenters believed that CMS lacks the reclassified wage index as the source of
under the OPPS so that the increase in legal authority to remove from the rural the wage index adjustment factor under
the OPPS wage index for low wage floor calculation the wage data of the OPPS is reasonable and logical given
index hospitals is implemented in a hospitals that have been reclassified the inseparable, subordinate status of
budget neutral manner. We refer readers from urban to rural as implemented in the HOPD within the hospital overall.
to section II.B. of this final rule with the FY 2020 IPPS/LTCH final rule. This Thus, as proposed, we are using the FY
comment period for a discussion of commenter believed CMS misread the 2020 hospital IPPS post-reclassified
wage index for urban and rural areas as OPPS so that the increase in the OPPS For CMHCs, for CY 2020, we
the wage index under the OPPS to wage index for low wage index proposed to continue to calculate the
determine the wage adjustments for hospitals is implemented in a budget wage index by using the post-
both the OPPS payment rate and the neutral manner. We refer readers to reclassification IPPS wage index based
copayment standardized amount for CY section II.B. of this final rule with on the CBSA where the CMHC is
2020. Accordingly, as we proposed, any comment period for a discussion of located. We also proposed to apply any
adjustments for the final FY 2020 IPPS budget neutrality. policies that are finalized under the
post-reclassified wage index, including, Hospitals that are paid under the IPPS relating to wage index disparities.
but not limited to, the revised rural floor OPPS, but not under the IPPS, do not In addition, we proposed that the wage
calculation methodology and other IPPS have an assigned hospital wage index index that would apply to CMHCs for
wage index policies finalized in the FY under the IPPS. Therefore, for non-IPPS CY 2020 would include the rural floor
2020 IPPS/LTCH PPS final rule to hospitals paid under the OPPS, it is our adjustment. Also, we proposed that the
address wage index disparities, will be longstanding policy to assign the wage wage index that would apply to CMHCs
reflected in the final CY 2020 OPPS index that would be applicable if the would not include the out-migration
wage index beginning on January 1, hospital were paid under the IPPS, adjustment because that adjustment
2020. based on its geographic location and any only applies to hospitals. We did not
After considering the public applicable wage index adjustments. In receive any public comments on these
comments received, for the reasons the CY 2020 OPPS/ASC proposed rule proposals. Therefore, for the reasons
(84 FR 39431), we proposed to continue discussed above and in the CY 2020
discussed earlier in this section and in
this policy for CY 2020, and included a OPPS/ASC proposed rule (84 FR 39431),
the CY 2020 OPPS/ASC proposed rule,
brief summary of the major proposed FY we are finalizing these proposals
we are finalizing without modification
2020 IPPS wage index policies and without modifications.
our proposal to use the final FY 2020
adjustments that we proposed to apply Table 4 associated with the FY 2020
IPPS post-reclassified wage index for
to these hospitals under the OPPS for IPPS/LTCH PPS final rule (available via
urban and rural areas as the wage index
CY 2020, which we have summarized the internet on the CMS website at:
under the OPPS to determine the wage
below. We refer readers to the FY 2020 http://www.cms.gov/Medicare/
adjustments for both the OPPS payment
IPPS/LTCH PPS final rule (84 FR 42300 Medicare-Fee-for-Service-Payment/
rate and the copayment standardized
through 42339) for a detailed discussion AcuteInpatientPPS/index.html)
amount for CY 2020. Accordingly, as we of the final changes to the FY 2020 IPPS identifies counties eligible for the out-
proposed, any adjustments for the final wage indexes. migration adjustment. Table 2
FY 2020 IPPS post-reclassified wage It has been our longstanding policy to associated with the FY 2020 IPPS/LTCH
index (as set forth in the FY 2020 IPPS/ allow non-IPPS hospitals paid under the PPS final rule (available for download
LTCH PPS final rule, 84 FR 42300 OPPS to qualify for the out-migration via the website above) identifies IPPS
through 42339), including, but not adjustment if they are located in a hospitals that will receive the out-
limited to, any policies finalized in the section 505 out-migration county migration adjustment for FY 2020. We
FY 2020 IPPS/LTCH PPS final rule to (section 505 of the Medicare are including the out-migration
address wage index disparities between Prescription Drug, Improvement, and adjustment information from Table 2
low and high wage index value Modernization Act of 2003 (MMA)). associated with the FY 2020 IPPS/LTCH
hospitals (as set forth at 84 FR 42300 Applying this adjustment is consistent PPS final rule as Addendum L to this
through 42339), will be reflected in the with our policy of adopting IPPS wage final rule with comment period with the
final CY 2020 OPPS wage index index policies for hospitals paid under addition of non-IPPS hospitals that will
beginning on January 1, 2020. As the OPPS. We note that, because non- receive the section 505 out-migration
discussed above, we note that in the FY IPPS hospitals cannot reclassify, they adjustment under this CY 2020 OPPS/
2020 IPPS/LTCH PPS final rule (84 FR are eligible for the out-migration wage ASC final rule with comment period.
42325 through 42332), we did not index adjustment if they are located in Addendum L is available via the
finalize our budget neutrality proposal a section 505 out-migration county. This internet on the CMS website. We refer
to decrease the wage index for hospitals is the same out-migration adjustment readers to the CMS website for the OPPS
with wage index values above the 75th policy that applies if the hospital were at: http://www.cms.gov/Medicare/
percentile wage index value to offset the paid under the IPPS. For CY 2020, we Medicare-Fee-for-Service-Payment/
estimated increase in payments to proposed to continue our policy of HospitalOutpatientPPS/index.html. At
hospitals with wage index values below allowing non-IPPS hospitals paid under this link, readers will find a link to the
the 25th percentile wage index value, the OPPS to qualify for the out- final FY 2020 IPPS wage index tables
and thus this budget neutrality policy migration adjustment if they are located and Addendum L.
will not be applied under the OPPS. in a section 505 out-migration county
Instead, in the FY 2020 IPPS/LTCH PPS (section 505 of the MMA). In addition, D. Statewide Average Default Cost-to-
final rule, consistent with our current for non-IPPS hospitals paid under the Charge Ratios (CCRs)
methodology for implementing IPPS OPPS, we proposed to apply any In addition to using CCRs to estimate
wage index budget neutrality, we policies that are finalized under the costs from charges on claims for
finalized a budget neutrality adjustment IPPS relating to wage index disparities. ratesetting, CMS uses overall hospital-
to the IPPS national standardized We also proposed that the wage index specific CCRs calculated from the
amount for all hospitals so that the that would apply to non-IPPS hospitals hospital’s most recent cost report to
increase in the IPPS wage index for low for CY 2020 would include the rural determine outlier payments, payments
wage index hospitals is implemented in floor adjustment. We did not receive for pass-through devices, and monthly
a budget neutral manner. Consistent any public comments on these interim transitional corridor payments
with this IPPS policy, in this CY 2020 proposals. Accordingly, for the reasons under the OPPS during the PPS year.
OPPS/ASC final rule with comment discussed above and in the CY 2020 For certain hospitals, under the
period, we are finalizing a budget OPPS/ASC proposed rule (84 FR 39431), regulations at 42 CFR 419.43(d)(5)(iii),
neutrality adjustment to the conversion we are finalizing these proposals CMS uses the statewide average default
factor for all hospitals paid under the without modifications. CCRs to determine the payments
mentioned earlier if it is unable to E. Adjustment for Rural Sole regulations at § 419.43(g)(4) to specify,
determine an accurate CCR for a Community Hospitals (SCHs) and in general terms, that items paid at
hospital in certain circumstances. This Essential Access Community Hospitals charges adjusted to costs by application
includes hospitals that are new, (EACHs) Under Section 1833(t)(13)(B) of of a hospital-specific CCR are excluded
hospitals that have not accepted the Act for CY 2020 from the 7.1 percent payment
assignment of an existing hospital’s In the CY 2006 OPPS final rule with adjustment.
provider agreement, and hospitals that In the CY 2020 OPPS/ASC proposed
comment period (70 FR 68556), we
have not yet submitted a cost report. rule (84 FR 58870 through 58871), for
finalized a payment increase for rural
CMS also uses the statewide average the CY 2020 OPPS, we proposed to
sole community hospitals (SCHs) of 7.1
default CCRs to determine payments for continue the current policy of a 7.1
percent for all services and procedures
hospitals whose CCR falls outside the percent payment adjustment that is
paid under the OPPS, excluding drugs,
predetermined ceiling threshold for a done in a budget neutral manner for
biologicals, brachytherapy sources, and
valid CCR or for hospitals in which the rural SCHs, including EACHs, for all
devices paid under the pass-through
most recent cost report reflects an all- services and procedures paid under the
payment policy, in accordance with
inclusive rate status (Medicare Claims OPPS, excluding separately payable
section 1833(t)(13)(B) of the Act, as drugs and biologicals, brachytherapy
Processing Manual (Pub. 100–04), added by section 411 of the Medicare
Chapter 4, Section 10.11). sources, items paid at charges reduced
Prescription Drug, Improvement, and to costs, and devices paid under the
We discussed our policy for using Modernization Act of 2003 (MMA) (Pub.
default CCRs, including setting the pass-through payment policy.
L. 108–173). Section 1833(t)(13) of the Comment: Several commenters
ceiling threshold for a valid CCR, in the Act provided the Secretary the authority
CY 2009 OPPS/ASC final rule with supported the proposal to continue the
to make an adjustment to OPPS 7.1 percent payment adjustment.
comment period (73 FR 68594 through payments for rural hospitals, effective Response: We appreciate the
68599) in the context of our adoption of January 1, 2006, if justified by a study commenters’ support.
an outlier reconciliation policy for cost of the difference in costs by APC Comment: One commenter requested
reports beginning on or after January 1, between hospitals in rural areas and that CMS make the 7.1 percent rural
2009. For details on our process for hospitals in urban areas. Our analysis adjustment permanent. The commenter
calculating the statewide average CCRs, showed a difference in costs for rural appreciated the policy that CMS
we referred readers to the CY 2020 SCHs. Therefore, for the CY 2006 OPPS, adopted in CY 2019 where we stated
OPPS proposed rule Claims Accounting we finalized a payment adjustment for that the 7.1 percent rural adjustment
Narrative that is posted on the CMS rural SCHs of 7.1 percent for all services would continue to be in place until our
website. In the CY 2020 OPPS/ASC and procedures paid under the OPPS, data support establishing a different
proposed rule (84 FR 39432), we excluding separately payable drugs and rural adjustment percentage. However,
proposed to update the default ratios for biologicals, brachytherapy sources, the commenter believed that this policy
CY 2020 using the most recent cost items paid at charges reduced to costs, still does not provide enough certainty
report data. We indicated that we would and devices paid under the pass- for rural SCHs and EACHs to know
update these ratios in this final rule through payment policy, in accordance whether they should take into account
with comment period if more recent with section 1833(t)(13)(B) of the Act. the rural SCH adjustment when
cost report data are available. In the CY 2007 OPPS/ASC final rule attempting to calculate expected
We did not receive any public with comment period (71 FR 68010 and revenues for their hospital budgets.
comments on our proposal to use 68227), for purposes of receiving this Response: We thank the commenter
statewide average default CCRs if we rural adjustment, we revised our for their input. We believe that our
cannot calculate a CCR for a hospital regulations at § 419.43(g) to clarify that currrent policy, which states that the 7.1
and to use these CCRs to adjust charges essential access community hospitals percent payment adjustment for rural
on claims to costs for setting the final (EACHs) are also eligible to receive the SCHs and EACHs will remain in effect
CY 2020 OPPS payment weights. rural SCH adjustment, assuming these until our data show that a different
Therefore, we finalizing our proposal entities otherwise meet the rural percentage for the rural payment
without modification. adjustment criteria. Currently, two adjustment is necessary, provides
As we stated in the CY 2020 OPPS/ hospitals are classified as EACHs, and sufficient budget predictability for rural
ASC proposed rule (84 FR 39432), we as of CY 1998, under section 4201(c) of SCHs and EACHs. Providers would
are no longer publishing a table in the Public Law 105–33, a hospital can no receive notice in a proposed rule before
Federal Register containing the longer become newly classified as an any changes to the rural adjustment
statewide average CCRs in the annual EACH. percentage would be implemented.
OPPS proposed rule and final rule. This adjustment for rural SCHs is Comment: Some commenters
These CCRs with the upper limit will be budget neutral and applied before requested that CMS expand the payment
available for download with each OPPS calculating outlier payments and adjustment for rural SCHs and EACHs to
CY proposed rule and final rule on the copayments. We stated in the CY 2006 additional types of hospitals. One
CMS website. We refer readers to the OPPS final rule with comment period commenter requested that the payment
CMS website at: https://www.cms.gov/ (70 FR 68560) that we would not adjustment apply to include urban SCHs
Medicare/Medicare-Fee-for-Service- reestablish the adjustment amount on an because, according to the commenter,
Payment/HospitalOutpatientPPS/ annual basis, but we may review the urban SCHs care for patient populations
Hospital-Outpatient-Regulations-and- adjustment in the future and, if similar to rural SCHs and EACHs, face
Notices.html; click on the link on the appropriate, would revise the similar financial challenges to rural
left of the page titled ‘‘Hospital adjustment. We provided the same 7.1 SCHs and EACHs, and act as safety net
Outpatient Regulations and Notices’’ percent adjustment to rural SCHs, providers for rural areas despite their
and then select the relevant regulation including EACHs, again in CYs 2008 designation as urban providers. Another
to download the statewide CCRs and through 2019. Further, in the CY 2009 commenter requested that the payment
upper limit in the downloads section of OPPS/ASC final rule with comment adjustment also apply to Medicare-
the web page. period (73 FR 68590), we updated the dependent hospitals (MDHs) because,
according to the commenter, these difference between payments for hospitals that reflects their higher
hospitals face similar financial covered outpatient services under the outpatient costs, as discussed in the CY
challenges to rural SCHs and EACHs, OPPS and a ‘‘pre-BBA amount.’’ That is, 2012 OPPS/ASC final rule with
and MDHs play a similar safety net role cancer hospitals are permanently held comment period (76 FR 74202 through
to rural SCHs and EACHs, especially for harmless to their ‘‘pre-BBA amount,’’ 74206). Specifically, we adopted a
Medicare. One commenter requested and they receive transitional outpatient policy to provide additional payments
that payment rates for OPPS services for payments (TOPs) or hold harmless to the cancer hospitals so that each
all rural hospitals be increased to reduce payments to ensure that they do not cancer hospital’s final PCR for services
financial vulnerability for rural receive a payment that is lower in provided in a given calendar year is
hospitals related to the high share of amount under the OPPS than the equal to the weighted average PCR
Medicare and Medicaid beneficiaries payment amount they would have (which we refer to as the ‘‘target PCR’’)
they serve. received before implementation of the for other hospitals paid under the OPPS.
Response: We thank the commenters OPPS, as set forth in section The target PCR is set in advance of the
for their comments. However, the 1833(t)(7)(F) of the Act. The ‘‘pre-BBA calendar year and is calculated using
analysis we did to compare costs of amount’’ is the product of the hospital’s the most recently submitted or settled
urban providers to those of rural reasonable costs for covered outpatient cost report data that are available at the
providers did not support an add-on services occurring in the current year time of final rulemaking for the calendar
adjustment for providers other than and the base payment-to-cost ratio (PCR) year. The amount of the payment
rural SCHs and EACHs. In addition, our for the hospital defined in section adjustment is made on an aggregate
follow-up analyses performed in recent 1833(t)(7)(F)(ii) of the Act. The ‘‘pre- basis at cost report settlement. We note
years have not shown differences in BBA amount’’ and the determination of that the changes made by section
costs for all services for any of the the base PCR are defined at 42 CFR 1833(t)(18) of the Act do not affect the
additional types of providers mentioned 419.70(f). TOPs are calculated on existing statutory provisions that
by the commenters. Accordingly, we do Worksheet E, Part B, of the Hospital provide for TOPs for cancer hospitals.
not believe we currently have a basis to Cost Report or the Hospital Health Care The TOPs are assessed, as usual, after
expand the payment adjustment to any Complex Cost Report (Form CMS–2552– all payments, including the cancer
providers other than rural SCHs and 96 or Form CMS–2552–10, hospital payment adjustment, have been
EACHs. respectively), as applicable each year. made for a cost reporting period. For
After consideration of the public Section 1833(t)(7)(I) of the Act exempts CYs 2012 and 2013, the target PCR for
comments we received, we are TOPs from budget neutrality purposes of the cancer hospital payment
finalizing our proposal, without calculations. adjustment was 0.91. For CY 2014, the
modification, to continue the current Section 3138 of the Affordable Care target PCR was 0.90. For CY 2015, the
policy of a 7.1 percent payment Act amended section 1833(t) of the Act target PCR was 0.90. For CY 2016, the
adjustment that is done in a budget by adding a new paragraph (18), which target PCR was 0.92, as discussed in the
neutral manner for rural SCHs, instructs the Secretary to conduct a CY 2016 OPPS/ASC final rule with
including EACHs, for all services and study to determine if, under the OPPS, comment period (80 FR 70362 through
procedures paid under the OPPS, outpatient costs incurred by cancer 70363). For CY 2017, the target PCR was
excluding separately payable drugs and hospitals described in section 0.91, as discussed in the CY 2017 OPPS/
biologicals, devices paid under the pass- 1886(d)(1)(B)(v) of the Act with respect ASC final rule with comment period (81
through payment policy, and items paid to APC groups exceed outpatient costs FR 79603 through 79604). For CY 2018,
at charges reduced to costs. incurred by other hospitals furnishing the target PCR was 0.88, as discussed in
services under section 1833(t) of the the CY 2018 OPPS/ASC final rule with
F. Payment Adjustment for Certain Act, as determined appropriate by the comment period (82 FR 59265 through
Cancer Hospitals for CY 2020 Secretary. Section 1833(t)(18)(A) of the 59266). For CY 2019, the target PCR was
1. Background Act requires the Secretary to take into 0.88, as discussed in the CY 2019 OPPS/
consideration the cost of drugs and ASC final rule with comment period (83
Since the inception of the OPPS, biologicals incurred by cancer hospitals FR 58871 through 58873).
which was authorized by the Balanced and other hospitals. Section
Budget Act of 1997 (BBA) (Pub. L. 105– 1833(t)(18)(B) of the Act provides that, 2. Policy for CY 2020
33), Medicare has paid the 11 hospitals if the Secretary determines that cancer Section 16002(b) of the 21st Century
that meet the criteria for cancer hospitals’ costs are higher than those of Cures Act (Pub. L. 114–255) amended
hospitals identified in section other hospitals, the Secretary shall section 1833(t)(18) of the Act by adding
1886(d)(1)(B)(v) of the Act under the provide an appropriate adjustment subparagraph (C), which requires that in
OPPS for covered outpatient hospital under section 1833(t)(2)(E) of the Act to applying § 419.43(i) (that is, the
services. These cancer hospitals are reflect these higher costs. In 2011, after payment adjustment for certain cancer
exempted from payment under the IPPS. conducting the study required by hospitals) for services furnished on or
With the Medicare, Medicaid and section 1833(t)(18)(A) of the Act, we after January 1, 2018, the target PCR
SCHIP Balanced Budget Refinement Act determined that outpatient costs adjustment be reduced by 1.0
of 1999 (Pub. L. 106–113), Congress incurred by the 11 specified cancer percentage point less than what would
established section 1833(t)(7) of the Act, hospitals were greater than the costs otherwise apply. Section 16002(b) also
‘‘Transitional Adjustment to Limit incurred by other OPPS hospitals. For a provides that, in addition to the
Decline in Payment,’’ to determine complete discussion regarding the percentage reduction, the Secretary may
OPPS payments to cancer and children’s cancer hospital cost study, we refer consider making an additional
hospitals based on their pre-BBA readers to the CY 2012 OPPS/ASC final percentage point reduction to the target
payment amount (often referred to as rule with comment period (76 FR 74200 PCR that takes into account payment
‘‘held harmless’’). through 74201). rates for applicable items and services
As required under section Based on these findings, we finalized described under section 1833(t)(21)(C)
1833(t)(7)(D)(ii) of the Act, a cancer a policy to provide a payment of the Act for hospitals that are not
hospital receives the full amount of the adjustment to the 11 specified cancer cancer hospitals described under
section 1886(d)(1)(B)(v) of the Act. located in Puerto Rico from our dataset hospitals in the dataset were from cost
Further, in making any budget because we did not believe their cost report periods with fiscal years ends
neutrality adjustment under section structure reflected the costs of most ranging from 2010 to 2018. We then
1833(t) of the Act, the Secretary shall hospitals paid under the OPPS, and, removed the cost report data of the 46
not take into account the reduced therefore, their inclusion may bias the hospitals located in Puerto Rico from
expenditures that result from calculation of hospital-weighted our dataset because we do not believe
application of section 1833(t)(18)(C) of statistics. We also removed the cost their cost structure reflects the cost of
the Act. report data of 23 hospitals because these most hospitals paid under the OPPS
In the CY 2020 OPPS/ASC proposed hospitals had cost report data that were and, therefore, their inclusion may bias
rule (84 FR 39433), for CY 2020, we not complete (missing aggregate OPPS the calculation of hospital-weighted
proposed to provide additional payments, missing aggregate cost data, statistics. We also removed the cost
payments to the 11 specified cancer or missing both), so that all cost reports report data of 21 hospitals because these
hospitals so that each cancer hospital’s in the study would have both the hospitals had cost report data that were
final PCR is equal to the weighted payment and cost data necessary to not complete (missing aggregate OPPS
average PCR (or ‘‘target PCR’’) for the calculate a PCR for each hospital, payments, missing aggregate cost data,
other OPPS hospitals, using the most leading to a proposed analytic file of or missing both), so that all cost report
recent submitted or settled cost report 3,539 hospitals with cost report data. in the study would have both the
data that were available at the time of Using this smaller dataset of cost payment and cost data necessary to
the development of the proposed rule, report data, we estimated that, on calculate a PCR for each hospital,
reduced by 1.0 percentage point, to average, the OPPS payments to other leading to an analytic file of 3,523
comply with section 16002(b) of the hospitals furnishing services under the hospitals with cost report data.
21st Century Cures Act. OPPS were approximately 90 percent of Using this smaller dataset of cost
We did not propose an additional reasonable cost (weighted average PCR report data, we estimated a target PCR
reduction beyond the 1.0 percentage of 0.90). Therefore, after applying the of 0.90. Therefore, after applying the 1.0
point reduction required by section 1.0 percentage point reduction, as percentage point reduction as required
16002(b) for CY 2020. To calculate the required by section 16002(b) of the 21st by section 1602(b) of the 21st Century
proposed CY 2020 target PCR, we are Century Cures Act, we proposed that the Cures Act, we are finalizing that the
using the same extract of cost report payment amount associated with the payment amount associated with the
data from HCRIS, as discussed in cancer hospital payment adjustment to cancer hospital adjustment to be
section II.A. of the CY 2020 OPPS/ASC be determined at cost report settlement determined at cost report settlement
proposed rule and this final rule with would be the additional payment will be the additional payment needed
comment period, used to estimate costs needed to result in a proposed target to result in a PCR equal to 0.89 for each
for the CY 2020 OPPS. Using these cost PCR equal to 0.89 for each cancer cancer hospital.
report data, we included data from hospital. Table 7 shows the estimated
Worksheet E, Part B, for each hospital, We did not receive any public percentage increase in OPPS payments
using data from each hospital’s most comments on our proposals. Therefore, to each cancer hospital for CY 2020, due
recent cost report, whether as submitted we are finalizing our proposed cancer to the cancer hospital payment
or settled. hospital payment adjustment adjustment policy. The actual amount of
We then limited the dataset to the methodology without modification. For the CY 2020 cancer hospital payment
hospitals with CY 2018 claims data that this final rule with comment period, we adjustment for each cancer hospital will
we used to model the impact of the are using the most recent cost report be determined at cost report settlement
proposed CY 2020 APC relative data through June 30, 2019 to update the and will depend on each hospital’s CY
payment weights (3,770 hospitals) adjustment. This updated yields a target 2020 payments and costs. We note that
because it is appropriate to use the same PCR of 0.90. We limited the dataset to the requirements contained in section
set of hospitals that are being used to hospitals with CY 2018 claims data that 1833(t)(18) of the Act do not affect the
calibrate the modeled CY 2020 OPPS. we used to model the impact of the CY existing statutory provisions that
The cost report data for the hospitals in 2020 APC relative payment weights provide for TOPs for cancer hospitals.
this dataset were from cost report (3,763) because it is appropriate to use The TOPs will be assessed, as usual,
periods with fiscal year ends ranging the same set of hospitals that we are after all payments, including the cancer
from 2016 to 2018. We then removed using to calibrate the modeled CY 2020 hospital payment adjustment, have been
the cost report data of the 49 hospitals OPPS. The cost report data for the made for a cost reporting period.
G. Hospital Outpatient Outlier fixed-dollar amount threshold) (83 FR dataset for this CY 2020 OPPS final rule
Payments 58874 through 58875). If the cost of a with comment period, we estimate that
service exceeds both the multiplier we paid approximately 1.00 percent of
1. Background
threshold and the fixed-dollar the total aggregated OPPS payments in
The OPPS provides outlier payments threshold, the outlier payment is outliers for CY 2018.
to hospitals to help mitigate the calculated as 50 percent of the amount For the CY 2020 OPPS/ASC proposed
financial risk associated with high-cost by which the cost of furnishing the rule, using CY 2018 claims data and CY
and complex procedures, where a very service exceeds 1.75 times the APC 2019 payment rates, we estimated that
costly service could present a hospital payment amount. Beginning with CY the aggregate outlier payments for CY
with significant financial loss. As 2009 payments, outlier payments are 2019 would be approximately 1.03
explained in the CY 2015 OPPS/ASC subject to a reconciliation process percent of the total CY 2019 OPPS
final rule with comment period (79 FR similar to the IPPS outlier reconciliation payments. We provided estimated CY
66832 through 66834), we set our process for cost reports, as discussed in 2020 outlier payments for hospitals and
projected target for aggregate outlier the CY 2009 OPPS/ASC final rule with CMHCs with claims included in the
payments at 1.0 percent of the estimated comment period (73 FR 68594 through claims data that we used to model
aggregate total payments under the 68599). impacts in the Hospital–Specific
OPPS for the prospective year. Outlier It has been our policy to report the Impacts—Provider-Specific Data file on
payments are provided on a service-by- actual amount of outlier payments as a the CMS website at: https://
service basis when the cost of a service percent of total spending in the claims www.cms.gov/Medicare/Medicare-Fee-
exceeds the APC payment amount being used to model the OPPS. Our for-Service-Payment/HospitalOutpatient
multiplier threshold (the APC payment estimate of total outlier payments as a PPS/index.html.
amount multiplied by a certain amount) percent of total CY 2018 OPPS
as well as the APC payment amount payments, using CY 2018 claims 2. Outlier Calculation for CY 2020
plus a fixed-dollar amount threshold available for the CY 2020 OPPS/ASC In the CY 2020 OPPS/ASC proposed
(the APC payment plus a certain amount proposed rule (84 FR 39434 through rule (84 FR 39434 through 39435), for
of dollars). In CY 2019, the outlier 39435) was approximately 1.0 percent of CY 2020, we proposed to continue our
threshold was met when the hospital’s the total aggregated OPPS payments. policy of estimating outlier payments to
cost of furnishing a service exceeded Therefore, for CY 2018, we estimated be 1.0 percent of the estimated aggregate
1.75 times (the multiplier threshold) the that we paid the outlier target of 1.0 total payments under the OPPS. We
APC payment amount and exceeded the percent of total aggregated OPPS proposed that a portion of that 1.0
ER12NO19.012</GPH>
APC payment amount plus $4,825 (the payments. Using an updated claims percent, an amount equal to less than
0.01 percent of outlier payments (or (69 FR 65845), we believe that the use requires that hospitals that fail to report
0.0001 percent of total OPPS payments), of these charge inflation factors is data required for the quality measures
would be allocated to CMHCs for PHP appropriate for the OPPS because, with selected by the Secretary, in the form
outlier payments. This is the amount of the exception of the inpatient routine and manner required by the Secretary
estimated outlier payments that would service cost centers, hospitals use the under section 1833(t)(17)(B) of the Act,
result from the proposed CMHC outlier same ancillary and outpatient cost incur a 2.0 percentage point reduction
threshold as a proportion of total centers to capture costs and charges for to their OPD fee schedule increase
estimated OPPS outlier payments. As inpatient and outpatient services. factor; that is, the annual payment
discussed in section VIII.C. of the CY As noted in the CY 2007 OPPS/ASC update factor. The application of a
2020 OPPS/ASC proposed rule (84 FR final rule with comment period (71 FR reduced OPD fee schedule increase
39435), we proposed to continue our 68011), we are concerned that we could factor results in reduced national
longstanding policy that if a CMHC’s systematically overestimate the OPPS unadjusted payment rates that will
cost for partial hospitalization services, hospital outlier threshold if we did not apply to certain outpatient items and
paid under APC 5853 (Partial apply a CCR inflation adjustment factor. services furnished by hospitals that are
Hospitalization for CMHCs), exceeds Therefore, we proposed to apply the required to report outpatient quality
3.40 times the payment rate for same CCR inflation adjustment factor data and that fail to meet the Hospital
proposed APC 5853, the outlier that we proposed to apply for the FY OQR Program requirements. For
payment would be calculated as 50 2020 IPPS outlier calculation to the hospitals that fail to meet the Hospital
percent of the amount by which the cost CCRs used to simulate the proposed CY OQR Program requirements, as we
exceeds 3.40 times the proposed APC 2020 OPPS outlier payments to proposed, we are continuing the policy
5853 payment rate. determine the fixed-dollar threshold. that we implemented in CY 2010 that
For further discussion of CMHC Specifically, for CY 2020, we proposed the hospitals’ costs will be compared to
outlier payments, we refer readers to to apply an adjustment factor of 0.97517 the reduced payments for purposes of
section VIII.C. of the CY 2020 OPPS/ to the CCRs that were in the April 2019 outlier eligibility and payment
ASC proposed rule and this final rule OPSF to trend them forward from CY calculation. For more information on
with comment period. 2019 to CY 2020. The methodology for the Hospital OQR Program, we referred
To ensure that the estimated CY 2020 calculating the proposed adjustment is readers to section XIV. of this final rule
aggregate outlier payments would equal discussed in the FY 2020 IPPS/LTCH with comment period.
1.0 percent of estimated aggregate total PPS proposed rule (84 FR 19597). We received no public comments on
payments under the OPPS, we proposed To model hospital outlier payments our proposal. Therefore, we are
that the hospital outlier threshold be set for the proposed rule, we applied the finalizing our proposal, without
so that outlier payments would be overall CCRs from the April 2019 OPSF modification, to continue our policy of
triggered when a hospital’s cost of after adjustment (using the proposed estimating outlier payments to be 1.0
furnishing a service exceeds 1.75 times CCR inflation adjustment factor of percent of the estimated aggregate total
the APC payment amount and exceeds 0.97517 to approximate CY 2020 CCRs) payments under the OPPS and to use
the APC payment amount plus $4,950. to charges on CY 2018 claims that were our established methodology to set the
We calculated the proposed fixed- adjusted (using the proposed charge OPPS outlier fixed-dollar loss threshold
dollar threshold of $4,950 using the inflation factor of 1.11189 to for CY 2020.
standard methodology most recently approximate CY 2020 charges). We
used for CY 2019 (83 FR 58874 through simulated aggregated CY 2020 hospital 3. Final Outlier Calculation
58875). For purposes of estimating outlier payments using these costs for Consistent with historical practice, we
outlier payments for the proposed rule, several different fixed-dollar thresholds, used updated data for this final rule
we used the hospital-specific overall holding the 1.75 multiplier threshold with comment period for outlier
ancillary CCRs available in the April constant and assuming that outlier calculations. For CY 2020, we are
2019 update to the Outpatient Provider- payments would continue to be made at applying the overall CCRs from the
Specific File (OPSF). The OPSF 50 percent of the amount by which the October 2019 OPSF file after adjustment
contains provider-specific data, such as cost of furnishing the service would (using the CCR inflation adjustment
the most current CCRs, which are exceed 1.75 times the APC payment factor of 0.97615 to approximate CY
maintained by the MACs and used by amount, until the total outlier payments 2020 CCRs) to charges on CY 2018
the OPPS Pricer to pay claims. The equaled 1.0 percent of aggregated claims that were adjusted using a charge
claims that we use to model each OPPS estimated total CY 2020 OPPS inflation factor of 1.11100 to
update lag by 2 years. payments. We estimated that a proposed approximate CY 2020 charges. These are
In order to estimate the CY 2020 fixed-dollar threshold of $4,950, the same CCR adjustment and charge
hospital outlier payments for the combined with the proposed multiplier inflation factors that were used to set
proposed rule, we inflated the charges threshold of 1.75 times the APC the IPPS fixed-dollar threshold for the
on the CY 2018 claims using the same payment rate, would allocate 1.0 FY 2020 IPPS/LTCH PPS final rule (84
inflation factor of 1.11189 that we used percent of aggregated total OPPS FR 42629). We simulated aggregated CY
to estimate the IPPS fixed-dollar outlier payments to outlier payments. For 2020 hospital outlier payments using
threshold for the FY 2020 IPPS/LTCH CMHCs, we proposed that, if a CMHC’s these costs for several different fixed-
PPS proposed rule (84 FR 19596). We cost for partial hospitalization services, dollar thresholds, holding the 1.75
used an inflation factor of 1.05446 to paid under APC 5853, exceeds 3.40 multiple-threshold constant and
estimate CY 2019 charges from the CY times the payment rate for APC 5853, assuming that outlier payments will
2018 charges reported on CY 2018 the outlier payment would be calculated continue to be made at 50 percent of the
claims. The methodology for as 50 percent of the amount by which amount by which the cost of furnishing
determining this charge inflation factor the cost exceeds 3.40 times the APC the service would exceed 1.75 times the
is discussed in the FY 2019 IPPS/LTCH 5853 payment rate. APC payment amount, until the total
PPS final rule (83 FR 41717 through Section 1833(t)(17)(A) of the Act, outlier payment equaled 1.0 percent of
41718). As we stated in the CY 2005 which applies to hospitals, as defined aggregated estimated total CY 2020
OPPS final rule with comment period under section 1886(d)(1)(B) of the Act, OPPS payments. We estimated that a
fixed-dollar threshold of $5,075 the payment reduction for hospitals that national unadjusted payment rate or the
combined with the multiple threshold fail to meet the requirements of the reduced national unadjusted payment
of 1.75 times the APC payment rate, will Hospital OQR Program, we refer readers rate, depending on whether the hospital
allocate the 1.0 percent of aggregated to section XIV of this final rule with met its Hospital OQR Program
total OPPS payments to outlier comment period. requirements to receive the full CY 2020
payments. In the CY 2020 OPPS/ASC proposed OPPS fee schedule increase factor.
For CMHCs, if a CMHC’s cost for rule (84 FR 39435), we demonstrated the Step 1. Calculate 60 percent (the
partial hospitalization services, paid steps used to determine the APC labor-related portion) of the national
under APC 5853, exceeds 3.40 times the payments that will be made in a CY unadjusted payment rate. Since the
payment rate the outlier payment will under the OPPS to a hospital that fulfills initial implementation of the OPPS, we
be calculated as 50 percent of the the Hospital OQR Program requirements have used 60 percent to represent our
amount by which the cost exceeds 3.40 and to a hospital that fails to meet the estimate of that portion of costs
times APC 5853. Hospital OQR Program requirements for attributable, on average, to labor. We
a service that has any of the following refer readers to the April 7, 2000 OPPS
H. Calculation of an Adjusted Medicare
status indicator assignments: ‘‘J1’’, ‘‘J2’’, final rule with comment period (65 FR
Payment From the National Unadjusted
‘‘P’’, ‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’, ‘‘Q4’’, ‘‘R’’, ‘‘S’’, 18496 through 18497) for a detailed
Medicare Payment
‘‘T’’, ‘‘U’’, or ‘‘V’’ (as defined in discussion of how we derived this
The basic methodology for Addendum D1 to the proposed rule, percentage. During our regression
determining prospective payment rates which is available via the internet on analysis for the payment adjustment for
for HOPD services under the OPPS is set the CMS website), in a circumstance in rural hospitals in the CY 2006 OPPS
forth in existing regulations at 42 CFR which the multiple procedure discount final rule with comment period (70 FR
part 419, subparts C and D. For this CY does not apply, the procedure is not 68553), we confirmed that this labor-
2020 OPPS/ASC final rule with bilateral, and conditionally packaged related share for hospital outpatient
comment period, the payment rate for services (status indicator of ‘‘Q1’’ and services is appropriate.
most services and procedures for which ‘‘Q2’’) qualify for separate payment. We The formula below is a mathematical
payment is made under the OPPS is the noted that, although blood and blood representation of Step 1 and identifies
product of the conversion factor products with status indicator ‘‘R’’ and the labor-related portion of a specific
calculated in accordance with section brachytherapy sources with status payment rate for a specific service.
II.B. of this final rule with comment indicator ‘‘U’’ are not subject to wage
period and the relative payment weight X is the labor-related portion of the
adjustment, they are subject to reduced national unadjusted payment rate.
determined under section II.A. of this payments when a hospital fails to meet
final rule with comment period. X = .60 * (national unadjusted payment
the Hospital OQR Program rate).
Therefore, the proposed national requirements.
unadjusted payment rate for most APCs We did not receive any public Step 2. Determine the wage index area
contained in Addendum A to this final comments on these steps under the in which the hospital is located and
rule with comment period (which is methodology that we included in the CY identify the wage index level that
available via the internet on the CMS 2020 CY OPPS/ASC proposed rule to applies to the specific hospital. We note
website) and for most HCPCS codes to determine the APC payments for CY that, under the CY 2020 OPPS policy for
which separate payment under the 2020. Therefore, we are using the steps continuing to use the OMB labor market
OPPS has been assigned in Addendum in the methodology specified below, as area delineations based on the 2010
B to this final rule with comment period we proposed, to demonstrate the Decennial Census data for the wage
(which is available via the internet on calculation of the final CY 2020 OPPS indexes used under the IPPS, a hold
the CMS website) was calculated by payments using the same parameters. harmless policy for the wage index may
multiplying the proposed CY 2020 Individual providers interested in apply, as discussed in section II.C. of
scaled weight for the APC by the CY calculating the payment amount that this final rule with comment period.
2020 conversion factor. they will receive for a specific service The wage index values assigned to each
We note that section 1833(t)(17) of the from the national unadjusted payment area reflect the geographic statistical
Act, which applies to hospitals, as rates presented in Addenda A and B to areas (which are based upon OMB
defined under section 1886(d)(1)(B) of this final rule with comment period standards) to which hospitals are
the Act, requires that hospitals that fail (which are available via the internet on assigned for FY 2020 under the IPPS,
to submit data required to be submitted the CMS website) should follow the reclassifications through the Medicare
on quality measures selected by the formulas presented in the following Geographic Classification Review Board
Secretary, in the form and manner and steps. For purposes of the payment (MGCRB), section 1886(d)(8)(B) ‘‘Lugar’’
at a time specified by the Secretary, calculations below, we refer to the hospitals, reclassifications under section
incur a reduction of 2.0 percentage national unadjusted payment rate for 1886(d)(8)(E) of the Act, as defined in
points to their OPD fee schedule hospitals that meet the requirements of § 412.103 of the regulations, and
increase factor, that is, the annual the Hospital OQR Program as the ‘‘full’’ hospitals designated as urban under
payment update factor. The application national unadjusted payment rate. We section 601(g) of Public Law 98–21. For
of a reduced OPD fee schedule increase refer to the national unadjusted further discussion of the changes to the
factor results in reduced national payment rate for hospitals that fail to FY 2020 IPPS wage indexes, as applied
unadjusted payment rates that apply to meet the requirements of the Hospital to the CY 2020 OPPS, we refer readers
certain outpatient items and services OQR Program as the ‘‘reduced’’ national to section II.C. of this final rule with
provided by hospitals that are required unadjusted payment rate. The reduced comment period. We are continuing to
to report outpatient quality data and national unadjusted payment rate is apply a wage index floor of 1.00 to
that fail to meet the Hospital OQR calculated by multiplying the reporting frontier States, in accordance with
Program (formerly referred to as the ratio of 0.980 times the ‘‘full’’ national section 10324 of the Affordable Care Act
Hospital Outpatient Quality Data unadjusted payment rate. The national of 2010.
Reporting Program (HOP QDRP)) unadjusted payment rate used in the Step 3. Adjust the wage index of
requirements. For further discussion of calculations below is either the full hospitals located in certain qualifying
counties that have a relatively high adjusted payment rate by 1.071 to covered OPD service (or group of such
percentage of hospital employees who calculate the total payment. services) furnished in a year in a
reside in the county, but who work in The formula below is a mathematical manner so that the effective copayment
a different county with a higher wage representation of Step 6 and applies the rate (determined on a national
index, in accordance with section 505 of rural adjustment for rural SCHs. unadjusted basis) for that service in the
Public Law 108–173. Addendum L to Adjusted Medicare Payment (SCH or year does not exceed a specified
this final rule with comment period EACH) = Adjusted Medicare percentage. As specified in section
(which is available via the internet on Payment * 1.071. 1833(t)(8)(C)(ii)(V) of the Act, the
the CMS website) contains the We are providing examples below of effective copayment rate for a covered
qualifying counties and the associated the calculation of both the full and OPD service paid under the OPPS in CY
wage index increase developed for the reduced national unadjusted payment 2006, and in CYs thereafter, shall not
proposed FY 2020 IPPS, which are rates that will apply to certain exceed 40 percent of the APC payment
listed in Table 2 associated with the FY outpatient items and services performed rate.
2020 IPPS/LTCH PPS proposed rule and by hospitals that meet and that fail to Section 1833(t)(3)(B)(ii) of the Act
available via the internet on the CMS meet the Hospital OQR Program provides that, for a covered OPD service
website at: http://www.cms.gov/ requirements, using the steps outlined (or group of such services) furnished in
Medicare/Medicare-Fee-for-Service- above. For purposes of this example, we a year, the national unadjusted
Payment/AcuteInpatientPPS/ are using a provider that is located in copayment amount cannot be less than
index.html. (Click on the link on the left Brooklyn, New York that is assigned to 20 percent of the OPD fee schedule
side of the screen titled ‘‘FY 2020 IPPS CBSA 35614. This provider bills one amount. However, section
Proposed Rule Home Page’’ and select service that is assigned to APC 5071 1833(t)(8)(C)(i) of the Act limits the
‘‘FY 2020 Proposed Rule Tables.’’) This (Level 1 Excision/Biopsy/Incision and amount of beneficiary copayment that
step is to be followed only if the Drainage). The CY 2020 full national may be collected for a procedure
hospital is not reclassified or unadjusted payment rate for APC 5071 (including items such as drugs and
redesignated under section 1886(d)(8) or is $609.94. The reduced national biologicals) performed in a year to the
section 1886(d)(10) of the Act. unadjusted payment rate for APC 5071 amount of the inpatient hospital
Step 4. Multiply the applicable wage for a hospital that fails to meet the deductible for that year.
Hospital OQR Program requirements is Section 4104 of the Affordable Care
index determined under Steps 2 and 3
$598.35. This reduced rate is calculated Act eliminated the Medicare Part B
by the amount determined under Step 1
by multiplying the reporting ratio of coinsurance for preventive services
that represents the labor-related portion
0.981 by the full unadjusted payment furnished on and after January 1, 2011,
of the national unadjusted payment rate.
that meet certain requirements,
The formula below is a mathematical rate for APC 5071.
The FY 2020 wage index for a including flexible sigmoidoscopies and
representation of Step 4 and adjusts the screening colonoscopies, and waived
labor-related portion of the national provider located in CBSA 35614 in New
York, which includes the proposed the Part B deductible for screening
unadjusted payment rate for the specific colonoscopies that become diagnostic
service by the wage index. adoption of IPPS 2020 wage index
policies, is 1.2866. The labor-related during the procedure. Our discussion of
Xa is the labor-related portion of the the changes made by the Affordable
national unadjusted payment rate portion of the full national unadjusted
payment is approximately $470.84 (.60 Care Act with regard to copayments for
(wage adjusted). preventive services furnished on and
Xa = .60 * (national unadjusted payment * $609.94 * 1.2866). The labor-related
after January 1, 2011, may be found in
rate) * applicable wage index. portion of the reduced national
section XII.B. of the CY 2011 OPPS/ASC
unadjusted payment is approximately
Step 5. Calculate 40 percent (the final rule with comment period (75 FR
$461.90 (.60 * $598.35 * 1.2866). The
nonlabor-related portion) of the national 72013).
nonlabor-related portion of the full
unadjusted payment rate and add that national unadjusted payment is 2. OPPS Copayment Policy
amount to the resulting product of Step approximately $243.98 (.40 * $609.94).
4. The result is the wage index adjusted In the CY 2020 OPPS/ASC proposed
The nonlabor-related portion of the rule (84 FR 39437), we proposed to
payment rate for the relevant wage reduced national unadjusted payment is
index area. determine copayment amounts for new
approximately $239.34 (.40 * $598.35). and revised APCs using the same
The formula below is a mathematical The sum of the labor-related and
representation of Step 5 and calculates methodology that we implemented
nonlabor-related portions of the full beginning in CY 2004. (We refer readers
the remaining portion of the national national adjusted payment is
payment rate, the amount not to the November 7, 2003 OPPS final rule
approximately $714.82 ($470.84 + with comment period (68 FR 63458).) In
attributable to labor, and the adjusted $243.98). The sum of the portions of the
payment for the specific service. addition, we proposed to use the same
reduced national adjusted payment is standard rounding principles that we
Y is the nonlabor-related portion of the approximately $701.24 ($461.90 + have historically used in instances
national unadjusted payment rate. $239.34). where the application of our standard
Y = .40 * (national unadjusted payment copayment methodology would result in
I. Beneficiary Copayments
rate). a copayment amount that is less than 20
Adjusted Medicare Payment = Y + Xa. 1. Background percent and cannot be rounded, under
Step 6. If a provider is an SCH, as set Section 1833(t)(3)(B) of the Act standard rounding principles, to 20
forth in the regulations at § 412.92, or an requires the Secretary to set rules for percent. (We refer readers to the CY
EACH, which is considered to be an determining the unadjusted copayment 2008 OPPS/ASC final rule with
SCH under section 1886(d)(5)(D)(iii)(III) amounts to be paid by beneficiaries for comment period (72 FR 66687) in which
of the Act, and located in a rural area, covered OPD services. Section we discuss our rationale for applying
as defined in § 412.64(b), or is treated as 1833(t)(8)(C)(ii) of the Act specifies that these rounding principles.) The
being located in a rural area under the Secretary must reduce the national proposed national unadjusted
§ 412.103, multiply the wage index unadjusted copayment amount for a copayment amounts for services payable
under the OPPS that would be effective amount remains constant (unless the requirements should follow the
January 1, 2020 are included in resulting coinsurance percentage is less formulas presented in the following
Addenda A and B to the proposed rule than 20 percent). steps.
(which are available via the internet on • If no codes are added to or removed Step 1. Calculate the beneficiary
the CMS website). from an APC and, after recalibration of payment percentage for the APC by
We did not receive any public its relative payment weight, the new dividing the APC’s national unadjusted
comments on the proposed copayment payment rate is less than the prior year’s copayment by its payment rate. For
amounts for new and revised APCs rate, the copayment amount is example, using APC 5071, $121.99 is
using the same methodology we calculated as the product of the new approximately 20 percent of the full
implemented beginning in CY 2004 or payment rate and the prior year’s national unadjusted payment rate of
the standard rounding principles we coinsurance percentage. $609.94. For APCs with only a
apply to our copayment amounts. • If HCPCS codes are added to or minimum unadjusted copayment in
Therefore, we are finalizing our deleted from an APC and, after Addenda A and B to this final rule with
proposed copayment policies, without recalibrating its relative payment comment period (which are available
modification. weight, holding its unadjusted via the internet on the CMS website),
As discussed in section XIV.E. of the copayment amount constant results in a the beneficiary payment percentage is
CY 2020 OPPS/ASC proposed rule and decrease in the coinsurance percentage 20 percent.
this final rule with comment period, for for the reconfigured APC, the The formula below is a mathematical
CY 2020, the Medicare beneficiary’s copayment amount would not change representation of Step 1 and calculates
minimum unadjusted copayment and (unless retaining the copayment amount the national copayment as a percentage
national unadjusted copayment for a would result in a coinsurance rate less of national payment for a given service.
service to which a reduced national than 20 percent).
• If HCPCS codes are added to an B is the beneficiary payment percentage.
unadjusted payment rate applies will
APC and, after recalibrating its relative B = National unadjusted copayment for
equal the product of the reporting ratio
payment weight, holding its unadjusted APC/national unadjusted payment
and the national unadjusted copayment,
copayment amount constant results in rate for APC.
or the product of the reporting ratio and
the minimum unadjusted copayment, an increase in the coinsurance Step 2. Calculate the appropriate
respectively, for the service. percentage for the reconfigured APC, the wage-adjusted payment rate for the APC
We note that OPPS copayments may copayment amount would be calculated for the provider in question, as
increase or decrease each year based on as the product of the payment rate of the indicated in Steps 2 through 4 under
changes in the calculated APC payment reconfigured APC and the lowest section II.H. of this final rule with
rates, due to updated cost report and coinsurance percentage of the codes comment period. Calculate the rural
claims data, and any changes to the being added to the reconfigured APC. adjustment for eligible providers, as
OPPS cost modeling process. However, We noted in the CY 2004 OPPS final indicated in Step 6 under section II.H.
as described in the CY 2004 OPPS final rule with comment period that we of this final rule with comment period.
rule with comment period, the would seek to lower the copayment Step 3. Multiply the percentage
development of the copayment percentage for a service in an APC from calculated in Step 1 by the payment rate
methodology generally moves the prior year if the copayment calculated in Step 2. The result is the
beneficiary copayments closer to 20 percentage was greater than 20 percent. wage-adjusted copayment amount for
percent of OPPS APC payments (68 FR We noted that this principle was the APC.
63458 through 63459). consistent with section 1833(t)(8)(C)(ii) The formula below is a mathematical
In the CY 2004 OPPS final rule with of the Act, which accelerates the representation of Step 3 and applies the
comment period (68 FR 63459), we reduction in the national unadjusted beneficiary payment percentage to the
adopted a new methodology to calculate coinsurance rate so that beneficiary adjusted payment rate for a service
unadjusted copayment amounts in liability will eventually equal 20 calculated under section II.H. of this
situations including reorganizing APCs, percent of the OPPS payment rate for all final rule with comment period, with
and we finalized the following rules to OPPS services to which a copayment and without the rural adjustment, to
determine copayment amounts in CY applies, and with section 1833(t)(3)(B) calculate the adjusted beneficiary
2004 and subsequent years. of the Act, which achieves a 20-percent copayment for a given service.
• When an APC group consists solely copayment percentage when fully Wage-adjusted copayment amount for
of HCPCS codes that were not paid phased in and gives the Secretary the the APC = Adjusted Medicare Payment
under the OPPS the prior year because authority to set rules for determining * B.
they were packaged or excluded or are copayment amounts for new services. Wage-adjusted copayment amount for
new codes, the unadjusted copayment We further noted that the use of this the APC (SCH or EACH) = (Adjusted
amount would be 20 percent of the APC methodology would, in general, reduce Medicare Payment * 1.071) * B.
payment rate. the beneficiary coinsurance rate and Step 4. For a hospital that failed to
• If a new APC that did not exist copayment amount for APCs for which meet its Hospital OQR Program
during the prior year is created and the payment rate changes as the result requirements, multiply the copayment
consists of HCPCS codes previously of the reconfiguration of APCs and/or calculated in Step 3 by the reporting
assigned to other APCs, the copayment recalibration of relative payment ratio of 0.980.
amount is calculated as the product of weights (68 FR 63459). The proposed unadjusted copayments
the APC payment rate and the lowest for services payable under the OPPS
coinsurance percentage of the codes 3. Calculation of an Adjusted that will be effective January 1, 2020,
comprising the new APC. Copayment Amount for an APC Group are shown in Addenda A and B to this
• If no codes are added to or removed Individuals interested in calculating final rule with comment period (which
from an APC and, after recalibration of the national copayment liability for a are available via the internet on the
its relative payment weight, the new Medicare beneficiary for a given service CMS website). We note that the national
payment rate is equal to or greater than provided by a hospital that met or failed unadjusted payment rates and
the prior year’s rate, the copayment to meet its Hospital OQR Program copayment rates shown in Addenda A
and B to this final rule with comment supplies, temporary surgical various status indicators used under the
period reflect the CY 2020 OPD fee procedures, and medical services not OPPS. We also provide a complete list
schedule increase factor discussed in described by CPT codes. of the status indicators and their
section II.B. of this final rule with CPT codes are established by the definitions in Addendum D1 to this CY
comment period. American Medical Association (AMA) 2020 OPPS/ASC final rule with
In addition, as noted earlier, section while the Level II HCPCS codes are comment period.
1833(t)(8)(C)(i) of the Act limits the established by the CMS HCPCS
Workgroup. These codes are updated 1. HCPCS Codes That Were Effective
amount of beneficiary copayment that
and changed throughout the year. CPT April 1, 2019 for Which We Solicited
may be collected for a procedure
and Level II HCPCS code changes that Public Comments in the CY 2020 OPPS/
performed in a year to the amount of the
affect the OPPS are published through ASC Proposed Rule
inpatient hospital deductible for that
year. the annual rulemaking cycle and For the April 2019 update, there were
through the OPPS quarterly update no new CPT codes. However, eight new
III. OPPS Ambulatory Payment Change Requests (CRs). Generally, these
Classification (APC) Group Policies Level II HCPCS codes were established
code changes are effective January 1, and made effective on April 1, 2019.
A. OPPS Treatment of New and Revised April 1, July 1, or October 1. CPT code These codes and their long descriptors
HCPCS Codes changes are released by the AMA via were displayed in Table 7 of the
their website while Level II HCPCS code proposed rule and are now listed in
Payment for OPPS procedures, changes are released to the public via
services, and items are generally based Table 8 of this final rule with comment
the CMS HCPCS website. CMS period. Through the April 2019 OPPS
on medical billing codes, specifically, recognizes the release of new CPT and
HCPCS codes, that are reported on quarterly update CR (Transmittal 4255,
Level II HCPCS codes and makes the Change Request 11216, dated March 15,
HOPD claims. The HCPCS is divided codes effective (that is, the codes can be
into two principal subsystems, referred 2019), we recognized several new Level
reported on Medicare claims) outside of
to as Level I and Level II of the HCPCS. II HCPCS codes for separate payment
the formal rulemaking process via OPPS
Level I is comprised of CPT (Current under the OPPS. In the CY 2020 OPPS/
quarterly update CRs. Based on our
Procedural Terminology), a numeric and ASC proposed rule (84 FR 39531–
review, we assign the new codes to
alphanumeric coding system 39532), we solicited public comments
interim status indicators (SIs) and APCs.
maintained by the American Medical on the proposed APC and status
These interim assignments are finalized
Association (AMA), and consist of indicator assignments for these Level II
in the OPPS/ASC final rules. This
Category I, II, and III CPT codes. Level HCPCS codes, which were listed in
quarterly process offers hospitals access
II, which is maintained by CMS, is a Table 7 of the proposed rule.
to codes that more accurately describe
standardized coding system that is used items or services furnished and provides We did not receive any public
primarily to identify products, supplies, payment for these items or services in comments on the proposed OPPS APC
and services not included in the CPT a timelier manner than if we waited for and status indicator assignments for the
codes. HCPCS codes are used to report the annual rulemaking process. We new Level II HCPCS codes implemented
surgical procedures, medical services, solicit public comments on the new CPT in April 2019. Therefore, we are
items, and supplies under the hospital and Level II HCPCS codes and finalize finalizing the proposed APC and status
OPPS. Specifically, CMS recognizes the our proposals through our annual indicator assignments for these codes, as
following codes on OPPS claims: rulemaking process. indicated in Table 8 below. We note that
• Category I CPT codes, which We note that, under the OPPS, the several of the HCPCS C-codes have been
describe surgical procedures, diagnostic APC assignment determines the replaced with HCPCS J-codes, effective
and therapeutic services, and vaccine payment rate for an item, procedure, or January 1, 2020. Their replacement
codes; service. Those items, procedures, or codes are listed in Table 8. The final
• Category III CPT codes, which services not paid separately under the payment rates for these codes can be
describe new and emerging hospital OPPS are assigned to found in Addendum B to this final rule
technologies, services, and procedures; appropriate status indicators. Certain with comment period. In addition, the
and payment status indicators provide status indicator definitions can be found
• Level II HCPCS codes (also known separate payment while other payment in Addendum D1 to this final rule with
as alphanumeric codes), which are used status indicators do not. In section XI. comment period. Both Addendum B
primarily to identify drugs, devices, (CY 2020 OPPS Payment Status and and Addendum D1 are available via the
ambulance services, durable medical Comment Indicators) of this final rule internet on the CMS website.
equipment, orthotics, prosthetics, with comment period, we discuss the BILLING CODE 4120–01–P
BILLING CODE 4120–01–C status indicator assignments for the July

public comments on the proposed APC
2. HCPCS Codes That Were Effective and status indicator assignments for the 2019 codes, including the eight codes
July 1, 2019 for Which We Solicited codes implemented on July 1, 2019, all on which we received public comments,
Public Comments in the CY 2020 OPPS/ of which were listed in Table 8 of the as indicated in Table 9 below. We note
ASC Proposed Rule proposed rule. that several of the HCPCS C-codes have
For the July 2019 update, 58 new We received some public comments been replaced with HCPCS J-codes,
codes were established and made related to CPT codes 0546T, 0548T, effective January 1, 2020. Their
effective July 1, 2019. The codes and 0549T, 0554T, 0555T, 0556T, 0557T, replacement codes are listed in Table 9.
long descriptors were listed in Table 8 and 0558T, which we address in section The final payment rates for the codes
of the proposed rule. Through the July III.D. (OPPS APC-Specific Policies) of can be found in Addendum B to this
2019 OPPS quarterly update CR this final rule with comment period. final rule with comment period. In
(Transmittal 4313, Change Request With the exception of the eight codes, addition, the status indicator meanings
11318, dated May 24, 2019), we we did not receive any public comments can be found in Addendum D1 to this
recognized several new codes for on the proposed OPPS APC and status final rule with comment period. Both
separate payment and assigned them to indicator assignments for the other new Addendum B and Addendum D1 are
appropriate interim OPPS status CPT and Level II HCPCS codes available via the internet on the CMS
indicators and APCs. In the CY 2020 implemented in July 2019. Therefore, website.
OPPS/ASC proposed rule, we solicited we are finalizing the proposed APC and BILLING CODE 4120–01–P
ER12NO19.013</GPH>
ER12NO19.014</GPH>
ER12NO19.015</GPH>
ER12NO19.016</GPH>
ER12NO19.017</GPH>
ER12NO19.018</GPH>
ER12NO19.019</GPH>
ER12NO19.020</GPH>
BILLING CODE 4120–01–C quarterly update CRs and via the CMS ASC final rule with comment period for
3. October 2019 HCPCS Codes for HCPCS website (for Level II HCPCS the next year’s OPPS/ASC update.
Which We Are Soliciting Public codes). For CY 2020, these codes are In the CY 2020 OPPS/ASC proposed
Comments in This CY 2020 OPPS/ASC flagged with comment indicator ‘‘NI’’ in rule (84 FR 39449), we proposed to
Final Rule With Comment Period Addendum B to this OPPS/ASC final continue this process for CY 2020.
rule with comment period to indicate Specifically, for CY 2020, we proposed
As has been our practice in the past,
that we are assigning them an interim to include in Addendum B to the CY
we incorporate those new HCPCS codes
that are effective October 1 in the final payment status which is subject to 2020 OPPS/ASC final rule with
rule with comment period, thereby public comment. Specifically, the comment period the new HCPCS codes
updating the OPPS for the following interim status indicator and APC effective October 1, 2019, that would be
calendar year, as displayed in Table 9 of assignments for codes flagged with incorporated in the October 2019 OPPS
the proposed rule and reprinted as comment indicator ‘‘NI’’ are open to quarterly update CR. Also, as stated
Table 10 of this final rule with comment public comment in this final rule with above, the October 1, 2019 codes are
period. These codes are released to the comment period, and we will respond flagged with comment indicator ‘‘NI’’ in
to these public comments in the OPPS/
ER12NO19.021</GPH>
public through the October OPPS Addendum B to this CY 2020 OPPS/
ASC final rule with comment period to b. CPT Codes for Which We Solicited codes were included in Addendum B to
indicate that we have assigned the codes Public Comments in the CY 2020 OPPS/ the proposed rule (which is available
an interim OPPS payment status for CY ASC Proposed Rule via the internet on the CMS website).
2020. We are inviting public comments For CY 2020, we received the CY 2020 We noted in the proposed rule that the
on the interim status indicator and APC CPT code updates that would be new and revised codes are assigned to
assignments for these codes, if effective January 1, 2020, from AMA in new comment indicator ‘‘NP’’ to
applicable, that will be finalized in the time for inclusion in the CY 2020 OPPS/ indicate that the code is new for the
CY 2021 OPPS/ASC final rule with ASC proposed rule. We note that in the next calendar year or the code is an
comment period. CY 2015 OPPS/ASC final rule with existing code with substantial revision
We note that we received a comment comment period (79 FR 66841 through to its code descriptor in the next
related to HCPCS code Q4184 (Cellesta 66844), we finalized a revised process of calendar year as compared to current
or Cellesta Duo, per square centimeter), assigning APC and status indicators for calendar year with a proposed APC
which was assigned to comment new and revised Category I and III CPT assignment, and that comments will be
indicator ‘‘NI’’ in Addendum B of the codes that would be effective January 1. accepted on the proposed APC and
CY 2019 OPPS/ASC final rule. The Specifically, for the new/revised CPT status indicator assignments.
comment and our response can be found Further, we reminded readers that the
codes that we receive in a timely
in section V.B.7 (Skin Substitutes) of CPT code descriptors that appear in
manner from the AMA’s CPT Editorial
this CY 2020 OPPS/ASC final rule with Addendum B are short descriptors and
Panel, we finalized our proposal to
comment period. do not accurately describe the complete
include the codes that would be
procedure, service, or item described by
4. January 2020 HCPCS Codes effective January 1 in the OPPS/ASC the CPT code. Therefore, we included
proposed rules, along with proposed the 5-digit placeholder codes and their
a. New Level II HCPCS Codes for Which APC and status indicator assignments
We Are Soliciting Public Comments in long descriptors for the new and revised
for them, and to finalize the APC and CY 2020 CPT codes in Addendum O to
This CY 2020 OPPS/ASC Final Rule status indicator assignments in the
With Comment Period the proposed rule (which is available
OPPS/ASC final rules beginning with via the internet on the CMS website) so
As shown in Table 10 below, and as the CY 2016 OPPS update. For those that the public could adequately
stated in the CY 2020 OPPS/ASC new/revised CPT codes that were comment on the proposed APCs and
proposed rule (84 FR 39449), consistent received too late for inclusion in the status indicator assignments. The 5-digit
with past practice, we solicit comments OPPS/ASC proposed rule, we finalized placeholder codes were included in
on the new Level II HCPCS codes that our proposal to establish and use Addendum O, specifically under the
will be effective January 1 in the OPPS/ HCPCS G-codes that mirror the column labeled ‘‘CY 2020 OPPS/ASC
ASC final rule with comment period, predecessor CPT codes and retain the Proposed Rule 5-Digit AMA Placeholder
thereby allowing us to finalize the status current APC and status indicator Code,’’ to the proposed rule. We noted
indicators and APC assignments for the assignments for a year until we can that the final CPT code numbers will be
codes in the next OPPS/ASC final rule propose APC and status indicator included in this CY 2020 OPPS/ASC
with comment period. Unlike the CPT assignments in the following year’s final rule with comment period. We also
codes that are effective January 1 and rulemaking cycle. We note that even if noted that not every code listed in
are included in the OPPS/ASC proposed we find that we need to create HCPCS Addendum O is subject to public
rules, most Level II HCPCS codes are G-codes in place of certain CPT codes comment. For the new and revised
not released until sometime around for the PFS proposed rule, we do not Category I and III CPT codes, we
November to be effective January 1. anticipate that these HCPCS G-codes requested public comments on only
Because these codes are not available will always be necessary for OPPS those codes that are assigned to
until November, we are unable to purposes. We will make every effort to comment indicator ‘‘NP’’.
include them in the OPPS/ASC include proposed APC and status In summary, in the CY 2020 OPPS/
proposed rules. Consequently, for CY indicator assignments for all new and ASC proposed rule, we solicited public
2020, we proposed to include in revised CPT codes that the AMA makes comments on the proposed CY 2020
Addendum B to the CY 2020 OPPS/ASC publicly available in time for us to status indicator and APC assignments
final rule with comment period the new include them in the annual proposed for the new and revised Category I and
Level II HCPCS codes effective January rule, and to avoid the resort to HCPCS III CPT codes that will be effective
1, 2020, that would be incorporated in G-codes and the resulting delay in January 1, 2020. The CPT codes were
the January 2020 OPPS quarterly update utilization of the most current CPT listed in Addendum B to the proposed
CR. These codes will be released to the codes. Also, we finalized our proposal rule with short descriptors only. We
public through the January OPPS to make interim APC and status listed them again in Addendum O to the
quarterly update CRs and via the CMS indicator assignments for CPT codes proposed rule with long descriptors. We
HCPCS website (for Level II HCPCS that are not available in time for the also proposed to finalize the status
codes). For CY 2020, the Level II HCPCS proposed rule and that describe wholly indicator and APC assignments for these
codes effective January 1, 2020 codes new services (such as new technologies codes (with their final CPT code
are flagged with comment indicator or new surgical procedures), solicit numbers) in the CY 2020 OPPS/ASC
‘‘NI’’ in Addendum B to this CY 2020 public comments, and finalize the final rule with comment period. The
OPPS/ASC final rule with comment specific APC and status indicator proposed status indicator and APC
period to indicate that we have assigned assignments for those codes in the assignments for these codes were
the codes an interim OPPS payment following year’s final rule. included in Addendum B to the
status for CY 2020. We are inviting As stated above, for the CY 2020 proposed rule (which is available via
public comments on the interim status OPPS update, we received the CY 2020 the internet on the CMS website).
indicator and APC assignments for these CPT codes from AMA in time for Commenters addressed several of the
codes, if applicable, that will be inclusion in the CY 2020 OPPS/ASC new CPT codes that were assigned to
finalized in the CY 2021 OPPS/ASC proposed rule. The new, revised, and comment indicator ‘‘NP’’ in Addendum
final rule with comment period. deleted CY 2020 Category I and III CPT B to the CY 2020 OPPS/ASC proposed
rule. We have responded to those public January 1, 2020 can be found in Finally, Table 10 below, which is a
comments in sections III.D. (OPPS APC- Addendum B to this final rule with reprint of Table 9 from the CY 2020
Specific Policies), IV.B. (Device- comment period. In addition, the status OPPS/ASC proposed rule, shows the
Intensive Procedures) and XII. (Updates indicator meanings can be found in comment timeframe for new and revised
to the ASC Payment System) of this CY Addendum D1 (OPPS Payment Status HCPCS codes. The table provides
2020OPPS/ASC final rule with Indicators for CY 2020) to this final rule information on our current process for
comment period. with comment period. Both Addendum updating codes through our OPPS
The final status indicators, APC B and D1 are available via the internet quarterly update CRs, seeking public
assignments, and payment rates for the on the CMS website. comments, and finalizing the treatment
new CPT codes that are effective of these codes under the OPPS.
B. OPPS Changes—Variations Within Classifications (APCs), as set forth in We have packaged into the payment
APCs regulations at 42 CFR 419.31. We use for each procedure or service within an
Level I (also known as CPT codes) and APC group the costs associated with
1. Background
Level II HCPCS codes (also known as those items and services that are
Section 1833(t)(2)(A) of the Act alphanumeric codes) to identify and typically ancillary and supportive to a
requires the Secretary to develop a group the services within each APC. primary diagnostic or therapeutic
classification system for covered The APCs are organized such that each modality and, in those cases, are an
hospital outpatient department services. group is homogeneous both clinically integral part of the primary service they
Section 1833(t)(2)(B) of the Act provides and in terms of resource use. Using this support. Therefore, we do not make
that the Secretary may establish groups classification system, we have separate payment for these packaged
of covered OPD services within this established distinct groups of similar items or services. In general, packaged
classification system, so that services services. We also have developed items and services include, but are not
classified within each group are separate APC groups for certain medical limited to, the items and services listed
comparable clinically and with respect devices, drugs, biologicals, therapeutic in regulations at 42 CFR 419.2(b). A
to the use of resources. In accordance radiopharmaceuticals, and
further discussion of packaged services
with these provisions, we developed a brachytherapy devices that are not
is included in section II.A.3. of this final
grouping classification system, referred packaged into the payment for the
rule with comment period.
ER12NO19.022</GPH>
to as Ambulatory Payment procedure.
Under the OPPS, we generally pay for on the number of claims. We note that, OPPS Addendum B Update (available
covered hospital outpatient services on for purposes of identifying significant via the internet on the CMS website at:
a rate-per-service basis, where the procedure codes for examination under https://www.cms.gov/Medicare/
service may be reported with one or the 2 times rule, we consider procedure Medicare-Fee-for-Service-Payment/
more HCPCS codes. Payment varies codes that have more than 1,000 single HospitalOutpatientPPS/Addendum-A-
according to the APC group to which major claims or procedure codes that and-Addendum-B-Updates.html), which
the independent service or combination both have more than 99 single major was the latest payment rate file for 2019
of services is assigned. In the CY 2020 claims and contribute at least 2 percent prior to issuance of the proposed rule.
OPPS/ASC proposed rule (84 FR 39451– of the single major claims used to
39452), for CY 2020, we proposed that 3. APC Exceptions to the 2 Times Rule
establish the APC cost to be significant
each APC relative payment weight (75 FR 71832). This longstanding Taking into account the APC changes
represents the hospital cost of the definition of when a procedure code is that we proposed to make for CY 2020
services included in that APC, relative significant for purposes of the 2 times in the CY 2020 OPPS/ASC proposed
to the hospital cost of the services rule was selected because we believe rule, we reviewed all of the APCs to
included in APC 5012 (Clinic Visits and that a subset of 1,000 or fewer claims is determine which APCs would not meet
Related Services). The APC relative negligible within the set of the requirements of the 2 times rule. We
payment weights are scaled to APC 5012 approximately 100 million single used the following criteria to evaluate
because it is the hospital clinic visit procedure or single session claims we whether to propose exceptions to the 2
APC and clinic visits are among the use for establishing costs. Similarly, a times rule for affected APCs:
most frequently furnished services in procedure code for which there are • Resource homogeneity;
the hospital outpatient setting. fewer than 99 single claims and that • Clinical homogeneity;
comprises less than 2 percent of the • Hospital outpatient setting
2. Application of the 2 Times Rule utilization;
single major claims within an APC will
Section 1833(t)(9)(A) of the Act • Frequency of service (volume); and
have a negligible impact on the APC • Opportunity for upcoding and code
requires the Secretary to review, not less cost (75 FR 71832). In the CY 2020
often than annually, and revise the APC fragments.
OPPS/ASC proposed rule (84 FR 39451 Based on the CY 2018 claims data
groups, the relative payment weights, through 39452), for CY 2020, we
and the wage and other adjustments available for the CY 2020 proposed rule,
proposed to make exceptions to this we found 18 APCs with violations of the
described in paragraph (2) to take into limit on the variation of costs within
account changes in medical practice, 2 times rule. We applied the criteria as
each APC group in unusual cases, such described above to identify the APCs for
changes in technology, the addition of
as for certain low-volume items and which we proposed to make exceptions
new services, new cost data, and other
services. under the 2 times rule for CY 2020, and
relevant information and factors.
Section 1833(t)(9)(A) of the Act also In the CY 2020 OPPS/ASC proposed found that all of the 18 APCs we
requires the Secretary to consult with an rule, we identified the APCs with identified met the criteria for an
expert outside advisory panel composed violations of the 2 times rule. Therefore, exception to the 2 times rule based on
of an appropriate selection of we proposed changes to the procedure the CY 2018 claims data available for
representatives of providers to review codes assigned to these APCs in the proposed rule. We did not include
(and advise the Secretary concerning) Addendum B to the proposed rule. We in that determination those APCs where
the clinical integrity of the APC groups noted that Addendum B does not appear a 2 times rule violation was not a
and the relative payment weights. We in the printed version of the Federal relevant concept, such as APC 5401
note that the HOP Panel Register as part of the CY 2020 OPPS/ (Dialysis), which only has two HCPCS
recommendations for specific services ASC proposed rule. Rather, it is codes assigned to it that have a similar
for the CY 2020 OPPS update are published and made available via the geometric mean costs and do not create
discussed in the relevant specific internet on the CMS website at: https:// a 2 time rule violation. Therefore, we
sections throughout this CY 2020 OPPS/ www.cms.gov/Medicare/Medicare-Fee- only identified those APCs, including
ASC final rule with comment period. for-Service-Payment/ those with criteria-based costs, such as
In addition, section 1833(t)(2) of the HospitalOutpatientPPS/index.html. To device-dependent CPT/HCPCS codes,
Act provides that, subject to certain eliminate a violation of the 2 times rule with violations of the 2 times rule.
exceptions, the items and services and improve clinical and resource We note that, for cases in which a
within an APC group cannot be homogeneity, we proposed to reassign recommendation by the HOP Panel
considered comparable with respect to these procedure codes to new APCs that appears to result in or allow a violation
the use of resources if the highest cost contain services that are similar with of the 2 times rule, we may accept the
for an item or service in the group is regard to both their clinical and HOP Panel’s recommendation because
more than 2 times greater than the resource characteristics. In many cases, those recommendations are based on
lowest cost for an item or service within the proposed procedure code explicit consideration (that is, a review
the same group (referred to as the ‘‘2 reassignments and associated APC of the latest OPPS claims data and group
times rule’’). The statute authorizes the reconfigurations for CY 2020 included discussion of the issue) of resource use,
Secretary to make exceptions to the 2 in the proposed rule were related to clinical homogeneity, site of service,
times rule in unusual cases, such as changes in costs of services that were and the quality of the claims data used
low-volume items and services (but the observed in the CY 2018 claims data to determine the APC payment rates.
Secretary may not make such an newly available for CY 2020 ratesetting. Table 10 of the proposed rule listed
exception in the case of a drug or Addendum B to the CY 2020 OPPS/ASC the 18 APCs that we proposed to make
biological that has been designated as an proposed rule identified with a an exception for under the 2 times rule
orphan drug under section 526 of the comment indicator ‘‘CH’’ those for CY 2020 based on the criteria cited
Federal Food, Drug, and Cosmetic Act). procedure codes for which we proposed above and claims data submitted
In determining the APCs with a 2 times a change to the APC assignment or between January 1, 2018, and December
rule violation, we consider only those status indicator, or both, that were 31, 2018, and processed on or before
HCPCS codes that are significant based initially assigned in the July 1, 2019 December 31, 2018. In the proposed
rule, we stated that for the final rule • APC 5522 (Level 2 Imaging without 2018 costs from hospital claims and cost
with comment period, we intend to use Contrast); report data available for this CY 2020
claims data for dates of service between • APC 5523 (Level 3 Imaging without final rule with comment period, we are
January 1, 2018, and December 31, 2018, Contrast); finalizing our proposals with some
that were processed on or before June • APC 5524 (Level 4 Imaging without modifications. Specifically, we are
30, 2019, and updated CCRs, if Contrast); finalizing our proposal to except 16 of
available. • APC 5571 (Level 1 Imaging with the 18 proposed APCs from the 2 times
Based on the updated final rule CY Contrast) rule for CY 2020 and also excepting one
2018 claims data used for this CY 2020 • APC 5612 (Level 2 Therapeutic additional APC (APC 5593). As noted
final rule with comment period, we Radiation Treatment Preparation); above, we were able to remedy two of
were able to remedy two APC violation • APC 5691 (Level 1 Drug the proposed rule 2 time violations in
out of the 18 APCs that appeared in Administration); this final rule with comment period.
Table 10 of the CY 2020 OPPS/ASC • APC 5721 (Level 1 Diagnostic Tests
and Related Services); In summary, Table 11 below lists the
proposed rule. Specifically, APC 5672
• APC 5731 (Level 1 Minor 17 APCs that we are excepting from the
(Level 2 Pathology) and APC 5733
Procedures); 2 times rule for CY 2020 based on the
(Level 3 Minor Procedures) no longer
• APC 5734 (Level 4 Minor criteria described earlier and a review of
met the criteria for exception to the 2
Procedures); updated claims data for dates of service
times rule in this final rule with
comment period. In addition, based on • APC 5822 (Level 2 Health and between January 1, 2018 and December
our analysis of the final rule claims Behavior Services); and 31, 2018, that were processed on or
data, we found a total of 17 APCs with • APC 5823 (Level 3 Health and before June 30, 2019, and updated CCRs,
violations of the 2 times rule. Of these Behavior Services). if available. We note that, for cases in
17 total APCs, 16 were identified in the In addition, we found that APC 5593 which a recommendation by the HOP
proposed rule and one newly identified (Level 3 Nuclear Medicine and Related Panel appears to result in or allow a
APC. Specifically, we found the Services) violated the 2 times rule using violation of the 2 times rule, we
following 16 APCs from the proposed the final rule with comment period generally accept the HOP Panel’s
rule continued to have violations of the claims data. recommendation because those
2 times rule for this final rule with Although we did not receive any recommendations are based on explicit
comment period: comments on Table 10 of the proposed consideration of resource use, clinical
• APC 5112 (Level 2 Musculoskeletal rule, we did receive comments on APC homogeneity, site of service, and the
Procedures); assignments for specific HCPCS codes. quality of the claims data used to
• APC 5161 (Level 1 ENT Procedures) The comments, and our responses, can determine the APC payment rates. The
• APC 5181 (Level 1 Vascular be found in section III.D. (OPPS APC- geometric mean costs for hospital
Procedures) Specific Policies) of this final rule with outpatient services for these and all
• APC 5311 (Level 1 Lower GI comment period. other APCs that were used in the
Procedures) After considering the public development of this final rule with
• APC 5521 (Level 1 Imaging without comments we received on APC comment period can be found on the
Contrast); assignments and our analysis of the CY CMS website at: http://www.cms.gov.
C. New Technology APCs allow us to price new technology associated with providing care to
services more appropriately and Medicare beneficiaries. Furthermore, we
1. Background
consistently. believe that our payment rates are
In the CY 2002 OPPS final rule (66 FR For CY 2019, there were 52 New adequate to ensure access to services (80
59903), we finalized changes to the time Technology APC levels, ranging from FR 70374).
period in which a service can be eligible the lowest cost band assigned to APC For many emerging technologies,
for payment under a New Technology 1491 (New Technology–Level 1A ($0– there is a transitional period during
APC. Beginning in CY 2002, we retain $10)) through the highest cost band which utilization may be low, often
services within New Technology APC assigned to APC 1908 (New because providers are first learning
groups until we gather sufficient claims Technology–Level 52 ($145,001– about the technologies and their clinical
data to enable us to assign the service $160,000)). We note that the cost bands utility. Quite often, parties request that
to an appropriate clinical APC. This for the New Technology APCs, Medicare make higher payment
policy allows us to move a service from specifically, APCs 1491 through 1599 amounts under the New Technology
a New Technology APC in less than 2 and 1901 through 1908, vary with APCs for new procedures in that
years if sufficient data are available. It increments ranging from $10 to $14,999. transitional phase. These requests, and
also allows us to retain a service in a These cost bands identify the APCs to their accompanying estimates for
New Technology APC for more than 2 which new technology procedures and expected total patient utilization, often
years if sufficient data upon which to services with estimated service costs reflect very low rates of patient use of
base a decision for reassignment have that fall within those cost bands are expensive equipment, resulting in high
not been collected. assigned under the OPPS. Payment for per-use costs for which requesters
In the CY 2004 OPPS final rule with each APC is made at the mid-point of believe Medicare should make full
comment period (68 FR 63416), we the APC’s assigned cost band. For payment. Medicare does not, and we
restructured the New Technology APCs example, payment for New Technology believe should not, assume
to make the cost intervals more APC 1507 (New Technology–Level 7 responsibility for more than its share of
consistent across payment levels and ($501–$600)) is made at $550.50. the costs of procedures based on
refined the cost bands for these APCs to Under the OPPS, one of our goals is projected utilization for Medicare
retain two parallel sets of New to make payments that are appropriate beneficiaries and does not set its
Technology APCs, one set with a status for the services that are necessary for the payment rates based on initial
indicator of ‘‘S’’ (Significant Procedures, treatment of Medicare beneficiaries. The projections of low utilization for
Not Discounted when Multiple. Paid OPPS, like other Medicare payment services that require expensive capital
under OPPS; separate APC payment) systems, is budget neutral and increases equipment. For the OPPS, we rely on
and the other set with a status indicator are limited to the annual hospital hospitals to make informed business
of ‘‘T’’ (Significant Procedure, Multiple inpatient market basket increase decisions regarding the acquisition of
Reduction Applies. Paid under OPPS; adjusted for multifactor productivity. high-cost capital equipment, taking into
separate APC payment). These current We believe that our payment rates consideration their knowledge about
ER12NO19.023</GPH>
New Technology APC configurations generally reflect the costs that are their entire patient base (Medicare
beneficiaries included) and an methodology that is used to assign claims and to provide more predictable
understanding of Medicare’s and other services to an APC. In addition, services payment for these services.
payers’ payment policies. (We refer with fewer than 100 claims per year are For purposes of this adjustment, we
readers to the CY 2013 OPPS/ASC final not generally considered to be a stated that we believe that it is
rule with comment period (77 FR significant contributor to the APC appropriate to use up to 4 years of
68314) for further discussion regarding ratesetting calculations and, therefore, claims data in calculating the applicable
this payment policy.) are not included in the assessment of payment rate for the prospective year,
We note that, in a budget neutral the 2 times rule. As we explained in the rather than using solely the most recent
system, payments may not fully cover CY 2019 OPPS/ASC final rule with available year of claims data, when a
hospitals’ costs in a particular comment period (83 FR 58890), we were service assigned to a New Technology
circumstance, including those for the concerned that the methodology we use APC has a low annual volume of claims,
purchase and maintenance of capital to estimate the cost of a procedure which, for purposes of this adjustment,
equipment. We rely on hospitals to under the OPPS by calculating the we define as fewer than 100 claims
make their decisions regarding the geometric mean for all separately paid annually. We adopted a policy to
acquisition of high-cost equipment with claims for a HCPCS procedure code consider procedures with fewer than
the understanding that the Medicare from the most recent available year of 100 claims annually as low-volume
program must be careful to establish its claims data may not generate an procedures because there is a higher
initial payment rates, including those accurate estimate of the actual cost of probability that the payment data for a
made through New Technology APCs, the procedure for these low-volume procedure may not have a normal
for new services that lack hospital procedures. statistical distribution, which could
claims data based on realistic utilization affect the quality of our standard cost
In accordance with section
projections for all such services methodology that is used to assign
1833(t)(2)(B) of the Act, services
delivered in cost-efficient hospital services to an APC. We explained that
classified within each APC must be
outpatient settings. As the OPPS we were concerned that the
comparable clinically and with respect
acquires claims data regarding hospital methodology we use to estimate the cost
to the use of resources. As described
costs associated with new procedures, of a procedure under the OPPS by
earlier, assigning a procedure to a new
we regularly examine the claims data calculating the geometric mean for all
technology APC allows us to gather
and any available new information separately paid claims for a HCPCS
claims data to price the procedure and procedure code from the most recent
regarding the clinical aspects of new
procedures to confirm that our OPPS assign it to the APC with services that available year of claims data may not
payments remain appropriate for use similar resources and are clinically generate an accurate estimate of the
procedures as they transition into comparable. However, where utilization actual cost of the low-volume
mainstream medical practice (77 FR of services assigned to a New procedure. Using multiple years of
68314). For CY 2020, we included the Technology APC is low, it can lead to claims data will potentially allow for
proposed payment rates for New wide variation in payment rates from more than 100 claims to be used to set
Technology APCs 1491 to 1599 and year to year, resulting in even lower the payment rate, which would, in turn,
1901 through 1908 in Addendum A to utilization and potential barriers to create a more statistically reliable
the CY 2020 OPPS/ASC proposed rule access to new technologies, which payment rate.
(which is available via the internet on ultimately limits our ability to assign In addition, to better approximate the
the CMS website). The final payment the service to the appropriate clinical cost of a low-volume service within a
rates for these New Technology APCs APC. To mitigate these issues, we New Technology APC, we stated that we
are included in Addendum A to the CY determined in the CY 2019 OPPS/ASC believe using the median or arithmetic
2020 OPPS/ASC final rule with final rule with comment period that it mean rather than the geometric mean
comment period (which is available via was appropriate to utilize our equitable (which ‘‘trims’’ the costs of certain
the internet on the CMS website). adjustment authority at section claims out) could be more appropriate
1833(t)(2)(E) of the Act to adjust how we in some circumstances, given the
2. Establishing Payment Rates for Low- determined the costs for low-volume extremely low volume of claims. Low
Volume New Technology Procedures services assigned to New Technology claim volumes increase the impact of
Procedures that are assigned to New APCs (83 FR 58892 through 58893). We ‘‘outlier’’ claims; that is, claims with
Technology APCs are typically new have utilized our equitable adjustment either a very low or very high payment
procedures that do not have sufficient authority at section 1833(t)(2)(E) of the rate as compared to the average claim,
claims history to establish an accurate Act, which states that the Secretary which would have a substantial impact
payment for the procedures. One of the shall establish, in a budget neutral on any statistical methodology used to
objectives of establishing New manner, other adjustments as estimate the most appropriate payment
Technology APCs is to generate determined to be necessary to ensure rate for a service. We also explained that
sufficient claims data for a new equitable payments, to estimate an we believe having the flexibility to
procedure so that it can be assigned to appropriate payment amount for low- utilize an alternative statistical
an appropriate clinical APC. Some volume new technology procedures in methodology to calculate the payment
procedures that are assigned to New the past (82 FR 59281). Although we rate in the case of low-volume new
Technology APCs have very low annual have used this adjustment authority on technology services would help to
volume, which we consider to be fewer a case-by-case basis in the past, we create a more stable payment rate.
than 100 claims. We consider stated in the CY 2019 OPPS/ASC final Therefore, in the CY 2019 OPPS/ASC
procedures with fewer than 100 claims rule with comment period that we final rule with comment period (83 FR
annually as low-volume procedures believe it is appropriate to adopt an 58893), we established that, in each of
because there is a higher probability that adjustment for low-volume services our annual rulemakings, we will seek
the payment data for a procedure may assigned to New Technology APCs in public comments on which statistical
not have a normal statistical order to mitigate the wide payment methodology should be used for each
distribution, which could affect the fluctuations that have occurred for new low-volume service assigned to a New
quality of our standard cost technology services with fewer than 100 Technology APC. In the preamble of
each annual rulemaking, we stated that more appropriately reflects its cost (66 For the procedure described by CPT
we would present the result of each FR 59903). code 0398T, we have identified 37 paid
statistical methodology and solicit Consistent with our current policy, for claims from CY 2016 through CY 2018
public comment on which methodology CY 2020, in the CY 2020 OPPS/ASC (1 claim in CY 2016, 11 claims in CY
should be used to establish the payment proposed rule (84 FR 39454), we 2017, and 25 claims in CY 2018). We
rate for a low-volume new technology proposed to retain services within New note that the procedure described by
service. In addition, we will use our Technology APC groups until we obtain CPT code 0398T was first assigned to a
assessment of the resources used to sufficient claims data to justify New Technology APC in CY 2016.
perform a service and guidance from the reassignment of the service to a Accordingly, there are 3 years of claims
developer or manufacturer of the clinically appropriate APC. The data available for the OPPS ratesetting
service, as well as other stakeholders, to flexibility associated with this policy purposes. The payment amounts for the
determine the most appropriate allows us to reassign a service from a claims vary widely, with a cost of
payment rate. Once we identify the most New Technology APC in less than 2 approximately $29,254 for the sole CY
appropriate payment rate for a service, years if sufficient claims data are 2016 claim, a geometric mean cost of
we will assign the service to the New available. It also allows us to retain a approximately $4,647 for the 11 claims
Technology APC with the cost band that service in a New Technology APC for from CY 2017, and a geometric mean
includes its payment rate. more than 2 years if sufficient claims cost of approximately $11,716 for the 25
Accordingly for CY 2020, we data upon which to base a decision for claims from CY 2018. We are concerned
proposed to continue the policy we reassignment have not been obtained about the large fluctuation in the cost of
adopted in CY 2019 under which we (66 FR 59902). the procedure described by CPT code
will utilize our equitable adjustment 0398T from year to year and the
a. Magnetic Resonance-Guided Focused
authority under section 1833(t)(2)(E) of relatively small number of claims
Ultrasound Surgery (MRgFUS) (APCs
the Act to calculate the geometric mean, available to establish a payment rate for
1575, 5114, and 5414)
arithmetic mean, and median using the service. In accordance with section
multiple years of claims data to select Currently, there are four CPT/HCPCS 1833(t)(2)(B) of the Act, we must
the appropriate payment rate for codes that describe magnetic resonance establish that services classified within
purposes of assigning services with image-guided, high-intensity focused each APC are comparable clinically and
fewer than 100 claims per year to a New ultrasound (MRgFUS) procedures, three with respect to the use of resources.
Technology APC. Additional details on of which we proposed to continue to Therefore, as discussed in section
our policy is available in the CY 2019 assign to standard APCs, and one that III.C.2. of the proposed rule, we
OPPS/ASC final rule with comment we proposed to continue to assign to a proposed to apply the policy we
period (83 FR 58892 through 58893). New Technology APC for CY 2020. adopted in CY 2019, under which we
Comment: One commenter expressed These codes include CPT codes 0071T, will utilize our equitable adjustment
support for the continuation of our 0072T, and 0398T, and HCPCS code authority under section 1833(t)(2)(E) of
policy regarding payment rates for low- C9734. CPT codes 0071T and 0072T the Act to calculate the geometric mean,
volume new technology procedures. describe procedures for the treatment of arithmetic mean, and median costs
Response: We appreciate the uterine fibroids, CPT code 0398T using multiple years of claims data to
commenter’s support. describes procedures for the treatment select the appropriate payment rate for
After considering the public of essential tremor, and HCPCS code purposes of assigning CPT code 0398T
comments we received, we are C9734 describes procedures for pain to a New Technology APC. We believe
finalizing this proposal without palliation for metastatic bone cancer. using this approach to assign CPT code
modification. As shown in Table 11 of the CY 2020 0398T to a New Technology APC is
OPPS/ASC proposed rule, and as listed more likely to yield a payment rate that
3. Procedures Assigned to New in Addendum B to the CY 2020 OPPS/ will be representative of the cost of the
Technology APC Groups for CY 2020 ASC proposed rule, we proposed to procedure described by CPT code
As we explained in the CY 2002 OPPS continue to assign the procedures 0398T, despite the fluctuating geometric
final rule with comment period (66 FR described by CPT codes 0071T and mean costs for the procedure available
59902), we generally retain a procedure 0072T to APC 5414 (Level 4 in the claims data used for the proposed
in the New Technology APC to which Gynecologic Procedures) for CY 2020. rule. We continue to believe that the
it is initially assigned until we have We also proposed to continue to assign situation for the procedure described by
obtained sufficient claims data to justify the APC to status indicator ‘‘J1’’ CPT code 0398T is unique, given the
reassignment of the procedure to a (Hospital Part B services paid through a limited number of claims for the
clinically appropriate APC. comprehensive APC). In addition, we procedure and the high variability for
In addition, in cases where we find proposed to continue to assign the the cost of the claims, which makes it
that our initial New Technology APC services described by HCPCS code challenging to determine a reliable
assignment was based on inaccurate or C9734 (Focused ultrasound ablation/ payment rate.
inadequate information (although it was therapeutic intervention, other than Our analysis found that the estimated
the best information available at the uterine leiomyomata, with magnetic geometric mean cost of the 37 claims
time), where we obtain new information resonance (mr) guidance) to APC 5115 over the 3 year period for which there
that was not available at the time of our (Level 5 Musculoskeletal Procedures) are claims was approximately $8,829,
initial New Technology APC for CY 2020. We also proposed to the estimated arithmetic mean cost of
assignment, or where the New continue to assign HCPCS code C9734 the claims was approximately $10,021,
Technology APCs are restructured, we to status indicator ‘‘J1’’. We refer readers and the median cost of the claims was
may, based on more recent resource to Addendum B to the proposed rule for approximately $11,985. While the
utilization information (including the proposed payment rates for CPT results of using different methodologies
claims data) or the availability of refined codes 0071T and 0072T and HCPCS range from approximately $8,800 to
New Technology APC cost bands, code C9734 under the OPPS. nearly $12,000, two of the estimates fall
reassign the procedure or service to a Addendum B is available via the within the cost bands of New
different New Technology APC that internet on the CMS website. Technology APC 1575 (New
Technology—Level 38 ($10,001- any trimming of claims. Calculating the CPT code 0398T by calculating the
$15,000)), with a proposed payment rate payment rate using either the geometric median cost of the 37 paid claims for
of $12,500.50. Consistent with our low mean cost or the arithmetic mean cost the procedures in CY 2016 through CY
volume policy for procedures assigned would involve trimming the one paid 2018, and assigned the procedure
to a new technology APC, we presented claim from CY 2016, because the paid described by CPT code 0398T to the
the result of each statistical amount for the claim of $29,254 is New Technology APC that includes the
methodology in the proposed rule, and substantially larger than the amount for estimated cost. Accordingly, we
we sought public comments on which any other paid claim reported for the proposed to maintain the procedure
methodology should be used to procedure described by CPT code described by CPT code 0398T in APC
establish payment for the procedures 0398T. The median cost estimate for
1575 (New Technology—Level 38
described by CPT code 0398T. We noted CPT code 0398T also falls within the
($10,001-$15,000)), with a proposed
that we believe that the median cost same New Technology APC cost band
estimate was the most appropriate that was used to set the payment rate for payment rate of $12,500.50 for CY 2020.
representative cost of the procedure CY 2019, which is $12,500.50 for this We refer readers to Addendum B to the
described by CPT code 0398T because it procedure. Therefore, for purposes of proposed rule for the proposed payment
was consistent with the payment rates determining the proposed CY 2020 rates for all codes reportable under the
established for the procedure from CY payment rate, we proposed to estimate OPPS. Addendum B is available via the
2017 to CY 2019 and did not involve the cost for the procedure described by internet on the CMS website.
ER12NO19.024</GPH>
Comment: Multiple commenters, increase for HCPCS code C9734 is not 1575 (New Technology—Level 38
including the developer of MRgFUS, predictive of the changes in cost that ($10,001–$15,000)) with a proposed
stated that the proposed payment rate may occur with CPT code 0398T payment rate of $12,500.50 that was
for CPT code 0398T was too low (Magnetic resonance image guided high proposed as the APC assignment for
because they believed the claims data intensity focused ultrasound (mrgfus), CPT code 0398T in the proposed rule.
for CPT code 0398T continue to stereotactic ablation lesion, intracranial Comment: Two commenters
underestimate the resources used to for movement disorder including supported the assignment of CPT code
perform the procedure even when using stereotactic navigation and frame 0398T to New Technology APC 1575
the low-volume payment policy to placement when performed). Rather, the (New Technology—Level 38 ($10,001–
establish the payment rate for the payment rate for each service, including $15,000)) with a proposed payment rate
procedure. The developer also used the that described by HCPCS code C9734, is of $12,500.50. One of the commenters
example of the service described by generally based on the costs associated supported the proposed new technology
HCPCS code C9734 (Focused ultrasound with furnishing the service, which, in APC assignment because it is reflective
ablation/therapeutic intervention, other turn, drives the APC assignment. The of the median cost of the service and
than uterine leiomyomata, with geometric mean for C9734, which would ensure that what the commenter
magnetic resonance (mr) guidance), represents the cost of the individual believed would be a severe
where the payment rate for the service procedure, increased from $8,655 in CY underpayment calculated from the
had doubled from $5,222 in CY 2017 to 2017 to $9,294 in CY 2020, and was geometric mean would not be used to
$11,675 in the CY 2020 proposed rule, reassigned to a higher level APC based establish the payment rate for CPT code
to argue that a similar increase could clinical and resource similarity to other 0398T, which the commenter believed
occur for CPT code 0398T. Commenters services. could discourage providers from
suggested several ideas for what they Under the low-volume payment performing the service.
believed would be a more appropriate policy, we utilized our equitable Response: We appreciate the support
rate. Commenters believed the claims adjustment authority under section of the commenters.
cost data reported for CPT code 0398T 1833(t)(2)(E) of the Act to calculate the Comment: One commenter, the
does not fully reflect the resource costs geometric mean, arithmetic mean, and developer, supported the assignment of
for the time the procedure takes, the median costs using multiple years of HCPCS code C9734 to APC 5115 (Level
cost of single-use supplies for the claims data to select the appropriate 5 Musculoskeletal Procedures) for CY
procedure, and hours of use of a payment rate for purposes of assigning 2020.
provider’s MRI machine. To reflect CPT code 0398T to a New Technology Response: We appreciate the support
these costs, several commenters APC. We identified 43 claims reporting of the commenter.
supported restoring the payment rate the procedure described by CPT code After consideration of the public
from CY 2018 of $17,500.50. Other 0398T for the 3-year period of CY 2016 comments we received, we are
commenters simply requested a higher through CY 2018. We found the finalizing our proposal for the APC
rate than what was proposed such as a geometric mean cost for the procedure assignment of CPT code 0398T.
payment rate of either $22,000 or described by CPT code 0398T is Specifically, we are continuing to assign
$25,000. approximately $8,485, the arithmetic this code to New Technology APC 1575
Response: We appreciate the mean cost is approximately $9,672, and (New Technology—Level 38 ($10,001–
commenters’ concerns, but the claims the median cost is approximately $15,000)), with a payment rate of
data we currently have for CPT code $11,182. Based on our methodology, we $12,500.50, for CY 2020 through use of
0398T do not support a higher payment will use the median cost of CPT code our low-volume payment policy for new
rate even when using the low-volume 0398T to set the payment rate for the technology procedures. In addition, we
payment policy. Also, while the procedure because the median cost is are finalizing our proposal, without
payment rate for HCPCS code C9734 the highest rate of the three statistical modification, to assign HCPCS code
(Focused ultrasound ablation/ methods and may reflect some of the C9734 to APC 5115. We also are
therapeutic intervention, other than higher resource costs, as described by finalizing our proposal to continue to
uterine leiomyomata, with magnetic commenters, for the procedure. The assign CPT codes 0071T and 0072T to
resonance (mr) guidance) doubled from median cost for CPT code 0398T falls APC 5414, without modification. Table
ER12NO19.025</GPH>
CY 2017 to CY 2020, the payment rate within the same New Technology APC 11 above lists the final CY 2018 status
indicator and APC assignments for claims data available for the final rule Technology—Level 50 ($115,001–
MRgFUS procedures. We refer readers with comment period and our $130,000)), which established a
to Addendum B of this final rule with understanding of the Argus® II payment rate for the Argus® II
comment period for the final payment procedure, we reassigned the procedure procedure of $122,500.50, which was
rates for all codes reportable under the described by CPT code 0100T from New the arithmetic mean of the payment
OPPS. Addendum B is available via the Technology APC 1599 to New rates for the procedure for CY 2016 and
internet on the CMS website. Technology APC 1906, with a final CY 2017.
payment rate of $150,000.50 for CY For CY 2019, the reported cost of the
b. Retinal Prosthesis Implant Procedure Argus® II procedure based on the
2017. We noted that this payment rate
CPT code 0100T (Placement of a included the cost of both the surgical geometric mean cost of 12 claims from
subconjunctival retinal prosthesis procedure (CPT code 0100T) and the the CY 2017 hospital outpatient claims
receiver and pulse generator, and retinal prosthesis device (HCPCS code data was approximately $171,865,
implantation of intra-ocular retinal C1841). which was approximately $49,364 more
electrode array, with vitrectomy) For CY 2018, the reported cost of the than the payment rate for the procedure
describes the implantation of a retinal Argus® II procedure based on CY 2016 for CY 2018. In the CY 2019 OPPS/ASC
prosthesis, specifically, a procedure hospital outpatient claims data for 6 final rule with comment period, we
involving the use of the Argus® II claims used for the CY 2018 OPPS/ASC continued to note that the costs of the
Retinal Prosthesis System. This first final rule with comment period was Argus® II procedure are extraordinarily
retinal prosthesis was approved by the approximately $94,455, which was more high compared to many other
Food and Drug Administration (FDA) in than $55,000 less than the payment rate procedures paid under the OPPS (83 FR
2013 for adult patients diagnosed with for the procedure in CY 2017, but closer 58897 through 58898). In addition, the
severe to profound retinitis pigmentosa. to the CY 2016 payment rate for the number of claims submitted continued
Pass-through payment status was procedure. We noted that the costs of to be very low for the Argus® II
granted for the Argus® II device under the Argus® II procedure are procedure. We stated that we continued
HCPCS code C1841 (Retinal prosthesis, extraordinarily high compared to many to believe that it is important to mitigate
includes all internal and external other procedures paid under the OPPS. significant payment fluctuations for a
components) beginning October 1, 2013, In addition, the number of claims procedure, especially shifts of several
and this status expired on December 31, submitted has been very low and has tens of thousands of dollars, while also
2015. We note that after pass-through not exceeded 10 claims within a single basing payment rates on available cost
payment status expires for a medical year. We believed that it is important to information and claims data because we
device, the payment for the device is mitigate significant payment are concerned that large decreases in the
packaged into the payment for the differences, especially shifts of several payment rate could potentially create an
associated surgical procedure. tens of thousands of dollars, while also access to care issue for the Argus® II
Consequently, for CY 2016, the device basing payment rates on available cost procedure. In addition, we indicated
described by HCPCS code C1841 was information and claims data. In CY that we wanted to establish a payment
assigned to OPPS status indicator ‘‘N’’ 2016, the payment rate for the Argus® rate to mitigate the potential sharp
to indicate that payment for the device II procedure was $95,000.50. The increase in payment from CY 2018 to
is packaged and included in the payment rate increased to $150,000.50 CY 2019, and potentially ensure a more
payment rate for the surgical procedure in CY 2017. For CY 2018, if we had stable payment rate in future years.
described by CPT code 0100T. For CY established the payment rate based on As discussed in section III.C.2. of the
2016, the procedure described by CPT updated final rule claims data, the CY 2019 OPPS/ASC final rule with
code 0100T was assigned to New payment rate would have decreased to comment period (83 FR 58892 through
Technology APC 1599, with a payment $95,000.50 for CY 2018, a decrease of 58893), we used our equitable
rate of $95,000, which was the highest $55,000 relative to CY 2017. We were adjustment authority under section
paying New Technology APC for that concerned that these large fluctuations 1833(t)(2)(E) of the Act, which states
year. This payment included both the in payment could potentially create an that the Secretary shall establish, in a
surgical procedure (CPT code 0100T) access to care issue for the Argus® II budget neutral manner, other
and the use of the Argus® II device procedure, and we wanted to establish adjustments as determined to be
(HCPCS code C1841). However, a payment rate to mitigate the potential necessary to ensure equitable payments,
stakeholders (including the device sharp decline in payment from CY 2017 to establish a payment rate that is more
manufacturer and hospitals) believed to CY 2018. representative of the likely cost of the
that the CY 2016 payment rate for the In accordance with section service. We stated that we believed the
procedure involving the Argus® II 1833(t)(2)(B) of the Act, we must likely cost of the Argus® II procedure is
System was insufficient to cover the establish that services classified within higher than the geometric mean cost
hospital cost of performing the each APC are comparable clinically and calculated from the claims data used for
procedure, which includes the cost of with respect to the use of resources. the CY 2018 OPPS/ASC final rule with
the retinal prosthesis at the retail price Therefore, for CY 2018, we used our comment period but lower than the
of approximately $145,000. equitable adjustment authority under geometric mean cost calculated from the
For CY 2017, analysis of the CY 2015 section 1833(t)(2)(E) of the Act, which claims data used for the CY 2019 OPPS/
OPPS claims data used for the CY 2017 states that the Secretary shall establish, ASC final rule with comment period.
OPPS/ASC final rule with comment in a budget neutral manner, other For CY 2019, we analyzed claims data
period showed 9 single claims (out of 13 adjustments as determined to be for the Argus® II procedure using 3
total claims) for the procedure described necessary to ensure equitable payments, years of available data from CY 2015
by CPT code 0100T, with a geometric to maintain the payment rate for this through CY 2017. These data included
mean cost of approximately $142,003 procedure, despite the lower geometric claims from the last year that the Argus®
based on claims submitted between mean costs available in the claims data II received transitional device pass-
January 1, 2015, through December 31, used for the final rule with comment through payments (CY 2015) and the
2015, and processed through June 30, period. For CY 2018, we reassigned the first 2 years since device pass-through
2016. Based on the CY 2015 OPPS Argus® II procedure to APC 1904 (New payment status for the Argus® II
expired. We found that the geometric methodologies fall within the same New Technology—Level 52 ($145,001–
mean cost for the procedure was Technology APC cost band ($145,001– $160,000)), with a payment rate of
approximately $145,808, the arithmetic $160,000), where the Argus® II $152,500.50 for CY 2020. We refer
mean cost was approximately $151,367, procedure is assigned for CY 2019. readers to Addendum B to the proposed
and the median cost was approximately Consistent with our policy stated in rule for the proposed payment rates for
$151,266. As we do each year, we section III.C.2. of the proposed rule, we all codes reportable under the OPPS.
reviewed claims data regarding hospital presented the result of each statistical Addendum B is available via the
costs associated with new procedures. methodology in the proposed rule, and internet on the CMS website.
We regularly examine the claims data we sought public comments on which As we discussed in the CY 2019
and any available new information method should be used to assign OPPS/ASC final rule with comment
regarding the clinical aspects of new procedures described by CPT code period (83 FR 58898), the claims data
procedures to confirm that OPPS 0100T to a New Technology APC. All from CY 2017 showed another payment
payments remain appropriate for three potential statistical methodologies issue with regard to the Argus® II
procedures like the Argus® II procedure used to estimate the cost of the Argus® procedure. We found that payment for
as they transition into mainstream II procedure fell within the cost band for the Argus® II procedure was sometimes
medical practice (77 FR 68314). We New Technology APC 1908, with the bundled into the payment for another
noted that the proposed payment rate estimated cost being between $145,001 procedure. Therefore in CY 2019, we
included both the surgical procedure and $160,000. Accordingly, we implemented a policy to exclude
(CPT code 0100T) and the use of the proposed to maintain the assignment of payment for all procedures assigned to
Argus® II device (HCPCS code C1841). the procedure described by CPT code New Technology APCs from being
For CY 2019, the estimated costs using 0100T in APC 1908 (New Technology— bundled into the payment for
all three potential statistical methods for Level 52 ($145,001–$160,000)), with a procedures assigned to a C–APC. For CY
determining APC assignment under the proposed payment rate of $152,500.50 2020, we proposed to continue this
New Technology low-volume payment for CY 2020. We note that the proposed policy as described in section
policy fell within the cost band of New payment rate includes both the surgical II.A.2.b.(3) of the proposed rule. Our
Technology APC 1908, which is procedure (CPT code 0100T) and the proposal would continue to exclude
between $145,001 and $160,000. use of the Argus® II device (HCPCS code payment for any procedure that is
Therefore, we reassigned the Argus® II C1841). We refer readers to Addendum assigned to a New Technology APC
procedure (CPT code 0100T) to APC B to the proposed rule for the proposed from being packaged when included on
1908 (New Technology—Level 52 payment rates for all codes reportable a claim with a service assigned to status
($145,001–$160,000)), with a payment under the OPPS. Addendum B is indicator ‘‘J1’’. While we did not
rate of $152,500.50 for CY 2019. available via the internet on the CMS propose to exclude payment for a
For CY 2020, the number of reported website. procedure assigned to a New
claims for the Argus® II procedure Comment: Two commenters, Technology APC from being packaged
continues to be very low with a including the manufacturer, supported when included on a claim with a service
substantial fluctuation in cost from year the assignment of 0100T to APC 1908 assigned to status indicator ‘‘J2’’, we
to year. The high annual variability of (New Technology—Level 52 ($145,001– sought public comments on this issue.
the cost of the Argus® II procedure $160,000)), with a proposed payment Comment: Several commenters,
continues to make it difficult to rate of $152,500.50 for CY 2020. including device manufacturers, device
establish a consistent and stable Response: We appreciate the support manufacturer associations and
payment rate for the procedure. As of the commenters. Consistent with our physicians were opposed to our
previously mentioned, in accordance policy for low-volume services assigned proposal to package payment for
with section 1833(t)(2)(B) of the Act, we to a New Technology APC, for this final procedures assigned to a New
are required to establish that services rule, we calculated the geometric mean, Technology APC into the payment for
classified within each APC are arithmetic mean, and median costs comprehensive observation services
comparable clinically and with respect using multiple years of claims data to assigned status indicator ‘‘J2’’. The
to the use of resources. Therefore, for select the appropriate payment rate for commenters stated that there were
CY 2020, we proposed to apply the purposes of assigning the Argus® II instances where beneficiaries receiving
policy we adopted in CY 2019, under procedure (CPT code 0100T) to a New observation services may require the
which we utilize our equitable Technology APC. We identified 41 types of procedures that are assigned to
adjustment authority under section claims reporting the procedure New Technology APCs. Several
1833(t)(2)(E) of the Act to calculate the described by CPT code 0100T for the 4- commenters specifically mentioned
geometric mean, arithmetic mean, and year period of CY 2015 through CY HeartFlow, and stated that it could be
median costs using multiple years of 2018. We found the geometric mean cost performed appropriately for a patient
claims data to select the appropriate for the procedure described by CPT receiving observation services. The
payment rate for purposes of assigning code 0100T to be approximately commenters also stated that providing
the Argus® II procedure (CPT code $146,042, the arithmetic mean cost to be separate payment for this new
0100T) to a New Technology APC. approximately $151,453, and the technology procedure will allow CMS to
We identified 35 claims reporting the median cost to be approximately collect sufficient claims data to enable
procedure described by CPT code 0100T $151,426. All of the resulting estimates assignment of the procedure to an
for the 4-year period of CY 2015 through from using the three statistical appropriate clinical APC.
CY 2018. We found the geometric mean methodologies fall within the same New Response: We appreciate the
cost for the procedure described by CPT Technology APC cost band ($145,001– stakeholders’ comments regarding this
code 0100T to be approximately $160,000), that was proposed as the proposal and agree that, although rare,
$146,059, the arithmetic mean cost to be APC assignment for CPT code 0100T in there are situations in which it is
approximately $152,123, and the the proposed rule. Therefore, we are clinically appropriate to provide a new
median cost to be approximately finalizing our proposal to maintain the technology service when providing
$151,267. All of the resulting estimates assignment of the procedure described comprehensive observation services. As
from using the three statistical by CPT code 0100T in APC 1908 (New discussed in the CY 2019 OPPS/ASC
final rule with comment period (83 FR a claim with a ‘‘J1’’ service assigned to aspiration[s]/biopsy[ies]) and all
58847), the purpose of the new a C–APC. For CY 2020 and subsequent mediastinal and/or hilar lymph node
technology APC policy is to ensure that years, we are also finalizing a policy to stations or structures and therapeutic
there are sufficient claims data for new exclude payment for any procedures intervention(s)). This microwave
services in order to assign these that are assigned to a New Technology ablation procedure utilizes a flexible
procedures to a clinical APC and APC from being packaged into the catheter to access the lung tumor via a
therefore, we excluded procedures payment for comprehensive observation working channel and may be used as an
assigned to New Technology APCs from services assigned to status indicator alternative procedure to a percutaneous
packaging under the C–APC policy. In ‘‘J2’’ when they are included on a claim microwave approach. Based on our
the CY 2019 final rule, we specifically with ‘‘J2’’ procedures. This policy is review of the New Technology APC
stated that the exclusion policy also described in section II.A.2.b.(3) of application for this service and the
included circumstances when New this final rule. service’s clinical similarity to existing
Technology procedures were billed with c. Bronchoscopy With Transbronchial services paid under the OPPS, we
comprehensive services assigned to Ablation of Lesion(s) by Microwave estimated the likely cost of the
status indicator ‘‘J1’’, however we Energy procedure would be between $8,001 and
believe this rationale is also applicable $8,500. We have not received any
Effective January 1, 2019, CMS
to comprehensive observations services established HCPCS code C9751 claims data for this service. Therefore,
that are assigned status indicator ‘‘J2’’. (Bronchoscopy, rigid or flexible, we proposed to continue to assign the
Accordingly, for CY 2020 and transbronchial ablation of lesion(s) by procedure described by HCPCS code
subsequent years, we are modifying our microwave energy, including C9751 to New Technology APC 1571
policy for excluding procedures fluoroscopic guidance, when performed, (New Technology—Level 34 ($8,001–
assigned to New Technology APCs from with computed tomography $8,500)), with a proposed payment rate
the C–APC policy. That is, we are acquisition(s) and 3–D rendering, of $8,250.50 for CY 2020. Details
finalizing our proposal to exclude computer-assisted, image-guided regarding HCPCS code C9751 were
payment for any procedure that is navigation, and endobronchial shown in Table 12 of the CY 2020
assigned to a New Technology APC ultrasound (EBUS) guided transtracheal OPPS/ASC proposed Rule, which is
from being packaged when included on and/or transbronchial sampling (eg, reprinted below in Table 13.
Comment: The developer of the $8,500)), with a proposed payment rate report any test used to identify bacterial
procedure noted that there will be of $8,250.50 for CY 2020. or other pathogen contamination in
clinical trials for HCPCS code C9751 in Response: We appreciate the support blood platelets. Currently, there are two
CY 2020 and it is anticipated the of the commenter. rapid bacterial detection tests cleared by
procedure also will have a limited After considering the public FDA that are described by HCPCS code
market release in CY 2020. Therefore, comments, we are finalizing our P9100. According to their instructions
the developer is expecting claims to be proposal to assign HCPCS code C9751 to for use, rapid bacterial detection tests
reported billed with HCPCS code C9751 New Technology APC 1571 (New should be performed on platelets from
for CY 2020. Technology—Level 34 ($8,001–$8,500)), 72 hours after collection. Currently,
Response: We appreciate the update with a payment rate of $8,250.50 for CY certain rapid and culture-based tests can
on the expected utilization for HCPCS 2020. be used to extend the dating for platelets
code C9751 for CY 2020. from 5 days to 7 days. Blood banks and
d. Pathogen Test for Platelets transfusion services may test and use 6-
Comment: One commenter supported
our proposal to assign HCPCS code As stated in the CY 2018 OPPS/ASC day old to 7-day old platelets if the test
C9751 to New Technology APC 1571 final rule with comment period (82 FR results are negative for bacterial
ER12NO19.026</GPH>
(New Technology—Level 34 ($8,001- 59281), HCPCS code P9100 is used to contamination.
HCPCS code P9100 was assigned in 1516 (New Technology—Level 16 Another commenter, the developer,
CY 2019 to New Technology APC 1493 ($1,401–$1,500)), with a payment rate of encouraged CMS to use our equitable
(New Technology—Level 1C ($21–$30)), $1,450.50 based on pricing information adjustment authority under section
with a payment rate of $25.50. For CY provided by the developer of the 1833(t)(2)(E) of the Act, which states
2020, based on CY 2018 claims data, procedure that indicated the price of the that the Secretary shall establish, in a
there are approximately 1,100 claims procedure was approximately $1,500. budget neutral manner, other
reported for this service with a For CY 2020, based on our analysis of adjustments as determined to be
geometric mean cost of approximately the CY 2018 claims data available for necessary to ensure equitable payments
$32. This geometric mean cost would the proposed rule, we found that over to maintain the current payment rate for
result in the assignment of the service 840 claims had been submitted for HeartFlow. The developer suggested
described by HCPCS code P9100 to a payment for HeartFlow during CY 2018. that CMS should use its own assessment
New Technology APC, based on the We stated that the estimated geometric of the resources required to perform the
associated cost band, with a higher mean cost of HeartFlow was $788.19, or HeartFlow service to set the payment
payment rate than where the service is roughly $660 lower that the payment rate for the service. The developer cited
currently assigned. Therefore, for CY rate for CY 2019 of $1,450.50. Therefore, instances in the last four years where
2020, we proposed to reassign the for CY 2020, we proposed to reassign CMS used its equitable adjustment
service described by HCPCS code P9100 the service described by CPT code authority to mitigate either large
to New Technology APC 1494 (New 0503T in order to adjust the payment fluctuations or declines in annual
Technology—Level 1D ($31–$40)), with rate to better reflect the cost for the payment rates. These cases include: (1)
a proposed payment rate of $35.50. service. We proposed to reassign the A CY 2018 decision to use multiple
Comment: One commenter expressed service described by CPT code 0503T to years of claims data to pay a higher rate
support for the proposal. New Technology APC 1509 (New for CPT code 0100T (Placement of a
Response: We appreciate the support Technology—Level 9 ($701–$800)), with subconjunctival retinal prosthesis
of the commenter. a proposed payment rate of $750.50 for receiver and pulse generator, and
After considering the public implantation of intraocular retinal
CY 2020. We sought public comments
comments, we are finalizing our electrode array, with vitrectomy) of
on this proposal.
proposal to assign HCPCS code P9100 to
Comment: Multiple commenters $122,500.50 rather than the payment
New Technology APC 1494 (New
requested that we retain the CY 2019 rate generated by the most recent year
Technology—Level 1D ($31–$40)), with
OPPS APC assignment of APC 1516 of claims data of $95,000.50; (2) a CY
a payment rate of $35.50.
(New Technology—Level 16 ($1401– 2016 decision regarding the payment
e. Fractional Flow Reserve Derived $1500)) for HeartFlow with a payment rate of CPT code 0308T (Insertion of
From Computed Tomography (FFRCT) rate of $1,450.50. The commenters were ocular telescope prosthesis including
Fractional Flow Reserve Derived from concerned that reducing the payment removal of crystalline lens or
Computed Tomography (FFRCT), also rate to $750.50 would discourage intraocular lens prosthesis) where the
known by the trade name HeartFlow, is hospitals from using the service because median cost of $18,365 was used to set
a noninvasive diagnostic service that they stated that the list price of the the payment rate instead of the
allows physicians to measure coronary HeartFlow service is substantially geometric mean cost of $13,865 because
artery disease in a patient through the higher than the proposed payment rate. only 39 single frequency claims were
use of coronary CT scans. The Commenters were concerned that reported for the service, and where we
HeartFlow procedure is intended for reduced utilization of HeartFlow would stated that ‘‘the median cost would be
clinically stable symptomatic patients cause some beneficiaries to have a more appropriate measure of the
with coronary artery disease, and, in unnecessary invasive coronary central tendency for purposes of
many cases, may avoid the need for an angiograms that are more costly than the calculating the cost and the payment
invasive coronary angiogram procedure. HeartFlow procedure. rate for the procedure;’’ (3) a CY 2016
HeartFlow uses a proprietary data Multiple commenters, including the decision to adjust the geometric mean
analysis process performed at a central developer of HeartFlow, provided per diem cost for the partial hospital
facility to develop a three-dimensional additional reasons to maintain the program to ensure a per diem payment
image of a patient’s coronary arteries, current payment rate for the service of for fewer services was less than a per
which allows physicians to identify the $1,450.50 despite claims data suggesting diem payment for a larger number of
fractional flow reserve to assess whether a lower payment rate for HeartFlow. The services; and (4) a CY 2018 decision to
or not patients should undergo further commenters believed that 78 single establish a payment rate of $17,500.50
invasive testing (that is, a coronary frequency claims used for the proposed for CPT code 0398T (Magnetic
angiogram). rule solely represented a single year and resonance image guided high intensity
For many procedures in the OPPS, that such a low number of claims would focused ultrasound (mrgfus),
payment for analytics that are be an insufficient number of claims on stereotactic ablation lesion, intracranial
performed after the main diagnostic/ which to base a payment rate reduction for movement disorder including
image procedure are packaged into the for the service. Two commenters stereotactic navigation and frame
payment for the primary procedure. suggested that CMS should collect placement when performed) instead of
However, in CY 2018, we determined another one or two years of claims data proposed payment rate of $9,750.50.
that HeartFlow should receive a before making changes to the current The developer believes that the
separate payment because the procedure payment rate. One of the commenters proposed New Technology APC
is performed by a separate entity (that believed the reason the estimated cost of assignment for HeartFlow, which would
is, a HeartFlow technician who HeartFlow derived from claims data is result in a nearly 50 percent reduction
conducts computer analysis offsite) substantially less than the current in the payment rate between CY 2019
rather than the provider performing the payment rate may be due to providers and CY 2020, is similar to these cases
CT scan. We assigned CPT code 0503T, submitting claims without marked up described in their comment. Therefore,
which describes the analytics gross charges for the services they the developer asked us to use our
performed, to New Technology APC provide. equitable adjustment authority to
maintain the CY 2019 payment rate of claims used to calculate the payment OPPS/ASC proposed rule as 78X32,
$1,450.50 for the service rather than rate for Heartflow, and we decided the 78X33, and 78X44. More information
adopt the proposed payment rate. low-volume payment policy would be about CPT codes 78431, 78432, and
Response: The proposed payment rate the best approach to address those 78433 can be found in section III. D. b.
for CPT code 0503T was based on concerns. of this final rule.
claims data from CY 2018, which is the Our analysis found that the geometric
Comment: Several commenters
first year the service was payable in the mean cost for CPT code 0503T was
reported that certain societies submitted
OPPS. For ratesetting for CY 2018 and $768.26, the arithmetic mean cost for
a new technology application to CMS
CY 2019, there were no claims data CPT code 0503T was $960.12 and that
for CPT codes 78431, 78432, and 78433
available showing the cost of the the median cost for CPT code 0503T
was $900.28. Of the three cost methods, that details the costs associated with
service. Also, there were no services providing these services. For CPT code
identified as comparable to CPT code the highest amount was for the
arithmetic mean. The arithmetic mean 78431, these same commenters
0503T, which meant we could not disagreed with the proposed APC
estimate the cost of CPT code 0503T by falls within the cost band for New
Technology APC 1511 (New placement and recommended its
using the cost of a similar service. reassignment from APC 5594 (Level 4
Accordingly, we previously based Technology—Level 11 ($901–$1000))
with a payment rate of $950.50. The Nuclear Medicine and Related Services)
pricing for the service on pricing with a proposed payment rate of
information provided by the developer arithmetic mean helps to account for
some of the higher costs of CPT code $1,466.16 to APC 1522 (New
of the procedure. Technology—Level 23 ($2501–$3000))
We recognize that there was a low 0503T identified by the commenters
that may not have been reflected by with a proposed payment rate of
volume of claims for HeartFlow based $2,750.50. They reported that, based on
on the data available for the proposed either the median or the geometric
mean. We acknowledge the the resource cost of the service
rule and, thus, we should have applied described by CPT code 78431, APC 1522
the low-volume policy for new commenters’ concern and recognize that
it may be theoretically possible that the provides adequate reimbursement for
technology services in the proposed the service. Similarly, for CPT codes
rule. reported cost of CPT code 0503T is
higher than what we calculated from the 78432 and 78433, the commenters
However, for the final rule, using the indicated that APC 5594 would not
most recently available data, there are claims data due to some providers
reporting costs lower than actual costs adequately cover the resource costs
now 957 total claims billed with CPT associated with these procedures, and
code 0503T and 101 single frequency for the service. However, we rely on
hospitals to bill all CPT codes recommended their reassignment to
claims. We appreciate the concerns of APC 1523 (New Technology—Level 23
the commenters who stated that there accurately in accordance with their code
descriptors and CPT and CMS ($2501–$3000)) with a proposed
were not enough claims billed with payment rate of $ 2,750.50
instructions, as applicable, and to report
HeartFlow to use claims data to revise
charges on claims and charges and costs Response: Based on the information
the rate for HeartFlow. While 101 single
on their Medicare hospital cost reports provided in the new technology
claims is above the threshold we
appropriately. In addition, we do not application, and the comments received,
established for low-volume services
specify the methodologies that hospitals we are revising the APC assignments for
assigned to a new technology APC, we
must use to set charges for this or any these codes. Specifically, we are
agree with the commenters that a
other service. revising the APC assignment for CPT
payment reduction of nearly 50 percent After consideration of the public
is significant for a new technology that code 78431 from APC 5594 to APC
comments we received, we are utilizing 1522, and reassigning CPT codes 78432
still has relatively low volume. our new technology low-volume
Accordingly, given the low number of and 78433 from APC 5594 to APC 1523.
payment policy to set the payment rate
single frequency claims for CPT code for the HeartFlow service CPT code In summary, after consideration of the
0503T, that number of claims for the 0503T based on the arithmetic mean for public comments for the new cardiac
Heartflow procedure was below the low- the procedure. Specifically, we are PET/CT codes, and based on our
volume payment policy threshold for assigning CPT code 0503T to New evaluation of the new technology
the proposed rule, and that it is only Technology APC 1511 (New application which provided the
two claims above the threshold using Technology—Level 11 ($901–$1000)) estimated costs for the services and
data available for this final rule with with a payment rate of $950.50. described the components and
comment period, we have decided to characteristics of the new codes, we are
use our equitable adjustment authority f. Cardiac Positron Emission assigning CPT codes 78431, 78432, and
under section 1833(t)(2)(E) of the Act to Tomography (PET)/Computed 78433 to the final APCs listed in Table
calculate the geometric mean, arithmetic Tomography (CT) Studies 14 below. Please refer to section III. D.
mean, and median using the CY 2018 Effective January 1, 2020, we have b. of this final rule for more information
claims data to determine an appropriate assigned three CPT codes (78431, 78432, on the finalized proposal to establish a
payment rate for HeartFlow using our and 78433) that describe the services payment rate for other new CPT codes
new technology APC low-volume associated with cardiac PET/CT studies associated with PET/CT studies. The
payment policy. While the number of to New Technology APCs. Table 13 final CY 2020 payment rate for the
single frequency claims is just above our reports code descriptors, status codes can be found in Addendum B to
threshold to use the low-volume indicators, and APC assignments for this final rule with comment period
payment policy, we still have concerns these CPT codes. These codes were (which is available via the internet on
about the normal cost distribution of the listed in Addendum B to the CY 2020 the CMS website).
ER12NO19.027</GPH>
g. V-Wave Interatrial Shunt Procedure coding of these services by Medicare catheterization, trans-esophageal
A randomized, double-blinded would reveal to the study participants echocardiography (TEE)/intracardiac
control IDE study is currently in whether they have received the echocardiography (ICE), and all imaging
progress for the V-Wave interatrial interatrial shunt because an additional with or without guidance (for example,
shunt procedure. All participants who procedure code, CPT code 93799 ultrasound, fluoroscopy), performed in
passed initial screening for the study (Unlisted cardiovascular service or an approved investigational device
receive a right heart catherization procedure) would be included on the exemption (IDE) study) to describe the
procedure described by CPT code 93451 claims for participants receiving the service, and we assigned the service to
(Right heart catheterization including interatrial shunt. Therefore, we created New Technology APC 1589 (New
measurement(s) of oxygen saturation a temporary HCPCS code to describe the Technology—Level 38 ($10,001–
and cardiac output, when performed). V-wave interatrial shunt procedure for $15,000)). Details about the temporary
Participants assigned to the both the experimental group and the HCPCS code are shown in Table 15
experimental group also receive the V- control group in the study. Specifically, below. The final CY 2020 payment rate
Wave interatrial shunt procedure while we established HCPCS code C9758 for V-Wave interatrial shunt procedure
participants assigned to the control (Blinded procedure for NYHA class III/ can be found in Addendum B to this
group only receive right heart IV heart failure; transcatheter final rule with comment period (which
catheterization. The developer of V- implantation of interatrial shunt or is available via the internet on the CMS
Wave is concerned that the current placebo control, including right heart website).
ER12NO19.028</GPH>
D. OPPS APC-Specific Policies Response: As we have stated every it was necessary to revise the APC
year since the implementation of the assignment to appropriately reflect the
1. Barostim NeoTM System (APC 5464) OPPS on August 1, 2000, we review, on device cost associated with the
In CY 2019, CPT codes 0266T and an annual basis, the APC assignments procedure.
0268T were assigned to APC 5463 for all services and items paid under the Similar to our findings for the
(Level 3 Neurostimulator and Related OPPS based on our analysis of the latest
proposed rule, based on updated claims
Procedures) with a payment rate of claims data.
Based on our analysis of the proposed data for this final rule with comment
$18,707.16. For CY 2020, as listed in period, the geometric mean cost for CPT
rule claims data as well as clinical
Addendum B to the CY 2020 OPPS/ASC code 0268T supports its reassignment
review of the services described, we
proposed rule, we proposed to reassign from APC 5463 to APC 5464.
proposed to revise the APC assignment
both codes to APC 5464 (Level 4 Specifically, our claims data show a
for both CPT codes 0266T and 0268T to
Neurostimulator and Related geometric mean cost of approximately
APC 5464. In our analysis of CPT code
Procedures) with a proposed payment 0268T (which describes implantation/ $25,558 for CPT code 0268T based on 6
rate of $29,025.99. Table 16 below lists replacement of the pulse generator), we single claims (out of 6 total claims),
the long descriptors, proposed status noticed that the APC assignment for which is consistent with the geometric
indicator (SI), and APC assignments for CPT code 0266T (which describes the mean cost of approximately $28,491 for
these codes. We note that both codes are implantation or replacement of the APC 5464, rather than the geometric
associated with the Barostim NeoTM complete system) was lower. We do not mean cost of approximately $18,864 for
System. believe that the payment for the APC 5463. Furthermore, as mentioned
Comment: A medical device company complete system (CPT code 0266T) above, we are also assigning CPT code
agreed with the reassignment for CPT should be less than the payment for the 0266T to APC 5464 even though we do
codes 0266T and 0268T to APC 5464. implantation/replacement of the pulse not yet have claims data because we do
The commenter stated that APC 5464 is generator (CPT code 0268T) procedure. not believe that the service for
the more appropriate assignment for Consequently, we proposed to revise the implantation of the entire system (CPT
these codes based on clinical and APC assignment for CPT code 0266T to code 0266T) would be less resource
resource homogeneity, and encouraged APC 5464. Although we had no claims intensive than the implantation of the
ER12NO19.029</GPH>
CMS to finalize the APC assignment. data for CPT code 0266T, we believed pulse generator alone (CPT code 0268T).
In summary, after consideration of the list the long descriptors for the codes D1 of this final rule with comment
public comment and analysis of the and the final SI and APC assignments. period for the status indicator (SI)
latest claims data, we are finalizing our The final CY 2020 payment rate for the assignments for all codes reported under
proposal, without modification, to codes can be found in Addendum B to the OPPS. Both Addendum B and D1
assign CPT codes 0266T and 0268T to this final rule with comment period. In are available via the internet on the
APC 5464 for CY 2020. Table 16 below addition, we refer readers to Addendum CMS website.
2. Biomechanical Computed Comment: A commenter agreed with with comment period. In addition, we
Tomography (BCT) Analysis (APCs the SI and APC assignments and stated refer readers to Addendum D1 of this
5521, 5523, and 5731) that the APC assignments for these final rule with comment period for the
The CPT Editorial Panel established codes are the best available placements. complete list of the OPPS payment
five new codes, specifically, CPT codes The commenter also noted that CMS did status indicators and their definitions
0554T, 0555T, 0556T, 0557T, and not assign the comprehensive code (CPT for CY 2020. Both Addendum B and
0558T, to describe the services code 0554T) and the physician Addendum D1 are available via the
associated with biomechanical interpretation code (CPT code 0557T) to internet on the CMS website.
computed tomography (BCT) analysis an APC because the codes represent
physician services. As we do for all codes, we will
effective July 1, 2019. Through the July reevaluate the APC assignments for CPT
2019 OPPS quarterly update CR Response: We thank the commenter
codes 0555T, 0556T, and 0558T once
(Transmittal 4313, Change Request for its feedback. We are finalizing the
we have claims data. We remind
11318, dated May 24, 2019), we SIs and APC assignments for the codes.
hospitals that we review, on an annual
assigned these new codes to appropriate Table 17 below list the long descriptors
interim status indicators (SI) and APCs. and final SIs and APCs. The final CY basis, the APC assignments for all
Table 17 below lists the long descriptors 2020 payment rate for the codes can be services and items paid under the OPPS
and proposed SI and APCs of the codes. found in Addendum B to this final rule based on the latest claims data. ER12NO19.030</GPH>
3. Cardiac Magnetic Resonance (CMR) Comment: Some commenters $682.96.Another commenter expressed
Imaging (APC 5572) expressed concern with the placement concern with the payment stability for
of CPT code 75561 in APC 5572, and CPT code 75561. The commenter noted
For CY 2020, we proposed to stated that it is grouped with services that although the code is assigned to the
maintain the APC assignment for CPT that are not similar clinically or with same APC for CY 2020, the payment for
code 75561 (Cardiac magnetic resonance respect to resource use. As an example, the service is slated for another
imaging for morphology and function they observed that CPT code 75561 is reduction. The commenter observed that
without contrast material(s), followed unlike CT of the abdomen or pelvis or the payment rate for the service has
by contrast material(s) and further MRI of the neck and spine, and instead, decreased in the last several years and
sequences) to APC 5572 (Level 2 is more similar to those services in APC noted the following yearly rates:
Imaging with Contrast) with a proposed 5573 (Level 3 Imaging with Contrast), • CY 2017 OPPS payment rate: $426.52
payment rate of $373.45. • CY 2018 OPPS payment rate: $456.34
ER12NO19.031</GPH>
with a proposed payment rate of
• CY 2019 OPPS payment rate: $385.88 geometric mean costs reflect the levels based on the geometric mean
• CY 2020 OPPS proposed payment national average resources to furnish a costs for each APC. Clinically, all the
rate: $373.45 service in the hospital outpatient procedures in APCs 5111 through 5116
This same commenter reported that setting. To the extent that costs are similar in that they involve some
the code was previously included in a decrease, so too, would the payment form of musculoskeletal procedure. In
nuclear medicine APC, which it rate. addition, as stated in section III.B.2.
maintained was appropriate based on its In addition, with regard to the issue (Application of the 2 Times Rule) of this
clinical and resource homogeneity to of different hospital cost reporting final rule with comment, section
cardiovascular magnetic resonance and methods, we are unable to determine 1833(t)(2) of the Act provides that,
cardiac nuclear imaging services in the whether hospitals are misreporting the subject to certain exceptions, the items
APC, and that, since its APC procedure. It is generally not our policy and services within an APC group
reassignment, the payment for the to judge the accuracy of hospital cannot be considered comparable with
service has dropped. The commenter charging and coding for purposes of respect to the use of resources if the
believed that the different cost reporting ratesetting. We rely on hospitals to highest cost for an item or service in the
methods used by hospitals may accurately report the use of HCPCS group is more than 2 times greater than
contribute to the artificially low relative codes in accordance with their code the lowest cost for an item or service
payment weights and payment amounts descriptors and CPT and CMS within the same group (referred to as the
for CT and MR. instructions, and to appropriately report ‘‘2 times rule’’). While it may seem
services on claims and charges and costs appropriate to place one code in a
Response: For CY 2020, based on
for the services on their Medicare specific grouping, based on our 2 times
claims submitted between January 1,
hospital cost report. Also, we do not rule criteria, we must assign the code to
2018 through December 30, 2018, that
specify the methodologies that hospitals the appropriate APC based on its
were processed on or before June 30,
use to set charges for this or any other geometric mean cost.
2019, our analysis of the latest claims
service. Furthermore, we state in In summary, after consideration of the
data for this final rule continues to
Chapter 4 of the Medicare Claims public comments, we are finalizing our
support our proposal of assigning CPT
Processing Manual that ‘‘it is extremely proposal, without modification, to
code 75561 to APC 5572. Specifically,
important that hospitals report all assign CPT code 75561 to APC 5572.
our claims data show a geometric mean
HCPCS codes consistent with their The final CY 2020 payment rate for CPT
cost of approximately $413 for CPT code descriptors; CPT and/or CMS
75561 based on 14,350 single claims code 75561 can be found in Addendum
instructions and correct coding
(out of 18,118 total claims), which is B to this final rule with comment
principles, and all charges for all
comparable to the geometric mean cost period. In addition, we refer readers to
services they furnish, whether payment
of about $359 for APC 5572, rather than Addendum D1 of this final rule with
for the services is made separately paid
the geometric mean cost of comment period for the status indicator
or is packaged’’ to enable CMS to
approximately $660 for APC 5573. The (SI) meanings for all codes reported
establish future ratesetting for OPPS
geometric cost of approximately $413 under the OPPS. Both Addendum B and
services.
for CPT code 75561 is also consistent Comment: One commenter who D1 are available via the internet on the
with the costs for significant services in expressed concern with the APC CMS website.
APC 5572, which range between about assignment for CPT code 75561 also 4. CardioFluxTM Magnetocardiography
$269 (for CPT code 74174) to $515 (for requested that we address in the final (MCG) Myocardial Imaging (APC 5723)
CPT code 73525). Based on our analysis rule how we determine which services
of the latest claims data, we believe that are clinically similar. The commenter For CY 2020, we proposed to
CPT code 75561 is appropriately noted that CMS has constructed many maintain the APC assignment for CPT
assigned to APC 5572. APCs with a mix of imaging services code 0541T to APC 5722 (Level 2
With regards to the issue of payment that are dissimilar and yet preserves the Diagnostic Tests and Related Services)
stability, we note that Section clinical homogeneity of some APCs, with a proposed payment rate of
1833(t)(9)(A) of the Act requires the such as nuclear medicine services. $256.60. We also proposed to continue
Secretary to review, not less often than Response: Under the OPPS, each to assign CPT code 0541T, which is an
annually, and to revise the groups, service is assigned to an APC based on add-on code, to status indicator ‘‘N’’ to
relative payment weights, and the wage the clinical and resource similarity to indicate that the code is packaged and
and other adjustments to take into other services within the APC or family payment for it is included in the
account changes in medical practices, of APCS. The OPPS is a prospective primary procedure or service. In this
changes in technology, the addition of payment system under which payment case, the payment for 0542T is included
new services, new cost data, and other groupings (that is, APCs) are based on in CPT code 0541T. We note that CPT
relevant information and factors. clinical and resource similarity rather codes 0541T and 0542T are associated
Therefore, every year we review and than code-specific payment rates, which with the CardioFlux
revise the APC assignments based on would result in a cost-based fee magnetocardiography imaging
our evaluation of these factors using the schedule. For example APCs 5111– technology. Table 18 below lists the
latest OPPS claims data. While we 5116, which are described as Levels 1 long descriptors for the codes as well as
recognize the concerns about payment through 6 Musculoskeletal Procedures, the proposed SI and APC assignments.
stability, we note that changes made to all include services that involve Comment: A commenter disagreed
payment rates are based on our musculoskeletal services/procedures with the assignment to APC 5722 and
calculations of geometric mean costs and the various levels of that APC reported that the service associated with
from the most recently available family differentiate such procedures CPT code 0541T is not clinically and
Medicare claims and cost report data based on resource homogeneity. That is, resource comparable to the services in
analysis, which may or may not result the descriptors for APCs 5111 through the APC. The commenter stated that the
in payment increases and/or reductions 5116 are general and broadly describe a service is clinically comparable to the
based on the most recent geometric variety of musculoskeletal procedures, services that are assigned to APCs 5593
mean costs available. We note that the and are differentiated by the various and 5724, specifically:
• APC 5593 (Level 3 Nuclear utilization may be low, often because 95965 and 95966 since MEG procedures
Medicine), with a proposed payment providers are first learning about the involve the brain while the CardioFlux
rate of $ 1,293.33, which includes— techniques and their clinical utility. technology involves imaging of the
+ CPT code 78451 (Myocardial Quite often, the requests for higher heart. Also, we do not agree that
perfusion imaging); and payment amounts are for new CardioFlux MCG is similar to the
+ CPT code 78452 (Myocardial procedures in that transitional phase. myocardial perfusion scans described
perfusion imaging). These requests, and their accompanying by CPT codes 78451 and 78452 because
• APC 5724 (Level 4 Diagnostic Tests estimates for expected Medicare these scans involve the use of
and Related Services), with a proposed beneficiary or total patient utilization, radioactive tracers, specialized staff, and
payment rate of approximately $ 920.66, often reflect very low rates of patient more time as the test generally takes two
which includes— use, resulting in high per use costs for
+ CPT code 95965 to four hours to complete. Furthermore,
which requesters believe Medicare based on our findings, the CardioFlux
(Magnetoencephalography (MEG)); and should make full payment. Medicare
+ CPT code 95966 MCG scan is unlike other cardiac
does not, and we believe should not, imaging tests because it does not require
(Magnetoencephalography (MEG)). assume responsibility for more than its
The commenter indicated that this new or expose the patient to radiation, and
share of the costs of procedures based takes about 90 seconds to perform with
technology requires the use of very on Medicare beneficiary projected
expensive capital equipment, and added physician review and return of
utilization and does not set its payment
that the CardioFlux System costs about interpretation of the results in an
rates based on initial projections of low
$1.5 million with a useful life of seven estimated 5 minutes per patient.
utilization for services that require
years. The technology itself involves expensive capital equipment. However, based on our review of the
hospital site implementation and We note that in a budget neutral issue and feedback from our medical
ongoing operation. The commenter environment, payments may not fully advisors, as well as the anticipated
stated that the proposed payment does cover hospitals’ costs, including those operating costs per case derived from
not provide adequate payment for this for the purchase and maintenance of the public comment and publicly
novel technology. The commenter capital equipment. We rely on hospitals available information about the service,
expressed concern that the proposed to make their decisions regarding the we believe that CPT code 0541T should
low payment rate will severely limit acquisition of high cost equipment with be assigned to APC 5723 (Level 3
uptake of this new technology, and, the understanding that the Medicare Diagnostic Tests and Related Services)
consequently, urged CMS to reassign program must be careful to establish its rather than to APC 5722 (Level 2
CPT code 0541T to either APC 5593 or initial payment rates for new services Diagnostic Tests and Related Services).
APC 5724 to ensure patient access to that lack hospital claims data based on Because we have neither claims data nor
this emerging technology and its realistic utilization projections for all specific HOPD costs, including the cost
potential for savings to the Medicare such services delivered in cost-efficient to perform each exam (other than the
program. hospital outpatient settings. As the cost of the capital equipment that was
Response: Under the OPPS, one of our OPPS acquires claims data regarding supplied to us), we believe that APC
goals is to make payments that are hospital costs associated with new 5723 is the most appropriate assignment
appropriate for the services that are procedures, we annually review the at this time.
necessary for the treatment of Medicare claims data and any available new
beneficiaries. The OPPS, like other information regarding the clinical Therefore, after consideration of the
Medicare payment systems, is a aspects of new procedures to confirm public comment, we are finalizing our
prospective payment system. The that our OPPS payments remain proposal, with modification, to assign
payment rates that are established appropriate for procedures as they CPT code 0541T to APC 5723. Table 18
reflect the geometric mean costs transition into mainstream medical list the long descriptors and final SI and
associated with items and services practice. APC assignments for both codes. The
assigned to an APC and we believe that In addition, we note this new final CY 2020 payment rate for CPT
our payment rates generally reflect the technology is currently under clinical code 0541T can be found in Addendum
costs that are associated with providing trial (ClinicalTrials.gov Identifiers: B to this final rule with comment
care to Medicare beneficiaries in cost NCT03968809 and NCT04044391) and period. In addition, we refer readers to
efficient settings. Moreover, we strive to does not appear to be a service that is Addendum D1 of this final rule with
establish rates that are adequate to typically performed in an HOPD facility. comment period for the status indicator
ensure access to medically necessary Further, based on our clinical (SI) meanings for all codes reported
services for Medicare beneficiaries. evaluation, we do not agree that under the OPPS. Both Addendum B and
For many emerging technologies there CardioFlux MCG is similar to the MEG D1 are available via the internet on the
is a transitional period during which procedures described by CPT codes CMS website.
5. Cataract Removal With Endoscopic Comment: A commenter disagreed specified in 42 CFR 419.31(a)(1), CMS
Cyclophotocoagulation (ECP) (APC with the APC assignment and, based on classifies outpatient services and
5492) their analysis of the combined geometric procedures that are comparable
mean costs for the existing cataract and clinically and in terms of resource use
For CY 2020, the CPT Editorial Panel ECP procedures (CPT codes 66982, into APC groups. Also, as we stated in
established two new codes to describe 66984, and 66711), believed the new the CY 2012 OPPS/ASC final rule (76
cataract removal with endoscopic codes should be reassigned to APC 5492 FR 74224), the OPPS is a prospective
cyclophotocoagulation (ECP), (Level 2 Intraocular Procedures) with a payment system that provides payment
specifically, CPT codes 66987 and proposed payment rate of $3,867.16. for groups of services that share clinical
66988. As listed in Table 19 below with Four professional ophthalmology and resource use characteristics. It
the long descriptors, and also in organizations suggested that CMS should be noted that, with all new
Addendum B to the CY 2020 OPPS/ASC should establish the payment rate for codes, our policy has been to assign the
proposed rule, we proposed to assign CPT code 66987 based on the combined service or procedure to an APC based on
CPT code 66987 and 66988 to APC 5491 costs of CPT codes 66711 and 66982, feedback from a variety of sources,
(Level 1 Intraocular Procedures) with a and, similarly, determine the payment including but not limited to review of
proposed payment rate of $2,053.39. rate for CPT code 66988 based on the the clinical similarity of the service to
The codes were listed as 66X01 and combined costs of CPT codes 66711 and existing procedures; advice from CMS
66X02 (the 5-digit CMS placeholder 66984. They expressed concern that the medical advisors; information from
codes), respectively, in Addendum B proposed payment rates for the codes do interested specialty societies; and
with the short descriptors and again in not adequately capture the resources review of all other information available
Addendum O with the long descriptors. hospitals will expend for each to us, including information provided to
We also assigned the codes to comment combined procedure. us by the public, whether through
indicator ‘‘NP’’ in Addendum B to Response: APC assignment for a code meetings with stakeholders or
indicate that they are new for CY 2020 is not typically based on combined costs additional information that is mailed or
and that public comments would be of existing HCPCS codes, rather, it is otherwise communicated to us.
accepted on their proposed status based on similarity to other codes Based on our analysis of the public
indicator assignments. We note these within an APC based clinical comment and input from our medical
ER12NO19.032</GPH>
codes will be effective January 1, 2020. homogeneity and resource costs. As advisors, we believe that we should
revise the APC assignment for these new In summary, after consideration of the meanings for all codes reported under
cataract codes. We reviewed the public comments, we are finalizing our the OPPS. Both Addendum B and D1
components of the procedure associated proposal with modification, and are available via the internet on the
with CPT codes 66987 and 66988, and revising the APC assignment for CPT CMS website.
after our analysis, we agree with codes 66987 and 66988 to APC 5492 for
We note that we will reevaluate the
commenters that the resources CY 2020. Table 19 lists the final SI and
APC assignments for CPT codes 66987
associated with the new codes are APC assignments for the two codes. The
final CY 2020 payment rate for the and 66988 once we have claims data.
higher than the routine cataract and ECP We review, on an annual basis, the APC
procedures when performed by codes can be found in Addendum B to
this final rule with comment period. In assignments for all services and items
themselves. Therefore, we are paid under the OPPS based on the latest
addition, we refer readers to Addendum
reassigning the new codes from APC claims data that we have available.
D1 of this final rule with comment
5491 to APC 5492.
period for the status indicator (SI) BILLING CODE 4120–01–P
BILLING CODE 4120–01–C therapy in which T-cells are collected individual is observed for potential
6. Chimeric Antigen Receptor T-Cell and genetically engineered to express a serious side effects that would require
(CAR T) Therapy (APCs 5694, 9035, and chimeric antigen receptor that will bind medical intervention.
9194) to a certain protein on a patient’s Two CAR T-cell therapies received
cancerous cells. The CAR T-cells are FDA approval in 2017. KYMRIAH®
Chimeric Antigen Receptor (CAR) then administered to the patient to (manufactured by Novartis
ER12NO19.033</GPH>
T-cell therapy is a cell-based gene attack certain cancerous cells and the Pharmaceuticals Corporation) was
approved for use in the treatment of indicator ‘‘B’’ (Codes that are not ordered and performed by clinicians.
patients up to 25 years of age with B- recognized by OPPS when submitted on Finally, generally those advocating for
cell precursor acute lymphoblastic an outpatient hospital Part B bill type status indicator ‘‘Q1’’, indicating
leukemia (ALL) that is refractory or in (12x and 13x)) to indicate that the conditional separate payment,
second or later relapse. In May 2018, services are not paid under the OPPS. supported the HOP Panel’s
KYMRIAH® received FDA approval for The procedures described by CPT codes recommendation to assign this status
a second indication, treatment of adult 0537T, 0538T, and 0539T describe the indicator based on codes, such as CPT
patients with relapsed or refractory large various steps required to collect and code 0565T (placeholder code 05X3T)
B-cell lymphoma after two or more lines prepare the genetically modified T-cells, (Autologous cellular implant derived
of systemic therapy, including diffuse and Medicare does not generally pay from adipose tissue for the treatment of
large B-cell lymphoma (DLBCL), high separately for each step used to osteoarthritis of the knees; tissue
grade B-cell lymphoma, and DLBCL manufacture a drug or biological. harvesting and cellular implant
arising from follicular lymphoma. Additionally, we finalized that the creation). CPT code 0565T has a status
YESCARTA® (manufactured by Kite procedures described by CPT code indicator of ‘‘Q1’’ and commenters
Pharma, Inc.) was approved for use in 0540T would be assigned status believe it is similar to the procedures
the treatment of adult patients with indicator ‘‘S’’ (Procedure or Service, Not described by CPT codes 0537T, 0538T,
relapsed or refractory large B-cell Discounted when Multiple) and APC and 0539T, since CPT code 0565T
lymphoma and who have not responded 5694 (Level IV Drug Administration) for involves the collection and harvest of
to or who have relapsed after at least CY 2019. Additionally, the National cells, in the form of tissue, for the
two other kinds of treatment. Uniform Billing Committee (NUBC) treatment of osteoarthritis of the knee.
The HCPCS code to describe the use established CAR T-cell related revenue Additionally, commenters stated that
of KYMRIAH® (HCPCS code Q2042) has codes and value code to be reportable the HCPCS drug Q-codes (Q2041 and
been active since January 1, 2019 for on Hospital Outpatient Department Q2042) should be revised to eliminate
OPPS, which replaced HCPCS code (HOPD) claims effective for claims the language referencing leukapheresis
Q2040, active January 1, 2018 through received on or after April 1, 2019. and dose preparation procedures.
December 31, 2018, as discussed in the As listed in Addendum B of the CY
Response: We thank the commenters
CY2019 OPPS/ASC final rule with 2020 OPPS/ASC proposed rule, we
for their feedback. CMS does not believe
comment period. The HCPCS code to proposed to assign procedures described
that separate or packaged payment
describe the use of YESCARTA® by these CPT codes, 0537T, 0538T, and
(HCPCS code Q2041) has been active 0539T, to status indicator ‘‘B’’ (Codes under the OPPS is necessary for the
since April, 1, 2018 for OPPS. The that are not recognized by OPPS when procedures described by CPT codes
HCPCS Q-code for the currently submitted on an outpatient hospital Part 0537T, 0538T, and 0539T for CY2020.
approved CAR T-cell therapies include B bill type (12x and 13x)) to indicate The existing CAR T-cell therapies on the
leukapheresis and dose preparation that the services are not paid under the market were approved as biologics and,
procedures because these services are OPPS. We proposed to assign CPT code therefore, provisions of the Medicare
included in the manufacturing of these 0540T to status indicator ‘‘S’’ statute providing for payment for
biologicals. Both of these CAR T-cell (Procedure or Service, Not Discounted biological products apply. The
therapies were approved for transitional when Multiple) and APC 5694 (Level IV procedures described by CPT codes
pass-through payment status, effective Drug Administration). 0537T, 0538T, and 0539T describe the
April 1, 2018. The HCPCS codes that At the August 19, 2019 meeting, the various steps required to collect and
describe the use of these CAR T-cell HOP Panel recommended that CMS prepare the genetically modified T-cells
therapies were assigned status indicator reassign the status indicator for the and Medicare does not generally pay
‘‘G’’ in Addenda A and B to the CY2020 procedures described by the specific separately for each step used to
OPPS/ASC proposed rule. CPT codes 0537T, 0538T, and 0539T manufacture a drug or biological
As discussed in section V.A.4. (Drugs, from ‘‘B’’ to ‘‘Q1’’ for CY2020. product. Additionally, we note that CAR
Biologicals, and Radiopharmaceuticals Comment: Several commenters T-cell therapy is a unique therapy
with New or Continuing Pass-Through opposed our proposal to continue to approved as a biologic, with unique
Payment Status in CY 2019) of this final assign status indicator ‘‘B’’ to CPT codes preparation procedures, and it cannot be
rule with comment period, we are 0537T, 0538T, and 0539T for CY2020. directly compared to other therapies or
finalizing our proposal to continue pass- Commenters proposed a variety of existing CPT codes. We note that the
through payment status for HCPCS code alternative status indicators including current HCPCS coding for the currently
Q2042 and HCPCS code Q2041 for CY status indicators ‘‘N’’, ‘‘S’’, and ‘‘Q1.’’ approved CAR T-cell therapy drugs,
2020. In section V.A.4. of this final rule Commenters believed that CPT codes HCPCS codes Q2041 and Q2042,
with comment period, we also are 0537T, 0538T, and 0539T did not include leukapheresis and dose
finalizing our proposal to determine the represent the steps required to preparation procedures as these services
pass-through payment rate following the manufacture the CAR T product as CMS are including in the manufacturing of
standard ASP methodology, updating has stated. Generally, those advocating these biologicals. Therefore, payment
pass-through payment rates on a for status indicator ‘‘N’’ (Items and for these services is incorporated into
quarterly basis if applicable information Services Packaged into APC Rates) the drug Q-codes. We note that although
indicates that adjustments to the stated that this assignment would ease there is no payment associated with
payment rates are necessary. the billing burden and confusion 0537T, 0538T, and 0539T for reasons
The AMA created four Category III experienced by providers under the stated previously, these codes can still
CPT codes that are related to CAR T-cell current status indicator assignment of be reported to CMS for tracking
therapy, effective January 1, 2019. As ‘‘B’’. Generally, those advocating for purposes. Additionally, HOPDs can bill
discussed in the CY 2019 OPPS/ASC status indicator ‘‘S’’ (Procedure or Medicare for reasonable and necessary
final rule with comment period, we Service, Not Discounted When services that are otherwise payable
finalized our proposal to assign Multiple) believed that separate under the OPPS, and we believe that the
procedures described by CPT codes, payment is warranted for these services comments in reference to payment for
0537T, 0538T, and 0539T to status as they are distinct procedures and are services in settings not payable under
the OPPS are outside the scope of this Comment: Some commenters In summary, after consideration of the
proposed rule. recommended CMS evaluate public comments we received, we are
Accordingly, we are not revising the modifications to CAR T-cell payments finalizing our proposal to assign status
existing Q-codes for CAR T-cell for future rule making years, including indicator ‘‘B’’ to CPT codes 0537T,
therapies to remove leukapheresis and strategies such as creating a new 0538T, and 0539T for CY2020.
dose preparation procedures, and we are statutory benefit category for cell and Additionally, we are continuing our
not accepting the recommendations to gene therapies and value-based policy from CY2019 to assign status
revise the status indicators for payment. Specifically, commenters indicator ‘‘S’’ to CPT code 0540T for
procedures described by CPT codes suggested value-based payments could CY2020. Tables 20 and 21 below show
0537T, 0538T, and 0539T. We will include milestone-based payments over the final SI and APC assignments for
continue to evaluate and monitor our time, indication-based pricing or HCPCS codes Q2041, Q2042, 0537T,
payment for CAR T-cell therapies. combination-based pricing. 0538T, 0539T, and 0540T for CY 2020.
Comment: We note that commenters Response: We thank commenters for We refer readers to Addendum B to this
were supportive of the decision to their feedback. Currently, the existing final rule with comment period for the
continue the assignment of status CAR T-cell therapies on the market were payment rates for all codes reportable
indicator ‘‘S’’ (Procedure or Service, Not approved as biologics and, therefore, under the OPPS. Addendum B is
Discounted When Multiple) to CPT code provisions of the Medicare statute available via the internet on the CMS
0540T. providing for payment for biologicals website. In addition, we refer readers to
Response: We thank commenters for apply. In regards to the creation of a Addendum D1 to this final rule with
their support and are finalizing our new statutory benefit category, that is comment period for the complete list of
proposal to maintain status indicator out of the scope of existing CMS the OPPS payment status indicators and
‘‘S’’ for CPT code 0540T. statutory authority. their definitions for CY2020.
ER12NO19.034</GPH>
7. Colonoscopy and Sigmoidoscopy Based on clinical and resource procedures. Therefore, we are
With Endoscopic Mucosal Resection homogeneity, the commenter requested reassigning the codes from APC 5312 to
(EMR) (APC 5313) a reassignment from APC 5312 to APC APC 5313 for CY 2020.
For CY 2020, we proposed to continue 5313 (Level 3 Lower GI Procedures), In summary, after consideration of the
to assign CPT codes 45349 and 45390 to which had a proposed payment rate of
public comment, we are finalizing our
APC 5312 (Level 2 Lower GI $2,512.28, for CPT code 45349 and
proposal with modification, and
Procedures), with a proposed payment 45390
Response: Upon review of data revising the APC assignment for 45349
rate of $1,024.08. The long descriptors and 45390 from APC 5312 to APC 5313
and proposed SI and APC assignments available for this final rule with
comment period, we agree with the for CY 2020. Table 22 lists the final SI
for both codes can be found in Table 22 and APC assignments for the two codes.
below. commenter that the most appropriate
assignment for both codes is APC 5313. The final CY 2020 payment rate for the
Comment: A commenter believed that
the two procedures are different from Based on the latest hospital outpatient codes can be found in Addendum B to
the other procedures currently assigned claims data used for this final rule with this final rule with comment period. In
to APC 5312, and stated they are more comment period, our analysis supports addition, we refer readers to Addendum
similar to these procedures that are the reassignment for the codes to APC D1 of this final rule with comment
assigned to APC 5313: 5313. Specifically, our analysis of the period for the status indicator (SI)
• 46610 (Anoscopy; with removal of claims data show a geometric mean cost meanings for all codes reported under
single tumor, polyp, or other lesion by of approximately $1,941 for CPT code the OPPS. Both Addendum B and D1
hot biopsy forceps or bipolar cautery); 45349 based on 386 single claims (out are available via the internet on the
• 46612 (Anoscopy; with removal of of 387 total claims), and a geometric CMS website.
multiple tumors, polyps, or other mean cost of about $2,039 for CPT code
45390 based on 10,212 single claims As we do every year, we will
lesions by hot biopsy forceps, bipolar
(out of 10,246). In both instances, the reevaluate the APC assignment for CPT
cautery or snare technique); and
• 46615 (Anoscopy; with ablation of geometric mean cost for the codes are codes 45349 and 45390 in the next
tumor(s), polyp(s), or other lesion(s) not most compatible with APC 5313, whose rulemaking cycle. We remind hospitals
amenable to removal by hot biopsy geometric mean cost is approximately that we review, on an annual basis, the
forceps, bipolar cautery or snare $2,294, compared to APC 5312, whose APC assignments for all services and
technique) where lesions are being geometric mean cost is about $983. We items paid under the OPPS based on the
removed by methods other than just the believe that maintaining both codes in latest claims data available to us.
snare wire technique. APC 5312 would underpay for the
ER12NO19.035</GPH>
8. Coronary Computed Tomographic Endovascular Procedures) with a • APC 5573 (with a geometric mean
Angiography (CCTA) (APC 5571) proposed payment rate of $2,899.34 and cost of approximately $660)
For CY 2020, we proposed to continue believed the service is very similar to a • APC 5191 (with a geometric mean
to assign CPT codes 75572, 75573, and cardiac catheterization procedure that is cost of about $2,788)
75574 to APC 5571 (Level 1 Imaging described by CPT code 93455 (Catheter In our analysis to determine the cause
with Contrast) with a proposed payment placement in coronary artery(s) for of the decreased payment rates for the
rate of $179.91. The long descriptors coronary angiography, including last several years, we also reviewed our
and proposed status indicator (SI) and intraprocedural injection(s) for coronary claims data to determine whether
APC assignments for the codes can be angiography, imaging supervision and changes in payment for certain
found in Table 23 below. interpretation; with catheter computed tomography (CT) services
Comment: Many commenters placement(s) in bypass graft(s) (internal impacted the OPPS payment rates.
expressed concern with the decreased mammary, free arterial, venous grafts) Specifically, section 218(a)(1) of the
reimbursement for the codes and stated including intraprocedural injection(s) Protecting Access to Medicare Act of
that the proposed payment rate for bypass graft angiography). This same 2014 (PAMA) (Pub. L. 113–93) amended
underestimates the resources necessary commenter suggested that the less- section 1834 of the Act by establishing
to provide the service. They noted this intensive CPT codes 75572 and 75573 a new subsection 1834(p). Effective for
is the third consecutive year of be reassigned to APC 5572. services furnished on or after January 1,
decreased reimbursement for cardiac 2016, section 1834(p) of the Act reduces
Response: CPT codes 75572, 75573, payment for the technical component
CT. Some commenters added that the and 75574 were effective January 1,
exams described by CPT codes 75572, (TC) of applicable CT services paid
2010, and prior to that they were under the MPFS and applicable CT
75573, and 75574 require more described by Category III CPT codes
resources than the contrast-enhanced services paid under the OPPS, with a 5-
from January 1, 2006 through December percent reduction required in 2016 and
studies in APC 5571 because they 31, 2009; therefore, we have many years
require more time, are performed by a 15-percent reduction required in 2017
of claims data associated with these and subsequent years. The applicable
highly trained technologists, involve
services. For this final rule with CT services are identified by HCPCS
higher risk patients, require
comment period, based on claims codes 70450 through 70498; 71250
administration of vasoactive
submitted between January 1, 2018 through 71275; 72125 through 72133;
medications, and require close
through December 30, 2018, that were 72191 through 72194; 73200 through
supervision of patients during and after
processed on or before June 30, 2019, 73206; 73700 through 73706; 74150
the procedure. A commenter urged CMS
our analysis of the latest claims data for through 74178; 74261 through 74263;
to reassign the codes to a higher paying
this final rule supports maintaining CPT and 75571 through 75574 (and any
APC that is more resource intensive and
codes 75572, 75573, and 75574 in APC succeeding codes) for services furnished
includes procedures that share similar
5571. Specifically, our claims data show using equipment that does not meet
clinical characteristics, such as APC
5572 (Level 2 Imaging with Contrast), a geometric mean cost of approximately each of the attributes of the National
which had a proposed payment rate of $159 for CPT code 75572 based on Electrical Manufacturers Association
$373.45, or APC 5573 (Level 3 Imaging 12,299 single claims (out of 23,902 total (NEMA) Standard XR–29–2013, entitled
with Contrast), which had a proposed claims), $185 for CPT code 75573 based ‘‘Standard Attributes on CT Equipment
payment rate of $682.96. Other on 323 single claims (out of 466 total Related to Dose Optimization and
commenters specifically requested a claims), and $196 for CPT code 75574 Management.’’
reassignment to APC 5573 based on based on 25,434 single claims (out of In the CY 2016 OPPS/ASC final rule
clinical and resource homogeneity to 40,219 total claims). Because the with comment period (80 FR 70470), we
these services that are assigned to the geometric mean costs for the CCTA established a new ‘‘CT’’ modifier to be
APC: Stress cardiac magnetic resonance codes range are between $159 and $196, used on claims that include CT services
imaging (CPT code 75563), stress we believe it would be inappropriate to furnished using equipment that does not
echocardiography (HCPCS codes C8928, reassign the codes to these suggested meet each of the attributes of NEMA
C8930), and nuclear SPECT MPI (CPT APCs because their geometric mean Standard XR–29–2013. Hospitals are
codes 78451, 78452). One commenter costs are significantly higher: required to report the ‘‘CT’’ modifier on
recommended the reassignment of CPT • APC 5572 (with geometric mean claims for CT scans described by any of
ER12NO19.036</GPH>
code 75574 to APC 5191 (Level 1 cost of about $359) the HCPCS codes we identified (and any
successor codes) that are furnished on for modeling purposes. The application In summary, after consideration of the
non-NEMA Standard XR–29–2013- of the payment reductions associated public comments and after our analysis
compliant CT scanners. The use of this with the CT modifier only occurs after of the latest claims data, we are
modifier results in the applicable the prospective OPPS payments are finalizing our proposal, without
payment reduction for the CT service, as already calculated. modification, to assign CPT codes
specified under section 1834(p) of the Comment: Some commenters 75572, 75573, and 75574 to APC 5571
Act. recommended the establishment of a for CY 2020. Table 23 lists the final SI
Based on our analysis, we observed and APC assignments for the three
new cost center specific to CCTA. They
declining use of the CT modifier in both codes. The final CY 2020 payment rate
noted that hospitals currently do not
billing volume and the number of for the codes can be found in
submit any cost center data for cardiac
providers using the modifier over the Addendum B to this final rule with
CT services.
past several years. Further, we note that comment period (which is available via
the payment reduction required by Response: We thank the commenters the internet on the CMS website).
section 1834(p), as amended by section for their suggestion. CMS is currently As we do every year, we will
218(a)(1) of PAMA, does not directly reviewing non-standard cost centers reevaluate the APC assignment for CPT
affect the geometric mean costs under used frequently in the Medicare cost codes 75572, 75573, and 75574 for the
the OPPS, because we do not use report in order to establish additional next rulemaking cycle. We remind
payment rates to establish CCRs, rather standardized reporting. We will hospitals that we review, on an annual
we use the charges submitted by consider the establishment of a new cost basis, the APC assignments for all
hospitals on claims and costs estimated center specific to cardiac CT services in services and items paid under the OPPS
through applying the cost report CCRs our review. based on the latest claims data.
ER12NO19.037</GPH>
9. Deep Brain Stimulation (DBS) 15 minutes face-to-face time with presenter indicated that the service of
Programming (APC 5742) physician or other qualified health care providing DBS programming during
In CY 2018, the DBS programming professional, to APC code 5472, Level II 2018 and 2019 are the same, but because
codes were described by CPT code Electronic Analysis of Devices, if the of the coding change that packages any
95978 (first 60 minutes), which was final data that are available in time for service after each additional 15 minutes,
assigned to APC 5742, with a payment consideration of the Final Rule are the maximum payment that a hospital
of $115.18, and CPT code 95979 (each consistent with preliminary data.’’ would receive for the service is a single
additional 30 minutes), which was For CY 2020, we proposed to continue unit of the code. The presenter
assigned to SI ‘‘N’’ to indicate that the to assign CPT code 95983 to APC 5741 recommended a change in the APC
code is packaged since it is an add-on (Level 1 Electronic Analysis of Devices) assignment to APC 5742 so that
code. For CY 2019, the CPT Editorial with a proposed payment rate of $36.81. hospitals receive adequate payment for
Panel deleted CPT code 95978 and In addition, we proposed to continue to the service based on the coding
replaced it with CPT code 95983 (first assign CPT code 95984 to status structure of the replacement codes.
15 minutes) effective January 1, 2019. indicator (SI) ‘‘N’’ to indicate that the As recommended by the HOP Panel,
Similarly, CPT code 95979 was deleted code is an add-on that is packaged and we reviewed the claims data associated
and replaced with CPT code 95984 payment for it is included in the with the predecessor code (CPT code
(each additional 15 minutes) effective primary service. In this case, the 95978). Based on the latest hospital
January 1, 2019. As a result of this payment for the add-on code is included outpatient claims data used for this final
coding change, we assigned the 15- in CPT code 95983. rule with comment period, our analysis
minute CPT code 95983 to APC 5741 Comment: Several commenters reveals a geometric mean cost of
(Level 1 Electronic Analysis of Devices) requested the reassignment of CPT code approximately $109 for the code, which
with a payment rate of $37.16, and 95983 to APC 5742. One commenter is consistent with the geometric mean
assigned CPT code 95984 to ‘‘N’’ to stated that the assignment of the cost of about $111 for APC 5742
indicate that the code is packaged primary CPT code 95983 to the lower compared to APC 5741 whose geometric
because it describes an add-on service, level APC 5741 is not appropriate mean cost is about $35. Based on the
which is similar to the SI for its because the overall time and resources information presented at the HOP Panel
predecessor code (CPT code 95979). expended by a hospital when furnishing Meeting, the Panel’s recommendation,
Table 24 below list the long descriptors this service in the HOPD setting remains as well as the final rule claims data, we
and proposed SI and APC assignments the same, even if the units are billed agree with the commenters that APC
for CPT codes 95983 and 95984. differently. This same commenter 5741 may not adequately reflect the
At the August 21, 2019 HOP Panel indicated that, based on the coding resources to provide the service
Meeting, a presenter requested that the descriptor for the replacement codes described by CPT code 95983 and are,
15-minute CPT code 95983 be with the primary service described as therefore, modifying the assignment for
reassigned to APC 5742. The presenter the first 15-minutes and the secondary CPT code 95983 to APC 5742.
added that the cost of providing the service as each additional 15-minutes, In summary, after consideration of the
service from 2018 to 2019 has not hospitals will continue to receive a public comments and the presentation
changed but the reimbursement has single line-item payment for the service, at the August 21 HOP Panel Meeting, we
reduced the hospital payment by about with the payment for the add-on CPT are finalizing our proposal, with
$100. The presenter requested an APC code packaged into it, regardless of the modification, and revising the APC
modification for CPT code 95983 from number of units billed. Another assignment for CPT code 95983 to APC
APC 5741 to APC 5742 so that hospitals commenter stated that reassigning the 5742 for CY 2020. Table 24 list the final
receive adequate payment for providing code from APC 5741 to APC 5742 will SI and APC assignments for CPT code
the service. Based on the information have no effect on the geometric mean 95983 and 95984. The final CY 2020
presented at the meeting, the HOP Panel cost of either APC. Another commenter payment rate for CPT code 95983 can be
recommended a reassignment to APC requested the reassignment based on the found in Addendum B to this final rule
5742 for CPT code 95983. Specifically, geometric mean cost of approximately with comment period. In addition, we
the Panel recommended that ‘‘CMS $109 for the predecessor code (CPT code refer readers to Addendum D1 of this
move HCPCS code 95983, Electronic 95978) and the Panel’s recommendation final rule with comment period for the
analysis of implanted neurostimulator at the August 19, 2019 HOP Panel status indicator (SI) meanings for all
pulse generator/transmitter (e.g., contact Meeting. codes reported under the OPPS. Both
group[s], interleaving, amplitude, pulse Response: As noted above, the Addendum B and D1 are available via
width, frequency [hz], on/off cycling, predecessor CPT code 95978 described the internet on the CMS website.
burst, magnet mode, dose lockout, a 60-minute service, while the As we do every year, we will
patient selectable parameters, replacement code—CPT code 95983— reevaluate the APC assignment for CPT
responsive neurostimulation, detection describes a 15-minute service. Based on code 95983 for the next rulemaking
algorithms, closed loop parameters, and the new time specified in the descriptor cycle. We remind hospitals that we
passive parameters) by physician or for CPT code 95983, we believed that review, on an annual basis, the APC
other qualified health care professional; assigning the replacement code to APC assignments for all services and items
with brain neurostimulator pulse 5741 was appropriate. However, at the paid under the OPPS.
generator/transmitter programming, first August 21, 2019 HOP Panel meeting, the BILLING CODE 4120–01–P
ER12NO19.038</GPH>
BILLING CODE 4120–01–C assignments for certain urology geometric mean cost of approximately
10. Extracorporeal Shock Wave procedures. $3,265 for CPT code 50590 did not
Lithotripsy (ESWL) (APC 5374) We received many comments on the support its continued assignment to
APC reassignment for the extracorporeal APC 5375, which had a geometric mean
For the CY 2019 OPPS/ASC final rule, shock wave lithotripsy (ESWL) cost of about $4,055. We believed that
we reviewed all of the procedures procedure, which is described by CPT we would have significantly overpaid
assigned to the Urology Procedures code 50590 (Lithotripsy, extracorporeal for the procedure had we maintained
APCs, specifically, APCs 5371 through shock wave), in the CY 2019 OPPS/ASC the assignment to APC 5375.
5377, and made some modifications to final rule with comment period. The Consequently, we revised the APC
more appropriately reflect the resource commenters indicated there was no assignment for CPT code 50590 to APC
costs and clinical characteristics of the discussion in the preamble on the 5374, which had a geometric mean cost
services within each APC grouping. reassignment of the code from APC 5375 of approximately $2,952 for CY 2019.
Specifically, we revised the APC (Level 5 Urology and Related Services) We note that the SI and APC
assignment of the procedures assigned to APC 5374 (Level 4 Urology and assignment for CPT code 50590 were
to the family of Urology APCs to more Related Services), and they disagreed subject to comment in the CY 2019
appropriately reflect a prospective with the revision and believed that APC OPPS/ASC proposed rule but not in the
payment system that is based on 5375 was the more appropriate CY 2019 OPPS/ASC final rule with
payment groupings and not code- assignment for the code. We remind the comment period. Nevertheless, we
specific payment rates, while commenters that, as we have stated in received comments on this specific
maintaining clinical and resource every OPPS/ASC proposed and final issue in response to the CY 2019 OPPS/
homogeneity. As we stated in the CY rules, we review, on an annual basis, the ASC final rule with comment period.
2019 OPPS/ASC final rule (83 FR APC assignments for all services and Because CPT code 50590 was not
58900), this modification was based on items paid under the OPPS based on our assigned to comment indicator ‘‘NI’’ in
public comments we received in analysis of the latest claims data. Based the final rule because it was not a new
response to the CY 2019 OPPS/ASC on updated claims data for the final rule code for CY 2019, and therefore, the
ER12NO19.039</GPH>
proposed rule on the proposed APC for CY 2019, we found that the comments received related to this code
were out-of-scope. Nonetheless, we Response: As discussed above, we clinical differences. While the
discuss above to provide some clarity to revised the APC assignment for CPT commenters expected that these clinical
this issue. code 50590 based on our analysis of the differences may result in similar or
For CY 2020, as listed in Addendum latest claims data for the CY 2019 final higher resources for CPT code 50590
B to the proposed rule, we proposed to rule. For this final rule with comment compared to CPT codes 52353 and
maintain the APC assignment for CPT period, which is based on claims 52356, that has not been borne out in
code 50590 to APC 5374 with a submitted between January 1, 2018 the Medicare data we have available. As
proposed payment rate of $3,059.21. through December 30, 2018, that were we do every year, we will review the
Comment: Some commenters processed on or before June 30, 2019, claims data associated with CPT code
requested that we restore the code to our findings do not support a 50590 to determine its appropriate APC
APC 5375 where it had been placed for reassignment to APC 5375. Instead, our placement for the next rulemaking
several years prior to CY 2019. The analysis supports retaining CPT code update.
commenters indicated that CPT code 50590 in APC 5374. Specifically, our Comment: Some commenters
50590 is similar to two ureteroscopy data reveal a geometric mean cost of suggested, based on their analysis of the
with lithotripsy (URSL) procedures that approximately $3,247 for CPT code OPPS Limited Data Sets (LDS) for the
are assigned to APC 5375, specifically: 50590 based on 40,009 single claims CY 2018 OPPS/ASC final rule, the CY
• CPT code 52353 (out of 40,351 total claims). The 2019 OPPS/ASC final rule, and the CY
(Cystourethroscopy, with ureteroscopy geometric mean cost for APC 5374 is 2020 OPPS/ASC proposed rule, that the
and/or pyeloscopy; with lithotripsy about $2,953 while APC 5375 shows a methodology formula that was supplied
(ureteral catheterization is included)); geometric mean cost of approximately with the LDS materials was flawed and,
and $4,140. Based on the geometric mean therefore, they were unable to validate
• CPT code 52356 CMS’s calculation or the accuracy of the
cost, we believe that maintaining CPT
(Cystourethroscopy, with ureteroscopy cost data upon which CMS relied to
code in APC 5374 is more appropriate
and/or pyeloscopy; with lithotripsy determine the payment rates. In
than reassigning it to APC 5375, based
including insertion of indwelling addition, these same commenters
on the geometric mean cost of CPT code
ureteral stent (e.g., gibbons or double-j suggested that because hospitals do not
50590 relative to that of APCs 5374 and
type)). generally own lithotripters, they would
In addition, some commenters 5375.
not be surprised if the cost reports for
suggested that placing the three In addition, we note that the resource CPT code 50590 were inaccurate.
procedures in two separate APCs may costs associated with the URSL Response: It is generally not our
create an unintended consequence of procedures (CPT codes 52353 and policy to judge the accuracy of hospital
unplanned admissions to the hospital. 52356) are higher than that of ESWL coding and charging for purposes of
Specifically, the commenters indicated (CPT code 50590). Specifically, the ratesetting. We rely on hospitals to
that if the proposed assignment for CPT geometric mean cost for CPT code 50590 accurately report the use of HCPCS
code 50590 is finalized in APC 5374, for CY 2020 is $3,247 while the codes in accordance with their code
while CPT codes 52353 and 52356 are geometric mean cost for CPT codes descriptors and CPT and CMS
finalized in APC 5375, hospitals might 52353 and 52356 are $3,740 and $4,361, instructions, and to report services on
discontinue ESWL services (described respectively. The geometric mean cost claims and charges and costs for the
by CPT code 50590) which would make of $3,247 for CPT code 50590 falls services on their Medicare hospital cost
it less accessible to Medicare within APC 5374, whose geometric report appropriately. We do not specify
beneficiaries and, ultimately, encourage mean costs for the significant the methodologies that hospitals use to
hospitals to perform more URSL procedures range between $2,495 (for set charges for this or any other service.
procedures, which, according to the CPT code 52351) and $3,472 (for CPT In addition, we state in Chapter 4 of the
commenter, have higher complication code 52318), while the geometric mean Medicare Claims Processing Manual
rates compared to ESWL. These costs of $3,740 and $4,361 for CPT that ‘‘it is extremely important that
commenters asserted that 90 percent of codes 52353 and 52356, respectively, hospitals report all HCPCS codes
Medicare patients require an indwelling fall within APC 5375, whose geometric consistent with their descriptors; CPT
ureteral stent after a URSL procedure mean costs for the significant and/or CMS instructions and correct
(described by CPT codes 52353 and procedures range between $3,575 (for coding principles, and all charges for all
52356), and that the stents lead to CPT code 52630) and $5,655 (for CPT services they furnish, whether payment
infection, visits to the ER, and code 55875). Although all three for the services is made separately paid
unplanned admissions. Hence, the procedures are used for the treatment of or is packaged’’ to enable CMS to
commenters requested an APC kidney stones, we disagree that CPT establish future ratesetting for OPPS
reassignment to APC 5375 for CPT code codes 50590, 52353, and 52356 are services.
50590 to eliminate any unintended similar based on resource and clinical Comment: To pay appropriately for
consequences. homogeneity. With regards to CPT code 50590, some commenters
Further, the commenters noted that unintended consequences as a result of suggested adding the cost of a ureteral
because of the capital equipment the assignment to APC 5374 for CPT stent in calculating the geometric mean
expense associated with purchasing code 50590, we rely on physicians to cost since some procedures (less than 20
($500,000) and maintaining ($65,000 per provide appropriate care based on the percent) require the device. They noted
year) a lithotripter, hospitals rarely own needs of their patients. While the that the URSL procedure described by
their own lithotripter and generally payment rate for services assigned to CPT code 52356 requires the insertion
contract under arrangement with APC 5375 is higher than that of APC of a ureteral stent that costs $609.16.
suppliers to provide the service. 5374, it is based on the relative Response: Geometric mean costs are
Alternatively, the commenter asserted resources associated with furnishing the determined based on the costs reported
that all URSL equipment is owned by services assigned to that APC. While on the claim. If the CPT code descriptor
the hospitals furnishing the service and each of the lithotripsy procedures have describes the insertion of a device, we
that the hospitals are therefore able to some clinical similarity, as the would expect the device cost to be
train clinicians on the equipment. commenters pointed out, they have packaged into the cost of the procedure
since the charges associated with the are available via the internet on the applying for Medicare national coverage
device and its insertion should be CMS website. for the clinical trial as a Category B IDE
reflected in claims submitted to As always, we will reevaluate the study. The commenter requested that
Medicare. We note that the CPT code APC assignment for CPT code 50590 for we crosswalk the new codes to the SIs
descriptor for the URSL procedures the next rulemaking cycle. As stated and APC assignments of comparable
(CPT codes 52353 and 52356) describes above, we review, on an annual basis, procedures involving ICD placement so
the use of stents, consequently, the the APC assignments for all services and that appropriate hospital outpatient
geometric mean cost for the procedures items paid under the OPPS. payment may be made in the event the
include the packaged cost of the Category B IDE study is approved for
11. Extravascular Implantable
devices. However, the CPT code Medicare coverage. The commenter
Cardioverter Defibrillator (EV ICD)
descriptor for the ESWL procedure does listed the comparable codes with the SI
not describe the use of a ureteral stent, As displayed in Table 25 and in and APCs assignments.
so we disagree that device costs for a Addendum B to the CY 2020 OPPS/ASC Response: Based on our review, the
ureteral stent should be included in CPT proposed rule, we proposed to assign clinical trial has not met Medicare’s
code 50590. If a ureteral stent were CPT codes 0571T through 0580T to standards for coverage, nor does it
involved in an ESWL procedure, HOPDs status indicator (SI) ‘‘E1’’ to indicate appear on the CMS Approved IDE List,
should report the CPT code that that the codes are not payable by which can be found at this CMS
appropriately describes the procedure Medicare when submitted on outpatient website: https://www.cms.gov/
performed. Moreover, as we have stated claims (any outpatient bill type) because Medicare/Coverage/IDE/Approved-IDE-
previously, we rely on HOPDs to the services associated with these codes Studies.html. Because the clinical trial
accurately report all HCPCS codes are either not covered by any Medicare associated with these codes has not
outpatient benefit category, are been approved for Medicare coverage,
consistent with their descriptors; CPT
statutorily excluded from Medicare we believe we should continue to assign
and/or CMS instructions and correct
payment, or are not reasonable and CPT codes 0571T through 0580T to
coding principles, and all charges for all
necessary. The codes were listed as status indicator ‘‘E1’’ for CY 2020. If
services they furnish, whether payment
06X0T through and 07X4T (the 5-digit Medicare approves the clinical trial as a
for the services is made separately paid
CMS placeholder codes) in Addendum Category B IDE study, we will reassess
or is packaged. B with the short descriptors, and again the SI and APC assignments for the
In summary, after consideration of the in Addendum O with the long codes.
public comments and after our analysis descriptors. We also assigned the codes Therefore, after consideration of the
of the updated claims data for this final to comment indicator ‘‘NP’’ in public comment received, we are
rule with comment period, we are Addendum B to indicate that they are finalizing our proposal without
finalizing our proposal, without new for CY 2020 and that public modification for CPT codes 0571T
modification, to continue to assign CPT comments would be accepted on their through 0580T. The final status
code 50590 to APC 5374 for CY 2020. proposed status indicator assignments. indicator assignments for both codes are
The final CY 2020 payment rate for the We note that these codes will be listed in Table 25 below. We refer
code can be found in Addendum B to effective January 1, 2020. readers to Addendum D1 of this final
this final rule with comment period. In Comment: A commenter reported that rule with comment period for the
addition, we refer readers to Addendum the device associated with these codes complete list of the OPPS payment
D1 of this final rule with comment is in a clinical trial and also received status indicators and their definitions
period for the status indicator (SI) FDA approval with an IDE Category B for CY 2020. Addendum D1 is available
meanings for all codes reported under designation. The commenter added that via the internet on the CMS website.
the OPPS. Both Addendum B and D1 they are currently in the process of BILLING CODE 4120–01–P
ER12NO19.040</GPH>
BILLING CODE 4120–01–C 64624 to APC 5443 (Level 3 Nerve indicator assignments. We note that
12. Genicular and Sacroiliac Joint Nerve Injections) with a proposed payment these codes will be effective January 1,
Injections/Procedures (APCs 5442 and rate of $808.58. In addition, we 2020.
5431) proposed to assign CPT code 64625 to Comment: Several commenters
APC 5431 (Level 1 Nerve Procedures) disagreed with the APC assignment for
For CY 2020, the CPT Editorial Panel with a proposed payment rate of CPT code 64624 (shown in the proposed
established four new codes to describe $1,747.26. CPT codes 64451, 64454, rule with placeholder code 64XX1) and
genicular and sacroiliac joint nerve suggested that it would be more
64624, and 64625 were listed as 6XX00,
injections and procedures. As listed in appropriate, based on clinical
64XX0, 64XX1, and 6XX01 (the 5-digit
Table 26 below with the long homogeneity, to assign it to APC 5431,
descriptors, and also in Addendum B to CMS placeholder codes), respectively,
where similar radiofrequency ablation
the CY 2020 OPPS/ASC proposed rule, in Addendum B with the short procedures are assigned, specifically,
we proposed to assign CPT codes 64451 descriptors, and again in Addendum O CPT codes 64633 (Destruction by
and 64454 to APC 5442 (Level 2 Nerve with the long descriptors. We also neurolytic agent, paravertebral facet
Injections) with a proposed payment assigned these codes to comment joint nerve(s), with imaging guidance
rate of $627.39. We note both CPT codes indicator ‘‘NP’’ in Addendum B to (fluoroscopy or ct); cervical or thoracic,
64451 and 64454 describe therapeutic indicate that the codes are new for CY single facet joint), 64635 (Destruction by
and/or diagnostic injection procedures. 2020 and that public comments would neurolytic agent, paravertebral facet
be accepted on their proposed status
ER12NO19.041</GPH>
We also proposed to assign CPT code joint nerve(s), with imaging guidance
(fluoroscopy or ct); lumbar or sacral, reimbursement for the procedure and assignments for CPT codes 64451,
single facet joint), and new CPT code enable providers to offer patients with 64454, and 64425 to the APCs listed in
64625. Several commenters reported chronic knee pain an effective Table 26. In addition, we are revising
that, unlike CPT code 64640 alternative to systemic opioids. the APC assignment for CPT code 64624
(Destruction by neurolytic agent; other Response: After consideration of the from APC 5443 to APC 5431. Table 26
peripheral nerve or branch) which only public comments, and based on the lists the long descriptors for the codes,
involves one nerve, the procedure characteristics of the procedure, as well as well as the final APC and SI
described by CPT code 64624 requires as input from our medical advisors, we assignments for all four codes. The final
more expensive medical equipment and believe that it would be appropriate to CY 2020 payment rate for the codes can
supplies and involves the destruction of revise the APC assignment for CPT code be found in Addendum B to this final
64624 from APC 5443 to APC 5431. We rule with comment period. In addition,
three nerves. Most commenters agreed
agree with the commenters that this new we refer readers to Addendum D1 of
that the procedure is not a nerve
procedure shares similar characteristics this final rule with comment period for
injection. One commenter explained
with CPT codes 64633 and 64635 that the status indicator (SI) meanings for all
that the procedure describes the are assigned to APC 5431.
destruction of three nerve branches at codes reported under the OPPS. Both
Comment: A commenter agreed with Addendum B and D1 are available via
three locations in the knee, and the the proposed APC assignments for CPT
destruction is typically done via the internet on the CMS website.
codes 64451, 64454, and 64425.
radiofrequency ablation similar to those Response: We thank the commenter As always, we will reevaluate the
procedures described by CPT codes for their feedback and are finalizing the APC assignment for these codes once we
64633 and 64635 that are assigned to APC assignments for these codes. have claims data. We review, on an
APC 5431. Another commenter In summary, after consideration of the annual basis, the APC assignments for
suggested that reassigning CPT code public comments, we are finalizing our all services and items paid under the
64624 to APC 5431, similar to new CPT proposal with modification. OPPS based on the latest claims data
code 64625, would provide adequate Specifically, we are finalizing the APC that we have available.
13. FemBloc® and FemChec® payment rate of $34.33. The codes were procedure code from APC 5414 to APC
For CY 2020, the CPT Editorial Panel listed as 05X1T and 05X2T (the 5-digit 5415 (Level 5 Gynecologic Procedures)
established two new codes to describe CMS placeholder codes), respectively, with a proposed payment rate of
FemBloc (0567T) and FemChec (0568T). in Addendum B with the short $4,426.45. The commenter noted that
As listed in Table 27 with the long descriptors, and again in Addendum O the single-use, disposable device
descriptors, and in Addendum B to the with the long descriptors. We also associated with the code contains two
CY 2020 OPPS/ASC proposed rule, we assigned these codes to comment deployable and retractable balloon
proposed to assign CPT code 0567T to indicator ‘‘NP’’ in Addendum B to catheters and a biopolymer that retails
APC 5414 (Level 4 Gynecologic indicate that the codes are new for CY for $1,800. The commenter believes the
Procedures) and status indicator (SI) 2020 and that public comments would procedure more appropriately fits in
‘‘J1’’ (Hospital Part B services paid be accepted on their proposed status APC 5415 based on its similarity to CPT
through a comprehensive APC) with a indicator assignments. We note these code 58565 (Hysteroscopy, surgical;
payment rate of $2,564.60. In addition, codes will be effective January 1, 2020. with bilateral fallopian tube cannulation
we proposed to assign new CPT code Comment: A medical technology to induce occlusion by placement of
0568T to APC 5732 (Level 2 Minor company disagreed with the proposed permanent implants). Specifically, the
Procedures) and status indicator ‘‘Q1’’ APC assignment for CPT code 0567T commenter explained that in both
ER12NO19.042</GPH>
(conditionally packaged) with a and suggested that we reassign the procedures, specifically CPT codes
58565 and 0567T, the entrances to the with FemChec. Specifically, the approval, we believe that we should
fallopian tubes are accessed and a commenter requested the reassignment reassign CPT code 0568T to status
device is placed that causes permanent for CPT code 0568T from APC 5732 indicator ‘‘E1’’ to indicate that the code
occlusion of the tubes. (Level 2 Minor Procedures) to APC 5523 is not payable by Medicare when
Response: Based on our findings (Level 3 Imaging without Contrast) with submitted on outpatient claims (any
associated with FemBloc, the procedure a proposed payment rate of $231.28. outpatient bill type). If FDA approves
is currently in clinical trial with an The commenter reported that the code FemBloc, we will reassess the code
estimated study completion date of is more clinically related to one of the associated with FemChec and determine
September 2022 (ClinicalTrials.gov procedures assigned to APC 5523, the appropriate OPPS SI and APC
Identifier: NCT03067272). Because the specifically, CPT code 76831 (Saline assignments for CPT code 0568T.
FemBloc device has not received FDA infusion sonohysterography (sis),
approval, we believe that we should Therefore, after consideration of the
including color flow doppler, when public comments, we are revising the SI
reassign CPT code 0567T to status performed). Both CPT codes 0568T and
indicator ‘‘E1’’ to indicate that the code and APC assignments for CPT codes
76831 require ultrasound and saline to 0567T and 0568T. The final status
is not payable by Medicare when
study the uterus. indicator assignments for both codes are
submitted on outpatient claims (any
outpatient bill type). If FDA approves Response: Our findings reveal that the listed in Table 27 below. We refer
the device, we will reassess the code clinical study associated with FemBloc readers to Addendum D1 of this final
and determine the appropriate SI and also applies to FemChec. Based on the rule with comment period for the
APC assignments. clinical study (ClinicalTrials.gov complete list of the OPPS payment
Comment: The same commenter for Identifier: NCT03067272), FemChec will status indicators and their definitions
FemBloc also requested an APC be used with FemBloc. Because the for CY 2020. Addendum D1 is available
modification for the code associated FemBloc device has not received FDA via the internet on the CMS website.
14. Hemodialysis Arteriovenous Fistula to APC 5193 (Level 3 Endovascular presenter also reported that their HOPD
(AVF) Procedures (APC 5194) Procedures) with a payment rate of facility performed 35 procedures
9,669.04 for CY 2019. between October 2018 to July 31, 2019,
For CY 2019, based on two new At the August 21, 2019 HOP Panel and the average payment for each
technology applications received by Meeting, a presenter requested that we procedure ranged between $3,410 and
CMS for hemodialysis arteriovenous reassign the WavelinQ procedure to $11,247. Based on the information
fistula creation, CMS established two APC 5194. The presenter indicated that presented at the meeting, the HOP Panel
new HCPCS codes to describe the the APC payment associated with made no recommendation to CMS on
procedures. Specifically, CMS HCPCS code C9755 is inadequate to the APC assignment for the WavelinQ
established HCPCS code C9754 for the cover the cost of the procedure. procedure.
Ellipsys® System and C9755 for the According to the presenter, the For CY 2020, as listed in Table 28
WavelinQTM System effective January 1, conservative cost estimate for the below with the long descriptors and
ER12NO19.043</GPH>
2019. Both HCPCS codes were assigned procedure is over $12,500. The proposed SI and APC assignments, we
proposed to continue to assign HCPCS mean cost of $12,960, and suggested The commenter indicated that if CMS
codes C9754 and C9755 to APC 5193 reassigning the code to APC 5194. They were to revisit the issue and reassign the
with a proposed payment rate of also reminded CMS that the APC assignment for the WavelinQ
$10,013.25. We received several reassignment to APC 5194 is in line procedure, it should also apply the same
comments related to this proposal. with various HHS initiatives, such as consideration to the Ellipsys procedure
Below are the comments and our the HHS Initiative on ‘‘Advancing (C9754).
responses. American Kidney Health’’ since the Response: We agree that the services
Comment: Several physicians stated payment rate for the procedure would described by HCPCS codes C9754 and
that the current payment rate does not improve access to the service. C9755 are clinically similar and,
cover the cost of the procedure and Response: As stated above, we believe therefore, we are revising the APC
requested the reassignment of both that it is appropriate to revise the APC assignment for both HCPCS code C9754
HCPCS code C9754 and C9755 to APC assignment for HCPCS code C9754 and and C9755 to APC 5194 for CY 2020.
5194 (Level 4 Endovascular Procedures) C9755. Consequently, we are However, we note that claims data upon
with a proposed payment rate of reassigning both codes from APC 5193 which we could determine the
$16,049.73. A physician association to APC 5194 for CY 2020. geometric mean costs associated with
explained that the new technologies Comment: A commenter representing each procedure are not yet available for
describe innovative new procedures that 13 different health systems suggested ratesetting but once such data become
increase options for dialysis patients to that CMS adopt the recommendation available, we will be able to determine
have a successful arteriovenous fistula they made at the August 21, 2019 HOP whether the two services are similar in
for dialysis access, and that the Panel Meeting. Specifically, they terms of resources. In addition, as has
procedures are important in making recommended the reassignment of been our practice since the
fistula access possible for patients that HCPCS code C9755 from APC 5193 to implementation of the OPPS in 2000,
either refuse open surgery or where APC 5194. we review, on an annual basis, the APC
skilled surgeons are not readily Response: Although there was a assignments for the procedures and
available. However, they expressed presentation at the August 21, 2019 services paid under the OPPS.
concern that the procedures may not be meeting on HCPCS code C9755 with a Consequently, we will review the cost
available to patients if the costs are request to reassign the code to APC data associated with HCPCS codes
higher than the payment, and requested 5194, the HOP Panel made no C9754 and C9755 for the next annual
that CMS carefully examine the most recommendation to CMS. We note that rulemaking.
recent claims to determine if they the August 21, 2019, HOP Panel In summary, after consideration of the
should be reclassified to APC 5194. recommendations are posted online and public comments, we are finalizing our
Response: After consideration of the can be found on this CMS website: proposal with modification.
public comments received and based on https://www.cms.gov/Regulations-and- Specifically, we are reassigning HCPCS
input from our medical advisors, as well Guidance/Guidance/FACA/ codes C9754 and C9755 from APC 5193
as our review of the latest claims data AdvisoryPanelon to APC 5194 for CY 2020. The final CY
available to us, we believe that we AmbulatoryPaymentClassification 2020 payment rate for the codes can be
should revise the APC assignment for Groups.html. Although the HOP Panel found in Addendum B to this final rule
HCPCS code C9754 and C9755 to APC made no recommendation to CMS, with comment period. In addition, we
5194 for CY 2020. based on the proposed rule comments, refer readers to Addendum D1 of this
Comment: A medical device company and our review of the issue, we are final rule with comment period for the
requested an APC reassignment based revising the APC assignment for HCPCS status indicator (SI) meanings for all
on data presented at the August 21, code C9755 to APC 5194 for CY 2020. codes reported under the OPPS. Both
2019 HOP Panel Meeting. They Comment: A commenter stated that it Addendum B and D1 are available via
indicated that their analysis of the was brought to their attention that other the internet on the CMS website. Table
1Q2019 Medicare Limited Data Set comments related to the WavelinQ 28 lists the final SI and APC
(LDS) Standard Analytic File (SAF) for procedure may urge CMS to revisit the assignments for HCPCS codes C9754
HCPCS code C9755 showed a geometric APC assignment for HCPCS code C9755. and C9755.
15. Hemodialysis Duplex Studies (APCs respectively, in Addendum B with the based on its clinical homogeneity and
5522 and 5523) short descriptors, and again in resource use to the other procedures in
For CY 2020, the CPT Editorial Panel Addendum O with the long descriptors. the APC. Therefore, we are reassigning
established two new codes to describe We also assigned these codes to the code to APC 5523. We received no
hemodialysis duplex studies, comment indicator ‘‘NP’’ in Addendum comments on CPT code 93986.
specifically, CPT codes 93985 and B to indicate that the codes are new for Consequently, we are finalizing its APC
93986. The new codes replace HCPCS CY 2020 and that public comments assignment to APC 5522.
code G0365 (Vessel mapping of vessels would be accepted on their proposed In summary, after consideration of the
for hemodialysis access (services for status indicator assignments. We note public comments, we are finalizing our
preoperative vessel mapping prior to that these codes will be effective proposal with modification.
creation of hemodialysis access using an January 1, 2020. Specifically, we are finalizing our
autogenous hemodialysis conduit, Comment: Several commenters proposal for CPT code 93986 to APC
including arterial inflow and venous recommended a reassignment of CPT 5522, and reassigning CPT code 93985
outflow)). HCPCS code G0365 was code 93985 from APC 5522 to APC 5523 to APC 5523. Table 29 below lists the
assigned to status indicator ‘‘D’’ in the (Level 3 Imaging without Contrast) with long descriptors for the three codes and
proposed rule to indicate that the code a proposed payment rate of $231.28. the final SI and APC assignments for CY
would be deleted on December 31, 2019. They indicated that the code represents 2020. The final CY 2020 OPPS payment
As listed in Table 29 below with the a bilateral study, and as such, should be rates can be found in Addendum B of
long descriptors, and also in Addendum assigned to APC 5523 with similar this final rule with comment period. In
B to the CY 2020 OPPS/ASC proposed bilateral/complete duplex studies. addition, we refer readers to Addendum
rule, we proposed to assign CPT code Response: Based on the public D1 of this final rule with comment
93985 and 93986 to APC 5522 (Level 2 comments that we received, our review period for the status indicator meanings
Imaging without Contrast) with a of the procedure associated with CPT for all codes reported under the OPPS
proposed payment rate of $111.04. The code 93985 and advice from our for CY 2020. Both Addendum B and
codes were listed as 93X00 and 93X01 medical advisors, we agree that the code Addendum D1 are available via the
(the 5-digit CMS placeholder codes), fits more appropriately in APC 5523 internet on the CMS website.
ER12NO19.044</GPH>
16. Intraocular Procedures (APCs 5491 median cost under our payment policy (Level 3 Intraocular Procedures), based
Through 5494) for low-volume device-intensive on the data for two claims available for
procedures because the APC contained ratesetting for the proposed rule, and to
In prior years, CPT code 0308T a low volume of claims. The low- delete APC 5495 (83 FR 37096 through
(Insertion of ocular telescope prosthesis volume device-intensive procedures 37097). However in the CY 2019 OPPS/
including removal of crystalline lens or payment policy is discussed in more ASC final rule with comment period,
intraocular lens prosthesis) was detail in section III.C.2. of the proposed based on updated data on a single claim
assigned to the APC 5495 (Level 5 rule. available for ratesetting for the final
Intraocular Procedures) based on its In the CY 2019 OPPS/ASC proposed rule, we modified our proposal and
estimated costs. In addition, its relative rule, we proposed to reassign CPT code reassigned procedure code CPT code
ER12NO19.045</GPH>
payment weight has been based on its 0308T from APC 5495 to APC 5493 0308T to the APC 5494 (Level 4
Intraocular Procedures) (83 FR 58917 payment rate for the service would be 95713, 95715, and 95716 and stated that
through 58918). We made this change established based on its median cost, as the proposed payment rates for the
based on the similarity of the estimated discussed in section V.A.5. of the codes do not provide adequate
cost for the single claim of $12,939.75 proposed rule, because it is a device- reimbursement. A commenter indicated
to that of the APC ($11,427.14). intensive procedure assigned to an APC that the proposed APC assignments for
However, this created a discrepancy in with fewer than 100 total annual claims the EEG monitoring services for 2 to 12
payments between the OPPS setting and within the APC. hours does not appropriately reflect the
the ASC setting in which the ASC Comment: Several commenters resources and time required to monitor
payments would be higher than the expressed support for our proposal to complex epilepsy patients. Several other
OPPS payments for the same service assign the HCPCS code 0308T to APC commenters recommended the
because of the intersection of the 5495 (Level 5 Intracoular Procedures). reassignment of CPT codes 95712 and
estimated cost for the encounter Response: We thank commenters for 95713 to APC 5723 and stated they
determined under a comprehensive their support. should be paid approximately half the
methodology within the OPPS and the After consideration of the public rate of the 24-hour video EEG services.
estimated cost determined under the comments we received, we are These same commenters stated that the
payment methodology for device- finalizing our proposal, without reassignment of CPT codes 95715 and
intensive services within the ASC modification, to assign HCPCS code 95716 to APC 5724, which had a
payment system. CPT 0308T to APC 5495 for the CY 2020 proposed payment rate of $920.66,
In reviewing the claims data available OPPS. would be appropriate since patients
for the proposed rule for CY 2020 OPPS 17. Long-Term Electroencephalogram being tested may be classified as
ratesetting, we found several claims (EEG) Monitoring Services (APCs 5722, observation stays and will not be
reporting the procedure described by 5723, and 5724) admitted to the hospital. The
CPT code 0308T. Based on the claims commenters added that these codes
data, the procedure would have a For CY 2020, the CPT Editorial Panel were previously described by
geometric mean cost of $28,122.51 and deleted four existing long-term EEG predecessor CPT code 95951 (24 hour
a median cost of $19,864.38. These cost monitoring services, specifically, CPT VEEG), which was assigned to APC
statistics are significantly higher than codes 95950, 95951, 95953, and 95956, 5724 (Level 4 Diagnostic Tests and
the geometric mean cost of the other and replaced them with 23 new CPT Related Services).
procedure assigned to APC 5494, that is, codes that consisted of 10 professional Response: With respect to CPT codes
the procedure described by CPT code component (PC) codes and 13 technical 95712 (2–12 hours VEEG with
67027 (Implant eye drug system), which component (TC) codes. As listed in intermittent monitoring) and 95713 (2–
has a geometric mean cost of Table 30 below with the long 12 hours VEEG with continuous
$12,296.27. In addition, if we continued descriptors, and also in Addendum B to monitoring), we believe that the
to assign the procedure described by the CY 2020 OPPS/ASC proposed rule, resources and time associated with
CPT code 0308T to APC 5494 (the Level we proposed to assign the 13 technical intermittent monitoring (CPT code
4 Intraocular Procedures APC), the component codes, specifically, CPT 95712) are less than that of continuous
discrepancy between payments within codes 95700 through 95716, to either monitoring (CPT code 95713), and
the OPPS and the ASC payment system APC 5722 (Level 2 Diagnostic Tests and therefore, believe they should be
would also continue to exist. As a Related Services) with a proposed assigned to different APCs. Based on
result, we proposed to reestablish APC payment rate of $256.60 or APC 5723 input from our medical advisors that
5495 (Level 5 Intraocular Procedures) (Level 3 Diagnostic Tests and Related intermittent monitoring involves
because we believe that the procedure Services) with a proposed payment rate checking the patient every two hours
described by CPT code 0308T would be of $486.65. The codes were listed as rather than the full 12 hours, we believe
most appropriately placed in this APC 95X01 through and 95X13 (the 5-digit it would be appropriate to modify the
based on its estimated cost. Assignment CMS placeholder codes) in Addendum APC assignment for the continuous
of the procedure to the Level 5 B with the short descriptors, and again monitoring code (CPT code 95713) to
Intraocular Procedures APC is in Addendum O with the long APC 5723. Applying this same concept
consistent with its historical placement descriptors. In addition, we proposed to to the 12–24 VEEG technical component
and would also address the large assign the 10 professional component codes, we believe that the resources
discrepancy in payment for the codes, specifically, CPT codes 95717 associated with the intermittent
procedure between the OPPS and the through 95726, to status indicator ‘‘M’’ monitoring code (CPT code 95715) are
ASC payment system. We note that, to indicate that the services are not paid not the same as the continuous
based on data available for the proposed under the OPPS since they describe monitoring code (CPT code 95716).
rule, the proposed payment rate for this physician services. These codes were Therefore, we are reassigning the APC
procedure when performed in an ASC, listed were listed as 95X14 through assignment for CPT code 95716 to APC
as discussed in more detail in section 95X23 (the 5-digit CMS placeholder 5724. Although the commenters
XIII.D.1.c. of the proposed rule, would codes) in Addendum B with the short indicated that the predecessor code for
be no higher than the OPPS payment descriptors, and again in Addendum O 95715 and 95716 was CPT code 95951,
rate for this procedure when performed with the long descriptors. We assigned we are uncertain whether the
in the hospital outpatient setting. We these 23 codes to comment indicator predecessor code describes continuous
will continue to monitor the volume of ‘‘NP’’ in Addendum B to indicate that or intermittent monitoring since the
claims data available for the procedure the codes are new for CY 2020 and that code descriptor lacks this specificity.
for ratesetting purposes. public comments would be accepted on Comment: Some commenters urged
Therefore, for CY 2020, we proposed their proposed status indicator CMS not to finalize the policies
to reestablish APC 5495 (Level 5 assignments. We note these codes will proposed in the PFS or OPPS proposed
Intraocular Procedures) and reassign the be effective January 1, 2020. rules. They indicated that the policies
procedure described by CPT code 0308T Comment: Many commenters would dramatically reduce
from APC 5494 to APC 5495. Under this expressed concern with the proposed reimbursement for EEG and VEEG
proposal, the proposed CY 2020 OPPS APC assignments for CPT codes 95712, services and instead, suggested that we
appropriately value these services so In summary, after consideration of the listed in Table 30. The final CY 2020
that people with epilepsy have access public comments, we are finalizing our payment rate for these codes can be
and can be diagnosed and treated in a proposal, with modification. found in Addendum B to this final rule
timely manner. Specifically, we are finalizing our with comment period (which is
proposal to assign CPT codes 95700 available via the internet on the CMS
Response: We believe these
through 95712, 95714, and 95715 to the website).
commenters did not fully understand
APCs listed in Table 30 below. In
our APC proposal. Because the existing addition, we are modifying our proposal As always, we will reevaluate the
EEG and VEEG CPT codes will be for CPT codes 95713 and 95716, and APC assignment for these codes once we
deleted on December 31, 2019, if we do revising their APC assignments to APC have claims data. We review, on an
not finalize our proposal for the 13 5723 and APC 5724, respectively. annual basis, the APC assignments for
technical codes that will be effective Further, we are finalizing our proposal all services and items paid under the
January 1, 2020, there would be no to assign CPT codes 95717 through OPPS based on the latest claims data
codes to report the services associated 95726 to status indicator ‘‘M’’. These that we have available.
with EEG and VEEG. codes, along with the deleted codes, are BILLING CODE 4120–01–P
ER12NO19.046</GPH>
BILLING CODE 4120–01–C establishment of additional levels.

continued to apply a six-level structure
18. Musculoskeletal Procedures (APCs for the Musculoskeletal APCs because Specifically, we solicited comments on
5111 Through 5116) doing so provided an appropriate the creation of a new APC level between
distinction for resource costs at each the current Level 5 and Level 6 within
Prior to the CY 2016 OPPS, payment
level and provided clinical the Musculoskeletal APC series. While
for musculoskeletal procedures was
homogeneity. However, we indicated some commenters provided suggested
primarily divided according to anatomy
that we would continue to review the APC reconfigurations and requests for
and the type of musculoskeletal
structure of these APCs to determine change to APC assignments, many
procedure. As part of the CY 2016
reorganization to better structure the whether additional granularity would be commenters requested that we maintain
OPPS payments towards prospective necessary. the current six-level structure and
payment packages, we consolidated In the CY 2019 OPPS proposed rule continue to monitor the claims data as
those individual APCs so that they (83 FR 37096), we recognized that they become available. Therefore, in the
became a general Musculoskeletal APC commenters had previously expressed CY 2019 OPPS/ASC final rule with
series (80 FR 70397 through 70398). concerns regarding the granularity of the comment period, we maintained the six-
In the CY 2018 OPPS/ASC final rule current APC levels and, therefore, level APC structure for the
ER12NO19.047</GPH>
with comment period (82 FR 59300), we requested comment on the
Musculoskeletal Procedures APCs (83 APC 5115 (Level 5 Musculoskeletal approximately $11,900 for FY 2020
FR 58920 through 58921). Procedures) of $11,879.66, and within a when the procedure is performed on an
Based on the claims data available for range of the lowest geometric mean cost inpatient basis, we believed that it was
the CY 2020 OPPS/ASC proposed rule, of the significant procedure costs of appropriate to assign the procedure
we continue to believe that the six-level $9,969.37 and the highest geometric described by CPT code 27130 to the
APC structure for the Musculoskeletal mean cost of the significant procedure Level 5 Musculoskeletal Procedures
Procedures APC series is appropriate. costs of $12,894.18. Therefore, we APC series, which had a geometric
Therefore, we proposed to maintain the believed that the assignment of the mean cost of $11,879.66. Therefore, for
APC structure for the CY 2020 OPPS procedure described by CPT code 27447 CY 2020, we also proposed to assign the
update. in the Level 5 Musculoskeletal procedure described by CPT code 27130
We note that this is the first year for Procedures APC series remains to APC 5115. We noted that we will
which claims data are available for the appropriate and, therefore, we proposed monitor the claims data reflecting these
total knee arthroplasty procedure to continue to assign CPT code 27447 to procedures as they become available.
described by CPT code 27447, which APC 5115 (Level 5 Musculoskeletal For a more detailed discussion of the
was removed from the inpatient only Procedures) for CY 2020.
list in the CY 2018 OPPS/ASC final rule procedures that were proposed to be
We also proposed to remove the
with comment period (82 FR 59382 removed from the inpatient only (IPO)
procedure described by CPT code 27130
through 59385). Based on approximately (Total hip arthroplasty) from the CY list for CY 2020 under the OPPS, we
60,000 hospital outpatient claims 2020 OPPS inpatient only list. Based on refer readers to section IX. of the
reporting the procedure that were the estimated costs derived from in the proposed rule.
available for ratesetting in the proposed available claims data, as well as the 50th Table 31 displays the CY 2020
rule, the geometric mean cost was percentile IPPS payment for TKA/THA Musculoskeletal Procedures APC series’
approximately $12,472.05, which is procedures without major complications structure and APC geometric mean
similar to the geometric mean cost for or comorbidities (MS–DRG 470) of costs.
Comment: Several commenters term and that the claims would CMS instructions, and to report services
requested that CMS reconsider the eventually support the higher on claims and charges and costs for the
proposal to assign CPT code 22869 placement, as the reporting issues were services on their Medicare hospital cost
(Insertion of interlaminar/interspinous corrected. We also note that the HOP report appropriately. However, we do
process stabilization/distraction device, Panel made a recommendation that not specify the methodologies that
without open decompression or fusion, CMS examine the claims data for CPT hospitals use to set charges for this or
including image guidance when code 22869 and determine an any other service. In addition, we state
performed, lumbar; single level) to APC appropriate APC placement. in Chapter 4 of the Medicare Claims
5115, and instead allow the code to Response: While we recognize the Processing Manual that ‘‘it is extremely
remain in APC 5116, where it has been concerns that the commenters have important that hospitals report all
historically placed. They believed that described, it is generally not our policy HCPCS codes consistent with their
the proposal to move the APC was based to judge the accuracy of hospital coding descriptors; CPT and/or CMS
on inaccurate data, due to one hospital and charging for purposes of ratesetting. instructions and correct coding
incorrectly reporting its costs and We rely on hospitals to accurately report principles, and all charges for all
charges. They noted that the influence the use of HCPCS codes in accordance services they furnish, whether payment
ER12NO19.048</GPH>
of that inaccurate data would be short with their code descriptors and CPT and for the services is made separately paid
or is packaged’’ to enable CMS to the services associated with cardiac placement and recommended its
establish future ratesetting for OPPS PET/CT studies, specifically, CPT codes revision from APC 5594 (Level 4
services. 78429, 78430, 78431, 78432, 78433, and Nuclear Medicine and Related Services)
After consideration of the public 78434. These codes were listed in with a proposed payment rate of
comments we received, we are Addendum B to the CY 2020 OPPS/ASC $1,466.16 to APC 1522 (New
finalizing the proposed six level proposed rule as 78X29, 78X31, 78X32, Technology—Level 23 ($2501–$3000))
Musculoskeletal Procedures APC 78X33, 78X34, and 78X35 (the 5-digit with a proposed payment rate of
structure. We also are finalizing the CMS placeholder codes), respectively, $2,750.50. They reported that, based on
proposed assignment of the procedure in Addendum B with the short the resource cost of the service
described by CPT codes 22869 to APC descriptors, and again in Addendum O
described by CPT code 78431, APC 1522
5115. As discussed in section IX. of this with the long descriptors. We also
final rule, we are also finalizing the provides adequate reimbursement for
assigned these codes to comment
proposal to remove the procedure indicator ‘‘NP’’ in Addendum B to the service. Similarly, for CPT codes
described by CPT code 27130 from the indicate that the codes are new for CY 78432 and 78433, the commenters
inpatient only list and to assign it to 2020 and that public comments would indicated that APC 5594 would not
APC 5115 for the CY 2020 OPPS. be accepted on their proposed status adequately reimburse the resource costs
indicator assignments. We note that associated with providing these
19. Nuclear Medicine Services services, and recommended their
these codes will be effective January 1,
a. Cardiac Positron Emission 2020. Table 32 below list the reassignment to APC 1523 (New
Tomography (PET) Studies (APCs 5593 placeholder codes, long descriptors, and Technology—Level 23 ($2501–$3000))
and 5594) proposed SI and APC assignments. with a proposed payment rate of $
For CY 2020, we proposed to continue Comment: Several commenters 2,750.50
to assign CPT code 78459 (Myocardial opposed the APC assignment for CPT Response: Based on our assessment of
imaging, positron emission tomography code 78429 (placeholder code 78X29)
the information provided in the new
(pet), metabolic evaluation) to APC 5593 and recommended its reassignment
technology application and the public
(Level 3 Nuclear Medicine and Related from APC 5593 to APC 5594. They
stated that APC 5593 does not recognize comments received, we are revising the
Services) with a proposed payment rate APC assignments for these codes.
of $1,293.33. Similarly, we proposed to the additional cost associated with the
CT scan that is included in the service, Specifically, we are revising the APC
maintain the APC assignments for CPT
and requested revising the code to APC assignment for CPT code 78431 from
codes 78491 (Myocardial imaging,
positron emission tomography (pet), 5594. APC 5594 to APC 1522, and reassigning
perfusion; single study at rest or stress) Response: Based on the commenters’ CPT codes 78432 and 78433 from APC
and 78492 (Myocardial imaging, feedback and our review of the 5594 to APC 1523.
positron emission tomography (pet), components of this new service, we In summary, after consideration of the
perfusion; multiple studies at rest and/ agree with the commenters that APC public comments for the new cardiac
or stress) to APC 5594 (Level 4 Nuclear 5594 is the more appropriate assignment PET/CT codes, and based on our
Medicine and Related Services) with a for CPT code 78429. Therefore, we will evaluation of the new technology
proposed payment rate of $1,466.16. reassign CPT code 78429 from APC
application that provided the estimated
Comment: Commenters agreed with 5593 to APC 5594.
Comment: Several commenters agreed costs for the services and described the
the APC assignments for CPT codes components and characteristics of the
78459, 78491, and 78492 and stated with the APC placement for CPT code
78430 (placeholder code 78X31) in APC new codes, we are finalizing our
they are placed appropriately in APCs
5594. They stated that APC 5594 allows proposal, with modification, to assign
5593 and 5594. Some commenters
adequate payment for the CT scanner CPT codes 78429, 78431, 78432, and
added that the cost associated with CPT
code 78492, which describes a wall that that is a component of this service. 78433 to the final APCs listed in Table
motion and ejection fraction, supports Response: We thank the commenters 32 below. In addition, we are finalizing
its maintenance in APC 5594. for their feedback and are finalizing the our proposal, without modification, for
Response: We thank the commenters APC assignment for CPT code 78430 to CPT codes 78430 and 78434. In Table 32
for their feedback and will finalize the APC 5594. below we list the long descriptors and
APC assignments for CPT code 78459 to Comment: Several commenters final SI and APC assignments for the
APC 5593, and for CPT codes 78491 and reported that certain societies submitted codes. The final CY 2020 payment rate
78492 to APC 5594. a new technology application to CMS for the codes can be found in
for CPT codes 78431 (placeholder code Addendum B to this final rule with
b. Cardiac Positron Emission 78X32), 78432 (placeholder code
Tomography (PET)/Computed comment period (which is available via
78X33), and 78433 (placeholder code the internet on the CMS website).
Tomography (CT) Studies (APCs 1522, 78X34) that details the costs associated
1523, and 5594) BILLING CODE 4120–01–P
with providing the services. For CPT
For CY 2020, the CPT Editorial code 78431, these same commenters
established six new codes to describe disagreed with the proposed APC
ER12NO19.049</GPH>
ER12NO19.050</GPH>
BILLING CODE 4120–01–C primary service. Table 33 below list the weighted average to determine an
c. Single-Photon Emission Computed long descriptors and their proposed SI appropriate geometric mean cost for
Tomography (SPECT) Studies (APCs and APC assignments for these codes. 78803. Based on their calculation, the
5591, 5593, and 5594). Comment: Some commenters agreed geometric mean cost for the code should
with the proposed APC assignments for be $784.18, which is higher than the
For CY 2020, we proposed to continue CPT codes 78800, 78801, and 78802. approximately $462 geometric mean
to assign CPT codes 78800 and 78801 to Response: We thank the commenters cost for APC 5592, and is more
APC 5591 with a proposed payment rate for their feedback and are finalizing the consistent with the geometric mean cost
of $372.69, CPT codes 78802 and 78804 APC assignments for these codes. for APC 5593.
to APC 5593 with a proposed payment Comment: Several commenters Response: Based on our analysis of
rate of $1,293.33), and CPT code 78803 disagreed with the assignment for CPT the latest claims data for this final rule
to APC 5592 with a proposed payment codes 78803 and requested a with comment period, and as listed in
rate of $482.38. modification from APC 5592 to APC the Figure 33 below, the range of
We also proposed to assign new CPT 5593 because this one code will replace geometric mean cost for CPT code 78803
codes 78830 and 78831 to APC 5593, seven SPECT codes that will be deleted and the seven deleted codes is between
and 78832 to APC 5594 with a proposed on December 31, 2019. Specifically, $433 and $1,417. We note that several
payment rate of $1,466.16. In addition, they reported that the seven CPT codes of the deleted codes were assigned to
we proposed to assign new CPT code listed in Figure 34 will be deleted. APC 5593, and based on our review of
78835 to status indicator ‘‘N’’ because it Several commenters indicated that APC these codes, we believe it would be
is an add-on code that is packaged and 5592 would not account for the deleted appropriate to reassign CPT code 78803
payment for it is included in the SPECT codes and recommended using a from APC 5592 to APC 5593.
ER12NO19.051</GPH>
Comment: Some commenters Comment: Some commenters agreed assess and determine whether a
disagreed with the assignment of CPT with the APC assignment for new CPT reassignment is necessary. As always,
code 78804 to APC 5593, and stated that codes 78830 and 78832 to APC 5593 we review the APC assignments for all
the APC assignment does not adequately and APC 5594, respectively. services under the OPPS based on the
capture the cost of multiple SPECTs Response: We appreciate the latest claims data.
provided. The commenters indicated commenters’ feedback and are finalizing In summary, after consideration of the
that it would not make sense to the APC assignment for CPT code 78830 public comments and after evaluation of
continue to assign single and full sets of to APC 5593 and for CPT code 78832 to our claims data for this final rule with
studies to the same APC and urged CMS APC 5594. comment period, we are finalizing our
to reassign the code to APC 5594. Comment: Several commenters proposal, without modification, for CPT
Response: For CY 2020, based on opposed the APC assignment for CPT codes 78800, 78801, 78802, 78804,
claims submitted between January 1, code 78831 to APC 5593. They 78830, 78831, 78832, and 78835.
2018 and December 30, 2018 that were indicated that the proposed APC However, we are finalizing our
processed on or before June 30, 2019, assignment for CPT code 78831 does not proposal, with modification, for CPT
our analysis of the latest claims data for adequately capture the resources code 78803 and reassigning the code
this final rule supports maintaining CPT required to perform the procedure and from APC 5592 to APC 5593 for CY
code 78804 in APC 5593. Specifically, should be reassigned to APC 5594. 2020. Table 34 below list the long
our claims data show a geometric mean Response: We believe that new CPT descriptors for these codes and their
cost of approximately $1,298 for CPT code 78831 shares similar final SI and APC assignments. The final
code 78804 based on 1,656 single claims characteristics and resources to existing CY 2020 payment rate for the codes can
(out of 2,961 total claims), which is CPT code 78804. Consequently, we be found in Addendum B to this final
more appropriate in APC 5593 whose assigned the new code to APC 5593, rule with comment period (which is
geometric mean cost is about $1,245 which is the same APC assignment for available via the internet on the CMS
compared to the geometric mean cost of CPT 78804. We note that once we have website).
approximately $1,412 for APC 5594. claims data for CPT code 78831, we will BILLING CODE 4120–01–P
ER12NO19.052</GPH>
ER12NO19.053</GPH>
ER12NO19.054</GPH>
BILLING CODE 4120–01–C 20. Radiofrequency Spectroscopy proposed rule, we proposed to assign
CPT code 0546T (Radiofrequency
As displayed in Table 8 and spectroscopy, real time, intraoperative
Addendum B to the CY 2020 OPPS/ASC
ER12NO19.055</GPH>
margin assessment, at the time of partial
mastectomy, with report) to status payment for items and services that are code book. We note that the CPT
indicator (SI) ‘‘N’’ to indicate that the typically integral, ancillary, supportive, Editorial Panel does not establish new
code is packaged and payment for it is dependent, or adjunctive to a primary CPT codes because the service or
included in the primary surgical service has been a fundamental part of procedure is considered stand-alone,
procedure. Specifically, payment for the the OPPS since its implementation in rather they establish new codes for
codes assigned to status indicator ‘‘N’’ is August 2000. procedures and services that are not
made through the payment for the Comment: A medical device company described by any existing code and have
separately payable, independent stated that although CPT code 0546T is met their application criteria.
services with which they are billed. No a procedure provided during an
As stated above, CPT code 0546T is
separate payment is made for services operative session, it is a distinct
that we have assigned to status indicator associated with the MarginProbe
procedure with a beginning, middle,
‘‘N.’’ We note that CPT code 0546T is and end. The commenter reported that procedure. CPT code 0546T describes
associated with the MarginProbe the cost of the procedure is not included an intraoperative procedure that is
procedure. in the primary surgical procedure. The performed at the time of partial
Comment: Several commenters same commenter pointed out that based mastectomy. As specified in 42 CFR
requested separate payment for CPT on the language below from the CY 2008 419.2(b)(14), intraoperative items and
code 0546T. One commenter stated that OPPS/ASC final rule (72 FR 66621), it services are packaged under the OPPS.
the code should be adequately valued believed CMS has the discretion not to We also disagree with the
and removed from packaging. Another package an intraoperative service: commenter’s statement that CMS has
commenter stated that packaging the the discretion not to package an
‘‘To the extent that a service for which
code will limit the number of Medicare New Technology APC status is being intraoperative procedure. As noted
beneficiaries who will benefit from the requested is ancillary and supportive of above, 42 CFR 419.2(b)(14) states that
procedure. Still another commenter another service, for example, a new intraoperative items and services are
suggested a modification in the status intraoperative service or a new guidance packaged under the OPPS. We do not
indicator from ‘‘N’’ to ‘‘J1’’ service, we might not consider it to be a agree that MarginProbe, for which CPT
(comprehensive APC) but did not complete service because its value is as part
code 0546T was established, is a new,
suggest any specific APC to which they of an independent service. However, if the
entire, complete service, including the standalone procedure for which
believed the code should be assigned. separate payment should be made. We
Another commenter stated that guidance component of the service, for
example, is ‘truly new,’ as we explained that note that the preamble language the
assigning separate payment for CPT
term at length . . . we would consider the commenter quoted only applies for
code 0546T is in line with CMS’ new complete procedure for New Technology services that are truly new and a
objectives of reducing the number of APC assignment.’’
repeat surgical excisions. complete service and, as mentioned in
Response: As noted in the code The commenter also indicated that, at the quoted language, with respect to an
descriptor, CPT code 0546T describes its September 2018 meeting, the CPT ancillary service, which may include a
an intraoperative procedure that is Editorial Panel determined that new intraoperative service or a new
performed at the time of partial radiofrequency spectroscopy is a stand- guidance service, we might not consider
mastectomy. As specified in 42 CFR alone service and, therefore, issued a it to be a complete service because its
419.2(b)(14), intraoperative items and unique code, specifically, CPT code value is as part of an independent
services are packaged under the OPPS. 0546T to be effective July 1, 2019. The service. MarginProbe, received
By definition, a service that is commenter noted that until July 1, 2019 Premarket Approval (PMA) from the
performed intraoperatively is provided there was no code available to FDA on December 27, 2012, and has
during and, therefore on the same date adequately describe the service, been on the market since February 2013,
of service, as another procedure that is therefore, the procedure could not be however, FDA approval alone does not
separately payable under the OPPS. represented in the claims data upon compel a determination under Medicare
Because intraoperative services support which CMS has established the CY 2020 that the technology represents a separate
the performance of an independent OPPS payment determinations. standalone service that would qualify
procedure and they are provided in the Consequently, the commenter requested for New Technology APC assignment.
same operative session as the that CMS assign CPT code 0546T to
Finally, because CPT code 0546T
independent procedure, we have New Technology APC 1518 (New
Technology—Level 18 ($1601-$1700)) describes an intraoperative service that
packaged the payment for the
with a proposed payment rate of is performed during a mastectomy
radiofrequency spectroscopy into the
$1,650.50, and indicated that the procedure, we are finalizing our
OPPS payment for the primary surgical
procedure with which it is reported. In payment would reflect the cost of the proposal to assign the code to status
this case, the payment for CPT code sterile, disposable, radiofrequency indicator ‘‘N’’. Therefore, after
0546T is included in the breast spectroscopy probe and supplies. The consideration of the public comments
mastectomy codes that are reported with commenter asserted that assigning received, we are finalizing our proposal
the procedure. separate payment for the procedure without modification for CPT code
We note that since 2008, would alleviate the barrier to access to 0546T. The final status indicator
intraoperative services have been care for the service. assignment for the code is listed in
packaged under the OPPS, however, Response: We note that the Addendum B to this final with comment
packaging has always been a primary establishment of a new CPT code does period. We refer readers to Addendum
component of the OPPS since its not indicate that a code is always a D1 of this final rule with comment
implementation in 2000. As we state in stand-alone procedure or service. The period for the complete list of the OPPS
section II.A.3. (Changes to Packaged current CPT code set lists hundreds of payment status indicators and their
Items and Services) of this final rule, add-on codes that do not describe stand- definitions for CY 2020. Both
because packaging encourages efficiency alone services. For the list of add-on Addendum B and Addendum D1 are
and is an essential component of a codes, refer to Appendix D (Summary of available via the internet on the CMS
prospective payment system, packaging CPT Add-on Codes) of the latest CPT website.
21. Reflectance Confocal Microscopy • Reassign the code to New implement this provision, the physician
(RCM) Technology APC 1503 (New fee schedule (PFS) amount is compared
For CY 2020, we proposed to continue Technology—Level 3 ($101–$200) with to the OPPS payment amount and the
to assign CPT code 96932 to status a proposed payment rate of $150.50; or lower amount is used for payment. CPT
indicator ‘‘Q1’’ (conditionally packaged) • Assign an unconditionally code 96932 is designated as a DRA
and APC 5731 (Level 1 Minor packaged (‘‘N’’) or non-payable status imaging code whose payment under the
Procedures) with a proposed payment indicator to the code, similar to the PFS is capped at the OPPS rate even
rate of $23.57. We note that the CPT other RCM codes. when performed in a physician office
Editorial Panel established six (6) CPT The commenter also expressed setting. Based on our review of the
codes to describe the services associated concern that the low payment rate issue, we believe that we should revise
with RCM. These codes are shown in under the OPPS significantly impacts the OPPS status indicator assignment
Table 35 with the long descriptors and the payment for the service under the for CPT code 96932 from ‘‘Q1’’ to ‘‘N’’,
proposed status indicator assignments. PFS. The commenter added that RCM is similar to the status indicator
Comment: A commenter stated that primarily performed in the physician assignment for several other RCM codes.
the low payment rate for this service office setting, however, because of the Since CPT code was low volume under
under the OPPS is based on low payment rate established under the the OPPS, it may be inappropriate to
misreporting of charges by a hospital. OPPS, the payment for the service is establish an OPPS payment rate by
The commenter explained that based on inadequate. To correct the low payment which the PFS rate would be capped.
their review and analysis of the OPPS rate, the commenter suggested that CMS Accordingly, this change will allow
claims, only two hospitals in the revise the status indicator of CPT code there not to be an OPPS cap for the
country are performing this imaging 96932 to identify the service as service.
test, and that the proposed payment rate packaged or non-payable, and, therefore, In summary, after consideration of the
is based primarily on one hospital’s not have a published OPPS payment public comment, we are finalizing our
charges. The same commenter stated rate for the code. The commenter proposal with modification and revising
that the cost of performing the imaging believed that packaging the code or the status indicator assignment for CPT
service is about $128, which is more assigning it as non-payable will correct code 96930 to ‘‘N’’ for CY 2020. Table
than the proposed payment rate of the payment rate and provide adequate 35 below lists the long descriptors and
$23.57. To correct the low payment for payment for the service. final status indicator assignments for the
the test, the commenter suggested that Response: Section 5102(b) of the six (6) codes that describe the services
CMS use its equitable adjustment Deficit Reduction Act of 2005 (DRA) associated with RCM. We refer readers
authority to set an appropriate payment amended the PFS statute to place a to Addendum D1 of this final rule with
for 96932 and also recommended that payment cap on the technical comment period for the complete list of
we do one of the following: component (TC) of certain diagnostic the OPPS payment status indicators and
• Reassign the code to APC 5522 imaging procedures and the TC portions their definitions for CY 2020.
(Level 1 Imaging without Contrast) with of the global diagnostic imaging services Addendum D1 is available via the
a proposed payment rate of $111.04; at the amount paid under the OPPS. To internet on the CMS website.
22. remedē® System—Transvenous Comment: A device company Comment: The same device company
Phrenic Nerve Stimulation Therapy suggested that we maintain the current that commented on CPT code 0426T
(APCs 5461–5464, 5724, and 5742) assignment and not revise the APC also commented on the APC assignment
assignment to APC 5464 for CPT code for CPT code 0427T. According to the
For the CY 2020 update, we proposed 0426T. The commenter stated that the commenter, the procedure describes the
to modify the APC assignment for resources required for the procedure are initial insertion of the implantable pulse
certain CPT codes associated with the more closely aligned with the generator when the full system cannot
Transvenous Phrenic Nerve Stimulation procedures in APC 5463. be implanted for a patient, and added
Therapy or remedē® System. Of the 13 that the procedure does not occur
codes, we received a comment on the Response: Based on our evaluation of
the procedure associated with CPT code frequently.
APC assignment for three codes,
specifically, CPT codes 0426T, 0427T, 0426T, we agree that the procedure The commenter also noted that the
and 0431T. As shown in Table 36 below described by the code appropriately fits hospital resources associated with CPT
with the long descriptors, and also in in APC 5463 based on its clinical code 0427T are very similar to CPT code
Addendum B to the CY 2020 OPPS/ASC similarity to other procedures in the 0431T, which is assigned to APC 5464,
proposed rule, we proposed to reassign APC. CPT code 0426T describes the and recommended the assignment of
CPT codes 0426T and 0431T from APC insertion or replacement of the both procedures to APC 5464.
5463 (Level 3 Neurostimulator and stimulation lead associated with a Response: Based on our review of the
Related Procedures) to APC 5464 (Level neurostimulator system for the two procedures, we agree that the
4 Neurostimulator and Related treatment of central sleep apnea, and resources associated with inserting or
Procedures) with a proposed payment APC 5463 includes other procedures replacing a pulse generator for a
rate of $29,025.99. In addition, we that involve the insertion or neurostimulator system that is described
proposed to continue to assign CPT replacement of a stimulation lead for a by CPT code 0427T are very similar to
code 0427T to APC 5463 ((Level 3 neurostimulator system. Therefore, we removing and replacing a pulse
Neurostimulator and Related will maintain the APC assignment for generator for a neurostimulator system
Procedures) with a proposed payment CPT code 0426T to APC 5463 for CY that is described by CPT code 0431T.
2020.
ER12NO19.056</GPH>
rate of $19,370.82. Consequently, we are modifying our
proposal and reassigning CPT code system that is described by CPT code Therapy or remedē® System can be
0427T to APC 5464. 0431T. Therefore, we are finalizing our found in Addendum B of this final rule
Comment: The same device company proposal for CPT code 0431T and with comment period. Table 36 below
that commented on CPT codes 0426T assigning the code to APC 5464. lists the long descriptors for all 13 codes
and 0427T also commented on CPT In summary, after consideration of the and the final APC and SI assignments
code 0431T. Specifically, the public comment, we are finalizing our for CY 2020. In addition, we refer
commenter concurred with the APC proposal with modification. readers to Addendum D1 of this final
reassignment for the code to APC 5464. Specifically, we are finalizing our APC rule with comment period for the status
Response: As indicated above, based proposal for CPT code 0431T to APC
indicator meanings for all codes
on our review of the two procedures, we 5464, however, we are maintaining the
agree that the resources associated with reported under the OPPS for CY 2020.
APC assignment for CPT code 0426T to
inserting or replacing a pulse generator APC 5463, and reassigning CPT code Both Addendum B and Addendum D1
for a neurostimulator system that is 0427T to APC 5464. We note that the are available via the internet on the
described by CPT code 0427T are very final CY 2020 OPPS payment rates for CMS website.
similar to removing and replacing a all the codes associated with the BILLING CODE 4120–01–P
pulse generator for a neurostimulator Transvenous Phrenic Nerve Stimulation
ER12NO19.057</GPH>
BILLING CODE 4120–01–C believed that the data leading to the with the commenter that the code
23. Surgical Pathology Tissue Exam APC reassignment must be flawed and should continue to be assigned to APC
(APC 5673) added that charge-based cost data were 5673 for CY 2020. Specifically, CPT
neither designed nor intended to be an code 88307 shows a geometric mean
In CY 2019, CPT code 88307 (Level
accurate estimate of service/procedure cost of approximately $219, which is
V—surgical pathology, gross and
level costs at the CPT code level. The more appropriate in APC 5673 whose
microscopic examination) was assigned
commenter stated that the hospital geometric cost is approximately $277
to APC 5673 (Level 3 Pathology) with a
charge-based cost data used for OPPS compared to the geometric mean cost of
payment rate of $274.22. For CY 2020,
we proposed to reassign the code to rate-setting allows CMS to estimate about $140 for APC 5672. Consequently,
APC 5672 (Level 2 Pathology) with a costs for purposes of grouping a number we are revising our proposal and
proposed payment rate of $148.62. of services or procedures (multiple maintaining the APC assignment for
Comment: A commenter disagreed distinct codes) into appropriate CPT code 88307 to APC 5673 for CY
with the proposed reassignment and clinically and economically 2020.
urged CMS to continue to assign CPT homogeneous APCs.
In summary, after consideration of the
code 88307 to APC 5673. This same Response: As stated in section III.B. public comment, and after our analysis
commenter reported that the service (Final OPPS Changes—Variations of the updated claims data for this final
includes complex Level V surgical Within APCs) of this final rule with rule with comment period, we are
pathology specimens and the proposed comment period, payments for OPPS finalizing our proposal with
change represents a 46 percent decrease services and procedures are based on modification. Specifically, we are
in the payment amount. The commenter our analysis of the latest claims data. revising the APC assignment for CPT
added that the proposed reassignment For the proposed rule, the OPPS
code 88307 to APC 5673 for CY 2020.
creates a resource cost rank order proposed payment rates were based on
The final CY 2020 payment rate for the
anomaly with other physician services claims data that were submitted
code can be found in Addendum B to
and the technical costs will not be fully between January 1, 2018 through
this final rule with comment period
recovered from each unit of service. In December 31, 2018, that were processed
(which is available via the internet on
addition, the commenter believed that on or before December 31, 2018.
However, for the final rule, the OPPS the CMS website).
the data do not identify actual costs for
specific procedures, and stated that the final payment rates are based on claims As we do every year, we will
cost associated with CPT code 88307 is that were submitted between January 1, reevaluate the APC assignment for CPT
greater than six times the cost of the 2018 through December 31, 2018, that code 88307 for the next rulemaking
services assigned to APC 5672 (Level 2 were processed on or before June 30, cycle. We note that we review, on an
Pathology) based on physician fee 2019. Based on the latest hospital annual basis, the APC assignments for
schedule technical component cost outpatient claims data used for this final all services and items paid under the
ER12NO19.058</GPH>
differences. The commenter also rule with comment period, we agree OPPS.
24. Urology Procedures they believed the service is clinically period, we are unable to determine
a. HIFU Procedure—High-Intensity similar and comparable in terms of whether hospitals are misreporting the
Focused Ultrasound of the Prostate resources to cryoablation of the prostate, procedure. It is generally not our policy
(APC 5375) which is described by CPT code 55873 to judge the accuracy of hospital coding
(Cryosurgical ablation of the prostate and charging for purposes of ratesetting.
In 2017, CMS received a new (includes ultrasonic guidance and We rely on hospitals to accurately report
technology application for the prostate monitoring), and placed in APC 5376 the use of HCPCS codes in accordance
HIFU procedure and established a new (Level 6 Urology and Related Services), with their code descriptors and CPT and
code, specifically, HCPCS code C9747 with a proposed payment rate of CMS instructions, and to report services
(Ablation of prostate, transrectal, high $8,193.30. The commenters believed on claims and charges and costs for the
intensity focused ultrasound (hifu), that the geometric mean cost, and services on their Medicare hospital cost
including imaging guidance). Based on ultimately, the APC determination for report appropriately. Also, we do not
the estimated cost provided in the new the prostate HIFU procedure was based specify the methodologies that hospitals
technology application, we assigned the on inaccurate hospital costs. They use to set charges for this or any other
new code to APC 5376 (Level 6 Urology believed that the average cost of the service. Furthermore, we state in
and Related Services) with a payment procedure should be approximately
rate of $7,452.66 effective July 1, 2017. Chapter 4 of the Medicare Claims
$6,250, and requested a reassignment to Processing Manual that ‘‘it is extremely
We announced the SI and APC APC 5376 to enable Medicare
assignment in the July 2017 OPPS important that hospitals report all
beneficiaries to continue to receive the HCPCS codes consistent with their
quarterly update CR (Transmittal 3783,
treatment. They stated based on their descriptors; CPT and/or CMS
Change Request 10122, dated May 26,
projections that maintaining the APC instructions and correct coding
2017).
For the CY 2018 update, we made no assignment to APC 5375 for the principles, and all charges for all
change to the APC assignment and procedure will decrease the number of services they furnish, whether payment
continued to assign HCPCS code C9747 Medicare beneficiaries receiving the for the services is made separately paid
to APC 5376 with a payment rate of treatment by 75 percent if the CY 2020 or is packaged’’ to enable CMS to
$7,596.26. We note that the payment payment rate is finalized. establish future ratesetting for OPPS
rates for the CY 2018 OPPS update were Response: As we have stated every services.
based on claims submitted between year since the implementation of the
OPPS on August 1, 2000, we review, on Comment: A commenter reported that
January 1, 2016 through December 30, the prostate HIFU procedure (C9747)
2016, that were processed on or before an annual basis, the APC assignments
for all services and items paid under the and cryoablation of the prostate (55873)
June 30, 2017. Since HCPCS code C9747 are two clinically similar procedures for
was established on July 1, 2017, we had OPPS based on our analysis of the latest
claims data. For CY 2020, based on the ablation of prostate for cancer, and
no claims data for the procedure for use are the only two acknowledged
in ratesetting for CY 2018. claims submitted between January 1,
2018 through December 30, 2018, that treatments for radiorecurrent, non-
However, for the CY 2019 update, metastatic prostate cancer. This same
based on the latest claims data for the were processed on or before June 30,
2019, our analysis of the latest claims commenter requested that we either
final rule, we revised the APC create a new APC group specific to
assignment for HCPCS code C9747 from data for this final rule supports
maintaining HCPCS code C9747 in APC prostate ablation procedures or modify
APC 5376 to APC 5375 with a payment
5375. Specifically, our claims data the organization of HCPCS codes within
rate of $4,020.54. We note that the
shows a geometric mean cost of the urology family of APCs. The
payment rates for CY 2019 were based
approximately $5,850 for HCPCS code commenter specifically noted that a
on claims submitted between January 1,
C9747 based on 264 single claims (out reorganization for APCs 5374 through
2017 through December 30, 2017, that
were processed on or before June 30, of 268 total claims), which is 5376 would be appropriate but added
2018. Our claims data showed a comparable to the geometric mean cost that there are other inconsistencies
geometric mean cost of approximately of about $4,140 for APC 5375, rather across procedures within the urology
$5,000 for HCPCS code C9747 based on than the geometric mean cost of APCs. The commenter also mentioned
64 single claims (out of 64 total claims), approximately $7,894 for APC 5376. that CPT codes 50555 (Renal endoscopy
which was significantly lower than the Also, we do not agree that the through established nephrostomy or
geometric mean cost of about $7,717 for resource costs associated with the pyelostomy, with or without irrigation,
APC 5376. We believed that the prostate HIFU procedure are similar to instillation, or ureteropyelography,
geometric mean cost for HCPCS code those of cryoablation of the prostate. exclusive of radiologic service; with
C9747 was more comparable to the Our claims data for the CY 2020 update biopsy) and 50557 (Renal endoscopy
geometric mean cost of approximately shows a geometric mean cost of about through established nephrostomy or
$4,055 for APC 5375. Consequently, we $8,152 based on 1,417 single claims (out pyelostomy, with or without irrigation,
reassigned the code from APC 5376 to of 1,429 total claims) for cryoablation of instillation, or ureteropyelography,
APC 5375 (Level 5 Urology and Related the prostate. The geometric mean cost exclusive of radiologic service; with
Services) for CY 2019. for CPT code 55873 is reasonably fulguration and/or incision, with or
For CY 2020, we proposed to continue consistent with APC 5376, whose without biopsy) are assigned to two
to assign HCPCS code C9747 to APC geometric mean cost is approximately different APCs, however, their APC
5375 with a proposed payment rate $7,894. assignments appear reversed. The
$4,286.06. With respect to the issue of inaccurate commenter further suggested updating
Comment: Several commenters hospital cost reporting for HCPCS code the procedures within APCs 5374, 5375,
disagreed with the APC assignment for C9747, based on our analysis of the CY and 5376 so that the geometric mean
HCPCS code C9747 and recommended a 2020 hospital outpatient claims data costs for the procedure fall into the
reclassification to APC 5376 because used for this final rule with comment following ranges:
Response: We appreciate the transperineal periurethral adjustable 0548T, which was previously described
commenter’s suggestions and may balloon continence device procedure, by HCPCS code C9746. In addition, we
consider a reorganization of the which is associated with ProACT proposed to assign CPT codes 0549T,
procedures in the urology APCs in Therapy, and established a new code, 0550T, and 0551T to APCs 5375, 5374,
future rulemaking. We note that each specifically, HCPCS code C9746. Based and 5371, respectively.
year, under the OPPS, we revise and on the estimated cost for the bilateral Comment: A medical device company
make changes to the APC groupings placement of the balloon continence suggested that CPT code 0548T remain
based on the latest hospital outpatient devices, we assigned the code to APC in APC 5377, consistent with the APC
claims data to appropriately place 5377 (Level 7 Urology and Related assignment for the predecessor code
procedures and services in APCs based Services) with a payment rate of (HCPCS code C9746). This commenter
on clinical characteristics and resource $14,363.61 effective July 1, 2017. We indicated that the calculated geometric
similarity. For CY 2020, based on our announced the new code, and interim SI mean cost does not accurately reflect the
analysis of the latest claims data for this and APC assignments, and payment rate actual cost of the procedure. The
final rule, we do not believe that in the July 2017 quarterly update to the commenter noted there were only two
establishing a new APC specific to OPPS (Transmittal 3783, Change billings identified in the CMS data—one
prostate ablation procedures is Request 10122, dated May 26, 2017). billing at the correct cost of $16,250 and
necessary, nor do we believe that For the CY 2018 update, we made no one billing incorrectly recorded at $0.
modifying the HCPCS codes within the change to the APC assignment and The commenter stated that the resulting
urology family APCs is appropriate at continued to assign HCPCS code C9746 calculation of the geometric mean cost
this time. to APC 5377 with a payment rate of of $8,125 does not accurately represent
With respect to CPT codes 50555 and $15,697.82. We note that OPPS payment the actual cost of the bilateral procedure
50557, based on our review of the rates for the CY 2018 update were based for CPT code 0548T. In addition, the
claims data for this final rule with on claims submitted between January 1, same commenter requested a
comment period, we revised the APC 2016 through December 30, 2016, that reassignment from APC 5375 to APC
assignment for CPT code 50555 from were processed on or before June 30, 5376 for CPT code 0549T.
APC 5375 to APC 5376, and maintained 2017. Since HCPCS code C9746 was Response: As we have stated every
the APC assignment for CPT code 50557 established on July 1, 2017, we had no year since the implementation of the
in APC 5376. Specifically, our claims claims data for the procedure for use in OPPS on August 1, 2000, we review, on
data show a geometric about $7,327 for ratesetting in CY 2018. an annual basis, the APC assignments
CPT code 50555 and approximately For the CY 2019 update, we again had for all services and items paid under the
$6,224 for CPT code 50557, which are no claims data for the code so we made OPPS based on our analysis of the latest
more comparable with the geometric no change to the APC assignment and claims data. For CY 2020, based on
cost for APC 5376 of about $7,894 continued to assign HCPCS code C9746 claims submitted between January 1,
unlike that of APC 5375 whose
to APC 5377 with a payment rate of 2018 through December 30, 2018, that
geometric mean cost is approximately
$16,319.55. We note that the payment were processed on or before June 30,
$4,140.
In summary, after consideration of the rates for CY 2019 were based on claims 2019, our analysis of the latest claims
public comments, and after our analysis submitted between January 1, 2017 data for this final rule supports revising
of the updated claims data for this final through December 30, 2017, that were the APC assignment for CPT code 0548T
rule with comment period, we are processed on or before June 30, 2018. (which was previously described by
finalizing our proposal, without In July 2019, the CPT Editorial Panel predecessor HCPCS code C9746) from
modification, to continue to assign established four new codes to describe APC 5377 to APC 5376 (Level 6 Urology
HCPCS code C9747 to APC 5375 for CY the transperineal periurethral adjustable and Related Services). Specifically, our
2020. The final CY 2020 payment rate balloon continence device procedure, claims data shows a geometric mean
for the code can be found in Addendum specifically, CPT codes 0548T, 0549T, cost of approximately $9,504 for HCPCS
B to this final rule with comment 0550T, and 0551T. In the July 2019 code C9746 based on 7 single claims
period. In addition, we refer readers to quarterly update to the OPPS (out of 7 total claims), which is most
Addendum D1 of this final rule with (Transmittal 4313, Change Request comparable to the geometric mean cost
comment period for the status indicator 11318, dated May 24, 2019), we listed of about $7,894 for APC 5376, rather
(SI) meanings for all codes reported the temporary APC assignments for the than the geometric mean cost of
under the OPPS. Both Addendum B and new codes in the July 2019 OPPS approximately $17,195 for APC 5377.
D1 are available via the internet on the Update CR and announced the deletion We believe that assigning CPT code
CMS website. of HCPCS code C9746 on June 30, 2019, 0548T to APC 5377 would significantly
since it was replaced with CPT code overpay for the procedure.
b. ProACT Procedure—Transperineal 0548T effective July 1, 2019. These In addition, based on the geometric
Periurethral Adjustable Balloon codes are listed in Table 37 along with mean cost for the placement of the
Continence Device Procedure (APCs their long descriptors and proposed SI bilateral balloon continence devices
5371, 5374, 5375, and 5376) and APC assignments. (CPT code 0548T), we do not agree that
In 2017, CMS received a new For CY 2020, we proposed to revise we should revise the APC assignment
ER12NO19.059</GPH>
technology application for the the APC assignment for new CPT code for CPT code 0549T, which represents
the unilateral placement of the balloon use to set charges for this or any other rule with comment period, we are
continence device, from APC 5375 to service. We also state in Chapter 4 of the finalizing our proposal, without
APC 5376. We believe that the cost Medicare Claims Processing Manual modification, to assign CPT codes
associated with CPT code 0549T should that ‘‘it is extremely important that 0548T, 0549T, 0550T, and 0551T to the
be less than that of CPT code 0548T hospitals report all HCPCS codes APCs listed in Table 37 below. The final
since CPT code 0549T describes the use consistent with their descriptors; CPT CY 2020 payment rate for the codes can
of only one device. and/or CMS instructions and correct be found in Addendum B to this final
Moreover, we rely on hospitals to coding principles, and all charges for all rule with comment period. In addition,
accurately report the use of HCPCS services they furnish, whether payment we refer readers to Addendum D1 of
codes in accordance with their code for the services is made separately paid
this final rule with comment period for
descriptors and CPT and CMS or is packaged’’ to enable CMS to
instructions, and to appropriately report the status indicator (SI) meanings for all
establish future ratesetting for OPPS
services on claims and charges and costs services. codes reported under the OPPS. Both
for the services on their Medicare In summary, after consideration of the Addendum B and D1 are available via
hospital cost report. However, we do not public comment and after our analysis the internet on the CMS website.
specify the methodologies that hospitals of the updated claims data for this final
c. Rezum Procedure—Transurethral OPPS/ASC final rule and the January 30, 2017 that were processed on or
High Energy Water Vapor Thermal 2018 OPPS Update CR (Transmittal before June 30, 2018.
Therapy of the Prostate (APC 5373) 3941, Change Request 10417, dated For the CY 2020 update, we proposed
December 22, 2017). to maintain the APC assignment for CPT
In late 2017, CMS received a new For the CY 2019 update, the CPT code 53854 to APC 5373 with a
technology application for the Editorial Panel established a new code proposed payment rate of $1,797.97.
transurethral radiofrequency generated to describe the Rezum procedure, Comment: Several commenters
water vapor thermal therapy of the specifically, CPT code 53854 requested a reclassification for CPT code
prostate, also known as the Rezum (Transurethral destruction of prostate 53854 from APC 5373 to APC 5374
procedure, and established a new code, tissue; by radiofrequency generated (Level 4 Urology and Related Services)
specifically, HCPCS code C9748 water vapor thermotherapy) effective with a proposed payment rate of
(Transurethral destruction of prostate January 1, 2019. We deleted HCPCS $3,059.21. The commenters reported
tissue; by radiofrequency water vapor code C9748 on December 31, 2018 that the Rezum procedure is most
(steam) thermal therapy) effective because it was replaced with CPT code clinically similar to the transurethral
January 1, 2018. Based on the estimated 53854 and assigned the new code to microwave therapy (TUMT), which is
cost of the procedure, we assigned the APC 5373, which was the same APC described by CPT code 53850
new code to APC 5373 (Level 3 Urology assignment for the predecessor code, (Transurethral destruction of prostate
and Related Services) with a payment with a payment rate of $1,739.75. We tissue; by microwave thermotherapy),
rate of $1,695.68 effective January 1, note that payment rates for the CY 2019 and transurethral needle
2018. The new code appeared in both update were based on claims submitted (radiofrequency) ablation (TUNA),
ER12NO19.060</GPH>
the OPPS Addendum B of the CY 2018 between January 1, 2017 and December which is described by CPT code 53852
(Transurethral destruction of prostate CPT code 53854 (which was previously procedures are much higher than those
tissue; by radiofrequency described by predecessor HCPCS code for the Rezum procedure.
thermotherapy). Some commenters C9748) to APC 5373. Our claims data Therefore, after consideration of the
reported that the primary difference show a geometric mean cost of public comments, and after our analysis
between each of these codes is the approximately $1,899 for the
of the updated claims data for this final
energy source used to destroy or shrink predecessor HCPCS code C9748 based
rule with comment period, we are
the prostate tissue, specifically, CPT on 191 single claims (out of 192 total
code 53850 uses microwave energy, claims). The geometric mean cost for the finalizing our proposal, without
53852 uses radiofrequency energy, and Rezum procedure is more in line with modification, and assigning CPT code
53854 uses radiofrequency generated the geometric mean cost of about $1,733 53854 to APC 5373. Table 38 below list
water vapor thermotherapy. Apart from for APC 5373 rather than with APC 5374 the final APC assignments for CPT code
the energy source, the commenters whose geometric mean cost is 58350 (TUMT), 53852 (TUNA) and
indicated that the procedures and approximately $2,953. 53854 (Rezum). In addition, the final CY
resources used in these procedures are In addition, based on our analysis of 2020 payment rates for these procedures
similar. Consequently, they the claims data, the resource costs can be found in Addendum B to this
recommended that all three procedures associated with the TUMT and TUNA final rule with comment period.
be placed in APC 5374. procedures are not similar to the Rezum Further, we refer readers to Addendum
Response: As we have stated every procedure. While all three procedures D1 of this final rule with comment
year since the implementation of the treat the same indication and utilize the period for the status indicator (SI)
OPPS on August 1, 2000, we review, on same type of technology, time, set up, meanings for all codes reported under
an annual basis, the APC assignments and planning, their resource costs vary. the OPPS. Both Addendum B and D1
for all services and items paid under the Our claims data show a geometric mean are available via the internet on the
OPPS based on our analysis of the latest cost of approximately $2,851 for the CMS website.
claims data. For CY 2020, based on TUMT procedure (CPT code 53850)
claims submitted between January 1, based on 41 single claims (out of 41 As always, we will reevaluate the
2018 through December 30, 2018, that total claims), and about $3,027 for the APC assignment for CPT code 53854 in
were processed on or before June 30, TUNA procedure (CPT code 53852) the next rulemaking cycle. As stated
2019, our analysis of the latest claims based on 513 single claims (out of 514 above, we review, on an annual basis,
data for this final rule supports total claims). In both cases, the resource the APC assignments for all services and
maintaining the APC assignment for costs for the TUMT and TUNA items paid under the OPPS.
d. VaporBlate Procedure—Transurethral indicate that the code is not payable by indicator ‘‘NP’’ in Addendum B to
Radiofrequency Generated Water Vapor Medicare when submitted on outpatient indicate that the code is new for CY
Thermal Therapy of the Prostate claims (any outpatient bill type) because 2020 and that public comments would
the services associated with these codes be accepted on the proposed status
As displayed in Addendum B to the are either not covered by any Medicare indicator assignment. We note that the
CY 2020 OPPS/ASC proposed rule, we outpatient benefit category, are code will be effective January 1, 2020.
proposed to assign the procedure statutorily excluded by Medicare, or are Comment: A medical device company
described by CPT code 0582T not reasonable and necessary. The code reported that the technology associated
(Transurethral ablation of malignant was listed as 0X76T (the 5-digit CMS with this new code received FDA
prostate tissue by high-energy water placeholder code) in Addendum B with approval as an IDE. Specifically, the
vapor thermotherapy, including the short descriptor, and again in VaporBlate technology was designated
intraoperative imaging and needle Addendum O with the long descriptor. by the FDA as a Category B IDE on
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guidance) to status indicator ‘‘E1’’ to We also assigned the code to comment August 29, 2019. The commenter also
stated that they are in the process of assign CPT code 0582T to status to afford a pass-through payment period
applying for Medicare coverage of the indicator ‘‘E1’’. We refer readers to that is as close to a full 3 years as
Category B IDE clinical trial. In the Addendum D1 of this final rule with possible for all pass-through payment
event the clinical trial is approved by comment period for the complete list of devices.
Medicare, the commenter suggested the OPPS payment status indicators and We refer readers to the CY 2017
assigning the code to one of the their definitions for CY 2020. OPPS/ASC final rule with comment
following APCs: Addendum D1 is available via the period (81 FR 79648 through 79661) for
• APC 1590 (New Technology—Level internet on the CMS website. a full discussion of the current device
39 ($15,001-$20,000)) with a proposed pass-through payment policy.
payment rate of $ 17,500.50; or IV. OPPS Payment for Devices
We also have an established policy to
• APC 5377 (Level 7 Urology and A. Pass-Through Payment for Devices package the costs of the devices that are
Related Services) with a proposed no longer eligible for pass-through
payment rate of $17,465.94. 1. Beginning Eligibility Date for Device
payments into the costs of the
The commenter explained that the Pass-Through Status and Quarterly
procedures with which the devices are
VaporBlate procedure involves the Expiration of Device Pass-Through
reported in the claims data used to set
transurethral ablation of malignant Payments
the payment rates (67 FR 66763).
prostate tissue by high-energy water a. Background
vapor thermotherapy, which is unlike b. Expiration of Transitional Pass-
that of the Rezum procedure that The intent of transitional device pass- Through Payments for Certain Devices
involves transurethral radiofrequency through payment, as implemented at 42
CFR 419.66, is to facilitate access for As stated earlier, section
generated water vapor thermal therapy 1833(t)(6)(B)(iii) of the Act requires that,
for benign prostatic hyperplasia (BPH). beneficiaries to the advantages of new
and truly innovative devices by under the OPPS, a category of devices
The commenter added that the resource be eligible for transitional pass-through
costs associated with the VaporBlate allowing for adequate payment for these
new devices while the necessary cost payments for at least 2 years, but not
procedure are significantly higher than more than 3 years. There currently is
those for the Rezum procedure. The data is collected to incorporate the costs
for these devices into the procedure one device category eligible for pass-
Rezum generator (capital equipment) through payment: C1823 Generator,
used in CPT code 53854 costs $32,500 APC rate (66 FR 55861). Under section
1833(t)(6)(B)(iii) of the Act, the period neurostimulator (implantable),
and the Rezum supply kit (disposables) nonrechargeable, with transvenous
costs between $1,000 and $1,500, while for which a device category eligible for
transitional pass-through payments sensing and stimulation leads), which
the VaporBlate generator (capital was established effective January 1,
equipment) used to perform the under the OPPS can be in effect is at
least 2 years but not more than 3 years. 2019. The pass-through payment status
procedure described by the VaporBlate of the device category for HCPCS code
procedure costs $80,000 and the supply Prior to CY 2017, our regulation at 42
CFR 419.66(g) provided that this pass- C1823 will end on December 31, 2021.
kits (disposables) cost $12,500 each. HCPCS code C1823 will continue to
Based on the clinical and cost through payment eligibility period
began on the date CMS established a receive pass-through status in CY 2020.
differences, the commenter stated that
CPT code 0582T should not be assigned particular transitional pass-through 2. New Device Pass-Through
to the same APC as CPT code 53854 category of devices, and we based the Applications
(Rezum procedure). pass-through status expiration date for a
a. Background
Response: Based on our device category on the date on which
understanding of the procedure, we pass-through payment was effective for Section 1833(t)(6) of the Act provides
found that the service associated with the category. In the CY 2017 OPPS/ASC for pass-through payments for devices,
CPT code 0582T is currently in clinical final rule with comment period (81 FR and section 1833(t)(6)(B) of the Act
trial (Study Title: ‘‘Ablation of Prostate 79654), in accordance with section requires CMS to use categories in
Tissue in Patients With Intermediate 1833(t)(6)(B)(iii)(II) of the Act, we determining the eligibility of devices for
Risk Localized Prostate Cancer’’; amended § 419.66(g) to provide that the pass-through payments. As part of
ClinicalTrials.gov Identifier: pass-through eligibility period for a implementing the statute through
NCT04087980). Further review of the device category begins on the first date regulations, we have continued to
clinical trial revealed that the clinical on which pass-through payment is made believe that it is important for hospitals
study has not yet met CMS’ standards under the OPPS for any medical device to receive pass-through payments for
for coverage, nor does it appear on the described by such category. devices that offer substantial clinical
CMS Approved IDE List, which can be In addition, prior to CY 2017, our improvement in the treatment of
found at this CMS website: https:// policy was to propose and finalize the Medicare beneficiaries to facilitate
www.cms.gov/Medicare/Coverage/IDE/ dates for expiration of pass-through access by beneficiaries to the advantages
Approved-IDE-Studies.html. Because status for device categories as part of the of the new technology. Conversely, we
the VaporBlate technology has not been OPPS annual update. This means that have noted that the need for additional
approved for Medicare coverage as a device pass-through status would expire payments for devices that offer little or
Category B IDE, we believe that we at the end of a calendar year when at no clinical improvement over
should continue to assign CPT code least 2 years of pass-through payments previously existing devices is less
0582T to status indicator ‘‘E1’’. If this had been made, regardless of the quarter apparent. In such cases, these devices
technology later meets CMS’ standards in which the device was approved. In can still be used by hospitals, and
for coverage, we will reassess the APC the CY 2017 OPPS/ASC final rule with hospitals will be paid for them through
assignment for the code in a future comment period (81 FR 79655), we appropriate APC payment. Moreover, a
quarterly update and/or rulemaking changed our policy to allow for goal is to target pass-through payments
cycle. quarterly expiration of pass-through for those devices where cost
Therefore, after consideration of the payment status for devices, beginning considerations might be most likely to
public comment, we are finalizing our with pass-through devices approved in interfere with patient access (66 FR
proposal, without modification, to CY 2017 and subsequent calendar years, 55852; 67 FR 66782; and 70 FR 68629).
We note that, in section IV.A.4. of the be established. The device to be comment process for the proposed rule.
CY 2020 OPPS/ASC proposed rule, we included in the new category must— This process allows those applications
proposed an alternative pathway that • Not be appropriately described by that we are able to determine meet all
would grant fast-track device pass- an existing category or by any category of the criteria for device pass-through
through payment under the OPPS for previously in effect established for payment under the quarterly review
devices approved under the FDA transitional pass-through payments, and process to receive timely pass-through
Breakthrough Device Program for OPPS was not being paid for as an outpatient payment status, while still allowing for
device pass-through payment service as of December 31, 1996; a transparent, public review process for
applications received on or after January • Have an average cost that is not all applications (80 FR 70417 through
1, 2020. We refer readers to section ‘‘insignificant’’ relative to the payment 70418).
IV.A.4. of the CY 2020 OPPS/ASC amount for the procedure or service More details on the requirements for
proposed rule for a complete discussion with which the device is associated as device pass-through payment
on this proposal. determined under § 419.66(d) by applications are included on the CMS
As specified in regulations at 42 CFR demonstrating: (1) The estimated website in the application form itself at:
419.66(b)(1) through (3), to be eligible average reasonable costs of devices in http://www.cms.gov/Medicare/
for transitional pass-through payment the category exceeds 25 percent of the Medicare-Fee-for-Service-Payment/
under the OPPS, a device must meet the applicable APC payment amount for the HospitalOutpatientPPS/passthrough_
following criteria: service related to the category of payment.html, in the ‘‘Downloads’’
• If required by FDA, the device must devices; (2) the estimated average section. In addition, CMS is amenable to
have received FDA approval or reasonable cost of the devices in the meeting with applicants or potential
clearance (except for a device that has category exceeds the cost of the device- applicants to discuss research trial
received an FDA investigational device related portion of the APC payment design in advance of any device pass-
exemption (IDE) and has been classified amount for the related service by at least through application or to discuss
as a Category B device by the FDA), or 25 percent; and (3) the difference application criteria, including the
meet another appropriate FDA between the estimated average substantial clinical improvement
exemption; and the pass-through reasonable cost of the devices in the criterion.
payment application must be submitted category and the portion of the APC
within 3 years from the date of the payment amount for the device exceeds b. Applications Received for Device
initial FDA approval or clearance, if 10 percent of the APC payment amount Pass-Through Payment for CY 2020
required, unless there is a documented, for the related service (with the We received seven complete
verifiable delay in U.S. market exception of brachytherapy and applications by the March 1, 2019
availability after FDA approval or temperature-monitored cryoablation, quarterly deadline, which was the last
clearance is granted, in which case CMS which are exempt from the cost quarterly deadline for applications to be
will consider the pass-through payment requirements as specified at received in time to be included in the
application if it is submitted within 3 § 419.66(c)(3) and (e)); and CY 2020 OPPS/ASC proposed rule. We
years from the date of market • Demonstrate a substantial clinical received one of the applications in the
availability; improvement, that is, substantially second quarter of 2018, three of the
• The device is determined to be improve the diagnosis or treatment of an applications in the fourth quarter of
reasonable and necessary for the illness or injury or improve the 2018, and three of the applications in
diagnosis or treatment of an illness or functioning of a malformed body part the first quarter of 2019. None of the
injury or to improve the functioning of compared to the benefits of a device or applications were approved for device
a malformed body part, as required by devices in a previously established pass-through payment during the
section 1862(a)(1)(A) of the Act; and category or other available treatment. quarterly review process.
• The device is an integral part of the Beginning in CY 2016, we changed Applications received for the later
service furnished, is used for one our device pass-through evaluation and deadlines for the remaining 2019
patient only, comes in contact with determination process. Device pass- quarters (June 1, September 1, and
human tissue, and is surgically through applications are still submitted December 1), if any, will be presented
implanted or inserted (either to CMS through the quarterly in the CY 2021 OPPS/ASC proposed
permanently or temporarily), or applied subregulatory process, but the rule. We note that the quarterly
in or on a wound or other skin lesion. applications will be subject to notice- application process and requirements
In addition, according to and-comment rulemaking in the next have not changed in light of the
§ 419.66(b)(4), a device is not eligible to applicable OPPS annual rulemaking addition of rulemaking review. Detailed
be considered for device pass-through cycle. Under this process, all instructions on submission of a
payment if it is any of the following: (1) applications that are preliminarily quarterly device pass-through payment
Equipment, an instrument, apparatus, approved upon quarterly review will application are included on the CMS
implement, or item of this type for automatically be included in the next website at: https://www.cms.gov/
which depreciation and financing applicable OPPS annual rulemaking Medicare/Medicare-Fee-for-Service-
expenses are recovered as depreciation cycle, while submitters of applications Payment/HospitalOutpatientPPS/
assets as defined in Chapter 1 of the that are not approved upon quarterly Downloads/catapp.pdf. A discussion of
Medicare Provider Reimbursement review will have the option of being the applications received by the March
Manual (CMS Pub. 15–1); or (2) a included in the next applicable OPPS 1, 2019 deadline is presented below.
material or supply furnished incident to annual rulemaking cycle or
a service (for example, a suture, withdrawing their application from (1) Surefire® SparkTM Infusion System
customized surgical kit, or clip, other consideration. Under this notice-and- TriSalus Life Sciences submitted an
than a radiological site marker). comment process, applicants may application for a new device category
Separately, we use the following submit new evidence, such as clinical for transitional pass-through payment
criteria, as set forth under § 419.66(c), to trial results published in a peer- status for the Surefire® SparkTM
determine whether a new category of reviewed journal or other materials for Infusion System. The Surefire® SparkTM
pass-through payment devices should consideration during the public Infusion System is described as a
flexible, ultra-thin microcatheter with a With respect to the eligibility criterion than hemodialysis)). The applicant
self-expanding, nonocclusive one-way at § 419.66(b)(3), according to the describes the Surefire® SparkTM
microvalve at the distal end. The applicant, the use of the Surefire® Infusion System as being inserted
applicant stated that it has designed the SparkTM Infusion System is integral to through a small incision in the groin or
Pressure Enabled Drug DeliveryTM the service of providing delivery of the wrist. We invited public comments
technology of the Surefire® SparkTM chemotherapy into liver tumors, is used on this issue.
Infusion System to overcome for one patient only, comes in contact Comment: The manufacturer of the
intratumoral pressure in solid tumors with human skin, and is applied in or device does not believe there is an
and improve distribution and on a wound or other skin lesion. The existing pass-through payment category
penetration of therapy during applicant also claimed the Surefire® that describes the Surefire® SparkTM
Transcatheter Arterial SparkTM Infusion System meets the Infusion System, commenting that the
Chemoembolization (TACE) procedures. device eligibility requirements of existing device categories that CMS
TACE is a minimally invasive, image- § 419.66(b)(4) because it is not an identified do not adequately describe
guided procedure used to infuse a high instrument, apparatus, implement, or critical aspects of the device. The
dose of chemotherapy into liver tumors. items for which depreciation and manufacturer noted that existing
According to the applicant, the pliable, financing expenses are recovered, and it categories, such as C1887 Catheter,
one-way valve at the distal tip of the is not a supply or material furnished guiding (may include infusion/
Surefire® SparkTM Infusion System incident to a service. We invited public perfusion capability) and C1751
creates a temporary local increase in comments on whether the Surefire® Catheter, infusion, inserted
pressure during infusion, opening up SparkTM Infusion System meets the peripherally, centrally or midline (other
collapsed vessels in tumors, which eligibility criteria at § 419.66(b). than hemodialysis)—do not
enables perfusion and therapy delivery Comment: The manufacturer of appropriately describe catheters with a
in areas inaccessible to the systemic Surefire® SparkTM Infusion System pressure-enabled drug delivery (PEDD)
circulation, a positive hydrostatic believed that that the Surefire® SparkTM valve, a key mechanism of action of the
pressure gradient, and restores Infusion System met the eligibility Surefire® SparkTM Infusion System. The
convective flow to enable therapy to criteria at § 419.66(b). manufacturer stated that the PEDD valve
penetrate deeper into the tumor. During Response: We appreciate the is closely associated with differential
the TACE procedure, the physician first commenter’s input. Based on the and improved outcomes as compared to
gains catheter access into the arterial information we have received and our catheters without PEDD valves and is
system of the hepatic arteries through a review of the application, we have not appropriately described by existing
small incision in the groin or the wrist. determined that Surefire® SparkTM categories.
The applicant stated that the physician Infusion System meets the eligibility Response: We appreciate the
criterion at § 419.66(b)(3) and (b)(4). commenter’s input. After consideration
then uses real-time fluoroscopic
The criteria for establishing new of the public comments we received, we
guidance to navigate the Surefire®
device categories are specified at believe there is no existing pass-through
SparkTM Infusion System into the blood § 419.66(c). The first criterion, at payment category that appropriately
vessels feeding the tumors, infusing the § 419.66(c)(1), provides that CMS describes the Surefire® SparkTM
chemotherapy and embolic materials determines that a device to be included Infusion System, due to the pressure-
through the Surefire® SparkTM Infusion in the category is not appropriately enabled drug delivery (PEDD) valve
System until the tumor bed is described by any of the existing which offers a unique mechanism for
completely saturated. categories or by any category previously therapy delivery. Based on this
With respect to the newness criterion in effect, and was not being paid for as information, we believe that the
at § 419.66(b)(1), FDA granted 510(k) an outpatient service as of December 31, Surefire® SparkTM Infusion System
premarket clearance as of April 3, 2018. 1996. We identified several existing meets the eligibility criterion.
The application for a new device pass-through payment categories that The second criterion for establishing
category for transitional pass-through may be applicable to the Surefire® a device category, at § 419.66(c)(2),
payment status for the Surefire® SparkTM Infusion System. The Surefire® provides that CMS determines that a
SparkTM Infusion System was received SparkTM Infusion System may be device to be included in the category
on November 29, 2018, which is within described by HCPCS code C1887 has demonstrated that it will
3 years of the date of the initial FDA (Catheter, guiding (may include substantially improve the diagnosis or
approval or clearance. We invited infusion/perfusion capability)). The treatment of an illness or injury or
public comments on whether the applicant describes the Surefire® improve the functioning of a malformed
Surefire® SparkTM Infusion System SparkTM Infusion System as a device body part compared to the benefits of a
meets the newness criterion. used in vascular interventional device or devices in a previously
Comment: The manufacturer of procedures to deliver diagnostic and established category or other available
Surefire® SparkTM Infusion System therapeutic agents in the peripheral treatment. With respect to this criterion,
believed this device meets the eligibility vasculatures. The CMS List of Device the applicant submitted four studies to
criteria for device pass-through payment Category Codes for Present or Previous support the claim that their technology
under the regulation at § 419.66, which Pass-Through Payment and Related represents a substantial clinical
includes the newness criterion. Definitions describes HCPCS code improvement over existing technologies.
Response: We appreciate the C1887 as intended for the introduction The applicant asserts that the Surefire®
commenter’s input. After consideration of interventional/diagnostic devices into SparkTM Infusion System represents a
of the public comments we received and the coronary or peripheral vascular substantial clinical improvement over
based on the fact that the Surefire® systems. In the CY 2020 OPPS/ASC existing technologies because it offers a
SparkTM Infusion System application proposed rule, we also stated that the treatment option that no other catheters
was received within 3 years of FDA Surefire® SparkTM Infusion System may currently available can provide. The
approval, we believe that the Surefire® also be described by HCPCS code C1751 manufacturer notes that the self-
SparkTM Infusion System meets the (Catheter, infusion, inserted expanding, nonocclusive, one-way valve
newness criterion. peripherally, centrally or midline (other can infuse therapy at pressure higher
than the baseline mean arterial pressure, Based on the information submitted existing studies show statistically
and this pressurized delivery opens up by the applicant, one concern was that significant improvements. Additionally,
collapsed vessels in tumors and enables large-scale studies with long-term with regard to our questions about
perfusion and therapy delivery into follow-up were limited. Also, the impacts on mortality, we accept the
hypoxic areas of the liver tumors. The majority of studies presented had a applicant’s statement that there are
applicant also believes that the sample size of less than 25 and the other key clinical endpoints, such as
Surefire® SparkTM Infusion System highest sample size presented was less tumor necrosis and progression-free
represents a substantial clinical than 100 patients. Additionally, patient survival, that can be used to assess
improvement because the technology follow-up occurred mostly within a 3 to improvements from the SparkTM
has shown improved tumor response 6 month timeframe with few studies Infusion System.
rates in hepatocellular carcinoma, as occurring beyond this range. Another Comment: Multiple commenters
well as a decrease in the rate of disease concern was that none of the studies supported granting SparkTM Infusion
recurrence and the need for subsequent presented improvements in mortality System transitional pass-through
treatment. with the use of the Surefire® SparkTM payment status. Many of the
Infusion System. Outcomes focused commenters mentioned that SparkTM
The first pilot study of nine patients primarily on tumor response rates and Infusion System provides substantial
being treated for hepatocellular lesion size, based upon imaging. We clinical benefit over conventional
carcinoma, who received infusions via noted additional data on mortality therapy and urged CMS to approve the
both a conventional end-hole catheter endpoints would be helpful to fully transitional pass-through payment to
and an antireflux microcatheter, assess substantial clinical improvement. reduce cost burden and increase patient
demonstrated statistically significant We invited public comments on access.
reductions in downstream distribution whether the Surefire® SparkTM Infusion Response: We appreciate the
of embolic particles with the antireflux System meets the substantial clinical additional information that the
catheter and increases in tumor improvement criterion. commenters provided on the
deposition (p < 0.05).13 The second Comment: The manufacturer performance and the benefits of SparkTM
singlecenter retrospective study was responded to several statements Infusion System.
conducted with 22 patients treated for regarding Surefire® SparkTM Infusion After consideration of the public
hepatocellular carcinoma with the System and substantial clinical comments we received, we have
Surefire® SparkTM Infusion System and improvement in the CY 2020 OPPS/ASC determined that SparkTM Infusion
TACE. As assessed by MRI, there proposed rule, and asserted that System does meet the substantial
appeared to be overall disease response SparkTM Infusion System meets the clinical improvement criterion.
in 91 percent of patients and 85 percent substantial clinical improvement The third criterion for establishing a
of lesions and complete response in 32 criterion. The manufacturer stated that device category, at § 419.66(c)(3),
percent of patients and 54 percent of the population size in the studies requires us to determine that the cost of
lesions.14 In the first study for a case- submitted to CMS are normal for a new the device is not insignificant, as
control series, 19 patients undergoing and innovative technology, noting that described in § 419.66(d). Section
treatment using SIS–TACE had a the studies are methodologically 419.66(d) includes three cost
statistically significant improvement in rigorous and show statistically significance criteria that must each be
disease response rate compared to 19 significant differentiation from met. The applicant provided the
patients treated with end-hole comparators. The manufacturer also following information in support of the
microcatheters, 78.9 percent compared noted that overall survival is not an cost significance requirements. The
to 36.8 percent for initial overall appropriate endpoint for hepatocellular applicant stated that the Surefire®
carcinoma. They cited National SparkTM Infusion System would be
response rate (p = 0.008).15 In the
Comprehensive Cancer Network (NCCN) reported with CPT code 37243, which is
second study, a multi-center registry of
guidelines, noting that tumor necrosis assigned to APC 5193 (Level 3
72 patients demonstrated high response
and pathologic response are primary Endovascular Procedures). To meet the
rate when compared to historical
predictors of success in these cases and cost criterion for device pass-through
control at 6 months follow-up.16
locoregional therapy should be viewed payment status, a device must pass all
13 Pasciak AS, McElmurray JH, Bourgeois AC, as a way to transition patients to three tests of the cost criterion for at
Heidel RE, Bradley YC. Impact of an antireflux transplant or resection. The least one APC. For our calculations, we
catheter on target volume particulate distribution in
manufacturer also suggested that CMS used APC 5193, which has a CY 2019
liver-directed embolotherapy: a pilot study. J Vasc payment rate of $9,669.04. Beginning in
Interv Radiol. 2015 May;26(5):660–9. should consider that clinical
14 Kim AY, Frantz S, Krishnan P, DeMulder D, improvements vary based on the CY 2017, we calculated the device offset
Caridi T, Lynskey GE, et al. (2017) Short-term therapeutic agent being delivered by the amount at the HCPCS/CPT code level
imaging response after drug-eluting embolic trans- SparkTM Infusion System and that these instead of the APC level (81 FR 79657).
arterial chemoembolization delivered with the CPT code 37243 had a device offset
Surefire Infusion System® for the treatment of agents are approved on a variety of
amount of $3,894.69 at the time the
hepatocellular carcinoma. PloS one 12.9 (2017): endpoints.
e0183861. Response: We appreciate the response application was received. According to
15 N Apseloff, J Keung, T Caridi, D Buckley, G
to the questions we had regarding the applicant, the cost of the Surefire®
Lynskey, A Kim. Case-control evaluation of endhole
SparkTM Infusion System. After SparkTM Infusion System is $7,750.
microcatheter versus Surefire Infusion System for Section 419.66(d)(1), the first cost
use during transarterial chemoembolization for reviewing the information provided in
significance requirement, provides that
hepatocellular carcinoma. Conference abstract the public comment, we agree that
presented at 2017 Society of Intervention Radiology the estimated average reasonable cost of
while the opportunity for large-scale
Annual Congress, March 8, 2017. devices in the category must exceed 25
studies with long-term follow-up is
16 Kapoor B, Contreras F, Katz M, Arepally A, percent of the applicable APC payment
Fischman A, Rose S, Kim A, Ferraro J. Surefire limited for a new technology, the
amount for the service related to the
Infusion System (SIS) hepatocellular carcinoma
registry study interim results: A multicenter study Conference abstract presented at 2018 Society of
category of devices. The estimated
of the safety, feasibility, and outcomes of the SIS Intervention Radiology Annual Congress, March 19, average reasonable cost of $7,750 for the
expandable-tip microcatheter in DEB–TACE. 2017. Surefire® SparkTM Infusion System is
80.2 percent of the applicable APC Infusion System for device pass-through application for TracPatch that was
payment amount for the service related payment status beginning in CY 2020. received in March 2019. We invited
to the category of devices of $9,669.04 public comments on whether the
(2) TracPatch
($7,750/$9,669.04 × 100 = 80.2 percent). TracPatch is exempt from FDA
Therefore, we believe the Surefire® According to the applicant, TracPatch clearance and if the TracPatch meets the
SparkTM Infusion System meets the first is a wearable device that utilizes an newness criterion.
cost significance requirement. accelerometer, temperature sensor and Comment: One commenter, the
The second cost significance step counter to allow the surgeon and manufacturer, stated that they had
requirement, at § 419.66(d)(2), provides patient to monitor recovery and help registered TracPatch as a Class I Exempt
that the estimated average reasonable ensure critical milestones are being met. goniometer with FDA which was listed
cost of the devices in the category must The applicant states that TracPatch on the Global Unique Device
exceed the cost of the device-related utilizes wearable monitoring technology Identification Database (GUDID) as of
portion of the APC payment amount for and methods in an effort to enhance the August 28, 2019.
the related service by at least 25 percent, rehabilitation experience for both Response: We thank the manufacturer
which means that the device cost needs patients and physicians. Accelerometers for clarifying that TracPatch is now
to be at least 125 percent of the offset are utilized to recognize and record the registered with FDA as a Class I Exempt
amount (the device-related portion of results when patients perform standard goniometer as of August 28, 2019.
the APC found on the offset list). The physical therapy exercises, in addition After consideration of the public
estimated average reasonable cost of to providing standard step count and comments, we have determined that
$7,750 for the Surefire® SparkTM high-acceleration events that may TracPatch meets the newness criterion.
Infusion System exceeds the cost of the indicate a fall. A temperature sensor With respect to the eligibility criterion
device-related portion of the APC monitors the skin temperature near the at § 419.66(b)(3), the applicant claimed
payment amount for the related service joint. that the TracPatch is an integral part of
of $3,894.69 by 199 percent TracPatch is described by the monitoring the range of motion for a
($7,750¥$3,894.69) × 100 = 198.99 applicant as a 24/7 remote monitoring knee prior to and after total knee
percent). Therefore, we believe that the wearable device that captures a patient’s arthroplasty, is used for one patient
Surefire® SparkTM Infusion System key daily activities: such as range of only, and is placed on the skin above
meets the second cost significance motion progress, exercise compliance, and below the knee and secured by
requirement. and ambulation. TracPatch is used for Velcro strips. The applicant stated that
The third cost significance pre- and post-operative patient the device is not surgically implanted or
requirement, at § 419.66(d)(3), provides monitoring, patient engagement, data inserted into the patient and is not
that the difference between the analytics and post-op cost reduction. applied in or on a wound or other skin
estimated average reasonable cost of the According to the applicant, the lesion. We stated concerns in the
devices in the category and the portion wearable devices stick on the skin above proposed rule with TracPatch’s
of the APC payment amount for the and below the knee. The wearables are eligibility with respect to the criterion at
device must exceed 10 percent of the applied before total knee surgery to § 419.66(b)(3) because to be eligible for
APC payment amount for the related determine a patient’s baseline activity pass-through payment a device must be
service. The difference between the levels, and then again after surgery to surgically implanted or inserted into the
estimated average reasonable cost of allow the patient and surgeon to patient or applied in a wound or on
$7,750 for the SparkTM Infusion System monitor activity, pain, range of motion other skin lesions. In addition, the
and the portion of the APC payment and physical therapy. The use of the applicant stated that the TracPatch
amount for the device of $3,894.69 Bluetooth connectivity allows the meets the device eligibility
exceeds the APC payment amount for device to be paired with any requirements of § 419.66(b)(4) because it
the related service of $9,669.04 by 40 smartphone and the TracPatch cloud is not an instrument, apparatus,
percent (($7,750¥$3,894.69)/$9,669.04) allows for unlimited data collection and implement, or item for which
× 100 = 39.87 percent). Therefore, we storage. The applicant states that depreciation and financing expenses are
believe that the Surefire® SparkTM TracPatch includes a web dashboard recovered. We determined that
Infusion System meets the third cost and computer application, which permit TracPatch was not a material or supply
significance requirement. a health care provider to monitor a furnished incident to a service. We
We invited public comments on patient’s recovery in real-time, allowing invited public comments on whether
whether the Surefire® SparkTM Infusion for immediate care adjustments and the the TracPatch meets the eligibility
System meets the device pass-through ability for providers and patients to criterion.
payment criteria discussed in this respond to issues that may occur during Comment: One commenter, the
section, including the cost criterion. recovery from surgery. manufacturer, provided more
Comment: The manufacturer of the With respect to the newness criterion information on whether TracPatch
Surefire® SparkTM Infusion System at § 419.66(b)(1), the applicant stated meets the eligibility criterion. The
believed that the device meets the cost that TracPatch does not need FDA manufacturer states that the device is
criterion for device pass-through clearance because it is a Class I device adhered to a patient’s skin using a
payment status. that would be assigned to a generic medical adhesive patch and not Velcro
Response: We appreciate the category of devices described in 21 CFR strips and that the device is placed near
manufacturer’s input. After parts 862 through 892 that is exempt a wound (which we assume is the
consideration of the public comments from FDA premarket notification. incision for the associated knee surgery)
we received, we believe that Surefire® However, the applicant did not identify in a sterile setting. The placement of the
SparkTM Infusion System meets the cost which category of exempted devices device near the wound allows real time
criterion for device pass-through that TracPatch would be assigned. The monitoring of changes to the wound and
payment status. applicant also stated that TracPatch will complications and abnormalities that
After consideration of the public be introduced into the market in 2019, may arise. Also the device placement is
comments we received, we are which would be within 3 years of the important to perform measurements
approving the Surefire® SparkTM device pass-through payment related to the knee’s range of motion.
Response: The commenter did not insertion of the bipolar electrical lead VNS Therapy® System for TRD. This
state or provide evidence either in its which entails wrapping two spiral NCD remained in effect until February
device pass-through application or in its electrodes around the cervical portion of 15, 2019, when CMS determined that
comment on the CY 2020 OPPS/ASC the left vagus nerve within the carotid the VNS Therapy® for TRD could
proposed rule, that the TracPatch device sheath. receive payment if the service was
is surgically implanted or inserted into According to the applicant, following performed in CMS-approved coverage
a patient or is applied in a wound or on implant and recovery, the physician with evidence development (CED)
other skin lesions. In fact, the programs the pulse generator to studies. Although the VNS Therapy®
description of the Class I Exempt intermittently stimulate the vagus nerve System for TRD was introduced to the
goniometer on the FDA product at a level that balances efficacy and market in September 2005, Medicare
classification web page states that the patient tolerability. The pulse generator has only covered it for slightly more
goniometer is not an implantable delivers electrical stimulation via the than 11⁄2 years. However, § 419.66(b)(1)
device. To be considered for device bipolar electrical lead to the cervical states that a pass-through payment
pass-through payment, a device must portion of the left vagus nerve within application for a device must be
meet this part of the eligibility criterion. the carotid sheath thereby relaying received within 3 years of when the
After consideration of all of the information to the brain stem device either received FDA approval or
information we have received, we have modulating structures relevant to was introduced to the market. The
determined that TracPatch is not depression. Stimulation typically applicant stated that the VNS Therapy®
surgically implanted or inserted into a consists of a 30-second period of ‘‘on System for TRD was introduced to the
patient or applied in a wound or on time,’’ during which the device market in September 2005, which
other skin lesions, and the product thus stimulates at a fixed level of output means the device pass-through payment
does not meet the eligibility criterion for current, followed by a 5-minute ‘‘off application would have needed to have
device pass-through payment status. time’’ period of no stimulation. been submitted to CMS by September
Because we have determined that The applicant states that a hand-held 2008. However, the pass-through
TracPatch does not meet the basic programmer is utilized to program the application for the device was not
eligibility criterion for transitional pass- pulse generator stimulation parameters, received by CMS until March 2019.
through payment status, we have not including the current charge, pulse In addition, it appeared that the
evaluated this product to determine width, pulse frequency, and the on/off neurostimulator device for the VNS
whether it meets the other criteria stimulus time, which is also known as Therapy® System for TRD is the same
required for transitional pass-through the on/off duty cycle. Initial settings can device that has been used since 1997 to
payment for devices; that is the be adjusted to enhance the tolerability treat epilepsy.17 The applicant stated
substantial clinical improvement of the device as well as its clinical the following three differences between
criterion, and the cost criterion. effects on the patient. The generator the two devices: (1) How the device is
Comment: Multiple commenters, runs continuously, but patients can programmed to treat epilepsy versus
including physicians and patients, temporarily turn off the device by TRD; (2) how the external magnets of
described the benefits of TracPatch and holding a magnet over it. The generator the device are used for epilepsy
how it helped either them or their can also be turned on and off by the treatment as compared to TRD
patients with their recoveries from knee programmer. treatment; and (3) that the battery life of
surgery. The applicant states that the VNS the device to treat epilepsy is different
Response: We appreciate the Therapy® System provides indirect than the battery life of the device when
comments we received about the modulation of brain activity through the treating TRD. However, it was not clear
benefits of TracPatch. However, we did stimulation of the vagus nerve. The that these differences demonstrate that
not evaluate substantial clinical vagus nerve, the tenth cranial nerve, has the actual device used to treat TRD is
improvement for TracPatch because it parasympathetic outflow that regulates any different than the device used to
did not meet the eligibility criterion. the autonomic (that is, involuntary) treat epilepsy.
After consideration of the public functions of heart rate and gastric acid Based on the information presented,
comments we received, we are not secretion, and also includes the primary we invited public comments on whether
approving device pass-through payment functions of sensation from the pharynx, the VNS Therapy® System for TRD
status for TracPatch for CY 2020. muscles of the vocal cords and meets the newness criterion.
swallowing. It is a nerve that carries Comment: One commenter, the
(3) Vagus Nerve Stimulation (VNS) both sensory and motor information to
Therapy® System for Treatment manufacturer, made additional
and from the brain. Importantly, the arguments for why the VNS Therapy®
Resistant Depression (TRD) vagus nerve has influence over System for TRD meets the newness
LivaNova USA Inc. submitted an widespread brain areas and it is criterion. The manufacturer stated that
application for the Vagus Nerve believed that electrical stimulation of there were 22 months between the FDA
Stimulation (VNS) Therapy® System for the vagus nerve alters various networks approval of the associated procedure to
Treatment Resistant Depression (TRD). of the brain in order to treat psychiatric treat TRD in July 2005 and CMS’
According to the applicant, the VNS disease. issuance of the national determination
Therapy® System consists of two With respect to the newness criterion of non-coverage on May 4, 2007. The
implantable components: A at § 419.66(b)(1), the applicant received manufacturer asserts that during those
programmable electronic pulse FDA clearance for the VNS Therapy® 22 months the VNS Therapy® System
generator and a bipolar electrical lead System for TRD through the premarket for TRD was ‘‘realistically not available’’
that is connected to the programmable approval (PMA) process on July 15, because of concerns about covering the
electronic pulse generator. The 2005, and the VNS Therapy® for TRD TRD treatment procedure during the
applicant stated that the surgical device was introduced to the market in period between FDA approval and the
procedure to implant the VNS Therapy® September 2005. However, on May 4, national determination of non-coverage.
System involves subcutaneous 2007, a national coverage determination
implanting of the pulse generator in the (NCD 160.18) was released prohibiting 17 Current Behavioral Neuroscience Reports. 2014
intraclavicular region as well as Medicare from covering the use of the Jun; 1(2): 64–73.
In another part of the manufacturer’s the newness criterion consistent with the device eligibility requirements of
comment, they state that the uncertainty what it believed was our intent in the § 419.66(b)(4) because it is not an
of coverage for the TRD treatment CY 2016 OPPS final rule (80 FR 70418 instrument, apparatus, implement, or
procedure meant that the treatment was through 70420) implied that, for a item for which depreciation and
not available to patients during the July device to meet the newness standard, it financing expenses are recovered. We
2005 to May 2007 time period. had to be available in the market for less determined that the VNS Therapy® for
The manufacturer believes the most than three years and that the availability TRD was not a material or supply
equitable reading of the rule that is period would be suspended if the furnished incident to a service. We
consistent with the intent of the device was unavailable in the market invited public comments on whether
criterion when it was established in the due to national non-coverage. This the VNS Therapy® for TRD meets the
CY 2016 OPPS final rule (80 FR 70418 comment does not align with the eligibility criterion.
through 70420) is that the 3-year period language of § 419.66(b)(1), which states Comment: One commenter, the
for newness from when the VNS that the application for device pass- manufacturer, claimed that the VNS
Therapy® System for TRD was through payment must be received Therapy® for TRD device meets the
introduced into the market in July 2015 within 3 years from the date of market basic eligibility criteria for pass-through
should have been held in suspension availability and makes no exception for status. The device is an integral part of
from May 4, 2007 when the original periods of national non-coverage. As we the service provided which is the
national determination of non-coverage stated in the proposed rule, based on adjunctive treatment of TRD. The device
by CMS until the subsequent national information provided in the original is used by one patient, comes in contact
determination allowing coverage of the device pass-through application, the with human tissue and is surgically
VNS Therapy® System for TRD with device pass-through application had to implanted. The manufacturer also
coverage with evidence development be submitted by September 2008 to meet asserts that the device is not an
(CED) was released on February 15, the newness requirement. instrument, apparatus, implement, or
2019. Comment: One commenter stated that item for which depreciation and
The manufacturer cites CMS it did not believe that the VNS financing expenses are recovered. The
statements from the CY 2016 OPPS final Therapy® System for TRD meets the manufacturer states that the device is
rule supporting this reading, including newness criterion for device pass- not a material or supply furnished
that device pass-through payment is for through payment. The commenter states incident to a service.
devices that are truly new and do not that while there have been technical Response: We appreciate the
have sufficient claims data for CMS to improvements with the VNS Therapy® additional comments from the
analyze, and that market availability for System for TRD, the commenter believes manufacturer. After consideration of all
a device could be considered to be after these are typical upgrades of an existing of the information we have received, we
its FDA approval or clearance date technology and not evidence of a new have determined that the VNS Therapy®
where there is a national coverage device. System for TRD does meet the device
determination of non-coverage of the Response: We appreciate the feedback eligibility criterion as described by
device within the Medicare population. from the commenter, including their § 419.66(b)(4).
The manufacturer asserts that the reason concern that the differences cited by the The criteria for establishing new
that the newness criterion does not manufacturer between the device categories are specified at
address the market availability situation neurostimulator VNS device to treat § 419.66(c). The first criterion, at
faced by the VNS Therapy® System for epilepsy and the neurostimulator VNS § 419.66(c)(1), provides that CMS
TRD is that CMS simply did not device to treat TRD are not substantial determines that a device to be included
envision that such a situation would enough to establish the VNS Therapy® in the category is not appropriately
occur. The manufacturer asserts that the System for TRD neurostimulator device described by any existing categories or
VNS Therapy® System for TRD as a new device that meets the newness by any category previously in effect, and
neurostimulator device has not been criterion. A device also will fail the was not being paid for as an outpatient
available in the market for 3 full years, newness criterion if, as noted above, it service as of December 31, 1996. With
and therefore still meets the newness is on the market more than three years, respect to the existence of a previous
criterion. based either on its FDA clearance or pass-through device category that
Response: We disagree with the approval date or the date of U.S. market describes the device used for the VNS
commenter’s conclusion. The availability. Therapy® System for TRD, the applicant
manufacturer did not provide evidence After consideration of all of the suggested a category descriptor of
to establish that the neurostimulator information we have received, we have ‘‘Generator, neurostimulator
device for the VNS Therapy® System for determined that the VNS Therapy® (implantable), treatment resistant
TRD was not similar to the System for TRD does not meet the depression, non-rechargeable.’’
neurostimulator device that has been newness criterion. However, the device category
used since 1997 to treat epilepsy. With With respect to the eligibility criterion represented by HCPCS code C1767 is
no evidence to the contrary, it appears at § 419.66(b)(3), the applicant claimed described as ‘‘Generator,
the neurostimulator device for the VNS that the VNS Therapy® System for TRD neurostimulator (implantable), non-
Therapy® System for TRD has been on is an integral part of a procedure to rechargeable,’’ which appears to
the market continuously since 1997 and provide adjunctive treatment of chronic encompass the device category
therefore fails the newness criterion. or recurrent depression in adult patients descriptor for the VNS Therapy® System
However, even if we were to assume that have failed four or more for TRD suggested by the applicant. The
the neurostimulator device for the VNS antidepressant treatments. The VNS applicant asserts that the device
Therapy® System for TRD was a new Therapy® System for TRD is used for category descriptor for HCPCS code
device upon FDA approval for the TRD one patient only, comes in contact with C1767 is overly broad and noted the
treatment procedure in July 2005, the human tissue, and is surgically establishment of HCPCS code C1823
device would still not meet the newness implanted or inserted into the patient. (Generator, neurostimulator
criterion. The manufacturer’s comment In addition, the applicant stated that the (implantable), nonrechargeable, with
about suggesting an equitable reading of VNS Therapy® System for TRD meets transvenous sensing and stimulation
leads), effective January 1, 2019, as an the requirements of § 419.66(c)(1) and a Category B–3 Investigational Device
example of where a new device category the device category eligibility criterion. Exemption (IDE) from FDA on April 6,
for a nonrechargeable neurostimulation Because we have determined that the 2017. Subsequently, the applicant
system to treat central sleep apnea was VNS Therapy® System for TRD does not received its premarket approval (PMA)
carved out from the broad category meet either the newness criterion or the application from FDA on March 21,
described by HCPCS code C1767. device category eligibility criterion for 2019. We received the application for a
The applicant believes its proposed transitional pass-through payment new device category for transitional
category for the device for the VNS status, we have not evaluated this pass-through payment status for the
Therapy® System for TRD should device to determine whether it meets Optimizer® System on February 26,
similarly qualify as a new category. the other criteria required for 2019, which is within 3 years of the date
However, HCPCS code C1823 was transitional pass-through payment for of the initial FDA approval or clearance.
established due to specific device devices; namely, the substantial clinical We invited public comments on
features which distinguish that device improvement criterion and the cost whether the Optimizer® System meets
category from HCPCS code C1767. The criterion. the newness criterion.
applicant for the VNS Therapy® System Comment: A commenter supported Comment: The manufacturer believes
for TRD requested a new device giving pass-through status for the VNS that the Optimizer® System meets the
category based on a beneficiary’s Therapy® System for TRD because the newness criterion.
diagnosis, but OPPS does not commenter believes the clinical benefits Response: We appreciate the
differentiate payment by diagnosis. of the VNS Therapy® System for TRD commenter’s input. After consideration
Comment: The applicant asserts that have been demonstrated by the studies of the public comment we received, we
the VNS Therapy® for TRD device is not submitted for the recent national believe that the Optimizer® System
described by any of the existing device coverage determination that established meets the newness criterion.
categories in the OPPS and that the coverage with evidence development for With respect to the eligibility criterion
associated service was not paid as an the procedure. at § 419.66(b)(3), according to the
outpatient service as of December 31, Response: We appreciate the applicant, the Optimizer® System is
1996. comment in support of the clinical integral to the CCM therapy service
Response: We do not agree with the benefits of the VNS Therapy® System provided, is used for one patient only,
applicant’s assertion. We believe the for TRD. However, we did not evaluate comes in contact with human skin, and
VNS Therapy® for TRD device is substantial clinical improvement for the is applied in or on a wound or other
described by existing HCPCS code VNS Therapy® System for TRD because skin lesion. The applicant also stated
C1767 (Generator, neurostimulator this device does not meet the newness that the Optimizer® System meets the
(implantable), non-rechargeable) and criterion or the device category device eligibility requirements of
does not meet the criterion that is eligibility criterion. § 419.66(b)(4) because it is not an
described by § 419.66(c)(1) because the After consideration of the public instrument, apparatus, implement, or
device is described by an existing comments we received, we are not items for which depreciation and
device category. As stated in the approving VNS Therapy® System for financing expenses are recovered, and it
proposed rule, OPPS does not TRD device pass-through payment is not a supply or material furnished
differentiate payment by diagnosis and status for CY 2020. incident to a service.
therefore cannot establish new device We did not receive any public
categories based solely on a previously (4) Optimizer® System
comments regarding whether
described device being used to treat a Impulse Dynamics submitted an Optimizer® System meets the eligibility
new indication. In the original pass- application for a new device category criterion. Based on the information we
through application, the applicant cited for transitional pass-through payment have received, we have determined that
the example of the establishment of a status for the Optimizer® System. Optimizer® System meets the eligibility
new category code, HCPCS code C1823 According to the applicant, the criterion.
(Generator, neurostimulator Optimizer® System is an implantable The criteria for establishing new
(implantable), nonrechargeable, with device that delivers Cardiac device categories are specified at
transvenous sensing and stimulation Contractility Modulation (CCM) therapy § 419.66(c). The first criterion, at
leads), for the remede system even for the treatment of patients with § 419.66(c)(1), provides that CMS
though that device is a non-rechargeable moderate to severe chronic heart failure. determines that a device to be included
neurostimulator and initially appeared CCM therapy is intended to treat in the category is not appropriately
to be covered by HCPCS code C1767, patients with persistent symptomatic described by any of the existing
like the VNS Therapy® for TRD device. heart failure despite receiving guideline categories or by any category previously
However, as we stated in the proposed directed medical therapy (GDMT). The in effect, and was not being paid for as
rule, HCPCS code C1823 was applicant stated that the Optimizer an outpatient service as of December 31,
established due to specific device System consists of the Optimizer 1996. For the proposed rule, we had not
features that distinguish that device Implantable Pulse Generator (IPG), identified an existing pass-through
category from HCPCS code C1767. The Optimizer Mini Charger, and Omni II payment category that describes the
applicant has not identified any device Programmer with Omni Smart Software. Optimizer® System.
features of the VNS Therapy® for TRD Lastly, the applicant stated that the Comment: The manufacturer of the
device that distinguish it from the Optimizer® System delivers CCM Optimizer® System indicated that there
category described by HCPCS code signals to the myocardium. CCM signals is not an existing pass-through payment
C1767. are nonexcitatory electrical signals category that describes the device.
After consideration of all of the applied during the cardiac absolute Response: We appreciate the
information we have received, we have refractory period that, over time, commenter’s input. After consideration
determined that the VNS Therapy® enhance the strength of cardiac muscle of the public comment we received, we
System for TRD is described by either contraction. believe that the Optimizer® System
an existing category or by a category With respect to the newness criterion meets the device category eligibility
previously in effect and does not meets at § 419.66(b)(1), the applicant received criterion.
The second criterion for establishing therapy.19 The secondary endpoint of A study was conducted with 68
a device category, at § 419.66(c)(2), quality of life, measured by Minnesota consecutive heart failure patients with
provides that CMS determines that a Living with Heart Failure Questionnaire NYHA Class II or III symptoms, QRS
device to be included in the category (MLWHFQ) (p<0.001), 6-minute hall duration ≤130 ms, and who had been
has demonstrated that it will walk test (p = 0.02), and an NYHA implanted with a CCM device between
substantially improve the diagnosis or function class assessment (p<0.001) May 2002 and July 2013 in Germany.
treatment of an illness or injury or were better in the treatment group Based upon pre-implant SHFM survival
improve the functioning of a malformed versus control group. The secondary rates, 4.5 years mean follow-up, and an
body part compared to the benefits of a endpoint of heart failure-related average patient age of 61 years old, the
device or devices in a previously hospitalizations was lowered from 10.8 study found lower mortality rates for
established category or other available percent to 2.9 percent (p = 0.048). The CCM therapy group with 0 percent at 1
treatment. The applicant stated that the applicant also reported a registry study year, 3.5 percent at 2 years, and 14.2
use of CCM significantly improves of 140 patients with a left ventricular percent at 5 years, compared to 6.1
clinical outcomes for a patient ejection fraction from 25–45 percent percent, 11.8 percent, and 27.7 percent
population compared to currently receiving CCM therapy with a primary predicted by SHFM, respectively
available treatments. With respect to endpoint of comparing observed (p = 0.007).22 In a study on long-term
this criterion, the applicant submitted survival to Seattle Heart Failure Model outcomes, 41 consecutive heart failure
studies that examined the impact of (SHFM) predicted survival over 3 years patients with left ventricular ejection
CCM on quality of life, exercise of follow-up. All patients implanted fraction (EF) < 40 percent receiving
tolerance, hospitalizations, and with the Optimizer® System at CCM therapy were compared to a
mortality. participating centers were offered control group of 41 similar heart failure
The applicant noted that the use of participation and 72 percent of patients patients and primarily evaluated for all-
the Optimizer® System significantly agreed to enroll in the registry. There cause mortality, as well as heart failure
improves clinical outcomes for patients were improvements in quality of life hospitalization, cardiovascular death,
with moderate-to-severe chronic heart markers (MLWHFQ) and a 75-percent and a death and heart failure
failure, and specifically improves reduction in heart failure hospitalization composite. After 6 years
exercise tolerance, quality of life, and hospitalizations (p<0.0001). Survival at of follow-up, the results showed that all-
functional status of patients that are 3 years was similar between the two cause mortality was lower for the CCM
otherwise underserved. The applicant study arms with CCM at 82.8 percent group as compared to the control group
claims that the Optimizer® System [73.4 percent-89.1 percent] and SHFM at (39 percent versus 71 percent
fulfills an unmet need because there is 76.7 percent (p = 0.16). However, for respectively, p = 0.001), especially
currently no therapeutic medical device patients with a left ventricular ejection among patients with EF ≥ 25–40 percent
therapies available for the 70 percent of fraction from 35–45 percent receiving with 36 percent for the CCM group
heart failure patients who have New CCM therapy, the 3-year mortality for versus 80 percent for the control group
York Heart Association (NYHA) Class III CCM therapy was significantly better (p <0.001). Although heart failure
heart failure, normal QRS duration and than predicted with 88 percent for CCM hospitalization was similar between the
reduced ejection fraction (EF). FDA compared to 74.7 percent for SHFM treatment and control cohorts, there was
approved the Optimizer® System for (p = 0.0463).20 The applicant presented a a significantly lower heart failure
NYHA Class III heart failure patients randomized, double blind, crossover hospitalization rate for CCM patients
who remain symptomatic despite study of CCM signals with 164 patients with EF ≥ 25–40 percent (36 percent
guideline directed medical therapy, who with EF ≤35 percent and NYHA Class II versus 64 percent respectively,
are in normal sinus rhythm, are not (24 percent) or III (76 percent) p = 0.005).23 The applicant also
indicated for Cardiac Resynchronization symptoms who received a CCM pulse presented additional studies 24 25 that
Therapy, and have a left ventricular generator. After the 6-month treatment presented similar conclusions to the
ejection fraction ranging from 25 period, results indicated statistically studies discussed above, noting that
percent to 45 percent.18 significantly improved peak VO2 and CCM therapy provided improvements in
The applicant presented several MLWHFQ (p = 0.03 for each parameter), quality of life, exercise capacity, NYHA
studies to support these claims. concluding that CCM signals appear to class, and mortality rates.
According to the applicant, the results be safe for patients and that exercise
of a randomized clinical study in which tolerance and quality of life were electrical impulses for symptomatic heart failure.
patients with NYHA functional Class III, Eur Heart J. 2008;29:1019–28.
significantly better while patients were 22 Kloppe A, Lawo T, Mijic D, et al. Long-term
ambulatory Class IV heart failure receiving active CCM treatment.21 survival with Cardiac Contractility Modulation in
despite OMT, an EF from 25–45 percent, patients with NYHA II or III symptoms and normal
or a normal sinus rhythm with QRS 19 Abraham, W. T., Kuck, K. H., Goldsmith, R. L., QRS duration. Int J Cardiol. 2016 Apr 15;209:291–
duration <130ms (n = 160) were Lindenfeld, J., Reddy, V. Y., Carson, P. E., . & 5.
randomized to continued medical Wiegn, P. (2018). A randomized controlled trial to 23 Liu M, Fang F, Luo XX, Shlomo BH, Burkhoff
evaluate the safety and efficacy of cardiac D, Chan JY, Chan CP, Cheung L, Rousso B,
therapy (n = 86) or CCM with the contractility modulation. JACC: Heart Failure, 6(10), Gutterman D, Yu CM. Improvement of long-term
Optimizer® System (n = 74) for 24 weeks 874–883. survival by cardiac contractility modulation in
showed a statistically significant 20 Anker, S. D., Borggrefe, M., Neuser, H., Ohlow, heart failure patients: A case-control study. Int J
improvement in the primary endpoint of M. A., Röger, S., Goette, A., . & Rousso, B. Cardiac Cardiol. 2016 Mar 1;206:122–6.
contractility modulation improves long-term 24 Müller D, Remppis A, Schauerte P, et al.
peak oxygen consumption survival and hospitalizations in heart failure with Clinical effects of long-term cardiac contractility
(pVO2 = 0.84, 95 percent Bayesian reduced ejection fraction. Eur J Heart Fail .2019 Jan modulation (CCM) in subjects with heart failure
credible interval 0.123 to 1.52) 16. doi: 10.1002/ejhf.1374. [Epub ahead of print] caused by left ventricular systolic dysfunction. Clin
compared with the patients who were 21 Borggrefe MM, Lawo T, Butter C, Schmidinger Res. Cardiol. 2017 Nov 1;106(11):893–904.
randomized to continued medical H, Lunati M, Pieske B, Misier AR, Curnis A, Bocker 25 Kuschyk J, Roeger S, Schneider R, et al.
D, Remppis A, Kautzner J, Stuhlinger M, Leclerq C, Efficacy and survival in patients with cardiac
Taborsky M, Frigerio M, Parides M, Burkhoff D and contractility modulation: Long-term single center
18 https://www.accessdata.fda.gov/cdrh_docs/ Hindricks G. Randomized, double blind study of experience in 81 patients. Int J Cardiol.
pdf18/P180036B.pdf. non-excitatory, cardiac contractility modulation 2015;183C:76–81.
We noted several concerns with the researchers knew they were receiving tailored for gathering the required
studies presented by the applicant. One CCM therapy. This is a limitation evidence to support FDA approval of
concern regarding the evidence for the because observed outcomes may be novel technology. Regarding the
Optimizer® System involves the mixed impacted by the placebo effect. concern about the lack of randomization
mortality outcomes presented. Three Although most studies matched and blinding in studies presented, the
studies showed significantly lower participants for similar demographics, manufacturer noted that four out of the
mortality rates with the use of CCM there could be systematic differences six studies were randomized, and two of
compared to controls or predicted and unmeasured bias between the two the four were also blinded with both the
mortality. Each of these studies focused groups beyond the similarities control and the treatment group
on slightly different mortality outcomes, addressed in the study that could affect receiving the device.
including all-cause mortality, a outcomes. The lack of randomization Response: We appreciate the response
composite of death and heart failure may have implications for the strength to the questions we had regarding
hospitalization, and cardiac mortality of the studies’ conclusions. Optimizer® System. After reviewing the
rates from 1 to 5 years. Two studies Based upon the evidence presented, additional information provided during
show mixed results. For the first, 3-year we invited public comments on whether the public comment period, we agree
survival was not significant for the the Optimizer® System meets the that, for patients with NYHA Class III
overall population, despite a substantial clinical improvement heart failure patients who remain
significantly higher survival rate found criterion. symptomatic despite guideline directed
in a subpopulation. For the second, Comment: The manufacturer medical therapy, who are in normal
mortality rates were significant responded to several statements sinus rhythm, are not indicated for
compared to predictions at 1 year, but regarding Optimizer® System and Cardiac Resynchronization Therapy,
not 3 years. The final study did not substantial clinical improvement in the and have a left ventricular ejection
report significance in its overall survival CY 2020 OPPS/ASC proposed rule, and fraction ranging from 25 percent to 45
at 2 years. Although the studies and asserted that Optimizer® System meets percent, Optimizer® System is a
trials presented show improvements in the substantial clinical improvement substantial clinical improvement over
mortality when evaluating CCM therapy criterion. The manufacturer noted that a existing treatment options for this
with comparators, the studies have mortality benefit cannot be claimed population. The provided studies
small sample sizes and limited based on currently published data but support improvements in functional
timeframes for measuring survival. that the Optimizer® System does not status, quality of life, and exercise
Additionally, three studies compared appear to have a negative impact on tolerance, all of which are relevant
observed mortality rates to statistically mortality. The manufacturer outcomes in this population. While the
projected mortality rates. In the two acknowledged that male patients and studies describe improved survival in a
studies with observed mortality rates, those that identify as white were subset of patients and substantially
the overall improvement in mortality prevalent in the Optimizer System reduced hospitalizations, the numbers
was not significant, despite some studies but contended that for clinical are small, the observation period is
significance found in subanalyses. trials in general, and for heart failure short, and the data on readmissions are
These issues raise concerns about the specifically, these groups are typically not specifically highlighted. However,
strength of the conclusions related to over-represented. They presented we accept the manufacturer’s note that
the use of CCM therapy improving several examples of cardiac device and while mortality benefit cannot be
patient outcomes. pharmaceutical clinical trials for the claimed based on currently published
Another concern with the studies treatment of heart failure, where a data, the Optimizer® System does not
presented for the Optimizer® System is similar mix of patients in terms of appear to have a negative impact on
that the included study population may gender and race existed across unrelated mortality.
not be necessarily representative of the trials and therapies. In response to the Accordingly, we have determined that
Medicare beneficiary population. concern that the average age of patients the Optimizer® System has
Several studies had a predominantly for several studies was under 65 years demonstrated substantial clinical
white, male patient population, which old, limiting the application of the study improvement relative to existing
could make generalization of study results to the Medicare population, the treatment options for patients diagnosed
results to a more diverse Medicare manufacturer conducted additional with moderate to severe chronic heart
population difficult. Additionally, the analyses on patients aged 65 and older. failure. As the Optimizer® System
average age of patients for several The analysis showed that the two received a Breakthrough Device
studies was under 65 years old, which populations were not dissimilar, and the designation from FDA, it meets the
may also be a limitation in applying manufacturer believes the clinical trial substantial clinical improvement
these study results to the Medicare results are applicable to the Medicare criterion under this alternative pathway
population. patient population. as well.
Overall, we were concerned that there The manufacturer presented data to The third criterion for establishing a
was a lack of evidence from large trials demonstrate that the Optimizer® System device category, at § 419.66(c)(3),
for the CCM therapy provided by the delivers substantial clinical requires us to determine that the cost of
Optimizer® System. The studies improvement in terms of improved the device is not insignificant, as
presented had sample sizes fewer than functional status, quality of life, and described in § 419.66(d). Section
500 patients. Other limitations include exercise tolerance. In response to the 419.66(d) includes three cost
the potential placebo effects and concern regarding clinical trials significance criteria that must each be
selection bias that may have impacted enrolling sample sizes fewer than 500 met. The applicant provided the
study results. Only two studies patients, the manufacturer noted that following information in support of the
presented were randomized and only there were 638 subjects enrolled and cost significance requirements. The
one of those two was a double-blinded implanted with the Optimizer System in applicant stated that the Optimizer®
study. For the remaining studies, no the U.S. randomized trials and that System would be reported with CPT
blinding occurred to minimize potential trials of this size are common in Class codes 0408T, 0409T, 0410T, 0411T,
biases, which indicates that patients and III medical device trials, which are 0412T, 0413T, 0414T, 0415T, 0416T,
0417T, and 0418T. The associated APCs APC payment amount for the related applicant, the AquaBeam® system
are APC 5231 (Level 1 ICD and Similar service of $7,404.11 by 181 percent resects the prostate to relieve symptoms
Procedures) and APC 5222 (Level 2 (($15,700 ¥ $2,295.27)/$7,404.11) × 100 of urethral compression. The resection
Pacemaker and Similar Procedures). To = 181 percent). Therefore, we believe is performed robotically using a high
meet the cost criterion for device pass- that the Optimizer® System meets the velocity, nonheated sterile saline water
through payment status, a device must third cost significance requirement. jet (in a procedure called Aquablation).
pass all three tests of the cost criterion We invited public comments on The applicant stated that the
for at least one APC. For our whether the Optimizer® System meets AquaBeam® System utilizes real-time
calculations, we used APC 5222, which the device pass-through payment intra-operative ultrasound guidance to
had a CY 2019 payment rate of criteria discussed in this section, allow the surgeon to precisely plan the
$7,404.11 at the time the application including the cost criterion for device surgical resection area of the prostate
was received. Beginning in CY 2017, we pass-through payment status. and then the system delivers
calculate the device offset amount at the Comment: The manufacturer of the Aquablation therapy to accurately resect
HCPCS/CPT code level instead of the Optimizer® System believed that the the obstructive prostate tissue without
APC level (81 FR 79657). CPT code device meets the cost criterion for the use of heat. The materials submitted
0410T had a device offset amount of device pass-through payment status. by the applicant state that the
$2,295.27 at the time the application The manufacturer noted a point of AquaBeam® System consists of a
was received. According to the clarification regarding the average sales disposable, single-use handpiece as well
applicant, the cost of the Optimizer® price (ASP) of the Optimizer® System as other components that are considered
System was $15,700. used for these calculations. They stated capital equipment.
Section 419.66(d)(1), the first cost that the $15,700 price in the application With respect to the newness criterion
significance requirement, provides that was based on discounted clinical trial at § 419.66(b)(1), FDA granted a De
the estimated average reasonable cost of pricing used during the FDA IDE Novo request classifying the
devices in the category must exceed 25 clinical trials to cover the AquaBeam® System as a Class II device
percent of the applicable APC payment manufacturing and research costs only. under section 513(f)(2) of the Federal
amount for the service related to the After FDA approval on March 21, 2019, Food, Drug, and Cosmetic Act on
category of devices. The estimated commercial pricing took effect, December 21, 2017. The application for
average reasonable cost of $15,700 for changing the Optimizer® System to a new device category for transitional
the Optimizer® System exceeds 212 $23,000. The manufacturer contended pass-through payment status for the
percent of the applicable APC payment the Cost Criteria are still met with the AquaBeam® System was received on
amount for the service related to the current $23,000 ASP for the Optimizer March 1, 2018, which is within 3 years
category of devices of $7,404.11 Smart System. of the date of the initial FDA approval
($15,700/$7,404.11 × 100 = 212 Response: We appreciate the or clearance. We invited public
percent). Therefore, we believe the manufacturer’s input. After comments on whether the AquaBeam®
Optimizer® System meets the first cost consideration of the public comments System meets the newness criterion. We
significance requirement. we received, we believe that Optimizer® did not receive any comments on the
The second cost significance System meets the cost criterion for newness of the AquaBeam® System. We
requirement, at § 419.66(d)(2), provides device pass-through payment status. believe AquaBeam® System meets the
that the estimated average reasonable After consideration of the public transitional pass-through payment
cost of the devices in the category must comments we received, we believe that newness criterion.
exceed the cost of the device-related the Optimizer® System qualifies for With respect to the eligibility criterion
portion of the APC payment amount for device pass-through payment status and at § 419.66(b)(3), according to the
the related service by at least 25 percent, we are approving the application for applicant, the AquaBeam® System is
which means that the device cost needs device pass-through payment status for integral to the service provided, is used
to be at least 125 percent of the offset the Optimizer® System beginning in CY for one patient only, comes in contact
amount (the device-related portion of 2020. with human skin, and is applied in or
the APC found on the offset list). The on a wound or other skin lesion. The
estimated average reasonable cost of (5) AquaBeam® System applicant also claimed the AquaBeam®
$15,700 for the Optimizer® System PROCEPT BioRobotics Corporation System meets the device eligibility
exceeds the cost of the device-related submitted an application for a new requirements of § 419.66(b)(4) because it
portion of the APC payment amount for device category for transitional pass- is not an instrument, apparatus,
the related service of $2,295.27 by 684 through payment status for the implement, or items for which
percent ($15,700/$2,295.27) × 100 = 684 AquaBeam® System as a resubmission depreciation and financing expenses are
percent. Therefore, we believe that the of their CY 2019 application. The recovered, and it is not a supply or
Optimizer® System meets the second AquaBeam® System is intended for the material furnished incident to a service.
cost significance requirement. resection and removal of prostate tissue However, in the CY 2019 OPPS/ASC
The third cost significance in males suffering from lower urinary proposed and final rules, we cited the
requirement, at § 419.66(d)(3), provides tract symptoms (LUTS) due to benign CY 2000 OPPS interim final rule with
that the difference between the prostatic hyperplasia (BPH). The comment period (65 FR 67804 through
estimated average reasonable cost of the applicant stated that this is a very 67805), where we explained how we
devices in the category and the portion common condition typically occurring interpreted § 419.43(e)(4)(iv). We stated
of the APC payment amount for the in elderly men. The clinical symptoms that we consider a device to be
device must exceed 10 percent of the of this condition can include surgically implanted or inserted if is
APC payment amount for the related diminished urinary stream and partial surgically inserted or implanted via a
service. The difference between the urethral obstruction.26 According to the natural or surgically created orifice, or
estimated average reasonable cost of inserted or implanted via a surgically
$15,700 for the Optimizer® System and 26 Chungtai B. Forde JC. Thomas DDM et al. created incision. We also stated that we
the portion of the APC payment amount Benign Prostatic Hyperplasia. Nature Reviews do not consider an item used to cut or
for the device of $2,295.27 exceeds the Disease Primers 2 (2016) article 16031. otherwise create a surgical opening to be
a device that is surgically implanted or removal of the prostatic urethra is a key orifices 27 means that passing the
inserted. We consider items used to aspect of treating the obstruction that AquaBeam® System through the natural
create incisions, such as scalpels, causes BPH symptoms. Finally, the orifice into the body is taking the place
electrocautery units, biopsy applicant believes that clinically the of creating a surgical opening.
apparatuses, or other commonly used distinction between the prostatic Response: We appreciate the
operating room instruments to be urethra tissue and the prostate tissue are comments submitted by the
supplies or capital equipment not not meaningful in the context of a BPH stakeholders on the eligibility of the
eligible for transitional pass-through surgical intervention. We invited public AquaBeam® System. After consideration
payments. We stated that we believe the comments on whether the AquaBeam® of submitted comments and after
function of these items is different and System meets the eligibility criteria at gaining additional clarity on the clinical
distinct from that of devices that are § 419.66(b). details of the procedure, we have
used for surgical implantation or Comments: We received several determined that the AquaBeam® System
insertion. Finally, we stated that, comments in regards to the eligibility of meets the eligibility criteria at
generally, we would expect that surgical the AquaBeam® System. While other § 419.66(b). Specifically, we believe that
implantation or insertion of a device stakeholders commented generally on the AquaBeam® System is inserted into
occurs after the surgeon uses certain the eligibility of the AquaBeam® the urethra, a natural orifice. We
primary tools, supplies, or instruments System, the applicant provided recognize that after being inserted into
to create the surgical path or site for additional detail in support of the urethra, the device then ablates both
implanting the device. In the CY 2006 AquaBeam’s eligibility. Stakeholders the prostatic urethra and the prostate
OPPS final rule with comment period agreed that AquaBeam® System was tissue in order to relieve and treat the
(70 FR 68329 and 68630), we adopted as eligible, and providing the following symptoms of BPH.
final our interpretation that surgical reasons: AquaBeam® System is not used The criteria for establishing new
insertion or implantation criteria to cut or otherwise create a surgical device categories are specified at
include devices that are surgically opening; the AquaBeam System § 419.66(c). The first criterion, at
inserted or implanted via a natural or handpiece is not a commonly used § 419.66(c)(1), provides that CMS
surgically created orifice, as well as operation room instrument; the determines that a device to be included
those devices that are inserted or AquaBeam System handpiece is integral in the category is not appropriately
implanted via a surgically created to the service provided; it is a single use described by any of the existing
incision. We reiterated that we maintain item; it comes into contact with human categories or by any category previously
all of the other criteria in § 419.66 of the tissue and finally, it is inserted into the in effect, and was not being paid for as
regulations, namely, that we do not prostatic urethra through a natural an outpatient service as of December 31,
consider an item used to cut or orifice. 1996. In the proposed rule, we had not
identified an existing pass-through
otherwise create a surgical opening to be The applicant restated that the
payment category that describes the
a device that is surgically implanted or AquaBeam® System does not cut or
AquaBeam® System. The applicant
inserted. otherwise create a surgical opening.
proposed a category descriptor for the
The applicant resubmitted their They reiterated that the AquaBeam®
AquaBeam® System of ‘‘Probe, image
application with additional information System is inserted into the body through
guided, robotic resection of prostate.’’
that they believe supports their stance a natural orifice at the meatus of the
We invited public comments on
that the device should be considered urethra without any cutting. The
whether the AquaBeam® System meets
eligible under the device pass-through applicant again stated that the
this criterion.
payment eligibility criteria. The AquaBeam® System is not used to cut We did not receive public comments
applicant stated that the AquaBeam® or otherwise create a surgical opening at that identified an existing pass-through
System’s handpiece is temporarily the meatus, or the prostatic urethra. The payment category that describes the
surgically inserted into the urethra via applicant further detailed that the AquaBeam® System. We believe that the
the urinary meatus. The applicant purpose of the ablation procedure is to AquaBeam® System meets this criterion.
indicated that the AquaBeam® System’s remove the tissue that is obstructing The second criterion for establishing
handpiece does not create an incision or urine flow through the urethra as well a device category, at § 419.66(c)(2),
surgical opening or pathway, but as to remove additional tissue that may provides that CMS determines that a
instead ablates prostate tissue. The obstruct the urethra causing LUTS. The device to be included in the category
applicant further stated that the device applicant claimed that the removal of has demonstrated that it will
only cuts the prostatic tissue after being the obstruction is not the creation of a substantially improve the diagnosis or
inserted into the prostatic urethra and surgical opening for inserting the device treatment of an illness or injury or
therefore it should be considered and that the device is already positioned improve the functioning of a malformed
eligible. The applicant also stated that inside the body. body part compared to the benefits of a
the prostatic urethra tissue is cut The applicant further argued that device or devices in a previously
because it is at the center of the ablating both the prostatic urethra and established category or other available
obstruction in the prostate. the prostate tissue is central to the treatment. The applicant stated that the
Additionally, the applicant explained treatment of BPH symptoms. AquaBeam® System provides a
that to relieve the symptoms of BPH, Additionally, they argued that substantial clinical improvement as the
both the prostatic urethra and prostate clinically, the distinction between the first autonomous tissue resection robot
tissue encircling the prostatic urethra prostatic urethra and the prostate tissue for the treatment of lower urinary tract
must be ablated, or cut, to relieve the are not meaningful to treat BPH and the symptoms due to BPH. The applicant
symptoms of BPH and provide some procedure does not create an opening at further provided that the AquaBeam®
additional clearance for future swelling the urethra to access the prostate for System is also a substantial clinical
or growth of the prostate. The applicant tissue removal. The applicant further improvement because the Aquablation
stated that the prostatic urethra tissue is argued that the plain meaning of the procedure demonstrated superior
not cut or disturbed to access the language used to expand eligibility to
prostate tissue underneath, but the include devices inserted through natural 27 70 FR 68630.
efficacy and safety for larger prostates shown with a decrease in Male Sexual comparison of Aquablation to other
(prostates sized 50–80 mL) as compared Health Questionnaire for Ejaculatory treatment modalities, including
to transurethral resection of the prostate Dysfunction (MSHQ) score of at least 2 transurethral incision of the prostate,
(TURP). The applicant also believes that points or a decrease in International photoselective vaporization
the Aquablation procedure would Index of Erectile Function (IIEF–5) score prostatectomy, transurethral needle
provide better outcomes for patients of at least 6 points by 6 months) was ablation of the prostate, transurethral
with large prostates (>80 mL) who may lower for the Aquablation procedure at microwave therapy, and prostatic
undergo open prostatectomy whereas 32.9 percent compared to the TURP urethral lift. The applicant included
the open prostatectomy procedure groups at 52.8 percent. several additional pieces of clinical
would require a hospital inpatient In the CY 2020 OPPS/ASC proposed literature to demonstrate that the above-
admission. With respect to this rule, we stated that we believed that the mentioned modalties are inferior in
criterion, the applicant submitted comparison of the AquaBeam® System efficacy to TURP in numerous objective
several articles that examined the use of with TURP does not recognize that there and subjective measurers, including
a current standard treatment for BPH— are other treatment modalities available peak urine flow, post-void reduction,
transurethral prostatectomy TURP, that are likely to have a similar safety and BPH symptom reduction.31 32 33
including complications associated with profile as the AquaBeam® System. No Additionally, the applicant provided
the procedure and the comparison of the studies comparing other treatment published data on a list of all surgical
effectiveness of TURP to other modalities were cited to show that the treatment modalities. The applicant
modalities used to treat BPH, including AquaBeam® System is a significant claims that based on this provided data
holmium laser enucleation of the improvement over other available it is evident that larger prostates are a
prostate (HoLEP) 28 and photoselective procedures. clinical challenge for all other
vaporization (PVP).29 Based on the evidence submitted with transurethral surgical approaches to
The most recent clinical study the application, we were concerned that BPH due to high rates of sexual
involving the AquaBeam® System was there was a lack of sufficient evidence dysfunction in TURP, SP, PVP, HoLEP,
an accepted manuscript describing a that the AquaBeam® System provides a and ThuLEP; high rates of blood
double-blind trial that compared men substantial clinical improvement over transfusions in TURP and SP; longer
treated with the AquaBeam® System other similar products, particularly in operative time due to the size of prostate
versus men treated with traditional the outpatient setting where large in PVP, HoLEP, and ThuLEP;
TURP.30 This was a multicenter study in prostates are less likely to be treated. We transurethral resection (TUR) syndrome
4 countries with 17 sites, 6 of which invited public comments on whether due to length of procedure; high rates of
contributed 5 patients or fewer. Patients the AquaBeam® System meets the re-intervention or secondary procedures
were randomized to receive treatment substantial clinical improvement in PVP; and, transient incontinence in
with either the AquaBeam® System or criterion. HoLEP and ThuLEP. The applicant
TURP in a two-to-one ratio. With Comment: We received several states that these complication have
exclusions and dropouts, 117 patients comments regarding the substantial traditionally limited the treatment of
were treated with the AquaBeam® clinical improvement that the larger prostates in the outpatient setting.
System and 67 patients with TURP. The AquaBeam® System may provide. They The applicant further details that the
data on efficacy supported the were concerned that the comparison of reason for the increase in complications
equivalence of the two procedures based the AquaBeam® System with TURP in large prostates is due to the length of
upon noninferiority analysis. The safety does not recognize that there are other the resection time required. In support
data were reported as showing treatment modalities available that are of their claim of being appropriate for
superiority of the AquaBeam® System likely to have a similar safety profile as the outpatient study, the applicant
over TURP, although the data were the AquaBeam® System and that there restates findings from the WATER II
difficult to track because adverse were no studies provided comparing study, which utilized Aquablation
consequences were combined into other treatment modalities to show that therapy to treat large prostates 80 to 150
categories. The applicant claimed that the AquaBeam® System is a significant mL in volume, with greater than 50
the International Prostate Symptom improvement over other available percent of the cases involving large
Scores (IPPS) were significantly procedures. prostates in the hospital outpatient
improved in AquaBeam® System The applicant commented that in the setting. The average Aquablation
patients as compared to TURP patients FY 2019 IPPS notice of final operative time was 37 minutes,
in men whose prostate was greater the rulemaking, CMS concluded that the including 8 minutes of resection time
50 mL in size. The applicant also WATER study findings were statistically and 29 minutes used for planning and
claimed that the proportion of men with significant and showed Aquablation robotic programming.
a worsening of sexual function (as superior to TURP in safety, as well as Response: We appreciate the
that patients in the WATER study with submission of public comments.
28 Montorsi, F. et al.: Holmium Laser Enucleation prostates larger than 50 mL in volume
Versus Transurethral Resection of The Prostate: treated with Aquablation had superior 31 Christidis, D. et al. Minimally Invasive
Results from A 2-Center, Prospective, Randomized Therapies for Benign Prostatic Hypertrophy: The
Trial In Patients With Obstructive Benign Prostatic
improvement in quantifiable symptom
Rise in Minimally Invasive Surgical Therapies,
Hyperplasia. J. Urol. 172, 1926–1929 (2004). outcomes. Prostate International. 5, 41–46 (2017).
29 Bachmann A, et al.: 180–W XPS GreenLight Additionally, the applicant provided 32 Bachmann A, Tubaro A, Barber N et al: 180–
laser vaporisation versus transurethral resection of that TURP is the gold standard and most W XPS GreenLight laser vaporisation versus
the prostate for the treatment of benign prostatic common treatment for LUTS due to BPH transurethral resection of the prostate for the
obstruction: 6-month safety and efficacy results of treatment of benign prostatic obstruction: 6-month
a European Multicentre Randomised Trial—the
and that through a direct comparison to safety and efficacy results of a European
GOLIATH study. Eur Urol, 2014;65(5):931–42. TURP, the WATER study demonstrates multicenter randomised trial—the GOLIATH study.
30 Gilling P. Barber M. Anderson P et al.: that the AquaBeam® System is a Eur Urol 2014; 65: 931.
WATER—A Double-Blind Randomized Controlled substantial clinical improvement over 33 Sonksen J et al. Prospective, Randomized,
Trial of Aquablation vs Transurethal Resection of Multinational Study of Prostatic Urethral Lift

the Prostate in Benign Prostatic Hyperplasia. J Urol.
the gold standard. The applicant also Versus Transurethral Resection of the Prostate: 12-
Accepted December 29, 2017 doi 10.1016/ provides that the direct comparison to month Results from the BPH6 Study. Eur Urol 2015;
j.juro.2017.12.065. TURP in the WATER study allows a 68:643–52.
Specifically, we appreciate the payment rate of $3,706.03. Beginning in device pass-through payment criteria,
additional scientific data provided that CY 2017, we calculate the device offset including the cost criterion.
demonstrates the AquaBeam® System’s amount at the HCPCS/CPT code level Response: We thank the manufacturer
superiority to other techniques, instead of the APC level (81 FR 79657). for their input. After consideration of
specifically for reducing operative time CPT code 0421T had device offset the public comments we received, we
and complications in general, especially amount of $0.00 at the time the believe the AquaBeam® System meets
for larger prostates. We agree that the application was received. According to
the cost criterion and we are approving
results of the WATER study are the applicant, the cost of the handpiece
it for device pass-through payment
statistically significant with a 95 percent for the AquaBeam® System is $2,500.
confidence interval of the difference status beginning in CY 2020.
Section 419.66(d)(1), the first cost
between AquaBeam® and TURP and significance requirement, provides that (6) EluviaTM Drug-Eluting Vascular
show AquaBeam® is superior to TURP the estimated average reasonable cost of Stent System
in safety as evidenced by a lower devices in the category must exceed 25
proportion of persistent Clavien-Dindo percent of the applicable APC payment Boston Scientific Corporation
(CD) Grade 1 adverse events amount for the service related to the submitted an application for new
(incontinence, ejaculatory dysfunction category of devices. The estimated technology add-on payments for the
and erectile dysfunction) at 3 months. average reasonable cost of $2,500 for the EluviaTM Drug-Eluting Vascular Stent
We also agree that when considering CD AquaBeam® System exceeds 25 percent System for FY 2020. According to the
Grade 2 and above events (events of the applicable APC payment amount applicant, the EluviaTM system is a
requiring pharmacological treatment, for the service related to the category of sustained-release drug-eluting stent
blood transfusions, or endoscopic, devices of $3,706.03 ($2,500/$3,706.03 × indicated for improving luminal
surgical or radiological interventions) 100 = 67.5 percent). Therefore, we diameter in the treatment of peripheral
the WATER study demonstrated a believe the AquaBeam® System meets artery disease (PAD) with symptomatic
superior safety rate to TURP. the first cost significance requirement. de novo or restenotic lesions in the
Additionally, patients enrolled in the The second cost significance native superficial femoral artery (SFA)
WATER study with prostate sizes requirement, at § 419.66(d)(2), provides and/or the proximal popliteal artery
greater than 50 mL in volume and that the estimated average reasonable (PPA) with reference vessel diameters
treated with AquaBeam® had superior cost of the devices in the category must (RVD) ranging from 4.0 to 6.0 mm and
BPH symptom reduction (IPSS) than exceed the cost of the device-related total lesion lengths up to 190 mm.
those treated with TURP, as well as portion of the APC payment amount for
better peak urinary flow rates at 6 The applicant stated that PAD is a
the related service by at least 25 percent, circulatory condition in which
months (Qmax), improved ejaculatory which means that the device cost needs
function, and improved incontinence narrowed arteries reduce blood flow to
to be at least 125 percent of the offset
scores at 3 months. the limbs, usually in the legs. Symptoms
amount (the device-related portion of
Additionally, results from the WATER of PAD may include lower extremity
the APC found on the offset list). Given
II study for patients with large prostates pain due to varying degrees of ischemia,
that there are no device-related costs in
demonstrate better outcomes of the claudication which is characterized by
the APC payment amount and the
AquaBeam® System over open pain induced by exercise and relieved
AquaBeam® System has an estimated
prostatectomy, regarding shorter with rest. According to the applicant,
average reasonable cost of $2,500, we
operative time, shorter length of stay, risk factors for PAD include individuals
believe that the AquaBeam® System
and decreased rates of severe who are age 70 years old and older;
hemorrhage and transfusions. We also meets the second cost significance
requirement. individuals who are between the ages of
agree that the minimally invasive nature 50 years old and 69 years old with a
of Aquablation offers men with large The third cost significance
requirement, at § 419.66(d)(3), provides history of smoking or diabetes;
prostates (>80 mL) an outpatient option. individuals who are between the ages of
In conclusion, after review of the that the difference between the
estimated average reasonable cost of the 40 years old and 49 years old with
additional data and literature, we agree diabetes and at least one other risk
that the AquaBeam® System provides a devices in the category and the portion
of the APC payment amount for the factor for atherosclerosis; leg symptoms
substantial clinical improvement. suggestive of claudication with exertion,
The third criterion for establishing a device must exceed 10 percent of the
APC payment amount for the related or ischemic pain at rest; abnormal lower
device category, at § 419.66(c)(3),
service. The difference between the extremity pulse examination; known
requires us to determine that the cost of
the device is not insignificant, as estimated average reasonable cost of atherosclerosis at other sites (for
described in § 419.66(d). Section $2,500 for the AquaBeam® System and example, coronary, carotid, renal artery
419.66(d) includes three cost the portion of the APC payment amount disease); smoking; hypertension,
significance criteria that must each be for the device of $0.00 exceeds the APC hyperlipidemia, and
met. The applicant provided the payment amount for the related service homocysteinemia.34 PAD is primarily
following information in support of the of $3,706.03 by 68 percent (($2,500 ¥ caused by atherosclerosis—the buildup
cost significance requirements. The $0.00)/$3,706.03 × 100 = 67.5 percent). of fatty plaque in the arteries. PAD can
applicant stated that the AquaBeam® Therefore, we believe that the occur in any blood vessel, but it is more
System would be reported with CPT AquaBeam® System meets the third cost common in the legs than the arms.
code 0421T. CPT code 0421T is significance requirement. Approximately 8.5 million people in the
assigned to APC 5375 (Level 5 Urology We invited public comments on U.S. have PAD, including 12 to 20
and Related Services). To meet the cost whether the AquaBeam® System meets
criterion for device pass-through the device pass-through payment 34 Neschis, David G. & MD, Golden, M., ‘‘Clinical
payment status, a device must pass all criteria discussed in this section, features and diagnosis of lower extremity peripheral
artery disease.’’ Available at: https://
three tests of the cost criterion for at including the cost criterion. www.uptodate.com/contents/clinical-features-and-
least one APC. For our calculations, we Comment: The manufacturer believed diagnosis-of-lower-extremity-peripheral-artery-
used APC 5375, which has a CY 2018 that the AquaBeam® System meets the disease.
percent of individuals who are age 60 delivery system is compatible with system.’’ We invited public comments
years old and older.35 0.035 in (0.89 mm) guide wires. The on this issue.
Management of the disease is aimed at EluviaTM stent is available in a variety Comment: One commenter stated that
improving symptoms, improving of diameters and lengths. The delivery the stent platform, the drug coating, and
functional capacity, and preventing system is offered in 2 working lengths the polymer coating of the EluviaTM
amputations and death. Management of (75 cm and 130 cm). Drug-Eluting Vascular Stent System are
patients who have been diagnosed with With respect to the newness criterion not new. The commenter compared
lower extremity PAD may include at § 419.66(b)(1), EluviaTM received FDA EluviaTM to the Zilver PTX drug-eluting
medical therapies to reduce the risk for premarket approval (PMA) on stent, arguing that both are self-
future cardiovascular events related to September 18, 2018. The application for expanding nitinol stents coated with
atherosclerosis, such as myocardial a new device category for transitional paclitaxel. The commenter also
infarction, stroke, and peripheral pass-through payment status for compared the underlying stent platform
arterial thrombosis. Such therapies may EluviaTM was received on November 15, and delivery system of EluviaTM to
include antiplatelet therapy, smoking 2018, which is within 3 years of the date Boston Scientific’s Innova self-
cessation, lipid-lowering therapy, and of the initial FDA approval or clearance. expanding stent.36 Finally, the
treatment of diabetes and hypertension. We invited public comments on commenter believed that the polymers
For patients with significant or whether the EluviaTM Drug-Eluting used in the EluviaTM coating are the
disabling symptoms unresponsive to Vascular Stent System meets the same used in the Xience V and Promus
lifestyle adjustment and pharmacologic newness criterion. We did not receive Element coronary stents.37
therapy, intervention (percutaneous, public comments in regards to Eluvia’s Comment: Another commenter, the
surgical) may be needed. Surgical newness, however, since the application manufacturer, restated that they are
intervention includes angioplasty, a was received within 3 years of the vastly different than the Zilver PTX
procedure in which a balloon-tip initial date of FDA approval or drug eluting stent, as well as any other
catheter is inserted into the artery and clearance, we believe that the EluviaTM device. The commenter provided that
inflated to dilate the narrowed artery Drug-Eluting Vascular Stent System Eluvia’s polymer matrix layer is
lumen. The balloon is then deflated and meets the newness criterion. different from the paclitaxel-coated
removed with the catheter. For patients With respect to the eligibility criterion Zilver PTX, and allows for targeted,
with limb-threatening ischemia (for at § 419.66(b)(3), according to the localized, sustained, low-dose
example, pain while at rest and/or applicant, the EluviaTM Drug-Eluting amorphous paclitaxel delivery with
ulceration), revascularization is a Vascular Stent System is integral to the minimal systemic distribution or
priority to reestablish arterial blood service provided, is used for one patient particulate loss. The commenter also
flow. According to the applicant, only, comes in contact with human states that there is a difference in the
treatment of the SFA is problematic due skin, and is applied in or on a wound diffusion gradient: Paclitaxel is
to multiple issues including high rate of or other skin lesion. The applicant also delivered to the lesion via a diffusion
restenosis and significant forces of claimed that the EluviaTM Drug-Eluting gradient with poly(vinylidene fluoride)-
compression. Vascular Stent System meets the device co-hexafluoropropylene, whereas they
The applicant describes the EluviaTM eligibility requirements of § 419.66(b)(4) state that the Zilver PTX does not have
Drug-Eluting Vascular Stent System as a because it is not an instrument, a diffusion gradient. The commenter
sustained-release drug-eluting self- apparatus, implement, or items for stated that EluviaTM releases paclitaxel
expanding, nickel titanium alloy which depreciation and financing directly to the target lesion, while Zilver
(nitinol) mesh stent used to reestablish expenses are recovered, and it is not a PTX release is non-specific to the target
blood flow to stenotic arteries. supply or material furnished incident to lesion. The commenter also stated that
According to the applicant, the EluviaTM a service. We invited public comments Eluvia releases paclitaxel over
stent is coated with the drug paclitaxel, on whether the EluviaTM Drug-Eluting approximately 12 to 15 months, while
which helps prevent the artery from Vascular Stent System meets the Zilver PTX’s release is complete at two
restenosis. The applicant stated that eligibility criterion at § 419.66(b). months. The commenter stated that
We did not receive any public
EluviaTM’s polymer-based drug delivery these significant differences in the
comments on this issue. We believe that
system is uniquely designed to sustain device designs impact drug dose, drug
EluviaTM Drug-Eluting Vascular Stent
the release of paclitaxel beyond 1 year release mechanism, and drug release
System meets the eligibility criterion.
to match the restenotic process in the The criteria for establishing new kinetics.
SFA. According to the applicant, the Response: We appreciate the
device categories are specified at
EluviaTM Drug-Eluting Vascular Stent stakeholders’ comments and
§ 419.66(c). The first criterion, at
System is comprised of: (1) The comparison of the polymer matrix
§ 419.66(c)(1), provides that CMS
implantable endoprosthesis; and (2) the EluviaTM versus the paclitaxel-coated
determines that a device to be included
stent delivery system (SDS). On both the in the category is not appropriately Zilver PTX and several other devices.
proximal and distal ends of the stent, described by any of the existing After consideration of the comments, we
radiopaque markers made of tantalum categories or by any category previously 36 Gray W, et al. A polymer-coated, paclitaxel-
increase visibility of the stent to aid in in effect, and was not being paid for as eluting stent (Eluvia) versus a polymer-free,
placement. The tri-axial designed an outpatient service as of December 31, paclitaxel-coated stent (Zilver PTX) for
delivery system consists of an outer 1996. We have not identified an existing endovascular femoropopliteal intervention
shaft to stabilize the stent delivery pass-through payment category that (IMPERIAL): a randomised, non-inferiority trial.
system, a middle shaft to protect and Lancet; Published Online September 22, 2018;
describes the EluviaTM Drug-Eluting http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
constrain the stent, and an inner shaft Vascular Stent System. The applicant 37 Gray W, et al. A polymer-coated, paclitaxel-
to provide a guide wire lumen. The proposed a category descriptor for the eluting stent (Eluvia) versus a polymer-free,
EluviaTM Drug-Eluting Vascular Stent paclitaxel-coated stent (Zilver PTX) for
35 Centers for Disease Control and Prevention, endovascular femoropopliteal intervention
‘‘Peripheral Arterial Disease (PAD) Fact Sheet,’’
System of ‘‘Stent, non-coronary, (IMPERIAL): a randomised, non-inferiority trial.
2018, Available at: https://www.cdc.gov/DHDSP/ polymer matrix, minimum 12-month Lancet; Published Online September 22, 2018;
data_statistics/fact_sheets/fs_PAD.htm. sustained drug release, with delivery http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
believe that EluviaTM device is a new Doppler ultrasound evaluable by the study and a nonblinded,
design with a unique mechanism of core laboratory, and 48 patients had nonrandomized study of patients who
action, and therefore is not described by radiographs taken for stent fracture had been diagnosed with long lesions
any current device category. Therefore, analysis. The 3-year follow-up was (greater than 140 mm in diameter).
the EluviaTM device meets the device completed by 54 patients. At 2 years,
The IMPERIAL study is a prospective,
category eligibility criterion. 90.6 percent (48/53) of the patients had
The second criterion for establishing multi-center, single-blinded
improved by 1 or more Rutherford
a device category, at § 419.66(c)(2), categories as compared with the pre- randomized, controlled (RCT)
provides that CMS determines that a procedure level without the need for noninferiority trial. Patients were
device to be included in the category TLR (when those with TLR were randomized (2:1) to implantation of
has demonstrated that it will included, 96.2 percent sustained either a paclitaxel-eluting polymer stent
substantially improve the diagnosis or improvement); only 1 patient exhibited (EluviaTM) or a paclitaxel-coated stent
treatment of an illness or injury or a worsening in level, 66.0 percent (35/ (Zilver® PTX) after the treating
improve the functioning of a malformed 53) of the patients exhibited no physician had successfully crossed the
body part compared to the benefits of a symptoms (Category 0) and 24.5 percent target lesion with a guide wire. The
device or devices in a previously (13/53) had mild claudication (Category primary endpoints of the study are
established category or other available 1) at the 24-month visit. Mean ABI Major Adverse Events defined as all
treatment. With respect to this criterion, improved from 0.73 ± 0.22 at baseline to causes of death through 1 month, Target
the applicant submitted several articles 1.02 ± 0.20 at 12 months and 0.93 ± 0.26 Limb Major Amputation through 12
that examined the use of a current at 24 months. At 24 months, 79.2 months and/or Target Lesion
standard treatment for peripheral artery percent (38/48) of the patients had an Revascularization (TLR) procedure
disease (PAD) with symptomatic de ABI increase of at least 0.1 compared through 12 months and primary vessel
novo or restenotic lesions in the native with baseline or had reached an ABI of patency at 12 months post-procedure.
superficial femoral artery (SFA) and/or at least 0.9. The applicant also noted Secondary endpoints included the
proximal popliteal artery (PPA), with that at 12 months the Kaplan–Meier Rutherford categorization, Walking
claims of substantial clinical estimate of primary patency was 96.4
Impairment Questionnaire, and EQ–5D
improvement in achieving superior percent.
primary patency; reducing the rate of With regard to the EluviaTM stent assessments at 1 month, 6 months, and
subsequent therapeutic interventions; achieving superior primary patency, the 12 months post-procedure. Patient
decreasing the number of future applicant submitted the results of the demographic and characteristics were
hospitalizations or physician visits; IMPERIAL 39 study in which the balanced between the EluviaTM stent
reducing hospital readmission rates; EluviaTM stent is compared, head-to- and Zilver® PTX stent groups.
reducing the rate of device-related head, to the Zilver® PTX Drug-Eluting The applicant noted that lesion
complications; and achieving similar stent. The IMPERIAL study is a global, characteristics for the patients in the
functional outcomes and EQ–5D index multi-center, randomized controlled EluviaTM stent versus the Zilver® PTX
values while associated with half the trial consisting of 465 subjects. Eligible stent arms were comparable. Clinical
rate of target lesion revascularizations patients were aged 18 years old or older follow-up visits related to the study
(TLRs) procedures. and had a diagnosis of symptomatic were scheduled for 1 month, 6 months,
The applicant submitted the results of lower-limb ischaemia, defined as and 12 months after the procedure, with
the MAJESTIC study, a single-arm, first- Rutherford Category 2, 3, or 4 and follow-up planned to continue through
in-human study of the EluviaTM Drug- stenotic, restenotic (treated with a drug- 5 years, including clinical visits at 24
Eluting Vascular Stent System. The coated balloon greater than 12 months months and 5 years and clinical or
MAJESTICT 38 study is a prospective, before the study or standard
multi-center, single-arm, open-label telephone follow-up at 3 and 4 years.
percutaneous transluminal angioplasty
study. According to the applicant, the only), or occlusive lesions in the native The applicant asserted that in the
MAJESTIC study demonstrated long- SFA or PPA, with at least 1 IMPERIAL study the EluviaTM stent
term treatment durability among infrapopliteal vessel patent to the ankle demonstrated superior primary patency
patients whose femoropopliteal arteries or foot. Patients had to have stenosis of over the Zilver® PTX stent, 86.8 percent
were treated with the EluviaTM stent. 70 percent or more (via angiographic versus 77.5 percent, respectively (p =
The applicant asserted that the assessment), vessel diameter between 4 0.0144). The noninferiority primary
MAJESTIC study demonstrates the mm and 6 mm, and total lesion length efficacy endpoint was also met. The
sustained impact of the EluviaTM stent between 30 mm and 140 mm. applicant provided that the superior
on primary patency. The MAJESTIC Patients who had previously stented primary patency results at the SFA are
study enrolled 57 patients who had target lesion/vessels treated with drug- notable because the SFA presents
been diagnosed with symptomatic lower coated balloon less than 12 months unique challenges with respect to
limb ischemia and lesions in the SAF or prior to randomization/enrollment and maintaining long-term patency. There
PPA. Efficacy measures at 2 years patients who had undergone prior are distinct pathological differences
included primary patency, defined as surgery of the SFA/PPA in the target between the SFA and coronary arteries.
duplex ultrasound peak systolic velocity limb to treat atherosclerotic disease The SFA tends to have higher levels of
ratio of less than 2.5 and the absence of were excluded from the study. Two
calcification and chronic total
TLR or bypass. Safety monitoring concurrent single-group (EluviaTM only)
occlusions when compared to coronary
through 3 years included adverse events substudies were done: A nonblinded,
and TLR. The 24-month clinic visit was nonrandomized pharmacokinetic sub- arteries. Following an intervention
completed by 53 patients; 52 had within the SFA, the SFA produces a
39 Gray, W.A., et al., ‘‘A polymer-coated, healing response which often results in
38 Müller-Hülsbeck, S., et al., ‘‘Long-Term Results paclitaxel-eluting stent (Eluvia) versus a polymer- restenosis or re-narrowing of the arterial
from the MAJESTIC Trial of the Eluvia Paclitaxel- free, paclitaxel-coated stent (Zilver PTX) for lumen. This cascade of events leading to
Eluting Stent for Femoropopliteal Treatment: 3-Year endovascular femoropopliteal intervention
Follow-up,’’ Cardiovasc Intervent Radiol, December (IMPERIAL): a randomised, non-inferiority trial,’’
restenosis starts with inflammation,
2017, vol. 40(12), pp. 1832–1838. Lancet, September 24, 2018. followed by smooth muscle cell
proliferation and matrix formation.40 stent group was 4.5 percent compared to compared to 7.1 percent for the Zilver®
Because of the unique mechanical forces 9.0 percent in the Zilver® PTX stent PTX stent group. Similar results were
in the SFA, this restenotic process of the group. The applicant asserted that the noted at 1 and 6 months; 1.0 percent
SFA can continue well beyond 300 days TLR rate in the EluviaTM stent group versus 2.6 percent and 2.4 percent
from the initial intervention. Results represents a substantial reduction in versus 3.8 percent, respectively.
from the IMPERIAL study showed that reintervention on the target lesion With regard to reducing the rate of
primary patency at 12 months, by compared to that of the Zilver® PTX device-related complications, the
Kaplan-Meier estimate, was stent group (at a p = 0.067 p-value). The applicant asserted that while the rates of
significantly greater for EluviaTM than Eluvia® stent group clinically driven adverse events were similar in total
for Zilver® PTX, 88.5 percent and 79.5 TLR rates through 12 months following between treatment arms in the
percent, respectively (p = 0.0119). the index procedure were likewise IMPERIAL study, there were measurable
According to the applicant, these results lower for U.S. patients age 65 and older differences in device-related
are consistent with the 96.4 percent as well as for those with medically
complications. Device-related adverse-
primary patency rate at 12 months in treated diabetes (confidential and
events were reported in 8 percent of the
the MAJESTIC study. unpublished as of the date of the device
patients in the EluviaTM stent group
The IMPERIAL study included two transitional pass-through payment
compared to 14 percent of the patients
concurrent single-group (EluviaTM only) application, data on file with Boston
in the Zilver® PTX stent group.
substudies: A nonblinded, Scientific). In the subgroup of U.S.
nonrandomized pharmacokinetic patients age 65 and older, the rates of Lastly, the applicant asserted that
substudy and a nonblinded, TLR were 2.4 percent in the EluviaTM while functional outcomes appear
nonrandomized study of patients with group compared to 3.1 percent in the similar between the EluviaTM and
long lesions (greater than 140 mm in Zilver® PTX group, and in the subgroup Zilver® PTX stent groups at 12 months,
diameter). For the pharmacokinetic sub- of medically treated diabetes patients, these improvements for the Zilver® PTX
study, patients had venous blood drawn the rates of TLR were 3.7 percent stent group are associated with twice as
before stent implantation and at compared to 13.6 percent in the Zilver® many TLRs to achieve similar EQ–5D
intervals ranging from 10 minutes to 24 PTX group (p = 0.0269). index values.41 Secondary endpoints
hours post implantation, and again at With regard to decreasing the number improved after stent implantation and
either 48 hours or 72 hours post of future hospitalizations or physician were generally similar between the
implantation. The pharmacokinetics visits, the applicant asserted that the groups. At 12 months, of the patients
sub-study confirmed that plasma substantial reduction in the lesion with complete Rutherford assessment
paclitaxel concentrations after EluviaTM revascularization rate led to a reduced data, 241 (86 percent) of the 281
stent implantation were well below need to provide additional intensive patients in the EluviaTM group and 120
thresholds associated with toxic effects care, distinguishing the EluviaTM stent (85 percent) of the 142 patients in the
in studies in patients who had been group from the Zilver® PTX stent group. Zilver® PTX group had symptoms
diagnosed with cancer (0·05 mM or ∼43 In the IMPERIAL study, the EluviaTM- reported as Rutherford Category 0 or 1
ng/mL). treated patients required fewer days of (none to mild claudication). The mean
The IMPERIAL substudy long lesion re-hospitalization. Patients in the ankle-brachial index was 1·0 (SD 0·2) in
subgroup consisted of 50 patients with EluviaTM group averaged 13.9 days of both groups at 12 months (baseline
average lesion length of 162.8 mm that rehospitalization for all adverse events mean ankle-brachial index 0·7 [SD 0·2]
were each treated with two EluviaTM compared to 17.7 days of for EluviaTM; 0·8 [0·2] for Zilver® PTX),
stents. According to the applicant, 12- rehospitalization for patients in the with sustained hemodynamic
month outcomes for the long lesion Zilver® PTX stent group. Patients in the improvement for approximately 80
subgroup are 87 percent primary EluviaTM group were rehospitalized for percent of the patients in both groups.
patency and 6.5 percent TLR. According 2.8 days for TLR/Total Vessel Walking function improved
to the applicant, in a separate subgroup Revascularization (TVR) compared to significantly from baseline to 12 months
analysis of patients 65 years old and 7.1 days in the Zilver® PTX stent group. in both groups, as measured with the
older (Medicare population), the Lastly, patients in the EluviaTM stent Walking Impairment Questionnaire and
primary patency rate in the EluviaTM group were rehospitalized for 2.7 days the 6-minute walk test. In both groups,
stent group is 92.6 percent, compared to for procedure/device-related adverse the majority of patients had sustained
75.0 percent for the Zilver® PTX stent events compared to 4.5 days from the improvement in the mobility dimension
group (p = 0.0386). Zilver® PTX stent group. of the EQ–5D, and approximately half
With regard to reducing the rate of Regarding reduction in hospital had sustained improvement in the pain
subsequent therapeutic interventions, readmission rates, the applicant asserted or discomfort dimension. No significant
secondary outcomes in the IMPERIAL that patients treated in the EluviaTM between-group differences were
study included repeat re-intervention on stent group experienced reduced rates of observed in the Walking Impairment
the same lesion, referred to as target hospital readmission following the Questionnaire, 6-minute walk test, or
lesion revascularization (TLR), over the index procedure compared to those in EQ–5D. Secondary endpoint results for
12 months following the index the Zilver® PTX stent group. Hospital the EluviaTM stent and Zilver® PTX
procedure. The rate of subsequent readmission rates at 12 months were 3.9 stent groups are shown in Table 39 as
interventions, or TLRs, in the EluviaTM percent for the EluviaTM stent group follows:
40 Forrester, J.S., Fishbein, M., Helfant, R., Fagin, 41 Gray, W.A., Keirse, K., Soga, Y., et al., ‘‘A inferiority trial,’’ Lancet, 2018. Available at: http://
J., ‘‘A paradigm for restenosis based on cell biology: polymer-coated, paclitaxel-eluting stent (Eluvia) dx.doi.org/10.1016/S0140-6736(18)32262-1.
clues for the development of new preventive versus a polymer-free, paclitaxel-coated stent
therapies,’’ J Am Coll Cardiol, March 1, 1991, vol. (Zilver PTX) for endovascular femoropopliteal
17(3), pp. 758–69. intervention (IMPERIAL): A randomized, non-
We noted that the IMPERIAL study, a finding of substantial clinical slide used for the presentation to offer
which showed significant differences in improvement for the EluviaTM system. an assessment of the statistical
primary patency at 12 months, was We further noted that the applicant significance of this difference. The
designed for noninferiority and not for the EluviaTM Drug Eluting Vascular commenter noted that the manufacturer
superiority. Therefore, we Stent System also applied for the IPPS of the EluviaTM stent did not discuss
wereconcerned that results showing new technology add-on payment (FY this particular hospital readmission rate
primary patency at 12 months may not 2020 IPPS/LTCH PPS proposed rule; 86 data comparison in the main body of
be valid given the study design. We also FR 19314). In the FY 2020 IPPS/LTCH The Lancet paper; however, the data
are concerned that the results of a PPS proposed rule, we discussed several could be found in the online appendix
recently published meta-analysis of publicly available comments that also and is shown as not statistically
randomized controlled trials of the risk raised concerns relating to substantial significant.
of death associated with the use of clinical improvement. We list several of With regards to longer-term data on
paclitaxel-coated balloons and stents in those concerns below. While the the Zilver® PTX stent and the EluviaTM
the femoropopliteal artery of the leg, EluviaTM IMPERIAL study does cite a stent, the commenter noted that in the
which found that there is increased risk reduced rate of ‘‘Subsequent commentary in The Lancet paper
of death following application of Therapeutic Interventions’’, public accompanying the IMPERIAL study,
paclitaxel-coated balloons and stents in comments for the IPPS proposed rule Drs. Salvatore Cassese and Robert Byrne
the femoropopliteal artery of the lower note that ‘‘Subsequent Therapeutic write that a follow-up duration of 12
limbs and that further investigations are Interventions’’ was not further defined months is insufficient to assess late
urgently warranted,42 although the in the New Technology Town Hall failure, which is not infrequently
EluviaTM system was not included in presentation nor in the IMPERIAL observed. According to Drs. Cassese and
the meta-analysis. We were also study. The commenters stated that it Byrne, the preclinical models of
concerned that the findings from this would appear from the presentation restenosis after stenting of peripheral
study indicated that the data suggesting materials, however, that this claim arteries have shown that stents
that drug-coated stents are substantially refers specifically to ‘‘target lesion permanently overstretch the arterial
clinically improved are unconfirmed. revascularizations (TLR)’’, which does wall, thus stimulating persistent
We invited public comments on not appear statistically significant. neointimal growth, which might cause a
whether the EluviaTM Drug-Eluting With regard to the applicant’s catch-up phenomenon and late failure.
Vascular Stent System meets the assertion that the use of the EluviaTM The Lancet paper noted that, in this
substantial clinical improvement stent reduces hospital readmission rates, regard, data on outcomes beyond one
criterion, including the implications of a commenter noted that during the New year will be important to confirm the
the meta-analysis results with respect to Technology Town Hall presentation, the durability of the efficacy of the EluviaTM
presenter noted that the EluviaTM group stent.43 The commenter stated that, at
42 Katsanos, K., et al., ‘‘Risk of Death Following
had a hospital readmission rate at 12
Application of Paclitaxel-Coated Balloons and
Stents in the Femoropopliteal Artery of the Leg: A
months of 3.9 percent compared to the 43 Cassese, S., & Byrne, R.E., ‘‘Endovascular
Systematic Review and Meta-Analysis of Zilver® PTX group’s rate of 7.1 percent, stenting in femoropopliteal arteries,’’ The Lancet,
ER12NO19.062</GPH>
Randomized Controlled Trials,’’ JAHA, vol. 7(24). and that no p-value was included on the 2018, vol. 392(10157), pp. 1491–1493.
this point in time, very limited longer- patient population, including a 787 paclitaxel-coated balloons and stents 44
term data are available on the use of the patient study conducted in Europe with that initiated an FDA panel and
EluviaTM stent and that the IMPERIAL 2-year follow-up and a 904-patient analysis. The meta-analysis and
study offers only 12-month data, study of all-comers (no exclusion systematic review of several randomized
although data out to three years have criteria) in Japan with 5-year follow-up controlled trials of the risk of death
been published from the relatively small completed. The commenter believed associated with the use of paclitaxel-
57-patient single-arm MAJESTIC study. that, with no corresponding data for the coated balloons and stents in the
The commenter noted that the use of the EluviaTM stent in a broad femoropopliteal artery of the leg and
MAJESTIC study demonstrates a patient population, it seems found that there is an increased risk of
decrease in primary patency from 96.4 unreasonable to suggest that the use of death following the application of
percent at one year to 83.5 percent at 2 the EluviaTM stent results in a paclitaxel-coated devices.
years; and a doubling in TLR rates from substantial clinical improvement Commenters stated that EluviaTM is
1 year to 2 years (3.6 percent to 7.2 compared to the Zilver® PTX stent. different from the devices that were
percent) and again from 2 years to 3 Based on the evidence submitted with studied in the meta-analysis of
years (7.2 percent to 14.7 percent). The the application, we were concerned that paclitaxel-coated balloons and stents.
commenter stated that this is not there was a lack of sufficient evidence Specifically, the commenters claim that
inconsistent with Drs. Cassese and that the EluviaTM Vascular Drug-Eluting EluviaTM delivers paclitaxel in lower
Byrne’s commentary regarding late Stent System provides a substantial doses than the devices in the meta-
failure, and that the relatively small, clinical improvement over other similar analysis and is the only peripheral
single-arm design of the study does not products. We invited public comments device to deliver paclitaxel through a
lend itself well to direct comparison to on whether EluviaTM Vascular Drug- sustained-release mechanism of action
other SFA treatment options such as the Eluting Stent System meets the where delivery of paclitaxel is
Zilver® PTX stent. substantial clinical improvement controlled and focused on the target
The commenter also stated that criterion. lesion. The commenters, including the
EluviaTM’s lack of long-term data Comment: One commenter, the applicant, believe that the suggestion in
contrasts with 5-year data that is manufacturer, stated that the IMPERIAL the meta-analysis of a late-term
available from the Zilver® PTX stent’s trial’s design as a non-inferiority study mortality risk associated with
pivotal 479-patient RCT comparing the is consistent with accepted research paclitaxel-coated devices is not directly
use of the Zilver® PTX stent to methodology and is typical of many applicable to the EluviaTM device.
angioplasty (with a sub-randomization head-to-head trials of medical devices. Additionally, the applicant stated that
comparing provisional use of Zilver® The commenter stated that they defined given the differences between
PTX stenting to bare metal Zilver a pre-specified, post-hoc superiority EluviaTM’s paclitaxel delivery
stenting in patients experiencing an analysis before evaluation of the clinical mechanisms and other peripheral
acute failure of percutaneous trial results, the non-inferiority and paclitaxel-coated devices, it would be
transluminal angioplasty (PTA)). The subsequent superiority testing more appropriate to examine safety
commenter believed that these 5-year methodology and results are not considerations and data for Eluvia
data demonstrate that the superiority of subjected to bias. The commenter relative to products with similar
the use of the Zilver® PTX stent argued that the pre-specified success mechanisms of action and dose levels.
demonstrated at 12 and 24 months is criteria for superiority used the same The applicant provides the TAXUS
maintained through 5 years compared to coronary stent as such an appropriate
logic as the pre-specified success
PTA and provisional bare metal comparator, stating that Eluvia and
criteria for non-inferiority. The
stenting, and actually increases rather TAXUS are similar in design intent and
commenter stated: ‘‘Eluvia will be
than decreases over time. The mechanism of action. In support, the
concluded to be superior to Zilver PTX
commenter also believed that, given that applicant provided additional data
for device effectiveness if the one-sided
these stent devices are permanent showing a 5-year all-cause mortality
lower 95 percent confidence bound on
implants and they are used to treat a observed between paclitaxel-eluting and
the difference between treatment groups
chronic disease, long-term data are bare metal stents. The applicant also
in 12-month primary patency is greater
important to fully understand an SFA stated that coronary and peripheral
than zero.’’ The commenter believes that
stent’s clinical benefits. The commenter atherosclerotic lesions have similar
stated that with 5-year data available to the more stringent one-sided lower 97.5
percent confidence bound (shown as disease presentation and the same
support the ongoing safety and antiproliferative impact of paclitaxel on
effectiveness of the use of the Zilver® two-sided 95 percent confidence
interval on the difference between the lesions regardless of vessel bed. The
PTX stent, but no such corresponding applicant recommends that signals for
data available for the use of the treatment groups) was observed to be
greater than zero and the corresponding any potential long-term systemic effects
EluviaTM stent, it seems incongruous to of targeted paclitaxel eluted from a stent
suggest that the use of the EluviaTM p-value was 0.0144. The commenter
also provided that the aforementioned polymer matrix would be apparent in
stent results in a substantial clinical patients treated with TAXUS. As
improvement compared to the Zilver® data were published in The Lancet
following its rigorous peer-review opposed to the meta-analysis and the
PTX stent. resulting FDA panel analysis, the
The commenter further stated that, in process, suggesting that the claims are
not misleading and are supported by applicant believes that data on TAXUS
addition to the limited long-term data can be used to gauge potential system
available for the EluviaTM stent, there is valid scientific evidence. The
also a lack of clinical data for the use commenters also claimed that clinical 44 Katsanos, K., Spiliopoulos, S., Kitrou, P.,
of the EluviaTM stent to confirm the guidelines support performing a pre- Krokidis, M., & Karnabatidis, D. (2018). Risk of
benefit of the device outside of a strictly specified post-hoc analysis given Death Following Application of Paclitaxel-Coated
controlled clinical study population. specific requirements, that they believe Balloons and Stents in the Femoropopliteal Artery
they met. of the Leg: A Systematic Review and Meta-Analysis
The commenter stated that, in contrast, of Randomized Controlled Trials. Journal of the
the Zilver® PTX stent has demonstrated Comment: Two commenters American Heart Association, 7(24). https://doi.org/
comparable outcomes across a broad mentioned the meta-analysis of 10.1161/jaha.118.011245.
effects of paclitaxel eluted from Eluvia. FDA panel meeting on June 19, 2019. infrapopliteal. We have continued to
The applicant argues that the TAXUS The applicant states that 1-year trial closely follow FDA’s guidance and
stent’s safety and effects has been results, published in The Lancet, recommendations for the use of
extensively studied with demonstrated a 50 percent reduction in paclitaxel-coated balloons and
more than 14 years of commercial TLRs and 2-year data demonstrated a paclitaxel-eluting stents for PAD, with
experience and clinical trial data out to statistically significantly (p-value not details provided below.
10 years 45 46 47 48 in patients with provided) lower rate of repeat re- On June 19–20, 2019, FDA convened
coronary implants and 5 years for those interventions at 2 years compared to a public meeting of the Circulatory
with infrapopliteal implants. The Zilver PTX. The applicant states that the System Devices Panel of the Medical
applicant then recognizes that mortality clinical impact of fewer TLR procedures Devices Advisory Committee to discuss,
rates for patients treated for peripheral is significant and therefore demonstrates analyze, and make recommendations on
artery disease (PAD) are not directly substantial clinical improvement. the topic of a potential late mortality
comparable to rates for patients with The applicant also addressed signal after treatment of PAD in the
coronary artery or infrapopliteal disease concerns regarding hospital femoropopliteal artery with paclitaxel-
due to appreciable differences in readmissions. Specifically, the applicant coated balloons and paclitaxel-eluting
baseline risk. The applicant states that stated that in the NTAP Town Hall stents. The Panel concluded that a late
an additive effect due to low dose Eluvia Meeting, they presented 12- mortality signal associated with the use
paclitaxel elution over time, if it exists, month readmission rates for Eluvia (3.9 of paclitaxel-coated devices to treat
would have been observed in patients percent) and Zilver PTX (7.1 percent), femoropopliteal PAD was present. With
receiving treatment in these vessel beds. with a self-reported p-value of 0.1369. that, the Panel and FDA cautiously
In regards to the meta-analysis and the The applicant argues that statistical interpreted the magnitude of the signal
risk of late mortality, the applicant significance of the 12-month due to multiple limitations in the
further argues that understanding readmission rates should not be available data including: Wide
possible effects of paclitaxel exposure is expected to be statistically significant confidence intervals due to a small
not possible without complete analysis due to the small number of patients. sample size, pooling of studies of
of uniformly re-adjudicated patient level They conclude their response by stating different paclitaxel-coated devices that
data, particularly with treatment arm that the data suggests a lower patient were not intended to be combined,
crossover and previous interventions or and health system burden for substantial amounts of missing study
subsequent reinterventions with rehospitalization of patients for data, no clear evidence of a paclitaxel
paclitaxel-coated devices, which EluviaTM versus patients for Zilver PTX. dose effect on mortality, and no
occurred in the analyzed studies. Additionally, the applicant responded identified pathophysiologic mechanism
The applicant also provided to concerns regarding long-term data for the late deaths. The Panel and FDA
responses to several comments that and real-world evidence, stating that further concluded that additional
CMS noted in the CY 2020 OPPS/ASC due to the nature of the transitional clinical study data are needed to fully
proposed rule that were originally pass-through status requirements for evaluate the late mortality signal.
mentioned during and following the medical devices, EluviaTM is new to the As of August 7, 2019,50 FDA
NTAP Town Hall meeting (84 FR market and would no longer meet the continues to actively work with the
39479). In the CY 2020 OPPS/ASC newness criterion if the applicant were manufacturers and investigators on
proposed rule, CMS noted a comment to wait until 5-year data are available. developing additional clinical evidence
that showed concern over the EluviaTM The applicant further stated that to better assess the long-term safety of
IMPERIAL study’s citation of a reduced Medicare NTAP precedent suggests that paclitaxel-coated devices. They
rate of ‘‘Subsequent Therapeutic one-year peer reviewed published continue to assert that data could
Interventions’’. The applicant states that results are sufficient to prove substantial
potentially suggest that paclitaxel-
the use of the term ‘‘Subsequent clinical improvement, given that at the
coated balloons and stents may improve
Therapeutic Interventions’’ was used as time of Zilver PTX’s NTAP approval
blood flow to the legs and decrease the
a lay explanation for target lesion they only provided 12-month data
likelihood of repeat procedures to
revascularization. The applicant then published in peer-reviewed literature.49
reopen blocked blood vessels compared
states that it has recently obtained and The applicant further argues that
to uncoated devices. However, they also
analyzed IMPERIAL trial 2-year TLR waiting for a substantial amount of real-
continue to stress the importance of
results, which they also released at the world evidence for the use of the
clinicians weighing potential benefits of
EluviaTM drug-eluting stent would
the paclitaxel-coated devices with the
45 Yamaji K, Raber L, Zanchin T, et al. Ten-year disqualify the technology for the
clinical outcomes of first-generation drug-eluting transitional pass-through consideration, potential risks, including late mortality.
stents: The Sirolimus-Eluting vs. Paclitaxel-Eluting After consideration of public
as the technology would no longer be
Stents for Coronary Revascularization (SIRTAX) comments and the latest available
VERY LATE trial. Eur Heart J. 2016;37(45):3386– considered new by the time the data are
information from FDA advisory panel,
3395. available.
46 Ormiston JA, Charles O, Mann T, et al. Final
Response: We appreciate the we note that FDA’s panel’s has
5-year results of the TAXUS ATLAS, TAXUS comments. We are aware of FDA’s continued to review data that has
ATLAS Small Vessel, and TAXUS ATLAS Long
actions in regards to the meta-analysis identified a potentially concerning
Lesion clinical trials of the TAXUS Liberte signal of increased long-term mortality
paclitaxel-eluting stent in de-novo coronary artery of paclitaxel devices and the late
lesions. Coron Artery Dis. 2013;24(1):61–68. mortality signal in patients treated for in study subjects treated with paclitaxel-
47 Kereiakes DJ, Cannon LA, Dauber I, et al. Long-
PAD with paclitaxel-coated balloons coated products compared to patients
term follow-up of the platinum chromium TAXUS
and paclitaxel-eluting stents. We agree treated with uncoated devices. We also
Element (ION) stent: The PERSEUS Workhorse and note that FDA determined that the
Small Vessel trial five-year results. Catheter with the applicant that mortality rates
Cardiovasc Interv. 2015;86(6):994–1001. for patients treated for peripheral artery analysis revealed no clear evidence of a
48 Stone GW, Ellis SG, Colombo A, et al. Long-
disease are not directly comparable to 50 https://www.fda.gov/medical-devices/letters-
term safety and efficacy of paclitaxel-eluting stents
final 5-year analysis from the TAXUS Clinical Trial
rates for patients with coronary artery or health-care-providers/august-7-2019-update-
Program. JACC Cardiovasc Interv. 2011;4(5):530– treatment-peripheral-arterial-disease-paclitaxel-
542. 49 84 FR 39479. coated-balloons-and-paclitaxel.
paclitaxel dose effect on mortality. PTOA include intra-articular fractures the device eligibility requirements of
While FDA continues to further evaluate and meniscal, ligamentous and chondral § 419.66(b)(4) because it is not an
the increased long-term mortality signal injuries.53 The ankle is cited as the most instrument, apparatus, implement, or
and its impact on the overall benefit-risk affected joint, reportedly accounting for items for which depreciation and
profile of these devices, we remain 54 to 78 percent of over 300,000 injuries financing expenses are recovered, and it
concerned that we do not have enough occurring in the USA annually. The is not a supply or material furnished
information to determine that the applicant stated that autologous bone incident to a service.
EluviaTM device represents a substantial graft has often been used in ankle The criteria for establishing new
clinical improvement over existing arthrodesis. Autologous bone is device categories are specified at
devices. Therefore, we are not retrieved from a donor site, which may § 419.66(c). The first criterion, at
approving the EluviaTM device for CY require an incision separate from the § 419.66(c)(1), provides that CMS
2020 device transitional payment. We arthrodesis.54 The applicant stated that, determines that a device to be included
will continue to monitor any new in these procedures, harvested in the category is not appropriately
information and/or recommendations as autologous bone graft is implanted to described by any of the existing
they become available. stimulate healing between the bones categories or by any category previously
across a diseased joint. The applicant in effect, and was not being paid for as
(7) AUGMENT® Bone Graft an outpatient service as of December 31,
further stated that the procedures may
Wright Medical submitted an require the use of synthetic bone 1996. We have not identified an existing
application for a new device category substitutes to fill the bony voids or gaps pass-through payment category that
for transitional pass-through payment or to serve as an alternative to the describes the AUGMENT® Bone Graft.
status for the AUGMENT® Bone Graft. autograft where autograft is not feasible. The applicant proposed a category
The applicant describes AUGMENT® The applicant stated that the descriptor for the AUGMENT® of
Bone Graft as a device/drug indicated AUGMENT® Bone Graft removes the ‘‘rhPDGF–BB and b-TCP as an
for use as an alternative to autograft in need for autologous retrieval. The alternative to autograft in arthrodesis of
arthrodesis of the ankle and/or hindfoot applicant noted that during the the ankle and/or hindfoot.’’
where the need for supplemental graft procedure, the surgeon prepares the We did not receive any public
material is required. The applicant joint for the graft application and locates comments on these issue. We continue
stated that the product has two any potential bony defect, then applying to believe that there is no existing pass-
components: Recombinant human and packing the AUGMENT® Bone Graft through category that describes
platelet-derived growth factor-BB into the joint defects intended for AUGMENT® Bone Graft and have
(rhPDGF–BB) solution (0.3 mg/mL) and arthrodesis. determined that AUGMENT® Bone Graft
Beta-tricalcium phosphate (b-TCP) With respect to the newness criterion meets this eligibility criterion.
granules (1000–2000 mm). The two at § 419.66(b)(1), FDA granted the The second criterion for establishing
components are combined at the point AUGMENT® Bone Graft premarket a device category, at § 419.66(c)(2),
of use and applied to the surgical site. approval on September 1, 2015. The provides that CMS determines that a
The beta-TCP provides a porous application for a new device category device to be included in the category
osteoconductive scaffold for new bone for transitional pass-through payment has demonstrated that it will
growth and the rhPDGF–BB, which act status for the AUGMENT® Bone Graft substantially improve the diagnosis or
as an osteoinductive chemo-attractant was received May 31, 2018, which is treatment of an illness or injury or
and mitogen for cells involved in within 3 years of the date of the initial improve the functioning of a malformed
wound healing and through promotion FDA approval or clearance. We invited body part compared to the benefits of a
of angiogenesis. public comments on whether the device or devices in a previously
According to the applicant, the AUGMENT® Bone Graft meets the established category or other available
AUGMENT® Bone Graft is indicated for newness criterion. treatment. The applicant claims that the
use in arthrodesis of the ankle and/or Comment: We received one comment AUGMENT® Bone Graft provides a
hindfoot due to osteoarthritis, post- from the manufacturer restating the date substantial clinical improvement over
traumatic arthritis (PTA), rheumatoid of their application and their initial autograft procedures by reducing pain at
arthritis, psoriatic arthritis, avascular FDA approval or clearance. the autograft donor site. With respect to
necrosis, joint instability, joint Response: As the application was this criterion, the applicant submitted
deformity, congenital defect or joint received within 3 years of the date of data that examined the use of autograft
arthropathy as an alternative to autograft the initial FDA approval or clearance, arthrodesis of the ankle and/or hind foot
in patients needing graft material. we believe that AUGMENT® Bone Graft and arthrodesis with the use of the
Osteoarthritis is the most common joint meets the newness criterion. AUGMENT® Bone Graft.
disease among middle aged and older With respect to the eligibility criterion In a randomized, nonblinded, placebo
individuals and has been shown to also at § 419.66(b)(3), according to the controlled, noninferiority trial of the
have health related mental and physical applicant, the use of the AUGMENT® AUGMENT® Bone Graft versus
disabilities, which can be compared to Bone Graft is integral to the service autologous bone graft, the AUGMENT®
the severity as patients with end-stage provided, is used for one patient only, arm showed equivalence bone bridging
hip arthritis.51 Additionally, post- comes in contact with human skin, and as demonstrated by CT, pain on weight
traumatic arthritis develops after an is applied in or on a wound or other bearing, The American Orthopaedic
acute direct trauma to the joint and can skin lesion. The applicant also claimed Foot & Ankle Society Ankle-Hindfoot
cause 12 percent of all osteoarthritis that the AUGMENT® Bone Graft meets (AOFAS—AHS) score, and the Foot
cases.52 Common causes leading to Function Index to autologous bone graft.
Musculoskeletal Diseases. RMD open, 2(2), The study noted that patients
51 Greaser M, Ellington JK. 2014. ‘‘Ankle e000279. doi:10.1136/rmdopen–2016–000279. experienced significantly decreased (in
arthritis.’’ Journal of Arthritis, 3:129. doi:10.4172/ 53 Ibid.
fact no) pain due to elimination of the
2167-7921.1000129. 54 Lareau, Craig R. et al. 2015.’’Does autogenous
52 Punzi, Leonardo et al. 2016. ‘‘Post-traumatic bone graft work? A logistic regression analysis of
donor site procedure. In the autograft
arthritis: overview on pathogenic mechanisms and data from 159 papers in the foot and ankle group, at 6 months, 18/142 patients (13
role of inflammation.’’ Rheumatic & literature.’’ Foot and Ankle Surgery. 21 (3):150–59. percent) experienced pain >20 mm (of
100 mm) on the Visual Analog Scale Augment® Bone Graft may outweigh its PMA approval order to be submitted in
(VAS) at the autograft donor site as potential benefits. Q4 2019.
compared to 0/272 in the AUGMENT® We invited public comments on In response to our concern about
Bone Graft group. At 12 months, 13/142 whether the AUGMENT® Bone Graft potential safety and adverse event rates,
autograft patients (9 percent) had pain meets the substantial clinical the applicant stated that available data
defined as >20 mm VAS as compared to improvement criterion. demonstrates that the benefits of
0/272 AUGMENT® patients.55 The VAS Comment: We received several AUGMENT® outweigh the risks.
has patients mark a visual comments in regards to our inquiry of Specifically, the applicant stated that
representation of pain on a ruler based whether or not RIA is an appropriate although the reported percentage of
scale from 1 to 100. The measured comparator to AUGMENT® Bone Graft. infection rates outlined in the FDA’s
distance (in mm) on the 10-cm line Specifically, the applicant asserted that Summary of Safety and Effectiveness
between the ‘‘no pain’’ anchor and the the standard of care has been autograft, Data were higher for the AUGMENT®
patient’s mark represents the level of as evidenced by peer-review literature, versus autograft, this is due to various
pain. We were concerned that we are a review of claims, and randomized infections unrelated to ankle and
unable to sufficiently determine controlled trials. The commenters hindfoot arthrodesis. The applicant
substantial clinical improvement using further asserted that the RIA technique focused on infections related to the
the provided data, given that a is another way to harvest autograft, surgical support and commented that
comparison to alternatives to autologous requires a separate incision, and is not there was a dramatically lower infection
bone graft, such as the reamer-irrigator- appropriate given the volume of graft rate, not significantly different between
aspirator (RIA) technique were not needed for ankle and hindfoot AUGMENT® versus autograft (p =
evaluated. Specifically, the RIA arthrodesis. The applicant further 0.447). The applicant reported that
technique has been suggested in a argued that given that the RIA technique surgical site infections occurred in 7
number of studies to be a viable still requires a separate incision, the percent of AUGMENT® subjects and 9.2
alternative to bone autograft, because concerns surrounding the second percent in traditional autograft
autogenous bone graft can be readily procedure, including pain and potential procedure subjects. The applicant also
obtained without the need for additional complications, would still apply. stated that it is common when studying
incisions, therefore eliminating pain a novel therapy against an active
Finally, the applicant asserted that the
from an incisional site.56 Another comparator that is known to be safe and
RIA technique has additional risks and
concern was the time period of the effective to use a non-inferiority study.
complications, including: A steep
study because certain ankle arthrodesis The applicant also stated that they
learning curve for surgeons with the
complications such as ankle conducted an additional analysis of the
potential for technical errors creating
replacement and repeat arthrodesis can IDE trial data to determine the impact of
risk of potential complications;58 select
happen more than two years after the graft type (AUGMENT® Bone Graft
populations for whom the technique is
initial surgery.57 A long-term study of at versus autograft) and subject age (over
not appropriate, including patients with
least 60 months is currently underway 65 vs those 65 and younger) on fusion
osteoporosis and osteopenia, as well as
in order to assess long-term safety and outcomes.63 The applicant believed that
efficacy, looking at the following 4 elderly patients;59 and, risk for fractures,
penetration of the anterior cortex, the data confirm results of prior studies
primary outcomes: bone bridging as that have found that autograft tissue
demonstrated by CT, pain on weight violation of the knee joint, blood loss,
and pressure emboli. 60 61 62 quality is affected by age. The applicant
bearing, The American Orthopaedic suggested that while AUGMENT® was
Foot & Ankle Society Ankle-Hindfoot The applicant also commented on
concerns regarding long-term outcomes. non-inferior to autograft overall, the
(AOFAS—AHS) score, and the Foot
In the CY 2020 OPPS/ASC proposed elderly population data shows better
Function Index. We believe that this
rule, we noted a potential lack of data odds of fusion success with
long-term study is necessary for
on AUGMENT® beyond 2 years after the AUGMENT® compared with autograft.
meaningful information about long-term
efficacy of the Augment® Bone Graft. initial procedure. In response, the Response: We appreciate the
Further, there was a notable difference applicant submitted information on additional information and analysis
in the infection rate, musculoskeletal ongoing longer-term post-market provided by the applicant and other
and tissue disorders, and pain in surveillance data for AUGMENT®. stakeholders. After reviewing the
extremity for those in the AUGMENT® Specifically, the applicant describes additional information provided by the
Bone Graft group. These findings were FDA post-market approval studies as a applicant and other stakeholders
unfortunately not tested for significance post-market requirement for the FDA addressing our concerns raised in the
and also were not necessarily focused CY 2020 OPPS/ASC proposed rule, we
on relevance to the procedure. Should 58 Haubruck P, Ober J, Heller R, Miska M, agree with the applicant that
these be significant and related to the Schmidmaier G, Tanner MC (2018) Complications AUGMENT® provides a substantial
device, these findings would suggest
and risk management in the use of the reaming- clinical improvement by significantly
irrigator-aspirator (RIA) system: RIA is a safe and reducing, or eliminating, chronic pain
that the adverse outcomes due to the reliable method in harvesting autologous bone graft.
PLoS ONE 13(4): e0196051. (measured at > 20mm on VAS)
55 DiGiovanni CW, Lin SS, Baumbauer JF, et al. 59 Ibid. associated with the autograft donor site
2013. ‘‘Recombinant Human Platelet-Derived 60 Dimitriou R, Mataliotakis GI, Angoules AG, et with the elimination of the donor site
Growth Factor-BB and Beta-Tricalcium Phosphate al. Complications following autologous bone graft procedure, at 6 months and 12 months.
(rhPDGF–BB/b-TCP): An Alternative to Autogenous harvesting from the iliac crest and using the RIA: We also note that in subjects 65+,
Bone Graft.’’ J Bone Joint Surg Am., 95: 1184–92. a systematic review. Injury. 2011 Sep;42 Suppl
56 Herscovici, D., Scaduto, J.M. 2012. ‘‘Use of the 2:S3–15. AUGMENT® was more than twice as
reamer–irrigator–aspirator technique to obtain 61 See Complications and risk management in the
autograft for ankle and hindfoot arthrodesis.’’ The use of the reaming-irrigator-aspirator (RIA) system: 63 Haddad SL, Berlet GC, Baumhauer JF, et al.
Journal of Bone & Joint Surgery. 94–B:75–9. RIA is a safe and reliable method in harvesting Impact of patient age and graft type on fusion
57 Stavrakis, AL., SooHoo, NF. 2016. ‘‘Trends in autologous bone graft, supra. following ankle and hindfoot arthrodesis.
complication rates following ankle arthrodesis and 62 See Use of the reamer–irrigator–aspirator Combined Australia & New Zealand Orthopaedic
total ankle replacement.’’ The Journal of Bone & technique to obtain autograft for ankle and hindfoot Foot & Ankle Societies Conference, Surfers
Joint Surgery. JBJS 1453–1458. arthrodesis, supra. Paradise, Queensland, Australia, 2019
likely as autograft to result in fusion.64 portion of the APC payment amount for devices should be established. One of
Finally, after analyzing the additional the related service by at least 25 percent, these criteria, at § 419.66(c)(2), states
data provided through public comment, which means that the device cost needs that CMS determines that a device to be
we believe that AUGMENT® will to be at least 125 percent of the offset included in the category has
provide a substantial clinical amount (the device-related portion of demonstrated that it will substantially
improvement by reducing chronic pain the APC found on the offset list). The improve the diagnosis or treatment of an
and also reducing complications. estimated average reasonable cost of illness or injury or improve the
The third criterion for establishing a $6,020.22 for AUGMENT® Bone Graft functioning of a malformed body part
device category, at § 419.66(c)(3), exceeds the cost of the device-related compared to the benefits of a device or
requires us to determine that the cost of portion of the APC payment amount for devices in a previously established
the device is not insignificant, as the related service of $4,553.29 by at category or other available treatment.
described in § 419.66(d). Section least 25 percent (($6,020.22/$4,553.29) × CMS considers the totality of the
419.66(d) includes three cost 100 = 132 percent). Therefore, we substantial clinical improvement claims
significance criteria that must each be believe AUGMENT® Bone Graft meets and supporting data, as well as public
met. The applicant provided the the second cost significance comments, when evaluating this aspect
following information in support of the requirement. of each application. CMS summarizes
cost significance requirements. The The third cost significance each applicant’s claim of substantial
applicant stated that the use of the requirement, at § 419.66(d)(3), provides clinical improvement as part of its
AUGMENT® Bone Graft would be that the difference between the discussion of the entire application in
reported with CPT code 27870 estimated average reasonable cost of the the relevant proposed rule, as well as
(Arthrodesis, ankle, open), which is devices in the category and the portion any concerns regarding those claims. In
assigned to APC 5115 (Level 5 of the APC payment amount for the the relevant final rule for the OPPS,
Musculoskeletal Procedures). To meet device must exceed 10 percent of the CMS responds to public comments and
the cost criterion for device pass- APC payment amount for the related discusses its decision to approve or
through payment status, a device must service. The difference between the deny the application for separate
pass all three tests of the cost criterion estimated average reasonable cost of transitional pass-through payments.
for at least one APC. For our $6,020.22 for the AUGMENT® Bone Over the years, applicants and
calculations, we used APC 5115, which Graft and the portion of the APC commenters have indicated that it
has a CY 2019 payment rate of payment amount for the device of would be helpful for CMS to provide
$10,122.92. Beginning in CY 2017, we $4,553.29 exceeds the APC payment greater guidance on what constitutes
calculate the device offset amount at the amount for the related service of ‘‘substantial clinical improvement.’’ In
HCPCS/CPT code level instead of the $10,122.92 by more than 10 percent the FY 2020 IPPS/LTCH PPS proposed
APC level (81 FR 79657). CPT code (($6,020.22 ¥ $4,553.29)/$10,122.92 × rule (84 FR 19368 through 19371), we
27870 had a device offset amount of 100 = 15 percent). Therefore, we believe requested information on the substantial
$4,553.29. According to the applicant, that AUGMENT® Bone Graft meets the clinical improvement criterion for OPPS
the cost of the AUGMENT® Bone Graft third cost significance test. We invited transitional pass-through payments for
is $3,077 per device/drug combination. public comments on whether the devices and stated that we were
The applicant further provided a AUGMENT® Bone Graft meets the considering potential revisions to that
weighted average cost of the graft, device pass-through payment criteria criterion. In particular, we sought public
accounting for how many procedures discussed in this section, including the comments in the FY 2020 IPPS/LTCH
required one, two, or three AUGMENT® cost criterion. PPS proposed rule on the type of
Bone Graft device/drug kits, equaling a Comment: The applicant submitted a additional detail and guidance that the
weighted average cost of $6,020.22. comment in support of our cost analysis public and applicants for device pass-
Section 419.66(d)(1), the first cost of AUGMENT® Bone Graft. through transitional payment would
significance requirement, provides that Response: We thank the applicant for find useful (84 FR 19367 to 19369). This
the estimated average reasonable cost of their comment in support, and continue request for public comments was
devices in the category must exceed 25 to believe AUGMENT® Bone Graft intended to be broad in scope and
percent of the applicable APC payment meets the cost criteria. provide a foundation for potential
amount for the service related to the After consideration of the public rulemaking in future years. We refer
category of devices. The estimated comments we received, we are readers to the FY 2020 IPPS/LTCH
average reasonable cost of the approving the AUGMENT® Bone Graft proposed rule for the full text of this
AUGMENT® Bone Graft is more than 25 for device pass-through payment status request for information.
beginning in CY 2020. In addition to the broad request for
percent of the applicable APC payment
public comments for potential
amount 65 for the service related to the 3. Request for Information and Potential rulemaking in future years, in order to
category of devices of $10,122.92 Revisions to the OPPS Device Pass- respond to stakeholder feedback
(($6,020.22/$10,122.92) × 100 = 59 Through Substantial Clinical requesting greater understanding of
percent)). Therefore, we believe that the Improvement Criterion in the FY 2020 CMS’ approach to evaluating substantial
AUGMENT® Bone Graft meets the first IPPS/LTCH PPS Proposed Rule clinical improvement, we also solicited
cost significance requirement. As mentioned earlier, section comments from the public in the FY
The second cost significance 1833(t)(6) of the Act provides for pass- 2020 IPPS/LTCH PPS proposed rule (84
requirement, at § 419.66(d)(2), provides through payments for devices, and FR 19369 through 19371) on specific
that the estimated average reasonable section 1833(t)(6)(B) of the Act requires changes or clarifications to the IPPS and
cost of the devices in the category must CMS to use categories in determining OPPS substantial clinical improvement
exceed the cost of the device-related the eligibility of devices for pass- criterion that CMS might consider
64 Ibid.
through payments. Separately, the making in the FY 2020 IPPS/LTCH PPS
65 Due to the timing of the application, the criteria as set forth under § 419.66(c) are final rule to provide greater clarity and
AUGMENT® Bone Graft cost values were calculated used to determine whether a new predictability. We refer readers to the
using the 2018 proposed rule data. category of pass-through payment FY 2020 IPPS/LTCH PPS proposed rule
for complete details on those potential availability of which is in the best pathway for transformative medical
revisions. We noted that any responses interest of patients. devices. In situations where a new
to public comments we received on Some stakeholders over the years medical device is part of the
potential revisions to the OPPS have requested that devices that receive Breakthrough Devices Program and has
substantial clinical improvement marketing authorization and are part of received FDA marketing authorization
criterion in response to the FY 2020 an FDA expedited program be deemed (that is, the device has received PMA;
IPPS/LTCH PPS proposed rule, as well as representing a substantial clinical 510(k) clearance; or the granting of a De
as any revisions that might be adopted, improvement for purposes of OPPS Novo classification request), we
would be included in this final rule device pass-through status. We proposed an alternative outpatient pass-
with comment period and would inform understand this request would arguably through pathway to facilitate access to
future OPPS rulemaking. create administrative efficiency because this technology for Medicare
Comment: We received one comment the commenters currently view the two beneficiaries beginning with
addressing this RFI, which sets of criteria as the same, overlapping, applications received for pass-through
recommended that CMS demonstrate similar, or otherwise duplicative or payment on or after January 1, 2020.
greater flexibility in considering what unnecessary. We continue to believe that hospitals
constitutes substantial clinical The Administration is committed to should receive pass-through payments
improvement, including evidence addressing barriers to health care for devices that offer clear clinical
developed through data registries and innovation and ensuring Medicare improvement and that cost
evidence from markets outside the U.S. beneficiaries have access to critical and considerations should not interfere with
Response: We thank the commenter life-saving new cures and technologies patient access. In light of the criteria
for their response. We note that we that improve beneficiary health designation as a Breakthrough Device,
accept a wide range of data and other outcomes. As detailed in the President’s and because we recognize that such
evidence to help determine whether a FY 2020 Budget (we refer readers to devices may not have a sufficient
device meets the substantial clinical HHS FY 2020 Budget in Brief, Improve evidence base to demonstrate
improvement criterion. Medicare Beneficiary Access to substantial clinical improvement at the
Breakthrough Devices, pp. 84–85), HHS time of FDA marketing authorization,
4. Proposed Alternative Pathway to the
is pursuing several policies that will we proposed to amend the OPPS device
OPPS Device Pass-Through Substantial
instill greater transparency and transitional pass-through payment
Clinical Improvement Criterion for
consistency around how Medicare regulations to create an alternative
Transformative New Devices
covers and pays for innovative pathway to demonstrating substantial
Since 2001 when we first established technology. clinical improvement that would enable
the substantial clinical improvement Therefore, given the existence of the devices that receive FDA marketing
criterion, FDA programs for helping to current and past FDA programs for authorization and are part of the FDA
expedite the development and review of helping to expedite the development Breakthrough Devices Program to
transformative new devices that are and review of certain devices intended qualify for our quarterly approval
intended to treat or diagnose serious to treat or diagnose serious or life- process for device pass-through
diseases or conditions and address threatening or irreversibly debilitating payment under the OPPS for pass-
unmet medical needs (referred to, for diseases or conditions for which there is through payment applications received
purposes of this rule) as FDA’s an unmet medical need), we considered on or after January 1, 2020. With this
expedited programs) have continued to whether it would also be appropriate to proposal, OPPS device pass-through
evolve in tandem with advances in similarly facilitate access to these payment applicants for devices that
medical innovations and technology. transformative new technologies for have received FDA marketing
There is currently one FDA expedited Medicare beneficiaries taking into authorization and are part of the FDA
program for devices, the Breakthrough consideration that, at the time of Breakthrough Devices Program would
Devices Program. The 21st Century marketing authorization (that is, not be evaluated in terms of the current
Cures Act (Cures Act) (Pub. L. 144–255) Premarket Approval (PMA); 510(k) substantial clinical improvement
established the Breakthrough Devices clearance; or the granting of a De Novo criterion at § 419.66(c)(2) for the
Program to expedite the development of, classification request) for a product that purposes of determining device pass-
and provide for priority review of, is the subject of a FDA expedited through payment status, but would
medical devices and device-led program, the evidence base for continue to need to meet the other
combination products that provide for demonstrating substantial clinical requirements for pass-through payment
more effective treatment or diagnosis of improvement in accordance with CMS’ status in our regulation at § 419.66.
life-threatening or irreversibly current standard may not be fully Devices that have received FDA
debilitating diseases or conditions and developed. We also considered whether marketing authorization and are part of
which meet one of the following four FDA marketing authorization of a the Breakthrough Devices Program can
criteria: (1) That represent breakthrough product that is part of an FDA expedited be approved through the quarterly
technologies; (2) for which no approved program is evidence that the product is process and would be announced
or cleared alternatives exist; (3) that sufficiently different from existing through that process (81 FR 79655).
offer significant advantages over products for purposes of newness. Finally, we would include proposals
existing approved or cleared After consideration of these issues, regarding these devices and whether
alternatives, including the potential, and consistent with the pass-through payment status should
compared to existing approved Administration’s commitment to continue to apply in the next applicable
alternatives, to reduce or eliminate the addressing barriers to health care OPPS rulemaking cycle.
need for hospitalization, improve innovation and ensuring Medicare As such, we proposed to revise
patient quality of life, facilitate patients’ beneficiaries have access to critical and paragraph (c)(2) under § 419.66. Under
ability to manage their own care (such life-saving new cures and technologies proposed revised paragraph (c)(2), we
as through self-directed personal that improve beneficiary health proposed to establish an alternative
assistance), or establish long-term outcomes, we concluded that it would pathway where applications for device
clinical efficiencies; or (4) the be appropriate to develop an alternative pass-through payment status for new
medical devices received on or after earlier access to Breakthrough Devices Where we received a device pass-
January 1, 2020 that are a part of FDA’s can improve beneficiary health through application by the September
Breakthrough Devices Program and have outcomes support establishing this 2019 quarterly application deadline for
received FDA marketing authorization alternative pathway. While we a device that qualifies for the alternative
(that is, the device has received PMA, appreciate the commenter’s concern pathway and the device meets the other
510(k) clearance, or the granting of a De regarding potential negative incentives, criteria for device pass-through status,
Novo classification request) will not be we continue to believe that it is the device can be approved for pass-
evaluated for substantial clinical appropriate to facilitate beneficiary through status beginning on January 1,
improvement for the purposes of access to transformative new medical 2020. Similarly, devices for which we
determining device pass-through devices by establishing an alternative received a device pass-through
payment status. Under this proposed pathway for devices that receive FDA application prior to the December 2019
alternative pathway, a medical device marketing authorization through FDA’s quarterly deadline can receive pass-
that has received FDA marketing Breakthrough Devices Program, and not through status beginning April 1, 2020,
authorization (that is, has been to require substantial clinical assuming they qualify for the alternative
approved or cleared by, or had a De improvement as a requirement for pass- pathway and meet the other criteria for
Novo classification request granted by, through status for these devices because device pass-through status.
FDA) and that is part of FDA’s the evidence base to demonstrate In summary, we are finalizing our
Breakthrough Devices Program would substantial clinical improvement may proposal with the change to the effective
still need to meet the eligibility criteria not be completely developed at the time date suggested by commenters to
under § 419.66(b), the other criteria for of FDA marketing authorization for such establish an alternative pathway to the
establishing device categories under devices, which would delay their substantial clinical improvement
§ 419.66(c), and the cost criterion under eligibility for pass-through status. criterion for devices that have FDA
§ 419.66(d). We noted that this proposal In regards to expanding the Breakthrough Devices Program
aligns with a proposal in the FY 2020 alternative pathway to include pass- designation and have received FDA
IPPS/LTCH PPS proposed rule (84 FR through drugs and New Technology marketing authorization (that is, the
19371 through 19373) and final rule (84 APCs, we continue to believe that it is device has received PMA, 510(k)
FR 42292 through 42297) and will help appropriate to distinguish between clearance, or the granting of a De Novo
achieve the goals of expedited access to drugs and devices, while we continue to classification request) for devices
innovative devices to further reduce work on other initiatives for drug approved for transitional pass-through
administrative burden. affordability; a priority for this status effective on or after January 1,
Comment: MedPAC opposed our Administration. Importantly, substantial 2020.
proposal and stated that participation in clinical improvement is not a Devices Approved for Pass-Through
the FDA Breakthrough Device Program
requirement to be assigned to a New Status Under the Breakthrough Device
does not necessarily reflect
Technology APC or for drug pass- Alternative Pathway
improvements in outcomes or justify
through status, so it is not necessary to We received two device pass-through
increased payment for Medicare
waive such a criterion under either of applications by the September 2, 2019
beneficiaries. MedPAC expressed
these policies. Finally, we appreciate quarterly application deadline that have
concern that such a policy would
the commenters’ suggestion that we received FDA marketing authorization
provide inappropriate incentives for
should apply the alternative pathway to and a Breakthrough Devices designation
providers to use new technology
other types of FDA designations and from FDA and that qualify for
without proven safety or efficacy by
will continue to take those comments consideration under the alternative
allowing increased payment for the new
technology. into consideration for future pathway to the OPPS device pass-
Most commenters supported the rulemaking, where appropriate. through substantial clinical
proposal for an alternative pathway and Comment: Several commenters improvement criterion. These devices
offered suggestions that they thought suggested that we revise the effective meet the other criteria for device pass-
would enhance the proposal. date of the policy, and specifically through including the eligibility criteria
Specifically, commenters requested that requested that the policy be effective on under § 419.66(b), the criteria for
CMS expand the alternative pathway to or after January 1, 2020 for applications establishing device categories under
include other FDA designations, namely submitted prior to the September 2019 § 419.66(c), and the cost criterion under
the Expedited Access Pathway and the quarterly application submission § 419.66(d) and are approved for pass-
Regenerative Medicine Advanced deadline. through status beginning on January 1,
Therapy (RMAT) Designation. A Response: We thank the commenters 2020.
commenter requested that similar to the for their input. We agree with The devices include: (1) Optimizer®
IPPS policy, we also waive the newness commenters and do not believe System which is discussed earlier in
criterion under the alternative pathway. applicants with devices that would this section and approved under the
Commenters also requested that we qualify for the alternative pathway standard pathway, and (2)
expand the alternative pathway to New should be required to re-submit their ARTIFICIALIris® which is an iris
Technology APCs, drug pass-through pass-through applications after January prosthesis for the treatment of iris
payment, and non-opioid alternatives. 1, 2020 in order to be considered for the defects. The ARTIFICIALIris®
Finally, a number of commenters alternative pathway. Therefore, after application was received in June 2019
encouraged us to ensure coverage for considering the public comments we after the March 2019 quarterly deadline
devices that are approved under the received, we are finalizing a policy that for applications to be received in time
alternative pathway. the alternative pathway will apply for to be included in CY 2020 rulemaking.
Response: We appreciate the devices that will receive pass-through We are approving ARTIFICIALIris® for
commenters’ support for the alternative payments effective on or after January 1, transitional pass-through payment
pathway proposal. After reviewing the 2020 and we are revising paragraph under the alternative pathway for CY
public comments, we continue to (c)(2) under § 419.66 consistent with 2020. As previously stated, all
believe that the benefits of providing this final policy. applications that are preliminarily
approved upon quarterly review will We believe that a HCPCS code-level device policy—which includes the three
automatically be included in the next device offset is, in most cases, a better criteria listed above—to all device-
applicable OPPS annual rulemaking representation of a procedure’s device intensive procedures beginning in CY
cycle, therefore a discussion of this cost than an APC-wide average device 2015. We reiterated this position in the
application will be included in CY 2021 offset based on the average device offset CY 2016 OPPS/ASC final rule with
rulemaking. of all of the procedures assigned to an comment period (80 FR 70424), where
APC. Unlike a device offset calculated at we explained that we were finalizing
B. Device-Intensive Procedures the APC level, which is a weighted our proposal to continue using the three
1. Background average offset for all devices used in all criteria established in the CY 2007
of the procedures assigned to an APC, OPPS/ASC final rule with comment
Under the OPPS, prior to CY 2017, a HCPCS code-level device offset is period for determining the APCs to
device-intensive status for procedures calculated using only claims for a single which the CY 2016 device intensive
was determined at the APC level for HCPCS code. We believe that this policy will apply. Under the policies we
APCs with a device offset percentage methodological change results in a more adopted in CYs 2015, 2016, and 2017,
greater than 40 percent (79 FR 66795). accurate representation of the cost all procedures that require the
Beginning in CY 2017, CMS began attributable to implantation of a high- implantation of a device and meet the
determining device-intensive status at cost device, which ensures consistent above criteria are assigned device-
the HCPCS code level. In assigning device-intensive designation of intensive status, regardless of their APC
device-intensive status to an APC prior procedures with a significant device placement.
to CY 2017, the device costs of all the cost. Further, we believe a HCPCS code-
2. Device-Intensive Procedure Policy for
procedures within the APC were level device offset removes
CY 2019 and Subsequent Years
calculated and the geometric mean inappropriate device-intensive status for
device offset of all of the procedures had procedures without a significant device As part of CMS’ effort to better
to exceed 40 percent. Almost all of the cost that are granted such status because capture costs for procedures with
procedures assigned to device-intensive of APC assignment. significant device costs, in the CY 2019
APCs utilized devices, and the device Under our existing policy, procedures OPPS/ASC final rule with comment
costs for the associated HCPCS codes that meet the criteria listed below in period (83 FR 58944 through 58948), for
exceeded the 40-percent threshold. The section IV.B.1.b. of the CY 2020 OPPS/ CY 2019, we modified our criteria for
no cost/full credit and partial credit ASC proposed rule are identified as device-intensive procedures. We had
device policy (79 FR 66872 through device-intensive procedures and are heard from stakeholders that the criteria
66873) applies to device-intensive APCs subject to all the policies applicable to excluded some procedures that
and is discussed in detail in section procedures assigned device-intensive stakeholders believed should qualify as
IV.B.4. of the CY 2020 OPPS/ASC status under our established device-intensive procedures.
proposed rule. A related device policy methodology, including our policies on Specifically, we were persuaded by
was the requirement that certain device edits and no cost/full credit and stakeholder arguments that procedures
procedures assigned to device-intensive partial credit devices discussed in requiring expensive surgically inserted
APCs require the reporting of a device sections IV.B.3. and IV.B.4. of the CY or implanted devices that are not capital
code on the claim (80 FR 70422). For 2020 OPP/ASC proposed rule, equipment should qualify as device-
respectively. intensive procedures, regardless of
further background information on the
whether the device remains in the
device-intensive APC policy, we refer b. Use of the Three Criteria To Designate patient’s body after the conclusion of
readers to the CY 2016 OPPS/ASC final Device-Intensive Procedures the procedure. We agreed that a broader
rule with comment period (80 FR 70421
We clarified our established policy in definition of device-intensive
through 70426).
the CY 2018 OPPS/ASC final rule with procedures was warranted, and made
a. HCPCS Code-Level Device-Intensive comment period (82 FR 52474), where two modifications to the criteria for CY
Determination we explained that device-intensive 2019 (83 FR 58948). First, we allowed
procedures require the implantation of a procedures that involve surgically
As stated earlier, prior to CY 2017, the device and additionally are subject to inserted or implanted single-use devices
device-intensive methodology assigned the following criteria: that meet the device offset percentage
device-intensive status to all procedures • All procedures must involve threshold to qualify as device-intensive
requiring the implantation of a device implantable devices that would be procedures, regardless of whether the
that were assigned to an APC with a reported if device insertion procedures device remains in the patient’s body
device offset greater than 40 percent were performed; after the conclusion of the procedure.
and, beginning in CY 2015, that met the • The required devices must be We established this policy because we
three criteria listed below. Historically, surgically inserted or implanted devices no longer believe that whether a device
the device-intensive designation was at that remain in the patient’s body after remains in the patient’s body should
the APC level and applied to the the conclusion of the procedure (at least affect its designation as a device-
applicable procedures within that APC. temporarily); and intensive procedure, as such devices
In the CY 2017 OPPS/ASC final rule • The device offset amount must be could, nonetheless, comprise a large
with comment period (81 FR 79658), we significant, which is defined as portion of the cost of the applicable
changed our methodology to assign exceeding 40 percent of the procedure’s procedure. Second, we modified our
device-intensive status at the individual mean cost. criteria to lower the device offset
HCPCS code level rather than at the We changed our policy to apply these percentage threshold from 40 percent to
APC level. Under this policy, a three criteria to determine whether 30 percent, to allow a greater number of
procedure could be assigned device- procedures qualify as device-intensive procedures to qualify as device-
intensive status regardless of its APC in the CY 2015 OPPS/ASC final rule intensive. We stated that we believe
assignment, and device-intensive APCs with comment period (79 FR 66926), allowing these additional procedures to
were no longer applied under the OPPS where we stated that we would apply qualify for device-intensive status will
or the ASC payment system. the no cost/full credit and partial credit help ensure these procedures receive
more appropriate payment in the ASC device offset set at 41 percent for new code does not have a predecessor code
setting, which will help encourage the HCPCS codes describing procedures as defined by CPT, but describes a
provision of these services in the ASC requiring the implantation or insertion procedure that was previously described
setting. In addition, we stated that this of a medical device that did not yet have by an existing code, we use clinical
change would help to ensure that more associated claims data until claims data discretion to identify HCPCS codes that
procedures containing relatively high- are available to establish the HCPCS are clinically related or similar to the
cost devices are subject to the device code-level device offset for the new HCPCS code but are not officially
edits, which leads to more correctly procedures. This default device offset recognized as a predecessor code by
coded claims and greater accuracy in amount of 41 percent was not calculated CPT, and to use the claims data of the
our claims data. Specifically, for CY from claims data; instead, it was applied clinically related or similar code(s) for
2019 and subsequent years, we finalized as a default until claims data were purposes of determining whether or not
that device-intensive procedures will be available upon which to calculate an to apply the default device offset to the
subject to the following criteria: actual device offset for the new code. new HCPCS code (83 FR 58946).
• All procedures must involve The purpose of applying the 41-percent Clinically related and similar
implantable devices assigned a CPT or default device offset to new codes that procedures for purposes of this policy
HCPCS code; describe procedures that implant or are procedures that have little or no
• The required devices (including insert medical devices was to ensure clinical differences and use the same
single-use devices) must be surgically ASC access for new procedures until devices as the new HCPCS code. In
inserted or implanted; and claims data become available. addition, clinically related and similar
• The device offset amount must be As discussed in the CY 2019 OPPS/ codes for purposes of this policy are
significant, which is defined as ASC proposed rule and final rule with codes that either currently or previously
exceeding 30 percent of the procedure’s comment period (83 FR 37108 through describe the procedure described by the
mean cost (83 FR 58945). 37109 and 58945 through 58946, new HCPCS code. Under this policy,
In addition, to further align the respectively), in accordance with our claims data from clinically related and
device-intensive policy with the criteria policy stated above to lower the device similar codes are included as associated
used for device pass-through payment offset percentage threshold for claims data for a new code, and where
status, we finalized, for CY 2019 and procedures to qualify as device- an existing HCPCS code is found to be
subsequent years, that for purposes of intensive from greater than 40 percent to clinically related or similar to a new
satisfying the device-intensive criteria, a greater than 30 percent, for CY 2019 and HCPCS code, we apply the device offset
device-intensive procedure must subsequent years, we modified this percentage derived from the existing
involve a device that: policy to apply a 31-percent default clinically related or similar HCPCS
• Has received FDA marketing device offset to new HCPCS codes code’s claims data to the new HCPCS
authorization, has received an FDA describing procedures requiring the code for determining the device offset
investigational device exemption (IDE), implantation of a medical device that do percentage. We stated that we believe
and has been classified as a Category B not yet have associated claims data until that claims data for HCPCS codes
device by FDA in accordance with 42 claims data are available to establish the describing procedures that have minor
CFR 405.203 through 405.207 and HCPCS code-level device offset for the differences from the procedures
405.211 through 405.215, or meets procedures. In conjunction with the described by new HCPCS codes will
another appropriate FDA exemption policy to lower the default device offset provide an accurate depiction of the
from premarket review; from 41 percent to 31 percent, we
cost relationship between the procedure
• Is an integral part of the service continued our current policy of, in
and the device(s) that are used, and will
furnished; certain rare instances (for example, in
be appropriate to use to set a new code’s
• Is used for one patient only; the case of a very expensive implantable
device offset percentage, in the same
• Comes in contact with human device), temporarily assigning a higher
way that predecessor codes are used. If
tissue; offset percentage if warranted by
• Is surgically implanted or inserted a new HCPCS code has multiple
additional information such as pricing
(either permanently or temporarily); and predecessor codes, the claims data for
data from a device manufacturer (81 FR
• Is not either of the following: the predecessor code that has the
79658). Once claims data are available
(a) Equipment, an instrument, highest individual HCPCS-level device
for a new procedure requiring the
apparatus, implement, or item of this implantation of a medical device, offset percentage is used to determine
type for which depreciation and device-intensive status is applied to the whether the new HCPCS code qualifies
financing expenses are recovered as code if the HCPCS code-level device for device-intensive status. Similarly, in
depreciable assets as defined in Chapter offset is greater than 30 percent, the event that a new HCPCS code does
1 of the Medicare Provider according to our policy of determining not have a predecessor code but has
Reimbursement Manual (CMS Pub. 15– device-intensive status by calculating multiple clinically related or similar
1); or the HCPCS code-level device offset. codes, the claims data for the clinically
(b) A material or supply furnished In addition, in the CY 2019 OPPS/ related or similar code that has the
incident to a service (for example, a ASC final rule with comment period, we highest individual HCPCS level device
suture, customized surgical kit, scalpel, clarified that since the adoption of our offset percentage is used to determine
or clip, other than a radiological site policy in effect as of CY 2018, the whether the new HCPCS code qualifies
marker) (83 FR 58945). associated claims data used for purposes for device-intensive status.
In addition, for new HCPCS codes of determining whether or not to apply As we indicated in the CY 2019
describing procedures requiring the the default device offset are the OPPS/ASC proposed rule and final rule
implantation of medical devices that do associated claims data for either the new with comment period, additional
not yet have associated claims data, in HCPCS code or any predecessor code, as information for our consideration of an
the CY 2017 OPPS/ASC final rule with described by CPT coding guidance, for offset percentage higher than the default
comment period (81 FR 79658), we the new HCPCS code. Additionally, for of 31 percent for new HCPCS codes
finalized a policy for CY 2017 to apply CY 2019 and subsequent years, in describing procedures requiring the
device-intensive status with a default limited instances where a new HCPCS implantation (or, in some cases, the
insertion) of a medical device that do 36904 exceeds the 30-percent threshold code C1889 to recognize devices
not yet have associated claims data, and therefore, this procedure is assigned furnished during a device-intensive
such as pricing data or invoices from a device-intensive status for CY 2020. procedure that are not described by a
device manufacturer, should be directed Comment: One commenter stated that specific Level II HCPCS Category C-
to the Division of Outpatient Care, Mail the device offset for CPT code 53854 code. Reporting HCPCS code C1889
Stop C4–01–26, Centers for Medicare should be based on the predecessor with a device-intensive procedure will
and Medicaid Services, 7500 Security code of HCPCS code 0275T and that satisfy the edit requiring a device code
Boulevard, Baltimore, MD 21244–1850, CPT code 53854 should be assigned to be reported on a claim with a device-
or electronically at outpatientpps@ device-intensive status for CY 2020. intensive procedure. In the CY 2019
cms.hhs.gov. Additional information Response: We agree with the OPPS/ASC final rule with comment
can be submitted prior to issuance of an commenter that, in the absence of period, we revised the description of
OPPS/ASC proposed rule or as a public device cost statistics for a particular HCPCS code C1889 to remove the
comment in response to an issued procedure, we may use the predecessor specific applicability to device-intensive
OPPS/ASC proposed rule. Device offset code (in this case HCPCS code 0275T) procedures (83 FR 58950). For CY 2019
percentages will be set in each year’s to make a device-intensive and subsequent years, the description of
final rule. determination. However, we note that HCPCS code C1889 is ‘‘Implantable/
For CY 2020, we did not propose any the device-intensive percentage for insertable device, not otherwise
changes to our device-intensive policy. HCPCS code 0275T is below the 30 classified’’.
Comment: Some commenters noted percent threshold and, therefore, we are We did not propose any changes to
that CPT codes 22612 and 64912 had a not assigning CPT code 53854 device- this policy for CY 2020.
device-offset percentage greater than 30 intensive status for CY 2020. Comment: Several commenters
percent and should have been proposed The full listing of the proposed CY requested that CMS restore the device-
to have device-intensive status for CY 2020 device-intensive procedures can be to-procedure and procedure-to-device
2020. found in Addendum P to this CY 2020 edits. Additionally, some commenters
Response: We agree with commenters OPPS/ASC proposed rule (which is requested specific device edits for total
that CPT codes 22612 and 64912 were available via the internet on the CMS hip arthroplasty procedures and total
inadvertently omitted from Addendum website). knee arthroplasty procedures as well as
P and were not assigned device- device-intensive ‘‘C’’ HCPCS codes.
3. Device Edit Policy
intensive status in the CY 2020 OPPS/ Response: As we stated in the CY
ASC proposed rule. For the CY 2020 In the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66795), we 2015 OPPS/ASC final rule with
OPPS/ASC final rule with comment comment period (79 FR 66794), we
period, the device offset for both finalized a policy and implemented
claims processing edits that require any continue to believe that the elimination
procedures exceeds the 30 percent of device-to-procedure edits and
threshold and these procedures are of the device codes used in the previous
device-to-procedure edits to be present procedure-to-device edits is appropriate
assigned device-intensive status for CY due to the experience hospitals now
2020. on the claim whenever a procedure code
assigned to any of the APCs listed in have in coding and reporting these
Comment: One commenter requested
Table 5 of the CY 2015 OPPS/ASC final claims fully. More specifically, for the
that we assign HCPCS code C9752 a
rule with comment period (the CY 2015 most costly devices, we believe the C–
higher device offset percentage.
device-dependent APCs) is reported on APCs will reliably reflect the cost of the
Additionally, one commenter requested
the claim. In addition, in the CY 2016 device if charges for the device are
that we assign HCPCS code C9754 a
OPPS/ASC final rule with comment included anywhere on the claim. We
higher device offset percentage.
period (80 FR 70422), we modified our note that, under our current policy,
Response: We thank the commenters
previously existing policy and applied hospitals are still expected to adhere to
for their recommendations and their
the device coding requirements the guidelines of correct coding and
submission of device pricing
exclusively to procedures that require append the correct device code to the
information. After reviewing the pricing
the implantation of a device that are claim when applicable. We also note
information provided by commenters,
assigned to a device-intensive APC. In that, as with all other items and services
we believe a default device offset
the CY 2016 OPPS/ASC final rule with recognized under the OPPS, we expect
percentage of 31 percent appropriately
comment period, we also finalized our hospitals to code and report their costs
reflects the device costs for these
policy that the claims processing edits appropriately, regardless of whether
procedures for CY 2020.
Comment: One commenter requested are such that any device code, when there are claims processing edits in
we assign device-intensive status for reported on a claim with a procedure place. Further, we also note that our
CPT codes 36904, 36905, 50590, and assigned to a device-intensive APC current device edit policy requires
HCPCS code 0275T for CY 2020. (listed in Table 42 of the CY 2016 OPPS/ hospitals to report a device for certain
Response: Using the most currently ASC final rule with comment period (80 device-intensive procedures, which
available data for this CY 2020 OPPS/ FR 70422)) will satisfy the edit. include total knee arthroplasty, device-
ASC final rule with comment period, we In the CY 2017 OPPS/ASC final rule intensive ‘‘C’’ HCPCS codes, as well as
have determined that the device offset with comment period (81 FR 79658 total hip arthroplasty beginning in CY
percentages for CPT codes 36905, through 79659), we changed our policy 2020.
50590, and HCPCS code 0275T are not for CY 2017 and subsequent years to 4. Adjustment to OPPS Payment for No
above the 30-percent threshold and, apply the CY 2016 device coding Cost/Full Credit and Partial Credit
therefore, these procedures are not requirements to the newly defined Devices
eligible to be assigned device-intensive device-intensive procedures. For CY
status. Additionally, based on the most 2017 and subsequent years, we also a. Background
currently available data for this CY 2020 specified that any device code, when To ensure equitable OPPS payment
OPPS/ASC final rule with comment reported on a claim with a device- when a hospital receives a device
period, we have determined that the intensive procedure, will satisfy the without cost or with full credit, in CY
device offset percentage for CPT code edit. In addition, we created HCPCS 2007, we implemented a policy to
reduce the payment for specified Manufacturer for a Replaced Medical telescope prosthesis including removal
device-dependent APCs by the Device) when the hospital receives a of crystalline lens or intraocular lens
estimated portion of the APC payment credit for a replaced device that is 50 prosthesis), which is the only code
attributable to device costs (that is, the percent or greater than the cost of the assigned to APC 5494 (Level 4
device offset) when the hospital receives device. For CY 2014, we also limited the Intraocular Procedures) (80 FR 70388).
a specified device at no cost or with full OPPS payment deduction for the We noted that, as stated in the CY 2017
credit (71 FR 68071 through 68077). applicable APCs to the total amount of OPPS/ASC proposed rule (81 FR 45656),
Hospitals were instructed to report no the device offset when the ‘‘FD’’ value we proposed to reassign the procedure
cost/full credit device cases on the code appears on a claim. For CY 2015, described by CPT code 0308T to APC
claim using the ‘‘FB’’ modifier on the we continued our policy of reducing 5495 (Level 5 Intraocular Procedures)
line with the procedure code in which OPPS payment for specified APCs when for CY 2017, but it would be the only
the no cost/full credit device is used. In a hospital furnishes a specified device procedure code assigned to APC 5495.
cases in which the device is furnished without cost or with a full or partial The payment rates for a procedure
without cost or with full credit, credit and to use the three criteria described by CPT code 0308T
hospitals were instructed to report a established in the CY 2007 OPPS/ASC (including the predecessor HCPCS code
token device charge of less than $1.01. final rule with comment period (71 FR C9732) were $15,551 in CY 2014,
In cases in which the device being 68072 through 68077) for determining $23,084 in CY 2015, and $17,551 in CY
inserted is an upgrade (either of the the APCs to which our CY 2015 policy 2016. The procedure described by CPT
same type of device or to a different will apply (79 FR 66872 through 66873). code 0308T is a high-cost device-
type of device) with a full credit for the In the CY 2016 OPPS/ASC final rule intensive surgical procedure that has a
device being replaced, hospitals were with comment period (80 FR 70424), we very low volume of claims (in part
instructed to report as the device charge finalized our policy to no longer specify because most of the procedures
the difference between the hospital’s a list of devices to which the OPPS described by CPT code 0308T are
usual charge for the device being payment adjustment for no cost/full performed in ASCs). We believe that the
implanted and the hospital’s usual credit and partial credit devices would median cost is a more appropriate
charge for the device for which it apply and instead apply this APC measure of the central tendency for
received full credit. In CY 2008, we payment adjustment to all replaced purposes of calculating the cost and the
expanded this payment adjustment devices furnished in conjunction with a payment rate for this procedure because
policy to include cases in which procedure assigned to a device-intensive the median cost is impacted to a lesser
hospitals receive partial credit of 50 APC when the hospital receives a credit degree than the geometric mean cost by
percent or more of the cost of a specified for a replaced specified device that is 50 more extreme observations. We stated
device. Hospitals were instructed to percent or greater than the cost of the that, in future rulemaking, we would
append the ‘‘FC’’ modifier to the device. consider proposing a general policy for
procedure code that reports the service the payment rate calculation for very
b. Policy for No Cost/Full Credit and
provided to furnish the device when low-volume device-intensive APCs (80
Partial Credit Devices
they receive a partial credit of 50 FR 70389).
In the CY 2017 OPPS/ASC final rule For CY 2017, we proposed and
percent or more of the cost of the new
with comment period (81 FR 79659 finalized a payment policy for low-
device. We refer readers to the CY 2008
through 79660), for CY 2017 and volume device-intensive procedures
OPPS/ASC final rule with comment
subsequent years, we finalized our that is similar to the policy applied to
period for more background information
policy to reduce OPPS payment for the procedure described by CPT code
on the ‘‘FB’’ and ‘‘FC’’ modifiers
device-intensive procedures, by the full 0308T in CY 2016. In the CY 2017
payment adjustment policies (72 FR
or partial credit a provider receives for OPPS/ASC final rule with comment
66743 through 66749).
a replaced device, when a hospital period (81 FR 79660 through 79661), we
In the CY 2014 OPPS/ASC final rule furnishes a specified device without established our current policy that the
with comment period (78 FR 75005 cost or with a full or partial credit. payment rate for any device-intensive
through 75007), beginning in CY 2014, Under our current policy, hospitals procedure that is assigned to a clinical
we modified our policy of reducing continue to be required to report on the APC with fewer than 100 total claims
OPPS payment for specified APCs when claim the amount of the credit in the for all procedures in the APC be
a hospital furnishes a specified device amount portion for value code ‘‘FD’’ calculated using the median cost instead
without cost or with a full or partial when the hospital receives a credit for of the geometric mean cost, for the
credit. For CY 2013 and prior years, our a replaced device that is 50 percent or reasons described above for the policy
policy had been to reduce OPPS greater than the cost of the device. applied to the procedure described by
payment by 100 percent of the device We did not propose any changes to CPT code 0308T in CY 2016. The CY
offset amount when a hospital furnishes our no cost/full credit and partial credit 2018 final rule geometric mean cost for
a specified device without cost or with device policies in the CY 2020 OPPS/ the procedure described by CPT code
a full credit and by 50 percent of the ASC proposed rule. 0308T (based on 19 claims containing
device offset amount when the hospital the device HCPCS C-code, in
receives partial credit in the amount of 5. Payment Policy for Low-Volume
accordance with the device-intensive
50 percent or more of the cost for the Device-Intensive Procedures
edit policy) was $21,302, and the
specified device. For CY 2014, we In CY 2016, we used our equitable median cost was $19,521. The final CY
reduced OPPS payment, for the adjustment authority under section 2018 payment rate (calculated using the
applicable APCs, by the full or partial 1833(t)(2)(E) of the Act and used the median cost) was $17,560.
credit a hospital receives for a replaced median cost (instead of the geometric In the CY 2019 OPPS/ASC final rule
device. Specifically, under this mean cost per our standard with comment period (83 FR 58951), for
modified policy, hospitals are required methodology) to calculate the payment CY 2019, we continued with our policy
to report on the claim the amount of the rate for the implantable miniature of establishing the payment rate for any
credit in the amount portion for value telescope procedure described by CPT device-intensive procedure that is
code ‘‘FD’’ (Credit Received from the code 0308T (Insertion of ocular assigned to a clinical APC with fewer
than 100 total claims for all procedures biologicals. ‘‘Current’’ refers to those Medicare/Medicare-Fee-for-Service-Part-
in the APC based on calculations using types of drugs or biologicals mentioned B-Drugs/McrPartBDrugAvgSalesPrice/
the median cost instead of the geometric above that are hospital outpatient index.html.
mean cost. For more information on the services under Medicare Part B for The pass-through application and
specific policy for assignment of low- which transitional pass-through review process for drugs and biologicals
volume device-intensive procedures for payment was made on the first date the
is described on the CMS website at:
CY 2019, we refer readers to section hospital OPPS was implemented.
Transitional pass-through payments https://www.cms.gov/Medicare/
III.D.13. of the CY 2019 OPPS/ASC final
rule with comment period (83 FR 58917 also are provided for certain ‘‘new’’ Medicare-Fee-for-Service-Payment/
through 58918). drugs and biologicals that were not HospitalOutpatientPPS/passthrough_
For CY 2020, we proposed to continue being paid for as an HOPD service as of payment.html.
our current policy of establishing the December 31, 1996 and whose cost is 2. Three-Year Transitional Pass-Through
payment rate for any device-intensive ‘‘not insignificant’’ in relation to the Payment Period for All Pass-Through
procedure that is assigned to a clinical OPPS payments for the procedures or Drugs, Biologicals, and
APC with fewer than 100 total claims services associated with the new drug or Radiopharmaceuticals and Quarterly
for all procedures in the APC using the biological. For pass-through payment Expiration of Pass-Through Status
median cost instead of the geometric purposes, radiopharmaceuticals are
mean cost. For CY 2020, this policy included as ‘‘drugs.’’ As required by As required by statute, transitional
would apply to CPT code 0308T, which statute, transitional pass-through pass-through payments for a drug or
we proposed to assign to APC 5495 payments for a drug or biological biological described in section
(Level 5 Intraocular Procedures) in the described in section 1833(t)(6)(C)(i)(II) 1833(t)(6)(C)(i)(II) of the Act can be
CY 2020 OPPS/ASC proposed rule. The of the Act can be made for a period of made for a period of at least 2 years, but
CY 2020 OPPS/ASC proposed rule at least 2 years, but not more than 3 not more than 3 years, after the payment
geometric mean cost for the procedure years, after the payment was first made was first made for the product as a
described by CPT code 0308T (based on for the product as a hospital outpatient hospital outpatient service under
7 claims containing the device HCPCS service under Medicare Part B. Proposed Medicare Part B. Our current policy is
C-code, in accordance with the device- CY 2020 pass-through drugs and to accept pass-through applications on a
intensive edit policy) was $28,237, and biologicals and their designated APCs
quarterly basis and to begin pass-
the median cost was $19,270. The are assigned status indicator ‘‘G’’ in
through payments for newly approved
proposed CY 2020 payment rate Addenda A and B to the proposed rule
pass-through drugs and biologicals on a
(calculated using the median cost) was (which are available via the internet on
the CMS website). quarterly basis through the next
$19,740 and can be found in Addendum
B to the CY 2020 OPPS/ASC proposed Section 1833(t)(6)(D)(i) of the Act available OPPS quarterly update after
rule (which is available via the internet specifies that the pass-through payment the approval of a product’s pass-through
on the CMS website). amount, in the case of a drug or status. However, prior to CY 2017, we
biological, is the amount by which the expired pass-through status for drugs
V. OPPS Payment Changes for Drugs, amount determined under section and biologicals on an annual basis
Biologicals, and Radiopharmaceuticals 1842(o) of the Act for the drug or through notice-and-comment
A. OPPS Transitional Pass-Through biological exceeds the portion of the rulemaking (74 FR 60480). In the CY
Payment for Additional Costs of Drugs, otherwise applicable Medicare OPD fee 2017 OPPS/ASC final rule with
Biologicals, and Radiopharmaceuticals schedule that the Secretary determines comment period (81 FR 79662), we
is associated with the drug or biological. finalized a policy change, beginning
1. Background The methodology for determining the with pass-through drugs and biologicals
Section 1833(t)(6) of the Act provides pass-through payment amount is set newly approved in CY 2017 and
for temporary additional payments or forth in regulations at 42 CFR 419.64. subsequent calendar years, to allow for
‘‘transitional pass-through payments’’ These regulations specify that the pass- a quarterly expiration of pass-through
for certain drugs and biologicals. through payment equals the amount payment status for drugs, biologicals,
Throughout the proposed rule, the term determined under section 1842(o) of the and radiopharmaceuticals to afford a
‘‘biological’’ is used because this is the Act minus the portion of the APC pass-through payment period that is as
term that appears in section 1861(t) of payment that CMS determines is close to a full 3 years as possible for all
the Act. A ‘‘biological’’ as used in the associated with the drug or biological. pass-through drugs, biologicals, and
proposed rule includes (but is not Section 1847A of the Act establishes radiopharmaceuticals.
necessarily limited to) a ‘‘biological the average sales price (ASP)
product’’ or a ‘‘biologic’’ as defined methodology, which is used for This change eliminated the variability
under section 351 of the Public Health payment for drugs and biologicals of the pass-through payment eligibility
Service Act. As enacted by the described in section 1842(o)(1)(C) of the period, which previously varied based
Medicare, Medicaid, and SCHIP Act furnished on or after January 1, on when a particular application was
Balanced Budget Refinement Act of 2005. The ASP methodology, as applied initially received. We adopted this
1999 (BBRA) (Pub. L. 106–113), this under the OPPS, uses several sources of change for pass-through approvals
pass-through payment provision data as a basis for payment, including beginning on or after CY 2017, to allow,
requires the Secretary to make the ASP, the wholesale acquisition cost on a prospective basis, for the maximum
additional payments to hospitals for: (WAC), and the average wholesale price pass-through payment period for each
Current orphan drugs for rare disease (AWP). In the proposed rule, the term pass-through drug without exceeding
and conditions, as designated under ‘‘ASP methodology’’ and ‘‘ASP-based’’ the statutory limit of 3 years. Notice of
section 526 of the Federal Food, Drug, are inclusive of all data sources and drugs whose pass-through payment
and Cosmetic Act; current drugs and methodologies described therein. status is ending during the calendar year
biologicals and brachytherapy sources Additional information on the ASP will continue to be included in the
used in cancer therapy; and current methodology can be found on the CMS quarterly OPPS Change Request
radiopharmaceutical drugs and website at: http://www.cms.gov/ transmittals.
3. Drugs and Biologicals With Expiring threshold, we would package payment policy to require the equal payment of
Pass-Through Payment Status in CY for the drug or biological into the all drugs, biologicals, and
2019 payment for the associated procedure in radiopharmaceuticals in the same CED
We proposed that the pass-through the upcoming calendar year. If the trial. The payment rate for each product
payment status of six drugs and estimated per day cost of the drug or is consistent with current OPPS
biologicals would expire on December biological is greater than the OPPS drug statutory requirements. In the case of
31, 2019 as listed in Table 14. These packaging threshold, we proposed to the particular products mentioned
drugs and biologicals will have received provide separate payment at the above, one product has drug pass-
OPPS pass-through payment for 3 years applicable relative ASP-based payment through status through September 30,
during the period of January 1, 2017 amount (which is proposed at ASP+6 2020, as required by section
until December 31, 2019. percent for CY 2020, as discussed 1833(t)(6)(G), while the pass-through
In accordance with the policy further in section V.B.3. of the proposed period for the other products has
finalized in CY 2017 and described rule). already expired, meaning payment for
earlier, pass-through payment status for The proposed packaged or separately these products is packaged into the
drugs and biologicals newly approved payable status of each of these drugs or payment for the primary procedure.
in CY 2017 and subsequent years will biologicals is listed in Addendum B to Further, section 1833(t)(6) establishes
expire on a quarterly basis, with a pass- the proposed rule (which is available the statutory authority for CMS to
through payment period as close to 3 via the internet on the CMS website). provide pass-through payment to cover
years as possible. With the exception of Comment: One commenter suggested the additional costs of innovative drugs
those groups of drugs and biologicals that CMS should establish a new policy including radiopharmaceuticals. All of
that are always packaged when they do to require equal payment for all drugs, these products receive payment that is
not have pass-through payment status biologicals, and radiopharmaceuticals consistent with statutory and regulatory
(specifically, anesthesia drugs; drugs, included in the same CED trial to avoid requirements and payment will be
biologicals, and radiopharmaceuticals affecting the trial by implicitly favoring packaged for all three products once the
that function as supplies when used in one product over another through a statutory pass-through period for
a diagnostic test or procedure (including higher payment rate. The commenter Amyvid expires. We note that the
diagnostic radiopharmaceuticals, referenced a current CED trial for payment rate for each product does not
contrast agents, and stress agents); and amyloid positron emission tomography affect the protocol established under the
drugs and biologicals that function as (PET) that will be active into CY 2020. CED trial because the protocol does not
supplies when used in a surgical (Information on this CED trial can be consider the cost of the
procedure), our standard methodology found on the CMS website at https:// radiopharmaceutical used for treatment.
for providing payment for drugs and www.cms.gov/Medicare/Coverage/ Therefore, we expect providers to make
biologicals with expiring pass-through Coverage-withEvidence-Development/ their own decision about which
payment status in an upcoming calendar AmyloidPET.html). In the CED trial, radiopharmaceutical to use to provide
year is to determine the product’s NeuraceqTM (florbetaben F18, HCPCS the treatment independent of the
estimated per day cost and compare it code Q9982) and VizamylTM payment received for an individual
with the OPPS drug packaging threshold (flutemetamol F18, HCPCS code Q9983) drug.
for that calendar year (which is have not had pass-through status since After consideration of the public
proposed to be $130 for CY 2020), as December 31, 2018, while a third drug, comments we received, we are
discussed further in section V.B.2. of the AmyvidTM (florbetapir F18, HCPCS finalizing our proposal, without
proposed rule. We proposed that if the code A9586) continues to have pass- modification, to expire the pass-through
estimated per day cost for the drug or through status until September 30, 2020. payment status of the 6 drugs and
biological is less than or equal to the Response: We do not agree with the biologicals listed in Table 40 below on
applicable OPPS drug packaging commenter’s request that we establish a December 31, 2019.
4. Drugs, Biologicals, and Act and the portion of the otherwise We proposed to continue to update
Radiopharmaceuticals With New or applicable OPD fee schedule that the pass-through payment rates on a
Continuing Pass-Through Payment Secretary determines is associated with quarterly basis on the CMS website
Status in CY 2020 the drug or biological. For CY 2020, we during CY 2020 if later quarter ASP
proposed to continue to pay for pass- submissions (or more recent WAC or
We proposed to continue pass- through drugs and biologicals at ASP+6 AWP information, as applicable)
through payment status in CY 2020 for percent, equivalent to the payment rate indicate that adjustments to the
61 drugs and biologicals. These drugs these drugs and biologicals would payment rates for these pass-through
and biologicals, which were approved receive in the physician’s office setting payment drugs or biologicals are
for pass-through payment status in CY 2020. We proposed that a $0 pass- necessary. For a full description of this
between April 1, 2017 and April 1, 2019 through payment amount would be paid policy, we refer readers to the CY 2006
are listed in Table 15. The APCs and for pass-through drugs and biologicals OPPS/ASC final rule with comment
HCPCS codes for these drugs and under the CY 2020 OPPS because the period (70 FR 68632 through 68635).
biologicals approved for pass-through difference between the amount For CY 2020, consistent with our CY
payment status on or after January 1, authorized under section 1842(o) of the 2019 policy for diagnostic and
2020 are assigned status indicator ‘‘G’’ Act, which is proposed at ASP+6 therapeutic radiopharmaceuticals, we
in Addenda A and B to the proposed percent, and the portion of the proposed to provide payment for both
rule (which are available via the internet otherwise applicable OPD fee schedule diagnostic and therapeutic
on the CMS website). In addition, there that the Secretary determines is radiopharmaceuticals that are granted
are four drugs and biologicals that have appropriate, which is proposed at pass-through payment status based on
already had 3 years of pass-through ASP+6 percent, is $0. the ASP methodology. As stated earlier,
payment status but for which pass- In the case of policy-packaged drugs for purposes of pass-through payment,
through payment status is required to be (which include the following: we consider radiopharmaceuticals to be
extended for an additional 2 years, Anesthesia drugs; drugs, biologicals, drugs under the OPPS. Therefore, if a
effective October 1, 2018 under section and radiopharmaceuticals that function diagnostic or therapeutic
1833(t)(6)(G) of the Act, as added by as supplies when used in a diagnostic radiopharmaceutical receives pass-
section 1301(a)(1)(C) of the test or procedure (including contrast through payment status during CY 2020,
Consolidated Appropriations Act of agents, diagnostic radiopharmaceuticals, we proposed to follow the standard ASP
2018 (Pub. L. 115–141). That means the and stress agents); and drugs and methodology to determine the pass-
last 9 months of pass-through status for biologicals that function as supplies through payment rate that drugs receive
these drugs will occur in CY 2020. when used in a surgical procedure), we under section 1842(o) of the Act, which
Because of this requirement, these drugs proposed that their pass-through is proposed at ASP+6 percent. If ASP
and biologicals are also included in payment amount would be equal to data are not available for a
Table 15, which brings the total number ASP+6 percent for CY 2020 minus a radiopharmaceutical, we proposed to
of drugs and biologicals with proposed payment offset for any predecessor drug provide pass-through payment at
pass-through payment status in CY 2020 products contributing to the pass- WAC+3 percent (consistent with our
to 65. through payment as described in section proposed policy in section V.B.2.b. of
Section 1833(t)(6)(D)(i) of the Act sets V.A.6. of the proposed rule. We are the proposed rule), the equivalent
the amount of pass-through payment for making this proposal because, if not for payment provided to pass-through
pass-through drugs and biologicals (the the pass-through payment status of payment drugs and biologicals without
pass-through payment amount) as the these policy-packaged products, ASP information. Additional detail and
difference between the amount payment for these products would be comments on the WAC+3 percent
ER12NO19.063</GPH>
authorized under section 1842(o) of the packaged into the associated procedure. payment policy can be found in section
V.B.2.b. of the proposed rule. If WAC Therefore, we are finalizing these this final rule with comment period.
information also is not available, we proposals for CY 2020 without The drugs and biologicals that continue
proposed to provide payment for the modification. We note that public to have pass-through payment status for
pass-through radiopharmaceutical at 95 comments pertaining to our proposal to CY 2020 or have been granted pass-
percent of its most recent AWP. continue to pay WAC+3 percent for through payment status as of January
We did not receive any public drugs and biologicals without ASP 2020 are shown in Table 41 below.
comments regarding these proposals. information are addressed elsewhere in BILLING CODE 4120–01–P
ER12NO19.064</GPH>
ER12NO19.065</GPH>
ER12NO19.066</GPH>
ER12NO19.067</GPH>
ER12NO19.068</GPH>
BILLING CODE 4120–01–C through payment status for the drugs five HCPCS codes for drugs and
5. Drugs, Biologicals, and and biologicals listed in Table 16 of the biologicals with pass-through payment
Radiopharmaceuticals With Pass- proposed rule (we note that these drugs status for CY 2020 are HCPCS codes
Through Status as a Result of Section and biologicals are also listed in Table Q4195 (Puraply, per square centimeter)
1301 of the Consolidated 15 of the proposed rule) through and Q4196 (Puraply am, per square
Appropriations Act of 2018 (Pub. L. September 30, 2020 as required in centimeter). PuraPly and PuraPly AM
115–141) section 1833(t)(6)(G) of the Act, as are skin substitute products that were
added by section 1301(a)(1)(C) of the approved for pass-through payment
As mentioned earlier, section
1301(a)(1) of the Consolidated Consolidated Appropriations Act of status on January 1, 2015 through the
Appropriations Act of 2018 (Pub. L. 2018. The APCs and HCPCS codes for drug and biological pass-through
115–141) amended section 1833(t)(6) of these drugs and biologicals approved for payment process. Beginning on April 1,
the Act and added a new section pass-through payment status are 2015, skin substitute products are
1833(t)(6)(G), which provides that for assigned status indicator ‘‘G’’ in evaluated for pass-through payment
drugs or biologicals whose period of Addenda A and B to the proposed rule status through the device pass-through
pass-through payment status ended on (which are available via the internet on payment process. However, we stated in
December 31, 2017 and for which the CMS website). the CY 2015 OPPS/ASC final rule with
payment was packaged into a covered We proposed to continue to update comment period (79 FR 66887) that skin
hospital outpatient service furnished pass-through payment rates for HCPCS substitutes that are approved for pass-
beginning January 1, 2018, such pass- codes Q4195 and Q4196 along with the through payment status as biologicals
through payment status shall be other three drugs and biologicals effective on or before January 1, 2015
extended for a 2-year period beginning covered by section 1833(t)(6)(G) of the would continue to be paid as pass-
on October 1, 2018 through September Act on a quarterly basis on the CMS through biologicals for the duration of
30, 2020. There are four products whose website during CY 2020 if later quarter their pass-through payment period.
period of drug and biological pass- ASP submissions (or more recent WAC Because PuraPly and PuraPly AM were
through payment status ended on or AWP information, as applicable) approved for pass-through payment
December 31, 2017 and for which indicate that adjustments to the status through the drug and biological
payment would have been packaged payment rates for these pass-through pass-through payment pathway, we
beginning January 1, 2018. These drugs or biologicals are necessary. The finalized a policy to consider both
products were listed in Table 39 of the replacement of HCPCS code Q4172 by PuraPly and PuraPly AM to be drugs or
CY 2019 OPPS/ASC final rule with HCPCS codes Q4195 and Q4196 means biologicals as described by section
comment period (83 FR 58962). there are five HCPCS codes for drugs 1833(t)(6)(G) of the Act, as added by
Starting in CY 2019, the HCPCS code and biologicals covered by section section 1301(a)(1)(C) of the
Q4172 (PuraPly, and PuraPly 1833(t)(6)(G) of the Act. For a full Consolidated Appropriations Act of
Antimicrobial, any type, per square description of this policy, we refer 2018, and to be eligible for extended
centimeter) was discontinued. In its readers to the CY 2019 OPPS/ASC final pass-through payment under our
place, two new HCPCS codes were rule with comment period (83 FR 58960 proposal for CY 2020 (83 FR 58961
established—Q4195 (Puraply, per through 58962). through 58962).
square centimeter) and Q4196 (Puraply The five HCPCS codes for drugs and We did not receive any comments on
am, per square centimeter). Because biologicals that we proposed would this policy. Therefore, we are finalizing
these HCPCS codes are direct successors have pass-through payment status for this proposal without modification.
to HCPCS code Q4172, the provisions of CY 2020 under section 1833(t)(6)(G) of Starting on October 1, 2020, the drugs
section 1833(t)(6)(G) of the Act apply to the Act, as added by section and biologicals listed in Table 42 will
HCPCS codes Q4195 and Q4196, and 1301(a)(1)(C) of the Consolidated no longer receive pass-through status,
these codes were listed in Table 16 of Appropriations Act of 2018, are shown and will be assigned to status indicator
the proposed rule (84 FR 39495). For CY in Table 16 of the CY 2020 OPPS/ASC ‘‘N’’, which means these drugs will once
2020, we proposed to continue pass- proposed rule. Included as two of the again be packaged in the OPPS.
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6. Provisions for Reducing Transitional amount for pass-through drugs and stress agents, and skin substitutes, we
Pass-Through Payments for Policy- biologicals is the difference between the refer readers to the discussion in the CY
Packaged Drugs, Biologicals, and amount paid under section 1842(o) of 2016 OPPS/ASC final rule with
Radiopharmaceuticals To Offset Costs the Act and the otherwise applicable comment period (80 FR 70430 through
Packaged Into APC Groups OPD fee schedule amount. Because a 70432). For CY 2020, as we did in CY
payment offset is necessary in order to 2019, we proposed to continue to apply
Under the regulations at 42 CFR provide an appropriate transitional the same policy packaged offset policy
419.2(b), nonpass-through drugs, pass-through payment, we deduct from to payment for pass-through diagnostic
biologicals, and radiopharmaceuticals the pass-through payment for policy- radiopharmaceuticals, pass-through
that function as supplies when used in packaged drugs, biologicals, and contrast agents, pass-through stress
a diagnostic test or procedure are radiopharmaceuticals an amount agents, and pass-through skin
packaged in the OPPS. This category reflecting the portion of the APC substitutes. The proposed APCs to
includes diagnostic payment associated with predecessor which a payment offset may be
radiopharmaceuticals, contrast agents, products in order to ensure no duplicate
stress agents, and other diagnostic applicable for pass-through diagnostic
payment is made. This amount radiopharmaceuticals, pass-through
drugs. Also under 42 CFR 419.2(b), reflecting the portion of the APC
nonpass-through drugs and biologicals contrast agents, pass-through stress
payment associated with predecessor
that function as supplies in a surgical agents, and pass-through skin
products is called the payment offset.
procedure are packaged in the OPPS. The payment offset policy applies to substitutes are identified in Table 43
This category includes skin substitutes all policy packaged drugs, biologicals, below.
and other surgical-supply drugs and and radiopharmaceuticals. For a full We did not receive any comments on
biologicals. As described earlier, section description of the payment offset policy this proposal. Therefore, we are
1833(t)(6)(D)(i) of the Act specifies that as applied to diagnostic finalizing this proposal without
the transitional pass-through payment radiopharmaceuticals, contrast agents, modification. ER12NO19.070</GPH>
We proposed to continue to post mandated threshold became effective) to b. Packaging of Payment for HCPCS
annually on the CMS website at: https:// the third quarter of CY 2007. We then Codes That Describe Certain Drugs,
www.cms.gov/Medicare/Medicare-Fee- rounded the resulting dollar amount to Certain Biologicals, and Therapeutic
for-Service-Payment/ the nearest $5 increment in order to Radiopharmaceuticals Under the Cost
HospitalOutpatientPPS/Annual-Policy- determine the CY 2007 threshold Threshold (‘‘Threshold-Packaged
Files.html a file that contains the APC amount of $55. Using the same Drugs’’)
offset amounts that will be used for that methodology as that used in CY 2007 To determine the proposed CY 2020
year for purposes of both evaluating cost (which is discussed in more detail in packaging status for all nonpass-through
significance for candidate pass-through the CY 2007 OPPS/ASC final rule with drugs and biologicals that are not policy
payment device categories and drugs
comment period (71 FR 68085 through packaged, we calculated, on a HCPCS
and biologicals and establishing any
68086)), we set the packaging threshold code-specific basis, the per day cost of
appropriate APC offset amounts.
Specifically, the file will continue to for establishing separate APCs for drugs all drugs, biologicals, and therapeutic
provide the amounts and percentages of and biologicals at $125 for CY 2019 (83 radiopharmaceuticals (collectively
APC payment associated with packaged FR 58963 through 58964). called ‘‘threshold-packaged’’ drugs) that
implantable devices, policy-packaged Following the CY 2007 methodology, had a HCPCS code in CY 2018 and were
drugs, and threshold packaged drugs for this CY 2020 OPPS/ASC final rule, paid (via packaged or separate payment)
and biologicals for every OPPS clinical under the OPPS. We used data from CY
we used the most recently available four
APC. 2018 claims processed before January 1,
quarter moving average PPI levels to
2019 for this calculation. However, we
B. OPPS Payment for Drugs, Biologicals, trend the $50 threshold forward from
did not perform this calculation for
and Radiopharmaceuticals Without the third quarter of CY 2005 to the third those drugs and biologicals with
Pass-Through Payment Status quarter of CY 2020 and rounded the multiple HCPCS codes that include
resulting dollar amount ($128.11) to the different dosages, as described in
1. Criteria for Packaging Payment for nearest $5 increment, which yielded a
Drugs, Biologicals, and section V.B.1.d. of the proposed rule, or
figure of $130. In performing this for the following policy-packaged items
Radiopharmaceuticals calculation, we used the most recent that we proposed to continue to package
a. Packaging Threshold forecast of the quarterly index levels for in CY 2020: Anesthesia drugs; drugs,
In accordance with section the PPI for Pharmaceuticals for Human biologicals, and radiopharmaceuticals
1833(t)(16)(B) of the Act, the threshold Use (Prescription) (Bureau of Labor that function as supplies when used in
for establishing separate APCs for Statistics series code WPUSI07003) from a diagnostic test or procedure; and drugs
payment of drugs and biologicals was CMS’ Office of the Actuary. For this CY and biologicals that function as supplies
set to $50 per administration during CYs 2019 OPPS/ASC final rule with when used in a surgical procedure.
2005 and 2006. In CY 2007, we used the comment period, based on these In order to calculate the per day costs
four quarter moving average Producer calculations using the CY 2007 OPPS for drugs, biologicals, and therapeutic
Price Index (PPI) levels for methodology, we are finalizing a radiopharmaceuticals to determine their
Pharmaceutical Preparations packaging threshold for CY 2020 of proposed packaging status in CY 2020,
(Prescription) to trend the $50 threshold $130. we used the methodology that was
forward from the third quarter of CY described in detail in the CY 2006 OPPS
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2005 (when the Pub. L. 108–173 proposed rule (70 FR 42723 through
42724) and finalized in the CY 2006 a policy is necessary at this time. We comment period. We note that it is also
OPPS final rule with comment period note that the purpose of the drug cost our policy to make an annual packaging
(70 FR 68636 through 68638). For each threshold is to require the packaging of determination for a HCPCS code only
drug and biological HCPCS code, we relatively small per day drug costs into when we develop the OPPS/ASC final
used an estimated payment rate of the associated outpatient hospital rule with comment period for the
ASP+6 percent (which is the payment procedure. This suggestion runs update year. Only HCPCS codes that are
rate we proposed for separately payable contrary to our policy goal of bundling identified as separately payable in the
drugs and biologicals for CY 2020, as more services to encourage provider final rule with comment period are
discussed in more detail in section efficiency. However, we are cognizant of subject to quarterly updates. For our
V.B.2.b. of the proposed rule) to issues surrounding drug shortages and calculation of per day costs of HCPCS
calculate the CY 2020 proposed rule per will consider this suggestion for the codes for drugs and biologicals in this
day costs. We used the manufacturer- future. CY 2020 OPPS/ASC proposed rule, we
submitted ASP data from the fourth Comment: One commenter requested proposed to use ASP data from the
quarter of CY 2018 (data that were used that we no longer package HCPCS code fourth quarter of CY 2018, which is the
for payment purposes in the physician’s J2274 (Injection, Morphine Sulfate, basis for calculating payment rates for
office setting, effective April 1, 2019) to Preservative-Free For Epidural Or drugs and biologicals in the physician’s
determine the proposed rule per day Intrathecal Use, 10 mg) because the drug office setting using the ASP
cost. is used in an implantable infusion methodology, effective April 1, 2019,
As is our standard methodology, for pump for intrathecal management of along with updated hospital claims data
CY 2020, we proposed to use payment pain and/or spasticity, and another from CY 2018. We note that we also
rates based on the ASP data from the drug, HCPCS code J0475 (injection, proposed to use these data for budget
first quarter of CY 2019 for budget baclofen, 10 mg) which can be used neutrality estimates and impact analyses
neutrality estimates, packaging with the same infusion pump, currently for this CY 2020 OPPS/ASC proposed
determinations, impact analyses, and receives separate payment in the OPPS. rule.
completion of Addenda A and B to the Response: We disagree with the Payment rates for HCPCS codes for
proposed rule (which are available via commenter. Neither HCPCS code J2274 separately payable drugs and biologicals
the internet on the CMS website) nor HCPCS code J0475 are classified as included in Addenda A and B for the
because these are the most recent data drugs that are policy packaged. We refer final rule with comment period will be
available for use at the time of readers to section V.B.1.c. for a based on ASP data from the third
development of the proposed rule. description of drugs that are policy quarter of CY 2019. These data will be
These data also were the basis for drug packaged. Also, neither of these drugs is the basis for calculating payment rates
payments in the physician’s office assigned to drug pass-through status. for drugs and biologicals in the
setting, effective April 1, 2019. For Therefore, we use our drug cost physician’s office setting using the ASP
items that did not have an ASP-based threshold methodology as described in methodology, effective October 1, 2019.
payment rate, such as some therapeutic this section of the rule to determine These payment rates would then be
radiopharmaceuticals, we used their whether the drugs are packaged into an updated in the January 2020 OPPS
mean unit cost derived from the CY associated procedure or if the drugs are update, based on the most recent ASP
2018 hospital claims data to determine separately paid. The per day cost of data to be used for physicians’ office
their per day cost. HCPCS code J2274 is below the $130 and OPPS payment as of January 1,
We proposed to package items with a drug packaging threshold, and therefore, 2020. For items that do not currently
per day cost less than or equal to $130, the drug is packaged in the OPPS. The have an ASP-based payment rate, we
and identify items with a per day cost per day cost of HCPCS code J0475 is proposed to recalculate their mean unit
greater than $130 as separately payable above the drug packaging threshold, and cost from all of the CY 2018 claims data
unless they are policy-packaged. therefore, the drug is paid separately in and update cost report information
Consistent with our past practice, we the OPPS. The drug packaging threshold available for the CY 2020 final rule with
cross-walked historical OPPS claims is based on the per day cost of the comment period to determine their final
data from the CY 2018 HCPCS codes specific drug administered, and the per day cost.
that were reported to the CY 2019 threshold is not affected by the means Consequently, the packaging status of
HCPCS codes that we display in by which the drug is administered to the some HCPCS codes for drugs,
Addendum B to the proposed rule beneficiary (in this case, through a biologicals, and therapeutic
(which is available via the internet on pump). In the case brought up by the radiopharmaceuticals in the proposed
the CMS website) for proposed payment commenter, the per day cost of HCPCS rule may be different from the same
in CY 2020. code J2274 is below the $130 drug drugs’ HCPCS codes’ packaging status
Comment: Two commenters suggested packaging threshold, and is therefore determined based on the data used for
that CMS create an exception to the packaged into the payment for its the final rule with comment period.
drug cost threshold packaging policy in associated procedure. Under such circumstances, we proposed
situations where a shortage of a drug After consideration of the public to continue to follow the established
that is packaged under the drug cost comments we received, and consistent policies initially adopted for the CY
threshold packaging policy requires with our methodology for establishing 2005 OPPS (69 FR 65780) in order to
providers to use a higher-cost substitute the packaging threshold using the most more equitably pay for those drugs
drug that presumably is still packaged recent PPI forecast data, we are adopting whose costs fluctuate relative to the
because of the drug cost packaging a CY 2019 packaging threshold of $130. proposed CY 2020 OPPS drug packaging
threshold. The commenters suggested Our policy during previous cycles of threshold and the drug’s payment status
that the substitute drug be separately the OPPS has been to use updated ASP (packaged or separately payable) in CY
paid even though the per day cost of the and claims data to make final 2019. These established policies have
substitute drug is still below the drug determinations of the packaging status not changed for many years and are the
cost packaging threshold amount. of HCPCS codes for drugs, biologicals, same as described in the CY 2016 OPPS/
Response: We thank the commenter and therapeutic radiopharmaceuticals ASC final rule with comment period (80
for its suggestion but disagree that such for the OPPS/ASC final rule with FR 70434). Specifically, for CY 2020,
consistent with our historical practice, radiopharmaceuticals, regardless of the that many providers performing nuclear
we proposed to apply the following cost of the products. Because the medicine procedures are not including
policies to these HCPCS codes for drugs, products are packaged according to the the cost of diagnostic
biologicals, and therapeutic policies in 42 CFR 419.2(b), we refer to radiopharmaceuticals used for the
radiopharmaceuticals whose these packaged drugs, biologicals, and procedures in their claims submissions.
relationship to the drug packaging radiopharmaceuticals as ‘‘policy- Commenters believe this lack of drug
threshold changes based on the updated packaged’’ drugs, biologicals, and cost reporting could be causing the cost
drug packaging threshold and on the radiopharmaceuticals. These policies of nuclear medicine procedures to be
final updated data: are either longstanding or based on underreported and therefore requests
• HCPCS codes for drugs and longstanding principles and inherent to that the radiolabeled product edits be
biologicals that were paid separately in the OPPS and are as follows: reinstated.
CY 2019 and that are proposed for • Anesthesia, certain drugs, Response: We appreciated the
separate payment in CY 2020, and that biologicals, and other pharmaceuticals; commenter’s feedback; however, we do
then have per day costs equal to or less medical and surgical supplies and not agree with the commenter that we
than the CY 2020 final rule drug equipment; surgical dressings; and should reinstate the nuclear medicine
packaging threshold, based on the devices used for external reduction of procedure to radiolabeled product edits,
updated ASPs and hospital claims data fractures and dislocations which required a diagnostic
used for the CY 2020 final rule, would (§ 419.2(b)(4)); radiopharmaceutical to be present on
continue to receive separate payment in • Intraoperative items and services the same claim as a nuclear medicine
CY 2020. (§ 419.2(b)(14)); procedure for payment under the OPPS
• HCPCS codes for drugs and • Drugs, biologicals, and to be made. As previously discussed in
biologicals that were packaged in CY radiopharmaceuticals that function as the CY 2019 OPPS/ASC final rule with
2019 and that are proposed for separate supplies when used in a diagnostic test comment period (83 FR 58965), the
payment in CY 2020, and that then have or procedure (including, but not limited edits were in place between CY 2008
per day costs equal to or less than the to, diagnostic radiopharmaceuticals, and CY 2014 (78 FR 75033). We believe
CY 2020 final rule drug packaging contrast agents, and pharmacologic the period of time in which the edits
threshold, based on the updated ASPs stress agents) (§ 419.2(b)(15)); and were in place was sufficient for
and hospital claims data used for the CY • Drugs and biologicals that function hospitals to gain experience reporting
2020 final rule, would remain packaged as supplies when used in a surgical procedures involving radiolabeled
in CY 2020. procedure (including, but not limited to, products and to become accustomed to
• HCPCS codes for drugs and skin substitutes and similar products ensuring that they code and report
biologicals for which we proposed that aid wound healing and implantable charges so that their claims fully and
packaged payment in CY 2020 but that biologicals) (§ 419.2(b)(16)). appropriately reflect the costs of those
then have per-day costs greater than the The policy at § 419.2(b)(16) is broader radiolabeled products. As with all other
CY 2020 final rule drug packaging than that at § 419.2(b)(14). As we stated items and services recognized under the
threshold, based on the updated ASPs in the CY 2015 OPPS/ASC final rule OPPS, we expect hospitals to code and
and hospital claims data used for the CY with comment period: ‘‘We consider all report their costs appropriately,
2020 final rule, would receive separate items related to the surgical outcome regardless of whether there are claims
payment in CY 2020. and provided during the hospital stay in processing edits in place.
We did not receive any public which the surgery is performed, Comment: Several commenters
comments on our proposal to including postsurgical pain requested that diagnostic
recalculate the mean unit cost for items management drugs, to be part of the radiopharmaceuticals be paid separately
that do not currently have an ASP-based surgery for purposes of our drug and in all cases, not just when the drugs
payment rate from all of the CY 2018 biological surgical supply packaging have pass-through payment status.
claims data and updated cost report policy’’ (79 FR 66875). The category Some commenters suggested payment
information available for this CY 2020 described by § 419.2(b)(15) is large and based upon ASP, WAC, AWP, or mean
final rule with comment period to includes diagnostic unit cost data derived from hospital
determine their final per day cost. We radiopharmaceuticals, contrast agents, claims. Some commenters mentioned
also did not receive any public stress agents, and some other products. that pass-through payment status helps
comments on our proposal to continue The category described by § 419.2(b)(16) the diffusion of new diagnostic
to follow the established policies, includes skin substitutes and some radiopharmaceuticals into the market,
initially adopted for the CY 2005 OPPS other products. We believe it is but is not enough to make up for the
(69 FR 65780), when the packaging important to reiterate that cost inadequate payment after pass-through
status of some HCPCS codes for drugs, consideration is not a factor when expires. Several commenters
biologicals, and therapeutic determining whether an item is a recommended treating diagnostic
radiopharmaceuticals in the proposed surgical supply (79 FR 66875). radiopharmaceuticals similarly to
rule may be different from the same We did not make any proposals to therapeutic radiopharmaceuticals.
drug HCPCS code’s packaging status revise our policy-packaged drug policy. Commenters opposed incorporating the
determined based on the data used for Comment: CMS received several cost of the drug into the associated APC,
the final rule with comment period. comments from stakeholders regarding and provided limited evidence showing
Therefore, for CY 2020, we are finalizing the policy-packaged status of diagnostic procedures in which diagnostic
these two proposals without radiopharmaceuticals. Several radiopharmaceuticals are considered to
modification. commenters recommended that CMS be a surgical supply that the commenter
continue to apply the nuclear medicine believed are often paid at a lower rate
c. Policy Packaged Drugs, Biologicals, procedure to radiolabeled product edits than the payment rate for the diagnostic
and Radiopharmaceuticals to ensure that all packaged costs are radiopharmaceutical itself when the
As mentioned earlier in this section, included on nuclear medicine claims in drug was paid separately because it had
in the OPPS, we package several order to establish appropriate payment pass-through payment status.
categories of drugs, biologicals, and rates in the future. There was concern Additionally, commenters proposed
alternative payment methodologies such procedure. Additionally, we do not For CY 2020, in order to propose a
as subjecting diagnostic believe it is appropriate to create a new packaging determination that is
radiopharmaceuticals to the drug packaging threshold specifically for consistent across all HCPCS codes that
packaging threshold, creating separate diagnostic radiopharmaceuticals as that describe different dosages of the same
APC payments for diagnostic does not align with our overall drug or biological, we aggregated both
radiopharmaceuticals that cost more packaging policy and limited data has our CY 2018 claims data and our pricing
than $500, or using ASP, WAC, or AWP been submitted to support a specific information at ASP+6 percent across all
to account for packaged threshold. With respect to the request of the HCPCS codes that describe each
radiopharmaceutical costs. Conversely, that we create a new APC for each distinct drug or biological in order to
other commenters disagreed with the radiopharmaceutical product, we do not determine the mean units per day of the
idea to pay separately for diagnostic believe it is appropriate to create unique drug or biological in terms of the HCPCS
radiopharmaceuticals that cost more APCs for diagnostic code with the lowest dosage descriptor.
than $500 because they claimed that radiopharmaceuticals. Diagnostic The following drugs did not have
this would incentivize radiopharmaceuticals function as pricing information available for the
radiopharmaceutical companies to raise supplies during a diagnostic test or ASP methodology for this CY 2020
their prices to exceed the threshold. procedure and following our OPPS/ASC proposed rule, and as is our
Additionally, commenters stated that longstanding packaging policy, these current policy for determining the
nearly 95 percent of items are packaged under the OPPS, packaging status of other drugs, we used
radiopharmaceuticals are priced less which supports our goal of making the mean unit cost available from the
than $500, so creating a diagnostic OPPS payments consistent with those of CY 2018 claims data to make the
radiopharmaceutical packaging a prospective payment system, which proposed packaging determinations for
threshold of $500 would not be packages costs into a single aggregate these drugs: HCPCS code J1840
appropriate. payment for a service, encounter, or (Injection, kanamycin sulfate, up to 500
Response: We thank commenters for episode of care. Furthermore, diagnostic mg); HCPCS code J1850 (Injection,
their responses. We continue to believe radiopharmaceuticals function as kanamycin sulfate, up to 75 mg); HCPCS
that diagnostic radiopharmaceuticals are supplies that enable the provision of an code J3472 (Injection, hyaluronidase,
an integral component of many nuclear independent service, and are not ovine, preservative free, per 1000 usp
medicine and imaging procedures and themselves the primary therapeutic units); HCPCS code J7100 (Infusion,
charges associated with them should be modality, and therefore, we do not dextran 40, 500 ml); and HCPCS code
reported on hospital claims to the extent believe they warrant separate payment J7110 (Infusion, dextran 75, 500 ml).
they are used. Therefore, the payment through creation of a unique APC at this For all other drugs and biologicals
for the radiopharmaceuticals is reflected time. We welcome ongoing dialogue that have HCPCS codes describing
within the payment for the primary with stakeholders regarding suggestions different doses, we then multiplied the
procedure. In response to the comment for payment changes for consideration proposed weighted average ASP+6
regarding the proposed cost of the for future rulemaking. percent per unit payment amount across
packaged procedure in CY 2020 being all dosage levels of a specific drug or
d. Packaging Determination for HCPCS
substantially lower than the payment biological by the estimated units per day
Codes That Describe the Same Drug or
rate of the radiopharmaceutical when it for all HCPCS codes that describe each
Biological but Different Dosages
was on pass-through payment status drug or biological from our claims data
plus the payment rate of the procedure In the CY 2010 OPPS/ASC final rule to determine the estimated per day cost
associated with the with comment period (74 FR 60490 of each drug or biological at less than or
radiopharmaceutical, we note the rates through 60491), we finalized a policy to equal to the proposed CY 2020 drug
are established in a manner that uses the make a single packaging determination packaging threshold of $130 (so that all
average, more specifically the geometric for a drug, rather than an individual HCPCS codes for the same drug or
mean, of reported costs to furnish the HCPCS code, when a drug has multiple biological would be packaged) or greater
procedure based on data submitted to HCPCS codes describing different than the proposed CY 2020 drug
CMS from all hospitals paid under the dosages because we believe that packaging threshold of $130 (so that all
OPPS to set the payment rate for the adopting the standard HCPCS code- HCPCS codes for the same drug or
service. Accordingly, the costs that are specific packaging determinations for biological would be separately payable).
calculated by Medicare reflect the these codes could lead to inappropriate The proposed packaging status of each
average costs of items and services that payment incentives for hospitals to drug and biological HCPCS code to
are packaged into a primary procedure report certain HCPCS codes instead of which this methodology would apply in
and will not necessarily equal the sum others. We continue to believe that CY 2020 was displayed in Table 18 of
of the cost of the primary procedure and making packaging determinations on a the proposed rule (84 FR 39499).
the average sales price of items and drug-specific basis eliminates payment We did not receive any public
services because the billing patterns of incentives for hospitals to report certain comments on this proposal. Therefore,
hospitals may not reflect that a HCPCS codes for drugs and allows for CY 2020, we are finalizing our CY
particular item or service is always hospitals flexibility in choosing to 2020 proposal, without modification, to
billed with the primary procedure. report all HCPCS codes for different continue our policy to make packaging
Furthermore, the costs will be based on dosages of the same drug or only the determinations on a drug-specific basis,
the reported costs submitted to lowest dosage HCPCS code. Therefore, rather than a HCPCS code-specific basis,
Medicare by the hospitals and not the we proposed to continue our policy to for those HCPCS codes that describe the
list price established by the make packaging determinations on a same drug or biological but different
manufacturer. Claims data that include drug-specific basis, rather than a HCPCS dosages. Table 44 below displays the
the radiopharmaceutical packaged with code-specific basis, for those HCPCS final packaging status of each drug and
the associated procedure reflect the codes that describe the same drug or biological HCPCS code to which the
combined cost of the procedure and the biological but different dosages in CY finalized methodology applies for CY
radiopharmaceutical used in the 2020. 2020.
2. Payment for Drugs and Biologicals covered outpatient drug’’ (known as a • A drug or biological for which
Without Pass-Through Status That Are SCOD) is defined as a covered payment is first made on or after
Not Packaged outpatient drug, as defined in section January 1, 2003, under the transitional
1927(k)(2) of the Act, for which a pass-through payment provision in
a. Payment for Specified Covered
separate APC has been established and section 1833(t)(6) of the Act.
Outpatient Drugs (SCODs) and Other
Separately Payable Drugs and
that either is a radiopharmaceutical • A drug or biological for which a
agent or is a drug or biological for which temporary HCPCS code has not been
Biologicals
payment was made on a pass-through assigned.
Section 1833(t)(14) of the Act defines basis on or before December 31, 2002. • During CYs 2004 and 2005, an
certain separately payable Under section 1833(t)(14)(B)(ii) of the orphan drug (as designated by the
radiopharmaceuticals, drugs, and Act, certain drugs and biologicals are Secretary).
biologicals and mandates specific designated as exceptions and are not Section 1833(t)(14)(A)(iii) of the Act
payments for these items. Under section included in the definition of SCODs. requires that payment for SCODs in CY
ER12NO19.072</GPH>
1833(t)(14)(B)(i) of the Act, a ‘‘specified These exceptions are— 2006 and subsequent years be equal to
the average acquisition cost for the drug provision to other separately payable that a particular add-on amount be
for that year as determined by the drugs and biologicals, consistent with applied to WAC-based pricing for this
Secretary, subject to any adjustment for our history of using the same payment initial period when ASP data is not
overhead costs and taking into account methodology for all separately payable available. Consistent with section
the hospital acquisition cost survey data drugs and biologicals. 1847A(c)(4) of the Act, in the CY 2019
collected by the Government For a detailed discussion of our OPPS PFS final rule (83 FR 59661 to 59666),
Accountability Office (GAO) in CYs drug payment policies from CY 2006 to we finalized a policy that, effective
2004 and 2005, and later periodic CY 2012, we refer readers to the CY January 1, 2019, WAC-based payments
surveys conducted by the Secretary as 2013 OPPS/ASC final rule with for Part B drugs made under section
set forth in the statute. If hospital comment period (77 FR 68383 through 1847A(c)(4) of the Act will utilize a 3-
acquisition cost data are not available, 68385). In the CY 2013 OPPS/ASC final percent add-on in place of the 6-percent
the law requires that payment be equal rule with comment period (77 FR 68386 add-on that was being used according to
to payment rates established under the through 68389), we first adopted the our policy in effect as of CY 2018. For
methodology described in section statutory default policy to pay for the CY 2019 OPPS, we followed the
1842(o), section 1847A, or section separately payable drugs and biologicals same policy finalized in the CY 2019
1847B of the Act, as calculated and at ASP+6 percent based on section PFS final rule (83 FR 59661 to 59666).
adjusted by the Secretary as necessary 1833(t)(14)(A)(iii)(II) of the Act. We For the CY 2020 OPPS, we proposed to
for purposes of paragraph (14). We refer have continued this policy of paying for continue to utilize a 3 percent add-on
to this alternative methodology as the separately payable drugs and biologicals instead of a 6-percent add-on for WAC-
‘‘statutory default.’’ Most physician Part at the statutory default for CYs 2014 based drugs pursuant to our authority
B drugs are paid at ASP+6 percent in through 2019. under section 1833(t)(14)(A)(iii)(II) of
accordance with section 1842(o) and b. CY 2020 Payment Policy the Act, which provides, in part, that
section 1847A of the Act. the amount of payment for a SCOD is
Section 1833(t)(14)(E)(ii) of the Act For CY 2020, we proposed to continue
the average price of the drug in the year
provides for an adjustment in OPPS our payment policy that has been in
established under section 1847A of the
payment rates for SCODs to take into effect since CY 2013 to pay for
Act. We also proposed to apply this
account overhead and related expenses, separately payable drugs and biologicals
provision to non-SCOD separately
such as pharmacy services and handling at ASP+6 percent in accordance with
payable drugs. Because we proposed to
costs. Section 1833(t)(14)(E)(i) of the Act section 1833(t)(14)(A)(iii)(II) of the Act
establish the average price for a WAC-
required MedPAC to study pharmacy (the statutory default). We proposed to
based drug under section 1847A of the
overhead and related expenses and to continue to pay for separately payable
Act as WAC+3 percent instead of
make recommendations to the Secretary nonpass-through drugs acquired with a
340B discount at a rate of ASP minus WAC+6 percent, we believe it is
regarding whether, and if so how, a appropriate to price separately payable
payment adjustment should be made to 22.5 percent, but we also solicited
comments on alternative policies as WAC-based drugs at the same amount
compensate hospitals for overhead and under the OPPS. We proposed that, if
related expenses. Section well as the appropriate remedy for CYs
2018 and 2019 in the event that we do finalized, our proposal to pay for drugs
1833(t)(14)(E)(ii) of the Act authorizes or biologicals at WAC+3 percent, rather
the Secretary to adjust the weights for not prevail on appeal in the pending
litigation, as discussed in greater detail than WAC+6 percent, would apply
ambulatory procedure classifications for whenever WAC-based pricing is used
SCODs to take into account the findings later in this section. We refer readers to
the CY 2018 OPPS/ASC final rule with for a drug or biological. For drugs and
of the MedPAC study.66
comment period (82 FR 59353 through biologicals that would otherwise be
It has been our policy since CY 2006
to apply the same treatment to all 59371) and the CY 2019 OPPS/ASC subject to a payment reduction because
separately payable drugs and final rule with comment period (83 FR they were acquired under the 340B
biologicals, which include SCODs, and 58979 through 58981) for more Program, the 340B Program rate (in this
drugs and biologicals that are not information about how the payment rate case, WAC minus 22.5 percent) would
SCODs. Therefore, we apply the for drugs acquired with a 340B discount continue to apply. We refer readers to
payment methodology in section was established. the CY 2019 PFS final rule (83 FR 59661
1833(t)(14)(A)(iii) of the Act to SCODs, In the case of a drug or biological to 59666) for additional background on
as required by statute, but we also apply during an initial sales period in which this proposal.
it to separately payable drugs and data on the prices for sales for the drug Comment: Several commenters
biologicals that are not SCODs, which is or biological are not sufficiently opposed our proposal to utilize a 3
a policy determination rather than a available from the manufacturer, section percent add-on instead of a 6 percent
statutory requirement. In this CY 2020 1847A(c)(4) of the Act permits the add-on for drugs that are paid based on
OPPS/ASC proposed rule, we proposed Secretary to make payments that are WAC under section 1847A(c)(4) of the
to apply section 1833(t)(14)(A)(iii)(II) of based on WAC. Under section Act. Commenters were concerned that
the Act to all separately payable drugs 1833(t)(14)(A)(iii)(II), the amount of paying less for new drugs may
and biologicals, including SCODs. payment for a separately payable drug discourage the use of new innovative
Although we do not distinguish SCODs equals the average price for the drug for drugs and inhibit access to patients.
in this discussion, we note that we are the year established under, among other Commenters also noted that the
required to apply section authorities, section 1847A of the Act. As sequestration cuts further decreased
1833(t)(14)(A)(iii)(II) of the Act to explained in greater detail in the CY payment for drugs, which leaves a
SCODs, but we also are applying this 2019 PFS final rule, under section smaller margin for providers.
1847A(c)(4), although payments may be Additionally, some commenters believe
66 Medicare Payment Advisory Committee. June based on WAC, unlike section 1847A(b) that this proposal would only negatively
2005 Report to the Congress. Chapter 6: Payment for of the Act (which specifies that impact providers, and would not
pharmacy handling costs in hospital outpatient
departments. Available at: http://www.medpac.gov/
payments using ASP or WAC must be address increasing drug costs.
docs/default-source/reports/June05_ made with a 6 percent add-on), section Additionally, commenters suggested
ch6.pdf?sfvrsn=0. 1847A(c)(4) of the Act does not require excluding certain drugs and biologicals
from this policy, such as biosimilar website), which illustrate the proposed continue this same payment policy for
biological products or CY 2020 payment of ASP+6 percent for biosimilar biological products.
radiopharmaceuticals. These separately payable nonpass-through In the CY 2018 OPPS/ASC final rule
commenters felt as though the policy drugs and biologicals and ASP+6 with comment period (82 FR 59351), we
was appropriate for drugs in general, but percent for pass-through drugs and noted that, with respect to comments we
not for the previously mentioned biologicals, reflect either ASP received regarding OPPS payment for
products, which could potentially offer information that is the basis for biosimilar biological products, in the CY
savings to the Medicare program if calculating payment rates for drugs and 2018 PFS final rule, CMS finalized a
utilized in the case of biosimilars or biologicals in the physician’s office policy to implement separate HCPCS
which have a higher associated setting effective April 1, 2019, or WAC, codes for biosimilar biological products.
overhead in the case of AWP, or mean unit cost from CY 2018 Therefore, consistent with our
radiopharmaceuticals. Commenters also claims data and updated cost report established OPPS drug, biological, and
discussed value-based payments as a information available for the proposed radiopharmaceutical payment policy,
more meaningful change than this rule. In general, these published HCPCS coding for biosimilar biological
proposal. payment rates are not the same as the products is based on the policy
Response: We appreciate the actual January 2020 payment rates. This established under the CY 2018 PFS final
commenter’s feedback. We continue to is because payment rates for drugs and rule.
believe our policy will improve biologicals with ASP information for In the CY 2018 OPPS/ASC final rule
Medicare payment rates by better January 2020 will be determined with comment period (82 FR 59351),
aligning payments with drug acquisition through the standard quarterly process after consideration of the public
costs, which is of the utmost importance where ASP data submitted by comments we received, we finalized our
to CMS as Part B drug spending has manufacturers for the third quarter of proposed payment policy for biosimilar
grown significantly. WAC plus a 3 CY 2019 (July 1, 2019 through biological products, with the following
percent add-on is more comparable to September 30, 2019) will be used to set technical correction: All biosimilar
an ASP plus a 6 percent add-on, since the payment rates that are released for biological products are eligible for pass-
the WAC pricing does not reflect many the quarter beginning in January 2020 through payment and not just the first
of the discounts associated with ASP, near the end of December 2019. In biosimilar biological product for a
such as rebates. This proposal to addition, payment rates for drugs and reference product. In the CY 2019
continue to utilize a 3 percent add-on biologicals in Addenda A and B to the OPPS/ASC proposed rule (83 FR 37123),
instead of a 6 percent add-on for drugs proposed rule for which there was no for CY 2019, we proposed to continue
that are paid based on WAC under ASP information available for April the policy in place from CY 2018 to
section 1847A(c)(4) of the Act is 2019 are based on mean unit cost in the make all biosimilar biological products
consistent with MedPAC’s previous available CY 2018 claims data. If ASP eligible for pass-through payment and
analysis and recommendations in its information becomes available for not just the first biosimilar biological
June 2017 Report to the Congress. This payment for the quarter beginning in product for a reference product.
policy is not meant to provide January 2020, we will price payment for In addition, in CY 2018, we adopted
preferential treatment to any specific these drugs and biologicals based on a policy that biosimilars without pass-
drug or biological, but to address WAC their newly available ASP information. through payment status that were
based payment under 1847A of the Act. Finally, there may be drugs and acquired under the 340B Program would
We remind commenters that this biologicals that have ASP information be paid the ASP of the biosimilar minus
proposal still results in a net payment available for the proposed rule 22.5 percent of the reference product’s
greater than the WAC. In addition, this (reflecting April 2019 ASP data) that do ASP (82 FR 59367). We adopted this
policy decreases the beneficiary cost- not have ASP information available for policy in the CY 2018 OPPS/ASC final
sharing for these drugs. This could help the quarter beginning in January 2020. rule with comment period because we
Medicare beneficiaries afford to pay for These drugs and biologicals would then believe that biosimilars without pass-
new drugs by reducing their out-of- be paid based on mean unit cost data through payment status acquired under
pocket expenses. derived from CY 2018 hospital claims. the 340B Program should be treated in
After consideration of the public Therefore, the proposed payment rates the same manner as other drugs and
comments we received, we are listed in Addenda A and B to the biologicals acquired through the 340B
finalizing our proposal, without proposed rule are not for January 2020 Program. As noted earlier, biosimilars
modification, to utilize a 3 percent add- payment purposes and are only with pass-through payment status are
on instead of a 6 percent add-on for illustrative of the CY 2020 OPPS paid their own ASP+6 percent of the
drugs that are paid based on WAC under payment methodology using the most reference product’s ASP. Separately
section 1847A(c)(4) of the Act pursuant recently available information at the payable biosimilars that do not have
to our authority under section time of issuance of the proposed rule. pass-through payment status and are not
1833(t)(14)(A)(iii)(II) of the Act. acquired under the 340B Program are
We proposed that payments for c. Biosimilar Biological Products also paid their own ASP+6 percent of
separately payable drugs and biologicals For CY 2016 and CY 2017, we the reference product’s ASP. If a
are included in the budget neutrality finalized a policy to pay for biosimilar biosimilar does not have ASP pricing,
adjustments, under the requirements in biological products based on the but instead has WAC pricing, the WAC
section 1833(t)(9)(B) of the Act. We also payment allowance of the product as pricing add-on of either 3 percent or 6
proposed that the budget neutral weight determined under section 1847A of the percent is calculated from the
scalar not be applied in determining Act and to subject nonpass-through biosimilar’s WAC and is not calculated
payments for these separately paid biosimilar biological products to our from the WAC price of the reference
drugs and biologicals. annual threshold-packaged policy (for product.
We note that separately payable drug CY 2016, 80 FR 70445 through 70446; As noted in the CY 2019 OPPS/ASC
and biological payment rates listed in and for CY 2017, 81 FR 79674). In the proposed rule (83 FR 37123), several
Addenda A and B to the proposed rule CY 2018 OPPS/ASC proposed rule (82 stakeholders raised concerns to us that
(available via the internet on the CMS FR 33630), for CY 2018, we proposed to the current payment policy for
biosimilars acquired under the 340B appropriate remedy in the event of an in order to increase competition and
Program could unfairly lower the OPPS adverse decision on appeal in the reduce costs for beneficiaries.
payment for biosimilars not on pass- litigation related to our policy for Commenters believe that this proposal
through payment status because the payment of 340B-acquired drugs and could potentially lead to increased
payment reduction would be based on biologicals, including on whether Medicare spending on biosimilars, and
the reference product’s ASP, which paying for 340B-acquired biosimilars at commenters articulated concerns that
would generally be expected to be ASP+3 percent of the reference therapies will be interrupted by
priced higher than the biosimilar, thus product’s ASP would be an appropriate providers switching from innovator
resulting in a more significant reduction policy in line with that discussion. Our products to biosimilars.
in payment than if the 22.5 percent was policy for 340B-acquired drugs and Response: As discussed in the CY
calculated based on the biosimilar’s biologicals is discussed in V.B.6. of this 2019 OPPS/ASC final rule with
ASP. We agreed with stakeholders that final rule with comment period. comment period (83 FR 58977), we
the current payment policy could Comment: Many commenters continue to believe that eligibility for
unfairly lower the price of biosimilars supported our biosimilar proposal to pass-through payment status reflects the
without pass-through payment status continue our policy from CY 2018 to unique, complex nature of biosimilars
that are acquired under the 340B make biosimilar biological products and is important as biosimilars become
Program. In addition, we believe that eligible for pass-through payment and established in the market, just as it is for
these changes would better reflect the not just the first biosimilar biological all other new drugs and biologicals.
resources and production costs that product for a reference product. Additionally, we are not convinced that
biosimilar manufacturers incur. We also Commenters believe this would making all biosimilar biological
believe this approach is more consistent continue to improve access to these products eligible for pass-through
with the payment methodology for treatments and lower costs, and they payment status will lead to
340B-acquired drugs and biologicals, for stressed the importance of consistency inappropriate treatment changes from a
which the 22.5 percent reduction is with biosimilar payment. Commenters reference product without pass-through
calculated based on the drug or stated that there is a large disparity payment to a biosimilar product with
biological’s ASP, rather than the ASP of between payment for biosimilars and pass-through payment. Under current
another product. In addition, we believe their reference products and that this policy, both originator products and
that paying for biosimilars acquired proposal helps to mitigate that concern. their associated biosimilars receive the
under the 340B Program at ASP minus Commenters also advocated for same percentage add-on amount,
22.5 percent of the biosimilar’s ASP, additional proposals to increase the regardless of the ASP of the product;
rather than 22.5 percent of the reference utilization of biosimilars, such as therefore, we do not believe that
product’s ASP, will more closely extended pass-through payment. therapies will be interrupted by
approximate hospitals’ acquisition costs Response: We appreciate the providers switching from innovator
for these products. commenters’ support. We believe this products to biosimilars. We note that
Accordingly, in the CY 2019 OPPS/ proposal will continue to encourage Section 351(i) of the Public Health
ASC proposed rule (83 FR 37123), for competition, lower costs for the Service Act defines biosimilarity to
CY 2019, we proposed changes to our Medicare program and beneficiaries, mean ‘‘that the biological product is
Medicare Part B drug payment and eliminate any financial incentive to highly similar to the reference product
methodology for biosimilars acquired utilize one product over another. We notwithstanding minor differences in
under the 340B Program. Specifically, will continue to assess biosimilar clinically inactive components’’ and
for CY 2019 and subsequent years, in utilization under the OPPS. that ‘‘there are no clinically meaningful
accordance with section Comment: Several commenters differences between the biological
1833(t)(14)(A)(iii)(II) of the Act, we supported our proposal to pay nonpass- product and the reference product in
proposed to pay nonpass-through through biosimilars acquired under the terms of the safety, purity, and potency
biosimilars acquired under the 340B 340B Program at ASP minus 22.5 of the product.’’ Therefore, concerns
Program at ASP minus 22.5 percent of percent of the biosimilar’s ASP in that therapy would be interrupted by a
the biosimilar’s ASP instead of the accordance with section switch from an innovator product to a
biosimilar’s ASP minus 22.5 percent of 1833(t)(14)(A)(iii)(II) of the Act. biosimilar are unfounded as the
the reference product’s ASP. This Response: We appreciate the biosimilar has been determined to have
proposal was finalized without commenters’ support. Please see section no clinically meaningful difference from
modification in the CY 2019 OPPS/ASC V.B.6 for a discussion of payment for the reference product. In regards to the
final rule with comment period (83 FR biosimilars aquired under 340B. increased payment of biosimilars under
58977). Comment: Some commenters did not this policy, overall increased
For CY 2020, we proposed to continue support our proposal to continue our CY competition due to more biosimilars on
our policy to make all biosimilar 2018 policy to make all biosimilar the market as a result of this policy is
biological products eligible for pass- biological products eligible for pass- expected to drive payments down for
through payment and not just the first through payment and not just the first both Medicare and for beneficiaries over
biosimilar biological product for a biosimilar biological product for a time, even if there may be increased
reference product. We also proposed to reference product. Commenters believe spending on biosimilars in the short
continue our policy to pay nonpass- biosimilars are not new or innovative term.
through biosimilars acquired under the drugs or biologicals, because they For CY 2020, after consideration of
340B Program at the biosimilar’s ASP believe the originator product is the the public comments we received, we
minus 22.5 percent of the biosimilar’s only new and innovative product. are finalizing our proposed payment
ASP instead of the biosimilar’s ASP Therefore, they stated biosimilars policy for biosimilar products, without
minus 22.5 percent of the reference should not be considered for pass- modification, to continue the policy
product’s ASP, in accordance with through payment status. Additionally, established in CY 2018 to make all
section 1833(t)(14)(A)(iii)(II) of the Act. commenters stated there should be a biosimilar biological products eligible
In addition, as discussed further below, level playing field between biosimilars for pass-through payment and not just
we solicited comments on the and their originator reference products the first biosimilar biological product
for a reference product. We also are radiopharmaceuticals were included in payment. The CY 2019 updated
finalizing our proposal to pay nonpass- Addenda A and B to the proposed rule furnishing fee was $0.220 per unit.
through biosimilars acquired under the (which are available via the internet on For CY 2020, we proposed to pay for
340B Program at the biosimilar’s ASP the CMS website). blood clotting factors at ASP+6 percent,
minus 22.5 percent of the reference Comment: Commenters supported the consistent with our proposed payment
product’s ASP, in accordance with continuation of the policy to pay ASP+6 policy for other nonpass-through,
section 1833(t)(14)(A)(iii)(II) of the Act. percent for radiopharmaceuticals, if separately payable drugs and
available, and to base payment on the biologicals, and to continue our policy
3. Payment Policy for Therapeutic mean unit cost derived from hospital
Radiopharmaceuticals for payment of the furnishing fee using
claims data when not available.
In the CY 2020 OPPS/ASC proposed an updated amount. Our policy to pay
Commenters also stressed the high
rule (84 FR 39502), for CY 2020, we for a furnishing fee for blood clotting
overhead, handling, compounding and
proposed to continue the payment factors under the OPPS is consistent
storage costs associated with delivering
policy for therapeutic with the methodology applied in the
therapeutic radiopharmaceuticals and
radiopharmaceuticals that began in CY physician’s office and in the inpatient
asked CMS to look into higher payment
2010. We pay for separately payable hospital setting. These methodologies
rates for radiopharmaceuticals or ways
therapeutic radiopharmaceuticals under were first articulated in the CY 2006
to compensate hospitals for the higher
the ASP methodology adopted for OPPS final rule with comment period
overhead and handling costs.
separately payable drugs and Response: We appreciate the (70 FR 68661) and later discussed in the
biologicals. If ASP information is commenters’ support. As previously CY 2008 OPPS/ASC final rule with
unavailable for a therapeutic stated, we continue to believe a single comment period (72 FR 66765). The
radiopharmaceutical, we base payment is appropriate for therapeutic proposed furnishing fee update is based
therapeutic radiopharmaceutical radiopharmaceuticals and that the on the percentage increase in the
payment on mean unit cost data derived payment rate of ASP+6 percent is Consumer Price Index (CPI) for medical
from hospital claims. We believe that appropriate because it provides care for the 12-month period ending
the rationale outlined in the CY 2010 payment for both the therapeutic with June of the previous year. Because
OPPS/ASC final rule with comment radiopharmaceutical’s acquisition cost the Bureau of Labor Statistics releases
period (74 FR 60524 through 60525) for and the associated costs such as storage the applicable CPI data after the PFS
applying the principles of separately and handling of the and OPPS/ASC proposed rules are
payable drug pricing to therapeutic radiopharmaceuticals. Payment for the published, we were not able to include
radiopharmaceuticals continues to be radiopharmaceutical and the actual updated furnishing fee in the
appropriate for nonpass-through, radiopharmaceutical processing services proposed rules. Therefore, in
separately payable therapeutic is made through the single ASP-based accordance with our policy, as finalized
radiopharmaceuticals in CY 2020. payment. in the CY 2008 OPPS/ASC final rule
Therefore, we proposed for CY 2020 to For CY 2020, after consideration of with comment period (72 FR 66765), we
pay all nonpass-through, separately the public comments we received, we proposed to announce the actual figure
payable therapeutic are finalizing our proposal, without for the percent change in the applicable
radiopharmaceuticals at ASP+6 percent, modification, to continue to pay all CPI and the updated furnishing fee
based on the statutory default described nonpass-through, separately payable calculated based on that figure through
in section 1833(t)(14)(A)(iii)(II) of the therapeutic radiopharmaceuticals at applicable program instructions and
Act. For a full discussion of ASP-based ASP+6 percent. We are also finalizing posting on the CMS website at: http://
payment for therapeutic our proposal to continue to rely on CY www.cms.gov/Medicare/Medicare-Fee-
radiopharmaceuticals, we refer readers 2018 mean unit cost data derived from for-Service-Part-B-Drugs/
to the CY 2010 OPPS/ASC final rule hospital claims data for payment rates McrPartBDrugAvgSalesPrice/
with comment period (74 FR 60520 for therapeutic radiopharmaceuticals for index.html.
through 60521). We also proposed to which ASP data are unavailable. The CY Comment: Commenters supported
rely on CY 2018 mean unit cost data 2020 final payment rates for nonpass- CMS’ proposal to continue to pay for
derived from hospital claims data for through separately payable therapeutic blood clotting factors at ASP+6 percent
payment rates for therapeutic radiopharmaceuticals are included in plus a blood clotting factor furnishing
radiopharmaceuticals for which ASP Addenda A and B to this final rule with fee in the hospital outpatient
data are unavailable and to update the comment period (which are available department.
payment rates for separately payable via the internet on the CMS website).
therapeutic radiopharmaceuticals Response: We appreciate the
according to our usual process for 4. Payment for Blood Clotting Factors commenters’ support.
updating the payment rates for For CY 2019, we provided payment After consideration of the public
separately payable drugs and biologicals for blood clotting factors under the same comments we received, we are
on a quarterly basis if updated ASP methodology as other nonpass-through finalizing our proposal, without
information is unavailable. For a separately payable drugs and biologicals modification, to provide payment for
complete history of the OPPS payment under the OPPS and continued paying blood clotting factors under the same
policy for therapeutic an updated furnishing fee (83 FR methodology as other separately payable
radiopharmaceuticals, we refer readers 58979). That is, for CY 2019, we drugs and biologicals under the OPPS
to the CY 2005 OPPS final rule with provided payment for blood clotting and to continue payment of an updated
comment period (69 FR 65811), the CY factors under the OPPS at ASP+6 furnishing fee. We will announce the
2006 OPPS final rule with comment percent, plus an additional payment for actual figure of the percent change in
period (70 FR 68655), and the CY 2010 the furnishing fee. We note that when the applicable CPI and the updated
OPPS/ASC final rule with comment blood clotting factors are provided in furnishing fee calculation based on that
period (74 FR 60524). The proposed CY physicians’ offices under Medicare Part figure through the applicable program
2020 payment rates for nonpass- B and in other Medicare settings, a instructions and posting on the CMS
through, separately payable therapeutic furnishing fee is also applied to the website.
5. Payment for Nonpass-Through Drugs, to ASP minus 22.5 percent. We stated the CY 2018 OPPS/ASC proposed rule.
Biologicals, and Radiopharmaceuticals that our goal was to make Medicare However, we later heard from
With HCPCS Codes But Without OPPS payment for separately payable drugs stakeholders that there had been some
Hospital Claims Data more aligned with the resources confusion about this issue. We clarified
For CY 2020, we proposed to continue expended by hospitals to acquire such in the CY 2019 proposed rule that the
to use the same payment policy as in CY drugs, while recognizing the intent of 340B payment adjustment applies to
2019 for nonpass-through drugs, the 340B Program to allow covered drugs that are priced using either WAC
biologicals, and radiopharmaceuticals entities, including eligible hospitals, to or AWP, and it has been our policy to
with HCPCS codes but without OPPS stretch scarce resources in ways that subject 340B-acquired drugs that use
enable hospitals to continue providing these pricing methodologies to the 340B
hospital claims data, which describes
access to care for Medicare beneficiaries payment adjustment since the policy
how we determine the payment rate for
and other patients. Critical access was first adopted. The 340B payment
drugs, biologicals, or
hospitals are not included in this 340B adjustment for WAC-priced drugs is
radiopharmaceuticals without an ASP.
policy change because they are paid WAC minus 22.5 percent and AWP-
For a detailed discussion of the payment
under section 1834(g) of the Act. We priced drugs have a payment rate of
policy and methodology, we refer
also excepted rural sole community 69.46 percent of AWP when the 340B
readers to the CY 2016 OPPS/ASC final
hospitals, children’s hospitals, and PPS- payment adjustment is applied. The
rule with comment period (80 FR 70442
exempt cancer hospitals from the 340B 69.46 percent of AWP is calculated by
through 70443). The proposed CY 2020
payment adjustment in CY 2018. In first reducing the original 95 percent of
payment status of each of the nonpass- addition, as stated in the CY 2018
through drugs, biologicals, and AWP price by 6 percent to generate a
OPPS/ASC final rule with comment value that is similar to ASP or WAC
radiopharmaceuticals with HCPCS period, this policy change does not
codes but without OPPS hospital claims with no percentage markup. Then we
apply to drugs on pass-through payment apply the 22.5 percent reduction to
data is listed in Addendum B to the status, which are required to be paid
proposed rule, which is available via the ASP/WAC-similar AWP value to obtain
based on the ASP methodology, or the 69.46 percent of AWP, which is
internet on the CMS website. vaccines, which are excluded from the
We did not receive any comments on similar to either ASP minus 22.5
340B Program. percent or WAC minus 22.5 percent.
our proposal. Therefore, we are In the CY 2017 OPPS/ASC final rule
finalizing our CY 2020 proposal without The number of separately payable drugs
with comment period (81 FR 79699 receiving WAC or AWP pricing that are
modification, including our proposal to through 79706), we implemented
assign drug or biological products status affected by the 340B payment
section 603 of the Bipartisan Budget Act adjustment is small—consisting of less
indicator ‘‘K’’ and pay for them of 2015. As a general matter, applicable
separately for the remainder of CY 2020 than 10 percent of all separately payable
items and services furnished in certain Medicare Part B drugs in April 2018.
if pricing information becomes off-campus outpatient departments of a
available. The CY 2020 payment status provider on or after January 1, 2017 are Furthermore, data limitations
of each of the nonpass-through drugs, not considered covered outpatient previously inhibited our ability to
biologicals, and radiopharmaceuticals services for purposes of payment under identify which drugs were acquired
with HCPCS codes but without OPPS the OPPS and are paid ‘‘under the under the 340B Program in the Medicare
hospital claims data is listed in applicable payment system,’’ which is OPPS claims data. This lack of
Addendum B to this final rule with generally the Physician Fee Schedule information within the claims data has
comment period, which is available via (PFS). However, consistent with our limited researchers’ and our ability to
the internet on the CMS website. policy to pay separately payable, precisely analyze differences in
covered outpatient drugs and biologicals acquisition cost of 340B and non-340B
6. CY 2020 OPPS Payment Methodology acquired drugs with Medicare claims
for 340B Purchased Drugs acquired under the 340B Program at
ASP minus 22.5 percent, rather than data. Accordingly, in the CY 2018
In the CY 2018 OPPS/ASC proposed ASP+6 percent, when billed by a OPPS/ASC proposed rule (82 FR 33633),
rule (82 FR 33558 through 33724), we hospital paid under the OPPS that is not we stated our intent to establish a
proposed changes to the Medicare Part excepted from the payment adjustment, modifier, to be effective January 1, 2018,
B drug payment methodology for 340B in the CY 2019 OPPS/ASC final rule for hospitals to report with separately
hospitals. We proposed these changes to with comment period (83 FR 59015 payable drugs that were not acquired
better, and more accurately, reflect the through 59022), we finalized a policy to under the 340B Program. Because a
resources and acquisition costs that pay ASP minus 22.5 percent for 340B- significant portion of hospitals paid
these hospitals incur. We believe that acquired drugs and biologicals under the OPPS participate in the 340B
such changes would allow Medicare furnished in nonexcepted off-campus Program, we stated our belief that it is
beneficiaries (and the Medicare PBDs paid under the PFS. We adopted appropriate to presume that a separately
program) to pay a more appropriate this payment policy effective for CY payable drug reported on an OPPS claim
amount when hospitals participating in 2019 and for subsequent years. was purchased under the 340B Program,
the 340B Program furnish drugs to As discussed in the CY 2019 OPPS/ unless the hospital identifies that the
Medicare beneficiaries that are ASC proposed rule (83 FR 37125), drug was not purchased under the 340B
purchased under the 340B Program. another topic that was brought to our Program. We stated in the CY 2018
Subsequently, in the CY 2018 OPPS/ attention since we finalized the proposed rule that we intended to
ASC final rule with comment period (82 payment adjustment for 340B-acquired provide further details about this
FR 59369 through 59370), we finalized drugs in the CY 2018 OPPS/ASC final modifier in the CY 2018 OPPS/ASC
our proposal and adjusted the payment rule with comment period was whether final rule with comment period and/or
rate for separately payable drugs and drugs that do not have ASP pricing but through subregulatory guidance,
biologicals (other than drugs on pass- instead receive WAC or AWP pricing including guidance related to billing for
through payment status and vaccines) are subject to the 340B payment dually eligible beneficiaries (that is,
acquired under the 340B Program from adjustment. We did not receive public beneficiaries covered under Medicare
average sales price (ASP) plus 6 percent comments on this topic in response to and Medicaid) for whom covered
entities do not receive a discount under proposed to pay nonpass-through his authority.69 Rather than ordering
the 340B Program. As discussed in the biosimilars acquired under the 340B HHS to pay plaintiffs their alleged
CY 2018 OPPS/ASC final rule with Program at the biosimilar’s ASP minus underpayments, however, the district
comment period (82 FR 59369 through 22.5 percent of the biosimilar’s ASP. We court recognized that crafting a remedy
59370), to effectuate the payment also proposed for CY 2019 that is ‘‘no easy task, given Medicare’s
adjustment for 340B-acquired drugs, Medicare would continue to pay for complexity,’’ 70 and initially remanded
CMS implemented modifier ‘‘JG’’, drugs or biologicals that were not the issue to HHS to devise an
effective January 1, 2018. Hospitals paid purchased with a 340B discount at appropriate remedy while also retaining
under the OPPS, other than a type of ASP+6 percent. jurisdiction. The district court
hospital excluded from the OPPS (such As stated earlier, to effectuate the acknowledged that ‘‘if the Secretary
as critical access hospitals or those payment adjustment for 340B-acquired were to retroactively raise the 2018 and
hospitals paid under the Maryland drugs, CMS implemented modifier ‘‘JG’’, 2019 340B rates, budget neutrality
waiver), or excepted from the 340B drug effective January 1, 2018. For CY 2019, would require him to retroactively
payment policy for CY 2018, are we proposed that hospitals paid under lower the 2018 and 2019 rates for other
required to report modifier ‘‘JG’’ on the the OPPS, other than a type of hospital Medicare Part B products and
same claim line as the drug HCPCS code excluded from the OPPS, or excepted services.’’ 71 Id. at 19. ‘‘And because
to identify a 340B-acquired drug. For CY from the 340B drug payment policy for HHS has already processed claims
2018, rural sole community hospitals, CY 2018, continue to be required to under the previous rates, the Secretary
children’s hospitals and PPS-exempt report modifier ‘‘JG’’ on the same claim would potentially be required to recoup
cancer hospitals are excepted from the line as the drug HCPCS code to identify certain payments made to providers; an
340B payment adjustment. These a 340B-acquired drug. We also proposed expensive and time-consuming
hospitals are required to report for CY 2019 that rural sole community prospect.’’ 72
informational modifier ‘‘TB’’ for 340B- hospitals, children’s hospitals, and PPS- CMS respectfully disagreed with the
acquired drugs, and continue to be paid exempt cancer hospitals would continue district court’s understanding of the
ASP+6 percent. to be excepted from the 340B payment scope of its adjustment authority. On
We refer readers to the CY 2018 adjustment. We proposed for CY 2019 July 10, 2019, the district court entered
OPPS/ASC final rule with comment that these hospitals be required to report final judgment, and the agency has filed
period (82 FR 59353 through 59370) for informational modifier ‘‘TB’’ for 340B- its appeal. Nonetheless, CMS is taking
a full discussion and rationale for the acquired drugs, and continue to be paid the steps necessary to craft an
CY 2018 policies and use of modifier ASP+6 percent. In the CY 2019 OPPS/ appropriate remedy in the event of an
‘‘JG’’. ASC final rule with comment period (83 unfavorable decision on appeal.
In the CY 2019 OPPS/ASC proposed FR 58981), after consideration of the Notably, after the proposed rule was
rule (83 FR 37125), for CY 2019, we public comments we received, we issued, CMS announced in the Federal
proposed to continue the 340B Program finalized our proposals without Register (84 FR 51590) its intent to
policies that were implemented in CY modification. conduct a 340B hospital survey to
2018 with the exception of the way we Our CY 2018 and 2019 OPPS payment collect drug acquisition cost data for CY
calculate payment for 340B-acquired policies for 340B-acquired drugs are the 2018 and 2019. Such survey data may
biosimilars (that is, we proposed to pay subject of ongoing litigation. On be used in setting the Medicare payment
for nonpass-through 340B-acquired December 27, 2018, in the case of amount for drugs acquired by 340B
biosimilars at ASP minus 22.5 percent American Hospital Association et al. v. hospitals for cost years going forward,
of the biosimilar’s ASP, rather than of Azar et al., the United States District and also may be used to devise a
the reference product’s ASP). More Court for the District of Columbia remedy for prior years if the district
information on our revised policy for (hereinafter referred to as ‘‘the district court’s ruling is upheld on appeal. The
the payment of biosimilars acquired court’’) concluded in the context of district court itself acknowledged that
through the 340B Program is available reimbursement requests for CY 2018 CMS may base the Medicare payment
in section V.B.2.c. of the CY 2019 OPPS/ that the Secretary exceeded his statutory amount on average acquisition cost
ASC final rule with comment period. authority by adjusting the Medicare when survey data are available. See 348
For CY 2019, we proposed, in payment rates for drugs acquired under F. Supp. 3d at 82. No 340B hospital
accordance with section the 340B Program to ASP minus 22.5 disputed in the rulemakings for CY 2018
1833(t)(14)(A)(iii)(II) of the Act, to pay percent for that year.67 In that same and 2019 that the ASP minus 22.5
for separately payable Medicare Part B decision, the district court recognized percent formula was a conservative
drugs (assigned status indicator ‘‘K’’), the ‘‘‘havoc that piecemeal review of adjustment that represented the
other than vaccines and drugs on pass- OPPS payment could bring about’ in minimum discount that hospitals
through payment status, that meet the light of the budget neutrality receive for drugs acquired through the
definition of ‘‘covered outpatient drug’’ requirement,’’ and ordered 340B program—a significant omission
as defined in section 1927(k) of the Act, supplemental briefing on the because 340B hospitals have their own
that are acquired through the 340B appropriate remedy.68 On May 6, 2019, data regarding their drug acquisition
Program at ASP minus 22.5 percent costs. We thus anticipate that survey
after briefing on remedy, the district
when billed by a hospital paid under data collected for CY 2018 and 2019
court issued an opinion that reiterated
the OPPS that is not excepted from the will confirm that the ASP minus 22.5
that the 2018 rate reduction exceeded
payment adjustment. Medicare Part B percent rate is a conservative measure
the Secretary’s authority, and declared
drugs or biologicals excluded from the that overcompensates 340B hospitals. A
that the rate reduction for 2019 (which
340B payment adjustment include
had been finalized since the Court’s
vaccines (assigned status indicator ‘‘F’’, 69 See May 6, 2019 Memorandum Opinion,
initial order was entered) also exceeded Granting in Part Plaintiffs’ Motion for a Permanent
‘‘L’’ or ‘‘M’’) and drugs with OPPS
Injunction; Remanding the 2018 and 2019 OPPS
transitional pass-through payment 67 American Hosp. Ass’n, et al. v. Azar, et al., No. Rules to HHS at 10–12.
status (assigned status indicator ‘‘G’’). 1:18–cv–2084 (D.D.C. Dec. 27, 2018). 70 Id. at 13.
As discussed in section V.B.2.c. of the 68 Id. at 35 (quoting Amgen, Inc. v. Smith, 357 71 Id. at 19.
CY 2019 OPPS/ASC proposed rule, we F.3d 103, 112 (D.C. Cir. 2004) (citations omitted)). 72 Id. (citing Declaration of Elizabeth Richter).
remedy that relies on such survey data unfavorable decision on appeal. Those ASP+3 percent that commenters believe
could avoid the remedial complexities potential proposals for CY 2021 would would be appropriate for purposes of
discussed below and in the proposed be informed by the comments that CMS addressing CY 2020 payment as an
rule. solicited in the CY 2020 proposed rule. alternative to our proposal above, as
Recognizing Medicare’s complexity in Thus, for CY 2020, we proposed to well as for potential future rulemaking
formulating an appropriate remedy, any continue to pay ASP minus 22.5 percent related to CY 2018 and 2019.
changes to the OPPS must be budget for 340B-acquired drugs, including
neutral, and reversal of the policy when furnished in nonexcepted off- Comments on the Appropriate Payment
change, which raised rates for non-drug campus PBDs paid under the PFS. We Rate for 340B-Acquired Drugs in CY
items and services by an estimated $1.6 proposed to continue the 340B policies 2020
billion for 2018 alone, could have a that were implemented in CY 2018 with Comment: Several commenters
significant economic impact on the the exception of the way we are supported the continuation of the 340B
approximate 3,900 facilities that are calculating payment for 340B-acquired Program policy of ASP minus 22.5
paid for outpatient items and services biosimilars, which is discussed in percent for CY 2020. One commenter
covered under the OPPS. Second, any section V.B.2.c. of the CY 2019 OPPS/ believed the 340B program’s recent
remedy that increases payments to 340B ASC final rule with comment period, as growth may be contributing to the
hospitals is likely to significantly affect well as the policy we finalized in CY consolidation of community oncology
beneficiary cost-sharing. The items and 2019 to pay ASP minus 22.5 percent for practices. This commenter and others
services that could be affected by the 340B-acquired drugs and biologicals asserted that the growth of the 340B
remedy were provided to millions of furnished in nonexcepted off-campus program has resulted in a shift in the
Medicare beneficiaries, who, by statute, PBDs paid under the PFS. site of service for chemotherapy
are required to pay cost-sharing for such In the CY 2020 OPPS/ASC proposed administration from the physician-office
items and services, which is usually 20 rule (84 FR 39504), we also solicited setting to the more costly hospital
percent of the total Medicare payment public comment on the appropriate outpatient setting, since hospitals are
rate. OPPS payment rate for 340B-acquired able to acquire drugs, including
CMS solicited initial public drugs, including whether a rate of oncologic drugs, at a significant
comments on how to formulate a ASP+3 percent could be an appropriate discount under the 340B program.
solution that would account for all of remedial payment amount for these Another commenter believed that the
the complexities the district court drugs, both for CY 2020 and for 340B program is no longer serving its
recognized in the event of an purposes of determining the remedy for intended purpose to help America’s
unfavorable decision on appeal. A CYs 2018 and 2019. This amount would most vulnerable patients access the
summary of the public comments result in payment rates that are well drugs they need. They further asserted
received on a potential remedy is above the actual costs hospitals incur in that instead, 340B profits are being used
included later in this section. In the purchasing 340B drugs, and we for hospitals to make larger profits.
event 340B hospital survey data are not proposed it solely because of the court Response: We appreciate the
used to devise a remedy, we intend to decision. However, to the extent the commenters’ support. We note that
consider this public input to further courts are limiting the size of the comments related to the 340B program
inform the steps that are required under payment reduction the agency can itself are outside the scope of this rule,
the Administrative Procedure Act to permissibly apply, the agency believes it however, we note that we adopted the
provide adequate notice and an could be appropriate to apply a payment 340B payment policy so that our
opportunity for meaningful comment on reduction that is at the upper end of that payment policy would be more in line
our proposed policies, which would limit, to the extent it has been or could with the acquisition costs hospitals
entail devising the specific remedy be clearly defined, given the substantial incur, and thereby lower drug
itself, presenting the specific budget discounts that hospitals receive through expenditures for Medicare beneficiaries
neutrality implications of that remedy the 340B program. For example, absent and the Medicare Trust Fund.
in the proposed rule, and potentially further guidance from the Court of Comment: Many commenters, the
calculating all the different payment Appeals on what it believes is an majority of which represented hospitals
rates under the OPPS for 340B-acquired appropriate ‘‘adjustment’’ amount, CMS or hospital associations, opposed CMS’
drugs, as well as all other items and could look to the district court’s proposal to continue to pay ASP minus
services under the OPPS. (In essence, December 27, 2018 opinion, which cites 22.5 percent for 340B-acquired drugs in
we would need to provide hospitals to payment reductions of 0.2 percent CY 2020. Many of these commenters
with sufficient notice of the impact of and 2.9 percent as ‘‘not significant believe the proposal undermines the
the remedy on their rates to enable them enough’’ to fall outside of the intent and goals of the 340B program
to comment meaningfully on the Secretary’s authority to ‘‘adjust’’ ASP.73 and will have negative impacts on
proposed rule.) Our own best practices This payment rate would apply to 340B- patients and 340B hospitals. One
for preparing notices of proposed acquired drugs and biologicals billed by commenter asserted that CMS should
rulemaking dictate that we begin policy a hospital paid under the OPPS that are pay hospitals participating in the 340B
development in the year before the not excepted from the payment program the statutory default payment
proposed rule is issued, and that we adjustment and to 340B-acquired drugs of ASP+6 percent. Another commenter
begin the rule drafting process in the and biologicals furnished in opposed the proposal on the belief that
first quarter of each year. nonexcepted off-campus PBDs paid it undermines the Public Health Service
In the event of an unfavorable under the PFS. We welcomed public Act (PHSA), which authorized the 340B
decision on appeal, if 340B hospital comments on payment rates other than program and exceeds CMS’ statutory
survey data are not used to devise a authority. Furthermore, a hospital
remedy, as we stated in the CY 2020 73 348 F. Supp. 3d 62, 81 (D.D.C. 2018) (citing to organization commented that the
OPPS/ASC proposed rule, we anticipate payment reductions of 0.2 percent and 2.9 percent application of the reduced payment for
that other decisions have recognized as being
proposing the specific remedy for CYs within the agency’s adjustment authority for
the 340B policy has resulted in negative
2018 and 2019 in the CY 2021 OPPS/ Medicare rates under the inpatient prospective consequences for patients and providers
ASC proposed rule in the event of an payment system). and does not save any money for
Medicare because the policy is payment for 340B-acquired biosimilars, biologicals under the 340B Program for
implemented in a budget-neutral which is discussed in section V.B.2.c. of use in nonexcepted off-campus PBDs,
manner. the CY 2019 OPPS/ASC final rule with we believe that not adjusting payment
Several commenters who opposed the comment period, and would continue exclusively for these departments would
continuation of the 340B program the policy we finalized in CY 2019 to present a significant incongruity
payment policy stated that the district pay ASP minus 22.5 percent for 340B- between the payment amounts for these
court’s ruling showed that the payment acquired drugs and biologicals drugs depending on where they are
reduction is illegal and exceeded the furnished in nonexcepted off-campus furnished. This incongruity would
Administration’s authority. These PBDs paid under the PFS. distort the relative accuracy of the
commenters recommended CMS refrain As noted in the proposed rule (84 FR resource-based payment amounts under
from ‘‘doing more damage’’ to impacted 39504), we are appealing the district the site-specific PFS rates and could
hospitals by continuing the ASP minus court’s decision and are awaiting a result in significant perverse incentives
22.5 percent policy and return to the decision from the Court of Appeals for for hospitals to acquire drugs and
payment rate of ASP+6 percent for CY the District of Columbia Circuit. biologicals under the 340B Program and
2020. Because we hope to prevail on appeal avoid Medicare payment adjustments
Response: As noted in the CY 2018 and have our 340B policy upheld, we that account for the discount by
OPPS/ASC final rule with comment believe it is appropriate to finalize our providing these drugs to patients
period, we continue to believe that ASP proposal of ASP minus 22.5 percent predominantly in nonexcepted off-
minus 22.5 percent for drugs acquired rather than an alternative payment campus PBDs. In light of the significant
through the 340B Program represents amount of either ASP+3 percent or payment differences between excepted
the average minimum discount that ASP+6 percent, and to maintain the and nonexcepted off-campus PBDs, in
340B enrolled hospitals receive and other payment policies we adopted for combination with the potential
better represents acquisition costs. 340B-acquired drugs in the CY 2018 and eligibility for discounts, which result in
We disagree with commenters that the 2019 OPPS final rules with comment reduced costs under the 340B Program
340B payment policy has had a negative period. In the event of an adverse for both kinds of departments, a
impact on Medicare patients; we are not decision on appeal, we solicited public different payment policy for 340B drugs
aware of any access issues related to the comments on the appropriate remedy in the two settings could undermine the
implementation of this policy. Further, for use in the CY 2021 rulemaking. use of the OPPS payment structure in
we note that under the current policy, Those comments are summarized nonexcepted off-campus PBDs. In order
Medicare patients who receive 340B below. We note that in the event 340B to avoid such perverse incentives and
drugs for which the Medicare program hospital survey data are not used to the potential resulting distortions in
paid ASP minus 22.5 percent have devise a remedy, we intend to consider drug payment, pursuant to our authority
much lower cost sharing than if these the following comments to develop an at section 1833(t)(21)(c) of the Act we
beneficiaries received 340B drugs for appropriate remedy to propose in next adopted a policy to identify the PFS as
which the Medicare program paid year’s rulemaking. the ‘‘applicable payment system for
ASP+6 percent. As a result, we continue 340B-acquired drugs and biologicals
to believe that ASP minus 22.5 percent Comments on the CY 2020 Payment
Policy for 340B-Aquired Drugs to Non- and, accordingly, to pay under the PFS
is a reasonable payment rate for these instead of under section 1847A/1842(o)
drugs. Excepted Off-Campus Provider Based
Departments (PBDs) of the Act an amount equal to ASP
In regards to the commenters’ belief minus 22.5 percent for drugs and
that CMS lacks the legal authority to Comment: Many commenters biologicals acquired under the 340B
continue paying a reduced amount for disagreed with CMS’ assertion that 340B Program that are furnished by
drugs and biologicals obtained through hospitals will move drug administration nonexcepted off-campus PBDs. We
the 340B Program and that we should services for 340B-acquired drugs to non- continue to believe this payment policy
pay the statutory default amount of excepted off-campus PBDs if CMS does is necessary to avoid the significant
ASP+6 percent, we refer commenters to not continue to pay for drugs furnished incongruity between the payment
our detailed response regarding our in these settings at the adjusted amount, amounts that would exist for these
statutory authority to require payment and recommended CMS study hospital’s drugs depending upon whether they are
reductions for drugs and biologicals drug administration behavior pre- and furnished by excepted off-campus PBDs
obtained through the 340B Program in post-implementation of the CY 2018 or nonexcepted off-campus PBDs. We
the CY 2018 OPPS/ASC final rule with final rule to confirm this presumption believe we have discretion under
comment period (82 FR 59359 through before finalizing the proposal to section 1833(t)(21)(c) of the Act to
59364), as well as our statements in the continue paying ASP minus 22.5 continue to adjust payments for
proposed rule regarding our appeal of percent for 340B drugs furnished by nonexcepted off-campus PBDs.
the district court’s decision. non-excepted PBDs. Several
After considering these public commenters asserted that CMS should Comments on Use of ASP Plus 3 Percent
comments and the comments not continue with this policy for CY for CY 2020
summarized below, and in light of the 2020 for non-excepted PBDs and stated Comment: Many commenters opposed
fact that we are awaiting a decision on that continuing to do so would be a payment amount of ASP+3 percent as
our appeal in the litigation, for CY 2020, unlawful. a potential remedial payment for 340B-
we are finalizing our proposal, without Response: We appreciate the acquired drugs furnished in CY 2018
modification, to pay ASP minus 22.5 commenters’ input on the proposal to and CY 2019 as well as for CY 2020
percent for 340B-acquired drugs continue to pay at ASP minus 22.5 payments. These commenters believe
including when furnished in percent under the PFS for 340B drugs CMS did not provide a rationale to
nonexcepted off-campus PBDs paid furnished in non-excepted off-campus support the proposed ASP+3 percent
under the PFS. Our finalized proposal PBDs. As we stated in the CY 2019 adjustment and stated that CMS does
continues the 340B policies that were OPPS/ASC final rule with comment (83 not have statutory authority to pay one
implemented in CY 2018 with the FR 59017), because hospitals can, in group of hospitals at ASP+3 percent and
exception of the way we are calculating some cases, acquire drugs and all other hospitals at ASP+6 percent.
Some commenters stated that section urge CMS to collect such data.’’ Another underpayments (which could be defined
1833(t)(14)(A)(iii)(II) requires CMS to commenter urged CMS to gather as hospitals that submitted a claim for
pay hospitals for covered outpatient additional data to better understand drug payment with the ‘‘JG’’ modifier in
drugs at ASP+6 percent and that CMS 340B acquisition costs and the impact of CYs 2018 and 2019) outside the normal
does not have the legal authority to payment reductions on 340B providers claims process. Under this approach, we
change that payment amount to ASP+3 prior to making payment changes that would calculate the amount that such
percent. Furthermore, some commenters the commenter believes jeopardizes hospitals should have been paid and
stated that although CMS has some access and 340B program participation. would utilize our Medicare contractors
authority to make adjustments, the Response: We appreciate the to make one payment to each affected
agency’s stated rationale of imposing a commenters’ suggestion and note that hospital. This approach—one additional
payment reduction at the upper end of we announced in the Federal Register payment made to each affected hospital
the court’s ‘‘limit [on] the size of the (84 FR 51590) our intent to conduct a by our contractors—is a different
payment reduction the agency can 340B hospital survey to collect drug approach than reprocessing each and
permissibly apply . . . given the acquisition cost data for CY 2018 and every claim submitted by plaintiff
substantial discounts that hospitals 2019. We have no evidence that the hospitals for 2018 and 2019. Then,
receive under the 340B program’’ would current 340B policy has limited patient depending on when a final decision is
be inconsistent with the law itself and access to 340B drugs or program rendered, the Secretary would propose
therefore, reducing payment for 340B- participation. For the reasons explained to budget-neutralize those additional
acquired drugs to ASP+3 percent would above, we believe it is appropriate to expenditures for each of CYs 2018 and
be unlawful. continue our 340B payment policies for 2019. For example, if the Court of
However, a few commenters CY 2020. Appeals were to render a decision in
supported the proposal to pay ASP+3 Thus, for CY 2020, we are finalizing February of 2020, we might propose
percent for 340B-acquired drugs in CY our proposal, without modification, to those additional payments and an
2020, rather than to continue to pay pay ASP minus 22.5 percent for 340B- appropriate budget neutrality
ASP minus 22.5 percent. One acquired drugs including when adjustment for each of CYs 2018, 2019,
commenter supported the approach of furnished in nonexcepted off-campus and, if necessary, 2020, in time for the
paying ASP+3 percent for 340B- PBDs paid under the PFS. Our finalized CY 2021 rule. We noted that we would
acquired drugs if CMS receives an proposal continues the 340B Program need to receive a final decision from the
adverse decision on appeal. policies that were implemented in CY Court of Appeals sufficiently early in
Response: We appreciate commenters’ 2018 with the exception of the way we CY 2020 (likely no later than March 1,
support of CMS’ suggestion to pay at are calculating payment for 340B- 2020) to make it potentially possible for
ASP+3 percent if we are unsuccessful in acquired biosimilars, which is discussed us to propose and finalize an
the Appeals Court. As explained above, in section V.B.2.c. of the CY 2019 OPPS/
appropriate remedy and budget
we are finalizing our proposal to ASC final rule with comment period,
neutrality adjustments in the CY 2021
continue to pay for 340B-acquired drugs and continues the policy we finalized in
rulemaking. We solicited public
at ASP minus 22.5 percent. In the event CY 2019 to pay ASP minus 22.5 percent
comment on this approach as well as
of an adverse decision on appeal, we for 340B-acquired drugs and biologicals
other suggested approaches from
will take these comments into furnished in nonexcepted off-campus
commenters.
consideration in crafting an appropriate PBDs paid under the PFS.
remedy. In considering these potential future
Comments on a Potential Remedy for proposals, we noted that we would rely
Comment: One commenter believed a
CYs 2018 and 2019 on our statutory authority under section
rate closer to ASP+6 percent, such as
ASP+3 percent, would mitigate In addition to comments on the 1833(t)(14) for determining the OPPS
remediation efforts should the Agency appropriate payment amount for payment rates for drugs and biologicals
not ultimately prevail on appeal and calculating the remedy for CYs 2018 and as well as section 1833(t)(9)(A) of the
have to return the difference in 2019 and for use for CY 2020, we sought Act to review certain components of the
payments between ASP minus 22.5 public comment on how to structure the OPPS not less often than annually and
percent and ASP+6 percent based on a remedy for CYs 2018 and 2019. This to revise the groups, relative payment
negative court decision. request for public comment included weights, and other adjustments. In
Response: We thank the commenter whether such a remedy should be addition, we noted that under section
for its feedback. As explained above, we retrospective in nature (for example, 1833(t)(14)(H) of the Act, any
are finalizing our proposal to continue made on a claim-by-claim basis), adjustments made by the Secretary to
to pay for 340B-acquired drugs at ASP whether such a remedy could be payment rates using the statutory
minus 22.5 percent. In the event of an prospective in nature (for example, an formula outlined in section
adverse decision on appeal, we will take upward adjustment to 340B claims in 1833(t)(14)(A)(iii)(II) of the Act are
these comments into consideration in the future to account for any required to be taken into account under
crafting an appropriate remedy. underpayments in the past), and the budget neutrality requirements
whether there is some other mechanism outlined in section 1833(t)(9)(B) of the
Comments on Use of Hospital that could produce a result equitable to Act. In the CY 2020 OPPS/ASC
Acquisition Costs hospitals that do not acquire drugs proposed rule (84 FR 39505), we
Comment: Several commenters, through the 340B program while solicited public comments on the best,
including a large medical association, respecting the budget neutrality most appropriate way to maintain
suggested that CMS gather hospitals’ mandate. budget neutrality, either under a
acquisition costs for drugs. One We stated in the CY 2020 OPPS/ASC retrospective claim-by-claim approach,
commenter stated that ‘‘since CMS has proposed rule that one potential remedy with a prospective approach, or any
the authority to base reimbursement for alleged underpayments in 2018 and other proposed remedy. We also
rates on the hospitals’ acquisition cost 2019 would involve making additional solicited comments on whether,
(340B price) if the Agency considers payments to the parties who have depending on the amount of those
hospital acquisition cost survey data, we demonstrated harm from the alleged additional expenditures, we should
consider spreading out the relevant 340B drugs. One commenter suggested affected providers whole: Beginning
budget neutrality adjustment across identifying the total amount paid to a January 1, 2021, CMS would pay
multiple years. We appreciated all the hospital for drugs with the status ASP+14.25 percent plus an additional 2
public comments that we received on indicator ‘‘K’’ and multiplying by percent; beginning January 1, 2022
the advantages and disadvantages of 1.3677 (that is ASP+6 percent/ASP would pay ASP+14.25 percent plus an
such an approach. minus 22.5 percent = 1.06/0.775). additional 1 percent; and finally,
We also sought public comments on Another commenter stated that the beginning January 1, 2023, CMS would
the best, most appropriate treatment of percentage of claims that each hospital pay ASP+6 percent going forward.
Medicare beneficiary cost-sharing was underpaid is the same in each case The same commenter suggested a
responsibilities under any proposed and that we can calculate the total second approach under which CMS
remedy. We stated that the statutory payment for each hospital and multiply would pay affected hospitals set
budget neutrality requirement and that number by a factor, in order to amounts plus interest as follows:
beneficiary cost-sharing are extremely determine how much each hospital The first payment would be for claims
difficult to balance, and we sought should have been paid. Some submitted between January 1, 2018 and
stakeholder comments as we continue to commenters supported a lump-sum June 30, 2018 and would be paid out by
review the viability of alternative payment. One commenter supported July 1, 2020. The second payment
remedies in the event of an adverse either a lump-sum payment or a would be for claims submitted between
decision from the Court of Appeals. prospective payment segmented out July 1, 2018 and December 31, 2018 and
We refer readers to the CY 2018 over multiple years. One commenter would be paid out January 1, 2021. The
OPPS/ASC final rule with comment compared this case to those remedies third payment would be for claims
period (82 FR 59369 through 59370) and that the courts and agency have adopted submitted between January 1, 2019 and
the CY 2019 OPPS/ASC final rule with to handle past cases. This commenter June 30, 2019 and would be paid out
comment period (83 FR 58976 through believed the affected parties should July 1, 2021. The final payment would
58977 and 59015 through 59022) for receive a supplemental payment for be for claims submitted between July 1,
more detail on the policies implemented those affected claims in an amount 2019 and December, 31, 2019 and
in CY 2018 and CY 2019 for drugs equal to the difference between ASP would be paid out January 1, 2022.
acquired through the 340B Program. minus 22.5 percent and ASP+6 percent. Alternatively, the same commenter
We also note that since the CY 2020 Another commenter believed that the suggested a third method of making
OPPS/ASC proposed rule was remedy should be decided by a federal remedy payments under which CMS
published, we announced in the Federal judge. could recalculate the payments for all
Register (84 FR 51590) our intent to Additionally, some commenters claims paid for CYs 2018 and 2019 and
conduct a 340B hospital survey to supported a prospective remedy, pay affected 340B hospitals the
collect drug acquisition cost data for CY pointing out that a retrospective process difference (between ASP+6 and ASP
2018 and 2019. As noted above, we may would be too complex and minus 22.5 percent) in one lump-sum
use this survey data to devise a remedy administratively burdensome. Several payment plus interest by January 1,
for prior years if the district court’s commenters supported an aggregate 2021. The commenter suggested that
ruling is upheld on appeal. A remedy payment for each affected 340B entity CMS would provide affected 340B
that relies on such survey data could outside the normal claims process rather hospitals notice on or before July 1,
avoid the remedial complexities than a retrospective adjustment. One 2021 of the calculated payment amount
discussed below and in the proposed commenter suggested applying an owed to the hospital. The commenter
rule. If, however, 340B hospital survey increase factor of 26.89 percent that suggested that the repayment amounts
data are not used to devise a remedy, we would pay the affected entities at an should be placed in a 340B-specified
intend to consider the comments amount that would approximate ASP+6 account to be redistributed to eligible
summarized below to inform a remedy percent. Another commenter supported hospitals and distributed in equal
we would propose in the CY 2021 an upward adjustment to future claims, payments over a two-year period
OPPS/ASC proposed rule in the event of which they believed would reduce beginning January 2021 for covered
an adverse decision upon appeal. administrative burden. entities that demonstrate ‘‘responsible
Another commenter believed that program integrity’’ as determined in
Comments on Potential Remedy
CMS should publish a proposed collaboration with HRSA. The
Structure
methodology for conducting the look- commenters suggested that funds not
Comment: On the issue of a remedy back and issuing the payment. Further, able to be distributed will be used to
structure, many commenters supported they believed that providers should provide funding to CMS and HRSA to
a retrospective remedy on a claim-by- have opportunity for public comment, collaborate with industry stakeholders
claim basis over a prospective and that CMS should revise and issue a to identify and implement solutions for
adjustment of prior 340B claims. Several final methodology in CY 2020 outside of duplicate discount prevention.
commenters believe it is CMS’ the normal OPPS rulemaking cycle,
responsibility to remedy the policy by with the applicable data set and Comments on Budget Neutrality
requiring as little effort as possible on calculation instructions posted on the On the issue of budget neutrality,
the part of affected hospitals, thus CMS web page. Other commenters many commenters asserted that budget
avoiding any additional injuries to the believed the remedy does not neutrality is not necessary given prior
parties. Many commenters believe that necessitate rulemaking. court precedents involving
CMS should repay the difference One commenter offered three remedy underpayments: Cape Cod Hospital v.
between ASP+6 percent and ASP minus suggestions. Two suggestions involved Sebelius (DC Cir. 2011), H. Lee Moffitt
22.5 percent plus interest for all claims staggered methods of payment. Under Cancer Center & Research Institute, Inc.
for 340B-acquired drugs for CYs 2018 the first suggested remedy, this vs. Azar, (D.D.C. 2018), Shands
and 2019. They asserted that CMS can commenter believed that CMS could Jacksonville Medical Center v. Burwell,
calculate the amount owed to the pay for 340B drugs at the following (D.D.C. 2015). Other commenters
affected 340B hospitals by using the JG amounts over three years, which the asserted that neither (t)(9)(B) nor any
modifier that identifies the claims for commenter believed would make other provision of the OPPS statue
authorizes the agency to revisit budget data for 2018 and 2019 that we plan to (Level 4 Skin Procedures) was
neutrality if its estimates of money collect from 340B hospitals to devise a $1,548.96, and the payment rate for APC
owed for a prior year turn out to be remedy for prior years if the district 5055 (Level 5 Skin Procedures) was
incorrect. They view the statute as court’s ruling is upheld on appeal. A $2,766.13. This information also is
directing CMS to make estimates for the remedy that relies on such survey data available in Addenda A and B of the CY
purposes of setting prospective payment could avoid the remedial complexities 2019 OPPS/ASC final rule with
rates only, and not authorizing the discussed above and in the proposed comment period (which is available via
agency to recalibrate those estimates rule. If, however, 340B hospital survey the internet on the CMS website).
after the fact if its predictions turn out data are not used to devise a remedy in We have continued the high cost/low
to be incorrect. These commenters the event of an adverse decision from cost categories policy since CY 2014,
believe that the Congress drafted the the Court of Appeals, we intend to and we proposed to continue it for CY
OPPS statute to prohibit the agency consider all of these suggestions in 2020. Under this current policy, skin
from revisiting its budget-neutrality determining the appropriate remedy to substitutes in the high cost category are
determinations after it first makes them propose in the CY 2021 OPPS reported with the skin substitute
on a prospective basis for a given year. rulemaking. To the extent commenters application CPT codes, and skin
They further asserted that CMS should made legal arguments relating to the substitutes in the low cost category are
exercise discretion in using its budget False Claims Act or anti-kickback reported with the analogous skin
neutrality authority in seeking payments statutes, CMS offers no opinion. substitute HCPCS C-codes. For a
back from providers. discussion of the CY 2014 and CY 2015
Some commenters supported a 7. High Cost/Low Cost Threshold for methodologies for assigning skin
prospective payment rate reduction on Packaged Skin Substitutes substitutes to either the high cost group
OPPS non-drug items and services to In the CY 2014 OPPS/ASC final rule or the low cost group, we refer readers
maintain budget neutrality from any with comment period (78 FR 74938), we to the CY 2014 OPPS/ASC final rule
remedy. Other commenters supported a unconditionally packaged skin with comment period (78 FR 74932
gradual rate reduction of the payment substitute products into their associated through 74935) and the CY 2015 OPPS/
amounts for OPPS non-drug items and surgical procedures as part of a broader ASC final rule with comment period (79
services ranging from a minimum of two policy to package all drugs and FR 66882 through 66885).
to six years to lessen the impact of rate biologicals that function as supplies For a discussion of the high cost/low
reduction to the affected entities. when used in a surgical procedure. As cost methodology that was adopted in
Several commenters supported a modest part of the policy to finalize the CY 2016 and has been in effect since
reduction in future OPPS payment by packaging of skin substitutes, we also then, we refer readers to the CY 2016
reducing the conversion factor. finalized a methodology that divides the OPPS/ASC final rule with comment
skin substitutes into a high cost group period (80 FR 70434 through 70435).
Comments on Beneficiary Coinsurance and a low cost group, in order to ensure For CY 2020, consistent with our policy
Additionally, many commenters adequate resource homogeneity among since CY 2016, we proposed to continue
asserted that there is no law that APC assignments for the skin substitute to determine the high cost/low cost
requires hospitals to adjust application procedures (78 FR 74933). status for each skin substitute product
beneficiaries’ coinsurance for 340B- Skin substitutes assigned to the high based on either a product’s geometric
acquired drugs. They stated that neither cost group are described by HCPCS mean unit cost (MUC) exceeding the
the False Claims nor the anti-kickback codes 15271 through 15278. Skin geometric MUC threshold or the
statutes would apply because substitutes assigned to the low cost product’s per day cost (PDC) (the total
beneficiaries did not receive any group are described by HCPCS codes units of a skin substitute multiplied by
inducements to seek services. These C5271 through C5278. Geometric mean the mean unit cost and divided by the
commenters believe that beneficiaries costs for the various procedures are total number of days) exceeding the PDC
already fully paid for the hospital care calculated using only claims for the skin threshold. For CY 2020, as we did for
months or years ago and should not substitutes that are assigned to each CY 2019, we proposed to assign each
have to pay any additional payments. group. Specifically, claims billed with skin substitute that exceeds either the
They requested that CMS clearly state in HCPCS code 15271, 15273, 15275, or MUC threshold or the PDC threshold to
this final rule that there is no 15277 are used to calculate the the high cost group. In addition, as
requirement for any beneficiary copay geometric mean costs for procedures described in more detail later in this
adjustments. One commenter offered assigned to the high cost group, and section, for CY 2020, as we did for CY
estimates on what they believe are the claims billed with HCPCS code C5271, 2019, we proposed to assign any skin
percentage of patients who are impacted C5273, C5275, or C5277 are used to substitute with a MUC or a PDC that
by any adjustment on the patient’s calculate the geometric mean costs for does not exceed either the MUC
copay citing 29 percent with Medigap, procedures assigned to the low cost threshold or the PDC threshold to the
22 percent enrolled in Medicaid (dually group (78 FR 74935). low cost group. For CY 2020, we
eligible), and 19 percent without a Each of the HCPCS codes described proposed that any skin substitute
supplemental plan, with the remaining above are assigned to one of the product that was assigned to the high
30 percent enrolled in a Medicare following three skin procedure APCs cost group in CY 2019 would be
Advantage plan. Thus, this commenter according to the geometric mean cost for assigned to the high cost group for CY
believed that only 19 percent of patients the code: APC 5053 (Level 3 Skin 2020, regardless of whether it exceeds or
would be impacted directly by cost- Procedures): HCPCS codes C5271, falls below the CY 2020 MUC or PDC
sharing implications and CMS would C5275, and C5277); APC 5054 (Level 4 threshold. This policy was established
need to calculate payment owed to Skin Procedures): HCPCS codes C5273, in the CY 2018 OPPS/ASC final rule
Medicare for these beneficiaries. 15271, 15275, and 15277); or APC 5055 with comment period (82 FR 59346
Response: We thank the commenters (Level 5 Skin Procedures): HCPCS code through 59348).
for their comments on the appropriate 15273). In CY 2019, the payment rate for For this CY 2020 OPPS/ASC final
remedy for CYs 2018 and 2019. As APC 5053 (Level 3 Skin Procedures) was rule, consistent with the methodology as
noted above, we may use the survey $482.89, the payment rate for APC 5054 established in the CY 2014 through CY
2018 final rules with comment period, the MUC and PDC thresholds and also substitutes that would be consistent
we analyzed CY 2018 claims data to requested that CMS consider whether it with our policy goal of providing
calculate the MUC threshold (a might be appropriate to establish a new payment stability for these products. In
weighted average of all skin substitutes’ cost group in between the low cost addition, several stakeholders have
MUCs) and the PDC threshold (a group and the high cost group to allow made us aware of additional concerns
weighted average of all skin substitutes’ for assignment of moderately priced and recommendations since the release
PDCs). The final CY 2020 MUC skin substitutes to a newly created of the CY 2018 OPPS/ASC final rule
threshold is $48 per cm 2 (rounded to middle group. with comment period. As discussed in
the nearest $1) (proposed at $49 per We share the goal of promoting the CY 2019 OPPS/ASC final rule with
cm 2) and the final CY 2020 PDC payment stability for skin substitute comment period (83 FR 58967 through
threshold is $790 (rounded to the products and their related procedures as 58968), we identified four potential
nearest $1) (proposed at $789). price stability allows hospitals using methodologies that have been raised to
For CY 2020, we proposed to continue such products to more easily anticipate us that we encouraged the public to
to assign skin substitutes with pass- future payments associated with these review and provide comments on. We
through payment status to the high cost products. We have attempted to limit stated in the CY 2019 OPPS/ASC final
category. We proposed to assign skin year-to-year shifts for skin substitute rule with comment period that we were
substitutes with pricing information but products between the high cost and low especially interested in any specific
without claims data to calculate a cost groups through multiple initiatives feedback on policy concerns with any of
geometric MUC or PDC to either the implemented since CY 2014, including: the options presented as they relate to
high cost or low cost category based on Establishing separate skin substitute skin substitutes with differing per day
the product’s ASP+6 percent payment application procedure codes for low- or per episode costs and sizes and other
rate as compared to the MUC threshold. cost skin substitutes (78 FR 74935); factors that may differ among the dozens
If ASP is not available, we proposed to using a skin substitute’s MUC calculated of skin substitutes currently on the
use WAC+3 percent to assign a product from outpatient hospital claims data market. We also specified in the CY
to either the high cost or low cost instead of an average of ASP+6 percent 2019 OPPS/ASC final rule with
category. Finally, if neither ASP nor as the primary methodology to assign comment period that we were interested
WAC is available, we would use 95 products to the high cost or low cost in any new ideas that are not
percent of AWP to assign a skin group (79 FR 66883); and establishing represented below along with an
substitute to either the high cost or low the PDC threshold as an alternate analysis of how different skin substitute
cost category. We proposed to continue methodology to assign a skin substitute products would fare under such ideas.
to use WAC+3 percent instead of to the high cost group (80 FR 70434 Finally, we stated that we intend to
WAC+6 percent to conform to our through 70435). explore the full array of public
proposed policy described in section To allow additional time to evaluate comments on these ideas for the CY
V.B.2.b. of the proposed rule to establish concerns and suggestions from 2020 rulemaking, and we indicated that
a payment rate of WAC+3 percent for stakeholders about the volatility of the we will consider the feedback received
separately payable drugs and biologicals MUC and PDC thresholds, in the CY in response to our requests for
that do not have ASP data available. 2018 OPPS/ASC proposed rule (82 FR comments in developing proposals for
New skin substitutes without pricing 33627), we proposed that a skin CY 2020.
information would be assigned to the substitute that was assigned to the high
low cost category until pricing cost group for CY 2017 would be a. Discussion of CY 2019 Comment
information is available to compare to assigned to the high cost group for CY Solicitation for Episode-Based Payment
the CY 2020 MUC threshold. For a 2018, even if it does not exceed the CY and Solicitation of Additional
discussion of our existing policy under 2018 MUC or PDC thresholds. We Comments for CY 2020
which we assign skin substitutes finalized this policy in the CY 2018 The methodology that commenters
without pricing information to the low OPPS/ASC final rule with comment discussed most in response to our
cost category until pricing information period (82 FR 59347). We stated in the comment solicitation in CY 2019 and
is available, we refer readers to the CY CY 2018 OPPS/ASC proposed rule that that stakeholders raised in subsequent
2016 OPPS/ASC final rule with the goal of our proposal to retain the meetings we have had with the wound
comment period (80 FR 70436). same skin substitute cost group care community has been a lump-sum
Some skin substitute manufacturers assignments in CY 2018 as in CY 2017 ‘‘episode-based’’ payment for a wound
have raised concerns about significant was to maintain similar levels of care episode. Commenters that
fluctuation in both the MUC threshold payment for skin substitute products for supported an episode-based payment
and the PDC threshold from year to CY 2018 while we study our skin believe that it would allow health care
year. The fluctuation in the thresholds substitute payment methodology to professionals to choose the best skin
may result in the reassignment of determine whether refinement to the substitute to treat a patient’s wound and
several skin substitutes from the high existing policies are consistent with our would give providers flexibility with the
cost group to the low cost group which, policy goal of providing payment treatments they administer. These
under current payment rates, can be a stability for skin substitutes. commenters also believe an episode-
difference of approximately $1,000 in We stated in the CY 2018 OPPS/ASC based payment helps to reduce
the payment amount for the same final rule with comment period (82 FR incentives for providers to use excessive
procedure. In addition, these 59347) that we would continue to study applications of skin substitute products
stakeholders were concerned that the issues related to the payment of skin or use higher cost products to generate
inclusion of cost data from skin substitutes and take these comments more payment for the services they
substitutes with pass-through payment into consideration for future furnish. In addition, they believe that
status in the MUC and PDC calculations rulemaking. We received many episode-based payment could help with
would artificially inflate the thresholds. responses to our request for comments innovations with skin substitutes by
Skin substitute stakeholders requested in the CY 2018 OPPS/ASC proposed encouraging the development of
that CMS consider alternatives to the rule about possible refinements to the products that require fewer
current methodology used to calculate existing payment methodology for skin applications. These commenters noted
that episode-based payment would spending on skin substitute products, complexity adjustment would work
make wound care payment more while avoiding administrative issues with an episodic payment arrangement.
predictable for hospitals and provide such as establishing additional HCPCS Commenters also expressed concerns
incentives to manage the cost of care codes to describe different treatment that payment rates for comprehensive
that they furnish. Finally, commenters situations. One possible policy APCs may not be representative of the
for an episode-based payment believe construct that we sought comments on wound care services that would be paid
that workable quality metrics can be was whether to establish a payment within those APCs. One commenter
developed to monitor the quality of care period for skin substitute application stated that payment policy is not the
administered under the payment services (CPT codes 15271 through right way to resolve issues with the
methodology and limit excessive 15278 and HCPCS codes C5271 through over-utilization and inappropriate use of
applications of skin substitutes. C5278) between 4 weeks and 12 weeks. skin substitutes because they are
However, many commenters opposed Under this option, we could also assign concerned that major changes in
establishing an episode-based payment. CPT codes 15271, 15273, 15275, and payment methodology, such as episodic
One of the main concerns of 15277, and HCPCS codes C5271, C5273, payment, could lead to serious issues
commenters who opposed episode- C5275, and C5277 to comprehensive with the care beneficiaries receive.
based payment was that wound care is APCs with the option for a complexity Regarding the topic of episodic
too complex and variable to be covered adjustment that would allow for an payment, commenters brought up some
through such a payment methodology. increase in the standard APC payment of the same issues they had mentioned
These commenters stated that every for more resource-intensive cases. Our in response to last year’s comment
patient and every wound is different; research has found that most wound solicitation. Supporters of episodic
therefore, it would be very challenging care episodes require one to three skin payments believe the policy idea would
to establish a standard episode length substitute applications. Those cases give providers more flexibility with the
for coverage. They noted that it would would likely receive the standard APC treatments they administer to their
be too difficult to risk-stratify and payment for the comprehensive patients, and will help encourage
specialty-adjust an episode-based procedure. Then the complexity innovation by encouraging the
payment, given the diversity of patients adjustment could be applied for the development of graft skin substitute
receiving wound care and their relatively small number of cases that products that require fewer
providers who administer treatment, as require more intensive treatments. applications.
well as the variety of pathologies Comment: Several commenters were Some commenters supported
covered in treatment. Also, these in favor of establishing a comprehensive developing an episodic payment model
commenters questioned how episodes APC with either an option for a first in the CMS Innovation Center
would be defined for patients when they complexity adjustment or outlier before adopting episodic payment in the
are having multiple wounds treated at payments to pay for higher cost skin OPPS. One commenter wrote about the
one time or have another wound substitute application procedures. The need for quality measures as a part of
develop while the original wound was commenters supported the idea of episodic payment to ensure providers
receiving treatment. These commenters having a traditional comprehensive APC render appropriate care during a
expressed concerns that episode-based payment for standard wound care cases treatment episode. However, another
payment would be burdensome both with a complexity adjustment or outlier commenter wanted to ensure that
operationally and administratively for payment to handle complicated or quality measures would not prevent
providers. They believe that CMS will costly cases. However, they also providers from using a medically
need to create a large number of new expressed concerns about how many necessary product. Commenters also
APCs and HCPCS codes to account for payment levels would be available in discussed episode length with a couple
all of the patient situations that would the skin substitute procedures APC of commenters supporting a 12-week
be covered with an episode-based group since a complexity adjustment payment episode as mentioned in the
payment, which would increase can only be used if there is an existing comment solicitation, and another
burdens on providers. Finally, these higher-paying APC to which the service commenter suggesting that an episode
commenters had concerns about the receiving the complexity adjustment be based not only on the length of time
impacts of episode-based payment on may be assigned. A couple of but the number of allowed skin
the usage of higher cost skin substitute commenters wanted more opportunities substitute applications during that time
products. They believe that a single for services to receive a complexity period. Commenters also favored
payment could discourage the use of adjustment through using clusters of establishing a separate payment episode
higher-cost products because of the procedure codes that reflect the full for each wound receiving treatment.
large variability in the cost of skin range of wound care services a Commenters who oppose episodic
substitute products, which could limit beneficiary receives instead of using payment expressed similar concerns as
innovations for skin substitute products. code pairs to determine if a complexity they did in response to last year’s
The wide array of views on episode- adjustment should apply. A few comment solicitation. Many
based payment for skin substitute commenters suggested that episodic commenters believe that wound care is
products and the unforeseen issues that payments be risk-adjusted to account for too complex and variable to be covered
may arise from the implementation of clinical conditions and co-morbidities through episodic payment even with an
such a policy make us reluctant to of beneficiaries with outlier payments option for a complexity adjustment. For
present a proposal for this CY 2020 and that complexity adjustments be example, one commenter noted that the
proposed rule without more review of linked to beneficiaries with more co- care regimen for diabetic foot ulcers is
the issues involved with episode-based morbidities. very different than the care regimen for
payment. Therefore, we sought further Some commenters opposed the idea pressure wounds. A few commenters
comments from stakeholders and other of a complexity adjustment for skin expressed concerns about the
interested parties regarding skin substitute application procedures. The complexities associated with episodic
substitute payment policies that could commenters believe there was not payment, claiming that CMS will have
be applied in future years to address enough detail in the comment to established several new HCPCS codes
concerns about excessive utilization and solicitation to understand how a and clinical APCs to be able to have
payment rates for all of the care Providers would bill CPT codes 15271 assignments for services using skin
scenarios covered by episodic payment. through 15278 without having to substitutes according to opponents of
Commenters also believe it would take consider either the MUC or PDC of the the single payment category.
several years to implement an episode- graft skin substitute product used in the Commenters stated that instead of
based payment system and such system procedure. There would be only one having categories grouped by the
would be operationally and APC for the graft skin substitute relative cost of products, there would be
administratively burdensome for application procedures described by only one category to cover the payment
providers. Other commenters were CPT codes 15271 (Skin sub graft trnk/ of products with a mean unit cost
concerned about financial incentives arm/leg), 15273 (Skin sub grft t/arm/lg ranging from less than $1 to over $750.
created by episodic payment that may child), 15275 (Skin sub graft face/nk/hf/ Commenters believe a single payment
discourage providers from rendering the g), and 15277 (Skn sub grft f/n/hf/g category would favor inexpensive
best quality of care and encourage child). The payment rate would be the products, which could limit innovation,
providers to use skin substitute geometric mean of all graft skin and could eliminate all but the most
products that may not be the most substitutes procedures for a given CPT inexpensive products from the market.
clinically appropriate for their patients. code that are covered through the OPPS. Finally, opponents of a single payment
Finally, commenters had concerns about For example, under the current skin category believe a single payment
establishing the length of a payment substitute payment policy, there are two category would discourage the treatment
episode, stating there was no clear procedure codes (CPT code 15271 and of wounds that are difficult and costly
evidence on what the appropriate HCPCS code C5271) that are reported to treat.
episode length should be. These for the procedure described as The responses to the comment
commenters believe it also would be ‘‘application of skin substitute graft to solicitation show the potential of a
difficult to establish separate payment trunk, arms, legs, total wound surface single payment category to reduce the
episodes when a patient was being area up to 100 sq cm; first 25 sq cm or cost of wound care services for graft
treated for multiple wounds at the same less wound surface area’’. The geometric skin substitute procedures for both
time. mean cost for CPT code 15271 was beneficiaries and Medicare in general.
Commenters also discussed which $1,572.17 in the CY 2020 OPPS/ASC In addition, a single payment category
services should be included with an proposed rule and the geometric mean may help to lower administrative
episodic payment. Commenters were cost for HCPCS code C5271 was $728.28 burden for providers. Conversely, we
divided over whether an episode should in the proposed rule. We stated in the are cognizant of other commenters’
be limited to application of skin proposed rule that if this policy option concerns that a single payment category
substitute products or encompass other was implemented, only CPT code 15271 may hinder innovation of new graft skin
related wound care treatments including would be available in the OPPS, and the substitute products and cause some
hyperbaric oxygen and negative- geometric mean cost using data from the products that are currently well-utilized
pressure treatment. Some commenters CY 2020 proposed rule for the to leave the market. Nonetheless, we are
were concerned that episodic payment procedure code would be $1,465.18. persuaded that a single payment
may discourage the treatment of large or Commenters that supported this
category could potentially provide a
complicated wounds. There also was option believe it would remove the
more equitable payment for many
one commenter who wanted episodic incentives for manufacturers to develop
products used with graft skin substitute
payment to cover tissue repair products and providers to use high cost skin
procedures, while recognizing that
used in surgical procedures. substitute products and would lead to
Response: We appreciate all of the procedures performed with expensive
the use of lower-cost, quality products.
feedback we received from commenters, skin substitute products would likely
Commenters noted that lower Medicare
and we will use the feedback as we payments for graft skin substitute receive substantially lower payment.
consider potential refinements to how procedures would lead to lower We believe a more equitable payment
we pay for skin substitute products and copayments for beneficiaries. In rate for graft skin substitute procedures
procedures under the OPPS. addition, commenters believe a single could substantially reduce the amount
payment category would reduce Medicare pays for these procedures. We
b. Potential Revisions to the OPPS welcomed suggestions or other
Payment Policy for Skin Substitutes: incentives to apply skin substitute
products in excessive amounts. information regarding the possibility of
Comment Solicitation for CY 2020 utilizing a single payment category to
Commenters also believe a single
In addition to possible future payment category is clinically justified pay for skin substitute products under
rulemaking based on the responses to because they stated that many studies the OPPS, and, depending on the
the comment solicitations in the have shown that no one skin substitute information we received in response to
preceding section, we noted that we product is superior to another. Finally, this request, we noted we may consider
were considering adopting for CY 2020 supporters of a single payment category modifying our skin substitute payment
another payment methodology that believe it would simplify coding for policy in the CY 2020 OPPS/ASC final
generated significant public comments providers and reduce administrative rule with comment period.
in response to the CY 2019 comment burden. We believe some of the concerns
solicitation. That option would be to There were also commenters that commenters who oppose a single
eliminate the high cost and low cost raised concerns that a single payment payment category for skin substitute
categories for skin substitutes and have category would not offer providers products raised might be mitigated if
only one payment category and set of incentives to furnish high quality care stakeholders have a period of time to
procedure codes for the application of and would reduce the use of higher-cost adjust to the changes inherent in
all graft skin substitute products. Under skin substitute products (which they establishing a single payment category.
this option, the only available procedure seemed to imply are of higher quality Accordingly, we solicited public
codes to bill for skin substitute graft than lower cost products). They argued comments that provide additional
procedures would be CPT codes 15271 that eliminating the high cost and low information about how commenters
through 15278. HCPCS codes C5271 cost payment categories also does not believe we should transition from the
through C5278 would be eliminated. maintain homogeneity among APC current low cost/high cost payment
methodology to a single payment who are close to the cost-group commenters in favor of a single payment
category. thresholds in the current high-cost/low- category did not see a need for a
Such suggestions to facilitate the cost payment methodology for skin transition period or wanted only a one-
payment transition from a low cost/high substitutes. year transition period. Conversely, those
cost payment methodology to a single The vast majority of commenters were commenters opposed to a single
payment category methodology could opposed to a single payment category payment category either who did
include, but are not limited to— for skin substitute products. mention the idea of a transition period
• Delaying implementation of a single Commenters stated that the large wanted it to last multiple years with one
category payment for 1 or 2 years after difference in resource costs between commenter suggesting a transition
the payment methodology is adopted; higher cost and lower cost skin period of four years.
and substitute products would mean only Response: We appreciate the
• Gradually lowering the MUC and the most inexpensive products would be comments we received for this comment
PDC thresholds over 2 or more years to used to provide care, which would hurt solicitation, and we will use the
add more graft skin substitute both product innovation and the quality feedback to help inform our
procedures into the current high cost of care beneficiaries receive. development of our payment
group until all graft skin substitute Commenters were concerned that a methodology for skin substitute
procedures are assigned to the high cost single payment category would application procedures in future
group and it becomes a single payment encourage providers to choose financial rulemaking.
category. benefit over clinical efficacy when
We sought commenters’ feedback on c. Proposals for Packaged Skin
determining which skin substitute
these ideas, or other approaches, to Substitutes for CY 2020
products to use.
mitigate challenges that could impact These commenters also stated that a To allow stakeholders time to analyze
providers, manufacturers, and other single payment category would increase and comment on the issues discussed
stakeholders if we establish a single incentives for providers to use cheaper above, we proposed for CY 2020 to
payment category, which we indicated products that require more applications continue our policy established in CY
we might include as part of a final skin to generate more revenue. A couple of 2018 to assign skin substitutes to the
substitute payment policy that we commenters believe that overall low cost or high cost group.
would adopt in the CY 2020 OPPS/ASC Medicare spending on skin substitutes Specifically, we proposed to assign a
final rule with comment period. would be higher with a single payment skin substitute with a MUC or a PDC
Comment: A few commenters category than under the current that does not exceed either the MUC
expressed support for a single payment payment methodology which has threshold or the PDC threshold to the
category for the application of skin separate payment for higher cost and low cost group, unless the product was
substitute products. These commenters lower cost skin substitutes. The reason assigned to the high cost group in CY
supported the payment methodology spending would go up according to the 2019, in which case we would assign
because they believe it would remove commenters is the overpayment for low the product to the high cost group for
incentives for manufacturers to develop cost skin substitutes by Medicare would CY 2020, regardless of whether it
and providers to use high-cost products. exceed the savings Medicare would exceeds the CY 2020 MUC or PDC
These commenters maintained that a receive on reduced payments for higher threshold. We also proposed to assign to
single payment category would cost skin substitutes. the high cost group any skin substitute
encourage product innovations that Further, commenters stated that a product that exceeds the CY 2020 MUC
maintain the quality of care for single payment rate would lead to too or PDC thresholds and assign to the low
beneficiaries while bringing down the much heterogeneity in the products cost group any skin substitute product
cost of skin substitute products, which receiving payment through the skin that does not exceed the CY 2020 MUC
will help to reduce the co-payments substitute application procedures. The or PDC thresholds and was not assigned
beneficiaries pay for skin substitute same payment rate would apply to skin to the high cost group in CY 2019. We
application services. Commenters substitute products whether they cost proposed to continue to use payment
supported more payment homogeneity less than $10 per cm2 or over $200 per methodologies including ASP+6 percent
because they believe most skin cm2 and regardless of the type of wound and 95 percent of AWP for skin
substitute products perform in a similar they treat. Commenters would prefer to substitute products that have pricing
manner and no product or group of have multiple payment categories where information but do not have claims data
products is clinically superior over the payment rate is more reflective of to determine if their costs exceed the CY
other skin substitute products. One the cost of the product. Commenters 2020 MUC. In addition, we proposed to
commenter noted that the device pass- believe that a single payment category use WAC+3 percent for skin substitute
through payment pathway continues to would discourage providers from products that do not have ASP pricing
be available for manufacturers to receive treating more complicated wounds. information or have claims data to
additional payment if a superior skin Some commenters stated that CMS determine if those products’ costs
substitute product is developed. should not implement a single payment exceed the CY 2020 MUC. We proposed
Several commenters in favor of a category methodology in CY 2020 to continue our established policy to
single payment category believe it because it only sought comments and assign new skin substitute products
would simplify coding for providers and did not propose it and that CMS should without pricing information to the low
reduce administrative burden. They also formally propose the methodology to cost group.
believe a single payment category allow commenters a meaningful Table 19 of the proposed rule
provides adequate payment for opportunity to comment on the precise displayed the proposed CY 2020 cost
providers based on the case mix of proposal before implementing it. category assignment for each skin
smaller, easier to treat wounds and There also were comments about the substitute product.
larger, more complex wounds. Also, a idea of having a transition period of 1 Comment: Most commenters
single payment category would promote to 2 years before the full supported our proposal to continue our
cost stability by eliminating the large implementation of a single category policy to assign skin substitutes to the
payment fluctuation for skin substitutes payment methodology. Those low cost or high cost group, mainly
because they still want more assign skin substitute products to the products. Accordingly, we are finalizing
information on both episode-based high-cost group once they qualify for the our proposal to assign HCPCS codes
payment for skin substitutes and the group promotes payment stability and Q4122 and Q4150 to the high-cost group
possibility of creating a single payment allows manufacturers and providers to in CY 2020.
category for skin substitutes. These know over a long period of time the After consideration of the public
commenters do not currently support payment rate of the procedures used
comments we received, we are
either potential payment methodology with each skin substitute product.
Comment: For the CY 2019 OPPS/ finalizing our proposal to assign a skin
and prefer to keep the current high-cost
and low-cost payment methodology ASC final rule with comment period, a substitute with a MUC or a PDC that
until an alternative methodology for commenter, the manufacturer, requested does not exceed either the MUC
skin substitutes is better developed. that HCPCS code Q4184 (Cellesta, per threshold or the PDC threshold to the
Response: We appreciate the support square centimeter) be assigned to the low cost group, unless the product was
of the commenters of our CY 2020 high-cost skin substitute group because assigned to the high cost group in CY
proposal for the payment of skin the ASP+6 percent price of HCPCS code 2019, in which case we would assign
substitute application services. Q4184 for Quarter 1 of 2019 was the product to the high cost group for
Comment: One commenter was $110.02 per cm2 which was CY 2020, regardless of whether it
opposed to our proposal. This substantially higher than the MUC exceeds the CY 2020 MUC or PDC
commenter requested that we no longer threshold for CY 2019 of $49 per cm2. threshold. We also are finalizing our
assign to the high-cost group skin Response: HCPCS code Q4184 proposal to assign to the high cost group
substitute products that do not meet (Cellesta, per square centimeter) has any skin substitute product that exceeds
either the MUC or PDC thresholds in CY been assigned to the high-cost group the CY 2020 MUC or PDC thresholds
2020 because the skin substitute since April 1, 2019 and we proposed and assign to the low cost group any
product had previous been assigned to assigning the skin substitute product skin substitute product that does not
the high-cost group in CY 2019. The again to the high-cost group in CY 2020. exceed the CY 2020 MUC or PDC
commenter believes skin substitute Comment: One commenter, the thresholds and was not assigned to the
products should be assigned to the cost manufacturer, has requested that HCPCS high cost group in CY 2019. We are
group that for which they qualify based codes Q4122 (Dermacell, per square finalizing our proposal to continue to
on current MUC and PDC thresholds centimeter) and Q4150 (Allowrap ds or use payment methodologies including
because the commenter believes that dry, per square centimeter) continue to ASP+6 percent and 95 percent of AWP
Medicare payment should reflect to be assigned to the high-cost skin for skin substitute products that have
some extent the relative cost of a skin substitute group.
pricing information but do not have
substitute product compared to all other Response: HCPCS codes Q4122
(Dermacell, per square centimeter) and claims data to determine if their costs
skin substitute products. exceed the CY 2020 MUC. In addition,
Response: We disagree with Q4150 (Allowrap ds or dry, per square
centimeter) were both assigned to the we are finalizing our proposal to
commenter. Requiring products to
potentially switch annually between the high-cost group in CY 2019 and also continue to use WAC+3 percent instead
high-cost and low-cost group leads to were proposed to the high-cost group for of WAC+6 percent for skin substitute
payment instability for skin substitute CY 2020. Per our proposal, a skin products that do not have ASP pricing
products (82 FR 59346–59347). The substitute that has been proposed in the information or claims data to determine
payment rate for a skin substitute high-cost group in a proposed rule will if those products’ costs exceed the CY
application procedure may change by remain in the high-cost group in the 2020 MUC. We also are finalizing our
several hundred dollars depending on if final rule. Also, any skin substitute proposal to retain our established policy
a skin substitute product is assigned to assigned to the high-cost group in CY to assign new skin substitute products
the high-cost or low-cost group, which 2019 will continue to be assigned to the with pricing information to the low cost
can make it challenging for high-cost group in CY 2020 even if MUC group. Table 45 below displays the final
manufacturers to estimate the payment and PDC for the skin substitute product CY 2020 cost category assignment for
their products will generate when used is below the overall MUC and PDC each skin substitute product.
by providers. The policy to continue to thresholds for all skin substitute BILLING CODE 4120–01–P
ER12NO19.073</GPH>
ER12NO19.074</GPH>
BILLING CODE 4120–01–C 2020 entails estimating spending for two through process and payment
VI. Estimate of OPPS Transitional Pass- groups of items. The first group of items methodology (74 FR 60476). As has
Through Spending for Drugs, consists of device categories that are been our past practice (76 FR 74335), in
Biologicals, Radiopharmaceuticals, and currently eligible for pass-through the proposed rule, we proposed to
Devices payment and that will continue to be include an estimate of any implantable
eligible for pass-through payment in CY biologicals eligible for pass-through
A. Background 2020. The CY 2008 OPPS/ASC final rule payment in our estimate of pass-through
Section 1833(t)(6)(E) of the Act limits with comment period (72 FR 66778) spending for devices. Similarly, we
the total projected amount of describes the methodology we have finalized a policy in CY 2015 that
transitional pass-through payments for used in previous years to develop the applications for pass-through payment
drugs, biologicals, pass-through spending estimate for for skin substitutes and similar products
radiopharmaceuticals, and categories of known device categories continuing into be evaluated using the medical device
devices for a given year to an the applicable update year. The second pass-through process and payment
‘‘applicable percentage,’’ currently not group of items consists of items that we methodology (76 FR 66885 through
to exceed 2.0 percent of total program know are newly eligible, or project may 66888). Therefore, as we did beginning
payments estimated to be made for all be newly eligible, for device pass- in CY 2015, for CY 2020, we also
covered services under the OPPS through payment in the remaining proposed to include an estimate of any
furnished for that year. If we estimate quarters of CY 2019 or beginning in CY skin substitutes and similar products in
before the beginning of the calendar 2020. The sum of the proposed CY 2020 our estimate of pass-through spending
year that the total amount of pass- pass-through spending estimates for for devices.
through payments in that year would these two groups of device categories For drugs and biologicals eligible for
exceed the applicable percentage, equaled the proposed total CY 2020 pass-through payment, section
section 1833(t)(6)(E)(iii) of the Act pass-through spending estimate for 1833(t)(6)(D)(i) of the Act establishes the
requires a uniform prospective device categories with pass-through pass-through payment amount as the
reduction in the amount of each of the payment status. We based the device amount by which the amount
transitional pass-through payments pass-through estimated payments for authorized under section 1842(o) of the
made in that year to ensure that the each device category on the amount of Act (or, if the drug or biological is
limit is not exceeded. We estimate the payment as established in section covered under a competitive acquisition
pass-through spending to determine 1833(t)(6)(D)(ii) of the Act, and as contract under section 1847B of the Act,
whether payments exceed the outlined in previous rules, including the an amount determined by the Secretary
applicable percentage and the CY 2014 OPPS/ASC final rule with equal to the average price for the drug
appropriate prorata reduction to the comment period (78 FR 75034 through or biological for all competitive
conversion factor for the projected level 75036). We note that, beginning in CY acquisition areas and year established
of pass-through spending in the 2010, the pass-through evaluation under such section as calculated and
following year to ensure that total process and pass-through payment adjusted by the Secretary) exceeds the
estimated pass-through spending for the methodology for implantable biologicals portion of the otherwise applicable fee
prospective payment year is budget newly approved for pass-through schedule amount that the Secretary
neutral, as required by section payment beginning on or after January determines is associated with the drug
1833(t)(6)(E) of the Act. 1, 2010, that are surgically inserted or or biological. Our estimate of drug and
For devices, developing a proposed implanted (through a surgical incision biological pass-through payment for CY
ER12NO19.075</GPH>
estimate of pass-through spending in CY or a natural orifice) use the device pass- 2020 for this group of items is $224.1
million, as discussed below, because we or biological, which we refer to as the estimated could be approved for pass-
proposed to pay for most nonpass- policy-packaged drug APC offset through status after the development of
through separately payable drugs and amount. If we determine that an offset the proposed rule and before January 1,
biologicals under the CY 2020 OPPS at is appropriate for a specific policy- 2020; and contingent projections for
ASP+6 percent with the exception of packaged drug or biological receiving new device categories established in the
340B-acquired separately payable drugs pass-through payment, we proposed to second through fourth quarters of CY
that are paid at ASP minus 22.5 percent, reduce our estimate of pass-through 2020. For CY 2020, we proposed to use
and because we proposed to pay for CY payments for these drugs or biologicals the general methodology described in
2020 pass-through payment drugs and by this amount. the CY 2008 OPPS/ASC final rule with
biologicals at ASP+6 percent, as we Similar to pass-through spending comment period (72 FR 66778), while
discuss in section V.A. of the CY 2020 estimates for devices, the first group of also taking into account recent OPPS
OPPS/ASC proposed rule. We refer drugs and biologicals requiring a pass- experience in approving new pass-
readers to section V.B.6 of the CY 2020 through payment estimate consists of through device categories. For the
OPPS/ASC proposed rule where we those products that were recently made proposed rule, the proposed estimate of
discuss the comments we solicited on eligible for pass-through payment and CY 2020 pass-through spending for this
an appropriate remedy in litigation that will continue to be eligible for pass- second group of device categories was
involving our OPPS payment policy for through payment in CY 2020. The $10 million.
340B purchased drugs, which would second group contains drugs and We did not receive any public
inform CY 2021 rulemaking in the event biologicals that we know are newly comments on this proposal. As stated
of an adverse decision on appeal in that eligible, or project will be newly earlier in this final rule with comment
litigation. eligible, in the remaining quarters of CY period, we are approving five devices
2019 or beginning in CY 2020. The sum for pass-through payment status:
Furthermore, payment for certain
of the CY 2020 pass-through spending Surefire® SparkTM Infusion System;
drugs, specifically diagnostic
estimates for these two groups of drugs Optimizer® System; AquaBeam®
radiopharmaceuticals and contrast
and biologicals equals the total CY 2020 System; AUGMENT® Bone Graft and
agents without pass-through payment
pass-through spending estimate for ARTIFICIALIris® . The manufacturers of
status, is packaged into payment for the
drugs and biologicals with pass-through these systems provided utilization and
associated procedures, and these
payment status. cost data that indicate the spending for
products will not be separately paid. In
the devices would be approximately
addition, we policy-package all B. Estimate of Pass-Through Spending
$116.25 million for Surefire® SparkTM
nonpass-through drugs, biologicals, and In the CY 2020 OPPS/ASC proposed Infusion System, $46 million for
radiopharmaceuticals that function as rule (84 FR 39511 through 39512), we Optimizer® System, $11.25 million for
supplies when used in a diagnostic test proposed to set the applicable pass- AquaBeam® System, $ 72.2 million for
or procedure and drugs and biologicals through payment percentage limit at 2.0 AUGMENT® Bone Graft, and $500,500
that function as supplies when used in percent of the total projected OPPS for ARTIFICIALIris®. Therefore, we are
a surgical procedure, as discussed in payments for CY 2020, consistent with finalizing an estimate of $246.2 million
section II.A.3. of the CY 2020 OPPS/ section 1833(t)(6)(E)(ii)(II) of the Act for this second group of devices for CY
ASC proposed rule and this final rule and our OPPS policy from CY 2004 2020.
with comment period. In the CY 2020 through CY 2019 (82 FR 59371 through To estimate proposed CY 2020 pass-
OPPS/ASC proposed rule (84 FR 39511), 59373). through spending for drugs and
we proposed that all of these policy- For the first group, consisting of biologicals in the first group,
packaged drugs and biologicals with device categories that are currently specifically those drugs and biologicals
pass-through payment status would be eligible for pass-through payment and recently made eligible for pass-through
paid at ASP+6 percent, like other pass- will continue to be eligible for pass- payment and continuing on pass-
through drugs and biologicals, for CY through payment in CY 2020, there is through payment status for at least one
2020. Therefore, our estimate of pass- one active category for CY 2020. The quarter in CY 2020, we proposed to use
through payment for policy-packaged active category is described by HCPCS the most recent Medicare hospital
drugs and biologicals with pass-through code C1823 (Generator, neurostimulator outpatient claims data regarding their
payment status approved prior to CY (implantable), nonrechargeable, with utilization, information provided in the
2020 was not $0, as discussed below. In transvenous sensing and stimulation respective pass-through applications,
section V.A.5. of the CY 2020 OPPS/ leads). Based on the information from historical hospital claims data,
ASC proposed rule, we discussed our the device manufacturer, we estimated pharmaceutical industry information,
policy to determine if the costs of that 100 devices will receive payment in and clinical information regarding those
certain policy-packaged drugs or the OPPS in CY 2020 at an estimated drugs or biologicals to project the CY
biologicals are already packaged into the cost of $5,655 per device. Therefore, we 2020 OPPS utilization of the products.
existing APC structure. If we determine proposed an estimate for the first group For the known drugs and biologicals
that a policy-packaged drug or of devices of $565,500. We did not (excluding policy-packaged diagnostic
biological approved for pass-through receive any public comments on the radiopharmaceuticals, contrast agents,
payment resembles predecessor drugs or proposal. Therefore, we are finalizing drugs, biologicals, and
biologicals already included in the costs the proposed estimate for the first group radiopharmaceuticals that function as
of the APCs that are associated with the of devices of $565,500 for CY 2020. supplies when used in a diagnostic test
drug receiving pass-through payment, In estimating our proposed CY 2020 or procedure, and drugs and biologicals
we proposed to offset the amount of pass-through spending for device that function as supplies when used in
pass-through payment for the policy- categories in the second group, we a surgical procedure) that will be
packaged drug or biological. For these included: Device categories that we continuing on pass-through payment
drugs or biologicals, the APC offset knew at the time of the development of status in CY 2020, we estimated the
amount is the portion of the APC the proposed rule will be newly eligible pass-through payment amount as the
payment for the specific procedure for pass-through payment in CY 2020; difference between ASP+6 percent and
performed with the pass-through drug additional device categories that we the payment rate for nonpass-through
drugs and biologicals that will be making the CY 2020 pass-through rulemaking cycles. We continue to
separately paid. Separately payable payment estimate. We also proposed to encourage commenters to provide the
drugs are paid at a rate of ASP+6 consider the most recent OPPS data and analysis necessary to justify
percent with the exception of 340B- experience in approving new pass- any suggested changes.
acquired drugs that are paid at ASP through drugs and biologicals. Using Comment: We received two public
minus 22.5 percent. Therefore, the our proposed methodology for comments, one from a health system
payment rate difference between the estimating CY 2020 pass-through and another from a health information
pass-through payment amount and the payments for this second group of management association, in response to
nonpass-through payment amount is drugs, we calculated a proposed our CY 2020 proposal. Commenters
$224.1 million for this group of drugs. spending estimate for this second group suggested that CMS should adopt the
Because payment for policy-packaged of drugs and biologicals of recommendation of the Medicare
drugs and biologicals is packaged if the approximately $17.1 million. Payment Advisory Commission
product was not paid separately due to We did not receive any public (MedPAC) for the development and
its pass-through payment status, we comments on our proposal. Therefore, implementation of a set of national
proposed to include in the CY 2020 for CY 2020, we are continuing to use guidelines for coding hospital
pass-through estimate the difference the general methodology described emergency department (ED) visits under
between payment for the policy- above. For this final rule with comment the OPPS. They argued that national
packaged drug or biological at ASP+6 period, we calculated a CY 2020 guidelines would provide hospitals with
percent (or WAC+6 percent, or 95 spending estimate for this second group a clear set of rules for coding ED visits.
percent of AWP, if ASP or WAC of drugs and biologicals of Response: We thank the commenters
information is not available) and the approximately $26 million. for their responses. We will consider
policy-packaged drug APC offset In summary, in accordance with the these comments for future rulemaking.
amount, if we determine that the policy- methodology described earlier in this After consideration of the public
packaged drug or biological approved section, for this final rule with comment comments received, we are finalizing
for pass-through payment resembles a period, we estimate that total pass- our CY 2020 proposal to continue our
predecessor drug or biological already through spending for the device current clinic and ED hospital
included in the costs of the APCs that categories and the drugs and biologicals outpatient visits and critical care
are associated with the drug receiving that are continuing to receive pass- services payment policies without
pass-through payment, which we through payment in CY 2020 and those modifications.
estimate for CY 2020 to be $17.0 device categories, drugs, and biologicals In the CY 2019 OPPS/ASC final rule
million. For the proposed rule, using the that first become eligible for pass- with comment period (83 FR 59004
through payment during CY 2020 is through 59015), we adopted a method to
proposed methodology described above,
approximately $698.4 million control unnecessary increases in the
we calculated a CY 2020 proposed
(approximately $246.8 million for volume of covered outpatient
spending estimate for this first group of
device categories and approximately department services under section
drugs and biologicals that includes
$451.6 million for drugs and biologicals) 1833(t)(2)(F) of the Act by utilizing a
drugs currently on pass-through
which represents 0.88 percent of total Medicare Physician Fee Schedule (PFS)-
payment status that would otherwise be
projected OPPS payments for CY 2020 equivalent payment rate for the hospital
separately payable or policy-packaged of
(approximately $79 billion). Therefore, outpatient clinic visit (HCPCS code
approximately $241.1 million. We did
we estimate that pass-through spending G0463) when it is furnished by excepted
not receive any public comments on our
in CY 2020 will not amount to 2.0 off-campus provider-based departments
proposal. Using our methodology for percent of total projected OPPS CY 2020
this final rule with comment period, we (PBDs). As discussed in section X.D of
program spending. the proposed rule and the CY 2019 final
calculated a CY 2020 spending estimate
for this first group of drugs and VII. OPPS Payment for Hospital rule (FR 58818 through 59179), CY 2020
biologicals of approximately $399.6 Outpatient Visits and Critical Care will be the second year of the 2-year
million. Services transition of this policy, and in CY
To estimate proposed CY 2020 pass- For CY 2020, we proposed to continue 2020, these departments will be paid the
through spending for drugs and with our current clinic and emergency site-specific PFS rate for the clinic visit
biologicals in the second group (that is, department (ED) hospital outpatient service. For a full discussion of this
drugs and biologicals that we knew at visits payment policies. For a policy, we refer readers to the CY 2020
the time of development of the proposed description of the current clinic and ED final rule with comment period and
rule were newly eligible for pass- hospital outpatient visits policies, we section X.C of this final rule with
through payment in CY 2020, additional refer readers to the CY 2016 OPPS/ASC comment period.
drugs and biologicals that we estimated final rule with comment period (80 FR VIII. Payment for Partial
could be approved for pass-through 70448). We also proposed to continue Hospitalization Services
status subsequent to the development of our payment policy for critical care
the proposed rule and before January 1, services for CY 2020. For a description A. Background
2020 and projections for new drugs and of the current payment policy for A partial hospitalization program
biologicals that could be initially critical care services, we refer readers to (PHP) is an intensive outpatient
eligible for pass-through payment in the the CY 2016 OPPS/ASC final rule with program of psychiatric services
second through fourth quarters of CY comment period (80 FR 70449), and for provided as an alternative to inpatient
2020), we proposed to use utilization the history of the payment policy for psychiatric care for individuals who
estimates from pass-through applicants, critical care services, we refer readers to have an acute mental illness, which
pharmaceutical industry data, clinical the CY 2014 OPPS/ASC final rule with includes, but is not limited to,
information, recent trends in the per comment period (78 FR 75043). In the conditions such as depression,
unit ASPs of hospital outpatient drugs, proposed rule, we sought public schizophrenia, and substance use
and projected annual changes in service comments on any changes to these disorders. Section 1861(ff)(1) of the Act
volume and intensity as our basis for codes that we should consider for future defines partial hospitalization services
as the items and services described in effective for services furnished on or per diem payment rates without
paragraph (2) prescribed by a physician after July 1, 2000 (65 FR 18452 through knowing the impact of the policy and
and provided under a program 18455). Under this methodology, the payment changes we made in CY 2009.
described in paragraph (3) under the median per diem costs were used to Because of the 2-year lag between data
supervision of a physician pursuant to calculate the relative payment weights collection and rulemaking, the changes
an individualized, written plan of for the PHP APCs. Section 1833(t)(9)(A) we made in CY 2009 were reflected for
treatment established and periodically of the Act requires the Secretary to the first time in the claims data that we
reviewed by a physician (in review, not less often than annually, used to determine payment rates for the
consultation with appropriate staff and revise the groups, the relative CY 2011 rulemaking (74 FR 60556
participating in such program), which payment weights, and the wage and through 60559).
sets forth the physician’s diagnosis, the other adjustments described in section In the CY 2011 OPPS/ASC final rule
type, amount, frequency, and duration 1833(t)(2) of the Act to take into account with comment period (75 FR 71994), we
of the items and services provided changes in medical practice, changes in established four separate PHP APC per
under the plan, and the goals for technology, the addition of new diem payment rates: Two for CMHCs
treatment under the plan. Section services, new cost data, and other (APC 0172 (for Level 1 services) and
1861(ff)(2) of the Act describes the items relevant information and factors. APC 0173 (for Level 2 services)) and two
and services included in partial We began efforts to strengthen the for hospital-based PHPs (APC 0175 (for
hospitalization services. Section PHP benefit through extensive data Level 1 services) and APC 0176 (for
1861(ff)(3)(A) of the Act specifies that a analysis, along with policy and payment Level 2 services)), based on each
PHP is a program furnished by a changes finalized in the CY 2008 OPPS/ provider type’s own unique data. For
hospital to its outpatients or by a ASC final rule with comment period (72 CY 2011, we also instituted a 2-year
community mental health center FR 66670 through 66676). In that final transition period for CMHCs to the
(CMHC), as a distinct and organized rule with comment period, we made CMHC APC per diem payment rates
intensive ambulatory treatment service, two refinements to the methodology for based solely on CMHC data. Under the
offering less than 24-hour-daily care, in computing the PHP median: The first transition methodology, CMHC APCs
a location other than an individual’s remapped 10 revenue codes that are Level 1 and Level 2 per diem costs were
home or inpatient or residential setting. common among hospital-based PHP calculated by taking 50 percent of the
Section 1861(ff)(3)(B) of the Act defines claims to the most appropriate cost difference between the CY 2010 final
a CMHC for purposes of this benefit. centers; and the second refined our hospital-based PHP median costs and
Section 1833(t)(1)(B)(i) of the Act methodology for computing the PHP the CY 2011 final CMHC median costs
provides the Secretary with the median per diem cost by computing a and then adding that number to the CY
authority to designate the outpatient separate per diem cost for each day 2011 final CMHC median costs. A 2-year
department (OPD) services to be covered rather than for each bill. transition under this methodology
under the OPPS. The Medicare In CY 2009, we implemented several moved us in the direction of our goal,
regulations that implement this regulatory, policy, and payment which is to pay appropriately for partial
provision specify, at 42 CFR 419.21, that changes, including a two-tier payment hospitalization services based on each
payments under the OPPS will be made approach for partial hospitalization provider type’s data, while at the same
for partial hospitalization services services under which we paid one time allowing providers time to adjust
furnished by CMHCs as well as amount for days with 3 services under their business operations and protect
Medicare Part B services furnished to PHP APC 0172 (Level 1 Partial access to care for Medicare
hospital outpatients designated by the Hospitalization) and a higher amount beneficiaries. We also stated that we
Secretary, which include partial for days with 4 or more services under would review and analyze the data
hospitalization services (65 FR 18444 PHP APC 0173 (Level 2 Partial during the CY 2012 rulemaking cycle
through 18445). Hospitalization) (73 FR 68688 through and, based on these analyses, we might
Section 1833(t)(2)(C) of the Act 68693). We also finalized our policy to further refine the payment mechanism.
requires the Secretary, in part, to deny payment for any PHP claims We refer readers to section X.B. of the
establish relative payment weights for submitted for days when fewer than 3 CY 2011 OPPS/ASC final rule with
covered OPD services (and any groups units of therapeutic services are comment period (75 FR 71991 through
of such services described in section provided (73 FR 68694). Additionally, 71994) for a full discussion.
1833(t)(2)(B) of the Act) based on for CY 2009, we revised the regulations In addition, in accordance with
median (or, at the election of the at 42 CFR 410.43 to codify existing basic section 1301(b) of the Health Care and
Secretary, mean) hospital costs using PHP patient eligibility criteria and to Education Reconciliation Act of 2010
data on claims from 1996 and data from add a reference to current physician (HCERA 2010), we amended the
the most recent available cost reports. In certification requirements under 42 CFR description of a PHP in our regulations
pertinent part, section 1833(t)(2)(B) of 424.24 to conform our regulations to our to specify that a PHP must be a distinct
the Act provides that the Secretary may longstanding policy (73 FR 68694 and organized intensive ambulatory
establish groups of covered OPD through 68695). We also revised the treatment program offering less than 24-
services, within a classification system partial hospitalization benefit to include hour daily care other than in an
developed by the Secretary for covered several coding updates (73 FR 68695 individual’s home or in an inpatient or
OPD services, so that services classified through 68697). residential setting. In accordance with
within each group are comparable For CY 2010, we retained the two-tier section 1301(a) of HCERA 2010, we
clinically and with respect to the use of payment approach for partial revised the definition of a CMHC in the
resources. In accordance with these hospitalization services and used only regulations to conform to the revised
provisions, we have developed the PHP hospital-based PHP data in computing definition now set forth under section
APCs. Since a day of care is the unit that the PHP APC per diem costs, upon 1861(ff)(3)(B) of the Act (75 FR 71990).
defines the structure and scheduling of which PHP APC per diem payment rates For CY 2012, as discussed in the CY
partial hospitalization services, we are based. We used only hospital-based 2012 OPPS/ASC final rule with
established a per diem payment PHP data because we were concerned comment period (76 FR 74348 through
methodology for the PHP APCs, about further reducing both PHP APC 74352), we determined the relative
payment weights for partial to remove hospital-based PHP service cost inversions for hospital-based PHPs
hospitalization services provided by days that use a CCR that was greater addressed in the CY 2016 and CY 2017
CMHCs based on data derived solely than five to calculate costs for at least OPPS/ASC final rules with comment
from CMHCs and the relative payment one of their component services, and a period (80 FR 70459 and 81 FR 79682).
weights for partial hospitalization trim on CMHCs with a geometric mean We also implemented an eight-percent
services provided by hospital-based cost per day that is above or below 2 outlier cap for CMHCs to mitigate
PHPs based exclusively on hospital (±2) standard deviations from the mean. potential outlier billing vulnerabilities
data. We stated in the CY 2016 OPPS/ASC by limiting the impact of inflated CMHC
In the CY 2013 OPPS/ASC final rule final rule with comment period (80 FR charges on outlier payments. We stated
with comment period, we finalized our 70456) that, without using a trimming that we will continue to monitor the
proposal to base the relative payment process, the data from these providers trends in outlier payments and consider
weights that underpin the OPPS APCs, would inappropriately skew the policy adjustments as necessary.
including the four PHP APCs (APCs geometric mean per diem cost for Level For a comprehensive description of
0172, 0173, 0175, and 0176), on 2 CMHC services. PHP payment policy, including a
geometric mean costs rather than on the In addition, in the CY 2016 OPPS/ detailed methodology for determining
median costs. We established these four ASC final rule with comment period (80 PHP per diem amounts, we refer readers
PHP APC per diem payment rates based FR 70459 through 70460), we corrected to the CY 2016 and CY 2017 OPPS/ASC
on geometric mean cost levels a cost inversion that occurred in the final rules with comment period (80 FR
calculated using the most recent claims final rule data with respect to hospital- 70453 through 70455 and 81 FR 79678
and cost data for each provider type. For based PHP providers. We corrected the through 79680).
a detailed discussion on this policy, we cost inversion with an equitable In the CYs 2018 and 2019 OPPS/ASC
refer readers to the CY 2013 OPPS/ASC adjustment to the actual geometric mean final rules with comment period (82 FR
final rule with comment period (77 FR per diem costs by increasing the Level 59373 through 59381, and 83 FR 58983
68406 through 68412). 2 hospital-based PHP APC geometric through 58998, respectively), we
In the CY 2014 OPPS/ASC proposed mean per diem costs and decreasing the continued to apply our established
rule (78 FR 43621 through 43622), we Level 1 hospital-based PHP APC policies to calculate the PHP APC per
solicited comments on possible future geometric mean per diem costs by the diem payment rates based on geometric
initiatives that may help to ensure the same factor, to result in a percentage mean per diem costs using the most
long-term stability of PHPs and further difference equal to the average percent recent claims and cost data for each
improve the accuracy of payment for difference between the hospital-based provider type. We also continued to
PHP services, but proposed no changes. Level 1 PHP APC and the Level 2 PHP designate a portion of the estimated 1.0
In the CY 2014 OPPS/ASC final rule APC for partial hospitalization services percent hospital outpatient outlier
with comment period (78 FR 75050 from CY 2013 through CY 2015. threshold specifically for CMHCs,
through 75053), we summarized the Finally, we renumbered the PHP consistent with the percentage of
comments received on those possible APCs, which were previously APCs projected payments to CMHCs under the
future initiatives. We also continued to 0172 and 0173 for CMHCs’ partial OPPS, excluding outlier payments. In
apply our established policies to hospitalization Level 1 and Level 2 the CY 2019 OPPS/ASC final rule with
calculate the four PHP APC per diem services, and APCs 0175 and 0176 for comment period (83 FR 58997 through
payment rates based on geometric mean hospital-based partial hospitalization 58998), we also included proposed
per diem costs using the most recent Level 1 and Level 2 services to APCs updates to the PHP allowable HCPCS
claims data for each provider type. For 5851 and 5852 for CMHCs’ partial codes. Specifically, we proposed to
a detailed discussion on this policy, we hospitalization Level 1 and Level 2 delete six psychological and
refer readers to the CY 2014 OPPS/ASC services, and APCs 5861 and 5862 for neuropsychological testing CPT codes,
final rule with comment period (78 FR hospital-based partial hospitalization which affect PHPs, and to add nine new
75047 through 75050). Level 1 and Level 2 services, codes as replacements. We refer readers
In the CY 2015 OPPS/ASC final rule respectively. For a detailed discussion to section VIII.D. of the proposed rule
with comment period (79 FR 66902 of the PHP ratesetting process, we refer
for a discussion of those proposed
through 66908), we continued to apply readers to the CY 2016 OPPS/ASC final
updates and the applicability for CY
our established policies to calculate the rule with comment period (80 FR 70462
four PHP APC per diem payment rates 2020.
through 70467).
based on PHP APC geometric mean per In the CY 2017 OPPS/ASC final rule B. Final PHP APC Update for CY 2020
diem costs, using the most recent claims with comment period (81 FR 79687
and cost data for each provider type. through 79691), we continued to apply 1. Final PHP APC Geometric Mean Per
In the CY 2016 OPPS/ASC final rule our established policies to calculate the Diem Costs
with comment period (80 FR 70455 PHP APC per diem payment rates based In summary, for CY 2020, we are
through 70465), we described our on geometric mean per diem costs using finalizing our proposal as proposed to
extensive analysis of the claims and cost the most recent claims and cost data for use the CY 2020 CMHC geometric mean
data and ratesetting methodology. We each provider type. However, we per diem cost calculated in accordance
found aberrant data from some hospital- finalized a policy to combine the Level with our existing methodology, but with
based PHP providers that were not 1 and Level 2 PHP APCs for CMHCs and a cost floor equal to the CY 2019 final
captured using the existing OPPS ±3 to combine the Level 1 and Level 2 geometric mean per diem cost for
standard deviation trims for extreme APCs for hospital-based PHPs because CMHCs of $121.62 (83 FR 58991), as the
cost-to-charge ratios (CCRs) and we believed this would best reflect basis for developing the CY 2020 CMHC
excessive CMHC charges resulting in actual geometric mean per diem costs APC per diem rate. We are also
CMHC geometric mean costs per day going forward, provide more predictable finalizing our proposal to use the CY
that were approximately the same as or per diem costs, particularly given the 2020 hospital-based PHP geometric
more than the daily payment for small number of CMHCs, and generate mean per diem cost of $233.52,
inpatient psychiatric facility services. more appropriate payments for these calculated in accordance with our
Consequently, we implemented a trim services, for example by avoiding the existing methodology for hospital-based
PHPs, as the basis for developing the CY FR 70455 through 70462) for CY 2016 payment data, resulting in the inclusion
2020 hospital-based APC per diem rate. and subsequent years. of 43 CMHCs. There were 319 CMHC
We are finalizing our proposal to use the claims removed during data preparation
a. CMHC Data Preparation: Data Trims,
most recent updated claims and cost steps because they either had no PHP-
Exclusions, and CCR Adjustments
data to calculate CY 2020 geometric allowable codes or had zero payment
mean per diem costs in this final rule For this CY 2020 final rule with days, leaving 12,265 CMHC claims in
with comment period. comment period, prior to calculating the our CY 2020 final rule ratesetting
Also, we are finalizing our proposal to final geometric mean per diem cost for modeling.
continue to use CMHC APC 5853 CMHC APC 5853, we prepared the data After applying all of the previously
(Partial Hospitalization (3 or More by first applying trims and data listed trims, exclusions, and
Services Per Day)) and hospital-based exclusions, and assessing CCRs as adjustments, we followed the
PHP APC 5863 (Partial Hospitalization described in the CY 2016 OPPS/ASC methodology described in the CY 2016
(3 or More Services Per Day)). These final rule with comment period (80 FR OPPS/ASC final rule with comment
proposals, which we are finalizing as 70463 through 70465), so that period (80 FR 70464 through 70465) and
proposed in this final rule with ratesetting is not skewed by providers modified in the CY 2017 OPPS/ASC
comment period, are discussed in more with extreme data. Before any trims or final rule with comment period (81 FR
detail. exclusions were applied, there were 44 79687 through 79688, and 79691) to
CMHCs in the PHP claims data file. calculate a CMHC APC geometric mean
2. Development of the Final PHP APC Under the ±2 standard deviation trim per diem cost.74 The calculated CY 2020
Geometric Mean Per Diem Costs policy, we excluded any data from a geometric mean per diem cost for all
In preparation for CY 2020 and CMHC for ratesetting purposes when the CMHCs for providing 3 or more services
subsequent years, we followed the PHP CMHC’s geometric mean cost per day per day (CMHC APC 5853) is $103.50,
ratesetting methodology described in was more than ±2 standard deviations a decrease from $121.62 calculated last
section VIII.B.2. of the CY 2016 OPPS/ from the geometric mean cost per day year for CY 2019 ratesetting (83 FR
ASC final rule with comment period (80 for all CMHCs. In applying this trim for 58986 through 58989). This final
FR 70462 through 70466) to calculate CY 2020 ratesetting, no CMHCs had calculated per diem cost for CMHCs is
the PHP APCs’ geometric mean per geometric mean costs per day below the almost the same as the $103.42
diem costs and payment rates for APCs trim’s lower limit of $20.58 or had geometric mean per diem cost
5853 and 5863, incorporating the geometric mean costs per day above the calculated for the CY 2020 OPPS/ASC
modifications made in the CY 2017 trim’s upper limit of $520.48. Therefore, proposed rule (84 FR 39515 to 39516).
OPPS/ASC final rule with comment we did not exclude any CMHCs because Due to this fluctuation from the CY
period. As discussed in section VIII.B.1. of the ±2 standard deviation trim. 2019 final CMHC geometric mean per
of the CY 2017 OPPS/ASC final rule In accordance with our PHP diem cost, we investigated why the CY
with comment period (81 FR 79680 ratesetting methodology, we also 2020 final calculated CMHC APC
through 79687), the geometric mean per remove service days with no wage index geometric mean per diem cost had
diem cost for hospital-based PHP APC values, because we use the wage index decreased from the prior year, and
5863 is based upon actual hospital- data to remove the effects of geographic found that two large providers reported
based PHP claims and costs for PHP variation in costs prior to APC lower costs per day than those reported
service days providing 3 or more geometric mean per diem cost for the CY 2019 final rule ratesetting;
services. Similarly, the geometric mean calculation (80 FR 70465). For this CY those two providers heavily influenced
per diem cost for CMHC APC 5853 is 2020 final rule with comment period the calculated geometric mean per diem
based upon actual CMHC claims and ratesetting, no CMHC was missing wage cost. Because these providers had a high
costs for CMHC service days providing index data for all of its service days and, number of paid PHP days, and because
three or more services. therefore, no CMHC was excluded. the CMHC data set is so small (n=43),
The CMHC or hospital-based PHP However, one CMHC had no days with these providers had a significant
APC per diem costs are the provider- Medicare payment, and it was excluded influence on the calculated CY 2020
type specific costs derived from the from ratesetting. CMHC APC geometric mean per diem
most recent claims and cost data. The In addition to our trims and data
CMHC or hospital-based PHP APC per exclusions, before calculating the PHP 74 Each revenue code on the CMHC claim must
diem payment rates are the national APC geometric mean per diem costs, we have a HCPCS code and charge associated with it.
We multiply each claim service line’s charges by
unadjusted payment rates calculated also assess CCRs (80 FR 70463). Our the CMHC’s overall CCR from the OPSF (or
from the CMHC or hospital-based PHP longstanding PHP OPPS ratesetting statewide CCR, where the overall CCR was greater
APC geometric mean per diem costs, methodology defaults any CMHC CCR than 1) to estimate CMHC costs. Only the claims
after applying the OPPS budget greater than one to the statewide service lines containing PHP allowable HCPCS
codes and PHP allowable revenue codes from the
neutrality adjustments described in hospital CCR (80 FR 70457). For this CY CMHC claims remaining after trimming are retained
section II.A.4. of this final rule with 2020 OPPS/ASC final rule with for CMHC cost determination. The costs, payments,
comment period. comment period ratesetting, there were and service units for all service lines occurring on
As previously stated, in the CY 2020 no CMHCs that showed CCRs greater the same service date, by the same provider, and for
the same beneficiary are summed. CMHC service
OPPS/ASC proposed rule, we proposed than one. Therefore, it was not days must have 3 or more services provided to be
to apply our established methodologies necessary to default any CMHC to its assigned to CMHC APC 5853. The final geometric
in calculating the CY 2020 geometric statewide hospital CCR for ratesetting. mean per diem cost for CMHC APC 5853 is
mean per diem costs and payment rates, In summary, these data preparation calculated by taking the nth root of the product of
n numbers, for days where 3 or more services were
including the application of a ±2 steps did not adjust the CCR for any provided. CMHC service days with costs ±3
standard deviation trim on costs per day CMHCs with a CCR greater than one standard deviations from the geometric mean costs
for CMHCs and a CCR greater than 5 during our ratesetting process. We also within APC 5853 are deleted and removed from
hospital service day trim for hospital- did not exclude any CMHCs for other modeling. The remaining PHP service days are used
to calculate the final geometric mean per diem cost
based PHP providers. These two trims missing data or for failing the ±2 for each PHP APC by taking the nth root of the
were finalized in the CY 2016 OPPS/ standard deviation trim, but excluded product of n numbers for days where 3 or more
ASC final rule with comment period (80 one CMHC for having no Medicare services were provided.
cost. In the case of PHPs provided by using the CY 2019 CMHC geometric use a 3-year rolling average for the
CMHCs, we have a low number of PHP mean per diem cost as the floor is CMHC geometric mean per diem cost for
providers in our ratesetting dataset (43 appropriate because it is based on very CY 2020 would not have allowed us to
CMHCs compared to 374 hospital-based recent CMHC PHP claims and cost data do so. Therefore, we believe that it is
PHPs) that provide a small volume of and would help to protect provider more appropriate to use the final CY
services and, therefore, account for a access by preventing wide fluctuation in 2019 geometric mean per diem costs, by
limited amount of payments, relative to the per diem costs for CMHC APC 5853. provider type, as the cost floor for use
the rest of OPPS payments (total CY As we proposed, in this final rule with with the final calculated CY 2020 PHP
2018 CMHC payments are estimated to comment period, we used the most geometric mean per diem costs, by
be approximately 0.02 percent of all recent updated claims and cost data to provider type, because those CY 2019
OPPS payments). calculate CY 2020 CMHC geometric per diem costs are based on very recent
As noted in the CY 2020 OPPS/ASC mean per diem cost, which was $103.50. CMHC and hospital-based PHP claims
proposed rule (84 FR 39516), we are Because the final CY 2020 CMHC and cost data, are the easiest to
concerned that a final calculated CMHC calculated geometric mean per diem understand, and would result in
APC geometric mean per diem cost of cost of $103.50 is less than the proposed proposed geometric mean per diem
$103.50 would not support ongoing cost floor (which equals the final CY costs which would support access for
access to PHPs in CMHCs. This cost is 2019 CMHC APC geometric mean per both CMHCs and hospital-based PHPs.
nearly a 15 percent decrease from the diem cost of $121.62), the final CY 2020 We estimate the aggregate difference
final CY 2019 CMHC geometric mean CMHC geometric mean per diem cost is in the (prescaled) CMHC geometric
per diem cost. We believe access to $121.62. Implementing the cost floor for mean per diem costs for CY 2020 from
partial hospitalization services and CY 2020 will protect CMHCs since the finalizing the CMHC cost floor amount
PHPs is better supported when the final CY 2020 calculated per diem cost of $121.62 rather than the calculated
geometric mean per diem cost does not of $103.50 still results in an amount that CMHC geometric mean per diem cost of
fluctuate greatly. In addition, while the is less than $121.62. We believe $103.50 to be $1.7 million. We refer
CMHC APC 5853 is described as finalizing the CMHC cost floor amount readers to section XXVII. of this final
providing 3 or more partial of $121.62 as the final CY 2020 CMHC rule with comment period for payment
hospitalization services per day (81 FR APC geometric mean per diem cost impacts, which are budget neutral.
79680), 95 percent of CMHC paid days allows us to use the most recent or very We received 6 comments, with those
in CY 2018 were for providing 4 or more recent CMHC claims and cost reporting focused on CMHC rate setting
services per day. To be eligible for a data while still protecting provider summarized as follows:
PHP, a patient must need at least 20 Comment: Nearly all commenters
access. To be clear, this policy would
hours of therapeutic services per week, supported our proposal to calculate
only apply for the CY 2020 ratesetting.
as evidenced in the patient’s plan of updated per diem costs with a cost
care (42 CFR 410.43(c)(1)). To meet As we noted in the CY 2020 OPPS/ floor, to avoid fluctuations in CMHC
those patient needs, most PHP provider ASC proposed rule (84 FR 39516), we payments and help protect access.
paid days are for providing 4 or more also considered proposing a 3-year Response: We thank the commenters
services per day (we refer readers to rolling average calculated using the final for their support. For CY 2020, we are
Table 22.—Percentage of PHP Days by PHP geometric mean per diem costs, by finalizing the CY 2020 CMHC geometric
Service Unit Frequency of the proposed provider type, from CY 2018 (82 FR mean per diem cost as $121.62, which
rule). Therefore, the CMHC APC 5853 is 59378), CY 2019 (83 FR 58991), and the is the cost floor amount, rather than the
actually heavily weighted to the cost of calculated CY 2020 geometric mean per calculated geometric mean per diem
providing 4 or more services. The per diem cost from that proposed rule of cost of $103.50.
diem costs for CMHC APC 5853 have $103.42 for CMHCs, and the calculated Comment: Two commenters
been calculated as $124.92, $143.22, CY 2020 geometric mean per diem costs recommended that CMS pay CMHCs the
and $121.62 for CY 2017 (81 FR 79691), for hospital-based PHPs discussed in same rate as hospital-based PHPs, since
CY 2018 (82 FR 59378), and CY 2019 section VIII.B.2.b. of the CY 2020 OPPS/ these two provider types provide the
(83 FR 58991), respectively. We do not ASC proposed rule. The 3-year rolling same services and have the same
believe it is likely that the actual cost of averages discussed in that proposed rule qualified clinical staff. One commenter
providing partial hospitalization resulted in geometric mean per diem objected to CMS’ continuing use of the
services through a PHP by CMHCs has costs that would have been $122.75 for single-tier payment system for CMHCs,
suddenly declined when costs generally CMHCs, and $209.79 for hospital-based stating that it adversely affects the
increase over time. We are concerned by PHPs. While we believe this option quality and intensity of PHP services.
this fluctuation, which we believe is would have avoided the fluctuation in Response: The OPPS pays for
influenced by data from two large the geometric mean per diem cost and, outpatient services, including partial
providers. therefore, supported access to PHPs hospitalization services, based on the
Therefore, rather than simply provided by CMHCs, it would have costs of providing services using
finalizing the calculated CY 2020 CMHC maintained the fluctuation in the provider data from claims and cost
APC geometric mean per diem cost of geometric mean per diem costs used to reports, in accordance with statute.
$103.50 for CY 2020 ratesetting, we are derive the hospital-based PHP APC per Section 1833(t)(2)(B) of the Act provides
instead finalizing our proposal as diem payment rates. This is further that the Secretary may establish groups
proposed, to use the CY 2020 CMHC discussed in the hospital-based PHP of covered OPD services, within a
APC geometric mean per diem cost, section VIII.B.2.b. of the CY 2020 OPPS/ classification system developed by the
calculated in accordance with our ASC proposed rule and section Secretary for covered OPD services, so
existing methodology, but with a cost VIII.B.2.b. of this final rule. In addition, that services classified within each
floor equal to the CY 2019 final we believe that it is necessary to group are comparable clinically and
geometric mean per diem cost for recalculate the CMHC geometric mean with respect to the use of resources.
CMHCs of $121.62 (83 FR 58991), as the per diem cost for this final rule with While CMHCs and hospital-based
basis for developing the final CY 2020 comment period using updated claims CMHCs provide the same clinical
CMHC APC per diem rate. We believe and cost data, and simply proposing to services, their resource use differs,
because these two provider types have single-tier payment system. Based on based PHPs, and the effects on
different cost structures. We see this the utilization data found in Table 22 of beneficiary access to care. Two
difference in cost structures reflected this final rule, the percentage of paid commenters wrote that the current
when we calculate the geometric mean PHP days which have only three payment methodology has resulted in
cost per day for CMHCs versus for services has been relatively stable over reductions in provider access rather
hospital-based PHPs, where CMHC costs time. As we note in section VIII.B.3.b, than protection of access. Commenters
per day are consistently lower than with only 2 years of claims data noted that these declines have occurred
hospital-based PHP costs per day. For reflecting the single-tiered payment while the need for mental health
example, the final CY 2020 calculated system, we do not have enough data yet services has increased; that the demand
geometric mean costs for providing PHP to identify any trends in utilization that for mental health services is on track to
services were $103.50 per day for could be associated with the change outpace the supply of behavioral health
CMHCs, but were $233.52 per day for from two-tiered to single-tiered care providers; and that as the number
hospital-based PHPs. In this final rule payment. We continue to monitor the of PHPs declines, it may become even
and in prior rulemaking, commenters percentage of 3-service days and are also more difficult to calculate the
and CMS have noted that hospitals tend monitoring the provision of 20 hours appropriate per diems. A few
to have higher costs than CMHCs, per week of PHP services, to ensure commenters noted that decreased access
particularly higher overhead (83 FR there are no unintended consequences to PHP services could result in
58986; 82 FR 59377; 81 FR 79686 to of a single-tier payment system on PHP increasing instances of patient
69687). Therefore, we do not believe we intensity. We are unable to determine recidivism and more inpatient
can pay CMHCs the same APC rate as the effects of the single-tier payment on psychiatric admissions. One commenter
hospital-based PHPs, and should CMHC quality, because there are no noted that beneficiaries would have
calculate a CMHC APC rate based on the quality measures for CMHCs, nor is their treatment alternatives limited if
CMHC costs which providers supply on quality reporting required of CMHCs. CMHCs closed, and therefore, be forced
their cost reports. We strongly However, we do not believe that a to use more costly hospital-based PHPs,
encourage CMHCs to review cost single-tier payment system would affect with higher beneficiary co-payments.
reporting instructions to be sure they are the quality of care provided in a CMHC. A commenter expressed concerns
reporting their costs correctly. These Comment: One commenter noted that, about CMHC rate setting being based on
instructions are available in chapter 45 in the past, CMS stated that CMHCs only 41 providers, and wrote that the
of the Provider Reimbursement Manual, provide fewer services and have less data are skewed, the calculations are
Part 2, available on the CMS website at costly staff than hospitals. incorrect, and the proposed low
https://www.cms.gov/Regulations-and- Response: We believe that the payment rates would result in the
Guidance/Guidance/Manuals/Paper- commenter may be referring to the CY remaining CMHCs closing. This
Based-Manuals.html. 2011 OPPS/ASC final rule with commenter noted that setting CMHCs’
We believe our policy to replace the comment period (75 FR 71991), which payment rates based on a small number
existing Level 1 and Level 2 PHP APCs states that we believe that CMHCs have of CMHCs does not reflect the actual
for both provider types with a single a lower cost structure than their cost of providing these services and
PHP APC, by provider type, is hospital-based PHP counterparts expressed concern that by using the
supported by the statute and regulations because the data showed that CMHCs mean or median costs, more CMHCs
and will continue to pay for partial provide fewer PHP services in a day and would close. The same commenter also
hospitalization services appropriately use less costly staff than hospital-based stated that CMHCs incur extra costs to
based upon actual provider costs (81 FR PHPs. Those statements were based on meet the CMHC conditions of
79683). Regarding the commenter’s CY 2009 claims and cost data, which participation (CoPs), have experienced
concern about the small number of differ from more recent claims and cost an increase in bad debt expense, and the
providers and the use of a single-tier data. Each year, we calculate geometric effects of sequestration.
payment system, we refer the mean per diem costs based on updated Response: We appreciate the work
commenter to the CY 2017 OPPS/ASC claims and cost reports. We do not have PHPs do to care for a particularly
final rule with comment period (81 FR detailed labor cost data to make a direct vulnerable population with serious
79682 to 79685), where we discussed comparison of CMHC versus hospital- mental illnesses and believe that having
our rationale for implementing the based PHP staff costs, so we could not PHPs available to beneficiaries helps
single-tier payment system for CMHCs. comment on whether CMHCs have prevent patient recidivism and inpatient
A key reason behind implementing the lower labor costs than hospital-based psychiatric admissions. We share the
single tier for CMHCs was to reduce cost PHPs. But we note that both provider commenters’ concerns about the decline
fluctuations and bring more stability to types use similar types of clinical staff in the number of PHPs, particularly at
CMHC APC rates, especially given the (see personnel qualifications in 42 CFR CMHCs, and the effect on access. Our
small number of providers (81 FR 485.904 for CMHCs, and in 42 CFR goal is to protect access to both provider
79683). We also noted that the costs of 482.12, 482.23, and 482.62 for types, so beneficiaries have choices
providing a Level 1 CMHC day were hospitals). Regarding the level of regarding where to receive treatment.
nearly the same as the cost of providing services provided, we refer the We want to ensure that CMHCs remain
a Level 2 CMHC day (81 FR 79684). In commenter to the utilization data in a viable option as providers of mental
accordance with the regulations at 42 section VIII.B.3.b. of this CY 2020 final health care in the beneficiary’s own
CFR 419.31, we could not justify rule with comment period for details on community. We agree that beneficiaries
continuing to separate these services current level of services CMHCs receiving care at a CMHC instead of a
into two APCs, but combined clinically provide, based on CY 2018 claims data. hospital-based PHP would have lower
similar services with similar resource Table 22 shows that CMHCs provide out-of-pocket costs.
use into a single APC (81 FR 79683 to more days with four or more services We disagree that the CMHC data are
79684). than hospital-based PHPs. skewed and that the calculations are
We do not believe the intensity of Comment: Several commenters incorrect. In the CY 2016 OPPS/ASC
PHP services provided in hospitals and expressed concern about the decline in final rule (80 FR 70456 to 70459), we
in CMHCs has been affected by using a the number of CMHCs and hospital- implemented a ±2 standard deviation
trim on CMHC costs per day to remove change the percentage. In contrast to the outpatient setting: (1) 30-Day
aberrant data that could skew costs up Medicare bad debt reimbursement Readmission; (2) Group Therapy; and
or down inappropriately. We recognize policy, private sector insurers typically (3) No Individual Therapy. We refer
that with a small number of providers, do not reimburse providers for any readers to the CY 2015 OPPS/ASC final
such as the 43 CMHCs used for this final amounts of enrollees’ unpaid rule with comment period (79 FR 66957
rule rate setting, the calculations can be deductibles or coinsurance. In light of through 66958) for a more detailed
influenced by large providers. That budgetary constraints and the steady discussion of PHP measures considered
occurred in this CY 2020 final rule rate increase in bad debt claims over the for inclusion in the Hospital OQR
setting, as discussed previously in this years, a reduction in bad debt Program in future years, and of the
section, and we proposed and are reimbursement is necessary to protect comments received as a result of the
finalizing a cost floor in CY 2020 to help the Medicare Trust Fund and preserve solicitation. However, the Hospital OQR
protect CMHCs from this fluctuation beneficiary access to care without Program does not apply to CMHCs, and
and possible effects on access. imposing an undue burden on hospitals. there are no quality measures applied to
We are confident that the per diem Finally, the reduction in payments CMHCs.
costs we calculate follow the due to sequestration has been mandated Comment: Several commenters
methodology we discussed in the CY by Congress, and we are unable to recommended that more work be done
2016 OPPS/ASC final rule with remove or modify it. This mandatory to establish PHP rates accurately, that
comment period (80 FR 70462 to 70466) payment reduction was established by CMS reconsider its PHP policy positions
and in the CY 2017 OPPS/ASC final rule the Budget Control Act of 2011 (Pub. L. to determine how to rebuild PHP
with comment period (81 FR 79691). 112–25) and amended by the American services, or that CMS establish a task
Those costs are geometric mean per Taxpayer Relief Act of 2012 (Pub. L. force to review and discuss the
diem costs, rather than arithmetic mean 112–240). Sequestration is discussed in availability of PHPs for Medicare
or median per diem costs; in the CY a Medicare Fee-for-Service Provider beneficiaries.
2013 OPPS final rule (77 FR 68409), we eNews article available at: https:// Response: We will continue to
discussed the advantages of using www.cms.gov/Outreach-and-Education/ explore policy options for strengthening
geometric means rather than medians to Outreach/FFSProvPartProg/Downloads/ the PHP benefit and increasing access to
calculate PHP costs, and noted that the 2013-03-08-standalone.pdf. the valuable services provided by
geometric mean more accurately Sequestration is outside the scope of the CMHCs as well as by hospital-based
captures the full range of service costs CY 2020 OPPS/ASC proposed rule and PHPs. As part of that process, we
(including outliers) than the median this final rule with comment period. regularly review our methodology to
cost and promotes more stability in the Comment: One commenter suggested ensure that it is appropriately capturing
payment system. that CMS use value-based purchasing the cost of care reported by providers.
We believe that providing payment for paying CMHCs instead of a cost- For example, for the CY 2016
that is based upon actual provider- based system. This commenter ratesetting, we extensively reviewed the
reported costs will not lead to provider recommended that CMS look at the methodology used for PHP ratesetting.
closures. As we have noted in prior value provided by the quality of In the CY 2016 OPPS/ASC final rule
rulemaking (76 FR 74350; 79 FR 66906), provided services. This commenter with comment period (80 FR 70462
the closure of PHPs may be due to any believed that rewarding providers for through 70466), we also included a
number of reasons, such as business higher-quality care, as measured by detailed description of the ratesetting
management or marketing decisions, selected standards, instead of rewarding process to help all PHP providers record
competition, oversaturation of certain providers for increasing costs, is a better costs correctly so that we can more fully
geographic areas, and Federal and State way to improve the quality of any capture PHP costs in ratesetting. In this
fraud and abuse efforts, among others. It service. CY 2020 ratesetting, we proposed and
does not directly follow that closure Response: We responded to a similar are finalizing a policy to calculate the
could be due to reduced per diem public comment in the CY 2016 OPPS/ CY 2020 per diem costs with a cost
payment rates alone, especially when ASC final rule with comment period (80 floor. We believe that policy helps to
the per diem payment rates reflect the FR 70462) and refer readers to a support access, particularly for CMHCs,
costs of PHP providers, as stated in summary of that comment and our whose calculated costs were still below
claims and cost data. response. Currently, there is no the cost floor when we ran the
Furthermore, most (if not all) of the statutory language authorizing value- calculations with updated data for this
costs associated with adhering to CoPs based purchasing for CMHCs or for final rule with comment period.
should be captured in the cost report outpatient hospital-based PHPs. To We also recognize that as the number
data used in ratesetting and, therefore, reiterate, sections 1833(t)(2) and of providers decreases, the ratesetting
are accounted for when computing the 1833(t)(9) of the Act set forth the calculations can be more strongly
geometric mean per diem costs. The requirements for establishing and influenced by the costs of large
reduction to bad debt reimbursement adjusting OPPS payment rates, which providers. We are regularly evaluating
was a result of provisions of section are based on costs, and which include our rate setting methodology to ensure
3201 of the Middle Class Tax Extension PHP payment rates. that it is as accurate as possible, and
and Job Creation Act of 2012 (Pub. L. We note that section 1833(t)(17) of the captures provider cost data fully.
112–96). The reduction to bad debt Act authorizes the Hospital Outpatient However, our rate setting methodology
reimbursement impacted all providers Quality Reporting (OQR) Program, must comply with requirements given
eligible to receive bad debt which applies a payment reduction to in statute at 1833(t)(2) and 1833(t)(9),
reimbursement, as discussed in the CY subsection (d) hospitals that fail to meet and depends heavily on provider-
2013 End-Stage Renal Disease final rule program requirements. In the CY 2015 reported costs. As noted previously, we
(77 FR 67518). Medicare currently OPPS/ASC proposed rule (79 FR 41040), strongly encourage CMHCs to review
reimburses bad debt for eligible we considered future inclusion of, and cost reporting instructions to be sure
providers at 65 percent. Because this requested comments on, the following they are reporting their costs correctly.
percentage was enacted by Congress, quality measures addressing PHP issues These instructions are available in
CMS does not have the authority to that would apply in the hospital chapter 45 of the Provider
Reimbursement Manual, Part 2, applying trims and data exclusions. We hospital-based PHP APC geometric
available on the CMS website at https:// applied a trim on hospital service days mean per diem cost for hospital-based
www.cms.gov/Regulations-and- for hospital-based PHP providers with a PHP providers that provide 3 or more
Guidance/Guidance/Manuals/Paper- CCR greater than 5 at the cost center services per service day (hospital-based
Based-Manuals.html. We also strongly level. To be clear, the CCR greater than PHP APC 5863) is $233.52, which is an
encourage those CMHCs that do not file 5 trim is a service day-level trim in increase of 4.8 percent from $222.76
full cost reports to consider doing so, to contrast to the CMHC ±2 standard calculated last year for CY 2019
help us in more fully capturing CMHC deviation trim, which is a provider-level ratesetting (83 FR 58989 through 58991).
costs in rate setting. trim. Applying this CCR greater than 5 The increase in the final CY 2020
We maintain positive working trim removed affected service days from calculated hospital-based PHP APC
relationships with various industry one hospital-based PHP provider with a geometric mean per diem cost from the
leaders representing both CMHCs and CCR of 6.398 from our final ratesetting. prior year is influenced by two large
hospital-based PHP providers with However, 100 percent of the service providers with updated cost data, whose
whom we have consistently met over days for this one hospital-based PHP costs per day increased. We believe that
the years to discuss industry concerns provider had at least one service a hospital-based PHP APC geometric
and ideas. These relationships have associated with a CCR greater than 5, so mean per diem cost of $233.52 supports
provided significant and valued input the trim removed this provider entirely ongoing access to hospital-based PHPs.
regarding PHP ratesetting. We also hold from our final ratesetting. In addition, This cost is nearly a 5 percent increase
Hospital Outpatient Open Door Forum 59 hospital-based PHPs were removed from the final CY 2019 hospital-based
calls monthly, in which all individuals for having no PHP costs and, therefore, PHP geometric mean per diem cost.
are welcome to participate and/or no days with PHP payment. Two In the CY 2020 OPPS proposed rule
submit questions regarding specific hospital-based PHPs were removed (84 FR 39516 to 39518), the calculated
issues, including questions related to because none of their days included CY 2020 hospital-based PHP APC
PHPs. Furthermore, we initiate PHP-allowable HCPCS codes. No geometric mean per diem cost for
rulemaking annually, through which we hospital-based PHPs were removed for hospital-based PHP providers that
receive public comments on proposals missing wage index data, nor were any provide 3 or more services per service
set forth in a proposed rule and respond hospital-based PHPs removed by the day (hospital-based PHP APC 5863) was
to those comments in a final rule. All OPPS ±3 standard deviation trim on $198.53, which was a decrease from
individuals are provided an opportunity costs per day. (We refer readers to the $222.76 calculated last year for CY 2019
to comment, and we give consideration OPPS Claims Accounting Document, ratesetting (83 FR 58989 through 58991).
to each comment that we receive. Given available online at https:// We stated that we believe access is
the relationships that we have www.cms.gov/Medicare/Medicare-Fee- better supported when the geometric
established with various industry for-Service-Payment/Hospital mean per diem cost does not fluctuate
leaders and the various means for us to OutpatientPPS/Downloads/CMS-1695- greatly. In addition, while the hospital-
receive comments and FC-2019-OPPS-FR-Claims- based PHP APC 5863 is described as
recommendations, we believe that we Accounting.pdf.) providing payment for the cost of 3 or
receive adequate input regarding Overall, we removed 62 hospital- more services per day (81 FR 79680), 89
ratesetting and take that input into based PHP providers [(1 with all service percent of hospital-based PHP paid
consideration when establishing the days having a CCR greater than 5) + (59 service days in CY 2018 were for
payment rates. We continue to welcome with zero daily costs and no PHP providing 4 or more services per day. To
any input and information that the payment) + (2 with no PHP-allowable be eligible for a PHP, a patient must
public is willing to provide. HCPCS codes)], resulting in 374 (436 need at least 20 hours of therapeutic
After consideration of the comments, total ¥ 62 excluded) hospital-based services per week, as evidenced in the
we are finalizing our proposal as PHP providers in the data used for patient’s plan of care (42 CFR
proposed. Because the final CY 2020 calculating ratesetting. In addition, no 410.43(c)(1)). To meet those patient
calculated CMHC geometric mean per hospital-based PHP providers were needs, most PHP paid service days
diem cost of $103.50 is less than the defaulted to their overall hospital provide 4 or more services (we refer
cost floor amount of $121.62, the final ancillary CCRs due to outlier cost center readers to Table 22.—Percentage of PHP
CY 2020 CMHC geometric mean per CCR values. Days by Service Unit Frequency in the
diem cost is $121.62. After completing these data proposed rule). Therefore, the hospital-
b. Hospital-Based PHP Data Preparation: preparation steps, we calculated the based PHP APC 5863 is actually heavily
Data Trims and Exclusions final CY 2020 geometric mean per diem weighted to the cost of providing 4 or
cost for hospital-based PHP APC 5863
For this CY 2020 final rule with for hospital-based partial hospitalization PHP-allowable revenue codes from the hospital-
comment period, we prepared data services by following the methodology based PHP claims remaining after trimming are
consistent with our policies as described in the CY 2016 OPPS/ASC retained for hospital-based PHP cost determination.
described in the CY 2016 OPPS/ASC final rule with comment period (80 FR
The costs, payments, and service units for all
final rule with comment period (80 FR service lines occurring on the same service date, by
70464 through 70465) and modified in the same provider, and for the same beneficiary are
70463 through 70465) for hospital-based the CY 2017 OPPS/ASC final rule with summed. Hospital-based PHP service days must
PHP providers, which is similar to that comment period (81 FR 79687 and have 3 or more services provided to be assigned to
used for CMHCs. The CY 2018 PHP 79691).75 The final calculated CY 2020
hospital-based PHP APC 5863. The final geometric
claims included data for 436 hospital- mean per diem cost for hospital-based PHP APC
5863 is calculated by taking the nth root of the
based PHP providers for our 75 Each revenue code on the hospital-based PHP product of n numbers, for days where 3 or more
calculations in this CY 2020 OPPS/ASC claim must have a HCPCS code and charge services were provided. Hospital-based PHP service
final rule with comment period. associated with it. We multiply each claim service days with costs ±3 standard deviations from the
Consistent with our policies as stated line’s charges by the hospital’s department-level geometric mean costs within APC 5863 are deleted
CCR; in CY 2020 and subsequent years, that CCR and removed from modeling. The remaining
in the CY 2016 OPPS/ASC final rule is determined by using the PHP-only revenue-code- hospital-based PHP service days are used to
with comment period (80 FR 70463 to-cost-center crosswalk. Only the claims service calculate the final geometric mean per diem cost for
through 70465), we prepared the data by lines containing PHP-allowable HCPCS codes and hospital-based PHP APC 5863.
more services. The per diem costs for diem cost for the final rule using We received several comments on our
hospital-based PHP APC 5863 have been updated claims and cost data; had we proposal.
calculated as $213.14, $208.09, and simply proposed to use a 3-year rolling Comment: Several commenters
$222.76 for CY 2017 (81 FR 79691), CY average per diem cost floor for the expressed concern about the decline in
2018 (82 FR 59378), and CY 2019 (83 FR hospital-based PHP APC per diem costs the number of CMHCs and hospital-
58991), respectively. We noted that we for CY 2020, we could not have done so. based PHPs, and the effects on
do not believe that it is likely that the We were concerned that the 3-year beneficiary access to care. Two
cost of providing hospital-based PHP rolling average per diem cost would commenters wrote that the current
services has suddenly declined when have continued to result in a fluctuation payment methodology has resulted in
costs generally increase over time. We in the cost of a hospital providing 3 or reductions in provider access rather
were concerned by this fluctuation, more hospital-based PHP services per than protection of access. Commenters
which we believe was influenced by day. noted that these declines have occurred
data from a single large provider that We believe that it is important to while the need for mental health
had low service costs per day. support access to partial hospitalization services has increased; that the demand
Therefore, rather than proposing the services in both CMHCs and in hospital- for mental health services is on track to
calculated CY 2020 hospital-based PHP based PHPs, and note that hospital- outpace the supply of behavioral health
APC geometric mean per diem cost, we based PHPs provide 80 percent of all care providers; that as the number of
instead proposed to use the CY 2020 paid PHP service days. Therefore, we PHPs declines, it may become even
hospital-based PHP APC geometric believe that it was more appropriate to more difficult to calculate the
mean per diem cost, calculated in have proposed to use the final CY 2019 appropriate per diems; and that recent
accordance with our existing geometric mean per diem costs, by changes in OPPS rulemaking related to
methodology, but with a cost floor equal provider type, as the cost floor for use Section 603 of the Bipartisan Budget Act
to the CY 2019 final geometric mean per with the calculated CY 2020 PHP of 2015 require that the per diem for
diem cost for hospital-based PHPs of geometric mean per diem costs, by new hospital-based PHP programs must
$222.76 (83 FR 58991), as the basis for provider type, because those CY 2019 be set equal to the lower CMHC rate,
developing the CY 2020 hospital-based per diem costs are based on very recent which they said was not viable for
PHP APC per diem rate. As part of this CMHC and hospital-based PHP claims hospital-based PHPs and would limit
proposal, we proposed that we would and cost data, are the easiest to the ability to create new PHP programs.
use the most recent updated claims and understand, and would result in final A few commenters noted that decreased
cost data to calculate CY 2020 geometric geometric mean per diem costs which access to PHP services could result in
mean per diem costs for the final rule would help to protect provider access increasing instances of patient
with comment period, just as we did for by preventing wide fluctuation in the recidivism and more inpatient
CMHCs. We believe using the CY 2019 per diem costs for both CMHCs and psychiatric admissions.
hospital-based PHP per diem cost as the hospital-based PHPs. Response: We appreciate the work
floor is appropriate because it is based While the cost floor would have PHPs do to care for a particularly
on very recent hospital-based PHP protected hospital-based PHPs if the vulnerable population with serious
claims and cost data and would help to final CY 2020 calculated hospital-based mental illnesses and believe that having
protect provider access by preventing PHP APC geometric mean per diem cost PHPs available to beneficiaries helps
wide fluctuation in the per diem costs were still less than $222.76, the final prevent patient recidivism and inpatient
for hospital-based APC 5863. calculated hospital-based PHP psychiatric admissions. We share the
In the CY 2020 OPPS/ASC proposed geometric mean per diem cost of commenters’ concerns about the decline
rule discussion of the proposed cost $233.52 is greater than the floor, and in the number of PHPs and the effect on
floor, we also considered proposing a 3- therefore, we are finalizing this access. Our goal is to protect access to
year rolling average calculated using the calculated CY 2020 cost for hospital- both provider types, so beneficiaries
final PHP geometric mean per diem based PHPs. We believe finalizing our have choices regarding where to receive
costs, by provider type, from CY 2018 proposal for CY 2020 ratesetting allows treatment. We also refer readers to
(82 FR 59378) and CY 2019 (83 FR us to use the most recent or very recent section VIII.B.2.a. for a similar comment
58991), and the calculated CY 2020 hospital-based PHP claims and cost and response related to CMHCs.
geometric mean per diem cost of reporting data while still protecting Regarding the effects of Section 603 of
$198.53 discussed earlier in this section provider access. To be clear, this policy the Bipartisan Budget Act of 2015 76 on
for hospital-based PHPs. As discussed of using a cost floor is only applied for hospital-based PHP access, we note that
previously in that proposed rule, the 3- the CY 2020 ratesetting. this provision amended the statute at
year rolling average per diem cost floor In the CY 2020 OPPS/ASC proposed section 1833(t) of the Act to require that
for CMHCs would have been $122.75, rule, we estimated that the aggregate certain items and services furnished in
but the resulting rolling average per difference in the (prescaled) hospital- certain off-campus provider-based
diem cost floor for hospital-based PHPs based PHP geometric mean per diem departments (PBDs) shall not be
would have been $209.79. While we costs for CY 2020 from proposing the considered covered outpatient
believe that this option would have hospital-based PHP cost floor amount of department services for purposes of
supported access to CMHCs, as $222.76 rather than the calculated OPPS, and payment for those
discussed previously, it could have hospital-based PHP geometric mean per nonexcepted items and services shall be
resulted in a geometric mean per diem diem cost of $198.53 to be $9.3 million. made ‘‘under the applicable payment
cost for the hospital-based PHP APC However, because we are finalizing the system’’ beginning January 1, 2017 (81
which still would have been a decrease CY 2020 calculated geometric mean per FR 79720).
from the hospital-based PHP APC diem cost for hospital-based PHPs, there These amendments do not prevent
geometric mean per diem cost of is no cost difference to Medicare from hospitals from creating new PHP
$222.76 finalized in CY 2019 (83 FR using a cost floor. We refer readers to programs. Instead, they provide that
58991). In addition, we believed that it section XXVII. of this final rule for certain items and services are no longer
was necessary to recalculate the payment impacts, which are budget
hospital-based PHP geometric mean per neutral. 76 Public Law 114–74.
covered OPD services payable under the excepted off-campus hospital-based outpatient setting: (1) 30-Day
OPPS, and instead must be paid under PHPs at the CY 2020 CMHC APC 5853 Readmission; (2) Group Therapy; and
another ‘‘applicable payment system.’’ payment rate results in a payment that (3) No Individual Therapy. We also refer
CMS adopted the Medicare Physician is 52 percent of the CY 2020 APC 5863 readers to the CY 2015 OPPS/ASC final
Fee Schedule (MPFS) as the applicable OPPS payment rate for hospital-based rule with comment period (79 FR 66957
payment system for these services (81 PHPs. The final FY 2020 payment rates through 66958) for a discussion of the
FR 79717). Although, nonexcepted off- for PHP APCs 5853 and 5863 are in comments received and of PHP
campus provider-based departments are Addendum A to this final rule with measures considered for inclusion in
no longer paid under the OPPS and comment period, which is available in the Hospital OQR Program in future
payments may be lower for these the FY 2020 OPPS/ASC final rule years.
departments, the section 603 changes do supporting documents found on our Comment: Several commenters
not prohibit these departments from website at https://www.cms.gov/ recommended that more work be done
creating PHP programs. Excepted off- Medicare/Medicare-Fee-for-Service- to establish PHP rates accurately, that
campus provider-based departments Payment/HospitalOutpatientPPS/ CMS reconsider its PHP policy positions
and the main campuses of hospitals Hospital-Outpatient-Regulations-and- to determine how to rebuild PHP
continue to be paid under the OPPS, so Notices.html. services, or that CMS establish a task
it is unclear for these locations why Comment: One commenter suggested force to review and discuss the
entities could not create new PHPs. that CMS base PHP reimbursement on availability of PHPs for Medicare
Commenters were incorrect in stating incentives determined by documented beneficiaries.
that new hospital-based PHPs are paid productivity results. This commenter Response: We will continue to
at the CMHC per diem rate. Only non- suggested we consider Measurement- explore policy options for strengthening
excepted off-campus PHPs are paid based Care and Patient Satisfaction. the PHP benefit and increasing access to
through the MPFS at the CMHC rate; Response: We believe ‘‘measurement- the valuable services provided by
new hospital-based PHPs that are on- based care’’ that the commenter cited CMHCs as well as by hospital-based
campus are paid at the hospital-based refers to administering a standardized PHPs. As part of that process, we
PHP per diem rate under the OPPS. instrument to measure some aspect of regularly review our methodology to
We believe that paying non-excepted patient symptoms when he or she ensure that it is appropriately capturing
off-campus PHPs through the MPFS at begins and ends receiving PHP services. the cost of care reported by providers.
the CMHC APC rate is appropriate. We This type of measure could inform For example, for the CY 2016
note that the clinical services, staffing, clinical decision-making and quality ratesetting, we extensively reviewed the
and documentation requirements are improvement activities at minimum, but methodology used for PHP ratesetting.
similar for CMHCs and hospital-based results could theoretically be used to In the CY 2016 OPPS/ASC final rule
PHPs. As discussed in the CY 2017 adjust payment. We also believe that the with comment period (80 FR 70462
OPPS/ASC final rule with comment commenter is asking if CMS could through 70466), we also included a
period (81 FR 79717), when a administer patient satisfaction surveys detailed description of the ratesetting
beneficiary receives services in an off- (like HCAHPS) and then reward high- process to help all PHP providers record
campus department of a hospital (such performing PHPs. costs correctly so that we can more fully
as in a hospital-based PHP), the Currently, there is no statutory capture PHP costs in ratesetting. In this
Medicare payment is generally higher language explicitly authorizing an CY 2020 ratesetting, we proposed to
than when those same services are incentive payment methodology based calculate the CY 2020 per diem costs
provided in a physician’s office. on productivity results or patient with a cost floor. We believe that
Similarly, when partial hospitalization satisfaction for CMHCs or for outpatient proposal helped support access,
services are provided in a hospital- hospital-based PHPs. We responded to a particularly for CMHCs, whose
based PHP, Medicare pays more than similar public comment in the CY 2016 calculated costs were still below the
when those same services are provided OPPS/ASC final rule with comment cost floor when we ran the calculations
by a CMHC. CMHCs are freestanding period (80 FR 70462) and refer readers with updated data for this final rule
providers that are not part of a hospital, to a summary of that comment and our with comment period.
and that have lower cost structures than response. To reiterate, sections We also recognize that as the number
hospital-based PHPs. This is similar to 1833(t)(2) and 1833(t)(9) of the Act set of providers decreases, the ratesetting
the differences between freestanding forth the requirements for establishing calculations can be more strongly
entities paid under the MPFS that and adjusting OPPS payment rates, influenced by the costs of large
furnish other services also provided by which are based on costs, and which providers. We are regularly evaluating
hospital-based entities. We believe that include PHP payment rates. We note our rate setting methodology to ensure
paying for non-excepted hospital-based that section 1833(t)(17) of the Act that it is as accurate as possible, and
partial hospitalization services at the authorizes the Hospital Outpatient captures provider cost data fully.
lower CMHC per diem rate is in Quality Reporting (OQR) Program, However, our rate setting methodology
alignment with section 603 amendments which applies a payment reduction to must comply with requirements given
to the OPPS statute, while also subsection (d) hospitals that fail to meet in statute at 1833(t)(2) and 1833(t)(9),
protecting access to the PHP benefit. program requirements; as finalized in and depends heavily on provider-
Furthermore, we note that our policy the CY 2019 OPPS/ASC final rule with reported costs. We remind hospital-
of paying non-excepted off-campus comment period (83 FR 59109 to based PHPs that they are required to
PHPs at the CMHC APC 5853 per diem 59110), this payment reduction applies record PHP costs in cost center line
rate provides some relief to those off- to HCPCS codes which include PHP 9399 (‘‘Partial Hospitalization
campus PHPs since non-PHP mental services. In the CY 2015 OPPS/ASC Program’’), which was added to the cost
health services provided by non- proposed rule (79 FR 41040), we report in response to commenters in
excepted off-campus hospital provider considered future inclusion of, and prior OPPS rulemaking (81 FR 79691);
departments are paid through the MPFS requested comments on, the following this line is the primary source of the
at 40 percent of the OPPS APC amount quality measures addressing PHP issues department-level CCR used for hospital-
for the same service. Paying non- that would apply in the hospital based PHP ratesetting in the Revenue
Code to Cost Center crosswalk. Line recommendations, we believe that we finalizing a CY 2020 geometric mean per
9399 should not mix other non-PHP receive adequate input regarding diem cost for CMHCs of $121.62. In
mental health service costs with PHP ratesetting and take that input into addition, because the CY 2020 final
costs. PHP costs incorrectly recorded in consideration when establishing the calculated hospital-based PHP
other cost centers may not be included payment rates. We continue to welcome geometric mean per diem cost is greater
for PHP rate setting, thereby affecting any input and information that the than the hospital-based PHP cost floor
the hospital-based PHP per diem cost public is willing to provide. amount of $222.76, we are finalizing the
amount. We refer readers to section VIII.B.2.a. final calculated CY 2020 hospital-based
We maintain positive working for a similar comment and response PHP geometric mean per diem cost of
relationships with various industry related to CMHCs. $233.52. In this final rule with comment
leaders representing both CMHCs and After consideration of the comments, period, we used the most recent
hospital-based PHP providers with we are finalizing our proposal as updated claims and cost data to
whom we have consistently met over proposed. Because the final CY 2020 calculate CY 2020 geometric mean per
the years to discuss industry concerns calculated hospital-based PHP diem costs. The inclusion of a cost floor,
and ideas. These relationships have geometric mean per diem cost of which is based on very recent data,
provided significant and valued input $233.52 is greater than the cost floor protected CMHCs as their final
regarding PHP ratesetting. We also hold amount of $222.76, the final CY 2020 calculated per diem cost was still less
Hospital Outpatient Open Door Forum hospital-based PHP geometric mean per
than the cost floor amount, but was not
calls monthly, in which all individuals diem cost is $233.52.
needed for hospital-based PHPs.
are welcome to participate and/or In summary, for CY 2020, we are
submit questions regarding specific finalizing our proposal to use the These final CY 2020 PHP geometric
issues, including questions related to calculated CY 2020 CMHC geometric mean per diem costs are shown in Table
PHPs. Furthermore, we initiate mean per diem cost and the calculated 45, and are used to derive the final CY
rulemaking annually, through which we CY 2020 hospital-based PHP geometric 2020 PHP APC per diem rates for
receive public comments on proposals mean per diem cost, each calculated in CMHCs and hospital-based PHPs. The
set forth in a proposed rule and respond accordance with our existing final CY 2020 PHP APC per diem rates
to those comments in a final rule. All methodology, but with a cost floor equal are included in Addendum A to this
individuals are provided an opportunity to the CY 2019 final geometric mean per final rule with comment period (which
to comment, and we give consideration diem costs as the basis for developing is available on the CMS website at:
to each comment that we receive. Given the CY 2020 PHP APC per diem rates, https://www.cms.gov/Medicare/
the relationships that we have as proposed. Because the final CY 2020 Medicare-Fee-for-Service-Payment/
established with various industry calculated geometric mean per diem HospitalOutpatientPPS/Hospital-
leaders and the various means for us to cost for CMHCs is less than the cost Outpatient-Regulations-and-
receive comments and floor amount of $121.62, we are Notices.html).77
3. PHP Service Utilization Updates through 79685), we expressed concern revealed some changes in the provision
a. Provision of Individual Therapy over the low frequency of individual of individual therapy compared to CY
therapy provided to beneficiaries. The 2015, CY 2016, and CY 2017 claims data
In the CY 2016 OPPS/ASC final rule CY 2018 claims data used for this CY as shown in the Table 46.
with comment period (81 FR 79684 2020 final rule with comment period
77 As discussed in section II.A. of this CY 2020

the Act, and ensures that the estimated aggregate OPPS Claims Accounting narrative and in section
OPPS/ASC final rule, final OPPS APC geometric weight under the OPPS for a calendar year is II. of this final rule for more information on scaling
mean per diem costs (including final PHP APC neither greater than nor less than the estimated the weights, and for details on the final steps of the
geometric mean per diem costs) are divided by the aggregate weight that would have been made process that leads to final PHP APC per diem
final geometric mean per diem costs for APC 5012 without the changes. To adjust for budget neutrality
payment rates. The OPPS Claims Accounting
(Clinic Visits and Related Services) to calculate (that is, to scale the weights), we compare the
each PHP APC’s unscaled relative payment weight. estimated aggregated weight using the scaled narrative is available on the CMS website at:
An unscaled relative payment weight is one that is relative payment weights from the previous https://www.cms.gov/Medicare/Medicare-Fee-for-
not yet adjusted for budget neutrality. Budget calendar year at issue. We refer readers to the Service-Payment/HospitalOutpatientPPS/Hospital-
ER12NO19.076</GPH>
neutrality is required under section 1833(t)(9)(B) of ratesetting procedures described in Part 2 of the Outpatient-Regulations-and-Notices.html.
As shown in Table 46A, the CY 2018 (82 FR 33640 and 82 FR 59378), we implementation of CMHC APC 5853 and
claims show that both CMHCs and stated that we are aware that our single- hospital-based PHP APC 5863 for
hospital-based PHPs have slightly tier payment policy may influence a providing 3 or more PHP services per
increased the provision of individual change in service provision because day, we are continuing to monitor
therapy on days with 4 or more services, providers are able to obtain payment utilization of days with only 3 PHP
compared to CY 2017 claims. However, that is heavily weighted to the cost of services.
on days with 3 services, CMHCs and providing four or more services when
hospital-based PHPs both decreased the For this CY 2020 OPPS/ASC final rule
they provide only 3 services. We with comment period, we used the CY
provision of individual therapy indicated that we are interested in
compared to prior years. 2018 claims data. Table 46A shows the
ensuring that providers furnish an utilization findings based on the final
b. Provision of 3-Service Days appropriate number of services to claims data.
In the CY 2018 OPPS/ASC proposed beneficiaries enrolled in PHPs.
rule and final rule with comment period Therefore, with the CY 2017
ER12NO19.077</GPH>
As shown in Table 46A, the CY 2018 and explained that it was never our every day. They also noted that the
claims data used for this final rule with intention that 3 units of service typical patient profile includes
comment period show that utilization of represent the number of services to be behaviors that work against attendance
3 service days is increasing compared to provided in a typical PHP day. PHP is and full daily participation. In addition,
the 3 prior claim years. Compared to CY furnished in lieu of inpatient the commenters wrote that there are
2017, in CY 2018 hospital-based PHPs psychiatric hospitalization and is other challenges to providing 20 hours
provided more days with 3 services intended to be more intensive than a of services per week that are beyond
only, more days with 4 services only, half-day program. We further indicated providers’ control, such as holidays,
and fewer days with 5 or more services. that a typical PHP day should generally weather, and other medical
Compared to CY 2017, in CY 2018 consist of 5 to 6 units of service (73 FR appointments.
CMHCs provided more days with 3 68689). We explained that days with Response: We appreciate that most
services, fewer days with 4 services, and only 3 units of services may be
PHP days include 4 or more services
more days with 5 or more services. appropriate to bill in certain limited
being provided, but the updated data for
The CY 2017 data are the first year of circumstances, such as when a patient
claims data to reflect the change to the this final rule showed an uptick in the
might need to leave early for a medical
single-tier PHP APCs. We hope the percentage of 3-service days. We will
appointment and, therefore, would be
increase in the percentage of days with continue to monitor the data over time.
unable to complete a full day of PHP
3 services is simply an anomaly rather treatment. At that time, we noted that if The ‘‘20-hour rule’’ the commenters
than the start of a trend, but more data a PHP were to only provide days with mentioned is from our regulations at 42
will be needed to make that 3 services, it would be difficult for CFR 410.43(c) (discussed at 73 FR 68694
determination. As we noted in the CY patients to meet the eligibility to 68695), which require that eligible
2017 OPPS/ASC final rule with requirement in 42 CFR 410.43(c)(1) that PHP patients need at least 20 hours of
comment period (81 FR 79685), we will patients must require a minimum of 20 therapeutic services per week, as
continue to monitor the provision of hours per week of therapeutic services evidenced in their plan of care. PHPs
days with only 3 services, particularly as evidenced in their plan of care (73 FR are intended to be intensive programs
now that the single-tier PHP APCs 5853 68689). that are provided in lieu of inpatient
and 5863 are established for providing We received 2 comments related to hospitalization. We appreciate the
3 or more services per day for CMHCs PHP utilization. efforts providers have made to increase
and hospital-based PHPs, respectively. Comment: Two commenters noted beneficiary attendance, and also
It is important to reiterate our that the data in Table 22 of the proposed recognize the provider concerns about
expectation that days with only 3 rule demonstrate commitment by PHPs circumstances beyond their control
services are meant to be an exception to comply with and exceed the 20-hour which can affect the number of hours of
and not the typical PHP day. In the CY rule. These commenters noted that the services provided each week. We did
2009 OPPS/ASC final rule with vast majority of claim days for CMHCs not make any proposals related to the
comment period (73 FR 68694), we and hospital-based PHPs have 4 or more 20-hour requirement, and are
clearly stated that we consider the services provided. The commenters continuing to monitor the claims data
acceptable minimum units of PHP noted that PHPs are voluntary, and that regarding the hours per week of services
ER12NO19.078</GPH>
services required in a PHP day to be 3 they cannot force patients to attend provided, sending providers
informational messaging without CMHC per diem payments and outlier Each Provider = Total CMHC
affecting payment. payments by using the most recent Outlier Payments.
C. Outlier Policy for CMHCs
available utilization and charges from • Step 3: We determined the
CMHC claims, updated CCRs, and the percentage of all OPPS outlier payments
In this CY 2020 OPPS/ASC final rule updated payment rate for APC 5853. For that CMHCs represent by dividing the
with comment period, for CY 2020, we increased transparency, we are estimated CMHC outlier payments from
are finalizing to continue to calculate providing a more detailed explanation Step 2 by the total OPPS outlier
the CMHC outlier percentage, cutoff of the existing calculation process for payments from Step 1:
point and percentage payment amount, determining the CMHC outlier (Estimated CMHC Outlier Payments/
outlier reconciliation, outlier payment percentages. As previously stated, we Total OPPS Outlier Payments).
cap, and fixed-dollar threshold proposed to continue to calculate the
according to previously established In CY 2019, we designated
CMHC outlier percentage according to
policies. These topics are discussed in approximately 0.01 percent of that
previously established policies, and we
more detail. We refer readers to section estimated 1.0 percent hospital
did not propose any changes to our
II.G. of the CY 2020 OPPS/ASC current methodology for calculating the outpatient outlier threshold for CMHCs
proposed rule for our general policies CMHC outlier percentage for CY 2020. (83 FR 58996), based on this
for hospital outpatient outlier payments To calculate the CMHC outlier methodology. In the CY 2020 proposed
(84 CFR 39434 through 39435. percentage, we followed three steps: rule (84 FR 39521), we proposed to
• Step 1: We multiplied the OPPS continue to use the same methodology
1. Background for CY 2020. Therefore, based on our CY
outlier threshold, which is 1.0 percent,
As discussed in the CY 2004 OPPS by the total estimated OPPS Medicare 2020 payment estimates, CMHCs are
final rule with comment period (68 FR payments (before outliers) for the projected to receive 0.02 percent of total
63469 through 63470), we noted a prospective year to calculate the hospital outpatient payments in CY
significant difference in the amount of estimated total OPPS outlier payments: 2020, excluding outlier payments. We
outlier payments made to hospitals and (0.01 × Estimated Total OPPS Payments) proposed to designate approximately
CMHCs for PHP services. Given the = Estimated Total OPPS Outlier less than 0.01 percent of the estimated
difference in PHP charges between Payments. 1.0 percent hospital outpatient outlier
hospitals and CMHCs, we did not threshold for CMHCs. This percentage is
believe it was appropriate to make • Step 2: We estimated CMHC outlier based upon the formula given in Step 3.
outlier payments to CMHCs using the payments by taking each provider’s CMS did not receive any comments
outlier percentage target amount and estimated costs (based on their on the CMHC outlier percentage, so we
threshold established for hospitals. allowable charges multiplied by the are finalizing the proposal as proposed.
Therefore, beginning in CY 2004, we provider’s CCR) minus each provider’s
estimated CMHC outlier multiplier 3. Cutoff Point and Percentage Payment
created a separate outlier policy specific Amount
to the estimated costs and OPPS threshold (we refer readers to section
payments provided to CMHCs. We VIII.C.3. of this final rule with comment As described in the CY 2018 OPPS/
designated a portion of the estimated period). That threshold is determined by ASC final rule with comment period (82
OPPS outlier threshold specifically for multiplying the provider’s estimated FR 59381), our policy has been to pay
CMHCs, consistent with the percentage paid days by 3.4 times the CMHC PHP CMHCs for outliers if the estimated cost
of projected payments to CMHCs under APC payment rate. If the provider’s of the day exceeds a cutoff point. In CY
the OPPS each year, excluding outlier costs exceeded the threshold, we 2006, we set the cutoff point for outlier
payments, and established a separate multiplied that excess by 50 percent, as payments at 3.4 times the highest CMHC
outlier threshold for CMHCs. This described in section VIII.C.3. of this PHP APC payment rate implemented for
separate outlier threshold for CMHCs final rule with comment period, to that calendar year (70 FR 68551). For CY
resulted in $1.8 million in outlier determine the estimated outlier 2018, the highest CMHC PHP APC
payments to CMHCs in CY 2004 and payments for that provider. CMHC payment rate is the payment rate for
$0.5 million in outlier payments to outlier payments are capped at 8 CMHC PHP APC 5853. In addition, in
CMHCs in CY 2005 (82 FR 59381). In percent of the provider’s estimated total CY 2002, the final OPPS outlier
contrast, in CY 2003, more than $30 per diem payments (including the payment percentage for costs above the
million was paid to CMHCs in outlier beneficiary’s copayment), as described multiplier threshold was set at 50
payments (82 FR 59381). in section VIII.C.5. of this final rule with percent (66 FR 59889). In CY 2018, we
comment period, so any provider’s costs continued to apply the same 50 percent
2. CMHC Outlier Percentage that exceed the CMHC outlier cap will outlier payment percentage that applies
In the CY 2018 OPPS/ASC final rule have its payments adjusted downward. to hospitals to CMHCs and continued to
with comment period (82 FR 59267 After accounting for the CMHC outlier use the existing cutoff point (82 FR
through 59268), we described the cap, we summed all of the estimated 59381). Therefore, for CY 2018, we
current outlier policy for hospital outlier payments to determine the continued to pay for partial
outpatient payments and CMHCs. We estimated total CMHC outlier payments. hospitalization services that exceeded
note that we also discussed our outlier (Each Provider’s Estimated Costs—Each 3.4 times the CMHC PHP APC payment
policy for CMHCs in more detail in Provider’s Estimated Multiplier rate at 50 percent of the amount of
section VIII. C. of that same final rule Threshold) = A. If A is greater than CMHC PHP APC geometric mean per
(82 FR 59381). We set our projected 0, then (A × 0.50) = Estimated diem costs over the cutoff point. For
target for all OPPS aggregate outlier CMHC Outlier Payment (before cap) example, for CY 2018, if a CMHC’s cost
payments at 1.0 percent of the estimated = B. If B is greater than (0.08 × for partial hospitalization services paid
aggregate total payments under the Provider’s Total Estimated Per Diem under CMHC PHP APC 5853 exceeds
OPPS (82 FR 59267). This same policy Payments), then cap-adjusted B = 3.4 times the CY 2018 payment rate for
was also reiterated in the CY 2019 (0.08 × Provider’s Total Estimated CMHC PHP APC 5853, the outlier
OPPS/ASC final rule with comment Per Diem Payments); otherwise, B = payment would be calculated as 50
period (83 FR 58996). We estimate B. Sum (B or cap-adjusted B) for percent of the amount by which the cost
exceeds 3.4 times the CY 2018 payment The policy also includes provisions APC 5853, it is not necessary to also
rate for CMHC PHP APC 5853 [0.50 × related to CCRs and to calculating the impose a fixed-dollar threshold on
(CMHC Cost¥(3.4 × APC 5853 rate))]. time value of money for reconciled CMHCs. Therefore, in the CY 2018
This same policy was also reiterated in outlier payments due to or due from OPPS/ASC final rule with comment
the CY 2019 OPPS/ASC final rule with Medicare, as detailed in the CY 2009 period, we did not set a fixed-dollar
comment period (83 FR 58996 through OPPS/ASC final rule with comment threshold for CMHC outlier payments
58997). period and in the Medicare Claims (82 FR 59381). This same policy was
In the CY 2020 OPPS/ASC proposed Processing Manual (73 FR 68595 also reiterated in the CY 2019 OPPS/
rule (84 FR 39521), in accordance with through 68599 and Medicare Claims ASC final rule with comment period (83
our existing policy, we proposed to Processing Internet Only Manual, FR 58996 through 58997.
continue to pay for partial Chapter 4, Section 10.7.2 and its In the CY 2020 OPPS/ASC proposed
hospitalization services that exceed 3.4 subsections, available online at: https:// rule (84 FR 39522), we proposed to
times the proposed CMHC PHP APC www.cms.gov/Regulations-and- continue this policy for CY 2020. CMS
payment rate at 50 percent of the CMHC Guidance/Guidance/Manuals/ did not receive any comments on the
PHP APC geometric mean per diem Downloads/clm104c04.pdf). fixed-dollar threshold, so we are
costs over the cutoff point. That is, for CMS did not receive comments on the finalizing our proposal as proposed.
CY 2020, if a CMHC’s cost for partial Outlier Reconciliation Policy, so we are
hospitalization services paid under finalizing our proposal as proposed. D. Update to PHP Allowable HCPCS
CMHC PHP APC 5853 exceeds 3.4 times Codes
5. Outlier Payment Cap
the payment rate for CMHC APC 5853, In the CY 2019 OPPS/ASC final rule
the outlier payment will be calculated In the CY 2017 OPPS/ASC final rule with comment period (83 FR 58997
as [0.50 × (CMHC Cost¥(3.4 × APC 5853 with comment period, we implemented through 58998), we discussed that,
rate))]. a CMHC outlier payment cap to be during the CY 2019 rulemaking, we
CMS did not receive comments on the applied at the provider level, such that received the Category I and III CPT
Cutoff Point and Percentage Payment in any given year, an individual CMHC codes from the AMA that were new,
Amount, so we are finalizing our will receive no more than a set revised, and deleted, effective January 1,
proposal as proposed. percentage of its CMHC total per diem 2019. This included the deleting of the
payments in outlier payments (81 FR following psychological and
4. Outlier Reconciliation
79692 through 79695). We finalized the neuropsychological testing CPT codes,
In the CY 2009 OPPS/ASC final rule CMHC outlier payment cap to be set at which affect PHPs, as of January 1,
with comment period (73 FR 68594 8 percent of the CMHC’s total per diem 2019:
through 68599), we established an payments (81 FR 79694 through 79695). • CPT code 96101 (Psychological
outlier reconciliation policy to address This outlier payment cap only affects testing by psychologist/physician);
charging aberrations related to OPPS CMHCs, it does not affect other provider • CPT code 96102 (Psychological
outlier payments. We addressed types (that is, hospital-based PHPs), and testing by technician);
vulnerabilities in the OPPS outlier is in addition to and separate from the • CPT code 96103 (Psychological
payment system that lead to differences current outlier policy and reconciliation testing administered by computer);
between billed charges and charges policy in effect. For CY 2019, we • CPT code 96118
included in the overall CCR, which are continued this policy in the CY 2019 (Neuropsychological testing by
used to estimate cost and would apply OPPS/ASC final rule with comment psychologist/physician)
to all hospitals and CMHCs paid under period (83 FR 58997). • CPT code 96119
the OPPS. CMS initiated steps to ensure For CY 2020 and subsequent years, (Neuropsychological testing by
that outlier payments appropriately we proposed to continue to apply the 8 technician); and
account for the financial risk when percent CMHC outlier payment cap to • CPT code 96120
providing an extraordinarily costly and the CMHC’s total per diem payments (84 (Neuropsychological test administered
complex service, but are only being FR 39522). w/computer).
made for services that legitimately CMS did not receive comments on the In addition, the AMA added the
qualify for the additional payment. CMHC outlier payment cap, so we are following psychological and
For a comprehensive description of finalizing our proposal as proposed. neuropsychological testing CPT codes to
outlier reconciliation, we refer readers replace the deleted codes, as of January
to the CY 2019 OPPS/ASC final rules 6. Fixed-Dollar Threshold
1, 2019:
with comment period (83 FR 58874 In the CY 2018 OPPS/ASC final rule • CPT code 96130 (Psychological
through 58875 and 81 FR 79678 through with comment period (82 FR 59267 testing evaluation by physician/
79680). through 59268), for the hospital qualified health care professional; first
In the CY 2020 OPPS/ASC proposed outpatient outlier payment policy, we hour);
rule, we proposed to continue these set a fixed-dollar threshold in addition • CPT code 93131 (Psychological
policies for partial hospitalization to an APC multiplier threshold. Fixed- testing evaluation by physician/
services provided through PHPs for CY dollar thresholds are typically used to qualified health care professional; each
2020. The current outlier reconciliation drive outlier payments for very costly additional hour);
policy requires that providers whose items or services, such as cardiac • CPT code 96132
outlier payments meet a specified pacemaker insertions. CMHC PHP APC (Neuropsychological testing evaluation
threshold (currently $500,000 for 5853 is the only APC for which CMHCs by physician/qualified health care
hospitals and any outlier payments for may receive payment under the OPPS, professional; first hour);
CMHCs) and whose overall ancillary and is for providing a defined set of • CPT code 96133
CCRs change by plus or minus 10 services that are relatively low cost (Neuropsychological testing evaluation
percentage points or more, are subject to when compared to other OPPS services. by physician/qualified health care
outlier reconciliation, pending approval Because of the relatively low cost of professional; each additional hour);
of the CMS Central Office and Regional CMHC services that are used to • CPT code 96136 (Psychological/
Office (73 FR 68596 through 68599). comprise the structure of CMHC PHP neuropsychological testing by
physician/qualified health care III.A.4. of the proposed rule for a • Most outpatient departments are
professional; first 30 minutes); detailed discussion of how we include equipped to provide the services to the
• CPT code 96137 (Psychological/ new and revised Category I and III CPT Medicare population.
neuropsychological testing by codes for a related calendar year, assign • The simplest procedure described
physician/qualified health care interim APC and status indicator by the code may be performed in most
professional; each additional 30 assignments, and allow for public outpatient departments.
minutes); comments on these interim assignments • The procedure is related to codes
• CPT code 96138 (Psychological/ for finalization in the next calendar year that we have already removed from the
neuropsychological testing by final rule with comment period. IPO list.
technician; first 30 minutes); We solicited public comments on • A determination is made that the
• CPT code 96139 (Psychological/ these proposals and since we did not
procedure is being performed in
neuropsychological testing by numerous hospitals on an outpatient
receive any comments, we are finalizing
technician; each additional 30 minutes); basis.
our proposals as proposed. • A determination is made that the
and
• CPT code 96146 (Psychological/ IX. Procedures That Will Be Paid Only procedure can be appropriately and
neuropsychological testing; automated as Inpatient Procedures safely performed in an ASC and is on
result only). the list of approved ASC procedures or
As we proposed in the CY 2019 A. Background has been proposed by us for addition to
OPPS/ASC final rule with comment We refer readers to the CY 2012 the ASC list.
period (83 FR 58997 through 58998), we OPPS/ASC final rule with comment
included these replacement codes in 2. Procedures Proposed for Removal
period (76 FR 74352 through 74353) for From the IPO List
Addenda B and O. As is our usual a full historical discussion of our
practice for including new and revised longstanding policies on how we Using the listed criteria, for the CY
Category I and III CPT codes under the identify procedures that are typically 2020 OPPS/ASC proposed rule, we
OPPS, we included interim APC provided only in an inpatient setting identified one procedure described by
assignments and status indicators for (referred to as the inpatient only (IPO) CPT code 27130 (Arthroplasty,
these codes and provided an list) and, therefore, will not be paid by acetabular and proximal femoral
opportunity under the OPPS for the Medicare under the OPPS, and on the prosthetic replacement (total hip
public to comment on these interim criteria that we use to review the IPO arthroplasty) with or without autograft
assignments. That is, we included list each year to determine whether or or allograft) that met the criteria for
comment indicator ‘‘NP’’ to indicate not any procedures should be removed proposed removal from the IPO list. The
that the code is new for the next from the list. The complete list of codes procedure that we proposed to remove
calendar year or the code is an existing that describe procedures that will be from the IPO list for CY 2020 and
code with substantial revision to its paid by Medicare in CY 2020 as subsequent years, including the CPT/
code descriptor in the next calendar inpatient only procedures is included as HCPCS code, long descriptor, and the
year as compared to current calendar Addendum E to this CY 2020 OPPS/ proposed CY 2020 payment indicator
year with a proposed APC assignment, ASC final rule with comment period, was displayed in Table 23 of the
and that comments will be accepted on which is available via the internet on proposed rule.
the proposed APC and status indicator the CMS website. For a number of years, total hip
assignments. arthroplasty (THA) has been a topic of
While these interim APC and status B. Changes to the Inpatient Only (IPO) discussion for removal from the IPO list
indicator assignments under the OPPS List with both stakeholder support and
were included in Addendum B and opposition. Most recently, in the CY
1. Methodology for Identifying
Addendum O to the CY 2019 OPPS/ASC 2018 OPPS/ASC proposed rule (82 FR
Appropriate Changes to IPO List
proposed rule and final rule with 33644 and 33645), we sought public
comment period, PHP providers may In the CY 2019 OPPS/ASC proposed comment on the possible removal of
not have been aware of those changes rule (84 FR 39523 through 39525), for partial hip arthroplasty (PHA), CPT
because we did not also include these CY 2020, we proposed to use the same code 27125 (Hemiarthroplasty, hip,
in the PHP discussion presented in the methodology (described in the partial (for example, femoral stem
proposed rule; to be clear, PHP is a part November 15, 2004 final rule with prosthesis, bipolar arthroplasty)), and
of the OPPS. To ensure that PHP comment period (69 FR 65834)) of total hip arthroplasty (THA) or total hip
providers were aware of the new and reviewing the current list of procedures replacement, CPT code 27130
replacement codes related to CMHC and on the IPO list to identify any (Arthroplasty, acetabular and proximal
hospital-based partial hospitalization procedures that may be removed from femoral prosthetic replacement (total
programs and had the opportunity to the list. We have established five criteria hip arthroplasty), with or without
comment on the changes, we utilized a that are part of this methodology. As autograft or allograft from the IPO list.
practice similar to the one we use under noted in the CY 2012 OPPS/ASC final Both THA and PHA were placed on the
the OPPS for new Level II HCPCS codes rule with comment period (76 FR original IPO list in the CY 2001 OPPS/
that become effective after the proposed 74353), we utilize these criteria when ASC final rule with comment period (65
rule is published. Therefore, in the CY reviewing procedures to determine FR 18780).
2019 OPPS/ASC final rule with whether or not they should be removed Among those commenters expressing
comment period, we proposed to delete from the IPO list and assigned to an support in response to the CY 2018
the same 6 CPT codes listed from the APC group for payment under the OPPS OPPS/ASC proposed rule (which we
PHP-allowable code set for CMHC APC when provided in the hospital summarized and responded to in the CY
5853 and hospital-based PHP APC 5863, outpatient setting. We note that a 2018 OPPS/ASC final rule with
and replace them with 9 new CPT codes procedure is not required to meet all of comment period (82 FR 52527 through
as shown in Table 47 of the final rule the established criteria to be removed 52528)) for removal of THA from the
with comment period, effective January from the IPO list. The criteria include IPO list were several surgeons and other
1, 2019. We also refer readers to section the following: stakeholders who believed that, given
thorough preoperative screening by and beneficiaries, responded to our procedure described by CPT code 27130
medical teams with significant solicitation of comments regarding the meets criteria 2 and 3 and our proposal
experience and expertise involving hip removal of PHA and THA from the IPO to assign the procedure to C–APC 5115
replacement procedures, the THA list (which we summarized and with status indicator ‘‘J1’’. We did not
procedure could be provided on an responded to in CY 2018 OPPS/ASC propose to remove PHA from the IPO
outpatient basis for some Medicare final rule with comment period (82 FR list because we continue to believe that
beneficiaries. These commenters noted 52527 through 52528)). The comments it does not meet the criteria for removal.
significant success involving same day were diverse and some were similar to Comment: In response to our proposal
discharge for patients who met the the comments we received on our to remove CPT code 27130 from the IPO
screening criteria and whose proposal to remove TKA from the IPO list, we received many of the same type
experienced medical teams were able to list. Some commenters, including of comments that we received in
perform the procedure early enough in hospital systems and associations, as response to our CY 2018 proposed rule
the day for the patients to achieve well as specialty societies and comment solicitation for removing THA.
postoperative goals, allowing home physicians, stated that it would not be Many commenters, including health
discharge by the end of the day. The clinically appropriate to remove PHA care providers and medical associations,
commenters believed that the benefits of and THA from the IPO list, indicating supported the proposal. The
providing the THA procedure on an that the patient safety profile of commenters recognized that with
outpatient basis include significant outpatient THA and PHA in the non- careful, appropriate selection, THA
enhancements in patient well-being, Medicare population is not well- could be performed in the outpatient
improved efficiency, and cost savings to established. Commenters representing setting with few to no complications.
the Medicare program, including shorter orthopedic surgeons also stated that One commenter, an orthopaedic
hospital stays resulting in fewer medical patients requiring a hemiarthroplasty specialty society, agreed with the
complications, improved results, and (PHA) for fragility fractures are, by patient selection characteristics that
enhanced patient satisfaction. nature, a higher risk, suffer more were noted in the proposed rule—
We stated in the CY 2018 OPPS/ASC extensive comorbidities, and require namely, that good candidates for
proposed rule that, like most surgical closer monitoring and preoperative outpatient THA have relatively low
procedures, both PHA and THA need to optimization; therefore, it would not be anesthesia risk, do not have significant
be tailored to the individual patient’s medically appropriate to remove the comorbidities, have in-home support,
needs. Patients with a relatively low PHA procedure from the IPO list. and are able to tolerate post-surgical
anesthesia risk and without significant Other commenters, including outpatient rehabilitation in either an
comorbidities who have family ambulatory surgery centers (ASCs), outpatient facility or in the home.
members at home who can assist them physicians, and beneficiaries, supported One commenter suggested that a
may likely be good candidates for an the removal of PHA and THA from the patient that requires a revision of a prior
outpatient PHA or THA procedure. IPO list. These commenters stated that hip replacement, and/or has other
These patients may also be able to the procedures were appropriate for complicating clinical conditions,
tolerate outpatient rehabilitation in certain Medicare beneficiaries and most including multiple co-morbidities such
either an outpatient facility or at home outpatient departments are equipped to as obesity, diabetes, heart disease, is not
postsurgery. On the other hand, patients provide THA to some Medicare a strong candidate for outpatient THA
with multiple medical comorbidities, beneficiaries. They also referenced their and should be scheduled for an
aside from their osteoarthritis, would own personal successful experiences inpatient stay. Furthermore, another
more likely require inpatient with outpatient THA. commenter stated that the following
hospitalization and possibly postacute social factors should be considered
a. Removal of Total Hip Arthroplasty when analyzing the implications of
care in a skilled nursing facility or other
From the Inpatient Only List outpatient THA: Living alone, pain,
facility. Surgeons who discussed
outpatient PHA and THA procedures in After reviewing the clinical prior hospitalization, depression,
public comments in response to our CY characteristics of the procedure functional status, high-risk medication,
2017 OPPS/ASC proposed rule (81 FR described by CPT code 27130, and health literacy. Additionally, both
45679) comment solicitation (which we considering the public comments supporters and opponents requested
summarized and responded to in the CY described earlier from past rules, that CMS provide detailed guidance on
2017 OPPS/ASC final rule with additional feedback from stakeholders, what those selection criteria should look
comment period (81 FR 79696)) on the and with further consultation with our like.
TKA procedure emphasized the clinical advisors regarding this Some commenters did not support the
importance of careful patient selection procedure, in the CY 2020 OPPS/ASC proposal, citing both clinical and
and strict protocols to optimize proposed rule (84 FR 39524), we stated operational concerns based on their
outpatient hip replacement outcomes. our belief that this procedure meets experience with the removal of TKA
These protocols typically manage all criterion 2 (the simplest procedure from the IPO in 2018. Those
aspects of the patient’s care, including described by the code may be performed commenters believe that it would be
the at-home preoperative and in most outpatient departments) and hasty to remove THA without waiting
postoperative environment, anesthesia, criterion 3 (the procedure is related to for providers and MACs to have a better
pain management, and rehabilitation to codes that we have already removed handle on performing TKA in the
maximize rapid recovery, ambulation, from the IPO list). As such, we believe outpatient setting and developing better
and performance of activities of daily that appropriately selected patients skill at performing appropriate patient
living. could have this procedure performed on selection. One commenter suggested
Numerous commenters representing a an outpatient basis. Therefore, we delaying the removal of THA from the
variety of stakeholders, including proposed to remove THA from the IPO IPO list for a year, until CMS could
physicians and other care providers, list and to assign the THA procedure provide greater evidence, specifically, a
individual stakeholders, specialty (CPT code 27130) to C–APC 5115 with rigorous medical literature review, that
societies, hospital associations, hospital status indicator ‘‘J1’’. We sought public THA could be performed safely in the
systems, ASCs, device manufacturers, comments on our conclusion that the outpatient or ASC setting, especially for
beneficiaries with multiple co- meets criteria 2 and 3—fails to consider it in either the hospital inpatient or
morbidities. whether or not outpatient facilities are outpatient setting; it does not mean that
Some commenters, including two equipped and appropriate for outpatient the procedure must be performed on an
major orthopaedic associations, raised THA, and whether or not THA is outpatient basis. The 2-midnight rule,
concerns about whether the THA performed safely in outpatient settings a which is discussed in section X.B. of
procedure meets the criteria required to majority of the time. this final rule with comment period,
be removed from the IPO list. One Response: We thank commenters for provides general guidance on when
commenter, an orthopaedic surgery providing public comments on the payment under Medicare Part A (that is,
specialty society for hips and knees, appropriateness of removing THA from hospital inpatient) may be appropriate.
shared that they do not believe THA the IPO list and providing it in However, the 2-midnight rule also
meets criterion 2 (the simplest outpatient settings. We appreciate the recognizes the importance of the
procedure described by the code may be support for the proposal. We also attending physician’s clinical judgment
performed in most outpatient recognize concerns for ensuring patient regarding the appropriate setting of care
departments)—they argued that there is health and quality care. As we have for a procedure to be performed.
no such thing as a simple THA and that stated numerous times, like most While we continue to expect
all procedures described by CPT code surgical procedures, the appropriate site providers who perform outpatient THA
27130 have moderate risks for of service for THA should be based on on Medicare beneficiaries to use
complications. The commenter further the physician’s assessment of the comprehensive patient selection criteria
argues that criterion 3 (the procedure is patient and tailored to the individual to identify appropriate candidates for
related to codes that we have already patient’s needs. As we stated in the the procedure, we believe that the
removed from the IPO list) is also not proposed rule (84 FR 39524), patients surgeons, clinical staff, and medical
met since they do not believe that THA with a relatively low anesthesia risk and specialty societies who perform
and TKA are similar, except for the risks without significant comorbidities who outpatient THA and possess specialized
associated with each in moving the site have family members at home who can clinical knowledge and experience are
of surgery. The commenter expressed assist them may likely be good most suited to create such guidelines.
additional concerns regarding criterion candidates for an outpatient THA Therefore, we do not expect to create or
4 (a determination is made that the procedure. On one hand, it may be endorse specific guidelines or content
procedure is being performed in determined that these patients will also for the establishment of providers’
numerous hospitals on an outpatient be able to tolerate outpatient patient selection protocols.
basis) and the lack of peer-reviewed rehabilitation either in an outpatient With respect to certain criteria not
literature that would provide supportive facility or at home postsurgery. On the being met, we remind commenters that
data. Finally, the commenter expressed other hand, patients that require a not all criteria must be met for a service
concerns regarding criterion 5 (a revision of a prior hip replacement, and/ to be removed from the IPO. We
determination is made that the or have other complicating clinical continue to believe that THA meets
procedure can be appropriately and conditions, including multiple co- criteria 2 and 3.
safely performed in an ASC and is on morbidities such as obesity, diabetes, Comment: Several commenters stated
the list of approved ASC procedures or heart disease, may not be strong concerns regarding the impact of
has been proposed by us for addition to candidates for outpatient THA. We also removing THA from the IPO list in light
the ASC list), stating that there is a lack recognize that elective THA, of the 2-midnight rule and subsequent
of peer-reviewed literature and the necessitated, for example, by RAC review. Because of past concerns
ability to guarantee excellent patient osteoarthritis, for a generally healthy with the removal of TKA from the IPO
selection and education, tailored patient with at-home support is list and fear of RAC review, commenters
anesthetic techniques, well-done different than THA for a hip fracture also suggested that if THA is removed
surgery, good medical care, and that is performed on either an emergent from the IPO list, that CMS should
exceptional post-operative care or scheduled basis. While the former provide a two-year exemption from site-
coordination in the ASC setting. The may be appropriate for outpatient THA of service denials and Recovery Audit
commenter conceded that performance if the physician believes that the patient Contractor (RAC) referrals. Commenters
of THA in the outpatient setting is may be safely discharged on the same or further stated that in addition to the
possible, but does not believe that data next day, the latter may be more exemption, CMS should also educate
and guidance on appropriate patient appropriate for hospital inpatient providers that CMS policy allows for
selection and education, patient-specific admission. case-by-case exceptions to the 2-
anesthetic techniques, and post- As previously stated in the discussion midnight rule in consideration of
operative care coordination are well of the CY 2018 OPPS/ASC final rule (82 patient history, co-morbidities, and risk
demonstrated in peer-reviewed FR 59383), we continue to believe that of adverse events.
literature. This commenter did note that the decision regarding the most Response: We thank the commenters
appropriate patient selection for appropriate care setting for a given for their feedback. We will again refer
outpatient THA candidates could surgical procedure is a complex medical readers to the more extensive discussion
mitigate some of its concerns. judgment made by the physician based of an exemption from site-of service
Another orthopaedic surgery specialty on the beneficiary’s individual clinical denials and RAC referrals in section
society called the removal of THA from needs and preferences and on the X.B. of this final rule with comment
the IPO list ‘‘rash,’’ and expressed general coverage rules requiring that any period. The case-by-case exception
extensive concern that CMS would procedure be reasonable and necessary. under the 2-midnight rule continues to
remove a procedure from the IPO list We also reiterate our previous statement allow for Part A payment to be made, on
based on only two of the five criteria that the removal of any procedure from a case-by-case basis, where the
used to determine appropriate removals the IPO list does not require the physician does not expect the patient to
for the IPO list. The commenter further procedure to be performed only on an remain in the hospital for at least two
expressed concern that the rationale outpatient basis. That is, when a midnights but nonetheless determines
behind removing THA from the IPO procedure is removed from the IPO, it that inpatient admission is necessary
list—specifically that CMS believes it simply means that Medicare will pay for based on the clinical characteristics of
the patient and that determination is inpatient; however, for the reasons cited have family members at home who can
supported by the medical record. in the CY 2020 OPPS/ASC proposed assist them may likely be (but are not
Comment: Several commenters rule, we continue to believe that it is necessarily) good candidates for an
opposed the removal of THA due to appropriate to remove THA as described outpatient THA procedure. These
potential detrimental impacts on by CPT code 27130 from the IPO list. patients may be determined to be able
hospitals participating in the After consideration of the public to tolerate outpatient rehabilitation
Comprehensive Care for Joint comments we received, we are either in an outpatient facility or at
Replacement (CJR) Program and the finalizing the removal of CPT code home postsurgery. While on the other
Bundled Payments for Care Initiative 27130, and assigning the procedure to hand, patients that require a revision of
(BCPI). Some commenters supported the C–APC 5115 (Level 5 Musculoskeletal a prior hip replacement, and/or has
proposal, but requested that payment for Procedures) with status indicator ‘‘J1’’. other complicating clinical conditions,
THA in the context of alternative In addition, we are removing anesthesia including multiple co-morbidities such
payment models be adjusted. code 01214, (anesthesia for open as obesity, diabetes, heart disease, may
Response: We again refer readers to procedures involving hip joint; total hip not be strong candidates for outpatient
the CY 2017 OPPS/ACS final rule with arthroplasty) as a conforming change. THA. As stated previously, we also
comment period (81 FR 79698 through As stated above, the decision recognize that elective THA,
79699) in which we originally proposed regarding the most appropriate care necessitated, for example, by
the removal of TKA procedural codes setting for a given surgical procedure is osteoarthritis, for a generally healthy
from the IPO list and sought comments a complex medical judgment made by patient with at-home support is
on how to modify the CJR and BPCI the physician based on the beneficiary’s different than THA for a hip fracture
programs to reflect the shift of some individual clinical needs and that is performed on either an emergent
Medicare beneficiaries from an inpatient preferences and on the general coverage or scheduled basis. While the former
TKA procedure to an outpatient TKA rules requiring that any procedure be may be appropriate for outpatient THA
procedure in the BPCI and CJR model reasonable and necessary. Further, the if the physician believes that the patient
pricing methodologies, including target removal of any procedure from the IPO may be safely discharged on the same or
price calculations and reconciliation list, including THA, does not require the next day, the latter may be more
processes, as we also believe it to be procedure to be performed only on an appropriate for hospital inpatient
applicable to THA. As in the case of the outpatient basis. That is, when a admission.
policy change to move THAs from the procedure is removed from the IPO, it
3. Solicitation of Public Comments on
IPO list, the CMS Innovation Center simply means that Medicare will pay for
the Potential Removal of Procedures
may consider making future changes to it in either the hospital inpatient or
Described by CPT Codes 22633, 22634,
the CJR and BPCI Models to address the outpatient setting; it does not mean that
63265, 63266, 63267, and 63268 From
removal of THAs from the IPO list and the procedure must be performed on an
the IPO List
the performance of THA procedures in outpatient basis. The decision to admit
the OPPS setting. as an inpatient admission or to perform Throughout the years, we have
Additionally, CMS notes the concerns the procedure on a hospital outpatient received several public comments on
about appropriate patient selection basis is subject to the complex medical additional CPT codes that stakeholders
raised by commenters and agrees that it judgment of the physician. While we believe fit our criteria and should be
is imperative that physicians and have not established patient selection removed from the IPO list. In the CY
hospitals are mindful of factors that criteria for THA or any other procedure, 2020 OPPS/ASC proposed rule, we
affect whether a patient would be a good we reiterate our finding that patients sought public comment on the removal
candidate for outpatient THA or should with a relatively low anesthesia risk and of the following procedures from the
instead be admitted as a hospital without significant comorbidities who IPO list in Table 47.
We reviewed the clinical described by the code may be performed performing transforaminal lumbar
characteristics of CPT codes 22633 and in most outpatient departments. We interbody fusions (TLIF) at an
22634 and stated that we believe they sought public comment on whether CPT outpatient facility.
are related to codes that we have already codes 63265 through 63268 meet criteria Commenters in support of the
removed from the IPO list. Specifically, to be removed from the IPO list, proposal argued that physicians perform
stakeholders have suggested that CPT including information from commenters the cases regardless of the IPO list—
codes 22633 and 22634 are related to to demonstrate that the codes meet these evaluating each patient carefully to
CPT code 22551 (Arthrodesis, anterior criteria. determine the best fit clinically for that
interbody, including disc space Comment: We received a few
patient. Several ASCs commented that
preparation, discectomy, comments in support of the removal of
they often perform all listed procedures
osteophytectomy and decompression of the services described by CPT codes
with few to no complications in that
spinal cord and/or nerve roots; cervical 22633, 22634, 63265, 63266, 63267, and
setting. This commenter supported not
below c2), which is currently performed 63268. Commenters agreed that these
only removing all six procedures from
in the outpatient hospital setting. procedures were both related to codes
the IPO list, but also adding them to the
During the proposed rule, we sought that were previously removed from the
ASC–CPL list.
public comments that would provide IPO list and are performed safely in
additional information on the safety of numerous hospitals on an outpatient Commenters further stated that
performing CPT codes 22633 and 22634 basis. Commenters largely provided although their current patient volume
in the outpatient hospital setting. anecdotal experience in support of does not constitute a large percentage of
In addition, we reviewed CPT codes removing these services from the IPO Medicare beneficiaries, they would
63265, 63266, 63267, and 63268. Over list. One commenter provided a March expect to see similar results with
the years, stakeholders indicated that 2019 published retrospective cohort Medicare patients that are active, have
this series of CPT codes should be study of lumbar interbody fusion to treat a relatively low anesthesia risk, do not
considered minimally invasive, arguing spinal pathology using the American have significant comorbidities and that
that CPT codes 63265, 63266, 63267, College of Surgeons National Surgical also have a support system at home that
and 63268 meet criteria 1 and 2 for Quality Improvement Program database. can assist them post-procedure. The
removal from the IPO list: Most The commenter believed that this study commenters specifically supported the
outpatient departments are equipped to provided additional insight into the removal of the six procedures based on
provide the services to the Medicare perioperative safety profile and the development of less invasive
ER12NO19.079</GPH>
population and the simplest procedure operative efficiency and efficacy of techniques, improved perioperative
pain management, and expedited We also received a few general meet criteria one and two: Most
rehabilitation protocols. comments in opposition to the prospect outpatient departments are equipped to
Specifically for the services described of removing the codes. Specifically, provide the services to the Medicare
by CPT codes 22633 and 22634, those who opposed removing the population and the simplest procedure
commenters agreed that related procedures expressed concern that all described by the code may be performed
procedures and similar codes such as six procedures in this comment in most outpatient departments. We also
22551 (Arthrodesis, anterior interbody, solicitation are complex procedures and believe that it is appropriate to remove
including disc space preparation, that very few Medicare beneficiaries are CPT codes 63265, 63266, 63267, and
discectomy, osteophytectomy and likely to be good candidates to receive 63268 from the inpatient only list, based
decompression of spinal cord and/or the procedures in the outpatient setting on criterion one; most outpatient
nerve roots; cervical below c2); 22612 because of their complexity. The departments are equipped to provide
(Arthrodesis, posterior or posterolateral commenters further stated that the services to the Medicare population.
technique, single level; lumbar (with removing these procedures from the IPO Therefore, we are finalizing the removal
lateral transverse technique, when list and providing them in the of CPT codes 22633, 22634, 63265,
performed); and 22614 (Arthrodesis, outpatient setting may impact patient 63266, 63267, and 63268, and assigning
posterior or posterolateral technique, safety and outcomes, which they believe the procedures as follows. The APC and
single level; each additional vertebral should be the primary considerations status indicator assignments are
segment) were previously removed from when determining which procedures reflected in Table 48 below.
the IPO list. One commenter specifically can be removed from the IPO list.
pointed out that performance of CPT Response: After reviewing clinical Additional Requests for Changes to the
codes 22612, 22614, and 22551 are all evidence and the public comments, IPO List
allowed in the ASC setting, and that including input from multiple spinal
their safety was reconfirmed in the specialty societies and ASCs we have Comment: CMS received two
review of procedures added to the ASC determined that the services described additional comments recommending the
covered procedures list in the CY 2019 by CPT codes 22633, 22634, 63265, removal of several procedures not
OPPS/ASC final rule (83 FR 59057). 63266, 63267, and 63268 are originally proposed for removal from
In reference to the laminectomy appropriate candidates for removal from the IPO list for CY 2020. These
codes, commenters specifically the IPO list. CMS notes the overall recommended procedures related to
supported their removal from the IPO support and for the reasons cited in the other procedures that were recently
list based on their perceived safe and proposed rule, we believe that it is removed from the IPO. Specifically, the
effective performance in the outpatient appropriate to remove CPT codes 22633 commenters referenced the following
setting, in accordance with criterion 2. and 22634 from IPO list because they anesthesia codes for removal:
Response: We thank the commenters these removed anesthesia codes will be the individual patient’s clinical
for their feedback. After consideration of assigned a status indicator of ‘‘N’’. condition.
the public comments, we agree that the Comment: Finally, we also received a Response: We thank the commenters
recommended anesthesia CPT codes comment from a provider organization for their feedback and will consider this
should be removed from the IPO list, as that suggested that CMS eliminate the feedback for future rulemaking.
they meet criterion 3; the procedure is IPO list. Specifically, the commenter Table 49 contains the final changes
related to codes that we have already argued that the IPO list should to be that we are making to the IPO list for CY
removed from the IPO list. Notably, eliminated to allow patient status to be 2020.
determined by the physician based on BILLING CODE 4120–01–P
ER12NO19.080</GPH>
BILLING CODE 4120–01–C (65 FR 18525). In the CY 2010 OPPS/ Due to continued concerns expressed
X. Nonrecurring Policy Changes ASC final rule with comment period (74 by CAHs and small rural hospitals, we
FR 60575 through 60591), we finalized extended this notice of nonenforcement
A. Changes in the Level of Supervision a technical correction to the title and (‘‘enforcement instruction’’) as an
of Outpatient Therapeutic Services in text of the applicable regulation at 42 interim measure for CY 2011, and
Hospitals and Critical Access Hospitals CFR 410.27 to clarify that this standard expanded it to apply to small rural
(CAHs) applies in critical access hospitals hospitals having 100 or fewer beds (75
In the CY 2018 OPPS/ASC final rule (CAHs) as well as hospitals. In response FR 72007). We continued to consider
with comment period (82 FR 59390 to concerns expressed by the hospital the issue further in our annual OPPS
through 59391) and in the CY 2009 community, in particular CAHs and notice-and-comment rulemaking, and
OPPS/ASC proposed rule and final rule small rural hospitals, that they would implemented an independent review
with comment period (73 FR 41518 have difficulty meeting this standard, on process in 2012 to obtain advice from
through 41519 and 73 FR 68702 through March 15, 2010, we instructed all MACs the HOP Panel on this matter (76 FR
68704, respectively), we clarified that not to evaluate or enforce the 74360 through 74371). Under this
direct supervision is required for supervision requirements for process used since CY 2012, the HOP
hospital outpatient therapeutic services therapeutic services provided to Panel considers and advises CMS
covered and paid by Medicare that are outpatients in CAHs from January 1, regarding stakeholder requests for
furnished in hospitals as well as in 2010 through December 31, 2010, while changes in the required minimum level
provider-based departments (PBDs) of the agency revisited the supervision of supervision of individual hospital
hospitals, as set forth in the CY 2000 policy during the CY 2011 OPPS/ASC outpatient therapeutic services. In
ER12NO19.081</GPH>
OPPS final rule with comment period rulemaking cycle. addition, we extended the enforcement
instruction through CY 2012 and CY therapeutic services for all hospitals and to a provider having to establish a
2013. For the period of CY 2014 through CAHs. The enforcement instructions corrective action plan to address
CY 2017, Congress took legislative and legislative actions that have been in supervision deficiencies, and if the
action (Pub. L. 113–198, Pub. L. 114– place since 2010 have created a two- provider still fails to meet the CoP
112, Pub. L. 114–255, and Pub. L. 115– tiered system of physician supervision requirements, the hospital or CAH can
123) to extend nonenforcement of the requirements for hospital outpatient be terminated from Medicare
direct supervision requirement for therapeutic services for providers in the participation.
hospital outpatient therapeutic services Medicare program, with direct Our experience indicates that
in CAHs and small rural hospitals supervision required for most hospital Medicare providers will provide a
having 100 or fewer beds through outpatient therapeutic services in most similar quality of hospital outpatient
December 31, 2017. Then in the CY hospital providers, but only general therapeutic services, regardless of
2018 OPPS/ASC final rule with supervision required for most hospital whether the minimum level of
comment period (82 FR 59391), we outpatient therapeutic services in CAHs supervision required under the
reinstated the enforcement instruction and small rural hospitals with fewer Medicare program is direct or general.
providing for the nonenforcement of the than 100 beds. We have come to believe that the direct
direct supervision requirement for However, we have not learned of any supervision requirement for hospital
hospital outpatient therapeutic services data or information from CAHs and outpatient therapeutic services places
in CAHs and small rural hospitals small rural hospitals indicating that the an additional burden on providers that
having 100 or fewer beds through quality of outpatient therapeutic reduces their flexibility to provide
December 31, 2019. The current services has been affected by requiring medical care. The issues with increased
enforcement instruction is available on only general supervision for these burden and reduced flexibility to
the CMS website at: https:// services. It is important to remember provide medical care have a more
www.cms.gov/Medicare/Medicare-Fee- that the requirement for general significant impact on CAHs and small
for-Service-Payment/Hospital supervision for outpatient therapeutic rural hospitals due to their recruiting
OutpatientPPS/Downloads/Supervision- services does not preclude these and staffing challenges, as we have
Moratorium-on-Enforcement-for-CAHs- hospitals from providing direct recognized over the years in providing
and-Certain-Small-Rural-Hospitals.pdf. supervision for outpatient therapeutic for nonenforcement of the policy for
As discussed in the CY 2018 OPPS/ services when the physicians these hospitals. Larger hospitals and
ASC final rule with comment period (82 administering the medical procedures hospitals in urban or suburban areas are
FR 59390 through 59391), stakeholders decide that it is appropriate to do so. less affected by the burden and reduced
have consistently requested that CMS Many outpatient therapeutic services flexibility of the direct supervision
continue the nonenforcement of the involve a level of complexity and risk requirement. However, given that the
direct supervision requirement for such that direct supervision would be direct supervision requirement has not
hospital outpatient therapeutic services warranted even though only general yet been enforced for CAHs and small
for CAHs and small rural hospitals supervision is required. rural hospitals, we believe it is time to
having 100 or fewer beds. Stakeholders In addition, CAHs and hospitals in end what is effectively a two-tiered
stated that some small rural hospitals general continue to be subject to system of supervision levels for hospital
and CAHs have insufficient staff conditions of participation (CoPs) that outpatient therapeutic services by
available to furnish direct supervision. complement the general supervision proposing a policy that sets an
The primary reason stakeholders cited requirements for hospital outpatient appropriate and uniformly enforceable
for this request is the difficulty that therapeutic services to ensure that the supervision standard for all hospital
CAHs and small rural hospitals have in medical services Medicare patients outpatient therapeutic services.
recruiting physicians and nonphysician receive are properly supervised. CoPs Therefore, we proposed to change the
practitioners to practice in rural areas. for hospitals require Medicare patients generally applicable minimum required
These stakeholders noted that it is to be under the care of a physician (42 level of supervision for hospital
particularly difficult to furnish direct CFR 482.12(c)(4))), and for the hospital outpatient therapeutic services from
supervision for critical specialty to ‘‘have an organized medical staff that direct supervision to general
services, such as radiation oncology operates under bylaws approved by the supervision for services furnished by all
services, that cannot be directly governing body, and which is hospitals and CAHs. General
supervised by a hospital emergency responsible for the quality of medical supervision, as defined in our regulation
department physician or nonphysician care provided to patients by the at 42 CFR 410.32(b)(3)(i) means that the
practitioner because of the volume of hospital’’ (42 CFR 482.22). The CoPs for procedure is furnished under the
emergency patients or lack of specialty CAHs (42 CFR 485.631(b)(1)(i)) require physician’s overall direction and
expertise. In addition, we are not aware physicians to provide medical direction control, but that the physician’s
of any supervision-related complaints for the CAHs’ health care activities, presence is not required during the
from beneficiaries or providers consultation for, and medical performance of the procedure. This
regarding quality of care for services supervision of the health care staff. The proposal would ensure a standard
furnished during the several years that physicians’ responsibilities in hospitals minimum level of supervision for each
the enforcement instruction has been in and CAHs include supervision of all hospital outpatient therapeutic service
effect. services performed at those facilities. In furnished incident to a physician’s
The upcoming expiration of the latest addition, physicians must also follow service in accordance with the statute.
enforcement instruction providing for State laws regarding scope of practice. We proposed to amend the existing
the nonenforcement of the direct Failure of an applicable physician to regulation at § 410.27(a)(1)(iv) to
supervision requirement for hospital provide adequate supervision in provide that the default minimum level
outpatient therapeutic services for CAHs accordance with the hospital and CAH of supervision for each hospital
and small rural hospitals having 100 or CoPs does not cause payment to be outpatient therapeutic service is
fewer beds has prompted us to consider denied for that individual service. ‘‘general.’’
whether to change the level of However, consistent violations of the We will continue to have the HOP
supervision for hospital outpatient CoP supervision requirements can lead Panel provide advice on the appropriate
supervision levels for hospital safety, health, and quality standards of Comment: Two of the commenters,
outpatient services as described in the outpatient therapeutic services that including MedPAC, strongly encouraged
section I.E.2. of the proposed rule. We beneficiaries receive. CMS to diligently monitor the impacts
will also retain the ability to consider a Response: We appreciate the overall of our proposal on the quality and safety
change to the supervision level of an support for our proposal from a majority of outpatient therapeutic services that
individual hospital outpatient of the commenters. We agree with the Medicare beneficiaries receive to ensure
therapeutic service to a level of commenters that this policy would their quality of care is not compromised
supervision that is more intensive than support our goal of reducing burden on and that beneficiaries do not experience
general supervision through notice and providers, especially CAHs and small higher rates of medical errors. In
comment rulemaking. We solicited rural hospitals. We also appreciate the addition, several commenters wrote in
public comments on this proposal. commenters’ point that this policy will support of the Hospital Outpatient
The comments and our responses to allow these providers to be more Payment Panel (HOP) Panel, which
the comments are set forth below. flexible with their staffing and in turn continues to evaluate and make
Comment: A majority of commenters provide better care to the communities recommendations on supervision levels
supported our proposal to change the they serve. for individual therapeutic outpatient
generally applicable minimum required We also appreciate that the services. These commenters also wrote
level of supervision for hospital commenters noted that providers and in support of CMS’ use of the regulatory
outpatient therapeutic services from physicians have flexibility to require a process to set a higher minimum level
direct supervision to general of supervision for individual
higher level of physician supervision for
supervision when these services are therapeutic services if needed.
any service they render if they believe
furnished by hospitals or CAHs. The Response: We agree with the
a higher level of supervision is required
commenters appreciated that we commenters and will continue to have
to ensure the quality and safety of the
proposed to eliminate what is a system in place to change the default
procedure and to protect a beneficiary
effectively a two-tiered system of minimum level of physician supervision
from complications that might occur.
supervision levels for hospital to a level of supervision higher than
We agree with the commenters that
outpatient therapeutic services between general supervision, which we believe
CoPs, state and federal laws and
CAHs and small rural hospitals and all will be important to the overall success
regulations, and supervision
other hospitals by proposing a policy of this policy. We are also committed to
that would set an appropriate and requirements will also ensure
monitoring care furnished to Medicare
uniformly enforceable supervision beneficiary health and safety when
beneficiaries to determine if there is any
standard for all hospital outpatient receiving outpatient therapeutic
decline in the quality of therapeutic
therapeutic services. The commenters services.
outpatient services provided to
also agreed with our observation that The CoPs for hospitals require a Medicare beneficiaries as a result of this
the quality of outpatient therapeutic doctor of medicine or osteopathy (MD/ policy, although we believe that the
services provided by CAHs and small DO) to be responsible for the care of combination of the CoPs, state and
rural hospitals has not been adversely every Medicare patient with respect to federal laws and regulations, and
affected by the nonenforcement any medical or psychiatric problem that supervision requirements will help
instruction. The majority of commenters is present on admission or develops beneficiaries to receive safe and high-
stated that our proposal would reduce during hospitalization and that is not quality care. We agree with commenters
burden for outpatient hospital specifically within the scope of practice that the work of HOP Panel is helpful
providers, especially those providers in of other types of practitioners (such as to identify individual outpatient
either rural or underserved areas. The dentists, podiatrists, chiropractors, or therapeutic procedures that may require
commenters stated that our proposal clinical psychologists) as that scope of a higher minimum level of physician
would allow CAHs and small rural practice is defined by the medical staff supervision, which can assist us in
hospitals more flexibility to provide and permitted by state law (42 CFR electing whether to establish higher
outpatient therapeutic care for the 482.12(c)(4)). The CoPs also require a minimum supervision levels on case-by-
Medicare beneficiaries that they serve hospital to ‘‘have an organized medical case basis through notice and comment
than what CAHs and small rural staff that operates under bylaws rulemaking.
hospitals could provide when the approved by the governing body, and Comment: A few commenters were
temporary nonenforcement instruction which is responsible for the quality of entirely opposed to our proposal to
for direct supervision was in effect, medical care provided to patients by the change the default level of supervision
because a permanent, rather than hospital’’ (42 CFR 482.22). The CoPs for from direct to general and either
temporary policy, would allow them to CAHs (42 CFR 485.631(b)(1)(i)) require requested that no changes be made to
better make long-range staffing and an MD or DO to provide medical our current policy (which requires the
budgetary plans. direction for the CAHs’ health care default minimum level of physician
Numerous commenters mentioned the activities, and consultation for, and supervision for outpatient therapeutic
many safeguards noted in our proposal, medical supervision of, the health care services to be direct supervision unless
including our ongoing policy that gives staff. The responsibilities of an MD or we establish a different minimum level
providers discretion to require the DO in hospitals and CAHs include of supervision) or requested that CMS
appropriate amount of supervision to supervision of all services performed at evaluate outpatient therapeutic services
ensure a therapeutic outpatient those facilities. In addition, MDs and individually to determine if the default
procedure is performed without risking DOs must also follow state laws minimum level of supervision should
a beneficiary’s safety or the quality of regarding scope of practice. State scope change from direct supervision to
the care a beneficiary receives. of practice laws are state-level general supervision.
Commenters also noted that outpatient regulations that apply to physicians and Several of these commenters
hospital and CAH CoPs and state and other health care practitioners that appreciated the concerns from CAHs
federal laws and regulations are present determine the tasks they can perform and small rural providers about the
in addition to the requirements for when caring for patients in healthcare burden they face from the physician
physician supervision to ensure the settings in that state. supervision requirements, but these
commenters believed those concerns supervised without risking presence is not required during the
were outweighed by the need to have beneficiaries’ safety or the quality of the performance of the procedure.
qualified physicians directly supervise care beneficiaries receive, whether the With general supervision, our
services, especially in the fields of default level of physician supervision is proposal would ensure a standard
radiation therapy, hyperbaric oxygen direct supervision or general minimum level of supervision for each
treatment, and wound care. These supervision. hospital outpatient therapeutic service
commenters believed the default level of We reiterate a key point that the furnished incident to a physician’s
supervision for outpatient therapeutic commenters who are in support of our service in accordance with the statute.
services should be the same for all proposal mentioned, which is that General supervision ensures patient
outpatient hospitals and CAHs. establishing general supervision as the safety as it requires a physician to
Other commenters expressed default level of physician supervision provide overall direction and control for
concerns that allowing general for outpatient therapeutic services does outpatient hospital therapeutic
supervision to be the minimum default not prevent a hospital or CAH from procedures, which means the medical
level of supervision for certain types of requiring a higher level of supervision personnel performing the procedure are
services, including radiation therapy, for a particular service if they believe being monitored and receiving guidance
hyperbaric oxygen treatment, and such a supervision level is necessary. from a qualified physician even if the
wound care, could put the health and Providers and physicians have physician is not physically present.
safety of Medicare beneficiaries flexibility to require a higher level of Also, a provider may voluntarily choose
receiving these procedures at risk. These physician supervision for any service to require a higher level of involvement
commenters described these particular they furnish if they believe a higher in the medical procedure by the
services as requiring a high level of skill level of supervision is required to physician if the hospital believes it is
to perform and having complications ensure the quality and safety of the necessary for the safety of the patient
that, while rare, can cause serious issues procedure and to protect a beneficiary receiving the procedure.
for a beneficiary’s health. Therefore, from complications that might occur. Additionally, we solicited public
these commenters believed that the We believe this flexibility for individual comments on whether specific types of
minimum default level of supervision providers to have a higher level of services, such as chemotherapy
for radiation therapy, hyperbaric oxygen physician supervision for a given administration or radiation therapy,
treatment, and wound care should be service, which has always been present should be excepted from our proposal to
direct supervision. in our supervision policies, should change the generally applicable
Response: We agree with the address the concerns of those minimum required level of supervision
commenters about the importance of commenters who believe general for hospital outpatient therapeutic
ensuring the quality of outpatient supervision is not sufficient for certain services from direct supervision to
therapeutic services and the health and outpatient therapeutic services. In general supervision for services
safety of the beneficiaries who receive addition, CoP, other federal and state furnished by all hospitals and CAHs.
those services. We also appreciate the regulations, and state standards for Comment: Multiple commenters
concerns several commenters raised scope of work for medical personnel are supported our proposal to have general
about how this proposal will affect the not affected by this policy, and remain supervision be the minimum default
quality and safety of outpatient in place to ensure that hospitals provide level of supervision for outpatient
therapeutic services including radiation proper medical care to all of their hospital therapeutic chemotherapy and
therapy, hyperbaric oxygen treatments, patients including Medicare radiation therapy services. One
and wound care services. We believe beneficiaries. commenter supported this policy
our supervision requirements continue Comment: Two commenters wanted because they were concerned that if
to provide the safeguards Medicare confirmation that our proposed policy direct supervision was required to be
beneficiaries need to ensure they receive was intended to be permanent and not the default minimum level of physician
quality care when they receive just for CY 2020. supervision for chemotherapy and
outpatient hospital therapeutic services Response: This policy will take effect radiation therapy while all other
and that health and safety of beginning in CY 2020 and will remain outpatient hospital therapeutic services
beneficiaries is protected. in place through subsequent years have a default minimum level of general
Providers have the flexibility to unless modified in future notice and supervision, it would be difficult to
establish what they believe is the comment rulemaking. change the minimum default level of
appropriate level of physician Comment: One commenter wanted supervision for chemotherapy and
supervision for these procedures, which more clarification on what constitutes radiation therapy to general supervision
may well be higher than the general supervision. The commenter in the future. Another commenter
requirements for general supervision. In does not support Medicare requirements wanted to know under what
addition, providers must adhere to the for physician supervision that do not circumstances the minimum default
hospital and CAH conditions of help with patient safety. supervision level for chemotherapy and
participation, federal and state Response: Our policies on radiation therapy would be direct
regulations for radiation therapy, supervision, along with hospital physician supervision if the current
hyperbaric oxygen treatments, and conditions of participation, state scope policy has established general
wound care services, and state of practice laws, and other state and supervision as the minimum default
standards for scope of practice for federal laws and regulations, all help level of supervision.
medical personnel who provide these ensure the quality and safety of Response: We appreciate the feedback
services. We believe that the outpatient hospital therapeutic services we received from commenters on this
combination of providers’ desire to Medicare beneficiaries receive. General topic. Regarding the question from the
ensure the safety of their patients and supervision is defined in our regulation one commenter about how the default
the regulations governing these at 42 CFR 410.32(b)(3)(i) to mean that minimum level of supervision for
procedures discussed by the the procedure is furnished under the chemotherapy and radiation services
commenters should ensure that these physician’s overall direction and could be direct supervision when the
procedures will be appropriately control, but that the physician’s default minimum level of supervision is
general supervision for other outpatient under Medicare Part A, regardless of the care on an inpatient basis. The
therapeutic services, we note that hour that the beneficiary came to the exceptions for procedures on the IPO
because we are finalizing our proposal hospital or whether the beneficiary used list and for ‘‘rare and unusual’’
to require general supervision for all a bed. With respect to services circumstances designated by CMS as
outpatient therapeutic services, the designated under the OPPS as IPO national exceptions were unchanged by
required supervision level is the same procedures, we explained that because the CY 2016 OPPS/ASC final rule with
for all of these services, including of the intrinsic risks, recovery impacts, comment period.
chemotherapy and radiation therapy or complexities associated with such As we stated in the CY 2016 OPPS/
services. services, these procedures would ASC final rule with comment period,
After reviewing all of the public continue to be appropriate for inpatient the decision to formally admit a patient
comments, we are finalizing our hospital admission and payment under to the hospital is subject to medical
proposal for CY 2020 and subsequent Medicare Part A regardless of the review. For instance, for cases where the
years to change the generally applicable expected length of stay. We also medical record does not support a
minimum required level of supervision indicated that there might be further reasonable expectation of the need for
for hospital outpatient therapeutic ‘‘rare and unusual’’ exceptions to the hospital care crossing at least 2
services from direct supervision to application of the benchmark, which midnights, and for inpatient admissions
general supervision for services would be detailed in subregulatory not related to a surgical procedure
furnished by all hospitals and CAHs guidance. specified by Medicare as an IPO
without modification. We also note all procedure under 42 CFR 419.22(n) or for
2. Current Policy for Medical Review of which there was not a national
of the policy safeguards that have been Inpatient Hospital Admissions Under
in place to ensure the safety, health, and exception, payment of the claim under
Medicare Part A Medicare Part A is subject to the clinical
quality standards of the outpatient
therapeutic services that beneficiaries In the CY 2016 OPPS/ASC final rule judgment of the medical reviewer. The
receive will continue to be in place with comment period (80 FR 70538 medical reviewer’s clinical judgment
under our new policy. These safeguards through 70549), we revised the previous involves the synthesis of all submitted
include allowing providers and rare and unusual exceptions policy and medical record information (for
physicians the discretion to require a finalized a proposal to allow for case-by- example, progress notes, diagnostic
higher level of supervision to ensure a case exceptions to the 2-midnight findings, medications, nursing notes,
therapeutic outpatient procedure is benchmark, whereby Medicare Part A and other supporting documentation) to
performed without risking a payment may be made for inpatient make a medical review determination
beneficiary’s safety or their quality of admissions where the admitting on whether the clinical requirements in
the care, as well as the presence physician does not expect the patient to the relevant policy have been met. In
outpatient hospital and CAH CoPs, and require hospital care spanning 2 addition, Medicare review contractors
other state and federal laws and midnights, if the documentation in the must abide by CMS’ policies in
regulations. We are also finalizing the medical record supports the physician’s conducting payment determinations,
accompanying changes we proposed to determination that the patient but are permitted to take into account
the regulatory text at § 410.27 with nonetheless requires inpatient hospital evidence-based guidelines or
several technical changes. care. commercial utilization tools that may
We note that, in the CY 2016 OPPS/ aid such a decision. While Medicare
B. Short Inpatient Hospital Stays ASC final rule with comment period, we review contractors may continue to use
1. Background on the 2-Midnight Rule reiterated our position that the 2- commercial screening tools to help
midnight benchmark provides clear evaluate the inpatient admission
In the FY 2014 IPPS/LTCH PPS final guidance on when a hospital inpatient decision for purposes of payment under
rule (78 FR 50913 through 50954), we admission is appropriate for Medicare Medicare Part A, such tools are not
clarified our policy regarding when an Part A payment, while respecting the binding on the hospital, CMS, or its
inpatient admission is considered role of physician judgment. We stated review contractors. This type of
reasonable and necessary for purposes that the following criteria will be information also may be appropriately
of Medicare Part A payment. Under this relevant to determining whether an considered by the physician as part of
policy, we established a benchmark inpatient admission with an expected the complex medical judgment that
providing that surgical procedures, length of stay of less than 2 midnights guides their decision to keep a
diagnostic tests, and other treatments is nonetheless appropriate for Medicare beneficiary in the hospital and
would be generally considered Part A payment: formulation of the expected length of
appropriate for inpatient hospital • Complex medical factors such as stay.
admission and payment under Medicare history and comorbidities; 3. Change for Medical Review of Certain
Part A when the physician expects the • The severity of signs and Inpatient Hospital Admissions Under
patient to require a stay that crosses at symptoms; Medicare Part A for CY 2020 and
least 2 midnights and admits the patient • Current medical needs; and
to the hospital based upon that • The risk of an adverse event. Subsequent Years
expectation. Conversely, when a In other words, for purposes of As stated earlier in this section, the
beneficiary enters a hospital for a Medicare payment, an inpatient procedures on the IPO list of procedures
surgical procedure not designated as an admission is payable under Part A if the under the OPPS are not subject to the 2-
inpatient-only (IPO) procedure as documentation in the medical record midnight benchmark for purposes of
described in 42 CFR 419.22(n), a supports either the admitting inpatient hospital payment. However,
diagnostic test, or any other treatment, physician’s reasonable expectation that the 2-midnight benchmark is applicable
and the physician expects to keep the the patient will require hospital care once procedures have been removed
beneficiary in the hospital for only a spanning at least 2 midnights, or the from the IPO list. Procedures that are
limited period of time that does not physician’s determination based on removed from the IPO list are also
cross 2 midnights, the services would be factors such as those identified above subject to initial medical reviews of
generally inappropriate for payment that the patient nonetheless requires claims for short-stay inpatient
admissions conducted by Beneficiary exemption from referrals to RACs, RAC system-wide implementation. Some
and Family-Centered Care Quality patient status review, and claims commenters also requested that CMS
Improvement Organizations (BFCC– denials would be sufficient to allow maintain consistency with the policy
QIOs). providers time to update their billing finalized when total knee arthroplasty
BFCC–QIOs may also refer providers systems and gain experience with (TKA) was removed from the IPO list
to the Recovery Audit Contractors respect to newly removed procedures and limit RAC review for ‘‘patient
(RACs) for further medical review due eligible to be paid under either the IPPS status’’ for a period of 2 years.
to exhibiting persistent noncompliance or the OPPS, while avoiding potential Response: We appreciate the
with Medicare payment policies, adverse site-of-service determinations. stakeholders’ feedback regarding the
including, but not limited to: Nonetheless, we solicited public appropriate period of time for this
• Having high denial rates; comments regarding the appropriate exemption. After considering the
• Consistently failing to adhere to the period of time for this proposed options recommended by commenters,
2-midnight rule; or exemption. Specifically, we stated that we have decided to modify our proposal
• Failing to improve their commenters may indicate whether and and exempt procedures that are
performance after QIO educational why they believe the proposed 1-year removed from the IPO list from site-of-
intervention. period is appropriate, or whether they service claim denials under Medicare
As part of our continued effort to believe a longer or shorter exemption Part A, eligibility for BFCC–QIO
facilitate compliance with our payment period would be more appropriate. referrals to RACs for noncompliance
policy for inpatient admissions, we In summary, for CY 2020 and with the 2-midnight rule, and RAC
proposed to establish a 1-year subsequent years, we proposed to reviews for ‘‘patient status’’ (that is, site-
exemption from certain medical review establish a 1-year exemption from site- of-service) for a period of 2 years
activities for procedures removed from of-service claim denials, BFCC–QIO beginning in CY 2020. We agree with
the IPO list under the OPPS in CY 2020 referrals to RACs, and RAC reviews for the majority of commenters who stated
and subsequent years. Specifically, we ‘‘patient status’’ (that is, site-of-service) a two-year exemption period from
proposed that procedures that have been for procedures that are removed from certain medical review activities for
removed from the IPO list would not be the IPO list under the OPPS beginning procedures removed from the IPO list
eligible for referral to RACs for on January 1, 2020. We encourage would be more beneficial to the
noncompliance with the 2-midnight BFCC–QIOs to review these cases for provider community than a 1-year
rule within the first calendar year of medical necessity in order to educate exemption, as such a time period will be
their removal from the IPO list. These themselves and the provider community sufficient to help hospitals and
procedures would not be considered by on appropriate documentation for Part clinicians to become used to the
the BFCC–QIOs in determining whether A payment when the admitting availability of payment under both the
a provider exhibits persistent physician determines that it is hospital inpatient and outpatient setting
noncompliance with the 2-midnight medically reasonable and necessary to for procedures newly removed from the
rule for purposes of referral to the RAC conduct these procedures on an IPO. Further, we were persuaded by the
nor would these procedures be reviewed inpatient basis. We note that we will comments explaining that a 2-year
by RACs for ‘‘patient status.’’ During monitor changes in site-of-service to exemption period of exemption will
this 1-year period, BFCC–QIOs would determine whether changes may be allow providers time to gather
have the opportunity to review such necessary to certain CMS Innovation information on procedures newly
claims in order to provide education for Center models. removed from the IPO list to help
practitioners and providers regarding Comment: Numerous stakeholders inform education and guidance for the
compliance with the 2-midnight rule, including medical professional broader provider community, develop
but claims identified as noncompliant societies, health systems, hospital patient selection criteria to identify
would not be denied with respect to the associations, and individuals supported which patients are, and are not,
site-of-service under Medicare Part A. the proposal of a 1-year exemption from appropriate candidates for outpatient
Again, information gathered by the site-of-service claim denials under procedures and to develop related
BFCC–QIO when reviewing procedures Medicare Part A, eligibility for BFCC– policy protocols. We also believe that an
that are newly removed from the IPO QIO referrals to RACs for extended exemption period will further
list could be used for educational noncompliance with the 2-midnight facilitate compliance with our payment
purposes and would not result in a rule, and RAC reviews for ‘‘patient policy for inpatient admissions.
claim denial during the proposed 1-year status’’ (that is, site-of-service) for We believe that a 2-year exemption
exemption period. procedures that are removed from the time period is adequate to let providers
In the proposed rule, we stated that IPO list under the OPPS beginning on gain experience with the application of
we believed that a 1-year exemption January 1, 2020. However, many of the 2-midnight rule to these procedures.
from BFCC–QIO referral to RACs and these commenters supported an We also believe that a 2-year exemption
RAC ‘‘patient status’’ review of the extension of the exemption policy past of the medical review activities
setting for procedures removed from the 1 year, with a majority of commenters discussed above for procedures removed
IPO list under the OPPS and performed recommending a period of 2 years, some from the IPO list will be sufficient time
in the inpatient setting would be an commenters recommending three years for providers and BFCC–QIOs to
adequate amount of time to allow or more, and others recommending that understand the documentation
providers to gain experience with CMS permanently restrict RAC reviews necessary to support Part A payment for
application of the 2-midnight rule to of patient status for procedures removed those patients for which the admitting
these procedures and the from the IPO list in deference to physician determines that the
documentation necessary for Part A physicians’ clinical judgment. The procedures should be furnished in an
payment for those patients for which the commenters stated that a longer period inpatient setting. At this time, we do not
admitting physician determines that the of time is necessary for providers to believe it is necessary to exempt
procedures should be furnished in an adjust patterns of practice for procedures that have been removed
inpatient setting. Furthermore, we procedures that have been removed from the IPO list from the medical
stated our belief that this 1-year from the IPO list and to prepare for review activities discussed above for a
period of longer than 2 years. With service. BFCC–QIOs will continue to be policies we developed to address
regard to comments recommending that permitted and expected to deny claims increases in the volume of covered
we permanently restrict RAC reviews of if the service itself is determined not to outpatient department (OPD) services.
‘‘patient status’’ in deference to be reasonable and medically necessary. Below we discuss the specific policy we
physicians’ clinical judgment, we BFCC–QIOs will not make referrals to finalized in the CY 2019 OPPS/ASC
believe that it is necessary to allow RACs for noncompliance with the 2- final rule with comment period and its
BFCC–QIOs to resume referring midnight rule for procedures that are application under the OPPS for CY
providers to the RACs for further removed from the IPO list within the 2020.
medical review due to exhibiting first two years of their removal, RACs For the CY 2019 OPPS, using our
persistent noncompliance with will not conduct reviews for ‘‘patient authority under section 1833(t)(2)(F) of
Medicare payment policies after the status’’ (that is, site-of-service) for the Act to adopt a method to control
two-year exemption period. procedures that are removed from the unnecessary increases in the volume of
Comment: Some commenters also IPO list within the first two years of covered outpatient department services,
requested clarifications regarding the their removal, and claims with we applied an amount equal to the site-
proposed policy with regard to BFCC– procedures that are removed from the specific Medicare Physician Fee
QIO reviews. One commenter IPO list that are identified as Schedule (PFS) payment rate for
questioned if the proposed 1-year noncompliant with the 2-midnight rule nonexcepted items and services
exemption from certain medical review will not be denied with respect to the furnished by a nonexcepted off-campus
activities applied to BFCC–QIO referrals site-of-service under Medicare Part A PBD (the PFS payment rate) for the
to RACs for review of patient status only within the first 2 years of their removal clinic visit service, as described by
or if it also applied to BFCC–QIO review beginning on January 1, 2020. HCPCS code G0463, when provided at
of medical necessity for surgery itself. After considering comments received, an off-campus PBD excepted from
Other commenters suggested that in the we are finalizing our policy as proposed section 1833(t)(21) of the Act
first year after a service is removed from with one modification to the time (departments that bill the modifier ‘‘PO’’
the IPO list, the procedure should be period of the exemption. That is, for CY on claim lines). However, we phased in
exempt from both BFCC–QIO medical 2020 and subsequent years, we are the application of the reduction in
review and RAC review. finalizing a policy to exempt procedures payment for the clinic visit service
Response: For clarification, as stated that have been removed from the IPO described by HCPCS code G0463 in the
in the CY 2020 OPPS/ASC proposed list from eligibility for referral to RACs excepted provider-based department
rule (84 FR 39527), this proposal does for noncompliance with the 2-midnight setting over 2 years. For CY 2019, the
not exempt procedures that are removed rule within the 2-calendar years payment reduction was transitioned by
from the IPO list from the initial following their removal from the IPO applying 50 percent of the total
medical reviews of claims for short-stay list. These procedures will not be reduction in payment that was applied
inpatient admissions conducted by considered by the BFCC–QIOs in if these departments were paid the site-
BFCC–QIOs. The proposal was intended determining whether a provider exhibits specific PFS rate for the clinic visit
to exempt procedures that are removed persistent noncompliance with the 2- service. The PFS-equivalent rate was 40
from the IPO list from eligibility for midnight rule for purposes of referral to percent of the OPPS payment for CY
BFCC–QIO referrals to RACs for the RAC nor will these procedures be 2019 (that is, 60 percent less than the
noncompliance with the 2-midnight reviewed by RACs for ‘‘patient status.’’ OPPS rate). We provided for a 2-year
rule, and RAC reviews for ‘‘patient During this 2-year period, BFCC–QIOs phase-in of this policy under which
status’’ (that is, site-of-service) for will have the opportunity to review one-half of the total 60-percent payment
procedures that are removed from the such claims in order to provide reduction (a 30-percent reduction) was
IPO list under the OPPS beginning on education for practitioners and applied in CY 2019. These departments
January 1, 2020. We also stated in the providers regarding compliance with are paid approximately 70 percent of the
CY 2020 OPPS/ASC proposed rule that the 2-midnight rule, but claims OPPS rate (100 percent of the OPPS rate
we encourage BFCC–QIOs to review identified as noncompliant will not be minus the 30-percent payment
these cases for medical necessity in denied with respect to the site-of-service reduction that is applied in CY 2019) for
order to educate themselves and the under Medicare Part A. the clinic visit service in CY 2019.
provider community on appropriate For CY 2020, the second year of the
documentation for Part A payment C. Method To Control Unnecessary 2-year phase-in, we stated that we
when the admitting physician Increases in the Volume of Clinic Visit would apply the total reduction in
determines that it is medically Services Furnished in Excepted Off- payment that is applied if these
reasonable and necessary to conduct Campus Provider-Based Departments departments (departments that bill the
these procedures on an inpatient basis (PBDs) modifier ‘‘PO’’ on claims lines) are paid
(84 FR 39528). In the CY 2019 OPPS/ASC final rule the site-specific PFS rate for the clinic
Also, as stated in the CY 2016 OPPS/ with comment period (83 FR 59004 visit service described by HCPCS code
ASC final rule with comment period (80 through 59014), we adopted a method to G0463. The PFS-equivalent rate for CY
FR 70545), section 1154(a)(1) of the Act control unnecessary increases in the 2020 is 40 percent of the proposed
authorizes BFCC–QIOs to review volume of the clinic visit service OPPS payment (that is, 60 percent less
whether services and items billed under furnished in excepted off-campus than the proposed OPPS rate) for CY
Medicare are reasonable and medically provider-based departments (PBDs) by 2020. Under this policy, adopted in
necessary and whether services that are removing the payment differential that 2019, departments would be paid
provided on an inpatient basis could be drives the site-of-service decision and, approximately 40 percent of the OPPS
appropriately and effectively provided as a result, unnecessarily increases rate (100 percent of the OPPS rate minus
on an outpatient basis. Accordingly, service volume. We refer readers to the the 60-percent payment reduction that
BFCC–QIOs will continue to conduct CY 2019 OPPS/ASC final rule with is applied in CY 2020) for the clinic
initial medical reviews for both the comment period for a detailed visit service in CY 2020.
medical necessity of the services, and discussion of the background, legislative In addition, as we stated in the CY
the medical necessity of the site-of- provisions, and the changes in payment 2019 OPPS/ASC final rule with
comment period (83 FR 59013), for CY Response: We appreciate the cost) physician offices to (higher cost)
2020, this policy will be implemented commenters’ support. As we stated in HOPDs’.’’ (83 FR 59006).
in a non-budget neutral manner. The the CY 2019 OPPS/ASC final rule with Section 1833(t)(9)(A) of the Act, titled
estimated payment impact of this policy comment period (83 FR 59005), we ‘‘Periodic review,’’ provides, in part,
was displayed in Column 5 of Table 44– continue to share the commenters’ that the Secretary must annually review
Estimated Impact of the Proposed CY concern that the current payment and revise the groups, the relative
2020 Changes for the Hospital incentives, rather than patient acuity or payment weights, and the wage and
Outpatient Prospective Payment System medical necessity, are affecting site-of- other adjustments described in
in the CY 2020 OPPS/ASC proposed service decision-making. We continue to paragraph (2) to take into account
rule. In order to effectively establish a believe that these shifts in the sites of changes in medical practice, changes in
method for controlling the unnecessary service are unnecessary if the technology, the addition of new
growth in the volume of clinic visits beneficiary can safely receive the same services, new cost data, and other
furnished by excepted off-campus PBDs services in a lower cost setting but relevant information and factors’’
that does not simply increase other (emphasis added). Section 1833(t)(9)(B)
instead receives care in a higher cost
expenditures that are unnecessary of the Act, titled ‘‘Budget neutrality
setting due to payment incentives. We
within the OPPS and drive different adjustment’’ provides that if ‘‘the
remain concerned that this shift in care
service-distorting decisions, we believe Secretary makes adjustments under
setting increases beneficiary cost- subparagraph (A), then the adjustments
that this method must be adopted in a sharing liability because Medicare
non-budget neutral manner. The impact for a year may not cause the estimated
payment rates for the same or similar amount of expenditures under this part
associated with this policy is further services are generally higher in hospital
described in section XXVI. of this rule. for the year to increase or decrease from
outpatient departments than in the estimated amount of expenditures
The comments and our responses to physician offices.
the comments are set forth below. under this part that would have been
Comment: Numerous commenters, We appreciate the comments made if the adjustments had not been
including organizations representing supporting the implementation of this made’’ (emphasis added).
policy in a non-budget neutral manner. However, section 1833(t)(2)(F) of the
health insurance plans, physician
As we stated in the CY 2019 OPPS ASC Act is not an ‘‘adjustment’’ under
associations, specialty medical
final rule with comment period (83 FR paragraph (2). Unlike the wage
associations and individual Medicare
59013), we believe implementing a adjustment under section 1833(t)(2)(D)
beneficiaries, supported moving forward
volume control method in a budget of the Act and the outlier, transitional
with the phase-in of this proposal. Some pass-through, and equitable adjustments
of these commenters commended CMS neutral manner would not appropriately
reduce the overall unnecessary volume under section 1833(t)(2)(E) of the Act,
for completing the two-year phase-in section 1833(t)(2)(F) of the Act refers to
‘‘since it increases the sustainability of of covered OPD services, and instead
would simply shift services within the a ‘‘method’’ for controlling unnecessary
the Medicare program and reduces costs increases in the volume of covered OPD
for Medicare patients.’’ Commenters OPPS system because of payment rather
than medical necessity. We also services, not an adjustment. Likewise,
expressed that the alignment of payment sections 1833(t)(2)(D) and (E) of the Act
between the outpatient and physician outlined in the CY 2019 OPPS/ASC
final rule with comment period (83 FR also explicitly require the adjustments
office setting ‘‘is an important and authorized by those paragraphs to be
necessary reform that can help reduce 59013) that while section 1833(t)(9)(B)
budget neutral, while the volume
provider consolidation and thereby of the Act requires that certain changes
control method authority at section
provide beneficiaries with more care made under the OPPS be made in a
1833(t)(2)(F) of the Act does not.
options at a lower cost.’’ Commenters budget neutral manner, this section does
Therefore, the volume control method
continued to be supportive of the not apply to the volume control method
proposed under section 1833(t)(2)(F) of
immediate impact this policy would under section 1833(t)(2)(F) of the Act.
the Act is not one of the adjustments
have in lowering Medicare beneficiaries’ As we detailed in the CY 2019 OPPS/ under section 1833(t)(2) of the Act that
out-of-pocket costs. ASC final rule with comment period (83 is referenced under section 1833(t)(9)(A)
With respect to the policy being FR 59005), ‘‘total spending under the of the Act that must be included in the
applied in a non-budget neutral manner, OPPS is projected to further increase by budget neutrality adjustment under
one commenter expressed support for more than $5 billion from section 1833(t)(9)(B) of the Act.
the policy and stated that ‘‘the Agency approximately $70 billion in CY 2018 Moreover, section 1833(t)(9)(C) of the
correctly recognized that it cannot through CY 2019 to nearly $75 billion. Act specifies that, if the Secretary
address the payment disparity between This is approximately twice the total determines under methodologies
the outpatient hospital and physician estimated spending in CY 2008, a described in paragraph (2)(F) that the
office settings as long as it applies decade ago.’’ And as for one of the volume of services paid for under this
payment changes within the OPPS in a drivers of this volume increase, the subsection increased beyond amounts
budget-neutral manner that effectively ‘‘Medicare Payment Advisory established through those
‘traps’ the potential savings from the Commission (MedPAC) found that, from methodologies, the Secretary may
change within the OPPS.’’ 2011 through 2016, combined program appropriately adjust the update to the
Several commenters suggested that spending and beneficiary cost-sharing conversion factor otherwise applicable
CMS ‘‘explore additional opportunities on services covered under the OPPS in a subsequent year. We continue to
to expand site neutral payments for all increased by 51 percent, from $39.8 interpret this provision to mean that the
clinically appropriate outpatient billion to $60.0 billion, an average of 8.6 Secretary will have implemented a
services’’ beyond the clinic visit service. percent per year. In its 2018 report, volume control method under section
They expressed that site neutral MedPAC also noted that ‘A large source 1833(t)(2)(F) of the Act in a nonbudget
payment policies can create incentives of growth in spending on services neutral manner in the year in which the
for providers to make decisions that furnished in hospital outpatient method is implemented, and that the
lower the cost of care for beneficiaries departments (HOPDs) appears to be the Secretary may then make further
and the Medicare program. result of the shift of services from (lower adjustments to the conversion factor in
a subsequent year to account for volume for any access to care issues and may Many commenters believed that the
increases that are beyond the amounts revisit this policy in future rulemaking. final rule should reflect the recent
estimated by the Secretary under the Comment: One commenter, a large decision from the United States District
volume control method. medical association, stated that while it Court for the District of Columbia,
As detailed later in this section, after generally supported site neutral American Hospital Association, et al. v.
consideration of public comments, we payments, it did not ‘‘believe that it is Azar, No. 1:18–cv–02841–RMC (D.D.C.
are continuing the second year of the possible to sustain a high-quality health Sept. 17, 2019), and that CMS, at a
two-year phase-in as adopted in CY care system if site neutrality is defined minimum, should maintain the 2019
2019 rulemaking. We will continue to as shrinking all payments to the lowest payments and not complete the second
take information submitted by the amount paid in any setting.’’ The year of the phase-in. Others believed the
commenters into consideration for commenter went on to state that ‘‘any litigation mandated that CMS revert
future analysis. savings from site neutrality proposals back to the higher payment rates.
Comment: MedPAC supported the derived from OPPS should be reinvested Commenters noted that the advisory
proposal to adjust the OPPS payment in improvements elsewhere in Part B, Panel on Hospital Outpatient Payment
rate for clinic visits that are provided in including payments to physicians as unanimously recommended that CMS
excepted off-campus PBDs so that it is inflation is not a factor in annual freeze the payment policy for clinic
the same as the payment rate for clinic physician payment updates and this visits furnished by excepted off-campus
visits provided in nonexcepted off- contributes to the payment differential.’’ PBDs at CY 2019 rates and evaluate
campus PBDs. They note that this policy The commenter went on to underscore whether beneficiary access has been
would be consistent with past its position that ‘‘CMS should not compromised and whether the volume
Commission recommendations for site- implement site neutrality in a way that of outpatient services has decreased.
neutral payments between HOPDs and reduces payment to the lowest common Many commenters argued that there are
freestanding physician offices, although denominator and should reinvest several factors in the Medicare program
the recommendations it put forth in savings from lowering facility payments (and outside of hospital control) that
2012 and 2014 would have applied to to other Part B services, including could influence more services moving to
several services that met certain criteria payments under the physician fee the hospital outpatient setting,
and would have adjusted payment so schedule.’’ including the hospital readmissions
Response: We thank the commenter reduction program, hospital value-based
that it equaled the total payment had the
for its input. As we stated in the CY purchasing, and the 2-midnight rule.
services been furnished in a
2019 OPPS/ASC final rule with Commenters reiterated their comments
freestanding office and did not
comment period (83 FR 59005), to the from the CY 2019 OPPS/ASC final rule
distinguish between on- and off-campus
extent that similar services can be safely with comment period (83 FR 59005)
services. MedPAC further noted that it
provided in more than one setting, we that, relative to patients seen in
shares CMS’ concerns about the rate of do not believe it is prudent for the
growth in volume and spending under physician offices, patients seen in
Medicare program to pay more for these HOPDs:
the OPPS. MedPAC also stated, perhaps services in one setting than another. We
inadvertently, that ‘‘CMS proposes to • Have more severe chronic
believe the increase in the volume of conditions;
implement this policy in a budget- clinic visits, in particular, is due to the
neutral manner.’’ • Have higher prior utilization of
payment incentive that exists to provide hospitals and EDs;
Response: We thank MedPAC for its
comments and support of this policy. To
this service in the higher cost setting. • Are more likely to live in low-
Because these services could likely be income areas;
clarify, this policy has been phased-in safely provided in a lower cost setting, • Are 1.8 times more likely to be
in a non-budget neutral manner. we believe that the growth in clinic dually eligible for Medicare and
Comment: Some commenters were visits paid under the OPPS is Medicaid;
concerned about the impact this unnecessary. Further, we believe that • Are 1.4 times more likely to be
payment change might have on rural setting the OPPS payment at the PFS- nonwhite;
providers and safety net health systems. equivalent rate would be an effective • Are 1.6 times more likely to be
Commenters suggested that CMS method to control the volume of these under age 65 and disabled; and
consider policy modifications to reduce unnecessary services because the • Are 1.1 times more likely to be over
the impact of the payment reduction. payment differential that is driving the 85 years old.
They said this could be accomplished site-of-service decision will be removed. Many commenters, including
by ‘‘providing the OPPS rate to We note that the overall amount of numerous state hospital associations,
outpatient departments located in Medicare payments to physicians and stated that making additional cuts to
federally designated Health Professional other entities made under the PFS is outpatient payment of the magnitude of
Shortage Areas or Medically determined by the PFS statute, and the the second year of phase-in of the clinic
Underserved Areas.’’ Some commenters rates for individual services are visit policy would be excessive and
also suggested that CMS monitor for any determined based on the resources harmful. They expressed concern that
potential access to care issues in rural involved in furnishing these services the cuts could endanger the critical role
and underserved areas. relative to other services paid under the that HOPDs play in their communities.
Response: We share the commenters’ PFS. To the extent the commenter Response: We continue to believe that
concerns about access to care, especially believes that the PFS rate for a section 1833(t)(2)(F) of the Act grants
in rural areas where access issues may particular service is misvalued relative the Secretary the authority to develop a
be more pronounced than in other areas to other PFS services, we encourage the method for controlling unnecessary
of the country. While we understand the commenter to nominate the service for increases in the volume of covered OPD
concerns regarding rural hospitals, we review as a potentially misvalued services, including a method that
believe that implementing with a phase- service under the PFS. controls unnecessary volume increases
in has helped to mitigate the immediate Comment: We received numerous by removing a payment differential that
impact rural hospitals might otherwise comments urging CMS not to move is driving a site-of-service decision, and
face. We will continue to monitor trends forward with the phase-in of this policy. as a result, is unnecessarily increasing
service volume.78 We also continue to The government has appeal rights, and Some suggested that CMS must ‘‘make
believe shifts in the sites of service is still evaluating the rulings and whole with interest’’ affected PBDs.
described in CY 2019 OPPS/ASC final considering, at the time of this writing, Others recommended that CMS ‘‘make a
rule with comment period (83 FR whether to appeal from the final lump sum payment to the facilities that
59013), are inherently unnecessary if judgment. were subject to the 2019 payment cut’’
the beneficiary can safely receive the With respect to the HOP panel, and requested that ‘‘no additional
same services in a lower cost setting but section 1833(t)(9)(A) of the Act provides copayment be required from patients’’
instead receives care in a higher cost that the Secretary shall consult with the should CMS apply a retroactive remedy.
setting due to the payment incentives Panel on policies affecting the clinical One commenter suggested that ‘‘CMS
created by the difference in payment integrity of the ambulatory payment provide as a remedy a lump sum
amounts. While we did receive some classifications and their associated payment to hospitals for the difference
data illustrating that certain HOPDs weights under the OPPS. The Panel met that would have been paid had the rule
serve unique patient populations and on August 19, 2019, and recommended not been implemented.’’ Some
provide services to medically complex that CMS freeze the payment policy for commenters stated that ‘‘the remedy
beneficiaries, we continue to believe off-campus clinic visits at the calendar should be completed at a hospital
that this data has not demonstrated the year 2019 rates and evaluate whether specific level, on a claim by claim
need for higher payment for clinic visits beneficiary access has been basis,’’ so as to ensure hospitals are
furnished in excepted off-campus PBDs. compromised and whether the volume adequately paid for clinic visits.
As we asserted in the 2019 OPPS/ASC of outpatient services has decreased; the Several commenters wrote in urging
final rule with comment period (83 FR panel further recommended that CMS CMS to restore the higher payment rates
59013), the fact that the commenters did report its findings back to the Panel for (which they believed would be
not supply new or additional data review. We believe, for reasons outlined consistent with the district court
supporting these assertions suggests that in the CY 2019 OPPS/ASC final rule decision), promptly repay hospitals for
the payment differential is likely the with comment period (83 FR 59013) and the 2019 payment cuts, and abandon the
main driver for unnecessary volume in this final rule that in order to second phase of the payment cut for
increases in outpatient department appropriately control unnecessary 2020. Many noted that should the
services, particularly clinic visits. increases in the volume of clinic visits agency move forward with the second
On September 17, 2019, the United services furnished in HOPDs, we must phase of the cut, it would cause
States District Court for the District of move forward with phasing-in this additional harm to many hospitals, and
Columbia (the district court) entered an policy. Freezing the payment rate, even they intended to continue pursuing
order vacating the portion of the CY at the 2019 rate, still ‘‘traps’’ the legal remedies.
2019 OPPS/ASC final rule with unnecessary spending within the OPPS. Another commenter suggested that
comment period that adopted the The HOP Panel’s recommendations, while the court remanded to CMS the
volume control method for clinic visit along with public comments on issue of remediation of cuts that
services furnished by nonexcepted off- provisions of the proposed rule, have occurred since January 1, 2019, they
campus PBDs and remanded the matter been taken into consideration in the believe ‘‘at a minimum, the final rule
to the Secretary for further proceedings development of this final rule with should reflect the court decision and
consistent with the district court’s comment period. While we are not address the 30 percent cut implemented
opinion.79 On September 23, 2019, the accepting the HOP Panel’s for calendar year 2019 and ensure the
Department of Health and Human recommendation, we will continue to cuts are not finalized for 2020.’’
Services (HHS) filed a motion monitor and study the utilization of Response: We thank the commenters
requesting that the district court modify outpatient services as recommended by for their suggestions.
the Panel. As noted above, on September 23,
its order to remand the matter without
Comment: Many commenters 2019, HHS filed a motion requesting
vacatur or, alternatively, to stay the
referenced the ongoing litigation that the district court modify its order
portion of the order vacating the rule for
(described earlier in this section) in to remand the matter without vacatur or
60 days from the date of the order to
which the district court found that CMS alternatively, to stay the portion of the
allow the Solicitor General time to
exceeded its statutory authority by order vacating the rule for 60 days from
determine whether to authorize appeal.
reducing payments for clinic visit the date of the order to allow the
On October 21, 2019, the district court
services furnished in excepted off- Solicitor General time to determine
denied our motion to modify and
campus PBDs as a method to control whether to authorize appeal. This
request for stay, affirmed that the
what we believe are unnecessary motion was denied on October 21, 2019.
portion of the 2019 final rule that
increases in the volume of those As we stated above, the government has
adopted the volume control method for
services. Several comments suggested appeal rights and is still evaluating the
clinic visits furnished by excepted off-
that the continued implementation of rulings and considering, at the time of
campus PBDs is vacated, and entered
this policy should be suspended until this writing, whether to appeal from the
final judgment. We acknowledge that
the ongoing litigation is adjudicated. final judgment. For CY 2020, CMS will
the district court vacated the volume
They stated that ‘‘CMS should not take be going forward with the phase-in. We
control policy for CY 2019 and we are
in further reductions in the clinic respectfully disagree with the district
working to ensure affected 2019 claims
payments for off-campus PBDs in CY court and continue to believe the
for clinic visits are paid consistent with
2020 or future years until the matter is Secretary has the authority to address
the court’s order. We do not believe it
resolved.’’ unnecessary increases in the volume of
is appropriate at this time to make a Commenters also submitted outpatient services. CMS is still
change to the second year of the two- suggestions on how CMS might remedy considering how we would remedy
year phase-in of the clinic visit policy. payments following the district court’s hospitals if we either do not appeal this
78 Available at: https://www.ssa.gov/OP_Home/
order vacating the portion of the CY ruling or do not succeed on appeal if
ssact/title18/1833.htm. 2019 OPPS/ASC final rule with one is so authorized.
79 American Hospital Ass’n, et al. v. Azar, No. comment period that adopted the Comment: One commenter suggested
1:18-cv-02841–RMC (D.D.C. Sept. 17, 2019). volume control method for clinic visits. that even with the recent court decision
CMS should ‘‘explore regulatory XI. CY 2020 OPPS Payment Status and • ‘‘NC’’—New code for the next
pathways to address site of service Comment Indicators calendar year or existing code with
payment differentials in a budget substantial revision to its code
A. CY 2020 OPPS Payment Status
neutral manner.’’ Commenters gave the descriptor in the next calendar year, as
Indicator Definitions
example of ‘‘prospectively chang[ing] compared to current calendar year for
the manner in which hospitals allocate Payment status indicators (SIs) that which we requested comments in the
costs to outpatient cost centers in we assign to HCPCS codes and APCs proposed rule, final APC assignment;
institutional cost reports, particularly serve an important role in determining comments will not be accepted on the
for cost centers where similar services payment for services under the OPPS. final APC assignment for the new code.
can be provided in physician offices They indicate whether a service • ‘‘NI’’—New code for the next
which have no comparable overhead represented by a HCPCS code is payable calendar year or existing code with
costs.’’ Another commenter expressed under the OPPS or another payment substantial revision to its code
system, and also, whether particular descriptor in the next calendar year, as
that ‘‘[p]atients should not be penalized
OPPS policies apply to the code. compared to current calendar year,
and pay higher prices simply because a For CY 2020, we did not propose to interim APC assignment; comments will
hospital owns the medical practice make any changes to the definitions of be accepted on the interim APC
where they receive care.’’ The status indicators that were listed in assignment for the new code.
commenter encouraged CMS to ‘‘pursue Addendum D1 to the CY 2019 OPPS/ • ‘‘NP’’—New code for the next
a staunch defense of this proposal ASC final rule with comment period calendar year or existing code with
including, but not limited to, the appeal available on the CMS website at: https:// substantial revision to its code
of recent court rulings that undermine www.cms.gov/Medicare/Medicare-Fee- descriptor in the next calendar year, as
these changes.’’ The commenter went on for-Service-Payment/Hospital compared to current calendar year,
to say that CMS should ‘‘take the OutpatientPPS/Hospital-Outpatient- proposed APC assignment; comments
necessary steps to protect its authority Regulations-and-Notices-Items/CMS- will be accepted on the proposed APC
to implement the second year of the 1717-P.html?DLPage=1&DLEntries= assignment for the new code.
two-year phase-in while the Agency 10&10DLSort=2DLSortDir=descending. The definitions of the OPPS comment
takes an appeal to the D.C. Circuit.’’ We did not receive any public indicators for CY 2020 are listed in
Response: We thank the commenters comments on the proposed 2020 Addendum D2 to this final rule with
for their submissions and support of this definitions of the OPPS status comment period, which is available on
policy. After consideration of public indicators. We believe that the existing the CMS website at: https://
comments we received, we will be definitions of the OPPS status indicators www.cms.gov/Medicare/Medicare-Fee-
completing the phase-in of the will continue to be appropriate for CY for-Service-Payment/Hospital
application of the reduction in payment 2020. Therefore, we are finalizing our OutpatientPPS/index.html.
for HCPCS code G0463. Specifically, for proposed policy without modifications. We did not receive any public
CY 2020, we will apply the full amount The complete list of the payment comments on the proposed use of
of the reduction in payment that is status indicators and their definitions comment indicators for CY 2020. We
applied if these departments that apply for CY 2020 is displayed in believe that the CY 2019 definitions of
(departments that bill the modifier ‘‘PO’’ Addendum D1 to this final rule with the OPPS comment indicators continue
on claims lines) are paid the site- comment period, which is available on to be appropriate for CY 2020.
specific PFS rate for the clinic visit the CMS website at: https:// Therefore, we are continuing to use
service described by HCPCS code www.cms.gov/Medicare/Medicare-Fee- those definitions without modification
G0463. The PFS-equivalent rate for CY for-Service-Payment/Hospital for CY 2020.
2020 is 40 percent of the proposed OutpatientPPS/index.html.
The CY 2020 payment status indicator XII. MedPAC Recommendations
OPPS payment (that is, 60 percent less The Medicare Payment Advisory
assignments for APCs and HCPCS codes
than the proposed OPPS rate). Under Commission (MedPAC) was established
are shown in Addendum A and
this policy, departments will be paid under section 1805 of the Act in large
Addendum B, respectively, to this final
approximately 40 percent of the OPPS part to advise the U.S. Congress on
rule with comment period, which are
rate (100 percent of the OPPS rate minus issues affecting the Medicare program.
available on the CMS website at: https://
the 60-percent payment reduction that As required under the statute, MedPAC
www.cms.gov/Medicare/Medicare-Fee-
is applied in CY 2020) for the clinic submits reports to the Congress no later
for-Service-Payment/Hospital
visit service in CY 2020. Considering OutpatientPPS/index.html. than March and June of each year that
the effects of estimated changes in present its Medicare payment policy
enrollment, utilization, and case-mix, B. CY 2020 Comment Indicator recommendations. The March report
this policy results in an estimated CY Definitions typically provides discussion of
2020 savings of approximately $800 In the proposed rule, we proposed to Medicare payment policy across
million, with approximately $640 use four comment indicators for the CY different payment systems and the June
million of the savings accruing to 2020 OPPS. These comment indicators, report typically discusses selected
Medicare, and approximately $160 ‘‘CH’’, ‘‘NC’’, ‘‘NI’’, and ‘‘NP’’, are in Medicare issues. We are including this
million saved by Medicare beneficiaries effect for CY 2019 and we proposed to section to make stakeholders aware of
in the form of reduced copayments, continue their use in CY 2020. The CY certain MedPAC recommendations for
when compared to if the policy were not 2020 OPPS comment indicators are as the OPPS and ASC payment systems as
applied. We will continue to monitor follows: discussed in its March 2019 report.
the effect of this change in Medicare • ‘‘CH’’—Active HCPCS code in
payment policy, including the volume current and next calendar year, status A. OPPS Payment Rates Update
of these types of OPD services. We also indicator and/or APC assignment has The March 2019 MedPAC ‘‘Report to
will continue to evaluate this policy in changed; or active HCPCS code that will the Congress: Medicare Payment
light of the litigation and judicial be discontinued at the end of the Policy,’’ recommended that Congress
decision as they may arise. current calendar year. update Medicare OPPS payment rates
by 2 percent, with the difference basket index does not accurately reflect the CY 2020 OPPS/ASC proposed rule
between this and the update amount the cost of providing services in the and are not finalizing any cost reporting
specified in current law to be used to ASC setting. requirements for ASCs in this final rule.
increase payments in a new suggested Response: We believe providing ASCs The full March 2019 MedPAC Report
Medicare quality program, the ‘‘Hospital with the same rate update mechanism as to Congress can be downloaded from
Value Incentive Program (HVIP).’’ We hospitals could encourage the migration MedPAC’s website at: http://
refer readers to the March 2019 report of appropriate services from the hospital www.medpac.gov.
for a complete discussion on these setting to the ASC setting and increase
XIII. Updates to the Ambulatory
recommendations, which is available for the presence of ASCs in health care
Surgical Center (ASC) Payment System
download at www.medpac.gov. We markets or geographic areas where
appreciate MedPAC’s recommendations, previously there were none or few, thus A. Background
but as MedPAC acknowledged in its promoting better beneficiary access to
1. Legislative History, Statutory
March 2019 report, Congress would care. As published in the FY 2020 IPPS/
Authority, and Prior Rulemaking for the
need to change current law to enable us LTCH PPS final rule (84 FR 42343),
ASC Payment System
to implement its recommendations. based on IGI’s 2019 second quarter
MedPAC did not comment on the forecast with historical data through the For a detailed discussion of the
proposed OPPS payment rate update. first quarter of 2019, the hospital market legislative history and statutory
Comments received from MedPAC for basket update is 3.0 percent, and the authority related to payments to ASCs
other OPPS policies are discussed in the MFP adjustment is 0.4 percentage point. under Medicare, we refer readers to the
applicable sections of this rule. Therefore, for this CY 2020 OPPS/ASC CY 2012 OPPS/ASC final rule with
final rule with comment period we are comment period (76 FR 74377 through
B. ASC Conversion Factor Update finalizing the application of a 2.6 74378) and the June 12, 1998 proposed
In the March 2019 MedPAC ‘‘Report percent MFP-adjusted hospital market rule (63 FR 32291 through 32292). For
to the Congress: Medicare Payment basket update factor to the CY 2019 ASC a discussion of prior rulemaking on the
Policy’’, MedPAC found that, based on conversion factor for ASCs meeting the ASC payment system, we refer readers
its analysis of indicators of payment quality reporting requirements to to the CYs 2012, 2013, 2014, 2015, 2016,
adequacy, the number of Medicare- determine the CY 2020 ASC payment 2017, 2018 and 2019 OPPS/ASC final
certified ASCs had increased, amounts, as discussed at section XXVI rules with comment period (76 FR
beneficiaries’ use of ASCs had of this final rule with comment period. 74378 through 74379; 77 FR 68434
increased, and ASC access to capital has through 68467; 78 FR 75064 through
been adequate.80 As a result, for CY C. ASC Cost Data 75090; 79 FR 66915 through 66940; 80
2020, MedPAC stated that payments to In the March 2019 MedPAC ‘‘Report FR 70474 through 70502; 81 FR 79732
ASCs are adequate and recommended to the Congress on Medicare Payment through 79753; 82 FR 59401 through
that no payment update should be given Policy’’, MedPAC recommended that 59424; and 83 FR 59028 through 59080,
for 2020 (that is, the update factor Congress require ASCs to report cost respectively).
would be 0 percent). data to enable the Commission to
2. Policies Governing Changes to the
In the CY 2019 OPPS/ASC final rule examine the growth of ASCs’ costs over
Lists of Codes and Payment Rates for
with comment period (83 FR 59079), we time and analyze Medicare payments
ASC Covered Surgical Procedures and
adopted a policy, which we codified at relative to the costs of efficient
Covered Ancillary Services
42 CFR 416.171(a)(2), to apply the providers, and that CMS could use ASC
hospital market basket update to ASC cost data to examine whether an Under 42 CFR 416.2 and 42 CFR
payment system rates for an interim existing Medicare price index is an 416.166 of the Medicare regulations,
period of 5 years. We refer readers to the appropriate proxy for ASC costs or an subject to certain exclusions, covered
CY 2019 OPPS/ASC final rule with ASC specific market basket should be surgical procedures in an ASC are
comment period for complete details developed. Further, MedPAC suggested surgical procedures that are separately
regarding our policy to use the hospital that CMS could limit the scope of the paid under the OPPS, that would not be
market basket update for the ASC cost reporting system to minimize expected to pose a significant risk to
payment system. Therefore, consistent administrative burden on ASCs and the beneficiary safety when performed in an
with our policy for the ASC payment program.81 ASC, and for which standard medical
system, in the CY 2020 OPPS/ASC Comment: MedPAC reiterated their practice dictates that the beneficiary
proposed rule, we proposed to apply a previous comments in their March 2019 would not typically be expected to
2.7 percent MFP-adjusted hospital report and requested that CMS use require active medical monitoring and
market basket update factor to the CY available authority to act quickly in care at midnight following the
2019 ASC conversion factor for ASCs gathering ASC cost data to inform ASC procedure (‘‘overnight stay’’). We
meeting the quality reporting input costs and determine whether an adopted this standard for defining
requirements to determine the CY 2020 existing Medicare price index is an which surgical procedures are covered
ASC payment amounts. appropriate proxy for ASC costs or under the ASC payment system as an
Comment: MedPAC reiterated their whether an ASC-specific market basket indicator of the complexity of the
previous comments in their March 2019 index should be developed. procedure and its appropriateness for
report; specifically, that they do not Additionally, MedPAC asserts there is Medicare payment in ASCs. We use this
support using the hospital market basket sufficient evidence that ASCs are standard only for purposes of evaluating
index as an interim method for updating capable of submitting cost data to CMS. procedures to determine whether or not
the ASC conversion factor because Response: We did not propose any they are appropriate to be furnished to
evidence indicates the hospital market cost reporting requirements for ASCs in Medicare beneficiaries in ASCs.
Historically, we have defined surgical
80 Medicare Payment Advisory Committee. March 81 Medicare Payment Advisory Committee. March
procedures as those described by
2019 Report to the Congress. Chapter 5: Ambulatory 2019 Report to the Congress. Chapter 5: Ambulatory
surgical center services. Available at: http:// surgical center services. Available at: http://
Category I CPT codes in the surgical
www.medpac.gov/docs/default-source/reports/ www.medpac.gov/docs/default-source/reports/ range from 10000 through 69999 as well
mar19_medpac_ch5_sec.pdf?sfvrsn=0. mar19_medpac_ch5_sec.pdf?sfvrsn=0. as those Category III CPT codes and
Level II HCPCS codes that directly are recognized on Medicare claims) via similar to procedures in the CPT
crosswalk or are clinically similar to these ASC quarterly update CRs. We surgical range that we have determined
procedures in the CPT surgical range recognize the release of new and revised do not pose a significant safety risk,
that we have determined do not pose a Category III CPT codes in the July and would not expect to require an
significant safety risk, that we would January CRs. These updates implement overnight stay when performed in an
not expect to require an overnight stay newly created and revised Level II ASC, and that are separately paid under
when performed in ASCs, and that are HCPCS and Category III CPT codes for the OPPS (72 FR 42478).
separately paid under the OPPS (72 FR ASC payments and update the payment As we noted in the August 7, 2007
42478). rates for separately paid drugs and final rule that implemented the revised
In the August 2, 2007 final rule (72 FR biologicals based on the most recently ASC payment system, using this
42495), we also established our policy submitted ASP data. New and revised definition of surgery would exclude
to make separate ASC payments for the Category I CPT codes, except vaccine from ASC payment certain invasive,
following ancillary items and services codes, are released only once a year, and ‘‘surgery-like’’ procedures, such as
when they are provided integral to ASC are implemented only through the cardiac catheterization or certain
covered surgical procedures: (1) January quarterly CR update. New and radiation treatment services that are
Brachytherapy sources; (2) certain revised Category I CPT vaccine codes assigned codes outside the CPT surgical
implantable items that have pass- are released twice a year and are range (72 FR 42477). We stated in that
through payment status under the implemented through the January and final rule that we believed continuing to
OPPS; (3) certain items and services that July quarterly CR updates. We refer rely on the CPT definition of surgery is
we designate as contractor-priced, readers to Table 41 in the CY 2012 administratively straightforward, is
including, but not limited to, OPPS/ASC proposed rule for an logically related to the categorization of
procurement of corneal tissue; (4) example of how this process, is used to services by physician experts who both
certain drugs and biologicals for which update HCPCS and CPT codes, which establish the codes and perform the
separate payment is allowed under the we finalized in the CY 2012 OPPS/ASC procedures, and is consistent with a
OPPS; and (5) certain radiology services final rule with comment period (76 FR policy to allow ASC payment for all
for which separate payment is allowed 42291; 76 FR 74380 through 74384). outpatient surgical procedures (72 FR
under the OPPS. In the CY 2015 OPPS/ In our annual updates to the ASC list 42477).
ASC final rule with comment period (79 of, and payment rates for, covered However, in the CY 2019 OPPS/ASC
FR 66932 through 66934), we expanded surgical procedures and covered final rule with comment period (83 FR
the scope of ASC covered ancillary ancillary services, we undertake a 59029 through 59030), after
services to include certain diagnostic review of excluded surgical procedures consideration of public comments
tests within the medicine range of (including all procedures newly received in response to the CY 2019
Current Procedural Terminology (CPT) proposed for removal from the OPPS OPPS/ASC proposed rule and earlier
codes for which separate payment is inpatient list), new codes, and codes OPPS/ASC rulemaking cycles, we
allowed under the OPPS when they are with revised descriptors, to identify any revised our definition of a surgical
provided integral to an ASC covered that we believe meet the criteria for procedure under the ASC payment
surgical procedure. Covered ancillary designation as ASC covered surgical system. We now define a surgical
services are specified in § 416.164(b) procedures or covered ancillary procedure under the ASC payment
and, as stated previously, are eligible for services. Updating the lists of ASC system as any procedure described
separate ASC payment. Payment for covered surgical procedures and within the range of Category I CPT
ancillary items and services that are not covered ancillary services, as well as codes that the CPT Editorial Panel of the
paid separately under the ASC payment their payment rates, in association with AMA defines as ‘‘surgery’’ (CPT codes
system is packaged into the ASC the annual OPPS rulemaking cycle is 10000 through 69999) (72 FR 42476), as
payment for the covered surgical particularly important because the well as procedures that are described by
procedure. OPPS relative payment weights and, in Level II HCPCS codes or by Category I
We update the lists of, and payment some cases, payment rates, are used as CPT codes or by Category III CPT codes
rates for, covered surgical procedures the basis for the payment of many that directly crosswalk or are clinically
and covered ancillary services in ASCs covered surgical procedures and similar to procedures in the CPT
in conjunction with the annual covered ancillary services under the surgical range that we have determined
proposed and final rulemaking process revised ASC payment system. This joint are not expected to pose a significant
to update the OPPS and the ASC update process ensures that the ASC risk to beneficiary safety when
payment system (§ 416.173; 72 FR updates occur in a regular, predictable, performed in an ASC, for which
42535). We base ASC payment and and timely manner. standard medical practice dictates that
policies for most covered surgical the beneficiary would not typically be
procedures, drugs, biologicals, and 3. Definition of ASC Covered Surgical
Procedures expected to require an overnight stay
certain other covered ancillary services following the procedure, and are
on the OPPS payment policies, and we Since the implementation of the ASC separately paid under the OPPS.
use quarterly change requests (CRs) to prospective payment system, we have The comments and our responses to
update services covered under the historically defined a ‘‘surgical’’ the comments are set forth below.
OPPS. We also provide quarterly update procedure under the payment system as Comment: Commenters supported our
CRs for ASC covered surgical any procedure described within the revised definition and recommended
procedures and covered ancillary range of Category I CPT codes that the that we modify our definition of an ASC
services throughout the year (January, CPT Editorial Panel of the AMA defines covered surgical procedure for CY 2020
April, July, and October). We release as ‘‘surgery’’ (CPT codes 10000 through and subsequent years.
new and revised Level II HCPCS codes 69999) (72 FR 42478). We also have Response: We thank the commenters
and recognize the release of new and included as ‘‘surgical,’’ procedures that for their support. In review of the public
revised CPT codes by the American are described by Level II HCPCS codes comments we received, we realized that
Medical Association (AMA) and make or by Category III CPT codes that our modified definition of an ASC
these codes effective (that is, the codes directly crosswalk or are clinically covered surgical procedure was initially
finalized in the CY 2019 OPPS/ASC technologies, services, and procedures; following publication of the CY 2019
final rule with comment period (83 FR and OPPS/ASC final rule with comment
59029 through 59030) but that we only • Level II HCPCS codes (also known period. In the CY 2019 OPPS/ASC
referenced CY 2019 and did not as alphanumeric codes), which are used proposed rule, we stated that we will
reference subsequent years. While we primarily to identify drugs, devices, finalize the treatment of these codes
did not specifically propose to continue supplies, temporary procedures, and under the ASC payment system in this
our modified definition of surgery for services not described by CPT codes. CY 2020 OPPS/ASC final rule with
CY 2020 in the CY 2020 OPPS/ASC We finalized a policy in the August 2, comment period.
proposed rule, we did not propose to 2007 final rule (72 FR 42535) to evaluate
each year all new HCPCS codes that 2. April 2019 HCPCS Codes for Which
remove any procedures from the ASC
describe surgical procedures, and to We Solicited Public Comments in the
list of covered surgical procedures that
make preliminary determinations Proposed Rule
we had added as a result of our
modified definition of a surgical during the annual OPPS/ASC For the April 2019 update, there were
procedure, and, therefore, we intended rulemaking process regarding whether no new CPT codes, however, there were
to continue our modified definition. For or not they meet the criteria for payment several new Level II HCPCS codes. In
this final rule with comment period, in the ASC setting as covered surgical the April 2019 ASC quarterly update
after consideration of the public procedures and, if so, whether or not (Transmittal 4263, CR 11232, dated
comments we are adopting a policy to they are office-based procedures. In March 22, 2019), we added eight new
continue to apply the modified addition, we identify new and revised Level II HCPCS codes to the list of
definition of a surgical procedure for CY codes as ASC covered ancillary services covered ancillary services. Table 25 of
2020, which was finalized for CY 2019 based upon the final payment policies the CY 2020 OPPS/ASC proposed rule
in our CY 2019 OPPS/ASC final rule of the revised ASC payment system. In displayed the new Level II HCPCS codes
with comment period (83 FR 59029 prior rulemakings, we refer to this that were implemented on April 1,
through 59030). We intend to address process as recognizing new codes. 2019, along with their proposed
subsequent calendar years in future However, this process has always
payment indicators for CY 2020.
rulemaking. involved the recognition of new and
revised codes. We consider revised We invited public comments on the
B. ASC Treatment of New and Revised codes to be new when they have proposed payment indicators and
Codes substantial revision to their code payment rates for the new HCPCS codes
descriptors that necessitate a change in that were recognized as ASC ancillary
1. Background on Current Process for services in April 2019 through the
Recognizing New and Revised HCPCS the current ASC payment indicator. To
clarify, we refer to these codes as new quarterly update CRs, as listed in Table
Codes 25 of the CY 2020 OPPS/ASC proposed
and revised in this CY 2020 OPPS/ASC
Payment for ASC items and services final rule with comment period. rule. We proposed to finalize their
are generally based on medical billing We have separated our discussion payment indicators in the CY 2020
codes, specifically, HCPCS codes, that below based on when the codes are OPPS/ASC final rule with comment
are reported on ASC claims. The HCPCS released and whether we solicited period.
is divided into two principal public comments in the proposed rule We did not receive any public
subsystems, referred to as Level I and (and respond to those comments in this comments on the proposed ASC
Level II of the HCPCS. Level I is CY 2020 OPPS/ASC final rule with payment indicator assignments for the
comprised of CPT codes, a numeric and comment period) or whether we are new Level II HCPCS codes implemented
alphanumeric coding system soliciting public comments in this CY in April 2019. Therefore, we are
maintained by the AMA, and includes 2020 OPPS/ASC final rule with finalizing the proposed ASC payment
Category I, II, and III CPT codes. Level comment period (and will respond to indicator assignments for these codes, as
II of the HCPCS, which is maintained by those comments in the CY 2021 OPPS/ indicated in Table 50 below. We note
CMS, is a standardized coding system ASC final rule with comment period). that several of the temporary drug
that is used primarily to identify We note that we sought public HCPCS C-codes have been replaced
products, supplies, and services not comments in the CY 2019 OPPS/ASC with permanent drug HCPCS J-codes,
included in the CPT codes. Together, final rule with comment period (83 FR effective January 1, 2020. Their
Level I and II HCPCS codes are used to 59034 through 59035) on the new and replacement codes are also listed in
report procedures, services, items, and revised Level II HCPCS codes effective Table 50. The final payment rates for
supplies under the ASC payment October 1, 2018 or January 1, 2019. these codes can be found in Addendum
system. Specifically, we recognize the These new and revised codes were BB to this final rule with comment
following codes on ASC claims: flagged with comment indicator ‘‘NI’’ in period (which is available via the
• Category I CPT codes, which Addenda AA and BB to the CY 2019 internet on the CMS website). In
describe surgical procedures, diagnostic OPPS/ASC final rule with comment addition, the status indicator meanings
and therapeutic services, and vaccine period to indicate that we were can be found in Addendum DD1 to this
codes; assigning them an interim payment final rule with comment period (which
• Category III CPT codes, which status and payment rate, if applicable, is available via the internet on the CMS
describe new and emerging which were subject to public comment website).
3. July 2019 HCPCS Codes for Which 1, 2019. This code was listed in Table 2019. Therefore, we are finalizing the
We Solicited Public Comments in the 27 of the CY 2020 OPPS/ASC proposed proposed ASC payment indicator
Proposed Rule rule, along with the proposed comment assignments for these codes, as
In the July 2019 ASC quarterly update indicator and payment indicator. indicated in Table 51 and 52 below. We
(Transmittal 4076, Change Request We invited public comments on these note that several of the HCPCS C-codes
10788, dated June 14, 2019), we added proposed payment indicators for the have been replaced with HCPCS J-codes,
several separately payable Category III new Category III CPT code and Level II effective January 1, 2020. Their
CPT and Level II HCPCS codes to the HCPCS codes newly recognized as ASC replacement codes are listed in Table
list of covered surgical procedures and covered surgical procedures or covered 51. The final payment rates for these
ancillary services. Table 26 of the CY ancillary services in July 2019 through codes can be found in Addendum AA
2020 OPPS/ASC proposed rule the quarterly update CRs, as listed in and BB to this final rule with comment
displayed the new HCPCS codes that Tables 25, 26, and 27 of the proposed period (which is available via the
were effective July 1, 2019. rule. internet on the CMS website). In
In addition, through the July 2019 We did not receive any other public addition, the status indicator meanings
quarterly update CR, we also comments on the proposed ASC can be found in Addendum DD1 to this
implemented an ASC payment for one payment indicator assignments for the final rule with comment period (which
new Category III CPT code as an ASC new Category III CPT codes or Level II is available via the internet on the CMS
covered ancillary service, effective July HCPCS codes implemented in July website).
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4. October 2019 HCPCS Codes for the CY 2020 OPPS/ASC final rule with For the CY 2020 OPPS update, we
Which We Are Soliciting Public comment period to the new Level II received the CPT codes that will be
Comments in This CY 2020 OPPS/ASC HCPCS codes that will be effective effective January 1, 2020 from AMA in
Final Rule With Comment Period January 1, 2020 to indicate that we are time to be included in the proposed
In the past, we released new and assigning them an interim payment rule. The new, revised, and deleted CPT
revised HCPCS codes that are effective indicator, which is subject to public codes were listed in Addendum AA and
October 1 through the October OPPS comment. We are inviting public Addendum BB to the CY 2020 OPPS/
quarterly update CRs and incorporated comments in the CY 2020 OPPS/ASC ASC proposed rule. We note that the
these new codes in the final rule with final rule with comment period on the new and revised CPT codes were
comment period. payment indicator assignments, which assigned to comment indicator ‘‘NP’’ in
In the CY 2020 OPPS/ASC proposed would then be finalized in the CY 2021 Addendum AA and Addendum BB of
rule (84 FR 39534), for CY 2020, OPPS/ASC final rule with comment the CY 2020 OPPS/ASC proposed rule
consistent with our established policy, period. to indicate that the code is new for the
we proposed that the Level II HCPCS next calendar year or the code is an
b. CPT Codes for Which We Solicited
codes that will be effective October 1, existing code with substantial revision
Public Comments in the Proposed Rule
2019 would be flagged with comment to its code descriptor in the next
indicator ‘‘NI’’ in Addendum BB to the In the CY 2015 OPPS/ASC final rule calendar year as compared to current
CY 2020 OPPS/ASC final rule with with comment period (79 FR 66841 calendar year with a proposed ASC
through 66844), we finalized a revised payment assignment, and that
comment period to indicate that we
process of assigning APC and status comments would be accepted on the
have assigned the codes an interim ASC
indicators for new and revised Category proposed ASC payment indicator.
payment indicator for CY 2020. We did
I and III CPT codes that would be Further, we note that the CPT code
not receive any public comments on our
effective January 1. Specifically, for the descriptors that appeared in Addendum
proposal. As we stated that we would
new/revised CPT codes that we receive AA and BB were short descriptors and
do in the CY 2020 OPPS/ASC proposed
in a timely manner from the AMA’s CPT did not accurately describe the complete
rule, we are inviting public comments
Editorial Panel, we finalized our procedure, service, or item described by
in this CY 2020 OPPS/ASC final rule
proposal to include the codes that the CPT code. Therefore, we included
with comment period on the interim
would be effective January 1 in the the 5-digit placeholder codes and the
ASC payment indicator for these codes OPPS/ASC proposed rules, along with long descriptors for the new and revised
that we intend to finalize in the CY 2021 proposed APC and status indicator CY 2020 CPT codes in Addendum O to
OPPS/ASC final rule with comment assignments for them, and to finalize the the proposed rule so that the public
period. APC and status indicator assignments in could adequately comment on the
5. January 2020 HCPCS Codes the OPPS/ASC final rules beginning proposed ASC payment indicator
with the CY 2016 OPPS update. For assignments. The 5-digit placeholder
a. New Level II HCPCS Codes for Which
those new/revised CPT codes that were codes were listed in Addendum O,
We Are Soliciting Public Comments in
received too late for inclusion in the specifically under the column labeled
the CY 2020 OPPS/ASC Final Rule With
OPPS/ASC proposed rule, we finalized ‘‘CY 2020 OPPS/ASC Proposed Rule 5-
Comment Period
our proposal to establish and use Digit AMA Placeholder Code’’. The final
Consistent with past practice, we are HCPCS G-codes that mirror the CPT code numbers are included in this
soliciting comment on the new Level II predecessor CPT codes and retain the CY 2020 OPPS/ASC final rule with
HCPCS codes that are effective January current APC and status indicator comment period, and can be found in
1, 2020 in the CY 2020 OPPS/ASC final assignments for a year until we can Addendum AA, Addendum BB, and
rule with comment period, thereby propose APC and status indicator Addendum O.
updating the ASC payment system for assignments in the following year’s For new and revised CPT codes
the calendar year. These codes are rulemaking cycle. We note that even if effective January 1, 2020 that were
released to the public via the CMS we find that we need to create HCPCS received in time to be included in the
HCPCS website, and also through the G-codes in place of certain CPT codes CY 2020 OPPS/ASC proposed rule, we
January OPPS quarterly update CRs. We for the PFS proposed rule, we do not proposed the appropriate payment
note that unlike the CPT codes that are anticipate that these HCPCS G-codes indicator assignments, and solicited
effective January 1 and are included in will always be necessary for OPPS public comments on the payment
the OPPS/ASC proposed rules, and purposes. We will make every effort to assignments. We stated we would
except for the G-codes listed in include proposed APC and status accept comments and finalize the
Addendum O to the CY 2020 OPPS/ASC indicator assignments for all new and payment indicators in this CY 2020
proposed rule, most Level II HCPCS revised CPT codes that the AMA makes OPPS/ASC final rule with comment
codes are not released until November publicly available in time for us to period. We note that we received
to be effective January 1. Because these include them in the proposed rule, and comments on the ASC payment
codes are not available until November, to avoid the resort to HCPCS G-codes indicator for certain new CPT codes that
we are unable to include them in the and the resulting delay in utilization of will be effective January 1, 2020. These
OPPS/ASC proposed rules. Therefore, the most current CPT codes. Also, we comments, and our responses, can be
these Level II HCPCS codes will be finalized our proposal to make interim found in section XIII.C.1.a.(2). of this
released to the public through the CY APC and status indicator assignments final rule with comment period.
2020 OPPS/ASC final rule with for CPT codes that are not available in Also, we note that we inadvertently
comment period, January 2020 ASC time for the proposed rule and that omitted new CPT and new HCPCS
Update CR, and the CMS HCPCS describe wholly new services (such as codes effective January 1, 2020 from
website. new technologies or new surgical Table 32 (Proposed Additions to the List
In addition, for CY 2020, we proposed procedures), solicit public comments, of ASC Covered Surgical Procedures for
to continue our established policy of and finalize the specific APC and status CY 2020) of the CY 2020 OPPS/ASC
assigning comment indicator ‘‘NI’’ in indicator assignments for those codes in proposed rule (84 FR 39544), however,
Addendum AA and Addendum BB to the following year’s final rule. we included these 12 procedures in
Addendum AA to the proposed rule. Finally, shown in Table 28 of the CY CRs, seeking public comments, and
The procedures described by the 12 new 2020 OPPS/ASC proposed rule (84 FR finalizing the treatment of these new
CPT and HCPCS codes are displayed in 39565) and reprinted in Table 53 below, codes under the ASC.
Table 53 of this CY 2020 OPPS/ASC we summarize our process for updating
final rule with comment period. codes through our ASC quarterly update
C. Update to the List of ASC Covered classification (72 FR 42512). The Consistent with our final policy to
Surgical Procedures and Covered procedures that were added to the ASC annually review and update the ASC
Ancillary Services— CPL beginning in CY 2008 that we CPL to include all covered surgical
determined were office-based were procedures eligible for payment in
1. Covered Surgical Procedures
identified in Addendum AA to that rule ASCs, each year we identify covered
a. Covered Surgical Procedures by payment indicator ‘‘P2’’ (Office- surgical procedures as either
Designated as Office-Based based surgical procedure added to ASC temporarily office-based (these are new
(1) Background list in CY 2008 or later with MPFS procedure codes with little or no
nonfacility PE RVUs; payment based on utilization data that we have determined
In the August 2, 2007 ASC final rule, are clinically similar to other
we finalized our policy to designate as OPPS relative payment weight); ‘‘P3’’
(Office-based surgical procedures added procedures that are permanently office-
‘‘office-based’’ those procedures that are based), permanently office-based, or non
added to the ASC Covered Procedures to ASC list in CY 2008 or later with
office-based, after taking into account
List (CPL) in CY 2008 or later years that MPFS nonfacility PE RVUs; payment
updated volume and utilization data.
we determine are performed based on MPFS nonfacility PE RVUs); or
predominantly (more than 50 percent of ‘‘R2’’ (Office-based surgical procedure (2) Changes for CY 2020 to Covered
the time) in physicians’ offices based on added to ASC list in CY 2008 or later Surgical Procedures Designated as
consideration of the most recent without MPFS nonfacility PE RVUs; Office-Based
available volume and utilization data for payment based on OPPS relative In developing the CY 2020 OPPS/ASC
each individual procedure code and/or, payment weight), depending on whether proposed rule, we followed our policy
if appropriate, the clinical we estimated the procedure would be to annually review and update the
characteristics, utilization, and volume paid according to the standard ASC covered surgical procedures for which
of related codes. In that rule, we also payment methodology based on its ASC payment is made and to identify
finalized our policy to exempt all OPPS relative payment weight or at the new procedures that may be appropriate
procedures on the CY 2007 ASC list MPFS nonfacility PE RVU-based for ASC payment, including their
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from application of the office-based amount. potential designation as office-based.
We reviewed CY 2018 volume and ‘‘R2’’ in the CY 2019 OPPS/ASC final time in physicians’ offices, and we
utilization data and the clinical rule with comment period (83 FR 59039 believed that the services are of a level
characteristics for all covered surgical through 59040). of complexity consistent with other
procedures that are assigned payment Our review of the CY 2018 volume procedures performed routinely in
indicator ‘‘G2’’ (Nonoffice-based and utilization data resulted in our physicians’ offices. The CPT codes that
surgical procedure added in CY 2008 or identification of 9 covered surgical we proposed to permanently designate
later; payment based on OPPS relative procedures that we believed met the as office-based for CY 2020 were listed
payment weight) in CY 2018, as well as criteria for designation as permanently in Table 29 of the CY 2020 OPPS/ASC
for those procedures assigned one of the office-based. We understood the data to proposed rule, which is reprinted below
temporary office-based payment indicate that these procedures are as Table 54.
indicators, specifically ‘‘P2’’, ‘‘P3’’, or performed more than 50 percent of the
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As we stated in the CY 2019 OPPS/ reevaluate our decision when more data Comment: Some commenters
ASC final rule with comment period (83 become available for our next suggested that CPT codes 31634, 31647,
FR 59036), the office-based utilization evaluation. In light of these changes in 50727, 59414, and 61880 should not be
for CPT codes 36902 and 36905 (dialysis utilization and due to the high designated as office-based procedures
vascular access procedures) was greater utilization of this procedure in all and that the level of complexity is not
than 50 percent. However, we did not settings (over 125,000 claims in 2018), consistent with other procedures
designate CPT codes 36902 and 36905 we believe it may be premature to assign performed routinely in physicians’
as office-based procedures for CY 2019. office-based payment status to CPT code offices
These codes became effective January 1, 36902 at this time. Response: We agree with the
2017 and CY 2017 was the first year we Therefore, for CY 2020, we did not commenters. We inadvertently proposed
had claims volume and utilization data propose to designate CPT code 36902 as to assign office-based designations to
for CPT codes 36902 and 36905. We an office-based procedure, but proposed CPT codes 31634, 31647, 50727, 59414,
shared commenters’ concerns that the to continue to assign CPT code 36902 a and 61880. The volume and utilization
available data were not adequate to payment indicator of ‘‘G2’’—nonoffice- data for these procedures do not suggest
make a determination that these based surgical procedure paid based on the procedures are performed more than
procedures should be office-based, and OPPS relative weights. 50 percent of the time in physicians’
believed it was premature to assign The CY 2018 volume and utilization
offices, and we do not believe that the
office-based payment status to those data for CPT code 36905 show the
services are of a level of complexity
procedures for CY 2019. For CY 2019, procedure was not performed more than
consistent with other procedures
CPT codes 36902 and 36905 were 50 percent of the time in physicians’
performed routinely in physicians’
assigned payment indicators of ‘‘G2’’— offices. Therefore, in the CY 2020 OPPS/
offices. Therefore, CPT codes 31634,
Non office-based surgical procedure ASC proposed rule, we did not propose
50727, 59414, 61880 are assigned
added in CY 2008 or later; payment to assign an office-based designation for
payment indicators ‘‘G2’’—non office-
based on OPPS relative weight. CPT code 36905. Therefore the
In reviewing the CY 2018 volume and based surgical procedure based on OPPS
procedure will retain its payment
utilization data for CPT code 36902 we relative weights—for CY 2020.
indicator of ‘‘G2’’—non office-based
determined that the procedure was Additionally, as CPT code 31647
surgical procedure based on OPPS
performed more than 50 percent of the exceeds our device offset percentage
relative weights.
time in physicians’ offices based on threshold of 30 percent for device-
The comments and our responses to
2018 volume and utilization data. intensive designation, we are assigning
the comment are set forth below.
However, the office-based utilization Comment: Commenters supported our this procedure a payment indicator of
for CPT code 36902 has fallen from 62 decision to refrain from proposing to ‘‘J8’’—device-intensive procedure; paid
percent based on 2017 data to 52 designate CPT code 36902 as an office- at adjusted rate—for CY 2020. These
percent based on 2018 data. In addition, based procedure and to continue to procedures and their assigned payment
there was a sizeable increase in claims assign both CPT codes 36902 and 36905 indicators can be found in Addendum
for this service in ASCs—from a payment indicator of ‘‘G2’’— AA to the CY 2020 OPPS/ASC final rule
approximately 14,000 in 2017 to 38,000 nonoffice-based surgical procedure paid with comment period (which is
in 2018. As previously stated in the CY based on OPPS relative weights. available via the internet on the CMS
2019 OPPS/ASC final rule (83 FR Response: We thank commenters for website).
59036), when we believe that the their support of our proposal. After After consideration of the public
available data for our review process are reviewing the public comments we comments we received, we are
inadequate to make a determination that received, we are finalizing our proposal finalizing our proposal with
a procedure should be office-based, we to assign CPT code 36902 a payment modification, to designate the four ASC
either make no change to the indicator of ‘‘G2’’—nonoffice-based covered surgical procedures in Table 55
procedure’s payment status or make the surgical procedure paid based on OPPS as permanently office-based for CY 2020
change on a temporary basis, and relative weights. and subsequent years.
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We also reviewed CY 2018 volume CPT codes for CY 2020. The procedures and, therefore, we proposed to assign a
and utilization data and other for which the proposed office-based nonoffice-based payment indicator—
information for 12 procedures designations for CY 2020 are temporary ‘‘G2’’—to this code for CY 2020.
designated as temporarily office-based are also indicated by asterisks in We did not receive any public
in Tables 57 and 58 in the CY 2019 Addendum AA to the proposed and
comments on our proposal. Therefore,
OPPS/ASC final rule with comment final rule (which are available via the
we are finalizing our proposal, without
period (83 FR 59039 through 59040). Of internet on the CMS website).
The volume and utilization data for modification, to designate the
these 12 procedures, there were very procedures shown in Table 56 below as
the one remaining procedure that has a
few claims in our data and no claims temporarily office-based. The
temporary office-based designation for
data for 11 procedures described by CPT procedures for which the office-based
CY 2019, described by CPT code 38222
codes 10005, 10007, 10009, 10011, (Diagnostic bone marrow; biopsy(ies) designation for CY 2020 is temporary
11102, 11104, 11106, 65785, 67229, and aspiration(s)), are sufficient to are indicated by an asterisk in
0402T and 0512T. Consequently, we indicate that this covered surgical Addendum AA to this final rule with
proposed to maintain the temporary procedures was not performed comment period (which is available via
office-based designations for these 11 predominantly in physicians’ offices the internet on the CMS website).
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For CY 2020, we proposed to to HCPCS code G0365 (Vessel mapping to make the office-based designation
designate 7 new CY 2020 CPT codes for of vessels for hemodialysis access temporary rather than permanent, and
ASC covered surgical procedures as (services for preoperative vessel we will reevaluate the procedures when
temporarily office-based, as displayed in mapping prior to creation of data become available. The procedures
Table P31X. After reviewing the clinical hemodialysis access using an for which the proposed office-based
characteristics, utilization, and volume autogenous hemodialysis conduit, designation for CY 2020 is temporary
of related procedure codes, we including arterial inflow and venous are indicated by asterisks in Addendum
determined that the procedures in Table outflow)), which is currently on the list AA to the CY 2020 OPPS/ASC proposed
30 of the CY 2020 OPPS/ASC proposed of covered surgical procedures and rule (which is available via the internet
rule described by the new CPT codes assigned a proposed payment indicator on the CMS website).
would be predominantly performed in ‘‘R2’’—Office-based surgical procedure
physicians’ offices. We stated that we added to ASC list in CY 2008 or later We did not receive any public
believed the procedure described by without MPFS nonfacility PE RVUs; comments on our proposal. Therefore,
CPT codes 93X00 (Duplex scan of payment based on OPPS relative we are finalizing our proposal, without
arterial inflow and venous outflow for payment weight—for CY 2020. As such, modification, to designate the
preoperative vessel assessment prior to we proposed to add CPT codes 93X00 procedures shown in Table 57 below as
creation of hemodialysis access; and 93X01 in Table 30 of the CY 2020 temporarily office-based. The
complete bilateral study) and 93X01 OPPS/ASC proposed rule to the list of procedures for which the office-based
(Duplex scan of arterial inflow and temporarily office-based covered designation for CY 2020 is temporary
venous outflow for preoperative vessel surgical procedures. are indicated by an asterisk in
assessment prior to creation of Because we have no utilization data Addendum AA to this final rule with
hemodialysis access; complete for the procedures specifically described comment period (which is available via
unilateral study) was clinically similar by these new CPT codes, we proposed the internet on the CMS website).
ER12NO19.092</GPH>
b. ASC Covered Surgical Procedures To implantation of a medical device, we Based on our modified device-
Be Designated as Device-Intensive adopted a policy that the default device intensive criteria, for CY 2020, we
(1) Background offset would be applied in the same proposed to update the ASC CPL to
manner as the policy we adopted in indicate procedures that are eligible for
We refer readers to the CY 2019 section IV.B.2. of the CY 2019 OPPS/ payment according to our device-
OPPS/ASC final rule with comment ASC final rule with comment period (83 intensive procedure payment
period (83 FR 59040 through 59041), for FR 58944 through 58948). We amended methodology, based on the proposed
a summary of our existing policies § 416.171(b)(2) of the regulations to individual HCPCS code device-offset
regarding ASC covered surgical reflect these new device criteria. percentages using the CY 2018 OPPS
procedures that are designated as In addition, as also adopted in section claims and cost report data available for
device-intensive. IV.B.2. of CY 2019 OPPS/ASC final rule the CY 2020 OPP/ASC proposed rule.
(2) Changes to List of ASC Covered with comment period, to further align The ASC covered surgical procedures
Surgical Procedures Designated as the device-intensive policy with the that we proposed to designate as device-
Device-Intensive for CY 2020 criteria used for device pass-through intensive, and therefore subject to the
status, we specified, for CY 2019 and device-intensive procedure payment
In the CY 2019 OPPS/ASC final rule
subsequent years, that for purposes of methodology for CY 2020, are assigned
with comment period (83 FR 590401
satisfying the device-intensive criteria, a payment indicator ‘‘J8’’ and are
through 59043), for CY 2019, we
device-intensive procedure must included in ASC Addendum AA to the
modified our criteria for device-
involve a device that: CY 2020 OPPS/ASC proposed rule
intensive procedures to better capture
• Has received Food and Drug (which is available via the internet on
costs for procedures with significant
Administration (FDA) marketing the CMS website). The CPT code, the
device costs. We adopted a policy to
authorization, has received an FDA CPT code short descriptor, and the
allow procedures that involve surgically
investigational device exemption (IDE) proposed CY 2020 ASC payment
inserted or implanted, high-cost, single-
and has been classified as a Category B indicator, and an indication of whether
use devices to qualify as device-
device by the FDA in accordance with the full credit/partial credit (FB/FC)
intensive procedures. In addition, we
42 CFR 405.203 through 405.207 and device adjustment policy would apply
modified our criteria to lower the device
405.211 through 405.215, or meets because the procedure is designated as
offset percentage threshold from 40
another appropriate FDA exemption device-intensive are also included in
percent to 30 percent. Specifically, for
from premarket review; Addendum AA to the proposed rule
CY 2019 and subsequent years, we
adopted a policy that device-intensive • Is an integral part of the service (which is available via the internet on
procedures would be subject to the furnished; the CMS website). In addition, we note
following criteria: • Is used for one patient only; that in our CY 2019 OPPS/ASC
• All procedures must involve • Comes in contact with human proposed rule (83 FR 37158 through
implantable devices assigned a CPT or tissue; 37159), we proposed to apply our
HCPCS code; • Is surgically implanted or inserted device-intensive procedure payment
• The required devices (including (either permanently or temporarily); and methodology to device-intensive
single-use devices) must be surgically • Is not any of the following: procedures under the ASC payment
inserted or implanted; and ++ Equipment, an instrument, system only when the device-intensive
• The device offset amount must be apparatus, implement, or item of this procedure is furnished with a
significant, which is defined as type for which depreciation and surgically-inserted or implanted device
exceeding 30 percent of the procedure’s financing expenses are recovered as (including single-used medical devices).
mean cost. Corresponding to this change depreciable assets as defined in Chapter We inadvertently omitted language
in the cost criterion we adopted a policy 1 of the Medicare Provider finalizing this policy for CY 2019. For
that the default device offset for new Reimbursement Manual (CMS Pub. 15– CY 2020 and subsequent calendar years,
codes that describe procedures that 1); or we proposed to only apply our device-
involve the implantation of medical ++ A material or supply furnished intensive procedure payment
devices will be 31 percent beginning in incident to a service (for example, a methodology to device-intensive
CY 2019. For new codes describing suture, customized surgical kit, scalpel, procedures under the ASC payment
procedures that are payable when or clip, other than a radiological site system when the device-intensive
ER12NO19.093</GPH>
furnished in an ASC involving the marker). procedure is furnished with a surgically
inserted or implanted device (including costs for device-intensive procedures in was too low to reflect the cost of the
single use medical devices). The the ASC setting. device in ASCs in California, and,
payment rate under the ASC payment Comment: Some commenters stated therefore, the device offset should be
system for device-intensive procedures that we calculate the device portions of increased.
furnished with an implantable or a service in two ways. The first, using Response: After reviewing the most
inserted medical device would be the device offset from APC payment recently available claims data for the CY
calculated by applying the device offset rates developed under the 2020 OPPS/ASC final rule with
percentage based on the standard OPPS comprehensive ratesetting methodology, comment period, CPT code 22869 has a
APC ratesetting methodology to the and, the second using the device offset device offset percentage of 74.0 percent
OPPS national unadjusted payment to from the APC payment rates developed and a device offset amount of $8,383.12.
determine the device cost included in under the standard (non- The offset percentage increased by 2.9
the OPPS payment rate for a device comprehensive) ratesetting percentage points from 71.1 percent in
intensive ASC covered surgical methodology. Commenters requested the CY 2020 OPPS/ASC proposed rule
procedure, which we then set as equal that we designate device-intensive and the device offset amount increased
to the device portion of the national procedures using only our standard by 3.0 percent from $8,141.12. We note
unadjusted ASC payment rate for the (non-comprehensive) ratesetting that device cost information for CPT
procedure. We calculate the service methodology for determining whether code 22869 has only been available from
portion of the ASC payment for device the cost of a device exceeds our device- CY 2017 claims (for CY 2019 ratesetting)
intensive procedures by applying the intensive threshold of 30 percent as they and CY 2018 claims (for CY 2020
uniform ASC conversion factor to the believed that method is more consistent ratesetting) and therefore we are unable
service (non-device) portion of the with the overall ASC payment system. to draw any historical comparisons to
OPPS relative payment weight for the Response: As we stated in the CY determine if the CY 2020 device offset
device-intensive procedure. Finally, we 2015 OPPS/ASC final rule with is inconsistent with historical device
sum the ASC device portion and ASC comment period (79 FR 66924), under offsets for this procedure. For this CY
service portion to establish the full 42 CFR 416.167 and 416.171, most ASC 2020 OPPS/ASC final rule with
payment for the device-intensive payment rates are based on the OPPS comment period, the device cost of
procedure under the revised ASC relative payment weights, and our ASC $8,383.12 for CPT code 22869 is based
payment system. (82 FR 59409) policy with respect to device-intensive on 372 claims and we believe represents
procedures is designed to be consistent our best estimate of the cost of devices
The comments and our responses to
with the OPPS. ‘‘Device-intensive’’ for performing the surgical procedure in
the comments are set forth below.
identifies those procedures with CY 2020. Further, we note that 50
Comment: Commenters continued to
significant device costs and applies to percent of the final ASC payment rate
support the policy we implemented last
services that are performed both in the (both the device portion and non-device
year to lower the device offset hospital outpatient department and the portion) is adjusted by the ASC wage
percentage threshold to 30 percent for ASC setting. We believe that the device- index to reflect variation in labor costs.
purposes of designating device- intensive methodology for ASCs should We believe the ASC payment rate for
intensive procedures. align with the device-intensive policies CPT code 22869 provides an
Response: We thank commenters for for OPPS, and, therefore, procedures appropriate payment for both device
their support. should not be device-intensive in the and non-device costs for facilities in all
Comment: Some commenters ASC setting if they are not device- areas of the country.
requested that device implants, which intensive in the hospital outpatient Comment: One commenter requested
we interpret to mean surgically inserted setting. The device offset percentage for that CPT code 50590 (Lithotripsy,
or implanted, single-use devices, be device-intensive procedures under the extracorporeal shock wave) be assigned
included in ASC payment at invoice OPPS are based on the comprehensive device-intensive status.
price based on manufacturer reported ratesetting methodology. However, to be Response: We thank the commenter
pricing or at device pass-through assigned device-intensive status in the for its request. Based on the most
payment as described in section IV.A of ASC setting, the procedure must be recently available claims data for this
this final rule with comment period so identified as device-intensive in the CY 2020 OPPS/ASC final rule with
that the payment rate for these device- hospital outpatient setting and have a comment period, the device offset
intensive procedures would more device offset percentage exceeds the 30 percentage for CPT code 50590
appropriately reflect the cost of care and percent threshold as calculated using continues to be below the 30 percent
encourage migration from the more our standard ratesetting methodology as threshold and, therefore, is ineligible to
expensive hospital setting to the ASC stated in 42 CFR 416.171(b)(2). be assigned device-intensive status.
setting. Additionally, for purposes of the ASC
Response: We thank the commenters payment system, the device amount is c. Adjustment to ASC Payments for No
for their recommendation. As discussed calculated by applying the device offset Cost/Full Credit and Partial Credit
in this section, the ASC payment rate for percentage calculated under our Devices
surgical procedures includes payment standard ratesetting methodology to the Our ASC payment policy for costly
for device costs, which are packaged APC payment weights calculated under devices implanted in ASCs at no cost/
into the procedure payment. For device- our standard ratesetting methodology. full credit or partial credit, as set forth
intensive procedures and procedures Comment: One commenter requested in § 416.179 of our regulations, is
using pass-through devices, the device that we re-evaluate the device-intensive consistent with the OPPS policy that
portion is held equal to the device designation for CPT code 22869 was in effect until CY 2014.
portion under the OPPS using the (Insertion of interlaminar/interspinous Specifically, the OPPS policy that was
standard ratesetting methodology. We process stabilization/distraction device, in effect through CY 2013 provided a
believe this methodology provides without open decompression or fusion, reduction in OPPS payment by 100
consistency with device-intensive including image guidance when percent of the device offset amount
policies under the OPPS and provides performed, lumbar; single level). The when a hospital furnishes a specified
an appropriate payment for the device commenter stated the ASC payment rate device without cost or with a full credit
and by 50 percent of the device offset ASC furnishes a device without cost or where an ASC may receive a device at
amount when the hospital receives with full or partial credit, respectively. no cost or receive full credit or partial
partial credit in the amount of 50 All ASC covered device-intensive credit for the device, we apply our
percent or more of the cost for the procedures are subject to the no cost/ ‘‘FB’’/‘‘FC’’ modifier policy to all
specified device (77 FR 68356 through full credit and partial credit device device-intensive procedures.
68358). The established ASC policy adjustment policy. Specifically, when a In the CY 2020 OPPS/ASC proposed
reduces payment to ASCs when a device-intensive procedure is performed rule, we did not propose any changes to
specified device is furnished without to implant a device that is furnished at these policies and we are finalizing
cost or with full credit or partial credit no cost or with full credit from the continuing our existing policies for CY
for the cost of the device for those ASC manufacturer, the ASC would append 2020.
covered surgical procedures that are the HCPCS ‘‘FB’’ modifier on the line in
the claim with the procedure to implant d. Additions to the List of ASC Covered
assigned to APCs under the OPPS to
the device. The contractor would reduce Surgical Procedures
which this policy applies. We refer
readers to the CY 2009 OPPS/ASC final payment to the ASC by the device offset (1) Additions to the List of ASC Covered
rule with comment period (73 FR 68742 amount that we estimate represents the Surgical Procedures for CY 2020
through 68744) for a full discussion of cost of the device when the necessary As finalized in section XII.A.3. of the
the ASC payment adjustment policy for device is furnished without cost or with
CY 2019 OPPS/ASC final rule with
no cost/full credit and partial credit full credit to the ASC. We continue to
comment period (83 FR 59029 through
devices. believe that the reduction of ASC
59030), we revised our definition of
In the CY 2019 OPPS/ASC proposed payment in these circumstances is
‘‘surgery’’ for CY 2019 to include certain
rule (83 FR 37159), we noted that, as necessary to pay appropriately for the
‘‘surgery-like’’ procedures that are
discussed in section IV.B. of the CY covered surgical procedure furnished by
assigned codes outside the CPT surgical
2014 OPPS/ASC final rule with the ASC.
In the CY 2019 OPPS/ASC final rule range. For CY 2020 and subsequent
comment period (78 FR 75005 through years we proposed to adopt the
75006), we finalized our proposal to modified definition we finalized for CY
through 59044), for partial credit, we
modify our former policy of reducing 2019, to include procedures that are
adopted a policy to reduce the payment
OPPS payment for specified APCs when described by Category I CPT codes that
for a device-intensive procedure for
a hospital furnishes a specified device are not in the surgical range but directly
which the ASC receives partial credit by
without cost or with a full or partial crosswalk or are clinically similar to
one-half of the device offset amount that
credit. Formerly, under the OPPS, our procedures in the Category I CPT code
would be applied if a device was
policy was to reduce OPPS payment by provided at no cost or with full credit, surgical range that we have determined
100 percent of the device offset amount if the credit to the ASC is 50 percent or do not pose a significant safety risk,
when a hospital furnished a specified more (but less than 100 percent) of the would not be expected to require an
device without cost or with a full credit cost of the new device. The ASC will overnight stay when performed in an
and by 50 percent of the device offset append the HCPCS ‘‘FC’’ modifier to the ASC, and are separately paid under the
amount when the hospital received HCPCS code for the device-intensive OPPS. We also proposed to continue to
partial credit in the amount of 50 surgical procedure when the facility include in our definition of surgical
percent or more (but less than 100 receives a partial credit of 50 percent or procedures those procedures described
percent) of the cost for the specified more (but less than 100 percent) of the by Category I CPT codes in the surgical
device. For CY 2014, we finalized our cost of a device. To report that the ASC range from 10000 through 69999 as well
proposal to reduce OPPS payment for received a partial credit of 50 percent or as those Category III CPT codes and
applicable APCs by the full or partial more (but less than 100 percent) of the Level II HCPCS codes that directly
credit a provider receives for a replaced cost of a new device, ASCs have the crosswalk or are clinically similar to
device, capped at the device offset option of either: (1) Submitting the procedures in the CPT surgical range
amount. claim for the device replacement that we have determined do not pose a
Although we finalized our proposal to procedure to their Medicare contractor significant safety risk, that we would
modify the policy of reducing payments after the procedure’s performance, but not expect to require an overnight stay
when a hospital furnishes a specified prior to manufacturer acknowledgment when performed in ASCs, and that are
device without cost or with full or of credit for the device, and separately paid under the OPPS.
partial credit under the OPPS, in the CY subsequently contacting the contractor We conducted a review of HCPCS
2014 OPPS/ASC final rule with regarding a claim adjustment, once the codes that currently are paid under the
comment period (78 FR 75076 through credit determination is made; or (2) OPPS, but not included on the ASC
75080), we finalized our proposal to holding the claim for the device CPL, and that meet our proposed
maintain our ASC policy for reducing implantation procedure until a definition of surgery to determine if
payments to ASCs for specified device- determination is made by the changes in technology or medical
intensive procedures when the ASC manufacturer on the partial credit and practice affected the clinical
furnishes a device without cost or with submitting the claim with the ‘‘FC’’ appropriateness of these procedures for
full or partial credit. Unlike the OPPS, modifier appended to the implantation the ASC setting. Based on this review,
there is currently no mechanism within procedure HCPCS code if the partial we proposed to update the list of ASC
the ASC claims processing system for credit is 50 percent or more (but less covered surgical procedures by adding
ASCs to submit to CMS the actual credit than 100 percent) of the cost of the total knee arthroplasty, a knee
received when furnishing a specified replacement device. Beneficiary mosaicplasty procedure and three
device at full or partial credit. coinsurance would be based on the coronary intervention procedures (as
Therefore, under the ASC payment reduced payment amount. As finalized well as the three associated add-on
system, we finalized our proposal for in the CY 2015 OPPS/ASC final rule codes for the coronary intervention
CY 2014 to continue to reduce ASC with comment period (79 FR 66926), to procedures) to the list for CY 2020, as
payments by 100 percent or 50 percent ensure our policy covers any situation was shown in Table 32 of the CY 2020
of the device offset amount when an involving a device-intensive procedure OPPS/ASC proposed rule. After
reviewing the clinical characteristics of resurfacing (total knee arthroplasty)), made for TKA procedures performed in
these procedures and consulting with should be added to the ASC CPL. In the the ASC setting when that setting is
stakeholders and our clinical advisors, CY 2018 OPPS/ASC final rule with clinically appropriate. Therefore, we
we determined that these eight comment period (82 FR 59411 through solicited public comment on the
procedures would not be expected to 59412) we noted that some commenters appropriate approach to provide
pose a significant risk to beneficiary stated that many ASCs are equipped to safeguards for Medicare beneficiaries
safety when performed in an ASC and perform these procedures and who should not receive the TKA
would not be expected to require active orthopedic surgeons in ASCs are procedure in an ASC setting.
medical monitoring and care of the increasingly performing these Specifically, we solicited public
beneficiary at midnight following the procedures safely and effectively on comment on methods to ensure
procedure. The regulations at non-Medicare patients and appropriate beneficiaries receive surgical procedures
§ 416.166(c) list general exclusions from Medicare patients. However, other in the ASC setting only as clinically
the list of ASC covered surgical commenters noted that the majority of appropriate. For instance, we stated that
procedures based primarily on factors ASCs were not well-equipped to safely CMS could issue a new modifier that
relating to safety, including procedures perform TKA procedures on patients indicates the physician believes that the
that generally result in extensive blood and that the majority of Medicare beneficiary would not be expected to
loss, require major or prolonged patients are not suitable candidates to require active medical monitoring and
invasion of body cavities, or directly receive joint arthroplasty procedures in care at midnight following a particular
involve major blood vessels. We an ASC setting. For CY 2018, we did not procedure furnished in the ASC setting.
assessed each of the proposed added finalize adding TKA to the ASC covered CMS could require that such a modifier
procedures against the regulatory safety surgical procedures list, but noted that be included on the claims line for a
criteria and determined that these we would take the suggestions and surgical procedure performed in an
procedures meet each of the criteria. recommendations into consideration for ASC. Alternatively, given the
Although the proposed coronary future rulemaking. importance of post-operative care in
intervention procedures may involve In this CY 2020 OPPS/ASC final rule, making determinations about whether
blood vessels that could be considered we continue to promote site-neutrality, the ASC is an appropriate setting for a
major, as stated in the August 2, 2007 where possible, between the hospital procedure, CMS could require that an
ASC final rule (72 FR 42481), we believe outpatient department and ASC settings. ASC has a defined plan of care for each
the involvement of major blood vessels Further, we agree with commenters that beneficiary following a surgical
is best considered in the context of the there is a small subset of Medicare procedure. We also stated that we could
clinical characteristics of individual beneficiaries who may be suitable establish certain requirements for ASCs
procedures, and we do not believe that candidates to receive TKA procedures that choose to perform certain surgical
it is logically or clinically consistent to in an ASC setting based on their clinical procedures on Medicare patients, such
exclude certain cardiac procedures from characteristics. For example, based on as requiring an ASC to have a certain
the list of ASC covered surgical Medicare Advantage encounter data, we amount of experience in performing a
procedures on the basis of the estimate over 800 TKA procedures were procedure before being eligible for
involvement of major blood vessels, yet performed in an ASC on Medicare payment for performing the procedure
continue to provide ASC payment for Advantage enrollees in 2016. We believe under Medicare. We solicited comment
that beneficiaries not enrolled in an MA on these options, and other options, for
similar procedures involving major
plan should also have the option of ensuring that beneficiaries receive
blood vessels that have a history of safe
choosing to receive the TKA procedure surgical procedures, including TKA,
performance in ASCs, such as CPT code
in an ASC setting based on their that do not pose a significant safety risk
36473 (Mechanicochemical destruction
physicians’ determinations. when performed in an ASC.
of insufficient vein of arm or leg, As we stated in the August 2, 2007 In light of the information we
accessed through the skin using imaging final rule (72 FR 42483 through 42484), received from commenters in support of
guidance) and CPT code 37223 we exclude procedures that would adding TKA to the ASC CPL in response
(Insertion of stents into groin artery, otherwise pose a significant safety risk to our comment solicitation in the CY
endovascular, accessed through the skin to the typical Medicare beneficiary. 2018 OPPS/ASC proposed rule, we
or open procedure). Based on our However, we believe physicians should stated our belief that TKA would meet
review of the clinical characteristics of continue to play an important role in our regulatory requirements established
the procedures and their similarity to exercising their clinical judgment when under §§ 416.2 and 416.166(b) for
other procedures that are currently making site-of-service determinations, covered surgical procedures in the ASC
included on the ASC CPL, we believe including for TKA. In light of the setting. Therefore, we proposed to add
these procedures can be safely information commenters submitted in TKA to the ASC CPL as shown in Table
performed in an ASC. Therefore, we support of adding TKA to the ASC CPL 32 in the CY 2020 OPPS/ASC proposed
proposed to include these three in response to our CY 2018 public rule. At that time we stated our intent
coronary intervention procedures on the comment solicitation, we proposed to to consider appropriate safeguards and
list of ASC covered surgical procedures add TKA to the ASC CPL in CY 2020. limitations for surgical procedures
for CY 2020. We also proposed to add We note that TKA procedures were furnished in the ASC setting based on
their respective add-on procedures still predominantly performed in the public comments we receive.
which are packaged under the ASC inpatient hospital setting in CY 2018 (82 As we stated in the CY 2019 OPPS/
payment system. percent of the time) based on ASC proposed rule (83 FR 59054
In the CY 2018 OPPS/ASC proposed professional claims data, and we are through 59055), section 1833(i)(1) of the
rule, we solicited public comments on cognizant of the fact that the majority of Act requires us, in part, to specify, in
whether the total knee arthroplasty beneficiaries may not be suitable consultation with appropriate medical
(TKA) procedure, CPT code 27447 candidates to receive TKA in an ASC organizations, surgical procedures that
(Arthroplasty, knee, condyle and setting. We believe that appropriate are appropriately performed on an
plateau; medial and lateral limits are necessary to ensure that inpatient basis in a hospital, but can be
compartments with or without patella Medicare Part B payment will only be safely performed in an ASC, and to
review and update the ASC covered appropriate to exclude certain cardiac • CPT code 92929 (Percutaneous
surgical procedures list at least every 2 procedures from the list of ASC covered transcatheter placement of intracoronary
years. surgical procedures because they stent(s), with coronary angioplasty
We also solicited comment on how involve major blood vessels, yet when performed; each additional
CMS should think about the role of the continue to provide ASC payment for branch of a major coronary artery (list
ASC CPL compared to state regulations similar procedures involving major separately in addition to code for
and market forces in providing payment blood vessels that have a history of safe primary procedure)),
for certain surgical procedures in an performance in ASCs, such as CPT code • CPT code C9600 (Percutaneous
ASC and whether any modifications 36473 (Mechanicochemical destruction transcatheter placement of drug eluting
should be made to the ASC CPL. of insufficient vein of arm or leg, intracoronary stent(s), with coronary
Comments on this topic could help accessed through the skin using imaging angioplasty when performed; single
formulate the basis for future policy guidance) and CPT code 37223 major coronary artery or branch), and
development regarding how we (Insertion of stents into groin artery, • CPT code C9601 (Percutaneous
determine what procedures are payable endovascular, accessed through the skin transcatheter placement of drug-eluting
for Medicare fee-for-service or open procedure). Based on our intracoronary stent(s), with coronary
beneficiaries in the ASC setting and review of the clinical characteristics of angioplasty when performed; each
maintain the balance between safety and the procedures and their similarity to additional branch of a major coronary
access. Finally, we solicited comment other procedures that are currently artery (list separately in addition to code
on how our proposed additions to the included on the ASC CPL, we believe for primary procedure)) to the ASC CPL.
list of ASC covered surgical procedures these three coronary intervention Comment: Many commenters
might affect rural hospitals to the extent procedures (CPT codes 92920, 92928, supported our proposal to add TKA to
rural hospitals rely on providing such and HCPCS code C9600) and three the ASC CPL for CY 2020 and
procedures. associated add-on procedures (CPT code subsequent years.
The comments and our responses to Response: We thank commenters for
92921, 92929, and HCPCS code C9601)
the comments are set forth below. their support of our proposal.
can be safely performed in the ASC Comment: One commenter requested
Comment: Many commenters
setting, for certain Medicare patients that we delay adding TKA to the ASC
supported our proposal to add three
and note that the physician should CPL until more data can be collected on
coronary intervention procedures as
determine whether a particular case the impact of case-mix and patient
well as the additional three procedures
would be a good candidate to be populations for participants in the CMS
that represented their associated add-on
furnished in the ASC setting rather than Innovation Center’s Bundled Payments
procedures to the ASC CPL. They stated
the hospital setting based on the clinical for Care Improvement Initiative.
that our proposed additions meet our
assessment of the patient. We agree with Response: We believe there are a
criteria to be included on the ASC CPL
commenters who stated that expert small number of less medically complex
and that claims analyses, clinical trials,
consensus, clinical guidelines, and TKA patients that could appropriately
expert consensus and clinical
guidelines, among other materials clinical studies establish that receive TKA in an ASC setting. Because
supported the inclusion of such percutaneous coronary interventions we believe this group will be small, we
coronary intervention procedures on the can be safely performed in an ASC do not believe our proposal would have
ASC CPL. Further, many ASC setting. While we acknowledge that a a substantial impact on the patient-mix
commenters contended that ASCs are majority of Medicare beneficiaries may for the Bundled Payments for Care
well-equipped to safely perform these not be suitable candidates to receive Improvement Advanced (BPCI
procedures on Medicare beneficiaries. these procedures in an ASC setting due Advanced) or the Initiative and
However, some commenters stated that to factors such as age and comorbidities, Comprehensive Care Joint Replacement
without defined criteria for risk we believe it is important to make these (CJR) models. Therefore, we do not
stratification, beneficiaries would be procedures payable in the ASC setting, believe any delay in the implementation
exposed to significant risk if these in order to ensure access to these of our proposed addition to the ASC
procedures were added to the ASC CPL. coronary intervention procedures for CPL is warranted.
Additionally, some commenters those beneficiaries who are appropriate Comment: Some commenters opposed
believed the percutaneous coronary candidates to receive them in an ASC our proposal to add TKA to the ASC
intervention procedures should be setting. CPL. These commenters stated that the
performed in a hospital setting where Therefore, in this final rule with Medicare population would not be
there is an available on-site cardiac comment period, we are finalizing our suitable candidates to receive TKA in an
surgical backup and intensive care unit proposal without modification to add ASC setting and that complications
in the event of an emergency. three coronary intervention procedures arising from TKA could be devastating
Response: We thank the commenters as well as three associated add-on and life-threatening if not performed in
for their support. We assessed each of procedures. These procedures are: a hospital setting. Specifically, patients
the procedures we proposed to add to • CPT code 92920 (Percutaneous could be at risk for the development of
the ASC CPL against the regulatory transluminal coronary angioplasty; deep vein thrombosis with the potential
safety criteria and determined that these single major coronary artery or branch), to propagate lethal pulmonary embolus,
procedures meet each of the criteria. • CPT code 92921 (Percutaneous anesthesia-related risks, as well as other
Although the proposed coronary transluminal coronary angioplasty; each risks. Some commenters also noted that
intervention procedures may involve additional branch of a major coronary CMS eliminated the requirement that
blood vessels that could be considered artery (list separately in addition to code ASCs have a written transfer agreement
major, as stated in the August 2, 2007 for primary procedure)), with a nearby hospital and the
ASC final rule (72 FR 42481), we believe • CPT code 92928 (Percutaneous requirement that their physicians have
the involvement of major blood vessels transcatheter placement of intracoronary admitting privileges at a hospital.
is best considered in the context of the stent(s), with coronary angioplasty Further, some commenters noted that in
clinical characteristics of individual when performed; single major coronary the absence of the physician self-referral
procedures. We do not believe that it is artery or branch), law, which does not apply to
procedures performed in an ASC, there been $2,379.88, but for the statutory cap establish the requirement that ASCs
will be no other safeguard against a limiting it to the inpatient deductible have formal arrangements with a nearby
physician’s profitable, but clinically amount ($1,364 in CY 2019). However, hospital in case a patient is unable to go
inappropriate, referral to an ASC in the payment rates are publicly available home following a procedure. Other
which the physician has an ownership and despite the higher cost-sharing, commenters suggested that a defined
interest. some beneficiaries, especially those plan of care requirement is already an
Response: We agree with commenters with supplemental insurance, may still existing Condition for Coverage for
that the majority of Medicare choose to have their procedure ASCs.
beneficiaries would not be suitable performed in the ASC setting. Response: We agree with commenters
candidates to receive TKA procedures In addition, as we stated in the CY that ASCs are currently required to
in an ASC setting. Factors such as age, 2018 OPPS/ASC final rule with follow the discharge protocols following
comorbidity, and body mass index are comment period (82 FR 59389), section a surgical procedure, as set out at 42
among the many factors that must be 4011 of the 21st Century Cures Act (Pub. CFR 416.52(c). For example, our
taken into account to determine if L. 114–255) requires the Secretary to regulations require that each patient be
performing a TKA procedure in an ASC make available to the public via a provided written discharge instructions
would be appropriate for a particular searchable website, with respect to an and overnight supplies; prescription
Medicare beneficiary. However, we appropriate number of items and and physician contact information; and
believe there are a small number of less services, the estimated payment amount post-operative instructions; and that
medically complex beneficiaries that for the item or service under the OPPS patients be discharged in the company
could appropriately receive the TKA and ASC payment system and the of a responsible adult, except those
procedure in an ASC setting and we estimated beneficiary liability patients exempted by the attending
believe physicians should continue to applicable to the item or service. We physician.
play an important role in exercising implemented this provision by We remind ASCs that beneficiaries
their clinical judgment when making providing our Outpatient Procedure should receive discharge care
site-of-service determinations, including Price Lookup tool available via the instructions that meet our requirements
for TKA. While we acknowledge that internet at https://www.medicare.gov/ following a TKA procedure as well as
the physician self-referral law does not procedure-price-lookup. This web page other surgical procedures. ASCs should
apply to TKA performed in an ASC, allows beneficiaries to compare their also review our State Operations
physicians should be aware of other potential cost-sharing liability for Manual for further guidance on this
Federal and state laws that may procedures performed in the hospital condition for coverage, as well as others.
potentially limit this activity, such as outpatient setting versus the ASC With respect to reinstating the
the Anti-Kickback Statute. setting. We believe this tool allows requirement that ASCs have a formal
Comment: Commenters also noted beneficiaries to be informed of potential transfer agreement with a nearby
that beneficiary coinsurance for TKA cost-sharing amounts and therefore hospital, we note that such issue is
procedures could be higher in the ASC mitigates the commenters’ concern related to Conditions for Coverage and
setting and therefore did not support about providing payment for procedures is outside the scope of this final rule
our proposal, or recommended that we in an ASC setting even if the beneficiary with comment.
notify beneficiaries that the coinsurance cost-sharing in an ASC would be greater After considering the public
for a TKA procedure could be lower in than in the hospital outpatient comments we received, and in response
a hospital outpatient setting. department setting. to commenters’ support for this
Response: We are aware that Comment: Some commenters proposal, we are finalizing our proposal
beneficiaries may incur greater cost- suggested that CMS work closely with without modification to add TKA, CPT
sharing for TKA procedures in an ASC specialty societies regarding best code 27447 (Arthroplasty, knee, condyle
setting under our proposal. However, practices and any appropriate and plateau; medial and lateral
this would not be an occurrence that is limitations or conditions for Medicare compartments with or without patella
unique to TKA. Section 1833(t)(8)(C)(i) Part B payment for TKA in the ASC resurfacing (total knee arthroplasty)), to
of the Act limits the amount of setting. Other commenters stated that the ASC CPL for CY 2020 and
beneficiary copayment that may be our suggestions, such as requiring a subsequent years.
collected for a procedure paid under the modifier or a plan of care, were Based on the public comments we
OPPS (including items such as drugs unnecessary and would increase received, we are not finalizing any of
and biologicals) performed in a year to administrative burden by complicating the additional requirements on which
the amount of the inpatient hospital the processes for scheduling, performing we sought comment, such as adding a
deductible for that year. We note that and billing for ASCs, without improving modifier or requiring an ASC to have a
this section of the Act does not apply to beneficiary safety because physicians certain amount of experience in
the ASC payment system. Rather, ASC are best-equipped to determine the performing a procedure before being
cost-sharing is described by 1833(a)(4) clinical appropriateness of the site of eligible for payment for performing the
of the Act and there may be instances service for their patients. Some procedure under Medicare.
where beneficiary cost-sharing in an commenters did not support our Comment: Commenters who
ASC may be higher than beneficiary suggested approaches and believed that responded to the CY 2020 OPPS/ASC
cost-sharing in a hospital outpatient such requirements would be proposed rule also requested that CMS
department for the same procedure. We superfluous and provide no beneficial add several additional procedures to the
note that the ASC payment rate for a oversight to ensure patient safety. Two ASC CPL, which we had not proposed
TKA procedure is $8,609.17 for CY 2020 orthopedic specialty societies supported to add to the ASC CPL in the CY 2020
while the CY 2020 OPPS payment rate the concept of having defined plans of OPPS/ASC proposed rule. These
is $11,899.39. This means that ASC care for each beneficiary following a additional procedures are listed in Table
coinsurance would be $1,721.83 while surgical procedure. One orthopedic 58.
hospital OPPS coinsurance would have specialty society requested that we re- BILLING CODE 4120–01–P
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Response: We appreciate the 27412, 57282, 57283, 57425, 62365, procedures to the ASC CPL for CY 2020,
commenters’ recommendations. We 62367, and 62368, we will continue to we solicited public comments on
reviewed all of the services that review whether these procedures meet whether stakeholders believe these
commenters requested that we add to the criteria to be added to the ASC CPL procedures can be safely performed in
the ASC CPL. Of these procedures, we and take commenters input into an ASC setting. Additionally, we
did not consider procedures that are consideration in future rulemaking. requested that commenters provide any
unconditionally packaged under the (2) Comment Solicitation on Coronary materials supporting their position, in
OPPS (identified by status indicator ‘‘N’’ Intervention Procedures particular information and data that
in addendum B of this final rule with specifically address the requirements in
comment period) as such procedures For CY 2020, as discussed above, we
our regulations at §§ 416.2 and 416.166
would not meet our requirement for proposed to add three coronary
(84 FR 39544). For example, we
ASC covered surgical procedures at intervention procedures (along with the
codes describing their respective add-on requested that commenters provide
§ 416.166(b) that the procedure be information that supports their position
procedures) that involve major blood
separately paid under the OPPS. as to whether each of these procedures
vessels that we believe can be safely
Of the procedures listed in Table 58, performed in an ASC setting and would would be expected to pose a significant
CPT codes 57267, 62290, 62291, 92938, not pose a significant safety risk to risk to beneficiary safety when
92973, 92978, 92979, 93463, 93563, beneficiaries if performed in an ASC performed in an ASC, whether standard
93564, 93565, 93566, 93567, 93568, setting. In the CY 2020 OPPS/ASC medical practice dictates that the
93571, 93572, and C9605 are proposed rule, in addition to the three beneficiary would typically be expected
unconditionally packaged under the coronary intervention procedures (and to require active medical monitoring
ASC payment system. For the their three add-on codes) we proposed and care at midnight following the
procedures identified by CPT codes to add to the ASC CPL, we also procedure (‘‘overnight stay’’), and
92960, 93312, 93313, 93315, and 93530, reviewed several other coronary whether the procedure would fall under
we do not believe these procedures meet intervention procedures. While we did our general exclusions for covered
our criteria as established under not believe the procedures included in surgical procedures at § 416.166(c) (for
§ 416.166(b) and would pose a Table P33 of the CY 2020 OPPS/ASC example, would it generally result in
significant safety risk to beneficiaries if proposed rule met our criteria for extensive blood loss). We stated that we
performed in an ASC setting. For the inclusion on the ASC CPL at that time, would consider public comments we
procedures identified by CPT codes and we did not propose to add such receive in future rulemaking cycles.
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Comment: Some commenters Therefore, commenters indicated, such Table 59 of this final rule with comment
supported adding all of the procedures procedures should only be performed in period.
listed in Table 33 of the CY 2020 OPPS/ hospital settings that include rapid Based on the public comments we
ASC proposed rule. Other commenters access to on-site cardiac surgery as well received, we believe the procedures
recommended adding CPT codes 92937, as intensive care units. listed in Table 59 would expose
92938, 92973, C9604, and C9605. These beneficiaries to significant safety risk if
Response: We appreciate the
commenters stated these percutaneous performed in an ASC setting at this time
commenters’ feedback and
transluminal revascularization and would not meet our criteria
procedures through coronary artery recommendations. Additionally, we
established under § 416.166(b).
bypass graft meet our established note that we had the incorrect long
Specifically, we believe that
criteria for addition to the ASC CPL and descriptor for CPT 92973 displayed in
transluminal revascularization of a
that claims data, clinical trials, and our CY 2020 OPPS/ASC proposed rule. bypass graft carries an inherent higher
clinical guidelines support their In the proposed rule, we had the long risk of complication and may require
addition. descriptor as ‘‘Percutaneous the assistance of on-site cardiac surgical
Other commenters did not support transcatheter placement of drug eluting backup. Additionally, we believe
adding any of the procedures list in intracoronary stent(s), with coronary atherectomy procedures carry a greater
Table 59 as listed above. The angioplasty when performed; single risk of complication than coronary
commenters stated that these major coronary artery or branch.’’ The intervention procedures without an
procedures often carry the risk of correct long descriptor for CPT 92973 atherectomy procedure. Therefore, at
serious possible complications, such as should be ‘‘Percutaneous transluminal this time, we believe that adding any of
in-facility death, damage to or coronary thrombectomy mechanical (list the procedures identified in Table 59 of
perforations of coronary arteries, and separately in addition to code for this final rule with comment period to
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intramural hematoma, among others. primary procedure)’’ and is displayed in the ASC CPL would expose
beneficiaries to significant risk. We HCPCS codes meet our criteria sacroiliac joint, with image guidance
believe that such procedures should be established under §§ 416.2 and 416.166 (that is, fluoroscopy or computed
performed in a hospital setting with an for addition to the ASC CPL and are tomography));
immediate response available in case of displayed in Table 60. These 12 • CPT Code 66987 (Extracapsular
emergencies. procedures include— cataract removal with insertion of
We received no comments on our • CPT code 15769 (Grafting of
intraocular lens prosthesis (1-stage
proposal to add CPT code 29867 autologous soft tissue, other, harvested
by direct excision (for example, fat, procedure), manual or mechanical
(Arthroscopy, knee, surgical;
dermis, fascia)); technique (for example, irrigation and
osteochondral allograft (for example,
• CPT code 15771 (Grafting of aspiration or phacoemulsification),
mosaicplasty)) to the ASC CPL for CY
autologous fat harvested by liposuction complex, requiring devices or
2020 and subsequent years.
technique to trunk, breasts, scalp, arms, techniques not generally used in routine
After consideration of the public
and/or legs; 50 cc or less injectate); cataract surgery (for example, iris
comments we received, we are
finalizing our proposal without • CPT code 15773 (Grafting of expansion device, suture support for
modification to add CPT codes: 27447, autologous fat harvested by liposuction intraocular lens, or primary posterior
29867, 92920, 92921, 92928, 92929, and technique to face, eyelids, mouth, neck, capsulorrhexis) or performed on
HCPCS codes C9600 and C9601 to the ears, orbits, genitalia, hands, and/or feet; patients in the amblyogenic
ASC CPL. We have determined these 25 cc or less injectate); developmental stage; with endoscopic
• CPT code 33016 cyclophotocoagulation);
procedures would not be expected to
(Pericardiocentesis, including imaging • CPT Code 66988 (Extracapsular
pose a significant risk to beneficiary
guidance, when performed);
safety when performed in an ASC, that • CPT code 46948 cataract removal with insertion of
standard medical practice would not (Hemorrhoidectomy, internal, by intraocular lens prosthesis (1 stage
dictate that the beneficiary would transanal hemorrhoidal procedure), manual or mechanical
typically be expected to require active dearterialization, 2 or more hemorrhoid technique (for example, irrigation and
medical monitoring and care at columns/groups, including ultrasound aspiration or phacoemulsification); with
midnight following the procedure, and guidance, with mucopexy, when endoscopic cyclophotocoagulation); and
are separately paid under the OPPS. The performed); • CPT code 0587T (Percutaneous
8 procedures we are adding to the ASC • CPT code 62328 (Spinal puncture, implantation or replacement of
CPL, including the long descriptors and lumbar, diagnostic; with fluoroscopic or integrated single device
the final CY 2020 payment indicators, CT guidance); neurostimulation system including
are displayed in Table 60. • CPT code 62329 (Spinal puncture, electrode array and receiver or pulse
Additionally, we note that we therapeutic, for drainage of generator, including analysis,
inadvertently omitted new CPT and new cerebrospinal fluid (by needle or programming, and imaging guidance
HCPCS codes effective January 1, 2020 catheter); with fluoroscopic or CT when performed, posterior tibial nerve).
from Table 32, Proposed Additions to guidance);
the List of ASC Covered Surgical • CPT Code 64451 (Injection(s), We did not receive comments on the
Procedures for CY 2020, of our CY 2020 anesthetic agent(s) and/or steroid; addition of these codes to the ASC CPL
OPPS/ASC proposed rule (84 FR 39544); nerves innervating the sacroiliac joint, and are finalizing without modification.
however, we included these 12 with image guidance (that is, The table below shows all additions to
procedures in Addendum AA to our fluoroscopy or computed tomography)); the ASC CPL for CY 2020, these
proposed rule. The procedures • CPT Code 64625 (Radiofrequency additions are also reflected in
described by the 12 new CPT and ablation, nerves innervating the Addendum AA.
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BILLING CODE 4120–01–C believe this service is integral to the required to identify surgical procedures
2. Covered Ancillary Services performance of the surgical procedures subject to transitional payment, we
identified by the commenter, retained payment indicator ‘‘A2’’
Consistent with the established ASC specifically CPT codes 43235 because it is used to identify procedures
payment system policy (72 FR 42497), (Esophagogastroduodenoscopy, flexible, that are exempted from the application
we proposed to update the ASC list of transoral; diagnostic, including of the office-based designation.
covered ancillary services to reflect the collection of specimen(s) by brushing or The rate calculation established for
payment status for the services under washing, when performed (separate device-intensive procedures (payment
the CY 2020 OPPS. We stated in the procedure)), 43236 indicator ‘‘J8’’) is structured so only the
proposed rule that maintaining (Esophagogastroduodenoscopy, flexible, service portion of the rate is subject to
consistency with the OPPS may result transoral; with directed submucosal the ASC standard ratesetting
in proposed changes to ASC payment injection(s), any substance), or 43239 methodology. In the CY 2019 OPPS/
indicators for some covered ancillary (Esophagogastroduodenoscopy, flexible, ASC final rule with comment period (83
services because of changes that are transoral; with biopsy, single or FR 59028 through 59080), we updated
being proposed under the OPPS for CY multiple), or other surgical procedures. the CY 2018 ASC payment rates for ASC
2020. For example, if a covered Therefore, we are not adding CPT code covered surgical procedures with
ancillary service was separately paid 91040 to the list of ASC covered payment indicators of ‘‘A2’’, ‘‘G2’’, and
under the ASC payment system in CY ancillary services for CY 2020. ‘‘J8’’ using CY 2017 data, consistent
2019, but is proposed for packaged All ASC covered ancillary services with the CY 2019 OPPS update. We also
status under the CY 2020 OPPS, to and their proposed payment indicators updated payment rates for device-
maintain consistency with the OPPS, we for CY 2020 are included in Addendum intensive procedures to incorporate the
would also propose to package the BB to the CY 2020 OPPS/ASC proposed CY 2019 OPPS device offset percentages
ancillary service under the ASC rule (which is available via the internet calculated under the standard APC
payment system for CY 2020. We on the CMS website). ratesetting methodology, as discussed
proposed to continue this reconciliation earlier in this section.
of packaged status for subsequent D. Update and Payment for ASC Payment rates for office-based
calendar years. Comment indicator Covered Surgical Procedures and procedures (payment indicators ‘‘P2’’,
‘‘CH’’, which is discussed in section Covered Ancillary Services ‘‘P3’’, and ‘‘R2’’) are the lower of the
XIII.F. of the CY 2020 OPPS/ASC 1. ASC Payment for Covered Surgical PFS nonfacility PE RVU-based amount
proposed rule, is used in Addendum BB Procedures or the amount calculated using the ASC
to the CY 2020 OPPS/ASC proposed standard rate setting methodology for
rule (which is available via the internet a. Background the procedure. In the CY 2018 OPPS/
on the CMS website) to indicate covered Our ASC payment policies for ASC final rule with comment period, we
ancillary services for which we covered surgical procedures under the updated the payment amounts for
proposed a change in the ASC payment revised ASC payment system are fully office-based procedures (payment
indicator to reflect a proposed change in described in the CY 2008 OPPS/ASC indicators ‘‘P2’’, ‘‘P3’’, and ‘‘R2’’) using
the OPPS treatment of the service for CY final rule with comment period (72 FR the most recent available MPFS and
2020. 66828 through 66831). Under our OPPS data. We compared the estimated
Comment: One commenter requested established policy, we use the ASC CY 2018 rate for each of the office-based
that we add CPT code 91040 standard ratesetting methodology of procedures, calculated according to the
(Esophageal balloon distension study, multiplying the ASC relative payment ASC standard rate setting methodology,
diagnostic, with provocation when weight for the procedure by the ASC to the PFS nonfacility PE RVU-based
performed) to our list of covered conversion factor for that same year to amount to determine which was lower
ancillary services. Commenter stated calculate the national unadjusted and, therefore, would be the CY 2018
that esophageal balloon distension payment rates for procedures with payment rate for the procedure under
studies are often performed in payment indicators ‘‘G2’’ and ‘‘A2’’. our final policy for the revised ASC
conjunction with Payment indicator ‘‘A2’’ was developed payment system (§ 416.171(d)).
esophagogastroduodenoscopy to identify procedures that were In the CY 2014 OPPS/ASC final rule
procedures. included on the list of ASC covered with comment period (78 FR 75081), we
Response: Services listed in our list of surgical procedures in CY 2007 and, finalized our proposal to calculate the
covered ancillary services must be therefore, were subject to transitional CY 2014 payment rates for ASC covered
integral to the performance of a covered payment prior to CY 2011. Although the surgical procedures according to our
surgical procedure. Based on the 4-year transitional period has ended and established methodologies, with the
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description of the procedure, we do not payment indicator ‘‘A2’’ is no longer exception of device removal procedures.
For CY 2014, we finalized a policy to to update the payment amount for the XIII.C.1.A of this final rule with
conditionally package payment for service portion of the device-intensive comment period.
device removal procedures under the procedures using the ASC standard rate Comment: Several commenters
OPPS. Under the OPPS, a conditionally setting methodology and the payment disagreed with the proposed CY 2020
packaged procedure (status indicators amount for the device portion based on ASC payment rates for the surgical
‘‘Q1’’ and ‘‘Q2’’) describes a HCPCS the proposed CY 2020 OPPS device procedures described by the following
code where the payment is packaged offset percentages that have been CPT/HCPCS codes, requesting that CMS
when it is provided with a significant calculated using the standard OPPS increase payment in the ASC setting:
procedure but is separately paid when APC ratesetting methodology. Payment • HCPCS code C9754 (Creation of
the service appears on the claim without for office-based procedures would be at arteriovenous fistula, percutaneous;
a significant procedure. Because ASC the lesser of the proposed CY 2020 direct, any site, including all imaging
services always include a covered MPFS nonfacility PE RVU-based and radiologic supervision and
surgical procedure, HCPCS codes that amount or the proposed CY 2020 ASC interpretation, when performed and
are conditionally packaged under the payment amount calculated according secondary procedures to redirect blood
OPPS are always packaged (payment to the ASC standard ratesetting flow)
indicator ‘‘N1’’) under the ASC payment methodology. • HCPCS code C9755 (Creation of
system. Under the OPPS, device As we did for CYs 2014 through 2019, arteriovenous fistula, percutaneous
removal procedures are conditionally for CY 2020, we proposed to continue using magnetic-guided arterial and
packaged and, therefore, would be our policy for device removal venous catheters and radiofrequency
packaged under the ASC payment procedures, such that device removal energy, including flow-directing
system. There would be no Medicare procedures that are conditionally procedures (for example, vascular coil
payment made when a device removal packaged in the OPPS (status indicators embolization with radiologic
procedure is performed in an ASC ‘‘Q1’’ and ‘‘Q2’’) would be assigned the supervision and interpretation, when
without another surgical procedure current ASC payment indicators performed) and fistulogram(s),
included on the claim; therefore, no associated with these procedures and angiography, venography, and/or
Medicare payment would be made if a would continue to be paid separately ultrasound, with radiologic supervision
device was removed but not replaced. under the ASC payment system. and interpretation, when performed)
To ensure that the ASC payment system Our responses to the comments are set • CPT code 37243 (Vascular
provides separate payment for surgical forth below. embolization or occlusion, inclusive of
procedures that only involve device Comment: We received several all radiological supervision and
removal—conditionally packaged in the comments from professional societies interpretation, intraprocedural
OPPS (status indicator ‘‘Q2’’)—we expressing concern about assigning CPT roadmapping, and imaging guidance
continued to provide separate payment codes 36465, 36466, and 31298 to a P2 necessary to complete the intervention;
since CY 2014 and assigned the current payment indicator and CPT code 36482 for tumors, organ ischemia, or
ASC payment indicators associated with to a P3 payment indicator. Commenters infarction)
these procedures. also expressed concerns with the • CPT code 53854 (Transurethral
appropriateness of the ASC payment destruction of prostate tissue by
b. Update to ASC Covered Surgical policy to assign procedures to the radiofrequency generated water vapor
Procedure Payment Rates for CY 2020 lowest published payment rate across thermotherapy)
We proposed to update ASC payment multiple payment systems, based upon • CPT code 22869 (Insertion of
rates for CY 2020 and subsequent years CMS’s determination that the level of interlaminar/interspinous process
using the established rate calculation complexity for a procedure is consistent stabilization/distraction device, without
methodologies under § 416.171 and with procedures performed in a open decompression or fusion,
using our definition of device-intensive physician’s office. Commenters agreed including image guidance when
procedures, as discussed in section with the proposal not designate CPT performed, lumbar; single level)
XII.C.1.b. of the CY 2020 OPPS/ASC code 36902 as an office-based procedure • CPT code 22870 (Insertion of
proposed rule. Because the proposed and continue to assign CPT code 36902 interlaminar/interspinous process
OPPS relative payment weights are a payment indicator of ‘‘G2’’— stabilization/distraction device, without
generally based on geometric mean nonoffice-based surgical procedure paid open decompression or fusion,
costs, the ASC system would generally based on OPPS relative weights. including image guidance when
use geometric means to determine Response: We appreciate the performed, lumbar; second level (List
proposed relative payment weights commenters’ input. Based on our separately in addition to code for
under the ASC standard methodology. analysis of the latest hospital outpatient primary procedure)
We proposed to continue to use the and ASC claims data used for this final Response: We update the data on
amount calculated under the ASC rule with comment period, we are which we establish payment rates each
standard ratesetting methodology for updating ASC payment rates for CY year through rulemaking and note that
procedures assigned payment indicators 2020 using the established rate ASC rates are derived from OPPS
‘‘A2’’ and ‘‘G2’’. calculation methodologies under payment rates which are required to be
We proposed to calculate payment § 416.171 of the regulations and using reviewed and updated at least annually
rates for office-based procedures our finalized modified definition of under section 1833(t)(9) of the Act. ASC
(payment indicators ‘‘P2’’, ‘‘P3’’, and device-intensive procedures, as payment is dependent upon the APC
‘‘R2’’) and device-intensive procedures discussed in section XIII.C.1.b of this assignment for each procedure. Based
(payment indicator ‘‘J8’’) according to final rule with comment period. We do on our analysis of the latest hospital
our established policies and, for device- not generally make additional payment OPPS and ASC claims data used for this
intensive procedures, using our adjustments to specific procedures. As final rule with comment period, we are
modified definition of device-intensive such, we are finalizing the proposed updating ASC payment rates for CY
procedures, as discussed in section APC assignment and payment indicators 2020 using the established rate
XII.C.1.b. of the CY 2020 OPPS/ASC for CPT codes 36465, 36466, 31298, calculation methodologies under
proposed rule. Therefore, we proposed 36482, and 36902 as discussed in § 416.171 of the regulations and our
definition of device-intensive methodology. However, for low-volume given that the outpatient hospital setting
procedures, as discussed in section device-intensive procedures, the is generally considered to have higher
XII.C.1.b. of this CY 2020 OPPS/ASC proposed relative payment weights are costs than the ASC setting and that the
final rule with comment period. We do based on median costs, rather than payment rates for both settings are based
not generally make additional payment geometric mean costs, as discussed in on hospital outpatient cost data, we do
adjustments to specific procedures. section IV.B.5. of the CY 2020 OPPS/ not believe there should be a scenario
Therefore, we are finalizing the payment ASC proposed rule. where the payment rate for a low-
indicators for HCPCS codes C9754 and While we believe this policy generally volume device-intensive procedure
C9755 and CPT codes 37243, 53854, helps to provide more appropriate under the ASC payment system is
22869, and 22870 for CY 2020. payment for low-volume device- significantly greater than payment
Comment: One commenter intensive procedures, these procedures under the OPPS.
recommended that CMS eliminate the can still have data anomalies as a result Therefore, for CY 2020 and
prohibition against billing for services of the limited data available for these subsequent years, we proposed to limit
using an unlisted CPT surgical procedures in our ratesetting process. the ASC payment rate for low-volume
procedure code. For the Level 5 Intraocular APC, which device-intensive procedures to a
Response: Under § 416.166(c)(7), includes only HCPCS code 0308T (insj payment rate equal to the OPPS
covered surgical procedures do not ocular telescope prosth), based on the payment rate for that procedure. Under
include procedures that can only be CY 2018 claims data available for the this proposal, where the ASC payment
reported using a CPT unlisted surgical proposed rule, the geometric mean cost rate based on the standard ASC
procedure code. Therefore, such and median cost under the standard ratesetting methodology for low volume
procedures are not currently payable ASC ratesetting methodology is device-intensive procedures would
under the ASC payment system. As $67,946.51 and $111,019.30, exceed the rate paid under the OPPS for
discussed in the August 2, 2008 final respectively. As described in section the same procedure, we proposed to
rule (72 FR 42484 through 42486), it is IV.B.5. of the CY 2020 OPPS/ASC establish an ASC payment rate for such
not possible to know what specific proposed rule, a device-intensive procedures equal to the OPPS payment
procedure would be represented by an procedure that is assigned to a clinical rate for the same procedure. In the CY
unlisted code. We are required to APC with fewer than 100 total claims 2020 OPPS/ASC proposed rule, we
evaluate each surgical procedure for for all procedures is considered ‘‘low- noted that this policy would only affect
potential safety risk and the expected volume’’ and the cost of the procedure HCPCS code 0308T, which has very low
need for overnight monitoring and to is based on calculations using the APC’s claims volume (7 claims used for
exclude such procedures from ASC median cost instead of the APC’s ratesetting in the OPPS). We proposed
payment. It is not possible to evaluate geometric mean cost. Since this APC to amend § 416.171(b) of the regulations
procedures reported by unlisted CPT meets the criteria for low-volume to reflect the proposed new limit on
codes according to these criteria. device-intensive procedure designation, ASC payment rates for low-volume
Therefore, we are not accepting this the ASC relative weight would be based device-intensive procedures. CMS’
recommendation. on the median cost rather than the existing regulation at § 416.171(b)(2)
After consideration of the public geometric mean cost. We note that this requires the payment of the device
comments we received, we are median cost for this APC is significantly portion of a device-intensive procedure
finalizing our proposed policies without higher than either the OPPS geometric at an amount derived from the payment
modification, to calculate the CY 2020 mean cost or median cost based on the rate for the equivalent item under the
payment rates for ASC covered surgical OPPS comprehensive ratesetting OPPS using our standard ratesetting
procedures according to our established methodology, which are $28,122.51 and methodology. We proposed to add
methodologies using the modified $19,269.55, respectively. This very large paragraph (b)(4) to § 416.171 to require
definition of device-intensive difference in cost calculations between that, notwithstanding paragraph (b)(2),
procedures. For covered office-based these two settings is largely attributable low volume device-intensive procedures
surgical procedures, the payment rate is to the APC’s low claims volume and to where the otherwise applicable payment
the lesser of the final CY 2020 MPFS the comprehensive methodology used rate calculated based on the standard
nonfacility PE RVU-based amount or the under the OPPS which is not utilized in methodology for device-intensive
final CY 2020 ASC payment amount ratesetting under the ASC payment procedures would exceed the payment
calculated according to the ASC system. The cost calculation for this rate for the equivalent procedure set
standard ratesetting methodology, the APC under the ASC payment system is under the OPPS, the payment rate for
final payment indicators and rates set primarily based on charges from one the procedure under the ASC payment
forth in this final rule with comment hospital with a significantly higher system would be equal to the payment
period are based on a comparison using device cost center cost-to-charge ratio rate for the same procedure under the
the PFS PE RVUs and the conversion and significantly higher charges when OPPS.
factor effective January 1, 2020. For a compared to other hospitals providing Covered surgical procedures and their
discussion of the PFS rates, we refer the procedure. proposed payment rates for CY 2020 are
readers to the CY 2020 PFS final rule If the ASC payment system were to listed in Addendum AA of the CY 2020
with comment period. base the CY 2020 payment rate for OPPS/ASC proposed rule (which is
HCPCS code 0308T on the median cost available via the internet on the CMS
c. Limit on ASC Payment Rates for Low of $111,019.30, the ASC payment rate website).
Volume Device-Intensive Procedures would be several times greater than the Comment: One commenter requested
As stated in section XIII.D.1.b. of the OPPS payment rate for HCPCS code that CMS consider adopting a consistent
CY 2020 OPPS/ASC proposed rule, the 0308T. We note that the median cost payment methodology for low volume
ASC payment system generally uses under the OPPS ratesetting methodology procedures, regardless of whether a
OPPS geometric mean costs under the based on CY 2018 claims data is closer procedure is assigned to a clinical or
standard methodology to determine to the historical average for the median New Technology APC. The commenter
proposed relative payment weights cost of HCPCS code 0308T noted that 0308T is one of only two
under the standard ASC ratesetting (approximately $19,000). In addition, procedures to which CMS has applied
either of the low volume payment have fewer than 100 total claims than a packaged under the OPPS. However, as
methodologies. The commenter new technology APC. discussed in section XIII.D.3. of the CY
suggested CMS could determine the After consideration of the public 2020 OPPS/ASC proposed rule, for CY
payment rate for low volume, device- comment we received, we are finalizing 2019, we finalized a policy to
intensive procedures in clinical APCs our proposed policy without unpackage and pay separately at ASP +
by using 4 years of claims data and modification, to limit the ASC payment 6 percent for the cost of non-opioid pain
gathering input through the public rate for a low-volume device-intensive management drugs that function as
comment period on whether arithmetic procedure to a payment rate equal to the surgical supplies when furnished in the
mean, geometric mean, or median OPPS payment rate for that procedure, ASC setting, even though payment for
should be the basis for the payment including our proposed regulation text these drugs continues to be packaged
amount. at § 416.171(b)(4). under the OPPS. We generally pay for
Response: We appreciate the separately payable radiology services at
2. Payment for Covered Ancillary the lower of the PFS nonfacility PE
stakeholder’s comments regarding Services
changes in estimated costs based on the RVU-based (or technical component)
claims data available for ratesetting. In a. Background amount or the rate calculated according
our CY 2017 OPPS/ASC final rule with Our payment policies under the ASC to the ASC standard ratesetting
comment period (81 FR 79660 through payment system for covered ancillary methodology (72 FR 42497). However,
79661), we finalized our policy that the services generally vary according to the as finalized in the CY 2011 OPPS/ASC
payment rate for any device-intensive particular type of service and its final rule with comment period (75 FR
procedure that is assigned to a clinical payment policy under the OPPS. Our 72050), payment indicators for all
APC with fewer than 100 total claims overall policy provides separate ASC nuclear medicine procedures (defined
for all procedures in the APC be payment for certain ancillary items and as CPT codes in the range of 78000
calculated using the median cost instead through 78999) that are designated as
services integrally related to the
of the geometric mean cost. We believe radiology services that are paid
provision of ASC covered surgical
using the median cost instead of the separately when provided integral to a
procedures that are paid separately
geometric mean cost has generally surgical procedure on the ASC list are
under the OPPS and provides packaged
provided an appropriate payment for set to ‘‘Z2’’ so that payment is made
ASC payment for other ancillary items
low-volume device-intensive based on the ASC standard ratesetting
and services that are packaged or
procedures in cases where there are no methodology rather than the MPFS
conditionally packaged (status
data anomalies. However, we note that nonfacility PE RVU amount (‘‘Z3’’),
indicators ‘‘N’’, ‘‘Q1’’, and ‘‘Q2’’) under
we are adding paragraph (b)(4) to regardless of which is lower (42 CFR
the OPPS. In the CY 2013 OPPS/ASC
§ 416.171 to require that, 416.171(d)(1)).
rulemaking (77 FR 45169 and 77 FR Similarly, we also finalized our policy
notwithstanding paragraph (b)(2), low 68457 through 68458), we further to set the payment indicator to ‘‘Z2’’ for
volume device-intensive procedures clarified our policy regarding the radiology services that use contrast
where the otherwise applicable ASC payment indicator assignment of agents so that payment for these
payment rate calculated based on the procedures that are conditionally procedures will be based on the OPPS
standard methodology for device- packaged in the OPPS (status indicators relative payment weight using the ASC
intensive procedures would exceed the ‘‘Q1’’ and ‘‘Q2’’). Under the OPPS, a standard ratesetting methodology and,
payment rate for the equivalent conditionally packaged procedure therefore, will include the cost for the
procedure set under the OPPS, the describes a HCPCS code where the contrast agent (§ 416.171(d)(2)).
payment rate for the procedure under payment is packaged when it is ASC payment policy for
the ASC payment system would be provided with a significant procedure brachytherapy sources mirrors the
equal to the payment rate for the same but is separately paid when the service payment policy under the OPPS. ASCs
procedure under the OPPS to address appears on the claim without a are paid for brachytherapy sources
such data anomalies in the future. significant procedure. Because ASC provided integral to ASC covered
Additionally, as we noted in our CY services always include a surgical surgical procedures at prospective rates
2020 OPPS/ASC proposed rule (84 FR procedure, HCPCS codes that are adopted under the OPPS or, if OPPS
39453–39454), one of the objectives of conditionally packaged under the OPPS rates are unavailable, at contractor-
establishing New Technology APCs is to are generally packaged (payment priced rates (72 FR 42499). Since
generate sufficient claims data for a new indictor ‘‘N1’’) under the ASC payment December 31, 2009, ASCs have been
procedure so that it can be assigned to system (except for device removal paid for brachytherapy sources provided
an appropriate clinical APC. In cases procedures, as discussed in section IV. integral to ASC covered surgical
where procedures are assigned to New of the CY 2020 OPPS/ASC proposed procedures at prospective rates adopted
Technology APCs have very low annual rule). Thus, our policy generally aligns under the OPPS.
volume, we may use up to 4 years of ASC payment bundles with those under Our ASC policies also provide
claims data in calculating the applicable the OPPS (72 FR 42495). In all cases, in separate payment for: (1) Certain items
payment rate for the prospective year. order for those ancillary services also to and services that CMS designates as
We believe our payment policy for low- be paid, ancillary items and services contractor-priced, including, but not
volume new technology procedures must be provided integral to the limited to, the procurement of corneal
provides an appropriate payment for performance of ASC covered surgical tissue; and (2) certain implantable items
new technology procedures so that they procedures for which the ASC bills that have pass-through payment status
may be assigned to an appropriate Medicare. under the OPPS. These categories do not
clinical APC in the future. Further, we Our ASC payment policies generally have prospectively established ASC
believe this payment policy should only provide separate payment for drugs and payment rates according to ASC
be applicable to procedures assigned to biologicals that are separately paid payment system policies (72 FR 42502
New Technology APCs and not to all under the OPPS at the OPPS rates and and 42508 through 42509; § 416.164(b)).
clinical APCs since we believe it would package payment for drugs and Under the ASC payment system, we
be less common for a clinical APC to biologicals for which payment is have designated corneal tissue
acquisition and hepatitis B vaccines as include a reference to diagnostic 3. CY 2020 ASC Packaging Policy for
contractor-priced. Corneal tissue services. Non-Opioid Pain Management
acquisition is contractor-priced based Treatments
on the invoiced costs for acquiring the b. Payment for Covered Ancillary
Services for CY 2020 In the CY 2019 OPPS/ASC final rule
corneal tissue for transplantation. with comment period (83 FR 59066
Hepatitis B vaccines are contractor- We proposed to update the ASC through 59072), we finalized the policy
priced based on invoiced costs for the payment rates and to make changes to to unpackage and pay separately at
vaccine. ASC payment indicators, as necessary, ASP+6 percent for the cost of non-
Devices that are eligible for pass- to maintain consistency between the opioid pain management drugs that
through payment under the OPPS are OPPS and ASC payment system function as surgical supplies when they
separately paid under the ASC payment regarding the packaged or separately are furnished in the ASC setting for CY
system and are contractor-priced. Under payable status of services and the 2019. We also finalized conforming
the revised ASC payment system (72 FR proposed CY 2020 OPPS and ASC changes to § 416.164(a)(4) to exclude
42502), payment for the surgical payment rates and subsequent year non-opioid pain management drugs that
procedure associated with the pass- payment rates. We also proposed to function as a supply when used in a
through device is made according to our continue to set the CY 2020 ASC surgical procedure from our policy to
standard methodology for the ASC payment rates and subsequent year package payment for drugs and
payment system, based on only the payment rates for brachytherapy sources biologicals for which separate payment
service (non-device) portion of the and separately payable drugs and is not allowed under the OPPS into the
procedure’s OPPS relative payment biologicals equal to the OPPS payment ASC payment for the covered surgical
weight if the APC weight for the rates for CY 2020 and subsequent year procedure. We added a new
procedure includes other packaged payment rates. § 416.164(b)(6) to include non-opioid
device costs. We also refer to this pain management drugs that function as
methodology as applying a ‘‘device We note that stakeholders requested
a supply when used in a surgical
offset’’ to the ASC payment for the that we propose to add CPT code 91040
procedure as covered ancillary services
associated surgical procedure. This (Esophageal balloon distension study,
that are integral to a covered surgical
ensures that duplicate payment is not diagnostic, with provocation when
procedure. Finally, we finalized a
provided for any portion of an performed) to the ASC Covered
change to § 416.171(b)(1) to exclude
implanted device with OPPS pass- Procedures List (CPL) and ASC list of
non-opioid pain management drugs that
through payment status. covered ancillary services as it is
function as a supply when used in a
In the CY 2015 OPPS/ASC final rule integral to the performance of covered
surgical procedure from our policy to
with comment period (79 FR 66933 surgical procedures such as CPT code pay for ASC covered ancillary services
through 66934), we finalized that, 43235 (Esophagogastroduodenoscopy, an amount derived from the payment
beginning in CY 2015, certain diagnostic flexible, transoral; diagnostic, including rate for the equivalent item or service
tests within the medicine range of CPT collection of specimen(s) by brushing or set under the OPPS.
codes for which separate payment is washing, when performed (separate In the CY 2019 OPPS/ASC final rule
allowed under the OPPS are covered procedure)) and 43239 with comment period, we noted that we
ancillary services when they are integral (Esophagogastroduodenoscopy, flexible, will continue to analyze the issue of
to an ASC covered surgical procedure. transoral; with biopsy, single or access to non-opioid alternatives in the
We finalized that diagnostic tests within multiple). Based on available data and OPPS and ASC settings as we
the medicine range of CPT codes other information related to CPT code implement section 6082 of the
include all Category I CPT codes in the 91040, we do not believe this diagnostic Substance Use–Disorder Prevention that
medicine range established by CPT, test is integral to the covered surgical Promotes Opioid Recovery and
from 90000 to 99999, and Category III procedures of CPT codes 43235 or Treatment for Patients and Communities
CPT codes and Level II HCPCS codes 43239. Therefore, we did not propose to Act (SUPPORT for Patients and
that describe diagnostic tests that add CPT code 91040 as a covered Communities Act or SUPPORT Act)
crosswalk or are clinically similar to ancillary service. (Pub. L. 115–271), enacted on October
procedures in the medicine range Covered ancillary services and their 24, 2018. We also discussed our policy
established by CPT. In the CY 2015 proposed payment indicators for CY to unpackage and pay separately at
OPPS/ASC final rule with comment 2020 are listed in Addendum BB of the ASP+6 percent for the cost of non-
period, we also finalized our policy to CY 2020 OPPS/ASC proposed rule opioid pain management drugs that
pay for these tests at the lower of the (which is available via the internet on function as surgical supplies when
PFS nonfacility PE RVU-based (or the CMS website). For those covered furnished in the ASC setting in section
technical component) amount or the ancillary services where the payment II.A.3.b. of the CY 2019 OPPS/ASC final
rate calculated according to the ASC rate is the lower of the proposed rates rule with comment period (83 FR 58854
standard ratesetting methodology (79 FR under the ASC standard rate setting through 58860). As required under
66933 through 66934). We finalized that methodology and the PFS final rates, the section 6082(b) of the SUPPORT Act, we
the diagnostic tests for which the proposed payment indicators and rates will continue to review and revise ASC
payment is based on the ASC standard set forth in the proposed rule are based payments for non-opioid alternatives for
ratesetting methodology be assigned to on a comparison using the proposed pain management, as appropriate. For
payment indicator ‘‘Z2’’ and revised the PFS rates effective January 1, 2020. For more information on our
definition of payment indicator ‘‘Z2’’ to a discussion of the PFS rates, we refer implementation of section 6082 of the
include a reference to diagnostic readers to the CY 2020 PFS proposed SUPPORT for Patients and Communities
services and those for which the rule, which is available on the CMS Act and related proposals, we refer
payment is based on the PFS nonfacility website at: https://www.cms.gov/ readers to section II.A.3.b. of the CY
PE RVU-based amount be assigned Medicare/Medicare-Fee-for-Service- 2020 OPPS/ASC proposed rule.
payment indicator ‘‘Z3,’’ and revised the Payment/PhysicianFeeSched/PFS- The comments and our responses are
definition of payment indicator ‘‘Z3’’ to Federal-Regulation-Notices.html. set forth below.
Comment: Multiple commenters, enough financial incentive for providers received pass-through status for a 3-year
including individual stakeholders, to use Prialt in their patients compared period from 2015 to 2017. After
hospital and physician groups, national to lower cost opioids. Commenters expiration of its pass-through status, it
medical associations, device claimed that Prialt is only paid at was packaged under both the OPPS and
manufacturers, and groups representing invoice costs, which they believe ASC payment system. Subsequently,
the pharmaceutical industry, supported discourages provider use. Omidria’s pass-through status under the
the proposal to continue unpackage and Response: We thank commenters for OPPS was reinstated in October 2018
pay separately for the cost of non-opioid their feedback and for their support of through September 30, 2020 as required
pain management drugs that function as the continued assignment of status by section 1833(t)(6)(G) of the Act, as
surgical supplies, such as Exparel, in indicator ‘‘K’’ to HCPCS J2278. The added by section 1301(a)(1)(C) of the
the ASC setting for CY 2020. These corresponding ASC payment indicator Consolidated Appropriations Act of
commenters believed that packaged for HCPCS J2278 would be ‘‘K2’’. Prialt 2018 (Pub. L. 115–141), which means
payment for non-opioid alternatives is paid at its average sales price (ASP) that Omidria continues to be paid
presents a barrier to care and that plus 6 percent according to the ASP separately under the ASC payment
separate payment for non-opioid pain methodology under the OPPS, and system through September 30, 2020.
management drugs would be an therefore, is also paid at ASP plus 6 While our analysis supports the
appropriate response to the opioid drug percent in the ASC setting. We note that commenter’s assertion that there was a
abuse epidemic. under 1833(a)(1)(G) of the Act, the decrease in the utilization of Omidria in
Other commenters, including payment is subject to applicable 2018 following its pass-through
MedPAC, did not support this proposal deductible and coinsurance, and we are expiration, we note that there could be
and stated that the policy was counter unaware of statutory authority to alter many reasons that utilization declines
to the OPPS packaging policies created beneficiary coinsurance for payments after the pass-through period, including
to increase the size of payment bundles made in the ASC setting. We note that the availability of other alternatives on
in the OPPS, which increases incentives because the dollar value of beneficiary the market (many of which had been
for efficient delivery of care. MedPAC coinsurance is directly proportionate to used for several years before Omidria
noted that they prefer a policy that the payment rate (which is ASP+6 came on the market and are sold for a
maintains the packaging of drugs that percent for HCPCS code J2278), a lower lower price), the lack of separate
function as supplies in surgical sales price for the drug (which would payment being available, or physician
procedures. lead to a lower Medicare payment rate preference.
Response: We appreciate these under the current policy) would be Further, our clinical advisors’ review
comments. After reviewing the necessary for beneficiaries to have a of the clinical evidence submitted
information provided by the lower coinsurance amount. concluded that the study the commenter
commenters, we continue to believe the Comment: Many commenters submitted was not sufficiently
separate payment is appropriate for non- requested that the drug Omidria (HCPCS compelling or authoritative to overcome
opioid pain management drugs that code C9447, injection, phenylephrine contrary evidence. Moreover, the results
function as surgical supplies when ketorolac), be excluded from the of a CMS analysis of cataract procedures
furnished in the ASC setting for CY packaging policy once its pass-through performed on Medicare beneficiaries in
2020. We note that preliminary data status expires on September 30, 2020. the OPPS between January 2015 and
suggest that utilization of Exparel has Omidria is indicated for maintaining July 2019 comparing procedures
increased significantly in the ASC pupil size by preventing intraoperative performed with Omidria to procedures
setting in 2019. We intend to continue miosis and reducing postoperative performed without Omidria did not
to monitor Exparel utilization in the ocular pain in cataract or intraocular demonstrate a significant decrease in
ASC setting and monitor whether there surgeries. The commenters stated that fentanyl utilization during the cataract
is an associated decrease under Part B the available data and multiple peer- surgeries in the OPPS when Omidria
or D in opioids once more data are reviewed articles on Omidria support was used. Our findings also did not
available. the packaging exclusion. Commenters suggest any decrease in opioid
Comment: Several commenters asserted the use of Omidria decreases utilization post-surgery for procedures
supported the assignment of status patients’ need for fentanyl during involving Omidria. As a result, we do
indicator ‘‘K’’ (Nonpass-Through Drugs surgeries and another commenter not have compelling evidence to
and Nonimplantable Biologicals, believes that Omidria reduces opioid exclude Omidria from packaging after
Including Therapeutic use after cataract surgeries. In addition, its current pass-through expires on
Radiopharmaceuticals) and continuing commenters asserted that the OPPS and September 30, 2020. While we were not
to pay separately for the drug Prialt ASC payment system do not address the able to perform similar analysis using
(HCPCS J2278, injection, ziconitide), a cost of packaged products used by small ASC data, we expect that the results
non-narcotic pain reliever administered patient populations. Therefore, the may be similar. We will continue to
via intrathecal injection. The OPPS and ASC payment structures for analyze the evidence and monitor
commenters discussed data indicating packaged supplies creates an access utilization of this drug.
that Prialt potentially could lower barrier and patients are forced to use Comment: One commenter requested
opioid use, including opioids such as inferior products that have increased that MKO Melt, a non FDA-approved,
morphine. In addition to continued complication risk and require the compounded drug comprised of
separate payment, several commenters continued use of opioids to manage midazolam/ketamine/ondansetron for
recommended CMS reduce or eliminate pain. One commenter referenced the exclusion from the packaging policy per
the coinsurance for the drug in order to results of a study that Omidria reduces section 1833(t)(22)(A)(i) of the Act. The
increase beneficiary access. The the need for opioids during cataract commenter contended that MKO Melt is
commenters noted due to the drug’s surgery by nearly 80 percent while a drug functioning as surgical supply in
significant cost, the 20 percent decreasing pain scores by more than 50 the ASC setting. The commenter
coinsurance would put the drug out of percent. provided a reference to a study titled,
reach for beneficiaries. Additionally, the Response: We thank commenters for ‘‘Anesthesia for opioid addicts:
commenters discussed that there is not their feedback on Omidria. Omidria Challenges for perioperative physician’’
by Goyal et al., on the need for pain Response: We appreciate the continuum, suggesting CMS develop
management in the opioid-dependent commenter’s suggestion. We examined additional education and outreach
patient. The commenter also referenced the data for A4306 and noted an overall efforts and incentives for appropriate
a review article, ‘‘Perioperative trend of increasing utilization from CY referrals of patients with chronic pain to
Management of Acute Pain in the 2014 through CY 2017. Additionally, comprehensive pain management
Opioid-dependent Patient,’’ by Mitra et the geometric mean cost for A4306 was practices for consultation and
al., on the special needs of opioid- approximately $30 each year during that evaluation prior to the administration of
dependent patients in surgeries and the four-year period. We acknowledge that opioids. The commenter suggested that
potential opioid relapse in those use of these items may help in the CMS could provide alerts to providers
patients who are recovering from opioid reduction of opioid use. However, we regarding the benefits of pain
use disorder. Additionally, the note that packaged payment of such an management consultation with a
commenter referenced a clinical trial item does not prevent the use of these qualified pain management professional
registered in clinicaltrials.gov items. We do not believe that the prior to the administration of opioids for
(NCT03653520) that supports sublingual current utilization trends for HCPCS chronic conditions.
MKO Melt for use during cataract code A4306 in the ASC setting suggest Another commenter asserted that the
surgeries to replace opioids. The study that the packaged payment is preventing standard endpoints, such as a greater
looked at 611 patients that were divided use and remind readers that payment for than 50 percent reduction in pain, that
into three arms: (1) MKO melt arm, (2) packaged items is included in the are used to determine if a
diazepam/tramadol/ondansetron arm, payment for the primary service. We neuromodulation-based non-opioid pain
(3) diazepam only arm. The study share the commenter’s concern about alternative therapy is effective are well-
concluded that the MKO melt arm had the need to reduce opioid use and will established and validated in all types of
the lowest incidence for supplemental take the commenter’s suggestion clinical trials and that CMS should
injectable anesthesia to control pain. regarding the need for separate payment establish a general, national coverage
Response: We thank the commenter for HCPCS code A4306 in the ASC determination for neuromodulation-
for the comment. Based on information setting into consideration for future based non-opioid pain therapy based on
submitted, we are not able to validate rulemaking. these endpoints, rather than taking the
that MKO Melt reduces the use of Comment: Multiple commenters time to create and process specific
opioids. We note that ketamine, one identified other non-opioid pain national coverage determinations or
management alternatives that they local coverage determinations. The
component of MKO melt, exhibits some
believe decrease the dose, duration, commenter suggested that this would be
addictive properties. Moreover, we did
and/or number of opioid prescriptions a much faster and streamlined process
not identify any evidence that MKO
beneficiaries receive during and for enhancing Medicare beneficiary
Melt is effective for patients with a prior
following an outpatient visit or access to neuromodulation-based pain
opioid addiction nor did we receive any
procedure (especially for beneficiaries at management therapies.
data demonstrating that the current ASC One manufacturer of a high-frequency
high-risk for opioid addiction) and may
packaging policy incentivized providers SCS device stated that additional
warrant separate payment for CY 2020.
to use opioids over MKO Melt. In payment was warranted for non-opioid
Commenters representing various
accordance with section 1833(i)(8) of pain management treatments because
stakeholders requested separate
the Act, the fact that there is no HPCPS payments for various non-opioid pain they provide an alternative treatment
code for the drug, and lack of FDA management treatments, such as option to opioids for patients with
approval, we were not able to identify continuous nerve blocks chronic leg or back pain. The
any compelling evidence that MKO Melt (neuromodulation, radiofrequency commenter provided supporting studies
should be excluded from packaged ablation, implants for lumbar stenosis, which claimed that patients treated with
payment. protocols (ERAS®) IV acetaminophen, their high-frequency SCS device
Comment: Several commenters, IV ibuprofen, Polar ice devices for reported a statistically significant
including individual physicians, postoperative pain relief, THC oil, average decrease in opioid use
medical associations, and device acupuncture, and dry needling compared to the control group. This
manufacturers commented supporting procedures. commenter also submitted data that
separate payment for continuous For neuromodulation, several showed a decline in the mean daily
peripheral nerve blocks as they commenters noted that spinal cord dosage of opioid medication taken and
significantly reduce opioid use. One stimulators (SCS) may lead to a that fewer patients were relying on
commenter suggested that CMS provide reduction in the use of opioids for opioids at all to manage their pain when
separate payment for HCPCS code chronic pain patients. One manufacturer they used the manufacturer’s device.
A4306 (Disposable drug delivery of SCS devices commented that SCS Other commenters wrote regarding
system, flow rate of less than 50 ml per provides the opportunity to potentially their personal experiences in regards to
hour) in the hospital outpatient stabilize or decrease opioid usage and radiofrequency ablation for sacral iliac
department setting and the ASC setting that neuromodulation retains its efficacy joints and knees. One commenter
because packaging represents a cost over multiple years. Regarding barriers referenced several studies, one of which
barrier for providers. The commenter to access, the commenter noted that found a decrease in analgesic
contended that continuous nerve block Medicare beneficiaries often do not have medications associated with
procedures have been shown in high access to SCS until after they have radiofrequency ablation; however, it did
quality clinical studies to reduce the use exhausted other treatments, which often not provide evidence regarding a
of opioids, attaching studies for review. includes opioids. The commenter decrease in opioid usage.
They believe that separate payment for presented evidence from observational One national hospital association
A4306 will remove the financial studies that use of SCS earlier in a commenter recommended that while
disincentive for HOPDs and ASCs, patient’s treatment could help reduce ‘‘certainly not a solution to the opioid
encouraging continuous nerve blocks as opioid use while controlling pain, and epidemic, unpackaging appropriate non-
a non-opioid alternative for post- suggested that CMS look for ways to opioid therapies, like Exparel, is a low-
surgical pain management. incorporate SCS earlier in the treatment cost tactic that could change long-
standing practice patterns without major CMS’s assessment that current payment submission of the information that is
negative consequences.’’ This same policies do not represent barriers to found in the guidance document
commenter suggested that Medicare access for certain non-opioid pain entitled ‘‘Application Process and
consider separate payment for IV management alternatives. One Information Requirements for Requests
acetaminophen, IV ibuprofen, and Polar commenter encouraged CMS to provide for a New Class of New Technology
ice devices for postoperative pain relief timely insurance coverage for evidence- Intraocular Lenses (NTIOLs) or
after knee procedures. The commenter informed interventional procedures Inclusion of an IOL in an Existing
also noted that therapeutic massage, early in the course of treatment when NTIOL Class’’ posted on the CMS
topically applied THC oil, acupuncture, clinically appropriate, noting that they website at: http://www.cms.gov/
and dry needling procedures are very hope CMS will reconsider its position Medicare/Medicare-Fee-for-Service-
effective therapies for relief of both and provide mechanisms for separate Payment/ASCPayment/NTIOLs.html.
postoperative pain and long-term and payment and patient access to evidence- • We announce annually, in the
chronic pain. Several other commenters based, FDA approved and cleared proposed rule updating the ASC and
expressed support for IV medical device enabled interventions OPPS payment rates for the following
acetaminophen. that would provide alternatives to calendar year, a list of all requests to
Response: We appreciate the detailed opioid pain management interventions. establish new NTIOL classes accepted
responses from commenters on this Several other commenters encouraged for review during the calendar year in
topic. At this time, we have not found CMS to more broadly evaluate all of its which the proposal is published. In
compelling evidence for other non- packaging policies to help ensure accordance with section 141(b)(3) of
opioid pain management alternatives patient access to appropriate therapies Public Law 103–432 and our regulations
described above to warrant separate and to assess how packaging affects the at § 416.185(b), the deadline for receipt
payment under the OPPS or ASC utilization of a medicine and use the of public comments is 30 days following
payment systems for CY 2020, however results of that evaluation to guide future publication of the list of requests in the
we plan to take these comments and policy development. proposed rule.
suggestions into consideration for future Response: We appreciate the various, • In the final rule updating the ASC
rulemaking. We agree that providing insightful comments we received from and OPPS payment rates for the
incentives to avoid or reduce opioid stakeholders regarding barriers that may following calendar year, we—
prescriptions may be one of several inhibit access to non-opioid alternatives ++ Provide a list of determinations
strategies for addressing the opioid for pain treatment and management in made as a result of our review of all new
epidemic. To the extent that the items order to more effectively address the NTIOL class requests and public
and services mentioned by the opioid epidemic. We will take these comments;
commenters are effective alternatives to comments into consideration for future ++ When a new NTIOL class is
opioid drugs, we encourage providers to consideration. Many of these comments created, identify the predominant
use them when medically appropriate. have been previously addressed characteristic of NTIOLs in that class
We note that some of the items and throughout this section. that sets them apart from other IOLs
services mentioned by commenters are After consideration of the public (including those previously approved as
not covered by Medicare, and we do not comments that we received, we are members of other expired or active
intend to establish payment for finalizing the policy to continue to NTIOL classes) and that is associated
noncovered items and services. We look unpackage and pay separately at ASP + 6 with an improved clinical outcome.
forward to working with stakeholders as percent for the cost of non-opioid pain ++ Set the date of implementation of
we further consider suggested management drugs that function as a payment adjustment in the case of
refinements to the OPPS and the ASC surgical supplies when they are approval of an IOL as a member of a
payment system that will encourage use furnished in the ASC setting for CY new NTIOL class prospectively as of 30
of medically necessary items and 2020 as proposed. We will continue to days after publication of the ASC
services that have demonstrated efficacy analyze the issue of access to non- payment update final rule, consistent
in decreasing opioid prescriptions or opioid alternatives in the OPPS and with the statutory requirement.
opioid abuse or misuse during or after ASC settings as we implement section ++ Announce the deadline for
an outpatient visit or procedure. 6082 of the SUPPORT Act and section submitting requests for review of an
After reviewing the non-opioid pain 1833(i)(8). This policy is also discussed application for a new NTIOL class for
management alternatives suggested by in section II.A.3.b. of this final rule with the following calendar year.
the commenters as well as the studies comment period.
and other data provided to support the 2. Requests To Establish New NTIOL
request for separate payment, we have E. New Technology Intraocular Lenses Classes for CY 2020
not determined that separate payment is (NTIOLs) We did not receive any requests for
warranted at this time for most of the New Technology Intraocular Lenses review to establish a new NTIOL class
non-opioid pain management (NTIOLs) are intraocular lenses that for CY 2020 by March 1, 2019, the due
alternatives discussed above. However, replace a patient’s natural lens that has date published in the CY 2019 OPPS/
we continue to believe the separate been removed in cataract surgery and ASC final rule with comment period (83
payment is appropriate for non-opioid that also meet the requirements listed in FR 59072).
pain management drugs that function as 42 CFR 416.195.
surgical supplies, like Exparel, when 3. Payment Adjustment
furnished in the ASC setting and are 1. NTIOL Application Cycle The current payment adjustment for a
finalizing this policy for CY 2020. Our process for reviewing 5-year period from the implementation
Comment: Several commenters applications to establish new classes of date of a new NTIOL class is $50 per
addressed payment barriers that may NTIOLs is as follows: lens. Since implementation of the
inhibit access to non-opioid pain • Applicants submit their NTIOL process for adjustment of payment
management treatments previously requests for review to CMS by the amounts for NTIOLs in 1999, we have
discussed throughout this section. annual deadline. For a request to be not revised the payment adjustment
Several commenters disagreed with considered complete, we require amount, and we did not proposing to
revise the payment adjustment amount We also created Addendum DD2 that descriptors are included in ASC
for CY 2020. lists the ASC comment indicators. The Addenda AA and BB to this proposed
The comments and our responses to ASC comment indicators included in rule were labeled with proposed
the comments are set forth below. Addenda AA and BB to the proposed comment indicator ‘‘NP’’ to indicate
Comment: Two commenters requested rules and final rules with comment that these CPT and Level II HCPCS
that we re-evaluate our payment period serve to identify, for the revised codes were open for comment as part of
adjustment for new NTIOL class. ASC payment system, the status of a the proposed rule. Proposed comment
Commenters noted that our $50 specific HCPCS code and its payment indicator ‘‘NP’’ meant a new code for
payment adjustment has not been indicator with respect to the timeframe the next calendar year or an existing
adjusted since CY 1999 and that the when comments will be accepted. The code with substantial revision to its
stagnant payment adjustment has been a comment indicator ‘‘NI’’ is used in the code descriptor in the next calendar
barrier to intraocular lens innovation. OPPS/ASC final rule to indicate new year, as compared to current calendar
One commenter requested that the $50 codes for the next calendar year for year; and denoted that comments would
be inflated to 2020 dollars and updated which the interim payment indicator be accepted on the proposed ASC
by inflation in subsequent years. assigned is subject to comment. The payment indicator for the new code.
Another commenter requested that we comment indicator ‘‘NI’’ also is assigned In the CY 2020 OPPS/ASC proposed
updated the $50 payment adjustment to to existing codes with substantial rule, we stated that we would respond
$100, which is the approximate dollar revisions to their descriptors such that to public comments on ASC payment
amount of our $50 payment adjustment we consider them to be describing new and comment indicators and finalize
had we increased the adjustment based services, and the interim payment their ASC assignment in the CY 2020
on the increase in CPI–U for medical indicator assigned is subject to OPPS/ASC final rule with comment
care. comment, as discussed in the CY 2010 period. We referred readers to Addenda
Response: We thank the commenters OPPS/ASC final rule with comment DD1 and DD2 of the CY 2020 OPPS/ASC
for their recommendation. We did not period (74 FR 60622). proposed rule (which are available via
propose revising the payment The comment indicator ‘‘NP’’ is used the internet on the CMS website) for the
adjustment amount for CY 2020. in the OPPS/ASC proposed rule to complete list of ASC payment and
However, we will take commenters indicate new codes for the next calendar comment indicators proposed for the CY
recommendations into consideration in year for which the proposed payment 2020 update. We did not receive any
future rulemaking. indicator assigned is subject to public comments on the ASC payment
After consideration of the public comment. The comment indicator ‘‘NP’’ and comment indicators. Therefore, we
comments we received, we are also is assigned to existing codes with are finalizing their use as proposed
finalizing our proposal to maintain the substantial revisions to their without modification. Addenda DD1
payment adjustment of a new NTIOL descriptors, such that we consider them and DD2 to this final rule with comment
class at $50 per lens for CY 2020 to be describing new services, and the period (which are available via the
without modification. proposed payment indicator assigned is internet on the CMS website) contain
subject to comment, as discussed in the the complete list of ASC payment and
F. ASC Payment and Comment CY 2016 OPPS/ASC final rule with
Indicators comment indicators for CY 2020.
comment period (80 FR 70497).
1. Background The ‘‘CH’’ comment indicator is used G. Calculation of the ASC Payment
in Addenda AA and BB to the proposed Rates and the ASC Conversion Factor
In addition to the payment indicators rule (which are available via the internet
that we introduced in the August 2, 1. Background
on the CMS website) to indicate that the
2007 final rule, we created final payment indicator assignment has In the August 2, 2007 final rule (72 FR
comment indicators for the ASC changed for an active HCPCS code in 42493), we established our policy to
payment system in the CY 2008 OPPS/ the current year and the next calendar base ASC relative payment weights and
ASC final rule with comment period (72 year, for example if an active HCPCS payment rates under the revised ASC
FR 66855). We created Addendum DD1 code is newly recognized as payable in payment system on APC groups and the
to define ASC payment indicators that ASCs; or an active HCPCS code is OPPS relative payment weights.
we use in Addenda AA and BB to discontinued at the end of the current Consistent with that policy and the
provide payment information regarding calendar year. The ‘‘CH’’ comment requirement at section 1833(i)(2)(D)(ii)
covered surgical procedures and indicators that are published in the final of the Act that the revised payment
covered ancillary services, respectively, rule with comment period are provided system be implemented so that it would
under the revised ASC payment system. to alert readers that a change has been be budget neutral, the initial ASC
The ASC payment indicators in made from one calendar year to the conversion factor (CY 2008) was
Addendum DD1 are intended to capture next, but do not indicate that the change calculated so that estimated total
policy-relevant characteristics of HCPCS is subject to comment. Medicare payments under the revised
codes that may receive packaged or ASC payment system in the first year
separate payment in ASCs, such as 2. ASC Payment and Comment would be budget neutral to estimated
whether they were on the ASC CPL Indicators for CY 2020 total Medicare payments under the prior
prior to CY 2008; payment designation, In the CY 2020 OPPS/ASC proposed (CY 2007) ASC payment system (the
such as device-intensive or office-based, rule, we proposed new and revised ASC conversion factor is multiplied by
and the corresponding ASC payment Category I and III CPT codes as well as the relative payment weights calculated
methodology; and their classification as new and revised Level II HCPCS codes. for many ASC services in order to
separately payable ancillary services, Therefore, proposed Category I and III establish payment rates). That is,
including radiology services, CPT codes that are new and revised for application of the ASC conversion factor
brachytherapy sources, OPPS pass- CY 2020 and any new and existing was designed to result in aggregate
through devices, corneal tissue Level II HCPCS codes with substantial Medicare expenditures under the
acquisition services, drugs or revisions to the code descriptors for CY revised ASC payment system in CY
biologicals, or NTIOLs. 2020 compared to the CY 2019 2008 being equal to aggregate Medicare
expenditures that would have occurred alternative ratesetting methodologies for in the years between the decennial
in CY 2008 in the absence of the revised specific types of services (for example, censuses. On July 15, 2015, OMB issued
system, taking into consideration the device-intensive procedures). OMB Bulletin No. 15–01, which
cap on ASC payments in CY 2007, as As discussed in the August 2, 2007 provides updates to and supersedes
required under section 1833(i)(2)(E) of final rule (72 FR 42517 through 42518) OMB Bulletin No. 13–01 that was issued
the Act (72 FR 42522). We adopted a and as codified at § 416.172(c) of the on February 28, 2013. OMB Bulletin No.
policy to make the system budget regulations, the revised ASC payment 15–01 made changes that are relevant to
neutral in subsequent calendar years (72 system accounts for geographic wage the IPPS and ASC wage index. We refer
FR 42532 through 42533; § 416.171(e)). variation when calculating individual readers to the CY 2017 OPPS/ASC final
We note that we consider the term ASC payments by applying the pre-floor rule with comment period (81 FR
‘‘expenditures’’ in the context of the and pre-reclassified IPPS hospital wage 79750) for a discussion of these changes
budget neutrality requirement under indexes to the labor-related share, and our implementation of these
section 1833(i)(2)(D)(ii) of the Act to which is 50 percent of the ASC payment revisions. (A copy of this bulletin may
mean expenditures from the Medicare amount based on a GAO report of ASC be obtained at https://
Part B Trust Fund. We do not consider costs using 2004 survey data. Beginning www.whitehouse.gov/sites/
expenditures to include beneficiary in CY 2008, CMS accounted for whitehouse.gov/files/omb/bulletins/
coinsurance and copayments. This geographic wage variation in labor costs 2015/15-01.pdf.)
distinction was important for the CY when calculating individual ASC On August 15, 2017, OMB issued
2008 ASC budget neutrality model that payments by applying the pre-floor and OMB Bulletin No. 17–01, which
considered payments across the OPPS, pre-reclassified hospital wage index provided updates to and superseded
ASC, and MPFS payment systems. values that CMS calculates for payment OMB Bulletin No. 15–01 that was issued
However, because coinsurance is almost under the IPPS, using updated Core on July 15, 2015. We refer readers to the
always 20 percent for ASC services, this Based Statistical Areas (CBSAs) issued CY 2019 OPPS/ASC final rule with
interpretation of expenditures has by OMB in June 2003. comment period (83 FR 58864 through
minimal impact for subsequent budget The reclassification provision in 58865) for a discussion of these changes
neutrality adjustments calculated within section 1886(d)(10) of the Act is specific and our implementation of these
the revised ASC payment system. to hospitals. We believe that using the revisions. (A copy of this bulletin may
In the CY 2008 OPPS/ASC final rule most recently available pre-floor and be obtained at https://
with comment period (72 FR 66857 pre-reclassified IPPS hospital wage www.whitehouse.gov/sites/
through 66858), we set out a step-by- indexes results in the most appropriate whitehouse.gov/files/omb/bulletins/
step illustration of the final budget adjustment to the labor portion of ASC 2017/b-17-01.pdf.)
neutrality adjustment calculation based costs. We continue to believe that the For CY 2020, the proposed CY 2020
on the methodology finalized in the unadjusted hospital wage indexes, ASC wage indexes fully reflect the OMB
August 2, 2007 final rule (72 FR 42521 which are updated yearly and are used labor market area delineations
through 42531) and as applied to by many other Medicare payment (including the revisions to the OMB
updated data available for the CY 2008 systems, appropriately account for labor market delineations discussed
OPPS/ASC final rule with comment geographic variation in labor costs for above, as set forth in OMB Bulletin Nos.
period. The application of that ASCs. Therefore, the wage index for an 15–01 and 17–01).
methodology to the data available for ASC is the pre-floor and pre-reclassified We note that, in certain instances,
the CY 2008 OPPS/ASC final rule with hospital wage index under the IPPS of there might be urban or rural areas for
comment period resulted in a budget the CBSA that maps to the CBSA where which there is no IPPS hospital that has
neutrality adjustment of 0.65. the ASC is located. wage index data that could be used to
For CY 2008, we adopted the OPPS Generally, OMB issues major set the wage index for that area. For
relative payment weights as the ASC revisions to statistical areas every 10 these areas, our policy has been to use
relative payment weights for most years, based on the results of the the average of the wage indexes for
services and, consistent with the final decennial census. On February 28, 2013, CBSAs (or metropolitan divisions as
policy, we calculated the CY 2008 ASC OMB issued OMB Bulletin No. 13–01, applicable) that are contiguous to the
payment rates by multiplying the ASC which provides the delineations of all area that has no wage index (where
relative payment weights by the final Metropolitan Statistical Areas, ‘‘contiguous’’ is defined as sharing a
CY 2008 ASC conversion factor of Metropolitan Divisions, Micropolitan border). For example, for CY 2014, we
$41.401. For covered office-based Statistical Areas, Combined Statistical applied a proxy wage index based on
surgical procedures, covered ancillary Areas, and New England City and Town this methodology to ASCs located in
radiology services (excluding covered Areas in the United States and Puerto CBSA 25980 (Hinesville-Fort Stewart,
ancillary radiology services involving Rico based on the standards published GA) and CBSA 08 (Rural Delaware).
certain nuclear medicine procedures or on June 28, 2010 in the Federal Register When all of the areas contiguous to
involving the use of contrast agents, as (75 FR 37246 through 37252) and 2010 the urban CBSA of interest are rural and
discussed in section XII.D.2. of the CY Census Bureau data. (A copy of this there is no IPPS hospital that has wage
2020 OPPS/ASC proposed rule), and bulletin may be obtained at: https:// index data that could be used to set the
certain diagnostic tests within the www.whitehouse.gov/sites/ wage index for that area, we determine
medicine range that are covered whitehouse.gov/files/omb/bulletins/ the ASC wage index by calculating the
ancillary services, the established policy 2013/b13-01.pdf.) In the FY 2015 IPPS/ average of all wage indexes for urban
is to set the payment rate at the lower LTCH PPS final rule (79 FR 49951 areas in the state (75 FR 72058 through
of the MPFS unadjusted nonfacility PE through 49963), we implemented the 72059). (In other situations, where there
RVU-based amount or the amount use of the CBSA delineations issued by are no IPPS hospitals located in a
calculated using the ASC standard OMB in OMB Bulletin 13–01 for the relevant labor market area, we continue
ratesetting methodology. Further, as IPPS hospital wage index beginning in our current policy of calculating an
discussed in the CY 2008 OPPS/ASC FY 2015. urban or rural area’s wage index by
final rule with comment period (72 FR OMB occasionally issues minor calculating the average of the wage
66841 through 66843), we also adopted updates and revisions to statistical areas indexes for CBSAs (or metropolitan
divisions where applicable) that are For any given year’s ratesetting, we methodology has created an access to
contiguous to the area with no wage typically use the most recent full care issue for ASCs. Additionally, the
index.) calendar year of claims data to model ASC payment system was not designed
budget neutrality adjustments. At the to mirror that of the OPPS; a large part
2. Calculation of the ASC Payment Rates
time of the proposed rule, we had of the value of ASCs is that they provide
a. Updating the ASC Relative Payment available 98 percent of CY 2018 ASC a lower cost option for surgical
Weights for CY 2020 and Future Years claims data. procedures than some other settings.
We update the ASC relative payment The comments and our responses to To create an analytic file to support
weights each year using the national the comments are set forth below. calculation of the weight scalar and
Comment: A majority of commenters budget neutrality adjustment for the
OPPS relative payment weights (and
believe that CMS needs to reduce the wage index (discussed below), we
PFS nonfacility PE RVU-based amounts,
disparity in payments between ASCs summarized available CY 2017 ASC
as applicable) for that same calendar
and HOPDs. Commenters stated that claims by ASC and by HCPCS code. We
year and uniformly scale the ASC
ASC payment rates are less than 50 used the National Provider Identifier for
relative payment weights for each
percent of the HOPD payment rates for the purpose of identifying unique ASCs
update year to make them budget
some high volume procedures. Many of within the CY 2018 claims data. We
neutral (72 FR 42533). Consistent with these same commenters support the used the supplier zip code reported on
our established policy, we proposed to discontinuation of the ASC weight the claim to associate state, county, and
scale the CY 2020 relative payment scalar, which they believe is the cause CBSA with each ASC. This file,
weights for ASCs according to the of the payment gap between ASCs and available to the public as a supporting
following method. Holding ASC HOPDs. Commenters suggested that the data file for the proposed rule, is posted
utilization, the ASC conversion factor, ASC weight scalar as currently applied on the CMS website at http://
and the mix of services constant from may make it economically infeasible for www.cms.gov/Research-Statistics-Data-
CY 2018, we proposed to compare the ASC facilities to continue to perform and-Systems/Files-for-Order/
total payment using the CY 2019 ASC Medicare cases, which would hurt LimitedDataSets/
relative payment weights with the total beneficiaries and limit their access to ASCPaymentSystem.html.
payment using the CY 2020 ASC high-quality outpatient surgical care.
relative payment weights to take into They suggested that eliminating the b. Updating the ASC Conversion Factor
account the changes in the OPPS secondary rescaling that is currently Under the OPPS, we typically apply
relative payment weights between CY applied to ASC payments would allow a budget neutrality adjustment for
2019 and CY 2020. We proposed to use ASCs to continue to provide quality provider level changes, most notably a
the ratio of CY 2019 to CY 2020 total surgical care for Medicare patients. change in the wage index values for the
payments (the weight scalar) to scale the Several commenters requested that upcoming year, to the conversion factor.
ASC relative payment weights for CY CMS apply the same OPPS relative Consistent with our final ASC payment
2020. The proposed CY 2020 ASC weights to ASC services and policy, for the CY 2017 ASC payment
weight scalar is 0.8452 and scaling discontinue rescaling the ASC relative system and subsequent years, in the CY
would apply to the ASC relative weights. They provided that while they 2017 OPPS/ASC final rule with
payment weights of the covered surgical understand the additional scaling factor comment period (81 FR 79751 through
procedures, covered ancillary radiology that CMS applies to the ASC APC 79753), we finalized our policy to
services, and certain diagnostic tests weight maintains budget neutrality calculate and apply a budget neutrality
within the medicine range of CPT codes, within the ASC payment system, this adjustment to the ASC conversion factor
which are covered ancillary services for scaling contributes to the large payment for supplier level changes in wage index
which the ASC payment rates are based differentials for similar services between values for the upcoming year, just as the
on OPPS relative payment weights. the ASC and HOPD systems. OPPS wage index budget neutrality
Scaling would not apply in the case Response: We note that applying the adjustment is calculated and applied to
of ASC payment for separately payable weight scalar in calculation of ASC the OPPS conversion factor. For CY
covered ancillary services that have a payment rates, for this final rule with 2020, we calculated the proposed
predetermined national payment comment period it is 0.8550, ensures adjustment for the ASC payment system
amount (that is, their national ASC that the ASC payment system remains by using the most recent CY 2018 claims
payment amounts are not based on budget neutral. We understand the data available and estimating the
OPPS relative payment weights), such commenters do not believe that difference in total payment that would
as drugs and biologicals that are calculation of the weight scalar in the be created by introducing the proposed
separately paid or services that are ASC is necessary and their belief that its CY 2020 ASC wage indexes.
contractor-priced or paid at reasonable application leads to large payment Specifically, holding CY 2018 ASC
cost in ASCs. Any service with a differentials for similar services between utilization, service-mix, and the
predetermined national payment the OPPS and ASC payment systems. proposed CY 2020 national payment
amount would be included in the ASC However, as noted in previous rates after application of the weight
budget neutrality comparison, but rulemaking (83 FR 59076), we do not scalar constant, we calculated the total
scaling of the ASC relative payment believe that the ASC cost structure is adjusted payment using the CY 2019
weights would not apply to those identical to the hospital cost structure. ASC wage indexes and the total
services. The ASC payment weights for Further, we do not collect cost data from adjusted payment using the proposed
those services without predetermined ASCs, and therefore we are unsure of CY 2020 ASC wage indexes. We used
national payment amounts (that is, the actual differences in costs between the 50-percent labor-related share for
those services with national payment the two sites of service. We have not both total adjusted payment
amounts that would be based on OPPS witnessed beneficiary access issues calculations. We then compared the
relative payment weights) would be when it comes to receiving care in an total adjusted payment calculated with
scaled to eliminate any difference in the ASC and note that there are more ASCs the CY 2019 ASC wage indexes to the
total payment between the current year than there are hospitals; we do not agree total adjusted payment calculated with
and the update year. that the current ASC payment the proposed CY 2020 ASC wage
indexes and applied the resulting ratio 2019 IPPS/LTCH PPS final rule (84 FR a more recent estimate of the hospital
of 1.0008 (the proposed CY 2020 ASC 42343), based on IGI’s 2019 second market basket update and MFP), we
wage index budget neutrality quarter forecast with historical data would use such data, if appropriate, to
adjustment) to the CY 2019 ASC through the first quarter of 2019, the determine the CY 2020 ASC update for
conversion factor to calculate the hospital market basket update for CY the CY 2020 OPPS/ASC final rule with
proposed CY 2020 ASC conversion 2020 is 3.0 percent. comment period.
factor. We finalized the methodology for For CY 2020, we proposed to adjust
Section 1833(i)(2)(C)(i) of the Act calculating the MFP adjustment in the the CY 2019 ASC conversion factor
requires that, if the Secretary has not CY 2011 PFS final rule with comment ($46.532) by the proposed wage index
updated amounts established under the period (75 FR 73394 through 73396) and budget neutrality factor of 1.0008 in
revised ASC payment system in a revised it in the CY 2012 PFS final rule addition to the MFP-adjusted hospital
calendar year, the payment amounts with comment period (76 FR 73300 market basket update factor of 2.7
shall be increased by the percentage through 73301) and the CY 2016 OPPS/ percent discussed above, which results
increase in the Consumer Price Index ASC final rule with comment period (80 in a proposed CY 2020 ASC conversion
for all urban consumers (CPI–U), U.S. FR 70500 through 70501). As stated in factor of $47.827 for ASCs meeting the
city average, as estimated by the the CY 2020 OPPS/ASC proposed rule quality reporting requirements. For
Secretary for the 12-month period (84 FR 39553), the proposed MFP ASCs not meeting the quality reporting
ending with the midpoint of the year adjustment for CY 2020 was projected to requirements, we proposed to adjust the
involved. The statute does not mandate be 0.5 percentage point, as published in CY 2019 ASC conversion factor
the adoption of any particular update the FY 2020 IPPS/LTCH PPS proposed ($46.532) by the proposed wage index
mechanism, but it requires the payment rule (84 FR 19402) based on IGI’s 2018 budget neutrality factor of 1.0008 in
amounts to be increased by the CPI–U fourth quarter forecast. For this CY 2020 addition to the quality reporting/MFP-
in the absence of any update. Because OPPS/ASC final rule with comment adjusted hospital market basket update
the Secretary updates the ASC payment period, as published in the FY 2020 factor of 0.7 percent discussed above,
amounts annually, we adopted a policy, IPPS/LTCH PPS final rule (84 FR 42343) which results in a proposed CY 2020
which we codified at § 416.171(a)(2)(ii)), based on IGI’s 2019 second quarter ASC conversion factor of $46.895.
to update the ASC conversion factor forecast, the final MFP adjustment for The comments and our responses are
using the CPI–U for CY 2010 and CY 2020 is 0.4 percentage point. set forth below.
subsequent calendar years. For CY 2020, we proposed to utilize Comment: The majority of
In the CY 2019 OPPS/ASC final rule the hospital market basket update of 3.2 commenters supported continued use of
with comment period (83 FR 59075 percent minus the MFP adjustment of the hospital market basket for updating
through 59080), we finalized our 0.5 percentage point, resulting in an ASC payments on an annual basis.
proposal to apply the hospital market MFP-adjusted hospital market basket Some commenters suggested that
basket update to ASC payment system update factor of 2.7 percent for ASCs aligning the update factors between the
rates for an interim period of 5 years meeting the quality reporting OPPS and ASC settings will encourage
(CY 2019 through CY 2023), during requirements. Therefore, we proposed to the migration of care to the ASC setting
which we will assess whether there is apply a 2.7 percent MFP-adjusted by making ASC payment more
a migration of the performance of hospital market basket update factor to competitive with hospital payment,
procedures from the hospital setting to the CY 2019 ASC conversion factor for while other commenters supported the
the ASC setting as a result of the use of ASCs meeting the quality reporting decision as it would promote site-
a hospital market basket update, as well requirements to determine the CY 2020 neutrality between the two settings of
as whether there are any unintended ASC payment amounts. The ASCQR care through more competitive payment.
consequences, such as less than Program affected payment rates However, other commenters, despite
expected migration of the performance beginning in CY 2014 and, under this their support for the use of the hospital
of procedures from the hospital setting program, there is a 2.0 percentage point market basket to update ASC payment
to the ASC setting. In addition, we reduction to the update factor for ASCs rates, believed that the migration of
finalized our proposal to revise our that fail to meet the ASCQR Program services to ASCs would be limited due
regulations under § 416.171(a)(2), which requirements. We referred readers to to the ASC budget neutrality
address the annual update to the ASC section XIV.E. of the CY 2019 OPPS/ adjustments. Commenters stated that
conversion factor. During this 5-year ASC final rule with comment period (83 CMS’ current approach to maintaining
period, we intend to assess the FR 59138 through 59139) and section budget neutrality in the ASC payment
feasibility of collaborating with XIV.E. of the CY 2020 OPPS/ASC system caused increasing differentials in
stakeholders to collect ASC cost data in proposed rule for a detailed discussion payment for services provided in the
a minimally burdensome manner and of our policies regarding payment ASC and HOPD settings, and there was
could propose a plan to collect such reduction for ASCs that fail to meet no evidence of corresponding changes
information. We refer readers to that ASCQR Program requirements. We in capital and operating costs between
final rule for a detailed discussion of the proposed to utilize the hospital market the ASC and HOPD settings to support
rationale for these policies. basket update of 3.2 percent reduced by this growing payment differential.
As stated in the CY 2020 OPPS/ASC 2.0 percentage points for ASCs that do Commenters noted that widening the
proposed rule (84 FR 39552), the not meet the quality reporting gap in payments could make it
hospital market basket update for CY requirements and then subtract the 0.5 economically difficult for ASCs to
2020 was to be 3.2 percent, as published percentage point MFP adjustment. perform certain procedures,
in the FY 2020 IPPS/LTCH PPS Therefore, we proposed to apply a 0.7 discouraging ASCs from furnishing
proposed rule (84 FR 19402), based on percent MFP-adjusted hospital market those procedures and thereby
IHS Global Inc.’s (IGI’s) 2018 fourth basket update factor to the CY 2019 ASC discouraging the migration of services
quarter forecast with historical data conversion factor for ASCs not meeting from the HOPD to the ASC setting.
through the third quarter of 2018. For the quality reporting requirements. We MedPAC did not support using the
this CY 2020 OPPS/ASC final rule with also proposed that if more recent data hospital market basket index as an
comment period, as published in the FY are subsequently available (for example, interim method for updating the ASC
conversion factor, noting that evidence with stakeholders to collect ASC cost The final payment rates included in
has indicated the hospital market basket data in a minimally burdensome addenda AA and BB to this final rule
index does not accurately reflect the manner for future policy development. reflect the full ASC payment update and
costs of ASCs. MedPAC noted the After consideration of the public not the reduced payment update used to
differences in cost structure between the comments we received, consistent with calculate payment rates for ASCs not
HOPD and ASC settings could be our proposal that if more recent data are meeting the quality reporting
attributed to a number of factors, subsequently available (for example, a requirements under the ASCQR
including different patient populations, more recent estimate of the hospital Program. These addenda contain several
expenses, employee compensation, and market basket update and MFP), we types of information related to the
regulations. would use such data, if appropriate, to proposed CY 2020 payment rates.
Response: We appreciate the determine the CY 2020 ASC update for Specifically, in Addendum AA, a ‘‘Y’’ in
commenters’ support. We believe the CY 2020 OPPS/ASC final rule with the column titled ‘‘To be Subject to
providing ASCs with the same rate comment period, we are incorporating Multiple Procedure Discounting’’
update as hospitals encourages the more recent data to determine the final indicates that the surgical procedure
migration of services from the hospital CY 2020 ASC update. Therefore, for this would be subject to the multiple
setting to the ASC setting and could CY 2020 OPPS/ASC final rule with procedure payment reduction policy. As
increase the presence of ASCs in health comment period, the hospital market discussed in the CY 2008 OPPS/ASC
care markets or geographic areas where basket update for CY 2020 is 3.0 final rule with comment period (72 FR
previously there were none or few. The percent, as published in the FY 2020 66829 through 66830), most covered
migration of services from the higher IPPS/LTCH PPS final rule (84 FR surgical procedures are subject to a 50-
cost hospital outpatient setting to the 42343), based on IGI’s 2019 second percent reduction in the ASC payment
ASC setting is likely to result in savings quarter forecast with historical data for the lower-paying procedure when
to beneficiaries and the Medicare through the first quarter of 2019. The more than one procedure is performed
program. This policy also gives both MFP adjustment for this CY 2020 OPPS/ in a single operative session.
physicians and beneficiaries greater ASC final rule with comment period is Display of the comment indicator
choice in selecting the best care setting. 0.4 percentage point, as published in the ‘‘CH’’ in the column titled ‘‘Comment
In addition, we acknowledge FY 2020 IPPS/LTCH PPS final rule (84 Indicator’’ indicates a change in
MedPAC’s comment regarding the FR 42343) based on IGI’s 2019 second payment policy for the item or service,
collection of ASC cost data and quarter forecast. including identifying discontinued
differences in cost structure between the For CY 2020, we are finalizing the
HCPCS codes, designating items or
HOPD and ASC settings. We appreciate hospital market basket update of 3.0
services newly payable under the ASC
these comments and will take these percent minus the MFP adjustment of
comments into consideration in future 0.4 percentage point, resulting in an payment system, and identifying items
policy development. MFP-adjusted hospital market basket or services with changes in the ASC
Comment: Multiple commenters update factor of 2.6 percent for ASCs payment indicator for CY 2020. Display
expressed their opposition to collecting meeting the quality reporting of the comment indicator ‘‘NI’’ in the
ASC cost data, due to the anticipated requirements. Therefore, we apply a 2.6 column titled ‘‘Comment Indicator’’
administrative burden associated with percent MFP-adjusted hospital market indicates that the code is new (or
collecting this data. Commenters basket update factor to the CY 2019 ASC substantially revised) and that
suggested that collecting ASC cost data conversion factor for ASCs meeting the comments will be accepted on the
would prevent ASCs from providing quality reporting requirements to interim payment indicator for the new
efficient low-cost care. MedPAC determine the CY 2020 ASC payment code. Display of the comment indicator
suggested that CMS begin collecting rates. ‘‘NP’’ in the column titled ‘‘Comment
ASC cost data immediately, forgoing the Indicator’’ indicates that the code is new
final four years of its planned five-year 3. Display of Final CY 2020 ASC (or substantially revised) and that
period to assess the feasibility of Payment Rates comments will be accepted on the ASC
collaborating with stakeholders to Addenda AA and BB to this final rule payment indicator for the new code.
collect ASC cost data in a minimally (which are available on the CMS The values displayed in the column
burdensome manner and potentially to website) display the final updated ASC titled ‘‘Final CY 2020 Payment Weight’’
propose a plan to collect such payment rates for CY 2020 for covered are the proposed relative payment
information. MedPAC suggested that surgical procedures and covered weights for each of the listed services
CMS use its existing authority and ancillary services, respectively. For for CY 2020. The proposed relative
resources to act quickly in gathering those covered surgical procedures and payment weights for all covered surgical
ASC cost data. MedPAC noted that covered ancillary services where the procedures and covered ancillary
beneficial information could be gathered payment rate is the lower of the services where the ASC payment rates
to inform ASC payment updates and proposed rates under the ASC standard are based on OPPS relative payment
asserted that there is sufficient evidence ratesetting methodology and the MPFS weights were scaled for budget
that ASC can capably submit cost data. final rates, the final payment indicators neutrality. Therefore, scaling was not
Response: We thank the commenters and rates set forth in this final rule are applied to the device portion of the
for their input. As discussed in the CY based on a comparison using the device-intensive procedures, services
2019 OPPS/ASC final rule with finalized PFS rates that would be that are paid at the MPFS nonfacility PE
comment period, we intend to assess the effective January 1, 2020. For a RVU-based amount, separately payable
feasibility of collaborating with discussion of the PFS rates, we refer covered ancillary services that have a
stakeholders to collect ASC cost data in readers to the CY 2020 PFS final rule predetermined national payment
a minimally burdensome manner and that is available on the CMS website at: amount, such as drugs and biologicals
potentially propose a plan to collect https://www.cms.gov/Medicare/ and brachytherapy sources that are
such information over a 5-year period Medicare-Fee-for-Service-Payment/ separately paid under the OPPS, or
(83 FR 59077). We will continue to PhysicianFeeSched/PFS-Federal- services that are contractor-priced or
assess the feasibility of collaborating Regulation-Notices.html. paid at reasonable cost in ASCs. This
includes separate payment for non- We refer readers to the CY 2019 to these policies in the CY 2020 OPPS/
opioid pain management drugs. OPPS/ASC final rule with comment ASC proposed rule (84 FR 39554).
To derive the final CY 2020 payment period (83 FR 58820 through 58822)
rate displayed in the ‘‘Final CY 2020 3. Removal of Quality Measures From
where we discuss our Meaningful
Payment Rate’’ column, each ASC the Hospital OQR Program Measure Set
Measures Initiative and our approach in
payment weight in the ‘‘Final CY 2020 evaluating quality program measures. In the CY 2010 OPPS/ASC final rule
Payment Weight’’ column was with comment period (74 FR 60635), we
multiplied by the final CY 2020 2. Statutory History of the Hospital OQR finalized a process to use the regular
conversion factor of $47.747. The Program rulemaking process to remove a measure
conversion factor includes a budget We refer readers to the CY 2011 for circumstances for which we do not
neutrality adjustment for changes in the OPPS/ASC final rule with comment believe that continued use of a measure
wage index values and the annual period (75 FR 72064 through 72065) for raises specific patient safety concerns.82
update factor as reduced by the a detailed discussion of the statutory We codified this policy at 42 CFR
productivity adjustment. The final CY history of the Hospital OQR Program. 419.46(h)(3) in the CY 2019 OPPS/ASC
2020 ASC conversion factor uses the CY final rule with comment period (83 FR
3. Regulatory History of the Hospital
2020 MFP-adjusted hospital market 59082). We did not propose any changes
OQR Program
basket update factor of 2.6 percent to these policies in the CY 2020 OPPS/
(which is equal to the projected hospital We refer readers to the CY 2008 ASC proposed rule (84 FR 39554).
market basket update of 3.0 percent through 2019 OPPS/ASC final rules
with comment period (72 FR 66860 a. Considerations in Removing Quality
minus a projected MFP adjustment of Measures From the Hospital OQR
0.4 percentage point). through 66875; 73 FR 68758 through
68779; 74 FR 60629 through 60656; 75 Program
In Addendum BB, there are no
relative payment weights displayed in FR 72064 through 72110; 76 FR 74451 (1) Immediate Removal
the ‘‘Final CY 2020 Payment Weight’’ through 74492; 77 FR 68467 through In the CY 2010 OPPS/ASC final rule
column for items and services with 68492; 78 FR 75090 through 75120; 79 with comment period (74 FR 60634
predetermined national payment FR 66940 through 66966; 80 FR 70502 through 60635), we finalized a process
amounts, such as separately payable through 70526; 81 FR 79753 through for immediate retirement, which we
drugs and biologicals. The ‘‘Final CY 79797; 82 FR 59424 through 59445; and later termed ‘‘removal,’’ of Hospital
2020 Payment’’ column displays the 83 FR 59080 through 59110) for the OQR Program measures, based on
proposed CY 2020 national unadjusted regulatory history of the Hospital OQR evidence that the continued use of the
ASC payment rates for all items and Program. We have codified certain measure as specified raises patient
services. The proposed CY 2020 ASC requirements under the Hospital OQR safety concerns.83 We codified this
payment rates listed in Addendum BB Program at 42 CFR 419.46. policy at 42 CFR 419.46(h)(2) in the CY
for separately payable drugs and B. Hospital OQR Program Quality 2019 OPPS/ASC final rule with
biologicals are based on ASP data used Measures comment period (83 FR 59082). We did
for payment in physicians’ offices in not propose any changes to these
2019. 1. Considerations in the Selection of policies in the CY 2020 OPPS/ASC
Addendum EE provides the HCPCS Hospital OQR Program Quality proposed rule (84 FR 39554).
codes and short descriptors for surgical Measures
procedures that are proposed to be We refer readers to the CY 2012 (2) Consideration Factors for Removing
excluded from payment in ASCs for CY OPPS/ASC final rule with comment Measures
2020. period (76 FR 74458 through 74460) for In the CY 2019 OPPS/ASC final rule
a detailed discussion of the priorities we with comment period (83 FR 59083
XIV. Requirements for the Hospital
consider for the Hospital OQR Program through 59085), we clarified, finalized,
quality measure selection. We did not and codified at 42 CFR 419.46(h)(2) and
Program
propose any changes to these policies in (3) an updated set of factors 84 and
A. Background the CY 2020 OPPS/ASC proposed rule policies for determining whether to
(84 FR 39554). remove measures from the Hospital
1. Overview
OQR Program. We refer readers to that
CMS seeks to promote higher quality 2. Retention of Hospital OQR Program final rule with comment period for a
and more efficient healthcare for Measures Adopted in Previous Payment detailed discussion of our policies
Medicare beneficiaries. Consistent with Determinations regarding measure removal. The factors
these goals, CMS has implemented We previously adopted a policy to are:
quality reporting programs for multiple retain measures from a previous year’s • Factor 1. Measure performance
care settings including the quality Hospital OQR Program measure set for among hospitals is so high and
reporting program for hospital subsequent years’ measure sets in the
outpatient care, known as the Hospital CY 2013 OPPS/ASC final rule with 82 We initially referred to this process as
Outpatient Quality Reporting (OQR) comment period (77 FR 68471) whereby ‘‘retirement’’ of a measure in the 2010 OPPS/ASC
proposed rule, but later changed it to ‘‘removal’’
Program, formerly known as the quality measures adopted in a previous during final rulemaking.
Hospital Outpatient Quality Data year’s rulemaking are retained in the 83 We refer readers to the CY 2013 OPPS/ASC
Reporting Program (HOP QDRP). The Hospital OQR Program for use in final rule with comment period (77 FR 68472
Hospital OQR Program is generally subsequent years unless otherwise through 68473) for a discussion of our reasons for
changing the term ‘‘retirement’’ to ‘‘removal’’ in the
aligned with the quality reporting specified. For more information Hospital OQR Program.
program for hospital inpatient services regarding this policy, we refer readers to 84 We note that we previously referred to these
known as the Hospital Inpatient Quality that final rule with comment period. We factors as ‘‘criteria’’ (for example, 77 FR 68472
Reporting (IQR) Program, formerly codified this policy at 42 CFR through 68473); we now use the term ‘‘factors’’ in
order to align the Hospital OQR Program
known as the Reporting Hospital 419.46(h)(1) in the CY 2019 OPPS/ASC terminology with the terminology we use in other
Quality Data for Annual Payment final rule with comment period (83 FR CMS quality reporting and pay-for-performance
Update (RHQDAPU) Program. 59082). We did not propose any changes (value-based purchasing) programs.
unvarying that meaningful distinctions appropriate at this time because the required in order to determine the total
and improvements in performance can costs associated with this measure dose and fractionation scheme, which in
no longer be made (‘‘topped out’’ outweigh the benefit of its continued turn is used to determine which cases
measures). use in the program (removal Factor 8). fall into the numerator for this measure.
• Factor 2. Performance or The Hospital OQR Program This manual review of patient records is
improvement on a measure does not implemented the OP–33 measure using a labor-intensive process that
result in better patient outcomes. ‘‘radiation delivery’’ Current Procedural contributes to burden and difficulty in
• Factor 3. A measure does not align Terminology (CPT) codes, which are reporting this measure. As a result, we
with current clinical guidelines or appropriate for hospital-level believe that the complexity of reporting
practice. measurement. We have identified issues this measure places substantial
• Factor 4. The availability of a more with reporting this measure, finding that administrative burden on facilities. This
broadly applicable (across settings, more questions are received about how also reflects observations made by the
populations, or conditions) measure for to report the OP–33 measure than about measure steward that implementing the
the topic. any other measure in the program. In measure in the outpatient setting has
• Factor 5. The availability of a addition, the measure steward has proven overly burdensome, given that
measure that is more proximal in time received feedback on data collection of facilities have noted confusion
to desired patient outcomes for the the measure in the outpatient setting, regarding when the administration of
particular topic. and has indicated new and significant EBRT to different numbers and
• Factor 6. The availability of a concerns regarding the ‘‘radiation locations of bone metastases are
measure that is more strongly associated delivery’’ CPT coding used to report the considered separate cases. These issues
with desired patient outcomes for the OP–33 measure in the Hospital OQR identifying cases have led to questions
particular topic. Program including complicated measure about sampling and difficulty
• Factor 7. Collection or public exclusions, sampling concerns, and determining if sample size requirements
reporting of a measure leads to negative administrative burden. are met. Additional burdens associated
unintended consequences other than ‘‘Radiation delivery’’ CPT codes with this measure have come to our
patient harm. require complicated measure attention, including complicated
• Factor 8. The costs associated with exclusions, and the use of ‘‘radiation measure exclusions, sampling concerns,
a measure outweigh the benefit of its delivery’’ CPT codes causes the and administrative burden. These
continued use in the program. administration of EBRT to different challenges cause difficulty in tracking
b. Removal of Quality Measure From the anatomic sites to be considered separate and reporting data for this measure and
Hospital OQR Program Measure Set: cases for this measure. The numerator additional administrative burden, as
OP–33: External Beam Radiotherapy for this measure includes all patients, evidenced by numerous questions about
(NQF# 1822) regardless of age, with painful bone how to report this measure received by
metastases, and no previous radiation to CMS and its contractors.
the same anatomic site who receive This EBRT measure was also adopted
rule (84 FR 39554 through 39556), we
EBRT with any of the following into another CMS quality reporting
proposed to remove one measure from
recommended fractionation schemes: program, the PPS-Exempt Cancer
the Hospital OQR Program for the CY
30Gy/10fxns, 24Gy/6fxns, 20Gy/5fxns, Hospital Quality Reporting (PCHQR)
2022 payment determination as
and 8Gy/1fxn. The denominator for this Program (79 FR 50278 through 50279).
discussed below. Specifically, beginning
measure includes all patients with That program initially used ‘‘radiation
with the CY 2022 payment
painful bone metastases and no planning’’ CPT codes billable at the
determination, we proposed to remove
previous radiation to the same anatomic physician level, but beginning in March
OP–33: External Beam Radiotherapy for
site who receive EBRT.86 As noted 2016, the PCHQR program updated the
Bone Metastases under removal Factor
8, the costs associated with a measure above, each anatomic site is considered measure to enable the use of ‘‘radiation
outweigh the benefit of its continued a different case, and as a result it is delivery’’ CPT codes.87 In the FY 2020
use in the program. necessary to determine when EBRT has IPPS/LTCH PPS final rule (84 FR
We refer readers to the CY 2016 been administered to different anatomic 42513), we finalized the removal of the
OPPS/ASC final rule with comment sites. This determination is not possible measure from the PCHQR Program
period (80 FR 70507 through 70510), without completing a detailed manual because the burden associated with the
where we adopted OP–33: External review of the patient’s record, creating measure outweighs the value of its
Beam Radiotherapy (NQF# 1822), burden and difficulty in determining inclusion in the PCHQR Program.
beginning with the CY 2018 payment which sites and instances of EBRT Specifically, the PCHQR Program
determination and for subsequent years. administration are considered cases and removed the measure because it is
This measure assesses the ‘‘percentage should be included in the denominator overly burdensome and because the
of patients (all-payer) with painful bone for the measure. These challenges in measure steward is no longer
metastases and no history of previous determining which cases are included maintaining the measure. As such, the
radiation who receive External Beam in the denominator for the measure PCHQR Program stated it can no longer
Radiotherapy (EBRT) with an acceptable result in difficulty in determining if ensure that the measure is in line with
dosing schedule.’’ 85 We adopted this sample size requirements for the clinical guidelines and standards (84 FR
measure to address the performance gap measure are being met. 42513). We note that while the version
Further, current information systems of the measure using ‘‘radiation
in EBRT treatment variation, ensure
do not automatically calculate the total planning’’ CPT codes is less
appropriate use of EBRT, and prevent
dose provided, so manual review of burdensome, Hospital Outpatient
the overuse of radiation therapy (80 FR
patient records by practice staff is also
70508).
87 QualityNet. 2018 EBRT Measure Information
We believe that removing OP–33 from 86 National Quality Forum. NQF #1822 External Form. Available at: https://www.qualitynet.org/dcs/
the Hospital OQR Program is Beam Radiotherapy for Bone Metastases. Available ContentServer?cid=122877
at: http://www.qualityforum.org/WorkArea/ 4479863&pagename=QnetPublic%2FPage%
85 80 FR 70508. linkit.aspx?LinkIdentifier=id&ItemID=70374. 2FQnetTier4&c=Page.
Departments (HOPDs) do not have for subsequent years under removal wished to remove the measure
access to physician billing data, and so Factor 8. beginning with October 2020 encounters
it is not operationally feasible to use We provided a summary of the used in the CY 2022 payment
‘‘radiation planning’’ CPT codes (as comments received and our responses to determination and for subsequent years.
opposed to the current ‘‘radiation those comments. We refer readers to the CY 2016 OPPS/
delivery’’ CPT codes) for the EBRT Comment: Many commenters ASC final rule with comment period (80
measure in the Hospital OQR Program. supported the proposal to remove EBRT FR 70521 through 70522) where we
for Bone Metastases (OP–33) from the finalized that beginning with the CY
This measure was originally adopted
Hospital OQR Program beginning in CY 2017 payment determination, hospitals
to address the performance gap in EBRT
2022. Several commenters stated that must report data submitted via a Web-
treatment variation, ensure appropriate
they support the removal of OP–33 from based tool between January 1 and May
use of EBRT, and prevent the overuse of
the Hospital OQR Program for the
radiation therapy. While we still believe 15 of the year prior to the payment
reasons CMS outlined in the proposed
that these goals are important, the determination with respect to the
rule. Specifically, several commenters
benefits of this measure have encounter period of January 1 to
stated that they support the removal of
diminished. Stakeholder feedback has December 31 of 2 years prior to the
OP–33 from the Hospital OQR Program
shown that this measure is burdensome payment determination year. For the CY
because the measure is burdensome and
and difficult to report. Since the because it is no longer being maintained 2022 payment determination, the data
measure steward is no longer by the measure steward so it may no submission window for this measure
maintaining this measure,88 we no longer be aligned with clinical would then be January 1, 2021 to May
longer believe that we can ensure that guidelines. A few commenters stated 15, 2021 for the January 1, 2020 through
the measure is in line with clinical that they support the removal of OP–33 December 31, 2020 encounter period.
guidelines and standards. Thus, to align with the removal of the measure Thus, as OP–33 is a Web-based measure,
considering these circumstances, we from PCHQR and because the measure its removal from the Hospital OQR
believe the costs associated with this is no longer endorsed by the National Program beginning with the CY 2022
measure outweigh the benefit of its Quality Forum (NQF). payment determination would also
continued use in the program (removal Response: We thank the commenters begin with January 1, 2020 encounters
Factor 8). for their support to remove EBRT for rather than October 2020 encounters.
Therefore, in the CY 2020 OPPS/ASC Bone Metastases (OP–33) from the So, we are finalizing a modification of
proposed rule (84 FR 39554 through Hospital OQR Program due to burden what was proposed to correct that we
39556), we proposed to remove the and alignment issues. While NQF are removing the measure beginning
measure beginning with October 2020 endorsement is not a requirement for with January 2020 encounters used for
encounters used in the CY 2022 measure inclusion in the Hospital OQR the CY 2022 payment determination and
payment determination and for Program, it can be considered when for subsequent years. For the OP–33
subsequent years. We wish to clarify assessing a measure (section measure, the final data submission of
here in this final rule that the measure 1833(t)(17)(C)(i) of the Act). data collected for CY 2019 encounters
would be removed beginning with CY Comment: Several commenters will be required by May 15, 2020 for use
2020 encounters (January 2020) used in requested that CMS clarify the last toward CY 2021 payment
the CY 2022 payment determination and reporting date for EBRT for Bone determinations; hospitals would not be
for subsequent years rather than Metastases (OP–33) if it is removed and required to collect data for OP–33 as of
beginning in October 2020 as incorrectly recommended that removal should January 1, 2020 encounters.
noted in the proposed rule. We refer begin with January 1, 2020 encounters
rather than October 2020 encounters. A Comment: A few commenters
readers to our response to comments
few commenters requested that the expressed concern about the proposal to
below. We considered removing this
removal of OP–33 begin with the remove EBRT for Bone Metastases (OP–
measure beginning with the CY 2021
Calendar Year 2021 payment 33) from the Hospital OQR Program.
payment determination, but we decided
determination rather than the Calendar One commenter stated that the OP–33
to propose to delay removal until the CY
Year 2022 payment determination due measure gives valuable information for
2022 payment determination to be
to the significant burden of the reporting monitoring hospital performance
sensitive to facilities’ planning and
requirements. One commenter improvement. One commenter stated
operational procedures given that data
recommended CMS to remove OP–33 as that the OP–33 measure is valuable
collection for this measure began during
soon as possible. because it gauges overuse of health
CY 2019 for the CY 2021 payment
determination. We believe that this Response: Regarding the timeframe services in a setting where overuse
proposed removal date balances for measure removal, in the CY 2020 exposes people unnecessarily to
reporting burden while recognizing that OPPS/ASC proposed rule (84 FR 39554 radiation, putting patients at risk of
HOPDs must use resources to modify through 39556), we proposed to remove harm. This commenter stated that
information systems and reporting OP–33: External Beam Radiotherapy for though one of the reasons provided for
processes to discontinue reporting the Bone Metastases (NQF #1822) from the the removal of OP–33 is that it is
measure. Hospital OQR Program beginning with difficult and burdensome for healthcare
the CY 2022 payment determination and providers to report; the commenter
In summary, we proposed to remove recommends that CMS adopt a
for subsequent years under removal
OP–33: External Beam Radiotherapy for measurement framework that prioritizes
Factor 8. We chose this timeframe to be
Bone Metastases (NQF #1822) from the consumer needs over industry
sensitive to facilities’ planning and
Hospital OQR Program beginning with preference. The commenter also stated
operational procedures given that data
the CY 2022 payment determination and that because the measure steward is no
collection for this measure began during
CY 2019 for the CY 2021 payment longer maintaining the measure, CMS
88 See language about measure steward no longer
maintaining this measure in the FY 2020 IPPS/

determination. We realize that in our should either continue to maintain the
LTCH PPS proposed rule at 84 FR 19502 through proposal on pages 84 FR 39554 through measure or identify an entity to act as
19503. 39556, we inadvertently stated that we the measure steward to allow the
measure to remain in the Hospital OQR burdensome for which to collect data. January 2020 encounters used in the CY
Program. Our Meaningful Measures Initiative 2022 payment determination and for
Response: We thank the commenters provides a measurement framework that subsequent years.
for these suggestions regarding EBRT for prioritizes patient and consumer needs
Bone Metastases (OP–33). We agree that while limiting provider burden. 4. Summary of Hospital OQR Program
ensuring appropriate use of EBRT and Consistent with this framework, we note Measure Sets for the CY 2022 Payment
preventing the overuse of radiation that the Hospital OQR Program Determination
therapy which were goals of the OP–33 continues to have quality measures that We refer readers to the CY 2019
measure are important for safeguarding assess appropriate use of radiation (OP– OPPS/ASC final rule with comment
patients and consumers. We proposed to 8: MRI Lumbar Spine for Low Back period (83 FR 59099 through 59102) for
remove OP–33 under removal Factor 8, Pain, OP–10: Abdomen CT—Use of
a summary of the previously finalized
the costs associated with a measure Contrast Material, OP–13: Cardiac
outweigh the benefit of its continued Hospital OQR Program measure sets for
Imaging for Preoperative Risk
use in the program as stakeholder the CY 2020 and CY 2021 payment
Assessment for Non-Cardiac, Low-Risk
feedback has shown that this measure is determinations and subsequent years.
Surgery, and OP–23: Head CT or MRI
burdensome and difficult to report. Scan Results for Acute Ischemic Stroke We did not propose to add any
Regarding measure maintenance, as or Hemorrhagic Stroke who Received measures; however, we did propose and
stated, the measure steward is no longer Head CT or MRI Scan Interpretation are finalizing the removal of one
maintaining this measure and there are Within 45 minutes of ED Arrival). measure for the CY 2022 payment
issues with the measure as specified. After consideration of the public determination and subsequent years for
We do not seek to become the steward comments, we are finalizing a the Hospital OQR Program. Table 61
for this measure as we do not believe modification of what was proposed for summarizes the finalized Hospital OQR
that we can maintain this measure in the removal of OP–33 from the Hospital Program measure set for the CY 2022
the Hospital OQR Program in a way that OQR Program. Instead of removing the payment determination and subsequent
ensures that the measure is in line with measure beginning with October 2020 years (including previously adopted
clinical guidelines and standards and encounters as inadvertently stated, we measures and excluding one measure
has specifications that are not overly are finalizing removal beginning with finalized for removal in this final rule).
ER12NO19.102</GPH>
5. Hospital OQR Program Measures and the ASCQR Program due to concerns Harm Caused in the Delivery of Care.90
Topics for Future Consideration with their data submission method There has been broad stakeholder
In the CY 2020 OPPS/ASC proposed using quality data codes (QDCs) in the support for these measures in the ASC
rule (84 FR 39557), we requested CY 2019 OPPS/ASC final rule with setting; stakeholders believe these
comment on the potential future comment period (83 FR 59117 through measures provide important data for
adoption of four patient safety measures 59123; 59134 through 59135); however, facilities and patients because they are
as well as future outcome measures we refer readers to section XV.B.5. of serious and the occurrence of these
generally. the CY 2020 OPPS/ASC proposed rule events should be zero (83 FR 59118). A
(84 FR 39567), in which the ASCQR few commenters noted in the CY 2019
a. Request for Comment on the Potential Program requested public comment on OPPS/ASC final rule with comment
Future Adoption of Four Patient Safety period that it would be beneficial to also
updating the submission method for
Measures include these ASCQR Program measures
these measures in the future. We
In the CY 2020 OPPS/ASC proposed in the Hospital OQR Program in order
requested public comment on
rule (84 FR 39557) we sought comment to provide patients with more
potentially adding these measures with
on the potential future adoption of four meaningful data to compare sites of
the updated submission method using a
patient safety measures for the Hospital service (83 FR 59119). The future
CMS online data submission tool, to the addition of these measures would
OQR Program that were previously Hospital OQR Program in future
adopted for the ASCQR Program: ASC– further align the Hospital OQR and
rulemaking. These measures are ASCQR Programs, which would benefit
1: Patient Burn; ASC–2: Patient Fall; currently specified for the ASC setting.
ASC–3: Wrong Site, Wrong Side, Wrong patients because these are two
If specified for the hospital outpatient outpatient settings that patients may be
Procedure, Wrong Implant; and ASC–4: setting, we would seek collaboration
All-Cause Hospital Transfer/ interested in comparing, especially if
with the measure steward. they are able to choose in which of these
Admission.89 We refer readers to the CY
2012 OPPS/ASC final rule with We believe these measures could be two settings they receive care.
valuable to the Hospital OQR Program Although NQF endorsement for these
comment period (76 FR 74497 through
because they would allow us to monitor ASC measures was removed (in
74499), where we adopted these
these types of events and prevent their February 2016 for the All-Cause
measures (referred to as NQF #0263,
occurrence to ensure that they remain Hospital Transfer/Admission
NQF #0266, NQF #0267, and NQF
rare, and because they provide critical measure; 91 in May 2016 for the Patient
#0265 at the time) in the ASCQR
Program. We note that data collection data to beneficiaries and further 90 Centers for Medicare & Medicaid Services.
for these measures was suspended in transparency for care provided in the Meaningful Measures Hub. Available at: https://
outpatient setting that could be useful in www.cms.gov/Medicare/Quality-Initiatives-Patient-
89 ASCQR Specifications Manual, discussing choosing a HOPD. In addition, these Assessment-Instruments/QualityInitiativesGenInfo/
these measures, available at: http://qualitynet.org/ measures address an important MMF/General-info-Sub-Page.html.
dcs/ContentServer?c=Page 91 National Quality Forum. 0265 All-Cause
&pagename=QnetPublic%2FPage
Meaningful Measure Initiative quality Hospital Transfer/Admission. Available at: http://
priority, Making Care Safer by Reducing
ER12NO19.103</GPH>
%2FQnetTier2&cid=1228772475754. www.qualityforum.org/QPS/0265.
Burn 92 and the Wrong Site, Wrong Side, because patient burns are a wrong patient, a wrong procedure, or
Wrong Patient, Wrong Procedure, preventable.97 98 a wrong implant, and the denominator
Wrong Implant 93 measures; and in June is defined as all ASC admissions.102 We
(2) Patient Fall
2018 for the Patient Fall measure 94), as believe this measure, if specified for the
one commenter pointed out in the CY The ASCQR Program Patient Fall hospital outpatient setting, would
2019 OPPS/ASC final rule with measure assesses the percentage of provide important HOPD information
comment period, the NQF endorsement admissions experiencing a fall. The about surgeries and procedures
of the ASC measures was removed as numerator for this measure is defined as performed on the wrong site/side, and
endorsement was allowed to lapse by ASC admissions experiencing a fall wrong patient. In the CY 2012 OPPS/
the measure steward, not because they within the confines of the ASC and ASC final rule with comment period (76
failed the endorsement maintenance excludes ASC admissions experiencing FR 74498 through 74499), we adopted
process (83 FR 59119). If specified for a fall outside the ASC. The denominator this measure for the ASCQR Program
the HOPD setting, we plan to coordinate is defined as all ASC admissions and because surgeries and procedures
with the measure steward to seek NQF excludes ASC admissions experiencing performed on the wrong site/side, and
endorsement for those measures. These a fall outside the ASC.99 We believe this wrong patient can result in significant
measure, if specified for the hospital impact on patients, including
measures are discussed in more detail
outpatient setting, would enable HOPDs complications, serious disability or
below.
to take steps to reduce the risk of falls. death. We also stated that while the
(1) Patient Burn In the CY 2012 OPPS/ASC final rule prevalence of such serious errors may be
with comment period (76 FR 74498), we rare, such events are considered serious
The ASCQR Patient Burn measure adopted this measure for the ASCQR reportable events. These same
assesses the percentage of admissions Program because falls, particularly in significant impacts on patients apply for
experiencing a burn prior to discharge. the elderly, can cause injury and loss of the HOPD setting. Further, we have
The numerator for this measure is functional status; because the use of reviewed studies demonstrating the
defined as ASC admissions anxiolytics, sedatives, and anesthetic high impact of monitoring wrong site,
experiencing a burn prior to discharge agents may put patients undergoing wrong side, wrong patient, wrong
and the denominator is defined as all outpatient surgery at increased risk for procedure, wrong implant procedures
ASC admissions.95 We believe this falls; and because falls in healthcare and surgeries because these types of
measure, if specified for the hospital settings can be prevented through the errors are serious reportable events in
outpatient setting, would allow HOPDs, assessment of risk, care planning, and healthcare 103 and because these errors
Medicare beneficiaries, and other patient monitoring. These same risks for are preventable.104
stakeholders to develop a better patient falls are a concern in the HOPD
understanding of the incidence of these setting. Further, we have reviewed (4) All-Cause Hospital Transfer/
events. In the CY 2012 OPPS/ASC final studies demonstrating the high impact Admission
rule with comment period (76 FR 74497 of monitoring patient burns because The All-Cause Hospital Transfer/
through 74498), we adopted this patient falls are serious reportable Admission measure assesses the rate of
measure for the ASCQR Program events in healthcare 100 and because admissions requiring a hospital transfer
because ASCs serve surgical patients patient falls are preventable.101 or hospital admission upon discharge.
who may face the risk of burns during The numerator for this measure is
(3) Wrong Site, Wrong Side, Wrong
ambulatory surgical procedures and we defined as ASC admissions requiring a
Patient, Wrong Procedure, Wrong
believe monitoring patient burns is hospital transfer or hospital admission
Implant
valuable to patients and other upon discharge from the ASC and the
stakeholders. HOPDs also serve surgical The ASCQR Program Wrong Site, denominator is defined as all ASC
patients who may face the risk of burns Wrong Side, Wrong Patient, Wrong admissions.105 We believe this measure,
during outpatient procedures, so we Procedure, Wrong Implant measure if specified for the hospital outpatient
believe this measure would be valuable assesses the percentage of admissions setting, would be valuable for HOPDs.
for the HOPD setting. Further, we have experiencing a wrong site, wrong side, In the CY 2012 OPPS/ASC final rule
reviewed studies demonstrating the wrong patient, wrong procedure, or with comment period (76 FR 74499), we
high impact of monitoring patient burns wrong implant. The numerator for this adopted this measure for ASCs because
because patient burns are serious measure is defined as ASC admissions the transfer or admission of a surgical
reportable events in healthcare 96 and experiencing a wrong site, a wrong side, patient from an outpatient setting to an
acute care setting can be an indication
97 ECRI Institute. New clinical guide to surgical
92 National Quality Forum. 0263 Patient Burn. of a complication, serious medical error,
fire prevention. Health Devices 2009
Available at: http://www.qualityforum.org/QPS/ Oct;38(10):314–32.
0263. 98 170. National Fire Protection Association
102 ASC Quality Collaboration. Quality measures
93 National Quality Forum. 0267 Wrong Site, developed and tested by the ASC Quality
(NFPA). NFPA 99: Standard for health care
Wrong Side, Wrong Patient, Wrong Procedure, facilities. Quincy (MA): NFPA; 2005. Collaboration. Available at: http://ascquality.org/
Wrong Implant. Available at: http:// 99 ASC Quality Collaboration. Quality measures documents/2019-Summary-ASC-QC-Measures.pdf.
www.qualityforum.org/QPS/0267. developed and tested by the ASC Quality
103 National Quality Forum. Serious Reportable
94 National Quality Forum. 0266 Patient Fall. Events in Healthcare—2006 Update: A Consensus
Collaboration. Available at: http://ascquality.org/
Available at: http://www.qualityforum.org/QPS/ documents/2019-Summary-ASC-QC-Measures.pdf. Report. March 2007. Available at: https://
0266. 100 National Quality Forum. Serious Reportable www.qualityforum.org/Publications/2007/03/
95 ASC Quality Collaboration. Quality measures
Events in Healthcare—2006 Update: A Consensus Serious_Reportable_Events_in_Healthcare
developed and tested by the ASC Quality Report. March 2007. Available at: https:// %E2%80%932006_Update.aspx.
Collaboration. Available at: http://ascquality.org/ www.qualityforum.org/Publications/2007/03/ 104 American College of Obstetricians and
documents/2019-Summary-ASC-QC-Measures.pdf. Serious_Reportable_Events_in_ Gynecologists. ACOG committee opinion #464:

96 National Quality Forum. Serious Reportable Healthcare%E2%80%932006_Update.aspx. patient safety in the surgical environment. Obstet
Events in Healthcare 2006 Update. Washington, DC: 101 Boushon B, Nielsen G, Quigley P, Rutherford Gynecol. 2010;116(3):786–790.
NQF, 2007. Available at: https:// P, Taylor J, Shannon D. Transforming Care at the 105 ASC Quality Collaboration. Quality measures
www.qualityforum.org/Publications/2007/03/ Bedside How-to Guide: Reducing Patient Injuries developed and tested by the ASC Quality
Serious_Reportable_Events_in_Healthcare% from Falls. Cambridge, MA: Institute for Healthcare Collaboration. Available at: http://ascquality.org/
E2%80%932006_Update.aspx. Improvement; 2008. documents/2019-Summary-ASC-QC-Measures.pdf.
or other unplanned negative patient by the NQF about these measures adding these measures to the Hospital
outcome. We also stated that while should be considered and prioritized by OQR Program because the events of
acute intervention may be necessary in CMS. Several commenters suggested interest are already rare, and a few
these circumstances, a high rate of such that these measures should be specified pointed out that hospitals are already
incidents may indicate suboptimal for the HOPD setting, field tested, required to implement policies and
practices or patient selection criteria. reliability tested, and reviewed by the processes to mitigate the risk of these
These same potential negative patient Measure Applications Partnership events and several states have
outcomes apply to the HOPD setting. (MAP) before inclusion in the Hospital mandatory reporting of these types of
Further, we have reviewed studies OQR Program. Several commenters events. A few commenters stated
demonstrating the high impact of suggested that, with respect to ASC–4, concerns about the burden that would
monitoring patient transfers and CMS should consider overlap with OP– be created if these measures are added
admissions because facilities can take 36 Hospital Visits after Hospital to the Hospital OQR Program. One
steps to prevent and reduce these types Outpatient Surgery and should assess commenter stated that because these
of events.106 107 the need for clinical risk adjustment in events are rare in the outpatient setting,
We have provided a summary of the the HOPD setting. A few commenters the data is at risk of becoming
comments received and our responses to provided recommendations about identifiable if disclosed and publicly
those comments. potential data submission methods for reported. One commenter stated that
Comment: Many commenters were these measures in the Hospital OQR adding these measures to the Hospital
supportive of the potential future Program, with some specifically OQR Program would not contribute to
specification of ASC–1, ASC–2, ASC–3, supporting the use of an online data the CMS Meaningful Measurement goal.
and ASC–4 for the hospital outpatient submission tool such as QualityNet. Response: We thank the commenters
setting and the potential future addition However, several commenters did not for their recommendations and raising
of these measures to the Hospital OQR support using the QualityNet online tool these important concerns regarding the
Program. Several commenters stated (or a similar online tool) for submission, use of the ASC–1 through ASC–4
that these four measures should be and one commenter suggested that if a measures for the Hospital OQR Program.
adopted in the Hospital OQR Program in manual abstraction process is required, We will take these suggestions into
order to align with the ASCQR Program hospitals should be provided ample consideration as we consider adding
and to provide meaningful data for time to test and implement the these measures to the Hospital OQR
patients to compare performance in measures. One commenter Program in the future.
ASCs and HOPDs. A few commenters recommended that CMS work with
stated that these four patient safety HOPDs and ASCs to identify current b. Future Outcome Measures
measures should be adopted in the forums where these safety issues are In the CY 2020 OPPS/ASC proposed
Hospital OQR Program because they documented, discussed, and remedied. rule (84 FR 39558), we also requested
focus on areas of critical importance. A One commenter recommended that public comment on future measure
few commenters supported the plan for these measures should apply to all adult topics for the Hospital OQR Program.
CMS to work with the measure patients, not just Medicare fee-for- Specifically, we requested public
developer to improve the data service patients. comment on any outcome measures that
submission methods and to ensure the Response: We thank the commenters
would be useful to add as well as
measures are appropriately specified for for their recommendations regarding
feedback on any process measures that
the hospital outpatient setting. A few potentially specifying ASC–1, ASC–2,
should be eliminated from the Hospital
commenters recommended expedited ASC–3, and ASC–4 for the hospital
OQR Program to further our goal of
development and implementation of outpatient setting, interface with
developing a comprehensive set of
these measures in the hospital existing ASCQR Program measures, data
quality measures for informed decision-
outpatient setting. submission methods, risk adjustment
making and quality improvement in
Response: We thank the commenters issues, and potentially adding these
HOPDs. We are moving towards greater
for their support for the potential future measures to the Hospital OQR Program
use of outcome measures and away from
specification of ASC–1, ASC–2, ASC–3, in the future. We note that as currently
use of clinical process measures across
and ASC–4 for the hospital outpatient specified, these measures apply to all
our Medicare quality reporting programs
setting and the potential future addition patients and they are not limited to fee-
to better assess the results of care. The
of these measures to the Hospital OQR for-service Medicare patients.108
current measure set for the Hospital
Program. Comment: Many commenters
OQR Program includes measures that
Comment: Many commenters expressed concern to the potential
assess process of care, imaging
provided recommendations regarding future specification of ASC–1, ASC–2,
efficiency patterns, care transitions,
potentially specifying ASC–1, ASC–2, ASC–3, and ASC–4 for the hospital
(Emergency Department) ED throughput
ASC–3, and ASC–4 for the hospital outpatient setting and the potential
efficiency, Health Information
outpatient setting and potentially future addition of these measures to the
Technology (health IT) use, care
adding these measures to the Hospital Hospital OQR Program. Several
coordination, and patient safety.
OQR Program in the future. Several expressed concern that the measures are
Measures are of various types, including
commenters stated that decisions made not endorsed by the National Quality
those of process, structure, outcome,
Forum. A few commenters stated that
and efficiency. Through future
106 Coley KC, Williams BA, DaPos SV, Chen C, they believe because these measures
rulemaking, we intend to propose new
Smith RB. Retrospective evaluation of were designed specifically for ASCs,
unanticipated admissions and readmissions after measures that support our goal of
they would not be appropriate for use in
same day surgery and associated costs. J Clin achieving better health care and
the hospital outpatient setting. Several
Anesth. 2002 Aug; 14(5):349–53. improved health for Medicare
107 Junger A, Klasen J, Benson M, Sciuk G, commenters expressed concern about
beneficiaries who receive health care in
Hartmann B, Sticher J, Hempelmann G. Factors
determining length of stay of surgical day-case 108 ASCQR Specifications Manuals are available the HOPD setting, while aligning quality
patients. Eur J Anaesthesiol. 2001 May;18(5):314– at https://www.qualitynet.org/asc/specifications- measures across the Medicare program
21. manuals. to the extent possible.
Comment: A few commenters comment period (83 FR 59104 through 2. Requirements Regarding Participation
recommended that CMS add more 59105), where we changed the Status
measures to the Hospital OQR Program frequency of the Hospital OQR Program We refer readers to the CY 2014
that would align with the ASCQR Specifications Manual release beginning OPPS/ASC final rule with comment
Program. One commenter suggested that with CY 2019 and for subsequent years, period (78 FR 75108 through 75109), the
CMS incorporate patient experience, such that we will release a manual once CY 2016 OPPS/ASC final rule with
safety and reliability, clinical quality, every 12 months and release addenda as comment period (80 FR 70519) and the
and provider engagement measures in necessary. We did not propose any CY 2019 OPPS/ASC final rule with
the Hospital OQR Program. One changes to these policies in the CY 2020 comment period (83 FR 59103 through
commenter recommended that CMS OPPS/ASC proposed rule (84 FR 39558). 59104) for requirements for
include the Adult Immunization Status participation and withdrawal from the
measure in the Hospital OQR Program. 7. Public Display of Quality Measures
Hospital OQR Program. We codified
Response: We thank the commenters these procedural requirements regarding
for these recommendations for We refer readers to the CY 2014 and
CY 2017 OPPS/ASC final rules with participation status at 42 CFR 419.46(a)
additional measures for the Hospital and (b). We did not propose any
OQR Program. We agree that alignment comment period (78 FR 75092 and 81
FR 79791 respectively) for our changes to our participation status
with the ASCQR Program is an policies in the CY 2020 OPPS/ASC
important consideration; to that end, as previously finalized policies regarding
public display of quality measures. In proposed rule (84 FR 39559).
discussed in section XIV.B.a of this final
rule with comment period, we requested the CY 2020 OPPS/ASC proposed rule D. Form, Manner, and Timing of Data
comment on the use of the ASCQR (84 FR 39558), we did not propose any Submitted for the Hospital OQR
Program’s ASC–1 through ASC–4 changes to our previously finalized Program
measures for the Hospital OQR Program. public display policies. 1. Hospital OQR Program Annual
We thank the commenters for their
C. Administrative Requirements Payment Determinations
responses and will take these
suggestions into consideration as we 1. QualityNet Account and Security In the CY 2014 OPPS/ASC final rule
develop future Hospital OQR Program Administrator with comment period (78 FR 75110
measures and topics. through 75111) and the CY 2016 OPPS/
The previously finalized QualityNet ASC final rule with comment period (80
6. Maintenance of Technical FR 70519 through 70520), we specified
security administrator requirements,
Specifications for Quality Measures our data submission deadlines. We
including setting up a QualityNet
CMS maintains technical account and the associated timelines, codified these submission requirements
specifications for previously adopted are described in the CY 2014 OPPS/ASC at 42 CFR 419.46(c).
Hospital OQR Program measures. These final rule with comment period (78 FR We refer readers to the CY 2016
specifications are updated as we modify 75108 through 75109). We codified OPPS/ASC final rule with comment
the Hospital OQR Program measure set. these procedural requirements at 42 period (80 FR 70519 through 70520),
The manuals that contain specifications CFR 419.46(a) in that final rule with where we finalized our proposal to shift
for the previously adopted measures can comment period. We did not propose the quarters upon which the Hospital
be found on the QualityNet website at: OQR Program payment determinations
any changes to our requirements for the
https://www.qualitynet.org/dcs/ are based beginning with the CY 2018
QualityNet account and security
ContentServer?c=Page&pagename= payment determination. The deadlines
administrator in the CY 2020 OPPS/ASC
QnetPublic%2FPage%2FQnetTier2&cid for the CY 2022 payment determination
=1196289981244. We refer readers to proposed rule (84 FR 39559). and subsequent years are illustrated in
the CY 2019 OPPS/ASC final rule with Table 62.
In the CY 2018 OPPS/ASC final rule changes to these policies in the CY 2020 2. Requirements for Chart-Abstracted
with comment period, we finalized a OPPS/ASC proposed rule (84 FR 39559). Measures Where Patient-Level Data Are
policy to align the initial data Submitted Directly to CMS for the CY
submission timeline for all hospitals 2022 Payment Determination and
that did not participate in the previous Subsequent Years
year’s Hospital OQR Program and made
We refer readers to the CY 2013
conforming revisions at 42 CFR
OPPS/ASC final rule with comment
419.46(c)(3). We did not propose any
ER12NO19.104</GPH>
period (77 FR 68481 through 68484) for
a discussion of the form, manner, and 4. Data Submission Requirements for web-based tool for the CY 2022 payment
timing for data submission requirements the OP–37a–e: Outpatient and determination and subsequent years
of chart-abstracted measures for the CY Ambulatory Surgery Consumer with the exception of OP–31: Cataracts:
2014 payment determination and Assessment of Healthcare Providers and Improvement in Patient’s Visual
subsequent years. We did not propose Systems (OAS CAHPS) Survey-Based Function within 90 Days Following
any changes to these policies in the CY Measures for the CY 2022 Payment Cataract Surgery (NQF #1536): for
2020 OPPS/ASC proposed rule (84 FR Determination and Subsequent Years which data submission remains
39559). We refer readers to the CY 2017 voluntary:
The following previously finalized OPPS/ASC final rule with comment • OP–22: Left Without Being Seen
Hospital OQR Program chart-abstracted period (81 FR 79792 through 79794) for (NQF #0499) (via CMS’ QualityNet
measures will require patient-level data a discussion of the previously finalized website);
to be submitted for the CY 2022 • OP–29: Endoscopy/Polyp
requirements related to survey
payment determination and subsequent Surveillance: Appropriate Follow-up
administration and vendors for the OAS
years: Interval for Normal Colonoscopy in
CAHPS Survey-based measures. In
• OP–2: Fibrinolytic Therapy addition, we refer readers to the CY
Average Risk Patients (NQF #0658) (via
Received Within 30 Minutes of ED CMS’ QualityNet website); and
2018 OPPS/ASC final rule with • OP–31: Cataracts: Improvement in
Arrival (NQF #0288); comment period (82 FR 59432 through
• OP–3: Median Time to Transfer to Patient’s Visual Function within 90
59433), where we finalized a policy to Days Following Cataract Surgery (NQF
Another Facility for Acute Coronary delay implementation of the OP–37a–e
Intervention (NQF #0290); #1536) (via CMS’ QualityNet website).
OAS CAHPS Survey-based measures
• OP–18: Median Time from ED beginning with the CY 2020 payment 6. Population and Sampling Data
Arrival to ED Departure for Discharged determination (2018 reporting period) Requirements for the CY 2021 Payment
ED Patients (NQF #0496); and until further action in future Determination and Subsequent Years
• OP–23: Head CT Scan Results for rulemaking. In the CY 2020 OPPS/ASC We refer readers to the CY 2011
Acute Ischemic Stroke or Hemorrhagic proposed rule (84 FR 39560), we did not OPPS/ASC final rule with comment
Stroke Patients who Received Head CT propose any changes to the previously period (75 FR 72100 through 72103) and
Scan Interpretation Within 45 Minutes finalized requirements related to survey the CY 2012 OPPS/ASC final rule with
of ED Arrival (NQF #0661). administration and vendors for the OAS comment period (76 FR 74482 through
3. Claims-Based Measure Data CAHPS Survey-based measures. 74483) for discussions of our population
Requirements for the CY 2022 Payment 5. Data Submission Requirements for and sampling requirements. We did not
Determination and Subsequent Years Measures for Data Submitted Via a Web- propose any changes to our population
Based Tool for the CY 2022 Payment and sampling requirements for chart-
Currently, the following previously
Determination and Subsequent Years abstracted measures in the CY 2020
finalized Hospital OQR Program claims-
OPPS/ASC proposed rule (84 FR 39560).
based measures are required for the CY We refer readers to the CY 2014
2022 payment determination and OPPS/ASC final rule with comment 7. Hospital OQR Program Validation
subsequent years: period (78 FR 75112 through 75115) and Requirements
• OP–8: MRI Lumbar Spine for Low the CY 2016 OPPS/ASC final rule with We refer readers to the CY 2013
Back Pain (NQF #0514); comment period (80 FR 70521) and the OPPS/ASC final rule with comment
• OP–10: Abdomen CT—Use of CMS QualityNet website (https:// period (77 FR 68484 through 68487), the
Contrast Material; www.qualitynet.org/dcs/ContentServer? CY 2015 OPPS/ASC final rule with
• OP–13: Cardiac Imaging for c=Page&pagename=QnetPublic comment period (79 FR 66964 through
Preoperative Risk Assessment for Non- %2FPage%2FQnetTier2&cid= 66965), the CY 2016 OPPS/ASC final
Cardiac, Low Risk Surgery (NQF #0669); 1205442125082) for a discussion of the rule with comment period (80 FR
• OP–32: Facility 7-Day Risk- requirements for measure data 70524), and the CY 2018 OPPS/ASC
Standardized Hospital Visit Rate after submitted via the CMS QualityNet final rule with comment period (82 FR
Outpatient Colonoscopy (NQF #2539); website for the CY 2017 payment 59441 through 59443), and 42 CFR
• OP–35: Admissions and Emergency determination and subsequent years. In 419.46(e) for our policies regarding
Department Visits for Patients Receiving addition, we refer readers to the CY validation. We did not propose any
Outpatient Chemotherapy; and 2014 OPPS/ASC final rule with changes to these policies in the CY 2020
• OP–36: Hospital Visits after comment period (78 FR 75097 through OPPS/ASC proposed rule (84 FR 39560).
Hospital Outpatient Surgery (NQF 75100) for a discussion of the
#2687). requirements for measure data 8. Extraordinary Circumstances
We refer readers to the CY 2019 submitted via the CDC NHSN website. Exception (ECE) Process for the CY 2021
OPPS/ASC final rule with comment In the CY 2020 OPPS/ASC proposed Payment Determination and Subsequent
period (83 FR 59106 through 59107), rule (84 FR 39560), we did not propose Years
where we established a 3-year reporting any changes to our policies regarding We refer readers to the CY 2013
period for OP–32: Facility 7-Day Risk- the submission of measure data OPPS/ASC final rule with comment
Standardized Hospital Visit Rate after submitted via a web-based tool. period (77 FR 68489), the CY 2014
Outpatient Colonoscopy beginning with However, as discussed in section OPPS/ASC final rule with comment
the CY 2020 payment determination and XIV.B.3.b. of this final rule, we are period (78 FR 75119 through 75120), the
for subsequent years. In that final rule finalizing our proposal with CY 2015 OPPS/ASC final rule with
with comment period (83 FR 59136 modification to remove OP–33: EBRT comment period (79 FR 66966), the CY
through 59138), we established a similar for Bone Metastases beginning with the 2016 OPPS/ASC final rule with
policy under the ASCQR Program. We CY 2022 payment determination and for comment period (80 FR 70524), the CY
did not propose any changes to these subsequent years; so the following 2017 OPPS/ASC final rule with
policies in the CY 2020 OPPS/ASC previously finalized quality measures comment period (81 FR 79795), the CY
proposed rule (84 FR 39559). will require data to be submitted via a 2018 OPPS/ASC final rule with
comment period (82 FR 59444), and 42 ASC final rule with comment period (73 quality reporting requirements for the
CFR 419.46(d) for a complete discussion FR 68769 through 68772). CY 2010 OPPS, we multiplied the final
of our extraordinary circumstances The national unadjusted payment full national unadjusted payment rate
exception (ECE) process under the rates for many services paid under the found in Addendum B of the CY 2010
Hospital OQR Program. We did not OPPS equal the product of the OPPS OPPS/ASC final rule with comment
propose any changes to our ECE policy conversion factor and the scaled relative period by the CY 2010 OPPS final
in the CY 2020 OPPS/ASC proposed payment weight for the APC to which reporting ratio of 0.980 (74 FR 60642).
rule (84 FR 39560). the service is assigned. The OPPS In the CY 2009 OPPS/ASC final rule
conversion factor, which is updated with comment period (73 FR 68771
9. Hospital OQR Program annually by the OPD fee schedule through 68772), we established a policy
Reconsideration and Appeals increase factor, is used to calculate the that the Medicare beneficiary’s
Procedures for the CY 2021 Payment OPPS payment rate for services with the minimum unadjusted copayment and
Determination and Subsequent Years following status indicators (listed in national unadjusted copayment for a
We refer readers to the CY 2013 Addendum B to the proposed rule, service to which a reduced national
OPPS/ASC final rule with comment which is available via the internet on unadjusted payment rate applies would
period (77 FR 68487 through 68489), the the CMS website): ‘‘J1’’, ‘‘J2’’, ‘‘P’’, each equal the product of the reporting
CY 2014 OPPS/ASC final rule with ‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’, ‘‘R’’, ‘‘S’’, ‘‘T’’, ‘‘V’’, ratio and the national unadjusted
comment period (78 FR 75118 through or ‘‘U’’. In the CY 2017 OPPS/ASC final copayment or the minimum unadjusted
75119), the CY 2016 OPPS/ASC final rule with comment period (81 FR copayment, as applicable, for the
rule with comment period (80 FR 79796), we clarified that the reporting service. Under this policy, we apply the
70524), the CY 2017 OPPS/ASC final ratio does not apply to codes with status reporting ratio to both the minimum
rule with comment period (81 FR indicator ‘‘Q4’’ because services and unadjusted copayment and national
79795), and 42 CFR 419.46(f) for our procedures coded with status indicator unadjusted copayment for services
reconsideration and appeals procedures. ‘‘Q4’’ are either packaged or paid provided by hospitals that receive the
We did not propose any changes to our through the Clinical Laboratory Fee payment reduction for failure to meet
reconsideration and appeals procedures Schedule and are never paid separately the Hospital OQR Program reporting
in the CY 2020 OPPS/ASC proposed through the OPPS. Payment for all requirements. This application of the
rule (84 FR 39560). services assigned to these status reporting ratio to the national
indicators will be subject to the unadjusted and minimum unadjusted
E. Payment Reduction for Hospitals reduction of the national unadjusted copayments is calculated according to
That Fail To Meet the Hospital OQR payment rates for hospitals that fail to § 419.41 of our regulations, prior to any
Program Requirements for the CY 2020 meet Hospital OQR Program adjustment for a hospital’s failure to
Payment Determination requirements, with the exception of meet the quality reporting standards
1. Background services assigned to New Technology according to § 419.43(h). Beneficiaries
APCs with assigned status indicator ‘‘S’’ and secondary payers thereby share in
Section 1833(t)(17) of the Act, which or ‘‘‘T’’. We refer readers to the CY 2009 the reduction of payments to these
applies to subsection (d) hospitals (as OPPS/ASC final rule with comment hospitals.
defined under section 1886(d)(1)(B) of period (73 FR 68770 through 68771) for In the CY 2009 OPPS/ASC final rule
the Act), states that hospitals that fail to a discussion of this policy. with comment period (73 FR 68772), we
report data required to be submitted on The OPD fee schedule increase factor established the policy that all other
measures selected by the Secretary, in is an input into the OPPS conversion applicable adjustments to the OPPS
the form and manner, and at a time, factor, which is used to calculate OPPS national unadjusted payment rates
specified by the Secretary will incur a payment rates. To reduce the OPD fee apply when the OPD fee schedule
2.0 percentage point reduction to their schedule increase factor for hospitals increase factor is reduced for hospitals
Outpatient Department (OPD) fee that fail to meet reporting requirements, that fail to meet the requirements of the
schedule increase factor; that is, the we calculate two conversion factors—a Hospital OQR Program. For example,
annual payment update factor. Section full market basket conversion factor the following standard adjustments
1833(t)(17)(A)(ii) of the Act specifies (that is, the full conversion factor), and apply to the reduced national
that any reduction applies only to the a reduced market basket conversion unadjusted payment rates: The wage
payment year involved and will not be factor (that is, the reduced conversion index adjustment; the multiple
taken into account in computing the factor). We then calculate a reduction procedure adjustment; the interrupted
applicable OPD fee schedule increase ratio by dividing the reduced procedure adjustment; the rural sole
factor for a subsequent year. conversion factor by the full conversion community hospital adjustment; and the
The application of a reduced OPD fee factor. We refer to this reduction ratio as adjustment for devices furnished with
schedule increase factor results in the ‘‘reporting ratio’’ to indicate that it full or partial credit or without cost.
reduced national unadjusted payment applies to payment for hospitals that fail Similarly, OPPS outlier payments made
rates that apply to certain outpatient to meet their reporting requirements. for high cost and complex procedures
items and services provided by Applying this reporting ratio to the will continue to be made when outlier
hospitals that are required to report OPPS payment amounts results in criteria are met. For hospitals that fail to
outpatient quality data in order to reduced national unadjusted payment meet the quality data reporting
receive the full payment update factor rates that are mathematically equivalent requirements, the hospitals’ costs are
and that fail to meet the Hospital OQR to the reduced national unadjusted compared to the reduced payments for
Program requirements. Hospitals that payment rates that would result if we purposes of outlier eligibility and
meet the reporting requirements receive multiplied the scaled OPPS relative payment calculation. We established
the full OPPS payment update without payment weights by the reduced this policy in the OPPS beginning in the
the reduction. For a more detailed conversion factor. For example, to CY 2010 OPPS/ASC final rule with
discussion of how this payment determine the reduced national comment period (74 FR 60642). For a
reduction was initially implemented, unadjusted payment rates that applied complete discussion of the OPPS outlier
we refer readers to the CY 2009 OPPS/ to hospitals that failed to meet their calculation and eligibility criteria, we
refer readers to section II.G. of the XV. Requirements for the Ambulatory any changes to these policies in the CY
proposed rule. Surgical Center Quality Reporting 2020 OPPS/ASC proposed rule (84 FR
(ASCQR) Program 39562).
2. Reporting Ratio Application and
Associated Adjustment Policy for CY A. Background 2. Policies for Retention and Removal of
2020 Quality Measures From the ASCQR
1. Overview
We proposed to continue our Program
We refer readers to section XIV.A.1. of
established policy of applying the a. Retention of Previously Adopted
this final rule with comment period for
reduction of the OPD fee schedule ASCQR Program Measures
a general overview of our quality
increase factor through the use of a
reporting programs and to the CY 2019 We previously finalized a policy that
reporting ratio for those hospitals that
fail to meet the Hospital OQR Program OPPS/ASC final rule with comment quality measures adopted for an ASCQR
requirements for the full CY 2020 period (83 FR 58820 through 58822) Program measure set for a previous
annual payment update factor. For the where we discuss our Meaningful payment determination year be retained
CY 2020 OPPS/ASC proposed rule (84 Measures Initiative and our approach in in the ASCQR Program for measure sets
FR 39560), the proposed reporting ratio evaluating quality program measures. for subsequent payment determination
was 0.980, which when multiplied by years, except when they are removed,
2. Statutory History of the ASCQR
the proposed full conversion factor of suspended, or replaced as indicated (76
Program
$81.398 equaled a proposed conversion FR 74494 and 74504; 77 FR 68494
We refer readers to the CY 2012 through 68495; 78 FR 75122; and 79 FR
factor for hospitals that fail to meet the OPPS/ASC final rule with comment
requirements of the Hospital OQR 66967 through 66969). We did not
period (76 FR 74492 through 74494) for propose any changes to this policy in
Program (that is, the reduced conversion
a detailed discussion of the statutory the CY 2020 OPPS/ASC proposed rule
factor) of $79.770. We proposed to
history of the ASCQR Program. (83 FR 39562).
continue to apply the reporting ratio to
all services calculated using the OPPS 3. Regulatory History of the ASCQR b. Removal Factors for ASCQR Program
conversion factor. For the CY 2020 Program Measures
OPPS/ASC proposed rule (84 FR 39560), We seek to promote higher quality
we proposed to apply the reporting In the CY 2019 OPPS/ASC final rule
and more efficient health care for with comment period (83 FR 59111
ratio, when applicable, to all HCPCS beneficiaries. This effort is supported by
codes to which we have proposed status through 59115), we clarified, finalized
the adoption of widely accepted quality and codified at 42 CFR 416.320 an
indicator assignments of ‘‘J1’’, ‘‘J2’’, ‘‘P’’, of care measures. We have collaborated
‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’, ‘‘R’’, ‘‘S’’, ‘‘T’’, ‘‘V’’, updated set of factors 109 and the
with relevant stakeholders to define process for removing measures from the
and ‘‘U’’ (other than new technology such measures in most healthcare
APCs to which we have proposed status ASCQR Program. The factors are:
settings and currently measure some • Factor 1. Measure performance
indicator assignment of ‘‘S’’ and ‘‘T’’). aspect of care for almost all settings of
We proposed to continue to exclude among ASCs is so high and unvarying
care available to Medicare beneficiaries. that meaningful distinctions and
services paid under New Technology These measures assess structural aspects
APCs. We proposed to continue to apply improvements in performance can no
of care, clinical processes, patient longer be made (‘‘topped-out’’
the reporting ratio to the national experiences with care, and clinical
unadjusted payment rates and the measures).
outcomes. We have implemented • Factor 2. Performance or
minimum unadjusted and national
quality measure reporting programs for improvement on a measure does not
unadjusted copayment rates of all
multiple healthcare settings. To measure result in better patient outcomes.
applicable services for those hospitals
the quality of ASC services and to make • Factor 3. A measure does not align
that fail to meet the Hospital OQR
such information publicly available, we with current clinical guidelines or
Program reporting requirements. We
implemented the ASCQR Program. We practice.
also proposed to continue to apply all
refer readers to the CYs 2014 through • Factor 4. The availability of a more
other applicable standard adjustments
2019 OPPS/ASC final rules with broadly applicable (across settings,
to the OPPS national unadjusted
comment period (78 FR 75122; 79 FR populations, or conditions) measure for
payment rates for hospitals that fail to
meet the requirements of the Hospital 66966 through 66987; 80 FR 70526 the topic.
OQR Program. Similarly, we proposed through 70538; 81 FR 79797 through • Factor 5. The availability of a
to continue to calculate OPPS outlier 79826; 82 FR 59445 through 59476; and measure that is more proximal in time
eligibility and outlier payment based on 83 FR 59110 through 59139, to desired patient outcomes for the
the reduced payment rates for those respectively) for an overview of the particular topic.
hospitals that fail to meet the reporting regulatory history of the ASCQR • Factor 6. The availability of a
requirements. Program. We have codified certain measure that is more strongly associated
For the CY 2020 OPPS/ASC final rule, requirements under the ASCQR Program with desired patient outcomes for the
the final reporting ratio is 0.981, which at 42 CFR, part 16, subpart H (42 CFR particular topic.
when multiplied by the final full 416.300 through 416.330). • Factor 7. Collection or public
conversion factor of 80.784 equals a B. ASCQR Program Quality Measures reporting of a measure leads to negative
final conversion factor for hospitals that unintended consequences other than
fail to meet the requirements of the 1. Considerations in the Selection of patient harm.
Hospital OQR Program (that is, the ASCQR Program Quality Measures
reduced conversion factor) of 79.250. We refer readers to the CY 2013 109 We note that we previously referred to these
We also are finalizing the remainder of OPPS/ASC final rule with comment factors as ‘‘criteria’’ (for example, 79 FR 66967
our proposals regarding the payment period (77 FR 68493 through 68494) for through 66969); we now use the term ‘‘factors’’ in
order to align the ASCQR Program terminology with
reduction for hospitals that fail to meet a detailed discussion of the priorities we the terminology we use in other CMS quality
the Hospital OQR Program requirements consider for ASCQR Program quality reporting and pay-for-performance (value-based
for CY 2019 payment. measure selection. We did not propose purchasing) programs.
• Factor 8. The costs associated with While ambulatory surgery is frequency of such events also varies
a measure outweigh the benefit of its considered low risk for complications, among ASCs, suggesting variation in
continued use in the program. there are well-described and potentially quality of pre-surgical assessment,
We refer readers to the CY 2019 preventable adverse events that can surgical care, post-surgical care, and the
OPPS/ASC final rule with comment occur after ambulatory surgery leading care and support provided to patients
period (83 FR 59111 through 59115) for to unplanned care at a hospital, such as post-discharge.131 132 133 134 135 136 137 138
a detailed discussion of our process emergency department (ED) visits, We calculated the national unadjusted
regarding measure removal. observation stays, or hospital rate of hospital visits (ED visits,
admissions. These events include observation stays, or hospital
3. Proposal to Adopt ASC–19: Facility- uncontrolled pain, urinary retention, admissions) following any general
Level 7-Day Hospital Visits after General infection, bleeding, and venous surgery procedure at an ASC. In a
Surgery Procedures Performed at thromboembolism.112 113 Medicare FFS dataset of claims for
Ambulatory Surgical Centers (NQF Hospital visits following same-day services during CY 2015 (January 1,
#3357) for the ASCQR Program Measure surgery are an important and broadly 2015–December 31, 2015), the
Set accepted patient-centered outcome distribution of unadjusted outcome rates
In the CY 2020 OPPS/ASC proposed reported in the was skewed, suggesting variation in
rule (84 FR 39562 through 39567), we literature.114 115 116 117 118 119 120 121 quality of care. Among 1,153 ASCs with
proposed one new quality measure for National estimates of hospital visit rates at least 25 qualifying general surgery
the ASCQR Program for the CY 2024 following outpatient surgery vary from cases in the Medicare FFS CY 2015
payment determination and subsequent 0.5 to 9.0 percent, based on the type of dataset, the unadjusted rate of
years; ASC–19: Facility-Level 7-Day surgery, outcome measured (admissions unplanned hospital visits ranged from
Hospital Visits after General Surgery alone or admissions and ED visits), and
Procedures Performed at Ambulatory length of time between the surgery and 124 Baugh RR. Safety of outpatient surgery for
Surgical Centers (NQF #3357). the hospital obstructive sleep apnea. Otolaryngology—head and
visit.122 123 124 125 126 127 128 129 130 The neck surgery. 2013;148(5):867–872.
125 Bhattacharyya N. Ambulatory sinus and nasal
a. Background
surgery in the United States: Demographics and
112 Coley KC, Williams BA, DaPos SV, Chen C,
Ambulatory surgery in the outpatient Smith RB. Retrospective evaluation of
perioperative outcomes. The Laryngoscope.
setting is common in the United States. 2010;120(3):635–638.
unanticipated admissions and readmissions after 126 Bhattacharyya NN. Unplanned revisits and
Nearly 70 percent of all surgeries in the same day surgery and associated costs. Journal of
readmissions after ambulatory sinonasal surgery.
United States are performed in an clinical anesthesia. 2002;14(5):349–353.
113 Bain J, Kelly H, Snadden D, Staines H. Day
The Laryngoscope. 2014;124(9):1983–1987.
outpatient setting with an expanding 127 Bhattacharyya NN. Revisits and postoperative
surgery in Scotland: Patient satisfaction and
number and variety of procedures being outcomes. Quality in Health Care. 1999;8(2):86–91.
hemorrhage after adult tonsillectomy. The
performed at stand-alone ASCs.110 111 114 Majholm BB. Is day surgery safe? A Danish
Laryngoscope. 2014;124(7):1554–1556.
128 Hansen DG, Abbott LE, Johnson RM, Fox JP.
General surgery procedures are multicentre study of morbidity after 57,709 day
Variation in hospital-based acute care within 30
commonly performed at ASCs. Based on surgery procedures. Acta anaesthesiologica
Scandinavica. 2012;56(3):323–331. days of outpatient plastic surgery. Plastic and
an analysis of Medicare fee-for-service 115 Whippey A, Kostandoff G, Paul J, Ma J,
reconstructive surgery (1963). 2014;134(3):370e–
(FFS) claims for patients aged 65 years 378e.
Thabane L, Ma HK. Predictors of unanticipated 129 Mahboubi HH. Ambulatory laryngopharyngeal
and older, from January 1, 2015 through admission following ambulatory surgery: A
retrospective case-control study. Canadian Journal surgery: Evaluation of the national survey of
December 31, 2015, 3,251 ASCs ambulatory surgery. JAMA otolaryngology— head &
of Anesthesia/Journal canadien d’anesthésie.
performed 149,468 general surgery 2013;60(7):675–683. neck surgery. 2013;139(1):28–31.
procedures. These procedures include 116 Fleisher LA, Pasternak LR, Herbert R,
130 Orosco RKRK. Ambulatory thyroidectomy: A
abdominal, alimentary tract, breast, Anderson GF. Inpatient hospital admission and multistate study of revisits and complications.
death after outpatient surgery in elderly patients: Otolaryngology—head and neck surgery.
skin/soft tissue, wound, and varicose 2015;152(6):1017–1023.
Importance of patient and system characteristics
vein stripping procedures. Of the 3,251 and location of care. Arch Surg. 2004;139(1):67–72. 131 Baugh RR. Safety of outpatient surgery for
ASCs that performed general surgery 117 Coley KC, Williams BA, DaPos SV, Chen C, obstructive sleep apnea. Otolaryngology—head and
procedures, 1,157 (35.5 percent) Smith RB. Retrospective evaluation of neck surgery. 2013;148(5):867–872.
132 Bhattacharyya N. Ambulatory sinus and nasal
performed at least 25 such procedures unanticipated admissions and readmissions after
same day surgery and associated costs. Journal of surgery in the United States: Demographics and
during this time period. Because of the perioperative outcomes. The Laryngoscope.
clinical anesthesia. 2002;14(5):349–353.
large number of general surgery 118 Hollingsworth JMJM. Surgical quality among 2010;120(3):635–638.
procedures that occur in the ambulatory Medicare beneficiaries undergoing outpatient 133 Bhattacharyya NN. Unplanned revisits and
setting, we believe that adopting ASC– urological surgery. The Journal of urology. readmissions after ambulatory sinonasal surgery.
19: Facility-Level 7-Day Hospital Visits 2012;188(4):1274–1278. The Laryngoscope. 2014;124(9):1983–1987.
119 Bain J, Kelly H, Snadden D, Staines H. Day 134 Bhattacharyya NN. Revisits and postoperative
after General Surgery Procedures surgery in Scotland: Patient satisfaction and hemorrhage after adult tonsillectomy. The
Performed at Ambulatory Surgical outcomes. Quality in Health Care. 1999;8(2):86–91. Laryngoscope. 2014;124(7):1554–1556.
Centers in the ASCQR Program will 120 Fortier J, Chung F, Su J. Unanticipated 135 Hansen DG, Abbott LE, Johnson RM, Fox JP.
provide beneficiaries with transparent admission after ambulatory surgery—a prospective Variation in hospital-based acute care within 30
quality data that can be utilized in study. Canadian journal of anaesthesia = Journal days of outpatient plastic surgery. Plastic and
canadien d’anesthesie. 1998;45(7):612–619. reconstructive surgery (1963). 2014;134(3):370e–
choosing healthcare facilities. 121 Aldwinckle R, Montgomery J. Unplanned 378e.
admission rates and postdischarge complications in 136 Mahboubi HH. Ambulatory laryngopharyngeal
110 Cullen KA, Hall MJ, Golosinskiy A, Statistics patients over the age of 70 following day case surgery: Evaluation of the national survey of
NCfH. Ambulatory surgery in the United States, surgery. Anaesthesia. 2004;59(1):57–59. ambulatory surgery. JAMA otolaryngology— head &
2006. US Department of Health and Human 122 Coley KC, Williams BA, DaPos SV, Chen C, neck surgery. 2013;139(1):28–31.
Services, Centers for Disease Control and Smith RB. Retrospective evaluation of 137 Menachemi. Quality of care differs by patient
Prevention, National Center for Health Statistics; unanticipated admissions and readmissions after characteristics: Outcome disparities after
2009. same day surgery and associated costs. Journal of ambulatory surgical procedures. American journal
111 Medicare Payment Advisory Committee. clinical anesthesia. 2002;14(5):349–353. of medical quality. 2007;22(6):395–401.
Report for the Congress: Medicare Payment Policy, 123 Hollingsworth JMJM. Surgical quality among 138 Orosco RKRK. Ambulatory thyroidectomy: A
March 2019. http://medpac.gov/docs/default- Medicare beneficiaries undergoing outpatient multistate study of revisits and complications.
source/reports/mar19_medpac_entirereport_ urological surgery. The Journal of urology. Otolaryngology—head and neck surgery.
sec.pdf?sfvrsn=0. Accessed May 24, 2019. 2012;188(4):1274–1278. 2015;152(6):1017–1023.
0.0 percent to 13.2 percent. These comment period for a full discussion on at Ambulatory Surgical Centers measure
results suggest opportunity for ASCs to the measure outcome calculation. was included on a publicly available
improve the quality of care for patients document entitled ‘‘List of Measures
b. Overview of Measure
seeking general surgery procedures. under Consideration for December 1,
ASCs may be unaware of patients’ The proposed ASC–19 measure is a 2017.’’ 140 The Measures Applications
subsequent unplanned hospital visits risk-adjusted outcome measure of acute, Partnership (MAP) reviewed this
given that patients tend to present to the unplanned hospital visits within 7 days measure (MUC17–233) and provided
ED or to hospitals unaffiliated with the of a general surgery procedure conditional support for rulemaking,
ASC. In addition, information on the performed at an ASC among Medicare pending NQF review and endorsement,
rate of patients’ subsequent unplanned FFS patients aged 65 years and older. with the recognition that this measure
hospital visits would provide We define an unplanned hospital visit assesses an important outcome for
transparent data to beneficiaries that as including an ED visit, observation patients receiving care at ASCs.141 The
could be utilized when choosing stay, or unplanned inpatient admission. MAP had some concerns about the
ambulatory surgery sites of care. Quality The measure aligns with the attribution model of the measure, noting
measurement of the number of Admissions and Readmissions to that hospital visits after ASC procedures
unplanned hospital visits following Hospitals and Preventable Healthcare are relatively rare events and could
general surgery procedures performed at Harm Meaningful Measure areas of our disproportionately affect low-income or
ASCs, coupled with transparency Meaningful Measures Initiative.139 This rural ASCs and that the measure may
through public reporting would make measure was developed with input from need risk adjustment for social risk
these outcomes more visible to both a national Technical Expert Panel (TEP) factors. At the time of the MAP’s review,
ASCs and beneficiaries. Therefore, we consisting of patients, surgeons, this measure was still undergoing field
expect that this would encourage ASCs methodologists, researchers, and testing.
to incorporate quality improvement providers. We also held a three-week Since the MAP’s conditional
activities to reduce the number of public comment period soliciting support,142 we completed testing for the
unplanned hospital visits and track stakeholder input on the measure proposed ASC–19 measure by
quality improvement over time. methodology, and publicly posted a estimating risk-standardized scores
Therefore, in the CY 2020 OPPS/ASC summary of the comments received as using two full years of Medicare FFS
proposed rule (84 FR 39562 through well as our responses (available in the claims data (CYs 2014 and 2015)
39567), we proposed to adopt ASC–19: Downloads section at: https:// containing 286,999 procedures. The
Facility-Level 7-Day Hospital Visits after www.cms.gov/Medicare/Quality- results showed score variation across
General Surgery Procedures Performed Initiatives-Patient-Assessment- ASCs, from a minimum risk-
at Ambulatory Surgical Centers (NQF Instruments/MMS/PC-Updates-on- standardized ratio of 0.42 to a maximum
#3357) (hereafter referred to as the Previous-Comment-Periods.html). of 2.13; the median was 0.97 and the
proposed ASC–19 measure) into the During the measure development 25th and 75th percentiles were 0.90 and
ASCQR Program for the CY 2024 public comment period, we received 1.10, respectively. After adjusting for
payment determination and subsequent public comment recommending the case and procedure mixes of ASCs,
years. removal of two specific procedures (CPT these results suggest there are
The proposed ASC–19 measure was 29893 endoscopic plantar and CPT underlying differences in the quality of
developed in conjunction with two 69222 clean out mastoid cavity) deemed care and opportunities for quality
other measures adopted for the ASCQR outside the scope of general surgery and improvement. The reliability testing
Program beginning with the CY 2022 to review the cohort procedure list with found an intraclass correlation
payment determination as finalized in general surgeons to ensure coefficient (ICC) score of 0.530,
the CY 2018 OPPS/ASC final rule with appropriateness. In response to this indicating moderate measure score
comment period: ASC–17: Hospital feedback, we reviewed the cohort of reliability.143 We considered the face
Visits After Orthopedic Ambulatory procedures incorporating feedback from validity of the measure score among
Surgical Center Procedures (82 FR general surgeons and removed 15 TEP members. Among the 14 TEP
59455) and ASC–18: Hospital Visits individual skin/soft tissue and wound members, 12 agreed that the measure
After Urology Ambulatory Surgical procedure codes from the measure that scores are valid and useful measures of
Center Procedures (82 FR 59463). All are outside the scope of general surgery ASC quality of care for general surgery
three measures assess the same patient practice. These procedures include procedures and will provide ASCs with
outcome for care provided in the ASC those specifically suggested for removal information that can be used to improve
setting and use the same risk-adjustment (that is, endoscopic plantar and clean their quality of care. Detailed testing
methodology. These three measures out mastoid cavity) as well as chemical results are available in the technical
differ in surgical procedures considered peels, dermabrasions, and nerve report for this measure, located at:
(orthopedic, urological, or general procedures. https://www.cms.gov/Medicare/Quality-
surgery), specific risk variables Section 1890A of the Act requires the Initiatives-Patient-Assessment-
included, and reporting of the outcome, Secretary to establish a pre-rulemaking
unplanned hospital visits. The proposed process with respect to the selection of 140 National Quality Forum. List of Measures
ASC–19 measure reports the outcome as certain categories of quality and under Consideration for December 1, 2017.
a risk-standardized ratio because the efficiency measures. Under section Available at: http://www.qualityforum.org/
diverse mix of procedures included in WorkArea/linkit.aspx?LinkIdentifier=
1890A(a)(2) of the Act, the Secretary id&ItemID=86526.
the proposed ASC–19 measure can have must make available to the public by 141 National Quality Forum. MAP 2018
varying levels of risk of unplanned December 1 of each year a list of quality Considerations for Implementing Measures:
hospital visits; while the ASC–17 and and efficiency measures that the Hospitals—Final Report. Available at: http://
ASC–18 measures report a risk- Secretary is considering. The ASC–19: www.qualityforum.org/WorkArea/linkit.aspx?
LinkIdentifier=id&ItemID=87096.
standardized rate that reflects clinically Facility-Level 7-Day Hospital Visits after 142 Ibid.
specific cohorts with fairly comparable General Surgery Procedures Performed 143 Landis JR, Koch GG. The Measurement of
mixes of procedures. We refer readers to Observer Agreement for Categorical Data.
section XV.B.3.d. of this final rule with 139 83 FR 58820 through 58822. Biometrics. 1977;33(1):159–174.
Instruments/HospitalQualityInits/ appropriate to incorporate this proposed of the next procedure) and then 7 days
Measure-Methodology.html. measure into the ASCQR Program after the last procedure.
On June 6, 2018, the NQF’s Consensus measure set because collecting and The facility-level score is a risk-
Standards Approval Committee publicly reporting these data would standardized hospital visit ratio
endorsed ASC–19: Facility-Level 7-Day increase transparency, inform patients (RSHVR), an approach that accounts for
Hospital Visits after General Surgery and ASCs, and foster quality the clustering of patients within ASCs
Procedures Performed at Ambulatory improvement efforts. and variation in sample size across
Surgical Centers (NQF #3357).144 The ASCs. The proposed ASC–19 measure
proposed ASC–19 measure is consistent c. Data Sources reports the outcome as a risk-
with the information submitted to the The proposed ASC–19 measure is standardized ratio because the diverse
NQF and the MAP, supporting its mix of procedures included in the
claims-based using Part A and Part B
scientific acceptability for use in quality proposed measure can have varying
Medicare administrative claims and
reporting programs. We note that we levels of risk of unplanned hospital
Medicare enrollment data to calculate
have made minor annual coding visits. The RSHVR is calculated as the
the measure.
updates to the measure to incorporate ratio of the predicted to the expected
changes to the CPT and ICD–10 coding In the CY 2020 OPPS/ASC proposed number of unplanned hospital visits
systems and to incorporate clinical rule (84 FR 39562 through 39567), we among ASC patients. For each ASC, the
input to remove select procedures proposed that the data collection period numerator of the ratio is the number of
outside the scope of general surgery as for the proposed ASC–19 measure hospital visits predicted for the ASC’s
noted above, endoscopic plantar, clean would be the 2 calendar years ending 2 patients accounting for its observed rate,
out mastoid cavity, chemical peels, years prior to the applicable payment the number of the general surgery
dermabrasions, and nerve procedures. determination year. For example, for the procedures performed at the ASC, the
For the current list of codes that define CY 2024 payment determination, the case-mix, and the surgical complexity
the proposed ASC–19 measure and a data collection period would be CYs mix. The denominator of the ratio is the
description of updates since 2021 to 2022. Because the measure data number of hospital visits expected
development, we refer readers to the zip are collected via claims, ASCs will not nationally given the ASC’s case-mix and
file labeled ‘‘Version 1.0 Hospital Visits need to submit any additional data surgical complexity mix. To calculate an
General Surgery ASC Procedures directly to CMS. We refer readers to ASC’s predicted-to-expected (P/E) ratio,
Measure Technical Report’’ located at: section XV.D.4. of this final rule with the measure uses a two-level
https://www.cms.gov/Medicare/Quality- comment period for a more detailed hierarchical logistic regression model.
Initiatives-Patient-Assessment- discussion of the requirements for data The log-odds of the outcome for an
Instruments/HospitalQualityInits/ submitted via claims. index procedure is modeled as a
Measure-Methodology.html. function of the patient demographic,
We believe this proposed measure d. Measure Calculation
comorbidity, procedure characteristics,
reflects consensus among stakeholders The measure outcome is all-cause, and a random ASC-specific intercept. A
because it was developed with unplanned hospital visits within 7 days ratio of less than one indicates the ASC
stakeholder input from a TEP convened of any general surgery procedure facility’s patients were estimated as
by a CMS contractor as well as from the performed at an ASC. For the purposes having fewer post-surgical visits than
measure development public comment of this measure, ‘‘hospital visits’’ expected compared to ASCs with
period.145 During the measure include emergency department visits, similar surgical complexity and
development processes and the MAP observation stays, and unplanned patients; and a ratio of greater than one
meeting, the majority of public inpatient admissions. The outcome of indicates the ASC facility’s patients
commenters supported the measure’s hospital visits is limited to 7 days since were estimated as having more visits
focus on assessing patient outcomes existing literature suggests that the vast than expected. This approach is
after general surgery procedures majority of adverse events after analogous to an observed-to-expected
performed in ASC setting of care. Most outpatient surgery occur within the first ratio, but the method accounts for
commenters supported MAP’s 7 days following the surgery.147 148 within-facility correlation of the
conditional support of the measure, When there are two or more qualifying observed outcome and sample size
noting it should be further developed surgical procedures within a 7-day differences, accommodates the
and NQF-endorsed before period, the measure considers all assumption that underlying differences
implementation in the ASCQR Program. procedures as index procedures; in quality across ASCs lead to
Importantly, the proposed ASC–19 however, the timeframe for outcome systematic differences in outcomes, and
measure addresses the MAP-identified assessment is defined as the interval is tailored to and appropriate for a
priority measure area of addressing between procedures (including the day publicly reported outcome measure as
preventable healthcare harm, such as articulated in published scientific
surgical complications, for the ASCQR guidelines.149 150 151 For more
Specific Measure Needs and Priorities’’. Available
Program.146 Therefore, we believe it is at: https://www.cms.gov/Medicare/Quality-
Initiatives-Patient-Assessment-Instruments/ 149 Krumholz HM, Brindis RG, Brush JE, et al.
144 National Quality Forum. Facility-Level 7-Day QualityMeasures/Downloads/2018-CMS- Standards for Statistical Models Used for Public
Hospital Visits after General Surgery Procedures Measurement-Priorities-and-Needs.pdf. Accessed Reporting of Health Outcomes An American Heart
Performed at Ambulatory Surgical Centers. February 28, 2019. Association Scientific Statement From the Quality
Available at: http://www.qualityforum.org/QPS/ 147 Fleisher LA, Pasternak LR, Herbert R, of Care and Outcomes Research Interdisciplinary
3357. Anderson GF. Inpatient hospital admission and Writing Group: Cosponsored by the Council on
145 National Quality Forum. ‘‘MAP 2018 death after outpatient surgery in elderly patients: Epidemiology and Prevention and the Stroke
Considerations for Implementing Measures in importance of patient and system characteristics Council Endorsed by the American College of
Federal Programs: Hospitals.’’ Report. 2017. and location of care. Arch Surg. 2004;139(1):67–72. Cardiology Foundation. Circulation.
Available at: http://www.qualityforum.org/map/ 148 Mattila K, Toivonen J, Janhunen L, Rosenberg 2006;113(3):456–462.
under ‘‘Hospitals—Final Report.’’ PH, Hynynen M. Postdischarge symptoms after 150 Normand S-LT, Shahian DM. Statistical and
146 The Centers for Medicare and Medicaid ambulatory surgery: First-week incidence, intensity, clinical aspects of hospital outcomes profiling.
Services Center for Clinical Standards and Quality. and risk factors. Anesthesia and analgesia. Statistical Science. 2007;22(2):206–226.
‘‘2018 Measures under Consideration List: Program- 2005;101(6):1643–1650. Continued
information on measure calculations, We annually review and update this list, f. Risk Adjustment
we refer readers to: https:// which includes a transparent public The statistical risk-adjustment model
www.cms.gov/Medicare/Quality- comment submission and review includes clinically relevant risk-
Initiatives-Patient-Assessment- process for addition and/or removal of adjustment variables that are strongly
Instruments/HospitalQualityInits/ procedures codes.153 The current list is associated with risk of hospital visits
Measure-Methodology.html. accessible in the Downloads section at: within 7 days following ASC general
e. Cohort https://www.cms.gov/medicare/ surgery procedures. Accordingly, only
medicare-fee-for-service-payment/ comorbidities that convey information
The patient cohort for the proposed ascpayment/11_addenda_updates.html. about the patient at that time or in the
ASC–19 measure includes all Medicare In addition, the measure includes 12 months prior, and not complications
beneficiaries ages 65 and older only ‘‘major’’ and ‘‘minor’’ procedures, that arise during the course of the index
undergoing outpatient general surgery as indicated by the Medicare Physician procedure, are included in the risk
procedures at an ASC who have 12 prior Fee Schedule global surgery indicator adjustment. The measure risk adjusts for
months of Medicare FFS (Medicare (GSI) values of 090 and 010, age, 18 comorbidities, procedure type
Parts A and B) enrollment. The target respectively, to focus the measure only (abdomen vs. alimentary tract vs. breast
group of procedures includes those that: on the subset of surgeries on CMS’ list vs. skin/soft tissue vs. wound vs.
(1) Are routinely performed at ASCs; (2) of covered ASC procedures that impose varicose vein), a variable for work
involve some increased risk of post- a meaningful risk of post-procedure Relative Value Units (RVUs) to adjust
surgery hospital visits; and (3) are hospital visits. This list of GSI values is for surgical complexity, and an
within the scope of general surgery publicly available for CY 2015 at: interaction term of procedure type and
training. These include the following https://www.cms.gov/Medicare/ surgical complexity.155
types of procedures: Abdominal (for Medicare-Fee-for-Service-Payment/ To select the final set of variables for
example, hernia repair), alimentary tract PhysicianFeeSched/PFS-Federal- the risk-adjustment model, candidate
(for example, hemorrhoid procedures), Regulation-Notices-Items/CMS-1612- risk variables were entered into logistic
breast (for example, mastectomies), FC.html (download PFS Addenda, regression analyses 156 predicting the
skin/soft tissue (for example, skin Addendum B). Moreover, to identify the outcome of hospital visits within 7 days.
grafting), wound (for example, incision subset of ASC procedures within the To develop a parsimonious risk model,
and drainage of skin and subcutaneous scope of general surgery, we used the non-significant variables were
tissue), and varicose vein stripping. The Clinical Classifications Software (CCS) iteratively removed from the model
proposed ASC–19 measure does not
developed by the Agency for Healthcare using a stepwise selection approach
include gastrointestinal endoscopy,
Research and Quality (AHRQ).154 We described by Hosmer and Lemeshow.157
endocrine, or vascular procedures, other
identified and included CCS categories All variables significant at p < 0.05 were
than varicose vein procedures, because
within the scope of general surgery, and retained in the final model. We also
for these procedures, reasons for
only included individual procedures tested interaction terms and retained
hospital visits are typically related to
within the CCS categories at the those that were both significant at p <
patients’ underlying comorbidities.
The scope of general surgery overlaps procedure (CPT code) level if they were 0.05 and demonstrated a clinically
with that of other specialties (for within the scope of general surgery plausible relationship to the outcome.
example, vascular surgery and plastic practice. For more cohort details, we Finally, after reviewing TEP and public
surgery). For this measure, we targeted refer readers to the measure technical comments, as well as the statistically
surgeries that general surgeons are report located at: https://www.cms.gov/ selected variables for face validity, we
trained to perform with the medicare/Quality-Initiatives-Patient- settled upon the model variables. We
understanding that other subspecialists Assessment-Instruments/Hospital retained one additional variable (opioid
may also be performing many of these QualityInits/Measure-Methodology use) for the final risk model because
surgeries at ASCs. Since the type of .html. experts advised it was an important risk
surgeon performing a particular To ensure that all patients included predictor and expressed a strong
procedure may vary across ASCs in under this measure have full data preference for including it in the model
ways that affect quality, the measure is available for outcome assessment, the even though it was not statistically
neutral to surgeons’ specialty training. measure excludes patients who survived selected. Additional details on risk
Procedures included in the measure at least 7 days following general surgery model development and testing are
cohort are on CMS’ list of covered ASC procedures at an ASC, but were not available in the technical report at:
procedures.152 We developed this list to continuously enrolled in Medicare FFS https://www.cms.gov/Medicare/Quality-
identify surgeries that have a low-to- (Medicare Parts A and B) during the 7 Initiatives-Patient-Assessment-
moderate risk profile. Surgeries on the days after surgery. There are no Instruments/HospitalQualityInits/
ASC list of covered procedures do not additional patient inclusion or Measure-Methodology.html.
involve or require major or prolonged exclusion criteria for the proposed
g. Public Reporting
invasion of body cavities, extensive ASC–19 measure. Additional
blood loss, major blood vessels, or care methodology and measure development We proposed that if the proposed
that is either urgent or life threatening. details are available at: https:// ASC–19 measure is adopted, we would
www.cms.gov/medicare/Quality- publicly report results only for facilities
151 National Quality Forum. Measure Evaluation Initiatives-Patient-Assessment-
155 S. Coberly. The Basics; Relative Value Units
Criteria and Guidance for Evaluating Measures for Instruments/HospitalQualityInits/
Endorsement. 2015. Available at: http:// (RVUs). National Health Policy Forum. January 12,
Measure-Methodology.html. 2015. Available at: http://www.nhpf.org/library/the-
www.qualityforum.org/Measuring_Performance/
Submitting_Standards/2015_Measure_Evaluation_ basics/Basics_RVUs_01-12-15.pdf.
Criteria.aspx. Accessed July 26, 2016. 153 Ibid. 156 Hosmer DW, Lemeshow S. Introduction to the
152 Centers for Medicare and Medicaid Services. 154 Healthcare Cost and Utilization Project. logistic regression model. Applied Logistic
‘‘Ambulatory Surgical Center (ASC) Payment: Clinical Classifications Software for Services and Regression, Second Edition. 2000:1–30.
Addenda Updates.’’ Available at: https:// Procedures. Available at: https://www.hcup- 157 Hosmer DW, Lemeshow S. Introduction to the
www.cms.gov/medicare/medicare-fee-for-service- us.ahrq.gov/toolssoftware/ccs_svcsproc/ logistic regression model. Applied Logistic

payment/ascpayment/11_addenda_updates.html. ccssvcproc.jsp. Regression, Second Edition. 2000:1–30.
with sufficient case numbers to meet www.qualitynet.org. We plan to 2024 payment determination best fits
moderate reliability standards.158 We continue to generate these reports for these needs.
would determine the case size cutoff for ASCs after we implement the proposed Comment: A few commenters
meeting moderate reliability standards measure if it is finalized so ASCs can expressed concern that because the
by calculating reliability at different use the information to identify measure assesses mainly skin and soft
case sizes using the ratio of true performance gaps and develop quality tissue procedures, it assesses only a
variance to observed variance during the improvement strategies. small subset of the procedures
measure dry run (discussed below).159 These confidential dry run results are performed in ASCs. One commenter
We would provide confidential not publicly reported and do not affect recommended that several exclusions be
performance data directly to all facilities payment. We expect the dry run to take removed to enable the measure to reflect
including those which do not meet the approximately 1 month to conduct, more procedures.
criteria for sufficient case numbers for during which facilities would be Response: We thank commenters for
reliability considerations so that all provided the confidential report and the their thoughtful evaluation of the cohort
facilities can benefit from seeing their opportunity to review their performance specifications of ASC–19. The intent of
measure results and individual patient- and provide feedback to us. After the ASC–19 is to assess the quality of care
level outcomes. We believe that the dry run, measure results would have a for surgical procedures that (1) are
measure will provide beneficiaries with payment impact and would be publicly routinely performed at ASCs, (2) involve
information about the quality of care for reported as discussed above beginning risk of post-surgery hospital visits, and
general surgery procedures in the ASC with the CY 2024 payment (3) are within the scope of general
setting. In addition, we believe that determination and for subsequent years. surgery training. The measure cohort
these performance data may help ASCs We have provided a summary of the includes a set of procedures informed
track their patient outcomes and public comments and responses to those by a group of clinical consultants and a
provide information on their cases that comments. national TEP consisting of patients,
facilities can use to improve quality of clinicians, methodologists, researchers,
Comment: Several commenters
care. and providers.160 To identify eligible
supported the proposal to adopt ASC–
ASC general surgery procedures, we
h. Provision of Facility-Specific 19: Facility-Level 7-Day Hospital Visits
first identified a list of procedures from
Information Prior to Public Reporting after General Surgery Procedures
Medicare’s 2014 and 2015 ASC lists of
Performed at Ambulatory Surgical
If this proposed measure is finalized, covered procedures. This list of surgical
Centers for the ASCQR Program
we intend to conduct a dry run before procedures is publicly available at:
beginning with the CY 2024 payment
the official data collection period or any https://www.cms.gov/medicare/
determination and for subsequent years. medicare-fee-for-service-payment/
public reporting. A dry run is a period Some commenters noted that this
of confidential reporting and feedback ascpayment/11_addenda_updates.html.
measure will provide valuable Using an existing, defined list of
during which ASCs may review their information and does not add reporting
dry run measure results, and in surgeries, rather than defining surgeries
burden. de novo, is useful for long-term measure
addition, further familiarize themselves Response: We thank the commenters
with the measure methodology and ask maintenance.
for supporting the adoption of this Ambulatory procedures include a
questions. For the dry run, we intend to measure for the ASCQR Program. We
use the most current 2-year set of heterogeneous mix of non-surgical
agree that measuring quality of care procedures, minor surgeries, and more
complete claims (usually 12 months associated with procedures performed at
prior to the start date) available at the substantive surgeries. The measure is
ASCs within the scope of general not intended to include very low-risk
time of dry run. For example, if the dry surgery training will provide useful
run began in June 2020, the most (minor) surgeries or non-surgical
information for facilities as well as procedures, which typically have a high
current 2-year set of data available beneficiaries and other stakeholders
would likely be July 2017 to June 2019. volume and a very low adverse outcome
while limiting facility burden. rate. To focus the measure only on the
Because we use paid, final action Comment: One commenter
Medicare claims, ASCs would not need subset of surgeries on Medicare’s list of
recommended that we adopt the covered ASC procedures that impose a
to submit any additional data for the dry measure sooner than the CY 2024
run. The dry run would generate meaningful risk of post-procedure
payment determination. One commenter hospital visits; the measure includes
confidential feedback reports for ASCs, requested that dry run reports be only ‘‘major’’ and ‘‘minor’’ procedures,
including patient-level data indicating provided as early as 2020 to allow as indicated by the Medicare Physician
whether the patient had a hospital visit sufficient time for ASCs to review their Fee Schedule GSI values of 090 and 010,
and, if so, the type of visit (emergency performance and ask questions. One respectively.52 The GSI code reflects the
department visit, observation stay, or commenter recommended that the dry number of post-operative days that are
unplanned inpatient admission), the run process include 2 months of data. included in a given procedure’s global
admitting facility, and the principal Response: We appreciate the surgical payment and identifies surgical
discharge diagnosis. Further, the dry commenters’ input on the timing and procedures of greater complexity and
run would enable ASCs to see their dry data collection for the dry run and follow-up care.161 This list of GSI values
run measure results prior to the measure desires for earlier supply of their data,
being implemented. General but we disagree that the measure should 160 Centers for Medicare & Medicaid Services.
information about the dry run as well as be adopted sooner. We note that the (2017). 2017 Measure Technical Report: Facility-
confidential facility-specific reports timeline proposed for implementation
Level 7-Day Hospital Visits after General Surgery
would be made available for ASCs to Procedures Performed at Ambulatory Surgical
of this measure was to allow adequate Centers. Available at: https://www.cms.gov/
review on their accounts at: http:// time to conduct a dry run with at least Medicare/Quality-Initiatives-Patient-Assessment-
2 years of data and to collect data with Instruments/HospitalQualityInits/Measure-
158 Ibid. Methodology.html.
159 Snijders TA, Bosker RJ. Multilevel Analysis: sufficient reliability prior to the measure 161 Medicare Learning Network. (2018) Global
An introduction to basic and advanced multilevel being used toward payment Surgery Booklet: United States, 2017. Retrieved
modeling. SAGE Publications. 2000. London. determinations and believe that the CY Continued
is publicly available for CY 2014 at: Response: We appreciate the not adequate, due to the number of low-
https://www.cms.gov/Medicare/ commenter’s review of the top volume ASCs. The commenter stated
Medicare-Fee-for-Service-Payment/ diagnoses associated with a hospital that the reliability of a measure
PhysicianFeeSched/PFS-Federal- visit within 7 days of general surgery intended for public reporting should be
Regulation-Notices-Items/CMS-1600- procedures. Although the top reasons at least ‘‘substantial’’ (ICC between 0.61
FC.html and for CY 2015 at: https:// for hospitals visits are likely due to and 0.80). This commenter
www.cms.gov/Medicare/Medicare-Fee- complications of care, as the commenter recommended that the minimum
for-Service-Payment/Physician points out, some hospital visits post number of qualifying procedures be
FeeSched/PFS-Federal-Regulation- procedure may be due to a patient’s increased to improve reliability.
Notices-Items/CMS-1612-FC.html underlying condition. As discussed in Response: We thank the commenter
(download PFS Addenda, Addendum section XV.B.3.f. of this final rule with for their comment regarding reliability
B). comment period, the measure is of the measure. We tested the reliability
To identify the final subset of ASC adjusted to account for variation in of the measure score by calculating the
general surgery procedures to be patients’ underlying risk of using the ICC. The ICC evaluates the agreement
included in the measure, we reviewed hospital within 7 days of a procedure. between the risk-standardized hospital
with general surgeons and TEP members Therefore, the measure score is designed visit ratios (RSHVRs) calculated in two
the CCS categories of procedures to reflect differences in quality rather randomly selected patient samples.
developed by the AHRQ. We identified than differences in pre-procedure Since we measured the underlying
and included CCS categories within the patient risk and we believe the measure quality of general surgery procedures
scope of general surgery, and only specifications account for such primary performed at the ASC using patient
included individual procedures within diagnoses that reflect patients’ outcomes, we anticipated that two
the CCS categories at the procedure underlying conditions. independent, random samples of
(CPT® code) level if they were within Further, the measure is designed to patients from an ASC would generate
the scope of general surgery practice. include only unplanned inpatient scores that are similar. We calculated
We did not include in the measure admissions occurring after general measure score reliability for a 2-year
calculations, gastrointestinal endoscopy, surgery procedures performed at ASCs. reporting period and found that the
endocrine, or vascular procedures, other For the purposes of this measure, a agreement between the two RSHVR
than varicose vein procedures, because planned admission is defined as a non- values for each ASC was calculated for
reasons for hospital visits are typically acute admission for a scheduled 2 years to be ICC [2,1] = 0.526,
related to patients’ underlying procedure (for example, total hip indicating moderate measure score
comorbidities. replacement or cholecystectomy). Post- reliability. Thus, we do not believe that
The sole patient characteristic discharge admissions for an acute it is necessary increase the minimum
measure exclusion criterion is illness or for complications of care are number of qualifying procedures for
‘‘Medicare coverage: beneficiaries who never considered planned. In contrast, reliability purposes as we view the
survived at least 7 days, but without ‘‘planned’’ admissions are those measure as having a sufficient level of
continuous enrollment in Medicare FFS scheduled in advance for anticipated reliability for adoption by the ASCQR
Parts A and B in the 7 days after medical treatment or procedures that Program.
must be provided in the inpatient In addition, the results of reliability
surgery;’’ these beneficiaries are
setting. To identify admissions as testing for this measure are consistent
excluded to ensure all patients have full
planned or unplanned, we applied an with current ASCQR Program claims-
data available for outcome assessment.
algorithm previously developed for based measures of hospital visits post-
We will continue to evaluate whether specified procedures in the ASC setting
CMS’s hospital readmission measures,
there are additional procedures that are as well as with similar outcome
the CMS Planned Readmission
clinically appropriate for inclusion or measures endorsed by NQF; this
Algorithm Version 4.0.162 In brief, the
exclusion in the cohort definition as measure was endorsed by NQF in June
algorithm uses the procedure codes and
part of measure reevaluation. 2018. The measure evaluation criteria of
principal discharge diagnosis codes on
Comment: One commenter expressed NQF committees are considered to be
each hospital claim to identify
concern that for certain procedure rigorous and these committees typically
admissions that are typically planned.54
categories (such as ‘‘Other therapeutic require moderate or high reliability to
A few specific, limited types of care are
procedures, hemic and lymphatic always considered planned (for achieve endorsement.
system’’ and ‘‘Lumpectomy, example, major organ transplant, Comment: One commenter expressed
quadrantectomy of breast and rehabilitation, or maintenance concern that the risk adjusted outcome
Mastectomy’’ procedures), the top 10 chemotherapy). rates show little variability between
primary diagnoses include diagnoses For more information on the measure ASCs and that as a result there is little
that reflect patients’ underlying calculation in regard to planned versus opportunity for ASCs to use the data for
condition rather than the quality of care unplanned admissions, we refer readers quality improvement or for patients to
received. This commenter expressed to: https://www.cms.gov/Medicare/ discern differences in quality. The
concern that facilities will be held Quality-Initiatives-Patient-Assessment- commenter expressed concern that the
accountable for these outcomes and Instruments/HospitalQualityInits/ measure would be considered topped-
recommended that the measure Measure-Methodology.html. out. Some commenters expressed
specifications be updated to ensure that Comment: One commenter expressed concern that many ASCs will not meet
these diagnoses are not to be used as concern that the reliability of the the minimum volume threshold for the
quality signals or included in the measure, which has an ICC of 0.530, is measure, because it covers such a
measure results. specific range of procedures. A few
162 Horwitz, L.I., Grady, J.N., Cohen, D.B., Lin, Z., commenters expressed concern that
from Centers for Medicare & Medicaid Services Volpe, M., Ngo, C.K., . . . Bernheim, S.M. (2015). measure results will not be shared with
website: https://www.cms.gov/Outreach-and- Development and Validation of an Algorithm to
Education/Medicare-Learning-Network-MLN/ Identify Planned Readmissions From Claims Data.
ASCs until months after patient visits,
MLNProducts/Downloads/GloballSurgery- Journal of hospital medicine, 10(10), 670–677. which will limit the usefulness of the
ICN907166.pdf. doi:10.1002/jhm.2416. information.
Response: We understand the respectively). Thus, we believe that the adjustment obscuring differences can be
commenters’ concerns about the ability measure as specified utilizing 2 years of a concern. However, we believe the
of ASC–19 to discern differences in claims data provides sufficient numbers current approach to risk adjustment for
quality of care; however, we believe the of ASCs meeting the minimum volume the ASC–19 measure is appropriate. As
distribution of the estimates of the threshold. part of our standard process for measure
measure rates for individual facilities These findings also show that based reevaluation, we will continue to
convey meaningful variation for upon the variation in the measure, monitor measure calculations as
discerning differences between facilities while measure rates could be additional years of data become
and for use in quality improvement considered high, they are not available.
efforts. As presented in the measure sufficiently unvarying to not distinguish Comment: Some commenters believed
technical report using Medicare FFS between facilities and, thus, would not that the title of the measure, which
CYs 2014 and 2015 data, we found that be considered ‘‘topped out’’. During refers to General Surgery Procedures,
the facility RSHVR ranged from 0.42 to measure development testing using a will mislead beneficiaries by suggesting
2.13, with a median RSHVR of 0.97 (the very conservative approach of a 95 that the score reflects the practice of
25th and 75th percentiles were 0.90 and percent confidence level, ASC–19 general surgery. One commenter
1.10, respectively) (measure technical measure calculations identified 31 recommended clarifying the name of the
report available in the Downloads outliers and sufficient variation in the measure to specify ‘‘abdominal,
section at: https://www.cms.gov/ RSHVRs to distinguish facilities. alimentary tract, breast, skin/soft tissue,
Medicare/Quality-Initiatives-Patient- Irrespective of claim volumes, all wound, and varicose vein stripping
Assessment-Instruments/Hospital facilities will receive reports with any procedures’’. A few commenters
QualityInits/Measure- detected cases with patient-level expressed concern that the measure
Methodology.html). information to inform quality name, Facility-Level 7-Day Hospital
As the commenter pointed out, the improvement activities. To support Visits after General Surgery Procedures
descriptive approach categorized few continuous improvement across the full Performed at Ambulatory Surgical
facilities as outliers; in our measure distribution of performance scores, we Centers, inaccurately suggests that it is
development calculations, we identified typically provide measure scores and assessing hospital visits that are 7 days
15 ASCs that had better than the patient-level reports to facilities that in duration. Commenters recommended
national average and 16 ASCs that indicate whether their patients had a that the name be clarified.
performed worse than the national hospital visit within 7 days, and the Response: We appreciate the
average. We believe this indicates few diagnoses and locations of visits, and commenters’ thoughtful
facilities are outliers, evidencing very intend to provide these reports to ASCs recommendations for the measure title.
high or very low measure rates. The once ASC–19 is implemented. Facilities We agree that it is important for the
approach to categorizing facility outliers can use these data to reduce hospital measure title to accurately reflect the
is very conservative using 95 percent visits for important procedure-related focus of the measure. The scope of the
confidence interval estimates outcomes that may be preventable, measure was defined by the scope of
(indicating a 95 percent certainty that including urinary retention, pain, practice of general surgeons, which
the range of values determined by the nausea, vomiting, syncope, and other includes abdominal, alimentary tract,
measure calculation contains the true surgery-related complications. breast, skin/soft tissue, wound, and
mean of the population of facilities) to We will continue to monitor the data varicose vein stripping procedures. In
identify outliers so as to limit used for measure score calculation prior response to stakeholder input received
erroneously designating facilities as to and during any implementation of the during the public comment period in
having extreme measure rates. measure. We will continue our 2017 (available in the Downloads
Regarding the specific range of multiyear assessment to weigh the section at: https://www.cms.gov/
procedures for this measure, as tradeoffs between having an adequate Medicare/Quality-Initiatives-Patient-
discussed previously in this section, we number of cases for the greatest number Assessment-Instruments/MMS/PC-
focused the measure only on the subset of facilities and ensure that data are Updates-on-Previous-Comment-
of surgeries on Medicare’s list of timely and actionable. Periods.html), we revised the measure’s
covered ASC procedures that impose a Regarding the availability of data for title from ‘‘Hospital Visits after General
meaningful risk of post-procedure ASC–19, our goal is to provide ASCs Surgery Ambulatory Surgical Center
hospital visits. with the timeliest claims data available. Procedures’’ to, ‘‘Facility-Level 7-Day
Regarding the concern that many The expedience of the Medicare claims Hospital Visits after General Surgery
small-volume ASCs will not meet the submission and processing timelines Procedures Performed at Ambulatory
minimum criteria threshold for provide constraints to the timeliness of Surgical Centers’’ to clarify the scope of
reporting; we have sought to include as measure production. We continue to the procedures included in the
many procedures on Medicare’s list of investigate the timeliness of claims data measure’s cohort.
covered ASC procedures that impose a in efforts to increase timeliness of We have chosen not to further revise
meaningful risk of post-procedure measure production without the measure title as ‘‘7-Day’’ represents
hospital visits in the measure as compromising accuracy. the duration of hospital visits that
possible that fit within the scope of Comment: One commenter define the outcome, and the title format
general surgery practice. In a national recommended that additional analyses is consistent with other CMS outcome
Medicare FFS claims dataset for CY be performed on high and low measure titles (for example, ‘‘Hospital
2014 and 2015 that included 286,999 performing ASCs to determine if risk 30-day all-cause risk-standardized
procedures,52 1,642 ASCs were found to adjustment washes out differences and readmission rate following acute
be performing at least 25 procedures to determine what diagnoses were myocardial infarction hospitalization’’).
during the data collection time period; associated with ASCs that showed poor Comment: One commenter expressed
these 1,642 ASCs had facility measure performance. concern that the measure may harm
scores ranging from 0.42 to 2.13, with a Response: We thank the commenter patients by discouraging necessary care,
median RSHVR of 0.97 (the 25th and for their attention to risk adjustment for for example in a situation where an
75th percentiles were 0.90 and 1.10, the measure. We agree that risk unforeseen clinical issue is discovered
during a procedure and sound clinical passed the NQF surgery committee’s 4. Summary of ASCQR Program Quality
judgement calls for a provider to scientific acceptability criteria.163 Measure Set Finalized for the CY 2024
recommend hospitalization or After consideration of the public Payment Determination and for
observation. comments, we are finalizing our Subsequent Years
Response: We appreciate the proposal to adopt ASC–19: Facility- As discussed above, we are finalizing
commenter’s considerations of potential Level 7-Day Hospital Visits after General our proposal to add one measure
unintended consequences of Surgery Procedures Performed at beginning with the CY 2024 payment
implementing ASC–19. We believe that Ambulatory Surgical Centers (NQF determination and for subsequent years
adverse impact on clinical decisions #3357) for the CY 2024 payment to the ASCQR Program. We refer readers
will be minimal due to risk adjustment. determination and subsequent years as to the CY 2019 OPPS/ASC final rule
Risk adjustment ensures that ASCs are proposed. with comment period (83 FR 59129
given credit for providing care for more through 59132) for previously finalized
complex patients who are at greater risk ASCQR Program measure sets.
of hospital visits. A team of clinical Table 63 summarizes the finalized
consultants and the national TEP 163 National Quality Forum. (2017). Surgery, Fall
ASCQR Program measure set for the CY
provided input on the measure risk- 2017 Cycle: CDP Report, 2017. Retrieved from 2024 payment determination and
adjustment model at multiple points https://www.qualityforum.org/Publications/2018/ subsequent years (including previously
during development,52 and the measure 08/Surgery_Final_Report_-_Fall_2017_Cycle.aspx. adopted measures).
5. ASCQR Program Measures and the CY 2014 payment determination (76 associations, professional societies and
Topics for Future Consideration FR 74496 through 74500). These accrediting bodies that focus on ASC
measures were developed by the ASC quality and safety.165 The ASC QC
Quality Collaboration (ASC QC). The initiated a process of standardizing ASC
rule (84 FR 39567 through 39568), we
ASC QC is a cooperative effort of quality measure development through
considered one topic for future
organizations and companies formed in evaluation of existing nationally
implementation: Updates to the endorsed quality measures to determine
submission method for ASC–1: Patient 2006 with a common interest in
ensuring that ASC quality data is which could be directly applied to the
Burn, ASC–2: Patient Fall, ASC–3: outpatient surgery facility setting.166
Wrong Site, Wrong Side, Wrong Patient, measured and reported in a meaningful
way.164 Stakeholders in the ASC QC The ASC QC developed and pilot-
Wrong Procedure, Wrong Implant, and tested ASC–1, ASC–2, ASC–3, and
ASC–4: All-Cause Hospital Transfer/ include ASC corporations, ASC
ASC–4 at the facility-level for feasibility
Admission measures. and usability (76 FR 74496). These
164 ASC Quality Collaboration. ASC Quality
ASC–1, ASC–2, ASC–3, and ASC–4 measures are calculated via quality data
Measures Implementation Guide Version 6.1 March
were adopted into the ASCQR Program 2019. Available at: http://ascquality.org/
in the CY 2012 OPPS/ASC final rule documents/ASC-QC-Implementation-Guide-6.1- 165 Ibid.
ER12NO19.105</GPH>
with comment period beginning with March-2019.pdf. 166 Ibid.
codes (QDCs), as described in section 59117 through 59123; 59134 through appropriate for these measures in the
XV.D.1. of this final rule with comment 59135), we retained these measures in future.
period. ASCs were formerly required to the ASCQR Program, but suspended We are committed to work with
submit the appropriate QDCs on their data submission until further stakeholders to ensure the ASCQR
individual Medicare FFS claims billed action in rulemaking with the goal of Program measure set does not place an
by the facility (78 FR 75135). In the FY updating their data submission method. inappropriate amount of burden on
2013 IPPS/LTCH PPS final rule (77 FR In the CY 2020 OPPS/ASC proposed facilities while addressing and
53640 through 53641), we finalized our rule (84 FR 39567 through 39568), we providing information about these types
policy that the minimum threshold for requested comment about potential of patient safety, adverse, rare events to
successful reporting be that at least 50 future updates to the data submission patients and other consumers. We
percent of claims meeting measure method for ASC–1: Patient Burn, ASC– recognize that updating the data
specifications contain QDCs. At that 2: Patient Fall, ASC–3: Wrong Site, submission method to a CMS online
time, we believed that 50 percent was a Wrong Side, Wrong Patient, Wrong data submission tool would add some
reasonable minimum threshold for the Procedure, Wrong Implant, and ASC–4: burden to the ASCQR Program due to
initial implementation years of the All-Cause Hospital Transfer/Admission. the additional time for submitting any of
ASCQR Program, because ASCs were Specifically, we have considered these four measures via QualityNet for
not yet familiar with how to report updating the data submission method to each payment determination year. Thus,
quality data under the ASCQR Program a CMS online data submission tool. We we are also seeking comment about the
and because many ASCs are relatively refer readers to the CY 2018 OPPS/ASC burden associated with potentially
small and may have needed more time final rule with comment period (82 FR updating the data submission method
to set up reporting systems (77 FR 59473) (and the previous rulemakings for ASC–1, ASC–2, ASC–3, and ASC–4
53641). We stated in that final rule that cited therein) and 42 CFR 416.310(c)(1) to a CMS online data submission tool
we intended to propose to increase this for our requirements regarding data (for example, the QualityNet website) in
percentage for subsequent years’ submitted via a CMS online data future years.
payment determinations as ASCs The comments and our responses to
submission tool. We are currently using
become more familiar with reporting the comments regarding the ASCQR
the QualityNet website (https://
requirements for the ASCQR Program. Program Measures and Topics for
www.qualitynet.org) as our CMS online
We have assessed this reporting Future Consideration are set forth
data submission tool.
threshold annually and have found that below.
To submit measures via an online Comment: Several commenters
over 78 percent of reporting ASCs report
data submission tool to the QualityNet supported the inclusion of these
data for at least 90 percent of eligible
website, ASCs and any agents measures in the ASCQR Program.
claims.
In the CY 2019 OPPS/ASC final rule submitting data on an ASC’s behalf Commenters also specifically supported
with comment period (83 FR 59117 would have to maintain a QualityNet the potential future updates to the data
through 59123), we expressed concern account (§ 416.310(c)(1)). A QualityNet collection method for ASC–1: Patient
that the data submission method for security administrator would be Fall, ASC–2: Patient Burn, ASC–3:
these measures may impact the necessary to set up such an account for Wrong Site, Wrong Side, Wrong
completeness and accuracy of the data the purpose of submitting this Procedure, Wrong Implant, and ASC–4:
due to the inability of ASCs to correct information (§ 416.310(c)(1)). We All-Cause Hospital Transfers/
errors in submitted QDCs that are used believe that using a CMS online data Admissions and noted that the measure
to calculate these measures. An ASC collection tool would address our steward has noted that the measures are
that identifies an erroneous or missing concern about the ability of ASCs to suitable for submission through the
QDC is unable to correct or add a QDC correct data submission errors because QualityNet site. Commenters noted that
if the claim has already been submitted ASCs would simply report their data via the change would reduce cost and
to Medicare and been processed. We the online tool. If data for these burden and limit the delay that results
also stated that we believe that revising measures were submitted via from QDC reporting.
the data submission method for the QualityNet, ASCs would still submit Several commenters supported the
measures, such as via QualityNet, claims for reimbursement to CMS, but inclusion of these four patient safety
would address this issue and allow would not be required to include QDCs. measures in both the ASCQR and HOQR
ASCs to correct any data submissions As specified at § 416.310(c)(ii), the data Programs; these commenters cited
errors, resulting in more complete and collection time period for quality supporting reasons, stating that these
accurate data. In that final rule with measures for which data are submitted measures are outcome measures
comment period, we explained that we via a CMS online data submission tool important to beneficiaries and the
agree it is important to continue to is for services furnished during the Medicare program and that their
monitor the types of events included in calendar year 2 years prior to the inclusion in both of these quality
these measures considering the payment determination year. ASCs reporting programs would facilitate
potential negative impacts to patients’ would then submit their data for ASC– meaningful comparisons between ASCs
morbidity and mortality, in order to 1, ASC–2, ASC–3, and ASC–4 via and HOPDs.
continue to prevent their occurrence QualityNet during the data submission Response: We thank the commenters
and ensure that they remain rare. We period, January 1 through May 15 in the for their support of the inclusion of the
acknowledged that these measures year prior to the payment determination ASC–1, ASC–2, ASC–3, and ASC–4
provide critical data to beneficiaries and year. ASCs would be able to submit and measures in the ASCQR Program and for
further transparency for care provided modify their data throughout the data their support for submission of data for
in the ASC setting that would be useful submission period and could correct these measures through the QualityNet
in choosing an ASC for care, and that any errors during this period. We are site.
these measures are valuable to the ASC seeking comments on whether updating Comment: Some commenters did not
community. the data submission method for ASC–1, support the inclusion of the ASC–1 to
As such, in the CY 2019 OPPS/ASC ASC–2, ASC–3, and ASC–4 to a CMS ASC–4 measures in the ASCQR
final rule with comment period (83 FR online data submission tool would be Program. These commenters cited: That
the measures lacked NQF endorsement, maintenance of technical specifications OPPS/ASC final rule with comment
stating concerns about the usefulness of for the ASCQR Program. period (80 FR 70533), we codified the
measuring rare events or being ‘‘topped administrative requirements regarding
7. Public Reporting of ASCQR Program
out’’; that there could be data maintenance of a QualityNet account
Data
submission systems issues; and and security administrator for the
concerns about burden. A few In the CY 2012 OPPS/ASC final rule ASCQR Program at § 416.310(c)(1)(i). In
commenters recommended that we with comment period (76 FR 74514 the CY 2020 OPPS/ASC proposed rule
continue the suspension of these through 74515), we finalized a policy to (84 FR 39569), we did not propose any
measures rather than revise the data make data that an ASC submitted for the changes to these policies.
collection method. One commenter ASCQR Program publicly available on a
noted that CMS should not change the CMS website after providing an ASC an 2. Requirements Regarding Participation
data collection method for these opportunity to review the data to be Status
measures if it would increase burden or made public. In the CY 2016 OPPS/ASC We refer readers to the CY 2014
require manual data abstraction. One final rule with comment period (80 FR OPPS/ASC final rule with comment
commenter suggested we work with 70531 through 70533), we finalized our period (78 FR 75133 through 75135) for
HOPDs and ASCs to identify current policy to publicly display data by the a complete discussion of the
forums or internal hospital portals National Provider Identifier (NPI) when participation status requirements for the
where these safety issues are the data are submitted by the NPI and CY 2014 payment determination and
documented, discussed and remedied. to publicly display data by the CCN subsequent years. In the CY 2016 OPPS/
Response: We thank the commenters when the data are submitted by the ASC final rule with comment period (80
for their views, expressing their CCN. In addition, we codified our FR 70533 through 70534), we codified
concerns and suggesting alternatives policies regarding the public reporting these requirements regarding
regarding the inclusion of the ASC–1 to of ASCQR Program data at 42 CFR participation status for the ASCQR
ASC–4 measures in the ASCQR 416.315 (80 FR 70533). In the CY 2017 Program at 42 CFR 416.305. In the CY
Program. We will take them into OPPS/ASC final rule with comment 2020 OPPS/ASC proposed rule (84 FR
consideration as we determine future period (81 FR 79819 through 79820), we 39569), we did not propose any changes
updates to ASC–1, ASC–2, ASC–3, and formalized our current public display to these policies.
ASC–4 in the ASCQR Program. practices regarding timing of public
D. Form, Manner, and Timing of Data
6. Maintenance of Technical display and the preview period by
Submitted for the ASCQR Program
Specifications for Quality Measures finalizing our proposals to: Publicly
display data on the Hospital Compare 1. Requirements Regarding Data
We refer readers to the CY 2012 website, or other CMS website as soon Processing and Collection Periods for
OPPS/ASC final rule with comment as practicable after measure data have Claims-Based Measures Using Quality
period (76 FR 74513 through 74514), been submitted to CMS; to generally Data Codes (QDCs)
where we finalized our proposal to provide ASCs with approximately 30
follow the same process for updating the We refer readers to the CY 2014
days to review their data before publicly OPPS/ASC final rule with comment
ASCQR Program measures that we reporting the data; and to announce the
adopted for the Hospital OQR Program period (78 FR 75135) for a complete
timeframes for each preview period summary of the data processing and
measures, including the subregulatory
starting with the CY 2018 payment collection periods for the claims-based
process for updating adopted measures.
determination on a CMS website and/or measures using QDCs for the CY 2014
In the CY 2013 OPPS/ASC final rule
on our applicable listservs. In the CY payment determination and subsequent
2018 OPPS/ASC final rule with years. In the CY 2016 OPPS/ASC final
through 68497), the CY 2014 OPPS/ASC
comment period (82 FR 59455 through rule with comment period (80 FR
final rule with comment period (78 FR
59470), we discussed specific public 70534), we codified the requirements
75131), and the CY 2015 OPPS/ASC
reporting policies associated with two regarding data processing and collection
final rule with comment period (79 FR
measures beginning with the CY 2022 periods for claims-based measures using
66981), we provided additional
clarification regarding the ASCQR payment determination: ASC–17: QDCs for the ASCQR Program at 42 CFR
Program policy in the context of the Hospital Visits after Orthopedic 416.310(a)(1) and (2).
previously finalized Hospital OQR Ambulatory Surgical Center Procedures, In the CY 2020 OPPS/ASC proposed
Program policy, including the processes and ASC–18: Hospital Visits after rule (84 FR 39569) we did not propose
for addressing nonsubstantive and Urology Ambulatory Surgical Center any changes to these requirements. We
substantive changes to adopted Procedures. In the CY 2020 OPPS/ASC note that data submission for the
measures. In the CY 2016 OPPS/ASC Proposed Rule (84 FR 39569), we did following claims-based measures using
final rule with comment period (80 FR not propose any changes to our public QDCs was suspended in the CY 2019
70531), we provided clarification reporting policies. OPPS/ASC final rule with comment
regarding our decision to not display the C. Administrative Requirements period (83 FR 59117 through 59123;
technical specifications for the ASCQR 59134 through 59135) until further
Program on a CMS website, but stated 1. Requirements Regarding QualityNet action in rulemaking:
that we will continue to display the Account and Security Administrator • ASC–1: Patient Burn;
technical specifications for the ASCQR We refer readers to the CY 2014 • ASC–2: Patient Fall;
Program on the QualityNet website. In OPPS/ASC final rule with comment • ASC–3: Wrong Site, Wrong Side,
addition, our policies regarding the period (78 FR 75132 through 75133) for Wrong Patient, Wrong Procedure,
maintenance of technical specifications a detailed discussion of the QualityNet Wrong Implant; and
for the ASCQR Program are codified at security administrator requirements, • ASC–4: Hospital Transfer/
42 CFR 416.325. In the CY 2020 OPPS/ including setting up a QualityNet Admission.
ASC proposed rule (84 FR 39568 account, and the associated timelines, We also note that we are requesting
through 39569), we did not propose any for the CY 2014 payment determination comment on updating the submission
changes to our policies regarding the and subsequent years. In the CY 2016 method for the above measures in
section XV.B.5. of this final rule with tool measures adopted in the ASCQR 5. Requirements for Data Submission for
comment period. Program. ASC–15a–e: Outpatient and Ambulatory
These data processing and collection Surgery Consumer Assessment of
b. Requirements for Data Submitted via
period requirements will remain in the Healthcare Providers and Systems (OAS
a CMS Online Data Submission Tool
ASCQR Program for application to any CAHPS) Survey-Based Measures
future claims-based measures using We refer readers to the CY 2018 We refer readers to the CY 2017
QDCs adopted by the ASCQR Program. OPPS/ASC final rule with comment OPPS/ASC final rule with comment
period (82 FR 59473) (and the previous period (81 FR 79822 through 79824) for
2. Minimum Threshold, Minimum Case
rulemakings cited therein) and our previously finalized policies
Volume, and Data Completeness for
§ 416.310(c)(1) for our requirements regarding survey administration and
Claims-Based Measures Using QDCs
regarding data submitted via a CMS vendor requirements for the CY 2020
We refer readers to the CY 2018 online data submission tool. We are payment determination and subsequent
OPPS/ASC final rule with comment currently using the QualityNet website years. In addition, we codified these
period (82 FR 59472) (and the previous to host our CMS online data submission policies at 42 CFR 416.310(e). However,
rulemakings cited therein), as well as 42 tool: https://www.qualitynet.org. We in the CY 2018 OPPS/ASC final rule
CFR 416.310(a)(3) and 42 CFR note that in the CY 2018 OPPS/ASC with comment period (82 FR 59450
416.305(c) for our policies about final rule with comment period (82 FR through 59451), we delayed
minimum threshold, minimum case 59473), we finalized expanded implementation of the ASC–15a–e: OAS
volume, and data completeness for submission via the CMS online tool to CAHPS Survey-based measures
claims-based measures using QDCs. In also allow for batch data submission beginning with the CY 2020 payment
the CY 2020 OPPS/ASC proposed rule and made corresponding changes to the determination (CY 2018 data
(84 FR 39569), we did not propose any § 416.310(c)(1)(i). submission) until further action in
changes to these policies. In the CY 2020 OPPS/ASC proposed future rulemaking, and we refer readers
3. Requirements for Data Submitted via rule (84 FR 39570), we did not propose to that discussion for more details. In
an Online Data Submission Tool any changes to this policy. The the CY 2020 OPPS/ASC proposed rule
following previously finalized measures (84 FR 39570), we did not propose any
We refer readers to the CY 2018 require data to be submitted via a CMS changes to this policy.
OPPS/ASC final rule with comment online data submission tool for the CY
period (82 FR 59472) (and the previous 2021 payment determination and 6. Extraordinary Circumstances
rulemakings cited therein) and 42 CFR subsequent years: Exception (ECE) Process for the CY 2020
416.310(c) for our previously finalized Payment Determination and Subsequent
• ASC–9: Endoscopy/Polyp
policies for data submitted via an online Years
Surveillance: Appropriate Follow-Up
data submission tool. For more Interval for Normal Colonoscopy in We refer readers to the CY 2018
information on data submission using Average Risk Patients OPPS/ASC final rule with comment
QualityNet, we refer readers to: https:// period (82 FR 59474 through 59475)
• ASC–11: Cataracts: Improvement in
www.qualitynet.org. (and the previous rulemakings cited
Patients’ Visual Function within 90
a. Requirements for Data Submitted via Days Following Cataract Surgery therein) and 42 CFR 416.310(d) for the
ASCQR Program’s policies for
a Non-CMS Online Data Submission • ASC–13: Normothermia Outcome
Tool extraordinary circumstance exceptions
• ASC–14: Unplanned Anterior (ECE) requests.
We refer readers to the CY 2014 Vitrectomy In the CY 2018 OPPS/ASC final rule
OPPS/ASC final rule with comment 4. Requirements for Non-QDC Based, with comment period (82 FR 59474
period (78 FR 75139 through 75140) and Claims-Based Measure Data through 59475), we: (1) Changed the
the CY 2015 OPPS/ASC final rule with name of this policy from ‘‘extraordinary
comment period (79 FR 66985 through We did not propose any changes to circumstances extensions or exemption’’
66986) for our requirements regarding our requirements for non-QDC based, to ‘‘extraordinary circumstances
data submitted via a non-CMS online claims-based measures in the CY 2020 exceptions’’ for the ASCQR Program,
data submission tool (that is, the CDC OPPS/ASC proposed rule (84 FR 39570). beginning January 1, 2018; and (2)
NHSN website). We codified our We refer readers to the CY 2019 OPPS/ revised 42 CFR 416.310(d) of our
existing policies regarding the data ASC final rule with comment period (83 regulations to reflect this change. We
collection time periods for measures FR 59136 through 59138, where we also clarified that we will strive to
involving online data submission and established a 3-year reporting period for complete our review of each request
the deadline for data submission via a the previously adopted measure, ASC– within 90 days of receipt. In the CY
non-CMS online data submission tool at 12: Facility 7-Day Risk-Standardized 2020 OPPS/ASC proposed rule (84 FR
42 CFR 416.310(c)(2). Hospital Visit Rate after Outpatient 39570), we did not propose any changes
As we noted in the CY 2019 OPPS/ Colonoscopy. In that final rule with to these policies.
ASC final rule with comment period (83 comment period (83 FR 59106 through
FR 59135), no measures submitted via a 59107), we established a similar policy 7. ASCQR Program Reconsideration
non-CMS online data submission tool under the Hospital OQR Program. Procedures
remain in the ASCQR Program We also note that we are finalizing We refer readers to the CY 2016
beginning with the CY 2020 payment our proposal to adopt ASC–19: Facility- OPPS/ASC final rule with comment
determination. In the CY 2020 OPPS/ Level 7-Day Hospital Visits after General period (82 FR 59475) (and the previous
ASC proposed rule (84 FR 39569 Surgery Procedures Performed at rulemakings cited therein) and 42 CFR
through 39570), we did not propose any Ambulatory Surgical Centers (NQF 416.330 for the ASCQR Program’s
changes to our non-CMS online data #3357) in section XV.B.3. of this final reconsideration policy. In the CY 2020
submission tool reporting requirements; rule with comment period to which OPPS/ASC proposed rule (84 FR 39570),
these requirements would apply to any these requirements for non-QDC based, we did not propose any changes to this
future non-CMS online data submission claims-based measures apply. policy.
E. Payment Reduction for ASCs That conversion factor that would apply to codes within the medical range of CPT
Fail To Meet the ASCQR Program ASCs that fail to meet their quality codes for which separate payment is
Requirements reporting requirements for that calendar allowed under the OPPS will be at the
year payment determination. We lower of the PFS nonfacility PE RVU-
1. Statutory Background
finalized our proposal that application based (or technical component) amount
We refer readers to the CY 2013 of the 2.0 percentage point reduction to or the rate calculated according to the
OPPS/ASC final rule with comment the annual update may result in the standard ASC ratesetting methodology
period (77 FR 68499) for a detailed update to the ASC payment system when provided integral to covered ASC
discussion of the statutory background being less than zero prior to the surgical procedures. In the CY 2013
regarding payment reductions for ASCs application of the MFP adjustment. OPPS/ASC final rule with comment
that fail to meet the ASCQR Program The ASC conversion factor is used to period (77 FR 68500), we finalized our
requirements. calculate the ASC payment rate for proposal that the standard ASC
2. Policy Regarding Reduction to the services with the following payment ratesetting methodology for this type of
ASC Payment Rates for ASCs That Fail indicators (listed in Addenda AA and comparison would use the ASC
To Meet the ASCQR Program BB to the proposed rule, which are conversion factor that has been
Requirements for a Payment available via the internet on the CMS calculated using the full ASC update
Determination Year website): ‘‘A2’’, ‘‘G2’’, ‘‘P2’’, ‘‘R2’’ and adjusted for productivity. This is
‘‘Z2’’, as well as the service portion of necessary so that the resulting ASC
The national unadjusted payment device-intensive procedures identified payment indicator, based on the
rates for many services paid under the by ‘‘J8’’ (77 FR 68500). We finalized our comparison, assigned to these
ASC payment system are equal to the proposal that payment for all services procedures or services is consistent for
product of the ASC conversion factor assigned the payment indicators listed each HCPCS code, regardless of whether
and the scaled relative payment weight above would be subject to the reduction payment is based on the full update
for the APC to which the service is of the national unadjusted payment conversion factor or the reduced update
assigned. For CY 2020, the ASC rates for applicable ASCs using the conversion factor.
conversion factor is equal to the ASCQR Program reduced update For ASCs that receive the reduced
conversion factor calculated for the conversion factor (77 FR 68500). ASC payment for failure to meet the
previous year updated by the The conversion factor is not used to ASCQR Program requirements, we
multifactor productivity (MFP)-adjusted calculate the ASC payment rates for believe that it is both equitable and
hospital market basket update factor. separately payable services that are appropriate that a reduction in the
The MFP adjustment is set forth in assigned status indicators other than payment for a service should result in
section 1833(i)(2)(D)(v) of the Act. The payment indicators ‘‘A2’’, ‘‘G2’’, ‘‘J8’’, proportionately reduced coinsurance
MFP-adjusted hospital market basket ‘‘P2’’, ‘‘R2’’ and ‘‘Z2.’’ These services liability for beneficiaries (77 FR 68500).
update is the annual update for the ASC include separately payable drugs and Therefore, in the CY 2013 OPPS/ASC
payment system for a 5-year period (CY biologicals, pass-through devices that final rule with comment period (77 FR
2019 through CY 2023). Under the are contractor-priced, brachytherapy 68500), we finalized our proposal that
ASCQR Program in accordance with sources that are paid based on the OPPS the Medicare beneficiary’s national
section 1833(i)(7)(A) of the Act and as payment rates, and certain office-based unadjusted coinsurance for a service to
discussed in the CY 2013 OPPS/ASC procedures, radiology services and which a reduced national unadjusted
final rule with comment period (77 FR diagnostic tests where payment is based payment rate applies will be based on
68499), any annual increase shall be on the PFS nonfacility PE RVU-based the reduced national unadjusted
reduced by 2.0 percentage points for amount, and a few other specific payment rate.
ASCs that fail to meet the reporting services that receive cost-based payment In that final rule with comment
requirements of the ASCQR Program. (77 FR 68500). As a result, we also period, we finalized our proposal that
This reduction applied beginning with finalized our proposal that the ASC all other applicable adjustments to the
the CY 2014 payment rates (77 FR payment rates for these services would ASC national unadjusted payment rates
68500). For a complete discussion of the not be reduced for failure to meet the would apply in those cases when the
calculation of the ASC conversion factor ASCQR Program requirements because annual update is reduced for ASCs that
and our finalized proposal to update the the payment rates for these services are fail to meet the requirements of the
ASC payment rates using the inpatient not calculated using the ASC conversion ASCQR Program (77 FR 68500). For
hospital market basket update for CYs factor and, therefore, not affected by example, the following standard
2019 through 2023, we refer readers to reductions to the annual update (77 FR adjustments would apply to the reduced
the CY 2019 OPPS/ASC final rule with 68500). national unadjusted payment rates: the
comment period (83 FR 59073 through Office-based surgical procedures wage index adjustment; the multiple
59080). (generally those performed more than 50 procedure adjustment; the interrupted
In the CY 2013 OPPS/ASC final rule percent of the time in physicians’ procedure adjustment; and the
with comment period (77 FR 68499 offices) and separately paid radiology adjustment for devices furnished with
through 68500), in order to implement services (excluding covered ancillary full or partial credit or without cost (77
the requirement to reduce the annual radiology services involving certain FR 68500). We believe that these
update for ASCs that fail to meet the nuclear medicine procedures or adjustments continue to be equally
ASCQR Program requirements, we involving the use of contrast agents) are applicable to payment for ASCs that do
finalized our proposal that we would paid at the lesser of the PFS nonfacility not meet the ASCQR Program
calculate two conversion factors: A full PE RVU-based amounts or the amount requirements (77 FR 68500).
update conversion factor and an ASCQR calculated under the standard ASC In the CY 2015, CY 2016, CY 2017, CY
Program reduced update conversion ratesetting methodology. Similarly, in 2018, and CY 2019 OPPS/ASC final
factor. We finalized our proposal to the CY 2015 OPPS/ASC final rule with rules with comment period (79 FR
calculate the reduced national comment period (79 FR 66933 through 66981 through 66982; 80 FR 70537
unadjusted payment rates using the 66934), we finalized our proposal that through 70538; 81 FR 79825 through
ASCQR Program reduced update payment for certain diagnostic test 79826; 82 FR 59475 through 59476; and
83 FR 59138 through 59139, OPO meets the performance-related sex, race, and cause of death among
respectively), we did not make any standards prescribed by the Secretary. eligible deaths.
other changes to these policies. We did To receive payment under the Medicare We noted that if we finalize this
not propose any changes to these program or the Medicaid program for proposal, this change would take effect
policies for CY 2020 in the CY 2020 organ procurement costs, the entity on the effective date of the final rule
OPPS/ASC proposed rule (84 FR 39570 must have an agreement with, or be with comment period, which would
through 39571), did not receive any designated by, the Secretary (section occur during the 2022 recertification
public comments on these policies, and 1138(b)(1)(F) of the Act and 42 CFR cycle. Because the final regulation
are finalizing the continuation of these 486.304). change would be prospective from the
policies for CY 2020. Pursuant to section 371(b)(1)(D)(ii)(II) final rules’ effective date in order to give
of the PHS Act, the Secretary is required OPOs adequate time to comply with the
XVI. Requirements for Hospitals To to establish outcome and process change to the definition for ‘‘expected
Make Public a List of Their Standard performance measures for OPOs to meet donation rate,’’ we also proposed to
Charges and Request for Information based on empirical evidence, obtained change the time period for the observed
(RFI): Quality Measurement Relating to through reasonable efforts, of organ donation rate for the second outcome
Price Transparency for Improving donor potential and other related factors measure for the 2022 recertification
Beneficiary Access to Provider and in each service area of the qualified cycle only. As a result, we proposed to
Supplier Charge Information OPO. An OPO also must be a member revise § 486.318(a)(2), (b)(2), and (c)(1)
In the CY 2020 Medicare Hospital of and abide by the rules and to reduce the time period for this
Outpatient Prospective Payment System requirements of the OPTN that have outcome measure. We proposed to
and Ambulatory Surgical Center been approved by the Secretary (section calculate the expected donation rate
Payment System Proposed Rule (84 FR 1138(b)(1)(D) of the Act). We established using 12 of the 24 months of data
39398), we proposed requirements for Conditions for Coverage (CfCs) for OPOs following the effective date of the final
hospitals to make public a list of their to be able to receive payments from the rule with comment period (using data
standard charges pursuant to 2718(e) of Medicare and Medicaid programs at 42 from January 1, 2020 through December
the Public Health Service (PHS) Act. We CFR part 486, subpart G, to implement 31, 2021). After the 2022 recertification
received over 1,400 comments on our the statutory requirements. These cycle, and if there were no other
proposed requirements for hospitals to regulations set forth the certification changes to the OPO outcome measures,
make public their standard charges. We and recertification processes, outcome we would return to assess OPO
intend to summarize and respond to requirements, and process performance performance based on 36 months of
public comments on the proposed measures for OPOs and were effective data.
policies in a forthcoming final rule. on July 31, 2006 (71 FR 30982). Comment: We received public
In addition, to inform our future We proposed to harmonize the CMS comments from a wide range of
efforts to develop policies related to definition of ‘‘expected donation rate’’ individuals, OPOs, national associations
transparency in health care charges, we with the Scientific Registry for and coalitions, and the Organ
published a Request for Information that Transplant Recipient’s (SRTR) Procurement and Transplantation
sought stakeholder input on a number of definition of the term. The SRTR Network/United Network for Organ
related quality of health care issues. We operates under contract from the Health Sharing (OPTN/UNOS). The vast
received over 63 comments. We Resources and Services Administration majority of comments were supportive
appreciate the feedback we received and (HRSA) and is responsible for providing of the proposed change to the definition
will take it into account as we further statistical and other analytic support to of ‘‘expected donation rate’’.
consider our future policies. the Organ Procurement and Response: We appreciate the
Transplantation Network (OPTN) for commenters’ support for our proposal
XVII. Organ Procurement purposes including the formulation and and we thank them for their feedback.
Organizations (OPOs) Conditions for evaluation of organ allocation and other Our proposal to align our definition of
Coverage (CfCs): Proposed Revision of OPTN policies.167 As we noted in the ‘‘expected donation rate’’ with the
the Definition of ‘‘Expected Donation proposed rule (84 FR 39596), in 2009 SRTR’s definition will enable us to
Rate’’ the SRTR determined that a more continue to enforce our second outcome
precise method to calculate an OPO’s measure, eliminate provider confusion,
A. Revision of the Definition of
expected donation rate would be to base and provide consistency between the
‘‘Expected Donation Rate’’
it on the national experience for OPOs CMS requirements and the SRTR’s data.
To be an OPO, an entity must meet serving similar eligible donor We therefore are finalizing our proposal
the applicable requirements of both the populations and donation service areas to revise the definition of ‘‘expected
Act and the Public Health Service Act (DSAs) and then adjust for patient donation rate’’ to align with the SRTR’s
(the PHS Act). Section 1138(b) of the characteristics, that is age, sex, race, and definition, without modification.
Act provides the statutory qualifications cause of death among eligible deaths. Specifically, the revised definition will
and requirements that an OPO must We agree with the SRTR’s assessment state that the expected donation rate per
meet in order for organ procurement for this specific measure and we 100 eligible deaths is the rate expected
costs to be paid under the Medicare proposed to revise such definition to for an OPO based on the national
program or the Medicaid program. state that the expected donation rate per experience for OPOs serving similar
Section 1138(b)(1)(A) of the Act 100 eligible deaths would be the rate eligible donor populations and DSAs.
specifies that an OPO must operate expected for an OPO based on the This rate would be adjusted for the
under a grant made under section 371(a) national experience for OPOs serving distributions of age, sex, race, and cause
of the PHS Act or must be certified or similar eligible donor populations and of death among eligible deaths.
recertified by the Secretary as meeting DSAs. We proposed that this rate would Comment: Many commenters
the standards to be a qualified OPO be adjusted for the distributions of age, disagreed with the proposed change to
within a certain time period. Congress the timeframe, which would reduce the
has provided that payment may be made 167 https://www.srtr.org/about-srtr/mission-vision- time period for this outcome measure
for organ procurement cost ‘‘only if’’ the and-values/. for the 2022 recertification cycle only.
The commenters stated that reducing the second measure due to limitations of Administration (HRSA) and the OPTN
the time period may have unintended the data or other variables as described to develop combined OPO and
consequences and distort, in a positive by the commenters would not be transplant center metrics; support for
or negative way, an OPO’s performance. decertified based only on the changed the development of best practices
Some also stated that this proposal regulation. If no subsequent changes are regarding donation after cardiac death
would affect OPOs with smaller made to the outcome measure (DCD) and regulations to require
volumes, and those that may be requirements via rulemaking, the new support for DCD; support for a cause,
sensitive to random variability over definition of ‘‘expected donation rate’’ age, and, location consistent (CALC)
short periods of time. In summary, the will apply after the 2022 recertification deaths metric, recommendations to
commenters stated that this change cycle. OPOs must continue to comply develop metrics that include donor
would not provide adequate time period with the other CfCs and continue their hospitals and transplant centers;
for a statistically meaningful set of data quality improvement efforts through recommendations that referral and
and may incorrectly identify OPOs as their Quality Assurance and notifications of imminent death and
failing the metric due to normal random Performance Improvement (QAPI) potential donors be improved; support
fluctuation in activity, rather than program, as required by our rules at for addressing issues that OPOs in non-
underlying performance concerns. The § 486.348. contiguous states and territories face;
commenters requested that the new requests to improve reimbursement for
B. Request for Information Regarding
definition of ‘‘expected donation rate’’ transplant centers and OPOs; and
Potential Changes to the Organ
therefore apply to the next suggestions to better align definitions
Procurement Organization and
recertification cycle, after the and terminology.
Transplant Center Regulations Additional suggestions included: A
completion of the current cycle.
Response: We understand In the proposed rule (84 FR 39597), recommendation that CMS not use the
commenters’ concerns regarding the we stated that we were considering a observed versus expected measure to
proposed change to the time period for comprehensive proposal to update the evaluate OPOs and that the yield
this second outcome measure and we CfCs for OPOs and possibly the CoPs for measure should ultimately be replaced
are sensitive as to how such a change transplant centers, and that we were or supplemented with a combined OPO
might negatively impact OPOs. We note therefore seeking public input regarding and transplant center metric that
that it was not our intention to unfairly what revisions may be appropriate for measures how they interact to maximize
penalize OPOs or undermine our goals the current CfCs for OPOs, set forth at organ transplants; a recommendation
of accurately measuring OPO 42 CFR 486.301 through 486.360, and that CMS take into consideration an
performance. Rather, given the fact that the current CoPs for transplant centers, OPO’s work and commitment to
the finalization of the CY 2020 OPPS/ set forth at 42 CFR 482.68 through research and development, deceased
ASC proposed rule would occur during 482.104. donor research, and participation in
the 2022 recertification cycle, we We also solicited comments on such projects/practices as the HOPE
attempted to mitigate any timing issues whether the following two potential Project, Donor Hypothermia Study and
with regards to the use of data for OPO outcome measures would be valid Stanford Donor Heart Study; a
purposes of determining the second measures and would be consistent with recommendation that an in-patient
outcome measure by applying the same statutory requirements. We noted that assessment of ICU deaths be conducted;
standard to all OPOs for the identical we were especially interested in public a recommendation that CMS eliminate
time period once the rule was effective. comments about the validity and or revise the transplant center outcomes
We believed that a 12-month period of reliability of these possible measures. and that the SRTR star ratings or
the 24 months of data following the The first potential measure would be denominator for metrics or adjustments
effective date of the final rule with the actual deceased donors as a be eliminated; that CMS should
comment period would be sufficient to percentage of inpatient deaths among prioritize national databases for
determine an OPO’s performance on patients 75 years of age or younger with regulatory purposes; and a
this measure. However, we agree that a cause of death consistent with organ recommendation that CMS, HRSA,
using 12 out of the 24 months of data donation. The data on inpatient deaths, OPTN, SRTR and the Centers for
may have unintended consequences on including additional related Disease Control (CDC) form a taskforce
OPOs and the recertification process, demographic data, would be derived to examine publically available data
and therefore we are not finalizing this from the Center for Disease Control sources that would evaluate sources and
proposal. (CDC) Detailed Mortality File and the identify the practicality of identifying
In order to ensure fairness for OPOs National Center for Health Statistic’s ventilated patient who die in hospitals/
and in order to finalize our change to National Vital Statistics Report. emergency departments.
the definition of ‘‘expected donation The second potential measure is the Response: We thank the commenters
rate’’ after the effective date of the final actual organs transplanted as a for their responses to our RFI. We will
rule, we are finalizing a policy that percentage of inpatient deaths among continue to review the public comments
would not require all OPOs to meet the patients 75 years of age or younger with on the RFI for future rulemaking and
standards of the second outcome a cause of death consistent with organ potential revisions to the CfCs for OPOs
measure for the 2022 recertification donation. and the CoPs for transplant centers.
cycle only. We are requiring OPOs to Comment: We received a wide range
meet one of the two other outcome of comments on the RFI. Most C. Miscellaneous Comments
measures in order to be recertified (the commenters supported changing the Although not specifically discussed in
OPO’s donation rate measure and OPO and transplant center CfCs and the CY 2020 OPPS/ASC proposed rule,
aggregate donor yield measure) for the CoPs, and offered specific suggestions we wanted to address the multiple
2022 recertification cycle only. By on potential changes to these commenters who urged us to finalize
deferring the use of the new standard, requirements. Some of those suggestions our proposal on the transplant center
we would ensure that no OPOs would included, but were not limited to: CoPs. We note that, in response to
be prejudiced by the limited time period Recommendations that CMS work with public comments that we received on
and OPOs that may not be able to meet the Health Resources and Services the CY 2020 OPPS/ASC proposed rule,
we finalized our proposals to remove B. Medicare DOS Policy and the ‘‘14- paid separately under Medicare Part B
the Medicare re-approval requirements Day Rule’’ (as explained in more detail below).
for transplant centers. We refer readers We also revised the DOS requirements
In the final rule with comment period
to the Medicare and Medicaid Programs; for a chemotherapy sensitivity test
entitled, in relevant part, ‘‘Revisions to
Regulatory Provisions To Promote performed on live tissue. As discussed
Payment Policies, Five-Year Review of
Program Efficiency, Transparency, and in the December 1, 2006 MPFS final rule
Work Relative Value Units, Changes to
Burden Reduction; Fire Safety (71 FR 69706), we agreed with
the Practice Expense Methodology
Requirements for Certain Dialysis commenters that these tests, which are
Under the Physician Fee Schedule, and
primarily used to determine
Facilities; Hospital and Critical Access Other Changes to Payment Under Part
posthospital chemotherapy care for
Hospital (CAH) Changes To Promote B’’ published in the Federal Register on
patients who also require hospital
Innovation, Flexibility, and December 1, 2006 (December 1, 2006
treatment for tumor removal or
Improvement in Patient Care final rule MPFS final rule) (71 FR 69705 through
resection, appear to be unrelated to the
(84 FR 51732) for more information. 69706), we added a new § 414.510 in
hospital treatment in cases where it
title 42 of the CFR regarding the clinical
XVIII. Clinical Laboratory Fee would be medically inappropriate to
laboratory DOS requirements and
Schedule: Revisions to the Laboratory collect a test specimen other than at the
revised our DOS policy for stored
Date of Service Policy time of surgery, especially when the
specimens. We explained in that MPFS
specific drugs to be tested are ordered
A. Background on the Medicare Part B final rule that the DOS of a test may
at least 14 days following hospital
Laboratory Date of Service Policy affect payment for the test, especially in
discharge. As a result, we revised the
situations in which a specimen that is
DOS policy for chemotherapy
The date of service (DOS) is a collected while the patient is being
sensitivity tests, based on our
required data field on all Medicare treated in a hospital setting (for
understanding that the results of these
claims for laboratory services. However, example, during a surgical procedure) is
tests, even if they were available
a laboratory service may take place over later used for testing after the patient
immediately, would not typically affect
a period of time—the date the laboratory has been discharged from the hospital.
the treatment regimen at the hospital.
test is ordered, the date the specimen is We noted that payment for the test is
Specifically, we modified the DOS for
collected from the patient, the date the usually bundled with payment for the
chemotherapy sensitivity tests
laboratory accesses the specimen, the hospital service, even when the results
performed on live tissue in
date the laboratory performs the test, of the test did not guide treatment
§ 414.510(b)(3) so that the DOS is the
during the hospital stay. To address
and the date results are produced may date the test was performed if the
concerns raised for tests related to
occur on different dates. In the final rule following conditions are met:
cancer recurrence and therapeutic • The decision regarding the specific
on coverage and administrative policies
interventions, we finalized chemotherapeutic agents to test is made
for clinical diagnostic laboratory modifications to the DOS policy in
services published in the Federal at least 14 days after discharge;
§ 414.510(b)(2)(i) for a test performed on • The specimen was collected while
Register on November 23, 2001 (66 FR a specimen stored less than or equal to
58791 through 58792), we adopted a the patient was undergoing a hospital
30 calendar days from the date it was surgical procedure;
policy under which the DOS for clinical collected (a non-archived specimen), so • It would be medically inappropriate
diagnostic laboratory services generally that the DOS is the date the test was to have collected the sample other than
is the date the specimen is collected. In performed (instead of the date of during the hospital procedure for which
that final rule, we also established a collection) if the following conditions the patient was admitted;
policy that the DOS for laboratory tests are met: • The results of the test do not guide
that use an archived specimen is the • The test is ordered by the patient’s treatment provided during the hospital
date the specimen was obtained from physician at least 14 days following the stay; and
storage (66 FR 58792). date of the patient’s discharge from the • The test was reasonable and
In 2002, we issued Program hospital; medically necessary for the treatment of
Memorandum AB–02–134, which • The specimen was collected while an illness.
permitted contractors discretion in the patient was undergoing a hospital We explained in the December 1,
making determinations regarding the surgical procedure; 2006 MPFS final rule that, for
length of time a specimen must be • It would be medically inappropriate chemotherapy sensitivity tests that meet
to have collected the sample other than this DOS policy, Medicare would allow
stored to be considered ‘‘archived.’’ In
during the hospital procedure for which separate payment under Medicare Part
response to comments requesting that
the patient was admitted; B; that is, separate from the payment for
we issue a national standard to clarify
• The results of the test do not guide hospital services.
when a stored specimen can be treatment provided during the hospital
considered ‘‘archived,’’ in the stay; and C. Billing and Payment for Laboratory
Procedures for Maintaining Code Lists • The test was reasonable and Services Under the OPPS
in the Negotiated National Coverage medically necessary for the treatment of As we explained in the CY 2020
Determinations for Clinical Diagnostic an illness. OPPS/ASC proposed rule (84 FR 39599),
Laboratory Services final notice, As we stated in the December 1, 2006 the DOS requirements at 42 CFR
published in the Federal Register on MPFS final rule, we established these 414.510 are used to determine whether
February 25, 2005 (70 FR 9357), we five criteria, which we refer to as the a hospital bills Medicare for a clinical
defined an ‘‘archived’’ specimen as a ‘‘14-day rule,’’ to distinguish laboratory diagnostic laboratory test (CDLT) or
specimen that is stored for more than 30 tests performed as part of posthospital whether the laboratory performing the
calendar days before testing. Specimens care from the care a beneficiary receives test bills Medicare directly. Separate
stored for 30 days or less continued to in the hospital. When the 14-day rule regulations at 42 CFR 410.42(a) and
have a DOS of the date the specimen applies, laboratory tests are not bundled 411.15(m) generally provide that
was collected. into the hospital stay, but are instead Medicare will not pay for a service
furnished to a hospital patient during an from packaging because we believed combination of tests; and may include
encounter by an entity other than the these relatively new tests may have a other assays.
hospital unless the hospital has an different pattern of clinical use, which Or:
arrangement (as defined in 42 CFR may make them generally less tied to a • Criterion (B): The test is cleared or
409.3) with that entity to furnish that primary service in the hospital approved by the Food and Drug
particular service to its patients, with outpatient setting than the more Administration.
certain exceptions and exclusions. common and routine laboratory tests Generally, under the revised CLFS,
These regulations, which we refer to as that are packaged. ADLTs are paid using the same
the ‘‘under arrangements’’ provisions in For similar reasons, in the CY 2017 methodology based on the weighted
this discussion, require that if the DOS OPPS/ASC final rule with comment median of private payor rates as other
falls during an inpatient or outpatient period (81 FR 79592 through 79594), we CDLTs. However, updates to ADLT
stay, payment for the laboratory test is extended the exclusion to also apply to payment rates occur annually instead of
usually bundled with the hospital all ADLTs that meet the criteria of every 3 years. The payment
service. section 1834A(d)(5)(A) of the Act, methodology for ADLTs is detailed in
Under our current rules, if a test which we describe below. We stated the June 23, 2016 CLFS final rule (81 FR
meets all DOS requirements in that we will assign status indicator ‘‘A’’ 41076 through 41083). For additional
§ 414.510(b)(2)(i), (b)(3), or (b)(5) (an (Separate payment under the CLFS) to information regarding ADLTs, we refer
additional exception finalized in the CY ADLTs once a laboratory test is readers to the CMS website: https://
2018 OPPS/ASC final rule with designated an ADLT under the CLFS. www.cms.gov/Medicare/Medicare-Fee-
comment period that we describe later Laboratory tests that are separately for-Service-Payment/
in this section), the DOS is the date the payable and are listed on the CLFS are ClinicalLabFeeSched/PAMA-
test was performed. In this situation, the paid at the CLFS payment rates outside regulations.html.
laboratory would bill Medicare directly the OPPS.
for the test and would be paid under the E. Additional Laboratory DOS Policy
Clinical Laboratory Fee Schedule D. ADLTs Under the New Private Payor Exception for the Hospital Outpatient
(CLFS) directly by Medicare. However, Rate-Based CLFS Setting
if the test does not meet the DOS Section 1834A of the Act, as In the CY 2018 OPPS/ASC final rule
requirements in § 414.510(b)(2)(i), (b)(3), established by section 216(a) of Public with comment period (82 FR 59393
or (b)(5), the DOS would be the date the Law 113–93, the Protecting Access to through 59400), we established an
specimen was collected from the Medicare Act of 2014 (PAMA), required additional exception at § 414.510(b)(5)
patient. In that case, the hospital would significant changes to how Medicare for the hospital outpatient setting so that
bill Medicare for the test and then pays for CDLTs under the CLFS. Section the DOS for molecular pathology tests
would pay the laboratory that performed 216(a) of PAMA also established a new and certain ADLTs that are excluded
the test, if the laboratory provided the from the OPPS packaging policy is the
subcategory of CDLTs known as ADLTs,
test under arrangement. date the test was performed (instead of
with separate reporting and payment
In recent rulemakings, we have the date of specimen collection) if
reviewed appropriate payment under requirements under section 1834A of
the Act. In the CLFS final rule certain conditions are met. Under the
the OPPS for certain diagnostic tests exception that we finalized at
that are not commonly performed by published in the Federal Register on
June 23, 2016, entitled ‘‘Medicare § 414.510(b)(5), in the case of a
hospitals. In CY 2014, we finalized a molecular pathology test or a test
policy to package certain CDLTs under Program; Medicare Clinical Diagnostic
Laboratory Tests Payment System Final designated by CMS as an ADLT under
the OPPS (78 FR 74939 through 74942 paragraph (1) of the definition of an
and 42 CFR 419.2(b)(17) and 419.22(l)). Rule’’ (81 FR 41036), we implemented
the requirements of section 1834A of the ADLT in § 414.502, the DOS of the test
In CYs 2016 and 2017, we made some must be the date the test was performed
modifications to this policy (80 FR Act.
only if:
70348 through 70350; 81 FR 79592 As defined in § 414.502, an ADLT is • The test was performed following a
through 79594). Under our current a CDLT covered under Medicare Part B hospital outpatient’s discharge from the
policy, certain CDLTs that are listed on that is offered and furnished only by a hospital outpatient department;
the CLFS are packaged as integral, single laboratory, and cannot be sold for • The specimen was collected from a
ancillary, supportive, dependent, or use by a laboratory other than the single hospital outpatient during an encounter
adjunctive to the primary service or laboratory that designed the test or a (as both are defined in 42 CFR 410.2);
services provided in the hospital successor owner. Also, an ADLT must • It was medically appropriate to
outpatient setting during the same meet either Criterion (A), which have collected the sample from the
outpatient encounter and billed on the implements section 1834A(d)(5)(A) of hospital outpatient during the hospital
same claim. Specifically, we the Act, or Criterion (B), which outpatient encounter;
conditionally package most CDLTs and implements section 1834A(d)(5)(B) of • The results of the test do not guide
only pay separately for a laboratory test the Act, as follows: treatment provided during the hospital
when it is: (1) The only service provided • Criterion (A): The test is an analysis outpatient encounter; and
to a beneficiary on a claim; (2) of multiple biomarkers of • The test was reasonable and
considered a preventive service; (3) a deoxyribonucleic acid (DNA), medically necessary for the treatment of
molecular pathology test; or (4) an ribonucleic acid (RNA), or proteins; an illness.
advanced diagnostic laboratory test when combined with an empirically In the CY 2018 OPPS/ASC final rule
(ADLT) that meets the criteria of section derived algorithm, yields a result that with comment period (82 FR 59397), we
1834A(d)(5)(A) of the Act (78 FR 74939 predicts the probability a specific explained that we believed the
through 74942; 80 FR 70348 through individual patient will develop a certain laboratory DOS policy in effect prior to
70350; and 81 FR 79592 through 79594). condition(s) or respond to a particular CY 2018 created administrative
In the CY 2016 OPPS/ASC final rule therapy(ies); provides new clinical complexities for hospitals and
with comment period, we excluded all diagnostic information that cannot be laboratories with regard to molecular
molecular pathology laboratory tests obtained from any other test or pathology tests and laboratory tests
expected to be designated by CMS as OPPS packaging policy, which we learning through communications with
ADLTs that meet the criteria of section understood are used to guide and representatives of providers and
1834A(d)(5)(A) of the Act. We noted manage the patient’s care after the suppliers affected by the policy that
that under the laboratory DOS policy in patient is discharged from the hospital there are still many entities who will
effect prior to CY 2018, if the tests were outpatient department. We noted that not be able to implement the laboratory
ordered less than 14 days following a we believed that, like the other tests DOS exception and will need additional
hospital outpatient’s discharge from the currently subject to DOS exceptions, time to come into compliance. The
hospital outpatient department, these tests can legitimately be enforcement discretion period is
laboratories generally could not bill distinguished from the care the patient currently in effect until January 2, 2020.
Medicare directly for the molecular receives in the hospital, and thus we The latest enforcement discretion
pathology test or ADLT. In those would not be unbundling services that announcement as well as CR 10419,
circumstances, the hospital had to bill are appropriately associated with Transmittal 4000 is available on the
Medicare for the test, and the laboratory hospital treatment. Moreover, we CMS website at: https://www.cms.gov/
had to seek payment from the hospital. reiterated that these tests are already Medicare/Medicare-Fee-for-Service-
We noted that commenters informed us paid separately outside of the OPPS at Payment/ClinicalLabFeeSched/Clinical-
that because ADLTs are performed by CLFS payment rates. Therefore, we Lab-DOS-Policy.html.
only a single laboratory and molecular agreed with the commenters that the As we explained in the CY 2020
pathology tests are often performed by laboratory performing the test should be OPPS/ASC proposed rule (84 FR 39600),
only a few laboratories, and because permitted to bill Medicare directly for during this time of enforcement
hospitals may not have the technical these tests, instead of relying on the discretion, we have continued to gage
ability to perform these complex tests, hospital to bill Medicare on behalf of the industry’s readiness to implement
the hospital may be reluctant to bill the laboratory under arrangements. the laboratory DOS exception at
Medicare for a test it would not A list of the specific laboratory tests § 414.510(b)(5). Stakeholders, including
typically (or never) perform. The currently subject to the laboratory DOS representatives of hospitals, have
commenters also stated that as a result, exception at § 414.510(b)(5) is available informed us that hospitals, in particular,
the hospital might delay ordering the on the CMS website at: https:// are having difficulty with developing
test until at least 14 days after the www.cms.gov/Medicare/Medicare-Fee- the systems changes necessary to
patient is discharged from the hospital for-Service-Payment/ClinicalLabFee provide the performing laboratory with
outpatient department, or even cancel Sched/Clinical-Lab-DOS-Policy.html. the patient’s hospital outpatient status,
the order to avoid the DOS policy, Following publication of the CY 2018 beneficiary demographic information,
which may restrict a patient’s timely OPPS/ASC final rule with comment and insurance information, such as
period, we issued Change Request (CR) whether the beneficiary is enrolled in
access to these tests. In addition, we
10419, Transmittal 4000, the claims original fee-for-service Medicare or a
noted that we had heard from
processing instruction implementing the specific Medicare Advantage plan.
commenters that the laboratory DOS
laboratory DOS exception at According to stakeholders, the
policy in effect prior to CY 2018 may
§ 414.510(b)(5), with an effective date of performing laboratory requires this
have disproportionately limited access
January 1, 2018 and an implementation information so that it can bill Medicare
for Medicare beneficiaries under
date of July 2, 2018. After issuing CR directly for the test instead of seeking
Medicare Parts A and B, because
10419, we heard from stakeholders that payment from the hospital.
Medicare Advantage plans under
many hospitals and laboratories were In addition, stakeholders, including
Medicare Part C and other private
having administrative difficulties representatives of laboratories, have
payors allow laboratories to bill directly implementing the DOS exception set noted that some entities performing
for tests they perform. forth at § 414.510(b)(5). On July 3, 2018, molecular pathology testing subject to
We also recognized that greater we announced that, for a 6-month the laboratory DOS exception, such as
consistency between the laboratory DOS period, we would exercise enforcement blood banks and blood centers, may not
rules and the current OPPS packaging discretion with respect to the laboratory be enrolled in the Medicare program
policy would be beneficial and would DOS exception at § 414.510(b)(5). We and may not have established a
address some of the administrative and explained that stakeholder feedback mechanism to bill Medicare directly.
billing issues created by the DOS policy suggested many providers and suppliers According to these stakeholders, blood
in effect prior to CY 2018. We noted that would not be able to implement the banks and blood centers that are not
we exclude all molecular pathology laboratory DOS exception by the July 2, currently enrolled in the Medicare
tests and ADLTs under section 2018 implementation date established program would need to establish a
1834A(d)(5)(A) of the Act from the by CR 10419, and that such entities billing mechanism so that they can bill
OPPS packaging policy because we required additional time to develop the Medicare directly when the
believe these tests may have a different systems changes necessary to enable the requirements of § 414.510(b)(5) are met.
pattern of clinical use, which may make performing laboratory to bill for tests Stakeholders have asserted that
them generally less tied to a primary subject to the exception. We noted that establishing a billing mechanism is
service in the hospital outpatient setting this enforcement discretion applies to labor intensive and that blood banks
than the more common and routine all providers and suppliers with regard and blood centers currently lack the
laboratory tests that are packaged, and to ADLTs and molecular pathology tests financial resources and expertise to take
we had already established exceptions subject to the laboratory DOS exception on this task.
to the DOS policy that permit the DOS policy, and that during the enforcement We also noted in the CY 2020 OPPS/
to be the date of performance for certain discretion period, hospitals may ASC proposed rule that protein-based
tests that we believe are not related to continue to bill for these tests that Multianalyte Assays with Algorithmic
the hospital treatment and are used to would otherwise be subject to the Analysis (MAAAs) that are not
determine posthospital care. We stated laboratory DOS exception. considered molecular pathology tests
that we believed a similar exception is We then extended the enforcement and are not designated as ADLTs under
justified for the molecular pathology discretion period for two additional, paragraph (1) of the definition of ADLT
tests and ADLTs excluded from the consecutive 6-month periods, after in § 414.502, are also conditionally
packaged under the OPPS at this time. comment on these changes. Specifically, and other factors and that the ordering
Several stakeholders have suggested that we sought comment on: physician would be aware of these
they believe that the pattern of clinical • Changing the test results beneficiary characteristics. As such, we
use of some of these protein-based requirement at 42 CFR 414.510(b)(5)(iv); indicated that it should be the role of
MAAAs make them relatively • Limiting the laboratory DOS the ordering physician to determine
unconnected to the primary hospital exception at 42 CFR 414.510(b)(5) to whether the results of a molecular
outpatient service, though they do not ADLTs; and/or pathology test or ADLT are or are not
currently qualify for the DOS exception • Excluding blood banks and blood intended to guide treatment during a
at § 414.510(b)(5) solely because they centers from the laboratory DOS hospital outpatient encounter.
are MAAAs. We stated that a protein- exception at 42 CFR 414.510(b)(5). Therefore, we considered a revision to
based MAAA that is designated by CMS These potential revisions are our current laboratory DOS policy at
as an ADLT under paragraph (1) of the discussed below. § 414.510(b)(5)(iv) to specify that the
definition of an ADLT in § 414.502 1. Changing the Test Results ordering physician would determine
would be eligible for the DOS exception Requirement at 42 CFR 414.510(b)(5)(iv) whether the results of the ADLT or
at § 414.510(b)(5), and we intend to molecular pathology test are intended to
We explained in the CY 2020 OPPS/ guide treatment provided during a
consider policies regarding MAAAs for ASC proposed rule that, since finalizing
future rulemaking. hospital outpatient encounter, if the
the laboratory DOS exception at other four requirements under
F. Potential Revisions to Laboratory § 414.510(b)(5), we have continued to § 414.510(b)(5) are met. We noted that,
DOS Policy and Request for Public review and analyze the factors we use under this approach, the test would be
Comments to determine whether a molecular considered a hospital service unless the
pathology test or Criterion (A) ADLT is ordering physician determines that the
In the CY 2020 OPPS/ASC proposed unrelated to the hospital treatment and
rule (84 FR 39601), we stated that in test does not guide treatment during a
used to determine posthospital care, and hospital outpatient encounter. If the
response to the implementation therefore should have a DOS that is the
concerns raised by stakeholders, we ordering physician determines that the
date of performance rather than the date test results are not intended to guide
were considering making additional of specimen collection. One such factor,
changes to the laboratory DOS policy. treatment during the hospital outpatient
in § 414.510(b)(5)(iv), is that the results encounter from which the specimen was
We reiterated that, under the of the test must not guide treatment collected or during a future hospital
exception that we finalized at provided during the hospital outpatient outpatient encounter, for purposes of
§ 414.510(b)(5), for a molecular encounter—meaning, the encounter in the laboratory DOS exception at
pathology test or a test designated by which the specimen was collected. We § 414.510(b)(5), the DOS service of the
CMS as an ADLT under paragraph (1) of stated in the proposed rule that we were test would be the date of test
the definition of an ADLT in § 414.502, no longer convinced that the performance. In this situation, we
the DOS of the test must be the date the determination as to whether a molecular stated, the test would not be considered
test was performed only if: (i) The test pathology test or ADLT is separable a hospital service and the performing
was performed following a hospital from a hospital service should be based laboratory would be required to bill for
outpatient’s discharge from the hospital on whether the test results guide the test.
outpatient department; (ii) the specimen treatment during the specific hospital We noted that, conversely, if the other
was collected from a hospital outpatient outpatient encounter in which the four requirements under § 414.510(b)(5)
during an encounter (as both are defined specimen was collected. We suggested are met but the ordering physician
in 42 CFR 410.2); (iii) it was medically that a molecular pathology test or an determines that the results of the
appropriate to have collected the sample ADLT that is performed on a specimen laboratory test are intended to guide
from the hospital outpatient during the collected during a hospital outpatient treatment during a hospital outpatient
hospital outpatient encounter; (iv) the encounter, in which the results of the encounter, the DOS would be the date
results of the test do not guide treatment test are intended to guide treatment of specimen collection. As a result, the
provided during the hospital outpatient during a future hospital outpatient hospital that collected the specimen
encounter; and (v) the test was encounter, is a hospital service, and would bill for the laboratory test under
reasonable and medically necessary for therefore should be billed by the arrangements and the laboratory would
the treatment of an illness. When all hospital that collected the specimen seek payment from the hospital for the
conditions under the laboratory DOS under arrangements, just like if the test test. We stated that this potential
exception at § 414.510(b)(5) are met, the does not meet one of the other prongs revision to the laboratory DOS
DOS is the date of test performance, of § 414.510(b)(5). In contrast, if the exception at § 414.510(b)(5) would be
instead of the date of specimen results of the test are not intended to consistent with our belief that a
collection, which effectively unbundles guide treatment during a hospital molecular pathology test or a Criterion
the test from the hospital outpatient outpatient encounter, and if all other (A) ADLT is a hospital service when the
encounter. As such, the test is not requirements in § 414.510(b)(5) are met, results of the test are intended to guide
considered a hospital outpatient service the test is separable from a hospital treatment during a hospital outpatient
for which the hospital must bill service and therefore, should be encounter.
Medicare and for which the performing considered a laboratory service and the We requested comments from
laboratory must seek payment from the performing laboratory should bill for the hospitals, laboratories, physicians and
hospital, but rather a laboratory test test. non-physician practitioners, and other
under the CLFS for which the We noted that a test’s relationship to interested stakeholders regarding this
performing laboratory must bill a hospital outpatient encounter depends potential revision to the laboratory DOS
Medicare directly. In the CY 2020 on many factors, including the patient’s exception at § 414.510(b)(5). In
OPPS/ASC proposed rule we considered current diagnosis (or lack of a current particular we sought comments
three options for potential changes to diagnosis), the procedure(s) being regarding our view that when the results
the laboratory DOS exception at considered for the patient, the patient’s of molecular pathology testing and
§ 414.510(b)(5), and we requested current and previous medical history, Criterion (A) ADLTs are intended to
guide treatment during a future hospital during a hospital outpatient encounter current clinical practice. They noted
outpatient encounter, the test is a and has afforded physicians more that the very reason why the physician
hospital service. We also requested consistent and timely access to is ordering the test is to determine the
public comments regarding the precision diagnostic information to next clinical intervention steps for the
administrative aspects of requiring the guide clinical decision-making. A few patient. However, the ordering
ordering physician to determine when commenters also submitted a summary physician cannot be expected to
the test results are not intended to guide analysis of Medicare Part B claims data reasonably predict how he or she will
the treatment during a hospital comparing the utilization of molecular use the test results because the
outpatient encounter, as well as the pathology testing in CY 2018, which physician lacks the information to make
process for the ordering physician to reflects the first year of the laboratory that prediction at the time of ordering.
document this decision and provide DOS exception, to CY 2017, which was They also noted that the physician
notification to the hospital that the last year before that exception ordering the testing may not be the only
collected the specimen for billing became effective. The analysis found physician who treats the patient based
purposes. We noted that we would that the total number of molecular on the test results. For example, patients
consider finalizing this potential pathology test claims following a with complex or chronic conditions,
revision to the laboratory DOS policy as hospital outpatient encounter increased like cancer, often have multidisciplinary
a result of our review of the comments from 43,012 claims in 2017 to 66,637 care teams that coordinate various
received on this topic. claims in 2018, which represents an aspects of the patients’ treatment plan.
We also noted that we were only increase of about 55 percent. The In addition, the patient, and the
soliciting comments on potential commenters noted that despite the CMS patient’s family are frequently involved
changes to the laboratory DOS exception announcement of enforcement in the treatment decision, which is
at § 414.510(b)(5), and not the 14-day discretion with respect to the laboratory informed by the results of the test.
rule DOS exception at § 414.510(b)(2) or DOS exception at § 414.510(b)(5), even Therefore, commenters expressed that it
the chemotherapy sensitivity test DOS in its first year this exception for the is impossible for the ordering physician
exception at § 414.510(b)(3). We stated hospital outpatient setting has improved to predict the treatment preferences
that these exceptions would continue to beneficiary access to timely diagnostic and/or site of treatment of the entire
include the requirement that the results information and more effective targeted care team, as well as the preferences of
of the test do not guide treatment therapy and/or clinical management. As the patient and the patient’s family.
provided during the hospital stay, such, they urged us not to make any Many stakeholders also pointed out
meaning the hospital stay in which the changes to the current laboratory DOS the administrative complexities
specimen was collected. Although we exception at § 414.510(b)(5), except for associated with requiring the ordering
recognized that the considerations about the change that would exclude blood physician to predict the future use of
how a hospital service is determined banks and centers. the test results, which would also
under § 414.510(b)(5) discussed Response: We appreciate these require documentation in the
previously may also be applicable to the comments and the claims analysis beneficiary’s medical record and
14-day rule DOS exception and supporting the commenters’ statements coordination with the hospital and
chemotherapy sensitivity test DOS about increased beneficiary access to performing laboratory to ensure that the
exception, we explained that we were molecular pathology testing since the correct entity bills for the test. They
only considering revisions to the laboratory DOS exception at contended that this potential policy
laboratory DOS exception at § 414.510(b)(5) became effective. As change would result in a significant
§ 414.510(b)(5) at that time. Because of discussed later in this section, because amount of ongoing administrative
the administrative issues raised by of the concerns and objections raised by burden. For example, the hospital
stakeholders regarding the commenters, we are not finalizing the would need to develop a mechanism to
implementation of the laboratory DOS potential change to the test results ensure that the ordering physician
exception at § 414.510(b)(5), we stated requirement at § 414.510(b)(5)(iv) or the actually makes a determination as to
that we believed a cautious and potential revision that would limit whether the test results guide treatment
incremental approach to making § 414.510(b)(5) to ADLTs approved during a hospital outpatient encounter
changes to laboratory DOS policy is under Criterion (A). for each molecular pathology test and
warranted. As such, any potential Comment: The overwhelming ADLT that meets the requirements of
changes to the 14-day rule DOS majority of commenters urged us not to laboratory DOS exception at
exception at § 414.510(b)(2) and the finalize the potential change to the test § 414.510(b)(5). The hospital would then
chemotherapy sensitivity test DOS results requirement at § 414.510(b)(5)(iv) need to extract that determination from
exception at § 414.510(b)(3) would be because doing so would be inconsistent the beneficiary’s medical record and
addressed in future rulemaking. with current clinical practice and reflect it in the hospital’s billing system,
A summary of the public comments administratively burdensome, and may and make certain not to bill for a test
received on this potential revision and lead to beneficiary access issues. A few that is not intended to guide treatment
our responses are provided below. stakeholders also contended that this during the current hospital outpatient
Comment: Many commenters stated potential change to the laboratory DOS encounter or a future hospital outpatient
that the current laboratory DOS exception would be inconsistent with encounter. In turn, the hospital would
exception at § 414.510(b)(5) has longstanding policy related to services need to add this data element to the
improved beneficiary access to performed outside the hospital other data elements that it already must
precision testing like molecular outpatient setting. We discuss these convey to the performing laboratory (for
pathology testing and ADLTs and urged comments in more detail below. example, beneficiary demographic and
us not to make any changes that would Many stakeholders stated that insurance information) so that the
jeopardize beneficiary access to such requiring the ordering physician to performing laboratory can bill Medicare
testing. They asserted that this determine whether the test results are directly for the test.
exception to laboratory DOS policy has intended to guide treatment during a Additionally, many commenters
limited delays in ordering precision future hospital encounter is unworkable asserted that changing the test results
diagnostic tests for patients seeking care because it would be inconsistent with requirement may lead to delayed
beneficiary access to molecular laboratory DOS exception at part, because of stakeholder concerns
pathology testing and ADLTs. For § 414.510(b)(5)(iv) that we discussed in that the laboratory DOS policy in effect
instance, several commenters noted that the CY 2020 OPP/ASC proposed rule. prior to CY 2018 created beneficiary
the performing laboratory would be Based on the comments received on this access issues with regard to molecular
permitted to bill and be paid directly by potential revision, we agree that pathology tests and laboratory tests
Medicare only when the ordering requiring the ordering physician to expected to be designated by CMS as
physician determines that the test predict whether the results of the test ADLTs that meet the criteria of section
results do not guide treatment during will guide treatment during a future 1834A(d)(5)(A) of the Act. In the CY
any hospital outpatient encounter. They hospital outpatient encounter may be 2018 OPPS/ASC proposed rule (82 FR
noted that if the ordering physician overly burdensome and inconsistent 33653), we considered revising the DOS
cannot make a prediction about the with clinical practice. As noted by the rule to create an exception only for
future use of the test results, which as commenters, the results of the test are ADLTs that meet the criteria in section
discussed above, they believed is likely unknown at the time the test is ordered 1834A(d)(5)(A) of the Act because
to be the case, the default date of service and, therefore, the ordering physician ADLTs are offered and furnished only
would be the date of specimen cannot be expected to reasonably by a single laboratory (as defined in 42
collection and the hospital would be predict how he or she will use those test CFR 414.502). We noted that a hospital,
required to bill for the test. Therefore, results. In addition, we understand that or another laboratory that is not the
they suggested test orders would most the ordering physician typically will single laboratory (as defined in 42 CFR
likely be delayed until at least 14 days consult with other physicians and 414.502), cannot furnish the ADLT, and
following the patient’s discharge from practitioners of the patient’s care team, there may be additional beneficiary
the hospital outpatient department to as well as the patient, to determine the concerns for these ADLTs that may not
allow the performing laboratory to bill future treatment of a patient and/or the apply to the molecular pathology tests.
Medicare directly for the test. As a site of service for that treatment. As For example, a hospital may not have an
result, they contended that changing the such, we understand from commenters arrangement with the single laboratory
test results requirement would once that it would be difficult for the that furnishes a particular ADLT, which
again lead to the same beneficiary ordering physician alone to determine could lead the hospital to delay the
access issues that prompted us to whether the test results will or will not order for the ADLT until 14 days after
establish the laboratory DOS exception guide treatment during a future hospital the patient’s discharge to avoid financial
under § 414.510(b)(5) in the first place. outpatient encounter. We also agree that risk and thus potentially delay
Finally, a few commenters stated that changing the test results requirement at medically necessary care for the
the potential change to the test results § 414.510(b)(5)(iv) as discussed in the beneficiary. We solicited comments as
requirement would be inconsistent with CY 2020 OPPS/ASC proposed rule may to whether molecular pathology tests
longstanding policy related to services be administratively burdensome for the present the same concerns of delayed
performed outside the hospital ordering physician, hospital, and access to medically necessary care as
outpatient setting. For example, they performing laboratory and may lead to ADLTs, noting that molecular pathology
noted that in the final rule with beneficiary access concerns. As the tests are not required to be furnished by
comment period entitled, ‘‘Office of commenters pointed out, if the ordering a single laboratory and that there may be
Inspector General; Medicare Program; physician does not make a ‘‘kits’’ for certain molecular pathology
Prospective Payment System for determination as to whether the test tests that a hospital can purchase,
Hospital Outpatient Services, Final results guide treatment during the allowing the hospital to perform the
Rule’’ published in the Federal Register current hospital outpatient encounter or test. In the CY 2018 OPPS/ASC final
on April 7, 2000 (65 FR 18440 through a future hospital outpatient encounter, rule with comment period (82 FR
18441), the agency stated that ‘‘[a] free- the default laboratory DOS would be the 59399) we agreed with commenters that
standing entity, that is, one that is not date of specimen collection and the limiting the new laboratory DOS
provider-based, may bill for services hospital would be required to bill exception to include only ADLTs (and
furnished to beneficiaries who do not Medicare directly for the test. We agree not molecular pathology tests) would be
meet the definition of a hospital with commenters that these
inconsistent with the OPPS packaging
outpatient at the time the service is circumstances could once again lead to
policy and that relatively few
furnished’’. . . and that ‘‘[o]ur bundling delayed test ordering which may result
requirements apply to services laboratories may perform certain
in similar beneficiary access issues that
furnished to a ‘hospital outpatient,’ as molecular pathology testing. We also
existed prior to the implementation of
defined in § 410.2, during an acknowledged that hospitals may not
the laboratory DOS exception at
‘encounter,’ also defined in § 410.2.’’ As currently have the technical expertise or
§ 414.510(b(5). We also acknowledge the
such, they suggested the potential certification requirements necessary to
concerns about the potential change to
revision to the test results requirement perform molecular pathology testing
the test results requirement being
would not be consistent with this and therefore must rely on independent
inconsistent with longstanding CMS
longstanding policy position because it policy. For these reasons, after laboratories to perform the test.
could require the hospital to bill for considering the many concerns and Therefore, we concluded that similar
testing furnished days, and sometimes objections raised by commenters, we are beneficiary access concerns that apply
weeks, after the patient’s hospital not finalizing the change to the test to ADLTs may also apply to molecular
outpatient encounter. Therefore, they results requirement at pathology tests, and we decided not to
urged us not to finalize the change to § 414.510(b)(5)(iv). limit the exception at 42 CFR
the test results requirement discussed in 414.510(b)(5) to ADLTs only.
the CY 2020 OPP/ASC proposed rule. 2. Limiting the Laboratory DOS However, in the CY 2020 OPPS/ASC
Response: We appreciate the Exception at 42 CFR 414.510(b)(5) to proposed rule, we stated that after
stakeholder feedback regarding the ADLTs further review of this issue, we no
various problems that could arise if we As discussed previously in this longer believed the same beneficiary
were to finalize the potential revision to section, we established the laboratory access concerns that apply to ADLTs
the test results requirement under the DOS exception at § 414.510(b)(5), in also apply to molecular pathology tests.
In particular, unlike ADLTs, molecular CMS as an ADLT under paragraph (1) of to tests granted ADLT status under
pathology tests are not required by the definition of an ADLT in § 414.502. Criterion (A), the performing laboratory
statute to be furnished by a single Molecular pathology tests would be would not be permitted to bill Medicare
laboratory, so hospital laboratories and removed from the provisions of directly for any other molecular
independent laboratories are not § 414.510(b)(5). However, we noted that pathology testing performed on
prevented from performing molecular molecular pathology tests would still be specimens collected during a hospital
pathology testing. In addition, we stated subject to the laboratory DOS provisions outpatient encounter, including those
that we understood a number of kits of § 414.510(b)(2) and (3). sole source tests approved as an ADLT
have recently been developed and We requested comments on under Criterion (B), unless the test
approved by FDA that would allow a potentially limiting the laboratory DOS meets the 14-day rule requirements
hospital to more easily perform some of exception policy at § 414.510(b)(5) to under § 414.510(b)(2)(i). Therefore,
these molecular pathology tests. As laboratory tests that have been granted these commenters maintained that
such, we were no longer convinced that Criterion (A) ADLT status by CMS. We limiting the laboratory DOS policy
molecular pathology tests present the also noted that we would consider exception at § 414.510(b)(5) to ADLTs
same concerns of delayed access to finalizing this approach as a result of approved by CMS under Criterion (A)
medically necessary care as ADLTs, the public comments received. would once again lead to delayed test
which must be performed by a single A summary of the public comments orders and timely beneficiary access
laboratory. We noted that we believed a received on this potential revision and concerns.
hospital’s laboratory can develop the our response is provided below.
Comment: Many stakeholders Response: We appreciate stakeholder
expertise to perform a molecular feedback on the beneficiary access
pathology test or establish an objected to this potential change to the
laboratory DOS exception because concerns related to molecular pathology
arrangement with an independent testing that are not Criterion (A) ADLTs.
laboratory to perform the test. Therefore, molecular pathology tests continue to
have similar beneficiary access issues as As noted previously in this section of
we believed that any incentives that this final rule with comment period, we
may exist to delay ordering until at least ADLTs. For example, they asserted that
many molecular pathology tests that do considered limiting the laboratory DOS
14 days following a patient’s discharge exception at § 414.510(b)(5) to Criterion
from the hospital outpatient department not meet the clinical requirements of an
ADLT under Criterion (A), are (A) ADLTs based on our belief that the
do not apply to molecular pathology
performed by a single laboratory (or beneficiary access concerns were no
tests.
We also recognized in the CY 2020 very few laboratories) for specific longer the same for molecular pathology
OPPS/ASC proposed rule that limiting clinical indications and that very few testing, largely because they are not
the laboratory DOS exception to ADLTs ‘‘kits’’ have been approved by the FDA. statutorily required to be performed by
is not consistent with OPPS packaging They noted that the vast majority of a single laboratory and we believed
policy. As discussed previously in this molecular pathology tests are performed more kits are now available for hospitals
section of the final rule, we exclude all by the laboratories that developed and to perform these tests. In addition, we
molecular pathology laboratory tests validated them and therefore, hospitals noted this change could help address
from OPPS packaging because we rarely perform molecular pathology the billing and enrollment concerns
believe these tests may have a different tests. A few commenters explained that raised by the blood banks and centers
pattern of clinical use, which may make about 50 test kits are available for and administrative issues raised by
them generally less tied to a primary purchase, but that many of them are other stakeholders. However, after
service in the hospital outpatient setting redundant and test for the same analyte, reviewing the comments received on
than the more common and routine leaving no more than 15–20 unique kits this topic, we no longer believe that
laboratory tests that are packaged (80 FR available for molecular testing that limiting the laboratory DOS exception at
70348 through 70350). However, we might be used by a hospital laboratory. § 414.510(b)(5) to ADLTs would be
stated in the proposed rule that In addition, these commenters stated appropriate at this time. Commenters
consistency with the OPPS packaging that many hospitals would not have the have informed us that many molecular
policy only formed part of the basis for capability to perform such specialized pathology tests are performed by very
the laboratory DOS exception at testing and the cost of bringing this few laboratories (or even by a single
§ 414.510(b)(5). We noted that specialized testing capability in-house laboratory) and therefore, have similar
beneficiary access concerns were the may be prohibitive for many hospitals, beneficiary access concerns as ADLTs.
primary reason for establishing this particularly if the volume of testing is In addition, based on the comments
laboratory DOS exception and we no expected to be low, as would be the case received, we understand that very few
longer believed the access concerns are for smaller and rural hospitals. unique molecular pathology test kits are
sufficiently compelling for the Several stakeholders pointed out that available for hospitals to use for
molecular pathology tests. In light of the molecular pathology tests approved for molecular testing. We also acknowledge
billing and enrollment concerns raised ADLT status under Criterion (B), which the comments that molecular pathology
by the blood banks and blood centers requires FDA clearance or approval, are tests approved as ADLTs under
and administrative issues raised by also statutorily required to be performed Criterion (B) are also required by law to
other stakeholders, we expressed that by a single laboratory and therefore have be performed by a single laboratory, and
the policy reasons for removing these similar beneficiary access issues as therefore, have similar beneficiary
tests from the laboratory DOS exception Criterion (A) ADLTs. They contended access issues as tests granted ADLT
at § 414.510(b)(5) outweigh the that there is no reason why a sole-source status under Criterion (A). As discussed
difference it creates with the OPPS molecular pathology test that is FDA later in this section of this final rule
packaging policy. cleared or approved should be excluded with comment period, we are finalizing
Therefore, as discussed in the from the laboratory DOS exception, the exclusion of molecular pathology
proposed rule, we considered a while sole-source testing approved as an testing performed by blood banks or
potential revision that would limit the ADLT under Criterion (A) are included. centers from the laboratory DOS
laboratory DOS provisions of They noted that if the laboratory DOS exception at § 414.510(b)(5). As such,
§ 414.510(b)(5) to tests designated by exception at § 414.510(b)(5) was limited we are no longer considering limiting
the exception to ADLTs as a mechanism § 414.510(b)(5) to laboratory tests that tasked with providing compatible blood
for addressing the billing and have been granted Criterion (A) ADLT products and assessing risks of
enrollment concerns raised by the blood status by CMS. incompatibility for hospitals. In other
bank and center industry. In summary, Comment: A few commenters words, blood banks and centers perform
because of the concerns raised by supported the revision that would limit molecular pathology testing for patients
commenters, we are not finalizing this the laboratory DOS exception at to enable hospitals to prevent adverse
potential revision to limit the laboratory § 414.510(b)(5) to Criterion (A) ADLTs conditions associated with blood
DOS policy exception at § 414.510(b)(5) as discussed in the proposed rule. They transfusions, rather than perform
to laboratory tests that have been contended that removing molecular molecular pathology testing for
granted Criterion (A) ADLT status by pathology tests from the exception diagnostic purposes. We provided
CMS. would greatly reduce the administrative examples of molecular pathology testing
Comment: Several stakeholders burden associated with ensuring that performed by blood banks and centers,
contended that limiting the laboratory the appropriate entity bill Medicare including red blood cell phenotyping, as
DOS exception at § 414.510(b)(5) to directly and would therefore allow work described by HCPCS code 81403, red
Criterion (A) ADLTs would result in to be devoted to actual beneficiary care. blood cell antigen testing as described
additional administrative burden for Response: As discussed previously in by HCPCS code 0001U, and platelet
hospitals, laboratories and CMS. For this section, as a result of our review of antigen testing as described by HCPCS
example, they noted that because many public comments on this topic, we code 81105.
molecular pathology tests are sole- believe that limiting the laboratory DOS
As discussed previously, when a test
source tests, we would receive a large exception to ADLTs could lead to a
meets all of the conditions in the
number of requests for ADLT status delay in test ordering and therefore,
current laboratory DOS exception at
under Criterion (A) so that the result in similar beneficiary access
issues that prompted us to establish the § 414.510(b)(5), the DOS of the test must
performing laboratory may bill for the
laboratory DOS exception at be the date the test was performed, and
test directly when performed on a
§ 414.510(b)(5). For this and other the laboratory that performed the test
specimen collected during a hospital
reasons discussed previously, we are must bill Medicare directly for the test.
outpatient encounter. As a result, they
not finalizing this change. This would include circumstances
asserted that hospitals and laboratories
when a laboratory that is a blood bank
may be required to reverse their billing 3. Excluding Blood Banks and Blood or blood center performs the test.
policies multiple times over the course Centers From the Laboratory DOS
of a few years, or even a few months. However, given the different purpose of
Exception at 42 CFR 414.510(b)(5) molecular pathology testing performed
For example, if the laboratory DOS
exception at § 414.510(b)(5) were As we discussed in the CY 2020 by the blood banks and centers, that is,
limited to ADLTs, the performing OPPS/ASC proposed rule (84 FR 39603), blood compatibility testing, in the CY
laboratory would no longer be permitted following publication of the CY 2018 2020 OPPS/ASC proposed rule, we
to bill for molecular pathology tests that OPPS/ASC final rule with comment questioned whether the molecular
are not currently Criterion (A) ADLTs, period, stakeholders informed us that pathology testing performed by blood
and therefore, the hospital and blood banks and blood centers perform banks and centers is appropriately
laboratory would be required to reverse some of the molecular pathology test separable from the hospital stay, given
its current billing practices so that the codes that are subject to the laboratory that it typically informs the same
hospital bills Medicare directly for the DOS exception at § 414.510(b)(5). We patient’s treatment during a future
test, instead of the performing noted that, based on information from hospital stay. We stated that we were
laboratory. Stakeholders explained that stakeholders, it was our understanding concerned that our current policy may
for those molecular pathology tests that that blood banks and centers are entities unbundle molecular testing performed
eventually receive approval as a whose primary function is the by a blood bank or center for a hospital
Criterion (A) ADLT, the performing collection, storage and dissemination of patient. We stated in the CY 2020 OPPS/
laboratory and hospital would again be blood products and are typically ASC proposed rule that based on our
required to reverse their billing policies accredited by the AABB (formally concern and the comments we had
and perhaps reverse those billing known as the American Association of received from stakeholders, we were
policies another time if the molecular Blood Banks). We explained that considering a regulatory change that
pathology test ever loses its Criterion representatives of blood banks and would exclude blood banks and centers
(A) ADLT status. They contended that centers contend that while these entities from the laboratory DOS exception at
this potential fluctuation in billing may perform the same molecular § 414.510(b)(5). Under this potential
requirements would be administratively pathology tests that are performed and revision, the DOS for molecular
burdensome for hospitals and billed by other laboratories that are not pathology testing performed by blood
laboratories and urged us not to finalize blood banks and centers, the blood banks and centers on specimens
this change to the laboratory DOS banks and centers perform these tests collected from a hospital outpatient
policy. for different reasons. Specifically, they during a hospital outpatient encounter
Response: We agree that if we were to assert that the blood banks and centers would be the date of specimen
finalize this change, potential perform molecular pathology testing collection unless another exception to
fluctuation in billing may occur as a primarily to identify the most the DOS policy applies. As a result, the
result of molecular pathology testing compatible blood product for a patient, hospital would bill for the molecular
being granted Criterion (A) ADLT status whereas other laboratories typically pathology test under arrangements and
in the future, and this could result in provide molecular pathology testing for the blood bank or center performing the
additional burden on hospitals and diagnostic purposes. We stated that, test would seek payment from the
performing laboratories. As noted according to these stakeholders, the hospital. In addition, we noted that for
previously, because of the concerns patient has already been diagnosed with purposes of excluding blood banks and
raised by commenters, we are not a specific disease or condition before centers from the provisions of
finalizing the potential revision to limit the blood sample is provided to the § 414.510(b)(5), we would define a
the laboratory DOS policy exception at blood bank or center, which are then blood bank and center as an entity
whose primary function is the As such, stakeholders overwhelmingly performed by blood banks and blood
collection, storage and dissemination of supported the exclusion of blood banks centers, including molecular testing for
blood products. We stated that we and centers from the laboratory DOS red blood cells, white blood cells and
believed this potential definition of a exception at § 414.510(b)(5) so that the platelets, is excluded from the
blood bank and center describes the hospital is required to bill for molecular laboratory DOS exception at
primary responsibility of all blood pathology testing performed by blood § 414.510(b)(5). They noted that most
banks and centers, which distinguishes banks and centers. blood banks and centers do not
these entities from other laboratory In addition, a few commenters currently bill Medicare directly as
types. We further noted that in asserted that the potential definition of laboratories and lack the infrastructure,
developing a definition of blood banks a blood bank and center, as discussed in resources and expertise to engage in
and centers we were distinguishing the proposed rule, that is, ‘‘an entity direct billing. They also reiterated that
blood banks and blood centers from whose primary function is the requiring blood banks and centers to
non-blood bank and blood center collection, storage and dissemination of comply with the laboratory DOS
laboratories that perform the same blood products’’ omits ‘‘processing’’ and exception would create considerable
molecular pathology test codes but for ‘‘testing’’ which are two critical, unique administrative burden on the blood
different reasons, that is, for diagnostic functions performed by blood banks and bank and blood center industry. One
purposes rather than for blood centers. Therefore, they recommended stakeholder stated that requiring
compatibility testing. We requested revisions to the potential definition of hospitals to ‘‘tease out’’ different
comments from hospitals, blood banks blood bank and blood center so that it purposes for molecular pathology tests
and centers, and other interested clearly defines the role of blood banks performed by blood banks or centers
stakeholders regarding a potential and blood centers and better would add even more complexity to the
revision to laboratory DOS policy that distinguishes these entities from other laboratory DOS policy exception.
would exclude blood banks and centers types of laboratories. Specifically, these However, a few commenters that
from the laboratory DOS exception at commenters suggested that we define a supported excluding blood banks and
§ 414.510(b)(5). We also requested blood bank and center as ‘‘an entity centers from the laboratory DOS
specific comments as to how a blood whose primary function is the exception at § 414.510(b)(5) believe that
bank and blood center may be defined performance or responsibility for the only molecular pathology testing
in the context of this provision, and performance of, the collection, performed for blood compatibility
particularly how to distinguish blood processing, testing, storage and/or purposes should be excluded from the
banks and centers from other clinical distribution of blood or blood laboratory DOS exception; otherwise,
laboratories. We noted that we would components intended for transfusion blood banks or centers should be
consider finalizing a revision to the and transplantation.’’ They noted that required to bill Medicare directly.
laboratory DOS policy that excludes the suggested revisions are consistent Response: We clarify that this policy
blood banks and centers from the with the definition used by the AABB, change categorically excludes molecular
provisions of § 414.510(b)(5) as a result which accredits the activities conducted pathology testing performed by
of comments received on this topic. by blood centers and blood banks. laboratories that are blood banks or
A summary of the public comments Response: For the reasons discussed blood centers from the laboratory DOS
received on this potential revision and in the CY 2020 OPPS/ASC proposed exception at § 414.510(b)(5). Under our
our responses are provided below. rule, and based on the support received final policy, molecular pathology testing
Comment: Many stakeholders strongly from stakeholders, we are finalizing the performed by blood banks or centers on
supported the potential revision to revision to exclude blood banks and a specimen collected during a hospital
exclude blood banks and centers from centers from the laboratory DOS outpatient encounter is never subject to
the laboratory DOS exception at exception at § 414.510(b)(5). In addition, the laboratory DOS exception at
§ 414.510(b)(5) because this change we agree with commenters that their § 414.510(b)(5). We believe that the
would ensure beneficiary access to suggested revised definition of blood burden on hospitals will be mitigated
timely specialized molecular testing banks and centers clearly defines the with the policy we are finalizing.
performed by blood banks and centers. primary role of blood banks and centers Comment: One commenter contended
They concurred with our reasoning that and better distinguishes blood banks that excluding molecular pathology
blood banks and centers typically and centers from other types of testing from the laboratory DOS
perform molecular pathology testing to laboratories. To effectuate this policy exception at § 414.510(b)(5) would be
identify the most compatible blood change, we are revising § 414.510(b)(5) consistent with existing CMS policy.
product for the patient, which enables to exclude molecular pathology tests The commenter noted that the Medicare
hospitals to prevent adverse conditions when performed by a laboratory that is Claims Processing Manual, chapter 16,
associated with blood transfusions and a blood bank or center. We are defining section 100.2, already states that ‘‘codes
is inherently tied to a hospital service. the term ‘‘blood bank or center’’ instead for procedures, services, blood
They also noted that excluding blood of ‘‘blood bank and center’’ to reflect products[,] auto- transfusions . . . codes
banks and centers makes sense from a that a molecular pathology test is such as whole blood, various red blood
policy perspective because blood banks excluded when performed by either a cell products, platelets, plasma, and
and centers are typically not Medicare blood bank or blood center. We are also cryoprecipitate,’’ along with ‘‘[o]ther
enrolled entities, and therefore cannot defining ‘‘blood bank or center’’ at codes for tests primarily associated with
bill Medicare directly. Therefore, the § 414.502 as an entity whose primary the provision of blood products’’ are
commenters stated that requiring blood function is the performance or ‘‘not clinical laboratory tests and are
banks and centers to comply with the responsibility for the performance of, therefore never subject to [clinical
laboratory DOS exception at the collection, processing, testing, laboratory] fee schedule limitations.’’
§ 414.510(b)(5) would create storage and/or distribution of blood or The commenter noted that this is
considerable burden and has the blood components intended for because ‘‘[s]uch tests identify various
potential to cause delays in testing for transfusion and transplantation. characteristics of blood products, but
blood compatibility and jeopardize Comment: A few commenters urged are not diagnostic in nature.’’ The
Medicare beneficiaries’ access to care. us to clarify that all molecular testing commenter suggested that this Manual
guidance already excludes molecular pathology test or ADLT would be January 1, 2018, so that hospitals and
pathology tests performed by blood permitted. That is, under no performing laboratories can proceed
banks and centers from the laboratory circumstances would both the hospital with implementing this change.
DOS policy exception at § 414.510(b)(5), and performing laboratory be permitted Response: We appreciate the
because paragraph (b)(5), like the rest of to bill for the same test for the same commenter’s feedback on this topic.
§ 414.510, applies to the date of service beneficiary with the same date of However, we wish to clarify that we
for ‘‘a clinical laboratory test.’’ However, service. The same commenter suggested have implemented the laboratory DOS
the commenter stated that it would be another alternative policy approach that exception at § 414.510(b)(5). The
appropriate to clarify that molecular would involve amending the referring laboratory DOS exception at
pathology testing performed by blood laboratory billing for referred laboratory § 414.510(b)(5) is currently in effect;
banks and centers must be billed by the testing provision. The commenter stated however, we have announced that we
hospital. that when a test does not guide will exercise enforcement discretion,
Response: The Medicare Claims treatment during a hospital outpatient which has allowed hospitals to continue
Processing Manual, chapter 16, section encounter, the hospital laboratory is to bill for tests that would otherwise be
100.2, describes laboratory test codes acting as a referring laboratory in subject to the exception. As discussed
that are never subject to the CLFS accordance with section 1833(h)(5)(A) previously in this final rule with
because they are not clinical laboratory of the Act. Under this statutory comment period, we heard from
tests. They include test codes for provision, a referring laboratory may bill stakeholders that many hospitals and
procedures, services, blood products for a referred laboratory test subject to laboratories were experiencing
and auto-transfusions, and other test certain conditions. The commenter administrative difficulties implementing
codes primarily associated with the asserted that it would be reasonable for the laboratory DOS exception at
provision of blood products. However, CMS to amend its current policy, which § 414.510(b)(5). Therefore, we issued
as discussed previously in this section, only permits independent clinical consecutive enforcement discretions to
blood banks and centers also perform laboratories to bill claims for referred allow more time for hospitals and
some of the same molecular pathology laboratory services, to also include the laboratories to make the necessary
test codes that are performed and billed hospital laboratory when the systems changes to enable the
by other laboratories that are not blood requirements of the laboratory DOS performing laboratory to bill Medicare
banks or centers, and these molecular policy exception at § 414.510(b)(5) are directly.
pathology test codes are subject to the met. Comment: One commenter requested
laboratory DOS exception at The commenter asserted that these that we apply the same laboratory DOS
§ 414.510(b)(5). These molecular alternative policies would serve as a exception for ADLTs and molecular
pathology test codes are not addressed permanent solution that would address pathology laboratory tests in the
in the manual guidance discussed by the many operational difficulties hospital outpatient setting to tests
the commenter. Since blood banks and experienced by some hospitals and ordered for hospital inpatients. The
centers perform some of the same performing laboratories with respect to commenter stressed the importance of
molecular pathology test codes as other the DOS policy. The commenter urged having consistent policies across all care
laboratories that are not blood banks or us to finalize these suggested policy settings and asserted that allowing the
centers, we believe that a regulatory approaches effective January 1, 2020. Or same laboratory DOS exception to apply
revision is necessary to exclude these in the alternative, the commenter in the inpatient setting would improve
entities from the laboratory DOS requested that we extend the current CMS’ ability to track the provision of
exception at § 414.510(b)(5). enforcement discretion through CY molecular pathology tests and ADLTs
2020. The commenter contended that using HCPCS codes, which would be
4. Additional Comments useful for analyzing how specific tests
the additional time of enforcement
Comment: One commenter submitted discretion would allow us to address contribute to episode cost, outcomes,
two alternative policy proposals. The this issue in the CY 2021 OPPS/ASC and survival rates.
first alternative policy proposal involves proposed rule so that we could solicit Response: As discussed in the CY
allowing hospitals the flexibility to stakeholder input on another solution. 2018 OPPS/ASC final rule (82 FR
negotiate with independent laboratories Response: We are not adopting these 59398) we believe that a similar
to determine which entity is responsible suggestions for CY 2020. However, we laboratory DOS exception for ADLTs
for billing Medicare for tests that are will consider the commenter’s approved under Criterion (A) and
subject to the laboratory DOS exception suggestions as we continue to review, molecular pathology tests performed on
at § 414.510(b)(5). Under this approach, evaluate and refine the laboratory DOS specimens collected from hospital
the laboratory DOS exception at exception at § 414.510(b)(5). inpatients would have broader policy
§ 414.510(b)(5) would only apply if the Comment: Two commenters implications for the IPPS that need to be
hospital and the performing laboratory recommended us to articulate a final carefully considered. We also note that
have not agreed that the hospital will implementation date for the laboratory we did not discuss revising the
bill for the test. For instance, the DOS policy exception at § 414.510(b)(5). laboratory DOS policy for the inpatient
hospital and laboratory would affirm They explained that some hospitals setting or to improve CMS’ ability to
their agreement that the hospital will have incurred significant cost to evaluate patient outcomes in the CY
always bill for a molecular pathology implement this change, however, due to 2020 OPPS/ASC proposed rule.
test or ADLT performed on a specimen CMS’s announcements of enforcement However, we intend to continue
collected during a hospital outpatient discretion, some performing laboratories studying the laboratory DOS exception
encounter. If the hospital and a specific have refused to implement the change, and, if warranted, consider changes to
performing laboratory do not agree to which has forced hospitals to have the laboratory DOS policy for laboratory
this condition, the DOS would be the different billing practices depending on tests performed on specimens collected
date of test performance and the the performing laboratory. They during an inpatient hospital stay in
performing laboratory would bill requested that CMS implement the future rulemaking.
Medicare directly for the test. However, revised laboratory DOS policy exception Comment: Several stakeholders
only one bill for the molecular at § 414.510(b)(5), which was effective requested that we add the technical
component of physician pathology significant increases in the utilization these figures, we found higher than
services, such as in situ hybridization volume of some covered OPD services. expected volume increases for several
(ISH), and flow cytometry, to the list of In conducting the analysis, we targeted services. Many of these services fell
test codes subject to the laboratory DOS services that represent procedures that within the following five general
exception at § 414.510(b)(5) because, are likely to be cosmetic surgical categories of services: (1)
like molecular pathology tests and procedures and/or are directly related to Blepharoplasty; (2) botulinum toxin
ADLTs, timely access to these services cosmetic surgical procedures that are injections; (3) panniculectomy; (4)
are essential to determine the best not covered by Medicare, but may be rhinoplasty; and (5) vein ablation.
course of clinical care. They also combined with or masquerading as As discussed in the CY 2019 OPPS/
requested that molecular tests furnished therapeutic services.168 We also ASC final rule with comment period (83
as technical components of physician recognized the need to establish FR 59004 through 59015), and
pathology services be excluded from baseline measures for comparison addressed again in section X.D. of the
OPPS packaging policy and paid at the purposes, including, but not limited to, CY 2020 OPPS/ASC proposed rule, we
Medicare physician fee schedule rate. the yearly rate-of-increase in the number have developed many payment policies
Response: We will consider the of OPD claims submitted and the with the goal in mind of managing the
suggestions raised by commenters as we average annual rate-of-increase in growth in Medicare spending for OPD
continue to review, evaluate and refine Medicare allowed amounts. Our services, and most recently, to control
OPPS packaging policy and the analysis included the review of over 1.1 unnecessary increases in the volume of
laboratory DOS policy exception at billion claims related to OPD services OPD services using our authority under
§ 414.510(b)(5). during the 11-year period from 2007 section 1833(t)(2)(F) of the Act. Section
Comment: A few commenters through 2017 169 and detailed that the 1833(t)(2)(F) of the Act authorizes CMS
requested that CMS clarify that the date overall rate of OPD claims submitted for to develop a method for controlling
of performance is the date of a payment to the Medicare program unnecessary increases in the volume of
laboratory’s final report. They suggested increased each year by an average rate covered OPD services. We believe the
this clarification would avoid any of 3.2 percent. This equated to an increases in volume associated with
ambiguity regarding the date of increase from approximately 90 million certain covered OPD services described
performance of the test. OPD claims submitted for payment in earlier in this section are unnecessary
Response: We appreciate the 2007 to approximately 118 million because the data show that the volume
commenters’ suggestion. However, as claims submitted for payment in 2017. of utilization of these services far
discussed in the CY 2018 OPPS/ASC Our analysis also showed an average exceeds what would be expected in
final rule (82 FR 59398 through 59399) annual rate-of-increase in the Medicare light of the average rate-of-increase in
we continue to have concerns with this allowed amount (the amount that the number of Medicare beneficiaries;
approach because we believe there is no Medicare would pay for services these procedures are often considered
clear and consistent definition of ‘‘final regardless of external variables, such as cosmetic and, in those instances, would
report’’ that applies to all laboratories beneficiary plan differences, not be covered by Medicare; and we are
and all types of specimens collected; deductibles, and appeals) of 8.2 percent. unaware of other factors that might
that is, liquid-based, cellular, or tissue We found that the total Medicare contribute to clinically valid increases
samples. Therefore, we are not making allowed amount for the OPD services in volume. Therefore, these above-
this clarification. claims processed in 2007 was average increases in volume suggest an
approximately $31 billion and increased increase in unnecessary utilization. As
XIX. Prior Authorization Process and to $65 billion in 2017, while during this discussed in detail below, we proposed
Requirements for Certain Hospital same 11-year period, the average annual to use the authority under section
Outpatient Department (OPD) Services increase in the number of Medicare 1833(t)(2)(F) of the Act to require prior
A. Background beneficiaries per year was only 1.1 authorization for certain covered OPD
percent. The 8.2 percent increase services as a condition of Medicare
As part of our responsibility to protect exceeded the average annual increase of payment.
the Medicare Trust Funds, we routinely 5.8 percent per year in overall health
analyze data associated with all facets of B. Prior Authorization Process for
care spending during that same time Certain OPD Services
the Medicare program. This period (2007–2017), according to the
responsibility includes monitoring the analysis of the U.S. Bureau of Labor and We believe a prior authorization
total amount or types of claims Statistics Consumer Price Index for process for certain OPD services would
submitted by providers and suppliers; medical care.170 ensure that Medicare beneficiaries
analyzing the claims data to assess the Upon reviewing specific OPD continue to receive medically necessary
growth in the number of claims categories of services in comparison to care while protecting the Medicare
submitted over time (for example, Trust Funds from improper payments,
monthly and annually, among other 168 Medicare Benefit Policy Manual. Internet and at the same time keeping the
intervals); and conducting comparisons Only. Publication 100–02, Chapter 16, § 120. medical necessity documentation
169 The data reviewed are maintained in the CMS
of the data with other relevant data, requirements unchanged for providers.
Integrated Data Repository (IDR). The IDR is a high-
such as the total number of Medicare volume data warehouse integrating Medicare Parts
We believe prior authorization for these
beneficiaries served by providers to help A, B, C, and D, and DME claims, beneficiary and services will be an effective method for
ensure the continued appropriateness of provider data sources, along with ancillary data controlling increases in the volume of
payment for services furnished in the such as contract information and risk scores. these services because we expect that it
Additional information is available at: https://
hospital outpatient department (OPD). www.cms.gov/Research-Statistics-Data-and-
will reduce the instances in which
In line with this responsibility, we Systems/Computer-Data-and-Systems/IDR/ Medicare pays for these services when
noted in the CY 2020 OPPS/ASC index.html. they are merely cosmetic and not
170 The 5.8 percent average increase per year in
proposed rule that we recently medically necessary. As a method for
overall health care spending was arrived at using
completed an analysis of the volume of data publicly available on the Bureau of Labor and
controlling unnecessary increases in the
covered OPD services provided and Statistics web page, located at: https://www.bls.gov/ volume of certain covered OPD services,
determined that CMS has experienced cpi/factsheets/medical-care.htm. we proposed to use our authority under
section 1833(t)(2)(F) of the Act to 1. Basis, Scope, and Definitions for services, and/or facility services.
establish a process through which Proposed New Subpart I Under Part 419 Moreover, we proposed that even when
providers would submit a prior We proposed to specify the basis and a provisional affirmation has been
authorization request for a provisional scope of the proposed subpart under received, a claim for services may be
affirmation of coverage before a covered proposed new § 419.80, using section denied based on either technical
OPD service is furnished to the 1833(t)(2)(F) of the Act as our authority requirements that can only be evaluated
beneficiary and before the claim is to establish the prior authorization after the claim has been submitted for
submitted for processing. We proposed process and requirements. formal processing or information not
to establish a new subpart I under 42 We proposed to define key terms available at the time the prior
CFR part 419 to codify the conditions associated with the proposed prior authorization request is received
and requirements for the proposed prior authorization process for certain (proposed new § 419.82(b)(2)(i) and (ii)).
authorization for certain covered OPD covered OPD services under proposed We proposed that a provider must
services to help control unnecessary new § 419.81. We proposed to define submit a prior authorization request for
increases in the volume of covered OPD ‘‘prior authorization’’ to mean a process any service on the list of outpatient
services. This subpart would establish through which a request for provisional department services requiring prior
the conditions of payment for OPD affirmation of coverage is submitted to authorization that would be published
services that require prior authorization; CMS or its contractors for review before by CMS (proposed new § 419.82(c)). As
establish the submission requirements the service is provided to the noted earlier, we proposed that, in
for prior authorization requests, beneficiary and before the claim is submitting a prior authorization request,
including methods for expedited review submitted. We proposed to define the provider must include all relevant
of prior authorization requests; and ‘‘provisional affirmation’’ to mean a documentation necessary to show that
provide for suspension of the prior preliminary finding that a future claim the service meets applicable Medicare
authorization process generally, or for for the service will meet Medicare’s coverage, coding, and payment rules
particular services. In order to allow coverage, coding, and payment rules. As and that the request be submitted before
time for providers to better understand previously mentioned, we patterned the service is provided to the
this proposed prior authorization these proposed definitions after the beneficiary and before the claim is
process, for CMS to ensure sufficient prior authorization process for certain submitted (proposed new
time is allowed for outreach and DMEPOS under 42 CFR 414.234. Lastly, § 419.82(c)(1)(i) and (ii)). We also
education to affected stakeholders, and we proposed to define the ‘‘list of proposed that providers have an
for contractor operational updates to be hospital outpatient department services opportunity to submit prior
in place, we proposed that this requiring prior authorization’’ as the list authorization requests for expedited
requirement would begin for dates of of outpatient department services CMS review when a delay could seriously
service on or after July 1, 2020. We note publishes in accordance with proposed jeopardize the beneficiary’s life, health,
that we proposed to pattern some of the new § 419.83(a) that require prior or ability to regain maximum function
provisions for prior authorization for authorization as a condition of payment. (proposed new § 419.82(c)(2).
covered OPD services after the prior Documentation that the beneficiary’s
authorization program that we have 2. Prior Authorization as a Method for life, health, or ability to regain
already established for certain durable Controlling Unnecessary Increases in maximum function is in serious
medical equipment, prosthetics, the Volume of Covered Outpatient jeopardy must be submitted with this
orthotics, and supplies (DMEPOS) Services (Proposed New § 419.82) request.
under 42 CFR 414.234. In proposed new § 419.82(a), we We proposed that CMS or its
As we noted, CMS routinely analyzes proposed that, as a condition of contractor will review a prior
data as part of its oversight of the Medicare payment, a provider must authorization request for compliance
Medicare program, and our analysis was submit a prior authorization request for with applicable Medicare coverage,
used as a basis for the CY 2020 OPPS/ services on the list of hospital coding, and payment rules (proposed
ASC proposed rule. Moreover, the outpatient department services new § 419.82(d)). If the request meets
Medicare program is continuing to requiring prior authorization to CMS the applicable Medicare coverage,
incorporate advancements in health that meets the requirements of the coding, and payment rules, CMS or its
information technology (health IT) into proposed new § 419.82(c); namely, that contractor would issue a provisional
its program operations. This includes the prior authorization request includes affirmation to the requesting provider
improvements in interoperability, the all documentation necessary to show (proposed new § 419.82(d)(1)(i)). If the
secure electronic transmission of that the service meets applicable request does not meet the applicable
clinical data, and the potential Medicare coverage, coding, and Medicare coverage, coding, and
incorporation of artificial intelligence payment rules, and that the request be payment rules, CMS or its contractor
into the claims review process. As these submitted before the service is provided would issue a non-affirmation decision
advancements in health IT continue, we to the beneficiary and before the claim to the requesting provider (proposed
are committed to ensuring that these is submitted. We proposed that claims new § 419.82(d)(1)(ii)). In proposed new
efficiencies and enhancements will be submitted for services that require prior § 419.82(d)(iii), we proposed that CMS
considered, whenever possible, to authorization that have not received a or its contractor would issue a decision
reduce the burden placed on providers. provisional affirmation of coverage from (affirmative or non-affirmative) within
As stated earlier, we proposed to CMS or its contractors would be denied, 10 business days.
establish a new subpart I under part 419 unless the provider is exempt under We proposed that, if the provider
(containing §§ 419.80 through 419.89 § 419.83(c) (proposed new in receives a non-affirmation decision, we
(§§ 419.84 through 419.89 would be § 419.82(b)(1)). This would include the would allow the provider to resubmit a
reserved)) to codify the following denial of any claims associated with the prior authorization request with any
proposed policies for prior denial of a service listed in proposed applicable additional relevant
authorization for certain covered OPD § 419.83(a)(1), including services such documentation. This would include the
services. as anesthesiology services, physician resubmission of requests for expedited
reviews (proposed new § 419.82(e)(1) provider who billed the associated withdrawing the exemption. We
and (2)). claims before making such a denial. We anticipate that withdrawing the
We proposed that CMS or its requested public comments on whether exemption may also take approximately
contractor would initiate an expedited the requirement in proposed new 90 calendar days to effectuate.
review of a prior authorization request § 419.82(b)(3) should remain in 42 CFR Moreover, we proposed that CMS may
when requested by a provider and part 419 or be co-located with the suspend the outpatient department
where CMS or its contractor determines regulatory provisions governing initial services prior authorization process
that a delay could seriously jeopardize determinations located in 42 CFR part requirements generally or for a
the beneficiary’s life, health or ability to 405. particular service(s) at any time by
regain maximum function (proposed issuing notification on CMS’ web page
new § 419.82(d)(2)). Upon making this 3. Proposed List of Outpatient (proposed new § 419.83(d)). While we
determination, we proposed that CMS Department Services That Would believe this is unlikely to occur, we
or its contractor would issue a Require Prior Authorization (Proposed nonetheless believe it is necessary for us
provisional affirmation or non- New § 419.83) to retain flexibility in the event of
affirmation in accordance with We proposed that the list of covered certain circumstances, such as where
proposed new § 419.82(d)(1) using an OPD services that would require prior the cost of the prior authorization
expedited timeframe of two business authorization are those identified by the program exceeds the savings it
days. CPT codes in Table 38. For ease of generates.
As part of the requirements for the review, we are only including the five
DMEPOS prior authorization process,171 categories of services within which C. List of Outpatient Department
under 42 CFR 405.926(t), we specified these CPT codes fall in proposed new Services Requiring Prior Authorization
that a prior authorization request that is § 419.83(a)(1). The five categories of As mentioned earlier, we have
non-affirmed is not an initial services would be: Blepharoplasty; identified a list of specific services
determination on a claim for payment botulinum toxin injections; (Table 38) that, based on review and
for services provided and, therefore, panniculectomy; rhinoplasty; and vein analysis of claims data for the 11-year
would not be appealable. We proposed ablation. In proposed new period from 2007 through 2017, show
to apply this same provision to the OPD § 419.83(a)(2), we proposed that higher than expected, and therefore, we
services prior authorization process. technical updates, such as corrections or believe, unnecessary increases in the
Therefore, we proposed to revise conforming changes to the names of the volume of service utilization. These
§ 405.926(t) so that OPD prior services or CPT codes, may be made on services fall within the following five
authorization requests that are the CMS web page. categories: Blepharoplasty; botulinum
determined non-affirmed also would not Also, we proposed that CMS may toxin injections; panniculectomy;
be considered an initial determination elect to exempt a provider from the rhinoplasty; and vein ablation. In
and, therefore, would not be appealable. prior authorization process in proposed making the decision to propose to
However, the provider will still have the new § 419.82 upon a provider’s include the specific services in the
opportunity to resubmit a prior demonstration of compliance with proposed list of hospital outpatient
authorization request under proposed Medicare coverage, coding, and department services requiring prior
new § 419.82(e) provided the claim has payment rules and that this exemption authorization as shown in Table 38, we
not yet been submitted and denied. would remain in effect until CMS elects first considered that these services are
If a claim is submitted for the services to withdraw the exemption (proposed most often considered cosmetic and,
listed in proposed new § 419.83(a)(1) new § 419.83(c)). We would exempt therefore, are only covered by Medicare
without a provisional affirmation, it will providers that achieve a prior in very rare circumstances. We then
be denied. The claim denial is an initial authorization provisional affirmation viewed the current volume of utilization
determination and a redetermination threshold of at least 90 percent during of these services and determined that
request may be submitted in accordance a semiannual assessment. We anticipate the utilization far exceeds what would
with 42 CFR 405.940. Consistent with that an exemption will take be expected in light of the average rate-
current medical review and claims approximately 90 calendar days to of-increase in the number of Medicare
processing guidance, we also proposed effectuate. We believe that, by achieving beneficiaries. In the CY 2020 OPPS/ASC
in proposed new § 419.82(b)(3) that any this percentage of provisional proposed rule, we noted that we are
claims associated with or related to a affirmations, the provider would be unaware of other factors that might
service listed in proposed new demonstrating an understanding of the contribute to increases in volume of
§ 419.83(a)(1) for which a claim denial requirements for submitting accurate services that indicate that the services
is issued will be denied as well since claims. We do not believe it is necessary are increasingly medically necessary,
these services would be unnecessary if for a provider to achieve 100 percent such as clinical advancements or
the service listed in proposed new compliance to qualify for an exemption expanded coverage criteria that would
§ 419.83(a)((1) had not been provided. because innocent and sporadic errors have led to the increases. Below we
These associated services include, but could occur that are not deliberate or describe what we believe are the
are not limited to, services such as systematic attempts to submit claims unnecessary increases in volume of each
anesthesiology services, physician that are not payable. In addition, we of the categories of services for which
services, and/or facility services. The propose that we might withdraw an we proposed to require prior
associated claims would be denied exemption if evidence becomes authorization:
whether a non-affirmation was received available based on a review of claims • Botulinum Toxin Injections: In
for a service listed in proposed new that the provider has begun to submit reviewing CMS data available through
§ 419.83(a)(1) or the provider did not claims that are not payable based on the Integrated Data Repository (IDR), we
request a prior authorization request. A Medicare’s billing, coding, or payment determined that destruction of nerves to
contractor is not required to request requirements. If the rate of nonpayable muscles of the face via botulinum toxin
medical documentation from the claims submitted becomes higher than injections had an overall average annual
10 percent during a semiannual increase in the number of unique claims
171 80 FR 81674 (December 30, 2015). assessment, we will consider of approximately 19.3 percent from
2007 through 2017, with an average increase in the Medicare beneficiaries This represents a 64.1 percent increase
annual increase in financial expense to who received outpatient services over in comparison to the 1.1 percent rate of
the Medicare program as a result of that 11-year period). Additionally, some increase for unique patients for all OPPS
allowed amounts in service costs and panniculectomy services were reported services for that same time period. Even
payments of approximately 27.8 percent on claims by providers in combination though this category of services includes
and an average annual increase in the with procedures performed on the some procedures that had annual
number of unique patients of patient’s chest region, in addition to increases in service utilization volume
approximately 17.9 percent. Based on abdominal procedures. far exceeding what we would expect
analysis and comparisons of claims • Vein Ablation: In reviewing the based on the typical rate, this was not
data, these increases in service available data from the IDR, vein true for all services within the category.
utilization volume, financial expense, ablation had an average annual increase One example that did exceed the
and the number of Medicare patients far in the number of unique claims of expected rate was the number of unique
exceed the typical baseline rates or approximately 11.1 percent from 2007 claims for the procedure of widening of
trends we identified. through 2017, with an average annual the nasal passage. This rate increased
• Panniculectomy: Our analysis of increase in financial expense to the significantly more than the expected
IDR data showed that panniculectomy Medicare program as a result of allowed rate and was as much as 34.8 percent
had an average annual increase in the amounts in service costs and payments from 2016 through 2017.
number of unique claims of of approximately 11.5 percent and an • Blepharoplasty: In reviewing the
approximately 9.2 percent from 2007 average annual increase in the number IDR data, blepharoplasty, like
through 2017, with an average annual of unique patients of approximately 9.5 rhinoplasty, had overall statistics that
increase in financial expense to the percent. Based on analysis and were similar to the rate increases
Medicare program as a result of allowed comparisons of claims data, these expected for outpatient services.
amounts in service costs and payments increases in service utilization volume, However, some procedures had annual
of approximately 13.9 percent and an financial expense to the Medicare increases in service utilization volume
average annual increase in the number program, and the number of Medicare that far exceeded these expected rates.
of unique patients of approximately 9.2 patients also far exceed the typical As an example, the number of unique
percent. Based on analysis and baseline rates or trends we identified claims for the procedure of repairing of
comparisons of claims data, these (that is, the 9.5 percent average annual the upper eyelid muscle to correct
increases in service utilization volume, increase in the rate of Medicare drooping or paralysis increased as high
financial expense to the Medicare beneficiaries receiving vein ablation is as 48.9 percent from 2011 through 2012,
program, and the number of Medicare significantly higher than the 1.1 percent which far exceeds the rate we would
patients also far exceed the typical average annual increase in the Medicare expect for such a service.
baseline rates or trends we identified beneficiaries who received outpatient Table 38 lists the specific procedures
(that is, the 9.2 percent average annual services over that 11-year period). within the five categories of services
increase in the rate of Medicare • Rhinoplasty: In reviewing available that we proposed for the proposed list
beneficiaries receiving a IDR data, rhinoplasty had an average of hospital outpatient department
panniculectomy is significantly higher annual increase in the number of unique services requiring prior authorization.
than the 1.1 percent average annual patients of approximately 1.9 percent. BILLING CODE 4120–01–P
ER12NO19.106</GPH>
BILLING CODE 4120–01–C Grandfathered Children’s Hospitals- authorization, with some adding they
4. Summary of the Public Comments Within-Hospitals’’ (84 FR 39398 through were ‘‘intrigued’’ by the promise prior
and Responses to Comments on the 39644), hereinafter referred to as the authorization has in Fee-For-Service
Proposed Rule ‘‘CY 2020 OPPS/ASC proposed rule,’’ Medicare. Others commented that CMS
was published in the Federal Register is underestimating the amount of time
The proposed rule, titled ‘‘Medicare on August 6, 2019, with a comment and education providers will require in
Program; Proposed Changes to Hospital period that ended on September 27, learning the new process. Some
Outpatient Prospective Payment and 2019. In that rule, for prior commenters suggested that CMS delay
Ambulatory Surgical Center Payment authorization, we received 96 public implementation of prior authorization
Systems and Quality Reporting comments on our proposals, including beyond July 1, 2020, while others
Programs; Price Transparency of comments from healthcare providers, suggested that CMS proceed cautiously
Hospital Standard Charges; Proposed professional and trade organizations, and roll out prior authorization on a
Revisions of Organ Procurement drug manufacturers, beneficiary limited basis and then scale nationally,
Organizations Conditions of Coverage; advocacy organizations, and health care similar to how the DMEPOS prior
Proposed Prior Authorization Process systems. The following is a summary of authorization process was implemented.
and Requirements for Certain Covered the comments we received and our Response: We thank the commenters
Outpatient Department Services; responses. for their comments. We appreciate the
Potential Changes to the Laboratory Date Comment: We received several positive responses to our proposed prior
ER12NO19.107</GPH>
of Service Policy; Proposed Changes to comments in support of prior authorization process. In assessing the
operational implementation schedule discretion to determine the appropriate that CMS should adopt regulations
for prior authorization, we believe that methods to control unnecessary under the Physician Fee Schedule to
the July 1, 2020 implementation date is increases in the volume of covered OPD require physicians to adhere to the
reasonable and will allow enough time services. We believe that where, as here, documentation and related
to educate and prepare stakeholders to we have determined that there have requirements for prior authorization.
be able to submit the necessary been unnecessary increases in services Response: This prior authorization
documentation for prior authorization that are often cosmetic, section process is being adopted under section
for these services. No new 1833(t)(2)(F) of the Act gives us 1833(t)(2)(F) of the Act, which is
documentation requirements are created authority to utilize prior authorization specific to the OPPS, which provides
as a result of this process. Instead, as a method to control those payment only to hospital outpatient
currently needed documents are unnecessary increases. We carefully departments. As such, we cannot extend
submitted earlier in the process. considered all available options in the process to ASCs or other healthcare
Comment: Some commenters choosing to propose the prior provider types, including physicians
questioned whether section 1833(t)(2)(F) authorization process, which has outside of the outpatient department
of the Act grants CMS the authority to already been shown to be an effective setting, because these entities are paid
establish a prior authorization process tool in Fee-for-Service Medicare, and under other payment systems. We thank
and noted that when Congress intended which we believe will be effective at the commenters for noting the potential
to give CMS authority to implement a controlling unnecessary increases for to shift these services to ASCs and will
prior authorization process, it has done those procedures that are often cosmetic monitor these data and may consider
so explicitly. Still others suggested the and for which we have identified additional program integrity oversight if
development of the new process is unnecessary volume increases. We also such shifts are realized.
‘‘arbitrary and capricious’’ because the believe that the description of our Comment: Several commenters
commenters believed that CMS has not extensive data analysis in the CY 2020 suggested that prior authorization is not
demonstrated that increases in the OPPS/ASC proposed rule, comparing an effective method for controlling fraud
volume of services for which we trends for the procedures discussed and that other tools, such as CMS’
proposed to require prior authorization against 1.1 billion OPD claims over 11 development of National Coverage
are unnecessary. Several commenters years, demonstrated that there have Decisions (NCDs) and Local Coverage
quoted a recent decision from the been unnecessary increases for all Determinations (LCDs), prepayment and
United States District Court for the services for which we proposed to post-payment reviews, provider
District of Columbia,172 in which the require prior authorization and that outreach and education, and law
court invalidated the policy we adopted there have not been other, legitimate enforcement actions are more effective
in the CY 2019 OPPS/ASC final rule reasons for the sustained increases. methods to control unnecessary
with comment period to reduce We also disagree with the commenters increases in volume. In fact, some
payment for clinic visits furnished in who believe the District Court’s decision commenters suggested that we place
excepted off-campus provider-based in the clinic visit litigation decision providers on 100 percent pre-payment
departments to a Physician Fee forecloses our ability to adopt a method review in lieu of establishing the new
Schedule-equivalent amount as a to control unnecessary increases in the prior authorization process. Others
method to control unnecessary increases volume of covered outpatient commented that prior authorization is
in the volume of clinic visits furnished department services under section nothing more than a ‘‘blunt
in these settings. In its decision the 1833(t)(2)(F) of the Act without tying instrument;’’ is contrary to some LCDs
court stated with respect to this policy, that method to another provision of the which clearly convey certain services
which we also adopted under section OPPS statute. Rather, we believe that, are not covered; and that CMS needs to
1833(t)(2)(F) of the Act, that ‘‘Congress unlike the clinic visit policy at issue in ensure coverage criteria are more easily
did not intend CMS to use an that decision, the prior authorization identifiable and searchable so that
untethered ‘method’ to directly alter policy does not have an immediate hospitals can more readily comply with
expenditures independent of other impact on the amount of payment or the the requirements. One commenter
processes.’’ These commenters quoted budget neutrality calculations for the questioned how to give input on
the court as going on to state that, ‘‘. . . OPPS, and therefore, we believe it is establishing medical necessity and how
Congress directed any ‘methods’ distinguishable from the clinic visit medical necessity criteria will be set
developed under paragraph (t)(2)(F) be policy that the court invalidated and and another commenter specifically
implemented through other provisions does not need to be adopted under lauded CMS’ not-yet-completed
of the statute.’’ The commenters separate authority in addition to section development of the documentation
contended that we cannot point to any 1833(t)(2)(F) of the Act. requirements look-up service (DRLS).
other provision of the OPPS statute that Comment: Several commenters Response: We note that we have a
would authorize a prior authorization questioned why ambulatory surgical variety of tools that can be used in
requirement, which the commenters centers (ASCs) and other provider types making reasonable and necessary
believed we must do following the are exempt from this prior authorization determinations for several procedures
court’s decision. Still others compared process. The commenters believed the on the list of outpatient department
CMS’ attempts to establish a prior prior authorization process should not services requiring prior authorization.
authorization process to the ‘‘functional be implemented until CMS can also For procedures that do not have specific
equivalence’’ initiative that CMS establish a prior authorization process LCDs or NCDs, contractors may make
previously undertook, which Congress for ASCs because they believe individual claim determinations to
later prohibited. physicians will simply provide the assess whether or not the services are
Response: We disagree with the affected services in ASCs instead of reasonable and necessary, per section
commenters’ contentions. We believe hospitals, thereby avoiding the OPPS 1862(a)(1)(A) of the Act. This prior
section 1833(t)(2)(F) of the Act gives us prior authorization process altogether. authorization process does not make
Still others believed that physicians any changes to current documentation
172 AHA et al. v. Azar, No. 18–CV–2841, at *25 should be required to obtain prior requirements. While we recognize the
(D.D.C. Sept. 17, 2019). authorization instead of hospitals, and utility of NCDs and LCDs and the
importance of conducting prepayment policy does not create any new will be used to verify compliance with
and post-payment reviews, we also documentation or administrative the prior authorization process.
believe that a broad program integrity requirements. Instead, it will just Additionally, we stated that any
strategy must use a variety of tools to require the same documents that are claims associated with or related to a
best account for potential fraud, waste currently required to be submitted service that requires prior authorization
and abuse, including unnecessary earlier in the process. Resources should for which a claim denial is issued
increases in volume. Prior authorization not need to be diverted from patient would also be denied. These associated
has already proven to be an effective care. We note that prior authorization services include, but are not limited to,
method for controlling improper has the added benefit of giving hospitals services such as anesthesiology services,
payments and decreasing the volume of some assurance of payment for services physician services, and/or facility
potentially improperly billed services for which they received a provisional services. Consistent with current
for certain DMEPOS items. Thus, we affirmation. In addition, beneficiaries medical review and claims processing
believe that the use of prior will have information regarding guidance (for example, Program
authorization in the OPD context will be coverage prior to receiving the service, Integrity Manual (internet Only
an effective tool in controlling and will benefit by knowing in advance Manuals, No. 100–08 chapter 3, section
unnecessary increases in the volume of of receiving a service if they will incur 3.2.3 et seq. and chapter 7, section
covered OPD services by ensuring that financial liability for non-covered 7.2.2.2), and in accordance with new
the correct payments are made for services. We believe that some § 419.82(b)(3), these related claims
medically necessary OPD services, assurance of payment and some would be denied if the service listed in
while also being consistent with our protection from future audits will § 419.83(a)(1) had also been denied.
overall strategy of protecting the ultimately reduce burdens associated Claims for physicians’ services outside
Medicare Trust Fund from improper with denied claims and appeals. of the OPD setting will not be affected
payments, reducing the number of Comment: We received comments if the hospital fails to submit a prior
Medicare appeals, and improving with general questions regarding the authorization request for the OPD
provider compliance with Medicare proposed process such as who will be service.
program requirements. We will continue Comment: Some commenters
responsible for obtaining the prior
to work toward enhancing our overall expressed concern that even when a
authorization, that is, the physician or
program integrity strategy in meaningful provisional affirmation is obtained, the
the hospital, and whether all related
ways. We also appreciate the positive claim could ultimately be denied and
claims will be denied if prior
input regarding the DRLS, and we agree that the requirement should be changed
authorization is not obtained. Some
that, once available, it will facilitate so that no claim could be denied for
commenters expressed concern that which a provisional affirmation was
overall transparency in coverage physicians could be denied payment for
requirements, which should benefit all obtained. Still others asked for
services rendered if a hospital fails to clarification regarding whether all
parties. submit a prior authorization request or
Comment: Several commenters stated claims would be denied in situations
fails to notify the physician of a denial. where a provisional affirmation was
that prior authorization processes add
burden, can result in unnecessary Response: As noted above, this prior received but the corresponding claim
delays in care, and interfere with the authorization process is being adopted was later denied. Others expressed
physician-patient care decision or under section 1833(t)(2)(F) of the Act, concern that no appeal rights exist for
otherwise negatively affect patient care. which is specific to OPD services, those instances where a non-affirmation
Some commenters specifically which provides payment only to is received and that CMS should
mentioned problems associated with hospital outpatient departments. In light determine the cost of care to
prior authorization processes within of the different arrangements that could beneficiaries who are negatively
Medicare Advantage Plans while others exist in different hospitals, we impacted by the receipt of a non-
conveyed that prior authorization is determined that enabling either the affirmation or who have care denied.
contrary to CMS’ Patients Over physician or the hospital to submit the Response: Having a provisional
Paperwork initiative. prior authorization request on behalf of affirmation shows that a claim likely
Response: The process we are the hospital outpatient department was meets Medicare’s coverage and payment
establishing specifically relates to the best approach, though the hospital rules and is likely to be paid. Absent
Medicare FFS, not Medicare Advantage, ultimately remains responsible for evidence of fraud or gaming, a provider
and we have had demonstrated success ensuring this condition of payment is can anticipate payment as long as other
in implementing prior authorization met. Physicians and the hospitals are in payment requirements are met. We
processes in the Medicare FFS for the best position to account for the anticipate that most, if not all, claims for
DMEPOS. As with our other prior various relationships and obligations which a provisional affirmation is
authorization processes, we believe that that exist and should account for the obtained would not be denied on the
the OPD prior authorization process for prior authorization process. Part of that basis of medical necessity. However, it
certain discrete, often cosmetic process should be communication of is possible the claim could be denied
procedures can be implemented without prior authorization decisions between because it did not meet a coding or
the referenced delays in patient care. entities, as a unique tracking number billing requirement (examples include,
This is because we are establishing (UTN) corresponding to the prior but are not limited to, when there are
timeframes for contractors to render authorization decision must be included duplicate claims submitted, when some
decisions on prior authorization on the OPD claim for these services. element of the claim form is incorrectly
requests as well as an expedited review Consistent with all Medicare Fee-for- completed, or if a modifier is placed on
process when the regular review Service prior authorization and pre- a claim that prevents it from processing
timeframe could seriously jeopardize claim review processes, when a prior appropriately). In addition, The
the beneficiary’s health that we believe authorization request is submitted, the Improper Payments Elimination and
will enable hospitals to receive timely request will be assigned a UTN. The Recovery Improvement Act of 2012
provisional affirmations. Additionally, UTN must be included on any claim (IPERIA) (Pub. L. 112–248), requires all
we note that our prior authorization submitted for the services listed, which federal agencies to evaluate their
programs for improper payments. The should suffice in triggering the exempting providers from prior
CMS Comprehensive Error Rate Testing expedited processing time frame. authorization if the providers
(CERT) program reviews a stratified, Response: We appreciate the participate in standardized data
random sample of claims annually to comments in response to our proposed collection and are willing to share their
identify and measure improper process. While we recognize the desire data.
payments. It is possible for a claim to obtain provisional affirmations as Response: We thank the commenters
subject to prior authorization to fall quickly as possible, given that these for these suggestions. We believe we
within the sample. In this situation, the services are typically cosmetic and have accounted for the exemption rate
subject claim would not be protected would be provided in the outpatient in the preamble and intend to maintain
from the CERT audit. In addition, the hospital department setting, we believe the 90 percent rate. With regard to the
Office of Inspector General’s (OIG) the identified time frames adequately notice of exemption and/or withdrawal
authority to audit claims is not balance program integrity, provider of an exemption, we agree that the
impacted by the protection from future burden, and beneficiary concerns. In regulations should account for this
audits provided by the provisional those circumstances where approval is process in more detail. We had initially
affirmation prior authorization decision. needed more expeditiously, an stated in the CY 2020 OPPS/ASC
While we appreciate that there is expedited request can be requested and proposed rule (84 FR 39606) that we
concern over the lack of appeal rights if granted, will result in a provisional anticipate that an exemption will take
for non-affirmations, we note that affirmation or non-affirmation being approximately 90 calendar days to
providers are not limited in the number issued within two business days of the effectuate. In the interest of helping
of times they can resubmit requests that expedited request, which we believe is ensure providers incur the least burden
were previously non-affirmed, and that sufficient where expedition is possible, we will formalize the ability to
appeal rights still exist once a claim is necessary. With respect to the OPD notify providers before our anticipated
actually denied. Lastly, with regard to services selected for this program, we 90-day period (that is, at least 60 days).
the impact on care for those believe that requests for expedited As such, we have revised § 419.83(c) to
beneficiaries for which hospitals receive review will be minimal, and note that redesignate the last sentence of
non-affirmations, we note that we this prior authorization process does not proposed paragraph (c)—‘‘An
specifically chose services that are often remove or alter the clinical judgment exemption will remain in effect until
cosmetic and believe that it is process in any way. We are only CMS elects to withdraw the exemption’’
appropriate to deny such services in the requesting currently required —as new subparagraph (1). We are
case of a non-affirmation, because a documentation earlier in the process. As adding a new provision at new
non-affirmation would indicate that the OPD is ultimately responsible for paragraph (c)(2), which will account for
Medicare’s coverage, coding, and/or this condition of payment to be met the notice of an exemption or
payment rules for the service are not through the prior authorization process, withdrawal of an exemption being
being met. Consistent with current we respectfully disagree with the delivered at least 60 calendar days prior
Medicare Fee-for-Service prior commenter’s suggestion to allow the to the implementation date. Because we
authorization and pre-claim review OPD to be waived from their are unable to determine a compliance or
processes, the provider will receive a requirement to submit the prior non-compliance rate prior to the
detailed explanation as to why the authorization request solely on a initiation of the process because most
request was non-affirmed and will be physician’s recommendation. All claims have not undergone full medical
afforded an unlimited number of request requests for expedited reviews will be review and were likely paid or denied
resubmissions. Our experience in our considered based upon the based upon the completeness of the
other prior authorization and pre-claim documentation submitted by the OPD, elements on the face of the claim, we
review processes has been that including any justification provided by cannot exempt certain providers or only
approximately 95 percent of physicians on behalf of the OPD, and require prior authorization for certain
submissions are affirmed within two the timeframes designed into the providers in advance of implementing
requests, and that the impact of non- process are intended to ensure that the new process. Lastly, we do not
affirmation decisions has been minimal beneficiaries receive necessary care for believe it is sufficient to exempt
for necessary, covered services. these services when appropriate. providers who provide data. Through
Comment: Some commenters Comment: One commenter suggested the prior authorization process, we are
recommended that CMS decrease the that certain provisions, including the best able to identify problems before
ten business day time frame for issuing exemption rate and the notice of they occur and control for unnecessary
provisional affirmations and non- exemption and/or withdrawal of an increases in the volume of these
affirmations, because the commenters exemption, should be explicitly procedures, while ensuring that
believed there could be occasions where accounted for within the regulations beneficiaries receive medically
the decision ultimately takes 15 days in located in Part 419. Still other necessary services.
light of weekends and holidays being commenters suggested that CMS Comment: Some commenters
excluded from the ten business day determine the rate of compliance with suggested that MACs do not have the
calculation. Still others commented that the coverage requirements prior to the clinical review capabilities to
providers should be exempt from having implementation of this prior sufficiently handle prior authorization
to complete the prior authorization authorization process so that certain requests and suggested that CMS require
process in emergency situations or that providers could begin the new process specific credentials of the MAC medical
retroactive provisional affirmations with an exemption in place for attaining reviewers to ensure the accuracy of
should be issued in these or exceeding the requisite 90 percent MAC decisions. Still other commenters
circumstances; the expedited review compliance rate. Alternatively, one related several principles of prior
process should be completed within 24 commenter suggested that CMS use authorization with which they believed
hours if urgent circumstances exist; and existing data to identify egregious we should comply as we implement the
the need to submit a request for an providers to reduce burden on new prior authorization process. These
expedited review be eliminated and historically compliant providers. principles include selective application
instead the judgment of the physician Finally, one commenter suggested of prior authorization to only ‘‘outliers,’’
review/adjustment of prior Response: In developing this prior Comment: We received comments

authorization lists to remove services/ authorization process, we indicated that that the growth in utilization of a
drugs that represent low-value prior we were building upon our already procedure/product class exceeding the
authorization; transparency of prior established prior authorization program baseline growth rates in the Medicare
authorization requirements and their established for certain DMEPOS under population is not a sufficient basis for
clinical basis to patients and physicians; 42 CFR 414.234, and included more inferring that utilization is
protections of patient continuity of care; detailed requirements, such as decision inappropriate or that utilization growth
and automation to improve prior timeframes for both regular and is unwarranted and that CMS should
authorization and process efficiency. expedited reviews, as well as the analyze readily available clinical
Response: In all Medicare Fee-for- percentages needed to demonstrate information that would explain changes
Service medical review programs we continued compliance with Medicare in utilization before the agency adopts
require that MACs utilize clinicians, coverage, coding and payment rules in broad-based interventions such as
specifically, registered nurses, when order to be exempt from the prior imposing prior authorization on
reviewing medical documentation. We authorization process. We have outpatient hospitals. The same
also require the oversight of a Medical considerable experience in light of the commenter suggested that the increases
Director and additional clinician DMEPOS prior authorization program seen in CPT codes 64612 and 64615 are
engagement if necessary. We are and are leveraging this experience likely due to other factors such as FDA’s
confident that MACs have the requisite accordingly. As we indicated in our approval of BOTOX® in 2010, increased
expertise to effectively administer the prior responses, we are making support for BOTOX® as a migraine
prior authorization process, and we additional changes, including adding treatment, and the addition of chronic
maintain a robust oversight process to specific regulatory provisions, to ensure migraine to the list of covered
ensure the accuracy and consistency of the program’s administrative indications for BOTOX® in Medicare
their review decisions. Further, we requirements are clear. Once finalized, contractor LCDs. This commenter also
believe the prior authorization process CMS and our contractors will provide recommended that if CMS chooses to
we are adopting aligns with the additional educational and outreach move forward with implementing this
principles outlined by the commenters. materials to all stakeholders. prior authorization process that CMS
Of note, we have included a process to Comments: Some commenters expand the prior authorization
exempt providers who consistently requested changes that are out of the requirements to apply to all four FDA-
demonstrate compliance with Medicare scope of this rule related to Medicare approved botulinum toxin therapeutic
rules through this prior authorization Advantage plans. products to include DYSPORT® (J0586)
process. We also are focusing initially Response: This prior authorization and XEOMIN® (J0588) in addition to
on procedures that are not urgent and policy is specific to Medicare FFS, so
BOTOX® and MYOBLOC® so as not to
likely cosmetic and of high value, and we are not able to respond to comments
create distortion in the marketplace and
we have included an expedited process that raise concerns regarding Medicare
incentivize providers to administer
if circumstances warrant. Along with Advantage prior authorization
those botulinum toxin therapeutic
our contractors, we will continue to programs.
Comments: One commenter pointed products that are not subject to prior
analyze the value of the services that we authorization. One commenter also
target for prior authorization to be sure out that we had used U.S. Bureau of
Labor and Statistics (BLS) data when expressed concern that the prior
that services are selected that are authorization process could impact
appropriate for this process. As the attempting to compare overall health
care costs against the OPD payments women and veterans more significantly
process matures and CMS implements
trending data when other spending data than other categories because these
new technologies, such as the DRLS or
may be more appropriate. groups tend to experience migraines at
other industry standards, we will
Response: We thank this commenter higher rates than other categories and
effectuate improvements to the prior
and have evaluated U.S. Bureau of this could ultimately lead to an increase
authorization process and coverage
Economic Analysis (BEA) data, which in opioid abuse within these groups. We
requirements.
Comment: Some commenters asked we agree may be more appropriate. We received several comments asking
for clarification regarding how CMS had compared the 8.2 percent average whether a provisional affirmation for
would carry out certain provisions of annual increase for OPD services over botulinum toxin injections would be per
the CY 2020 OPPS/ASC proposed rule, the 11-year period of 2007 through 2017 injection or for a specific course of
such as establishing standardized prior to the 5.8 percent average annual treatment over a period of time, such as
authorization protocols, including spending calculated from the BLS data; twelve months. We also received
timely resolution of clinical reviews and however, after consulting with both comments to add codes to the list for
clearly articulated decision criteria and bureaus, the BEA data better aligns with alternative treatment options for
rationale in an effort to minimize case our analytic process (that is, comparing varicose veins, such as phlebectomy and
delays and encourage effective overall expenditures for OPPS services sclerotherapy.
communication changes between via CMS data against overall Response: We thank the commenters
providers and health plans. Other expenditures for health care services via for their input. In determining the
commenters requested that CMS adopt a BEA data to as opposed to comparing specific services to which this prior
required response period for initial and overall expenditures for OPPS services authorization process would apply, we
repeat prior authorization requests, via CMS data against the cost of health considered all available data and believe
noted CMS’ lack of experience in using care services for the typical consumer that comparing the utilization rate to the
prior authorization in Medicare Fee-For- via BLS data). The BEA data reflected a baseline growth rate is an appropriate
Service, and referenced a lack of 2.3 percent average annual increase per method for identifying potentially
administrative structure and guidelines year in overall health care spending unnecessary increases in volume. By
as well as the need for a well- using data publicly available on the identifying trends over the 11-year
functioning portal through which prior BEA web page, located at: https:// period for OPD services, we are able to
authorization requests could be apps.bea.gov/iTable/iTable.cfm? contrast and compare specific services
submitted. reqid=51&step=2&isuri=1https. as targets for increases in volume versus
our expectations. Moreover, in making average annual increase in the number time, and will allow for such prior
our decision we did consider the impact of unique patients is approximately 18.0 authorization requests.
of changes in the use of these items and percent. Moreover, although we did We performed similar data analysis
available clinical information. Of note, observe some increases of the original on vein treatments and saw several of
we determined that the increased botulinum toxin codes after the 2010 the procedures had similar unnecessary
utilization of botulinum toxin injections FDA clearance for chronic migraines, increases in volume; however, these
was not solely attributable to the Food we noted an average annual increase in procedures account for a different
and Drug Administration’s approval for claims volume of 16.6 percent for J0585, approach in treatment for varicose veins
the treatment of migraines. We 23.6 percent for J0586, 12.2 percent for than the vein ablation procedures we
conducted additional analysis of the J0587, and 17.9 percent for J0588. These discussed in the proposed rule. Since
additional botulinum toxin products statistics are for the period 2010 through these are procedures and not products,
suggested by the commenter and 2017 for all four codes except J0588, we do not have the same concern about
determined that these too had similar which only had data beginning 2012 marketplace distortion and are not
increases in volume. As noted in the (with data for interim years within the adding them to the list at this time. We
preamble, our statistical analysis of the four codes reflecting increases as high as
will continue to monitor these and other
botulinum toxin injection codes 65.9 percent). These sustained and
OPD procedures for unnecessary
originally proposed showed an overall persistent increases above expected
increases in volume and will propose
average annual increase in the number volumes are not explained by the new
additional procedures through
of unique claims of approximately 19.3 FDA approval in 2010. So as not to
rulemaking.
percent from 2007 through 2017, an create distortion in the marketplace and
annual average increase in costs and incentivize providers to administer In sum, we are finalizing our
payments of approximately 27.8 those botulinum toxin therapeutic proposed prior authorization policy as
percent, and an average annual increase products that are not subject to prior proposed, including our proposed
in the number of unique patients of authorization, as the commenter regulation text, with the following
approximately 17.9 percent. When suggests, we are including the two modifications: We are adding additional
adding these two additional codes to additional botulinum toxin codes on the language at § 419.83(c) regarding the
our statistical analyses, utilizing the final list, since they also show similar notice of exemption or withdraw of an
same methodology, we have identified unnecessary increases in volume. exemption. We are including in this
that the overall average annual increase We acknowledge that circumstances process the two additional botulinum
in the number of unique claims is now exist where a prior authorization could toxin injections codes, J0586 and J0588.
approximately 19.4 percent from 2007 apply for a specific course of treatment See Table 64 below for the final list of
through 2017, the annual average for the botulinum toxin injection outpatient department services
increase in payments is now procedures, such as a number of requiring prior authorization.
approximately 26.1 percent, and the treatments over a specific period of BILLING CODE 4120–01–P
ER12NO19.108</GPH>
BILLING CODE 4120–01–C on August 6, 2019, with a comment suggested that CMS proceed cautiously
4. Summary of the Public Comments period that ended on September 27, and roll out prior authorization on a
and Responses to Comments on the 2019. In that rule, for prior limited basis and then scale nationally,
Proposed Rule authorization, we received 96 public similar to how the DMEPOS prior
comments on our proposals, including authorization process was implemented.
The proposed rule, titled ‘‘Medicare comments from healthcare providers, Response: We thank the commenters
Program; Proposed Changes to Hospital professional and trade organizations, for their comments. We appreciate the
Outpatient Prospective Payment and drug manufacturers, beneficiary positive responses to our proposed prior
Ambulatory Surgical Center Payment advocacy organizations, and health care authorization process. In assessing the
Systems and Quality Reporting systems. The following is a summary of operational implementation schedule
Programs; Price Transparency of the comments we received and our for prior authorization, we believe that
Hospital Standard Charges; Proposed responses. the July 1, 2020 implementation date
Revisions of Organ Procurement Comment: We received several will reasonably allow enough time to
Organizations Conditions of Coverage; comments in support of prior educate and prepare stakeholders to be
Proposed Prior Authorization Process authorization, with some adding they able to submit the necessary
and Requirements for Certain Covered were ‘‘intrigued’’ by the promise prior documentation for prior authorization
Outpatient Department Services; authorization has in Fee-For-Service for these services. No new
Potential Changes to the Laboratory Date Medicare. Others commented that CMS documentation requirements are created
of Service Policy; Proposed Changes to is underestimating the amount of time as a result of this process. Instead,
Grandfathered Children’s Hospitals- and education providers will require in currently needed documents are
Within-Hospitals’’ (84 FR 39398 through learning the new process. Some submitted earlier in the process.
39644), hereinafter referred to as the commenters suggested that CMS delay Comment: Some commenters
‘‘CY 2020 OPPS/ASC proposed rule,’’ implementation of prior authorization questioned whether section 1833(t)(2)(F)
ER12NO19.109</GPH>
was published in the Federal Register beyond July 1, 2020, while others of the Act grants CMS the authority to
establish a prior authorization process already been shown to be an effective setting, because these entities are paid
and noted that when Congress intended tool in Fee-for-Service Medicare, and under other payment systems. We thank
to give CMS authority to implement a which we believe will be effective at the commenters for noting the potential
prior authorization process, it has done controlling unnecessary increases for to shift these services to ASCs and will
so explicitly. Still others suggested the those procedures that are often cosmetic monitor these data and may consider
development of the new process is and for which we have identified additional program integrity oversight if
‘‘arbitrary and capricious’’ because the unnecessary volume increases. We also such shifts are realized.
commenters believed that CMS has not believe that the description of our Comment: Several commenters
demonstrated that increases in the extensive data analysis in the CY 2020 suggested that prior authorization is not
volume of services for which we OPPS/ASC proposed rule, comparing an effective method for controlling fraud
proposed to require prior authorization trends for the procedures discussed and that other tools, such as CMS’
are unnecessary. Several commenters against 1.1 billion OPD claims over 11 development of National Coverage
quoted a recent decision from the years, demonstrated that there have Decisions (NCDs) and Local Coverage
United States District Court for the been unnecessary increases for all Determinations (LCDs), prepayment and
District of Columbia,173 in which the services for which we proposed to post-payment reviews, provider
court invalidated the policy we adopted require prior authorization and that outreach and education, and law
in the CY 2019 OPPS/ASC final rule there have not been other, legitimate enforcement actions are more effective
with comment period to reduce reasons for the sustained increases. methods to control unnecessary
payment for clinic visits furnished in We also disagree with the commenters increases in volume. In fact, some
excepted off-campus provider-based who believe the District Court’s decision commenters suggested that we place
departments to a Physician Fee in the clinic visit litigation decision providers on 100 percent pre-payment
Schedule-equivalent amount as a forecloses our ability to adopt a method review in lieu of establishing the new
method to control unnecessary increases to control unnecessary increases in the prior authorization process. Others
in the volume of clinic visits furnished volume of covered outpatient commented that prior authorization is
in these settings. In its decision the department services under section nothing more than a ‘‘blunt
court stated with respect to this policy, 1833(t)(2)(F) of the Act without tying instrument;’’ is contrary to some LCDs
which we also adopted under section that method to another provision of the which clearly convey certain services
1833(t)(2)(F) of the Act, that ‘‘Congress OPPS statute. Rather, we believe that, are not covered; and that CMS needs to
did not intend CMS to use an unlike the clinic visit policy at issue in ensure coverage criteria are more easily
untethered ‘method’ to directly alter that decision, the prior authorization identifiable and searchable so that
expenditures independent of other policy does not have an immediate hospitals can more readily comply with
processes.’’ These commenters quoted impact on the amount of payment or the the requirements. One commenter
the court as going on to state that, ‘‘. . . budget neutrality calculations for the questioned how to give input on
Congress directed any ‘methods’ OPPS, and therefore, we believe it is establishing medical necessity and how
developed under paragraph (t)(2)(F) be distinguishable from the clinic visit medical necessity criteria will be set
implemented through other provisions policy that the court invalidated and and another commenter specifically
of the statute.’’ The commenters does not need to be adopted under lauded CMS’ not-yet-completed
contended that we cannot point to any separate authority in addition to section development of the documentation
other provision of the OPPS statute that 1833(t)(2)(F) of the Act. requirements look-up service (DRLS).
would authorize a prior authorization Comment: Several commenters Response: We note that we have a
requirement, which the commenters questioned why ambulatory surgical variety of tools that can be used in
believed we must do following the centers (ASCs) and other provider types making reasonable and necessary
court’s decision. Still others compared are exempt from this prior authorization determinations. for several procedures
CMS’ attempts to establish a prior process. The commenters believed the on the list of outpatient department
authorization process to the ‘‘functional prior authorization process should not services requiring prior authorization.
equivalence’’ initiative that CMS be implemented until CMS can also For other procedures that do not have
previously undertook, which Congress establish a prior authorization process specific LCDs or NCDs, contractors may
later prohibited. for ASCs because they believe make individual claim determinations
Response: We disagree with the physicians will simply provide the to assess whether or not the services are
commenters’ contentions. We believe affected services in ASCs instead of reasonable and necessary, per section
section 1833(t)(2)(F) of the Act gives us hospitals, thereby avoiding the OPPS 1862(a)(1)(A) of the Act. This prior
significant discretion to determine the prior authorization process altogether. authorization process does not make
appropriate methods to control Still others believed that physicians any changes to current documentation
unnecessary increases in the volume of should be required to obtain prior requirements. While we recognize the
covered OPD services. We believe that authorization instead of hospitals, and utility of NCDs and LCDs and the
where, as here, we have determined that that CMS should adopt regulations importance of conducting of
there have been unnecessary increases under the Physician Fee Schedule to prepayment and post-payment reviews,
in services that are often cosmetic, require physicians to adhere to the we also believe that a broad program
section 1833(t)(2)(F) of the Act gives us documentation and related integrity strategy must use a variety of
authority to utilize prior authorization requirements for prior authorization. tools to best account for potential fraud,
Response: This prior authorization waste and abuse, including unnecessary
as a method to control those
process is being adopted under section increases in volume. Prior authorization
unnecessary increases. We carefully
1833(t)(2)(F) of the Act, which is has already proven to be an effective
considered all available options in
specific to the OPPS, which provides method for controlling improper
choosing to propose the prior
payment only to hospital outpatient payments and decreasing the volume of
authorization process, which has
departments. As such, we cannot extend potentially improperly billed services
173 AHA et al. v. Azar, No. 18–CV–2841, at *25 the process to ASCs or other healthcare for certain DMEPOS items. Thus, we
(D.D.C. Sept. 17, 2019). [Do we want to mention the provider types, including physicians believe that the use of prior
motion to modify?] outside of the outpatient department authorization in the OPD context twill
be an effective tool in controlling and will benefit by knowing in advance would be denied as well if the service
unnecessary increases in the volume of of receiving a service if they will incur listed in § 419.83(a)(1) had also been
covered OPD services by ensuring that financial liability for non-covered denied. If the prior authorization is not
the correct payments are made for services. We believe that some submitted by the hospital and the
medically necessary OPD services, assurance of payment and some physician submits a claim for the
while also being consistent with our protection from future audits will service, it cannot be processed as an
overall strategy of protecting the ultimately reduce burdens associated OPD service as this program requires
Medicare Trust Fund from improper with denied claims and appeals. prior authorization of the OPD service
payments, reducing the number of Comment: We received comments as a condition of payment.
Medicare appeals, and improving with general questions regarding the Comment: Some commenters
provider compliance with Medicare proposed process such as who will be expressed concern that even when a
program requirements. We will continue responsible for obtaining the prior provisional affirmation is obtained, the
to work toward enhancing our overall authorization, that is, the physician or claim could ultimately be denied and
program integrity strategy in meaningful the hospital, and whether all related that the requirement should be changed
ways. We also appreciate the positive claims will be denied if prior so that no claim could be denied for
input regarding the DRLS, and we agree authorization is not obtained. Some which a provisional affirmation was
that, once available, it will facilitate commenters expressed concern that obtained. Still others asked for
overall transparency in coverage physicians could be denied payment for clarification regarding whether all
requirements, which should benefit all services rendered if a hospital fails to claims would be denied in situations
parties. submit a prior authorization request or where a provisional affirmation was
Comment: Several commenters stated fails to notify the physician of a denial. received but the corresponding claim
that prior authorization processes add Response: As noted above, this prior was later denied. Others expressed
burden, can result in unnecessary authorization process is being adopted
concern that no appeal rights exist for
delays in care, and interfere with the under section 1833(t)(2)(F) of the Act,
those instances where a non-affirmation
physician-patient care decision or which is specific to OPD services,
is received and that CMS should
otherwise negatively affect patient care. which provides payment only to
determine the cost of care to
Some commenters specifically hospital outpatient departments. In light
beneficiaries who are negatively
mentioned problems associated with of the different arrangements that could
impacted by the receipt of a non-
prior authorization processes within exist with physicians in different
affirmation or who have care denied.
Medicare Advantage Plans while others hospitals, we determined that enabling
conveyed that prior authorization is either the physician or the hospital to Response: Having a provisional
contrary to CMS’ Patients Over submit the prior authorization on behalf affirmation shows that a claim likely
Paperwork initiative. of the hospital outpatient department meets Medicare’s coverage and payment
Response: The process we are was the best approach. Physicians and rules and is likely to be paid. Absent
establishing specifically relates to the hospitals are in the best position to evidence of fraud or gaming, a provider
Medicare FFS, not Medicare Advantage, account for the various relationships can anticipate payment as long as other
and we have had demonstrated success and obligations that exist and should payment requirements are met. We
in implementing prior authorization account for the prior authorization anticipate that most, if not all, claims for
processes in the Medicare FFS for process. Part of that process should be which a provision affirmation is
DMEPOS. As with our other prior communication of prior authorization obtained would not be denied on the
authorization processes, we believe that decisions between entities, as a unique basis of medical necessity. However, it
the OPD prior authorization process for tracking number (UTN) corresponding is possible the claim could be denied
certain discrete, often cosmetic to the prior authorization decision must because it did not meet a coding or
procedures can be implemented without be included on the OPD claim for these billing requirement (examples include,
the referenced delays in patient care. services. Consistent with all Medicare but are not limited to, when there are
This is because we are establishing Fee-for-Service prior authorization and duplicate claims submitted, when some
timeframes for contractors to render pre-claim review processes, when a element of the claim form is incorrectly
decisions on prior authorization prior authorization request is submitted, completed, or if a modifier is placed on
requests as well as an expedited review the request will be assigned a UTN. The a claim that prevents it from processing
process when the regular review UTN must be included on any claim appropriately). In addition, The
timeframe could seriously jeopardize submitted for the services listed, which Improper Payments Elimination and
the beneficiary’s health that we believe will be used to verify compliance with Recovery Improvement Act of 2012
will enable hospitals to receive timely the prior authorization process. (IPERIA) (Pub. L. 112–248), requires all
provisional affirmations. Additionally, Additionally, we stated that any federal agencies to evaluate their
we note that our prior authorization claims associated with or related to a programs for improper payments. The
policy does not create any new service that requires prior authorization CMS Comprehensive Error Rate Testing
documentation or administrative for which a claim denial is issued (CERT) program reviews a stratified,
requirements. Instead, it will just would also be denied. These associated random sample of claims annually to
require the same documents that are services include, but are not limited to, identify and measure improper
currently required to be submitted services such as anesthesiology services, payments. It is possible for a claim
earlier in the process. Resources should physician services, and/or facility subject to prior authorization to fall
not need to be diverted from patient services. Consistent with current within the sample. In this situation, the
care. We note that prior authorization medical review and claims processing subject claim would not be protected
has the added benefit of giving hospitals guidance (for example, Program from the CERT audit. In addition, the
some assurance of payment for services Integrity Manual (internet Only Office of Inspector General’s (OIG)
for which they received a provisional Manuals, Pub. L. 100–08 chapter 3, authority to audit claims is not
affirmation. In addition, beneficiaries section 3.2.3 et sec and chapter 7, impacted by the protection from future
will have information regarding section 7.2.2.2), and in accordance with audits provided by the provisional
coverage prior to receiving the service, new § 419.82(b)(3), these related claims affirmation prior authorization decision.
While we appreciate that there is expedited request can be requested and the notice of an exemption or
concern over the lack of appeal rights if granted, will result in a in a withdrawal of an exemption being
for non-affirmations, we note that provisional affirmation or non- delivered at least 60 calendar days prior
providers are not limited in the number affirmation being issued within two to the implementation date. Because we
of times they can resubmit requests that business days of the expedited request, are unable to determine a compliance or
were previously non-affirmed, and that which we believe is sufficient where non-compliance rate prior to the
appeal rights still exist once a claim is expedition is necessary. With respect to initiation of the process because most
actually denied. Lastly, with regard to clinical judgement, the prior claims have not undergone full medical
the impact on care for those authorization process does not remove review and were likely paid or denied
beneficiaries for which hospitals receive or alter the clinical judgement process based upon the completeness of the
non-affirmations, we note that we in any way. We are only requesting elements on the face of the claim, we
specifically chose services that are often currently required documentation cannot exempt certain providers or only
cosmetic and believe that it is earlier in the process. Physicians remain require prior authorization for certain
appropriate to deny such services in the fully capable and responsible to support providers in advance of implementing
case of a non-affirmation, because a the reasonableness and necessity of the the new process. Lastly, we do not
non-affirmation would indicate that proposed services. believe it is sufficient to exempt
Medicare’s coverage, coding, and/or Comment: One commenter suggested providers who provide data. Through
payment rules for the service are not that certain provisions, including the the prior authorization process, we are
being met. Consistent with current exemption rate and the notice of best able to identify problems before
Medicare Fee-for-Service prior exemption and/or withdrawal of an they occur and control for unnecessary
authorization and pre-claim review exemption, should be explicitly increases in the volume of these
processes, the provider will receive a accounted for within the regulations procedures, while ensuring that
detailed explanation as to why the located in Part 419. Still other beneficiaries receive medically
request was non-affirmed and will be commenters suggested that CMS necessary services.
afforded an unlimited number of request determine the rate of compliance with Comment: Some commenters
resubmissions. Our experience in our the coverage requirements prior to the suggested that MACs do not have the
other prior authorization and pre-claim implementation of this prior clinical review capabilities to
review processes has been that authorization process so that certain sufficiently handle prior authorization
approximately 95 percent of providers could begin the new process requests and suggested that CMS require
submissions are affirmed within two with an exemption in place for attaining specific credentials of the MAC medical
requests, and that the impact of non- or exceeding the requisite 90 percent reviewers, to ensure the accuracy of
affirmation decisions has been minimal compliance rate. Alternatively, one MAC decisions. Still other commenters
for necessary, covered services. commenter suggested that CMS use related several principles of prior
Comment: Some commenters existing data to identify egregious authorization with which they believed
recommended that CMS decrease the providers to reduce burden on we should comply as we implement the
ten business day time frame for issuing historically compliant providers. new prior authorization process. These
provisional affirmations and non- Finally, one commenter suggested principles include selective application
affirmations, because the commenters exempting providers from prior of prior authorization to only ‘‘outliers,’’
believed there could be occasions where authorization if the providers review/adjustment of prior
the decision ultimately takes 15 days in participate in standardized data authorization lists to remove services/
light of weekends and holidays being collection and are willing to share their drugs that represent low-value prior
excluded from the ten business day data. authorization; transparency of prior
calculation. Still others commented that Response: We thank the commenters authorization requirements and their
providers should be exempt from having for these suggestions. We believe we clinical basis to patients and physicians;
to complete the prior authorization have accounted for the exemption rate protections of patient continuity of care;
process in emergency situations or that in the preamble and intend to maintain and automation to improve prior
retroactive provisional affirmations the 90 percent rate. With regard to the authorization and process efficiency.
should be issued in these notice of exemption and/or withdrawal Response: In all Medicare Fee-for-
circumstances; the expedited review of an exemption, we agree that the Service medical review programs we
process should be completed within 24 regulations should account for this require that MACs utilize clinicians,
hours if urgent circumstances exist; and process in more detail. We had initially specifically, registered nurses, when
the need to submit a request for an stated in the CY 2020 OPPS/ASC reviewing medical documentation. We
expedited review be eliminated and proposed rule (84 FR 39606) that we also require the oversight of a Medical
instead the judgment of the physician anticipate that an exemption will take Director and additional clinician
should suffice in triggering the approximately 90 calendar days to engagement if necessary. We are
expedited processing time frame. effectuate. In the interest of helping confident that MACs have the requisite
Response: We appreciate the ensure providers incur the least burden expertise to effectively administer the
comments in response to our proposed possible, we have offered to formalize prior authorization process, and we
process. While we recognize the desire the ability to notify providers before our maintain a robust oversight process to
to obtain provisional affirmations as anticipated 90-day period (that is, at ensure the accuracy and consistency of
quickly as possible, given that these are least 60 days) if and when possible. As their review decisions. Further, we
services are typically cosmetic and such, we have revised § 419.83(c) to believe the prior authorization process
would be provided in the outpatient redesignate the last sentence of we are adopting aligns with the
hospital department setting, we believe proposed paragraph (c)—‘‘An principles outlined by the commenters.
the identified time frames adequately exemption will remain in effect until Of note, we have included a process to
balance program integrity, provider CMS elects to withdraw the exempt providers who consistently
burden, and beneficiary concerns. In exemption’’—as new subparagraph (1). demonstrate compliance with Medicare
those circumstances where approval is We are adding a new provision at new rules through this prior authorization
needed more expeditiously, an paragraph (c)(2), which will account for process. We also are focusing initially
on procedures that are not urgent and Response: This prior authorization expressed concern that the prior
likely cosmetic and of high value, and policy is specific to Medicare FFS, so authorization process could impact
we have included an expedited process we are not able to respond to comments women and veterans more significantly
if circumstances warrant. Along with that raise concerns regarding Medicare than other categories because these
our contractors, we will continue to Advantage prior authorization groups tend to experience migraines at
analyze the value of the services that we programs. higher rates than other categories and
target for prior authorization to be sure Comments: One commenter pointed this could ultimately lead to an increase
that services are selected that are out that we had used U.S. Bureau of in opioid abuse within these groups. We
appropriate for this process. As the Labor and Statistics data when received several comments asking
process matures and CMS implements attempting to compare overall health whether a provisional affirmation for
new technologies, such as the DRLS or care costs against the OPD payments botulinum toxin injections would be per
other industry standards, we will trending data when other spending data injection or for a specific course of
effectuate improvements to the prior may be more appropriate. treatment over a period of time, such as
authorization process and coverage Response: We thank this commenter twelve months. We also received
requirements. and have evaluated U.S. Bureau of comments to add codes to the list for
Comment: Some commenters asked Economic Analysis (BEA) data, which alternative treatment options for
for clarification regarding how CMS we agree may be more appropriate. We varicose veins, such as phlebectomy and
would carry out certain provisions of had compared the 8.2 percent average sclerotherapy.
the CY 2020 OPPS/ASC proposed rule, annual increase for OPD services over Response: We thank the commenters
such as establishing standardized prior the 11-year period of 2007 through 2017 for their input. In determining the
authorization protocols, including to the 5.8 percent average annual specific services to which this prior
timely resolution of clinical reviews and spending calculated from the Bureau of authorization process would apply, we
clearly articulated decision criteria and Labor and Statistics data; however, after considered all available data and believe
rationale in an effort to minimize case consulting with both bureaus, the BEA that comparing the utilization rate to the
data better aligns with our analytic baseline growth rate is an appropriate
delays and encourage effective
process, which reflected a 2.3 percent method for identifying potentially
communication changes between
average annual increase per year in unnecessary increases in volume. By
providers and health plans. Other
overall health care spending using data identifying trends over the 11-year
commenters requested that CMS adopt a
publicly available on the BEA web page, period for OPD services, we are able to
required response period for initial and
located at: https://apps.bea.gov/iTable/ contrast and compare specific services
repeat prior authorization requests,
iTable.cfm?reqid=51&step=2&isuri= as targets for increases in volume versus
noted CMS’ lack of experience in using
1https. our expectations. Moreover, in making
prior authorization in Medicare Fee-For- Comment: We received comments our decision we did consider the impact
Service, and referenced a lack of that the growth in utilization of a of changes in the use of these items and
administrative structure and guidelines procedure/product class exceeding the available clinical information. Of note,
as well as the need for a well- baseline growth rates in the Medicare we determined that the increased
functioning portal through which prior population is not a sufficient basis for utilization of botulinum toxin injections
authorization requests could be inferring that utilization is was not solely attributable to the Food
submitted. inappropriate or that utilization growth and Drug Administration’s approval for
Response: In developing this prior is unwarranted and that CMS should the treatment of migraines. We
authorization process, we indicated that analyze readily available clinical conducted additional analysis of the
we were building upon our already information that would explain changes additional botulinum toxin injections
established prior authorization program in utilization before the agency adopts and determined that these too had
established for certain DMEPOS under broad-based interventions such as similar increases in volume and are
42 CFR 414.234, and included more imposing prior authorization on including the two additional botulinum
detailed requirements, such as decision outpatient hospitals. The same toxin codes on the final list. We
timeframes for both regular and commenter suggested that the increases acknowledge that circumstances exist
expedited reviews, as well as the seen in CPT codes 64612 and 64615 are where a prior authorization could apply
percentages needed to demonstrate likely due to other factors such as FDA’s for a specific course of treatment for the
continued compliance with Medicare approval of BOTOX in 2010, increased botulinum toxin injection procedures,
coverage, coding and payment rules in support for BOTOX as a migraine such as a number of treatments over a
order to be exempt from the prior treatment, and the addition of chronic specific period of time, and will allow
authorization process. We have migraine to the list of covered for such prior authorization requests.
considerable experience in light of the indications for BOTOX in Medicare We performed similar data analysis
DMEPOS prior authorization program contractor LCDs. This commenter also on vein treatments and saw several of
and are leveraging this experience recommended that if CMS chooses to the procedures had similar unnecessary
accordingly. As we indicated in our move forward with implementing this increases in volume; however, these
prior responses, we are making prior authorization process that CMS procedures account for a different
additional changes, including adding expand the prior authorization approach in treatment for varicose veins
specific regulatory provisions, to ensure requirements to apply to all four FDA- than vein ablation procedures. Since
the program’s administrative approved botulinum toxin therapeutic these are procedures and not products,
requirements are clear. Once finalized, products to include DYSPORT® (J0586) we do not have the same concern about
CMS and our contractors will provide and XEOMIN® (J0588) in addition to marketplace distortion and are not
additional educational and outreach BOTOX and MYOBLOC so as not to adding them to the list at this time. We
materials to all stakeholders. create distortion in the marketplace and will continue to monitor these and other
Comments: Some commenters incentivize providers to administer OPD procedures for unnecessary
requested changes that are out of the those botulinum toxin therapeutic increases in volume and will propose
scope of this rule related to Medicare products that are not subject to prior additional procedures through
Advantage plans. authorization. One commenter also rulemaking.
In sum, we are finalizing our percent from 2007 through 2017, an botulinum toxin codes after the 2010
proposed prior authorization policy as annual average increase in costs and FDA clearance for chronic migraines,
proposed, including our proposed payments of approximately 27.8 we noted an average annual increase in
regulation text, with the following percent, and an average annual increase claims volume of 16.6 percent for J0585,
modifications: We are adding additional in the number of unique patients of 23.6 percent for J0586, 12.2 percent for
language at § 419.83(c) regarding the approximately 17.9 percent. When J0587, and 17.9 percent for J0588. These
notice of exemption or withdraw of an adding these two additional codes to statistics are for the period 2010 through
exemption. We are including in this our statistical analyses, utilizing the 2017 for all four codes except J0588,
process the two additional botulinum same methodology, we have identified which only had data beginning 2012
toxin injections codes, J0586 and J0588. that the overall average annual increase (with data for interim years within the
See Table 65 below for the final list of in the number of unique claims is now four codes reflecting increases as high as
outpatient department services approximately 19.4 percent from 2007 65.9 percent). These sustained and
requiring prior authorization. Further, through 2017, the annual average persistent increases above expected
we had offered examples from our increase in payments is now volumes are not explained by the new
statistical analysis of the botulinum approximately 26.1 percent, and the FDA approval in 2010, which is why
toxin injection in the preamble that average annual increase in the number these codes, coupled with the specific
explained that we had seen an overall of unique patients of approximately 18.0 procedures, have been included in this
average annual increase in the number percent. Moreover, although we did program.
of unique claims of approximately 19.3 observe some increases of the original BILLING CODE 4120–01–P
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BILLING CODE 4120–01–C of correspondence on this RFI. We Existing § 412.22(f) provides for the
XX. Comments Received in Response to appreciate the input provided by grandfathering of HwHs that were in
Comment Solicitation on Cost commenters. existence on or before September 30,
Reporting, Maintenance of Hospital 1995, so long as the HwH continues to
XXI. Changes to Requirements for
Chargemasters, and Related Medicare operate under the same terms and
Grandfathered Children’s Hospitals-
Payment Issues conditions, including the number of
Within-Hospitals (HwHs)
In the CY 2020 OPPS/ASC proposed beds. Sections 412.22(h) and 412.25(e),
rule (84 FR 39609), we included a Existing regulations at § 412.22(e) relating to satellites of hospitals and
Request for Information (RFI) related to define a hospital-within-a-hospital hospital units, respectively, excluded
the relationship of hospital (HwH) as a hospital that occupies space from the IPPS, define a satellite facility
chargemasters to the Medicare cost in the same building as another as a part of a hospital or unit that
report and its use in setting Medicare hospital, or in one or more entire provides inpatient services in a building
payment for hospital services. We buildings located on the same campus also used by another hospital, or in one
ER12NO19.111</GPH>
received approximately 46 timely pieces as buildings used by another hospital. or more entire buildings located on the
same campus as buildings used by the FY 2018 IPPS/LTCH PPS final rule (vi) to section 1886(h)(4)(H) of the Act
another hospital. Sections 412.22(h)(3) (82 FR 38292 through 38294)). As part and modified language at section
and 412.25(e)(3) provide for the of our ongoing efforts to reduce 1886(d)(5)(B)(v) of the Act, to instruct
grandfathering of excluded hospitals regulatory burdens, we have continued the Secretary to establish a process to
and units that were structured as to examine areas in which the rules for redistribute residency slots after a
satellite facilities on September 30, co-located entities are no longer hospital that trained residents in an
1999, to the extent that they operate necessary. As a result of this approved medical residency program
under the same terms and conditions in examination, we believe that there is no closes. Specifically, the Secretary is
effect on that date. While these rules Medicare payment policy rationale for instructed to increase the full-time
initially only applied to LTCHs, in 1997, prohibiting grandfathered children’s equivalent (FTE) resident caps for
CMS expanded the scope of these rules HwHs from increasing their number of teaching hospitals based upon the FTE
to all hospitals excluded from the IPPS beds. Given the low number of Medicare
(including children’s hospitals) because resident caps in teaching hospitals that
claims submitted by these children’s
the underlying policy concern of closed ‘‘on or after a date that is 2 years
hospitals, which results in a minimal
hospitals creating new entities that were before the date of enactment’’ (that is,
level of Medicare payment to them
separate in name only (essentially relative to the payments they receive March 23, 2008). In the CY 2011 OPPS
operating as units of the hospital) in from other payers, we believe that such final rule with comment period (75 FR
order to increase Medicare revenue was a regulatory change would allow these 72212), we established regulations at 42
not unique to LTCHs. For example, we hospitals to address changing CFR 413.79(o) and an application
have expressed our concerns that an community needs for services without process for qualifying hospitals to apply
HwH’s ‘‘configuration could result in any increased incentive for to CMS to receive direct graduate
patient admission, treatment, and inappropriate patient shifting to medical education (DGME) and indirect
discharge patterns that are guided more maximize Medicare payments. medical education (IME) FTE resident
by attempts to maximize Medicare Additionally, we do not believe that cap slots from the hospital that closed.
payments than by patient welfare’’ and allowing grandfathered children’s HwHs We made certain modifications to those
that ‘‘the unregulated linking of an IPPS to increase their bed size would impart regulations in the FY 2013 IPPS/LTCH
hospital and a hospital excluded from an economic advantage to these PPS final rule (77 FR 53434), and we
the IPPS could lead to two Medicare hospitals relative to other hospitals. made changes to the section 5506
payments for what was essentially one However, in the CY 2020 OPPS/ASC application process in the FY 2015
episode of patient care’’ (69 FR 48916 proposed rule, we proposed to revise IPPS/LTCH PPS final rule (79 FR 50122
and 49191). HwHs which are § 412.22(f)(1) and (2) to allow a through 50134). The procedures we
grandfathered are not required to grandfathered children’s HwH to established apply both to teaching
comply with the separateness and increase its number of beds without
control requirements applicable to other hospitals that closed on or after March
resulting in the loss of grandfathered 23, 2008, and on or before August 3,
HwHs. status. Additionally, we solicited
In the FY 2018 IPPS/LTCH PPS final 2010, and to teaching hospitals that
comments on whether the proposal close after August 3, 2010.
rule (82 FR 38292 through 38294), we could create unintended or inadvertent
finalized a change to our HwH consequences. b. Notice of Closure of Hahnemann
regulations at § 412.22(e) to only Comment: We received several University Hospital, Located in
require, as of October 1, 2017, that IPPS- comments on our proposal, all of which Philadelphia, PA, and the Application
excluded HwHs that are co-located with
supported it. Some commenters also Process—Round 16
IPPS hospitals comply with the
agreed with our assessment that
separateness and control requirements CMS has learned of the closure of
allowing grandfathered children’s HwHs
in those regulations. We adopted this Hahnemann University Hospital,
to increase their beds would not impart
change because we believe that the located in Philadelphia, PA (CCN
an economic advantage to these
policy concerns that underlay the 390290). Accordingly, this notice serves
hospitals.
previous HwH regulations are
Response: We thank commenters for to notify the public of the closure of this
sufficiently moderated in situations
their support. teaching hospital and initiate another
where IPPS-excluded hospitals are co-
In light of the comments received, we round of the section 5506 application
located with each other, in large part
are finalizing our proposal without and selection process. This round will
due to changes that have been made to
modification. be the 16th round (‘‘Round 16’’) of the
the way most types of IPPS-excluded
hospitals are paid under Medicare. (We XXII. Notice of Closure of Two application and selection process. Table
note that non-grandfathered HwHs, Teaching Hospitals and Opportunity To 66 below contains the identifying
whether children’s hospitals or not, Apply for Available Slots information and IME and DGME FTE
which are co-located with IPPS resident caps for the closed teaching
hospitals must comply with a. Background hospital, which are part of the Round 16
separateness and control requirements. Section 5506 of the Affordable Care application process under section 5506
For more information we refer readers to Act (Pub. L. 111–148) added subsection of the Affordable Care Act.
c. Notice of Closure of Ohio Valley Wheeling, WV (CCN 510039). application and selection process. Table
Medical Center, Located in Wheeling, Accordingly, this notice serves to notify 67 below contains the identifying
WV, and the Application Process— the public of the closure of this teaching information and IME and DGME FTE
Round 17 hospital and initiate another round of resident caps for the closed teaching
the section 5506 application and hospital, which are part of the Round 17
CMS has learned of the closure of selection process. This round will be the application process under section 5506
Ohio Valley Medical Center, located in 17th round (‘‘Round 17’’) of the of the Affordable Care Act.
d. Application Process for Available mailing address, the hospital is Affordable Care Act. However, we
Resident Slots encouraged to notify the CMS Central review all applications received by the
Office of the mailed application by deadline and notify applicants of our
The application period for hospitals sending an email to: determinations as soon as possible.
to apply for slots under section 5506 of ACA5506application@cms.hhs.gov. In We refer readers to the CMS Direct
the Affordable Care Act is 90 days the email, the hospital should state: ‘‘On Graduate Medical Education (DGME)
following notice to the public of a behalf of [insert hospital name and website at: https://www.cms.gov/
hospital closure (77 FR 53436). Medicare CCN#], I, [insert your name], Medicare/Medicare-Fee-for-Service-
Therefore, hospitals that wish to apply am sending this email to notify CMS Payment/AcuteInpatientPPS/
for and receive slots from the above that I have mailed to CMS a hard copy DGME.html to download a copy of the
hospitals’ FTE resident caps, must of a section 5506 application under section 5506 application form (Section
submit applications (Section 5506 Round [16 or 17] due to the closure of 5506 Application Form) that hospitals
Application Form posted on Direct [Hahnemann University Hospital or must use to apply for slots under section
Graduate Medical Education (DGME) Ohio Valley Medical Center]. If you 5506 of the Affordable Care Act.
website as noted at the end of this have any questions, please contact me at Hospitals should also access this same
section) directly to the CMS Central [insert phone number] or [insert your website for a list of additional section
Office no later than January 30, 2020. email address].’’ An applying hospital 5506 guidelines for the policy and
The mailing address for the CMS should not attach an electronic copy of procedures for applying for slots, and
Central Office is included on the the application to the email. The email the redistribution of the slots under
application form. Applications must be will only serve to notify the CMS sections 1886(h)(4)(H)(vi) and
received by the CMS Central Office by Central Office to expect a hard copy 1886(d)(5)(B)(v) of the Act
the January 30, 2020 deadline date. It is application that is being mailed to the
ER12NO19.113</GPH>
not sufficient for applications to be CMS Central Office. XXIII. Files Available to the Public via
postmarked by this date. We have not established a deadline by the Internet
After an applying hospital sends a when CMS will issue the final The Addenda to the OPPS/ASC
hard copy of a section 5506 slot determinations to hospitals that receive proposed rules and the final rules with
ER12NO19.112</GPH>
application to the CMS Central Office slots under section 5506 of the comment period are published and
available via the internet on the CMS • The accuracy of our estimate of the comment period (83 FR 59156), we
website. In the CY 2019 OPPS/ASC final information collection burden. utilized a median hourly wage of $18.29
rule with comment period (83 FR • The quality, utility, and clarity of per hour. Since then, more recent wage
59154), for CY 2019, we changed the the information to be collected. data have become available and we are
format of the OPPS Addenda A, B, and • Recommendations to minimize the updating the wage rate used in these
C, by adding a column entitled information collection burden on the calculations. The latest data (May 2018)
‘‘Copayment Capped at the Inpatient affected public, including automated from the BLS reflects a median hourly
Deductible of $1,364.00’’ where we flag, collection techniques. wage of $19.40 174 per hour for a
through use of an asterisk, those items In the final rule with comment period, Medical Records and Health
and services with a copayment that is we are soliciting public comment on Information Technician professional.
equal to or greater than the inpatient each of these issues for the following We have finalized a policy to calculate
hospital deductible amount for any sections of this document that contain the cost of overhead, including fringe
given year (the copayment amount for a information collection requirements benefits, at 100 percent of the mean
procedure performed in a year cannot (ICRs). hourly wage (82 FR 59477). This is
exceed the amount of the inpatient necessarily a rough adjustment, both
B. ICRs for the Hospital OQR Program
hospital deductible established under because fringe benefits and overhead
section 1813(b) of the Act for that year). 1. Background costs vary significantly from employer-
For CY 2020, we are retaining these The Hospital OQR Program is to-employer and because methods of
columns, updated to reflect the amount generally aligned with the CMS quality estimating these costs vary widely from
of the 2020 inpatient deductible. reporting program for hospital inpatient study-to-study. Nonetheless, we believe
To view the Addenda to this final rule that doubling the hourly wage rate
services known as the Hospital IQR
with comment period pertaining to CY ($19.40 × 2 = $38.80) to estimate total
Program. We refer readers to the CY
2020 payments under the OPPS, we cost is a reasonably accurate estimation
2011 through CY 2019 OPPS/ASC final
refer readers to the CMS website at: method and allows for a conservative
rules with comment periods (75 FR
http://www.cms.gov/Medicare/ estimate of hourly costs. This approach
72111 through 72114; 76 FR 74549
Medicare-Fee-for-Service-Payment/ is consistent with our previously
through 74554; 77 FR 68527 through
HospitalOutpatientPPS/Hospital- finalized burden calculation
68532; 78 FR 75170 through 75172; 79
Outpatient-Regulations-and- methodology (82 FR 59477).
FR 67012 through 67015; 80 FR 70580
Notices.html; select ‘‘1717–FC’’ from the Accordingly, we calculate cost burden
through 70582; 81 FR 79862 through
list of regulations. All OPPS Addenda to to facilities using a wage plus benefits
79863; 82 FR 59476 through 59479; and estimate of $38.80 per hour throughout
this final rule with comment period are 83 FR 59155 through 59156,
contained in the zipped folder entitled the discussion below for the Hospital
respectively) for detailed discussions of OQR Program.
‘‘2020 NFRM OPPS Addenda’’ at the Hospital OQR Program information
bottom of the page. To view the collection requirements we have 2. Finalized Removal of OP–33 for the
Addenda to this final rule with previously finalized. The information CY 2022 Payment Determination and
comment period pertaining to CY 2020 collection requirements associated with Subsequent Years
payments under the ASC payment the Hospital OQR Program are currently In section XIV.B.3.b. of this final rule
system, we refer readers to the CMS approved under OMB control number with comment period, we are finalizing
website at: http://www.cms.gov/ 0938–1109 which expires on March 31, our proposal with modification to
Medicare/Medicare-Fee-for-Service- 2021. Below we discuss only the remove one measure submitted via a
Payment/ASCPayment/ASC- changes in burden that will result from web-based tool beginning with the CY
Regulations-and-Notices.html; select the finalized policies in this final rule 2022 payment determination and for
‘‘1717–FC’’ from the list of regulations. with comment period. subsequent years: OP–33: External Beam
All ASC Addenda to this final rule with In section XIV.B.3.b. of this final rule Radiotherapy for Bone Metastases. In
comment period are contained in a with comment period, we are finalizing the CY 2020 OPPS/ASC proposed rule,
zipped folder entitled ‘‘Addendum AA, our proposal with modification to we inadvertently stated that we were
BB, DD1, DD2, and EE.’’ remove one measure from the Hospital proposing to remove this measure
XXV. Collection of Information OQR Program for the CY 2022 payment beginning with October 2020 encounters
Requirements determination; OP–33: External Beam for CY 2022 payment determination and
Radiotherapy for Bone Metastases. The subsequent years (84 FR 39554 through
A. Statutory Requirement for reduction in burden associated with this 39556). As discussed in section
Solicitation of Comments measure removal is discussed below. XXVI.B.2. of this final rule with
Under the Paperwork Reduction Act In the CY 2018 OPPS/ASC final rule comment period, we intended to remove
of 1995, we are required to provide 60- with comment period (82 FR 59477), we this measure beginning with the CY
day notice in the Federal Register and finalized a proposal to utilize the 2022 payment determination and
solicit public comment before a median hourly wage rate, in accordance subsequent years, but starting with
collection of information requirement is with the Bureau of Labor Statistics January 2020 encounters, not October.
submitted to the Office of Management (BLS), to calculate our burden estimates Because we are finalizing removal of
and Budget (OMB) for review and for the Hospital OQR Program. The BLS this measure beginning with the same
approval. In order to fairly evaluate describes Medical Records and Health CY 2022 payment determination, as was
whether an information collection Information Technicians as those proposed, the estimated effects remain
should be approved by OMB, section responsible for organizing and managing the same as discussed in the proposed
3506(c)(2)(A) of the Paperwork health information data; therefore, we rule. As we stated in the CY 2016 OPPS/
Reduction Act of 1995 requires that we believe it is reasonable to assume that
solicit comment on the following issues: these individuals will be tasked with 174 Occupational Employment and Wages, May
• The need for the information abstracting clinical data for submission 2018. Available at: https://www.bls.gov/ooh/
healthcare/medical-records-and-health-
collection and its usefulness in carrying for the Hospital OQR Program. In the CY information-technicians.htm. Accessed May 7,
out the proper functions of our agency. 2019 OPPS/ASC final rule with 2019.
ASC final rule with comment period (80 and reports related to the finalized relevant documentation necessary to
FR 70582), we estimate that hospitals ASC–19 measure. show that the service meets applicable
spend approximately 10 minutes, or Medicare coverage, coding, and
D. ICRs for Revision of the Definition of
0.167 hours, per measure to report web- payment rules and that the request be
‘‘Expected Donation Rate’’ for Organ
based measures. Accordingly, we submitted before the service is provided
Procurement Organizations
believe that the removal of OP–33 for to the beneficiary and before the claim
the CY 2022 payment determination We are finalizing our proposal to is submitted for processing. The burden
will reduce burden by 0.167 hours per revise the definition of ‘‘expected associated with this finalized process is
hospital, resulting in a burden reduction donation rate’’ in the OPO CfCs. This the time and effort necessary for the
of 551 hours (0.167 hours × 3,300 change would allow OPOs to receive submitter to locate and obtain the
hospitals) and $21,379 (551 hours × payment for organ donor costs under the relevant supporting documentation to
$38.80) across 3,300 hospitals. Medicare and Medicaid programs using show that the service meets applicable
a definition that is consistent with the coverage, coding, and payment rules,
C. ICRs for the ASCQR Program definition used by the Scientific and to forward the information to CMS
1. Background Registry of Transplant Recipients or its contractor (MAC) for review and
(SRTR). Because we will be using data determination of a provisional
We refer readers to the CY 2012 from the OPTN and the SRTR in
OPPS/ASC final rule with comment affirmation. We expect that this
assessing whether OPOs have satisfied information will generally be
period (76 FR 74554), the FY 2013 IPPS/ the outcome measures of 42 CFR
LTCH PPS final rule (77 FR 53672), and maintained by providers within the
486.318(b), we are adopting the normal course of business and that this
the CY 2013, CY 2014, CY 2015, CY definition currently used by the OPTN
2016, CY 2017, CY 2018, and CY 2019 information will be readily available.
and SRTR in their statistical evaluation We estimate that the average time for
OPPS/ASC final rules with comment of OPO performance. This revision
period (77 FR 68532 through 68533; 78 office clerical activities associated with
would not change the data that are this task will be 30 minutes, which is
FR 75172 through 75174; 79 FR 67015 already collected by the OPTN and
through 67016; 80 FR 70582 through equivalent to that for normal
SRTR, and therefore it will not affect the prepayment or post payment medical
70584; 81 FR 79863 through 79865; 82 information collection burden on OPOs.
FR 59479 through 59481; and 83 FR review. We anticipate that most prior
59156 through 59157, respectively) for E. ICR for Prior Authorization Process authorization requests would be sent by
detailed discussions of the ASCQR and Requirements for Certain Hospital means other than mail. However, we
Program information collection Outpatient Department (OPD) Services estimate a cost of $5 per request for
requirements we have previously In section XX. of the proposed rule, mailing medical records. Due to a July
finalized. The information collection we proposed to establish a prior start date, the first year of the prior
requirements associated with the authorization process for certain authorization will only include 6
ASCQR Program are currently approved hospital outpatient services as a months. Based on calendar year (CY)
under OMB control number 0938–1270 condition for Medicare payment. We 2018 data, we estimate that for those
which expires on January 31, 2022. As proposed to use our authority under first 6 months at a minimum there will
discussed below, there are only nominal section 1833(t)(2)(F) of the Act, which be 15,191 initial requests mailed during
changes in burden that will result from authorizes CMS to develop a method for that timeframe. In addition, we estimate
the finalized policies in this final rule controlling unnecessary increases in the there will be 4,987 resubmissions of a
with comment period. volume of covered OPD services, to request mailed following a non-affirmed
establish the prior authorization decision. Therefore, the total mailing
2. Adoption of ASC–19: Facility-Level process. We believe a prior cost is estimated to be $100,890 (20,178
7–Day Hospital Visits After General authorization process for OPD services mailed requests × $5). Based on CY 2018
Surgery Procedures Performed at will ensure beneficiaries receive data, we estimate that annually at a
Ambulatory Surgical Centers (NQF medically necessary care while minimum there will be 30,381 initial
#3357) minimizing the risk of improper requests mailed during a year. In
In section XV.B.3. of this this final payments without changing the addition, we estimate there will be
rule with comment period, we are documentation requirements for 9,971 resubmissions of a request mailed
finalizing our proposal, beginning with providers and, therefore, will protect the following a non-affirmed decision.
the CY 2024 payment determination and Medicare Trust fund. Therefore, the total mailing cost is
for subsequent years, to adopt one We proposed that providers would be estimated to be $201,762 (40,352 mailed
measure collected via Medicare claims: required to obtain prior authorization requests × $5). We also estimate that an
ASC–19: Facility-Level 7–Day Hospital from CMS for five groups of services additional 3 hours would be required
Visits after General Surgery Procedures and their related services before the for attending educational meetings and
Performed at Ambulatory Surgical services are provided to Medicare reviewing training documents. While
Centers (NQF #3357). Data used to beneficiaries and before the provider there may be an associated burden on
calculate scores for this measure are could submit claims for payment under beneficiaries while they wait for the
collected via Medicare Part A and Part Medicare for these services. The five prior authorization decision, we are
B administrative claims and Medicare groups of services proposed are: unable to quantify that burden.
enrollment data; therefore, ASCs will Blepharoplasty, Botulinum Toxin The average labor costs (including 100
not be required to report any additional Injections, Panniculectomy, percent fringe benefits) used to estimate
data. Because this measure does not Rhinoplasty, and Vein Ablation. The the costs were calculated using data
require ASCs to submit any additional ICRs associated with prior authorization available from the BLS. Based on the
data, we believe there will be only a requests for these covered outpatient BLS information, we estimate an
nominal change in other costs department services would be the average hourly rate of $16.63 with a
experienced by ASCs associated with required documentation submitted by loaded rate of $33.26. The prior
this measure adoption due to having to providers. We proposed that a prior authorization program does not create
review and track confidential feedback authorization request must include all any new documentation or
administrative requirements. Instead, it individually. We will consider all completing the transition of paying the
just requires the currently required comments we receive by the date and PFS-equivalent amount for clinic visits
documents to be submitted earlier in the time specified in the DATES section of furnished in excepted off-campus PBDs.
claim process. Therefore, the estimate this final rule with comment period, In other words, these excepted off-
uses the clerical rate as we do not and, when we proceed with a campus PBDs will be paid the full
believe that clinical staff would need to subsequent document(s), we will reduced payment, or 40 percent of the
spend more time on completing the respond to those comments in the OPPS rate for the clinic visit service in
documentation than would be needed in preamble to that document. CY 2020. We acknowledge that the
the absence of the demonstration. The United States District Court for the
hourly rate reflects the time needed for XXVI. Economic Analyses District of Columbia vacated the volume
the additional clerical work of A. Statement of Need control policy for CY 2019 and we are
submitting the prior authorization This final rule with comment period working to ensure affected 2019 claims
request itself. Therefore, we estimate is necessary to make updates to the for clinic visits are paid consistent with
that the total burden for the first year (6 Medicare hospital OPPS rates. It is the court’s order. We do not believe it
months), allotted across all providers, necessary to make changes to the is appropriate at this time to make a
would be 50,826 hours (.5 hours × payment policies and rates for change to the second year of the two-
67,260, submissions plus 3 hours × outpatient services furnished by year phase-in of the clinic visit policy.
5,732 providers for education). The The government has appeal rights, and
hospitals and CMHCs in CY 2020. We
burden cost for the first year (6 months) is still evaluating the rulings and
are required under section
is $1,791,363 (50,826 hours × $33.26 considering, at the time of this writing,
1833(t)(3)(C)(ii) of the Act to update
plus $100,890 for mailing costs). In whether to appeal from the final
annually the OPPS conversion factor
addition, we estimate that the total judgment.
used to determine the payment rates for This final rule with comment period
annual burden hours, allotted across all
APCs. We also are required under also is necessary to make updates to the
providers, would be 84,450 hours (.5
section 1833(t)(9)(A) of the Act to
hours × 134,508 submissions plus 3 ASC payment rates for CY 2020,
review, not less often than annually,
hours × 5,732 providers for education). enabling CMS to make changes to
and revise the groups, the relative payment policies and payment rates for
The annual burden cost would be
payment weights, and the wage and
$3,010,569 (84,450 hours × $33.26 plus covered surgical procedures and
$201,762 for mailing costs). For the total other adjustments described in section covered ancillary services that are
burden and associated costs, we 1833(t)(2) of the Act. We must review performed in an ASC in CY 2020.
estimate the annualized burden to be the clinical integrity of payment groups Because ASC payment rates are based
73,242 hours and $2,604,167 million. and relative payment weights at least on the OPPS relative payment weights
The annualized burden is based on an annually. We are revising the APC for most of the procedures performed in
average of 3 years, that is, 1 year at the relative payment weights using claims ASCs, the ASC payment rates are
6-month burden and 2 years at the 12- data for services furnished on and after updated annually to reflect annual
month burden. The information January 1, 2018, through and including changes to the OPPS relative payment
collection request is under development December 31, 2018, and processed weights. In addition, we are required
and will be submitted to OMB for through June 30, 2019, and updated cost under section 1833(i)(1) of the Act to
approval. report information. review and update the list of surgical
We note that we are completing the procedures that can be performed in an
F. Revision to Laboratory Date of Service phase-in of our method, as described ASC, not less frequently than every 2
(DOS) Policy below, to control unnecessary increases years.
In section XIX. of this final rule with in the volume of covered outpatient In the CY 2019 OPPS/ASC final rule
comment period, we discuss our department services by paying for clinic with comment period (83 FR 59075
comment solicitation regarding visits furnished at off-campus PBDs at through 59079), we finalized a policy to
potential revisions to the laboratory date an amount equal to the site-specific PFS update the ASC payment system rates
of service (DOS) provisions at payment rate for nonexcepted items and using the hospital market basket update
§ 414.510(b)(5) for a molecular services furnished by a nonexcepted off- instead of the CPI–U for CY 2019
pathology test or a test designated by campus PBD (the PFS payment rate). through 2023. We believe that this
CMS as an ADLT under paragraph (1) of The site-specific PFS payment rate for policy will help stabilize the differential
the definition of an ‘‘advanced clinic visits furnished in excepted off- between OPPS payments and ASC
diagnostic laboratory test’’ in § 414.502. campus PBDs is the OPPS rate reduced payments, given that the CPI–U has
As a result of our evaluation of public to the amount paid for clinic visits been generally lower than the hospital
comments, we are finalizing a revision furnished by nonexcepted off-campus market basket, and encourage the
to exclude blood banks or centers from PBDs under the PFS, which is 40 migration of services to lower cost
the laboratory DOS policy exception at percent of the OPPS rate. In the CY 2019 settings as clinically appropriate.
§ 414.510(b)(5). This revision to our OPPS/ASC final rule with comment
period (83 FR 59013 through 59014), we B. Overall Impact for Provisions of This
laboratory DOS policy does not impose
implemented this policy with a 2-year Final Rule With Comment Period
any information collection
requirements. Consequently, review by phase-in. In CY 2019, the payment We have examined the impacts of this
the Office of Management and Budget reduction was transitioned by applying final rule with comment period, as
under the authority of the PRA is not 50 percent of the total reduction in required by Executive Order 12866 on
required. payment that would apply if these off- Regulatory Planning and Review
campus PBDs were paid the site-specific (September 30, 1993), Executive Order
XXV. Response to Comments PFS payment rate for the clinic visit 13563 on Improving Regulation and
Because of the large number of public service. In other words, these excepted Regulatory Review (January 18, 2011),
comments we normally receive on off-campus PBDs were paid 70 percent the Regulatory Flexibility Act (RFA)
Federal Register documents, we are not of the OPPS rate for the clinic visit (September 19, 1980, Pub. L. 96–354),
able to acknowledge or respond to them service in CY 2019. In CY 2020, we are section 1102(b) of the Social Security
Act, section 202 of the Unfunded at a rate that will be 40 percent of the changes in estimated total outlier
Mandates Reform Act of 1995 (UMRA) OPPS rate for a clinic visit service. payments, pass-through payments, the
(March 22, 1995, Pub. L. 104–4), Because the provisions of the OPPS are application of the frontier State wage
Executive Order 13132 on Federalism part of a final rule that is economically adjustment, and the completion of the
(August 4, 1999), the Congressional significant, as measured by the phase-in to control unnecessary
Review Act (5 U.S.C. 804(2)), and threshold of an additional $100 million increases in the volume of outpatient
Executive Order 13771 on Reducing in expenditures in 1 year, we have services as described in section X.D. of
Regulation and Controlling Regulatory prepared this regulatory impact analysis this final rule with comment period, in
Costs (January 30, 2017). This section of that, to the best of our ability, presents addition to the application of the OPD
this final rule with comment period its costs and benefits. Table 68 of this fee schedule increase factor after all
contains the impact and other economic final rule with comment period displays adjustments required by sections
analyses for the provisions we are the distributional impact of the CY 2020 1833(t)(3)(F), 1833(t)(3)(G), and
finalizing for CY 2020. changes in OPPS payment to various 1833(t)(17) of the Act, will increase total
Executive Orders 12866 and 13563 groups of hospitals and for CMHCs. estimated OPPS payments by 1.3
direct agencies to assess all costs and As noted in section V.B.5 of this final percent.
benefits of available regulatory rule with comment period, we are We estimate the total increase (from
alternatives and, if regulation is finalizing our proposal for CY 2020 to changes to the ASC provisions in this
necessary, to select regulatory pay for separately payable drugs and final rule with comment period as well
approaches that maximize net benefits biological products that do not have as from enrollment, utilization, and
(including potential economic, pass-through payment status and are not case-mix changes) in Medicare
environmental, public health and safety acquired under the 340B program at expenditures (not including beneficiary
effects, distributive impacts, and WAC+3 percent instead of WAC+6 cost-sharing) under the ASC payment
equity). Executive Order 13563 percent, if ASP data are unavailable for system for CY 2020 compared to CY
emphasizes the importance of payment purposes. If WAC data are not 2019, to be approximately $180 million.
quantifying both costs and benefits, of available for a drug or biological Because the provisions for the ASC
reducing costs, of harmonizing rules, product, we will continue our policy to payment system are part of a final rule
and of promoting flexibility. This final pay separately payable drugs and that is economically significant, as
rule with comment period has been biological products at 95 percent of the measured by the $100 million threshold,
designated as an economically AWP. We note that under our CY 2020 we have prepared a regulatory impact
significant rule under section 3(f)(1) of policy, drugs and biologicals that are analysis of the changes to the ASC
Executive Order 12866 and a major rule acquired under the 340B Program would payment system that, to the best of our
under the Congressional Review Act. continue to be paid at ASP minus 22.5 ability, presents the costs and benefits of
Accordingly, this final rule with percent, WAC minus 22.5 percent, or this portion of this final rule with
comment period has been reviewed by 69.46 percent of AWP, as applicable. comment period. Tables 42 and 43 of
the Office of Management and Budget. We note that in the impact tables as this final rule with comment period
We have prepared a regulatory impact displayed in this impact analysis, we display the redistributive impact of the
analysis that, to the best of our ability, have modeled current and prospective CY 2020 changes regarding ASC
presents the costs and benefits of the payments as if separately payable drugs payments, grouped by specialty area
provisions of this final rule with acquired under the 340B program from and then grouped by procedures with
comment period. In the CY 2020 OPPS/ hospitals not excepted from the policy the greatest ASC expenditures,
ASC proposed rule (84 FR 39398), we are paid in CY 2020 under the OPPS at respectively.
solicited public comments on the ASP–22.5 percent.
We estimate that the update to the C. Detailed Economic Analyses
regulatory impact analysis in the
proposed rule, and we address any conversion factor and other adjustments 1. Estimated Effects of OPPS Changes in
public comments we received in this (not including the effects of outlier This Final Rule With Comment Period
final rule with comment period, as payments, the pass-through payment
a. Limitations of Our Analysis
appropriate. estimates, the application of the frontier
We estimate that the total increase in State wage adjustment for CY 2020, and The distributional impacts presented
Federal Government expenditures under the completion of the phase-in to here are the projected effects of the CY
the OPPS for CY 2020, compared to CY control for unnecessary increases in the 2020 policy changes on various hospital
2019, due only to the changes to the volume of covered outpatient groups. We post on the CMS website our
OPPS in this final rule with comment department services described in hospital-specific estimated payments for
period, will be approximately $1.21 section X.D. of this final rule with CY 2020 with the other supporting
billion. Taking into account our comment period) will increase total documentation for this final rule with
estimated changes in enrollment, OPPS payments by 1.3 percent in CY comment period. To view the hospital-
utilization, and case-mix for CY 2020, 2020. The changes to the APC relative specific estimates, we refer readers to
we estimate that the OPPS expenditures, payment weights, the changes to the the CMS website at: http://
including beneficiary cost-sharing, for wage indexes, the continuation of a www.cms.gov/Medicare/Medicare-Fee-
CY 2020 will be approximately $79.0 payment adjustment for rural SCHs, for-Service-Payment/HospitalOutpatient
billion, which is approximately $6.3 including EACHs, and the payment PPS/index.html. At the website, select
billion higher than estimated OPPS adjustment for cancer hospitals will not ‘‘regulations and notices’’ from the left
expenditures in CY 2019. We note that increase OPPS payments because these side of the page and then select ‘‘CMS–
these spending estimates include the CY changes to the OPPS are budget neutral. 1717–FC’’ from the list of regulations
2020 completion of the phase-in, However, these updates will change the and notices. The hospital-specific file
finalized in CY 2019, to control for distribution of payments within the layout and the hospital-specific file are
unnecessary increases in the volume of budget neutral system. We estimate that listed with the other supporting
covered outpatient department services the total change in payments between documentation for this final rule with
by paying for clinic visits furnished at CY 2019 and CY 2020, considering all comment period. We show hospital-
excepted off-campus PBDs in CY 2020 budget neutral payment adjustments, specific data only for hospitals whose
claims were used for modeling the modifier indicates that such claims were of the impact table, which estimates the
impacts shown in Table 41. We do not billed for services furnished by an off- change in payments to all facilities, has
show hospital-specific impacts for campus department of a hospital paid always included cancer and children’s
hospitals whose claims we were unable under the OPPS. Next, we excluded hospitals, which are held harmless to
to use. We refer readers to section II.A. those that were billed as a component their pre-BBA amount. We also include
of this final rule with comment period of C–APC 8011 (Comprehensive CMHCs in the first line that includes all
for a discussion of the hospitals whose Observation Services) or packaged into providers. We include a second line for
claims we do not use for ratesetting and another C–APC because, in those all hospitals, excluding permanently
impact purposes. instances, OPPS payment is made for a held harmless hospitals and CMHCs.
We estimate the effects of the broader package of services. We then We present separate impacts for
individual policy changes by estimating simulated payment for the remaining CMHCs in Table 41, and we discuss
payments per service, while holding all claim lines as if they were paid at the them separately below, because CMHCs
other payment policies constant. We use PFS-equivalent rate. An estimate of the are paid only for partial hospitalization
the best data available, but do not policy that includes the effects of services under the OPPS and are a
attempt to predict behavioral responses estimated changes in enrollment, different provider type from hospitals.
to our policy changes in order to isolate utilization, and case-mix based on the In CY 2020, we are finalizing our
the effects associated with specific FY 2020 Midsession Review proposal to pay CMHCs for partial
policies or updates, but any policy that approximates the estimated decrease in hospitalization services under APC 5853
changes payment could have a total payment under the OPPS at $800 (Partial Hospitalization for CMHCs), and
behavioral response. In addition, we million, with Medicare OPPS payments finalizing our proposal to pay hospitals
have not made adjustments for future decreasing by $640 million and for partial hospitalization services under
changes in variables, such as service beneficiary copayments decreasing by APC 5863 (Partial Hospitalization for
volume, service-mix, or number of $160 million. We note that the Hospital-Based PHPs).
encounters. additional impact specifically as a result The estimated increase in the total
of completing the phase-in in CY 2020, payments made under the OPPS is
b. Estimated Effects of the CY 2020 determined largely by the increase to
Completion of Phase-in to Control for is $400 million, with Medicare
payments decreasing by $320 million the conversion factor under the
Unnecessary Increases in the Volume of statutory methodology. The
Outpatient Services and beneficiary copayments decreasing
by $80 million. This estimate is utilized distributional impacts presented do not
In section X.D. of this final rule with for the accounting statement displayed include assumptions about changes in
comment period, we discuss the CY in Table 42 of this final rule with volume and service-mix. The
2020 completion of the phase-in of our comment period because the impact of conversion factor is updated annually
CY 2019 finalized method to control for this CY 2020 policy, which is not by the OPD fee schedule increase factor,
unnecessary increases in the volume of budget neutral, is combined with the as discussed in detail in section II.B. of
outpatient department services by impact of the OPD update, which is also this final rule with comment period.
paying for clinic visits furnished at an not budget neutral, to estimate changes Section 1833(t)(3)(C)(iv) of the Act
off-campus PBD at an amount equal to in Medicare spending under the OPPS provides that the OPD fee schedule
the site-specific PFS payment rate for as a result of the changes in this final increase factor is equal to the market
nonexcepted items and services rule with comment period. basket percentage increase applicable
furnished by a nonexcepted off-campus We note that our estimates may differ under section 1886(b)(3)(B)(iii) of the
PBD (the PFS payment rate). from the actual effect of the proposed Act, which we refer to as the IPPS
Specifically, in the CY 2019 OPPS/ASC policy due to offsetting factors, such as market basket percentage increase. The
final rule with comment period (83 FR changes in provider behavior. We note IPPS market basket percentage increase
59013 through 59014), we finalized our that, by removing this payment for FY 2020 is 3.0 percent. Section
proposal to pay for HCPCS code G0463 differential that may influence site-of- 1833(t)(3)(F)(i) of the Act reduces that
(Hospital outpatient clinic visit for service decision-making, we anticipate 3.0 percent by the multifactor
assessment and management of a an associated decrease in the volume of productivity adjustment described in
patient) when billed with modifier clinic visits provided in the excepted section 1886(b)(3)(B)(xi)(II) of the Act,
‘‘PO’’ at an amount equal to the site- off-campus PBD setting. In the proposed which is 0.4 percentage point for FY
specific PFS payment rate for rule, we reminded readers that this 2020 (which is also the MFP adjustment
nonexcepted items and services estimate could change in the final rule for FY 2020 in the FY 2020 IPPS/LTCH
furnished by a nonexcepted off-campus with comment period based on factors PPS final rule (84 FR 19411)), resulting
PBD (the PFS payment rate), with a 2- such as the availability of updated data. in the OPD fee schedule increase factor
year transition period. For a discussion Finally, we acknowledge that the United of 2.6 percent. We are using the OPD fee
of the PFS payment amount for States District Court for the District of schedule increase factor of 2.6 percent
outpatient clinic visits furnished at Columbia vacated the volume control in the calculation of the CY 2020 OPPS
nonexcepted off-campus PBDs, we refer policy for CY 2019 and we are working conversion factor. Section 10324 of the
readers to the CY 2018 PFS final rule to ensure affected 2019 claims for clinic Affordable Care Act, as amended by
with comment period discussion (82 FR visits are paid consistent with the HCERA, further authorized additional
53023 through 53024), as well as the CY court’s order. Our estimates may differ expenditures outside budget neutrality
2019 PFS final rule and the CY 2020 from the actual effect of this policy for hospitals in certain frontier States
PFS proposed rule. depending on the outcome of this that have a wage index less than 1.0000.
To develop an estimated impact of litigation. The amounts attributable to this frontier
this policy, we began with CY 2018 State wage index adjustment are
outpatient claims data used in c. Estimated Effects of OPPS Changes on incorporated in the CY 2020 estimates
ratesetting for the CY 2020 OPPS. We Hospitals in Table 41 of this final rule with
then flagged all claim lines for HCPCS Table 41 shows the estimated impact comment period.
code G0463 that contained modifier of this final rule with comment period To illustrate the impact of the CY
‘‘PO’’ because the presence of this on hospitals. Historically, the first line 2020 changes, our analysis begins with
a baseline simulation model that uses Column 1: Total Number of Hospitals Column 3: Wage Indexes and the Effect
the CY 2019 relative payment weights, of the Provider Adjustments
the FY 2019 final IPPS wage indexes The first line in Column 1 in Table 41
shows the total number of facilities Column 3 demonstrates the combined
that include reclassifications, and the budget neutral impact of the APC
final CY 2019 conversion factor. Table (3,732), including designated cancer and
children’s hospitals and CMHCs, for recalibration; the updates for the wage
41 shows the estimated redistribution of indexes with the FY 2020 IPPS post-
the increase or decrease in payments for which we were able to use CY 2018
hospital outpatient and CMHC claims reclassification wage indexes; the rural
CY 2020 over CY 2019 payments to adjustment; the frontier adjustment, and
hospitals and CMHCs as a result of the data to model CY 2019 and CY 2020
payments, by classes of hospitals, for the cancer hospital payment adjustment.
following factors: the impact of the APC We modeled the independent effect of
reconfiguration and recalibration CMHCs and for dedicated cancer
hospitals. We excluded all hospitals and the budget neutrality adjustments and
changes between CY 2019 and CY 2020
the OPD fee schedule increase factor by
(Column 2); the wage indexes and the CMHCs for which we could not
using the relative payment weights and
provider adjustments (Column 3); the plausibly estimate CY 2019 or CY 2020
wage indexes for each year, and using
combined impact of all of the changes payment and entities that are not paid
a CY 2019 conversion factor that
described in the preceding columns under the OPPS. The latter entities
included the OPD fee schedule increase
plus the 2.6 percent OPD fee schedule include CAHs, all-inclusive hospitals,
and a budget neutrality adjustment for
increase factor update to the conversion and hospitals located in Guam, the U.S.
differences in wage indexes.
factor (Column 4); the finalized off- Virgin Islands, Northern Mariana
Column 3 reflects the independent
campus PBD clinic visits payment Islands, American Samoa, and the State effects of the proposed updated wage
policy (Column 5), and the estimated of Maryland. This process is discussed indexes, including the application of
impact taking into account all payments in greater detail in section II.A. of this budget neutrality for the rural floor
for CY 2020 relative to all payments for final rule with comment period. At this
CY 2019, including the impact of policy on a nationwide basis, as well as
time, we are unable to calculate a DSH the CY 2020 proposed changes in wage
changes in estimated outlier payments, variable for hospitals that are not also
and changes to the pass-through index policy discussed in section II.C. of
paid under the IPPS because DSH the CY 2020 OPPS/ASC proposed rule.
payment estimate (Column 6). payments are only made to hospitals
We did not model an explicit budget We did not model a budget neutrality
paid under the IPPS. Hospitals for adjustment for the rural adjustment for
neutrality adjustment for the rural which we do not have a DSH variable
adjustment for SCHs because we are SCHs because we are continuing the
are grouped separately and generally rural payment adjustment of 7.1 percent
maintaining the current adjustment include freestanding psychiatric
percentage for CY 2020. Because the to rural SCHs for CY 2020, as described
hospitals, rehabilitation hospitals, and in section II.E. of this final rule with
updates to the conversion factor long-term care hospitals. We show the
(including the update of the OPD fee comment period. We also modeled a
total number of OPPS hospitals (3,625), budget neutrality adjustment for the
schedule increase factor), the estimated excluding the hold-harmless cancer and
cost of the rural adjustment, and the cancer hospital payment adjustment
children’s hospitals and CMHCs, on the because we are using a payment-to-cost
estimated cost of projected pass-through second line of the table. We excluded
payment for CY 2020 are applied ratio target for the cancer hospital
cancer and children’s hospitals because payment adjustment in CY 2020 of .90,
uniformly across services, observed section 1833(t)(7)(D) of the Act
redistributions of payments in the which is higher than the ratio that was
permanently holds harmless cancer reported for the CY 2019 OPPS/ASC
impact table for hospitals largely hospitals and children’s hospitals to
depend on the mix of services furnished final rule with comment period (83 FR
their ‘‘pre-BBA amount’’ as specified 58873). We note that, in accordance
by a hospital (for example, how the under the terms of the statute, and
APCs for the hospital’s most frequently with section 16002 of the 21st Century
therefore, we removed them from our Cures Act, we are applying a budget
furnished services will change), and the impact analyses. We show the isolated
impact of the wage index changes on the neutrality factor calculated as if the
impact on the 41 CMHCs at the bottom cancer hospital adjustment target
hospital. However, total payments made of the impact table (Table 41) and
under this system and the extent to payment-to-cost ratio was 0.90, not the
discuss that impact separately below. 0.89 target payment-to-cost ratio we are
which this final rule with comment
period will redistribute money during Column 2: APC Recalibration—All applying in section II.F. of this final rule
implementation also will depend on Changes with comment period.
changes in volume, practice patterns, We modeled the independent effect of
and the mix of services billed between Column 2 shows the estimated effect updating the wage indexes by varying
CY 2019 and CY 2020 by various groups of APC recalibration. Column 2 also only the wage indexes, holding APC
of hospitals, which CMS cannot reflects any changes in multiple relative payment weights, service-mix,
forecast. procedure discount patterns or and the rural adjustment constant and
Overall, we estimate that the rates for conditional packaging that occur as a using the CY 2020 scaled weights and
CY 2020 will increase Medicare OPPS result of the changes in the relative a CY 2019 conversion factor that
payments by an estimated 1.3 percent. magnitude of payment weights. As a included a budget neutrality adjustment
Removing payments to cancer and result of APC recalibration, we estimate for the effect of the changes to the wage
children’s hospitals because their that urban hospitals will experience a indexes between CY 2019 and CY 2020.
payments are held harmless to the pre- 0.1 percent increase, with the impact
OPPS ratio between payment and cost ranging from a decrease of 0.1 percent Column 4: All Budget Neutrality
and removing payments to CMHCs to an increase of 0.4 depending on the Changes Combined With the Market
results in an estimated 1.3 percent number of beds. Rural hospitals will Basket Update
increase in Medicare payments to all experience a decrease of up to 0.9 Column 4 demonstrates the combined
other hospitals. These estimated percent depending on the number of impact of all of the changes previously
payments will not significantly impact beds. Major teaching hospitals will described and the update to the
other providers. experience no change. conversion factor of 2.6 percent.
Overall, these changes will increase hospitals in our impact model that changes in cost and charge inflation
payments to urban hospitals by 2.7 failed to meet the reporting between CY 2018 and CY 2020, to
percent and to rural hospitals by 2.8 requirements (discussed in section XIV. model the final CY 2020 outliers at 1.0
percent. The increase for classes of rural of this final rule with comment period); percent of estimated total payments
hospitals will vary with sole community and the difference in total OPPS using a multiple threshold of 1.75 and
hospitals receiving a 2.8 percent payments dedicated to transitional pass- a fixed-dollar threshold of $5,075. The
increase and other rural hospitals through payments. charge inflation and CCR inflation
receiving an increase of 2.7 percent. Of those hospitals that failed to meet factors are discussed in detail in the FY
the Hospital OQR Program reporting 2020 IPPS/LTCH PPS proposed rule (84
Column 5: Off-Campus PBD Visits requirements for the full CY 2019 FR 42629).
Payment Policy update (and assumed, for modeling Overall, we estimate that facilities
Column 5 displays the estimated purposes, to be the same number for CY will experience an increase of 1.3
effect of our finalized CY 2020 volume 2020), we included 24 hospitals in our percent under this final rule with
control method, finalized in CY 2019, to model because they had both CY 2018 comment period in CY 2020 relative to
pay for clinic visit HCPCS code G0463 claims data and recent cost report data. total spending in CY 2019. This
(Hospital outpatient clinic visit for We estimate that the cumulative effect projected increase (shown in Column 6)
assessment and management of a of all changes for CY 2020 will increase of Table 68 reflects the 2.6 percent OPD
patient) when billed with modifier payments to all facilities by 1.3 percent fee schedule increase factor, minus 0.6
‘‘PO’’ by an excepted off-campus PBD at for CY 2020. We modeled the percent for the off-campus PBD visits
a rate that will be 40 percent of the independent effect of all changes in
policy, minus 0.74 percent for the
OPPS rate for a clinic visit service for Column 6 using the final relative
change in the pass-through payment
CY 2020. We note that the numbers payment weights for CY 2019 and the
estimate between CY 2019 and CY 2020,
provided in this column isolate the relative payment weights for CY 2020.
plus no difference in estimated outlier
estimated effect of this policy We used the final conversion factor for
payments between CY 2019 (1.00
adjustment relative to the numerator of CY 2019 of $79.490 and the final CY
percent) and CY 2020 (1.00 percent). We
Column 4. Therefore, the numbers 2020 conversion factor of $80.784
estimate that the combined effect of all
reported in Column 5 show how much discussed in section II.B. of this final
final changes for CY 2020 will increase
of the difference between the estimates rule with comment period.
Column 6 contains simulated outlier payments to urban hospitals by 1.3
in Column 4 and the estimates in percent. Overall, we estimate that rural
Column 6 are a result of the finalized payments for each year. We used the 1-
year charge inflation factor used in the hospitals will experience a 1.1 percent
off-campus PBD visits policy for CY increase as a result of the combined
2020, as finalized in the CY 2019 OPPS/ FY 2020 IPPS/LTCH PPS final rule (84
FR 42629) of 5.4 percent (1.05404) to effects of all the changes for CY 2020.
ASC final rule with comment period (83
FR 59013 through 59014). increase individual costs on the CY Among hospitals, by teaching status,
2018 claims, and we used the most we estimate that the impacts resulting
Column 6: All Changes for CY 2020 recent overall CCR in the July 2019 from the combined effects of all changes
Column 6 depicts the full impact of Outpatient Provider-Specific File will include an increase of 0.9 percent
the CY 2020 policies on each hospital (OPSF) to estimate outlier payments for for major teaching hospitals and an
group by including the effect of all CY 2019. Using the CY 2018 claims and increase of 1.5 percent for nonteaching
changes for CY 2020 and comparing a 5.4 percent charge inflation factor, we hospitals. Minor teaching hospitals will
them to all estimated payments in CY currently estimate that outlier payments experience an estimated increase of 1.3
2019. Column 6 shows the combined for CY 2019, using a multiple threshold percent.
budget neutral effects of Columns 2 of 1.75 and a fixed-dollar threshold of In our analysis, we also have
through 3; the OPD fee schedule $4,825, will be approximately 1.0 categorized hospitals by type of
increase; the effect of the CY 2020 off- percent of total payments. The ownership. Based on this analysis, we
campus PBD visits policy finalized in estimated current outlier payments of estimate that voluntary hospitals will
CY 2019, the impact of estimated OPPS 1.0 percent are incorporated in the experience an increase of 1.1 percent,
outlier payments, as discussed in comparison in Column 6. We used the proprietary hospitals will experience an
section II.G. of this final rule with same set of claims and a charge inflation increase of 2.1 percent, and
comment period; the change in the factor of 11.1 percent (1.11100) and the governmental hospitals will experience
Hospital OQR Program payment CCRs in the July 2019 OPSF, with an an increase of 1.3 percent.
reduction for the small number of adjustment of 0.97615, to reflect relative BILLING CODE 4120–01–P
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BILLING CODE 4120–01–C more qualifying services are provided to wage index values will result in an
d. Estimated Effects of OPPS Changes on the beneficiary. We estimate that increase of 0.5 percent to CMHCs.
CMHCs CMHCs will experience an overall 3.7 Column 4 shows that combining this
percent increase in payments from CY proposed OPD fee schedule increase
The last line of Table 68 demonstrates 2019 (shown in Column 6). We note that factor, along with final changes in APC
the isolated impact on CMHCs, which this includes the trimming methodology policy for CY 2020 and the final FY
furnish only partial hospitalization as well as the final CY 2020 floor on 2020 wage index updates, will result in
services under the OPPS. In CY 2019, geometric mean costs used for an estimated increase of 4.5 percent.
CMHCs are paid under APC 5853 developing the PHP payment rates Column 5 shows that the off-campus
(Partial Hospitalization (3 or more described in section VIII.B. of this final PBD clinic visits payment policy has no
services) for CMHCs). We modeled the rule. The CY 2020 proposal to establish estimated effect on CMHCs. Column 6
impact of this APC policy assuming a floor based on geometric mean costs,
shows that adding the final changes in
CMHCs will continue to provide the rather than based on a predetermined
same number of days of PHP care as outlier and pass-through payments will
payment rate, makes the OPPS budget
seen in the CY 2018 claims used for result in a total 3.7 percent increase in
neutrality adjustments for both the
ratesetting in the proposed rule. We weight scaler and the conversion factor payment for CMHCs. This reflects all
excluded days with 1 or 2 services applicable. final changes for CMHCs for CY 2020.
because our policy only pays a per diem Column 3 shows that the estimated
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rate for partial hospitalization when 3 or impact of adopting the final FY 2020
e. Estimated Effect of OPPS Changes on will be from the Federal Government management drugs that function as
Beneficiaries and $35 million will be from State surgical supplies.
governmenwe dis. Alternative OPPS • Alternatives Considered for the
For services for which the beneficiary
Policies Considered Proposed Changes in the Level of
pays a copayment of 20 percent of the
Alternatives to the OPPS changes we Supervision of Outpatient Therapeutic
payment rate, the beneficiary’s payment
proposed and the reasons for our Services in Hospitals and Critical
will increase for services for which the
selected alternatives are discussed Access Hospitals (CAHs)
OPPS payments will rise and will We refer readers to section X.A. of the
throughout the final rule.
decrease for services for which the • Alternatives Considered for the proposed rule for a discussion of our
OPPS payments will fall. For further Methodology for Assigning Skin proposal to change the minimum
discussion on the calculation of the Substitutes to High or Low Cost Groups required default level of supervision
national unadjusted copayments and We refer readers to section V.B.7. of from direct supervision to general
minimum unadjusted copayments, we the CY 2020 OPPS/ASC proposed rule supervision for all hospital outpatient
refer readers to section II.I. of the CY for a discussion of our policy to assign therapeutic services provided by all
2020 OPPS/ASC proposed rule. In all any skin substitute product that was hospitals and CAHs. We also
cases, section 1833(t)(8)(C)(i) of the Act assigned to the high cost group in CY considered, but did not propose,
limits beneficiary liability for 2019 to the high cost group in CY 2020, reevaluation of the level of physician
copayment for a procedure performed in regardless of whether the product’s supervision for cardiac rehabilitation
a year to the hospital inpatient mean unit cost (MUC) or the product’s services to determine whether we
deductible for the applicable year. per day cost (PDC) exceeds or falls should propose to change the
We estimate that the aggregate below the overall CY 2020 MUC or PDC supervision level from direct
beneficiary coinsurance percentage will threshold. We will continue to assign supervision to general supervision.
be 18.1 percent for all services paid products that exceed either the overall Under this alternative, direct
under the OPPS in CY 2020. The CY 2020 MUC or PDC threshold to the supervision would have remained the
estimated aggregate beneficiary high cost group. We also considered, but minimum required default level for
coinsurance reflects general system are not proposing, reinstating our most hospital outpatient therapeutic
adjustments, including the final CY methodology from CY 2017 and services with the exception of those
2020 comprehensive APC payment assigning skin substitutes to the high services that have been evaluated by the
policy discussed in section II.A.2.b. of cost group based on whether an HOP Panel and received a change in
this final rule. individual product’s MUC or PDC supervision level based on those
f. Estimated Effects of OPPS Changes on exceeded the overall CY 2020 MUC or recommendations.
Other Providers PDC threshold based on calculations
done for either the proposed rule or the 2. Estimated Effects of CY 2020 ASC
The relative payment weights and final rule with comment period. Payment System Changes
payment amounts established under the • Alternatives Considered for the Most ASC payment rates are
OPPS affect the payments made to Methodology for Payment for Non- calculated by multiplying the ASC
ASCs, as discussed in section XIII of the Opioid Pain Management Treatments conversion factor by the ASC relative
final rule. No types of providers or We refer readers to sections II.A.3.b. payment weight. As discussed fully in
suppliers other than hospitals, CMHCs, and XIII.D.3. of the CY 2020 OPPS/ASC section XIII of this final rule with
and ASCs will be affected by the final proposed rule (84 FR 39425 for a comment period, we are setting the CY
changes in the final rule. discussion of our packaging policy for 2020 ASC relative payment weights by
certain drugs when administered in the scaling the proposed CY 2020 OPPS
g. Estimated Effects of OPPS Changes on ASC setting and policy of providing relative payment weights by the
the Medicare and Medicaid Programs separate payment for non-opioid pain proposed ASC scalar of 0.8550. The
The effect on the Medicare program is management drugs that function as a estimated effects of the proposed
expected to be an increase of $1.21 supply when used in a surgical updated relative payment weights on
billion in program payments for OPPS procedure when the procedure is payment rates are varied and are
services furnished in CY 2020. The performed in an ASC. In those sections reflected in the estimated payments
effect on the Medicaid program is of the CY 2020 OPPS/ASC proposed displayed in Tables 39 and 40 below.
expected to be limited to copayments rule, we discuss our proposal to Beginning in CY 2011, section 3401 of
that Medicaid may make on behalf of continue paying separately at ASP+6 the Affordable Care Act requires that the
Medicaid recipients who are also percent for the cost of non-opioid pain annual update to the ASC payment
Medicare beneficiaries. We estimate that management drugs that function as system (which we proposed will be the
the final changes in the final rule will surgical supplies in the performance of hospital market basket for CY 2020)
increase these Medicaid beneficiary surgical procedures when they are after application of any quality reporting
payments by approximately $45 million furnished in the ASC setting and reduction be reduced by a productivity
in CY 2020. Currently, there are continue to package payment for non- adjustment. The Affordable Care Act
approximately 10 million dual-eligible opioid pain management drugs that defines the productivity adjustment to
beneficiaries, which represents function as surgical supplies in the be equal to the 10-year moving average
approximately one third of Medicare performance of surgical procedures in of changes in annual economy-wide
Part B fee-for-service beneficiaries. The the hospital outpatient department private nonfarm business multifactor
impact on Medicaid was determined by setting for CY 2020. In the CY 2020 productivity (MFP) (as projected by the
taking one-third of the beneficiary cost- OPPS/ASC final rule with comment Secretary for the 10-year period, ending
sharing impact. The national average period, we discuss the comments we with the applicable fiscal year, year,
split of Medicaid payments is 57 received on whether we should pay cost reporting period, or other annual
percent Federal payments and 43 separately for various non-opioid period). For ASCs that fail to meet their
percent State payments. Therefore, for treatments for pain under the OPPS and quality reporting requirements, the CY
the estimated $80 million Medicaid the ASC payment system and also 2020 payment determinations will be
increase, approximately $45 million finalize the policy for non-opioid pain based on the application of a 2.0
percentage point reduction to the display estimates of the impact of the estimate that the proposed update to
annual update factor, which we proposed CY 2020 updates to the ASC ASC payment rates for CY 2020 will
proposed will be the hospital market payment system on Medicare payments result in a 4-percent increase in
basket for CY 2020. We calculated the to ASCs, assuming the same mix of aggregate payment amounts for eye and
CY 2020 ASC conversion factor by services, as reflected in our CY 2018 ocular adnexa procedures, a 3-percent
adjusting the CY 2019 ASC conversion claims data. Table 70 depicts the increase in aggregate payment amounts
factor by 1.0001 to account for changes estimated aggregate percent change in for nervous system procedures, 1-
in the pre-floor and pre-reclassified payment by surgical specialty or percent increase in aggregate payment
hospital wage indexes between CY 2019 ancillary items and services group by amounts for digestive system
and CY 2020 and by applying the CY comparing estimated CY 2019 payments procedures, a 2-percent increase in
2020 MFP-adjusted hospital market to estimated proposed CY 2020 aggregate payment amounts for
basket update factor of 2.6 percent payments, and Table 69 shows a musculoskeletal system procedures, a 2-
(which is equal to the projected hospital comparison of estimated CY 2019
percent increase in aggregate payment
market basket update of 3.0 percent payments to estimated proposed CY
amounts for genitourinary system
minus an MFP adjustment of 0.4 2020 payments for procedures that we
percentage point). The proposed CY estimate will receive the most Medicare procedures, and a 5-percent increase in
2020 ASC conversion factor is $47.747 payment in CY 2019. aggregate payment amounts for
for ASCs that successfully meet the In Table 70, we have aggregated the cardiovascular system procedures. We
quality reporting requirements. surgical HCPCS codes by specialty note that these changes can be a result
group, grouped all HCPCS codes for of different factors, including updated
a. Limitations of Our Analysis covered ancillary items and services data, payment weight changes, and
Presented here are the projected into a single group, and then estimated proposed changes in policy. In general,
effects of the proposed changes for CY the effect on aggregated payment for spending in each of these categories of
2020 on Medicare payment to ASCs. A surgical specialty and ancillary items services is increasing due to the 2.6
key limitation of our analysis is our and services groups. The groups are percent proposed payment rate update.
inability to predict changes in ASC sorted for display in descending order After the payment rate update is
service-mix between CY 2018 and CY by estimated Medicare program accounted for, aggregate payment
2020 with precision. We believe the net payment to ASCs. The following is an increases or decreases for a category of
effect on Medicare expenditures explanation of the information services can be higher or lower than a
resulting from the proposed CY 2020 presented in Table 70. 2.6-percent increase, depending on if
changes will be small in the aggregate • Column 1—Surgical Specialty or payment weights in the OPPS APCs that
for all ASCs. However, such changes Ancillary Items and Services Group correspond to the applicable services
may have differential effects across indicates the surgical specialty into increased or decreased or if the most
surgical specialty groups, as ASCs which ASC procedures are grouped and recent data show an increase or a
continue to adjust to the payment rates the ancillary items and services group
decrease in the volume of services
based on the policies of the revised ASC which includes all HCPCS codes for
performed in an ASC for a category. For
payment system. We are unable to covered ancillary items and services. To
accurately project such changes at a example, we estimate a 4-percent
group surgical procedures by surgical
disaggregated level. Clearly, individual specialty, we used the CPT code range increase in proposed aggregate eye and
ASCs will experience changes in definitions and Level II HCPCS codes ocular adnexa procedure payments due
payment that differ from the aggregated and Category III CPT codes, as to an increase in hospital reported costs
estimated impacts presented below. appropriate, to account for all surgical for the primary payment grouping for
procedures to which the Medicare this category under the OPPS. This
b. Estimated Effects of ASC Payment increases the payment weights for eye
program payments are attributed.
System Policies on ASCs
• Column 2—Estimated CY 2019 ASC and ocular adnexa procedure payments
Some ASCs are multispecialty Payments were calculated using CY and, overall, is further increased by the
facilities that perform a wide range of 2018 ASC utilization data (the most proposed 2.6 percent ASC rate update
surgical procedures from excision of recent full year of ASC utilization) and for these procedures. For estimated
lesions to hernia repair to cataract CY 2019 ASC payment rates. The changes for selected procedures, we
extraction; others focus on a single surgical specialty and ancillary items refer readers to Table 70 provided later
specialty and perform only a limited and services groups are displayed in in this section.
range of surgical procedures, such as descending order based on estimated CY
eye, digestive system, or orthopedic Also displayed in Table 69 is a
2019 ASC payments.
procedures. The combined effect on an • Column 3—Estimated CY 2020 separate estimate of Medicare ASC
individual ASC of the proposed update Percent Change is the aggregate payments for the group of separately
to the CY 2020 payments will depend percentage increase or decrease in payable covered ancillary items and
on a number of factors, including, but Medicare program payment to ASCs for services. The payment estimates for the
not limited to, the mix of services the each surgical specialty or ancillary covered surgical procedures include the
ASC provides, the volume of specific items and services group that is costs of packaged ancillary items and
services provided by the ASC, the attributable to proposed updates to ASC services. We estimate that aggregate
percentage of its patients who are payment rates for CY 2020 compared to payments for these items and services
Medicare beneficiaries, and the extent to CY 2019. will decrease by 12 percent for CY 2020.
which an ASC provides different As shown in Table 69, for the six This is largely attributed to the drug
services in the coming year. The specialty groups that account for the packaging policies adopted under the
following discussion presents tables that most ASC utilization and spending, we OPPS and ASC payment system.
Table 70 shows the estimated impact order by estimated CY 2019 program CY 2019 payments are expressed in
of the updates to the revised ASC payment. millions of dollars.
payment system on aggregate ASC • Column 1—CPT/HCPCS code. • Column 4—Estimated CY 2020
payments for selected surgical • Column 2—Short Descriptor of the
HCPCS code. Percent Change reflects the percent
procedures during CY 2020. The table differences between the estimated ASC
• Column 3—Estimated CY 2019 ASC
displays 30 of the procedures receiving payment for CY 2019 and the estimated
Payments were calculated using CY
the greatest estimated CY 2019 aggregate payment for CY 2020 based on the
2018 ASC utilization (the most recent
Medicare payments to ASCs. The full year of ASC utilization) and the CY proposed update.
HCPCS codes are sorted in descending 2019 ASC payment rates. The estimated BILLING CODE 4120–01–P
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BILLING CODE 4120–01–C approximately $20 million in CY 2020 OPPS. Therefore, the beneficiary
c. Estimated Effects of ASC Payment and total beneficiary copayments will coinsurance amount under the ASC
System Policies on Beneficiaries decline by approximately $5 million in payment system will almost always be
CY 2020. First, other than certain less than the OPPS copayment amount
We estimate that the proposed CY preventive services where coinsurance for the same services. (The only
2020 update to the ASC payment system and the Part B deductible is waived to exceptions will be if the ASC
will be generally positive (that is, result comply with sections 1833(a)(1) and (b) coinsurance amount exceeds the
in lower cost-sharing) for beneficiaries of the Act, the ASC coinsurance rate for hospital inpatient deductible. The
with respect to the new procedures we all procedures is 20 percent. This statute requires that copayment amounts
proposed to add to the ASC list of contrasts with procedures performed in under the OPPS not exceed the hospital
covered surgical procedures and for HOPDs under the OPPS, where the inpatient deductible.) Beneficiary
those we proposed to designate as beneficiary is responsible for coinsurance for services migrating from
office-based for CY 2020. For example, copayments that range from 20 percent physicians’ offices to ASCs may
using 2018 utilization data and to 40 percent of the procedure payment decrease or increase under the ASC
proposed CY 2020 OPPS and ASC (other than for certain preventive payment system, depending on the
payment rates, we estimate that if 5 services), although the majority of particular service and the relative
percent of coronary intervention HOPD procedures have a 20-percent payment amounts under the MPFS
procedures migrate from the hospital copayment. Second, in almost all cases, compared to the ASC. While the ASC
outpatient setting to the ASC setting as the ASC payment rates under the ASC payment system bases most of its
a result of this proposed policy, payment system are lower than payment payment rates on hospital cost data used
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Medicare payments will be reduced by rates for the same procedures under the to set OPPS relative payment weights,
services that are performed a majority of and Budget website at: https:// in finalized in CY 2019 to pay for clinic
the time in a physician office are www.whitehouse.gov/sites/ visits furnished at off-campus PBDs at a
generally paid the lesser of the ASC whitehouse.gov/files/omb/assets/OMB/ PFS-equivalent rate. In addition, we
amount according to the standard ASC circulars/a004/a-4.html), we have estimate that these OPPS changes in the
ratesetting methodology or at the prepared accounting statements to final rule will increase copayments that
nonfacility practice expense based illustrate the impacts of the OPPS and Medicaid may make on behalf of
amount payable under the PFS. For ASC changes in this final rule with Medicaid recipients who are also
those additional procedures that we comment period. The first accounting Medicare beneficiaries by
proposed to designate as office-based in statement, Table 71, illustrates the approximately $45 million in CY 2020.
CY 2020, the beneficiary coinsurance classification of expenditures for the CY
The second accounting statement, Table
amount under the ASC payment system 2020 estimated hospital OPPS incurred
72, illustrates the classification of
generally will be no greater than the benefit impacts associated with the
proposed CY 2020 OPD fee schedule expenditures associated with the 2.6
beneficiary coinsurance under the PFS
increase. This $1.21 billion in percent CY 2020 update to the ASC
because the coinsurance under both
additional Medicare spending estimate payment system, based on the
payment systems generally is 20 percent
(except for certain preventive services includes the $1.53 billion in additional provisions of the final rule with
where the coinsurance is waived under Medicare spending associated with comment period and the baseline
both payment systems). updating the CY 2019 OPPS payment spending estimates for ASCs. Both
rates by the hospital market basket tables classify most estimated impacts
3. Accounting Statements and Tables update for CY 2020, offset by the $320 as transfers. The estimated costs of ICR
As required by OMB Circular A–4 million in Medicare savings associated Burden and Regulatory Familiarization
(available on the Office of Management with the CY 2020 completion of phase- are included in Table 73.
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4. Effects of Changes in Requirements payment determination. In addition to finalized measure to change the
for the Hospital OQR Program burden associated with information information collection burden; it will
a. Background collection, we also anticipate that only nominally affect other costs
hospitals will experience a general experienced by ASCs due to having to
We refer readers to the CY 2018 burden and cost reduction associated review and track confidential feedback
OPPS/ASC final rule with comment with this removal stemming from no and reports related to the finalized
period (82 FR 59492 through 59494), for longer having to implement, review, ASC–19 measure.
the previously estimated effects of track, and maintain program
changes to the Hospital OQR Program XXVI. Economic Analyses
requirements associated with this
for the CY 2018, CY 2019, and CY 2020 measure. D. Effects of Prior Authorization Process
payment determinations. Of the and Requirements for Certain Hospital
approximately 3,300 hospitals that met 5. Effects of Requirements for the Outpatient Department (OPD) Services
eligibility requirements for the CY 2019 ASCQR Program
payment determination, we determined 1. Overall Impact
a. Background
that 14 hospitals did not meet the As discussed in section XX. CY 2020
requirements to receive the full OPD fee In section XV.B of this final rule with OPPS/ASC proposed rule (84 FR 39556),
schedule increase factor. In the CY 2020 comment period, we discuss our we proposed developing a new prior
OPPS/ASC Proposed Rule (84 FR finalized policies affecting the ASCQR authorization process and requirements
39556), we did not propose to add any Program. For the CY 2019 payment for certain hospital outpatient
quality measures to the Hospital OQR determination, of the 6,393 ASCs that department (OPD) services. This
Program measure set for the CY 2021 or met eligibility requirements for the proposal will use our authority in
CY 2022 payment determinations. ASCQR Program, 203 ASCs did not section 1833(t)(2)(f) of the Act to require
However, we are finalizing our proposal meet the requirements to receive the full provisional affirmation of coverage as a
to remove one measure from the annual payment update. In section condition of Medicare payment unless
program measure set, as discussed in XV.B.3. of this final rule with comment the provider is exempt. This new
section XIV.B.3.b. of this final rule with period, we are finalizing our proposal to requirement for prior authorization of
comment period. We do not believe that adopt ASC–19: Facility-Level 7-Day certain covered OPD services aims to
this finalized policy will increase the Hospital Visits after General Surgery reduce the unnecessary increases in
number of hospitals that do not receive Procedures Performed at Ambulatory volume of certain covered hospital
a full annual payment update for the CY Surgical Centers to the ASCQR Program outpatient department services.
2021 or CY 2022 payment measure set for the CY 2024 payment We believe there are a number of
determinations. determination and subsequent years. We factors that may contribute to the
do not believe that adoption of the potential growth assumed in the
b. Estimated Effects of Finalized finalized ASC–19 measure will cause estimate presented below. For example,
Removal of OP–33 for the CY 2022 any ASCs to fail to meet the ASCQR as the provider community acclimates
Payment Determination and Subsequent Program requirements. Therefore, we do to using prior authorization as part of
Years not believe this measure adoption will their billing practice, there may be
In section XIV.B.3.b. of this final rule increase the number of ASCs that do not greater systemic or other processing
with comment period, we are finalizing receive a full annual payment update for efficiencies to allow more extensive
our proposal with modification to the CY 2024 payment determination. implementation.
remove one measure submitted via a Below we discuss only the effects that The overall economic impact on the
web-based tool beginning with the CY will result from the provisions finalized health care sector is dependent on the
2022 payment determination and for in this final rule with comment period. number of claims affected. Table 74,
subsequent years: OP–33: External Beam Overall Economic Impact to the Health
Radiotherapy for Bone Metastases. In b. Estimated Effects of Adoption of
Sector, lists an estimate for the overall
the CY 2020 OPPS/ASC proposed rule, ASC–19: Facility-Level 7-Day Hospital
economic impact to the health sector for
we inadvertently stated that we were Visits After General Surgery Procedures
the services combined. The values
proposing to remove this measure Performed at Ambulatory Surgical
populating this table were obtained
beginning with October 2020 encounters Centers (NQF #3357)
from the cost reflected in Table 48,
for CY 2022 payment determination and In section XV.B.3. of this final rule Annual Private Sector Costs, and Table
subsequent years (84 FR 39554 through with comment period, we are finalizing 76, Estimated Annual Medicare Costs.
39556). As discussed in section our proposal, beginning with the CY Together, Tables 75 and 76 combine to
XXVI.B.2. of this final rule with 2024 payment determination and for convey the overall economic impact to
comment period, we intended to remove subsequent years, to adopt one measure: the health sector, which is illustrated in
this measure beginning with the CY ASC–19: Facility-Level 7-Day Hospital Table 74. It should be noted that due to
2022 payment determination and Visits after General Surgery Procedures a July start date, year one will include
subsequent years, but starting with Performed at Ambulatory Surgical only 6 months of prior authorization
January 2020 encounters, not October. Centers (NQF #3357). As discussed in requests.
Because we are finalizing removal of section XXVI.C.2. of this final rule with Based on the estimate, the overall
this measure beginning with the same comment period, data used to calculate economic impact is approximately $5.7
CY 2022 payment determination, as was scores for this finalized measure are million in the first year based on 6
proposed, the estimated impacts and collected via Medicare Part A and Part months. The 5-year impact is
burden reduction remain the same as B administrative claims and Medicare approximately $46.5 million, and the
discussed in the proposed rule. As enrollment data. Therefore, ASCs will 10-year impact is approximately $98.7
discussed in section XXVI.B.2. of this not be required to report any additional million. The 5 and 10 year impacts
final rule with comment period, we data. Because this change does not affect account for year one including only 6
anticipate a burden reduction of 551 ASCQR Program participation months. Additional administrative
hours and $21,379 associated with the requirements or data reporting paperwork costs to private sector
removal of OP–33 for the CY 2022 requirements, we do not expect this providers and an increase in Medicare
spending to conduct reviews combine to from the OPD service prior unnecessary utilization, fraud, waste,
create the financial impact. However, authorization requirement. However, and abuse, including a reduction in
this impact is offset by some savings. many of those benefits are difficult to improper Medicare fee-for-service
We believe there are likely to be other quantify. For instance, we expect to see payments (we note that not all improper
benefits and cost savings that result savings in the form of reduced payments are fraudulent).
The rationale behind requiring prior expect a decrease in the overall amount the OPD services prior authorization
authorization is to control unnecessary paid for OPD services resulting from a process—blepharoplasty; botulinum
increases in the volume of certain reduction in unnecessary utilization of toxin injections; panniculectomy;
covered OPD services that are often the services requiring prior rhinoplasty; and vein ablation. The list
cosmetic. We believe that the purpose of authorization. includes services from each of five
the statute is to avoid unnecessary As described previously in the CY categories that have demonstrated
utilization of OPD services. Therefore, 2020 OPPS/ASC proposed rule (84 FR unnecessary increases in volume and
we do not view decreased revenues 39556), we have identified a list of that are likely to be cosmetic surgical
from OPD services subject to specific services that, based on review procedures and/or are directly related to
unnecessary utilization by providers to and analysis of claims data, show higher cosmetic surgical procedures that are
be a condition that we must mitigate. than expected, and therefore we believe not covered by Medicare, but may be
We believe that the effect will be unnecessary, increases in the volume of
minimal on providers who are combined with or masquerading as
service utilization. In making the
compliant with Medicare coverage and therapeutic services.
decision to include the specific services
payment rules and requirements. This in the list of hospital outpatient We estimate that the private sector’s
policy will offer an additional department services requiring prior per-case time burden attributed to
protection to a provider’s cash flow as authorization, we first considered that submitting documentation and
the provider will know in advance if the these services are primarily cosmetic associated clerical activities in support
Medicare requirements are met. and, therefore, are only covered by of a prior authorization request is
2. Anticipated Specific Cost Effects Medicare in very rare circumstances. equivalent to that of submitting
We then viewed the current volume of documentation and clerical activities
a. Private Sector Costs utilization of these services and associated for prepayment review,
We do not believe that this finalized determined that the utilization far which is 0.5 hours. We apply this time
policy will significantly affect the exceeded what will be expected. burden estimate to initial submissions
number of legitimate claims submitted We have developed a list of potential and resubmissions.
for these services. However, we do OPD services categories for inclusion in
ER12NO19.124</GPH>
b. Medicare Costs authorization requests. We use the range review each request. The cost also
of potentially affected cases includes other elements such as
Medicare will incur additional costs (submissions and resubmissions) and appeals, education and outreach, and
associated with processing prior multiply it by $50, the estimated cost to system changes.
c. Estimated Beneficiary Costs beneficiaries; any rule-induced loss of Medicare OPD services subject to prior
We expect a reduction in the such convenience or usefulness authorization. It is difficult to project
utilization of Medicare OPD services constitutes a cost of the rule that we the decrease in unnecessary utilization.
when such utilization does not comply lack data to quantify. Additionally, However, for the first 6 months we
with one or more of Medicare’s beneficiaries may have out-of-pocket estimate the savings to be $6,059,950
coverage, coding, and payment rules. costs for those services that are and the net savings as $2,112,362.
While there may be an associated determined not to comply with Annually, the estimated savings are
burden on beneficiaries while they wait Medicare requirements and thus, are not $12,119,899 and the net savings are
for the prior authorization decision, we eligible for Medicare payment. We lack $4,679,966. We will closely monitor
are unable to quantify that burden. the data to quantify these costs as well. utilization and billing practices. The
ER12NO19.126</GPH>
Although the system is designed to 3. Estimated Benefits expected benefits will include a
permit utilization that is medically changed billing practice that also
necessary, OPD services that are not There will be quantifiable benefits enhances the coordination of care for
medically necessary may still provide because we expect a reduction in the the beneficiary. For example, requiring
ER12NO19.125</GPH>
convenience or usefulness for unnecessary utilization of those prior authorization for certain OPD
services ensures that the primary care therefore it will not result in any either case given the few number of
practitioner recommending the service quantifiable impact. Medicare discharges at children’s
and the facility collaborate more closely hospitals, the impact of this policy
F. Revisions to the Laboratory Date of
to provide the most appropriate OPD change on Medicare spending is
Service Policy
services to meet the needs of the negligible
beneficiary. The practitioner In section XIX of this final rule with
comment period, we discuss our H. Regulatory Review Costs
recommending the service evaluates the
beneficiary to determine his or her comment solicitation on potential If regulations impose administrative
condition and what services are needed revisions to the laboratory date of costs on private entities, such as the
and medically necessary. This requires service (DOS) exception at 42 CFR time needed to read and interpret a rule,
the facility to collaborate closely with 414.510(b)(5) for molecular pathology we should estimate the cost associated
the practitioner early on in the process tests and tests designated by CMS as an with regulatory review. Due to the
to ensure the services are truly ADLT under paragraph (1) of the uncertainty involved with accurately
necessary and meet all requirements definition of advanced diagnostic quantifying the number of entities that
and the documentation is complete and laboratory test in § 414.502. As a result will review a rule, we assumed that the
correct. Improper payments made of our evaluation of public comments, number of commenters on the CY 2020
because the practitioner did not we are finalizing a revision to exclude OPPS/ASC proposed rule (3,853) will be
evaluate the patient or the patient does blood banks or centers from the the number of reviewers of this final
not meet the Medicare requirements, laboratory DOS exception at rule with comment period. We
will likely be reduced by the § 414.510(b)(5). Because the molecular acknowledge that this assumption may
requirement that a provider submit pathology tests performed by blood understate or overstate the costs of
clinical documentation created by as banks or centers are excluded from our reviewing this final rule with comment
part of its prior authorization request. packaging policy under the OPPS, and period. It is possible that not all
are paid at the applicable rate for the commenters will review this final rule
E. Effects of Requirements Relating to laboratory test under the CLFS, with comment period in detail, and it is
Changes in the Definition of Expected regardless of whether the hospital or the also possible that some reviewers will
Donation Rate for Organ Procurement performing laboratory bills Medicare for choose not to comment on this final rule
Organizations the test, this revision will not result in with comment period. Nonetheless, we
We are finalizing our proposal to net costs or savings to the Medicare believed that the number of commenters
revise the definition of ‘‘expected program. Accordingly, the discussion in on the CY 2019 OPPS/ASC proposed
donation rate’’ in the CfCs for OPOs. section XIX of this final rule with rule would be a fair estimate of the
This change will allow OPOs to receive comment period is not reflected in number of reviewers of this final rule
payment for organ donor costs under the Table 41 in the regulatory impact with comment period. In the CY 2020
Medicare and Medicaid programs using analysis under section XXVI.C.1. of this OPPS/ASC proposed rule (84 FR 39637),
a definition that is consistent with the final rule with comment period. we welcomed any comments on the
definition used by the Scientific approach in estimating the number of
G. Effect of Changes to Requirements for
Registry of Transplant Recipients entities that will review the proposed
Grandfathered Children’s Hospitals-
(SRTR). rule. We also recognize that different
Due to comments received on the CY Within-Hospitals (HwHs)
types of entities are, in many cases,
2020 OPPS/ASC proposed rule (and In section XXII. of this final rule, we affected by mutually exclusive sections
discussed in section XVIII.A of this final are finalizing our proposal to revise of the proposed rule and the final rule
rule with comment period), we are § 412.22(f)(1) and (2) to allow with comment period, and, therefore,
finalizing a policy that would not grandfathered children’s HwHs to for the purposes of our estimate, we
require all OPOs to meet the standards increased beds while maintaining their assumed that each reviewer reads
of the second outcome measure for the grandfathered status. This policy change approximately 50 percent of the rule.
2022 recertification cycle only. As a will allow providers to address Using the wage information from the
result, OPOs will only have to meet one changing community needs for services 2018 BLS for medical and health service
of the remaining outcome measures, without any increased incentive for managers (Code 11–9111), we estimated
which may provide temporary relief for inappropriate patient shifting to that the cost of reviewing this rule is
a small number of OPOs that, absent maximize Medicare payments given the $109.36 per hour, including overhead
this waiver, might have faced de- low Medicare utilization in children’s and fringe benefits (https://www.bls.gov/
certification and the appeal process due hospitals. Based on the best available oes/current/oes_nat.htm). Assuming an
to only meeting one outcome measure. information, there are currently very average reading speed, we estimate that
For subsequent recertification cycles, few grandfathered children’s HwHs (3 it will take approximately 8 hours for
all 58 OPOs will once again be required or less). For these reasons, we estimate the staff to review half of this final rule
to meet two out of three outcome any impact on Medicare expenditures as with comment period. For each facility
measures detailed in the CfCs for OPOs a result of this policy change will be that reviewed this final rule with
regulations at 42 CFR 486.318(a) and (b). negligible. On average there are comment period, the estimated cost is
The second outcome measure relies on approximately 50 Medicare discharges $874.88 (8 hours × $109.36). Therefore,
the aforementioned ‘‘expected donation per year from children’s hospitals at an we estimated that the total cost of
rate’’ definition, and therefore all OPOs average cost of approximately $33,000 reviewing this final rule with comment
will be affected by the finalized change. per discharge. There are two possible period is $3,370,913 ($874.88 × 3,853
This revision will eliminate the sources for an increase, if any, in reviewers).
potential for confusion in the OPO Medicare discharges at grandfathered
community due to different definitions children’s hospitals as a result of our I. Regulatory Flexibility Act (RFA)
of the same term; however, it will not policy change—(1) either the discharges Analysis
affect data collection or reporting by will have been treated at another The RFA requires agencies to analyze
OPTNs and SRTRs, nor their statistical children’s hospital; or (2) the cases will options for regulatory relief of small
evaluation of OPO performance, and have been treated at an IPPS hospital. In entities, if a rule has a significant impact
on a substantial number of small level is currently approximately $154 XXVII. Federalism Analysis
entities. For purposes of the RFA, many million. This final rule with comment Executive Order 13132 establishes
hospitals are considered small period does not mandate any certain requirements that an agency
businesses either by the Small Business requirements for State, local, or tribal must meet when it promulgates a
Administration’s size standards with governments, or for the private sector. proposed rule (and subsequent final
total revenues of $41.0 million or less in rule) that imposes substantial direct
K. Reducing Regulation and Controlling
any single year or by the hospital’s not- costs on State and local governments,
Regulatory Costs
for-profit status. Most ASCs and most preempts State law, or otherwise has
CMHCs are considered small businesses Executive Order 13771, titled
Reducing Regulation and Controlling federalism implications. We have
with total revenues of $16.5 million or examined the OPPS and ASC provisions
less in any single year. For details, we Regulatory Costs, was issued on January
30, 2017. It has been determined that included in this final rule with
refer readers to the Small Business
this final rule with comment period, comment period in accordance with
Administration’s ‘‘Table of Size
will be a regulatory action for the Executive Order 13132, Federalism, and
Standards’’ at http://www.sba.gov/
purposes of Executive Order 13771. We have determined that they will not have
content/table-small-business-size-
estimate that this final rule with a substantial direct effect on State, local
standards. As its measure of significant
comment period will generate $2.5 or tribal governments, preempt State
economic impact on a substantial
million in annualized cost at a 7-percent law, or otherwise have a federalism
number of small entities, HHS uses a
discount rate, discounted relative to implication. As reflected in Table 68 of
change in revenue of more than 3 to 5
2016, over a perpetual time horizon. this final rule with comment period, we
percent. We do not believe that this
estimate that OPPS payments to
threshold will be reached by the L. Conclusion
requirements in this final rule with governmental hospitals (including State
comment period. As a result, the The changes we are making in this and local governmental hospitals) will
Secretary has determined that this final final rule with comment period will increase by 1.3 percent under this final
rule with comment period will not have affect all classes of hospitals paid under rule with comment period. While we do
a significant impact on a substantial the OPPS and will affect both CMHCs not know the number of ASCs or
number of small entities. and ASCs. We estimate that most classes CMHCs with government ownership, we
In addition, section 1102(b) of the Act of hospitals paid under the OPPS will anticipate that it is small. The analyses
requires us to prepare a regulatory experience a modest increase or a we have provided in this section of this
impact analysis if a rule may have a minimal decrease in payment for final rule with comment period, in
significant impact on the operations of services furnished under the OPPS in conjunction with the remainder of this
a substantial number of small rural CY 2020. Table 68 demonstrates the document, demonstrate that this final
hospitals. This analysis must conform to estimated distributional impact of the rule with comment period is consistent
the provisions of section 604 of the OPPS budget neutrality requirements with the regulatory philosophy and
RFA. For purposes of section 1102(b) of that will result in a 1.3 percent increase principles identified in Executive Order
the Act, we define a small rural hospital in payments for all services paid under 12866, the RFA, and section 1102(b) of
as a hospital that is located outside of the OPPS in CY 2020, after considering the Act.
a metropolitan statistical area and has all of the changes to APC This final rule with comment period
100 or fewer beds. We estimate that this reconfiguration and recalibration, as will affect payments to a substantial
final rule with comment period will well as the OPD fee schedule increase number of small rural hospitals and a
increase payments to small rural factor, wage index changes, including small number of rural ASCs, as well as
hospitals by less than 2 percent; the frontier State wage index other classes of hospitals, CMHCs, and
therefore, it should not have a adjustment, estimated payment for ASCs, and some effects may be
significant impact on approximately 609 outliers, the finalized off-campus significant.
small rural hospitals. We note that the provider-based department clinic visits
List of Subjects
estimated payment impact for any payment policy, and changes to the
category of small entity will depend on pass-through payment estimate. 42 CFR Part 405
both the services that they provide as However, some classes of providers that Administrative practice and
well as the payment policies and/or are paid under the OPPS will procedure, Health facilities, Health
payment systems that may apply to experience more significant gains or professions, Kidney diseases, Medical
them. Therefore, the most applicable losses in OPPS payments in CY 2020. devices, Medicare, Reporting and
estimated impact may be based on the The updates to the ASC payment recordkeeping requirements, Rural
specialty, provider type, or payment system for CY 2020 will affect each of areas, X-rays.
system. the approximately 5,600 ASCs currently
The analysis above, together with the approved for participation in the 42 CFR Part 410
remainder of this preamble, provides a Medicare program. The effect on an Diseases, Health facilities, Health
regulatory flexibility analysis and a individual ASC will depend on its mix professions, Laboratories, Medicare,
regulatory impact analysis. of patients, the proportion of the ASC’s Reporting and recordkeeping
patients who are Medicare beneficiaries, requirements, Rural areas, X-rays.
J. Unfunded Mandates Reform Act the degree to which the payments for
Analysis the procedures offered by the ASC are 42 CFR Part 412
Section 202 of the Unfunded changed under the ASC payment Administrative practice and
Mandates Reform Act of 1995 (UMRA) system, and the extent to which the ASC procedure, Health facilities, Medicare,
also requires that agencies assess provides a different set of procedures in Puerto Rico, Reporting and
anticipated costs and benefits before the coming year. Table 69 demonstrates recordkeeping requirements.
issuing any rule whose mandates the estimated distributional impact
require spending in any 1 year of $100 among ASC surgical specialties of the 42 CFR Part 414
million in 1995 dollars, updated MFP-adjusted hospital market basket Administrative practice and
annually for inflation. That threshold update factor of 2.6 percent for CY 2020. procedure, Biologics, Drugs, Health
facilities, Health professions, Diseases, of this section, subject to the following PART 414—PAYMENT FOR PART B
Medicare, Reporting and recordkeeping requirements: MEDICAL AND OTHER HEALTH
requirements. (A) For services furnished in the SERVICES
42 CFR Part 416 hospital or CAH, or in an outpatient
■ 7. The authority citation for part 414
department of the hospital or CAH, both
Health facilities, Health professions, continues to read as follows:
Medicare, Reporting and recordkeeping on and off-campus, as defined in
§ 413.65 of this chapter, general Authority: 42 U.S.C. 1302, 1395hh, and
requirements. 1395rr(b)(l).
supervision means the definition
42 CFR Part 419 specified at § 410.32(b)(3)(i). ■ 8. Section 414.502 is amended by
Hospitals, Medicare, Reporting and (B) Certain therapeutic services and adding a definition for ‘‘Blood bank or
recordkeeping requirements. supplies may be assigned either direct center’’ in alphabetical order to read as
supervision or personal supervision. For follows:
42 CFR Part 486
purposes of this section, direct § 414.502 Definitions.
Definitions, Medicare, Organ supervision means that the physician or
procurement. * * * * *
nonphysician practitioner must be Blood bank or center means an entity
For reasons stated in the preamble of immediately available to furnish whose primary function is the
this document, the Centers for Medicare assistance and direction throughout the performance or responsibility for the
& Medicaid Services amends 42 CFR performance of the procedure. It does performance of, the collection,
chapter IV as set forth below: not mean that the physician or processing, testing, storage and/or
nonphysician practitioner must be distribution of blood or blood
PART 405—FEDERAL HEALTH
INSURANCE FOR THE AGED AND present in the room when the procedure components intended for transfusion
DISABLED is performed. Personal supervision and transplantation.
means the definition specified at * * * * *
■ 1. The authority citation for part 405 § 410.32(b)(3)(iii); ■ 9. Section 414.510 is amended by
continues to read as follows: * * * * * revising paragraph (b)(5) introductory
Authority: 42 U.S.C. 263a, 495(a), 1302, text to read as follows:
1302b-12, 1395x, 1395y(a), 1395ff, 1395hh, PART 412—PROSPECTIVE PAYMENT
1395kk, 1395rr, and 1395ww(k). SYSTEMS FOR INPATIENT HOSPITAL § 414.510 Laboratory date of service for
SERVICES clinical laboratory and pathology
■ 2. Section 405.926 is amended by specimens.
revising paragraph (t) to read as follows:
■ 5. The authority citation for part 412 * * * * *
§ 405.926 Actions that are not initial continues to read as follows: (b) * * *
determinations. (5) In the case of a molecular
* * * * * Authority: 42 U.S.C. 1302 and 1395hh. pathology test performed by a laboratory
(t) A contractor’s prior authorization ■ 6. Section 412.22 is amended by other than a blood bank or center, or a
determination with regard to— revising paragraphs (f)(1) and (2) to read test designated by CMS as an ADLT
(1) Durable medical equipment, as follows: under paragraph (1) of the definition of
prosthetics, orthotics, and supplies an advanced diagnostic laboratory test
(DMEPOS)); and § 412.22 Excluded hospitals and hospital in § 414.502, the date of service of the
(2) Hospital outpatient department units: General rules. test must be the date the test was
(OPD) services. * * * * * performed only if—
* * * * * (f) * * * * * * * *
PART 410—SUPPLEMENTARY (1) Continues to operate under the PART 416—AMBULATORY SURGICAL
MEDICAL INSURANCE (SMI) same terms and conditions, including SERVICES
BENEFITS the number of beds, unless the hospital
is a children’s hospital as defined at ■ 10. The authority citation for part 416
■ 3. The authority citation for part 410 § 412.23(d), and square footage continues to read as follows:
continues to read as follows: considered to be part of the hospital for Authority: 42 U.S.C. 273, 1302, 1320b-8,
Authority: 42 U.S.C. 1302, 1395m, purposes of Medicare participation and and 1395hh.
1395hh, 1395rr, and 1395ddd. payment in effect on September 30, ■ 11. Section 416.171 is amended by
■ 4. Section 410.27 is amended by 1995; or adding paragraph (b)(4) to read as
revising paragraph (a)(1)(iv) to read as (2) In the case of a hospital that follows:
follows: changes the terms and conditions under § 416.171 Determination of payment rates
which it operates after September 30, for ASC services.
§ 410.27 Therapeutic outpatient hospital or
1995, but before October 1, 2003,
CAH services and supplies incident to a * * * * *
continues to operate under the same
physician’s or nonphysician practitioner’s (b) * * *
service: Conditions. terms and conditions, including the (4) Notwithstanding paragraph (b)(2)
* * * * * number of beds, unless the hospital is of this section, low volume device-
(a) * * * a children’s hospital as defined at intensive procedures where the
(1) * * * § 412.23(d), and square footage otherwise applicable payment rate
(iv) Under the general supervision (or considered to be part of the hospital for calculated based on the standard
other level of supervision as specified purposes of Medicare participation and methodology for device intensive
by CMS for the particular service) of a payment in effect on September 30, procedures described in this paragraph
physician or a nonphysician 2003. (b) would exceed the payment rate for
practitioner as specified in paragraph (g) * * * * * the equivalent service set under the
payment system established under part increases in the volume of covered (c) Submission of prior authorization
419 of this chapter, for which the hospital outpatient department services. request. A provider must submit to CMS
payment rate will be set at an amount (b) Scope. This subpart specifies the or its contractor a prior authorization
equal to the amount under that payment process and requirements for prior request for any service on the list of
system. authorization for certain hospital outpatient department services
* * * * * outpatient department services as a requiring prior authorization.
condition of Medicare payment. (1) Prior authorization request
PART 419—PROSPECTIVE PAYMENT requirements. A prior authorization
§ 419.81 Definitions. request must—
SYSTEM FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES As used in this subpart, unless (i) Include all documentation
otherwise specified, the following necessary to show that the service meets
■ 12. The authority citation for part 419 definitions apply: applicable Medicare coverage, coding,
continues to read as follows: List of hospital outpatient department and payment rules in chapter IV of this
services requiring prior authorization title or in Title XVIII of the Social
Authority: 42 U.S.C. 1302, 1395l(t), and means the list of hospital outpatient
1395hh. Security Act.
department services described in (ii) Be submitted before the service is
■ 13. Section 419.66 is amended by § 419.83(a) that CMS adopts in provided to the beneficiary and before
revising paragraph (c)(2) to read as accordance with § 419.83(b) that require the claim is submitted.
follows: prior authorization as a condition of (2) Request for expedited review. A
Medicare payment. provider may submit a request for
§ 419.66 Transitional pass-through Prior authorization means the process
payments: Medical devices.
expedited review of a prior
through which a request for provisional authorization request. The request for
* * * * * affirmation of coverage is submitted to expedited review must comply with the
(c) * * * CMS or its contractors for review before requirements in paragraphs (c)(1)(i) and
(2) CMS determines either of the the service is provided to the (ii) of this section and include
following: beneficiary and before the claim is documentation showing that the
(i) The device to be included in the submitted for processing. processing of the prior authorization
category has demonstrated that it will Provisional affirmation means a request must be expedited due to the
substantially improve the diagnosis or preliminary finding that a future claim beneficiary’s life, health, or ability to
treatment of an illness or injury or meets the Medicare coverage, coding, regain maximum function being in
improve the functioning of a malformed and payment rules in chapter IV of this serious jeopardy.
body part compared to the benefits of a title or in Title XVIII of the Social (d) Reviews—(1) Review of prior
device or devices in a previously Security Act. authorization request. Upon receipt of a
established category or other available § 419.82 Prior authorization for certain prior authorization request, CMS or its
treatment; or covered hospital outpatient department contractor will review the request for
(ii) For devices for which pass- services. compliance with applicable Medicare
through payment status will begin on or (a) Prior authorization as condition of coverage, coding, and payment rules in
after January 1, 2020, as an alternative payment. As a condition of Medicare chapter IV of this title or in Title XVIII
pathway to paragraph (c)(2)(i) of this payment for the services in the of the Social Security Act.
section, the device has received FDA categories of services on the list of (i) CMS or its contractor will issue a
marketing authorization and is part of hospital outpatient department services provisional affirmation to the provider if
the FDA’s Breakthrough Devices requiring prior authorization as it is determined that applicable
Program. specified in § 419.83(a), a provider must Medicare coverage, coding, and
* * * * * submit to CMS or its contractors a prior payment rules in chapter IV of this title
authorization request in accordance or in Title XVIII of the Social Security
■ 14. Subpart I, consisting of §§ 419.80
with the requirements of paragraph (c) Act are met.
through 419.89, is added to read as (ii) CMS or its contractor will issue a
follows: of this section.
(b) Denial of claim. (1) CMS or its non-affirmation to the provider if it is
Subpart I—Prior Authorization for contractors will deny a claim for a determined that applicable Medicare
Outpatient Department Services service that requires prior authorization coverage, coding, and payment rules in
Sec. if the provider has not received a chapter IV of this title or in Title XVIII
419.80 Basis and scope of this subpart. provisional affirmation of coverage on of the Social Security Act are not met.
419.81 Definitions. the claim from CMS or its contractor (iii) The provisional affirmation or
419.82 Prior authorization for certain unless the provider is exempt under non-affirmation will be issued within 10
covered hospital outpatient department business days of receipt of the prior
services.
§ 419.83(c).
(2) CMS or its contractor may deny a authorization request.
419.83 List of hospital outpatient (2) Review of expedited review
department services requiring prior claim that has received a provisional
authorization. affirmation based on either of the request. Upon receipt of a request for
419.84–419.89 [Reserved] following: expedited review, CMS or its contractor
(i) Technical requirements that can will complete an expedited review of
Subpart I—Prior Authorization for only be evaluated after the claim has the prior authorization request if it is
Outpatient Department Services been submitted for formal processing; or determined that a delay could seriously
(ii) Information not available at the jeopardize the beneficiary’s life, health,
§ 419.80 Basis and scope of this subpart. time of a prior authorization request. or ability to regain maximum function,
(a) Basis. The provisions in this (3) CMS or its contractor may deny and issue a provisional affirmation or
subpart are issued under the authority claims for services related to services on non-affirmation decision in accordance
of section 1833(t)(2)(F) of the Act, which the list of hospital outpatient with paragraph (d)(1) of this section
authorizes the Secretary to develop a department services for which the within 2 business days of the expedited
method for controlling unnecessary provider has received a denial. review request.
(e) Resubmission. (1) A provider may authorization process requirements (b) De-certification and competition.
resubmit a prior authorization request, generally or for a particular service(s) at (1) If an OPO does not meet two out of
upon receipt of a non-affirmation, any time by issuing notification on the the three outcome measures as
consistent with the requirements in CMS website. described in paragraph (a)(1) of this
paragraph (c)(1) of this section. section or the requirements described in
(2) A provider may resubmit a request PART 486—CONDITIONS FOR paragraph (a)(2) of this section, the OPO
for expedited review consistent with the COVERAGE OF SPECIALIZED is de-certified. If the OPO does not
requirements in paragraph (c)(1) of this SERVICES FURNISHED BY appeal or the OPO appeals and the
section. SUPPLIERS reconsideration official and CMS
hearing officer uphold the de-
§ 419.83 List of hospital outpatient ■ 15. The authority citation for part 486 certification, the OPO’s service area is
department services requiring prior is revised to read as follows:
authorization. opened for competition from other
Authority: 42 U.S.C. 273, 1302, 1320b–8, OPOs. The de-certified OPO is not
(a) Service categories for the list of and 1395hh. permitted to compete for its open area
hospital outpatient department services
■ 16. Section 486.302 is amended by or any other open area. An OPO
requiring prior authorization. (1) The
revising the definition of ‘‘Expected competing for an open service area must
following service categories comprise
donation rate’’ to read as follows: submit information and data that
the list of hospital outpatient
describe the barriers in its service area,
department services requiring prior § 486.302 Definitions. how they affected organ donation, what
authorization:
* * * * * steps the OPO took to overcome them,
(i) Blepharoplasty.
(ii) Botulinum toxin injections. Expected donation rate means the and the results.
(iii) Panniculectomy. expected donation rate per 100 eligible (2) For the 2022 recertification cycle
(iv) Rhinoplasty. deaths that is the rate expected for an only, if an OPO does not meet one of the
(v) Vein ablation. OPO based on the national experience outcome measures as described in
(2) Technical updates to the list of for OPOs serving similar eligible donor paragraphs § 486.318(a)(1), (a)(3), (b)(1),
services, such as changes to the name of populations and donation service areas. or (b)(3), or the requirements described
the service or CPT code, will be This rate is adjusted for the in paragraph (a)(2) of this section, the
published on the CMS website. distributions of age, sex, race, and cause OPO is de-certified. If the OPO does not
(b) Adoption of the list of services. of death among eligible deaths. appeal or the OPO appeals and the
CMS will adopt the list of hospital * * * * * reconsideration official and CMS
outpatient department service categories ■ 17. Section 486.316 is amended by hearing officer uphold the de-
requiring prior authorization and any adding paragraph (a)(3) and revising certification, the OPO’s service area is
updates or geographic restrictions paragraph (b) to read as follows: opened for competition from other
through formal notice-and-comment OPOs. The de-certified OPO is not
rulemaking. § 486.316 Re-certification and competition permitted to compete for its open area
(c) Exemptions. CMS may elect to processes. or any other open area. An OPO
exempt a provider from the prior (a) * * * competing for an open service area must
authorization process in § 419.82 upon (3) For the 2022 recertification cycle submit information and data that
a provider’s demonstration of only, an OPO is recertified for an describe the barriers in its service area,
compliance with Medicare coverage, additional 4 years and its service area is how they affected organ donation, what
coding, and payment rules in chapter IV not opened for competition when the steps the OPO took to overcome them,
of this title or in Title XVIII of the Social OPO meets one out of the two outcome and the results.
Security Act through such prior measure requirements described in * * * * *
authorization process. § 486.318(a)(1) and (3) for OPOs not
Dated: October 24, 2019.
(1) An exemption will remain in effect operating exclusively in the
noncontiguous States, Commonwealths, Seema Verma,
until CMS elects to withdraw the
exemption. Territories, or possessions; or Administrator, Centers for Medicare and
§ 486.318(b)(1) and (3) for OPOs Medicaid Services.
(2) Notice of an exemption or
withdraw of an exemption will be operating exclusively in noncontiguous Dated: October 28, 2019
provided at least 60 days prior to the States, Commonwealths, Territories, and Alex M. Azar II,
effective date. possessions. An OPO is not required to Secretary, Department of Health and Human
(d) Suspension of prior authorization meet the second outcome measure Services.
process or services. CMS may suspend described in § 486.318(a)(2) or (b)(2) for [FR Doc. 2019–24138 Filed 11–1–19; 4:15 pm]
the outpatient department services prior the 2022 recertification cycle. BILLING CODE 4120–01–P

Federal Register / Vol. 84, No. 218 / Tuesday, November 12, 2019 / Rules and Regulations

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61142 Federal Register / Vol. 84, No.

218 / Tuesday, November 12, 2019 / Rules and Regulations

DEPARTMENT OF HEALTH AND DATES: via email Scott.Talaga@cms.hhs.gov or

Elise.Barringer@cms.hhs.gov or at 410– Payment Policy Mailbox at Current Procedural Terminology (CPT)

primary surgical procedure. We also whitehouse.gov/files/images/Final_Report_Draft_ news/healthactions/phe/Pages/default.aspx.

www.accessdata.fda.gov/drugsatfda_docs/nda/ health-emergency-address-national-opioid- https://www.accessdata.fda.gov/drugsatfda_docs/

BILLING CODE 4120–01–C status indicator assignments for the July

public through the October OPPS Addendum B to this CY 2020 OPPS/

to as Ambulatory Payment procedure.

(New Technology—Level 34 ($8,001- 59281), HCPCS code P9100 is used to contamination.

with a proposed payment rate of

BILLING CODE 4120–01–C establishment of additional levels.

with comment period (82 FR 59300), we requested comment on the

margin assessment, at the time of partial

rate of $19,370.82. Consequently, we are modifying our

pulse generator for a neurostimulator Transvenous Phrenic Nerve Stimulation

Trial of Aquablation vs Transurethal Resection of Multinational Study of Prostatic Urethral Lift

77 As discussed in section II.A. of this CY 2020

from application of the office-based amount. potential designation as office-based.

furnished in an ASC involving the marker). procedure is furnished with a surgically

maintaining this measure in the FY 2020 IPPS/

documents/2019-Summary-ASC-QC-Measures.pdf. Serious_Reportable_Events_in_ Gynecologists. ACOG committee opinion #464:

period (77 FR 68481 through 68484) for

www.cms.gov/medicare/medicare-fee-for-service- us.ahrq.gov/toolssoftware/ccs_svcsproc/ logistic regression model. Applied Logistic

with comment period beginning with March-2019.pdf. 166 Ibid.

review/adjustment of prior Response: In developing this prior Comment: We received comments

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