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DEPARTMENT OF HEALTH AND DATES: via email [email protected] or HUMAN SERVICES Effective date: This final rule is at 410–786–4142 or Mitali Dayal via effective on January 1, 2020. email [email protected] 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 [CMS–1717–FC] Bhatia via email Anita.Bhatia@ 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 [email protected] 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 [email protected] 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. [email protected] or at 410– AGENCY: Centers for Medicare & 2. By regular mail. You may mail 786–9222. Medicaid Services (CMS), HHS. written comments to the following Composite APCs (Low Dose ACTION: Final rule with comment period. address ONLY: Centers for Medicare & Brachytherapy and Multiple Imaging), Medicaid Services, Department of SUMMARY: contact Elise Barringer via email This final rule with comment Health and Human Services, Attention: [email protected] or at 410– period revises the Medicare hospital CMS–1717–FC, P.O. Box 8013, 786–9222. outpatient prospective payment system 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. [email protected] 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 [email protected] 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: [email protected] 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 [email protected] 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), [email protected] or at 410– to apply for available slots for purposes contact the HOP Panel mailbox at 786–8819. of indirect medical education (IME) and [email protected]. 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

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[email protected] or at 410– Payment Policy Mailbox at Current Procedural Terminology (CPT) 786–9222. [email protected]. 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 [email protected] 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 [email protected] or at [email protected] 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 [email protected] or at 410– [email protected] or at Association (AMA). Applicable Federal 786–4142. 410–786–9732. Acquisition Regulations (FAR and No Cost/Full Credit and Partial Credit Defense Federal Acquisition Regulations Devices, contact Scott Talaga via email Skin Substitutes, contact Josh (DFAR) apply. [email protected] or at 410– McFeeters via email Joshua.McFeeters@ 786–4142. cms.hhs.gov or at 410–786–9732. Table of Contents Notice of Closure of Two Teaching Supervision of Outpatient I. Summary and Background Hospitals and Opportunity to Apply for Therapeutic Services in Hospitals and CAHs, contact Josh McFeeters via email A. Executive Summary of This Document Available Slots, contact Michele B. Legislative and Regulatory Authority for Hudson via email Michele.Hudson@ [email protected] 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 Factor, Copayments, Cost-to-Charge to the CY 2020 OPPS/ASC Proposed email [email protected] 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 Inspection of Public Comments: All Comment Period via email [email protected] or 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 [email protected] 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 [email protected] personally identifiable or confidential C. Wage Index Changes D. Statewide Average Default Cost-to- or at 410–786–9732. business information that is included in 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 [email protected] 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 [email protected] 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 [email protected] 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 IV. OPPS Payment for Devices [email protected]. the Federal Register as part of the annual OPPS/ASC proposed and final A. Pass-Through Payments for Devices OPPS Status Indicators (SI) and 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 [email protected] 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- [email protected] or at Medicare-Fee-for-Service-Payment/ Through Payment Status 410–786–8687, or Diane Corning via HospitalOutpatientPPS/index.html. The VI. Estimate of OPPS Transitional Pass- Through Spending for Drugs, Biologicals, email at [email protected] 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

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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 In this final rule with comment A. CY 2020 OPPS Payment Status Indicator 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 XX. Comments Received in Response to under the Hospital Outpatient Surgical Procedures and Covered Comment Solicitation on Cost Reporting, Prospective Payment System (OPPS). Ancillary Services Maintenance of Hospital Chargemasters, Specifically, section 1833(t)(9)(A) of the 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, F. ASC Payment and Comment Indicators XXII. Notice of Closure of Two Teaching and the wage and other adjustments that Hospitals and Opportunity To Apply for G. Calculation of the ASC Payment Rates take into account changes in medical and the ASC Conversion Factor Available Slots XXIII. Files Available to the Public via the practices, changes in technologies, and XIV. Requirements for the Hospital the addition of new services, new cost Outpatient Quality Reporting (OQR) Internet 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 Outpatient Quality Reporting (OQR) XXV. Response to Comments C. Administrative Requirements Program and the ASC Quality Reporting D. Form, Manner, and Timing of Data XXVI. Economic Analyses 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 and Requirements for Certain Hospital Public a List of Their Standard Charges services; revise the conditions for and Request for Information (RFI): Outpatient Department (OPD) Services 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

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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

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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 For the CY 2020 OPPS/ASC, we are therapeutic services provided by all distributional impact of all the OPPS hospitals and CAHs. This ensures a establishing an OPD fee schedule changes on various groups of hospitals increase factor of 2.6 percent and standard minimum level of supervision 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 teaching status, we estimate • Ambulatory Surgical Center Quality (including general acute care hospitals, 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 2020 payments to CMHCs relative to volume of the following five categories 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. update to ASC payment rates will • c. Impacts of the Rural Adjustment and 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.

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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.

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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— • May advise on the clinical integrity personalized prevention plan services. implement statutory requirements and of Ambulatory Payment Classification The Secretary exercises the authority changes arising from our continuing (APC) groups and their associated granted under the statute to also exclude experience with this system. These rules 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 • Notices.html. Is governed by the provisions of the nonphysician practitioners paid under 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 1. Authority of the Panel designated by the Secretary. beneficiaries with end-stage renal 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

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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 Proposed Rule In addition, the Panel has established 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 G. Public Comments Received on the CY changes, we used approximately 88 responsible for studying the data issues 2019 OPPS/ASC Final Rule With million final action claims to develop confronting the Panel and for Comment Period the proposed CY 2020 OPPS payment 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.

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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.

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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 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 policy. Since the initial 4-year would use all claims with valid CT and commenter stated that some CT and

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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 centers provide useful cost and charge of reporting direct CT and MRI services. codes in the Medicare Physician Fee data for ratesetting purposes. Several commenters requested that CMS 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. rate and includes data representing 50 CT and MRI cost centers, and reducing Response: We appreciate the 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

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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 page on the CMS website on which this under the OPPS. As required by law, for OPPS payment amount. We will final rule with comment period is certain imaging series paid for under the continue to monitor OPPS imaging posted (http://www.cms.gov/Medicare/ MPFS, we cap the technical component payments in the future and consider the Medicare-Fee-for-Service-Payment/ of the PFS payment amount for the potential impacts of payment changes HospitalOutpatientPPS/index.html) applicable year at the OPPS payment 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 impact the CT and MRI CCRs may have of claims derived at each stage of the

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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 2. Final Data Development and scaled relative weights, on which over an 80 percent decline from the CY Calculation of Costs Used for Ratesetting payments are based using APC median 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

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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

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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

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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 2-year period for which we normally in the absence of claims data and rule, for CY 2020, we proposed to use cross-walk new HCPCS codes. We established a payment rate using 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 proposed CY 2020 payment rate at the (2) Brachytherapy Sources period (74 FR 60537). We proposed to 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 (Brachytherapy source, non-stranded, HCPCS code C2645 (Brachytherapy radioactive source) (‘‘brachytherapy not otherwise specified, per source), at planar source, palladium-103, per sources’’) separately from other services a rate equal to the lowest stranded or square millimeter) for CY 2020 will or groups of services. The statute nonstranded prospective payment rate preclude outpatient use for an FDA- provides certain criteria for the for such sources, respectively, on a per cleared, predominantly outpatient additional groups. For the history of indication, for C2645. Additionally, the source basis (as opposed to, for OPPS payment for brachytherapy commenter argued that the two claims example, a per mCi), which is based on sources, we refer readers to prior OPPS used to establish the payment rate for the policy we established in the CY final rules, such as the CY 2012 OPPS/ C2645 are not a sufficient volume for 2008 OPPS/ASC final rule with ASC final rule with comment period (77 ratesetting and that the claims are most comment period (72 FR 66785). We also FR 68240 through 68241). As we have 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

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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

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(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

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(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 APC, we designate the most costly reported in conjunction with the ‘‘J1’’ particular code combination of ‘‘J1’’ service (at the HCPCS code level) as the primary service code does not qualify 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

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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 overpayment. As mentioned previously, margin assessment, at the time of partial believe that further modifications to the we do not create new APCs with a mastectomy, with report—be assigned to 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

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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

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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

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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 rule with comment period (83 FR Services that are assigned to New assign the service to an appropriate 58847), we proposed excluded payment Technology APCs are typically new clinical APC. 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 through 1599 and APCs 1901 through payment for the procedures. Beginning 0100T (Placement of a subconjunctival 1908) from being packaged when in CY 2002, we retain services within retinal prosthesis receiver and pulse New Technology APC groups until we included on a claim with a ‘‘J1’’ service generator, and implantation of assigned to a C–APC. For CY 2020, we gather sufficient claims data to enable intraocular retinal electrode array, with us to assign the service to an proposed to continue to exclude vitrectomy), which involves the use of payment for any procedure that is appropriate clinical APC. This policy the Argus® II Retinal Prosthesis System. allows us to move a service from a New assigned to a New Technology APC However, several of these claims were from being packaged when included on Technology APC in less than 2 years if not available for ratesetting because sufficient data are available. It also a claim with a ‘‘J1’’ service assigned to HCPCS code 0100T was reported with a a C–APC. allows us to retain a service in a New ‘‘J1’’ procedure and, therefore, payment Technology APC for more than 2 years Some stakeholders have raised was packaged into the associated C– if sufficient data upon which to base a questions about whether the policy APC payment. If these services had been decision for reassignment have not been established in the CY 2019 OPPS/ASC separately paid under the OPPS, there collected (82 FR 59277). final rule with comment period would 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 clinical APC for the new service was the most appropriate clinical APC. services. We would not generally expect

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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,

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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 comment period (73 FR 68559 through established for APC 5863 for all of the order to reflect and promote the 68569). specified mental health services 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); We did not receive any public with our established methodology as • APC 8007 (MRI and MRA without comment on these proposals. Therefore, stated in the CY 2014 OPPS/ASC final 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

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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

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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 include costs associated with higher dependent, or adjunctive items and as a result a significant percentage of

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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 rules, add-on codes do not represent rule with comment period (82 FR incentives for hospitals to furnish standalone procedures and are inclusive 59244), we recognize that blue light services most efficiently and to manage to other procedures performed at the cystoscopy represents an additional their resources with maximum same time (79 FR 66818). We continue elective but distinguishable service as flexibility. Our packaging policies to believe it is unnecessary to provide compared to white light cystoscopy that, support our strategic goal of using larger separate payment for the previously in some cases, may allow greater payment bundles in the OPPS to mentioned add-on codes at this time. detection of bladder tumors in 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 (1) Background on OPPS/ASC Non- time, and other resources required to separate payment for add-on codes for Opioid Pain Management Packaging perform blue light cystoscopy in Fractional Flow Reserve Studies (FFR/ Policies addition to white light cystoscopy, in 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

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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 reviewed available literature with appropriately packaged under the OPPS. In addition to stakeholder feedback respect to Exparel®, including a briefing Commenters who responded to the CY regarding OPPS packaging policies in 2018 OPPS/ASC proposed rule document 9 submitted for FDA Advisory response to the CY 2019 OPPS/ASC expressed a variety of views on Committee Meeting held February 14– proposed rule, the President’s packaging under the OPPS. In the CY 15, 2018, by the manufacturer of 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 4 believe that the OPPS packaging policy immediate postsurgical pain ....’’ ® 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 surgery for purposes of our drug and comments on the CY 2018 OPPS/ASC medications to patients for postsurgical biological surgical supply packaging final rule with comment period (82 FR 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.12 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. stated in the CY 2018 OPPS/ASC final 11-1-2017.pdf. 9 Food and Drug Administration, Meeting of the 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. 2011/022496s000lbl.pdf. 7 Available at: https://www.hhs.gov/about/news/ 10 Ibid, page 9. 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.

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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 in the OPPS Medicare utilization of Secretary identifies revisions to ® 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- The total number of claims reporting the Secretary to, as determined appropriate, ® 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 million units. The number of claims alternatives, for the CY 2020 OPPS/ASC ® 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. The results of our review and separately at ASP + 6 percent for the specific non-opioid alternatives, evaluation of our claims data do not cost of non-opioid pain management 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 we would continue to analyze the issue discouraging the use of non-opioid policies have reduced the use of non- of access to non-opioid alternatives in treatments for postsurgical pain opioid alternatives. We focused on the hospital outpatient department management in the hospital outpatient covered OPD services for this review, setting and in the ASC setting as we department. Therefore, based on this including services assigned to C–APCs, implemented section 6082 of the data evaluation, we stated in the surgical APCs, and other pain Substance Use–Disorder Prevention that proposed rule that we do not believe management services. We believed that Promotes Opioid Recovery and that changes are necessary under the 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

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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. management drugs presents a blocks (including a disposable We provide a summary of the widespread barrier to their use. elastomeric pump that delivers non- 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

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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. Omidria is indicated for maintaining percent of the OPPS rate. Therefore, prescription opioid use and addiction as pupil size by preventing intraoperative fluctuations in payment rates for well as evidence that the current miosis and reducing postoperative specific services may impact these packaged payment for such non-opioid ocular pain in cataract or intraocular providers more acutely than hospital alternatives presents a barrier to access surgeries. The commenters stated that outpatient departments, and as a result, to care and therefore warrants revised, the available data and multiple peer- ASCs may be less likely to choose to including possibly separate, payment reviewed articles on Omidria meet the furnish non-opioid postsurgical pain under the OPPS. We also stated that section 6082 criteria for packaging management treatments, which are 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 that ASCs do not typically report for fentanyl during surgeries and alternatives should align with available packaged items and services and, another commenter stated that Omidria Medicare claims data. accordingly, our analysis may be reduces opioid use after cataract 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

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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

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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

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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

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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 B. Conversion Factor Update well as a 0.9988 proposed budget 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 percent cap on wage index decreases is Protection and Affordable Care Act of 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

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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.

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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 Under 42 CFR 419.41(c)(1) and fee schedule increase factor of 2.6 FR 49971; for FY 2016, 80 FR 49498; for 419.43(c) (published in the OPPS April percent for CY 2020, the required wage FY 2017, 81 FR 56922; for FY 2018, 82 7, 2000 final rule with comment period index budget neutrality adjustment of FR 38142; and for FY 2019, 83 FR (65 FR 18495 and 18545)), the OPPS approximately 0.9981, and the 41380. We did not receive any public adopted the final fiscal year IPPS post- adjustment of 0.88 percentage point of 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 proposed rule (84 FR 39430), we are 2020 of $80.784. market differences. Therefore, the wage 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

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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. comment period (81 FR 79598), we decrease in a hospital’s final wage index CBSAs are made up of one or more adopted the revisions to the OMB from the hospital’s final wage index in constituent counties. Each CBSA and statistical area delineations contained in FY 2019, as a proposed transition wage constituent county has its own unique OMB Bulletin No. 15–01, effective index to help mitigate any significant identifying codes. The FY 2018 IPPS/ January 1, 2017, beginning with the CY negative impacts on hospitals (84 FR LTCH PPS final rule (82 FR 38130) 2017 OPPS wage indexes. 19398). In addition, in the FY 2020 discussed the two different lists of codes IPPS/LTCH PPS proposed rule (84 FR On August 15, 2017, OMB issued OMB Bulletin No. 17–01, which to identify counties: Social Security 19398), we proposed to apply a budget Administration (SSA) codes and Federal neutrality adjustment to the provided updates to and superseded OMB Bulletin No. 15–01 that was issued Information Processing Standard (FIPS) standardized amount so that our on July 15, 2015. The attachments to codes. Historically, CMS listed and used proposed transition wage index for OMB Bulletin No. 17–01 provide SSA and FIPS county codes to identify hospitals that may be negatively detailed information on the update to and crosswalk counties to CBSA codes impacted (described in item (4) above) the statistical areas since July 15, 2015, for purposes of the IPPS and OPPS wage would be implemented in a budget and are based on the application of the indexes. However, the SSA county neutral manner. Furthermore, in the FY 2010 Standards for Delineating codes are no longer being maintained 2020 IPPS/LTCH PPS proposed rule (84 Metropolitan and Micropolitan and updated, although the FIPS codes FR 19398 through 19399), we noted that Statistical Areas to Census Bureau continue to be maintained by the U.S. our proposed adjustment relating to the population estimates for July 1, 2014 Census Bureau. The Census Bureau’s 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

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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 supported the proposal to increase the 2020 OPPS wage index, we referred for the impacted areas. Another wage index for low wage index readers to section II.B. of the CY 2020 commenter strongly opposed decreasing hospitals but wanted it implemented in OPPS/ASC proposed rule. We stated payments to some or all hospitals to a non-budget neutral manner. They that we continue to believe that using offset an increase in the area wage index believe this would mitigate disparities the IPPS wage index as the source of an for low wage index hospitals and did for median wage index hospitals. adjustment factor for the OPPS is not believe the rationale in the FY 2020 Several commenters opposed the reasonable and logical, given 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 hospitals as well as the transition wage we received regarding our proposal to budget neutrality adjustment for all index adjustment to ensure that no use the final FY 2020 hospital IPPS hospitals to offset the increase in hospital’s wage index decreases by more post-reclassified wage index for urban payments for low wage index hospitals than 5 percent. This commenter and rural areas as the wage index for the would result in a significant loss of believed that these adjustments OPPS, including any adjustments for the resources for patient care in other negatively impact hospitals in the final FY 2020 IPPS post-reclassified hospitals. While these commenters bottom quartile of wage index that wage index as discussed above, along understood and appreciated the goal of 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

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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 HOPD within the hospital overall, as reform from Congress, we believe it is IPPS/LTCH PPS final rule (84 FR 42331 proposed, we are finalizing the use of appropriate to revise the rural floor through 42332), we did not finalize our the FY 2020 hospital IPPS post- calculation as part of an effort to reduce budget neutrality proposal to decrease reclassified wage index for urban and wage index disparities. Regarding the wage index for hospitals with wage rural areas as the wage index under the CMS’s statutory authority to exclude the index values above the 75th percentile OPPS to determine the wage wage data of urban hospitals reclassified 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

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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 earlier in this section and in discussed above and in the CY 2020 this policy for CY 2020, and included a the CY 2020 OPPS/ASC proposed rule, OPPS/ASC proposed rule (84 FR 39431), brief summary of the major proposed FY we are finalizing without modification we are finalizing these proposals 2020 IPPS wage index policies and our proposal to use the final FY 2020 without modifications. 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

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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. In the CY 2020 OPPS/ASC proposed provider agreement, and hospitals that comment period (70 FR 68556), we rule (84 FR 58870 through 58871), for have not yet submitted a cost report. finalized a payment increase for rural the CY 2020 OPPS, we proposed to CMS also uses the statewide average sole community hospitals (SCHs) of 7.1 continue the current policy of a 7.1 default CCRs to determine payments for percent for all services and procedures percent payment adjustment that is hospitals whose CCR falls outside the paid under the OPPS, excluding drugs, done in a budget neutral manner for predetermined ceiling threshold for a biologicals, brachytherapy sources, and rural SCHs, including EACHs, for all valid CCR or for hospitals in which the devices paid under the pass-through services and procedures paid under the most recent cost report reflects an all- payment policy, in accordance with OPPS, excluding separately payable inclusive rate status (Medicare Claims section 1833(t)(13)(B) of the Act, as Processing Manual (Pub. 100–04), drugs and biologicals, brachytherapy added by section 411 of the Medicare sources, items paid at charges reduced Chapter 4, Section 10.11). Prescription Drug, Improvement, and We discussed our policy for using to costs, and devices paid under the Modernization Act of 2003 (MMA) (Pub. pass-through payment policy. default CCRs, including setting the L. 108–173). Section 1833(t)(13) of the ceiling threshold for a valid CCR, in the Comment: Several commenters Act provided the Secretary the authority supported the proposal to continue the CY 2009 OPPS/ASC final rule with to make an adjustment to OPPS comment period (73 FR 68594 through 7.1 percent payment adjustment. 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,

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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

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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.

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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 APC payment amount plus $4,825 (the payments. Using an updated claims percent, an amount equal to less than

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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

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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 H. Calculation of an Adjusted Medicare refer readers to the April 7, 2000 OPPS status indicator assignments: ‘‘J1’’, ‘‘J2’’, Payment From the National Unadjusted final rule with comment period (65 FR ‘‘P’’, ‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’, ‘‘Q4’’, ‘‘R’’, ‘‘S’’, Medicare Payment 18496 through 18497) for a detailed ‘‘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

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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. Section 4104 of the Affordable Care index determined under Steps 2 and 3 Hospital OQR Program requirements is Act eliminated the Medicare Part B by the amount determined under Step 1 $598.35. This reduced rate is calculated coinsurance for preventive services that represents the labor-related portion by multiplying the reporting ratio of furnished on and after January 1, 2011, of the national unadjusted payment rate. 0.981 by the full unadjusted payment 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 * $609.94 * 1.2866). The labor-related Xa = .60 * (national unadjusted payment after January 1, 2011, may be found in portion of the reduced national rate) * applicable wage index. section XII.B. of the CY 2011 OPPS/ASC unadjusted payment is approximately final rule with comment period (75 FR Step 5. Calculate 40 percent (the $461.90 (.60 * $598.35 * 1.2866). The 72013). nonlabor-related portion) of the national 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 I. Beneficiary Copayments copayment methodology would result in 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

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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). B is the beneficiary payment percentage. unadjusted payment rate applies will • If HCPCS codes are added to an B = National unadjusted copayment for equal the product of the reporting ratio APC and, after recalibrating its relative APC/national unadjusted payment and the national unadjusted copayment, payment weight, holding its unadjusted rate for APC. or the product of the reporting ratio and copayment amount constant results in 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

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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 1. HCPCS Codes That Were Effective amount of beneficiary copayment that Workgroup. These codes are updated April 1, 2019 for Which We Solicited may be collected for a procedure and changed throughout the year. CPT Public Comments in the CY 2020 OPPS/ performed in a year to the amount of the and Level II HCPCS code changes that ASC Proposed Rule inpatient hospital deductible for that affect the OPPS are published through 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 2019), we recognized several new Level into two principal subsystems, referred reported on Medicare claims) outside of II HCPCS codes for separate payment to as Level I and Level II of the HCPCS. the formal rulemaking process via OPPS under the OPPS. In the CY 2020 OPPS/ Level I is comprised of CPT (Current quarterly update CRs. Based on our ASC proposed rule (84 FR 39531– Procedural Terminology), a numeric and review, we assign the new codes to 39532), we solicited public comments alphanumeric coding system interim status indicators (SIs) and APCs. on the proposed APC and status maintained by the American Medical These interim assignments are finalized indicator assignments for these Level II Association (AMA), and consist of in the OPPS/ASC final rules. This HCPCS codes, which were listed in Category I, II, and III CPT codes. Level quarterly process offers hospitals access Table 7 of the proposed rule. II, which is maintained by CMS, is a 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

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BILLING CODE 4120–01–C public comments on the proposed APC status indicator assignments for the July 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

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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 As has been our practice in the past, Specifically, for CY 2020, we proposed that we are assigning them an interim we incorporate those new HCPCS codes to include in Addendum B to the CY 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 public through the October OPPS to these public comments in the OPPS/ Addendum B to this CY 2020 OPPS/

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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. Further, we reminded readers that the comment and our response can be found codes that we receive in a timely CPT code descriptors that appear in in section V.B.7 (Skin Substitutes) of manner from the AMA’s CPT Editorial Addendum B are short descriptors and this CY 2020 OPPS/ASC final rule with Panel, we finalized our proposal to do not accurately describe the complete comment period. 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

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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 1. Background APC group the costs associated with 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. to as Ambulatory Payment procedure.

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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 3. APC Exceptions to the 2 Times Rule 39452), for CY 2020, we proposed that 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 • Resource homogeneity; procedure code for which there are • the hospital outpatient setting. fewer than 99 single claims and that Clinical homogeneity; • Hospital outpatient setting 2. Application of the 2 Times Rule comprises less than 2 percent of the single major claims within an APC will utilization; 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 changes in technology, the addition of described above to identify the APCs for as for certain low-volume items and new services, new cost data, and other which we proposed to make exceptions services. relevant information and factors. under the 2 times rule for CY 2020, and 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

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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 In summary, Table 11 below lists the proposed rule. Specifically, APC 5672 and Related Services); 17 APCs that we are excepting from the (Level 2 Pathology) and APC 5733 • APC 5731 (Level 1 Minor 2 times rule for CY 2020 based on the (Level 3 Minor Procedures) no longer Procedures); criteria described earlier and a review of met the criteria for exception to the 2 • APC 5734 (Level 4 Minor updated claims data for dates of service times rule in this final rule with Procedures); 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.

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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 New Technology APC configurations generally reflect the costs that are their entire patient base (Medicare

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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 regarding the clinical aspects of new procedure code from the most recent 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

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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 a. Magnetic Resonance-Guided Focused 0398T from year to year and the authority under section 1833(t)(2)(E) of Ultrasound Surgery (MRgFUS) (APCs relatively small number of claims the Act to calculate the geometric mean, 1575, 5114, and 5414) available to establish a payment rate for 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

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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.

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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 CY 2017 to CY 2020, the payment rate within the same New Technology APC 11 above lists the final CY 2018 status

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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 ® 2017. We noted that this payment rate Argus II procedure based on the 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

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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

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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 Effective January 1, 2019, CMS $8,500. We have not received any 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 Comment: One commenter supported transfusion services may test and use 6- 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 (New Technology—Level 34 ($8,001- 59281), HCPCS code P9100 is used to contamination.

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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 CY 2020. We sought public comments implantation of intraocular retinal comments, we are finalizing our on this proposal. electrode array, with vitrectomy) of proposal to assign HCPCS code P9100 to $122,500.50 rather than the payment New Technology APC 1494 (New Comment: Multiple commenters rate generated by the most recent year Technology—Level 1D ($31–$40)), with requested that we retain the CY 2019 of claims data of $95,000.50; (2) a CY a payment rate of $35.50. OPPS APC assignment of APC 1516 (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

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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. Our analysis found that the geometric claims data from CY 2018, which is the Comment: Several commenters mean cost for CPT code 0503T was first year the service was payable in the reported that certain societies submitted $768.26, the arithmetic mean cost for OPPS. For ratesetting for CY 2018 and a new technology application to CMS CPT code 0503T was $960.12 and that CY 2019, there were no claims data for CPT codes 78431, 78432, and 78433 the median cost for CPT code 0503T available showing the cost of the that details the costs associated with service. Also, there were no services was $900.28. Of the three cost methods, the highest amount was for the providing these services. For CPT code identified as comparable to CPT code 78431, these same commenters 0503T, which meant we could not arithmetic mean. The arithmetic mean falls within the cost band for New disagreed with the proposed APC estimate the cost of CPT code 0503T by placement and recommended its using the cost of a similar service. Technology APC 1511 (New Technology—Level 11 ($901–$1000)) reassignment from APC 5594 (Level 4 Accordingly, we previously based Nuclear Medicine and Related Services) pricing for the service on pricing with a payment rate of $950.50. The arithmetic mean helps to account for with a proposed payment rate of information provided by the developer $1,466.16 to APC 1522 (New of the procedure. some of the higher costs of CPT code 0503T identified by the commenters Technology—Level 23 ($2501–$3000)) We recognize that there was a low with a proposed payment rate of volume of claims for HeartFlow based that may not have been reflected by either the median or the geometric $2,750.50. They reported that, based on on the data available for the proposed the resource cost of the service rule and, thus, we should have applied mean. We acknowledge the commenters’ concern and recognize that described by CPT code 78431, APC 1522 the low-volume policy for new provides adequate reimbursement for technology services in the proposed it may be theoretically possible that the reported cost of CPT code 0503T is the service. Similarly, for CPT codes rule. 78432 and 78433, the commenters However, for the final rule, using the higher than what we calculated from the claims data due to some providers indicated that APC 5594 would not most recently available data, there are adequately cover the resource costs now 957 total claims billed with CPT reporting costs lower than actual costs for the service. However, we rely on associated with these procedures, and code 0503T and 101 single frequency recommended their reassignment to claims. We appreciate the concerns of hospitals to bill all CPT codes accurately in accordance with their code APC 1523 (New Technology—Level 23 the commenters who stated that there ($2501–$3000)) with a proposed were not enough claims billed with descriptors and CPT and CMS instructions, as applicable, and to report payment rate of $ 2,750.50 HeartFlow to use claims data to revise charges on claims and charges and costs the rate for HeartFlow. While 101 single Response: Based on the information on their Medicare hospital cost reports claims is above the threshold we provided in the new technology appropriately. In addition, we do not established for low-volume services application, and the comments received, specify the methodologies that hospitals assigned to a new technology APC, we we are revising the APC assignments for must use to set charges for this or any agree with the commenters that a these codes. Specifically, we are other service. payment reduction of nearly 50 percent revising the APC assignment for CPT After consideration of the public code 78431 from APC 5594 to APC is significant for a new technology that comments we received, we are utilizing still has relatively low volume. 1522, and reassigning CPT codes 78432 our new technology low-volume and 78433 from APC 5594 to APC 1523. Accordingly, given the low number of 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).

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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).

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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 OPPS based on our analysis of the latest (Level 3 Neurostimulator and Related 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 rule claims data as well as clinical period, the geometric mean cost for CPT Addendum B to the CY 2020 OPPS/ASC review of the services described, we code 0268T supports its reassignment proposed rule, we proposed to reassign proposed to revise the APC assignment from APC 5463 to APC 5464. both codes to APC 5464 (Level 4 for both CPT codes 0266T and 0268T to Specifically, our claims data show a Neurostimulator and Related APC 5464. In our analysis of CPT code geometric mean cost of approximately 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 APC 5464, rather than the geometric TM implantation or replacement of the associated with the Barostim Neo 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 CMS to finalize the APC assignment. data for CPT code 0266T, we believed pulse generator alone (CPT code 0268T).

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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.

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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. with a proposed payment rate of • CY 2018 OPPS payment rate: $456.34

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• 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 Response: For CY 2020, based on appropriate to place one code in a for the services on their Medicare claims submitted between January 1, specific grouping, based on our 2 times hospital cost report. Also, we do not 2018 through December 30, 2018, that rule criteria, we must assign the code to specify the methodologies that hospitals were processed on or before June 30, the appropriate APC based on its use to set charges for this or any other 2019, our analysis of the latest claims geometric mean cost. service. Furthermore, we state in data for this final rule continues to In summary, after consideration of the Chapter 4 of the Medicare Claims support our proposal of assigning CPT public comments, we are finalizing our Processing Manual that ‘‘it is extremely code 75561 to APC 5572. Specifically, proposal, without modification, to important that hospitals report all our claims data show a geometric mean assign CPT code 75561 to APC 5572. HCPCS codes consistent with their cost of approximately $413 for CPT code The final CY 2020 payment rate for CPT descriptors; CPT and/or CMS code 75561 can be found in Addendum 75561 based on 14,350 single claims instructions and correct coding B to this final rule with comment (out of 18,118 total claims), which is principles, and all charges for all period. In addition, we refer readers to comparable to the geometric mean cost services they furnish, whether payment Addendum D1 of this final rule with of about $359 for APC 5572, rather than for the services is made separately paid comment period for the status indicator the geometric mean cost of or is packaged’’ to enable CMS to (SI) meanings for all codes reported approximately $660 for APC 5573. The establish future ratesetting for OPPS under the OPPS. Both Addendum B and geometric cost of approximately $413 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:

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• 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 physician review and return of expensive capital equipment, and added utilization and does not set its payment interpretation of the results in an that the CardioFlux System costs about rates based on initial projections of low estimated 5 minutes per patient. $1.5 million with a useful life of seven 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.

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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 codes will be effective January 1, 2020. homogeneity and resource costs. As advisors, we believe that we should

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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. codes 66987 and 66988 to APC 5492 for after our analysis, we agree with We note that we will reevaluate the CY 2020. Table 19 lists the final SI and commenters that the resources APC assignments for CPT codes 66987 APC assignments for the two codes. The associated with the new codes are and 66988 once we have claims data. higher than the routine cataract and ECP final CY 2020 payment rate for the codes can be found in Addendum B to We review, on an annual basis, the APC procedures when performed by assignments for all services and items themselves. Therefore, we are this final rule with comment period. In addition, we refer readers to Addendum paid under the OPPS based on the latest reassigning the new codes from APC D1 of this final rule with comment claims data that we have available. 5491 to APC 5492. period for the status indicator (SI) BILLING CODE 4120–01–P

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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 T-cell therapy is a cell-based gene attack certain cancerous cells and the Pharmaceuticals Corporation) was

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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

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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.

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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 which had a proposed payment rate of to assign CPT codes 45349 and 45390 to public comment, we are finalizing our $2,512.28, for CPT code 45349 and APC 5312 (Level 2 Lower GI 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 The final CY 2020 payment rate for the Comment: A commenter believed that assignment for both codes is APC 5313. 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 As we do every year, we will lesions by hot biopsy forceps, bipolar 45390 based on 10,212 single claims reevaluate the APC assignment for CPT cautery or snare technique); and (out of 10,246). In both instances, the • 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

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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, 2016, section 1834(p) of the Act reduces decreased reimbursement for cardiac Response: CPT codes 75572, 75573, CT. Some commenters added that the payment for the technical component and 75574 were effective January 1, (TC) of applicable CT services paid exams described by CPT codes 75572, 2010, and prior to that they were 75573, and 75574 require more under the MPFS and applicable CT described by Category III CPT codes services paid under the OPPS, with a 5- resources than the contrast-enhanced from January 1, 2006 through December studies in APC 5571 because they percent reduction required in 2016 and 31, 2009; therefore, we have many years a 15-percent reduction required in 2017 require more time, are performed by of claims data associated with these highly trained technologists, involve and subsequent years. The applicable services. For this final rule with higher risk patients, require CT services are identified by HCPCS comment period, based on claims administration of vasoactive codes 70450 through 70498; 71250 submitted between January 1, 2018 medications, and require close through 71275; 72125 through 72133; through December 30, 2018, that were supervision of patients during and after 72191 through 72194; 73200 through processed on or before June 30, 2019, the procedure. A commenter urged CMS 73206; 73700 through 73706; 74150 our analysis of the latest claims data for to reassign the codes to a higher paying through 74178; 74261 through 74263; this final rule supports maintaining CPT APC that is more resource intensive and and 75571 through 75574 (and any codes 75572, 75573, and 75574 in APC includes procedures that share similar succeeding codes) for services furnished 5571. Specifically, our claims data show clinical characteristics, such as APC using equipment that does not meet 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 code 75574 to APC 5191 (Level 1 cost of about $359) the HCPCS codes we identified (and any

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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.

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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

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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 proposed rule on the proposed APC for CY 2019, we found that the comments received related to this code

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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: CY 2018 OPPS/ASC final rule, the CY • 50590 based on 40,009 single claims 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 cost, we believe that maintaining CPT CMS’s calculation or the accuracy of the (Cystourethroscopy, with ureteroscopy code in APC 5374 is more appropriate cost data upon which CMS relied to and/or pyeloscopy; with lithotripsy than reassigning it to APC 5375, based determine the payment rates. In including insertion of indwelling on the geometric mean cost of CPT code addition, these same commenters ureteral stent (e.g., gibbons or double-j 50590 relative to that of APCs 5374 and suggested that because hospitals do not type)). 5375. generally own lithotripters, they would In addition, some commenters 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

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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 Category B IDE study is approved for include the packaged cost of the 11. Extravascular Implantable Medicare coverage. The commenter devices. However, the CPT code 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 consistent with their descriptors; CPT been approved for Medicare coverage, 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

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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 64624, and 64625 were listed as 6XX00, suggested that it would be more 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, CMS placeholder codes), respectively, descriptors, and also in Addendum B to 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 We also proposed to assign CPT code be accepted on their proposed status joint nerve(s), with imaging guidance

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(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 three nerves. Most commenters agreed rule with comment period. In addition, agree with the commenters that this new that the procedure is not a nerve we refer readers to Addendum D1 of procedure shares similar characteristics injection. One commenter explained this final rule with comment period for 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 the internet on the CMS website. destruction is typically done via 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.

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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 (conditionally packaged) with a and suggested that we reassign the procedures, specifically CPT codes

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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 is not payable by Medicare when 0567T and 0568T. The final status study the uterus. submitted on outpatient claims (any indicator assignments for both codes are 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 2019. Both HCPCS codes were assigned procedure is over $12,500. The proposed SI and APC assignments, we

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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.

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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.

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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 payment weight has been based on its 0308T from APC 5495 to APC 5493 0308T to the APC 5494 (Level 4

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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

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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 Response: We believe these available via the internet on the CMS through 95712, 95714, and 95715 to the commenters did not fully understand website). 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

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BILLING CODE 4120–01–C continued to apply a six-level structure establishment of additional levels. 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 Prior to the CY 2016 OPPS, payment the current Level 5 and Level 6 within level and provided clinical for musculoskeletal procedures was the Musculoskeletal APC series. While homogeneity. However, we indicated primarily divided according to anatomy some commenters provided suggested that we would continue to review the and the type of musculoskeletal APC reconfigurations and requests for structure of these APCs to determine procedure. As part of the CY 2016 change to APC assignments, many 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 with comment period (82 FR 59300), we requested comment on the

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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. procedures that were proposed to be list in the CY 2018 OPPS/ASC final rule We also proposed to remove the removed from the inpatient only (IPO) with comment period (82 FR 59382 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 of that inaccurate data would be short with their code descriptors and CPT and for the services is made separately paid

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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 provides adequate reimbursement for final rule, we are also finalizing the 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 associated with providing these 19. Nuclear Medicine Services indicator assignments. We note that these codes will be effective January 1, services, and recommended their 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 code 78429 (placeholder code 78X29) imaging, positron emission tomography the information provided in the new and recommended its reassignment (pet), metabolic evaluation) to APC 5593 technology application and the public from APC 5593 to APC 5594. They (Level 3 Nuclear Medicine and Related comments received, we are revising the Services) with a proposed payment rate stated that APC 5593 does not recognize the additional cost associated with the APC assignments for these codes. of $1,293.33. Similarly, we proposed to Specifically, we are revising the APC maintain the APC assignments for CPT CT scan that is included in the service, assignment for CPT code 78431 from codes 78491 (Myocardial imaging, and requested revising the code to APC 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 reassign CPT code 78429 from APC proposed payment rate of $1,466.16. application that provided the estimated 5593 to APC 5594. Comment: Commenters agreed with costs for the services and described the the APC assignments for CPT codes Comment: Several commenters agreed with the APC placement for CPT code components and characteristics of the 78459, 78491, and 78492 and stated new codes, we are finalizing our they are placed appropriately in APCs 78430 (placeholder code 78X31) in APC proposal, with modification, to assign 5593 and 5594. Some commenters 5594. They stated that APC 5594 allows CPT codes 78429, 78431, 78432, and added that the cost associated with CPT adequate payment for the CT scanner 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 BILLING CODE 4120–01–P 1523, and 5594) 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

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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.

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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

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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 margin assessment, at the time of partial

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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 associated with the MarginProbe that we have assigned to status indicator 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 ‘‘To the extent that a service for which the discretion not to package an 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 note that the preamble language the assigning separate payment for CPT example, is ‘truly new,’ as we explained that 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. that CMS assign CPT code 0546T to same operative session as the Finally, because CPT code 0546T independent procedure, we have New Technology APC 1518 (New describes an intraoperative service that packaged the payment for the Technology—Level 18 ($1601-$1700)) is performed during a mastectomy radiofrequency spectroscopy into the with a proposed payment rate of procedure, we are finalizing our OPPS payment for the primary surgical $1,650.50, and indicated that the 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.

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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.

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22. remede¯® 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 remede¯® System. Of the 13 Response: Based on our evaluation of that the procedure does not occur codes, we received a comment on the frequently. APC assignment for three codes, the procedure associated with CPT code 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. rate of $19,370.82. 2020. Consequently, we are modifying our

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proposal and reassigning CPT code system that is described by CPT code Therapy or remede¯® 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 reported under the OPPS for CY 2020. agree that the resources associated with 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

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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 In CY 2019, CPT code 88307 (Level code 88307 shows a geometric mean accurate estimate of service/procedure V—surgical pathology, gross and cost of approximately $219, which is level costs at the CPT code level. The microscopic examination) was assigned more appropriate in APC 5673 whose commenter stated that the hospital to APC 5673 (Level 3 Pathology) with a geometric cost is approximately $277 charge-based cost data used for OPPS payment rate of $274.22. For CY 2020, compared to the geometric mean cost of 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. homogeneous APCs. urged CMS to continue to assign CPT 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 For the proposed rule, the OPPS added that the proposed reassignment 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. the CMS website). the data do not identify actual costs for However, for the final rule, the OPPS 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 differences. The commenter also rule with comment period, we agree OPPS.

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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 Chapter 4 of the Medicare Claims rate of $7,452.66 effective July 1, 2017. $6,250, and requested a reassignment to We announced the SI and APC Processing Manual that ‘‘it is extremely APC 5376 to enable Medicare important that hospitals report all assignment in the July 2017 OPPS beneficiaries to continue to receive the quarterly update CR (Transmittal 3783, HCPCS codes consistent with their treatment. They stated based on their Change Request 10122, dated May 26, descriptors; CPT and/or CMS projections that maintaining the APC 2017). instructions and correct coding 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 prostate ablation procedures or modify APC 5376 to APC 5375 with a payment maintaining HCPCS code C9747 in APC the organization of HCPCS codes within rate of $4,020.54. We note that the 5375. Specifically, our claims data the urology family of APCs. The payment rates for CY 2019 were based shows a geometric mean cost of commenter specifically noted that a on claims submitted between January 1, approximately $5,850 for HCPCS code reorganization for APCs 5374 through 2017 through December 30, 2017, that C9747 based on 264 single claims (out 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:

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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 technology application for the the APC assignment for new CPT code for CPT code 0549T, which represents

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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 the status indicator (SI) meanings for all instructions, and to appropriately report 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), the OPPS Addendum B of the CY 2018 between January 1, 2017 and December which is described by CPT code 53852

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(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 guidance) to status indicator ‘‘E1’’ to We also assigned the code to comment August 29, 2019. The commenter also

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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. IV. OPPS Payment for Devices payment rate of $ 17,500.50; or 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 1. Beginning Eligibility Date for Device payment rate of $17,465.94. payments into the costs of the Pass-Through Status and Quarterly The commenter explained that the procedures with which the devices are Expiration of Device Pass-Through VaporBlate procedure involves the reported in the claims data used to set Payments transurethral ablation of malignant 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 through payment, as implemented at 42 involves transurethral radiofrequency As stated earlier, section generated water vapor thermal therapy CFR 419.66, is to facilitate access for beneficiaries to the advantages of new 1833(t)(6)(B)(iii) of the Act requires that, for benign prostatic hyperplasia (BPH). under the OPPS, a category of devices The commenter added that the resource and truly innovative devices by allowing for adequate payment for these be eligible for transitional pass-through costs associated with the VaporBlate payments for at least 2 years, but not procedure are significantly higher than new devices while the necessary cost data is collected to incorporate the costs more than 3 years. There currently is those for the Rezum procedure. The one device category eligible for pass- Rezum generator (capital equipment) for these devices into the procedure APC rate (66 FR 55861). Under section through payment: C1823 Generator, used in CPT code 53854 costs $32,500 neurostimulator (implantable), and the Rezum supply kit (disposables) 1833(t)(6)(B)(iii) of the Act, the period for which a device category eligible for nonrechargeable, with transvenous costs between $1,000 and $1,500, while sensing and stimulation leads), which the VaporBlate generator (capital transitional pass-through payments under the OPPS can be in effect is at was established effective January 1, equipment) used to perform the 2019. The pass-through payment status procedure described by the VaporBlate least 2 years but not more than 3 years. Prior to CY 2017, our regulation at 42 of the device category for HCPCS code procedure costs $80,000 and the supply C1823 will end on December 31, 2021. kits (disposables) cost $12,500 each. CFR 419.66(g) provided that this pass- through payment eligibility period HCPCS code C1823 will continue to Based on the clinical and cost receive pass-through status in CY 2020. differences, the commenter stated that began on the date CMS established a 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 pass-through status expiration date for a (Rezum procedure). 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).

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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. annual rulemaking cycle or material or supply furnished incident to ® TM a service (for example, a suture, withdrawing their application from (1) Surefire Spark 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

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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 ® TM in areas inaccessible to the systemic Surefire Spark Infusion System pressure-enabled drug delivery (PEDD) ® TM circulation, a positive hydrostatic believed that that the Surefire Spark valve, a key mechanism of action of the ® TM pressure gradient, and restores Infusion System met the eligibility Surefire Spark 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 ® TM small incision in the groin or the wrist. determined that Surefire Spark 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

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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 TM well as a decrease in the rate of disease concern was that none of the studies supported granting Spark Infusion recurrence and the need for subsequent presented improvements in mortality System transitional pass-through ® TM treatment. with the use of the Surefire Spark 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 cost significance requirements. The microcatheters, 78.9 percent compared noted that overall survival is not an ® to 36.8 percent for initial overall appropriate endpoint for hepatocellular applicant stated that the Surefire SparkTM Infusion System would be response rate (p = 0.008).15 In the carcinoma. They cited National reported with CPT code 37243, which is second study, a multi-center registry of Comprehensive Cancer Network (NCCN) assigned to APC 5193 (Level 3 72 patients demonstrated high response guidelines, noting that tumor necrosis Endovascular Procedures). To meet the rate when compared to historical and pathologic response are primary cost criterion for device pass-through control at 6 months follow-up.16 predictors of success in these cases and locoregional therapy should be viewed payment status, a device must pass all three tests of the cost criterion for at 13 Pasciak AS, McElmurray JH, Bourgeois AC, as a way to transition patients to 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 used APC 5193, which has a CY 2019 liver-directed embolotherapy: a pilot study. J Vasc manufacturer also suggested that CMS should consider that clinical payment rate of $9,669.04. Beginning in Interv Radiol. 2015 May;26(5):660–9. CY 2017, we calculated the device offset 14 improvements vary based on the Kim AY, Frantz S, Krishnan P, DeMulder D, amount at the HCPCS/CPT code level Caridi T, Lynskey GE, et al. (2017) Short-term therapeutic agent being delivered by the instead of the APC level (81 FR 79657). imaging response after drug-eluting embolic trans- SparkTM Infusion System and that these arterial chemoembolization delivered with the CPT code 37243 had a device offset ® agents are approved on a variety of Surefire Infusion System for the treatment of amount of $3,894.69 at the time the hepatocellular carcinoma. PloS one 12.9 (2017): endpoints. e0183861. application was received. According to Response: We appreciate the response ® 15 N Apseloff, J Keung, T Caridi, D Buckley, G to the questions we had regarding the applicant, the cost of the Surefire TM Lynskey, A Kim. Case-control evaluation of endhole SparkTM Infusion System. After Spark Infusion System is $7,750. microcatheter versus Surefire Infusion System for Section 419.66(d)(1), the first cost reviewing the information provided in use during transarterial chemoembolization for significance requirement, provides that hepatocellular carcinoma. Conference abstract the public comment, we agree that the estimated average reasonable cost of presented at 2017 Society of Intervention Radiology while the opportunity for large-scale devices in the category must exceed 25 Annual Congress, March 8, 2017. studies with long-term follow-up is 16 Kapoor B, Contreras F, Katz M, Arepally A, percent of the applicable APC payment limited for a new technology, the Fischman A, Rose S, Kim A, Ferraro J. Surefire 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

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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.

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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 (3) Vagus Nerve Stimulation (VNS) Comment: One commenter, the ® both sensory and motor information to manufacturer, made additional Therapy System for Treatment and from the brain. Importantly, the ® Resistant Depression (TRD) arguments for why the VNS Therapy 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.

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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

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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 (4) Optimizer® System categories based solely on a previously 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.

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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, 23 are in normal sinus rhythm, are not (24 percent) or III (76 percent) p = 0.005). The applicant also 24 25 indicated for Cardiac Resynchronization symptoms who received a CCM pulse presented additional studies 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 18 percent to 45 percent. 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 21 ambulatory Class IV heart failure receiving active CCM treatment. 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., Ro¨ger, S., Goette, A., . & Rousso, B. Cardiac Cardiol. 2016 Mar 1;206:122–6. contractility modulation improves long-term 24 Mu¨ ller 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.

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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,

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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 pass-through payment status for the $23,000. The manufacturer contended ® 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 comments on whether the AquaBeam® ® manufacturer’s input. After 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 newness of the AquaBeam® System. We System meets the cost criterion for ® 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 at § 419.66(b)(3), according to the device pass-through payment status and ® 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 recovered, and it is not a supply or ® of their CY 2019 application. The 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

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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 They reiterated that the AquaBeam® The applicant resubmitted their AquaBeam® System of ‘‘Probe, image System is inserted into the body through application with additional information guided, robotic resection of prostate.’’ a natural orifice at the meatus of the that they believe supports their stance We invited public comments on urethra without any cutting. The that the device should be considered 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.

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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 improvement in quantifiable symptom Therapies for Benign Prostatic Hypertrophy: The Trial In Patients With Obstructive Benign Prostatic 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 and that through a direct comparison to treatment of benign prostatic obstruction: 6-month a European Multicentre Randomised Trial—the 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 the gold standard. The applicant also Multinational Study of Prostatic Urethral Lift the Prostate in Benign Prostatic Hyperplasia. J Urol. 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.

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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. status beginning in CY 2020. confidence interval of the difference 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 The applicant stated that PAD is a better peak urinary flow rates at 6 the related service by at least 25 percent, months (Qmax), improved ejaculatory circulatory condition in which which means that the device cost needs narrowed arteries reduce blood flow to function, and improved incontinence to be at least 125 percent of the offset the limbs, usually in the legs. Symptoms scores at 3 months. 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 average reasonable cost of $2,500, we with rest. According to the applicant, operative time, shorter length of stay, believe that the AquaBeam® System risk factors for PAD include individuals 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 or ischemic pain at rest; abnormal lower device category, at § 419.66(c)(3), APC payment amount for the related extremity pulse examination; known requires us to determine that the cost of service. The difference between the 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 34 met. The applicant provided the payment amount for the related service homocysteinemia. 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 including the cost criterion. artery disease.’’ Available at: https:// three tests of the cost criterion for at 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.

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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 TM example, pain while at rest and/or applicant, the Eluvia 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 or other skin lesion. The applicant also delivered to the lesion via a diffusion to multiple issues including high rate of TM restenosis and significant forces of claimed that the Eluvia 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 TM a service. We invited public comments According to the applicant, the Eluvia TM Eluvia releases paclitaxel over stent is coated with the drug paclitaxel, on whether the Eluvia 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. Response: We appreciate the SFA. According to the applicant, the device categories are specified at TM stakeholders’ comments and Eluvia Drug-Eluting Vascular Stent § 419.66(c). The first criterion, at comparison of the polymer matrix System is comprised of: (1) The § 419.66(c)(1), provides that CMS EluviaTM implantable endoprosthesis; and (2) the determines that a device to be included versus the paclitaxel-coated 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 placement. The tri-axial designed eluting stent (Eluvia) versus a polymer-free, 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. Lancet; Published Online September 22, 2018; system, a middle shaft to protect and describes the EluviaTM Drug-Eluting constrain the stent, and an inner shaft http://dx.doi.org/10.1016/S0140-6736(18)32262-1. 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.

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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 multi-center, single-blinded The second criterion for establishing 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 TM 39 balanced between the Eluvia stent hospitalizations or physician visits; IMPERIAL study in which the ® 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 telephone follow-up at 3 and 4 years. multi-center, single-arm, open-label 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 Mu¨ ller-Hu¨ lsbeck, 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 restenosis starts with inflammation, Follow-up,’’ Cardiovasc Intervent Radiol, December (IMPERIAL): a randomised, non-inferiority trial,’’ 2017, vol. 40(12), pp. 1832–1838. Lancet, September 24, 2018. followed by smooth muscle cell

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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 as well as for those with medically are consistent with the 96.4 percent complications. Device-related adverse- treated diabetes (confidential and primary patency rate at 12 months in events were reported in 8 percent of the unpublished as of the date of the device the MAJESTIC study. 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-

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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 TM the femoropopliteal artery of the leg, Eluvia 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 TM failure, which is not infrequently Eluvia 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. TM neointimal growth, which might cause a whether the Eluvia Drug-Eluting With regard to the applicant’s catch-up phenomenon and late failure. TM Vascular Stent System meets the assertion that the use of the Eluvia 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 TM presenter noted that the Eluvia 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 months of 3.9 percent compared to the 43 Stents in the Femoropopliteal Artery of the Leg: A ® 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, Randomized Controlled Trials,’’ JAHA, vol. 7(24). and that no p-value was included on the 2018, vol. 392(10157), pp. 1491–1493.

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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 TM Eluvia ’s lack of long-term data Comment: One commenter, the applicant, believe that the suggestion in contrasts with 5-year data that is the meta-analysis of a late-term ® manufacturer, stated that the IMPERIAL 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 paclitaxel-coated devices is not directly ® is consistent with accepted research use of the Zilver PTX stent to methodology and is typical of many applicable to the EluviaTM device. angioplasty (with a sub-randomization Additionally, the applicant stated that ® head-to-head trials of medical devices. comparing provisional use of Zilver The commenter stated that they defined given the differences between TM PTX stenting to bare metal Zilver a pre-specified, post-hoc superiority Eluvia ’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 relative to products with similar ® subjected to bias. The commenter 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 logic as the pre-specified success coronary stent as such an appropriate PTA and provisional bare metal criteria for non-inferiority. The comparator, stating that Eluvia and stenting, and actually increases rather commenter stated: ‘‘Eluvia will be TAXUS are similar in design intent and than decreases over time. The concluded to be superior to Zilver PTX mechanism of action. In support, the commenter also believed that, given that for device effectiveness if the one-sided applicant provided additional data these stent devices are permanent lower 95 percent confidence bound on showing a 5-year all-cause mortality implants and they are used to treat a the difference between treatment groups observed between paclitaxel-eluting and chronic disease, long-term data are in 12-month primary patency is greater bare metal stents. The applicant also important to fully understand an SFA than zero.’’ The commenter believes that stated that coronary and peripheral 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 commenters also claimed that clinical also a lack of clinical data for the use 44 Katsanos, K., Spiliopoulos, S., Kitrou, P., TM of the Eluvia 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 The commenter stated that, in contrast, they met. of the Leg: A Systematic Review and Meta-Analysis ® 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.

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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 TM paclitaxel-coated devices, which Eluvia 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 TM evaluate the late mortality signal. mentioned during and following the medical devices, Eluvia 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 TM that showed concern over the Eluvia 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 results are sufficient to prove substantial Interventions’’. The applicant states that potentially suggest that paclitaxel- clinical improvement, given that at the the use of the term ‘‘Subsequent coated balloons and stents may improve time of Zilver PTX’s NTAP approval Therapeutic Interventions’’ was used as blood flow to the legs and decrease the they only provided 12-month data a lay explanation for target lesion likelihood of repeat procedures to published in peer-reviewed literature.49 revascularization. The applicant then reopen blocked blood vessels compared The applicant further argues that states that it has recently obtained and to uncoated devices. However, they also waiting for a substantial amount of real- analyzed IMPERIAL trial 2-year TLR 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. After consideration of public stents: The Sirolimus-Eluting vs. Paclitaxel-Eluting as the technology would no longer be Stents for Coronary Revascularization (SIRTAX) comments and the latest available considered new by the time the data are VERY LATE trial. Eur Heart J. 2016;37(45):3386– 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 term safety and efficacy of paclitaxel-eluting stents 50 https://www.fda.gov/medical-devices/letters- 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.

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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 further stated that the procedures may an outpatient service as of December 31, 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

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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 Finally, the applicant asserted that the a novel therapy against an active from an incisional site.56 Another RIA technique has additional risks and comparator that is known to be safe and concern was the time period of the complications, including: A steep effective to use a non-inferiority study. study because certain ankle arthrodesis learning curve for surgeons with the The applicant also stated that they complications such as ankle potential for technical errors creating conducted an additional analysis of the replacement and repeat arthrodesis can risk of potential complications;58 select IDE trial data to determine the impact of happen more than two years after the ® populations for whom the technique is graft type (AUGMENT Bone Graft initial surgery.57 A long-term study of at not appropriate, including patients with versus autograft) and subject age (over least 60 months is currently underway osteoporosis and osteopenia, as well as 65 vs those 65 and younger) on fusion in order to assess long-term safety and 59 outcomes.63 The applicant believed that efficacy, looking at the following 4 elderly patients; 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 ® The applicant also commented on suggested that while AUGMENT was Foot & Ankle Society Ankle-Hindfoot non-inferior to autograft overall, the (AOFAS—AHS) score, and the Foot concerns regarding long-term outcomes. elderly population data shows better Function Index. We believe that this In the CY 2020 OPPS/ASC proposed odds of fusion success with long-term study is necessary for rule, we noted a potential lack of data ® AUGMENT® compared with autograft. meaningful information about long-term on AUGMENT beyond 2 years after the 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 58 Haubruck P, Ober J, Heller R, Miska M, agree with the applicant that on relevance to the procedure. Should ® 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

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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 100 = 15 percent). Therefore, we believe requested information on the substantial 27870 had a device offset amount of ® $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 public comments on whether the devices and stated that we were is $3,077 per device/drug combination. ® 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 comment in support of our cost analysis public and applicants for device pass- weighted average cost of $6,020.22. ® 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 their comment in support, and continue request for public comments was the estimated average reasonable cost of ® 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 comments we received, we are readers to the FY 2020 IPPS/LTCH category of devices. The estimated ® 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. In addition to the broad request for percent of the applicable APC payment beginning in CY 2020. 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 through payments. Separately, the making in the FY 2020 IPPS/LTCH PPS 64 Ibid. 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

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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 4. Proposed Alternative Pathway to the time of FDA marketing authorization, is pursuing several policies that will OPPS Device Pass-Through Substantial we proposed to amend the OPPS device instill greater transparency and Clinical Improvement Criterion for transitional pass-through payment consistency around how Medicare Transformative New Devices regulations to create an alternative 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

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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 increased payment for Medicare We received two device pass-through waive such a criterion under either of beneficiaries. MedPAC expressed applications by the September 2, 2019 these policies. Finally, we appreciate concern that such a policy would quarterly application deadline that have the commenters’ suggestion that we provide inappropriate incentives for received FDA marketing authorization should apply the alternative pathway to providers to use new technology and a Breakthrough Devices designation other types of FDA designations and without proven safety or efficacy by from FDA and that qualify for will continue to take those comments allowing increased payment for the new consideration under the alternative 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

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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. cost. Further, we believe a HCPCS code- to CY 2017, the device costs of all the 2. Device-Intensive Procedure Policy for level device offset removes procedures within the APC were 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- intensive procedures, regardless of further background information on the respectively. 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 definition of device-intensive through 70426). We clarified our established policy in 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

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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 41 percent to 31 percent, we from premarket review; cost relationship between the procedure • continued our current policy of, in Is an integral part of the service and the device(s) that are used, and will certain rare instances (for example, in furnished; be appropriate to use to set a new code’s • the case of a very expensive implantable Is used for one patient only; 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 a new HCPCS code has multiple • Is surgically implanted or inserted additional information such as pricing predecessor codes, the claims data for (either permanently or temporarily); and data from a device manufacturer (81 FR the predecessor code that has the • Is not either of the following: 79658). Once claims data are available highest individual HCPCS-level device (a) Equipment, an instrument, 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

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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- 3. Device Edit Policy device-intensive ‘‘C’’ HCPCS codes. intensive status in the CY 2020 OPPS/ In the CY 2015 OPPS/ASC final rule Response: As we stated in the CY ASC proposed rule. For the CY 2020 2015 OPPS/ASC final rule with OPPS/ASC final rule with comment with comment period (79 FR 66795), we finalized a policy and implemented comment period (79 FR 66794), we period, the device offset for both continue to believe that the elimination procedures exceeds the 30 percent claims processing edits that require any of the device codes used in the previous of device-to-procedure edits and threshold and these procedures are procedure-to-device edits is appropriate assigned device-intensive status for CY device-to-procedure edits to be present on the claim whenever a procedure code due to the experience hospitals now 2020. have in coding and reporting these Comment: One commenter requested assigned to any of the APCs listed in claims fully. More specifically, for the that we assign HCPCS code C9752 a Table 5 of the CY 2015 OPPS/ASC final most costly devices, we believe the C– higher device offset percentage. rule with comment period (the CY 2015 APCs will reliably reflect the cost of the Additionally, one commenter requested device-dependent APCs) is reported on device if charges for the device are that we assign HCPCS code C9754 a the claim. In addition, in the CY 2016 included anywhere on the claim. We higher device offset percentage. OPPS/ASC final rule with comment note that, under our current policy, Response: We thank the commenters period (80 FR 70422), we modified our hospitals are still expected to adhere to for their recommendations and their previously existing policy and applied the guidelines of correct coding and submission of device pricing the device coding requirements append the correct device code to the information. After reviewing the pricing exclusively to procedures that require claim when applicable. We also note information provided by commenters, the implantation of a device that are that, as with all other items and services we believe a default device offset assigned to a device-intensive APC. In recognized under the OPPS, we expect percentage of 31 percent appropriately the CY 2016 OPPS/ASC final rule with hospitals to code and report their costs reflects the device costs for these comment period, we also finalized our appropriately, regardless of whether procedures for CY 2020. policy that the claims processing edits 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

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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 the payment rate calculation for very procedure code that reports the service b. Policy for No Cost/Full Credit and low-volume device-intensive APCs (80 provided to furnish the device when Partial Credit Devices they receive a partial credit of 50 FR 70389). In the CY 2017 OPPS/ASC final rule percent or more of the cost of the new For CY 2017, we proposed and with comment period (81 FR 79659 device. We refer readers to the CY 2008 finalized a payment policy for low- 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 5. Payment Policy for Low-Volume receives partial credit in the amount of accordance with the device-intensive Device-Intensive Procedures 50 percent or more of the cost for the 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

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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. https://www.cms.gov/Medicare/ III.D.13. of the CY 2019 OPPS/ASC final Transitional pass-through payments Medicare-Fee-for-Service-Payment/ rule with comment period (83 FR 58917 also are provided for certain ‘‘new’’ _ 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 biologicals and their designated APCs intensive edit policy) was $28,237, and 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 quarterly basis through the next $19,740 and can be found in Addendum the CMS website). 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.

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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.

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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 authorized under section 1842(o) of the packaged into the associated procedure. payment policy can be found in section

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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

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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 applicable for pass-through diagnostic stress agents, and other diagnostic payment is made. This amount drugs. Also under 42 CFR 419.2(b), radiopharmaceuticals, pass-through reflecting the portion of the APC contrast agents, pass-through stress nonpass-through drugs and biologicals payment associated with predecessor agents, and pass-through skin that function as supplies in a surgical 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.

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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 and biologicals and establishing any packaged, we calculated, on a HCPCS 68086)), we set the packaging threshold appropriate APC offset amounts. code-specific basis, the per day cost of 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) under the OPPS. We used data from CY and biologicals for every OPPS clinical we used the most recently available four 2018 claims processed before January 1, APC. quarter moving average PPI levels to 2019 for this calculation. However, we trend the $50 threshold forward from B. OPPS Payment for Drugs, Biologicals, 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 1. Criteria for Packaging Payment for different dosages, as described in nearest $5 increment, which yielded a section V.B.1.d. of the proposed rule, or Drugs, Biologicals, and figure of $130. In performing this Radiopharmaceuticals for the following policy-packaged items 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 2005 (when the Pub. L. 108–173 proposed rule (70 FR 42723 through

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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,

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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

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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.

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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 that either is a radiopharmaceutical • Separately Payable Drugs and A drug or biological for which a agent or is a drug or biological for which Biologicals temporary HCPCS code has not been 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 1833(t)(14)(B)(i) of the Act, a ‘‘specified These exceptions are— 2006 and subsequent years be equal to

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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 For CY 2020, we proposed to continue Section 1833(t)(14)(E)(ii) of the Act the average price of the drug in the year our payment policy that has been in provides for an adjustment in OPPS established under section 1847A of the effect since CY 2013 to pay for payment rates for SCODs to take into Act. We also proposed to apply this separately payable drugs and biologicals account overhead and related expenses, provision to non-SCOD separately at ASP+6 percent in accordance with such as pharmacy services and handling payable drugs. Because we proposed to section 1833(t)(14)(A)(iii)(II) of the Act costs. Section 1833(t)(14)(E)(i) of the Act establish the average price for a WAC- (the statutory default). We proposed to required MedPAC to study pharmacy based drug under section 1847A of the continue to pay for separately payable overhead and related expenses and to 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 for a drug or biological. For drugs and of the MedPAC study.66 the CY 2018 OPPS/ASC final rule with biologicals that would otherwise be It has been our policy since CY 2006 comment period (82 FR 59353 through 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

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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

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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

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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 3. Payment Policy for Therapeutic biologicals, and to continue our policy mean unit cost derived from hospital for payment of the furnishing fee using Radiopharmaceuticals claims data when not available. an updated amount. Our policy to pay In the CY 2020 OPPS/ASC proposed Commenters also stressed the high for a furnishing fee for blood clotting rule (84 FR 39502), for CY 2020, we overhead, handling, compounding and factors under the OPPS is consistent proposed to continue the payment storage costs associated with delivering with the methodology applied in the policy for therapeutic therapeutic radiopharmaceuticals and physician’s office and in the inpatient radiopharmaceuticals that began in CY asked CMS to look into higher payment hospital setting. These methodologies 2010. We pay for separately payable rates for radiopharmaceuticals or ways were first articulated in the CY 2006 therapeutic radiopharmaceuticals under to compensate hospitals for the higher OPPS final rule with comment period the ASP methodology adopted for 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.

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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 hospital claims data, which describes these pricing methodologies to the 340B access to care for Medicare beneficiaries how we determine the payment rate for payment adjustment since the policy and other patients. Critical access drugs, biologicals, or was first adopted. The 340B payment hospitals are not included in this 340B radiopharmaceuticals without an ASP. adjustment for WAC-priced drugs is policy change because they are paid For a detailed discussion of the payment WAC minus 22.5 percent and AWP- under section 1834(g) of the Act. We policy and methodology, we refer priced drugs have a payment rate of also excepted rural sole community readers to the CY 2016 OPPS/ASC final 69.46 percent of AWP when the 340B hospitals, children’s hospitals, and PPS- rule with comment period (80 FR 70442 payment adjustment is applied. The exempt cancer hospitals from the 340B through 70443). The proposed CY 2020 69.46 percent of AWP is calculated by 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

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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 after briefing on remedy, the district costs. We thus anticipate that survey when billed by a hospital paid under court issued an opinion that reiterated data collected for CY 2018 and 2019 the OPPS that is not excepted from the that the 2018 rate reduction exceeded will confirm that the ASP minus 22.5 payment adjustment. Medicare Part B the Secretary’s authority, and declared percent rate is a conservative measure drugs or biologicals excluded from the that the rate reduction for 2019 (which that overcompensates 340B hospitals. A 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 ‘‘L’’ or ‘‘M’’) and drugs with OPPS Granting in Part Plaintiffs’ Motion for a Permanent transitional pass-through payment Injunction; Remanding the 2018 and 2019 OPPS 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).

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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

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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.

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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 in section V.B.2.c. of the CY 2019 OPPS/ the Appeals Court. As explained above, appropriate remedy and budget ASC final rule with comment period, we are finalizing our proposal to neutrality adjustments in the CY 2021 and continues the policy we finalized in continue to pay for 340B-acquired drugs rulemaking. We solicited public CY 2019 to pay ASP minus 22.5 percent at ASP minus 22.5 percent. In the event comment on this approach as well as for 340B-acquired drugs and biologicals of an adverse decision on appeal, we other suggested approaches from furnished in nonexcepted off-campus will take these comments into commenters. consideration in crafting an appropriate PBDs paid under the PFS. In considering these potential future remedy. Comments on a Potential Remedy for Comment: One commenter believed a proposals, we noted that we would rely CYs 2018 and 2019 rate closer to ASP+6 percent, such as on our statutory authority under section 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

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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

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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

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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

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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

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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 procedures performed with expensive Response: We appreciate all of the the use of lower-cost, quality products. skin substitute products would likely feedback we received from commenters, 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 Medicare pays for these procedures. We b. Potential Revisions to the OPPS payment category would reduce incentives to apply skin substitute welcomed suggestions or other Payment Policy for Skin Substitutes: information regarding the possibility of Comment Solicitation for CY 2020 products in excessive amounts. Commenters also believe a single utilizing a single payment category to 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

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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 c. Proposals for Packaged Skin We sought commenters’ feedback on determining which skin substitute Substitutes for CY 2020 these ideas, or other approaches, to 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

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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. finalizing our proposal to assign a skin and prefer to keep the current high-cost Comment: For the CY 2019 OPPS/ 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 substitute group. some extent the relative cost of a skin 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 we are finalizing our proposal to commenter. Requiring products to centimeter) were both assigned to the 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

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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 estimate of pass-through spending in CY or a natural orifice) use the device pass- 2020 for this group of items is $224.1

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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 B. Estimate of Pass-Through Spending addition, we policy-package all $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

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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 proposed methodology described above, through 59015), we adopted a method to approximately $698.4 million we calculated a CY 2020 proposed control unnecessary increases in the (approximately $246.8 million for spending estimate for this first group of volume of covered outpatient device categories and approximately drugs and biologicals that includes department services under section $451.6 million for drugs and biologicals) drugs currently on pass-through 1833(t)(2)(F) of the Act by utilizing a which represents 0.88 percent of total payment status that would otherwise be Medicare Physician Fee Schedule (PFS)- projected OPPS payments for CY 2020 separately payable or policy-packaged of equivalent payment rate for the hospital (approximately $79 billion). Therefore, approximately $241.1 million. We did outpatient clinic visit (HCPCS code we estimate that pass-through spending not receive any public comments on our G0463) when it is furnished by excepted in CY 2020 will not amount to 2.0 proposal. Using our methodology for off-campus provider-based departments percent of total projected OPPS CY 2020 (PBDs). As discussed in section X.D of this final rule with comment period, we program spending. calculated a CY 2020 spending estimate the proposed rule and the CY 2019 final 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

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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

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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 2020. four PHP APC per diem payment rates 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

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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. unadjusted payment rates calculated also assess CCRs (80 FR 70463). Our We multiply each claim service line’s charges by 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 OPPS/ASC proposed rule, we proposed the same beneficiary are summed. CMHC service 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 ± steps did not adjust the CCR for any n numbers, for days where 3 or more services were including the application of a 2 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 missing data or for failing the ±2 to calculate the final geometric mean per diem cost based PHP providers. These two trims 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.

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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: Comment: Nearly all commenters PHP, a patient must need at least 20 access. To be clear, this policy would supported our proposal to calculate hours of therapeutic services per week, 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,

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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

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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

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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. The costs, payments, and service units for all described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 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 hospital-based PHP APC 5863. The final geometric used for CMHCs. The CY 2018 PHP 79691).75 The final calculated CY 2020 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.

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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.

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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

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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- neutrality is required under section 1833(t)(9)(B) of ratesetting procedures described in Part 2 of the Outpatient-Regulations-and-Notices.html.

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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

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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 this final rule showed an uptick in the claims data to reflect the change to the might need to leave early for a medical percentage of 3-service days. We will single-tier PHP APCs. We hope the appointment and, therefore, would be continue to monitor the data over time. increase in the percentage of days with 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 services required in a PHP day to be 3 they cannot force patients to attend provided, sending providers

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informational messaging without CMHC per diem payments and outlier Each Provider = Total CMHC affecting payment. payments by using the most recent Outlier Payments. available utilization and charges from • C. Outlier Policy for CMHCs 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 In CY 2019, we designated according to previously established CMHC outlier percentage according to approximately 0.01 percent of that policies. These topics are discussed in previously established policies, and we estimated 1.0 percent hospital more detail. We refer readers to section 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 • continue to use the same methodology 1. Background Step 1: We multiplied the OPPS outlier threshold, which is 1.0 percent, for CY 2020. Therefore, based on our CY 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

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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 4. Outlier Reconciliation following psychological and 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 6. Fixed-Dollar Threshold replace the deleted codes, as of January to the CY 2019 OPPS/ASC final rules 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

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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 • procedure is being performed in CPT code 96139 (Psychological/ these proposals and since we did not neuropsychological testing by numerous hospitals on an outpatient receive any comments, we are finalizing technician; each additional 30 minutes); basis. our proposals as proposed. and • A determination is made that the • 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 1. Methodology for Identifying opposition. Most recently, in the CY Addendum O to the CY 2019 OPPS/ASC Appropriate Changes to IPO List 2018 OPPS/ASC proposed rule (82 FR 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

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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 care in a skilled nursing facility or other when analyzing the implications of From the Inpatient Only List facility. Surgeons who discussed outpatient THA: Living alone, pain, 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

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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

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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.

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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 population and the simplest procedure operative efficiency and efficacy of techniques, improved perioperative

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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:

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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

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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 OPPS final rule with comment period rulemaking cycle. addition, we extended the enforcement

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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

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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 higher level of physician supervision for of supervision for individual supervision when these services are any service they render if they believe therapeutic services if needed. furnished by hospitals or CAHs. The a higher level of supervision is required Response: We agree with the commenters appreciated that we to ensure the quality and safety of the commenters and will continue to have proposed to eliminate what is procedure and to protect a beneficiary a system in place to change the default effectively a two-tiered system of from complications that might occur. minimum level of physician supervision 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 requirements will also ensure that would set an appropriate and monitoring care furnished to Medicare beneficiary health and safety when uniformly enforceable supervision beneficiaries to determine if there is any receiving outpatient therapeutic standard for all hospital outpatient decline in the quality of therapeutic services. therapeutic services. The commenters 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

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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

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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 procedure under 42 CFR 419.22(n) or for without modification. We also note all 2. Current Policy for Medical Review of of the policy safeguards that have been which there was not a national Inpatient Hospital Admissions Under exception, payment of the claim under in place to ensure the safety, health, and Medicare Part A quality standards of the outpatient Medicare Part A is subject to the clinical 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 patient to require a stay that crosses at Inpatient Hospital Admissions Under 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

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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

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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

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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’’ (emphasis added). Section 1833(t)(9)(B) that does not simply increase other instead receives care in a higher cost of the Act, titled ‘‘Budget neutrality expenditures that are unnecessary setting due to payment incentives. We adjustment’’ provides that if ‘‘the within the OPPS and drive different 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). However, section 1833(t)(2)(F) of the health insurance plans, physician policy in a non-budget neutral manner. Act is not an ‘‘adjustment’’ under associations, specialty medical As we stated in the CY 2019 OPPS ASC paragraph (2). Unlike the wage associations and individual Medicare final rule with comment period (83 FR adjustment under section 1833(t)(2)(D) beneficiaries, supported moving forward 59013), we believe implementing a of the Act and the outlier, transitional with the phase-in of this proposal. Some volume control method in a budget neutral manner would not appropriately pass-through, and equitable adjustments of these commenters commended CMS under section 1833(t)(2)(E) of the Act, for completing the two-year phase-in reduce the overall unnecessary volume of covered OPD services, and instead section 1833(t)(2)(F) of the Act refers to ‘‘since it increases the sustainability of a ‘‘method’’ for controlling unnecessary the Medicare program and reduces costs would simply shift services within the OPPS system because of payment rather increases in the volume of covered OPD for Medicare patients.’’ Commenters services, not an adjustment. Likewise, expressed that the alignment of payment than medical necessity. We also outlined in the CY 2019 OPPS/ASC sections 1833(t)(2)(D) and (E) of the Act between the outpatient and physician also explicitly require the adjustments office setting ‘‘is an important and final rule with comment period (83 FR 59013) that while section 1833(t)(9)(B) authorized by those paragraphs to be necessary reform that can help reduce budget neutral, while the volume of the Act requires that certain changes provider consolidation and thereby control method authority at section made under the OPPS be made in a provide beneficiaries with more care 1833(t)(2)(F) of the Act does not. budget neutral manner, this section does options at a lower cost.’’ Commenters Therefore, the volume control method not apply to the volume control method continued to be supportive of the proposed under section 1833(t)(2)(F) of under section 1833(t)(2)(F) of the Act. immediate impact this policy would 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

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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 that it equaled the total payment had the reduction program, hospital value-based for its input. As we stated in the CY services been furnished in a purchasing, and the 2-midnight rule. 2019 OPPS/ASC final rule with freestanding office and did not Commenters reiterated their comments comment period (83 FR 59005), to the distinguish between on- and off-campus from the CY 2019 OPPS/ASC final rule extent that similar services can be safely services. MedPAC further noted that it with comment period (83 FR 59005) provided in more than one setting, we shares CMS’ concerns about the rate of that, relative to patients seen in do not believe it is prudent for the physician offices, patients seen in growth in volume and spending under Medicare program to pay more for these the OPPS. MedPAC also stated, perhaps HOPDs: services in one setting than another. We • Have more severe chronic inadvertently, that ‘‘CMS proposes to believe the increase in the volume of implement this policy in a budget- conditions; clinic visits, in particular, is due to the • Have higher prior utilization of neutral manner.’’ payment incentive that exists to provide Response: We thank MedPAC for its hospitals and EDs; this service in the higher cost setting. • Are more likely to live in low- comments and support of this policy. To Because these services could likely be clarify, this policy has been phased-in income areas; 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

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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. As noted above, on September 23, its order to remand the matter without the Panel. 2019, HHS filed a motion requesting vacatur or, alternatively, to stay the Comment: Many commenters that the district court modify its order portion of the order vacating the rule for referenced the ongoing litigation to remand the matter without vacatur or 60 days from the date of the order to (described earlier in this section) in alternatively, to stay the portion of the allow the Solicitor General time to which the district court found that CMS order vacating the rule for 60 days from determine whether to authorize appeal. exceeded its statutory authority by the date of the order to allow the On October 21, 2019, the district court reducing payments for clinic visit 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 order vacating the portion of the CY ruling or do not succeed on appeal if 78 Available at: https://www.ssa.gov/OP_Home/ 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

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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 substantial revision to its code payment differentials in a budget A. CY 2020 OPPS Payment Status descriptor in the next calendar year, as neutral manner.’’ Commenters gave the 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 payment for services under the OPPS. final APC assignment for the new code. for cost centers where similar services • 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 that ‘‘[p]atients should not be penalized descriptor in the next calendar year, as OPPS policies apply to the code. and pay higher prices simply because a compared to current calendar year, 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 assignments for APCs and HCPCS codes The Medicare Payment Advisory than the proposed OPPS rate). Under are shown in Addendum A and Commission (MedPAC) was established this policy, departments will be paid Addendum B, respectively, to this final under section 1805 of the Act in large approximately 40 percent of the OPPS rule with comment period, which are part to advise the U.S. Congress on rate (100 percent of the OPPS rate minus available on the CMS website at: https:// issues affecting the Medicare program. the 60-percent payment reduction that www.cms.gov/Medicare/Medicare-Fee- As required under the statute, MedPAC is applied in CY 2020) for the clinic for-Service-Payment/Hospital submits reports to the Congress no later 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

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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. setting to the ASC setting and increase for a complete discussion on these XIII. Updates to the Ambulatory the presence of ASCs in health care recommendations, which is available for 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 promoting better beneficiary access to but as MedPAC acknowledged in its 1. Legislative History, Statutory care. As published in the FY 2020 IPPS/ March 2019 report, Congress would Authority, and Prior Rulemaking for the LTCH PPS final rule (84 FR 42343), need to change current law to enable us 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). data to enable the Commission to would be 0 percent). 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

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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

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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 2. April 2019 HCPCS Codes for Which remove any procedures from the ASC each year all new HCPCS codes that We Solicited Public Comments in the list of covered surgical procedures that describe surgical procedures, and to Proposed Rule we had added as a result of our make preliminary determinations 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 However, this process has always subsequent calendar years in future 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 that were recognized as ASC ancillary 1. Background on Current Process for descriptors that necessitate a change in the current ASC payment indicator. To services in April 2019 through the Recognizing New and Revised HCPCS quarterly update CRs, as listed in Table Codes clarify, we refer to these codes as new and revised in this CY 2020 OPPS/ASC 25 of the CY 2020 OPPS/ASC proposed 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).

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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 next calendar year or the code is an we proposed that the Level II HCPCS b. CPT Codes for Which We Solicited existing code with substantial revision codes that will be effective October 1, 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 comment period to indicate that we payment assignment, and that process of assigning APC and status have assigned the codes an interim ASC comments would be accepted on the indicators for new and revised Category payment indicator for CY 2020. We did proposed ASC payment indicator. I and III CPT codes that would be not receive any public comments on our Further, we note that the CPT code effective January 1. Specifically, for the proposal. As we stated that we would descriptors that appeared in Addendum new/revised CPT codes that we receive do in the CY 2020 OPPS/ASC proposed AA and BB were short descriptors and in a timely manner from the AMA’s CPT rule, we are inviting public comments did not accurately describe the complete Editorial Panel, we finalized our in this CY 2020 OPPS/ASC final rule procedure, service, or item described by proposal to include the codes that with comment period on the interim the CPT code. Therefore, we included would be effective January 1 in the ASC payment indicator for these codes the 5-digit placeholder codes and the 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 a. New Level II HCPCS Codes for Which assignments. The 5-digit placeholder those new/revised CPT codes that were We Are Soliciting Public Comments in codes were listed in Addendum O, received too late for inclusion in the the CY 2020 OPPS/ASC Final Rule With specifically under the column labeled OPPS/ASC proposed rule, we finalized Comment Period ‘‘CY 2020 OPPS/ASC Proposed Rule 5- 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

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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 procedures eligible for payment in 1. Covered Surgical Procedures determined were office-based were 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 utilization data that we have determined In the August 2, 2007 ASC final rule, nonfacility PE RVUs; payment based on OPPS relative payment weight); ‘‘P3’’ are clinically similar to other we finalized our policy to designate as procedures that are permanently office- ‘‘office-based’’ those procedures that are (Office-based surgical procedures added to ASC list in CY 2008 or later with based), permanently office-based, or non added to the ASC Covered Procedures office-based, after taking into account MPFS nonfacility PE RVUs; payment List (CPL) in CY 2008 or later years that 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 from application of the office-based amount. potential designation as office-based.

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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 based surgical procedure based on OPPS In reviewing the CY 2018 volume and procedure will retain its payment relative weights—for CY 2020. utilization data for CPT code 36902 we indicator of ‘‘G2’’—non office-based Additionally, as CPT code 31647 determined that the procedure was surgical procedure based on OPPS exceeds our device offset percentage performed more than 50 percent of the relative weights. threshold of 30 percent for device- time in physicians’ offices based on The comments and our responses to intensive designation, we are assigning 2018 volume and utilization data. 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 Addendum AA to the proposed and in Tables 57 and 58 in the CY 2019 comments on our proposal. Therefore, final rule (which are available via the OPPS/ASC final rule with comment we are finalizing our proposal, without internet on the CMS website). period (83 FR 59039 through 59040). Of modification, to designate the these 12 procedures, there were very The volume and utilization data for the one remaining procedure that has a procedures shown in Table 56 below as few claims in our data and no claims temporary office-based designation for temporarily office-based. The data for 11 procedures described by CPT CY 2019, described by CPT code 38222 procedures for which the office-based 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).

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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 In the CY 2019 OPPS/ASC final rule device-intensive procedure payment subsequent years, that for purposes of with comment period (83 FR 590401 methodology for CY 2020, are assigned satisfying the device-intensive criteria, a through 59043), for CY 2019, we payment indicator ‘‘J8’’ and are device-intensive procedure must modified our criteria for device- included in ASC Addendum AA to the involve a device that: intensive procedures to better capture CY 2020 OPPS/ASC proposed rule • Has received Food and Drug costs for procedures with significant (which is available via the internet on Administration (FDA) marketing device costs. We adopted a policy to the CMS website). The CPT code, the authorization, has received an FDA allow procedures that involve surgically CPT code short descriptor, and the investigational device exemption (IDE) inserted or implanted, high-cost, single- proposed CY 2020 ASC payment and has been classified as a Category B use devices to qualify as device- indicator, and an indication of whether device by the FDA in accordance with intensive procedures. In addition, we the full credit/partial credit (FB/FC) 42 CFR 405.203 through 405.207 and modified our criteria to lower the device device adjustment policy would apply 405.211 through 405.215, or meets offset percentage threshold from 40 because the procedure is designated as another appropriate FDA exemption percent to 30 percent. Specifically, for device-intensive are also included in 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 • Is used for one patient only; that in our CY 2019 OPPS/ASC following criteria: • • 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 furnished in an ASC involving the marker). procedure is furnished with a surgically

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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 The comments and our responses to our best estimate of the cost of devices with the OPPS. ‘‘Device-intensive’’ the comments are set forth below. for performing the surgical procedure in 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

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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 d. Additions to the List of ASC Covered assigned to APCs under the OPPS to the claim with the procedure to implant Surgical Procedures which this policy applies. We refer the device. The contractor would reduce 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 device is furnished without cost or with the ASC payment adjustment policy for CY 2019 OPPS/ASC final rule with full credit to the ASC. We continue to no cost/full credit and partial credit comment period (83 FR 59029 through believe that the reduction of ASC devices. 59030), we revised our definition of payment in these circumstances is In the CY 2019 OPPS/ASC proposed ‘‘surgery’’ for CY 2019 to include certain necessary to pay appropriately for the rule (83 FR 37159), we noted that, as ‘‘surgery-like’’ procedures that are covered surgical procedure furnished by discussed in section IV.B. of the CY 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 with comment period (83 FR 59043 years we proposed to adopt the 75006), we finalized our proposal to through 59044), for partial credit, we modified definition we finalized for CY modify our former policy of reducing adopted a policy to reduce the payment 2019, to include procedures that are OPPS payment for specified APCs when for a device-intensive procedure for described by Category I CPT codes that a hospital furnishes a specified device which the ASC receives partial credit by are not in the surgical range but directly without cost or with a full or partial one-half of the device offset amount that crosswalk or are clinically similar to credit. Formerly, under the OPPS, our would be applied if a device was procedures in the Category I CPT code 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

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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 similar procedures involving major on these options, and other options, for plan should also have the option of blood vessels that have a history of safe ensuring that beneficiaries receive choosing to receive the TKA procedure performance in ASCs, such as CPT code surgical procedures, including TKA, in an ASC setting based on their 36473 (Mechanicochemical destruction that do not pose a significant safety risk physicians’ determinations. of insufficient vein of arm or leg, when performed in an ASC. 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

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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. Response: We thank commenters for The comments and our responses to 92921, 92929, and HCPCS code C9601) their support of our proposal. the comments are set forth below. can be safely performed in the ASC Comment: Many commenters Comment: One commenter requested setting, for certain Medicare patients supported our proposal to add three that we delay adding TKA to the ASC and note that the physician should coronary intervention procedures as CPL until more data can be collected on determine whether a particular case well as the additional three procedures the impact of case-mix and patient would be a good candidate to be that represented their associated add-on populations for participants in the CMS furnished in the ASC setting rather than procedures to the ASC CPL. They stated Innovation Center’s Bundled Payments the hospital setting based on the clinical that our proposed additions meet our for Care Improvement Initiative. assessment of the patient. We agree with criteria to be included on the ASC CPL Response: We believe there are a commenters who stated that expert and that claims analyses, clinical trials, small number of less medically complex consensus, clinical guidelines, and expert consensus and clinical TKA patients that could appropriately 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

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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 For CY 2020, as discussed above, we comment period) as such procedures our regulations at §§ 416.2 and 416.166 proposed to add three coronary would not meet our requirement for (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 procedures) that involve major blood information that supports their position separately paid under the OPPS. vessels that we believe can be safely as to whether each of these procedures 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 Response: We appreciate the beneficiaries to significant safety risk if commenters stated these percutaneous commenters’ feedback and performed in an ASC setting at this time transluminal revascularization and would not meet our criteria recommendations. Additionally, we procedures through coronary artery established under § 416.166(b). note that we had the incorrect long bypass graft meet our established Specifically, we believe that descriptor for CPT 92973 displayed in criteria for addition to the ASC CPL and 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 intramural hematoma, among others. primary procedure)’’ and is displayed in the ASC CPL would expose

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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 • CPT code 15769 (Grafting of We received no comments on our intraocular lens prosthesis (1-stage autologous soft tissue, other, harvested proposal to add CPT code 29867 procedure), manual or mechanical (Arthroscopy, knee, surgical; by direct excision (for example, fat, technique (for example, irrigation and osteochondral allograft (for example, dermis, fascia)); • aspiration or phacoemulsification), mosaicplasty)) to the ASC CPL for CY CPT code 15771 (Grafting of complex, requiring devices or 2020 and subsequent years. autologous fat harvested by liposuction techniques not generally used in routine After consideration of the public technique to trunk, breasts, scalp, arms, 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 procedures would not be expected to cyclophotocoagulation); (Pericardiocentesis, including imaging pose a significant risk to beneficiary • CPT Code 66988 (Extracapsular 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 description of the procedure, we do not payment indicator ‘‘A2’’ is no longer exception of device removal procedures.

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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

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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

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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 through 78999) that are designated as calculated using the median cost instead services integrally related to the radiology services that are paid of the geometric mean cost. We believe provision of ASC covered surgical separately when provided integral to a using the median cost instead of the procedures that are paid separately surgical procedure on the ASC list are geometric mean cost has generally under the OPPS and provides packaged set to ‘‘Z2’’ so that payment is made provided an appropriate payment for ASC payment for other ancillary items based on the ASC standard ratesetting low-volume device-intensive and services that are packaged or methodology rather than the MPFS procedures in cases where there are no conditionally packaged (status nonfacility PE RVU amount (‘‘Z3’’), data anomalies. However, we note that indicators ‘‘N’’, ‘‘Q1’’, and ‘‘Q2’’) under regardless of which is lower (42 CFR we are adding paragraph (b)(4) to 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

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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 We note that stakeholders requested methodology as applying a ‘‘device a supply when used in a surgical that we propose to add CPT code 91040 offset’’ to the ASC payment for the procedure as covered ancillary services (Esophageal balloon distension study, associated surgical procedure. This that are integral to a covered surgical diagnostic, with provocation when ensures that duplicate payment is not procedure. Finally, we finalized a performed) to the ASC Covered provided for any portion of an change to § 416.171(b)(1) to exclude Procedures List (CPL) and ASC list of implanted device with OPPS pass- non-opioid pain management drugs that covered ancillary services as it is through payment status. function as a supply when used in a integral to the performance of covered In the CY 2015 OPPS/ASC final rule 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.

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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’’

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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 component of MKO melt, exhibits some local coverage determinations. The 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 high-risk for opioid addiction) and may One manufacturer of a high-frequency packaging policy incentivized providers warrant separate payment for CY 2020. SCS device stated that additional to use opioids over MKO Melt. In Commenters representing various payment was warranted for non-opioid accordance with section 1833(i)(8) of stakeholders requested separate pain management treatments because 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-

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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

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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 F. ASC Payment and Comment the complete list of ASC payment and CY 2016 OPPS/ASC final rule with comment indicators for CY 2020. Indicators comment period (80 FR 70497). G. Calculation of the ASC Payment 1. Background The ‘‘CH’’ comment indicator is used 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 1. Background that we introduced in the August 2, 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

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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

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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 OPPS relative payment weights (and budget neutrality adjustment for the believe that CMS needs to reduce the PFS nonfacility PE RVU-based amounts, wage index (discussed below), we disparity in payments between ASCs as applicable) for that same calendar summarized available CY 2017 ASC and HOPDs. Commenters stated that year and uniformly scale the ASC claims by ASC and by HCPCS code. We 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

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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

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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

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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) 3. Removal of Quality Measures From rate displayed in the ‘‘Final CY 2020 where we discuss our Meaningful the Hospital OQR Program Measure Set Payment Rate’’ column, each ASC 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 final rule with comment period (83 FR 2020 ASC conversion factor uses the CY 3. Regulatory History of the Hospital 59082). We did not propose any changes 2020 MFP-adjusted hospital market 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). through 2019 OPPS/ASC final rules market basket update of 3.0 percent a. Considerations in Removing Quality minus a projected MFP adjustment of with comment period (72 FR 66860 through 66875; 73 FR 68758 through Measures From the Hospital OQR 0.4 percentage point). Program In Addendum BB, there are no 68779; 74 FR 60629 through 60656; 75 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 with comment period (83 FR 59083 XIV. Requirements for the Hospital a detailed discussion of the priorities we through 59085), we clarified, finalized, Outpatient Quality Reporting (OQR) consider for the Hospital OQR Program and codified at 42 CFR 419.46(h)(2) and Program quality measure selection. We did not 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 remove measures from the Hospital 1. Overview (84 FR 39554). 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 known as the Reporting Hospital 419.46(h)(1) in the CY 2019 OPPS/ASC order to align the Hospital OQR Program 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.

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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 In the CY 2020 OPPS/ASC proposed CMS and its contractors. the same anatomic site who receive rule (84 FR 39554 through 39556), we This EBRT measure was also adopted EBRT with any of the following proposed to remove one measure from into another CMS quality reporting recommended fractionation schemes: the Hospital OQR Program for the CY program, the PPS-Exempt Cancer 30Gy/10fxns, 24Gy/6fxns, 20Gy/5fxns, 2022 payment determination as Hospital Quality Reporting (PCHQR) and 8Gy/1fxn. The denominator for this discussed below. Specifically, beginning Program (79 FR 50278 through 50279). measure includes all patients with with the CY 2022 payment That program initially used ‘‘radiation painful bone metastases and no determination, we proposed to remove planning’’ CPT codes billable at the previous radiation to the same anatomic OP–33: External Beam Radiotherapy for physician level, but beginning in March site who receive EBRT.86 Bone Metastases under removal Factor As noted 2016, the PCHQR program updated the 8, the costs associated with a measure above, each anatomic site is considered measure to enable the use of ‘‘radiation 87 outweigh the benefit of its continued a different case, and as a result it is delivery’’ CPT codes. 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 in EBRT treatment variation, ensure of the measure using ‘‘radiation do not automatically calculate the total appropriate use of EBRT, and prevent planning’’ CPT codes is less dose provided, so manual review of the overuse of radiation therapy (80 FR burdensome, Hospital Outpatient patient records by practice staff is also 70508). We believe that removing OP–33 from 87 QualityNet. 2018 EBRT Measure Information 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.

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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 This measure was originally adopted finalized that beginning with the CY Hospital OQR Program beginning in CY to address the performance gap in EBRT 2017 payment determination, hospitals 2022. Several commenters stated that treatment variation, ensure appropriate must report data submitted via a Web- they support the removal of OP–33 from use of EBRT, and prevent the overuse of based tool between January 1 and May 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 OP–33 from the Hospital OQR Program December 31 of 2 years prior to the shown that this measure is burdensome because the measure is burdensome and payment determination year. For the CY and difficult to report. Since the because it is no longer being maintained 2022 payment determination, the data measure steward is no longer submission window for this measure 88 by the measure steward so it may no maintaining this measure, 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 Comment: A few commenters readers to our response to comments rather than October 2020 encounters. A expressed concern about the proposal to below. We considered removing this few commenters requested that the remove EBRT for Bone Metastases (OP– measure beginning with the CY 2021 removal of OP–33 begin with the 33) from the Hospital OQR Program. payment determination, but we decided Calendar Year 2021 payment One commenter stated that the OP–33 to propose to delay removal until the CY determination rather than the Calendar measure gives valuable information for 2022 payment determination to be Year 2022 payment determination due monitoring hospital performance sensitive to facilities’ planning and to the significant burden of the reporting improvement. One commenter stated operational procedures given that data requirements. One commenter that the OP–33 measure is valuable collection for this measure began during recommended CMS to remove OP–33 as because it gauges overuse of health CY 2019 for the CY 2021 payment soon as possible. 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 for subsequent years under removal recommends that CMS adopt a OP–33: External Beam Radiotherapy for Factor 8. We chose this timeframe to be measurement framework that prioritizes Bone Metastases (NQF #1822) from the sensitive to facilities’ planning and consumer needs over industry Hospital OQR Program beginning with operational procedures given that data preference. The commenter also stated the CY 2022 payment determination and collection for this measure began during that because the measure steward is no CY 2019 for the CY 2021 payment longer maintaining the measure, CMS 88 See language about measure steward no longer should either continue to maintain the maintaining this measure in the FY 2020 IPPS/ determination. We realize that in our 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

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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 Hospital OQR Program measure sets for outweigh the benefit of its continued Imaging for Preoperative Risk the CY 2020 and CY 2021 payment use in the program as stakeholder Assessment for Non-Cardiac, Low-Risk determinations and subsequent years. feedback has shown that this measure is 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).

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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 updating the submission method for period that it would be beneficial to also Measures these measures in the future. We include these ASCQR Program measures in the Hospital OQR Program in order In the CY 2020 OPPS/ASC proposed requested public comment on to provide patients with more rule (84 FR 39557) we sought comment potentially adding these measures with meaningful data to compare sites of on the potential future adoption of four the updated submission method using a service (83 FR 59119). The future patient safety measures for the Hospital CMS online data submission tool, to the OQR Program that were previously addition of these measures would Hospital OQR Program in future further align the Hospital OQR and adopted for the ASCQR Program: ASC– rulemaking. These measures are 1: Patient Burn; ASC–2: Patient Fall; ASCQR Programs, which would benefit currently specified for the ASC setting. patients because these are two ASC–3: Wrong Site, Wrong Side, Wrong If specified for the hospital outpatient Procedure, Wrong Implant; and ASC–4: outpatient settings that patients may be setting, we would seek collaboration interested in comparing, especially if All-Cause Hospital Transfer/ with the measure steward. Admission.89 We refer readers to the CY they are able to choose in which of these 2012 OPPS/ASC final rule with We believe these measures could be two settings they receive care. Although NQF endorsement for these comment period (76 FR 74497 through valuable to the Hospital OQR Program ASC measures was removed (in 74499), where we adopted these because they would allow us to monitor February 2016 for the All-Cause measures (referred to as NQF #0263, these types of events and prevent their Hospital Transfer/Admission NQF #0266, NQF #0267, and NQF occurrence to ensure that they remain measure; 91 in May 2016 for the Patient #0265 at the time) in the ASCQR rare, and because they provide critical 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 Meaningful Measure Initiative quality 91 National Quality Forum. 0265 All-Cause &pagename=QnetPublic%2FPage Hospital Transfer/Admission. Available at: http:// %2FQnetTier2&cid=1228772475754. priority, Making Care Safer by Reducing www.qualityforum.org/QPS/0265.

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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 is defined as all ASC admissions.102 We measures; and in June (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 excludes ASC admissions experiencing performed on the wrong site/side, and with the measure steward to seek NQF 99 endorsement for those measures. These a fall outside the ASC. We believe this wrong patient can result in significant measure, if specified for the hospital measures are discussed in more detail impact on patients, including outpatient setting, would enable HOPDs below. complications, serious disability or 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. The numerator for this measure is who may face the risk of burns during (3) Wrong Site, Wrong Side, Wrong defined as ASC admissions requiring a ambulatory surgical procedures and we Patient, Wrong Procedure, Wrong hospital transfer or hospital admission believe monitoring patient burns is 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 of a complication, serious medical error, National Quality Forum. 0263 Patient Burn. fire prevention. Health Devices 2009 Available at: http://www.qualityforum.org/QPS/ Oct;38(10):314–32. 0263. 102 98 170. National Fire Protection Association ASC Quality Collaboration. Quality measures 93 National Quality Forum. 0267 Wrong Site, (NFPA). NFPA 99: Standard for health care developed and tested by the ASC Quality 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. Collaboration. Available at: http://ascquality.org/ Events in Healthcare—2006 Update: A Consensus 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.

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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 Response: We thank the commenters submission methods and to ensure the would be useful to add as well as for their recommendations regarding measures are appropriately specified for feedback on any process measures that potentially specifying ASC–1, ASC–2, the hospital outpatient setting. A few should be eliminated from the Hospital ASC–3, and ASC–4 for the hospital commenters recommended expedited OQR Program to further our goal of outpatient setting, interface with development and implementation of developing a comprehensive set of existing ASCQR Program measures, data these measures in the hospital quality measures for informed decision- submission methods, risk adjustment outpatient setting. making and quality improvement in issues, and potentially adding these Response: We thank the commenters HOPDs. We are moving towards greater measures to the Hospital OQR Program for their support for the potential future use of outcome measures and away from in the future. We note that as currently specification of ASC–1, ASC–2, ASC–3, use of clinical process measures across specified, these measures apply to all and ASC–4 for the hospital outpatient our Medicare quality reporting programs patients and they are not limited to fee- setting and the potential future addition to better assess the results of care. The for-service Medicare patients.108 of these measures to the Hospital OQR current measure set for the Hospital Comment: Many commenters Program. OQR Program includes measures that expressed concern to the potential Comment: Many commenters assess process of care, imaging future specification of ASC–1, ASC–2, provided recommendations regarding efficiency patterns, care transitions, ASC–3, and ASC–4 for the hospital potentially specifying ASC–1, ASC–2, (Emergency Department) ED throughput outpatient setting and the potential ASC–3, and ASC–4 for the hospital efficiency, Health Information future addition of these measures to the outpatient setting and potentially Technology (health IT) use, care Hospital OQR Program. Several adding these measures to the Hospital coordination, and patient safety. expressed concern that the measures are OQR Program in the future. Several Measures are of various types, including not endorsed by the National Quality commenters stated that decisions made those of process, structure, outcome, Forum. A few commenters stated that and efficiency. Through future 106 they believe because these measures Coley KC, Williams BA, DaPos SV, Chen C, rulemaking, we intend to propose new Smith RB. Retrospective evaluation of were designed specifically for ASCs, measures that support our goal of unanticipated admissions and readmissions after they would not be appropriate for use in achieving better health care and same day surgery and associated costs. J Clin the hospital outpatient setting. Several Anesth. 2002 Aug; 14(5):349–53. improved health for Medicare commenters expressed concern about 107 Junger A, Klasen J, Benson M, Sciuk G, 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.

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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 7. Public Display of Quality Measures measure in the Hospital OQR Program. Hospital OQR Program. We codified Response: We thank the commenters We refer readers to the CY 2014 and these procedural requirements regarding for these recommendations for participation status at 42 CFR 419.46(a) additional measures for the Hospital CY 2017 OPPS/ASC final rules with comment period (78 FR 75092 and 81 and (b). We did not propose any OQR Program. We agree that alignment changes to our participation status with the ASCQR Program is an FR 79791 respectively) for our previously finalized policies regarding policies in the CY 2020 OPPS/ASC important consideration; to that end, as proposed rule (84 FR 39559). discussed in section XIV.B.a of this final public display of quality measures. In 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 Payment Determinations responses and will take these C. Administrative Requirements 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 security administrator requirements, FR 70519 through 70520), we specified Specifications for Quality Measures including setting up a QualityNet our data submission deadlines. We 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: any changes to our requirements for the OQR Program payment determinations 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 period (77 FR 68481 through 68484) for

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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). voluntary: We refer readers to the CY 2017 • 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); • OP–29: Endoscopy/Polyp to be submitted for the CY 2022 requirements related to survey Surveillance: Appropriate Follow-up payment determination and subsequent administration and vendors for the OAS Interval for Normal Colonoscopy in years: CAHPS Survey-based measures. In • Average Risk Patients (NQF #0658) (via OP–2: Fibrinolytic Therapy addition, we refer readers to the CY 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 • Patient’s Visual Function within 90 OP–3: Median Time to Transfer to 59433), where we finalized a policy to Another Facility for Acute Coronary Days Following Cataract Surgery (NQF delay implementation of the OP–37a–e #1536) (via CMS’ QualityNet website). Intervention (NQF #0290); 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 and sampling requirements for chart- Currently, the following previously Based Tool for the CY 2022 Payment abstracted measures in the CY 2020 finalized Hospital OQR Program claims- Determination and Subsequent Years 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

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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

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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 this final rule with comment period for a. Retention of Previously Adopted reduction of the OPD fee schedule a general overview of our quality ASCQR Program Measures increase factor through the use of a reporting programs and to the CY 2019 reporting ratio for those hospitals that We previously finalized a policy 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 years, except when they are removed, was 0.980, which when multiplied by 2. Statutory History of the ASCQR suspended, or replaced as indicated (76 the proposed full conversion factor of 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 Program (that is, the reduced conversion propose any changes to this policy in a detailed discussion of the statutory factor) of $79.770. We proposed to the CY 2020 OPPS/ASC proposed rule history of the ASCQR Program. continue to apply the reporting ratio to (83 FR 39562). 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 minimum unadjusted and national • Factor 2. Performance or quality measure reporting programs for unadjusted copayment rates of all improvement on a measure does not multiple healthcare settings. To measure applicable services for those hospitals result in better patient outcomes. the quality of ASC services and to make that fail to meet the Hospital OQR • Factor 3. A measure does not align such information publicly available, we Program reporting requirements. We with current clinical guidelines or implemented the ASCQR Program. We also proposed to continue to apply all practice. refer readers to the CYs 2014 through other applicable standard adjustments • Factor 4. The availability of a more 2019 OPPS/ASC final rules with to the OPPS national unadjusted broadly applicable (across settings, comment period (78 FR 75122; 79 FR payment rates for hospitals that fail to populations, or conditions) measure for 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.

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• 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. a. Background 125 Bhattacharyya N. Ambulatory sinus and nasal surgery in the United States: Demographics and 112 Ambulatory surgery in the outpatient Coley KC, Williams BA, DaPos SV, Chen C, perioperative outcomes. The Laryngoscope. Smith RB. Retrospective evaluation of 2010;120(3):635–638. setting is common in the United States. unanticipated admissions and readmissions after 126 Bhattacharyya NN. Unplanned revisits and same day surgery and associated costs. Journal of Nearly 70 percent of all surgeries in the readmissions after ambulatory sinonasal surgery. clinical anesthesia. 2002;14(5):349–353. United States are performed in an The Laryngoscope. 2014;124(9):1983–1987. 113 Bain J, Kelly H, Snadden D, Staines H. Day outpatient setting with an expanding 127 Bhattacharyya NN. Revisits and postoperative surgery in Scotland: Patient satisfaction and hemorrhage after adult tonsillectomy. The number and variety of procedures being outcomes. Quality in Health Care. 1999;8(2):86–91. 110 111 Laryngoscope. 2014;124(7):1554–1556. performed at stand-alone ASCs. 114 Majholm BB. Is day surgery safe? A Danish 128 Hansen DG, Abbott LE, Johnson RM, Fox JP. multicentre study of morbidity after 57,709 day General surgery procedures are 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 reconstructive surgery (1963). 2014;134(3):370e– 115 Whippey A, Kostandoff G, Paul J, Ma J, 378e. (FFS) claims for patients aged 65 years Thabane L, Ma HK. Predictors of unanticipated 129 and older, from January 1, 2015 through admission following ambulatory surgery: A Mahboubi HH. Ambulatory laryngopharyngeal surgery: Evaluation of the national survey of December 31, 2015, 3,251 ASCs retrospective case-control study. Canadian Journal of Anesthesia/Journal canadien d’anesthe´sie. ambulatory surgery. JAMA otolaryngology— head & performed 149,468 general surgery 2013;60(7):675–683. neck surgery. 2013;139(1):28–31. 130 procedures. These procedures include 116 Fleisher LA, Pasternak LR, Herbert R, Orosco RKRK. Ambulatory thyroidectomy: A abdominal, alimentary tract, breast, Anderson GF. Inpatient hospital admission and multistate study of revisits and complications. skin/soft tissue, wound, and varicose death after outpatient surgery in elderly patients: Otolaryngology—head and neck surgery. Importance of patient and system characteristics 2015;152(6):1017–1023. vein stripping procedures. Of the 3,251 131 and location of care. Arch Surg. 2004;139(1):67–72. 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. performed at least 25 such procedures unanticipated admissions and readmissions after 132 Bhattacharyya N. Ambulatory sinus and nasal during this time period. Because of the same day surgery and associated costs. Journal of surgery in the United States: Demographics and clinical anesthesia. 2002;14(5):349–353. perioperative outcomes. The Laryngoscope. 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. 119 134 after General Surgery Procedures Bain J, Kelly H, Snadden D, Staines H. Day Bhattacharyya NN. Revisits and postoperative 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.

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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 1890A(a)(2) of the Act, the Secretary WorkArea/linkit.aspx?LinkIdentifier= 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? standardized rate that reflects clinically Facility-Level 7-Day Hospital Visits after LinkIdentifier=id&ItemID=87096. 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.

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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. d. Measure Calculation function of the patient demographic, We believe this proposed measure 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 expected compared to ASCs with 145 of this measure, ‘‘hospital visits’’ period. 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 146 Specific Measure Needs and Priorities’’. Available Program. 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

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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 hospital visits are typically related to tested interaction terms and retained within the CCS categories at the patients’ underlying comorbidities. those that were both significant at p < 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. exclusion criteria for the proposed involve or require major or prolonged 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- Criteria and Guidance for Evaluating Measures for Instruments/HospitalQualityInits/ 155 S. Coberly. The Basics; Relative Value Units Endorsement. 2015. Available at: http:// Measure-Methodology.html. (RVUs). National Health Policy Forum. January 12, www.qualityforum.org/Measuring_Performance/ 2015. Available at: http://www.nhpf.org/library/the- 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.

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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, clinicians, methodologists, researchers, facilities can use to improve quality of Comment: Several commenters and providers.160 To identify eligible care. supported the proposal to adopt ASC– ASC general surgery procedures, we 19: Facility-Level 7-Day Hospital Visits h. Provision of Facility-Specific first identified a list of procedures from after General Surgery Procedures Information Prior to Public Reporting Medicare’s 2014 and 2015 ASC lists of Performed at Ambulatory Surgical covered procedures. This list of surgical If this proposed measure is finalized, Centers for the ASCQR Program procedures is publicly available at: we intend to conduct a dry run before beginning with the CY 2024 payment https://www.cms.gov/medicare/ the official data collection period or any determination and for subsequent years. public reporting. A dry run is a period medicare-fee-for-service-payment/ Some commenters noted that this ascpayment/11_addenda_updates.html. of confidential reporting and feedback measure will provide valuable during which ASCs may review their Using an existing, defined list of information and does not add reporting surgeries, rather than defining surgeries dry run measure results, and in burden. addition, further familiarize themselves de novo, is useful for long-term measure Response: We thank the commenters maintenance. with the measure methodology and ask for supporting the adoption of this questions. For the dry run, we intend to Ambulatory procedures include a measure for the ASCQR Program. We heterogeneous mix of non-surgical use the most current 2-year set of agree that measuring quality of care complete claims (usually 12 months procedures, minor surgeries, and more associated with procedures performed at substantive surgeries. The measure is prior to the start date) available at the ASCs within the scope of general time of dry run. For example, if the dry not intended to include very low-risk surgery training will provide useful (minor) surgeries or non-surgical run began in June 2020, the most information for facilities as well as current 2-year set of data available procedures, which typically have a high beneficiaries and other stakeholders volume and a very low adverse outcome would likely be July 2017 to June 2019. while limiting facility burden. Because we use paid, final action rate. To focus the measure only on the Comment: One commenter subset of surgeries on Medicare’s list of Medicare claims, ASCs would not need recommended that we adopt the to submit any additional data for the dry covered ASC procedures that impose a measure sooner than the CY 2024 meaningful risk of post-procedure run. The dry run would generate payment determination. One commenter confidential feedback reports for ASCs, hospital visits; the measure includes 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 Level 7-Day Hospital Visits after General Surgery timeline proposed for implementation Procedures Performed at Ambulatory Surgical would be made available for ASCs to of this measure was to allow adequate review on their accounts at: http:// Centers. Available at: https://www.cms.gov/ time to conduct a dry run with at least Medicare/Quality-Initiatives-Patient-Assessment- Instruments/HospitalQualityInits/Measure- 158 2 years of data and to collect data with Ibid. sufficient reliability prior to the measure Methodology.html. 159 Snijders TA, Bosker RJ. Multilevel Analysis: 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

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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. In addition, the results of reliability surgery;’’ these beneficiaries are must be provided in the inpatient 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 CMS’s hospital readmission measures, specified procedures in the ASC setting there are additional procedures that are the CMS Planned Readmission as well as with similar outcome clinically appropriate for inclusion or Algorithm Version 4.0.162 In brief, the measures endorsed by NQF; this exclusion in the cohort definition as algorithm uses the procedure codes and measure was endorsed by NQF in June part of measure reevaluation. principal discharge diagnosis codes on 2018. The measure evaluation criteria of Comment: One commenter expressed each hospital claim to identify NQF committees are considered to be concern that for certain procedure admissions that are typically planned.54 rigorous and these committees typically categories (such as ‘‘Other therapeutic A few specific, limited types of care are require moderate or high reliability to 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.

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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

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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 ASCQR Program measure set for the CY provided input on the measure risk- National Quality Forum. (2017). Surgery, Fall 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 52 during development, and the measure 08/Surgery_Final_Report_-_Fall_2017_Cycle.aspx. adopted measures).

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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 quality and safety.165 The ASC QC In the CY 2020 OPPS/ASC proposed measures were developed by the ASC initiated a process of standardizing ASC rule (84 FR 39567 through 39568), we Quality Collaboration (ASC QC). The quality measure development through considered one topic for future ASC QC is a cooperative effort of 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 include ASC corporations, ASC ASC–4: All-Cause Hospital Transfer/ ASC–4 at the facility-level for feasibility Admission measures. and usability (76 FR 74496). These ASC–1, ASC–2, ASC–3, and ASC–4 164 ASC Quality Collaboration. ASC Quality Measures Implementation Guide Version 6.1 March measures are calculated via quality data 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. with comment period beginning with March-2019.pdf. 166 Ibid.

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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. The comments and our responses to payment determinations as ASCs submission tool. We are currently using the comments regarding the ASCQR become more familiar with reporting the QualityNet website (https:// Program Measures and Topics for requirements for the ASCQR Program. www.qualitynet.org) as our CMS online Future Consideration are set forth We have assessed this reporting data submission tool. threshold annually and have found that below. To submit measures via an online over 78 percent of reporting ASCs report Comment: Several commenters data submission tool to the QualityNet data for at least 90 percent of eligible supported the inclusion of these website, ASCs and any agents claims. measures in the ASCQR Program. 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

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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 display and the preview period by 6. Maintenance of Technical 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 measures, including the subregulatory summary of the data processing and starting with the CY 2018 payment process for updating adopted measures. collection periods for the claims-based determination on a CMS website and/or In the CY 2013 OPPS/ASC final rule measures using QDCs for the CY 2014 on our applicable listservs. In the CY with comment period (77 FR 68496 payment determination and subsequent 2018 OPPS/ASC final rule with through 68497), the CY 2014 OPPS/ASC years. In the CY 2016 OPPS/ASC final comment period (82 FR 59455 through final rule with comment period (78 FR rule with comment period (80 FR 59470), we discussed specific public 75131), and the CY 2015 OPPS/ASC 70534), we codified the requirements reporting policies associated with two final rule with comment period (79 FR regarding data processing and collection measures beginning with the CY 2022 66981), we provided additional periods for claims-based measures using 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

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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 Surgery Consumer Assessment of These data processing and collection b. Requirements for Data Submitted via Healthcare Providers and Systems (OAS period requirements will remain in the 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 2. Minimum Threshold, Minimum Case period (81 FR 79822 through 79824) for rulemakings cited therein) and Volume, and Data Completeness for our previously finalized policies § 416.310(c)(1) for our requirements Claims-Based Measures Using QDCs regarding survey administration and 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 Payment Determination and Subsequent 416.310(c) for our previously finalized • ASC–9: Endoscopy/Polyp Years policies for data submitted via an online 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:// • ASC–11: Cataracts: Improvement in period (82 FR 59474 through 59475) www.qualitynet.org. Patients’ Visual Function within 90 (and the previous rulemakings cited 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.

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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

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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 measure, eliminate provider confusion, A. Revision of the Definition of precise method to calculate an OPO’s and provide consistency between the ‘‘Expected Donation Rate’’ expected donation rate would be to base 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.

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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 completion of the current cycle. Additional suggestions included: A 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,

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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). We also revised the DOS requirements for transplant centers. We refer readers In the final rule with comment period for a chemotherapy sensitivity test to the Medicare and Medicaid Programs; entitled, in relevant part, ‘‘Revisions to performed on live tissue. As discussed Regulatory Provisions To Promote Payment Policies, Five-Year Review of in the December 1, 2006 MPFS final rule Program Efficiency, Transparency, and Work Relative Value Units, Changes to (71 FR 69706), we agreed with Burden Reduction; Fire Safety the Practice Expense Methodology commenters that these tests, which are Requirements for Certain Dialysis 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 MPFS final rule) (71 FR 69705 through Improvement in Patient Care final rule resection, appear to be unrelated to the 69706), we added a new § 414.510 in (84 FR 51732) for more information. hospital treatment in cases where it title 42 of the CFR regarding the clinical would be medically inappropriate to XVIII. Clinical Laboratory Fee laboratory DOS requirements and collect a test specimen other than at the Schedule: Revisions to the Laboratory revised our DOS policy for stored time of surgery, especially when the Date of Service Policy specimens. We explained in that MPFS specific drugs to be tested are ordered final rule that the DOS of a test may A. Background on the Medicare Part B at least 14 days following hospital affect payment for the test, especially in Laboratory Date of Service Policy discharge. As a result, we revised the situations in which a specimen that is DOS policy for chemotherapy collected while the patient is being The date of service (DOS) is a sensitivity tests, based on our treated in a hospital setting (for required data field on all Medicare understanding that the results of these example, during a surgical procedure) is claims for laboratory services. However, tests, even if they were available later used for testing after the patient a laboratory service may take place over immediately, would not typically affect has been discharged from the hospital. a period of time—the date the laboratory the treatment regimen at the hospital. We noted that payment for the test is test is ordered, the date the specimen is Specifically, we modified the DOS for usually bundled with payment for the collected from the patient, the date the chemotherapy sensitivity tests hospital service, even when the results laboratory accesses the specimen, the performed on live tissue in of the test did not guide treatment date the laboratory performs the test, § 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 on coverage and administrative policies • The decision regarding the specific 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 • Register on November 23, 2001 (66 FR The specimen was collected while a specimen stored less than or equal to the patient was undergoing a hospital 58791 through 58792), we adopted a 30 calendar days from the date it was policy under which the DOS for clinical surgical procedure; 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, surgical procedure; 2006 MPFS final rule that, for making determinations regarding the • length of time a specimen must be It would be medically inappropriate chemotherapy sensitivity tests that meet to have collected the sample other than stored to be considered ‘‘archived.’’ In this DOS policy, Medicare would allow during the hospital procedure for which response to comments requesting that separate payment under Medicare Part the patient was admitted; we issue a national standard to clarify B; that is, separate from the payment for • 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

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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 subcategory of CDLTs known as ADLTs, from the OPPS packaging policy is the test under arrangement. with separate reporting and payment date the test was performed (instead of In recent rulemakings, we have requirements under section 1834A of the date of specimen collection) if reviewed appropriate payment under certain conditions are met. Under the the OPPS for certain diagnostic tests the Act. In the CLFS final rule published in the Federal Register on exception that we finalized at that are not commonly performed by § 414.510(b)(5), in the case of a hospitals. In CY 2014, we finalized a June 23, 2016, entitled ‘‘Medicare Program; Medicare Clinical Diagnostic molecular pathology test or a test policy to package certain CDLTs under designated by CMS as an ADLT under the OPPS (78 FR 74939 through 74942 Laboratory Tests Payment System Final Rule’’ (81 FR 41036), we implemented paragraph (1) of the definition of an and 42 CFR 419.2(b)(17) and 419.22(l)). ADLT in § 414.502, the DOS of the test In CYs 2016 and 2017, we made some the requirements of section 1834A of the Act. must be the date the test was performed modifications to this policy (80 FR 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

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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) access to these tests. In addition, we whether the beneficiary is enrolled in 10419, Transmittal 4000, the claims noted that we had heard from original fee-for-service Medicare or a processing instruction implementing the commenters that the laboratory DOS specific Medicare Advantage plan. laboratory DOS exception at policy in effect prior to CY 2018 may According to stakeholders, the § 414.510(b)(5), with an effective date of have disproportionately limited access performing laboratory requires this January 1, 2018 and an implementation for Medicare beneficiaries under information so that it can bill Medicare date of July 2, 2018. After issuing CR Medicare Parts A and B, because directly for the test instead of seeking 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

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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

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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

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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 laboratories may perform certain requirements apply to services in similar beneficiary access issues that molecular pathology testing. We also furnished to a ‘hospital outpatient,’ as existed prior to the implementation of acknowledged that hospitals may not defined in § 410.2, during an the laboratory DOS exception at currently have the technical expertise or ‘encounter,’ also defined in § 410.2.’’ As § 414.510(b(5). We also acknowledge the certification requirements necessary to such, they suggested the potential concerns about the potential change to perform molecular pathology testing revision to the test results requirement the test results requirement being and therefore must rely on independent would not be consistent with this 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.

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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 (A) ADLTs based on our belief that the do not apply to molecular pathology ADLT under Criterion (A), are beneficiary access concerns were no tests. performed by a single laboratory (or 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

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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. believe that limiting the laboratory DOS molecular pathology tests are sole- 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 § 414.510(b)(5), the DOS of the test must performing laboratory may bill for the issues that prompted us to establish the be the date the test was performed, and test directly when performed on a laboratory DOS exception at the laboratory that performed the test specimen collected during a hospital § 414.510(b)(5). For this and other must bill Medicare directly for the test. outpatient encounter. As a result, they reasons discussed previously, we are This would include circumstances asserted that hospitals and laboratories not finalizing this change. 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 However, given the different purpose of of a few years, or even a few months. Exception at 42 CFR 414.510(b)(5) For example, if the laboratory DOS molecular pathology testing performed 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

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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

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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 the additional time of enforcement useful for analyzing how specific tests 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

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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 of the data with other relevant data, 169 The data reviewed are maintained in the CMS requirements unchanged for providers. Integrated Data Repository (IDR). The IDR is a high- We believe prior authorization for these such as the total number of Medicare volume data warehouse integrating Medicare Parts 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 proposed rule that we recently 170 The 5.8 percent average increase per year in medically necessary. As a method for completed an analysis of the volume of overall health care spending was arrived at using controlling unnecessary increases in the data publicly available on the Bureau of Labor and 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

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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

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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

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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

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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 of Service Policy; Proposed Changes to comments in support of prior authorization process. In assessing the

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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

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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. Comment: Some commenters program requirements. We will continue responsible for obtaining the prior expressed concern that even when a to work toward enhancing our overall authorization, that is, the physician or provisional affirmation is obtained, the program integrity strategy in meaningful the hospital, and whether all related claim could ultimately be denied and ways. We also appreciate the positive claims will be denied if prior that the requirement should be changed input regarding the DRLS, and we agree 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. that prior authorization processes add where a provisional affirmation was 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

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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,’’

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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 policy is specific to Medicare FFS, so ® ® on procedures that are not urgent and BOTOX and MYOBLOC so as not to we are not able to respond to comments likely cosmetic and of high value, and create distortion in the marketplace and that raise concerns regarding Medicare we have included an expedited process incentivize providers to administer Advantage prior authorization if circumstances warrant. Along with 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 women and veterans more significantly process matures and CMS implements care costs against the OPD payments than other categories because these new technologies, such as the DRLS or trending data when other spending data groups tend to experience migraines at other industry standards, we will may be more appropriate. higher rates than other categories and effectuate improvements to the prior Response: We thank this commenter this could ultimately lead to an increase authorization process and coverage and have evaluated U.S. Bureau of in opioid abuse within these groups. We requirements. Economic Analysis (BEA) data, which 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

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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

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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) was published in the Federal Register beyond July 1, 2020, while others of the Act grants CMS the authority to

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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 as a method to control those waste and abuse, including unnecessary process is being adopted under section unnecessary increases. We carefully increases in volume. Prior authorization 1833(t)(2)(F) of the Act, which is considered all available options in has already proven to be an effective specific to the OPPS, which provides choosing to propose the prior method for controlling improper payment only to hospital outpatient authorization process, which has payments and decreasing the volume of 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

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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 authorization process is being adopted burden, can result in unnecessary concern that no appeal rights exist for under section 1833(t)(2)(F) of the Act, delays in care, and interfere with the those instances where a non-affirmation which is specific to OPD services, physician-patient care decision or is received and that CMS should which provides payment only to otherwise negatively affect patient care. determine the cost of care to hospital outpatient departments. In light Some commenters specifically beneficiaries who are negatively of the different arrangements that could mentioned problems associated with impacted by the receipt of a non- exist with physicians in different prior authorization processes within 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.

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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

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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 delays and encourage effective baseline growth rate is an appropriate process, which reflected a 2.3 percent communication changes between method for identifying potentially average annual increase per year in providers and health plans. Other unnecessary increases in volume. By overall health care spending using data commenters requested that CMS adopt a identifying trends over the 11-year publicly available on the BEA web page, required response period for initial and period for OPD services, we are able to located at: https://apps.bea.gov/iTable/ repeat prior authorization requests, contrast and compare specific services iTable.cfm?reqid=51&step=2&isuri= noted CMS’ lack of experience in using as targets for increases in volume versus 1https. prior authorization in Medicare Fee-For- our expectations. Moreover, in making 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.

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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, 1995, so long as the HwH continues to Reporting, Maintenance of Hospital 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 received approximately 46 timely pieces as buildings used by another hospital. or more entire buildings located on the

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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 resident caps in teaching hospitals that (including children’s hospitals) because claims submitted by these children’s closed ‘‘on or after a date that is 2 years the underlying policy concern of hospitals, which results in a minimal before the date of enactment’’ (that is, hospitals creating new entities that were 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 IPPS hospitals comply with the Process—Round 16 agreed with our assessment that separateness and control requirements allowing grandfathered children’s HwHs CMS has learned of the closure of in those regulations. We adopted this to increase their beds would not impart Hahnemann University Hospital, change because we believe that the an economic advantage to these located in Philadelphia, PA (CCN policy concerns that underlay the hospitals. 390290). Accordingly, this notice serves 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 located with each other, in large part round of the section 5506 application are finalizing our proposal without due to changes that have been made to and selection process. This round will modification. the way most types of IPPS-excluded be the 16th round (‘‘Round 16’’) of the 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.

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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 [email protected]. 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 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 application to the CMS Central Office slots under section 5506 of the comment period are published and

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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 necessarily a rough adjustment, both exceed the amount of the inpatient 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 that doubling the hourly wage rate To view the Addenda to this final rule services known as the Hospital IQR ($19.40 × 2 = $38.80) to estimate total with comment period pertaining to CY Program. We refer readers to the CY cost is a reasonably accurate estimation 2020 payments under the OPPS, we 2011 through CY 2019 OPPS/ASC final method and allows for a conservative refer readers to the CMS website at: rules with comment periods (75 FR estimate of hourly costs. This approach http://www.cms.gov/Medicare/ 72111 through 72114; 76 FR 74549 is consistent with our previously Medicare-Fee-for-Service-Payment/ through 74554; 77 FR 68527 through finalized burden calculation HospitalOutpatientPPS/Hospital- 68532; 78 FR 75170 through 75172; 79 methodology (82 FR 59477). Outpatient-Regulations-and- FR 67012 through 67015; 80 FR 70580 Accordingly, we calculate cost burden Notices.html; select ‘‘1717–FC’’ from the 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.

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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 submitted before the service is provided based measures. Accordingly, we 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

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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 × change to the second year of the two- × payment policies and rates for 67,260, submissions plus 3 hours outpatient services furnished by year phase-in of the clinic visit policy. The government has appeal rights, and 5,732 providers for education). The 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 annual burden hours, allotted across all This final rule with comment period APCs. We also are required under providers, would be 84,450 hours (.5 also is necessary to make updates to the 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 The annual burden cost would be payment policies and payment rates for 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 B. Overall Impact for Provisions of This laboratory DOS policy does not impose period (83 FR 59013 through 59014), we Final Rule With Comment Period any information collection implemented this policy with a 2-year 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

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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. C. Detailed Economic Analyses regulatory impact analysis in the We estimate that the update to 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 payments, the pass-through payment final rule with comment period, as 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

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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

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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 the budget neutrality adjustments and changes between CY 2019 and CY 2020 hospitals. We excluded all hospitals and 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 policy on a nationwide basis, as well as CY 2019, including the impact of time, we are unable to calculate a DSH changes in estimated outlier payments, the CY 2020 proposed changes in wage variable for hospitals that are not also index policy discussed in section II.C. of and changes to the pass-through paid under the IPPS because DSH payment estimate (Column 6). the CY 2020 OPPS/ASC proposed rule. payments are only made to hospitals We did not model a budget neutrality We did not model an explicit budget paid under the IPPS. Hospitals for neutrality adjustment for the rural adjustment for the rural adjustment for which we do not have a DSH variable SCHs because we are continuing the adjustment for SCHs because we are are grouped separately and generally maintaining the current adjustment rural payment adjustment of 7.1 percent include freestanding psychiatric to rural SCHs for CY 2020, as described percentage for CY 2020. Because the hospitals, rehabilitation hospitals, and updates to the conversion factor in section II.E. of this final rule with long-term care hospitals. We show the comment period. We also modeled a (including the update of the OPD fee total number of OPPS hospitals (3,625), schedule increase factor), the estimated budget neutrality adjustment for the excluding the hold-harmless cancer and cancer hospital payment adjustment cost of the rural adjustment, and the children’s hospitals and CMHCs, on the estimated cost of projected pass-through because we are using a payment-to-cost second line of the table. We excluded ratio target for the cancer hospital payment for CY 2020 are applied cancer and children’s hospitals because uniformly across services, observed payment adjustment in CY 2020 of .90, section 1833(t)(7)(D) of the Act which is higher than the ratio that was redistributions of payments in the permanently holds harmless cancer impact table for hospitals largely reported for the CY 2019 OPPS/ASC hospitals and children’s hospitals to final rule with comment period (83 FR depend on the mix of services furnished their ‘‘pre-BBA amount’’ as specified by a hospital (for example, how the 58873). We note that, in accordance under the terms of the statute, and with section 16002 of the 21st Century APCs for the hospital’s most frequently therefore, we removed them from our furnished services will change), and the Cures Act, we are applying a budget impact analyses. We show the isolated neutrality factor calculated as if the impact of the wage index changes on the impact on the 41 CMHCs at the bottom hospital. However, total payments made cancer hospital adjustment target of the impact table (Table 41) and payment-to-cost ratio was 0.90, not the under this system and the extent to discuss that impact separately below. which this final rule with comment 0.89 target payment-to-cost ratio we are 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.

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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 independent effect of all changes in a rate that will be 40 percent of the policy, minus 0.74 percent for the Column 6 using the final relative OPPS rate for a clinic visit service for change in the pass-through payment payment weights for CY 2019 and the CY 2020. We note that the numbers estimate between CY 2019 and CY 2020, relative payment weights for CY 2020. provided in this column isolate the plus no difference in estimated outlier We used the final conversion factor for estimated effect of this policy payments between CY 2019 (1.00 CY 2019 of $79.490 and the final CY adjustment relative to the numerator of percent) and CY 2020 (1.00 percent). We 2020 conversion factor of $80.784 Column 4. Therefore, the numbers estimate that the combined effect of all discussed in section II.B. of this final reported in Column 5 show how much final changes for CY 2020 will increase rule with comment period. of the difference between the estimates payments to urban hospitals by 1.3 in Column 4 and the estimates in Column 6 contains simulated outlier payments for each year. We used the 1- percent. Overall, we estimate that rural Column 6 are a result of the finalized hospitals will experience a 1.1 percent off-campus PBD visits policy for CY year charge inflation factor used in the FY 2020 IPPS/LTCH PPS final rule (84 increase as a result of the combined 2020, as finalized in the CY 2019 OPPS/ effects of all the changes for CY 2020. ASC final rule with comment period (83 FR 42629) of 5.4 percent (1.05404) to 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 outlier and pass-through payments will same number of days of PHP care as payment rate, makes the OPPS budget result in a total 3.7 percent increase in seen in the CY 2018 claims used for 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 rate for partial hospitalization when 3 or impact of adopting the final FY 2020

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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. • Alternatives Considered for the For services for which the beneficiary governmenwe dis. Alternative OPPS Proposed Changes in the Level of pays a copayment of 20 percent of the Policies Considered 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 throughout the final rule. We refer readers to section X.A. of the 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

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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 example, we estimate a 4-percent accurately project such changes at a 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 program payments are attributed. increases the payment weights for eye 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 Also displayed in Table 69 is a eye, digestive system, or orthopedic 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.

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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. • Column 1—CPT/HCPCS code. payment system on aggregate ASC • Column 4—Estimated CY 2020 • Column 2—Short Descriptor of the payments for selected surgical Percent Change reflects the percent procedures during CY 2020. The table HCPCS code. • Column 3—Estimated CY 2019 ASC differences between the estimated ASC displays 30 of the procedures receiving Payments were calculated using CY payment for CY 2019 and the estimated the greatest estimated CY 2019 aggregate 2018 ASC utilization (the most recent payment for CY 2020 based on the 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 Medicare payments will be reduced by rates for the same procedures under the to set OPPS relative payment weights,

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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. classification of expenditures for the CY CY 2020, the beneficiary coinsurance The second accounting statement, Table 2020 estimated hospital OPPS incurred amount under the ASC payment system 72, illustrates the classification of benefit impacts associated with the generally will be no greater than the expenditures associated with the 2.6 beneficiary coinsurance under the PFS proposed CY 2020 OPD fee schedule percent CY 2020 update to the ASC because the coinsurance under both increase. This $1.21 billion in payment system, based on the payment systems generally is 20 percent additional Medicare spending estimate (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 XXVI. Economic Analyses changes to the Hospital OQR Program 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 1. Overall Impact payment determination, we determined 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 b. Estimated Effects of Adoption of Radiotherapy for Bone Metastases. In Sector, lists an estimate for the overall ASC–19: Facility-Level 7-Day Hospital the CY 2020 OPPS/ASC proposed rule, economic impact to the health sector for Visits After General Surgery Procedures we inadvertently stated that we were the services combined. The values Performed at Ambulatory Surgical proposing to remove this measure populating this table were obtained Centers (NQF #3357) beginning with October 2020 encounters 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

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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 combined with or masquerading as minimal on providers who are service utilization. In making the therapeutic services. compliant with Medicare coverage and 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

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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 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 convenience or usefulness for unnecessary utilization of those prior authorization for certain OPD

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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 H. Regulatory Review Costs recommending the service evaluates the comment period, we discuss our 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 Within-Hospitals (HwHs) Due to comments received on the CY 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

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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 K. Reducing Regulation and Controlling rule) that imposes substantial direct any single year or by the hospital’s not- Regulatory Costs costs on State and local governments, for-profit status. Most ASCs and most Executive Order 13771, titled preempts State law, or otherwise has CMHCs are considered small businesses federalism implications. We have with total revenues of $16.5 million or Reducing Regulation and Controlling Regulatory Costs, was issued on January examined the OPPS and ASC provisions less in any single year. For details, we included in this final rule with refer readers to the Small Business 30, 2017. It has been determined that comment period in accordance with Administration’s ‘‘Table of Size this final rule with comment period, Executive Order 13132, Federalism, and Standards’’ at http://www.sba.gov/ will be a regulatory action for the have determined that they will not have content/table-small-business-size- purposes of Executive Order 13771. We a substantial direct effect on State, local standards. As its measure of significant estimate that this final rule with or tribal governments, preempt State economic impact on a substantial comment period will generate $2.5 law, or otherwise have a federalism number of small entities, HHS uses a million in annualized cost at a 7-percent implication. As reflected in Table 68 of change in revenue of more than 3 to 5 discount rate, discounted relative to this final rule with comment period, we percent. We do not believe that this 2016, over a perpetual time horizon. 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. provider-based department clinic visits small rural hospitals. We note that the 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

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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 hospital or CAH, or in an outpatient 42 CFR Part 416 ■ 7. The authority citation for part 414 department of the hospital or CAH, both Health facilities, Health professions, continues to read as follows: on and off-campus, as defined in Medicare, Reporting and recordkeeping Authority: 42 U.S.C. 1302, 1395hh, and requirements. § 413.65 of this chapter, general supervision means the definition 1395rr(b)(l). 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 follows: 42 CFR Part 486 supervision or personal supervision. For 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 PART 405—FEDERAL HEALTH nonphysician practitioner must be distribution of blood or blood 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 clinical laboratory and pathology ■ SERVICES 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

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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. SYSTEM FOR HOSPITAL OUTPATIENT request must— 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 or in Title XVIII of the Social Security ■ 14. Subpart I, consisting of §§ 419.80 authorization request in accordance 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 § 419.83(c). business days of receipt of the prior services. authorization request. 419.83 List of hospital outpatient (2) CMS or its contractor may deny a claim that has received a provisional (2) Review of expedited review department services requiring prior request. Upon receipt of a request for authorization. affirmation based on either of the 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.

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(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 ■ or any other open area. An OPO requiring prior authorization. (1) The 16. Section 486.302 is amended by competing for an open service area must following service categories comprise revising the definition of ‘‘Expected submit information and data that the list of hospital outpatient donation rate’’ to read as follows: 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 * * * * * § 486.318(a)(1) and (3) for OPOs not authorization process. Dated: October 24, 2019. (1) An exemption will remain in effect operating exclusively in the until CMS elects to withdraw the noncontiguous States, Commonwealths, Seema Verma, exemption. Territories, or possessions; or Administrator, Centers for Medicare and (2) Notice of an exemption or § 486.318(b)(1) and (3) for OPOs Medicaid Services. 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

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