Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs, 33558-33724 [2017-14883]
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 416 and 419
[CMS–1678–P]
RIN 0938–AT03
Medicare Program: Hospital Outpatient
Prospective Payment and Ambulatory
Surgical Center Payment Systems and
Quality Reporting Programs
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
revise the Medicare hospital outpatient
prospective payment system (OPPS) and
the Medicare ambulatory surgical center
(ASC) payment system for CY 2018 to
implement changes arising from our
continuing experience with these
systems and certain provisions under
the 21st Century Cures Act (Pub. L. 114–
255). In this proposed rule, we describe
the proposed changes to the amounts
and factors used to determine the
payment rates for Medicare services
paid under the OPPS and those paid
under the ASC payment system. In
addition, this proposed rule would
update and refine the requirements for
the Hospital Outpatient Quality
Reporting (OQR) Program and the ASC
Quality Reporting (ASCQR) Program.
DATES: Comment period: To be assured
consideration, comments on this
proposed rule must be received at one
of the addresses provided in the
ADDRESSES section no later than 5 p.m.
EST on September 11, 2017.
ADDRESSES: In commenting, please refer
to file code CMS–1678–P when
commenting on the issues in this
proposed rule. Because of staff and
resource limitations, we cannot accept
comments by facsimile (FAX)
transmission.
You may submit comments in one of
four ways (no duplicates, please):
1. Electronically. You may (and we
encourage you to) submit electronic
comments on this regulation to https://
www.regulations.gov. Follow the
instructions under the ‘‘submit a
comment’’ tab.
2. By regular mail. You may mail
written comments to the following
address ONLY:
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Attention: CMS–
1678–P, P.O. Box 8013, Baltimore,
MD 21244–1850.
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Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments via express
or overnight mail to the following
address ONLY:
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Attention: CMS–
1678–P, Mail Stop C4–26–05, 7500
Security Boulevard, Baltimore, MD
21244–1850.
4. By hand or courier. If you prefer,
you may deliver (by hand or courier)
your written comments before the close
of the comment period to either of the
following addresses:
a. For delivery in Washington, DC—
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Room 445–G, Hubert
H. Humphrey Building, 200
Independence Avenue SW.,
Washington, DC 20201.
(Because access to the interior of the
Hubert H. Humphrey Building is not
readily available to persons without
Federal Government identification,
commenters are encouraged to leave
their comments in the CMS drop slots
located in the main lobby of the
building. A stamp-in clock is available
for persons wishing to retain a proof of
filing by stamping in and retaining an
extra copy of the comments being filed.)
b. For delivery in Baltimore, MD—
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, 7500 Security
Boulevard, Baltimore, MD 21244–
1850.
If you intend to deliver your
comments to the Baltimore address,
please call the telephone number (410)
786–7195 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses
indicated as appropriate for hand or
courier delivery may be delayed and
received after the comment period.
For information on viewing public
comments, we refer readers to the
beginning of the SUPPLEMENTARY
INFORMATION section.
FOR FURTHER INFORMATION CONTACT: (We
note that public comments must be
submitted through one of the four
channels outlined in the ADDRESSES
section above. Comments may not be
submitted via email.)
Advisory Panel on Hospital
Outpatient Payment (HOP Panel),
contact the HOP Panel mailbox at
APCPanel@cms.hhs.gov.
Ambulatory Surgical Center (ASC)
Payment System, contact Elisabeth
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Daniel at 410–786–0237 or via email
Elisabeth.Daniel1@cms.hhs.gov.
Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
Administration, Validation, and
Reconsideration Issues, contact Anita
Bhatia at 410–786–7236 or via email
Anita.Bhatia@cms.hhs.gov.
Ambulatory Surgical Center Quality
Reporting (ASCQR) Program Measures,
contact Vinitha Meyyur at 410–786–
8819 or via email Vinitha.Meyyur@
cms.hhs.gov.
Blood and Blood Products, contact
Josh McFeeters at 410–786–9732 or via
email Joshua.McFeeters@cms.hhs.gov.
Cancer Hospital Payments, contact
Scott Talaga at 410–786–4142 or via
email Scott.Talaga@cms.hhs.gov.
Care Management Services, contact
Scott Talaga at 410–786–4142 or via
email Scott.Talaga@cms.hhs.gov.
CPT Codes, contact Marjorie Baldo at
410–786–4617 or via email
Marjorie.Baldo@cms.hhs.gov.
CMS Web Posting of the OPPS and
ASC Payment Files, contact Chuck
Braver at 410–786–6719 or via email
Chuck.Braver@cms.hhs.gov.
Composite APCs (Low Dose
Brachytherapy and Multiple Imaging),
contact Twi Jackson at 410–786–1159 or
via email Twi.Jackson@cms.hhs.gov.
Comprehensive APCs (C–APCs),
contact Lela Strong at 410–786–3213 or
via email Lela.Strong@cms.hhs.gov.
Hospital Outpatient Quality Reporting
(OQR) Program Administration,
Validation, and Reconsideration Issues,
contact Anita Bhatia at 410–786–7236 or
via email Anita.Bhatia@cms.hhs.gov.
Hospital Outpatient Quality Reporting
(OQR) Program Measures, contact
Vinitha Meyyur at 410–786–8819 or via
email Vinitha.Meyyur@cms.hhs.gov.
Hospital Outpatient Visits (Emergency
Department Visits and Critical Care
Visits), contact Twi Jackson at 410–786–
1159 or via email Twi.Jackson@
cms.hhs.gov.
Inpatient Only (IPO) Procedures List,
contact Lela Strong at 410–786–3213 or
via email Lela.Strong@cms.hhs.gov.
New Technology Intraocular Lenses
(NTIOLs), contact Scott Talaga at 410–
786–4142 or via email Scott.Talaga@
cms.hhs.gov.
No Cost/Full Credit and Partial Credit
Devices, contact Twi Jackson at 410–
786–1159 or via email Twi.Jackson@
cms.hhs.gov.
OPPS Brachytherapy, contact Scott
Talaga at 410–786–4142 or via email
Scott.Talaga@cms.hhs.gov.
OPPS Data (APC Weights, Conversion
Factor, Copayments, Cost-to-Charge
Ratios (CCRs), Data Claims, Geometric
Mean Calculation, Outlier Payments,
and Wage Index), contact Erick Chuang
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at 410–786–1816 or via email
Erick.Chuang@cms.hhs.gov or contact
Elisabeth Daniel at 410–786–0237 or via
email Elisabeth.Daniel1@cms.hhs.gov.
OPPS Drugs, Radiopharmaceuticals,
Biologicals, and Biosimilar Products,
contact Elisabeth Daniel at 410–786–
0237 or via email Elisabeth.Daniel1@
cms.hhs.gov.
OPPS New Technology Procedures/
Services, contact the New Technology
APC email at
NewTechAPCapplications@
cms.hhs.gov.
OPPS Exceptions to the 2 Times Rule,
contact Marjorie Baldo at 410–786–4617
or via email Marjorie.Baldo@
cms.hhs.gov.
OPPS Packaged Items/Services,
contact Elisabeth Daniel at 410–786–
0237 or via email Elisabeth.Daniel1@
cms.hhs.gov.
OPPS Pass-Through Devices, contact
the Device Pass-Through email at
DevicePTapplications@cms.hhs.gov.
OPPS Status Indicators (SI) and
Comment Indicators (CI), contact
Marina Kushnirova at 410–786–2682 or
via email Marina.Kushnirova@
cms.hhs.gov.
Partial Hospitalization Program (PHP)
and Community Mental Health Center
(CMHC) Issues, contact the PHP
Payment Policy Mailbox at
PHPPaymentPolicy@cms.hhs.gov.
Potential Revisions to the Laboratory
Date of Service Policy, contact Rasheeda
Johnson at 410–786–3434 or via email
Rasheeda.Johnson1@cms.hhs.gov or
Susan Janeczko at 410–786–4529 or via
email Susan.Janeczko@cms.hhs.gov.
Rural Hospital Payments, contact Josh
McFeeters at 410–786–9732 or via email
Joshua.McFeeters@cms.hhs.gov.
Skin Substitutes, contact Josh
McFeeters at 410–786–9732 or via email
Joshua.McFeeters@cms.hhs.gov.
All Other Issues Related to Hospital
Outpatient and Ambulatory Surgical
Center Payments Not Previously
Identified, contact Lela Strong at 410–
786–3213 or via email Lela.Strong@
cms.hhs.gov.
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SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following Web
site as soon as possible after they have
been received: https://
www.regulations.gov/. Follow the search
instructions on that Web site to view
public comments.
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Comments received timely will also
be available for public inspection,
generally beginning approximately 3
weeks after publication of the rule, at
the headquarters of the Centers for
Medicare & Medicaid Services, 7500
Security Boulevard, Baltimore, MD
21244, on Monday through Friday of
each week from 8:30 a.m. to 4:00 p.m.
EST. To schedule an appointment to
view public comments, phone 1–800–
743–3951.
Electronic Access
This Federal Register document is
also available from the Federal Register
online database through Federal Digital
System (FDsys), a service of the U.S.
Government Printing Office. This
database can be accessed via the
Internet at https://www.gpo.gov/fdsys/.
Addenda Available Only Through the
Internet on the CMS Web Site
In the past, a majority of the Addenda
referred to in our OPPS/ASC proposed
and final rules were published in the
Federal Register as part of the annual
rulemakings. However, beginning with
the CY 2012 OPPS/ASC proposed rule,
all of the Addenda no longer appear in
the Federal Register as part of the
annual OPPS/ASC proposed and final
rules to decrease administrative burden
and reduce costs associated with
publishing lengthy tables. Instead, these
Addenda are published and available
only on the CMS Web site. The
Addenda relating to the OPPS are
available at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
index.html. The Addenda relating to the
ASC payment system are available at:
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/.
Alphabetical List of Acronyms
Appearing in This Federal Register
Document
AHA American Hospital Association
AMA American Medical Association
AMI Acute myocardial infarction
APC Ambulatory Payment Classification
API Application programming interface
APU Annual payment update
ASC Ambulatory surgical center
ASCQR Ambulatory Surgical Center
Quality Reporting
ASP Average sales price
AUC Appropriate use criteria
AWP Average wholesale price
BBA Balanced Budget Act of 1997, Public
Law 105–33
BBRA Medicare, Medicaid, and SCHIP
[State Children’s Health Insurance
Program] Balanced Budget Refinement Act
of 1999, Public Law 106–113
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BIPA Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act
of 2000, Public Law 106–554
BLS Bureau of Labor Statistics
CAH Critical access hospital
CAHPS Consumer Assessment of
Healthcare Providers and Systems
CAP Competitive Acquisition Program
C–APC Comprehensive Ambulatory
Payment Classification
CASPER Certification and Survey Provider
Enhanced Reporting
CAUTI Catheter-associated urinary tract
infection
CBSA Core-Based Statistical Area
CCM Chronic care management
CCN CMS Certification Number
CCR Cost-to-charge ratio
CDC Centers for Disease Control and
Prevention
CED Coverage with Evidence Development
CERT Comprehensive Error Rate Testing
CFR Code of Federal Regulations
CI Comment indicator
CLABSI Central Line [Catheter] Associated
Blood Stream Infection
CLFS Clinical Laboratory Fee Schedule
CMHC Community mental health center
CMS Centers for Medicare & Medicaid
Services
CoP Condition of participation
CPI–U Consumer Price Index for All Urban
Consumers
CPT Current Procedural Terminology
(copyrighted by the American Medical
Association)
CR Change request
CRC Colorectal cancer
CSAC Consensus Standards Approval
Committee
CT Computed tomography
CV Coefficient of variation
CY Calendar year
DFO Designated Federal Official
DME Durable medical equipment
DMEPOS Durable Medical Equipment,
Prosthetic, Orthotics, and Supplies
DOS Date of service
DRA Deficit Reduction Act of 2005, Public
Law 109–171
DSH Disproportionate share hospital
EACH Essential access community hospital
EAM Extended assessment and
management
ECD Expanded criteria donor
EBRT External beam radiotherapy
ECG Electrocardiogram
ED Emergency department
EDTC Emergency department transfer
communication
EHR Electronic health record
E/M Evaluation and management
ESRD End-stage renal disease
ESRD QIP End-Stage Renal Disease Quality
Improvement Program
FACA Federal Advisory Committee Act,
Public Law 92–463
FDA Food and Drug Administration
FFS [Medicare] Fee-for-service
FY Fiscal year
GAO Government Accountability Office
GI Gastrointestinal
GME Graduate medical education
HAI Healthcare-associated infection
HCAHPS Hospital Consumer Assessment of
Healthcare Providers and Systems
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HCERA Health Care and Education
Reconciliation Act of 2010, Public Law
111–152
HCP Health care personnel
HCPCS Healthcare Common Procedure
Coding System
HCRIS Healthcare Cost Report Information
System
HCUP Healthcare Cost and Utilization
Project
HEU Highly enriched uranium
HH QRP Home Health Quality Reporting
Program
HHS Department of Health and Human
Services
HIE Health information exchange
HIPAA Health Insurance Portability and
Accountability Act of 1996, Public Law
104–191
HOP Hospital Outpatient Payment [Panel]
HOPD Hospital outpatient department
HOP QDRP Hospital Outpatient Quality
Data Reporting Program
HPMS Health Plan Management System
IBD Inflammatory bowel disease
ICC Interclass correlation coefficient
ICD Implantable cardioverter defibrillator
ICD–9–CM International Classification of
Diseases, Ninth Revision, Clinical
Modification
ICD–10 International Classification of
Diseases, Tenth Revision
ICH In-center hemodialysis
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IGI IHS Global Insight, Inc.
IHS Indian Health Service
I/OCE Integrated Outpatient Code Editor
IOL Intraocular lens
IORT Intraoperative radiation treatment
IPFQR Inpatient Psychiatric Facility
Quality Reporting
IPPS [Hospital] Inpatient Prospective
Payment System
IQR [Hospital] Inpatient Quality Reporting
IRF Inpatient rehabilitation facility
IRF QRP Inpatient Rehabilitation Facility
Quality Reporting Program
IT Information technology
LCD Local coverage determination
LDR Low dose rate
LTCH Long-term care hospital
LTCHQR Long-Term Care Hospital Quality
Reporting
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP
Reauthorization Act of 2015, Public Law
114–10
MAP Measure Application Partnership
MDH Medicare-dependent, small rural
hospital
MedPAC Medicare Payment Advisory
Commission
MEG Magnetoencephalography
MFP Multifactor productivity
MGCRB Medicare Geographic Classification
Review Board
MIEA–TRHCA Medicare Improvements and
Extension Act under Division B, Title I of
the Tax Relief Health Care Act of 2006,
Public Law 109–432
MIPPA Medicare Improvements for Patients
and Providers Act of 2008, Public Law
110–275
MLR Medical loss ratio
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MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003, Public Law 108–173
MMEA Medicare and Medicaid Extenders
Act of 2010, Public Law 111–309
MMSEA Medicare, Medicaid, and SCHIP
Extension Act of 2007, Public Law 110–173
MPFS Medicare Physician Fee Schedule
MR Medical review
MRA Magnetic resonance angiography
MRgFUS Magnetic Resonance Image
Guided Focused Ultrasound
MRI Magnetic resonance imaging
MRSA Methicillin-Resistant
Staphylococcus Aures
MS–DRG Medicare severity diagnosisrelated group
MSIS Medicaid Statistical Information
System
MUC Measure under consideration
NCCI National Correct Coding Initiative
NEMA National Electrical Manufacturers
Association
NHSN National Healthcare Safety Network
NOTA National Organ and Transplantation
Act
NOS Not otherwise specified
NPI National Provider Identifier
NQF National Quality Forum
NQS National Quality Strategy
NTIOL New technology intraocular lens
NUBC National Uniform Billing Committee
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
of 1996, Public Law 99–509
O/E Observed to expected event
OIG [HHS] Office of the Inspector General
OMB Office of Management and Budget
ONC Office of the National Coordinator for
Health Information Technology
OPD [Hospital] Outpatient Department
OPPS [Hospital] Outpatient Prospective
Payment System
OPSF Outpatient Provider-Specific File
OQR [Hospital] Outpatient Quality
Reporting
OT Occupational therapy
PAMA Protecting Access to Medicare Act of
2014, Public Law 113–93
PCHQR PPS-Exempt Cancer Hospital
Quality Reporting
PCR Payment-to-cost ratio
PDC Per day cost
PDE Prescription Drug Event
PE Practice expense
PEPPER Program Evaluation Payment
Patterns Electronic Report
PHP Partial hospitalization program
PHSA Public Health Service Act, Public
Law 96–88
PN Pneumonia
POS Place of service
PPI Producer Price Index
PPS Prospective payment system
PQRI Physician Quality Reporting Initiative
PQRS Physician Quality Reporting System
QDC Quality data code
QIO Quality Improvement Organization
RFA Regulatory Flexibility Act
RHQDAPU Reporting Hospital Quality Data
for Annual Payment Update
RTI Research Triangle Institute,
International
RVU Relative value unit
SAD Self-administered drug
SAMS Secure Access Management Services
PO 00000
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SCH Sole community hospital
SCOD Specified covered outpatient drugs
SES Socioeconomic status
SI Status indicator
SIA Systems Improvement Agreement
SIR Standardized infection ratio
SNF Skilled nursing facility
SRS Stereotactic radiosurgery
SRTR Scientific Registry of Transplant
Recipients
SSA Social Security Administration
SSI Surgical site infection
TEP Technical Expert Panel
TOPs Transitional Outpatient Payments
USPSTF United States Preventive Services
Task Force
VBP Value-based purchasing
WAC Wholesale acquisition cost
Table of Contents
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
2. Summary of the Major Provisions
3. Summary of Costs and Benefits
B. Legislative and Regulatory Authority for
the Hospital OPPS
C. Excluded OPPS Services and Hospitals
D. Prior Rulemaking
E. Advisory Panel on Hospital Outpatient
Payment (the HOP Panel or the Panel)
1. Authority of the Panel
2. Establishment of the Panel
3. Panel Meetings and Organizational
Structure
F. Public Comments Received in Response
to CY 2017 OPPS/ASC Final Rule With
Comment Period
II. Proposed Updates Affecting OPPS
Payments
A. Proposed Recalibration of APC Relative
Payment Weights
1. Database Construction
a. Database Source and Methodology
b. Proposed Calculation and Use of Costto-Charge Ratios (CCRs)
2. Proposed Data Development Process and
Calculation of Costs Used for Ratesetting
a. Proposed Calculation of Single
Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
(2) Brachytherapy Sources
b. Proposed Comprehensive APCs (C–
APCs) for CY 2018
(1) Background
(2) Proposed Additional C–APCs for CY
2018
(3) Brachytherapy Insertion Procedures
(4) C–APC 5627 (Level 7 Radiation
Stereotactic Radiosurgery (SRS))
(5) Proposed Complexity Adjustment for
Blue Light Cystoscopy Procedures
(6) Analysis of C–APC Packaging under the
OPPS
c. Proposed Calculation of Composite APC
Criteria-Based Costs
(1) Mental Health Services Composite APC
(2) Multiple Imaging Composite APCs
(APCs 8004, 8005, 8006, 8007, and 8008)
3. Proposed Changes to Packaged Items and
Services
a. Background and Rationale for Packaging
in the OPPS
b. CY 2018 Drug Administration Packaging
Proposal
(1) Background of Drug Administration
Packaging Policy
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(2) Proposed Packaging of Level 1 and
Level 2 Drug Administration Services
(3) Comment Solicitation Regarding
Unconditionally Packaging Drug
Administration Add-On Codes
c. Analysis of Packaging Services in the
OPPS
d. Comment Solicitation on Packaging of
Items and Services Under the OPPS
4. Proposed Calculation of OPPS Scaled
Payment Weights
B. Proposed Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default
CCRs
E. Proposed Adjustment for Rural Sole
Community Hospitals (SCHs) and
Essential Access Community Hospitals
(EACHs) Under Section 1833(t)(13)(B) of
the Act
F. Proposed Payment Adjustment for
Certain Cancer Hospitals for CY 2018
1. Background
2. Proposed Policy for CY 2018
G. Proposed Hospital Outpatient Outlier
Payments
1. Background
2. Proposed Outlier Calculation for CY
2018
H. Proposed Calculation of an Adjusted
Medicare Payment From the National
Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
1. Background
2. Proposed OPPS Copayment Policy
3. Proposed Calculation of an Adjusted
Copayment Amount for an APC Group
III. Proposed OPPS Ambulatory Payment
Classification (APC) Group Policies
A. Proposed OPPS Treatment of New CPT
and Level II HCPCS Codes
1. Proposed Treatment of New HCPCS
Codes That Were Effective April 1, 2017
for Which We Are Soliciting Public
Comments in This CY 2018 OPPS/ASC
Proposed Rule
2. Proposed Treatment of New HCPCS
Codes Effective July 1, 2017 for Which
We Are Soliciting Public Comments in
This CY 2018 OPPS/ASC Proposed Rule
3. Proposed Process for New Level II
HCPCS Codes That Will Be Effective
October 1, 2017 and January 1, 2018 for
Which We Will Be Soliciting Public
Comments in the CY 2018 OPPS/ASC
Final Rule With Comment Period
4. Proposed Treatment of New and Revised
CY 2018 Category I and III CPT Codes
That Will Be Effective January 1, 2018
for Which We Are Soliciting Public
Comments in This CY 2018 OPPS/ASC
Proposed Rule
5. Proposed Care Management Coding
Changes Effective January 1, 2018 (APCs
5821 and 5822)
B. Proposed OPPS Changes—Variations
Within APCs
1. Background
2. Application of the 2 Times Rule
3. Proposed APC Exceptions to the 2 Times
Rule
C. Proposed New Technology APCs
1. Background
2. Proposed Revised and Additional New
Technology APC Groups
3. Proposed Procedures Assigned to New
Technology APC Groups for CY 2018
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a. Overall Proposal
b. Magnetic Resonance-Guided Focused
Ultrasound Surgery (MRgFUS) (APCs
1537, 5114, and 5415)
c. Retinal Prosthesis Implant Procedure
d. Pathogen Test for Platelets
D. Proposed OPPS APC-Specific Policies
1. Blood-Driven Hematopoietic Cell
Harvesting
2. Radiology and Imaging Procedures and
Services
a. Imaging APCs
b. Non-Ophthalmic Fluorescent Vascular
Angiography (APC 5524)
3. Comment Solicitation on Intraocular
Procedure APCs
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payments for
Devices
1. Beginning Eligibility Date for Device
Pass-Through Status and Quarterly
Expiration of Device Pass-Through
Payments
a. Background
b. Expiration of Transitional Pass-Through
Payment for Certain Devices
2. New Device Pass-Through Applications
a. Background
b. Applications Received for Device PassThrough Payment for CY 2018
B. Proposed Device-Intensive Procedures
1. Background
2. HCPCS Code-Level Device-Intensive
Determination
3. Changes to the Device Edit Policy for CY
2017 and Subsequent Years
4. Proposed Adjustment to OPPS Payment
for No Cost/Full Credit and Partial Credit
Devices
a. Background
b. Policy for CY 2017 and Subsequent
Years
5. Proposed Payment Policy for LowVolume Device-Intensive Procedures
V. Proposed OPPS Payment Changes for
Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional PassThrough Payment for Additional Costs of
Drugs, Biologicals, and
Radiopharmaceuticals
1. Background
2. 3-Year Transitional Pass-Through
Payment Period for All Pass-Through
Drugs, Biologicals, and
Radiopharmaceuticals and Expiration of
Pass-Through Status
3. Proposed Drugs and Biologicals With
Expiring Pass-Through Payment Status
in CY 2017
4. Proposed Drugs, Biologicals, and
Radiopharmaceuticals With New or
Continuing Pass-Through Status in CY
2018
5. Proposed Provisions for Reducing
Transitional Pass-Through Payments for
Policy-Packaged Drugs, Biologicals, and
Radiopharmaceuticals to Offset Costs
Packaged Into APC Groups
B. Proposed OPPS Payment for Drugs,
Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
1. Proposed Criteria for Packaging Payment
for Drugs, Biologicals, and
Radiopharmaceuticals
a. Proposed Packaging Threshold
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b. Proposed Packaging of Payment for
HCPCS Codes That Describe Certain
Drugs, Certain Biologicals, and
Therapeutic Radiopharmaceuticals
Under the Cost Threshold (‘‘ThresholdPackaged Policy’’)
c. Policy Packaged Drugs, Biologicals, and
Radiopharmaceuticals
d. Proposed High Cost/Low Cost Threshold
for Packaged Skin Substitutes
e. Proposed Packaging Determination for
HCPCS Codes That Describe the Same
Drug or Biological But Different Dosages
2. Proposed Payment for Drugs and
Biologicals Without Pass-Through Status
That Are Not Packaged
a. Payment for Specified Covered
Outpatient Drugs (SCODs) and Other
Separately Payable and Packaged Drugs
and Biologicals
b. Proposed CY 2018 Payment Policy
c. Biosimilar Biological Products
3. Proposed Payment Policy for
Therapeutic Radiopharmaceuticals
4. Proposed Payment Adjustment Policy
for Radioisotopes Derived From NonHighly Enriched Uranium Sources
5. Proposed Payment for Blood Clotting
Factors
6. Proposed Payment for Nonpass-Through
Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS
Codes But Without OPPS Hospital
Claims Data
7. Alternative Payment Methodology for
Drugs Purchased Under the 340B Drug
Discount Program
VI. Proposed Estimate of OPPS Transitional
Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and
Devices
A. Background
B. Estimate of Pass-Through Spending
VII. Proposed OPPS Payment for Hospital
Outpatient Visits and Critical Care
Services
VIII. Proposed Payment for Partial
Hospitalization Services
A. Background
B. Proposed PHP APC Update for CY 2018
1. Proposed PHP APC Geometric Mean Per
Diem Costs
2. Development of the Proposed PHP APC
Geometric Mean Per Diem Costs
a. CMHC Data Preparation: Data Trims,
Exclusions, and CCR Adjustments
b. Hospital-Based PHP Data Preparation:
Data Trims and Exclusions
3. PHP Service Utilization Updates
4. Minimum Service Requirement: 20
Hours Per Week
C. Proposed Outlier Policy for CMHCs
IX. Proposed Procedures That Would Be Paid
Only as Inpatient Procedures
A. Background
B. Proposed Changes to the Inpatient Only
(IPO) List
C. Solicitation of Public Comments on the
Possible Removal of Partial Hip
Arthroplasty (PHA) and Total Hip
Arthroplasty (THA) Procedures From the
IPO List
1. Background
2. Topics and Questions for Public
Comments
X. Proposed Nonrecurring Policy Changes
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A. Payment for Certain Items and Services
Furnished by Certain Off-Campus
Departments of a Provider
1. Background
2. Summary of Public Comments and Our
Responses Regarding Expansion of
Services by Excepted Off-Campus
Hospital Outpatient Departments
3. Implementation of Section 16002 of the
21st Century Cures Act (Treatment of
Cancer Hospitals in Off Campus
Outpatient Department of a Provider
Policy)
B. Medicare Site-of-Service Price
Transparency (Section 4011 of the 21st
Century Cures Act)
C. Appropriate Use Criteria for Advanced
Diagnostic Imaging Services
D. Enforcement Instruction for the
Supervision of Outpatient Therapeutic
Services in Critical Access Hospitals
(CAHs) and Certain Small Rural
Hospitals
E. Payment Changes for Film X-Rays
Services and Proposed Payment Changes
for X-Rays Taken Using Computed
Radiography Technology
F. Potential Revisions to the Laboratory
Date of Service Policy
1. Background on the Medicare Part B
Laboratory Date of Service Policy
2. Current Medicare DOS Policy (‘‘14-Day
Rule’’)
3. Billing and Payment for Laboratory
Services Under the OPPS
4. ADLTs Under the New Private Payor
Rate-Based CLFS
5. Potential Revisions to the Laboratory
DOS Policy
XI. Proposed CY 2018 OPPS Payment Status
and Comment Indicators
A. Proposed CY 2018 OPPS Payment
Status Indicator Definitions
B. Proposed CY 2018 Comment Indicator
Definitions
XII. Proposed Updates to the Ambulatory
Surgical Center (ASC) Payment System
A. Background
1. Legislative History, Statutory Authority,
and Prior Rulemaking for the ASC
Payment System
2. Policies Governing Changes to the Lists
of Codes and Payment Rates for ASC
Covered Surgical Procedures and
Covered Ancillary Services
3. Definition of ASC Covered Surgical
Procedures
B. Proposed Treatment of New and Revised
Codes
1. Background on Current Process for
Recognizing New and Revised Category
I and Category III CPT Codes and Level
II HCPCS Codes
2. Proposed Treatment of New and Revised
Level II HCPCS Codes Implemented in
April 2017 for Which We Are Soliciting
Public Comments in This Proposed Rule
3. Proposed Treatment of New and Revised
Level II HCPCS Codes Implemented in
July 2017 for Which We Are Soliciting
Public Comments in This Proposed Rule
4. Process for New and Revised Level II
HCPCS Codes That Will Be Effective
October 1, 2017 and January 1, 2018 for
Which We Will Solicit Public Comments
in the CY 2018 OPPS/ASC Final Rule
With Comment Period
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5. Process for Recognizing New and
Revised Category I and Category III CPT
Codes That Will Be Effective January 1,
2018 for Which We Will Be Soliciting
Public Comments in the CY 2018 OPPS/
ASC Final Rule With Comment Period
C. Proposed Update to the List of ASC
Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated
as Office-Based
(1) Background
(2) Proposed Changes for CY 2018 to
Covered Surgical Procedures Designated
as Office-Based
b. Proposed ASC Covered Surgical
Procedures Designated as DeviceIntensive
(1) Background
(2) Proposed Changes to List of ASC
Covered Surgical Procedures Designated
as Device-Intensive for CY 2018
c. Proposed Adjustment to ASC Payments
for No Cost/Full Credit and Partial Credit
Devices
d. Proposed Additions to the List of ASC
Covered Surgical Procedures
e. Comment Solicitation on Adding
Additional Procedures to the ASC
Covered Procedures List
2. Covered Ancillary Services
D. Proposed ASC Payment for Covered
Surgical Procedures and Covered
Ancillary Services
1. Proposed ASC Payment for Covered
Surgical Procedures
a. Background
b. Proposed Update to ASC Covered
Surgical Procedure Payment Rates for CY
2018
2. Proposed Payment for Covered Ancillary
Services
a. Background
b. Proposed Payment for Covered Ancillary
Services for CY 2018
E. New Technology Intraocular Lenses
(NTIOLs)
1. NTIOL Application Cycle
2. Requests to Establish New NTIOL
Classes for CY 2018
3. Payment Adjustment
F. Proposed ASC Payment and Comment
Indicators
1. Background
2. Proposed ASC Payment and Comment
Indicators
G. Proposed Calculation of the ASC
Conversion Factor and the Proposed ASC
Payment Rates
1. Background
2. Proposed Calculation of the ASC
Payment Rates
a. Updating the ASC Relative Payment
Weights for CY 2018 and Future Years
b. Updating the ASC Conversion Factor
3. Comment Solicitation on ASC Payment
System Reform
4. Display of CY 2018 ASC Payment Rates
XIII. Requirements for the Hospital
Outpatient Quality Reporting (OQR)
Program
A. Background
1. Overview
2. Statutory History of the Hospital OQR
Program
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B. Hospital OQR Program Quality
Measures
1. Considerations in the Selection of
Hospital OQR Program Quality Measures
2. Accounting for Social Risk Factors in the
Hospital OQR Program
3. Retention of Hospital OQR Program
Measures Adopted in Previous Payment
Determinations
4. Removal of Quality Measures From the
Hospital OQR Program Measure Set
a. Considerations in Removing Quality
Measures From the Hospital OQR
Program
b. Criteria for Removal of ‘‘Topped-Out’’
Measures
c. Measures Proposed for Removal From
the Hospital OQR Program
5. Proposal To Make Reporting of
OP–37a–e: Outpatient and Ambulatory
Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS
CAHPS) Survey-Based Measures
Voluntary for CY 2018 Reporting and
Subsequent Years
6. Previously Adopted Hospital OQR
Program Measure Set for the CY 2020
Payment Determination and Subsequent
Years
7. Summary of the Hospital OQR Program
Measure Set Proposed for the CY 2020
and CY 2021 Payment Determination
and Subsequent Years
8. Hospital OQR Program Measures and
Topics for Future Consideration
a. Future Measure Topics
b. Possible Future Adoption of the
Electronic Version of OP–2: Fibrinolytic
Therapy Received Within 30 Minutes of
Emergency Department Arrival
9. Maintenance of Technical Specifications
for Quality Measures
10. Public Display of Quality Measures
a. Background
b. Public Reporting of OP–18c: Median
Time From Emergency Department
Arrival to Emergency Department
Departure for Discharged Emergency
Department Patients—Psychiatric/
Mental Health Patients
C. Administrative Requirements
1. QualityNet Account and Security
Administrator
2. Requirements Regarding Participation
Status
a. Background
b. Proposed Changes to the NOP
Submission Deadline
D. Form, Manner, and Timing of Data
Submitted for the Hospital OQR Program
1. Hospital OQR Program Annual Payment
Determinations
2. Requirements for Chart-Abstracted
Measures Where Patient-Level Data Are
Submitted Directly to CMS for the CY
2021 Payment Determination and
Subsequent Years
3. Claims-Based Measure Data
Requirements for the CY 2020 Payment
Determination and Subsequent Years
4. Data Submission Requirements for OP–
37a–e: Outpatient and Ambulatory
Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS
CAHPS) Survey-Based Measures for the
CY 2020 Payment Determination and
Subsequent Years
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5. Data Submission Requirements for
Previously Finalized Measures for Data
Submitted via a Web-based Tool for the
CY 2020 Payment Determination and
Subsequent Years
6. Population and Sampling Data
Requirements for the CY 2020 Payment
Determination and Subsequent Years
7. Hospital OQR Program Validation
Requirements for Chart-Abstracted
Measure Data Submitted Directly to CMS
for the CY 2020 Payment Determination
and Subsequent Years
a. Clarification
b. Proposed Codification
c. Proposed Modifications to the
Educational Review Process for ChartAbstracted Measures Validation
8. Extraordinary Circumstances Exception
Process for the CY 2020 Payment
Determination and Subsequent Years
a. ECE Policy Nomenclature
b. Timeline for CMS Response to ECE
Requests
9. Hospital OQR Program Reconsideration
and Appeals Procedures for the CY 2020
Payment Determination and Subsequent
Years—Clarification
E. Payment Reduction for Hospitals That
Fail To Meet the Hospital Outpatient
Quality Reporting (OQR) Program
Requirements for the CY 2017 Payment
Determination
1. Background
2. Reporting Ratio Application and
Associated Adjustment Policy for CY
2017
XIV. Requirements for the Ambulatory
Surgical Center Quality Reporting
(ASCQR) Program
A. Background
1. Overview
2. Statutory History of the ASCQR Program
3. Regulatory History of the ASCQR
Program
B. ASCQR Program Quality Measures
1. Considerations in the Selection of
ASCQR Program Quality Measures
2. Accounting for Social Risk Factors in the
ASCQR Program
3. Policies for Retention and Removal of
Quality Measures From the ASCQR
Program
a. Retention of Previously Adopted ASCQR
Program Measures
b. Proposed Measure Removal
4. Proposal To Delay ASC–15a–e:
Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS)
Survey-Based Measures Beginning With
the 2020 Payment Determination
5. ASCQR Program Quality Measures
Adopted in Previous Rulemaking
6. Proposed ASCQR Program Quality
Measures for the CY 2021 and CY 2022
Payment Determinations and Subsequent
Years
a. Proposed Adoption of ASC–16: Toxic
Anterior Segment Syndrome Beginning
With the CY 2021 Payment
Determination
b. Proposed Adoption of ASC–17: Hospital
Visits After Orthopedic Ambulatory
Surgical Center Procedures Beginning
With the CY 2022 Payment
Determination
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c. Proposed Adoption of ASC–18: Hospital
Visits After Urology Ambulatory Surgical
Center Procedures Beginning With the
CY 2022 Payment Determination
d. Summary of Previously Adopted
Measurers and Newly Proposed ASCQR
Program Measures for the CY 2022
Payment Determination and Subsequent
Years
7. ASCQR Program Measures and Topics
for Future Consideration
8. Maintenance of Technical Specifications
for Quality Measures
9. Public Reporting of ASCQR Program
Data
C. Administrative Requirements
1. Requirements Regarding QualityNet
Account and Security Administrator
2. Requirements Regarding Participation
Status
D. Form, Manner, and Timing of Data
Submitted for the ASCQR Program
1. Requirements Regarding Data Processing
and Collection Periods for Claims-Based
Measures Using Quality Data Codes
(QDCs)
2. Minimum Threshold, Minimum Case
Volume, and Data Completeness for
Claims-Based Measures Using QDCs
3. Requirements for Data Submitted via an
Online Data Submission Tool
a. Requirements for Data Submitted via a
Non-CMS Online Data Submission Tool
b. Proposals Regarding Requirements for
Data Submitted via a CMS Online Data
Submission Tool
4. Requirements for Claims-Based Measure
Data
5. Requirements for Data Submission for
ASC–15a–e: Outpatient and Ambulatory
Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS
CAHPS) Survey-Based Measures
6. Extraordinary Circumstances Extensions
or Exemptions for the CY 2019 Payment
Determination and Subsequent Years
a. Background
b. ECE Policy Nomenclature
c. Timeline for CMS Response to ECE
Requests
7. ASCQR Program Reconsideration
Procedures
E. Payment Reduction for ASCs That Fail
To Meet the ASCQR Program
Requirements
1. Statutory Background
2. Reduction to the ASC Payment Rates for
ASCs That Fail To Meet the ASCQR
Program Requirements for a Payment
Determination Year
XV. Request for Information and Public
Comments
A. Request for Information on CMS
Flexibilities and Efficiencies
B. Eliminating Inappropriate Medicare
Payment Differentials for Similar
Services in the Inpatient and Outpatient
Settings
C. Request for Information Regarding
Physician-Owned Hospitals
XVI. Files Available to the Public via the
Internet
XVII. Collection of Information Requirements
A. Statutory Requirement for Solicitation
of Comments
B. ICRs for the Hospital OQR Program
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C. ICRs for the ASCQR Program
XVIII. Response to Comments
XIX. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
2. Statement of Need
3. Overall Impacts for the Proposed OPPS
and ASC Payment Provisions
4. Regulatory Review Costs
5. Detailed Economic Analyses
a. Estimated Effects of Proposed OPPS
Changes in This Proposed Rule
(1) Limitations of Our Analysis
(2) Estimated Effects of Proposed OPPS
Changes to Part B Drug Payment on 340B
Eligible Hospitals Paid Under the OPPS
(3) Estimated Effects of Proposed OPPS
Changes on Hospitals
(4) Estimated Effects of Proposed OPPS
Changes on CMHCs
(5) Estimated Effects of Proposed OPPS
Changes on Beneficiaries
(6) Estimated Effects of Proposed OPPS
Changes on Other Providers
(7) Estimated Effects of Proposed OPPS
Changes on the Medicare and Medicaid
Programs
(8) Alternative OPPS Policies Considered
b. Estimated Effects of Proposed CY 2018
ASC Payment System Policies
(1) Limitations of Our Analysis
(2) Estimated Effects of Proposed CY 2018
ASC Payment System Policies on ASCs
(3) Estimated Effects of Proposed ASC
Payment System Policies on
Beneficiaries
(4) Alternative ASC Payment Policies
Considered
c. Accounting Statements and Tables
d. Effects of Proposed Requirements for the
Hospital OQR Program
e. Effects of Proposed Requirements for the
ASCQR Program
B. Regulatory Flexibility Act (RFA)
Analysis
C. Unfunded Mandates Reform Act
Analysis
D. Reducing Regulation and Controlling
Regulatory Costs
E. Conclusion
XX. Federalism Analysis
Regulation Text
I. Summary and Background
A. Executive Summary of This
Document
1. Purpose
In this proposed rule, we are
proposing to update the payment
policies and payment rates for services
furnished to Medicare beneficiaries in
hospital outpatient departments
(HOPDs) and ambulatory surgical
centers (ASCs) beginning January 1,
2018. Section 1833(t) of the Social
Security Act (the Act) requires us to
annually review and update the
payment rates for services payable
under the Hospital Outpatient
Prospective Payment System (OPPS).
Specifically, section 1833(t)(9)(A) of the
Act requires the Secretary to review
certain components of the OPPS not less
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often than annually, and to revise the
groups, relative payment weights, and
other adjustments that take into account
changes in medical practices, changes in
technologies, and the addition of new
services, new cost data, and other
relevant information and factors. In
addition, under section 1833(i) of the
Act, we annually review and update the
ASC payment rates. We describe these
and various other statutory authorities
in the relevant sections of this proposed
rule. In addition, this proposed rule
would update and refine the
requirements for the Hospital
Outpatient Quality Reporting (OQR)
Program and the ASC Quality Reporting
(ASCQR) Program.
2. Summary of the Major Provisions
• OPPS Update: For CY 2018, we are
proposing to increase the payment rates
under the OPPS by an Outpatient
Department (OPD) fee schedule increase
factor of 1.75 percent. This proposed
increase factor is based on the proposed
hospital inpatient market basket
percentage increase of 2.9 percent for
inpatient services paid under the
hospital inpatient prospective payment
system (IPPS), minus the proposed
multifactor productivity (MFP)
adjustment of 0.4 percentage point, and
minus a 0.75 percentage point
adjustment required by the Affordable
Care Act. Based on this proposed
update, we estimate that proposed total
payments to OPPS providers (including
beneficiary cost-sharing and estimated
changes in enrollment, utilization, and
case-mix), for CY 2018 would be
approximately $70 billion, an increase
of approximately $5.7 billion compared
to estimated CY 2017 OPPS payments.
We are proposing to continue to
implement the statutory 2.0 percentage
point reduction in payments for
hospitals failing to meet the hospital
outpatient quality reporting
requirements, by applying a proposed
reporting factor of 0.980 to the OPPS
payments and copayments for all
applicable services.
• Proposed High Cost/Low Cost
Threshold for Packaged Skin
Substitutes: As we did for CY 2017, we
are proposing to assign skin substitutes
with a geometric mean unit cost (MUC)
or a per day cost (PDC) that exceeds
either the MUC threshold or the PDC
threshold to the high cost group. In
addition, for CY 2018, we are proposing
that a skin substitute product that does
not exceed either the CY 2018 MUC or
PDC threshold for CY 2018, but was
assigned to the high cost group for CY
2017, will be assigned to the high cost
group for CY 2018. The goal of our
proposal is to maintain similar levels of
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payment for skin substitute products for
CY 2018 while we study our current
skin substitute payment methodology to
determine whether refinements to our
existing methodologies may be
warranted.
• Supervision of Hospital Outpatient
Therapeutic Services: In the CY 2009
and CY 2010 OPPS/ASC proposed rule
and final rule with comment period, we
clarified that direct supervision is
required for hospital outpatient
therapeutic services covered and paid
by Medicare that are furnished in
hospitals, CAHs, and in provider-based
departments (PBDs) of hospitals, as set
forth in the CY 2000 OPPS final rule
with comment period. For several years,
there has been a moratorium on the
enforcement of the direct supervision
requirement for CAHs and small rural
hospitals, with the latest moratorium on
enforcement expiring on December 31,
2016. In this proposed rule, we are
proposing to reinstate the
nonenforcement of direct supervision
enforcement instruction for outpatient
therapeutic services for CAHs and small
rural hospitals having 100 or fewer beds
for CY 2018 and CY 2019.
• 340B Drug Pricing: We are
proposing changes to our current
Medicare Part B drug payment
methodology for 340B hospitals that we
believe would better, and more
appropriately, reflect the resources and
acquisition costs that these hospitals
incur. Such changes would allow the
Medicare program and Medicare
beneficiaries to share in some of the
savings realized by hospitals
participating in the 340B program. For
CY 2018, we are proposing to exercise
the Secretary’s authority to adjust the
applicable payment rate as necessary for
separately payable drugs and biologicals
(other than drugs on pass-through and
vaccines) acquired under the 340B
program from average sales price (ASP)
plus 6 percent to ASP minus 22.5
percent. In addition, in this proposed
rule, we state our intent to establish a
modifier to identify whether a drug
billed under the OPPS was purchased
under the 340B Drug Discount Program.
• Device Pass-Through Applications:
For CY 2018, we evaluate five devices
for eligibility to receive pass through
payments and are seeking comments on
whether each of these items meet the
criteria for device pass-through status.
• Rural Adjustment: We are
proposing to continue the adjustment of
7.1 percent to the OPPS payments to
certain rural sole community hospitals
(SCHs), including essential access
community hospitals (EACHs). This
proposed adjustment would apply to all
services paid under the OPPS,
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excluding separately payable drugs and
biologicals, devices paid under the passthrough payment policy, and items paid
at charges reduced to cost.
• Cancer Hospital Payment
Adjustment: For CY 2018, we are
proposing to continue to provide
additional payments to cancer hospitals
so that the cancer hospital’s payment-tocost ratio (PCR) after the additional
payments is equal to the weighted
average PCR for the other OPPS
hospitals using the most recently
submitted or settled cost report data.
However, beginning CY 2018, section
16002(b) of the 21st Century Cures Act
requires this weighted average PCR be
reduced by 1.0 percentage point. Based
on the data and the required 1.0
percentage point reduction, a proposed
target PCR of 0.89 would be used to
determine the CY 2018 cancer hospital
payment adjustment to be paid at cost
report settlement. That is, the proposed
payment adjustments would be the
additional payments needed to result in
a PCR equal to 0.89 for each cancer
hospital.
• Changes to the Inpatient Only List:
In CY 2017 OPPS/ASC rulemaking, we
solicited comment from the public on
whether total knee arthroplasty should
be removed from the inpatient only list.
Several commenters to the CY 2017
OPPS/ASC proposed rule were
supportive of the removal. In addition,
the Advisory Panel on Hospital
Outpatient Payment recommended at its
Summer 2016 meeting that this
procedure be removed from the
inpatient only list. After evaluating the
procedure, for CY 2018, we are
proposing to remove total knee
arthroplasty from the inpatient-only list.
In addition, we are soliciting comment
on whether partial and total hip should
also be removed from the inpatient only
list and added to the ASC Covered
Surgical Procedures List.
• Comprehensive APCs: For CY 2018,
we are not proposing to create any new
C–APCs or any extensive changes to the
already established methodology used
for C–APCs. There will be a total
number of 62 C–APCs as of January 1,
2018. We note that for CY 2018, for the
C–APC for Stereotactic Radio Surgery
(SRS), specifically, C–APC 5627 (Level
7 Radiation Therapy), we are proposing
to continue to make separate payments
for the 10 planning and preparation
services adjunctive to the delivery of the
SRS treatment using either the Cobalt60-based or LINAC-based technology
when furnished to a beneficiary within
30 days of the SRS treatment. In
addition, the data collection period for
SRS claims with modifier ‘‘CP’’ is set to
conclude on December 31, 2017.
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Accordingly, for CY 2018, we are
deleting this modifier and discontinuing
its required use.
• Packaging Policies: In CY 2015, we
implemented a policy to conditionally
package ancillary services assigned to
APCs with a geometric mean cost of
$100 or less prior to packaging, with
some exceptions, including drug
administration services. For CY 2018,
we are proposing to remove the
exception for certain drug
administration services and
conditionally package payment for lowcost drug administration services. We
are not proposing to package drug
administration add-on codes for CY
2018, but are soliciting comments on
this policy. In addition, we are broadly
soliciting comments on existing
packaging policies that exist under the
OPPS, including those related to drugs
that function as a supply in a diagnostic
test or procedure or in a surgical
procedure.
• Payment Changes for X-rays Taken
Using Computed Radiography
Technology: Section 502(b) of Division
O, Title V of the Consolidated
Appropriations Act, 2016 (Pub. L. 114–
113) amended section 1833(t)(16) of the
Act by adding new subparagraph (F).
New section 1833(t)(16)(F)(ii) of the Act
provides for a phased-in reduction of
payments for imaging services that are
taken using computed radiography
technology. That section provides that
payments for such services furnished
during CYs 2018 through 2022 shall be
reduced by 7 percent, and if such
services are furnished during CY 2023
or a subsequent year, payments for such
services shall be reduced by 10 percent.
We are establishing a new modifier that
would be reported on claims to identify
those HCPCS codes that describe X-rays
taken using computed radiography
technology. Specifically, this modifier,
as allowed under the provisions of new
section 1833(t)(16)(F)(ii) of the Act,
would be reported with the applicable
HCPCS code to describe imaging
services that are taken using computed
radiography technology/cassette-based
imaging beginning January 1, 2018.
• ASC Payment Update: For CY 2018,
we are proposing to increase payment
rates under the ASC payment system by
1.9 percent for ASCs that meet the
quality reporting requirements under
the ASCQR Program. This proposed
increase is based on a projected CPI–U
update of 2.3 percent minus a
multifactor productivity adjustment
required by the Affordable Care Act of
0.4 percentage point. Based on this
proposed update, we estimate that
proposed total payments to ASCs
(including beneficiary cost sharing and
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estimated changes in enrollment,
utilization, and case-mix), for CY 2018
would be approximately $4.68 billion,
an increase of approximately $155
million compared to estimated CY 2017
Medicare payments. In addition, we are
soliciting comment on payment reform
for ASCs, including the collection of
cost data which may support a rate
update other than CPI–U.
• Comment Solicitation on ASC
Payment Reform: We are broadly
interested in feedback from stakeholders
and other interested parties on potential
reforms to the current payment system,
including, but not limited to (1) the rate
update factor applied to ASC payments,
(2) whether and how ASCs should
submit data relating to costs, (3)
whether ASCs should bill on the
institutional claim form rather than the
professional claim form, and (4) other
ideas to improve payment accuracy for
ASCs.
• Changes to the List of ASC Covered
Surgical Procedures: For CY 2018, we
are proposing to add three procedures to
the ASC Covered Procedures List. In
addition, we are soliciting comment on
whether total knee arthroplasty, partial
hip arthroplasty and total hip
arthroplasty meet the criteria to be
added to the ASC–CPL. We also are
soliciting comments from stakeholders
on whether there are codes that are
outside the AMA–CPT surgical code
range that nonetheless, should be
considered to be a covered surgical
procedure.
• Potential Revisions to the
Laboratory Date of Service Policy: To
better understand the potential impact
of the current date of service (DOS)
policy on billing for molecular
pathology tests and advance diagnostic
laboratory tests (ADLTs) under the new
private payor rate-based Clinical
Laboratory Fee Schedule (CLFS), we are
soliciting public comments on billing
for molecular pathology tests and
ADLTs ordered less than 14 days of a
hospital outpatient discharge.
• Hospital Outpatient Quality
Reporting (OQR) Program: For the
Hospital OQR Program, we are
proposing to remove and delay certain
measures for the CY 2020 payment
determination and the CY 2021 payment
determination and subsequent years.
For the CY 2020 payment determination
and subsequent years, we are proposing
to remove OP–21: Median Time to Pain
Management for Long Bone Fracture
and OP–26: Hospital Outpatient Volume
Data on Selected Outpatient Surgical
Procedures. We are also proposing to
delay the OAS CAHPS Survey measures
(OP–37–a–e) beginning with the CY
2020 payment determination (CY 2018
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reporting). In addition, for the CY 2020
payment determination and subsequent
years we are: (1) Providing clarification
on our procedures for validation of
chart-abstracted measures to note that
the 50 poorest performing outlier
hospitals will be targeted for validation;
(2) proposing to formalize the validation
educational review process, update it to
allow corrections of incorrect validation
results for chart-abstracted measures,
and modify the CFR accordingly; (3)
proposing to change the Notice of
Participation (NOP) deadline and make
corresponding changes to the CFR; (4)
proposing to align the first quarter for
which to submit data for hospitals that
did not participate in the previous
year’s Hospital OQR Program and make
corresponding changes to the CFR; (5)
proposing to publicly report OP–18c:
Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department Patients—
Psychiatric/Mental Health Patients; and
(6) proposing to align the naming of the
Extraordinary Circumstances Exceptions
(ECE) policy with that used in our other
quality reporting and value-based
payment programs and make
corresponding changes to the CFR. For
the CY 2021 payment determination and
subsequent years, we are proposing to
remove: (1) OP–1: Median Time to
Fibrinolysis; (2) OP–4: Aspirin at
Arrival; (3) OP–20: Door to Diagnostic
Evaluation by a Qualified Medical
Professional; and, (4) OP–25: Safe
Surgery Checklist Use.
• Ambulatory Surgical Center Quality
Reporting (ASCQR) Program: For the
ASCQR Program, we are proposing to
adopt measures and policies for the CY
2019 payment determination, 2021
payment determination, and CY 2022
payment determination and subsequent
years. Specifically, we are proposing,
beginning with the CY 2019 payment
determination, to remove three
measures from the ASCQR Program
measure set: (1) ASC–5: Prophylactic
Intravenous (IV) Antibiotic Timing; (2)
ASC–6: Safe Surgery Checklist Use; and,
(3) ASC–7: Ambulatory Surgical Center
Facility Volume Data on Selected
Ambulatory Surgical Center Surgical
Procedures. In addition, we are also
proposing to delay the OAS CAHPS
Survey measures (ASC–15a–e)
beginning with the CY 2020 payment
determination (CY 2018 data collection).
Furthermore, starting with CY 2018 and
beyond, we are proposing to: (1) Expand
the CMS online tool to also allow for
batch submission of measure data and
make corresponding changes to the CFR;
and (2) align the naming of the
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Extraordinary Circumstances Exceptions
(ECE) policy with that used in our other
quality reporting and value-based
payment programs and make
corresponding changes to the CFR. We
are also proposing, beginning with the
CY 2021 payment determination, to
adopt one new measure, ASC–16: Toxic
Anterior Segment Syndrome. In
addition, we are proposing, beginning
with the CY 2022 payment
determination, to adopt two new
measures collected via claims, ASC–17:
Hospital Visits after Orthopedic
Ambulatory Surgical Center Procedures
and ASC–18: Hospital Visits after
Urology Ambulatory Surgical Center
Procedures.
3. Summary of Costs and Benefits
In sections XIX. and XX. of this
proposed rule, we set forth a detailed
analysis of the regulatory and
Federalism impacts that the proposed
changes would have on affected entities
and beneficiaries. Key estimated
impacts are described below.
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a. Impacts of the Proposed OPPS Update
(1) Impacts of All OPPS Proposed
Changes
Table 38 in section XIX. of this
proposed rule displays the
distributional impact of all the proposed
OPPS changes on various groups of
hospitals and CMHCs for CY 2018
compared to all estimated OPPS
payments in CY 2017. We estimate that
the proposed policies in this proposed
rule would result in a 1.9 percent
overall increase in OPPS payments to
providers. We estimate that proposed
total OPPS payments for CY 2018,
including beneficiary cost-sharing, to
the approximate 3,900 facilities paid
under the OPPS (including general
acute care hospitals, children’s
hospitals, cancer hospitals, and CMHCs)
would increase by approximately $897
million compared to CY 2017 payments,
excluding our estimated changes in
enrollment, utilization, and case-mix.
We estimated the isolated impact of
our proposed OPPS policies on CMHCs
because CMHCs are only paid for partial
hospitalization services under the
OPPS. Continuing the provider-specific
structure that we adopted beginning in
CY 2011 and basing payment fully on
the type of provider furnishing the
service, we estimate a 2.1 percent
increase in CY 2018 payments to
CMHCs relative to their CY 2017
payments.
(2) Impacts of the Proposed Updated
Wage Indexes
We estimate that our proposed update
of the wage indexes based on the FY
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2018 IPPS proposed rule wage indexes
results in no change for urban and rural
hospitals under the OPPS. These wage
indexes include the continued
implementation of the OMB labor
market area delineations based on 2010
Decennial Census data.
(3) Impacts of the Proposed Rural
Adjustment and the Cancer Hospital
Payment Adjustment
There are no significant impacts of
our proposed CY 2018 payment policies
for hospitals that are eligible for the
rural adjustment or for the cancer
hospital payment adjustment. We are
not proposing to make any change in
policies for determining the rural
hospital payment adjustments. While
we are implementing the required
reduction to the cancer hospital
payment adjustment in Section 16002 of
the 21st Century Cures Act for CY 2018,
the adjustment amounts do not
significantly impact the budget
neutrality adjustments for these
policies.
(4) Impacts of the Proposed OPD Fee
Schedule Increase Factor
We estimate that, for most hospitals,
the application of the proposed OPD fee
schedule increase factor of 1.75 percent
to the conversion factor for CY 2018
would mitigate the impacts of the
budget neutrality adjustments. As a
result of the OPD fee schedule increase
factor and other budget neutrality
adjustments, we estimate that rural and
urban hospitals would experience
increases of approximately 2.0 percent
for urban hospitals and 2.0 percent for
rural hospitals. Classifying hospitals by
teaching status or type of ownership
suggests that these hospitals would
receive similar increases.
b. Impacts of the Proposed ASC
Payment Update
For impact purposes, the surgical
procedures on the ASC list of covered
procedures are aggregated into surgical
specialty groups using CPT and HCPCS
code range definitions. The proposed
percentage change in estimated total
payments by specialty groups under the
proposed CY 2018 payment rates
compared to estimated CY 2017
payment rates ranges between 5 percent
for integumentary system procedures
and 1 percent for genitourinary system
procedures.
c. Impacts of the Hospital OQR Program
We do not expect our proposed CY
2018 policies to significantly affect the
number of hospitals that do not receive
a full annual payment update.
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d. Impacts of the ASCQR Program
We do not expect our proposed CY
2018 policies to significantly affect the
number of ASCs that do not receive a
full annual payment update.
B. Legislative and Regulatory Authority
for the Hospital OPPS
When Title XVIII of the Social
Security Act was enacted, Medicare
payment for hospital outpatient services
was based on hospital-specific costs. In
an effort to ensure that Medicare and its
beneficiaries pay appropriately for
services and to encourage more efficient
delivery of care, the Congress mandated
replacement of the reasonable costbased payment methodology with a
prospective payment system (PPS). The
Balanced Budget Act of 1997 (BBA)
(Pub. L. 105–33) added section 1833(t)
to the Act authorizing implementation
of a PPS for hospital outpatient services.
The OPPS was first implemented for
services furnished on or after August 1,
2000. Implementing regulations for the
OPPS are located at 42 CFR parts 410
and 419.
The Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106–113) made
major changes in the hospital OPPS.
The following Acts made additional
changes to the OPPS: The Medicare,
Medicaid, and SCHIP Benefits
Improvement and Protection Act of
2000 (BIPA) (Pub. L. 106–554); the
Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA) (Pub. L. 108–173); the
Deficit Reduction Act of 2005 (DRA)
(Pub. L. 109–171), enacted on February
8, 2006; the Medicare Improvements
and Extension Act under Division B of
Title I of the Tax Relief and Health Care
Act of 2006 (MIEA–TRHCA) (Pub. L.
109–432), enacted on December 20,
2006; the Medicare, Medicaid, and
SCHIP Extension Act of 2007 (MMSEA)
(Pub. L. 110–173), enacted on December
29, 2007; the Medicare Improvements
for Patients and Providers Act of 2008
(MIPPA) (Pub. L. 110–275), enacted on
July 15, 2008; the Patient Protection and
Affordable Care Act (Pub. L. 111–148),
enacted on March 23, 2010, as amended
by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111–
152), enacted on March 30, 2010 (these
two public laws are collectively known
as the Affordable Care Act); the
Medicare and Medicaid Extenders Act
of 2010 (MMEA, Pub. L. 111–309); the
Temporary Payroll Tax Cut
Continuation Act of 2011 (TPTCCA,
Pub. L. 112–78), enacted on December
23, 2011; the Middle Class Tax Relief
and Job Creation Act of 2012
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(MCTRJCA, Pub. L. 112–96), enacted on
February 22, 2012; the American
Taxpayer Relief Act of 2012 (Pub. L.
112–240), enacted January 2, 2013; the
Pathway for SGR Reform Act of 2013
(Pub. L. 113–67) enacted on December
26, 2013; the Protecting Access to
Medicare Act of 2014 (PAMA, Pub. L.
113–93), enacted on March 27, 2014; the
Medicare Access and CHIP
Reauthorization Act (MACRA) of 2015
(Pub. L. 114–10), enacted April 16,
2015; the Bipartisan Budget Act of 2015
(Pub. L. 114–74), enacted November 2,
2015; the Consolidated Appropriations
Act, 2016 (Pub. L. 114–113), enacted on
December 18, 2015, and the 21st
Century Cures Act (Pub. L. 114–255),
enacted on December 13, 2016.
Under the OPPS, we pay for hospital
Part B services on a rate-per-service
basis that varies according to the APC
group to which the service is assigned.
We use the Healthcare Common
Procedure Coding System (HCPCS)
(which includes certain Current
Procedural Terminology (CPT) codes) to
identify and group the services within
each APC. The OPPS includes payment
for most hospital outpatient services,
except those identified in section I.C. of
this proposed rule. Section 1833(t)(1)(B)
of the Act provides for payment under
the OPPS for hospital outpatient
services designated by the Secretary
(which includes partial hospitalization
services furnished by CMHCs), and
certain inpatient hospital services that
are paid under Medicare Part B.
The OPPS rate is an unadjusted
national payment amount that includes
the Medicare payment and the
beneficiary copayment. This rate is
divided into a labor-related amount and
a nonlabor-related amount. The laborrelated amount is adjusted for area wage
differences using the hospital inpatient
wage index value for the locality in
which the hospital or CMHC is located.
All services and items within an APC
group are comparable clinically and
with respect to resource use (section
1833(t)(2)(B) of the Act). In accordance
with section 1833(t)(2) of the Act,
subject to certain exceptions, items and
services within an APC group cannot be
considered comparable with respect to
the use of resources if the highest
median cost (or mean cost, if elected by
the Secretary) for an item or service in
the APC group is more than 2 times
greater than the lowest median cost (or
mean cost, if elected by the Secretary)
for an item or service within the same
APC group (referred to as the ‘‘2 times
rule’’). In implementing this provision,
we generally use the cost of the item or
service assigned to an APC group.
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For new technology items and
services, special payments under the
OPPS may be made in one of two ways.
Section 1833(t)(6) of the Act provides
for temporary additional payments,
which we refer to as ‘‘transitional passthrough payments,’’ for at least 2 but not
more than 3 years for certain drugs,
biological agents, brachytherapy devices
used for the treatment of cancer, and
categories of other medical devices. For
new technology services that are not
eligible for transitional pass-through
payments, and for which we lack
sufficient clinical information and cost
data to appropriately assign them to a
clinical APC group, we have established
special APC groups based on costs,
which we refer to as New Technology
APCs. These New Technology APCs are
designated by cost bands which allow
us to provide appropriate and consistent
payment for designated new procedures
that are not yet reflected in our claims
data. Similar to pass-through payments,
an assignment to a New Technology
APC is temporary; that is, we retain a
service within a New Technology APC
until we acquire sufficient data to assign
it to a clinically appropriate APC group.
C. Excluded OPPS Services and
Hospitals
Section 1833(t)(1)(B)(i) of the Act
authorizes the Secretary to designate the
hospital outpatient services that are
paid under the OPPS. While most
hospital outpatient services are payable
under the OPPS, section
1833(t)(1)(B)(iv) of the Act excludes
payment for ambulance, physical and
occupational therapy, and speechlanguage pathology services, for which
payment is made under a fee schedule.
It also excludes screening
mammography, diagnostic
mammography, and effective January 1,
2011, an annual wellness visit providing
personalized prevention plan services.
The Secretary exercises the authority
granted under the statute to also exclude
from the OPPS certain services that are
paid under fee schedules or other
payment systems. Such excluded
services include, for example, the
professional services of physicians and
nonphysician practitioners paid under
the Medicare Physician Fee Schedule
(MPFS); certain laboratory services paid
under the Clinical Laboratory Fee
Schedule (CLFS); services for
beneficiaries with end-stage renal
disease (ESRD) that are paid under the
ESRD prospective payment system; and
services and procedures that require an
inpatient stay that are paid under the
hospital IPPS. We set forth the services
that are excluded from payment under
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the OPPS in regulations at 42 CFR
419.22.
Under § 419.20(b) of the regulations,
we specify the types of hospitals that are
excluded from payment under the
OPPS. These excluded hospitals
include: Critical access hospitals
(CAHs); hospitals located in Maryland
and paid under the Maryland All-Payer
Model; hospitals located outside of the
50 States, the District of Columbia, and
Puerto Rico; and Indian Health Service
(IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the
Federal Register a final rule with
comment period (65 FR 18434) to
implement a prospective payment
system for hospital outpatient services.
The hospital OPPS was first
implemented for services furnished on
or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the
Secretary to review certain components
of the OPPS, not less often than
annually, and to revise the groups,
relative payment weights, and other
adjustments that take into account
changes in medical practices, changes in
technologies, and the addition of new
services, new cost data, and other
relevant information and factors.
Since initially implementing the
OPPS, we have published final rules in
the Federal Register annually to
implement statutory requirements and
changes arising from our continuing
experience with this system. These rules
can be viewed on the CMS Web site at:
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/HospitalOutpatient-Regulations-andNotices.html.
E. Advisory Panel on Hospital
Outpatient Payment (the HOP Panel or
the Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as
amended by section 201(h) of Public
Law 106–113, and redesignated by
section 202(a)(2) of Public Law 106–113,
requires that we consult with an
external advisory panel of experts to
annually review the clinical integrity of
the payment groups and their weights
under the OPPS. In CY 2000, based on
section 1833(t)(9)(A) of the Act, the
Secretary established the Advisory
Panel on Ambulatory Payment
Classification Groups (APC Panel) to
fulfill this requirement. In CY 2011,
based on section 222 of the PHS Act
which gives discretionary authority to
the Secretary to convene advisory
councils and committees, the Secretary
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expanded the panel’s scope to include
the supervision of hospital outpatient
therapeutic services in addition to the
APC groups and weights. To reflect this
new role of the panel, the Secretary
changed the panel’s name to the
Advisory Panel on Hospital Outpatient
Payment (the HOP Panel, or the Panel).
The Panel is not restricted to using data
compiled by CMS, and in conducting its
review, it may use data collected or
developed by organizations outside the
Department.
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2. Establishment of the Panel
On November 21, 2000, the Secretary
signed the initial charter establishing
the HOP Panel, and at that time named
the APC Panel. This expert panel is
composed of appropriate representatives
of providers (currently employed fulltime, not as consultants, in their
respective areas of expertise), reviews
clinical data, and advises CMS about the
clinical integrity of the APC groups and
their payment weights. Since CY 2012,
the Panel also is charged with advising
the Secretary on the appropriate level of
supervision for individual hospital
outpatient therapeutic services. The
Panel is technical in nature, and it is
governed by the provisions of the
Federal Advisory Committee Act
(FACA). The current charter specifies,
among other requirements, that: The
Panel may advise on the clinical
integrity of Ambulatory Payment
Classification (APC) groups and their
associated weights; may advise on the
appropriate supervision level for
hospital outpatient services; continues
to be technical in nature; is governed by
the provisions of the FACA; has a
Designated Federal Official (DFO); and
is chaired by a Federal Official
designated by the Secretary. The Panel’s
charter was amended on November 15,
2011, renaming the Panel and
expanding the Panel’s authority to
include supervision of hospital
outpatient therapeutic services and to
add Critical Access Hospital (CAH)
representation to its membership. The
Panel’s charter was also amended on
November 6, 2014 (80 FR 23009), and
the number of panel members was
revised from up to 19 to up to 15
members. The Panel’s current charter
was approved on November 21, 2016,
for a 2-year period (81 FR 94378).
The current Panel membership and
other information pertaining to the
Panel, including its charter, Federal
Register notices, membership, meeting
dates, agenda topics, and meeting
reports, can be viewed on the CMS Web
site at: https://www.cms.gov/
Regulations-and-Guidance/Guidance/
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FACA/AdvisoryPanelonAmbulatory
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3. Panel Meetings and Organizational
Structure
The Panel has held multiple meetings,
with the last meeting taking place on
August 22, 2016. Prior to each meeting,
we publish a notice in the Federal
Register to announce the meeting and,
when necessary, to solicit nominations
for Panel membership, to announce new
members and to announce any other
changes that the public should be aware
of. Beginning in CY 2017, we have
transitioned to one meeting per year (81
FR 31941). Further information on this
summer’s meeting can be found in the
meeting notice titled ‘‘Medicare
Program: Announcement of the
Advisory Panel on Hospital Outpatient
Payment (the Panel) Meeting on August
21–22, 2017’’ (82 FR 24128).
The Panel has established an
operational structure that, in part,
currently includes the use of three
subcommittees to facilitate its required
review process. The three current
subcommittees are the Data
Subcommittee, the Visits and
Observation Subcommittee, and the
Subcommittee for APC Groups and
Status Indicator (SI) Assignments. The
Data Subcommittee is responsible for
studying the data issues confronting the
Panel and for recommending options for
resolving them. The Visits and
Observation Subcommittee reviews and
makes recommendations to the Panel on
all technical issues pertaining to
observation services and hospital
outpatient visits paid under the OPPS
(for example, APC configurations and
APC relative payment weights). The
Subcommittee for APC Groups and SI
Assignments advises the Panel on the
following issues: The appropriate status
indicators to be assigned to HCPCS
codes, including but not limited to
whether a HCPCS code or a category of
codes should be packaged or separately
paid; and the appropriate APC
assignment of HCPCS codes regarding
services for which separate payment is
made. The Panel recommended at the
August 22, 2016 meeting that the
subcommittees continue. We accepted
this recommendation.
Discussions of the other
recommendations made by the Panel at
the August 22, 2016 Panel meeting,
namely conditional packaging,
allogeneic hematopoietic stem cell
transplantation, and outpatient total
knee arthroplasty, were discussed in the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79562), the CY
2017 OPPS/ASC correction notice (82
FR 24), or are included in the sections
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of this proposed rule that are specific to
each recommendation. For discussions
of past Panel meetings and
recommendations, we refer readers to
previously published OPPS/ASC
proposed and final rules, the CMS
Advisory Panel on Hospital Outpatient
Payment Web site mentioned earlier in
this section, and the FACA database at:
https://facadatabase.gov/.
F. Public Comments Received on the CY
2017 OPPS/ASC Final Rule With
Comment Period
We received 39 timely pieces of
correspondence on the CY 2017 OPPS/
ASC final rule with comment period
that appeared in the Federal Register on
November 14, 2016 (81 FR 79562), some
of which contained comments on the
interim APC assignments and/or status
indicators of new or replacement Level
II HCPCS codes (identified with
comment indicator ‘‘NI’’ in OPPS
Addendum B, ASC Addendum AA, and
ASC Addendum BB to that final rule),
the potential limitation on clinical
service line expansion or volume of
services increases by nonexcepted off
campus provider-based departments,
and the Medicare Physician Fee
Schedule (MPFS) payment rates for
nonexcepted items and services
furnished and billed by nonexcepted
off-campus provider-based departments
of hospitals. Summaries of the public
comments are set forth in this proposed
rule under the appropriate subject
matter headings. Summaries of public
comments on the MPFS payment rates
for nonexcepted items and services will
be set forth in the CY 2018 MPFS final
rule with comment period.
II. Proposed Updates Affecting OPPS
Payments
A. Proposed Recalibration of APC
Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act
requires that the Secretary review not
less often than annually and revise the
relative payment weights for APCs. In
the April 7, 2000 OPPS final rule with
comment period (65 FR 18482), we
explained in detail how we calculated
the relative payment weights that were
implemented on August 1, 2000 for each
APC group.
In this CY 2018 OPPS/ASC proposed
rule, for CY 2018, we are proposing to
recalibrate the APC relative payment
weights for services furnished on or
after January 1, 2018, and before January
1, 2019 (CY 2018), using the same basic
methodology that we described in the
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CY 2017 OPPS/ASC final rule with
comment period (81 FR 79574 through
79595). That is, we are proposing to
recalibrate the relative payment weights
for each APC based on claims and cost
report data for hospital outpatient
department (HOPD) services, using the
most recent available data to construct
a database for calculating APC group
weights.
For the purpose of recalibrating the
proposed APC relative payment weights
for CY 2018, we began with
approximately 163 million final action
claims (claims for which all disputes
and adjustments have been resolved and
payment has been made) for HOPD
services furnished on or after January 1,
2016, and before January 1, 2017, before
applying our exclusionary criteria and
other methodological adjustments. After
the application of those data processing
changes, we used approximately 86
million final action claims to develop
the proposed CY 2018 OPPS payment
weights. For exact numbers of claims
used and additional details on the
claims accounting process, we refer
readers to the claims accounting
narrative under supporting
documentation for this CY 2018 OPPS/
ASC proposed rule on the CMS Web site
at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/.
Addendum N to this proposed rule
includes the proposed list of bypass
codes for CY 2018. The proposed list of
bypass codes contains codes that were
reported on claims for services in CY
2016 and, therefore, includes codes that
were in effect in CY 2016 and used for
billing, but were deleted for CY 2017.
We retained these deleted bypass codes
on the proposed CY 2018 bypass list
because these codes existed in CY 2016
and were covered OPD services in that
period, and CY 2016 claims data are
used to calculate CY 2018 payment
rates. Keeping these deleted bypass
codes on the bypass list potentially
allows us to create more ‘‘pseudo’’
single procedure claims for ratesetting
purposes. ‘‘Overlap bypass codes’’ that
are members of the proposed multiple
imaging composite APCs are identified
by asterisks (*) in the third column of
Addendum N to this proposed rule.
HCPCS codes that we are proposing to
add for CY 2018 are identified by
asterisks (*) in the fourth column of
Addendum N.
Table 1 below contains the list of
codes that we are proposing to remove
from the CY 2018 bypass list.
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TABLE 1—PROPOSED HCPCS CODES Payment/HospitalOutpatientPPS/
TO BE REMOVED FROM THE CY index.html.
To ensure the completeness of the
2018 BYPASS LIST
HCPCS code
HCPCS short descriptor
77305 .............
77310 .............
Teletx isodose plan simple.
Teletx isodose plan
intermed.
Teletx isodose plan complex.
Brachytx isodose calc intern.
Psy dx interview.
Intac psy dx interview.
Psytx office 20–30 min.
Psytx off 20–30 min w/e&m.
Psytx off 45–50 min.
Psytx off 45–50 min w/e&m.
Psytx office 75–80 min.
Psytx off 75–80 w/e&m.
Intac psytx off 20–30 min.
Intac psytx 20–40 w/e&m.
Intac psytx off 45–50 min.
Intac group psytx.
Medication management.
Office/outpatient visit new.
Office/outpatient visit new.
Office/outpatient visit new.
Office/outpatient visit new.
Office/outpatient visit new.
Office/outpatient visit est.
Office/outpatient visit est.
Office/outpatient visit est.
Hyperbaric oxygen.
Robt lin-radsurg fractx 2–5.
Influenza A H1N1, admin w
cou.
Visit for drug monitoring.
77315 .............
77327 .............
90801 .............
90802 .............
90804 .............
90805 .............
90806 .............
90807 .............
90808 .............
90809 .............
90810 .............
90811 .............
90812 .............
90857 .............
90862 .............
99201 .............
99202 .............
99203 .............
99204 .............
99205 .............
99212 .............
99213 .............
99214 .............
C1300 ............
G0340 ............
G9141 ............
M0064 ............
b. Proposed Calculation and Use of
Cost-to-Charge Ratios (CCRs)
For CY 2018, in this CY 2018 OPPS/
ASC proposed rule, we are proposing to
continue to use the hospital-specific
overall ancillary and departmental costto-charge ratios (CCRs) to convert
charges to estimated costs through
application of a revenue code-to-cost
center crosswalk. To calculate the APC
costs on which the proposed CY 2018
APC payment rates are based, we
calculated hospital-specific overall
ancillary CCRs and hospital-specific
departmental CCRs for each hospital for
which we had CY 2016 claims data by
comparing these claims data to the most
recently available hospital cost reports,
which, in most cases, are from CY 2015.
For the proposed CY 2018 OPPS
payment rates, we used the set of claims
processed during CY 2016. We applied
the hospital-specific CCR to the
hospital’s charges at the most detailed
level possible, based on a revenue codeto-cost center crosswalk that contains a
hierarchy of CCRs used to estimate costs
from charges for each revenue code.
That crosswalk is available for review
and continuous comment on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-Service-
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revenue code-to-cost center crosswalk,
we reviewed changes to the list of
revenue codes for CY 2016 (the year of
claims data we used to calculate the
proposed CY 2018 OPPS payment rates)
and found that the National Uniform
Billing Committee (NUBC) did not add
any new revenue codes to the NUBC
2016 Data Specifications Manual.
In accordance with our longstanding
policy, we calculate CCRs for the
standard and nonstandard cost centers
accepted by the electronic cost report
database. In general, the most detailed
level at which we calculate CCRs is the
hospital-specific departmental level. For
a discussion of the hospital-specific
overall ancillary CCR calculation, we
refer readers to the CY 2007 OPPS/ASC
final rule with comment period (71 FR
67983 through 67985). The calculation
of blood costs is a longstanding
exception (since the CY 2005 OPPS) to
this general methodology for calculation
of CCRs used for converting charges to
costs on each claim. This exception is
discussed in detail in the CY 2007
OPPS/ASC final rule with comment
period and discussed further in section
II.A.2.a.(1) of this proposed rule.
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74840
through 74847), we finalized our policy
of creating new cost centers and distinct
CCRs for implantable devices, MRIs, CT
scans, and cardiac catheterization.
However, in response to the CY 2014
OPPS/ASC proposed rule, commenters
reported that some hospitals currently
use an imprecise ‘‘square feet’’
allocation methodology for the costs of
large moveable equipment like CT scan
and MRI machines. They indicated that
while CMS recommended using two
alternative allocation methods, ‘‘direct
assignment’’ or ‘‘dollar value,’’ as a
more accurate methodology for directly
assigning equipment costs, industry
analysis suggested that approximately
only half of the reported cost centers for
CT scans and MRIs rely on these
preferred methodologies. In response to
concerns from commenters, we finalized
a policy for the CY 2014 OPPS to
remove claims from providers that use
a cost allocation method of ‘‘square
feet’’ to calculate CCRs used to estimate
costs associated with the CT and MRI
APCs (78 FR 74847). Further, we
finalized a transitional policy to
estimate imaging APC relative payment
weights using only CT and MRI cost
data from providers that do not use
‘‘square feet’’ as the cost allocation
statistic. We provided that this finalized
policy would sunset in 4 years to
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provide a sufficient time for hospitals to
transition to a more accurate cost
allocation method and for the related
data to be available for ratesetting
purposes (78 FR 74847). Therefore,
beginning CY 2018, with the sunset of
the transition policy, we would estimate
the imaging APC relative payment
weight using cost data from all
providers, regardless of the cost
allocation statistic employed.
Some stakeholders have raised
concerns regarding using claims from all
providers to calculate CT and MRI
CCRs, regardless of the cost allocations
statistic employed (78 FR 74840 through
74847). Stakeholders noted that
providers continue to use the ‘‘square
feet’’ cost allocation method and that
including claims from such providers
would cause significant reductions in
imaging APC payment rates.
Table 2 below demonstrates the
relative effect on imaging APC payments
after removing cost data for providers
that report CT and MRI standard cost
centers using ‘‘square feet’’ as the cost
allocation method by extracting HCRIS
data on Worksheet B–1. Table 3 below
provides statistical values based on the
CT and MRI standard cost center CCRs
using the different cost allocation
methods.
TABLE 2—PERCENTAGE CHANGE IN ESTIMATE COST FOR CT AND MRI APCS WHEN EXCLUDING CLAIMS FROM PROVIDER
USING ‘‘SQUARE FEET’’ AS THE COST ALLOCATION METHOD
APC
5521
5522
5523
5524
5525
5571
5572
5573
8005
8006
8007
8008
Percentage
change
APC descriptor
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
Level 1 Imaging without Contrast ................................................................................
Level 2 Imaging without Contrast ................................................................................
Level 3 Imaging without Contrast ................................................................................
Level 4 Imaging without Contrast ................................................................................
Level 5 Imaging without Contrast ................................................................................
Level 1 Imaging with Contrast .....................................................................................
Level 2 Imaging with Contrast .....................................................................................
Level 3 Imaging with Contrast .....................................................................................
CT and CTA without Contrast Composite ...................................................................
CT and CTA with Contrast Composite ........................................................................
MRI and MRA without Contrast Composite .................................................................
MRI and MRA with Contrast Composite ......................................................................
¥4.3
6.1
1.1
7.3
4.5
10.1
9.4
6.0
13.5
10.5
6.8
7.2
TABLE 3—CCR STATISTICAL VALUES BASED ON USE OF DIFFERENT COST ALLOCATION METHODS
CT
MRI
Cost allocation method
Median CCR
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All Providers .....................................................................................................
Square Feet Only ............................................................................................
Direct Assign ....................................................................................................
Dollar Value .....................................................................................................
Direct Assign and Dollar Value .......................................................................
Our analysis shows that since the CY
2014 OPPS in which we established the
transition policy, the number of valid
MRI CCRs has increased by 15.6 percent
to 2,142 providers and the number of
valid CT CCRs has increased by 13.4
percent to 2,219 providers. However, we
note that, as shown in Table 2 above,
nearly all imaging APCs would see an
increase in payment rates for CY 2018
if claims from providers that report
‘‘square feet’’ cost allocation method
were removed. This can be attributed to
the generally lower CCR values from
providers that use a cost allocation
method of ‘‘square feet’’ as shown in
Table 3 above. We believe that the
imaging CCRs that we have are
appropriate for ratesetting. However, in
response to provider concerns and to
provide added flexibility for hospitals to
improve their cost allocation methods,
we are proposing to extend the
transition policy an additional year, for
the CY 2018 OPPS.
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0.0397
0.0332
0.0591
0.0485
0.0485
For the CY 2018 OPPS, we are
proposing to continue to remove claims
from providers that use a cost allocation
method of ‘‘square feet’’ to calculate
CCRs used to estimate costs with the CT
and MRI APCs identified in Table 2
above. Beginning in CY 2019, we would
estimate the imaging APC relative
payment weights using cost data from
all providers, regardless of the cost
allocation statistic employed.
2. Proposed Data Development Process
and Calculation of Costs Used for
Ratesetting
In this section of this proposed rule,
we discuss the use of claims to calculate
the proposed OPPS payment rates for
CY 2018. The Hospital OPPS page on
the CMS Web site on which this
proposed rule is posted (https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/Hospital
OutpatientPPS/) provides an
accounting of claims used in the
development of the proposed payment
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Mean CCR
0.0559
0.0493
0.0680
0.0644
0.0644
Median CCR
0.0828
0.0726
0.1039
0.0941
0.0949
Mean CCR
0.1072
0.0972
0.1247
0.1203
0.1200
rates. That accounting provides
additional detail regarding the number
of claims derived at each stage of the
process. In addition, below in this
section we discuss the file of claims that
comprises the data set that is available
upon payment of an administrative fee
under a CMS data use agreement. The
CMS Web site, https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
index.html, includes information about
obtaining the ‘‘OPPS Limited Data Set,’’
which now includes the additional
variables previously available only in
the OPPS Identifiable Data Set,
including ICD–10–CM diagnosis codes
and revenue code payment amounts.
This file is derived from the CY 2016
claims that were used to calculate the
proposed payment rates for the CY 2018
OPPS.
In the history of the OPPS, we have
traditionally established the scaled
relative weights on which payments are
based using APC median costs, which is
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a process described in the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74188). However, as
discussed in more detail in section
II.A.2.f. of the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68259
through 68271), we finalized the use of
geometric mean costs to calculate the
relative weights on which the CY 2013
OPPS payment rates were based. While
this policy changed the cost metric on
which the relative payments are based,
the data process in general remained the
same, under the methodologies that we
used to obtain appropriate claims data
and accurate cost information in
determining estimated service cost. For
CY 2018, in this CY 2018 OPPS/ASC
proposed rule, we are proposing to
continue to use geometric mean costs to
calculate the proposed relative weights
on which the CY 2018 OPPS payment
rates are based.
We used the methodology described
in sections II.A.2.a. through II.A.2.c. of
this proposed rule to calculate the costs
we used to establish the proposed
relative payment weights used in
calculating the proposed OPPS payment
rates for CY 2018 shown in Addenda A
and B to this proposed rule (which are
available via the Internet on the CMS
Web site). We refer readers to section
II.A.4. of this proposed rule for a
discussion of the conversion of APC
costs to scaled payment weights.
For details of the claims process used
in this proposed rule, we refer readers
to the claims accounting narrative under
supporting documentation for this CY
2018 OPPS/ASC proposed rule on the
CMS Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
index.html.
a. Proposed Calculation of Single
Procedure APC Criteria-Based Costs
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(1) Blood and Blood Products
(a) Methodology
Since the implementation of the OPPS
in August 2000, we have made separate
payments for blood and blood products
through APCs rather than packaging
payment for them into payments for the
procedures with which they are
administered. Hospital payments for the
costs of blood and blood products, as
well as for the costs of collecting,
processing, and storing blood and blood
products, are made through the OPPS
payments for specific blood product
APCs.
For CY 2018, in this CY 2018 OPPS/
ASC proposed rule, we are proposing to
continue to establish payment rates for
blood and blood products using our
blood-specific CCR methodology, which
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utilizes actual or simulated CCRs from
the most recently available hospital cost
reports to convert hospital charges for
blood and blood products to costs. This
methodology has been our standard
ratesetting methodology for blood and
blood products since CY 2005. It was
developed in response to data analysis
indicating that there was a significant
difference in CCRs for those hospitals
with and without blood-specific cost
centers, and past public comments
indicating that the former OPPS policy
of defaulting to the overall hospital CCR
for hospitals not reporting a bloodspecific cost center often resulted in an
underestimation of the true hospital
costs for blood and blood products.
Specifically, in order to address the
differences in CCRs and to better reflect
hospitals’ costs, we are proposing to
continue to simulate blood CCRs for
each hospital that does not report a
blood cost center by calculating the ratio
of the blood-specific CCRs to hospitals’
overall CCRs for those hospitals that do
report costs and charges for blood cost
centers. We also are proposing to apply
this mean ratio to the overall CCRs of
hospitals not reporting costs and
charges for blood cost centers on their
cost reports in order to simulate bloodspecific CCRs for those hospitals. We
are proposing to calculate the costs
upon which the proposed CY 2018
payment rates for blood and blood
products are based using the actual
blood-specific CCR for hospitals that
reported costs and charges for a blood
cost center and a hospital-specific,
simulated blood-specific CCR for
hospitals that did not report costs and
charges for a blood cost center.
We continue to believe that the
hospital-specific, simulated bloodspecific CCR methodology better
responds to the absence of a bloodspecific CCR for a hospital than
alternative methodologies, such as
defaulting to the overall hospital CCR or
applying an average blood-specific CCR
across hospitals. Because this
methodology takes into account the
unique charging and cost accounting
structure of each hospital, we believe
that it yields more accurate estimated
costs for these products. We continue to
believe that this methodology in CY
2018 would result in costs for blood and
blood products that appropriately reflect
the relative estimated costs of these
products for hospitals without blood
cost centers and, therefore, for these
blood products in general.
We note that, as discussed in section
II.A.2.e. of the CYs 2014 through 2017
OPPS/ASC final rules with comment
period (78 FR 74861 through 74910, 79
FR 66798 through 66810, 80 FR 70325
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through 70339, and 81 FR 79580
through 79585, respectively), we
defined a comprehensive APC (C–APC)
as a classification for the provision of a
primary service and all adjunctive
services provided to support the
delivery of the primary service. Under
this policy, we include the costs of
blood and blood products when
calculating the overall costs of these C–
APCs. We are proposing to continue to
apply the blood-specific CCR
methodology described in this section
when calculating the costs of the blood
and blood products that appear on
claims with services assigned to the C–
APCs. Because the costs of blood and
blood products would be reflected in
the overall costs of the C–APCs (and, as
a result, in the proposed payment rates
of the C–APCs), we are proposing to not
make separate payments for blood and
blood products when they appear on the
same claims as services assigned to the
C–APCs (we refer readers to the CY
2015 OPPS/ASC final rule with
comment period (79 FR 66796)).
We also refer readers to Addendum B
to this proposed rule (which is available
via the Internet on the CMS Web site)
for the proposed CY 2018 payment rates
for blood and blood products (which are
identified with status indicator ‘‘R’’).
For a more detailed discussion of the
blood-specific CCR methodology, we
refer readers to the CY 2005 OPPS
proposed rule (69 FR 50524 through
50525). For a full history of OPPS
payment for blood and blood products,
we refer readers to the CY 2008 OPPS/
ASC final rule with comment period (72
FR 66807 through 66810).
We are inviting public comments on
our proposals.
(b) Pathogen-Reduced Platelets and
Rapid Bacterial Testing for Platelets
In March 2016, the Food and Drug
Administration (FDA) issued draft
guidance for the health care industry
entitled ‘‘Bacterial Risk Control
Strategies for Blood Collection
Establishments and Transfusion
Services to Enhance the Safety and
Availability of Platelets for Transfusion’’
(available at: https://www.fda.gov/
BiologicsBloodVaccines/
GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm). This draft guidance
recommended the use of rapid bacterial
testing devices secondary to testing
using a culture-based bacterial detection
device or pathogen-reduction
technology for platelets to adequately
control the risk of bacterial
contamination of platelets.
In the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70322), we
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established HCPCS code P9072
(Platelets, pheresis, pathogen reduced,
each unit). The CMS HCPCS Workgroup
later revised HCPCS code P9072 to
include the use of pathogen-reduction
technology or rapid bacterial testing.
Specifically, the descriptor for this code
was revised, effective January 1, 2017, to
read as follows: HCPCS code P9072
(Platelets, pheresis, pathogen reduced or
rapid bacterial tested, each unit). The
payment rate for HCPCS code P9072 is
based on a crosswalk to HCPCS code
P9037 (Platelets, pheresis, leukocyte
reduced, irradiated, each unit). We refer
readers to the CY 2016 OPPS/ASC final
rule with comment period for a further
discussion of crosswalks for pathogenreduced blood products (80 FR 70323).
After the release of the CY 2017
OPPS/ASC final rule with comment
period, several blood and blood product
stakeholders expressed concerns about
the revised code descriptor for HCPCS
code P9072. The stakeholders believed
that the revision to HCPCS code P9072
to describe both pathogen reduction and
rapid bacterial testing was an
inappropriate code descriptor. They
stated that separate coding is needed to
describe each service because each
service is distinct. The stakeholders also
noted that the code descriptor for
HCPCS code P9072 results in hospitals
receiving the same payment rate for
platelets undergoing rapid bacterial
testing that the hospitals receive for
platelets treated with pathogen
reduction technology, despite the fact
that pathogen reduction is significantly
more expensive than rapid bacterial
testing.
After review of the concerns
expressed by the blood and blood
product stakeholders, the CMS HCPCS
Workgroup deactivated HCPCS code
P9072 for Medicare reporting and
replaced the code with two new HCPCS
codes effective July 1, 2017.
Specifically, effective July 1, 2017,
HCPCS code Q9988 (Platelets, pheresis,
pathogen reduced, each unit) shall be
used to report the use of pathogenreduction technology and HCPCS code
Q9987 (Pathogen(s) test for platelets)
shall be used to report rapid bacterial
testing or other pathogen tests for
platelets, instead of HCPCS code P9072.
We note that HCPCS code Q9987 should
be reported to describe the test used for
the detection of bacterial contamination
in platelets as well as any other test that
may be used to detect pathogen
contamination. HCPCS code Q9987
should not be used for reporting
donation testing for infectious agents
such as viruses. The coding changes
associated with these codes were
published on the CMS HCPCS Quarterly
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Update Web site, effective July 2017, at:
https://www.cms.gov/Medicare/Coding/
HCPCSReleaseCodeSets/HCPCSQuarterly-Update.html. In addition, for
OPPS, we announced the new HCPCS
codes that were effective July 1, 2017
through the July 2017 OPPS quarterly
update Change Request (Transmittal
3783, Change Request 10122, dated May
26, 2017). We note that, effective July 1,
2017, HCPCS code Q9988 is assigned to
APC 9536 (Pathogen Reduced Platelets),
with a payment rate of $647.12, and
HCPCS code Q9987 is assigned to New
Technology APC 1493, with a payment
rate of $25.50.
In the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70322
through 70323), we reiterated that we
calculate payment rates for blood and
blood products using our blood-specific
CCR methodology, which utilizes actual
or simulated CCRs from the most
recently available hospital cost reports
to convert hospital charges for blood
and blood products to costs. Because
HCPCS code P9072 was new for CY
2016, there were no claims data on the
charges and costs for this blood product
upon which to apply our blood-specific
CCR methodology. Therefore, we
established an interim payment rates for
this HCPCS code based on a crosswalk
to existing blood product HCPCS code
P9037, which we believed provided the
best proxy for the costs of the new blood
product. In addition, we stated that once
we had claims data for HCPCS code
P9072, we would calculate its payment
rate using the claims data that should be
available for the code beginning in CY
2018, which is our practice for other
blood product HCPCS codes for which
claims data have been available for 2
years.
Although our standard practice for
new codes involves using claims data to
set payment rates once claims data
become available, we are concerned that
there may have been confusion among
the provider community about the
services that HCPCS code P9072
described. That is, as early as 2016,
there were discussions about changing
the descriptor for HCPCS code P9072 to
include the phrase ‘‘or rapid bacterial
tested’’, which is a much less costly
technology than pathogen reduction. In
addition, as noted above, effective
January 2017, the code descriptor for
HCPCS code P9072 was, in fact,
changed to also describe rapid bacterial
testing of platelets and, effective July 1,
2017, the descriptor for the temporary
successor code for HCPCS code P9072
(that is, HCPCS code Q9988) was
changed again back to the original
descriptor for HCPCS code P9072 that
was in place for 2016.
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Based on the ongoing discussions
involving changes to the original HCPCS
code P9072 established in CY 2016, we
believe that claims for pathogen reduced
platelets may potentially reflect certain
claims for rapid bacterial testing of
platelets. The geometric mean costs
based on submitted claims for HCPCS
code P9072 based on available claims
data from CY 2016 is $491.53, which is
a 24-percent reduction from the CY
2017 payment rate of $647.12. Because
we believe that there may have been
confusion related to ongoing
discussions about changes to the
original code descriptor for HCPCS code
P9072, we believe it is appropriate to
continue to crosswalk the payment
amount for at least 1 additional year.
Therefore, we are proposing for CY 2018
to determine the payment rate for
HCPCS code Q9988 (the successor code
to HCPCS code P9072) by continuing to
use the payment rate that has been
crosswalked from HCPCS code P9037 of
$647.12.
In this CY 2018 OPPS/ASC proposed
rule, we are soliciting public comments
on the proposed APC and status
indicator assignments for HCPCS codes
Q9987 and Q9988 for the CY 2018 OPPS
update. The proposed payment rates for
HCPCS codes Q9987 and Q9988 can be
found in Addendum B to this proposed
rule (which is available via the Internet
on the CMS Web site).
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act
mandates the creation of additional
groups of covered OPD services that
classify devices of brachytherapy
consisting of a seed or seeds (or
radioactive source) (‘‘brachytherapy
sources’’) separately from other services
or groups of services. The statute
provides certain criteria for the
additional groups. For the history of
OPPS payment for brachytherapy
sources, we refer readers to prior OPPS
final rules, such as the CY 2012 OPPS/
ASC final rule with comment period (77
FR 68240 through 68241). As we have
stated in prior OPPS updates, we
believe that adopting the general OPPS
prospective payment methodology for
brachytherapy sources is appropriate for
a number of reasons (77 FR 68240). The
general OPPS methodology uses costs
based on claims data to set the relative
payment weights for hospital outpatient
services. This payment methodology
results in more consistent, predictable,
and equitable payment amounts per
source across hospitals by averaging the
extremely high and low values, in
contrast to payment based on hospitals’
charges adjusted to costs. We believe
that the OPPS methodology, as opposed
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to payment based on hospitals’ charges
adjusted to cost, also would provide
hospitals with incentives for efficiency
in the provision of brachytherapy
services to Medicare beneficiaries.
Moreover, this approach is consistent
with our payment methodology for the
vast majority of items and services paid
under the OPPS. We refer readers to the
CY 2016 OPPS/ASC final rule with
comment period (80 FR 70323 through
70325) for further discussion of the
history of OPPS payment for
brachytherapy sources.
In this CY 2018 OPPS/ASC proposed
rule, for CY 2018, we are proposing to
use the costs derived from CY 2016
claims data to set the proposed CY 2018
payment rates for brachytherapy sources
because CY 2016 is the same year of
data we are proposing to use to set the
proposed payment rates for most other
items and services that would be paid
under the CY 2018 OPPS. We are
proposing to base the payment rates for
brachytherapy sources on the geometric
mean unit costs for each source,
consistent with the methodology that
we are proposing for other items and
services paid under the OPPS, as
discussed in section II.A.2. of this
proposed rule. We also are proposing to
continue the other payment policies for
brachytherapy sources that we finalized
and first implemented in the CY 2010
OPPS/ASC final rule with comment
period (74 FR 60537). We are proposing
to pay for the stranded and nonstranded
not otherwise specified (NOS) codes,
HCPCS codes C2698 and C2699, at a
rate equal to the lowest stranded or
nonstranded prospective payment rate
for such sources, respectively, on a per
source basis (as opposed to, for
example, a per mCi), which is based on
the policy we established in the CY
2008 OPPS/ASC final rule with
comment period (72 FR 66785). For CY
2018 and subsequent years, we also are
proposing to continue the policy we
first implemented in the CY 2010 OPPS/
ASC final rule with comment period (74
FR 60537) regarding payment for new
brachytherapy sources for which we
have no claims data, based on the same
reasons we discussed in the CY 2008
OPPS/ASC final rule with comment
period (72 FR 66786; which was
delayed until January 1, 2010 by section
142 of Pub. L. 110–275). Specifically,
this policy is intended to enable us to
assign new HCPCS codes for new
brachytherapy sources to their own
APCs, with prospective payment rates
set based on our consideration of
external data and other relevant
information regarding the expected
costs of the sources to hospitals.
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The proposed CY 2018 payment rates
for brachytherapy sources are included
in Addendum B to this proposed rule
(which is available via the Internet on
the CMS Web site) and are identified
with status indicator ‘‘U’’. For CY 2018,
we are proposing to assign status
indicator ‘‘E2’’ (Items and Services for
Which Pricing Information and Claims
Data Are Not Available) to HCPCS code
C2645 (Brachytherapy planar, p-103)
because this code was not reported on
CY 2016 claims. Therefore, we are
unable to calculate a proposed payment
rate based on the general OPPS
ratesetting methodology described
earlier. Although HCPCS code C2645
became effective January 1, 2016, and
although we would expect that if a
hospital furnished a brachytherapy
source described by this code in CY
2016, HCPCS code C2645 should appear
on the CY 2016 claims, there are no CY
2016 claims reporting this code. In
addition, unlike new brachytherapy
sources HCPCS codes, we will not
consider external data to determine a
proposed payment rate for HCPCS code
C2645 for CY 2018. Therefore, we are
proposing to assign status indicator
‘‘E2’’ to HCPCS code C2645.
In addition, we assigned status
indicator ‘‘E2’’ to HCPCS code C2644
(Brachytherapy cesium-131 chloride)
because this code was not reported on
any CY 2015 claims (that is, there were
no Medicare claims submitted by any
hospitals in 2015 that reported this
HCPCS code). In our review of CY 2016
claims (which are used to set rates for
CY 2018), we found that one hospital
submitted one claim reporting HCPCS
code C2644. Therefore, we are
proposing to assign status indicator ‘‘U’’
to HCPCS code 2644, and our payment
rates for HCPCS code C2644 will be
based on this information.
We are inviting public comments on
our proposals.
We continue to invite hospitals and
other parties to submit
recommendations to us for new codes to
describe new brachytherapy sources.
Such recommendations should be
directed to the Division of Outpatient
Care, Mail Stop C4–01–26, Centers for
Medicare and Medicaid Services, 7500
Security Boulevard, Baltimore, MD
21244. We will continue to add new
brachytherapy source codes and
descriptors to our systems for payment
on a quarterly basis.
b. Proposed Comprehensive APCs (C–
APCs) for CY 2018
(1) Background
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74861
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33573
through 74910), we finalized a
comprehensive payment policy that
packages payment for adjunctive and
secondary items, services, and
procedures into the most costly primary
procedure under the OPPS at the claim
level. The policy was finalized in CY
2014, but the effective date was delayed
until January 1, 2015, to allow
additional time for further analysis,
opportunity for public comment, and
systems preparation. The
comprehensive APC (C–APC) policy
was implemented effective January 1,
2015, with modifications and
clarifications in response to public
comments received regarding specific
provisions of the C–APC policy (79 FR
66798 through 66810).
A C–APC is defined as a classification
for the provision of a primary service
and all adjunctive services provided to
support the delivery of the primary
service. We established C–APCs as a
category broadly for OPPS payment and
implemented 25 C–APCs beginning in
CY 2015 (79 FR 66809 through 66810).
In the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70332), we
finalized 10 additional C–APCs to be
paid under the existing C–APC payment
policy. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79584
through 79585), we finalized another 25
C–APCs.
Under this policy, we designated a
service described by a HCPCS code
assigned to a C–APC as the primary
service when the service is identified by
OPPS status indicator ‘‘J1’’. When such
a primary service is reported on a
hospital outpatient claim, taking into
consideration the few exceptions that
are discussed below, we make payment
for all other items and services reported
on the hospital outpatient claim as
being integral, ancillary, supportive,
dependent, and adjunctive to the
primary service (hereinafter collectively
referred to as ‘‘adjunctive services’’) and
representing components of a complete
comprehensive service (78 FR 74865
and 79 FR 66799). Payments for
adjunctive services are packaged into
the payments for the primary services.
This results in a single prospective
payment for each of the primary,
comprehensive services based on the
costs of all reported services at the claim
level.
Services excluded from the C–APC
policy under the OPPS include services
that are not covered OPD services,
services that cannot by statute be paid
for under the OPPS, and services that
are required by statute to be separately
paid. This includes certain
mammography and ambulance services
that are not covered OPD services in
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accordance with section
1833(t)(1)(B)(iv) of the Act;
brachytherapy seeds, which also are
required by statute to receive separate
payment under section 1833(t)(2)(H) of
the Act; pass-through drugs and devices,
which also require separate payment
under section 1833(t)(6) of the Act; selfadministered drugs (SADs) that are not
otherwise packaged as supplies because
they are not covered under Medicare
Part B under section 1861(s)(2)(B) of the
Act; and certain preventive services (78
FR 74865 and 79 FR 66800 through
66801). A list of services excluded from
the C–APC policy is included in
Addendum J to this proposed rule
(which is available via the Internet on
the CMS Web site).
The C–APC policy payment
methodology set forth in the CY 2014
OPPS/ASC final rule with comment
period for the C–APCs and modified
and implemented beginning in CY 2015
is summarized as follows (78 FR 74887
and 79 FR 66800):
Basic Methodology. As stated in the
CY 2015 OPPS/ASC final rule with
comment period, we define the C–APC
payment policy as including all covered
OPD services on a hospital outpatient
claim reporting a primary service that is
assigned to status indicator ‘‘J1’’,
excluding services that are not covered
OPD services or that cannot by statute
be paid for under the OPPS. Services
and procedures described by HCPCS
codes assigned to status indicator ‘‘J1’’
are assigned to C–APCs based on our
usual APC assignment methodology by
evaluating the geometric mean costs of
the primary service claims to establish
resource similarity and the clinical
characteristics of each procedure to
establish clinical similarity within each
APC.
In the CY 2016 OPPS/ASC final rule
with comment period, we expanded the
C–APC payment methodology to
qualifying extended assessment and
management encounters through the
‘‘Comprehensive Observation Services’’
C–APC (C–APC 8011). Services within
this APC are assigned status indicator
‘‘J2’’. Specifically, we make a payment
through C–APC 8011 for a claim that:
• Does not contain a procedure
described by a HCPCS code to which we
have assigned status indicator ‘‘T’’ that
is reported with a date of service on the
same day or 1 day earlier than the date
of service associated with services
described by HCPCS code G0378;
• Contains 8 or more units of services
described by HCPCS code G0378
(Observation services, per hour);
• Contains services provided on the
same date of service or 1 day before the
date of service for HCPCS code G0378
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that are described by one of the
following codes: HCPCS code G0379
(Direct referral of patient for hospital
observation care) on the same date of
service as HCPCS code G0378; CPT code
99281 (Emergency department visit for
the evaluation and management of a
patient (Level 1)); CPT code 99282
(Emergency department visit for the
evaluation and management of a patient
(Level 2)); CPT code 99283 (Emergency
department visit for the evaluation and
management of a patient (Level 3)); CPT
code 99284 (Emergency department
visit for the evaluation and management
of a patient (Level 4)); CPT code 99285
(Emergency department visit for the
evaluation and management of a patient
(Level 5)) or HCPCS code G0380 (Type
B emergency department visit (Level 1));
HCPCS code G0381 (Type B emergency
department visit (Level 2)); HCPCS code
G0382 (Type B emergency department
visit (Level 3)); HCPCS code G0383
(Type B emergency department visit
(Level 4)); HCPCS code G0384 (Type B
emergency department visit (Level 5));
CPT code 99291 (Critical care,
evaluation and management of the
critically ill or critically injured patient;
first 30–74 minutes); or HCPCS code
G0463 (Hospital outpatient clinic visit
for assessment and management of a
patient); and
• Does not contain services described
by a HCPCS code to which we have
assigned status indicator ‘‘J1’’.
The assignment of status indicator
‘‘J2’’ to a specific combination of
services performed in combination with
each other allows for all other OPPS
payable services and items reported on
the claim (excluding services that are
not covered OPD services or that cannot
by statute be paid for under the OPPS)
to be deemed adjunctive services
representing components of a
comprehensive service and resulting in
a single prospective payment for the
comprehensive service based on the
costs of all reported services on the
claim (80 FR 70333 through 70336).
Services included under the C–APC
payment packaging policy, that is,
services that are typically adjunctive to
the primary service and provided during
the delivery of the comprehensive
service, include diagnostic procedures,
laboratory tests, and other diagnostic
tests and treatments that assist in the
delivery of the primary procedure; visits
and evaluations performed in
association with the procedure;
uncoded services and supplies used
during the service; durable medical
equipment as well as prosthetic and
orthotic items and supplies when
provided as part of the outpatient
service; and any other components
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reported by HCPCS codes that represent
services that are provided during the
complete comprehensive service (78 FR
74865 and 79 FR 66800).
In addition, payment for hospital
outpatient department services that are
similar to therapy services and
delivered either by therapists or
nontherapists is included as part of the
payment for the packaged complete
comprehensive service. These services
that are provided during the
perioperative period are adjunctive
services and are deemed to be not
therapy services as described in section
1834(k) of the Act, regardless of whether
the services are delivered by therapists
or other nontherapist health care
workers. We have previously noted that
therapy services are those provided by
therapists under a plan of care in
accordance with section 1835(a)(2)(C)
and section 1835(a)(2)(D) of the Act and
are paid for under section 1834(k) of the
Act, subject to annual therapy caps as
applicable (78 FR 74867 and 79 FR
66800). However, certain other services
similar to therapy services are
considered and paid for as hospital
outpatient department services.
Payment for these nontherapy
outpatient department services that are
reported with therapy codes and
provided with a comprehensive service
is included in the payment for the
packaged complete comprehensive
service. We note that these services,
even though they are reported with
therapy codes, are hospital outpatient
department services and not therapy
services. Therefore, the requirement for
functional reporting under the
regulations at 42 CFR 410.59(a)(4) and
42 CFR 410.60(a)(4) does not apply. We
refer readers to the July 2016 OPPS
Change Request 9658 (Transmittal 3523)
for further instructions on reporting
these services in the context of a C–APC
service.
Items included in the packaged
payment provided in conjunction with
the primary service also include all
drugs, biologicals, and
radiopharmaceuticals, regardless of cost,
except those drugs with pass-through
payment status and SADs, unless they
function as packaged supplies (78 FR
74868 through 74869 and 74909 and 79
FR 66800). We refer readers to Section
50.2M, Chapter 15, of the Medicare
Benefit Policy Manual for a description
of our policy on SADs treated as
hospital outpatient supplies, including
lists of SADs that function as supplies
and those that do not function as
supplies.
We define each hospital outpatient
claim reporting a single unit of a single
primary service assigned to status
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indicator ‘‘J1’’ as a single ‘‘J1’’ unit
procedure claim (78 FR 74871 and 79
FR 66801). We sum all line item charges
for services included on the C–APC
claim, convert the charges to costs, and
calculate the comprehensive geometric
mean cost of one unit of each service
assigned to status indicator ‘‘J1’’. (We
note that we use the term
‘‘comprehensive’’ to describe the
geometric mean cost of a claim reporting
‘‘J1’’ service(s) or the geometric mean
cost of a C–APC, inclusive of all of the
items and services included in the C–
APC service payment bundle.) Charges
for services that would otherwise be
separately payable are added to the
charges for the primary service. This
process differs from our traditional cost
accounting methodology only in that all
such services on the claim are packaged
(except certain services as described
above). We apply our standard data
trims, which exclude claims with
extremely high primary units or extreme
costs.
The comprehensive geometric mean
costs are used to establish resource
similarity and, along with clinical
similarity, dictate the assignment of the
primary services to the C–APCs. We
establish a ranking of each primary
service (single unit only) to be assigned
to status indicator ‘‘J1’’ according to
their comprehensive geometric mean
costs. For the minority of claims
reporting more than one primary service
assigned to status indicator ‘‘J1’’ or units
thereof, we identify one ‘‘J1’’ service as
the primary service for the claim based
on our cost-based ranking of primary
services. We then assign these multiple
‘‘J1’’ procedure claims to the C–APC to
which the service designated as the
primary service is assigned. If the
reported ‘‘J1’’ services reported on a
claim map to different C–APCs, we
designate the ‘‘J1’’ service assigned to
the C–APC with the highest
comprehensive geometric mean cost as
the primary service for that claim. If the
reported multiple ‘‘J1’’ services on a
claim map to the same C–APC, we
designate the most costly service (at the
HCPCS code level) as the primary
service for that claim. This process
results in initial assignments of claims
for the primary services assigned to
status indicator ‘‘J1’’ to the most
appropriate C–APCs based on both
single and multiple procedure claims
reporting these services and clinical and
resource homogeneity.
Complexity Adjustments. We use
complexity adjustments to provide
increased payment for certain
comprehensive services. We apply a
complexity adjustment by promoting
qualifying paired ‘‘J1’’ service code
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combinations or paired code
combinations of ‘‘J1’’ services and
certain add-on codes (as described
further below) from the originating C–
APC (the C–APC to which the
designated primary service is first
assigned) to the next higher paying C–
APC in the same clinical family of C–
APCs. We apply this type of complexity
adjustment when the paired code
combination represents a complex,
costly form or version of the primary
service according to the following
criteria:
• Frequency of 25 or more claims
reporting the code combination
(frequency threshold); and
• Violation of the 2 times rule in the
originating C–APC (cost threshold).
These criteria identify paired code
combinations that occur commonly and
exhibit materially greater resource
requirements than the primary service.
The CY 2017 OPPS/ASC final rule with
comment period (81 FR 79582) included
a revision to the complexity adjustment
eligibility criteria. Specifically, we
finalized a policy to discontinue the
requirement that a code combination
(that qualifies for a complexity
adjustment by satisfying the frequency
and cost criteria thresholds described
above) also not create a 2 times rule
violation in the higher level or receiving
APC.
After designating a single primary
service for a claim, we evaluate that
service in combination with each of the
other procedure codes reported on the
claim assigned to status indicator ‘‘J1’’
(or certain add-on codes) to determine if
there are paired code combinations that
meet the complexity adjustment criteria.
For a new HCPCS code, we determine
initial C–APC assignment and
qualification for a complexity
adjustment using the best available
information, crosswalking the new
HCPCS code to a predecessor code(s)
when appropriate.
Once we have determined that a
particular code combination of ‘‘J1’’
services (or combinations of ‘‘J1’’
services reported in conjunction with
certain add-on codes) represents a
complex version of the primary service
because it is sufficiently costly,
frequent, and a subset of the primary
comprehensive service overall
according to the criteria described
above, we promote the claim including
the complex version of the primary
service as described by the code
combination to the next higher cost C–
APC within the clinical family unless
the primary service is already assigned
to the highest cost APC within the C–
APC clinical family or assigned to the
only C–APC in a clinical family. We do
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33575
not create new APCs with a
comprehensive geometric mean cost
that is higher than the highest geometric
mean cost (or only) C–APC in a clinical
family just to accommodate potential
complexity adjustments. Therefore, the
highest payment for any claim including
a code combination for services
assigned to a C–APC would be the
highest paying C–APC in the clinical
family (79 FR 66802).
We package payment for all add-on
codes into the payment for the C–APC.
However, certain primary service addon combinations may qualify for a
complexity adjustment. As noted in the
CY 2016 OPPS/ASC final rule with
comment period (80 FR 70331), all addon codes that can be appropriately
reported in combination with a base
code that describes a primary ‘‘J1’’
service are evaluated for a complexity
adjustment.
To determine which combinations of
primary service codes reported in
conjunction with an add-on code may
qualify for a complexity adjustment for
CY 2018, in this CY 2018 OPPS/ASC
proposed rule, we are proposing to
apply the frequency and cost criteria
thresholds discussed above, testing
claims reporting one unit of a single
primary service assigned to status
indicator ‘‘J1’’ and any number of units
of a single add-on code for the primary
J1 service. If the frequency and cost
criteria thresholds for a complexity
adjustment are met and reassignment to
the next higher cost APC in the clinical
family is appropriate (based on meeting
the criteria outlined above), we make a
complexity adjustment for the code
combination; that is, we reassign the
primary service code reported in
conjunction with the add-on code to the
next higher cost C–APC within the same
clinical family of C–APCs. As
previously stated, we package payment
for add-on codes into the C–APC
payment rate. If any add-on code
reported in conjunction with the ‘‘J1’’
primary service code does not qualify
for a complexity adjustment, payment
for the add-on service continues to be
packaged into the payment for the
primary service and is not reassigned to
the next higher cost C–APC. We list the
complexity adjustments proposed for
‘‘J1’’ and add-on code combinations for
CY 2018, along with all of the other
proposed complexity adjustments, in
Addendum J to this proposed rule
(which is available via the Internet on
the CMS Web site).
Addendum J to this proposed rule
includes the cost statistics for each code
combination that would qualify for a
complexity adjustment (including
primary code and add-on code
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combinations). Addendum J to this
proposed rule also contains summary
cost statistics for each of the paired code
combinations that describe a complex
code combination that would qualify for
a complexity adjustment and are
proposed to be reassigned to the next
higher cost C–APC within the clinical
family. The combined statistics for all
proposed reassigned complex code
combinations are represented by an
alphanumeric code with the first 4
digits of the designated primary service
followed by a letter. For example, the
proposed geometric mean cost listed in
Addendum J for the code combination
described by complexity adjustment
assignment 3320R, which is assigned to
C–APC 5224 (Level 4 Pacemaker and
Similar Procedures), includes all paired
code combinations that are proposed to
be reassigned to C–APC 5224 when CPT
code 33208 is the primary code.
Providing the information contained in
Addendum J to this proposed rule
allows stakeholders the opportunity to
better assess the impact associated with
the proposed reassignment of claims
with each of the paired code
combinations eligible for a complexity
adjustment.
(2) Proposed Additional C–APCs for CY
2018
For CY 2018 and subsequent years, in
this CY 2018 OPPS/ASC proposed rule,
we are proposing to continue to apply
the C–APC payment policy
methodology made effective in CY 2015
and updated with the implementation of
status indicator ‘‘J2’’ in CY 2016. A
discussion of the C–APC payment
policy methodology can be found at 81
FR 79583.
As a result of our annual review of the
services and APC assignments under the
OPPS, we are not proposing any
additional C–APCs to be paid under the
existing C–APC payment policy
beginning in CY 2018. Table 4 below
lists the proposed C–APCs for CY 2018,
all of which were established in past
rules. All C–APCs are displayed in
Addendum J to this proposed rule.
Addendum J to this proposed rule
(which is available via the Internet on
the CMS Web site) also contains all of
the data related to the C–APC payment
policy methodology, including the list
of proposed complexity adjustments
and other information.
TABLE 4—PROPOSED CY 2018 C–APCS
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C–APC
5072
5073
5091
5092
5093
5094
5112
5113
5114
5115
5116
5153
5154
5155
5164
5165
5166
5191
5192
5193
5194
5200
5211
5212
5213
5222
5223
5224
5231
5232
5244
5302
5303
5313
5331
5341
5361
5362
5373
5374
5375
5376
5377
5414
5415
5416
5431
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
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Clinical
family
CY 2018 APC title
Jkt 241001
Level 2 Excision/Biopsy/Incision and Drainage ............................................................
Level 3 Excision/Biopsy/Incision and Drainage ............................................................
Level 1 Breast/Lymphatic Surgery and Related Procedures .......................................
Level 2 Breast/Lymphatic Surgery and Related Procedures .......................................
Level 3 Breast/Lymphatic Surgery & Related Procedures ...........................................
Level 4 Breast/Lymphatic Surgery & Related Procedures ...........................................
Level 2 Musculoskeletal Procedures ............................................................................
Level 3 Musculoskeletal Procedures ............................................................................
Level 4 Musculoskeletal Procedures ............................................................................
Level 5 Musculoskeletal Procedures ............................................................................
Level 6 Musculoskeletal Procedures ............................................................................
Level 3 Airway Endoscopy ............................................................................................
Level 4 Airway Endoscopy ............................................................................................
Level 5 Airway Endoscopy ............................................................................................
Level 4 ENT Procedures ...............................................................................................
Level 5 ENT Procedures ...............................................................................................
Cochlear Implant Procedure .........................................................................................
Level 1 Endovascular Procedures ................................................................................
Level 2 Endovascular Procedures ................................................................................
Level 3 Endovascular Procedures ................................................................................
Level 4 Endovascular Procedures ................................................................................
Implantation Wireless PA Pressure Monitor .................................................................
Level 1 Electrophysiologic Procedures .........................................................................
Level 2 Electrophysiologic Procedures .........................................................................
Level 3 Electrophysiologic Procedures .........................................................................
Level 2 Pacemaker and Similar Procedures ................................................................
Level 3 Pacemaker and Similar Procedures ................................................................
Level 4 Pacemaker and Similar Procedures ................................................................
Level 1 ICD and Similar Procedures ............................................................................
Level 2 ICD and Similar Procedures ............................................................................
Level 4 Blood Product Exchange and Related Services ..............................................
Level 2 Upper GI Procedures .......................................................................................
Level 3 Upper GI Procedures .......................................................................................
Level 3 Lower GI Procedures .......................................................................................
Complex GI Procedures ................................................................................................
Abdominal/Peritoneal/Biliary and Related Procedures .................................................
Level 1 Laparoscopy & Related Services .....................................................................
Level 2 Laparoscopy & Related Services .....................................................................
Level 3 Urology & Related Services .............................................................................
Level 4 Urology & Related Services .............................................................................
Level 5 Urology & Related Services .............................................................................
Level 6 Urology & Related Services .............................................................................
Level 7 Urology & Related Services .............................................................................
Level 4 Gynecologic Procedures ..................................................................................
Level 5 Gynecologic Procedures ..................................................................................
Level 6 Gynecologic Procedures ..................................................................................
Level 1 Nerve Procedures ............................................................................................
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EBIDX
EBIDX
BREAS
BREAS
BREAS
BREAS
ORTHO
ORTHO
ORTHO
ORTHO
ORTHO
AENDO
AENDO
AENDO
ENTXX
ENTXX
COCHL
VASCX
VASCX
VASCX
VASCX
WPMXX
EPHYS
EPHYS
EPHYS
AICDP
AICDP
AICDP
AICDP
AICDP
SCTXX
GIXXX
GIXXX
GIXXX
GIXXX
GIXXX
LAPXX
LAPXX
UROXX
UROXX
UROXX
UROXX
UROXX
GYNXX
GYNXX
GYNXX
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33577
TABLE 4—PROPOSED CY 2018 C–APCS—Continued
C–APC
5432
5462
5463
5464
5471
5491
5492
5493
5494
5495
5503
5504
5627
5881
8011
Clinical
family
CY 2018 APC title
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
Level 2 Nerve Procedures ............................................................................................
Level 2 Neurostimulator & Related Procedures ...........................................................
Level 3 Neurostimulator & Related Procedures ...........................................................
Level 4 Neurostimulator & Related Procedures ...........................................................
Implantation of Drug Infusion Device ............................................................................
Level 1 Intraocular Procedures .....................................................................................
Level 2 Intraocular Procedures .....................................................................................
Level 3 Intraocular Procedures .....................................................................................
Level 4 Intraocular Procedures .....................................................................................
Level 5 Intraocular Procedures .....................................................................................
Level 3 Extraocular, Repair, and Plastic Eye Procedures ...........................................
Level 4 Extraocular, Repair, and Plastic Eye Procedures ...........................................
Level 7 Radiation Therapy ............................................................................................
Ancillary Outpatient Services When Patient Dies .........................................................
Comprehensive Observation Services ..........................................................................
NERVE
NSTIM
NSTIM
NSTIM
PUMPS
INEYE
INEYE
INEYE
INEYE
INEYE
EXEYE
EXEYE
RADTX
N/A
N/A
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C–APC Clinical Family Descriptor Key:
AENDO = Airway Endoscopy.
AICDP = Automatic Implantable Cardiac Defibrillators, Pacemakers, and Related Devices.
BREAS = Breast Surgery.
COCHL = Cochlear Implant.
EBIDX = Excision/Biopsy/Incision and Drainage.
ENTXX = ENT Procedures.
EPHYS = Cardiac Electrophysiology.
EXEYE = Extraocular Ophthalmic Surgery.
GIXXX = Gastrointestinal Procedures.
GYNXX = Gynecologic Procedures.
INEYE = Intraocular Surgery.
LAPXX = Laparoscopic Procedures.
NERVE = Nerve Procedures.
NSTIM = Neurostimulators.
ORTHO = Orthopedic Surgery.
PUMPS = Implantable Drug Delivery Systems.
RADTX = Radiation Oncology.
SCTXX = Stem Cell Transplant.
UROXX = Urologic Procedures.
VASCX = Vascular Procedures.
WPMXX = Wireless PA Pressure Monitor.
(3) Brachytherapy Insertion Procedures
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79584), we
finalized 25 new C–APCs. Some of the
HCPCS codes assigned to the C–APCs
established for CY 2017 described
surgical procedures for inserting
brachytherapy catheters/needles and
other related brachytherapy procedures
such as the insertion of tandem and/or
ovoids and the insertion of Heyman
capsules. In the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79583), we stated that we received
public comments which noted that
claims that included several insertion
codes for brachytherapy devices
(namely CPT codes 57155 (Insertion of
uterine tandem and/or vaginal ovoids
for clinical brachytherapy); 20555
(Placement of needles or catheters into
muscle and/or soft tissue for subsequent
interstitial radioelement application (at
the time of or subsequent to the
procedure)); 31643 (Bronchoscopy, rigid
or flexible, including fluoroscopic
guidance, when performed; with
placement of catheter(s) for intracavitary
radioelement application); 41019
(Placement of needles, catheters, or
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other device(s) into the head and/or
neck region (percutaneous, transoral, or
transnasal) for subsequent interstitial
radioelement application); 43241
(Esophagogastroduodenoscopy, flexible,
transoral; with insertion of intraluminal
tube catheter); 55920 (Placement of
needles or catheters into pelvic organs
and/or genitalia (except prostate) for
subsequent interstitial radioelement
application); and 58346 (Insertion of
Heyman capsules for clinical
brachytherapy)) often did not also
contain a brachytherapy treatment
delivery code (CPT codes 77750 through
77799). The commenters concluded that
brachytherapy delivery charges are
being underrepresented in ratesetting
under the C–APC methodology because
a correctly coded claim should typically
include an insertion and treatment
delivery code combination. The
commenters stated that the insertion
procedure and brachytherapy treatment
delivery generally occur on the same
day or within the same week and
therefore the services should appear on
a claim together. We indicated that we
would not exclude claims from the CY
2017 ratesetting calculation because we
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generally do not remove claims from the
claims accounting when stakeholders
believe that hospitals included incorrect
information on some claims. However,
we stated that we would examine the
claims for the brachytherapy insertion
codes in question and determine if any
future adjustment to the methodology
(or possibly code edits) would be
appropriate.
We analyzed the claims that include
brachytherapy insertion codes assigned
to status indicator ‘‘J1’’ and that
received payment through a C–APC, and
we determined that several of these
codes are frequently billed without an
associated brachytherapy treatment
code. As mentioned above, stakeholders
have expressed concerns that using
claims for ratesetting for brachytherapy
insertion procedures that do not also
include a brachytherapy treatment code
may not capture all of the costs
associated with the insertion procedure.
To address this issue and base payment
on claims for the most common clinical
scenario, for CY 2018 and subsequent
years, we are establishing a code edit
that requires a brachytherapy treatment
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code when a brachytherapy insertion
code is billed.
As noted in section II.A.2.c. of this
proposed rule, we also are proposing to
delete composite APC 8001 (LDR
Prostate Brachytherapy Composite) and
assign HCPCS code 55875
(Transperineal placement of needles or
catheters into prostate for interstitial
radioelement application, with or
without cystoscopy) to status indicator
‘‘J1’’ and to provide payment for this
procedure through the C–APC payment
methodology similar to the payment
methodology for other surgical insertion
procedures related to brachytherapy.
Specifically, when HCPCS code 55875
is the primary service reported on a
hospital outpatient claim, we are
proposing to package payments for all
adjunctive services reported on the
claim into the payment for HCPCS code
55875. We are proposing to assign
HCPCS code 55875 to C–APC 5375
(Level 5 Urology and Related Services).
The code edit for claims with
brachytherapy services described above
that will be effective January 1, 2018
will require the brachytherapy
application HCPCS code 77778
(Interstitial radiation source application;
complex) to be included on the claim
with the brachytherapy insertion
procedure (HCPCS code 55875). The
brachytherapy insertion codes that will
be required to be billed with a
brachytherapy treatment code are listed
in Table 5 listed below.
TABLE 5—PROPOSED BRACHYTHERAPY INSERTION PROCEDURES ASSIGNED TO STATUS INDICATOR ‘‘J1’’
HCPCS code
Long descriptor
19296 ...........
Placement of radiotherapy afterloading expandable catheter (single or multichannel) into the breast for interstitial radioelement
application following partial mastectomy, includes imaging guidance; on date separate from partial mastectomy.
Placement of radiotherapy after loading brachytherapy catheters (multiple tube and button type) into the breast for interstitial
radioelement application following (at the time of or subsequent to) partial mastectomy, includes imaging guidance.
Unlisted procedure, breast.
Placement of needles or catheters into muscle and/or soft tissue for subsequent interstitial radioelement application (at the time
of or subsequent to the procedure).
Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with placement of catheter(s) for intracavitary
radioelement application.
Placement of needles, catheters, or other device(s) into the head and/or neck region (percutaneous, transoral, or transnasal) for
subsequent interstitial radioelement application.
Esophagogastroduodenoscopy, flexible, transoral; with insertion of intraluminal tube catheter.
Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy.
Placement of needles or catheters into pelvic organs and/or genitalia (except prostate) for subsequent interstitial radioelement
application.
Insertion of uterine tandem and/or vaginal ovoids for clinical brachytherapy.
Insertion of Heyman capsules for clinical brachytherapy.
19298 ...........
19499 ...........
20555 ...........
31643 ...........
41019 ...........
43241 ...........
55875 ...........
55920 ...........
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57155 ...........
58346 ...........
(4) C–APC 5627 (Level 7 Radiation
Therapy) Stereotactic Radiosurgery
(SRS)
Stereotactic radiosurgery (SRS) is a
type of radiation therapy that targets
multiple beams of radiation to precisely
deliver radiation to a brain tumor while
sparing the surrounding normal tissue.
SRS treatment can be delivered by
Cobalt-60-based (also referred to as
gamma knife) technology or robotic
linear accelerator-based (LINAC)-based
technology. As stated in the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70336), section 634 of the
American Taxpayer Relief Act (ATRA)
of 2012 (Pub. L. 112–240) amended
section 1833(t)(16) of the Act by adding
a new subparagraph (D) to require that
OPPS payments for Cobalt-60-based SRS
be reduced to equal that of payments for
LINAC-based SRS for covered OPD
services furnished on or after April 1,
2013. Because section 1833(t)(16)(D) of
the Act requires equal payment for SRS
treatment delivered by Cobalt-60-based
or LINAC-based technology, the two
types of services involving SRS delivery
instruments (which are described by
HCPCS code 77371 (Radiation treatment
delivery, stereotactic radiosurgery
[SRS], complete course of treatment
cranial lesion(s) consisting of 1 session;
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multi-source Cobalt 60-based) and
HCPCS code 77372 (Linear acceleratorbased)) are assigned to the same C–APC
(C–APC 5627 Level 7 Radiation
Therapy).
In the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70336), we
stated that we had identified differences
in the billing patterns for SRS
procedures delivered using Cobalt-60based and LINAC-based technologies. In
particular, our claims data analysis
revealed that services involving SRS
delivered by Cobalt-60-based
technologies (as described by HCPCS
code 77371) typically included SRS
treatment planning services (for
example, imaging studies, radiation
treatment aids, and treatment planning)
and the actual deliveries of SRS
treatment on the same date of service
and reported on the same claim. In
contrast, claims data analysis results
revealed that services involving SRS
delivered by LINAC-based technologies
(as described by HCPCS code 77372)
frequently included services related to
SRS treatment (for example, imaging
studies, radiation treatment aids, and
treatment planning) that were provided
on different dates of service and
reported on claims separate from the
actual delivery of SRS treatment.
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We stated in the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70336) that the intent of the C–APC
policy is to package payment for all
services adjunctive to the primary ‘‘J1’’
procedure and that we believed that all
essential planning and preparation
services related to the SRS treatment are
adjunctive to the SRS treatment delivery
procedure. Therefore, payment for these
adjunctive services should be packaged
into the C–APC payment for the SRS
treatment instead of reported on a
different claim and paid separately. To
identify services that are adjunctive to
the primary SRS treatment described by
HCPCS codes 77371 and 77372, but
reported on a different claim, we
established modifier ‘‘CP’’ which
became effective in CY 2016 and
required the use of the modifier for CY
2016 and CY 2017.
To ensure appropriate ratesetting for
the SRS C–APC, we believed it was
necessary to unbundle payment for the
adjunctive services for CY 2016 and CY
2017. Therefore, we finalized a policy to
change the payment for SRS treatment
for the 10 SRS planning and preparation
services identified in our claims data
(HCPCS codes 70551, 70552, 70553,
77011, 77014, 77280, 77285, 77290,
77295, and 77336) that were reported
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differentially using HCPCS codes 77371
and 77372 both on the same claim as the
SRS services and on claims 1 month
prior to the delivery of SRS services.
These codes were removed from the
geometric mean cost calculations for
C–APC 5627. In addition, for CY 2016
and CY 2017, we provided separate
payment for the 10 planning and
preparation services adjunctive to the
delivery of the SRS treatment using
either the Cobalt-60-based or LINACbased technology, even when the
planning service was included on the
same claim as the primary ‘‘J1’’ SRS
treatment service. The use of the
modifier ‘‘CP’’ was not required to
identify these 10 planning and
preparation codes.
The data collection period for SRS
claims with modifier ‘‘CP’’ began on
January 1, 2016 and concludes on
December 31, 2017. Based on our
analysis of preliminary data collected
with modifier ‘‘CP’’, we have identified
some additional services that are
adjunctive to the primary SRS treatment
and reported on a different claim
outside of the 10 SRS planning and
preparation codes that were removed
from the SRS C–APC costs calculations
and paid separately.
However, the ‘‘CP’’ modifier has been
used by a small number of providers
since its establishment. In addition, our
analysis showed that several of the
HCPCS codes that were billed with
modifier ‘‘CP’’ belonged to the group of
10 SRS planning and preparation codes
that we pay separately and do not
require the use of modifier ‘‘CP’’. Also,
some providers erroneously included
the modifier when reporting the HCPCS
code for the delivery of the LINACbased SRS treatment. As stated above,
the data collection period for SRS
claims with modifier ‘‘CP’’ was set to
conclude on December 31, 2017.
Accordingly, for CY 2018, we are
deleting this modifier and discontinuing
its required use.
For CY 2018, we also are proposing to
continue to make separate payments for
the 10 planning and preparation
services adjunctive to the delivery of the
SRS treatment using either the Cobalt60-based or LINAC-based technology
when furnished to a beneficiary within
1 month of the SRS treatment. The
continued separate payment of these
services will allow us to complete our
analysis of the claims data including
modifier ‘‘CP’’ from both CY 2016 and
CY 2017 claims. As stated in the CY
2017 OPPS/ASC final rule with
comment period (81 FR 79583), we will
consider in the future whether
repackaging all adjunctive services
(planning, preparation, and imaging,
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among others) back into cranial single
session SRS is appropriate.
We are inviting public comments on
these proposals.
(5) Proposed Complexity Adjustment for
Blue Light Cystoscopy Procedures
As discussed in prior OPPS/ASC final
rules with comment period, and most
recently in the CY 2017 OPPS/ASC final
rule with comment period (81 FR
79668), we continue to believe that
Cysview® (hexaminolevulinate HCl)
(described by HCPCS code C9275) is a
drug that functions as a supply in a
diagnostic test or procedure and is
therefore packaged with payment for the
primary procedure. In addition, as
discussed in section II.A.2.b.(1) of this
proposed rule, drugs that are not eligible
for pass-through payment are always
packaged when billed with a
comprehensive service. To maintain the
integrity of a prospective payment
system, we believe it is generally not
appropriate to allow exceptions to our
drug packaging policy or comprehensive
APC policy that would result in separate
payment for the drug based on the
product’s ASP+6 percent payment rate.
While we are not proposing to pay
separately for Cysview®, we have heard
concerns from stakeholders that the
payment for blue light cystoscopy
procedures involving Cysview® may be
creating a barrier to access reasonable
and necessary care for which there may
not be a clinically comparable
alternative. Therefore, we are revisiting
our payment policy for blue light
cystoscopy procedures. As described in
more detail below, we believe certain
code combinations for blue light
cystoscopy procedures should be
eligible to qualify for a complexity
adjustment, given the unique properties
of the procedure and resource costs.
Traditionally, white light (or
standard) cystoscopy, typically
performed by urologists, has been the
gold standard for diagnosing bladder
cancer. Enhanced bladder cancer
diagnostics, such as narrow band
imaging or blue light cystoscopy,
increase tumor detection in nonmuscle
invasive bladder cancer over white light
cystoscopy alone, thus enabling more
precise tumor removal by the urologist.
Blue light cystoscopy can only be
performed after performance of white
light cystoscopy. Because blue light
cystoscopy requires specialized imaging
equipment to view cellular uptake of the
dye that is not otherwise used in white
light cystoscopy procedures, some
practitioners consider blue light
cystoscopy to be a distinct and
adjunctive procedure to white light
cystoscopy. However, the current CPT
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coding structure for cystoscopy
procedures does not identify blue light
cystoscopy in the coding descriptions
separate from white light cystoscopy.
Therefore, the existing cystoscopy CPT
codes do not distinguish cystoscopy
procedures involving only white light
cystoscopy from those involving both
white and blue light procedures, which
require additional resources compared
to white light cystoscopy alone.
After discussion with our clinical
advisors (including a urologist), we
believe that blue light cystoscopy
represents an additional elective but
distinguishable service as compared to
white light cystoscopy that in some
cases may allow greater detection of
bladder tumors in beneficiaries relative
to white light cystoscopy alone. Given
the additional equipment, supplies,
operating room time, and other
resources required to perform blue light
cystoscopy in addition to white light
cystoscopy, for CY 2018, we are
proposing to create a new HCPCS Ccode to describe blue light cystoscopy
(HCPCS code C97XX (Adjunctive blue
light cystoscopy with fluorescent
imaging agent (List separately in
addition to code for primary procedure))
and to allow for a complexity
adjustment to APC 5374 (Level 4
Urology and Related Services) for
certain code combinations in APC 5373
(Level 3 Urology and Related Services).
Specifically, to determine which code
pair combinations of proposed new
HCPCS code C97XX and cystoscopy
procedure would qualify for a
complexity adjustment, we first
crosswalked the costs of HCPCS code
C9275 (Hexaminolevulinate hcl) to the
proposed new HCPCS code C97XX
assigned status indicator ‘‘N’’. Next, we
identified the procedure codes used to
describe white light cystoscopy of the
bladder which include the following
CPT codes and APC assignments:
• APC 5372 (Level 2 Urology and
Related Services)
b CPT code 52000
• APC 5373 (Level 3 Urology and
Related Services
b CPT code 52204
b CPT code 52214
b CPT code 52224
• APC 5374 (Level 4 Urology and
Related Services)
b CPT code 52234
b CPT code 52235
• APC 5375 (Level 5 Urology and
Related Services)
b CPT code 52240
Because APC 5372 is not a C–APC,
cystoscopy procedures assigned to Level
2 Urology are not eligible for a
complexity adjustment, and therefore,
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we did not analyze these codes to
determine whether they were eligible
for a complexity adjustment. We
modeled the data to determine which
code pair combinations exceed the
claim frequency and cost threshold in
APC 5373, APC 5374, and APC 5375,
which are all C–APCs. Results of our
analysis indicate that the code pair
combination of proposed new HCPCS
code C97XX and cystoscopy procedures
assigned to APC 5373 would be eligible
for a complexity adjustment based on
current criteria and cost data because
they meet the frequency and cost
criteria thresholds. Likewise, our results
indicate that the combination of
proposed new HCPCS code C97XX and
cystoscopy procedures assigned to APC
5374 and APC 5375 would not qualify
for a complexity adjustment because
they do not meet the frequency and cost
criteria thresholds.
Under the C–APC policy, blue light
cystoscopy would be packaged, but
when performed with a cystoscopy
procedure in APC 5373 and reported
with proposed new HCPCS code C97XX
in addition to the cystoscopy CPT code,
there would be a complexity adjustment
to the next higher level APC in the
series, resulting in a higher payment
than for the white light cystoscopy
procedure alone. That is, if the code pair
combination of proposed new HCPCS
code C97XX with CPT code 52204,
52214, or 52224 is reported on a claim,
the claim will qualify for payment
reassignment from APC 5373 to APC
5374. We plan to track the utilization
and the costs associated with white
light/blue light cystoscopy procedure
combinations that will receive a
complexity adjustment.
We are inviting public comments on
our CY 2018 proposal to allow for a
complexity adjustment when a white
light followed by blue light cystoscopy
procedure is performed. In addition, we
are seeking public comments on
whether alternative procedures, such as
narrow band imaging, may be
disadvantaged by this proposed policy.
(6) Analysis of C–APC Packaging under
the OPPS
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79584), we
accepted a recommendation made at the
August 22, 2016 HOP Panel meeting to
analyze the effects of C–APCs. The HOP
panel recommendation did not
elucidate specific concerns with the C–
APC policy or provide detailed
recommendations on particular aspects
of the policy to analyze. Therefore, we
took a broad approach in studying
HCPCS codes and APCs subject to the
C–APC policy to determine whether
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aberrant trends in the data existed.
Overall, we observed no such
aberrancies and believe that the C–APC
policy is working as intended.
Specifically, using OPPS claims data
from the CY 2016 final rule, the CY
2017 final rule, and the CY 2018
proposed rule, which reflect an
observation period of CY 2014 to CY
2016, we examined the effects of C–
APCs and their impact on OPPS
payments. We started with all hospital
outpatient claims billed on the 13X
claim-type and from that, separately
identified HCPCS codes and APCs that
were subject to the comprehensive
methodology in CYs 2015 and 2016
(that is, HCPCS codes or APCs assigned
status indicator ‘‘J1’’ or ‘‘J2’’). Next, we
analyzed the claims to create a subset of
claims that contain the HCPCS codes
and APCs that were subject to the
comprehensive methodology. Using the
claims noted above, we analyzed claim
frequency, line frequency, number of
billing units, and the total OPPS
payment between CYs 2014 and 2016
for each HCPCS and APC that had been
previously identified. In reviewing the
cost statistics for HCPCS codes for
procedures with status indicator ‘‘S’’,
‘‘T’’, or ‘‘V’’ in CY 2014 that were
assigned to a C–APC in either CY 2015
or CY 2016, overall, we observed an
increase in claim line frequency, units
billed, and Medicare payment, which
suggest that the C–APC payment policy
did not adversely affect access or reduce
payments to hospitals. Decreases in
these cost statistics would suggest our
comprehensive packaging logic is not
working as intended and/or the C–APC
payment rates were inadequate,
resulting in lower volume due to
migration of services to other settings or
the cessation of providing these
services. Likewise, because the cost
statistics of major separately payable
codes (that is, HCPCS codes with status
indicator ‘‘S’’, ‘‘T’’, or ‘‘V’’) that were
packaged into a C–APC prospectively
were consistent with the cost statistics
of the codes packaged on the claim in
actuality, indicate that costs were
appropriately redistributed, we believe
the C–APC payment methodology is
working as intended.
c. Proposed Calculation of Composite
APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/
ASC final rule with comment period (72
FR 66613), we believe it is important
that the OPPS enhance incentives for
hospitals to provide necessary, high
quality care as efficiently as possible.
For CY 2008, we developed composite
APCs to provide a single payment for
groups of services that are typically
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performed together during a single
clinical encounter and that result in the
provision of a complete service.
Combining payment for multiple,
independent services into a single OPPS
payment in this way enables hospitals
to manage their resources with
maximum flexibility by monitoring and
adjusting the volume and efficiency of
services themselves. An additional
advantage to the composite APC model
is that we can use data from correctly
coded multiple procedure claims to
calculate payment rates for the specified
combinations of services, rather than
relying upon single procedure claims
which may be low in volume and/or
incorrectly coded. Under the OPPS, we
currently have composite policies for
low dose rate (LDR) prostate
brachytherapy, mental health services,
and multiple imaging services. We refer
readers to the CY 2008 OPPS/ASC final
rule with comment period for a full
discussion of the development of the
composite APC methodology (72 FR
66611 through 66614 and 66650 through
66652) and the CY 2012 OPPS/ASC
final rule with comment period (76 FR
74163) for more recent background.
In this CY 2018 OPPS/ASC proposed
rule, for CY 2018 and subsequent years,
we are proposing to continue our
composite APC payment policies for
mental health services and multiple
imaging services, as discussed below.
As discussed in section II.A.2.b. of this
proposed rule, we are proposing to
assign CPT code 55875 (Transperineal
placement of needs or catheters into
prostate for interstitial radioelement
application, with or without cystoscopy)
a status indicator of ‘‘J1’’ and assign it
to a C–APC. In conjunction with this
proposal, we also are proposing to
delete the low dose rate (LDR) prostate
brachytherapy composite APC for CY
2018 and subsequent years.
(1) Mental Health Services Composite
APC
In this CY 2018 OPPS/ASC proposed
rule, we are proposing to continue our
longstanding policy of limiting the
aggregate payment for specified less
resource-intensive mental health
services furnished on the same date to
the payment for a day of partial
hospitalization services provided by a
hospital, which we consider to be the
most resource-intensive of all outpatient
mental health services. We refer readers
to the April 7, 2000 OPPS final rule
with comment period (65 FR 18452
through 18455) for the initial discussion
of this longstanding policy and the CY
2012 OPPS/ASC final rule with
comment period (76 FR 74168) for more
recent background.
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In the CY 2017 OPPS/ASC final rule
(81 FR 79588 through 79589), we
finalized a policy to combine the
existing Level 1 and Level 2 hospitalbased PHP APCs into a single hospitalbased PHP APC and, thereby,
discontinue APCs 5861 (Level 1 Partial
Hospitalization (3 services) for HospitalBased PHPs) and 5862 (Level 2 Partial
Hospitalization (4 or more services) for
Hospital-Based PHPs) and replace them
with new APC 5863 (Partial
Hospitalization (3 or more services per
day)). For CY 2018, and subsequent
years, we are proposing that when the
aggregate payment for specified mental
health services provided by one hospital
to a single beneficiary on a single date
of service, based on the payment rates
associated with the APCs for the
individual services, exceeds the
maximum per diem payment rate for
partial hospitalization services provided
by a hospital, those specified mental
health services would be paid through
composite APC 8010 (Mental Health
Services Composite) for CY 2018. In
addition, we are proposing to set the
payment rate for composite APC 8010
for CY 2018 at the same payment rate
that we are proposing for APC 5863,
which is the maximum partial
hospitalization per diem payment rate
for a hospital, and that the hospital
continue to be paid the payment rate for
composite APC 8010. Under this policy,
the I/OCE would continue to determine
whether to pay for these specified
mental health services individually, or
to make a single payment at the same
payment rate established for APC 5863
for all of the specified mental health
services furnished by the hospital on
that single date of service. We continue
to believe that the costs associated with
administering a partial hospitalization
program at a hospital represent the most
resource intensive of all outpatient
mental health services. Therefore, we do
not believe that we should pay more for
mental health services under the OPPS
than the highest partial hospitalization
per diem payment rate for hospitals.
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(2) Multiple Imaging Composite APCs
(APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide
a single payment each time a hospital
submits a claim for more than one
imaging procedure within an imaging
family on the same date of service, in
order to reflect and promote the
efficiencies hospitals can achieve when
performing multiple imaging procedures
during a single session (73 FR 41448
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through 41450). We utilize three
imaging families based on imaging
modality for purposes of this
methodology: (1) Ultrasound; (2)
computed tomography (CT) and
computed tomographic angiography
(CTA); and (3) magnetic resonance
imaging (MRI) and magnetic resonance
angiography (MRA). The HCPCS codes
subject to the multiple imaging
composite policy and their respective
families are listed in Table 12 of the CY
2014 OPPS/ASC final rule with
comment period (78 FR 74920 through
74924).
While there are three imaging
families, there are five multiple imaging
composite APCs due to the statutory
requirement under section 1833(t)(2)(G)
of the Act that we differentiate payment
for OPPS imaging services provided
with and without contrast. While the
ultrasound procedures included under
the policy do not involve contrast, both
CT/CTA and MRI/MRA scans can be
provided either with or without
contrast. The five multiple imaging
composite APCs established in CY 2009
are:
• APC 8004 (Ultrasound Composite);
• APC 8005 (CT and CTA without
Contrast Composite);
• APC 8006 (CT and CTA with
Contrast Composite);
• APC 8007 (MRI and MRA without
Contrast Composite); and
• APC 8008 (MRI and MRA with
Contrast Composite).
We define the single imaging session
for the ‘‘with contrast’’ composite APCs
as having at least one or more imaging
procedures from the same family
performed with contrast on the same
date of service. For example, if the
hospital performs an MRI without
contrast during the same session as at
least one other MRI with contrast, the
hospital will receive payment based on
the payment rate for APC 8008, the
‘‘with contrast’’ composite APC.
We make a single payment for those
imaging procedures that qualify for
payment based on the composite APC
payment rate, which includes any
packaged services furnished on the
same date of service. The standard
(noncomposite) APC assignments
continue to apply for single imaging
procedures and multiple imaging
procedures performed across families.
For a full discussion of the development
of the multiple imaging composite APC
methodology, we refer readers to the CY
2009 OPPS/ASC final rule with
comment period (73 FR 68559 through
68569).
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In this CY 2018 OPPS/ASC proposed
rule, we are proposing, for CY 2018 and
subsequent years, to continue to pay for
all multiple imaging procedures within
an imaging family performed on the
same date of service using the multiple
imaging composite APC payment
methodology. We continue to believe
that this policy would reflect and
promote the efficiencies hospitals can
achieve when performing multiple
imaging procedures during a single
session.
The proposed CY 2018 payment rates
for the five multiple imaging composite
APCs (APCs 8004, 8005, 8006, 8007,
and 8008) are based on proposed
geometric mean costs calculated from a
partial year of CY 2016 claims available
for this CY 2018 OPPS/ASC proposed
rule that qualified for composite
payment under the current policy (that
is, those claims reporting more than one
procedure within the same family on a
single date of service). To calculate the
proposed geometric mean costs, we
used the same methodology that we
used to calculate the final geometric
mean costs for these composite APCs
since CY 2014, as described in the CY
2014 OPPS/ASC final rule with
comment period (78 FR 74918). The
imaging HCPCS codes referred to as
‘‘overlap bypass codes’’ that we
removed from the bypass list for
purposes of calculating the proposed
multiple imaging composite APC
geometric mean costs, in accordance
with our established methodology as
stated in the CY 2014 OPPS/ASC final
rule with comment period (78 FR
74918), are identified by asterisks in
Addendum N to this CY 2018 OPPS/
ASC proposed rule (which is available
via the Internet on the CMS Web site)
and are discussed in more detail in
section II.A.1.b. of this CY 2018 OPPS/
ASC proposed rule.
For this CY 2018 OPPS/ASC proposed
rule, we were able to identify
approximately 634,918 ‘‘single session’’
claims out of an estimated 1.7 million
potential claims for payment through
composite APCs from our ratesetting
claims data, which represents
approximately 36 percent of all eligible
claims, to calculate the proposed CY
2018 geometric mean costs for the
multiple imaging composite APCs.
Table 6 of this CY 2018 OPPS/ASC
proposed rule lists the proposed HCPCS
codes that would be subject to the
multiple imaging composite APC policy
and their respective families and
approximate composite APC proposed
geometric mean costs for CY 2018.
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
TABLE 6—PROPOSED OPPS IMAGING FAMILIES AND MULTIPLE IMAGING PROCEDURE COMPOSITE APCS
Family 1—Ultrasound
Proposed CY 2018 APC 8004 (Ultrasound Composite)
76700 ........................................................................................................
Us exam, abdom, complete.
76705
76770
76776
76831
76856
76857
Echo exam of abdomen.
Us exam abdo back wall, comp.
Us exam k transpl w/Doppler.
Echo exam, uterus.
Us exam, pelvic, complete.
Us exam, pelvic, limited.
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
Family 2—CT and CTA with and without Contrast
Proposed CY 2018 APC 8005 (CT and CTA without Contrast
Composite)*
70450
70480
70486
70490
71250
72125
72128
72131
72192
73200
73700
74150
74261
74176
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
Proposed CY 2018 APC 8006 (CT and CTA with Contrast Composite)
70487
70460
70470
70481
70482
70488
70491
70492
70496
70498
71260
71270
71275
72126
72127
72129
72130
72132
72133
72191
72193
72194
73201
73202
73206
73701
73702
73706
74160
74170
74175
74262
75635
74177
74178
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
........................................................................................................
Proposed CY 2018 Approximate APC Geometric Mean Cost = $280
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
head/brain w/o dye.
orbit/ear/fossa w/o dye.
maxillofacial w/o dye.
soft tissue neck w/o dye.
thorax w/o dye.
neck spine w/o dye.
chest spine w/o dye.
lumbar spine w/o dye.
pelvis w/o dye.
upper extremity w/o dye.
lower extremity w/o dye.
abdomen w/o dye.
colonography, w/o dye.
angio abd & pelvis.
Proposed CY 2018 Approximate APC Geometric Mean Cost = $503
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
Ct
maxillofacial w/dye.
head/brain w/dye.
head/brain w/o & w/dye.
orbit/ear/fossa w/dye.
orbit/ear/fossa w/o & w/dye.
maxillofacial w/o & w/dye.
soft tissue neck w/dye.
sft tsue nck w/o & w/dye.
angiography, head.
angiography, neck.
thorax w/dye.
thorax w/o & w/dye.
angiography, chest.
neck spine w/dye.
neck spine w/o & w/dye.
chest spine w/dye.
chest spine w/o & w/dye.
lumbar spine w/dye.
lumbar spine w/o & w/dye.
angiograph pelv w/o & w/dye.
pelvis w/dye.
pelvis w/o & w/dye.
upper extremity w/dye.
uppr extremity w/o & w/dye.
angio upr extrm w/o & w/dye.
lower extremity w/dye.
lwr extremity w/o & w/dye.
angio lwr extr w/o & w/dye.
abdomen w/dye.
abdomen w/o & w/dye.
angio abdom w/o & w/dye.
colonography, w/dye.
angio abdominal arteries.
angio abd & pelv w/contrast.
angio abd & pelv 1+ regns.
* If a ‘‘without contrast’’ CT or CTA procedure is performed during the same session as a ‘‘with contrast’’ CT or CTA procedure, the I/OCE assigns the procedure to APC 8006 rather than APC 8005.
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33583
TABLE 6—PROPOSED OPPS IMAGING FAMILIES AND MULTIPLE IMAGING PROCEDURE COMPOSITE APCS—Continued
Family 3—MRI and MRA with and without Contrast
Proposed CY 2018 APC 8007 (MRI and MRA without Contrast
Composite) *
70336 ........................................................................................................
70540 ........................................................................................................
70544 ........................................................................................................
70547 ........................................................................................................
70551 ........................................................................................................
70554 ........................................................................................................
71550 ........................................................................................................
72141 ........................................................................................................
72146 ........................................................................................................
72148 ........................................................................................................
72195 ........................................................................................................
73218 ........................................................................................................
73221 ........................................................................................................
73718 ........................................................................................................
73721 ........................................................................................................
74181 ........................................................................................................
75557 ........................................................................................................
75559 ........................................................................................................
C8901 .......................................................................................................
C8904 .......................................................................................................
C8907 .......................................................................................................
C8910 .......................................................................................................
C8913 .......................................................................................................
C8919 .......................................................................................................
C8932 .......................................................................................................
C8935 .......................................................................................................
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
Proposed CY 2018 APC 8008 (MRI and MRA with Contrast
Composite)
70549 ........................................................................................................
70542 ........................................................................................................
70543 ........................................................................................................
70545 ........................................................................................................
70546 ........................................................................................................
70547 ........................................................................................................
70548 ........................................................................................................
70552 ........................................................................................................
70553 ........................................................................................................
71551 ........................................................................................................
71552 ........................................................................................................
72142 ........................................................................................................
72147 ........................................................................................................
72149 ........................................................................................................
72156 ........................................................................................................
72157 ........................................................................................................
72158 ........................................................................................................
72196 ........................................................................................................
72197 ........................................................................................................
73219 ........................................................................................................
73220 ........................................................................................................
73222 ........................................................................................................
73223 ........................................................................................................
73719 ........................................................................................................
73720 ........................................................................................................
73722 ........................................................................................................
73723 ........................................................................................................
74182 ........................................................................................................
74183 ........................................................................................................
75561 ........................................................................................................
75563 ........................................................................................................
C8900 .......................................................................................................
C8902 .......................................................................................................
C8903 .......................................................................................................
C8905 .......................................................................................................
C8906 .......................................................................................................
C8908 .......................................................................................................
C8909 .......................................................................................................
C8911 .......................................................................................................
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Proposed CY 2018 Approximate APC Geometric Mean Cost = $571
Magnetic image, jaw joint.
Mri orbit/face/neck w/o dye.
Mr angiography head w/o dye.
Mr angiography neck w/o dye.
Mri brain w/o dye.
Fmri brain by tech.
Mri chest w/o dye.
Mri neck spine w/o dye.
Mri chest spine w/o dye.
Mri lumbar spine w/o dye.
Mri pelvis w/o dye.
Mri upper extremity w/o dye.
Mri joint upr extrem w/o dye.
Mri lower extremity w/o dye.
Mri jnt of lwr extre w/o dye.
Mri abdomen w/o dye.
Cardiac mri for morph.
Cardiac mri w/stress img.
MRA w/o cont, abd.
MRI w/o cont, breast, uni.
MRI w/o cont, breast, bi.
MRA w/o cont, chest.
MRA w/o cont, lwr ext.
MRA w/o cont, pelvis.
MRA, w/o dye, spinal canal.
MRA, w/o dye, upper extr.
Proposed CY 2018 Approximate APC Geometric Mean Cost = $888
Mr angiograph neck w/o & w/dye.
Mri orbit/face/neck w/dye.
Mri orbt/fac/nck w/o & w/dye.
Mr angiography head w/dye.
Mr angiograph head w/o & w/dye.
Mr angiography neck w/o dye.
Mr angiography neck w/dye.
Mri brain w/dye.
Mri brain w/o & w/dye.
Mri chest w/dye.
Mri chest w/o & w/dye.
Mri neck spine w/dye.
Mri chest spine w/dye.
Mri lumbar spine w/dye.
Mri neck spine w/o & w/dye.
Mri chest spine w/o & w/dye.
Mri lumbar spine w/o & w/dye.
Mri pelvis w/dye.
Mri pelvis w/o & w/dye.
Mri upper extremity w/dye.
Mri uppr extremity w/o & w/dye.
Mri joint upr extrem w/dye.
Mri joint upr extr w/o & w/dye.
Mri lower extremity w/dye.
Mri lwr extremity w/o & w/dye.
Mri joint of lwr extr w/dye.
Mri joint lwr extr w/o & w/dye.
Mri abdomen w/dye.
Mri abdomen w/o & w/dye.
Cardiac mri for morph w/dye.
Card mri w/stress img & dye.
MRA w/cont, abd.
MRA w/o fol w/cont, abd.
MRI w/cont, breast, uni.
MRI w/o fol w/cont, brst, un.
MRI w/cont, breast, bi.
MRI w/o fol w/cont, breast.
MRA w/cont, chest.
MRA w/o fol w/cont, chest.
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TABLE 6—PROPOSED OPPS IMAGING FAMILIES AND MULTIPLE IMAGING PROCEDURE COMPOSITE APCS—Continued
C8912
C8914
C8918
C8920
C8931
C8933
C8934
C8936
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
MRA w/cont, lwr ext.
MRA w/o fol w/cont, lwr ext.
MRA w/cont, pelvis.
MRA w/o fol w/cont, pelvis.
MRA, w/dye, spinal canal.
MRA, w/o&w/dye, spinal canal.
MRA, w/dye, upper extremity.
MRA, w/o&w/dye, upper extr.
* If a ‘‘without contrast’’ MRI or MRA procedure is performed during the same session as a ‘‘with contrast’’ MRI or MRA procedure, the I/OCE
assigns the procedure to APC 8008 rather than APC 8007.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
3. Proposed Changes to Packaged Items
and Services
a. Background and Rationale for
Packaging in the OPPS
Like other prospective payment
systems, the OPPS relies on the concept
of averaging to establish a payment rate
for services. The payment may be more
or less than the estimated cost of
providing a specific service or a bundle
of specific services for a particular
patient. The OPPS packages payment for
multiple interrelated items and services
into a single payment to create
incentives for hospitals to furnish
services most efficiently and to manage
their resources with maximum
flexibility. Our packaging policies
support our strategic goal of using larger
payment bundles in the OPPS to
maximize hospitals’ incentives to
provide care in the most efficient
manner. For example, where there are a
variety of devices, drugs, items, and
supplies that could be used to furnish
a service, some of which are more costly
than others, packaging encourages
hospitals to use the most cost-efficient
item that meets the patient’s needs,
rather than to routinely use a more
expensive item, which often occurs if
separate payment is provided for the
item.
Packaging also encourages hospitals
to effectively negotiate with
manufacturers and suppliers to reduce
the purchase price of items and services
or to explore alternative group
purchasing arrangements, thereby
encouraging the most economical health
care delivery. Similarly, packaging
encourages hospitals to establish
protocols that ensure that necessary
services are furnished, while
scrutinizing the services ordered by
practitioners to maximize the efficient
use of hospital resources. Packaging
payments into larger payment bundles
promotes the predictability and
accuracy of payment for services over
time. Finally, packaging may reduce the
importance of refining service-specific
payment because packaged payments
include costs associated with higher
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cost cases requiring many ancillary
items and services and lower cost cases
requiring fewer ancillary items and
services. Because packaging encourages
efficiency and is an essential component
of a prospective payment system,
packaging payment for items and
services that are typically integral,
ancillary, supportive, dependent, or
adjunctive to a primary service has been
a fundamental part of the OPPS since its
implementation in August 2000. For an
extensive discussion of the history and
background of the OPPS packaging
policy, we refer readers to the CY 2000
OPPS final rule (65 FR 18434), the CY
2008 OPPS/ASC final rule with
comment period (72 FR 66580), the CY
2014 OPPS/ASC final rule with
comment period (78 FR 74925), the CY
2015 OPPS/ASC final rule with
comment period (79 FR 66817), the CY
2016 OPPS/ASC final rule with
comment period (80 FR 70343), and the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79592). As we
continue to develop larger payment
groups that more broadly reflect services
provided in an encounter or episode of
care, we have expanded the OPPS
packaging policies. Most, but not
necessarily all, items and services
currently packaged in the OPPS are
listed in 42 CFR 419.2(b). Our
overarching goal is to make OPPS
payments for all services paid under the
OPPS more consistent with those of a
prospective payment system and less
like those of a per-service fee schedule,
which pays separately for each coded
item. As a part of this effort, we have
continued to examine the payment for
items and services provided under the
OPPS to determine which OPPS
services can be packaged to further
achieve the objective of advancing the
OPPS toward a more prospective
payment system.
For CY 2018, we examined the items
and services currently provided under
the OPPS, reviewing categories of
integral, ancillary, supportive,
dependent, or adjunctive items and
services for which we believe payment
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would be appropriately packaged into
payment of the primary service that they
support. Specifically, we examined the
HCPCS code definitions (including CPT
code descriptors) and outpatient
hospital billing patterns to determine
whether there were categories of codes
for which packaging would be
appropriate according to existing OPPS
packaging policies or a logical
expansion of those existing OPPS
packaging policies. In this proposed
rule, for CY 2018, we are proposing to
conditionally package the costs of
selected newly identified ancillary
services into payment with a primary
service where we believe that the
proposed packaged item or service is
integral, ancillary, supportive,
dependent, or adjunctive to the
provision of care that was reported by
the primary service HCPCS code. Below
we discuss the items and services that
we are proposing to package beginning
in CY 2018.
b. CY 2018 Drug Administration
Packaging Proposal
(1) Background of Drug Administration
Packaging Policy
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74942
through 74945), we finalized a policy to
unconditionally package procedures
described by add-on codes. Procedures
described by add-on codes represent an
extension or continuation of a primary
procedure, which means that they are
typically supportive, dependent, or
adjunctive to a primary service. The
primary code defines the purpose and
typical scope of the patient encounter
and the add-on code describes
incremental work, when the extent of
the procedure encompasses a range
rather than a single defined endpoint
applicable to all patients. Given the
dependent nature and adjunctive
characteristics of procedures described
by add-on codes and in light of
longstanding OPPS packaging
principles, we finalized a policy to
unconditionally package add-on codes
with the primary procedure. However,
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in response to stakeholder comments on
the appropriateness of packaging drug
administration add-on codes, we did not
finalize our proposal to package drug
administration add-on codes (78 FR
74945).
In the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66819
through 66822), we conditionally
packaged payment for ancillary services
assigned to APCs with a geometric mean
cost of less than or equal to $100 (prior
to application of the conditional
packaging status indicator). The
ancillary services that we identified are
primarily minor diagnostic tests and
procedures that are often performed
with a primary service, although there
are instances where hospitals provide
such services alone and without another
primary service during the same
encounter. Under this policy, we
assigned the conditionally packaged
services to status indicator ‘‘Q1’’, which
indicates that the service is separately
payable when not billed on the same
claim as a HCPCS code assigned status
indicator ‘‘S’’, ‘‘T’’, or ‘‘V’’. Exclusions
to this ancillary service packaging
policy include preventive services,
certain psychiatric and counselingrelated services, and certain low-cost
drug administration services. In the CY
2015 OPPS/ASC final rule with
comment period (79 FR 66819), we
indicated that we did not propose to
package certain low-cost drug
administration services because we
were examining various alternative
payment policies for drug
administration, including the associated
drug administration add-on codes.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
(2) Proposed Packaging of Level 1 and
Level 2 Drug Administration Services
As stated earlier, our overarching goal
is to make OPPS payments for all
services paid under the OPPS more
consistent with those of a prospective
payment system and less like those of a
per-service fee schedule. To achieve this
goal, it is important that we are
consistent in our approach to packaging
items and services under the established
packaging categories. Although we
excluded packaging of low-cost drug
administration services from the
ancillary services packaging policy in
the CY 2015 rulemaking, separate
payment for drug administration
services is an example of inconsistent
application of our packaging policy
where we are continuing to pay
separately for a service, regardless of
cost and performance with another
service. Given the frequency of drug
administration in hospital outpatient
care, we believe it is appropriate for us
to reconsider whether payment for drug
administration services with a geometric
mean cost of less than or equal to $100
(prior to application of the conditional
packaging status indicator) should
continue to be excluded from the
ancillary services packaging policy.
As part of our review of CY 2016
claims data used for ratesetting in this
CY 2018 OPPS/ASC proposed rule, we
examined drug administration billing
patterns and payment for drug
administration services under the OPPS.
Based on our analysis of CY 2016 claims
data (used for the CY 2018 OPPS/ASC
proposed rule ratesetting), we found
that the geometric mean cost for APC
5691 (Level 1 Drug Administration) is
approximately $37 and the geometric
mean cost for APC 5692 (Level 2 Drug
Administration) is approximately $59.
In addition, we observed that drug
administration services in APC 5692 are
frequently reported on the same claim
with other separately payable services,
such as an emergency department or
clinic visit, while drug administration
services in APC 5691 are sometimes
reported with other separately payable
services. Accordingly, Medicare data
show that these drug administration
services are currently being provided as
part of another separately payable
service for which two separate
payments are made, and support that
packaging these services, when they are
reported with another separately
payable services, is appropriate.
Further, packaging for Levels 1 and 2
Drug Administration services is
consistent with the ancillary packaging
policy that was adopted in CY 2015, as
noted earlier in this section. Therefore,
given the low geometric mean costs of
33585
drug administration services in APC
5691 and APC 5692 as well as their
associated billing patterns, we believe
that when these services are performed
with another separately payable service,
they should be packaged, but that they
should be separately paid when
performed alone. That is, we believe it
is no longer necessary to exclude lowcost drug administration services from
packaging under the ancillary services
packaging policy adopted in CY 2015.
In addition, as we examine payment
differences between the hospital
outpatient department and the
physician office for similar services,
under the OPPS, hospitals may receive
separate payments for a clinic (office)
visit and a drug administration service.
In contrast, physicians are not eligible to
receive payment for an office visit when
a drug administration service is also
provided. As a result, hospitals receive
a higher payment than a physician
office for furnishing the same drug
administration service. We believe that
conditional packaging of drug
administration services would promote
equitable payment between the
physician office and the hospital
outpatient hospital department.
Accordingly, for CY 2018, we are
proposing to conditionally package
payment for HCPCS codes describing
drug administration services in APC
5691 and APC 5692, except for add-on
codes and preventive services, when
these services are performed with
another service.
Because preventive services are
excluded from our packaging policies,
we are proposing to continue to pay
separately for Medicare Part B vaccine
administration services. In addition, at
this time, we are not proposing to
package any drug administration
services in APC 5693 (Level 3 Drug
Administration) or APC 5694 (Level 4
Drug Administration), but are interested
in public comments pertaining to
whether services in these APCs may be
appropriate for packaging. The proposed
status indicators for drug administration
services in APC 5691 and APC 5692 are
listed in Table 7 below.
TABLE 7—PROPOSED CY 2018 STATUS INDICATORS FOR DRUG ADMINISTRATION SERVICES IN LEVEL 1 AND LEVEL 2
DRUG ADMINISTRATION APCS
HCPCS code
Proposed
CY 2018
status
indicator
Short descriptor
APC 5691—Level 1 Drug Administration
95115 .........................................................
95117 .........................................................
95144 .........................................................
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Immunotherapy one injection ..........................................................................................
Immunotherapy injections ...............................................................................................
Antigen therapy services ................................................................................................
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Q1
Q1
Q1
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
TABLE 7—PROPOSED CY 2018 STATUS INDICATORS FOR DRUG ADMINISTRATION SERVICES IN LEVEL 1 AND LEVEL 2—
Continued
DRUG ADMINISTRATION APCS
Short descriptor
Proposed
CY 2018
status
indicator
Antigen therapy services ................................................................................................
Antigen therapy services ................................................................................................
Antigen therapy services ................................................................................................
Antigen therapy services ................................................................................................
Hydrate iv infusion add-on ..............................................................................................
Ther/proph/diag iv inf add-on ..........................................................................................
Sc ther infusion addl hr ...................................................................................................
Tx/pro/dx inj new drug add-on ........................................................................................
Application on-body injector ............................................................................................
Ther/prop/diag inj/inf proc ...............................................................................................
Chemo ia infuse each addl hr ........................................................................................
Chemotherapy unspecified .............................................................................................
Admin influenza virus vac ...............................................................................................
Admin pneumococcal vaccine ........................................................................................
Admin hepatitis b vaccine ...............................................................................................
Q1
Q1
Q1
Q1
S
S
S
S
Q1
Q1
S
Q1
S
S
S
HCPCS code
95145
95146
95165
95170
96361
96366
96370
96375
96377
96379
96423
96549
G0008
G0009
G0010
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
APC 5692—Level 2 Drug Administration
90471
90473
95147
95148
95149
96367
96371
96372
96401
96402
96405
96411
96415
96417
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
Immunization admin ........................................................................................................
Immune admin oral/nasal ...............................................................................................
Antigen therapy services ................................................................................................
Antigen therapy services ................................................................................................
Antigen therapy services ................................................................................................
Tx/proph/dg addl seq iv inf .............................................................................................
Sc ther infusion reset pump ............................................................................................
Ther/proph/diag inj sc/im ................................................................................................
Chemo anti-neopl sq/im ..................................................................................................
Chemo hormon antineopl sq/im ......................................................................................
Chemo intralesional up to 7 ............................................................................................
Chemo iv push addl drug ...............................................................................................
Chemo iv infusion addl hr ...............................................................................................
Chemo iv infus each addl seq ........................................................................................
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(3) Comment Solicitation Regarding
Unconditionally Packaging Drug
Administration Add-on Codes
With respect to drug administration
add-on codes, as discussed in the CY
2014 OPPS/ASC proposed rule (78 FR
43573), we proposed to unconditionally
package all drug administration services
described by add-on codes. In response
to the proposal, commenters objected to
packaging drug administration add-on
codes, which typically describe each
additional hour of infusion or each
additional intravenous push, among
others, in addition to the initial drug
administration service. The commenters
believed that such a policy could
disadvantage providers of longer drug
administration services, which are often
protocol-driven and are not necessarily
dictated by the hospital, but by the
characteristics of the specific drug or
biological being administered to the
patient. In response to these comments,
we stated in the CY 2014 OPPS/ASC
final rule with comment period (78 FR
74945) that, given the frequency of drug
administration services in the hospital
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outpatient department and their use in
such a wide variety of different drug
treatment protocols for various diseases
in all types of hospitals, further study of
the payment methodology for these
services was warranted at that time.
Therefore, we did not finalize our
proposal to package the drug
administration add-on codes in CY
2014. However, we stated we would
continue to explore other payment
options, including packaging and
variations on packaging, in future years.
We are not proposing to package drug
administration add-on codes for CY
2018 in this proposed rule because we
want stakeholder input on a payment
methodology that supports the
principles of a prospective payment
system while ensuring patient access to
prolonged infusion services. Instead, we
are soliciting public comment on
whether conditionally or
unconditionally packaging such codes
would create access to care issues or
have other unintended consequences.
Specifically, we are requesting public
comments on the following: (1) Whether
we should conditionally or
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Q1
Q1
Q1
Q1
S
Q1
Q1
Q1
Q1
Q1
S
S
S
unconditionally package drug
administration services add-on codes;
(2) how we should consider or
incorporate the varied clinical drug
protocols that result in different
infusion times into a drug
administration service add-on code
payment proposal; and (3) other
recommendations on an encounterbased payment approach for drug
administration services that are
described by add-on codes when
furnished in the hospital outpatient
setting.
c. Analysis of Packaging of Pathology
Services in the OPPS
At the August 22, 2016 HOP Panel
meeting, a stakeholder expressed
concern regarding conditional
packaging of multiple pathology
services. When multiple conditionally
packaged services are billed on the same
claim, the costs of the lowest paying
services are bundled into the cost of the
highest paying service and payment is
made based on the highest single
payable service. The stakeholder
requested that CMS create a pathology
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composite to more appropriately pay for
claims with only multiple pathology
services and no other separately payable
service such as a surgical procedure or
a clinic visit. The HOP panel
recommended that CMS develop a
composite APC for pathology services
when multiple pathology services are
provided on a claim with no other
payable services. The HOP Panel also
requested that CMS take into
consideration the stakeholder
presentation comments made at the
August 22, 2016 panel meeting
regarding hospital pathology
laboratories as CMS evaluates
conditional packaging to determine
rule, we evaluated and considered a
pathology composite APC when
multiple pathology services are
performed and billed without a
separately payable service on the same
claim. To understand the frequency of
billing multiple pathology services and
no other separately payable codes on the
same claim by hospital outpatient
departments, we examined currently
available claims data to identify the
frequency distribution of pathology
codes within the CPT code range 88300
to 88361. The claim frequency
breakdown is displayed in Table 8
below.
whether an accommodation can be
made. Specifically, the stakeholder
expressed concern with conditional
packaging of pathology services,
particularly when payment is limited to
the single highest paying code,
regardless of the number of services
provided or specimens tested.
In response to these HOP Panel
requests and recommendation, we
stated that we may consider the
stakeholders’ request for a pathology
composite APC as well as additional
composite APCs for future rulemaking
(81 FR 79588). In light of these requests
and recommendation, in development
of this CY 2018 OPPS/ASC proposed
TABLE 8—DISTRIBUTION OF PATHOLOGY ONLY OPPS CLAIMS
Number of
claims
Claim subset
Claims
Claims
Claims
Claims
having
having
having
having
1
2
3
4
pathology code .............................................................................................................................
pathology codes ...........................................................................................................................
pathology codes ...........................................................................................................................
or more pathology codes ..............................................................................................................
Based on our claims analysis, the
majority of pathology-only OPPS claims
are reported with one pathology code.
Therefore, we believe that it is neither
a frequent occurrence nor a common
occurrence for a provider to submit a
claim for payment under the OPPS with
multiple pathology services and no
other separately payable service.
With regard to the HOP Panel’s
recommendation to develop a composite
APC for pathology services when
multiple pathology services are
provided on a claim with no other
payable services, we used CY 2016
claims data available for the CY 2018
OPPS/ASC proposed rule to model four
hypothetical pathology composite APCs.
That is, following our standard
packaging methodology, we modeled
four hypothetical pathology composite
APCs based on the following clinical
scenarios that were specifically
requested by a stakeholder at the August
2016 HOP Panel meeting:
• Hypothetical Composite APC A:
Claims that contain 2–4 pathology units
(CPT codes 88302 through 88309) with
or without special stains (CPT codes
88312–88314);
• Hypothetical Composite APC B:
Claims that contain 5 or more pathology
units (CPT codes 88302 through 88309)
with or without special stains (CPT
codes 88312–88314);
• Hypothetical Composite APC C:
Claims that contain 2–4 pathology units
(CPT codes 88302 through 88309) with
immunostains (CPT codes 88341, 88342,
88346, 88350, 88360, 88361); and
• Hypothetical Composite APC D:
Claims that contain 5 or more pathology
464,039
101,954
38,163
20,435
Percent of
claims
74.29
16.32
6.11
3.27
units (CPT codes 88302 through 88309)
with immunostains (CPT codes 88341,
88342, 88346, 88350, 88360, 88361).
In addition, we evaluated the volume
of services and costs for each
hypothetical composite. Results from
modeling the four composite scenarios
show low claim volume, which
indicates that the suggested pathology
code combinations are infrequently
billed by hospital outpatient
departments, which may mean that
these are not likely clinical scenarios in
hospital outpatient departments. A
summary of the results from our
composite analysis are presented in
Table 9 below. We refer readers to
Addendum B to the CY 2018 OPPS/ASC
proposed rule (which is available via
the Internet on the CMS Web site) for
the CPT code descriptors.
TABLE 9—COST AND UTILIZATION STATISTICS OF FOUR HYPOTHETICAL COMPOSITE APCS
Number of
claims
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Hypothetical composite APC
A
B
C
D
...........................................................................................
...........................................................................................
...........................................................................................
...........................................................................................
As we move toward larger payment
bundles under the OPPS, the necessity
of composite APCs diminishes. For
example, in this CY 2018 OPPS/ASC
proposed rule, we are proposing to
delete composite APC 8001 (LDR
Prostate Brachytherapy Composite) and
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Geometric
mean unit
cost
139,238
14,388
877
214
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Mean
special stains
units per claim
Mean
immunostain
units per claim
2.42
6.78
2.46
6.56
0.19
0.24
0.14
0.12
0.02
0.03
3.98
4.28
$95.82
265.36
544.71
1,531.87
to provide payment for the component
procedures through the C–APC payment
methodology. Composite APCs were a
precursor to C–APCs. In CY 2008, we
implemented composite APCs to
provide a single payment for groups of
services that are typically performed
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Mean
pathology
units per claim
together during a single clinical
encounter and that result in the
provision of a complete service (72 FR
66650 through 66652). Because a C–APC
would treat all individually reported
codes as representing components of the
comprehensive service, all of the
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elements of the composite service are
included in the C–APC payment. In
addition, given the infrequent
occurrence of multiple pathology
services on the same claim without a
separately payable service, we do not
believe a composite APC is necessary or
warranted.
Therefore, for CY 2018, we are not
proposing to create a pathology
composite APC or additional composite
APCs for stakeholder-requested services,
such as X-ray services, respiratory
services, cardiology services, or allergy
testing services. However, we are
soliciting public comments on our
packaging policies below.
d. Comment Solicitation on Packaging
of Items and Services Under the OPPS
As previously noted, packaging is an
inherent principle of a prospective
payment system. The OPPS, like other
prospective payment systems, relies on
the concept of averaging, where the
payment may be more or less than the
estimated costs of providing a service or
package of services for a particular
patient, but with the exception of outlier
cases, is adequate to ensure access to
appropriate care. Packaging and
bundling payment for multiple
interrelated services into a single
payment creates incentives for providers
to furnish services in the most efficient
way by enabling hospitals to manage
their resources with maximum
flexibility, thereby encouraging longterm cost containment. Decisions about
packaging and bundling payment
involve a balance between ensuring
some separate payment for individual
services or items while establishing
incentives for efficiency through larger
units of payment.
As the OPPS continues to move
towards a prospectively determined
encounter-based payments and away
from separate fee schedule-like
payments, we continue to hear concerns
from stakeholders that our packaging
policies may be hampering patient
access or resulting in other undesirable
consequences. However, we have not
observed significant fluctuations in our
data that show a sharp decline of the
volume of packaged services, nor have
we heard from Medicare beneficiaries
specifically about access issues or other
concerns with packaged items and
services. However, given that aggregate
spending and utilization continue to
increase for covered outpatient services,
it is unclear what, if any, adverse effect
packaging has on beneficiary access to
care. Specifically, within the framework
of existing packaging categories, such as
drugs that function as supplies in a
surgical procedure or diagnostic test or
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procedure, we are interested in
stakeholder feedback on common
clinical scenarios involving currently
packaged HCPCS codes for which
stakeholders believe packaged payment
is not appropriate under the OPPS.
Likewise, outside the framework of
existing packaging categories, we are
interested in stakeholder feedback on
common clinical scenarios involving
separately payable HCPCS codes for
which payment would be most
appropriately packaged under the OPPS.
We are soliciting public comments from
a broad cross-section of stakeholders,
including beneficiaries, patient
advocates, hospital providers,
clinicians, manufacturers, and other
interested parties.
4. Proposed Calculation of OPPS Scaled
Payment Weights
We established a policy in the CY
2013 OPPS/ASC final rule with
comment period (77 FR 68283) of using
geometric mean-based APC costs to
calculate relative payment weights
under the OPPS. In the CY 2017 OPPS/
ASC final rule with comment period (81
FR 79594 through 79595), we applied
this policy and calculated the relative
payment weights for each APC for CY
2017 that were shown in Addenda A
and B to that final rule with comment
period (which were made available via
the Internet on the CMS Web site) using
the APC costs discussed in sections
II.A.1. and II.A.2. of that final rule with
comment period. For CY 2018, as we
did for CY 2017, we are proposing to
continue to apply the policy established
in CY 2013 and calculate relative
payment weights for each APC for CY
2018 using geometric mean-based APC
costs.
For CY 2012 and CY 2013, outpatient
clinic visits were assigned to one of five
levels of clinic visit APCs, with APC
0606 representing a mid-level clinic
visit. In the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75036
through 75043), we finalized a policy
that created alphanumeric HCPCS code
G0463 (Hospital outpatient clinic visit
for assessment and management of a
patient), representing any and all clinic
visits under the OPPS. HCPCS code
G0463 was assigned to APC 0634
(Hospital Clinic Visits). We also
finalized a policy to use CY 2012 claims
data to develop the CY 2014 OPPS
payment rates for HCPCS code G0463
based on the total geometric mean cost
of the levels one through five CPT E/M
codes for clinic visits previously
recognized under the OPPS (CPT codes
99201 through 99205 and 99211 through
99215). In addition, we finalized a
policy to no longer recognize a
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distinction between new and
established patient clinic visits.
For CY 2016, we deleted APC 0634
and reassigned the outpatient clinic
visit HCPCS code G0463 to APC 5012
(Level 2 Examinations and Related
Services) (80 FR 70351). For CY 2018,
as we did for CY 2017, we are proposing
to continue to standardize all of the
relative payment weights to APC 5012.
We believe that standardizing relative
payment weights to the geometric mean
of the APC to which HCPCS code G0463
is assigned maintains consistency in
calculating unscaled weights that
represent the cost of some of the most
frequently provided OPPS services. For
CY 2018, as we did for CY 2017, we are
proposing to assign APC 5012 a relative
payment weight of 1.00 and to divide
the geometric mean cost of each APC by
the geometric mean cost for APC 5012
to derive the unscaled relative payment
weight for each APC. The choice of the
APC on which to standardize the
relative payment weights does not affect
payments made under the OPPS
because we scale the weights for budget
neutrality.
Section 1833(t)(9)(B) of the Act
requires that APC reclassification and
recalibration changes, wage index
changes, and other adjustments be made
in a budget neutral manner. Budget
neutrality ensures that the estimated
aggregate weight under the OPPS for CY
2018 is neither greater than nor less
than the estimated aggregate weight that
would have been made without the
changes. To comply with this
requirement concerning the APC
changes, we are proposing to compare
the estimated aggregate weight using the
CY 2017 scaled relative payment
weights to the estimated aggregate
weight using the proposed CY 2018
unscaled relative payment weights.
For CY 2017, we multiplied the CY
2017 scaled APC relative payment
weight applicable to a service paid
under the OPPS by the volume of that
service from CY 2016 claims to calculate
the total relative payment weight for
each service. We then added together
the total relative payment weight for
each of these services in order to
calculate an estimated aggregate weight
for the year. For CY 2018, we are
proposing to apply the same process
using the estimated CY 2018 unscaled
relative payment weights rather than
scaled relative payment weights. We are
proposing to calculate the weight scalar
by dividing the CY 2017 estimated
aggregate weight by the unscaled CY
2018 estimated aggregate weight.
For a detailed discussion of the
weight scalar calculation, we refer
readers to the OPPS claims accounting
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document available on the CMS Web
site at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/.
Click on the CY 2018 OPPS proposed
rule link and open the claims
accounting document link at the bottom
of the page.
We are proposing to compare the
estimated unscaled relative payment
weights in CY 2018 to the estimated
total relative payment weights in CY
2017 using CY 2016 claims data,
holding all other components of the
payment system constant to isolate
changes in total weight. Based on this
comparison, we are proposing to adjust
the calculated CY 2018 unscaled
relative payment weights for purposes
of budget neutrality. We are proposing
to adjust the estimated CY 2018
unscaled relative payment weights by
multiplying them by a proposed weight
scaler of 1.328 to ensure that the
proposed CY 2018 relative payment
weights are scaled to be budget neutral.
The proposed CY 2018 relative payment
weights listed in Addenda A and B to
this proposed rule (which are available
via the Internet on the CMS Web site)
were scaled and incorporate the
recalibration adjustments discussed in
sections II.A.1. and II.A.2. of this
proposed rule.
Section 1833(t)(14) of the Act
provides the payment rates for certain
SCODs. Section 1833(t)(14)(H) of the
Act provides that additional
expenditures resulting from this
paragraph shall not be taken into
account in establishing the conversion
factor, weighting, and other adjustment
factors for 2004 and 2005 under
paragraph (9), but shall be taken into
account for subsequent years. Therefore,
the cost of those SCODs (as discussed in
section V.B.3. of this proposed rule) is
included in the proposed budget
neutrality calculations for the CY 2018
OPPS.
B. Proposed Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act
requires the Secretary to update the
conversion factor used to determine the
payment rates under the OPPS on an
annual basis by applying the OPD fee
schedule increase factor. For purposes
of section 1833(t)(3)(C)(iv) of the Act,
subject to sections 1833(t)(17) and
1833(t)(3)(F) of the Act, the OPD fee
schedule increase factor is equal to the
hospital inpatient market basket
percentage increase applicable to
hospital discharges under section
1886(b)(3)(B)(iii) of the Act. In the FY
2018 IPPS/LTCH PPS proposed rule (82
FR 19931), consistent with current law,
based on IHS Global Insight, Inc.’s
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fourth quarter 2016 forecast of the FY
2018 market basket increase, the
proposed FY 2018 IPPS market basket
update is 2.9 percent. However, sections
1833(t)(3)(F) and 1833(t)(3)(G)(v) of the
Act, as added by section 3401(i) of the
Patient Protection and Affordable Care
Act of 2010 (Pub. L. 111–148) and as
amended by section 10319(g) of that law
and further amended by section 1105(e)
of the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111–
152), provide adjustments to the OPD
fee schedule increase factor for CY 2018.
Specifically, section 1833(t)(3)(F)(i) of
the Act requires that, for 2012 and
subsequent years, the OPD fee schedule
increase factor under subparagraph
(C)(iv) be reduced by the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act defines
the productivity adjustment as equal to
the 10-year moving average of changes
in annual economy-wide, private
nonfarm business multifactor
productivity (MFP) (as projected by the
Secretary for the 10-year period ending
with the applicable fiscal year, year,
cost reporting period, or other annual
period) (the ‘‘MFP adjustment’’). In the
FY 2012 IPPS/LTCH PPS final rule (76
FR 51689 through 51692), we finalized
our methodology for calculating and
applying the MFP adjustment, and then
revised this methodology as discussed
in the FY 2016 IPPS/LTCH PPS final
rule (80 FR 49509). In the FY 2018 IPPS/
LTCH PPS proposed rule (82 FR 19931
through 19932), we discussed the
calculation of the proposed MFP
adjustment for FY 2018, which is -0.4
percentage point.
We are proposing that if more recent
data become subsequently available
after the publication of this proposed
rule (for example, a more recent
estimate of the market basket increase
and the MFP adjustment), we would use
such updated data, if appropriate, to
determine the CY 2018 market basket
update and the MFP adjustment, which
are components in calculating the OPD
fee schedule increase factor under
sections 1833(t)(3)(C)(iv) and
1833(t)(3)(F) of the Act, in the CY 2018
OPPS/ASC final rule with comment
period.
In addition, section 1833(t)(3)(F)(ii) of
the Act requires that, for each of years
2010 through 2019, the OPD fee
schedule increase factor under section
1833(t)(3)(C)(iv) of the Act be reduced
by the adjustment described in section
1833(t)(3)(G) of the Act. For CY 2018,
section 1833(t)(3)(G)(v) of the Act
provides a 0.75 percentage point
reduction to the OPD fee schedule
increase factor under section
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33589
1833(t)(3)(C)(iv) of the Act. Therefore, in
accordance with sections
1833(t)(3)(F)(ii) and 1833(t)(3)(G)(v) of
the Act, we are proposing to apply a
0.75 percentage point reduction to the
OPD fee schedule increase factor for CY
2018.
We note that section 1833(t)(3)(F) of
the Act provides that application of this
subparagraph may result in the OPD fee
schedule increase factor under section
1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year, and may
result in OPPS payment rates being less
than rates for the preceding year. As
described in further detail below, we are
proposing to apply an OPD fee schedule
increase factor of 1.75 percent for the
CY 2018 OPPS (which is 2.9 percent,
the proposed estimate of the hospital
inpatient market basket percentage
increase, less the proposed 0.4
percentage point MFP adjustment, and
less the 0.75 percentage point additional
adjustment).
Hospitals that fail to meet the
Hospital OQR Program reporting
requirements are subject to an
additional reduction of 2.0 percentage
points from the OPD fee schedule
increase factor adjustment to the
conversion factor that would be used to
calculate the OPPS payment rates for
their services, as required by section
1833(t)(17) of the Act. For further
discussion of the Hospital OQR
Program, we refer readers to section
XIII. of this proposed rule.
In this CY 2018 OPPS/ASC proposed
rule, we are proposing to amend 42 CFR
419.32(b)(1)(iv)(B) by adding a new
paragraph (9) to reflect the requirement
in section 1833(t)(3)(F)(i) of the Act that,
for CY 2018, we reduce the OPD fee
schedule increase factor by the MFP
adjustment as determined by CMS, and
to reflect the requirement in section
1833(t)(3)(G)(v) of the Act, as required
by section 1833(t)(3)(F)(ii) of the Act,
that we reduce the OPD fee schedule
increase factor by an additional 0.75
percentage point for CY 2018.
To set the OPPS conversion factor for
this CY 2018 proposed rule, we are
proposing to increase the CY 2017
conversion factor of $75.001 by 1.75
percent. In accordance with section
1833(t)(9)(B) of the Act, we are
proposing further to adjust the
conversion factor for CY 2018 to ensure
that any revisions made to the wage
index and rural adjustment are made on
a budget neutral basis. We are proposing
to calculate an overall proposed budget
neutrality factor of 0.9999 for wage
index changes by comparing proposed
total estimated payments from our
simulation model using the proposed
FY 2018 IPPS wage indexes to those
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payments using the FY 2017 IPPS wage
indexes, as adopted on a calendar year
basis for the OPPS.
For CY 2018, we are proposing to
maintain the current rural adjustment
policy, as discussed in section II.E. of
this proposed rule. Therefore, the
proposed budget neutrality factor for the
rural adjustment would be 1.0000.
For CY 2018, we are proposing to
continue previously established policies
for implementing the cancer hospital
payment adjustment described in
section 1833(t)(18) of the Act, as
discussed in section II.F. of this
proposed rule. We are proposing to
calculate a CY 2018 budget neutrality
adjustment factor for the cancer hospital
payment adjustment by comparing
estimated total CY 2018 payments under
section 1833(t) of the Act, including the
proposed CY 2018 cancer hospital
payment adjustment, to estimated CY
2018 total payments using the CY 2017
final cancer hospital payment
adjustment as required under section
1833(t)(18)(B) of the Act. The CY 2018
proposed estimated payments applying
the proposed CY 2018 cancer hospital
payment adjustment are less than
estimated payments applying the CY
2017 final cancer hospital payment
adjustment. Therefore, we are proposing
to apply a budget neutrality adjustment
factor of 1.0003 to the conversion factor
for the cancer hospital payment
adjustment. In accordance with section
16002(b) of the 21st Century Cures Act,
we are applying a budget neutrality
factor calculated as if the proposed
cancer hospital adjustment target
payment-to-cost ratio was 0.90, not the
0.89 target payment-to-cost ratio we are
applying in section II.F. of this proposed
rule.
For this proposed rule, we estimate
that proposed pass-through spending for
drugs, biologicals, and devices for CY
2018 would equal approximately $26.2
million, which represents 0.04 percent
of total projected CY 2018 OPPS
spending. Therefore, the proposed
conversion factor would be adjusted by
the difference between the 0.26 percent
estimate of pass-through spending for
CY 2017 and the 0.04 percent estimate
of proposed pass-through spending for
CY 2018, resulting in a proposed
adjustment for CY 2018 of 0.22 percent.
Proposed estimated payments for
outliers would remain at 1.0 percent of
total OPPS payments for CY 2018. We
estimate for this proposed rule that
outlier payments would be 1.04 percent
of total OPPS payments in CY 2017; the
1.0 percent for proposed outlier
payments in CY 2018 would constitute
a 0.04 percent decrease in payment in
CY 2018 relative to CY 2017.
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For this proposed rule, we also are
proposing that hospitals that fail to meet
the reporting requirements of the
Hospital OQR Program would continue
to be subject to a further reduction of 2.0
percentage points to the OPD fee
schedule increase factor. For hospitals
that fail to meet the requirements of the
Hospital OQR Program, we are
proposing to make all other adjustments
discussed above, but use a reduced OPD
fee schedule update factor of ¥0.25
percent (that is, the proposed OPD fee
schedule increase factor of 1.75 percent
further reduced by 2.0 percentage
points). This would result in a proposed
reduced conversion factor for CY 2018
of $74.953 for hospitals that fail to meet
the Hospital OQR Program requirements
(a difference of ¥1.530 in the
conversion factor relative to hospitals
that met the requirements).
In summary, for CY 2018, we are
proposing to amend § 419.32(b)(1)(iv)(B)
by adding a new paragraph (9) to reflect
the reductions to the OPD fee schedule
increase factor that are required for CY
2018 to satisfy the statutory
requirements of sections 1833(t)(3)(F)
and (t)(3)(G)(v) of the Act. We are
proposing to use a reduced conversion
factor of $74.953 in the calculation of
payments for hospitals that fail to meet
the Hospital OQR Program requirements
(a difference of ¥1.530 in the
conversion factor relative to hospitals
that met the requirements).
For CY 2018, we are proposing to use
a conversion factor of $76.483 in the
calculation of the national unadjusted
payment rates for those items and
services for which payment rates are
calculated using geometric mean costs;
that is, the proposed OPD fee schedule
increase factor of 1.75 percent for CY
2018, the required proposed wage index
budget neutrality adjustment of
approximately 0.9999, the proposed
cancer hospital payment adjustment of
1.0003, and the proposed adjustment of
0.22 percentage point of projected OPPS
spending for the difference in the passthrough spending and outlier payments
that result in a proposed conversion
factor for CY 2018 of $76.483.
C. Proposed Wage Index Changes
Section 1833(t)(2)(D) of the Act
requires the Secretary to determine a
wage adjustment factor to adjust the
portion of payment and coinsurance
attributable to labor-related costs for
relative differences in labor and laborrelated costs across geographic regions
in a budget neutral manner (codified at
42 CFR 419.43(a)). This portion of the
OPPS payment rate is called the OPPS
labor-related share. Budget neutrality is
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discussed in section II.B. of this
proposed rule.
The OPPS labor-related share is 60
percent of the national OPPS payment.
This labor-related share is based on a
regression analysis that determined that,
for all hospitals, approximately 60
percent of the costs of services paid
under the OPPS were attributable to
wage costs. We confirmed that this
labor-related share for outpatient
services is appropriate during our
regression analysis for the payment
adjustment for rural hospitals in the CY
2006 OPPS final rule with comment
period (70 FR 68553). We are proposing
to continue this policy for the CY 2018
OPPS. We refer readers to section II.H.
of this proposed rule for a description
and an example of how the wage index
for a particular hospital is used to
determine payment for the hospital.
As discussed in the claims accounting
narrative included with the supporting
documentation for this proposed rule
(which is available via the Internet on
the CMS Web site), for estimating APC
costs, we standardize 60 percent of
estimated claims costs for geographic
area wage variation using the same
proposed FY 2018 pre-reclassified wage
index that the IPPS uses to standardize
costs. This standardization process
removes the effects of differences in area
wage levels from the determination of a
national unadjusted OPPS payment rate
and copayment amount.
Under 42 CFR 419.41(c)(1) and
419.43(c) (published in the OPPS April
7, 2000 final rule with comment period
(65 FR 18495 and 18545)), the OPPS
adopted the final fiscal year IPPS postreclassified wage index as the calendar
year wage index for adjusting the OPPS
standard payment amounts for labor
market differences. Therefore, the wage
index that applies to a particular acute
care, short-stay hospital under the IPPS
also applies to that hospital under the
OPPS. As initially explained in the
September 8, 1998 OPPS proposed rule
(63 FR 47576), we believe that using the
IPPS wage index as the source of an
adjustment factor for the OPPS is
reasonable and logical, given the
inseparable, subordinate status of the
HOPD within the hospital overall. In
accordance with section 1886(d)(3)(E) of
the Act, the IPPS wage index is updated
annually.
The Affordable Care Act contained
several provisions affecting the wage
index. These provisions were discussed
in the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74191).
Section 10324 of the Affordable Care
Act added section 1886(d)(3)(E)(iii)(II)
to the Act, which defines a frontier State
and amended section 1833(t) of the Act
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to add paragraph (19), which requires a
frontier State wage index floor of 1.00 in
certain cases, and states that the frontier
State floor shall not be applied in a
budget neutral manner. We codified
these requirements at § 419.43(c)(2) and
(c)(3) of our regulations. For the CY
2018 OPPS, we are proposing to
implement this provision in the same
manner as we have since CY 2011.
Under this policy, the frontier State
hospitals would receive a wage index of
1.00 if the otherwise applicable wage
index (including reclassification, the
rural floor, and rural floor budget
neutrality) is less than 1.00 (as
discussed below, we are proposing not
to extend the imputed floor under the
OPPS for CY 2018 and subsequent
years). Because the HOPD receives a
wage index based on the geographic
location of the specific inpatient
hospital with which it is associated, the
frontier State wage index adjustment
applicable for the inpatient hospital also
would apply for any associated HOPD.
We refer readers to the following
sections in the FY 2011 through FY
2017 IPPS/LTCH PPS final rules for
discussions regarding this provision,
including our methodology for
identifying which areas meet the
definition of ‘‘frontier States’’ as
provided for in section
1886(d)(3)(E)(iii)(II) of the Act: For FY
2011, 75 FR 50160 through 50161; for
FY 2012, 76 FR 51793, 51795, and
51825; for FY 2013, 77 FR 53369
through 53370; for FY 2014, 78 FR
50590 through 50591; for FY 2015, 79
FR 49971; for FY 2016, 80 FR 49498;
and for FY 2017, 81 FR 56922. We are
inviting public comments on this
proposal.
In addition to the changes required by
the Affordable Care Act, we note that
the proposed FY 2018 IPPS wage
indexes continue to reflect a number of
adjustments implemented over the past
few years, including, but not limited to,
reclassification of hospitals to different
geographic areas, the rural floor
provisions, an adjustment for
occupational mix, and an adjustment to
the wage index based on commuting
patterns of employees (the out-migration
adjustment). We note that in the FY
2018 IPPS/LTCH PPS proposed rule (82
FR 19905), we proposed not to apply the
imputed floor to the IPPS wage index
computations for FY 2018 and
subsequent fiscal years. We refer readers
to the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19898 through
19915) for a detailed discussion of all
proposed changes to the FY 2018 IPPS
wage indexes (including our proposal
not to extend the imputed floor for FY
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2018 and subsequent fiscal years). In
addition, we refer readers to the CY
2005 OPPS final rule with comment
period (69 FR 65842 through 65844) and
subsequent OPPS rules for a detailed
discussion of the history of these wage
index adjustments as applied under the
OPPS.
As discussed in the FY 2015 IPPS/
LTCH PPS final rule (79 FR 49951
through 49963), the FY 2016 IPPS/LTCH
PPS final rule (80 FR 49488 through
49489 and 49494 through 49496), and
the FY 2017 IPPS/LTCH PPS final rule
(81 FR 56913), the Office of
Management and Budget (OMB) issued
revisions to the labor market area
delineations on February 28, 2013
(based on 2010 Decennial Census data),
that included a number of significant
changes such as new Core Based
Statistical Areas (CBSAs), urban
counties that became rural, rural
counties that became urban, and
existing CBSAs that were split apart
(OMB Bulletin 13–01). This bulletin can
be found at: https://
obamawhitehouse.archives.gov/sites/
default/files/omb/bulletins/2013/b1301.pdf. In the FY 2015 IPPS/LTCH PPS
final rule (79 FR 49950 through 49985),
we adopted the use of the OMB labor
market area delineations contained in
OMB Bulletin No. 13–01, effective
October 1, 2014. In the FY 2017 IPPS/
LTCH PPS final rule (81 FR 56913), we
adopted revisions to statistical areas
contained in OMB Bulletin No. 15–01,
issued on July 15, 2015, which provided
updates to and superseded OMB
Bulletin No. 13–01 that was issued on
February 28, 2013. We believe that it is
important for the OPPS to use the latest
labor market area delineations available
as soon as is reasonably possible in
order to maintain a more accurate and
up-to-date payment system that reflects
the reality of population shifts and labor
market conditions. Therefore, for
purposes of the OPPS, in the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79598), we adopted the
revisions to the OMB statistical area
delineations contained in OMB Bulletin
No. 15–01, effective January 1, 2017,
beginning with the CY 2017 OPPS wage
indexes.
CBSAs are made up of one or more
constituent counties. Each CBSA and
constituent county has its own unique
identifying codes. The FY 2018 IPPS/
LTCH PPS proposed rule (82 FR 19898
through 19899) discusses the two
different lists of codes to identify
counties: Social Security
Administration (SSA) codes and Federal
Information Processing Standard (FIPS)
codes. Historically, CMS has listed and
used SSA and FIPS county codes to
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33591
identify and crosswalk counties to
CBSA codes for purposes of the IPPS
and OPPS wage indexes. However, the
SSA county codes are no longer being
maintained and updated, although the
FIPS codes continue to be maintained
by the U.S. Census Bureau. The Census
Bureau’s most current statistical area
information is derived from ongoing
census data received since 2010; the
most recent data are from 2015. In the
FY 2018 IPPS/LTCH PPS proposed rule
(81 FR 19898), for purposes of
crosswalking counties to CBSAs for the
IPPS wage index, we proposed to
discontinue the use of the SSA county
codes and begin using only the FIPS
county codes. Similarly, for the
purposes of crosswalking counties to
CBSAs for the OPPS wage index, we are
proposing to discontinue the use of SSA
county codes and begin using only the
FIPS county codes. We are inviting
public comments on this proposal.
The Census Bureau maintains a
complete list of changes to counties or
county equivalent entities on the Web
site at: https://www.census.gov/geo/
reference/county-changes.html. In our
proposed transition to using only FIPS
codes for counties for the IPPS wage
index, we proposed to update the FIPS
codes used for crosswalking counties to
CBSAs for the IPPS wage index to
incorporate changes to the counties or
county equivalent entities included in
the Census Bureau’s most recent list.
Based on information included in the
Census Bureau’s Web site, since 2010,
the Census Bureau has made the
following updates to the FIPS codes for
counties or county equivalent entities:
• Petersburg Borough, AK (FIPS State
County Code 02–195), CBSA 02, was
created from part of former Petersburg
Census Area (02–195) and part of
Hoonah-Angoon Census Area (02–105).
The CBSA code remains 02.
• The name of La Salle Parish, LA
(FIPS State County Code 22–059), CBSA
14, is now LaSalle Parish, LA (FIPS
State County Code 22–059). The CBSA
code remains as 14.
• The name of Shannon County, SD
(FIPS State County Code 46–113), CBSA
43, is now Oglala Lakota County, SD
(FIPS State County Code 46–102). The
CBSA code remains as 43.
In the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19898 through
19899), for the IPPS, we proposed to
implement these FIPS code updates,
effective October 1, 2017, beginning
with the FY 2018 wage indexes. We
proposed to include these updates to
calculate area wage indexes in a manner
that is generally consistent with the
CBSA-based methodologies finalized in
the FY 2005 IPPS final rule and the FY
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2015 IPPS/LTCH PPS final rule. We
noted that while the county update
changes listed earlier changed the
county names, the CBSAs to which
these counties map did not change from
the prior counties. Therefore, there
would be no impact or change to
hospitals in these counties; they would
continue to be considered rural for the
IPPS wage index under these changes.
Consistent with the FY 2018 IPPS/LTCH
PPS proposed rule, for purposes of the
OPPS, we are proposing to implement
these revisions effective January 1, 2018,
beginning with the CY 2018 OPPS wage
indexes. We believe it is important to
use the latest counties or county
equivalent entities in order to properly
crosswalk hospitals from a county to a
CBSA for purposes of the OPPS wage
index. In addition, we believe that using
the latest FIPS codes will allow us to
maintain a more accurate and up-to-date
payment system that reflects the reality
of population shifts and labor market
conditions. Tables 2 and 3 for the FY
2018 IPPS/LTCH PPS proposed rule and
the County to CBSA Crosswalk File and
Urban CBSAs and Constituent Counties
for Acute Care Hospitals File posted on
the CMS Web site reflect these county
changes. We are inviting public
comments on our proposals.
For this CY 2018 OPPS/ASC proposed
rule, we are proposing to use the FY
2018 hospital IPPS post-reclassified
wage index for urban and rural areas as
the wage index for the OPPS to
determine the wage adjustments for
both the OPPS payment rate and the
copayment standardized amount for CY
2018. Therefore, any adjustments for the
FY 2018 IPPS post-reclassified wage
index would be reflected in the final CY
2018 OPPS wage index. (We refer
readers to the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19898 through
19915) and the proposed FY 2018
hospital wage index files posted on the
CMS Web site). We are inviting public
comments on this proposal.
Hospitals that are paid under the
OPPS, but not under the IPPS, do not
have an assigned hospital wage index
under the IPPS. Therefore, for non-IPPS
hospitals paid under the OPPS, it is our
longstanding policy to assign the wage
index that would be applicable if the
hospital were paid under the IPPS,
based on its geographic location and any
applicable wage index adjustments. We
are proposing to continue this policy for
CY 2018. The following is a brief
summary of the major proposed FY
2018 IPPS wage index policies and
adjustments that we are proposing to
apply to these hospitals under the OPPS
for CY 2018. We are inviting public
comments on these proposals. We
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further refer readers to the FY 2018
IPPS/LTCH PPS proposed rule (82 FR
19898 through 19915) for a detailed
discussion of the proposed changes to
the FY 2018 IPPS wage indexes.
It has been our longstanding policy to
allow non-IPPS hospitals paid under the
OPPS to qualify for the out-migration
adjustment if they are located in a
section 505 out-migration county
(section 505 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA)).
Applying this adjustment is consistent
with our policy of adopting IPPS wage
index policies for hospitals paid under
the OPPS. We note that, because nonIPPS hospitals cannot reclassify, they
would be eligible for the out-migration
wage adjustment if they are located in
a section 505 out-migration county. This
is the same out-migration adjustment
policy that would apply if the hospital
were paid under the IPPS. For CY 2018,
we are proposing to continue our policy
of allowing non-IPPS hospitals paid
under the OPPS to qualify for the outmigration adjustment if they are located
in a section 505 out-migration county
(section 505 of the MMA).
As stated earlier, in the FY 2015 IPPS/
LTCH PPS final rule, we adopted the
OMB labor market area delineations
issued by OMB in OMB Bulletin No.
13–01 on February 28, 2013, based on
standards published on June 28, 2010
(75 FR 37246 through 37252) and the
2010 Census data to delineate labor
market areas for purposes of the IPPS
wage index. For IPPS wage index
purposes, for hospitals that were located
in urban CBSAs in FY 2014 but were
designated as rural under these revised
OMB labor market area delineations, we
generally assigned them the urban wage
index value of the CBSA in which they
were physically located for FY 2014 for
a period of 3 fiscal years (79 FR 49957
through 49960). To be consistent, we
applied the same policy to hospitals
paid under the OPPS but not under the
IPPS so that such hospitals will
maintain the wage index of the CBSA in
which they were physically located for
FY 2014 for 3 calendar years (until
December 31, 2017). Because this 3-year
transition will end in CY 2017, it will
no longer be applied in CY 2018.
In addition, under the IPPS, the
imputed floor policy is set to expire
effective October 1, 2017, and in the
IPPS/LTCH PPS proposed rule, we
proposed not to extend the imputed
floor policy for FY 2018 and subsequent
fiscal years (82 FR 19904 through
19905). For purposes of the CY 2018
OPPS, the imputed floor policy is set to
expire effective December 31, 2017, and
consistent with the IPPS, we are
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proposing not to extend the imputed
floor policy beyond this date.
For CMHCs, for CY 2018, we are
proposing to continue to calculate the
wage index by using the postreclassification IPPS wage index based
on the CBSA where the CMHC is
located. As with OPPS hospitals and for
the same reasons, for CMHCs previously
located in urban CBSAs that were
designated as rural under the revised
OMB labor market area delineations in
OMB Bulletin No. 13–01, we finalized a
policy to maintain the urban wage index
value of the CBSA in which they were
physically located for CY 2014 for 3
calendar years (until December 31,
2017). Because this 3-year transition
will end in CY 2017, it will not be
applied in CY 2018. Consistent with our
current policy, the wage index that
applies to CMHCs would include the
rural floor adjustment, but would not
include the imputed floor adjustment
because as discussed above, we are
proposing to not extend the imputed
floor policy beyond December 31, 2107.
The wage index that applies to CMHCs
also would not include the outmigration adjustment because that
adjustment only applies to hospitals.
Table 2 associated with the FY 2018
IPPS/LTCH PPS proposed rule
(available via the Internet on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/
index.html) identifies counties eligible
for the out-migration adjustment and
IPPS hospitals that would receive the
adjustment for FY 2018. We are
including the out-migration adjustment
information from Table 2 associated
with the FY 2018 IPPS/LTCH PPS
proposed rule as Addendum L to this
proposed rule with the addition of nonIPPS hospitals that would receive the
section 505 out-migration adjustment
under the CY 2018 OPPS. Addendum L
is available via the Internet on the CMS
Web site. We refer readers to the CMS
Web site for the OPPS at: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
HospitalOutpatientPPS/. At
this link, readers will find a link to the
proposed FY 2018 IPPS wage index
tables and Addendum L.
D. Proposed Statewide Average Default
CCRs
In addition to using CCRs to estimate
costs from charges on claims for
ratesetting, CMS uses overall hospitalspecific CCRs calculated from the
hospital’s most recent cost report to
determine outlier payments, payments
for pass-through devices, and monthly
interim transitional corridor payments
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under the OPPS during the PPS year.
MACs cannot calculate a CCR for some
hospitals because there is no cost report
available. For these hospitals, CMS uses
the statewide average default CCRs to
determine the payments mentioned
earlier until a hospital’s MAC is able to
calculate the hospital’s actual CCR from
its most recently submitted Medicare
cost report. These hospitals include, but
are not limited to, hospitals that are
new, hospitals that have not accepted
assignment of an existing hospital’s
provider agreement, and hospitals that
have not yet submitted a cost report.
CMS also uses the statewide average
default CCRs to determine payments for
hospitals that appear to have a biased
CCR (that is, the CCR falls outside the
predetermined ceiling threshold for a
valid CCR) or for hospitals in which the
most recent cost report reflects an allinclusive rate status (Medicare Claims
Processing Manual (Pub. 100–04),
Chapter 4, Section 10.11).
In this proposed rule, we are
proposing to update the default ratios
for CY 2018 using the most recent cost
report data. We discussed our policy for
using default CCRs, including setting
the ceiling threshold for a valid CCR, in
33593
the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68594 through
68599) in the context of our adoption of
an outlier reconciliation policy for cost
reports beginning on or after January 1,
2009. For detail on our process for
calculating the statewide average CCRs,
we refer readers to the CY 2018 OPPS
proposed rule Claims Accounting
Narrative that is posted on the CMS
Web site. Table 10 below lists the
proposed statewide average default
CCRs for OPPS services furnished on or
after January 1, 2018, based on proposed
rule data.
TABLE 10—PROPOSED CY 2018 STATEWIDE AVERAGE CCRS
Proposed
CY 2018
default CCR
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
State
Urban/rural
ALASKA ........................................................................
ALASKA ........................................................................
ALABAMA .....................................................................
ALABAMA .....................................................................
ARKANSAS ..................................................................
ARKANSAS ..................................................................
ARIZONA ......................................................................
ARIZONA ......................................................................
CALIFORNIA ................................................................
CALIFORNIA ................................................................
COLORADO .................................................................
COLORADO .................................................................
CONNECTICUT ............................................................
CONNECTICUT ............................................................
DISTRICT OF COLUMBIA ...........................................
DELAWARE ..................................................................
FLORIDA ......................................................................
FLORIDA ......................................................................
GEORGIA .....................................................................
GEORGIA .....................................................................
HAWAII .........................................................................
HAWAII .........................................................................
IOWA ............................................................................
IOWA ............................................................................
IDAHO ..........................................................................
IDAHO ..........................................................................
ILLINOIS .......................................................................
ILLINOIS .......................................................................
INDIANA .......................................................................
INDIANA .......................................................................
KANSAS .......................................................................
KANSAS .......................................................................
KENTUCKY ..................................................................
KENTUCKY ..................................................................
LOUISIANA ...................................................................
LOUISIANA ...................................................................
MASSACHUSETTS ......................................................
MASSACHUSETTS ......................................................
MAINE ..........................................................................
MAINE ..........................................................................
MARYLAND ..................................................................
MARYLAND ..................................................................
MICHIGAN ....................................................................
MICHIGAN ....................................................................
MINNESOTA ................................................................
MINNESOTA ................................................................
MISSOURI ....................................................................
MISSOURI ....................................................................
MISSISSIPPI ................................................................
MISSISSIPPI ................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
URBAN .........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
RURAL ..........................................................................
URBAN .........................................................................
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0.582
0.238
0.191
0.158
0.192
0.201
0.237
0.171
0.176
0.190
0.351
0.204
0.402
0.253
0.279
0.296
0.170
0.141
0.226
0.187
0.333
0.314
0.297
0.247
0.341
0.404
0.232
0.216
0.305
0.217
0.272
0.202
0.192
0.188
0.273
0.200
0.315
0.349
0.419
0.412
0.263
0.228
0.308
0.323
0.374
0.304
0.226
0.243
0.227
0.165
Previous
default CCR
(CY 2017
OPPS
Final rule)
0.449
0.237
0.196
0.158
0.196
0.205
0.238
0.176
0.179
0.188
0.354
0.208
0.402
0.253
0.286
0.288
0.169
0.143
0.230
0.196
0.338
0.319
0.291
0.252
0.341
0.401
0.241
0.209
0.272
0.218
0.269
0.194
0.194
0.189
0.217
0.201
0.316
0.345
0.425
0.413
0.264
0.229
0.295
0.324
0.398
0.319
0.222
0.261
0.224
0.167
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TABLE 10—PROPOSED CY 2018 STATEWIDE AVERAGE CCRS—Continued
Proposed
CY 2018
default CCR
Urban/rural
MONTANA ....................................................................
MONTANA ....................................................................
NORTH CAROLINA .....................................................
NORTH CAROLINA .....................................................
NORTH DAKOTA .........................................................
NORTH DAKOTA .........................................................
NEBRASKA ..................................................................
NEBRASKA ..................................................................
NEW HAMPSHIRE .......................................................
NEW HAMPSHIRE .......................................................
NEW JERSEY ..............................................................
NEW MEXICO ..............................................................
NEW MEXICO ..............................................................
NEVADA .......................................................................
NEVADA .......................................................................
NEW YORK ..................................................................
NEW YORK ..................................................................
OHIO .............................................................................
OHIO .............................................................................
OKLAHOMA .................................................................
OKLAHOMA .................................................................
OREGON ......................................................................
OREGON ......................................................................
PENNSYLVANIA ..........................................................
PENNSYLVANIA ..........................................................
PUERTO RICO .............................................................
RHODE ISLAND ...........................................................
SOUTH CAROLINA ......................................................
SOUTH CAROLINA ......................................................
SOUTH DAKOTA .........................................................
SOUTH DAKOTA .........................................................
TENNESSEE ................................................................
TENNESSEE ................................................................
TEXAS ..........................................................................
TEXAS ..........................................................................
UTAH ............................................................................
UTAH ............................................................................
VIRGINIA ......................................................................
VIRGINIA ......................................................................
VERMONT ....................................................................
VERMONT ....................................................................
WASHINGTON .............................................................
WASHINGTON .............................................................
WISCONSIN .................................................................
WISCONSIN .................................................................
WEST VIRGINIA ..........................................................
WEST VIRGINIA ..........................................................
WYOMING ....................................................................
WYOMING ....................................................................
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
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E. Proposed Adjustment for Rural Sole
Community Hospitals (SCHs) and
Essential Access Community Hospitals
(EACHs) Under Section 1833(t)(13)(B) of
the Act for CY 2018
In the CY 2006 OPPS final rule with
comment period (70 FR 68556), we
finalized a payment increase for rural
sole community hospitals (SCHs) of 7.1
percent for all services and procedures
paid under the OPPS, excluding drugs,
biologicals, brachytherapy sources, and
devices paid under the pass-through
payment policy in accordance with
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section 1833(t)(13)(B) of the Act, as
added by section 411 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA)
(Public Law 108–173). Section
1833(t)(13) of the Act provided the
Secretary the authority to make an
adjustment to OPPS payments for rural
hospitals, effective January 1, 2006, if
justified by a study of the difference in
costs by APC between hospitals in rural
areas and hospitals in urban areas. Our
analysis showed a difference in costs for
rural SCHs. Therefore, for the CY 2006
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0.475
0.376
0.207
0.215
0.366
0.372
0.298
0.231
0.311
0.262
0.201
0.220
0.284
0.194
0.114
0.309
0.286
0.289
0.208
0.220
0.173
0.280
0.336
0.263
0.176
0.549
0.292
0.187
0.186
0.391
0.238
0.170
0.177
0.209
0.171
0.351
0.303
0.193
0.222
0.424
0.340
0.269
0.295
0.349
0.311
0.259
0.292
0.406
0.326
Previous
default CCR
(CY 2017
OPPS
Final rule)
0.450
0.368
0.216
0.223
0.411
0.334
0.294
0.238
0.320
0.279
0.195
0.225
0.280
0.196
0.123
0.309
0.292
0.292
0.207
0.231
0.180
0.280
0.344
0.274
0.179
0.527
0.291
0.185
0.190
0.383
0.229
0.181
0.180
0.214
0.177
0.349
0.315
0.191
0.226
0.426
0.340
0.271
0.294
0.354
0.290
0.266
0.285
0.429
0.311
OPPS, we finalized a payment
adjustment for rural SCHs of 7.1 percent
for all services and procedures paid
under the OPPS, excluding separately
payable drugs and biologicals,
brachytherapy sources, and devices paid
under the pass-through payment policy,
in accordance with section
1833(t)(13)(B) of the Act.
In the CY 2007 OPPS/ASC final rule
with comment period (71 FR 68010 and
68227), for purposes of receiving this
rural adjustment, we revised § 419.43(g)
of the regulations to clarify that
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essential access community hospitals
(EACHs) also are eligible to receive the
rural SCH adjustment, assuming these
entities otherwise meet the rural
adjustment criteria. Currently, two
hospitals are classified as EACHs, and
as of CY 1998, under section 4201(c) of
Public Law 105–33, a hospital can no
longer become newly classified as an
EACH.
This adjustment for rural SCHs is
budget neutral and applied before
calculating outlier payments and
copayments. We stated in the CY 2006
OPPS final rule with comment period
(70 FR 68560) that we would not
reestablish the adjustment amount on an
annual basis, but we may review the
adjustment in the future and, if
appropriate, would revise the
adjustment. We provided the same 7.1
percent adjustment to rural SCHs,
including EACHs, again in CYs 2008
through 2017. Further, in the CY 2009
OPPS/ASC final rule with comment
period (73 FR 68590), we updated the
regulations at § 419.43(g)(4) to specify,
in general terms, that items paid at
charges adjusted to costs by application
of a hospital-specific CCR are excluded
from the 7.1 percent payment
adjustment.
In this CY 2018 OPPS/ASC proposed
rule, for the CY 2018 OPPS, we are
proposing to continue our policy of a
7.1 percent payment adjustment that is
done in a budget neutral manner for
rural SCHs, including EACHs, for all
services and procedures paid under the
OPPS, excluding separately payable
drugs and biologicals, devices paid
under the pass-through payment policy,
and items paid at charges reduced to
costs.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
F. Proposed Payment Adjustment for
Certain Cancer Hospitals for CY 2018
1. Background
Since the inception of the OPPS,
which was authorized by the Balanced
Budget Act of 1997 (BBA) (Pub. L. 105–
33), Medicare has paid the 11 hospitals
that meet the criteria for cancer
hospitals identified in section
1886(d)(1)(B)(v) of the Act under the
OPPS for covered outpatient hospital
services. These cancer hospitals are
exempted from payment under the IPPS.
With the Medicare, Medicaid and
SCHIP Balanced Budget Refinement Act
of 1999 (Pub. L. 106–113), Congress
established section 1833(t)(7) of the Act,
‘‘Transitional Adjustment to Limit
Decline in Payment,’’ to determine
OPPS payments to cancer and children’s
hospitals based on their pre-BBA
payment amount (often referred to as
‘‘held harmless’’).
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As required under section
1833(t)(7)(D)(ii) of the Act, a cancer
hospital receives the full amount of the
difference between payments for
covered outpatient services under the
OPPS and a ‘‘pre-BBA amount.’’ That is,
cancer hospitals are permanently held
harmless to their ‘‘pre-BBA amount,’’
and they receive transitional outpatient
payments (TOPs) or hold harmless
payments to ensure that they do not
receive a payment that is lower in
amount under the OPPS than the
payment amount they would have
received before implementation of the
OPPS, as set forth in section
1833(t)(7)(F) of the Act. The ‘‘pre-BBA
amount’’ is the product of the hospital’s
reasonable costs for covered outpatient
services occurring in the current year
and the base payment-to-cost ratio (PCR)
for the hospital defined in section
1833(t)(7)(F)(ii) of the Act. The ‘‘preBBA amount’’ and the determination of
the base PCR are defined at 42 CFR
419.70(f). TOPs are calculated on
Worksheet E, Part B, of the Hospital
Cost Report or the Hospital Health Care
Complex Cost Report (Form CMS–2552–
96 or Form CMS–2552–10, respectively)
as applicable each year. Section
1833(t)(7)(I) of the Act exempts TOPs
from budget neutrality calculations.
Section 3138 of the Affordable Care
Act amended section 1833(t) of the Act
by adding a new paragraph (18), which
instructs the Secretary to conduct a
study to determine if, under the OPPS,
outpatient costs incurred by cancer
hospitals described in section
1886(d)(1)(B)(v) of the Act with respect
to APC groups exceed outpatient costs
incurred by other hospitals furnishing
services under section 1833(t) of the
Act, as determined appropriate by the
Secretary. Section 1833(t)(18)(A) of the
Act requires the Secretary to take into
consideration the cost of drugs and
biologicals incurred by cancer hospitals
and other hospitals. Section
1833(t)(18)(B) of the Act provides that,
if the Secretary determines that cancer
hospitals’ costs are higher than those of
other hospitals, the Secretary shall
provide an appropriate adjustment
under section 1833(t)(2)(E) of the Act to
reflect these higher costs. In 2011, after
conducting the study required by
section 1833(t)(18)(A) of the Act, we
determined that outpatient costs
incurred by the 11 specified cancer
hospitals were greater than the costs
incurred by other OPPS hospitals. For a
complete discussion regarding the
cancer hospital cost study, we refer
readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74200
through 74201).
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33595
Based on these findings, we finalized
a policy to provide a payment
adjustment to the 11 specified cancer
hospitals that reflects their higher
outpatient costs as discussed in the CY
2012 OPPS/ASC final rule with
comment period (76 FR 74202 through
74206). Specifically, we adopted a
policy to provide additional payments
to the cancer hospitals so that each
cancer hospital’s final PCR for services
provided in a given calendar year is
equal to the weighted average PCR
(which we refer to as the ‘‘target PCR’’)
for other hospitals paid under the OPPS.
The target PCR is set in advance of the
calendar year and is calculated using
the most recent submitted or settled cost
report data that are available at the time
of final rulemaking for the calendar
year. The amount of the payment
adjustment is made on an aggregate
basis at cost report settlement. We note
that the changes made by section
1833(t)(18) of the Act do not affect the
existing statutory provisions that
provide for TOPs for cancer hospitals.
The TOPs are assessed as usual after all
payments, including the cancer hospital
payment adjustment, have been made
for a cost reporting period. For CYs 2012
and 2013, the target PCR for purposes of
the cancer hospital payment adjustment
was 0.91. For CY 2014, the target PCR
for purposes of the cancer hospital
payment adjustment was 0.89. For CY
2015, the target PCR was 0.90. For CY
2016, the target PCR was 0.92, as
discussed in the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70362 through 70363). For CY 2017, the
target PCR was 0.91, as discussed in the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79603 through
7960).
2. Proposed Policy for CY 2018
Section 16002(b) of the 21st Century
Cures Act (Pub. L. 114–255) amended
section 1833(t)(18) of the Act by adding
subparagraph (C), which requires that in
applying 42 CFR 419.43(i), that is, the
payment adjustment for certain cancer
hospitals, for services furnished on or
after January 1, 2018, the target PCR
adjustment be reduced by 1.0
percentage point less than what would
otherwise apply. Section 16002(b) also
provides that, in addition to the
percentage reduction, the Secretary may
consider making an additional
percentage point reduction to the target
PCR that takes into account payment
rates for applicable items and services
described under section 1833(t)(21)(C)
of the Act for hospitals that are not
cancer hospitals described under
section 1886(d)(1)(B)(v) of the Act.
Further, in making any budget
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neutrality adjustment under section
1833(t) of the Act, the Secretary shall
not take into account the reduced
expenditures that result from
application of section 1833(t)(18)(C) of
the Act. In this CY 2018 OPPS/ASC
proposed rule, for CY 2018, we are
proposing to provide additional
payments to the 11 specified cancer
hospitals so that each cancer hospital’s
final PCR is equal to the weighted
average PCR (or ‘‘target PCR’’) for the
other OPPS hospitals using the most
recent submitted or settled cost report
data that are available at the time of the
development of this proposed rule,
reduced by 1.0 percentage point to
comply with section 16002(b) of the
21st Century Cures Act. We are not
proposing an additional reduction
beyond the 1.0 percentage point
reduction required by section 16002(b)
for CY 2018. To calculate the proposed
CY 2018 target PCR, we use the same
extract of cost report data from HCRIS,
as discussed in section II.A. of this
proposed rule, used to estimate costs for
the CY 2018 OPPS. Using these cost
report data, we included data from
Worksheet E, Part B, for each hospital,
using data from each hospital’s most
recent cost report, whether as submitted
or settled.
We then limited the dataset to the
hospitals with CY 2016 claims data that
we used to model the impact of the
proposed CY 2018 APC relative
payment weights (3,701 hospitals)
because it is appropriate to use the same
set of hospitals that we are using to
calibrate the modeled CY 2018 OPPS.
The cost report data for the hospitals in
this dataset were from cost report
periods with fiscal year ends ranging
from 2013 to 2016. We then removed
the cost report data of the 49 hospitals
located in Puerto Rico from our dataset
because we do not believe that their cost
structure reflects the costs of most
hospitals paid under the OPPS and,
therefore, their inclusion may bias the
calculation of hospital-weighted
statistics. We also removed the cost
report data of 16 hospitals because these
hospitals had cost report data that were
not complete (missing aggregate OPPS
payments, missing aggregate cost data,
or missing both), so that all cost reports
in the study would have both the
payment and cost data necessary to
calculate a PCR for each hospital,
leading to a proposed analytic file of
3,636 hospitals with cost report data.
Using this smaller dataset of cost
report data, we estimated that, on
average, the OPPS payments to other
hospitals furnishing services under the
OPPS were approximately 90 percent of
reasonable cost (weighted average PCR
of 0.90). Therefore, after applying the
1.0 percentage point reduction as
required by section 16002(b) of the 21st
Century Cures Act, we are proposing
that the payment amount associated
with the cancer hospital payment
adjustment to be determined at cost
report settlement would be the
additional payment needed to result in
a proposed target PCR equal to 0.89 for
each cancer hospital.
Table 11 below indicates the
proposed estimated percentage increase
in OPPS payments to each cancer
hospital for CY 2018 due to the
proposed cancer hospital payment
adjustment policy. The actual amount of
the CY 2018 cancer hospital payment
adjustment for each cancer hospital will
be determined at cost report settlement
and will depend on each hospital’s CY
2018 payments and costs. We note that
the requirements contained in section
1833(t)(18) of the Act do not affect the
existing statutory provisions that
provide for TOPs for cancer hospitals.
The TOPs will be assessed as usual after
all payments, including the cancer
hospital payment adjustment, have been
made for a cost reporting period.
TABLE 11—PROPOSED ESTIMATED CY 2018 HOSPITAL-SPECIFIC PAYMENT ADJUSTMENT FOR CANCER HOSPITALS TO BE
PROVIDED AT COST REPORT SETTLEMENT
Provider No.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
050146
050660
100079
100271
220162
330154
330354
360242
390196
450076
500138
Hospital name
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
City of Hope Comprehensive Cancer Center ..............................................................
USC Norris Cancer Hospital ........................................................................................
Sylvester Comprehensive Cancer Center ...................................................................
H. Lee Moffitt Cancer Center & Research Institute .....................................................
Dana-Farber Cancer Institute ......................................................................................
Memorial Sloan-Kettering Cancer Center ....................................................................
Roswell Park Cancer Institute ......................................................................................
James Cancer Hospital & Solove Research Institute ..................................................
Fox Chase Cancer Center ...........................................................................................
M.D. Anderson Cancer Center ....................................................................................
Seattle Cancer Care Alliance .......................................................................................
G. Proposed Hospital Outpatient Outlier
Payments
1. Background
The OPPS provides outlier payments
to hospitals to help mitigate the
financial risk associated with high-cost
and complex procedures, where a very
costly service could present a hospital
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Proposed
estimated
percentage
increase in
OPPS
ayments
for CY 2018
due to
payment
adjustment
(%)
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with significant financial loss. As
explained in the CY 2015 OPPS/ASC
final rule with comment period (79 FR
66832 through 66834), we set our
projected target for aggregate outlier
payments at 1.0 percent of the estimated
aggregate total payments under the
OPPS for the prospective year. Outlier
payments are provided on a service-by-
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32.9
11.5
24.3
23.1
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21.4
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76.9
53.9
service basis when the cost of a service
exceeds the APC payment amount
multiplier threshold (the APC payment
amount multiplied by a certain amount)
as well as the APC payment amount
plus a fixed-dollar amount threshold
(the APC payment plus a certain amount
of dollars). In CY 2017, the outlier
threshold was met when the hospital’s
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asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
cost of furnishing a service exceeded
1.75 times (the multiplier threshold) the
APC payment amount and exceeded the
APC payment amount plus $3,825 (the
fixed-dollar amount threshold) (81 FR
79604 through 79606). If the cost of a
service exceeds both the multiplier
threshold and the fixed-dollar
threshold, the outlier payment is
calculated as 50 percent of the amount
by which the cost of furnishing the
service exceeds 1.75 times the APC
payment amount. Beginning with CY
2009 payments, outlier payments are
subject to a reconciliation process
similar to the IPPS outlier reconciliation
process for cost reports, as discussed in
the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68594 through
68599).
It has been our policy to report the
actual amount of outlier payments as a
percent of total spending in the claims
being used to model the OPPS. Our
estimate of total outlier payments as a
percent of total CY 2016 OPPS payment,
using CY 2016 claims available for this
proposed rule, is approximately 1.0
percent of the total aggregated OPPS
payments. Therefore, for CY 2016, we
estimate that we paid the outlier target
of 1.0 percent of total aggregated OPPS
payments.
For this proposed rule, using CY 2016
claims data and CY 2017 payment rates,
we estimate that the aggregate outlier
payments for CY 2017 would be
approximately 1.0 percent of the total
CY 2017 OPPS payments. We are
providing estimated CY 2018 outlier
payments for hospitals and CMHCs with
claims included in the claims data that
we used to model impacts in the
Hospital-Specific Impacts—ProviderSpecific Data file on the CMS Web site
at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/.
2. Proposed Outlier Calculation for CY
2018
In this CY 2018 OPPS/ASC proposed
rule, for CY 2018, we are proposing to
continue our policy of estimating outlier
payments to be 1.0 percent of the
estimated aggregate total payments
under the OPPS. We are proposing that
a portion of that 1.0 percent, an amount
equal to less than 0.01 percent of outlier
payments (or 0.0001 percent of total
OPPS payments) would be allocated to
CMHCs for PHP outlier payments. This
is the amount of estimated outlier
payments that would result from the
proposed CMHC outlier threshold as a
proportion of total estimated OPPS
outlier payments. As discussed in
section VIII.C. of this proposed rule, we
are proposing to continue our
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longstanding policy that if a CMHC’s
cost for partial hospitalization services,
paid under APC 5853 (Partial
Hospitalization for CMHCs), exceeds
3.40 times the payment rate for APC
5853, the outlier payment would be
calculated as 50 percent of the amount
by which the cost exceeds 3.40 times
the proposed APC 5853 payment rate.
For further discussion of CMHC outlier
payments, we refer readers to section
VIII.D. of this proposed rule.
To ensure that the estimated CY 2018
aggregate outlier payments would equal
1.0 percent of estimated aggregate total
payments under the OPPS, we are
proposing that the hospital outlier
threshold be set so that outlier payments
would be triggered when a hospital’s
cost of furnishing a service exceeds 1.75
times the APC payment amount and
exceeds the APC payment amount plus
$4,325.
We calculated this proposed fixeddollar threshold of $4,325 using the
standard methodology most recently
used for CY 2017 (81 FR 79604 through
79605). For purposes of estimating
outlier payments for this proposed rule,
we used the hospital-specific overall
ancillary CCRs available in the April
2017 update to the Outpatient ProviderSpecific File (OPSF). The OPSF
contains provider-specific data, such as
the most current CCRs, which are
maintained by the MACs and used by
the OPPS Pricer to pay claims. The
claims that we use to model each OPPS
update lag by 2 years.
In order to estimate the CY 2018
hospital outlier payments for this
proposed rule, we inflated the charges
on the CY 2016 claims using the same
inflation factor of 1.104055 that we used
to estimate the IPPS fixed-dollar outlier
threshold for the FY 2018 IPPS/LTCH
PPS proposed rule (82 FR 20173). We
used an inflation factor of 1.05074 to
estimate CY 2017 charges from the CY
2016 charges reported on CY 2016
claims. The methodology for
determining this charge inflation factor
is discussed in the FY 2017 IPPS/LTCH
PPS final rule (81 FR 57286). As we
stated in the CY 2005 OPPS final rule
with comment period (69 FR 65845), we
believe that the use of these charge
inflation factors are appropriate for the
OPPS because, with the exception of the
inpatient routine service cost centers,
hospitals use the same ancillary and
outpatient cost centers to capture costs
and charges for inpatient and outpatient
services.
As noted in the CY 2007 OPPS/ASC
final rule with comment period (71 FR
68011), we are concerned that we could
systematically overestimate the OPPS
hospital outlier threshold if we did not
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33597
apply a CCR inflation adjustment factor.
Therefore, we are proposing to apply the
same CCR inflation adjustment factor
that we proposed to apply for the FY
2018 IPPS outlier calculation to the
CCRs used to simulate the proposed CY
2018 OPPS outlier payments to
determine the fixed-dollar threshold.
Specifically, for CY 2018, we proposed
to apply an adjustment factor of
0.979187 to the CCRs that were in the
April 2017 OPSF to trend them forward
from CY 2017 to CY 2018. The
methodology for calculating this
proposed adjustment was discussed in
the FY 2018 IPPS/LTCH PPS proposed
rule (82 FR 20173).
To model hospital outlier payments
for the proposed rule, we applied the
overall CCRs from the April 2017 OPSF
after adjustment (using the proposed
CCR inflation adjustment factor of
0.979187 to approximate CY 2018 CCRs)
to charges on CY 2016 claims that were
adjusted (using the proposed charge
inflation factor of 1.104055 to
approximate CY 2018 charges). We
simulated aggregated CY 2018 hospital
outlier payments using these costs for
several different fixed-dollar thresholds,
holding the 1.75 multiplier threshold
constant and assuming that outlier
payments would continue to be made at
50 percent of the amount by which the
cost of furnishing the service would
exceed 1.75 times the APC payment
amount, until the total outlier payments
equaled 1.0 percent of aggregated
estimated total CY 2018 OPPS
payments. We estimated that a proposed
fixed-dollar threshold of $4,325,
combined with the proposed multiplier
threshold of 1.75 times the APC
payment rate, would allocate 1.0
percent of aggregated total OPPS
payments to outlier payments. For
CMHCs, we proposed that, if a CMHC’s
cost for partial hospitalization services,
paid under APC 5853, exceeds 3.40
times the payment rate for APC 5853,
the outlier payment would be calculated
as 50 percent of the amount by which
the cost exceeds 3.40 times the APC
5853 payment rate.
Section 1833(t)(17)(A) of the Act,
which applies to hospitals as defined
under section 1886(d)(1)(B) of the Act,
requires that hospitals that fail to report
data required for the quality measures
selected by the Secretary, in the form
and manner required by the Secretary
under section 1833(t)(17)(B) of the Act,
incur a 2.0 percentage point reduction
to their OPD fee schedule increase
factor; that is, the annual payment
update factor. The application of a
reduced OPD fee schedule increase
factor results in reduced national
unadjusted payment rates that will
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asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
apply to certain outpatient items and
services furnished by hospitals that are
required to report outpatient quality
data and that fail to meet the Hospital
OQR Program requirements. For
hospitals that fail to meet the Hospital
OQR Program requirements, we are
proposing to continue the policy that we
implemented in CY 2010 that the
hospitals’ costs will be compared to the
reduced payments for purposes of
outlier eligibility and payment
calculation. For more information on
the Hospital OQR Program, we refer
readers to section XIII. of this proposed
rule.
H. Proposed Calculation of an Adjusted
Medicare Payment From the National
Unadjusted Medicare Payment
The basic methodology for
determining prospective payment rates
for HOPD services under the OPPS is set
forth in existing regulations at 42 CFR
part 419, subparts C and D. For this CY
2018 OPPS/ASC proposed rule, the
proposed payment rate for most services
and procedures for which payment is
made under the OPPS is the product of
the proposed conversion factor
calculated in accordance with section
II.B. of this proposed rule and the
proposed relative payment weight
determined under section II.A. of this
proposed rule. Therefore, the proposed
national unadjusted payment rate for
most APCs contained in Addendum A
to this proposed rule (which is available
via the Internet on the CMS Web site)
and for most HCPCS codes to which
separate payment under the OPPS has
been assigned in Addendum B to this
proposed rule (which is available via
the Internet on the CMS Web site) was
calculated by multiplying the proposed
CY 2018 scaled weight for the APC by
the proposed CY 2018 conversion factor.
We note that section 1833(t)(17) of the
Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of
the Act, requires that hospitals that fail
to submit data required to be submitted
on quality measures selected by the
Secretary, in the form and manner and
at a time specified by the Secretary,
incur a reduction of 2.0 percentage
points to their OPD fee schedule
increase factor, that is, the annual
payment update factor. The application
of a reduced OPD fee schedule increase
factor results in reduced national
unadjusted payment rates that apply to
certain outpatient items and services
provided by hospitals that are required
to report outpatient quality data and
that fail to meet the Hospital OQR
Program (formerly referred to as the
Hospital Outpatient Quality Data
Reporting Program (HOP QDRP))
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requirements. For further discussion of
the payment reduction for hospitals that
fail to meet the requirements of the
Hospital OQR Program, we refer readers
to section XIII. of this proposed rule.
We demonstrate below the steps on
how to determine the APC payments
that will be made in a calendar year
under the OPPS to a hospital that fulfills
the Hospital OQR Program requirements
and to a hospital that fails to meet the
Hospital OQR Program requirements for
a service that has any of the following
status indicator assignments: ‘‘J1’’, ‘‘J2’’,
‘‘P’’, ‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’, ‘‘Q4’’, ‘‘R’’, ‘‘S’’,
‘‘T’’, ‘‘U’’, or ‘‘V’’ (as defined in
Addendum D1 to this proposed rule,
which is available via the Internet on
the CMS Web site), in a circumstance in
which the multiple procedure discount
does not apply, the procedure is not
bilateral, and conditionally packaged
services (status indicator of ‘‘Q1’’ and
‘‘Q2’’) qualify for separate payment. We
note that, although blood and blood
products with status indicator ‘‘R’’ and
brachytherapy sources with status
indicator ‘‘U’’ are not subject to wage
adjustment, they are subject to reduced
payments when a hospital fails to meet
the Hospital OQR Program
requirements.
Individual providers interested in
calculating the payment amount that
they would receive for a specific service
from the national unadjusted payment
rates presented in Addenda A and B to
this proposed rule (which are available
via the Internet on the CMS Web site)
should follow the formulas presented in
the following steps. For purposes of the
payment calculations below, we refer to
the proposed national unadjusted
payment rate for hospitals that meet the
requirements of the Hospital OQR
Program as the ‘‘full’’ national
unadjusted payment rate. We refer to
the proposed national unadjusted
payment rate for hospitals that fail to
meet the requirements of the Hospital
OQR Program as the ‘‘reduced’’ national
unadjusted payment rate. The reduced
national unadjusted payment rate is
calculated by multiplying the reporting
ratio of 0.980 times the ‘‘full’’ national
unadjusted payment rate. The proposed
national unadjusted payment rate used
in the calculations below is either the
full national unadjusted payment rate or
the reduced national unadjusted
payment rate, depending on whether the
hospital met its Hospital OQR Program
requirements in order to receive the
proposed full CY 2018 OPPS fee
schedule increase factor.
Step 1. Calculate 60 percent (the
labor-related portion) of the national
unadjusted payment rate. Since the
initial implementation of the OPPS, we
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have used 60 percent to represent our
estimate of that portion of costs
attributable, on average, to labor. We
refer readers to the April 7, 2000 OPPS
final rule with comment period (65 FR
18496 through 18497) for a detailed
discussion of how we derived this
percentage. During our regression
analysis for the payment adjustment for
rural hospitals in the CY 2006 OPPS
final rule with comment period (70 FR
68553), we confirmed that this laborrelated share for hospital outpatient
services is appropriate.
The formula below is a mathematical
representation of Step 1 and identifies
the labor-related portion of a specific
payment rate for a specific service.
X is the labor-related portion of the
national unadjusted payment rate.
X = .60 * (national unadjusted payment
rate).
Step 2. Determine the wage index area
in which the hospital is located and
identify the wage index level that
applies to the specific hospital. We note
that, under the proposed CY 2018 OPPS
policy for continuing to use the OMB
labor market area delineations based on
the 2010 Decennial Census data for the
wage indexes used under the IPPS, a
hold harmless policy for the wage index
may apply, as discussed in section II.C.
of this proposed rule. The proposed
wage index values assigned to each area
reflect the geographic statistical areas
(which are based upon OMB standards)
to which hospitals are proposed to be
assigned for FY 2018 under the IPPS,
reclassifications through the MGCRB,
section 1886(d)(8)(B) ‘‘Lugar’’ hospitals,
reclassifications under section
1886(d)(8)(E) of the Act, as defined in
§ 412.103 of the regulations, and
hospitals designated as urban under
section 601(g) of Public Law 98–21. For
further discussion of the proposed
changes to the FY 2018 IPPS wage
indexes, as applied to the CY 2018
OPPS, we refer readers to section II.C.
of this proposed rule. We are proposing
to continue to apply a wage index floor
of 1.00 to frontier States, in accordance
with section 10324 of the Affordable
Care Act of 2010.
Step 3. Adjust the wage index of
hospitals located in certain qualifying
counties that have a relatively high
percentage of hospital employees who
reside in the county, but who work in
a different county with a higher wage
index, in accordance with section 505 of
Public Law 108–173. Addendum L to
this proposed rule (which is available
via the Internet on the CMS Web site)
contains the qualifying counties and the
associated wage index increase
developed for the FY 2018 IPPS, which
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are listed in Table 2 in the FY 2018
IPPS/LTCH PPS proposed rule available
via the Internet on the CMS Web site at:
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
AcuteInpatientPPS/. This
step is to be followed only if the
hospital is not reclassified or
redesignated under section 1886(d)(8) or
section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage
index determined under Steps 2 and 3
by the amount determined under Step 1
that represents the labor-related portion
of the national unadjusted payment rate.
The formula below is a mathematical
representation of Step 4 and adjusts the
labor-related portion of the national
unadjusted payment rate for the specific
service by the wage index.
Xa is the labor-related portion of the
national unadjusted payment rate
(wage adjusted).
Xa = .60 * (national unadjusted payment
rate) * applicable wage index.
Step 5. Calculate 40 percent (the
nonlabor-related portion) of the national
unadjusted payment rate and add that
amount to the resulting product of Step
4. The result is the wage index adjusted
payment rate for the relevant wage
index area.
The formula below is a mathematical
representation of Step 5 and calculates
the remaining portion of the national
payment rate, the amount not
attributable to labor, and the adjusted
payment for the specific service.
Y is the nonlabor-related portion of the
national unadjusted payment rate.
Y = .40 * (national unadjusted payment
rate).
Adjusted Medicare Payment = Y + Xa.
Step 6. If a provider is an SCH, as set
forth in the regulations at § 412.92, or an
EACH, which is considered to be an
SCH under section 1886(d)(5)(D)(iii)(III)
of the Act, and located in a rural area,
as defined in § 412.64(b), or is treated as
being located in a rural area under
§ 412.103, multiply the wage index
adjusted payment rate by 1.071 to
calculate the total payment.
The formula below is a mathematical
representation of Step 6 and applies the
rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or
EACH) = Adjusted Medicare
Payment * 1.071.
We are providing examples below of
the calculation of both the full and
reduced national unadjusted payment
rates that will apply to certain
outpatient items and services performed
by hospitals that meet and that fail to
meet the Hospital OQR Program
requirements, using the steps outlined
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above. For purposes of this example, we
used a provider that is located in
Brooklyn, New York that is assigned to
CBSA 35614. This provider bills one
service that is assigned to APC 5071
(Level 1 Excision/Biopsy/Incision and
Drainage). The proposed CY 2018 full
national unadjusted payment rate for
APC 5071 is approximately $552.34.
The proposed reduced national
unadjusted payment rate for APC 5071
for a hospital that fails to meet the
Hospital OQR Program requirements is
approximately $541.29. This proposed
reduced rate is calculated by
multiplying the proposed reporting ratio
of 0.980 by the proposed full unadjusted
payment rate for APC 5071.
The proposed FY 2018 wage index for
a provider located in CBSA 35614 in
New York is 1.2892. The labor-related
portion of the proposed full national
unadjusted payment is approximately
$427.25 (.60 * $552.34 * 1.2892). The
labor-related portion of the proposed
reduced national unadjusted payment is
approximately $418.70 (.60 * $541.29 *
1.2892). The nonlabor-related portion of
the proposed full national unadjusted
payment is approximately $220.94 (.40
* $552.34). The nonlabor-related portion
of the proposed reduced national
unadjusted payment is approximately
$216.52 (.40 * $541.29). The sum of the
labor-related and nonlabor-related
portions of the proposed full national
adjusted payment is approximately
$648.19 ($427.25 + $220.94). The sum of
the portions of the proposed reduced
national adjusted payment is
approximately $635.22 ($418.70 +
$216.52).
I. Proposed Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act
requires the Secretary to set rules for
determining the unadjusted copayment
amounts to be paid by beneficiaries for
covered OPD services. Section
1833(t)(8)(C)(ii) of the Act specifies that
the Secretary must reduce the national
unadjusted copayment amount for a
covered OPD service (or group of such
services) furnished in a year in a
manner so that the effective copayment
rate (determined on a national
unadjusted basis) for that service in the
year does not exceed a specified
percentage. As specified in section
1833(t)(8)(C)(ii)(V) of the Act, the
effective copayment rate for a covered
OPD service paid under the OPPS in CY
2006, and in calendar years thereafter,
shall not exceed 40 percent of the APC
payment rate. Section 1833(t)(3)(B)(ii) of
the Act provides that, for a covered OPD
service (or group of such services)
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33599
furnished in a year, the national
unadjusted copayment amount cannot
be less than 20 percent of the OPD fee
schedule amount. However, section
1833(t)(8)(C)(i) of the Act limits the
amount of beneficiary copayment that
may be collected for a procedure
performed in a year to the amount of the
inpatient hospital deductible for that
year.
Section 4104 of the Affordable Care
Act eliminated the Medicare Part B
coinsurance for preventive services
furnished on and after January 1, 2011,
that meet certain requirements,
including flexible sigmoidoscopies and
screening colonoscopies, and waived
the Part B deductible for screening
colonoscopies that become diagnostic
during the procedure. Our discussion of
the changes made by the Affordable
Care Act with regard to copayments for
preventive services furnished on and
after January 1, 2011, may be found in
section XII.B. of the CY 2011 OPPS/ASC
final rule with comment period (75 FR
72013).
2. Proposed OPPS Copayment Policy
For CY 2018, we are proposing to
determine copayment amounts for new
and revised APCs using the same
methodology that we implemented
beginning in CY 2004. (We refer readers
to the November 7, 2003 OPPS final rule
with comment period (68 FR 63458).) In
addition, we are proposing to use the
same standard rounding principles that
we have historically used in instances
where the application of our standard
copayment methodology would result in
a copayment amount that is less than 20
percent and cannot be rounded, under
standard rounding principles, to 20
percent. (We refer readers to the CY
2008 OPPS/ASC final rule with
comment period (72 FR 66687) in which
we discuss our rationale for applying
these rounding principles.) The
proposed national unadjusted
copayment amounts for services payable
under the OPPS that would be effective
January 1, 2018 are included in
Addenda A and B to this proposed rule
(which are available via the Internet on
the CMS Web site).
As discussed in section XIII.E. of this
proposed, for CY 2018, the proposed
Medicare beneficiary’s minimum
unadjusted copayment and national
unadjusted copayment for a service to
which a reduced national unadjusted
payment rate applies will equal the
product of the reporting ratio and the
national unadjusted copayment, or the
product of the reporting ratio and the
minimum unadjusted copayment,
respectively, for the service.
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We note that OPPS copayments may
increase or decrease each year based on
changes in the calculated APC payment
rates due to updated cost report and
claims data, and any changes to the
OPPS cost modeling process. However,
as described in the CY 2004 OPPS final
rule with comment period, the
development of the copayment
methodology generally moves
beneficiary copayments closer to 20
percent of OPPS APC payments (68 FR
63458 through 63459).
In the CY 2004 OPPS final rule with
comment period (68 FR 63459), we
adopted a new methodology to calculate
unadjusted copayment amounts in
situations including reorganizing APCs,
and we finalized the following rules to
determine copayment amounts in CY
2004 and subsequent years.
• When an APC group consists solely
of HCPCS codes that were not paid
under the OPPS the prior year because
they were packaged or excluded or are
new codes, the unadjusted copayment
amount would be 20 percent of the APC
payment rate.
• If a new APC that did not exist
during the prior year is created and
consists of HCPCS codes previously
assigned to other APCs, the copayment
amount is calculated as the product of
the APC payment rate and the lowest
coinsurance percentage of the codes
comprising the new APC.
• If no codes are added to or removed
from an APC and, after recalibration of
its relative payment weight, the new
payment rate is equal to or greater than
the prior year’s rate, the copayment
amount remains constant (unless the
resulting coinsurance percentage is less
than 20 percent).
• If no codes are added to or removed
from an APC and, after recalibration of
its relative payment weight, the new
payment rate is less than the prior year’s
rate, the copayment amount is
calculated as the product of the new
payment rate and the prior year’s
coinsurance percentage.
• If HCPCS codes are added to or
deleted from an APC and, after
recalibrating its relative payment
weight, holding its unadjusted
copayment amount constant results in a
decrease in the coinsurance percentage
for the reconfigured APC, the
copayment amount would not change
(unless retaining the copayment amount
would result in a coinsurance rate less
than 20 percent).
• If HCPCS codes are added to an
APC and, after recalibrating its relative
payment weight, holding its unadjusted
copayment amount constant results in
an increase in the coinsurance
percentage for the reconfigured APC, the
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copayment amount would be calculated
as the product of the payment rate of the
reconfigured APC and the lowest
coinsurance percentage of the codes
being added to the reconfigured APC.
We noted in the CY 2004 OPPS final
rule with comment period that we
would seek to lower the copayment
percentage for a service in an APC from
the prior year if the copayment
percentage was greater than 20 percent.
We noted that this principle was
consistent with section 1833(t)(8)(C)(ii)
of the Act, which accelerates the
reduction in the national unadjusted
coinsurance rate so that beneficiary
liability will eventually equal 20
percent of the OPPS payment rate for all
OPPS services to which a copayment
applies, and with section 1833(t)(3)(B)
of the Act, which achieves a 20-percent
copayment percentage when fully
phased in and gives the Secretary the
authority to set rules for determining
copayment amounts for new services.
We further noted that the use of this
methodology would, in general, reduce
the beneficiary coinsurance rate and
copayment amount for APCs for which
the payment rate changes as the result
of the reconfiguration of APCs and/or
recalibration of relative payment
weights (68 FR 63459).
3. Proposed Calculation of an Adjusted
Copayment Amount for an APC Group
Individuals interested in calculating
the national copayment liability for a
Medicare beneficiary for a given service
provided by a hospital that met or failed
to meet its Hospital OQR Program
requirements should follow the
formulas presented in the following
steps.
Step 1. Calculate the beneficiary
payment percentage for the APC by
dividing the APC’s national unadjusted
copayment by its payment rate. For
example, using APC 5071, $110.47 is
approximately 20 percent of the
proposed full national unadjusted
payment rate of $552.34. For APCs with
only a minimum unadjusted copayment
in Addenda A and B to this proposed
rule (which are available via the Internet
on the CMS Web site), the beneficiary
payment percentage is 20 percent.
The formula below is a mathematical
representation of Step 1 and calculates
the national copayment as a percentage
of national payment for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for
APC/national unadjusted payment
rate for APC.
Step 2. Calculate the appropriate
wage-adjusted payment rate for the APC
for the provider in question, as
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indicated in Steps 2 through 4 under
section II.H. of this proposed rule.
Calculate the rural adjustment for
eligible providers as indicated in Step 6
under section II.H. of this proposed rule.
Step 3. Multiply the percentage
calculated in Step 1 by the payment rate
calculated in Step 2. The result is the
wage-adjusted copayment amount for
the APC. The formula below is a
mathematical representation of Step 3
and applies the beneficiary payment
percentage to the adjusted payment rate
for a service calculated under section
II.H. of this proposed rule, with and
without the rural adjustment, to
calculate the adjusted beneficiary
copayment for a given service.
Wage-adjusted copayment amount for
the APC = Adjusted Medicare
Payment * B.
Wage-adjusted copayment amount for
the APC (SCH or EACH) =
(Adjusted Medicare Payment *
1.071) * B.
Step 4. For a hospital that failed to
meet its Hospital OQR Program
requirements, multiply the copayment
calculated in Step 3 by the reporting
ratio of 0.980.
The proposed unadjusted copayments
for services payable under the OPPS
that would be effective January 1, 2018,
are shown in Addenda A and B to this
proposed rule (which are available via
the Internet on the CMS Web site). We
note that the proposed national
unadjusted payment rates and
copayment rates shown in Addenda A
and B to this proposed rule reflect the
proposed CY 2018 OPD fee schedule
increase factor discussed in section II.B.
of this proposed rule.
In addition, as noted above, section
1833(t)(8)(C)(i) of the Act limits the
amount of beneficiary copayment that
may be collected for a procedure
performed in a year to the amount of the
inpatient hospital deductible for that
year.
III. Proposed OPPS Ambulatory
Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New
CPT and Level II HCPCS Codes
CPT and Level II HCPCS codes are
used to report procedures, services,
items, and supplies under the hospital
OPPS. Specifically, CMS recognizes the
following codes on OPPS claims:
• Category I CPT codes, which
describe surgical procedures and
medical services;
• Category III CPT codes, which
describe new and emerging
technologies, services, and procedures;
and
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• Level II HCPCS codes, which are
used primarily to identify products,
supplies, temporary procedures, and
services not described by CPT codes.
CPT codes are established by the
American Medical Association (AMA)
and the Level II HCPCS codes are
established by the CMS HCPCS
Workgroup. These codes are updated
and changed throughout the year. CPT
and HCPCS code changes that affect the
OPPS are published both through the
annual rulemaking cycle and through
the OPPS quarterly update Change
Requests (CRs). CMS releases new Level
II HCPCS codes to the public or
recognizes the release of new CPT codes
by the AMA and makes these codes
effective (that is, the codes can be
reported on Medicare claims) outside of
the formal rulemaking process via OPPS
quarterly update CRs. Based on our
review, we assign the new CPT and
Level II HCPCS codes to interim status
indicators (SIs) and APCs. These interim
assignments are finalized in the OPPS/
ASC final rules. This quarterly process
offers hospitals access to codes that may
more accurately describe items or
services furnished and provides
payment or more accurate payment for
these items or services in a timelier
manner than if we waited for the annual
rulemaking process. We solicit public
comments on these new codes and
finalize our proposals related to these
codes through our annual rulemaking
process.
We note that, under the OPPS, the
APC assignment determines the
payment rate for an item, procedure, or
service. Those items, procedures, or
services not paid separately under the
hospital OPPS are assigned to
appropriate status indicators. Certain
payment status indicators provide
separate payment, while other payment
status indicators do not. Section XI. of
this proposed rule discusses the various
status indicators used under the OPPS.
In Table 12 below, we summarize our
current process for updating codes
through our OPPS quarterly update CRs,
seeking public comments, and finalizing
the treatment of these new codes under
the OPPS.
TABLE 12—COMMENT TIMEFRAME FOR NEW OR REVISED HCPCS CODES
OPPS quarterly update CR
Type of code
Effective date
April l, 2017 .......................
Level II HCPCS Codes .....
April 1, 2017 ......................
CY 2018 OPPS/ASC proposed rule.
July 1, 2017 .......................
Level II HCPCS Codes .....
July 1, 2017 ......................
CY 2018 OPPS/ASC proposed rule.
July 1, 2017 ......................
CY 2018 OPPS/ASC proposed rule.
October 1, 2017 ................
Category I (certain vaccine
codes) and III CPT
codes.
Level II HCPCS Codes .....
October 1, 2017 ................
January 1, 2018 ................
Level II HCPCS Codes .....
January 1, 2018 ................
Category I and III CPT
Codes.
January 1, 2018 ................
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC proposed rule.
1. Proposed Treatment of New HCPCS
Codes That Were Effective April 1, 2017
for Which We Are Soliciting Public
Comments in This CY 2018 OPPS/ASC
Proposed Rule
Through the April 2017 OPPS
quarterly update CR (Transmittal 3728,
Comments sought
Change Request 10005, dated March 3,
2017), we made effective six new Level
II HCPCS codes for separate payment
under the OPPS. In this CY 2018 OPPS/
ASC proposed rule, we are soliciting
public comments on the proposed APC
and status indicator assignments for
When finalized
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
CY 2019 OPPS/ASC final
rule with comment period.
CY 2019 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
these Level II HCPCS codes, which are
listed in Table 13 of this proposed rule.
The proposed payment rates for these
codes, where applicable, can be found
in Addendum B to this proposed rule
(which is available via the Internet on
the CMS Web site).
TABLE 13—NEW LEVEL II HCPCS CODES EFFECTIVE APRIL 1, 2017
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CY 2017 HCPCS code
CY 2017 long descriptor
Proposed CY
2018 SI
C9484 ................................
C9485 ................................
C9486 ................................
C9487 * ..............................
C9488 ................................
Injection, eteplirsen, 10 mg ......................................................................................
Injection, olaratumab, 10 mg ...................................................................................
Injection, granisetron extended release, 0.1 mg .....................................................
Ustekinumab, for intravenous injection, 1 mg .........................................................
Injection, conivaptan hydrochloride, 1 mg ...............................................................
G
G
G
G
G
Proposed CY
2018 APC
9484
9485
9486
9487
9488
* HCPCS code C9487, which was effective April 1, 2017, was deleted June 30, 2017 and replaced with HCPCS code Q9989 (Ustekinumab, for
intravenous injection, 1 mg) effective July 1, 2017.
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2. Proposed Treatment of New HCPCS
Codes That Were Effective July 1, 2017
for Which We Are Soliciting Public
Comments in This CY 2018 OPPS/ASC
Proposed Rule
Through the July 2017 OPPS quarterly
update CR (Transmittal 3783, Change
Request 10122, dated May 26, 2017), we
made 10 new Category III CPT codes
and 13 Level II HCPCS codes effective
July 1, 2017 and assigned them to
appropriate interim OPPS status
indicators and APCs.
Three HCPCS codes are no longer
payable under the OPPS because they
have been replaced with more specific
or different codes effective July 1, 2017.
In particular, the coverage indicator for
HCPCS codes J1725 (Injection,
hydroxyprogesterone caproate, 1 mg)
and P9072 (Platelets, pheresis, pathogen
reduced or rapid bacterial tested, each
unit) was revised to ‘‘Not Payable by
Medicare’’ because these codes were
replaced with more specific HCPCS
codes. HCPCS code J1725 was replaced
with HCPCS codes Q9986, and HCPCS
code P9072 was replaced with HCPCS
code Q9988 (Platelets, pheresis,
pathogen reduced, each unit). Further,
HCPCS code C9487 (Ustekinumab, for
intravenous injection, 1 mg) was deleted
June 30, 2017 and replaced with HCPCS
code Q9989 effective July 1, 2017.
Because HCPCS code Q9989 describes
the same drug as HCPCS code C9487,
we are proposing to continue the drug’s
pass-through payment status and to
assign HCPCS code Q9989 to the same
APC and status indicators as its
predecessor HCPCS code C9487, as
shown in Table 14.
In this CY 2018 OPPS/ASC proposed
rule, we are soliciting public comments
on the proposed APC and status
indicator assignments for CY 2018 for
the CPT and Level II HCPCS codes
implemented on July 1, 2017, all of
which are listed in Table 14 below. The
proposed payment rates and status
indicators for these codes, where
applicable, can be found in Addendum
B to this proposed rule (which is
available via the Internet on the CMS
Web site).
TABLE 14—NEW CATEGORY III CPT AND LEVEL II HCPCS CODES EFFECTIVE JULY 1, 2017
CY 2017 HCPCS code
C9489
C9490
C9745
C9746
................................
................................
................................
................................
C9747 ................................
K0553 ................................
K0554 ................................
Q9984 ................................
Q9985 ................................
Q9986 * ..............................
Q9987 ................................
Q9988 ................................
Q9989# ..............................
0469T .................................
0470T .................................
0471T .................................
0472T .................................
0473T .................................
0474T .................................
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
0475T .................................
0476T .................................
0477T .................................
0478T .................................
Proposed CY
2018 SI
CY 2017 long descriptor
Injection, nusinersen, 0.1 mg .................................................................................
Injection, bezlotoxumab, 10 mg ..............................................................................
Nasal endoscopy, surgical; balloon dilation of eustachian tube ............................
Transperineal implantation of permanent adjustable balloon continence device,
with cystourethroscopy, when performed and/or fluoroscopy, when performed.
Ablation of prostate, transrectal, high intensity focused ultrasound (HIFU), including imaging guidance.
Supply allowance for therapeutic continuous glucose monitor (CGM), includes
all supplies and accessories, 1 month supply = 1 Unit Of Service.
Receiver (monitor), dedicated, for use with therapeutic glucose continuous monitor system.
Levonorgestrel-releasing intrauterine contraceptive system (Kyleena), 19.5 mg ..
Injection, hydroxyprogesterone caproate, not otherwise specified, 10 mg ............
Injection, hydroxyprogesterone caproate (Makena), 10 mg ...................................
Pathogen(s) test for platelets .................................................................................
Platelets, pheresis, pathogen reduced, each unit ..................................................
Ustekinumab, for intravenous injection, 1 mg ........................................................
Retinal polarization scan, ocular screening with on-site automated results, bilateral.
Optical coherence tomography (OCT) for microstructural and morphological imaging of skin, image acquisition, interpretation, and report; first lesion.
Optical coherence tomography (OCT) for microstructural and morphological imaging of skin, image acquisition, interpretation, and report; each additional lesion (List separately in addition to code for primary procedure).
Device evaluation, interrogation, and initial programming of intra- ocular retinal
electrode array (eg, retinal prosthesis), in person, with iterative adjustment of
the implantable device to test functionality, select optimal permanent programmed values with analysis, including visual training, with review and report by a qualified health care professional.
Device evaluation and interrogation of intra-ocular retinal electrode array (eg,
retinal prosthesis), in person, including reprogramming and visual training,
when performed, with review and report by a qualified health care professional.
Insertion of anterior segment aqueous drainage device, with creation of intraocular reservoir, internal approach, into the supraciliary space.
Recording of fetal magnetic cardiac signal using at least 3 channels; patient recording and storage, data scanning with signal extraction, technical analysis
and result, as well as supervision, review, and interpretation of report by a
physician or other qualified health care professional.
Recording of fetal magnetic cardiac signal using at least 3 channels; patient recording, data scanning, with raw electronic signal transfer of data and storage.
Recording of fetal magnetic cardiac signal using at least 3 channels; signal extraction, technical analysis, and result.
Recording of fetal magnetic cardiac signal using at least 3 channels; review, interpretation, report by physician or other qualified health care professional.
Proposed CY
2018 APC
G
G
J1
J1
9489
9490
5165
5377
J1
5376
Y
N/A
Y
N/A
E1
N
K
S
R
G
E1
N/A
N/A
9074
1493
9536
9487
N/A
M
N/A
N
N/A
Q1
5743
Q1
5742
J1
5492
M
N/A
Q1
5734
Q1
5734
M
N/A
* HCPCS code J1725 (Injection, hydroxyprogesterone caproate, 1 mg) was replaced with HCPCS code Q9986 effective July 1, 2017.
# HCPCS code C9487, which was effective April 1, 2017, was replaced with HCPCS code Q9989 (Ustekinumab, for intravenous injection, 1
mg) effective July 1, 2017.
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3. Proposed Process for New Level II
HCPCS Codes That Will Be Effective
October 1, 2017 and January 1, 2018 for
Which We Will Be Soliciting Public
Comments in the CY 2018 OPPS/ASC
Final Rule With Comment Period
As has been our practice in the past,
we will solicit comments on those new
Level II HCPCS codes that are effective
October 1, 2017 and January 1, 2018 in
the CY 2018 OPPS/ASC final rule with
comment period, thereby allowing us to
finalize the status indicators, APCs, and
payment rates for the codes in the CY
2019 OPPS/ASC final rule with
comment period. These codes will be
released to the public through the
October and January OPPS quarterly
update CRs and via the CMS HCPCS
Web site (for Level II HCPCS codes).
For CY 2018, we are proposing to
continue our established policy of
assigning comment indicator ‘‘NI’’ in
Addendum B to the OPPS/ASC final
rule with comment period to those new
Level II HCPCS codes that are effective
October 1, 2017 and January 1, 2018 to
indicate that we are assigning them an
interim payment status, which is subject
to public comment. We will be inviting
public comments in the CY 2018 OPPS/
ASC final rule with comment period on
the status indicator, APC assignments,
and payment rates for these codes, if
applicable, which would then be
finalized in the CY 2019 OPPS/ASC
final rule with comment period.
4. Proposed Treatment of New and
Revised CY 2018 Category I and III CPT
Codes That Will Be Effective January 1,
2018 for Which We Are Soliciting
Public Comments in This CY 2018
OPPS/ASC Proposed Rule
In the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66841
through 66844), we finalized a revised
process of assigning APC and status
indicators for new and revised Category
I and III CPT codes that would be
effective January 1. Specifically, for the
new/revised CPT codes that we receive
in a timely manner from the AMA’s CPT
Editorial Panel, we finalized our
proposal to include the codes that
would be effective January 1 in the
OPPS/ASC proposed rules, along with
proposed APC and status indicator
assignments for them, and to finalize the
APC and status indicator assignments in
the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For
those new/revised CPT codes that were
received too late for inclusion in the
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OPPS/ASC proposed rule, we finalized
our proposal to establish and use
HCPCS G-codes that mirror the
predecessor CPT codes and retain the
current APC and status indicator
assignments for a year until we can
propose APC and status indicator
assignments in the following year’s
rulemaking cycle. We note that even if
we find that we need to create HCPCS
G-codes in place of certain CPT codes
for the MPFS proposed rule, we do not
anticipate that these HCPCS G-codes
will always be necessary for OPPS
purposes. We will make every effort to
include proposed APC and status
indicator assignments for all new and
revised CPT codes that the AMA makes
publicly available in time for us to
include them in the proposed rule, and
to avoid the resort to HCPCS G-codes
and the resulting delay in utilization of
the most current CPT codes. Also, we
finalized our proposal to make interim
APC and status indicator assignments
for CPT codes that are not available in
time for the proposed rule and that
describe wholly new services (such as
new technologies or new surgical
procedures), solicit public comments,
and finalize the specific APC and status
indicator assignments for those codes in
the following year’s final rule.
For the CY 2018 OPPS update, we
received the CY 2018 CPT codes from
AMA in time for inclusion in this CY
2018 OPPS/ASC proposed rule. The
new, revised, and deleted CY 2018
Category I and III CPT codes can be
found in Addendum B to this proposed
rule (which is available via the Internet
on the CMS Web site). We note that the
new and revised codes are assigned to
new comment indicator ‘‘NP’’ to
indicate that the code is new for the
next calendar year or the code is an
existing code with substantial revision
to its code descriptor in the next
calendar year as compared to current
calendar year with a proposed APC
assignment, and that comments will be
accepted on the proposed APC
assignment and status indicator.
Further, we remind readers that the
CPT code descriptors that appear in
Addendum B are short descriptors and
do not accurately describe the complete
procedure, service, or item described by
the CPT code. Therefore, we are
including the 5-digit placeholder codes
and their long descriptors for the new
and revised CY 2018 CPT codes in
Addendum O to this proposed rule
(which is available via the Internet on
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33603
the CMS Web site) so that the public can
adequately comment on our proposed
APCs and status indicator assignments.
The 5-digit placeholder codes can be
found in Addendum O, specifically
under the column labeled ‘‘CY 2018
OPPS/ASC Proposed Rule 5-Digit AMA
Placeholder Code,’’ to this proposed
rule. The final CPT code numbers will
be included in the CY 2018 OPPS/ASC
final rule with comment period. We
note that not every code listed in
Addendum O is subject to comment. For
the new and revised Category I and III
CPT codes, we are requesting comments
on only those codes that are assigned to
comment indicator ‘‘NP’’.
In summary, we are soliciting public
comments on the proposed CY 2018
status indicators and APC assignments
for the new and revised Category I and
III CPT codes that will be effective
January 1, 2018. The CPT codes are
listed in Addendum B to this proposed
rule with short descriptors only. We list
them again in Addendum O to this
proposed rule with long descriptors. We
also are proposing to finalize the status
indicator and APC assignments for these
codes (with their final CPT code
numbers) in the CY 2018 OPPS/ASC
final rule with comment period. The
proposed status indicator and APC
assignment for these codes can be found
in Addendum B to this proposed rule
(which is available via the Internet on
the CMS Web site).
5. Proposed Care Management Coding
Changes Effective January 1, 2018 (APCs
5821 and 5822)
As noted in the CY 2018 MPFS
proposed rule, we continue to be
interested in the ongoing work of the
medical community to refine the set of
codes used to describe care management
services, including chronic care
management. We are proposing to adopt
CPT replacement codes for CY 2018 for
several of the care management services
finalized last year and are seeking
public comment on ways we might
further reduce burden on reporting
providers, including through stronger
alignment between CMS requirements
and CPT guidance for existing and
potential new codes. Table 15 below
details the proposed care management
coding changes. We refer readers to
Addendum B to the proposed rule
(which is available via the Internet on
the CMS Web site) for the proposed CY
2018 payment rates for the replacement
codes.
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TABLE 15—PROPOSED CARE MANAGEMENT CODING CHANGES EFFECTIVE JANUARY 1, 2018
CY 2017
HCPCS
code
G0502 .......
G0503 .......
G0504 .......
G0505 .......
G0507 .......
CY2017 HCPCS
short descriptor
CY 2017
OPPS SI
Init psych care
Manag, 70min.
Subseq psych care
man, 60mi.
Init/sub psych Care
add 30 m.
Cog/func assessment outpt.
Care manage serv
minimum 20.
CY 2017
OPPS ASC
Proposed CY
2018 replacement CPT
code *
Proposed CY 2018
replacement HCPCS
short descriptor
Proposed CY
2018 OPPS SI
1st psyc collab care
mgmt.
Sbsg psyc collab
care mgmt.
1st/sbsq psyc collab
care.
Assmt & care pln pt
cog imp.
Care mgmt. svc bhvl
hlth cond.
S
5822
S
5822
N
N/A
S
5822
S
5821
S
5822
994X1
S
5822
994X2
N
N/A
994X3
S
5822
99XX3
S
5821
99XX5
Proposed CY
2018 OPPS
APC
* These are the 5-digit placeholder CPT codes. The final CPT code numbers will be included in the CY 2018 OPPS/ASC final rule with comment period. The long descriptors for the codes can be found in Addendum O (New Category I and Category III CPT Codes Effective January 1,
2018) to this proposed rule, which is available via the Internet on the CMS Web site.
B. Proposed OPPS Changes—Variations
Within APCs
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
1. Background
Section 1833(t)(2)(A) of the Act
requires the Secretary to develop a
classification system for covered
hospital outpatient department services.
Section 1833(t)(2)(B) of the Act provides
that the Secretary may establish groups
of covered OPD services within this
classification system, so that services
classified within each group are
comparable clinically and with respect
to the use of resources. In accordance
with these provisions, we developed a
grouping classification system, referred
to as Ambulatory Payment
Classifications (APCs), as set forth in
regulations at 42 CFR 419.31. We use
Level I and Level II HCPCS codes to
identify and group the services within
each APC. The APCs are organized such
that each group is homogeneous both
clinically and in terms of resource use.
Using this classification system, we
have established distinct groups of
similar services. We also have
developed separate APC groups for
certain medical devices, drugs,
biologicals, therapeutic
radiopharmaceuticals, and
brachytherapy devices that are not
packaged into the payment for the
procedure.
We have packaged into the payment
for each procedure or service within an
APC group the costs associated with
those items and services that are
typically ancillary and supportive to a
primary diagnostic or therapeutic
modality and, in those cases, are an
integral part of the primary service they
support. Therefore, we do not make
separate payment for these packaged
items or services. In general, packaged
items and services include, but are not
limited to, the items and services listed
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in § 419.2(b) of the regulations. A
further discussion of packaged services
is included in section II.A.3. of this
proposed rule.
Under the OPPS, we generally pay for
covered hospital outpatient services on
a rate-per-service basis, where the
service may be reported with one or
more HCPCS codes. Payment varies
according to the APC group to which
the independent service or combination
of services is assigned. For CY 2018, we
are proposing that each APC relative
payment weight represents the hospital
cost of the services included in that
APC, relative to the hospital cost of the
services included in APC 5012 (Clinic
Visits and Related Services). The APC
relative payment weights are scaled to
APC 5012 because it is the hospital
clinic visit APC and clinic visits are
among the most frequently furnished
services in the hospital outpatient
setting.
2. Application of the 2 Times Rule
In accordance with section 1833(t)(2)
of the Act and § 419.31 of the
regulations, we annually review the
items and services within an APC group
to determine, with respect to
comparability of the use of resources, if
the highest cost for an item or service in
the APC group is more than 2 times
greater than the lowest cost for an item
or service within the same APC group
(referred to as the ‘‘2 times rule’’). The
statute authorizes the Secretary to make
exceptions to the 2 times rule in
unusual cases, such as low-volume
items and services (but the Secretary
may not make such an exception in the
case of a drug or biological that has been
designated as an orphan drug under
section 526 of the Federal Food, Drug,
and Cosmetic Act). In determining the
APCs with a 2 times rule violation, we
consider only those HCPCS codes that
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are significant based on the number of
claims. We note that, for purposes of
identifying significant procedure codes
for examination under the 2 times rule,
we consider procedure codes that have
more than 1,000 single major claims or
procedure codes that both have more
than 99 single major claims and
contribute at least 2 percent of the single
major claims used to establish the APC
cost to be significant (75 FR 71832).
This longstanding definition of when a
procedure code is significant for
purposes of the 2 times rule was
selected because we believe that a
subset of 1,000 or fewer claims is
negligible within the set of
approximately 100 million single
procedure or single session claims we
use for establishing costs. Similarly, a
procedure code for which there are
fewer than 99 single claims and that
comprises less than 2 percent of the
single major claims within an APC will
have a negligible impact on the APC
cost (75 FR 71832). In this section of
this proposed rule, for CY 2018, we are
proposing to make exceptions to this
limit on the variation of costs within
each APC group in unusual cases, such
as for certain low volume items and
services.
For the CY 2018 OPPS, we have
identified the APCs with violations of
the 2 times rule. Therefore, we are
proposing changes to the procedure
codes assigned to these APCs in
Addendum B to this proposed rule. We
note that Addendum B does not appear
in the printed version of the Federal
Register as part of this CY 2018 OPPS/
ASC proposed rule. Rather, it is
published and made available via the
Internet on the CMS Web site at: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
HospitalOutpatientPPS/. To
eliminate a violation of the 2 times rule
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and improve clinical and resource
homogeneity, we are proposing to
reassign these procedure codes to new
APCs that contain services that are
similar with regard to both their clinical
and resource characteristics. In many
cases, the proposed procedure code
reassignments and associated APC
reconfigurations for CY 2018 included
in this proposed rule are related to
changes in costs of services that were
observed in the CY 2016 claims data
newly available for CY 2018 ratesetting.
Addendum B to this CY 2018 OPPS/
ASC proposed rule identifies with a
comment indicator ‘‘CH’’ those
procedure codes for which we are
proposing a change to the APC
assignment or status indicator, or both,
that were initially assigned in the July
1, 2017 OPPS Addendum B Update
(available via the Internet on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
Addendum-A-and-Addendum-BUpdates.html).
3. Proposed APC Exceptions to the 2
Times Rule
Taking into account the APC changes
that we are proposing for CY 2018, we
reviewed all of the APCs to determine
which APCs would not meet the
requirements of the 2 times rule. We
used the following criteria to evaluate
whether to propose exceptions to the 2
times rule for affected APCs:
• Resource homogeneity;
• Clinical homogeneity;
• Hospital outpatient setting
utilization;
• Frequency of service (volume); and
• Opportunity for upcoding and code
fragments.
For a detailed discussion of these
criteria, we refer readers to the April 7,
2000 OPPS final rule with comment
period (65 FR 18457 and 18458).
Based on the CY 2016 claims data
available for this CY 2018 proposed
rule, we found 12 APCs with violations
of the 2 times rule. We applied the
criteria as described above to identify
the APCs for which we are proposing to
make exceptions under the 2 times rule
for CY 2018, and found that all of the
12 APCs we identified meet the criteria
for an exception to the 2 times rule
based on the CY 2016 claims data
available for this proposed rule. We did
not include in that determination those
APCs where a 2 times rule violation was
not a relevant concept, such as APC
5401 (Dialysis), which only has two
HCPCS codes assigned to it that have a
similar geometric mean costs and do not
create a 2 time rule violation. Therefore,
we have only identified those APCs,
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including those with criteria-based
costs, such as device-dependent CPT/
HCPCS codes, with 2 times rule
violations.
We note that, for cases in which a
recommendation by the HOP Panel
appears to result in or allow a violation
of the 2 times rule, we may accept the
HOP Panel’s recommendation because
those recommendations are based on
explicit consideration (that is, a review
of the latest OPPS claims data and group
discussion of the issue) of resource use,
clinical homogeneity, site of service,
and the quality of the claims data used
to determine the APC payment rates.
Table 16 of this proposed rule lists the
12 APCs that we are proposing to except
from the 2 times rule for CY 2018 based
on the criteria cited above and claims
data submitted between January 1, 2016
and December 31, 2016, and processed
on or before December 31, 2016. For the
final rule with comment period, we
intend to use claims data for dates of
service between January 1, 2016 and
December 31, 2016 that were processed
on or before June 30, 2017, and updated
CCRs, if available. The geometric mean
costs for covered hospital outpatient
services for these and all other APCs
that were used in the development of
this proposed rule can be found on the
CMS Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
Hospital-Outpatient-Regulations-andNotices.html.
33605
Technology APC. Beginning in CY 2002,
we retain services within New
Technology APC groups until we gather
sufficient claims data to enable us to
assign the service to an appropriate
clinical APC. This policy allows us to
move a service from a New Technology
APC in less than 2 years if sufficient
data are available. It also allows us to
retain a service in a New Technology
APC for more than 2 years if sufficient
data upon which to base a decision for
reassignment have not been collected.
For CY 2017, there are 51 New
Technology APC levels, ranging from
the lowest cost band assigned to APC
1491 (New Technology—Level 1A ($0–
$10)) through the highest cost band
assigned to APC 1906 (New
Technology—Level 51 ($140,001–
$160,000)). In the CY 2004 OPPS final
rule with comment period (68 FR
63416), we restructured the New
Technology APCs to make the cost
intervals more consistent across
payment levels and refined the cost
bands for these APCs to retain two
parallel sets of New Technology APCs,
one set with a status indicator of ‘‘S’’
(Significant Procedures, Not Discounted
when Multiple. Paid under OPPS;
separate APC payment) and the other set
with a status indicator of ‘‘T’’
(Significant Procedure, Multiple
Reduction Applies. Paid under OPPS;
separate APC payment). These current
New Technology APC configurations
allow us to price new technology
services more appropriately and
TABLE 16—PROPOSED APC EXCEP- consistently.
We note that the cost bands for the
TIONS TO THE TWO TIMES RULE FOR
New Technology APCs, specifically,
CY 2018
APCs 1491 through 1599 and 1901
through 1906, vary with increments
Proposed
ranging from $10 to $19,999. These cost
CY 2018
Proposed CY 2018 APC title
APC
bands identify the APCs to which new
technology procedures and services
5112 ....... Level 2 Musculoskeletal Proce- with estimated service costs that fall
dures.
within those cost bands are assigned
5161 ....... Level 1 ENT Procedures.
under the OPPS. Payment for each APC
5311 ....... Level 1 Lower GI Procedures.
5461 ....... Level 1 Neurostimulator and Re- is made at the mid-point of the APC’s
assigned cost band. For example,
lated Procedures.
5521 ....... Level 1 Imaging without Contrast. payment for New Technology APC 1507
5573 ....... Level 3 Imaging with Contrast.
(New Technology—Level 7 ($501–
5611 ....... Level 1 Therapeutic Radiation $600)) is made at $550.50.
Treatment Preparation.
Every year we receive several requests
5691 ....... Level 1 Drug Administration.
for higher payment amounts under the
5731 ....... Level 1 Minor Procedures.
New Technology APCs for specific
5735 ....... Level 5 Minor Procedures.
procedures paid under the OPPS
5771 ....... Cardiac Rehabilitation.
5823 ....... Level 3 Health and Behavior because they require the use of
expensive equipment. We are taking this
Services.
opportunity to reiterate our response in
general to the issue of hospitals’ capital
C. Proposed New Technology APCs
expenditures as they relate to the OPPS
1. Background
and Medicare, as specified in the CY
In the November 30, 2001 final rule
2016 OPPS/ASC final rule with
(66 FR 59903), we finalized changes to
comment period (80 FR 70374).
the time period in which a service can
Under the OPPS, one of our goals is
be eligible for payment under a New
to make payments that are appropriate
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for the services that are necessary for the
treatment of Medicare beneficiaries. The
OPPS, like other Medicare payment
systems, is budget neutral and increases
are limited to the annual hospital
inpatient market basket increase. We
believe that our payment rates generally
reflect the costs that are associated with
providing care to Medicare
beneficiaries, and we believe that our
payment rates are adequate to ensure
access to services (80 FR 70374).
For many emerging technologies,
there is a transitional period during
which utilization may be low, often
because providers are first learning
about the techniques and their clinical
utility. Quite often, parties request that
Medicare make higher payment
amounts under the New Technology
APCs for new procedures in that
transitional phase. These requests, and
their accompanying estimates for
expected total patient utilization, often
reflect very low rates of patient use of
expensive equipment, resulting in high
per use costs for which requesters
believe Medicare should make full
payment. Medicare does not, and we
believe should not, assume
responsibility for more than its share of
the costs of procedures based on
projected utilization for Medicare
beneficiaries and does not set its
payment rates based on initial
projections of low utilization for
services that require expensive capital
equipment. For the OPPS, we rely on
hospitals to make informed business
decisions regarding the acquisition of
high cost capital equipment, taking into
consideration their knowledge about
their entire patient base (Medicare
beneficiaries included) and an
understanding of Medicare’s and other
payers’ payment policies. (We refer
readers to the CY 2013 OPPS/ASC final
rule with comment period (77 FR
68314) for further discussion regarding
this payment policy.)
We note that, in a budget neutral
environment, payments may not fully
cover hospitals’ costs in a particular
circumstance, including those for the
purchase and maintenance of capital
equipment. We rely on hospitals to
make their decisions regarding the
acquisition of high cost equipment with
the understanding that the Medicare
program must be careful to establish its
initial payment rates, including those
made through New Technology APCs,
for new services that lack hospital
claims data based on realistic utilization
projections for all such services
delivered in cost-efficient hospital
outpatient settings. As the OPPS
acquires claims data regarding hospital
costs associated with new procedures,
we regularly examine the claims data
and any available new information
regarding the clinical aspects of new
procedures to confirm that our OPPS
payments remain appropriate for
procedures as they transition into
mainstream medical practice (77 FR
68314).
2. Proposed Revised and Additional
New Technology APC Groups
As stated above, for CY 2017 there are
currently 51 levels of New Technology
APCs. To improve our ability to have
payments for services over $100,000
more closely match the cost of the
service, for CY 2018 we are proposing
to narrow the increments for New
Technology APCs 1901–1906 from
$19,999 cost bands to $14,999 cost
bands. We also are proposing to add
New Technology APCs 1907 and 1908
(New Technology Level 52 ($145,001$160,000), which would allow for an
appropriate payment of retinal
prosthesis implantation procedures,
which is discussed in later in this
section. Table 17 below includes the
complete list of the proposed modified
and additional New Technology APC
groups for CY 2018.
TABLE 17—PROPOSED CY 2018 ADDITIONAL NEW TECHNOLOGY APC GROUPS
Proposed
CY 2018 APC
1901
1902
1903
1904
1905
1906
1907
1908
........................
........................
........................
........................
........................
........................
........................
........................
New
New
New
New
New
New
New
New
Technology—Level
Technology—Level
Technology—Level
Technology—Level
Technology—Level
Technology—Level
Technology—Level
Technology—Level
The proposed payment rates for New
Technology APCs 1901 through 1908
can be found in Addendum A to this
proposed rule (which is available via
the Internet on the CMS Web site).
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
3. Proposed Procedures Assigned to
New Technology APC Groups for CY
2018
a. Overall Proposal
As we explained in the CY 2002 OPPS
final rule with comment period (66 FR
59902), we generally retain a procedure
in the New Technology APC to which
it is initially assigned until we have
obtained sufficient claims data to justify
reassignment of the procedure to a
clinically appropriate APC.
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CY 2018 SI
Proposed CY 2018 APC Title
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49
49
50
50
51
51
52
52
($100,001–$115,000)
($100,001–$115,000)
($115,001–$130,000)
($115,001–$130,000)
($130,001–$145,000)
($130,001–$145,000)
($145,001–$160,000)
($145,001–$160,000)
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
In addition, in cases where we find
that our initial New Technology APC
assignment was based on inaccurate or
inadequate information (although it was
the best information available at the
time), where we obtain new information
that was not available at the time of our
initial New Technology APC
assignment, or where the New
Technology APCs are restructured, we
may, based on more recent resource
utilization information (including
claims data) or the availability of refined
New Technology APC cost bands,
reassign the procedure or service to a
different New Technology APC that
more appropriately reflects its cost (66
FR 59903).
Consistent with our current policy, for
CY 2018, in this CY 2018 OPPS/ASC
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S
T
S
T
S
T
S
T
Updated or new
APC
Updated.
Updated.
Updated.
Updated.
Updated.
Updated.
New.
New.
proposed rule, we are proposing to
retain services within New Technology
APC groups until we obtain sufficient
claims data to justify reassignment of
the service to a clinically appropriate
APC. The flexibility associated with this
policy allows us to reassign a service
from a New Technology APC in less
than 2 years if sufficient claims data are
available. It also allows us to retain a
service in a New Technology APC for
more than 2 years if sufficient claims
data upon which to base a decision for
reassignment have not been obtained
(66 FR 59902).
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b. Magnetic Resonance-Guided Focused
Ultrasound Surgery (MRgFUS) (APCs
1537, 5114, and 5414)
Currently, there are four CPT/HCPCS
codes that describe magnetic resonance
image guided high intensity focused
ultrasound (MRgFUS) procedures, three
of which we are proposing to continue
to assign to standard APCs and one of
which we are proposing to continue to
assign to a New Technology APC. These
codes include CPT codes 0071T, 0072T,
and 0398T, and HCPCS code C9734.
CPT codes 0071T and 0072T are used
for the treatment of uterine fibroids,
CPT code 0398T is used for the
treatment of essential tremor, and
HCPCS code C9734 is used for pain
palliation for metastatic bone cancer.
As shown in Table 18 below, and as
listed in Addendum B of this CY 2018
OPPS/ASC proposed rule, we are
proposing to continue to assign CPT
codes 0071T and 0072T to APC 5414
(Level 4 Gynecologic Procedures), with
a proposed payment rate of
approximately $2,189 for CY 2018. We
also are proposing to continue to assign
the APC to status indicator ‘‘J1’’
(Hospital Part B services paid through a
comprehensive APC) to indicate that all
covered Part B services on the claim are
packaged with the payment for the
primary ‘‘J1’’ service for the claim,
except for services assigned to OPPS
status indicator ‘‘F’’, ‘‘G’’, ‘‘H’’, ‘‘L’’, and
‘‘U’’; ambulance services; diagnostic and
screening mammography; all preventive
services; and certain Part B inpatient
services. In addition, we are proposing
to continue to assign HCPCS code
C9734 to APC 5114 (Level 4
33607
Musculoskeletal Procedures), with a
proposed payment rate of approximately
$5,385 for CY 2018. We also are
proposing to continue to assign HCPCS
code C9734 to status indicator as ‘‘J1’’.
Further, we are proposing to continue
to assign CPT code 0398T to APC 1537
(New Technology—Level 37 ($9501–
$10000)), with a proposed payment rate
of approximately $9,751 for CY 2018.
We have only received one claim for
CPT code 0398T, and, based on this
limited information, are not proposing
to assign this MRgFUS procedure to a
standard APC. We refer readers to
Addendum B of this proposed rule for
the proposed payment rates for all codes
reportable under the OPPS. Addendum
B is available via the Internet on the
CMS Web site.
TABLE 18—PROPOSED CY 2018 STATUS INDICATOR (SI), APC ASSIGNMENTS, AND PAYMENT RATES FOR THE MAGNETIC
RESONANCE IMAGE GUIDED HIGH INTENSITY FOCUSED ULTRASOUND (MRGFUS) PROCEDURES
CPT/
HCPCS
Code
0071T ....
0072T ....
0398T ....
C9734 ....
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Proposed
CY 2018
OPPS SI
Proposed CY
2018 OPPS
APC
Proposed CY
2018 OPPS
payment rate
CY 2017
OPPS SI
Focused ultrasound ablation of
uterine leiomyomata, including
mr guidance; total leiomyomata
volume less than 200 cc of tissue.
Focused ultrasound ablation of
uterine leiomyomata, including
mr guidance; total leiomyomata
volume greater or equal to 200
cc of tissue.
Magnetic resonance image guided high intensity focused
ultrasound
(mrgfus),
stereotactic ablation lesion,
intracranial for movement disorder including stereotactic
navigation and frame placement when performed.
Focused
ultrasound
ablation/
therapeutic intervention, other
than uterine leiomyomata, with
magnetic resonance (mr) guidance.
J1
5414
$2,084.59
J1
5414
$2,188.97
J1
5414
2,084.59
J1
5414
2,188.97
S
1537
9,750.50
S
1537
9,750.50
J1
5114
5,219.36
J1
5114
5,385.23
c. Retinal Prosthesis Implant Procedure
CPT code 0100T (Placement of a
subconjunctival retinal prosthesis
receiver and pulse generator, and
implantation of intra-ocular retinal
electrode array, with vitrectomy)
describes the implantation of a retinal
prosthesis, specifically, a procedure
involving the use of the Argus® II
Retinal Prosthesis System. This first
retinal prosthesis was approved by the
FDA in 2013 for adult patients
diagnosed with advanced retinitis
pigmentosa. Pass-through payment
status was granted for the Argus® II
device under HCPCS code C1841
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CY 2017
OPPS APC
CY 2017
OPPS payment rate
Long descriptor
(Retinal prosthesis, includes all internal
and external components) beginning
October 1, 2013, and this status expired
on December 31, 2015. We note that
after pass-through payment status
expires for a medical device, the
payment for the device is packaged into
the payment for the associated surgical
procedure. Consequently, for CY 2016,
the device described by HCPCS code
C1841 was assigned to OPPS status
indicator ‘‘N’’ to indicate that payment
for the device is packaged and included
in the payment rate for the surgical
procedure described by CPT code
0100T. For CY 2016, CPT code 0100T
was assigned to new technology APC
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1599 with a payment rate of $95,000,
which was the highest paying New
Technology APC for that year. This
payment includes both the surgical
procedure (CPT code 0100T) and the
use of the Argus® II device (HCPCS code
C1841). However, stakeholders
(including the device manufacturer and
hospitals) believed that the CY 2016
payment rate for the procedure
involving the Argus® II System was
insufficient to cover the hospital cost of
performing the procedure, which
includes the cost of the retinal
prosthesis which has a retail price of
approximately $145,000.
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For CY 2017, analysis of the CY 2015
OPPS claims data used for the CY 2017
final rule with comment showed 9
single claims (out of 13 total claims) for
CPT code 0100T, with a geometric mean
cost of approximately $142,003 based
on claims submitted between January 1,
2015, through December 31, 2015, and
processed through June 30, 2016. Based
on the CY 2015 OPPS claims data
available for the final rule and our
understanding of the Argus® II
procedure, we reassigned CPT code
0100T from new technology APC 1599
to new technology APC 1906 with a
final payment rate of $150,000.50 for CY
2017. We noted that this payment rate
includes the cost of both the surgical
procedure (CPT code 0100T) and the
retinal prosthesis device (HCPCS code
C1841).
For the CY 2018 update, analysis of
the CY 2016 OPPS claims data used for
the CY 2018 proposed rule showed 3
single claims (out of 3 total claims) for
CPT code 0100T, with a geometric mean
cost of approximately $116,239 based
on the claims submitted between
January 1, 2016 through December 31,
2016, and processed through December
31, 2016. For the CY 2018 OPPS/ASC
final rule with comment period, the
final payment rate will be based on
claims submitted between January 1,
2016 and December 31, 2016, and
processed through June 30, 2017.
Based on the CY 2016 OPPS claims
data available, which show a geometric
mean cost of approximately $116,239,
we are proposing to assign the Argus®
II procedure to a New Technology APC
with a payment band that covers the
geometric mean of the procedure.
Therefore, we are proposing to assign
CPT code 0100T to APC 1904 (New
Technology—Level 50 $115,001–
$130,000)), with a proposed payment of
$122,000.50 for CY 2018. We are
inviting public comments on this
proposal.
d. Pathogen Test for Platelets
The CMS HCPCS Workgroup has
established HCPCS code Q9987
(Pathogen(s) test for platelets) effective
July 1, 2017. HCPCS code Q9987 will be
used to report any test used to identify
bacterial or other pathogen
contamination in blood platelets.
Currently, there is one test approved by
the FDA that is described by HCPCS
code Q9987. The test is a rapid bacterial
test and the manufacturer estimates the
cost of the test to be between $26 and
$35. HCPCS code Q9987 was
established after concerns from blood
and blood product stakeholders that the
previous CPT code used to describe
pathogen tests for platelets, CPT code
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P9072 (Platelets, pheresis, pathogen
reduced or rapid bacterial tested, each
unit), inappropriately described rapid
bacterial testing by combining the test
with the pathogen reduction of platelets.
CPT code P9072 is inactive effective
July 1, 2017.
We are seeking more information on
the actual costs of pathogen tests for
platelets before assigning HCPCS code
Q9987 to a clinical APC. Effective July
1, 2017, HCPCS code Q9987 is assigned
to New Technology APC 1493 (New
Technology—Level 1C ($21–$30)), with
a payment rate of $25.50. We are
proposing to continue to assign HCPCS
code Q9987 to New Technology APC
1493, with a proposed payment rate of
$25.50, until such time as claims data
are available to support assignment to a
clinical APC. We are inviting public
comments on this proposal.
D. Proposed OPPS APC-Specific Policies
1. Blood-Derived Hematopoietic Cell
Harvesting
HCPCS code 38205 describes bloodderived hematopoietic progenitor cell
harvesting for transplantation, per
collection; allogeneic. This code
represents a donor acquisition cost for
an allogeneic hematopoietic stem cell
transplant (HSCT). In the CY 2010
OPPS/ASC final rule with comment
period (74 FR 60575), we assigned this
code to status indicator ‘‘B’’, which
indicates that this code is not
recognized by the OPPS when
submitted on an outpatient hospital Part
B bill (type 12x and 13x).
In CY 2017, we finalized a
comprehensive APC (C–APC) for HSCT
(81 FR 79586 through 79587). Payment
for donor acquisition services for HSCT
is included in the C–APC payment for
the allogeneic stem cell transplant when
the transplant occurs in the hospital
outpatient setting. All donor acquisition
costs, including the costs for HCPCS
code 38205, should be reported on the
same date of service as the transplant
procedure (HCPCS code 38240
(Hematopoietic progenitor (HPC);
allogeneic transplantation per donor)) in
order to be appropriately packaged for
payment purposes. Hospitals are
instructed to identify services required
to acquire stem cells from a donor for
allogeneic HSCT separately in Field 42
on Form CMS–1450 (or UB–04), with
revenue code 0815 when an allogeneic
stem cell transplant occurs. (We refer
readers to the Medicare Claims
Processing Manual (Pub. L. 100–04),
Chapter 4, Section 231.11 and Chapter
3, Section 90.3.1.)
There other donor acquisition costs,
namely those costs for the procedure
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described by HCPCS code 38230 (Bone
marrow harvesting for transplantation;
allogeneic), which are assigned to status
indicator ‘‘S’’. For consistency and to
ensure that the donor acquisition costs
are captured accurately, for CY 2018, we
are proposing to change the status
indicator assignment for the procedure
described by HCPCS code 38205 from
‘‘B’’ to ‘‘S’’, which indicates that the
procedure is paid under the OPPS and
receives separate payment.
Our latest claims data used for this
proposed rule, which include claims
submitted between January 1, 2016, and
December 31, 2016, and processed on or
before December 31, 2016, show a
geometric mean cost of approximately
$580 for HCPCS code 38205 based on 2
single claims (out of 8 total claims). The
procedure described by HCPCS code
38205 has resource and clinical
similarities to procedures assigned to
APC 5242 (Level 2 Blood Product
Exchange and Related Services).
Therefore, we are proposing to assign
HCPCS code 38205 to APC 5242. We are
inviting public comments on these
proposals.
2. Radiology and Imaging Procedures
and Services
a. Imaging APCs
Section 1833(t)(9)(A) of the Act
requires the Secretary to review not less
often than annually, and revise the APC
group assignments, relative payment
weights, and the wage and other
adjustments to take into account
changes in medical practice, changes in
technology, the addition of new
services, new cost data, and other
relevant information and factors. In
addition, section 1833(t)(2)(G) of the Act
requires the Secretary to create
additional groups of covered OPD
services that classify separately those
procedures that utilize contrast agents
from those procedures that do not.
In CY 2016, as a part of our
comprehensive review of the structure
of the APCs and procedure code
assignments, we restructured the APCs
that contain imaging services (80 FR
70392). The purpose of this
restructuring was to more appropriately
reflect the resource costs and clinical
characteristics of the services classified
within the imaging APCs. The
restructuring of the imaging APCs
resulted in broader groupings that
removed the excessive granularity of
grouping imaging services according to
organ or physiologic system, which did
not necessarily reflect either significant
differences in resources or how these
services are delivered in the hospital
outpatient setting. In CY 2017, in
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response to public comments on the CY
2017 OPPS/ASC proposed rule, we
further consolidated the imaging APCs
from 17 APCs in CY 2016 to 7 APCs in
CY 2017 (81 FR 79633). These included
four imaging APCs without contrast and
three imaging APCs with contrast.
For this CY 2018 proposed rule, we
reviewed the services assigned to the
imaging without contrast APCs and
imaging with contrast APCs.
Specifically, we evaluated the resource
costs and clinical coherence of the
procedures associated with the four
levels of imaging without contrast APCs
and the three levels of imaging with
contrast APCs as well as identified and
corrected any 2 times rule violations as
discussed in section III.B.2. of this CY
2018 OPPS/ASC proposed rule. In
addition, we reviewed and considered
stakeholder recommendations to make
additional refinements to the structure
of the APC groupings of the imaging
procedures classified within the
imaging APCs that would maintain
clinical homogeneity while more
appropriately addressing resource cost
fluctuation and volatility. As a result of
our analysis and review of the claims
data used for CY 2018 ratesetting, we
believe a Level 5 Imaging without
Contrast APC is needed to more
appropriately group certain imaging
services with higher resource costs.
Specifically, we believe the data support
splitting the current Level 4 Imaging
without Contrast APC into two APCs
such that the Level 4 Imaging without
Contrast APC would include high
frequency low cost services and the
proposed Level 5 Imaging without
Contrast APC would include low
frequency high cost services. Therefore,
for CY 2018, we are proposing to add a
fifth level within the Imaging without
Contrast APCs. Below in Table 19, we
list the CY 2017 imaging APCs, and in
Table 20, we list the proposed CY 2018
imaging APCs with the addition of a
fifth level within the Imaging without
Contrast APCs. The specific APC
assignments for each service grouping
are listed in Addendum B to the
proposed rule, which is available via the
Internet on the CMS Web site. This
proposal would increase the imaging
APCs from 7 APCs in CY 2017 to 8 in
CY 2018. The specific APC assignments
for each imaging service HCPCS code
are listed in Addendum B to this
proposed rule, which is available via the
Internet on the CMS Web site. We note
that some of the imaging procedures are
assigned to APCs that are not listed in
the tables below (for example, the
vascular procedures APCs). Also, the
nuclear medicine services APCs are not
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included in this proposal. These
imaging services are not included in this
proposal because we are not proposing
changes to their APC structure.
We are inviting public comments on
our proposal to add a Level 5 Imaging
without Contrast APC in CY 2018.
TABLE 19—CY 2017 IMAGING APCS
CY 2017
APC
5521
5522
5523
5524
5571
5572
5573
.....
.....
.....
.....
.....
.....
.....
CY 2017 APC Group Title
Level
Level
Level
Level
Level
Level
Level
1
2
3
4
1
2
3
Imaging
Imaging
Imaging
Imaging
Imaging
Imaging
Imaging
without Contrast.
without Contrast.
without Contrast.
without Contrast.
with Contrast.
with Contrast.
with Contrast.
TABLE 20—PROPOSED CY 2018
IMAGING APCS
Proposed
CY 2017
APC
5521
5522
5523
5524
5525
5571
5572
5573
.......
.......
.......
.......
.......
.......
.......
.......
Proposed CY 2017 APC Group
Title
Level
Level
Level
Level
Level
Level
Level
Level
1
2
3
4
5
1
2
3
Imaging
Imaging
Imaging
Imaging
Imaging
Imaging
Imaging
Imaging
without Contrast.
without Contrast.
without Contrast.
without Contrast.
without Contrast.
with Contrast.
with Contrast.
with Contrast.
b. Non-Ophthalmic Fluorescent
Vascular Angiography (APC 5524)
For the CY 2018 OPPS update, we are
proposing to reassign HCPCS code
C9733 (Non-ophthalmic fluorescent
vascular angiography) from APC 5523
(Level 3 Imaging without Contrast) to
APC 5524 (Level 4 Imaging without
Contrast) based on the latest claims data
available for this proposed rule. We are
proposing to maintain the status
indicator assignment of ‘‘Q2’’
(T-packaged) to indicate that the service
is conditionally packaged when
performed in conjunction with other
procedures on the same day but paid
separately when performed as a standalone service.
Our latest claims data used for this
proposed rule, which include claims
submitted between January 1, 2016, and
December 31, 2016, and processed on or
before December 31, 2016, show a
geometric mean cost of approximately
$236 for HCPCS code C9733 based on
216 single claims (out of 953 total
claims), which is closely aligned with
the geometric mean cost of
approximately $275 for APC 5524.
Because HCPCS code C9733 is an
imaging service which is similar to the
codes assigned to APC 5524, we are
proposing to reassign HCPCS code
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C9733 from APC 5523 to APC 5524. We
believe this proposed reassignment
would improve the clinical
homogeneity of APC 5524 and
appropriately align the resource costs of
HCPCS code C9733 to the resource costs
of those procedures assigned to APC
5524.
As we have stated in previous OPPS/
ASC final rules, specifically, in the CY
2013 OPPS/ASC final rule with
comment period (77 FR 68345 through
68346), CY 2014 OPPS/ASC final rule
with comment period (78 FR 74976
through 74977), and the CY 2017 OPPS/
ASC final rule with comment period (81
FR 79632), the service described by
HCPCS code C9733 is primarily an
intraoperative imaging service that is
performed in combination with a
number of primary procedures,
including facial reconstruction and
reanimation, muscle flaps, trauma
reconstruction, digital and limb
reattachment, and breast reconstruction.
Therefore, HCPCS code C9733 is
conditionally packaged under
§ 419.2(b)(14), which contains the
policies governing packaging of
intraoperative items and services.
Consequently, we are proposing to
maintain the status indicator assignment
of ‘‘Q2’’ to indicate that the payment for
the service will be packaged in the APC
payment if billed on the same date of
service as a HCPCS code assigned to
status indicator ‘‘T’’, but in all other
circumstances, a separate APC payment
for the service will be made. We believe
that the OPPS payments, separate or
packaged, for surgical procedures with
which this service is performed are
more than adequate to cover the cost of
the service described by HCPCS code
C9733 for Medicare beneficiaries in
need of this service.
In summary, for the CY 2018 OPPS
update, we are proposing to reassign
HCPCS code C9733 to APC 5524 based
on the latest claims data used for this
proposed rule. In addition, we are
proposing to maintain its status
indicator assignment of ‘‘Q2’’ to indicate
that the service is conditionally
packaged. The proposed CY 2018 OPPS
payment rate for HCPCS C9733 can be
found in OPPS Addendum B to this
proposed rule, which is available via the
Internet on the CMS Web site.
3. Comment Solicitation on Intraocular
Procedure APCs
As part of our CY 2018
comprehensive review of the structure
of the APCs and procedure code
assignments, we evaluated the
intraocular procedure APCs with a
particular focus on C–APC 5491 (Level
1 Intraocular Procedures) that contains
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cataract surgery procedures. We strive to
maintain APCs that contain procedures
that are relatively homogenous in
resource costs and clinical
characteristics. While it is impracticable
and contrary to the principles of a
prospective payment system to assign
each procedure to its own APC, thus
resulting in a cost-based, fee schedule
payment system, we seek to ensure our
clinical groupings appropriately group
like items and services while
maintaining the integrity of a
prospective payment system under
which bundled, encounter-based
payments are essential.
For CY 2018, we considered
proposing a new intraocular procedure
APC that would further distinguish the
resource costs and clinical
characteristics between cataract surgery
and complex cataract surgery. As listed
in Addendum B of this CY 2018 OPPS/
ASC proposed rule, we are proposing to
continue to assign CPT code 66984
(Cataract surgery with IOL 1 stage
procedure) and CPT code 66982
(Cataract surgery complex) to C–APC
5491. However, because the 2017 AMA
CPT Code manual describes a complex
cataract surgery case as ‘‘requiring
devices or techniques not generally used
in routine cataract surgery (e.g., iris
expansion device, suture support for
intraocular lens, or primary posterior
capsulorrhexis),’’ we believe it may be
more appropriate to assign CPT code
66982 to a C–APC that is separate from
the C–APC assignment for CPT code
66984. However, because this potential
APC grouping would assign CPT code
66982 to a higher paying C–APC than
CPT code 66984, we would monitor
claims data for changes in the
distribution of coding complex cataract
surgery and routine cataract surgery if
we were to adopt this change. We are
seeking public comments from
stakeholders, including
ophthalmologists, organizations
representing ophthalmologists,
beneficiaries, hospitals, and all other
interested parties on whether we should
create a new C–APC that includes
complex cataract surgeries identified by
CPT code 66982 (along with other
intraocular procedures that are similar
in resources) in a newly created C–APC
that is separate from those identified by
CPT code 66984. That is, we are
considering whether to establish a new
Level 2 Intraocular Procedures C–APC
in between existing C–APCs 5491 and
5492.
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IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payments for
Devices
1. Beginning Eligibility Date for Device
Pass-Through Status and Quarterly
Expiration of Device Pass-Through
Payments
a. Background
Under section 1833(t)(6)(B)(iii) of the
Act, the period for which a device
category eligible for transitional passthrough payments under the OPPS can
be in effect is at least 2 years but not
more than 3 years. Prior to CY 2017, our
regulation at 42 CFR 419.66(g) provided
that this pass-through payment
eligibility period began on the date CMS
established a particular transitional
pass-through category of devices, and
we based the pass-through status
expiration date for a device category on
the date on which pass-through
payment was effective for the category.
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79654), in
accordance with section
1833(t)(6)(B)(iii)(II) of the Act, we
amended § 419.66(g) to provide that the
pass-through eligibility period for a
device category begins on the first date
on which pass-through payment is made
under the OPPS for any medical device
described by such category.
In addition, prior to CY 2017, our
policy was to propose and finalize the
dates for expiration of pass-through
status for device categories as part of the
OPPS annual update. This means that
device pass-through status would expire
at the end of a calendar year when at
least 2 years of pass-through payments
has been made, regardless of the quarter
in which the device was approved. In
the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79655), we
changed our policy to allow for
quarterly expiration of pass-through
payment status for devices, beginning
with pass-through devices approved in
CY 2017 and subsequent calendar years,
to afford a pass-through payment period
that is as close to a full 3 years as
possible for all pass-through payment
devices. We refer readers to the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79648 through 79661) for
a full discussion of the changes to the
device pass-through payment policy.
We also have an established policy to
package the costs of the devices that are
no longer eligible for pass-through
payments into the costs of the
procedures with which the devices are
reported in the claims data used to set
the payment rates (67 FR 66763).
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b. Expiration of Transitional PassThrough Payments for Certain Devices
As stated earlier, section
1833(t)(6)(B)(iii) of the Act requires that,
under the OPPS, a category of devices
be eligible for transitional pass-through
payments for at least 2 years, but not
more than 3 years. There currently are
three device categories eligible for passthrough payment: (1) HCPCS code
C2623 (Catheter, transluminal
angioplasty, drug-coated, non-laser),
which was established effective April 1,
2015; (2) HCPCS code C2613 (Lung
biopsy plug with delivery system),
which was established effective July 1,
2015; and (3) HCPCS code C1822
(Generator, neurostimulator
(implantable), high frequency, with
rechargeable battery and charging
system), which was established effective
January 1, 2016. The pass-through
payment status of the device categories
for HCPCS codes C2623, C2613, and
C1822 will end on December 31, 2017.
We note that our new policy adopted in
the CY 2017 OPPS/ASC final rule with
comment period to allow for quarterly
expiration of pass-through payment
status for devices applies to devices
approved in CY 2017 and subsequent
years. As all the devices in these three
device categories were approved prior to
CY 2017, we are applying our policy to
expire them at the end of the calendar
year when at least 2 years of passthrough payments have been made.
Therefore, we are proposing, beginning
in CY 2018, to package the costs of each
of the devices described by HCPCS
codes C2623, C2613, and C1822 into the
costs related to the procedure with
which each device is reported in the
hospital claims data.
2. New Device Pass-through
Applications
a. Background
Section 1833(t)(6) of the Act provides
for pass-through payments for devices,
and section 1833(t)(6)(B) of the Act
requires CMS to use categories in
determining the eligibility of devices for
pass-through payments. As part of
implementing the statute through
regulations, we have continued to
believe that it is important for hospitals
to receive pass-through payments for
devices that offer substantial clinical
improvement in the treatment of
Medicare beneficiaries to facilitate
access by beneficiaries to the advantages
of the new technology. Conversely, we
have noted that the need for additional
payments for devices that offer little or
no clinical improvement over
previously existing devices is less
apparent. In such cases, these devices
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can still be used by hospitals, and
hospitals will be paid for them through
appropriate APC payment. Moreover, a
goal is to target pass-through payments
for those devices where cost
considerations might be most likely to
interfere with patient access (66 FR
55852; 67 FR 66782; and 70 FR 68629).
As specified in regulations at 42 CFR
419.66(b)(1) through (b)(3), to be eligible
for transitional pass-through payment
under the OPPS, a device must meet the
following criteria: (1) If required by
FDA, the device must have received
FDA approval or clearance (except for a
device that has received an FDA
investigational device exemption (IDE)
and has been classified as a Category B
device by the FDA), or another
appropriate FDA exemption; and the
pass-through payment application must
be submitted within 3 years from the
date of the initial FDA approval or
clearance, if required, unless there is a
documented, verifiable delay in U.S.
market availability after FDA approval
or clearance is granted, in which case
CMS will consider the pass-through
payment application if it is submitted
within 3 years from the date of market
availability; (2) the device is determined
to be reasonable and necessary for the
diagnosis or treatment of an illness or
injury or to improve the functioning of
a malformed body part, as required by
section 1862(a)(1)(A) of the Act; and (3)
the device is an integral part of the
service furnished, is used for one
patient only, comes in contact with
human tissue, and is surgically
implanted or inserted (either
permanently or temporarily), or applied
in or on a wound or other skin lesion.
In addition, according to § 419.66(b)(4),
a device is not eligible to be considered
for device pass-through payment if it is
any of the following: (1) Equipment, an
instrument, apparatus, implement, or
item of this type for which depreciation
and financing expenses are recovered as
depreciation assets as defined in
Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15–
1); or (2) a material or supply furnished
incident to a service (for example, a
suture, customized surgical kit, or clip,
other than a radiological site marker).
Separately, we use the following
criteria, as set forth under § 419.66(c), to
determine whether a new category of
pass-through payment devices should
be established. The device to be
included in the new category must—
• Not be appropriately described by
an existing category or by any category
previously in effect established for
transitional pass-through payments, and
was not being paid for as an outpatient
service as of December 31, 1996;
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• Have an average cost that is not
‘‘insignificant’’ relative to the payment
amount for the procedure or service
with which the device is associated as
determined under § 419.66(d) by
demonstrating: (1) The estimated
average reasonable costs of devices in
the category exceeds 25 percent of the
applicable APC payment amount for the
service related to the category of
devices; (2) the estimated average
reasonable cost of the devices in the
category exceeds the cost of the devicerelated portion of the APC payment
amount for the related service by at least
25 percent; and (3) the difference
between the estimated average
reasonable cost of the devices in the
category and the portion of the APC
payment amount for the device exceeds
10 percent of the APC payment amount
for the related service (with the
exception of brachytherapy and
temperature-monitored cryoblation,
which are exempt from the cost
requirements as specified at
§§ 419.66(c)(3) and (e)); and
• Demonstrate a substantial clinical
improvement, that is, substantially
improve the diagnosis or treatment of an
illness or injury or improve the
functioning of a malformed body part
compared to the benefits of a device or
devices in a previously established
category or other available treatment.
Beginning in CY 2016, we changed
our device pass-through evaluation and
determination process. Device passthrough applications are still submitted
to CMS through the quarterly
subregulatory process, but the
applications will be subject to noticeand-comment rulemaking in the next
applicable OPPS annual rulemaking
cycle. Under this process, all
applications that are preliminarily
approved upon quarterly review will
automatically be included in the next
applicable OPPS annual rulemaking
cycle, while submitters of applications
that are not approved upon quarterly
review will have the option of being
included in the next applicable OPPS
annual rulemaking cycle or
withdrawing their application from
consideration. Under this notice-andcomment process, applicants may
submit new evidence, such as clinical
trial results published in a peerreviewed journal or other materials for
consideration during the public
comment process for the proposed rule.
This process allows those applications
that we are able to determine meet all
the criteria for device pass-through
payment under the quarterly review
process to receive timely pass-through
payment status, while still allowing for
a transparent, public review process for
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all applications (80 FR 70417 through
70418).
More details on the requirements for
device pass-through payment
applications are included on the CMS
Web site in the application form itself
at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/passthrough_
payment.html, in the ‘‘Downloads’’
section. In addition, CMS is amenable to
meeting with applicants or potential
applicants to discuss research trial
design in advance of any device passthrough application or to discuss
application criteria, including the
substantial clinical improvement
criterion.
b. Applications Received for Device
Pass-Through Payment for CY 2018
We received five applications by the
March 1, 2017 quarterly deadline,
which was the last quarterly deadline
for applications to be received in time
to be included for this CY 2018 OPPS/
ASC proposed rule. All applications
were received in the second quarter of
2016. None of the five applications were
approved for device pass-through
payment during the quarterly review
process.
Applications received for the later
deadlines for the remaining 2017
quarters (June 1, September 1, and
December 1), if any, will be presented
in the CY 2019 OPPS/ASC proposed
rule. We note that the quarterly
application process and requirements
have not changed in light of the
addition of rulemaking review. Detailed
instructions on submission of a
quarterly device pass-through payment
application are included on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
Downloads/catapp.pdf. A discussion of
the five applications received by the
March 1, 2017 deadline is presented
below.
(1) Architect® Px
Harbor MedTech, Inc. submitted an
application for a new device category
for transitional pass-through payment
status for Architect® Px. Architect® Px
is a collagen biomatrix comprised of a
stabilized extracellular matrix derived
from equine pericardium. The equine
pericardium is stabilized to become a
catalyst and scaffold for use by
autologous tissue regeneration factors.
Architect® Px is packaged as an
individual unit in sizes ranging from
2cm x 2cm up to 10cm x 15cm and is
approximately 0.75mm thick.
Architect® Px typically requires only
one application. The applicant asserted
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that it is clinically superior to other skin
substitutes that work by flooding the
wound with nonautologous collagen
and growth factors because Architect®
Px attracts and concentrates the
patient’s own autologous collagen and
growth factors to support healing.
With respect to the newness criterion
at § 419.66(b)(1), the applicant received
FDA clearance for Architect® Px on
September 12, 2014, and its June 1, 2016
application was submitted within 3
years of FDA clearance. However, Unite
BioMatrix, cleared by the FDA on June
20, 2007, is claimed as a predicate of
Architect® Px. The Architect® Px
application states that ‘‘. . .while
packaged differently, Architect® Px and
Unite BioMatrix are identical . . . they
are both stabilized equine pericardium
manufactured using the same processes
. . .’’ If the date for FDA clearance for
Unite BioMatrix is used to evaluate the
newness criterion, Architect® Px may
not meet the newness criterion. We are
inviting public comments on this issue.
With respect to the eligibility criterion
at § 419.66(b)(3), according to the
applicant Architect® Px is a skin
substitute product that is integral to the
service provided, is used for one patient
only, comes in contact with human
skin, and is surgically inserted into the
patient. The applicant also claims
Architect® Px meets the device
eligibility requirements of § 419.66(b)(4)
because Architect® Px is not an
instrument, apparatus, implement, or
item for which depreciation and
financing expenses are recovered, and it
is not a supply or material.
The criteria for establishing new
device categories are specified at
§ 419.66(c). The first criterion, at
§ 419.66(c)(1), provides that CMS
determines that a device to be included
in the category is not appropriately
described by any of the existing
categories or by any category previously
in effect, and was not being paid for as
an outpatient service as of December 31,
1996. We have not identified an existing
pass-through category that describes
Architect® Px. Harbor MedTech, Inc.
proposes a new device category
descriptor of ‘‘Stabilized Skin Substitute
for Autologous Tissue Regeneration’’ for
Architect® Px. We are inviting public
comments on this issue.
The second criterion for establishing
a device category, at § 419.66(c)(2),
provides that CMS determines that a
device to be included in the category
has demonstrated that it will
substantially improve the diagnosis or
treatment of an illness or injury or
improve the functioning of a malformed
body part compared to the benefits of a
device or devices in a previously
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established category or other available
treatment. With regard to the substantial
clinical improvement criterion, the
applicant only identifies two references,
neither of which we believe provide
evidence of substantial clinical
improvement. One reference is a 2012
summary report 1 of skin substitute
products that can be used to treat
chronic wounds that only describes
characteristics of the predecessor
product to Architect® Px with no
efficacy or performance information.
The second reference 2 is a small
observational study of 34 subjects with
no comparison group. We are inviting
public comments on whether Architect®
Px meets the substantial clinical
improvement criterion.
The third criterion for establishing a
device category, at § 419.66(c)(3),
requires us to determine that the cost of
the device is not insignificant, as
described in § 419.66(d). Section
419.66(d) includes three cost
significance criteria that must each be
met. The applicant provided the
following information in support of the
cost significance requirements.
Architect® Px would be reported with
CPT codes 15271 through 15278, which
cover the application of skin substitute
grafts to different areas of the body for
high-cost skin substitutes. To meet the
cost criterion for device pass-through
payment, a device must pass all three
tests of the cost criterion for at least one
APC. CPT codes 15271 through 15278
are assigned to either APC 5054 (Level
4 Skin Procedures), with a CY 2016
payment rate of $1,411.21 and a device
offset of $4.52, or APC 5055 (Level 5
Skin Procedures), with a CY 2016
payment rate of $2,137.49 and a device
offset of $25.44. According to the
applicant, the cost of the substitute graft
procedures when performed with
Architect® Px is $5,495.
Section 419.66(d)(1), the first cost
significance requirement, provides that
the estimated average reasonable cost of
devices in the category must exceed 25
percent of the applicable APC payment
amount for the service related to the
category of devices. The estimated
average reasonable cost of $5,495 for
Architect® Px exceeds the applicable
APC amount for the service related to
the category of devices of $1,411.21 by
389 percent ($5,495/$1,411.21 × 100
percent = 389 percent). Therefore, it
1 Snyder, D.L. et al. Skin Substitutes for Treating
Chronic Wounds. Technology Assessment Report.
Project ID: HCPR0610. AHRQ. December 18, 2012.
2 Alexander JH, Yeager DA, et al. Equine
Pericardium as a Biological Covering for the
Treatment of Diabetic Foot Wounds; a Prospective
Study. J Am Podiatric Assoc., 2012 Sep–Oct.:102
(5): 352–358.
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appears that Architect® Px meets the
first cost significance test.
The second cost significance test, at
§ 419.66(d)(2), provides that the
estimated average reasonable cost of the
devices in the category must exceed the
cost of the device-related portion of the
APC payment amount for the related
service by at least 25 percent, which
means the device cost needs to be at
least 125 percent of the offset amount
(the device-related portion of the APC
found on the offset list). The estimated
average reasonable cost of $5,495 for
Architect® Px exceeds the devicerelated portion of the APC payment
amount for the related service of $4.52
by 121,571 percent ($5,495/$4.52 × 100
percent = 121,571 percent). Therefore, it
appears that Architect® Px meets the
second cost significance test.
Section 419.66(d)(3), the third cost
significance test, requires that the
difference between the estimated
average reasonable cost of the devices in
the category and the portion of the APC
payment amount for the device must
exceed 10 percent of the APC payment
amount for the related service. The
difference between the estimated
average reasonable cost of $5,495 for
Architect® Px and the portion of the
APC payment amount for the device of
$4.52 exceeds 10 percent at 389 percent
(($5,495 ¥ $4.52)/$1,411.21) × 100
percent = 389 percent). Therefore, it
appears that Architect® Px meets the
third cost significance test. Based on the
costs submitted by the applicant and the
calculations noted earlier, we believe
that Architect® Px meets the cost
criterion at § 419.66(c)(3) for new device
categories.
We are inviting public comments on
whether Architect® Px meets the device
pass-through payment criteria discussed
in this section.
(2) Dermavest and Plurivest Human
Placental Connective Tissue Matrix
(HPCTM)
Aedicell, Inc. submitted an
application for a new device category
for transitional pass-through payment
status for Dermavest and Plurivest
human placental connective tissue
matrix (HPCTM). Dermavest and
Plurivest HPCTM use tissue sourced
from the placental disk, amnion/
chorion, and umbilical cord to replace
or supplement damaged tissue. The
applicant stated that Dermavest and
Plurivest replace or supplement
damaged or inadequate integumental
tissue by providing a scaffold to entrap
migrating cells for repopulation. The
applicant stated that the products may
be clinically indicated for the following
conditions: Partial and full thickness
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wounds; pressure ulcers; venous ulcers;
chronic vascular ulcers; diabetic ulcers;
trauma wounds (abrasions, lacerations,
second degree burns, and skin tears);
drainage wounds; and surgical wounds
(donor sites/grafts post mohs surgery,
post laser surgery, and podiatric).
Dermavest and Plurivest HPCTM are
applied to the area of inadequate or
damaged tissue, moistened if necessary
and covered with a nonadherent
secondary dressing. While the
application does not distinguish
between the Dermavest and Plurivest
products, the AediCell Inc. Web site
states that the two products differ by
dosage. According to information on the
Web site at www.aedicell.com, each
product contains different tissue cell
attachment proteins (CAP) and
cytokine/growth factors (GF) profiles.
There is a lower cytokine/GF
concentration profile in Plurivest and a
higher concentration of CAP and
cytokine/GF in Dermavest.
With respect to the newness criterion
at § 419.66(b)(1), the applicant indicated
that the product conforms to the FDA
regulatory path under section 361 of the
Public Health Service (PHS) Act and 21
CFR part 1271 for Human Cells, Tissues,
and Cellular and Tissue-Based Products
(HCT/Ps). Under this regulatory path,
FDA requires the manufacturer to
register and list its HCT/Ps with the
Center for Biologics Evaluation and
Research (CBER) within 5 days after
beginning operations and to update
their registrations annually. AediCell
Inc. has an FDA field establishment
identifier (FEI) under the HHS–FDAEstablishment Registration and Listing
for Human Cells, Tissues, and Cellular
and Tissue-Based Products (HCT/Ps)
and submitted with its application the
annual registration/listing for Dermavest
and Plurivest dated November 9, 2015.
The applicant noted that the initial
registration for the manufacture of
Dermavest was submitted to the CBER
on October 28, 2013, and the
registration of Plurivest was submitted
the following year on November 14,
2014. The registration forms including
these dates were not included in the
application. Therefore, it is unclear if
the newness criterion is met.
With respect to the eligibility criterion
at § 419.66(b)(3), according to the
applicant, Dermavest and Plurivest are
skin substitute products that are integral
to the service provided, are used for one
patient only, come in contact with
human skin, and are applied in or on a
wound or other skin lesion. The
applicant also claimed Dermavest and
Plurivest meet the device eligibility
requirements of § 419.66(b)(4) because
they are not instruments, apparatuses,
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implements, or items for which
depreciation and financing expenses are
recovered, and they are not supplies or
materials furnished incident to a
service.
The criteria for establishing new
device categories are specified at
§ 419.66(c). The first criterion, at
§ 419.66(c)(1), provides that CMS
determines that a device to be included
in the category is not appropriately
described by any of the existing
categories or by any category previously
in effect, and was not being paid for as
an outpatient service as of December 31,
1996. We have not identified an existing
pass-through payment category that
describes Dermavest and Plurivest
HPCTM. The applicant proposed a
category descriptor for Dermavest and
Pluravest of ‘‘Human placental
connective tissue matrix (HPCTM),
comprised of tissue sourced from the
placental disk, amnion/chorion, and
umbilical cord for the intention of
replacing or supplementing damaged or
inadequate integumental issue.’’ We are
inviting public comments on this issue.
The second criterion for establishing
a device category, at § 419.66(c)(2),
provides that CMS determines that a
device to be included in the category
has demonstrated that it will
substantially improve the diagnosis or
treatment of an illness or injury or
improve the functioning of a malformed
body part compared to the benefits of a
device or devices in a previously
established category or other available
treatment. With respect to this criterion,
the applicant provided several
background studies showing general
evidence that placental tissue, umbilical
cord, and amnion membrane products
are effective in the treatment of various
wounds and ulcers. However, these
studies were not specific to Dermavest
and Plurivest HPCTM. The applicant
submitted two poster presentations
describing case studies that evaluated
the wound healing time and wound
characteristics of patients with diabetic
and venous ulcers treated with
Dermavest and Plurivest HPCTM. Both
studies were described as case series
and, as such, lacked blinding,
randomization, and control groups. The
first poster,3 presented in 2015,
described a prospective, multi-center
case series with a small number of
participants (n = 15). The study
evaluated wound healing time and
wound characteristics of patients with
various etiologies. The patients were
treated with up to two six cm2 pieces of
Dermavest per application on wounds
up to 44 cm2. Results were presented for
diabetic and venous ulcer cases and
showed a week 4 percent area reduction
(PAR) of 71 percent for diabetic ulcers
and 50 percent for venous ulcers. Eighty
percent of the diabetic ulcer cases and
50 percent of the venous ulcer cases had
a week 4 PAR of greater than 40 percent.
The second poster,4 presented in
2016, also described a case series that
evaluated wound healing time and
wound characteristics of patients with
various etiologies (n = 8). The poster
stated that the patients were treated
with pieces of HPCTM according to
manufacturer guidelines on wounds
ranging in size up to 3.8 cm2. The
methods presented in the poster do not
specify whether the patients were
treated with Dermavest or Plurivest, or
both. The results presented in the poster
compile Dermavest data from two case
series presented at the Society for
Advanced Wound Care (SAWC) annual
meeting. It was unclear whether there
was overlap between the patients used
in the 2015 and 2016 case series
included in the application. The
compiled Dermavest data were
compared to the 4-week PAR results for
diabetic and venous ulcers from two
other noncontemporaneous studies
evaluating different skin replacement
products. The results showed, at week
4, approximately 80 percent of the
Dermavest-treated diabetic ulcer cases
had a PAR of greater than 50 percent in
comparison to approximately 60 percent
of cases and approximately 30 percent
of cases, respectively, in the comparison
studies using other skin replacement
products. The results also showed that,
at week 4, approximately 60 percent of
the Dermavest-treated venous ulcer
cases had a PAR of greater than 40
percent in comparison to approximately
50 percent of cases and approximately
30 percent of cases in the comparison
studies treated with other skin
replacement products. There were
multiple differences between the
Dermavest studies included in the
poster presentations and these two
additional studies presented as
comparators, including the number of
patients included in the studies, the
number of wounds treated, and the
purpose of the study. Based on the
results presented in the poster, the
applicant concluded that HPCTM
3 Connell et al., Human placental connective
tissue matrix in the treatment of chronic wounds:
A prospective multi-center case series. 2015 at
Society of Advanced Wound Healing (SAWC)
Spring meeting.
4 McGuire and Sebag, The use of a new placental
acellular tissue product in the management of
chronic wounds: A case series. 2016 at the Society
of Advanced Wound Healing (SAWC) Spring
meeting.
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provides an effective alternative to other
skin replacement products.
We are concerned that the research
provided did not clinically demonstrate
the active ingredients of the product(s)
that might distinguish the product from
others, the correct dosing of the
product(s), the amount of durable
wound closure with the product(s)
compared to standard of care in studies
with rigorous trial design/
implementation, and the amount of
durable wound closure with the
product(s) compared to other products
in studies with rigorous trial design/
implementation. Based on the evidence
submitted with the application, we are
not yet convinced that the Dermavest
and Plurivest HPCTM provide a
substantial clinical improvement over
other treatments for wound care. We are
inviting public comments on whether
the Dermavest and Plurivest HPCTM
meet this criterion.
The third criterion for establishing a
device category, at § 419.66(c)(3),
requires us to determine that the cost of
the device is not insignificant, as
described in § 419.66(d). Section
419.66(d) includes three cost
significance criteria that must each be
met. The applicant provided the
following information in support of the
cost significance requirements. The
applicant stated that Dermavest and
Plurivest HPCTM would be reported
with CPT codes 15271, 15272, 15273,
15274, 15275, 15276, 15277, and 15278.
CPT codes 15272, 15274, 15276, and
15278 are add-on codes assigned status
indicator ‘‘N’’, which means payment is
packaged under the OPPS. CPT codes
15271 and 15275 are assigned to APC
5054 (Level 4 Skin Procedures), and
CPT codes 15273 and 15277 are
assigned to APC 5055 (Level 5 Skin
Procedures). To meet the cost criterion
for device pass-through payment, a
device must pass all three tests of the
cost criterion for at least one APC. For
our calculations, we used APC 5054
(Level 4 Skin Procedures), which had a
CY 2016 payment rate of $1,411 and a
device offset amount of $4.52 at the time
the application was received. According
to the applicant, the cost of a sheet of
2x3 cm Dermavest is $550, and the cost
of a sheet of 2x3 cm Plurivest is $500.
Section 419.66(d)(1), the first cost
significance requirement, provides that
the estimated average reasonable cost of
devices in the category must exceed 25
percent of the applicable APC payment
amount for the service related to the
category of devices. The estimated
average reasonable cost of $550 for
Dermavest and Plurivest exceeds 39
percent of the applicable APC payment
amount for the service related to the
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category of devices of $1,411 ($550/
$1,411 × 100 = 39 percent). Therefore,
we believe Dermavest and Plurivest
meet the first cost significance test.
The second cost significance test, at
§ 419.66(d)(2), provides that the
estimated average reasonable cost of the
devices in the category must exceed the
cost of the device-related portion of the
APC payment amount for the related
service by at least 25 percent, which
means that the device cost needs to be
at least 125 percent of the offset amount
(the device-related portion of the APC
found on the offset list). The estimated
average reasonable cost of $550 for
Dermavest and Plurivest exceeds the
cost of the device-related portion of the
APC payment amount for the related
service of $4.52 by 12,168 percent
($550/$4.52) × 100 = 12,168 percent).
Therefore, we believe that Dermavest
and Plurivest meet the second cost
significance test.
The third cost significance test, at
§ 419.66(d)(3), requires that the
difference between the estimated
average reasonable cost of the devices in
the category and the portion of the APC
payment amount for the device must
exceed 10 percent of the APC payment
amount for the related service. The
difference between the estimated
average reasonable cost of $550 for
Dermavest and Plurivest and the portion
of the APC payment amount for the
device of $4.52 exceeds the APC
payment amount for the related service
of $1,411 by 38.6 percent (($550 ¥
$4.52)/$1,411 × 100 = 38.6 percent).
Therefore, we believe that Dermavest
and Plurivest meet the third cost
significance test.
We are inviting public comments on
whether Dermavest and Plurivest meet
the device pass-through payment
criteria discussed in this section.
¯
¯
(3) FloGraft®/Flograft Neogenesis®
Applied Biologics, LLC submitted an
application for a new device category
for transitional pass-through payment
¯
¯
status for FloGraft®/Flograft
¯
¯
Neogenesis®. FloGraft®/Flograft
Neogenesis® is an injectable, human
placental amniotic fluid. It is an
allograft derived from human birth
tissue recovered from a live, healthy Csection birth. The allograft is used to
augment tissue to bone and tissue to
tissue repairs. The allograft is implanted
at the surgical site at the end of the
procedure using a needle and syringe
under direct visualization. The
applicant claimed that the product
helps drive healing towards native
tissue regeneration and away from scar
¯
formation. FloGraft® has a standardized
¯
potency of 2 million cells. FloGraft
PO 00000
Frm 00058
Fmt 4701
Sfmt 4702
Neogenesis® has a standardized potency
of 1.5 million cells. The applicant
indicated that the product may be used
with several surgical procedures,
including joint replacement procedures,
traumatic bone and soft tissue injury,
meniscal repairs, meniscal
transplantation, articular cartilage
restoration, foot and ankle repairs, and
chronic wounds.
With respect to the newness criterion
at § 419.66(b)(1), the applicant indicated
¯
¯
that FloGraft® and Flograft Neogenesis®
conform to the FDA regulatory path
under section 361 of the PHS Act and
21 CFR part 1271 for Human Cells,
Tissues, and Cellular and Tissue-Based
Products (HCT/Ps). Under this
regulatory path, FDA requires the
manufacturer to register and list their
HCT/Ps with the Center for Biologics
Evaluation and Research (CBER) within
5 days after beginning operations and
update their registrations annually.
Applied Biologics, LLC has two FDA
field establishment identifiers (FEI)
under the HHS–FDA-Establishment
Registration and Listing for Human
Cells, Tissues, and Cellular and TissueBased Products (HCT/Ps). Both
registration forms list the product as
¯
‘‘FloGraft®’’. The applicant submitted
an initial registration/listing for one FEI
dated June 8, 2015, as well as an annual
registration/listing for a different FEI
dated December 1, 2014. The first date
¯
of U.S. sale for FloGraft® was May 23,
2013. It is not clear when the initial
¯
CBER filing occurred for the FloGraft®
product. Therefore, it is unclear if the
¯
newness criterion for the FloGraft®
product is met.
With respect to the eligibility criterion
at § 419.66(b)(3), according to the
¯
¯
applicant, FloGraft® and Flograft
Neogenesis® are integral to the service
provided, are used for one patient only,
come in contact with human skin, and
are applied in or on a wound or other
skin lesion. The applicant also claimed
¯
¯
FloGraft® and Flograft Neogenesis meet
the device eligibility requirements of
§ 419.66(b)(4) because they are not
instruments, apparatuses, implements,
or items for which depreciation and
financing expenses are recovered, and
they are not supplies or materials
furnished incident to a service.
The criteria for establishing new
device categories are specified at
§ 419.66(c). The first criterion, at
§ 419.66(c)(1), provides that CMS
determines that a device to be included
in the category is not appropriately
described by any of the existing
categories or by any category previously
in effect, and was not being paid for as
an outpatient service as of December 31,
1996. We have not identified an existing
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pass-through payment device category
¯
¯
that describes FloGraft®/Flograft
Neogenesis®. The application proposed
a payment device category for
¯
¯
FloGraft®/Flograft Neogenesis® with a
category descriptor of ‘‘Injectable
Amniotic Fluid Allograft’’. We are
inviting public comments on this issue.
The second criterion for establishing
a device category, at § 419.66(c)(2),
provides that CMS determines that a
device to be included in the category
has demonstrated that it will
substantially improve the diagnosis or
treatment of an illness or injury or
improve the functioning of a malformed
body part compared to the benefits of a
device or devices in a previously
established category or other available
treatment. With respect to the
substantial clinical improvement
criterion, the applicant submitted
several peer-reviewed publications that
provided general evidence that amniotic
fluid and amniotic membrane-based
products significantly reduce recovery
time. However, these studies did not
¯
¯
include the use of the FloGraft®/Flograft
Neogenesis® product. The applicant did
list several studies in the application
¯
that involved the use of the FloGraft®/
¯
Flograft Neogenesis® product. Of these
studies, five unpublished studies were
available for review. The five studies
submitted with the application were
described as case studies, case series, or
retrospective cohort studies. The studies
lacked random allocation, blinding, and
a comparison group. The first study 5
described a retrospective cohort study of
30 patients. The studies showed that 93
percent of the patients (n=14) who
¯
received a FloGraft® injection, coupled
with conservative, nonsurgical
treatment plan to treat their Morton’s
Nerve entrapment condition, had their
issue resolved compared to 20 percent
of patients (n=3) who did not receive
¯
FloGraft® injection, coupled with
conservative, nonsurgical treatment
plan to treat their Morton’s Nerve
entrapment condition. A greater
percentage of patients who did not
¯
receive a FloGraft® injection with their
conservative treatment required surgery
(80 percent versus 7 percent). Patients
who required surgery had a 95-percent
success rate when surgery was coupled
¯
with a FloGraft® injection.
The next study 6 was a retrospective
analysis that involved 27 patients who
were treated for stalled wounds. The
patients had a broad spectrum of
5 Bregman, Peter. (2014). Addressing Morton’s
Nerve Entrapment Surgically and Non-surgically
with FloGraft.
6 Gottleib, et al. FloGraft Rapidly Moves Stalled
Wounds Into the Proliferative Phase.
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Jkt 241001
etiologies. Over a 12-month period, the
applicant indicated that 96 percent of
wounds that had stalled demonstrated
rapid acceleration towards closure
within a 21-day period when treated
¯
with FloGraft®. The article
recommended a randomized controlled
trial (RCT) to confirm the results. The
applicant also submitted two case
studies,7 8 each involving one patient,
¯
which described the use of FloGraft® to
treat distal fibula fracture and tarsal
tunnel compression neuropathy. Lastly,
the application included a study 9
which presented the results from a case
study of one patient as well as a
retrospective cohort of 34 patients who
¨
received a Brostrom-Evans procedure
¯
with the FloGraft® product. In general,
the studies submitted lacked a clear
description of the outcome variable and
study population, and did not include
statistical analysis.
Based on the evidence submitted, we
believe there is insufficient data to
¯
¯
determine whether FloGraft®/Flograft
Neogenesis® offers a substantial clinical
improvement over other treatments for
wound care. We are inviting public
¯
comments on whether the FloGraft®/
¯
Flograft Neogenesis® meets the
substantial clinical improvement
criterion.
The third criterion for establishing a
device category, at § 419.66(c)(3),
requires us to determine that the cost of
the device is not insignificant, as
described in § 419.66(d). Section
419.66(d) includes three cost
significance criteria that must each be
met. The applicant provided the
following information in support of the
cost significance requirements. The
applicant stated several CPT codes
¯
would be used to report FloGraft®/
¯
Flograft Neogenesis®, including CPT
codes 29826, 29827, 29828, 23473,
23420, 23412, 27605, 27650, 29891,
29888, 29889, 28008, 22551, 22856,
27179, 29861, and 29862. To meet the
cost criterion for device pass-through
payment, a device must pass all three
tests of the cost criterion for at least one
APC. These CPT codes are assigned to
APCs 5121 through 5125 (Level 1
through Level 5 Musculoskeletal
Procedures). For our calculations, we
used APC 5121 (Level 1
Musculoskeletal Procedures), which had
a CY 2016 payment rate of $1,455 and
7 Jacoby, Richard. Case Study 221: Non-surgical
Resolution of Distal Fibula Fracture with Flograft
Implant; 82 YO Male.
8 Jacoby, Richard. Tarsal Tunnel Compression
Neuropathy Case Study Using Flograft.
9 Maling, Scott. A Case Series: A retrospective
analysis of 34 patients receiving modified
Bronstom-Evans procedure with Flograft reduce
time to full mobility by 52%
PO 00000
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Fmt 4701
Sfmt 4702
33615
a device offset of $15.86 at the time the
application was received. According to
¯
¯
the applicant, the FloGraft®/Flograft
Neogenesis® product is available in a
variety of vial sizes, the largest size
being 18 cc with a cost of $19,925.
Section 419.66(d)(1), the first cost
significance requirement, provides that
the estimated average reasonable cost of
devices in the category must exceed 25
percent of the applicable APC payment
amount for the service related to the
category of devices. We used the highest
priced product for this determination.
The estimated average reasonable cost of
¯
¯
$19,925 for FloGraft®/Flograft
Neogenesis® exceeds the applicable
APC payment amount for the service
related to the category of devices of
$1,455 by 1,369 percent ($19,925/$1,455
× 100 = 1,369 percent). Therefore, we
¯
¯
believe FloGraft®/Flograft Neogenesis®
meets the first cost significance test.
The second cost significance test, at
§ 419.66(d)(2), provides that the
estimated average reasonable cost of the
devices in the category must exceed the
cost of the device-related portion of the
APC payment amount for the related
service by at least 25 percent, which
means that the device cost needs to be
at least 125 percent of the offset amount
(the device-related portion of the APC
found on the offset list). The average
¯
reasonable cost of $19,925 for FloGraft®/
¯
Flograft Neogenesis® exceeds the
device-related portion of the APC
payment amount of $15,86 by 125,360
percent ($19,925/$15.86) × 100 =
125,630 percent). Therefore, we believe
¯
¯
that FloGraft®/Flograft Neogenesis®
meets the second cost significance test.
The third cost significance test, at
§ 419.66(d)(3), requires that the
difference between the estimated
average reasonable cost of the devices in
the category and the portion of the APC
payment amount for the device must
exceed 10 percent of the APC payment
amount for the related service. The
difference between the average
¯
reasonable cost of $19,925 for FloGraft®/
¯
Flograft Neogenesis® and the portion of
the APC payment amount for the device
of $15.86 exceeds the APC payment
amount for the related service of $1,455
by 1,368 percent (($19,925 ¥$15.86)/
$1,455 × 100 = 1,368 percent).
¯
¯
Therefore, we believe FloGraft®/Flograft
Neogenesis® meets the third cost
significance test.
We are inviting public comments on
¯
¯
whether FloGraft®/Flograft Neogenesis®
meets the device pass-through payment
criteria discussed in this section.
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
(4) KerecisTM Omega3 Wound (Skin
Substitute)
Kerecis, LLC submitted an application
for a new device category for
transitional pass-through payment
status for KerecisTM Omega3 Wound.
KerecisTM Omega3 Wound is made from
acellular fish skin from wild Atlantic
cod (Gadus morhua) caught in the North
Atlantic Ocean that is used to regenerate
damaged human tissue in chronic
wounds. The applicant claimed that
there is no disease transmission risk and
noted that the fish skin is not required
to undergo the viral inactivation process
that the FDA dictates for tissues from
farm animals. The applicant noted that
the Omega3 fatty acids offer multiple
health benefits, including antiinflammation. KerecisTM Omega3
Wound is supplied as a sterile, singleuse sheet in peel-open pouches.
KerecisTM Omega3 Wound does not
elicit an immune response because the
major antigenic components present
within cell membranes are removed in
a gentle manner during processing.
Unlike mammalian and human sourced
products, the fish skin possesses
extremely low risk of disease
transmission and offers no known
cultural or religious constraints for
usage. The fish skin product is both
halal and kosher compatible and avoids
potential conflicts with Sikhism and
Hinduism (Vaishnavism).
With respect to the newness criterion
at § 419.66(b)(1), the applicant received
FDA clearance for KerecisTM Omega3
Wound through the premarket
notification section 510(k) process on
October 23, 2013 and its June 1, 2016
application was within 3 years of FDA
clearance.
With respect to the eligibility criterion
at § 419.66(b)(3), according to the
applicant, KerecisTM Omega3 Wound is
a skin substitute product that is integral
to the service provided, is used for one
patient only, comes in contact with
human skin, and is surgically inserted
into the patient. The applicant also
claimed KerecisTM Omega3 Wound
meets the device eligibility
requirements of § 419.66(b)(4) because it
is not an instrument, apparatus,
implement, or item for which
depreciation and financing expenses are
recovered, and it is not a supply or
material.
The criteria for establishing new
device categories are specified at
§ 419.66(c). The first criterion, at
§ 419.66(c)(1), provides that CMS
determines that a device to be included
in the category is not appropriately
described by any of the existing
categories or by any category previously
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in effect, and was not being paid for as
an outpatient service as of December 31,
1996. We have not identified an existing
pass-through payment category that
describes KerecisTM Omega3 Wound.
The applicant proposed a pass-through
payment device category for KerecisTM
Omega3 Wound with category
descriptor of ‘‘Piscine skin substitute.’’
We are inviting public comments on
this issue.
The second criterion for establishing
a device category, at § 419.66(c)(2),
provides that CMS determines that a
device to be included in the category
has demonstrated that it will
substantially improve the diagnosis or
treatment of an illness or injury or
improve the functioning of a malformed
body part compared to the benefits of a
device or devices in a previously
established category or other available
treatment. With regard to the substantial
clinical improvement criterion, the
applicant stated that individuals who
would normally refuse to use skin
substitute products from animal
sources, including pigs, cows, horses,
and sheep, would use KerecisTM
Omega3 Wound because it is a fishbased skin substitute. The applicant also
asserted that KerecisTM Omega3 Wound
provides several beneficial outcomes,
including faster resolution of the disease
process compared to similar products,
decreased antibiotic use, decreased
pain, and reduced amounts of devicerelated complications.
The applicant cited three studies in
support of the application. The first
study 10 was a parallel-group, doubleblinded, randomized controlled trial
undertaken to determine if healing time
of whole thickness biopsy wounds
treated with Kerecis Omega3 Wound is
noninferior to that of wounds treated
with porcine SIS ECM (Oasis). The
study was an intention-to-treat study.
Participants had two 4-mm full
thickness punch wounds made on the
proximal anterolateral aspect of their
nondominant arm. The study
population was comprised of volunteers
aged between 18 and 67 years with most
volunteers between the ages of 18 and
30. There were 80 volunteers who
received Kerecis Omega3 Wound and 82
volunteers who received porcine SIS
ECM (Oasis).
The results showed that, at 21 days,
58 (72.5 percent) of the fish skin ADM
group were healed, compared with 46
(56 percent) of the porcine SIS ECM
10 Tumi Baldursson, T, MD, Ph.D. et al. Healing
Rate and Autoimmune Safety of Full-Thickness
Wounds Treated With Fish Skin Acellular Dermal
Matrix Versus Porcine Small-Intestine Submucosa:
A Noninferiority Study; The International Journal of
Lower Extremity Wounds 2015, Vol. 14(1) 37–43.
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group. At 25 days, 62 (77.5 percent) of
the fish skin ADM and 53 (65 percent)
of the porcine SIS ECM group had
healed. At the completion of the trial
(28 days), 76 of the 80 wounds treated
with fish skin ADM (95 percent) and 79
of the 82 wounds treated with porcine
SIS ECM (96.3 percent) were healed.
The odds ratio of a fish skin ADM–
treated wound being healed as
compared with that treated with porcine
SIS ECM at any given time point was
estimated to be 4.75. The difference
between the treatments was significant
(P = .041). The immunological part of
the study was designed to detect
autoimmune reactions in those
individuals treated with Kerecis
Omega3 Wound. There was no evidence
of antibodies forming in the presence of
Kerecis Omega3 Wound.
There were issues with this study that
may limit its usefulness to determine
substantial clinical improvement
including the use of nonpatient
volunteers; studying the healing of
biopsy sites rather than actual wounds
requiring treatment; and the use of an
unrealistic 1-month endpoint of care
instead of a 6-month endpoint of care.
The second study 11 was a case series
study of 18 patients to assess the
percentage of wound closure area from
baseline after 5 weekly fish-skin graft
applications with at least one ‘‘hard-toheal’’ criterion. Patients underwent
application of the fish skin for 5
sequential weeks, followed by 3 weeks
of standard care. Wound area, skin
assessments, and pain were analyzed
weekly.
The study results showed a 40percent decrease in wound surface area
(P < 0.05) and a 48-percent decrease in
wound depth was seen with 5 weekly
applications of the fish-skin graft and
secondary dressing (P < 0.05). Complete
closure was seen in 3 of 18 patients by
the end of the study phase. This study
did not use a comparator group to
measure whether there is substantial
clinical improvement with Kerecis
Omega3 Wound compared to other skin
substitute products.
The third study 12 was a case series
study of five patients with diabetes
mellitis and complicated wounds in the
lower limbs with exposed bone
segments. The five patients had a total
of seven wounds. Initial debridement
11 Yang, C.K. et al. A Prospective, Postmarket,
Compassionate Clinical Evaluation of a Novel
Acellular Fish-skin Graft Which Contains Omega-3
Fatty Acids for the Closure of Hard-to-heal Lower
Extremity Chronic Ulcers. Wounds 2016;28(4): 112–
118.
12 Trinh, T.T., et al. Marine Omega3 wound
matrix for: the treatment of complicated wounds;
Phlebologie 2016; 45: 93–98.
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occurred in the operating room,
followed by application of wound
matrix and covered with silicone mesh.
All seven wounds healed and the
patients did not have to have planned
amputations on the limbs with the
wounds. The mean duration of
treatment to achieve full closure of the
wound was 25 ± 10 weeks and ranged
from 13 to 41 weeks. This study did not
have a comparator group to determine if
there was substantial clinical
improvement with Kerecis Omega3
Wound compared to other skin
substitute products.
There is no clinical data provided by
the applicant to suggest that Kerecis
Omega3 Wound provides a substantial
clinical improvement over other similar
skin substitute products. We are inviting
public comments on whether Kerecis
Omega3 Wound meets the substantial
clinical improvement criterion.
The third criterion for establishing a
device category, at § 419.66(c)(3),
requires us to determine that the cost of
the device is not insignificant, as
described in § 419.66(d). Section
419.66(d) includes three cost
significance criteria that must each be
met. The applicant provided the
following information in support of the
cost significance requirements. With
respect to the cost criterion, the
applicant stated that KerecisTM Omega3
Wound would be reported with CPT
codes 15271 through 15278, which
cover the application of skin substitute
grafts to different areas of the body for
high-cost skin substitutes. To meet the
cost criterion for device pass-through
payment, a device must pass all three
tests of the cost criterion for at least one
APC. CPT codes 15271 through 15278
are assigned to either APC 5054 (Level
4 Skin Procedures), with a CY 2016
payment rate of $1,411.21 and a device
offset amount of $4.52, or APC 5055
(Level 5 Skin Procedures), with a CY
2016 payment rate of $2,137.49 and a
device offset amount of $25.44.
According to the applicant, the cost of
substitute graft procedures when
performed with KerecisTM Omega3
Wound is $2,030.
Section 419.66(d)(1), the first cost
significance requirement, provides that
the estimated average reasonable cost of
devices in the category must exceed 25
percent of the applicable APC payment
amount for the service related to the
category of devices. The estimated
average reasonable cost of $2,030 for
KerecisTM Omega3 Wound exceeds the
applicable APC payment amount for the
service related to the category of devices
of $1,411.21 by 144 percent ($2,030/
$1,411.21 × 100 percent = 144 percent).
Therefore, it appears that KerecisTM
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Omega3 Wound meets the first cost
significance test.
The second cost significance test, at
§ 419.66(d)(2), provides that the
estimated average reasonable cost of the
devices in the category must exceed the
cost of the device-related portion of the
APC payment amount for the related
service by at least 25 percent, which
means that the device cost needs to be
at least 125 percent of the offset amount
(the device-related portion of the APC
found on the offset list). The average
reasonable cost of $2,030 for KerecisTM
Omega3 Wound exceeds the devicerelated portion of the APC payment
amount of $4.52 by 44,911 percent
($2,030/$4.52 × 100 percent = 449
percent). Therefore, it appears that
KerecisTM Omega3 Wound meets the
second cost significance test.
The third cost significance test, at
§ 419.66(d)(3), requires that the
difference between the estimated
average reasonable cost of the devices in
the category and the portion of the APC
payment amount for the device must
exceed 10 percent of the APC payment
amount for the related service. The
difference between the average
reasonable cost of $2,030 for KerecisTM
Omega3 Wound and the portion of the
APC payment amount for the device of
$4.52 exceeds the APC payment amount
for the related service of $1,411 by 144
percent (($2,030 ¥ $4.52)/$1,411.21) ×
100 percent = 144 percent). Therefore, it
appears that KerecisTM Omega3 Wound
meets the third cost significance test.
Based on the costs submitted by the
applicant and the calculations noted
earlier, it appears that KerecisTM
Omega3 Wound meets the cost criterion.
We are inviting public comments on
whether KerecisTM Omega3 Wound
meets the device pass-through payment
criteria discussed in this section.
(5) X–WRAP®
Applied Biologics, LLC submitted an
application for a new device category
for transitional pass-through payment
status for X–WRAP®. X–WRAP® is a
chorion-free, amnion membrane
allograft that can be used as a biological
wrap or patch at any surgical site. It is
used as a treatment for surgical or
traumatic injury to bone or soft tissue.
It is used to minimize adhesions, reduce
inflammation, and promote soft tissue
healing. The X–WRAP® is made from
the intermediate amniotic epithelial
layer of the placenta, recovered from a
Cesarean delivery of pre-screened
donors. It is available in a variety of
sizes and is used as a biologic
augmentation to a variety of orthopedic
repairs.
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With respect to the newness criterion
at § 419.66(b)(1), the applicant indicated
that X–WRAP® conforms to the FDA
regulatory path under section 361 of the
PHS Act and 21 CFR part 1271 for
Human Cells, Tissues, and Cellular and
Tissue-Based Products (HCT/Ps). Under
this regulatory path, FDA requires the
manufacturer to register and list their
HCT/Ps with the Center for Biologics
Evaluation and Research (CBER) within
5 days after beginning operations and to
update their registrations annually.
Applied Biologics, LLC has a FDA field
establishment identifier (FEI) under the
HHS–FDA-Establishment Registration
and Listing for Human Cells, Tissues,
and Cellular and Tissue-Based Products
(HCT/Ps). The applicant submitted an
annual registration/listing for dated
December 30, 2015. It is not clear when
the initial CBER filing occurred for the
X–WRAP® product, and therefore, it is
unclear if the newness criterion for X–
WRAP® is met.
With respect to the eligibility criterion
at § 419.66(b)(3), according to the
applicant, X–WRAP® is integral to the
service provided, is used for one patient
only, comes in contact with human
skin, and is applied in or on a wound
or other skin lesion. The applicant also
claimed X–WRAP® meets the device
eligibility requirements of § 419.66(b)(4)
because it is not an instrument,
apparatus, implement or item for which
depreciation and financing expenses are
recovered, and it is not a supply or
material furnished incident to a service.
The criteria for establishing new
device categories are specified at
§ 419.66(c). The first criterion, at
§ 419.66(c)(1), provides that CMS
determines that a device to be included
in the category is not appropriately
described by any of the existing
categories or by any category previously
in effect, and was not being paid for as
an outpatient service as of December 31,
1996. We have not identified an existing
pass-through payment device category
that describes X–WRAP®. The applicant
proposed a pass-through device category
for X–WRAP® with a category
descriptor of ‘‘Amniotic Membrane Soft
Tissue Allografts’’. We are inviting
public comments on this issue.
The second criterion for establishing
a device category, at § 419.66(c)(2),
provides that CMS determines that a
device to be included in the category
has demonstrated that it will
substantially improve the diagnosis or
treatment of an illness or injury or
improve the functioning of a malformed
body part compared to the benefits of a
device or devices in a previously
established category or other available
treatment. With regard to the substantial
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clinical improvement criterion, the
applicant submitted a list of studies in
the application that showed general
effectiveness of amniotic fluid and
amniotic membrane-based products.
However, these studies were not
specific to the X–WRAP® product. The
applicant also submitted one study 13
that was a retrospective review with
prospective follow-up of patients (n=8)
with recurrent surgical primary cubital
tunnel syndrome (CuTS) who had
undergone at least two previous ulnar
nerve surgeries before having an ulnar
neurolysis with X–WRAP® dry amniotic
membrane barrier. The results showed
that the participants experienced
significant improvement in VAS pain
scores, QuickDASH outcome scores, and
grip strength in comparison to these
scores prior to the surgery. Mean VAS
improved by 3.5 from, 7.3 to 3.8 (P <
.0001). Mean QuickDASH improved by
30 from, 80 to 50 (P < .0001). Grip
strength improved by 25 pounds on
average (P < .0001), a mean
improvement of 38 percent relative to
the contralateral side compared with
preoperative measurements. Also, none
of the patients reported progression or
worsening of their symptoms compared
with preoperatively. The applicant’s
conclusions from the article were that
using the X–WRAP® amniotic
membrane with revision neurolysis was
a safe and effective treatment for
primary cubital syndrome. The study
lacked a comparison arm and did not
include group assignment or blinding of
patients.
Based on the evidence submitted, we
believe there is insufficient data to
determine whether X–WRAP® offers a
substantial clinical improvement over
other treatments for wound care. We are
inviting public comments on whether
the X–WRAP® meets the substantial
clinical improvement criterion.
The third criterion for establishing a
device category, at § 419.66(c)(3),
requires us to determine that the cost of
the device is not insignificant, as
described in § 419.66(d). Section
419.66(d) includes three cost
significance criteria that must each be
met. The applicant provided the
following information in support of the
cost significance requirements. The
applicant stated that several CPT codes
would be used to report X–WRAP®,
including: CPT codes 29826, 29827,
29828, 23473, 23420, 23412, 27605,
27650, 29891, 29888, 29889, 28008,
22551, 22856, 27179, 29861, 29862,
13 Gaspar, M.P., et al. (2016). Recurrent cubital
tunnel syndrome treated with revision neurolysis
and amniotic membrane nerve wrapping. Journal of
Shoulder and Elbow surgery, 25, 2057–2065.
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15271, 15272, 15273, and 15277. To
meet the cost criterion for device passthrough payment, a device must pass all
three tests for cost threshold for at least
one APC. These CPT codes are assigned
to APCs 5121 through 5125 (Level 1
through Level 5 Musculoskeletal
Procedures) and APCs 5054 and 5055
(Level 4 and Level 5 Skin Procedures).
For our calculations, we used APC 5121
(Level 1 Musculoskeletal Procedures),
which had a CY 2016 payment rate of
$1,455 and a device offset amount of
$15.86 at the time the application was
received. According to the applicant,
the X–WRAP® product is available in
several sizes, the largest being 4x8 cm
with a cost of $5,280.
Section 419.66(d)(1), the first cost
significance requirement, provides that
the estimated average reasonable cost of
devices in the category must exceed 25
percent of the applicable APC payment
amount for the service related to the
category of devices. The estimated
average reasonable cost of $5,280 for X–
WRAP® exceeds the applicable APC
payment amount for the service related
to the category of devices of $1,455 by
363 percent ($5,280/$1,455 × 100 = 363
percent). Therefore, it appears that X–
WRAP® meets the first cost significance
test.
The second cost significance test, at
§ 419.66(d)(2), provides that the
estimated average reasonable cost of the
devices in the category must exceed the
cost of the device-related portion of the
APC payment amount for the related
service by at least 25 percent, which
means that the device cost needs to be
at least 125 percent of the offset amount
(the device related portion of the APC
found on the offset list). The average
reasonable cost of $5,280 for X–WRAP®
exceeds the device-related portion of the
APC payment amount of $15.86 by
33,291 percent ($5,280/$15.86) × 100 =
33,291 percent). Therefore, it appears
that X–WRAP® meets the second cost
significance test.
The third cost significance test, at
§ 419.66(d)(3), requires that the
difference between the estimated
average reasonable cost of the devices in
the category and the portion of the APC
payment amount for the device must
exceed 10 percent of the APC payment
amount for the related service. The
difference between the average
reasonable cost of $5,280 for X–WRAP®
and the portion of the APC payment
amount for the device of $15.86 exceeds
the APC payment amount for the related
service of $1,455 by 361 percent (($5280
¥ $15.86)/$1455 × 100 = 361 percent).
Therefore, it appears that X–WRAP®
meets the third cost significance test.
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We are inviting public comments on
whether X–WRAP® meets the device
pass-through payment criteria discussed
in this section.
B. Proposed Device-Intensive
Procedures
1. Background
Under the OPPS, prior to CY 2017,
device-intensive APCs were defined as
those APCs with a device offset greater
than 40 percent (79 FR 66795). In
assigning device-intensive status to an
APC, the device costs of all of the
procedures within the APC were
calculated and the geometric mean
device offset of all of the procedures had
to exceed 40 percent. Almost all of the
procedures assigned to device-intensive
APCs utilize devices, and the device
costs for the associated HCPCS codes
exceed the 40-percent threshold. The no
cost/full credit and partial credit device
policy (79 FR 66872 through 66873)
applied to device-intensive APCs and is
discussed in detail in section IV.B.4. of
this proposed rule. A related device
policy was the requirement that certain
procedures assigned to device-intensive
APCs require the reporting of a device
code on the claim (80 FR 70422). For
further background information on the
device-intensive APC policy, we refer
readers to the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70421
through 70426).
2. HCPCS Code-Level Device-Intensive
Determination
As stated above, prior to CY 2017, the
device-intensive methodology assigned
device-intensive status to all procedures
requiring the implantation of a device,
which were assigned to an APC with a
device offset greater than 40 percent.
Historically, the device-intensive
designation was at the APC level and
applied to the applicable procedures
within that given APC. In the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79658), we changed our
methodology to assign device-intensive
status to all procedures that require the
implantation of a device and have an
individual HCPCS code-level device
offset of greater than 40 percent,
regardless of the APC assignment.
Under this policy, all procedures with
significant device costs (defined as a
device offset of more than 40 percent)
are assigned device-intensive status,
regardless of their APC placement. Also,
we believe that a HCPCS code-level
device offset is, in most cases, a better
representation of a procedure’s device
cost than an APC-wide average device
offset based on the average device offset
of all of the procedures assigned to an
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APC. Unlike a device offset calculated at
the APC level, which is a weighted
average offset for all devices used in all
of the procedures assigned to an APC,
a HCPCS code-level device offset is
calculated using only claims for a single
HCPCS code. We believe that such a
methodological change results in a more
accurate representation of the cost
attributable to implantation of a highcost device, which ensures consistent
device-intensive designation of
procedures with a significant device
cost. Further, we believe a HCPCS codelevel device offset removes
inappropriate device-intensive status to
procedures without a significant device
cost but which are granted such status
because of APC assignment.
Under our CY 2017 finalized policy,
procedures that have an individual
HCPCS code-level device offset of
greater than 40 percent are identified as
device-intensive procedures and are
subject to all the policies applicable to
procedures assigned device-intensive
status under our established
methodology, including our policies on
device edits and device credits.
Therefore, all procedures requiring the
implantation of a medical device and
that have an individual HCPCS codelevel device offset of greater than 40
percent are subject to the device edit
and no cost/full credit and partial credit
device policies, discussed in sections
IV.B.3. and IV.B.4. of this proposed rule,
respectively.
In addition, for new HCPCS codes
describing procedures requiring the
implantation of medical devices that do
not yet have associated claims data, in
the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79658), we
finalized a policy for CY 2017 to apply
device-intensive status with a default
device offset set at 41 percent for new
HCPCS codes describing procedures
requiring the implantation of a medical
device that do not yet have associated
claims data until claims data are
available to establish the HCPCS codelevel device offset for the procedures.
This default device offset amount of 41
percent is not calculated from claims
data; instead, it is applied as a default
until claims data are available upon
which to calculate an actual device
offset for the new code. The purpose of
applying the 41-percent default device
offset to new codes that describe
procedures that implant medical
devices is to ensure ASC access for new
procedures until claims data become
available. However, in certain rare
instances, for example, in the case of a
very expensive implantable device, we
may temporarily assign a higher offset
percentage if warranted by additional
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information such as pricing data from a
device manufacturer (81 FR 79658).
Once claims data are available for a new
procedure requiring the implantation of
a medical device, device-intensive
status will be applied to the code if the
HCPCS code-level device offset is
greater than 40 percent, according to our
finalized policy of determining deviceintensive status by calculating the
HCPCS code-level device offset.
The full listing of proposed CY 2018
device-intensive procedures is included
in Addendum P to this proposed rule
(which is available via the Internet on
the CMS Web site).
In response to comments received in
the CY 2017 OPPS/ASC final rule with
comment period, we specified that
additional information for our
consideration of an offset percentage
higher than the default of 41 percent for
new HCPCS codes describing
procedures requiring the implantation
(or in some cases the insertion) of a
medical device that do not yet have
associated claims data, such as pricing
data or invoices from a device
manufacturer, should be directed to the
Division of Outpatient Care, Mail Stop
C4–01–26, Centers for Medicare and
Medicaid Services, 7500 Security
Boulevard, Baltimore, MD 21244–1850,
or electronically at outpatientpps@
cms.hhs.gov. Additional information
can be submitted prior to issuance of an
OPPS/ASC proposed rule or as a public
comment in response to an issued
OPPS/ASC proposed rule. Device offset
percentages will be set in each year’s
final rule.
3. Changes to the Device Edit Policy for
CY 2017 and Subsequent Years
In the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66795), we
finalized a policy and implemented
claims processing edits that require any
of the device codes used in the previous
device-to-procedure edits to be present
on the claim whenever a procedure code
assigned to any of the APCs listed in
Table 5 of the CY 2015 OPPS/ASC final
rule with comment period (the CY 2015
device-dependent APCs) is reported on
the claim. In addition, in the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70422), we modified our
previously existing policy and applied
the device coding requirements
exclusively to procedures that require
the implantation of a device that are
assigned to a device-intensive APC. In
the CY 2016 OPPS/ASC final rule with
comment period, we also finalized our
policy that the claims processing edits
are such that any device code, when
reported on a claim with a procedure
assigned to a device-intensive APC
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33619
(listed in Table 42 of the CY 2016 OPPS/
ASC final rule with comment period (80
FR 70422)) will satisfy the edit.
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79658
through 79659), we changed our policy
for CY 2017 and subsequent years to
apply the CY 2016 device coding
requirements to the newly defined
(individual HCPCS code-level device
offset greater than 40 percent) deviceintensive procedures. For CY 2017 and
subsequent years, we also specified that
any device code, when reported on a
claim with a device-intensive
procedure, will satisfy the edit. In
addition, we created HCPCS code C1889
to recognize devices furnished during a
device intensive procedure that are not
described by a specific Level II HCPCS
Category C-code. Reporting HCPCS code
C1889 with a device intensive
procedure will satisfy the edit requiring
a device code to be reported on a claim
with a device-intensive procedure.
We are not proposing any changes to
this policy for CY 2018.
4. Proposed Adjustment to OPPS
Payment for No Cost/Full Credit and
Partial Credit Devices
a. Background
To ensure equitable OPPS payment
when a hospital receives a device
without cost or with full credit, in CY
2007, we implemented a policy to
reduce the payment for specified
device-dependent APCs by the
estimated portion of the APC payment
attributable to device costs (that is, the
device offset) when the hospital receives
a specified device at no cost or with full
credit (71 FR 68071 through 68077).
Hospitals were instructed to report no
cost/full credit device cases on the
claim using the ‘‘FB’’ modifier on the
line with the procedure code in which
the no cost/full credit device is used. In
cases in which the device is furnished
without cost or with full credit,
hospitals were instructed to report a
token device charge of less than $1.01.
In cases in which the device being
inserted is an upgrade (either of the
same type of device or to a different
type of device) with a full credit for the
device being replaced, hospitals were
instructed to report as the device charge
the difference between the hospital’s
usual charge for the device being
implanted and the hospital’s usual
charge for the device for which it
received full credit. In CY 2008, we
expanded this payment adjustment
policy to include cases in which
hospitals receive partial credit of 50
percent or more of the cost of a specified
device. Hospitals were instructed to
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append the ‘‘FC’’ modifier to the
procedure code that reports the service
provided to furnish the device when
they receive a partial credit of 50
percent or more of the cost of the new
device. We refer readers to the CY 2008
OPPS/ASC final rule with comment
period for more background information
on the ‘‘FB’’ and ‘‘FC’’ modifiers
payment adjustment policies (72 FR
66743 through 66749).
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75005
through 75007), beginning in CY 2014,
we modified our policy of reducing
OPPS payment for specified APCs when
a hospital furnishes a specified device
without cost or with a full or partial
credit. For CY 2013 and prior years, our
policy had been to reduce OPPS
payment by 100 percent of the device
offset amount when a hospital furnishes
a specified device without cost or with
a full credit and by 50 percent of the
device offset amount when the hospital
receives partial credit in the amount of
50 percent or more of the cost for the
specified device. For CY 2014, we
reduced OPPS payment, for the
applicable APCs, by the full or partial
credit a hospital receives for a replaced
device. Specifically, under this
modified policy, hospitals are required
to report on the claim the amount of the
credit in the amount portion for value
code ‘‘FD’’ (Credit Received from the
Manufacturer for a Replaced Medical
Device) when the hospital receives a
credit for a replaced device that is 50
percent or greater than the cost of the
device. For CY 2014, we also limited the
OPPS payment deduction for the
applicable APCs to the total amount of
the device offset when the ‘‘FD’’ value
code appears on a claim. For CY 2015,
we continued our existing policy of
reducing OPPS payment for specified
APCs when a hospital furnishes a
specified device without cost or with a
full or partial credit and to use the three
criteria established in the CY 2007
OPPS/ASC final rule with comment
period (71 FR 68072 through 68077) for
determining the APCs to which our CY
2015 policy will apply (79 FR 66872
through 66873). In the CY 2016 OPPS/
ASC final rule with comment period (80
FR 70424), we finalized our policy to no
longer specify a list of devices to which
the OPPS payment adjustment for no
cost/full credit and partial credit
devices would apply and instead apply
this APC payment adjustment to all
replaced devices furnished in
conjunction with a procedure assigned
to a device-intensive APC when the
hospital receives a credit for a replaced
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specified device that is 50 percent or
greater than the cost of the device.
b. Policy for CY 2017 and Subsequent
Years
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79659
through 79660), for CY 2017 and
subsequent years, we finalized our
policy to reduce OPPS payment for
device intensive procedures, by the full
or partial credit a provider receives for
a replaced device, when a hospital
furnishes a specified device without
cost or with a full or partial credit.
Under our current policy, hospitals
continue to be required to report on the
claim the amount of the credit in the
amount portion for value code ‘‘FD’’
when the hospital receives a credit for
a replaced device that is 50 percent or
greater than the cost of the device.
In addition, for CY 2017 and
subsequent years, we finalized our
policy to use the following three criteria
for determining the procedures to which
our final policy will apply: (1) All
procedures must involve implantable
devices that would be reported if device
insertion procedures were performed;
(2) the required devices must be
surgically inserted or implanted devices
that remain in the patient’s body after
the conclusion of the procedure (at least
temporarily); and (3) the procedure
must be device intensive; that is, the
device offset amount must be
significant, which is defined as
exceeding 40 percent of the procedure’s
mean cost.
We are not proposing any changes to
this policy for CY 2018.
5. Proposed Payment Policy for LowVolume Device-Intensive Procedures
For CY 2016, we used our equitable
adjustment authority under section
1833(t)(2)(E) of the Act and used the
median cost (instead of the geometric
mean cost per our standard
methodology) to calculate the payment
rate for the implantable miniature
telescope procedure described by CPT
code 0308T (Insertion of ocular
telescope prosthesis including removal
of crystalline lens or intraocular lens
prosthesis), which is the only code
assigned to APC 5494 (Level 4
Intraocular Procedures) (80 FR 70388).
We note that, as stated in the CY 2017
OPPS/ASC proposed rule (81 FR 45656),
we proposed to reassign the procedure
described by CPT code 0308T to APC
5495 (Level 5 Intraocular Procedures)
for CY 2017, but it would be the only
procedure code assigned to APC 5495.
The payment rates for a procedure
described by CPT code 0308T
(including the predecessor HCPCS code
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C9732) were $15,551 in CY 2014,
$23,084 in CY 2015, and $17,551 in CY
2016. The procedure described by CPT
code 0308T is a high-cost deviceintensive surgical procedure that has a
very low volume of claims (in part
because most of the procedures
described by CPT code 0308T are
performed in ASCs), and we believe that
the median cost is a more appropriate
measure of the central tendency for
purposes of calculating the cost and the
payment rate for this procedure because
the median cost is impacted to a lesser
degree than the geometric mean cost by
more extreme observations. We stated
that, in future rulemaking, we would
consider proposing a general policy for
the payment rate calculation for very
low-volume device-intensive APCs (80
FR 70389).
For CY 2017, we proposed and
finalized a payment policy for lowvolume device-intensive procedures
that is similar to the policy applied to
the procedure described by CPT code
0308T in CY 2016. In the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79660 through 79661), we
established our current policy that the
payment rate for any device-intensive
procedure that is assigned to a clinical
APC with fewer than 100 total claims
for all procedures in the APC be
calculated using the median cost instead
of the geometric mean cost, for the
reasons described above for the policy
applied to the procedure described by
CPT code 0308T in CY 2016. The CY
2017 final rule geometric mean cost for
the procedure described by CPT code
0308T (based on 19 claims containing
the device HCPCS C-code in accordance
with the device-intensive edit policy)
was approximately $21,302, and the
median cost was approximately
$19,521. The final CY 2017 payment
rate (calculated using the median cost)
is approximately $18,984.
For CY 2018, we are proposing to
continue with our current policy of
establishing the payment rate for any
device-intensive procedure that is
assigned to a clinical APC with fewer
than 100 total claims for all procedures
in the APC based on calculations using
the median cost instead of the geometric
mean cost. For CY 2018, this policy
would continue to apply only to a
procedure described by CPT code 0308T
in APC 5495 because this APC is the
only APC containing a device-intensive
procedure with fewer than 100 total
claims in the APC. As we have stated
before (81 FR 79660), we believe that
this approach will help to mitigate
significant year-to-year payment rate
fluctuations while preserving accurate
claims data-based payment rates for
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low-volume device-intensive
procedures. The CY 2018 proposed rule
median cost for the procedure described
by CPT code 0308T is approximately
$17,643.75. The proposed CY 2018
payment rate (calculated using the
median cost and the claims that
reported the device consistent with our
device edit policy for device intensive
procedures) is approximately
$16,963.69.
V. Proposed OPPS Payment Changes for
Drugs, Biologicals, and
Radiopharmaceuticals
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A. Proposed OPPS Transitional PassThrough Payment for Additional Costs
of Drugs, Biologicals, and
Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides
for temporary additional payments or
‘‘transitional pass-through payments’’
for certain drugs and biologicals.
Throughout this proposed rule, the term
‘‘biological’’ is used because this is the
term that appears in section 1861(t) of
the Act. A ‘‘biological’’ as used in this
proposed rule includes (but is not
necessarily limited to) a ‘‘biological
product’’ or a ‘‘biologic’’ as defined in
the Public Health Service Act. As
enacted by the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act
of 1999 (BBRA) (Pub. L. 106–113), this
pass-through payment provision
requires the Secretary to make
additional payments to hospitals for:
Current orphan drugs, as designated
under section 526 of the Federal Food,
Drug, and Cosmetic Act; current drugs
and biologicals and brachytherapy
sources used in cancer therapy; and
current radiopharmaceutical drugs and
biologicals. ‘‘Current’’ refers to those
types of drugs or biologicals mentioned
above that are hospital outpatient
services under Medicare Part B for
which transitional pass-through
payment was made on the first date the
hospital OPPS was implemented.
Transitional pass-through payments
also are provided for certain ‘‘new’’
drugs and biologicals that were not
being paid for as an HOPD service as of
December 31, 1996 and whose cost is
‘‘not insignificant’’ in relation to the
OPPS payments for the procedures or
services associated with the new drug or
biological. For pass-through payment
purposes, radiopharmaceuticals are
included as ‘‘drugs.’’ As required by
statute, transitional pass-through
payments for a drug or biological
described in section 1833(t)(6)(C)(i)(II)
of the Act can be made for a period of
at least 2 years, but not more than 3
years, after the payment was first made
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for the product as a hospital outpatient
service under Medicare Part B. Proposed
CY 2018 pass-through drugs and
biologicals and their designated APCs
are assigned status indicator ‘‘G’’ in
Addenda A and B to this proposed rule
(which are available via the Internet on
the CMS Web site).
Section 1833(t)(6)(D)(i) of the Act
specifies that the pass-through payment
amount, in the case of a drug or
biological, is the amount by which the
amount determined under section
1842(o) of the Act for the drug or
biological exceeds the portion of the
otherwise applicable Medicare OPD fee
schedule that the Secretary determines
is associated with the drug or biological.
The methodology for determining the
pass-through payment amount is set
forth in regulations at 42 CFR 419.64.
These regulations specify that the passthrough payment equals the amount
determined under section 1842(o) of the
Act minus the portion of the APC
payment that CMS determines is
associated with the drug or biological.
Section 1847A of the Act establishes
the average sales price (ASP)
methodology, which is used for
payment for drugs and biologicals
described in section 1842(o)(1)(C) of the
Act furnished on or after January 1,
2005. The ASP methodology, as applied
under the OPPS, uses several sources of
data as a basis for payment, including
the ASP, the wholesale acquisition cost
(WAC), and the average wholesale price
(AWP). In this proposed rule, the term
‘‘ASP methodology’’ and ‘‘ASP-based’’
are inclusive of all data sources and
methodologies described therein.
Additional information on the ASP
methodology can be found on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-Service-PartB-Drugs/McrPartBDrugAvgSalesPrice/
index.html.
The pass-through application and
review process for drugs and biologicals
is described on the CMS Web site at:
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/passthrough_
payment.html.
2. 3-Year Transitional Pass-Through
Payment Period for All Pass-Through
Drugs, Biologicals, and
Radiopharmaceuticals and Quarterly
Expiration of Pass-Through Status
As required by statute, transitional
pass-through payments for a drug or
biological described in section
1833(t)(6)(C)(i)(II) of the Act can be
made for a period of at least 2 years, but
not more than 3 years, after the payment
was first made for the product as a
hospital outpatient service under
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Medicare Part B. Our current policy is
to accept pass-through applications on a
quarterly basis and to begin passthrough payments for newly approved
pass-through drugs and biologicals on a
quarterly basis through the next
available OPPS quarterly update after
the approval of a product’s pass-through
status. However, prior to CY 2017, we
expired pass-through status for drugs
and biologicals on an annual basis
through notice-and-comment
rulemaking (74 FR 60480). In the CY
2017 OPPS/ASC final rule with
comment period (81 FR 79662), we
finalized a policy change, beginning
with pass-through drugs and biologicals
newly approved in CY 2017 and
subsequent calendar years, to allow for
a quarterly expiration of pass-through
payment status for drugs and biologicals
to afford a pass-through payment period
that is as close to a full 3 years as
possible for all pass-through drugs,
biologicals, and radiopharmaceuticals.
This change eliminated the variability
of the pass-through payment eligibility
period, which previously varied based
on when a particular application was
initially received. We believe that the
timing of a pass-through payment
application should not determine the
duration of pass-through payment
status, and this approach allows for the
maximum pass-through payment period
for each pass-through drug without
exceeding the statutory limit of 3 years.
3. Proposed Drugs and Biologicals With
Expiring Pass-Through Payment Status
in CY 2017
We are proposing that the passthrough payment status of 19 drugs and
biologicals would expire on December
31, 2017, as listed in Table 21 below.
All of these drugs and biologicals will
have received OPPS pass-through
payment for at least 2 years and no more
than 3 years by December 31, 2017.
These drugs and biologicals were
approved for pass-through payment
status on or before January 1, 2016. In
accordance with the policy finalized last
year and described above, pass-through
payment status for drugs and biologicals
newly approved in CY 2017 and
subsequent years will expire on a
quarterly basis, with a pass-through
payment period as close to 3 years as
possible. With the exception of those
groups of drugs and biologicals that are
always packaged when they do not have
pass-through payment status
(specifically, anesthesia drugs; drugs,
biologicals, and radiopharmaceuticals
that function as supplies when used in
a diagnostic test or procedure (including
diagnostic radiopharmaceuticals,
contrast agents, and stress agents); and
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drugs and biologicals that function as
supplies when used in a surgical
procedure), our standard methodology
for providing payment for drugs and
biologicals with expiring pass-through
payment status in an upcoming calendar
year is to determine the product’s
estimated per day cost and compare it
with the OPPS drug packaging threshold
for that calendar year (which is
proposed to be $120 for CY 2018), as
discussed further in section V.B.2. of
this proposed rule. We are proposing
that if the estimated per day cost for the
drug or biological is less than or equal
to the applicable OPPS drug packaging
threshold, we would package payment
for the drug or biological into the
payment for the associated procedure in
the upcoming calendar year. If the
estimated per day cost of the drug or
biological is greater than the OPPS drug
packaging threshold, we are proposing
to provide separate payment at the
applicable relative ASP-based payment
amount (which is proposed at ASP+6
percent for CY 2018, as discussed
further in section V.B.3. of this
proposed rule).
TABLE 21—PROPOSED DRUGS AND BIOLOGICALS FOR WHICH PASS-THROUGH PAYMENT STATUS EXPIRES DECEMBER 31,
2017
CY 2017
Status
indicator
CY 2017 HCPCS Code
CY 2017 Long descriptor
A9586 ..........................
C9447 ..........................
J0596 ...........................
J0695 ...........................
J0875 ...........................
J1833 ...........................
J2407 ...........................
J2502 ...........................
J2547 ...........................
J2860 ...........................
J3090 ...........................
J7313 ...........................
J8655 ...........................
J9032 ...........................
J9039 ...........................
J9271 ...........................
J9299 ...........................
Q4172 ..........................
Florbetapir f18, diagnostic, per study dose, up to 10 millicuries .......
Injection, phenylephrine and ketorolac, 4 ml vial ..............................
Injection, c-1 esterase inhibitor (human), Ruconest, 10 units ...........
Injection, ceftolozane 50 mg and tazobactam 25 mg .......................
Injection, dalbavancin, 5 mg ..............................................................
Injection, isavuconazonium sulfate, 1 mg ..........................................
Injection, oritavancin, 10 mg ..............................................................
Injection, pasireotide long acting, 1 mg .............................................
Injection, peramivir, 1 mg ..................................................................
Injection, siltuximab, 10 mg ...............................................................
Injection, tedizolid phosphate, 1 mg ..................................................
Injection, fluocinolone acetonide intravitreal implant, 0.01 mg ..........
Netupitant (300 mg) and palonosetron (0.5 mg) ...............................
Injection, belinostat, 10 mg ................................................................
Injection, blinatumomab, 1 mcg .........................................................
Injection, pembrolizumab, 1 mg .........................................................
Injection, nivolumab, 1 mg .................................................................
PuraPly, and PuraPly Antimicrobial, any type, per square centimeter.
Injection, sulfur hexafluoride lipid microsphere, per ml .....................
Q9950 ..........................
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
The proposed packaged or separately
payable status of each of these drugs or
biologicals is listed in Addendum B to
this proposed rule (which is available
via the Internet on the CMS Web site).
4. Proposed Drugs, Biologicals, and
Radiopharmaceuticals With New or
Continuing Pass-Through Payment
Status in CY 2018
We are proposing to continue passthrough payment status in CY 2018 for
38 drugs and biologicals. None of these
drugs and biologicals will have received
OPPS pass-through payment for at least
2 years and no more than 3 years by
December 31, 2017. These drugs and
biologicals, which were approved for
pass-through status between January 1,
2016, and July 1, 2017, are listed in
Table 22 below. The APCs and HCPCS
codes for these drugs and biologicals
approved for pass-through payment
status through July 1, 2017 are assigned
status indicator ‘‘G’’ in Addenda A and
B to this proposed rule (which are
available via the Internet on the CMS
Web site).
Section 1833(t)(6)(D)(i) of the Act sets
the amount of pass-through payment for
pass-through drugs and biologicals (the
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pass-through payment amount) as the
difference between the amount
authorized under section 1842(o) of the
Act and the portion of the otherwise
applicable OPD fee schedule that the
Secretary determines is associated with
the drug or biological. For CY 2018, we
are proposing to continue to pay for
pass-through drugs and biologicals at
ASP+6 percent, equivalent to the
payment rate these drugs and
biologicals would receive in the
physician’s office setting in CY 2018.
We are proposing that a $0 pass-through
payment amount would be paid for
pass-through drugs and biologicals
under the CY 2018 OPPS because the
difference between the amount
authorized under section 1842(o) of the
Act, which is proposed at ASP+6
percent, and the portion of the
otherwise applicable OPD fee schedule
that the Secretary determines is
appropriate, which is proposed at
ASP+6 percent, is $0.
In the case of policy-packaged drugs
(which include the following:
anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals that function as
supplies when used in a diagnostic test
or procedure (including contrast agents,
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CY 2017 APC
Pass-through
payment
effective date
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
1664
1663
9445
9452
1823
9456
1660
9454
9451
9455
1662
9450
9448
1658
9449
1490
9453
1657
01/01/2015
01/01/2015
04/01/2015
04/01/2015
01/01/2015
10/01/2015
01/01/2015
07/01/2015
04/01/2015
07/01/2015
01/01/2015
04/01/2015
04/01/2015
01/01/2015
04/01/2015
01/01/2015
07/01/2015
01/01/2015
G
9457
10/01/2015
diagnostic radiopharmaceuticals, and
stress agents); and drugs and biologicals
that function as supplies when used in
a surgical procedure), we are proposing
that their pass-through payment amount
would be equal to ASP+6 percent for CY
2018 because, if not for their passthrough status, payment for these
products would be packaged into the
associated procedure.
In addition, we are proposing to
continue to update pass-through
payment rates on a quarterly basis on
the CMS Web site during CY 2018 if
later quarter ASP submissions (or more
recent WAC or AWP information, as
applicable) indicate that adjustments to
the payment rates for these pass-through
drugs or biologicals are necessary. For a
full description of this policy, we refer
readers to the CY 2006 OPPS/ASC final
rule with comment period (70 FR 68632
through 68635).
For CY 2018, consistent with our CY
2017 policy for diagnostic and
therapeutic radiopharmaceuticals, we
are proposing to provide payment for
both diagnostic and therapeutic
radiopharmaceuticals that are granted
pass-through payment status based on
the ASP methodology. As stated earlier,
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for purposes of pass-through payment,
we consider radiopharmaceuticals to be
drugs under the OPPS. Therefore, if a
diagnostic or therapeutic
radiopharmaceutical receives passthrough payment status during CY 2018,
we are proposing to follow the standard
ASP methodology to determine the
pass-through payment rate that drugs
receive under section 1842(o) of the Act,
which is proposed at ASP+6 percent. If
ASP data are not available for a
radiopharmaceutical, we are proposing
to provide pass-through payment at
WAC+6 percent, the equivalent
payment provided to pass-through drugs
and biologicals without ASP
information. If WAC information also is
not available, we are proposing to
provide payment for the pass-through
radiopharmaceutical at 95 percent of its
most recent AWP.
The 38 drugs and biologicals that we
are proposing to continue to have passthrough payment status for CY 2018 or
have been granted pass-through
payment status as of July 2017 are
shown in Table 22 below.
TABLE 22—PROPOSED DRUGS AND BIOLOGICALS WITH PASS-THROUGH PAYMENT STATUS IN CY 2018
CY 2017
HCPCS code
A9515
A9587
A9588
C9140
CY 2018
HCPCS code
..............
..............
..............
.............
A9515
A9587
A9588
C9140
.............
.............
.............
............
C9460 .............
C9482 .............
C9483 .............
C9484 .............
C9485 .............
C9486 .............
Q9989 .............
C9488 .............
C9489 .............
C9490 .............
J0570 ..............
J1942 ..............
J2182 ..............
J2786 ..............
J2840 ..............
J7179 ..............
C9460 ............
C9482 ............
C9483 ............
C9484 ............
C9485 ............
C9486 ............
Q9989 ............
C9488 ............
C9489 ............
C9490 ............
J0570 .............
J1942 .............
J2182 .............
J2786 .............
J2840 .............
J7179 .............
J7202 ..............
J7202 .............
J7207 ..............
J7207 .............
J7209 ..............
J7209 .............
J7322 ..............
J7322 .............
J7328 ..............
J7328 .............
J7342 ..............
J7503 ..............
J7342 .............
J7503 .............
J9034
J9145
J9176
J9205
J9295
J9325
J9034
J9145
J9176
J9205
J9295
J9325
..............
..............
..............
..............
..............
..............
.............
.............
.............
.............
.............
.............
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
J9352 ..............
Q5101 .............
Q5102 .............
Q9982 .............
J9352 .............
Q5101 ............
Q5102 ............
Q9982 ............
Q9983 .............
Q9983 ............
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19:14 Jul 19, 2017
Proposed CY
2018 status
indicator
CY 2018 long descriptor
Choline C 11, diagnostic, per study dose .........................
Gallium ga–68, dotatate, diagnostic, 0.1 millicurie ............
Fluciclovine f–18, diagnostic, 1 millicurie ..........................
Injection, Factor VIII (antihemophilic factor, recombinant)
(Afstyla), 1 I.U..
Injection, cangrelor, 1 mg ..................................................
Injection, sotalol hydrochloride, 1 mg ................................
Injection, atezolizumab, 10 mg ..........................................
Injection, eteplirsen, 10 mg ................................................
Injection, olaratumab, 10 mg .............................................
Injection, granisetron extended release, 0.1 mg ...............
Ustekinumab, for Intravenous Injection, 1 mg ...................
Injection, conivaptan hydrochloride, 1 mg .........................
Injection, nusinersen, 0.1 mg .............................................
Injection, bezlotoxumab, 10 mg .........................................
Buprenorphine implant, 74.2 mg .......................................
Injection, aripiprazole lauroxil, 1 mg ..................................
Injection, mepolizumab, 1 mg ............................................
Injection, reslizumab, 1 mg ................................................
Injection, sebelipase alfa, 1 mg .........................................
Injection,
von
willebrand
factor
(recombinant),
(Vonvendi), 1 i.u. vwf:rco.
Injection, Factor IX, albumin fusion protein (recombinant),
Idelvion, 1 i.u..
Injection, Factor VIII (antihemophilic factor, recombinant)
PEGylated, 1 I.U..
Injection, Factor VIII (antihemophilic factor, recombinant)
(Nuwiq), per i.u..
Hyaluronan or derivative, Hymovis, for intra-articular injection, 1 mg.
Hyaluronan or derivative, gel-syn, for intra-articular injection, 0.1 mg.
Instillation, ciprofloxacin otic suspension, 6 mg ................
Tacrolimus, extended release, (envarsus xr), oral, 0.25
mg.
Injection, bendamustine hcl (Bendeka), 1 mg ...................
Injection, daratumumab, 10 mg .........................................
Injection, elotuzumab, 1 mg ...............................................
Injection, irinotecan liposome, 1 mg ..................................
Injection, necitumumab, 1 mg ............................................
Injection, talimogene laherparepvec, 1 million plaque
forming units (PFU).
Injection, trabectedin, 0.1 mg ............................................
Injection, Filgrastim (G–CSF), Biosimilar, 1 microgram ....
Injection, Infliximab, Biosimilar, 10 mg ..............................
Flutemetamol F18, diagnostic, per study dose, up to 5
millicuries.
Florbetaben F18, diagnostic, per study dose, up to 8.1
millicuries.
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Proposed CY
2018 APC
Pass-through
payment
effective date
G
G
G
G
9461
9056
9052
9043
04/01/2016
01/01/2017
01/01/2017
01/01/2017
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
9460
9482
9483
9484
9485
9486
9487
9488
9489
9490
9058
9470
9473
9481
9478
9059
01/01/2016
10/01/2016
10/01/2016
04/01/2017
04/01/2017
04/01/2017
04/01/2017
04/01/2017
07/01/2017
07/01/2017
01/01/2017
04/01/2016
04/01/2016
10/01/2016
07/01/2016
01/01/2017
G
9171
10/01/2016
G
1844
04/01/2016
G
1846
04/01/2016
G
9471
04/01/2016
G
1862
04/01/2017
G
G
9479
1845
07/01/2016
04/01/2016
G
G
G
G
G
G
1861
9476
9477
9474
9475
9472
01/01/2017
07/01/2016
07/01/2016
04/01/2016
04/01/2016
04/01/2016
G
G
G
G
9480
1822
1847
9459
07/01/2016
01/01/2016
04/01/2017
01/01/2016
G
9458
01/01/2016
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5. Proposed Provisions for Reducing
Transitional Pass-Through Payments for
Policy-Packaged Drugs, Biologicals, and
Radiopharmaceuticals To Offset Costs
Packaged Into APC Groups
Under the regulations at 42 CFR
419.2(b), nonpass-through drugs,
biologicals, and radiopharmaceuticals
that function as supplies when used in
a diagnostic test or procedure are
packaged in the OPPS. This category
includes diagnostic
radiopharmaceuticals, contrast agents,
stress agents, and other diagnostic
drugs. Also under 42 CFR 419.2(b),
nonpass-through drugs and biologicals
that function as supplies in a surgical
procedure are packaged in the OPPS.
This category includes skin substitutes
and other surgical-supply drugs and
biologicals. As described earlier, section
1833(t)(6)(D)(i) of the Act specifies that
the transitional pass-through payment
amount for pass-through drugs and
biologicals is the difference between the
amount paid under section 1842(o) of
the Act and the otherwise applicable
OPD fee schedule amount. Because a
payment offset is necessary in order to
provide an appropriate transitional
pass-through payment, we deduct from
the pass-through payment for policy
packaged drugs, biologicals, and
radiopharmaceuticals an amount
reflecting the portion of the APC
payment associated with predecessor
products in order to ensure no duplicate
payment is made. This amount
reflecting the portion of the APC
payment associated with predecessor
products is called the payment offset.
The payment offset policy applies to
all policy packaged drugs, biologicals,
and radiopharmaceuticals. For a full
description of the payment offset policy
as applied to diagnostic
radiopharmaceuticals, contrast agents,
stress agents, and skin substitutes, we
refer readers to the discussion in the CY
2016 OPPS/ASC final rule with
comment period (80 FR 70430 through
70432). For CY 2018, as we did in CY
2017, we are proposing to continue to
apply the same policy packaged offset
policy to payment for pass-through
diagnostic radiopharmaceuticals, passthrough contrast agents, pass-through
stress agents, and pass-through skin
substitutes. The proposed APCs to
which a payment offset may be
applicable for pass-through diagnostic
radiopharmaceuticals, pass-through
contrast agents, pass-through stress
agents, and pass-through skin
substitutes are identified in Table 23
below.
TABLE 23—PROPOSED APCS TO WHICH A POLICY-PACKAGED DRUG OR RADIOPHARMACEUTICAL OFFSET MAY BE
APPLICABLE IN CY 2018
Proposed CY 2018 APC
Proposed CY 2018 APC title
Diagnostic Radiopharmaceutical
5591
5592
5593
5594
................................................
................................................
................................................
................................................
Level
Level
Level
Level
1
2
3
4
Nuclear
Nuclear
Nuclear
Nuclear
Medicine
Medicine
Medicine
Medicine
and
and
and
and
Related
Related
Related
Related
Services.
Services.
Services.
Services.
Contrast Agent
5571 ................................................
5572 ................................................
5573 ................................................
Level 1 Imaging with Contrast.
Level 2 Imaging with Contrast.
Level 3 Imaging with Contrast.
Stress Agent
5722 ................................................
5593 ................................................
Level 2 Diagnostic Tests and Related Services.
Level 3 Nuclear Medicine and Related Services.
Skin Substitute
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
5054 ................................................
5055 ................................................
Level 4 Skin Procedures.
Level 5 Skin Procedures.
We are proposing to continue to post
annually on the CMS Web site at https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
HospitalOutpatientPPS/ a
file that contains the APC offset
amounts that will be used for that year
for purposes of both evaluating cost
significance for candidate pass-through
device categories and drugs and
biologicals and establishing any
appropriate APC offset amounts.
Specifically, the file will continue to
provide the amounts and percentages of
APC payment associated with packaged
implantable devices, policy-packaged
drugs, and threshold packaged drugs
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and biologicals for every OPPS clinical
APC.
B. Proposed OPPS Payment for Drugs,
Biologicals, and Radiopharmaceuticals
without Pass-Through Payment Status
1. Proposed Criteria for Packaging
Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Proposed Packaging Threshold
In accordance with section
1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for
payment of drugs and biologicals was
set to $50 per administration during CYs
2005 and 2006. In CY 2007, we used the
four quarter moving average Producer
Price Index (PPI) levels for
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Pharmaceutical Preparations
(Prescription) to trend the $50 threshold
forward from the third quarter of CY
2005 (when the Pub. L. 108–173
mandated threshold became effective) to
the third quarter of CY 2007. We then
rounded the resulting dollar amount to
the nearest $5 increment in order to
determine the CY 2007 threshold
amount of $55. Using the same
methodology as that used in CY 2007
(which is discussed in more detail in
the CY 2007 OPPS/ASC final rule with
comment period (71 FR 68085 through
68086)), we set the packaging threshold
for establishing separate APCs for drugs
and biologicals at $110 for CY 2017 (81
FR 79665).
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asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
Following the CY 2007 methodology,
for this CY 2018 OPPS/ASC proposed
rule, we used the most recently
available four quarter moving average
PPI levels to trend the $50 threshold
forward from the third quarter of CY
2005 to the third quarter of CY 2018 and
rounded the resulting dollar amount
($117.98) to the nearest $5 increment,
which yielded a figure of $120. In
performing this calculation, we used the
most recent forecast of the quarterly
index levels for the PPI for
Pharmaceuticals for Human Use
(Prescription) (Bureau of Labor Statistics
(BLS) series code WPUSI07003) from
CMS’ Office of the Actuary. Based on
these calculations, we are proposing a
packaging threshold for CY 2018 of
$120.
b. Proposed Packaging of Payment for
HCPCS Codes That Describe Certain
Drugs, Certain Biologicals, and
Therapeutic Radiopharmaceuticals
Under the Cost Threshold (‘‘ThresholdPackaged Drugs’’)
To determine the proposed CY 2018
packaging status for all nonpass-through
drugs and biologicals that are not policy
packaged, we calculated, on a HCPCS
code-specific basis, the per day cost of
all drugs, biologicals, and therapeutic
radiopharmaceuticals (collectively
called ‘‘threshold-packaged’’ drugs) that
had a HCPCS code in CY 2016 and were
paid (via packaged or separate payment)
under the OPPS. We used data from CY
2016 claims processed before January 1,
2017 for this calculation. However, we
did not perform this calculation for
those drugs and biologicals with
multiple HCPCS codes that include
different dosages, as described in
section V.B.1.d. of this proposed rule, or
for the following policy-packaged items
that we are proposing to continue to
package in CY 2018: Anesthesia drugs;
drugs, biologicals, and
radiopharmaceuticals that function as
supplies when used in a diagnostic test
or procedure; and drugs and biologicals
that function as supplies when used in
a surgical procedure.
In order to calculate the per day costs
for drugs, biologicals, and therapeutic
radiopharmaceuticals to determine their
proposed packaging status in CY 2018,
we used the methodology that was
described in detail in the CY 2006 OPPS
proposed rule (70 FR 42723 through
42724) and finalized in the CY 2006
OPPS final rule with comment period
(70 FR 68636 through 68638). For each
drug and biological HCPCS code, we
used an estimated payment rate of
ASP+6 percent (which is the payment
rate we are proposing for separately
payable drugs and biologicals for CY
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Jkt 241001
2018, as discussed in more detail in
section V.B.2.b. of this proposed rule) to
calculate the CY 2018 proposed rule per
day costs. We used the manufacturer
submitted ASP data from the fourth
quarter of CY 2016 (data that were used
for payment purposes in the physician’s
office setting, effective April 1, 2017) to
determine the proposed rule per day
cost.
As is our standard methodology, for
CY 2018, we are proposing to use
payment rates based on the ASP data
from the first quarter of CY 2017 for
budget neutrality estimates, packaging
determinations, impact analyses, and
completion of Addenda A and B to this
proposed rule (which are available via
the Internet on the CMS Web site)
because these are the most recent data
available for use at the time of
development of this proposed rule.
These data also were the basis for drug
payments in the physician’s office
setting, effective April 1, 2017. For
items that did not have an ASP-based
payment rate, such as some therapeutic
radiopharmaceuticals, we used their
mean unit cost derived from the CY
2016 hospital claims data to determine
their per day cost.
We are proposing to package items
with a per day cost less than or equal
to $120, and identify items with a per
day cost greater than $120 as separately
payable. Consistent with our past
practice, we cross-walked historical
OPPS claims data from the CY 2016
HCPCS codes that were reported to the
CY 2017 HCPCS codes that we display
in Addendum B to this proposed rule
(which is available via the Internet on
the CMS Web site) for proposed
payment in CY 2018.
Our policy during previous cycles of
the OPPS has been to use updated ASP
and claims data to make final
determinations of the packaging status
of HCPCS codes for drugs, biologicals,
and therapeutic radiopharmaceuticals
for the OPPS/ASC final rule with
comment period. We note that it is also
our policy to make an annual packaging
determination for a HCPCS code only
when we develop the OPPS/ASC final
rule with comment period for the
update year. Only HCPCS codes that are
identified as separately payable in the
final rule with comment period are
subject to quarterly updates. For our
calculation of per day costs of HCPCS
codes for drugs and biologicals in this
CY 2018 OPPS/ASC proposed rule, we
are proposing to use ASP data from the
fourth quarter of CY 2016, which is the
basis for calculating payment rates for
drugs and biologicals in the physician’s
office setting using the ASP
methodology, effective April 1, 2017,
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33625
along with updated hospital claims data
from CY 2016. We note that we also are
proposing to use these data for budget
neutrality estimates and impact analyses
for this CY 2018 OPPS/ASC proposed
rule.
Payment rates for HCPCS codes for
separately payable drugs and biologicals
included in Addenda A and B for the
final rule with comment period will be
based on ASP data from the second
quarter of CY 2017. These data will be
the basis for calculating payment rates
for drugs and biologicals in the
physician’s office setting using the ASP
methodology, effective October 1, 2017.
These payment rates would then be
updated in the January 2018 OPPS
update, based on the most recent ASP
data to be used for physician’s office
and OPPS payment as of January 1,
2018. For items that do not currently
have an ASP-based payment rate, we are
proposing to recalculate their mean unit
cost from all of the CY 2016 claims data
and updated cost report information
available for the CY 2018 final rule with
comment period to determine their final
per day cost.
Consequently, the packaging status of
some HCPCS codes for drugs,
biologicals, and therapeutic
radiopharmaceuticals in this proposed
rule may be different from the same
drug HCPCS code’s packaging status
determined based on the data used for
the final rule with comment period.
Under such circumstances, we are
proposing to continue to follow the
established policies initially adopted for
the CY 2005 OPPS (69 FR 65780) in
order to more equitably pay for those
drugs whose cost fluctuates relative to
the proposed CY 2018 OPPS drug
packaging threshold and the drug’s
payment status (packaged or separately
payable) in CY 2017. These established
policies have not changed for many
years and are the same as described in
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70434).
Specifically, for CY 2018, consistent
with our historical practice, we are
proposing to apply the following
policies to these HCPCS codes for drugs,
biologicals, and therapeutic
radiopharmaceuticals whose
relationship to the drug packaging
threshold changes based on the updated
drug packaging threshold and on the
final updated data:
• HCPCS codes for drugs and
biologicals that were paid separately in
CY 2017 and that were proposed for
separate payment in CY 2018, and that
then have per day costs equal to or less
than the CY 2018 final rule drug
packaging threshold, based on the
updated ASPs and hospital claims data
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used for the CY 2018 final rule, would
continue to receive separate payment in
CY 2018.
• HCPCS codes for drugs and
biologicals that were packaged in CY
2017 and that were proposed for
separate payment in CY 2018, and that
then have per day costs equal to or less
than the CY 2018 final rule drug
packaging threshold, based on the
updated ASPs and hospital claims data
used for the CY 2018 final rule, would
remain packaged in CY 2018.
• HCPCS codes for drugs and
biologicals for which we proposed
packaged payment in CY 2018 but then
have per day costs greater than the CY
2018 final rule drug packaging
threshold, based on the updated ASPs
and hospital claims data used for the CY
2018 final rule, would receive separate
payment in CY 2018.
c. Policy Packaged Drugs, Biologicals,
and Radiopharmaceuticals
As mentioned briefly earlier, in the
OPPS, we package several categories of
drugs, biologicals, and
radiopharmaceuticals, regardless of the
cost of the products. Because the
products are packaged according to the
policies in 42 CFR 419.2(b), we refer to
these packaged drugs, biologicals, and
radiopharmaceuticals as ‘‘policypackaged’’ drugs, biologicals, and
radiopharmaceuticals. These policies
are either longstanding or based on
longstanding principles and inherent to
the OPPS and are as follows:
• Anesthesia, certain drugs,
biologicals, and other pharmaceuticals;
medical and surgical supplies and
equipment; surgical dressings; and
devices used for external reduction of
fractures and dislocations
(§ 419.2(b)(4));
• Intraoperative items and services
(§ 419.2(b)(14));
• Drugs, biologicals, and
radiopharmaceuticals that function as
supplies when used in a diagnostic test
or procedure (including but not limited
to, diagnostic radiopharmaceuticals,
contrast agents, and pharmacologic
stress agents (§ 419.2(b)(15)); and
• Drugs and biologicals that function
as supplies when used in a surgical
procedure (including, but not limited to,
skin substitutes and similar products
that aid wound healing and implantable
biologicals) (§ 419.2(b)(16)).
The policy at § 419.2(b)(16) is broader
than that at § 419.2(b)(14). As we stated
in the CY 2015 OPPS/ASC final rule
with comment period: ‘‘We consider all
items related to the surgical outcome
and provided during the hospital stay in
which the surgery is performed,
including postsurgical pain
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management drugs, to be part of the
surgery for purposes of our drug and
biological surgical supply packaging
policy’’ (79 FR 66875). The category
described by § 419.2(b)(15) is large and
includes diagnostic
radiopharmaceuticals, contrast agents,
stress agents, and some other products.
The category described by § 419.2(b)(16)
includes skin substitutes and some
other products. We believe it is
important to reiterate that cost
consideration is not a factor when
determining whether an item is a
surgical supply (79 FR 66875).
d. Proposed High Cost/Low Cost
Threshold for Packaged Skin Substitutes
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74938), we
unconditionally packaged skin
substitute products into their associated
surgical procedures as part of a broader
policy to package all drugs and
biologicals that function as supplies
when used in a surgical procedure. As
part of the policy to finalize the
packaging of skin substitutes, we also
finalized a methodology that divides the
skin substitutes into a high cost group
and a low cost group, in order to ensure
adequate resource homogeneity among
APC assignments for the skin substitute
application procedures (78 FR 74933).
Skin substitutes assigned to the high
cost group are described by HCPCS
codes 15271 through 15278. Skin
substitutes assigned to the low cost
group are described by HCPCS codes
C5271 through C5278. Geometric mean
costs for the various procedures are
calculated using only claims for the skin
substitutes that are assigned to each
group. Specifically, claims billed with
HCPCS codes 15271, 15273, 15275, or
15277 are used to calculate the
geometric mean costs for procedures
assigned to the high cost group, and
claims billed with HCPCS codes C5271,
C5273, C5275, and C5277 are used to
calculate the geometric mean costs for
procedures assigned to the low cost
group (78 FR 74935).
Each of the HCPCS codes described
above are assigned to one of the
following three skin procedure APCs
according to the geometric mean cost for
the code: APC 5053 (Level 3 Skin
Procedures) (HCPCS codes C5271,
C5275, and C5277); APC 5054 (Level 4
Skin Procedures) (HCPCS codes C5273,
15271, 15275, and 15277); or APC 5055
(Level 5 Skin Procedures) (HCPCS code
15273). In CY 2017, the payment rate for
APC 5053 (Level 3 Skin Procedures) was
$466, the payment rate for APC 5054
(Level 4 Skin Procedures) was $1,468,
and the payment rate for APC 5055
(Level 5 Skin Procedures) was $2,575.
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This information also is available in
Addenda A and B of the CY 2017 OPPS/
ASC final rule with comment period
(which is available via the Internet on
the CMS Web site).
We have continued the high cost/low
cost categories policy since CY 2014,
and are proposing to continue it for CY
2018 with the modification discussed
below. Under this current policy, skin
substitutes in the high cost category are
reported with the skin substitute
application CPT codes, and skin
substitutes in the low cost category are
reported with the analogous skin
substitute HCPCS C-codes. For a
discussion of the CY 2014 and CY 2015
methodologies for assigning skin
substitutes to either the high cost group
or the low cost group, we refer readers
to the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74932
through 74935) and the CY 2015 OPPS/
ASC final rule with comment period (79
FR 66882 through 66885).
For a discussion of the high cost/low
cost methodology that was adopted in
CY 2016 and has been in effect since
then, we refer readers to the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70434 through 70435).
For CY 2018, as in CY 2016 and CY
2017, we are proposing to continue to
determine the high/low cost status for
each skin substitute product based on
either a product’s geometric mean unit
cost (MUC) exceeding the geometric
MUC threshold or the product’s per day
cost (PDC) (the total units of a skin
substitute multiplied by the mean unit
cost and divided by the total number of
days) exceeding the PDC threshold. For
CY 2018, as for CY 2017, we are
proposing to assign each skin substitute
that exceeds either the MUC threshold
or the PDC threshold to the high cost
group. In addition, as described in more
detail later in this section, for CY 2018,
as for CY 2017, we are proposing to
assign any skin substitute with an MUC
or a PDC that does not exceed either the
MUC threshold or the PDC threshold to
the low cost group. For CY 2018, we are
proposing that any skin substitute
product that was assigned to the high
cost group in CY 2017 will be assigned
to the high cost group for CY 2018,
regardless of whether it exceeds or falls
below the CY 2018 MUC or PDC
threshold.
For this CY 2018 OPPS/ASC proposed
rule, and consistent with previous
methodology as established in the CY
2014 through CY 2017 final rules with
comment period, we analyzed CY 2016
claims data to calculate the MUC
threshold (a weighted average of all skin
substitutes’ MUCs) and the PDC
threshold (a weighted average of all skin
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asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
substitutes’ PDCs). The proposed CY
2018 MUC threshold is $47 per cm2
(rounded to the nearest $1) and the
proposed CY 2018 PDC threshold is
$755 (rounded to the nearest $1).
For CY 2018, we are proposing to
continue to assign skin substitutes with
pass-through payment status to the high
cost category. However, there are no
skin substitutes that are proposed to
have pass-through payment status for
CY 2018. We are proposing to assign
skin substitutes with pricing
information but without claims data to
calculate a geometric MUC or PDC to
either the high cost or low cost category
based on the product’s ASP+6 percent
payment rate as compared to the MUC
threshold. If ASP is not available, we
would use WAC+6 percent or 95
percent of AWP to assign a product to
either the high cost or low cost category.
New skin substitutes without pricing
information would be assigned to the
low cost category until pricing
information is available to compare to
the CY 2018 MUC threshold. For a
discussion of our existing policy under
which we assign skin substitutes
without pricing information to the low
cost category until pricing information
is available, we refer readers to the CY
2016 OPPS/ASC final rule with
comment period (80 FR 70436).
Some skin substitute manufacturers
have raised concerns about significant
fluctuation in both the MUC threshold
and the PDC threshold from year to
year. The fluctuation in the thresholds
may result in the reassignment of
several skin substitutes from the high
cost group to the low cost group which,
under current payment rates, can be a
difference of approximately $1,000 in
the payment amount for the same
procedure. In addition, these
stakeholders also were concerned that
the inclusion of cost data from skin
substitutes with pass-through payment
status in the MUC and PDC calculations
would artificially inflate the thresholds.
Skin substitute stakeholders requested
that CMS consider alternatives to the
current methodology used to calculate
the MUC and PDC thresholds and also
requested that CMS consider whether it
might be appropriate to establish a new
cost group in between the low cost
group and the high cost group to allow
for assignment of moderately priced
skin substitutes to a newly created
middle group.
We share the goal of promoting
payment stability for skin substitute
products and their related procedures as
price stability allows hospitals using
such products to more easily anticipate
future payments associated with these
products. We have attempted to limit
year to year shifts for skin substitute
products between the high cost and low
cost groups through multiple initiatives
implemented since CY 2014, including:
establishing separate skin substitute
application procedure codes for lowcost skin substitutes (78 FR 74935);
using a skin substitute’s MUC calculated
from outpatient hospital claims data
instead of an average of ASP+6 percent
as the primary methodology to assign
products to the high cost or low cost
group (79 FR 66883); and establishing
the PDC threshold as an alternate
methodology to assign a skin substitute
to the high cost group (80 FR 70434
through 70435).
In order to allow additional time to
evaluate concerns and suggestions from
stakeholders about the volatility of the
MUC and PDC thresholds, for CY 2018,
we are proposing that a skin substitute
that was assigned to the high cost group
for CY 2017 would be assigned to the
high cost group for CY 2018, even if it
does not exceed the CY 2018 MUC or
PDC thresholds. Our analysis has found
that seven skin substitute products that
would have otherwise been assigned to
the low cost group for CY 2018 will
instead be assigned to the high cost
group under this proposed policy. The
skin substitute products affected by this
proposed policy are identified with an
‘‘*’’ in Table 24. For CY 2019 and
subsequent years, we are seeking public
comment on how we should calculate
data for products in determining the
MUC and PDC thresholds that are
included in the high cost group solely
based on assignment to the high cost
group in CY 2017.
The goal of our proposal to retain the
same skin substitute cost group
assignments in CY 2018 as in CY 2017
33627
is to maintain similar levels of payment
for skin substitute products for CY 2018
while we study our current skin
substitute payment methodology to
determine whether refinement to the
existing policies is consistent with our
policy goal of providing payment
stability for skin substitutes. We are
seeking public comments on the
methodologies that are used to calculate
pricing thresholds as well as the
payment groupings that recognize a low
cost group and a high cost group. We are
especially interested in suggestions that
are based on analysis of Medicare
claims data from hospital outpatient
departments that might better promote
improved payment stability for skin
substitute products under the OPPS.
This proposal is intended to apply for
CY 2018 to allow time for the public to
submit other ideas that could be
evaluated for the CY 2019 rulemaking.
In summary, we are proposing to
assign skin substitutes with a MUC or a
PDC that does not exceed either the
MUC threshold or the PDC threshold to
the low cost group, unless the product
was assigned to the high cost group in
CY 2017, in which case we are
proposing to assign the product to the
high cost group for CY 2018, regardless
of whether it exceeds the CY 2018 MUC
or PDC threshold. We also are proposing
to assign to the high cost group skin
substitute products that exceed the CY
2018 MUC or PDC threshold and assign
to the low cost group skin substitute
products that did not exceed either the
CY 2017 or CY 2018 MUC or PDC
thresholds and were not assigned to the
high cost group in CY 2017. We are
proposing to continue to use payment
methodologies including ASP+6
percent, WAC+6 percent, or 95 percent
of AWP for skin substitute products that
have pricing information but do not
have claims data to determine if their
costs exceed the CY 2018 MUC
threshold. Finally, we are proposing to
continue to assign new skin substitute
products without pricing information to
the low cost group.
Table 24 below displays the proposed
CY 2018 high cost or low cost category
assignment for each skin substitute
product.
TABLE 24—PROPOSED SKIN SUBSTITUTE ASSIGNMENTS TO HIGH COST AND LOW COST GROUPS FOR CY 2018
CY 2018
HCPCS code
C9363
Q4100
Q4101
Q4102
Q4103
Q4104
..........
..........
..........
..........
..........
..........
VerDate Sep<11>2014
CY 2018 short descriptor
Current CY 2017 high/
low assignment
Integra Meshed Bil Wound Mat ....................................................................
Skin Substitute, NOS ....................................................................................
Apligraf ..........................................................................................................
Oasis Wound Matrix ......................................................................................
Oasis Burn Matrix ..........................................................................................
Integra BMWD ...............................................................................................
High ...............................
Low ................................
High ...............................
Low ................................
High ...............................
High ...............................
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20JYP2
Proposed CY 2018 high/
low assignment
High.
Low.
High.
Low.
High.*
High.
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TABLE 24—PROPOSED SKIN SUBSTITUTE ASSIGNMENTS TO HIGH COST AND LOW COST GROUPS FOR CY 2018—
Continued
CY 2018
HCPCS code
Q4105
Q4106
Q4107
Q4108
Q4110
Q4111
Q4115
Q4116
Q4117
Q4121
Q4122
Q4123
Q4124
Q4126
Q4127
Q4128
Q4131
Q4132
Q4133
Q4134
Q4135
Q4136
Q4137
Q4138
Q4140
Q4141
Q4143
Q4146
Q4147
Q4148
Q4150
Q4151
Q4152
Q4153
Q4154
Q4156
Q4157
Q4158
Q4159
Q4160
Q4161
Q4162
Q4163
Q4164
Q4165
Q4166
Q4167
Q4169
Q4170
Q4172
Q4173
Q4175
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
CY 2018 short descriptor
Current CY 2017 high/
low assignment
Integra DRT ...................................................................................................
Dermagraft .....................................................................................................
GraftJacket ....................................................................................................
Integra Matrix ................................................................................................
Primatrix ........................................................................................................
Gammagraft ...................................................................................................
Alloskin ..........................................................................................................
Alloderm ........................................................................................................
Hyalomatrix ....................................................................................................
Theraskin .......................................................................................................
Dermacell ......................................................................................................
Alloskin ..........................................................................................................
Oasis Tri-layer Wound Matrix .......................................................................
Memoderm/derma/tranz/integup ...................................................................
Talymed .........................................................................................................
Flexhd/Allopatchhd/Matrixhd .........................................................................
Epifix ..............................................................................................................
Grafix Core ....................................................................................................
Grafix Prime ..................................................................................................
hMatrix ...........................................................................................................
Mediskin ........................................................................................................
Ezderm ..........................................................................................................
Amnioexcel or Biodexcel, 1cm ......................................................................
Biodfence DryFlex, 1cm ................................................................................
Biodfence 1cm ...............................................................................................
Alloskin ac, 1cm ............................................................................................
Repriza, 1cm .................................................................................................
Tensix, 1CM ..................................................................................................
Architect ecm, 1cm ........................................................................................
Neox 1k, 1cm ................................................................................................
Allowrap DS or Dry 1 sq cm .........................................................................
AmnioBand, Guardian 1 sq cm .....................................................................
Dermapure 1 square cm ...............................................................................
Dermavest 1 square cm ................................................................................
Biovance 1 square cm ..................................................................................
Neox 100 1 square cm ..................................................................................
Revitalon 1 square cm ..................................................................................
MariGen 1 square cm ...................................................................................
Affinity 1 square cm ......................................................................................
NuShield 1 square cm ...................................................................................
Bio-Connekt per square cm ..........................................................................
Amnio bio and woundex flow ........................................................................
Amnion bio and woundex sq cm ...................................................................
Helicoll, per square cm .................................................................................
Keramatrix, per square cm ............................................................................
Cytal, per square cm .....................................................................................
Truskin, per square cm .................................................................................
Artacent wound, per square cm ....................................................................
Cygnus, per square cm .................................................................................
PuraPly, PuraPly antimic ...............................................................................
Palingen or palingen xplus, per sq cm .........................................................
Miroderm, per square cm ..............................................................................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
Low ................................
Low ................................
High ...............................
Low ................................
High ...............................
High ...............................
High ...............................
Low ................................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
Low ................................
Low ................................
Low ................................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
High ...............................
Low ................................
High ...............................
High ...............................
Low ................................
Low ................................
Low ................................
High ...............................
Low ................................
High ...............................
High ...............................
High ...............................
Proposed CY 2018 high/
low assignment
High.
High.
High.
High.
High.*
Low.
Low.
High.
Low.
High.
High.*
High.
Low.
High.
High.*
High.
High.
High.
High.
Low.
Low.
Low.
High.
High.
High.
High.
High.
High.
High.*
High.
High.
High.
High.
High.
High.
High.
High.
High.*
High.
High.
High.*
High.
High.
High.
Low.
Low.
Low.
High.
Low.
High.
High.
High.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
* These products do not exceed either the MUC or PDC threshold for CY 2018, but are proposed to be assigned to the high cost group since
they were assigned to the high cost group in CY 2017.
e. Proposed Packaging Determination for
HCPCS Codes That Describe the Same
Drug or Biological But Different Dosages
In the CY 2010 OPPS/ASC final rule
with comment period (74 FR 60490
through 60491), we finalized a policy to
make a single packaging determination
for a drug, rather than an individual
HCPCS code, when a drug has multiple
HCPCS codes describing different
dosages because we believed that
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adopting the standard HCPCS codespecific packaging determinations for
these codes could lead to inappropriate
payment incentives for hospitals to
report certain HCPCS codes instead of
others. We continue to believe that
making packaging determinations on a
drug-specific basis eliminates payment
incentives for hospitals to report certain
HCPCS codes for drugs and allows
hospitals flexibility in choosing to
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report all HCPCS codes for different
dosages of the same drug or only the
lowest dosage HCPCS code. Therefore,
we are proposing to continue our policy
to make packaging determinations on a
drug-specific basis, rather than a HCPCS
code-specific basis, for those HCPCS
codes that describe the same drug or
biological but different dosages in CY
2018.
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For CY 2018, in order to propose a
packaging determination that is
consistent across all HCPCS codes that
describe different dosages of the same
drug or biological, we aggregated both
our CY 2016 claims data and our pricing
information at ASP+6 percent across all
of the HCPCS codes that describe each
distinct drug or biological in order to
determine the mean units per day of the
drug or biological in terms of the HCPCS
code with the lowest dosage descriptor.
The following drugs did not have
pricing information available for the
ASP methodology for this CY 2018
OPPS/ASC proposed rule, and as is our
current policy for determining the
packaging status of other drugs, we used
the mean unit cost available from the
CY 2016 claims data to make the
proposed packaging determinations for
these drugs: HCPCS code J7100
(infusion, dextran 40,500 ml) and
HCPCS code J7110 (infusion, dextran
75,500 ml).
For all other drugs and biologicals
that have HCPCS codes describing
different doses, we then multiplied the
proposed weighted average ASP+6
percent per unit payment amount across
all dosage levels of a specific drug or
biological by the estimated units per day
33629
for all HCPCS codes that describe each
drug or biological from our claims data
to determine the estimated per day cost
of each drug or biological at less than or
equal to the proposed CY 2018 drug
packaging threshold of $120 (so that all
HCPCS codes for the same drug or
biological would be packaged) or greater
than the proposed CY 2018 drug
packaging threshold of $120 (so that all
HCPCS codes for the same drug or
biological would be separately payable).
The proposed packaging status of each
drug and biological HCPCS code to
which this methodology would apply in
CY 2018 is displayed in Table 25 below.
TABLE 25—PROPOSED HCPCS CODES TO WHICH THE CY 2018 DRUG-SPECIFIC PACKAGING DETERMINATION
METHODOLOGY APPLIES
CY 2018
HCPCS code
C9257
J9035
J1020
J1030
J1040
J1460
J1560
J1642
J1644
J1840
J1850
J2788
J2790
J2920
J2930
J3471
J3472
J7030
J7040
J7050
J7100
J7110
J7515
J7502
J8520
J8521
J9250
J9260
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
CY 2018 long descriptor
Proposed
CY 2018 SI
Injection, bevacizumab, 0.25 mg ...................................................................................................................................
Injection, bevacizumab, 10 mg ......................................................................................................................................
Injection, methylprednisolone acetate, 20 mg ...............................................................................................................
Injection, methylprednisolone acetate, 40 mg ...............................................................................................................
Injection, methylprednisolone acetate, 80 mg ...............................................................................................................
Injection, gamma globulin, intramuscular, 1 cc .............................................................................................................
Injection, gamma globulin, intramuscular over 10 cc ....................................................................................................
Injection, heparin sodium, (heparin lock flush), per 10 units .........................................................................................
Injection, heparin sodium, per 1000 units ......................................................................................................................
Injection, kanamycin sulfate, up to 500 mg ...................................................................................................................
Injection, kanamycin sulfate, up to 75 mg .....................................................................................................................
Injection, rho d immune globulin, human, minidose, 50 micrograms (250 i.u.) ............................................................
Injection, rho d immune globulin, human, full dose, 300 micrograms (1500 i.u.) .........................................................
Injection, methylprednisolone sodium succinate, up to 40 mg ......................................................................................
Injection, methylprednisolone sodium succinate, up to 125 mg ....................................................................................
Injection, hyaluronidase, ovine, preservative free, per 1 usp unit (up to 999 usp units) ..............................................
Injection, hyaluronidase, ovine, preservative free, per 1000 usp units .........................................................................
Infusion, normal saline solution, 1000 cc ......................................................................................................................
Infusion, normal saline solution, sterile (500 ml=1 unit) ................................................................................................
Infusion, normal saline solution, 250 cc ........................................................................................................................
Infusion, dextran 40, 500 ml ..........................................................................................................................................
Infusion, dextran 75, 500 ml ..........................................................................................................................................
Cyclosporine, oral, 25 mg ..............................................................................................................................................
Cyclosporine, oral, 100 mg ............................................................................................................................................
Capecitabine, oral, 150 mg ............................................................................................................................................
Capecitabine, oral, 500 mg ............................................................................................................................................
Methotrexate sodium, 5 mg ...........................................................................................................................................
Methotrexate sodium, 50 mg .........................................................................................................................................
K
K
N
N
N
K
K
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
2. Proposed Payment for Drugs and
Biologicals Without Pass-Through
Status That Are Not Packaged
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
a. Proposed Payment for Specified
Covered Outpatient Drugs (SCODs) and
Other Separately Payable and Packaged
Drugs and Biologicals
Section 1833(t)(14) of the Act defines
certain separately payable
radiopharmaceuticals, drugs, and
biologicals and mandates specific
payments for these items. Under section
1833(t)(14)(B)(i) of the Act, a ‘‘specified
covered outpatient drug’’ (known as a
SCOD) is defined as a covered
outpatient drug, as defined in section
1927(k)(2) of the Act, for which a
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separate APC has been established and
that either is a radiopharmaceutical
agent or is a drug or biological for which
payment was made on a pass-through
basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the
Act, certain drugs and biologicals are
designated as exceptions and are not
included in the definition of SCODs.
These exceptions are—
• A drug or biological for which
payment is first made on or after
January 1, 2003, under the transitional
pass-through payment provision in
section 1833(t)(6) of the Act.
• A drug or biological for which a
temporary HCPCS code has not been
assigned.
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• During CYs 2004 and 2005, an
orphan drug (as designated by the
Secretary).
Section 1833(t)(14)(A)(iii) of the Act
requires that payment for SCODs in CY
2006 and subsequent years be equal to
the average acquisition cost for the drug
for that year as determined by the
Secretary, subject to any adjustment for
overhead costs and taking into account
the hospital acquisition cost survey data
collected by the Government
Accountability Office (GAO) in CYs
2004 and 2005, and later periodic
surveys conducted by the Secretary as
set forth in the statute. If hospital
acquisition cost data are not available,
the law requires that payment be equal
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to payment rates established under the
methodology described in section
1842(o), section 1847A, or section
1847B of the Act, as calculated and
adjusted by the Secretary as necessary.
We refer to this alternative methodology
as the ‘‘statutory default.’’ Most
physician Part B drugs are paid at
ASP+6 percent in accordance with
section 1842(o) and section 1847A of
the Act.
Section 1833(t)(14)(E)(ii) of the Act
provides for an adjustment in OPPS
payment rates for SCODs to take into
account overhead and related expenses,
such as pharmacy services and handling
costs. Section 1833(t)(14)(E)(i) of the Act
required MedPAC to study pharmacy
overhead and related expenses and to
make recommendations to the Secretary
regarding whether, and if so how, a
payment adjustment should be made to
compensate hospitals for overhead and
related expenses. Section
1833(t)(14)(E)(ii) of the Act authorizes
the Secretary to adjust the weights for
ambulatory procedure classifications for
SCODs to take into account the findings
of the MedPAC study.14
It has been our longstanding policy to
apply the same treatment to all
separately payable drugs and
biologicals, which include SCODs, and
drugs and biologicals that are not
SCODs. Therefore, we apply the
payment methodology in section
1833(t)(14)(A)(iii) of the Act to SCODs,
as required by statute, but we also apply
it to separately payable drugs and
biologicals that are not SCODs, which is
a policy determination rather than a
statutory requirement. In this CY 2018
OPPS/ASC proposed rule, we are
proposing to apply section
1833(t)(14)(A)(iii)(II) of the Act to all
separately payable drugs and
biologicals, including SCODs. Although
we do not distinguish SCODs in this
discussion, we note that we are required
to apply section 1833(t)(14)(A)(iii)(II) of
the Act to SCODs, but we also are
applying this provision to other
separately payable drugs and
biologicals, consistent with our history
of using the same payment methodology
for all separately payable drugs and
biologicals.
For a detailed discussion of our OPPS
drug payment policies from CY 2006 to
CY 2012, we refer readers to the CY
2013 OPPS/ASC final rule with
comment period (77 FR 68383 through
68385). In the CY 2013 OPPS/ASC final
14 Medicare Payment Advisory Committee. June
2005 Report to the Congress. Chapter 6: Payment for
pharmacy handling costs in hospital outpatient
departments. Available at: https://www.medpac.gov/
docs/default-source/reports/June05_
ch6.pdf?sfvrsn=0.
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rule with comment period (77 FR 68386
through 68389), we first adopted the
statutory default policy to pay for
separately payable drugs and biologicals
at ASP+6 percent based on section
1833(t)(14)(A)(iii)(II) of the Act. We
continued this policy of paying for
separately payable drugs and biologicals
at the statutory default for CY 2014, CY
2015, CY 2016, and CY 2017 (81 FR
79673).
b. Proposed CY 2018 Payment Policy
For CY 2018, we are proposing to
continue our payment policy that has
been in effect from CY 2013 to present
and pay for separately payable drugs
and biologicals at ASP+6 percent in
accordance with section
1833(t)(14)(A)(iii)(II) of the Act (the
statutory default). We are proposing that
the ASP+6 percent payment amount for
separately payable drugs and biologicals
requires no further adjustment and
represents the combined acquisition and
pharmacy overhead payment for drugs
and biologicals. We also are proposing
that payments for separately payable
drugs and biologicals are included in
the budget neutrality adjustments,
under the requirements in section
1833(t)(9)(B) of the Act, and that the
budget neutral weight scalar is not
applied in determining payments for
these separately paid drugs and
biologicals.
We note that we are proposing below
to pay for separately payable, nonpassthrough drugs acquired with a 340B
discount at a rate of ASP minus 22.5
percent. We refer readers to the full
discussion of this proposal in section
V.B.7. of this proposed rule.
Also, we note that separately payable
drug and biological payment rates listed
in Addenda A and B to this proposed
rule (available via the Internet on the
CMS Web site), which illustrate the
proposed CY 2018 payment of ASP+6
percent for separately payable nonpassthrough drugs and biologicals and
ASP+6 percent for pass-through drugs
and biologicals, reflect either ASP
information that is the basis for
calculating payment rates for drugs and
biologicals in the physician’s office
setting effective April 1, 2017, or WAC,
AWP, or mean unit cost from CY 2016
claims data and updated cost report
information available for this proposed
rule. In general, these published
payment rates are not the same as the
actual January 2018 payment rates. This
is because payment rates for drugs and
biologicals with ASP information for
January 2018 will be determined
through the standard quarterly process
where ASP data submitted by
manufacturers for the third quarter of
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2017 (July 1, 2017 through September
30, 2017) will be used to set the
payment rates that are released for the
quarter beginning in January 2018 near
the end of December 2017. In addition,
payment rates for drugs and biologicals
in Addenda A and B to this proposed
rule for which there was no ASP
information available for April 2017 are
based on mean unit cost in the available
CY 2016 claims data. If ASP information
becomes available for payment for the
quarter beginning in January 2018, we
will price payment for these drugs and
biologicals based on their newly
available ASP information. Finally,
there may be drugs and biologicals that
have ASP information available for this
proposed rule (reflecting April 2017
ASP data) that do not have ASP
information available for the quarter
beginning in January 2018. These drugs
and biologicals would then be paid
based on mean unit cost data derived
from CY 2016 hospital claims.
Therefore, the proposed payment rates
listed in Addenda A and B to this
proposed rule are not for January 2018
payment purposes and are only
illustrative of the proposed CY 2018
OPPS payment methodology using the
most recently available information at
the time of issuance of this proposed
rule.
c. Biosimilar Biological Products
For CY 2016 and CY 2017, we
finalized a policy to pay for biosimilar
biological products based on the
payment allowance of the product as
determined under section 1847A of the
Act and to subject nonpass-through
biosimilar biological products to our
annual threshold-packaged policy (80
FR 70445 through 70446). For CY 2018,
we are proposing to continue this same
payment policy for biosimilar biological
products.
Public comments on the Medicare
Part B biosimilar biological product
payment policy should be submitted in
response to the biosimilar payment
policy comment solicitation in the CY
2018 MPFS proposed rule.
3. Proposed Payment Policy for
Therapeutic Radiopharmaceuticals
For CY 2018, we are proposing to
continue the payment policy for
therapeutic radiopharmaceuticals that
began in CY 2010. We pay for separately
paid therapeutic radiopharmaceuticals
under the ASP methodology adopted for
separately payable drugs and
biologicals. If ASP information is
unavailable for a therapeutic
radiopharmaceutical, we base
therapeutic radiopharmaceutical
payment on mean unit cost data derived
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from hospital claims. We believe that
the rationale outlined in the CY 2010
OPPS/ASC final rule with comment
period (74 FR 60524 through 60525) for
applying the principles of separately
payable drug pricing to therapeutic
radiopharmaceuticals continues to be
appropriate for nonpass-through,
separately payable therapeutic
radiopharmaceuticals in CY 2018.
Therefore, we are proposing for CY 2018
to pay all nonpass-through, separately
payable therapeutic
radiopharmaceuticals at ASP+6 percent,
based on the statutory default described
in section 1833(t)(14)(A)(iii)(II) of the
Act. For a full discussion of ASP-based
payment for therapeutic
radiopharmaceuticals, we refer readers
to the CY 2010 OPPS/ASC final rule
with comment period (74 FR 60520
through 60521). We also are proposing
to rely on CY 2016 mean unit cost data
derived from hospital claims data for
payment rates for therapeutic
radiopharmaceuticals for which ASP
data are unavailable and to update the
payment rates for separately payable
therapeutic radiopharmaceuticals
according to our usual process for
updating the payment rates for
separately payable drugs and biologicals
on a quarterly basis if updated ASP
information is unavailable. For a
complete history of the OPPS payment
policy for therapeutic
radiopharmaceuticals, we refer readers
to the CY 2005 OPPS final rule with
comment period (69 FR 65811), the CY
2006 OPPS final rule with comment
period (70 FR 68655), and the CY 2010
OPPS/ASC final rule with comment
period (74 FR 60524). The proposed CY
2018 payment rates for nonpassthrough, separately payable therapeutic
radiopharmaceuticals are in Addenda A
and B to this proposed rule (which are
available via the Internet on the CMS
Web site).
4. Proposed Payment Adjustment Policy
for Radioisotopes Derived From NonHighly Enriched Uranium Sources
Radioisotopes are widely used in
modern medical imaging, particularly
for cardiac imaging and predominantly
for the Medicare population. Some of
the Technetium-99 (Tc-99m), the
radioisotope used in the majority of
such diagnostic imaging services, is
produced in legacy reactors outside of
the United States using highly enriched
uranium (HEU).
The United States would like to
eliminate domestic reliance on these
reactors, and is promoting the
conversion of all medical radioisotope
production to non-HEU sources.
Alternative methods for producing Tc-
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99m without HEU are technologically
and economically viable, and
conversion to such production has
begun. We expect that this change in the
supply source for the radioisotope used
for modern medical imaging will
introduce new costs into the payment
system that are not accounted for in the
historical claims data.
Therefore, beginning in CY 2013, we
finalized a policy to provide an
additional payment of $10 for the
marginal cost for radioisotopes
produced by non-HEU sources (77 FR
68323). Under this policy, hospitals
report HCPCS code Q9969 (Tc-99m from
non-highly enriched uranium source,
full cost recovery add-on per study
dose) once per dose along with any
diagnostic scan or scans furnished using
Tc-99m as long as the Tc-99m doses
used can be certified by the hospital to
be at least 95 percent derived from nonHEU sources (77 FR 68321).
We stated in the CY 2013 OPPS/ASC
final rule with comment period (77 FR
68321) that our expectation is that this
additional payment will be needed for
the duration of the industry’s
conversion to alternative methods to
producing Tc-99m without HEU. We
also stated that we would reassess, and
propose if necessary, on an annual basis
whether such an adjustment continued
to be necessary and whether any
changes to the adjustment were
warranted (77 FR 68316). We have
reassessed this payment for CY 2018
and did not identify any new
information that would cause us to
modify payment. Therefore, for CY
2018, we are proposing to continue to
provide an additional $10 payment for
radioisotopes produced by non-HEU
sources.
5. Proposed Payment for Blood Clotting
Factors
For CY 2017, we provided payment
for blood clotting factors under the same
methodology as other nonpass-through
separately payable drugs and biologicals
under the OPPS and continued paying
an updated furnishing fee (81 FR
79676). That is, for CY 2017, we
provided payment for blood clotting
factors under the OPPS at ASP+6
percent, plus an additional payment for
the furnishing fee. We note that when
blood clotting factors are provided in
physicians’ offices under Medicare Part
B and in other Medicare settings, a
furnishing fee is also applied to the
payment. The CY 2017 updated
furnishing fee was $0.209 per unit.
For CY 2018, we are proposing to pay
for blood clotting factors at ASP+6
percent, consistent with our proposed
payment policy for other nonpass-
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33631
through, separately payable drugs and
biologicals, and to continue our policy
for payment of the furnishing fee using
an updated amount. Our policy to pay
for a furnishing fee for blood clotting
factors under the OPPS is consistent
with the methodology applied in the
physician’s office and in the inpatient
hospital setting. These methodologies
were first articulated in the CY 2006
OPPS final rule with comment period
(70 FR 68661) and later discussed in the
CY 2008 OPPS/ASC final rule with
comment period (72 FR 66765). The
proposed furnishing fee update is based
on the percentage increase in the
Consumer Price Index (CPI) for medical
care for the 12-month period ending
with June of the previous year. Because
the Bureau of Labor Statistics releases
the applicable CPI data after the MPFS
and OPPS/ASC proposed rules are
published, we are not able to include
the actual updated furnishing fee in the
proposed rules. Therefore, in
accordance with our policy, as finalized
in the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66765), we
are proposing to announce the actual
figure for the percent change in the
applicable CPI and the updated
furnishing fee calculated based on that
figure through applicable program
instructions and posting on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-Service-PartB-Drugs/McrPartBDrugAvgSalesPrice/
index.html.
6. Proposed Payment for NonpassThrough Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS
Codes But Without OPPS Hospital
Claims Data
For CY 2018, we are proposing to
continue to use the same payment
policy as in CY 2017 for nonpassthrough drugs, biologicals, and
radiopharmaceuticals with HCPCS
codes but without OPPS hospital claims
data, which describes how we
determine the payment rate for drugs,
biologicals, or radiopharmaceuticals
without an ASP. For a detailed
discussion of the payment policy and
methodology, we refer readers the CY
2016 OPPS/ASC final rule with
comment period (80 FR 70442 through
70443). The proposed CY 2018 payment
status of each of the nonpass-through
drugs, biologicals, and
radiopharmaceuticals with HCPCS
codes but without OPPS hospital claims
data is listed in Addendum B to this
proposed rule, which is available via the
Internet on the CMS Web site.
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7. Alternative Payment Methodology for
Drugs Purchased Under the 340B Drug
Discount Program
a. Background
The 340B Drug Discount Program,
which was established by section 340B
of the Public Health Service Act by the
Veterans Health Care Act of 1992, is
administered by the Health Resources
and Services Administration (HRSA)
within HHS. The 340B program allows
participating hospitals and other health
care providers to purchase certain
‘‘covered outpatient drugs’’ (as defined
under section 1927(k) of the Act and
interpreted by HRSA through various
guidance documents) at discounted
prices from drug manufacturers. The
statutory intent of the 340B program is
to maximize scarce Federal resources as
much as possible, reaching more eligible
patients, and providing care that is more
comprehensive.15
The 340B statute defines which health
care providers are eligible to participate
in the program (‘‘covered entities’’). In
addition to Federal health care grant
recipients, covered entities include
hospitals with a Medicare
disproportionate share hospital (DSH)
percentage above 11.75 percent.
However, under Pub. L. 111–148,
section 7101 expanded eligibility to
critical access hospitals (CAHs),
children’s hospitals with a DSH
adjustment greater than 11.75 percent,
sole community hospitals with a DSH
adjustment percentage of 8.0 percent or
higher, rural referral centers with a DSH
adjustment percentage of 8.0 percent or
higher, and freestanding cancer
hospitals with a DSH adjustment
percentage above 11.75 percent. In
accordance with section 340B(a)(4)(L) of
the Public Health Service Act, DSH
hospitals and CAH participants must
meet other criteria, such as being owned
by a State or local government, or be a
nonprofit hospital under contract with a
State or local government to provide
services to low-income patients who are
not eligible for Medicare or Medicaid.
HRSA calculates the ceiling price for
each covered outpatient drug. The
ceiling price is the drug’s average
manufacturer price (AMP) minus the
unit rebate amount (URA), which is a
statutory formula that varies depending
on whether the drug is an innovator
single source drug (no generic
15 The House report that accompanied the
authorizing legislation for the 340B program stated,
‘‘In giving these ‘‘covered entities’’ access to price
reductions the Committee intends to enable these
entities to stretch scarce Federal resources as far as
possible, reaching more eligible patients and
providing more comprehensive services.’’ (H.R. Rep
No. 102–384(II), at 12 (1992)).
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available), an innovator multiple source
drug (a brand drug with available
generic(s)), or a noninnovator multiple
source (generic) drug. The ceiling price
represents the maximum price a drug
manufacturer can charge a covered
entity for the drug. However, covered
entities also have the option to
participate in HRSA’s Prime Vendor
Program (PVP), under which the prime
vendor, in some circumstances, can
negotiate even deeper discounts (known
as ‘‘subceiling prices’’) on many covered
outpatient drugs. By the end of FY 2014,
the PVP had nearly 7,000 products
available to participating entities below
the 340B ceiling price, including 3,557
covered outpatient drugs with an
estimated average savings of 10 percent
below the 340B ceiling price.16
Several recent studies and reports on
Medicare Part B payments for 340B
purchased drugs highlight a difference
in Medicare Part B drug spending
between 340B hospitals and non-340B
hospitals as well as varying differences
in the amount by which the Part B
payment exceeds the drug acquisition
cost.17 18 19 Links to the full reports
referenced in this section can be found
in the footnotes.
In its May 2015 Report to Congress,
MedPAC analyzed Medicare hospital
outpatient claims (excluding CAHs)
along with information from HRSA on
which hospitals participate in the 340B
program. MedPAC included data on all
separately payable drugs under the
OPPS except for vaccines and orphan
drugs provided by freestanding cancer
hospitals, rural referral centers, and sole
community hospitals. To estimate costs
that 340B hospitals incur to acquire
drugs covered under the OPPS, it
generally used the formula for
calculating the 340B ceiling price:
(average manufacturer price
(AMP)¥unit rebate amount (URA)) ×
drug package size. Because MedPAC did
not have access to AMP data, it used
16 Department of Health and Human Services.
2016. Fiscal Year 2017. Health Resources and
Services Administration justification of estimates
for appropriations committees. Washington, DC:
HHS. https://www.hrsa.gov/about/budget/
budgetjustification2017.pdf.
17 Office of Inspector General. ‘‘Part B Payment
for 340B Purchased Drugs OEI–12–14–00030’’.
November 2015. Available at: https://oig.hhs.gov/
oei/reports/oei-12-14-00030.pdf.
18 Medicare Payment Advisory Commission.
Report to the Congress: Overview of the 340B Drug
Pricing Program. May 2015. Available at: https://
www.medpac.gov/docs/default-source/reports/may2015-report-to-the-congress-overview-of-the-340bdrug-pricing-program.pdf?sfvrsn=0
19 Government Accountability Office. ‘‘Medicare
Part B Drugs: Action Needed to Reduce Financial
Incentives to Prescribe 340B Drugs at Participating
Hospitals GAO–15–442’’. June 2015. Available at:
https://www.gao.gov/assets/680/670676.pdf.
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each drug’s ASP as a proxy for AMP.
MedPAC notes that ASP is typically
slightly lower than AMP. In addition,
MedPAC noted that, due to data
limitations, its estimates of ceiling
prices are conservative and likely higher
(possibly much higher) than actual
ceiling prices. Further details on the
methodology used to calculate the
average minimum discount for
separately payable drugs can be found
in Appendix A of its May 2015 Report
to Congress. In this report, MedPAC
estimated that, on average, hospitals in
the 340B program ‘‘receive a minimum
discount of 22.5 percent of the [ASP] for
drugs paid under the [OPPS].’’
In its March 2016 MedPAC Report to
Congress, MedPAC noted that the OIG
recently estimated that discounts across
all 340B providers (hospitals and certain
clinics) average 33.6 percent of ASP,
allowing these providers to generate
significant profits when they administer
Part B drugs (MedPAC March 2016,
page 79). According to the U.S.
Government Accountability Office
(GAO) report, the amount of the 340B
discount ranges from an estimated 20 to
50 percent discount, compared to what
the entity would have otherwise paid. In
addition, participation in the PVP often
results in a covered entity paying a
subceiling price (estimated to be
approximately 10 percent below the
ceiling price). (U.S. Department of
Health and Human Services, HRSA FY
2015 Budget Justification.) Participation
in the PVP is voluntary and free.
With respect to chemotherapy drugs
and drug administration services,
MedPAC examined Part B spending for
340B and non-340B hospitals for a 5year period from 2008 to 2012 and
found that ‘‘Medicare spending grew
faster among hospitals that participated
in the 340B program for all five years
than among hospitals that did not
participate in the 340B program at any
time during [the study] period.’’
(MedPAC May 2015, page 14). This is
just one example of drug spending
increases that is correlated with
participation in the 340B program and
calls into question whether Medicare’s
current payment policy for separately
payable drugs at ASP+ 6 percent is
appropriate in light of the discounted
rates at which 340B hospitals acquire
such drugs, especially because
beneficiary cost-sharing for these drugs
is based on the Medicare payment rate.
Further, GAO found that ‘‘. . . in both
2008 and 2012, per beneficiary
Medicare Part B drug spending,
including oncology drug spending, was
substantially higher at 340B DSH
hospitals than at non-340B hospitals.’’
According to the GAO report, this
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indicates that, on average, beneficiaries
at 340B DSH hospitals were either
prescribed more drugs or more
expensive drugs than beneficiaries at
the other non-340B hospitals in GAO’s
analysis. For example, in 2012, average
per beneficiary spending at 340B DSH
hospitals was $144, compared to
approximately $60 at non-340B
hospitals. The differences did not
appear to be explained by the hospital
characteristics GAO examined or
patients’ health status. (GAO 15–442,
page 20)
Under the OPPS, all hospitals (other
than CAHs, which are paid based on
101 percent of reasonable costs as
required by section 1834(g) of the Act)
are currently paid the same rate for
separately payable drugs (ASP plus 6
percent), regardless of whether the
hospital purchased the drug at a
discount through the 340B program.
Medicare beneficiaries are liable for a
copayment that is equal to 20 percent of
the OPPS payment rate, which is
currently ASP+6 percent (regardless of
the 340B purchase price for the drug).
Based on an analysis of almost 500
drugs billed in the hospital outpatient
setting in 2013, the OIG found that, for
35 drugs, the ‘‘difference between the
Part B amount and the 340B ceiling
price was so large that, in a least one
quarter of 2013, the beneficiary’s
coinsurance alone . . . was greater than
the amount a covered entity spent to
acquire the drug’’ (OIG November 2015,
OEI–12–14–00030, page 9).
In the CY 2009 OPPS/ASC final rule
with comment period, we requested
comment regarding the drug costs of
hospitals that participate in the 340B
program and whether we should
consider an alternative drug payment
methodology for participating 340B
hospitals (73 FR 68655). As noted
above, in the time since that comment
solicitation, access to the 340B program
was expanded under section 7101 of
Public Law 111–148, which amended
section 340B(a)(4) of the Public Health
Service Act to expand the types of
covered entities eligible to participate in
the 340B program. In addition, in its
March 2016 Report to Congress,
MedPAC recommended a legislative
proposal related to payment for Part B
drugs furnished by 340B hospitals
under which Medicare would reduce
payment rates for 340B hospitals’
separately payable 340B drugs by 10
percent of the ASP and direct the
program savings from reducing Part B
drug payment rates to the Medicare
funded uncompensated care pool.20 In
20 Medicare Payment Advisory Commission.
March 2016 Report to the Congress: Medicare
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its November 2015 report entitled ‘‘Part
B Payments for 340B-Purchased Drugs,’’
the Office of the Inspector General (OIG)
found that Part B payments were 58
percent more than 340B ceiling prices,
which allowed covered entities to retain
approximately $1.3 billion in 2013
(OEI–12–14–00030, page 8). In the same
report, the OIG described three options
under which both the Medicare program
and Medicare beneficiaries would be
able to share in the savings realized by
hospitals and other covered entities that
participate in the 340B program (OEI–
12–14–00030, pages 11–12). These
options ranged from paying ASP with
no additional add-on percentage, to
making payment based on the 340B
ceiling price plus 6 percent of ASP for
each 340B purchased drug (OEI–12–14–
00030, page 11). Analysis in several of
these reports notes limitations in
estimating 340B purchased drugs
acquisition costs and the inability to
identify which drugs were purchased
through the 340B program within
Medicare claims data was another
limitation.
It is estimated that covered entities
saved $3.8 billion on outpatient drugs
purchased through the 340B program in
2013.21 In addition, the number of
hospitals participating in the program
has grown from 583 in 2005 to 1,365 in
2010 and 2,140 in 2014 (MedPAC May
2015). Given the growth in the number
of providers participating in the 340B
program and recent trends in high and
growing prices of several separately
payable drugs administered under
Medicare Part B to hospital outpatients,
we believe it is timely to reexamine the
appropriateness of continuing to pay the
current OPPS methodology of ASP+6
percent to hospitals that have acquired
those drugs under the 340B program at
significantly discounted rates. This is
especially important because of the
inextricable link of the Medicare
payment rate to the beneficiary costsharing amount. In addition, we are
concerned about the rising prices of
certain drugs and that Medicare
beneficiaries, including low-income
seniors, are resonsible for paying 20
percent of the Medicare payment rate
for these drugs. We are concerned that
the current payment methodology may
lead to unnecessary utilization and
potential overutilization of separately
payable drugs.
Payment Policy. March 2016. Available at: https://
www.medpac.gov/docs/default-source/reports/
chapter-3-hospital-inpatient-and-outpatientservices-march-2016-report-.pdf?sfvrsn=0.
21 U.S. Department of Health and Human
Services, HRSA FY 2015 Budget Justification, p.
342.
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33633
b. Proposed OPPS Payment Rate for
340B Purchased Drugs
In this proposed rule, we are
proposing changes to our current
Medicare Part B drug payment
methodology for 340B hospitals that we
believe would better, and more
appropriately, reflect the resources and
acquisition costs that these hospitals
incur. Such changes would allow
Medicare beneficiaries (and the
Medicare program) to pay less when
hospitals participating in the 340B
program furnish drugs to Medicare
beneficiaries that are purchased under
the 340B program.
Our goal is to make Medicare
payment for separately payable drugs
more aligned with the resources
expended by hospitals to acquire such
drugs while recognizing the intent of the
340B program to allow covered entities,
including eligible hospitals, to stretch
scarce resources while continuing to
provide access to care. Medicare
expenditures on Part B drugs are rising
due to underlying factors such as
growth of the 340B program, higher
price drugs, or price increases for
drugs.22 We believe that any payment
changes we adopt should be limited to
separately payable drugs under the
OPPS, with other additional exclusions.
These exclusions include (1) drugs on
pass-through status, which are required
to be paid based on the ASP
methodology and (2) vaccines, which
are excluded from the 340B program.
Also, as stated later in this section, we
are soliciting comment on whether other
types of drugs, such as blood clotting
factors, should also be excluded from
the reduced payment.
Current data limitations inhibit
identification of which drugs were
acquired under the 340B program in the
Medicare OPPS claims data. This lack of
information within the claims data has
limited researchers’ and our ability to
precisely analyze differences in
acquisition cost of 340B and non-340Bacquired drugs with Medicare claims
data. Accordingly, we intend to
establish a modifier, to be effective
January 1, 2018, for hospitals to report
with separately payable drugs that were
not acquired under the 340B program.
Because a significant portion of
hospitals paid under the OPPS
participate in the 340B program, we
believe it is appropriate to presume that
a separately payable drug reported on an
OPPS claim was purchased under the
22 Department of Health and Human Services.
Office of the Assistant Secretary for Planning and
Evaluation. Issue Brief: Medicare Part B Drugs:
Pricing and Incentives. 2016. https://aspe.hhs.gov/
system/files/pdf/187581/PartBDrug.pdf.
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340B program, unless the hospital
identifies that the drug was not
purchased under the 340B program. We
intend to provide further details about
this modifier in the CY 2018 OPPS/ASC
final rule with comment period and/or
through subregulatory guidance,
including guidance related to billing for
dually eligible beneficiaries (that is,
beneficiaries covered under Medicare
and Medicaid) for whom covered
entities do not receive a discount under
the 340B program.
Further, we note that the
confidentiality of ceiling and subceiling
prices limits our ability to precisely
calculate the price paid by 340B
hospitals for a particular covered
outpatient drug. Accordingly, we
believe using an average discounted
price is appropriate for our proposal.
Therefore, for CY 2018, we are
proposing to apply an average discount
of 22.5 percent of the average sales price
for nonpass-through separately payable
drugs purchased under the 340B
program, as estimated by MedPAC
(MedPAC’s May 2015 Report to
Congress, page 7).
In the near-term, we believe that the
estimated average minimum discount
MedPAC calculated—22.5 percent of the
ASP—adequately represents the average
minimum discount that a 340B
participating hospital receives for
separately payable drugs under the
OPPS. Given the limitations in
calculating a precise discount for each
separately payable drug, we have not
attempted to do so for this proposed
rule. Instead, we believe that using the
analysis from the MedPAC report is
appropriate and note that the analysis is
spelled out in detail and can be
replicated by interested parties. As
MedPAC noted, its estimate was
conservative and the actual average
discount experienced by 340B hospitals
is likely much higher than 22.5 percent.
As GAO mentioned, discounts under
340B range from 20 to 50 percent (GAO–
11–836, page 2). We believe that such
reduced payment would meet the
requirements under section
1833(t)(14)(A)(iii)(II) the Act, which
states that if hospital acquisition cost
data are not available, the payment for
an applicable drug shall be the average
price for the drug in the year established
under section 1842(o), section 1847A, or
section 1847B of the Act, as the case
may be, as calculated and adjusted by
the Secretary as necessary. We do not
have hospital acquisition cost data for
340B drugs and, therefore, are proposing
to continue to pay for these drugs under
our authority at section
1833(t)(14)(A)(iii)(II) of the Act at ASP,
and then to adjust that amount by
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applying a reduction of 22.5 percent,
which, as explained throughout this
section, is the adjustment we believe is
necessary for drugs acquired under the
340B program.
Specifically, in this CY 2018 OPPS/
ASC proposed rule, we are proposing to
apply section 1833(t)(14)(A)(iii)(II) of
the Act to all separately payable drugs
and biologicals, including SCODs.
However, we are proposing to exercise
the Secretary’s authority to adjust the
applicable payment rate as necessary
and, for separately payable drugs and
biologicals (other than drugs on passthrough and vaccines) acquired under
the 340B program, are proposing to
adjust the rate to ASP minus 22.5
percent which we believe better
represents the average acquisition cost
for these drugs and biologicals.
As indicated above, because ceiling
prices are confidential, we are unable to
publicly disclose those prices or set
payment rates in a way that would
allow the public to determine the
ceiling price for a particular drug. We
believe that the MedPAC analysis that
found the average minimum discount of
22.5 percent of ASP adequately reflects
the average minimum discount that
340B hospitals paid under the OPPS
receive. Additionally, we believe that
using an average discount to set
payment rates for separately payable
drugs would achieve the dual goals of
(1) adjusting payments to better reflect
resources expended to acquire such
drugs while (2) also protecting the
confidential nature of discounts applied
to a specific drug. Moreover, we do not
believe that Medicare beneficiaries
should be liable for a copayment rate
that is tied to the current methodology
of ASP+6 percent when the actual cost
to the hospital to purchase the drug is
much lower than the ASP for the drug.
We note that MedPAC excluded
vaccines from its analysis since vaccines
are not covered under 340B, but it did
not exclude drugs on pass-through
status. Further, because data used to
calculate ceiling prices is not publicly
available, MedPAC instead estimated
‘‘the lower bound of the average
discount received by 340B hospitals for
drugs paid under the [OPPS]’’ (MedPAC
2015, page 6). Accordingly, it is likely
that the average discount is higher,
potentially significantly higher, than the
average minimum of 22.5 percent that
MedPAC found through its analysis. We
encourage the public to analyze the
analysis presented in Appendix A of
MedPAC’s May 2015 Report to
Congress.
As noted above, we believe that the
discount amount of 22.5 percent below
the ASP reflects the average minimum
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discount that 340B hospitals receive for
drugs acquired under the 340B program,
and it is likely that the average discount
may be higher due to participation in
the PVP, substitution of ASP (which
includes additional rebates) for AMP,
and that drugs with pass-through status
were included rather than excluded
from the MedPAC analysis. We believe
that a payment rate of ASP+6 percent
does not sufficiently recognize the
significantly lower acquisition costs of
such drugs incurred by a 340B hospital.
Accordingly, as noted above, we are
proposing to reduce payment for
separately payable drugs, excluding
drugs on pass-through status and
vaccines that were acquired under the
340B program, by 22.5 percent of ASP
for all drugs for which a hospital does
not append on the claim the modifier
proposed above.
Finally, as detailed in the impact
analysis section (section XIX.) of this
proposed rule, we also are proposing
that the reduced payments for
separately payable drugs and biologicals
purchased under the 340B program are
included in the budget neutrality
adjustments, under the requirements in
section 1833(t)(9)(B) of the Act, and that
the budget neutral weight scalar is not
applied in determining payments for
these separately paid drugs and
biologicals purchased under the 340B
program. In that section, we also are
soliciting public comments on whether
we should apply all or part of the
savings generated by this payment
reduction to increase payments for
specific services paid under the OPPS,
or under Part B generally, in CY 2018,
rather than simply increasing the
conversion factor. In particular, we are
seeking comments on whether and how
the offsetting increase could be targeted
to hospitals that treat a large share of
indigent patients, especially those
patients who are uninsured. In addition,
we are seeking comments on whether
the redistribution of savings associated
with this proposal would result in
unnecessary increases in the volume of
covered services paid under the OPPS
which should be adjusted in accordance
with section 1833(t)(2)(F) of the Act.
More information on the impact
estimate associated with this proposal is
included in section XIX. of this
proposed rule.
c. Comment Solicitation on Additional
340B Considerations
As discussed above, we recognize
there are data limitations in estimating
the average discount of 340B drugs. We
welcome stakeholder input with regard
to MedPAC’s May 2015 analysis and the
resulting estimate of ASP minus 22.5
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percent as the proposed payment rate
for separately payable, nonpass-through
OPPS drugs purchased under the 340B
drug discount program in CY 2018. We
also are requesting comment on whether
we should adopt a different payment
rate to account for the average minimum
discount of OPPS drugs purchased
under the 340B drug discount program.
Also, we are seeking comment on
whether the proposal to pay ASP minus
22.5 percent for 340B purchased drugs
should be phased in over time (such as
over a period of 2 to 3 years).
In addition, we recognize that the
acquisition costs for drugs may vary
among hospitals, depending on a
number of factors such as size, patient
volume, labor market area and case-mix.
Accordingly, in the longer term, we are
interested in exploring ways to identify
the actual acquisition costs that each
hospital incurs rather than using an
average minimum discounted rate that
would apply uniformly across all 340B
hospitals. We are seeking public
comment on whether, as a longer term
option, Medicare should require 340B
hospitals to report their acquisition
costs in addition to charges for each
drug on the Medicare claim. Having the
acquisition cost on a drug-specific basis
would enable us to pay a rate under the
OPPS that is directly tied to the
acquisition costs for each separately
payable drug. To the extent that the
acquisition costs for some drugs may
equal the ceiling price for a drug, we
recognize that there may be challenges
with keeping the ceiling price
confidential as required by section
1927(b)(3)(D) of the Act and are seeking
comment on this point.
Lastly, for consideration for future
policy refinements, we are seeking
public comment on (1) whether, due to
access to care issues, exceptions should
be granted to certain groups of hospitals,
such as those with special adjustments
under the OPPS (for example, rural solecommunity hospitals or PPS-exempt
cancer hospitals) if a policy were
adopted to adjust OPPS payments to
340B participating hospitals (if so,
describe how adjusted rates for drugs
purchased under the 340B program
would disproportionately affect access
in these provider settings); (2) whether
other types of drugs, such as blood
clotting factors, should also be excluded
from the reduced payment; and (3)
whether hospital-owned or affiliated
ASCs have access to 340B discounted
drugs.
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VI. Proposed Estimate of OPPS
Transitional Pass-Through Spending
for Drugs, Biologicals,
Radiopharmaceuticals, and Devices
A. Background
Section 1833(t)(6)(E) of the Act limits
the total projected amount of
transitional pass-through payments for
drugs, biologicals,
radiopharmaceuticals, and categories of
devices for a given year to an
‘‘applicable percentage,’’ currently not
to exceed 2.0 percent of total program
payments estimated to be made for all
covered services under the OPPS
furnished for that year. If we estimate
before the beginning of the calendar
year that the total amount of passthrough payments in that year would
exceed the applicable percentage,
section 1833(t)(6)(E)(iii) of the Act
requires a uniform prospective
reduction in the amount of each of the
transitional pass-through payments
made in that year to ensure that the
limit is not exceeded. We estimate the
pass-through spending to determine
whether payments exceed the
applicable percentage and the
appropriate prorata reduction to the
conversion factor for the projected level
of pass-through spending in the
following year to ensure that total
estimated pass-through spending for the
prospective payment year is budget
neutral, as required by section
1833(t)(6)(E) of the Act.
For devices, developing a proposed
estimate of pass-through spending in CY
2018 entails estimating spending for two
groups of items. The first group of items
consists of device categories that are
currently eligible for pass-through
payment and that will continue to be
eligible for pass-through payment in CY
2018. The CY 2008 OPPS/ASC final rule
with comment period (72 FR 66778)
describes the methodology we have
used in previous years to develop the
pass-through spending estimate for
known device categories continuing into
the applicable update year. The second
group of items consists of items that we
know are newly eligible, or project may
be newly eligible, for device passthrough payment in the remaining
quarters of CY 2017 or beginning in CY
2018. The sum of the proposed CY 2018
pass-through spending estimates for
these two groups of device categories
equals the proposed total CY 2018 passthrough spending estimate for device
categories with pass-through payment
status. We base the device pass-through
estimated payments for each device
category on the amount of payment as
established in section 1833(t)(6)(D)(ii) of
the Act, and as outlined in previous
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33635
rules, including the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75034 through 75036). We note that,
beginning in CY 2010, the pass-through
evaluation process and pass-through
payment for implantable biologicals
newly approved for pass-through
payment beginning on or after January
1, 2010, that are surgically inserted or
implanted (through a surgical incision
or a natural orifice) use the device passthrough process and payment
methodology (74 FR 60476). As has
been our past practice (76 FR 74335), in
this proposed rule, we are proposing to
include an estimate of any implantable
biologicals eligible for pass-through
payment in our estimate of pass-through
spending for devices. Similarly, we
finalized a policy in CY 2015 that
applications for pass-through payment
for skin substitutes and similar products
be evaluated using the medical device
pass-through process and payment
methodology (76 FR 66885 through
66888). Therefore, as we did beginning
in CY 2015, for CY 2018, we also are
proposing to include an estimate of any
skin substitutes and similar products in
our estimate of pass-through spending
for devices.
For drugs and biologicals eligible for
pass-through payment, section
1833(t)(6)(D)(i) of the Act establishes the
pass-through payment amount as the
amount by which the amount
authorized under section 1842(o) of the
Act (or, if the drug or biological is
covered under a competitive acquisition
contract under section 1847B of the Act,
an amount determined by the Secretary
equal to the average price for the drug
or biological for all competitive
acquisition areas and year established
under such section as calculated and
adjusted by the Secretary) exceeds the
portion of the otherwise applicable fee
schedule amount that the Secretary
determines is associated with the drug
or biological. Because we are proposing
to pay for most nonpass-through
separately payable drugs and biologicals
under the CY 2018 OPPS at ASP+6
percent, and because we are proposing
to pay for CY 2018 pass-through drugs
and biologicals at ASP+6 percent, as we
discussed in section V.A. of this
proposed rule, our estimate of drug and
biological pass-through payment for CY
2018 for this group of items is $0, as
discussed below. We note that our
estimate does not reflect the proposed
payment policy for drugs purchased
through the 340B program, as we
discuss in section V.B.7. of this
proposed rule.
Furthermore, payment for certain
drugs, specifically diagnostic
radiopharmaceuticals and contrast
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agents without pass-through payment
status, is packaged into payment for the
associated procedures, and these
products will not be separately paid. In
addition, we policy-package all
nonpass-through drugs, biologicals, and
radiopharmaceuticals that function as
supplies when used in a diagnostic test
or procedure and drugs and biologicals
that function as supplies when used in
a surgical procedure, as discussed in
section II.A.3. of this proposed rule. We
are proposing that all of these policypackaged drugs and biologicals with
pass-through payment status would be
paid at ASP+6 percent, like other passthrough drugs and biologicals, for CY
2018. Therefore, our estimate of passthrough payment for policy-packaged
drugs and biologicals with pass-through
payment status approved prior to CY
2018 is not $0, as discussed below. In
section V.A.5. of this proposed rule, we
discuss our policy to determine if the
costs of certain policy-packaged drugs
or biologicals are already packaged into
the existing APC structure. If we
determine that a policy-packaged drug
or biological approved for pass-through
payment resembles predecessor drugs or
biologicals already included in the costs
of the APCs that are associated with the
drug receiving pass-through payment,
we are proposing to offset the amount of
pass-through payment for the policypackaged drug or biological. For these
drugs or biologicals, the APC offset
amount is the portion of the APC
payment for the specific procedure
performed with the pass-through drug
or biological, which we refer to as the
policy-packaged drug APC offset
amount. If we determine that an offset
is appropriate for a specific policypackaged drug or biological receiving
pass-through payment, we are proposing
to reduce our estimate of pass-through
payments for these drugs or biologicals
by this amount.
Similar to pass-through estimates for
devices, the first group of drugs and
biologicals requiring a pass-through
payment estimate consists of those
products that were recently made
eligible for pass-through payment and
that will continue to be eligible for passthrough payment in CY 2018. The
second group contains drugs and
biologicals that we know are newly
eligible, or project will be newly eligible
in the remaining quarters of CY 2017 or
beginning in CY 2018. The sum of the
CY 2018 pass-through spending
estimates for these two groups of drugs
and biologicals equals the total CY 2018
pass-through spending estimate for
drugs and biologicals with pass-through
payment status.
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B. Estimate of Pass-Through Spending
We are proposing to set the applicable
pass-through payment percentage limit
at 2.0 percent of the total projected
OPPS payments for CY 2018, consistent
with section 1833(t)(6)(E)(ii)(II) of the
Act and our OPPS policy from CY 2004
through CY 2017 (81 FR 79676 through
79678).
For the first group, consisting of
device categories that are currently
eligible for pass-through payment and
will continue to be eligible for passthrough payment in CY 2018, there are
no active categories for CY 2018.
Because there are no device active
categories for CY 2018, we are
proposing an estimate for the first group
of devices of $0.
In estimating our proposed CY 2018
pass-through spending for device
categories in the second group, we
included: Device categories that we
knew at the time of the development of
the proposed rule will be newly eligible
for pass-through payment in CY 2018;
additional device categories that we
estimated could be approved for passthrough status subsequent to the
development of the proposed rule and
before January 1, 2018; and contingent
projections for new device categories
established in the second through fourth
quarters of CY 2018. We are proposing
to use the general methodology
described in the CY 2008 OPPS/ASC
final rule with comment period (72 FR
66778), while also taking into account
recent OPPS experience in approving
new pass-through device categories. For
this proposed rule, the proposed
estimate of CY 2018 pass-through
spending for this second group of device
categories is $10 million.
To estimate proposed CY 2018 passthrough spending for drugs and
biologicals in the first group,
specifically those drugs and biologicals
recently made eligible for pass-through
payment and continuing on passthrough payment status for CY 2018, we
are proposing to use the most recent
Medicare hospital outpatient claims
data regarding their utilization,
information provided in the respective
pass-through applications, historical
hospital claims data, pharmaceutical
industry information, and clinical
information regarding those drugs or
biologicals to project the CY 2018 OPPS
utilization of the products.
For the known drugs and biologicals
(excluding policy-packaged diagnostic
radiopharmaceuticals, contrast agents,
drugs, biologicals, and
radiopharmaceuticals that function as
supplies when used in a diagnostic test
or procedure, and drugs and biologicals
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that function as supplies when used in
a surgical procedure) that will be
continuing on pass-through payment
status in CY 2018, we estimated the
pass-through payment amount as the
difference between ASP+6 percent and
the payment rate for nonpass-through
drugs and biologicals that will be
separately paid at ASP+6 percent,
which is zero for this group of drugs.
Because payment for policy-packaged
drugs and biologicals is packaged if the
product was not paid separately due to
its pass-through payment status, we are
proposing to include in the CY 2018
pass-through estimate the difference
between payment for the policypackaged drug or biological at ASP+6
percent (or WAC+6 percent, or 95
percent of AWP, if ASP or WAC
information is not available) and the
policy-packaged drug APC offset
amount, if we determine that the policypackaged drug or biological approved
for pass-through payment resembles a
predecessor drug or biological already
included in the costs of the APCs that
are associated with the drug receiving
pass-through payment. For this
proposed rule, using the proposed
methodology described above, we
calculated a CY 2018 proposed
spending estimate for this first group of
drugs and biologicals of approximately
$7.7 million.
To estimate proposed CY 2018 passthrough spending for drugs and
biologicals in the second group (that is,
drugs and biologicals that we knew at
the time of development of this
proposed rule were newly eligible for
pass-through payment in CY 2018,
additional drugs and biologicals that we
estimated could be approved for passthrough status subsequent to the
development of the proposed rule and
before January 1, 2017, and projections
for new drugs and biologicals that could
be initially eligible for pass-through
payment in the second through fourth
quarters of CY 2018), we are proposing
to use utilization estimates from passthrough applicants, pharmaceutical
industry data, clinical information,
recent trends in the per unit ASPs of
hospital outpatient drugs, and projected
annual changes in service volume and
intensity as our basis for making the CY
2018 pass-through payment estimate.
We also are proposing to consider the
most recent OPPS experience in
approving new pass-through drugs and
biologicals. Using our proposed
methodology for estimating CY 2018
pass-through payments for this second
group of drugs, we calculated a
proposed spending estimate for this
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second group of drugs and biologicals of
approximately $8.5 million.
In summary, in accordance with the
methodology described earlier in this
section, for this proposed rule, we
estimate that total pass-through
spending for the device categories and
the drugs and biologicals that are
continuing to receive pass-through
payment in CY 2018 and those device
categories, drugs, and biologicals that
first become eligible for pass-through
payment during CY 2018 is
approximately $26.2 million
(approximately $10 million for device
categories and approximately $16.2
million for drugs and biologicals),
which represents 0.24 percent of total
projected OPPS payments for CY 2018.
Therefore, we estimate that passthrough spending in CY 2018 will not
amount to 2.0 percent of total projected
OPPS CY 2018 program spending.
VII. Proposed OPPS Payment for
Hospital Outpatient Visits and Critical
Care Services
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As we did in the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79678), for CY 2018, we are proposing
to continue with and not make any
changes to our current clinic and
emergency department (ED) hospital
outpatient visits payment policies. For a
description of the current clinic and ED
hospital outpatient visits policies, we
refer readers to the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70448). We also are proposing to
continue with and not propose any
change to our payment policy for
critical care services for CY 2018. For a
description of the current payment
policy for critical care services, we refer
readers to the CY 2016 OPPS/ASC final
rule with comment period (80 FR
70449), and for the history of the
payment policy for critical care services,
we refer readers to the CY 2014 OPPS/
ASC final rule with comment period (78
FR 75043). In this proposed rule, we are
seeking public comments on any
changes to these codes that we should
consider for future rulemaking cycles.
We encourage those parties who
comment to provide the data and
analysis necessary to justify any
suggested changes.
VIII. Proposed Payment for Partial
Hospitalization Services
A. Background
A partial hospitalization program
(PHP) is an intensive outpatient
program of psychiatric services
provided as an alternative to inpatient
psychiatric care for individuals who
have an acute mental illness, which
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includes, but is not limited to,
conditions such as depression,
schizophrenia, and substance use
disorders. Section 1861(ff)(1) of the Act
defines partial hospitalization services
as the items and services described in
paragraph (2) prescribed by a physician
and provided under a program
described in paragraph (3) under the
supervision of a physician pursuant to
an individualized, written plan of
treatment established and periodically
reviewed by a physician (in
consultation with appropriate staff
participating in such program), which
sets forth the physician’s diagnosis, the
type, amount, frequency, and duration
of the items and services provided
under the plan, and the goals for
treatment under the plan. Section
1861(ff)(2) of the Act describes the items
and services included in partial
hospitalization services. Section
1861(ff)(3)(A) of the Act specifies that a
PHP is a program furnished by a
hospital to its outpatients or by a
community mental health center
(CMHC), as a distinct and organized
intensive ambulatory treatment service,
offering less than 24-hour-daily care, in
a location other than an individual’s
home or inpatient or residential setting.
Section 1861(ff)(3)(B) of the Act defines
a CMHC for purposes of this benefit.
Section 1833(t)(1)(B)(i) of the Act
provides the Secretary with the
authority to designate the OPD services
to be covered under the OPPS. The
Medicare regulations that implement
this provision specify, at 42 CFR 419.21,
that payments under the OPPS will be
made for partial hospitalization services
furnished by CMHCs as well as
Medicare Part B services furnished to
hospital outpatients designated by the
Secretary, which include partial
hospitalization services (65 FR 18444
through 18445).
Section 1833(t)(2)(C) of the Act
requires the Secretary to establish
relative payment weights for covered
OPD services (and any groups of such
services described in section
1833(t)(2)(B) of the Act) based on
median (or, at the election of the
Secretary, mean) hospital costs using
data on claims from 1996 and data from
the most recent available cost reports. In
pertinent part, section 1833(t)(2)(B) of
the Act provides that the Secretary may
establish groups of covered OPD
services, within a classification system
developed by the Secretary for covered
OPD services, so that services classified
within each group are comparable
clinically and with respect to the use of
resources. In accordance with these
provisions, we have developed the PHP
APCs. Because a day of care is the unit
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that defines the structure and
scheduling of partial hospitalization
services, we established a per diem
payment methodology for the PHP
APCs, effective for services furnished on
or after July 1, 2000 (65 FR 18452
through 18455). Under this
methodology, the median per diem costs
were used to calculate the relative
payment weights for the PHP APCs.
Section 1833(t)(9)(A) of the Act requires
the Secretary to review, not less often
than annually, and revise the groups,
the relative payment weights, and the
wage and other adjustments described
in section 1833(t)(2) of the Act to take
into account changes in medical
practice, changes in technology, the
addition of new services, new cost data,
and other relevant information and
factors.
We began efforts to strengthen the
PHP benefit through extensive data
analysis, along with policy and payment
changes finalized in the CY 2008 OPPS/
ASC final rule with comment period (72
FR 66670 through 66676). In that final
rule, we made two refinements to the
methodology for computing the PHP
median: The first remapped 10 revenue
codes that are common among hospitalbased PHP claims to the most
appropriate cost centers; and the second
refined our methodology for computing
the PHP median per diem cost by
computing a separate per diem cost for
each day rather than for each bill.
In CY 2009, we implemented several
regulatory, policy, and payment
changes, including a two-tiered
payment approach for partial
hospitalization services under which we
paid one amount for days with 3
services under PHP APC 0172 (Level 1
Partial Hospitalization) and a higher
amount for days with 4 or more services
under PHP APC 0173 (Level 2 Partial
Hospitalization) (73 FR 68688 through
68693). We also finalized our policy to
deny payment for any PHP claims
submitted for days when fewer than 3
units of therapeutic services are
provided (73 FR 68694). Furthermore,
for CY 2009, we revised the regulations
at 42 CFR 410.43 to codify existing basic
PHP patient eligibility criteria and to
add a reference to current physician
certification requirements under 42 CFR
424.24 to conform our regulations to our
longstanding policy (73 FR 68694
through 68695). We also revised the
partial hospitalization benefit to include
several coding updates (73 FR 68695
through 68697).
For CY 2010, we retained the twotiered payment approach for partial
hospitalization services and used only
hospital-based PHP data in computing
the PHP APC per diem costs, upon
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which PHP APC per diem payment rates
are based. We used only hospital-based
PHP data because we were concerned
about further reducing both PHP APC
per diem payment rates without
knowing the impact of the policy and
payment changes we made in CY 2009.
Because of the 2-year lag between data
collection and rulemaking, the changes
we made in CY 2009 were reflected for
the first time in the claims data that we
used to determine payment rates for the
CY 2011 rulemaking (74 FR 60556
through 60559).
In the CY 2011 OPPS/ASC final rule
with comment period (75 FR 71994), we
established four separate PHP APC per
diem payment rates: Two for CMHCs
(APC 0172 (for Level 1 services) and
APC 0173 (for Level 2 services)) and two
for hospital-based PHPs (APC 0175 (for
Level 1 services) and 0176 (for Level 2
services)), based on each provider type’s
own unique data. For CY 2011, we also
instituted a 2-year transition period for
CMHCs to the CMHC APC per diem
payment rates based solely on CMHC
data. Under the transition methodology,
CMHC APCs Level 1 and Level 2 per
diem costs were calculated by taking 50
percent of the difference between the
CY 2010 final hospital-based PHP
median costs and the CY 2011 final
CMHC median costs and then adding
that number to the CY 2011 final CMHC
median costs. A 2-year transition under
this methodology moved us in the
direction of our goal, which is to pay
appropriately for partial hospitalization
services based on each provider type’s
data, while at the same time allowing
providers time to adjust their business
operations and protect access to care for
Medicare beneficiaries. We also stated
that we would review and analyze the
data during the CY 2012 rulemaking
cycle and, based on these analyses, we
might further refine the payment
mechanism. We refer readers to section
X.B. of the CY 2011 OPPS/ASC final
rule with comment period (75 FR 71991
through 71994) for a full discussion.
In addition, in accordance with
section 1301(b) of the Health Care and
Education Reconciliation Act of 2010
(HCERA 2010), we amended the
description of a PHP in our regulations
to specify that a PHP must be a distinct
and organized intensive ambulatory
treatment program offering less than 24hour daily care other than in an
individual’s home or in an inpatient or
residential setting. In accordance with
section 1301(a) of HCERA 2010, we
revised the definition of a CMHC in the
regulations to conform to the revised
definition now set forth under section
1861(ff)(3)(B) of the Act (75 FR 71990).
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For CY 2012, as discussed in the CY
2012 OPPS/ASC final rule with
comment period (76 FR 74348 through
74352), we determined the relative
payment weights for partial
hospitalization services provided by
CMHCs based on data derived solely
from CMHCs and the relative payment
weights for partial hospitalization
services provided by hospital-based
PHPs based exclusively on hospital
data.
In the CY 2013 OPPS/ASC final rule
with comment period, we finalized our
proposal to base the relative payment
weights that underpin the OPPS APCs,
including the four PHP APCs (APCs
0172, 0173, 0175, and 0176), on
geometric mean costs rather than on the
median costs. We established these four
PHP APC per diem payment rates based
on geometric mean cost levels
calculated using the most recent claims
and cost data for each provider type. For
a detailed discussion on this policy, we
refer readers to the CY 2013 OPPS/ASC
final rule with comment period (77 FR
68406 through 68412).
In the CY 2014 OPPS/ASC proposed
rule (78 FR 43621 through 43622), we
solicited comments on possible future
initiatives that may help to ensure the
long-term stability of PHPs and further
improve the accuracy of payment for
PHP services, but proposed no changes.
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75050
through 75053), we summarized the
comments received on those possible
future initiatives. We also continued to
apply our established policies to
calculate the four PHP APC per diem
payment rates based on geometric mean
per diem costs using the most recent
claims data for each provider type. For
a detailed discussion on this policy, we
refer readers to the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75047 through 75050).
In the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66902
through 66908), we continued to apply
our established policies to calculate the
four PHP APC per diem payment rates
based on PHP APC geometric mean per
diem costs, using the most recent claims
and cost data for each provider type.
In the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70455
through 70465), we described our
extensive analysis of the claims and cost
data and ratesetting methodology. We
found aberrant data from some hospitalbased PHP providers that were not
captured using the existing OPPS ±3
standard deviation trims for extreme
CCRs and excessive CMHC charges
resulting in CMHC geometric mean
costs per day that were approximately
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the same as or more than the daily
payment for inpatient psychiatric
facility services. Consequently, we
implemented a trim to remove hospitalbased PHP service days that use a CCR
that was greater than 5 (CCR>5) to
calculate costs for at least one of their
component services, and a trim on
CMHCs with a geometric mean cost per
day that is above or below 2 (±2)
standard deviations from the mean. We
stated in the CY 2016 OPPS/ASC final
rule with comment period (80 FR
70456) that, without using a trimming
process, the data from these providers
would inappropriately skew the
geometric mean per diem cost for Level
2 CMHC services.
In addition, in the CY 2016 OPPS/
ASC final rule with comment period (80
FR 70459 through 70460), we corrected
a cost inversion that occurred in the
final rule data with respect to hospitalbased PHP providers. We corrected the
cost inversion with an equitable
adjustment to the actual geometric mean
per diem costs by increasing the Level
2 hospital-based PHP APC geometric
mean per diem costs and decreasing the
Level 1 hospital-based PHP APC
geometric mean per diem costs by the
same factor, to result in a percentage
difference equal to the average percent
difference between the hospital-based
Level 1 PHP APC and the Level 2 PHP
APC for partial hospitalization services
from CY 2013 through CY 2015.
Finally, we renumbered the PHP
APCs, which were previously 0172,
0173, 0175, and 0176, to 5851, 5852,
5861, and 5862, respectively. For a
detailed discussion of the PHP
ratesetting process, we refer readers to
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70462 through
70467).
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79687
through 79691), we continued to apply
our established policies to calculate the
PHP APC per diem payment rates based
on geometric mean per diem costs using
the most recent claims and cost data for
each provider type. However, we
finalized a policy to combine the Level
1 and Level 2 PHP APCs for CMHCs and
to combine the Level 1 and Level 2
APCs for hospital-based PHPs because
we believed this would best reflect
actual geometric mean per diem costs
going forward, provide more predictable
per diem costs, particularly given the
small number of CMHCs, and generate
more appropriate payments for these
services, for example by avoiding the
cost inversions for hospital-based PHPs
addressed in the CY 2016 and CY 2017
OPPS/ASC final rules with comment
period (80 FR 70459 and 81 FR 79682).
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We implemented an 8-percent outlier
cap for CMHCs to mitigate potential
outlier billing vulnerabilities by limiting
the impact of inflated CMHC charges on
outlier payments. We will continue to
monitor the trends in outlier payments
and consider policy adjustments as
necessary.
For a comprehensive description on
the background of PHP payment policy,
we refer readers to the CY 2016 and CY
2017 OPPS/ASC final rules with
comment period (80 FR 70453 through
70455 and 81 FR 79678 through 79680).
B. Proposed PHP APC Update for CY
2018
1. Proposed PHP APC Geometric Mean
Per Diem Costs
For CY 2018, we are proposing to
continue to apply our established
policies to calculate the PHP APC per
diem payment rates based on geometric
mean per diem costs using the most
recent claims and cost data for each
provider type. Specifically, we are
proposing to continue to use CMHC
APC 5853 (Partial Hospitalization (3 or
More Services Per Day)) and hospitalbased PHP APC 5863 (Partial
Hospitalization (3 or More Services Per
Day)). We would continue to calculate
the geometric mean per diem costs for
CY 2018 for APC 5853 for CMHCs using
only CY 2016 CMHC claims data and
the most recent CMHC cost data, and
the CY 2018 geometric mean per diem
costs for APC 5863 for hospital-based
PHPs using only CY 2016 hospital-based
PHP claims data and the most recent
hospital cost data.
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2. Development of the Proposed PHP
APC Geometric Mean Per Diem Costs
For CY 2018 and subsequent years,
we are proposing to follow the PHP
ratesetting methodology described in
section VIII.B.2. of the CY 2016 OPPS/
ASC final rule with comment period (80
FR 70462 through 70466) to determine
the PHP APCs’ proposed geometric
mean per diem costs and to calculate
the proposed payment rates for APCs
5853 and 5863, incorporating the
modifications made in our CY 2017
OPPS/ASC final rule with comment
period. As discussed in section VIII.B.1.
of the CY 2017 OPPS/ASC final rule
with comment period, the proposed
geometric mean per diem cost for
hospital-based PHP APC 5863 would be
based upon actual hospital-based PHP
claims and costs for PHP service days
providing 3 or more services. Similarly,
the proposed geometric mean per diem
cost for CMHC APC 5853 would be
based upon actual CMHC claims and
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costs for CMHC service days providing
3 or more services.
The CMHC or hospital-based PHP
APC per diem costs are the providertype specific costs derived from the
most recent claims and cost data. The
CMHC or hospital-based PHP APC per
diem payment rates are the national
unadjusted payment rates calculated
from the CMHC or hospital-based PHP
APC per diem costs, after applying the
OPPS budget neutrality adjustments
described in section II.A.4. of this
proposed rule.
We are proposing to apply our
established methodologies in
developing the proposed geometric
mean per diem costs and payment rates,
including the application of a ±2
standard deviation trim on costs per day
for CMHCs and a CCR>5 hospital
service day trim for hospital-based PHP
providers. These two trims were
finalized in our CY 2016 OPPS/ASC
final rule with comment period (80 FR
70455 through 70462) for CY 2016 and
subsequent years.
a. CMHC Data Preparation: Data Trims,
Exclusions, and CCR Adjustments
For this proposed rule, prior to
calculating the proposed geometric
mean per diem cost for CMHC APC
5853, we prepared the data by first
applying trims and data exclusions, and
assessing CCRs as described in the CY
2016 OPPS/ASC final rule with
comment period (80 FR 70463 through
70465), so that ratesetting is not skewed
by providers with extreme data. Before
any trims or exclusions, there were 47
CMHCs in the data. Under the ±2
standard deviation trim policy, we
excluded any data from a CMHC for
ratesetting purposes when the CMHC’s
geometric mean cost per day is more
than ±2 standard deviations from the
geometric mean cost per day for all
CMHCs. By applying this trim for CY
2018 ratesetting, in this proposed rule,
4 CMHCs with geometric mean per diem
costs per day below the trim’s lower
limit of $49.33 and 2 CMHCs above the
trim’s upper limit of $361.02 were
excluded from the proposed ratesetting
for CY 2018. This standard deviation
trim removed 6 providers from
ratesetting whose data would have
skewed the calculated proposed
geometric mean per diem cost.
In accordance with our PHP
ratesetting methodology, in this
proposed rule, we also removed service
days with no wage index values because
we use the wage index data to remove
the effects of geographic variation in
costs prior to APC geometric mean per
diem cost calculation (80 FR 70465). In
this CY 2018 proposed rule ratesetting,
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33639
two CMHCs were excluded because they
were missing wage index data for all of
their service days.
In addition to our trims and data
exclusions, before determining the PHP
APC geometric mean per diem costs, we
also assess CCRs (80 FR 70463). Our
longstanding PHP OPPS ratesetting
methodology defaults any CMHC CCR>1
to the statewide hospital ancillary CCR
(80 FR 70457). In our CY 2018 proposed
rule ratesetting, we identified one
CMHC that had a CCR>1. This CMHC’s
CCR was 1.002, and it was defaulted to
its appropriate statewide hospital
ancillary CCR for CY 2018 ratesetting
purposes.
In summary, these data preparation
steps adjusted the CCR for 1 CMHC and
excluded 8 CMHCs, resulting in the
inclusion of a total of 39 CMHCs in our
CY 2018 proposed rule ratesetting
modeling. The trims removed 1,733
CMHC claims from the 14,400 total
CMHC claims, resulting in 12,667
CMHC claims used in ratesetting. We
believe that excluding providers with
extremely low or high geometric mean
costs per day or extremely low or high
CCRs protects CMHCs from having that
data inappropriately skew the
calculation of the CMHC APC geometric
mean per diem cost. Moreover, we
believe that these trims, exclusions, and
adjustments help prevent inappropriate
fluctuations in the PHP APC geometric
mean per diem payment rates.
After applying all of the above trims,
exclusions, or adjustments, the
proposed CY 2018 geometric mean per
diem cost for all CMHCs for providing
3 or more services per day (APC 5853)
is $128.81.
b. Hospital-Based PHP Data Preparation:
Data Trims and Exclusions
For this CY 2018 proposed rule, we
followed a data preparation process for
hospital-based PHP providers that is
similar to that used for CMHCs by
applying trims and data exclusions as
described in the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70463 through 70465) so that our
ratesetting is not skewed by providers
with extreme data. Before any trimming
or exclusions, in this proposed rule
there were 420 hospital-based PHP
providers in the claims data. For
hospital-based PHP providers, we
applied a trim on hospital service days
when the CCR was greater than 5 at the
cost center level. The CCR>5 hospital
service day trim removed hospital-based
PHP service days that use a CCR>5 to
calculate costs for at least one of their
component services. Unlike the ±2
standard deviation trim, which
excluded CMHC providers that failed
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the trim, the CCR>5 trim excluded any
hospital-based PHP service day where
any of the services provided on that day
are associated with a CCR>5. Applying
this trim removed service days from 4
hospital-based PHP providers with
CCRs ranging from 6.6494 to 17.4803
from our proposed rule ratesetting.
However, all of the service days for
these 4 hospital-based PHP providers
had at least one service associated with
a CCR>5, so the trim removed these
providers entirely from our proposed
rule ratesetting. In addition, 1 hospitalbased PHP was removed for missing
wage index data, and 3 hospital-based
PHPs were removed by the OPPS ±3
standard deviation trim on costs per
day.
Finally, in our proposed rule
ratesetting, we excluded 19 hospitalbased PHP providers that reported zero
daily costs on their claims, in
accordance with established PHP
ratesetting policy (80 FR 70465).
Therefore, we excluded a total of 27
hospital-based PHP providers, resulting
in 393 hospital-based PHP providers in
the data used for proposed rule
ratesetting. After completing these data
preparation steps, we calculated the
proposed geometric mean per diem cost
for hospital-based PHP APC 5863 for
hospital-based PHP services. The
proposed geometric mean per diem cost
for hospital-based PHP providers that
provide 3 or more services per service
day (hospital-based PHP APC 5863) is
$213.60.
The proposed CY 2018 PHP APC
geometric mean per diem costs for the
CMHC and hospital-based PHP APCs
are shown in Table 26 of this proposed
rule. The proposed PHP APC payment
rates are included in Addendum A to
this proposed rule (which is available
via the Internet on the CMS Web site).
TABLE 26—CY 2018 PROPOSED PHP APC GEOMETRIC MEAN PER DIEM COSTS
Proposed
PHP APC
geometric
mean per
diem costs
CY 2018 APC
Group title
5853 ..........................................................
5863 ..........................................................
Partial Hospitalization (3 or more services per day) for CMHCs ................................
Partial Hospitalization (3 or more services per day) for hospital-based PHPs ...........
3. PHP Service Utilization Updates
In the CY 2016 OPPS/ASC final rule
with comment, we expressed concern
over the low frequency of individual
therapy provided to beneficiaries (81 FR
79684 through 79685). The CY 2016
claims data used for this CY 2018
proposed rule revealed some increases
in the provision of individual therapy.
In CY 2016, hospital-based PHPs
provided individual therapy on 4.7
percent of days with only 3 services and
5.6 percent of days with 4 or more
services (compared to 4.0 percent and
6.2 percent, respectively, in CY 2015).
Similarly, in CY 2016, CMHCs provided
individual therapy on 9.0 percent of
days with only 3 services provided and
4.9 percent of days with 4 or more
services provided (compared to 7.9
percent and 4.4 percent, respectively, in
CY 2015 claims).
We are aware that our single-tier
payment policy may influence a change
in service provision because providers
are able to obtain payment that is
heavily weighted to the cost of
providing 4 or more services when they
provide only 3 services. We are
$128.81
213.60
interested in ensuring that providers
furnish an appropriate number of
services to beneficiaries enrolled in
PHPs. Therefore, with the CY 2017
implementation of APC 5853 and APC
5863 for providing 3 or more PHP
services per day, we are continuing to
monitor utilization of days with only 3
PHP services.
For this CY 2018 proposed rule, we
used CY 2016 claims. The CY 2016
claims data showed that PHPs
maintained an appropriately low
utilization of 3 service days compared to
CY 2015:
TABLE 27—PERCENTAGE OF PHP DAYS BY SERVICE UNIT FREQUENCY
CY 2015
%
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CMHCs:
Percent of Days with
Percent of Days with
Percent of Days with
Hospital-based PHPs:
Percent of Days with
Percent of Days with
Percent of Days with
Change
%
3 services ...........................................................................................
4 services ...........................................................................................
5 or more services .............................................................................
4.7
62.9
32.4
4.1
72.6
23.3
¥0.6
9.7
¥9.1
3 services ...........................................................................................
4 services ...........................................................................................
5 or more services .............................................................................
12.4
69.8
17.8
10.2
67.5
22.3
¥2.2
¥2.3
4.5
As we noted in the CY 2017 OPPS/
ASC final rule with comment period (81
FR 79685), we will continue to monitor
the provision of days with only 3
services, particularly now that the
combined PHP APCs 5853 and 5863 are
in place for providing 3 or more services
per day to CMHCs and hospital-based
PHPs, respectively.
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%
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It is important to reiterate our
expectation that days with only 3
services are meant to be an exception
and not the typical PHP day. In the CY
2009 OPPS/ASC final rule we clearly
stated that we consider the acceptable
minimum units of PHP services required
in a PHP day to be 3 and explained that
it was never our intention that 3 units
of service represent the number of
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services to be provided in a typical PHP
day. PHP is furnished in lieu of
inpatient psychiatric hospitalization
and is intended to be more intensive
than a half-day program. We further
indicated that a typical PHP day should
include 5 to 6 hours of services (73 FR
68687 through 68694). We explained
that days with only 3 units of services
may be appropriate to bill in certain
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limited circumstances, such as when a
patient might need to leave early for a
medical appointment and, therefore,
would be unable to complete a full day
of PHP treatment. At that time, we noted
that if a PHP were to only provide days
with 3 services, it would be difficult for
patients to meet the eligibility
requirement in 42 CFR 410.43, that
patients must require a minimum of 20
hours per week of therapeutic services
as evidenced in their plan of care (73 FR
68689).
4. Minimum Service Requirement: 20
Hours per Week
In the CY 2009 OPPS/ASC final rule
with comment period, we codified
patient eligibility criteria to reflect the
intensive nature of a PHP. At that time,
we noted that many of the patient
eligibility criteria had been longstanding
policy requirements that did not reflect
a change in policy. The added
regulatory text was intended to
strengthen and enhance the integrity of
the PHP benefit (73 FR 68694). We
further stated that because PHP is
provided in lieu of inpatient care, it
should be a highly structured and
clinically intensive program. Our goal
was to improve the level of service
furnished in a day of PHP, while also
ensuring that the appropriate
population utilizes the PHP benefit (73
FR 68695).
When we codified these eligibility
criteria, we acknowledged commenters’
concerns related to the eligibility
requirement that a patient must require
a minimum of 20 hours per week of
therapeutic services as evidenced in
their plan of care. For example, we
recognized commenters’ concerns that it
may sometimes be difficult for patients
to receive 20 hours per week of
therapeutic services, such as when
transitioning into or out of a PHP
program (73 FR 68695). Therefore, to
permit flexibility in treating PHP
patients, we required a minimum of 20
hours per week of therapeutic services,
with the understanding that patients
may not always meet this minimum,
such as during the week of admission
and the week of discharge, and qualified
the requirement by adding ‘‘as
evidenced in their plan of care.’’ This
eligibility requirement only addresses
the minimum amount of PHP services
beneficiaries must require as evidenced
in their plan of care. It does not address
whether or not beneficiaries receive a
particular number of therapeutic
services per week. However, we have
noted in multiple prior OPPS/ASC final
rules with comment periods that a
typical PHP day would include 5 to 6
hours per day of PHP services (70 FR
68548, 71 FR 67999, 72 FR 66671, and
73 FR 68687).
Most recently, we discussed the 20
hours of services requirement in the CY
2017 rulemaking when we reminded
providers that our regulations at
§§ 410.43(a)(3) and (c)(1) continue to
require that PHP beneficiaries must
require a minimum of 20 hours per
week of therapeutic services as
evidenced in their plan of care, and that
PHP services must be furnished in
accordance with a physician
certification and the beneficiary’s plan
of care reflecting that need.
We analyzed CY 2015 and CY 2016
PHP claims data to assess the intensity
of PHP services provided, using PHPallowable HCPCS codes and provider
33641
and service date information. To
calculate the number of hours of PHP
services provided to each beneficiary
each day, we assumed each unit of
service equaled one hour of time. Each
service day was then mapped to its
Sunday-through-Saturday calendar
week, and the number of PHP hours per
week was calculated for each
beneficiary. Next, the service weeks for
each beneficiary were sorted
chronologically and assessed: The first
service week in a continuous series of
service weeks was flagged as an
‘‘Admission’’ week, and the last service
week in a continuous series of service
weeks was flagged as a ‘‘Discharge’’
week. We removed from the analysis the
admission and discharge weeks for each
beneficiary to permit us to assess the
intensity of services provided to
beneficiaries fully engaged in PHPs (that
is, those in ‘‘nontransitional’’ weeks).
We then calculated the total number of
service weeks and the number of service
weeks with at least 20 PHP hours for
each beneficiary. These two values were
then used to determine the percentage
of nontransitional service weeks that
met the 20-hour PHP threshold for each
beneficiary.
We found that a majority of PHP
patients did not receive at least 20 hours
of PHP services per week. Just over half
of PHP beneficiaries received 20 hours
or more of services in 50 percent or
more of nontransitional weeks. In CY
2016 claims data, only 16.4 percent of
beneficiaries in CMHCs and 34.8
percent of beneficiaries in hospitalbased PHPs received at least 20 hours of
PHP services in 100 percent of
nontransitional weeks.
TABLE 28—NUMBER AND PERCENTAGE OF BENEFICIARIES RECEIVING AT LEAST 20 HOURS OF PHP SERVICES PER WEEK
[CY 2015 Through CY 2016]
Beneficiaries receiving 20 or more hours of PHP services per nontransitional week *
Number/Percentage of CMHC Beneficiaries ................
Number/Percentage of Hospital-based PHP Beneficiaries.
In
In
In
In
50% or more of weeks .............................................
100% of weeks .........................................................
50% or more of weeks .............................................
100% of weeks .........................................................
CY 2015
(%)
1,205/53.1
319/14.1
8,610/51.0
5,003/29.6
CY 2016
(%)
1,016/57.3
291/16.4
8,333/56.7
5,115/34.8
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* Weeks are trimmed to exclude admission and discharge weeks based on a Sunday through Saturday week.
Nontransitional weeks are weeks that are not admission or discharge weeks.
Overall, the data suggest that some
PHPs may not provide the intensive
services that eligible beneficiaries
actually need. We are concerned about
these findings, and encourage PHPs to
review their admission practices and
ensure they are providing the services
beneficiaries need.
Given these concerns, in the CY 2017
OPPS/ASC final rule with comment
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period, we solicited public comments
on potential future editing of PHP
claims for the 20 hours per week
minimum eligibility requirement and on
strengthening the tie between a
beneficiary’s receipt of 20 hours per
week of PHP services and payment for
those services (81 FR 79686). We
received nine comments in response to
our solicitation. Overall, commenters
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requested that we monitor data for a
year before implementing any payment
edits. A number of commenters
suggested that if CMS chose to edit PHP
claims for the 20-hour minimum
requirement, CMS should: (1) Provide
exceptions to the editing; (2) not require
weekly billing; and (3) implement the
edits in a fashion that is not
administratively burdensome.
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A number of commenters were not
supportive of editing that would lead to
payment denial. A few commenters
indicated that attending a PHP for 20
hours per week is not a condition of
payment. Several commenters suggested
that editing would be premature until
CMS could analyze monitoring data,
consider the effect of the newly
implemented single APC payment tier,
and seek engagement from the PHP
provider community. Some commenters
also noted that the current PHP HCPCS
codes may require some refinement to
fully enable providers to record service
times.
Several commenters expressed
concerns that edits to deny payment for
weeks with fewer than 20 hours of PHP
services could reduce access to the PHP
benefit. Several commenters suggested
that noncompliance with a 20-hour
requirement could be addressed through
medical review, and suggested that
PHPs’ documenting the reasons for
absences in the medical record should
be sufficient. Another commenter
questioned the necessity of an edit for
occasional beneficiary absences beyond
the PHP’s control. We will consider
these comments as we evaluate our
options for possible future editing.
In addition, in this CY 2018 OPPS/
ASC proposed rule, we are soliciting
public comments on the advisability of
applying a payment requirement
conditioned on a beneficiary’s receipt of
a minimum of 20 hours of therapeutic
services per week. We also are soliciting
public comments addressing the need
for exceptions to such a policy.
Specifically, we want to know and
understand the type of occurrences or
circumstances that would cause a PHP
patient to not receive at least 20 hours
of PHP services per week, particularly
where payment would still be
appropriate.
Our goal is for PHP providers to
continue to have flexibility in providing
PHP services. However, we must ensure
that beneficiaries enrolled in PHPs are
legitimately eligible for PHP services
and receive appropriately intensive
treatment. As we seek to understand the
usage of PHP services by Medicare
patients, we also will continue to
monitor the intensity of services
provided on a weekly basis, and look
forward to reviewing stakeholder
comments when considering options to
address situations where an
appropriately intensive level of service
is not provided.
C. Proposed Outlier Policy for CMHCs
As discussed in the CY 2004 OPPS
final rule with comment period (68 FR
63469 through 63470), after examining
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the costs, charges, and outlier payments
for CMHCs, we concluded that
establishing a separate OPPS outlier
policy for CMHCs would be appropriate.
Beginning in CY 2004, we created a
separate outlier policy specific to the
estimated costs and OPPS payments
provided to CMHCs. We designated a
portion of the estimated OPPS outlier
threshold specifically for CMHCs,
consistent with the percentage of
projected payments to CMHCs under the
OPPS each year, excluding outlier
payments, and established a separate
outlier threshold for CMHCs.
The separate outlier threshold for
CMHCs resulted in $1.8 million in
outlier payments to CMHCs in CY 2004,
and $0.5 million in outlier payments to
CMHCs in CY 2005. In contrast, in CY
2003, more than $30 million was paid
to CMHCs in outlier payments. We note
that, in the CY 2009 OPPS/ASC final
rule with comment period, we also
established an outlier reconciliation
policy to address charging aberrations
related to OPPS outlier payments (73 FR
68594 through 68599). In CY 2017, we
implemented a CMHC outlier payment
cap to be applied at the provider level,
such that in any given year, an
individual CMHC will receive no more
than a set percentage of its CMHC total
per diem payments in outlier payments
(81 FR 79692 through 79695). This
outlier payment cap only affects
CMHCs, and does not affect other
provider types. This outlier payment
cap is in addition to and separate from
the current outlier policy and
reconciliation policy in effect. We
finalized the CMHC outlier payment cap
to be set at 8 percent of the CMHC’s
total per diem payments (81 FR 79694
through 79695).
In this CY 2018 OPPS/ASC proposed
rule, we are proposing to continue to
designate a portion of the estimated 1.0
percent hospital outpatient outlier
threshold specifically for CMHCs,
consistent with the percentage of
projected payments to CMHCs under the
OPPS in CY 2018, excluding outlier
payments. This policy results in CMHC
outliers being paid under limited
circumstances associated with costs
from complex cases, rather than as a
substitute for the standard PHP payment
to CMHCs. CMHCs are projected to
receive 0.02 percent of total hospital
outpatient payments in CY 2018,
excluding outlier payments. Therefore,
we are proposing to designate
approximately 0.0027 percent of the
estimated 1.0 percent hospital
outpatient outlier threshold for CMHCs.
As we do for each rulemaking cycle, we
have updated the CMHC CCRs and
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claims data used to model the PHP
payments rates.
Based on our simulations of CMHC
payments for CY 2018, in this proposed
rule, we are proposing to continue to set
the cutoff point for outlier payments for
CY 2018 at 3.4 times the highest CMHC
APC payment rate implemented for that
calendar year, which for CY 2018 is the
payment rate for CMHC APC 5853. In
addition, we are proposing to continue
to apply the same outlier payment
percentage that applies to hospitals.
Therefore, for CY 2018, we are
proposing to continue to pay 50 percent
of CMHC APC geometric mean per diem
costs over the cutoff point. For example,
for CY 2018, if a CMHC’s cost for partial
hospitalization services paid under
CMHC APC 5853 exceeds 3.4 times the
proposed payment rate for CMHC APC
5853, the outlier payment would be
calculated as 50 percent of the amount
by which the cost exceeds 3.4 times the
payment rate for CMHC APC 5853.
In section II.G. of this proposed rule,
for the hospital outpatient outlier
payment policy, we are proposing to set
a fixed dollar threshold in addition to
an APC multiplier threshold. APC 5853
is the only APC for which CMHCs may
receive payment under the OPPS, and is
for providing a defined set of services
that are relatively low cost when
compared to other OPPS services. As
such, it is not necessary to also impose
a fixed dollar threshold on CMHCs.
Therefore, we are not proposing to set
a dollar threshold for CMHC outlier
payments.
In summary, we are proposing to
continue to calculate our CMHC outlier
threshold and CMHC outlier payments
according to our established policies.
IX. Proposed Procedures That Would
Be Paid Only as Inpatient Procedures
A. Background
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74352 through 74353) for
a full historical discussion of our
longstanding policies on how we
identify procedures that are typically
provided only in an inpatient setting
(referred to as the inpatient only (IPO)
list) and, therefore, will not be paid by
Medicare under the OPPS, and on the
criteria that we use to review the IPO
list each year to determine whether or
not any procedures should be removed
from the list. The complete proposed
list of codes that would be paid by
Medicare in CY 2018 as inpatient only
procedures (the proposed IPO list) is
included as Addendum E to this
proposed rule (which is available via
the Internet on the CMS Web site).
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B. Proposed Changes to the Inpatient
Only (IPO) List
In this proposed rule, for CY 2018, we
are proposing to use the same
methodology (described in the
November 15, 2004 final rule with
comment period (69 FR 65834)) of
reviewing the current list of procedures
on the IPO list to identify any
procedures that may be removed from
the list. We have established five criteria
that are part of this methodology. As
noted in the CY 2012 OPPS/ASC final
rule with comment period (76 FR
74353), we utilize these criteria when
reviewing procedures to determine
whether or not they should be removed
from the IPO list and assigned to an
APC group for payment under the OPPS
when provided in the hospital
outpatient setting. We note that a
procedure is not required to meet all of
the established criteria to be removed
from the IPO list. The criteria include
the following:
1. Most outpatient departments are
equipped to provide the services to the
Medicare population.
2. The simplest procedure described
by the code may be performed in most
outpatient departments.
3. The procedure is related to codes
that we have already removed from the
IPO list.
4. A determination is made that the
procedure is being performed in
numerous hospitals on an outpatient
basis.
5. A determination is made that the
procedure can be appropriately and
safely performed in an ASC, and is on
the list of approved ASC procedures or
has been proposed by us for addition to
the ASC list.
Using the above-listed criteria, we are
proposing to remove the procedures
described by the following codes from
the IPO list for CY 2018: CPT code
27447 (Arthroplasty, knee, condyle and
plateau; medical and lateral
compartments with or without patella
resurfacing (total knee arthroplasty))
and CPT code 55866 (Laparoscopy,
surgical prostatectomy, retropubic
radical, including nerve sparing,
includes robotic assistance, when
performed).
For a number of years, total knee
arthroplasty (TKA) has been a topic of
discussion for removal from the IPO list
with both stakeholder support and
opposition. Most recently, in the CY
2017 OPPS/ASC proposed rule (81 FR
45679 through 45681), we sought public
comments on the removal of the TKA
procedure from the IPO list from
interested parties, including
specifically: Medicare beneficiaries and
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advocate associations for Medicare
beneficiaries; orthopedic surgeons and
physician specialty societies that
represent orthopedic surgeons who
perform TKA procedures; hospitals and
hospital trade associations; and any
other interested stakeholders. In the
comment solicitation, we requested
stakeholder input on whether the TKA
procedure met the established criteria
used to identify procedures to remove
from the IPO list. We also requested
input regarding how to modify current
Medicare payment models that include
TKA, such as the Bundled Payments for
Care Improvement (BPCI) and the
Comprehensive Care for Joint
Replacement (CJR) initiatives, if the
procedure was removed from the IPO
list.
The public comments we received
were varied and nuanced. A number of
commenters believed that continued
refinements in the TKA surgical
procedure allowed it to be performed
safely on properly selected Medicare
beneficiaries in the outpatient setting. A
number of facilities indicated that they
were currently performing TKA
procedures on an outpatient basis in
both the HOPD and ASC on nonMedicare patients. Commenters who
supported removing the TKA procedure
from the IPO list also noted recent peerreviewed publications that reported on
investigations of the feasibility of
outpatient TKA with positive results;
that is, TKA outpatients did not
experience higher rates of complications
or readmissions in comparison to TKA
inpatients.
A minority of commenters (including
teaching hospital stakeholders and some
professional organizations representing
orthopedic surgeons) stated that the risk
of postsurgical complications was too
high for patients with the TKA
procedure performed in the outpatient
setting for the Medicare population and
noted that patients appropriate for the
TKA procedure performed on an
outpatient basis tend to be younger,
more active, have fewer complications,
and have more at home support than
most Medicare beneficiaries. These
commenters also believed there was
insufficient research on the TKA
procedure performed on an outpatient
basis to definitively claim that the
procedure could be safely performed in
the outpatient setting.
Some commenters noted that if the
TKA procedure was removed from the
IPO list, inpatient TKA cases should not
be subject to Recovery Audit Contractor
(RAC) review for appropriate site-ofservice. In addition, some commenters
expressed concerns about the effect that
removing the TKA procedure from the
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IPO list could have on the BPCI and CJR
Medicare payment models. We stated in
the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79699) that we
would consider all public comments
received in future policymaking.
We have reviewed the clinical
characteristics of the TKA procedure
and related evidence, including current
length-of-stay (LOS) data for inpatient
TKA procedures and peer-reviewed
literature related to outpatient TKA
procedures. We also have considered
input from the comment solicitation in
the CY 2017 OPPS/ASC final rule with
comment period and the professional
opinions of orthopedic surgeons and
CMS clinical advisors. In addition, we
have taken into account the
recommendation from the summer 2016
Advisory Panel on Hospital Outpatient
Payment (HOP Panel) meeting to
remove the TKA procedure from the IPO
list. Based on this information, we have
determined that the TKA procedure
would be an appropriate candidate for
removal from the IPO list. We expect
providers to carefully develop evidencebased patient selection criteria to
identify patients who are appropriate
candidates for an outpatient TKA
procedure as well as exclusionary
criteria that would disqualify a patient
from receiving an outpatient TKA
procedure. We believe that the subset of
Medicare beneficiaries who meet patient
selection criteria for performance of the
TKA procedure on an outpatient basis
may have the procedure performed
safely in the outpatient setting.
We believe that the TKA procedure
meets a number of criteria for removal
from the IPO list, including criteria 1, 2,
and 4. We are seeking comments on
whether the public believes that these
criteria are met and whether the TKA
procedure meets any other of the five
criteria stated in the beginning of this
section.
We are proposing that CPT code
27447 would be assigned to C–APC
5115 (Level 5 Musculoskeletal
Procedures) with status indicator ‘‘J1’’.
We also note, as stated in the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79697), that removal from
the IPO list does not require the covered
surgical procedures to be performed
only on an outpatient basis. Removal of
a procedure from the IPO list allows for
Medicare coverage and payment for the
procedure when it is furnished either in
an inpatient or outpatient hospital
setting. IPO list procedures must be
performed on an inpatient basis
(regardless of the expected length of the
hospital stay) in order to qualify for
Medicare payment, but procedures that
are not on the IPO list may still be
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covered and paid for by Medicare when
they are performed on individuals who
are inpatients. The decision regarding
the most appropriate care setting for a
given surgical procedure is a complex
medical judgment made by the
physician based on the beneficiary’s
individual clinical needs and
preferences and on the general coverage
rules requiring that any procedure be
reasonable and necessary. Therefore, if
we finalize our proposal to remove the
TKA procedure from the IPO list, we
would also prohibit Recovery Audit
Contractor (RAC) review for patient
status for TKA procedures performed in
the inpatient setting for a period of 2
years to allow time and experience for
these procedures under this setting. We
would not want hospitals to err on the
side of inappropriately performing the
procedure on an outpatient basis due to
concerns about the possibility of an
inpatient TKA claim being denied for
patient status. That is, given that this
surgical procedure would be newly
eligible for payment under either the
IPPS or the OPPS, RAC denial of a
hospital claim for patient status would
be prohibited. We note that contractor
reviews for issues other than patient
status as an inpatient or outpatient
would continue to be permitted,
including those for underlying medical
necessity.
We also are proposing to remove the
procedure described by CPT code 55866
from the IPO list for CY 2018. We are
proposing that CPT code 55866 would
be assigned to C–APC 5362 (Level 2
Laparoscopy & Related Services) with
status indicator ‘‘J1’’. After consulting
with stakeholders and our clinical
advisors regarding this procedure, we
believe that this procedure meets
criteria 1 and 2. We are seeking
comment on whether the public
believes that these criteria are met and
whether CPT code 55866 meets any
other of the five criteria stated in the
beginning of this section.
The procedures that we are proposing
to remove from the IPO list for CY 2018
and subsequent years, including the
HCPCS code, long descriptors, and the
proposed CY 2018 payment indicators,
are displayed in Table 29 below.
TABLE 29—PROPOSED PROCEDURES TO BE REMOVED FROM THE INPATIENT ONLY LIST FOR CY 2018
Proposed CY
2018 OPPS
APC
assignment
CY 2018 CPT code
CY 2018 long descriptor
27447 ...............................................
Arthroplasty, knee, condyle and plateau; medical and lateral compartments with or without patella resurfacing (total knee arthroplasty).
Laparoscopy, surgical prostatectomy, retropubic radical, including nerve
sparing, includes robotic assistance, when performed.
55866 ...............................................
We are inviting public comments on
our proposals to remove the procedures
described by CPT code 27447 and CPT
code 55866 from the IPO list beginning
in CY 2018. In addition, in section
XII.C.1.b. of this proposed rule, we are
soliciting public comments on whether
the TKA procedure meets the criteria to
be added to the list of ASC covered
surgical procedures.
The complete proposed list of codes
(the IPO list) that would be paid by
Medicare in CY 2018 as inpatient only
procedures is included as Addendum E
to this proposed rule (which is available
via the Internet on the CMS Web site).
C. Solicitation of Public Comments on
the Possible Removal of Partial Hip
Arthroplasty (PHA) and Total Hip
Arthroplasty (THA) Procedures From
the IPO List
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1. Background
Partial hip arthroplasty (PHA), CPT
code 27125 (Hemiarthroplasty, hip,
partial (eg, femoral stem prosthesis,
bipolar arthroplasty)), and total hip
arthroplasty (THA) or total hip
replacement, CPT code 27130
(Arthroplasty, acetabular and proximal
femoral prosthetic replacement (total
hip arthroplasty), with or without
autograft or allograft), have traditionally
been considered inpatient surgical
procedures. The procedures were placed
on the original IPO list in the CY 2001
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OPPS final rule (65 FR 18780). In 2000,
the primary factors that were used to
determine the assignment of a
procedure to the IPO list were as
follows: (1) The invasive nature of the
procedure; (2) the need for at least 24
hours of postoperative care; and (3) the
underlying physical condition of the
patient who would require the surgery
(65 FR 18455). In 2000, the geometric
mean average length of stay for the DRG
to which uncomplicated PHA and THA
procedures were assigned was 4.6 days,
and in 2016, the average length of stay
for current uncomplicated PHA and
THA procedures for the MS–DRG was
2.7 days.
In the CY 2017 OPPS/ASC proposed
rule, we solicited public comments on
the possible removal of total knee
arthroplasty (TKA) from the IPO list (81
FR 45679 through 45681). Included in
the public comments received related to
the removal of TKA from the IPO list
were several comments in support of
removal of THA from the IPO list as
well. Among those commenters
expressing support for removal of THA
from the IPO list were several surgeons
and other stakeholders who believed
that, given thorough preoperative
screening by medical teams with
significant experience and expertise
involving hip replacement procedures,
the THA procedure could be provided
on an outpatient basis for some
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Proposed CY
2018 OPPS
status
indicator
5115
J1
5362
J1
Medicare beneficiaries. These
commenters noted significant success
involving same day discharge for
patients who met the screening criteria
and whose experienced medical teams
were able to perform the procedure
early enough in the day for the patients
to achieve postoperative goals, allowing
home discharge by the end of the day.
The commenters believed that the
benefits of providing the THA
procedure on an outpatient basis will
lead to significant enhancements in
patient well-being, improved efficiency,
and cost savings to the Medicare
program, including shorter hospital
stays resulting in fewer medical
complications, improved results, and
enhanced patient satisfaction.
Recent innovations have enabled
surgeons to perform the PHA and THA
procedures on an outpatient basis on
non-Medicare patients (both in the
HOPD and in the ASC). These
innovations in PHA and THA care
include minimally invasive techniques,
improved perioperative anesthesia,
alternative postoperative pain
management, and expedited
rehabilitation protocols. Patients
undergoing minimally invasive surgical
procedures instead of open surgical
techniques generally benefit from a
shorter hospital stay. However, not all
patients are candidates for minimally
invasive PHA or THA. Commenters on
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the CY 2017 OPPS/ASC proposed rule
comment solicitation on the TKA
procedure have stated that benefits of
outpatient PHA and THA procedures
include a likelihood of fewer
complications, more rapid recovery,
increased patient satisfaction, recovery
at home with the assistance of family
members, and a likelihood of overall
improved outcomes. On the contrary,
unnecessary inpatient hospitalization
exposes patients to the risk of hospitalacquired conditions such as infections
and a host of other iatrogenic mishaps.
Like most surgical procedures, both
PHA and THA need to be tailored to the
individual patient’s needs. Patients with
a relatively low anesthesia risk and
without significant comorbidities who
have family members at home who can
assist them may likely be good
candidates for an outpatient PHA or
THA procedure. These patients may be
determined to also be able to tolerate
outpatient rehabilitation in either an
outpatient facility or at home
postsurgery. On the other hand, patients
with multiple medical comorbidities,
aside from their osteoarthritis, would
more likely require inpatient
hospitalization and possibly postacute
care in a skilled nursing facility or other
facility. Surgeons who have discussed
outpatient PHA and THA procedures in
public comments in response to our CY
2017 OPPS/ASC proposed rule
comment solicitation on the TKA
procedure have emphasized the
importance of careful patient selection
and strict protocols to optimize
outpatient hip replacement outcomes.
These protocols typically manage all
aspects of the patient’s care, including
the at-home preoperative and
postoperative environment, anesthesia,
pain management, and rehabilitation to
maximize rapid recovery, ambulation,
and performance of activities of daily
living.
We also note that not uncommonly
we receive questions from the public
about the IPO list that lead us to believe
that some members of the public may
misunderstand certain aspects of the
IPO list. Therefore, two important
principles of the IPO list must be
reiterated at the outset of this
discussion. First, just because a
procedure is not on the IPO list does not
mean that the procedure cannot be
performed on an inpatient basis. IPO list
procedures must be performed on an
inpatient basis (regardless of the
expected length of the hospital stay) in
order to qualify for Medicare payment,
but procedures that are not on the IPO
list can be and very often are performed
on individuals who are inpatients (as
well as individuals who are hospital
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outpatients and ASC patients). Second,
the IPO list status of a procedure has no
effect on the MPFS professional
payment for the procedure. Whether or
not a procedure is on the IPO list is not
in any way a factor in the MPFS
payment methodology.
2. Topics and Questions for Public
Comments
We are seeking public comments on
whether we should remove the
procedures described by CPT codes
27125 and 27130 from the IPO list from
all interested parties, including the
following groups or individuals:
Medicare beneficiaries and advocate
associations for Medicare beneficiaries;
orthopedic surgeons and physician
specialty societies that represent
orthopedic surgeons who perform PHA
and/or THA procedures; hospitals and
hospital trade associations; and any
other interested stakeholders. We are
also specifically seeking public
comments on the following questions:
• Are most outpatient departments
equipped to provide PHA and/or THA
to some Medicare beneficiaries?
• Can the simplest procedure
described by CPT codes 27125 and
27130 be performed in most outpatient
departments?
• Are the procedures described by
CPT codes 27125 and 27130 sufficiently
related to or similar to other procedures
we have already removed from the IPO
list?
• How often is the procedure
described by CPT codes 27125 and
27130 being performed on an outpatient
basis (either in an HOPD or ASC) on
non-Medicare patients?
• Would it be clinically appropriate
for some Medicare beneficiaries in
consultation with his or her surgeon and
other members of the medical team to
have the option of either a PHA or THA
procedure as a hospital outpatient,
which may or may not include a 24hour period of recovery in the hospital
after the operation?
In addition, we are soliciting public
comments on whether the PHA and
THA procedures may meet the criteria
to be added to the ASC Covered
Procedures List. We refer readers to
section XII.C.1.c. of this proposed rule
for a complete discussion of the ASC
Covered Procedures List.
Finally, as noted when we solicited
public comment on removing the TKA
procedure from the IPO list in the CY
2017 rulemaking, we solicited public
comment on the effect of removing the
TKA procedure from the IPO list on the
Comprehensive Care for Joint
Replacement (CJR) Model and the
Bundled Payment for Care
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Improvements (BPCI) Model. We refer
readers to the CY 2017 OPPS/ASC
proposed rule for a discussion of
questions we raised for public
comments and again are seeking public
comment on the effect of removing the
PHA and THA procedures from the IPO
list on these models. For a discussion of
these models in the CY 2017
rulemaking, we refer readers to 81 FR
79698 through 79699.
X. Proposed Nonrecurring Policy
Changes
A. Payment for Certain Items and
Services Furnished by Certain OffCampus Departments of a Provider
1. Background
Section 603 of the Bipartisan Budget
Act of 2015 (Pub. L. 114–74), enacted on
November 2, 2015, amended section
1833(t) of the Act by amending
paragraph (1)(B) and adding a new
paragraph (21). As a general matter,
under sections 1833(t)(1)(B)(v) and
(t)(21) of the Act, applicable items and
services furnished by certain off campus
outpatient departments of a provider on
or after January 1, 2017, will not be
considered covered OPD services as
defined under section 1833(t)(1)(B) of
the Act for purposes of payment under
the OPPS and will instead be paid
‘‘under the applicable payment system’’
under Medicare Part B if the
requirements for such payment are
otherwise met. To be considered part of
a hospital, an off campus department of
a hospital must meet the provider-based
criteria established under 42 CFR
413.65. The implementation of section
603 of the Bipartisan Budget Act of 2015
was finalized in the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79699 through 79719) and interim final
rule with comment period (79720
through 79729).
2. Summary of Public Comments and
Our Responses Regarding Expansion of
Services by Excepted Off-Campus
Hospital Outpatient Departments
In the CY 2017 OPPS/ASC final rule
with comment period, we expressed
interest in receiving feedback on the
limitation on expansion of services of
hospital outpatient departments as it
related to excepted off-campus providerbased departments (PBDs) (81 FR
79707). Below we discuss certain
proposals and present a summary of the
public comments received and our
responses to those comments.
As discussed in the CY 2017 OPPS/
ASC proposed rule and final rule with
comment period (81 FR 45685 through
45686 and 81 FR 79706 through 79707),
we stated that we believe section
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1833(t)(21)(B)(ii) of the Act, as added by
section 603 of Public Law 114–74,
excepts off-campus provider based
departments (PBDs) and the items and
services that are furnished by such
excepted off-campus PBDs for purposes
of paragraphs (1)(B)(v) and (21) of
section 1833(t) of the Act as they were
being furnished on the date of
enactment of section 603 of Public Law
114–74, as guided by our regulatory
definition of a department of a provider
at § 413.65(a)(2). Therefore, we
proposed that the excepted off-campus
PBD items and services that would
continue to be paid under the OPPS
would be limited to the provision of
items and services it was furnishing
prior to the date of enactment of section
603 of Public Law 114–74. Moreover,
we proposed that items and services
that are not part of a clinical family of
services furnished and billed by the
excepted off-campus PBD prior to
November 2, 2015 would be subject to
paragraphs (1)(B)(v) and (21) of section
1833(t) of the Act; that is, not payable
under the OPPS (81 FR 45685 through
45686).
As noted in both the CY 2017 OPPS/
ASC proposed rule and final rule with
comment period, we believe that the
amendments to section 1833(t) of the
Act by section 603 of Public Law 114–
74 were intended to address items and
services furnished at physicians’ offices
that are converted to hospital offcampus PBDs on or after November 2,
2015 from being paid at OPPS rates (81
FR 45685 through 45686 and 81 FR
79706 through 79707). One issue we
contemplated is how expanded services
of an excepted off-campus PBD could
affect payments to a hospital in regard
to newly acquired physicians’ offices or
new off-campus PBDs established after
the date of enactment of section 603 of
Public Law 114–74. Particularly, in the
CY 2017 OPPS/ASC proposed rule, we
indicated that we were concerned that
if excepted off-campus PBDs could
expand the types of services provided at
the excepted off-campus PBDs and also
be paid OPPS rates for these new types
of services, hospitals may be able to
purchase additional physician practices
and add those physicians to existing
excepted off campus PBDs (81 FR
45685). This could result in newly
purchased physician practices
furnishing services that are paid at
OPPS rates, which we believe these
amendments to section 1833(t) of the
Act were intended to address.
After reviewing the statutory
authority and the concerns raised by
stakeholders, we proposed for CY 2017,
for purposes of paragraphs (1)(B)(v) and
(21) of section 1833(t) of the Act, that
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excepted status of items and services
furnished in excepted off-campus PBDs
would be limited to the items and
services (defined as clinical families of
services in Table 21 of the proposed rule
(81 FR 45685 through 45686)) such a
department was billing for under the
OPPS and were furnished prior to
November 2, 2015. We proposed that if
an excepted off-campus PBD furnishes
services from a clinical family of
services that it did not furnish prior to
November 2, 2015, and therefore did not
also bill for, these new or expanded
clinical families of services would not
be covered OPD services, and instead
would be subject to paragraphs (1)(B)(v)
and (21) of section 1833(t) of the Act.
We did not propose to limit the volume
of excepted items and services within a
clinical family of services that an
excepted off-campus PBD could furnish.
In addition, we considered, but did
not propose, specifying a timeframe in
which service lines had to be billed
under the OPPS for covered OPD
services furnished prior to November 2,
2015. We sought public comment
through the CY 2017 OPPS/ASC
proposed rule on whether we should
adopt a specific timeframe for which the
billing had to occur, such as CY 2013
through November 1, 2015.
Under our CY 2017 proposal, while
excepted off-campus PBDs would not be
eligible to receive OPPS payments for
expanded clinical families of services,
such excepted off-campus PBDs would
continue to be eligible to receive OPPS
payment for clinical families of services
that were furnished and billed prior to
that date.
After consideration of the public
comments we received in response to
the CY 2017 OPPS/ASC proposed rule,
we did not finalize our proposed policy
to limit service line expansion.
Therefore, for CY 2017, an excepted offcampus PBD receives payments under
the OPPS for all billed items and
services, regardless of whether it
furnished such types of items and
services prior to the date of enactment
of Public Law 114–74, as long as the
excepted off-campus PBD remains
excepted; that is, it meets the relocation
and change of ownership requirements
adopted in the CY 2017 OPPS/ASC final
rule with comment period (81 FR
79707). Furthermore, in the CY 2017
OPPS/ASC final rule with comment
period, we stated our intent to monitor
service line expansion and continue to
consider how a potential limitation on
expansion would work. To that end, in
the CY 2017 OPPS/ASC final rule with
comment period, we sought public
comments on how either a limitation on
volume of services, as MedPAC
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described in its comments, or a
limitation on lines of service, as we laid
out in the proposed rule, could be
implemented (81 FR 79707).
Specifically, we stated we were
interested in what data are currently
available or could be collected that
would allow us to implement a
limitation on service expansion. We also
stated our interest in receiving
suggestions for changes to the clinical
families of services that we set forth in
Table 21 of the proposed rule (81 FR
45685 through 45686) as we move
forward.
Several of the public comments
received in response to the November
2016 comment solicitation were
repeated from the same stakeholders in
response to the CY 2017 OPPS/ASC
proposed rule. These commenters again
expressed concern regarding CMS’
authority to address changes in servicemix; how a limitation on service
expansion or volume would stifle
innovative care delivery and use of new
technologies; and how the clinical
families of service are not workable.
Because these commenters did not
provide new information, we refer
readers to the CY 2017 OPPS/ASC final
rule with comment period for our
response to comments on statutory
authority and hindrance to access to
innovative technologies (81 FR 79707).
A summary of and our responses to the
other comments received in response to
the November 2016 comment
solicitation follow:
Comment: One commenter raised
concern that CMS will implement
policies that prohibit expansion of
services at excepted off-campus PBDs.
The commenter believed that excepted
and nonexcepted off-campus PBDs
should be allowed to expand their
service offerings.
Response: We believe the commenter
may have misunderstood the policy
proposal to limit service line expansion
as a proposal to disallow excepted offcampus PBDs from ever altering their
service offerings or from treating new
patients. To clarify, we proposed that
the items and services furnished by an
excepted off-campus PBD that would
continue to be paid under the OPPS
would be limited to the provision of
items and services within the clinical
families of services the excepted offcampus PBD was furnishing prior to
November 2, 2015. In addition, we
proposed that items and services that
were not part of a clinical family of
services furnished and billed by the
excepted off-campus PBD prior to
November 2, 2015 would be paid under
the MPFS. We did not propose to
prohibit expansion of clinical services
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furnished by either excepted or
nonexcepted off-campus PBDs. In the
CY 2017 OPPS/ASC final rule with
comment period, in response to public
comments, we did not finalize our
proposal to limit payment under the
OPPS for expansion of services at
excepted off-campus PBDs, but
expressed interest in additional
feedback to help us consider whether
excepted off-campus PBDs that expand
the types of services offered after
November 2, 2015 should be paid for
furnishing those items and services
under the applicable payment system
(that is, the MPFS) instead of the OPPS.
Specifically, we requested comments on
how either a limitation on volume or a
limitation on lines of service would
work in practice (81 FR 79707). For
example, if we were to adopt a
limitation on payment for expanded
service lines at an excepted off-campus
PBD and such PBD primarily provided
infusion services prior to November 2,
2015, but added cardiology services
after November 2, 2015, should payment
for the cardiology services be made
under the MPFS while payment for the
infusion services would be made under
the OPPS?
We recognize that services provided
in off-campus PBDs may evolve to
reflect changes in clinical practice and
community health care needs. However,
as stated in prior rulemaking, we believe
that section 1833(t)(21)(B)(ii) of the Act
excepted off-campus PBDs as they
existed at the time that Public Law 114–
74 was enacted, and provides the
authority to define excepted off-campus
PBDs, including those items and
services furnished and billed by such a
PBD that may be paid under the OPPS,
as opposed to the authority under
section 1833(t)(21)(C) of the Act.
Comment: A few commenters
supported CMS’ intent to monitor
service line expansion and changes in
billing patterns by excepted off-campus
PBDs. These commenters urged CMS to
work to operationalize a method that
would preclude an excepted off-campus
PBD from expanding its payment
advantage under the OPPS into wholly
new clinical areas.
Response: We appreciate the
commenters’ support. We are collecting
data on the claims billed by off-campus
PBDs with modifier ‘‘PO’’ (for excepted
services) and modifier ‘‘PN’’ (for
nonexcepted services). We believe that
data collected using these modifiers will
be a useful tool in furthering our efforts
to monitor service line expansion, and
address any issues as they may arise.
Comment: A few commenters urged
CMS to pursue a limitation on service
line expansion to ensure designation as
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an excepted off-campus PBD is not
‘‘abused.’’ One commenter suggested
that CMS already has the necessary data
to limit excepted off-campus PBDs to
billing under the OPPS for only those
items and services that were furnished
prior to November 2, 2015. The
commenter suggested that CMS evaluate
outpatient claims with the ‘‘PO’’
modifier to develop a list of
‘‘grandfathered’’ items and services for
which the excepted off-campus PBD
may continue to be paid under the
OPPS.
Response: We appreciate the
commenters’ suggestions. While the
‘‘PO’’ modifier claims data are helpful to
assess the billing patterns of off-campus
PBDs, reporting of this modifier was
voluntary for CY 2015 and did not
become mandatory until CY 2016.
Because of the voluntary nature of ‘‘PO’’
modifier reporting in CY 2015, the data
may not accurately reflect all items and
services furnished at excepted offcampus PBDs. We also are concerned
with the practicality of developing a list
of excepted items and services for each
excepted off-campus PBD, given the
magnitude of such a list. Any future
proposal on service expansion would
need to be practicable and take into
consideration the administrative burden
on providers and the Federal
Government.
Comment: A few commenters
expressed concern that either a
limitation on services or volume of
services at an excepted off-campus PBD
would result in varying beneficiary
copayments at a single site, which could
create confusion and inequity.
Therefore, the commenters requested
that CMS minimize beneficiary
confusion by treating all items and
services furnished at an excepted offcampus PBD as excepted under
§ 419.48.
Response: We appreciate these
comments. We note that the cost-sharing
liability under both the OPPS and the
MPFS is prescribed by statute and that
there is not flexibility with respect to
the copayment amount that would be
due for a given service.
Comment: A few commenters
believed that MedPAC’s proposal to cap
service volume from a baseline period
would still be administratively complex
and unduly burdensome. In addition,
the commenters disagreed with
MedPAC’s proposal to establish the
baseline period using the 12-month
period that preceded November 2, 2015
(that is, November 2, 2014 through
November 1, 2015) as a baseline for
volume caps. These commenters
believed that such an approach would
negatively affect excepted off-campus
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PBDs that began operations any time
during the year before the enactment of
section 603 of Public Law 114–74, by
possibly preventing all of the items and
services furnished by that excepted offcampus PBD from being excepted from
the provisions of section 603. Therefore,
the commenters requested that any
baseline period run no earlier than the
12-month period immediately prior to
the effective date of the policy, or, for
excepted off-campus PBDs that began
operations within the 5-year period
prior to the effective date of the policy,
the 12-month period following the
excepted off-campus PBD’s fifth year of
operations. The commenters also
believed that establishment of a cap
based on the modifier ‘‘PO’’ data is
inappropriate, given that use of the
modifier was not mandatory until
January 1, 2016, or nearly 2 months after
enactment of section 603 of Public Law
114–74. One commenter suggested that
a volume cap would need to be adjusted
annually to account for changes in
coding and bundling of services;
changes in population of community
served; hospital market basket increases
to OPPS payment rates; and efficiency
improvements.
Response: We appreciate these
comments and concerns relating to
proposing a cap on service volume and
the limitations of the ‘‘PO’’ modifier
data. We will take this feedback into
consideration in the development of
potential future proposals to either limit
service expansion or cap volume of
services payable under the OPPS.
Comment: A few commenters
suggested that CMS delay establishing
any limitation on service expansion or
volume until claims data with the ‘‘PN’’
modifier are available. However, the
commenters believed that, even with
‘‘PO’’ modifier data from excepted offcampus PBDs and ‘‘PN’’ modifier data
from nonexcepted off-campus PBDs, it
would be a challenging task for CMS
and providers to retroactively assess and
compare which services were provided
at each PBD for a 1-year period prior to
November 2, 2015. As an alternative,
one commenter suggested that
additional questions on the CMS 855A
enrollment form would be a more
sensible approach to gathering
information on types of services
furnished at excepted off-campus PBDs,
but did not provide any specific
questions.
Response: We agree that evaluating
data reported with the ‘‘PN’’ modifier by
nonexcepted off-campus PBDs will be
instructive as we consider options for
any potential future proposal on
limitation of service line expansion or
volume. While we did not finalize any
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policy on clinical service expansion that
would establish the baseline period as a
1-year period prior to November 2,
2015, we appreciate the feedback.
Regarding changes to the CMS 855A
enrollment form, we are unclear on
what types of questions could be added
to glean a better understanding of
services provided at nonexcepted offcampus PBDs; therefore, we cannot
respond to this comment at this time.
We appreciate the commenters’
suggestions and concerns on the issue of
a limitation on clinical service line
expansion or a limitation on service line
volume. After consideration of the
public comments we received, for CY
2018, we are not making any proposals
to limit clinical service line expansion
or volume increases at excepted offcampus PBDs, but will continue to
monitor claims data for changes in
billing patterns and utilization, and
continue to invite public comments on
this issue.
We refer readers to the CY 2018 MPFS
proposed rule for proposed payment
rates under the MPFS for nonexcepted
items and services furnished by
nonexcepted off-campus provider-based
departments of hospitals.
3. Implementation of Section 16002 of
the 21st Century Cures Act (Treatment
of Cancer Hospitals in Off Campus
Outpatient Department of a Provider
Policy)
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79699), we
finalized a number of proposals to
implement section 603 of the Bipartisan
Budget Act of 2016 (Pub. L. 114–74),
enacted on November 2, 2015, which
amended section 1833(t) of the Act.
Specifically, this provision amended the
OPPS statute to require that certain
items and services furnished by certain
off-campus outpatient departments of a
provider (off-campus PBDs) on or after
January 1, 2017 will not be considered
covered OPD services as defined under
section 1833(t)(1)(B) of the Act for
purposes of payment under the OPPS,
and instead will be paid ‘‘under the
applicable payment system’’ under
Medicare Part B if the requirements for
such payment are otherwise met. In the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79699), we
established the Medicare Physician Fee
Schedule as the ‘‘applicable payment
system’’ for the majority of the
nonexcepted items and services
furnished by nonexcepted off-campus
PBDs.
Section 16002(a) of the 21st Century
Cures Act (Pub. L. 114–255) amended
the Act at section 1833(t)(20)(B) and
provided that with respect to applicable
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items and services furnished during
2017 or a subsequent year, the term ‘‘offcampus outpatient department of a
provider’’ excludes certain cancer
hospitals. To meet this exclusion,
section 16002(a) requires that such
cancer hospitals (1) be described in
section 1886(d)(1)(B)(v) of the Act; and
(2) for hospital outpatient departments
that meet the requirements for 42 CFR
413.65, after November 1, 2015 and
before December 15, 2016, that the
Secretary has received from the provider
an attestation that the department met
such requirements not later than 60
days after the date of enactment of
section 16002 (December 13, 2016), or,
for departments that meet the
requirements after December 13, 2016,
the Secretary has received from the
provider an attestation that the
department met the requirements not
later than 60 days after the date the
department first met the requirements of
42 CFR 413.65. Through operational
guidance, we have provided direction to
all MACs regarding this provision. We
have also provided guidance on this
provision to hospital providers, which
can be found on the CMS Web site at:
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/Downloads/
Sections-16001-16002.pdf.
Section 16002(b) of Public Law 114–
255 amended section 1833(t)(18) of the
Act by adding a new subparagraph (C)
that requires the Secretary, in applying
42 CFR 419.43(i) for services furnished
on or after January 1, 2018, to use a
target PCR that is 1 percentage point less
than the target PCR that would
otherwise apply. In addition to the 1
percentage point reduction, the
Secretary may consider making an
additional percentage point reduction to
the target PCR that takes into account
payment rates for applicable items and
services described in section
1833(t)(21)(C) of the Act other than for
services furnished by certain cancer
hospitals. Further, in making any budget
neutrality adjustments under section
1833(t) of the Act, the Secretary shall
not take into account the reduced
expenditures that result from
application of section 1833(t)(18)(C) of
the Act. We refer readers to section II.F.
of this proposed rule for a discussion on
the calculation of the proposed target
PCR for cancer hospitals for CY 2018.
B. Medicare Site-of-Service Price
Transparency (Section 4011 of the 21st
Century Cures Act)
Section 4011 of the 21st Century
Cures Act (Pub. L. 114–255), enacted on
December 13, 2016, amended section
1834 of the Act by adding a new
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subsection (t). New section 1834(t) of
the Act provides that, in order to
facilitate price transparency with
respect to items and services for which
payment may be made either to a
hospital outpatient department or to an
ambulatory surgical center under Title
XVIII, the Secretary shall, for 2018 and
each year thereafter, make available to
the public via a searchable Web site,
with respect to an appropriate number
of items and services, the estimated
payment amount for the item or service
under the OPPS and ASC payment
system and the estimated beneficiary
liability applicable to the item or
service. We are announcing our plan to
establish the searchable Web site
required by section 1834(t) of the Act.
Details regarding the Web site will be
issued through our subregulatory
process. We anticipate that the Web site
will be made available in early CY 2018.
C. Appropriate Use Criteria for
Advanced Diagnostic Imaging Services
Section 218(b) of the Protecting
Access to Medicare Act of 2014 (PAMA)
(Pub. L. 113–93) added subsection (q) to
section 1834 of the Act, which directs
the Secretary to establish a program to
promote the use of appropriate use
criteria (AUC) for advanced diagnostic
imaging services (the AUC program).
Section 1834(q)(1)(B) of the Act defines
AUC as criteria that are evidence-based
(to the extent feasible) and assist
professionals who order and furnish
applicable imaging services to make the
most appropriate treatment decisions for
a specific clinical condition. The
current policies for the AUC program for
advanced diagnostic imaging services
are codified in the regulations at 42 CFR
414.94.
There are three key components of the
AUC program for advanced diagnostic
imaging services program. In the CY
2016 MPFS final rule with comment
period (80 FR 71102 through 71116 and
80 FR 71380 through 71382), we
addressed the first component of the
Medicare AUC program. The first
component includes the requirements
and process for the establishment and
specification of the AUC. In the CY 2017
MPFS final rule with comment period
(81 FR 80403 through 80428 and 81 FR
80554 through 80555), we addressed the
second component of the AUC program.
The second component includes the
specification of qualified clinical
decision support mechanisms (CDSMs).
A CDSM is the electronic tool through
which the ordering practitioner consults
AUC. In the CY 2018 MPFS proposed
rule, we are proposing to address the
third component of the AUC program.
The third component includes the
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requirements for an ordering
professional to consult with a qualified
CDSM when ordering an applicable
imaging service and communicate
information about the AUC consultation
to the furnishing professional, and for
the furnishing professional to include
that information on claims for the
service that is furnished in an
applicable setting and paid under an
applicable payment system. Based on
the statutory language of section
1834(q)(4)(B) of the Act, the AUC
program applies to advanced imaging
services for which payment is made
under the following applicable payment
systems: The MPFS; the OPPS; and the
ASC payment system. Information on
the latest proposals for requirements for
the AUC program can be found in the
CY 2018 MPFS proposed rule. Public
comments on these proposals should be
submitted in response to the CY 2018
MPFS proposed rule.
D. Enforcement Instruction for the
Supervision of Outpatient Therapeutic
Services in Critical Access Hospitals
(CAHs) and Certain Small Rural
Hospitals
In the CY 2009 OPPS/ASC proposed
rule and final rule with comment period
(73 FR 41518 through 41519 and 73 FR
68702 through 68704, respectively), we
clarified that direct supervision is
required for hospital outpatient
therapeutic services covered and paid
by Medicare that are furnished in
hospitals as well as in provider-based
departments (PBDs) of hospitals, as set
forth in the CY 2000 OPPS final rule
with comment period (65 FR 18525). In
the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60575 through
60591), we finalized a technical
correction to the title and text of the
applicable regulations at 42 CFR 410.27
to clarify that this standard applies in
CAHs as well as hospitals. In response
to concerns expressed by the hospital
community, in particular CAHs and
small rural hospitals, that they would
have difficulty meeting this standard, on
March 15, 2010, we instructed all
Medicare administrative contractors not
to evaluate or enforce the supervision
requirements for therapeutic services
provided to outpatients in CAHs from
January 1, 2010 through December 31,
2010, while the agency revisited the
supervision policy during the CY 2011
OPPS/ASC rulemaking cycle.
Due to continued concerns expressed
by CAHs and small rural hospitals, we
extended this notice of nonenforcement
(‘‘enforcement instruction’’) as an
interim measure for CY 2011, and
expanded it to apply to small rural
hospitals having 100 or fewer beds (75
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FR 72007). We continued to consider
the issue further in our annual OPPS
notice-and-comment rulemaking, and
implemented an independent review
process in 2012 to obtain advice from
the Hospital Outpatient Payment Panel
(the Panel) on this matter (76 FR 74360
through 74371). Under this process used
since CY 2012, the Panel considers and
advises CMS regarding stakeholder
requests for changes in the required
level of supervision of individual
hospital outpatient therapeutic services.
In addition, we extended the
enforcement instruction through CY
2012 and CY 2013. The enforcement
instruction has not been in effect since
December 31, 2013. Congress has taken
legislative action (Pub. L. 113–198 and
Pub. L. 114–112) to extend
nonenforcement of the direct
supervision of hospital outpatient
therapeutic services in CAHs and small
rural hospitals having 100 or fewer beds
since December 31, 2013. The latest
legislative action (Pub. L. 114–255)
extended nonenforcement until
December 31, 2016. The current
enforcement instruction is available on
the CMS Web site at: https://
www.cms.gov/Regulations-andGuidance/Guidance/FACA/Downloads/
Moratorium-on-Hospital-SupervisionEnforcement.pdf.
Stakeholders have consistently
requested that we continue the
nonenforcement of the direct
supervision of hospital outpatient
therapeutic services for CAHs and small
rural hospitals having 100 or fewer
beds. Stakeholders stated that some
small rural hospitals and CAHs have
insufficient staff available to furnish
direct supervision. The primary
contributing factors cited were difficulty
recruiting physician and nonphysician
practitioners to practice in rural areas.
These stakeholders noted that it is
particularly difficult to furnish direct
supervision for critical specialty
services, such as radiation oncology
services, that cannot be directly
supervised by a hospital emergency
department physician or nonphysician
practitioner because of the volume of
emergency patients or lack of specialty
expertise. In addition, we are not aware
of any quality of care complaints from
beneficiaries or providers relating to
general physician supervision as
compared to direct physician
supervision for outpatient hospital
therapeutic services.
Therefore, we are proposing to
reinstate the nonenforcement of direct
supervision enforcement instruction for
outpatient therapeutic services for CAHs
and small rural hospitals having 100 or
fewer beds for CY 2018 and 2019 to give
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CAHs and small rural hospitals having
100 or fewer beds more time to comply
with the supervision requirements for
outpatients therapeutic services and to
give all parties time to submit specific
services to be evaluated by the Advisory
Panel on Hospital Outpatient Payment
for a recommended change in the
supervision level. These hospitals will
continue to be subject to conditions of
participation for hospitals and other
Medicare rules regarding supervision.
We welcome public comments on this
proposal.
E. Payment Changes for Film X-Ray
Services and Proposed Payment
Changes for X-Rays Taken Using
Computed Radiography Technology
Section 502 of the Consolidated
Appropriations Act, 2016 (Pub. L. 114–
113), which was enacted on December
18, 2015, contains provisions to
incentivize the transition from
traditional X-ray imaging to digital
radiography. In particular, section
502(b) of Public Law 114–113 amended
section 1833(t)(16) of the Act by adding
subparagraph (F), which includes
provisions that limit payment for film xray imaging services and computed
radiography imaging services.
Section 1833(t)(16)(F)(i) of the Act
specifies that, effective for services
furnished during 2017 or a subsequent
year, the payment under the OPPS for
imaging services that are X-rays taken
using film (including the X-ray
component of a packaged service) that
would otherwise be made under the
OPPS (without application of
subparagraph (F)(i) and before
application of any other adjustment
under section 1833(t)) shall be reduced
by 20 percent. Section 1833(t)(16)(F)(iii)
of the Act provides that the reductions
made under section 1833(t)(16)(F) of the
Act shall not be considered an
adjustment under section 1833(t)(2)(E)
of the Act, and shall not be
implemented in a budget neutral
manner.
Consistent with section
1833(t)(16)(F)(iv) of the Act, which
requires the implementation of the
reductions in payment set forth in
subparagraph (F) through appropriate
mechanisms, which may include
modifiers, we implemented section
1833(t)(16)(F)(i) of the Act by
establishing the modifier ‘‘FX’’ (X-ray
taken using film), effective January 1,
2017. The payment for X-rays taken
using film and furnished during 2017 or
a subsequent year will be reduced by 20
percent when modifier ‘‘FX’’ (X-ray
taken using film) is reported with the
appropriate HCPCS codes. The
applicable HCPCS codes describing
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imaging services can be found in
Addendum B to this proposed rule
(which is available via the Internet on
the CMS Web site). When payment for
an X-ray service taken using film is
packaged into the payment for another
item or service under the OPPS, no
separate payment for the X-ray service
is made and, therefore, there is no
payment amount that can be attributed
to the X-ray service. Accordingly, the
amount of the payment reduction for a
packaged film X-ray service is $0 (20
percent of $0). Further discussion of
these policies and modifier ‘‘FX’’ can be
found in the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79729
through 79730).
Section 1833(t)(16)(F)(ii) of the Act
provides for a phased-in reduction of
payments for imaging services that are
taken using computed radiography
technology (as defined in section
1848(b)(9)(C) of the Act). Payments for
such services (including the X-ray
component of a packaged service)
furnished during CY 2018, 2019, 2020,
2021, or 2022, that would otherwise be
determined under section 1833(t) of the
Act (without application of
subparagraph (F)(ii) and before
application of any other adjustment),
shall be reduced by 7 percent, and if
such services are furnished during CY
2023 or a subsequent year, by 10
percent. For purposes of this reduction,
computed radiography technology is
defined in section 1848(b)(9)(C) of the
Act as cassette-based imaging which
utilizes an imaging plate to create the
image involved.
To implement this provision, we are
establishing a new modifier ‘‘XX’’, as
permitted by section 1833(t)(16)(F)(iv)
of the Act, that would be reported on
claims to identify those HCPCS codes
that describe X-rays taken using
computed radiography technology. We
are proposing that the payment
reduction would be taken when this
payment modifier is reported with the
applicable HCPCS code(s) to describe
imaging services that are taken using
computed radiography technology. The
applicable HCPCS codes describing
imaging services can be found in
Addendum B to this proposed rule
(which is available via the Internet on
the CMS Web site). We note that
modifier ‘‘XX’’ is a placeholder modifier
whose 2-digit modifier and long
descriptor will be described in the CY
2018 OPPS/ASC final rule with
comment period. When payment for an
X-ray service taken using computed
radiography imaging is packaged into
the payment for another item or service
under the OPPS, no separate payment
for the X-ray service is made and,
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therefore, there is no payment amount
that can be attributed to the X-ray.
Accordingly, the amount of the payment
reduction for a packaged X-ray service
would be $0 (7 percent of $0, and 10
percent of $0). We are inviting public
comments on these proposals.
Although we adopted the payment
reduction required by section
1833(t)(16)(F)(i) of the Act in the CY
2017 OPPS/ASC final rule with
comment period, we did not adopt
corresponding regulation text.
Therefore, in this CY 2018 OPPS/ASC
proposed rule, we are proposing to add
new regulation text at 42 CFR 419.71 to
codify our existing policies and our
proposed policies for computed
radiography technology services. We are
proposing to add the definition of
‘‘computed radiography technology’’, as
it is defined in section 1848(b)(9)(C) of
the Act, in paragraph (a) of proposed
new § 419.71. The proposed regulation
text under paragraph (b) of proposed
new § 419.71 would specify the 20percent reduction for film X-ray imaging
services. We are proposing that the
phased-in payment reduction for
computed radiography technology
imaging services would be codified at
paragraph (c) of proposed new § 419.71.
Paragraph (d) of proposed new § 419.71
would provide that the payment
reductions taken under the section are
not considered adjustments under
section 1833(t)(2)(E) of the Act and are
not implemented in a budget neutral
manner. We are inviting public
comments on this proposed regulation
text.
F. Potential Revisions to the Laboratory
Date of Service Policy
1. Background on the Medicare Part B
Laboratory Date of Service Policy
The date of service (DOS) is a
required data field on all Medicare
claims for laboratory services. However,
a laboratory service may take place over
a period of time—the date the physician
orders the laboratory test, the date the
specimen is collected from the patient,
the date the laboratory accesses the
specimen, the date the laboratory
performs the test, and the date results
are produced may occur on different
dates. In the final rule on coverage and
administrative policies for clinical
diagnostic laboratory services published
in the Federal Register on November 23,
2001 (66 FR 58791 through 58792), we
adopted a policy under which the DOS
for clinical diagnostic laboratory
services generally is the date the
specimen is collected.
A special rule was developed to apply
to ‘‘archived’’ specimens. For laboratory
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tests that use an archived specimen, we
established that the DOS is the date the
specimen was obtained from storage (66
FR 58792).
In 2002, we issued Program
Memorandum AB–02–134 which
permitted contractors discretion in
making determinations regarding the
length of time a specimen must be
stored to be considered ‘‘archived.’’ In
response to comments requesting that
we issue a national standard to clarify
when a stored specimen can be
considered ‘‘archived,’’ in the
Procedures for Maintaining Code Lists
in the Negotiated National Coverage
Determinations for Clinical Diagnostic
Laboratory Services final notice,
published in the Federal Register on
February 25, 2005 (70 FR 9357), we
defined an ‘‘archived’’ specimen as a
specimen that is stored for more than 30
calendar days before testing. We
established that the DOS for archived
specimens is the date the specimen was
obtained from storage. Specimens stored
for 30 days or less continued to have a
DOS of the date the specimen was
collected.
2. Current Medicare DOS Policy (‘‘14Day Rule’’)
In the final rule with comment period
entitled, in relevant part, ‘‘Revisions to
Payment Policies, Five-Year Review of
Work Relative Value Units, Changes to
the Practice Expense Methodology
Under the Physician Fee Schedule, and
Other Changes to Payment Under Part
B’’ published in the Federal Register on
December 1, 2006 (MPFS final rule) (71
FR 69705 through 69706), we added a
new § 414.510 in Title 42 of the CFR
regarding the clinical laboratory DOS
requirements and revised our DOS
policy for stored specimens. We
explained in the MPFS final rule that
the DOS of a test may affect payment for
the test, especially in situations in
which a specimen that is collected
while the patient is being treated in a
hospital setting (for example, during a
surgical procedure), is later used for
testing after the patient has been
discharged from the hospital. We noted
that payment for the test is usually
bundled with payment for the hospital
service, even where the results of the
test did not guide treatment during the
hospital stay. To address concerns
raised for tests related to cancer
recurrence and therapeutic
interventions, we finalized
modifications to the DOS policy in
§ 414.510(b)(2)(i) for a test performed on
a specimen stored less than or equal to
30 calendar days from the date it was
collected (a non-archived specimen), so
that the DOS is the date the test was
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performed (instead of the date of
collection) if the following conditions
are met:
• The test is ordered by the patient’s
physician at least 14 days following the
date of the patient’s discharge from the
hospital;
• The specimen was collected while
the patient was undergoing a hospital
surgical procedure;
• It would be medically inappropriate
to have collected the sample other than
during the hospital procedure for which
the patient was admitted;
• The results of the test do not guide
treatment provided during the hospital
stay; and
• The test was reasonable and
medically necessary for the treatment of
an illness.
As we stated in the MPFS final rule,
we established these five criteria, which
we refer to as the ‘‘14-day rule,’’ to
distinguish laboratory tests performed
as part of post-hospital care from the
care a beneficiary receives in the
hospital. When the 14-day rule applies,
laboratory tests are not bundled into the
hospital stay, but are instead paid
separately under Medicare Part B (as
explained in more detail below).
We also revised the DOS requirements
for a chemotherapy sensitivity test
performed on live tissue. As discussed
in the MPFS final rule (71 FR 69706),
we agreed with commenters that these
tests, which are primarily used to
determine post-hospital chemotherapy
care for patients who also require
hospital treatment for tumor removal or
resection, appear to be unrelated to the
hospital treatment in cases where it
would be medically inappropriate to
collect a test specimen other than at the
time of surgery, especially when the
specific drugs to be tested are ordered
at least 14 days following hospital
discharge. As a result, we revised the
DOS policy for chemotherapy
sensitivity tests, based on our
understanding that the results of these
tests, even if they were available
immediately, would not typically affect
the treatment regimen at the hospital.
Specifically, we modified the DOS for
chemotherapy sensitivity tests
performed on live tissue in
§ 414.510(b)(3) so that the DOS is the
date the test was performed if the
following conditions are met:
• The decision regarding the specific
chemotherapeutic agents to test is made
at least 14 days after discharge;
• The specimen was collected while
the patient was undergoing a hospital
surgical procedure;
• It would be medically inappropriate
to have collected the sample other than
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during the hospital procedure for which
the patient was admitted;
• The results of the test do not guide
treatment provided during the hospital
stay; and
• The test was reasonable and
medically necessary for the treatment of
an illness.
We explained in the MPFS final rule
that, for chemotherapy sensitivity tests
that meet this DOS policy, Medicare
would allow separate payment under
Medicare Part B, that is, separate from
the payment for hospital services.
3. Billing and Payment for Laboratory
Services Under the OPPS
The DOS requirements at 42 CFR
414.510 are used to determine whether
a hospital bills Medicare for a clinical
diagnostic laboratory test (CDLT) or
whether the laboratory performing the
test bills Medicare directly. This is
because separate regulations at 42 CFR
410.42(a) and 411.15(m) generally
provide that Medicare will not pay for
a service furnished to a hospital patient
during an encounter by an entity other
than the hospital unless the hospital has
an arrangement (as defined in 42 CFR
409.3) with that entity to furnish that
particular service to its patients, with
certain exceptions and exclusions.
These regulations, which we will call
the ‘‘under arrangements’’ provisions in
this discussion, require that if the DOS
falls during an inpatient or outpatient
stay, payment for the laboratory test is
usually bundled with the hospital
service.
Under our current rules, if a test
meets all DOS requirements in
§ 414.510(b)(2)(i) or § 414.510(b)(3), the
DOS is the date the test was performed,
and the laboratory would bill Medicare
directly for the test and would be paid
under the Clinical Laboratory Fee
Schedule (CLFS) directly by Medicare.
However, if the test does not meet the
DOS requirements in § 414.510(b)(2)(i)
or § 414.510(b)(3), the DOS is the date
the specimen was collected from the
patient. In that case, the hospital would
bill Medicare for the test and then
would pay the laboratory that performed
the test, if the laboratory provided the
test under arrangement.
In recent rulemakings, we have
reviewed appropriate payment under
the OPPS for certain diagnostic tests
that are not commonly performed by
hospitals. In CY 2014, we finalized a
policy to package certain CDLTs under
the OPPS (78 FR 74939 through 74942
and 42 CFR 419.2(b)(17) and 419.22(l)).
In CYs 2016 and 2017, we made some
modifications to this policy (80 FR
70348 through 70350; 81 FR 79592
through 79594). Under our current
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policy, certain CDLTs that are listed on
the CLFS are packaged as integral,
ancillary, supportive, dependent, or
adjunctive to the primary service or
services provided in the hospital
outpatient setting during the same
outpatient encounter and billed on the
same claim. Specifically, we
conditionally package most CDLTs and
only pay separately for a laboratory test
when it is (1) the only service provided
to a beneficiary on a claim; (2)
considered a preventive service; (3) a
molecular pathology test; or (4) an
advanced diagnostic laboratory test
(ADLT) that meets the criteria of section
1834A(d)(5)(A) of the Act (78 FR 74939
through 74942; 80 FR 70348 through
70350; and 81 FR 79592 through 79594).
In the CY 2016 OPPS/ASC final rule
with comment period, we excluded all
molecular pathology laboratory tests
from packaging because we believed
these relatively new tests may have a
different pattern of clinical use, which
may make them generally less tied to a
primary service in the hospital
outpatient setting than the more
common and routine laboratory tests
that are packaged.
For similar reasons, in the CY 2017
OPPS/ASC final rule with comment
period, we extended the exclusion to
also apply to all ADLTs that meet the
criteria of section 1834A(d)(5)(A) of the
Act.23 We stated that we will assign
status indicator ‘‘A’’ (Separate payment
under the CLFS) to ADLTs once a
laboratory test is designated an ADLT
under the CLFS. Laboratory tests that
are separately payable and are listed on
the CLFS are paid at the CLFS payment
rates.
4. ADLTs Under the New Private Payor
Rate-Based CLFS
Section 1834A of the Act, as
established by section 216(a) of the
Protecting Access to Medicare Act of
2014 (PAMA), requires significant
changes to how Medicare pays for
CDLTs under the CLFS. Section 216(a)
of PAMA also establishes a new
subcategory of CDLTs known as ADLTs
with separate reporting and payment
requirements under section 1834A of
the Act. In the CLFS final rule
published in the Federal Register on
June 23, 2016, entitled ‘‘Medicare
Program; Medicare Clinical Diagnostic
23 Under section 1834A(d)(5)(A) of the Act, an
ADLT is a ‘‘CDLT that is offered and furnished only
by a single laboratory and not sold for use by a
laboratory other than the original developing
laboratory (or a successor owner) and . . . is an
analysis of multiple biomarkers of DNA, RNA, or
proteins combined with a unique algorithm to yield
a single patient-specific result.’’ CMS has
established a regulatory definition for this type of
ADLT in 42 CFR 414.502.
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Laboratory Tests Payment System Final
Rule’’ (CLFS final rule) (81 FR 41036),
we implemented the requirements of
section 1834A of the Act.
As defined in § 414.502, an ADLT is
a CLDT covered under Medicare Part B
that is offered and furnished only by a
single laboratory. Additionally, an
ADLT cannot be sold for use by a
laboratory other than the single
laboratory that designed the test or a
successor owner. And, an ADLT must
meet either Criterion (A), which
implements section 1834A(d)(5)(A) of
the Act, or Criterion (B), which
implements section 1834A(d)(5)(B) of
the Act, as follows:
• Criterion (A): The test—is an
analysis of multiple biomarkers of
deoxyribonucleic acid (DNA),
ribonucleic acid (RNA), or proteins;
when combined with an empirically
derived algorithm, yields a result that
predicts the probability a specific
individual patient will develop a certain
condition(s) or respond to a particular
therapy(ies); provides new clinical
diagnostic information that cannot be
obtained from any other test or
combination of tests; and may include
other assays.
Or:
• Criterion (B): The test is cleared or
approved by the Food and Drug
Administration (FDA).
Generally, under the revised CLFS,
ADLTs are paid using the same
methodology based on the weighted
median of private payor rates as other
CDLTs. However, updates to ADLT
payment rates occur annually instead of
every 3 years. The payment
methodology for ADLTs is detailed in
the CLFS final rule (81 FR 41076
through 41083).
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5. Potential Revisions to the Laboratory
DOS Policy
In the December 1, 2006 MPFS final
rule (71 FR 69706), we explained that
we were very concerned that only tests
that can legitimately be distinguished
from the care a beneficiary receives in
the hospital be subject to the 14-day
rule, which changes the DOS from the
date the specimen was collected to the
date the test was performed and results
in a separate payment for the test. We
also stated that we believed it is more
difficult to determine that a test ordered
less than 14 days before discharge is
appropriately separable from the
hospital stay that preceded the test. We
indicated that we wanted more
information about tests that may be
ordered by the patient’s physician less
than 14 days following the date of the
discharge that would not guide the care
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during a hospital stay before taking any
additional action in this area.
Recently, we have heard from certain
laboratory stakeholders about
operational issues the current laboratory
DOS policy creates for hospitals and
laboratories with regard to molecular
pathology tests and laboratory tests they
expect will be designated by CMS as
ADLTs that meet the criteria of section
1834A(d)(5)(A) of the Act. These
stakeholders have expressed that
although these particular tests are not
packaged under the OPPS, under
current DOS policy, if the tests are
ordered within 14 days of a patient’s
discharge from the hospital, Medicare
still treats the tests as though they were
ordered and furnished by the hospital
itself. Under those circumstances,
laboratories cannot directly seek
Medicare payment for the molecular
pathology test or ADLT. The hospital
must bill Medicare for the test, and the
laboratory must seek payment from the
hospital. Specifically, stakeholders
representing laboratories have expressed
the following concerns:
• The current DOS policy permits
hospitals to bill for tests they did not
perform and that may have no
relationship to or bearing on treatment
received by the patient while in the
hospital.
• The DOS policy may create
inconsistent billing for specialty
laboratories. For example, if the hospital
is located in a different jurisdiction than
the Medicare Administrative Contractor
(MAC) used by the laboratory, a
different MAC may be billed.
• Hospitals may be discouraged from
utilizing ADLTs because billing for such
tests that are not performed by hospitals
could create administrative and
financial complexities.
• The DOS policy is a potential
barrier to CMS’ goal of promoting
personalized medicine because the
policy may disproportionately impact
smaller laboratories performing
innovative diagnostic tests.
• Billing complexities may affect
beneficiary access to needed laboratory
tests and therapies. For example, orders
might be delayed until at least 14 days
after discharge or even canceled to
avoid the DOS policy. This may restrict
patient access to tests and reduce
efficacy of treatment plans due to
hospitals delaying or forgoing patient
testing to avoid financial risk.
• The DOS policy may limit access
for Medicare beneficiaries under
original Medicare fee-for-service (that is,
Medicare Part A and Part B) due to the
fact that Medicare Advantage Plans
under Medicare Part C and private
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payers allow laboratories to bill directly
for tests they perform.
We recognize that the current
laboratory DOS rule may impose
administrative difficulties for hospitals
and laboratories that furnish laboratory
tests that are excluded from OPPS
packaging and therefore paid separately
at CLFS payment rates. Hospitals may
be reluctant to bill Medicare for
laboratory tests they do not perform,
which as noted by stakeholders, could
lead to delays in patient access to care.
In light of the concerns raised by
stakeholders, we are considering
potential modifications to the DOS
policy that would allow laboratories to
bill Medicare directly for certain
laboratory tests excluded from the OPPS
packaging policy. One approach under
consideration would create a new
exception to the DOS policy for
molecular pathology tests and ADLTs
that meet the criteria of section
1834A(5)(A) of the Act and have been
granted ADLT status by CMS. As we
stated in the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79592
through 79594), we believe these tests
are relatively new and may have a
different pattern of clinical use than
more conventional laboratory tests,
which may make them generally less
tied to a primary service in the hospital
outpatient setting than more common
and routine laboratory tests that are
packaged. We are seeking public
comment on whether these tests, by
their nature, are appropriately separable
from the hospital stay that preceded the
test and therefore should have a DOS
that is the date of performance rather
than the date of collection.
For example, we are considering
modifying § 414.510(b) by adding a new
paragraph (5) to establish that in the
case of a molecular pathology test or an
ADLT that meets the criteria of section
1834A(d)(5)(A) of the Act, the DOS must
be the date the test was performed only
if:
• The physician orders the test
following the date of a hospital
outpatient’s discharge from the hospital
outpatient department;
• The specimen was collected from a
hospital outpatient during an encounter
(as both are defined 42 CFR 410.2);
• It would be medically inappropriate
to have collected the sample from the
hospital outpatient other than during
the hospital outpatient encounter;
• The results of the test do not guide
treatment provided during the hospital
outpatient encounter; and
• The test was reasonable and
medically necessary for the treatment of
an illness.
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We are requesting specific comments
on this potential modification to the
current laboratory DOS policy, which
would allow laboratories to bill
Medicare directly for molecular
pathology tests and ADLTs that meet the
criteria of section 1834A(d)(5)(A) of the
Act and have been granted ADLT status
by CMS, when the specimen is collected
during a hospital outpatient procedure
and the test is ordered after the patient
is discharged from the hospital
outpatient department.
(a) Limiting the DOS Rule Exception to
ADLTs
We also are considering potentially
revising the DOS rule to create an
exception only for ADLTs that meet the
criteria in section 1834A(d)(5)(A) of the
Act. This exception would not cover
molecular pathology tests. We are
considering this approach because
ADLTs approved by CMS under
Criterion (A), like all ADLTs, are offered
and furnished only by a single
laboratory (as defined in 42 CFR
414.502). The hospital, or another
laboratory, that is not the single
laboratory (as defined in 42 CFR
414.502), cannot furnish the ADLT.
Therefore, there may be additional
beneficiary access concerns for these
ADLTs that may not apply to molecular
pathology tests, and that could be
addressed by allowing the laboratories
to bill Medicare directly for these tests.
For example, a hospital may not have an
arrangement with the single laboratory
that furnishes a particular ADLT, which
could lead the hospital to delay the
order for the ADLT until 14 days after
the patient’s discharge to avoid financial
risk and thus potentially delay
medically necessary care for the
beneficiary.
We believe the circumstances may be
different for molecular pathology tests,
which are not required to be furnished
by a single laboratory. In particular, we
understand there may be ‘‘kits’’ for
certain molecular pathology tests that a
hospital can purchase, allowing the
hospital to perform the test. Therefore,
molecular pathology tests may not
present the same concerns of delayed
access to medically necessary care as
ADLTs, which must be performed by a
single laboratory.
We are requesting specific comments
on potentially creating an exception to
the DOS policy that is limited to ADLTs
that meet the criteria in section
1834A(d)(5)(A) of the Act and have been
granted ADLT status by CMS. We also
are requesting public comments on how
the current laboratory DOS policy may
affect billing for other separately
payable laboratory test codes that are
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not packaged under the OPPS, such as
a laboratory test that is the only service
provided to a beneficiary on a claim or
molecular pathology tests.
(b) Other Alternative Approaches
Finally, we are inviting public
comments on alternative approaches to
addressing stakeholders’ concerns
regarding the DOS policy, such as
potentially modifying the ‘‘under
arrangements’’ provisions in § 410.42
and § 411.15(m). Specifically, we are
requesting comments on whether an
exception should be added to
§ 410.42(b) and/or § 411.15(m)(3) for
molecular pathology tests and ADLTs
that are excluded from the OPPS
packaging policy under 42 CFR 419.2(b)
and how such an exception should be
framed.
We believe that feedback on the topics
discussed in this section will help
inform us regarding potential
refinements to our DOS policy. We
welcome comments on these topics
from the public, including hospitals,
laboratories, and other interested
stakeholders. We are especially
interested in comments regarding how
the current DOS policy and ‘‘under
arrangements’’ provisions may affect
access to care for Medicare
beneficiaries. We would consider
finalizing the modifications described in
this section.
XI. Proposed CY 2018 OPPS Payment
Status and Comment Indicators
A. Proposed CY 2018 OPPS Payment
Status Indicator Definitions
Payment status indicators (SIs) that
we assign to HCPCS codes and APCs
serve an important role in determining
payment for services under the OPPS.
They indicate whether a service
represented by a HCPCS code is payable
under the OPPS or another payment
system and also whether particular
OPPS policies apply to the code.
For CY 2018, we are not proposing to
make any changes to the definitions of
status indicators that were listed in
Addendum D1 of the CY 2017 OPPS/
ASC final rule with comment period
available on the CMS Web site at:
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/HospitalOutpatient-Regulations-and-NoticesItems/CMS-1656-FC.html?DLPage=
1&DLEntries=10&DLSort=2&DLSortDir=
descending. We believe that the existing
definitions of the OPPS status indicators
would continue to be appropriate for CY
2018.
The complete list of the payment
status indicators and their definitions
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33653
that we are proposing to apply for CY
2018 is displayed in Addendum D1 to
this proposed rule, which is available
on the CMS Web site at: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
HospitalOutpatientPPS/.
The proposed CY 2018 payment
status indicator assignments for APCs
and HCPCS codes are shown in
Addendum A and Addendum B,
respectively, to this proposed rule,
which are available on the CMS Web
site at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/.
B. Proposed CY 2018 Comment
Indicator Definitions
In this CY 2018 OPPS/ASC proposed
rule, we are proposing to use four
comment indicators for the CY 2018
OPPS. These comment indicators,
‘‘CH’’, ‘‘NC’’, ‘‘NI’’, and ‘‘NP’’, are in
effect for CY 2017 and we are proposing
to continue their use in CY 2018. The
proposed CY 2018 OPPS comment
indicators are as follows:
• ‘‘CH’’—Active HCPCS code in
current and next calendar year, status
indicator and/or APC assignment has
changed; or active HCPCS code that will
be discontinued at the end of the
current calendar year.
• ‘‘NC’’—New code for the next
calendar year or existing code with
substantial revision to its code
descriptor in the next calendar year as
compared to current calendar year for
which we are requesting comments in
the proposed rule, final APC
assignment; comments will not be
accepted on the final APC assignment
for the new code.
• ‘‘NI’’—New code for the next
calendar year or existing code with
substantial revision to its code
descriptor in the next calendar year as
compared to current calendar year,
interim APC assignment; comments will
be accepted on the interim APC
assignment for the new code.
• ‘‘NP’’—New code for the next
calendar year or existing code with
substantial revision to its code
descriptor in the next calendar year as
compared to current calendar year
proposed APC assignment; comments
will be accepted on the proposed APC
assignment for the new code.
The definitions of the proposed OPPS
comment indicators for CY 2018 are
listed in Addendum D2 to this proposed
rule, which is available on the CMS
Web site at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/
index.html.
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We are requesting public comment on
our proposed status indicators and
comment indicators for CY 2018.
XII. Proposed Updates to the
Ambulatory Surgical Center (ASC)
Payment System
A. Background
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1. Legislative History, Statutory
Authority, and Prior Rulemaking for the
ASC Payment System
For a detailed discussion of the
legislative history and statutory
authority related to payments to ASCs
under Medicare, we refer readers to the
CY 2012 OPPS/ASC final rule with
comment period (76 FR 74377 through
74378) and the June 12, 1998 proposed
rule (63 FR 32291 through 32292). For
a discussion of prior rulemaking on the
ASC payment system, we refer readers
to the CYs 2012, 2013, 2014, 2015, 2016,
and 2017 OPPS/ASC final rules with
comment period (76 FR 74378 through
74379; 77 FR 68434 through 68467; 78
FR 75064 through 75090; 79 FR 66915
through 66940; 80 FR 70474 through
70502; and 81 FR 79732 through 79753,
respectively).
2. Policies Governing Changes to the
Lists of Codes and Payment Rates for
ASC Covered Surgical Procedures and
Covered Ancillary Services
Under 42 CFR 416.2 and 416.166 of
the Medicare regulations, subject to
certain exclusions, covered surgical
procedures in an ASC are surgical
procedures that are separately paid
under the OPPS, that would not be
expected to pose a significant risk to
beneficiary safety when performed in an
ASC, and for which standard medical
practice dictates that the beneficiary
would not typically be expected to
require active medical monitoring and
care at midnight following the
procedure (‘‘overnight stay’’). We
adopted this standard for defining
which surgical procedures are covered
under the ASC payment system as an
indicator of the complexity of the
procedure and its appropriateness for
Medicare payment in ASCs. We use this
standard only for purposes of evaluating
procedures to determine whether or not
they are appropriate to be furnished to
Medicare beneficiaries in ASCs. We
define surgical procedures as those
described by Category I CPT codes in
the surgical range from 10000 through
69999, as well as those Category III CPT
codes and Level II HCPCS codes that
directly crosswalk or are clinically
similar to procedures in the CPT
surgical range that we have determined
do not pose a significant safety risk, that
we would not expect to require an
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overnight stay when performed in ASCs,
and that are separately paid under the
OPPS (72 FR 42478).
In the August 2, 2007 final rule (72 FR
42495), we also established our policy
to make separate ASC payments for the
following ancillary items and services
when they are provided integral to ASC
covered surgical procedures: (1)
Brachytherapy sources; (2) certain
implantable items that have passthrough payment status under the
OPPS; (3) certain items and services that
we designate as contractor-priced,
including, but not limited to,
procurement of corneal tissue; (4)
certain drugs and biologicals for which
separate payment is allowed under the
OPPS; and (5) certain radiology services
for which separate payment is allowed
under the OPPS. In the CY 2015 OPPS/
ASC final rule with comment period (79
FR 66932 through 66934), we expanded
the scope of ASC covered ancillary
services to include certain diagnostic
tests within the medicine range of CPT
codes for which separate payment is
allowed under the OPPS when they are
provided integral to an ASC covered
surgical procedure. Covered ancillary
services are specified in § 416.164(b)
and, as stated previously, are eligible for
separate ASC payment. Payment for
ancillary items and services that are not
paid separately under the ASC payment
system is packaged into the ASC
payment for the covered surgical
procedure.
We update the lists of, and payment
rates for, covered surgical procedures
and covered ancillary services in ASCs
in conjunction with the annual
proposed and final rulemaking process
to update the OPPS and the ASC
payment system (§ 416.173; 72 FR
42535). We base ASC payment and
policies for most covered surgical
procedures, drugs, biologicals, and
certain other covered ancillary services
on the OPPS payment policies, and we
use quarterly change requests (CRs) to
update services covered under the
OPPS. We also provide quarterly update
CRs for ASC covered surgical
procedures and covered ancillary
services throughout the year (January,
April, July, and October). We release
new and revised Level II HCPCS codes
and recognize the release of new and
revised CPT codes by the AMA and
make these codes effective (that is, the
codes are recognized on Medicare
claims) via these ASC quarterly update
CRs. We recognize the release of new
and revised Category III CPT codes in
the July and January CRs. These updates
implement newly created and revised
Level II HCPCS and Category III CPT
codes for ASC payment and update the
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payment rates for separately paid drugs
and biologicals based on the most
recently submitted ASP data. New and
revised Category I CPT codes, except
vaccine codes, are released only once a
year and are implemented only through
the January quarterly CR update. New
and revised Category I CPT vaccine
codes are released twice a year and are
implemented through the January and
July quarterly CR updates. We refer
readers to Table 41 in the CY 2012
OPPS/ASC proposed rule for an
example of how this process, which we
finalized in the CY 2012 OPPS/ASC
final rule with comment period, is used
to update HCPCS and CPT codes (76 FR
42291; 76 FR 74380 through 74381).
In our annual updates to the ASC list
of, and payment rates for, covered
surgical procedures and covered
ancillary services, we undertake a
review of excluded surgical procedures
(including all procedures newly
proposed for removal from the OPPS
inpatient list), new codes, and codes
with revised descriptors, to identify any
that we believe meet the criteria for
designation as ASC covered surgical
procedures or covered ancillary
services. Updating the lists of ASC
covered surgical procedures and
covered ancillary services, as well as
their payment rates, in association with
the annual OPPS rulemaking cycle is
particularly important because the
OPPS relative payment weights and, in
some cases, payment rates, are used as
the basis for the payment of many
covered surgical procedures and
covered ancillary services under the
revised ASC payment system. This joint
update process ensures that the ASC
updates occur in a regular, predictable,
and timely manner.
3. Definition of ASC Covered Surgical
Procedures
Since the implementation of the ASC
prospective payment system, we have
defined a ‘‘surgical’’ procedure under
the payment system as any procedure
described within the range of Category
I CPT codes that the CPT Editorial Panel
of the American Medical Association
(AMA) defines as ‘‘surgery’’ (CPT codes
10000 through 69999) (72 FR 42478).
We also have included as ‘‘surgical,’’
procedures that are described by Level
II HCPCS codes or by Category III CPT
codes that directly crosswalk or are
clinically similar to procedures in the
CPT surgical range that we have
determined do not pose a significant
safety risk, would not expect to require
an overnight stay when performed in an
ASC, and are separately paid under the
OPPS (72 FR 42478).
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As we noted in the CY 2008 final rule
that implemented the revised ASC
payment system, using this definition of
surgery would exclude from ASC
payment certain invasive, ‘‘surgery-like’’
procedures, such as cardiac
catheterization or certain radiation
treatment services that are assigned
codes outside the CPT surgical range (72
FR 42477). We stated in that final rule
that we believed continuing to rely on
the CPT definition of surgery is
administratively straightforward,
logically related to the categorization of
services by physician experts who both
establish the codes and perform the
procedures, and consistent with a policy
to allow ASC payment for all outpatient
surgical procedures (72 FR 42477).
Recently, some stakeholders have
suggested that certain procedures that
are outside the CPT surgical range but
that are similar to surgical procedures
currently covered in an ASC setting
should be ASC covered surgical
procedures. For example, these
stakeholders stated that certain cardiac
catheterization services, cardiac device
programming services, and
electrophysiology services should be
added to the covered surgical
procedures list. While we continue to
believe that using the CPT code range to
define surgery represents a logical,
appropriate, and straightforward
approach to defining a surgical
procedure, we also believe it may be
appropriate for us to use the CPT
surgical range as a guide rather than a
requirement as to whether a procedure
is surgical, which would give us more
flexibility to include ‘‘surgery-like’’
procedures on the ASC Covered
Procedures List (CPL). We are cognizant
of the dynamic nature of ambulatory
surgery and the continued shift of
services from the inpatient setting to the
outpatient setting over the past decade.
Therefore, in this CY 2018 OPPS/ASC
proposed rule, we are soliciting public
comments regarding services that are
described by Category I CPT codes
outside of the surgical range, or Level II
HCPCS codes or Category III CPT codes
that do not directly crosswalk and are
not clinically similar to procedures in
the CPT surgical range, but that
nonetheless may be appropriate to
include as covered surgical procedures
payable when furnished in the ASC
setting. In particular, we are interested
in commenters’ views regarding
additional criteria we might use to
consider when a procedure that is
surgery-like could be included on the
ASC CPL. We are requesting that
commenters on this issue take into
consideration whether each individual
procedure can be safely and
appropriately performed in an ASC as
required by the regulations at 42 CFR
416.166 (including that standard
medical practice dictates that the
beneficiary would not typically be
expected to require active medical
monitoring and care at midnight
following the procedure), and whether
the procedure requires the resources,
staff, and equipment typical of an ASC.
We also are interested in commenters’
views on whether and how, if we were
to include such services as ASC covered
surgical procedures, we would need to
revise our definition ASC covered
surgical procedures.
B. Proposed Treatment of New and
Revised Codes
1. Background on Current Process for
Recognizing New and Revised Category
I and Category III CPT Codes and Level
II HCPCS Codes
Category I CPT, Category III CPT, and
Level II HCPCS codes are used to report
procedures, services, items, and
supplies under the ASC payment
system. Specifically, we recognize the
following codes on ASC claims:
• Category I CPT codes, which
describe surgical procedures and
vaccine codes;
• Category III CPT codes, which
describe new and emerging
technologies, services, and procedures;
and
• Level II HCPCS codes, which are
used primarily to identify items,
supplies, temporary procedures, and
services not described by CPT codes.
We finalized a policy in the August 2,
2007 final rule (72 FR 42533 through
42535) to evaluate each year all new and
revised Category I and Category III CPT
codes and Level II HCPCS codes that
describe surgical procedures, and to
make preliminary determinations
during the annual OPPS/ASC
rulemaking process regarding whether
or not they meet the criteria for payment
in the ASC setting as covered surgical
procedures and, if so, whether or not
they are office-based procedures. In
addition, we identify new and revised
codes as ASC covered ancillary services
based upon the final payment policies
of the revised ASC payment system. In
prior rulemakings, we refer to this
process as recognizing new codes.
However, this process has always
involved the recognition of new and
revised codes. We consider revised
codes to be new when they have
substantial revision to their code
descriptors that necessitate a change in
the current ASC payment indicator. To
clarify, we refer to these codes as new
and revised in this CY 2018 OPPS/ASC
proposed rule.
We have separated our discussion
below based on when the codes are
released and whether we are proposing
to solicit public comments in this
proposed rule (and respond to those
comments in the CY 2018 OPPS/ASC
final rule with comment period) or
whether we will be soliciting public
comments in the CY 2018 OPPS/ASC
final rule with comment period (and
responding to those comments in the CY
2019 OPPS/ASC final rule with
comment period).
We note that we sought public
comments in the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79735 through 79736) on the new and
revised Level II HCPCS codes effective
October 1, 2016, or January 1, 2017.
These new and revised codes, with an
effective date of October 1, 2016, or
January 1, 2017, were flagged with
comment indicator ‘‘NI’’ in Addenda
AA and BB to the CY 2017 OPPS/ASC
final rule with comment period to
indicate that we were assigning them an
interim payment status and payment
rate, if applicable, which were subject to
public comment following publication
of the CY 2017 OPPS/ASC final rule
with comment period. We will respond
to public comments and finalize the
treatment of these codes under the ASC
payment system in the CY 2018 OPPS/
ASC final rule with comment period.
In Table 30 below, we summarize our
process for updating codes through our
ASC quarterly update CRs, seeking
public comments, and finalizing the
treatment of these new codes under the
OPPS.
TABLE 30—COMMENT AND FINALIZATION TIMEFRAMES FOR NEW OR REVISED HCPCS CODES
ASC quarterly update CR
Type of code
Effective date
April l, 2017 .......................
Level II HCPCS Codes .....
April 1, 2017 ......................
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Comments sought
CY 2018 OPPS/ASC proposed rule.
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When finalized
CY 2018 OPPS/ASC final
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TABLE 30—COMMENT AND FINALIZATION TIMEFRAMES FOR NEW OR REVISED HCPCS CODES—Continued
ASC quarterly update CR
Type of code
Effective date
Comments sought
July 1, 2017 .......................
Level II HCPCS Codes .....
July 1, 2017 ......................
CY 2018 OPPS/ASC proposed rule.
July 1, 2017 ......................
CY 2018 OPPS/ASC proposed rule.
October 1, 2017 ................
Category I (certain vaccine
codes) and III CPT
codes.
Level II HCPCS Codes .....
October 1, 2017 ................
January 1, 2018 ................
Level II HCPCS Codes .....
January 1, 2018 ................
Category I and III CPT
Codes.
January 1, 2018 ................
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC proposed rule.
When finalized
CY 2018 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
CY 2019 OPPS/ASC final
rule with comment period.
CY 2019 OPPS/ASC final
rule with comment period.
CY 2018 OPPS/ASC final
rule with comment period.
Note: In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 through 66844), we finalized a revised process of assigning
APC and status indicators for new and revised Category I and III CPT codes that would be effective January 1. We refer readers to section
III.A.3. of this CY 2018 OPPS/ASC proposed rule for further discussion of this issue.
2. Proposed Treatment of New and
Revised Level II HCPCS Codes
Implemented in April 2017 for Which
We Are Soliciting Public Comments in
This Proposed Rule
In the April 2017 ASC quarterly
update (Transmittal 3726, CR 9998,
dated March 3, 2017), we added six new
drug and biological Level II HCPCS
codes to the list of covered ancillary
services. Table 31 below lists the new
Level II HCPCS codes that were
implemented April 1, 2017, along with
their proposed payment indicators for
CY 2018. The proposed payment rates,
where applicable, for these April codes
can be found in Addendum BB to this
proposed rule (which is available via
the Internet on the CMS Web site).
TABLE 31—NEW LEVEL II HCPCS CODES FOR COVERED ANCILLARY SERVICES EFFECTIVE ON APRIL 1, 2017
Proposed CY
2018 payment
indicator
CY 2017 HCPCS code
CY 2017 long descriptor
C9484 .......................................................
C9485 .......................................................
C9486 .......................................................
C9487* ......................................................
C9488 .......................................................
J7328 ........................................................
Injection, eteplirsen, 10 mg ..........................................................................................
Injection, olaratumab, 10 mg .......................................................................................
Injection, granisetron extended release, 0.1 mg .........................................................
Ustekinumab, for intravenous injection, 1 mg .............................................................
Injection, conivaptan hydrochloride, 1 mg ...................................................................
Hyaluronan or derivative, gel-syn, for intra-articular injection, 0.1 mg ........................
K2
K2
K2
K2
K2
K2
* HCPCS code C9487, which was effective April 1, 2017, was deleted June 30, 2017 and replaced with HCPCS code Q9989 (Ustekinumab, for
intravenous injection, 1 mg) effective July 1, 2017.
We are inviting public comments on
these proposed payment indicators and
the proposed payment rates for the new
Level II HCPCS codes that were
recognized as ASC covered ancillary
services in April 2017 through the
quarterly update CRs, as listed in Table
31 above. We are proposing to finalize
their payment indicators and their
payment rates in the CY 2018 OPPS/
ASC final rule with comment period.
3. Proposed Treatment of New and
Revised Level II HCPCS Codes
Implemented in July 2017 for Which We
Are Soliciting Public Comments in This
Proposed Rule
In the July 2017 ASC quarterly update
(Transmittal 3792, CR 10138, dated June
9, 2017), we added seven new Level II
HCPCS codes to the list of covered
surgical procedures and ancillary
services. Table 32 below lists the new
Level II HCPCS codes that are effective
July 1, 2017. The proposed payment
rates, where applicable, for these July
codes can be found in Addendum BB to
this proposed rule (which is available
via the Internet on the CMS Web site).
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TABLE 32—NEW LEVEL II HCPCS CODES FOR COVERED SURGICAL PROCEDURES AND ANCILLARY SERVICES EFFECTIVE
ON JULY 1, 2017
CY 2017 HCPCS code
C9489
C9490
C9745
C9746
.......................................................
.......................................................
.......................................................
.......................................................
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Proposed CY
2018 payment
indicator
CY 2017 long descriptor
Injection, nusinersen, 0.1 mg .......................................................................................
Injection, bezlotoxumab, 10 mg ...................................................................................
Nasal endoscopy, surgical; balloon dilation of eustachian tube ..................................
Transperineal implantation of permanent adjustable balloon continence device, with
cystourethroscopy, when performed and/or fluoroscopy, when performed.
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TABLE 32—NEW LEVEL II HCPCS CODES FOR COVERED SURGICAL PROCEDURES AND ANCILLARY SERVICES EFFECTIVE
ON JULY 1, 2017—Continued
Proposed CY
2018 payment
indicator
CY 2017 HCPCS code
CY 2017 long descriptor
C9747 .......................................................
Ablation of prostate, transrectal, high intensity focused ultrasound (HIFU), including
imaging guidance.
Injection, hydroxyprogesterone caproate (Makena), 10 mg ........................................
Ustekinumab, for Intravenous Injection, 1 mg .............................................................
Q9986 .......................................................
Q9989* ......................................................
G2
K2
K2
* HCPCS code C9487, which was effective April 1, 2017, was replaced with HCPCS code Q9989 (Ustekinumab, for intravenous injection, 1
mg) effective July 1, 2017.
Through the July 2017 quarterly
update CR, we also implemented ASC
payment for one new Category III CPT
code as an ASC covered surgical
procedure, effective July 1, 2017. This
code is listed in Table 33 below, along
with its proposed payment indicator.
The proposed payment rate for this new
Category III CPT code can be found in
Addendum AA to the proposed rule
(which is available via the Internet on
the CMS Web site).
TABLE 33—NEW CATEGORY III CPT CODE FOR COVERED SURGICAL PROCEDURE EFFECTIVE ON JULY 1, 2017
Proposed CY
2018 payment
indicator
CY 2017 CPT code
CY 2017 long descriptor
0474T ........................................................
Insertion of anterior segment aqueous drainage device, with creation of intraocular
reservoir, internal approach, into the supraciliary space.
We are inviting public comments on
these proposed payment indicators and
the proposed payment rates for the new
Category III CPT code and Level II
HCPCS codes that were or are expected
to be newly recognized as ASC covered
surgical procedures or covered ancillary
services in July 2017 through the
quarterly update CRs, as listed in Tables
32 and 33 above. We are proposing to
finalize their payment indicators and
their payment rates in the CY 2018
OPPS/ASC final rule with comment
period.
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4. Proposed Process for New and
Revised Level II HCPCS Codes That Will
Be Effective October 1, 2017 and
January 1, 2018 for Which We Will Be
Soliciting Public Comments in the CY
2018 OPPS/ASC Final Rule With
Comment Period
As has been our practice in the past,
we incorporate those new and revised
Level II HCPCS codes that are effective
January 1 in the final rule with
comment period, thereby updating the
OPPS and the ASC payment system for
the following calendar year. These
codes are released to the public via the
CMS HCPCS Web site, and also through
the January OPPS quarterly update CRs.
In the past, we also released new and
revised Level II HCPCS codes that are
effective October 1 through the October
OPPS quarterly update CRs and
incorporated these new codes in the
final rule with comment period.
For CY 2018, consistent with our
established policy, we are proposing
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that the Level II HCPCS codes that will
be effective October 1, 2017, and
January 1, 2018, would be flagged with
comment indicator ‘‘NI’’ in Addendum
B to the CY 2018 OPPS/ASC final rule
with comment period to indicate that
we have assigned the codes an interim
OPPS payment status for CY 2018. We
will invite public comments in the CY
2018 OPPS/ASC final rule with
comment period on the interim status
indicator and APC assignments, and
payment rates for these codes that will
be finalized in the CY 2019 OPPS/ASC
final rule with comment period.
5. Proposed Process for Recognizing
New and Revised Category I and
Category III CPT Codes That Will Be
Effective January 1, 2018 for Which We
Will Be Soliciting Public Comments in
the CY 2018 OPPS/ASC Final Rule With
Comment Period
For new and revised CPT codes
effective January 1, 2018, that were
received in time to be included in this
proposed rule, we are proposing APC
and status indicator assignments. We
will accept comments and finalize the
APC and status indicator assignments in
the OPPS/ASC final rule with comment
period. For those new/revised CPT
codes that are received too late for
inclusion in this OPPS/ASC proposed
rule, we may either make interim final
assignments in the final rule with
comment period or possibly use HCPCS
G-codes that mirror the predecessor CPT
codes and retain the current APC and
status indicator assignments for a year
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until we can propose APC and status
indicator assignments in the following
year’s rulemaking cycle.
For the CY 2018 ASC update, the new
and revised CY 2018 Category I and III
CPT codes will be effective on January
1, 2018, and can be found in ASC
Addendum AA and Addendum BB to
this proposed rule (which are available
via the Internet on the CMS Web site).
The new and revised CY 2018 Category
I and III CPT codes are assigned to new
comment indicator ‘‘NP’’ to indicate
that the code is new for the next
calendar year or the code is an existing
code with substantial revision to its
code descriptor in the next calendar
year as compared to current calendar
year and that comments will be
accepted on the proposed payment
indicator. Further, we remind readers
that the CPT code descriptors that
appear in Addendum AA and
Addendum BB are short descriptors and
do not accurately describe the complete
procedure, service, or item described by
the CPT code. Therefore, we are
including the 5-digit placeholder codes
and their long descriptors for the new
and revised CY 2018 CPT codes in
Addendum O to this proposed rule
(which is available via the Internet on
the CMS Web site) so that the public can
have time to adequately comment on
our proposed payment indicator
assignments. The 5-digit placeholder
codes can be found in Addendum O,
specifically under the column labeled
‘‘CY 2018 OPPS/ASC Proposed Rule 5Digit Placeholder Code,’’ to this
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proposed rule. The final CPT code
numbers would be included in the CY
2018 OPPS/ASC final rule with
comment period. We note that not every
code listed in Addendum O is subject to
comment. For the new/revised Category
I and III CPT codes, we are requesting
comments on only those codes that are
assigned to comment indicator ‘‘NP’’.
In summary, we are soliciting public
comments on the proposed CY 2018
payment indicators for the new and
revised Category I and III CPT codes that
will be effective January 1, 2018. The
CPT codes are listed in Addendum AA
and Addendum BB to this proposed rule
with short descriptors only. We list
them again in Addendum O to this
proposed rule with long descriptors. We
also are proposing to finalize the
payment indicator for these codes (with
their final CPT code numbers) in the CY
2018 OPPS/ASC final rule with
comment period. The proposed
payment indicator for these codes can
be found in Addendum AA and
Addendum BB to this proposed rule
(which are available via the Internet on
the CMS Web site).
C. Proposed Update to the List of ASC
Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures
Designated as Office-Based
(1) Background
In the August 2, 2007 ASC final rule,
we finalized our policy to designate as
‘‘office-based’’ those procedures that are
added to the ASC list of covered
surgical procedures in CY 2008 or later
years that we determine are performed
predominantly (more than 50 percent of
the time) in physicians’ offices based on
consideration of the most recent
available volume and utilization data for
each individual procedure code and/or,
if appropriate, the clinical
characteristics, utilization, and volume
of related codes. In that rule, we also
finalized our policy to exempt all
procedures on the CY 2007 ASC list
from application of the office-based
classification (72 FR 42512). The
procedures that were added to the ASC
list of covered surgical procedures
beginning in CY 2008 that we
determined were office-based were
identified in Addendum AA to that rule
by payment indicator ‘‘P2’’ (Officebased surgical procedure added to ASC
list in CY 2008 or later with MPFS
nonfacility PE RVUs; payment based on
OPPS relative payment weight); ‘‘P3’’
(Office-based surgical procedures added
to ASC list in CY 2008 or later with
MPFS nonfacility PE RVUs; payment
based on MPFS nonfacility PE RVUs); or
‘‘R2’’ (Office-based surgical procedure
added to ASC list in CY 2008 or later
without MPFS nonfacility PE RVUs;
payment based on OPPS relative
payment weight), depending on whether
we estimated the procedure would be
paid according to the standard ASC
payment methodology based on its
OPPS relative payment weight or at the
MPFS nonfacility PE RVU-based
amount.
Consistent with our final policy to
annually review and update the list of
covered surgical procedures eligible for
payment in ASCs, each year we identify
covered surgical procedures as either
temporarily office-based (these are new
procedure codes with little or no
utilization data that we have determined
are clinically similar to other
procedures that are permanently officebased), permanently office-based, or
nonoffice-based, after taking into
account updated volume and utilization
data.
(2) Proposed Changes for CY 2018 to
Covered Surgical Procedures Designated
as Office-Based
In developing this proposed rule, we
followed our policy to annually review
and update the covered surgical
procedures for which ASC payment is
made and to identify new procedures
that may be appropriate for ASC
payment, including their potential
designation as office-based. We
reviewed CY 2016 volume and
utilization data and the clinical
characteristics for all covered surgical
procedures that are assigned payment
indicator ‘‘G2’’ (Nonoffice-based
surgical procedure added in CY 2008 or
later; payment based on OPPS relative
payment weight) in CY 2016, as well as
for those procedures assigned one of the
temporary office-based payment
indicators, specifically ‘‘P2’’, ‘‘P3’’, or
‘‘R2’’ in the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79736
through 79738).
Our review of the CY 2016 volume
and utilization data resulted in our
identification of two covered surgical
procedures, CPT code 37241 (Vascular
embolize/occlude venous) and CPT
code 67227 (Destruction extensive
retinopathy), that we believe meet the
criteria for designation as office-based.
The data indicate that these procedures
are performed more than 50 percent of
the time in physicians’ offices, and we
believe that the services are of a level of
complexity consistent with other
procedures performed routinely in
physicians’ offices. The CPT codes that
we are proposing to permanently
designate as office-based for CY 2018 is
listed in Table 34 below.
TABLE 34—ASC COVERED SURGICAL PROCEDURES PROPOSED TO BE NEWLY DESIGNATED AS PERMANENTLY
OFFICE-BASED FOR CY 2018
CY 2017 ASC
payment
indicator
CY 2018 long descriptor
37241 ..............................................
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CY 2018 CPT code
Vascular embolization or occlusion, inclusive of all radiological supervision and interpretation, intraprocedural roadmapping, and imaging
guidance necessary to complete the intervention; venous, other than
hemorrhage (eg, congenital or acquired venous malformations, venous and capillary hemangiomas, varices, varioceles).
Destruction of extensive or progressive retinopathy (eg, diabetic retinopathy), cryotherapy, diathermy.
67227 ..............................................
Proposed CY
2018 ASC
payment
indicator *
G2
P2/P3
G2
P2/P3
* Proposed payment indicators are based on a comparison of the proposed rates according to the ASC standard ratesetting methodology and
the MPFS proposed rates. Current law specifies a 0.5 percent update to the MPFS payment rates for CY 2018. For a discussion of the MPFS
rates, we refer readers to the CY 2018 MPFS proposed rule.
We also reviewed CY 2016 volume
and utilization data and other
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information for 10 procedures
designated as temporary office-based in
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Tables 48 and 49 in the CY 2017 OPPS/
ASC final rule with comment period (81
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FR 79736 through 79738). Of these 10
procedures, there were very few claims
in our data and no claims data for 8
procedures: CPT code 0402T (Collagen
cross-linking of cornea (including
removal of the corneal epithelium and
intraoperative pachymetry when
performed)); CPT code 10030 (Imageguided fluid collection drainage by
catheter (e.g., abscess, hematoma,
seroma, lymphocele, cyst), soft tissue
(e.g., extremity, abdominal wall, neck),
percutaneous); CPT code 36473
(Endovenous ablation therapy of
incompetent vein, extremity, inclusive
of all imaging guidance and monitoring,
percutaneous, mechanochemical; first
vein treated); CPT code 36901
(Introduction of needle(s) and/or
catheter(s), dialysis circuit, with
diagnostic angiography of the dialysis
circuit, including all direct puncture(s)
and catheter placement(s), injection(s)
of contrast, all necessary imaging from
the arterial anastomosis and adjacent
artery through entire venous outflow
including the inferior or superior vena
cava, fluoroscopic guidance,
radiological supervision and
interpretation and image documentation
and report); CPT code 64461
(Paravertebral block (PVB) (paraspinous
block), thoracic; single injection site
(includes imaging guidance, when
performed); CPT code 64463
(Paravertebral block (PVB) (paraspinous
block), thoracic; continuous infusion by
catheter (includes imaging guidance,
when performed)); CPT code 65785
(Implantation of intrastromal corneal
ring segments); and CPT code 67229
(Treatment of extensive or progressive
retinopathy, one or more sessions;
preterm infant (less than 37 weeks
gestation at birth), performed from birth
up to 1 year of age (for example,
retinopathy of prematurity),
photocoagulation or cryotherapy).
Consequently, we are proposing to
maintain the temporary office-based
designations for these eight codes for CY
2018. We list all of these codes for
which we are proposing to maintain the
temporary office-based designations for
CY 2018 in Table 35 below. The
procedures for which the proposed
office-based designations for CY 2018
are temporary also are indicated by
asterisks in Addendum AA to this
proposed rule (which is available via
the Internet on the CMS Web site).
The volume and utilization data for
one procedure that has a temporary
office-based designation for CY 2017,
HCPCS code G0429 (Dermal injection
procedure(s) for facial lipodystrophy
syndrome (LDS) and provision of
Radiesse or Sculptra dermal filler,
including all items and supplies), is
sufficient to indicate that this procedure
is performed predominantly in
physicians’ offices and, therefore,
should be assigned an office-based
payment indicator in CY 2018.
Consequently, we are proposing to
assign payment indicator ‘‘P2/P3’’ to
this covered surgical procedure code in
CY 2018.
HCPCS code 0299T (Extracorporeal
shock wave for integumentary wound
healing, high energy, including topical
application and dressing care; initial
wound) was finalized for temporary
office-based status in the CY 2017
OPPS/ASC final rule with comment
period. However, this code will be
deleted by the AMA effective December
31, 2017.
We are inviting public comment on
our proposals.
TABLE 35—PROPOSED CY 2018 PAYMENT INDICATORS FOR ASC COVERED SURGICAL PROCEDURES DESIGNATED AS
TEMPORARY OFFICE-BASED IN THE CY 2017 OPPS/ASC FINAL RULE WITH COMMENT PERIOD
CY 2017 ASC
payment
indicator *
CY 2018 CPT code
CY 2018 long descriptor
0299T ..............................................
Extracorporeal shock wave for integumentary wound healing, high energy, including topical application and dressing care; initial wound.
Collagen cross-linking of cornea (including removal of the corneal epithelium and intraoperative pachymetry when performed).
Image-guided fluid collection drainage by catheter (e.g., abscess, hematoma, seroma, lymphocele, cyst), soft tissue (e.g., extremity abdominal wall, neck), percutaneous.
Endovenous ablation therapy of incompetent vein, extremity, inclusive
of all imaging guidance and monitoring, percutaneous,
mechanochemical; first vein treated.
Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery
through entire venous outflow including the inferior or superior vena
cava, fluoroscopic guidance, radiological supervision and interpretation and image documentation and report.
Paravertebral block (PVB) (paraspinous block), thoracic; single injection site (includes imaging guidance, when performed).
Continuous infusion by catheter (includes imaging guidance, when performed).
Implantation of intrastromal corneal ring segments .................................
Treatment of extensive or progressive retinopathy, one or more sessions; preterm infant (less than 37 weeks gestation at birth), performed from birth up to 1 year of age (e.g., retinopathy of prematurity), photocoagulation or cryotherapy.
Dermal injection procedure(s) for facial lipodystrophy syndrome (LDS)
and provision of Radiesse or Sculptra dermal filler, including all items
and supplies.
0402T ..............................................
10030 ..............................................
36473 ..............................................
36901 ..............................................
64461 ..............................................
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64463 ..............................................
65785 ..............................................
67229 ..............................................
G0429 ..............................................
* If designation is temporary.
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CY 2018
proposed ASC
payment
indicator **
R2 *
NA
R2 *
R2 **
P2 *
P2/P3 **
P2 *
P2/P3 **
P2 *
P2/P3 **
P3 *
P2/P3 **
P3 *
P2/P3 **
R2 *
R2 *
P2/P3 **
P2/P3 **
P3 *
P2/P3 **
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** Proposed payment indicators are based on a comparison of the proposed rates according to the ASC standard ratesetting methodology and
the MPFS proposed rates. Current law specifies a 0.5 percent update to the MPFS payment rates for CY 2018. For a discussion of the MPFS
rates, we refer readers to the CY 2018 MPFS proposed rule.
For CY 2018, we are proposing to
designate one new CY 2018 CPT code
for ASC covered surgical procedures as
temporary office-based, as displayed in
Table 36 below. After reviewing the
clinical characteristics, utilization, and
volume of related procedure codes, we
determined that the procedure
described by this new CPT code would
be predominantly performed in
physicians’ offices. However, because
we had no utilization data for the
procedure specifically described by this
new CPT code, we are proposing to
make the office-based designation
temporary rather than permanent, and
we will reevaluate the procedure when
data become available. The procedure
for which the proposed office-based
designation for CY 2018 is temporary is
indicated by asterisks in Addendum AA
to this proposed rule (which is available
via the Internet on the CMS Web site).
We are inviting public comments on
these proposals.
TABLE 36—PROPOSED CY 2018 PAYMENT INDICATORS FOR NEW CY 2018 CPT CODES FOR ASC COVERED SURGICAL
PROCEDURES DESIGNATED AS TEMPORARY OFFICE-BASED
Proposed CY
2018 ASC
payment
indicator **
Proposed CY 2018 OPPS/ASC proposed
rule 5-Digit CMS placeholder code
CY 2018 long descriptor
382X3 ........................................................
Diagnostic bone marrow; biopsy(ies) and aspiration(s) ..............................................
P2/P3 *
* If designation is temporary.
** Proposed payment indicators are based on a comparison of the proposed rates according to the ASC standard ratesetting methodology and
the MPFS proposed rates. Current law specifies a 0.5 percent update to the MPFS payment rates for CY 2018. For a discussion of the MPFS
rates, we refer readers to the CY 2018 MPFS proposed rule.
b. Proposed ASC Covered Surgical
Procedures To Be Designated as DeviceIntensive
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(1) Background
As discussed in the CY 2017 OPPS/
ASC final rule with comment period (81
FR 79739 through 79740), we
implemented a payment methodology
for calculating the ASC payment rates
for covered surgical procedures that are
designated as device-intensive. Under
§ 416.171(b)(2) of the regulations, we
define an ASC device-intensive
procedure as a procedure with a HCPCS
code-level device offset of greater than
40 percent when calculated according to
the standard OPPS APC ratesetting
methodology.
According to this ASC payment
methodology, we apply the device offset
percentage based on the standard OPPS
APC ratesetting methodology to the
OPPS national unadjusted payment to
determine the device cost included in
the OPPS payment rate for a deviceintensive ASC covered surgical
procedure, which we then set as equal
to the device portion of the national
unadjusted ASC payment rate for the
procedure. We calculate the service
portion of the ASC payment for deviceintensive procedures by applying the
uniform ASC conversion factor to the
service (non-device) portion of the
OPPS relative payment weight for the
device-intensive procedure. Finally, we
sum the ASC device portion and ASC
service portion to establish the full
payment for the device-intensive
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procedure under the revised ASC
payment system.
We also finalized that deviceintensive procedures will be subject to
all of the payment policies applicable to
procedures designated as an ASC
device-intensive procedure under our
established methodology, including our
policies on device credits and
discontinued procedures.
In addition, in the CY 2017 OPPS/
ASC final rule with comment period, we
adopted a policy for new HCPCS codes
describing procedures involving the
implantation of medical devices that do
not yet have associated claims data, to
designate these procedures as deviceintensive with a default device offset set
at 41 percent until claims data are
available to establish the HCPCS codelevel device offset for the procedures (81
FR 79739 through 79740). This default
device offset amount of 41 percent
would not be calculated from claims
data; instead it would be applied as a
default until claims data are available
upon which to calculate an actual
device offset for the new code. The
purpose of applying the 41-percent
default device offset to new codes that
describe procedures that involve the
implantation of medical devices would
be to ensure ASC access for new
procedures until claims data become
available. However, in certain rare
instances, for example, in the case of a
very expensive implantable device, we
may temporarily assign a higher offset
percentage if warranted by additional
information such as pricing data from a
device manufacturer. Once claims data
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are available for a new procedure
involving the implantation of a medical
device, the device-intensive designation
will be applied to the code if the HCPCS
code device offset is greater than 40
percent, according to our policy of
determining device-intensive status by
calculating the HCPCS code-level device
offset.
(2) Proposed Changes to List of ASC
Covered Surgical Procedures Designated
as Device-Intensive for CY 2018
For CY 2018, we are proposing to
update the ASC list of covered surgical
procedures that are eligible for payment
according to our device-intensive
procedure payment methodology,
reflecting the proposed individual
HCPCS code device offset percentages
based on CY 2016 OPPS claims and cost
report data available for the proposed
rule.
The ASC covered surgical procedures
that we are proposing to designate as
device-intensive, and therefore subject
to the device-intensive procedure
payment methodology for CY 2018, are
assigned payment indicator ‘‘J8’’ and are
included in Addendum AA to this
proposed rule (which is available on the
CMS Web site). The CPT code, the CPT
code short descriptor, the proposed CY
2018 ASC payment indicator, and an
indication of whether the full credit/
partial credit (FB/FC) device adjustment
policy would apply also are included in
Addendum AA to this proposed rule.
We are inviting public comments on
the proposed list of ASC deviceintensive procedures.
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c. Proposed Adjustment to ASC
Payments for No Cost/Full Credit and
Partial Credit Devices
Our ASC payment policy for costly
devices implanted in ASCs at no cost/
full credit or partial credit, as set forth
in § 416.179 of our regulations, is
consistent with the OPPS policy that
was in effect until CY 2014.
Specifically, the OPPS policy that was
in effect through CY 2013 provided a
reduction in OPPS payment by 100
percent of the device offset amount
when a hospital furnishes a specified
device without cost or with a full credit
and by 50 percent of the device offset
amount when the hospital receives
partial credit in the amount of 50
percent or more of the cost for the
specified device (77 FR 68356 through
68358). The established ASC policy
reduces payment to ASCs when a
specified device is furnished without
cost or with full credit or partial credit
for the cost of the device for those ASC
covered surgical procedures that are
assigned to APCs under the OPPS to
which this policy applies. We refer
readers to the CY 2009 OPPS/ASC final
rule with comment period for a full
discussion of the ASC payment
adjustment policy for no cost/full credit
and partial credit devices (73 FR 68742
through 68744).
As discussed in section IV.B. of the
CY 2014 OPPS/ASC final rule with
comment period (78 FR 75005 through
75006), we finalized our proposal to
modify our former policy of reducing
OPPS payment for specified APCs when
a hospital furnishes a specified device
without cost or with a full or partial
credit. Formerly, under the OPPS, our
policy was to reduce OPPS payment by
100 percent of the device offset amount
when a hospital furnished a specified
device without cost or with a full credit
and by 50 percent of the device offset
amount when the hospital received
partial credit in the amount of 50
percent or more (but less than 100
percent) of the cost for the specified
device. For CY 2014, we finalized our
proposal to reduce OPPS payment for
applicable APCs by the full or partial
credit a provider receives for a replaced
device, capped at the device offset
amount.
Although we finalized our proposal to
modify the policy of reducing payments
when a hospital furnishes a specified
device without cost or with full or
partial credit under the OPPS, in that
final rule with comment period (78 FR
75076 through 75080), we finalized our
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proposal to maintain our ASC policy for
reducing payments to ASCs for
specified device-intensive procedures
when the ASC furnishes a device
without cost or with full or partial
credit. Unlike the OPPS, there is
currently no mechanism within the ASC
claims processing system for ASCs to
submit to CMS the actual amount
received when furnishing a specified
device at full or partial credit.
Therefore, under the ASC payment
system, we finalized our proposal for
CY 2014 to continue to reduce ASC
payments by 100 percent or 50 percent
of the device offset amount when an
ASC furnishes a device without cost or
with full or partial credit, respectively.
We are proposing to update the list of
ASC covered device-intensive
procedures, which would be subject to
the no cost/full credit and partial credit
device adjustment policy for CY 2018.
Specifically, when a device-intensive
procedure is subject to the no cost/full
credit or partial credit device
adjustment policy and is performed to
implant a device that is furnished at no
cost or with full credit from the
manufacturer, the ASC would append
the HCPCS ‘‘FB’’ modifier on the line in
the claim with the procedure to implant
the device. The contractor would reduce
payment to the ASC by the device offset
amount that we estimate represents the
cost of the device when the necessary
device is furnished without cost or with
full credit to the ASC. We continue to
believe that the reduction of ASC
payment in these circumstances is
necessary to pay appropriately for the
covered surgical procedure furnished by
the ASC.
For partial credit, we are proposing to
reduce the payment for implantation
procedures that are subject to the no
cost/full credit or partial credit device
adjustment policy by one-half of the
device offset amount that would be
applied if a device was provided at no
cost or with full credit, if the credit to
the ASC is 50 percent or more (but less
than 100 percent) of the cost of the new
device. The ASC would append the
HCPCS ‘‘FC’’ modifier to the HCPCS
code for a device-intensive surgical
procedure that is subject to the no cost/
full credit or partial credit device
adjustment policy, when the facility
receives a partial credit of 50 percent or
more (but less than 100 percent) of the
cost of a device. To report that the ASC
received a partial credit of 50 percent or
more (but less than 100 percent) of the
cost of a new device, ASCs would have
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33661
the option of either: (1) Submitting the
claim for the device replacement
procedure to their Medicare contractor
after the procedure’s performance but
prior to manufacturer acknowledgment
of credit for the device, and
subsequently contacting the contractor
regarding a claim adjustment once the
credit determination is made; or (2)
holding the claim for the device
implantation procedure until a
determination is made by the
manufacturer on the partial credit and
submitting the claim with the ‘‘FC’’
modifier appended to the implantation
procedure HCPCS code if the partial
credit is 50 percent or more (but less
than 100 percent) of the cost of the
replacement device. Beneficiary
coinsurance would be based on the
reduced payment amount. As finalized
in the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66926), to
ensure our policy covers any situation
involving a device-intensive procedure
where an ASC may receive a device at
no cost/full credit or partial credit, we
apply our FB/FC policy to all deviceintensive procedures.
We are inviting public comments on
our proposals to adjust ASC payments
for no cost/full credit and partial credit
devices.
d. Proposed Additions to the List of
ASC Covered Surgical Procedures
We conducted a review of HCPCS
codes that currently are paid under the
OPPS, but not included on the ASC list
of covered surgical procedures, to
determine if changes in technology and/
or medical practice affected the clinical
appropriateness of these procedures for
the ASC setting. Based on this review,
we are proposing to update the list of
ASC covered surgical procedures by
adding three procedures to the list for
CY 2018. We determined that these
three procedures are separately paid
under the OPPS, would not be expected
to pose a significant risk to beneficiary
safety when performed in an ASC, and
would not be expected to require active
medical monitoring and care of the
beneficiary at midnight following the
procedure. Therefore, we are proposing
to include these three procedures on the
list of ASC covered surgical procedures
for CY 2018.
The procedures that we are proposing
to add to the ASC list of covered
surgical procedures, including the
HCPCS code long descriptors and the
proposed CY 2018 payment indicators,
are displayed in Table 37 below.
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TABLE 37—PROPOSED ADDITIONS TO THE LIST OF ASC COVERED SURGICAL PROCEDURES FOR CY 2018
Proposed CY
2018
ASC
payment
indicator
CY 2018 CPT
code
CY 2018 long descriptor
22856 ...........
Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection); single interspace,
cervical.
Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection); second level, cervical (list separately in addition to code for primary procedure).
Laparoscopy, surgical, with total hysterectomy, for uterus greater than 250g ...........................................................
22858 ...........
58572 ...........
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We are inviting public comments on
our proposals.
e. Comment Solicitation on Adding
Additional Procedures to the ASC
Covered Procedures List
As we discussed in the CY 2009
OPPS/ASC final rule with comment
period (73 FR 68724), we adopted a
policy to include, in our annual
evaluation of the ASC list of covered
surgical procedures, a review of the
procedures that are being proposed for
removal from the OPPS inpatient only
list for possible inclusion on the ASC
list of covered surgical procedures. We
are proposing to remove the following
two procedures described by CPT codes
from the OPPS inpatient only list for CY
2018: CPT codes 27447 (Arthroplasty,
knee, condyle and plateau; medical and
lateral compartments with or without
patella resurfacing (total knee
arthroplasty)) and 55866 (Laparoscopy,
surgical prostatectomy, retropubic
radical, including nerve sparing,
includes robotic assistance, when
performed). We evaluated each of the
two procedures we are proposing to
remove from the OPPS IPO list for CY
2018 according to the criteria for
inclusion on the list of ASC covered
surgical procedures, and considered
whether they should be added to the list
of ASC covered surgical procedures for
CY 2018. Because our understanding is
that these procedures typically require
more than 24 hours of active medical
care following the procedure, we believe
they should continue to be excluded
from the list of ASC covered surgical
procedures.
In the CY 2017 OPPS/ASC proposed
rule (81 FR 45679 through 45681), we
solicited comments regarding whether
the TKA procedure described by CPT
code 27447 should be removed from the
OPPS inpatient only list. During the
comment period, some stakeholders
requested that CMS also add the TKA
procedure to the list of surgical
procedures covered in an ASC setting.
In the CY 2017 proposed rule, we only
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solicited public comments on removing
the TKA procedure from the OPPS
inpatient only list for CY 2017.
However, in this CY 2018 proposed
rule, we are proposing to remove the
TKA procedure from the OPPS inpatient
only list for CY 2018, as discussed in
section IX. of this proposed rule. In light
of the public comments we received on
the CY 2017 proposed rule (81 FR 79697
through 79699) and our proposal to
remove the TKA procedure from the
OPPS IPO list for CY 2018, in this
proposed rule, we are soliciting public
comments on whether the TKA
procedure should also be added to the
ASC list of covered surgical procedures.
We also are inviting public comments
on our proposed continued exclusion of
CPT code 55866 from the list of ASC
covered surgical procedures.
In considering whether or not the
TKA procedure should be added to the
ASC list of covered surgical procedures,
we are requesting that commenters take
into consideration the regulations at 42
CFR 416.2 and 416.166. For example,
commenters should assess whether this
procedure would be expected to pose a
significant risk to beneficiary safety
when performed in an ASC, whether
standard medical practice dictates that
the beneficiary would typically be
expected to require active medical
monitoring and care at midnight
following the procedure (‘‘overnight
stay’’), and whether this procedure
would fall under our general exclusions
for covered surgical procedures at 42
CFR 416.166(c) (for example, would it
generally result in extensive blood loss,
require major or prolonged invasion of
body cavities, directly involve major
blood vessels, among others).
In addition, in this CY 2018 proposed
rule, we are soliciting comment on
whether CPT codes 27125
(Hemiarthroplasty, hip, partial (e.g.,
femoral stem prosthesis, bipolar
arthroplasty)) and 27130 (Arthroplasty,
acetabular and proximal femoral
prosthetic replacement (total hip
arthroplasty), with or without autograft
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N1
G2
or allograft) meet the criteria to be
removed from the OPPS IPO list, as
discussed in section IX. of this proposed
rule. As noted in that section, we also
are soliciting comment on whether these
two procedures meet the criteria to be
added to the ASC covered surgical
procedure list.
2. Covered Ancillary Services
Consistent with the established ASC
payment system policy, we are
proposing to update the ASC list of
covered ancillary services to reflect the
payment status for the services under
the CY 2018 OPPS. Maintaining
consistency with the OPPS may result
in proposed changes to ASC payment
indicators for some covered ancillary
services because of changes that are
being proposed under the OPPS for CY
2018. For example, if a covered
ancillary service was separately paid
under the ASC payment system in CY
2017, but is proposed for packaged
status under the CY 2018 OPPS, to
maintain consistency with the OPPS, we
would also propose to package the
ancillary service under the ASC
payment system for CY 2018. We are
proposing to continue this
reconciliation of packaged status for
subsequent calendar years. Comment
indicator ‘‘CH’’, which is discussed in
section XII.F. of this proposed rule, is
used in Addendum BB to this proposed
rule (which is available via the Internet
on the CMS Web site) to indicate
covered ancillary services for which we
are proposing a change in the ASC
payment indicator to reflect a proposed
change in the OPPS treatment of the
service for CY 2018.
All ASC covered ancillary services
and their proposed payment indicators
for CY 2018 are included in Addendum
BB to this proposed rule. We are
inviting public comments on this
proposal.
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D. Proposed ASC Payment for Covered
Surgical Procedures and Covered
Ancillary Services
1. Proposed ASC Payment for Covered
Surgical Procedures
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a. Background
Our ASC payment policies for
covered surgical procedures under the
revised ASC payment system are fully
described in the CY 2008 OPPS/ASC
final rule with comment period (72 FR
66828 through 66831). Under our
established policy, we use the ASC
standard ratesetting methodology of
multiplying the ASC relative payment
weight for the procedure by the ASC
conversion factor for that same year to
calculate the national unadjusted
payment rates for procedures with
payment indicators ‘‘G2’’ and ‘‘A2’’.
Payment indicator ‘‘A2’’ was developed
to identify procedures that were
included on the list of ASC covered
surgical procedures in CY 2007 and,
therefore, were subject to transitional
payment prior to CY 2011. Although the
4-year transitional period has ended and
payment indicator ‘‘A2’’ is no longer
required to identify surgical procedures
subject to transitional payment, we
retained payment indicator ‘‘A2’’
because it is used to identify procedures
that are exempted from application of
the office-based designation.
The rate calculation established for
device-intensive procedures (payment
indicator ‘‘J8’’) is structured so that the
packaged device payment amount is the
same as under the OPPS, and only the
service portion of the rate is subject to
the ASC standard ratesetting
methodology. In the CY 2017 OPPS/
ASC final rule with comment period (81
FR 79732 through 79753), we updated
the CY 2016 ASC payment rates for ASC
covered surgical procedures with
payment indicators of ‘‘A2,’’ ‘‘G2,’’ and
‘‘J8’’ using CY 2015 data, consistent
with the CY 2017 OPPS update. We also
updated payment rates for deviceintensive procedures to incorporate the
CY 2017 OPPS device offset percentages
calculated under the standard APC
ratesetting methodology as discussed
earlier in this section.
Payment rates for office-based
procedures (payment indicators ‘‘P2’’,
‘‘P3’’, and ‘‘R2’’) are the lower of the
MPFS nonfacility PE RVU-based
amount (we refer readers to the CY 2018
MPFS proposed rule) or the amount
calculated using the ASC standard
ratesetting methodology for the
procedure. In the CY 2017 OPPS/ASC
final rule with comment period, we
updated the payment amounts for
office-based procedures (payment
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indicators ‘‘P2’’, ‘‘P3’’, and ‘‘R2’’) using
the most recent available MPFS and
OPPS data. We compared the estimated
CY 2017 rate for each of the office-based
procedures, calculated according to the
ASC standard ratesetting methodology,
to the MPFS nonfacility PE RVU-based
amount to determine which was lower
and, therefore, would be the CY 2017
payment rate for the procedure under
our final policy for the revised ASC
payment system (§ 416.171(d)).
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75081), we
finalized our proposal to calculate the
CY 2014 payment rates for ASC covered
surgical procedures according to our
established methodologies, with the
exception of device removal procedures.
For CY 2014, we finalized a policy to
conditionally package payment for
device removal codes under the OPPS.
Under the OPPS, a conditionally
packaged code (status indicators ‘‘Q1’’
and ‘‘Q2’’) describes a HCPCS code
where the payment is packaged when it
is provided with a significant procedure
but is separately paid when the service
appears on the claim without a
significant procedure. Because ASC
services always include a covered
surgical procedure, HCPCS codes that
are conditionally packaged under the
OPPS are always packaged (payment
indicator ‘‘N1’’) under the ASC payment
system. Under the OPPS, device
removal procedures are conditionally
packaged and, therefore, would be
packaged under the ASC payment
system. There would be no Medicare
payment made when a device removal
procedure is performed in an ASC
without another surgical procedure
included on the claim; therefore, no
Medicare payment would be made if a
device was removed but not replaced.
To address this concern, for the device
removal procedures that are
conditionally packaged in the OPPS
(status indicator ‘‘Q2’’), we assigned the
current ASC payment indicators
associated with these procedures and
continued to provide separate payment
since CY 2014.
b. Proposed Update to ASC Covered
Surgical Procedure Payment Rates for
CY 2018
We are proposing to update ASC
payment rates for CY 2018 and
subsequent years using the established
rate calculation methodologies under
§ 416.171 and using our definition of
device-intensive procedures, as
discussed in section XII.C.1.b. of this
proposed rule. Because the proposed
OPPS relative payment weights are
based on geometric mean costs, the ASC
system would use geometric means to
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determine proposed relative payment
weights under the ASC standard
methodology. We are proposing to
continue to use the amount calculated
under the ASC standard ratesetting
methodology for procedures assigned
payment indicators ‘‘A2’’ and ‘‘G2’’.
We are proposing to calculate
payment rates for office-based
procedures (payment indicators ‘‘P2’’,
‘‘P3’’, and ‘‘R2’’) and device-intensive
procedures (payment indicator ‘‘J8’’)
according to our established policies
and, for device-intensive procedures,
using our modified definition of deviceintensive procedures, as discussed in
section XII.C.1.b. of this proposed rule.
Therefore, we are proposing to update
the payment amount for the service
portion of the device-intensive
procedures using the ASC standard
ratesetting methodology and the
payment amount for the device portion
based on the proposed CY 2018 OPPS
device offset percentages that have been
calculated using the standard OPPS
APC ratesetting methodology. Payment
for office-based procedures would be at
the lesser of the proposed CY 2018
MPFS nonfacility PE RVU-based
amount or the proposed CY 2018 ASC
payment amount calculated according
to the ASC standard ratesetting
methodology.
As we did for CYs 2014 through 2017,
for CY 2018, we are proposing to
continue our policy for device removal
procedures such that device removal
procedures that are conditionally
packaged in the OPPS (status indicators
‘‘Q1’’ and ‘‘Q2’’) would be assigned the
current ASC payment indicators
associated with these procedures and
would continue to be paid separately
under the ASC payment system.
We are inviting public comments on
these proposals.
2. Proposed Payment for Covered
Ancillary Services
a. Background
Our payment policies under the ASC
payment system for covered ancillary
services vary according to the particular
type of service and its payment policy
under the OPPS. Our overall policy
provides separate ASC payment for
certain ancillary items and services
integrally related to the provision of
ASC covered surgical procedures that
are paid separately under the OPPS and
provides packaged ASC payment for
other ancillary items and services that
are packaged or conditionally packaged
(status indicators ‘‘N’’, ‘‘Q1’’, and ‘‘Q2’’)
under the OPPS. In the CY 2013 OPPS/
ASC rulemaking (77 FR 45169 and 77
FR 68457 through 68458), we further
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clarified our policy regarding the
payment indicator assignment of codes
that are conditionally packaged in the
OPPS (status indicators ‘‘Q1’’ and
‘‘Q2’’). Under the OPPS, a conditionally
packaged code describes a HCPCS code
where the payment is packaged when it
is provided with a significant procedure
but is separately paid when the service
appears on the claim without a
significant procedure. Because ASC
services always include a surgical
procedure, HCPCS codes that are
conditionally packaged under the OPPS
are always packaged (payment indictor
‘‘N1’’) under the ASC payment system
(except for device removal codes as
discussed in section IV. of this proposed
rule). Thus, our policy generally aligns
ASC payment bundles with those under
the OPPS (72 FR 42495). In all cases, in
order for those ancillary services also to
be paid, ancillary items and services
must be provided integral to the
performance of ASC covered surgical
procedures for which the ASC bills
Medicare.
Our ASC payment policies provide
separate payment for drugs and
biologicals that are separately paid
under the OPPS at the OPPS rates. We
generally pay for separately payable
radiology services at the lower of the
MPFS nonfacility PE RVU-based (or
technical component) amount or the
rate calculated according to the ASC
standard ratesetting methodology (72 FR
42497). However, as finalized in the CY
2011 OPPS/ASC final rule with
comment period (75 FR 72050),
payment indicators for all nuclear
medicine procedures (defined as CPT
codes in the range of 78000 through
78999) that are designated as radiology
services that are paid separately when
provided integral to a surgical
procedure on the ASC list are set to
‘‘Z2’’ so that payment is made based on
the ASC standard ratesetting
methodology rather than the MPFS
nonfacility PE RVU amount (‘‘Z3’’),
regardless of which is lower.
Similarly, we also finalized our policy
to set the payment indicator to ‘‘Z2’’ for
radiology services that use contrast
agents so that payment for these
procedures will be based on the OPPS
relative payment weight using the ASC
standard ratesetting methodology and,
therefore, will include the cost for the
contrast agent (42 CFR 416.171(d)(2)).
ASC payment policy for
brachytherapy sources mirrors the
payment policy under the OPPS. ASCs
are paid for brachytherapy sources
provided integral to ASC covered
surgical procedures at prospective rates
adopted under the OPPS or, if OPPS
rates are unavailable, at contractor-
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priced rates (72 FR 42499). Since
December 31, 2009, ASCs have been
paid for brachytherapy sources provided
integral to ASC covered surgical
procedures at prospective rates adopted
under the OPPS.
Our ASC policies also provide
separate payment for: (1) Certain items
and services that CMS designates as
contractor-priced, including, but not
limited to, the procurement of corneal
tissue; and (2) certain implantable items
that have pass-through payment status
under the OPPS. These categories do not
have prospectively established ASC
payment rates according to ASC
payment system policies (72 FR 42502
and 42508 through 42509; 42 CFR
416.164(b)). Under the ASC payment
system, we have designated corneal
tissue acquisition and hepatitis B
vaccines as contractor-priced. Corneal
tissue acquisition is contractor-priced
based on the invoiced costs for
acquiring the corneal tissue for
transplantation. Hepatitis B vaccines are
contractor-priced based on invoiced
costs for the vaccine.
Devices that are eligible for passthrough payment under the OPPS are
separately paid under the ASC payment
system and are contractor-priced. Under
the revised ASC payment system (72 FR
42502), payment for the surgical
procedure associated with the passthrough device is made according to our
standard methodology for the ASC
payment system, based on only the
service (nondevice) portion of the
procedure’s OPPS relative payment
weight if the APC weight for the
procedure includes other packaged
device costs. We also refer to this
methodology as applying a ‘‘device
offset’’ to the ASC payment for the
associated surgical procedure. This
ensures that duplicate payment is not
provided for any portion of an
implanted device with OPPS passthrough payment status.
In the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66933
through 66934), we finalized that,
beginning in CY 2015, certain diagnostic
tests within the medicine range of CPT
codes for which separate payment is
allowed under the OPPS are covered
ancillary services when they are integral
to an ASC covered surgical procedure.
We finalized that diagnostic tests within
the medicine range of CPT codes
include all Category I CPT codes in the
medicine range established by CPT,
from 90000 to 99999, and Category III
CPT codes and Level II HCPCS codes
that describe diagnostic tests that
crosswalk or are clinically similar to
procedures in the medicine range
established by CPT. In the CY 2015
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period, we also finalized our policy to
pay for these tests at the lower of the
MPFS nonfacility PE RVU-based (or
technical component) amount or the
rate calculated according to the ASC
standard ratesetting methodology (79 FR
66933 through 66934). We finalized that
the diagnostic tests for which the
payment is based on the ASC standard
ratesetting methodology be assigned to
payment indicator ‘‘Z2’’ and revised the
definition of payment indicator ‘‘Z2’’ to
include reference to diagnostic services
and those for which the payment is
based on the MPFS nonfacility PE RVUbased amount be assigned payment
indicator ‘‘Z3,’’ and revised the
definition of payment indicator ‘‘Z3’’ to
include reference to diagnostic services.
b. Proposed Payment for Covered
Ancillary Services for CY 2018
For CY 2018 and subsequent years,
we are proposing to update the ASC
payment rates and to make changes to
ASC payment indicators as necessary to
maintain consistency between the OPPS
and ASC payment system regarding the
packaged or separately payable status of
services and the proposed CY 2018
OPPS and ASC payment rates and
subsequent year payment rates. We also
are proposing to continue to set the CY
2018 ASC payment rates and
subsequent year payment rates for
brachytherapy sources and separately
payable drugs and biologicals equal to
the OPPS payment rates for CY 2018
and subsequent year payment rates.
Covered ancillary services and their
proposed payment indicators for CY
2018 are listed in Addendum BB to this
proposed rule (which is available via
the Internet on the CMS Web site). For
those covered ancillary services where
the payment rate is the lower of the
proposed rates under the ASC standard
ratesetting methodology and the MPFS
proposed rates, the proposed payment
indicators and rates set forth in this
proposed rule are based on a
comparison using the proposed MPFS
rates effective January 1, 2018. For a
discussion of the MPFS rates, we refer
readers to the CY 2018 MPFS proposed
rule that is available on the CMS Web
site at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-FederalRegulation-Notices.html.
E. New Technology Intraocular Lenses
(NTIOLs)
1. NTIOL Application Cycle
Our process for reviewing
applications to establish new classes of
NTIOLs is as follows:
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• Applicants submit their NTIOL
requests for review to CMS by the
annual deadline. For a request to be
considered complete, we require
submission of the information that is
found in the guidance document
entitled ‘‘Application Process and
Information Requirements for Requests
for a New Class of New Technology
Intraocular Lenses (NTIOLs) or
Inclusion of an IOL in an Existing
NTIOL Class’’ posted on the CMS Web
site at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
ASCPayment/NTIOLs.html.
• We announce annually, in the
proposed rule updating the ASC and
OPPS payment rates for the following
calendar year, a list of all requests to
establish new NTIOL classes accepted
for review during the calendar year in
which the proposal is published. In
accordance with section 141(b)(3) of
Public Law 103–432 and our regulations
at 42 CFR 416.185(b), the deadline for
receipt of public comments is 30 days
following publication of the list of
requests in the proposed rule.
• In the final rule updating the ASC
and OPPS payment rates for the
following calendar year, we—
++ Provide a list of determinations
made as a result of our review of all new
NTIOL class requests and public
comments;
++ When a new NTIOL class is
created, identify the predominant
characteristic of NTIOLs in that class
that sets them apart from other IOLs
(including those previously approved as
members of other expired or active
NTIOL classes) and that is associated
with an improved clinical outcome.
++ Set the date of implementation of
a payment adjustment in the case of
approval of an IOL as a member of a
new NTIOL class prospectively as of 30
days after publication of the ASC
payment update final rule, consistent
with the statutory requirement.
++ Announce the deadline for
submitting requests for review of an
application for a new NTIOL class for
the following calendar year.
2. Requests to Establish New NTIOL
Classes for CY 2018
We did not receive any requests for
review to establish a new NTIOL class
for CY 2018 by March 1, 2017, the due
date published in the CY 2017 OPPS/
ASC final rule with comment period (81
FR 79748).
3. Payment Adjustment
The current payment adjustment for a
5-year period from the implementation
date of a new NTIOL class is $50 per
lens. Since implementation of the
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process for adjustment of payment
amounts for NTIOLs in 1999, we have
not revised the payment adjustment
amount, and we are not proposing to
revise the payment adjustment amount
for CY 2018.
F. Proposed ASC Payment and
Comment Indicators
1. Background
In addition to the payment indicators
that we introduced in the August 2,
2007 final rule, we created final
comment indicators for the ASC
payment system in the CY 2008 OPPS/
ASC final rule with comment period (72
FR 66855). We created Addendum DD1
to define ASC payment indicators that
we use in Addenda AA and BB to
provide payment information regarding
covered surgical procedures and
covered ancillary services, respectively,
under the revised ASC payment system.
The ASC payment indicators in
Addendum DD1 are intended to capture
policy-relevant characteristics of HCPCS
codes that may receive packaged or
separate payment in ASCs, such as
whether they were on the ASC list of
covered services prior to CY 2008;
payment designation, such as deviceintensive or office-based, and the
corresponding ASC payment
methodology; and their classification as
separately payable ancillary services,
including radiology services,
brachytherapy sources, OPPS passthrough devices, corneal tissue
acquisition services, drugs or
biologicals, or NTIOLs.
We also created Addendum DD2 that
lists the ASC comment indicators. The
ASC comment indicators used in
Addenda AA and BB to the proposed
rules and final rules with comment
period serve to identify, for the revised
ASC payment system, the status of a
specific HCPCS code and its payment
indicator with respect to the timeframe
when comments will be accepted. The
comment indicator ‘‘NP’’ is used in the
OPPS/ASC proposed rule to indicate
new codes for the next calendar year for
which the interim payment indicator
assigned is subject to comment. The
comment indicator ‘‘NP’’ also is
assigned to existing codes with
substantial revisions to their descriptors
such that we consider them to be
describing new services, as discussed in
the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60622). In the
CY 2017 OPPS/ASC final rule with
comment period, we responded to
public comments and finalized the ASC
treatment of all codes that were labeled
with comment indicator ‘‘NP’’ in
Addenda AA and BB to the CY 2016
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OPPS/ASC final rule with comment
period (80 FR 70497).
The ‘‘CH’’ comment indicator is used
in Addenda AA and BB to the proposed
rule (which are available via the Internet
on the CMS Web site) to indicate that
the payment indicator assignment has
changed for an active HCPCS code in
the current year and the next calendar
year; an active HCPCS code is newly
recognized as payable in ASCs; or an
active HCPCS code is discontinued at
the end of the current calendar year.
The ‘‘CH’’ comment indicators that are
published in the final rule with
comment period are provided to alert
readers that a change has been made
from one calendar year to the next, but
do not indicate that the change is
subject to comment.
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79748
through 79749), for CY 2017 and
subsequent years, we finalized our
policy to continue using the current
comment indicators of ‘‘NP’’ and ‘‘CH’’.
2. Proposed ASC Payment and
Comment Indicators
For CY 2018, there are proposed new
and revised Category I and III CPT codes
as well as new and revised Level II
HCPCS codes. Therefore, proposed
Category I and III CPT codes that are
new and revised for CY 2017 and any
new and existing Level II HCPCS codes
with substantial revisions to the code
descriptors for CY 2018 compared to the
CY 2017 descriptors that are included in
ASC Addenda AA and BB to this
proposed rule are labeled with proposed
new comment indicator ‘‘NP’’ to
indicate that these CPT and Level II
HCPCS codes are open for comment as
part of this proposed rule. Proposed
new comment indicator ‘‘NP’’ means a
new code for the next calendar year or
an existing code with substantial
revision to its code descriptor in the
next calendar year as compared to
current calendar year; comments will be
accepted on the proposed ASC payment
indicator for the new code.
We will respond to public comments
on ASC payment and comment
indicators and finalize their ASC
assignment in the CY 2018 OPPS/ASC
final rule with comment period. We
refer readers to Addenda DD1 and DD2
to this proposed rule (which are
available via the Internet on the CMS
Web site) for the complete list of ASC
payment and comment indicators
proposed for the CY 2018 update.
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G. Calculation of the Proposed ASC
Conversion Factor and the Proposed
ASC Payment Rates
1. Background
In the August 2, 2007 final rule (72 FR
42493), we established our policy to
base ASC relative payment weights and
payment rates under the revised ASC
payment system on APC groups and the
OPPS relative payment weights.
Consistent with that policy and the
requirement at section 1833(i)(2)(D)(ii)
of the Act that the revised payment
system be implemented so that it would
be budget neutral, the initial ASC
conversion factor (CY 2008) was
calculated so that estimated total
Medicare payments under the revised
ASC payment system in the first year
would be budget neutral to estimated
total Medicare payments under the prior
(CY 2007) ASC payment system (the
ASC conversion factor is multiplied by
the relative payment weights calculated
for many ASC services in order to
establish payment rates). That is,
application of the ASC conversion factor
was designed to result in aggregate
Medicare expenditures under the
revised ASC payment system in CY
2008 being equal to aggregate Medicare
expenditures that would have occurred
in CY 2008 in the absence of the revised
system, taking into consideration the
cap on ASC payments in CY 2007 as
required under section 1833(i)(2)(E) of
the Act (72 FR 42522). We adopted a
policy to make the system budget
neutral in subsequent calendar years (72
FR 42532 through 42533; 42 CFR
416.171(e)).
We note that we consider the term
‘‘expenditures’’ in the context of the
budget neutrality requirement under
section 1833(i)(2)(D)(ii) of the Act to
mean expenditures from the Medicare
Part B Trust Fund. We do not consider
expenditures to include beneficiary
coinsurance and copayments. This
distinction was important for the CY
2008 ASC budget neutrality model that
considered payments across the OPPS,
ASC, and MPFS payment systems.
However, because coinsurance is almost
always 20 percent for ASC services, this
interpretation of expenditures has
minimal impact for subsequent budget
neutrality adjustments calculated within
the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66857
through 66858), we set out a step-bystep illustration of the final budget
neutrality adjustment calculation based
on the methodology finalized in the
August 2, 2007 final rule (72 FR 42521
through 42531) and as applied to
updated data available for the CY 2008
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period. The application of that
methodology to the data available for
the CY 2008 OPPS/ASC final rule with
comment period resulted in a budget
neutrality adjustment of 0.65.
For CY 2008, we adopted the OPPS
relative payment weights as the ASC
relative payment weights for most
services and, consistent with the final
policy, we calculated the CY 2008 ASC
payment rates by multiplying the ASC
relative payment weights by the final
CY 2008 ASC conversion factor of
$41.401. For covered office-based
surgical procedures, covered ancillary
radiology services (excluding covered
ancillary radiology services involving
certain nuclear medicine procedures or
involving the use of contrast agents, as
discussed in section XII.D.2. of this
proposed rule), and certain diagnostic
tests within the medicine range that are
covered ancillary services, the
established policy is to set the payment
rate at the lower of the MPFS
unadjusted nonfacility PE RVU-based
amount or the amount calculated using
the ASC standard ratesetting
methodology. Further, as discussed in
the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66841 through
66843), we also adopted alternative
ratesetting methodologies for specific
types of services (for example, deviceintensive procedures).
As discussed in the August 2, 2007
final rule (72 FR 42517 through 42518)
and as codified at § 416.172(c) of the
regulations, the revised ASC payment
system accounts for geographic wage
variation when calculating individual
ASC payments by applying the pre-floor
and pre-reclassified IPPS hospital wage
indexes to the labor-related share,
which is 50 percent of the ASC payment
amount based on a GAO report of ASC
costs using 2004 survey data. Beginning
in CY 2008, CMS accounted for
geographic wage variation in labor cost
when calculating individual ASC
payments by applying the pre-floor and
pre-reclassified hospital wage index
values that CMS calculates for payment
under the IPPS, using updated Core
Based Statistical Areas (CBSAs) issued
by OMB in June 2003.
The reclassification provision in
section 1886(d)(10) of the Act is specific
to hospitals. We believe that using the
most recently available pre-floor and
pre-reclassified IPPS hospital wage
indexes results in the most appropriate
adjustment to the labor portion of ASC
costs. We continue to believe that the
unadjusted hospital wage indexes,
which are updated yearly and are used
by many other Medicare payment
systems, appropriately account for
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geographic variation in labor costs for
ASCs. Therefore, the wage index for an
ASC is the pre-floor and pre-reclassified
hospital wage index under the IPPS of
the CBSA that maps to the CBSA where
the ASC is located.
On February 28, 2013, OMB issued
OMB Bulletin No. 13–01, which
provides the delineations of all
Metropolitan Statistical Areas,
Metropolitan Divisions, Micropolitan
Statistical Areas, Combined Statistical
Areas, and New England City and Town
Areas in the United States and Puerto
Rico based on the standards published
on June 28, 2010 in the Federal Register
(75 FR 37246 through 37252) and 2010
Census Bureau data. (A copy of this
bulletin may be obtained at: https://
www.whitehouse.gov/sites/
whitehouse.gov/files/omb/bulletins/
2013/b13-01.pdf.) In the FY 2015 IPPS/
LTCH PPS final rule (79 FR 49951
through 49963), we implemented the
use of the CBSA delineations issued by
OMB in OMB Bulletin 13–01 for the
IPPS hospital wage index beginning in
FY 2015. In the CY 2015 OPPS/ASC
final rule with comment period (79 FR
66937), we finalized a 1-year transition
policy that we applied in CY 2015 for
all ASCs that experienced any decrease
in their actual wage index exclusively
due to the implementation of the new
OMB delineations. This transition does
not apply in CY 2018.
Generally, OMB issues major
revisions to statistical areas every 10
years, based on the results of the
decennial census. However, OMB
occasionally issues minor updates and
revisions to statistical areas in the years
between the decennial censuses. On
July 15, 2015, OMB issued OMB
Bulletin No. 15–01, which provides
updates to and supersedes OMB
Bulletin No. 13–01 that was issued on
February 28, 2013. The attachment to
OMB Bulletin No. 15–01 provides
detailed information on the update to
statistical areas since February 28, 2013.
The updates provided in OMB Bulletin
No. 15–01 are based on the application
of the 2010 Standards for Delineating
Metropolitan and Micropolitan
Statistical Areas to Census Bureau
population estimates for July 1, 2012
and July 1, 2013. The complete list of
statistical areas incorporating these
changes is provided in the attachment to
OMB Bulletin No. 15–01. According to
OMB, ‘‘[t]his bulletin establishes revised
delineations for the Nation’s
Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and
Combined Statistical Areas. The bulletin
also provides delineations of
Metropolitan Divisions as well as
delineations of New England City and
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Town Areas.’’ A copy of this bulletin
may be obtained on the Web site at:
https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/bulletins/
2015/15-01.pdf.
OMB Bulletin No. 15–01 made
changes that are relevant to the IPPS
and ASC wage index. We refer readers
to the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79750) for
a discussion of these changes and our
implementation of these revisions.
For CY 2018, the proposed CY 2018
ASC wage indexes fully reflect the OMB
labor market area delineations
(including the revisions to the OMB
labor market delineations discussed
above, as set forth in OMB Bulletin No.
15–01).
We note that, in certain instances,
there might be urban or rural areas for
which there is no IPPS hospital that has
wage index data that could be used to
set the wage index for that area. For
these areas, our policy has been to use
the average of the wage indexes for
CBSAs (or metropolitan divisions as
applicable) that are contiguous to the
area that has no wage index (where
‘‘contiguous’’ is defined as sharing a
border). For example, for CY 2014, we
applied a proxy wage index based on
this methodology to ASCs located in
CBSA 25980 (Hinesville-Fort Stewart,
GA) and CBSA 08 (Rural Delaware).
When all of the areas contiguous to
the urban CBSA of interest are rural and
there is no IPPS hospital that has wage
index data that could be used to set the
wage index for that area, we determine
the ASC wage index by calculating the
average of all wage indexes for urban
areas in the State (75 FR 72058 through
72059). (In other situations, where there
are no IPPS hospitals located in a
relevant labor market area, we continue
our current policy of calculating an
urban or rural area’s wage index by
calculating the average of the wage
indexes for CBSAs (or metropolitan
divisions where applicable) that are
contiguous to the area with no wage
index.)
2. Proposed Calculation of the ASC
Payment Rates
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a. Updating the ASC Relative Payment
Weights for CY 2018 and Future Years
We update the ASC relative payment
weights each year using the national
OPPS relative payment weights (and
MPFS nonfacility PE RVU-based
amounts, as applicable) for that same
calendar year and uniformly scale the
ASC relative payment weights for each
update year to make them budget
neutral (72 FR 42533). Consistent with
our established policy, we are proposing
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to scale the CY 2018 relative payment
weights for ASCs according to the
following method. Holding ASC
utilization, the ASC conversion factor,
and the mix of services constant from
CY 2016, we are proposing to compare
the total payment using the CY 2017
ASC relative payment weights with the
total payment using the CY 2018 ASC
relative payment weights to take into
account the changes in the OPPS
relative payment weights between CY
2017 and CY 2018. We are proposing to
use the ratio of CY 2017 to CY 2018 total
payments (the weight scalar) to scale the
ASC relative payment weights for CY
2018. The proposed CY 2018 ASC
weight scalar is 0.8995 and scaling
would apply to the ASC relative
payment weights of the covered surgical
procedures, covered ancillary radiology
services, and certain diagnostic tests
within the medicine range of CPT codes
which are covered ancillary services for
which the ASC payment rates are based
on OPPS relative payment weights.
Scaling would not apply in the case
of ASC payment for separately payable
covered ancillary services that have a
predetermined national payment
amount (that is, their national ASC
payment amounts are not based on
OPPS relative payment weights), such
as drugs and biologicals that are
separately paid or services that are
contractor-priced or paid at reasonable
cost in ASCs. Any service with a
predetermined national payment
amount would be included in the ASC
budget neutrality comparison, but
scaling of the ASC relative payment
weights would not apply to those
services. The ASC payment weights for
those services without predetermined
national payment amounts (that is,
those services with national payment
amounts that would be based on OPPS
relative payment weights) would be
scaled to eliminate any difference in the
total payment between the current year
and the update year.
For any given year’s ratesetting, we
typically use the most recent full
calendar year of claims data to model
budget neutrality adjustments. At the
time of this proposed rule, we have
available 98 percent of CY 2016 ASC
claims data.
To create an analytic file to support
calculation of the weight scalar and
budget neutrality adjustment for the
wage index (discussed below), we
summarized available CY 2016 ASC
claims by ASC and by HCPCS code. We
used the National Provider Identifier for
the purpose of identifying unique ASCs
within the CY 2016 claims data. We
used the supplier zip code reported on
the claim to associate State, county, and
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CBSA with each ASC. This file,
available to the public as a supporting
data file for the proposed rule, is posted
on the CMS Web site at: https://
www.cms.gov/Research-Statistics-Dataand-Systems/Files-for-Order/
LimitedDataSets/
ASCPaymentSystem.html.
b. Updating the ASC Conversion Factor
Under the OPPS, we typically apply
a budget neutrality adjustment for
provider level changes, most notably a
change in the wage index values for the
upcoming year, to the conversion factor.
Consistent with our final ASC payment
policy, for the CY 2017 ASC payment
system and subsequent years, in the CY
2017 OPPS/ASC final rule with
comment period (81 FR 79751 through
79753), we finalized our policy to
calculate and apply a budget neutrality
adjustment to the ASC conversion factor
for supplier level changes in wage index
values for the upcoming year, just as the
OPPS wage index budget neutrality
adjustment is calculated and applied to
the OPPS conversion factor. For CY
2018, we calculated this proposed
adjustment for the ASC payment system
by using the most recent CY 2016 claims
data available and estimating the
difference in total payment that would
be created by introducing the proposed
CY 2018 ASC wage indexes.
Specifically, holding CY 2016 ASC
utilization and service-mix and the
proposed CY 2018 national payment
rates after application of the weight
scalar constant, we calculated the total
adjusted payment using the CY 2017
ASC wage indexes (which would fully
reflect the new OMB delineations) and
the total adjusted payment using the
proposed CY 2018 ASC wage indexes.
We used the 50-percent labor-related
share for both total adjusted payment
calculations. We then compared the
total adjusted payment calculated with
the CY 2017 ASC wage indexes to the
total adjusted payment calculated with
the proposed CY 2018 ASC wage
indexes and applied the resulting ratio
of 1.0004 (the proposed CY 2018 ASC
wage index budget neutrality
adjustment) to the CY 2017 ASC
conversion factor to calculate the
proposed CY 2018 ASC conversion
factor.
Section 1833(i)(2)(C)(i) of the Act
requires that, if the Secretary has not
updated amounts established under the
revised ASC payment system in a
calendar year, the payment amounts
shall be increased by the percentage
increase in the Consumer Price Index
for all urban consumers (CPI–U), U.S.
city average, as estimated by the
Secretary for the 12-month period
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ending with the midpoint of the year
involved. Therefore, the statute does not
mandate the adoption of any particular
update mechanism, but it requires the
payment amounts to be increased by the
CPI–U in the absence of any update.
Because the Secretary updates the ASC
payment amounts annually, we adopted
a policy, which we codified at 42 CFR
416.171(a)(2)(ii), to update the ASC
conversion factor using the CPI–U for
CY 2010 and subsequent calendar years.
Therefore, the annual update to the ASC
payment system is the CPI–U (referred
to as the CPI–U update factor).
Section 3401(k) of the Affordable Care
Act amended section 1833(i)(2)(D) of the
Act by adding a new clause (v) which
requires that any annual update under
the ASC payment system for the year,
after application of clause (iv), shall be
reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II)
of the Act, effective with the calendar
year beginning January 1, 2011. The
statute defines the productivity
adjustment to be equal to the 10-year
moving average of changes in annual
economy-wide private nonfarm business
multifactor productivity (MFP) (as
projected by the Secretary for the 10year period ending with the applicable
fiscal year, year, cost reporting period,
or other annual period) (the ‘‘MFP
adjustment’’). Clause (iv) of section
1833(i)(2)(D) of the Act authorizes the
Secretary to provide for a reduction in
any annual update for failure to report
on quality measures. Clause (v) of
section 1833(i)(2)(D) of the Act states
that application of the MFP adjustment
to the ASC payment system may result
in the update to the ASC payment
system being less than zero for a year
and may result in payment rates under
the ASC payment system for a year
being less than such payment rates for
the preceding year.
In the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74516), we
finalized a policy that ASCs begin
submitting data on quality measures for
services beginning on October 1, 2012
for the CY 2014 payment determination
under the ASC Quality Reporting
(ASCQR) Program. In the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68499 through 68500), we
finalized a methodology to calculate
reduced national unadjusted payment
rates using the ASCQR Program reduced
update conversion factor that would
apply to ASCs that fail to meet their
quality reporting requirements for the
CY 2014 payment determination and
subsequent years. The application of the
2.0 percentage point reduction to the
annual update factor, which currently is
the CPI–U, may result in the update to
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the ASC payment system being less than
zero for a year for ASCs that fail to meet
the ASCQR Program requirements. We
amended §§ 416.160(a)(1) and 416.171
to reflect these policies.
In accordance with section
1833(i)(2)(C)(i) of the Act, before
applying the MFP adjustment, the
Secretary first determines the
‘‘percentage increase’’ in the CPI–U,
which we interpret cannot be a negative
percentage. Thus, in the instance where
the percentage change in the CPI–U for
a year is negative, we would hold the
CPI–U update factor for the ASC
payment system to zero. For the CY
2014 payment determination and
subsequent years, under section
1833(i)(2)(D)(iv) of the Act, we would
reduce the annual update by 2.0
percentage points for an ASC that fails
to submit quality information under the
rules established by the Secretary in
accordance with section 1833(i)(7) of
the Act. Section 1833(i)(2)(D)(v) of the
Act, as added by section 3401(k) of the
Affordable Care Act, requires that the
Secretary reduce the annual update
factor, after application of any quality
reporting reduction, by the MFP
adjustment, and states that application
of the MFP adjustment to the annual
update factor after application of any
quality reporting reduction may result
in the update being less than zero for a
year. If the application of the MFP
adjustment to the annual update factor
after application of any quality reporting
reduction would result in an MFPadjusted update factor that is less than
zero, the resulting update to the ASC
payment rates would be negative and
payments would decrease relative to the
prior year. We refer readers to the CY
2011 OPPS/ASC final rule with
comment period (75 FR 72062 through
72064) for examples of how the MFP
adjustment is applied to the ASC
payment system.
For this proposed rule, based on IHS
Global Insight’s (IGI’s) 2017 first quarter
forecast with historical data through the
fourth quarter of 2016, for the 12-month
period ending with the midpoint of CY
2018, the CPI–U update was projected to
be 2.3 percent. Also, based on IGI’s 2017
first quarter forecast, the MFP
adjustment for the period ending with
the midpoint of CY 2018 was projected
to be 0.4 percent. We finalized the
methodology for calculating the MFP
adjustment in the CY 2011 MPFS final
rule with comment period (75 FR 73394
through 73396) and revised it in the CY
2012 MPFS final rule with comment
period (76 FR 73300 through 73301) and
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70500 through
70501).
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For CY 2018, we are proposing to
reduce the CPI–U update of 2.3 percent
by the MFP adjustment of 0.4
percentage point, resulting in an MFPadjusted CPI–U update factor of 1.9
percent for ASCs meeting the quality
reporting requirements. Therefore, we
are proposing to apply a 1.9 percent
MFP-adjusted CPI–U update factor to
the CY 2017 ASC conversion factor for
ASCs meeting the quality reporting
requirements. The ASCQR Program
affected payment rates beginning in CY
2014 and, under this program, there is
a 2.0 percentage point reduction to the
CPI–U for ASCs that fail to meet the
ASCQR Program requirements. We are
proposing to reduce the CPI–U update
of 2.3 percent by 2.0 percentage points
for ASCs that do not meet the quality
reporting requirements and then apply
the 0.4 percentage point MFP
adjustment. Therefore, we are proposing
to apply a ¥0.1 percent MFP-adjusted
CPI–U update factor to the CY 2017 ASC
conversion factor for ASCs not meeting
the quality reporting requirements. We
also are proposing that if more recent
data are subsequently available (for
example, a more recent estimate of the
CY 2018 CPI–U update and MFP
adjustment), we would use such data, if
appropriate, to determine the CY 2018
ASC update for the final rule with
comment period.
For CY 2018, we are proposing to
adjust the CY 2017 ASC conversion
factor ($45.003) by the proposed wage
index budget neutrality factor of 1.0004
in addition to the MFP-adjusted CPI–U
update factor of 1.9 percent discussed
above, which results in a proposed CY
2018 ASC conversion factor of $45.876
for ASCs meeting the quality reporting
requirements. For ASCs not meeting the
quality reporting requirements, we are
proposing to adjust the CY 2017 ASC
conversion factor ($45.003) by the
proposed wage index budget neutrality
factor of 1.0004 in addition to the
quality reporting/MFP-adjusted CPI–U
update factor of ¥0.1 percent discussed
above, which results in a proposed CY
2018 ASC conversion factor of $44.976.
We are inviting public comments on
these proposals.
4. Comment Solicitation on ASC
Payment Reform
a. Historical Perspective
In 1982, Medicare implemented the
ASC benefit to provide payment to
ASCs to perform certain covered
surgical procedures.24 ASCs were
recognized by Medicare as a less costly
24 Omnibus Reconciliation Act of 1980 (ORA),
Pub. L. 96–499, 934(b), 94 Stat. 2599, 2637
(codified, as amended, at 42 U.S.C. 1395l(i)).
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alternative to hospital inpatient care
given differences in patient acuity and
specialization of services which
promotes efficient and cost-effective
delivery of care. Medicare’s initial
payment rates to ASCs were based on
ASC historical cost and charge data
from 1979 and 1980 collected from
approximately 40 ASCs and used to
establish four facility payment rate
groups (55 FR 4527).
The ASC facility payment rate was set
as a standard overhead amount based on
CMS’ (known then as the Health Care
Financing Administration (HCFA))
estimate of a fair fee, taking into account
the costs incurred by ASCs generally in
providing facility services in connection
with the performance of a specific
procedure. The Report of the Conference
Committee accompanying section 934 of
the Omnibus Budget Reconciliation Act
of 1980 (P.L. 96–499), which enacted
the ASC benefit in December 1980,
states, ‘‘This overhead factor is expected
to be calculated on a prospective basis
* * * utilizing sample survey and
similar techniques to establish
reasonable estimated overhead
allowances for each of the listed
procedures which take account of
volume (within reasonable limits)’’
(H.R. Rep. No 7479, 96th Cong., 2nd
Sess. 134 (1980)).
In 1987, we updated the ASC facility
payment rates for the first time since
1982. The updated rates were based on
the projected increase in the CPI–U from
September 1982 to January 1988. CMS
(then, HCFA) rebased payments to ASCs
in 1990, relying on a survey of 1986
ASC cost, charge, and utilization data.
The ASC payments were updated
annually based on the 1986 cost data
until implementation of the revised ASC
payment system in 2008.
Congress directed the GAO to conduct
a study comparing the relative costs of
procedures furnished in ASCs to those
furnished in HOPDs paid under the
OPPS, including examining the
accuracy of the APC codes with respect
to surgical procedures furnished in
ASCs. On November 30, 2006, the GAO
published the statutorily mandated
report entitled, ‘‘Medicare: Payment for
Ambulatory Surgical Centers Should Be
Based on the Hospital Outpatient
Payment System’’ (GAO–07–86).25 As
directed by section 626(d) of Pub. L.
108–173, the report included
recommendations on the following
issues:
1. Appropriateness of using groups of
covered services and relative weights
established for the OPPS as the basis of
payment for ASCs.
25 https://www.gao.gov/assets/260/253992.pdf.
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2. If the OPPS relative weights are
appropriate for this purpose, whether
the ASC payments should be based on
a uniform percentage of the payment
rates or weights under the OPPS, or
should vary, or the weights should be
revised based on specific procedures or
types of services.
3. Whether a geographic adjustment
should be used for ASC payment and,
if so, the labor and nonlabor shares of
such payment.
We refer readers to the CY 2008
OPPS/ASC final rule with comment
period (71 FR 42474) for a detailed
summary of the GAO’s methodology,
results, and recommendations. Notably,
based on the findings from the study,
the GAO recommended that CMS
implement a payment system for
procedures performed in ASCs based on
the OPPS, taking into account the lower
relative costs of procedures performed
in ASCs compared to HOPDs in
determining ASC payment rates.
We considered the report’s
methodology, findings, and
recommendations implementing the
current ASC payment system, effective
in 2008 (71 FR 42474). Consistent with
statutory requirements and the GAO’s
recommendations, we finalized policies
to implement a revised ASC payment
system based on the OPPS resource
costs and relativity of service offerings.
The payment system for ASC facility
services was designed as a prospective
payment system to pay all procedures
included in an APC a standard rate.
Under a prospective payment system,
payment is set to reflect the average cost
to furnish a service. That is, some cases
may be more costly than the average
while others may be less costly. This
type of payment system inherently
provides incentives for each facility to
be more efficient.
MedPAC conducts an annual review
of the ASC payment system and submits
its findings and recommendations in a
report to Congress. As part of this
review, MedPAC examines indicators
such as beneficiaries’ access to care,
capacity and supply of providers, and
volume of services, in part to assess the
adequacy of Medicare payments to
ASCs. Based on its analysis of indicators
of payment adequacy, in its March 2017
Report to Congress, MedPAC found that
the number of Medicare-certified ASCs
had increased, beneficiaries’ use of
ASCs had increased, and access to
capital has been adequate. As a result,
for CY 2018, MedPAC stated that
payments to ASCs are adequate and
recommended that no payment update
should be given for 2018 (that is, the
update factor would be 0 percent). In
addition, MedPAC recommended that
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Congress require ASCs to report cost
data to enable the Commission to
examine the growth of ASCs’ costs over
time and analyze Medicare payments
relative to the costs of efficient
providers, which would help inform
decisions about the ASC update. Also,
while MedPAC is concerned that the
CPI–U may not reflect ASCs’ cost
structure, until cost information is
available from ASCs, MedPAC cannot
determine whether an alternative
update factor would be more
appropriate.26
b. Solicitation of Comments
We are broadly interested in feedback,
including recommendations and ideas
for ASC payment system reform. We
recognize that ASCs provide a critically
important access point to beneficiaries
who may be too ill or have the need for
too complicated a procedure to be
treated in the physician office setting,
but for whom hospital care is either not
medically necessary or undesirable. The
current ASC payment system was
implemented in 2008 and major
revisions have not been made since that
time. Average ASC payment rates have
declined relative to OPPS payments
rates over the past 10 years, from 65
percent of average OPPS rates in CY
2008 to 56 percent (as proposed) of
average OPPS rates in CY 2018.
However, in the absence of ASC-specific
cost data, it is difficult, if not
impossible, to determine whether ASC
facility payment rates are in line with
ASC facility resource costs and the
impact on beneficiary access to care.
With respect to the update factor that
is applied to ASC payments, section
1833(i)(2)(C)(i) of the Act requires that,
if the Secretary has not updated the
payment amounts established under the
revised ASC payment system in a
calendar year, the payment amounts
shall be increased by the percentage
increase in the Consumer Price Index
for all urban consumers (CPI–U), (U.S.
city average), as estimated by the
Secretary for the 12-month period
ending with the midpoint of the year
involved. Therefore, the statute does not
mandate the adoption of any particular
update mechanism, except in the
absence of any update, when it requires
the payment amounts to be increased by
the increase in the CPI–U.
CMS adopted a policy, codified at 42
CFR 416.171(a)(2)(ii), to update the ASC
conversion factor using the CPI–U for
CY 2010 and subsequent calendar years.
26 MedPAC. March 2017 Report to Congress.
Chapter 5 ‘‘Ambulatory Surgical Center Services’’.
https://www.medpac.gov/docs/default-source/
reports/mar17_medpac_ch5.pdf?sfvrsn=0.
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Therefore, the annual update to the ASC
payment system is the CPI–U (referred
to as the CPI–U update factor). This
update factor is adjusted by the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act,
as required by section 1833(i)(2)(D)(v) of
the Act. In this proposed rule, we are
soliciting comment on the ASC payment
system update factor and are interested
in data from ASCs that would help
determine whether the ASC payment
system should continue to be updated
by the CPI–U, or by an alternative
update factor, such as the hospital
market basket, the Medicare Economic
Index, a blend of update factors or other
mechanism. The hospital market basket
update is typically higher than the CPI–
U, while the Medicare Economic Index
is typically lower. Because the rate
update is not applied in a budget
neutral manner, applying a higher
update factor would be a cost to the
Medicare program while applying a
lower update factor would result in
savings to the Medicare program. As
mentioned above, in the absence of an
alternative update, the Act requires
payments to ASCs to be increased in an
amount equal to the percentage increase
in the CPI–U.
With respect to the ASC update, in its
March 2017 Report to Congress,
MedPAC stated that ASCs have a much
higher share of expenses for supplies
and drugs than do hospitals or
physician offices, a much smaller share
of employee compensation costs than
hospitals, and a smaller share of all
other costs (such as rent) than physician
offices. We are seeking public comment
on information related to ASC costs for
items such as supplies, drugs, employee
compensation, rent and other inputs as
compared to those of hospitals or
physician offices, including qualitative
and quantitative data from ASCs.
Information on the cost structure of
ASCs will help to identify an
appropriate alternative update factor.
In addition, we are seeking public
comment on whether the Secretary
should collect cost data from ASCs to
use in determining ASC payment rates.
To the extent commenters recommend
that ASC cost data should be used in the
determination of ASC payment rates, we
are seeking comment on what specific
method of cost collection commenters
recommend (such as cost reports or a
survey). We recognize that the
submission of costs may be an
administrative burden to ASCs, and we
are interested in comments that detail
how we could mitigate the burden of
reporting costs on ASCs while also
collecting enough data to reliably use
such data in the determination of ASC
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costs. We note that the ability to
calculate ASC-specific costs may
obviate the need for tying the ASC
payment system to that of the OPPS. In
addition, collecting cost data from ASCs
could inform whether an alternative
input price index would be an
appropriate proxy for ASC costs or
whether an ASC-specific market basket
should be developed.
With respect to the ability to adopt
payment policies that exist under the
OPPS into the ASC payment system, as
discussed in prior rulemaking, due to
differences in the systems used to
process claims for hospitals and ASCs,
we were not able to implement certain
OPPS payment policies in the ASC
payment system, such as comprehensive
APCs, conditional packaging, and the
‘‘FD’’ value modifier for device credits
(79 FR 66923). ASC facilities report
services on a professional claim (or
CMS–1500) rather than an institutional
claim (or UB–04) used by hospitals. The
ASC claim form is processed in the
Medicare Claims System (MCS), the
same system used to process claims
submitted by physicians and other
clinicians, while hospital claims are
processed through the Fiscal
Intermediary Shared System (FISS). In
part because of differences in the claim
form and the claims processing systems,
it is not always possible to adopt OPPS
payment policies into the ASC payment
system. The resulting divergence in
payment policies between the two
systems may contribute to unintended
disparities in payment rates for the same
services. We are interested in
stakeholder comments on whether
billing on an institutional claim form
rather than a professional claim form
would address some of the issues
affecting ASC payment reform.
As noted earlier in this section, we are
broadly interested in feedback from
stakeholders and other interested parties
on potential reforms to the current ASC
payment system, including, but not
limited to (1) the rate update factor
applied to ASC payments, (2) whether
and how ASCs should submit costs, (3)
whether ASCs should bill on the
institutional claim form rather than the
professional claim form, and (4) other
ideas to improve payment accuracy for
ASCs.
5. Display of CY 2018 ASC Payment
Rates
Addenda AA and BB to this proposed
rule (which are available on the CMS
Web site) display the proposed updated
ASC payment rates for CY 2018 for
covered surgical procedures and
covered ancillary services, respectively.
For those covered surgical procedures
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and covered ancillary services where
the payment rate is the lower of the final
rates under the ASC standard ratesetting
methodology and the MPFS proposed
rates, the proposed payment indicators
and rates set forth in this proposed rule
are based on a comparison using the
proposed MPFS rates that would be
effective January 1, 2018. For a
discussion of the MPFS rates, we refer
readers to the CY 2018 MPFS proposed
rule.
The proposed payment rates included
in these addenda reflect the full ASC
payment update and not the reduced
payment update used to calculate
payment rates for ASCs not meeting the
quality reporting requirements under
the ASCQR Program. These addenda
contain several types of information
related to the proposed CY 2018
payment rates. Specifically, in
Addendum AA, a ‘‘Y’’ in the column
titled ‘‘To be Subject to Multiple
Procedure Discounting’’ indicates that
the surgical procedure would be subject
to the multiple procedure payment
reduction policy. As discussed in the
CY 2008 OPPS/ASC final rule with
comment period (72 FR 66829 through
66830), most covered surgical
procedures are subject to a 50-percent
reduction in the ASC payment for the
lower-paying procedure when more
than one procedure is performed in a
single operative session.
Display of the comment indicator
‘‘CH’’ in the column titled ‘‘Comment
Indicator’’ indicates a change in
payment policy for the item or service,
including identifying discontinued
HCPCS codes, designating items or
services newly payable under the ASC
payment system, and identifying items
or services with changes in the ASC
payment indicator for CY 2018. Display
of the comment indicator ‘‘NI’’ in the
column titled ‘‘Comment Indicator’’
indicates that the code is new (or
substantially revised) and that
comments will be accepted on the
interim payment indicator for the new
code. Display of the comment indicator
‘‘NP’’ in the column titled ‘‘Comment
Indicator’’ indicates that the code is new
(or substantially revised) and that
comments will be accepted on the ASC
payment indicator for the new code.
The values displayed in the column
titled ‘‘Proposed CY 2018 Payment
Weight’’ are the proposed relative
payment weights for each of the listed
services for CY 2018. The proposed
relative payment weights for all covered
surgical procedures and covered
ancillary services where the ASC
payment rates are based on OPPS
relative payment weights were scaled
for budget neutrality. Therefore, scaling
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was not applied to the device portion of
the device-intensive procedures,
services that are paid at the MPFS
nonfacility PE RVU-based amount,
separately payable covered ancillary
services that have a predetermined
national payment amount, such as drugs
and biologicals and brachytherapy
sources that are separately paid under
the OPPS, or services that are
contractor-priced or paid at reasonable
cost in ASCs.
To derive the proposed CY 2018
payment rate displayed in the
‘‘Proposed CY 2018 Payment Rate’’
column, each ASC payment weight in
the ‘‘Proposed CY 2018 Payment
Weight’’ column was multiplied by the
proposed CY 2018 conversion factor of
$45.876. The proposed conversion
factor includes a budget neutrality
adjustment for changes in the wage
index values and the annual update
factor as reduced by the productivity
adjustment (as discussed in section
XII.G.2.b. of this proposed rule).
In Addendum BB, there are no
relative payment weights displayed in
the ‘‘Proposed CY 2018 Payment
Weight’’ column for items and services
with predetermined national payment
amounts, such as separately payable
drugs and biologicals. The ‘‘Proposed
CY 2018 Payment’’ column displays the
proposed CY 2018 national unadjusted
ASC payment rates for all items and
services. The proposed CY 2018 ASC
payment rates listed in Addendum BB
for separately payable drugs and
biologicals are based on ASP data used
for payment in physicians’ offices in
April 2017.
Addendum EE provides the HCPCS
codes and short descriptors for surgical
procedures that are proposed to be
excluded from payment in ASCs for CY
2018. We are inviting public comments
on these proposals.
XIII. Requirements for the Hospital
Outpatient Quality Reporting (OQR)
Program
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A. Background
1. Overview
CMS seeks to promote higher quality
and more efficient healthcare for
Medicare beneficiaries. Consistent with
these goals, CMS has implemented
quality reporting programs for multiple
care settings including the quality
reporting program for hospital
outpatient care, known as the Hospital
Outpatient Quality Reporting (OQR)
Program, formerly known as the
Hospital Outpatient Quality Data
Reporting Program (HOP QDRP). The
Hospital OQR Program is generally
aligned with the quality reporting
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program for hospital inpatient services
known as the Hospital Inpatient Quality
Reporting (IQR) Program (formerly
known as the Reporting Hospital
Quality Data for Annual Payment
Update (RHQDAPU) Program).
In addition to the Hospital IQR and
Hospital OQR Programs, CMS has
implemented quality reporting programs
for other care settings that provide
financial incentives for the reporting of
quality data to CMS. These additional
programs include reporting for care
furnished by:
• Physicians and other eligible
professionals, under the Physician
Quality Reporting System (PQRS,
formerly referred to as the Physician
Quality Reporting Program Initiative
(PQRI)). We note that 2018 is the last
year of the PQRS payment adjustment.
Beginning in 2019, eligible clinicians
may be subject to upward or downward
payment adjustments under the Meritbased Incentive Payment System (MIPS)
or be able to earn a positive payment
incentives through participation in
certain advanced alternative payment
models (APMs) under the Quality
Payment Program (QPP) (81 FR 77008);
• Inpatient rehabilitation facilities,
under the Inpatient Rehabilitation
Facility Quality Reporting Program (IRF
QRP);
• Long-term care hospitals, under the
Long-Term Care Hospital Quality
Reporting Program (LTCH QRP);
• PPS-exempt cancer hospitals, under
the PPS-Exempt Cancer Hospital
Quality Reporting (PCHQR) Program;
• Ambulatory surgical centers, under
the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program;
• Inpatient psychiatric facilities,
under the Inpatient Psychiatric Facility
Quality Reporting (IPFQR) Program;
• Home health agencies, under the
Home Health Quality Reporting Program
(HH QRP); and
• Hospices, under the Hospice
Quality Reporting Program (HQRP).
In addition, CMS has implemented
several value-based purchasing
programs that link payment to
performance, including the Hospital
Value-Based Purchasing (VBP) Program;
the Hospital-Acquired Condition (HAC)
Reduction Program; and the End-Stage
Renal Disease (ESRD) Quality Incentive
Program (QIP); and the Quality Payment
Program (QPP).
In implementing the Hospital OQR
Program and other quality reporting
programs, we have focused on measures
that have high impact and support
national priorities for improved quality
and efficiency of care for Medicare
beneficiaries as reflected in the National
Quality Strategy (NQS) and the CMS
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Quality Strategy for conditions with
reported wide cost and treatment
variations despite established clinical
treatment guidelines. To the extent
possible under various authorizing
statutes, our ultimate goal is to align the
clinical quality measure requirements of
the various quality reporting programs.
As appropriate, we will consider the
adoption of measures with electronic
specifications to enable the collection of
this information for our quality
programs.
We refer readers to the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68467 through 68469) for
a discussion on the principles
underlying consideration for future
measures that we intend to use in
implementing this and other quality
reporting programs. In this proposed
rule, we are not proposing any changes
to these policies.
2. Statutory History of the Hospital OQR
Program
We refer readers to the CY 2011
OPPS/ASC final rule with comment
period (75 FR 72064 through 72065) for
a detailed discussion of the statutory
history of the Hospital OQR Program.
3. Regulatory History of the Hospital
OQR Program
We refer readers to the CY 2008
through 2017 OPPS/ASC final rules
with comment period (72 FR 66860
through 66875; 73 FR 68758 through
68779; 74 FR 60629 through 60656; 75
FR 72064 through 72110; 76 FR 74451
through 74492; 77 FR 68467 through
68492; 78 FR 75090 through 75120; 79
FR 66940 through 66966; 80 FR 70502
through 70526; and 81 FR 79753
through 79797). We have also codified
certain requirements under the Hospital
OQR Program at 42 CFR 419.46. In this
proposed rule, we are proposing
editorial changes to 42 CFR 419.46,
replacing the terms ‘‘Web’’ and ‘‘Web
site’’ with the terms ‘‘web’’ and ‘‘Web
site,’’ respectively.
B. Hospital OQR Program Quality
Measures
1. Considerations in the Selection of
Hospital OQR Program Quality
Measures
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74458 through 74460) for
a detailed discussion of the priorities we
consider for the Hospital OQR Program
quality measure selection. In this
proposed rule, we are not proposing any
changes to our measure selection policy.
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2. Accounting for Social Risk Factors in
the Hospital OQR Program
We understand that social risk factors
such as income, education, race and
ethnicity, employment, disability,
community resources, and social
support (certain factors of which are
also sometimes referred to as
socioeconomic status (SES) factors or
socio-demographic status (SDS) factors)
play a major role in health. One of our
core objectives is to improve beneficiary
outcomes including reducing health
disparities, and we want to ensure that
all beneficiaries, including those with
social risk factors, receive high quality
care. In addition, we seek to ensure that
the quality of care furnished by
providers and suppliers is assessed as
fairly as possible under our programs
while ensuring that beneficiaries have
adequate access to excellent care.
We have been reviewing reports
prepared by the Office of the Assistant
Secretary for Planning and Evaluation
(ASPE) 27 and the National Academies
of Sciences, Engineering, and Medicine
on the issue of measuring and
accounting for social risk factors in
CMS’ value-based purchasing and
quality reporting programs, and
considering options on how to address
the issue in these programs. On
December 21, 2016, ASPE submitted a
Report to Congress on a study it was
required to conduct under section 2(d)
of the Improving Medicare Post-Acute
Care Transformation (IMPACT) Act of
2014. The study analyzed the effects of
certain social risk factors of Medicare
beneficiaries on quality measures and
measures of resource use used in one or
more of nine Medicare value-based
purchasing programs.28 The report also
included considerations for strategies to
account for social risk factors in these
programs. In a January 10, 2017 report
released by the National Academies of
Sciences, Engineering, and Medicine,
that body provided various potential
methods for measuring and accounting
for social risk factors, including
stratified public reporting.29
27 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. Available at:
https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs.
28 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. Available at:
https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs.
29 National Academies of Sciences, Engineering,
and Medicine. 2017. Accounting for social risk
factors in Medicare payment. Washington, DC: The
National Academies Press.
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As noted in the FY 2017 IPPS/LTCH
PPS final rule, the NQF has undertaken
a 2-year trial period in which new
measures, measures undergoing
maintenance review, and measures
endorsed with the condition that they
enter the trial period can be assessed to
determine whether risk adjustment for
selected social risk factors is appropriate
for these measures. This trial entails
temporarily allowing inclusion of social
risk factors in the risk-adjustment
approach for these measures. At the
conclusion of the trial, NQF will issue
recommendations on the future
inclusion of social risk factors in risk
adjustment for these quality measures,
and we will closely review its findings.
As we continue to consider the
analyses and recommendations from
these reports and await the results of the
NQF trial on risk adjustment for quality
measures, we are continuing to work
with stakeholders in this process. As we
have previously communicated, we are
concerned about holding providers to
different standards for the outcomes of
their patients with social risk factors
because we do not want to mask
potential disparities or minimize
incentives to improve the outcomes for
disadvantaged populations. Keeping
this concern in mind, we are seeking
public comment on whether we should
account for social risk factors in the
Hospital OQR Program, and if so, what
method or combination of methods
would be most appropriate for
accounting for social risk factors.
Examples of methods include:
Confidential reporting to providers of
measure rates stratified by social risk
factors; public reporting of stratified
measure rates; and potential risk
adjustment of a particular measure as
appropriate based on data and evidence.
In addition, we are seeking public
comment on which social risk factors
might be most appropriate for reporting
stratified measure scores and/or
potential risk adjustment of a particular
measure. Examples of social risk factors
include, but are not limited to, dual
eligibility/low-income subsidy, race and
ethnicity, and geographic area of
residence. We are seeking comments on
which of these factors, including current
data sources where this information
would be available, could be used alone
or in combination, and whether other
data should be collected to better
capture the effects of social risk. We will
take commenters’ input into
consideration as we continue to assess
the appropriateness and feasibility of
accounting for social risk factors in the
Hospital OQR Program.
We look forward to working with
stakeholders as we consider the issue of
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accounting for social risk factors and
reducing health disparities in CMS
programs. Of note, implementing any of
the above methods would be taken into
consideration in the context of how this
and other CMS programs operate (for
example, data submission methods,
availability of data, statistical
considerations relating to reliability of
data calculations, among others), so we
also welcome comment on operational
considerations. CMS is committed to
ensuring that its beneficiaries have
access to and receive excellent care, and
that the quality of care furnished by
providers and suppliers is assessed
fairly in CMS programs.
3. Retention of Hospital OQR Program
Measures Adopted in Previous Payment
Determinations
We previously adopted a policy to
retain measures from the previous year’s
Hospital OQR Program measure set for
subsequent years’ measure sets in the
CY 2013 OPPS/ASC final rule with
comment period (77 FR 68471). Quality
measures adopted in a previous year’s
rulemaking are retained in the Hospital
OQR Program for use in subsequent
years unless otherwise specified. We
refer readers to that rule for more
information. In this proposed rule, we
are not proposing any changes to our
retention policy for previously adopted
measures.
4. Removal of Quality Measures From
the Hospital OQR Program Measure Set
a. Considerations in Removing Quality
Measures From the Hospital OQR
Program
In the FY 2010 IPPS/LTCH PPS final
rule (74 FR 43863), for the Hospital IQR
Program, we finalized a process for
immediate retirement, which we later
termed ‘‘removal,’’ of Hospital IQR
Program measures based on evidence
that the continued use of the measure as
specified raised patient safety concerns.
We adopted the same immediate
measure retirement policy for the
Hospital OQR Program in the CY 2010
OPPS/ASC final rule with comment
period (74 FR 60634 through 60635). We
refer readers to the CY 2013 OPPS/ASC
final rule with comment period (77 FR
68472 through 68473) for a discussion
of our reasons for changing the term
‘‘retirement’’ to ‘‘removal’’ in the
Hospital OQR Program. In this proposed
rule, we are not proposing any changes
to our policy to immediately remove
measures as a result of patient safety
concerns.
In the CY 2013 OPPS/ASC final rule
with comment period, we finalized a set
of criteria for determining whether to
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remove measures from the Hospital
OQR Program. We refer readers to the
CY 2013 OPPS/ASC final rule with
comment period (77 FR 68472 through
68473) for a discussion of our policy on
removal of quality measures from the
Hospital OQR Program. The benefits of
removing a measure from the Hospital
OQR Program will be assessed on a
case-by-case basis (79 FR 66941 through
66942). We note that, under this caseby-case approach, a measure will not be
removed solely on the basis of meeting
any specific criterion. We refer readers
to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68472
through 68473) for our list of factors
considered in removing measures from
the Hospital OQR Program. In this
proposed rule, we are not proposing any
changes to our measure removal policy.
b. Criteria for Removal of ‘‘Topped-Out’’
Measures
We refer readers to the CY 2015
OPPS/ASC final rule with comment
period where we finalized our proposal
to refine the criteria for determining
when a measure is ‘‘topped-out’’ (79 FR
66942). In this proposed rule, we are not
proposing any changes to our ‘‘toppedout’’ criteria policy.
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c. Measures Proposed for Removal From
the Hospital OQR Program
In this proposed rule, we are
proposing to remove a total of six
measures. Specifically, beginning with
the CY 2020 payment determination, we
are proposing to remove: (1) OP–21:
Median Time to Pain Management for
Long Bone Fracture; and (2) OP–26:
Hospital Outpatient Volume Data on
Selected Outpatient Surgical
Procedures. In addition, beginning with
the CY 2021 payment determination, we
are proposing to remove: (1) OP–1:
Median Time to Fibrinolysis; (2) OP–4:
Aspirin at Arrival; (3) OP–20: Door to
Diagnostic Evaluation by a Qualified
Medical Professional; and (4) OP–25:
Safe Surgery Checklist. By removing
these six measures, our intent is to
alleviate the maintenance costs and
administrative burden to hospitals
associated with retaining them. These
proposals are discussed in detail below.
(1) Proposed Removal of OP–21: Median
Time to Pain Management for Long
Bone Fracture Beginning With the CY
2020 Payment Determination
We refer readers to the CY 2011
OPPS/ASC final rule with comment
period (75 FR 72088), where we adopted
the OP–21: Median Time to Pain
Management for Long Bone Fracture
measure. This process of care measure
assesses the median time from
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emergency department arrival to time of
initial oral, nasal, or parenteral pain
medication (opioid and non-opioid)
administration for emergency
department patients with a principal
diagnosis of long bone fracture (LBF).
We have previously finalized a policy
to note that the benefits of removing a
measure from the Hospital OQR
Program will be assessed on a case-bycase basis (79 FR 66941 through 66942).
Accordingly, although it does not
exactly meet one of the specific measure
removal criteria finalized for the
Hospital OQR Program (77 FR 68472
through 68473), it has the potential to
lead to negative unintended
consequences (removal factor #7).
Therefore, we are proposing to remove
OP–21: Median Time to Pain
Management for Long Bone Fracture for
the CY 2020 payment determination and
subsequent years due to the concerns
described in more detail below.
Given the growing body of evidence
on the risks of opioid misuse, CMS has
developed a strategy to impact the
national opioid misuse epidemic by
combating non-medical use of
prescription opioids, opioid use
disorder, and overdose through the
promotion of safe and appropriate
opioid utilization, improved access to
treatment for opioid use disorders, and
evidence-based practices for acute and
chronic pain management.30
Due to the potential for a
misinterpretation of the intent of the
measure, we are concerned that OP–21:
Median Time to Pain Management for
Long Bone Fracture may create undue
pressure for hospital staff to prescribe
more opioids. We note that the measure
only assesses the time to initial, acute
administration of pain medication in a
specific acute clinical situation, and
does not promote long-term pain
medication prescriptions. In fact, this
measure assesses an element of
appropriate pain management,
specifically the time to pain medication
administration in the case of long bone
fracture. In addition, the measure
assesses the use of both opioid and nonopioid pain medications. While we
acknowledge that pain control is an
important issue for patients and clinical
care, and the measure does not call for
increased opioid prescriptions, many
factors outside the control of CMS
quality program requirements may
contribute to the perception of a link
between the measure and opioid
prescribing practices. Although we are
(2) Proposed Removal of OP–26:
Hospital Outpatient Volume Data on
Selected Outpatient Surgical Procedures
Beginning With the CY 2020 Payment
Determination
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74468), where we adopted
OP–26: Hospital Outpatient Volume
Data on Selected Outpatient Surgical
Procedures beginning with the CY 2014
payment determination. This measure,
which is submitted via a web-based
tool, collects surgical procedure volume
data on eight categories of procedures
frequently performed in the outpatient
hospital setting.
We believe there is a lack of evidence
to support this measure’s link to
improved clinical quality. The measure
requires hospitals to report on the
volumes of surgical procedures
performed at the facility.31 This
information, number of surgical
procedures, does not offer insight into
the facilities’ overall performance or
quality improvement in regards to
surgical procedures. Accordingly, this
measure meets the following measure
removal criterion: performance or
improvement on a measure does not
result in better patient outcomes (79 FR
66941). We believe the burden of this
30 CMS Opioid Misuse Strategy 2016. Retrieved
from: https://www.cms.gov/Outreach-andEducation/Outreach/Partnerships/PrescriptionDrug-Information-for-Partners-Items/CMS-OpioidMisuse-Strategy-2016.html.
31 OP–26 Measure Information Form. Retrieved
from: https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=QnetPublic%2
FPage%2FSpecsManualTemplate&cid=122877574
8170.
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not aware of any scientific studies that
support an association between this
measure and opioid prescribing
practices, out of an abundance of
caution, we are proposing to remove the
measure in order to remove any
potential ambiguity and to avoid
misinterpretation of the intent of the
measure. We also note that in the CY
2017 OPPS/ASC final rule with
comment period (81 FR 79856), we
removed the Pain Management
dimension of the HCAHPS Survey in
the Patient- and Caregiver-Centered
Experience of Care/Care Coordination
domain beginning with the FY 2018
program year for the Hospital VBP
Program for similar reasons. In addition,
in the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 20035 through
20039), we proposed new pain
management questions to replace the
current ones in the HCAHPS Survey
measure for the Hospital IQR Program.
We are inviting public comment on
our proposal to remove the OP–21:
Median Time to Pain Management for
Long Bone Fracture measure for the CY
2020 payment determination and
subsequent years as discussed above.
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measure, which is submitted via a webbased tool, outweighs the value, and
therefore, we are proposing to remove
OP–26: Hospital Outpatient Volume
Data on Selected Outpatient Surgical
Procedures for the CY 2020 payment
determination and subsequent years. We
also refer readers to section
XIV.B.3.b.(3) of this proposed rule,
where the ASCQR Program is proposing
to remove a similar measure.
We are inviting public comment on
our proposal to removal the OP–26:
Hospital Outpatient Volume Data on
Selected Outpatient Surgical Procedures
measure for the CY 2020 payment
determination and subsequent years as
discussed above.
(3) Proposed Removal of OP–1: Median
Time to Fibrinolysis Beginning With the
CY 2021 Payment Determination
We refer readers to the CY 2008
OPPS/ASC final rule with comment
period (referred to as ‘‘ED–AMI–2—
Median Time to Fibrinolysis’’ in 72 FR
66862 through 66865) where we
adopted OP–1: Median Time to
Fibrinolysis beginning with services
furnished in CY 2009. This chartabstracted measure assesses the median
time from ED arrival to administration
of fibrinolytic therapy in ED patients
with ST-segment elevation on the ECG
performed closest to ED arrival and
prior to transfer.
We believe that this measure meets
the following measure removal
criterion—the availability of a measure
that is more strongly associated with
desired patient outcomes for the
particular topic (79 FR 66941). We note
that the currently adopted OP–2:
Fibrinolytic Therapy Received Within
30 Minutes of ED Arrival (72 FR 66862
through 66865) has been designed with
a threshold that is based on a clinical
standard, allows us to measure this
topic area, and provides meaningful and
clinically relevant data on the receipt of
fibrinolytic therapy. National guidelines
recommend that fibrinolytic therapy be
given within 30 minutes of hospital
arrival in patients with ST-segment
elevation myocardial infarction.32 As a
result, because OP–1 measures only the
median time from door to needle and
does not note whether or not that value
exceeds the clinical best practice of 30
minutes, we do not believe that
reporting of OP–1 improves quality of
care or patient outcomes. In addition,
we believe that continuing to collect
OP–1 would be redundant with OP–2.
As a result, we are proposing to remove
OP–1: Median Time to Fibrinolysis for
the CY 2021 payment determination and
subsequent years. We note that although
OP–1: Median Time to Fibrinolysis is a
chart-abstracted measure, we do not
expect removing this measure would
reduce burden, as the data collected for
this measure is required to calculate
another program measure in the AMI
measure set (OP–2: Fibrinolytic Therapy
Received Within 30 Minutes of ED
Arrival) and will therefore continue to
be collected even if the proposal to
remove OP–1 is finalized as proposed.
We are inviting public comment on
our proposal to remove OP–1: Median
Time to Fibrinolysis for the CY 2021
payment determination and subsequent
years as discussed above.
(4) Proposed Removal of OP–4: Aspirin
at Arrival Beginning With the CY 2021
Payment Determination
We refer readers to the CY 2008
OPPS/ASC final rule with comment
period (72 FR 66862 through 66865)
where we adopted OP–4: Aspirin at
Arrival beginning with services
furnished in CY 2009. This chartabstracted measure assesses the rate of
patients with chest pain or possible
heart attack who received aspirin within
24 hours of arrival or before transferring
from the emergency department.
We previously finalized two criteria
for determining when a measure is
‘‘topped out’’ under the Hospital OQR
Program: (1) When there is statistically
indistinguishable performance at the
75th and 90th percentiles of national
facility performance; and (2) when the
measure’s truncated coefficient of
variation (COV) is less than or equal to
0.10 (79 FR 66942). Based on our
analysis of Hospital OQR Program
measure data, we have determined that
performance on this measure is so high
and unvarying that meaningful
distinctions in improvement cannot be
made; specifically, our analyses show
that there is statistically
indistinguishable performance at the
75th and 90th percentiles of national
facility performance for this measure.
These analyses are captured in the table
below.
OP–4 TOPPED OUT ANALYSIS
Number of
hospitals
Encounters
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
CY 2014 ...........................................................................................................
CY 2015 ...........................................................................................................
CY 2016 ...........................................................................................................
75th
percentile
1,706
1,749
1,803
100.00
100.00
100.00
90th
percentile
100.00
100.00
100.00
Truncated
COV
0.030
0.035
0.042
As displayed in the table above, there
is no distinguishable difference in
hospital performance between the 75th
and 90th percentiles under the OP–4
measure, and the truncated coefficient
of variation has been below 0.10 since
2014. Therefore, this OP–4 measure
meets both ‘‘topped out’’ measure
criteria for the ASCQR Program.
Thus, we believe the burden of
reporting this chart-abstracted measure
is not justified by the value of retaining
it in the program and are proposing to
remove OP–4: Aspirin at Arrival from
the program for the CY 2021 payment
determination and subsequent years.
We are inviting public comment on
our proposal to remove the OP–4:
Aspirin at Arrival measure for the CY
2021 payment determination and
subsequent years as discussed above.
(5) Proposed Removal of OP–20: Door to
Diagnostic Evaluation by a Qualified
Medical Professional Beginning With
the CY 2021 Payment Determination
32 Antman EM, Hand M, Armstrong PW, Bates ER,
Green LA, Halasyamani LK, et al. 2007 focused
update of the ACC/AHA 2004 Guidelines for the
Management of Patients With ST-Elevation
Myocardial Infarction: a report of the American
College of Cardiology/American Heart Association
Task Force on Practice Guidelines (Writing Group
to Review New Evidence and Update the ACC/AHA
2004 Guidelines for the Management of Patients
With ST-Elevation Myocardial Infarction). J Am
Coll Cardiol. 2008; 51:210–47.
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We refer readers to the CY 2011
OPPS/ASC final rule with comment
period (75 FR 72087–72088) where we
adopted OP–20: Door to Diagnostic
Evaluation by a Qualified Medical
Professional for the CY 2013 payment
determination. This chart-abstracted
measure assesses the time from ED
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arrival to provider contact for
Emergency Department patients.
During regular measure maintenance,
specific concerns about OP–20 were
raised by a Technical Expert Panel
(TEP), which was made up of experts
representing a variety of stakeholders
and was convened by a CMS contractor.
These concerns include: (1) Limited
evidence linking the measure to
improved patient outcomes; (2) validity
concerns related to wait times and the
accuracy of door-to-door time stamps;
and (3) potential for skewed measure
performance due to disease severity and
institution-specific confounders. After
our own analysis, we agree with the
TEP’s analysis and believe that this
measure meets the following measure
removal criterion: Performance or
improvement on a measure does not
result in better patient outcomes. As a
result, we believe the burden of
continuing to include this chartabstracted measure in the program
outweighs the benefits; and thus, we are
proposing to remove OP–20: Door to
Diagnostic Evaluation by a Qualified
Medical Professional for the CY 2021
payment determination and subsequent
years.
We are inviting public comment on
our proposal to remove OP–20: Door to
Diagnostic Evaluation by a Qualified
Medical Professional for the CY 2021
payment determination and subsequent
years as discussed above.
(6) Proposed Removal of OP–25: Safe
Surgery Checklist Use Beginning With
the CY 2021 Payment Determination
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74464–74466), where we
adopted OP–25: Safe Surgery Checklist
Use beginning with the CY 2014
payment determination. This structural
measure of hospital process assesses
whether a hospital employed a safe
surgery checklist that covered each of
33675
the three critical perioperative periods
(prior to administering anesthesia, prior
to skin incision, and prior to patient
leaving the operating room) for the
entire data collection period. Based on
our review of reported data under the
measure, this measure meets our first
criterion for measure removal that
measure performance is so high and
unvarying that meaningful distinctions
and improvements in performance can
no longer be made.
The Hospital OQR Program
previously finalized two criteria for
determining when a measure is ‘‘topped
out:’’ (1) when there is statistically
indistinguishable performance at the
75th and 90th percentiles of national
facility performance; and (2) when the
measure’s truncated coefficient of
variation is less than or equal to 0.10 (79
FR 66942). Our estimations indicate that
performance on this measure is trending
towards topped out status. This analysis
is captured in the table below.
OP–25 PERFORMANCE ANALYSIS
Number of
hospitals
Encounters
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
CY
CY
CY
CY
2012
2013
2014
2015
...............................................................................
...............................................................................
...............................................................................
...............................................................................
Based on the analysis above, the
national rate of ‘‘Yes’’ response for the
OP–25 measure is nearly 1.0, or 100
percent, nationwide, and has remained
at this level for the last two years. In
addition, the truncated coefficient of
variation has decreased such that it is
trending towards 0.10 and there is no
distinguishable difference in hospital
performance between the 75th and 90th
percentiles. We have previously stated
the benefits of removing a measure from
the Hospital OQR Program will be
assessed on a case-by-case basis (79 FR
66941 through 66942). We believe that
removal of this measure from the
Hospital OQR Program measure set is
appropriate, as there is little room for
improvement. We believe that the safe
surgical checklist is widely used and
that hospitals will continue its use. In
addition, removal of this measure would
alleviate the administrative burden to
hospitals associated with reporting on
this measure. As such, we believe the
reporting burden of this measure
outweigh the benefits of keeping the
measure in the Hospital OQR Program.
Therefore, we are proposing to
remove OP–25: Safe Surgery Checklist
Use for the CY 2021 payment
determination and subsequent years. We
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3,227
3,184
3,177
3,166
Rate
0.910
0.949
0.963
0.970
refer readers to section XIV.B.3.b.(2) of
this proposed rule, where the ASCQR
Program is also proposing to remove a
similar measure.
We are inviting public comment on
our proposal to remove the OP–25: Safe
Surgery Checklist Use measure for the
CY 2021 payment determination and
subsequent years as discussed above.
5. Proposal to Delay OP–37a–e:
Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS)
Survey-Based Measures Beginning With
the CY 2020 Payment Determination
We refer readers to the CY 2017
OPPS/ASC final rule with comment
period where we adopted OP–37a–e (81
FR 79771–79784), and finalized data
collection and data submission
timelines (81 FR 79792 through 79794).
These measures assess patients’
experience with care following a
procedure or surgery in a hospital
outpatient department by rating patient
experience as a means for empowering
patients and improving the quality of
their care.
In this proposed rule, we are
proposing to delay implementation of
the Outpatient and Ambulatory Surgery
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Fmt 4701
Sfmt 4702
75th
percentile
100.000
100.000
100.000
100.000
90th
percentile
100.000
100.000
100.000
100.000
Truncated
COV
0.314
0.232
0.196
0.176
Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS)
Survey Based Measures OP–37a–e
beginning with the CY 2020 payment
determination (2018 data collection)
and subsequent years. Since our
adoption of these measures, we have
come to believe that we lack important
operational and implementation data.
Specifically, we want to ensure that the
survey measures appropriately account
for patient response rates, both aggregate
and by survey administration method;
reaffirm the reliability of national OAS
CAHPS survey data; and appropriately
account for the burden associated with
administering the survey in the
outpatient setting of care. We note that
commenters expressed concern over the
burden associated with the survey in the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79777). We
believe that the national
implementation of the survey, which
began in January 2016 and will
conclude in December 2017, would
provide valuable information moving
forward. We plan to conduct analyses of
the national implementation data to
undertake any necessary modifications
to the survey tool and/or CMS systems.
We believe it is important to allow time
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20JYP2
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for any modifications before requiring
the survey under the Hospital OQR
Program. However, we continue to
believe that these measures address an
area of care that is not adequately
addressed in our current measure set
and will be useful to assess aspects of
care where the patient is the best or only
source of information. Further, we
continue to believe these measures will
enable objective and meaningful
comparisons between hospital
outpatient departments. Therefore, we
are proposing to delay implementation
of OP–37a–e beginning with the CY
2020 payment determination (2018 data
collection) until further action in future
rulemaking. We also refer readers to
section XIV.B.4. of this proposed rule
where we are making a similar proposal
in the ASCQR Program.
We are inviting public comment on
our proposal to delay the OAS CAHPS
survey measures beginning with the CY
2020 payment determination (2018 data
collection) as discussed above.
6. Previously Adopted Hospital OQR
Program Measure Set for the CY 2020
Payment Determination and Subsequent
Years
We refer readers to the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79784) for the previously
finalized measure set for the Hospital
OQR Program CY 2020 payment
determination and subsequent years.
These measures also are listed below.
PREVIOUSLY FINALIZED HOSPITAL OQR PROGRAM MEASURE SET FOR THE CY 2020 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
NQF No.
0287
0288
0290
0286
0289
0514
None
None
0513
None
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
0669
None
0491
0496
None
0662
0499
0661
.............
.............
.............
.............
.............
.............
.............
.............
None
None
0431
0658
0659
1536
2539
1822
None
2687
None
None
None
None
None
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
Measure name
OP–1: Median Time to Fibrinolysis.†
OP–2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival.
OP–3: Median Time to Transfer to Another Facility for Acute Coronary Intervention.
OP–4: Aspirin at Arrival.†
OP–5: Median Time to ECG.†
OP–8: MRI Lumbar Spine for Low Back Pain.
OP–9: Mammography Follow-up Rates.
OP–10: Abdomen CT—Use of Contrast Material.
OP–11: Thorax CT—Use of Contrast Material.
OP–12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into their ONC-Certified EHR System as Discrete Searchable Data.
OP–13: Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery.
OP–14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus Computed Tomography (CT).
OP–17: Tracking Clinical Results between Visits.†
OP–18: Median Time from ED Arrival to ED Departure for Discharged ED Patients.
OP–20: Door to Diagnostic Evaluation by a Qualified Medical Professional.
OP–21: Median Time to Pain Management for Long Bone Fracture.
OP–22: Left Without Being Seen.†
OP–23: Head CT or MRI Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke who Received Head CT or MRI Scan
Interpretation Within 45 minutes of ED Arrival.
OP–25: Safe Surgery Checklist Use.
OP–26: Hospital Outpatient Volume on Selected Outpatient Surgical Procedures.*
OP–27: Influenza Vaccination Coverage among Healthcare Personnel.
OP–29: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients.**
OP–30: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use.**
OP–31: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.***
OP–32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
OP–33: External Beam Radiotherapy for Bone Metastases.
OP–35: Admissions and Emergency Department (ED) Visits for Patients Receiving Outpatient Chemotherapy.
OP–36: Hospital Visits after Hospital Outpatient Surgery.
OP–37a: OAS CAHPS—About Facilities and Staff.****
OP–37b: OAS CAHPS—Communication About Procedure.****
OP–37c: OAS CAHPS—Preparation for Discharge and Recovery.****
OP–37d: OAS CAHPS—Overall Rating of Facility.****
OP–37e: OAS CAHPS—Recommendation of Facility.****
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
† We note that NQF endorsement for this measure was removed.
* OP–26:
Procedure
categories
and
corresponding
HCPCS
codes
are
located
at:
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1196289981244.
** We note that measure name was revised to reflect NQF title.
*** Measure voluntarily collected as set forth in section XIII.D.3.b. of the CY 2015 OPPS/ASC final rule with comment period (79 FR 66946
through 66947).
**** Proposed to delay measure reporting beginning with CY 2018 reporting and for subsequent years as discussed in section XIII.B.5. of this
proposed rule.
7. Summary of the Hospital OQR
Program Measure Set Proposed for the
CY 2020 and CY 2021 Payment
Determinations and Subsequent Years
In this proposed rule, we are not
proposing any new measures for the
Hospital OQR Program. However, we
are proposing to remove a number of
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19:14 Jul 19, 2017
Jkt 241001
measures for both the CY 2020 and 2021
payment determinations in section
XIII.B.4.c. of this proposed rule, above,
and we are proposing to delay OP–37a–
e beginning with the CY 2020 payment
determination (2018 data collection) in
section XIII.B.5. of this proposed rule.
The tables below outline the Hospital
OQR Program measure set we are
PO 00000
Frm 00120
Fmt 4701
Sfmt 4702
proposing in this proposed rule for the
CY 2020 and CY 2021 payment
determination and subsequent years,
respectively. Both of these charts reflect
the measure set as if our proposals to
remove measures and to delay reporting
of OP–37a–e beginning with CY 2018
reporting and for subsequent years are
finalized as proposed.
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
33677
HOSPITAL OQR PROGRAM MEASURE SET PROPOSED FOR THE CY 2020 PAYMENT DETERMINATION
NQF No.
0287
0288
0290
0286
0289
0514
None
None
0513
None
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
0669
None
0491
0496
None
0499
0661
.............
.............
.............
.............
.............
.............
.............
None
0431
0658
0659
1536
2539
1822
None
2687
None
None
None
None
None
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
Measure name
OP–1: Median Time to Fibrinolysis.†
OP–2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival.
OP–3: Median Time to Transfer to Another Facility for Acute Coronary Intervention.
OP–4: Aspirin at Arrival.†
OP–5: Median Time to ECG.†
OP–8: MRI Lumbar Spine for Low Back Pain.
OP–9: Mammography Follow-up Rates.
OP–10: Abdomen CT—Use of Contrast Material.
OP–11: Thorax CT—Use of Contrast Material.
OP–12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into their ONC-Certified EHR System as Discrete Searchable Data.
OP–13: Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery.
OP–14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus Computed Tomography (CT).
OP–17: Tracking Clinical Results between Visits.†
OP–18: Median Time from ED Arrival to ED Departure for Discharged ED Patients.
OP–20: Door to Diagnostic Evaluation by a Qualified Medical Professional.
OP–22: Left Without Being Seen.†
OP–23: Head CT or MRI Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke who Received Head CT or MRI Scan
Interpretation Within 45 minutes of ED Arrival.
OP–25: Safe Surgery Checklist Use.
OP–27: Influenza Vaccination Coverage among Healthcare Personnel.
OP–29: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients.*
OP–30: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use.*
OP–31: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.**
OP–32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
OP–33: External Beam Radiotherapy for Bone Metastases.
OP–35: Admissions and Emergency Department (ED) Visits for Patients Receiving Outpatient Chemotherapy.
OP–36: Hospital Visits after Hospital Outpatient Surgery.
OP–37a: OAS CAHPS—About Facilities and Staff.***
OP–37b: OAS CAHPS—Communication About Procedure.***
OP–37c: OAS CAHPS—Preparation for Discharge and Recovery.***
OP–37d: OAS CAHPS—Overall Rating of Facility.***
OP–37e: OAS CAHPS—Recommendation of Facility.***
† We note that NQF endorsement for this measure was removed.
° OP–26:
Procedure
categories
and
corresponding
HCPCS
codes
are
located
at:
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1196289981244.
* We note that measure name was revised to reflect NQF title.
** Measure voluntarily collected as set forth in section XIII.D.3.b. of the CY 2015 OPPS/ASC final rule with comment period (79 FR 66946
through 66947).
*** Proposed to delay measure reporting beginning with CY 2018 reporting and for subsequent years as discussed in section XIII.B.5. of this
proposed rule.
In addition, the table below outlines
the Hospital OQR Program measure set
we are proposing in this proposed rule
for the CY 2021 payment determination
and subsequent years.
HOSPITAL OQR PROGRAM MEASURE SET PROPOSED FOR THE CY 2021 PAYMENT DETERMINATION AND SUBSEQUENT
YEARS
NQF No.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
0288
0290
0289
0514
None
None
0513
None
.............
.............
.............
.............
.............
.............
.............
.............
0669
None
0491
0496
0499
0661
.............
.............
.............
.............
.............
.............
0431 .............
0658 .............
0659 .............
VerDate Sep<11>2014
Measure name
OP–2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival.
OP–3: Median Time to Transfer to Another Facility for Acute Coronary Intervention.
OP–5: Median Time to ECG.†
OP–8: MRI Lumbar Spine for Low Back Pain.
OP–9: Mammography Follow-up Rates.
OP–10: Abdomen CT—Use of Contrast Material.
OP–11: Thorax CT—Use of Contrast Material.
OP–12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into their ONC-Certified EHR System as Discrete Searchable Data.
OP–13: Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery.
OP–14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus Computed Tomography (CT).
OP–17: Tracking Clinical Results between Visits.†
OP–18: Median Time from ED Arrival to ED Departure for Discharged ED Patients.
OP–22: Left Without Being Seen.†
OP–23: Head CT or MRI Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke who Received Head CT or MRI Scan
Interpretation Within 45 minutes of ED Arrival.
OP–27: Influenza Vaccination Coverage among Healthcare Personnel.
OP–29: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients.*
OP–30: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use.*
19:14 Jul 19, 2017
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20JYP2
33678
Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
HOSPITAL OQR PROGRAM MEASURE SET PROPOSED FOR THE CY 2021 PAYMENT DETERMINATION AND SUBSEQUENT
YEARS—Continued
NQF No.
1536
2539
1822
None
2687
None
None
None
None
None
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
Measure name
OP–31: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.**
OP–32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
OP–33: External Beam Radiotherapy for Bone Metastases.
OP–35: Admissions and Emergency Department (ED) Visits for Patients Receiving Outpatient Chemotherapy.
OP–36: Hospital Visits after Hospital Outpatient Surgery.
OP–37a: OAS CAHPS—About Facilities and Staff.***
OP–37b: OAS CAHPS—Communication About Procedure.***
OP–37c: OAS CAHPS—Preparation for Discharge and Recovery.***
OP–37d: OAS CAHPS—Overall Rating of Facility.***
OP–37e: OAS CAHPS—Recommendation of Facility.***
† We note that NQF endorsement for this measure was removed.
° OP–26:
Procedure
categories
and
corresponding
HCPCS
codes
are
located
at:
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1196289981244.
* We note that measure name was revised to reflect NQF title.
** Measure voluntarily collected as set forth in section XIII.D.3.b. of the CY 2015 OPPS/ASC final rule with comment period (79 FR 66946
through 66947).
*** Proposed to delay measure reporting beginning with CY 2018 reporting and for subsequent years as discussed in section XIII.B.5. of this
proposed rule.
8. Hospital OQR Program Measures and
Topics for Future Consideration
In this proposed rule, we are seeking
public comment on: (1) Future measure
topics; and (2) future development of
OP–2: Fibrinolytic Therapy Received
Within 30 Minutes of ED Arrival as an
electronic clinical quality measure
(eCQM). These are discussed in detail
below.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
a. Future Measure Topics
We seek to develop a comprehensive
set of quality measures to be available
for widespread use for informed
decision-making and quality
improvement in the hospital outpatient
setting. The current measure set for the
Hospital OQR Program includes
measures that assess process of care,
imaging efficiency patterns, care
transitions, ED throughput efficiency,
Health Information Technology (health
IT) use, care coordination, and patient
safety. Measures are of various types,
including those of process, structure,
outcome, and efficiency. Through future
rulemaking, we intend to propose new
measures that help us further our goal
of achieving better health care and
improved health for Medicare
beneficiaries who receive health care in
hospital outpatient settings, while
aligning quality measures across the
Medicare program.
We are moving towards the use of
outcome measures and away from the
use of clinical process measures across
our Medicare quality reporting and
value-based purchasing programs. We
are inviting public comments on
possible measure topics for future
consideration in the Hospital OQR
Program. We specifically request
comment on any outcome measures that
VerDate Sep<11>2014
19:14 Jul 19, 2017
Jkt 241001
would be useful to add to the Hospital
OQR Program as well as any clinical
process measures that should be
eliminated from the Hospital OQR
Program.
b. Possible Future Adoption of the
Electronic Version of OP–2: Fibrinolytic
Therapy Received Within 30 Minutes of
Emergency Department Arrival
We have previously stated that
automated electronic extraction and
reporting of clinical quality data,
including measure results calculated
automatically by appropriately certified
health IT, could significantly reduce the
administrative burden on hospitals
under the Hospital OQR Program (81 FR
79785). In the CY 2017 OPPS/ASC final
rule with comment period (81 FR
79786), some commenters supported
CMS’ goal to incorporate electronic
clinical quality measures (eCQMs) in
the Hospital OQR Program.
OP–2: Fibrinolytic Therapy Received
Within 30 Minutes of Emergency
Department Arrival was finalized in the
CY 2008 OPPS/ASC final rule with
comment period (72 FR 66865), where
it was designated as ED–AMI–3. In the
CY 2009 OPPS/ASC final rule with
comment period (73 FR 68761), the
measure was re-labeled as OP–2 for the
CY 2010 payment determination and
subsequent years. OP–2 measures the
number of AMI patients receiving
fibrinolytic therapy during the ED visit
with a time from hospital arrival to
fibrinolysis of 30 minutes or less.
We are considering developing OP–2:
Fibrinolytic Therapy Received Within
30 Minutes of Emergency Department
Arrival 33 as an eCQM and proposing the
33 eCQI Resource Center: https://ecqi.healthit.gov/
eh/ecqms-2016-reporting-period/fibrinolytic-
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eCQM in future rulemaking. We note
that since OP–2 is not yet developed as
an eCQM, electronic measure
specifications are not available at this
time. We are considering OP–2 in
particular because we believe it is the
most feasible out of all the existing
Hospital OQR Program measures.
We are inviting public comment on
the possible future development and
future adoption of an eCQM version of
OP–2: Fibrinolytic Therapy Received
Within 30 Minutes of Emergency
Department Arrival.
9. Maintenance of Technical
Specifications for Quality Measures
CMS maintains technical
specifications for previously adopted
Hospital OQR Program measures. These
specifications are updated as we modify
the Hospital OQR Program measure set.
The manuals that contain specifications
for the previously adopted measures can
be found on the QualityNet Web site at:
https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=
QnetPublic%2FPage%2FQnet
Tier2&cid=1196289981244.
For a history of our policies regarding
maintenance of technical specifications
for quality measures, we refer readers to
the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60631), the CY
2011 OPPS/ASC final rule with
comment period (75 FR 72069), and the
CY 2013 OPPS/ASC final rule with
comment period (77 FR 68469 through
68470). In this proposed rule, we are not
proposing any changes to our technical
specifications policies.
therapy-received-within-30-minutes-hospitalarrival.
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10. Public Display of Quality Measures
a. Background
We refer readers to the CY 2014 and
CY 2017 OPPS/ASC final rules with
comment period (78 FR 75092 and 81
FR 79791, respectively) for our
previously finalized policies regarding
public display of quality measures.
In this proposed rule, we are
proposing to update public reporting for
the OP–18 measure.
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b. Public Reporting of OP–18c: Median
Time From Emergency Department
Arrival to Emergency Department
Departure for Discharged Emergency
Department Patients—Psychiatric/
Mental Health Patients
OP–18 was finalized for reporting for
the CY 2013 payment determination and
subsequent years in the CY 2011 OPPS/
ASC final rule with comment period (75
FR 72086). This measure addresses ED
efficiency in the form of the median
time from ED arrival to time of
departure from the ED for patients
discharged from the ED (also known as
ED throughput). Reducing the time
patients spend in the ED can improve
the quality of care. As discussed in the
measure specifications and Measure
Information Form (MIF), 34 35 OP–18
measure data is stratified into four
separate calculations: (1) OP–18a is
defined as the overall rate; (2) OP–18b
is defined as the reporting measure; (3)
OP–18c is defined as assessing
Psychiatric/Mental Health Patients; and
(4) OP–18d is defined as assessing
Transfer Patients.
Section 1833(t)(17)(E) of the Act,
requires that the Secretary establish
procedures to make data collected under
the Hospital OQR Program available to
the public and that such procedures
must ensure that a hospital has the
opportunity to review the data that are
to be made public, with respect to the
hospital prior to such data being made
public. Currently, and as detailed in the
OP–18 MIF, the OP–18 measure
publicly reports data only for the
calculations designated as OP–18b:
Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department Patients—
Reporting Measure, which excludes
34 A
Measure Information Form provides detail on
the rationale for a measure as well as the relevant
numerator statements, denominator statements and
measure calculations.
35 Hospital OQR Program ED Throughput
Measures Information Form: https://
www.qualitynet.org/dcs/ContentServer?c=Page&
pagename=QnetPublic%2FPage%2FSpecsManual
Template&cid=1228775748170.
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psychiatric/mental health patients and
transfer patients.36
The ICD–10 diagnostic codes for OP–
18c include numerous substance abuse
codes for inclusion in this subset, along
with numerous non-substance abuse
codes. We believe it is important to
publicly report data for OP–18c (Median
Time from Emergency Department
Arrival to Emergency Department
Departure for Discharged Emergency
Department Patients—Psychiatric/
Mental Health Patients) to address a
behavioral health gap in the publicly
reported Hospital OQR Program
measure set. Therefore, in this proposed
rule, we are proposing to also publicly
report OP–18c and begin public
reporting as early as July of 2018 using
data from patient encounters during the
third quarter of 2017. In addition, we
would make corresponding updates to
our MIF to reflect these proposals,37
such as: (1) Renaming OP–18b from
‘‘Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department Patients—
Reporting Measure’’ to ‘‘OP–18b:
Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department Patients—
Excluding Psychiatric/Mental Health
Patients and Transfer Patients;’’ and (2)
modifying the form to reflect that OP–
18c would also be publicly reported.
Administrative changes made to the
MIF would not affect hospital reporting
requirements or burden. The data
required for public reporting are already
collected and submitted by participating
outpatient hospital departments and
that our proposal to publicly report OP–
18c does not create additional burden.
We note that hospitals would be able to
preview this data in accordance with
our previously established 30-day
preview period procedures (81 FR
79791).
In developing this proposal, we also
considered proposing to publicly report
around July 2019 (not 2018 as proposed)
using data from patient encounters
occurring during the first quarter of
2018. However, we decided against this
timeline, because under this reporting
option, we would not be able to publicly
report behavioral health data until as
36 Hospital OQR Program ED Throughput
Measures Information Form: https://
www.qualitynet.org/dcs/ContentServer?c=
Page&pagename=QnetPublic%2FPage%2FSpecs
ManualTemplate&cid=1228775748170.
37 Hospital OQR Program ED Throughput
Measures Information Form: https://
www.qualitynet.org/dcs/ContentServer?c=Page&
pagename=QnetPublic%2FPage%2FSpecsManual
Template&cid=1228775748170.
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33679
early as July of 2019, creating a delay in
our efforts to address the behavioral
health data gap in the publicly reported
measure set.
We are inviting public comment on
our proposal to publicly report OP–18c:
Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department Patients—
Psychiatric/Mental Health Patients
beginning with third quarter 2017 data
as discussed above.
C. Administrative Requirements
1. QualityNet Account and Security
Administrator
The previously finalized QualityNet
security administrator requirements,
including setting up a QualityNet
account and the associated timelines,
are described in the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75108 through 75109). In that final rule
with comment period, we codified these
procedural requirements at 42 CFR
419.46(a).
2. Requirements Regarding Participation
Status
a. Background
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75108 through 75109) and
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70519) for
requirements for participation and
withdrawal from the Hospital OQR
Program. We also codified these
procedural requirements at 42 CFR
419.46(a) and 42 CFR 419.46(b). In this
proposed rule, we are proposing
changes to the NOP submission
deadline, as described below.
b. Proposed Changes to the NOP
Submission Deadline
We finalized in the CY 2014 OPPS/
ASC final rule with comment period (78
FR 75108 through 75109) that
participation in the Hospital OQR
Program requires that hospitals must: (1)
Register on the QualityNet Web site
before beginning to report data; (2)
identify and register a QualityNet
security administrator; and (3) complete
and submit an online participation form
available at the QualityNet.org Web site
if this form has not been previously
completed, if a hospital has previously
withdrawn, or if the hospital acquires a
new CMS Certification Number (CCN).
In addition, in the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75108 through 75109) we finalized the
requirement that hospitals must submit
the NOP according to the following
deadlines:
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• If a hospital has a Medicare
acceptance date before January 1 of the
year prior to the affected annual
payment update, the hospital must
complete and submit to CMS a
completed Hospital OQR Program
Notice of Participation Form by July 31
of the calendar year prior to the affected
annual payment update.
• If a hospital has a Medicare
acceptance date on or after January 1 of
the year prior to the affected annual
payment update, the hospital must
submit a completed participation form
no later than 180 days from the date
identified as its Medicare acceptance
date.
These requirements are also codified
at 42 CFR 419.46(a).
In this proposed rule, beginning with
the CY 2020 payment determination, we
are proposing to: (1) Revise the NOP
submission deadline described above,
and (2) make corresponding revisions at
42 CFR 419.46(a). Specifically, we are
proposing to change the NOP
submission deadlines such that
hospitals are required to submit the
NOP any time prior to registering on the
QualityNet Web site, rather than by the
deadlines specified above. For example,
under this proposal, and in accordance
with the data submission deadlines
described in section XIII.D.1. of this
proposed rule, below and finalized in
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70519 through
70520), a hospital submitting data for
Q1 2019 encounters would be required
to submit the NOP only prior to
registering on the QualityNet Web site,
which must be done prior to the data
submission deadline of August 1, 2019
(80 FR 70519 through 70520).
We believe this proposed timeline is
appropriate, because registration with
the QualityNet Web site is necessary to
submit data. We believe that extending
the NOP submission deadline will better
enable hospitals to meet the Hospital
OQR Program participation
requirements.
As discussed above, we also are
proposing to make conforming revisions
at 42 CFR 419.46(a).
We are inviting public comment on
our proposals as discussed above.
D. Form, Manner, and Timing of Data
Submitted for the Hospital OQR
Program
1. Hospital OQR Program Annual
Payment Determinations
In the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75110
through 75111) and the CY 2016 OPPS/
ASC final rule with comment period (80
FR 70519 through 70520), we specified
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our data submission deadlines. We also
codified our submission requirements at
42 CFR 419.46(c).
We refer readers to the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70519 through 70520),
where we finalized our proposal to shift
the quarters upon which the Hospital
OQR Program payment determinations
are based, beginning with the CY 2018
payment determination. The finalized
deadlines for the CY 2020 payment
determination and subsequent years are
illustrated in the tables below.
submission deadlines as posted on the
QualityNet Web site.
These policies are also codified at 42
CFR 419.46(c)(3). In this proposed rule,
we are proposing to: (1) Align the
timeline specifying the initial quarter
for which hospitals must submit data for
all hospitals that did not participate in
the previous year’s Hospital OQR
Program, rather than specifying different
timelines for hospitals with Medicare
acceptance dates before versus after
January 1 of the year prior to an affected
annual payment update; and (2) make
conforming revisions at 42 CFR
419.46(c)(3). Specifically, we are
CY 2020 PAYMENT DETERMINATION
proposing that any hospital that did not
AND SUBSEQUENT YEARS
participate in the previous year’s
Hospital OQR Program must submit
Clinical data
Patient encounter quarter
submission
data beginning with encounters
deadline
occurring during the first calendar
quarter of the year prior to the affected
Q2 2018 (April 1–June 30) ...
11/1/2018
annual payment update. We note that
Q3 2018 (July 1–September
30) .....................................
2/1/2019 hospitals must still follow data
submission deadlines corresponding to
Q4 2018 (October 1–December 31) ...............................
5/1/2019 the quarter for which they are reporting
data as posted on the QualityNet Web
Q1 2019 (January 1–March
31) .....................................
8/1/2019 site.
We are inviting public comment on
In this proposed rule, for the CY 2020 our proposals to align the initial data
payment determination and subsequent submission timeline for all hospitals
years, we are proposing to revise the
that did not participate in the previous
data submission requirements for
year’s Hospital OQR Program and to
hospitals that did not participate in the
make conforming revisions at 42 CFR
previous year’s Hospital OQR Program.
419.46(c)(3).
Specifically, we are proposing to revise
2. Requirements for Chart-Abstracted
the first quarter for which newly
Measures Where Patient-Level Data Are
participating hospitals are required to
Submitted Directly to CMS for the CY
submit data (see details below). We are
not proposing changes to the previously 2021 Payment Determination and
Subsequent Years
finalized data submission deadlines for
We refer readers to the CY 2013
each quarter.
OPPS/ASC final rule with comment
In the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68482), we period (77 FR 68481 through 68484) for
a discussion of the form, manner, and
finalized the following data submission
timing for data submission requirements
requirements for hospitals that did not
of chart-abstracted measures for the CY
participate in the previous year’s
2014 payment determination and
Hospital OQR Program:
• If a hospital has a Medicare
subsequent years.
In this proposed rule, we are not
acceptance date before January 1 of the
proposing any changes to our policies
year prior to the affected annual
regarding the submission of chart
payment update, the hospital must
abstracted measure data where patientsubmit data beginning with encounters
level data are submitted directly to
occurring during the first calendar
CMS.
quarter of the year prior to the affected
We note that, in section XIII.B.4.c. of
annual payment update;
this proposed rule, we are proposing to
• If a hospital has a Medicare
remove OP–21: Median Time to Pain
acceptance date on or after January 1 of
Management for Long Bone Fracture for
the year prior to the affected annual
the CY 2020 payment determination and
payment update, the hospital must
subsequent years and OP–1: Median
submit data for encounters beginning
Time to Fibrinolysis, OP–4: Aspirin at
with the first full quarter following
Arrival, and OP–20: Door to Diagnostic
submission of the completed Hospital
Evaluation by a Qualified Medical
OQR Program Notice of Participation
Professional for the CY 2021 payment
Form; and
• Hospitals with a Medicare
determination and subsequent years.
acceptance date before or after January
Therefore, if these proposals are
1 of the year prior to an affected annual
finalized as proposed, the following
payment update must follow data
previously finalized Hospital OQR
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Program chart-abstracted measures will
require patient-level data to be
submitted for the CY 2021 payment
determination and subsequent years:
• OP–2: Fibrinolytic Therapy
Received Within 30 Minutes of ED
Arrival (NQF #0288);
• OP–3: Median Time to Transfer to
Another Facility for Acute Coronary
Intervention (NQF #0290);
• OP–5: Median Time to ECG (NQF
#0289);
• OP–18: Median Time from ED
Arrival to ED Departure for Discharged
ED Patients (NQF #0496);
• OP–23: Head CT Scan Results for
Acute Ischemic Stroke or Hemorrhagic
Stroke Patients who Received Head CT
Scan Interpretation Within 45 Minutes
of ED Arrival (NQF #0661).
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3. Claims-Based Measure Data
Requirements for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75111 through 75112) for
a discussion of the general claims-based
measure data submission requirements
for the CY 2015 payment determination
and subsequent years. In this proposed
rule, we are not proposing any changes
to our claims-based measures
submission policies for the CY 2020
payment determination and subsequent
years.
There are a total of nine claims-based
measures for the CY 2020 payment
determination and subsequent years:
• OP–8: MRI Lumbar Spine for Low
Back Pain (NQF #0514);
• OP–9: Mammography Follow-Up
Rates;
• OP–10: Abdomen CT—Use of
Contrast Material;
• OP–11: Thorax CT—Use of Contrast
Material (NQF #0513);
• OP–13: Cardiac Imaging for
Preoperative Risk Assessment for NonCardiac, Low Risk Surgery (NQF #0669);
• OP–14: Simultaneous Use of Brain
Computed Tomography (CT) and Sinus
Computed Tomography (CT);
• OP–32: Facility 7-Day RiskStandardized Hospital Visit Rate after
Outpatient Colonoscopy (NQF #2539);
• OP–35: Admissions and Emergency
Department Visits for Patients Receiving
Outpatient Chemotherapy; and
• OP–36: Hospital Visits after
Hospital Outpatient Surgery (NQF
#2687).
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4. Data Submission Requirements for
the OP–37a–e: Outpatient and
Ambulatory Surgery Consumer
Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based
Measures for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79792 through 79794) for
a discussion of the previously finalized
requirements related to survey
administration and vendors for the OAS
CAHPS Survey-based measures.
However, we refer readers to section
XIII.B.5. of this proposed rule, where we
are proposing to delay implementation
of the OP–37a–e OAS CAHPS Surveybased measures beginning with the CY
2020 payment determination (2018 data
collection) until further action in future
rulemaking.
As noted in the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79815) some commenters suggested
shortening sections of the survey, such
as the ‘‘About You’’ section. We
continue to evaluate the utility of
individual questions as we collect new
data from the survey’s voluntary
national implementation, and will
consider different options for shortening
the OAS CAHPS Survey without the
loss of important data in the future.
Specifically, we continue to consider
the removal of two demographic
questions—the ‘‘gender’’ and ‘‘age’’
questions—from the OAS CAHPS
Survey in a future update.
5. Data Submission Requirements for
Previously Finalized Measures for Data
Submitted via a Web-Based Tool for the
CY 2020 Payment Determination and
Subsequent Years
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75112 through 75115) and
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70521) and the
CMS QualityNet Web site (https://
www.qualitynet.org/dcs/Content
Server?c=Page&pagename=Qnet
Public%2FPage%2FQnetTier2&
cid=1205442125082) for a discussion of
the requirements for measure data
submitted via the CMS QualityNet Web
site for the CY 2017 payment
determination and subsequent years. In
addition, we refer readers to the CY
2014 OPPS/ASC final rule with
comment period (78 FR 75097 through
75100) for a discussion of the
requirements for measure data
(specifically, the Influenza Vaccination
Coverage Among Healthcare Personnel
measure (NQF #0431)) submitted via the
Centers for Disease Control and
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33681
Prevention (CDC) NHSN Web site. In
this proposed rule, we are not proposing
any changes to our policies regarding
the submission of measure data
submitted via a web-based tool.
We note that, in section XIII.B.4.c. of
this proposed rule, we are proposing to
remove OP–25: Safe Surgery Checklist
Use (beginning with CY 2021), and OP–
26: Hospital Outpatient Volume on
Selected Outpatient Surgical Procedures
(beginning with CY 2020). Therefore, if
these proposals are finalized as
proposed, the following web-based
quality measures previously finalized
and retained in the Hospital OQR
Program will require data to be
submitted via a web-based tool (CMS’
QualityNet Web site or CDC’s NHSN
Web site) for the CY 2021 payment
determination and subsequent years:
• OP–12: The Ability for Providers
with HIT to Receive Laboratory Data
Electronically Directly into their ONCCertified EHR System as Discrete
Searchable Data (via CMS’ QualityNet
Web site);
• OP–17: Tracking Clinical Results
between Visits (NQF #0491) (via CMS’
QualityNet Web site);
• OP–22: Left Without Being Seen
(NQF #0499) (via CMS’ QualityNet Web
site);
• OP–27: Influenza Vaccination
Coverage among Healthcare Personnel
(via the CDC NHSN Web site) (NQF
#0431);
• OP–29: Appropriate Follow-up
Interval for Normal Colonoscopy in
Average Risk Patients (NQF #0658) (via
CMS’ QualityNet Web site);
• OP–30: Colonoscopy Interval for
Patients with a History of Adenomatous
Polyps—Avoidance of Inappropriate
Use (NQF #0659) (via CMS’ QualityNet
Web site);
• OP–31: Cataracts: Improvement in
Patient’s Visual Function within 90
Days Following Cataract Surgery (NQF
#1536) (via CMS’ QualityNet Web site);
and
• OP–33: External Beam
Radiotherapy (EBRT) for Bone
Metastases (NQF #1822) (via CMS’
QualityNet Web site).
6. Population and Sampling Data
Requirements for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2011
OPPS/ASC final rule with comment
period (75 FR 72100 through 72103) and
the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74482 through
74483) for discussions of our population
and sampling requirements.
In this proposed rule, we are not
proposing any changes to our
population and sampling requirements.
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7. Hospital OQR Program Validation
Requirements for Chart-Abstracted
Measure Data Submitted Directly to
CMS for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68484 through 68487) and
the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66964 through
66965) for a discussion of finalized
policies regarding our validation
requirements. We also refer readers to
the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68486 through
68487) for a discussion of finalized
policies regarding our medical record
validation procedure requirements. We
codified these policies at 42 CFR
419.46(e). For the CY 2018 payment
determination and subsequent years,
validation is based on four quarters of
data ((validation quarter 1 (January 1–
March 31), validation quarter 2 (April
1–June 30), validation quarter 3 (July 1–
September 30), and validation quarter 4
(October 1–December 31)) (80 FR
70524).
In this proposed rule, we are: (1)
Clarifying the hospital selection process
previously finalized for validation; (2)
proposing to codify the procedures for
targeting hospitals at 42 CFR 419.46(e);
and (3) proposing to formalize and
update our educational review process.
These are discussed in more detail
below.
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a. Clarification
In the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74485), we
finalized a validation selection process
in which we select a random sample of
450 hospitals for validation purposes,
and select an additional 50 hospitals
based on the following specific criteria:
• Hospital fails the validation
requirement that applies to the previous
year’s payment determination; or
• Hospital has an outlier value for a
measure based on the data it submits.
We defined an ‘‘outlier value’’ for
purposes of this targeting as a measure
value that appears to deviate markedly
from the measure values for other
hospitals. Specifically, we would select
hospitals for validation if their measure
value for a measure is greater than 5
standard deviations from the mean,
placing the expected occurrence of such
a value outside of this range at 1 in
1,744,278.
We note that the criteria for targeting
50 outlier hospitals, described above,
does not specify whether high or low
performing hospitals will be targeted.
Therefore, in this proposed rule, we are
clarifying that hospitals with outlier
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values indicating specifically poor
scores on a measure (for example, a long
median time to fibrinolysis) will be
targeted for validation. In other words,
an ‘‘outlier value’’ is a measure value
that is greater than 5 standard
deviations from the mean of the
measure values for other hospitals, and
indicates a poor score.
b. Proposed Codification
We note that the previously finalized
procedures for targeting hospitals for
validation, described in section
XIII.D.7.a., above, and finalized in the
CY 2012 OPPS/ASC final rule with
comment period (76 FR 74485), are not
yet codified at 42 CFR 419.46. In this
proposed rule, we are proposing to
codify the previously finalized
procedures for targeting hospitals and
well as the procedures regarding outlier
hospitals as discussed and clarified
above at 42 CFR 419.46(e)(3).
We are inviting public comment on
our proposal to codify our validation
targeting criteria as discussed above.
c. Proposed Formalization and
Modifications to the Educational
Review Process for Chart-Abstracted
Measures Validation
abstracted measure validation
educational review process. Our goal is
to reduce the number of reconsideration
requests by identifying and correcting
errors before the final yearly validation
score is derived. By identifying and
correcting any mistakes early on, this
process could help decrease the burden
during the annual reconsideration
process, both for hospitals and CMS.
Therefore, in an effort to streamline
this process, in this proposed rule, we
are proposing to: (1) Formalize this
process; and (2) specify that if the
results of an educational review indicate
that we incorrectly scored a hospital’s
medical records selected for validation,
the corrected quarterly validation score
would be used to compute the hospital’s
final validation score at the end of the
calendar year. These proposals are
discussed in more detail below.
(2) Proposed Educational Review
Process for the CY 2020 Payment
Determination and Subsequent Years
(a) Formalizing the Educational Review
Process
As stated above, our informal
processes for educational review have
been described on the QualityNet Web
site.39 Under the informal process,
(1) Background
hospitals that were selected and
We have described our processes for
received a score for validation may
educational review on the QualityNet
request an educational review in order
Web site.38 We note that historically this to better understand the results. Many
process functioned as an outreach and
times, hospitals request an educational
education opportunity we provided to
review to examine any data element
hospitals, but based on our experience,
discrepancies, if they believe the score
stakeholder feedback, and more robust
is incorrect, or when they have general
validation requirements, we believe that questions about their score. Currently,
it would be beneficial to hospitals to
hospitals receive validation results on a
propose formalizing and updating this
quarterly basis 40 and can request
process.
informal educational reviews for each
Under the current informal process, if
quarter. Under this informal process, a
results of an educational review indicate
hospital has 30 calendar days from the
that CDAC or CMS has incorrectly
date the validation results are posted on
scored a hospital after validation, those
the QualityNet Secure Portal Web site to
results are not changed, but are taken
contact the CMS designated contractor,
into consideration if the hospital
currently known as the Validation
submits a reconsideration request.
Support Contractor (VSC), to request an
Stakeholder feedback, provided via
educational review.41 In response to a
email, has indicated that while the
request, the VSC obtains and reviews
educational review process is helpful to
medical records directly from the
participating hospitals, it is limited in
Clinical Data Abstraction Center (CDAC)
its impact, given that a hospital’s
and provides feedback. CMS, or its
validation result is not corrected even
contractor, generally provides
after an educational review determines
that CMS reached an incorrect
39 Data Validation—Educational Reviews:
conclusion regarding a hospital’s
Hospitals-Outpatient. https://www.qualitynet.org/
dcs/ContentServer?c=Page&pagename=QnetPublic/
validation score for a given quarter.
Page/QnetTier3&cid=1228764927987.
Based on this feedback, we are
40 QualityNet: Data Validation Overview.
proposing to formalize and update the
Retrieved from: https://www.qualitynet.org/dcs/
Hospital OQR Program’s chartContentServer?c=Page&pagename=QnetPublic%2F
Validation—Educational Reviews:
Hospitals-Outpatient. https://www.qualitynet.org/
dcs/ContentServer?c=Page&pagename=QnetPublic/
Page/QnetTier3&cid=1228764927987.
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Page%2FQnetTier2&cid=1228758729356.
41 The educational review request form can be
found at: https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=QnetPublic%2F
Page%2FQnetTier3&cid=1228764927987.
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educational review results and
responses via a secure file transfer to the
hospital.42
In this proposed rule, we are
proposing to formalize this educational
review process, as described above, for
the CY 2020 payment determination and
subsequent years—in other words,
starting for validations of CY 2018 data
affecting the CY 2020 payment
determination and subsequent years.
We are inviting public comment on
our proposal to formalize the chartabstracted measures validation
educational review process for the CY
2020 payment determination and
subsequent years as described above.
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(b) Validation Score Review and
Correction
We previously finalized, in the CY
2011 OPPS/ASC final rule with
comment period (75 FR 72105 to
72106), that we calculate validation
scores under the Hospital OQR Program
using the upper bound of a one-tailed
confidence interval (CI) with a 75
percent threshold level with a binomial
approach. Using that approach, at the
end of each calendar year, CMS
computes a CI using the results of all
four quarters to determine the final
validation score.43 If the upper bound of
this confidence interval is 75 percent or
higher, the hospital will pass the
Hospital OQR Program validation
requirement.44 In this proposed rule, we
are proposing that if the results of a
validation educational review determine
that the original quarterly validation
score was incorrect, the corrected score
would be used to compute the final
validation score and CI at the end of
each calendar year.
In order to determine whether a
quarterly validation score was correct,
we are proposing to use a similar
process as one previously finalized for
reconsideration requests. Specifically,
we are proposing that during an
educational review request, evaluating a
validation score would consist of and be
limited to reviewing data elements that
were labeled as mismatched (between
the originally calculated measure score
and the measure score calculated in
validation) in the original validation
42 Hospital OQR Validation Educational Review
Process: Retrieved from: https://
www.qualitynet.org/dcs/ContentServer?c=
Page&pagename=QnetPublic%2FPage%2FQnet
Tier3&cid=1228764927987.
43 QualityNet Data Validation Overview.
Retrieved from: https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%2F
Page%2FQnetTier2&cid=1228758729356.
44 QualityNet Data Validation Overview.
Retrieved from: https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%2F
Page%2FQnetTier2&cid=1228758729356.
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results. We would also take into
consideration written justifications
provided by hospitals in the
Educational Review request. For more
information about the previously
finalized reconsideration request
procedures, we refer readers to the CY
2013 OPPS/ASC final rule with
comment period (77 FR 68487 through
68489), the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75118
through 75119), the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70524), and the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79795).
For the CY 2020 payment
determination and subsequent years, we
are further proposing that if an
educational review requested for any of
the first 3 quarters of validation yields
incorrect CMS validation results for
chart-abstracted measures, according to
the review process described and
proposed above, we would use the
corrected quarterly score, as
recalculated during the educational
review process, to compute the final CI
at the end of the calendar year.45 We
note that for the last quarter of
validation, because of the need to
calculate the confidence interval in a
timely manner and the insufficient time
available to conduct educational
reviews prior to the annual payment
update, the validation score review and
correction would not be available.
Instead, the existing reconsideration
process would be used to dispute any
unsatisfactory validation result. We
refer readers to section XIII.D.9. of this
proposed rule for a discussion about our
reconsideration and appeals process.
The corrected scores would be
applicable to the corresponding quarter,
for the first 3 quarters of validation, for
which a request was submitted. Under
this proposal, after evaluating the
validation score during the educational
review process, if results show that
there was indeed an error in the
originally calculated score, we would
take steps to correct it. However, so as
not to dissuade participation in the
educational review process, corrected
scores identified through the
educational review would only be used
to recalculate the CI if they indicate that
the hospital performed more favorably
than previously determined. If the
hospital performed less favorably, their
score would not be updated to reflect
the less favorable score.
45 Validation pass-fail status is determined by the
confidence interval report. Detail at: https://
www.qualityreportingcenter.com/wp-content/
uploads/2017/01/OQR-CY18-ValidationWebinar.508.2.pdf.
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We note that under this proposal, the
quarterly validation reports issued to
hospitals would not be updated to
reflect the corrected score due to the
burden associated with reissuing
corrected reports. However, the
corrected score would be communicated
to the hospital via secure file format as
discussed above.
We are inviting public comment on
our proposal, as discussed above for the
CY 2020 payment determination and
subsequent years, to use corrected
quarterly scores, as recalculated during
the educational review process
described and proposed in section
XIII.D.7.c.(2)(a) of this proposed rule
above, to compute the final confidence
interval for the first 3 quarters of
validation.
8. Extraordinary Circumstances
Exception Process for the CY 2020
Payment Determination and Subsequent
Years
We refer readers to the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68489), the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75119 through 75120), the
CY 2015 OPPS/ASC final rule with
comment period (79 FR 66966), the CY
2016 OPPS/ASC final rule with
comment period (80 FR 70524), and 42
CFR 419.46(d) for a complete discussion
of our extraordinary circumstances
extension or exception process under
the Hospital OQR Program.
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79795), we
finalized an update to our extraordinary
circumstances exemption (ECE) policy
to extend the ECE request deadline for
both chart-abstracted and web-based
measures from 45 days following an
event causing hardship to 90 days
following an event causing hardship,
effective with ECEs requested on or after
January 1, 2017.
We note that many of our quality
reporting and value-based purchasing
programs share a common process for
requesting an exception from program
reporting due to an extraordinary
circumstance not within a provider’s
control. The Hospital IQR, Hospital
OQR, IPFQR, ASCQR, and PCHQR
Programs, as well as the Hospital
Acquired Condition Reduction Program
and the Hospital Readmissions
Reduction Program, share similar
processes for ECE requests. We refer
readers to policies for the Hospital IQR
Program (76 FR 51651 through 51652,
78 FR 50836 through 50837, 79 FR
50277, 81 FR 57181 through 57182, and
42 CFR 412.140(c)(2)), the IPFQR
Program (77 FR 53659 through 53660
and 79 FR 45978), the ASCQR Program
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(77 FR 53642 through 53643 and 78 FR
75140 through 75141), the PCHQR
Program (78 FR 50848), the HAC
Reduction Program (80 FR 49579
through 49581), and the Hospital
Readmissions Reduction Program (80
FR 49542 through 49543) for program
specific information about extraordinary
circumstances exceptions requests.
In reviewing the policies for these
programs, we recognized that there are
five areas in which these programs have
variances regarding ECE requests. These
are: (1) Allowing the facilities or
hospitals to submit a form signed by the
facility’s or hospital’s CEO versus CEO
or designated personnel; (2) requiring
the form be submitted within 30 days
following the date that the extraordinary
circumstance occurred versus within 90
days following the date the
extraordinary circumstance occurred;
(3) inconsistency regarding specification
of a timeline for us to provide our
formal response notifying the facility or
hospital of our decision; (4)
inconsistency regarding specification of
our authority to grant ECEs due to CMS
data system issues; and (5) referring to
the program as ‘‘extraordinary
extensions/exemptions’’ versus as
‘‘extraordinary circumstances
exceptions.’’ We believe addressing
these five areas, as appropriate, can
improve administrative efficiencies for
affected facilities or hospitals.
We note that, in the FY 2018 IPPS/
LTCH PPS proposed rule, we examined
our policies in these areas for the
Hospital Readmissions Reduction
Program, the HAC Reduction Program,
the Hospital IQR Program, the PCHQR
Program and the IPFQR Program (82 FR
19967, 19990, 20075, 20085 and 20128)
and proposed to address differences in
these areas for those programs. In
section XIV.D.6. of this proposed rule,
we are also proposing revisions to our
policies for the ASCQR Program.
With the exception of the
specification of a timeline for us to
provide our formal response and the
terminology used to describe these
processes (items 3 and 5 above), the
Hospital OQR Program is aligned with
the existing and proposed policies for
the other quality reporting programs
discussed above. As a result, in this
proposed rule, we are proposing to
rename the process as the extraordinary
circumstances exceptions (ECE) policy
and make conforming changes to 42
CFR 419.46(d).
a. ECE Policy Nomenclature
We have observed that while all
quality programs listed above have
developed similar policies to provide
exceptions from program requirements
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to facilities that have experienced
extraordinary circumstances, such as
natural disasters, these programs refer to
these policies using inconsistent
terminology. Some programs refer to
these policies as ‘‘extraordinary
circumstances extensions/exemptions’’
while others refer to the set of policies
as ‘‘extraordinary circumstances
exceptions.’’ Several programs
(specifically, the Hospital VBP Program,
HAC Reduction Program, and the
Hospital Readmissions Reduction
Program) are not able to grant
extensions to required data reporting
timelines due to their reliance on data
external to their program, and thus the
term, ‘‘extraordinary circumstances
extensions/exemptions’’ is not
applicable to all programs. However, all
of the described programs are able to
offer exceptions from their reporting
requirements.
As stated above, in order to align this
policy across CMS quality programs, we
are therefore proposing to: (1) Change
the name of this policy from
‘‘extraordinary circumstances
extensions or exemptions’’ to
‘‘extraordinary circumstances
exceptions’’ for the Hospital OQR
Program, beginning January 1, 2018; and
(2) revise 42 CFR 419.46(d) of our
regulations to reflect this change. We
note that changing the name of this
policy does not change the availability
for a hospital to request an extension
under the Hospital OQR Program.
We are inviting public comment on
these proposals as discussed above.
b. Timeline for CMS Response to ECE
Requests
We also note that we believe it is
important for facilities to receive timely
feedback regarding the status of ECE
requests. We strive to complete our
review of each ECE request as quickly
as possible. However, we recognize that
the number of requests we receive, and
the complexity of the information
provided impacts the actual timeframe
to make ECE determinations. To
improve transparency of our process, we
believe it is appropriate to specify that
we will strive to complete our review of
each request within 90 days of receipt.
9. Hospital OQR Program
Reconsideration and Appeals
Procedures for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68487 through 68489), the
CY 2014 OPPS/ASC final rule with
comment period (78 FR 75118 through
75119), the CY 2016 OPPS/ASC final
rule with comment period (80 FR
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70524), and the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79795) for a discussion of our
reconsideration and appeals procedures.
We codified the process by which
participating hospitals may submit
requests for reconsideration at 42 CFR
419.46(f). We also codified language at
§ 419.46(f)(3) regarding appeals with the
Provider Reimbursement Review Board.
We are not proposing any changes to
our reconsideration and appeals
procedures.
E. Proposed Payment Reduction for
Hospitals That Fail To Meet the
Hospital OQR Program Requirements
for the CY 2018 Payment Determination
1. Background
Section 1833(t)(17) of the Act, which
applies to subsection (d) hospitals (as
defined under section 1886(d)(1)(B) of
the Act), states that hospitals that fail to
report data required to be submitted on
measures selected by the Secretary, in
the form and manner, and at a time,
specified by the Secretary will incur a
2.0 percentage point reduction to their
Outpatient Department (OPD) fee
schedule increase factor; that is, the
annual payment update factor. Section
1833(t)(17)(A)(ii) of the Act specifies
that any reduction applies only to the
payment year involved and will not be
taken into account in computing the
applicable OPD fee schedule increase
factor for a subsequent year.
The application of a reduced OPD fee
schedule increase factor results in
reduced national unadjusted payment
rates that apply to certain outpatient
items and services provided by
hospitals that are required to report
outpatient quality data in order to
receive the full payment update factor
and that fail to meet the Hospital OQR
Program requirements. Hospitals that
meet the reporting requirements receive
the full OPPS payment update without
the reduction. For a more detailed
discussion of how this payment
reduction was initially implemented,
we refer readers to the CY 2009 OPPS/
ASC final rule with comment period (73
FR 68769 through 68772).
The national unadjusted payment
rates for many services paid under the
OPPS equal the product of the OPPS
conversion factor and the scaled relative
payment weight for the APC to which
the service is assigned. The OPPS
conversion factor, which is updated
annually by the OPD fee schedule
increase factor, is used to calculate the
OPPS payment rate for services with the
following status indicators (listed in
Addendum B to this proposed rule,
which is available via the Internet on
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the CMS Web site): ‘‘J1’’, ‘‘J2’’, ‘‘P’’,
‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’, ‘‘R’’, ‘‘S’’, ‘‘T’’, ‘‘V’’,
or ‘‘U’’. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR
79796), we clarified that the reporting
ratio does not apply to codes with status
indicator ‘‘Q4’’ because services and
procedures coded with status indicator
‘‘Q4’’ are either packaged or paid
through the Clinical Laboratory Fee
Schedule and are never paid separately
through the OPPS. Payment for all
services assigned to these status
indicators will be subject to the
reduction of the national unadjusted
payment rates for hospitals that fail to
meet Hospital OQR Program
requirements, with the exception of
services assigned to New Technology
APCs with assigned status indicator ‘‘S’’
or ‘‘‘T’’. We refer readers to the CY 2009
OPPS/ASC final rule with comment
period (73 FR 68770 through 68771) for
a discussion of this policy.
The OPD fee schedule increase factor
is an input into the OPPS conversion
factor, which is used to calculate OPPS
payment rates. To reduce the OPD fee
schedule increase factor for hospitals
that fail to meet reporting requirements,
we calculate two conversion factors—a
full market basket conversion factor
(that is, the full conversion factor), and
a reduced market basket conversion
factor (that is, the reduced conversion
factor). We then calculate a reduction
ratio by dividing the reduced
conversion factor by the full conversion
factor. We refer to this reduction ratio as
the ‘‘reporting ratio’’ to indicate that it
applies to payment for hospitals that fail
to meet their reporting requirements.
Applying this reporting ratio to the
OPPS payment amounts results in
reduced national unadjusted payment
rates that are mathematically equivalent
to the reduced national unadjusted
payment rates that would result if we
multiplied the scaled OPPS relative
payment weights by the reduced
conversion factor. For example, to
determine the reduced national
unadjusted payment rates that applied
to hospitals that failed to meet their
quality reporting requirements for the
CY 2010 OPPS, we multiplied the final
full national unadjusted payment rate
found in Addendum B of the CY 2010
OPPS/ASC final rule with comment
period by the CY 2010 OPPS final
reporting ratio of 0.980 (74 FR 60642).
In the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68771
through 68772), we established a policy
that the Medicare beneficiary’s
minimum unadjusted copayment and
national unadjusted copayment for a
service to which a reduced national
unadjusted payment rate applies would
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each equal the product of the reporting
ratio and the national unadjusted
copayment or the minimum unadjusted
copayment, as applicable, for the
service. Under this policy, we apply the
reporting ratio to both the minimum
unadjusted copayment and national
unadjusted copayment for services
provided by hospitals that receive the
payment reduction for failure to meet
the Hospital OQR Program reporting
requirements. This application of the
reporting ratio to the national
unadjusted and minimum unadjusted
copayments is calculated according to
§ 419.41 of our regulations, prior to any
adjustment for a hospital’s failure to
meet the quality reporting standards
according to § 419.43(h). Beneficiaries
and secondary payers thereby share in
the reduction of payments to these
hospitals.
In the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68772), we
established the policy that all other
applicable adjustments to the OPPS
national unadjusted payment rates
apply when the OPD fee schedule
increase factor is reduced for hospitals
that fail to meet the requirements of the
Hospital OQR Program. For example,
the following standard adjustments
apply to the reduced national
unadjusted payment rates: The wage
index adjustment; the multiple
procedure adjustment; the interrupted
procedure adjustment; the rural sole
community hospital adjustment; and the
adjustment for devices furnished with
full or partial credit or without cost.
Similarly, OPPS outlier payments made
for high cost and complex procedures
will continue to be made when outlier
criteria are met. For hospitals that fail to
meet the quality data reporting
requirements, the hospitals’ costs are
compared to the reduced payments for
purposes of outlier eligibility and
payment calculation. We established
this policy in the OPPS beginning in the
CY 2010 OPPS/ASC final rule with
comment period (74 FR 60642). For a
complete discussion of the OPPS outlier
calculation and eligibility criteria, we
refer readers to section II.G. of this
proposed rule.
ratio is 0.980, calculated by dividing the
proposed reduced conversion factor of
74.953 by the proposed full conversion
factor of 76.483. We are proposing to
continue to apply the reporting ratio to
all services calculated using the OPPS
conversion factor. For the CY 2018
OPPS, we are proposing to apply the
reporting ratio, when applicable, to all
HCPCS codes to which we have
proposed status indicator assignments
of ‘‘J1’’, ‘‘J2’’, ‘‘P’’, ‘‘Q1’’, ‘‘Q2’’, ‘‘Q3’’,
‘‘R’’, ‘‘S’’, ‘‘T’’, ‘‘V’’, and ‘‘U’’ (other than
new technology APCs to which we have
proposed status indicator assignment of
‘‘S’’ and ‘‘T’’). As noted above, in the CY
2017 OPPS/ASC final rule with
comment period (81 FR 79796), we
clarified that the reporting ratio does not
apply to codes with status indicator
‘‘Q4’’ because services and procedures
coded with status indicator ‘‘Q4’’ are
either packaged or paid through the
Clinical Laboratory Fee Schedule and
are never paid separately through the
OPPS. We are proposing to continue to
exclude services paid under New
Technology APCs. We are proposing to
continue to apply the reporting ratio to
the national unadjusted payment rates
and the minimum unadjusted and
national unadjusted copayment rates of
all applicable services for those
hospitals that fail to meet the Hospital
OQR Program reporting requirements.
We also are proposing to continue to
apply all other applicable standard
adjustments to the OPPS national
unadjusted payment rates for hospitals
that fail to meet the requirements of the
Hospital OQR Program. Similarly, we
are proposing to continue to calculate
OPPS outlier eligibility and outlier
payment based on the reduced payment
rates for those hospitals that fail to meet
the reporting requirements.
We are inviting public comments on
these proposals.
2. Proposed Reporting Ratio Application
and Associated Adjustment Policy for
CY 2018
We are proposing to continue our
established policy of applying the
reduction of the OPD fee schedule
increase factor through the use of a
reporting ratio for those hospitals that
fail to meet the Hospital OQR Program
requirements for the full CY 2018
annual payment update factor. For the
CY 2018 OPPS, the proposed reporting
We refer readers to section XIII.A.1. of
this proposed rule for a general
overview of our quality reporting
programs.
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XIV. Requirements for the Ambulatory
Surgical Center Quality Reporting
(ASCQR) Program
A. Background
1. Overview
2. Statutory History of the ASCQR
Program
We refer readers to section XIV.K.1. of
the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74492 through
74494) for a detailed discussion of the
statutory history of the ASCQR Program.
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3. Regulatory History of the ASCQR
Program
We seek to promote higher quality
and more efficient health care for
beneficiaries. This effort is supported by
the adoption of widely-agreed-upon
quality measures. We have worked with
relevant stakeholders to define measures
of quality in almost every setting and
currently measure some aspect of care
for almost all Medicare beneficiaries.
These measures assess structural aspects
of care, clinical processes, patient
experiences with care, and outcomes.
We have implemented quality measure
reporting programs for multiple settings
of care. To measure the quality of ASC
services, we implemented the ASCQR
Program. We refer readers to section
XV.A.3. of the CY 2014 OPPS/ASC final
rule with comment period (78 FR
75122), section XIV. of the CY 2015
OPPS/ASC final rule with comment
period (79 FR 66966 through 66987),
section XIV. of the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70526 through 70538) and section XIV.
of the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79797
through 79826) for an overview of the
regulatory history of the ASCQR
Program.
B. ASCQR Program Quality Measures
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1. Considerations in the Selection of
ASCQR Program Quality Measures
We refer readers to the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68493 through 68494) for
a detailed discussion of the priorities we
consider for ASCQR Program quality
measure selection. We are not proposing
any changes to this policy.
2. Accounting for Social Risk Factors in
the ASCQR Program
We understand that social risk factors
such as income, education, race and
ethnicity, employment, disability,
community resources, and social
support (certain factors of which are
also sometimes referred to as
socioeconomic status (SES) factors or
socio-demographic status (SDS) factors)
play a major role in health. One of our
core objectives is to improve beneficiary
outcomes including reducing health
disparities, and we want to ensure that
all beneficiaries, including those with
social risk factors, receive high quality
care. In addition, we seek to ensure that
the quality of care furnished by
providers and suppliers is assessed as
fairly as possible under our programs
while ensuring that beneficiaries have
adequate access to excellent care.
We have been reviewing reports
prepared by the Office of the Assistant
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Secretary for Planning and Evaluation
(ASPE) 46 and the National Academies
of Sciences, Engineering, and Medicine
on the issue of measuring and
accounting for social risk factors in
CMS’ value-based purchasing and
quality reporting programs, and
considering options on how to address
the issue in these programs. On
December 21, 2016, ASPE submitted a
Report to Congress on a study it was
required to conduct under section 2(d)
of the Improving Medicare Post-Acute
Care Transformation (IMPACT) Act of
2014. The study analyzed the effects of
certain social risk factors of Medicare
beneficiaries on quality measures and
measures of resource use used in one or
more of nine Medicare value-based
purchasing programs.47 The report also
included considerations for strategies to
account for social risk factors in these
programs. In a January 10, 2017 report
released by the National Academies of
Sciences, Engineering, and Medicine,
the body provided various potential
methods for accounting for social risk
factors, including stratified public
reporting.48
As noted in the FY 2017 IPPS/LTCH
PPS final rule, the NQF has undertaken
a 2-year trial period in which new
measures, measures undergoing
maintenance review, and measures
endorsed with the condition that they
enter the trial period can be assessed to
determine whether risk adjustment for
selected social risk factors is appropriate
for these measures. This trial entails
temporarily allowing inclusion of social
risk factors in the risk-adjustment
approach for some performance
measures. At the conclusion of the trial,
NQF will issue recommendations on the
future inclusion of social risk factors in
risk adjustment for these quality
measures, and we will closely review its
findings.
As we continue to consider the
analyses and recommendations from
these reports and await the results of the
NQF trial on risk adjustment for quality
46 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. 21 Dec. 2016.
Available at: https://aspe.hhs.gov/pdf-report/reportcongress-social-risk-factors-and-performanceunder-medicares-value-based-purchasingprograms.
47 Office of the Assistant Secretary for Planning
and Evaluation. 2016. Report to Congress: Social
Risk Factors and Performance Under Medicare’s
Value-Based Purchasing Programs. Available at:
https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs.
48 National Academies of Sciences, Engineering,
and Medicine. 2017. Accounting for social risk
factors in Medicare payment. Washington, DC: The
National Academies Press.
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measures, we are continuing to work
with stakeholders in this process. As we
have previously communicated, we are
concerned about holding providers to
different standards for the outcomes of
their patients with social risk factors
because we do not want to mask
potential disparities or minimize
incentives to improve the outcomes for
disadvantaged populations. Keeping
this concern in mind, we are seeking
public comment on whether we should
account for social risk factors in the
ASCQR Program, and if so, what
method or combination of methods
would be most appropriate for
accounting for social risk factors.
Examples of methods include:
confidential reporting to providers of
measure rates stratified by social risk
factors; public reporting of stratified
measure rates; and potential risk
adjustment of a particular measure as
appropriate based on data and evidence.
In addition, we are seeking public
comment on which social risk factors
might be most appropriate for reporting
stratified measure scores and/or
potential risk adjustment of a particular
measure. Examples of social risk factors
include, but are not limited to, dual
eligibility/low-income subsidy, race and
ethnicity, and geographic area of
residence. We are seeking comments on
which of these factors, including current
data sources where this information
would be available, could be used alone
or in combination, and whether other
data should be collected to better
capture the effects of social risk. We will
take commenters’ input into
consideration as we continue to assess
the appropriateness and feasibility of
accounting for social risk factors in the
ASCQR Program. We note that any such
changes would be proposed through
future notice and comment rulemaking.
We look forward to working with
stakeholders as we consider the issue of
accounting for social risk factors and
reducing health disparities in CMS
programs. Of note, implementing any of
the above methods would be taken into
consideration in the context of how this
and other CMS programs operate (for
example, data submission methods,
availability of data, statistical
considerations relating to reliability of
data calculations, among others), so we
also welcome comment on operational
considerations. CMS is committed to
ensuring that its beneficiaries have
access to and receive excellent care, and
that the quality of care furnished by
providers and suppliers is assessed
fairly in CMS programs.
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3. Policies for Retention and Removal of
Quality Measures From the ASCQR
Program
a. Retention of Previously Adopted
ASCQR Program Measures
We previously adopted a policy that
quality measures adopted for an ASCQR
Program measure set for a previous
payment determination year be retained
in the ASCQR Program for measure sets
for subsequent payment determination
years, except when they are removed,
suspended, or replaced as indicated (76
FR 74494 and 74504; 77 FR 68494
through 68495; 78 FR 75122; and 79 FR
66967 through 66969). We are not
proposing any changes to this policy.
b. Proposed Measure Removal
We refer readers to the CY 2015
OPPS/ASC final rule with comment
period (79 FR 66967 through 66969) and
42 CFR 416.320 for a detailed
discussion of the process for removing
adopted measures from the ASCQR
Program. We are not proposing any
changes to this process.
In this proposed rule, we are
proposing to remove a total of three
measures for the CY 2019 payment
determination and subsequent years: (1)
ASC–5: Prophylactic Intravenous (IV)
Antibiotic Timing; (2) ASC–6: Safe
Surgery Checklist Use; and (3) ASC–7:
ASC Facility Volume Data on Selected
Procedures. These proposals are
discussed in more detail below.
(1) Proposed Removal of ASC–5:
Prophylactic Intravenous (IV) Antibiotic
Timing Beginning with the CY 2019
Payment Determination
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74499 through 74501)
where we adopted ASC–5: Prophylactic
Intravenous (IV) Antibiotic Timing
measure (formerly NQF #0264)
beginning with the CY 2014 payment
determination and finalized the
measure’s data collection and data
submission timelines (76 FR 74515
33687
through 74516). This measure assesses
whether intravenous antibiotics given
for prevention of surgical site infection
were administered on time.
Based on our analysis of ASCQR
Program measure data for CY 2014
through 2016 encounters, ASC
performance on this measure is so high
and unvarying that meaningful
distinctions in improvement cannot be
made; as a result, we believe this
measure meets removal criterion
number one under the ASCQR
Program’s finalized measure removal
criteria. The ASCQR Program previously
finalized two criteria for determining
when a measure is ‘‘topped out:’’ (1)
When there is statistically
indistinguishable performance at the
75th and 90th percentiles of national
facility performance; and (2) when the
measure’s truncated coefficient of
variation (COV) is less than or equal to
0.10 (79 FR 66968 through 66969).
These analyses are captured in the table
below.
ASC–5 TOPPED OUT ANALYSIS
Number of
ASCs
Encounters
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
CY 2014 ...........................................................................................................
CY 2015 ...........................................................................................................
CY 2016 ...........................................................................................................
2,206
2,196
2,158
As displayed in the table above, there
is no distinguishable difference in ASC
performance between the 75th and 90th
percentiles under the ASC–5 measure,
and the truncated coefficient of
variation has been below 0.10 since
2014. Therefore, this ASC–5 measure
meets both ‘‘topped out’’ measure
criteria for the ASCQR Program.
Furthermore, we note that the NQF
endorsement was removed on February
13, 2015; in its discussion of whether to
continue endorsement for ASC–5, the
Surgery Standing Committee also noted
that ASC performance on this measure
was very high, with 99 percent of
facilities meeting the timely antibiotic
administration threshold in CY 2013.49
We believe that removal of this measure
from the ASCQR Program measure set is
appropriate, as there is little room for
improvement and removal would
alleviate maintenance costs and
administrative burden to ASCs. As such,
we believe the burdens outweigh the
benefits of keeping the measure in the
ASCQR Program. Therefore, we are
proposing to remove the ASC–5:
Prophylactic Intravenous (IV) Antibiotic
Timing measure for the CY 2019
payment determination and subsequent
years. Furthermore, we note that a
similar measure was removed from the
Hospital OQR Program in the CY 2015
OPPS/ASC final rule with comment
period (79 FR 66942 through 66944) due
to topped-out status.
We are inviting public comment on
our proposal to remove the ASC–5:
Prophylactic Intravenous (IV) Antibiotic
Timing measure for the CY 2019
payment determination and subsequent
years as discussed above.
49 NQF. ‘‘NQF-Endorsed Measures for Surgical
Procedures’’. Technical Report. Available at: https://
75th
percentile
100.000
100.000
100.000
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We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74505 through 74507 and
74509), where we adopted ASC–6: Safe
Surgery Checklist Use beginning with
the CY 2015 payment determination.
This structural measure of facility
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100.000
100.000
100.000
Truncated
COV
0.02633
0.03289
0.02619
process assesses whether an ASC
employed a safe surgery checklist that
covered each of the three critical
perioperative periods (prior to
administering anesthesia, prior to skin
incision, and prior to patient leaving the
operating room) for the entire data
collection period.
Based on our analysis of ASCQR
Program measure data for CYs 2014 to
2016 encounters, the ASC–6 measure
meets our first criterion for measure
removal that measure performance is so
high and unvarying that meaningful
distinctions and improvements in
performance can no longer be made.
The ASCQR Program previously
finalized two criteria for determining
when a measure is ‘‘topped out:’’ (1)
when there is statistically
indistinguishable performance at the
75th and 90th percentiles of national
facility performance; and (2) when the
measure’s truncated coefficient of
variation is less than or equal to 0.10 (79
FR 66968 through 66969). These
analyses are captured in the table below.
www.qualityforum.org/Publications/2015/02/NQFEndorsed_Measures_for_Surgical_Procedures.aspx.
(2) Proposed Removal of ASC–6: Safe
Surgery Checklist Use Beginning With
the CY 2019 Payment Determination
90th
percentile
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
ASC–6 PERFORMANCE ANALYSIS
Number of
ASCs
Encounters
CY
CY
CY
CY
2012 ...............................................................................
2013 50 ...........................................................................
2014 ...............................................................................
2015 ...............................................................................
Based on the analysis above the
national rate of ‘‘Yes’’ response for the
ASC–6 measure is nearly 1.0, or 100
percent, nationwide, and has remained
at this level for the last 2 years. In
addition, there is no distinguishable
difference in ASC performance between
the 75th and 90th percentiles under
measure, and the truncated coefficient
of variation has been below 0.10 since
2014. We believe that removal of this
measure from the ASCQR Program
measure set is appropriate, as there is
little room for improvement. In
addition, removal of this measure would
alleviate the maintenance costs and
administrative burden to ASCs
associated with retaining the measure.
As such, we believe the burdens of this
measure outweigh the benefits of
keeping the measure in the Program.
Therefore, we are proposing to
remove ASC–6 from the ASCQR
Program measure set beginning with the
CY 2019 payment determination. We
also refer readers to section XIII.B.4.c.(6)
of this proposed rule, where the
Hospital OQR Program is also proposing
to remove a similar measure.
We are inviting public comment on
our proposal to remove the ASC–6: Safe
Surgery Checklist Use measure for the
CY 2019 payment determination and
subsequent years as discussed above.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
(3) Proposed Removal of ASC–7: ASC
Facility Volume Data on Selected
Procedures Beginning With the CY 2019
Payment Determination
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74507 through 74509),
where we adopted ASC–7: ASC Facility
Volume Data on Selected Procedures
beginning with the CY 2015 payment
determination. This structural measure
of facility capacity collects surgical
procedure volume data on six categories
50 We note that no performance data was
collected for CY 2013 events for the web-based
measures; therefore, we lack performance data for
the ASC–6 measure for this year of the ASCQR
Program. https://www.qualitynet.org/dcs/
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blobwhere=1228890196351&blobheader=
multipart%2Foctet-stream&blobheadername1=
Content-Disposition&blobheadervalue1
attachment%3Bfilename%3DASC_wbnr_prsntn_
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4,356
(*)
4,328
4,305
Rate
0.989
(*)
0.997
0.998
of procedures frequently performed in
the ASC setting (76 FR 74507).
We adopted the ASC–7 measure based
on evidence that volume of surgical
procedures, particularly of high-risk
surgical procedures, is related to better
patient outcomes, including decreased
medical errors and mortality (76 FR
74507). We further stated our belief that
publicly reporting volume data would
provide patients with beneficial
performance information to use in
selecting a care provider. However, over
time, we have adopted, and are
proposing and intend to continue to
adopt, more measures assessing ASCs’
performance on specific procedure
types. For example, in the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79801 through 79803), we
adopted ASC–14: Unplanned Anterior
Vitrectomy, a measure assessing patient
outcomes following ophthalmologic
procedures, and are proposing to adopt
a second ophthalmology-specific
measure, ASC–16: Toxic Anterior
Segment Syndrome, in section
XIV.B.6.a. of this proposed rule. We
believe these procedure-type-specific
measures will provide patients with
more valuable ASC performance data
than the ASC–7 measure in selecting an
ASC for their care. For this reason, we
believe the ASC–7 measure meets our
second criterion for removal from the
program; specifically, that there are
other measures available that are more
strongly associated with desired patient
outcomes for the particular topic. In
addition, removal of this measure would
alleviate the maintenance costs and
administrative burden to ASCs
associated with retaining the measure.
As such, we believe the burdens of this
measure outweigh the benefits of
keeping the measure in the ASCQRR
Program. Therefore, we are proposing to
remove ASC–7: ASC Facility Volume
Data on Selected Procedures from the
ASCQR Program beginning with the CY
2019 payment determination. We refer
readers to section XIII.B.4.c.(2) of this
proposed rule where we are proposing
to remove a similar measure from the
Hospital OQR Program.
We are inviting public comment on
our proposal to remove the ASC–7: ASC
Facility Volume Data on Selected
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75th
percentile
100.000
(*)
100.000
100.000
90th
percentile
100.000
(*)
100.000
100.000
Truncated
COV
0.106
(*)
0.050
0.043
Procedures measure for the CY 2019
payment determination and subsequent
years as discussed above.
4. Proposal to Delay ASC–15a–e:
Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS)
Survey-Based Measures Beginning With
the CY 2020 Payment Determination
We refer readers to the CY 2017
OPPS/ASC final rule with comment
period where we adopted ASC–15a–e
(81 FR 79803 through 79817), and
finalized data collection and data
submission timelines (81 FR 79822
through 79824). These measures assess
patients’ experience with care following
a procedure or surgery in an ASC by
rating patient experience as a means for
empowering patients and improving the
quality of their care.
In this proposed rule, we are
proposing to delay implementation of
the Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS)
Survey-based Measures (ASC–15a–e)
beginning with the CY 2020 payment
determination (CY 2018 data collection)
until further action in future
rulemaking. Since our adoption of these
measures, we have come to believe that
we lack important operational and
implementation data. Specifically, we
want to ensure that the survey measures
appropriately account for patient
response rates, both aggregate and by
survey administration method; reaffirm
the reliability of national OAS CAHPS
Survey data; and appropriately account
for the burden associated with
administering the survey in the
outpatient setting of care. We note that
commenters expressed concern over the
burden associated with the survey in the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79810). We
believe that the national
implementation of the survey, which
began in January 2016 and will
conclude in December 2017, would
provide valuable information moving
forward. We plan to conduct analyses of
the national implementation data to
undertake any necessary modifications
to the survey tool and/or CMS systems.
We believe it is important to allow time
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for any modifications before requiring
the survey under the ASCQR Program.
However, we continue to believe that
these measures address an area of care
that is not adequately addressed in our
current measure set and will be useful
to assess aspects of care where the
patient is the best or only source of
information.
Further, we continue to believe these
measures will enable objective and
meaningful comparisons between ASCs.
Therefore, we are proposing to delay
implementation of ASC–15a–e
beginning with the CY 2020 payment
determination (CY 2018 data collection)
until further action in future
rulemaking. We also refer readers to
section XIII.B.5. of this proposed rule
where we are making a similar proposal
in the Hospital OQR Program.
We are inviting public comment on
our proposal to delay the OAS CAHPS
Survey-based measures beginning with
the CY 2020 payment determination as
discussed above.
33689
5. ASCQR Program Quality Measures
Adopted in Previous Rulemaking
For the CY 2020 payment
determination and subsequent years, we
have previously finalized the following
measure set. We note that this chart
includes the ASC–5, ASC–6, and ASC–
7 measures, which are being proposed
for removal as discussed above, as well
as the ASC–15a–e. measures, which are
being proposed for delay beginning with
the CY 2020 payment determination and
until further action as discussed above:
ASCQR PROGRAM MEASURE SET PREVIOUSLY FINALIZED FOR THE CY 2020 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
ASC No.
NQF No.
Measure name
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
0263 .................
0266 .................
0267 .................
0265 † ..............
0264 † ..............
None ................
None ................
0431 .................
0658 .................
ASC–10 ....................................................
0659 .................
ASC–11 ....................................................
1536 .................
ASC–12 ....................................................
ASC–13 ....................................................
ASC–14 ....................................................
ASC–15a ..................................................
ASC–15b ..................................................
ASC–15c ...................................................
ASC–15d ..................................................
ASC–15e ..................................................
2539 .................
None ................
None ................
None ................
None ................
None ................
None ................
None ................
Patient Burn.
Patient Fall.
Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant.
All-Cause Hospital Transfer/Admission.
Prophylactic Intravenous (IV) Antibiotic Timing.*
Safe Surgery Checklist Use.*
ASC Facility Volume Data on Selected Procedures.*
Influenza Vaccination Coverage Among Healthcare Personnel.
Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal
Colonoscopy in Average Risk Patients.
Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of
Adenomatous Polyps-Avoidance of Inappropriate Use.
Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.**
Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
Normothermia Outcome.
Unplanned Anterior Vitrectomy.
OAS CAHPS—About Facilities and Staff.***
OAS CAHPS—Communication About Procedure.***
OAS CAHPS—Preparation for Discharge and Recovery.***
OAS CAHPS—Overall Rating of Facility.***
OAS CAHPS—Recommendation of Facility.***
ASC–1
ASC–2
ASC–3
ASC–4
ASC–5
ASC–6
ASC–7
ASC–8
ASC–9
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
† We note that NQF endorsement for this measure was removed.
* Measure proposed for removal beginning with the CY 2019 payment determination, as discussed in section XIV.B.3.b. of this proposed rule.
** Measure voluntarily collected effective beginning with the CY 2017 payment determination as set forth in section XIV.E.3.c. of the CY 2015
OPPS/ASC final rule with comment period (79 FR 66984 through 66985).
*** Measure proposed for delay in reporting beginning with the CY 2020 payment determination (CY 2018 data collection) until further action in
future rulemaking as discussed in section XIV.B.4. of this proposed rule.
6. Proposed New ASCQR Program
Quality Measures for the CY 2021 and
CY 2022 Payment Determinations and
Subsequent Years
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75124) for a detailed
discussion of our approach to measure
selection for the ASCQR Program. In
this proposed rule, we are proposing to
adopt a total of three new measures for
the ASCQR Program: One measure
collected via a CMS web-based tool for
the CY 2021 payment determination and
subsequent years (ASC–16: Toxic
Anterior Segment Syndrome), and two
measures collected via claims for the CY
2022 payment determination and
subsequent years (ASC–17: Hospital
Visits after Orthopedic Ambulatory
Surgical Center Procedures; and ASC–
18: Hospital Visits after Urology
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Ambulatory Surgical Center
Procedures). These measures are
discussed in detail below.
a. Proposed Adoption of ASC–16: Toxic
Anterior Segment Syndrome Beginning
With the CY 2021 Payment
Determination
(1) Background
Toxic Anterior Segment Syndrome
(TASS), an acute, noninfectious
inflammation of the anterior segment of
the eye, is a complication of anterior
segment eye surgery that typically
develops within 24 hours after
surgery.51 The TASS measure assesses
the number of ophthalmic anterior
51 Centers for Disease Control and Prevention.
Toxic Anterior Segment Syndrome after Cataract
Surgery—Maine, 2006. MMWR Morb Mortal Wkly
Rep. 2007 Jun 29;56(25):629–630.
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segment surgery patients diagnosed
with TASS within two days of surgery.
Although most cases of TASS can be
treated, the inflammatory response
associated with TASS can cause serious
damage to intraocular tissues, resulting
in vision loss.52 Prevention requires
careful attention to solutions,
medications, and ophthalmic devices
and to cleaning and sterilization of
surgical equipment because of the
numerous potential etiologies.53 Despite
52 Breebaart AC, Nuyts RM, Pels E, Edelhauser
HF, Verbraak FD. Toxic Endothelial Cell
Destruction of the Cornea after Routine
Extracapsular Cataract Surgery. Arch Ophthalmol
1990; 108:1121–1125.
53 Hellinger WC, Bacalis LP, Erdhauser HF,
Mamalis N, Milstein B, Masket S. ASCRS Ad Hoc
Task Force on Cleaning and Sterilization of
Intraocular Instruments: Recommended Practices
for Cleaning and Sterilizing Intraocular Surgical
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a recent focus on prevention, cases of
TASS continue to occur, sometimes in
clusters.54 With millions of anterior
segment surgeries being performed in
the United States each year,
measurement and public reporting have
the potential to serve as an additional
tool to drive further preventive efforts.
TASS is of interest to the ASCQR
Program because cataract surgery is an
anterior segment surgery commonly
performed at ASCs. In addition, the
TASS measure addresses the MAPidentified priority measure area of
procedure complications for the ASCQR
Program.55
(2) Overview of Measure
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
We believe it is important to monitor
the rate of TASS in the ASC setting
because ophthalmologic procedures
such as anterior segment surgery are
commonly performed in this setting of
care. Therefore, we are proposing to
adopt the ASC–16: Toxic Anterior
Segment Syndrome measure, which is
based on aggregate measure data
collected by the ASC and submitted via
a CMS online data submission tool
(QualityNet), in the ASCQR Program for
the CY 2021 payment determination and
subsequent years. We expect the
measure would promote improvement
in patient care over time, because
measurement coupled with
transparency in publicly reporting of
measure information would make
patient outcomes following anterior
segment procedures more visible to
ASCs and patients and incentivize ASCs
to incorporate quality improvement
activities to reduce the incidence of
TASS where necessary.
Section 1890A of the Act requires the
Secretary to establish a prerulemaking
process with respect to the selection of
certain categories of quality and
efficiency measures. Under section
1890A(a)(2) of the Act, the Secretary
must make available to the public by
December 1 of each year a list of quality
and efficiency measures that the
Secretary is considering for the
Medicare program. The proposed ASC–
16 measure was included on the 2015
MUC list 56 and reviewed by the MAP.
Instruments. J Cataract Refract Surg. 2007
Jun;33(6):1095–1100.
54 Moyle W, Yee RD, Burns JK, Biggins T. Two
Consecutive Clusters of Toxic Anterior Segment
Syndrome. Optom Vis Sci. 2013 Jan;90(1):e11–23.
55 National Quality Forum. ‘‘MAP 2017
Considerations for Implementing Measures in
Federal Programs: Hospitals.’’ Report. 2017.
Available at: https://www.qualityforum.org/map/
under ‘‘Hospitals—Final Report.’’
56 National Quality Forum. 2015 Measures Under
Consideration List. National Quality Forum, Dec.
2016. Available at: https://www.qualityforum.org/
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The MAP reviewed the measure
(MUC15–1047) and conditionally
supported it for the ASCQR Program
pending NQF review and
endorsement.57 The MAP noted the high
value and urgency of this measure,
given many new entrants to the
ambulatory surgical center space, as
well as the clustering outbreaks of
TASS. The MAP also cautioned that the
measure be reviewed and endorsed by
NQF before adoption into the ASCQR
Program, so that a specialized standing
committee can evaluate the measure for
scientific acceptability.58 A summary of
the MAP recommendations can be
found at: https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier
=id&ItemID=81593.
Sections 1833(i)(7)(B) and
1833(t)(17)(C)(i) of the Act, when read
together, require the Secretary, except as
the Secretary may otherwise provide, to
develop measures appropriate for the
measurement of the quality of care
furnished by ASCs that reflect
consensus among affected parties and,
to the extent feasible and practicable,
that include measures set forth by one
or more national consensus building
entities. However, we note that section
1833(i)(7)(B) of the Act does not require
that each measure we adopt for the
ASCQR Program be endorsed by a
national consensus building entity, or
by the NQF specifically. Further, under
section 1833(i)(7)(B) of the Act, section
1833(t)(17)(C)(i) of the Act applies to the
ASCQR Program, except as the Secretary
may otherwise provide. Under this
provision, the Secretary has further
authority to adopt non-endorsed
measures. As stated in the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74465 and 74505), we
believe that consensus among affected
parties can be reflected through means
other than NQF endorsement, including
consensus achieved during the measure
development process, consensus shown
through broad acceptance and use of
measures, and consensus through public
comment. We believe this proposed
measure meets these statutory
requirements.
The proposed ASC–16 measure is not
NQF-endorsed. However, this measure
is maintained by the ASC Quality
2015_Measures_Under_Consideration.aspx, under
‘‘2015 Measures Under Consideration List (PDF).’’
57 National Quality Forum. 2016 Spreadsheet of
Final Recommendations to HHS and CMS.
Available at: https://www.qualityforum.org/
WorkArea/linkit.aspx?Link
Identifier=id&ItemID=81593.
58 National Quality Forum. 2016 Spreadsheet of
Final Recommendations to HHS and CMS.
Available at: https://www.qualityforum.org/
WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81593.
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Collaboration,59 an entity recognized
within the community as an expert in
measure development for the ASC
setting. We believe that this measure is
appropriate for the measurement of
quality care furnished by ASCs because
ophthalmologic procedures are
commonly performed in ASCs and, as
discussed above, the inflammatory
response associated with TASS can
cause serious damage to patients’ vision,
but TASS is also preventable through
careful attention to solutions,
medications, ophthalmic devices, and to
cleaning and sterilization of surgical
equipment. While the Toxic Anterior
Segment Syndrome measure is not NQFendorsed, we believe this measure
reflects consensus among affected
parties, because the MAP, which
represents stakeholder groups, reviewed
and conditionally supported the
measure 60 for use in the ASCQR
Program. The MAP agreed that this
measure is high-value and urgent in the
current healthcare marketplace and the
number of new entrants to the surgical
center place, as well as the clustering
outbreaks of TASS.61 Furthermore, we
believe that this measure is
scientifically acceptable, because the
measure steward has completed
reliability testing and validity
assessment of the measure.62
Specifically, a retrospective chart audit
of the ASCs participating in
measurement testing found no
differences between the originally
submitted and re-abstracted TASS rates,
providing strong evidence the measure
is reliable. The measure steward also
conducted a formal consensus review to
assess the measure’s validity; the results
of this assessment showed participants
believe the measure appears to measure
what it is intended to, and is defined in
a way that will allow for consistent
interpretation of the inclusion and
exclusion criteria from ASC to ASC.
59 ASC Quality Collaboration. ‘‘ASC Quality
Collaboration.’’ Available at: https://
www.ascquality.org/.
60 National Quality Forum. 2016 Spreadsheet of
Final Recommendations to HHS and CMS.
Available at: https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=
81593.
61 National Quality Forum. 2016 Spreadsheet of
Final Recommendations to HHS and CMS.
Available at: https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=
81593.
62 AHRQ Measure Summary. Retrieved from:
https://www.qualitymeasures.ahrq.gov/summaries/
summary/49582/ambulatory-surgery-percentage-ofophthalmic-anterior-segment-surgery-patientsdiagnosed-with-toxic-anterior-segment-syndrometass-within-2-days-of-surgery.
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(3) Data Sources
This measure is based on aggregate
measure data collected via chartabstraction by the ASC and submitted
via a CMS online data submission tool
(that is, QualityNet).
We are proposing that the data
collection period for the proposed ASC–
16 measure would be the calendar year
two years prior to the applicable
payment determination year. For
example, for the CY 2021 payment
determination, the data collection
period would be CY 2019. We also are
proposing that ASCs submit these data
to CMS during the time period of
January 1 to May 15 in the year prior to
the affected payment determination
year. For example, for the CY 2021
payment determination, the submission
period would be January 1, 2020 to May
15, 2020. We refer readers to section
XIV.D.3.b. of this proposed rule for a
more detailed discussion of the
requirements for data submitted via a
CMS online data submission tool.
(4) Measure Calculation
The outcome measured in the
proposed ASC–16 measure is the
number of ophthalmic anterior segment
surgery patients diagnosed with TASS
within 2 days of surgery. The numerator
for this measure is all anterior segment
surgery patients diagnosed with TASS
within 2 days of surgery. The
denominator for this measure is all
anterior segment surgery patients. The
specifications for this measure for the
ASC setting can be found at: https://
ascquality.org/documents/
ASC%20QC%20Implementation
%20Guide%203.2%20October
%202015.pdf.
(5) Cohort
The measure includes all patients,
regardless of age, undergoing anterior
segment surgery at an ASC. Additional
methodology and measure development
33691
details are available at: https://
www.ascquality.org/
qualitymeasures.cfm under ‘‘ASC
Quality Collaboration Measures
Implementation Guide.’’
(6) Risk Adjustment
The proposed ASC–16 measure is not
risk-adjusted; risk adjustment for patient
characteristics is not appropriate for this
measure.
We are inviting public comment on
our proposal to adopt the ASC–16:
Toxic Anterior Segment Syndrome
measure for the CY 2021 payment
determination and subsequent years as
discussed above. If the proposals in
section XIV.B.3.b., XIB.b.4. and
XIV.B.6.a. of this proposed rule are
finalized, the measure set for the
ASCQR Program CY 2021 payment
determination and subsequent years
would be as listed below. We note that
the measures being proposed for
removal in this proposed rule are not
included in this chart.
ASCQR PROGRAM MEASURE SET PREVIOUSLY FINALIZED AND PROPOSED FOR THE CY 2021 PAYMENT DETERMINATION
AND SUBSEQUENT YEARS
ASC No.
NQF No.
Measure name
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
0263 .................
0266 .................
0267 .................
0265 † ..............
0431 .................
0658 .................
ASC–10 ....................................................
0659 .................
ASC–11 ....................................................
1536 .................
ASC–12 ....................................................
ASC–13 ....................................................
ASC–14 ....................................................
ASC–15a ..................................................
ASC–15b ..................................................
ASC–15c ...................................................
ASC–15d ..................................................
ASC–15e ..................................................
ASC–16 ....................................................
2539 .................
None ................
None ................
None ................
None ................
None ................
None ................
None ................
None ................
Patient Burn.
Patient Fall.
Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant.
All-Cause Hospital Transfer/Admission.
Influenza Vaccination Coverage among Healthcare Personnel.
Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal
Colonoscopy in Average Risk Patients.
Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of
Adenomatous Polyps-Avoidance of Inappropriate Use.
Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.*
Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
Normothermia Outcome.
Unplanned Anterior Vitrectomy.
OAS CAHPS—About Facilities and Staff.**
OAS CAHPS—Communication About Procedure.**
OAS CAHPS—Preparation for Discharge and Recovery.**
OAS CAHPS—Overall Rating of Facility.**
OAS CAHPS—Recommendation of Facility.**
Toxic Anterior Segment Syndrome.***
ASC–1
ASC–2
ASC–3
ASC–4
ASC–8
ASC–9
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
† We note that NQF endorsement for this measure was removed.
* Measure voluntarily collected effective beginning with the CY 2017 payment determination as set forth in section XIV.E.3.c. of the CY 2015
OPPS/ASC final rule with comment period (79 FR 66984 through 66985).
** Measure proposed for delay in reporting beginning with the CY 2020 payment determination (CY 2018 data collection) and until further action in future rulemaking, as discussed in section XIV.B.4. of this proposed rule.
*** New measure proposed for the CY 2021 payment determination and subsequent years.
b. Proposed Adoption of ASC–17:
Hospital Visits After Orthopedic
Ambulatory Surgical Center Procedures
Beginning With the CY 2022 Payment
Determination
(1) Background
Reporting the quality of care provided
at ASCs is a key priority in the context
of growth in the number of ASCs and
the number of procedures performed in
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this setting. More than 60 percent of all
medical or surgical procedures
performed in 2006 were performed at
ASCs; this represents a three-fold
increase from the late 1990s.63 In 2015,
more than 3.4 million fee-for-service
Medicare beneficiaries were treated at
5,475 Medicare-certified ASCs, and
63 Cullen KA, Hall MJ, Golosinskiy A, Statistics
NFcH. Ambulatory Surgery in the United States,
2006. Nat Health Stat Rept; 2009.
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spending on ASC services by Medicare
and its beneficiaries amounted to 4.1
billion dollars.64 The patient population
served at ASCs has increased not only
in volume, but also in age and
complexity, which can be partially
64 Medicare Payment Advisory Commission
(MedPAC). Report to Congress: Medicare Payment
Policy. March 2017; available at: https://
www.medpac.gov/docs/default-source/reports/
mar17_entirereport.pdf?sfvrsn=0.
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attributed to improvements in
anesthetic care and innovations in
minimally invasive surgical
techniques.65 66 As such, ASCs have
become the preferred setting for the
provision of low-risk surgical and
medical procedures in the United
States, as many patients experience
shorter wait times, prefer to avoid
hospitalization, and are able to return to
work more quickly.67 As the number of
orthopedic procedures performed in
ASCs increases, it is increasingly
important to report the quality of care
for patients undergoing these
procedures. According to Medicare
claims data, approximately seven
percent of surgeries performed in ASCs
in 2007 were orthopedic in nature,
which reflects a 77-percent increase in
orthopedic procedures performed at
ASCs from 2000 to 2007.68
We believe measuring and reporting
seven-day unplanned hospital visits
following orthopedic ASC procedures
will incentivize ASCs to improve care
and care transitions. Patients that have
hospital visits that occur at or after
discharge from the ASC and may not be
readily visible to clinicians because
such patients often present to
alternative facilities, such as emergency
departments where patient information
is not linked back to the ASC.
Furthermore, many of the reasons for
hospital visits following surgery at an
ASC are preventable; patients often
present to the hospital for complications
of medical care, including infection,
post-operative bleeding, urinary
retention, nausea and vomiting, and
pain. One study found that of 10,032
patients who underwent orthopedic
surgery in an ASC between 1993 and
2012, 121 (1.2 percent) needed attention
in the emergency department in the first
24 hours after discharge due to pain or
bleeding, while others were admitted
later for issues related to pain and
swelling.69 Therefore, we believe
tracking and reporting these events
would facilitate efforts to lower the rate
of preventable adverse events and to
65 Bettelli G. High Risk Patients in Day Surgery.
Minerva Anestesiologica. 2009;75(5):259–268. See
also Fuchs K. Minimally Invasive Surgery.
Endoscopy. 2002;34(2):154–159.
66 Fuchs K. Minimally invasive surgery.
Endoscopy. 2002;34(2):154159.
67 Cullen KA, Hall MJ, Golosinskiy A, Statistics
NFcH. Ambulatory Surgery in the United States,
2006. Nat Health Stat Rept; 2009.
68 Goyal KS, Jain S, Buterbaugh GA, et al. The
Safety of Hang and Upper-Extremity Surgical
Procedures at a Freestanding Ambulatory Surgical
Center. The Journal of Bone and Joint Surgery.
2016;90:600–604.
69 Martın-Ferrero MA, Faour-Martın O.
´
´
Ambulatory surgery in orthopedics: experience of
over 10,000 patients. Journal of Orthopaedic
Surgery. 2014;19:332–338.
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improve the quality of care following
orthopedic surgeries performed at an
ASC.
(2) Overview of Measure
Based on the increasing prevalence of
orthopedic surgery in the ASC setting,
we believe it is important to minimize
adverse patient outcomes associated
with these orthopedic ASC surgeries.
Therefore, we are proposing to adopt the
ASC–17: Hospital Visits after
Orthopedic Ambulatory Surgical Center
Procedures measure in the ASCQR
Program for the CY 2022 payment
determination and subsequent years. We
expect the measure would promote
improvement in patient care over time,
because measurement coupled with
transparency in publicly reporting
measure information would make the
rate of unplanned hospital visits
(emergency department visits,
observation stays, and unplanned
inpatient admissions) following
orthopedic surgery at ASCs more visible
to both ASCs and patients and would
incentivize ASCs to incorporate quality
improvement activities to reduce these
unplanned hospital visits. The measure
also addresses the CMS National
Quality Strategy domains of making care
safer by reducing harm caused in the
delivery of care and promoting effective
communication and coordination of
care.
Section 1890A of the Act requires the
Secretary to establish a prerulemaking
process with respect to the selection of
certain categories of quality and
efficiency measures. Under section
1890A(a)(2) of the Act, the Secretary
must make available to the public by
December 1 of each year a list of quality
and efficiency measures that the
Secretary is considering for the
Medicare program. The ASC–17
measure we are proposing was included
on a publicly available document
entitled ‘‘List of Measures under
Consideration for December 1, 2016.’’ 70
The MAP reviewed this measure
(MUC16–152) and recommended this
measure be refined and resubmitted
prior to adoption, stating that testing
results should demonstrate reliability
and validity at the facility level in the
ambulatory surgical setting.71 MAP also
recommended that this measure be
submitted to NQF for review and
70 National Quality Forum. List of Measures under
Consideration for December 1, 2016. National
Quality Forum, Dec. 2016. Available at: https://
www.qualityforum.org/map/.
71 National Quality Forum. 2016–2017
Spreadsheet of Final Recommendations to HHS and
CMS. Available at: https://www.qualityforum.org/
WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81593.
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endorsement.72 At the time of the
MAP’s review, this measure was still
undergoing field testing.
Since the MAP’s review and
recommendation of ‘Refine and
Resubmit’ in 2016, we have completed
testing for this measure and continued
to refine this proposed measure in
response to the MAP’s
recommendations. Results of continued
development activities, including
stakeholder feedback from the public
comment period and pilot test findings
will be presented to the MAP during the
MAP feedback loop meeting in fall
2017. The proposed measure is
consistent with the information
submitted to the MAP, and the original
MAP submission and our continued
refinements support its scientific
acceptability for use in quality reporting
programs. Facility-level testing showed
variation in unplanned hospital visits
among ASCs after adjusting for case-mix
differences, which suggests variation in
quality of care and opportunities for
quality improvement; and reliability
testing showed fair measure score
reliability.73 As expected, the reliability
increased for ASCs with more patients;
ASCs with at least 250 cases showed
moderate reliability, consistent with
other publicly reported Medicare
claims-based, risk-adjusted outcome
measures.74 The validity testing results
demonstrated that the measure scores
are valid and useful measures of ASC
orthopedic surgical quality of care and
will provide ASCs with information that
can be used to improve their quality of
care. Detailed testing results are
available in the technical report for this
measure, located at: https://
www.cms.gov/medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
Sections 1833(i)(7)(B) and
1833(t)(17)(C)(i) of the Act, when read
together, require the Secretary, except as
the Secretary may otherwise provide, to
develop measures appropriate for the
measurement of the quality of care
72 National Quality Forum. 2016–2017
Spreadsheet of Final Recommendations to HHS and
CMS. Available at: https://www.qualityforum.org/
WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=81593.
73 Landis JR, Koch GG. The Measurement of
Observer Agreement for Categorical Data.
Biometrics. 1977;33(1):159–174.
74 Yale New Haven Health Services Corporation—
Center for Outcomes Research and Evaluation
(CORE) Measure Technical Report: Hospital Visits
after Orthopedic Ambulatory Surgical Center
Procedures (Version 1.0). May 2017. Available at:
https://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/
HospitalQualityInits/Downloads/Version-10_
Hospital-Visits_Orthopedic-ASC-Procedures_
Measure-Technical-Report_052017.pdf.
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furnished by ASCs that reflect
consensus among affected parties and,
to the extent feasible and practicable,
that include measures set forth by one
or more national consensus building
entities. However, we note that section
1833(i)(7)(B) of the Act does not require
that each measure we adopt for the
ASCQR Program be endorsed by a
national consensus building entity, or
by the NQF specifically. Further, under
section 1833(i)(7)(B) of the Act, section
1833(t)(17)(C)(i) of the Act applies to the
ASCQR Program, except as the Secretary
may otherwise provide. Under this
provision, the Secretary has further
authority to adopt non-NQF-endorsed
measures. As stated in the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74465 and 74505), we
believe that consensus among affected
parties can be reflected through means
other than NQF endorsement, including
consensus achieved during the measure
development process, consensus shown
through broad acceptance and use of
measures, and consensus through public
comment. We believe this proposed
measure meets these statutory
requirements.
The proposed ASC–17 measure is not
currently NQF-endorsed. However, we
intend to submit this measure for review
and endorsement by NQF once an
appropriate NQF project has a call for
measures. We believe that this measure
is appropriate for the measurement of
quality care furnished by ASCs, because
surgeries are becoming increasingly
common in ASCs and, as discussed
above, can signify unanticipated
admissions after care provided in ASCs.
Such visits are an unexpected and
potentially preventable outcome for
patients with a low anticipated
perioperative risk. We also believe this
proposed measure reflects consensus
among affected parties, because it was
developed with stakeholder input from
a Technical Expert Panel convened by a
CMS contractor as well as from the
measure development public comment
period.75 During the MAP and measure
development processes, public
commenters supported the measure’s
focus on assessing patient outcomes
after orthopedic surgery performed in
ASC setting of care, and agreed that the
measure would be meaningful and
improve quality of care. In addition, the
ASC–17 measure addresses the MAPidentified priority measure area of
surgical complications for the ASCQR
Program.76 Therefore, we believe it is
appropriate to incorporate this measure
into the ASCQR Program measure set
because collecting and publicly
reporting these data will improve
transparency, inform patients and
providers, and foster quality
improvement efforts.
75 National Quality Forum. ‘‘MAP 2017
Considerations for Implementing Measures in
Federal Programs: Hospitals.’’ Report. 2017.
Available at: https://www.qualityforum.org/map/
under ‘‘Hospitals—Final Report.’’
76 National Quality Forum. ‘‘MAP 2017
Considerations for Implementing Measures in
Federal Programs: Hospitals.’’ Report. 2017.
Available at: https://www.qualityforum.org/map/
under ‘‘Hospitals—Final Report.’’
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(3) Data Sources
This measure is claims-based and
uses Part A and Part B Medicare
administrative claims and Medicare
enrollment data to calculate the
measure.
We are proposing that the data
collection period for the proposed ASC–
17 measure would be the two calendar
years ending two years prior to the
applicable payment determination year.
For example, for the CY 2022 payment
determination, the data collection
period would be CY 2019 to 2020.
Because the measure data are collected
via claims, ASCs will not need to
submit any additional data directly to
CMS. We refer readers to section
XIV.D.4. of this proposed rule for a more
detailed discussion of the requirements
for data submitted via claims.
(4) Measure Calculation
The measure outcome is all-cause,
unplanned hospital visits within seven
days of an orthopedic procedure
performed at an ASC. For the purposes
of this measure, ‘‘hospital visits’’
include emergency department visits,
observation stays, and unplanned
inpatient admissions. When there are
two or more qualifying surgical
procedures within a 7-day period, the
measure considers all procedures as
index procedures; however, the
timeframe for outcome assessment is
defined as the interval between
procedures (including the day of the
next procedure) and then 7 days after
the last procedure.
The facility-level score is a riskstandardized hospital visit rate,
calculated by multiplying the ratio of
the predicted to the expected number of
post-surgical hospital visits among the
given ASC’s patients by the national
observed hospital visit rate for all ASCs.
For each ASC, the numerator of the ratio
is the number of hospital visits
predicted for the ASC’s patients
accounting for its observed rate, the
number of the orthopedic surgeries
performed at the ASC, the case-mix, and
the surgical complexity mix. The
denominator of the ratio is the expected
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33693
number of hospital visits given the
ASC’s case-mix and surgical complexity
mix. A ratio of less than one indicates
the ASC facility’s patients were
estimated as having fewer post-surgical
visits than expected compared to ASCs
with similar surgical complexity and
patients; and a ratio of greater than one
indicates the ASC facility’s patients
were estimated as having more visits
than expected. The national observed
hospital visit rate is the national
unadjusted proportion of patients who
had a hospital visit following an
orthopedic ASC surgery. For more
information on measure calculations,
we refer readers to: https://
www.cms.gov/medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
(5) Cohort
The patient cohort for the proposed
ASC–17 measure includes all Medicare
beneficiaries ages 65 and older
undergoing outpatient orthopedic
surgery at an ASC who have 12 prior
months of Medicare fee-for-service Parts
A and B enrollment. The target group of
procedures includes those that: (1) Are
routinely performed at ASCs; (2) involve
some increased risk of post-surgery
hospital visits; and (3) are routinely
performed by orthopedists.
Procedures included in the measure
cohort are on Medicare’s list of covered
ambulatory surgical center (ASC)
procedures.77 Medicare developed this
list to identify surgeries that have a low
to moderate risk profile. Surgeries on
the ASC list of covered procedures do
not involve or require major or
prolonged invasion of body cavities,
extensive blood loss, major blood
vessels, or care that is either emergent
or life threatening. Medicare annually
reviews and updates this list, and
includes a transparent public comment
submission and review process for
addition and/or removal of procedures
codes.78 The current list is accessible in
the Downloads section at: https://
www.cms.gov/medicare/medicare-feefor-service-payment/ascpayment/11_
addenda_updates.html.
In addition, to focus the measure only
on the subset of surgeries on Medicare’s
list of covered ASC procedures that
impose a meaningful risk of post77 Centers for Medicare and Medicaid Services.
‘‘Ambulatory Surgical Center (ASC) Payment:
Addenda Updates’’. Available at: https://
www.cms.gov/medicare/medicare-fee-for-servicepayment/ascpayment/11_addenda_updates.html.
78 Centers for Medicare and Medicaid Services.
‘‘Ambulatory Surgical Center (ASC) Payment:
Addenda Updates’’. Available at: https://
www.cms.gov/medicare/medicare-fee-for-servicepayment/ascpayment/11_addenda_updates.html.
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orthopedic ASC surgery hospital visits,
the measure includes only ‘‘major’’ and
‘‘minor’’ procedures, as indicated by the
Medicare Physician Fee Schedule global
surgery indicator (GSI) values of 090
and 010, respectively. This list of GSI
values is publicly available at: https://
www.cms.gov/Medicare/Medicare-feefor-service-payment/physicianfeesched/
pfs-federal-regulation-notices-items/
cms-1590-fc.html (download
Addendum B). Moreover, to identify the
subset of ASC procedures typically
performed by orthopedists, we used the
Clinical Classifications Software (CCS)
developed by the Agency for Healthcare
Research and Quality (AHRQ) and
include in this measure procedures from
AHRQ’s ‘‘operations on the
musculoskeletal system’’ group of
procedures.79 For more cohort details,
we refer readers to the measure
technical report located at: https://
www.cms.gov/medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
The measure excludes patients who
survived at least 7 days following
orthopedic surgery at an ASC, but were
not continuously enrolled in Medicare
fee-for-service Parts A and B in the 7
days after surgery. These patients are
excluded to ensure all patients captured
under this measure have full data
available for outcome assessment. There
are no additional inclusion or exclusion
criteria for the proposed ASC–17
measure. Additional methodology and
measure development details are
available at: https://www.cms.gov/
medicare/Quality-Initiatives-PatientAssessment-Instruments/
HospitalQualityInits/MeasureMethodology.html.
(6) Risk Adjustment
The statistical risk-adjustment model
includes 29 clinically relevant riskadjustment variables that are strongly
associated with risk of hospital visits
within seven days following ASC
orthopedic surgery. The measure risk
adjusts for age, 27 comorbidities, and a
variable for work Relative Value Units
(RVUs) to adjust for surgical
complexity.80 Additional risk
adjustment details are available in the
technical report at: https://
www.cms.gov/medicare/Quality79 Healthcare Cost and Utilization Project.
Clinical Classifications Software for Services and
Procedures. Available at: https://www.hcupus.ahrq.gov/toolssoftware/ccs_svcsproc/
ccssvcproc.jsp.
80 S. Coberly. The Basics; Relative Value Units
(RVUs). National Health Policy Forum. January 12,
2015. Available at: https://www.nhpf.org/library/thebasics/Basics_RVUs_01-12-15.pdf.
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Initiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
(7) Public Reporting
As stated above, facility-level testing
showed variation in unplanned hospital
visits among ASCs after adjusting for
case-mix differences, which suggests
variation in quality of care and
opportunities for quality
improvement.81 Reliability testing
showed fair measure score reliability.82
As expected, the reliability increased for
ASCs with more patients; ASCs with at
least 250 cases showed moderate
reliability, consistent with other
publicly reported Medicare claimsbased, risk-adjusted outcome measures.
If this measure is adopted, we are
proposing to publicly report results only
for facilities with sufficient case
numbers to meet moderate reliability
standards.83 CMS will determine the
case size cutoff for meeting moderate
reliability standards using the interclass
correlation (ICC) during the measure dry
run (discussed below) by testing the
reliability of the scores at different case
sizes in the dry run data. However, we
would also provide confidential
performance data directly to smaller
facilities, which do not meet the criteria
for sufficient case numbers for
reliability considerations, that would
benefit from seeing their measure results
and individual patient-level outcomes.
These data are currently largely
unknown to ASCs and providers. The
validity testing results demonstrated
that the measure scores are valid and
useful measures of ASC orthopedic
surgical quality of care and will provide
ASCs with information that can be used
to improve their quality of care. Detailed
testing results are available in the
technical report for this measure,
located at: https://www.cms.gov/
medicare/Quality-Initiatives-PatientAssessment-Instruments/
HospitalQualityInits/MeasureMethodology.html.
81 Yale New Haven Health Services Corporation.
Hospital Visits after Orthopedic Ambulatory
Surgical Center Procedures (Version 1.0). May 2017.
Available at: https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
HospitalQualityInits/Downloads/Version-10_
Hospital-Visits_Orthopedic-ASC-Procedures_
Measure-Technical-Report_052017.pdf.
82 Landis JR, Koch GG. The Measurement of
Observer Agreement for Categorical Data.
Biometrics. 1977;33(1):159–174.
83 Landis JR, Koch GG. The Measurement of
Observer Agreement for Categorical Data.
Biometrics. 1977;33(1):159–174.
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(8) Provision of Facility-Specific
Information Prior to Public Reporting
If this proposed measure is finalized
as proposed, we intend to conduct a dry
run before the official data collection
period or any public reporting. A dry
run is a period of confidential reporting
and feedback during which ASCs may
review their dry-run measure results,
and in addition, further familiarize
themselves with the measure
methodology and ask questions. For the
dry-run, we intend to use the most
current 2-year set of complete claims
(usually 12 months prior to the start
date) available at the time of dry run.
For example, if the dry run began in
June 2018, the most current 2-year set of
data available would likely be July 2015
to June 2017. Because we use paid, final
action Medicare claims, ASCs would
not need to submit any additional data
for the dry run. The dry run would
generate confidential feedback reports
for ASCs, including patient-level data
indicating whether the patient had a
hospital visit and, if so, the type of visit
(emergency department visit,
observation stay, or unplanned inpatient
admission), the admitting facility, and
the principal discharge diagnosis.
Further, the dry run would enable ASCs
to see their risk-standardized hospital
visit rate prior to the measure being
implemented. General information
about the dry run as well as confidential
facility-specific reports would be made
available for ASCs to review on their
accounts at: https://www.qualitynet.org.
We plan to continue to generate these
reports for ASCs after we implement the
measure so ASCs can use the
information to identify performance
gaps and develop quality improvement
strategies.
These confidential dry run results are
not publicly reported and do not affect
payment. We expect the dry run to take
approximately one month to conduct,
during which facilities would be
provided the confidential report and the
opportunity to review their performance
and provide feedback to us. However,
after the dry run, measure results would
have a payment impact and be publicly
reported beginning with the CY 2022
payment determination and for
subsequent years as proposed.
We are inviting public comment on
our proposal to adopt the ASC–17:
Hospital Visits after Orthopedic
Ambulatory Surgical Center Procedures
measure beginning with the CY 2022
payment determination as discussed
above.
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c. Proposed Adoption of ASC–18:
Hospital Visits After Urology
Ambulatory Surgical Center Procedures
Beginning With the CY 2022 Payment
Determination
(1) Background
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
As the number of urology procedures
performed in ASCs increases, it is of
increasing importance to report the
quality of care provided to patients
undergoing these procedures. One study
found that urology procedures
accounted for 4.8 percent of
unanticipated admissions, and that
urology surgery patients were almost
twice as likely as orthopedics, plastic
surgery, or neurosurgery to be admitted
following surgery.84 Similarly, a recent
study found outpatient urology surgery
has an overall 3.7 percent readmission
rate.85 A third study using a 5-percent
national sample of Medicare
beneficiaries ages 65 and older who
underwent one of 22 common
outpatient urologic procedures at ASCs
from 1998 to 2006 found a 7.9 percent
30-day risk-adjusted rate of inpatient
admission following surgery, with more
frequent same-day admissions following
outpatient surgery at ASCs than at
hospitals.86
Because urology surgery performed at
an ASC is a significant predictive factor
for unanticipated admissions compared
to other procedures,87 we believe
measuring and reporting 7-day
unplanned hospital visits following
urology procedures will incentivize
ASCs to improve care and care
transitions. Many of the reasons for
hospital visits following surgery at an
ASC are preventable; patients often
present to the hospital following
urology surgery for complications of
medical care, including urinary tract
infection, calculus of the ureter, urinary
retention, hematuria, and septicemia.88
However, increased patient and staff
education present opportunities to
improve the success rate of urology
84 Fortier J. Unanticipated Admission after
Ambulatory Surgery—A Prospective Study. Can J
Anaesth. 1998;45(7):612–619.
85 Rambachan A. Predictors of Readmission
Following Outpatient Urological Surgery, Annals of
the Royal College of Surgeons of England. Journal
of Urology. 2014;192(1):183–188.
86 Hollingsworth JM. Surgical Quality Among
Medicare Beneficiaries Undergoing Outpatient
Urological Surgery. The Journal of Urology.
2012;188(4):1274–1278.
87 Fortier J. Unanticipated Admission after
Ambulatory Surgery—A Prospective Study. Can J
Anaesth. 1998;45(7):612–619.
88 Paez, A. Adverse Events and Readmissions
after Day-Care Urological Surgery. International
Braz J Urol. 2007;33(3):330–338.
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surgeries in ASCs.89 Therefore, we
believe tracking and reporting these
events would facilitate efforts to lower
the rate of preventable adverse events
and to improve the quality of care
following urology procedures performed
at an ASC.
(2) Overview of Measure
We believe it is important to
minimize adverse patient outcomes
associated with urology ASC surgeries.
Therefore, we are proposing to adopt the
ASC–18: Hospital Visits after Urology
Ambulatory Surgical Center Procedures
measure in the ASCQR Program for the
CY 2022 payment determination and
subsequent years. We expect the
measure would promote improvement
in patient care over time, because
measurement coupled with
transparency in publicly reporting
measure information would make the
rate of unplanned hospital visits
(emergency department visits,
observation stays, and unplanned
inpatient admissions) following urology
procedures at ASCs more visible to both
ASCs and patients, and would
incentivize ASCs to incorporate quality
improvement activities to reduce these
unplanned hospital visits. The measure
also addresses the CMS National
Quality Strategy domains of making care
safer by reducing harm caused in the
delivery of care and promoting effective
communication and coordination of
care.
Section 1890A of the Act requires the
Secretary to establish a prerulemaking
process with respect to the selection of
certain categories of quality and
efficiency measures. Under section
1890A(a)(2) of the Act, the Secretary
must make available to the public by
December 1 of each year a list of quality
and efficiency measures that the
Secretary is considering for the
Medicare program. The ASC–18
measure we are proposing was included
on a publicly available document
entitled ‘‘List of Measures under
Consideration for December 1, 2016.’’ 90
The MAP reviewed this measure
(MUC16–153) and recommended that
this measure be refined and resubmitted
prior to adoption by the ASCQR
Program because, at the time of the
MAP’s review, this measure was still
undergoing field testing. The
Workgroup stated testing results should
demonstrate reliability and validity at
A. Adverse Events and Readmissions
after Day-Care Urological Surgery. International
Braz J Urol. 2007;33(3):330–338.
90 National Quality Forum. List of Measures under
Consideration for December 1, 2016. National
Quality Forum, Dec. 2016. Available at: https://
www.qualityforum.org/map/.
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89 Paez,
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33695
the facility level in the ambulatory
surgical setting, and recommended this
measure be submitted to NQF for review
and endorsement.91
Since the MAP’s review and
recommendation of ‘Refine and
Resubmit’ in 2016, we have completed
testing for this measure and continued
to refine this proposed measure in
response to the MAP’s
recommendations. Results of continued
development activities, including
stakeholder feedback from the public
comment period and pilot test findings
will be presented to the MAP during the
MAP feedback loop meeting in fall
2017. The proposed measure is
consistent with the information
submitted to the MAP, and the original
MAP submission and our continued
refinements support its scientific
acceptability for use in quality reporting
programs. Facility-level testing showed
significant variation in unplanned
hospital visits among ASCs after
adjusting for case-mix differences,
which suggests variation in quality of
care. Our testing found moderate
measure score reliability 92 for this
measure, which is consistent with
existing measures of patient outcomes
in the ASC setting, such as ASC–12:
Facility Seven-Day Risk-Standardized
Hospital Visit Rate after Outpatient
Colonoscopy (described in the CY 2015
OPPS/ASC final rule with comment
period at 79 FR 66973). Validity testing
demonstrated that the measure scores
identify differences in quality across
facilities. Detailed testing results are
available in the technical report for this
measure, located at: https://
www.cms.gov/medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
Sections 1833(i)(7)(B) and
1833(t)(17)(C)(i) of the Act, when read
together, require the Secretary, except as
the Secretary may otherwise provide, to
develop measures appropriate for the
measurement of the quality of care
furnished by ASCs that reflect
consensus among affected parties and,
to the extent feasible and practicable,
that include measures set forth by one
or more national consensus building
entities. However, we note that section
1833(i)(7)(B) of the Act does not require
that each measure we adopt for the
ASCQR Program be endorsed by a
91 National Quality Forum. 2016–2017
Spreadsheet of Final Recommendations to HHS and
CMS, available at: https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier=id&
ItemID=81593.
92 Landis JR, Koch GG. The Measurement of
Observer Agreement for Categorical Data.
Biometrics. 1977;33(1):159–174.
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national consensus building entity, or
by the NQF specifically. Further, under
section 1833(i)(7)(B) of the Act, section
1833(t)(17)(C)(i) of the Act applies to the
ASCQR Program, except as the Secretary
may otherwise provide. Under this
provision, the Secretary has further
authority to adopt non-endorsed
measures. As stated in the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74465 and 74505), we
believe that consensus among affected
parties can be reflected through means
other than NQF endorsement, including
consensus achieved during the measure
development process, consensus shown
through broad acceptance and use of
measures, and consensus through public
comment. We believe this proposed
measure meets these statutory
requirements.
The proposed ASC–18 measure is not
currently NQF-endorsed. However, we
intend to submit this measure for review
and endorsement by the NQF once an
appropriate measure endorsement
project has a call for measures. We
believe that this measure is appropriate
for the measurement of quality care
furnished by ASCs because urology
procedures are becoming increasingly
common in ASCs and, as discussed
above, can signify unanticipated
admissions after care provided in ASCs.
Such visits are an unexpected and
potentially preventable outcome for
patients with a low anticipated
perioperative risk. We also believe this
measure depicts consensus among
affected parties, as it was developed
with stakeholder input from both a
Technical Expert Panel convened by a
contractor as well as the measure
development public comment period.93
During the MAP and measure
development processes, public
commenters supported the measure’s
focus on assessing patient outcomes
after urology ASC and agreed that the
measure would be meaningful and
improve quality of care. In addition, the
ASC–18 measure addresses the MAPidentified priority measure area of
surgical complications for the ASCQR
Program.94 Therefore, we believe it is
appropriate to incorporate this measure
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
93 Yale
New Haven Health Services Corporation—
Center for Outcomes Research and Evaluation
(CORE). Public Comment Summary Report:
Development of Facility-Level Quality Measures of
Unplanned Hospital Visits after Selected
Ambulatory Surgical Center Procedures. Fall 2016.
Available at: https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
MMS/CallforPublicComment.html.
94 National Quality Forum. ‘‘MAP 2017
Considerations for Implementing Measures in
Federal Programs: Hospitals.’’ Report. 2017.
Available at: https://www.qualityforum.org/map/
under ‘‘Hospitals—Final Report.’’
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into the ASCQR Program measure set
because collecting and publicly
reporting this data will improve
transparency, inform patients and
providers, and foster quality
improvement efforts.
(3) Data Sources
This measure is claims-based and
uses Part A and Part B Medicare
administrative claims and Medicare
enrollment data to calculate the
measure.
We are proposing that the data
collection period for the proposed ASC–
18 measure would be the 2 calendar
years ending 2 years prior to the
applicable payment determination year.
For example, for the CY 2022 payment
determination, the data collection
period would be CY 2019 to 2020.
Because these measure data are
collected via claims, ASCs will not need
to submit any additional data directly to
CMS. We refer readers to section
XIV.D.4. of this proposed rule for a more
detailed discussion of the requirements
for data submitted via claims.
(4) Measure Calculations
The measure outcome is all-cause,
unplanned hospital visit occurring
within seven days of the urology
procedure performed at an ASC. For the
purpose of this measure, ‘‘hospital
visits’’ include emergency department
visits, observation stays, and unplanned
inpatient admissions. When there are
two or more qualifying surgical
procedures within a 7-day period, the
measure considers all procedures as
index procedures. However, the
timeframe for outcome assessment is
defined as the interval between
procedures (including the day of the
next procedure) and then 7 days after
the last procedure.
The facility-level score is a riskstandardized hospital visit rate,
calculated by multiplying the ratio of
the predicted to the expected number of
postsurgical hospital visits among the
given ASC’s patients by the national
observed hospital visit rate for all ASCs.
For each ASC, the numerator of the ratio
is the number of hospital visits
predicted for the ASC’s patients
accounting for its observed rate, the
number of the urology procedures
performed at the ASCs, the case-mix,
and the surgical complexity mix. The
denominator of the ratio is the expected
number of hospital visits given the
ASC’s case-mix and surgical complexity
mix. A ratio of less than one indicates
the ASC facility’s patients were
estimated as having fewer post-surgical
visits than expected compared to ASCs
with similar surgical complexity and
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Sfmt 4702
patients; and a ratio of greater than one
indicates the ASC facility’s patients
were estimated as having more visits
than expected. The national observed
hospital visit rate is the national
unadjusted proportion of patients who
had a hospital visit following a urology
ASC surgery. For more information on
measure calculations, we refer readers
to: https://www.cms.gov/medicare/
Quality-Initiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
(5) Cohort
The patient cohort for the proposed
ASC–18 measure includes all Medicare
beneficiaries ages 65 and older
undergoing outpatient urology
procedures at an ASC who have 12 prior
months of Medicare fee-for-service Parts
A and B enrollment. The target group of
procedures are those that: (1) Are
routinely performed at ASCs; (2) involve
increased risk of post-surgery hospital
visits; and (3) are routinely performed
by urologists.
Procedures included in the measure
cohort are on Medicare’s list of covered
ambulatory surgical center (ASC)
procedures.95 Medicare developed this
list to identify surgeries have a low to
moderate risk profile. Surgeries on the
ASC list of covered procedures do not
involve or require major or prolonged
invasion of body cavities, extensive
blood loss, major blood vessels, or care
that is either emergent or life
threatening.96 Medicare annually
reviews and updates this list, and
includes a transparent public comment
submission and review process for
addition and/or removal of procedures
codes.97 The current list is accessible in
the Downloads section at: https://
www.cms.gov/medicare/medicare-feefor-service-payment/ascpayment/11_
addenda_updates.html. In addition, to
focus the measure only on the subset of
surgeries on Medicare’s list of covered
ASC procedures that impose a
meaningful risk of post-urology ASC
surgery hospital visits, the measure
includes only ‘‘major’’ and ‘‘minor’’
procedures, as indicated by the MPFS
95 Centers for Medicare and Medicaid Services.
‘‘Ambulatory Surgical Center (ASC) Payment:
Addenda Updates’’. Available at: https://
www.cms.gov/medicare/medicare-fee-for-servicepayment/ascpayment/11_addenda_updates.html.
96 Centers for Medicare and Medicaid Services.
‘‘Ambulatory Surgical Center (ASC) Payment:
Addenda Updates’’. Available at: https://
www.cms.gov/medicare/medicare-fee-for-servicepayment/ascpayment/11_addenda_updates.html.
97 Centers for Medicare and Medicaid Services.
‘‘Ambulatory Surgical Center (ASC) Payment:
Addenda Updates’’. Available at: https://
www.cms.gov/medicare/medicare-fee-for-servicepayment/ascpayment/11_addenda_updates.html.
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global surgery indicator (GSI) values of
090 and 010, respectively, and
therapeutic cystoscopy procedures. This
list of GSI values is publicly available
at: https://www.cms.gov/Medicare/
Medicare-fee-for-service-payment/
physicianfeesched/pfs-federalregulation-notices-items/cms-1590fc.html (download Addendum B).
Moreover, to identify the subset of ASC
procedures typically performed by
urologists, we used the Clinical
Classifications Software (CCS)
developed by the Agency for Healthcare
Research and Quality (AHRQ) and
include in this measure procedures from
two of AHRQ’s categories, ‘‘operations
on the urinary system’’ and ‘‘operations
on the male genital organs.’’ 98 For more
cohort details, we refer readers to the
measure technical report located at:
https://www.cms.gov/medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html.
The measure excludes patients who
survived at least 7 days following a
urology procedure at an ASC, but were
not continuously enrolled in Medicare
fee-for-service Parts A and B in the 7
days after surgery. These patients are
excluded to ensure all patients captured
under this measure have full data
available for outcome assessment. There
are no additional inclusion or exclusion
criteria for the proposed ASC–18
measure. Additional methodology and
measure development details are
available at: https://www.cms.gov/
medicare/Quality-Initiatives-PatientAssessment-Instruments/
HospitalQualityInits/MeasureMethodology.html.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
(6) Risk Adjustment
The statistical risk-adjustment model
includes nine clinically relevant riskadjustment variables that are strongly
associated with risk of hospital visits
within seven days following ASC
urology surgery. The measure risk
adjusts for age, six comorbidities,
number of qualifying procedures, and
work Relative Value Units (RVUs) to
adjust for surgical complexity.99
Additional risk adjustment details are
available in the technical report at:
https://www.cms.gov/medicare/QualityInitiatives-Patient-Assessment98 Healthcare Cost and Utilization Project.
Clinical Classifications Software for Services and
Procedures. Available at: https://www.hcupus.ahrq.gov/toolssoftware/ccs_svcsproc/
ccssvcproc.jsp.
99 S. Coberly. The Basics; Relative Value Units
(RVUs). National Health Policy Forum. January 12,
2015. Available at: https://www.nhpf.org/library/thebasics/Basics_RVUs_01-12-15.pdf.
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Instruments/HospitalQualityInits/
Measure-Methodology.html.
(7) Public Reporting
As stated above, facility-level testing
showed variation in unplanned hospital
visits among ASCs after adjusting for
case-mix differences, which suggests
variation in quality of care and
opportunities for quality
improvement.100 Reliability testing
showed fair measure score reliability.101
As expected, the reliability increased for
ASCs with more patients; ASCs with at
least 250 cases showed moderate
reliability, consistent with other
publicly reported Medicare claimsbased, risk-adjusted outcome measures.
If this measure is adopted, we are
proposing to publicly report results only
for facilities with sufficient case
numbers to meet moderate reliability
standards.102 CMS will determine the
case size cutoff for meeting moderate
reliability standards using the interclass
correlation (ICC) during the measure dry
run (discussed below) by testing the
reliability of the scores at different case
sizes in the dry run data. However, we
would also provide confidential
performance data directly to smaller
facilities which do not meet the criteria
for sufficient case numbers for
reliability considerations that would
benefit from seeing their measure results
and individual patient-level outcomes,
as these data are currently largely
unknown to ASCs and providers. The
validity testing results demonstrated
that the measure scores are valid and
useful measures of ASC urology surgical
quality of care and will provide ASCs
with information that can be used to
improve their quality of care. Detailed
testing results are available in the
technical report for this measure,
located at: https://www.cms.gov/
medicare/Quality-Initiatives-PatientAssessment-Instruments/
HospitalQualityInits/MeasureMethodology.html.
(8) Provision of Facility-Specific
Information Prior to Public Reporting
If this proposed measure is finalized,
but before the official data collection
100 Yale New Haven Health Services Corporation.
Hospital Visits after Orthopedic Ambulatory
Surgical Center Procedures (Version 1.0). May 2017.
Available at: https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
HospitalQualityInits/Downloads/Version-10_
Hospital-Visits_Orthopedic-ASC-Procedures_
Measure-Technical-Report_052017.pdf.
101 Landis JR, Koch GG. The Measurement of
Observer Agreement for Categorical Data.
Biometrics. 1977;33(1):159–174.
102 Landis JR, Koch GG. The Measurement of
Observer Agreement for Categorical Data.
Biometrics. 1977;33(1):159–174.
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33697
period or public reporting for the
proposed ASC–18 measure, we intend
to conduct a dry run. A dry run is a
period of confidential feedback during
which ASCs may review their dry-run
measure results, and in addition, further
familiarize themselves with the measure
methodology, and ask questions. For the
dry-run, we intend to use the most
current 2-year set of complete claims
(usually 12 months prior to the start
date) available at the time of dry run.
For example, if the dry run began in
June 2018, the most current 2-year set of
data available would likely be July 2015
to June 2017. Because we use paid, final
action Medicare claims, ASCs would
not need to submit any additional data
for the dry run. The dry run would
generate confidential feedback reports
for ASCs, including patient-level data
indicating whether the patient had a
hospital visit and, if so, the type of visit
(emergency department visit,
observation stay, or unplanned inpatient
admission), the admitting facility, and
the principal discharge diagnosis.
Further, the dry run would enable ASCs
to see their risk-standardized hospital
visit rate prior to the measure being
implemented. General information
about the dry run as well as confidential
facility-specific reports would be made
available for ASCs to review on their
accounts at: https://www.qualitynet.org.
We intend to continue to generate these
reports for ASCs after we implement the
measure so ASCs can use the
information to identify performance
gaps and develop quality improvement
strategies.
Confidential dry run results are not
publicly reported and do not affect
payment. We expect the dry run to take
approximately 1 month to conduct,
during which facilities would be
provided the confidential report and the
opportunity to review their performance
and provide feedback to us. However,
the measure would affect payment and
would be publicly reported beginning
with the CY 2022 payment
determination and subsequent years as
proposed.
We are inviting public comment on
our proposal to adopt the ASC–18:
Hospital Visits after Urology
Ambulatory Surgical Center Procedures
measure beginning with the CY 2022
payment determination as discussed
above.
d. Summary of Previously Adopted
Measures and Newly Proposed ASCQR
Program Measures for the CY 2022
Payment Determination and Subsequent
Years
If the proposals in sections XIV.B.3.b.,
XIV.B.4. and XIV.B.6.a. through c. of
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this proposed rule are finalized, the
measure set for the ASCQR Program CY
2022 payment determination and
subsequent years would be as listed
below.
ASCQR PROGRAM MEASURE SET WITH PREVIOUSLY FINALIZED AND NEWLY PROPOSED MEASURES FOR THE CY 2022
PAYMENT DETERMINATION AND SUBSEQUENT YEARS
ASC No.
NQF No.
Measure name
ASC–1 .........
ASC–2 .........
ASC–3 .........
ASC–4 .........
ASC–8 .........
ASC–9 .........
ASC–10 .......
0263 ............
0266 ............
0267 ............
0265 † .........
0431 ............
0658 ............
0659 ............
ASC–11 .......
ASC–12 .......
ASC–13 .......
ASC–14 .......
ASC–15a .....
ASC–15b .....
ASC–15c ......
ASC–15d .....
ASC–15e .....
ASC–16 .......
ASC–17 .......
ASC–18 .......
1536
2539
None
None
None
None
None
None
None
None
None
None
Patient Burn.
Patient Fall.
Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant.
All-Cause Hospital Transfer/Admission.
Influenza Vaccination Coverage among Healthcare Personnel.
Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients.
Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use.
Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.*
Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
Normothermia Outcome.
Unplanned Anterior Vitrectomy.
OAS CAHPS—About Facilities and Staff.**
OAS CAHPS—Communication About Procedure.**
OAS CAHPS—Preparation for Discharge and Recovery.**
OAS CAHPS—Overall Rating of Facility.**
OAS CAHPS—Recommendation of Facility.**
Toxic Anterior Segment Syndrome.***
Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures.***
Hospital Visits after Urology Ambulatory Surgical Center Procedures.****
............
............
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
† We note that NQF endorsement for this measure was removed.
* Measure voluntarily collected effective beginning with the CY 2017 payment determination as set forth in section XIV.E.3.c. of the CY 2015
OPPS/ASC final rule with comment period (79 FR 66984 through 66985).
** Measure proposed for delay beginning with CY 2018 reporting until further action in future rulemaking as discussed in section XIV.B.4. of
this proposed rule.
*** New measure proposed for the CY 2021 payment determination and subsequent years.
**** New measure proposed for the CY 2022 payment determination and subsequent years.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
7. ASCQR Program Measures and
Topics for Future Consideration
In the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68493
through 68494), we set forth our
considerations in the selection of
ASCQR Program quality measures. We
seek to develop a comprehensive set of
quality measures to be available for
widespread use for making informed
decisions and quality improvement in
the ASC setting (77 FR 68496). We also
seek to align these quality measures
with the National Quality Strategy
(NQS), the CMS Strategic Plan (which
includes the CMS Quality Strategy), and
our other quality reporting and valuebased purchasing (VBP) programs, as
appropriate. Accordingly, as we stated
in the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66979), in
considering future ASCQR Program
measures, we are focusing on the
following NQS and CMS Quality
Strategy measure domains: Make care
safer by reducing harm caused in the
delivery of care; strengthen person and
family engagement as partners in their
care; promote effective communication
and coordination of care; promote
effective prevention and treatment of
chronic disease; work with communities
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to promote best practices of healthy
living; and make care affordable.
In this proposed rule, we are inviting
public comment on one measure
developed by the CDC for potential
inclusion in the ASCQR Program in
future rulemaking, the Ambulatory
Breast Procedure Surgical Site Infection
Outcome measure (NQF #3025), and are
seeking public comment on accounting
for social risk factors in the ASCQR
Program. This potential measure is
discussed in more detail below.
Healthcare-associated infections
(HAIs) are a major cause of morbidity
and mortality in healthcare settings in
the United States, with the most recent
prevalence surveys of HAIs estimating
that approximately four percent of
inpatients in acute care settings have
developed at least one HAI, translating
to 721,800 infections in 648,000 patients
in 2011.103 Surgical site infection (SSI)
is one of the most common HAIs,
comprising approximately 22 percent of
all HAIs, and contribute greatly to the
mortality and cost burden of HAIs.104
103 Magill S.S., Edwards J.R., Bamberg W.,
Beldavs Z.G., Dumyati G., Kainer M.A. Multistate
Point-Prevalence Survey of Health Care-Associated
Infections. N Engl J Med. 2014;370:1198–1208.
104 Magill S.S., Edwards J.R., Bamberg W.,
Beldavs Z.G., Dumyati G., Kainer M.A. Multistate
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Breast SSIs represent a substantial
proportion of SSIs overall in inpatient
settings, and have one of the highest
infection risks of any procedure type in
outpatient settings.105 While SSI rates
following breast procedures vary from
one percent to over 30 percent
depending on procedure type,106 the
trend in surgery transitioning to
outpatient and ambulatory surgery
Point-Prevalence Survey of Health Care-Associated
Infections. N Engl J Med. 2014;370:1198–1208.
105 This statement is based on an analysis of data
reported to the National Healthcare Safety Network
(NHSN). Out of 67,150 ASC procedures report to
NHSN from 2010 to 2013, 30,787 (45.9 percent)
were breast procedures. Out of the 142 surgical site
infections reported from ASCs during the same time
period, 78 (54.9 percent) were related to breast
procedures, indicating an SSI risk of 0.25 percent.
This was the highest volume and SSI risk out of all
outpatient ASC procedures reported in the
timeframe.
106 Vilar-Compte D. Jacquemin B., Robles-Vidal
C., and Volkow P. Surgical Site Infections in Breast
Surgery: Case-Control Study. World Journal of
Surgery. 2004;28(3):242–246; Mannien J., Wille J.C.,
Snoeren R.L. van den Hof S. Impact of
Postdischarge Surveillance on Surgical Site
Infection Rates for Several Surgical Procedures:
Results from the Nosocomial Surveillance Network
in the Netherlands. Infect Control Hosp Epidemiol.
2006;27:809–816; Vilar-Compte D., Rosales S.,
Hernandez-Mello N., Maafs E. and Volkow P.
Surveillance, Control, and Prevention of Surgical
Site Infections in Breast Cancer Surgery: a 5-year
Experience. American Journal of Infection Control.
2009;37(8):674–679.
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settings due to advances in surgical
techniques and economic incentives for
ambulatory surgery make these events
an outcome of interest for the ASCQR
Program.
Numerous individual studies and
systematic reviews provide strong
evidence that measurement and
feedback of surgical site infections leads
to lower SSI rates in the long term.107
Although standardized metrics have
been developed to measure SSI rates for
inpatient surgeries in the hospital
setting,108 these have not yet been
developed for outpatient surgeries in
ASCs, which comprise a fast-growing
proportion of all surgeries performed in
the United States. 109 We believe this
measure, if adopted in the future, could
serve as a quantitative guide for ASCs,
enabling them to benchmark SSI rates in
their facilities against nationally
aggregated data and set targets for
improvement.
This issue is of interest to the ASCQR
Program because breast procedures are
becoming increasingly common at
ASCs.110 In addition, the Ambulatory
Breast Procedure Surgical Site Infection
Outcome measure addresses the MAPidentified measure gap area of surgical
quality measures, including surgical site
infection measures, for the ASCQR
Program.111
The Ambulatory Breast Procedure
Surgical Site Infection Outcome
measure was included on the 2016 MUC
list 112 and reviewed by the MAP. The
MAP conditionally supported the
measure (MUC16–155), noting the rapid
shift of care to the ambulatory surgery
107 Anderson D.J., Podgorny K., Berrıos-Torres S.
´
et al. Strategies to Prevent Surgical Site Infections
in Acute Care Hospitals: 2014 Update. Infection
Control & Hospital Epidemiology. 2014;35:605–627;
Mangram A.J, Horan T.C., Pearson M.L., Silver L.C.,
Jarvis W.R. Guideline for Prevention of Surgical Site
Infection. Hospital Infection Control Practices
Advisory Committee. Infect Control Hosp
Epidemiol. 1999;?20:250–278; Gaynes R., Richards
C., Edwards J.R., et al Feeding Back Surveillance
Data to Prevent Hospital-Acquired Infections.
Emerg Infect Dis. 2001;7:295–298.
108 Mu Y., et al. Improving Risk-Adjusted
Measures of Surgical Site Infection for the National
Healthcare Safety Network. Infect Control Hosp
Epidemiol. 2011;32(10):970–986.
109 Mu Y., et al. Improving Risk-Adjusted
Measures of Surgical Site Infection for the National
Healthcare Safety Network. Infect Control Hosp
Epidemiol. 2011;32(10):970–986.
110 Cullen KA, Hall MJ, Golosinskiy A, Statistics
NFcH. Ambulatory Surgery in the United States,
2006. Nat Health Stat Rept; 2009.
111 National Quality Forum. ‘‘MAP 2017
Considerations for Implementing Measures in
Federal Programs: Hospitals.’’ Report. 2017.
Available at: https://www.qualityforum.org/map/
under ‘‘Hospitals—Final Report.’’
112 https://www.qualityforum.org/Setting_
Priorities/Partnership/Measure_Applications_
Partnership.aspx, under ‘‘2016 Measures Under
Consideration List (PDF).’’
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setting and the need to ensure
transparency about the safety of
ambulatory surgery centers.113 The MAP
further noted that this measure should
be submitted for NQF review and
endorsement.114 A summary of the MAP
recommendations can be found at:
https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier=
id&ItemID=81593. We note that this
measure received NQF endorsement in
January 2017, and therefore satisfies the
MAP’s condition for support.115
The Ambulatory Breast Procedure
Surgical Site Infection (SSI) Outcome
measure is used to assess the riskadjusted Standardized Infection Ratio
(SIR) for all SSIs following breast
procedures conducted at ASCs among
adult patients and reported to the CDC’s
National Healthcare Safety Network.
The measure compares the reported
number of SSIs observed at an ASC with
a predicted value based on nationally
aggregated data. The numerator for this
measure is all SSIs during the 30-day
and 90-day postoperative periods
following breast procedures in ASCs.
The term SSI as used in this measure is
defined in accordance with the CDC
NHSN’s surveillance protocol as an
infection, following a breast procedure,
of either the skin, subcutaneous tissue
and breast parenchyma at the incision
site (superficial incisional SSI), deep
soft tissues of the incision site (deep
incisional SSI), or any part of the body
deeper than the fascial/muscle layers
that is opened or manipulated during
the operative procedure (organ/space
SSI).116 The denominator for this
measure is all adult patients (defined as
patients ages 18 to 108 years)
undergoing breast procedures, as
specified by the operative codes that
comprise the breast procedure category
of the NHSN Patient Safety Component
Protocol, at an ASC. This measure
cohort excludes hospital inpatient and
outpatient departments, pediatric
patients (patients younger than 18 years)
and very elderly patients (older than
108 years), and brain-dead patients
whose organs are being removed for
113 National Quality Forum. 2016–2017
Spreadsheet of Final Recommendations to HHS and
CMS, available at: https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=
81593.
114 National Quality Forum. 2016–2017
Spreadsheet of Final Recommendations to HHS and
CMS, available at: https://www.qualityforum.org/
WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=
81593.
115 National Quality Forum. Endorsed measure
specification available at: https://
www.qualityforum.org/QPS/3025.
116 Centers for Disease Control and Prevention.
‘‘Surgical Site Infection (SSI) Event. Available at:
https://www.cdc.gov/nhsn/pdfs/pscmanual/
9pscssicurrent.pdf.
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donor purposes. The specifications for
this measure for the ASC setting can be
found at: https://www.qualityforum.org/
QPS/ after searching ‘‘Ambulatory
Breast Procedure Surgical Site Infection
Outcome Measure.’’
We are inviting public comment on
the possible inclusion of this measure in
the ASCQR Program measure set in the
future.
8. Maintenance of Technical
Specifications for Quality Measures
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74513 through 74514),
where we finalized our proposal to
follow the same process for updating the
ASCQR Program measures that we
adopted for the Hospital OQR Program
measures, including the subregulatory
process for making updates to the
adopted measures. In the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68496 through 68497), the
CY 2014 OPPS/ASC final rule with
comment period (78 FR 75131), and the
CY 2015 OPPS/ASC final rule with
comment period (79 FR 66981), we
provided additional clarification
regarding the ASCQR Program policy in
the context of the previously finalized
Hospital OQR Program policy, including
the processes for addressing
nonsubstantive and substantive changes
to adopted measures. In the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70531), we provided
clarification regarding our decision to
not display the technical specifications
for the ASCQR Program on the CMS
Web site, but stated that we will
continue to display the technical
specifications for the ASCQR Program
on the QualityNet Web site. In addition,
our policies regarding the maintenance
of technical specifications for the
ASCQR Program are codified at 42 CFR
416.325. We are not proposing any
changes to our policies regarding the
maintenance of technical specifications
for the ASCQR Program.
9. Public Reporting of ASCQR Program
Data
In the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74514
through 74515), we finalized a policy to
make data that an ASC submitted for the
ASCQR Program publicly available on a
CMS Web site after providing an ASC an
opportunity to review the data to be
made public. In the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70531 through 70533), we finalized our
policy to publicly display data by the
National Provider Identifier (NPI) when
the data are submitted by the NPI and
to publicly display data by the CCN
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when the data are submitted by the
CCN. In addition, we codified our
policies regarding the public reporting
of ASCQR Program data at 42 CFR
416.315 (80 FR 70533). In the CY 2017
OPPS/ASC final rule with comment
period, we formalized our current
public display practices regarding
timing of public display and the
preview period by finalizing our
proposals to publicly display data on
the Hospital Compare Web site, or other
CMS Web site as soon as practicable
after measure data have been submitted
to CMS; to generally provide ASCs with
approximately 30 days to review their
data before publicly reporting the data;
and to announce the timeframes for
each preview period starting with the
CY 2018 payment determination on a
CMS Web site and/or on our applicable
listservs (81 FR 79819 through 79820).
We are not proposing any changes to
these policies. However, we note that in
section XIV.B.6.b. and c. of this
proposed rule we are proposing two
new measures: ASC–17: Hospital Visits
after Orthopedic Ambulatory Surgical
Center Procedures, and ASC–18:
Hospital Visits after Urology
Ambulatory Surgical Center Procedures,
beginning with the CY 2022 payment
determination, and specific public
reporting policies associated with these
proposed measures.
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C. Administrative Requirements
1. Requirements Regarding QualityNet
Account and Security Administrator
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75132 through 75133) for
a detailed discussion of the QualityNet
security administrator requirements,
including setting up a QualityNet
account, and the associated timelines,
for the CY 2014 payment determination
and subsequent years. In the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70533), we codified the
administrative requirements regarding
maintenance of a QualityNet account
and security administrator for the
ASCQR Program at 42 CFR
416.310(c)(1)(i). In section XIV.D.3. of
this proposed rule, we are proposing to
expand submission via the CMS online
tool to also allow for batch data
submission and make corresponding
changes to the 42 CFR 416.310(c)(1)(i).
2. Requirements Regarding Participation
Status
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75133 through 75135) for
a complete discussion of the
participation status requirements for the
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CY 2014 payment determination and
subsequent years. In the CY 2016 OPPS/
ASC final rule with comment period (80
FR 70533 and 70534), we codified these
requirements regarding participation
status for the ASCQR Program at 42 CFR
416.305. We are not proposing any
changes to these policies.
D. Form, Manner, and Timing of Data
Submitted for the ASCQR Program
1. Requirements Regarding Data
Processing and Collection Periods for
Claims-Based Measures Using Quality
Data Codes (QDCs)
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75135) for a complete
summary of the data processing and
collection periods for the claims-based
measures using QDCs for the CY 2014
payment determination and subsequent
years. In the CY 2016 OPPS/ASC final
rule with comment period (80 FR
70534), we codified the requirements
regarding data processing and collection
periods for claims-based measures using
QDCs for the ASCQR Program at 42 CFR
416.310(a)(1) and (2). We are not
proposing any changes to these
requirements.
We note that, in section XIV.B.3.b.(1)
of this proposed rule, we are proposing
to remove one claims-based measure
using QDCs, ASC–5: Prophylactic
Intravenous (IV) Antibiotic Timing,
beginning with the CY 2019 payment
determination. If this proposal is
finalized as proposed, the following
previously finalized claims-based
measures using QDCs will be collected
for the CY 2020 payment determination
and subsequent years:
• ASC–1: Patient Burn;
• ASC–2: Patient Fall;
• ASC–3: Wrong Site, Wrong Side,
Wrong Patient, Wrong Procedure,
Wrong Implant; and
• ASC–4: Hospital Transfer/
Admission.
2. Minimum Threshold, Minimum Case
Volume, and Data Completeness for
Claims-Based Measures Using QDCs
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75135 through 75137), the
CY 2016 OPPS/ASC final rule with
comment period (80 FR 70534 through
70535) as well as 42 CFR 416.310(a)(3)
and 42 CFR 416.305(c) for our policies
about minimum threshold, minimum
case volume, and data completeness for
claims-based measures using QDCs. We
are not proposing any changes to these
policies.
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3. Requirements for Data Submitted via
an Online Data Submission Tool
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74505 through 74509); CY
2014 OPPS/ASC final rule with
comment period (78 FR 75137 through
75140); CY 2015 OPPS/ASC final rule
with comment period (79 FR 66983
through 66986); CY 2016 OPPS/ASC
final rule with comment period (80 FR
70535 through 70536); CY 2017 OPPS/
ASC final rule with comment period (81
FR 79820 through 79822); and 42 CFR
416.310(c) for our previously finalized
policies for data submitted via an online
data submission tool. For more
information on data submission using
QualityNet, we refer readers to: https://
www.qualitynet.org/dcs/Content
Server?c=Page&pagename=Qnet
Public%2FPage%2FQnetTier2&cid=
1228773314768. We note that we are
proposing to remove two measures
submitted via a CMS online data
submission tool in section XIV.B.3.b.(2)
and XIV.B.3.b.(3) of this proposed rule
and to adopt one measure submitted via
a CMS online data submission tool in
section XIV.B.6.a. of this proposed rule.
a. Requirements for Data Submitted via
a Non-CMS Online Data Submission
Tool
We refer readers to CY 2014 OPPS/
ASC final rule with comment period (78
FR 75139 through 75140) and CY 2015
OPPS/ASC final rule with comment
period (79 FR 66985 through 66986) for
our requirements regarding data
submitted via a non-CMS online data
submission tool (CDC NHSN Web site).
We codified our existing policies
regarding the data collection time
periods for measures involving online
data submission and the deadline for
data submission via a non-CMS online
data submission tool at 42 CFR
416.310(c)(2). Currently, we only have
one measure (ASC–8: Influenza
Vaccination Coverage among Healthcare
Personnel) that is submitted via a nonCMS online data submission tool.
We are not proposing any changes to
the reporting requirements for this
measure.
b. Proposals Regarding Requirements for
Data Submitted via a CMS Online Data
Submission Tool
We refer readers to the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75137 through 75139), CY
2016 OPPS/ASC final rule with
comment period (80 FR 70535 through
70536), CY 2017 OPPS/ASC final rule
with comment period (81 FR 79821
through 79822), and 42 CFR
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416.310(c)(1) for our requirements
regarding data submitted via a CMS
online data submission tool. We are
currently using the QualityNet Web site
as our CMS online data submission tool:
https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=
QnetPublic%2FPage%2FQnet
Homepage&cid=1120143435383. In this
proposed rule, we are making one
proposal to the method of data
submission via a CMS online data
submission tool.
(1) Batch Submission
We are not proposing any changes to
our policies regarding data submitted
via a CMS online data submission tool
when data is entered for individual
facilities. Currently, for individual
facility data entry, users must have a
QualityNet account and use one
Hospital Quality Reporting (HQR)
External File per facility that is
uploaded into the QualityNet secure
portal. However, using one HQR
External File that only allows data entry
for one facility can be burdensome for
entities responsible for submitting such
data for multiple facilities, such as
multi-facility ASCs. Therefore, in an
effort to streamline the process, we are
proposing to expand the CMS online
tool to also allow for batch submission
beginning with data submitted during
CY 2018 for the CY 2020 payment
determination and subsequent years.
Batch submission is submission of
data for multiple facilities
simultaneously using a single,
electronic file containing data from
multiple facilities submitted via one
agent QualityNet account. Under the
batch submission process, ASC agents
(for example, a corporate representative
for a corporate entity consisting of
multiple ASC facilities with separate
NPIs) would be assigned a vendor ID
and an ASC’s representative would
submit the Security Administrator (SA)
form with the assigned vendor ID for the
agent to establish their own QualityNet
account. Once approved, the agent may
submit data for any ASC associated with
that ID, individually or in a batch, and
access data reports for the same ASCs.
Agents would only have access to data
reports for facilities that have
authorized them to have access. For
batch submission, agents would be
provided the HQR external file layout
with which to upload their associated
ASCs’ data under the agents’ QualityNet
account. In order to submit batch data,
agents would need to meet all
QualityNet account requirements, such
as establishing a QualityNet account
and maintaining a QualityNet security
administrator. Additional details
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regarding logistics of batch data
submission would be included in future
guidance in the Specifications Manual.
In addition, we are proposing to make
corresponding changes to 42 CFR
416.310(c)(1)(i) to reflect this proposal
and replace the term ‘‘ASCs’’ with the
phrase ‘‘ASCs, and any agents
submitting data on an ASC’s behalf.’’
We are inviting public comment on
our proposals, as discussed above, to:
(1) Expand the CMS online tool to also
allow for batch submission of measure
data beginning with data submitted
during CY 2018, and (2) make
corresponding changes to modify 42
CFR 416.310(c)(1)(i) to reflect the
aforementioned proposal.
(2) Measures Using the CMS Online
Data Submission Tool for the CY 2020
Payment Determination And
Subsequent Years
In sections XIV.B.3.b.(2) and
XIV.B.3.b.(3) of this proposed rule,
respectively, we are proposing to
remove two measures collected via a
CMS online data submission tool—
ASC–6: Safe Survey Checklist Use and
ASC–7: ASC Facility Volume Data on
Selected Surgical Procedures—
beginning with the CY 2019 payment
determination. If these proposals are
finalized as proposed, the following
previously finalized measures will
require data to be submitted via a CMS
online data submission tool for the CY
2020 payment determination and
subsequent years:
• ASC–9: Endoscopy/Polyp
Surveillance: Appropriate Follow-Up
Interval for Normal Colonoscopy in
Average Risk Patients;
• ASC–10: Endoscopy/Polyp
Surveillance: Colonoscopy Interval for
Patients with a History of Adenomatous
Polyps—Avoidance of Inappropriate
Use; and
• ASC–11: Cataracts: Improvement in
Patients’ Visual Function within 90
Days Following Cataract Surgery.117
Furthermore, in section XIV.B.6.a. of
this proposed rule, we are proposing to
adopt one new measure collected via a
CMS online data submission tool, ASC–
16: Toxic Anterior Segment Syndrome,
beginning with the CY 2021 payment
determination.
4. Requirements for Claims-Based
Measure Data
We refer readers to the CY 2015
OPPS/ASC final rule with comment
117 We note that the ASC–11 measure is
voluntarily collected effective beginning with the
CY 2017 payment determination, as set forth in
section XIV.E.3.c. of the CY 2015 OPPS/ASC final
rule with comment period (79 FR 66984 through
66985).
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33701
period (79 FR 66985) and the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70536) for our previously
adopted policies regarding data
processing and collection periods for
claims-based measures for the CY 2018
payment determination and subsequent
years. In addition, in the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70536), we codified these
policies at 42 CFR 416.310(b). We are
not proposing any changes to these
requirements.
We note that one previously finalized
measure, ASC–12: Facility 7-Day RiskStandardized Hospital Visit Rate after
Outpatient Colonoscopy, will be
collected via claims for the CY 2020
payment determination and subsequent
years (79 FR 66970 through 66978). In
addition, in sections XIV.B.6.b. and c.,
respectively, of this proposed rule, we
are proposing to adopt two new claimsbased measures—ASC–17: Hospital
Visits after Orthopedic Ambulatory
Surgical Center Procedures, and ASC–
18: Hospital Visits after Urology
Ambulatory Surgical Center
Procedures—beginning with the CY
2022 payment determination.
5. Requirements for Data Submission for
ASC–15a-e: Outpatient and Ambulatory
Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS
CAHPS) Survey-Based Measures
We refer readers to the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79822 through 79824) for
our previously finalized policies
regarding survey administration and
vendor requirements for the CY 2020
payment determination and subsequent
years. In addition, we codified these
policies at 42 CFR 416.310(e). However,
in section XIV.B.4. of this proposed
rule, we are proposing to delay
implementation of the ASC–15a-e: OAS
CAHPS Survey-based measures
beginning with the CY 2020 payment
determination (CY 2018 data
submission) until further action in
future rulemaking and refer readers to
that section for more details.
As noted in the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79815), some commenters suggested
shortening sections of the survey, such
as the ‘‘About You’’ section. We
continue to evaluate the utility of
individual questions as we collect new
data from the survey’s voluntary
national implementation, and will
consider different options for shortening
the OAS CAHPS Survey without the
loss of important data in the future.
Specifically, we continue to consider
the removal of two demographic
questions—the ‘‘gender’’ and ‘‘age’’
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questions—from the OAS CAHPS
Survey in a future update.
6. Extraordinary Circumstances
Extensions or Exemptions for the CY
2019 Payment Determination and
Subsequent Years
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a. Background
We refer readers to the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53642
through 53643), the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75140 through 75141), the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79824 through 79825),
and 42 CFR 416.310(d) for the ASCQR
Program’s policies for extraordinary
circumstance extensions or exemptions
(ECE) requests.118
Many of our quality reporting and
value-based purchasing programs share
a common process for requesting an
exception from program reporting due
to an extraordinary circumstance not
within a provider’s control. We refer
readers to the Hospital IQR Program (76
FR 51615 through 51652, 78 FR 50836
through 50837, 79 FR 50277, 81 FR
57181 through 57182, and 42 CFR
412.140(c)(2)), the Hospital OQR
Program (77 FR 68489, 78 FR 75119
through 75120, 79 FR 66966, and 80 FR
70524), the IPFQR Program (77 FR
53659 through 53660 and 79 FR 45978),
and the PCHQR Program (78 FR 50848),
as well as the HAC Reduction Program
(80 FR 49542 through 49543) and the
Hospital Readmissions Reduction
Program (80 FR 49542 through 49543),
for program-specific information about
extraordinary circumstances exemption
requests.
In reviewing the policies for these
programs, we recognized that there are
five areas in which these programs have
variances regarding ECE requests. These
are: (1) Allowing the facilities or
hospitals to submit a form signed by the
facility’s or hospital’s CEO versus CEO
or designated personnel; (2) requiring
the form be submitted within 30 days
following the date that the extraordinary
circumstance occurred versus within 90
days following the date the
extraordinary circumstance occurred;
(3) inconsistency regarding specification
of a timeline for us to provide our
formal response notifying the facility or
hospital of our decision; (4)
inconsistency regarding specification of
our authority to grant ECEs due to CMS
data system issues; and (5) referring to
118 In the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66987), we stated that we
will refer to the process as the ‘‘Extraordinary
Circumstances Extensions or Exemptions’’ process
rather than the ‘‘Extraordinary Circumstances
Extensions or Waivers’’ process.
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the program as ‘‘extraordinary
extensions/exemptions’’ versus as
‘‘extraordinary circumstances
exceptions.’’ We believe addressing
these five areas, as appropriate, can
improve administrative efficiencies for
affected facilities or hospitals. We note
that, in the FY 2018 IPPS/LTCH PPS
proposed rule, we examined our
policies in these areas for the Hospital
Readmissions Reduction Program, the
HAC Reduction Program, the Hospital
IQR Program, the PCHQR Program and
the IPFQR Program (82 FR 19967,
19990, 20074 through 20075, 20085
through 20086 and 20128 through
20130, respectively) and proposed to
address differences in these areas for
those programs. In section XIII.D.8. of
this proposed rule, we are also
proposing revisions to our ECE policies
for the Hospital OQR Program.
With the exception of the terminology
used to describe these processes (item 5
above), the ASCQR Program is aligned
with other quality reporting programs.
As a result, in this proposed rule, we are
proposing to rename the process as the
extraordinary circumstances exceptions
(ECE) policy and make conforming
changes to 42 CFR 416.310(d).
b. ECE Policy Nomenclature
We have observed that while all
quality programs listed above have
developed similar policies to provide
exceptions from program requirements
to facilities that have experienced
extraordinary circumstances, such as
natural disasters, these programs refer to
these policies using inconsistent
terminology. Some programs refer to
these policies as ‘‘extraordinary
circumstances extensions/exemptions’’
while others refer to the set of policies
as ‘‘extraordinary circumstances
exceptions.’’ Several programs
(specifically, the Hospital VBP Program,
the HAC Reduction Program, and the
Hospital Readmissions Reduction
Program) are not able to grant
extensions to required data reporting
timelines due to their reliance on data
external to their program, and thus the
term, ‘‘extraordinary circumstances
extensions/exemptions’’ is not
applicable to all programs. However, all
of the described programs are able to
offer exceptions from their reporting
requirements. Therefore, in an effort to
align across CMS quality programs, we
are proposing to change the name of this
policy from ‘‘extraordinary
circumstances extensions or exemption’’
to ‘‘extraordinary circumstances
exceptions’’ for the ASCQR Program,
beginning January 1, 2018, and to revise
§ 416.310(d) of our regulations to reflect
this change.
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We are inviting public comment on
this proposal as discussed above.
c. Timeline for CMS Response to ECE
Requests
We also note that we believe it is
important for facilities to receive timely
feedback regarding the status of ECE
requests. We strive to complete our
review of each ECE request as quickly
as possible. However, we recognize that
the number of requests we receive, and
the complexity of the information
provided impacts the actual timeframe
to make ECE determinations. To
improve transparency of our process, we
believe it is appropriate to clarify that
we will strive to complete our review of
each request within 90 days of receipt.
7. ASCQR Program Reconsideration
Procedures
We refer readers to the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53643
through 53644), the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75141), the CY 2016 OPPS/ASC final
rule with comment period (80 FR
70537), and 42 CFR 416.330 for the
ASCQR Program’s reconsideration
policy. We are not proposing any
changes to this policy.
E. Payment Reduction for ASCs That
Fail To Meet the ASCQR Program
Requirements
1. Statutory Background
We refer readers to section XVI.D.1. of
the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68499) for a
detailed discussion of the statutory
background regarding payment
reductions for ASCs that fail to meet the
ASCQR Program requirements.
2. Reduction to the ASC Payment Rates
for ASCs That Fail To Meet the ASCQR
Program Requirements for a Payment
Determination Year
The national unadjusted payment
rates for many services paid under the
ASC payment system equal the product
of the ASC conversion factor and the
scaled relative payment weight for the
APC to which the service is assigned.
Currently, the ASC conversion factor is
equal to the conversion factor calculated
for the previous year updated by the
multifactor productivity (MFP)-adjusted
CPI–U update factor, which is the
adjustment set forth in section
1833(i)(2)(D)(v) of the Act. The MFPadjusted CPI–U update factor is the
Consumer Price Index for all urban
consumers (CPI–U), which currently is
the annual update for the ASC payment
system, minus the MFP adjustment. As
discussed in the CY 2011 MPFS final
rule with comment period (75 FR
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73397), if the CPI–U is a negative
number, the CPI–U would be held to
zero. Under the ASCQR Program in
accordance with section 1833(i)(7)(A) of
the Act and as discussed in the CY 2013
OPPS/ASC final rule with comment
period (77 FR 68499), any annual
increase shall be reduced by 2.0
percentage points for ASCs that fail to
meet the reporting requirements of the
ASCQR Program. This reduction
applied beginning with the CY 2014
payment rates (77 FR 68500). For a
complete discussion of the calculation
of the ASC conversion factor, we refer
readers to section XII.G. of this
proposed rule.
In the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68499
through 68500), in order to implement
the requirement to reduce the annual
update for ASCs that fail to meet the
ASCQR Program requirements, we
finalized our proposal that we would
calculate two conversion factors: A full
update conversion factor and an ASCQR
Program reduced update conversion
factor. We finalized our proposal to
calculate the reduced national
unadjusted payment rates using the
ASCQR Program reduced update
conversion factor that would apply to
ASCs that fail to meet their quality
reporting requirements for that calendar
year payment determination. We
finalized our proposal that application
of the 2.0 percentage point reduction to
the annual update may result in the
update to the ASC payment system
being less than zero prior to the
application of the MFP adjustment.
The ASC conversion factor is used to
calculate the ASC payment rate for
services with the following payment
indicators (listed in Addenda AA and
BB to the proposed rule, which are
available via the Internet on the CMS
Web site): ‘‘A2’’, ‘‘G2’’, ‘‘P2’’, ‘‘R2’’, and
‘‘Z2’’, as well as the service portion of
device-intensive procedures identified
by ‘‘J8’’ (77 FR 68500). We finalized our
proposal that payment for all services
assigned the payment indicators listed
above would be subject to the reduction
of the national unadjusted payment
rates for applicable ASCs using the
ASCQR Program reduced update
conversion factor (77 FR 68500).
The conversion factor is not used to
calculate the ASC payment rates for
separately payable services that are
assigned status indicators other than
payment indicators ‘‘A2’’, ‘‘G2’’, ‘‘J8’’,
‘‘P2’’, ‘‘R2’’, and ‘‘Z2.’’ These services
include separately payable drugs and
biologicals, pass-through devices that
are contractor-priced, brachytherapy
sources that are paid based on the OPPS
payment rates, and certain office-based
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procedures, certain radiology services
and diagnostic tests where payment is
based on the MPFS nonfacility PE RVUbased amount, and a few other specific
services that receive cost-based payment
(77 FR 68500). As a result, we also
finalized our proposal that the ASC
payment rates for these services would
not be reduced for failure to meet the
ASCQR Program requirements because
the payment rates for these services are
not calculated using the ASC conversion
factor and, therefore, not affected by
reductions to the annual update (77 FR
68500).
Office-based surgical procedures
(performed more than 50 percent of the
time in physicians’ offices) and
separately paid radiology services
(excluding covered ancillary radiology
services involving certain nuclear
medicine procedures or involving the
use of contrast agents) are paid at the
lesser of the MPFS nonfacility PE RVUbased amounts or the amount calculated
under the standard ASC ratesetting
methodology. Similarly, in section
XII.D.2.b. of the CY 2015 OPPS/ASC
final rule with comment period (79 FR
66933 through 66934), we finalized our
proposal that payment for the new
category of covered ancillary services
(that is, certain diagnostic test codes
within the medical range of CPT codes
for which separate payment is allowed
under the OPPS and when they are
integral to covered ASC surgical
procedures) will be at the lower of the
MPFS nonfacility PE RVU-based (or
technical component) amount or the
rate calculated according to the standard
ASC ratesetting methodology. In the CY
2013 OPPS/ASC final rule with
comment period (77 FR 68500), we
finalized our proposal that the standard
ASC ratesetting methodology for this
type of comparison would use the ASC
conversion factor that has been
calculated using the full ASC update
adjusted for productivity. This is
necessary so that the resulting ASC
payment indicator, based on the
comparison, assigned to these
procedures or services is consistent for
each HCPCS code, regardless of whether
payment is based on the full update
conversion factor or the reduced update
conversion factor.
For ASCs that receive the reduced
ASC payment for failure to meet the
ASCQR Program requirements, we
believe that it is both equitable and
appropriate that a reduction in the
payment for a service should result in
proportionately reduced coinsurance
liability for beneficiaries (77 FR 68500).
Therefore, in the CY 2013 OPPS/ASC
final rule with comment period (77 FR
68500), we finalized our proposal that
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the Medicare beneficiary’s national
unadjusted coinsurance for a service to
which a reduced national unadjusted
payment rate applies will be based on
the reduced national unadjusted
payment rate.
In that final rule with comment
period, we finalized our proposal that
all other applicable adjustments to the
ASC national unadjusted payment rates
would apply in those cases when the
annual update is reduced for ASCs that
fail to meet the requirements of the
ASCQR Program (77 FR 68500). For
example, the following standard
adjustments would apply to the reduced
national unadjusted payment rates: The
wage index adjustment; the multiple
procedure adjustment; the interrupted
procedure adjustment; and the
adjustment for devices furnished with
full or partial credit or without cost (77
FR 68500). We believe that these
adjustments continue to be equally
applicable to payment for ASCs that do
not meet the ASCQR Program
requirements (77 FR 68500).
In the CY 2015, CY 2016 and CY 2017
OPPS/ASC final rules with comment
period (79 FR 66981 through 66982; 80
FR 70537 through 70538; and 81 FR
79825 through 79826, respectively), we
did not make any other changes to these
policies.
We are not proposing any changes to
these policies for CY 2018.
XV. Request for Information and Public
Comments
A. Request for Information on CMS
Flexibilities and Efficiencies
CMS is committed to transforming the
health care delivery system—and the
Medicare program—by putting an
additional focus on patient-centered
care and working with providers,
physicians, and patients to improve
outcomes. We seek to reduce burdens
for hospitals, physicians, and patients,
improve the quality of care, decrease
costs, and ensure that patients and their
providers and physicians are making the
best health care choices possible. These
are the reasons we are including this
Request for Information in this proposed
rule.
As we work to maintain flexibility
and efficiency throughout the Medicare
program, we would like to start a
national conversation about
improvements that can be made to the
health care delivery system that reduce
unnecessary burdens for clinicians,
other providers, and patients and their
families. We aim to increase quality of
care, lower costs, improve program
integrity, and make the health care
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system more effective, simple, and
accessible.
We would like to take this
opportunity to invite the public to
submit their ideas for regulatory,
subregulatory, policy, practice, and
procedural changes to better accomplish
these goals. Ideas could include
payment system redesign, elimination
or streamlining of reporting, monitoring
and documentation requirements,
aligning Medicare requirements and
processes with those of Medicaid and
other payers, operational flexibility,
feedback mechanisms and data sharing
that would enhance patient care,
support of the physician-patient
relationship in care delivery, and
facilitation of individual preferences.
Responses to this Request for
Information could also include
recommendations regarding when and
how CMS issues regulations and
policies and how CMS can simplify
rules and policies for beneficiaries,
clinicians, physicians, providers, and
suppliers. Where practicable, data and
specific examples would be helpful. If
the proposals involve novel legal
questions, analysis regarding CMS’
authority is welcome for CMS’
consideration. We are particularly
interested in ideas for incentivizing
organizations and the full range of
relevant professionals and
paraprofessionals to provide screening,
assessment, and evidence-based
treatment for individuals with opioid
use disorder and other substance use
disorders, including payment
methodologies, care coordination,
systems and services integration, use of
paraprofessionals such as community
paramedics, and other strategies. We are
requesting commenters to provide clear
and concise proposals that include data
and specific examples that could be
implemented within the law.
We note that this is a Request for
Information only. Respondents are
encouraged to provide complete but
concise responses. This Request for
Information is issued solely for
information and planning purposes; it
does not constitute a Request for
Proposal (RFP), applications, proposal
abstracts, or quotations. This Request for
Information does not commit the U.S.
Government to contract for any supplies
or services or make a grant award.
Further, CMS is not seeking proposals
through this Request for Information
and will not accept unsolicited
proposals. Responders are advised that
the U.S. Government will not pay for
any information or administrative costs
incurred in response to this Request for
Information; all costs associated with
responding to this Request for
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Information will be solely at the
interested party’s expense. We note that
not responding to this Request for
Information does not preclude
participation in any future procurement,
if conducted. It is the responsibility of
the potential responders to monitor this
Request for Information announcement
for additional information pertaining to
this request. In addition, we note that
CMS will not respond to questions
about the policy issues raised in this
Request for Information. CMS will not
respond to comment submissions in
response to this Request for Information
in the CY 2018 OPPS/ASC final rule
with comment period. Rather, CMS will
actively consider all input as we
develop future regulatory proposals or
future subregulatory policy guidance.
CMS may or may not choose to contact
individual responders. Such
communications would be for the sole
purpose of clarifying statements in the
responders’ written responses.
Contractor support personnel may be
used to review responses to this Request
for Information. Responses to this
Request for Information are not offers
and cannot be accepted by the U.S.
Government to form a binding contract
or issue a grant. Information obtained as
a result of this Request for Information
may be used by the U.S. Government for
program planning on a nonattribution
basis. Respondents should not include
any information that might be
considered proprietary or confidential.
This Request for Information should not
be construed as a commitment or
authorization to incur cost for which
reimbursement would be required or
sought. All submissions become U.S.
Government property and will not be
returned. CMS may post on a Web site
for public use the public comments
received, or a summary of those public
comments, in response to this Request
for Information.
B. Eliminating Inappropriate Medicare
Payment Differentials for Similar
Services in the Inpatient and Outpatient
Settings
In the past, CMS has requested public
comment on potential payment policy
options to address the issue of payment
differentials between hospital services
provided in the inpatient and outpatient
settings. CMS has recognized that, even
when particular hospital inpatient
services and hospital outpatient services
are similar, Medicare payment
differentials may exist because different
statutory provisions and different
payment methodologies apply. CMS is
committed to eliminating inappropriate
Medicare payment differentials for
similar services in the inpatient and
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outpatient settings in order to execute
our responsibility to taxpayers to
prudently pay for high quality care. As
MedPAC has previously noted, ‘‘The
high profitability of one-day stays under
the inpatient prospective payment
system (IPPS) and the generally lower
payment rates for similar care under the
outpatient prospective payment system
(OPPS) have heightened concern about
the appropriateness of inpatient one-day
stays’’ (Medicare and the Health Care
Delivery System Report to Congress,
June 2015). Furthermore, we are
concerned that, to the extent Medicare
payment differentials exist (and may be
inappropriate), there is a corresponding
effect on financial liability of patients.
Our most recent solicitation for public
comments on these issues occurred in
the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70549). Since
that time, both hospitals and CMS have
had the opportunity to gain experience
under the various policy changes that
have occurred with respect to short
inpatient hospital stays. In this context,
we believe it is an appropriate time to
seek public comment again on
transparent ways to identify and
eliminate inappropriate payment
differentials for similar services
provided in the inpatient and outpatient
settings.
C. Request for Information Regarding
Physician-Owned Hospitals
We are seeking public comments on
the appropriate role of physician-owned
hospitals in the delivery system. We
would like to explore whether
physician-owned hospitals could play a
more prominent role in the delivery
system. In addition, we are seeking
public comments on the impact of the
current requirements of the physician
self-referral law regarding physicianowned hospitals. In particular, we are
interested in comments on the impact
on Medicare beneficiaries.
XVI. Files Available to the Public via
the Internet
The Addenda to the OPPS/ASC
proposed rules and the final rules with
comment period are published and
available only via the Internet on the
CMS Web site. To view the Addenda to
this proposed rule pertaining to
proposed CY 2018 payments under the
OPPS, we refer readers to the CMS Web
site at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/HospitalOutpatient-Regulations-andNotices.html; select ‘‘1678–P’’ from the
list of regulations. All OPPS Addenda to
this proposed rule are contained in the
zipped folder entitled ‘‘2018 OPPS
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1678–P Addenda’’ at the bottom of the
page. To view the Addenda to this
proposed rule pertaining to the
proposed CY 2018 payments under the
ASC payment system, we refer readers
to the CMS Web site at: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ASCPayment/ASCRegulations-and-Notices.html; select
‘‘1678–P’’ from the list of regulations.
All ASC Addenda to this proposed rule
are contained in the zipped folders
entitled ‘‘Addendum AA, BB, DD1,
DD2, and EE.’’
XVII. Collection of Information
Requirements
A. Statutory Requirement for
Solicitation of Comments
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
In this proposed rule, we are
soliciting public comment on each of
these issues for the following sections of
this document that contain information
collection requirements (ICRs).
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B. ICRs for the Hospital OQR Program
1. Background
The Hospital OQR Program is
generally aligned with the CMS quality
reporting program for hospital inpatient
services known as the Hospital IQR
Program (82 FR 20031 through 20075).
We refer readers to the CY 2011 through
CY 2017 OPPS/ASC final rules with
comment periods (75 FR 72111 through
72114; 76 FR 74549 through 74554; 77
FR 68527 through 68532; 78 FR 75170
through 75172; 79 FR 67012 through
67015; 80 FR 70580 through 70582; and
81 FR 79862 through 79863,
respectively) for detailed discussions of
Hospital OQR Program information
collection requirements we have
previously finalized. The information
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collection requirements associated with
the Hospital OQR Program are currently
approved under OMB control number
0938–1109.
In section XIII.B.4.c. of this proposed
rule, we are proposing to remove six
measures: (1) OP–21: Median Time to
Pain Management for Long Bone
Fracture beginning with the CY 2020
payment determination; (2) OP–26:
Hospital Outpatient Volume Data on
Selected Outpatient Surgical Procedures
beginning with the CY 2020 payment
determination; (3) OP–1: Median Time
to Fibrinolysis beginning with the CY
2021 payment determination; (4) OP–4:
Aspirin at Arrival beginning with the
CY 2021 payment determination; (5)
OP–20: Door to Diagnostic Evaluation
by a Qualified Medical Professional
beginning with the CY 2021 payment
determination; and (6) OP–25: Safe
Surgery Checklist beginning with the
CY 2021 payment determination. We
expect these proposals would reduce
the burden of reporting for the Hospital
OQR Program, as discussed below. We
note that we discuss only the changes in
burden resulting from the provisions in
this proposed rule.
In this proposed rule, we are
proposing to publicly report OP–18c
using data beginning with patient
encounters during the third quarter of
2017. We are also proposing to delay the
OP–37a–e: Outpatient and Ambulatory
Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS
CAHPS) Survey-based measures
beginning with the CY 2020 payment
determination (CY 2018 data collection
period) until further notice in future
rulemaking. In addition, in this
proposed rule, beginning with the CY
2020 payment determination, we are
proposing: (1) To codify at § 419.46(e)
our previously finalized process for
targeting hospitals for validation of
chart-abstracted measures; (2) to
formalize the educational review
process and use it to correct incorrect
validation results for chart-abstracted
measures; (3) to change the NOP
submission deadlines such that
hospitals are required to submit the
NOP any time prior to registering on the
QualityNet Web site and to make
conforming revisions at 42 CFR
419.46(a); (4) to align the first quarter for
which hospitals must submit data for all
hospitals that did not participate in the
previous year’s Hospital OQR Program,
and make corresponding revisions at 42
CFR 419.46(c)(3); and (5) to align the
naming of the Extraordinary
Circumstances Exceptions (ECE) policy
and make conforming changes to the
CFR. We do not believe that these
proposed changes would affect our
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burden estimates, as further discussed
below.
2. Proposed Change in Hourly Labor
Cost for Burden Calculation for the
Hospital OQR Program
In previous rules (80 FR 70581), we
estimated that a hospital pays an
individual approximately $30 per hour
to abstract and submit clinical data. In
this proposed rule, we are proposing to
estimate that reporting data for the
Hospital OQR Program can be
accomplished by staff with a median
hourly wage of $18.29 per hour.119 This
labor rate is based on the Bureau of
Labor Statistics (BLS) median hourly
wage for a Medical Records and Health
Information Technician. The BLS is the
principal Federal agency responsible for
measuring labor market activity,
working conditions, and price changes
in the economy.120 Acting as an
independent agency, the BLS provides
objective information for not only the
government, but also for the public.121
The BLS describes Medical Records and
Health Information Technicians as those
responsible for processing and
maintaining health information data.122
Therefore, we believe is reasonable to
assume that these individuals would be
tasked with abstracting clinical data for
the Hospital OQR Program measures.
We also are proposing to calculate the
cost of overhead, including fringe
benefits, at 100 percent of the mean
hourly wage. This is necessarily a rough
adjustment, both because fringe benefits
and overhead costs vary significantly
from employer to employer and because
methods of estimating these costs vary
widely from study to study.
Nonetheless, we believe that doubling
the hourly wage rate ($18.29 × 2 =
$36.58) to estimate total cost is a
reasonably accurate estimation method.
Accordingly, we calculate cost burden
to hospitals using a wage plus benefits
estimate of $36.58 throughout the
discussion below for the Hospital OQR
Program.
We are inviting public comment on
these proposals.
119 BLS Occupational Employment Statistics; May
2016. Retrieved from: https://www.bls.gov/oes/
current/oes292071.htm.
120 https://www.bls.gov/bls/infohome.htm.
121 https://www.bls.gov/bls/infohome.htm.
122 BLS Occupational Employment Statistics; May
2016. Retrieved from: https://www.bls.gov/oes/
current/oes292071.htm.
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3. Estimated Burden Due to Proposal To
Delay OP–37a-e: Outpatient and
Ambulatory Surgery Consumer
Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based
Measures Beginning With the CY 2020
Payment Determination
As described in section XIII.B.5. of
this proposed rule, we are proposing to
delay OP–37a–e: Outpatient and
Ambulatory Surgery Consumer
Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-based
measures beginning with the CY 2020
payment determination (CY 2018 data
collection period). We recognize that
delaying mandatory implementation of
the survey-based measures will reduce
the number of HOPDs administering the
OAS CAHPS Survey in CY 2018 and
future years. Implementation of the
survey-based measures would have
made survey administration mandatory
for all eligible HOPDs participating in
the program. Delaying implementation
of the survey-based measures also
delays the requirement that HOPDs
must administer the survey to eligible
patients and we therefore expect fewer
HOPDs to administer the survey. Given
the proposed delay in mandatory
implementation of the OAS CAHPS
Survey, there is a corresponding
reduction in burden for HOPDs. As
stated in the CY 2017 OPPS/ASC final
rule with comment period (81 FR
79863), the information collection
requirements associated with the five
OAS CAHPS Survey-based measures
(OP–37a, OP–37b, OP–37c, OP–37d, and
OP–37e) are currently approved under
OMB Control Number 0938–1240. This
PRA package assumes 4,006 HOPDs
would administer the OAS CAHPS
Survey. The estimated average burden
per HOPD as captured in this PRA
package is $6,070 annually and includes
patient/respondent burden, time for
preparing patient records to send to a
survey vendor, and contracting with a
survey vendor. Consistent with the
voluntary national implementation of
the OAS CAHPS Survey that began in
2016, however, we anticipate that not
all HOPDs will voluntarily administer
the survey.123 For this reason, we
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123 Currently,
1,124 HOPDs have selected a
vendor to conduct the survey on their behalf as part
of a national voluntary implementation of the OAS
CAHPS Survey, for a total estimated burden of
voluntary survey administration of $6,822,680
(1,124 HOPDs × $6,070 per HOPD). If the survey
were to become part of the Hospital OQR Program
as mandatory, we estimate approximately 3,228
HOPDs that meet eligibility requirements for the
Hospital OQR Program would begin administering
the survey and reporting data to CMS under OMB
Control Number 0938–1240. We assume HOPDs
voluntarily administering the survey will continue
to do so even if implementation of the survey-based
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anticipate that each HOPD participating
in the Hospital OQR Program that
chooses not to voluntarily administer
the OAS CAHPS Survey under the
voluntary national implementation in
CY 2018 and future years would
experience an anticipated burden
reduction of approximately $6,070 as a
result of this proposal. However, as
noted above, this burden reduction is
included under OMB Control Number
0938–1240 and is not included in our
burden estimates for the Hospital OQR
Program.
4. Estimated Burden Due to Proposal to
Publicly Report OP–18c: Median Time
From Emergency Department Arrival to
Emergency Department Departure for
Discharged Emergency Department
Patients- Psychiatric/Mental Health
Patients
In section XIII.B.10.b. of this proposed
rule we are proposing to publicly report
18c: Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department PatientsPsychiatric/Mental Health Patients
beginning with patient encounters from
the third quarter of 2017. As noted in
that section, the data required for public
reporting of OP–18c is already collected
as part of the existing Hospital OQR
Program requirements. Accordingly, we
do not expect this proposal to affect
burden.
5. Estimated Burden Due to Proposals
for the CY 2020 Payment Determination
and Subsequent Years
a. Burden Due to Proposed Measure
Removals
In section XIII.B.4.c.(1) and (2) of this
proposed rule, we are proposing,
beginning with the CY 2020 payment
determination, to remove one chartabstracted measure (OP–21: Median
Time to Pain Management for Long
Bone Fracture) and one web-based
measure (OP–26: Hospital Outpatient
Volume Data on Selected Outpatient
Surgical Procedures). In total, we expect
these proposals would reduce burden by
152,680 hours and $5.6 million for the
measures is delayed for the Hospital OQR Program;
therefore, we anticipate that approximately 2,104
HOPDs (3,228 eligible HOPDs—1,124 HOPDs
voluntarily reporting under the voluntary national
implementation) that would have administered the
survey as a mandatory requirement of the Hospital
OQR Program will not do so for CY 2018 and future
years if the survey-based measures are delayed.
This results in an estimated aggregate burden
reduction of $12,771,280 (2,104 HOPDs × $6,070
per HOPD) across all HOPDs meeting eligibility
requirements for the Hospital OQR Program. As
noted above, this burden reduction is included
under OMB Control Number 0938–1240 and is not
included in our burden estimates for the Hospital
OQR Program.
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CY 2020 payment determination. These
estimates are described in detail below.
We calculated the burden reduction
associated with the proposed removal of
OP–21: Median Time to Pain
Management for Long Bone Fracture by
considering the time per case to report
chart-abstracted measures, which are
submitted using a web-based tool, as
well as the number of cases per hospital
and the number of participating
hospitals. In the CY 2016 OPPS/ASC
final rule with comment period (80 FR
70582), we estimated the burden to
collect chart-abstracted data for a single
web-based measure, including OP–21,
to be 2.92 minutes. In this proposed
rule, we estimate that 3,300 Hospital
Outpatient Departments (HOPDs) report
data under the Hospital OQR Program.
Based on the most recent data from CY
2015 reporting, we also estimate that
947 cases are reported per hospital for
each chart-abstracted measure.
Accordingly, we estimate a total burden
reduction of 46.1 hours per HOPD due
to the removal of one chart-abstracted
measure (2.92 minutes per measure/60
minutes per hour × 1 measure × 947
cases per hospital). In total, across 3,300
HOPDs, we estimate a burden reduction
of 152,130 hours (46.1 hours per
hospital × 3,300 hospitals) and
$5,564,915 (152,130 total hours × $36.58
per hour) for the CY 2020 payment
determination due to the proposed
removal of OP–21: Median Time to Pain
Management for Long Bone Fracture.
We calculated the burden reduction
associated with the proposed removal of
OP–26: Hospital Outpatient Volume
Data on Selected Outpatient Surgical
Procedures by considering the time per
measure to report web-based measures
as well as the number of participating
hospitals. As previously stated in the
CY 2016 OPPS/ASC final rule with
comment period (80 FR 70582), we
estimate that hospitals spend
approximately 10 minutes per measure
to report web-based measures and that
3,300 HOPDs report data under the
Hospital OQR Program. Accordingly, for
the CY 2020 payment determination, we
estimate a total burden reduction of 550
hours across 3,300 HOPDs due to the
removal of one web-based measure (10
minutes per measure/60 minutes per
hour × 1 measure × 3,300 hospitals). We
further estimate a cost reduction of
$20,119 due to this proposal (550 total
hours × $36.58 per hour).
In total, we expect these proposals
would reduce burden by 152,680 hours
(152,130 + 550) and $5,585,034
($5,564,915 + $20,119) for the CY 2020
payment determination.
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b. Burden Due to Updates to Previously
Finalized Chart-Abstracted Measure
Validation Procedures and the
Educational Review Process
We previously estimated the burden
associated with validation of chartabstracted measures in the CY 2013 and
CY 2014 OPPS/ASC final rules with
comment period (77 FR 68531 and 78
FR 75172, respectively). In section
XIII.D.7.a. of this proposed rule, we are
providing clarification on our
procedures for validation of chartabstracted measures to note that the 50
poorest performing outlier hospitals will
be targeted for validation. We do not
expect this clarification to influence
burden because it does not alter the
number of hospitals selected for
validation or the requirements for those
hospitals that are selected.
In addition, in section XIII.D.7.c. of
this proposed rule, we are proposing to
formalize the process of allowing
hospitals to use an educational review
process to correct incorrect validation
results for the first three quarters of
validation for chart-abstracted measures.
We are also proposing to update the
process to specify that if the results of
an educational review indicate that we
incorrectly scored a hospital’s medical
records selected for validation, the
corrected quarterly validation score
would be used to compute the hospital’s
final validation score at the end of the
calendar year. Under this proposal, the
educational review request process
remains the same for the CY 2020
payment determination and subsequent
years, except that revised scores
identified through an educational
review would be used to correct a
hospital’s validation score. As stated in
the CY 2014 OPPS/ASC final rule (78
FR 75171), we believe there is a burden
associated with successful participation
in the Hospital OQR Program, where
successful participation results in a full
annual payment update (APU) for a
particular payment determination. This
burden would include, but would not be
limited to, maintaining familiarity with
the Hospital OQR Program
requirements, which includes checking
feedback reports to indicate a facility’s
current status or performance. The
overall administrative burden, which
we believe includes the educational
review process, is estimated at 42 hours
per hospital and has previously been
calculated (78 FR 75171). This burden
would not be changed by the proposal
to use revised scores identified through
an educational review to correct a
hospital’s validation score.
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c. Burden Due to Proposed Update to
NOP Submission Deadline
We previously estimated the burden
associated with Hospital OQR Program
participation and requirements in the
CY 2014 OPPS/ASC final rule with
comment period (78 FR 75171). In
section XIII.C.2. of this proposed rule,
we are proposing to revise the NOP
submission deadlines such that
hospitals are required to submit the
NOP any time prior to registering on the
QualityNet Web site. While we expect
this proposal to make it generally easier
for hospitals to comply with the
Hospital OQR Program requirements by
extending the NOP deadline, we
anticipate a negligible effect on the time
and cost of completing the participation
requirements. As a result, the proposal
to revise the NOP submission deadline
would not impact our burden estimates.
d. Burden Due to Proposal To Align the
First Quarter for Which Hospitals Must
Submit Data for All Hospitals That Did
Not Participate in the Previous Year’s
Hospital OQR Program
In section XIII.D.1 of this proposed
rule, we are proposing to align the
timeline specifying the initial quarter
for which hospitals must submit data for
all hospitals that did not participate in
the previous year’s Hospital OQR
Program, rather than specifying different
timelines for hospitals with Medicare
acceptance dates before versus after
January 1 of the year prior to an affected
annual payment update. Although this
proposal alters the timeline for hospitals
to begin submitting data for the Hospital
OQR Program, it does not alter program
requirements. As a result, we do not
anticipate that this proposal will
influence burden.
e. Burden Due to Proposed Updates to
the Previously Finalized ECE Policy
We previously estimated the burden
associated with general and
administrative Hospital OQR Program
requirements in the CY 2014 OPPS/ASC
final rule with comment period (78 FR
75171). In section XIII.D.8. of this
proposed rule, we discuss our intent to
align the naming of this exception
policy and to update 42 CFR 419.46(d)
to reflect our current ECE policies. We
are also clarifying the timing of our
response to ECE requests. Because we
are not seeking any new or additional
information in our ECE proposals, we
believe the updates would have no
effect on burden for hospitals.
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6. Estimated Burden Due to Proposals
for the CY 2021 Payment Determination
and Subsequent Years
In section XIII.B.4.c.(3) through (6) of
this proposed rule, we are proposing to
remove four measures beginning with
the CY 2021 payment determination:
three chart-abstracted measures (OP–1:
Median Time to Fibrinolysis, OP–4:
Aspirin at Arrival, and OP–20: Door to
Diagnostic Evaluation by a Qualified
Medical Professional); and one webbased measure (OP–25: Safe Surgery
Checklist Use). In total, we expect the
removal of these measures would
reduce burden by 304,810 hours and
$11.1 million for the CY 2021 payment
determination, as described below.
We calculated the burden reduction
associated with the removal of chartabstracted measures by considering the
time per case to report chart-abstracted
measures, as well as the number of cases
per hospital and the number of
participating hospitals. As previously
stated in the CY 2016 OPPS/ASC final
rule with comment period (80 FR
70582), we estimate that hospitals spend
approximately 2.92 minutes per case per
chart-abstracted measure and that 3,300
HOPDs report data under the Hospital
OQR program. In addition, based on the
most recently available data from CY
2015 reporting, we estimate that 947
cases are reported per hospital for each
chart-abstracted measures. We note that
although OP–1: Median Time to
Fibrinolysis is a chart-abstracted
measure, we do not expect removing
this measure would reduce burden, as
the data collected for this measure is
required to calculate another program
measure in the AMI measure set (OP–2:
Fibrinolytic Therapy Received Within
30 Minutes of ED Arrival) and will,
therefore, continue to be collected as an
underlying part of OP–2 even if the
proposal to remove OP–1 is finalized as
proposed. Accordingly, there is no
change in burden associated with the
proposed removal of this measure
included in our calculations below.
We estimate a total burden reduction
of 92.2 hours per HOPD due to the
removal of OP–4: Aspirin at Arrival and
OP–20: Door to Diagnostic Evaluation
by a Qualified Medical Professional
(2.92 minutes per measure/60 minutes
per hour × 2 measures × 947 cases per
hospital). In total, across 3,300 HOPDs
we estimate a burden reduction of
304,260 hours (92.2 hours per hospital
× 3,300 hospitals) and $11,129,831
(304,260 total hours × $36.58 per hour)
for the CY 2021 payment determination
due to the proposed removal of OP–4:
Aspirin at Arrival and OP–20: Door to
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Diagnostic Evaluation by a Qualified
Medical Professional.
We calculated the burden reduction
associated with the removal of OP–25:
Safe Surgery Checklist Use by
considering the time per measure to
report web-based measures as well as
the number of participating hospitals.
As previously stated in the CY 2016
OPPS/ASC final rule with comment
period (80 FR 70582), we estimate that
hospitals spend approximately 10
minutes per measure to report webbased measures and that 3,300 HOPDs
report data under the Hospital OQR
program. Accordingly, for the CY 2021
payment determination, we estimate a
total burden reduction of 550 hours
across 3,300 HOPDs due to the removal
of one web-based measure (10 minutes
per measure/60 minutes per hour × 1
measure × 3,300 hospitals). We further
estimate a cost reduction of $20,119 due
to this proposal (550 total hours ×
$36.58 per hour).
In total, we expect these proposals
would reduce burden by 304,810 hours
(304,260 + 550) and $11,149,950
($11,129,831 + $20,119) for the CY 2021
payment determination for the Hospital
OQR Program.
We are inviting public comment on
the burden associated with these
information collection requirements.
C. ICRs for the ASCQR Program
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1. Background
We refer readers to the CY 2012
OPPS/ASC final rule with comment
period (76 FR 74554), the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53672), and
the CY 2013, CY 2014, CY 2015, CY
2016, and CY 2017 OPPS/ASC final
rules with comment periods (77 FR
68532 through 68533; 78 FR 75172
through 75174; 79 FR 67015 through
67016; 80 FR 70582 through 70584; and
81 FR 79863 through 79865,
respectively) for detailed discussions of
the ASCQR Program information
collection requirements we have
previously finalized. The information
collection requirements associated with
the ASCQR Program are currently
approved under OMB control number
0938–1270. Below we discuss only the
changes in burden that would result
from the provisions in this proposed
rule.
In section XIV.B.3.b. of this proposed
rule, we are proposing, beginning with
the CY 2019 payment determination, to
remove three measures (ASC–5:
Prophylactic Intravenous (IV) Antibiotic
Timing, ASC–6: Safe Surgery Checklist
Use, and ASC–7: Ambulatory Surgical
Center Facility Volume Data on Selected
Ambulatory Surgical Center Surgical
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Procedures) from the ASCQR Program
measure set. In section XIV.B.6.a. of this
proposed rule, we are proposing,
beginning with the CY 2021 payment
determination, to adopt one new
measure, ASC–16: Toxic Anterior
Segment Syndrome. In section
XIV.B.6.b. and c. of this proposed rule,
we are proposing, beginning with the
CY 2022 payment determination, to
adopt two new measures collected via
claims (ASC–17: Hospital Visits after
Orthopedic Ambulatory Surgical Center
Procedures and ASC–18: Hospital Visits
after Urology Ambulatory Surgical
Center Procedures). We expect these
proposals would reduce the overall
burden of reporting data for the ASCQR
Program, as discussed below.
In this proposed rule, we are also
proposing: (1) To delay ASC–15a–e:
OAS CAHPS survey-based measures
beginning with the CY 2020 payment
determination (CY 2018 data collection);
(2) to expand the CMS online tool to
also allow for batch submission
beginning with data submitted during
CY 2018 and to make corresponding
revisions to the CFR; and, (3) to align
the naming of the Extraordinary
Circumstances Exceptions (ECE) policy
beginning with CY 2018 and to make
conforming changes to the CFR. As
discussed below, we do not expect these
proposals to influence our burden
estimates.
2. Proposed Change in Hourly Labor
Cost for Burden Calculation for the
ASCQR Program
To better align this program with our
other quality reporting and value-based
purchasing programs, we are proposing
to update our burden calculation
methodology to standardize elements
within our burden calculation.
Specifically, we are proposing to utilize
an updated standard hourly labor cost
for data reporting activities.
In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79863
through 79864), we finalized our
proposal to use the hourly labor cost of
$32.84 (hourly wage plus fringe and
overhead, discussed in more detail
below) in estimating the labor costs
associated with abstracting clinical data.
This labor rate was based on the Bureau
of Labor Statistics (BLS) median hourly
wage for a Medical Records and Health
Information Technician of $16.42 per
hour.124 The BLS is the principal
Federal agency responsible for
measuring labor market activity,
working conditions, and price changes
124 https://www.bls.gov/ooh/healthcare/medicalrecords-and-health-information-technicians.htm.
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in the economy.125 Acting as an
independent agency, the BLS provides
objective information for not only the
government, but also for the public.126
The BLS describes Medical Records and
Health Information Technicians as those
responsible for processing and
maintaining health information data.127
Therefore, we believe is reasonable to
assume that these individuals would be
tasked with abstracting clinical data for
ASCQR Program measures.
The BLS recently released updated
wage estimates for Medical Records and
Health Information Technicians. These
updates increased the median hourly
wage from $16.42 per hour to $18.29 per
hour.128 Applying the same 100 percent
overhead cost estimate finalized in the
CY 2017 OPPS/ASC final rule with
comment period (81 FR 79863 through
79864) to estimate the elements
assigned as ‘‘indirect’’ or ‘‘overhead’’
costs, we estimate an updated total
hourly labor cost of $36.58. Therefore,
we are proposing to apply an updated
hourly labor cost of $36.58 ($18.29 base
salary + $18.29 fringe and overhead) to
our burden calculations for chart
abstraction.
We are inviting public comment on
this proposal.
3. Estimated Burden of ASCQR Program
Proposals Beginning With CY 2018
In section XIV.B.4. of this proposed
rule we are proposing to delay ASC–
15a–e: OAS CAHPS Survey-based
measures beginning with the CY 2020
payment determination (CY 2018 data
collection) until further notice in future
rulemaking. We recognize that delaying
mandatory implementation of the
survey-based measures will reduce the
number of ASCs administering the OAS
CAHPS Survey in CY 2018 and future
years. Implementation of the surveybased measures would have made
survey administration mandatory for all
eligible ASCs participating in the
program. Delaying implementation of
the survey-based measures also delays
the requirement that ASCs must
administer the survey to eligible
patients and we therefore expect fewer
ASCs to administer the survey. Given
the proposed delay in mandatory
implementation of the OAS CAHPS
Survey, there is a corresponding
reduction in burden for ASCs. As
described in the CY 2017 OPPS/ASC
final rule with comment period (81 FR
125 https://www.bls.gov/bls/infohome.htm.
126 https://www.bls.gov/bls/infohome.htm.
127 BLS Occupational Employment Statistics; May
2016. Retrieved from: https://www.bls.gov/oes/
current/oes292071.htm.
128 https://www.bls.gov/ooh/healthcare/medicalrecords-and-health-information-technicians.htm.
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79864), the information collection
requirements associated with the five
OAS CAHPS Survey based measures
(ASC–15a, ASC–15b, ASC–15c, ASC–
15d, and ASC–15e) are currently
approved under OMB Control Number
0938–1240. This PRA package assumes
5,357 ASCs, or roughly all ASCs paid
under the ASC payment system, would
administer the OAS CAHPS Survey. The
estimated average burden per ASC as
captured in this PRA package is $6,070
annually and includes patient/
respondent burden, time for preparing
patient records to send to a survey
vendor, and contracting with a survey
vendor. Consistent with the voluntary
national implementation of the OAS
CAHPS Survey that began in 2016,
however, we anticipate that not all
ASCs will voluntarily administer the
survey.129 For this reason, we anticipate
that each ASC participating in the
ASCQR Program that chooses not to
voluntarily administer the OAS CAHPS
Survey under the voluntary national
implementation in CY 2018 and future
years would experience an anticipated
burden reduction of approximately
$6,070 as a result of this proposal.
However, as noted above, this burden
reduction is included under OMB
Control Number 0938–1240 and is not
included in our burden estimates for the
ASCQR Program.
In section XIV.D.3. of this proposed
rule, we are proposing to expand the
CMS online tool to also allow for batch
submission beginning with data
submitted during the CY 2018 reporting
period and to make corresponding
revisions to the CFR. We expect this
proposal to increase the efficiency of
data submission via the CMS online
129 Currently, 719 ASCs have selected a vendor to
conduct the survey on their behalf as part of a
national voluntary implementation of the OAS
CAHPS Survey, for a total estimated burden of
voluntary survey administration of $4,364,330 (719
ASCs × $6,070 per ASC). If the survey were to
become part of the ASCQR Program as mandatory,
we estimate approximately 3,937 ASCs that meet
eligibility requirements for the ASCQR Program
would begin administering the survey and reporting
data to CMS under OMB Control Number 0938–
1240. We assume ASCs voluntarily administering
the survey will continue to do so even if
implementation of the survey-based measures is
delayed for the ASCQR Program; therefore, we
anticipate that approximately 3,218 ASCs (3,937
eligible ASCs—719 ASCs voluntarily reporting
under the voluntary national implementation) that
would have administered the survey as a mandatory
requirement of the ASCQR Program will not do so
for CY 2018 and future years if the survey-based
measures are delayed. This results in an estimated
aggregate burden reduction of $19,533,260 (3,218
ASCs × $6,070 per ASC) across all ASCs meeting
eligibility requirements for the ASCQR Program. As
noted above, this burden reduction is included
under OMB Control Number 0938–1240 and is not
included in our burden estimates for the ASCQR
Program.
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tool. However, the proposal does not
change our data reporting requirements,
and therefore, we do not expect a
change in the burden experienced by
ASCs.
In section XIV.D.6. of this proposed
rule, we are proposing to align the
naming of the Extraordinary
Circumstances Exceptions (ECE) policy
beginning with CY 2018 and to make
conforming changes to the CFR. We are
also clarifying the timing of our
response to ECE requests. Because we
are not seeking any new or additional
information in our ECE proposals, we
believe the updates would have no
effect on burden for hospitals.
4. Estimated Burden of ASCQR Program
Proposals for the CY 2019 Payment
Determination
In section XIV.B.3.b. of this proposed
rule, we are proposing, beginning with
the CY 2019 payment determination, to
remove three measures from the ASCQR
Program. These measures include one
claims-based measure (ASC–5:
Prophylactic Intravenous (IV) Antibiotic
Timing) and two collected via a CMS
online data submission tool (ASC–6:
Safe Surgery Checklist Use and ASC–7:
Ambulatory Surgical Center Facility
Volume Data on Selected Ambulatory
Surgical Center Surgical Procedures).
Data for ASC–5 is submitted via CMS
claims using Quality Data Codes, which
impose only a nominal burden on
providers because these claims are
already submitted for the purposes of
payment. Therefore, we estimate a
nominal reduction in burden associated
with our proposal to remove the ASC–
5 measure from the ASCQR Program
measure set beginning with the CY 2019
payment determination.
We believe 3,937 ASCs would
experience a reduction in burden
associated with our proposals to remove
ASC–6 and ASC–7 from the ASCQR
Program measure set. In the CY 2014
OPPS/ASC final rule with comment
period (78 FR 75173), we finalized our
estimates that each participating ASC
would spend 10 minutes per measure
per year to collect and submit the
required data for the ASC–6 and ASC–
7 measures, making the total estimated
annual burden associated with each of
these measures 657 hours (3,937 ASCs
× 0.167 hours per ASC) and $24,033
(657 hours × $36.58 per hour).
Therefore, we estimate a total reduction
in burden of 1,314 (657 hours × 2
measures) hours and $48,066 (1,314
hours × $36.58 per hour) for all ASCs as
a result of our proposals to remove
ASC–6 and ASC–7 from the ASCQR
Program measure set. The reduction in
burden associated with these
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33709
requirements is available for review and
comment under OMB Control Number
0938–1270.
5. Estimated Burden of ASCQR Program
Proposals for the CY 2021 Payment
Determination
In section XIV.B.6.a. of this proposed
rule, we are proposing, beginning with
the CY 2021 payment determination, to
adopt one new measure collected via a
CMS online data submission tool, ASC–
16: Toxic Anterior Segment Syndrome.
We believe 3,937 ASCs would incur a
burden associated with abstracting
numerators, denominators, and
exclusions for the proposed ASC–16
measure collected and reported via a
CMS online data submission tool. In
addition, we estimate that each ASC
reporting data for this measure would
report data on approximately one case
per year, and would spend 15 minutes
(0.25 hours) per case to collect and
submit this data. Therefore, we estimate
a total burden for all reporting ASCs
with a single case per ASC of 984 hours
(3,937 ASCs × 1 case per ASC × 0.25
hours per case) and $36,004 (984 hours
× $36.58 per hour). The additional
burden associated with these
requirements is available for review and
comment under OMB Control Number
0938–1270.
6. Estimated Burden of ASCQR Program
Proposals for the CY 2022 Payment
Determination
In section XIV.B.6.b. and c. of this this
proposed rule, we are proposing,
beginning with the CY 2022 payment
determination, to adopt two measures
collected via claims: (1) ASC–17:
Hospital Visits after Orthopedic
Ambulatory Surgical Center Procedures;
and (2) ASC–18: Hospital Visits after
Urology Ambulatory Surgical Center
Procedures. Data used to calculate
scores for these measures is collected
via Part A and Part B Medicare
administrative claims and Medicare
enrollment data, and therefore does not
require ASCs to report any additional
data. Because these measures do not
require ASCs to submit any additional
data, we do not believe there would be
any additional burden associated with
these proposals.
We are inviting public comment on
the burden associated with these
information collection requirements.
If you comment on these information
collection and recordkeeping
requirements, please do either of the
following:
1. Submit your comments
electronically as specified in the
ADDRESSES section of this proposed rule;
or
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2. Submit your comments to the
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Attention: CMS Desk Officer,
CMS–1678–P, Fax: (202) 395–6974; or,
Email: OIRA_submission@omb.eop.gov.
XVIII. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this proposed rule, and, when we
proceed with a subsequent document(s),
we will respond to those comments in
the preamble to that document.
XIX. Economic Analyses
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A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this
proposed rule, as required by Executive
Order 12866 on Regulatory Planning
and Review (September 30, 1993),
Executive Order 13563 on Improving
Regulation and Regulatory Review
(January 18, 2011), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of
1995 (UMRA) (March 22, 1995, Pub. L.
104–4), Executive Order 13132 on
Federalism (August 4, 1999), the
Contract with America Advancement
Act of 1996 (Pub. L. 104–121) (5 U.S.C.
804(2)), and Executive Order 13771 on
Reducing Regulation and Controlling
Regulatory Costs (January 30, 2017).
This section of the proposed rule
contains the impact and other economic
analyses for the provisions that we are
proposing for CY 2018.
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This
proposed rule has been designated as an
economically significant rule under
section 3(f)(1) of Executive Order 12866
and a major rule under the Contract
with America Advancement Act of 1996
(Pub. L. 104–121). Accordingly, this
proposed rule has been reviewed by the
Office of Management and Budget. We
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have prepared a regulatory impact
analysis that, to the best of our ability,
presents the costs and benefits of this
proposed rule. We are soliciting public
comments on the regulatory impact
analysis in this proposed rule, and we
will address any public comments we
receive in the final rule with comment
period as appropriate.
2. Statement of Need
This proposed rule is necessary to
make updates to the Medicare hospital
OPPS rates. It is necessary to make
proposed changes to the payment
policies and rates for outpatient services
furnished by hospitals and CMHCs in
CY 2018. We are required under section
1833(t)(3)(C)(ii) of the Act to update
annually the OPPS conversion factor
used to determine the payment rates for
APCs. We also are required under
section 1833(t)(9)(A) of the Act to
review, not less often than annually,
and revise the groups, the relative
payment weights, and the wage and
other adjustments described in section
1833(t)(2) of the Act. We must review
the clinical integrity of payment groups
and relative payment weights at least
annually. We are proposing to revise the
APC relative payment weights using
claims data for services furnished on
and after January 1, 2016, through and
including December 31, 2016, and
processed through December 31, 2016,
and updated cost report information.
This proposed rule also is necessary
to make updates to the ASC payment
rates for CY 2018, enabling CMS to
make changes to payment policies and
payment rates for covered surgical
procedures and covered ancillary
services that are performed in an ASC
in CY 2018. Because ASC payment rates
are based on the OPPS relative payment
weights for the majority of the
procedures performed in ASCs, the ASC
payment rates are updated annually to
reflect annual changes to the OPPS
relative payment weights. In addition,
we are required under section 1833(i)(1)
of the Act to review and update the list
of surgical procedures that can be
performed in an ASC not less frequently
than every 2 years.
3. Overall Impacts for the Proposed
OPPS and ASC Payment Provisions
We estimate that the total increase in
Federal government expenditures under
the OPPS for CY 2018, compared to CY
2017 due to the changes in this
proposed rule, will be approximately
$897 million. Taking into account our
estimated changes in enrollment,
utilization, and case-mix, we estimate
that the OPPS expenditures for CY 2018
will be approximately $5.7 billion
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higher relative to expenditures in CY
2017. Because this proposed rule is
economically significant as measured by
the threshold of an additional $100
million in expenditures in 1 year, we
have prepared this regulatory impact
analysis that, to the best of our ability,
presents its costs and benefits. Table 38
displays the distributional impact of the
proposed CY 2018 changes in OPPS
payment to various groups of hospitals
and for CMHCs.
We estimate that the proposed update
to the conversion factor and other
proposed adjustments (not including the
effects of proposed outlier payments,
the proposed pass-through estimates,
and the proposed application of the
frontier State wage adjustment for CY
2017) would increase total OPPS
payments by 1.8 percent in CY 2018.
The proposed changes to the APC
relative payment weights, the proposed
changes to the wage indexes, the
proposed continuation of a payment
adjustment for rural SCHs, including
EACHs, and the proposed payment
adjustment for cancer hospitals would
not increase OPPS payments because
these changes to the OPPS are budget
neutral. However, these proposed
updates would change the distribution
of payments within the budget neutral
system. We estimate that the proposed
total change in payments between CY
2017 and CY 2018, considering all
payments, proposed changes in
estimated total outlier payments, passthrough payments, and the application
of the frontier State wage adjustment
outside of budget neutrality, in addition
to the application of the OPD fee
schedule increase factor after all
adjustments required by sections
1833(t)(3)(F), 1833(t)(3)(G), and
1833(t)(17) of the Act, would increase
total estimated OPPS payments by 1.9
percent.
We estimate the proposed total
increase (from proposed changes to the
ASC provisions in this proposed rule as
well as from enrollment, utilization, and
case-mix changes) in Medicare
expenditures under the ASC payment
system for CY 2018 compared to CY
2017 to be approximately $67 million.
Because the provisions for the ASC
payment system are part of a proposed
rule that is economically significant as
measured by the $100 million threshold,
we have prepared a regulatory impact
analysis of the proposed changes to the
ASC payment system that, to the best of
our ability, presents the costs and
benefits of this portion of this proposed
rule. Table 39 and 40 of this proposed
rule display the redistributive impact of
the proposed CY 2018 changes
regarding ASC payments, grouped by
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specialty area and then grouped by
procedures with the greatest ASC
expenditures, respectively.
4. Regulatory Review Costs
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
proposed rule, we should estimate the
cost associated with regulatory review.
Due to the uncertainty involved with
accurately quantifying the number of
entities that will review the rule, we
assume that the total number of unique
commenters on last year’s proposed rule
will be the number of reviewers of this
proposed rule. We acknowledge that
this assumption may understate or
overstate the costs of reviewing this
rule. It is possible that not all
commenters reviewed last year’s rule in
detail, and it is also possible that some
reviewers chose not to comment on the
proposed rule. For these reasons, we
believe that the number of past
commenters would be a fair estimate of
the number of reviewers of this
proposed rule. We welcome any
comments on the approach in
estimating the number of entities that
will review this proposed rule.
We also recognize that different types
of entities are in many cases affected by
mutually exclusive sections of this
proposed rule, and therefore for the
purposes of our estimate, we assume
that each reviewer reads approximately
50 percent of the rule. We are seeking
public comments on this assumption.
Using the wage information from the
BLS for medical and health service
managers (Code 11–9111), we estimate
that the cost of reviewing this rule is
$105.16 per hour, including overhead
and fringe benefits (https://www.bls.gov/
oes/2016/may/naics4_621100.htm).
Assuming an average reading speed, we
estimate that it would take
approximately 6.4 hours for the staff to
review half of this proposed rule. For
each facility that reviews the rule, the
estimated cost is $673 (6.4 hours x
$105.16). Therefore, we estimate that
the total cost of reviewing this
regulation is $1,708,074 ($673 x 2,538
reviewers).
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5. Detailed Economic Analyses
a. Estimated Effects of OPPS Changes in
This Proposed Rule
(1) Limitations of Our Analysis
The distributional impacts presented
here are the projected effects of the
proposed CY 2018 policy changes on
various hospital groups. We post on the
CMS Web site our hospital-specific
estimated payments for CY 2018 with
the other supporting documentation for
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this proposed rule. To view the
hospital-specific estimates, we refer
readers to the CMS Web site at: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
HospitalOutpatientPPS/. At
the Web site, select ‘‘regulations and
notices’’ from the left side of the page
and then select ‘‘CMS–1678–P’’ from the
list of regulations and notices. The
hospital-specific file layout and the
hospital-specific file are listed with the
other supporting documentation for this
proposed rule. We show hospitalspecific data only for hospitals whose
claims were used for modeling the
impacts shown in Table 38 below. We
do not show hospital-specific impacts
for hospitals whose claims we were
unable to use. We refer readers to
section II.A. of this proposed rule for a
discussion of the hospitals whose
claims we do not use for ratesetting and
impact purposes.
We estimate the effects of the
proposed individual policy changes by
estimating payments per service, while
holding all other payment policies
constant. We use the best data available,
but do not attempt to predict behavioral
responses to our policy changes. In
addition, we have not made adjustments
for future changes in variables such as
service volume, service-mix, or number
of encounters.
We are soliciting public comment and
information about the anticipated effects
of the proposed changes included in
this proposed rule on providers and our
methodology for estimating them. Any
public comments that we receive will be
addressed in the applicable sections of
the final rule with comment period that
discuss the specific policies.
(2) Estimated Effects of Proposed OPPS
Changes to Part B Drug Payment on
340B Eligible Hospitals Paid Under the
OPPS
In section V.B.7. of this proposed rule,
we discuss our proposal to reduce the
payment for nonpass-through,
separately payable drugs purchased by
340B-participating hospitals through the
340B drug pricing program. Specifically,
we are proposing to pay for separately
payable drugs and biologicals that are
obtained with a 340B discount,
excluding those on pass-through status
and vaccines, at the average sales price
(ASP) minus 22.5 percent instead of
ASP+6 percent.
We recognize that it is difficult to
determine precisely what the impact on
Medicare spending would be because
OPPS claims data do not currently
indicate if the drug being provided was
purchased with a 340B discount.
Furthermore, a list of outpatient drugs
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covered under the 340B program is not
publicly available. Accordingly, for
purposes of estimating the impact, we
assumed that all applicable drugs
purchased by hospitals eligible to
participate in the 340B drug pricing
program were purchased at a discounted
price under the 340B program. We
assumed that all governmental-owned,
cancer, and children’s hospitals, as well
as those hospitals with a DSH
percentage greater than 11.75 percent,
sole community hospitals with a DSH
percentage greater than 8 percent, and
rural referral centers with a DSH
percentage greater than 8 percent, all
participated in the 340B program. We
did not assume changes in the quantity
of 340B purchased drugs provided
(thereby affecting unit volume) or
changes in the number of hospitals
participating in the 340B program that
may occur due to the proposed payment
reduction.
While we acknowledge that there are
some limitations in Medicare’s ability to
prospectively calculate a precise
estimate for purposes of this proposed
rule, we note that each hospital has the
ability to calculate how this proposal
would change its Medicare payments for
separately payable drugs in CY 2018.
Specifically, each hospital that is not
participating in the 340B program
would know that its Medicare payments
for drugs would be unaffected by this
proposal; whereas each hospital
participating in the 340B program has
access to 340B ceiling prices (and
subceiling prices if it participates in the
Prime Vendor Program), knows the
volume of 340B drugs that it has
historically billed to Medicare, and can
generally project the specific covered
340B drugs (and volume thereof) for
which it expects to bill Medicare in CY
2018. Accordingly, an affected hospital
is able to estimate the difference in
payment that it would receive if
Medicare were to pay ASP minus 22.5
percent instead of ASP+6 percent for
340B drugs.
Using CY 2016 claims data for the
applicable separately payable drugs and
biologicals, excluding those on passthrough status and vaccines, billed by
hospitals eligible to participate in the
340B program, we estimate that OPPS
payments for separately payable drugs,
including beneficiary copayment, could
decrease by as much as $900 million
under this proposal. Because we are
proposing to implement this payment
reduction in a budget neutral manner
within the OPPS, the reduced payments
for separately payable drugs purchased
through the 340B drug pricing program
would increase payment rates (and by
extension, beneficiary coinsurance
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liabilities) for other items and services
paid under the OPPS by an offsetting
aggregate amount.
Because data on drugs that are
purchased with a 340B discount are not
publicly available, it is not possible to
more accurately estimate the amount of
the aggregate payment reduction and the
offsetting amount of the adjustment that
is necessary to ensure budget neutrality
through higher payment rates for other
services. Furthermore, there are
potential offsetting factors, including
possible changes in provider behavior
and overall market changes that would
likely lower the impact of the payment
reduction. As a result, if we finalize this
proposal in the CY 2018 OPPS/ASC
final rule with comment period, we may
need to make an adjustment in future
years to revise the conversion factor
once we have received more accurate
data on drugs purchased with a 340B
discount within the OPPS, similar to the
adjustment we made for clinical
diagnostic laboratory test packaging
policy in the CY 2017 OPPS/ASC final
rule with comment period (81 FR
79592).
We project that reducing payment for
340B drugs to ASP minus 22.5 percent
would increase non-drug OPPS payment
rates by approximately 1.4 percent in
CY 2018. We note that the proposed
payment rates and estimated impacts
included in this proposed rule do not
reflect the effects of this proposal. We
remind commenters that this estimate
could change in the final rule based on
a number of factors, including other
policies that are adopted in the final
rule and the availability of updated data
and/or method of assessing the impact
in the final rule. We are seeking public
comment on our estimate and are
especially interested in whether
commenters believe there are other
publicly available data sources or
proxies that can be used for determining
which drugs billed by hospitals paid
under the OPPS were acquired under
the 340B program.
In addition, we are soliciting public
comment on whether we should apply
all or part of the savings generated by
this payment reduction to increase
payments for specific services paid
under the OPPS, or under Part B
generally, in CY 2018, rather than
simply increasing the conversion factor.
In particular, we are seeking public
comment on whether and how the
offsetting increase could be targeted to
hospitals that treat a large share of
indigent patients, especially those
patients who are uninsured. Finally, we
are seeking public comment on whether
the redistribution of savings associated
with this proposal would result in
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unnecessary increases in the volume of
covered services paid under the OPPS
that should be adjusted in accordance
with section 1833(t)(2)(F) of the Act.
(3) Estimated Effects of Proposed OPPS
Changes on Hospitals
Table 38 below shows the estimated
impact of this proposed rule on
hospitals. Historically, the first line of
the impact table, which estimates the
change in payments to all facilities, has
always included cancer and children’s
hospitals, which are held harmless to
their pre-BBA amount. We also include
CMHCs in the first line that includes all
providers. We now include a second
line for all hospitals, excluding
permanently held harmless hospitals
and CMHCs.
We present separate impacts for
CMHCs in Table 38, and we discuss
them separately below, because CMHCs
are paid only for partial hospitalization
services under the OPPS and are a
different provider type from hospitals.
In CY 2018, we are proposing to pay
CMHCs for partial hospitalization
services under APC 5853 (Partial
Hospitalization for CMHCs), and we are
proposing to pay hospitals for partial
hospitalization services under APC 5863
(Partial Hospitalization for HospitalBased PHPs).
The estimated increase in the
proposed total payments made under
the OPPS is determined largely by the
increase to the conversion factor under
the statutory methodology. The
distributional impacts presented do not
include assumptions about changes in
volume and service-mix. The
conversion factor is updated annually
by the OPD fee schedule increase factor
as discussed in detail in section II.B. of
this proposed rule. Section
1833(t)(3)(C)(iv) of the Act provides that
the OPD fee schedule increase factor is
equal to the market basket percentage
increase applicable under section
1886(b)(3)(B)(iii) of the Act, which we
refer to as the IPPS market basket
percentage increase. The proposed IPPS
market basket percentage increase for
FY 2018 is 2.9 percent (82 FR 19931).
Section 1833(t)(3)(F)(i) of the Act
reduces that 2.9 percent by the
multifactor productivity adjustment
described in section 1886(b)(3)(B)(xi)(II)
of the Act, which is proposed to be 0.4
percentage point for FY 2018 (which is
also the proposed MFP adjustment for
FY 2018 in the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19931 through
19932)), and sections 1833(t)(3)(F)(ii)
and 1833(t)(3)(G)(v) of the Act further
reduce the market basket percentage
increase by 0.75 percentage point,
resulting in the proposed OPD fee
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schedule increase factor of 1.75 percent.
We are using the proposed OPD fee
schedule increase factor of 1.75 percent
in the calculation of the CY 2018 OPPS
conversion factor. Section 10324 of the
Affordable Care Act, as amended by
HCERA, further authorized additional
expenditures outside budget neutrality
for hospitals in certain frontier States
that have a wage index less than 1.0000.
The amounts attributable to this frontier
State wage index adjustment are
incorporated in the CY 2018 estimates
in Table 38.
To illustrate the impact of the
proposed CY 2018 changes, our analysis
begins with a baseline simulation model
that uses the CY 2017 relative payment
weights, the FY 2017 final IPPS wage
indexes that include reclassifications,
and the final CY 2017 conversion factor.
Table 38 shows the estimated
redistribution of the proposed increase
or decrease in payments for CY 2018
over CY 2017 payments to hospitals and
CMHCs as a result of the following
factors: the impact of the proposed APC
reconfiguration and recalibration
changes between CY 2017 and CY 2018
(Column 2); the proposed wage indexes
and the provider adjustments (Column
3); the combined impact of all of the
proposed changes described in the
preceding columns plus the proposed
1.75 percent OPD fee schedule increase
factor update to the conversion factor;
and the estimated impact taking into
account all proposed payments for CY
2018 relative to all payments for CY
2017, including the impact of proposed
changes in estimated outlier payments,
the frontier State wage adjustment, and
proposed changes to the pass-through
payment estimate (Column 5).
We did not model an explicit budget
neutrality adjustment for the rural
adjustment for SCHs because we are
proposing to maintain the current
adjustment percentage for CY 2018.
Because the proposed updates to the
conversion factor (including the
proposed update of the OPD fee
schedule increase factor), the estimated
cost of the proposed rural adjustment,
and the estimated cost of proposed
projected pass-through payment for CY
2018 are applied uniformly across
services, observed redistributions of
payments in the impact table for
hospitals largely depend on the mix of
services furnished by a hospital (for
example, how the APCs for the
hospital’s most frequently furnished
services would change), and the impact
of the proposed wage index changes on
the hospital. However, proposed total
payments made under this system and
the extent to which this proposed rule
would redistribute money during
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implementation also will depend on
changes in volume, practice patterns,
and the mix of services billed between
CY 2017 and CY 2018 by various groups
of hospitals, which CMS cannot
forecast.
In CY 2016, we excluded all
molecular pathology laboratory tests
from our packaging policy, and in CY
2017, we expanded the laboratory
packaging exception to apply to all
advanced diagnostic laboratory tests
(ADLTs) that meet the criteria of section
1834A(d)(5)(A) of the Act. For CY 2018,
we are seeking public comments on
whether laboratories (instead of
hospitals) should be permitted to bill
Medicare directly for molecular
pathology tests and ADLTs that meet the
criteria of section 1834A(d)(5)(A) of the
Act (and are granted ADLT status by
CMS), that are ordered less than 14 days
following the date of a hospital
outpatient’s discharge from the hospital
outpatient department.
The laboratory date of service issue is
discussed in section X.F. of this
proposed rule. Because there are
currently no laboratory tests designated
as ADLTs and because the payment rate
for laboratory tests excluded from our
packaging policy billed by a hospital
would have been the applicable rate for
the laboratory test under the CLFS, if
any aspect of this discussion would be
finalized, it would not result in a net
costs or savings to the program.
Accordingly, section X.F. of this
proposed rule is not included in the
impact table in the regulatory impact
analysis.
Overall, we estimate that the
proposed rates for CY 2018 would
increase Medicare OPPS payments by
an estimated 1.9 percent. Removing
payments to cancer and children’s
hospitals because their payments are
held harmless to the pre-OPPS ratio
between payment and cost and
removing payments to CMHCs results in
a proposed estimated 2.0 percent
increase in Medicare payments to all
other hospitals. These estimated
payments would not significantly
impact other providers.
Column 1: Total Number of Hospitals
The first line in Column 1 in Table 38
shows the total number of facilities
(3,828), including designated cancer and
children’s hospitals and CMHCs, for
which we were able to use CY 2016
hospital outpatient and CMHC claims
data to model CY 2017 and proposed CY
2018 payments, by classes of hospitals,
for CMHCs and for dedicated cancer
hospitals. We excluded all hospitals and
CMHCs for which we could not
plausibly estimate CY 2017 or proposed
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CY 2018 payment and entities that are
not paid under the OPPS. The latter
entities include CAHs, all-inclusive
hospitals, and hospitals located in
Guam, the U.S. Virgin Islands, Northern
Mariana Islands, American Samoa, and
the State of Maryland. This process is
discussed in greater detail in section
II.A. of this proposed rule. At this time,
we are unable to calculate a
disproportionate share hospital (DSH)
variable for hospitals that are not also
paid under the IPPS because DSH
payments are only made to hospitals
paid under the IPPS. Hospitals for
which we do not have a DSH variable
are grouped separately and generally
include freestanding psychiatric
hospitals, rehabilitation hospitals, and
long-term care hospitals. We show the
total number of OPPS hospitals (3,714),
excluding the hold-harmless cancer and
children’s hospitals and CMHCs, on the
second line of the table. We excluded
cancer and children’s hospitals because
section 1833(t)(7)(D) of the Act
permanently holds harmless cancer
hospitals and children’s hospitals to
their ‘‘pre-BBA amount’’ as specified
under the terms of the statute, and
therefore, we removed them from our
impact analyses. We show the isolated
impact on the 48 CMHCs at the bottom
of the impact table and discuss that
impact separately below.
Column 2: APC Recalibration—All
Proposed Changes
Column 2 shows the estimated effect
of proposed APC recalibration. Column
2 also reflects any proposed changes in
multiple procedure discount patterns or
conditional packaging that occur as a
result of the proposed changes in the
relative magnitude of payment weights.
As a result of proposed APC
recalibration, we estimate that urban
hospitals would experience no change,
with the impact ranging from an
increase of 0.2 percent to a decrease of
0.1 percent, depending on the number
of beds. Rural hospitals would
experience no change, with the impact
ranging from an increase of 0.1 percent
to a decrease of 0.1 percent, depending
on the number of beds. Major teaching
hospitals would experience a decrease
of 0.1 percent overall.
Column 3: Proposed Wage Indexes and
the Effect of the Proposed Provider
Adjustments
Column 3 demonstrates the combined
budget neutral impact of the proposed
APC recalibration; the proposed updates
for the wage indexes with the proposed
FY 2018 IPPS post-reclassification wage
indexes; the proposed rural adjustment;
and the proposed cancer hospital
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payment adjustment. We modeled the
independent effect of the proposed
budget neutrality adjustments and the
proposed OPD fee schedule increase
factor by using the relative payment
weights and wage indexes for each year,
and using a CY 2017 conversion factor
that included the OPD fee schedule
increase and a budget neutrality
adjustment for differences in wage
indexes.
Column 3 reflects the independent
effects of the proposed updated wage
indexes, including the application of
proposed budget neutrality for the
proposed rural floor policy on a
nationwide basis. This column excludes
the effects of the proposed frontier State
wage index adjustment, which is not
budget neutral and is included in
Column 5. We did not model a budget
neutrality adjustment for the proposed
rural adjustment for SCHs because we
are proposing to continue the rural
payment adjustment of 7.1 percent to
rural SCHs for CY 2018, as described in
section II.E. of this proposed rule.
We modeled the independent effect of
proposing to update the wage indexes
by varying only the wage indexes,
holding APC relative payment weights,
service-mix, and the rural adjustment
constant and using the proposed CY
2018 scaled weights and a CY 2017
conversion factor that included a budget
neutrality adjustment for the effect of
the proposed changes to the wage
indexes between CY 2017 and CY 2018.
The proposed FY 2018 wage policy
results in modest redistributions.
There is a slight increase of less than
0.1 in Column 3 for the proposed CY
2018 cancer hospital payment
adjustment budget neutrality calculation
because we are using a payment-to-cost
ratio target for the cancer hospital
payment adjustment in CY 2018 of 0.89,
compared to the CY 2017 OPPS/ASC
final rule with comment period (81 FR
79869) payment-to-cost ratio target of
0.91. We note that, in accordance with
section 16002 of the 21st Century Cures
Act, we are applying a budget neutrality
factor calculated as if the proposed
cancer hospital adjustment target
payment-to-cost ratio was 0.90, not the
0.89 target payment-to-cost ratio we are
proposing to apply in section II.F. of
this proposed rule.
Column 4: All Proposed Budget
Neutrality Changes Combined With the
Proposed Market Basket Update
Column 4 demonstrates the combined
impact of all of the proposed changes
previously described and the proposed
update to the conversion factor of 1.75
percent. Overall, these proposed
changes would increase payments to
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urban hospitals by 1.8 percent and to
rural hospitals by 1.8 percent. Most
classes of hospitals would receive an
increase in line with the proposed 1.8
percent overall increase after the
proposed update is applied to the
proposed budget neutrality adjustments.
Column 5: All Proposed Changes for CY
2018
Column 5 depicts the full impact of
the proposed CY 2018 policies on each
hospital group by including the effect of
all of the proposed changes for CY 2018
and comparing them to all estimated
payments in CY 2017. Column 5 shows
the combined budget neutral effects of
Columns 2 and 3; the proposed OPD fee
schedule increase; the impact of the
proposed frontier State wage index
adjustment; the impact of estimated
proposed OPPS outlier payments as
discussed in section II.G. of this
proposed rule; the proposed change in
the Hospital OQR Program payment
reduction for the small number of
hospitals in our impact model that
failed to meet the reporting
requirements (discussed in section XIII.
of this proposed rule); and the
difference in total OPPS payments
dedicated to transitional pass-through
payments.
Of those hospitals that failed to meet
the Hospital OQR Program reporting
requirements for the full CY 2017
update (and assumed, for modeling
purposes, to be the same number for CY
2018), we included 30 hospitals in our
model because they had both CY 2016
claims data and recent cost report data.
We estimate that the cumulative effect
of all of the proposed changes for CY
2018 would increase payments to all
facilities by 1.9 percent for CY 2018. We
modeled the independent effect of all of
the proposed changes in Column 5
using the final relative payment weights
for CY 2017 and the proposed relative
payment weights for CY 2018. We used
the final conversion factor for CY 2017
of $75.001 and the proposed CY 2018
conversion factor of $76.483 discussed
in section II.B. of this proposed rule.
Column 5 contains simulated outlier
payments for each year. We used the
proposed 1-year charge inflation factor
used in the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 20173) of 5.1
percent (1.05074) to increase individual
costs on the CY 2016 claims, and we
used the most recent overall CCR in the
April 2017 Outpatient Provider-Specific
File (OPSF) to estimate outlier payments
for CY 2017. Using the CY 2016 claims
and a proposed 5.1 percent charge
inflation factor, we currently estimate
that outlier payments for CY 2017, using
a multiple threshold of 1.75 and a fixeddollar threshold of $3,825 would be
approximately 1.04 percent of total
payments. The estimated current outlier
payments of 1.04 percent are
incorporated in the comparison in
Column 5. We used the same set of
claims and a charge inflation factor of
10.4 percent (1.104055) and the CCRs in
the April 2017 OPSF, with an
adjustment of 0.979187, to reflect
relative changes in cost and charge
inflation between CY 2016 and CY 2018,
to model the proposed CY 2018 outliers
at 1.0 percent of estimated total
payments using a multiple threshold of
1.75 and a fixed-dollar threshold of
$4,325. The charge inflation and CCR
inflation factors are discussed in detail
in the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 20173).
Overall, we estimate that facilities
would experience an increase of 1.9
percent under this proposed rule in CY
2018 relative to total spending in CY
2017. This projected increase (shown in
Column 5) of Table 38 reflects the
proposed 1.75 percent OPD fee schedule
increase factor, plus 0.22 percent for the
proposed change in the pass-through
estimate between CY 2017 and CY 2018,
minus a decrease of 0.04 percent for the
difference in estimated outlier payments
between CY 2017 (1.04 percent) and CY
2018 (proposed 1.0 percent). We
estimate that the combined effect of all
of the proposed changes for CY 2018
would increase payments to urban
hospitals by 2.0 percent. Overall, we
estimate that rural hospitals would
experience a 2.0 percent increase as a
result of the combined effects of all of
the proposed changes for CY 2018.
Among hospitals by teaching status,
we estimate that the impacts resulting
from the combined effects of all changes
would include an increase of 1.7
percent for major teaching hospitals and
an increase of 2.1 percent for
nonteaching hospitals. Minor teaching
hospitals would experience an
estimated increase of 2.0 percent.
In our analysis, we also have
categorized hospitals by type of
ownership. Based on this analysis, we
estimate that voluntary hospitals would
experience an increase of 1.9 percent,
proprietary hospitals would experience
an increase of 2.3 percent, and
governmental hospitals would
experience an increase of 1.9 percent.
TABLE 38—ESTIMATED IMPACT OF THE PROPOSED CY 2018 CHANGES FOR THE HOSPITAL OUTPATIENT PROSPECTIVE
PAYMENT SYSTEM
ALL FACILITIES * ................................................................
ALL HOSPITALS (excludes hospitals permanently held
harmless and CMHCs) .....................................................
URBAN HOSPITALS ...........................................................
LARGE URBAN (GT 1 MILL.) ......................................
OTHER URBAN (LE 1 MILL.) ......................................
RURAL HOSPITALS ............................................................
SOLE COMMUNITY .....................................................
OTHER RURAL ............................................................
BEDS (URBAN)
0–99 BEDS ...................................................................
100–199 BEDS .............................................................
200–299 BEDS .............................................................
300–499 BEDS .............................................................
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Proposed
new wage
index and
provider
adjustments
All proposed
budget neutral
changes
(combined
cols 2,3) with
market basket
update
All proposed
changes
(1)
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
Number of
hospitals
APC
recalibration
(all proposed
changes)
(2)
(3)
(4)
(5)
3,828
0.0
0.0
1.8
1.9
3,714
2,902
1,577
1,325
812
371
441
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
¥0.1
0.1
0.0
0.2
¥0.2
1.8
1.8
1.8
1.9
1.8
1.9
1.6
2.0
2.0
1.9
2.0
2.0
2.1
1.8
988
841
465
395
0.2
0.2
0.1
0.0
0.0
0.0
0.0
0.0
1.9
1.9
1.8
1.8
2.1
2.1
2.0
2.0
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
TABLE 38—ESTIMATED IMPACT OF THE PROPOSED CY 2018 CHANGES FOR THE HOSPITAL OUTPATIENT PROSPECTIVE
PAYMENT SYSTEM—Continued
Number of
hospitals
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
Proposed
new wage
index and
provider
adjustments
All proposed
budget neutral
changes
(combined
cols 2,3) with
market basket
update
All proposed
changes
(1)
500 + BEDS ..................................................................
BEDS (RURAL)
0–49 BEDS ...................................................................
50–100 BEDS ...............................................................
101–149 BEDS .............................................................
150–199 BEDS .............................................................
200 + BEDS ..................................................................
REGION (URBAN)
NEW ENGLAND ...........................................................
MIDDLE ATLANTIC ......................................................
SOUTH ATLANTIC .......................................................
EAST NORTH CENT. ...................................................
EAST SOUTH CENT. ...................................................
WEST NORTH CENT. ..................................................
WEST SOUTH CENT. ..................................................
MOUNTAIN ...................................................................
PACIFIC ........................................................................
PUERTO RICO .............................................................
REGION (RURAL)
NEW ENGLAND ...........................................................
MIDDLE ATLANTIC ......................................................
SOUTH ATLANTIC .......................................................
EAST NORTH CENT. ...................................................
EAST SOUTH CENT. ...................................................
WEST NORTH CENT. ..................................................
WEST SOUTH CENT. ..................................................
MOUNTAIN ...................................................................
PACIFIC ........................................................................
TEACHING STATUS
NON-TEACHING ..........................................................
MINOR ..........................................................................
MAJOR .........................................................................
DSH PATIENT PERCENT
0 ....................................................................................
GT 0–0.10 .....................................................................
0.10–0.16 ......................................................................
0.16–0.23 ......................................................................
0.23–0.35 ......................................................................
GE 0.35 .........................................................................
DSH NOT AVAILABLE ** ..............................................
URBAN TEACHING/DSH
TEACHING & DSH .......................................................
NO TEACHING/DSH ....................................................
NO TEACHING/NO DSH ..............................................
DSH NOT AVAILABLE ** ..............................................
TYPE OF OWNERSHIP
VOLUNTARY ................................................................
PROPRIETARY ............................................................
GOVERNMENT ............................................................
CMHCs
APC
recalibration
(all proposed
changes)
(2)
(3)
(4)
(5)
213
¥0.1
0.1
1.7
1.8
337
289
101
46
39
0.0
0.1
0.0
0.0
¥0.1
¥0.2
¥0.2
0.1
0.1
0.3
1.5
1.6
1.9
1.9
2.0
1.7
1.9
2.1
2.1
2.1
144
343
461
464
172
185
501
202
382
48
0.2
0.1
0.1
0.0
¥0.2
¥0.2
0.1
0.2
0.1
¥0.3
0.1
¥0.3
0.2
0.1
¥0.1
0.5
0.2
¥0.9
0.0
0.3
2.1
1.5
2.0
1.8
1.5
2.0
2.0
1.0
1.8
1.7
2.2
1.7
2.2
1.9
1.7
2.2
2.2
1.3
2.0
1.9
21
53
123
121
155
96
162
57
24
0.0
0.1
0.0
0.0
¥0.1
0.0
0.1
0.0
0.1
1.6
¥0.1
¥0.7
¥0.1
¥0.1
0.2
0.3
¥0.3
0.1
3.4
1.8
1.0
1.7
1.5
2.0
2.1
1.5
1.9
3.5
2.0
1.2
1.9
1.7
2.3
2.3
1.9
2.1
2,624
746
344
0.1
0.0
¥0.1
0.1
0.0
¥0.1
2.0
1.8
1.6
2.1
2.0
1.7
11
277
269
577
1,121
920
539
0.0
0.2
0.2
0.1
0.0
0.0
¥1.5
¥0.1
0.0
¥0.1
0.2
0.0
¥0.1
0.1
1.7
2.0
1.8
2.1
1.8
1.7
0.3
1.8
2.1
2.0
2.2
1.9
1.8
0.5
982
1,394
11
515
0.0
0.2
0.0
¥1.5
¥0.1
0.2
¥0.1
0.1
1.7
2.1
1.7
0.4
1.8
2.2
1.8
0.5
1,970
1,253
491
48
0.0
0.2
¥0.1
¥0.1
0.0
0.1
0.1
0.2
1.8
2.1
1.8
1.9
1.9
2.3
1.9
2.1
Column (1) shows total hospitals and/or CMHCs.
Column (2) includes all proposed CY 2018 OPPS policies and compares those to the CY 2017 OPPS.
Column (3) shows the budget neutral impact of updating the wage index by applying the proposed FY 2018 hospital inpatient wage index, including all hold harmless policies and transitional wages. The proposed rural adjustment continues our current policy of 7.1 percent so the budget neutrality factor is 1. The proposed budget neutrality adjustment for the cancer hospital adjustment is 1.0003 because the target payment-tocost ratio changes from 0.91 in CY 2017 to 0.90 in CY 2018 and is further reduced by one percentage point to 0.89 in accordance with the 21st
Century Cures Act; however this reduction does not affect the budget neutrality adjustment consistent with statute.
Column (4) shows the impact of all budget neutrality adjustments and the addition of the proposed 1.75 percent OPD fee schedule update factor (2.9 percent reduced by 0.4 percentage points for the proposed productivity adjustment and further reduced by 0.75 percentage point as required by law).
Column (5) shows the additional adjustments to the conversion factor resulting from the frontier adjustment, a change in the pass-through estimate, and adding estimated outlier payments.
* These 3,828 providers include children and cancer hospitals, which are held harmless to pre-BBA amounts, and CMHCs.
** Complete DSH numbers are not available for providers that are not paid under IPPS, including rehabilitation, psychiatric, and long-term care
hospitals.
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
(4) Estimated Effects of Proposed OPPS
Changes on CMHCs
The last line of Table 38 demonstrates
the isolated impact on CMHCs, which
furnish only partial hospitalization
services under the OPPS. In CY 2017,
CMHCs are paid under APC 5853
(Partial Hospitalization (3 or more
services) for CMHCs). We modeled the
impact of this APC policy assuming that
CMHCs will continue to provide the
same number of days of PHP care as
seen in the CY 2016 claims data used for
this proposed rule. We excluded days
with 1 or 2 services because our policy
only pays a per diem rate for partial
hospitalization when 3 or more
qualifying services are provided to the
beneficiary. We estimate that CMHCs
would experience an overall 2.1 percent
increase in payments from CY 2017
(shown in Column 5). We note that this
includes the trimming methodology
described in section VIII.B. of this
proposed rule.
Column 3 shows that the estimated
impact of adopting the proposed FY
2018 wage index values would result in
a small increase of 0.2 percent to
CMHCs. Column 4 shows that
combining this proposed OPD fee
schedule increase factor, along with
proposed changes in APC policy for CY
2018 and the proposed FY 2018 wage
index updates, would result in an
estimated increase of 1.9 percent.
Column 5 shows that adding the
proposed changes in outlier and passthough payments would result in a total
2.1 percent increase in payment for
CMHCs. This reflects all proposed
changes to CMHCs for CY 2018.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
(5) Estimated Effect of Proposed OPPS
Changes on Beneficiaries
For services for which the beneficiary
pays a copayment of 20 percent of the
payment rate, the beneficiary’s payment
will increase for services for which the
OPPS payments will rise and will
decrease for services for which the
OPPS payments will fall. For further
discussion on the calculation of the
national unadjusted copayments and
minimum unadjusted copayments, we
refer readers to section II.I. of this
proposed rule. In all cases, section
1833(t)(8)(C)(i) of the Act limits
beneficiary liability for copayment for a
procedure performed in a year to the
hospital inpatient deductible for the
applicable year.
We estimate that the aggregate
beneficiary coinsurance percentage
would be 18.5 percent for all services
paid under the OPPS in CY 2018. The
estimated aggregate beneficiary
coinsurance reflects general system
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adjustments, including the CY 2018
comprehensive APC payment policy
discussed in section II.A.2.e. of this
proposed rule.
(6) Estimated Effects of Proposed OPPS
Changes on Other Providers
The relative payment weights and
payment amounts established under the
OPPS affect the payments made to ASCs
as discussed in section XII. of this
proposed rule. No types of providers or
suppliers other than hospitals, CMHCs,
and ASCs would be affected by the
proposed changes in this proposed rule.
(7) Estimated Effects of Proposed OPPS
Changes on the Medicare and Medicaid
Programs
The effect on the Medicare program is
expected to be an increase of $897
million in program payments for OPPS
services furnished in CY 2018. The
effect on the Medicaid program is
expected to be limited to copayments
that Medicaid may make on behalf of
Medicaid recipients who are also
Medicare beneficiaries. We refer readers
to our discussion of the impact on
beneficiaries in section XIX.A.4.a.(4) of
this proposed rule.
(8) Alternative OPPS Policies
Considered
Alternatives to the OPPS changes we
are proposing and the reasons for our
selected alternatives are discussed
throughout this proposed rule.
• Alternatives considered for the
enforcement instruction for the
supervision of outpatient therapeutic
services in critical access hospitals
(CAHs) and certain small rural
hospitals.
We considered whether to address
enforcement of the direct supervision
requirement for outpatient therapeutic
services in CAHs and small, rural
hospitals with fewer than 100 beds by
extending the notice of nonenforcement
while we further develop our policies.
There are grounds for applying the same
supervision requirements to CAHs as to
all other hospitals. One of these grounds
is that hospital outpatient services are
furnished ‘‘incident to’’ physicians’
services, and we believe that the
incident to rules apply equally to
critical access and other types of
hospitals. We also believe that Medicare
should purchase the same basic level of
quality and safe outpatient care for all
beneficiaries, whether from a CAH, a
small rural hospital, or other hospitals.
At the same time, we acknowledge that
in order to ensure the same level of
outpatient care is furnished in CAHs
and small rural hospitals as other
hospitals, we need to continue the
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national discussion about what
constitutes the appropriate supervision
for a given service. We also need to
acknowledge the challenges CAHs and
small, rural hospitals have in recruiting
and retaining physicians and qualified
nonphysician practitioners.
Therefore, we are proposing to extend
the notice of nonenforcement for CAHs
and small rural hospitals with fewer
than 100 beds for CY 2018 and CY 2019,
to give all parties time to submit specific
services to be considered for a reduced
minimum supervision standard. We
believe that the policies in this
proposed rule will address industry
concerns while maintaining an adequate
level of safety and quality of care in the
hospital outpatient services that
Medicare purchases.
• Alternatives Considered for the
Methodology for Assigning Skin
Substitutes to High or Low Cost Groups
We refer readers to section V.B.1.d. of
this proposed rule for a discussion of
our proposal to assign any skin
substitute product that was assigned to
the high cost group in CY 2017 to the
high cost group in CY 2018, regardless
of whether the product’s mean unit cost
(MUC) or the product’s per day cost
(PDC) exceeds or falls below the overall
CY 2018 MUC or PDC threshold. We
would continue to assign products that
exceed either the overall CY 2018 MUC
or PDC threshold to the high cost group.
We also considered, but did not
propose, retaining our methodology
from CY 2017 and assigning skin
substitutes to the high cost group based
on whether an individual product’s
MUC or PDC exceeded the overall CY
2018 MUC or PDC threshold based on
calculations done for either the
proposed rule or final rule with
comment period.
b. Estimated Effects of Proposed CY
2018 ASC Payment System Policies
Most ASC payment rates are
calculated by multiplying the ASC
conversion factor by the ASC relative
payment weight. As discussed fully in
section XII. of this proposed rule, we are
proposing to set the CY 2018 ASC
relative payment weights by scaling the
proposed CY 2018 OPPS relative
payment weights by the ASC scalar of
0.9002. The estimated effects of the
proposed updated relative payment
weights on payment rates are varied and
are reflected in the estimated payments
displayed in Tables 39 and 40 below.
Beginning in CY 2011, section 3401 of
the Affordable Care Act requires that the
annual update to the ASC payment
system (which currently is the CPI–U)
after application of any quality reporting
reduction be reduced by a productivity
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
adjustment. The Affordable Care Act
defines the productivity adjustment to
be equal to the 10-year moving average
of changes in annual economy-wide
private nonfarm business multifactor
productivity (MFP) (as projected by the
Secretary for the 10-year period ending
with the applicable fiscal year, year,
cost reporting period, or other annual
period). For ASCs that fail to meet their
quality reporting requirements, the CY
2018 payment determinations will be
based on the application of a 2.0
percentage points reduction to the
annual update factor, which currently is
the CPI–U. We calculated the proposed
CY 2018 ASC conversion factor by
adjusting the CY 2017 ASC conversion
factor by 1.0004 to account for changes
in the pre-floor and pre-reclassified
hospital wage indexes between CY 2017
and CY 2018 and by applying the
proposed CY 2018 MFP-adjusted CPI–U
update factor of 1.9 percent (projected
CPI–U update of 2.3 percent minus a
proposed projected productivity
adjustment of 0.4 percentage point). The
proposed CY 2018 ASC conversion
factor is $45.876.
(1) Limitations of Our Analysis
Presented here are the projected
effects of the proposed changes for CY
2018 on Medicare payment to ASCs. A
key limitation of our analysis is our
inability to predict changes in ASC
service-mix between CY 2016 and CY
2018 with precision. We believe that the
net effect on Medicare expenditures
resulting from the proposed CY 2018
changes will be small in the aggregate
for all ASCs. However, such changes
may have differential effects across
surgical specialty groups as ASCs
continue to adjust to the payment rates
based on the policies of the revised ASC
payment system. We are unable to
accurately project such changes at a
disaggregated level. Clearly, individual
ASCs will experience changes in
payment that differ from the aggregated
estimated impacts presented below.
(2) Estimated Effects of Proposed ASC
Payment System Policies on ASCs
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
Some ASCs are multispecialty
facilities that perform a wide range of
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surgical procedures from excision of
lesions to hernia repair to cataract
extraction; others focus on a single
specialty and perform only a limited
range of surgical procedures, such as
eye, digestive system, or orthopedic
procedures. The combined effect on an
individual ASC of the proposed update
to the CY 2018 payments will depend
on a number of factors, including, but
not limited to, the mix of services the
ASC provides, the volume of specific
services provided by the ASC, the
percentage of its patients who are
Medicare beneficiaries, and the extent to
which an ASC provides different
services in the coming year. The
following discussion presents tables that
display estimates of the impact of the
proposed CY 2018 updates to the ASC
payment system on Medicare payments
to ASCs, assuming the same mix of
services as reflected in our CY 2016
claims data. Table 39 depicts the
estimated aggregate percent change in
payment by surgical specialty or
ancillary items and services group by
comparing estimated CY 2017 payments
to estimated CY 2018 payments, and
Table 40 shows a comparison of
estimated CY 2017 payments to
estimated CY 2018 payments for
procedures that we estimate will receive
the most Medicare payment in CY 2017.
Table 39 shows the estimated effects
on aggregate Medicare payments under
the ASC payment system by surgical
specialty or ancillary items and services
group. We have aggregated the surgical
HCPCS codes by specialty group,
grouped all HCPCS codes for covered
ancillary items and services into a single
group, and then estimated the effect on
aggregated payment for surgical
specialty and ancillary items and
services groups. The groups are sorted
for display in descending order by
estimated Medicare program payment to
ASCs. The following is an explanation
of the information presented in Table
39.
• Column 1—Surgical Specialty or
Ancillary Items and Services Group
indicates the surgical specialty into
which ASC procedures are grouped and
the ancillary items and services group
which includes all HCPCS codes for
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33717
covered ancillary items and services. To
group surgical procedures by surgical
specialty, we used the CPT code range
definitions and Level II HCPCS codes
and Category III CPT codes as
appropriate, to account for all surgical
procedures to which the Medicare
program payments are attributed.
• Column 2—Estimated CY 2017 ASC
Payments were calculated using CY
2016 ASC utilization (the most recent
full year of ASC utilization) and CY
2017 ASC payment rates. The surgical
specialty and ancillary items and
services groups are displayed in
descending order based on estimated CY
2017 ASC payments.
• Column 3—Estimated Proposed CY
2018 Percent Change is the aggregate
percentage increase or decrease in
Medicare program payment to ASCs for
each surgical specialty or ancillary
items and services group that are
attributable to proposed updates to ASC
payment rates for CY 2018 compared to
CY 2017.
As seen in Table 39, for the six
specialty groups that account for the
most ASC utilization and spending, we
estimate that the update to ASC
payment rates for CY 2017 will result in
a 2-percent increase in aggregate
payment amounts for eye and ocular
adnexa procedures, a 3-percent increase
in aggregate payment amounts for
digestive system procedures, 2-percent
increase in aggregate payment amounts
for nervous system procedures, a 4percent increase in aggregate payment
amounts for musculoskeletal system
procedures, a 1-percent increase in
aggregate payment amounts for
genitourinary system procedures, and a
5-percent increase in aggregate payment
amounts for integumentary system
procedures.
Also displayed in Table 39 is a
separate estimate of Medicare ASC
payments for the group of separately
payable covered ancillary items and
services. The payment estimates for the
covered surgical procedures include the
costs of packaged ancillary items and
services. We estimate that aggregate
payments for these items and services
would decrease by 43 percent for CY
2018.
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
TABLE 39.—ESTIMATED IMPACT OF THE PROPOSED CY 2018 UPDATE TO THE ASC PAYMENT SYSTEM ON AGGREGATE
CY 2018 MEDICARE PROGRAM PAYMENTS BY SURGICAL SPECIALTY OR ANCILLARY ITEMS AND SERVICES GROUP
Surgical Specialty Group
Estimated
CY 2017
ASC payments
(in millions)
Estimated
Proposed
CY 2018
percent
change
(1)
(2)
(3)
Total .........................................................................................................................................................................
Eye and ocular adnexa ............................................................................................................................................
Digestive system ......................................................................................................................................................
Nervous system .......................................................................................................................................................
Musculoskeletal system ...........................................................................................................................................
Genitourinary system ...............................................................................................................................................
Integumentary system .............................................................................................................................................
Ancillary items and services ....................................................................................................................................
Table 40 below shows the estimated
impact of the proposed updates to the
revised ASC payment system on
aggregate ASC payments for selected
surgical procedures during CY 2018.
The table displays 30 of the procedures
receiving the greatest estimated CY 2017
aggregate Medicare payments to ASCs.
The HCPCS codes are sorted in
descending order by estimated CY 2017
program payment.
• Column 1—CPT/HCPCS code.
• Column 2—Short Descriptor of the
HCPCS code.
• Column 3—Estimated CY 2017 ASC
Payments were calculated using CY
2016.
ASC utilization (the most recent full
year of ASC utilization) and the CY
$4,460
1,688
852
849
530
186
141
55
2%
2
3
2
3
1
5
¥43
2017 ASC payment rates. The estimated
CY 2017 payments are expressed in
millions of dollars.
• Column 4—Estimated CY 2018
Percent Change reflects the percent
differences between the estimated ASC
payment for CY 2017 and the estimated
proposed payment for CY 2018 based on
the proposed update.
TABLE 40—ESTIMATED IMPACT OF THE PROPOSED CY 2018 UPDATE TO THE ADC PAYMENT SYSTEM ON AGGREGATE
PAYMENTS FOR SELECTED PROCEDURES
66984
45380
43239
63685
45385
63650
64483
66982
0191T
66821
64635
29827
64493
64590
G0105
62323
45378
G0121
64721
15823
29881
29880
67042
28285
52000
26055
43235
64561
50590
67904
Short descriptor
(1)
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
CPT/HCPCS code
Estimated
CY 2017
ASC
payment
(in millions)
(2)
(3)
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Cataract surg w/iol 1 stage ............................................................
Colonoscopy and biopsy ...............................................................
Egd biopsy single/multiple .............................................................
Insrt/redo spine n generator ..........................................................
Colonoscopy w/lesion removal ......................................................
Implant neuroelectrodes ................................................................
Inj foramen epidural l/s ..................................................................
Cataract surgery complex ..............................................................
Insert ant segment drain int ...........................................................
After cataract laser surgery ...........................................................
Destroy lumb/sac facet jnt .............................................................
Arthroscop rotator cuff repr ...........................................................
Inj paravert f jnt l/s 1 lev ................................................................
Insrt/redo pn/gastr stimul ...............................................................
Colorectal scrn; hi risk ind .............................................................
Njx interlaminar lmbr/sc .................................................................
Diagnostic colonoscopy .................................................................
Colon ca scrn not hi rsk ind ..........................................................
Carpal tunnel surgery ....................................................................
Revision of upper eyelid ................................................................
Knee arthroscopy/surgery ..............................................................
Knee arthroscopy/surgery ..............................................................
Vit for macular hole .......................................................................
Repair of hammertoe .....................................................................
Cystoscopy ....................................................................................
Incise finger tendon sheath ...........................................................
Egd diagnostic brush wash ...........................................................
Implant neuroelectrodes ................................................................
Fragmenting of kidney stone .........................................................
Repair eyelid defect .......................................................................
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20JYP2
$1,172
216
178
151
146
118
99
94
86
69
68
61
60
50
45
45
44
42
34
32
30
26
25
24
23
23
23
22
21
20
Estimated
CY 2018
percent
change
(4)
%2
3
3
¥4
3
3
3
2
1
1
2
3
3
¥1
3
4
3
3
2
6
3
3
2
3
¥1
2
2
6
2
1
Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
(3) Estimated Effects of Proposed ASC
Payment System Policies on
Beneficiaries
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
We estimate that the proposed CY
2018 update to the ASC payment system
would be generally positive for
beneficiaries with respect to the new
procedures that we are proposing to add
to the ASC list of covered surgical
procedures and for those that we are
proposing to designate as office-based
for CY 2018. First, other than certain
preventive services where coinsurance
and the Part B deductible is waived to
comply with sections 1833(a)(1) and (b)
of the Act, the ASC coinsurance rate for
all procedures is 20 percent. This
contrasts with procedures performed in
HOPDs under the OPPS, where the
beneficiary is responsible for
copayments that range from 20 percent
to 40 percent of the procedure payment
(other than for certain preventive
services). Second, in almost all cases,
the ASC payment rates under the ASC
payment system are lower than payment
rates for the same procedures under the
OPPS. Therefore, the beneficiary
coinsurance amount under the ASC
payment system will almost always be
less than the OPPS copayment amount
for the same services. (The only
exceptions would be if the ASC
coinsurance amount exceeds the
inpatient deductible. The statute
requires that copayment amounts under
the OPPS not exceed the inpatient
deductible.) Beneficiary coinsurance for
services migrating from physicians’
offices to ASCs may decrease or increase
under the revised ASC payment system,
depending on the particular service and
the relative payment amounts under the
MPFS compared to the ASC. However,
for those additional procedures that we
are proposing to designate as officebased in CY 2018, the beneficiary
coinsurance amount under the ASC
payment system generally will be no
greater than the beneficiary coinsurance
under the MPFS because the
coinsurance under both payment
systems generally is 20 percent (except
for certain preventive services where the
coinsurance is waived under both
payment systems).
www.whitehouse.gov/omb/circulars_
a004_a-4#a), we have prepared two
accounting statements to illustrate the
impacts of this proposed rule. The first
accounting statement, Table 41 below,
illustrates the classification of
expenditures for the proposed CY 2018
estimated hospital OPPS incurred
benefit impacts associated with the
proposed CY 2018 OPD fee schedule
increase, based on the 2017 Trustee’s
Report. The second accounting
statement, Table 42 below, illustrates
the classification of expenditures
associated with the proposed 1.9
percent CY 2018 update to the ASC
payment system, based on the
provisions of this proposed rule and the
baseline spending estimates for ASCs in
the 2017 Trustee’s Report. Lastly, the
tables classify most estimated impacts
as transfers.
TABLE 41—ACCOUNTING STATEMENT:
PROPOSED CY 2018 ESTIMATED
HOSPITAL OPPS TRANSFERS FROM
CY 2017 TO CY 2018 ASSOCIATED
WITH THE PROPOSED CY 2018
HOSPITAL OUTPATIENT OPD FEE
SCHEDULE INCREASE
Category
Annualized Monetized
Transfers.
From Whom to Whom
Total ...................
Category
Annualized Monetized
Transfers.
From Whom to Whom
Total ...................
c. Accounting Statements and Tables
As required by OMB Circular A–4
(available on the Office of Management
and Budget Web site at: https://
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$897 million.
Federal Government
to outpatient hospitals and other
providers who receive payment
under the hospital
OPPS.
$897 million.
TABLE 42—ACCOUNTING STATEMENT:
CLASSIFICATION
OF
ESTIMATED
TRANSFERS FROM CY 2017 TO CY
2018 AS A RESULT OF THE PROPOSED CY 2018 UPDATE TO THE
ASC PAYMENT SYSTEM
(4) Alternative ASC Payment Policies
Considered
Alternatives to the ASC changes we
are proposing and the reasons for our
selected alternatives are discussed
throughout this proposed rule.
Transfers
Transfers
$67 million.
Federal Government
to Medicare Providers and Suppliers.
$67 million.
d. Effects of Requirements for the
Hospital OQR Program
(1) Background
We refer readers to the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79874), for the previously
estimated effects of changes to the
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33719
Hospital OQR Program for the CY 2018,
CY 2019, and CY 2020 payment
determinations. Of the 3,228 hospitals
that met eligibility requirements for the
CY 2017 payment determination, we
determined that 87 hospitals did not
meet the requirements to receive the full
OPD fee schedule increase factor. Most
of these hospitals (66 of the 87), chose
not to participate in the Hospital OQR
Program for the CY 2017 payment
determination. We estimate that
approximately 100 hospitals will not
receive the full OPD fee schedule
increase factor for the CY 2018 payment
determination and subsequent years.
In section XIII.B.4.c.(1) and (2) of this
proposed rule, we are proposing to
remove: (1) OP–21: Median Time to
Pain Management for Long Bone
Fracture; and (2) OP–26: Hospital
Outpatient Volume Data on Selected
Outpatient Surgical Procedures
beginning with the CY 2020 payment
determination and for subsequent years.
In section XIII.B.4.c.(3) through (6) of
this proposed rule, we are proposing to
remove: (1) OP–1: Median Time to
Fibrinolysis; (2) OP–4: Aspirin at
Arrival; (3) OP–20: Door to Diagnostic
Evaluation by a Qualified Medical
Professional; and (4) OP–25: Safe
Surgery Checklist beginning with the
CY 2021 payment determination and for
subsequent years. We expect these
proposals to reduce the burden of
reporting for the Hospital OQR Program,
as discussed below.
In this proposed rule, we are
proposing to publicly report OP–18c
using data from patient encounters
beginning with the third quarter of
2017. We are also proposing to delay
OP–37a–e: Outpatient and Ambulatory
Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS
CAHPS) Survey-based measures
beginning with the CY 2020 payment
determination (CY 2018 data collection)
and until further notice in future
rulemaking. In addition, in this
proposed rule, beginning with the CY
2020 payment determination, we are
proposing: (1) To codify at § 419.46(e)
our previously finalized process for
targeting hospitals for validation of
chart-abstracted measures; (2) to
formalize the educational review
process and use it to correct incorrect
validation results for chart-abstracted
measures; (3) to change the NOP
submission deadlines such that
hospitals are required to submit the
NOP any time prior to registering on the
QualityNet Web site and to make
conforming revisions at 42 CFR
419.46(a); (4) to align the first quarter for
which hospitals must submit data for all
hospitals that did not participate in the
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
previous year’s Hospital OQR Program,
and make corresponding revisions at 42
CFR 419.46(c)(3); and (5) to align the
naming of the Extraordinary
Circumstances Exceptions (ECE) policy
and make conforming changes to the
CFR. We do not believe that these
proposed changes would affect our
burden estimates, as further discussed
below.
(2) Estimated Burden Due to Proposal to
Delay OP–37a–e: Outpatient and
Ambulatory Surgery Consumer
Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based
Measures Beginning with the CY 2020
Payment Determination
As described in section XIII.B.5. of
this proposed rule, we are proposing to
delay OP–37a–e: Outpatient and
Ambulatory Surgery Consumer
Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-based
measures beginning with the CY 2020
payment determination (CY 2018 data
collection). As stated in the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79863), the information
collection requirements associated with
the five OAS CAHPS Survey-based
measures (OP–37a, OP–37b, OP– 37c,
OP–37d, and OP–37e) are currently
approved under OMB Control Number
0938–1240. For this reason, in the CY
2017 OPPS/ASC final rule with
comment period (81 FR 79863), we did
not provide an independent estimate of
the burden associated with OAS CAHPS
Survey based measures for the Hospital
OQR Program. Similarly, our proposal
to delay reporting for these measures
does not influence our current burden
estimates.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
(3) Estimated Burden Due to Proposal to
Publicly Report OP–18c: Median Time
from Emergency Department Arrival to
Emergency Department Departure for
Discharged Emergency Department
Patients—Psychiatric/Mental Health
Patients
In section XIII.B.10.b. of this proposed
rule, we are proposing to publicly report
18c: Median Time from Emergency
Department Arrival to Emergency
Department Departure for Discharged
Emergency Department Patients—
Psychiatric/Mental Health Patients
beginning with patient encounters from
the third quarter of 2017. As noted in
that section, the data required for public
reporting of OP–18c is already collected
as part of the existing Hospital OQR
Program requirements. Accordingly, we
do not expect this proposal to affect
burden.
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(4) Estimated Impact of Proposals for the
CY 2020 Payment Determination and
Subsequent Years
(a) Impact of Proposed Measure
Removals
In section XIII.B.4.c.(1) and (2) of this
proposed rule, we are proposing to
remove one chart-abstracted measure
(OP–21: Median Time to Pain
Management for Long Bone Fracture)
and one web-based measure (OP–26:
Hospital Outpatient Volume Data on
Selected Outpatient Surgical
Procedures) for the CY 2020 payment
determination and subsequent years. As
described in detail in section XVII.B. of
this proposed rule, we expect these
proposals to reduce burden by 152,680
hours and $5.6 million for the CY 2020
payment determination for the Hospital
OQR Program.
(b) Impact of Updates to Previously
Finalized Validation Procedures and the
Educational Review Process
In section XIII.D.7.a. of this proposed
rule, we provide clarification on our
procedures for validation of chartabstracted measures to note that the 50
poorest performing outlier hospitals will
be targeted for validation. We do not
expect this clarification to influence
burden, as it does not alter the number
of hospitals selected for validation or
the requirements for those hospitals that
are selected.
In addition, in section XIII.D.7.c. of
this proposed rule, we are proposing to
formalize the process of allowing
hospitals to use an educational review
process to correct incorrect validation
results for the first three quarters of
validation for chart-abstracted measures.
Additionally, we are proposing to
update the process to specify that if the
results of an educational review indicate
that we incorrectly scored a hospital,
the corrected score would be used to
compute the hospital’s final validation
score whether or not the hospital
submits a reconsideration request.
Under this proposal, the educational
review request process remains the
same for the CY 2020 payment
determination and subsequent years,
except that revised scores identified
through an educational review would be
used to correct a hospital’s validation
score. As stated in the CY 2014 OPPS/
ASC final rule with comment period (78
FR 75171), we believe there is a burden
associated with successful participation
in the Hospital OQR Program, where
successful participation results in a full
annual payment update (APU) for a
particular payment determination. This
burden would include, but would not be
limited to, maintaining familiarity with
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the Hospital OQR Program
requirements, which includes checking
feedback reports to indicate a facility’s
current status or performance. The
overall administrative burden, which
we believe includes the educational
review process, is estimated at 42 hours
per hospital (78 FR 75171) and would
not be changed by the proposal to use
revised scores identified through an
educational review to correct a
hospital’s validation score.
(c) Impact of Proposed Updates to NOP
Submission Deadlines
In section XIII.C.2. of this proposed
rule, we are proposing to revise the NOP
submission deadlines such that
hospitals are required to submit the
NOP any time prior to registering on the
QualityNet Web site. While we expect
this proposal to make it generally easier
for hospitals to comply with the
Hospital OQR Program requirements by
extending the NOP deadline, we
anticipate a negligible effect on the time
and cost of completing the participation
requirements. As a result, the proposal
to revise the NOP submission deadlines
does not impact our burden estimates.
(d) Burden Due to Proposal To Align the
First Quarter for Which Hospitals Must
Submit Data for All Hospitals That Did
Not Participate in the Previous Year’s
Hospital OQR Program
In section XIII.D.1. of this proposed
rule, we are proposing to align the
timeline specifying the initial quarter
for which hospitals must submit data for
all hospitals that did not participate in
the previous year’s Hospital OQR
Program, rather than specifying different
timelines for hospitals with Medicare
acceptance dates before versus after
January 1 of the year prior to an affected
annual payment update. Although this
proposal alters the timeline for hospitals
to begin submitting data for the Hospital
OQR Program, it does not alter program
requirements. As a result, we do not
anticipate that this proposal will
influence burden.
(e) Impact of Proposed Updates to the
Previously Finalized ECE Policy
In section XIII.D.8. of this proposed
rule, we discuss our intent to align the
naming of this exception policy and
update 42 CFR 419.46(d) to reflect our
current ECE policies. We are also
clarifying the timing of CMS’ response
to ECE requests. Because we are not
seeking any new or additional
information in our ECE proposals, we
believe the updates will have no effect
on burden for hospitals.
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Federal Register / Vol. 82, No. 138 / Thursday, July 20, 2017 / Proposed Rules
(5) Estimated Impact of Proposals for the
CY 2021 Payment Determination and
Subsequent Years
In section XIII.B.4.c. of this proposed
rule, we are proposing to remove three
chart-abstracted measures (OP–1:
Median Time to Fibrinolysis, OP–4:
Aspirin at Arrival, and OP–20: Door to
Diagnostic Evaluation by a Qualified
Medical Professional) and one webbased measure (OP–25: Safe Surgery
Checklist Use) for the CY 2021 payment
determination and subsequent years. As
described in detail in section XVII.B. of
this proposed rule, we expect the
removal of one web-based measure and
three chart-abstracted measures to
reduce burden by $11.1 million and
304,810 hours for the CY 2021 payment
determination.
We refer readers to section XVII.B. of
this proposed rule (information
collection requirements) for a detailed
discussion of the burden of the
requirements for submitting data to the
Hospital OQR Program.
e. Effects of Proposed Requirements for
the ASCQR Program
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
1. Background
In section XIV. of this proposed rule,
we discuss our proposals to adopt
policies affecting the ASCQR Program.
For the CY 2017 payment
determination, of the 3,937 ASCs that
met eligibility requirements for the
ASCQR Program, 209 ASCs did not
meet the requirements to receive the full
annual payment update. We note that,
in the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79874), we
used the CY 2016 payment
determination numbers as a baseline,
and estimated that approximately 200
ASCs will not receive the full annual
payment update in CY 2018 due to
failure to meet the ASCQR Program
requirements (CY 2017 and CY 2018
payment determination information
were not yet available).
In this proposed rule, we are also
proposing: (1) To delay ASC–15a–e:
OAS CAHPS survey-based measures
beginning with the CY 2020 payment
determination (CY 2018 data collection);
(2) to expand the CMS online tool to
also allow for batch submission
beginning with data submitted during
CY 2018 and to make corresponding
revisions to the CFR; and, (3) to align
the naming of the Extraordinary
Circumstances Exceptions (ECE) policy
beginning with CY 2018 and to make
conforming changes to the CFR. As
discussed below, we do not expect these
proposals to influence our burden
estimates.
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2. Estimated Burden of ASCQR Program
Proposals Beginning With CY 2018
As described in section XIV.B.4. of
this proposed rule, we are proposing to
delay ASC–15a–e: Outpatient and
Ambulatory Surgery Consumer
Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-based
measures beginning with the CY 2020
payment determination (CY 2018 data
collection). As described in the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79864), the information
collection requirements associated with
the five OAS CAHPS Survey based
measures (ASC–15a, ASC–15b, ASC–
15c, ASC–15d, and ASC–15e) are
currently approved under OMB Control
Number 0938–1240. For this reason, we
did not provide an independent
estimate of the burden associated with
OAS CAHPS Survey administration for
the ASCQR Program in the CY 2017
OPPS/ASC final rule with comment
period (81 FR 79864). Similarly, our
proposal to delay reporting on these
measures does not affect our current
burden estimates.
For CY 2018, we are making two
additional proposals. First, in section
XIV.D.3.b. of this proposed rule, we are
proposing to expand the CMS online
tool to also allow for batch submission
beginning with data submitted during
CY 2018 and to make corresponding
revisions to the CFR. Second, in section
XIV.D.6. of this proposed rule, we
discuss our intent to align the naming
of this exception policy and update 42
CFR 416.310(d) to reflect our current
ECE policies. We are also clarifying the
timing of CMS’ response to ECE
requests. Because neither of these
proposals changes the reporting
requirements of the ASCQR Program nor
require ASCs to submit any new or
additional information, we believe the
updates will have no effect on burden
for ASCs.
3. Estimated Burden of ASCQR Program
Proposals for the CY 2019 Payment
Determination
In section XIV.B.3.b. of this proposed
rule, we are proposing to remove one
claims-based measure (ASC–5:
Prophylactic Intravenous (IV) Antibiotic
Timing 130) and two measures collected
via a CMS online data submission tool
130 As discussed in section XVII.C.4. of this
proposed rule, data for ASC–5 is submitted via CMS
claims using Quality Data Codes, which impose
only a nominal burden on providers because these
claims are already submitted for the purposes of
payment. We therefore estimate a nominal
reduction in burden associated with our proposal
to remove the ASC–5 measure from the ASCQR
Program measure set beginning with the CY 2019
payment determination.
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33721
(ASC–6: Safe Surgery Checklist Use and
ASC–7: ASC Facility Volume Data on
Selected ASC Surgical Procedures) from
the ASCQR Program measure set
beginning with the CY 2019 payment
determination. As discussed in section
XVII.C.4. of this proposed rule, we
estimate the proposals to remove ASC–
6 and ASC–7 from the ASCQR Program
measure set would reduce ASCs’ data
collection and submission burden by
approximately 657 hours (3,937 ASCs ×
0.167 hours per ASC) and $24,033 (657
hours × $36.58 per hour) per measure,
or a total burden reduction of 1,314 (657
hours × 2 measures) and $48,066 (1,314
hours × $36.58 per hour) across all
ASCs.
We are not proposing to add any
quality measures to the ASCQR measure
set for the CY 2020 payment
determination, and we do not believe
that the other measures we previously
adopted would cause any additional
ASCs to fail to meet the ASCQR
Program requirements. (We refer readers
to section XIV.B.5. of this proposed rule
for a list of these measures.) Therefore,
we do not believe that these proposals
would increase the number of ASCs that
do not receive a full annual payment
update for the CY 2020 payment
determination.
4. Estimated Burden of ASCQR Program
Proposals for the CY 2021 Payment
Determination
For the CY 2021 payment
determination and subsequent years, we
are making one new proposal. In section
XIV.B.6.a. of this proposed rule, we are
proposing to adopt one measure
collected via a CMS online data
submission tool, ASC–16: Toxic
Anterior Segment Syndrome. As
discussed in section XXI.C.5. of this
proposed rule, we estimate a data
collection and submission burden of
approximately 0.25 hours per ASC for
reporting data for the proposed ASC–16
measure. This results in a total
estimated burden of 984 hours (3,937
ASCs × 1 case per ASC × 0.25 hours per
case) and $36,004 (984 hours × $36.58
per hour) for the proposed ASC–16
measure across all ASCs.
5. Estimated Burden of ASCQR Program
Proposals for the CY 2022 Payment
Determination
In sections XIV.B.6.b. and c. of this
proposed rule, we are proposing to add
two new measures collected via claims
to the ASCQR program measure set for
the CY 2022 payment determination: (1)
ASC–17: Hospital Visits after
Orthopedic Ambulatory Surgical Center
Procedures; and (2) ASC–18: Hospital
Visits after Urology Ambulatory
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Surgical Center Procedures. As
discussed in sections XIV.B.6.b. and c.
of this proposed rule, data used to
assess performance under these
measures is collected via Part A and
Part B Medicare administrative claims
and Medicare enrollment data and
therefore does not require facilities to
report any additional data. Because
these measures do not require facilities
to submit any additional data, we do not
believe there is any additional burden
associated with these proposals.
We refer readers to the information
collection requirements in section
XVII.C. of this proposed rule for a
detailed discussion of the financial and
hourly burden of the ASCQR Program’s
current and proposed requirements.
We are inviting public comment on
the burden associated with these
proposals.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
B. Regulatory Flexibility Act (RFA)
Analysis
The RFA requires agencies to analyze
options for regulatory relief of small
entities, if a rule has a significant impact
on a substantial number of small
entities. For purposes of the RFA, we
estimate that most hospitals, ASCs and
CMHCs are small entities as that term is
used in the RFA. For purposes of the
RFA, most hospitals are considered
small businesses according to the Small
Business Administration’s size
standards with total revenues of $38.5
million or less in any single year or by
the hospital’s not-for-profit status. Most
ASCs and most CMHCs are considered
small businesses with total revenues of
$15 million or less in any single year.
For details, see the Small Business
Administration’s ‘‘Table of Small
Business Size Standards’’ at https://
www.sba.gov/content/table-smallbusiness-size-standards.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a metropolitan statistical area and has
100 or fewer beds. We estimate that this
proposed rule would increase payments
to small rural hospitals by less than 2
percent; therefore, it should not have a
significant impact on approximately 626
small rural hospitals.
The analysis above, together with the
remainder of this preamble, provides a
regulatory flexibility analysis and a
regulatory impact analysis.
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C. Unfunded Mandates Reform Act
Analysis
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. That threshold
level is currently approximately $148
million. This proposed rule does not
mandate any requirements for State,
local, or tribal governments, or for the
private sector.
D. Reducing Regulation and Controlling
Regulatory Costs
Executive Order 13771, titled
‘‘Reducing Regulation and Controlling
Regulatory Costs,’’ was issued on
January 30, 2017. It has been
determined that this proposed rule is a
transfer rule that does not impose more
than de minimis costs as described
above and thus is not a regulatory action
for the purposes of Executive Order
13771.
E. Conclusion
The changes we are proposing to
make in this proposed rule would affect
all classes of hospitals paid under the
OPPS and will affect both CMHCs and
ASCs. We estimate that most classes of
hospitals paid under the OPPS would
experience a modest increase or a
minimal decrease in payment for
services furnished under the OPPS in
CY 2018. Table 38 demonstrates the
estimated distributional impact of the
OPPS budget neutrality requirements
that would result in a 1.9 percent
increase in payments for all services
paid under the OPPS in CY 2018, after
considering all of the proposed changes
to APC reconfiguration and
recalibration, as well as the proposed
OPD fee schedule increase factor,
proposed wage index changes,
including the proposed frontier State
wage index adjustment, proposed
estimated payment for outliers, and
proposed changes to the pass-through
payment estimate. However, some
classes of providers that are paid under
the OPPS would experience more
significant gains or losses in OPPS
payments in CY 2018.
The proposed updates to the ASC
payment system for CY 2018 would
affect each of the approximately 5,500
ASCs currently approved for
participation in the Medicare program.
The effect on an individual ASC will
depend on its mix of patients, the
proportion of the ASC’s patients who
are Medicare beneficiaries, the degree to
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which the payments for the procedures
offered by the ASC are changed under
the ASC payment system, and the extent
to which the ASC provides a different
set of procedures in the coming year.
Table 39 demonstrates the estimated
distributional impact among ASC
surgical specialties of the proposed
MFP-adjusted CPI–U update factor of
1.9 percent for CY 2018.
XX. Federalism Analysis
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
costs on State and local governments,
preempts State law, or otherwise has
Federalism implications. We have
examined the OPPS and ASC provisions
included in this proposed rule in
accordance with Executive Order 13132,
Federalism, and have determined that
they will not have a substantial direct
effect on State, local or tribal
governments, preempt State law, or
otherwise have a Federalism
implication. As reflected in Table 38 of
this proposed rule, we estimate that
OPPS payments to governmental
hospitals (including State and local
governmental hospitals) would increase
by 1.9 percent under this proposed rule.
While we do not know the number of
ASCs or CMHCs with government
ownership, we anticipate that it is
small. The analyses we have provided
in this section of this proposed rule, in
conjunction with the remainder of this
document, demonstrate that this
proposed rule is consistent with the
regulatory philosophy and principles
identified in Executive Order 12866, the
RFA, and section 1102(b) of the Act.
This proposed rule would affect
payments to a substantial number of
small rural hospitals and a small
number of rural ASCs, as well as other
classes of hospitals, CMHCs, and ASCs,
and some effects may be significant.
List of Subjects
42 CFR Part 416
Health facilities, Health professions,
Medicare, Reporting and recordkeeping
requirements.
42 CFR Part 419
Hospitals, Medicare, Reporting and
recordkeeping requirements.
For reasons stated in the preamble of
this document, the Centers for Medicare
& Medicaid Services is proposing to
amend 42 CFR chapter IV as set forth
below:
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PART 416—AMBULATORY SURGICAL
SERVICES
§ 419.32 Calculation of prospective
payment rates for hospital outpatient
services.
1. The authority citation for part 416
continues to read as follows:
*
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
2. Section 416.310 is amended by
revising paragraphs (c)(1)(i) and (d) to
read as follows:
■
§ 416.310 Data collection and submission
requirements under the ASCQR Program.
*
*
*
*
(c) * * *
(1) * * *
(i) QualityNet account for web-based
measures. ASCs, and any agents
submitting data on an ASC’s behalf,
must maintain a QualityNet account in
order to submit quality measure data to
the QualityNet Web site for all webbased measures submitted via a CMS
online data submission tool. A
QualityNet security administrator is
necessary to set up such an account for
the purpose of submitting this
information.
*
*
*
*
*
(d) Extraordinary circumstances
exceptions. CMS may grant an
exception with respect to quality data
reporting requirements in the event of
extraordinary circumstances beyond the
control of the hospital, such as when an
act of nature affects an entire region or
if CMS determines that a systemic
problem with one of its data collection
systems directly affected the ability of
the hospitals to submit data. CMS may
grant an exception as follows:
(1) Upon request of the ASC. Specific
requirements for submission of a request
for an exception are available on the
QualityNet Web site; or
(2) At the discretion of CMS. CMS
may grant exceptions to ASCs that have
not requested them when CMS
determines that an extraordinary
circumstance has occurred.
*
*
*
*
*
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PART 419—PROSPECTIVE PAYMENT
SYSTEM FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES
3. The authority citation for part 419
continues to read as follows:
■
Authority: Secs. 1102, 1833(t), and 1871
of the Social Security Act (42 U.S.C. 1302,
1395l(t), and 1395hh).
4. Section 419.32 is amended by
adding paragraph (b)(1)(iv)(B)(9) to read
as follows:
■
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*
*
*
*
(b) * * *
(1) * * *
(iv) * * *
(B) * * *
(9) For calendar year 2018, a
multiproductivity adjustment (as
determined by CMS) and 0.75
percentage point.
*
*
*
*
*
■ 5. Section 419.46 is amended by—
■ a. Amending paragraph (a)(1) by
removing the phrase ‘‘Web site’’ and
adding in its place the term ‘‘website’’;
■ b. Revising paragraph (a)(3);
■ c. Amending paragraphs (b) and (c)(2)
by removing the phrase ‘‘Web site’’ and
adding in its place the term ‘‘website’’;
■ d. Revising paragraphs (c)(3)(i) and (ii)
and (d);
■ e. Adding paragraph (e)(3); and
■ f. Amending paragraphs (f)(1) and
(g)(2) by removing the phrase ‘‘Web
site’’ and adding in its place the term
‘‘website’’ wherever it appears.
The revisions and additions read as
follow:
§ 419.46 Participation, data submission,
and validation requirements under the
Hospital Outpatient Quality Reporting
(OQR) Program.
(a) * * *
(3) Complete and submit an online
participation form available at the
QualityNet.org Web site if this form has
not been previously completed, if a
hospital has previously withdrawn, or if
the hospital acquires a new CMS
Certification Number (CCN). For
Hospital OQR Program purposes,
hospitals that share the same CCN are
required to complete a single online
participation form. Once a hospital has
submitted a participation form, it is
considered to be an active Hospital OQR
Program participant until such time as
it submits a withdrawal form to CMS or
no longer has an effective Medicare
provider agreement. Hospitals must
submit the online participation form at
any time prior to registering on the
QualityNet Web site.
*
*
*
*
*
(c) * * *
(3) * * *
(i) Hospitals that did not participate
in the previous year’s Hospital OQR
Program must initially submit data
beginning with encounters occurring
during the first calendar quarter of the
year prior to the affected annual
payment update.
(ii) Hospitals that did not participate
in the previous year’s Hospital OQR
Program must follow data submission
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33723
deadlines as specified in paragraph
(c)(2) of this section.
*
*
*
*
*
(d) Exception. CMS may grant an
exception to one or more data
submission deadlines and requirements
in the event of extraordinary
circumstances beyond the control of the
hospital, such as when an act of nature
affects an entire region or locale or a
systemic problem with one of CMS’ data
collection systems directly or indirectly
affects data submission. CMS may grant
an exception as follows:
(1) Upon request by the hospital.
Specific requirements for submission of
a request for an exception are available
on the QualityNet Web site.
(2) At the discretion of CMS. CMS
may grant exceptions to hospitals that
have not requested them when CMS
determines that an extraordinary
circumstance has occurred.
(e) * * *
(3) CMS will select a random sample
of 450 hospitals for validation purposes,
and will select an additional 50
hospitals for validation purposes based
on the following criteria:
(i) The hospital fails the validation
requirement that applies to the previous
year’s payment determination; or
(ii) The hospital has an outlier value
for a measure based on the data it
submits. An ‘‘outlier value’’ is a
measure value that is greater than 5
standard deviations from the mean of
the measure values for other hospitals,
and indicates a poor score.
*
*
*
*
*
■ 6. Section 419.71 is added to read as
follows:
§ 419.71 Payment reduction for certain Xray imaging services.
(a) Definition. For purposes of this
section, the term ‘‘computed
radiography technology’’ means
cassette-based imaging which utilizes an
imaging plate to create the image
involved.
(b) Payment reduction for film X-ray
imaging services. For an imaging service
that is an X-ray taken using film and
that is furnished during 2017 or a
subsequent year, the payment amount
for such service (including the X-ray
component of a packaged service) is
reduced by 20 percent.
(c) Payment reduction for computed
radiography imaging services. The
payment amount for an imaging service
that is an X-ray taken using computed
radiography technology (including the
X-ray component of a packaged service)
is reduced by—
(1) 7 percent, for such services
furnished in CY 2018, 2019, 2020, 2021,
or 2022.
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(2) 10 percent, for such services
furnished in CY 2023 or a subsequent
calendar year.
(d) Application without regard to
budget neutrality. The reductions taken
under this section are not considered
adjustments under section 1833(t)(2)(E)
of the Act and are not implemented in
a budget neutral manner.
Dated: June 28, 2017.
Seema Verma,
Administrator, Centers for Medicare and
Medicaid Services.
Dated: June 30, 2017.
Thomas E. Price,
Secretary, Department of Health and Human
Services.
[FR Doc. 2017–14883 Filed 7–13–17; 4:15 pm]
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Agencies
[Federal Register Volume 82, Number 138 (Thursday, July 20, 2017)]
[Proposed Rules]
[Pages 33558-33724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14883]
[[Page 33557]]
Vol. 82
Thursday,
No. 138
July 20, 2017
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 416 and 419
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Proposed Rule
Federal Register / Vol. 82 , No. 138 / Thursday, July 20, 2017 /
Proposed Rules
[[Page 33558]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 416 and 419
[CMS-1678-P]
RIN 0938-AT03
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would revise the Medicare hospital
outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for CY 2018 to
implement changes arising from our continuing experience with these
systems and certain provisions under the 21st Century Cures Act (Pub.
L. 114-255). In this proposed rule, we describe the proposed changes to
the amounts and factors used to determine the payment rates for
Medicare services paid under the OPPS and those paid under the ASC
payment system. In addition, this proposed rule would update and refine
the requirements for the Hospital Outpatient Quality Reporting (OQR)
Program and the ASC Quality Reporting (ASCQR) Program.
DATES: Comment period: To be assured consideration, comments on this
proposed rule must be received at one of the addresses provided in the
ADDRESSES section no later than 5 p.m. EST on September 11, 2017.
ADDRESSES: In commenting, please refer to file code CMS-1678-P when
commenting on the issues in this proposed rule. Because of staff and
resource limitations, we cannot accept comments by facsimile (FAX)
transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to https://www.regulations.gov.
Follow the instructions under the ``submit a comment'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1678-P, P.O. Box 8013, Baltimore, MD
21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1678-P, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Room 445-G, Hubert H. Humphrey Building, 200
Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal Government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call the telephone number (410) 786-7195 in advance to schedule
your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: (We note that public comments must be
submitted through one of the four channels outlined in the ADDRESSES
section above. Comments may not be submitted via email.)
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact
the HOP Panel mailbox at APCPanel@cms.hhs.gov.
Ambulatory Surgical Center (ASC) Payment System, contact Elisabeth
Daniel at 410-786-0237 or via email Elisabeth.Daniel1@cms.hhs.gov.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia at 410-786-7236 or via email Anita.Bhatia@cms.hhs.gov.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Vinitha Meyyur at 410-786-8819 or via email
Vinitha.Meyyur@cms.hhs.gov.
Blood and Blood Products, contact Josh McFeeters at 410-786-9732 or
via email Joshua.McFeeters@cms.hhs.gov.
Cancer Hospital Payments, contact Scott Talaga at 410-786-4142 or
via email Scott.Talaga@cms.hhs.gov.
Care Management Services, contact Scott Talaga at 410-786-4142 or
via email Scott.Talaga@cms.hhs.gov.
CPT Codes, contact Marjorie Baldo at 410-786-4617 or via email
Marjorie.Baldo@cms.hhs.gov.
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver at 410-786-6719 or via email Chuck.Braver@cms.hhs.gov.
Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
contact Twi Jackson at 410-786-1159 or via email
Twi.Jackson@cms.hhs.gov.
Comprehensive APCs (C-APCs), contact Lela Strong at 410-786-3213 or
via email Lela.Strong@cms.hhs.gov.
Hospital Outpatient Quality Reporting (OQR) Program Administration,
Validation, and Reconsideration Issues, contact Anita Bhatia at 410-
786-7236 or via email Anita.Bhatia@cms.hhs.gov.
Hospital Outpatient Quality Reporting (OQR) Program Measures,
contact Vinitha Meyyur at 410-786-8819 or via email
Vinitha.Meyyur@cms.hhs.gov.
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Twi Jackson at 410-786-1159 or via email
Twi.Jackson@cms.hhs.gov.
Inpatient Only (IPO) Procedures List, contact Lela Strong at 410-
786-3213 or via email Lela.Strong@cms.hhs.gov.
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga at
410-786-4142 or via email Scott.Talaga@cms.hhs.gov.
No Cost/Full Credit and Partial Credit Devices, contact Twi Jackson
at 410-786-1159 or via email Twi.Jackson@cms.hhs.gov.
OPPS Brachytherapy, contact Scott Talaga at 410-786-4142 or via
email Scott.Talaga@cms.hhs.gov.
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
Payments, and Wage Index), contact Erick Chuang
[[Page 33559]]
at 410-786-1816 or via email Erick.Chuang@cms.hhs.gov or contact
Elisabeth Daniel at 410-786-0237 or via email
Elisabeth.Daniel1@cms.hhs.gov.
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Elisabeth Daniel at 410-786-0237 or via email
Elisabeth.Daniel1@cms.hhs.gov.
OPPS New Technology Procedures/Services, contact the New Technology
APC email at NewTechAPCapplications@cms.hhs.gov.
OPPS Exceptions to the 2 Times Rule, contact Marjorie Baldo at 410-
786-4617 or via email Marjorie.Baldo@cms.hhs.gov.
OPPS Packaged Items/Services, contact Elisabeth Daniel at 410-786-
0237 or via email Elisabeth.Daniel1@cms.hhs.gov.
OPPS Pass-Through Devices, contact the Device Pass-Through email at
DevicePTapplications@cms.hhs.gov.
OPPS Status Indicators (SI) and Comment Indicators (CI), contact
Marina Kushnirova at 410-786-2682 or via email
Marina.Kushnirova@cms.hhs.gov.
Partial Hospitalization Program (PHP) and Community Mental Health
Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
PHPPaymentPolicy@cms.hhs.gov.
Potential Revisions to the Laboratory Date of Service Policy,
contact Rasheeda Johnson at 410-786-3434 or via email
Rasheeda.Johnson1@cms.hhs.gov or Susan Janeczko at 410-786-4529 or via
email Susan.Janeczko@cms.hhs.gov.
Rural Hospital Payments, contact Josh McFeeters at 410-786-9732 or
via email Joshua.McFeeters@cms.hhs.gov.
Skin Substitutes, contact Josh McFeeters at 410-786-9732 or via
email Joshua.McFeeters@cms.hhs.gov.
All Other Issues Related to Hospital Outpatient and Ambulatory
Surgical Center Payments Not Previously Identified, contact Lela Strong
at 410-786-3213 or via email Lela.Strong@cms.hhs.gov.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: https://www.regulations.gov/. Follow the search instructions on that Web site
to view public comments.
Comments received timely will also be available for public
inspection, generally beginning approximately 3 weeks after publication
of the rule, at the headquarters of the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday
through Friday of each week from 8:30 a.m. to 4:00 p.m. EST. To
schedule an appointment to view public comments, phone 1-800-743-3951.
Electronic Access
This Federal Register document is also available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the Internet at https://www.gpo.gov/fdsys/.
Addenda Available Only Through the Internet on the CMS Web Site
In the past, a majority of the Addenda referred to in our OPPS/ASC
proposed and final rules were published in the Federal Register as part
of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC
proposed rule, all of the Addenda no longer appear in the Federal
Register as part of the annual OPPS/ASC proposed and final rules to
decrease administrative burden and reduce costs associated with
publishing lengthy tables. Instead, these Addenda are published and
available only on the CMS Web site. The Addenda relating to the OPPS
are available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/. The Addenda relating
to the ASC payment system are available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
Alphabetical List of Acronyms Appearing in This Federal Register
Document
AHA American Hospital Association
AMA American Medical Association
AMI Acute myocardial infarction
APC Ambulatory Payment Classification
API Application programming interface
APU Annual payment update
ASC Ambulatory surgical center
ASCQR Ambulatory Surgical Center Quality Reporting
ASP Average sales price
AUC Appropriate use criteria
AWP Average wholesale price
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Balanced Budget Refinement Act of 1999, Public
Law 106-113
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, Public Law 106-554
BLS Bureau of Labor Statistics
CAH Critical access hospital
CAHPS Consumer Assessment of Healthcare Providers and Systems
CAP Competitive Acquisition Program
C-APC Comprehensive Ambulatory Payment Classification
CASPER Certification and Survey Provider Enhanced Reporting
CAUTI Catheter-associated urinary tract infection
CBSA Core-Based Statistical Area
CCM Chronic care management
CCN CMS Certification Number
CCR Cost-to-charge ratio
CDC Centers for Disease Control and Prevention
CED Coverage with Evidence Development
CERT Comprehensive Error Rate Testing
CFR Code of Federal Regulations
CI Comment indicator
CLABSI Central Line [Catheter] Associated Blood Stream Infection
CLFS Clinical Laboratory Fee Schedule
CMHC Community mental health center
CMS Centers for Medicare & Medicaid Services
CoP Condition of participation
CPI-U Consumer Price Index for All Urban Consumers
CPT Current Procedural Terminology (copyrighted by the American
Medical Association)
CR Change request
CRC Colorectal cancer
CSAC Consensus Standards Approval Committee
CT Computed tomography
CV Coefficient of variation
CY Calendar year
DFO Designated Federal Official
DME Durable medical equipment
DMEPOS Durable Medical Equipment, Prosthetic, Orthotics, and
Supplies
DOS Date of service
DRA Deficit Reduction Act of 2005, Public Law 109-171
DSH Disproportionate share hospital
EACH Essential access community hospital
EAM Extended assessment and management
ECD Expanded criteria donor
EBRT External beam radiotherapy
ECG Electrocardiogram
ED Emergency department
EDTC Emergency department transfer communication
EHR Electronic health record
E/M Evaluation and management
ESRD End-stage renal disease
ESRD QIP End-Stage Renal Disease Quality Improvement Program
FACA Federal Advisory Committee Act, Public Law 92-463
FDA Food and Drug Administration
FFS [Medicare] Fee-for-service
FY Fiscal year
GAO Government Accountability Office
GI Gastrointestinal
GME Graduate medical education
HAI Healthcare-associated infection
HCAHPS Hospital Consumer Assessment of Healthcare Providers and
Systems
[[Page 33560]]
HCERA Health Care and Education Reconciliation Act of 2010, Public
Law 111-152
HCP Health care personnel
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HCUP Healthcare Cost and Utilization Project
HEU Highly enriched uranium
HH QRP Home Health Quality Reporting Program
HHS Department of Health and Human Services
HIE Health information exchange
HIPAA Health Insurance Portability and Accountability Act of 1996,
Public Law 104-191
HOP Hospital Outpatient Payment [Panel]
HOPD Hospital outpatient department
HOP QDRP Hospital Outpatient Quality Data Reporting Program
HPMS Health Plan Management System
IBD Inflammatory bowel disease
ICC Interclass correlation coefficient
ICD Implantable cardioverter defibrillator
ICD-9-CM International Classification of Diseases, Ninth Revision,
Clinical Modification
ICD-10 International Classification of Diseases, Tenth Revision
ICH In-center hemodialysis
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IGI IHS Global Insight, Inc.
IHS Indian Health Service
I/OCE Integrated Outpatient Code Editor
IOL Intraocular lens
IORT Intraoperative radiation treatment
IPFQR Inpatient Psychiatric Facility Quality Reporting
IPPS [Hospital] Inpatient Prospective Payment System
IQR [Hospital] Inpatient Quality Reporting
IRF Inpatient rehabilitation facility
IRF QRP Inpatient Rehabilitation Facility Quality Reporting Program
IT Information technology
LCD Local coverage determination
LDR Low dose rate
LTCH Long-term care hospital
LTCHQR Long-Term Care Hospital Quality Reporting
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015, Public
Law 114-10
MAP Measure Application Partnership
MDH Medicare-dependent, small rural hospital
MedPAC Medicare Payment Advisory Commission
MEG Magnetoencephalography
MFP Multifactor productivity
MGCRB Medicare Geographic Classification Review Board
MIEA-TRHCA Medicare Improvements and Extension Act under Division B,
Title I of the Tax Relief Health Care Act of 2006, Public Law 109-
432
MIPPA Medicare Improvements for Patients and Providers Act of 2008,
Public Law 110-275
MLR Medical loss ratio
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Public Law 108-173
MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public
Law 110-173
MPFS Medicare Physician Fee Schedule
MR Medical review
MRA Magnetic resonance angiography
MRgFUS Magnetic Resonance Image Guided Focused Ultrasound
MRI Magnetic resonance imaging
MRSA Methicillin-Resistant Staphylococcus Aures
MS-DRG Medicare severity diagnosis-related group
MSIS Medicaid Statistical Information System
MUC Measure under consideration
NCCI National Correct Coding Initiative
NEMA National Electrical Manufacturers Association
NHSN National Healthcare Safety Network
NOTA National Organ and Transplantation Act
NOS Not otherwise specified
NPI National Provider Identifier
NQF National Quality Forum
NQS National Quality Strategy
NTIOL New technology intraocular lens
NUBC National Uniform Billing Committee
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act of 1996, Public Law 99-509
O/E Observed to expected event
OIG [HHS] Office of the Inspector General
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health Information
Technology
OPD [Hospital] Outpatient Department
OPPS [Hospital] Outpatient Prospective Payment System
OPSF Outpatient Provider-Specific File
OQR [Hospital] Outpatient Quality Reporting
OT Occupational therapy
PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93
PCHQR PPS-Exempt Cancer Hospital Quality Reporting
PCR Payment-to-cost ratio
PDC Per day cost
PDE Prescription Drug Event
PE Practice expense
PEPPER Program Evaluation Payment Patterns Electronic Report
PHP Partial hospitalization program
PHSA Public Health Service Act, Public Law 96-88
PN Pneumonia
POS Place of service
PPI Producer Price Index
PPS Prospective payment system
PQRI Physician Quality Reporting Initiative
PQRS Physician Quality Reporting System
QDC Quality data code
QIO Quality Improvement Organization
RFA Regulatory Flexibility Act
RHQDAPU Reporting Hospital Quality Data for Annual Payment Update
RTI Research Triangle Institute, International
RVU Relative value unit
SAD Self-administered drug
SAMS Secure Access Management Services
SCH Sole community hospital
SCOD Specified covered outpatient drugs
SES Socioeconomic status
SI Status indicator
SIA Systems Improvement Agreement
SIR Standardized infection ratio
SNF Skilled nursing facility
SRS Stereotactic radiosurgery
SRTR Scientific Registry of Transplant Recipients
SSA Social Security Administration
SSI Surgical site infection
TEP Technical Expert Panel
TOPs Transitional Outpatient Payments
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
WAC Wholesale acquisition cost
Table of Contents
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
2. Summary of the Major Provisions
3. Summary of Costs and Benefits
B. Legislative and Regulatory Authority for the Hospital OPPS
C. Excluded OPPS Services and Hospitals
D. Prior Rulemaking
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel
or the Panel)
1. Authority of the Panel
2. Establishment of the Panel
3. Panel Meetings and Organizational Structure
F. Public Comments Received in Response to CY 2017 OPPS/ASC
Final Rule With Comment Period
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
2. Proposed Data Development Process and Calculation of Costs
Used for Ratesetting
a. Proposed Calculation of Single Procedure APC Criteria-Based
Costs
(1) Blood and Blood Products
(2) Brachytherapy Sources
b. Proposed Comprehensive APCs (C-APCs) for CY 2018
(1) Background
(2) Proposed Additional C-APCs for CY 2018
(3) Brachytherapy Insertion Procedures
(4) C-APC 5627 (Level 7 Radiation Stereotactic Radiosurgery
(SRS))
(5) Proposed Complexity Adjustment for Blue Light Cystoscopy
Procedures
(6) Analysis of C-APC Packaging under the OPPS
c. Proposed Calculation of Composite APC Criteria-Based Costs
(1) Mental Health Services Composite APC
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006,
8007, and 8008)
3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
b. CY 2018 Drug Administration Packaging Proposal
(1) Background of Drug Administration Packaging Policy
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(2) Proposed Packaging of Level 1 and Level 2 Drug
Administration Services
(3) Comment Solicitation Regarding Unconditionally Packaging
Drug Administration Add-On Codes
c. Analysis of Packaging Services in the OPPS
d. Comment Solicitation on Packaging of Items and Services Under
the OPPS
4. Proposed Calculation of OPPS Scaled Payment Weights
B. Proposed Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default CCRs
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs)
and Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act
F. Proposed Payment Adjustment for Certain Cancer Hospitals for
CY 2018
1. Background
2. Proposed Policy for CY 2018
G. Proposed Hospital Outpatient Outlier Payments
1. Background
2. Proposed Outlier Calculation for CY 2018
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
1. Background
2. Proposed OPPS Copayment Policy
3. Proposed Calculation of an Adjusted Copayment Amount for an
APC Group
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New CPT and Level II HCPCS Codes
1. Proposed Treatment of New HCPCS Codes That Were Effective
April 1, 2017 for Which We Are Soliciting Public Comments in This CY
2018 OPPS/ASC Proposed Rule
2. Proposed Treatment of New HCPCS Codes Effective July 1, 2017
for Which We Are Soliciting Public Comments in This CY 2018 OPPS/ASC
Proposed Rule
3. Proposed Process for New Level II HCPCS Codes That Will Be
Effective October 1, 2017 and January 1, 2018 for Which We Will Be
Soliciting Public Comments in the CY 2018 OPPS/ASC Final Rule With
Comment Period
4. Proposed Treatment of New and Revised CY 2018 Category I and
III CPT Codes That Will Be Effective January 1, 2018 for Which We
Are Soliciting Public Comments in This CY 2018 OPPS/ASC Proposed
Rule
5. Proposed Care Management Coding Changes Effective January 1,
2018 (APCs 5821 and 5822)
B. Proposed OPPS Changes--Variations Within APCs
1. Background
2. Application of the 2 Times Rule
3. Proposed APC Exceptions to the 2 Times Rule
C. Proposed New Technology APCs
1. Background
2. Proposed Revised and Additional New Technology APC Groups
3. Proposed Procedures Assigned to New Technology APC Groups for
CY 2018
a. Overall Proposal
b. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS)
(APCs 1537, 5114, and 5415)
c. Retinal Prosthesis Implant Procedure
d. Pathogen Test for Platelets
D. Proposed OPPS APC-Specific Policies
1. Blood-Driven Hematopoietic Cell Harvesting
2. Radiology and Imaging Procedures and Services
a. Imaging APCs
b. Non-Ophthalmic Fluorescent Vascular Angiography (APC 5524)
3. Comment Solicitation on Intraocular Procedure APCs
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payments for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
b. Expiration of Transitional Pass-Through Payment for Certain
Devices
2. New Device Pass-Through Applications
a. Background
b. Applications Received for Device Pass-Through Payment for CY
2018
B. Proposed Device-Intensive Procedures
1. Background
2. HCPCS Code-Level Device-Intensive Determination
3. Changes to the Device Edit Policy for CY 2017 and Subsequent
Years
4. Proposed Adjustment to OPPS Payment for No Cost/Full Credit
and Partial Credit Devices
a. Background
b. Policy for CY 2017 and Subsequent Years
5. Proposed Payment Policy for Low-Volume Device-Intensive
Procedures
V. Proposed OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
2. 3-Year Transitional Pass-Through Payment Period for All Pass-
Through Drugs, Biologicals, and Radiopharmaceuticals and Expiration
of Pass-Through Status
3. Proposed Drugs and Biologicals With Expiring Pass-Through
Payment Status in CY 2017
4. Proposed Drugs, Biologicals, and Radiopharmaceuticals With
New or Continuing Pass-Through Status in CY 2018
5. Proposed Provisions for Reducing Transitional Pass-Through
Payments for Policy-Packaged Drugs, Biologicals, and
Radiopharmaceuticals to Offset Costs Packaged Into APC Groups
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
1. Proposed Criteria for Packaging Payment for Drugs,
Biologicals, and Radiopharmaceuticals
a. Proposed Packaging Threshold
b. Proposed Packaging of Payment for HCPCS Codes That Describe
Certain Drugs, Certain Biologicals, and Therapeutic
Radiopharmaceuticals Under the Cost Threshold (``Threshold-Packaged
Policy'')
c. Policy Packaged Drugs, Biologicals, and Radiopharmaceuticals
d. Proposed High Cost/Low Cost Threshold for Packaged Skin
Substitutes
e. Proposed Packaging Determination for HCPCS Codes That
Describe the Same Drug or Biological But Different Dosages
2. Proposed Payment for Drugs and Biologicals Without Pass-
Through Status That Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable and Packaged Drugs and Biologicals
b. Proposed CY 2018 Payment Policy
c. Biosimilar Biological Products
3. Proposed Payment Policy for Therapeutic Radiopharmaceuticals
4. Proposed Payment Adjustment Policy for Radioisotopes Derived
From Non-Highly Enriched Uranium Sources
5. Proposed Payment for Blood Clotting Factors
6. Proposed Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital
Claims Data
7. Alternative Payment Methodology for Drugs Purchased Under the
340B Drug Discount Program
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Estimate of Pass-Through Spending
VII. Proposed OPPS Payment for Hospital Outpatient Visits and
Critical Care Services
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
B. Proposed PHP APC Update for CY 2018
1. Proposed PHP APC Geometric Mean Per Diem Costs
2. Development of the Proposed PHP APC Geometric Mean Per Diem
Costs
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR
Adjustments
b. Hospital-Based PHP Data Preparation: Data Trims and
Exclusions
3. PHP Service Utilization Updates
4. Minimum Service Requirement: 20 Hours Per Week
C. Proposed Outlier Policy for CMHCs
IX. Proposed Procedures That Would Be Paid Only as Inpatient
Procedures
A. Background
B. Proposed Changes to the Inpatient Only (IPO) List
C. Solicitation of Public Comments on the Possible Removal of
Partial Hip Arthroplasty (PHA) and Total Hip Arthroplasty (THA)
Procedures From the IPO List
1. Background
2. Topics and Questions for Public Comments
X. Proposed Nonrecurring Policy Changes
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A. Payment for Certain Items and Services Furnished by Certain
Off-Campus Departments of a Provider
1. Background
2. Summary of Public Comments and Our Responses Regarding
Expansion of Services by Excepted Off-Campus Hospital Outpatient
Departments
3. Implementation of Section 16002 of the 21st Century Cures Act
(Treatment of Cancer Hospitals in Off Campus Outpatient Department
of a Provider Policy)
B. Medicare Site-of-Service Price Transparency (Section 4011 of
the 21st Century Cures Act)
C. Appropriate Use Criteria for Advanced Diagnostic Imaging
Services
D. Enforcement Instruction for the Supervision of Outpatient
Therapeutic Services in Critical Access Hospitals (CAHs) and Certain
Small Rural Hospitals
E. Payment Changes for Film X-Rays Services and Proposed Payment
Changes for X-Rays Taken Using Computed Radiography Technology
F. Potential Revisions to the Laboratory Date of Service Policy
1. Background on the Medicare Part B Laboratory Date of Service
Policy
2. Current Medicare DOS Policy (``14-Day Rule'')
3. Billing and Payment for Laboratory Services Under the OPPS
4. ADLTs Under the New Private Payor Rate-Based CLFS
5. Potential Revisions to the Laboratory DOS Policy
XI. Proposed CY 2018 OPPS Payment Status and Comment Indicators
A. Proposed CY 2018 OPPS Payment Status Indicator Definitions
B. Proposed CY 2018 Comment Indicator Definitions
XII. Proposed Updates to the Ambulatory Surgical Center (ASC)
Payment System
A. Background
1. Legislative History, Statutory Authority, and Prior
Rulemaking for the ASC Payment System
2. Policies Governing Changes to the Lists of Codes and Payment
Rates for ASC Covered Surgical Procedures and Covered Ancillary
Services
3. Definition of ASC Covered Surgical Procedures
B. Proposed Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised
Category I and Category III CPT Codes and Level II HCPCS Codes
2. Proposed Treatment of New and Revised Level II HCPCS Codes
Implemented in April 2017 for Which We Are Soliciting Public
Comments in This Proposed Rule
3. Proposed Treatment of New and Revised Level II HCPCS Codes
Implemented in July 2017 for Which We Are Soliciting Public Comments
in This Proposed Rule
4. Process for New and Revised Level II HCPCS Codes That Will Be
Effective October 1, 2017 and January 1, 2018 for Which We Will
Solicit Public Comments in the CY 2018 OPPS/ASC Final Rule With
Comment Period
5. Process for Recognizing New and Revised Category I and
Category III CPT Codes That Will Be Effective January 1, 2018 for
Which We Will Be Soliciting Public Comments in the CY 2018 OPPS/ASC
Final Rule With Comment Period
C. Proposed Update to the List of ASC Covered Surgical
Procedures and Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
(2) Proposed Changes for CY 2018 to Covered Surgical Procedures
Designated as Office-Based
b. Proposed ASC Covered Surgical Procedures Designated as
Device-Intensive
(1) Background
(2) Proposed Changes to List of ASC Covered Surgical Procedures
Designated as Device-Intensive for CY 2018
c. Proposed Adjustment to ASC Payments for No Cost/Full Credit
and Partial Credit Devices
d. Proposed Additions to the List of ASC Covered Surgical
Procedures
e. Comment Solicitation on Adding Additional Procedures to the
ASC Covered Procedures List
2. Covered Ancillary Services
D. Proposed ASC Payment for Covered Surgical Procedures and
Covered Ancillary Services
1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
b. Proposed Update to ASC Covered Surgical Procedure Payment
Rates for CY 2018
2. Proposed Payment for Covered Ancillary Services
a. Background
b. Proposed Payment for Covered Ancillary Services for CY 2018
E. New Technology Intraocular Lenses (NTIOLs)
1. NTIOL Application Cycle
2. Requests to Establish New NTIOL Classes for CY 2018
3. Payment Adjustment
F. Proposed ASC Payment and Comment Indicators
1. Background
2. Proposed ASC Payment and Comment Indicators
G. Proposed Calculation of the ASC Conversion Factor and the
Proposed ASC Payment Rates
1. Background
2. Proposed Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2018 and
Future Years
b. Updating the ASC Conversion Factor
3. Comment Solicitation on ASC Payment System Reform
4. Display of CY 2018 ASC Payment Rates
XIII. Requirements for the Hospital Outpatient Quality Reporting
(OQR) Program
A. Background
1. Overview
2. Statutory History of the Hospital OQR Program
B. Hospital OQR Program Quality Measures
1. Considerations in the Selection of Hospital OQR Program
Quality Measures
2. Accounting for Social Risk Factors in the Hospital OQR
Program
3. Retention of Hospital OQR Program Measures Adopted in
Previous Payment Determinations
4. Removal of Quality Measures From the Hospital OQR Program
Measure Set
a. Considerations in Removing Quality Measures From the Hospital
OQR Program
b. Criteria for Removal of ``Topped-Out'' Measures
c. Measures Proposed for Removal From the Hospital OQR Program
5. Proposal To Make Reporting of OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures Voluntary for CY 2018
Reporting and Subsequent Years
6. Previously Adopted Hospital OQR Program Measure Set for the
CY 2020 Payment Determination and Subsequent Years
7. Summary of the Hospital OQR Program Measure Set Proposed for
the CY 2020 and CY 2021 Payment Determination and Subsequent Years
8. Hospital OQR Program Measures and Topics for Future
Consideration
a. Future Measure Topics
b. Possible Future Adoption of the Electronic Version of OP-2:
Fibrinolytic Therapy Received Within 30 Minutes of Emergency
Department Arrival
9. Maintenance of Technical Specifications for Quality Measures
10. Public Display of Quality Measures
a. Background
b. Public Reporting of OP-18c: Median Time From Emergency
Department Arrival to Emergency Department Departure for Discharged
Emergency Department Patients--Psychiatric/Mental Health Patients
C. Administrative Requirements
1. QualityNet Account and Security Administrator
2. Requirements Regarding Participation Status
a. Background
b. Proposed Changes to the NOP Submission Deadline
D. Form, Manner, and Timing of Data Submitted for the Hospital
OQR Program
1. Hospital OQR Program Annual Payment Determinations
2. Requirements for Chart-Abstracted Measures Where Patient-
Level Data Are Submitted Directly to CMS for the CY 2021 Payment
Determination and Subsequent Years
3. Claims-Based Measure Data Requirements for the CY 2020
Payment Determination and Subsequent Years
4. Data Submission Requirements for OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures for the CY 2020 Payment
Determination and Subsequent Years
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5. Data Submission Requirements for Previously Finalized
Measures for Data Submitted via a Web-based Tool for the CY 2020
Payment Determination and Subsequent Years
6. Population and Sampling Data Requirements for the CY 2020
Payment Determination and Subsequent Years
7. Hospital OQR Program Validation Requirements for Chart-
Abstracted Measure Data Submitted Directly to CMS for the CY 2020
Payment Determination and Subsequent Years
a. Clarification
b. Proposed Codification
c. Proposed Modifications to the Educational Review Process for
Chart-Abstracted Measures Validation
8. Extraordinary Circumstances Exception Process for the CY 2020
Payment Determination and Subsequent Years
a. ECE Policy Nomenclature
b. Timeline for CMS Response to ECE Requests
9. Hospital OQR Program Reconsideration and Appeals Procedures
for the CY 2020 Payment Determination and Subsequent Years--
Clarification
E. Payment Reduction for Hospitals That Fail To Meet the
Hospital Outpatient Quality Reporting (OQR) Program Requirements for
the CY 2017 Payment Determination
1. Background
2. Reporting Ratio Application and Associated Adjustment Policy
for CY 2017
XIV. Requirements for the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
A. Background
1. Overview
2. Statutory History of the ASCQR Program
3. Regulatory History of the ASCQR Program
B. ASCQR Program Quality Measures
1. Considerations in the Selection of ASCQR Program Quality
Measures
2. Accounting for Social Risk Factors in the ASCQR Program
3. Policies for Retention and Removal of Quality Measures From
the ASCQR Program
a. Retention of Previously Adopted ASCQR Program Measures
b. Proposed Measure Removal
4. Proposal To Delay ASC-15a-e: Outpatient and Ambulatory
Surgery Consumer Assessment of Healthcare Providers and Systems (OAS
CAHPS) Survey-Based Measures Beginning With the 2020 Payment
Determination
5. ASCQR Program Quality Measures Adopted in Previous Rulemaking
6. Proposed ASCQR Program Quality Measures for the CY 2021 and
CY 2022 Payment Determinations and Subsequent Years
a. Proposed Adoption of ASC-16: Toxic Anterior Segment Syndrome
Beginning With the CY 2021 Payment Determination
b. Proposed Adoption of ASC-17: Hospital Visits After Orthopedic
Ambulatory Surgical Center Procedures Beginning With the CY 2022
Payment Determination
c. Proposed Adoption of ASC-18: Hospital Visits After Urology
Ambulatory Surgical Center Procedures Beginning With the CY 2022
Payment Determination
d. Summary of Previously Adopted Measurers and Newly Proposed
ASCQR Program Measures for the CY 2022 Payment Determination and
Subsequent Years
7. ASCQR Program Measures and Topics for Future Consideration
8. Maintenance of Technical Specifications for Quality Measures
9. Public Reporting of ASCQR Program Data
C. Administrative Requirements
1. Requirements Regarding QualityNet Account and Security
Administrator
2. Requirements Regarding Participation Status
D. Form, Manner, and Timing of Data Submitted for the ASCQR
Program
1. Requirements Regarding Data Processing and Collection Periods
for Claims-Based Measures Using Quality Data Codes (QDCs)
2. Minimum Threshold, Minimum Case Volume, and Data Completeness
for Claims-Based Measures Using QDCs
3. Requirements for Data Submitted via an Online Data Submission
Tool
a. Requirements for Data Submitted via a Non-CMS Online Data
Submission Tool
b. Proposals Regarding Requirements for Data Submitted via a CMS
Online Data Submission Tool
4. Requirements for Claims-Based Measure Data
5. Requirements for Data Submission for ASC-15a-e: Outpatient
and Ambulatory Surgery Consumer Assessment of Healthcare Providers
and Systems (OAS CAHPS) Survey-Based Measures
6. Extraordinary Circumstances Extensions or Exemptions for the
CY 2019 Payment Determination and Subsequent Years
a. Background
b. ECE Policy Nomenclature
c. Timeline for CMS Response to ECE Requests
7. ASCQR Program Reconsideration Procedures
E. Payment Reduction for ASCs That Fail To Meet the ASCQR
Program Requirements
1. Statutory Background
2. Reduction to the ASC Payment Rates for ASCs That Fail To Meet
the ASCQR Program Requirements for a Payment Determination Year
XV. Request for Information and Public Comments
A. Request for Information on CMS Flexibilities and Efficiencies
B. Eliminating Inappropriate Medicare Payment Differentials for
Similar Services in the Inpatient and Outpatient Settings
C. Request for Information Regarding Physician-Owned Hospitals
XVI. Files Available to the Public via the Internet
XVII. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
B. ICRs for the Hospital OQR Program
C. ICRs for the ASCQR Program
XVIII. Response to Comments
XIX. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
2. Statement of Need
3. Overall Impacts for the Proposed OPPS and ASC Payment
Provisions
4. Regulatory Review Costs
5. Detailed Economic Analyses
a. Estimated Effects of Proposed OPPS Changes in This Proposed
Rule
(1) Limitations of Our Analysis
(2) Estimated Effects of Proposed OPPS Changes to Part B Drug
Payment on 340B Eligible Hospitals Paid Under the OPPS
(3) Estimated Effects of Proposed OPPS Changes on Hospitals
(4) Estimated Effects of Proposed OPPS Changes on CMHCs
(5) Estimated Effects of Proposed OPPS Changes on Beneficiaries
(6) Estimated Effects of Proposed OPPS Changes on Other
Providers
(7) Estimated Effects of Proposed OPPS Changes on the Medicare
and Medicaid Programs
(8) Alternative OPPS Policies Considered
b. Estimated Effects of Proposed CY 2018 ASC Payment System
Policies
(1) Limitations of Our Analysis
(2) Estimated Effects of Proposed CY 2018 ASC Payment System
Policies on ASCs
(3) Estimated Effects of Proposed ASC Payment System Policies on
Beneficiaries
(4) Alternative ASC Payment Policies Considered
c. Accounting Statements and Tables
d. Effects of Proposed Requirements for the Hospital OQR Program
e. Effects of Proposed Requirements for the ASCQR Program
B. Regulatory Flexibility Act (RFA) Analysis
C. Unfunded Mandates Reform Act Analysis
D. Reducing Regulation and Controlling Regulatory Costs
E. Conclusion
XX. Federalism Analysis
Regulation Text
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this proposed rule, we are proposing to update the payment
policies and payment rates for services furnished to Medicare
beneficiaries in hospital outpatient departments (HOPDs) and ambulatory
surgical centers (ASCs) beginning January 1, 2018. Section 1833(t) of
the Social Security Act (the Act) requires us to annually review and
update the payment rates for services payable under the Hospital
Outpatient Prospective Payment System (OPPS). Specifically, section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS not less
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often than annually, and to revise the groups, relative payment
weights, and other adjustments that take into account changes in
medical practices, changes in technologies, and the addition of new
services, new cost data, and other relevant information and factors. In
addition, under section 1833(i) of the Act, we annually review and
update the ASC payment rates. We describe these and various other
statutory authorities in the relevant sections of this proposed rule.
In addition, this proposed rule would update and refine the
requirements for the Hospital Outpatient Quality Reporting (OQR)
Program and the ASC Quality Reporting (ASCQR) Program.
2. Summary of the Major Provisions
OPPS Update: For CY 2018, we are proposing to increase the
payment rates under the OPPS by an Outpatient Department (OPD) fee
schedule increase factor of 1.75 percent. This proposed increase factor
is based on the proposed hospital inpatient market basket percentage
increase of 2.9 percent for inpatient services paid under the hospital
inpatient prospective payment system (IPPS), minus the proposed
multifactor productivity (MFP) adjustment of 0.4 percentage point, and
minus a 0.75 percentage point adjustment required by the Affordable
Care Act. Based on this proposed update, we estimate that proposed
total payments to OPPS providers (including beneficiary cost-sharing
and estimated changes in enrollment, utilization, and case-mix), for CY
2018 would be approximately $70 billion, an increase of approximately
$5.7 billion compared to estimated CY 2017 OPPS payments.
We are proposing to continue to implement the statutory 2.0
percentage point reduction in payments for hospitals failing to meet
the hospital outpatient quality reporting requirements, by applying a
proposed reporting factor of 0.980 to the OPPS payments and copayments
for all applicable services.
Proposed High Cost/Low Cost Threshold for Packaged Skin
Substitutes: As we did for CY 2017, we are proposing to assign skin
substitutes with a geometric mean unit cost (MUC) or a per day cost
(PDC) that exceeds either the MUC threshold or the PDC threshold to the
high cost group. In addition, for CY 2018, we are proposing that a skin
substitute product that does not exceed either the CY 2018 MUC or PDC
threshold for CY 2018, but was assigned to the high cost group for CY
2017, will be assigned to the high cost group for CY 2018. The goal of
our proposal is to maintain similar levels of payment for skin
substitute products for CY 2018 while we study our current skin
substitute payment methodology to determine whether refinements to our
existing methodologies may be warranted.
Supervision of Hospital Outpatient Therapeutic Services:
In the CY 2009 and CY 2010 OPPS/ASC proposed rule and final rule with
comment period, we clarified that direct supervision is required for
hospital outpatient therapeutic services covered and paid by Medicare
that are furnished in hospitals, CAHs, and in provider-based
departments (PBDs) of hospitals, as set forth in the CY 2000 OPPS final
rule with comment period. For several years, there has been a
moratorium on the enforcement of the direct supervision requirement for
CAHs and small rural hospitals, with the latest moratorium on
enforcement expiring on December 31, 2016. In this proposed rule, we
are proposing to reinstate the nonenforcement of direct supervision
enforcement instruction for outpatient therapeutic services for CAHs
and small rural hospitals having 100 or fewer beds for CY 2018 and CY
2019.
340B Drug Pricing: We are proposing changes to our current
Medicare Part B drug payment methodology for 340B hospitals that we
believe would better, and more appropriately, reflect the resources and
acquisition costs that these hospitals incur. Such changes would allow
the Medicare program and Medicare beneficiaries to share in some of the
savings realized by hospitals participating in the 340B program. For CY
2018, we are proposing to exercise the Secretary's authority to adjust
the applicable payment rate as necessary for separately payable drugs
and biologicals (other than drugs on pass-through and vaccines)
acquired under the 340B program from average sales price (ASP) plus 6
percent to ASP minus 22.5 percent. In addition, in this proposed rule,
we state our intent to establish a modifier to identify whether a drug
billed under the OPPS was purchased under the 340B Drug Discount
Program.
Device Pass-Through Applications: For CY 2018, we evaluate
five devices for eligibility to receive pass through payments and are
seeking comments on whether each of these items meet the criteria for
device pass-through status.
Rural Adjustment: We are proposing to continue the
adjustment of 7.1 percent to the OPPS payments to certain rural sole
community hospitals (SCHs), including essential access community
hospitals (EACHs). This proposed adjustment would apply to all services
paid under the OPPS, excluding separately payable drugs and
biologicals, devices paid under the pass-through payment policy, and
items paid at charges reduced to cost.
Cancer Hospital Payment Adjustment: For CY 2018, we are
proposing to continue to provide additional payments to cancer
hospitals so that the cancer hospital's payment-to-cost ratio (PCR)
after the additional payments is equal to the weighted average PCR for
the other OPPS hospitals using the most recently submitted or settled
cost report data. However, beginning CY 2018, section 16002(b) of the
21st Century Cures Act requires this weighted average PCR be reduced by
1.0 percentage point. Based on the data and the required 1.0 percentage
point reduction, a proposed target PCR of 0.89 would be used to
determine the CY 2018 cancer hospital payment adjustment to be paid at
cost report settlement. That is, the proposed payment adjustments would
be the additional payments needed to result in a PCR equal to 0.89 for
each cancer hospital.
Changes to the Inpatient Only List: In CY 2017 OPPS/ASC
rulemaking, we solicited comment from the public on whether total knee
arthroplasty should be removed from the inpatient only list. Several
commenters to the CY 2017 OPPS/ASC proposed rule were supportive of the
removal. In addition, the Advisory Panel on Hospital Outpatient Payment
recommended at its Summer 2016 meeting that this procedure be removed
from the inpatient only list. After evaluating the procedure, for CY
2018, we are proposing to remove total knee arthroplasty from the
inpatient-only list. In addition, we are soliciting comment on whether
partial and total hip should also be removed from the inpatient only
list and added to the ASC Covered Surgical Procedures List.
Comprehensive APCs: For CY 2018, we are not proposing to
create any new C-APCs or any extensive changes to the already
established methodology used for C-APCs. There will be a total number
of 62 C-APCs as of January 1, 2018. We note that for CY 2018, for the
C-APC for Stereotactic Radio Surgery (SRS), specifically, C-APC 5627
(Level 7 Radiation Therapy), we are proposing to continue to make
separate payments for the 10 planning and preparation services
adjunctive to the delivery of the SRS treatment using either the
Cobalt-60-based or LINAC-based technology when furnished to a
beneficiary within 30 days of the SRS treatment. In addition, the data
collection period for SRS claims with modifier ``CP'' is set to
conclude on December 31, 2017.
[[Page 33565]]
Accordingly, for CY 2018, we are deleting this modifier and
discontinuing its required use.
Packaging Policies: In CY 2015, we implemented a policy to
conditionally package ancillary services assigned to APCs with a
geometric mean cost of $100 or less prior to packaging, with some
exceptions, including drug administration services. For CY 2018, we are
proposing to remove the exception for certain drug administration
services and conditionally package payment for low-cost drug
administration services. We are not proposing to package drug
administration add-on codes for CY 2018, but are soliciting comments on
this policy. In addition, we are broadly soliciting comments on
existing packaging policies that exist under the OPPS, including those
related to drugs that function as a supply in a diagnostic test or
procedure or in a surgical procedure.
Payment Changes for X-rays Taken Using Computed
Radiography Technology: Section 502(b) of Division O, Title V of the
Consolidated Appropriations Act, 2016 (Pub. L. 114-113) amended section
1833(t)(16) of the Act by adding new subparagraph (F). New section
1833(t)(16)(F)(ii) of the Act provides for a phased-in reduction of
payments for imaging services that are taken using computed radiography
technology. That section provides that payments for such services
furnished during CYs 2018 through 2022 shall be reduced by 7 percent,
and if such services are furnished during CY 2023 or a subsequent year,
payments for such services shall be reduced by 10 percent. We are
establishing a new modifier that would be reported on claims to
identify those HCPCS codes that describe X-rays taken using computed
radiography technology. Specifically, this modifier, as allowed under
the provisions of new section 1833(t)(16)(F)(ii) of the Act, would be
reported with the applicable HCPCS code to describe imaging services
that are taken using computed radiography technology/cassette-based
imaging beginning January 1, 2018.
ASC Payment Update: For CY 2018, we are proposing to
increase payment rates under the ASC payment system by 1.9 percent for
ASCs that meet the quality reporting requirements under the ASCQR
Program. This proposed increase is based on a projected CPI-U update of
2.3 percent minus a multifactor productivity adjustment required by the
Affordable Care Act of 0.4 percentage point. Based on this proposed
update, we estimate that proposed total payments to ASCs (including
beneficiary cost sharing and estimated changes in enrollment,
utilization, and case-mix), for CY 2018 would be approximately $4.68
billion, an increase of approximately $155 million compared to
estimated CY 2017 Medicare payments. In addition, we are soliciting
comment on payment reform for ASCs, including the collection of cost
data which may support a rate update other than CPI-U.
Comment Solicitation on ASC Payment Reform: We are broadly
interested in feedback from stakeholders and other interested parties
on potential reforms to the current payment system, including, but not
limited to (1) the rate update factor applied to ASC payments, (2)
whether and how ASCs should submit data relating to costs, (3) whether
ASCs should bill on the institutional claim form rather than the
professional claim form, and (4) other ideas to improve payment
accuracy for ASCs.
Changes to the List of ASC Covered Surgical Procedures:
For CY 2018, we are proposing to add three procedures to the ASC
Covered Procedures List. In addition, we are soliciting comment on
whether total knee arthroplasty, partial hip arthroplasty and total hip
arthroplasty meet the criteria to be added to the ASC-CPL. We also are
soliciting comments from stakeholders on whether there are codes that
are outside the AMA-CPT surgical code range that nonetheless, should be
considered to be a covered surgical procedure.
Potential Revisions to the Laboratory Date of Service
Policy: To better understand the potential impact of the current date
of service (DOS) policy on billing for molecular pathology tests and
advance diagnostic laboratory tests (ADLTs) under the new private payor
rate-based Clinical Laboratory Fee Schedule (CLFS), we are soliciting
public comments on billing for molecular pathology tests and ADLTs
ordered less than 14 days of a hospital outpatient discharge.
Hospital Outpatient Quality Reporting (OQR) Program: For
the Hospital OQR Program, we are proposing to remove and delay certain
measures for the CY 2020 payment determination and the CY 2021 payment
determination and subsequent years. For the CY 2020 payment
determination and subsequent years, we are proposing to remove OP-21:
Median Time to Pain Management for Long Bone Fracture and OP-26:
Hospital Outpatient Volume Data on Selected Outpatient Surgical
Procedures. We are also proposing to delay the OAS CAHPS Survey
measures (OP-37-a-e) beginning with the CY 2020 payment determination
(CY 2018 reporting). In addition, for the CY 2020 payment determination
and subsequent years we are: (1) Providing clarification on our
procedures for validation of chart-abstracted measures to note that the
50 poorest performing outlier hospitals will be targeted for
validation; (2) proposing to formalize the validation educational
review process, update it to allow corrections of incorrect validation
results for chart-abstracted measures, and modify the CFR accordingly;
(3) proposing to change the Notice of Participation (NOP) deadline and
make corresponding changes to the CFR; (4) proposing to align the first
quarter for which to submit data for hospitals that did not participate
in the previous year's Hospital OQR Program and make corresponding
changes to the CFR; (5) proposing to publicly report OP-18c: Median
Time from Emergency Department Arrival to Emergency Department
Departure for Discharged Emergency Department Patients--Psychiatric/
Mental Health Patients; and (6) proposing to align the naming of the
Extraordinary Circumstances Exceptions (ECE) policy with that used in
our other quality reporting and value-based payment programs and make
corresponding changes to the CFR. For the CY 2021 payment determination
and subsequent years, we are proposing to remove: (1) OP-1: Median Time
to Fibrinolysis; (2) OP-4: Aspirin at Arrival; (3) OP-20: Door to
Diagnostic Evaluation by a Qualified Medical Professional; and, (4) OP-
25: Safe Surgery Checklist Use.
Ambulatory Surgical Center Quality Reporting (ASCQR)
Program: For the ASCQR Program, we are proposing to adopt measures and
policies for the CY 2019 payment determination, 2021 payment
determination, and CY 2022 payment determination and subsequent years.
Specifically, we are proposing, beginning with the CY 2019 payment
determination, to remove three measures from the ASCQR Program measure
set: (1) ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing; (2)
ASC-6: Safe Surgery Checklist Use; and, (3) ASC-7: Ambulatory Surgical
Center Facility Volume Data on Selected Ambulatory Surgical Center
Surgical Procedures. In addition, we are also proposing to delay the
OAS CAHPS Survey measures (ASC-15a-e) beginning with the CY 2020
payment determination (CY 2018 data collection). Furthermore, starting
with CY 2018 and beyond, we are proposing to: (1) Expand the CMS online
tool to also allow for batch submission of measure data and make
corresponding changes to the CFR; and (2) align the naming of the
[[Page 33566]]
Extraordinary Circumstances Exceptions (ECE) policy with that used in
our other quality reporting and value-based payment programs and make
corresponding changes to the CFR. We are also proposing, beginning with
the CY 2021 payment determination, to adopt one new measure, ASC-16:
Toxic Anterior Segment Syndrome. In addition, we are proposing,
beginning with the CY 2022 payment determination, to adopt two new
measures collected via claims, ASC-17: Hospital Visits after Orthopedic
Ambulatory Surgical Center Procedures and ASC-18: Hospital Visits after
Urology Ambulatory Surgical Center Procedures.
3. Summary of Costs and Benefits
In sections XIX. and XX. of this proposed rule, we set forth a
detailed analysis of the regulatory and Federalism impacts that the
proposed changes would have on affected entities and beneficiaries. Key
estimated impacts are described below.
a. Impacts of the Proposed OPPS Update
(1) Impacts of All OPPS Proposed Changes
Table 38 in section XIX. of this proposed rule displays the
distributional impact of all the proposed OPPS changes on various
groups of hospitals and CMHCs for CY 2018 compared to all estimated
OPPS payments in CY 2017. We estimate that the proposed policies in
this proposed rule would result in a 1.9 percent overall increase in
OPPS payments to providers. We estimate that proposed total OPPS
payments for CY 2018, including beneficiary cost-sharing, to the
approximate 3,900 facilities paid under the OPPS (including general
acute care hospitals, children's hospitals, cancer hospitals, and
CMHCs) would increase by approximately $897 million compared to CY 2017
payments, excluding our estimated changes in enrollment, utilization,
and case-mix.
We estimated the isolated impact of our proposed OPPS policies on
CMHCs because CMHCs are only paid for partial hospitalization services
under the OPPS. Continuing the provider-specific structure that we
adopted beginning in CY 2011 and basing payment fully on the type of
provider furnishing the service, we estimate a 2.1 percent increase in
CY 2018 payments to CMHCs relative to their CY 2017 payments.
(2) Impacts of the Proposed Updated Wage Indexes
We estimate that our proposed update of the wage indexes based on
the FY 2018 IPPS proposed rule wage indexes results in no change for
urban and rural hospitals under the OPPS. These wage indexes include
the continued implementation of the OMB labor market area delineations
based on 2010 Decennial Census data.
(3) Impacts of the Proposed Rural Adjustment and the Cancer Hospital
Payment Adjustment
There are no significant impacts of our proposed CY 2018 payment
policies for hospitals that are eligible for the rural adjustment or
for the cancer hospital payment adjustment. We are not proposing to
make any change in policies for determining the rural hospital payment
adjustments. While we are implementing the required reduction to the
cancer hospital payment adjustment in Section 16002 of the 21st Century
Cures Act for CY 2018, the adjustment amounts do not significantly
impact the budget neutrality adjustments for these policies.
(4) Impacts of the Proposed OPD Fee Schedule Increase Factor
We estimate that, for most hospitals, the application of the
proposed OPD fee schedule increase factor of 1.75 percent to the
conversion factor for CY 2018 would mitigate the impacts of the budget
neutrality adjustments. As a result of the OPD fee schedule increase
factor and other budget neutrality adjustments, we estimate that rural
and urban hospitals would experience increases of approximately 2.0
percent for urban hospitals and 2.0 percent for rural hospitals.
Classifying hospitals by teaching status or type of ownership suggests
that these hospitals would receive similar increases.
b. Impacts of the Proposed ASC Payment Update
For impact purposes, the surgical procedures on the ASC list of
covered procedures are aggregated into surgical specialty groups using
CPT and HCPCS code range definitions. The proposed percentage change in
estimated total payments by specialty groups under the proposed CY 2018
payment rates compared to estimated CY 2017 payment rates ranges
between 5 percent for integumentary system procedures and 1 percent for
genitourinary system procedures.
c. Impacts of the Hospital OQR Program
We do not expect our proposed CY 2018 policies to significantly
affect the number of hospitals that do not receive a full annual
payment update.
d. Impacts of the ASCQR Program
We do not expect our proposed CY 2018 policies to significantly
affect the number of ASCs that do not receive a full annual payment
update.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of the Social Security Act was enacted, Medicare
payment for hospital outpatient services was based on hospital-specific
costs. In an effort to ensure that Medicare and its beneficiaries pay
appropriately for services and to encourage more efficient delivery of
care, the Congress mandated replacement of the reasonable cost-based
payment methodology with a prospective payment system (PPS). The
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section
1833(t) to the Act authorizing implementation of a PPS for hospital
outpatient services. The OPPS was first implemented for services
furnished on or after August 1, 2000. Implementing regulations for the
OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: The Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
2006; the Medicare Improvements and Extension Act under Division B of
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
enacted on December 29, 2007; the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
March 30, 2010 (these two public laws are collectively known as the
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
Middle Class Tax Relief and Job Creation Act of 2012
[[Page 33567]]
(MCTRJCA, Pub. L. 112-96), enacted on February 22, 2012; the American
Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013;
the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) enacted on
December 26, 2013; the Protecting Access to Medicare Act of 2014 (PAMA,
Pub. L. 113-93), enacted on March 27, 2014; the Medicare Access and
CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted
April 16, 2015; the Bipartisan Budget Act of 2015 (Pub. L. 114-74),
enacted November 2, 2015; the Consolidated Appropriations Act, 2016
(Pub. L. 114-113), enacted on December 18, 2015, and the 21st Century
Cures Act (Pub. L. 114-255), enacted on December 13, 2016.
Under the OPPS, we pay for hospital Part B services on a rate-per-
service basis that varies according to the APC group to which the
service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C. of this proposed rule. Section
1833(t)(1)(B) of the Act provides for payment under the OPPS for
hospital outpatient services designated by the Secretary (which
includes partial hospitalization services furnished by CMHCs), and
certain inpatient hospital services that are paid under Medicare Part
B.
The OPPS rate is an unadjusted national payment amount that
includes the Medicare payment and the beneficiary copayment. This rate
is divided into a labor-related amount and a nonlabor-related amount.
The labor-related amount is adjusted for area wage differences using
the hospital inpatient wage index value for the locality in which the
hospital or CMHC is located.
All services and items within an APC group are comparable
clinically and with respect to resource use (section 1833(t)(2)(B) of
the Act). In accordance with section 1833(t)(2) of the Act, subject to
certain exceptions, items and services within an APC group cannot be
considered comparable with respect to the use of resources if the
highest median cost (or mean cost, if elected by the Secretary) for an
item or service in the APC group is more than 2 times greater than the
lowest median cost (or mean cost, if elected by the Secretary) for an
item or service within the same APC group (referred to as the ``2 times
rule''). In implementing this provision, we generally use the cost of
the item or service assigned to an APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
clinical information and cost data to appropriately assign them to a
clinical APC group, we have established special APC groups based on
costs, which we refer to as New Technology APCs. These New Technology
APCs are designated by cost bands which allow us to provide appropriate
and consistent payment for designated new procedures that are not yet
reflected in our claims data. Similar to pass-through payments, an
assignment to a New Technology APC is temporary; that is, we retain a
service within a New Technology APC until we acquire sufficient data to
assign it to a clinically appropriate APC group.
C. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule. It
also excludes screening mammography, diagnostic mammography, and
effective January 1, 2011, an annual wellness visit providing
personalized prevention plan services. The Secretary exercises the
authority granted under the statute to also exclude from the OPPS
certain services that are paid under fee schedules or other payment
systems. Such excluded services include, for example, the professional
services of physicians and nonphysician practitioners paid under the
Medicare Physician Fee Schedule (MPFS); certain laboratory services
paid under the Clinical Laboratory Fee Schedule (CLFS); services for
beneficiaries with end-stage renal disease (ESRD) that are paid under
the ESRD prospective payment system; and services and procedures that
require an inpatient stay that are paid under the hospital IPPS. We set
forth the services that are excluded from payment under the OPPS in
regulations at 42 CFR 419.22.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals that are excluded from payment under the OPPS. These excluded
hospitals include: Critical access hospitals (CAHs); hospitals located
in Maryland and paid under the Maryland All-Payer Model; hospitals
located outside of the 50 States, the District of Columbia, and Puerto
Rico; and Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than annually, and to revise the
groups, relative payment weights, and other adjustments that take into
account changes in medical practices, changes in technologies, and the
addition of new services, new cost data, and other relevant information
and factors.
Since initially implementing the OPPS, we have published final
rules in the Federal Register annually to implement statutory
requirements and changes arising from our continuing experience with
this system. These rules can be viewed on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
106-113, requires that we consult with an external advisory panel of
experts to annually review the clinical integrity of the payment groups
and their weights under the OPPS. In CY 2000, based on section
1833(t)(9)(A) of the Act, the Secretary established the Advisory Panel
on Ambulatory Payment Classification Groups (APC Panel) to fulfill this
requirement. In CY 2011, based on section 222 of the PHS Act which
gives discretionary authority to the Secretary to convene advisory
councils and committees, the Secretary
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expanded the panel's scope to include the supervision of hospital
outpatient therapeutic services in addition to the APC groups and
weights. To reflect this new role of the panel, the Secretary changed
the panel's name to the Advisory Panel on Hospital Outpatient Payment
(the HOP Panel, or the Panel). The Panel is not restricted to using
data compiled by CMS, and in conducting its review, it may use data
collected or developed by organizations outside the Department.
2. Establishment of the Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the HOP Panel, and at that time named the APC Panel. This
expert panel is composed of appropriate representatives of providers
(currently employed full-time, not as consultants, in their respective
areas of expertise), reviews clinical data, and advises CMS about the
clinical integrity of the APC groups and their payment weights. Since
CY 2012, the Panel also is charged with advising the Secretary on the
appropriate level of supervision for individual hospital outpatient
therapeutic services. The Panel is technical in nature, and it is
governed by the provisions of the Federal Advisory Committee Act
(FACA). The current charter specifies, among other requirements, that:
The Panel may advise on the clinical integrity of Ambulatory Payment
Classification (APC) groups and their associated weights; may advise on
the appropriate supervision level for hospital outpatient services;
continues to be technical in nature; is governed by the provisions of
the FACA; has a Designated Federal Official (DFO); and is chaired by a
Federal Official designated by the Secretary. The Panel's charter was
amended on November 15, 2011, renaming the Panel and expanding the
Panel's authority to include supervision of hospital outpatient
therapeutic services and to add Critical Access Hospital (CAH)
representation to its membership. The Panel's charter was also amended
on November 6, 2014 (80 FR 23009), and the number of panel members was
revised from up to 19 to up to 15 members. The Panel's current charter
was approved on November 21, 2016, for a 2-year period (81 FR 94378).
The current Panel membership and other information pertaining to
the Panel, including its charter, Federal Register notices, membership,
meeting dates, agenda topics, and meeting reports, can be viewed on the
CMS Web site at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held multiple meetings, with the last meeting taking
place on August 22, 2016. Prior to each meeting, we publish a notice in
the Federal Register to announce the meeting and, when necessary, to
solicit nominations for Panel membership, to announce new members and
to announce any other changes that the public should be aware of.
Beginning in CY 2017, we have transitioned to one meeting per year (81
FR 31941). Further information on this summer's meeting can be found in
the meeting notice titled ``Medicare Program: Announcement of the
Advisory Panel on Hospital Outpatient Payment (the Panel) Meeting on
August 21-22, 2017'' (82 FR 24128).
The Panel has established an operational structure that, in part,
currently includes the use of three subcommittees to facilitate its
required review process. The three current subcommittees are the Data
Subcommittee, the Visits and Observation Subcommittee, and the
Subcommittee for APC Groups and Status Indicator (SI) Assignments. The
Data Subcommittee is responsible for studying the data issues
confronting the Panel and for recommending options for resolving them.
The Visits and Observation Subcommittee reviews and makes
recommendations to the Panel on all technical issues pertaining to
observation services and hospital outpatient visits paid under the OPPS
(for example, APC configurations and APC relative payment weights). The
Subcommittee for APC Groups and SI Assignments advises the Panel on the
following issues: The appropriate status indicators to be assigned to
HCPCS codes, including but not limited to whether a HCPCS code or a
category of codes should be packaged or separately paid; and the
appropriate APC assignment of HCPCS codes regarding services for which
separate payment is made. The Panel recommended at the August 22, 2016
meeting that the subcommittees continue. We accepted this
recommendation.
Discussions of the other recommendations made by the Panel at the
August 22, 2016 Panel meeting, namely conditional packaging, allogeneic
hematopoietic stem cell transplantation, and outpatient total knee
arthroplasty, were discussed in the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79562), the CY 2017 OPPS/ASC correction notice
(82 FR 24), or are included in the sections of this proposed rule that
are specific to each recommendation. For discussions of past Panel
meetings and recommendations, we refer readers to previously published
OPPS/ASC proposed and final rules, the CMS Advisory Panel on Hospital
Outpatient Payment Web site mentioned earlier in this section, and the
FACA database at: https://facadatabase.gov/.
F. Public Comments Received on the CY 2017 OPPS/ASC Final Rule With
Comment Period
We received 39 timely pieces of correspondence on the CY 2017 OPPS/
ASC final rule with comment period that appeared in the Federal
Register on November 14, 2016 (81 FR 79562), some of which contained
comments on the interim APC assignments and/or status indicators of new
or replacement Level II HCPCS codes (identified with comment indicator
``NI'' in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that
final rule), the potential limitation on clinical service line
expansion or volume of services increases by nonexcepted off campus
provider-based departments, and the Medicare Physician Fee Schedule
(MPFS) payment rates for nonexcepted items and services furnished and
billed by nonexcepted off-campus provider-based departments of
hospitals. Summaries of the public comments are set forth in this
proposed rule under the appropriate subject matter headings. Summaries
of public comments on the MPFS payment rates for nonexcepted items and
services will be set forth in the CY 2018 MPFS final rule with comment
period.
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
not less often than annually and revise the relative payment weights
for APCs. In the April 7, 2000 OPPS final rule with comment period (65
FR 18482), we explained in detail how we calculated the relative
payment weights that were implemented on August 1, 2000 for each APC
group.
In this CY 2018 OPPS/ASC proposed rule, for CY 2018, we are
proposing to recalibrate the APC relative payment weights for services
furnished on or after January 1, 2018, and before January 1, 2019 (CY
2018), using the same basic methodology that we described in the
[[Page 33569]]
CY 2017 OPPS/ASC final rule with comment period (81 FR 79574 through
79595). That is, we are proposing to recalibrate the relative payment
weights for each APC based on claims and cost report data for hospital
outpatient department (HOPD) services, using the most recent available
data to construct a database for calculating APC group weights.
For the purpose of recalibrating the proposed APC relative payment
weights for CY 2018, we began with approximately 163 million final
action claims (claims for which all disputes and adjustments have been
resolved and payment has been made) for HOPD services furnished on or
after January 1, 2016, and before January 1, 2017, before applying our
exclusionary criteria and other methodological adjustments. After the
application of those data processing changes, we used approximately 86
million final action claims to develop the proposed CY 2018 OPPS
payment weights. For exact numbers of claims used and additional
details on the claims accounting process, we refer readers to the
claims accounting narrative under supporting documentation for this CY
2018 OPPS/ASC proposed rule on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
Addendum N to this proposed rule includes the proposed list of
bypass codes for CY 2018. The proposed list of bypass codes contains
codes that were reported on claims for services in CY 2016 and,
therefore, includes codes that were in effect in CY 2016 and used for
billing, but were deleted for CY 2017. We retained these deleted bypass
codes on the proposed CY 2018 bypass list because these codes existed
in CY 2016 and were covered OPD services in that period, and CY 2016
claims data are used to calculate CY 2018 payment rates. Keeping these
deleted bypass codes on the bypass list potentially allows us to create
more ``pseudo'' single procedure claims for ratesetting purposes.
``Overlap bypass codes'' that are members of the proposed multiple
imaging composite APCs are identified by asterisks (*) in the third
column of Addendum N to this proposed rule. HCPCS codes that we are
proposing to add for CY 2018 are identified by asterisks (*) in the
fourth column of Addendum N.
Table 1 below contains the list of codes that we are proposing to
remove from the CY 2018 bypass list.
Table 1--Proposed HCPCS Codes To Be Removed From the CY 2018 Bypass List
------------------------------------------------------------------------
HCPCS code HCPCS short descriptor
------------------------------------------------------------------------
77305.................................. Teletx isodose plan simple.
77310.................................. Teletx isodose plan intermed.
77315.................................. Teletx isodose plan complex.
77327.................................. Brachytx isodose calc intern.
90801.................................. Psy dx interview.
90802.................................. Intac psy dx interview.
90804.................................. Psytx office 20-30 min.
90805.................................. Psytx off 20-30 min w/e&m.
90806.................................. Psytx off 45-50 min.
90807.................................. Psytx off 45-50 min w/e&m.
90808.................................. Psytx office 75-80 min.
90809.................................. Psytx off 75-80 w/e&m.
90810.................................. Intac psytx off 20-30 min.
90811.................................. Intac psytx 20-40 w/e&m.
90812.................................. Intac psytx off 45-50 min.
90857.................................. Intac group psytx.
90862.................................. Medication management.
99201.................................. Office/outpatient visit new.
99202.................................. Office/outpatient visit new.
99203.................................. Office/outpatient visit new.
99204.................................. Office/outpatient visit new.
99205.................................. Office/outpatient visit new.
99212.................................. Office/outpatient visit est.
99213.................................. Office/outpatient visit est.
99214.................................. Office/outpatient visit est.
C1300.................................. Hyperbaric oxygen.
G0340.................................. Robt lin-radsurg fractx 2-5.
G9141.................................. Influenza A H1N1, admin w cou.
M0064.................................. Visit for drug monitoring.
------------------------------------------------------------------------
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2018, in this CY 2018 OPPS/ASC proposed rule, we are
proposing to continue to use the hospital-specific overall ancillary
and departmental cost-to-charge ratios (CCRs) to convert charges to
estimated costs through application of a revenue code-to-cost center
crosswalk. To calculate the APC costs on which the proposed CY 2018 APC
payment rates are based, we calculated hospital-specific overall
ancillary CCRs and hospital-specific departmental CCRs for each
hospital for which we had CY 2016 claims data by comparing these claims
data to the most recently available hospital cost reports, which, in
most cases, are from CY 2015. For the proposed CY 2018 OPPS payment
rates, we used the set of claims processed during CY 2016. We applied
the hospital-specific CCR to the hospital's charges at the most
detailed level possible, based on a revenue code-to-cost center
crosswalk that contains a hierarchy of CCRs used to estimate costs from
charges for each revenue code. That crosswalk is available for review
and continuous comment on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
To ensure the completeness of the revenue code-to-cost center
crosswalk, we reviewed changes to the list of revenue codes for CY 2016
(the year of claims data we used to calculate the proposed CY 2018 OPPS
payment rates) and found that the National Uniform Billing Committee
(NUBC) did not add any new revenue codes to the NUBC 2016 Data
Specifications Manual.
In accordance with our longstanding policy, we calculate CCRs for
the standard and nonstandard cost centers accepted by the electronic
cost report database. In general, the most detailed level at which we
calculate CCRs is the hospital-specific departmental level. For a
discussion of the hospital-specific overall ancillary CCR calculation,
we refer readers to the CY 2007 OPPS/ASC final rule with comment period
(71 FR 67983 through 67985). The calculation of blood costs is a
longstanding exception (since the CY 2005 OPPS) to this general
methodology for calculation of CCRs used for converting charges to
costs on each claim. This exception is discussed in detail in the CY
2007 OPPS/ASC final rule with comment period and discussed further in
section II.A.2.a.(1) of this proposed rule.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840
through 74847), we finalized our policy of creating new cost centers
and distinct CCRs for implantable devices, MRIs, CT scans, and cardiac
catheterization. However, in response to the CY 2014 OPPS/ASC proposed
rule, commenters reported that some hospitals currently use an
imprecise ``square feet'' allocation methodology for the costs of large
moveable equipment like CT scan and MRI machines. They indicated that
while CMS recommended using two alternative allocation methods,
``direct assignment'' or ``dollar value,'' as a more accurate
methodology for directly assigning equipment costs, industry analysis
suggested that approximately only half of the reported cost centers for
CT scans and MRIs rely on these preferred methodologies. In response to
concerns from commenters, we finalized a policy for the CY 2014 OPPS to
remove claims from providers that use a cost allocation method of
``square feet'' to calculate CCRs used to estimate costs associated
with the CT and MRI APCs (78 FR 74847). Further, we finalized a
transitional policy to estimate imaging APC relative payment weights
using only CT and MRI cost data from providers that do not use ``square
feet'' as the cost allocation statistic. We provided that this
finalized policy would sunset in 4 years to
[[Page 33570]]
provide a sufficient time for hospitals to transition to a more
accurate cost allocation method and for the related data to be
available for ratesetting purposes (78 FR 74847). Therefore, beginning
CY 2018, with the sunset of the transition policy, we would estimate
the imaging APC relative payment weight using cost data from all
providers, regardless of the cost allocation statistic employed.
Some stakeholders have raised concerns regarding using claims from
all providers to calculate CT and MRI CCRs, regardless of the cost
allocations statistic employed (78 FR 74840 through 74847).
Stakeholders noted that providers continue to use the ``square feet''
cost allocation method and that including claims from such providers
would cause significant reductions in imaging APC payment rates.
Table 2 below demonstrates the relative effect on imaging APC
payments after removing cost data for providers that report CT and MRI
standard cost centers using ``square feet'' as the cost allocation
method by extracting HCRIS data on Worksheet B-1. Table 3 below
provides statistical values based on the CT and MRI standard cost
center CCRs using the different cost allocation methods.
Table 2--Percentage Change in Estimate Cost for CT and MRI APCs When
Excluding Claims From Provider Using ``Square Feet'' as the Cost
Allocation Method
------------------------------------------------------------------------
Percentage
APC APC descriptor change
------------------------------------------------------------------------
5521........................... Level 1 Imaging without -4.3
Contrast.
5522........................... Level 2 Imaging without 6.1
Contrast.
5523........................... Level 3 Imaging without 1.1
Contrast.
5524........................... Level 4 Imaging without 7.3
Contrast.
5525........................... Level 5 Imaging without 4.5
Contrast.
5571........................... Level 1 Imaging with 10.1
Contrast.
5572........................... Level 2 Imaging with 9.4
Contrast.
5573........................... Level 3 Imaging with 6.0
Contrast.
8005........................... CT and CTA without 13.5
Contrast Composite.
8006........................... CT and CTA with 10.5
Contrast Composite.
8007........................... MRI and MRA without 6.8
Contrast Composite.
8008........................... MRI and MRA with 7.2
Contrast Composite.
------------------------------------------------------------------------
Table 3--CCR Statistical Values Based on Use of Different Cost Allocation Methods
----------------------------------------------------------------------------------------------------------------
CT MRI
Cost allocation method ---------------------------------------------------------------
Median CCR Mean CCR Median CCR Mean CCR
----------------------------------------------------------------------------------------------------------------
All Providers................................... 0.0397 0.0559 0.0828 0.1072
Square Feet Only................................ 0.0332 0.0493 0.0726 0.0972
Direct Assign................................... 0.0591 0.0680 0.1039 0.1247
Dollar Value.................................... 0.0485 0.0644 0.0941 0.1203
Direct Assign and Dollar Value.................. 0.0485 0.0644 0.0949 0.1200
----------------------------------------------------------------------------------------------------------------
Our analysis shows that since the CY 2014 OPPS in which we
established the transition policy, the number of valid MRI CCRs has
increased by 15.6 percent to 2,142 providers and the number of valid CT
CCRs has increased by 13.4 percent to 2,219 providers. However, we note
that, as shown in Table 2 above, nearly all imaging APCs would see an
increase in payment rates for CY 2018 if claims from providers that
report ``square feet'' cost allocation method were removed. This can be
attributed to the generally lower CCR values from providers that use a
cost allocation method of ``square feet'' as shown in Table 3 above. We
believe that the imaging CCRs that we have are appropriate for
ratesetting. However, in response to provider concerns and to provide
added flexibility for hospitals to improve their cost allocation
methods, we are proposing to extend the transition policy an additional
year, for the CY 2018 OPPS.
For the CY 2018 OPPS, we are proposing to continue to remove claims
from providers that use a cost allocation method of ``square feet'' to
calculate CCRs used to estimate costs with the CT and MRI APCs
identified in Table 2 above. Beginning in CY 2019, we would estimate
the imaging APC relative payment weights using cost data from all
providers, regardless of the cost allocation statistic employed.
2. Proposed Data Development Process and Calculation of Costs Used for
Ratesetting
In this section of this proposed rule, we discuss the use of claims
to calculate the proposed OPPS payment rates for CY 2018. The Hospital
OPPS page on the CMS Web site on which this proposed rule is posted
(https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/) provides an accounting of claims used in the
development of the proposed payment rates. That accounting provides
additional detail regarding the number of claims derived at each stage
of the process. In addition, below in this section we discuss the file
of claims that comprises the data set that is available upon payment of
an administrative fee under a CMS data use agreement. The CMS Web site,
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/, includes information about obtaining
the ``OPPS Limited Data Set,'' which now includes the additional
variables previously available only in the OPPS Identifiable Data Set,
including ICD-10-CM diagnosis codes and revenue code payment amounts.
This file is derived from the CY 2016 claims that were used to
calculate the proposed payment rates for the CY 2018 OPPS.
In the history of the OPPS, we have traditionally established the
scaled relative weights on which payments are based using APC median
costs, which is
[[Page 33571]]
a process described in the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74188). However, as discussed in more detail in section
II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment period (77 FR
68259 through 68271), we finalized the use of geometric mean costs to
calculate the relative weights on which the CY 2013 OPPS payment rates
were based. While this policy changed the cost metric on which the
relative payments are based, the data process in general remained the
same, under the methodologies that we used to obtain appropriate claims
data and accurate cost information in determining estimated service
cost. For CY 2018, in this CY 2018 OPPS/ASC proposed rule, we are
proposing to continue to use geometric mean costs to calculate the
proposed relative weights on which the CY 2018 OPPS payment rates are
based.
We used the methodology described in sections II.A.2.a. through
II.A.2.c. of this proposed rule to calculate the costs we used to
establish the proposed relative payment weights used in calculating the
proposed OPPS payment rates for CY 2018 shown in Addenda A and B to
this proposed rule (which are available via the Internet on the CMS Web
site). We refer readers to section II.A.4. of this proposed rule for a
discussion of the conversion of APC costs to scaled payment weights.
For details of the claims process used in this proposed rule, we
refer readers to the claims accounting narrative under supporting
documentation for this CY 2018 OPPS/ASC proposed rule on the CMS Web
site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
a. Proposed Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
(a) Methodology
Since the implementation of the OPPS in August 2000, we have made
separate payments for blood and blood products through APCs rather than
packaging payment for them into payments for the procedures with which
they are administered. Hospital payments for the costs of blood and
blood products, as well as for the costs of collecting, processing, and
storing blood and blood products, are made through the OPPS payments
for specific blood product APCs.
For CY 2018, in this CY 2018 OPPS/ASC proposed rule, we are
proposing to continue to establish payment rates for blood and blood
products using our blood-specific CCR methodology, which utilizes
actual or simulated CCRs from the most recently available hospital cost
reports to convert hospital charges for blood and blood products to
costs. This methodology has been our standard ratesetting methodology
for blood and blood products since CY 2005. It was developed in
response to data analysis indicating that there was a significant
difference in CCRs for those hospitals with and without blood-specific
cost centers, and past public comments indicating that the former OPPS
policy of defaulting to the overall hospital CCR for hospitals not
reporting a blood-specific cost center often resulted in an
underestimation of the true hospital costs for blood and blood
products. Specifically, in order to address the differences in CCRs and
to better reflect hospitals' costs, we are proposing to continue to
simulate blood CCRs for each hospital that does not report a blood cost
center by calculating the ratio of the blood-specific CCRs to
hospitals' overall CCRs for those hospitals that do report costs and
charges for blood cost centers. We also are proposing to apply this
mean ratio to the overall CCRs of hospitals not reporting costs and
charges for blood cost centers on their cost reports in order to
simulate blood-specific CCRs for those hospitals. We are proposing to
calculate the costs upon which the proposed CY 2018 payment rates for
blood and blood products are based using the actual blood-specific CCR
for hospitals that reported costs and charges for a blood cost center
and a hospital-specific, simulated blood-specific CCR for hospitals
that did not report costs and charges for a blood cost center.
We continue to believe that the hospital-specific, simulated blood-
specific CCR methodology better responds to the absence of a blood-
specific CCR for a hospital than alternative methodologies, such as
defaulting to the overall hospital CCR or applying an average blood-
specific CCR across hospitals. Because this methodology takes into
account the unique charging and cost accounting structure of each
hospital, we believe that it yields more accurate estimated costs for
these products. We continue to believe that this methodology in CY 2018
would result in costs for blood and blood products that appropriately
reflect the relative estimated costs of these products for hospitals
without blood cost centers and, therefore, for these blood products in
general.
We note that, as discussed in section II.A.2.e. of the CYs 2014
through 2017 OPPS/ASC final rules with comment period (78 FR 74861
through 74910, 79 FR 66798 through 66810, 80 FR 70325 through 70339,
and 81 FR 79580 through 79585, respectively), we defined a
comprehensive APC (C-APC) as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. Under this policy, we include the
costs of blood and blood products when calculating the overall costs of
these C-APCs. We are proposing to continue to apply the blood-specific
CCR methodology described in this section when calculating the costs of
the blood and blood products that appear on claims with services
assigned to the C-APCs. Because the costs of blood and blood products
would be reflected in the overall costs of the C-APCs (and, as a
result, in the proposed payment rates of the C-APCs), we are proposing
to not make separate payments for blood and blood products when they
appear on the same claims as services assigned to the C-APCs (we refer
readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR
66796)).
We also refer readers to Addendum B to this proposed rule (which is
available via the Internet on the CMS Web site) for the proposed CY
2018 payment rates for blood and blood products (which are identified
with status indicator ``R''). For a more detailed discussion of the
blood-specific CCR methodology, we refer readers to the CY 2005 OPPS
proposed rule (69 FR 50524 through 50525). For a full history of OPPS
payment for blood and blood products, we refer readers to the CY 2008
OPPS/ASC final rule with comment period (72 FR 66807 through 66810).
We are inviting public comments on our proposals.
(b) Pathogen-Reduced Platelets and Rapid Bacterial Testing for
Platelets
In March 2016, the Food and Drug Administration (FDA) issued draft
guidance for the health care industry entitled ``Bacterial Risk Control
Strategies for Blood Collection Establishments and Transfusion Services
to Enhance the Safety and Availability of Platelets for Transfusion''
(available at: https://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/default.htm). This
draft guidance recommended the use of rapid bacterial testing devices
secondary to testing using a culture-based bacterial detection device
or pathogen-reduction technology for platelets to adequately control
the risk of bacterial contamination of platelets.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR
70322), we
[[Page 33572]]
established HCPCS code P9072 (Platelets, pheresis, pathogen reduced,
each unit). The CMS HCPCS Workgroup later revised HCPCS code P9072 to
include the use of pathogen-reduction technology or rapid bacterial
testing. Specifically, the descriptor for this code was revised,
effective January 1, 2017, to read as follows: HCPCS code P9072
(Platelets, pheresis, pathogen reduced or rapid bacterial tested, each
unit). The payment rate for HCPCS code P9072 is based on a crosswalk to
HCPCS code P9037 (Platelets, pheresis, leukocyte reduced, irradiated,
each unit). We refer readers to the CY 2016 OPPS/ASC final rule with
comment period for a further discussion of crosswalks for pathogen-
reduced blood products (80 FR 70323).
After the release of the CY 2017 OPPS/ASC final rule with comment
period, several blood and blood product stakeholders expressed concerns
about the revised code descriptor for HCPCS code P9072. The
stakeholders believed that the revision to HCPCS code P9072 to describe
both pathogen reduction and rapid bacterial testing was an
inappropriate code descriptor. They stated that separate coding is
needed to describe each service because each service is distinct. The
stakeholders also noted that the code descriptor for HCPCS code P9072
results in hospitals receiving the same payment rate for platelets
undergoing rapid bacterial testing that the hospitals receive for
platelets treated with pathogen reduction technology, despite the fact
that pathogen reduction is significantly more expensive than rapid
bacterial testing.
After review of the concerns expressed by the blood and blood
product stakeholders, the CMS HCPCS Workgroup deactivated HCPCS code
P9072 for Medicare reporting and replaced the code with two new HCPCS
codes effective July 1, 2017. Specifically, effective July 1, 2017,
HCPCS code Q9988 (Platelets, pheresis, pathogen reduced, each unit)
shall be used to report the use of pathogen-reduction technology and
HCPCS code Q9987 (Pathogen(s) test for platelets) shall be used to
report rapid bacterial testing or other pathogen tests for platelets,
instead of HCPCS code P9072. We note that HCPCS code Q9987 should be
reported to describe the test used for the detection of bacterial
contamination in platelets as well as any other test that may be used
to detect pathogen contamination. HCPCS code Q9987 should not be used
for reporting donation testing for infectious agents such as viruses.
The coding changes associated with these codes were published on the
CMS HCPCS Quarterly Update Web site, effective July 2017, at: https://www.cms.gov/Medicare/Coding/HCPCSReleaseCodeSets/HCPCS-Quarterly-Update.html. In addition, for OPPS, we announced the new HCPCS codes
that were effective July 1, 2017 through the July 2017 OPPS quarterly
update Change Request (Transmittal 3783, Change Request 10122, dated
May 26, 2017). We note that, effective July 1, 2017, HCPCS code Q9988
is assigned to APC 9536 (Pathogen Reduced Platelets), with a payment
rate of $647.12, and HCPCS code Q9987 is assigned to New Technology APC
1493, with a payment rate of $25.50.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70322
through 70323), we reiterated that we calculate payment rates for blood
and blood products using our blood-specific CCR methodology, which
utilizes actual or simulated CCRs from the most recently available
hospital cost reports to convert hospital charges for blood and blood
products to costs. Because HCPCS code P9072 was new for CY 2016, there
were no claims data on the charges and costs for this blood product
upon which to apply our blood-specific CCR methodology. Therefore, we
established an interim payment rates for this HCPCS code based on a
crosswalk to existing blood product HCPCS code P9037, which we believed
provided the best proxy for the costs of the new blood product. In
addition, we stated that once we had claims data for HCPCS code P9072,
we would calculate its payment rate using the claims data that should
be available for the code beginning in CY 2018, which is our practice
for other blood product HCPCS codes for which claims data have been
available for 2 years.
Although our standard practice for new codes involves using claims
data to set payment rates once claims data become available, we are
concerned that there may have been confusion among the provider
community about the services that HCPCS code P9072 described. That is,
as early as 2016, there were discussions about changing the descriptor
for HCPCS code P9072 to include the phrase ``or rapid bacterial
tested'', which is a much less costly technology than pathogen
reduction. In addition, as noted above, effective January 2017, the
code descriptor for HCPCS code P9072 was, in fact, changed to also
describe rapid bacterial testing of platelets and, effective July 1,
2017, the descriptor for the temporary successor code for HCPCS code
P9072 (that is, HCPCS code Q9988) was changed again back to the
original descriptor for HCPCS code P9072 that was in place for 2016.
Based on the ongoing discussions involving changes to the original
HCPCS code P9072 established in CY 2016, we believe that claims for
pathogen reduced platelets may potentially reflect certain claims for
rapid bacterial testing of platelets. The geometric mean costs based on
submitted claims for HCPCS code P9072 based on available claims data
from CY 2016 is $491.53, which is a 24-percent reduction from the CY
2017 payment rate of $647.12. Because we believe that there may have
been confusion related to ongoing discussions about changes to the
original code descriptor for HCPCS code P9072, we believe it is
appropriate to continue to crosswalk the payment amount for at least 1
additional year. Therefore, we are proposing for CY 2018 to determine
the payment rate for HCPCS code Q9988 (the successor code to HCPCS code
P9072) by continuing to use the payment rate that has been crosswalked
from HCPCS code P9037 of $647.12.
In this CY 2018 OPPS/ASC proposed rule, we are soliciting public
comments on the proposed APC and status indicator assignments for HCPCS
codes Q9987 and Q9988 for the CY 2018 OPPS update. The proposed payment
rates for HCPCS codes Q9987 and Q9988 can be found in Addendum B to
this proposed rule (which is available via the Internet on the CMS Web
site).
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of
additional groups of covered OPD services that classify devices of
brachytherapy consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 through 68241). As we have
stated in prior OPPS updates, we believe that adopting the general OPPS
prospective payment methodology for brachytherapy sources is
appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per source across hospitals by averaging the extremely high and low
values, in contrast to payment based on hospitals' charges adjusted to
costs. We believe that the OPPS methodology, as opposed
[[Page 33573]]
to payment based on hospitals' charges adjusted to cost, also would
provide hospitals with incentives for efficiency in the provision of
brachytherapy services to Medicare beneficiaries. Moreover, this
approach is consistent with our payment methodology for the vast
majority of items and services paid under the OPPS. We refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323
through 70325) for further discussion of the history of OPPS payment
for brachytherapy sources.
In this CY 2018 OPPS/ASC proposed rule, for CY 2018, we are
proposing to use the costs derived from CY 2016 claims data to set the
proposed CY 2018 payment rates for brachytherapy sources because CY
2016 is the same year of data we are proposing to use to set the
proposed payment rates for most other items and services that would be
paid under the CY 2018 OPPS. We are proposing to base the payment rates
for brachytherapy sources on the geometric mean unit costs for each
source, consistent with the methodology that we are proposing for other
items and services paid under the OPPS, as discussed in section II.A.2.
of this proposed rule. We also are proposing to continue the other
payment policies for brachytherapy sources that we finalized and first
implemented in the CY 2010 OPPS/ASC final rule with comment period (74
FR 60537). We are proposing to pay for the stranded and nonstranded not
otherwise specified (NOS) codes, HCPCS codes C2698 and C2699, at a rate
equal to the lowest stranded or nonstranded prospective payment rate
for such sources, respectively, on a per source basis (as opposed to,
for example, a per mCi), which is based on the policy we established in
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). For
CY 2018 and subsequent years, we also are proposing to continue the
policy we first implemented in the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60537) regarding payment for new brachytherapy
sources for which we have no claims data, based on the same reasons we
discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66786; which was delayed until January 1, 2010 by section 142 of Pub.
L. 110-275). Specifically, this policy is intended to enable us to
assign new HCPCS codes for new brachytherapy sources to their own APCs,
with prospective payment rates set based on our consideration of
external data and other relevant information regarding the expected
costs of the sources to hospitals.
The proposed CY 2018 payment rates for brachytherapy sources are
included in Addendum B to this proposed rule (which is available via
the Internet on the CMS Web site) and are identified with status
indicator ``U''. For CY 2018, we are proposing to assign status
indicator ``E2'' (Items and Services for Which Pricing Information and
Claims Data Are Not Available) to HCPCS code C2645 (Brachytherapy
planar, p-103) because this code was not reported on CY 2016 claims.
Therefore, we are unable to calculate a proposed payment rate based on
the general OPPS ratesetting methodology described earlier. Although
HCPCS code C2645 became effective January 1, 2016, and although we
would expect that if a hospital furnished a brachytherapy source
described by this code in CY 2016, HCPCS code C2645 should appear on
the CY 2016 claims, there are no CY 2016 claims reporting this code. In
addition, unlike new brachytherapy sources HCPCS codes, we will not
consider external data to determine a proposed payment rate for HCPCS
code C2645 for CY 2018. Therefore, we are proposing to assign status
indicator ``E2'' to HCPCS code C2645.
In addition, we assigned status indicator ``E2'' to HCPCS code
C2644 (Brachytherapy cesium-131 chloride) because this code was not
reported on any CY 2015 claims (that is, there were no Medicare claims
submitted by any hospitals in 2015 that reported this HCPCS code). In
our review of CY 2016 claims (which are used to set rates for CY 2018),
we found that one hospital submitted one claim reporting HCPCS code
C2644. Therefore, we are proposing to assign status indicator ``U'' to
HCPCS code 2644, and our payment rates for HCPCS code C2644 will be
based on this information.
We are inviting public comments on our proposals.
We continue to invite hospitals and other parties to submit
recommendations to us for new codes to describe new brachytherapy
sources. Such recommendations should be directed to the Division of
Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid
Services, 7500 Security Boulevard, Baltimore, MD 21244. We will
continue to add new brachytherapy source codes and descriptors to our
systems for payment on a quarterly basis.
b. Proposed Comprehensive APCs (C-APCs) for CY 2018
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014, but the effective
date was delayed until January 1, 2015, to allow additional time for
further analysis, opportunity for public comment, and systems
preparation. The comprehensive APC (C-APC) policy was implemented
effective January 1, 2015, with modifications and clarifications in
response to public comments received regarding specific provisions of
the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. We established C-APCs as a category
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
(79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70332), we finalized 10 additional C-APCs to be
paid under the existing C-APC payment policy. In the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79584 through 79585), we
finalized another 25 C-APCs.
Under this policy, we designated a service described by a HCPCS
code assigned to a C-APC as the primary service when the service is
identified by OPPS status indicator ``J1''. When such a primary service
is reported on a hospital outpatient claim, taking into consideration
the few exceptions that are discussed below, we make payment for all
other items and services reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service (hereinafter collectively referred to as ``adjunctive
services'') and representing components of a complete comprehensive
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
are packaged into the payments for the primary services. This results
in a single prospective payment for each of the primary, comprehensive
services based on the costs of all reported services at the claim
level.
Services excluded from the C-APC policy under the OPPS include
services that are not covered OPD services, services that cannot by
statute be paid for under the OPPS, and services that are required by
statute to be separately paid. This includes certain mammography and
ambulance services that are not covered OPD services in
[[Page 33574]]
accordance with section 1833(t)(1)(B)(iv) of the Act; brachytherapy
seeds, which also are required by statute to receive separate payment
under section 1833(t)(2)(H) of the Act; pass-through drugs and devices,
which also require separate payment under section 1833(t)(6) of the
Act; self-administered drugs (SADs) that are not otherwise packaged as
supplies because they are not covered under Medicare Part B under
section 1861(s)(2)(B) of the Act; and certain preventive services (78
FR 74865 and 79 FR 66800 through 66801). A list of services excluded
from the C-APC policy is included in Addendum J to this proposed rule
(which is available via the Internet on the CMS Web site).
The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period for the C-APCs and modified and
implemented beginning in CY 2015 is summarized as follows (78 FR 74887
and 79 FR 66800):
Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule
with comment period, we define the C-APC payment policy as including
all covered OPD services on a hospital outpatient claim reporting a
primary service that is assigned to status indicator ``J1'', excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS. Services and procedures described by HCPCS
codes assigned to status indicator ``J1'' are assigned to C-APCs based
on our usual APC assignment methodology by evaluating the geometric
mean costs of the primary service claims to establish resource
similarity and the clinical characteristics of each procedure to
establish clinical similarity within each APC.
In the CY 2016 OPPS/ASC final rule with comment period, we expanded
the C-APC payment methodology to qualifying extended assessment and
management encounters through the ``Comprehensive Observation
Services'' C-APC (C-APC 8011). Services within this APC are assigned
status indicator ``J2''. Specifically, we make a payment through C-APC
8011 for a claim that:
Does not contain a procedure described by a HCPCS code to
which we have assigned status indicator ``T'' that is reported with a
date of service on the same day or 1 day earlier than the date of
service associated with services described by HCPCS code G0378;
Contains 8 or more units of services described by HCPCS
code G0378 (Observation services, per hour);
Contains services provided on the same date of service or
1 day before the date of service for HCPCS code G0378 that are
described by one of the following codes: HCPCS code G0379 (Direct
referral of patient for hospital observation care) on the same date of
service as HCPCS code G0378; CPT code 99281 (Emergency department visit
for the evaluation and management of a patient (Level 1)); CPT code
99282 (Emergency department visit for the evaluation and management of
a patient (Level 2)); CPT code 99283 (Emergency department visit for
the evaluation and management of a patient (Level 3)); CPT code 99284
(Emergency department visit for the evaluation and management of a
patient (Level 4)); CPT code 99285 (Emergency department visit for the
evaluation and management of a patient (Level 5)) or HCPCS code G0380
(Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B
emergency department visit (Level 2)); HCPCS code G0382 (Type B
emergency department visit (Level 3)); HCPCS code G0383 (Type B
emergency department visit (Level 4)); HCPCS code G0384 (Type B
emergency department visit (Level 5)); CPT code 99291 (Critical care,
evaluation and management of the critically ill or critically injured
patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient
clinic visit for assessment and management of a patient); and
Does not contain services described by a HCPCS code to
which we have assigned status indicator ``J1''.
The assignment of status indicator ``J2'' to a specific combination
of services performed in combination with each other allows for all
other OPPS payable services and items reported on the claim (excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS) to be deemed adjunctive services representing
components of a comprehensive service and resulting in a single
prospective payment for the comprehensive service based on the costs of
all reported services on the claim (80 FR 70333 through 70336).
Services included under the C-APC payment packaging policy, that
is, services that are typically adjunctive to the primary service and
provided during the delivery of the comprehensive service, include
diagnostic procedures, laboratory tests, and other diagnostic tests and
treatments that assist in the delivery of the primary procedure; visits
and evaluations performed in association with the procedure; uncoded
services and supplies used during the service; durable medical
equipment as well as prosthetic and orthotic items and supplies when
provided as part of the outpatient service; and any other components
reported by HCPCS codes that represent services that are provided
during the complete comprehensive service (78 FR 74865 and 79 FR
66800).
In addition, payment for hospital outpatient department services
that are similar to therapy services and delivered either by therapists
or nontherapists is included as part of the payment for the packaged
complete comprehensive service. These services that are provided during
the perioperative period are adjunctive services and are deemed to be
not therapy services as described in section 1834(k) of the Act,
regardless of whether the services are delivered by therapists or other
nontherapist health care workers. We have previously noted that therapy
services are those provided by therapists under a plan of care in
accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the
Act and are paid for under section 1834(k) of the Act, subject to
annual therapy caps as applicable (78 FR 74867 and 79 FR 66800).
However, certain other services similar to therapy services are
considered and paid for as hospital outpatient department services.
Payment for these nontherapy outpatient department services that are
reported with therapy codes and provided with a comprehensive service
is included in the payment for the packaged complete comprehensive
service. We note that these services, even though they are reported
with therapy codes, are hospital outpatient department services and not
therapy services. Therefore, the requirement for functional reporting
under the regulations at 42 CFR 410.59(a)(4) and 42 CFR 410.60(a)(4)
does not apply. We refer readers to the July 2016 OPPS Change Request
9658 (Transmittal 3523) for further instructions on reporting these
services in the context of a C-APC service.
Items included in the packaged payment provided in conjunction with
the primary service also include all drugs, biologicals, and
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and SADs, unless they function as packaged
supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We
refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit
Policy Manual for a description of our policy on SADs treated as
hospital outpatient supplies, including lists of SADs that function as
supplies and those that do not function as supplies.
We define each hospital outpatient claim reporting a single unit of
a single primary service assigned to status
[[Page 33575]]
indicator ``J1'' as a single ``J1'' unit procedure claim (78 FR 74871
and 79 FR 66801). We sum all line item charges for services included on
the C-APC claim, convert the charges to costs, and calculate the
comprehensive geometric mean cost of one unit of each service assigned
to status indicator ``J1''. (We note that we use the term
``comprehensive'' to describe the geometric mean cost of a claim
reporting ``J1'' service(s) or the geometric mean cost of a C-APC,
inclusive of all of the items and services included in the C-APC
service payment bundle.) Charges for services that would otherwise be
separately payable are added to the charges for the primary service.
This process differs from our traditional cost accounting methodology
only in that all such services on the claim are packaged (except
certain services as described above). We apply our standard data trims,
which exclude claims with extremely high primary units or extreme
costs.
The comprehensive geometric mean costs are used to establish
resource similarity and, along with clinical similarity, dictate the
assignment of the primary services to the C-APCs. We establish a
ranking of each primary service (single unit only) to be assigned to
status indicator ``J1'' according to their comprehensive geometric mean
costs. For the minority of claims reporting more than one primary
service assigned to status indicator ``J1'' or units thereof, we
identify one ``J1'' service as the primary service for the claim based
on our cost-based ranking of primary services. We then assign these
multiple ``J1'' procedure claims to the C-APC to which the service
designated as the primary service is assigned. If the reported ``J1''
services reported on a claim map to different C-APCs, we designate the
``J1'' service assigned to the C-APC with the highest comprehensive
geometric mean cost as the primary service for that claim. If the
reported multiple ``J1'' services on a claim map to the same C-APC, we
designate the most costly service (at the HCPCS code level) as the
primary service for that claim. This process results in initial
assignments of claims for the primary services assigned to status
indicator ``J1'' to the most appropriate C-APCs based on both single
and multiple procedure claims reporting these services and clinical and
resource homogeneity.
Complexity Adjustments. We use complexity adjustments to provide
increased payment for certain comprehensive services. We apply a
complexity adjustment by promoting qualifying paired ``J1'' service
code combinations or paired code combinations of ``J1'' services and
certain add-on codes (as described further below) from the originating
C-APC (the C-APC to which the designated primary service is first
assigned) to the next higher paying C-APC in the same clinical family
of C-APCs. We apply this type of complexity adjustment when the paired
code combination represents a complex, costly form or version of the
primary service according to the following criteria:
Frequency of 25 or more claims reporting the code
combination (frequency threshold); and
Violation of the 2 times rule in the originating C-APC
(cost threshold).
These criteria identify paired code combinations that occur
commonly and exhibit materially greater resource requirements than the
primary service. The CY 2017 OPPS/ASC final rule with comment period
(81 FR 79582) included a revision to the complexity adjustment
eligibility criteria. Specifically, we finalized a policy to
discontinue the requirement that a code combination (that qualifies for
a complexity adjustment by satisfying the frequency and cost criteria
thresholds described above) also not create a 2 times rule violation in
the higher level or receiving APC.
After designating a single primary service for a claim, we evaluate
that service in combination with each of the other procedure codes
reported on the claim assigned to status indicator ``J1'' (or certain
add-on codes) to determine if there are paired code combinations that
meet the complexity adjustment criteria. For a new HCPCS code, we
determine initial C-APC assignment and qualification for a complexity
adjustment using the best available information, crosswalking the new
HCPCS code to a predecessor code(s) when appropriate.
Once we have determined that a particular code combination of
``J1'' services (or combinations of ``J1'' services reported in
conjunction with certain add-on codes) represents a complex version of
the primary service because it is sufficiently costly, frequent, and a
subset of the primary comprehensive service overall according to the
criteria described above, we promote the claim including the complex
version of the primary service as described by the code combination to
the next higher cost C-APC within the clinical family unless the
primary service is already assigned to the highest cost APC within the
C-APC clinical family or assigned to the only C-APC in a clinical
family. We do not create new APCs with a comprehensive geometric mean
cost that is higher than the highest geometric mean cost (or only) C-
APC in a clinical family just to accommodate potential complexity
adjustments. Therefore, the highest payment for any claim including a
code combination for services assigned to a C-APC would be the highest
paying C-APC in the clinical family (79 FR 66802).
We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service add-on combinations may qualify
for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70331), all add-on codes that can be
appropriately reported in combination with a base code that describes a
primary ``J1'' service are evaluated for a complexity adjustment.
To determine which combinations of primary service codes reported
in conjunction with an add-on code may qualify for a complexity
adjustment for CY 2018, in this CY 2018 OPPS/ASC proposed rule, we are
proposing to apply the frequency and cost criteria thresholds discussed
above, testing claims reporting one unit of a single primary service
assigned to status indicator ``J1'' and any number of units of a single
add-on code for the primary J1 service. If the frequency and cost
criteria thresholds for a complexity adjustment are met and
reassignment to the next higher cost APC in the clinical family is
appropriate (based on meeting the criteria outlined above), we make a
complexity adjustment for the code combination; that is, we reassign
the primary service code reported in conjunction with the add-on code
to the next higher cost C-APC within the same clinical family of C-
APCs. As previously stated, we package payment for add-on codes into
the C-APC payment rate. If any add-on code reported in conjunction with
the ``J1'' primary service code does not qualify for a complexity
adjustment, payment for the add-on service continues to be packaged
into the payment for the primary service and is not reassigned to the
next higher cost C-APC. We list the complexity adjustments proposed for
``J1'' and add-on code combinations for CY 2018, along with all of the
other proposed complexity adjustments, in Addendum J to this proposed
rule (which is available via the Internet on the CMS Web site).
Addendum J to this proposed rule includes the cost statistics for
each code combination that would qualify for a complexity adjustment
(including primary code and add-on code
[[Page 33576]]
combinations). Addendum J to this proposed rule also contains summary
cost statistics for each of the paired code combinations that describe
a complex code combination that would qualify for a complexity
adjustment and are proposed to be reassigned to the next higher cost C-
APC within the clinical family. The combined statistics for all
proposed reassigned complex code combinations are represented by an
alphanumeric code with the first 4 digits of the designated primary
service followed by a letter. For example, the proposed geometric mean
cost listed in Addendum J for the code combination described by
complexity adjustment assignment 3320R, which is assigned to C-APC 5224
(Level 4 Pacemaker and Similar Procedures), includes all paired code
combinations that are proposed to be reassigned to C-APC 5224 when CPT
code 33208 is the primary code. Providing the information contained in
Addendum J to this proposed rule allows stakeholders the opportunity to
better assess the impact associated with the proposed reassignment of
claims with each of the paired code combinations eligible for a
complexity adjustment.
(2) Proposed Additional C-APCs for CY 2018
For CY 2018 and subsequent years, in this CY 2018 OPPS/ASC proposed
rule, we are proposing to continue to apply the C-APC payment policy
methodology made effective in CY 2015 and updated with the
implementation of status indicator ``J2'' in CY 2016. A discussion of
the C-APC payment policy methodology can be found at 81 FR 79583.
As a result of our annual review of the services and APC
assignments under the OPPS, we are not proposing any additional C-APCs
to be paid under the existing C-APC payment policy beginning in CY
2018. Table 4 below lists the proposed C-APCs for CY 2018, all of which
were established in past rules. All C-APCs are displayed in Addendum J
to this proposed rule. Addendum J to this proposed rule (which is
available via the Internet on the CMS Web site) also contains all of
the data related to the C-APC payment policy methodology, including the
list of proposed complexity adjustments and other information.
Table 4--Proposed CY 2018 C-APCs
------------------------------------------------------------------------
C-APC CY 2018 APC title Clinical family
------------------------------------------------------------------------
5072.......................... Level 2 Excision/ EBIDX
Biopsy/Incision and
Drainage.
5073.......................... Level 3 Excision/ EBIDX
Biopsy/Incision and
Drainage.
5091.......................... Level 1 Breast/ BREAS
Lymphatic Surgery
and Related
Procedures.
5092.......................... Level 2 Breast/ BREAS
Lymphatic Surgery
and Related
Procedures.
5093.......................... Level 3 Breast/ BREAS
Lymphatic Surgery &
Related Procedures.
5094.......................... Level 4 Breast/ BREAS
Lymphatic Surgery &
Related Procedures.
5112.......................... Level 2 ORTHO
Musculoskeletal
Procedures.
5113.......................... Level 3 ORTHO
Musculoskeletal
Procedures.
5114.......................... Level 4 ORTHO
Musculoskeletal
Procedures.
5115.......................... Level 5 ORTHO
Musculoskeletal
Procedures.
5116.......................... Level 6 ORTHO
Musculoskeletal
Procedures.
5153.......................... Level 3 Airway AENDO
Endoscopy.
5154.......................... Level 4 Airway AENDO
Endoscopy.
5155.......................... Level 5 Airway AENDO
Endoscopy.
5164.......................... Level 4 ENT ENTXX
Procedures.
5165.......................... Level 5 ENT ENTXX
Procedures.
5166.......................... Cochlear Implant COCHL
Procedure.
5191.......................... Level 1 Endovascular VASCX
Procedures.
5192.......................... Level 2 Endovascular VASCX
Procedures.
5193.......................... Level 3 Endovascular VASCX
Procedures.
5194.......................... Level 4 Endovascular VASCX
Procedures.
5200.......................... Implantation Wireless WPMXX
PA Pressure Monitor.
5211.......................... Level 1 EPHYS
Electrophysiologic
Procedures.
5212.......................... Level 2 EPHYS
Electrophysiologic
Procedures.
5213.......................... Level 3 EPHYS
Electrophysiologic
Procedures.
5222.......................... Level 2 Pacemaker and AICDP
Similar Procedures.
5223.......................... Level 3 Pacemaker and AICDP
Similar Procedures.
5224.......................... Level 4 Pacemaker and AICDP
Similar Procedures.
5231.......................... Level 1 ICD and AICDP
Similar Procedures.
5232.......................... Level 2 ICD and AICDP
Similar Procedures.
5244.......................... Level 4 Blood Product SCTXX
Exchange and Related
Services.
5302.......................... Level 2 Upper GI GIXXX
Procedures.
5303.......................... Level 3 Upper GI GIXXX
Procedures.
5313.......................... Level 3 Lower GI GIXXX
Procedures.
5331.......................... Complex GI Procedures GIXXX
5341.......................... Abdominal/Peritoneal/ GIXXX
Biliary and Related
Procedures.
5361.......................... Level 1 Laparoscopy & LAPXX
Related Services.
5362.......................... Level 2 Laparoscopy & LAPXX
Related Services.
5373.......................... Level 3 Urology & UROXX
Related Services.
5374.......................... Level 4 Urology & UROXX
Related Services.
5375.......................... Level 5 Urology & UROXX
Related Services.
5376.......................... Level 6 Urology & UROXX
Related Services.
5377.......................... Level 7 Urology & UROXX
Related Services.
5414.......................... Level 4 Gynecologic GYNXX
Procedures.
5415.......................... Level 5 Gynecologic GYNXX
Procedures.
5416.......................... Level 6 Gynecologic GYNXX
Procedures.
5431.......................... Level 1 Nerve NERVE
Procedures.
[[Page 33577]]
5432.......................... Level 2 Nerve NERVE
Procedures.
5462.......................... Level 2 NSTIM
Neurostimulator &
Related Procedures.
5463.......................... Level 3 NSTIM
Neurostimulator &
Related Procedures.
5464.......................... Level 4 NSTIM
Neurostimulator &
Related Procedures.
5471.......................... Implantation of Drug PUMPS
Infusion Device.
5491.......................... Level 1 Intraocular INEYE
Procedures.
5492.......................... Level 2 Intraocular INEYE
Procedures.
5493.......................... Level 3 Intraocular INEYE
Procedures.
5494.......................... Level 4 Intraocular INEYE
Procedures.
5495.......................... Level 5 Intraocular INEYE
Procedures.
5503.......................... Level 3 Extraocular, EXEYE
Repair, and Plastic
Eye Procedures.
5504.......................... Level 4 Extraocular, EXEYE
Repair, and Plastic
Eye Procedures.
5627.......................... Level 7 Radiation RADTX
Therapy.
5881.......................... Ancillary Outpatient N/A
Services When
Patient Dies.
8011.......................... Comprehensive N/A
Observation Services.
------------------------------------------------------------------------
C-APC Clinical Family Descriptor Key:
AENDO = Airway Endoscopy.
AICDP = Automatic Implantable Cardiac Defibrillators, Pacemakers, and
Related Devices.
BREAS = Breast Surgery.
COCHL = Cochlear Implant.
EBIDX = Excision/Biopsy/Incision and Drainage.
ENTXX = ENT Procedures.
EPHYS = Cardiac Electrophysiology.
EXEYE = Extraocular Ophthalmic Surgery.
GIXXX = Gastrointestinal Procedures.
GYNXX = Gynecologic Procedures.
INEYE = Intraocular Surgery.
LAPXX = Laparoscopic Procedures.
NERVE = Nerve Procedures.
NSTIM = Neurostimulators.
ORTHO = Orthopedic Surgery.
PUMPS = Implantable Drug Delivery Systems.
RADTX = Radiation Oncology.
SCTXX = Stem Cell Transplant.
UROXX = Urologic Procedures.
VASCX = Vascular Procedures.
WPMXX = Wireless PA Pressure Monitor.
(3) Brachytherapy Insertion Procedures
In the CY 2017 OPPS/ASC final rule with comment period (81 FR
79584), we finalized 25 new C-APCs. Some of the HCPCS codes assigned to
the C-APCs established for CY 2017 described surgical procedures for
inserting brachytherapy catheters/needles and other related
brachytherapy procedures such as the insertion of tandem and/or ovoids
and the insertion of Heyman capsules. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79583), we stated that we received
public comments which noted that claims that included several insertion
codes for brachytherapy devices (namely CPT codes 57155 (Insertion of
uterine tandem and/or vaginal ovoids for clinical brachytherapy); 20555
(Placement of needles or catheters into muscle and/or soft tissue for
subsequent interstitial radioelement application (at the time of or
subsequent to the procedure)); 31643 (Bronchoscopy, rigid or flexible,
including fluoroscopic guidance, when performed; with placement of
catheter(s) for intracavitary radioelement application); 41019
(Placement of needles, catheters, or other device(s) into the head and/
or neck region (percutaneous, transoral, or transnasal) for subsequent
interstitial radioelement application); 43241
(Esophagogastroduodenoscopy, flexible, transoral; with insertion of
intraluminal tube catheter); 55920 (Placement of needles or catheters
into pelvic organs and/or genitalia (except prostate) for subsequent
interstitial radioelement application); and 58346 (Insertion of Heyman
capsules for clinical brachytherapy)) often did not also contain a
brachytherapy treatment delivery code (CPT codes 77750 through 77799).
The commenters concluded that brachytherapy delivery charges are being
underrepresented in ratesetting under the C-APC methodology because a
correctly coded claim should typically include an insertion and
treatment delivery code combination. The commenters stated that the
insertion procedure and brachytherapy treatment delivery generally
occur on the same day or within the same week and therefore the
services should appear on a claim together. We indicated that we would
not exclude claims from the CY 2017 ratesetting calculation because we
generally do not remove claims from the claims accounting when
stakeholders believe that hospitals included incorrect information on
some claims. However, we stated that we would examine the claims for
the brachytherapy insertion codes in question and determine if any
future adjustment to the methodology (or possibly code edits) would be
appropriate.
We analyzed the claims that include brachytherapy insertion codes
assigned to status indicator ``J1'' and that received payment through a
C-APC, and we determined that several of these codes are frequently
billed without an associated brachytherapy treatment code. As mentioned
above, stakeholders have expressed concerns that using claims for
ratesetting for brachytherapy insertion procedures that do not also
include a brachytherapy treatment code may not capture all of the costs
associated with the insertion procedure. To address this issue and base
payment on claims for the most common clinical scenario, for CY 2018
and subsequent years, we are establishing a code edit that requires a
brachytherapy treatment
[[Page 33578]]
code when a brachytherapy insertion code is billed.
As noted in section II.A.2.c. of this proposed rule, we also are
proposing to delete composite APC 8001 (LDR Prostate Brachytherapy
Composite) and assign HCPCS code 55875 (Transperineal placement of
needles or catheters into prostate for interstitial radioelement
application, with or without cystoscopy) to status indicator ``J1'' and
to provide payment for this procedure through the C-APC payment
methodology similar to the payment methodology for other surgical
insertion procedures related to brachytherapy. Specifically, when HCPCS
code 55875 is the primary service reported on a hospital outpatient
claim, we are proposing to package payments for all adjunctive services
reported on the claim into the payment for HCPCS code 55875. We are
proposing to assign HCPCS code 55875 to C-APC 5375 (Level 5 Urology and
Related Services). The code edit for claims with brachytherapy services
described above that will be effective January 1, 2018 will require the
brachytherapy application HCPCS code 77778 (Interstitial radiation
source application; complex) to be included on the claim with the
brachytherapy insertion procedure (HCPCS code 55875). The brachytherapy
insertion codes that will be required to be billed with a brachytherapy
treatment code are listed in Table 5 listed below.
Table 5--Proposed Brachytherapy Insertion Procedures Assigned to Status
Indicator ``J1''
------------------------------------------------------------------------
HCPCS code Long descriptor
------------------------------------------------------------------------
19296....................... Placement of radiotherapy afterloading
expandable catheter (single or
multichannel) into the breast for
interstitial radioelement application
following partial mastectomy, includes
imaging guidance; on date separate from
partial mastectomy.
19298....................... Placement of radiotherapy after loading
brachytherapy catheters (multiple tube
and button type) into the breast for
interstitial radioelement application
following (at the time of or subsequent
to) partial mastectomy, includes imaging
guidance.
19499....................... Unlisted procedure, breast.
20555....................... Placement of needles or catheters into
muscle and/or soft tissue for subsequent
interstitial radioelement application (at
the time of or subsequent to the
procedure).
31643....................... Bronchoscopy, rigid or flexible, including
fluoroscopic guidance, when performed;
with placement of catheter(s) for
intracavitary radioelement application.
41019....................... Placement of needles, catheters, or other
device(s) into the head and/or neck
region (percutaneous, transoral, or
transnasal) for subsequent interstitial
radioelement application.
43241....................... Esophagogastroduodenoscopy, flexible,
transoral; with insertion of intraluminal
tube catheter.
55875....................... Transperineal placement of needles or
catheters into prostate for interstitial
radioelement application, with or without
cystoscopy.
55920....................... Placement of needles or catheters into
pelvic organs and/or genitalia (except
prostate) for subsequent interstitial
radioelement application.
57155....................... Insertion of uterine tandem and/or vaginal
ovoids for clinical brachytherapy.
58346....................... Insertion of Heyman capsules for clinical
brachytherapy.
------------------------------------------------------------------------
(4) C-APC 5627 (Level 7 Radiation Therapy) Stereotactic Radiosurgery
(SRS)
Stereotactic radiosurgery (SRS) is a type of radiation therapy that
targets multiple beams of radiation to precisely deliver radiation to a
brain tumor while sparing the surrounding normal tissue. SRS treatment
can be delivered by Cobalt-60-based (also referred to as gamma knife)
technology or robotic linear accelerator-based (LINAC)-based
technology. As stated in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70336), section 634 of the American Taxpayer Relief Act
(ATRA) of 2012 (Pub. L. 112-240) amended section 1833(t)(16) of the Act
by adding a new subparagraph (D) to require that OPPS payments for
Cobalt-60-based SRS be reduced to equal that of payments for LINAC-
based SRS for covered OPD services furnished on or after April 1, 2013.
Because section 1833(t)(16)(D) of the Act requires equal payment for
SRS treatment delivered by Cobalt-60-based or LINAC-based technology,
the two types of services involving SRS delivery instruments (which are
described by HCPCS code 77371 (Radiation treatment delivery,
stereotactic radiosurgery [SRS], complete course of treatment cranial
lesion(s) consisting of 1 session; multi-source Cobalt 60-based) and
HCPCS code 77372 (Linear accelerator-based)) are assigned to the same
C-APC (C-APC 5627 Level 7 Radiation Therapy).
In the CY 2016 OPPS/ASC final rule with comment period (80 FR
70336), we stated that we had identified differences in the billing
patterns for SRS procedures delivered using Cobalt-60-based and LINAC-
based technologies. In particular, our claims data analysis revealed
that services involving SRS delivered by Cobalt-60-based technologies
(as described by HCPCS code 77371) typically included SRS treatment
planning services (for example, imaging studies, radiation treatment
aids, and treatment planning) and the actual deliveries of SRS
treatment on the same date of service and reported on the same claim.
In contrast, claims data analysis results revealed that services
involving SRS delivered by LINAC-based technologies (as described by
HCPCS code 77372) frequently included services related to SRS treatment
(for example, imaging studies, radiation treatment aids, and treatment
planning) that were provided on different dates of service and reported
on claims separate from the actual delivery of SRS treatment.
We stated in the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70336) that the intent of the C-APC policy is to package payment
for all services adjunctive to the primary ``J1'' procedure and that we
believed that all essential planning and preparation services related
to the SRS treatment are adjunctive to the SRS treatment delivery
procedure. Therefore, payment for these adjunctive services should be
packaged into the C-APC payment for the SRS treatment instead of
reported on a different claim and paid separately. To identify services
that are adjunctive to the primary SRS treatment described by HCPCS
codes 77371 and 77372, but reported on a different claim, we
established modifier ``CP'' which became effective in CY 2016 and
required the use of the modifier for CY 2016 and CY 2017.
To ensure appropriate ratesetting for the SRS C-APC, we believed it
was necessary to unbundle payment for the adjunctive services for CY
2016 and CY 2017. Therefore, we finalized a policy to change the
payment for SRS treatment for the 10 SRS planning and preparation
services identified in our claims data (HCPCS codes 70551, 70552,
70553, 77011, 77014, 77280, 77285, 77290, 77295, and 77336) that were
reported
[[Page 33579]]
differentially using HCPCS codes 77371 and 77372 both on the same claim
as the SRS services and on claims 1 month prior to the delivery of SRS
services. These codes were removed from the geometric mean cost
calculations for C-APC 5627. In addition, for CY 2016 and CY 2017, we
provided separate payment for the 10 planning and preparation services
adjunctive to the delivery of the SRS treatment using either the
Cobalt-60-based or LINAC-based technology, even when the planning
service was included on the same claim as the primary ``J1'' SRS
treatment service. The use of the modifier ``CP'' was not required to
identify these 10 planning and preparation codes.
The data collection period for SRS claims with modifier ``CP''
began on January 1, 2016 and concludes on December 31, 2017. Based on
our analysis of preliminary data collected with modifier ``CP'', we
have identified some additional services that are adjunctive to the
primary SRS treatment and reported on a different claim outside of the
10 SRS planning and preparation codes that were removed from the SRS C-
APC costs calculations and paid separately.
However, the ``CP'' modifier has been used by a small number of
providers since its establishment. In addition, our analysis showed
that several of the HCPCS codes that were billed with modifier ``CP''
belonged to the group of 10 SRS planning and preparation codes that we
pay separately and do not require the use of modifier ``CP''. Also,
some providers erroneously included the modifier when reporting the
HCPCS code for the delivery of the LINAC-based SRS treatment. As stated
above, the data collection period for SRS claims with modifier ``CP''
was set to conclude on December 31, 2017. Accordingly, for CY 2018, we
are deleting this modifier and discontinuing its required use.
For CY 2018, we also are proposing to continue to make separate
payments for the 10 planning and preparation services adjunctive to the
delivery of the SRS treatment using either the Cobalt-60-based or
LINAC-based technology when furnished to a beneficiary within 1 month
of the SRS treatment. The continued separate payment of these services
will allow us to complete our analysis of the claims data including
modifier ``CP'' from both CY 2016 and CY 2017 claims. As stated in the
CY 2017 OPPS/ASC final rule with comment period (81 FR 79583), we will
consider in the future whether repackaging all adjunctive services
(planning, preparation, and imaging, among others) back into cranial
single session SRS is appropriate.
We are inviting public comments on these proposals.
(5) Proposed Complexity Adjustment for Blue Light Cystoscopy Procedures
As discussed in prior OPPS/ASC final rules with comment period, and
most recently in the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79668), we continue to believe that Cysview[supreg]
(hexaminolevulinate HCl) (described by HCPCS code C9275) is a drug that
functions as a supply in a diagnostic test or procedure and is
therefore packaged with payment for the primary procedure. In addition,
as discussed in section II.A.2.b.(1) of this proposed rule, drugs that
are not eligible for pass-through payment are always packaged when
billed with a comprehensive service. To maintain the integrity of a
prospective payment system, we believe it is generally not appropriate
to allow exceptions to our drug packaging policy or comprehensive APC
policy that would result in separate payment for the drug based on the
product's ASP+6 percent payment rate. While we are not proposing to pay
separately for Cysview[supreg], we have heard concerns from
stakeholders that the payment for blue light cystoscopy procedures
involving Cysview[supreg] may be creating a barrier to access
reasonable and necessary care for which there may not be a clinically
comparable alternative. Therefore, we are revisiting our payment policy
for blue light cystoscopy procedures. As described in more detail
below, we believe certain code combinations for blue light cystoscopy
procedures should be eligible to qualify for a complexity adjustment,
given the unique properties of the procedure and resource costs.
Traditionally, white light (or standard) cystoscopy, typically
performed by urologists, has been the gold standard for diagnosing
bladder cancer. Enhanced bladder cancer diagnostics, such as narrow
band imaging or blue light cystoscopy, increase tumor detection in
nonmuscle invasive bladder cancer over white light cystoscopy alone,
thus enabling more precise tumor removal by the urologist. Blue light
cystoscopy can only be performed after performance of white light
cystoscopy. Because blue light cystoscopy requires specialized imaging
equipment to view cellular uptake of the dye that is not otherwise used
in white light cystoscopy procedures, some practitioners consider blue
light cystoscopy to be a distinct and adjunctive procedure to white
light cystoscopy. However, the current CPT coding structure for
cystoscopy procedures does not identify blue light cystoscopy in the
coding descriptions separate from white light cystoscopy. Therefore,
the existing cystoscopy CPT codes do not distinguish cystoscopy
procedures involving only white light cystoscopy from those involving
both white and blue light procedures, which require additional
resources compared to white light cystoscopy alone.
After discussion with our clinical advisors (including a
urologist), we believe that blue light cystoscopy represents an
additional elective but distinguishable service as compared to white
light cystoscopy that in some cases may allow greater detection of
bladder tumors in beneficiaries relative to white light cystoscopy
alone. Given the additional equipment, supplies, operating room time,
and other resources required to perform blue light cystoscopy in
addition to white light cystoscopy, for CY 2018, we are proposing to
create a new HCPCS C-code to describe blue light cystoscopy (HCPCS code
C97XX (Adjunctive blue light cystoscopy with fluorescent imaging agent
(List separately in addition to code for primary procedure)) and to
allow for a complexity adjustment to APC 5374 (Level 4 Urology and
Related Services) for certain code combinations in APC 5373 (Level 3
Urology and Related Services). Specifically, to determine which code
pair combinations of proposed new HCPCS code C97XX and cystoscopy
procedure would qualify for a complexity adjustment, we first
crosswalked the costs of HCPCS code C9275 (Hexaminolevulinate hcl) to
the proposed new HCPCS code C97XX assigned status indicator ``N''.
Next, we identified the procedure codes used to describe white light
cystoscopy of the bladder which include the following CPT codes and APC
assignments:
APC 5372 (Level 2 Urology and Related Services)
[squ] CPT code 52000
APC 5373 (Level 3 Urology and Related Services
[squ] CPT code 52204
[squ] CPT code 52214
[squ] CPT code 52224
APC 5374 (Level 4 Urology and Related Services)
[squ] CPT code 52234
[squ] CPT code 52235
APC 5375 (Level 5 Urology and Related Services)
[squ] CPT code 52240
Because APC 5372 is not a C-APC, cystoscopy procedures assigned to
Level 2 Urology are not eligible for a complexity adjustment, and
therefore,
[[Page 33580]]
we did not analyze these codes to determine whether they were eligible
for a complexity adjustment. We modeled the data to determine which
code pair combinations exceed the claim frequency and cost threshold in
APC 5373, APC 5374, and APC 5375, which are all C-APCs. Results of our
analysis indicate that the code pair combination of proposed new HCPCS
code C97XX and cystoscopy procedures assigned to APC 5373 would be
eligible for a complexity adjustment based on current criteria and cost
data because they meet the frequency and cost criteria thresholds.
Likewise, our results indicate that the combination of proposed new
HCPCS code C97XX and cystoscopy procedures assigned to APC 5374 and APC
5375 would not qualify for a complexity adjustment because they do not
meet the frequency and cost criteria thresholds.
Under the C-APC policy, blue light cystoscopy would be packaged,
but when performed with a cystoscopy procedure in APC 5373 and reported
with proposed new HCPCS code C97XX in addition to the cystoscopy CPT
code, there would be a complexity adjustment to the next higher level
APC in the series, resulting in a higher payment than for the white
light cystoscopy procedure alone. That is, if the code pair combination
of proposed new HCPCS code C97XX with CPT code 52204, 52214, or 52224
is reported on a claim, the claim will qualify for payment reassignment
from APC 5373 to APC 5374. We plan to track the utilization and the
costs associated with white light/blue light cystoscopy procedure
combinations that will receive a complexity adjustment.
We are inviting public comments on our CY 2018 proposal to allow
for a complexity adjustment when a white light followed by blue light
cystoscopy procedure is performed. In addition, we are seeking public
comments on whether alternative procedures, such as narrow band
imaging, may be disadvantaged by this proposed policy.
(6) Analysis of C-APC Packaging under the OPPS
In the CY 2017 OPPS/ASC final rule with comment period (81 FR
79584), we accepted a recommendation made at the August 22, 2016 HOP
Panel meeting to analyze the effects of C-APCs. The HOP panel
recommendation did not elucidate specific concerns with the C-APC
policy or provide detailed recommendations on particular aspects of the
policy to analyze. Therefore, we took a broad approach in studying
HCPCS codes and APCs subject to the C-APC policy to determine whether
aberrant trends in the data existed. Overall, we observed no such
aberrancies and believe that the C-APC policy is working as intended.
Specifically, using OPPS claims data from the CY 2016 final rule,
the CY 2017 final rule, and the CY 2018 proposed rule, which reflect an
observation period of CY 2014 to CY 2016, we examined the effects of C-
APCs and their impact on OPPS payments. We started with all hospital
outpatient claims billed on the 13X claim-type and from that,
separately identified HCPCS codes and APCs that were subject to the
comprehensive methodology in CYs 2015 and 2016 (that is, HCPCS codes or
APCs assigned status indicator ``J1'' or ``J2''). Next, we analyzed the
claims to create a subset of claims that contain the HCPCS codes and
APCs that were subject to the comprehensive methodology. Using the
claims noted above, we analyzed claim frequency, line frequency, number
of billing units, and the total OPPS payment between CYs 2014 and 2016
for each HCPCS and APC that had been previously identified. In
reviewing the cost statistics for HCPCS codes for procedures with
status indicator ``S'', ``T'', or ``V'' in CY 2014 that were assigned
to a C-APC in either CY 2015 or CY 2016, overall, we observed an
increase in claim line frequency, units billed, and Medicare payment,
which suggest that the C-APC payment policy did not adversely affect
access or reduce payments to hospitals. Decreases in these cost
statistics would suggest our comprehensive packaging logic is not
working as intended and/or the C-APC payment rates were inadequate,
resulting in lower volume due to migration of services to other
settings or the cessation of providing these services. Likewise,
because the cost statistics of major separately payable codes (that is,
HCPCS codes with status indicator ``S'', ``T'', or ``V'') that were
packaged into a C-APC prospectively were consistent with the cost
statistics of the codes packaged on the claim in actuality, indicate
that costs were appropriately redistributed, we believe the C-APC
payment methodology is working as intended.
c. Proposed Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide necessary, high quality care as
efficiently as possible. For CY 2008, we developed composite APCs to
provide a single payment for groups of services that are typically
performed together during a single clinical encounter and that result
in the provision of a complete service. Combining payment for multiple,
independent services into a single OPPS payment in this way enables
hospitals to manage their resources with maximum flexibility by
monitoring and adjusting the volume and efficiency of services
themselves. An additional advantage to the composite APC model is that
we can use data from correctly coded multiple procedure claims to
calculate payment rates for the specified combinations of services,
rather than relying upon single procedure claims which may be low in
volume and/or incorrectly coded. Under the OPPS, we currently have
composite policies for low dose rate (LDR) prostate brachytherapy,
mental health services, and multiple imaging services. We refer readers
to the CY 2008 OPPS/ASC final rule with comment period for a full
discussion of the development of the composite APC methodology (72 FR
66611 through 66614 and 66650 through 66652) and the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74163) for more recent
background.
In this CY 2018 OPPS/ASC proposed rule, for CY 2018 and subsequent
years, we are proposing to continue our composite APC payment policies
for mental health services and multiple imaging services, as discussed
below. As discussed in section II.A.2.b. of this proposed rule, we are
proposing to assign CPT code 55875 (Transperineal placement of needs or
catheters into prostate for interstitial radioelement application, with
or without cystoscopy) a status indicator of ``J1'' and assign it to a
C-APC. In conjunction with this proposal, we also are proposing to
delete the low dose rate (LDR) prostate brachytherapy composite APC for
CY 2018 and subsequent years.
(1) Mental Health Services Composite APC
In this CY 2018 OPPS/ASC proposed rule, we are proposing to
continue our longstanding policy of limiting the aggregate payment for
specified less resource-intensive mental health services furnished on
the same date to the payment for a day of partial hospitalization
services provided by a hospital, which we consider to be the most
resource-intensive of all outpatient mental health services. We refer
readers to the April 7, 2000 OPPS final rule with comment period (65 FR
18452 through 18455) for the initial discussion of this longstanding
policy and the CY 2012 OPPS/ASC final rule with comment period (76 FR
74168) for more recent background.
[[Page 33581]]
In the CY 2017 OPPS/ASC final rule (81 FR 79588 through 79589), we
finalized a policy to combine the existing Level 1 and Level 2
hospital-based PHP APCs into a single hospital-based PHP APC and,
thereby, discontinue APCs 5861 (Level 1 Partial Hospitalization (3
services) for Hospital-Based PHPs) and 5862 (Level 2 Partial
Hospitalization (4 or more services) for Hospital-Based PHPs) and
replace them with new APC 5863 (Partial Hospitalization (3 or more
services per day)). For CY 2018, and subsequent years, we are proposing
that when the aggregate payment for specified mental health services
provided by one hospital to a single beneficiary on a single date of
service, based on the payment rates associated with the APCs for the
individual services, exceeds the maximum per diem payment rate for
partial hospitalization services provided by a hospital, those
specified mental health services would be paid through composite APC
8010 (Mental Health Services Composite) for CY 2018. In addition, we
are proposing to set the payment rate for composite APC 8010 for CY
2018 at the same payment rate that we are proposing for APC 5863, which
is the maximum partial hospitalization per diem payment rate for a
hospital, and that the hospital continue to be paid the payment rate
for composite APC 8010. Under this policy, the I/OCE would continue to
determine whether to pay for these specified mental health services
individually, or to make a single payment at the same payment rate
established for APC 5863 for all of the specified mental health
services furnished by the hospital on that single date of service. We
continue to believe that the costs associated with administering a
partial hospitalization program at a hospital represent the most
resource intensive of all outpatient mental health services. Therefore,
we do not believe that we should pay more for mental health services
under the OPPS than the highest partial hospitalization per diem
payment rate for hospitals.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, in order to reflect and
promote the efficiencies hospitals can achieve when performing multiple
imaging procedures during a single session (73 FR 41448 through 41450).
We utilize three imaging families based on imaging modality for
purposes of this methodology: (1) Ultrasound; (2) computed tomography
(CT) and computed tomographic angiography (CTA); and (3) magnetic
resonance imaging (MRI) and magnetic resonance angiography (MRA). The
HCPCS codes subject to the multiple imaging composite policy and their
respective families are listed in Table 12 of the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74920 through 74924).
While there are three imaging families, there are five multiple
imaging composite APCs due to the statutory requirement under section
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
services provided with and without contrast. While the ultrasound
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast.
The five multiple imaging composite APCs established in CY 2009 are:
APC 8004 (Ultrasound Composite);
APC 8005 (CT and CTA without Contrast Composite);
APC 8006 (CT and CTA with Contrast Composite);
APC 8007 (MRI and MRA without Contrast Composite); and
APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the ``with contrast''
composite APCs as having at least one or more imaging procedures from
the same family performed with contrast on the same date of service.
For example, if the hospital performs an MRI without contrast during
the same session as at least one other MRI with contrast, the hospital
will receive payment based on the payment rate for APC 8008, the ``with
contrast'' composite APC.
We make a single payment for those imaging procedures that qualify
for payment based on the composite APC payment rate, which includes any
packaged services furnished on the same date of service. The standard
(noncomposite) APC assignments continue to apply for single imaging
procedures and multiple imaging procedures performed across families.
For a full discussion of the development of the multiple imaging
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68559 through 68569).
In this CY 2018 OPPS/ASC proposed rule, we are proposing, for CY
2018 and subsequent years, to continue to pay for all multiple imaging
procedures within an imaging family performed on the same date of
service using the multiple imaging composite APC payment methodology.
We continue to believe that this policy would reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session.
The proposed CY 2018 payment rates for the five multiple imaging
composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) are based on
proposed geometric mean costs calculated from a partial year of CY 2016
claims available for this CY 2018 OPPS/ASC proposed rule that qualified
for composite payment under the current policy (that is, those claims
reporting more than one procedure within the same family on a single
date of service). To calculate the proposed geometric mean costs, we
used the same methodology that we used to calculate the final geometric
mean costs for these composite APCs since CY 2014, as described in the
CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The
imaging HCPCS codes referred to as ``overlap bypass codes'' that we
removed from the bypass list for purposes of calculating the proposed
multiple imaging composite APC geometric mean costs, in accordance with
our established methodology as stated in the CY 2014 OPPS/ASC final
rule with comment period (78 FR 74918), are identified by asterisks in
Addendum N to this CY 2018 OPPS/ASC proposed rule (which is available
via the Internet on the CMS Web site) and are discussed in more detail
in section II.A.1.b. of this CY 2018 OPPS/ASC proposed rule.
For this CY 2018 OPPS/ASC proposed rule, we were able to identify
approximately 634,918 ``single session'' claims out of an estimated 1.7
million potential claims for payment through composite APCs from our
ratesetting claims data, which represents approximately 36 percent of
all eligible claims, to calculate the proposed CY 2018 geometric mean
costs for the multiple imaging composite APCs. Table 6 of this CY 2018
OPPS/ASC proposed rule lists the proposed HCPCS codes that would be
subject to the multiple imaging composite APC policy and their
respective families and approximate composite APC proposed geometric
mean costs for CY 2018.
[[Page 33582]]
Table 6--Proposed OPPS Imaging Families and Multiple Imaging Procedure
Composite APCs
------------------------------------------------------------------------
------------------------------------------------------------------------
Family 1--Ultrasound
------------------------------------------------------------------------
Proposed CY 2018 APC 8004 (Ultrasound Proposed CY 2018 Approximate
Composite) APC Geometric Mean Cost = $303
------------------------------------------------------------------------
76700.................................. Us exam, abdom, complete.
76705.................................. Echo exam of abdomen.
76770.................................. Us exam abdo back wall, comp.
76776.................................. Us exam k transpl w/Doppler.
76831.................................. Echo exam, uterus.
76856.................................. Us exam, pelvic, complete.
76857.................................. Us exam, pelvic, limited.
------------------------------------------------------------------------
Family 2--CT and CTA with and without Contrast
------------------------------------------------------------------------
Proposed CY 2018 APC 8005 (CT and CTA Proposed CY 2018 Approximate
without Contrast Composite)* APC Geometric Mean Cost = $280
------------------------------------------------------------------------
70450.................................. Ct head/brain w/o dye.
70480.................................. Ct orbit/ear/fossa w/o dye.
70486.................................. Ct maxillofacial w/o dye.
70490.................................. Ct soft tissue neck w/o dye.
71250.................................. Ct thorax w/o dye.
72125.................................. Ct neck spine w/o dye.
72128.................................. Ct chest spine w/o dye.
72131.................................. Ct lumbar spine w/o dye.
72192.................................. Ct pelvis w/o dye.
73200.................................. Ct upper extremity w/o dye.
73700.................................. Ct lower extremity w/o dye.
74150.................................. Ct abdomen w/o dye.
74261.................................. Ct colonography, w/o dye.
74176.................................. Ct angio abd & pelvis.
------------------------------------------------------------------------
Proposed CY 2018 APC 8006 (CT and CTA Proposed CY 2018 Approximate
with Contrast Composite) APC Geometric Mean Cost = $503
------------------------------------------------------------------------
70487.................................. Ct maxillofacial w/dye.
70460.................................. Ct head/brain w/dye.
70470.................................. Ct head/brain w/o & w/dye.
70481.................................. Ct orbit/ear/fossa w/dye.
70482.................................. Ct orbit/ear/fossa w/o & w/dye.
70488.................................. Ct maxillofacial w/o & w/dye.
70491.................................. Ct soft tissue neck w/dye.
70492.................................. Ct sft tsue nck w/o & w/dye.
70496.................................. Ct angiography, head.
70498.................................. Ct angiography, neck.
71260.................................. Ct thorax w/dye.
71270.................................. Ct thorax w/o & w/dye.
71275.................................. Ct angiography, chest.
72126.................................. Ct neck spine w/dye.
72127.................................. Ct neck spine w/o & w/dye.
72129.................................. Ct chest spine w/dye.
72130.................................. Ct chest spine w/o & w/dye.
72132.................................. Ct lumbar spine w/dye.
72133.................................. Ct lumbar spine w/o & w/dye.
72191.................................. Ct angiograph pelv w/o & w/dye.
72193.................................. Ct pelvis w/dye.
72194.................................. Ct pelvis w/o & w/dye.
73201.................................. Ct upper extremity w/dye.
73202.................................. Ct uppr extremity w/o & w/dye.
73206.................................. Ct angio upr extrm w/o & w/dye.
73701.................................. Ct lower extremity w/dye.
73702.................................. Ct lwr extremity w/o & w/dye.
73706.................................. Ct angio lwr extr w/o & w/dye.
74160.................................. Ct abdomen w/dye.
74170.................................. Ct abdomen w/o & w/dye.
74175.................................. Ct angio abdom w/o & w/dye.
74262.................................. Ct colonography, w/dye.
75635.................................. Ct angio abdominal arteries.
74177.................................. Ct angio abd & pelv w/contrast.
74178.................................. Ct angio abd & pelv 1+ regns.
------------------------------------------------------------------------
* If a ``without contrast'' CT or CTA procedure is performed during the
same session as a ``with contrast'' CT or CTA procedure, the I/OCE
assigns the procedure to APC 8006 rather than APC 8005..
------------------------------------------------------------------------
[[Page 33583]]
Family 3--MRI and MRA with and without Contrast
------------------------------------------------------------------------
Proposed CY 2018 APC 8007 (MRI and MRA Proposed CY 2018 Approximate
without Contrast Composite) * APC Geometric Mean Cost = $571
------------------------------------------------------------------------
70336.................................. Magnetic image, jaw joint.
70540.................................. Mri orbit/face/neck w/o dye.
70544.................................. Mr angiography head w/o dye.
70547.................................. Mr angiography neck w/o dye.
70551.................................. Mri brain w/o dye.
70554.................................. Fmri brain by tech.
71550.................................. Mri chest w/o dye.
72141.................................. Mri neck spine w/o dye.
72146.................................. Mri chest spine w/o dye.
72148.................................. Mri lumbar spine w/o dye.
72195.................................. Mri pelvis w/o dye.
73218.................................. Mri upper extremity w/o dye.
73221.................................. Mri joint upr extrem w/o dye.
73718.................................. Mri lower extremity w/o dye.
73721.................................. Mri jnt of lwr extre w/o dye.
74181.................................. Mri abdomen w/o dye.
75557.................................. Cardiac mri for morph.
75559.................................. Cardiac mri w/stress img.
C8901.................................. MRA w/o cont, abd.
C8904.................................. MRI w/o cont, breast, uni.
C8907.................................. MRI w/o cont, breast, bi.
C8910.................................. MRA w/o cont, chest.
C8913.................................. MRA w/o cont, lwr ext.
C8919.................................. MRA w/o cont, pelvis.
C8932.................................. MRA, w/o dye, spinal canal.
C8935.................................. MRA, w/o dye, upper extr.
------------------------------------------------------------------------
Proposed CY 2018 APC 8008 (MRI and MRA Proposed CY 2018 Approximate
with Contrast Composite) APC Geometric Mean Cost = $888
------------------------------------------------------------------------
70549.................................. Mr angiograph neck w/o & w/dye.
70542.................................. Mri orbit/face/neck w/dye.
70543.................................. Mri orbt/fac/nck w/o & w/dye.
70545.................................. Mr angiography head w/dye.
70546.................................. Mr angiograph head w/o & w/dye.
70547.................................. Mr angiography neck w/o dye.
70548.................................. Mr angiography neck w/dye.
70552.................................. Mri brain w/dye.
70553.................................. Mri brain w/o & w/dye.
71551.................................. Mri chest w/dye.
71552.................................. Mri chest w/o & w/dye.
72142.................................. Mri neck spine w/dye.
72147.................................. Mri chest spine w/dye.
72149.................................. Mri lumbar spine w/dye.
72156.................................. Mri neck spine w/o & w/dye.
72157.................................. Mri chest spine w/o & w/dye.
72158.................................. Mri lumbar spine w/o & w/dye.
72196.................................. Mri pelvis w/dye.
72197.................................. Mri pelvis w/o & w/dye.
73219.................................. Mri upper extremity w/dye.
73220.................................. Mri uppr extremity w/o & w/dye.
73222.................................. Mri joint upr extrem w/dye.
73223.................................. Mri joint upr extr w/o & w/dye.
73719.................................. Mri lower extremity w/dye.
73720.................................. Mri lwr extremity w/o & w/dye.
73722.................................. Mri joint of lwr extr w/dye.
73723.................................. Mri joint lwr extr w/o & w/dye.
74182.................................. Mri abdomen w/dye.
74183.................................. Mri abdomen w/o & w/dye.
75561.................................. Cardiac mri for morph w/dye.
75563.................................. Card mri w/stress img & dye.
C8900.................................. MRA w/cont, abd.
C8902.................................. MRA w/o fol w/cont, abd.
C8903.................................. MRI w/cont, breast, uni.
C8905.................................. MRI w/o fol w/cont, brst, un.
C8906.................................. MRI w/cont, breast, bi.
C8908.................................. MRI w/o fol w/cont, breast.
C8909.................................. MRA w/cont, chest.
C8911.................................. MRA w/o fol w/cont, chest.
[[Page 33584]]
C8912.................................. MRA w/cont, lwr ext.
C8914.................................. MRA w/o fol w/cont, lwr ext.
C8918.................................. MRA w/cont, pelvis.
C8920.................................. MRA w/o fol w/cont, pelvis.
C8931.................................. MRA, w/dye, spinal canal.
C8933.................................. MRA, w/o&w/dye, spinal canal.
C8934.................................. MRA, w/dye, upper extremity.
C8936.................................. MRA, w/o&w/dye, upper extr.
------------------------------------------------------------------------
* If a ``without contrast'' MRI or MRA procedure is performed during the
same session as a ``with contrast'' MRI or MRA procedure, the I/OCE
assigns the procedure to APC 8008 rather than APC 8007..
------------------------------------------------------------------------
3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
Like other prospective payment systems, the OPPS relies on the
concept of averaging to establish a payment rate for services. The
payment may be more or less than the estimated cost of providing a
specific service or a bundle of specific services for a particular
patient. The OPPS packages payment for multiple interrelated items and
services into a single payment to create incentives for hospitals to
furnish services most efficiently and to manage their resources with
maximum flexibility. Our packaging policies support our strategic goal
of using larger payment bundles in the OPPS to maximize hospitals'
incentives to provide care in the most efficient manner. For example,
where there are a variety of devices, drugs, items, and supplies that
could be used to furnish a service, some of which are more costly than
others, packaging encourages hospitals to use the most cost-efficient
item that meets the patient's needs, rather than to routinely use a
more expensive item, which often occurs if separate payment is provided
for the item.
Packaging also encourages hospitals to effectively negotiate with
manufacturers and suppliers to reduce the purchase price of items and
services or to explore alternative group purchasing arrangements,
thereby encouraging the most economical health care delivery.
Similarly, packaging encourages hospitals to establish protocols that
ensure that necessary services are furnished, while scrutinizing the
services ordered by practitioners to maximize the efficient use of
hospital resources. Packaging payments into larger payment bundles
promotes the predictability and accuracy of payment for services over
time. Finally, packaging may reduce the importance of refining service-
specific payment because packaged payments include costs associated
with higher cost cases requiring many ancillary items and services and
lower cost cases requiring fewer ancillary items and services. Because
packaging encourages efficiency and is an essential component of a
prospective payment system, packaging payment for items and services
that are typically integral, ancillary, supportive, dependent, or
adjunctive to a primary service has been a fundamental part of the OPPS
since its implementation in August 2000. For an extensive discussion of
the history and background of the OPPS packaging policy, we refer
readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70343), and the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79592). As we continue to develop
larger payment groups that more broadly reflect services provided in an
encounter or episode of care, we have expanded the OPPS packaging
policies. Most, but not necessarily all, items and services currently
packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching
goal is to make OPPS payments for all services paid under the OPPS more
consistent with those of a prospective payment system and less like
those of a per-service fee schedule, which pays separately for each
coded item. As a part of this effort, we have continued to examine the
payment for items and services provided under the OPPS to determine
which OPPS services can be packaged to further achieve the objective of
advancing the OPPS toward a more prospective payment system.
For CY 2018, we examined the items and services currently provided
under the OPPS, reviewing categories of integral, ancillary,
supportive, dependent, or adjunctive items and services for which we
believe payment would be appropriately packaged into payment of the
primary service that they support. Specifically, we examined the HCPCS
code definitions (including CPT code descriptors) and outpatient
hospital billing patterns to determine whether there were categories of
codes for which packaging would be appropriate according to existing
OPPS packaging policies or a logical expansion of those existing OPPS
packaging policies. In this proposed rule, for CY 2018, we are
proposing to conditionally package the costs of selected newly
identified ancillary services into payment with a primary service where
we believe that the proposed packaged item or service is integral,
ancillary, supportive, dependent, or adjunctive to the provision of
care that was reported by the primary service HCPCS code. Below we
discuss the items and services that we are proposing to package
beginning in CY 2018.
b. CY 2018 Drug Administration Packaging Proposal
(1) Background of Drug Administration Packaging Policy
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74942
through 74945), we finalized a policy to unconditionally package
procedures described by add-on codes. Procedures described by add-on
codes represent an extension or continuation of a primary procedure,
which means that they are typically supportive, dependent, or
adjunctive to a primary service. The primary code defines the purpose
and typical scope of the patient encounter and the add-on code
describes incremental work, when the extent of the procedure
encompasses a range rather than a single defined endpoint applicable to
all patients. Given the dependent nature and adjunctive characteristics
of procedures described by add-on codes and in light of longstanding
OPPS packaging principles, we finalized a policy to unconditionally
package add-on codes with the primary procedure. However,
[[Page 33585]]
in response to stakeholder comments on the appropriateness of packaging
drug administration add-on codes, we did not finalize our proposal to
package drug administration add-on codes (78 FR 74945).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66819
through 66822), we conditionally packaged payment for ancillary
services assigned to APCs with a geometric mean cost of less than or
equal to $100 (prior to application of the conditional packaging status
indicator). The ancillary services that we identified are primarily
minor diagnostic tests and procedures that are often performed with a
primary service, although there are instances where hospitals provide
such services alone and without another primary service during the same
encounter. Under this policy, we assigned the conditionally packaged
services to status indicator ``Q1'', which indicates that the service
is separately payable when not billed on the same claim as a HCPCS code
assigned status indicator ``S'', ``T'', or ``V''. Exclusions to this
ancillary service packaging policy include preventive services, certain
psychiatric and counseling-related services, and certain low-cost drug
administration services. In the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66819), we indicated that we did not propose to
package certain low-cost drug administration services because we were
examining various alternative payment policies for drug administration,
including the associated drug administration add-on codes.
(2) Proposed Packaging of Level 1 and Level 2 Drug Administration
Services
As stated earlier, our overarching goal is to make OPPS payments
for all services paid under the OPPS more consistent with those of a
prospective payment system and less like those of a per-service fee
schedule. To achieve this goal, it is important that we are consistent
in our approach to packaging items and services under the established
packaging categories. Although we excluded packaging of low-cost drug
administration services from the ancillary services packaging policy in
the CY 2015 rulemaking, separate payment for drug administration
services is an example of inconsistent application of our packaging
policy where we are continuing to pay separately for a service,
regardless of cost and performance with another service. Given the
frequency of drug administration in hospital outpatient care, we
believe it is appropriate for us to reconsider whether payment for drug
administration services with a geometric mean cost of less than or
equal to $100 (prior to application of the conditional packaging status
indicator) should continue to be excluded from the ancillary services
packaging policy.
As part of our review of CY 2016 claims data used for ratesetting
in this CY 2018 OPPS/ASC proposed rule, we examined drug administration
billing patterns and payment for drug administration services under the
OPPS. Based on our analysis of CY 2016 claims data (used for the CY
2018 OPPS/ASC proposed rule ratesetting), we found that the geometric
mean cost for APC 5691 (Level 1 Drug Administration) is approximately
$37 and the geometric mean cost for APC 5692 (Level 2 Drug
Administration) is approximately $59. In addition, we observed that
drug administration services in APC 5692 are frequently reported on the
same claim with other separately payable services, such as an emergency
department or clinic visit, while drug administration services in APC
5691 are sometimes reported with other separately payable services.
Accordingly, Medicare data show that these drug administration services
are currently being provided as part of another separately payable
service for which two separate payments are made, and support that
packaging these services, when they are reported with another
separately payable services, is appropriate. Further, packaging for
Levels 1 and 2 Drug Administration services is consistent with the
ancillary packaging policy that was adopted in CY 2015, as noted
earlier in this section. Therefore, given the low geometric mean costs
of drug administration services in APC 5691 and APC 5692 as well as
their associated billing patterns, we believe that when these services
are performed with another separately payable service, they should be
packaged, but that they should be separately paid when performed alone.
That is, we believe it is no longer necessary to exclude low-cost drug
administration services from packaging under the ancillary services
packaging policy adopted in CY 2015.
In addition, as we examine payment differences between the hospital
outpatient department and the physician office for similar services,
under the OPPS, hospitals may receive separate payments for a clinic
(office) visit and a drug administration service. In contrast,
physicians are not eligible to receive payment for an office visit when
a drug administration service is also provided. As a result, hospitals
receive a higher payment than a physician office for furnishing the
same drug administration service. We believe that conditional packaging
of drug administration services would promote equitable payment between
the physician office and the hospital outpatient hospital department.
Accordingly, for CY 2018, we are proposing to conditionally package
payment for HCPCS codes describing drug administration services in APC
5691 and APC 5692, except for add-on codes and preventive services,
when these services are performed with another service.
Because preventive services are excluded from our packaging
policies, we are proposing to continue to pay separately for Medicare
Part B vaccine administration services. In addition, at this time, we
are not proposing to package any drug administration services in APC
5693 (Level 3 Drug Administration) or APC 5694 (Level 4 Drug
Administration), but are interested in public comments pertaining to
whether services in these APCs may be appropriate for packaging. The
proposed status indicators for drug administration services in APC 5691
and APC 5692 are listed in Table 7 below.
Table 7--Proposed CY 2018 Status Indicators for Drug Administration
Services in Level 1 and Level 2
Drug Administration APCs
------------------------------------------------------------------------
Proposed CY
HCPCS code Short descriptor 2018 status
indicator
------------------------------------------------------------------------
APC 5691--Level 1 Drug Administration
------------------------------------------------------------------------
95115........................... Immunotherapy one Q1
injection.
95117........................... Immunotherapy injections Q1
95144........................... Antigen therapy services Q1
[[Page 33586]]
95145........................... Antigen therapy services Q1
95146........................... Antigen therapy services Q1
95165........................... Antigen therapy services Q1
95170........................... Antigen therapy services Q1
96361........................... Hydrate iv infusion add- S
on.
96366........................... Ther/proph/diag iv inf S
add-on.
96370........................... Sc ther infusion addl hr S
96375........................... Tx/pro/dx inj new drug S
add-on.
96377........................... Application on-body Q1
injector.
96379........................... Ther/prop/diag inj/inf Q1
proc.
96423........................... Chemo ia infuse each S
addl hr.
96549........................... Chemotherapy unspecified Q1
G0008........................... Admin influenza virus S
vac.
G0009........................... Admin pneumococcal S
vaccine.
G0010........................... Admin hepatitis b S
vaccine.
------------------------------------------------------------------------
APC 5692--Level 2 Drug Administration
------------------------------------------------------------------------
90471........................... Immunization admin...... Q1
90473........................... Immune admin oral/nasal. Q1
95147........................... Antigen therapy services Q1
95148........................... Antigen therapy services Q1
95149........................... Antigen therapy services Q1
96367........................... Tx/proph/dg addl seq iv S
inf.
96371........................... Sc ther infusion reset Q1
pump.
96372........................... Ther/proph/diag inj sc/ Q1
im.
96401........................... Chemo anti-neopl sq/im.. Q1
96402........................... Chemo hormon antineopl Q1
sq/im.
96405........................... Chemo intralesional up Q1
to 7.
96411........................... Chemo iv push addl drug. S
96415........................... Chemo iv infusion addl S
hr.
96417........................... Chemo iv infus each addl S
seq.
------------------------------------------------------------------------
(3) Comment Solicitation Regarding Unconditionally Packaging Drug
Administration Add-on Codes
With respect to drug administration add-on codes, as discussed in
the CY 2014 OPPS/ASC proposed rule (78 FR 43573), we proposed to
unconditionally package all drug administration services described by
add-on codes. In response to the proposal, commenters objected to
packaging drug administration add-on codes, which typically describe
each additional hour of infusion or each additional intravenous push,
among others, in addition to the initial drug administration service.
The commenters believed that such a policy could disadvantage providers
of longer drug administration services, which are often protocol-driven
and are not necessarily dictated by the hospital, but by the
characteristics of the specific drug or biological being administered
to the patient. In response to these comments, we stated in the CY 2014
OPPS/ASC final rule with comment period (78 FR 74945) that, given the
frequency of drug administration services in the hospital outpatient
department and their use in such a wide variety of different drug
treatment protocols for various diseases in all types of hospitals,
further study of the payment methodology for these services was
warranted at that time. Therefore, we did not finalize our proposal to
package the drug administration add-on codes in CY 2014. However, we
stated we would continue to explore other payment options, including
packaging and variations on packaging, in future years.
We are not proposing to package drug administration add-on codes
for CY 2018 in this proposed rule because we want stakeholder input on
a payment methodology that supports the principles of a prospective
payment system while ensuring patient access to prolonged infusion
services. Instead, we are soliciting public comment on whether
conditionally or unconditionally packaging such codes would create
access to care issues or have other unintended consequences.
Specifically, we are requesting public comments on the following: (1)
Whether we should conditionally or unconditionally package drug
administration services add-on codes; (2) how we should consider or
incorporate the varied clinical drug protocols that result in different
infusion times into a drug administration service add-on code payment
proposal; and (3) other recommendations on an encounter-based payment
approach for drug administration services that are described by add-on
codes when furnished in the hospital outpatient setting.
c. Analysis of Packaging of Pathology Services in the OPPS
At the August 22, 2016 HOP Panel meeting, a stakeholder expressed
concern regarding conditional packaging of multiple pathology services.
When multiple conditionally packaged services are billed on the same
claim, the costs of the lowest paying services are bundled into the
cost of the highest paying service and payment is made based on the
highest single payable service. The stakeholder requested that CMS
create a pathology
[[Page 33587]]
composite to more appropriately pay for claims with only multiple
pathology services and no other separately payable service such as a
surgical procedure or a clinic visit. The HOP panel recommended that
CMS develop a composite APC for pathology services when multiple
pathology services are provided on a claim with no other payable
services. The HOP Panel also requested that CMS take into consideration
the stakeholder presentation comments made at the August 22, 2016 panel
meeting regarding hospital pathology laboratories as CMS evaluates
conditional packaging to determine whether an accommodation can be
made. Specifically, the stakeholder expressed concern with conditional
packaging of pathology services, particularly when payment is limited
to the single highest paying code, regardless of the number of services
provided or specimens tested.
In response to these HOP Panel requests and recommendation, we
stated that we may consider the stakeholders' request for a pathology
composite APC as well as additional composite APCs for future
rulemaking (81 FR 79588). In light of these requests and
recommendation, in development of this CY 2018 OPPS/ASC proposed rule,
we evaluated and considered a pathology composite APC when multiple
pathology services are performed and billed without a separately
payable service on the same claim. To understand the frequency of
billing multiple pathology services and no other separately payable
codes on the same claim by hospital outpatient departments, we examined
currently available claims data to identify the frequency distribution
of pathology codes within the CPT code range 88300 to 88361. The claim
frequency breakdown is displayed in Table 8 below.
Table 8--Distribution of Pathology Only OPPS Claims
------------------------------------------------------------------------
Number of Percent of
Claim subset claims claims
------------------------------------------------------------------------
Claims having 1 pathology code.......... 464,039 74.29
Claims having 2 pathology codes......... 101,954 16.32
Claims having 3 pathology codes......... 38,163 6.11
Claims having 4 or more pathology codes. 20,435 3.27
------------------------------------------------------------------------
Based on our claims analysis, the majority of pathology-only OPPS
claims are reported with one pathology code. Therefore, we believe that
it is neither a frequent occurrence nor a common occurrence for a
provider to submit a claim for payment under the OPPS with multiple
pathology services and no other separately payable service.
With regard to the HOP Panel's recommendation to develop a
composite APC for pathology services when multiple pathology services
are provided on a claim with no other payable services, we used CY 2016
claims data available for the CY 2018 OPPS/ASC proposed rule to model
four hypothetical pathology composite APCs. That is, following our
standard packaging methodology, we modeled four hypothetical pathology
composite APCs based on the following clinical scenarios that were
specifically requested by a stakeholder at the August 2016 HOP Panel
meeting:
Hypothetical Composite APC A: Claims that contain 2-4
pathology units (CPT codes 88302 through 88309) with or without special
stains (CPT codes 88312-88314);
Hypothetical Composite APC B: Claims that contain 5 or
more pathology units (CPT codes 88302 through 88309) with or without
special stains (CPT codes 88312-88314);
Hypothetical Composite APC C: Claims that contain 2-4
pathology units (CPT codes 88302 through 88309) with immunostains (CPT
codes 88341, 88342, 88346, 88350, 88360, 88361); and
Hypothetical Composite APC D: Claims that contain 5 or
more pathology units (CPT codes 88302 through 88309) with immunostains
(CPT codes 88341, 88342, 88346, 88350, 88360, 88361).
In addition, we evaluated the volume of services and costs for each
hypothetical composite. Results from modeling the four composite
scenarios show low claim volume, which indicates that the suggested
pathology code combinations are infrequently billed by hospital
outpatient departments, which may mean that these are not likely
clinical scenarios in hospital outpatient departments. A summary of the
results from our composite analysis are presented in Table 9 below. We
refer readers to Addendum B to the CY 2018 OPPS/ASC proposed rule
(which is available via the Internet on the CMS Web site) for the CPT
code descriptors.
Table 9--Cost and Utilization Statistics of Four Hypothetical Composite APCs
----------------------------------------------------------------------------------------------------------------
Mean
Number of Geometric mean Mean pathology Mean special immunostain
Hypothetical composite APC claims unit cost units per stains units units per
claim per claim claim
----------------------------------------------------------------------------------------------------------------
A............................... 139,238 $95.82 2.42 0.19 0.02
B............................... 14,388 265.36 6.78 0.24 0.03
C............................... 877 544.71 2.46 0.14 3.98
D............................... 214 1,531.87 6.56 0.12 4.28
----------------------------------------------------------------------------------------------------------------
As we move toward larger payment bundles under the OPPS, the
necessity of composite APCs diminishes. For example, in this CY 2018
OPPS/ASC proposed rule, we are proposing to delete composite APC 8001
(LDR Prostate Brachytherapy Composite) and to provide payment for the
component procedures through the C-APC payment methodology. Composite
APCs were a precursor to C-APCs. In CY 2008, we implemented composite
APCs to provide a single payment for groups of services that are
typically performed together during a single clinical encounter and
that result in the provision of a complete service (72 FR 66650 through
66652). Because a C-APC would treat all individually reported codes as
representing components of the comprehensive service, all of the
[[Page 33588]]
elements of the composite service are included in the C-APC payment. In
addition, given the infrequent occurrence of multiple pathology
services on the same claim without a separately payable service, we do
not believe a composite APC is necessary or warranted.
Therefore, for CY 2018, we are not proposing to create a pathology
composite APC or additional composite APCs for stakeholder-requested
services, such as X-ray services, respiratory services, cardiology
services, or allergy testing services. However, we are soliciting
public comments on our packaging policies below.
d. Comment Solicitation on Packaging of Items and Services Under the
OPPS
As previously noted, packaging is an inherent principle of a
prospective payment system. The OPPS, like other prospective payment
systems, relies on the concept of averaging, where the payment may be
more or less than the estimated costs of providing a service or package
of services for a particular patient, but with the exception of outlier
cases, is adequate to ensure access to appropriate care. Packaging and
bundling payment for multiple interrelated services into a single
payment creates incentives for providers to furnish services in the
most efficient way by enabling hospitals to manage their resources with
maximum flexibility, thereby encouraging long-term cost containment.
Decisions about packaging and bundling payment involve a balance
between ensuring some separate payment for individual services or items
while establishing incentives for efficiency through larger units of
payment.
As the OPPS continues to move towards a prospectively determined
encounter-based payments and away from separate fee schedule-like
payments, we continue to hear concerns from stakeholders that our
packaging policies may be hampering patient access or resulting in
other undesirable consequences. However, we have not observed
significant fluctuations in our data that show a sharp decline of the
volume of packaged services, nor have we heard from Medicare
beneficiaries specifically about access issues or other concerns with
packaged items and services. However, given that aggregate spending and
utilization continue to increase for covered outpatient services, it is
unclear what, if any, adverse effect packaging has on beneficiary
access to care. Specifically, within the framework of existing
packaging categories, such as drugs that function as supplies in a
surgical procedure or diagnostic test or procedure, we are interested
in stakeholder feedback on common clinical scenarios involving
currently packaged HCPCS codes for which stakeholders believe packaged
payment is not appropriate under the OPPS. Likewise, outside the
framework of existing packaging categories, we are interested in
stakeholder feedback on common clinical scenarios involving separately
payable HCPCS codes for which payment would be most appropriately
packaged under the OPPS. We are soliciting public comments from a broad
cross-section of stakeholders, including beneficiaries, patient
advocates, hospital providers, clinicians, manufacturers, and other
interested parties.
4. Proposed Calculation of OPPS Scaled Payment Weights
We established a policy in the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68283) of using geometric mean-based APC costs to
calculate relative payment weights under the OPPS. In the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79594 through 79595), we
applied this policy and calculated the relative payment weights for
each APC for CY 2017 that were shown in Addenda A and B to that final
rule with comment period (which were made available via the Internet on
the CMS Web site) using the APC costs discussed in sections II.A.1. and
II.A.2. of that final rule with comment period. For CY 2018, as we did
for CY 2017, we are proposing to continue to apply the policy
established in CY 2013 and calculate relative payment weights for each
APC for CY 2018 using geometric mean-based APC costs.
For CY 2012 and CY 2013, outpatient clinic visits were assigned to
one of five levels of clinic visit APCs, with APC 0606 representing a
mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75036 through 75043), we finalized a policy that created
alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for
assessment and management of a patient), representing any and all
clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634
(Hospital Clinic Visits). We also finalized a policy to use CY 2012
claims data to develop the CY 2014 OPPS payment rates for HCPCS code
G0463 based on the total geometric mean cost of the levels one through
five CPT E/M codes for clinic visits previously recognized under the
OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In
addition, we finalized a policy to no longer recognize a distinction
between new and established patient clinic visits.
For CY 2016, we deleted APC 0634 and reassigned the outpatient
clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and
Related Services) (80 FR 70351). For CY 2018, as we did for CY 2017, we
are proposing to continue to standardize all of the relative payment
weights to APC 5012. We believe that standardizing relative payment
weights to the geometric mean of the APC to which HCPCS code G0463 is
assigned maintains consistency in calculating unscaled weights that
represent the cost of some of the most frequently provided OPPS
services. For CY 2018, as we did for CY 2017, we are proposing to
assign APC 5012 a relative payment weight of 1.00 and to divide the
geometric mean cost of each APC by the geometric mean cost for APC 5012
to derive the unscaled relative payment weight for each APC. The choice
of the APC on which to standardize the relative payment weights does
not affect payments made under the OPPS because we scale the weights
for budget neutrality.
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated aggregate weight under the OPPS for CY 2018 is neither
greater than nor less than the estimated aggregate weight that would
have been made without the changes. To comply with this requirement
concerning the APC changes, we are proposing to compare the estimated
aggregate weight using the CY 2017 scaled relative payment weights to
the estimated aggregate weight using the proposed CY 2018 unscaled
relative payment weights.
For CY 2017, we multiplied the CY 2017 scaled APC relative payment
weight applicable to a service paid under the OPPS by the volume of
that service from CY 2016 claims to calculate the total relative
payment weight for each service. We then added together the total
relative payment weight for each of these services in order to
calculate an estimated aggregate weight for the year. For CY 2018, we
are proposing to apply the same process using the estimated CY 2018
unscaled relative payment weights rather than scaled relative payment
weights. We are proposing to calculate the weight scalar by dividing
the CY 2017 estimated aggregate weight by the unscaled CY 2018
estimated aggregate weight.
For a detailed discussion of the weight scalar calculation, we
refer readers to the OPPS claims accounting
[[Page 33589]]
document available on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
Click on the CY 2018 OPPS proposed rule link and open the claims
accounting document link at the bottom of the page.
We are proposing to compare the estimated unscaled relative payment
weights in CY 2018 to the estimated total relative payment weights in
CY 2017 using CY 2016 claims data, holding all other components of the
payment system constant to isolate changes in total weight. Based on
this comparison, we are proposing to adjust the calculated CY 2018
unscaled relative payment weights for purposes of budget neutrality. We
are proposing to adjust the estimated CY 2018 unscaled relative payment
weights by multiplying them by a proposed weight scaler of 1.328 to
ensure that the proposed CY 2018 relative payment weights are scaled to
be budget neutral. The proposed CY 2018 relative payment weights listed
in Addenda A and B to this proposed rule (which are available via the
Internet on the CMS Web site) were scaled and incorporate the
recalibration adjustments discussed in sections II.A.1. and II.A.2. of
this proposed rule.
Section 1833(t)(14) of the Act provides the payment rates for
certain SCODs. Section 1833(t)(14)(H) of the Act provides that
additional expenditures resulting from this paragraph shall not be
taken into account in establishing the conversion factor, weighting,
and other adjustment factors for 2004 and 2005 under paragraph (9), but
shall be taken into account for subsequent years. Therefore, the cost
of those SCODs (as discussed in section V.B.3. of this proposed rule)
is included in the proposed budget neutrality calculations for the CY
2018 OPPS.
B. Proposed Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD fee schedule increase
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee
schedule increase factor is equal to the hospital inpatient market
basket percentage increase applicable to hospital discharges under
section 1886(b)(3)(B)(iii) of the Act. In the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19931), consistent with current law, based on IHS
Global Insight, Inc.'s fourth quarter 2016 forecast of the FY 2018
market basket increase, the proposed FY 2018 IPPS market basket update
is 2.9 percent. However, sections 1833(t)(3)(F) and 1833(t)(3)(G)(v) of
the Act, as added by section 3401(i) of the Patient Protection and
Affordable Care Act of 2010 (Pub. L. 111-148) and as amended by section
10319(g) of that law and further amended by section 1105(e) of the
Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152),
provide adjustments to the OPD fee schedule increase factor for CY
2018.
Specifically, section 1833(t)(3)(F)(i) of the Act requires that,
for 2012 and subsequent years, the OPD fee schedule increase factor
under subparagraph (C)(iv) be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as
equal to the 10-year moving average of changes in annual economy-wide,
private nonfarm business multifactor productivity (MFP) (as projected
by the Secretary for the 10-year period ending with the applicable
fiscal year, year, cost reporting period, or other annual period) (the
``MFP adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR
51689 through 51692), we finalized our methodology for calculating and
applying the MFP adjustment, and then revised this methodology as
discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509). In the
FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19931 through 19932), we
discussed the calculation of the proposed MFP adjustment for FY 2018,
which is -0.4 percentage point.
We are proposing that if more recent data become subsequently
available after the publication of this proposed rule (for example, a
more recent estimate of the market basket increase and the MFP
adjustment), we would use such updated data, if appropriate, to
determine the CY 2018 market basket update and the MFP adjustment,
which are components in calculating the OPD fee schedule increase
factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of the Act,
in the CY 2018 OPPS/ASC final rule with comment period.
In addition, section 1833(t)(3)(F)(ii) of the Act requires that,
for each of years 2010 through 2019, the OPD fee schedule increase
factor under section 1833(t)(3)(C)(iv) of the Act be reduced by the
adjustment described in section 1833(t)(3)(G) of the Act. For CY 2018,
section 1833(t)(3)(G)(v) of the Act provides a 0.75 percentage point
reduction to the OPD fee schedule increase factor under section
1833(t)(3)(C)(iv) of the Act. Therefore, in accordance with sections
1833(t)(3)(F)(ii) and 1833(t)(3)(G)(v) of the Act, we are proposing to
apply a 0.75 percentage point reduction to the OPD fee schedule
increase factor for CY 2018.
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee schedule
increase factor under section 1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year, and may result in OPPS payment rates being
less than rates for the preceding year. As described in further detail
below, we are proposing to apply an OPD fee schedule increase factor of
1.75 percent for the CY 2018 OPPS (which is 2.9 percent, the proposed
estimate of the hospital inpatient market basket percentage increase,
less the proposed 0.4 percentage point MFP adjustment, and less the
0.75 percentage point additional adjustment).
Hospitals that fail to meet the Hospital OQR Program reporting
requirements are subject to an additional reduction of 2.0 percentage
points from the OPD fee schedule increase factor adjustment to the
conversion factor that would be used to calculate the OPPS payment
rates for their services, as required by section 1833(t)(17) of the
Act. For further discussion of the Hospital OQR Program, we refer
readers to section XIII. of this proposed rule.
In this CY 2018 OPPS/ASC proposed rule, we are proposing to amend
42 CFR 419.32(b)(1)(iv)(B) by adding a new paragraph (9) to reflect the
requirement in section 1833(t)(3)(F)(i) of the Act that, for CY 2018,
we reduce the OPD fee schedule increase factor by the MFP adjustment as
determined by CMS, and to reflect the requirement in section
1833(t)(3)(G)(v) of the Act, as required by section 1833(t)(3)(F)(ii)
of the Act, that we reduce the OPD fee schedule increase factor by an
additional 0.75 percentage point for CY 2018.
To set the OPPS conversion factor for this CY 2018 proposed rule,
we are proposing to increase the CY 2017 conversion factor of $75.001
by 1.75 percent. In accordance with section 1833(t)(9)(B) of the Act,
we are proposing further to adjust the conversion factor for CY 2018 to
ensure that any revisions made to the wage index and rural adjustment
are made on a budget neutral basis. We are proposing to calculate an
overall proposed budget neutrality factor of 0.9999 for wage index
changes by comparing proposed total estimated payments from our
simulation model using the proposed FY 2018 IPPS wage indexes to those
[[Page 33590]]
payments using the FY 2017 IPPS wage indexes, as adopted on a calendar
year basis for the OPPS.
For CY 2018, we are proposing to maintain the current rural
adjustment policy, as discussed in section II.E. of this proposed rule.
Therefore, the proposed budget neutrality factor for the rural
adjustment would be 1.0000.
For CY 2018, we are proposing to continue previously established
policies for implementing the cancer hospital payment adjustment
described in section 1833(t)(18) of the Act, as discussed in section
II.F. of this proposed rule. We are proposing to calculate a CY 2018
budget neutrality adjustment factor for the cancer hospital payment
adjustment by comparing estimated total CY 2018 payments under section
1833(t) of the Act, including the proposed CY 2018 cancer hospital
payment adjustment, to estimated CY 2018 total payments using the CY
2017 final cancer hospital payment adjustment as required under section
1833(t)(18)(B) of the Act. The CY 2018 proposed estimated payments
applying the proposed CY 2018 cancer hospital payment adjustment are
less than estimated payments applying the CY 2017 final cancer hospital
payment adjustment. Therefore, we are proposing to apply a budget
neutrality adjustment factor of 1.0003 to the conversion factor for the
cancer hospital payment adjustment. In accordance with section 16002(b)
of the 21st Century Cures Act, we are applying a budget neutrality
factor calculated as if the proposed cancer hospital adjustment target
payment-to-cost ratio was 0.90, not the 0.89 target payment-to-cost
ratio we are applying in section II.F. of this proposed rule.
For this proposed rule, we estimate that proposed pass-through
spending for drugs, biologicals, and devices for CY 2018 would equal
approximately $26.2 million, which represents 0.04 percent of total
projected CY 2018 OPPS spending. Therefore, the proposed conversion
factor would be adjusted by the difference between the 0.26 percent
estimate of pass-through spending for CY 2017 and the 0.04 percent
estimate of proposed pass-through spending for CY 2018, resulting in a
proposed adjustment for CY 2018 of 0.22 percent. Proposed estimated
payments for outliers would remain at 1.0 percent of total OPPS
payments for CY 2018. We estimate for this proposed rule that outlier
payments would be 1.04 percent of total OPPS payments in CY 2017; the
1.0 percent for proposed outlier payments in CY 2018 would constitute a
0.04 percent decrease in payment in CY 2018 relative to CY 2017.
For this proposed rule, we also are proposing that hospitals that
fail to meet the reporting requirements of the Hospital OQR Program
would continue to be subject to a further reduction of 2.0 percentage
points to the OPD fee schedule increase factor. For hospitals that fail
to meet the requirements of the Hospital OQR Program, we are proposing
to make all other adjustments discussed above, but use a reduced OPD
fee schedule update factor of -0.25 percent (that is, the proposed OPD
fee schedule increase factor of 1.75 percent further reduced by 2.0
percentage points). This would result in a proposed reduced conversion
factor for CY 2018 of $74.953 for hospitals that fail to meet the
Hospital OQR Program requirements (a difference of -1.530 in the
conversion factor relative to hospitals that met the requirements).
In summary, for CY 2018, we are proposing to amend Sec.
419.32(b)(1)(iv)(B) by adding a new paragraph (9) to reflect the
reductions to the OPD fee schedule increase factor that are required
for CY 2018 to satisfy the statutory requirements of sections
1833(t)(3)(F) and (t)(3)(G)(v) of the Act. We are proposing to use a
reduced conversion factor of $74.953 in the calculation of payments for
hospitals that fail to meet the Hospital OQR Program requirements (a
difference of -1.530 in the conversion factor relative to hospitals
that met the requirements).
For CY 2018, we are proposing to use a conversion factor of $76.483
in the calculation of the national unadjusted payment rates for those
items and services for which payment rates are calculated using
geometric mean costs; that is, the proposed OPD fee schedule increase
factor of 1.75 percent for CY 2018, the required proposed wage index
budget neutrality adjustment of approximately 0.9999, the proposed
cancer hospital payment adjustment of 1.0003, and the proposed
adjustment of 0.22 percentage point of projected OPPS spending for the
difference in the pass-through spending and outlier payments that
result in a proposed conversion factor for CY 2018 of $76.483.
C. Proposed Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.B. of this proposed rule.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, for all hospitals, approximately 60 percent of
the costs of services paid under the OPPS were attributable to wage
costs. We confirmed that this labor-related share for outpatient
services is appropriate during our regression analysis for the payment
adjustment for rural hospitals in the CY 2006 OPPS final rule with
comment period (70 FR 68553). We are proposing to continue this policy
for the CY 2018 OPPS. We refer readers to section II.H. of this
proposed rule for a description and an example of how the wage index
for a particular hospital is used to determine payment for the
hospital.
As discussed in the claims accounting narrative included with the
supporting documentation for this proposed rule (which is available via
the Internet on the CMS Web site), for estimating APC costs, we
standardize 60 percent of estimated claims costs for geographic area
wage variation using the same proposed FY 2018 pre-reclassified wage
index that the IPPS uses to standardize costs. This standardization
process removes the effects of differences in area wage levels from the
determination of a national unadjusted OPPS payment rate and copayment
amount.
Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS
April 7, 2000 final rule with comment period (65 FR 18495 and 18545)),
the OPPS adopted the final fiscal year IPPS post-reclassified wage
index as the calendar year wage index for adjusting the OPPS standard
payment amounts for labor market differences. Therefore, the wage index
that applies to a particular acute care, short-stay hospital under the
IPPS also applies to that hospital under the OPPS. As initially
explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we
believe that using the IPPS wage index as the source of an adjustment
factor for the OPPS is reasonable and logical, given the inseparable,
subordinate status of the HOPD within the hospital overall. In
accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index
is updated annually.
The Affordable Care Act contained several provisions affecting the
wage index. These provisions were discussed in the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74191). Section 10324 of the
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act,
which defines a frontier State and amended section 1833(t) of the Act
[[Page 33591]]
to add paragraph (19), which requires a frontier State wage index floor
of 1.00 in certain cases, and states that the frontier State floor
shall not be applied in a budget neutral manner. We codified these
requirements at Sec. 419.43(c)(2) and (c)(3) of our regulations. For
the CY 2018 OPPS, we are proposing to implement this provision in the
same manner as we have since CY 2011. Under this policy, the frontier
State hospitals would receive a wage index of 1.00 if the otherwise
applicable wage index (including reclassification, the rural floor, and
rural floor budget neutrality) is less than 1.00 (as discussed below,
we are proposing not to extend the imputed floor under the OPPS for CY
2018 and subsequent years). Because the HOPD receives a wage index
based on the geographic location of the specific inpatient hospital
with which it is associated, the frontier State wage index adjustment
applicable for the inpatient hospital also would apply for any
associated HOPD. We refer readers to the following sections in the FY
2011 through FY 2017 IPPS/LTCH PPS final rules for discussions
regarding this provision, including our methodology for identifying
which areas meet the definition of ``frontier States'' as provided for
in section 1886(d)(3)(E)(iii)(II) of the Act: For FY 2011, 75 FR 50160
through 50161; for FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013,
77 FR 53369 through 53370; for FY 2014, 78 FR 50590 through 50591; for
FY 2015, 79 FR 49971; for FY 2016, 80 FR 49498; and for FY 2017, 81 FR
56922. We are inviting public comments on this proposal.
In addition to the changes required by the Affordable Care Act, we
note that the proposed FY 2018 IPPS wage indexes continue to reflect a
number of adjustments implemented over the past few years, including,
but not limited to, reclassification of hospitals to different
geographic areas, the rural floor provisions, an adjustment for
occupational mix, and an adjustment to the wage index based on
commuting patterns of employees (the out-migration adjustment). We note
that in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19905), we
proposed not to apply the imputed floor to the IPPS wage index
computations for FY 2018 and subsequent fiscal years. We refer readers
to the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through 19915)
for a detailed discussion of all proposed changes to the FY 2018 IPPS
wage indexes (including our proposal not to extend the imputed floor
for FY 2018 and subsequent fiscal years). In addition, we refer readers
to the CY 2005 OPPS final rule with comment period (69 FR 65842 through
65844) and subsequent OPPS rules for a detailed discussion of the
history of these wage index adjustments as applied under the OPPS.
As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963), the FY 2016 IPPS/LTCH PPS final rule (80 FR 49488
through 49489 and 49494 through 49496), and the FY 2017 IPPS/LTCH PPS
final rule (81 FR 56913), the Office of Management and Budget (OMB)
issued revisions to the labor market area delineations on February 28,
2013 (based on 2010 Decennial Census data), that included a number of
significant changes such as new Core Based Statistical Areas (CBSAs),
urban counties that became rural, rural counties that became urban, and
existing CBSAs that were split apart (OMB Bulletin 13-01). This
bulletin can be found at: https://obamawhitehouse.archives.gov/sites/default/files/omb/bulletins/2013/b13-01.pdf. In the FY 2015 IPPS/LTCH
PPS final rule (79 FR 49950 through 49985), we adopted the use of the
OMB labor market area delineations contained in OMB Bulletin No. 13-01,
effective October 1, 2014. In the FY 2017 IPPS/LTCH PPS final rule (81
FR 56913), we adopted revisions to statistical areas contained in OMB
Bulletin No. 15-01, issued on July 15, 2015, which provided updates to
and superseded OMB Bulletin No. 13-01 that was issued on February 28,
2013. We believe that it is important for the OPPS to use the latest
labor market area delineations available as soon as is reasonably
possible in order to maintain a more accurate and up-to-date payment
system that reflects the reality of population shifts and labor market
conditions. Therefore, for purposes of the OPPS, in the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79598), we adopted the
revisions to the OMB statistical area delineations contained in OMB
Bulletin No. 15-01, effective January 1, 2017, beginning with the CY
2017 OPPS wage indexes.
CBSAs are made up of one or more constituent counties. Each CBSA
and constituent county has its own unique identifying codes. The FY
2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through 19899) discusses
the two different lists of codes to identify counties: Social Security
Administration (SSA) codes and Federal Information Processing Standard
(FIPS) codes. Historically, CMS has listed and used SSA and FIPS county
codes to identify and crosswalk counties to CBSA codes for purposes of
the IPPS and OPPS wage indexes. However, the SSA county codes are no
longer being maintained and updated, although the FIPS codes continue
to be maintained by the U.S. Census Bureau. The Census Bureau's most
current statistical area information is derived from ongoing census
data received since 2010; the most recent data are from 2015. In the FY
2018 IPPS/LTCH PPS proposed rule (81 FR 19898), for purposes of
crosswalking counties to CBSAs for the IPPS wage index, we proposed to
discontinue the use of the SSA county codes and begin using only the
FIPS county codes. Similarly, for the purposes of crosswalking counties
to CBSAs for the OPPS wage index, we are proposing to discontinue the
use of SSA county codes and begin using only the FIPS county codes. We
are inviting public comments on this proposal.
The Census Bureau maintains a complete list of changes to counties
or county equivalent entities on the Web site at: https://www.census.gov/geo/reference/county-changes.html. In our proposed
transition to using only FIPS codes for counties for the IPPS wage
index, we proposed to update the FIPS codes used for crosswalking
counties to CBSAs for the IPPS wage index to incorporate changes to the
counties or county equivalent entities included in the Census Bureau's
most recent list. Based on information included in the Census Bureau's
Web site, since 2010, the Census Bureau has made the following updates
to the FIPS codes for counties or county equivalent entities:
Petersburg Borough, AK (FIPS State County Code 02-195),
CBSA 02, was created from part of former Petersburg Census Area (02-
195) and part of Hoonah-Angoon Census Area (02-105). The CBSA code
remains 02.
The name of La Salle Parish, LA (FIPS State County Code
22-059), CBSA 14, is now LaSalle Parish, LA (FIPS State County Code 22-
059). The CBSA code remains as 14.
The name of Shannon County, SD (FIPS State County Code 46-
113), CBSA 43, is now Oglala Lakota County, SD (FIPS State County Code
46-102). The CBSA code remains as 43.
In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through
19899), for the IPPS, we proposed to implement these FIPS code updates,
effective October 1, 2017, beginning with the FY 2018 wage indexes. We
proposed to include these updates to calculate area wage indexes in a
manner that is generally consistent with the CBSA-based methodologies
finalized in the FY 2005 IPPS final rule and the FY
[[Page 33592]]
2015 IPPS/LTCH PPS final rule. We noted that while the county update
changes listed earlier changed the county names, the CBSAs to which
these counties map did not change from the prior counties. Therefore,
there would be no impact or change to hospitals in these counties; they
would continue to be considered rural for the IPPS wage index under
these changes. Consistent with the FY 2018 IPPS/LTCH PPS proposed rule,
for purposes of the OPPS, we are proposing to implement these revisions
effective January 1, 2018, beginning with the CY 2018 OPPS wage
indexes. We believe it is important to use the latest counties or
county equivalent entities in order to properly crosswalk hospitals
from a county to a CBSA for purposes of the OPPS wage index. In
addition, we believe that using the latest FIPS codes will allow us to
maintain a more accurate and up-to-date payment system that reflects
the reality of population shifts and labor market conditions. Tables 2
and 3 for the FY 2018 IPPS/LTCH PPS proposed rule and the County to
CBSA Crosswalk File and Urban CBSAs and Constituent Counties for Acute
Care Hospitals File posted on the CMS Web site reflect these county
changes. We are inviting public comments on our proposals.
For this CY 2018 OPPS/ASC proposed rule, we are proposing to use
the FY 2018 hospital IPPS post-reclassified wage index for urban and
rural areas as the wage index for the OPPS to determine the wage
adjustments for both the OPPS payment rate and the copayment
standardized amount for CY 2018. Therefore, any adjustments for the FY
2018 IPPS post-reclassified wage index would be reflected in the final
CY 2018 OPPS wage index. (We refer readers to the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19898 through 19915) and the proposed FY 2018
hospital wage index files posted on the CMS Web site). We are inviting
public comments on this proposal.
Hospitals that are paid under the OPPS, but not under the IPPS, do
not have an assigned hospital wage index under the IPPS. Therefore, for
non-IPPS hospitals paid under the OPPS, it is our longstanding policy
to assign the wage index that would be applicable if the hospital were
paid under the IPPS, based on its geographic location and any
applicable wage index adjustments. We are proposing to continue this
policy for CY 2018. The following is a brief summary of the major
proposed FY 2018 IPPS wage index policies and adjustments that we are
proposing to apply to these hospitals under the OPPS for CY 2018. We
are inviting public comments on these proposals. We further refer
readers to the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through
19915) for a detailed discussion of the proposed changes to the FY 2018
IPPS wage indexes.
It has been our longstanding policy to allow non-IPPS hospitals
paid under the OPPS to qualify for the out-migration adjustment if they
are located in a section 505 out-migration county (section 505 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)). Applying this adjustment is consistent with our policy of
adopting IPPS wage index policies for hospitals paid under the OPPS. We
note that, because non-IPPS hospitals cannot reclassify, they would be
eligible for the out-migration wage adjustment if they are located in a
section 505 out-migration county. This is the same out-migration
adjustment policy that would apply if the hospital were paid under the
IPPS. For CY 2018, we are proposing to continue our policy of allowing
non-IPPS hospitals paid under the OPPS to qualify for the out-migration
adjustment if they are located in a section 505 out-migration county
(section 505 of the MMA).
As stated earlier, in the FY 2015 IPPS/LTCH PPS final rule, we
adopted the OMB labor market area delineations issued by OMB in OMB
Bulletin No. 13-01 on February 28, 2013, based on standards published
on June 28, 2010 (75 FR 37246 through 37252) and the 2010 Census data
to delineate labor market areas for purposes of the IPPS wage index.
For IPPS wage index purposes, for hospitals that were located in urban
CBSAs in FY 2014 but were designated as rural under these revised OMB
labor market area delineations, we generally assigned them the urban
wage index value of the CBSA in which they were physically located for
FY 2014 for a period of 3 fiscal years (79 FR 49957 through 49960). To
be consistent, we applied the same policy to hospitals paid under the
OPPS but not under the IPPS so that such hospitals will maintain the
wage index of the CBSA in which they were physically located for FY
2014 for 3 calendar years (until December 31, 2017). Because this 3-
year transition will end in CY 2017, it will no longer be applied in CY
2018.
In addition, under the IPPS, the imputed floor policy is set to
expire effective October 1, 2017, and in the IPPS/LTCH PPS proposed
rule, we proposed not to extend the imputed floor policy for FY 2018
and subsequent fiscal years (82 FR 19904 through 19905). For purposes
of the CY 2018 OPPS, the imputed floor policy is set to expire
effective December 31, 2017, and consistent with the IPPS, we are
proposing not to extend the imputed floor policy beyond this date.
For CMHCs, for CY 2018, we are proposing to continue to calculate
the wage index by using the post-reclassification IPPS wage index based
on the CBSA where the CMHC is located. As with OPPS hospitals and for
the same reasons, for CMHCs previously located in urban CBSAs that were
designated as rural under the revised OMB labor market area
delineations in OMB Bulletin No. 13-01, we finalized a policy to
maintain the urban wage index value of the CBSA in which they were
physically located for CY 2014 for 3 calendar years (until December 31,
2017). Because this 3-year transition will end in CY 2017, it will not
be applied in CY 2018. Consistent with our current policy, the wage
index that applies to CMHCs would include the rural floor adjustment,
but would not include the imputed floor adjustment because as discussed
above, we are proposing to not extend the imputed floor policy beyond
December 31, 2107. The wage index that applies to CMHCs also would not
include the out-migration adjustment because that adjustment only
applies to hospitals.
Table 2 associated with the FY 2018 IPPS/LTCH PPS proposed rule
(available via the Internet on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/)
identifies counties eligible for the out-migration adjustment and IPPS
hospitals that would receive the adjustment for FY 2018. We are
including the out-migration adjustment information from Table 2
associated with the FY 2018 IPPS/LTCH PPS proposed rule as Addendum L
to this proposed rule with the addition of non-IPPS hospitals that
would receive the section 505 out-migration adjustment under the CY
2018 OPPS. Addendum L is available via the Internet on the CMS Web
site. We refer readers to the CMS Web site for the OPPS at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/. At this link, readers will find a
link to the proposed FY 2018 IPPS wage index tables and Addendum L.
D. Proposed Statewide Average Default CCRs
In addition to using CCRs to estimate costs from charges on claims
for ratesetting, CMS uses overall hospital-specific CCRs calculated
from the hospital's most recent cost report to determine outlier
payments, payments for pass-through devices, and monthly interim
transitional corridor payments
[[Page 33593]]
under the OPPS during the PPS year. MACs cannot calculate a CCR for
some hospitals because there is no cost report available. For these
hospitals, CMS uses the statewide average default CCRs to determine the
payments mentioned earlier until a hospital's MAC is able to calculate
the hospital's actual CCR from its most recently submitted Medicare
cost report. These hospitals include, but are not limited to, hospitals
that are new, hospitals that have not accepted assignment of an
existing hospital's provider agreement, and hospitals that have not yet
submitted a cost report. CMS also uses the statewide average default
CCRs to determine payments for hospitals that appear to have a biased
CCR (that is, the CCR falls outside the predetermined ceiling threshold
for a valid CCR) or for hospitals in which the most recent cost report
reflects an all-inclusive rate status (Medicare Claims Processing
Manual (Pub. 100-04), Chapter 4, Section 10.11).
In this proposed rule, we are proposing to update the default
ratios for CY 2018 using the most recent cost report data. We discussed
our policy for using default CCRs, including setting the ceiling
threshold for a valid CCR, in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68594 through 68599) in the context of our
adoption of an outlier reconciliation policy for cost reports beginning
on or after January 1, 2009. For detail on our process for calculating
the statewide average CCRs, we refer readers to the CY 2018 OPPS
proposed rule Claims Accounting Narrative that is posted on the CMS Web
site. Table 10 below lists the proposed statewide average default CCRs
for OPPS services furnished on or after January 1, 2018, based on
proposed rule data.
Table 10--Proposed CY 2018 Statewide Average CCRs
----------------------------------------------------------------------------------------------------------------
Previous
Proposed CY default CCR
State Urban/rural 2018 default (CY 2017 OPPS
CCR Final rule)
----------------------------------------------------------------------------------------------------------------
ALASKA........................................ RURAL........................... 0.582 0.449
ALASKA........................................ URBAN........................... 0.238 0.237
ALABAMA....................................... RURAL........................... 0.191 0.196
ALABAMA....................................... URBAN........................... 0.158 0.158
ARKANSAS...................................... RURAL........................... 0.192 0.196
ARKANSAS...................................... URBAN........................... 0.201 0.205
ARIZONA....................................... RURAL........................... 0.237 0.238
ARIZONA....................................... URBAN........................... 0.171 0.176
CALIFORNIA.................................... RURAL........................... 0.176 0.179
CALIFORNIA.................................... URBAN........................... 0.190 0.188
COLORADO...................................... RURAL........................... 0.351 0.354
COLORADO...................................... URBAN........................... 0.204 0.208
CONNECTICUT................................... RURAL........................... 0.402 0.402
CONNECTICUT................................... URBAN........................... 0.253 0.253
DISTRICT OF COLUMBIA.......................... URBAN........................... 0.279 0.286
DELAWARE...................................... URBAN........................... 0.296 0.288
FLORIDA....................................... RURAL........................... 0.170 0.169
FLORIDA....................................... URBAN........................... 0.141 0.143
GEORGIA....................................... RURAL........................... 0.226 0.230
GEORGIA....................................... URBAN........................... 0.187 0.196
HAWAII........................................ RURAL........................... 0.333 0.338
HAWAII........................................ URBAN........................... 0.314 0.319
IOWA.......................................... RURAL........................... 0.297 0.291
IOWA.......................................... URBAN........................... 0.247 0.252
IDAHO......................................... RURAL........................... 0.341 0.341
IDAHO......................................... URBAN........................... 0.404 0.401
ILLINOIS...................................... RURAL........................... 0.232 0.241
ILLINOIS...................................... URBAN........................... 0.216 0.209
INDIANA....................................... RURAL........................... 0.305 0.272
INDIANA....................................... URBAN........................... 0.217 0.218
KANSAS........................................ RURAL........................... 0.272 0.269
KANSAS........................................ URBAN........................... 0.202 0.194
KENTUCKY...................................... RURAL........................... 0.192 0.194
KENTUCKY...................................... URBAN........................... 0.188 0.189
LOUISIANA..................................... RURAL........................... 0.273 0.217
LOUISIANA..................................... URBAN........................... 0.200 0.201
MASSACHUSETTS................................. RURAL........................... 0.315 0.316
MASSACHUSETTS................................. URBAN........................... 0.349 0.345
MAINE......................................... RURAL........................... 0.419 0.425
MAINE......................................... URBAN........................... 0.412 0.413
MARYLAND...................................... RURAL........................... 0.263 0.264
MARYLAND...................................... URBAN........................... 0.228 0.229
MICHIGAN...................................... RURAL........................... 0.308 0.295
MICHIGAN...................................... URBAN........................... 0.323 0.324
MINNESOTA..................................... RURAL........................... 0.374 0.398
MINNESOTA..................................... URBAN........................... 0.304 0.319
MISSOURI...................................... RURAL........................... 0.226 0.222
MISSOURI...................................... URBAN........................... 0.243 0.261
MISSISSIPPI................................... RURAL........................... 0.227 0.224
MISSISSIPPI................................... URBAN........................... 0.165 0.167
[[Page 33594]]
MONTANA....................................... RURAL........................... 0.475 0.450
MONTANA....................................... URBAN........................... 0.376 0.368
NORTH CAROLINA................................ RURAL........................... 0.207 0.216
NORTH CAROLINA................................ URBAN........................... 0.215 0.223
NORTH DAKOTA.................................. RURAL........................... 0.366 0.411
NORTH DAKOTA.................................. URBAN........................... 0.372 0.334
NEBRASKA...................................... RURAL........................... 0.298 0.294
NEBRASKA...................................... URBAN........................... 0.231 0.238
NEW HAMPSHIRE................................. RURAL........................... 0.311 0.320
NEW HAMPSHIRE................................. URBAN........................... 0.262 0.279
NEW JERSEY.................................... URBAN........................... 0.201 0.195
NEW MEXICO.................................... RURAL........................... 0.220 0.225
NEW MEXICO.................................... URBAN........................... 0.284 0.280
NEVADA........................................ RURAL........................... 0.194 0.196
NEVADA........................................ URBAN........................... 0.114 0.123
NEW YORK...................................... RURAL........................... 0.309 0.309
NEW YORK...................................... URBAN........................... 0.286 0.292
OHIO.......................................... RURAL........................... 0.289 0.292
OHIO.......................................... URBAN........................... 0.208 0.207
OKLAHOMA...................................... RURAL........................... 0.220 0.231
OKLAHOMA...................................... URBAN........................... 0.173 0.180
OREGON........................................ RURAL........................... 0.280 0.280
OREGON........................................ URBAN........................... 0.336 0.344
PENNSYLVANIA.................................. RURAL........................... 0.263 0.274
PENNSYLVANIA.................................. URBAN........................... 0.176 0.179
PUERTO RICO................................... URBAN........................... 0.549 0.527
RHODE ISLAND.................................. URBAN........................... 0.292 0.291
SOUTH CAROLINA................................ RURAL........................... 0.187 0.185
SOUTH CAROLINA................................ URBAN........................... 0.186 0.190
SOUTH DAKOTA.................................. RURAL........................... 0.391 0.383
SOUTH DAKOTA.................................. URBAN........................... 0.238 0.229
TENNESSEE..................................... RURAL........................... 0.170 0.181
TENNESSEE..................................... URBAN........................... 0.177 0.180
TEXAS......................................... RURAL........................... 0.209 0.214
TEXAS......................................... URBAN........................... 0.171 0.177
UTAH.......................................... RURAL........................... 0.351 0.349
UTAH.......................................... URBAN........................... 0.303 0.315
VIRGINIA...................................... RURAL........................... 0.193 0.191
VIRGINIA...................................... URBAN........................... 0.222 0.226
VERMONT....................................... RURAL........................... 0.424 0.426
VERMONT....................................... URBAN........................... 0.340 0.340
WASHINGTON.................................... RURAL........................... 0.269 0.271
WASHINGTON.................................... URBAN........................... 0.295 0.294
WISCONSIN..................................... RURAL........................... 0.349 0.354
WISCONSIN..................................... URBAN........................... 0.311 0.290
WEST VIRGINIA................................. RURAL........................... 0.259 0.266
WEST VIRGINIA................................. URBAN........................... 0.292 0.285
WYOMING....................................... RURAL........................... 0.406 0.429
WYOMING....................................... URBAN........................... 0.326 0.311
----------------------------------------------------------------------------------------------------------------
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) and
Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2018
In the CY 2006 OPPS final rule with comment period (70 FR 68556),
we finalized a payment increase for rural sole community hospitals
(SCHs) of 7.1 percent for all services and procedures paid under the
OPPS, excluding drugs, biologicals, brachytherapy sources, and devices
paid under the pass-through payment policy in accordance with section
1833(t)(13)(B) of the Act, as added by section 411 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
(Public Law 108-173). Section 1833(t)(13) of the Act provided the
Secretary the authority to make an adjustment to OPPS payments for
rural hospitals, effective January 1, 2006, if justified by a study of
the difference in costs by APC between hospitals in rural areas and
hospitals in urban areas. Our analysis showed a difference in costs for
rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment
adjustment for rural SCHs of 7.1 percent for all services and
procedures paid under the OPPS, excluding separately payable drugs and
biologicals, brachytherapy sources, and devices paid under the pass-
through payment policy, in accordance with section 1833(t)(13)(B) of
the Act.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010
and 68227), for purposes of receiving this rural adjustment, we revised
Sec. 419.43(g) of the regulations to clarify that
[[Page 33595]]
essential access community hospitals (EACHs) also are eligible to
receive the rural SCH adjustment, assuming these entities otherwise
meet the rural adjustment criteria. Currently, two hospitals are
classified as EACHs, and as of CY 1998, under section 4201(c) of Public
Law 105-33, a hospital can no longer become newly classified as an
EACH.
This adjustment for rural SCHs is budget neutral and applied before
calculating outlier payments and copayments. We stated in the CY 2006
OPPS final rule with comment period (70 FR 68560) that we would not
reestablish the adjustment amount on an annual basis, but we may review
the adjustment in the future and, if appropriate, would revise the
adjustment. We provided the same 7.1 percent adjustment to rural SCHs,
including EACHs, again in CYs 2008 through 2017. Further, in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated
the regulations at Sec. 419.43(g)(4) to specify, in general terms,
that items paid at charges adjusted to costs by application of a
hospital-specific CCR are excluded from the 7.1 percent payment
adjustment.
In this CY 2018 OPPS/ASC proposed rule, for the CY 2018 OPPS, we
are proposing to continue our policy of a 7.1 percent payment
adjustment that is done in a budget neutral manner for rural SCHs,
including EACHs, for all services and procedures paid under the OPPS,
excluding separately payable drugs and biologicals, devices paid under
the pass-through payment policy, and items paid at charges reduced to
costs.
F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2018
1. Background
Since the inception of the OPPS, which was authorized by the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid
the 11 hospitals that meet the criteria for cancer hospitals identified
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered
outpatient hospital services. These cancer hospitals are exempted from
payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced
Budget Refinement Act of 1999 (Pub. L. 106-113), Congress established
section 1833(t)(7) of the Act, ``Transitional Adjustment to Limit
Decline in Payment,'' to determine OPPS payments to cancer and
children's hospitals based on their pre-BBA payment amount (often
referred to as ``held harmless'').
As required under section 1833(t)(7)(D)(ii) of the Act, a cancer
hospital receives the full amount of the difference between payments
for covered outpatient services under the OPPS and a ``pre-BBA
amount.'' That is, cancer hospitals are permanently held harmless to
their ``pre-BBA amount,'' and they receive transitional outpatient
payments (TOPs) or hold harmless payments to ensure that they do not
receive a payment that is lower in amount under the OPPS than the
payment amount they would have received before implementation of the
OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA
amount'' is the product of the hospital's reasonable costs for covered
outpatient services occurring in the current year and the base payment-
to-cost ratio (PCR) for the hospital defined in section
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the
determination of the base PCR are defined at 42 CFR 419.70(f). TOPs are
calculated on Worksheet E, Part B, of the Hospital Cost Report or the
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10, respectively) as applicable each year. Section 1833(t)(7)(I)
of the Act exempts TOPs from budget neutrality calculations.
Section 3138 of the Affordable Care Act amended section 1833(t) of
the Act by adding a new paragraph (18), which instructs the Secretary
to conduct a study to determine if, under the OPPS, outpatient costs
incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of
the Act with respect to APC groups exceed outpatient costs incurred by
other hospitals furnishing services under section 1833(t) of the Act,
as determined appropriate by the Secretary. Section 1833(t)(18)(A) of
the Act requires the Secretary to take into consideration the cost of
drugs and biologicals incurred by cancer hospitals and other hospitals.
Section 1833(t)(18)(B) of the Act provides that, if the Secretary
determines that cancer hospitals' costs are higher than those of other
hospitals, the Secretary shall provide an appropriate adjustment under
section 1833(t)(2)(E) of the Act to reflect these higher costs. In
2011, after conducting the study required by section 1833(t)(18)(A) of
the Act, we determined that outpatient costs incurred by the 11
specified cancer hospitals were greater than the costs incurred by
other OPPS hospitals. For a complete discussion regarding the cancer
hospital cost study, we refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74200 through 74201).
Based on these findings, we finalized a policy to provide a payment
adjustment to the 11 specified cancer hospitals that reflects their
higher outpatient costs as discussed in the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74202 through 74206). Specifically, we
adopted a policy to provide additional payments to the cancer hospitals
so that each cancer hospital's final PCR for services provided in a
given calendar year is equal to the weighted average PCR (which we
refer to as the ``target PCR'') for other hospitals paid under the
OPPS. The target PCR is set in advance of the calendar year and is
calculated using the most recent submitted or settled cost report data
that are available at the time of final rulemaking for the calendar
year. The amount of the payment adjustment is made on an aggregate
basis at cost report settlement. We note that the changes made by
section 1833(t)(18) of the Act do not affect the existing statutory
provisions that provide for TOPs for cancer hospitals. The TOPs are
assessed as usual after all payments, including the cancer hospital
payment adjustment, have been made for a cost reporting period. For CYs
2012 and 2013, the target PCR for purposes of the cancer hospital
payment adjustment was 0.91. For CY 2014, the target PCR for purposes
of the cancer hospital payment adjustment was 0.89. For CY 2015, the
target PCR was 0.90. For CY 2016, the target PCR was 0.92, as discussed
in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70362
through 70363). For CY 2017, the target PCR was 0.91, as discussed in
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79603
through 7960).
2. Proposed Policy for CY 2018
Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255)
amended section 1833(t)(18) of the Act by adding subparagraph (C),
which requires that in applying 42 CFR 419.43(i), that is, the payment
adjustment for certain cancer hospitals, for services furnished on or
after January 1, 2018, the target PCR adjustment be reduced by 1.0
percentage point less than what would otherwise apply. Section 16002(b)
also provides that, in addition to the percentage reduction, the
Secretary may consider making an additional percentage point reduction
to the target PCR that takes into account payment rates for applicable
items and services described under section 1833(t)(21)(C) of the Act
for hospitals that are not cancer hospitals described under section
1886(d)(1)(B)(v) of the Act. Further, in making any budget
[[Page 33596]]
neutrality adjustment under section 1833(t) of the Act, the Secretary
shall not take into account the reduced expenditures that result from
application of section 1833(t)(18)(C) of the Act. In this CY 2018 OPPS/
ASC proposed rule, for CY 2018, we are proposing to provide additional
payments to the 11 specified cancer hospitals so that each cancer
hospital's final PCR is equal to the weighted average PCR (or ``target
PCR'') for the other OPPS hospitals using the most recent submitted or
settled cost report data that are available at the time of the
development of this proposed rule, reduced by 1.0 percentage point to
comply with section 16002(b) of the 21st Century Cures Act. We are not
proposing an additional reduction beyond the 1.0 percentage point
reduction required by section 16002(b) for CY 2018. To calculate the
proposed CY 2018 target PCR, we use the same extract of cost report
data from HCRIS, as discussed in section II.A. of this proposed rule,
used to estimate costs for the CY 2018 OPPS. Using these cost report
data, we included data from Worksheet E, Part B, for each hospital,
using data from each hospital's most recent cost report, whether as
submitted or settled.
We then limited the dataset to the hospitals with CY 2016 claims
data that we used to model the impact of the proposed CY 2018 APC
relative payment weights (3,701 hospitals) because it is appropriate to
use the same set of hospitals that we are using to calibrate the
modeled CY 2018 OPPS. The cost report data for the hospitals in this
dataset were from cost report periods with fiscal year ends ranging
from 2013 to 2016. We then removed the cost report data of the 49
hospitals located in Puerto Rico from our dataset because we do not
believe that their cost structure reflects the costs of most hospitals
paid under the OPPS and, therefore, their inclusion may bias the
calculation of hospital-weighted statistics. We also removed the cost
report data of 16 hospitals because these hospitals had cost report
data that were not complete (missing aggregate OPPS payments, missing
aggregate cost data, or missing both), so that all cost reports in the
study would have both the payment and cost data necessary to calculate
a PCR for each hospital, leading to a proposed analytic file of 3,636
hospitals with cost report data.
Using this smaller dataset of cost report data, we estimated that,
on average, the OPPS payments to other hospitals furnishing services
under the OPPS were approximately 90 percent of reasonable cost
(weighted average PCR of 0.90). Therefore, after applying the 1.0
percentage point reduction as required by section 16002(b) of the 21st
Century Cures Act, we are proposing that the payment amount associated
with the cancer hospital payment adjustment to be determined at cost
report settlement would be the additional payment needed to result in a
proposed target PCR equal to 0.89 for each cancer hospital.
Table 11 below indicates the proposed estimated percentage increase
in OPPS payments to each cancer hospital for CY 2018 due to the
proposed cancer hospital payment adjustment policy. The actual amount
of the CY 2018 cancer hospital payment adjustment for each cancer
hospital will be determined at cost report settlement and will depend
on each hospital's CY 2018 payments and costs. We note that the
requirements contained in section 1833(t)(18) of the Act do not affect
the existing statutory provisions that provide for TOPs for cancer
hospitals. The TOPs will be assessed as usual after all payments,
including the cancer hospital payment adjustment, have been made for a
cost reporting period.
Table 11--Proposed Estimated CY 2018 Hospital-Specific Payment
Adjustment for Cancer Hospitals To Be Provided at Cost Report Settlement
------------------------------------------------------------------------
Proposed
estimated
percentage
increase in
OPPS payments
Provider No. Hospital name for CY 2018
due to
payment
adjustment
(%)
------------------------------------------------------------------------
050146......................... City of Hope 32.9
Comprehensive Cancer
Center.
050660......................... USC Norris Cancer 11.5
Hospital.
100079......................... Sylvester Comprehensive 24.3
Cancer Center.
100271......................... H. Lee Moffitt Cancer 23.1
Center & Research
Institute.
220162......................... Dana-Farber Cancer 45.8
Institute.
330154......................... Memorial Sloan- 47.1
Kettering Cancer
Center.
330354......................... Roswell Park Cancer 21.4
Institute.
360242......................... James Cancer Hospital & 28.9
Solove Research
Institute.
390196......................... Fox Chase Cancer Center 8.8
450076......................... M.D. Anderson Cancer 76.9
Center.
500138......................... Seattle Cancer Care 53.9
Alliance.
------------------------------------------------------------------------
G. Proposed Hospital Outpatient Outlier Payments
1. Background
The OPPS provides outlier payments to hospitals to help mitigate
the financial risk associated with high-cost and complex procedures,
where a very costly service could present a hospital with significant
financial loss. As explained in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66832 through 66834), we set our projected target
for aggregate outlier payments at 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year.
Outlier payments are provided on a service-by-service basis when the
cost of a service exceeds the APC payment amount multiplier threshold
(the APC payment amount multiplied by a certain amount) as well as the
APC payment amount plus a fixed-dollar amount threshold (the APC
payment plus a certain amount of dollars). In CY 2017, the outlier
threshold was met when the hospital's
[[Page 33597]]
cost of furnishing a service exceeded 1.75 times (the multiplier
threshold) the APC payment amount and exceeded the APC payment amount
plus $3,825 (the fixed-dollar amount threshold) (81 FR 79604 through
79606). If the cost of a service exceeds both the multiplier threshold
and the fixed-dollar threshold, the outlier payment is calculated as 50
percent of the amount by which the cost of furnishing the service
exceeds 1.75 times the APC payment amount. Beginning with CY 2009
payments, outlier payments are subject to a reconciliation process
similar to the IPPS outlier reconciliation process for cost reports, as
discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68594 through 68599).
It has been our policy to report the actual amount of outlier
payments as a percent of total spending in the claims being used to
model the OPPS. Our estimate of total outlier payments as a percent of
total CY 2016 OPPS payment, using CY 2016 claims available for this
proposed rule, is approximately 1.0 percent of the total aggregated
OPPS payments. Therefore, for CY 2016, we estimate that we paid the
outlier target of 1.0 percent of total aggregated OPPS payments.
For this proposed rule, using CY 2016 claims data and CY 2017
payment rates, we estimate that the aggregate outlier payments for CY
2017 would be approximately 1.0 percent of the total CY 2017 OPPS
payments. We are providing estimated CY 2018 outlier payments for
hospitals and CMHCs with claims included in the claims data that we
used to model impacts in the Hospital-Specific Impacts--Provider-
Specific Data file on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
2. Proposed Outlier Calculation for CY 2018
In this CY 2018 OPPS/ASC proposed rule, for CY 2018, we are
proposing to continue our policy of estimating outlier payments to be
1.0 percent of the estimated aggregate total payments under the OPPS.
We are proposing that a portion of that 1.0 percent, an amount equal to
less than 0.01 percent of outlier payments (or 0.0001 percent of total
OPPS payments) would be allocated to CMHCs for PHP outlier payments.
This is the amount of estimated outlier payments that would result from
the proposed CMHC outlier threshold as a proportion of total estimated
OPPS outlier payments. As discussed in section VIII.C. of this proposed
rule, we are proposing to continue our longstanding policy that if a
CMHC's cost for partial hospitalization services, paid under APC 5853
(Partial Hospitalization for CMHCs), exceeds 3.40 times the payment
rate for APC 5853, the outlier payment would be calculated as 50
percent of the amount by which the cost exceeds 3.40 times the proposed
APC 5853 payment rate. For further discussion of CMHC outlier payments,
we refer readers to section VIII.D. of this proposed rule.
To ensure that the estimated CY 2018 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we are proposing that the hospital outlier threshold be set so
that outlier payments would be triggered when a hospital's cost of
furnishing a service exceeds 1.75 times the APC payment amount and
exceeds the APC payment amount plus $4,325.
We calculated this proposed fixed-dollar threshold of $4,325 using
the standard methodology most recently used for CY 2017 (81 FR 79604
through 79605). For purposes of estimating outlier payments for this
proposed rule, we used the hospital-specific overall ancillary CCRs
available in the April 2017 update to the Outpatient Provider-Specific
File (OPSF). The OPSF contains provider-specific data, such as the most
current CCRs, which are maintained by the MACs and used by the OPPS
Pricer to pay claims. The claims that we use to model each OPPS update
lag by 2 years.
In order to estimate the CY 2018 hospital outlier payments for this
proposed rule, we inflated the charges on the CY 2016 claims using the
same inflation factor of 1.104055 that we used to estimate the IPPS
fixed-dollar outlier threshold for the FY 2018 IPPS/LTCH PPS proposed
rule (82 FR 20173). We used an inflation factor of 1.05074 to estimate
CY 2017 charges from the CY 2016 charges reported on CY 2016 claims.
The methodology for determining this charge inflation factor is
discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 57286). As we
stated in the CY 2005 OPPS final rule with comment period (69 FR
65845), we believe that the use of these charge inflation factors are
appropriate for the OPPS because, with the exception of the inpatient
routine service cost centers, hospitals use the same ancillary and
outpatient cost centers to capture costs and charges for inpatient and
outpatient services.
As noted in the CY 2007 OPPS/ASC final rule with comment period (71
FR 68011), we are concerned that we could systematically overestimate
the OPPS hospital outlier threshold if we did not apply a CCR inflation
adjustment factor. Therefore, we are proposing to apply the same CCR
inflation adjustment factor that we proposed to apply for the FY 2018
IPPS outlier calculation to the CCRs used to simulate the proposed CY
2018 OPPS outlier payments to determine the fixed-dollar threshold.
Specifically, for CY 2018, we proposed to apply an adjustment factor of
0.979187 to the CCRs that were in the April 2017 OPSF to trend them
forward from CY 2017 to CY 2018. The methodology for calculating this
proposed adjustment was discussed in the FY 2018 IPPS/LTCH PPS proposed
rule (82 FR 20173).
To model hospital outlier payments for the proposed rule, we
applied the overall CCRs from the April 2017 OPSF after adjustment
(using the proposed CCR inflation adjustment factor of 0.979187 to
approximate CY 2018 CCRs) to charges on CY 2016 claims that were
adjusted (using the proposed charge inflation factor of 1.104055 to
approximate CY 2018 charges). We simulated aggregated CY 2018 hospital
outlier payments using these costs for several different fixed-dollar
thresholds, holding the 1.75 multiplier threshold constant and assuming
that outlier payments would continue to be made at 50 percent of the
amount by which the cost of furnishing the service would exceed 1.75
times the APC payment amount, until the total outlier payments equaled
1.0 percent of aggregated estimated total CY 2018 OPPS payments. We
estimated that a proposed fixed-dollar threshold of $4,325, combined
with the proposed multiplier threshold of 1.75 times the APC payment
rate, would allocate 1.0 percent of aggregated total OPPS payments to
outlier payments. For CMHCs, we proposed that, if a CMHC's cost for
partial hospitalization services, paid under APC 5853, exceeds 3.40
times the payment rate for APC 5853, the outlier payment would be
calculated as 50 percent of the amount by which the cost exceeds 3.40
times the APC 5853 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that will
[[Page 33598]]
apply to certain outpatient items and services furnished by hospitals
that are required to report outpatient quality data and that fail to
meet the Hospital OQR Program requirements. For hospitals that fail to
meet the Hospital OQR Program requirements, we are proposing to
continue the policy that we implemented in CY 2010 that the hospitals'
costs will be compared to the reduced payments for purposes of outlier
eligibility and payment calculation. For more information on the
Hospital OQR Program, we refer readers to section XIII. of this
proposed rule.
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
The basic methodology for determining prospective payment rates for
HOPD services under the OPPS is set forth in existing regulations at 42
CFR part 419, subparts C and D. For this CY 2018 OPPS/ASC proposed
rule, the proposed payment rate for most services and procedures for
which payment is made under the OPPS is the product of the proposed
conversion factor calculated in accordance with section II.B. of this
proposed rule and the proposed relative payment weight determined under
section II.A. of this proposed rule. Therefore, the proposed national
unadjusted payment rate for most APCs contained in Addendum A to this
proposed rule (which is available via the Internet on the CMS Web site)
and for most HCPCS codes to which separate payment under the OPPS has
been assigned in Addendum B to this proposed rule (which is available
via the Internet on the CMS Web site) was calculated by multiplying the
proposed CY 2018 scaled weight for the APC by the proposed CY 2018
conversion factor.
We note that section 1833(t)(17) of the Act, which applies to
hospitals as defined under section 1886(d)(1)(B) of the Act, requires
that hospitals that fail to submit data required to be submitted on
quality measures selected by the Secretary, in the form and manner and
at a time specified by the Secretary, incur a reduction of 2.0
percentage points to their OPD fee schedule increase factor, that is,
the annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that apply to certain outpatient items and services provided by
hospitals that are required to report outpatient quality data and that
fail to meet the Hospital OQR Program (formerly referred to as the
Hospital Outpatient Quality Data Reporting Program (HOP QDRP))
requirements. For further discussion of the payment reduction for
hospitals that fail to meet the requirements of the Hospital OQR
Program, we refer readers to section XIII. of this proposed rule.
We demonstrate below the steps on how to determine the APC payments
that will be made in a calendar year under the OPPS to a hospital that
fulfills the Hospital OQR Program requirements and to a hospital that
fails to meet the Hospital OQR Program requirements for a service that
has any of the following status indicator assignments: ``J1'', ``J2'',
``P'', ``Q1'', ``Q2'', ``Q3'', ``Q4'', ``R'', ``S'', ``T'', ``U'', or
``V'' (as defined in Addendum D1 to this proposed rule, which is
available via the Internet on the CMS Web site), in a circumstance in
which the multiple procedure discount does not apply, the procedure is
not bilateral, and conditionally packaged services (status indicator of
``Q1'' and ``Q2'') qualify for separate payment. We note that, although
blood and blood products with status indicator ``R'' and brachytherapy
sources with status indicator ``U'' are not subject to wage adjustment,
they are subject to reduced payments when a hospital fails to meet the
Hospital OQR Program requirements.
Individual providers interested in calculating the payment amount
that they would receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to this proposed
rule (which are available via the Internet on the CMS Web site) should
follow the formulas presented in the following steps. For purposes of
the payment calculations below, we refer to the proposed national
unadjusted payment rate for hospitals that meet the requirements of the
Hospital OQR Program as the ``full'' national unadjusted payment rate.
We refer to the proposed national unadjusted payment rate for hospitals
that fail to meet the requirements of the Hospital OQR Program as the
``reduced'' national unadjusted payment rate. The reduced national
unadjusted payment rate is calculated by multiplying the reporting
ratio of 0.980 times the ``full'' national unadjusted payment rate. The
proposed national unadjusted payment rate used in the calculations
below is either the full national unadjusted payment rate or the
reduced national unadjusted payment rate, depending on whether the
hospital met its Hospital OQR Program requirements in order to receive
the proposed full CY 2018 OPPS fee schedule increase factor.
Step 1. Calculate 60 percent (the labor-related portion) of the
national unadjusted payment rate. Since the initial implementation of
the OPPS, we have used 60 percent to represent our estimate of that
portion of costs attributable, on average, to labor. We refer readers
to the April 7, 2000 OPPS final rule with comment period (65 FR 18496
through 18497) for a detailed discussion of how we derived this
percentage. During our regression analysis for the payment adjustment
for rural hospitals in the CY 2006 OPPS final rule with comment period
(70 FR 68553), we confirmed that this labor-related share for hospital
outpatient services is appropriate.
The formula below is a mathematical representation of Step 1 and
identifies the labor-related portion of a specific payment rate for a
specific service.
X is the labor-related portion of the national unadjusted payment rate.
X = .60 * (national unadjusted payment rate).
Step 2. Determine the wage index area in which the hospital is
located and identify the wage index level that applies to the specific
hospital. We note that, under the proposed CY 2018 OPPS policy for
continuing to use the OMB labor market area delineations based on the
2010 Decennial Census data for the wage indexes used under the IPPS, a
hold harmless policy for the wage index may apply, as discussed in
section II.C. of this proposed rule. The proposed wage index values
assigned to each area reflect the geographic statistical areas (which
are based upon OMB standards) to which hospitals are proposed to be
assigned for FY 2018 under the IPPS, reclassifications through the
MGCRB, section 1886(d)(8)(B) ``Lugar'' hospitals, reclassifications
under section 1886(d)(8)(E) of the Act, as defined in Sec. 412.103 of
the regulations, and hospitals designated as urban under section 601(g)
of Public Law 98-21. For further discussion of the proposed changes to
the FY 2018 IPPS wage indexes, as applied to the CY 2018 OPPS, we refer
readers to section II.C. of this proposed rule. We are proposing to
continue to apply a wage index floor of 1.00 to frontier States, in
accordance with section 10324 of the Affordable Care Act of 2010.
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of Public Law
108-173. Addendum L to this proposed rule (which is available via the
Internet on the CMS Web site) contains the qualifying counties and the
associated wage index increase developed for the FY 2018 IPPS, which
[[Page 33599]]
are listed in Table 2 in the FY 2018 IPPS/LTCH PPS proposed rule
available via the Internet on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/.
This step is to be followed only if the hospital is not reclassified or
redesignated under section 1886(d)(8) or section 1886(d)(10) of the
Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the labor-related portion of the national unadjusted payment
rate for the specific service by the wage index.
Xa is the labor-related portion of the national unadjusted
payment rate (wage adjusted).
Xa = .60 * (national unadjusted payment rate) * applicable
wage index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Y = .40 * (national unadjusted payment rate).
Adjusted Medicare Payment = Y + Xa.
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an SCH under
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
area, as defined in Sec. 412.64(b), or is treated as being located in
a rural area under Sec. 412.103, multiply the wage index adjusted
payment rate by 1.071 to calculate the total payment.
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment *
1.071.
We are providing examples below of the calculation of both the full
and reduced national unadjusted payment rates that will apply to
certain outpatient items and services performed by hospitals that meet
and that fail to meet the Hospital OQR Program requirements, using the
steps outlined above. For purposes of this example, we used a provider
that is located in Brooklyn, New York that is assigned to CBSA 35614.
This provider bills one service that is assigned to APC 5071 (Level 1
Excision/Biopsy/Incision and Drainage). The proposed CY 2018 full
national unadjusted payment rate for APC 5071 is approximately $552.34.
The proposed reduced national unadjusted payment rate for APC 5071 for
a hospital that fails to meet the Hospital OQR Program requirements is
approximately $541.29. This proposed reduced rate is calculated by
multiplying the proposed reporting ratio of 0.980 by the proposed full
unadjusted payment rate for APC 5071.
The proposed FY 2018 wage index for a provider located in CBSA
35614 in New York is 1.2892. The labor-related portion of the proposed
full national unadjusted payment is approximately $427.25 (.60 *
$552.34 * 1.2892). The labor-related portion of the proposed reduced
national unadjusted payment is approximately $418.70 (.60 * $541.29 *
1.2892). The nonlabor-related portion of the proposed full national
unadjusted payment is approximately $220.94 (.40 * $552.34). The
nonlabor-related portion of the proposed reduced national unadjusted
payment is approximately $216.52 (.40 * $541.29). The sum of the labor-
related and nonlabor-related portions of the proposed full national
adjusted payment is approximately $648.19 ($427.25 + $220.94). The sum
of the portions of the proposed reduced national adjusted payment is
approximately $635.22 ($418.70 + $216.52).
I. Proposed Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
copayment rate for a covered OPD service paid under the OPPS in CY
2006, and in calendar years thereafter, shall not exceed 40 percent of
the APC payment rate. Section 1833(t)(3)(B)(ii) of the Act provides
that, for a covered OPD service (or group of such services) furnished
in a year, the national unadjusted copayment amount cannot be less than
20 percent of the OPD fee schedule amount. However, section
1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment
that may be collected for a procedure performed in a year to the amount
of the inpatient hospital deductible for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare
Part B coinsurance for preventive services furnished on and after
January 1, 2011, that meet certain requirements, including flexible
sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during
the procedure. Our discussion of the changes made by the Affordable
Care Act with regard to copayments for preventive services furnished on
and after January 1, 2011, may be found in section XII.B. of the CY
2011 OPPS/ASC final rule with comment period (75 FR 72013).
2. Proposed OPPS Copayment Policy
For CY 2018, we are proposing to determine copayment amounts for
new and revised APCs using the same methodology that we implemented
beginning in CY 2004. (We refer readers to the November 7, 2003 OPPS
final rule with comment period (68 FR 63458).) In addition, we are
proposing to use the same standard rounding principles that we have
historically used in instances where the application of our standard
copayment methodology would result in a copayment amount that is less
than 20 percent and cannot be rounded, under standard rounding
principles, to 20 percent. (We refer readers to the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66687) in which we discuss our
rationale for applying these rounding principles.) The proposed
national unadjusted copayment amounts for services payable under the
OPPS that would be effective January 1, 2018 are included in Addenda A
and B to this proposed rule (which are available via the Internet on
the CMS Web site).
As discussed in section XIII.E. of this proposed, for CY 2018, the
proposed Medicare beneficiary's minimum unadjusted copayment and
national unadjusted copayment for a service to which a reduced national
unadjusted payment rate applies will equal the product of the reporting
ratio and the national unadjusted copayment, or the product of the
reporting ratio and the minimum unadjusted copayment, respectively, for
the service.
[[Page 33600]]
We note that OPPS copayments may increase or decrease each year
based on changes in the calculated APC payment rates due to updated
cost report and claims data, and any changes to the OPPS cost modeling
process. However, as described in the CY 2004 OPPS final rule with
comment period, the development of the copayment methodology generally
moves beneficiary copayments closer to 20 percent of OPPS APC payments
(68 FR 63458 through 63459).
In the CY 2004 OPPS final rule with comment period (68 FR 63459),
we adopted a new methodology to calculate unadjusted copayment amounts
in situations including reorganizing APCs, and we finalized the
following rules to determine copayment amounts in CY 2004 and
subsequent years.
When an APC group consists solely of HCPCS codes that were
not paid under the OPPS the prior year because they were packaged or
excluded or are new codes, the unadjusted copayment amount would be 20
percent of the APC payment rate.
If a new APC that did not exist during the prior year is
created and consists of HCPCS codes previously assigned to other APCs,
the copayment amount is calculated as the product of the APC payment
rate and the lowest coinsurance percentage of the codes comprising the
new APC.
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
equal to or greater than the prior year's rate, the copayment amount
remains constant (unless the resulting coinsurance percentage is less
than 20 percent).
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
less than the prior year's rate, the copayment amount is calculated as
the product of the new payment rate and the prior year's coinsurance
percentage.
If HCPCS codes are added to or deleted from an APC and,
after recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in a decrease in the coinsurance
percentage for the reconfigured APC, the copayment amount would not
change (unless retaining the copayment amount would result in a
coinsurance rate less than 20 percent).
If HCPCS codes are added to an APC and, after
recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in an increase in the coinsurance
percentage for the reconfigured APC, the copayment amount would be
calculated as the product of the payment rate of the reconfigured APC
and the lowest coinsurance percentage of the codes being added to the
reconfigured APC.
We noted in the CY 2004 OPPS final rule with comment period that we
would seek to lower the copayment percentage for a service in an APC
from the prior year if the copayment percentage was greater than 20
percent. We noted that this principle was consistent with section
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the
national unadjusted coinsurance rate so that beneficiary liability will
eventually equal 20 percent of the OPPS payment rate for all OPPS
services to which a copayment applies, and with section 1833(t)(3)(B)
of the Act, which achieves a 20-percent copayment percentage when fully
phased in and gives the Secretary the authority to set rules for
determining copayment amounts for new services. We further noted that
the use of this methodology would, in general, reduce the beneficiary
coinsurance rate and copayment amount for APCs for which the payment
rate changes as the result of the reconfiguration of APCs and/or
recalibration of relative payment weights (68 FR 63459).
3. Proposed Calculation of an Adjusted Copayment Amount for an APC
Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its Hospital OQR Program
requirements should follow the formulas presented in the following
steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its payment rate.
For example, using APC 5071, $110.47 is approximately 20 percent of the
proposed full national unadjusted payment rate of $552.34. For APCs
with only a minimum unadjusted copayment in Addenda A and B to this
proposed rule (which are available via the Internet on the CMS Web
site), the beneficiary payment percentage is 20 percent.
The formula below is a mathematical representation of Step 1 and
calculates the national copayment as a percentage of national payment
for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted payment
rate for APC.
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.H. of this proposed rule. Calculate the rural
adjustment for eligible providers as indicated in Step 6 under section
II.H. of this proposed rule.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC. The formula below is a mathematical representation
of Step 3 and applies the beneficiary payment percentage to the
adjusted payment rate for a service calculated under section II.H. of
this proposed rule, with and without the rural adjustment, to calculate
the adjusted beneficiary copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its Hospital OQR Program
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.980.
The proposed unadjusted copayments for services payable under the
OPPS that would be effective January 1, 2018, are shown in Addenda A
and B to this proposed rule (which are available via the Internet on
the CMS Web site). We note that the proposed national unadjusted
payment rates and copayment rates shown in Addenda A and B to this
proposed rule reflect the proposed CY 2018 OPD fee schedule increase
factor discussed in section II.B. of this proposed rule.
In addition, as noted above, section 1833(t)(8)(C)(i) of the Act
limits the amount of beneficiary copayment that may be collected for a
procedure performed in a year to the amount of the inpatient hospital
deductible for that year.
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New CPT and Level II HCPCS Codes
CPT and Level II HCPCS codes are used to report procedures,
services, items, and supplies under the hospital OPPS. Specifically,
CMS recognizes the following codes on OPPS claims:
Category I CPT codes, which describe surgical procedures
and medical services;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
[[Page 33601]]
Level II HCPCS codes, which are used primarily to identify
products, supplies, temporary procedures, and services not described by
CPT codes.
CPT codes are established by the American Medical Association (AMA)
and the Level II HCPCS codes are established by the CMS HCPCS
Workgroup. These codes are updated and changed throughout the year. CPT
and HCPCS code changes that affect the OPPS are published both through
the annual rulemaking cycle and through the OPPS quarterly update
Change Requests (CRs). CMS releases new Level II HCPCS codes to the
public or recognizes the release of new CPT codes by the AMA and makes
these codes effective (that is, the codes can be reported on Medicare
claims) outside of the formal rulemaking process via OPPS quarterly
update CRs. Based on our review, we assign the new CPT and Level II
HCPCS codes to interim status indicators (SIs) and APCs. These interim
assignments are finalized in the OPPS/ASC final rules. This quarterly
process offers hospitals access to codes that may more accurately
describe items or services furnished and provides payment or more
accurate payment for these items or services in a timelier manner than
if we waited for the annual rulemaking process. We solicit public
comments on these new codes and finalize our proposals related to these
codes through our annual rulemaking process.
We note that, under the OPPS, the APC assignment determines the
payment rate for an item, procedure, or service. Those items,
procedures, or services not paid separately under the hospital OPPS are
assigned to appropriate status indicators. Certain payment status
indicators provide separate payment, while other payment status
indicators do not. Section XI. of this proposed rule discusses the
various status indicators used under the OPPS.
In Table 12 below, we summarize our current process for updating
codes through our OPPS quarterly update CRs, seeking public comments,
and finalizing the treatment of these new codes under the OPPS.
Table 12--Comment Timeframe for New or Revised HCPCS Codes
----------------------------------------------------------------------------------------------------------------
OPPS quarterly update CR Type of code Effective date Comments sought When finalized
----------------------------------------------------------------------------------------------------------------
April l, 2017................... Level II HCPCS April 1, 2017..... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
July 1, 2017.................... Level II HCPCS July 1, 2017...... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
Category I July 1, 2017...... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
(certain vaccine proposed rule. final rule with
codes) and III comment period.
CPT codes.
October 1, 2017................. Level II HCPCS October 1, 2017... CY 2018 OPPS/ASC CY 2019 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
January 1, 2018................. Level II HCPCS January 1, 2018... CY 2018 OPPS/ASC CY 2019 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
Category I and III January 1, 2018... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
CPT Codes. proposed rule. final rule with
comment period.
----------------------------------------------------------------------------------------------------------------
1. Proposed Treatment of New HCPCS Codes That Were Effective April 1,
2017 for Which We Are Soliciting Public Comments in This CY 2018 OPPS/
ASC Proposed Rule
Through the April 2017 OPPS quarterly update CR (Transmittal 3728,
Change Request 10005, dated March 3, 2017), we made effective six new
Level II HCPCS codes for separate payment under the OPPS. In this CY
2018 OPPS/ASC proposed rule, we are soliciting public comments on the
proposed APC and status indicator assignments for these Level II HCPCS
codes, which are listed in Table 13 of this proposed rule. The proposed
payment rates for these codes, where applicable, can be found in
Addendum B to this proposed rule (which is available via the Internet
on the CMS Web site).
Table 13--New Level II HCPCS Codes Effective April 1, 2017
----------------------------------------------------------------------------------------------------------------
Proposed CY Proposed CY
CY 2017 HCPCS code CY 2017 long descriptor 2018 SI 2018 APC
----------------------------------------------------------------------------------------------------------------
C9484................................. Injection, eteplirsen, 10 mg........... G 9484
C9485................................. Injection, olaratumab, 10 mg........... G 9485
C9486................................. Injection, granisetron extended G 9486
release, 0.1 mg.
C9487 \*\............................. Ustekinumab, for intravenous injection, G 9487
1 mg.
C9488................................. Injection, conivaptan hydrochloride, 1 G 9488
mg.
----------------------------------------------------------------------------------------------------------------
* HCPCS code C9487, which was effective April 1, 2017, was deleted June 30, 2017 and replaced with HCPCS code
Q9989 (Ustekinumab, for intravenous injection, 1 mg) effective July 1, 2017.
[[Page 33602]]
2. Proposed Treatment of New HCPCS Codes That Were Effective July 1,
2017 for Which We Are Soliciting Public Comments in This CY 2018 OPPS/
ASC Proposed Rule
Through the July 2017 OPPS quarterly update CR (Transmittal 3783,
Change Request 10122, dated May 26, 2017), we made 10 new Category III
CPT codes and 13 Level II HCPCS codes effective July 1, 2017 and
assigned them to appropriate interim OPPS status indicators and APCs.
Three HCPCS codes are no longer payable under the OPPS because they
have been replaced with more specific or different codes effective July
1, 2017. In particular, the coverage indicator for HCPCS codes J1725
(Injection, hydroxyprogesterone caproate, 1 mg) and P9072 (Platelets,
pheresis, pathogen reduced or rapid bacterial tested, each unit) was
revised to ``Not Payable by Medicare'' because these codes were
replaced with more specific HCPCS codes. HCPCS code J1725 was replaced
with HCPCS codes Q9986, and HCPCS code P9072 was replaced with HCPCS
code Q9988 (Platelets, pheresis, pathogen reduced, each unit). Further,
HCPCS code C9487 (Ustekinumab, for intravenous injection, 1 mg) was
deleted June 30, 2017 and replaced with HCPCS code Q9989 effective July
1, 2017. Because HCPCS code Q9989 describes the same drug as HCPCS code
C9487, we are proposing to continue the drug's pass-through payment
status and to assign HCPCS code Q9989 to the same APC and status
indicators as its predecessor HCPCS code C9487, as shown in Table 14.
In this CY 2018 OPPS/ASC proposed rule, we are soliciting public
comments on the proposed APC and status indicator assignments for CY
2018 for the CPT and Level II HCPCS codes implemented on July 1, 2017,
all of which are listed in Table 14 below. The proposed payment rates
and status indicators for these codes, where applicable, can be found
in Addendum B to this proposed rule (which is available via the
Internet on the CMS Web site).
Table 14--New Category III CPT and Level II HCPCS Codes Effective July 1, 2017
----------------------------------------------------------------------------------------------------------------
Proposed CY
CY 2017 HCPCS code CY 2017 long descriptor Proposed CY 2018 SI 2018 APC
----------------------------------------------------------------------------------------------------------------
C9489............................. Injection, nusinersen, 0.1 mg...... G 9489
C9490............................. Injection, bezlotoxumab, 10 mg..... G 9490
C9745............................. Nasal endoscopy, surgical; balloon J1 5165
dilation of eustachian tube.
C9746............................. Transperineal implantation of J1 5377
permanent adjustable balloon
continence device, with
cystourethroscopy, when performed
and/or fluoroscopy, when performed.
C9747............................. Ablation of prostate, transrectal, J1 5376
high intensity focused ultrasound
(HIFU), including imaging guidance.
K0553............................. Supply allowance for therapeutic Y N/A
continuous glucose monitor (CGM),
includes all supplies and
accessories, 1 month supply = 1
Unit Of Service.
K0554............................. Receiver (monitor), dedicated, for Y N/A
use with therapeutic glucose
continuous monitor system.
Q9984............................. Levonorgestrel-releasing E1 N/A
intrauterine contraceptive system
(Kyleena), 19.5 mg.
Q9985............................. Injection, hydroxyprogesterone N N/A
caproate, not otherwise specified,
10 mg.
Q9986 *........................... Injection, hydroxyprogesterone K 9074
caproate (Makena), 10 mg.
Q9987............................. Pathogen(s) test for platelets..... S 1493
Q9988............................. Platelets, pheresis, pathogen R 9536
reduced, each unit.
Q9989#............................ Ustekinumab, for intravenous G 9487
injection, 1 mg.
0469T............................. Retinal polarization scan, ocular E1 N/A
screening with on-site automated
results, bilateral.
0470T............................. Optical coherence tomography (OCT) M N/A
for microstructural and
morphological imaging of skin,
image acquisition, interpretation,
and report; first lesion.
0471T............................. Optical coherence tomography (OCT) N N/A
for microstructural and
morphological imaging of skin,
image acquisition, interpretation,
and report; each additional lesion
(List separately in addition to
code for primary procedure).
0472T............................. Device evaluation, interrogation, Q1 5743
and initial programming of intra-
ocular retinal electrode array
(eg, retinal prosthesis), in
person, with iterative adjustment
of the implantable device to test
functionality, select optimal
permanent programmed values with
analysis, including visual
training, with review and report
by a qualified health care
professional.
0473T............................. Device evaluation and interrogation Q1 5742
of intra-ocular retinal electrode
array (eg, retinal prosthesis), in
person, including reprogramming
and visual training, when
performed, with review and report
by a qualified health care
professional.
0474T............................. Insertion of anterior segment J1 5492
aqueous drainage device, with
creation of intraocular reservoir,
internal approach, into the
supraciliary space.
0475T............................. Recording of fetal magnetic cardiac M N/A
signal using at least 3 channels;
patient recording and storage,
data scanning with signal
extraction, technical analysis and
result, as well as supervision,
review, and interpretation of
report by a physician or other
qualified health care professional.
0476T............................. Recording of fetal magnetic cardiac Q1 5734
signal using at least 3 channels;
patient recording, data scanning,
with raw electronic signal
transfer of data and storage.
0477T............................. Recording of fetal magnetic cardiac Q1 5734
signal using at least 3 channels;
signal extraction, technical
analysis, and result.
0478T............................. Recording of fetal magnetic cardiac M N/A
signal using at least 3 channels;
review, interpretation, report by
physician or other qualified
health care professional.
----------------------------------------------------------------------------------------------------------------
* HCPCS code J1725 (Injection, hydroxyprogesterone caproate, 1 mg) was replaced with HCPCS code Q9986 effective
July 1, 2017.
# HCPCS code C9487, which was effective April 1, 2017, was replaced with HCPCS code Q9989 (Ustekinumab, for
intravenous injection, 1 mg) effective July 1, 2017.
[[Page 33603]]
3. Proposed Process for New Level II HCPCS Codes That Will Be Effective
October 1, 2017 and January 1, 2018 for Which We Will Be Soliciting
Public Comments in the CY 2018 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we will solicit comments on
those new Level II HCPCS codes that are effective October 1, 2017 and
January 1, 2018 in the CY 2018 OPPS/ASC final rule with comment period,
thereby allowing us to finalize the status indicators, APCs, and
payment rates for the codes in the CY 2019 OPPS/ASC final rule with
comment period. These codes will be released to the public through the
October and January OPPS quarterly update CRs and via the CMS HCPCS Web
site (for Level II HCPCS codes).
For CY 2018, we are proposing to continue our established policy of
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final
rule with comment period to those new Level II HCPCS codes that are
effective October 1, 2017 and January 1, 2018 to indicate that we are
assigning them an interim payment status, which is subject to public
comment. We will be inviting public comments in the CY 2018 OPPS/ASC
final rule with comment period on the status indicator, APC
assignments, and payment rates for these codes, if applicable, which
would then be finalized in the CY 2019 OPPS/ASC final rule with comment
period.
4. Proposed Treatment of New and Revised CY 2018 Category I and III CPT
Codes That Will Be Effective January 1, 2018 for Which We Are
Soliciting Public Comments in This CY 2018 OPPS/ASC Proposed Rule
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G-codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We note
that even if we find that we need to create HCPCS G-codes in place of
certain CPT codes for the MPFS proposed rule, we do not anticipate that
these HCPCS G-codes will always be necessary for OPPS purposes. We will
make every effort to include proposed APC and status indicator
assignments for all new and revised CPT codes that the AMA makes
publicly available in time for us to include them in the proposed rule,
and to avoid the resort to HCPCS G-codes and the resulting delay in
utilization of the most current CPT codes. Also, we finalized our
proposal to make interim APC and status indicator assignments for CPT
codes that are not available in time for the proposed rule and that
describe wholly new services (such as new technologies or new surgical
procedures), solicit public comments, and finalize the specific APC and
status indicator assignments for those codes in the following year's
final rule.
For the CY 2018 OPPS update, we received the CY 2018 CPT codes from
AMA in time for inclusion in this CY 2018 OPPS/ASC proposed rule. The
new, revised, and deleted CY 2018 Category I and III CPT codes can be
found in Addendum B to this proposed rule (which is available via the
Internet on the CMS Web site). We note that the new and revised codes
are assigned to new comment indicator ``NP'' to indicate that the code
is new for the next calendar year or the code is an existing code with
substantial revision to its code descriptor in the next calendar year
as compared to current calendar year with a proposed APC assignment,
and that comments will be accepted on the proposed APC assignment and
status indicator.
Further, we remind readers that the CPT code descriptors that
appear in Addendum B are short descriptors and do not accurately
describe the complete procedure, service, or item described by the CPT
code. Therefore, we are including the 5-digit placeholder codes and
their long descriptors for the new and revised CY 2018 CPT codes in
Addendum O to this proposed rule (which is available via the Internet
on the CMS Web site) so that the public can adequately comment on our
proposed APCs and status indicator assignments. The 5-digit placeholder
codes can be found in Addendum O, specifically under the column labeled
``CY 2018 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,'' to
this proposed rule. The final CPT code numbers will be included in the
CY 2018 OPPS/ASC final rule with comment period. We note that not every
code listed in Addendum O is subject to comment. For the new and
revised Category I and III CPT codes, we are requesting comments on
only those codes that are assigned to comment indicator ``NP''.
In summary, we are soliciting public comments on the proposed CY
2018 status indicators and APC assignments for the new and revised
Category I and III CPT codes that will be effective January 1, 2018.
The CPT codes are listed in Addendum B to this proposed rule with short
descriptors only. We list them again in Addendum O to this proposed
rule with long descriptors. We also are proposing to finalize the
status indicator and APC assignments for these codes (with their final
CPT code numbers) in the CY 2018 OPPS/ASC final rule with comment
period. The proposed status indicator and APC assignment for these
codes can be found in Addendum B to this proposed rule (which is
available via the Internet on the CMS Web site).
5. Proposed Care Management Coding Changes Effective January 1, 2018
(APCs 5821 and 5822)
As noted in the CY 2018 MPFS proposed rule, we continue to be
interested in the ongoing work of the medical community to refine the
set of codes used to describe care management services, including
chronic care management. We are proposing to adopt CPT replacement
codes for CY 2018 for several of the care management services finalized
last year and are seeking public comment on ways we might further
reduce burden on reporting providers, including through stronger
alignment between CMS requirements and CPT guidance for existing and
potential new codes. Table 15 below details the proposed care
management coding changes. We refer readers to Addendum B to the
proposed rule (which is available via the Internet on the CMS Web site)
for the proposed CY 2018 payment rates for the replacement codes.
[[Page 33604]]
Table 15--Proposed Care Management Coding Changes Effective January 1, 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY
CY2017 HCPCS short CY 2017 OPPS 2018 Proposed CY 2018 Proposed CY Proposed CY
CY 2017 HCPCS code descriptor CY 2017 OPPS SI ASC replacement replacement HCPCS 2018 OPPS SI 2018 OPPS APC
CPT code * short descriptor
--------------------------------------------------------------------------------------------------------------------------------------------------------
G0502.......................... Init psych care S 5822 994X1 1st psyc collab S 5822
Manag, 70min. care mgmt.
G0503.......................... Subseq psych care S 5822 994X2 Sbsg psyc collab S 5822
man, 60mi. care mgmt.
G0504.......................... Init/sub psych N N/A 994X3 1st/sbsq psyc N N/A
Care add 30 m. collab care.
G0505.......................... Cog/func S 5822 99XX3 Assmt & care pln S 5822
assessment outpt. pt cog imp.
G0507.......................... Care manage serv S 5821 99XX5 Care mgmt. svc S 5821
minimum 20. bhvl hlth cond.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These are the 5-digit placeholder CPT codes. The final CPT code numbers will be included in the CY 2018 OPPS/ASC final rule with comment period. The
long descriptors for the codes can be found in Addendum O (New Category I and Category III CPT Codes Effective January 1, 2018) to this proposed rule,
which is available via the Internet on the CMS Web site.
B. Proposed OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered hospital outpatient department
services. Section 1833(t)(2)(B) of the Act provides that the Secretary
may establish groups of covered OPD services within this classification
system, so that services classified within each group are comparable
clinically and with respect to the use of resources. In accordance with
these provisions, we developed a grouping classification system,
referred to as Ambulatory Payment Classifications (APCs), as set forth
in regulations at 42 CFR[thinsp]419.31. We use Level I and Level II
HCPCS codes to identify and group the services within each APC. The
APCs are organized such that each group is homogeneous both clinically
and in terms of resource use. Using this classification system, we have
established distinct groups of similar services. We also have developed
separate APC groups for certain medical devices, drugs, biologicals,
therapeutic radiopharmaceuticals, and brachytherapy devices that are
not packaged into the payment for the procedure.
We have packaged into the payment for each procedure or service
within an APC group the costs associated with those items and services
that are typically ancillary and supportive to a primary diagnostic or
therapeutic modality and, in those cases, are an integral part of the
primary service they support. Therefore, we do not make separate
payment for these packaged items or services. In general, packaged
items and services include, but are not limited to, the items and
services listed in Sec. [thinsp]419.2(b) of the regulations. A further
discussion of packaged services is included in section II.A.3. of this
proposed rule.
Under the OPPS, we generally pay for covered hospital outpatient
services on a rate-per-service basis, where the service may be reported
with one or more HCPCS codes. Payment varies according to the APC group
to which the independent service or combination of services is
assigned. For CY 2018, we are proposing that each APC relative payment
weight represents the hospital cost of the services included in that
APC, relative to the hospital cost of the services included in APC 5012
(Clinic Visits and Related Services). The APC relative payment weights
are scaled to APC 5012 because it is the hospital clinic visit APC and
clinic visits are among the most frequently furnished services in the
hospital outpatient setting.
2. Application of the 2 Times Rule
In accordance with section 1833(t)(2) of the Act and Sec. 419.31
of the regulations, we annually review the items and services within an
APC group to determine, with respect to comparability of the use of
resources, if the highest cost for an item or service in the APC group
is more than 2 times greater than the lowest cost for an item or
service within the same APC group (referred to as the ``2 times
rule''). The statute authorizes the Secretary to make exceptions to the
2 times rule in unusual cases, such as low-volume items and services
(but the Secretary may not make such an exception in the case of a drug
or biological that has been designated as an orphan drug under section
526 of the Federal Food, Drug, and Cosmetic Act). In determining the
APCs with a 2 times rule violation, we consider only those HCPCS codes
that are significant based on the number of claims. We note that, for
purposes of identifying significant procedure codes for examination
under the 2 times rule, we consider procedure codes that have more than
1,000 single major claims or procedure codes that both have more than
99 single major claims and contribute at least 2 percent of the single
major claims used to establish the APC cost to be significant (75 FR
71832). This longstanding definition of when a procedure code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 or fewer claims is negligible within the
set of approximately 100 million single procedure or single session
claims we use for establishing costs. Similarly, a procedure code for
which there are fewer than 99 single claims and that comprises less
than 2 percent of the single major claims within an APC will have a
negligible impact on the APC cost (75 FR 71832). In this section of
this proposed rule, for CY 2018, we are proposing to make exceptions to
this limit on the variation of costs within each APC group in unusual
cases, such as for certain low volume items and services.
For the CY 2018 OPPS, we have identified the APCs with violations
of the 2 times rule. Therefore, we are proposing changes to the
procedure codes assigned to these APCs in Addendum B to this proposed
rule. We note that Addendum B does not appear in the printed version of
the Federal Register as part of this CY 2018 OPPS/ASC proposed rule.
Rather, it is published and made available via the Internet on the CMS
Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/. To eliminate a violation of
the 2 times rule
[[Page 33605]]
and improve clinical and resource homogeneity, we are proposing to
reassign these procedure codes to new APCs that contain services that
are similar with regard to both their clinical and resource
characteristics. In many cases, the proposed procedure code
reassignments and associated APC reconfigurations for CY 2018 included
in this proposed rule are related to changes in costs of services that
were observed in the CY 2016 claims data newly available for CY 2018
ratesetting. Addendum B to this CY 2018 OPPS/ASC proposed rule
identifies with a comment indicator ``CH'' those procedure codes for
which we are proposing a change to the APC assignment or status
indicator, or both, that were initially assigned in the July 1, 2017
OPPS Addendum B Update (available via the Internet on the CMS Web site
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html).
3. Proposed APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we are proposing for CY
2018, we reviewed all of the APCs to determine which APCs would not
meet the requirements of the 2 times rule. We used the following
criteria to evaluate whether to propose exceptions to the 2 times rule
for affected APCs:
Resource homogeneity;
Clinical homogeneity;
Hospital outpatient setting utilization;
Frequency of service (volume); and
Opportunity for upcoding and code fragments.
For a detailed discussion of these criteria, we refer readers to
the April 7, 2000 OPPS final rule with comment period (65 FR 18457 and
18458).
Based on the CY 2016 claims data available for this CY 2018
proposed rule, we found 12 APCs with violations of the 2 times rule. We
applied the criteria as described above to identify the APCs for which
we are proposing to make exceptions under the 2 times rule for CY 2018,
and found that all of the 12 APCs we identified meet the criteria for
an exception to the 2 times rule based on the CY 2016 claims data
available for this proposed rule. We did not include in that
determination those APCs where a 2 times rule violation was not a
relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS
codes assigned to it that have a similar geometric mean costs and do
not create a 2 time rule violation. Therefore, we have only identified
those APCs, including those with criteria-based costs, such as device-
dependent CPT/HCPCS codes, with 2 times rule violations.
We note that, for cases in which a recommendation by the HOP Panel
appears to result in or allow a violation of the 2 times rule, we may
accept the HOP Panel's recommendation because those recommendations are
based on explicit consideration (that is, a review of the latest OPPS
claims data and group discussion of the issue) of resource use,
clinical homogeneity, site of service, and the quality of the claims
data used to determine the APC payment rates.
Table 16 of this proposed rule lists the 12 APCs that we are
proposing to except from the 2 times rule for CY 2018 based on the
criteria cited above and claims data submitted between January 1, 2016
and December 31, 2016, and processed on or before December 31, 2016.
For the final rule with comment period, we intend to use claims data
for dates of service between January 1, 2016 and December 31, 2016 that
were processed on or before June 30, 2017, and updated CCRs, if
available. The geometric mean costs for covered hospital outpatient
services for these and all other APCs that were used in the development
of this proposed rule can be found on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
Table 16--Proposed APC Exceptions to the Two Times Rule for CY 2018
------------------------------------------------------------------------
Proposed CY 2018 APC Proposed CY 2018 APC title
------------------------------------------------------------------------
5112.............................. Level 2 Musculoskeletal Procedures.
5161.............................. Level 1 ENT Procedures.
5311.............................. Level 1 Lower GI Procedures.
5461.............................. Level 1 Neurostimulator and Related
Procedures.
5521.............................. Level 1 Imaging without Contrast.
5573.............................. Level 3 Imaging with Contrast.
5611.............................. Level 1 Therapeutic Radiation
Treatment Preparation.
5691.............................. Level 1 Drug Administration.
5731.............................. Level 1 Minor Procedures.
5735.............................. Level 5 Minor Procedures.
5771.............................. Cardiac Rehabilitation.
5823.............................. Level 3 Health and Behavior
Services.
------------------------------------------------------------------------
C. Proposed New Technology APCs
1. Background
In the November 30, 2001 final rule (66 FR 59903), we finalized
changes to the time period in which a service can be eligible for
payment under a New Technology APC. Beginning in CY 2002, we retain
services within New Technology APC groups until we gather sufficient
claims data to enable us to assign the service to an appropriate
clinical APC. This policy allows us to move a service from a New
Technology APC in less than 2 years if sufficient data are available.
It also allows us to retain a service in a New Technology APC for more
than 2 years if sufficient data upon which to base a decision for
reassignment have not been collected.
For CY 2017, there are 51 New Technology APC levels, ranging from
the lowest cost band assigned to APC 1491 (New Technology--Level 1A
($0-$10)) through the highest cost band assigned to APC 1906 (New
Technology--Level 51 ($140,001-$160,000)). In the CY 2004 OPPS final
rule with comment period (68 FR 63416), we restructured the New
Technology APCs to make the cost intervals more consistent across
payment levels and refined the cost bands for these APCs to retain two
parallel sets of New Technology APCs, one set with a status indicator
of ``S'' (Significant Procedures, Not Discounted when Multiple. Paid
under OPPS; separate APC payment) and the other set with a status
indicator of ``T'' (Significant Procedure, Multiple Reduction Applies.
Paid under OPPS; separate APC payment). These current New Technology
APC configurations allow us to price new technology services more
appropriately and consistently.
We note that the cost bands for the New Technology APCs,
specifically, APCs 1491 through 1599 and 1901 through 1906, vary with
increments ranging from $10 to $19,999. These cost bands identify the
APCs to which new technology procedures and services with estimated
service costs that fall within those cost bands are assigned under the
OPPS. Payment for each APC is made at the mid-point of the APC's
assigned cost band. For example, payment for New Technology APC 1507
(New Technology--Level 7 ($501-$600)) is made at $550.50.
Every year we receive several requests for higher payment amounts
under the New Technology APCs for specific procedures paid under the
OPPS because they require the use of expensive equipment. We are taking
this opportunity to reiterate our response in general to the issue of
hospitals' capital expenditures as they relate to the OPPS and
Medicare, as specified in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70374).
Under the OPPS, one of our goals is to make payments that are
appropriate
[[Page 33606]]
for the services that are necessary for the treatment of Medicare
beneficiaries. The OPPS, like other Medicare payment systems, is budget
neutral and increases are limited to the annual hospital inpatient
market basket increase. We believe that our payment rates generally
reflect the costs that are associated with providing care to Medicare
beneficiaries, and we believe that our payment rates are adequate to
ensure access to services (80 FR 70374).
For many emerging technologies, there is a transitional period
during which utilization may be low, often because providers are first
learning about the techniques and their clinical utility. Quite often,
parties request that Medicare make higher payment amounts under the New
Technology APCs for new procedures in that transitional phase. These
requests, and their accompanying estimates for expected total patient
utilization, often reflect very low rates of patient use of expensive
equipment, resulting in high per use costs for which requesters believe
Medicare should make full payment. Medicare does not, and we believe
should not, assume responsibility for more than its share of the costs
of procedures based on projected utilization for Medicare beneficiaries
and does not set its payment rates based on initial projections of low
utilization for services that require expensive capital equipment. For
the OPPS, we rely on hospitals to make informed business decisions
regarding the acquisition of high cost capital equipment, taking into
consideration their knowledge about their entire patient base (Medicare
beneficiaries included) and an understanding of Medicare's and other
payers' payment policies. (We refer readers to the CY 2013 OPPS/ASC
final rule with comment period (77 FR 68314) for further discussion
regarding this payment policy.)
We note that, in a budget neutral environment, payments may not
fully cover hospitals' costs in a particular circumstance, including
those for the purchase and maintenance of capital equipment. We rely on
hospitals to make their decisions regarding the acquisition of high
cost equipment with the understanding that the Medicare program must be
careful to establish its initial payment rates, including those made
through New Technology APCs, for new services that lack hospital claims
data based on realistic utilization projections for all such services
delivered in cost-efficient hospital outpatient settings. As the OPPS
acquires claims data regarding hospital costs associated with new
procedures, we regularly examine the claims data and any available new
information regarding the clinical aspects of new procedures to confirm
that our OPPS payments remain appropriate for procedures as they
transition into mainstream medical practice (77 FR 68314).
2. Proposed Revised and Additional New Technology APC Groups
As stated above, for CY 2017 there are currently 51 levels of New
Technology APCs. To improve our ability to have payments for services
over $100,000 more closely match the cost of the service, for CY 2018
we are proposing to narrow the increments for New Technology APCs 1901-
1906 from $19,999 cost bands to $14,999 cost bands. We also are
proposing to add New Technology APCs 1907 and 1908 (New Technology
Level 52 ($145,001-$160,000), which would allow for an appropriate
payment of retinal prosthesis implantation procedures, which is
discussed in later in this section. Table 17 below includes the
complete list of the proposed modified and additional New Technology
APC groups for CY 2018.
Table 17--Proposed CY 2018 Additional New Technology APC Groups
----------------------------------------------------------------------------------------------------------------
Proposed CY 2018 APC Proposed CY 2018 APC Title Proposed CY 2018 SI Updated or new APC
----------------------------------------------------------------------------------------------------------------
1901............................... New Technology--Level 49 S Updated.
($100,001-$115,000).
1902............................... New Technology--Level 49 T Updated.
($100,001-$115,000).
1903............................... New Technology--Level 50 S Updated.
($115,001-$130,000).
1904............................... New Technology--Level 50 T Updated.
($115,001-$130,000).
1905............................... New Technology--Level 51 S Updated.
($130,001-$145,000).
1906............................... New Technology--Level 51 T Updated.
($130,001-$145,000).
1907............................... New Technology--Level 52 S New.
($145,001-$160,000).
1908............................... New Technology--Level 52 T New.
($145,001-$160,000).
----------------------------------------------------------------------------------------------------------------
The proposed payment rates for New Technology APCs 1901 through
1908 can be found in Addendum A to this proposed rule (which is
available via the Internet on the CMS Web site).
3. Proposed Procedures Assigned to New Technology APC Groups for CY
2018
a. Overall Proposal
As we explained in the CY 2002 OPPS final rule with comment period
(66 FR 59902), we generally retain a procedure in the New Technology
APC to which it is initially assigned until we have obtained sufficient
claims data to justify reassignment of the procedure to a clinically
appropriate APC.
In addition, in cases where we find that our initial New Technology
APC assignment was based on inaccurate or inadequate information
(although it was the best information available at the time), where we
obtain new information that was not available at the time of our
initial New Technology APC assignment, or where the New Technology APCs
are restructured, we may, based on more recent resource utilization
information (including claims data) or the availability of refined New
Technology APC cost bands, reassign the procedure or service to a
different New Technology APC that more appropriately reflects its cost
(66 FR 59903).
Consistent with our current policy, for CY 2018, in this CY 2018
OPPS/ASC proposed rule, we are proposing to retain services within New
Technology APC groups until we obtain sufficient claims data to justify
reassignment of the service to a clinically appropriate APC. The
flexibility associated with this policy allows us to reassign a service
from a New Technology APC in less than 2 years if sufficient claims
data are available. It also allows us to retain a service in a New
Technology APC for more than 2 years if sufficient claims data upon
which to base a decision for reassignment have not been obtained (66 FR
59902).
[[Page 33607]]
b. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APCs
1537, 5114, and 5414)
Currently, there are four CPT/HCPCS codes that describe magnetic
resonance image guided high intensity focused ultrasound (MRgFUS)
procedures, three of which we are proposing to continue to assign to
standard APCs and one of which we are proposing to continue to assign
to a New Technology APC. These codes include CPT codes 0071T, 0072T,
and 0398T, and HCPCS code C9734. CPT codes 0071T and 0072T are used for
the treatment of uterine fibroids, CPT code 0398T is used for the
treatment of essential tremor, and HCPCS code C9734 is used for pain
palliation for metastatic bone cancer.
As shown in Table 18 below, and as listed in Addendum B of this CY
2018 OPPS/ASC proposed rule, we are proposing to continue to assign CPT
codes 0071T and 0072T to APC 5414 (Level 4 Gynecologic Procedures),
with a proposed payment rate of approximately $2,189 for CY 2018. We
also are proposing to continue to assign the APC to status indicator
``J1'' (Hospital Part B services paid through a comprehensive APC) to
indicate that all covered Part B services on the claim are packaged
with the payment for the primary ``J1'' service for the claim, except
for services assigned to OPPS status indicator ``F'', ``G'', ``H'',
``L'', and ``U''; ambulance services; diagnostic and screening
mammography; all preventive services; and certain Part B inpatient
services. In addition, we are proposing to continue to assign HCPCS
code C9734 to APC 5114 (Level 4 Musculoskeletal Procedures), with a
proposed payment rate of approximately $5,385 for CY 2018. We also are
proposing to continue to assign HCPCS code C9734 to status indicator as
``J1''.
Further, we are proposing to continue to assign CPT code 0398T to
APC 1537 (New Technology--Level 37 ($9501-$10000)), with a proposed
payment rate of approximately $9,751 for CY 2018. We have only received
one claim for CPT code 0398T, and, based on this limited information,
are not proposing to assign this MRgFUS procedure to a standard APC. We
refer readers to Addendum B of this proposed rule for the proposed
payment rates for all codes reportable under the OPPS. Addendum B is
available via the Internet on the CMS Web site.
Table 18--Proposed CY 2018 Status Indicator (SI), APC Assignments, and Payment Rates for the Magnetic Resonance Image Guided High Intensity Focused
Ultrasound (MRgFUS) Procedures
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY
CPT/HCPCS Code Long descriptor CY 2017 OPPS CY 2017 OPPS CY 2017 OPPS Proposed CY Proposed CY 2018 OPPS
SI APC payment rate 2018 OPPS SI 2018 OPPS APC payment rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
0071T............................ Focused ultrasound J1 5414 $2,084.59 J1 5414 $2,188.97
ablation of uterine
leiomyomata, including
mr guidance; total
leiomyomata volume less
than 200 cc of tissue.
0072T............................ Focused ultrasound J1 5414 2,084.59 J1 5414 2,188.97
ablation of uterine
leiomyomata, including
mr guidance; total
leiomyomata volume
greater or equal to 200
cc of tissue.
0398T............................ Magnetic resonance image S 1537 9,750.50 S 1537 9,750.50
guided high intensity
focused ultrasound
(mrgfus), stereotactic
ablation lesion,
intracranial for
movement disorder
including stereotactic
navigation and frame
placement when performed.
C9734............................ Focused ultrasound J1 5114 5,219.36 J1 5114 5,385.23
ablation/therapeutic
intervention, other than
uterine leiomyomata,
with magnetic resonance
(mr) guidance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
c. Retinal Prosthesis Implant Procedure
CPT code 0100T (Placement of a subconjunctival retinal prosthesis
receiver and pulse generator, and implantation of intra-ocular retinal
electrode array, with vitrectomy) describes the implantation of a
retinal prosthesis, specifically, a procedure involving the use of the
Argus[supreg] II Retinal Prosthesis System. This first retinal
prosthesis was approved by the FDA in 2013 for adult patients diagnosed
with advanced retinitis pigmentosa. Pass-through payment status was
granted for the Argus[supreg] II device under HCPCS code C1841 (Retinal
prosthesis, includes all internal and external components) beginning
October 1, 2013, and this status expired on December 31, 2015. We note
that after pass-through payment status expires for a medical device,
the payment for the device is packaged into the payment for the
associated surgical procedure. Consequently, for CY 2016, the device
described by HCPCS code C1841 was assigned to OPPS status indicator
``N'' to indicate that payment for the device is packaged and included
in the payment rate for the surgical procedure described by CPT code
0100T. For CY 2016, CPT code 0100T was assigned to new technology APC
1599 with a payment rate of $95,000, which was the highest paying New
Technology APC for that year. This payment includes both the surgical
procedure (CPT code 0100T) and the use of the Argus[supreg] II device
(HCPCS code C1841). However, stakeholders (including the device
manufacturer and hospitals) believed that the CY 2016 payment rate for
the procedure involving the Argus[supreg] II System was insufficient to
cover the hospital cost of performing the procedure, which includes the
cost of the retinal prosthesis which has a retail price of
approximately $145,000.
[[Page 33608]]
For CY 2017, analysis of the CY 2015 OPPS claims data used for the
CY 2017 final rule with comment showed 9 single claims (out of 13 total
claims) for CPT code 0100T, with a geometric mean cost of approximately
$142,003 based on claims submitted between January 1, 2015, through
December 31, 2015, and processed through June 30, 2016. Based on the CY
2015 OPPS claims data available for the final rule and our
understanding of the Argus[supreg] II procedure, we reassigned CPT code
0100T from new technology APC 1599 to new technology APC 1906 with a
final payment rate of $150,000.50 for CY 2017. We noted that this
payment rate includes the cost of both the surgical procedure (CPT code
0100T) and the retinal prosthesis device (HCPCS code C1841).
For the CY 2018 update, analysis of the CY 2016 OPPS claims data
used for the CY 2018 proposed rule showed 3 single claims (out of 3
total claims) for CPT code 0100T, with a geometric mean cost of
approximately $116,239 based on the claims submitted between January 1,
2016 through December 31, 2016, and processed through December 31,
2016. For the CY 2018 OPPS/ASC final rule with comment period, the
final payment rate will be based on claims submitted between January 1,
2016 and December 31, 2016, and processed through June 30, 2017.
Based on the CY 2016 OPPS claims data available, which show a
geometric mean cost of approximately $116,239, we are proposing to
assign the Argus[supreg] II procedure to a New Technology APC with a
payment band that covers the geometric mean of the procedure.
Therefore, we are proposing to assign CPT code 0100T to APC 1904 (New
Technology--Level 50 $115,001-$130,000)), with a proposed payment of
$122,000.50 for CY 2018. We are inviting public comments on this
proposal.
d. Pathogen Test for Platelets
The CMS HCPCS Workgroup has established HCPCS code Q9987
(Pathogen(s) test for platelets) effective July 1, 2017. HCPCS code
Q9987 will be used to report any test used to identify bacterial or
other pathogen contamination in blood platelets. Currently, there is
one test approved by the FDA that is described by HCPCS code Q9987. The
test is a rapid bacterial test and the manufacturer estimates the cost
of the test to be between $26 and $35. HCPCS code Q9987 was established
after concerns from blood and blood product stakeholders that the
previous CPT code used to describe pathogen tests for platelets, CPT
code P9072 (Platelets, pheresis, pathogen reduced or rapid bacterial
tested, each unit), inappropriately described rapid bacterial testing
by combining the test with the pathogen reduction of platelets. CPT
code P9072 is inactive effective July 1, 2017.
We are seeking more information on the actual costs of pathogen
tests for platelets before assigning HCPCS code Q9987 to a clinical
APC. Effective July 1, 2017, HCPCS code Q9987 is assigned to New
Technology APC 1493 (New Technology--Level 1C ($21-$30)), with a
payment rate of $25.50. We are proposing to continue to assign HCPCS
code Q9987 to New Technology APC 1493, with a proposed payment rate of
$25.50, until such time as claims data are available to support
assignment to a clinical APC. We are inviting public comments on this
proposal.
D. Proposed OPPS APC-Specific Policies
1. Blood-Derived Hematopoietic Cell Harvesting
HCPCS code 38205 describes blood-derived hematopoietic progenitor
cell harvesting for transplantation, per collection; allogeneic. This
code represents a donor acquisition cost for an allogeneic
hematopoietic stem cell transplant (HSCT). In the CY 2010 OPPS/ASC
final rule with comment period (74 FR 60575), we assigned this code to
status indicator ``B'', which indicates that this code is not
recognized by the OPPS when submitted on an outpatient hospital Part B
bill (type 12x and 13x).
In CY 2017, we finalized a comprehensive APC (C-APC) for HSCT (81
FR 79586 through 79587). Payment for donor acquisition services for
HSCT is included in the C-APC payment for the allogeneic stem cell
transplant when the transplant occurs in the hospital outpatient
setting. All donor acquisition costs, including the costs for HCPCS
code 38205, should be reported on the same date of service as the
transplant procedure (HCPCS code 38240 (Hematopoietic progenitor (HPC);
allogeneic transplantation per donor)) in order to be appropriately
packaged for payment purposes. Hospitals are instructed to identify
services required to acquire stem cells from a donor for allogeneic
HSCT separately in Field 42 on Form CMS-1450 (or UB-04), with revenue
code 0815 when an allogeneic stem cell transplant occurs. (We refer
readers to the Medicare Claims Processing Manual (Pub. L. 100-04),
Chapter 4, Section 231.11 and Chapter 3, Section 90.3.1.)
There other donor acquisition costs, namely those costs for the
procedure described by HCPCS code 38230 (Bone marrow harvesting for
transplantation; allogeneic), which are assigned to status indicator
``S''. For consistency and to ensure that the donor acquisition costs
are captured accurately, for CY 2018, we are proposing to change the
status indicator assignment for the procedure described by HCPCS code
38205 from ``B'' to ``S'', which indicates that the procedure is paid
under the OPPS and receives separate payment.
Our latest claims data used for this proposed rule, which include
claims submitted between January 1, 2016, and December 31, 2016, and
processed on or before December 31, 2016, show a geometric mean cost of
approximately $580 for HCPCS code 38205 based on 2 single claims (out
of 8 total claims). The procedure described by HCPCS code 38205 has
resource and clinical similarities to procedures assigned to APC 5242
(Level 2 Blood Product Exchange and Related Services). Therefore, we
are proposing to assign HCPCS code 38205 to APC 5242. We are inviting
public comments on these proposals.
2. Radiology and Imaging Procedures and Services
a. Imaging APCs
Section 1833(t)(9)(A) of the Act requires the Secretary to review
not less often than annually, and revise the APC group assignments,
relative payment weights, and the wage and other adjustments to take
into account changes in medical practice, changes in technology, the
addition of new services, new cost data, and other relevant information
and factors. In addition, section 1833(t)(2)(G) of the Act requires the
Secretary to create additional groups of covered OPD services that
classify separately those procedures that utilize contrast agents from
those procedures that do not.
In CY 2016, as a part of our comprehensive review of the structure
of the APCs and procedure code assignments, we restructured the APCs
that contain imaging services (80 FR 70392). The purpose of this
restructuring was to more appropriately reflect the resource costs and
clinical characteristics of the services classified within the imaging
APCs. The restructuring of the imaging APCs resulted in broader
groupings that removed the excessive granularity of grouping imaging
services according to organ or physiologic system, which did not
necessarily reflect either significant differences in resources or how
these services are delivered in the hospital outpatient setting. In CY
2017, in
[[Page 33609]]
response to public comments on the CY 2017 OPPS/ASC proposed rule, we
further consolidated the imaging APCs from 17 APCs in CY 2016 to 7 APCs
in CY 2017 (81 FR 79633). These included four imaging APCs without
contrast and three imaging APCs with contrast.
For this CY 2018 proposed rule, we reviewed the services assigned
to the imaging without contrast APCs and imaging with contrast APCs.
Specifically, we evaluated the resource costs and clinical coherence of
the procedures associated with the four levels of imaging without
contrast APCs and the three levels of imaging with contrast APCs as
well as identified and corrected any 2 times rule violations as
discussed in section III.B.2. of this CY 2018 OPPS/ASC proposed rule.
In addition, we reviewed and considered stakeholder recommendations to
make additional refinements to the structure of the APC groupings of
the imaging procedures classified within the imaging APCs that would
maintain clinical homogeneity while more appropriately addressing
resource cost fluctuation and volatility. As a result of our analysis
and review of the claims data used for CY 2018 ratesetting, we believe
a Level 5 Imaging without Contrast APC is needed to more appropriately
group certain imaging services with higher resource costs.
Specifically, we believe the data support splitting the current Level 4
Imaging without Contrast APC into two APCs such that the Level 4
Imaging without Contrast APC would include high frequency low cost
services and the proposed Level 5 Imaging without Contrast APC would
include low frequency high cost services. Therefore, for CY 2018, we
are proposing to add a fifth level within the Imaging without Contrast
APCs. Below in Table 19, we list the CY 2017 imaging APCs, and in Table
20, we list the proposed CY 2018 imaging APCs with the addition of a
fifth level within the Imaging without Contrast APCs. The specific APC
assignments for each service grouping are listed in Addendum B to the
proposed rule, which is available via the Internet on the CMS Web site.
This proposal would increase the imaging APCs from 7 APCs in CY 2017 to
8 in CY 2018. The specific APC assignments for each imaging service
HCPCS code are listed in Addendum B to this proposed rule, which is
available via the Internet on the CMS Web site. We note that some of
the imaging procedures are assigned to APCs that are not listed in the
tables below (for example, the vascular procedures APCs). Also, the
nuclear medicine services APCs are not included in this proposal. These
imaging services are not included in this proposal because we are not
proposing changes to their APC structure.
We are inviting public comments on our proposal to add a Level 5
Imaging without Contrast APC in CY 2018.
Table 19--CY 2017 Imaging APCs
------------------------------------------------------------------------
CY 2017 APC CY 2017 APC Group Title
------------------------------------------------------------------------
5521............................. Level 1 Imaging without Contrast.
5522............................. Level 2 Imaging without Contrast.
5523............................. Level 3 Imaging without Contrast.
5524............................. Level 4 Imaging without Contrast.
5571............................. Level 1 Imaging with Contrast.
5572............................. Level 2 Imaging with Contrast.
5573............................. Level 3 Imaging with Contrast.
------------------------------------------------------------------------
Table 20--Proposed CY 2018 Imaging APCs
------------------------------------------------------------------------
Proposed CY 2017 APC Proposed CY 2017 APC Group Title
------------------------------------------------------------------------
5521.............................. Level 1 Imaging without Contrast.
5522.............................. Level 2 Imaging without Contrast.
5523.............................. Level 3 Imaging without Contrast.
5524.............................. Level 4 Imaging without Contrast.
5525.............................. Level 5 Imaging without Contrast.
5571.............................. Level 1 Imaging with Contrast.
5572.............................. Level 2 Imaging with Contrast.
5573.............................. Level 3 Imaging with Contrast.
------------------------------------------------------------------------
b. Non-Ophthalmic Fluorescent Vascular Angiography (APC 5524)
For the CY 2018 OPPS update, we are proposing to reassign HCPCS
code C9733 (Non-ophthalmic fluorescent vascular angiography) from APC
5523 (Level 3 Imaging without Contrast) to APC 5524 (Level 4 Imaging
without Contrast) based on the latest claims data available for this
proposed rule. We are proposing to maintain the status indicator
assignment of ``Q2'' (T-packaged) to indicate that the service is
conditionally packaged when performed in conjunction with other
procedures on the same day but paid separately when performed as a
stand-alone service.
Our latest claims data used for this proposed rule, which include
claims submitted between January 1, 2016, and December 31, 2016, and
processed on or before December 31, 2016, show a geometric mean cost of
approximately $236 for HCPCS code C9733 based on 216 single claims (out
of 953 total claims), which is closely aligned with the geometric mean
cost of approximately $275 for APC 5524. Because HCPCS code C9733 is an
imaging service which is similar to the codes assigned to APC 5524, we
are proposing to reassign HCPCS code C9733 from APC 5523 to APC 5524.
We believe this proposed reassignment would improve the clinical
homogeneity of APC 5524 and appropriately align the resource costs of
HCPCS code C9733 to the resource costs of those procedures assigned to
APC 5524.
As we have stated in previous OPPS/ASC final rules, specifically,
in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68345
through 68346), CY 2014 OPPS/ASC final rule with comment period (78 FR
74976 through 74977), and the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79632), the service described by HCPCS code C9733 is
primarily an intraoperative imaging service that is performed in
combination with a number of primary procedures, including facial
reconstruction and reanimation, muscle flaps, trauma reconstruction,
digital and limb reattachment, and breast reconstruction. Therefore,
HCPCS code C9733 is conditionally packaged under Sec. 419.2(b)(14),
which contains the policies governing packaging of intraoperative items
and services. Consequently, we are proposing to maintain the status
indicator assignment of ``Q2'' to indicate that the payment for the
service will be packaged in the APC payment if billed on the same date
of service as a HCPCS code assigned to status indicator ``T'', but in
all other circumstances, a separate APC payment for the service will be
made. We believe that the OPPS payments, separate or packaged, for
surgical procedures with which this service is performed are more than
adequate to cover the cost of the service described by HCPCS code C9733
for Medicare beneficiaries in need of this service.
In summary, for the CY 2018 OPPS update, we are proposing to
reassign HCPCS code C9733 to APC 5524 based on the latest claims data
used for this proposed rule. In addition, we are proposing to maintain
its status indicator assignment of ``Q2'' to indicate that the service
is conditionally packaged. The proposed CY 2018 OPPS payment rate for
HCPCS C9733 can be found in OPPS Addendum B to this proposed rule,
which is available via the Internet on the CMS Web site.
3. Comment Solicitation on Intraocular Procedure APCs
As part of our CY 2018 comprehensive review of the structure of the
APCs and procedure code assignments, we evaluated the intraocular
procedure APCs with a particular focus on C-APC 5491 (Level 1
Intraocular Procedures) that contains
[[Page 33610]]
cataract surgery procedures. We strive to maintain APCs that contain
procedures that are relatively homogenous in resource costs and
clinical characteristics. While it is impracticable and contrary to the
principles of a prospective payment system to assign each procedure to
its own APC, thus resulting in a cost-based, fee schedule payment
system, we seek to ensure our clinical groupings appropriately group
like items and services while maintaining the integrity of a
prospective payment system under which bundled, encounter-based
payments are essential.
For CY 2018, we considered proposing a new intraocular procedure
APC that would further distinguish the resource costs and clinical
characteristics between cataract surgery and complex cataract surgery.
As listed in Addendum B of this CY 2018 OPPS/ASC proposed rule, we are
proposing to continue to assign CPT code 66984 (Cataract surgery with
IOL 1 stage procedure) and CPT code 66982 (Cataract surgery complex) to
C-APC 5491. However, because the 2017 AMA CPT Code manual describes a
complex cataract surgery case as ``requiring devices or techniques not
generally used in routine cataract surgery (e.g., iris expansion
device, suture support for intraocular lens, or primary posterior
capsulorrhexis),'' we believe it may be more appropriate to assign CPT
code 66982 to a C-APC that is separate from the C-APC assignment for
CPT code 66984. However, because this potential APC grouping would
assign CPT code 66982 to a higher paying C-APC than CPT code 66984, we
would monitor claims data for changes in the distribution of coding
complex cataract surgery and routine cataract surgery if we were to
adopt this change. We are seeking public comments from stakeholders,
including ophthalmologists, organizations representing
ophthalmologists, beneficiaries, hospitals, and all other interested
parties on whether we should create a new C-APC that includes complex
cataract surgeries identified by CPT code 66982 (along with other
intraocular procedures that are similar in resources) in a newly
created C-APC that is separate from those identified by CPT code 66984.
That is, we are considering whether to establish a new Level 2
Intraocular Procedures C-APC in between existing C-APCs 5491 and 5492.
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payments for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
Under section 1833(t)(6)(B)(iii) of the Act, the period for which a
device category eligible for transitional pass-through payments under
the OPPS can be in effect is at least 2 years but not more than 3
years. Prior to CY 2017, our regulation at 42 CFR 419.66(g) provided
that this pass-through payment eligibility period began on the date CMS
established a particular transitional pass-through category of devices,
and we based the pass-through status expiration date for a device
category on the date on which pass-through payment was effective for
the category. In the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79654), in accordance with section 1833(t)(6)(B)(iii)(II) of the
Act, we amended Sec. 419.66(g) to provide that the pass-through
eligibility period for a device category begins on the first date on
which pass-through payment is made under the OPPS for any medical
device described by such category.
In addition, prior to CY 2017, our policy was to propose and
finalize the dates for expiration of pass-through status for device
categories as part of the OPPS annual update. This means that device
pass-through status would expire at the end of a calendar year when at
least 2 years of pass-through payments has been made, regardless of the
quarter in which the device was approved. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79655), we changed our policy to allow
for quarterly expiration of pass-through payment status for devices,
beginning with pass-through devices approved in CY 2017 and subsequent
calendar years, to afford a pass-through payment period that is as
close to a full 3 years as possible for all pass-through payment
devices. We refer readers to the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79648 through 79661) for a full discussion of the
changes to the device pass-through payment policy. We also have an
established policy to package the costs of the devices that are no
longer eligible for pass-through payments into the costs of the
procedures with which the devices are reported in the claims data used
to set the payment rates (67 FR 66763).
b. Expiration of Transitional Pass-Through Payments for Certain Devices
As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires
that, under the OPPS, a category of devices be eligible for
transitional pass-through payments for at least 2 years, but not more
than 3 years. There currently are three device categories eligible for
pass-through payment: (1) HCPCS code C2623 (Catheter, transluminal
angioplasty, drug-coated, non-laser), which was established effective
April 1, 2015; (2) HCPCS code C2613 (Lung biopsy plug with delivery
system), which was established effective July 1, 2015; and (3) HCPCS
code C1822 (Generator, neurostimulator (implantable), high frequency,
with rechargeable battery and charging system), which was established
effective January 1, 2016. The pass-through payment status of the
device categories for HCPCS codes C2623, C2613, and C1822 will end on
December 31, 2017. We note that our new policy adopted in the CY 2017
OPPS/ASC final rule with comment period to allow for quarterly
expiration of pass-through payment status for devices applies to
devices approved in CY 2017 and subsequent years. As all the devices in
these three device categories were approved prior to CY 2017, we are
applying our policy to expire them at the end of the calendar year when
at least 2 years of pass-through payments have been made. Therefore, we
are proposing, beginning in CY 2018, to package the costs of each of
the devices described by HCPCS codes C2623, C2613, and C1822 into the
costs related to the procedure with which each device is reported in
the hospital claims data.
2. New Device Pass-through Applications
a. Background
Section 1833(t)(6) of the Act provides for pass-through payments
for devices, and section 1833(t)(6)(B) of the Act requires CMS to use
categories in determining the eligibility of devices for pass-through
payments. As part of implementing the statute through regulations, we
have continued to believe that it is important for hospitals to receive
pass-through payments for devices that offer substantial clinical
improvement in the treatment of Medicare beneficiaries to facilitate
access by beneficiaries to the advantages of the new technology.
Conversely, we have noted that the need for additional payments for
devices that offer little or no clinical improvement over previously
existing devices is less apparent. In such cases, these devices
[[Page 33611]]
can still be used by hospitals, and hospitals will be paid for them
through appropriate APC payment. Moreover, a goal is to target pass-
through payments for those devices where cost considerations might be
most likely to interfere with patient access (66 FR 55852; 67 FR 66782;
and 70 FR 68629).
As specified in regulations at 42 CFR 419.66(b)(1) through (b)(3),
to be eligible for transitional pass-through payment under the OPPS, a
device must meet the following criteria: (1) If required by FDA, the
device must have received FDA approval or clearance (except for a
device that has received an FDA investigational device exemption (IDE)
and has been classified as a Category B device by the FDA), or another
appropriate FDA exemption; and the pass-through payment application
must be submitted within 3 years from the date of the initial FDA
approval or clearance, if required, unless there is a documented,
verifiable delay in U.S. market availability after FDA approval or
clearance is granted, in which case CMS will consider the pass-through
payment application if it is submitted within 3 years from the date of
market availability; (2) the device is determined to be reasonable and
necessary for the diagnosis or treatment of an illness or injury or to
improve the functioning of a malformed body part, as required by
section 1862(a)(1)(A) of the Act; and (3) the device is an integral
part of the service furnished, is used for one patient only, comes in
contact with human tissue, and is surgically implanted or inserted
(either permanently or temporarily), or applied in or on a wound or
other skin lesion. In addition, according to Sec. 419.66(b)(4), a
device is not eligible to be considered for device pass-through payment
if it is any of the following: (1) Equipment, an instrument, apparatus,
implement, or item of this type for which depreciation and financing
expenses are recovered as depreciation assets as defined in Chapter 1
of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a
material or supply furnished incident to a service (for example, a
suture, customized surgical kit, or clip, other than a radiological
site marker).
Separately, we use the following criteria, as set forth under Sec.
419.66(c), to determine whether a new category of pass-through payment
devices should be established. The device to be included in the new
category must--
Not be appropriately described by an existing category or
by any category previously in effect established for transitional pass-
through payments, and was not being paid for as an outpatient service
as of December 31, 1996;
Have an average cost that is not ``insignificant''
relative to the payment amount for the procedure or service with which
the device is associated as determined under Sec. 419.66(d) by
demonstrating: (1) The estimated average reasonable costs of devices in
the category exceeds 25 percent of the applicable APC payment amount
for the service related to the category of devices; (2) the estimated
average reasonable cost of the devices in the category exceeds the cost
of the device-related portion of the APC payment amount for the related
service by at least 25 percent; and (3) the difference between the
estimated average reasonable cost of the devices in the category and
the portion of the APC payment amount for the device exceeds 10 percent
of the APC payment amount for the related service (with the exception
of brachytherapy and temperature-monitored cryoblation, which are
exempt from the cost requirements as specified at Sec. Sec.
419.66(c)(3) and (e)); and
Demonstrate a substantial clinical improvement, that is,
substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment.
Beginning in CY 2016, we changed our device pass-through evaluation
and determination process. Device pass-through applications are still
submitted to CMS through the quarterly subregulatory process, but the
applications will be subject to notice-and-comment rulemaking in the
next applicable OPPS annual rulemaking cycle. Under this process, all
applications that are preliminarily approved upon quarterly review will
automatically be included in the next applicable OPPS annual rulemaking
cycle, while submitters of applications that are not approved upon
quarterly review will have the option of being included in the next
applicable OPPS annual rulemaking cycle or withdrawing their
application from consideration. Under this notice-and-comment process,
applicants may submit new evidence, such as clinical trial results
published in a peer-reviewed journal or other materials for
consideration during the public comment process for the proposed rule.
This process allows those applications that we are able to determine
meet all the criteria for device pass-through payment under the
quarterly review process to receive timely pass-through payment status,
while still allowing for a transparent, public review process for all
applications (80 FR 70417 through 70418).
More details on the requirements for device pass-through payment
applications are included on the CMS Web site in the application form
itself at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section. In addition, CMS is amenable to meeting with
applicants or potential applicants to discuss research trial design in
advance of any device pass-through application or to discuss
application criteria, including the substantial clinical improvement
criterion.
b. Applications Received for Device Pass-Through Payment for CY 2018
We received five applications by the March 1, 2017 quarterly
deadline, which was the last quarterly deadline for applications to be
received in time to be included for this CY 2018 OPPS/ASC proposed
rule. All applications were received in the second quarter of 2016.
None of the five applications were approved for device pass-through
payment during the quarterly review process.
Applications received for the later deadlines for the remaining
2017 quarters (June 1, September 1, and December 1), if any, will be
presented in the CY 2019 OPPS/ASC proposed rule. We note that the
quarterly application process and requirements have not changed in
light of the addition of rulemaking review. Detailed instructions on
submission of a quarterly device pass-through payment application are
included on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf. A
discussion of the five applications received by the March 1, 2017
deadline is presented below.
(1) Architect[supreg] Px
Harbor MedTech, Inc. submitted an application for a new device
category for transitional pass-through payment status for
Architect[supreg] Px. Architect[supreg] Px is a collagen biomatrix
comprised of a stabilized extracellular matrix derived from equine
pericardium. The equine pericardium is stabilized to become a catalyst
and scaffold for use by autologous tissue regeneration factors.
Architect[supreg] Px is packaged as an individual unit in sizes ranging
from 2cm x 2cm up to 10cm x 15cm and is approximately 0.75mm thick.
Architect[supreg] Px typically requires only one application. The
applicant asserted
[[Page 33612]]
that it is clinically superior to other skin substitutes that work by
flooding the wound with nonautologous collagen and growth factors
because Architect[supreg] Px attracts and concentrates the patient's
own autologous collagen and growth factors to support healing.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant received FDA clearance for Architect[supreg] Px on September
12, 2014, and its June 1, 2016 application was submitted within 3 years
of FDA clearance. However, Unite BioMatrix, cleared by the FDA on June
20, 2007, is claimed as a predicate of Architect[supreg] Px. The
Architect[supreg] Px application states that ``. . .while packaged
differently, Architect[supreg] Px and Unite BioMatrix are identical . .
. they are both stabilized equine pericardium manufactured using the
same processes . . .'' If the date for FDA clearance for Unite
BioMatrix is used to evaluate the newness criterion, Architect[supreg]
Px may not meet the newness criterion. We are inviting public comments
on this issue.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant Architect[supreg] Px is a skin substitute
product that is integral to the service provided, is used for one
patient only, comes in contact with human skin, and is surgically
inserted into the patient. The applicant also claims Architect[supreg]
Px meets the device eligibility requirements of Sec. 419.66(b)(4)
because Architect[supreg] Px is not an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and it is not a supply or material.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through category that describes
Architect[supreg] Px. Harbor MedTech, Inc. proposes a new device
category descriptor of ``Stabilized Skin Substitute for Autologous
Tissue Regeneration'' for Architect[supreg] Px. We are inviting public
comments on this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will substantially improve the
diagnosis or treatment of an illness or injury or improve the
functioning of a malformed body part compared to the benefits of a
device or devices in a previously established category or other
available treatment. With regard to the substantial clinical
improvement criterion, the applicant only identifies two references,
neither of which we believe provide evidence of substantial clinical
improvement. One reference is a 2012 summary report \1\ of skin
substitute products that can be used to treat chronic wounds that only
describes characteristics of the predecessor product to
Architect[supreg] Px with no efficacy or performance information. The
second reference \2\ is a small observational study of 34 subjects with
no comparison group. We are inviting public comments on whether
Architect[supreg] Px meets the substantial clinical improvement
criterion.
---------------------------------------------------------------------------
\1\ Snyder, D.L. et al. Skin Substitutes for Treating Chronic
Wounds. Technology Assessment Report. Project ID: HCPR0610. AHRQ.
December 18, 2012.
\2\ Alexander JH, Yeager DA, et al. Equine Pericardium as a
Biological Covering for the Treatment of Diabetic Foot Wounds; a
Prospective Study. J Am Podiatric Assoc., 2012 Sep-Oct.:102 (5):
352-358.
---------------------------------------------------------------------------
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. Architect[supreg] Px would be reported with
CPT codes 15271 through 15278, which cover the application of skin
substitute grafts to different areas of the body for high-cost skin
substitutes. To meet the cost criterion for device pass-through
payment, a device must pass all three tests of the cost criterion for
at least one APC. CPT codes 15271 through 15278 are assigned to either
APC 5054 (Level 4 Skin Procedures), with a CY 2016 payment rate of
$1,411.21 and a device offset of $4.52, or APC 5055 (Level 5 Skin
Procedures), with a CY 2016 payment rate of $2,137.49 and a device
offset of $25.44. According to the applicant, the cost of the
substitute graft procedures when performed with Architect[supreg] Px is
$5,495.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $5,495 for Architect[supreg] Px exceeds the
applicable APC amount for the service related to the category of
devices of $1,411.21 by 389 percent ($5,495/$1,411.21 x 100 percent =
389 percent). Therefore, it appears that Architect[supreg] Px meets the
first cost significance test.
The second cost significance test, at Sec. 419.66(d)(2), provides
that the estimated average reasonable cost of the devices in the
category must exceed the cost of the device-related portion of the APC
payment amount for the related service by at least 25 percent, which
means the device cost needs to be at least 125 percent of the offset
amount (the device-related portion of the APC found on the offset
list). The estimated average reasonable cost of $5,495 for
Architect[supreg] Px exceeds the device-related portion of the APC
payment amount for the related service of $4.52 by 121,571 percent
($5,495/$4.52 x 100 percent = 121,571 percent). Therefore, it appears
that Architect[supreg] Px meets the second cost significance test.
Section 419.66(d)(3), the third cost significance test, requires
that the difference between the estimated average reasonable cost of
the devices in the category and the portion of the APC payment amount
for the device must exceed 10 percent of the APC payment amount for the
related service. The difference between the estimated average
reasonable cost of $5,495 for Architect[supreg] Px and the portion of
the APC payment amount for the device of $4.52 exceeds 10 percent at
389 percent (($5,495 - $4.52)/$1,411.21) x 100 percent = 389 percent).
Therefore, it appears that Architect[supreg] Px meets the third cost
significance test. Based on the costs submitted by the applicant and
the calculations noted earlier, we believe that Architect[supreg] Px
meets the cost criterion at Sec. 419.66(c)(3) for new device
categories.
We are inviting public comments on whether Architect[supreg] Px
meets the device pass-through payment criteria discussed in this
section.
(2) Dermavest and Plurivest Human Placental Connective Tissue Matrix
(HPCTM)
Aedicell, Inc. submitted an application for a new device category
for transitional pass-through payment status for Dermavest and
Plurivest human placental connective tissue matrix (HPCTM). Dermavest
and Plurivest HPCTM use tissue sourced from the placental disk, amnion/
chorion, and umbilical cord to replace or supplement damaged tissue.
The applicant stated that Dermavest and Plurivest replace or supplement
damaged or inadequate integumental tissue by providing a scaffold to
entrap migrating cells for repopulation. The applicant stated that the
products may be clinically indicated for the following conditions:
Partial and full thickness
[[Page 33613]]
wounds; pressure ulcers; venous ulcers; chronic vascular ulcers;
diabetic ulcers; trauma wounds (abrasions, lacerations, second degree
burns, and skin tears); drainage wounds; and surgical wounds (donor
sites/grafts post mohs surgery, post laser surgery, and podiatric).
Dermavest and Plurivest HPCTM are applied to the area of inadequate or
damaged tissue, moistened if necessary and covered with a nonadherent
secondary dressing. While the application does not distinguish between
the Dermavest and Plurivest products, the AediCell Inc. Web site states
that the two products differ by dosage. According to information on the
Web site at www.aedicell.com, each product contains different tissue
cell attachment proteins (CAP) and cytokine/growth factors (GF)
profiles. There is a lower cytokine/GF concentration profile in
Plurivest and a higher concentration of CAP and cytokine/GF in
Dermavest.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant indicated that the product conforms to the FDA regulatory
path under section 361 of the Public Health Service (PHS) Act and 21
CFR part 1271 for Human Cells, Tissues, and Cellular and Tissue-Based
Products (HCT/Ps). Under this regulatory path, FDA requires the
manufacturer to register and list its HCT/Ps with the Center for
Biologics Evaluation and Research (CBER) within 5 days after beginning
operations and to update their registrations annually. AediCell Inc.
has an FDA field establishment identifier (FEI) under the HHS-FDA-
Establishment Registration and Listing for Human Cells, Tissues, and
Cellular and Tissue-Based Products (HCT/Ps) and submitted with its
application the annual registration/listing for Dermavest and Plurivest
dated November 9, 2015. The applicant noted that the initial
registration for the manufacture of Dermavest was submitted to the CBER
on October 28, 2013, and the registration of Plurivest was submitted
the following year on November 14, 2014. The registration forms
including these dates were not included in the application. Therefore,
it is unclear if the newness criterion is met.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, Dermavest and Plurivest are skin substitute
products that are integral to the service provided, are used for one
patient only, come in contact with human skin, and are applied in or on
a wound or other skin lesion. The applicant also claimed Dermavest and
Plurivest meet the device eligibility requirements of Sec.
419.66(b)(4) because they are not instruments, apparatuses, implements,
or items for which depreciation and financing expenses are recovered,
and they are not supplies or materials furnished incident to a service.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment category that describes
Dermavest and Plurivest HPCTM. The applicant proposed a category
descriptor for Dermavest and Pluravest of ``Human placental connective
tissue matrix (HPCTM), comprised of tissue sourced from the placental
disk, amnion/chorion, and umbilical cord for the intention of replacing
or supplementing damaged or inadequate integumental issue.'' We are
inviting public comments on this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will substantially improve the
diagnosis or treatment of an illness or injury or improve the
functioning of a malformed body part compared to the benefits of a
device or devices in a previously established category or other
available treatment. With respect to this criterion, the applicant
provided several background studies showing general evidence that
placental tissue, umbilical cord, and amnion membrane products are
effective in the treatment of various wounds and ulcers. However, these
studies were not specific to Dermavest and Plurivest HPCTM. The
applicant submitted two poster presentations describing case studies
that evaluated the wound healing time and wound characteristics of
patients with diabetic and venous ulcers treated with Dermavest and
Plurivest HPCTM. Both studies were described as case series and, as
such, lacked blinding, randomization, and control groups. The first
poster,\3\ presented in 2015, described a prospective, multi-center
case series with a small number of participants (n = 15). The study
evaluated wound healing time and wound characteristics of patients with
various etiologies. The patients were treated with up to two six cm\2\
pieces of Dermavest per application on wounds up to 44 cm\2\. Results
were presented for diabetic and venous ulcer cases and showed a week 4
percent area reduction (PAR) of 71 percent for diabetic ulcers and 50
percent for venous ulcers. Eighty percent of the diabetic ulcer cases
and 50 percent of the venous ulcer cases had a week 4 PAR of greater
than 40 percent.
---------------------------------------------------------------------------
\3\ Connell et al., Human placental connective tissue matrix in
the treatment of chronic wounds: A prospective multi-center case
series. 2015 at Society of Advanced Wound Healing (SAWC) Spring
meeting.
---------------------------------------------------------------------------
The second poster,\4\ presented in 2016, also described a case
series that evaluated wound healing time and wound characteristics of
patients with various etiologies (n = 8). The poster stated that the
patients were treated with pieces of HPCTM according to manufacturer
guidelines on wounds ranging in size up to 3.8 cm\2\. The methods
presented in the poster do not specify whether the patients were
treated with Dermavest or Plurivest, or both. The results presented in
the poster compile Dermavest data from two case series presented at the
Society for Advanced Wound Care (SAWC) annual meeting. It was unclear
whether there was overlap between the patients used in the 2015 and
2016 case series included in the application. The compiled Dermavest
data were compared to the 4-week PAR results for diabetic and venous
ulcers from two other noncontemporaneous studies evaluating different
skin replacement products. The results showed, at week 4, approximately
80 percent of the Dermavest-treated diabetic ulcer cases had a PAR of
greater than 50 percent in comparison to approximately 60 percent of
cases and approximately 30 percent of cases, respectively, in the
comparison studies using other skin replacement products. The results
also showed that, at week 4, approximately 60 percent of the Dermavest-
treated venous ulcer cases had a PAR of greater than 40 percent in
comparison to approximately 50 percent of cases and approximately 30
percent of cases in the comparison studies treated with other skin
replacement products. There were multiple differences between the
Dermavest studies included in the poster presentations and these two
additional studies presented as comparators, including the number of
patients included in the studies, the number of wounds treated, and the
purpose of the study. Based on the results presented in the poster, the
applicant concluded that HPCTM
[[Page 33614]]
provides an effective alternative to other skin replacement products.
---------------------------------------------------------------------------
\4\ McGuire and Sebag, The use of a new placental acellular
tissue product in the management of chronic wounds: A case series.
2016 at the Society of Advanced Wound Healing (SAWC) Spring meeting.
---------------------------------------------------------------------------
We are concerned that the research provided did not clinically
demonstrate the active ingredients of the product(s) that might
distinguish the product from others, the correct dosing of the
product(s), the amount of durable wound closure with the product(s)
compared to standard of care in studies with rigorous trial design/
implementation, and the amount of durable wound closure with the
product(s) compared to other products in studies with rigorous trial
design/implementation. Based on the evidence submitted with the
application, we are not yet convinced that the Dermavest and Plurivest
HPCTM provide a substantial clinical improvement over other treatments
for wound care. We are inviting public comments on whether the
Dermavest and Plurivest HPCTM meet this criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that Dermavest and
Plurivest HPCTM would be reported with CPT codes 15271, 15272, 15273,
15274, 15275, 15276, 15277, and 15278. CPT codes 15272, 15274, 15276,
and 15278 are add-on codes assigned status indicator ``N'', which means
payment is packaged under the OPPS. CPT codes 15271 and 15275 are
assigned to APC 5054 (Level 4 Skin Procedures), and CPT codes 15273 and
15277 are assigned to APC 5055 (Level 5 Skin Procedures). To meet the
cost criterion for device pass-through payment, a device must pass all
three tests of the cost criterion for at least one APC. For our
calculations, we used APC 5054 (Level 4 Skin Procedures), which had a
CY 2016 payment rate of $1,411 and a device offset amount of $4.52 at
the time the application was received. According to the applicant, the
cost of a sheet of 2x3 cm Dermavest is $550, and the cost of a sheet of
2x3 cm Plurivest is $500.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $550 for Dermavest and Plurivest exceeds 39
percent of the applicable APC payment amount for the service related to
the category of devices of $1,411 ($550/$1,411 x 100 = 39 percent).
Therefore, we believe Dermavest and Plurivest meet the first cost
significance test.
The second cost significance test, at Sec. 419.66(d)(2), provides
that the estimated average reasonable cost of the devices in the
category must exceed the cost of the device-related portion of the APC
payment amount for the related service by at least 25 percent, which
means that the device cost needs to be at least 125 percent of the
offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $550 for
Dermavest and Plurivest exceeds the cost of the device-related portion
of the APC payment amount for the related service of $4.52 by 12,168
percent ($550/$4.52) x 100 = 12,168 percent). Therefore, we believe
that Dermavest and Plurivest meet the second cost significance test.
The third cost significance test, at Sec. 419.66(d)(3), requires
that the difference between the estimated average reasonable cost of
the devices in the category and the portion of the APC payment amount
for the device must exceed 10 percent of the APC payment amount for the
related service. The difference between the estimated average
reasonable cost of $550 for Dermavest and Plurivest and the portion of
the APC payment amount for the device of $4.52 exceeds the APC payment
amount for the related service of $1,411 by 38.6 percent (($550 -
$4.52)/$1,411 x 100 = 38.6 percent). Therefore, we believe that
Dermavest and Plurivest meet the third cost significance test.
We are inviting public comments on whether Dermavest and Plurivest
meet the device pass-through payment criteria discussed in this
section.
(3) Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg]
Applied Biologics, LLC submitted an application for a new device
category for transitional pass-through payment status for
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg].
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg] is an
injectable, human placental amniotic fluid. It is an allograft derived
from human birth tissue recovered from a live, healthy C-section birth.
The allograft is used to augment tissue to bone and tissue to tissue
repairs. The allograft is implanted at the surgical site at the end of
the procedure using a needle and syringe under direct visualization.
The applicant claimed that the product helps drive healing towards
native tissue regeneration and away from scar formation.
Fl[omacr]Graft[supreg] has a standardized potency of 2 million cells.
Fl[omacr]Graft Neogenesis[supreg] has a standardized potency of 1.5
million cells. The applicant indicated that the product may be used
with several surgical procedures, including joint replacement
procedures, traumatic bone and soft tissue injury, meniscal repairs,
meniscal transplantation, articular cartilage restoration, foot and
ankle repairs, and chronic wounds.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant indicated that Fl[omacr]Graft[supreg] and Fl[omacr]graft
Neogenesis[supreg] conform to the FDA regulatory path under section 361
of the PHS Act and 21 CFR part 1271 for Human Cells, Tissues, and
Cellular and Tissue-Based Products (HCT/Ps). Under this regulatory
path, FDA requires the manufacturer to register and list their HCT/Ps
with the Center for Biologics Evaluation and Research (CBER) within 5
days after beginning operations and update their registrations
annually. Applied Biologics, LLC has two FDA field establishment
identifiers (FEI) under the HHS-FDA-Establishment Registration and
Listing for Human Cells, Tissues, and Cellular and Tissue-Based
Products (HCT/Ps). Both registration forms list the product as
``Fl[omacr]Graft[supreg]''. The applicant submitted an initial
registration/listing for one FEI dated June 8, 2015, as well as an
annual registration/listing for a different FEI dated December 1, 2014.
The first date of U.S. sale for Fl[omacr]Graft[supreg] was May 23,
2013. It is not clear when the initial CBER filing occurred for the
Fl[omacr]Graft[supreg] product. Therefore, it is unclear if the newness
criterion for the Fl[omacr]Graft[supreg] product is met.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, Fl[omacr]Graft[supreg] and Fl[omacr]graft
Neogenesis[supreg] are integral to the service provided, are used for
one patient only, come in contact with human skin, and are applied in
or on a wound or other skin lesion. The applicant also claimed
Fl[omacr]Graft[supreg] and Fl[omacr]graft Neogenesis meet the device
eligibility requirements of Sec. 419.66(b)(4) because they are not
instruments, apparatuses, implements, or items for which depreciation
and financing expenses are recovered, and they are not supplies or
materials furnished incident to a service.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing
[[Page 33615]]
pass-through payment device category that describes
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg]. The
application proposed a payment device category for
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg] with a
category descriptor of ``Injectable Amniotic Fluid Allograft''. We are
inviting public comments on this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will substantially improve the
diagnosis or treatment of an illness or injury or improve the
functioning of a malformed body part compared to the benefits of a
device or devices in a previously established category or other
available treatment. With respect to the substantial clinical
improvement criterion, the applicant submitted several peer-reviewed
publications that provided general evidence that amniotic fluid and
amniotic membrane-based products significantly reduce recovery time.
However, these studies did not include the use of the
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg] product. The
applicant did list several studies in the application that involved the
use of the Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg]
product. Of these studies, five unpublished studies were available for
review. The five studies submitted with the application were described
as case studies, case series, or retrospective cohort studies. The
studies lacked random allocation, blinding, and a comparison group. The
first study \5\ described a retrospective cohort study of 30 patients.
The studies showed that 93 percent of the patients (n=14) who received
a Fl[omacr]Graft[supreg] injection, coupled with conservative,
nonsurgical treatment plan to treat their Morton's Nerve entrapment
condition, had their issue resolved compared to 20 percent of patients
(n=3) who did not receive Fl[omacr]Graft[supreg] injection, coupled
with conservative, nonsurgical treatment plan to treat their Morton's
Nerve entrapment condition. A greater percentage of patients who did
not receive a Fl[omacr]Graft[supreg] injection with their conservative
treatment required surgery (80 percent versus 7 percent). Patients who
required surgery had a 95-percent success rate when surgery was coupled
with a Fl[omacr]Graft[supreg] injection.
---------------------------------------------------------------------------
\5\ Bregman, Peter. (2014). Addressing Morton's Nerve Entrapment
Surgically and Non-surgically with FloGraft.
---------------------------------------------------------------------------
The next study \6\ was a retrospective analysis that involved 27
patients who were treated for stalled wounds. The patients had a broad
spectrum of etiologies. Over a 12-month period, the applicant indicated
that 96 percent of wounds that had stalled demonstrated rapid
acceleration towards closure within a 21-day period when treated with
Fl[omacr]Graft[supreg]. The article recommended a randomized controlled
trial (RCT) to confirm the results. The applicant also submitted two
case studies,7 8 each involving one patient, which described
the use of Fl[omacr]Graft[supreg] to treat distal fibula fracture and
tarsal tunnel compression neuropathy. Lastly, the application included
a study \9\ which presented the results from a case study of one
patient as well as a retrospective cohort of 34 patients who received a
Brostr[ouml]m-Evans procedure with the Fl[omacr]Graft[supreg] product.
In general, the studies submitted lacked a clear description of the
outcome variable and study population, and did not include statistical
analysis.
---------------------------------------------------------------------------
\6\ Gottleib, et al. FloGraft Rapidly Moves Stalled Wounds Into
the Proliferative Phase.
\7\ Jacoby, Richard. Case Study 221: Non-surgical Resolution of
Distal Fibula Fracture with Flograft Implant; 82 YO Male.
\8\ Jacoby, Richard. Tarsal Tunnel Compression Neuropathy Case
Study Using Flograft.
\9\ Maling, Scott. A Case Series: A retrospective analysis of 34
patients receiving modified Bronstom-Evans procedure with Flograft
reduce time to full mobility by 52%
---------------------------------------------------------------------------
Based on the evidence submitted, we believe there is insufficient
data to determine whether Fl[omacr]Graft[supreg]/Fl[omacr]graft
Neogenesis[supreg] offers a substantial clinical improvement over other
treatments for wound care. We are inviting public comments on whether
the Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg] meets the
substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated several CPT codes would
be used to report Fl[omacr]Graft[supreg]/Fl[omacr]graft
Neogenesis[supreg], including CPT codes 29826, 29827, 29828, 23473,
23420, 23412, 27605, 27650, 29891, 29888, 29889, 28008, 22551, 22856,
27179, 29861, and 29862. To meet the cost criterion for device pass-
through payment, a device must pass all three tests of the cost
criterion for at least one APC. These CPT codes are assigned to APCs
5121 through 5125 (Level 1 through Level 5 Musculoskeletal Procedures).
For our calculations, we used APC 5121 (Level 1 Musculoskeletal
Procedures), which had a CY 2016 payment rate of $1,455 and a device
offset of $15.86 at the time the application was received. According to
the applicant, the Fl[omacr]Graft[supreg]/Fl[omacr]graft
Neogenesis[supreg] product is available in a variety of vial sizes, the
largest size being 18 cc with a cost of $19,925.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. We used the highest
priced product for this determination. The estimated average reasonable
cost of $19,925 for Fl[omacr]Graft[supreg]/Fl[omacr]graft
Neogenesis[supreg] exceeds the applicable APC payment amount for the
service related to the category of devices of $1,455 by 1,369 percent
($19,925/$1,455 x 100 = 1,369 percent). Therefore, we believe
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg] meets the
first cost significance test.
The second cost significance test, at Sec. 419.66(d)(2), provides
that the estimated average reasonable cost of the devices in the
category must exceed the cost of the device-related portion of the APC
payment amount for the related service by at least 25 percent, which
means that the device cost needs to be at least 125 percent of the
offset amount (the device-related portion of the APC found on the
offset list). The average reasonable cost of $19,925 for
Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg] exceeds the
device-related portion of the APC payment amount of $15,86 by 125,360
percent ($19,925/$15.86) x 100 = 125,630 percent). Therefore, we
believe that Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg]
meets the second cost significance test.
The third cost significance test, at Sec. 419.66(d)(3), requires
that the difference between the estimated average reasonable cost of
the devices in the category and the portion of the APC payment amount
for the device must exceed 10 percent of the APC payment amount for the
related service. The difference between the average reasonable cost of
$19,925 for Fl[omacr]Graft[supreg]/Fl[omacr]graft Neogenesis[supreg]
and the portion of the APC payment amount for the device of $15.86
exceeds the APC payment amount for the related service of $1,455 by
1,368 percent (($19,925 -$15.86)/$1,455 x 100 = 1,368 percent).
Therefore, we believe Fl[omacr]Graft[supreg]/Fl[omacr]graft
Neogenesis[supreg] meets the third cost significance test.
We are inviting public comments on whether Fl[omacr]Graft[supreg]/
Fl[omacr]graft Neogenesis[supreg] meets the device pass-through payment
criteria discussed in this section.
[[Page 33616]]
(4) KerecisTM Omega3 Wound (Skin Substitute)
Kerecis, LLC submitted an application for a new device category for
transitional pass-through payment status for KerecisTM
Omega3 Wound. KerecisTM Omega3 Wound is made from acellular
fish skin from wild Atlantic cod (Gadus morhua) caught in the North
Atlantic Ocean that is used to regenerate damaged human tissue in
chronic wounds. The applicant claimed that there is no disease
transmission risk and noted that the fish skin is not required to
undergo the viral inactivation process that the FDA dictates for
tissues from farm animals. The applicant noted that the Omega3 fatty
acids offer multiple health benefits, including anti-inflammation.
KerecisTM Omega3 Wound is supplied as a sterile, single-use
sheet in peel-open pouches. KerecisTM Omega3 Wound does not
elicit an immune response because the major antigenic components
present within cell membranes are removed in a gentle manner during
processing. Unlike mammalian and human sourced products, the fish skin
possesses extremely low risk of disease transmission and offers no
known cultural or religious constraints for usage. The fish skin
product is both halal and kosher compatible and avoids potential
conflicts with Sikhism and Hinduism (Vaishnavism).
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant received FDA clearance for KerecisTM Omega3 Wound
through the premarket notification section 510(k) process on October
23, 2013 and its June 1, 2016 application was within 3 years of FDA
clearance.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, KerecisTM Omega3 Wound is a skin
substitute product that is integral to the service provided, is used
for one patient only, comes in contact with human skin, and is
surgically inserted into the patient. The applicant also claimed
KerecisTM Omega3 Wound meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not an instrument,
apparatus, implement, or item for which depreciation and financing
expenses are recovered, and it is not a supply or material.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment category that describes
KerecisTM Omega3 Wound. The applicant proposed a pass-
through payment device category for KerecisTM Omega3 Wound
with category descriptor of ``Piscine skin substitute.'' We are
inviting public comments on this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will substantially improve the
diagnosis or treatment of an illness or injury or improve the
functioning of a malformed body part compared to the benefits of a
device or devices in a previously established category or other
available treatment. With regard to the substantial clinical
improvement criterion, the applicant stated that individuals who would
normally refuse to use skin substitute products from animal sources,
including pigs, cows, horses, and sheep, would use KerecisTM
Omega3 Wound because it is a fish-based skin substitute. The applicant
also asserted that KerecisTM Omega3 Wound provides several
beneficial outcomes, including faster resolution of the disease process
compared to similar products, decreased antibiotic use, decreased pain,
and reduced amounts of device-related complications.
The applicant cited three studies in support of the application.
The first study \10\ was a parallel-group, double-blinded, randomized
controlled trial undertaken to determine if healing time of whole
thickness biopsy wounds treated with Kerecis Omega3 Wound is
noninferior to that of wounds treated with porcine SIS ECM (Oasis). The
study was an intention-to-treat study. Participants had two 4-mm full
thickness punch wounds made on the proximal anterolateral aspect of
their nondominant arm. The study population was comprised of volunteers
aged between 18 and 67 years with most volunteers between the ages of
18 and 30. There were 80 volunteers who received Kerecis Omega3 Wound
and 82 volunteers who received porcine SIS ECM (Oasis).
---------------------------------------------------------------------------
\10\ Tumi Baldursson, T, MD, Ph.D. et al. Healing Rate and
Autoimmune Safety of Full-Thickness Wounds Treated With Fish Skin
Acellular Dermal Matrix Versus Porcine Small-Intestine Submucosa: A
Noninferiority Study; The International Journal of Lower Extremity
Wounds 2015, Vol. 14(1) 37-43.
---------------------------------------------------------------------------
The results showed that, at 21 days, 58 (72.5 percent) of the fish
skin ADM group were healed, compared with 46 (56 percent) of the
porcine SIS ECM group. At 25 days, 62 (77.5 percent) of the fish skin
ADM and 53 (65 percent) of the porcine SIS ECM group had healed. At the
completion of the trial (28 days), 76 of the 80 wounds treated with
fish skin ADM (95 percent) and 79 of the 82 wounds treated with porcine
SIS ECM (96.3 percent) were healed. The odds ratio of a fish skin ADM-
treated wound being healed as compared with that treated with porcine
SIS ECM at any given time point was estimated to be 4.75. The
difference between the treatments was significant (P = .041). The
immunological part of the study was designed to detect autoimmune
reactions in those individuals treated with Kerecis Omega3 Wound. There
was no evidence of antibodies forming in the presence of Kerecis Omega3
Wound.
There were issues with this study that may limit its usefulness to
determine substantial clinical improvement including the use of
nonpatient volunteers; studying the healing of biopsy sites rather than
actual wounds requiring treatment; and the use of an unrealistic 1-
month endpoint of care instead of a 6-month endpoint of care.
The second study \11\ was a case series study of 18 patients to
assess the percentage of wound closure area from baseline after 5
weekly fish-skin graft applications with at least one ``hard-to-heal''
criterion. Patients underwent application of the fish skin for 5
sequential weeks, followed by 3 weeks of standard care. Wound area,
skin assessments, and pain were analyzed weekly.
---------------------------------------------------------------------------
\11\ Yang, C.K. et al. A Prospective, Postmarket, Compassionate
Clinical Evaluation of a Novel Acellular Fish-skin Graft Which
Contains Omega-3 Fatty Acids for the Closure of Hard-to-heal Lower
Extremity Chronic Ulcers. Wounds 2016;28(4): 112-118.
---------------------------------------------------------------------------
The study results showed a 40-percent decrease in wound surface
area (P < 0.05) and a 48-percent decrease in wound depth was seen with
5 weekly applications of the fish-skin graft and secondary dressing (P
< 0.05). Complete closure was seen in 3 of 18 patients by the end of
the study phase. This study did not use a comparator group to measure
whether there is substantial clinical improvement with Kerecis Omega3
Wound compared to other skin substitute products.
The third study \12\ was a case series study of five patients with
diabetes mellitis and complicated wounds in the lower limbs with
exposed bone segments. The five patients had a total of seven wounds.
Initial debridement
[[Page 33617]]
occurred in the operating room, followed by application of wound matrix
and covered with silicone mesh. All seven wounds healed and the
patients did not have to have planned amputations on the limbs with the
wounds. The mean duration of treatment to achieve full closure of the
wound was 25 10 weeks and ranged from 13 to 41 weeks. This
study did not have a comparator group to determine if there was
substantial clinical improvement with Kerecis Omega3 Wound compared to
other skin substitute products.
---------------------------------------------------------------------------
\12\ Trinh, T.T., et al. Marine Omega3 wound matrix for: the
treatment of complicated wounds; Phlebologie 2016; 45: 93-98.
---------------------------------------------------------------------------
There is no clinical data provided by the applicant to suggest that
Kerecis Omega3 Wound provides a substantial clinical improvement over
other similar skin substitute products. We are inviting public comments
on whether Kerecis Omega3 Wound meets the substantial clinical
improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. With respect to the cost criterion, the
applicant stated that KerecisTM Omega3 Wound would be
reported with CPT codes 15271 through 15278, which cover the
application of skin substitute grafts to different areas of the body
for high-cost skin substitutes. To meet the cost criterion for device
pass-through payment, a device must pass all three tests of the cost
criterion for at least one APC. CPT codes 15271 through 15278 are
assigned to either APC 5054 (Level 4 Skin Procedures), with a CY 2016
payment rate of $1,411.21 and a device offset amount of $4.52, or APC
5055 (Level 5 Skin Procedures), with a CY 2016 payment rate of
$2,137.49 and a device offset amount of $25.44. According to the
applicant, the cost of substitute graft procedures when performed with
KerecisTM Omega3 Wound is $2,030.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $2,030 for KerecisTM Omega3 Wound
exceeds the applicable APC payment amount for the service related to
the category of devices of $1,411.21 by 144 percent ($2,030/$1,411.21 x
100 percent = 144 percent). Therefore, it appears that
KerecisTM Omega3 Wound meets the first cost significance
test.
The second cost significance test, at Sec. 419.66(d)(2), provides
that the estimated average reasonable cost of the devices in the
category must exceed the cost of the device-related portion of the APC
payment amount for the related service by at least 25 percent, which
means that the device cost needs to be at least 125 percent of the
offset amount (the device-related portion of the APC found on the
offset list). The average reasonable cost of $2,030 for
KerecisTM Omega3 Wound exceeds the device-related portion of
the APC payment amount of $4.52 by 44,911 percent ($2,030/$4.52 x 100
percent = 449 percent). Therefore, it appears that KerecisTM
Omega3 Wound meets the second cost significance test.
The third cost significance test, at Sec. 419.66(d)(3), requires
that the difference between the estimated average reasonable cost of
the devices in the category and the portion of the APC payment amount
for the device must exceed 10 percent of the APC payment amount for the
related service. The difference between the average reasonable cost of
$2,030 for KerecisTM Omega3 Wound and the portion of the APC
payment amount for the device of $4.52 exceeds the APC payment amount
for the related service of $1,411 by 144 percent (($2,030 - $4.52)/
$1,411.21) x 100 percent = 144 percent). Therefore, it appears that
KerecisTM Omega3 Wound meets the third cost significance
test. Based on the costs submitted by the applicant and the
calculations noted earlier, it appears that KerecisTM Omega3
Wound meets the cost criterion.
We are inviting public comments on whether KerecisTM
Omega3 Wound meets the device pass-through payment criteria discussed
in this section.
(5) X-WRAP[supreg]
Applied Biologics, LLC submitted an application for a new device
category for transitional pass-through payment status for X-
WRAP[supreg]. X-WRAP[supreg] is a chorion-free, amnion membrane
allograft that can be used as a biological wrap or patch at any
surgical site. It is used as a treatment for surgical or traumatic
injury to bone or soft tissue. It is used to minimize adhesions, reduce
inflammation, and promote soft tissue healing. The X-WRAP[supreg] is
made from the intermediate amniotic epithelial layer of the placenta,
recovered from a Cesarean delivery of pre-screened donors. It is
available in a variety of sizes and is used as a biologic augmentation
to a variety of orthopedic repairs.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant indicated that X-WRAP[supreg] conforms to the FDA regulatory
path under section 361 of the PHS Act and 21 CFR part 1271 for Human
Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps). Under
this regulatory path, FDA requires the manufacturer to register and
list their HCT/Ps with the Center for Biologics Evaluation and Research
(CBER) within 5 days after beginning operations and to update their
registrations annually. Applied Biologics, LLC has a FDA field
establishment identifier (FEI) under the HHS-FDA-Establishment
Registration and Listing for Human Cells, Tissues, and Cellular and
Tissue-Based Products (HCT/Ps). The applicant submitted an annual
registration/listing for dated December 30, 2015. It is not clear when
the initial CBER filing occurred for the X-WRAP[supreg] product, and
therefore, it is unclear if the newness criterion for X-WRAP[supreg] is
met.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, X-WRAP[supreg] is integral to the service
provided, is used for one patient only, comes in contact with human
skin, and is applied in or on a wound or other skin lesion. The
applicant also claimed X-WRAP[supreg] meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not an instrument,
apparatus, implement or item for which depreciation and financing
expenses are recovered, and it is not a supply or material furnished
incident to a service.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment device category that
describes X-WRAP[supreg]. The applicant proposed a pass-through device
category for X-WRAP[supreg] with a category descriptor of ``Amniotic
Membrane Soft Tissue Allografts''. We are inviting public comments on
this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will substantially improve the
diagnosis or treatment of an illness or injury or improve the
functioning of a malformed body part compared to the benefits of a
device or devices in a previously established category or other
available treatment. With regard to the substantial
[[Page 33618]]
clinical improvement criterion, the applicant submitted a list of
studies in the application that showed general effectiveness of
amniotic fluid and amniotic membrane-based products. However, these
studies were not specific to the X-WRAP[supreg] product. The applicant
also submitted one study \13\ that was a retrospective review with
prospective follow-up of patients (n=8) with recurrent surgical primary
cubital tunnel syndrome (CuTS) who had undergone at least two previous
ulnar nerve surgeries before having an ulnar neurolysis with X-
WRAP[supreg] dry amniotic membrane barrier. The results showed that the
participants experienced significant improvement in VAS pain scores,
QuickDASH outcome scores, and grip strength in comparison to these
scores prior to the surgery. Mean VAS improved by 3.5 from, 7.3 to 3.8
(P < .0001). Mean QuickDASH improved by 30 from, 80 to 50 (P < .0001).
Grip strength improved by 25 pounds on average (P < .0001), a mean
improvement of 38 percent relative to the contralateral side compared
with preoperative measurements. Also, none of the patients reported
progression or worsening of their symptoms compared with
preoperatively. The applicant's conclusions from the article were that
using the X-WRAP[supreg] amniotic membrane with revision neurolysis was
a safe and effective treatment for primary cubital syndrome. The study
lacked a comparison arm and did not include group assignment or
blinding of patients.
---------------------------------------------------------------------------
\13\ Gaspar, M.P., et al. (2016). Recurrent cubital tunnel
syndrome treated with revision neurolysis and amniotic membrane
nerve wrapping. Journal of Shoulder and Elbow surgery, 25, 2057-
2065.
---------------------------------------------------------------------------
Based on the evidence submitted, we believe there is insufficient
data to determine whether X-WRAP[supreg] offers a substantial clinical
improvement over other treatments for wound care. We are inviting
public comments on whether the X-WRAP[supreg] meets the substantial
clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that several CPT codes
would be used to report X-WRAP[supreg], including: CPT codes 29826,
29827, 29828, 23473, 23420, 23412, 27605, 27650, 29891, 29888, 29889,
28008, 22551, 22856, 27179, 29861, 29862, 15271, 15272, 15273, and
15277. To meet the cost criterion for device pass-through payment, a
device must pass all three tests for cost threshold for at least one
APC. These CPT codes are assigned to APCs 5121 through 5125 (Level 1
through Level 5 Musculoskeletal Procedures) and APCs 5054 and 5055
(Level 4 and Level 5 Skin Procedures). For our calculations, we used
APC 5121 (Level 1 Musculoskeletal Procedures), which had a CY 2016
payment rate of $1,455 and a device offset amount of $15.86 at the time
the application was received. According to the applicant, the X-
WRAP[supreg] product is available in several sizes, the largest being
4x8 cm with a cost of $5,280.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $5,280 for X-WRAP[supreg] exceeds the
applicable APC payment amount for the service related to the category
of devices of $1,455 by 363 percent ($5,280/$1,455 x 100 = 363
percent). Therefore, it appears that X-WRAP[supreg] meets the first
cost significance test.
The second cost significance test, at Sec. 419.66(d)(2), provides
that the estimated average reasonable cost of the devices in the
category must exceed the cost of the device-related portion of the APC
payment amount for the related service by at least 25 percent, which
means that the device cost needs to be at least 125 percent of the
offset amount (the device related portion of the APC found on the
offset list). The average reasonable cost of $5,280 for X-WRAP[supreg]
exceeds the device-related portion of the APC payment amount of $15.86
by 33,291 percent ($5,280/$15.86) x 100 = 33,291 percent). Therefore,
it appears that X-WRAP[supreg] meets the second cost significance test.
The third cost significance test, at Sec. 419.66(d)(3), requires
that the difference between the estimated average reasonable cost of
the devices in the category and the portion of the APC payment amount
for the device must exceed 10 percent of the APC payment amount for the
related service. The difference between the average reasonable cost of
$5,280 for X-WRAP[supreg] and the portion of the APC payment amount for
the device of $15.86 exceeds the APC payment amount for the related
service of $1,455 by 361 percent (($5280 - $15.86)/$1455 x 100 = 361
percent). Therefore, it appears that X-WRAP[supreg] meets the third
cost significance test.
We are inviting public comments on whether X-WRAP[supreg] meets the
device pass-through payment criteria discussed in this section.
B. Proposed Device-Intensive Procedures
1. Background
Under the OPPS, prior to CY 2017, device-intensive APCs were
defined as those APCs with a device offset greater than 40 percent (79
FR 66795). In assigning device-intensive status to an APC, the device
costs of all of the procedures within the APC were calculated and the
geometric mean device offset of all of the procedures had to exceed 40
percent. Almost all of the procedures assigned to device-intensive APCs
utilize devices, and the device costs for the associated HCPCS codes
exceed the 40-percent threshold. The no cost/full credit and partial
credit device policy (79 FR 66872 through 66873) applied to device-
intensive APCs and is discussed in detail in section IV.B.4. of this
proposed rule. A related device policy was the requirement that certain
procedures assigned to device-intensive APCs require the reporting of a
device code on the claim (80 FR 70422). For further background
information on the device-intensive APC policy, we refer readers to the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70421 through
70426).
2. HCPCS Code-Level Device-Intensive Determination
As stated above, prior to CY 2017, the device-intensive methodology
assigned device-intensive status to all procedures requiring the
implantation of a device, which were assigned to an APC with a device
offset greater than 40 percent. Historically, the device-intensive
designation was at the APC level and applied to the applicable
procedures within that given APC. In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79658), we changed our methodology to assign
device-intensive status to all procedures that require the implantation
of a device and have an individual HCPCS code-level device offset of
greater than 40 percent, regardless of the APC assignment. Under this
policy, all procedures with significant device costs (defined as a
device offset of more than 40 percent) are assigned device-intensive
status, regardless of their APC placement. Also, we believe that a
HCPCS code-level device offset is, in most cases, a better
representation of a procedure's device cost than an APC-wide average
device offset based on the average device offset of all of the
procedures assigned to an
[[Page 33619]]
APC. Unlike a device offset calculated at the APC level, which is a
weighted average offset for all devices used in all of the procedures
assigned to an APC, a HCPCS code-level device offset is calculated
using only claims for a single HCPCS code. We believe that such a
methodological change results in a more accurate representation of the
cost attributable to implantation of a high-cost device, which ensures
consistent device-intensive designation of procedures with a
significant device cost. Further, we believe a HCPCS code-level device
offset removes inappropriate device-intensive status to procedures
without a significant device cost but which are granted such status
because of APC assignment.
Under our CY 2017 finalized policy, procedures that have an
individual HCPCS code-level device offset of greater than 40 percent
are identified as device-intensive procedures and are subject to all
the policies applicable to procedures assigned device-intensive status
under our established methodology, including our policies on device
edits and device credits. Therefore, all procedures requiring the
implantation of a medical device and that have an individual HCPCS
code-level device offset of greater than 40 percent are subject to the
device edit and no cost/full credit and partial credit device policies,
discussed in sections IV.B.3. and IV.B.4. of this proposed rule,
respectively.
In addition, for new HCPCS codes describing procedures requiring
the implantation of medical devices that do not yet have associated
claims data, in the CY 2017 OPPS/ASC final rule with comment period (81
FR 79658), we finalized a policy for CY 2017 to apply device-intensive
status with a default device offset set at 41 percent for new HCPCS
codes describing procedures requiring the implantation of a medical
device that do not yet have associated claims data until claims data
are available to establish the HCPCS code-level device offset for the
procedures. This default device offset amount of 41 percent is not
calculated from claims data; instead, it is applied as a default until
claims data are available upon which to calculate an actual device
offset for the new code. The purpose of applying the 41-percent default
device offset to new codes that describe procedures that implant
medical devices is to ensure ASC access for new procedures until claims
data become available. However, in certain rare instances, for example,
in the case of a very expensive implantable device, we may temporarily
assign a higher offset percentage if warranted by additional
information such as pricing data from a device manufacturer (81 FR
79658). Once claims data are available for a new procedure requiring
the implantation of a medical device, device-intensive status will be
applied to the code if the HCPCS code-level device offset is greater
than 40 percent, according to our finalized policy of determining
device-intensive status by calculating the HCPCS code-level device
offset.
The full listing of proposed CY 2018 device-intensive procedures is
included in Addendum P to this proposed rule (which is available via
the Internet on the CMS Web site).
In response to comments received in the CY 2017 OPPS/ASC final rule
with comment period, we specified that additional information for our
consideration of an offset percentage higher than the default of 41
percent for new HCPCS codes describing procedures requiring the
implantation (or in some cases the insertion) of a medical device that
do not yet have associated claims data, such as pricing data or
invoices from a device manufacturer, should be directed to the Division
of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and
Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850,
or electronically at outpatientpps@cms.hhs.gov. Additional information
can be submitted prior to issuance of an OPPS/ASC proposed rule or as a
public comment in response to an issued OPPS/ASC proposed rule. Device
offset percentages will be set in each year's final rule.
3. Changes to the Device Edit Policy for CY 2017 and Subsequent Years
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
final rule with comment period (the CY 2015 device-dependent APCs) is
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70422), we modified our previously existing
policy and applied the device coding requirements exclusively to
procedures that require the implantation of a device that are assigned
to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with
comment period, we also finalized our policy that the claims processing
edits are such that any device code, when reported on a claim with a
procedure assigned to a device-intensive APC (listed in Table 42 of the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will
satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
through 79659), we changed our policy for CY 2017 and subsequent years
to apply the CY 2016 device coding requirements to the newly defined
(individual HCPCS code-level device offset greater than 40 percent)
device-intensive procedures. For CY 2017 and subsequent years, we also
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created
HCPCS code C1889 to recognize devices furnished during a device
intensive procedure that are not described by a specific Level II HCPCS
Category C-code. Reporting HCPCS code C1889 with a device intensive
procedure will satisfy the edit requiring a device code to be reported
on a claim with a device-intensive procedure.
We are not proposing any changes to this policy for CY 2018.
4. Proposed Adjustment to OPPS Payment for No Cost/Full Credit and
Partial Credit Devices
a. Background
To ensure equitable OPPS payment when a hospital receives a device
without cost or with full credit, in CY 2007, we implemented a policy
to reduce the payment for specified device-dependent APCs by the
estimated portion of the APC payment attributable to device costs (that
is, the device offset) when the hospital receives a specified device at
no cost or with full credit (71 FR 68071 through 68077). Hospitals were
instructed to report no cost/full credit device cases on the claim
using the ``FB'' modifier on the line with the procedure code in which
the no cost/full credit device is used. In cases in which the device is
furnished without cost or with full credit, hospitals were instructed
to report a token device charge of less than $1.01. In cases in which
the device being inserted is an upgrade (either of the same type of
device or to a different type of device) with a full credit for the
device being replaced, hospitals were instructed to report as the
device charge the difference between the hospital's usual charge for
the device being implanted and the hospital's usual charge for the
device for which it received full credit. In CY 2008, we expanded this
payment adjustment policy to include cases in which hospitals receive
partial credit of 50 percent or more of the cost of a specified device.
Hospitals were instructed to
[[Page 33620]]
append the ``FC'' modifier to the procedure code that reports the
service provided to furnish the device when they receive a partial
credit of 50 percent or more of the cost of the new device. We refer
readers to the CY 2008 OPPS/ASC final rule with comment period for more
background information on the ``FB'' and ``FC'' modifiers payment
adjustment policies (72 FR 66743 through 66749).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), beginning in CY 2014, we modified our policy of
reducing OPPS payment for specified APCs when a hospital furnishes a
specified device without cost or with a full or partial credit. For CY
2013 and prior years, our policy had been to reduce OPPS payment by 100
percent of the device offset amount when a hospital furnishes a
specified device without cost or with a full credit and by 50 percent
of the device offset amount when the hospital receives partial credit
in the amount of 50 percent or more of the cost for the specified
device. For CY 2014, we reduced OPPS payment, for the applicable APCs,
by the full or partial credit a hospital receives for a replaced
device. Specifically, under this modified policy, hospitals are
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' (Credit Received from the Manufacturer
for a Replaced Medical Device) when the hospital receives a credit for
a replaced device that is 50 percent or greater than the cost of the
device. For CY 2014, we also limited the OPPS payment deduction for the
applicable APCs to the total amount of the device offset when the
``FD'' value code appears on a claim. For CY 2015, we continued our
existing policy of reducing OPPS payment for specified APCs when a
hospital furnishes a specified device without cost or with a full or
partial credit and to use the three criteria established in the CY 2007
OPPS/ASC final rule with comment period (71 FR 68072 through 68077) for
determining the APCs to which our CY 2015 policy will apply (79 FR
66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70424), we finalized our policy to no longer specify a
list of devices to which the OPPS payment adjustment for no cost/full
credit and partial credit devices would apply and instead apply this
APC payment adjustment to all replaced devices furnished in conjunction
with a procedure assigned to a device-intensive APC when the hospital
receives a credit for a replaced specified device that is 50 percent or
greater than the cost of the device.
b. Policy for CY 2017 and Subsequent Years
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659
through 79660), for CY 2017 and subsequent years, we finalized our
policy to reduce OPPS payment for device intensive procedures, by the
full or partial credit a provider receives for a replaced device, when
a hospital furnishes a specified device without cost or with a full or
partial credit. Under our current policy, hospitals continue to be
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device.
In addition, for CY 2017 and subsequent years, we finalized our
policy to use the following three criteria for determining the
procedures to which our final policy will apply: (1) All procedures
must involve implantable devices that would be reported if device
insertion procedures were performed; (2) the required devices must be
surgically inserted or implanted devices that remain in the patient's
body after the conclusion of the procedure (at least temporarily); and
(3) the procedure must be device intensive; that is, the device offset
amount must be significant, which is defined as exceeding 40 percent of
the procedure's mean cost.
We are not proposing any changes to this policy for CY 2018.
5. Proposed Payment Policy for Low-Volume Device-Intensive Procedures
For CY 2016, we used our equitable adjustment authority under
section 1833(t)(2)(E) of the Act and used the median cost (instead of
the geometric mean cost per our standard methodology) to calculate the
payment rate for the implantable miniature telescope procedure
described by CPT code 0308T (Insertion of ocular telescope prosthesis
including removal of crystalline lens or intraocular lens prosthesis),
which is the only code assigned to APC 5494 (Level 4 Intraocular
Procedures) (80 FR 70388). We note that, as stated in the CY 2017 OPPS/
ASC proposed rule (81 FR 45656), we proposed to reassign the procedure
described by CPT code 0308T to APC 5495 (Level 5 Intraocular
Procedures) for CY 2017, but it would be the only procedure code
assigned to APC 5495. The payment rates for a procedure described by
CPT code 0308T (including the predecessor HCPCS code C9732) were
$15,551 in CY 2014, $23,084 in CY 2015, and $17,551 in CY 2016. The
procedure described by CPT code 0308T is a high-cost device-intensive
surgical procedure that has a very low volume of claims (in part
because most of the procedures described by CPT code 0308T are
performed in ASCs), and we believe that the median cost is a more
appropriate measure of the central tendency for purposes of calculating
the cost and the payment rate for this procedure because the median
cost is impacted to a lesser degree than the geometric mean cost by
more extreme observations. We stated that, in future rulemaking, we
would consider proposing a general policy for the payment rate
calculation for very low-volume device-intensive APCs (80 FR 70389).
For CY 2017, we proposed and finalized a payment policy for low-
volume device-intensive procedures that is similar to the policy
applied to the procedure described by CPT code 0308T in CY 2016. In the
CY 2017 OPPS/ASC final rule with comment period (81 FR 79660 through
79661), we established our current policy that the payment rate for any
device-intensive procedure that is assigned to a clinical APC with
fewer than 100 total claims for all procedures in the APC be calculated
using the median cost instead of the geometric mean cost, for the
reasons described above for the policy applied to the procedure
described by CPT code 0308T in CY 2016. The CY 2017 final rule
geometric mean cost for the procedure described by CPT code 0308T
(based on 19 claims containing the device HCPCS C-code in accordance
with the device-intensive edit policy) was approximately $21,302, and
the median cost was approximately $19,521. The final CY 2017 payment
rate (calculated using the median cost) is approximately $18,984.
For CY 2018, we are proposing to continue with our current policy
of establishing the payment rate for any device-intensive procedure
that is assigned to a clinical APC with fewer than 100 total claims for
all procedures in the APC based on calculations using the median cost
instead of the geometric mean cost. For CY 2018, this policy would
continue to apply only to a procedure described by CPT code 0308T in
APC 5495 because this APC is the only APC containing a device-intensive
procedure with fewer than 100 total claims in the APC. As we have
stated before (81 FR 79660), we believe that this approach will help to
mitigate significant year-to-year payment rate fluctuations while
preserving accurate claims data-based payment rates for
[[Page 33621]]
low-volume device-intensive procedures. The CY 2018 proposed rule
median cost for the procedure described by CPT code 0308T is
approximately $17,643.75. The proposed CY 2018 payment rate (calculated
using the median cost and the claims that reported the device
consistent with our device edit policy for device intensive procedures)
is approximately $16,963.69.
V. Proposed OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout this proposed rule, the term ``biological''
is used because this is the term that appears in section 1861(t) of the
Act. A ``biological'' as used in this proposed rule includes (but is
not necessarily limited to) a ``biological product'' or a ``biologic''
as defined in the Public Health Service Act. As enacted by the
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(BBRA) (Pub. L. 106-113), this pass-through payment provision requires
the Secretary to make additional payments to hospitals for: Current
orphan drugs, as designated under section 526 of the Federal Food,
Drug, and Cosmetic Act; current drugs and biologicals and brachytherapy
sources used in cancer therapy; and current radiopharmaceutical drugs
and biologicals. ``Current'' refers to those types of drugs or
biologicals mentioned above that are hospital outpatient services under
Medicare Part B for which transitional pass-through payment was made on
the first date the hospital OPPS was implemented.
Transitional pass-through payments also are provided for certain
``new'' drugs and biologicals that were not being paid for as an HOPD
service as of December 31, 1996 and whose cost is ``not insignificant''
in relation to the OPPS payments for the procedures or services
associated with the new drug or biological. For pass-through payment
purposes, radiopharmaceuticals are included as ``drugs.'' As required
by statute, transitional pass-through payments for a drug or biological
described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a
period of at least 2 years, but not more than 3 years, after the
payment was first made for the product as a hospital outpatient service
under Medicare Part B. Proposed CY 2018 pass-through drugs and
biologicals and their designated APCs are assigned status indicator
``G'' in Addenda A and B to this proposed rule (which are available via
the Internet on the CMS Web site).
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64.
These regulations specify that the pass-through payment equals the
amount determined under section 1842(o) of the Act minus the portion of
the APC payment that CMS determines is associated with the drug or
biological.
Section 1847A of the Act establishes the average sales price (ASP)
methodology, which is used for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology, as applied under the OPPS, uses
several sources of data as a basis for payment, including the ASP, the
wholesale acquisition cost (WAC), and the average wholesale price
(AWP). In this proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described
therein. Additional information on the ASP methodology can be found on
the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/.
The pass-through application and review process for drugs and
biologicals is described on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
2. 3-Year Transitional Pass-Through Payment Period for All Pass-Through
Drugs, Biologicals, and Radiopharmaceuticals and Quarterly Expiration
of Pass-Through Status
As required by statute, transitional pass-through payments for a
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act
can be made for a period of at least 2 years, but not more than 3
years, after the payment was first made for the product as a hospital
outpatient service under Medicare Part B. Our current policy is to
accept pass-through applications on a quarterly basis and to begin
pass-through payments for newly approved pass-through drugs and
biologicals on a quarterly basis through the next available OPPS
quarterly update after the approval of a product's pass-through status.
However, prior to CY 2017, we expired pass-through status for drugs and
biologicals on an annual basis through notice-and-comment rulemaking
(74 FR 60480). In the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79662), we finalized a policy change, beginning with pass-
through drugs and biologicals newly approved in CY 2017 and subsequent
calendar years, to allow for a quarterly expiration of pass-through
payment status for drugs and biologicals to afford a pass-through
payment period that is as close to a full 3 years as possible for all
pass-through drugs, biologicals, and radiopharmaceuticals.
This change eliminated the variability of the pass-through payment
eligibility period, which previously varied based on when a particular
application was initially received. We believe that the timing of a
pass-through payment application should not determine the duration of
pass-through payment status, and this approach allows for the maximum
pass-through payment period for each pass-through drug without
exceeding the statutory limit of 3 years.
3. Proposed Drugs and Biologicals With Expiring Pass-Through Payment
Status in CY 2017
We are proposing that the pass-through payment status of 19 drugs
and biologicals would expire on December 31, 2017, as listed in Table
21 below. All of these drugs and biologicals will have received OPPS
pass-through payment for at least 2 years and no more than 3 years by
December 31, 2017. These drugs and biologicals were approved for pass-
through payment status on or before January 1, 2016. In accordance with
the policy finalized last year and described above, pass-through
payment status for drugs and biologicals newly approved in CY 2017 and
subsequent years will expire on a quarterly basis, with a pass-through
payment period as close to 3 years as possible. With the exception of
those groups of drugs and biologicals that are always packaged when
they do not have pass-through payment status (specifically, anesthesia
drugs; drugs, biologicals, and radiopharmaceuticals that function as
supplies when used in a diagnostic test or procedure (including
diagnostic radiopharmaceuticals, contrast agents, and stress agents);
and
[[Page 33622]]
drugs and biologicals that function as supplies when used in a surgical
procedure), our standard methodology for providing payment for drugs
and biologicals with expiring pass-through payment status in an
upcoming calendar year is to determine the product's estimated per day
cost and compare it with the OPPS drug packaging threshold for that
calendar year (which is proposed to be $120 for CY 2018), as discussed
further in section V.B.2. of this proposed rule. We are proposing that
if the estimated per day cost for the drug or biological is less than
or equal to the applicable OPPS drug packaging threshold, we would
package payment for the drug or biological into the payment for the
associated procedure in the upcoming calendar year. If the estimated
per day cost of the drug or biological is greater than the OPPS drug
packaging threshold, we are proposing to provide separate payment at
the applicable relative ASP-based payment amount (which is proposed at
ASP+6 percent for CY 2018, as discussed further in section V.B.3. of
this proposed rule).
Table 21--Proposed Drugs and Biologicals for Which Pass-Through Payment Status Expires December 31, 2017
----------------------------------------------------------------------------------------------------------------
Pass-through
CY 2017 HCPCS Code CY 2017 Long descriptor CY 2017 Status CY 2017 APC payment
indicator effective date
----------------------------------------------------------------------------------------------------------------
A9586................................ Florbetapir f18, G 1664 01/01/2015
diagnostic, per study
dose, up to 10
millicuries.
C9447................................ Injection, phenylephrine G 1663 01/01/2015
and ketorolac, 4 ml
vial.
J0596................................ Injection, c-1 esterase G 9445 04/01/2015
inhibitor (human),
Ruconest, 10 units.
J0695................................ Injection, ceftolozane G 9452 04/01/2015
50 mg and tazobactam 25
mg.
J0875................................ Injection, dalbavancin, G 1823 01/01/2015
5 mg.
J1833................................ Injection, G 9456 10/01/2015
isavuconazonium
sulfate, 1 mg.
J2407................................ Injection, oritavancin, G 1660 01/01/2015
10 mg.
J2502................................ Injection, pasireotide G 9454 07/01/2015
long acting, 1 mg.
J2547................................ Injection, peramivir, 1 G 9451 04/01/2015
mg.
J2860................................ Injection, siltuximab, G 9455 07/01/2015
10 mg.
J3090................................ Injection, tedizolid G 1662 01/01/2015
phosphate, 1 mg.
J7313................................ Injection, fluocinolone G 9450 04/01/2015
acetonide intravitreal
implant, 0.01 mg.
J8655................................ Netupitant (300 mg) and G 9448 04/01/2015
palonosetron (0.5 mg).
J9032................................ Injection, belinostat, G 1658 01/01/2015
10 mg.
J9039................................ Injection, blinatumomab, G 9449 04/01/2015
1 mcg.
J9271................................ Injection, G 1490 01/01/2015
pembrolizumab, 1 mg.
J9299................................ Injection, nivolumab, 1 G 9453 07/01/2015
mg.
Q4172................................ PuraPly, and PuraPly G 1657 01/01/2015
Antimicrobial, any
type, per square
centimeter.
Q9950................................ Injection, sulfur G 9457 10/01/2015
hexafluoride lipid
microsphere, per ml.
----------------------------------------------------------------------------------------------------------------
The proposed packaged or separately payable status of each of these
drugs or biologicals is listed in Addendum B to this proposed rule
(which is available via the Internet on the CMS Web site).
4. Proposed Drugs, Biologicals, and Radiopharmaceuticals With New or
Continuing Pass-Through Payment Status in CY 2018
We are proposing to continue pass-through payment status in CY 2018
for 38 drugs and biologicals. None of these drugs and biologicals will
have received OPPS pass-through payment for at least 2 years and no
more than 3 years by December 31, 2017. These drugs and biologicals,
which were approved for pass-through status between January 1, 2016,
and July 1, 2017, are listed in Table 22 below. The APCs and HCPCS
codes for these drugs and biologicals approved for pass-through payment
status through July 1, 2017 are assigned status indicator ``G'' in
Addenda A and B to this proposed rule (which are available via the
Internet on the CMS Web site).
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount authorized under
section 1842(o) of the Act and the portion of the otherwise applicable
OPD fee schedule that the Secretary determines is associated with the
drug or biological. For CY 2018, we are proposing to continue to pay
for pass-through drugs and biologicals at ASP+6 percent, equivalent to
the payment rate these drugs and biologicals would receive in the
physician's office setting in CY 2018. We are proposing that a $0 pass-
through payment amount would be paid for pass-through drugs and
biologicals under the CY 2018 OPPS because the difference between the
amount authorized under section 1842(o) of the Act, which is proposed
at ASP+6 percent, and the portion of the otherwise applicable OPD fee
schedule that the Secretary determines is appropriate, which is
proposed at ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we are proposing that their pass-through
payment amount would be equal to ASP+6 percent for CY 2018 because, if
not for their pass-through status, payment for these products would be
packaged into the associated procedure.
In addition, we are proposing to continue to update pass-through
payment rates on a quarterly basis on the CMS Web site during CY 2018
if later quarter ASP submissions (or more recent WAC or AWP
information, as applicable) indicate that adjustments to the payment
rates for these pass-through drugs or biologicals are necessary. For a
full description of this policy, we refer readers to the CY 2006 OPPS/
ASC final rule with comment period (70 FR 68632 through 68635).
For CY 2018, consistent with our CY 2017 policy for diagnostic and
therapeutic radiopharmaceuticals, we are proposing to provide payment
for both diagnostic and therapeutic radiopharmaceuticals that are
granted pass-through payment status based on the ASP methodology. As
stated earlier,
[[Page 33623]]
for purposes of pass-through payment, we consider radiopharmaceuticals
to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic
radiopharmaceutical receives pass-through payment status during CY
2018, we are proposing to follow the standard ASP methodology to
determine the pass-through payment rate that drugs receive under
section 1842(o) of the Act, which is proposed at ASP+6 percent. If ASP
data are not available for a radiopharmaceutical, we are proposing to
provide pass-through payment at WAC+6 percent, the equivalent payment
provided to pass-through drugs and biologicals without ASP information.
If WAC information also is not available, we are proposing to provide
payment for the pass-through radiopharmaceutical at 95 percent of its
most recent AWP.
The 38 drugs and biologicals that we are proposing to continue to
have pass-through payment status for CY 2018 or have been granted pass-
through payment status as of July 2017 are shown in Table 22 below.
Table 22--Proposed Drugs and Biologicals With Pass-Through Payment Status in CY 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Pass-through
CY 2017 HCPCS code CY 2018 HCPCS code CY 2018 long descriptor 2018 status Proposed CY payment
indicator 2018 APC effective date
--------------------------------------------------------------------------------------------------------------------------------------------------------
A9515................................... A9515...................... Choline C 11, diagnostic, per G 9461 04/01/2016
study dose.
A9587................................... A9587...................... Gallium ga-68, dotatate, G 9056 01/01/2017
diagnostic, 0.1 millicurie.
A9588................................... A9588...................... Fluciclovine f-18, diagnostic, 1 G 9052 01/01/2017
millicurie.
C9140................................... C9140...................... Injection, Factor VIII G 9043 01/01/2017
(antihemophilic factor,
recombinant) (Afstyla), 1 I.U..
C9460................................... C9460...................... Injection, cangrelor, 1 mg...... G 9460 01/01/2016
C9482................................... C9482...................... Injection, sotalol G 9482 10/01/2016
hydrochloride, 1 mg.
C9483................................... C9483...................... Injection, atezolizumab, 10 mg.. G 9483 10/01/2016
C9484................................... C9484...................... Injection, eteplirsen, 10 mg.... G 9484 04/01/2017
C9485................................... C9485...................... Injection, olaratumab, 10 mg.... G 9485 04/01/2017
C9486................................... C9486...................... Injection, granisetron extended G 9486 04/01/2017
release, 0.1 mg.
Q9989................................... Q9989...................... Ustekinumab, for Intravenous G 9487 04/01/2017
Injection, 1 mg.
C9488................................... C9488...................... Injection, conivaptan G 9488 04/01/2017
hydrochloride, 1 mg.
C9489................................... C9489...................... Injection, nusinersen, 0.1 mg... G 9489 07/01/2017
C9490................................... C9490...................... Injection, bezlotoxumab, 10 mg.. G 9490 07/01/2017
J0570................................... J0570...................... Buprenorphine implant, 74.2 mg.. G 9058 01/01/2017
J1942................................... J1942...................... Injection, aripiprazole G 9470 04/01/2016
lauroxil, 1 mg.
J2182................................... J2182...................... Injection, mepolizumab, 1 mg.... G 9473 04/01/2016
J2786................................... J2786...................... Injection, reslizumab, 1 mg..... G 9481 10/01/2016
J2840................................... J2840...................... Injection, sebelipase alfa, 1 mg G 9478 07/01/2016
J7179................................... J7179...................... Injection, von willebrand factor G 9059 01/01/2017
(recombinant), (Vonvendi), 1
i.u. vwf:rco.
J7202................................... J7202...................... Injection, Factor IX, albumin G 9171 10/01/2016
fusion protein (recombinant),
Idelvion, 1 i.u..
J7207................................... J7207...................... Injection, Factor VIII G 1844 04/01/2016
(antihemophilic factor,
recombinant) PEGylated, 1 I.U..
J7209................................... J7209...................... Injection, Factor VIII G 1846 04/01/2016
(antihemophilic factor,
recombinant) (Nuwiq), per i.u..
J7322................................... J7322...................... Hyaluronan or derivative, G 9471 04/01/2016
Hymovis, for intra-articular
injection, 1 mg.
J7328................................... J7328...................... Hyaluronan or derivative, gel- G 1862 04/01/2017
syn, for intra-articular
injection, 0.1 mg.
J7342................................... J7342...................... Instillation, ciprofloxacin otic G 9479 07/01/2016
suspension, 6 mg.
J7503................................... J7503...................... Tacrolimus, extended release, G 1845 04/01/2016
(envarsus xr), oral, 0.25 mg.
J9034................................... J9034...................... Injection, bendamustine hcl G 1861 01/01/2017
(Bendeka), 1 mg.
J9145................................... J9145...................... Injection, daratumumab, 10 mg... G 9476 07/01/2016
J9176................................... J9176...................... Injection, elotuzumab, 1 mg..... G 9477 07/01/2016
J9205................................... J9205...................... Injection, irinotecan liposome, G 9474 04/01/2016
1 mg.
J9295................................... J9295...................... Injection, necitumumab, 1 mg.... G 9475 04/01/2016
J9325................................... J9325...................... Injection, talimogene G 9472 04/01/2016
laherparepvec, 1 million plaque
forming units (PFU).
J9352................................... J9352...................... Injection, trabectedin, 0.1 mg.. G 9480 07/01/2016
Q5101................................... Q5101...................... Injection, Filgrastim (G-CSF), G 1822 01/01/2016
Biosimilar, 1 microgram.
Q5102................................... Q5102...................... Injection, Infliximab, G 1847 04/01/2017
Biosimilar, 10 mg.
Q9982................................... Q9982...................... Flutemetamol F18, diagnostic, G 9459 01/01/2016
per study dose, up to 5
millicuries.
Q9983................................... Q9983...................... Florbetaben F18, diagnostic, per G 9458 01/01/2016
study dose, up to 8.1
millicuries.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 33624]]
5. Proposed Provisions for Reducing Transitional Pass-Through Payments
for Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals To
Offset Costs Packaged Into APC Groups
Under the regulations at 42 CFR 419.2(b), nonpass-through drugs,
biologicals, and radiopharmaceuticals that function as supplies when
used in a diagnostic test or procedure are packaged in the OPPS. This
category includes diagnostic radiopharmaceuticals, contrast agents,
stress agents, and other diagnostic drugs. Also under 42 CFR 419.2(b),
nonpass-through drugs and biologicals that function as supplies in a
surgical procedure are packaged in the OPPS. This category includes
skin substitutes and other surgical-supply drugs and biologicals. As
described earlier, section 1833(t)(6)(D)(i) of the Act specifies that
the transitional pass-through payment amount for pass-through drugs and
biologicals is the difference between the amount paid under section
1842(o) of the Act and the otherwise applicable OPD fee schedule
amount. Because a payment offset is necessary in order to provide an
appropriate transitional pass-through payment, we deduct from the pass-
through payment for policy packaged drugs, biologicals, and
radiopharmaceuticals an amount reflecting the portion of the APC
payment associated with predecessor products in order to ensure no
duplicate payment is made. This amount reflecting the portion of the
APC payment associated with predecessor products is called the payment
offset.
The payment offset policy applies to all policy packaged drugs,
biologicals, and radiopharmaceuticals. For a full description of the
payment offset policy as applied to diagnostic radiopharmaceuticals,
contrast agents, stress agents, and skin substitutes, we refer readers
to the discussion in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70430 through 70432). For CY 2018, as we did in CY 2017,
we are proposing to continue to apply the same policy packaged offset
policy to payment for pass-through diagnostic radiopharmaceuticals,
pass-through contrast agents, pass-through stress agents, and pass-
through skin substitutes. The proposed APCs to which a payment offset
may be applicable for pass-through diagnostic radiopharmaceuticals,
pass-through contrast agents, pass-through stress agents, and pass-
through skin substitutes are identified in Table 23 below.
Table 23--Proposed APCS to Which a Policy-Packaged Drug or
Radiopharmaceutical Offset May Be Applicable in CY 2018
------------------------------------------------------------------------
Proposed CY 2018 APC Proposed CY 2018 APC title
------------------------------------------------------------------------
Diagnostic Radiopharmaceutical
------------------------------------------------------------------------
5591.............................. Level 1 Nuclear Medicine and Related
Services.
5592.............................. Level 2 Nuclear Medicine and Related
Services.
5593.............................. Level 3 Nuclear Medicine and Related
Services.
5594.............................. Level 4 Nuclear Medicine and Related
Services.
------------------------------------------------------------------------
Contrast Agent
------------------------------------------------------------------------
5571.............................. Level 1 Imaging with Contrast.
5572.............................. Level 2 Imaging with Contrast.
5573.............................. Level 3 Imaging with Contrast.
------------------------------------------------------------------------
Stress Agent
------------------------------------------------------------------------
5722.............................. Level 2 Diagnostic Tests and Related
Services.
5593.............................. Level 3 Nuclear Medicine and Related
Services.
------------------------------------------------------------------------
Skin Substitute
------------------------------------------------------------------------
5054.............................. Level 4 Skin Procedures.
5055.............................. Level 5 Skin Procedures.
------------------------------------------------------------------------
We are proposing to continue to post annually on the CMS Web site
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/ a file that contains the APC offset
amounts that will be used for that year for purposes of both evaluating
cost significance for candidate pass-through device categories and
drugs and biologicals and establishing any appropriate APC offset
amounts. Specifically, the file will continue to provide the amounts
and percentages of APC payment associated with packaged implantable
devices, policy-packaged drugs, and threshold packaged drugs and
biologicals for every OPPS clinical APC.
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals without Pass-Through Payment Status
1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Proposed Packaging Threshold
In accordance with section 1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for payment of drugs and biologicals was
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we
used the four quarter moving average Producer Price Index (PPI) levels
for Pharmaceutical Preparations (Prescription) to trend the $50
threshold forward from the third quarter of CY 2005 (when the Pub. L.
108-173 mandated threshold became effective) to the third quarter of CY
2007. We then rounded the resulting dollar amount to the nearest $5
increment in order to determine the CY 2007 threshold amount of $55.
Using the same methodology as that used in CY 2007 (which is discussed
in more detail in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086)), we set the packaging threshold for
establishing separate APCs for drugs and biologicals at $110 for CY
2017 (81 FR 79665).
[[Page 33625]]
Following the CY 2007 methodology, for this CY 2018 OPPS/ASC
proposed rule, we used the most recently available four quarter moving
average PPI levels to trend the $50 threshold forward from the third
quarter of CY 2005 to the third quarter of CY 2018 and rounded the
resulting dollar amount ($117.98) to the nearest $5 increment, which
yielded a figure of $120. In performing this calculation, we used the
most recent forecast of the quarterly index levels for the PPI for
Pharmaceuticals for Human Use (Prescription) (Bureau of Labor
Statistics (BLS) series code WPUSI07003) from CMS' Office of the
Actuary. Based on these calculations, we are proposing a packaging
threshold for CY 2018 of $120.
b. Proposed Packaging of Payment for HCPCS Codes That Describe Certain
Drugs, Certain Biologicals, and Therapeutic Radiopharmaceuticals Under
the Cost Threshold (``Threshold-Packaged Drugs'')
To determine the proposed CY 2018 packaging status for all nonpass-
through drugs and biologicals that are not policy packaged, we
calculated, on a HCPCS code-specific basis, the per day cost of all
drugs, biologicals, and therapeutic radiopharmaceuticals (collectively
called ``threshold-packaged'' drugs) that had a HCPCS code in CY 2016
and were paid (via packaged or separate payment) under the OPPS. We
used data from CY 2016 claims processed before January 1, 2017 for this
calculation. However, we did not perform this calculation for those
drugs and biologicals with multiple HCPCS codes that include different
dosages, as described in section V.B.1.d. of this proposed rule, or for
the following policy-packaged items that we are proposing to continue
to package in CY 2018: Anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure; and drugs and biologicals that function
as supplies when used in a surgical procedure.
In order to calculate the per day costs for drugs, biologicals, and
therapeutic radiopharmaceuticals to determine their proposed packaging
status in CY 2018, we used the methodology that was described in detail
in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and
finalized in the CY 2006 OPPS final rule with comment period (70 FR
68636 through 68638). For each drug and biological HCPCS code, we used
an estimated payment rate of ASP+6 percent (which is the payment rate
we are proposing for separately payable drugs and biologicals for CY
2018, as discussed in more detail in section V.B.2.b. of this proposed
rule) to calculate the CY 2018 proposed rule per day costs. We used the
manufacturer submitted ASP data from the fourth quarter of CY 2016
(data that were used for payment purposes in the physician's office
setting, effective April 1, 2017) to determine the proposed rule per
day cost.
As is our standard methodology, for CY 2018, we are proposing to
use payment rates based on the ASP data from the first quarter of CY
2017 for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to this proposed rule
(which are available via the Internet on the CMS Web site) because
these are the most recent data available for use at the time of
development of this proposed rule. These data also were the basis for
drug payments in the physician's office setting, effective April 1,
2017. For items that did not have an ASP-based payment rate, such as
some therapeutic radiopharmaceuticals, we used their mean unit cost
derived from the CY 2016 hospital claims data to determine their per
day cost.
We are proposing to package items with a per day cost less than or
equal to $120, and identify items with a per day cost greater than $120
as separately payable. Consistent with our past practice, we cross-
walked historical OPPS claims data from the CY 2016 HCPCS codes that
were reported to the CY 2017 HCPCS codes that we display in Addendum B
to this proposed rule (which is available via the Internet on the CMS
Web site) for proposed payment in CY 2018.
Our policy during previous cycles of the OPPS has been to use
updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs and biologicals in this CY 2018 OPPS/ASC
proposed rule, we are proposing to use ASP data from the fourth quarter
of CY 2016, which is the basis for calculating payment rates for drugs
and biologicals in the physician's office setting using the ASP
methodology, effective April 1, 2017, along with updated hospital
claims data from CY 2016. We note that we also are proposing to use
these data for budget neutrality estimates and impact analyses for this
CY 2018 OPPS/ASC proposed rule.
Payment rates for HCPCS codes for separately payable drugs and
biologicals included in Addenda A and B for the final rule with comment
period will be based on ASP data from the second quarter of CY 2017.
These data will be the basis for calculating payment rates for drugs
and biologicals in the physician's office setting using the ASP
methodology, effective October 1, 2017. These payment rates would then
be updated in the January 2018 OPPS update, based on the most recent
ASP data to be used for physician's office and OPPS payment as of
January 1, 2018. For items that do not currently have an ASP-based
payment rate, we are proposing to recalculate their mean unit cost from
all of the CY 2016 claims data and updated cost report information
available for the CY 2018 final rule with comment period to determine
their final per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in this proposed rule
may be different from the same drug HCPCS code's packaging status
determined based on the data used for the final rule with comment
period. Under such circumstances, we are proposing to continue to
follow the established policies initially adopted for the CY 2005 OPPS
(69 FR 65780) in order to more equitably pay for those drugs whose cost
fluctuates relative to the proposed CY 2018 OPPS drug packaging
threshold and the drug's payment status (packaged or separately
payable) in CY 2017. These established policies have not changed for
many years and are the same as described in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70434). Specifically, for CY 2018,
consistent with our historical practice, we are proposing to apply the
following policies to these HCPCS codes for drugs, biologicals, and
therapeutic radiopharmaceuticals whose relationship to the drug
packaging threshold changes based on the updated drug packaging
threshold and on the final updated data:
HCPCS codes for drugs and biologicals that were paid
separately in CY 2017 and that were proposed for separate payment in CY
2018, and that then have per day costs equal to or less than the CY
2018 final rule drug packaging threshold, based on the updated ASPs and
hospital claims data
[[Page 33626]]
used for the CY 2018 final rule, would continue to receive separate
payment in CY 2018.
HCPCS codes for drugs and biologicals that were packaged
in CY 2017 and that were proposed for separate payment in CY 2018, and
that then have per day costs equal to or less than the CY 2018 final
rule drug packaging threshold, based on the updated ASPs and hospital
claims data used for the CY 2018 final rule, would remain packaged in
CY 2018.
HCPCS codes for drugs and biologicals for which we
proposed packaged payment in CY 2018 but then have per day costs
greater than the CY 2018 final rule drug packaging threshold, based on
the updated ASPs and hospital claims data used for the CY 2018 final
rule, would receive separate payment in CY 2018.
c. Policy Packaged Drugs, Biologicals, and Radiopharmaceuticals
As mentioned briefly earlier, in the OPPS, we package several
categories of drugs, biologicals, and radiopharmaceuticals, regardless
of the cost of the products. Because the products are packaged
according to the policies in 42 CFR 419.2(b), we refer to these
packaged drugs, biologicals, and radiopharmaceuticals as ``policy-
packaged'' drugs, biologicals, and radiopharmaceuticals. These policies
are either longstanding or based on longstanding principles and
inherent to the OPPS and are as follows:
Anesthesia, certain drugs, biologicals, and other
pharmaceuticals; medical and surgical supplies and equipment; surgical
dressings; and devices used for external reduction of fractures and
dislocations (Sec. 419.2(b)(4));
Intraoperative items and services (Sec. 419.2(b)(14));
Drugs, biologicals, and radiopharmaceuticals that function
as supplies when used in a diagnostic test or procedure (including but
not limited to, diagnostic radiopharmaceuticals, contrast agents, and
pharmacologic stress agents (Sec. 419.2(b)(15)); and
Drugs and biologicals that function as supplies when used
in a surgical procedure (including, but not limited to, skin
substitutes and similar products that aid wound healing and implantable
biologicals) (Sec. 419.2(b)(16)).
The policy at Sec. 419.2(b)(16) is broader than that at Sec.
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with
comment period: ``We consider all items related to the surgical outcome
and provided during the hospital stay in which the surgery is
performed, including postsurgical pain management drugs, to be part of
the surgery for purposes of our drug and biological surgical supply
packaging policy'' (79 FR 66875). The category described by Sec.
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals,
contrast agents, stress agents, and some other products. The category
described by Sec. 419.2(b)(16) includes skin substitutes and some
other products. We believe it is important to reiterate that cost
consideration is not a factor when determining whether an item is a
surgical supply (79 FR 66875).
d. Proposed High Cost/Low Cost Threshold for Packaged Skin Substitutes
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74938), we unconditionally packaged skin substitute products into their
associated surgical procedures as part of a broader policy to package
all drugs and biologicals that function as supplies when used in a
surgical procedure. As part of the policy to finalize the packaging of
skin substitutes, we also finalized a methodology that divides the skin
substitutes into a high cost group and a low cost group, in order to
ensure adequate resource homogeneity among APC assignments for the skin
substitute application procedures (78 FR 74933).
Skin substitutes assigned to the high cost group are described by
HCPCS codes 15271 through 15278. Skin substitutes assigned to the low
cost group are described by HCPCS codes C5271 through C5278. Geometric
mean costs for the various procedures are calculated using only claims
for the skin substitutes that are assigned to each group. Specifically,
claims billed with HCPCS codes 15271, 15273, 15275, or 15277 are used
to calculate the geometric mean costs for procedures assigned to the
high cost group, and claims billed with HCPCS codes C5271, C5273,
C5275, and C5277 are used to calculate the geometric mean costs for
procedures assigned to the low cost group (78 FR 74935).
Each of the HCPCS codes described above are assigned to one of the
following three skin procedure APCs according to the geometric mean
cost for the code: APC 5053 (Level 3 Skin Procedures) (HCPCS codes
C5271, C5275, and C5277); APC 5054 (Level 4 Skin Procedures) (HCPCS
codes C5273, 15271, 15275, and 15277); or APC 5055 (Level 5 Skin
Procedures) (HCPCS code 15273). In CY 2017, the payment rate for APC
5053 (Level 3 Skin Procedures) was $466, the payment rate for APC 5054
(Level 4 Skin Procedures) was $1,468, and the payment rate for APC 5055
(Level 5 Skin Procedures) was $2,575. This information also is
available in Addenda A and B of the CY 2017 OPPS/ASC final rule with
comment period (which is available via the Internet on the CMS Web
site).
We have continued the high cost/low cost categories policy since CY
2014, and are proposing to continue it for CY 2018 with the
modification discussed below. Under this current policy, skin
substitutes in the high cost category are reported with the skin
substitute application CPT codes, and skin substitutes in the low cost
category are reported with the analogous skin substitute HCPCS C-codes.
For a discussion of the CY 2014 and CY 2015 methodologies for assigning
skin substitutes to either the high cost group or the low cost group,
we refer readers to the CY 2014 OPPS/ASC final rule with comment period
(78 FR 74932 through 74935) and the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66882 through 66885).
For a discussion of the high cost/low cost methodology that was
adopted in CY 2016 and has been in effect since then, we refer readers
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434
through 70435). For CY 2018, as in CY 2016 and CY 2017, we are
proposing to continue to determine the high/low cost status for each
skin substitute product based on either a product's geometric mean unit
cost (MUC) exceeding the geometric MUC threshold or the product's per
day cost (PDC) (the total units of a skin substitute multiplied by the
mean unit cost and divided by the total number of days) exceeding the
PDC threshold. For CY 2018, as for CY 2017, we are proposing to assign
each skin substitute that exceeds either the MUC threshold or the PDC
threshold to the high cost group. In addition, as described in more
detail later in this section, for CY 2018, as for CY 2017, we are
proposing to assign any skin substitute with an MUC or a PDC that does
not exceed either the MUC threshold or the PDC threshold to the low
cost group. For CY 2018, we are proposing that any skin substitute
product that was assigned to the high cost group in CY 2017 will be
assigned to the high cost group for CY 2018, regardless of whether it
exceeds or falls below the CY 2018 MUC or PDC threshold.
For this CY 2018 OPPS/ASC proposed rule, and consistent with
previous methodology as established in the CY 2014 through CY 2017
final rules with comment period, we analyzed CY 2016 claims data to
calculate the MUC threshold (a weighted average of all skin
substitutes' MUCs) and the PDC threshold (a weighted average of all
skin
[[Page 33627]]
substitutes' PDCs). The proposed CY 2018 MUC threshold is $47 per cm\2\
(rounded to the nearest $1) and the proposed CY 2018 PDC threshold is
$755 (rounded to the nearest $1).
For CY 2018, we are proposing to continue to assign skin
substitutes with pass-through payment status to the high cost category.
However, there are no skin substitutes that are proposed to have pass-
through payment status for CY 2018. We are proposing to assign skin
substitutes with pricing information but without claims data to
calculate a geometric MUC or PDC to either the high cost or low cost
category based on the product's ASP+6 percent payment rate as compared
to the MUC threshold. If ASP is not available, we would use WAC+6
percent or 95 percent of AWP to assign a product to either the high
cost or low cost category. New skin substitutes without pricing
information would be assigned to the low cost category until pricing
information is available to compare to the CY 2018 MUC threshold. For a
discussion of our existing policy under which we assign skin
substitutes without pricing information to the low cost category until
pricing information is available, we refer readers to the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70436).
Some skin substitute manufacturers have raised concerns about
significant fluctuation in both the MUC threshold and the PDC threshold
from year to year. The fluctuation in the thresholds may result in the
reassignment of several skin substitutes from the high cost group to
the low cost group which, under current payment rates, can be a
difference of approximately $1,000 in the payment amount for the same
procedure. In addition, these stakeholders also were concerned that the
inclusion of cost data from skin substitutes with pass-through payment
status in the MUC and PDC calculations would artificially inflate the
thresholds. Skin substitute stakeholders requested that CMS consider
alternatives to the current methodology used to calculate the MUC and
PDC thresholds and also requested that CMS consider whether it might be
appropriate to establish a new cost group in between the low cost group
and the high cost group to allow for assignment of moderately priced
skin substitutes to a newly created middle group.
We share the goal of promoting payment stability for skin
substitute products and their related procedures as price stability
allows hospitals using such products to more easily anticipate future
payments associated with these products. We have attempted to limit
year to year shifts for skin substitute products between the high cost
and low cost groups through multiple initiatives implemented since CY
2014, including: establishing separate skin substitute application
procedure codes for low-cost skin substitutes (78 FR 74935); using a
skin substitute's MUC calculated from outpatient hospital claims data
instead of an average of ASP+6 percent as the primary methodology to
assign products to the high cost or low cost group (79 FR 66883); and
establishing the PDC threshold as an alternate methodology to assign a
skin substitute to the high cost group (80 FR 70434 through 70435).
In order to allow additional time to evaluate concerns and
suggestions from stakeholders about the volatility of the MUC and PDC
thresholds, for CY 2018, we are proposing that a skin substitute that
was assigned to the high cost group for CY 2017 would be assigned to
the high cost group for CY 2018, even if it does not exceed the CY 2018
MUC or PDC thresholds. Our analysis has found that seven skin
substitute products that would have otherwise been assigned to the low
cost group for CY 2018 will instead be assigned to the high cost group
under this proposed policy. The skin substitute products affected by
this proposed policy are identified with an ``*'' in Table 24. For CY
2019 and subsequent years, we are seeking public comment on how we
should calculate data for products in determining the MUC and PDC
thresholds that are included in the high cost group solely based on
assignment to the high cost group in CY 2017.
The goal of our proposal to retain the same skin substitute cost
group assignments in CY 2018 as in CY 2017 is to maintain similar
levels of payment for skin substitute products for CY 2018 while we
study our current skin substitute payment methodology to determine
whether refinement to the existing policies is consistent with our
policy goal of providing payment stability for skin substitutes. We are
seeking public comments on the methodologies that are used to calculate
pricing thresholds as well as the payment groupings that recognize a
low cost group and a high cost group. We are especially interested in
suggestions that are based on analysis of Medicare claims data from
hospital outpatient departments that might better promote improved
payment stability for skin substitute products under the OPPS. This
proposal is intended to apply for CY 2018 to allow time for the public
to submit other ideas that could be evaluated for the CY 2019
rulemaking.
In summary, we are proposing to assign skin substitutes with a MUC
or a PDC that does not exceed either the MUC threshold or the PDC
threshold to the low cost group, unless the product was assigned to the
high cost group in CY 2017, in which case we are proposing to assign
the product to the high cost group for CY 2018, regardless of whether
it exceeds the CY 2018 MUC or PDC threshold. We also are proposing to
assign to the high cost group skin substitute products that exceed the
CY 2018 MUC or PDC threshold and assign to the low cost group skin
substitute products that did not exceed either the CY 2017 or CY 2018
MUC or PDC thresholds and were not assigned to the high cost group in
CY 2017. We are proposing to continue to use payment methodologies
including ASP+6 percent, WAC+6 percent, or 95 percent of AWP for skin
substitute products that have pricing information but do not have
claims data to determine if their costs exceed the CY 2018 MUC
threshold. Finally, we are proposing to continue to assign new skin
substitute products without pricing information to the low cost group.
Table 24 below displays the proposed CY 2018 high cost or low cost
category assignment for each skin substitute product.
Table 24--Proposed Skin Substitute Assignments to High Cost and Low Cost
Groups for CY 2018
------------------------------------------------------------------------
Current CY 2017 Proposed CY 2018
CY 2018 HCPCS code CY 2018 short high/low high/low
descriptor assignment assignment
------------------------------------------------------------------------
C9363............. Integra Meshed High............ High.
Bil Wound Mat.
Q4100............. Skin Substitute, Low............. Low.
NOS.
Q4101............. Apligraf........ High............ High.
Q4102............. Oasis Wound Low............. Low.
Matrix.
Q4103............. Oasis Burn High............ High.*
Matrix.
Q4104............. Integra BMWD.... High............ High.
[[Page 33628]]
Q4105............. Integra DRT..... High............ High.
Q4106............. Dermagraft...... High............ High.
Q4107............. GraftJacket..... High............ High.
Q4108............. Integra Matrix.. High............ High.
Q4110............. Primatrix....... High............ High.*
Q4111............. Gammagraft...... Low............. Low.
Q4115............. Alloskin........ Low............. Low.
Q4116............. Alloderm........ High............ High.
Q4117............. Hyalomatrix..... Low............. Low.
Q4121............. Theraskin....... High............ High.
Q4122............. Dermacell....... High............ High.*
Q4123............. Alloskin........ High............ High.
Q4124............. Oasis Tri-layer Low............. Low.
Wound Matrix.
Q4126............. Memoderm/derma/ High............ High.
tranz/integup.
Q4127............. Talymed......... High............ High.*
Q4128............. Flexhd/ High............ High.
Allopatchhd/
Matrixhd.
Q4131............. Epifix.......... High............ High.
Q4132............. Grafix Core..... High............ High.
Q4133............. Grafix Prime.... High............ High.
Q4134............. hMatrix......... Low............. Low.
Q4135............. Mediskin........ Low............. Low.
Q4136............. Ezderm.......... Low............. Low.
Q4137............. Amnioexcel or High............ High.
Biodexcel, 1cm.
Q4138............. Biodfence High............ High.
DryFlex, 1cm.
Q4140............. Biodfence 1cm... High............ High.
Q4141............. Alloskin ac, 1cm High............ High.
Q4143............. Repriza, 1cm.... High............ High.
Q4146............. Tensix, 1CM..... High............ High.
Q4147............. Architect ecm, High............ High.*
1cm.
Q4148............. Neox 1k, 1cm.... High............ High.
Q4150............. Allowrap DS or High............ High.
Dry 1 sq cm.
Q4151............. AmnioBand, High............ High.
Guardian 1 sq
cm.
Q4152............. Dermapure 1 High............ High.
square cm.
Q4153............. Dermavest 1 High............ High.
square cm.
Q4154............. Biovance 1 High............ High.
square cm.
Q4156............. Neox 100 1 High............ High.
square cm.
Q4157............. Revitalon 1 High............ High.
square cm.
Q4158............. MariGen 1 square High............ High.*
cm.
Q4159............. Affinity 1 High............ High.
square cm.
Q4160............. NuShield 1 High............ High.
square cm.
Q4161............. Bio-Connekt per High............ High.*
square cm.
Q4162............. Amnio bio and Low............. High.
woundex flow.
Q4163............. Amnion bio and High............ High.
woundex sq cm.
Q4164............. Helicoll, per High............ High.
square cm.
Q4165............. Keramatrix, per Low............. Low.
square cm.
Q4166............. Cytal, per Low............. Low.
square cm.
Q4167............. Truskin, per Low............. Low.
square cm.
Q4169............. Artacent wound, High............ High.
per square cm.
Q4170............. Cygnus, per Low............. Low.
square cm.
Q4172............. PuraPly, PuraPly High............ High.
antimic.
Q4173............. Palingen or High............ High.
palingen xplus,
per sq cm.
Q4175............. Miroderm, per High............ High.
square cm.
------------------------------------------------------------------------
* These products do not exceed either the MUC or PDC threshold for CY
2018, but are proposed to be assigned to the high cost group since
they were assigned to the high cost group in CY 2017.
e. Proposed Packaging Determination for HCPCS Codes That Describe the
Same Drug or Biological But Different Dosages
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believed that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, we are proposing
to continue our policy to make packaging determinations on a drug-
specific basis, rather than a HCPCS code-specific basis, for those
HCPCS codes that describe the same drug or biological but different
dosages in CY 2018.
[[Page 33629]]
For CY 2018, in order to propose a packaging determination that is
consistent across all HCPCS codes that describe different dosages of
the same drug or biological, we aggregated both our CY 2016 claims data
and our pricing information at ASP+6 percent across all of the HCPCS
codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. The following drugs
did not have pricing information available for the ASP methodology for
this CY 2018 OPPS/ASC proposed rule, and as is our current policy for
determining the packaging status of other drugs, we used the mean unit
cost available from the CY 2016 claims data to make the proposed
packaging determinations for these drugs: HCPCS code J7100 (infusion,
dextran 40,500 ml) and HCPCS code J7110 (infusion, dextran 75,500 ml).
For all other drugs and biologicals that have HCPCS codes
describing different doses, we then multiplied the proposed weighted
average ASP+6 percent per unit payment amount across all dosage levels
of a specific drug or biological by the estimated units per day for all
HCPCS codes that describe each drug or biological from our claims data
to determine the estimated per day cost of each drug or biological at
less than or equal to the proposed CY 2018 drug packaging threshold of
$120 (so that all HCPCS codes for the same drug or biological would be
packaged) or greater than the proposed CY 2018 drug packaging threshold
of $120 (so that all HCPCS codes for the same drug or biological would
be separately payable). The proposed packaging status of each drug and
biological HCPCS code to which this methodology would apply in CY 2018
is displayed in Table 25 below.
Table 25--Proposed HCPCS Codes to Which the CY 2018 Drug-Specific
Packaging Determination Methodology Applies
------------------------------------------------------------------------
Proposed CY
CY 2018 HCPCS code CY 2018 long descriptor 2018 SI
------------------------------------------------------------------------
C9257........................ Injection, bevacizumab, K
0.25 mg.
J9035........................ Injection, bevacizumab, 10 K
mg.
J1020........................ Injection, N
methylprednisolone
acetate, 20 mg.
J1030........................ Injection, N
methylprednisolone
acetate, 40 mg.
J1040........................ Injection, N
methylprednisolone
acetate, 80 mg.
J1460........................ Injection, gamma globulin, K
intramuscular, 1 cc.
J1560........................ Injection, gamma globulin, K
intramuscular over 10 cc.
J1642........................ Injection, heparin sodium, N
(heparin lock flush), per
10 units.
J1644........................ Injection, heparin sodium, N
per 1000 units.
J1840........................ Injection, kanamycin N
sulfate, up to 500 mg.
J1850........................ Injection, kanamycin N
sulfate, up to 75 mg.
J2788........................ Injection, rho d immune N
globulin, human, minidose,
50 micrograms (250 i.u.).
J2790........................ Injection, rho d immune N
globulin, human, full
dose, 300 micrograms (1500
i.u.).
J2920........................ Injection, N
methylprednisolone sodium
succinate, up to 40 mg.
J2930........................ Injection, N
methylprednisolone sodium
succinate, up to 125 mg.
J3471........................ Injection, hyaluronidase, N
ovine, preservative free,
per 1 usp unit (up to 999
usp units).
J3472........................ Injection, hyaluronidase, N
ovine, preservative free,
per 1000 usp units.
J7030........................ Infusion, normal saline N
solution, 1000 cc.
J7040........................ Infusion, normal saline N
solution, sterile (500
ml=1 unit).
J7050........................ Infusion, normal saline N
solution, 250 cc.
J7100........................ Infusion, dextran 40, 500 N
ml.
J7110........................ Infusion, dextran 75, 500 N
ml.
J7515........................ Cyclosporine, oral, 25 mg.. N
J7502........................ Cyclosporine, oral, 100 mg. N
J8520........................ Capecitabine, oral, 150 mg. N
J8521........................ Capecitabine, oral, 500 mg. N
J9250........................ Methotrexate sodium, 5 mg.. N
J9260........................ Methotrexate sodium, 50 mg. N
------------------------------------------------------------------------
2. Proposed Payment for Drugs and Biologicals Without Pass-Through
Status That Are Not Packaged
a. Proposed Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable and Packaged Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or is a drug or biological for which payment
was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY 2006 and subsequent years be equal to the average
acquisition cost for the drug for that year as determined by the
Secretary, subject to any adjustment for overhead costs and taking into
account the hospital acquisition cost survey data collected by the
Government Accountability Office (GAO) in CYs 2004 and 2005, and later
periodic surveys conducted by the Secretary as set forth in the
statute. If hospital acquisition cost data are not available, the law
requires that payment be equal
[[Page 33630]]
to payment rates established under the methodology described in section
1842(o), section 1847A, or section 1847B of the Act, as calculated and
adjusted by the Secretary as necessary. We refer to this alternative
methodology as the ``statutory default.'' Most physician Part B drugs
are paid at ASP+6 percent in accordance with section 1842(o) and
section 1847A of the Act.
Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in
OPPS payment rates for SCODs to take into account overhead and related
expenses, such as pharmacy services and handling costs. Section
1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead
and related expenses and to make recommendations to the Secretary
regarding whether, and if so how, a payment adjustment should be made
to compensate hospitals for overhead and related expenses. Section
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the
weights for ambulatory procedure classifications for SCODs to take into
account the findings of the MedPAC study.\14\
---------------------------------------------------------------------------
\14\ Medicare Payment Advisory Committee. June 2005 Report to
the Congress. Chapter 6: Payment for pharmacy handling costs in
hospital outpatient departments. Available at: https://www.medpac.gov/docs/default-source/reports/June05_ch6.pdf?sfvrsn=0.
---------------------------------------------------------------------------
It has been our longstanding policy to apply the same treatment to
all separately payable drugs and biologicals, which include SCODs, and
drugs and biologicals that are not SCODs. Therefore, we apply the
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs,
as required by statute, but we also apply it to separately payable
drugs and biologicals that are not SCODs, which is a policy
determination rather than a statutory requirement. In this CY 2018
OPPS/ASC proposed rule, we are proposing to apply section
1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and
biologicals, including SCODs. Although we do not distinguish SCODs in
this discussion, we note that we are required to apply section
1833(t)(14)(A)(iii)(II) of the Act to SCODs, but we also are applying
this provision to other separately payable drugs and biologicals,
consistent with our history of using the same payment methodology for
all separately payable drugs and biologicals.
For a detailed discussion of our OPPS drug payment policies from CY
2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68386 through 68389), we
first adopted the statutory default policy to pay for separately
payable drugs and biologicals at ASP+6 percent based on section
1833(t)(14)(A)(iii)(II) of the Act. We continued this policy of paying
for separately payable drugs and biologicals at the statutory default
for CY 2014, CY 2015, CY 2016, and CY 2017 (81 FR 79673).
b. Proposed CY 2018 Payment Policy
For CY 2018, we are proposing to continue our payment policy that
has been in effect from CY 2013 to present and pay for separately
payable drugs and biologicals at ASP+6 percent in accordance with
section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We
are proposing that the ASP+6 percent payment amount for separately
payable drugs and biologicals requires no further adjustment and
represents the combined acquisition and pharmacy overhead payment for
drugs and biologicals. We also are proposing that payments for
separately payable drugs and biologicals are included in the budget
neutrality adjustments, under the requirements in section 1833(t)(9)(B)
of the Act, and that the budget neutral weight scalar is not applied in
determining payments for these separately paid drugs and biologicals.
We note that we are proposing below to pay for separately payable,
nonpass-through drugs acquired with a 340B discount at a rate of ASP
minus 22.5 percent. We refer readers to the full discussion of this
proposal in section V.B.7. of this proposed rule.
Also, we note that separately payable drug and biological payment
rates listed in Addenda A and B to this proposed rule (available via
the Internet on the CMS Web site), which illustrate the proposed CY
2018 payment of ASP+6 percent for separately payable nonpass-through
drugs and biologicals and ASP+6 percent for pass-through drugs and
biologicals, reflect either ASP information that is the basis for
calculating payment rates for drugs and biologicals in the physician's
office setting effective April 1, 2017, or WAC, AWP, or mean unit cost
from CY 2016 claims data and updated cost report information available
for this proposed rule. In general, these published payment rates are
not the same as the actual January 2018 payment rates. This is because
payment rates for drugs and biologicals with ASP information for
January 2018 will be determined through the standard quarterly process
where ASP data submitted by manufacturers for the third quarter of 2017
(July 1, 2017 through September 30, 2017) will be used to set the
payment rates that are released for the quarter beginning in January
2018 near the end of December 2017. In addition, payment rates for
drugs and biologicals in Addenda A and B to this proposed rule for
which there was no ASP information available for April 2017 are based
on mean unit cost in the available CY 2016 claims data. If ASP
information becomes available for payment for the quarter beginning in
January 2018, we will price payment for these drugs and biologicals
based on their newly available ASP information. Finally, there may be
drugs and biologicals that have ASP information available for this
proposed rule (reflecting April 2017 ASP data) that do not have ASP
information available for the quarter beginning in January 2018. These
drugs and biologicals would then be paid based on mean unit cost data
derived from CY 2016 hospital claims. Therefore, the proposed payment
rates listed in Addenda A and B to this proposed rule are not for
January 2018 payment purposes and are only illustrative of the proposed
CY 2018 OPPS payment methodology using the most recently available
information at the time of issuance of this proposed rule.
c. Biosimilar Biological Products
For CY 2016 and CY 2017, we finalized a policy to pay for
biosimilar biological products based on the payment allowance of the
product as determined under section 1847A of the Act and to subject
nonpass-through biosimilar biological products to our annual threshold-
packaged policy (80 FR 70445 through 70446). For CY 2018, we are
proposing to continue this same payment policy for biosimilar
biological products.
Public comments on the Medicare Part B biosimilar biological
product payment policy should be submitted in response to the
biosimilar payment policy comment solicitation in the CY 2018 MPFS
proposed rule.
3. Proposed Payment Policy for Therapeutic Radiopharmaceuticals
For CY 2018, we are proposing to continue the payment policy for
therapeutic radiopharmaceuticals that began in CY 2010. We pay for
separately paid therapeutic radiopharmaceuticals under the ASP
methodology adopted for separately payable drugs and biologicals. If
ASP information is unavailable for a therapeutic radiopharmaceutical,
we base therapeutic radiopharmaceutical payment on mean unit cost data
derived
[[Page 33631]]
from hospital claims. We believe that the rationale outlined in the CY
2010 OPPS/ASC final rule with comment period (74 FR 60524 through
60525) for applying the principles of separately payable drug pricing
to therapeutic radiopharmaceuticals continues to be appropriate for
nonpass-through, separately payable therapeutic radiopharmaceuticals in
CY 2018. Therefore, we are proposing for CY 2018 to pay all nonpass-
through, separately payable therapeutic radiopharmaceuticals at ASP+6
percent, based on the statutory default described in section
1833(t)(14)(A)(iii)(II) of the Act. For a full discussion of ASP-based
payment for therapeutic radiopharmaceuticals, we refer readers to the
CY 2010 OPPS/ASC final rule with comment period (74 FR 60520 through
60521). We also are proposing to rely on CY 2016 mean unit cost data
derived from hospital claims data for payment rates for therapeutic
radiopharmaceuticals for which ASP data are unavailable and to update
the payment rates for separately payable therapeutic
radiopharmaceuticals according to our usual process for updating the
payment rates for separately payable drugs and biologicals on a
quarterly basis if updated ASP information is unavailable. For a
complete history of the OPPS payment policy for therapeutic
radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule
with comment period (69 FR 65811), the CY 2006 OPPS final rule with
comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60524). The proposed CY 2018 payment rates for
nonpass-through, separately payable therapeutic radiopharmaceuticals
are in Addenda A and B to this proposed rule (which are available via
the Internet on the CMS Web site).
4. Proposed Payment Adjustment Policy for Radioisotopes Derived From
Non-Highly Enriched Uranium Sources
Radioisotopes are widely used in modern medical imaging,
particularly for cardiac imaging and predominantly for the Medicare
population. Some of the Technetium-99 (Tc-99m), the radioisotope used
in the majority of such diagnostic imaging services, is produced in
legacy reactors outside of the United States using highly enriched
uranium (HEU).
The United States would like to eliminate domestic reliance on
these reactors, and is promoting the conversion of all medical
radioisotope production to non-HEU sources. Alternative methods for
producing Tc-99m without HEU are technologically and economically
viable, and conversion to such production has begun. We expect that
this change in the supply source for the radioisotope used for modern
medical imaging will introduce new costs into the payment system that
are not accounted for in the historical claims data.
Therefore, beginning in CY 2013, we finalized a policy to provide
an additional payment of $10 for the marginal cost for radioisotopes
produced by non-HEU sources (77 FR 68323). Under this policy, hospitals
report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium
source, full cost recovery add-on per study dose) once per dose along
with any diagnostic scan or scans furnished using Tc-99m as long as the
Tc-99m doses used can be certified by the hospital to be at least 95
percent derived from non-HEU sources (77 FR 68321).
We stated in the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68321) that our expectation is that this additional payment will
be needed for the duration of the industry's conversion to alternative
methods to producing Tc-99m without HEU. We also stated that we would
reassess, and propose if necessary, on an annual basis whether such an
adjustment continued to be necessary and whether any changes to the
adjustment were warranted (77 FR 68316). We have reassessed this
payment for CY 2018 and did not identify any new information that would
cause us to modify payment. Therefore, for CY 2018, we are proposing to
continue to provide an additional $10 payment for radioisotopes
produced by non-HEU sources.
5. Proposed Payment for Blood Clotting Factors
For CY 2017, we provided payment for blood clotting factors under
the same methodology as other nonpass-through separately payable drugs
and biologicals under the OPPS and continued paying an updated
furnishing fee (81 FR 79676). That is, for CY 2017, we provided payment
for blood clotting factors under the OPPS at ASP+6 percent, plus an
additional payment for the furnishing fee. We note that when blood
clotting factors are provided in physicians' offices under Medicare
Part B and in other Medicare settings, a furnishing fee is also applied
to the payment. The CY 2017 updated furnishing fee was $0.209 per unit.
For CY 2018, we are proposing to pay for blood clotting factors at
ASP+6 percent, consistent with our proposed payment policy for other
nonpass-through, separately payable drugs and biologicals, and to
continue our policy for payment of the furnishing fee using an updated
amount. Our policy to pay for a furnishing fee for blood clotting
factors under the OPPS is consistent with the methodology applied in
the physician's office and in the inpatient hospital setting. These
methodologies were first articulated in the CY 2006 OPPS final rule
with comment period (70 FR 68661) and later discussed in the CY 2008
OPPS/ASC final rule with comment period (72 FR 66765). The proposed
furnishing fee update is based on the percentage increase in the
Consumer Price Index (CPI) for medical care for the 12-month period
ending with June of the previous year. Because the Bureau of Labor
Statistics releases the applicable CPI data after the MPFS and OPPS/ASC
proposed rules are published, we are not able to include the actual
updated furnishing fee in the proposed rules. Therefore, in accordance
with our policy, as finalized in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66765), we are proposing to announce the actual
figure for the percent change in the applicable CPI and the updated
furnishing fee calculated based on that figure through applicable
program instructions and posting on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/.
6. Proposed Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
For CY 2018, we are proposing to continue to use the same payment
policy as in CY 2017 for nonpass-through drugs, biologicals, and
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims
data, which describes how we determine the payment rate for drugs,
biologicals, or radiopharmaceuticals without an ASP. For a detailed
discussion of the payment policy and methodology, we refer readers the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70442 through
70443). The proposed CY 2018 payment status of each of the nonpass-
through drugs, biologicals, and radiopharmaceuticals with HCPCS codes
but without OPPS hospital claims data is listed in Addendum B to this
proposed rule, which is available via the Internet on the CMS Web site.
[[Page 33632]]
7. Alternative Payment Methodology for Drugs Purchased Under the 340B
Drug Discount Program
a. Background
The 340B Drug Discount Program, which was established by section
340B of the Public Health Service Act by the Veterans Health Care Act
of 1992, is administered by the Health Resources and Services
Administration (HRSA) within HHS. The 340B program allows participating
hospitals and other health care providers to purchase certain ``covered
outpatient drugs'' (as defined under section 1927(k) of the Act and
interpreted by HRSA through various guidance documents) at discounted
prices from drug manufacturers. The statutory intent of the 340B
program is to maximize scarce Federal resources as much as possible,
reaching more eligible patients, and providing care that is more
comprehensive.\15\
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\15\ The House report that accompanied the authorizing
legislation for the 340B program stated, ``In giving these ``covered
entities'' access to price reductions the Committee intends to
enable these entities to stretch scarce Federal resources as far as
possible, reaching more eligible patients and providing more
comprehensive services.'' (H.R. Rep No. 102-384(II), at 12 (1992)).
---------------------------------------------------------------------------
The 340B statute defines which health care providers are eligible
to participate in the program (``covered entities''). In addition to
Federal health care grant recipients, covered entities include
hospitals with a Medicare disproportionate share hospital (DSH)
percentage above 11.75 percent. However, under Pub. L. 111-148, section
7101 expanded eligibility to critical access hospitals (CAHs),
children's hospitals with a DSH adjustment greater than 11.75 percent,
sole community hospitals with a DSH adjustment percentage of 8.0
percent or higher, rural referral centers with a DSH adjustment
percentage of 8.0 percent or higher, and freestanding cancer hospitals
with a DSH adjustment percentage above 11.75 percent. In accordance
with section 340B(a)(4)(L) of the Public Health Service Act, DSH
hospitals and CAH participants must meet other criteria, such as being
owned by a State or local government, or be a nonprofit hospital under
contract with a State or local government to provide services to low-
income patients who are not eligible for Medicare or Medicaid.
HRSA calculates the ceiling price for each covered outpatient drug.
The ceiling price is the drug's average manufacturer price (AMP) minus
the unit rebate amount (URA), which is a statutory formula that varies
depending on whether the drug is an innovator single source drug (no
generic available), an innovator multiple source drug (a brand drug
with available generic(s)), or a noninnovator multiple source (generic)
drug. The ceiling price represents the maximum price a drug
manufacturer can charge a covered entity for the drug. However, covered
entities also have the option to participate in HRSA's Prime Vendor
Program (PVP), under which the prime vendor, in some circumstances, can
negotiate even deeper discounts (known as ``subceiling prices'') on
many covered outpatient drugs. By the end of FY 2014, the PVP had
nearly 7,000 products available to participating entities below the
340B ceiling price, including 3,557 covered outpatient drugs with an
estimated average savings of 10 percent below the 340B ceiling
price.\16\
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\16\ Department of Health and Human Services. 2016. Fiscal Year
2017. Health Resources and Services Administration justification of
estimates for appropriations committees. Washington, DC: HHS.
https://www.hrsa.gov/about/budget/budgetjustification2017.pdf.
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Several recent studies and reports on Medicare Part B payments for
340B purchased drugs highlight a difference in Medicare Part B drug
spending between 340B hospitals and non-340B hospitals as well as
varying differences in the amount by which the Part B payment exceeds
the drug acquisition cost.17 18 19 Links to the full reports
referenced in this section can be found in the footnotes.
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\17\ Office of Inspector General. ``Part B Payment for 340B
Purchased Drugs OEI-12-14-00030''. November 2015. Available at:
https://oig.hhs.gov/oei/reports/oei-12-14-00030.pdf.
\18\ Medicare Payment Advisory Commission. Report to the
Congress: Overview of the 340B Drug Pricing Program. May 2015.
Available at: https://www.medpac.gov/docs/default-source/reports/may-2015-report-to-the-congress-overview-of-the-340b-drug-pricing-program.pdf?sfvrsn=0
\19\ Government Accountability Office. ``Medicare Part B Drugs:
Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs
at Participating Hospitals GAO-15-442''. June 2015. Available at:
https://www.gao.gov/assets/680/670676.pdf.
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In its May 2015 Report to Congress, MedPAC analyzed Medicare
hospital outpatient claims (excluding CAHs) along with information from
HRSA on which hospitals participate in the 340B program. MedPAC
included data on all separately payable drugs under the OPPS except for
vaccines and orphan drugs provided by freestanding cancer hospitals,
rural referral centers, and sole community hospitals. To estimate costs
that 340B hospitals incur to acquire drugs covered under the OPPS, it
generally used the formula for calculating the 340B ceiling price:
(average manufacturer price (AMP)-unit rebate amount (URA)) x drug
package size. Because MedPAC did not have access to AMP data, it used
each drug's ASP as a proxy for AMP. MedPAC notes that ASP is typically
slightly lower than AMP. In addition, MedPAC noted that, due to data
limitations, its estimates of ceiling prices are conservative and
likely higher (possibly much higher) than actual ceiling prices.
Further details on the methodology used to calculate the average
minimum discount for separately payable drugs can be found in Appendix
A of its May 2015 Report to Congress. In this report, MedPAC estimated
that, on average, hospitals in the 340B program ``receive a minimum
discount of 22.5 percent of the [ASP] for drugs paid under the
[OPPS].''
In its March 2016 MedPAC Report to Congress, MedPAC noted that the
OIG recently estimated that discounts across all 340B providers
(hospitals and certain clinics) average 33.6 percent of ASP, allowing
these providers to generate significant profits when they administer
Part B drugs (MedPAC March 2016, page 79). According to the U.S.
Government Accountability Office (GAO) report, the amount of the 340B
discount ranges from an estimated 20 to 50 percent discount, compared
to what the entity would have otherwise paid. In addition,
participation in the PVP often results in a covered entity paying a
subceiling price (estimated to be approximately 10 percent below the
ceiling price). (U.S. Department of Health and Human Services, HRSA FY
2015 Budget Justification.) Participation in the PVP is voluntary and
free.
With respect to chemotherapy drugs and drug administration
services, MedPAC examined Part B spending for 340B and non-340B
hospitals for a 5-year period from 2008 to 2012 and found that
``Medicare spending grew faster among hospitals that participated in
the 340B program for all five years than among hospitals that did not
participate in the 340B program at any time during [the study]
period.'' (MedPAC May 2015, page 14). This is just one example of drug
spending increases that is correlated with participation in the 340B
program and calls into question whether Medicare's current payment
policy for separately payable drugs at ASP+ 6 percent is appropriate in
light of the discounted rates at which 340B hospitals acquire such
drugs, especially because beneficiary cost-sharing for these drugs is
based on the Medicare payment rate.
Further, GAO found that ``. . . in both 2008 and 2012, per
beneficiary Medicare Part B drug spending, including oncology drug
spending, was substantially higher at 340B DSH hospitals than at non-
340B hospitals.'' According to the GAO report, this
[[Page 33633]]
indicates that, on average, beneficiaries at 340B DSH hospitals were
either prescribed more drugs or more expensive drugs than beneficiaries
at the other non-340B hospitals in GAO's analysis. For example, in
2012, average per beneficiary spending at 340B DSH hospitals was $144,
compared to approximately $60 at non-340B hospitals. The differences
did not appear to be explained by the hospital characteristics GAO
examined or patients' health status. (GAO 15-442, page 20)
Under the OPPS, all hospitals (other than CAHs, which are paid
based on 101 percent of reasonable costs as required by section 1834(g)
of the Act) are currently paid the same rate for separately payable
drugs (ASP plus 6 percent), regardless of whether the hospital
purchased the drug at a discount through the 340B program. Medicare
beneficiaries are liable for a copayment that is equal to 20 percent of
the OPPS payment rate, which is currently ASP+6 percent (regardless of
the 340B purchase price for the drug). Based on an analysis of almost
500 drugs billed in the hospital outpatient setting in 2013, the OIG
found that, for 35 drugs, the ``difference between the Part B amount
and the 340B ceiling price was so large that, in a least one quarter of
2013, the beneficiary's coinsurance alone . . . was greater than the
amount a covered entity spent to acquire the drug'' (OIG November 2015,
OEI-12-14-00030, page 9).
In the CY 2009 OPPS/ASC final rule with comment period, we
requested comment regarding the drug costs of hospitals that
participate in the 340B program and whether we should consider an
alternative drug payment methodology for participating 340B hospitals
(73 FR 68655). As noted above, in the time since that comment
solicitation, access to the 340B program was expanded under section
7101 of Public Law 111-148, which amended section 340B(a)(4) of the
Public Health Service Act to expand the types of covered entities
eligible to participate in the 340B program. In addition, in its March
2016 Report to Congress, MedPAC recommended a legislative proposal
related to payment for Part B drugs furnished by 340B hospitals under
which Medicare would reduce payment rates for 340B hospitals'
separately payable 340B drugs by 10 percent of the ASP and direct the
program savings from reducing Part B drug payment rates to the Medicare
funded uncompensated care pool.\20\ In its November 2015 report
entitled ``Part B Payments for 340B-Purchased Drugs,'' the Office of
the Inspector General (OIG) found that Part B payments were 58 percent
more than 340B ceiling prices, which allowed covered entities to retain
approximately $1.3 billion in 2013 (OEI-12-14-00030, page 8). In the
same report, the OIG described three options under which both the
Medicare program and Medicare beneficiaries would be able to share in
the savings realized by hospitals and other covered entities that
participate in the 340B program (OEI-12-14-00030, pages 11-12). These
options ranged from paying ASP with no additional add-on percentage, to
making payment based on the 340B ceiling price plus 6 percent of ASP
for each 340B purchased drug (OEI-12-14-00030, page 11). Analysis in
several of these reports notes limitations in estimating 340B purchased
drugs acquisition costs and the inability to identify which drugs were
purchased through the 340B program within Medicare claims data was
another limitation.
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\20\ Medicare Payment Advisory Commission. March 2016 Report to
the Congress: Medicare Payment Policy. March 2016. Available at:
https://www.medpac.gov/docs/default-source/reports/chapter-3-hospital-inpatient-and-outpatient-services-march-2016-report-.pdf?sfvrsn=0.
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It is estimated that covered entities saved $3.8 billion on
outpatient drugs purchased through the 340B program in 2013.\21\ In
addition, the number of hospitals participating in the program has
grown from 583 in 2005 to 1,365 in 2010 and 2,140 in 2014 (MedPAC May
2015). Given the growth in the number of providers participating in the
340B program and recent trends in high and growing prices of several
separately payable drugs administered under Medicare Part B to hospital
outpatients, we believe it is timely to reexamine the appropriateness
of continuing to pay the current OPPS methodology of ASP+6 percent to
hospitals that have acquired those drugs under the 340B program at
significantly discounted rates. This is especially important because of
the inextricable link of the Medicare payment rate to the beneficiary
cost-sharing amount. In addition, we are concerned about the rising
prices of certain drugs and that Medicare beneficiaries, including low-
income seniors, are resonsible for paying 20 percent of the Medicare
payment rate for these drugs. We are concerned that the current payment
methodology may lead to unnecessary utilization and potential
overutilization of separately payable drugs.
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\21\ U.S. Department of Health and Human Services, HRSA FY 2015
Budget Justification, p. 342.
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b. Proposed OPPS Payment Rate for 340B Purchased Drugs
In this proposed rule, we are proposing changes to our current
Medicare Part B drug payment methodology for 340B hospitals that we
believe would better, and more appropriately, reflect the resources and
acquisition costs that these hospitals incur. Such changes would allow
Medicare beneficiaries (and the Medicare program) to pay less when
hospitals participating in the 340B program furnish drugs to Medicare
beneficiaries that are purchased under the 340B program.
Our goal is to make Medicare payment for separately payable drugs
more aligned with the resources expended by hospitals to acquire such
drugs while recognizing the intent of the 340B program to allow covered
entities, including eligible hospitals, to stretch scarce resources
while continuing to provide access to care. Medicare expenditures on
Part B drugs are rising due to underlying factors such as growth of the
340B program, higher price drugs, or price increases for drugs.\22\ We
believe that any payment changes we adopt should be limited to
separately payable drugs under the OPPS, with other additional
exclusions. These exclusions include (1) drugs on pass-through status,
which are required to be paid based on the ASP methodology and (2)
vaccines, which are excluded from the 340B program. Also, as stated
later in this section, we are soliciting comment on whether other types
of drugs, such as blood clotting factors, should also be excluded from
the reduced payment.
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\22\ Department of Health and Human Services. Office of the
Assistant Secretary for Planning and Evaluation. Issue Brief:
Medicare Part B Drugs: Pricing and Incentives. 2016. https://aspe.hhs.gov/system/files/pdf/187581/PartBDrug.pdf.
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Current data limitations inhibit identification of which drugs were
acquired under the 340B program in the Medicare OPPS claims data. This
lack of information within the claims data has limited researchers' and
our ability to precisely analyze differences in acquisition cost of
340B and non-340B-acquired drugs with Medicare claims data.
Accordingly, we intend to establish a modifier, to be effective January
1, 2018, for hospitals to report with separately payable drugs that
were not acquired under the 340B program. Because a significant portion
of hospitals paid under the OPPS participate in the 340B program, we
believe it is appropriate to presume that a separately payable drug
reported on an OPPS claim was purchased under the
[[Page 33634]]
340B program, unless the hospital identifies that the drug was not
purchased under the 340B program. We intend to provide further details
about this modifier in the CY 2018 OPPS/ASC final rule with comment
period and/or through subregulatory guidance, including guidance
related to billing for dually eligible beneficiaries (that is,
beneficiaries covered under Medicare and Medicaid) for whom covered
entities do not receive a discount under the 340B program.
Further, we note that the confidentiality of ceiling and subceiling
prices limits our ability to precisely calculate the price paid by 340B
hospitals for a particular covered outpatient drug. Accordingly, we
believe using an average discounted price is appropriate for our
proposal. Therefore, for CY 2018, we are proposing to apply an average
discount of 22.5 percent of the average sales price for nonpass-through
separately payable drugs purchased under the 340B program, as estimated
by MedPAC (MedPAC's May 2015 Report to Congress, page 7).
In the near-term, we believe that the estimated average minimum
discount MedPAC calculated--22.5 percent of the ASP--adequately
represents the average minimum discount that a 340B participating
hospital receives for separately payable drugs under the OPPS. Given
the limitations in calculating a precise discount for each separately
payable drug, we have not attempted to do so for this proposed rule.
Instead, we believe that using the analysis from the MedPAC report is
appropriate and note that the analysis is spelled out in detail and can
be replicated by interested parties. As MedPAC noted, its estimate was
conservative and the actual average discount experienced by 340B
hospitals is likely much higher than 22.5 percent. As GAO mentioned,
discounts under 340B range from 20 to 50 percent (GAO-11-836, page 2).
We believe that such reduced payment would meet the requirements under
section 1833(t)(14)(A)(iii)(II) the Act, which states that if hospital
acquisition cost data are not available, the payment for an applicable
drug shall be the average price for the drug in the year established
under section 1842(o), section 1847A, or section 1847B of the Act, as
the case may be, as calculated and adjusted by the Secretary as
necessary. We do not have hospital acquisition cost data for 340B drugs
and, therefore, are proposing to continue to pay for these drugs under
our authority at section 1833(t)(14)(A)(iii)(II) of the Act at ASP, and
then to adjust that amount by applying a reduction of 22.5 percent,
which, as explained throughout this section, is the adjustment we
believe is necessary for drugs acquired under the 340B program.
Specifically, in this CY 2018 OPPS/ASC proposed rule, we are
proposing to apply section 1833(t)(14)(A)(iii)(II) of the Act to all
separately payable drugs and biologicals, including SCODs. However, we
are proposing to exercise the Secretary's authority to adjust the
applicable payment rate as necessary and, for separately payable drugs
and biologicals (other than drugs on pass-through and vaccines)
acquired under the 340B program, are proposing to adjust the rate to
ASP minus 22.5 percent which we believe better represents the average
acquisition cost for these drugs and biologicals.
As indicated above, because ceiling prices are confidential, we are
unable to publicly disclose those prices or set payment rates in a way
that would allow the public to determine the ceiling price for a
particular drug. We believe that the MedPAC analysis that found the
average minimum discount of 22.5 percent of ASP adequately reflects the
average minimum discount that 340B hospitals paid under the OPPS
receive. Additionally, we believe that using an average discount to set
payment rates for separately payable drugs would achieve the dual goals
of (1) adjusting payments to better reflect resources expended to
acquire such drugs while (2) also protecting the confidential nature of
discounts applied to a specific drug. Moreover, we do not believe that
Medicare beneficiaries should be liable for a copayment rate that is
tied to the current methodology of ASP+6 percent when the actual cost
to the hospital to purchase the drug is much lower than the ASP for the
drug.
We note that MedPAC excluded vaccines from its analysis since
vaccines are not covered under 340B, but it did not exclude drugs on
pass-through status. Further, because data used to calculate ceiling
prices is not publicly available, MedPAC instead estimated ``the lower
bound of the average discount received by 340B hospitals for drugs paid
under the [OPPS]'' (MedPAC 2015, page 6). Accordingly, it is likely
that the average discount is higher, potentially significantly higher,
than the average minimum of 22.5 percent that MedPAC found through its
analysis. We encourage the public to analyze the analysis presented in
Appendix A of MedPAC's May 2015 Report to Congress.
As noted above, we believe that the discount amount of 22.5 percent
below the ASP reflects the average minimum discount that 340B hospitals
receive for drugs acquired under the 340B program, and it is likely
that the average discount may be higher due to participation in the
PVP, substitution of ASP (which includes additional rebates) for AMP,
and that drugs with pass-through status were included rather than
excluded from the MedPAC analysis. We believe that a payment rate of
ASP+6 percent does not sufficiently recognize the significantly lower
acquisition costs of such drugs incurred by a 340B hospital.
Accordingly, as noted above, we are proposing to reduce payment for
separately payable drugs, excluding drugs on pass-through status and
vaccines that were acquired under the 340B program, by 22.5 percent of
ASP for all drugs for which a hospital does not append on the claim the
modifier proposed above.
Finally, as detailed in the impact analysis section (section XIX.)
of this proposed rule, we also are proposing that the reduced payments
for separately payable drugs and biologicals purchased under the 340B
program are included in the budget neutrality adjustments, under the
requirements in section 1833(t)(9)(B) of the Act, and that the budget
neutral weight scalar is not applied in determining payments for these
separately paid drugs and biologicals purchased under the 340B program.
In that section, we also are soliciting public comments on whether we
should apply all or part of the savings generated by this payment
reduction to increase payments for specific services paid under the
OPPS, or under Part B generally, in CY 2018, rather than simply
increasing the conversion factor. In particular, we are seeking
comments on whether and how the offsetting increase could be targeted
to hospitals that treat a large share of indigent patients, especially
those patients who are uninsured. In addition, we are seeking comments
on whether the redistribution of savings associated with this proposal
would result in unnecessary increases in the volume of covered services
paid under the OPPS which should be adjusted in accordance with section
1833(t)(2)(F) of the Act. More information on the impact estimate
associated with this proposal is included in section XIX. of this
proposed rule.
c. Comment Solicitation on Additional 340B Considerations
As discussed above, we recognize there are data limitations in
estimating the average discount of 340B drugs. We welcome stakeholder
input with regard to MedPAC's May 2015 analysis and the resulting
estimate of ASP minus 22.5
[[Page 33635]]
percent as the proposed payment rate for separately payable, nonpass-
through OPPS drugs purchased under the 340B drug discount program in CY
2018. We also are requesting comment on whether we should adopt a
different payment rate to account for the average minimum discount of
OPPS drugs purchased under the 340B drug discount program. Also, we are
seeking comment on whether the proposal to pay ASP minus 22.5 percent
for 340B purchased drugs should be phased in over time (such as over a
period of 2 to 3 years).
In addition, we recognize that the acquisition costs for drugs may
vary among hospitals, depending on a number of factors such as size,
patient volume, labor market area and case-mix. Accordingly, in the
longer term, we are interested in exploring ways to identify the actual
acquisition costs that each hospital incurs rather than using an
average minimum discounted rate that would apply uniformly across all
340B hospitals. We are seeking public comment on whether, as a longer
term option, Medicare should require 340B hospitals to report their
acquisition costs in addition to charges for each drug on the Medicare
claim. Having the acquisition cost on a drug-specific basis would
enable us to pay a rate under the OPPS that is directly tied to the
acquisition costs for each separately payable drug. To the extent that
the acquisition costs for some drugs may equal the ceiling price for a
drug, we recognize that there may be challenges with keeping the
ceiling price confidential as required by section 1927(b)(3)(D) of the
Act and are seeking comment on this point.
Lastly, for consideration for future policy refinements, we are
seeking public comment on (1) whether, due to access to care issues,
exceptions should be granted to certain groups of hospitals, such as
those with special adjustments under the OPPS (for example, rural sole-
community hospitals or PPS-exempt cancer hospitals) if a policy were
adopted to adjust OPPS payments to 340B participating hospitals (if so,
describe how adjusted rates for drugs purchased under the 340B program
would disproportionately affect access in these provider settings); (2)
whether other types of drugs, such as blood clotting factors, should
also be excluded from the reduced payment; and (3) whether hospital-
owned or affiliated ASCs have access to 340B discounted drugs.
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Background
Section 1833(t)(6)(E) of the Act limits the total projected amount
of transitional pass-through payments for drugs, biologicals,
radiopharmaceuticals, and categories of devices for a given year to an
``applicable percentage,'' currently not to exceed 2.0 percent of total
program payments estimated to be made for all covered services under
the OPPS furnished for that year. If we estimate before the beginning
of the calendar year that the total amount of pass-through payments in
that year would exceed the applicable percentage, section
1833(t)(6)(E)(iii) of the Act requires a uniform prospective reduction
in the amount of each of the transitional pass-through payments made in
that year to ensure that the limit is not exceeded. We estimate the
pass-through spending to determine whether payments exceed the
applicable percentage and the appropriate prorata reduction to the
conversion factor for the projected level of pass-through spending in
the following year to ensure that total estimated pass-through spending
for the prospective payment year is budget neutral, as required by
section 1833(t)(6)(E) of the Act.
For devices, developing a proposed estimate of pass-through
spending in CY 2018 entails estimating spending for two groups of
items. The first group of items consists of device categories that are
currently eligible for pass-through payment and that will continue to
be eligible for pass-through payment in CY 2018. The CY 2008 OPPS/ASC
final rule with comment period (72 FR 66778) describes the methodology
we have used in previous years to develop the pass-through spending
estimate for known device categories continuing into the applicable
update year. The second group of items consists of items that we know
are newly eligible, or project may be newly eligible, for device pass-
through payment in the remaining quarters of CY 2017 or beginning in CY
2018. The sum of the proposed CY 2018 pass-through spending estimates
for these two groups of device categories equals the proposed total CY
2018 pass-through spending estimate for device categories with pass-
through payment status. We base the device pass-through estimated
payments for each device category on the amount of payment as
established in section 1833(t)(6)(D)(ii) of the Act, and as outlined in
previous rules, including the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75034 through 75036). We note that, beginning in CY 2010,
the pass-through evaluation process and pass-through payment for
implantable biologicals newly approved for pass-through payment
beginning on or after January 1, 2010, that are surgically inserted or
implanted (through a surgical incision or a natural orifice) use the
device pass-through process and payment methodology (74 FR 60476). As
has been our past practice (76 FR 74335), in this proposed rule, we are
proposing to include an estimate of any implantable biologicals
eligible for pass-through payment in our estimate of pass-through
spending for devices. Similarly, we finalized a policy in CY 2015 that
applications for pass-through payment for skin substitutes and similar
products be evaluated using the medical device pass-through process and
payment methodology (76 FR 66885 through 66888). Therefore, as we did
beginning in CY 2015, for CY 2018, we also are proposing to include an
estimate of any skin substitutes and similar products in our estimate
of pass-through spending for devices.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. Because we are proposing to pay for most nonpass-through
separately payable drugs and biologicals under the CY 2018 OPPS at
ASP+6 percent, and because we are proposing to pay for CY 2018 pass-
through drugs and biologicals at ASP+6 percent, as we discussed in
section V.A. of this proposed rule, our estimate of drug and biological
pass-through payment for CY 2018 for this group of items is $0, as
discussed below. We note that our estimate does not reflect the
proposed payment policy for drugs purchased through the 340B program,
as we discuss in section V.B.7. of this proposed rule.
Furthermore, payment for certain drugs, specifically diagnostic
radiopharmaceuticals and contrast
[[Page 33636]]
agents without pass-through payment status, is packaged into payment
for the associated procedures, and these products will not be
separately paid. In addition, we policy-package all nonpass-through
drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure and drugs and biologicals
that function as supplies when used in a surgical procedure, as
discussed in section II.A.3. of this proposed rule. We are proposing
that all of these policy-packaged drugs and biologicals with pass-
through payment status would be paid at ASP+6 percent, like other pass-
through drugs and biologicals, for CY 2018. Therefore, our estimate of
pass-through payment for policy-packaged drugs and biologicals with
pass-through payment status approved prior to CY 2018 is not $0, as
discussed below. In section V.A.5. of this proposed rule, we discuss
our policy to determine if the costs of certain policy-packaged drugs
or biologicals are already packaged into the existing APC structure. If
we determine that a policy-packaged drug or biological approved for
pass-through payment resembles predecessor drugs or biologicals already
included in the costs of the APCs that are associated with the drug
receiving pass-through payment, we are proposing to offset the amount
of pass-through payment for the policy-packaged drug or biological. For
these drugs or biologicals, the APC offset amount is the portion of the
APC payment for the specific procedure performed with the pass-through
drug or biological, which we refer to as the policy-packaged drug APC
offset amount. If we determine that an offset is appropriate for a
specific policy-packaged drug or biological receiving pass-through
payment, we are proposing to reduce our estimate of pass-through
payments for these drugs or biologicals by this amount.
Similar to pass-through estimates for devices, the first group of
drugs and biologicals requiring a pass-through payment estimate
consists of those products that were recently made eligible for pass-
through payment and that will continue to be eligible for pass-through
payment in CY 2018. The second group contains drugs and biologicals
that we know are newly eligible, or project will be newly eligible in
the remaining quarters of CY 2017 or beginning in CY 2018. The sum of
the CY 2018 pass-through spending estimates for these two groups of
drugs and biologicals equals the total CY 2018 pass-through spending
estimate for drugs and biologicals with pass-through payment status.
B. Estimate of Pass-Through Spending
We are proposing to set the applicable pass-through payment
percentage limit at 2.0 percent of the total projected OPPS payments
for CY 2018, consistent with section 1833(t)(6)(E)(ii)(II) of the Act
and our OPPS policy from CY 2004 through CY 2017 (81 FR 79676 through
79678).
For the first group, consisting of device categories that are
currently eligible for pass-through payment and will continue to be
eligible for pass-through payment in CY 2018, there are no active
categories for CY 2018. Because there are no device active categories
for CY 2018, we are proposing an estimate for the first group of
devices of $0.
In estimating our proposed CY 2018 pass-through spending for device
categories in the second group, we included: Device categories that we
knew at the time of the development of the proposed rule will be newly
eligible for pass-through payment in CY 2018; additional device
categories that we estimated could be approved for pass-through status
subsequent to the development of the proposed rule and before January
1, 2018; and contingent projections for new device categories
established in the second through fourth quarters of CY 2018. We are
proposing to use the general methodology described in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66778), while also taking
into account recent OPPS experience in approving new pass-through
device categories. For this proposed rule, the proposed estimate of CY
2018 pass-through spending for this second group of device categories
is $10 million.
To estimate proposed CY 2018 pass-through spending for drugs and
biologicals in the first group, specifically those drugs and
biologicals recently made eligible for pass-through payment and
continuing on pass-through payment status for CY 2018, we are proposing
to use the most recent Medicare hospital outpatient claims data
regarding their utilization, information provided in the respective
pass-through applications, historical hospital claims data,
pharmaceutical industry information, and clinical information regarding
those drugs or biologicals to project the CY 2018 OPPS utilization of
the products.
For the known drugs and biologicals (excluding policy-packaged
diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals,
and radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure, and drugs and biologicals that function
as supplies when used in a surgical procedure) that will be continuing
on pass-through payment status in CY 2018, we estimated the pass-
through payment amount as the difference between ASP+6 percent and the
payment rate for nonpass-through drugs and biologicals that will be
separately paid at ASP+6 percent, which is zero for this group of
drugs. Because payment for policy-packaged drugs and biologicals is
packaged if the product was not paid separately due to its pass-through
payment status, we are proposing to include in the CY 2018 pass-through
estimate the difference between payment for the policy-packaged drug or
biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP, if
ASP or WAC information is not available) and the policy-packaged drug
APC offset amount, if we determine that the policy-packaged drug or
biological approved for pass-through payment resembles a predecessor
drug or biological already included in the costs of the APCs that are
associated with the drug receiving pass-through payment. For this
proposed rule, using the proposed methodology described above, we
calculated a CY 2018 proposed spending estimate for this first group of
drugs and biologicals of approximately $7.7 million.
To estimate proposed CY 2018 pass-through spending for drugs and
biologicals in the second group (that is, drugs and biologicals that we
knew at the time of development of this proposed rule were newly
eligible for pass-through payment in CY 2018, additional drugs and
biologicals that we estimated could be approved for pass-through status
subsequent to the development of the proposed rule and before January
1, 2017, and projections for new drugs and biologicals that could be
initially eligible for pass-through payment in the second through
fourth quarters of CY 2018), we are proposing to use utilization
estimates from pass-through applicants, pharmaceutical industry data,
clinical information, recent trends in the per unit ASPs of hospital
outpatient drugs, and projected annual changes in service volume and
intensity as our basis for making the CY 2018 pass-through payment
estimate. We also are proposing to consider the most recent OPPS
experience in approving new pass-through drugs and biologicals. Using
our proposed methodology for estimating CY 2018 pass-through payments
for this second group of drugs, we calculated a proposed spending
estimate for this
[[Page 33637]]
second group of drugs and biologicals of approximately $8.5 million.
In summary, in accordance with the methodology described earlier in
this section, for this proposed rule, we estimate that total pass-
through spending for the device categories and the drugs and
biologicals that are continuing to receive pass-through payment in CY
2018 and those device categories, drugs, and biologicals that first
become eligible for pass-through payment during CY 2018 is
approximately $26.2 million (approximately $10 million for device
categories and approximately $16.2 million for drugs and biologicals),
which represents 0.24 percent of total projected OPPS payments for CY
2018. Therefore, we estimate that pass-through spending in CY 2018 will
not amount to 2.0 percent of total projected OPPS CY 2018 program
spending.
VII. Proposed OPPS Payment for Hospital Outpatient Visits and Critical
Care Services
As we did in the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79678), for CY 2018, we are proposing to continue with and not
make any changes to our current clinic and emergency department (ED)
hospital outpatient visits payment policies. For a description of the
current clinic and ED hospital outpatient visits policies, we refer
readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR
70448). We also are proposing to continue with and not propose any
change to our payment policy for critical care services for CY 2018.
For a description of the current payment policy for critical care
services, we refer readers to the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70449), and for the history of the payment policy
for critical care services, we refer readers to the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75043). In this proposed rule, we
are seeking public comments on any changes to these codes that we
should consider for future rulemaking cycles. We encourage those
parties who comment to provide the data and analysis necessary to
justify any suggested changes.
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
A partial hospitalization program (PHP) is an intensive outpatient
program of psychiatric services provided as an alternative to inpatient
psychiatric care for individuals who have an acute mental illness,
which includes, but is not limited to, conditions such as depression,
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the
Act defines partial hospitalization services as the items and services
described in paragraph (2) prescribed by a physician and provided under
a program described in paragraph (3) under the supervision of a
physician pursuant to an individualized, written plan of treatment
established and periodically reviewed by a physician (in consultation
with appropriate staff participating in such program), which sets forth
the physician's diagnosis, the type, amount, frequency, and duration of
the items and services provided under the plan, and the goals for
treatment under the plan. Section 1861(ff)(2) of the Act describes the
items and services included in partial hospitalization services.
Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program
furnished by a hospital to its outpatients or by a community mental
health center (CMHC), as a distinct and organized intensive ambulatory
treatment service, offering less than 24-hour-daily care, in a location
other than an individual's home or inpatient or residential setting.
Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this
benefit.
Section 1833(t)(1)(B)(i) of the Act provides the Secretary with the
authority to designate the OPD services to be covered under the OPPS.
The Medicare regulations that implement this provision specify, at 42
CFR 419.21, that payments under the OPPS will be made for partial
hospitalization services furnished by CMHCs as well as Medicare Part B
services furnished to hospital outpatients designated by the Secretary,
which include partial hospitalization services (65 FR 18444 through
18445).
Section 1833(t)(2)(C) of the Act requires the Secretary to
establish relative payment weights for covered OPD services (and any
groups of such services described in section 1833(t)(2)(B) of the Act)
based on median (or, at the election of the Secretary, mean) hospital
costs using data on claims from 1996 and data from the most recent
available cost reports. In pertinent part, section 1833(t)(2)(B) of the
Act provides that the Secretary may establish groups of covered OPD
services, within a classification system developed by the Secretary for
covered OPD services, so that services classified within each group are
comparable clinically and with respect to the use of resources. In
accordance with these provisions, we have developed the PHP APCs.
Because a day of care is the unit that defines the structure and
scheduling of partial hospitalization services, we established a per
diem payment methodology for the PHP APCs, effective for services
furnished on or after July 1, 2000 (65 FR 18452 through 18455). Under
this methodology, the median per diem costs were used to calculate the
relative payment weights for the PHP APCs. Section 1833(t)(9)(A) of the
Act requires the Secretary to review, not less often than annually, and
revise the groups, the relative payment weights, and the wage and other
adjustments described in section 1833(t)(2) of the Act to take into
account changes in medical practice, changes in technology, the
addition of new services, new cost data, and other relevant information
and factors.
We began efforts to strengthen the PHP benefit through extensive
data analysis, along with policy and payment changes finalized in the
CY 2008 OPPS/ASC final rule with comment period (72 FR 66670 through
66676). In that final rule, we made two refinements to the methodology
for computing the PHP median: The first remapped 10 revenue codes that
are common among hospital-based PHP claims to the most appropriate cost
centers; and the second refined our methodology for computing the PHP
median per diem cost by computing a separate per diem cost for each day
rather than for each bill.
In CY 2009, we implemented several regulatory, policy, and payment
changes, including a two-tiered payment approach for partial
hospitalization services under which we paid one amount for days with 3
services under PHP APC 0172 (Level 1 Partial Hospitalization) and a
higher amount for days with 4 or more services under PHP APC 0173
(Level 2 Partial Hospitalization) (73 FR 68688 through 68693). We also
finalized our policy to deny payment for any PHP claims submitted for
days when fewer than 3 units of therapeutic services are provided (73
FR 68694). Furthermore, for CY 2009, we revised the regulations at 42
CFR 410.43 to codify existing basic PHP patient eligibility criteria
and to add a reference to current physician certification requirements
under 42 CFR 424.24 to conform our regulations to our longstanding
policy (73 FR 68694 through 68695). We also revised the partial
hospitalization benefit to include several coding updates (73 FR 68695
through 68697).
For CY 2010, we retained the two-tiered payment approach for
partial hospitalization services and used only hospital-based PHP data
in computing the PHP APC per diem costs, upon
[[Page 33638]]
which PHP APC per diem payment rates are based. We used only hospital-
based PHP data because we were concerned about further reducing both
PHP APC per diem payment rates without knowing the impact of the policy
and payment changes we made in CY 2009. Because of the 2-year lag
between data collection and rulemaking, the changes we made in CY 2009
were reflected for the first time in the claims data that we used to
determine payment rates for the CY 2011 rulemaking (74 FR 60556 through
60559).
In the CY 2011 OPPS/ASC final rule with comment period (75 FR
71994), we established four separate PHP APC per diem payment rates:
Two for CMHCs (APC 0172 (for Level 1 services) and APC 0173 (for Level
2 services)) and two for hospital-based PHPs (APC 0175 (for Level 1
services) and 0176 (for Level 2 services)), based on each provider
type's own unique data. For CY 2011, we also instituted a 2-year
transition period for CMHCs to the CMHC APC per diem payment rates
based solely on CMHC data. Under the transition methodology, CMHC APCs
Level 1 and Level 2 per diem costs were calculated by taking 50 percent
of the difference between the CY 2010 final hospital-based PHP median
costs and the CY 2011 final CMHC median costs and then adding that
number to the CY 2011 final CMHC median costs. A 2-year transition
under this methodology moved us in the direction of our goal, which is
to pay appropriately for partial hospitalization services based on each
provider type's data, while at the same time allowing providers time to
adjust their business operations and protect access to care for
Medicare beneficiaries. We also stated that we would review and analyze
the data during the CY 2012 rulemaking cycle and, based on these
analyses, we might further refine the payment mechanism. We refer
readers to section X.B. of the CY 2011 OPPS/ASC final rule with comment
period (75 FR 71991 through 71994) for a full discussion.
In addition, in accordance with section 1301(b) of the Health Care
and Education Reconciliation Act of 2010 (HCERA 2010), we amended the
description of a PHP in our regulations to specify that a PHP must be a
distinct and organized intensive ambulatory treatment program offering
less than 24-hour daily care other than in an individual's home or in
an inpatient or residential setting. In accordance with section 1301(a)
of HCERA 2010, we revised the definition of a CMHC in the regulations
to conform to the revised definition now set forth under section
1861(ff)(3)(B) of the Act (75 FR 71990).
For CY 2012, as discussed in the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74348 through 74352), we determined the relative
payment weights for partial hospitalization services provided by CMHCs
based on data derived solely from CMHCs and the relative payment
weights for partial hospitalization services provided by hospital-based
PHPs based exclusively on hospital data.
In the CY 2013 OPPS/ASC final rule with comment period, we
finalized our proposal to base the relative payment weights that
underpin the OPPS APCs, including the four PHP APCs (APCs 0172, 0173,
0175, and 0176), on geometric mean costs rather than on the median
costs. We established these four PHP APC per diem payment rates based
on geometric mean cost levels calculated using the most recent claims
and cost data for each provider type. For a detailed discussion on this
policy, we refer readers to the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68406 through 68412).
In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622),
we solicited comments on possible future initiatives that may help to
ensure the long-term stability of PHPs and further improve the accuracy
of payment for PHP services, but proposed no changes. In the CY 2014
OPPS/ASC final rule with comment period (78 FR 75050 through 75053), we
summarized the comments received on those possible future initiatives.
We also continued to apply our established policies to calculate the
four PHP APC per diem payment rates based on geometric mean per diem
costs using the most recent claims data for each provider type. For a
detailed discussion on this policy, we refer readers to the CY 2014
OPPS/ASC final rule with comment period (78 FR 75047 through 75050).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66902
through 66908), we continued to apply our established policies to
calculate the four PHP APC per diem payment rates based on PHP APC
geometric mean per diem costs, using the most recent claims and cost
data for each provider type.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70455
through 70465), we described our extensive analysis of the claims and
cost data and ratesetting methodology. We found aberrant data from some
hospital-based PHP providers that were not captured using the existing
OPPS 3 standard deviation trims for extreme CCRs and
excessive CMHC charges resulting in CMHC geometric mean costs per day
that were approximately the same as or more than the daily payment for
inpatient psychiatric facility services. Consequently, we implemented a
trim to remove hospital-based PHP service days that use a CCR that was
greater than 5 (CCR>5) to calculate costs for at least one of their
component services, and a trim on CMHCs with a geometric mean cost per
day that is above or below 2 (2) standard deviations from
the mean. We stated in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70456) that, without using a trimming process, the data
from these providers would inappropriately skew the geometric mean per
diem cost for Level 2 CMHC services.
In addition, in the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70459 through 70460), we corrected a cost inversion that
occurred in the final rule data with respect to hospital-based PHP
providers. We corrected the cost inversion with an equitable adjustment
to the actual geometric mean per diem costs by increasing the Level 2
hospital-based PHP APC geometric mean per diem costs and decreasing the
Level 1 hospital-based PHP APC geometric mean per diem costs by the
same factor, to result in a percentage difference equal to the average
percent difference between the hospital-based Level 1 PHP APC and the
Level 2 PHP APC for partial hospitalization services from CY 2013
through CY 2015.
Finally, we renumbered the PHP APCs, which were previously 0172,
0173, 0175, and 0176, to 5851, 5852, 5861, and 5862, respectively. For
a detailed discussion of the PHP ratesetting process, we refer readers
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70462
through 70467).
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79687
through 79691), we continued to apply our established policies to
calculate the PHP APC per diem payment rates based on geometric mean
per diem costs using the most recent claims and cost data for each
provider type. However, we finalized a policy to combine the Level 1
and Level 2 PHP APCs for CMHCs and to combine the Level 1 and Level 2
APCs for hospital-based PHPs because we believed this would best
reflect actual geometric mean per diem costs going forward, provide
more predictable per diem costs, particularly given the small number of
CMHCs, and generate more appropriate payments for these services, for
example by avoiding the cost inversions for hospital-based PHPs
addressed in the CY 2016 and CY 2017 OPPS/ASC final rules with comment
period (80 FR 70459 and 81 FR 79682).
[[Page 33639]]
We implemented an 8-percent outlier cap for CMHCs to mitigate potential
outlier billing vulnerabilities by limiting the impact of inflated CMHC
charges on outlier payments. We will continue to monitor the trends in
outlier payments and consider policy adjustments as necessary.
For a comprehensive description on the background of PHP payment
policy, we refer readers to the CY 2016 and CY 2017 OPPS/ASC final
rules with comment period (80 FR 70453 through 70455 and 81 FR 79678
through 79680).
B. Proposed PHP APC Update for CY 2018
1. Proposed PHP APC Geometric Mean Per Diem Costs
For CY 2018, we are proposing to continue to apply our established
policies to calculate the PHP APC per diem payment rates based on
geometric mean per diem costs using the most recent claims and cost
data for each provider type. Specifically, we are proposing to continue
to use CMHC APC 5853 (Partial Hospitalization (3 or More Services Per
Day)) and hospital-based PHP APC 5863 (Partial Hospitalization (3 or
More Services Per Day)). We would continue to calculate the geometric
mean per diem costs for CY 2018 for APC 5853 for CMHCs using only CY
2016 CMHC claims data and the most recent CMHC cost data, and the CY
2018 geometric mean per diem costs for APC 5863 for hospital-based PHPs
using only CY 2016 hospital-based PHP claims data and the most recent
hospital cost data.
2. Development of the Proposed PHP APC Geometric Mean Per Diem Costs
For CY 2018 and subsequent years, we are proposing to follow the
PHP ratesetting methodology described in section VIII.B.2. of the CY
2016 OPPS/ASC final rule with comment period (80 FR 70462 through
70466) to determine the PHP APCs' proposed geometric mean per diem
costs and to calculate the proposed payment rates for APCs 5853 and
5863, incorporating the modifications made in our CY 2017 OPPS/ASC
final rule with comment period. As discussed in section VIII.B.1. of
the CY 2017 OPPS/ASC final rule with comment period, the proposed
geometric mean per diem cost for hospital-based PHP APC 5863 would be
based upon actual hospital-based PHP claims and costs for PHP service
days providing 3 or more services. Similarly, the proposed geometric
mean per diem cost for CMHC APC 5853 would be based upon actual CMHC
claims and costs for CMHC service days providing 3 or more services.
The CMHC or hospital-based PHP APC per diem costs are the provider-
type specific costs derived from the most recent claims and cost data.
The CMHC or hospital-based PHP APC per diem payment rates are the
national unadjusted payment rates calculated from the CMHC or hospital-
based PHP APC per diem costs, after applying the OPPS budget neutrality
adjustments described in section II.A.4. of this proposed rule.
We are proposing to apply our established methodologies in
developing the proposed geometric mean per diem costs and payment
rates, including the application of a 2 standard deviation
trim on costs per day for CMHCs and a CCR>5 hospital service day trim
for hospital-based PHP providers. These two trims were finalized in our
CY 2016 OPPS/ASC final rule with comment period (80 FR 70455 through
70462) for CY 2016 and subsequent years.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
For this proposed rule, prior to calculating the proposed geometric
mean per diem cost for CMHC APC 5853, we prepared the data by first
applying trims and data exclusions, and assessing CCRs as described in
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70463
through 70465), so that ratesetting is not skewed by providers with
extreme data. Before any trims or exclusions, there were 47 CMHCs in
the data. Under the 2 standard deviation trim policy, we
excluded any data from a CMHC for ratesetting purposes when the CMHC's
geometric mean cost per day is more than 2 standard
deviations from the geometric mean cost per day for all CMHCs. By
applying this trim for CY 2018 ratesetting, in this proposed rule, 4
CMHCs with geometric mean per diem costs per day below the trim's lower
limit of $49.33 and 2 CMHCs above the trim's upper limit of $361.02
were excluded from the proposed ratesetting for CY 2018. This standard
deviation trim removed 6 providers from ratesetting whose data would
have skewed the calculated proposed geometric mean per diem cost.
In accordance with our PHP ratesetting methodology, in this
proposed rule, we also removed service days with no wage index values
because we use the wage index data to remove the effects of geographic
variation in costs prior to APC geometric mean per diem cost
calculation (80 FR 70465). In this CY 2018 proposed rule ratesetting,
two CMHCs were excluded because they were missing wage index data for
all of their service days.
In addition to our trims and data exclusions, before determining
the PHP APC geometric mean per diem costs, we also assess CCRs (80 FR
70463). Our longstanding PHP OPPS ratesetting methodology defaults any
CMHC CCR>1 to the statewide hospital ancillary CCR (80 FR 70457). In
our CY 2018 proposed rule ratesetting, we identified one CMHC that had
a CCR>1. This CMHC's CCR was 1.002, and it was defaulted to its
appropriate statewide hospital ancillary CCR for CY 2018 ratesetting
purposes.
In summary, these data preparation steps adjusted the CCR for 1
CMHC and excluded 8 CMHCs, resulting in the inclusion of a total of 39
CMHCs in our CY 2018 proposed rule ratesetting modeling. The trims
removed 1,733 CMHC claims from the 14,400 total CMHC claims, resulting
in 12,667 CMHC claims used in ratesetting. We believe that excluding
providers with extremely low or high geometric mean costs per day or
extremely low or high CCRs protects CMHCs from having that data
inappropriately skew the calculation of the CMHC APC geometric mean per
diem cost. Moreover, we believe that these trims, exclusions, and
adjustments help prevent inappropriate fluctuations in the PHP APC
geometric mean per diem payment rates.
After applying all of the above trims, exclusions, or adjustments,
the proposed CY 2018 geometric mean per diem cost for all CMHCs for
providing 3 or more services per day (APC 5853) is $128.81.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
For this CY 2018 proposed rule, we followed a data preparation
process for hospital-based PHP providers that is similar to that used
for CMHCs by applying trims and data exclusions as described in the CY
2016 OPPS/ASC final rule with comment period (80 FR 70463 through
70465) so that our ratesetting is not skewed by providers with extreme
data. Before any trimming or exclusions, in this proposed rule there
were 420 hospital-based PHP providers in the claims data. For hospital-
based PHP providers, we applied a trim on hospital service days when
the CCR was greater than 5 at the cost center level. The CCR>5 hospital
service day trim removed hospital-based PHP service days that use a
CCR>5 to calculate costs for at least one of their component services.
Unlike the 2 standard deviation trim, which excluded CMHC
providers that failed
[[Page 33640]]
the trim, the CCR>5 trim excluded any hospital-based PHP service day
where any of the services provided on that day are associated with a
CCR>5. Applying this trim removed service days from 4 hospital-based
PHP providers with CCRs ranging from 6.6494 to 17.4803 from our
proposed rule ratesetting. However, all of the service days for these 4
hospital-based PHP providers had at least one service associated with a
CCR>5, so the trim removed these providers entirely from our proposed
rule ratesetting. In addition, 1 hospital-based PHP was removed for
missing wage index data, and 3 hospital-based PHPs were removed by the
OPPS 3 standard deviation trim on costs per day.
Finally, in our proposed rule ratesetting, we excluded 19 hospital-
based PHP providers that reported zero daily costs on their claims, in
accordance with established PHP ratesetting policy (80 FR 70465).
Therefore, we excluded a total of 27 hospital-based PHP providers,
resulting in 393 hospital-based PHP providers in the data used for
proposed rule ratesetting. After completing these data preparation
steps, we calculated the proposed geometric mean per diem cost for
hospital-based PHP APC 5863 for hospital-based PHP services. The
proposed geometric mean per diem cost for hospital-based PHP providers
that provide 3 or more services per service day (hospital-based PHP APC
5863) is $213.60.
The proposed CY 2018 PHP APC geometric mean per diem costs for the
CMHC and hospital-based PHP APCs are shown in Table 26 of this proposed
rule. The proposed PHP APC payment rates are included in Addendum A to
this proposed rule (which is available via the Internet on the CMS Web
site).
Table 26--CY 2018 Proposed PHP APC Geometric Mean Per Diem Costs
------------------------------------------------------------------------
Proposed PHP
APC geometric
CY 2018 APC Group title mean per diem
costs
------------------------------------------------------------------------
5853........................... Partial Hospitalization $128.81
(3 or more services
per day) for CMHCs.
5863........................... Partial Hospitalization 213.60
(3 or more services
per day) for hospital-
based PHPs.
------------------------------------------------------------------------
3. PHP Service Utilization Updates
In the CY 2016 OPPS/ASC final rule with comment, we expressed
concern over the low frequency of individual therapy provided to
beneficiaries (81 FR 79684 through 79685). The CY 2016 claims data used
for this CY 2018 proposed rule revealed some increases in the provision
of individual therapy. In CY 2016, hospital-based PHPs provided
individual therapy on 4.7 percent of days with only 3 services and 5.6
percent of days with 4 or more services (compared to 4.0 percent and
6.2 percent, respectively, in CY 2015). Similarly, in CY 2016, CMHCs
provided individual therapy on 9.0 percent of days with only 3 services
provided and 4.9 percent of days with 4 or more services provided
(compared to 7.9 percent and 4.4 percent, respectively, in CY 2015
claims).
We are aware that our single-tier payment policy may influence a
change in service provision because providers are able to obtain
payment that is heavily weighted to the cost of providing 4 or more
services when they provide only 3 services. We are interested in
ensuring that providers furnish an appropriate number of services to
beneficiaries enrolled in PHPs. Therefore, with the CY 2017
implementation of APC 5853 and APC 5863 for providing 3 or more PHP
services per day, we are continuing to monitor utilization of days with
only 3 PHP services.
For this CY 2018 proposed rule, we used CY 2016 claims. The CY 2016
claims data showed that PHPs maintained an appropriately low
utilization of 3 service days compared to CY 2015:
Table 27--Percentage of PHP Days by Service Unit Frequency
----------------------------------------------------------------------------------------------------------------
CY 2015 % CY 2016 % Change %
--------------------------------------------------------------------------------------------------
CMHCs:
Percent of Days with 3 services............... 4.7 4.1 -0.6
Percent of Days with 4 services............... 62.9 72.6 9.7
Percent of Days with 5 or more services....... 32.4 23.3 -9.1
Hospital-based PHPs:
Percent of Days with 3 services............... 12.4 10.2 -2.2
Percent of Days with 4 services............... 69.8 67.5 -2.3
Percent of Days with 5 or more services....... 17.8 22.3 4.5
----------------------------------------------------------------------------------------------------------------
As we noted in the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79685), we will continue to monitor the provision of days with
only 3 services, particularly now that the combined PHP APCs 5853 and
5863 are in place for providing 3 or more services per day to CMHCs and
hospital-based PHPs, respectively.
It is important to reiterate our expectation that days with only 3
services are meant to be an exception and not the typical PHP day. In
the CY 2009 OPPS/ASC final rule we clearly stated that we consider the
acceptable minimum units of PHP services required in a PHP day to be 3
and explained that it was never our intention that 3 units of service
represent the number of services to be provided in a typical PHP day.
PHP is furnished in lieu of inpatient psychiatric hospitalization and
is intended to be more intensive than a half-day program. We further
indicated that a typical PHP day should include 5 to 6 hours of
services (73 FR 68687 through 68694). We explained that days with only
3 units of services may be appropriate to bill in certain
[[Page 33641]]
limited circumstances, such as when a patient might need to leave early
for a medical appointment and, therefore, would be unable to complete a
full day of PHP treatment. At that time, we noted that if a PHP were to
only provide days with 3 services, it would be difficult for patients
to meet the eligibility requirement in 42 CFR 410.43, that patients
must require a minimum of 20 hours per week of therapeutic services as
evidenced in their plan of care (73 FR 68689).
4. Minimum Service Requirement: 20 Hours per Week
In the CY 2009 OPPS/ASC final rule with comment period, we codified
patient eligibility criteria to reflect the intensive nature of a PHP.
At that time, we noted that many of the patient eligibility criteria
had been longstanding policy requirements that did not reflect a change
in policy. The added regulatory text was intended to strengthen and
enhance the integrity of the PHP benefit (73 FR 68694). We further
stated that because PHP is provided in lieu of inpatient care, it
should be a highly structured and clinically intensive program. Our
goal was to improve the level of service furnished in a day of PHP,
while also ensuring that the appropriate population utilizes the PHP
benefit (73 FR 68695).
When we codified these eligibility criteria, we acknowledged
commenters' concerns related to the eligibility requirement that a
patient must require a minimum of 20 hours per week of therapeutic
services as evidenced in their plan of care. For example, we recognized
commenters' concerns that it may sometimes be difficult for patients to
receive 20 hours per week of therapeutic services, such as when
transitioning into or out of a PHP program (73 FR 68695). Therefore, to
permit flexibility in treating PHP patients, we required a minimum of
20 hours per week of therapeutic services, with the understanding that
patients may not always meet this minimum, such as during the week of
admission and the week of discharge, and qualified the requirement by
adding ``as evidenced in their plan of care.'' This eligibility
requirement only addresses the minimum amount of PHP services
beneficiaries must require as evidenced in their plan of care. It does
not address whether or not beneficiaries receive a particular number of
therapeutic services per week. However, we have noted in multiple prior
OPPS/ASC final rules with comment periods that a typical PHP day would
include 5 to 6 hours per day of PHP services (70 FR 68548, 71 FR 67999,
72 FR 66671, and 73 FR 68687).
Most recently, we discussed the 20 hours of services requirement in
the CY 2017 rulemaking when we reminded providers that our regulations
at Sec. Sec. 410.43(a)(3) and (c)(1) continue to require that PHP
beneficiaries must require a minimum of 20 hours per week of
therapeutic services as evidenced in their plan of care, and that PHP
services must be furnished in accordance with a physician certification
and the beneficiary's plan of care reflecting that need.
We analyzed CY 2015 and CY 2016 PHP claims data to assess the
intensity of PHP services provided, using PHP-allowable HCPCS codes and
provider and service date information. To calculate the number of hours
of PHP services provided to each beneficiary each day, we assumed each
unit of service equaled one hour of time. Each service day was then
mapped to its Sunday-through-Saturday calendar week, and the number of
PHP hours per week was calculated for each beneficiary. Next, the
service weeks for each beneficiary were sorted chronologically and
assessed: The first service week in a continuous series of service
weeks was flagged as an ``Admission'' week, and the last service week
in a continuous series of service weeks was flagged as a ``Discharge''
week. We removed from the analysis the admission and discharge weeks
for each beneficiary to permit us to assess the intensity of services
provided to beneficiaries fully engaged in PHPs (that is, those in
``nontransitional'' weeks). We then calculated the total number of
service weeks and the number of service weeks with at least 20 PHP
hours for each beneficiary. These two values were then used to
determine the percentage of nontransitional service weeks that met the
20-hour PHP threshold for each beneficiary.
We found that a majority of PHP patients did not receive at least
20 hours of PHP services per week. Just over half of PHP beneficiaries
received 20 hours or more of services in 50 percent or more of
nontransitional weeks. In CY 2016 claims data, only 16.4 percent of
beneficiaries in CMHCs and 34.8 percent of beneficiaries in hospital-
based PHPs received at least 20 hours of PHP services in 100 percent of
nontransitional weeks.
Table 28--Number and Percentage of Beneficiaries Receiving at Least 20 Hours of PHP Services per Week
[CY 2015 Through CY 2016]
----------------------------------------------------------------------------------------------------------------
Beneficiaries receiving 20 or
more hours of PHP services per CY 2015 (%) CY 2016 (%)
nontransitional week *
----------------------------------------------------------------------------------------------------------------
Number/Percentage of CMHC Beneficiaries....... In 50% or more of weeks......... 1,205/53.1 1,016/57.3
In 100% of weeks................ 319/14.1 291/16.4
Number/Percentage of Hospital-based PHP In 50% or more of weeks......... 8,610/51.0 8,333/56.7
Beneficiaries. In 100% of weeks................ 5,003/29.6 5,115/34.8
----------------------------------------------------------------------------------------------------------------
* Weeks are trimmed to exclude admission and discharge weeks based on a Sunday through Saturday week.
Nontransitional weeks are weeks that are not admission or discharge weeks.
Overall, the data suggest that some PHPs may not provide the
intensive services that eligible beneficiaries actually need. We are
concerned about these findings, and encourage PHPs to review their
admission practices and ensure they are providing the services
beneficiaries need.
Given these concerns, in the CY 2017 OPPS/ASC final rule with
comment period, we solicited public comments on potential future
editing of PHP claims for the 20 hours per week minimum eligibility
requirement and on strengthening the tie between a beneficiary's
receipt of 20 hours per week of PHP services and payment for those
services (81 FR 79686). We received nine comments in response to our
solicitation. Overall, commenters requested that we monitor data for a
year before implementing any payment edits. A number of commenters
suggested that if CMS chose to edit PHP claims for the 20-hour minimum
requirement, CMS should: (1) Provide exceptions to the editing; (2) not
require weekly billing; and (3) implement the edits in a fashion that
is not administratively burdensome.
[[Page 33642]]
A number of commenters were not supportive of editing that would
lead to payment denial. A few commenters indicated that attending a PHP
for 20 hours per week is not a condition of payment. Several commenters
suggested that editing would be premature until CMS could analyze
monitoring data, consider the effect of the newly implemented single
APC payment tier, and seek engagement from the PHP provider community.
Some commenters also noted that the current PHP HCPCS codes may require
some refinement to fully enable providers to record service times.
Several commenters expressed concerns that edits to deny payment
for weeks with fewer than 20 hours of PHP services could reduce access
to the PHP benefit. Several commenters suggested that noncompliance
with a 20-hour requirement could be addressed through medical review,
and suggested that PHPs' documenting the reasons for absences in the
medical record should be sufficient. Another commenter questioned the
necessity of an edit for occasional beneficiary absences beyond the
PHP's control. We will consider these comments as we evaluate our
options for possible future editing.
In addition, in this CY 2018 OPPS/ASC proposed rule, we are
soliciting public comments on the advisability of applying a payment
requirement conditioned on a beneficiary's receipt of a minimum of 20
hours of therapeutic services per week. We also are soliciting public
comments addressing the need for exceptions to such a policy.
Specifically, we want to know and understand the type of occurrences or
circumstances that would cause a PHP patient to not receive at least 20
hours of PHP services per week, particularly where payment would still
be appropriate.
Our goal is for PHP providers to continue to have flexibility in
providing PHP services. However, we must ensure that beneficiaries
enrolled in PHPs are legitimately eligible for PHP services and receive
appropriately intensive treatment. As we seek to understand the usage
of PHP services by Medicare patients, we also will continue to monitor
the intensity of services provided on a weekly basis, and look forward
to reviewing stakeholder comments when considering options to address
situations where an appropriately intensive level of service is not
provided.
C. Proposed Outlier Policy for CMHCs
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), after examining the costs, charges, and
outlier payments for CMHCs, we concluded that establishing a separate
OPPS outlier policy for CMHCs would be appropriate. Beginning in CY
2004, we created a separate outlier policy specific to the estimated
costs and OPPS payments provided to CMHCs. We designated a portion of
the estimated OPPS outlier threshold specifically for CMHCs, consistent
with the percentage of projected payments to CMHCs under the OPPS each
year, excluding outlier payments, and established a separate outlier
threshold for CMHCs.
The separate outlier threshold for CMHCs resulted in $1.8 million
in outlier payments to CMHCs in CY 2004, and $0.5 million in outlier
payments to CMHCs in CY 2005. In contrast, in CY 2003, more than $30
million was paid to CMHCs in outlier payments. We note that, in the CY
2009 OPPS/ASC final rule with comment period, we also established an
outlier reconciliation policy to address charging aberrations related
to OPPS outlier payments (73 FR 68594 through 68599). In CY 2017, we
implemented a CMHC outlier payment cap to be applied at the provider
level, such that in any given year, an individual CMHC will receive no
more than a set percentage of its CMHC total per diem payments in
outlier payments (81 FR 79692 through 79695). This outlier payment cap
only affects CMHCs, and does not affect other provider types. This
outlier payment cap is in addition to and separate from the current
outlier policy and reconciliation policy in effect. We finalized the
CMHC outlier payment cap to be set at 8 percent of the CMHC's total per
diem payments (81 FR 79694 through 79695).
In this CY 2018 OPPS/ASC proposed rule, we are proposing to
continue to designate a portion of the estimated 1.0 percent hospital
outpatient outlier threshold specifically for CMHCs, consistent with
the percentage of projected payments to CMHCs under the OPPS in CY
2018, excluding outlier payments. This policy results in CMHC outliers
being paid under limited circumstances associated with costs from
complex cases, rather than as a substitute for the standard PHP payment
to CMHCs. CMHCs are projected to receive 0.02 percent of total hospital
outpatient payments in CY 2018, excluding outlier payments. Therefore,
we are proposing to designate approximately 0.0027 percent of the
estimated 1.0 percent hospital outpatient outlier threshold for CMHCs.
As we do for each rulemaking cycle, we have updated the CMHC CCRs and
claims data used to model the PHP payments rates.
Based on our simulations of CMHC payments for CY 2018, in this
proposed rule, we are proposing to continue to set the cutoff point for
outlier payments for CY 2018 at 3.4 times the highest CMHC APC payment
rate implemented for that calendar year, which for CY 2018 is the
payment rate for CMHC APC 5853. In addition, we are proposing to
continue to apply the same outlier payment percentage that applies to
hospitals. Therefore, for CY 2018, we are proposing to continue to pay
50 percent of CMHC APC geometric mean per diem costs over the cutoff
point. For example, for CY 2018, if a CMHC's cost for partial
hospitalization services paid under CMHC APC 5853 exceeds 3.4 times the
proposed payment rate for CMHC APC 5853, the outlier payment would be
calculated as 50 percent of the amount by which the cost exceeds 3.4
times the payment rate for CMHC APC 5853.
In section II.G. of this proposed rule, for the hospital outpatient
outlier payment policy, we are proposing to set a fixed dollar
threshold in addition to an APC multiplier threshold. APC 5853 is the
only APC for which CMHCs may receive payment under the OPPS, and is for
providing a defined set of services that are relatively low cost when
compared to other OPPS services. As such, it is not necessary to also
impose a fixed dollar threshold on CMHCs. Therefore, we are not
proposing to set a dollar threshold for CMHC outlier payments.
In summary, we are proposing to continue to calculate our CMHC
outlier threshold and CMHC outlier payments according to our
established policies.
IX. Proposed Procedures That Would Be Paid Only as Inpatient Procedures
A. Background
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74352 through 74353) for a full historical discussion of
our longstanding policies on how we identify procedures that are
typically provided only in an inpatient setting (referred to as the
inpatient only (IPO) list) and, therefore, will not be paid by Medicare
under the OPPS, and on the criteria that we use to review the IPO list
each year to determine whether or not any procedures should be removed
from the list. The complete proposed list of codes that would be paid
by Medicare in CY 2018 as inpatient only procedures (the proposed IPO
list) is included as Addendum E to this proposed rule (which is
available via the Internet on the CMS Web site).
[[Page 33643]]
B. Proposed Changes to the Inpatient Only (IPO) List
In this proposed rule, for CY 2018, we are proposing to use the
same methodology (described in the November 15, 2004 final rule with
comment period (69 FR 65834)) of reviewing the current list of
procedures on the IPO list to identify any procedures that may be
removed from the list. We have established five criteria that are part
of this methodology. As noted in the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74353), we utilize these criteria when reviewing
procedures to determine whether or not they should be removed from the
IPO list and assigned to an APC group for payment under the OPPS when
provided in the hospital outpatient setting. We note that a procedure
is not required to meet all of the established criteria to be removed
from the IPO list. The criteria include the following:
1. Most outpatient departments are equipped to provide the services
to the Medicare population.
2. The simplest procedure described by the code may be performed in
most outpatient departments.
3. The procedure is related to codes that we have already removed
from the IPO list.
4. A determination is made that the procedure is being performed in
numerous hospitals on an outpatient basis.
5. A determination is made that the procedure can be appropriately
and safely performed in an ASC, and is on the list of approved ASC
procedures or has been proposed by us for addition to the ASC list.
Using the above-listed criteria, we are proposing to remove the
procedures described by the following codes from the IPO list for CY
2018: CPT code 27447 (Arthroplasty, knee, condyle and plateau; medical
and lateral compartments with or without patella resurfacing (total
knee arthroplasty)) and CPT code 55866 (Laparoscopy, surgical
prostatectomy, retropubic radical, including nerve sparing, includes
robotic assistance, when performed).
For a number of years, total knee arthroplasty (TKA) has been a
topic of discussion for removal from the IPO list with both stakeholder
support and opposition. Most recently, in the CY 2017 OPPS/ASC proposed
rule (81 FR 45679 through 45681), we sought public comments on the
removal of the TKA procedure from the IPO list from interested parties,
including specifically: Medicare beneficiaries and advocate
associations for Medicare beneficiaries; orthopedic surgeons and
physician specialty societies that represent orthopedic surgeons who
perform TKA procedures; hospitals and hospital trade associations; and
any other interested stakeholders. In the comment solicitation, we
requested stakeholder input on whether the TKA procedure met the
established criteria used to identify procedures to remove from the IPO
list. We also requested input regarding how to modify current Medicare
payment models that include TKA, such as the Bundled Payments for Care
Improvement (BPCI) and the Comprehensive Care for Joint Replacement
(CJR) initiatives, if the procedure was removed from the IPO list.
The public comments we received were varied and nuanced. A number
of commenters believed that continued refinements in the TKA surgical
procedure allowed it to be performed safely on properly selected
Medicare beneficiaries in the outpatient setting. A number of
facilities indicated that they were currently performing TKA procedures
on an outpatient basis in both the HOPD and ASC on non-Medicare
patients. Commenters who supported removing the TKA procedure from the
IPO list also noted recent peer-reviewed publications that reported on
investigations of the feasibility of outpatient TKA with positive
results; that is, TKA outpatients did not experience higher rates of
complications or readmissions in comparison to TKA inpatients.
A minority of commenters (including teaching hospital stakeholders
and some professional organizations representing orthopedic surgeons)
stated that the risk of postsurgical complications was too high for
patients with the TKA procedure performed in the outpatient setting for
the Medicare population and noted that patients appropriate for the TKA
procedure performed on an outpatient basis tend to be younger, more
active, have fewer complications, and have more at home support than
most Medicare beneficiaries. These commenters also believed there was
insufficient research on the TKA procedure performed on an outpatient
basis to definitively claim that the procedure could be safely
performed in the outpatient setting.
Some commenters noted that if the TKA procedure was removed from
the IPO list, inpatient TKA cases should not be subject to Recovery
Audit Contractor (RAC) review for appropriate site-of-service. In
addition, some commenters expressed concerns about the effect that
removing the TKA procedure from the IPO list could have on the BPCI and
CJR Medicare payment models. We stated in the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79699) that we would consider all
public comments received in future policymaking.
We have reviewed the clinical characteristics of the TKA procedure
and related evidence, including current length-of-stay (LOS) data for
inpatient TKA procedures and peer-reviewed literature related to
outpatient TKA procedures. We also have considered input from the
comment solicitation in the CY 2017 OPPS/ASC final rule with comment
period and the professional opinions of orthopedic surgeons and CMS
clinical advisors. In addition, we have taken into account the
recommendation from the summer 2016 Advisory Panel on Hospital
Outpatient Payment (HOP Panel) meeting to remove the TKA procedure from
the IPO list. Based on this information, we have determined that the
TKA procedure would be an appropriate candidate for removal from the
IPO list. We expect providers to carefully develop evidence-based
patient selection criteria to identify patients who are appropriate
candidates for an outpatient TKA procedure as well as exclusionary
criteria that would disqualify a patient from receiving an outpatient
TKA procedure. We believe that the subset of Medicare beneficiaries who
meet patient selection criteria for performance of the TKA procedure on
an outpatient basis may have the procedure performed safely in the
outpatient setting.
We believe that the TKA procedure meets a number of criteria for
removal from the IPO list, including criteria 1, 2, and 4. We are
seeking comments on whether the public believes that these criteria are
met and whether the TKA procedure meets any other of the five criteria
stated in the beginning of this section.
We are proposing that CPT code 27447 would be assigned to C-APC
5115 (Level 5 Musculoskeletal Procedures) with status indicator ``J1''.
We also note, as stated in the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79697), that removal from the IPO list does not
require the covered surgical procedures to be performed only on an
outpatient basis. Removal of a procedure from the IPO list allows for
Medicare coverage and payment for the procedure when it is furnished
either in an inpatient or outpatient hospital setting. IPO list
procedures must be performed on an inpatient basis (regardless of the
expected length of the hospital stay) in order to qualify for Medicare
payment, but procedures that are not on the IPO list may still be
[[Page 33644]]
covered and paid for by Medicare when they are performed on individuals
who are inpatients. The decision regarding the most appropriate care
setting for a given surgical procedure is a complex medical judgment
made by the physician based on the beneficiary's individual clinical
needs and preferences and on the general coverage rules requiring that
any procedure be reasonable and necessary. Therefore, if we finalize
our proposal to remove the TKA procedure from the IPO list, we would
also prohibit Recovery Audit Contractor (RAC) review for patient status
for TKA procedures performed in the inpatient setting for a period of 2
years to allow time and experience for these procedures under this
setting. We would not want hospitals to err on the side of
inappropriately performing the procedure on an outpatient basis due to
concerns about the possibility of an inpatient TKA claim being denied
for patient status. That is, given that this surgical procedure would
be newly eligible for payment under either the IPPS or the OPPS, RAC
denial of a hospital claim for patient status would be prohibited. We
note that contractor reviews for issues other than patient status as an
inpatient or outpatient would continue to be permitted, including those
for underlying medical necessity.
We also are proposing to remove the procedure described by CPT code
55866 from the IPO list for CY 2018. We are proposing that CPT code
55866 would be assigned to C-APC 5362 (Level 2 Laparoscopy & Related
Services) with status indicator ``J1''. After consulting with
stakeholders and our clinical advisors regarding this procedure, we
believe that this procedure meets criteria 1 and 2. We are seeking
comment on whether the public believes that these criteria are met and
whether CPT code 55866 meets any other of the five criteria stated in
the beginning of this section.
The procedures that we are proposing to remove from the IPO list
for CY 2018 and subsequent years, including the HCPCS code, long
descriptors, and the proposed CY 2018 payment indicators, are displayed
in Table 29 below.
Table 29--Proposed Procedures To Be Removed From the Inpatient Only List for CY 2018
----------------------------------------------------------------------------------------------------------------
Proposed CY
Proposed CY 2018 OPPS
CY 2018 CPT code CY 2018 long descriptor 2018 OPPS APC status
assignment indicator
----------------------------------------------------------------------------------------------------------------
27447...................................... Arthroplasty, knee, condyle and 5115 J1
plateau; medical and lateral
compartments with or without
patella resurfacing (total knee
arthroplasty).
55866...................................... Laparoscopy, surgical 5362 J1
prostatectomy, retropubic
radical, including nerve sparing,
includes robotic assistance, when
performed.
----------------------------------------------------------------------------------------------------------------
We are inviting public comments on our proposals to remove the
procedures described by CPT code 27447 and CPT code 55866 from the IPO
list beginning in CY 2018. In addition, in section XII.C.1.b. of this
proposed rule, we are soliciting public comments on whether the TKA
procedure meets the criteria to be added to the list of ASC covered
surgical procedures.
The complete proposed list of codes (the IPO list) that would be
paid by Medicare in CY 2018 as inpatient only procedures is included as
Addendum E to this proposed rule (which is available via the Internet
on the CMS Web site).
C. Solicitation of Public Comments on the Possible Removal of Partial
Hip Arthroplasty (PHA) and Total Hip Arthroplasty (THA) Procedures From
the IPO List
1. Background
Partial hip arthroplasty (PHA), CPT code 27125 (Hemiarthroplasty,
hip, partial (eg, femoral stem prosthesis, bipolar arthroplasty)), and
total hip arthroplasty (THA) or total hip replacement, CPT code 27130
(Arthroplasty, acetabular and proximal femoral prosthetic replacement
(total hip arthroplasty), with or without autograft or allograft), have
traditionally been considered inpatient surgical procedures. The
procedures were placed on the original IPO list in the CY 2001 OPPS
final rule (65 FR 18780). In 2000, the primary factors that were used
to determine the assignment of a procedure to the IPO list were as
follows: (1) The invasive nature of the procedure; (2) the need for at
least 24 hours of postoperative care; and (3) the underlying physical
condition of the patient who would require the surgery (65 FR 18455).
In 2000, the geometric mean average length of stay for the DRG to which
uncomplicated PHA and THA procedures were assigned was 4.6 days, and in
2016, the average length of stay for current uncomplicated PHA and THA
procedures for the MS-DRG was 2.7 days.
In the CY 2017 OPPS/ASC proposed rule, we solicited public comments
on the possible removal of total knee arthroplasty (TKA) from the IPO
list (81 FR 45679 through 45681). Included in the public comments
received related to the removal of TKA from the IPO list were several
comments in support of removal of THA from the IPO list as well. Among
those commenters expressing support for removal of THA from the IPO
list were several surgeons and other stakeholders who believed that,
given thorough preoperative screening by medical teams with significant
experience and expertise involving hip replacement procedures, the THA
procedure could be provided on an outpatient basis for some Medicare
beneficiaries. These commenters noted significant success involving
same day discharge for patients who met the screening criteria and
whose experienced medical teams were able to perform the procedure
early enough in the day for the patients to achieve postoperative
goals, allowing home discharge by the end of the day. The commenters
believed that the benefits of providing the THA procedure on an
outpatient basis will lead to significant enhancements in patient well-
being, improved efficiency, and cost savings to the Medicare program,
including shorter hospital stays resulting in fewer medical
complications, improved results, and enhanced patient satisfaction.
Recent innovations have enabled surgeons to perform the PHA and THA
procedures on an outpatient basis on non-Medicare patients (both in the
HOPD and in the ASC). These innovations in PHA and THA care include
minimally invasive techniques, improved perioperative anesthesia,
alternative postoperative pain management, and expedited rehabilitation
protocols. Patients undergoing minimally invasive surgical procedures
instead of open surgical techniques generally benefit from a shorter
hospital stay. However, not all patients are candidates for minimally
invasive PHA or THA. Commenters on
[[Page 33645]]
the CY 2017 OPPS/ASC proposed rule comment solicitation on the TKA
procedure have stated that benefits of outpatient PHA and THA
procedures include a likelihood of fewer complications, more rapid
recovery, increased patient satisfaction, recovery at home with the
assistance of family members, and a likelihood of overall improved
outcomes. On the contrary, unnecessary inpatient hospitalization
exposes patients to the risk of hospital-acquired conditions such as
infections and a host of other iatrogenic mishaps.
Like most surgical procedures, both PHA and THA need to be tailored
to the individual patient's needs. Patients with a relatively low
anesthesia risk and without significant comorbidities who have family
members at home who can assist them may likely be good candidates for
an outpatient PHA or THA procedure. These patients may be determined to
also be able to tolerate outpatient rehabilitation in either an
outpatient facility or at home postsurgery. On the other hand, patients
with multiple medical comorbidities, aside from their osteoarthritis,
would more likely require inpatient hospitalization and possibly
postacute care in a skilled nursing facility or other facility.
Surgeons who have discussed outpatient PHA and THA procedures in public
comments in response to our CY 2017 OPPS/ASC proposed rule comment
solicitation on the TKA procedure have emphasized the importance of
careful patient selection and strict protocols to optimize outpatient
hip replacement outcomes. These protocols typically manage all aspects
of the patient's care, including the at-home preoperative and
postoperative environment, anesthesia, pain management, and
rehabilitation to maximize rapid recovery, ambulation, and performance
of activities of daily living.
We also note that not uncommonly we receive questions from the
public about the IPO list that lead us to believe that some members of
the public may misunderstand certain aspects of the IPO list.
Therefore, two important principles of the IPO list must be reiterated
at the outset of this discussion. First, just because a procedure is
not on the IPO list does not mean that the procedure cannot be
performed on an inpatient basis. IPO list procedures must be performed
on an inpatient basis (regardless of the expected length of the
hospital stay) in order to qualify for Medicare payment, but procedures
that are not on the IPO list can be and very often are performed on
individuals who are inpatients (as well as individuals who are hospital
outpatients and ASC patients). Second, the IPO list status of a
procedure has no effect on the MPFS professional payment for the
procedure. Whether or not a procedure is on the IPO list is not in any
way a factor in the MPFS payment methodology.
2. Topics and Questions for Public Comments
We are seeking public comments on whether we should remove the
procedures described by CPT codes 27125 and 27130 from the IPO list
from all interested parties, including the following groups or
individuals: Medicare beneficiaries and advocate associations for
Medicare beneficiaries; orthopedic surgeons and physician specialty
societies that represent orthopedic surgeons who perform PHA and/or THA
procedures; hospitals and hospital trade associations; and any other
interested stakeholders. We are also specifically seeking public
comments on the following questions:
Are most outpatient departments equipped to provide PHA
and/or THA to some Medicare beneficiaries?
Can the simplest procedure described by CPT codes 27125
and 27130 be performed in most outpatient departments?
Are the procedures described by CPT codes 27125 and 27130
sufficiently related to or similar to other procedures we have already
removed from the IPO list?
How often is the procedure described by CPT codes 27125
and 27130 being performed on an outpatient basis (either in an HOPD or
ASC) on non-Medicare patients?
Would it be clinically appropriate for some Medicare
beneficiaries in consultation with his or her surgeon and other members
of the medical team to have the option of either a PHA or THA procedure
as a hospital outpatient, which may or may not include a 24-hour period
of recovery in the hospital after the operation?
In addition, we are soliciting public comments on whether the PHA
and THA procedures may meet the criteria to be added to the ASC Covered
Procedures List. We refer readers to section XII.C.1.c. of this
proposed rule for a complete discussion of the ASC Covered Procedures
List.
Finally, as noted when we solicited public comment on removing the
TKA procedure from the IPO list in the CY 2017 rulemaking, we solicited
public comment on the effect of removing the TKA procedure from the IPO
list on the Comprehensive Care for Joint Replacement (CJR) Model and
the Bundled Payment for Care Improvements (BPCI) Model. We refer
readers to the CY 2017 OPPS/ASC proposed rule for a discussion of
questions we raised for public comments and again are seeking public
comment on the effect of removing the PHA and THA procedures from the
IPO list on these models. For a discussion of these models in the CY
2017 rulemaking, we refer readers to 81 FR 79698 through 79699.
X. Proposed Nonrecurring Policy Changes
A. Payment for Certain Items and Services Furnished by Certain Off-
Campus Departments of a Provider
1. Background
Section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74),
enacted on November 2, 2015, amended section 1833(t) of the Act by
amending paragraph (1)(B) and adding a new paragraph (21). As a general
matter, under sections 1833(t)(1)(B)(v) and (t)(21) of the Act,
applicable items and services furnished by certain off campus
outpatient departments of a provider on or after January 1, 2017, will
not be considered covered OPD services as defined under section
1833(t)(1)(B) of the Act for purposes of payment under the OPPS and
will instead be paid ``under the applicable payment system'' under
Medicare Part B if the requirements for such payment are otherwise met.
To be considered part of a hospital, an off campus department of a
hospital must meet the provider-based criteria established under 42 CFR
413.65. The implementation of section 603 of the Bipartisan Budget Act
of 2015 was finalized in the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79699 through 79719) and interim final rule with comment
period (79720 through 79729).
2. Summary of Public Comments and Our Responses Regarding Expansion of
Services by Excepted Off-Campus Hospital Outpatient Departments
In the CY 2017 OPPS/ASC final rule with comment period, we
expressed interest in receiving feedback on the limitation on expansion
of services of hospital outpatient departments as it related to
excepted off-campus provider-based departments (PBDs) (81 FR 79707).
Below we discuss certain proposals and present a summary of the public
comments received and our responses to those comments.
As discussed in the CY 2017 OPPS/ASC proposed rule and final rule
with comment period (81 FR 45685 through 45686 and 81 FR 79706 through
79707), we stated that we believe section
[[Page 33646]]
1833(t)(21)(B)(ii) of the Act, as added by section 603 of Public Law
114-74, excepts off-campus provider based departments (PBDs) and the
items and services that are furnished by such excepted off-campus PBDs
for purposes of paragraphs (1)(B)(v) and (21) of section 1833(t) of the
Act as they were being furnished on the date of enactment of section
603 of Public Law 114-74, as guided by our regulatory definition of a
department of a provider at Sec. 413.65(a)(2). Therefore, we proposed
that the excepted off-campus PBD items and services that would continue
to be paid under the OPPS would be limited to the provision of items
and services it was furnishing prior to the date of enactment of
section 603 of Public Law 114-74. Moreover, we proposed that items and
services that are not part of a clinical family of services furnished
and billed by the excepted off-campus PBD prior to November 2, 2015
would be subject to paragraphs (1)(B)(v) and (21) of section 1833(t) of
the Act; that is, not payable under the OPPS (81 FR 45685 through
45686).
As noted in both the CY 2017 OPPS/ASC proposed rule and final rule
with comment period, we believe that the amendments to section 1833(t)
of the Act by section 603 of Public Law 114-74 were intended to address
items and services furnished at physicians' offices that are converted
to hospital off-campus PBDs on or after November 2, 2015 from being
paid at OPPS rates (81 FR 45685 through 45686 and 81 FR 79706 through
79707). One issue we contemplated is how expanded services of an
excepted off-campus PBD could affect payments to a hospital in regard
to newly acquired physicians' offices or new off-campus PBDs
established after the date of enactment of section 603 of Public Law
114-74. Particularly, in the CY 2017 OPPS/ASC proposed rule, we
indicated that we were concerned that if excepted off-campus PBDs could
expand the types of services provided at the excepted off-campus PBDs
and also be paid OPPS rates for these new types of services, hospitals
may be able to purchase additional physician practices and add those
physicians to existing excepted off campus PBDs (81 FR 45685). This
could result in newly purchased physician practices furnishing services
that are paid at OPPS rates, which we believe these amendments to
section 1833(t) of the Act were intended to address.
After reviewing the statutory authority and the concerns raised by
stakeholders, we proposed for CY 2017, for purposes of paragraphs
(1)(B)(v) and (21) of section 1833(t) of the Act, that excepted status
of items and services furnished in excepted off-campus PBDs would be
limited to the items and services (defined as clinical families of
services in Table 21 of the proposed rule (81 FR 45685 through 45686))
such a department was billing for under the OPPS and were furnished
prior to November 2, 2015. We proposed that if an excepted off-campus
PBD furnishes services from a clinical family of services that it did
not furnish prior to November 2, 2015, and therefore did not also bill
for, these new or expanded clinical families of services would not be
covered OPD services, and instead would be subject to paragraphs
(1)(B)(v) and (21) of section 1833(t) of the Act. We did not propose to
limit the volume of excepted items and services within a clinical
family of services that an excepted off-campus PBD could furnish.
In addition, we considered, but did not propose, specifying a
timeframe in which service lines had to be billed under the OPPS for
covered OPD services furnished prior to November 2, 2015. We sought
public comment through the CY 2017 OPPS/ASC proposed rule on whether we
should adopt a specific timeframe for which the billing had to occur,
such as CY 2013 through November 1, 2015.
Under our CY 2017 proposal, while excepted off-campus PBDs would
not be eligible to receive OPPS payments for expanded clinical families
of services, such excepted off-campus PBDs would continue to be
eligible to receive OPPS payment for clinical families of services that
were furnished and billed prior to that date.
After consideration of the public comments we received in response
to the CY 2017 OPPS/ASC proposed rule, we did not finalize our proposed
policy to limit service line expansion. Therefore, for CY 2017, an
excepted off-campus PBD receives payments under the OPPS for all billed
items and services, regardless of whether it furnished such types of
items and services prior to the date of enactment of Public Law 114-74,
as long as the excepted off-campus PBD remains excepted; that is, it
meets the relocation and change of ownership requirements adopted in
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79707).
Furthermore, in the CY 2017 OPPS/ASC final rule with comment period, we
stated our intent to monitor service line expansion and continue to
consider how a potential limitation on expansion would work. To that
end, in the CY 2017 OPPS/ASC final rule with comment period, we sought
public comments on how either a limitation on volume of services, as
MedPAC described in its comments, or a limitation on lines of service,
as we laid out in the proposed rule, could be implemented (81 FR
79707). Specifically, we stated we were interested in what data are
currently available or could be collected that would allow us to
implement a limitation on service expansion. We also stated our
interest in receiving suggestions for changes to the clinical families
of services that we set forth in Table 21 of the proposed rule (81 FR
45685 through 45686) as we move forward.
Several of the public comments received in response to the November
2016 comment solicitation were repeated from the same stakeholders in
response to the CY 2017 OPPS/ASC proposed rule. These commenters again
expressed concern regarding CMS' authority to address changes in
service-mix; how a limitation on service expansion or volume would
stifle innovative care delivery and use of new technologies; and how
the clinical families of service are not workable. Because these
commenters did not provide new information, we refer readers to the CY
2017 OPPS/ASC final rule with comment period for our response to
comments on statutory authority and hindrance to access to innovative
technologies (81 FR 79707). A summary of and our responses to the other
comments received in response to the November 2016 comment solicitation
follow:
Comment: One commenter raised concern that CMS will implement
policies that prohibit expansion of services at excepted off-campus
PBDs. The commenter believed that excepted and nonexcepted off-campus
PBDs should be allowed to expand their service offerings.
Response: We believe the commenter may have misunderstood the
policy proposal to limit service line expansion as a proposal to
disallow excepted off-campus PBDs from ever altering their service
offerings or from treating new patients. To clarify, we proposed that
the items and services furnished by an excepted off-campus PBD that
would continue to be paid under the OPPS would be limited to the
provision of items and services within the clinical families of
services the excepted off-campus PBD was furnishing prior to November
2, 2015. In addition, we proposed that items and services that were not
part of a clinical family of services furnished and billed by the
excepted off-campus PBD prior to November 2, 2015 would be paid under
the MPFS. We did not propose to prohibit expansion of clinical services
[[Page 33647]]
furnished by either excepted or nonexcepted off-campus PBDs. In the CY
2017 OPPS/ASC final rule with comment period, in response to public
comments, we did not finalize our proposal to limit payment under the
OPPS for expansion of services at excepted off-campus PBDs, but
expressed interest in additional feedback to help us consider whether
excepted off-campus PBDs that expand the types of services offered
after November 2, 2015 should be paid for furnishing those items and
services under the applicable payment system (that is, the MPFS)
instead of the OPPS. Specifically, we requested comments on how either
a limitation on volume or a limitation on lines of service would work
in practice (81 FR 79707). For example, if we were to adopt a
limitation on payment for expanded service lines at an excepted off-
campus PBD and such PBD primarily provided infusion services prior to
November 2, 2015, but added cardiology services after November 2, 2015,
should payment for the cardiology services be made under the MPFS while
payment for the infusion services would be made under the OPPS?
We recognize that services provided in off-campus PBDs may evolve
to reflect changes in clinical practice and community health care
needs. However, as stated in prior rulemaking, we believe that section
1833(t)(21)(B)(ii) of the Act excepted off-campus PBDs as they existed
at the time that Public Law 114-74 was enacted, and provides the
authority to define excepted off-campus PBDs, including those items and
services furnished and billed by such a PBD that may be paid under the
OPPS, as opposed to the authority under section 1833(t)(21)(C) of the
Act.
Comment: A few commenters supported CMS' intent to monitor service
line expansion and changes in billing patterns by excepted off-campus
PBDs. These commenters urged CMS to work to operationalize a method
that would preclude an excepted off-campus PBD from expanding its
payment advantage under the OPPS into wholly new clinical areas.
Response: We appreciate the commenters' support. We are collecting
data on the claims billed by off-campus PBDs with modifier ``PO'' (for
excepted services) and modifier ``PN'' (for nonexcepted services). We
believe that data collected using these modifiers will be a useful tool
in furthering our efforts to monitor service line expansion, and
address any issues as they may arise.
Comment: A few commenters urged CMS to pursue a limitation on
service line expansion to ensure designation as an excepted off-campus
PBD is not ``abused.'' One commenter suggested that CMS already has the
necessary data to limit excepted off-campus PBDs to billing under the
OPPS for only those items and services that were furnished prior to
November 2, 2015. The commenter suggested that CMS evaluate outpatient
claims with the ``PO'' modifier to develop a list of ``grandfathered''
items and services for which the excepted off-campus PBD may continue
to be paid under the OPPS.
Response: We appreciate the commenters' suggestions. While the
``PO'' modifier claims data are helpful to assess the billing patterns
of off-campus PBDs, reporting of this modifier was voluntary for CY
2015 and did not become mandatory until CY 2016. Because of the
voluntary nature of ``PO'' modifier reporting in CY 2015, the data may
not accurately reflect all items and services furnished at excepted
off-campus PBDs. We also are concerned with the practicality of
developing a list of excepted items and services for each excepted off-
campus PBD, given the magnitude of such a list. Any future proposal on
service expansion would need to be practicable and take into
consideration the administrative burden on providers and the Federal
Government.
Comment: A few commenters expressed concern that either a
limitation on services or volume of services at an excepted off-campus
PBD would result in varying beneficiary copayments at a single site,
which could create confusion and inequity. Therefore, the commenters
requested that CMS minimize beneficiary confusion by treating all items
and services furnished at an excepted off-campus PBD as excepted under
Sec. 419.48.
Response: We appreciate these comments. We note that the cost-
sharing liability under both the OPPS and the MPFS is prescribed by
statute and that there is not flexibility with respect to the copayment
amount that would be due for a given service.
Comment: A few commenters believed that MedPAC's proposal to cap
service volume from a baseline period would still be administratively
complex and unduly burdensome. In addition, the commenters disagreed
with MedPAC's proposal to establish the baseline period using the 12-
month period that preceded November 2, 2015 (that is, November 2, 2014
through November 1, 2015) as a baseline for volume caps. These
commenters believed that such an approach would negatively affect
excepted off-campus PBDs that began operations any time during the year
before the enactment of section 603 of Public Law 114-74, by possibly
preventing all of the items and services furnished by that excepted
off-campus PBD from being excepted from the provisions of section 603.
Therefore, the commenters requested that any baseline period run no
earlier than the 12-month period immediately prior to the effective
date of the policy, or, for excepted off-campus PBDs that began
operations within the 5-year period prior to the effective date of the
policy, the 12-month period following the excepted off-campus PBD's
fifth year of operations. The commenters also believed that
establishment of a cap based on the modifier ``PO'' data is
inappropriate, given that use of the modifier was not mandatory until
January 1, 2016, or nearly 2 months after enactment of section 603 of
Public Law 114-74. One commenter suggested that a volume cap would need
to be adjusted annually to account for changes in coding and bundling
of services; changes in population of community served; hospital market
basket increases to OPPS payment rates; and efficiency improvements.
Response: We appreciate these comments and concerns relating to
proposing a cap on service volume and the limitations of the ``PO''
modifier data. We will take this feedback into consideration in the
development of potential future proposals to either limit service
expansion or cap volume of services payable under the OPPS.
Comment: A few commenters suggested that CMS delay establishing any
limitation on service expansion or volume until claims data with the
``PN'' modifier are available. However, the commenters believed that,
even with ``PO'' modifier data from excepted off-campus PBDs and ``PN''
modifier data from nonexcepted off-campus PBDs, it would be a
challenging task for CMS and providers to retroactively assess and
compare which services were provided at each PBD for a 1-year period
prior to November 2, 2015. As an alternative, one commenter suggested
that additional questions on the CMS 855A enrollment form would be a
more sensible approach to gathering information on types of services
furnished at excepted off-campus PBDs, but did not provide any specific
questions.
Response: We agree that evaluating data reported with the ``PN''
modifier by nonexcepted off-campus PBDs will be instructive as we
consider options for any potential future proposal on limitation of
service line expansion or volume. While we did not finalize any
[[Page 33648]]
policy on clinical service expansion that would establish the baseline
period as a 1-year period prior to November 2, 2015, we appreciate the
feedback. Regarding changes to the CMS 855A enrollment form, we are
unclear on what types of questions could be added to glean a better
understanding of services provided at nonexcepted off-campus PBDs;
therefore, we cannot respond to this comment at this time.
We appreciate the commenters' suggestions and concerns on the issue
of a limitation on clinical service line expansion or a limitation on
service line volume. After consideration of the public comments we
received, for CY 2018, we are not making any proposals to limit
clinical service line expansion or volume increases at excepted off-
campus PBDs, but will continue to monitor claims data for changes in
billing patterns and utilization, and continue to invite public
comments on this issue.
We refer readers to the CY 2018 MPFS proposed rule for proposed
payment rates under the MPFS for nonexcepted items and services
furnished by nonexcepted off-campus provider-based departments of
hospitals.
3. Implementation of Section 16002 of the 21st Century Cures Act
(Treatment of Cancer Hospitals in Off Campus Outpatient Department of a
Provider Policy)
In the CY 2017 OPPS/ASC final rule with comment period (81 FR
79699), we finalized a number of proposals to implement section 603 of
the Bipartisan Budget Act of 2016 (Pub. L. 114-74), enacted on November
2, 2015, which amended section 1833(t) of the Act. Specifically, this
provision amended the OPPS statute to require that certain items and
services furnished by certain off-campus outpatient departments of a
provider (off-campus PBDs) on or after January 1, 2017 will not be
considered covered OPD services as defined under section 1833(t)(1)(B)
of the Act for purposes of payment under the OPPS, and instead will be
paid ``under the applicable payment system'' under Medicare Part B if
the requirements for such payment are otherwise met. In the CY 2017
OPPS/ASC final rule with comment period (81 FR 79699), we established
the Medicare Physician Fee Schedule as the ``applicable payment
system'' for the majority of the nonexcepted items and services
furnished by nonexcepted off-campus PBDs.
Section 16002(a) of the 21st Century Cures Act (Pub. L. 114-255)
amended the Act at section 1833(t)(20)(B) and provided that with
respect to applicable items and services furnished during 2017 or a
subsequent year, the term ``off-campus outpatient department of a
provider'' excludes certain cancer hospitals. To meet this exclusion,
section 16002(a) requires that such cancer hospitals (1) be described
in section 1886(d)(1)(B)(v) of the Act; and (2) for hospital outpatient
departments that meet the requirements for 42 CFR 413.65, after
November 1, 2015 and before December 15, 2016, that the Secretary has
received from the provider an attestation that the department met such
requirements not later than 60 days after the date of enactment of
section 16002 (December 13, 2016), or, for departments that meet the
requirements after December 13, 2016, the Secretary has received from
the provider an attestation that the department met the requirements
not later than 60 days after the date the department first met the
requirements of 42 CFR 413.65. Through operational guidance, we have
provided direction to all MACs regarding this provision. We have also
provided guidance on this provision to hospital providers, which can be
found on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/Sections-16001-16002.pdf.
Section 16002(b) of Public Law 114-255 amended section 1833(t)(18)
of the Act by adding a new subparagraph (C) that requires the
Secretary, in applying 42 CFR 419.43(i) for services furnished on or
after January 1, 2018, to use a target PCR that is 1 percentage point
less than the target PCR that would otherwise apply. In addition to the
1 percentage point reduction, the Secretary may consider making an
additional percentage point reduction to the target PCR that takes into
account payment rates for applicable items and services described in
section 1833(t)(21)(C) of the Act other than for services furnished by
certain cancer hospitals. Further, in making any budget neutrality
adjustments under section 1833(t) of the Act, the Secretary shall not
take into account the reduced expenditures that result from application
of section 1833(t)(18)(C) of the Act. We refer readers to section II.F.
of this proposed rule for a discussion on the calculation of the
proposed target PCR for cancer hospitals for CY 2018.
B. Medicare Site-of-Service Price Transparency (Section 4011 of the
21st Century Cures Act)
Section 4011 of the 21st Century Cures Act (Pub. L. 114-255),
enacted on December 13, 2016, amended section 1834 of the Act by adding
a new subsection (t). New section 1834(t) of the Act provides that, in
order to facilitate price transparency with respect to items and
services for which payment may be made either to a hospital outpatient
department or to an ambulatory surgical center under Title XVIII, the
Secretary shall, for 2018 and each year thereafter, make available to
the public via a searchable Web site, with respect to an appropriate
number of items and services, the estimated payment amount for the item
or service under the OPPS and ASC payment system and the estimated
beneficiary liability applicable to the item or service. We are
announcing our plan to establish the searchable Web site required by
section 1834(t) of the Act. Details regarding the Web site will be
issued through our subregulatory process. We anticipate that the Web
site will be made available in early CY 2018.
C. Appropriate Use Criteria for Advanced Diagnostic Imaging Services
Section 218(b) of the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93) added subsection (q) to section 1834 of the
Act, which directs the Secretary to establish a program to promote the
use of appropriate use criteria (AUC) for advanced diagnostic imaging
services (the AUC program). Section 1834(q)(1)(B) of the Act defines
AUC as criteria that are evidence-based (to the extent feasible) and
assist professionals who order and furnish applicable imaging services
to make the most appropriate treatment decisions for a specific
clinical condition. The current policies for the AUC program for
advanced diagnostic imaging services are codified in the regulations at
42 CFR 414.94.
There are three key components of the AUC program for advanced
diagnostic imaging services program. In the CY 2016 MPFS final rule
with comment period (80 FR 71102 through 71116 and 80 FR 71380 through
71382), we addressed the first component of the Medicare AUC program.
The first component includes the requirements and process for the
establishment and specification of the AUC. In the CY 2017 MPFS final
rule with comment period (81 FR 80403 through 80428 and 81 FR 80554
through 80555), we addressed the second component of the AUC program.
The second component includes the specification of qualified clinical
decision support mechanisms (CDSMs). A CDSM is the electronic tool
through which the ordering practitioner consults AUC. In the CY 2018
MPFS proposed rule, we are proposing to address the third component of
the AUC program. The third component includes the
[[Page 33649]]
requirements for an ordering professional to consult with a qualified
CDSM when ordering an applicable imaging service and communicate
information about the AUC consultation to the furnishing professional,
and for the furnishing professional to include that information on
claims for the service that is furnished in an applicable setting and
paid under an applicable payment system. Based on the statutory
language of section 1834(q)(4)(B) of the Act, the AUC program applies
to advanced imaging services for which payment is made under the
following applicable payment systems: The MPFS; the OPPS; and the ASC
payment system. Information on the latest proposals for requirements
for the AUC program can be found in the CY 2018 MPFS proposed rule.
Public comments on these proposals should be submitted in response to
the CY 2018 MPFS proposed rule.
D. Enforcement Instruction for the Supervision of Outpatient
Therapeutic Services in Critical Access Hospitals (CAHs) and Certain
Small Rural Hospitals
In the CY 2009 OPPS/ASC proposed rule and final rule with comment
period (73 FR 41518 through 41519 and 73 FR 68702 through 68704,
respectively), we clarified that direct supervision is required for
hospital outpatient therapeutic services covered and paid by Medicare
that are furnished in hospitals as well as in provider-based
departments (PBDs) of hospitals, as set forth in the CY 2000 OPPS final
rule with comment period (65 FR 18525). In the CY 2010 OPPS/ASC final
rule with comment period (74 FR 60575 through 60591), we finalized a
technical correction to the title and text of the applicable
regulations at 42 CFR 410.27 to clarify that this standard applies in
CAHs as well as hospitals. In response to concerns expressed by the
hospital community, in particular CAHs and small rural hospitals, that
they would have difficulty meeting this standard, on March 15, 2010, we
instructed all Medicare administrative contractors not to evaluate or
enforce the supervision requirements for therapeutic services provided
to outpatients in CAHs from January 1, 2010 through December 31, 2010,
while the agency revisited the supervision policy during the CY 2011
OPPS/ASC rulemaking cycle.
Due to continued concerns expressed by CAHs and small rural
hospitals, we extended this notice of nonenforcement (``enforcement
instruction'') as an interim measure for CY 2011, and expanded it to
apply to small rural hospitals having 100 or fewer beds (75 FR 72007).
We continued to consider the issue further in our annual OPPS notice-
and-comment rulemaking, and implemented an independent review process
in 2012 to obtain advice from the Hospital Outpatient Payment Panel
(the Panel) on this matter (76 FR 74360 through 74371). Under this
process used since CY 2012, the Panel considers and advises CMS
regarding stakeholder requests for changes in the required level of
supervision of individual hospital outpatient therapeutic services. In
addition, we extended the enforcement instruction through CY 2012 and
CY 2013. The enforcement instruction has not been in effect since
December 31, 2013. Congress has taken legislative action (Pub. L. 113-
198 and Pub. L. 114-112) to extend nonenforcement of the direct
supervision of hospital outpatient therapeutic services in CAHs and
small rural hospitals having 100 or fewer beds since December 31, 2013.
The latest legislative action (Pub. L. 114-255) extended nonenforcement
until December 31, 2016. The current enforcement instruction is
available on the CMS Web site at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/Downloads/Moratorium-on-Hospital-Supervision-Enforcement.pdf.
Stakeholders have consistently requested that we continue the
nonenforcement of the direct supervision of hospital outpatient
therapeutic services for CAHs and small rural hospitals having 100 or
fewer beds. Stakeholders stated that some small rural hospitals and
CAHs have insufficient staff available to furnish direct supervision.
The primary contributing factors cited were difficulty recruiting
physician and nonphysician practitioners to practice in rural areas.
These stakeholders noted that it is particularly difficult to furnish
direct supervision for critical specialty services, such as radiation
oncology services, that cannot be directly supervised by a hospital
emergency department physician or nonphysician practitioner because of
the volume of emergency patients or lack of specialty expertise. In
addition, we are not aware of any quality of care complaints from
beneficiaries or providers relating to general physician supervision as
compared to direct physician supervision for outpatient hospital
therapeutic services.
Therefore, we are proposing to reinstate the nonenforcement of
direct supervision enforcement instruction for outpatient therapeutic
services for CAHs and small rural hospitals having 100 or fewer beds
for CY 2018 and 2019 to give CAHs and small rural hospitals having 100
or fewer beds more time to comply with the supervision requirements for
outpatients therapeutic services and to give all parties time to submit
specific services to be evaluated by the Advisory Panel on Hospital
Outpatient Payment for a recommended change in the supervision level.
These hospitals will continue to be subject to conditions of
participation for hospitals and other Medicare rules regarding
supervision. We welcome public comments on this proposal.
E. Payment Changes for Film X-Ray Services and Proposed Payment Changes
for X-Rays Taken Using Computed Radiography Technology
Section 502 of the Consolidated Appropriations Act, 2016 (Pub. L.
114-113), which was enacted on December 18, 2015, contains provisions
to incentivize the transition from traditional X-ray imaging to digital
radiography. In particular, section 502(b) of Public Law 114-113
amended section 1833(t)(16) of the Act by adding subparagraph (F),
which includes provisions that limit payment for film x-ray imaging
services and computed radiography imaging services.
Section 1833(t)(16)(F)(i) of the Act specifies that, effective for
services furnished during 2017 or a subsequent year, the payment under
the OPPS for imaging services that are X-rays taken using film
(including the X-ray component of a packaged service) that would
otherwise be made under the OPPS (without application of subparagraph
(F)(i) and before application of any other adjustment under section
1833(t)) shall be reduced by 20 percent. Section 1833(t)(16)(F)(iii) of
the Act provides that the reductions made under section 1833(t)(16)(F)
of the Act shall not be considered an adjustment under section
1833(t)(2)(E) of the Act, and shall not be implemented in a budget
neutral manner.
Consistent with section 1833(t)(16)(F)(iv) of the Act, which
requires the implementation of the reductions in payment set forth in
subparagraph (F) through appropriate mechanisms, which may include
modifiers, we implemented section 1833(t)(16)(F)(i) of the Act by
establishing the modifier ``FX'' (X-ray taken using film), effective
January 1, 2017. The payment for X-rays taken using film and furnished
during 2017 or a subsequent year will be reduced by 20 percent when
modifier ``FX'' (X-ray taken using film) is reported with the
appropriate HCPCS codes. The applicable HCPCS codes describing
[[Page 33650]]
imaging services can be found in Addendum B to this proposed rule
(which is available via the Internet on the CMS Web site). When payment
for an X-ray service taken using film is packaged into the payment for
another item or service under the OPPS, no separate payment for the X-
ray service is made and, therefore, there is no payment amount that can
be attributed to the X-ray service. Accordingly, the amount of the
payment reduction for a packaged film X-ray service is $0 (20 percent
of $0). Further discussion of these policies and modifier ``FX'' can be
found in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79729 through 79730).
Section 1833(t)(16)(F)(ii) of the Act provides for a phased-in
reduction of payments for imaging services that are taken using
computed radiography technology (as defined in section 1848(b)(9)(C) of
the Act). Payments for such services (including the X-ray component of
a packaged service) furnished during CY 2018, 2019, 2020, 2021, or
2022, that would otherwise be determined under section 1833(t) of the
Act (without application of subparagraph (F)(ii) and before application
of any other adjustment), shall be reduced by 7 percent, and if such
services are furnished during CY 2023 or a subsequent year, by 10
percent. For purposes of this reduction, computed radiography
technology is defined in section 1848(b)(9)(C) of the Act as cassette-
based imaging which utilizes an imaging plate to create the image
involved.
To implement this provision, we are establishing a new modifier
``XX'', as permitted by section 1833(t)(16)(F)(iv) of the Act, that
would be reported on claims to identify those HCPCS codes that describe
X-rays taken using computed radiography technology. We are proposing
that the payment reduction would be taken when this payment modifier is
reported with the applicable HCPCS code(s) to describe imaging services
that are taken using computed radiography technology. The applicable
HCPCS codes describing imaging services can be found in Addendum B to
this proposed rule (which is available via the Internet on the CMS Web
site). We note that modifier ``XX'' is a placeholder modifier whose 2-
digit modifier and long descriptor will be described in the CY 2018
OPPS/ASC final rule with comment period. When payment for an X-ray
service taken using computed radiography imaging is packaged into the
payment for another item or service under the OPPS, no separate payment
for the X-ray service is made and, therefore, there is no payment
amount that can be attributed to the X-ray. Accordingly, the amount of
the payment reduction for a packaged X-ray service would be $0 (7
percent of $0, and 10 percent of $0). We are inviting public comments
on these proposals.
Although we adopted the payment reduction required by section
1833(t)(16)(F)(i) of the Act in the CY 2017 OPPS/ASC final rule with
comment period, we did not adopt corresponding regulation text.
Therefore, in this CY 2018 OPPS/ASC proposed rule, we are proposing to
add new regulation text at 42 CFR 419.71 to codify our existing
policies and our proposed policies for computed radiography technology
services. We are proposing to add the definition of ``computed
radiography technology'', as it is defined in section 1848(b)(9)(C) of
the Act, in paragraph (a) of proposed new Sec. 419.71. The proposed
regulation text under paragraph (b) of proposed new Sec. 419.71 would
specify the 20-percent reduction for film X-ray imaging services. We
are proposing that the phased-in payment reduction for computed
radiography technology imaging services would be codified at paragraph
(c) of proposed new Sec. 419.71. Paragraph (d) of proposed new Sec.
419.71 would provide that the payment reductions taken under the
section are not considered adjustments under section 1833(t)(2)(E) of
the Act and are not implemented in a budget neutral manner. We are
inviting public comments on this proposed regulation text.
F. Potential Revisions to the Laboratory Date of Service Policy
1. Background on the Medicare Part B Laboratory Date of Service Policy
The date of service (DOS) is a required data field on all Medicare
claims for laboratory services. However, a laboratory service may take
place over a period of time--the date the physician orders the
laboratory test, the date the specimen is collected from the patient,
the date the laboratory accesses the specimen, the date the laboratory
performs the test, and the date results are produced may occur on
different dates. In the final rule on coverage and administrative
policies for clinical diagnostic laboratory services published in the
Federal Register on November 23, 2001 (66 FR 58791 through 58792), we
adopted a policy under which the DOS for clinical diagnostic laboratory
services generally is the date the specimen is collected.
A special rule was developed to apply to ``archived'' specimens.
For laboratory tests that use an archived specimen, we established that
the DOS is the date the specimen was obtained from storage (66 FR
58792).
In 2002, we issued Program Memorandum AB-02-134 which permitted
contractors discretion in making determinations regarding the length of
time a specimen must be stored to be considered ``archived.'' In
response to comments requesting that we issue a national standard to
clarify when a stored specimen can be considered ``archived,'' in the
Procedures for Maintaining Code Lists in the Negotiated National
Coverage Determinations for Clinical Diagnostic Laboratory Services
final notice, published in the Federal Register on February 25, 2005
(70 FR 9357), we defined an ``archived'' specimen as a specimen that is
stored for more than 30 calendar days before testing. We established
that the DOS for archived specimens is the date the specimen was
obtained from storage. Specimens stored for 30 days or less continued
to have a DOS of the date the specimen was collected.
2. Current Medicare DOS Policy (``14-Day Rule'')
In the final rule with comment period entitled, in relevant part,
``Revisions to Payment Policies, Five-Year Review of Work Relative
Value Units, Changes to the Practice Expense Methodology Under the
Physician Fee Schedule, and Other Changes to Payment Under Part B''
published in the Federal Register on December 1, 2006 (MPFS final rule)
(71 FR 69705 through 69706), we added a new Sec. 414.510 in Title 42
of the CFR regarding the clinical laboratory DOS requirements and
revised our DOS policy for stored specimens. We explained in the MPFS
final rule that the DOS of a test may affect payment for the test,
especially in situations in which a specimen that is collected while
the patient is being treated in a hospital setting (for example, during
a surgical procedure), is later used for testing after the patient has
been discharged from the hospital. We noted that payment for the test
is usually bundled with payment for the hospital service, even where
the results of the test did not guide treatment during the hospital
stay. To address concerns raised for tests related to cancer recurrence
and therapeutic interventions, we finalized modifications to the DOS
policy in Sec. 414.510(b)(2)(i) for a test performed on a specimen
stored less than or equal to 30 calendar days from the date it was
collected (a non-archived specimen), so that the DOS is the date the
test was
[[Page 33651]]
performed (instead of the date of collection) if the following
conditions are met:
The test is ordered by the patient's physician at least 14
days following the date of the patient's discharge from the hospital;
The specimen was collected while the patient was
undergoing a hospital surgical procedure;
It would be medically inappropriate to have collected the
sample other than during the hospital procedure for which the patient
was admitted;
The results of the test do not guide treatment provided
during the hospital stay; and
The test was reasonable and medically necessary for the
treatment of an illness.
As we stated in the MPFS final rule, we established these five
criteria, which we refer to as the ``14-day rule,'' to distinguish
laboratory tests performed as part of post-hospital care from the care
a beneficiary receives in the hospital. When the 14-day rule applies,
laboratory tests are not bundled into the hospital stay, but are
instead paid separately under Medicare Part B (as explained in more
detail below).
We also revised the DOS requirements for a chemotherapy sensitivity
test performed on live tissue. As discussed in the MPFS final rule (71
FR 69706), we agreed with commenters that these tests, which are
primarily used to determine post-hospital chemotherapy care for
patients who also require hospital treatment for tumor removal or
resection, appear to be unrelated to the hospital treatment in cases
where it would be medically inappropriate to collect a test specimen
other than at the time of surgery, especially when the specific drugs
to be tested are ordered at least 14 days following hospital discharge.
As a result, we revised the DOS policy for chemotherapy sensitivity
tests, based on our understanding that the results of these tests, even
if they were available immediately, would not typically affect the
treatment regimen at the hospital. Specifically, we modified the DOS
for chemotherapy sensitivity tests performed on live tissue in Sec.
414.510(b)(3) so that the DOS is the date the test was performed if the
following conditions are met:
The decision regarding the specific chemotherapeutic
agents to test is made at least 14 days after discharge;
The specimen was collected while the patient was
undergoing a hospital surgical procedure;
It would be medically inappropriate to have collected the
sample other than during the hospital procedure for which the patient
was admitted;
The results of the test do not guide treatment provided
during the hospital stay; and
The test was reasonable and medically necessary for the
treatment of an illness.
We explained in the MPFS final rule that, for chemotherapy
sensitivity tests that meet this DOS policy, Medicare would allow
separate payment under Medicare Part B, that is, separate from the
payment for hospital services.
3. Billing and Payment for Laboratory Services Under the OPPS
The DOS requirements at 42 CFR 414.510 are used to determine
whether a hospital bills Medicare for a clinical diagnostic laboratory
test (CDLT) or whether the laboratory performing the test bills
Medicare directly. This is because separate regulations at 42 CFR
410.42(a) and 411.15(m) generally provide that Medicare will not pay
for a service furnished to a hospital patient during an encounter by an
entity other than the hospital unless the hospital has an arrangement
(as defined in 42 CFR 409.3) with that entity to furnish that
particular service to its patients, with certain exceptions and
exclusions. These regulations, which we will call the ``under
arrangements'' provisions in this discussion, require that if the DOS
falls during an inpatient or outpatient stay, payment for the
laboratory test is usually bundled with the hospital service.
Under our current rules, if a test meets all DOS requirements in
Sec. 414.510(b)(2)(i) or Sec. 414.510(b)(3), the DOS is the date the
test was performed, and the laboratory would bill Medicare directly for
the test and would be paid under the Clinical Laboratory Fee Schedule
(CLFS) directly by Medicare. However, if the test does not meet the DOS
requirements in Sec. 414.510(b)(2)(i) or Sec. 414.510(b)(3), the DOS
is the date the specimen was collected from the patient. In that case,
the hospital would bill Medicare for the test and then would pay the
laboratory that performed the test, if the laboratory provided the test
under arrangement.
In recent rulemakings, we have reviewed appropriate payment under
the OPPS for certain diagnostic tests that are not commonly performed
by hospitals. In CY 2014, we finalized a policy to package certain
CDLTs under the OPPS (78 FR 74939 through 74942 and 42 CFR 419.2(b)(17)
and 419.22(l)). In CYs 2016 and 2017, we made some modifications to
this policy (80 FR 70348 through 70350; 81 FR 79592 through 79594).
Under our current policy, certain CDLTs that are listed on the CLFS are
packaged as integral, ancillary, supportive, dependent, or adjunctive
to the primary service or services provided in the hospital outpatient
setting during the same outpatient encounter and billed on the same
claim. Specifically, we conditionally package most CDLTs and only pay
separately for a laboratory test when it is (1) the only service
provided to a beneficiary on a claim; (2) considered a preventive
service; (3) a molecular pathology test; or (4) an advanced diagnostic
laboratory test (ADLT) that meets the criteria of section
1834A(d)(5)(A) of the Act (78 FR 74939 through 74942; 80 FR 70348
through 70350; and 81 FR 79592 through 79594). In the CY 2016 OPPS/ASC
final rule with comment period, we excluded all molecular pathology
laboratory tests from packaging because we believed these relatively
new tests may have a different pattern of clinical use, which may make
them generally less tied to a primary service in the hospital
outpatient setting than the more common and routine laboratory tests
that are packaged.
For similar reasons, in the CY 2017 OPPS/ASC final rule with
comment period, we extended the exclusion to also apply to all ADLTs
that meet the criteria of section 1834A(d)(5)(A) of the Act.\23\ We
stated that we will assign status indicator ``A'' (Separate payment
under the CLFS) to ADLTs once a laboratory test is designated an ADLT
under the CLFS. Laboratory tests that are separately payable and are
listed on the CLFS are paid at the CLFS payment rates.
---------------------------------------------------------------------------
\23\ Under section 1834A(d)(5)(A) of the Act, an ADLT is a
``CDLT that is offered and furnished only by a single laboratory and
not sold for use by a laboratory other than the original developing
laboratory (or a successor owner) and . . . is an analysis of
multiple biomarkers of DNA, RNA, or proteins combined with a unique
algorithm to yield a single patient-specific result.'' CMS has
established a regulatory definition for this type of ADLT in 42 CFR
414.502.
---------------------------------------------------------------------------
4. ADLTs Under the New Private Payor Rate-Based CLFS
Section 1834A of the Act, as established by section 216(a) of the
Protecting Access to Medicare Act of 2014 (PAMA), requires significant
changes to how Medicare pays for CDLTs under the CLFS. Section 216(a)
of PAMA also establishes a new subcategory of CDLTs known as ADLTs with
separate reporting and payment requirements under section 1834A of the
Act. In the CLFS final rule published in the Federal Register on June
23, 2016, entitled ``Medicare Program; Medicare Clinical Diagnostic
[[Page 33652]]
Laboratory Tests Payment System Final Rule'' (CLFS final rule) (81 FR
41036), we implemented the requirements of section 1834A of the Act.
As defined in Sec. 414.502, an ADLT is a CLDT covered under
Medicare Part B that is offered and furnished only by a single
laboratory. Additionally, an ADLT cannot be sold for use by a
laboratory other than the single laboratory that designed the test or a
successor owner. And, an ADLT must meet either Criterion (A), which
implements section 1834A(d)(5)(A) of the Act, or Criterion (B), which
implements section 1834A(d)(5)(B) of the Act, as follows:
Criterion (A): The test--is an analysis of multiple
biomarkers of deoxyribonucleic acid (DNA), ribonucleic acid (RNA), or
proteins; when combined with an empirically derived algorithm, yields a
result that predicts the probability a specific individual patient will
develop a certain condition(s) or respond to a particular therapy(ies);
provides new clinical diagnostic information that cannot be obtained
from any other test or combination of tests; and may include other
assays.
Or:
Criterion (B): The test is cleared or approved by the Food
and Drug Administration (FDA).
Generally, under the revised CLFS, ADLTs are paid using the same
methodology based on the weighted median of private payor rates as
other CDLTs. However, updates to ADLT payment rates occur annually
instead of every 3 years. The payment methodology for ADLTs is detailed
in the CLFS final rule (81 FR 41076 through 41083).
5. Potential Revisions to the Laboratory DOS Policy
In the December 1, 2006 MPFS final rule (71 FR 69706), we explained
that we were very concerned that only tests that can legitimately be
distinguished from the care a beneficiary receives in the hospital be
subject to the 14-day rule, which changes the DOS from the date the
specimen was collected to the date the test was performed and results
in a separate payment for the test. We also stated that we believed it
is more difficult to determine that a test ordered less than 14 days
before discharge is appropriately separable from the hospital stay that
preceded the test. We indicated that we wanted more information about
tests that may be ordered by the patient's physician less than 14 days
following the date of the discharge that would not guide the care
during a hospital stay before taking any additional action in this
area.
Recently, we have heard from certain laboratory stakeholders about
operational issues the current laboratory DOS policy creates for
hospitals and laboratories with regard to molecular pathology tests and
laboratory tests they expect will be designated by CMS as ADLTs that
meet the criteria of section 1834A(d)(5)(A) of the Act. These
stakeholders have expressed that although these particular tests are
not packaged under the OPPS, under current DOS policy, if the tests are
ordered within 14 days of a patient's discharge from the hospital,
Medicare still treats the tests as though they were ordered and
furnished by the hospital itself. Under those circumstances,
laboratories cannot directly seek Medicare payment for the molecular
pathology test or ADLT. The hospital must bill Medicare for the test,
and the laboratory must seek payment from the hospital. Specifically,
stakeholders representing laboratories have expressed the following
concerns:
The current DOS policy permits hospitals to bill for tests
they did not perform and that may have no relationship to or bearing on
treatment received by the patient while in the hospital.
The DOS policy may create inconsistent billing for
specialty laboratories. For example, if the hospital is located in a
different jurisdiction than the Medicare Administrative Contractor
(MAC) used by the laboratory, a different MAC may be billed.
Hospitals may be discouraged from utilizing ADLTs because
billing for such tests that are not performed by hospitals could create
administrative and financial complexities.
The DOS policy is a potential barrier to CMS' goal of
promoting personalized medicine because the policy may
disproportionately impact smaller laboratories performing innovative
diagnostic tests.
Billing complexities may affect beneficiary access to
needed laboratory tests and therapies. For example, orders might be
delayed until at least 14 days after discharge or even canceled to
avoid the DOS policy. This may restrict patient access to tests and
reduce efficacy of treatment plans due to hospitals delaying or
forgoing patient testing to avoid financial risk.
The DOS policy may limit access for Medicare beneficiaries
under original Medicare fee-for-service (that is, Medicare Part A and
Part B) due to the fact that Medicare Advantage Plans under Medicare
Part C and private payers allow laboratories to bill directly for tests
they perform.
We recognize that the current laboratory DOS rule may impose
administrative difficulties for hospitals and laboratories that furnish
laboratory tests that are excluded from OPPS packaging and therefore
paid separately at CLFS payment rates. Hospitals may be reluctant to
bill Medicare for laboratory tests they do not perform, which as noted
by stakeholders, could lead to delays in patient access to care.
In light of the concerns raised by stakeholders, we are considering
potential modifications to the DOS policy that would allow laboratories
to bill Medicare directly for certain laboratory tests excluded from
the OPPS packaging policy. One approach under consideration would
create a new exception to the DOS policy for molecular pathology tests
and ADLTs that meet the criteria of section 1834A(5)(A) of the Act and
have been granted ADLT status by CMS. As we stated in the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79592 through 79594), we
believe these tests are relatively new and may have a different pattern
of clinical use than more conventional laboratory tests, which may make
them generally less tied to a primary service in the hospital
outpatient setting than more common and routine laboratory tests that
are packaged. We are seeking public comment on whether these tests, by
their nature, are appropriately separable from the hospital stay that
preceded the test and therefore should have a DOS that is the date of
performance rather than the date of collection.
For example, we are considering modifying Sec. 414.510(b) by
adding a new paragraph (5) to establish that in the case of a molecular
pathology test or an ADLT that meets the criteria of section
1834A(d)(5)(A) of the Act, the DOS must be the date the test was
performed only if:
The physician orders the test following the date of a
hospital outpatient's discharge from the hospital outpatient
department;
The specimen was collected from a hospital outpatient
during an encounter (as both are defined 42 CFR 410.2);
It would be medically inappropriate to have collected the
sample from the hospital outpatient other than during the hospital
outpatient encounter;
The results of the test do not guide treatment provided
during the hospital outpatient encounter; and
The test was reasonable and medically necessary for the
treatment of an illness.
[[Page 33653]]
We are requesting specific comments on this potential modification
to the current laboratory DOS policy, which would allow laboratories to
bill Medicare directly for molecular pathology tests and ADLTs that
meet the criteria of section 1834A(d)(5)(A) of the Act and have been
granted ADLT status by CMS, when the specimen is collected during a
hospital outpatient procedure and the test is ordered after the patient
is discharged from the hospital outpatient department.
(a) Limiting the DOS Rule Exception to ADLTs
We also are considering potentially revising the DOS rule to create
an exception only for ADLTs that meet the criteria in section
1834A(d)(5)(A) of the Act. This exception would not cover molecular
pathology tests. We are considering this approach because ADLTs
approved by CMS under Criterion (A), like all ADLTs, are offered and
furnished only by a single laboratory (as defined in 42 CFR 414.502).
The hospital, or another laboratory, that is not the single laboratory
(as defined in 42 CFR 414.502), cannot furnish the ADLT. Therefore,
there may be additional beneficiary access concerns for these ADLTs
that may not apply to molecular pathology tests, and that could be
addressed by allowing the laboratories to bill Medicare directly for
these tests. For example, a hospital may not have an arrangement with
the single laboratory that furnishes a particular ADLT, which could
lead the hospital to delay the order for the ADLT until 14 days after
the patient's discharge to avoid financial risk and thus potentially
delay medically necessary care for the beneficiary.
We believe the circumstances may be different for molecular
pathology tests, which are not required to be furnished by a single
laboratory. In particular, we understand there may be ``kits'' for
certain molecular pathology tests that a hospital can purchase,
allowing the hospital to perform the test. Therefore, molecular
pathology tests may not present the same concerns of delayed access to
medically necessary care as ADLTs, which must be performed by a single
laboratory.
We are requesting specific comments on potentially creating an
exception to the DOS policy that is limited to ADLTs that meet the
criteria in section 1834A(d)(5)(A) of the Act and have been granted
ADLT status by CMS. We also are requesting public comments on how the
current laboratory DOS policy may affect billing for other separately
payable laboratory test codes that are not packaged under the OPPS,
such as a laboratory test that is the only service provided to a
beneficiary on a claim or molecular pathology tests.
(b) Other Alternative Approaches
Finally, we are inviting public comments on alternative approaches
to addressing stakeholders' concerns regarding the DOS policy, such as
potentially modifying the ``under arrangements'' provisions in Sec.
410.42 and Sec. 411.15(m). Specifically, we are requesting comments on
whether an exception should be added to Sec. 410.42(b) and/or Sec.
411.15(m)(3) for molecular pathology tests and ADLTs that are excluded
from the OPPS packaging policy under 42 CFR 419.2(b) and how such an
exception should be framed.
We believe that feedback on the topics discussed in this section
will help inform us regarding potential refinements to our DOS policy.
We welcome comments on these topics from the public, including
hospitals, laboratories, and other interested stakeholders. We are
especially interested in comments regarding how the current DOS policy
and ``under arrangements'' provisions may affect access to care for
Medicare beneficiaries. We would consider finalizing the modifications
described in this section.
XI. Proposed CY 2018 OPPS Payment Status and Comment Indicators
A. Proposed CY 2018 OPPS Payment Status Indicator Definitions
Payment status indicators (SIs) that we assign to HCPCS codes and
APCs serve an important role in determining payment for services under
the OPPS. They indicate whether a service represented by a HCPCS code
is payable under the OPPS or another payment system and also whether
particular OPPS policies apply to the code.
For CY 2018, we are not proposing to make any changes to the
definitions of status indicators that were listed in Addendum D1 of the
CY 2017 OPPS/ASC final rule with comment period available on the CMS
Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1656-FC.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending. We believe
that the existing definitions of the OPPS status indicators would
continue to be appropriate for CY 2018.
The complete list of the payment status indicators and their
definitions that we are proposing to apply for CY 2018 is displayed in
Addendum D1 to this proposed rule, which is available on the CMS Web
site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
The proposed CY 2018 payment status indicator assignments for APCs
and HCPCS codes are shown in Addendum A and Addendum B, respectively,
to this proposed rule, which are available on the CMS Web site at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
B. Proposed CY 2018 Comment Indicator Definitions
In this CY 2018 OPPS/ASC proposed rule, we are proposing to use
four comment indicators for the CY 2018 OPPS. These comment indicators,
``CH'', ``NC'', ``NI'', and ``NP'', are in effect for CY 2017 and we
are proposing to continue their use in CY 2018. The proposed CY 2018
OPPS comment indicators are as follows:
``CH''--Active HCPCS code in current and next calendar
year, status indicator and/or APC assignment has changed; or active
HCPCS code that will be discontinued at the end of the current calendar
year.
``NC''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year as compared to current calendar year for which we are
requesting comments in the proposed rule, final APC assignment;
comments will not be accepted on the final APC assignment for the new
code.
``NI''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year as compared to current calendar year, interim APC
assignment; comments will be accepted on the interim APC assignment for
the new code.
``NP''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year as compared to current calendar year proposed APC
assignment; comments will be accepted on the proposed APC assignment
for the new code.
The definitions of the proposed OPPS comment indicators for CY 2018
are listed in Addendum D2 to this proposed rule, which is available on
the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/.
[[Page 33654]]
We are requesting public comment on our proposed status indicators
and comment indicators for CY 2018.
XII. Proposed Updates to the Ambulatory Surgical Center (ASC) Payment
System
A. Background
1. Legislative History, Statutory Authority, and Prior Rulemaking for
the ASC Payment System
For a detailed discussion of the legislative history and statutory
authority related to payments to ASCs under Medicare, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
32292). For a discussion of prior rulemaking on the ASC payment system,
we refer readers to the CYs 2012, 2013, 2014, 2015, 2016, and 2017
OPPS/ASC final rules with comment period (76 FR 74378 through 74379; 77
FR 68434 through 68467; 78 FR 75064 through 75090; 79 FR 66915 through
66940; 80 FR 70474 through 70502; and 81 FR 79732 through 79753,
respectively).
2. Policies Governing Changes to the Lists of Codes and Payment Rates
for ASC Covered Surgical Procedures and Covered Ancillary Services
Under 42 CFR 416.2 and 416.166 of the Medicare regulations, subject
to certain exclusions, covered surgical procedures in an ASC are
surgical procedures that are separately paid under the OPPS, that would
not be expected to pose a significant risk to beneficiary safety when
performed in an ASC, and for which standard medical practice dictates
that the beneficiary would not typically be expected to require active
medical monitoring and care at midnight following the procedure
(``overnight stay''). We adopted this standard for defining which
surgical procedures are covered under the ASC payment system as an
indicator of the complexity of the procedure and its appropriateness
for Medicare payment in ASCs. We use this standard only for purposes of
evaluating procedures to determine whether or not they are appropriate
to be furnished to Medicare beneficiaries in ASCs. We define surgical
procedures as those described by Category I CPT codes in the surgical
range from 10000 through 69999, as well as those Category III CPT codes
and Level II HCPCS codes that directly crosswalk or are clinically
similar to procedures in the CPT surgical range that we have determined
do not pose a significant safety risk, that we would not expect to
require an overnight stay when performed in ASCs, and that are
separately paid under the OPPS (72 FR 42478).
In the August 2, 2007 final rule (72 FR 42495), we also established
our policy to make separate ASC payments for the following ancillary
items and services when they are provided integral to ASC covered
surgical procedures: (1) Brachytherapy sources; (2) certain implantable
items that have pass-through payment status under the OPPS; (3) certain
items and services that we designate as contractor-priced, including,
but not limited to, procurement of corneal tissue; (4) certain drugs
and biologicals for which separate payment is allowed under the OPPS;
and (5) certain radiology services for which separate payment is
allowed under the OPPS. In the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66932 through 66934), we expanded the scope of ASC
covered ancillary services to include certain diagnostic tests within
the medicine range of CPT codes for which separate payment is allowed
under the OPPS when they are provided integral to an ASC covered
surgical procedure. Covered ancillary services are specified in Sec.
416.164(b) and, as stated previously, are eligible for separate ASC
payment. Payment for ancillary items and services that are not paid
separately under the ASC payment system is packaged into the ASC
payment for the covered surgical procedure.
We update the lists of, and payment rates for, covered surgical
procedures and covered ancillary services in ASCs in conjunction with
the annual proposed and final rulemaking process to update the OPPS and
the ASC payment system (Sec. 416.173; 72 FR 42535). We base ASC
payment and policies for most covered surgical procedures, drugs,
biologicals, and certain other covered ancillary services on the OPPS
payment policies, and we use quarterly change requests (CRs) to update
services covered under the OPPS. We also provide quarterly update CRs
for ASC covered surgical procedures and covered ancillary services
throughout the year (January, April, July, and October). We release new
and revised Level II HCPCS codes and recognize the release of new and
revised CPT codes by the AMA and make these codes effective (that is,
the codes are recognized on Medicare claims) via these ASC quarterly
update CRs. We recognize the release of new and revised Category III
CPT codes in the July and January CRs. These updates implement newly
created and revised Level II HCPCS and Category III CPT codes for ASC
payment and update the payment rates for separately paid drugs and
biologicals based on the most recently submitted ASP data. New and
revised Category I CPT codes, except vaccine codes, are released only
once a year and are implemented only through the January quarterly CR
update. New and revised Category I CPT vaccine codes are released twice
a year and are implemented through the January and July quarterly CR
updates. We refer readers to Table 41 in the CY 2012 OPPS/ASC proposed
rule for an example of how this process, which we finalized in the CY
2012 OPPS/ASC final rule with comment period, is used to update HCPCS
and CPT codes (76 FR 42291; 76 FR 74380 through 74381).
In our annual updates to the ASC list of, and payment rates for,
covered surgical procedures and covered ancillary services, we
undertake a review of excluded surgical procedures (including all
procedures newly proposed for removal from the OPPS inpatient list),
new codes, and codes with revised descriptors, to identify any that we
believe meet the criteria for designation as ASC covered surgical
procedures or covered ancillary services. Updating the lists of ASC
covered surgical procedures and covered ancillary services, as well as
their payment rates, in association with the annual OPPS rulemaking
cycle is particularly important because the OPPS relative payment
weights and, in some cases, payment rates, are used as the basis for
the payment of many covered surgical procedures and covered ancillary
services under the revised ASC payment system. This joint update
process ensures that the ASC updates occur in a regular, predictable,
and timely manner.
3. Definition of ASC Covered Surgical Procedures
Since the implementation of the ASC prospective payment system, we
have defined a ``surgical'' procedure under the payment system as any
procedure described within the range of Category I CPT codes that the
CPT Editorial Panel of the American Medical Association (AMA) defines
as ``surgery'' (CPT codes 10000 through 69999) (72 FR 42478). We also
have included as ``surgical,'' procedures that are described by Level
II HCPCS codes or by Category III CPT codes that directly crosswalk or
are clinically similar to procedures in the CPT surgical range that we
have determined do not pose a significant safety risk, would not expect
to require an overnight stay when performed in an ASC, and are
separately paid under the OPPS (72 FR 42478).
[[Page 33655]]
As we noted in the CY 2008 final rule that implemented the revised
ASC payment system, using this definition of surgery would exclude from
ASC payment certain invasive, ``surgery-like'' procedures, such as
cardiac catheterization or certain radiation treatment services that
are assigned codes outside the CPT surgical range (72 FR 42477). We
stated in that final rule that we believed continuing to rely on the
CPT definition of surgery is administratively straightforward,
logically related to the categorization of services by physician
experts who both establish the codes and perform the procedures, and
consistent with a policy to allow ASC payment for all outpatient
surgical procedures (72 FR 42477).
Recently, some stakeholders have suggested that certain procedures
that are outside the CPT surgical range but that are similar to
surgical procedures currently covered in an ASC setting should be ASC
covered surgical procedures. For example, these stakeholders stated
that certain cardiac catheterization services, cardiac device
programming services, and electrophysiology services should be added to
the covered surgical procedures list. While we continue to believe that
using the CPT code range to define surgery represents a logical,
appropriate, and straightforward approach to defining a surgical
procedure, we also believe it may be appropriate for us to use the CPT
surgical range as a guide rather than a requirement as to whether a
procedure is surgical, which would give us more flexibility to include
``surgery-like'' procedures on the ASC Covered Procedures List (CPL).
We are cognizant of the dynamic nature of ambulatory surgery and the
continued shift of services from the inpatient setting to the
outpatient setting over the past decade. Therefore, in this CY 2018
OPPS/ASC proposed rule, we are soliciting public comments regarding
services that are described by Category I CPT codes outside of the
surgical range, or Level II HCPCS codes or Category III CPT codes that
do not directly crosswalk and are not clinically similar to procedures
in the CPT surgical range, but that nonetheless may be appropriate to
include as covered surgical procedures payable when furnished in the
ASC setting. In particular, we are interested in commenters' views
regarding additional criteria we might use to consider when a procedure
that is surgery-like could be included on the ASC CPL. We are
requesting that commenters on this issue take into consideration
whether each individual procedure can be safely and appropriately
performed in an ASC as required by the regulations at 42 CFR 416.166
(including that standard medical practice dictates that the beneficiary
would not typically be expected to require active medical monitoring
and care at midnight following the procedure), and whether the
procedure requires the resources, staff, and equipment typical of an
ASC. We also are interested in commenters' views on whether and how, if
we were to include such services as ASC covered surgical procedures, we
would need to revise our definition ASC covered surgical procedures.
B. Proposed Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised
Category I and Category III CPT Codes and Level II HCPCS Codes
Category I CPT, Category III CPT, and Level II HCPCS codes are used
to report procedures, services, items, and supplies under the ASC
payment system. Specifically, we recognize the following codes on ASC
claims:
Category I CPT codes, which describe surgical procedures
and vaccine codes;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
Level II HCPCS codes, which are used primarily to identify
items, supplies, temporary procedures, and services not described by
CPT codes.
We finalized a policy in the August 2, 2007 final rule (72 FR 42533
through 42535) to evaluate each year all new and revised Category I and
Category III CPT codes and Level II HCPCS codes that describe surgical
procedures, and to make preliminary determinations during the annual
OPPS/ASC rulemaking process regarding whether or not they meet the
criteria for payment in the ASC setting as covered surgical procedures
and, if so, whether or not they are office-based procedures. In
addition, we identify new and revised codes as ASC covered ancillary
services based upon the final payment policies of the revised ASC
payment system. In prior rulemakings, we refer to this process as
recognizing new codes. However, this process has always involved the
recognition of new and revised codes. We consider revised codes to be
new when they have substantial revision to their code descriptors that
necessitate a change in the current ASC payment indicator. To clarify,
we refer to these codes as new and revised in this CY 2018 OPPS/ASC
proposed rule.
We have separated our discussion below based on when the codes are
released and whether we are proposing to solicit public comments in
this proposed rule (and respond to those comments in the CY 2018 OPPS/
ASC final rule with comment period) or whether we will be soliciting
public comments in the CY 2018 OPPS/ASC final rule with comment period
(and responding to those comments in the CY 2019 OPPS/ASC final rule
with comment period).
We note that we sought public comments in the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79735 through 79736) on the new
and revised Level II HCPCS codes effective October 1, 2016, or January
1, 2017. These new and revised codes, with an effective date of October
1, 2016, or January 1, 2017, were flagged with comment indicator ``NI''
in Addenda AA and BB to the CY 2017 OPPS/ASC final rule with comment
period to indicate that we were assigning them an interim payment
status and payment rate, if applicable, which were subject to public
comment following publication of the CY 2017 OPPS/ASC final rule with
comment period. We will respond to public comments and finalize the
treatment of these codes under the ASC payment system in the CY 2018
OPPS/ASC final rule with comment period.
In Table 30 below, we summarize our process for updating codes
through our ASC quarterly update CRs, seeking public comments, and
finalizing the treatment of these new codes under the OPPS.
Table 30--Comment and Finalization Timeframes for New or Revised HCPCS Codes
----------------------------------------------------------------------------------------------------------------
ASC quarterly update CR Type of code Effective date Comments sought When finalized
----------------------------------------------------------------------------------------------------------------
April l, 2017................... Level II HCPCS April 1, 2017..... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
[[Page 33656]]
July 1, 2017.................... Level II HCPCS July 1, 2017...... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
Category I July 1, 2017...... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
(certain vaccine proposed rule. final rule with
codes) and III comment period.
CPT codes.
October 1, 2017................. Level II HCPCS October 1, 2017... CY 2018 OPPS/ASC CY 2019 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
January 1, 2018................. Level II HCPCS January 1, 2018... CY 2018 OPPS/ASC CY 2019 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
Category I and III January 1, 2018... CY 2018 OPPS/ASC CY 2018 OPPS/ASC
CPT Codes. proposed rule. final rule with
comment period.
----------------------------------------------------------------------------------------------------------------
Note: In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 through 66844), we finalized a revised
process of assigning APC and status indicators for new and revised Category I and III CPT codes that would be
effective January 1. We refer readers to section III.A.3. of this CY 2018 OPPS/ASC proposed rule for further
discussion of this issue.
2. Proposed Treatment of New and Revised Level II HCPCS Codes
Implemented in April 2017 for Which We Are Soliciting Public Comments
in This Proposed Rule
In the April 2017 ASC quarterly update (Transmittal 3726, CR 9998,
dated March 3, 2017), we added six new drug and biological Level II
HCPCS codes to the list of covered ancillary services. Table 31 below
lists the new Level II HCPCS codes that were implemented April 1, 2017,
along with their proposed payment indicators for CY 2018. The proposed
payment rates, where applicable, for these April codes can be found in
Addendum BB to this proposed rule (which is available via the Internet
on the CMS Web site).
Table 31--New Level II HCPCS Codes for Covered Ancillary Services
Effective on April 1, 2017
------------------------------------------------------------------------
Proposed CY
CY 2017 HCPCS code CY 2017 long descriptor 2018 payment
indicator
------------------------------------------------------------------------
C9484.......................... Injection, eteplirsen, K2
10 mg.
C9485.......................... Injection, olaratumab, K2
10 mg.
C9486.......................... Injection, granisetron K2
extended release, 0.1
mg.
C9487*......................... Ustekinumab, for K2
intravenous injection,
1 mg.
C9488.......................... Injection, conivaptan K2
hydrochloride, 1 mg.
J7328.......................... Hyaluronan or K2
derivative, gel-syn,
for intra-articular
injection, 0.1 mg.
------------------------------------------------------------------------
* HCPCS code C9487, which was effective April 1, 2017, was deleted June
30, 2017 and replaced with HCPCS code Q9989 (Ustekinumab, for
intravenous injection, 1 mg) effective July 1, 2017.
We are inviting public comments on these proposed payment
indicators and the proposed payment rates for the new Level II HCPCS
codes that were recognized as ASC covered ancillary services in April
2017 through the quarterly update CRs, as listed in Table 31 above. We
are proposing to finalize their payment indicators and their payment
rates in the CY 2018 OPPS/ASC final rule with comment period.
3. Proposed Treatment of New and Revised Level II HCPCS Codes
Implemented in July 2017 for Which We Are Soliciting Public Comments in
This Proposed Rule
In the July 2017 ASC quarterly update (Transmittal 3792, CR 10138,
dated June 9, 2017), we added seven new Level II HCPCS codes to the
list of covered surgical procedures and ancillary services. Table 32
below lists the new Level II HCPCS codes that are effective July 1,
2017. The proposed payment rates, where applicable, for these July
codes can be found in Addendum BB to this proposed rule (which is
available via the Internet on the CMS Web site).
Table 32--New Level II HCPCS Codes for Covered Surgical Procedures and
Ancillary Services Effective on July 1, 2017
------------------------------------------------------------------------
Proposed CY
CY 2017 HCPCS code CY 2017 long descriptor 2018 payment
indicator
------------------------------------------------------------------------
C9489.......................... Injection, nusinersen, K2
0.1 mg.
C9490.......................... Injection, K2
bezlotoxumab, 10 mg.
C9745.......................... Nasal endoscopy, J8
surgical; balloon
dilation of eustachian
tube.
C9746.......................... Transperineal J8
implantation of
permanent adjustable
balloon continence
device, with
cystourethroscopy,
when performed and/or
fluoroscopy, when
performed.
[[Page 33657]]
C9747.......................... Ablation of prostate, G2
transrectal, high
intensity focused
ultrasound (HIFU),
including imaging
guidance.
Q9986.......................... Injection, K2
hydroxyprogesterone
caproate (Makena), 10
mg.
Q9989*......................... Ustekinumab, for K2
Intravenous Injection,
1 mg.
------------------------------------------------------------------------
* HCPCS code C9487, which was effective April 1, 2017, was replaced with
HCPCS code Q9989 (Ustekinumab, for intravenous injection, 1 mg)
effective July 1, 2017.
Through the July 2017 quarterly update CR, we also implemented ASC
payment for one new Category III CPT code as an ASC covered surgical
procedure, effective July 1, 2017. This code is listed in Table 33
below, along with its proposed payment indicator. The proposed payment
rate for this new Category III CPT code can be found in Addendum AA to
the proposed rule (which is available via the Internet on the CMS Web
site).
Table 33--New Category III CPT Code for Covered Surgical Procedure
Effective on July 1, 2017
------------------------------------------------------------------------
Proposed CY
CY 2017 CPT code CY 2017 long descriptor 2018 payment
indicator
------------------------------------------------------------------------
0474T.......................... Insertion of anterior J8
segment aqueous
drainage device, with
creation of
intraocular reservoir,
internal approach,
into the supraciliary
space.
------------------------------------------------------------------------
We are inviting public comments on these proposed payment
indicators and the proposed payment rates for the new Category III CPT
code and Level II HCPCS codes that were or are expected to be newly
recognized as ASC covered surgical procedures or covered ancillary
services in July 2017 through the quarterly update CRs, as listed in
Tables 32 and 33 above. We are proposing to finalize their payment
indicators and their payment rates in the CY 2018 OPPS/ASC final rule
with comment period.
4. Proposed Process for New and Revised Level II HCPCS Codes That Will
Be Effective October 1, 2017 and January 1, 2018 for Which We Will Be
Soliciting Public Comments in the CY 2018 OPPS/ASC Final Rule With
Comment Period
As has been our practice in the past, we incorporate those new and
revised Level II HCPCS codes that are effective January 1 in the final
rule with comment period, thereby updating the OPPS and the ASC payment
system for the following calendar year. These codes are released to the
public via the CMS HCPCS Web site, and also through the January OPPS
quarterly update CRs. In the past, we also released new and revised
Level II HCPCS codes that are effective October 1 through the October
OPPS quarterly update CRs and incorporated these new codes in the final
rule with comment period.
For CY 2018, consistent with our established policy, we are
proposing that the Level II HCPCS codes that will be effective October
1, 2017, and January 1, 2018, would be flagged with comment indicator
``NI'' in Addendum B to the CY 2018 OPPS/ASC final rule with comment
period to indicate that we have assigned the codes an interim OPPS
payment status for CY 2018. We will invite public comments in the CY
2018 OPPS/ASC final rule with comment period on the interim status
indicator and APC assignments, and payment rates for these codes that
will be finalized in the CY 2019 OPPS/ASC final rule with comment
period.
5. Proposed Process for Recognizing New and Revised Category I and
Category III CPT Codes That Will Be Effective January 1, 2018 for Which
We Will Be Soliciting Public Comments in the CY 2018 OPPS/ASC Final
Rule With Comment Period
For new and revised CPT codes effective January 1, 2018, that were
received in time to be included in this proposed rule, we are proposing
APC and status indicator assignments. We will accept comments and
finalize the APC and status indicator assignments in the OPPS/ASC final
rule with comment period. For those new/revised CPT codes that are
received too late for inclusion in this OPPS/ASC proposed rule, we may
either make interim final assignments in the final rule with comment
period or possibly use HCPCS G-codes that mirror the predecessor CPT
codes and retain the current APC and status indicator assignments for a
year until we can propose APC and status indicator assignments in the
following year's rulemaking cycle.
For the CY 2018 ASC update, the new and revised CY 2018 Category I
and III CPT codes will be effective on January 1, 2018, and can be
found in ASC Addendum AA and Addendum BB to this proposed rule (which
are available via the Internet on the CMS Web site). The new and
revised CY 2018 Category I and III CPT codes are assigned to new
comment indicator ``NP'' to indicate that the code is new for the next
calendar year or the code is an existing code with substantial revision
to its code descriptor in the next calendar year as compared to current
calendar year and that comments will be accepted on the proposed
payment indicator. Further, we remind readers that the CPT code
descriptors that appear in Addendum AA and Addendum BB are short
descriptors and do not accurately describe the complete procedure,
service, or item described by the CPT code. Therefore, we are including
the 5-digit placeholder codes and their long descriptors for the new
and revised CY 2018 CPT codes in Addendum O to this proposed rule
(which is available via the Internet on the CMS Web site) so that the
public can have time to adequately comment on our proposed payment
indicator assignments. The 5-digit placeholder codes can be found in
Addendum O, specifically under the column labeled ``CY 2018 OPPS/ASC
Proposed Rule 5-Digit Placeholder Code,'' to this
[[Page 33658]]
proposed rule. The final CPT code numbers would be included in the CY
2018 OPPS/ASC final rule with comment period. We note that not every
code listed in Addendum O is subject to comment. For the new/revised
Category I and III CPT codes, we are requesting comments on only those
codes that are assigned to comment indicator ``NP''.
In summary, we are soliciting public comments on the proposed CY
2018 payment indicators for the new and revised Category I and III CPT
codes that will be effective January 1, 2018. The CPT codes are listed
in Addendum AA and Addendum BB to this proposed rule with short
descriptors only. We list them again in Addendum O to this proposed
rule with long descriptors. We also are proposing to finalize the
payment indicator for these codes (with their final CPT code numbers)
in the CY 2018 OPPS/ASC final rule with comment period. The proposed
payment indicator for these codes can be found in Addendum AA and
Addendum BB to this proposed rule (which are available via the Internet
on the CMS Web site).
C. Proposed Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
In the August 2, 2007 ASC final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC list of covered surgical procedures in CY 2008 or later years that
we determine are performed predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that rule, we also finalized our policy
to exempt all procedures on the CY 2007 ASC list from application of
the office-based classification (72 FR 42512). The procedures that were
added to the ASC list of covered surgical procedures beginning in CY
2008 that we determined were office-based were identified in Addendum
AA to that rule by payment indicator ``P2'' (Office-based surgical
procedure added to ASC list in CY 2008 or later with MPFS nonfacility
PE RVUs; payment based on OPPS relative payment weight); ``P3''
(Office-based surgical procedures added to ASC list in CY 2008 or later
with MPFS nonfacility PE RVUs; payment based on MPFS nonfacility PE
RVUs); or ``R2'' (Office-based surgical procedure added to ASC list in
CY 2008 or later without MPFS nonfacility PE RVUs; payment based on
OPPS relative payment weight), depending on whether we estimated the
procedure would be paid according to the standard ASC payment
methodology based on its OPPS relative payment weight or at the MPFS
nonfacility PE RVU-based amount.
Consistent with our final policy to annually review and update the
list of covered surgical procedures eligible for payment in ASCs, each
year we identify covered surgical procedures as either temporarily
office-based (these are new procedure codes with little or no
utilization data that we have determined are clinically similar to
other procedures that are permanently office-based), permanently
office-based, or nonoffice-based, after taking into account updated
volume and utilization data.
(2) Proposed Changes for CY 2018 to Covered Surgical Procedures
Designated as Office-Based
In developing this proposed rule, we followed our policy to
annually review and update the covered surgical procedures for which
ASC payment is made and to identify new procedures that may be
appropriate for ASC payment, including their potential designation as
office-based. We reviewed CY 2016 volume and utilization data and the
clinical characteristics for all covered surgical procedures that are
assigned payment indicator ``G2'' (Nonoffice-based surgical procedure
added in CY 2008 or later; payment based on OPPS relative payment
weight) in CY 2016, as well as for those procedures assigned one of the
temporary office-based payment indicators, specifically ``P2'', ``P3'',
or ``R2'' in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79736 through 79738).
Our review of the CY 2016 volume and utilization data resulted in
our identification of two covered surgical procedures, CPT code 37241
(Vascular embolize/occlude venous) and CPT code 67227 (Destruction
extensive retinopathy), that we believe meet the criteria for
designation as office-based. The data indicate that these procedures
are performed more than 50 percent of the time in physicians' offices,
and we believe that the services are of a level of complexity
consistent with other procedures performed routinely in physicians'
offices. The CPT codes that we are proposing to permanently designate
as office-based for CY 2018 is listed in Table 34 below.
Table 34--ASC Covered Surgical Procedures Proposed To Be Newly Designated as Permanently Office-Based for CY
2018
----------------------------------------------------------------------------------------------------------------
CY 2017 ASC payment Proposed CY 2018 ASC
CY 2018 CPT code CY 2018 long descriptor indicator payment indicator *
----------------------------------------------------------------------------------------------------------------
37241............................. Vascular embolization or G2 P2/P3
occlusion, inclusive of
all radiological
supervision and
interpretation,
intraprocedural
roadmapping, and imaging
guidance necessary to
complete the
intervention; venous,
other than hemorrhage
(eg, congenital or
acquired venous
malformations, venous and
capillary hemangiomas,
varices, varioceles).
67227............................. Destruction of extensive G2 P2/P3
or progressive
retinopathy (eg, diabetic
retinopathy),
cryotherapy, diathermy.
----------------------------------------------------------------------------------------------------------------
* Proposed payment indicators are based on a comparison of the proposed rates according to the ASC standard
ratesetting methodology and the MPFS proposed rates. Current law specifies a 0.5 percent update to the MPFS
payment rates for CY 2018. For a discussion of the MPFS rates, we refer readers to the CY 2018 MPFS proposed
rule.
We also reviewed CY 2016 volume and utilization data and other
information for 10 procedures designated as temporary office-based in
Tables 48 and 49 in the CY 2017 OPPS/ASC final rule with comment period
(81
[[Page 33659]]
FR 79736 through 79738). Of these 10 procedures, there were very few
claims in our data and no claims data for 8 procedures: CPT code 0402T
(Collagen cross-linking of cornea (including removal of the corneal
epithelium and intraoperative pachymetry when performed)); CPT code
10030 (Image-guided fluid collection drainage by catheter (e.g.,
abscess, hematoma, seroma, lymphocele, cyst), soft tissue (e.g.,
extremity, abdominal wall, neck), percutaneous); CPT code 36473
(Endovenous ablation therapy of incompetent vein, extremity, inclusive
of all imaging guidance and monitoring, percutaneous, mechanochemical;
first vein treated); CPT code 36901 (Introduction of needle(s) and/or
catheter(s), dialysis circuit, with diagnostic angiography of the
dialysis circuit, including all direct puncture(s) and catheter
placement(s), injection(s) of contrast, all necessary imaging from the
arterial anastomosis and adjacent artery through entire venous outflow
including the inferior or superior vena cava, fluoroscopic guidance,
radiological supervision and interpretation and image documentation and
report); CPT code 64461 (Paravertebral block (PVB) (paraspinous block),
thoracic; single injection site (includes imaging guidance, when
performed); CPT code 64463 (Paravertebral block (PVB) (paraspinous
block), thoracic; continuous infusion by catheter (includes imaging
guidance, when performed)); CPT code 65785 (Implantation of
intrastromal corneal ring segments); and CPT code 67229 (Treatment of
extensive or progressive retinopathy, one or more sessions; preterm
infant (less than 37 weeks gestation at birth), performed from birth up
to 1 year of age (for example, retinopathy of prematurity),
photocoagulation or cryotherapy). Consequently, we are proposing to
maintain the temporary office-based designations for these eight codes
for CY 2018. We list all of these codes for which we are proposing to
maintain the temporary office-based designations for CY 2018 in Table
35 below. The procedures for which the proposed office-based
designations for CY 2018 are temporary also are indicated by asterisks
in Addendum AA to this proposed rule (which is available via the
Internet on the CMS Web site).
The volume and utilization data for one procedure that has a
temporary office-based designation for CY 2017, HCPCS code G0429
(Dermal injection procedure(s) for facial lipodystrophy syndrome (LDS)
and provision of Radiesse or Sculptra dermal filler, including all
items and supplies), is sufficient to indicate that this procedure is
performed predominantly in physicians' offices and, therefore, should
be assigned an office-based payment indicator in CY 2018. Consequently,
we are proposing to assign payment indicator ``P2/P3'' to this covered
surgical procedure code in CY 2018.
HCPCS code 0299T (Extracorporeal shock wave for integumentary wound
healing, high energy, including topical application and dressing care;
initial wound) was finalized for temporary office-based status in the
CY 2017 OPPS/ASC final rule with comment period. However, this code
will be deleted by the AMA effective December 31, 2017.
We are inviting public comment on our proposals.
Table 35--Proposed CY 2018 Payment Indicators for ASC Covered Surgical Procedures Designated as Temporary Office-
Based in the CY 2017 OPPS/ASC Final Rule With Comment Period
----------------------------------------------------------------------------------------------------------------
CY 2017 ASC payment CY 2018 proposed ASC
CY 2018 CPT code CY 2018 long descriptor indicator * payment indicator **
----------------------------------------------------------------------------------------------------------------
0299T............................. Extracorporeal shock wave R2 * NA
for integumentary wound
healing, high energy,
including topical
application and dressing
care; initial wound.
0402T............................. Collagen cross-linking of R2 * R2 **
cornea (including removal
of the corneal epithelium
and intraoperative
pachymetry when
performed).
10030............................. Image-guided fluid P2 * P2/P3 **
collection drainage by
catheter (e.g., abscess,
hematoma, seroma,
lymphocele, cyst), soft
tissue (e.g., extremity
abdominal wall, neck),
percutaneous.
36473............................. Endovenous ablation P2 * P2/P3 **
therapy of incompetent
vein, extremity,
inclusive of all imaging
guidance and monitoring,
percutaneous,
mechanochemical; first
vein treated.
36901............................. Introduction of needle(s) P2 * P2/P3 **
and/or catheter(s),
dialysis circuit, with
diagnostic angiography of
the dialysis circuit,
including all direct
puncture(s) and catheter
placement(s),
injection(s) of contrast,
all necessary imaging
from the arterial
anastomosis and adjacent
artery through entire
venous outflow including
the inferior or superior
vena cava, fluoroscopic
guidance, radiological
supervision and
interpretation and image
documentation and report.
64461............................. Paravertebral block (PVB) P3 * P2/P3 **
(paraspinous block),
thoracic; single
injection site (includes
imaging guidance, when
performed).
64463............................. Continuous infusion by P3 * P2/P3 **
catheter (includes
imaging guidance, when
performed).
65785............................. Implantation of R2 * P2/P3 **
intrastromal corneal ring
segments.
67229............................. Treatment of extensive or R2 * P2/P3 **
progressive retinopathy,
one or more sessions;
preterm infant (less than
37 weeks gestation at
birth), performed from
birth up to 1 year of age
(e.g., retinopathy of
prematurity),
photocoagulation or
cryotherapy.
G0429............................. Dermal injection P3 * P2/P3 **
procedure(s) for facial
lipodystrophy syndrome
(LDS) and provision of
Radiesse or Sculptra
dermal filler, including
all items and supplies.
----------------------------------------------------------------------------------------------------------------
* If designation is temporary.
[[Page 33660]]
** Proposed payment indicators are based on a comparison of the proposed rates according to the ASC standard
ratesetting methodology and the MPFS proposed rates. Current law specifies a 0.5 percent update to the MPFS
payment rates for CY 2018. For a discussion of the MPFS rates, we refer readers to the CY 2018 MPFS proposed
rule.
For CY 2018, we are proposing to designate one new CY 2018 CPT code
for ASC covered surgical procedures as temporary office-based, as
displayed in Table 36 below. After reviewing the clinical
characteristics, utilization, and volume of related procedure codes, we
determined that the procedure described by this new CPT code would be
predominantly performed in physicians' offices. However, because we had
no utilization data for the procedure specifically described by this
new CPT code, we are proposing to make the office-based designation
temporary rather than permanent, and we will reevaluate the procedure
when data become available. The procedure for which the proposed
office-based designation for CY 2018 is temporary is indicated by
asterisks in Addendum AA to this proposed rule (which is available via
the Internet on the CMS Web site).
We are inviting public comments on these proposals.
Table 36--Proposed CY 2018 Payment Indicators for New CY 2018 CPT Codes
for ASC Covered Surgical Procedures Designated as Temporary Office-Based
------------------------------------------------------------------------
Proposed CY 2018 OPPS/ASC Proposed CY 2018
proposed rule 5-Digit CMS CY 2018 long ASC payment
placeholder code descriptor indicator **
------------------------------------------------------------------------
382X3........................ Diagnostic bone P2/P3 *
marrow; biopsy(ies)
and aspiration(s).
------------------------------------------------------------------------
* If designation is temporary.
** Proposed payment indicators are based on a comparison of the proposed
rates according to the ASC standard ratesetting methodology and the
MPFS proposed rates. Current law specifies a 0.5 percent update to the
MPFS payment rates for CY 2018. For a discussion of the MPFS rates, we
refer readers to the CY 2018 MPFS proposed rule.
b. Proposed ASC Covered Surgical Procedures To Be Designated as Device-
Intensive
(1) Background
As discussed in the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79739 through 79740), we implemented a payment methodology for
calculating the ASC payment rates for covered surgical procedures that
are designated as device-intensive. Under Sec. 416.171(b)(2) of the
regulations, we define an ASC device-intensive procedure as a procedure
with a HCPCS code-level device offset of greater than 40 percent when
calculated according to the standard OPPS APC ratesetting methodology.
According to this ASC payment methodology, we apply the device
offset percentage based on the standard OPPS APC ratesetting
methodology to the OPPS national unadjusted payment to determine the
device cost included in the OPPS payment rate for a device-intensive
ASC covered surgical procedure, which we then set as equal to the
device portion of the national unadjusted ASC payment rate for the
procedure. We calculate the service portion of the ASC payment for
device-intensive procedures by applying the uniform ASC conversion
factor to the service (non-device) portion of the OPPS relative payment
weight for the device-intensive procedure. Finally, we sum the ASC
device portion and ASC service portion to establish the full payment
for the device-intensive procedure under the revised ASC payment
system.
We also finalized that device-intensive procedures will be subject
to all of the payment policies applicable to procedures designated as
an ASC device-intensive procedure under our established methodology,
including our policies on device credits and discontinued procedures.
In addition, in the CY 2017 OPPS/ASC final rule with comment
period, we adopted a policy for new HCPCS codes describing procedures
involving the implantation of medical devices that do not yet have
associated claims data, to designate these procedures as device-
intensive with a default device offset set at 41 percent until claims
data are available to establish the HCPCS code-level device offset for
the procedures (81 FR 79739 through 79740). This default device offset
amount of 41 percent would not be calculated from claims data; instead
it would be applied as a default until claims data are available upon
which to calculate an actual device offset for the new code. The
purpose of applying the 41-percent default device offset to new codes
that describe procedures that involve the implantation of medical
devices would be to ensure ASC access for new procedures until claims
data become available. However, in certain rare instances, for example,
in the case of a very expensive implantable device, we may temporarily
assign a higher offset percentage if warranted by additional
information such as pricing data from a device manufacturer. Once
claims data are available for a new procedure involving the
implantation of a medical device, the device-intensive designation will
be applied to the code if the HCPCS code device offset is greater than
40 percent, according to our policy of determining device-intensive
status by calculating the HCPCS code-level device offset.
(2) Proposed Changes to List of ASC Covered Surgical Procedures
Designated as Device-Intensive for CY 2018
For CY 2018, we are proposing to update the ASC list of covered
surgical procedures that are eligible for payment according to our
device-intensive procedure payment methodology, reflecting the proposed
individual HCPCS code device offset percentages based on CY 2016 OPPS
claims and cost report data available for the proposed rule.
The ASC covered surgical procedures that we are proposing to
designate as device-intensive, and therefore subject to the device-
intensive procedure payment methodology for CY 2018, are assigned
payment indicator ``J8'' and are included in Addendum AA to this
proposed rule (which is available on the CMS Web site). The CPT code,
the CPT code short descriptor, the proposed CY 2018 ASC payment
indicator, and an indication of whether the full credit/partial credit
(FB/FC) device adjustment policy would apply also are included in
Addendum AA to this proposed rule.
We are inviting public comments on the proposed list of ASC device-
intensive procedures.
[[Page 33661]]
c. Proposed Adjustment to ASC Payments for No Cost/Full Credit and
Partial Credit Devices
Our ASC payment policy for costly devices implanted in ASCs at no
cost/full credit or partial credit, as set forth in Sec. 416.179 of
our regulations, is consistent with the OPPS policy that was in effect
until CY 2014. Specifically, the OPPS policy that was in effect through
CY 2013 provided a reduction in OPPS payment by 100 percent of the
device offset amount when a hospital furnishes a specified device
without cost or with a full credit and by 50 percent of the device
offset amount when the hospital receives partial credit in the amount
of 50 percent or more of the cost for the specified device (77 FR 68356
through 68358). The established ASC policy reduces payment to ASCs when
a specified device is furnished without cost or with full credit or
partial credit for the cost of the device for those ASC covered
surgical procedures that are assigned to APCs under the OPPS to which
this policy applies. We refer readers to the CY 2009 OPPS/ASC final
rule with comment period for a full discussion of the ASC payment
adjustment policy for no cost/full credit and partial credit devices
(73 FR 68742 through 68744).
As discussed in section IV.B. of the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75005 through 75006), we finalized our
proposal to modify our former policy of reducing OPPS payment for
specified APCs when a hospital furnishes a specified device without
cost or with a full or partial credit. Formerly, under the OPPS, our
policy was to reduce OPPS payment by 100 percent of the device offset
amount when a hospital furnished a specified device without cost or
with a full credit and by 50 percent of the device offset amount when
the hospital received partial credit in the amount of 50 percent or
more (but less than 100 percent) of the cost for the specified device.
For CY 2014, we finalized our proposal to reduce OPPS payment for
applicable APCs by the full or partial credit a provider receives for a
replaced device, capped at the device offset amount.
Although we finalized our proposal to modify the policy of reducing
payments when a hospital furnishes a specified device without cost or
with full or partial credit under the OPPS, in that final rule with
comment period (78 FR 75076 through 75080), we finalized our proposal
to maintain our ASC policy for reducing payments to ASCs for specified
device-intensive procedures when the ASC furnishes a device without
cost or with full or partial credit. Unlike the OPPS, there is
currently no mechanism within the ASC claims processing system for ASCs
to submit to CMS the actual amount received when furnishing a specified
device at full or partial credit. Therefore, under the ASC payment
system, we finalized our proposal for CY 2014 to continue to reduce ASC
payments by 100 percent or 50 percent of the device offset amount when
an ASC furnishes a device without cost or with full or partial credit,
respectively.
We are proposing to update the list of ASC covered device-intensive
procedures, which would be subject to the no cost/full credit and
partial credit device adjustment policy for CY 2018. Specifically, when
a device-intensive procedure is subject to the no cost/full credit or
partial credit device adjustment policy and is performed to implant a
device that is furnished at no cost or with full credit from the
manufacturer, the ASC would append the HCPCS ``FB'' modifier on the
line in the claim with the procedure to implant the device. The
contractor would reduce payment to the ASC by the device offset amount
that we estimate represents the cost of the device when the necessary
device is furnished without cost or with full credit to the ASC. We
continue to believe that the reduction of ASC payment in these
circumstances is necessary to pay appropriately for the covered
surgical procedure furnished by the ASC.
For partial credit, we are proposing to reduce the payment for
implantation procedures that are subject to the no cost/full credit or
partial credit device adjustment policy by one-half of the device
offset amount that would be applied if a device was provided at no cost
or with full credit, if the credit to the ASC is 50 percent or more
(but less than 100 percent) of the cost of the new device. The ASC
would append the HCPCS ``FC'' modifier to the HCPCS code for a device-
intensive surgical procedure that is subject to the no cost/full credit
or partial credit device adjustment policy, when the facility receives
a partial credit of 50 percent or more (but less than 100 percent) of
the cost of a device. To report that the ASC received a partial credit
of 50 percent or more (but less than 100 percent) of the cost of a new
device, ASCs would have the option of either: (1) Submitting the claim
for the device replacement procedure to their Medicare contractor after
the procedure's performance but prior to manufacturer acknowledgment of
credit for the device, and subsequently contacting the contractor
regarding a claim adjustment once the credit determination is made; or
(2) holding the claim for the device implantation procedure until a
determination is made by the manufacturer on the partial credit and
submitting the claim with the ``FC'' modifier appended to the
implantation procedure HCPCS code if the partial credit is 50 percent
or more (but less than 100 percent) of the cost of the replacement
device. Beneficiary coinsurance would be based on the reduced payment
amount. As finalized in the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66926), to ensure our policy covers any situation
involving a device-intensive procedure where an ASC may receive a
device at no cost/full credit or partial credit, we apply our FB/FC
policy to all device-intensive procedures.
We are inviting public comments on our proposals to adjust ASC
payments for no cost/full credit and partial credit devices.
d. Proposed Additions to the List of ASC Covered Surgical Procedures
We conducted a review of HCPCS codes that currently are paid under
the OPPS, but not included on the ASC list of covered surgical
procedures, to determine if changes in technology and/or medical
practice affected the clinical appropriateness of these procedures for
the ASC setting. Based on this review, we are proposing to update the
list of ASC covered surgical procedures by adding three procedures to
the list for CY 2018. We determined that these three procedures are
separately paid under the OPPS, would not be expected to pose a
significant risk to beneficiary safety when performed in an ASC, and
would not be expected to require active medical monitoring and care of
the beneficiary at midnight following the procedure. Therefore, we are
proposing to include these three procedures on the list of ASC covered
surgical procedures for CY 2018.
The procedures that we are proposing to add to the ASC list of
covered surgical procedures, including the HCPCS code long descriptors
and the proposed CY 2018 payment indicators, are displayed in Table 37
below.
[[Page 33662]]
Table 37--Proposed Additions to the List of ASC Covered Surgical
Procedures for CY 2018
------------------------------------------------------------------------
Proposed CY 2018 ASC
CY 2018 CPT code CY 2018 long descriptor payment indicator
------------------------------------------------------------------------
22856................. Total disc arthroplasty J8
(artificial disc),
anterior approach,
including discectomy
with end plate
preparation (includes
osteophytectomy for
nerve root or spinal
cord decompression and
microdissection); single
interspace, cervical.
22858................. Total disc arthroplasty N1
(artificial disc),
anterior approach,
including discectomy
with end plate
preparation (includes
osteophytectomy for
nerve root or spinal
cord decompression and
microdissection); second
level, cervical (list
separately in addition
to code for primary
procedure).
58572................. Laparoscopy, surgical, G2
with total hysterectomy,
for uterus greater than
250g.
------------------------------------------------------------------------
We are inviting public comments on our proposals.
e. Comment Solicitation on Adding Additional Procedures to the ASC
Covered Procedures List
As we discussed in the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68724), we adopted a policy to include, in our annual
evaluation of the ASC list of covered surgical procedures, a review of
the procedures that are being proposed for removal from the OPPS
inpatient only list for possible inclusion on the ASC list of covered
surgical procedures. We are proposing to remove the following two
procedures described by CPT codes from the OPPS inpatient only list for
CY 2018: CPT codes 27447 (Arthroplasty, knee, condyle and plateau;
medical and lateral compartments with or without patella resurfacing
(total knee arthroplasty)) and 55866 (Laparoscopy, surgical
prostatectomy, retropubic radical, including nerve sparing, includes
robotic assistance, when performed). We evaluated each of the two
procedures we are proposing to remove from the OPPS IPO list for CY
2018 according to the criteria for inclusion on the list of ASC covered
surgical procedures, and considered whether they should be added to the
list of ASC covered surgical procedures for CY 2018. Because our
understanding is that these procedures typically require more than 24
hours of active medical care following the procedure, we believe they
should continue to be excluded from the list of ASC covered surgical
procedures.
In the CY 2017 OPPS/ASC proposed rule (81 FR 45679 through 45681),
we solicited comments regarding whether the TKA procedure described by
CPT code 27447 should be removed from the OPPS inpatient only list.
During the comment period, some stakeholders requested that CMS also
add the TKA procedure to the list of surgical procedures covered in an
ASC setting. In the CY 2017 proposed rule, we only solicited public
comments on removing the TKA procedure from the OPPS inpatient only
list for CY 2017. However, in this CY 2018 proposed rule, we are
proposing to remove the TKA procedure from the OPPS inpatient only list
for CY 2018, as discussed in section IX. of this proposed rule. In
light of the public comments we received on the CY 2017 proposed rule
(81 FR 79697 through 79699) and our proposal to remove the TKA
procedure from the OPPS IPO list for CY 2018, in this proposed rule, we
are soliciting public comments on whether the TKA procedure should also
be added to the ASC list of covered surgical procedures. We also are
inviting public comments on our proposed continued exclusion of CPT
code 55866 from the list of ASC covered surgical procedures.
In considering whether or not the TKA procedure should be added to
the ASC list of covered surgical procedures, we are requesting that
commenters take into consideration the regulations at 42 CFR 416.2 and
416.166. For example, commenters should assess whether this procedure
would be expected to pose a significant risk to beneficiary safety when
performed in an ASC, whether standard medical practice dictates that
the beneficiary would typically be expected to require active medical
monitoring and care at midnight following the procedure (``overnight
stay''), and whether this procedure would fall under our general
exclusions for covered surgical procedures at 42 CFR 416.166(c) (for
example, would it generally result in extensive blood loss, require
major or prolonged invasion of body cavities, directly involve major
blood vessels, among others).
In addition, in this CY 2018 proposed rule, we are soliciting
comment on whether CPT codes 27125 (Hemiarthroplasty, hip, partial
(e.g., femoral stem prosthesis, bipolar arthroplasty)) and 27130
(Arthroplasty, acetabular and proximal femoral prosthetic replacement
(total hip arthroplasty), with or without autograft or allograft) meet
the criteria to be removed from the OPPS IPO list, as discussed in
section IX. of this proposed rule. As noted in that section, we also
are soliciting comment on whether these two procedures meet the
criteria to be added to the ASC covered surgical procedure list.
2. Covered Ancillary Services
Consistent with the established ASC payment system policy, we are
proposing to update the ASC list of covered ancillary services to
reflect the payment status for the services under the CY 2018 OPPS.
Maintaining consistency with the OPPS may result in proposed changes to
ASC payment indicators for some covered ancillary services because of
changes that are being proposed under the OPPS for CY 2018. For
example, if a covered ancillary service was separately paid under the
ASC payment system in CY 2017, but is proposed for packaged status
under the CY 2018 OPPS, to maintain consistency with the OPPS, we would
also propose to package the ancillary service under the ASC payment
system for CY 2018. We are proposing to continue this reconciliation of
packaged status for subsequent calendar years. Comment indicator
``CH'', which is discussed in section XII.F. of this proposed rule, is
used in Addendum BB to this proposed rule (which is available via the
Internet on the CMS Web site) to indicate covered ancillary services
for which we are proposing a change in the ASC payment indicator to
reflect a proposed change in the OPPS treatment of the service for CY
2018.
All ASC covered ancillary services and their proposed payment
indicators for CY 2018 are included in Addendum BB to this proposed
rule. We are inviting public comments on this proposal.
[[Page 33663]]
D. Proposed ASC Payment for Covered Surgical Procedures and Covered
Ancillary Services
1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
Our ASC payment policies for covered surgical procedures under the
revised ASC payment system are fully described in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66828 through 66831). Under our
established policy, we use the ASC standard ratesetting methodology of
multiplying the ASC relative payment weight for the procedure by the
ASC conversion factor for that same year to calculate the national
unadjusted payment rates for procedures with payment indicators ``G2''
and ``A2''. Payment indicator ``A2'' was developed to identify
procedures that were included on the list of ASC covered surgical
procedures in CY 2007 and, therefore, were subject to transitional
payment prior to CY 2011. Although the 4-year transitional period has
ended and payment indicator ``A2'' is no longer required to identify
surgical procedures subject to transitional payment, we retained
payment indicator ``A2'' because it is used to identify procedures that
are exempted from application of the office-based designation.
The rate calculation established for device-intensive procedures
(payment indicator ``J8'') is structured so that the packaged device
payment amount is the same as under the OPPS, and only the service
portion of the rate is subject to the ASC standard ratesetting
methodology. In the CY 2017 OPPS/ASC final rule with comment period (81
FR 79732 through 79753), we updated the CY 2016 ASC payment rates for
ASC covered surgical procedures with payment indicators of ``A2,''
``G2,'' and ``J8'' using CY 2015 data, consistent with the CY 2017 OPPS
update. We also updated payment rates for device-intensive procedures
to incorporate the CY 2017 OPPS device offset percentages calculated
under the standard APC ratesetting methodology as discussed earlier in
this section.
Payment rates for office-based procedures (payment indicators
``P2'', ``P3'', and ``R2'') are the lower of the MPFS nonfacility PE
RVU-based amount (we refer readers to the CY 2018 MPFS proposed rule)
or the amount calculated using the ASC standard ratesetting methodology
for the procedure. In the CY 2017 OPPS/ASC final rule with comment
period, we updated the payment amounts for office-based procedures
(payment indicators ``P2'', ``P3'', and ``R2'') using the most recent
available MPFS and OPPS data. We compared the estimated CY 2017 rate
for each of the office-based procedures, calculated according to the
ASC standard ratesetting methodology, to the MPFS nonfacility PE RVU-
based amount to determine which was lower and, therefore, would be the
CY 2017 payment rate for the procedure under our final policy for the
revised ASC payment system (Sec. 416.171(d)).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
75081), we finalized our proposal to calculate the CY 2014 payment
rates for ASC covered surgical procedures according to our established
methodologies, with the exception of device removal procedures. For CY
2014, we finalized a policy to conditionally package payment for device
removal codes under the OPPS. Under the OPPS, a conditionally packaged
code (status indicators ``Q1'' and ``Q2'') describes a HCPCS code where
the payment is packaged when it is provided with a significant
procedure but is separately paid when the service appears on the claim
without a significant procedure. Because ASC services always include a
covered surgical procedure, HCPCS codes that are conditionally packaged
under the OPPS are always packaged (payment indicator ``N1'') under the
ASC payment system. Under the OPPS, device removal procedures are
conditionally packaged and, therefore, would be packaged under the ASC
payment system. There would be no Medicare payment made when a device
removal procedure is performed in an ASC without another surgical
procedure included on the claim; therefore, no Medicare payment would
be made if a device was removed but not replaced. To address this
concern, for the device removal procedures that are conditionally
packaged in the OPPS (status indicator ``Q2''), we assigned the current
ASC payment indicators associated with these procedures and continued
to provide separate payment since CY 2014.
b. Proposed Update to ASC Covered Surgical Procedure Payment Rates for
CY 2018
We are proposing to update ASC payment rates for CY 2018 and
subsequent years using the established rate calculation methodologies
under Sec. 416.171 and using our definition of device-intensive
procedures, as discussed in section XII.C.1.b. of this proposed rule.
Because the proposed OPPS relative payment weights are based on
geometric mean costs, the ASC system would use geometric means to
determine proposed relative payment weights under the ASC standard
methodology. We are proposing to continue to use the amount calculated
under the ASC standard ratesetting methodology for procedures assigned
payment indicators ``A2'' and ``G2''.
We are proposing to calculate payment rates for office-based
procedures (payment indicators ``P2'', ``P3'', and ``R2'') and device-
intensive procedures (payment indicator ``J8'') according to our
established policies and, for device-intensive procedures, using our
modified definition of device-intensive procedures, as discussed in
section XII.C.1.b. of this proposed rule. Therefore, we are proposing
to update the payment amount for the service portion of the device-
intensive procedures using the ASC standard ratesetting methodology and
the payment amount for the device portion based on the proposed CY 2018
OPPS device offset percentages that have been calculated using the
standard OPPS APC ratesetting methodology. Payment for office-based
procedures would be at the lesser of the proposed CY 2018 MPFS
nonfacility PE RVU-based amount or the proposed CY 2018 ASC payment
amount calculated according to the ASC standard ratesetting
methodology.
As we did for CYs 2014 through 2017, for CY 2018, we are proposing
to continue our policy for device removal procedures such that device
removal procedures that are conditionally packaged in the OPPS (status
indicators ``Q1'' and ``Q2'') would be assigned the current ASC payment
indicators associated with these procedures and would continue to be
paid separately under the ASC payment system.
We are inviting public comments on these proposals.
2. Proposed Payment for Covered Ancillary Services
a. Background
Our payment policies under the ASC payment system for covered
ancillary services vary according to the particular type of service and
its payment policy under the OPPS. Our overall policy provides separate
ASC payment for certain ancillary items and services integrally related
to the provision of ASC covered surgical procedures that are paid
separately under the OPPS and provides packaged ASC payment for other
ancillary items and services that are packaged or conditionally
packaged (status indicators ``N'', ``Q1'', and ``Q2'') under the OPPS.
In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 FR 68457 through
68458), we further
[[Page 33664]]
clarified our policy regarding the payment indicator assignment of
codes that are conditionally packaged in the OPPS (status indicators
``Q1'' and ``Q2''). Under the OPPS, a conditionally packaged code
describes a HCPCS code where the payment is packaged when it is
provided with a significant procedure but is separately paid when the
service appears on the claim without a significant procedure. Because
ASC services always include a surgical procedure, HCPCS codes that are
conditionally packaged under the OPPS are always packaged (payment
indictor ``N1'') under the ASC payment system (except for device
removal codes as discussed in section IV. of this proposed rule). Thus,
our policy generally aligns ASC payment bundles with those under the
OPPS (72 FR 42495). In all cases, in order for those ancillary services
also to be paid, ancillary items and services must be provided integral
to the performance of ASC covered surgical procedures for which the ASC
bills Medicare.
Our ASC payment policies provide separate payment for drugs and
biologicals that are separately paid under the OPPS at the OPPS rates.
We generally pay for separately payable radiology services at the lower
of the MPFS nonfacility PE RVU-based (or technical component) amount or
the rate calculated according to the ASC standard ratesetting
methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/
ASC final rule with comment period (75 FR 72050), payment indicators
for all nuclear medicine procedures (defined as CPT codes in the range
of 78000 through 78999) that are designated as radiology services that
are paid separately when provided integral to a surgical procedure on
the ASC list are set to ``Z2'' so that payment is made based on the ASC
standard ratesetting methodology rather than the MPFS nonfacility PE
RVU amount (``Z3''), regardless of which is lower.
Similarly, we also finalized our policy to set the payment
indicator to ``Z2'' for radiology services that use contrast agents so
that payment for these procedures will be based on the OPPS relative
payment weight using the ASC standard ratesetting methodology and,
therefore, will include the cost for the contrast agent (42 CFR
416.171(d)(2)).
ASC payment policy for brachytherapy sources mirrors the payment
policy under the OPPS. ASCs are paid for brachytherapy sources provided
integral to ASC covered surgical procedures at prospective rates
adopted under the OPPS or, if OPPS rates are unavailable, at
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs
have been paid for brachytherapy sources provided integral to ASC
covered surgical procedures at prospective rates adopted under the
OPPS.
Our ASC policies also provide separate payment for: (1) Certain
items and services that CMS designates as contractor-priced, including,
but not limited to, the procurement of corneal tissue; and (2) certain
implantable items that have pass-through payment status under the OPPS.
These categories do not have prospectively established ASC payment
rates according to ASC payment system policies (72 FR 42502 and 42508
through 42509; 42 CFR 416.164(b)). Under the ASC payment system, we
have designated corneal tissue acquisition and hepatitis B vaccines as
contractor-priced. Corneal tissue acquisition is contractor-priced
based on the invoiced costs for acquiring the corneal tissue for
transplantation. Hepatitis B vaccines are contractor-priced based on
invoiced costs for the vaccine.
Devices that are eligible for pass-through payment under the OPPS
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for
the surgical procedure associated with the pass-through device is made
according to our standard methodology for the ASC payment system, based
on only the service (nondevice) portion of the procedure's OPPS
relative payment weight if the APC weight for the procedure includes
other packaged device costs. We also refer to this methodology as
applying a ``device offset'' to the ASC payment for the associated
surgical procedure. This ensures that duplicate payment is not provided
for any portion of an implanted device with OPPS pass-through payment
status.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933
through 66934), we finalized that, beginning in CY 2015, certain
diagnostic tests within the medicine range of CPT codes for which
separate payment is allowed under the OPPS are covered ancillary
services when they are integral to an ASC covered surgical procedure.
We finalized that diagnostic tests within the medicine range of CPT
codes include all Category I CPT codes in the medicine range
established by CPT, from 90000 to 99999, and Category III CPT codes and
Level II HCPCS codes that describe diagnostic tests that crosswalk or
are clinically similar to procedures in the medicine range established
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also
finalized our policy to pay for these tests at the lower of the MPFS
nonfacility PE RVU-based (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (79 FR
66933 through 66934). We finalized that the diagnostic tests for which
the payment is based on the ASC standard ratesetting methodology be
assigned to payment indicator ``Z2'' and revised the definition of
payment indicator ``Z2'' to include reference to diagnostic services
and those for which the payment is based on the MPFS nonfacility PE
RVU-based amount be assigned payment indicator ``Z3,'' and revised the
definition of payment indicator ``Z3'' to include reference to
diagnostic services.
b. Proposed Payment for Covered Ancillary Services for CY 2018
For CY 2018 and subsequent years, we are proposing to update the
ASC payment rates and to make changes to ASC payment indicators as
necessary to maintain consistency between the OPPS and ASC payment
system regarding the packaged or separately payable status of services
and the proposed CY 2018 OPPS and ASC payment rates and subsequent year
payment rates. We also are proposing to continue to set the CY 2018 ASC
payment rates and subsequent year payment rates for brachytherapy
sources and separately payable drugs and biologicals equal to the OPPS
payment rates for CY 2018 and subsequent year payment rates.
Covered ancillary services and their proposed payment indicators
for CY 2018 are listed in Addendum BB to this proposed rule (which is
available via the Internet on the CMS Web site). For those covered
ancillary services where the payment rate is the lower of the proposed
rates under the ASC standard ratesetting methodology and the MPFS
proposed rates, the proposed payment indicators and rates set forth in
this proposed rule are based on a comparison using the proposed MPFS
rates effective January 1, 2018. For a discussion of the MPFS rates, we
refer readers to the CY 2018 MPFS proposed rule that is available on
the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
E. New Technology Intraocular Lenses (NTIOLs)
1. NTIOL Application Cycle
Our process for reviewing applications to establish new classes of
NTIOLs is as follows:
[[Page 33665]]
Applicants submit their NTIOL requests for review to CMS
by the annual deadline. For a request to be considered complete, we
require submission of the information that is found in the guidance
document entitled ``Application Process and Information Requirements
for Requests for a New Class of New Technology Intraocular Lenses
(NTIOLs) or Inclusion of an IOL in an Existing NTIOL Class'' posted on
the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
We announce annually, in the proposed rule updating the
ASC and OPPS payment rates for the following calendar year, a list of
all requests to establish new NTIOL classes accepted for review during
the calendar year in which the proposal is published. In accordance
with section 141(b)(3) of Public Law 103-432 and our regulations at 42
CFR 416.185(b), the deadline for receipt of public comments is 30 days
following publication of the list of requests in the proposed rule.
In the final rule updating the ASC and OPPS payment rates
for the following calendar year, we--
++ Provide a list of determinations made as a result of our review
of all new NTIOL class requests and public comments;
++ When a new NTIOL class is created, identify the predominant
characteristic of NTIOLs in that class that sets them apart from other
IOLs (including those previously approved as members of other expired
or active NTIOL classes) and that is associated with an improved
clinical outcome.
++ Set the date of implementation of a payment adjustment in the
case of approval of an IOL as a member of a new NTIOL class
prospectively as of 30 days after publication of the ASC payment update
final rule, consistent with the statutory requirement.
++ Announce the deadline for submitting requests for review of an
application for a new NTIOL class for the following calendar year.
2. Requests to Establish New NTIOL Classes for CY 2018
We did not receive any requests for review to establish a new NTIOL
class for CY 2018 by March 1, 2017, the due date published in the CY
2017 OPPS/ASC final rule with comment period (81 FR 79748).
3. Payment Adjustment
The current payment adjustment for a 5-year period from the
implementation date of a new NTIOL class is $50 per lens. Since
implementation of the process for adjustment of payment amounts for
NTIOLs in 1999, we have not revised the payment adjustment amount, and
we are not proposing to revise the payment adjustment amount for CY
2018.
F. Proposed ASC Payment and Comment Indicators
1. Background
In addition to the payment indicators that we introduced in the
August 2, 2007 final rule, we created final comment indicators for the
ASC payment system in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66855). We created Addendum DD1 to define ASC payment
indicators that we use in Addenda AA and BB to provide payment
information regarding covered surgical procedures and covered ancillary
services, respectively, under the revised ASC payment system. The ASC
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or
separate payment in ASCs, such as whether they were on the ASC list of
covered services prior to CY 2008; payment designation, such as device-
intensive or office-based, and the corresponding ASC payment
methodology; and their classification as separately payable ancillary
services, including radiology services, brachytherapy sources, OPPS
pass-through devices, corneal tissue acquisition services, drugs or
biologicals, or NTIOLs.
We also created Addendum DD2 that lists the ASC comment indicators.
The ASC comment indicators used in Addenda AA and BB to the proposed
rules and final rules with comment period serve to identify, for the
revised ASC payment system, the status of a specific HCPCS code and its
payment indicator with respect to the timeframe when comments will be
accepted. The comment indicator ``NP'' is used in the OPPS/ASC proposed
rule to indicate new codes for the next calendar year for which the
interim payment indicator assigned is subject to comment. The comment
indicator ``NP'' also is assigned to existing codes with substantial
revisions to their descriptors such that we consider them to be
describing new services, as discussed in the CY 2010 OPPS/ASC final
rule with comment period (74 FR 60622). In the CY 2017 OPPS/ASC final
rule with comment period, we responded to public comments and finalized
the ASC treatment of all codes that were labeled with comment indicator
``NP'' in Addenda AA and BB to the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70497).
The ``CH'' comment indicator is used in Addenda AA and BB to the
proposed rule (which are available via the Internet on the CMS Web
site) to indicate that the payment indicator assignment has changed for
an active HCPCS code in the current year and the next calendar year; an
active HCPCS code is newly recognized as payable in ASCs; or an active
HCPCS code is discontinued at the end of the current calendar year. The
``CH'' comment indicators that are published in the final rule with
comment period are provided to alert readers that a change has been
made from one calendar year to the next, but do not indicate that the
change is subject to comment.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79748
through 79749), for CY 2017 and subsequent years, we finalized our
policy to continue using the current comment indicators of ``NP'' and
``CH''.
2. Proposed ASC Payment and Comment Indicators
For CY 2018, there are proposed new and revised Category I and III
CPT codes as well as new and revised Level II HCPCS codes. Therefore,
proposed Category I and III CPT codes that are new and revised for CY
2017 and any new and existing Level II HCPCS codes with substantial
revisions to the code descriptors for CY 2018 compared to the CY 2017
descriptors that are included in ASC Addenda AA and BB to this proposed
rule are labeled with proposed new comment indicator ``NP'' to indicate
that these CPT and Level II HCPCS codes are open for comment as part of
this proposed rule. Proposed new comment indicator ``NP'' means a new
code for the next calendar year or an existing code with substantial
revision to its code descriptor in the next calendar year as compared
to current calendar year; comments will be accepted on the proposed ASC
payment indicator for the new code.
We will respond to public comments on ASC payment and comment
indicators and finalize their ASC assignment in the CY 2018 OPPS/ASC
final rule with comment period. We refer readers to Addenda DD1 and DD2
to this proposed rule (which are available via the Internet on the CMS
Web site) for the complete list of ASC payment and comment indicators
proposed for the CY 2018 update.
[[Page 33666]]
G. Calculation of the Proposed ASC Conversion Factor and the Proposed
ASC Payment Rates
1. Background
In the August 2, 2007 final rule (72 FR 42493), we established our
policy to base ASC relative payment weights and payment rates under the
revised ASC payment system on APC groups and the OPPS relative payment
weights. Consistent with that policy and the requirement at section
1833(i)(2)(D)(ii) of the Act that the revised payment system be
implemented so that it would be budget neutral, the initial ASC
conversion factor (CY 2008) was calculated so that estimated total
Medicare payments under the revised ASC payment system in the first
year would be budget neutral to estimated total Medicare payments under
the prior (CY 2007) ASC payment system (the ASC conversion factor is
multiplied by the relative payment weights calculated for many ASC
services in order to establish payment rates). That is, application of
the ASC conversion factor was designed to result in aggregate Medicare
expenditures under the revised ASC payment system in CY 2008 being
equal to aggregate Medicare expenditures that would have occurred in CY
2008 in the absence of the revised system, taking into consideration
the cap on ASC payments in CY 2007 as required under section
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the
system budget neutral in subsequent calendar years (72 FR 42532 through
42533; 42 CFR 416.171(e)).
We note that we consider the term ``expenditures'' in the context
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
the Act to mean expenditures from the Medicare Part B Trust Fund. We do
not consider expenditures to include beneficiary coinsurance and
copayments. This distinction was important for the CY 2008 ASC budget
neutrality model that considered payments across the OPPS, ASC, and
MPFS payment systems. However, because coinsurance is almost always 20
percent for ASC services, this interpretation of expenditures has
minimal impact for subsequent budget neutrality adjustments calculated
within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
through 66858), we set out a step-by-step illustration of the final
budget neutrality adjustment calculation based on the methodology
finalized in the August 2, 2007 final rule (72 FR 42521 through 42531)
and as applied to updated data available for the CY 2008 OPPS/ASC final
rule with comment period. The application of that methodology to the
data available for the CY 2008 OPPS/ASC final rule with comment period
resulted in a budget neutrality adjustment of 0.65.
For CY 2008, we adopted the OPPS relative payment weights as the
ASC relative payment weights for most services and, consistent with the
final policy, we calculated the CY 2008 ASC payment rates by
multiplying the ASC relative payment weights by the final CY 2008 ASC
conversion factor of $41.401. For covered office-based surgical
procedures, covered ancillary radiology services (excluding covered
ancillary radiology services involving certain nuclear medicine
procedures or involving the use of contrast agents, as discussed in
section XII.D.2. of this proposed rule), and certain diagnostic tests
within the medicine range that are covered ancillary services, the
established policy is to set the payment rate at the lower of the MPFS
unadjusted nonfacility PE RVU-based amount or the amount calculated
using the ASC standard ratesetting methodology. Further, as discussed
in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66841
through 66843), we also adopted alternative ratesetting methodologies
for specific types of services (for example, device-intensive
procedures).
As discussed in the August 2, 2007 final rule (72 FR 42517 through
42518) and as codified at Sec. 416.172(c) of the regulations, the
revised ASC payment system accounts for geographic wage variation when
calculating individual ASC payments by applying the pre-floor and pre-
reclassified IPPS hospital wage indexes to the labor-related share,
which is 50 percent of the ASC payment amount based on a GAO report of
ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted
for geographic wage variation in labor cost when calculating individual
ASC payments by applying the pre-floor and pre-reclassified hospital
wage index values that CMS calculates for payment under the IPPS, using
updated Core Based Statistical Areas (CBSAs) issued by OMB in June
2003.
The reclassification provision in section 1886(d)(10) of the Act is
specific to hospitals. We believe that using the most recently
available pre-floor and pre-reclassified IPPS hospital wage indexes
results in the most appropriate adjustment to the labor portion of ASC
costs. We continue to believe that the unadjusted hospital wage
indexes, which are updated yearly and are used by many other Medicare
payment systems, appropriately account for geographic variation in
labor costs for ASCs. Therefore, the wage index for an ASC is the pre-
floor and pre-reclassified hospital wage index under the IPPS of the
CBSA that maps to the CBSA where the ASC is located.
On February 28, 2013, OMB issued OMB Bulletin No. 13-01, which
provides the delineations of all Metropolitan Statistical Areas,
Metropolitan Divisions, Micropolitan Statistical Areas, Combined
Statistical Areas, and New England City and Town Areas in the United
States and Puerto Rico based on the standards published on June 28,
2010 in the Federal Register (75 FR 37246 through 37252) and 2010
Census Bureau data. (A copy of this bulletin may be obtained at:
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf.) In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963), we implemented the use of the CBSA delineations issued
by OMB in OMB Bulletin 13-01 for the IPPS hospital wage index beginning
in FY 2015. In the CY 2015 OPPS/ASC final rule with comment period (79
FR 66937), we finalized a 1-year transition policy that we applied in
CY 2015 for all ASCs that experienced any decrease in their actual wage
index exclusively due to the implementation of the new OMB
delineations. This transition does not apply in CY 2018.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in
the years between the decennial censuses. On July 15, 2015, OMB issued
OMB Bulletin No. 15-01, which provides updates to and supersedes OMB
Bulletin No. 13-01 that was issued on February 28, 2013. The attachment
to OMB Bulletin No. 15-01 provides detailed information on the update
to statistical areas since February 28, 2013. The updates provided in
OMB Bulletin No. 15-01 are based on the application of the 2010
Standards for Delineating Metropolitan and Micropolitan Statistical
Areas to Census Bureau population estimates for July 1, 2012 and July
1, 2013. The complete list of statistical areas incorporating these
changes is provided in the attachment to OMB Bulletin No. 15-01.
According to OMB, ``[t]his bulletin establishes revised delineations
for the Nation's Metropolitan Statistical Areas, Micropolitan
Statistical Areas, and Combined Statistical Areas. The bulletin also
provides delineations of Metropolitan Divisions as well as delineations
of New England City and
[[Page 33667]]
Town Areas.'' A copy of this bulletin may be obtained on the Web site
at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf.
OMB Bulletin No. 15-01 made changes that are relevant to the IPPS
and ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79750) for a discussion of these changes and
our implementation of these revisions.
For CY 2018, the proposed CY 2018 ASC wage indexes fully reflect
the OMB labor market area delineations (including the revisions to the
OMB labor market delineations discussed above, as set forth in OMB
Bulletin No. 15-01).
We note that, in certain instances, there might be urban or rural
areas for which there is no IPPS hospital that has wage index data that
could be used to set the wage index for that area. For these areas, our
policy has been to use the average of the wage indexes for CBSAs (or
metropolitan divisions as applicable) that are contiguous to the area
that has no wage index (where ``contiguous'' is defined as sharing a
border). For example, for CY 2014, we applied a proxy wage index based
on this methodology to ASCs located in CBSA 25980 (Hinesville-Fort
Stewart, GA) and CBSA 08 (Rural Delaware).
When all of the areas contiguous to the urban CBSA of interest are
rural and there is no IPPS hospital that has wage index data that could
be used to set the wage index for that area, we determine the ASC wage
index by calculating the average of all wage indexes for urban areas in
the State (75 FR 72058 through 72059). (In other situations, where
there are no IPPS hospitals located in a relevant labor market area, we
continue our current policy of calculating an urban or rural area's
wage index by calculating the average of the wage indexes for CBSAs (or
metropolitan divisions where applicable) that are contiguous to the
area with no wage index.)
2. Proposed Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2018 and Future
Years
We update the ASC relative payment weights each year using the
national OPPS relative payment weights (and MPFS nonfacility PE RVU-
based amounts, as applicable) for that same calendar year and uniformly
scale the ASC relative payment weights for each update year to make
them budget neutral (72 FR 42533). Consistent with our established
policy, we are proposing to scale the CY 2018 relative payment weights
for ASCs according to the following method. Holding ASC utilization,
the ASC conversion factor, and the mix of services constant from CY
2016, we are proposing to compare the total payment using the CY 2017
ASC relative payment weights with the total payment using the CY 2018
ASC relative payment weights to take into account the changes in the
OPPS relative payment weights between CY 2017 and CY 2018. We are
proposing to use the ratio of CY 2017 to CY 2018 total payments (the
weight scalar) to scale the ASC relative payment weights for CY 2018.
The proposed CY 2018 ASC weight scalar is 0.8995 and scaling would
apply to the ASC relative payment weights of the covered surgical
procedures, covered ancillary radiology services, and certain
diagnostic tests within the medicine range of CPT codes which are
covered ancillary services for which the ASC payment rates are based on
OPPS relative payment weights.
Scaling would not apply in the case of ASC payment for separately
payable covered ancillary services that have a predetermined national
payment amount (that is, their national ASC payment amounts are not
based on OPPS relative payment weights), such as drugs and biologicals
that are separately paid or services that are contractor-priced or paid
at reasonable cost in ASCs. Any service with a predetermined national
payment amount would be included in the ASC budget neutrality
comparison, but scaling of the ASC relative payment weights would not
apply to those services. The ASC payment weights for those services
without predetermined national payment amounts (that is, those services
with national payment amounts that would be based on OPPS relative
payment weights) would be scaled to eliminate any difference in the
total payment between the current year and the update year.
For any given year's ratesetting, we typically use the most recent
full calendar year of claims data to model budget neutrality
adjustments. At the time of this proposed rule, we have available 98
percent of CY 2016 ASC claims data.
To create an analytic file to support calculation of the weight
scalar and budget neutrality adjustment for the wage index (discussed
below), we summarized available CY 2016 ASC claims by ASC and by HCPCS
code. We used the National Provider Identifier for the purpose of
identifying unique ASCs within the CY 2016 claims data. We used the
supplier zip code reported on the claim to associate State, county, and
CBSA with each ASC. This file, available to the public as a supporting
data file for the proposed rule, is posted on the CMS Web site at:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/ASCPaymentSystem.html.
b. Updating the ASC Conversion Factor
Under the OPPS, we typically apply a budget neutrality adjustment
for provider level changes, most notably a change in the wage index
values for the upcoming year, to the conversion factor. Consistent with
our final ASC payment policy, for the CY 2017 ASC payment system and
subsequent years, in the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79751 through 79753), we finalized our policy to
calculate and apply a budget neutrality adjustment to the ASC
conversion factor for supplier level changes in wage index values for
the upcoming year, just as the OPPS wage index budget neutrality
adjustment is calculated and applied to the OPPS conversion factor. For
CY 2018, we calculated this proposed adjustment for the ASC payment
system by using the most recent CY 2016 claims data available and
estimating the difference in total payment that would be created by
introducing the proposed CY 2018 ASC wage indexes. Specifically,
holding CY 2016 ASC utilization and service-mix and the proposed CY
2018 national payment rates after application of the weight scalar
constant, we calculated the total adjusted payment using the CY 2017
ASC wage indexes (which would fully reflect the new OMB delineations)
and the total adjusted payment using the proposed CY 2018 ASC wage
indexes. We used the 50-percent labor-related share for both total
adjusted payment calculations. We then compared the total adjusted
payment calculated with the CY 2017 ASC wage indexes to the total
adjusted payment calculated with the proposed CY 2018 ASC wage indexes
and applied the resulting ratio of 1.0004 (the proposed CY 2018 ASC
wage index budget neutrality adjustment) to the CY 2017 ASC conversion
factor to calculate the proposed CY 2018 ASC conversion factor.
Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary
has not updated amounts established under the revised ASC payment
system in a calendar year, the payment amounts shall be increased by
the percentage increase in the Consumer Price Index for all urban
consumers (CPI-U), U.S. city average, as estimated by the Secretary for
the 12-month period
[[Page 33668]]
ending with the midpoint of the year involved. Therefore, the statute
does not mandate the adoption of any particular update mechanism, but
it requires the payment amounts to be increased by the CPI-U in the
absence of any update. Because the Secretary updates the ASC payment
amounts annually, we adopted a policy, which we codified at 42 CFR
416.171(a)(2)(ii), to update the ASC conversion factor using the CPI-U
for CY 2010 and subsequent calendar years. Therefore, the annual update
to the ASC payment system is the CPI-U (referred to as the CPI-U update
factor).
Section 3401(k) of the Affordable Care Act amended section
1833(i)(2)(D) of the Act by adding a new clause (v) which requires that
any annual update under the ASC payment system for the year, after
application of clause (iv), shall be reduced by the productivity
adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act,
effective with the calendar year beginning January 1, 2011. The statute
defines the productivity adjustment to be equal to the 10-year moving
average of changes in annual economy-wide private nonfarm business
multifactor productivity (MFP) (as projected by the Secretary for the
10-year period ending with the applicable fiscal year, year, cost
reporting period, or other annual period) (the ``MFP adjustment'').
Clause (iv) of section 1833(i)(2)(D) of the Act authorizes the
Secretary to provide for a reduction in any annual update for failure
to report on quality measures. Clause (v) of section 1833(i)(2)(D) of
the Act states that application of the MFP adjustment to the ASC
payment system may result in the update to the ASC payment system being
less than zero for a year and may result in payment rates under the ASC
payment system for a year being less than such payment rates for the
preceding year.
In the CY 2012 OPPS/ASC final rule with comment period (76 FR
74516), we finalized a policy that ASCs begin submitting data on
quality measures for services beginning on October 1, 2012 for the CY
2014 payment determination under the ASC Quality Reporting (ASCQR)
Program. In the CY 2013 OPPS/ASC final rule with comment period (77 FR
68499 through 68500), we finalized a methodology to calculate reduced
national unadjusted payment rates using the ASCQR Program reduced
update conversion factor that would apply to ASCs that fail to meet
their quality reporting requirements for the CY 2014 payment
determination and subsequent years. The application of the 2.0
percentage point reduction to the annual update factor, which currently
is the CPI-U, may result in the update to the ASC payment system being
less than zero for a year for ASCs that fail to meet the ASCQR Program
requirements. We amended Sec. Sec. 416.160(a)(1) and 416.171 to
reflect these policies.
In accordance with section 1833(i)(2)(C)(i) of the Act, before
applying the MFP adjustment, the Secretary first determines the
``percentage increase'' in the CPI-U, which we interpret cannot be a
negative percentage. Thus, in the instance where the percentage change
in the CPI-U for a year is negative, we would hold the CPI-U update
factor for the ASC payment system to zero. For the CY 2014 payment
determination and subsequent years, under section 1833(i)(2)(D)(iv) of
the Act, we would reduce the annual update by 2.0 percentage points for
an ASC that fails to submit quality information under the rules
established by the Secretary in accordance with section 1833(i)(7) of
the Act. Section 1833(i)(2)(D)(v) of the Act, as added by section
3401(k) of the Affordable Care Act, requires that the Secretary reduce
the annual update factor, after application of any quality reporting
reduction, by the MFP adjustment, and states that application of the
MFP adjustment to the annual update factor after application of any
quality reporting reduction may result in the update being less than
zero for a year. If the application of the MFP adjustment to the annual
update factor after application of any quality reporting reduction
would result in an MFP-adjusted update factor that is less than zero,
the resulting update to the ASC payment rates would be negative and
payments would decrease relative to the prior year. We refer readers to
the CY 2011 OPPS/ASC final rule with comment period (75 FR 72062
through 72064) for examples of how the MFP adjustment is applied to the
ASC payment system.
For this proposed rule, based on IHS Global Insight's (IGI's) 2017
first quarter forecast with historical data through the fourth quarter
of 2016, for the 12-month period ending with the midpoint of CY 2018,
the CPI-U update was projected to be 2.3 percent. Also, based on IGI's
2017 first quarter forecast, the MFP adjustment for the period ending
with the midpoint of CY 2018 was projected to be 0.4 percent. We
finalized the methodology for calculating the MFP adjustment in the CY
2011 MPFS final rule with comment period (75 FR 73394 through 73396)
and revised it in the CY 2012 MPFS final rule with comment period (76
FR 73300 through 73301) and the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70500 through 70501).
For CY 2018, we are proposing to reduce the CPI-U update of 2.3
percent by the MFP adjustment of 0.4 percentage point, resulting in an
MFP-adjusted CPI-U update factor of 1.9 percent for ASCs meeting the
quality reporting requirements. Therefore, we are proposing to apply a
1.9 percent MFP-adjusted CPI-U update factor to the CY 2017 ASC
conversion factor for ASCs meeting the quality reporting requirements.
The ASCQR Program affected payment rates beginning in CY 2014 and,
under this program, there is a 2.0 percentage point reduction to the
CPI-U for ASCs that fail to meet the ASCQR Program requirements. We are
proposing to reduce the CPI-U update of 2.3 percent by 2.0 percentage
points for ASCs that do not meet the quality reporting requirements and
then apply the 0.4 percentage point MFP adjustment. Therefore, we are
proposing to apply a -0.1 percent MFP-adjusted CPI-U update factor to
the CY 2017 ASC conversion factor for ASCs not meeting the quality
reporting requirements. We also are proposing that if more recent data
are subsequently available (for example, a more recent estimate of the
CY 2018 CPI-U update and MFP adjustment), we would use such data, if
appropriate, to determine the CY 2018 ASC update for the final rule
with comment period.
For CY 2018, we are proposing to adjust the CY 2017 ASC conversion
factor ($45.003) by the proposed wage index budget neutrality factor of
1.0004 in addition to the MFP-adjusted CPI-U update factor of 1.9
percent discussed above, which results in a proposed CY 2018 ASC
conversion factor of $45.876 for ASCs meeting the quality reporting
requirements. For ASCs not meeting the quality reporting requirements,
we are proposing to adjust the CY 2017 ASC conversion factor ($45.003)
by the proposed wage index budget neutrality factor of 1.0004 in
addition to the quality reporting/MFP-adjusted CPI-U update factor of -
0.1 percent discussed above, which results in a proposed CY 2018 ASC
conversion factor of $44.976.
We are inviting public comments on these proposals.
4. Comment Solicitation on ASC Payment Reform
a. Historical Perspective
In 1982, Medicare implemented the ASC benefit to provide payment to
ASCs to perform certain covered surgical procedures.\24\ ASCs were
recognized by Medicare as a less costly
[[Page 33669]]
alternative to hospital inpatient care given differences in patient
acuity and specialization of services which promotes efficient and
cost-effective delivery of care. Medicare's initial payment rates to
ASCs were based on ASC historical cost and charge data from 1979 and
1980 collected from approximately 40 ASCs and used to establish four
facility payment rate groups (55 FR 4527).
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\24\ Omnibus Reconciliation Act of 1980 (ORA), Pub. L. 96-499,
934(b), 94 Stat. 2599, 2637 (codified, as amended, at 42 U.S.C.
1395l(i)).
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The ASC facility payment rate was set as a standard overhead amount
based on CMS' (known then as the Health Care Financing Administration
(HCFA)) estimate of a fair fee, taking into account the costs incurred
by ASCs generally in providing facility services in connection with the
performance of a specific procedure. The Report of the Conference
Committee accompanying section 934 of the Omnibus Budget Reconciliation
Act of 1980 (P.L. 96-499), which enacted the ASC benefit in December
1980, states, ``This overhead factor is expected to be calculated on a
prospective basis * * * utilizing sample survey and similar techniques
to establish reasonable estimated overhead allowances for each of the
listed procedures which take account of volume (within reasonable
limits)'' (H.R. Rep. No 7479, 96th Cong., 2nd Sess. 134 (1980)).
In 1987, we updated the ASC facility payment rates for the first
time since 1982. The updated rates were based on the projected increase
in the CPI-U from September 1982 to January 1988. CMS (then, HCFA)
rebased payments to ASCs in 1990, relying on a survey of 1986 ASC cost,
charge, and utilization data. The ASC payments were updated annually
based on the 1986 cost data until implementation of the revised ASC
payment system in 2008.
Congress directed the GAO to conduct a study comparing the relative
costs of procedures furnished in ASCs to those furnished in HOPDs paid
under the OPPS, including examining the accuracy of the APC codes with
respect to surgical procedures furnished in ASCs. On November 30, 2006,
the GAO published the statutorily mandated report entitled, ``Medicare:
Payment for Ambulatory Surgical Centers Should Be Based on the Hospital
Outpatient Payment System'' (GAO-07-86).\25\ As directed by section
626(d) of Pub. L. 108-173, the report included recommendations on the
following issues:
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\25\ https://www.gao.gov/assets/260/253992.pdf.
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1. Appropriateness of using groups of covered services and relative
weights established for the OPPS as the basis of payment for ASCs.
2. If the OPPS relative weights are appropriate for this purpose,
whether the ASC payments should be based on a uniform percentage of the
payment rates or weights under the OPPS, or should vary, or the weights
should be revised based on specific procedures or types of services.
3. Whether a geographic adjustment should be used for ASC payment
and, if so, the labor and nonlabor shares of such payment.
We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (71 FR 42474) for a detailed summary of the GAO's methodology,
results, and recommendations. Notably, based on the findings from the
study, the GAO recommended that CMS implement a payment system for
procedures performed in ASCs based on the OPPS, taking into account the
lower relative costs of procedures performed in ASCs compared to HOPDs
in determining ASC payment rates.
We considered the report's methodology, findings, and
recommendations implementing the current ASC payment system, effective
in 2008 (71 FR 42474). Consistent with statutory requirements and the
GAO's recommendations, we finalized policies to implement a revised ASC
payment system based on the OPPS resource costs and relativity of
service offerings.
The payment system for ASC facility services was designed as a
prospective payment system to pay all procedures included in an APC a
standard rate. Under a prospective payment system, payment is set to
reflect the average cost to furnish a service. That is, some cases may
be more costly than the average while others may be less costly. This
type of payment system inherently provides incentives for each facility
to be more efficient.
MedPAC conducts an annual review of the ASC payment system and
submits its findings and recommendations in a report to Congress. As
part of this review, MedPAC examines indicators such as beneficiaries'
access to care, capacity and supply of providers, and volume of
services, in part to assess the adequacy of Medicare payments to ASCs.
Based on its analysis of indicators of payment adequacy, in its March
2017 Report to Congress, MedPAC found that the number of Medicare-
certified ASCs had increased, beneficiaries' use of ASCs had increased,
and access to capital has been adequate. As a result, for CY 2018,
MedPAC stated that payments to ASCs are adequate and recommended that
no payment update should be given for 2018 (that is, the update factor
would be 0 percent). In addition, MedPAC recommended that Congress
require ASCs to report cost data to enable the Commission to examine
the growth of ASCs' costs over time and analyze Medicare payments
relative to the costs of efficient providers, which would help inform
decisions about the ASC update. Also, while MedPAC is concerned that
the CPI-U may not reflect ASCs' cost structure, until cost information
is available from ASCs, MedPAC cannot determine whether an alternative
update factor would be more appropriate.\26\
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\26\ MedPAC. March 2017 Report to Congress. Chapter 5
``Ambulatory Surgical Center Services''. https://www.medpac.gov/docs/default-source/reports/mar17_medpac_ch5.pdf?sfvrsn=0.
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b. Solicitation of Comments
We are broadly interested in feedback, including recommendations
and ideas for ASC payment system reform. We recognize that ASCs provide
a critically important access point to beneficiaries who may be too ill
or have the need for too complicated a procedure to be treated in the
physician office setting, but for whom hospital care is either not
medically necessary or undesirable. The current ASC payment system was
implemented in 2008 and major revisions have not been made since that
time. Average ASC payment rates have declined relative to OPPS payments
rates over the past 10 years, from 65 percent of average OPPS rates in
CY 2008 to 56 percent (as proposed) of average OPPS rates in CY 2018.
However, in the absence of ASC-specific cost data, it is difficult, if
not impossible, to determine whether ASC facility payment rates are in
line with ASC facility resource costs and the impact on beneficiary
access to care.
With respect to the update factor that is applied to ASC payments,
section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary has
not updated the payment amounts established under the revised ASC
payment system in a calendar year, the payment amounts shall be
increased by the percentage increase in the Consumer Price Index for
all urban consumers (CPI-U), (U.S. city average), as estimated by the
Secretary for the 12-month period ending with the midpoint of the year
involved. Therefore, the statute does not mandate the adoption of any
particular update mechanism, except in the absence of any update, when
it requires the payment amounts to be increased by the increase in the
CPI-U.
CMS adopted a policy, codified at 42 CFR 416.171(a)(2)(ii), to
update the ASC conversion factor using the CPI-U for CY 2010 and
subsequent calendar years.
[[Page 33670]]
Therefore, the annual update to the ASC payment system is the CPI-U
(referred to as the CPI-U update factor). This update factor is
adjusted by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act, as required by section
1833(i)(2)(D)(v) of the Act. In this proposed rule, we are soliciting
comment on the ASC payment system update factor and are interested in
data from ASCs that would help determine whether the ASC payment system
should continue to be updated by the CPI-U, or by an alternative update
factor, such as the hospital market basket, the Medicare Economic
Index, a blend of update factors or other mechanism. The hospital
market basket update is typically higher than the CPI-U, while the
Medicare Economic Index is typically lower. Because the rate update is
not applied in a budget neutral manner, applying a higher update factor
would be a cost to the Medicare program while applying a lower update
factor would result in savings to the Medicare program. As mentioned
above, in the absence of an alternative update, the Act requires
payments to ASCs to be increased in an amount equal to the percentage
increase in the CPI-U.
With respect to the ASC update, in its March 2017 Report to
Congress, MedPAC stated that ASCs have a much higher share of expenses
for supplies and drugs than do hospitals or physician offices, a much
smaller share of employee compensation costs than hospitals, and a
smaller share of all other costs (such as rent) than physician offices.
We are seeking public comment on information related to ASC costs for
items such as supplies, drugs, employee compensation, rent and other
inputs as compared to those of hospitals or physician offices,
including qualitative and quantitative data from ASCs. Information on
the cost structure of ASCs will help to identify an appropriate
alternative update factor.
In addition, we are seeking public comment on whether the Secretary
should collect cost data from ASCs to use in determining ASC payment
rates. To the extent commenters recommend that ASC cost data should be
used in the determination of ASC payment rates, we are seeking comment
on what specific method of cost collection commenters recommend (such
as cost reports or a survey). We recognize that the submission of costs
may be an administrative burden to ASCs, and we are interested in
comments that detail how we could mitigate the burden of reporting
costs on ASCs while also collecting enough data to reliably use such
data in the determination of ASC costs. We note that the ability to
calculate ASC-specific costs may obviate the need for tying the ASC
payment system to that of the OPPS. In addition, collecting cost data
from ASCs could inform whether an alternative input price index would
be an appropriate proxy for ASC costs or whether an ASC-specific market
basket should be developed.
With respect to the ability to adopt payment policies that exist
under the OPPS into the ASC payment system, as discussed in prior
rulemaking, due to differences in the systems used to process claims
for hospitals and ASCs, we were not able to implement certain OPPS
payment policies in the ASC payment system, such as comprehensive APCs,
conditional packaging, and the ``FD'' value modifier for device credits
(79 FR 66923). ASC facilities report services on a professional claim
(or CMS-1500) rather than an institutional claim (or UB-04) used by
hospitals. The ASC claim form is processed in the Medicare Claims
System (MCS), the same system used to process claims submitted by
physicians and other clinicians, while hospital claims are processed
through the Fiscal Intermediary Shared System (FISS). In part because
of differences in the claim form and the claims processing systems, it
is not always possible to adopt OPPS payment policies into the ASC
payment system. The resulting divergence in payment policies between
the two systems may contribute to unintended disparities in payment
rates for the same services. We are interested in stakeholder comments
on whether billing on an institutional claim form rather than a
professional claim form would address some of the issues affecting ASC
payment reform.
As noted earlier in this section, we are broadly interested in
feedback from stakeholders and other interested parties on potential
reforms to the current ASC payment system, including, but not limited
to (1) the rate update factor applied to ASC payments, (2) whether and
how ASCs should submit costs, (3) whether ASCs should bill on the
institutional claim form rather than the professional claim form, and
(4) other ideas to improve payment accuracy for ASCs.
5. Display of CY 2018 ASC Payment Rates
Addenda AA and BB to this proposed rule (which are available on the
CMS Web site) display the proposed updated ASC payment rates for CY
2018 for covered surgical procedures and covered ancillary services,
respectively. For those covered surgical procedures and covered
ancillary services where the payment rate is the lower of the final
rates under the ASC standard ratesetting methodology and the MPFS
proposed rates, the proposed payment indicators and rates set forth in
this proposed rule are based on a comparison using the proposed MPFS
rates that would be effective January 1, 2018. For a discussion of the
MPFS rates, we refer readers to the CY 2018 MPFS proposed rule.
The proposed payment rates included in these addenda reflect the
full ASC payment update and not the reduced payment update used to
calculate payment rates for ASCs not meeting the quality reporting
requirements under the ASCQR Program. These addenda contain several
types of information related to the proposed CY 2018 payment rates.
Specifically, in Addendum AA, a ``Y'' in the column titled ``To be
Subject to Multiple Procedure Discounting'' indicates that the surgical
procedure would be subject to the multiple procedure payment reduction
policy. As discussed in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66829 through 66830), most covered surgical procedures
are subject to a 50-percent reduction in the ASC payment for the lower-
paying procedure when more than one procedure is performed in a single
operative session.
Display of the comment indicator ``CH'' in the column titled
``Comment Indicator'' indicates a change in payment policy for the item
or service, including identifying discontinued HCPCS codes, designating
items or services newly payable under the ASC payment system, and
identifying items or services with changes in the ASC payment indicator
for CY 2018. Display of the comment indicator ``NI'' in the column
titled ``Comment Indicator'' indicates that the code is new (or
substantially revised) and that comments will be accepted on the
interim payment indicator for the new code. Display of the comment
indicator ``NP'' in the column titled ``Comment Indicator'' indicates
that the code is new (or substantially revised) and that comments will
be accepted on the ASC payment indicator for the new code.
The values displayed in the column titled ``Proposed CY 2018
Payment Weight'' are the proposed relative payment weights for each of
the listed services for CY 2018. The proposed relative payment weights
for all covered surgical procedures and covered ancillary services
where the ASC payment rates are based on OPPS relative payment weights
were scaled for budget neutrality. Therefore, scaling
[[Page 33671]]
was not applied to the device portion of the device-intensive
procedures, services that are paid at the MPFS nonfacility PE RVU-based
amount, separately payable covered ancillary services that have a
predetermined national payment amount, such as drugs and biologicals
and brachytherapy sources that are separately paid under the OPPS, or
services that are contractor-priced or paid at reasonable cost in ASCs.
To derive the proposed CY 2018 payment rate displayed in the
``Proposed CY 2018 Payment Rate'' column, each ASC payment weight in
the ``Proposed CY 2018 Payment Weight'' column was multiplied by the
proposed CY 2018 conversion factor of $45.876. The proposed conversion
factor includes a budget neutrality adjustment for changes in the wage
index values and the annual update factor as reduced by the
productivity adjustment (as discussed in section XII.G.2.b. of this
proposed rule).
In Addendum BB, there are no relative payment weights displayed in
the ``Proposed CY 2018 Payment Weight'' column for items and services
with predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Proposed CY 2018 Payment'' column displays
the proposed CY 2018 national unadjusted ASC payment rates for all
items and services. The proposed CY 2018 ASC payment rates listed in
Addendum BB for separately payable drugs and biologicals are based on
ASP data used for payment in physicians' offices in April 2017.
Addendum EE provides the HCPCS codes and short descriptors for
surgical procedures that are proposed to be excluded from payment in
ASCs for CY 2018. We are inviting public comments on these proposals.
XIII. Requirements for the Hospital Outpatient Quality Reporting (OQR)
Program
A. Background
1. Overview
CMS seeks to promote higher quality and more efficient healthcare
for Medicare beneficiaries. Consistent with these goals, CMS has
implemented quality reporting programs for multiple care settings
including the quality reporting program for hospital outpatient care,
known as the Hospital Outpatient Quality Reporting (OQR) Program,
formerly known as the Hospital Outpatient Quality Data Reporting
Program (HOP QDRP). The Hospital OQR Program is generally aligned with
the quality reporting program for hospital inpatient services known as
the Hospital Inpatient Quality Reporting (IQR) Program (formerly known
as the Reporting Hospital Quality Data for Annual Payment Update
(RHQDAPU) Program).
In addition to the Hospital IQR and Hospital OQR Programs, CMS has
implemented quality reporting programs for other care settings that
provide financial incentives for the reporting of quality data to CMS.
These additional programs include reporting for care furnished by:
Physicians and other eligible professionals, under the
Physician Quality Reporting System (PQRS, formerly referred to as the
Physician Quality Reporting Program Initiative (PQRI)). We note that
2018 is the last year of the PQRS payment adjustment. Beginning in
2019, eligible clinicians may be subject to upward or downward payment
adjustments under the Merit-based Incentive Payment System (MIPS) or be
able to earn a positive payment incentives through participation in
certain advanced alternative payment models (APMs) under the Quality
Payment Program (QPP) (81 FR 77008);
Inpatient rehabilitation facilities, under the Inpatient
Rehabilitation Facility Quality Reporting Program (IRF QRP);
Long-term care hospitals, under the Long-Term Care
Hospital Quality Reporting Program (LTCH QRP);
PPS-exempt cancer hospitals, under the PPS-Exempt Cancer
Hospital Quality Reporting (PCHQR) Program;
Ambulatory surgical centers, under the Ambulatory Surgical
Center Quality Reporting (ASCQR) Program;
Inpatient psychiatric facilities, under the Inpatient
Psychiatric Facility Quality Reporting (IPFQR) Program;
Home health agencies, under the Home Health Quality
Reporting Program (HH QRP); and
Hospices, under the Hospice Quality Reporting Program
(HQRP).
In addition, CMS has implemented several value-based purchasing
programs that link payment to performance, including the Hospital
Value-Based Purchasing (VBP) Program; the Hospital-Acquired Condition
(HAC) Reduction Program; and the End-Stage Renal Disease (ESRD) Quality
Incentive Program (QIP); and the Quality Payment Program (QPP).
In implementing the Hospital OQR Program and other quality
reporting programs, we have focused on measures that have high impact
and support national priorities for improved quality and efficiency of
care for Medicare beneficiaries as reflected in the National Quality
Strategy (NQS) and the CMS Quality Strategy for conditions with
reported wide cost and treatment variations despite established
clinical treatment guidelines. To the extent possible under various
authorizing statutes, our ultimate goal is to align the clinical
quality measure requirements of the various quality reporting programs.
As appropriate, we will consider the adoption of measures with
electronic specifications to enable the collection of this information
for our quality programs.
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68467 through 68469) for a discussion on the principles
underlying consideration for future measures that we intend to use in
implementing this and other quality reporting programs. In this
proposed rule, we are not proposing any changes to these policies.
2. Statutory History of the Hospital OQR Program
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72064 through 72065) for a detailed discussion of the
statutory history of the Hospital OQR Program.
3. Regulatory History of the Hospital OQR Program
We refer readers to the CY 2008 through 2017 OPPS/ASC final rules
with comment period (72 FR 66860 through 66875; 73 FR 68758 through
68779; 74 FR 60629 through 60656; 75 FR 72064 through 72110; 76 FR
74451 through 74492; 77 FR 68467 through 68492; 78 FR 75090 through
75120; 79 FR 66940 through 66966; 80 FR 70502 through 70526; and 81 FR
79753 through 79797). We have also codified certain requirements under
the Hospital OQR Program at 42 CFR 419.46. In this proposed rule, we
are proposing editorial changes to 42 CFR 419.46, replacing the terms
``Web'' and ``Web site'' with the terms ``web'' and ``Web site,''
respectively.
B. Hospital OQR Program Quality Measures
1. Considerations in the Selection of Hospital OQR Program Quality
Measures
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74458 through 74460) for a detailed discussion of the
priorities we consider for the Hospital OQR Program quality measure
selection. In this proposed rule, we are not proposing any changes to
our measure selection policy.
[[Page 33672]]
2. Accounting for Social Risk Factors in the Hospital OQR Program
We understand that social risk factors such as income, education,
race and ethnicity, employment, disability, community resources, and
social support (certain factors of which are also sometimes referred to
as socioeconomic status (SES) factors or socio-demographic status (SDS)
factors) play a major role in health. One of our core objectives is to
improve beneficiary outcomes including reducing health disparities, and
we want to ensure that all beneficiaries, including those with social
risk factors, receive high quality care. In addition, we seek to ensure
that the quality of care furnished by providers and suppliers is
assessed as fairly as possible under our programs while ensuring that
beneficiaries have adequate access to excellent care.
We have been reviewing reports prepared by the Office of the
Assistant Secretary for Planning and Evaluation (ASPE) \27\ and the
National Academies of Sciences, Engineering, and Medicine on the issue
of measuring and accounting for social risk factors in CMS' value-based
purchasing and quality reporting programs, and considering options on
how to address the issue in these programs. On December 21, 2016, ASPE
submitted a Report to Congress on a study it was required to conduct
under section 2(d) of the Improving Medicare Post-Acute Care
Transformation (IMPACT) Act of 2014. The study analyzed the effects of
certain social risk factors of Medicare beneficiaries on quality
measures and measures of resource use used in one or more of nine
Medicare value-based purchasing programs.\28\ The report also included
considerations for strategies to account for social risk factors in
these programs. In a January 10, 2017 report released by the National
Academies of Sciences, Engineering, and Medicine, that body provided
various potential methods for measuring and accounting for social risk
factors, including stratified public reporting.\29\
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\27\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs.
Available at: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\28\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs.
Available at: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\29\ National Academies of Sciences, Engineering, and Medicine.
2017. Accounting for social risk factors in Medicare payment.
Washington, DC: The National Academies Press.
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As noted in the FY 2017 IPPS/LTCH PPS final rule, the NQF has
undertaken a 2-year trial period in which new measures, measures
undergoing maintenance review, and measures endorsed with the condition
that they enter the trial period can be assessed to determine whether
risk adjustment for selected social risk factors is appropriate for
these measures. This trial entails temporarily allowing inclusion of
social risk factors in the risk-adjustment approach for these measures.
At the conclusion of the trial, NQF will issue recommendations on the
future inclusion of social risk factors in risk adjustment for these
quality measures, and we will closely review its findings.
As we continue to consider the analyses and recommendations from
these reports and await the results of the NQF trial on risk adjustment
for quality measures, we are continuing to work with stakeholders in
this process. As we have previously communicated, we are concerned
about holding providers to different standards for the outcomes of
their patients with social risk factors because we do not want to mask
potential disparities or minimize incentives to improve the outcomes
for disadvantaged populations. Keeping this concern in mind, we are
seeking public comment on whether we should account for social risk
factors in the Hospital OQR Program, and if so, what method or
combination of methods would be most appropriate for accounting for
social risk factors. Examples of methods include: Confidential
reporting to providers of measure rates stratified by social risk
factors; public reporting of stratified measure rates; and potential
risk adjustment of a particular measure as appropriate based on data
and evidence.
In addition, we are seeking public comment on which social risk
factors might be most appropriate for reporting stratified measure
scores and/or potential risk adjustment of a particular measure.
Examples of social risk factors include, but are not limited to, dual
eligibility/low-income subsidy, race and ethnicity, and geographic area
of residence. We are seeking comments on which of these factors,
including current data sources where this information would be
available, could be used alone or in combination, and whether other
data should be collected to better capture the effects of social risk.
We will take commenters' input into consideration as we continue to
assess the appropriateness and feasibility of accounting for social
risk factors in the Hospital OQR Program.
We look forward to working with stakeholders as we consider the
issue of accounting for social risk factors and reducing health
disparities in CMS programs. Of note, implementing any of the above
methods would be taken into consideration in the context of how this
and other CMS programs operate (for example, data submission methods,
availability of data, statistical considerations relating to
reliability of data calculations, among others), so we also welcome
comment on operational considerations. CMS is committed to ensuring
that its beneficiaries have access to and receive excellent care, and
that the quality of care furnished by providers and suppliers is
assessed fairly in CMS programs.
3. Retention of Hospital OQR Program Measures Adopted in Previous
Payment Determinations
We previously adopted a policy to retain measures from the previous
year's Hospital OQR Program measure set for subsequent years' measure
sets in the CY 2013 OPPS/ASC final rule with comment period (77 FR
68471). Quality measures adopted in a previous year's rulemaking are
retained in the Hospital OQR Program for use in subsequent years unless
otherwise specified. We refer readers to that rule for more
information. In this proposed rule, we are not proposing any changes to
our retention policy for previously adopted measures.
4. Removal of Quality Measures From the Hospital OQR Program Measure
Set
a. Considerations in Removing Quality Measures From the Hospital OQR
Program
In the FY 2010 IPPS/LTCH PPS final rule (74 FR 43863), for the
Hospital IQR Program, we finalized a process for immediate retirement,
which we later termed ``removal,'' of Hospital IQR Program measures
based on evidence that the continued use of the measure as specified
raised patient safety concerns. We adopted the same immediate measure
retirement policy for the Hospital OQR Program in the CY 2010 OPPS/ASC
final rule with comment period (74 FR 60634 through 60635). We refer
readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR
68472 through 68473) for a discussion of our reasons for changing the
term ``retirement'' to ``removal'' in the Hospital OQR Program. In this
proposed rule, we are not proposing any changes to our policy to
immediately remove measures as a result of patient safety concerns.
In the CY 2013 OPPS/ASC final rule with comment period, we
finalized a set of criteria for determining whether to
[[Page 33673]]
remove measures from the Hospital OQR Program. We refer readers to the
CY 2013 OPPS/ASC final rule with comment period (77 FR 68472 through
68473) for a discussion of our policy on removal of quality measures
from the Hospital OQR Program. The benefits of removing a measure from
the Hospital OQR Program will be assessed on a case-by-case basis (79
FR 66941 through 66942). We note that, under this case-by-case
approach, a measure will not be removed solely on the basis of meeting
any specific criterion. We refer readers to the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68472 through 68473) for our list of
factors considered in removing measures from the Hospital OQR Program.
In this proposed rule, we are not proposing any changes to our measure
removal policy.
b. Criteria for Removal of ``Topped-Out'' Measures
We refer readers to the CY 2015 OPPS/ASC final rule with comment
period where we finalized our proposal to refine the criteria for
determining when a measure is ``topped-out'' (79 FR 66942). In this
proposed rule, we are not proposing any changes to our ``topped-out''
criteria policy.
c. Measures Proposed for Removal From the Hospital OQR Program
In this proposed rule, we are proposing to remove a total of six
measures. Specifically, beginning with the CY 2020 payment
determination, we are proposing to remove: (1) OP-21: Median Time to
Pain Management for Long Bone Fracture; and (2) OP-26: Hospital
Outpatient Volume Data on Selected Outpatient Surgical Procedures. In
addition, beginning with the CY 2021 payment determination, we are
proposing to remove: (1) OP-1: Median Time to Fibrinolysis; (2) OP-4:
Aspirin at Arrival; (3) OP-20: Door to Diagnostic Evaluation by a
Qualified Medical Professional; and (4) OP-25: Safe Surgery Checklist.
By removing these six measures, our intent is to alleviate the
maintenance costs and administrative burden to hospitals associated
with retaining them. These proposals are discussed in detail below.
(1) Proposed Removal of OP-21: Median Time to Pain Management for Long
Bone Fracture Beginning With the CY 2020 Payment Determination
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72088), where we adopted the OP-21: Median Time to Pain
Management for Long Bone Fracture measure. This process of care measure
assesses the median time from emergency department arrival to time of
initial oral, nasal, or parenteral pain medication (opioid and non-
opioid) administration for emergency department patients with a
principal diagnosis of long bone fracture (LBF).
We have previously finalized a policy to note that the benefits of
removing a measure from the Hospital OQR Program will be assessed on a
case-by-case basis (79 FR 66941 through 66942). Accordingly, although
it does not exactly meet one of the specific measure removal criteria
finalized for the Hospital OQR Program (77 FR 68472 through 68473), it
has the potential to lead to negative unintended consequences (removal
factor #7). Therefore, we are proposing to remove OP-21: Median Time to
Pain Management for Long Bone Fracture for the CY 2020 payment
determination and subsequent years due to the concerns described in
more detail below.
Given the growing body of evidence on the risks of opioid misuse,
CMS has developed a strategy to impact the national opioid misuse
epidemic by combating non-medical use of prescription opioids, opioid
use disorder, and overdose through the promotion of safe and
appropriate opioid utilization, improved access to treatment for opioid
use disorders, and evidence-based practices for acute and chronic pain
management.\30\
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\30\ CMS Opioid Misuse Strategy 2016. Retrieved from: https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Prescription-Drug-Information-for-Partners-Items/CMS-Opioid-Misuse-Strategy-2016.html.
---------------------------------------------------------------------------
Due to the potential for a misinterpretation of the intent of the
measure, we are concerned that OP-21: Median Time to Pain Management
for Long Bone Fracture may create undue pressure for hospital staff to
prescribe more opioids. We note that the measure only assesses the time
to initial, acute administration of pain medication in a specific acute
clinical situation, and does not promote long-term pain medication
prescriptions. In fact, this measure assesses an element of appropriate
pain management, specifically the time to pain medication
administration in the case of long bone fracture. In addition, the
measure assesses the use of both opioid and non-opioid pain
medications. While we acknowledge that pain control is an important
issue for patients and clinical care, and the measure does not call for
increased opioid prescriptions, many factors outside the control of CMS
quality program requirements may contribute to the perception of a link
between the measure and opioid prescribing practices. Although we are
not aware of any scientific studies that support an association between
this measure and opioid prescribing practices, out of an abundance of
caution, we are proposing to remove the measure in order to remove any
potential ambiguity and to avoid misinterpretation of the intent of the
measure. We also note that in the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79856), we removed the Pain Management dimension
of the HCAHPS Survey in the Patient- and Caregiver-Centered Experience
of Care/Care Coordination domain beginning with the FY 2018 program
year for the Hospital VBP Program for similar reasons. In addition, in
the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 20035 through 20039), we
proposed new pain management questions to replace the current ones in
the HCAHPS Survey measure for the Hospital IQR Program.
We are inviting public comment on our proposal to remove the OP-21:
Median Time to Pain Management for Long Bone Fracture measure for the
CY 2020 payment determination and subsequent years as discussed above.
(2) Proposed Removal of OP-26: Hospital Outpatient Volume Data on
Selected Outpatient Surgical Procedures Beginning With the CY 2020
Payment Determination
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74468), where we adopted OP-26: Hospital Outpatient
Volume Data on Selected Outpatient Surgical Procedures beginning with
the CY 2014 payment determination. This measure, which is submitted via
a web-based tool, collects surgical procedure volume data on eight
categories of procedures frequently performed in the outpatient
hospital setting.
We believe there is a lack of evidence to support this measure's
link to improved clinical quality. The measure requires hospitals to
report on the volumes of surgical procedures performed at the
facility.\31\ This information, number of surgical procedures, does not
offer insight into the facilities' overall performance or quality
improvement in regards to surgical procedures. Accordingly, this
measure meets the following measure removal criterion: performance or
improvement on a measure does not result in better patient outcomes (79
FR 66941). We believe the burden of this
[[Page 33674]]
measure, which is submitted via a web-based tool, outweighs the value,
and therefore, we are proposing to remove OP-26: Hospital Outpatient
Volume Data on Selected Outpatient Surgical Procedures for the CY 2020
payment determination and subsequent years. We also refer readers to
section XIV.B.3.b.(3) of this proposed rule, where the ASCQR Program is
proposing to remove a similar measure.
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\31\ OP-26 Measure Information Form. Retrieved from: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
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We are inviting public comment on our proposal to removal the OP-
26: Hospital Outpatient Volume Data on Selected Outpatient Surgical
Procedures measure for the CY 2020 payment determination and subsequent
years as discussed above.
(3) Proposed Removal of OP-1: Median Time to Fibrinolysis Beginning
With the CY 2021 Payment Determination
We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (referred to as ``ED-AMI-2--Median Time to Fibrinolysis'' in 72
FR 66862 through 66865) where we adopted OP-1: Median Time to
Fibrinolysis beginning with services furnished in CY 2009. This chart-
abstracted measure assesses the median time from ED arrival to
administration of fibrinolytic therapy in ED patients with ST-segment
elevation on the ECG performed closest to ED arrival and prior to
transfer.
We believe that this measure meets the following measure removal
criterion--the availability of a measure that is more strongly
associated with desired patient outcomes for the particular topic (79
FR 66941). We note that the currently adopted OP-2: Fibrinolytic
Therapy Received Within 30 Minutes of ED Arrival (72 FR 66862 through
66865) has been designed with a threshold that is based on a clinical
standard, allows us to measure this topic area, and provides meaningful
and clinically relevant data on the receipt of fibrinolytic therapy.
National guidelines recommend that fibrinolytic therapy be given within
30 minutes of hospital arrival in patients with ST-segment elevation
myocardial infarction.\32\ As a result, because OP-1 measures only the
median time from door to needle and does not note whether or not that
value exceeds the clinical best practice of 30 minutes, we do not
believe that reporting of OP-1 improves quality of care or patient
outcomes. In addition, we believe that continuing to collect OP-1 would
be redundant with OP-2. As a result, we are proposing to remove OP-1:
Median Time to Fibrinolysis for the CY 2021 payment determination and
subsequent years. We note that although OP-1: Median Time to
Fibrinolysis is a chart-abstracted measure, we do not expect removing
this measure would reduce burden, as the data collected for this
measure is required to calculate another program measure in the AMI
measure set (OP-2: Fibrinolytic Therapy Received Within 30 Minutes of
ED Arrival) and will therefore continue to be collected even if the
proposal to remove OP-1 is finalized as proposed.
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\32\ Antman EM, Hand M, Armstrong PW, Bates ER, Green LA,
Halasyamani LK, et al. 2007 focused update of the ACC/AHA 2004
Guidelines for the Management of Patients With ST-Elevation
Myocardial Infarction: a report of the American College of
Cardiology/American Heart Association Task Force on Practice
Guidelines (Writing Group to Review New Evidence and Update the ACC/
AHA 2004 Guidelines for the Management of Patients With ST-Elevation
Myocardial Infarction). J Am Coll Cardiol. 2008; 51:210-47.
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We are inviting public comment on our proposal to remove OP-1:
Median Time to Fibrinolysis for the CY 2021 payment determination and
subsequent years as discussed above.
(4) Proposed Removal of OP-4: Aspirin at Arrival Beginning With the CY
2021 Payment Determination
We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66862 through 66865) where we adopted OP-4: Aspirin at
Arrival beginning with services furnished in CY 2009. This chart-
abstracted measure assesses the rate of patients with chest pain or
possible heart attack who received aspirin within 24 hours of arrival
or before transferring from the emergency department.
We previously finalized two criteria for determining when a measure
is ``topped out'' under the Hospital OQR Program: (1) When there is
statistically indistinguishable performance at the 75th and 90th
percentiles of national facility performance; and (2) when the
measure's truncated coefficient of variation (COV) is less than or
equal to 0.10 (79 FR 66942). Based on our analysis of Hospital OQR
Program measure data, we have determined that performance on this
measure is so high and unvarying that meaningful distinctions in
improvement cannot be made; specifically, our analyses show that there
is statistically indistinguishable performance at the 75th and 90th
percentiles of national facility performance for this measure. These
analyses are captured in the table below.
OP-4 Topped Out Analysis
----------------------------------------------------------------------------------------------------------------
Number of 75th 90th
Encounters hospitals percentile percentile Truncated COV
----------------------------------------------------------------------------------------------------------------
CY 2014......................................... 1,706 100.00 100.00 0.030
CY 2015......................................... 1,749 100.00 100.00 0.035
CY 2016......................................... 1,803 100.00 100.00 0.042
----------------------------------------------------------------------------------------------------------------
As displayed in the table above, there is no distinguishable
difference in hospital performance between the 75th and 90th
percentiles under the OP-4 measure, and the truncated coefficient of
variation has been below 0.10 since 2014. Therefore, this OP-4 measure
meets both ``topped out'' measure criteria for the ASCQR Program.
Thus, we believe the burden of reporting this chart-abstracted
measure is not justified by the value of retaining it in the program
and are proposing to remove OP-4: Aspirin at Arrival from the program
for the CY 2021 payment determination and subsequent years.
We are inviting public comment on our proposal to remove the OP-4:
Aspirin at Arrival measure for the CY 2021 payment determination and
subsequent years as discussed above.
(5) Proposed Removal of OP-20: Door to Diagnostic Evaluation by a
Qualified Medical Professional Beginning With the CY 2021 Payment
Determination
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72087-72088) where we adopted OP-20: Door to Diagnostic
Evaluation by a Qualified Medical Professional for the CY 2013 payment
determination. This chart-abstracted measure assesses the time from ED
[[Page 33675]]
arrival to provider contact for Emergency Department patients.
During regular measure maintenance, specific concerns about OP-20
were raised by a Technical Expert Panel (TEP), which was made up of
experts representing a variety of stakeholders and was convened by a
CMS contractor. These concerns include: (1) Limited evidence linking
the measure to improved patient outcomes; (2) validity concerns related
to wait times and the accuracy of door-to-door time stamps; and (3)
potential for skewed measure performance due to disease severity and
institution-specific confounders. After our own analysis, we agree with
the TEP's analysis and believe that this measure meets the following
measure removal criterion: Performance or improvement on a measure does
not result in better patient outcomes. As a result, we believe the
burden of continuing to include this chart-abstracted measure in the
program outweighs the benefits; and thus, we are proposing to remove
OP-20: Door to Diagnostic Evaluation by a Qualified Medical
Professional for the CY 2021 payment determination and subsequent
years.
We are inviting public comment on our proposal to remove OP-20:
Door to Diagnostic Evaluation by a Qualified Medical Professional for
the CY 2021 payment determination and subsequent years as discussed
above.
(6) Proposed Removal of OP-25: Safe Surgery Checklist Use Beginning
With the CY 2021 Payment Determination
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74464-74466), where we adopted OP-25: Safe Surgery
Checklist Use beginning with the CY 2014 payment determination. This
structural measure of hospital process assesses whether a hospital
employed a safe surgery checklist that covered each of the three
critical perioperative periods (prior to administering anesthesia,
prior to skin incision, and prior to patient leaving the operating
room) for the entire data collection period. Based on our review of
reported data under the measure, this measure meets our first criterion
for measure removal that measure performance is so high and unvarying
that meaningful distinctions and improvements in performance can no
longer be made.
The Hospital OQR Program previously finalized two criteria for
determining when a measure is ``topped out:'' (1) when there is
statistically indistinguishable performance at the 75th and 90th
percentiles of national facility performance; and (2) when the
measure's truncated coefficient of variation is less than or equal to
0.10 (79 FR 66942). Our estimations indicate that performance on this
measure is trending towards topped out status. This analysis is
captured in the table below.
OP-25 Performance Analysis
----------------------------------------------------------------------------------------------------------------
Number of 75th 90th
Encounters hospitals Rate percentile percentile Truncated COV
----------------------------------------------------------------------------------------------------------------
CY 2012......................... 3,227 0.910 100.000 100.000 0.314
CY 2013......................... 3,184 0.949 100.000 100.000 0.232
CY 2014......................... 3,177 0.963 100.000 100.000 0.196
CY 2015......................... 3,166 0.970 100.000 100.000 0.176
----------------------------------------------------------------------------------------------------------------
Based on the analysis above, the national rate of ``Yes'' response
for the OP-25 measure is nearly 1.0, or 100 percent, nationwide, and
has remained at this level for the last two years. In addition, the
truncated coefficient of variation has decreased such that it is
trending towards 0.10 and there is no distinguishable difference in
hospital performance between the 75th and 90th percentiles. We have
previously stated the benefits of removing a measure from the Hospital
OQR Program will be assessed on a case-by-case basis (79 FR 66941
through 66942). We believe that removal of this measure from the
Hospital OQR Program measure set is appropriate, as there is little
room for improvement. We believe that the safe surgical checklist is
widely used and that hospitals will continue its use. In addition,
removal of this measure would alleviate the administrative burden to
hospitals associated with reporting on this measure. As such, we
believe the reporting burden of this measure outweigh the benefits of
keeping the measure in the Hospital OQR Program.
Therefore, we are proposing to remove OP-25: Safe Surgery Checklist
Use for the CY 2021 payment determination and subsequent years. We
refer readers to section XIV.B.3.b.(2) of this proposed rule, where the
ASCQR Program is also proposing to remove a similar measure.
We are inviting public comment on our proposal to remove the OP-25:
Safe Surgery Checklist Use measure for the CY 2021 payment
determination and subsequent years as discussed above.
5. Proposal to Delay OP-37a-e: Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS)
Survey-Based Measures Beginning With the CY 2020 Payment Determination
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period where we adopted OP-37a-e (81 FR 79771-79784), and finalized
data collection and data submission timelines (81 FR 79792 through
79794). These measures assess patients' experience with care following
a procedure or surgery in a hospital outpatient department by rating
patient experience as a means for empowering patients and improving the
quality of their care.
In this proposed rule, we are proposing to delay implementation of
the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS) Survey Based Measures OP-37a-e
beginning with the CY 2020 payment determination (2018 data collection)
and subsequent years. Since our adoption of these measures, we have
come to believe that we lack important operational and implementation
data. Specifically, we want to ensure that the survey measures
appropriately account for patient response rates, both aggregate and by
survey administration method; reaffirm the reliability of national OAS
CAHPS survey data; and appropriately account for the burden associated
with administering the survey in the outpatient setting of care. We
note that commenters expressed concern over the burden associated with
the survey in the CY 2017 OPPS/ASC final rule with comment period (81
FR 79777). We believe that the national implementation of the survey,
which began in January 2016 and will conclude in December 2017, would
provide valuable information moving forward. We plan to conduct
analyses of the national implementation data to undertake any necessary
modifications to the survey tool and/or CMS systems. We believe it is
important to allow time
[[Page 33676]]
for any modifications before requiring the survey under the Hospital
OQR Program. However, we continue to believe that these measures
address an area of care that is not adequately addressed in our current
measure set and will be useful to assess aspects of care where the
patient is the best or only source of information. Further, we continue
to believe these measures will enable objective and meaningful
comparisons between hospital outpatient departments. Therefore, we are
proposing to delay implementation of OP-37a-e beginning with the CY
2020 payment determination (2018 data collection) until further action
in future rulemaking. We also refer readers to section XIV.B.4. of this
proposed rule where we are making a similar proposal in the ASCQR
Program.
We are inviting public comment on our proposal to delay the OAS
CAHPS survey measures beginning with the CY 2020 payment determination
(2018 data collection) as discussed above.
6. Previously Adopted Hospital OQR Program Measure Set for the CY 2020
Payment Determination and Subsequent Years
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79784) for the previously finalized measure set for the
Hospital OQR Program CY 2020 payment determination and subsequent
years. These measures also are listed below.
Previously Finalized Hospital OQR Program Measure Set for the CY 2020
Payment Determination and Subsequent Years
------------------------------------------------------------------------
NQF No. Measure name
------------------------------------------------------------------------
0287........................ OP-1: Median Time to Fibrinolysis.[dagger]
0288........................ OP-2: Fibrinolytic Therapy Received Within
30 Minutes of ED Arrival.
0290........................ OP-3: Median Time to Transfer to Another
Facility for Acute Coronary Intervention.
0286........................ OP-4: Aspirin at Arrival.[dagger]
0289........................ OP-5: Median Time to ECG.[dagger]
0514........................ OP-8: MRI Lumbar Spine for Low Back Pain.
None........................ OP-9: Mammography Follow-up Rates.
None........................ OP-10: Abdomen CT--Use of Contrast
Material.
0513........................ OP-11: Thorax CT--Use of Contrast
Material.
None........................ OP-12: The Ability for Providers with HIT
to Receive Laboratory Data Electronically
Directly into their ONC-Certified EHR
System as Discrete Searchable Data.
0669........................ OP-13: Cardiac Imaging for Preoperative
Risk Assessment for Non-Cardiac, Low-Risk
Surgery.
None........................ OP-14: Simultaneous Use of Brain Computed
Tomography (CT) and Sinus Computed
Tomography (CT).
0491........................ OP-17: Tracking Clinical Results between
Visits.[dagger]
0496........................ OP-18: Median Time from ED Arrival to ED
Departure for Discharged ED Patients.
None........................ OP-20: Door to Diagnostic Evaluation by a
Qualified Medical Professional.
0662........................ OP-21: Median Time to Pain Management for
Long Bone Fracture.
0499........................ OP-22: Left Without Being Seen.[dagger]
0661........................ OP-23: Head CT or MRI Scan Results for
Acute Ischemic Stroke or Hemorrhagic
Stroke who Received Head CT or MRI Scan
Interpretation Within 45 minutes of ED
Arrival.
None........................ OP-25: Safe Surgery Checklist Use.
None........................ OP-26: Hospital Outpatient Volume on
Selected Outpatient Surgical Procedures.*
0431........................ OP-27: Influenza Vaccination Coverage
among Healthcare Personnel.
0658........................ OP-29: Appropriate Follow-Up Interval for
Normal Colonoscopy in Average Risk
Patients.**
0659........................ OP-30: Colonoscopy Interval for Patients
with a History of Adenomatous Polyps--
Avoidance of Inappropriate Use.**
1536........................ OP-31: Cataracts: Improvement in Patient's
Visual Function within 90 Days Following
Cataract Surgery.***
2539........................ OP-32: Facility 7-Day Risk-Standardized
Hospital Visit Rate after Outpatient
Colonoscopy.
1822........................ OP-33: External Beam Radiotherapy for Bone
Metastases.
None........................ OP-35: Admissions and Emergency Department
(ED) Visits for Patients Receiving
Outpatient Chemotherapy.
2687........................ OP-36: Hospital Visits after Hospital
Outpatient Surgery.
None........................ OP-37a: OAS CAHPS--About Facilities and
Staff.****
None........................ OP-37b: OAS CAHPS--Communication About
Procedure.****
None........................ OP-37c: OAS CAHPS--Preparation for
Discharge and Recovery.****
None........................ OP-37d: OAS CAHPS--Overall Rating of
Facility.****
None........................ OP-37e: OAS CAHPS--Recommendation of
Facility.****
------------------------------------------------------------------------
[dagger] We note that NQF endorsement for this measure was removed.
* OP-26: Procedure categories and corresponding HCPCS codes are located
at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1196289981244 9981244.
** We note that measure name was revised to reflect NQF title.
*** Measure voluntarily collected as set forth in section XIII.D.3.b. of
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66946
through 66947).
**** Proposed to delay measure reporting beginning with CY 2018
reporting and for subsequent years as discussed in section XIII.B.5.
of this proposed rule.
7. Summary of the Hospital OQR Program Measure Set Proposed for the CY
2020 and CY 2021 Payment Determinations and Subsequent Years
In this proposed rule, we are not proposing any new measures for
the Hospital OQR Program. However, we are proposing to remove a number
of measures for both the CY 2020 and 2021 payment determinations in
section XIII.B.4.c. of this proposed rule, above, and we are proposing
to delay OP-37a-e beginning with the CY 2020 payment determination
(2018 data collection) in section XIII.B.5. of this proposed rule. The
tables below outline the Hospital OQR Program measure set we are
proposing in this proposed rule for the CY 2020 and CY 2021 payment
determination and subsequent years, respectively. Both of these charts
reflect the measure set as if our proposals to remove measures and to
delay reporting of OP-37a-e beginning with CY 2018 reporting and for
subsequent years are finalized as proposed.
[[Page 33677]]
Hospital OQR Program Measure Set Proposed for the CY 2020 Payment
Determination
------------------------------------------------------------------------
NQF No. Measure name
------------------------------------------------------------------------
0287........................ OP-1: Median Time to Fibrinolysis.[dagger]
0288........................ OP-2: Fibrinolytic Therapy Received Within
30 Minutes of ED Arrival.
0290........................ OP-3: Median Time to Transfer to Another
Facility for Acute Coronary Intervention.
0286........................ OP-4: Aspirin at Arrival.[dagger]
0289........................ OP-5: Median Time to ECG.[dagger]
0514........................ OP-8: MRI Lumbar Spine for Low Back Pain.
None........................ OP-9: Mammography Follow-up Rates.
None........................ OP-10: Abdomen CT--Use of Contrast
Material.
0513........................ OP-11: Thorax CT--Use of Contrast
Material.
None........................ OP-12: The Ability for Providers with HIT
to Receive Laboratory Data Electronically
Directly into their ONC-Certified EHR
System as Discrete Searchable Data.
0669........................ OP-13: Cardiac Imaging for Preoperative
Risk Assessment for Non-Cardiac, Low-Risk
Surgery.
None........................ OP-14: Simultaneous Use of Brain Computed
Tomography (CT) and Sinus Computed
Tomography (CT).
0491........................ OP-17: Tracking Clinical Results between
Visits.[dagger]
0496........................ OP-18: Median Time from ED Arrival to ED
Departure for Discharged ED Patients.
None........................ OP-20: Door to Diagnostic Evaluation by a
Qualified Medical Professional.
0499........................ OP-22: Left Without Being Seen.[dagger]
0661........................ OP-23: Head CT or MRI Scan Results for
Acute Ischemic Stroke or Hemorrhagic
Stroke who Received Head CT or MRI Scan
Interpretation Within 45 minutes of ED
Arrival.
None........................ OP-25: Safe Surgery Checklist Use.
0431........................ OP-27: Influenza Vaccination Coverage
among Healthcare Personnel.
0658........................ OP-29: Appropriate Follow-Up Interval for
Normal Colonoscopy in Average Risk
Patients.*
0659........................ OP-30: Colonoscopy Interval for Patients
with a History of Adenomatous Polyps--
Avoidance of Inappropriate Use.*
1536........................ OP-31: Cataracts: Improvement in Patient's
Visual Function within 90 Days Following
Cataract Surgery.**
2539........................ OP-32: Facility 7-Day Risk-Standardized
Hospital Visit Rate after Outpatient
Colonoscopy.
1822........................ OP-33: External Beam Radiotherapy for Bone
Metastases.
None........................ OP-35: Admissions and Emergency Department
(ED) Visits for Patients Receiving
Outpatient Chemotherapy.
2687........................ OP-36: Hospital Visits after Hospital
Outpatient Surgery.
None........................ OP-37a: OAS CAHPS--About Facilities and
Staff.***
None........................ OP-37b: OAS CAHPS--Communication About
Procedure.***
None........................ OP-37c: OAS CAHPS--Preparation for
Discharge and Recovery.***
None........................ OP-37d: OAS CAHPS--Overall Rating of
Facility.***
None........................ OP-37e: OAS CAHPS--Recommendation of
Facility.***
------------------------------------------------------------------------
[dagger] We note that NQF endorsement for this measure was removed.
[deg] OP-26: Procedure categories and corresponding HCPCS codes are
located at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1196289981244 9981244.
* We note that measure name was revised to reflect NQF title.
** Measure voluntarily collected as set forth in section XIII.D.3.b. of
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66946
through 66947).
*** Proposed to delay measure reporting beginning with CY 2018 reporting
and for subsequent years as discussed in section XIII.B.5. of this
proposed rule.
In addition, the table below outlines the Hospital OQR Program
measure set we are proposing in this proposed rule for the CY 2021
payment determination and subsequent years.
Hospital OQR Program Measure Set Proposed for the CY 2021 Payment
Determination and Subsequent Years
------------------------------------------------------------------------
NQF No. Measure name
------------------------------------------------------------------------
0288........................ OP-2: Fibrinolytic Therapy Received Within
30 Minutes of ED Arrival.
0290........................ OP-3: Median Time to Transfer to Another
Facility for Acute Coronary Intervention.
0289........................ OP-5: Median Time to ECG.[dagger]
0514........................ OP-8: MRI Lumbar Spine for Low Back Pain.
None........................ OP-9: Mammography Follow-up Rates.
None........................ OP-10: Abdomen CT--Use of Contrast
Material.
0513........................ OP-11: Thorax CT--Use of Contrast
Material.
None........................ OP-12: The Ability for Providers with HIT
to Receive Laboratory Data Electronically
Directly into their ONC-Certified EHR
System as Discrete Searchable Data.
0669........................ OP-13: Cardiac Imaging for Preoperative
Risk Assessment for Non-Cardiac, Low-Risk
Surgery.
None........................ OP-14: Simultaneous Use of Brain Computed
Tomography (CT) and Sinus Computed
Tomography (CT).
0491........................ OP-17: Tracking Clinical Results between
Visits.[dagger]
0496........................ OP-18: Median Time from ED Arrival to ED
Departure for Discharged ED Patients.
0499........................ OP-22: Left Without Being Seen.[dagger]
0661........................ OP-23: Head CT or MRI Scan Results for
Acute Ischemic Stroke or Hemorrhagic
Stroke who Received Head CT or MRI Scan
Interpretation Within 45 minutes of ED
Arrival.
0431........................ OP-27: Influenza Vaccination Coverage
among Healthcare Personnel.
0658........................ OP-29: Appropriate Follow-Up Interval for
Normal Colonoscopy in Average Risk
Patients.*
0659........................ OP-30: Colonoscopy Interval for Patients
with a History of Adenomatous Polyps--
Avoidance of Inappropriate Use.*
[[Page 33678]]
1536........................ OP-31: Cataracts: Improvement in Patient's
Visual Function within 90 Days Following
Cataract Surgery.**
2539........................ OP-32: Facility 7-Day Risk-Standardized
Hospital Visit Rate after Outpatient
Colonoscopy.
1822........................ OP-33: External Beam Radiotherapy for Bone
Metastases.
None........................ OP-35: Admissions and Emergency Department
(ED) Visits for Patients Receiving
Outpatient Chemotherapy.
2687........................ OP-36: Hospital Visits after Hospital
Outpatient Surgery.
None........................ OP-37a: OAS CAHPS--About Facilities and
Staff.***
None........................ OP-37b: OAS CAHPS--Communication About
Procedure.***
None........................ OP-37c: OAS CAHPS--Preparation for
Discharge and Recovery.***
None........................ OP-37d: OAS CAHPS--Overall Rating of
Facility.***
None........................ OP-37e: OAS CAHPS--Recommendation of
Facility.***
------------------------------------------------------------------------
[dagger] We note that NQF endorsement for this measure was removed.
[deg] OP-26: Procedure categories and corresponding HCPCS codes are
located at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1196289981244 9981244.
* We note that measure name was revised to reflect NQF title.
** Measure voluntarily collected as set forth in section XIII.D.3.b. of
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66946
through 66947).
*** Proposed to delay measure reporting beginning with CY 2018 reporting
and for subsequent years as discussed in section XIII.B.5. of this
proposed rule.
8. Hospital OQR Program Measures and Topics for Future Consideration
In this proposed rule, we are seeking public comment on: (1) Future
measure topics; and (2) future development of OP-2: Fibrinolytic
Therapy Received Within 30 Minutes of ED Arrival as an electronic
clinical quality measure (eCQM). These are discussed in detail below.
a. Future Measure Topics
We seek to develop a comprehensive set of quality measures to be
available for widespread use for informed decision-making and quality
improvement in the hospital outpatient setting. The current measure set
for the Hospital OQR Program includes measures that assess process of
care, imaging efficiency patterns, care transitions, ED throughput
efficiency, Health Information Technology (health IT) use, care
coordination, and patient safety. Measures are of various types,
including those of process, structure, outcome, and efficiency. Through
future rulemaking, we intend to propose new measures that help us
further our goal of achieving better health care and improved health
for Medicare beneficiaries who receive health care in hospital
outpatient settings, while aligning quality measures across the
Medicare program.
We are moving towards the use of outcome measures and away from the
use of clinical process measures across our Medicare quality reporting
and value-based purchasing programs. We are inviting public comments on
possible measure topics for future consideration in the Hospital OQR
Program. We specifically request comment on any outcome measures that
would be useful to add to the Hospital OQR Program as well as any
clinical process measures that should be eliminated from the Hospital
OQR Program.
b. Possible Future Adoption of the Electronic Version of OP-2:
Fibrinolytic Therapy Received Within 30 Minutes of Emergency Department
Arrival
We have previously stated that automated electronic extraction and
reporting of clinical quality data, including measure results
calculated automatically by appropriately certified health IT, could
significantly reduce the administrative burden on hospitals under the
Hospital OQR Program (81 FR 79785). In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79786), some commenters supported CMS' goal
to incorporate electronic clinical quality measures (eCQMs) in the
Hospital OQR Program.
OP-2: Fibrinolytic Therapy Received Within 30 Minutes of Emergency
Department Arrival was finalized in the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66865), where it was designated as ED-AMI-3.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68761),
the measure was re-labeled as OP-2 for the CY 2010 payment
determination and subsequent years. OP-2 measures the number of AMI
patients receiving fibrinolytic therapy during the ED visit with a time
from hospital arrival to fibrinolysis of 30 minutes or less.
We are considering developing OP-2: Fibrinolytic Therapy Received
Within 30 Minutes of Emergency Department Arrival \33\ as an eCQM and
proposing the eCQM in future rulemaking. We note that since OP-2 is not
yet developed as an eCQM, electronic measure specifications are not
available at this time. We are considering OP-2 in particular because
we believe it is the most feasible out of all the existing Hospital OQR
Program measures.
---------------------------------------------------------------------------
\33\ eCQI Resource Center: https://ecqi.healthit.gov/eh/ecqms-2016-reporting-period/fibrinolytic-therapy-received-within-30-minutes-hospital-arrival.
---------------------------------------------------------------------------
We are inviting public comment on the possible future development
and future adoption of an eCQM version of OP-2: Fibrinolytic Therapy
Received Within 30 Minutes of Emergency Department Arrival.
9. Maintenance of Technical Specifications for Quality Measures
CMS maintains technical specifications for previously adopted
Hospital OQR Program measures. These specifications are updated as we
modify the Hospital OQR Program measure set. The manuals that contain
specifications for the previously adopted measures can be found on the
QualityNet Web site at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1196289981244.
For a history of our policies regarding maintenance of technical
specifications for quality measures, we refer readers to the CY 2010
OPPS/ASC final rule with comment period (74 FR 60631), the CY 2011
OPPS/ASC final rule with comment period (75 FR 72069), and the CY 2013
OPPS/ASC final rule with comment period (77 FR 68469 through 68470). In
this proposed rule, we are not proposing any changes to our technical
specifications policies.
[[Page 33679]]
10. Public Display of Quality Measures
a. Background
We refer readers to the CY 2014 and CY 2017 OPPS/ASC final rules
with comment period (78 FR 75092 and 81 FR 79791, respectively) for our
previously finalized policies regarding public display of quality
measures.
In this proposed rule, we are proposing to update public reporting
for the OP-18 measure.
b. Public Reporting of OP-18c: Median Time From Emergency Department
Arrival to Emergency Department Departure for Discharged Emergency
Department Patients--Psychiatric/Mental Health Patients
OP-18 was finalized for reporting for the CY 2013 payment
determination and subsequent years in the CY 2011 OPPS/ASC final rule
with comment period (75 FR 72086). This measure addresses ED efficiency
in the form of the median time from ED arrival to time of departure
from the ED for patients discharged from the ED (also known as ED
throughput). Reducing the time patients spend in the ED can improve the
quality of care. As discussed in the measure specifications and Measure
Information Form (MIF), 34 35 OP-18 measure data is
stratified into four separate calculations: (1) OP-18a is defined as
the overall rate; (2) OP-18b is defined as the reporting measure; (3)
OP-18c is defined as assessing Psychiatric/Mental Health Patients; and
(4) OP-18d is defined as assessing Transfer Patients.
---------------------------------------------------------------------------
\34\ A Measure Information Form provides detail on the rationale
for a measure as well as the relevant numerator statements,
denominator statements and measure calculations.
\35\ Hospital OQR Program ED Throughput Measures Information
Form: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
---------------------------------------------------------------------------
Section 1833(t)(17)(E) of the Act, requires that the Secretary
establish procedures to make data collected under the Hospital OQR
Program available to the public and that such procedures must ensure
that a hospital has the opportunity to review the data that are to be
made public, with respect to the hospital prior to such data being made
public. Currently, and as detailed in the OP-18 MIF, the OP-18 measure
publicly reports data only for the calculations designated as OP-18b:
Median Time from Emergency Department Arrival to Emergency Department
Departure for Discharged Emergency Department Patients--Reporting
Measure, which excludes psychiatric/mental health patients and transfer
patients.\36\
---------------------------------------------------------------------------
\36\ Hospital OQR Program ED Throughput Measures Information
Form: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
---------------------------------------------------------------------------
The ICD-10 diagnostic codes for OP-18c include numerous substance
abuse codes for inclusion in this subset, along with numerous non-
substance abuse codes. We believe it is important to publicly report
data for OP-18c (Median Time from Emergency Department Arrival to
Emergency Department Departure for Discharged Emergency Department
Patients--Psychiatric/Mental Health Patients) to address a behavioral
health gap in the publicly reported Hospital OQR Program measure set.
Therefore, in this proposed rule, we are proposing to also publicly
report OP-18c and begin public reporting as early as July of 2018 using
data from patient encounters during the third quarter of 2017. In
addition, we would make corresponding updates to our MIF to reflect
these proposals,\37\ such as: (1) Renaming OP-18b from ``Median Time
from Emergency Department Arrival to Emergency Department Departure for
Discharged Emergency Department Patients--Reporting Measure'' to ``OP-
18b: Median Time from Emergency Department Arrival to Emergency
Department Departure for Discharged Emergency Department Patients--
Excluding Psychiatric/Mental Health Patients and Transfer Patients;''
and (2) modifying the form to reflect that OP-18c would also be
publicly reported. Administrative changes made to the MIF would not
affect hospital reporting requirements or burden. The data required for
public reporting are already collected and submitted by participating
outpatient hospital departments and that our proposal to publicly
report OP-18c does not create additional burden. We note that hospitals
would be able to preview this data in accordance with our previously
established 30-day preview period procedures (81 FR 79791).
---------------------------------------------------------------------------
\37\ Hospital OQR Program ED Throughput Measures Information
Form: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
---------------------------------------------------------------------------
In developing this proposal, we also considered proposing to
publicly report around July 2019 (not 2018 as proposed) using data from
patient encounters occurring during the first quarter of 2018. However,
we decided against this timeline, because under this reporting option,
we would not be able to publicly report behavioral health data until as
early as July of 2019, creating a delay in our efforts to address the
behavioral health data gap in the publicly reported measure set.
We are inviting public comment on our proposal to publicly report
OP-18c: Median Time from Emergency Department Arrival to Emergency
Department Departure for Discharged Emergency Department Patients--
Psychiatric/Mental Health Patients beginning with third quarter 2017
data as discussed above.
C. Administrative Requirements
1. QualityNet Account and Security Administrator
The previously finalized QualityNet security administrator
requirements, including setting up a QualityNet account and the
associated timelines, are described in the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75108 through 75109). In that final rule
with comment period, we codified these procedural requirements at 42
CFR 419.46(a).
2. Requirements Regarding Participation Status
a. Background
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75108 through 75109) and the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70519) for requirements for participation
and withdrawal from the Hospital OQR Program. We also codified these
procedural requirements at 42 CFR 419.46(a) and 42 CFR 419.46(b). In
this proposed rule, we are proposing changes to the NOP submission
deadline, as described below.
b. Proposed Changes to the NOP Submission Deadline
We finalized in the CY 2014 OPPS/ASC final rule with comment period
(78 FR 75108 through 75109) that participation in the Hospital OQR
Program requires that hospitals must: (1) Register on the QualityNet
Web site before beginning to report data; (2) identify and register a
QualityNet security administrator; and (3) complete and submit an
online participation form available at the QualityNet.org Web site if
this form has not been previously completed, if a hospital has
previously withdrawn, or if the hospital acquires a new CMS
Certification Number (CCN). In addition, in the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75108 through 75109) we finalized the
requirement that hospitals must submit the NOP according to the
following deadlines:
[[Page 33680]]
If a hospital has a Medicare acceptance date before
January 1 of the year prior to the affected annual payment update, the
hospital must complete and submit to CMS a completed Hospital OQR
Program Notice of Participation Form by July 31 of the calendar year
prior to the affected annual payment update.
If a hospital has a Medicare acceptance date on or after
January 1 of the year prior to the affected annual payment update, the
hospital must submit a completed participation form no later than 180
days from the date identified as its Medicare acceptance date.
These requirements are also codified at 42 CFR 419.46(a).
In this proposed rule, beginning with the CY 2020 payment
determination, we are proposing to: (1) Revise the NOP submission
deadline described above, and (2) make corresponding revisions at 42
CFR 419.46(a). Specifically, we are proposing to change the NOP
submission deadlines such that hospitals are required to submit the NOP
any time prior to registering on the QualityNet Web site, rather than
by the deadlines specified above. For example, under this proposal, and
in accordance with the data submission deadlines described in section
XIII.D.1. of this proposed rule, below and finalized in the CY 2016
OPPS/ASC final rule with comment period (80 FR 70519 through 70520), a
hospital submitting data for Q1 2019 encounters would be required to
submit the NOP only prior to registering on the QualityNet Web site,
which must be done prior to the data submission deadline of August 1,
2019 (80 FR 70519 through 70520).
We believe this proposed timeline is appropriate, because
registration with the QualityNet Web site is necessary to submit data.
We believe that extending the NOP submission deadline will better
enable hospitals to meet the Hospital OQR Program participation
requirements.
As discussed above, we also are proposing to make conforming
revisions at 42 CFR 419.46(a).
We are inviting public comment on our proposals as discussed above.
D. Form, Manner, and Timing of Data Submitted for the Hospital OQR
Program
1. Hospital OQR Program Annual Payment Determinations
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75110
through 75111) and the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70519 through 70520), we specified our data submission
deadlines. We also codified our submission requirements at 42 CFR
419.46(c).
We refer readers to the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70519 through 70520), where we finalized our proposal to
shift the quarters upon which the Hospital OQR Program payment
determinations are based, beginning with the CY 2018 payment
determination. The finalized deadlines for the CY 2020 payment
determination and subsequent years are illustrated in the tables below.
CY 2020 Payment Determination and Subsequent Years
------------------------------------------------------------------------
Clinical data
Patient encounter quarter submission
deadline
------------------------------------------------------------------------
Q2 2018 (April 1-June 30)............................... 11/1/2018
Q3 2018 (July 1-September 30)........................... 2/1/2019
Q4 2018 (October 1-December 31)......................... 5/1/2019
Q1 2019 (January 1-March 31)............................ 8/1/2019
------------------------------------------------------------------------
In this proposed rule, for the CY 2020 payment determination and
subsequent years, we are proposing to revise the data submission
requirements for hospitals that did not participate in the previous
year's Hospital OQR Program. Specifically, we are proposing to revise
the first quarter for which newly participating hospitals are required
to submit data (see details below). We are not proposing changes to the
previously finalized data submission deadlines for each quarter.
In the CY 2013 OPPS/ASC final rule with comment period (77 FR
68482), we finalized the following data submission requirements for
hospitals that did not participate in the previous year's Hospital OQR
Program:
If a hospital has a Medicare acceptance date before
January 1 of the year prior to the affected annual payment update, the
hospital must submit data beginning with encounters occurring during
the first calendar quarter of the year prior to the affected annual
payment update;
If a hospital has a Medicare acceptance date on or after
January 1 of the year prior to the affected annual payment update, the
hospital must submit data for encounters beginning with the first full
quarter following submission of the completed Hospital OQR Program
Notice of Participation Form; and
Hospitals with a Medicare acceptance date before or after
January 1 of the year prior to an affected annual payment update must
follow data submission deadlines as posted on the QualityNet Web site.
These policies are also codified at 42 CFR 419.46(c)(3). In this
proposed rule, we are proposing to: (1) Align the timeline specifying
the initial quarter for which hospitals must submit data for all
hospitals that did not participate in the previous year's Hospital OQR
Program, rather than specifying different timelines for hospitals with
Medicare acceptance dates before versus after January 1 of the year
prior to an affected annual payment update; and (2) make conforming
revisions at 42 CFR 419.46(c)(3). Specifically, we are proposing that
any hospital that did not participate in the previous year's Hospital
OQR Program must submit data beginning with encounters occurring during
the first calendar quarter of the year prior to the affected annual
payment update. We note that hospitals must still follow data
submission deadlines corresponding to the quarter for which they are
reporting data as posted on the QualityNet Web site.
We are inviting public comment on our proposals to align the
initial data submission timeline for all hospitals that did not
participate in the previous year's Hospital OQR Program and to make
conforming revisions at 42 CFR 419.46(c)(3).
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data
Are Submitted Directly to CMS for the CY 2021 Payment Determination and
Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68481 through 68484) for a discussion of the form,
manner, and timing for data submission requirements of chart-abstracted
measures for the CY 2014 payment determination and subsequent years.
In this proposed rule, we are not proposing any changes to our
policies regarding the submission of chart abstracted measure data
where patient-level data are submitted directly to CMS.
We note that, in section XIII.B.4.c. of this proposed rule, we are
proposing to remove OP-21: Median Time to Pain Management for Long Bone
Fracture for the CY 2020 payment determination and subsequent years and
OP-1: Median Time to Fibrinolysis, OP-4: Aspirin at Arrival, and OP-20:
Door to Diagnostic Evaluation by a Qualified Medical Professional for
the CY 2021 payment determination and subsequent years. Therefore, if
these proposals are finalized as proposed, the following previously
finalized Hospital OQR
[[Page 33681]]
Program chart-abstracted measures will require patient-level data to be
submitted for the CY 2021 payment determination and subsequent years:
OP-2: Fibrinolytic Therapy Received Within 30 Minutes of
ED Arrival (NQF #0288);
OP-3: Median Time to Transfer to Another Facility for
Acute Coronary Intervention (NQF #0290);
OP-5: Median Time to ECG (NQF #0289);
OP-18: Median Time from ED Arrival to ED Departure for
Discharged ED Patients (NQF #0496);
OP-23: Head CT Scan Results for Acute Ischemic Stroke or
Hemorrhagic Stroke Patients who Received Head CT Scan Interpretation
Within 45 Minutes of ED Arrival (NQF #0661).
3. Claims-Based Measure Data Requirements for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75111 through 75112) for a discussion of the general
claims-based measure data submission requirements for the CY 2015
payment determination and subsequent years. In this proposed rule, we
are not proposing any changes to our claims-based measures submission
policies for the CY 2020 payment determination and subsequent years.
There are a total of nine claims-based measures for the CY 2020
payment determination and subsequent years:
OP-8: MRI Lumbar Spine for Low Back Pain (NQF #0514);
OP-9: Mammography Follow-Up Rates;
OP-10: Abdomen CT--Use of Contrast Material;
OP-11: Thorax CT--Use of Contrast Material (NQF #0513);
OP-13: Cardiac Imaging for Preoperative Risk Assessment
for Non-Cardiac, Low Risk Surgery (NQF #0669);
OP-14: Simultaneous Use of Brain Computed Tomography (CT)
and Sinus Computed Tomography (CT);
OP-32: Facility 7-Day Risk-Standardized Hospital Visit
Rate after Outpatient Colonoscopy (NQF #2539);
OP-35: Admissions and Emergency Department Visits for
Patients Receiving Outpatient Chemotherapy; and
OP-36: Hospital Visits after Hospital Outpatient Surgery
(NQF #2687).
4. Data Submission Requirements for the OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79792 through 79794) for a discussion of the previously
finalized requirements related to survey administration and vendors for
the OAS CAHPS Survey-based measures. However, we refer readers to
section XIII.B.5. of this proposed rule, where we are proposing to
delay implementation of the OP-37a-e OAS CAHPS Survey-based measures
beginning with the CY 2020 payment determination (2018 data collection)
until further action in future rulemaking.
As noted in the CY 2017 OPPS/ASC final rule with comment period (81
FR 79815) some commenters suggested shortening sections of the survey,
such as the ``About You'' section. We continue to evaluate the utility
of individual questions as we collect new data from the survey's
voluntary national implementation, and will consider different options
for shortening the OAS CAHPS Survey without the loss of important data
in the future. Specifically, we continue to consider the removal of two
demographic questions--the ``gender'' and ``age'' questions--from the
OAS CAHPS Survey in a future update.
5. Data Submission Requirements for Previously Finalized Measures for
Data Submitted via a Web-Based Tool for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75112 through 75115) and the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70521) and the CMS QualityNet Web site
(https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1205442125082) for a discussion of the requirements for measure data submitted
via the CMS QualityNet Web site for the CY 2017 payment determination
and subsequent years. In addition, we refer readers to the CY 2014
OPPS/ASC final rule with comment period (78 FR 75097 through 75100) for
a discussion of the requirements for measure data (specifically, the
Influenza Vaccination Coverage Among Healthcare Personnel measure (NQF
#0431)) submitted via the Centers for Disease Control and Prevention
(CDC) NHSN Web site. In this proposed rule, we are not proposing any
changes to our policies regarding the submission of measure data
submitted via a web-based tool.
We note that, in section XIII.B.4.c. of this proposed rule, we are
proposing to remove OP-25: Safe Surgery Checklist Use (beginning with
CY 2021), and OP-26: Hospital Outpatient Volume on Selected Outpatient
Surgical Procedures (beginning with CY 2020). Therefore, if these
proposals are finalized as proposed, the following web-based quality
measures previously finalized and retained in the Hospital OQR Program
will require data to be submitted via a web-based tool (CMS' QualityNet
Web site or CDC's NHSN Web site) for the CY 2021 payment determination
and subsequent years:
OP-12: The Ability for Providers with HIT to Receive
Laboratory Data Electronically Directly into their ONC-Certified EHR
System as Discrete Searchable Data (via CMS' QualityNet Web site);
OP-17: Tracking Clinical Results between Visits (NQF
#0491) (via CMS' QualityNet Web site);
OP-22: Left Without Being Seen (NQF #0499) (via CMS'
QualityNet Web site);
OP-27: Influenza Vaccination Coverage among Healthcare
Personnel (via the CDC NHSN Web site) (NQF #0431);
OP-29: Appropriate Follow-up Interval for Normal
Colonoscopy in Average Risk Patients (NQF #0658) (via CMS' QualityNet
Web site);
OP-30: Colonoscopy Interval for Patients with a History of
Adenomatous Polyps--Avoidance of Inappropriate Use (NQF #0659) (via
CMS' QualityNet Web site);
OP-31: Cataracts: Improvement in Patient's Visual Function
within 90 Days Following Cataract Surgery (NQF #1536) (via CMS'
QualityNet Web site); and
OP-33: External Beam Radiotherapy (EBRT) for Bone
Metastases (NQF #1822) (via CMS' QualityNet Web site).
6. Population and Sampling Data Requirements for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72100 through 72103) and the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74482 through 74483) for discussions of our
population and sampling requirements.
In this proposed rule, we are not proposing any changes to our
population and sampling requirements.
[[Page 33682]]
7. Hospital OQR Program Validation Requirements for Chart-Abstracted
Measure Data Submitted Directly to CMS for the CY 2020 Payment
Determination and Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68484 through 68487) and the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66964 through 66965) for a discussion of
finalized policies regarding our validation requirements. We also refer
readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR
68486 through 68487) for a discussion of finalized policies regarding
our medical record validation procedure requirements. We codified these
policies at 42 CFR 419.46(e). For the CY 2018 payment determination and
subsequent years, validation is based on four quarters of data
((validation quarter 1 (January 1-March 31), validation quarter 2
(April 1-June 30), validation quarter 3 (July 1-September 30), and
validation quarter 4 (October 1-December 31)) (80 FR 70524).
In this proposed rule, we are: (1) Clarifying the hospital
selection process previously finalized for validation; (2) proposing to
codify the procedures for targeting hospitals at 42 CFR 419.46(e); and
(3) proposing to formalize and update our educational review process.
These are discussed in more detail below.
a. Clarification
In the CY 2012 OPPS/ASC final rule with comment period (76 FR
74485), we finalized a validation selection process in which we select
a random sample of 450 hospitals for validation purposes, and select an
additional 50 hospitals based on the following specific criteria:
Hospital fails the validation requirement that applies to
the previous year's payment determination; or
Hospital has an outlier value for a measure based on the
data it submits. We defined an ``outlier value'' for purposes of this
targeting as a measure value that appears to deviate markedly from the
measure values for other hospitals. Specifically, we would select
hospitals for validation if their measure value for a measure is
greater than 5 standard deviations from the mean, placing the expected
occurrence of such a value outside of this range at 1 in 1,744,278.
We note that the criteria for targeting 50 outlier hospitals,
described above, does not specify whether high or low performing
hospitals will be targeted. Therefore, in this proposed rule, we are
clarifying that hospitals with outlier values indicating specifically
poor scores on a measure (for example, a long median time to
fibrinolysis) will be targeted for validation. In other words, an
``outlier value'' is a measure value that is greater than 5 standard
deviations from the mean of the measure values for other hospitals, and
indicates a poor score.
b. Proposed Codification
We note that the previously finalized procedures for targeting
hospitals for validation, described in section XIII.D.7.a., above, and
finalized in the CY 2012 OPPS/ASC final rule with comment period (76 FR
74485), are not yet codified at 42 CFR 419.46. In this proposed rule,
we are proposing to codify the previously finalized procedures for
targeting hospitals and well as the procedures regarding outlier
hospitals as discussed and clarified above at 42 CFR 419.46(e)(3).
We are inviting public comment on our proposal to codify our
validation targeting criteria as discussed above.
c. Proposed Formalization and Modifications to the Educational Review
Process for Chart-Abstracted Measures Validation
(1) Background
We have described our processes for educational review on the
QualityNet Web site.\38\ We note that historically this process
functioned as an outreach and education opportunity we provided to
hospitals, but based on our experience, stakeholder feedback, and more
robust validation requirements, we believe that it would be beneficial
to hospitals to propose formalizing and updating this process.
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\38\ Data Validation--Educational Reviews: Hospitals-Outpatient.
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Under the current informal process, if results of an educational
review indicate that CDAC or CMS has incorrectly scored a hospital
after validation, those results are not changed, but are taken into
consideration if the hospital submits a reconsideration request.
Stakeholder feedback, provided via email, has indicated that while the
educational review process is helpful to participating hospitals, it is
limited in its impact, given that a hospital's validation result is not
corrected even after an educational review determines that CMS reached
an incorrect conclusion regarding a hospital's validation score for a
given quarter. Based on this feedback, we are proposing to formalize
and update the Hospital OQR Program's chart-abstracted measure
validation educational review process. Our goal is to reduce the number
of reconsideration requests by identifying and correcting errors before
the final yearly validation score is derived. By identifying and
correcting any mistakes early on, this process could help decrease the
burden during the annual reconsideration process, both for hospitals
and CMS.
Therefore, in an effort to streamline this process, in this
proposed rule, we are proposing to: (1) Formalize this process; and (2)
specify that if the results of an educational review indicate that we
incorrectly scored a hospital's medical records selected for
validation, the corrected quarterly validation score would be used to
compute the hospital's final validation score at the end of the
calendar year. These proposals are discussed in more detail below.
(2) Proposed Educational Review Process for the CY 2020 Payment
Determination and Subsequent Years
(a) Formalizing the Educational Review Process
As stated above, our informal processes for educational review have
been described on the QualityNet Web site.\39\ Under the informal
process, hospitals that were selected and received a score for
validation may request an educational review in order to better
understand the results. Many times, hospitals request an educational
review to examine any data element discrepancies, if they believe the
score is incorrect, or when they have general questions about their
score. Currently, hospitals receive validation results on a quarterly
basis \40\ and can request informal educational reviews for each
quarter. Under this informal process, a hospital has 30 calendar days
from the date the validation results are posted on the QualityNet
Secure Portal Web site to contact the CMS designated contractor,
currently known as the Validation Support Contractor (VSC), to request
an educational review.\41\ In response to a request, the VSC obtains
and reviews medical records directly from the Clinical Data Abstraction
Center (CDAC) and provides feedback. CMS, or its contractor, generally
provides
[[Page 33683]]
educational review results and responses via a secure file transfer to
the hospital.\42\
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\39\ Data Validation--Educational Reviews: Hospitals-Outpatient.
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic/Page/QnetTier3&cid=1228764927987.
\40\ QualityNet: Data Validation Overview. Retrieved from:
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1228758729356.
\41\ The educational review request form can be found at:
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228764927987.
\42\ Hospital OQR Validation Educational Review Process:
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In this proposed rule, we are proposing to formalize this
educational review process, as described above, for the CY 2020 payment
determination and subsequent years--in other words, starting for
validations of CY 2018 data affecting the CY 2020 payment determination
and subsequent years.
We are inviting public comment on our proposal to formalize the
chart-abstracted measures validation educational review process for the
CY 2020 payment determination and subsequent years as described above.
(b) Validation Score Review and Correction
We previously finalized, in the CY 2011 OPPS/ASC final rule with
comment period (75 FR 72105 to 72106), that we calculate validation
scores under the Hospital OQR Program using the upper bound of a one-
tailed confidence interval (CI) with a 75 percent threshold level with
a binomial approach. Using that approach, at the end of each calendar
year, CMS computes a CI using the results of all four quarters to
determine the final validation score.\43\ If the upper bound of this
confidence interval is 75 percent or higher, the hospital will pass the
Hospital OQR Program validation requirement.\44\ In this proposed rule,
we are proposing that if the results of a validation educational review
determine that the original quarterly validation score was incorrect,
the corrected score would be used to compute the final validation score
and CI at the end of each calendar year.
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\43\ QualityNet Data Validation Overview. Retrieved from:
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1228758729356.
\44\ QualityNet Data Validation Overview. Retrieved from:
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In order to determine whether a quarterly validation score was
correct, we are proposing to use a similar process as one previously
finalized for reconsideration requests. Specifically, we are proposing
that during an educational review request, evaluating a validation
score would consist of and be limited to reviewing data elements that
were labeled as mismatched (between the originally calculated measure
score and the measure score calculated in validation) in the original
validation results. We would also take into consideration written
justifications provided by hospitals in the Educational Review request.
For more information about the previously finalized reconsideration
request procedures, we refer readers to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75118 through 75119), the CY 2016
OPPS/ASC final rule with comment period (80 FR 70524), and the CY 2017
OPPS/ASC final rule with comment period (81 FR 79795).
For the CY 2020 payment determination and subsequent years, we are
further proposing that if an educational review requested for any of
the first 3 quarters of validation yields incorrect CMS validation
results for chart-abstracted measures, according to the review process
described and proposed above, we would use the corrected quarterly
score, as recalculated during the educational review process, to
compute the final CI at the end of the calendar year.\45\ We note that
for the last quarter of validation, because of the need to calculate
the confidence interval in a timely manner and the insufficient time
available to conduct educational reviews prior to the annual payment
update, the validation score review and correction would not be
available. Instead, the existing reconsideration process would be used
to dispute any unsatisfactory validation result. We refer readers to
section XIII.D.9. of this proposed rule for a discussion about our
reconsideration and appeals process.
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\45\ Validation pass-fail status is determined by the confidence
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The corrected scores would be applicable to the corresponding
quarter, for the first 3 quarters of validation, for which a request
was submitted. Under this proposal, after evaluating the validation
score during the educational review process, if results show that there
was indeed an error in the originally calculated score, we would take
steps to correct it. However, so as not to dissuade participation in
the educational review process, corrected scores identified through the
educational review would only be used to recalculate the CI if they
indicate that the hospital performed more favorably than previously
determined. If the hospital performed less favorably, their score would
not be updated to reflect the less favorable score.
We note that under this proposal, the quarterly validation reports
issued to hospitals would not be updated to reflect the corrected score
due to the burden associated with reissuing corrected reports. However,
the corrected score would be communicated to the hospital via secure
file format as discussed above.
We are inviting public comment on our proposal, as discussed above
for the CY 2020 payment determination and subsequent years, to use
corrected quarterly scores, as recalculated during the educational
review process described and proposed in section XIII.D.7.c.(2)(a) of
this proposed rule above, to compute the final confidence interval for
the first 3 quarters of validation.
8. Extraordinary Circumstances Exception Process for the CY 2020
Payment Determination and Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68489), the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75119 through 75120), the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66966), the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70524), and 42 CFR 419.46(d) for a complete
discussion of our extraordinary circumstances extension or exception
process under the Hospital OQR Program.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR
79795), we finalized an update to our extraordinary circumstances
exemption (ECE) policy to extend the ECE request deadline for both
chart-abstracted and web-based measures from 45 days following an event
causing hardship to 90 days following an event causing hardship,
effective with ECEs requested on or after January 1, 2017.
We note that many of our quality reporting and value-based
purchasing programs share a common process for requesting an exception
from program reporting due to an extraordinary circumstance not within
a provider's control. The Hospital IQR, Hospital OQR, IPFQR, ASCQR, and
PCHQR Programs, as well as the Hospital Acquired Condition Reduction
Program and the Hospital Readmissions Reduction Program, share similar
processes for ECE requests. We refer readers to policies for the
Hospital IQR Program (76 FR 51651 through 51652, 78 FR 50836 through
50837, 79 FR 50277, 81 FR 57181 through 57182, and 42 CFR
412.140(c)(2)), the IPFQR Program (77 FR 53659 through 53660 and 79 FR
45978), the ASCQR Program
[[Page 33684]]
(77 FR 53642 through 53643 and 78 FR 75140 through 75141), the PCHQR
Program (78 FR 50848), the HAC Reduction Program (80 FR 49579 through
49581), and the Hospital Readmissions Reduction Program (80 FR 49542
through 49543) for program specific information about extraordinary
circumstances exceptions requests.
In reviewing the policies for these programs, we recognized that
there are five areas in which these programs have variances regarding
ECE requests. These are: (1) Allowing the facilities or hospitals to
submit a form signed by the facility's or hospital's CEO versus CEO or
designated personnel; (2) requiring the form be submitted within 30
days following the date that the extraordinary circumstance occurred
versus within 90 days following the date the extraordinary circumstance
occurred; (3) inconsistency regarding specification of a timeline for
us to provide our formal response notifying the facility or hospital of
our decision; (4) inconsistency regarding specification of our
authority to grant ECEs due to CMS data system issues; and (5)
referring to the program as ``extraordinary extensions/exemptions''
versus as ``extraordinary circumstances exceptions.'' We believe
addressing these five areas, as appropriate, can improve administrative
efficiencies for affected facilities or hospitals.
We note that, in the FY 2018 IPPS/LTCH PPS proposed rule, we
examined our policies in these areas for the Hospital Readmissions
Reduction Program, the HAC Reduction Program, the Hospital IQR Program,
the PCHQR Program and the IPFQR Program (82 FR 19967, 19990, 20075,
20085 and 20128) and proposed to address differences in these areas for
those programs. In section XIV.D.6. of this proposed rule, we are also
proposing revisions to our policies for the ASCQR Program.
With the exception of the specification of a timeline for us to
provide our formal response and the terminology used to describe these
processes (items 3 and 5 above), the Hospital OQR Program is aligned
with the existing and proposed policies for the other quality reporting
programs discussed above. As a result, in this proposed rule, we are
proposing to rename the process as the extraordinary circumstances
exceptions (ECE) policy and make conforming changes to 42 CFR
419.46(d).
a. ECE Policy Nomenclature
We have observed that while all quality programs listed above have
developed similar policies to provide exceptions from program
requirements to facilities that have experienced extraordinary
circumstances, such as natural disasters, these programs refer to these
policies using inconsistent terminology. Some programs refer to these
policies as ``extraordinary circumstances extensions/exemptions'' while
others refer to the set of policies as ``extraordinary circumstances
exceptions.'' Several programs (specifically, the Hospital VBP Program,
HAC Reduction Program, and the Hospital Readmissions Reduction Program)
are not able to grant extensions to required data reporting timelines
due to their reliance on data external to their program, and thus the
term, ``extraordinary circumstances extensions/exemptions'' is not
applicable to all programs. However, all of the described programs are
able to offer exceptions from their reporting requirements.
As stated above, in order to align this policy across CMS quality
programs, we are therefore proposing to: (1) Change the name of this
policy from ``extraordinary circumstances extensions or exemptions'' to
``extraordinary circumstances exceptions'' for the Hospital OQR
Program, beginning January 1, 2018; and (2) revise 42 CFR 419.46(d) of
our regulations to reflect this change. We note that changing the name
of this policy does not change the availability for a hospital to
request an extension under the Hospital OQR Program.
We are inviting public comment on these proposals as discussed
above.
b. Timeline for CMS Response to ECE Requests
We also note that we believe it is important for facilities to
receive timely feedback regarding the status of ECE requests. We strive
to complete our review of each ECE request as quickly as possible.
However, we recognize that the number of requests we receive, and the
complexity of the information provided impacts the actual timeframe to
make ECE determinations. To improve transparency of our process, we
believe it is appropriate to specify that we will strive to complete
our review of each request within 90 days of receipt.
9. Hospital OQR Program Reconsideration and Appeals Procedures for the
CY 2020 Payment Determination and Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75118 through 75119), the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70524), and the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79795) for a discussion of our
reconsideration and appeals procedures. We codified the process by
which participating hospitals may submit requests for reconsideration
at 42 CFR 419.46(f). We also codified language at Sec. 419.46(f)(3)
regarding appeals with the Provider Reimbursement Review Board.
We are not proposing any changes to our reconsideration and appeals
procedures.
E. Proposed Payment Reduction for Hospitals That Fail To Meet the
Hospital OQR Program Requirements for the CY 2018 Payment Determination
1. Background
Section 1833(t)(17) of the Act, which applies to subsection (d)
hospitals (as defined under section 1886(d)(1)(B) of the Act), states
that hospitals that fail to report data required to be submitted on
measures selected by the Secretary, in the form and manner, and at a
time, specified by the Secretary will incur a 2.0 percentage point
reduction to their Outpatient Department (OPD) fee schedule increase
factor; that is, the annual payment update factor. Section
1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only
to the payment year involved and will not be taken into account in
computing the applicable OPD fee schedule increase factor for a
subsequent year.
The application of a reduced OPD fee schedule increase factor
results in reduced national unadjusted payment rates that apply to
certain outpatient items and services provided by hospitals that are
required to report outpatient quality data in order to receive the full
payment update factor and that fail to meet the Hospital OQR Program
requirements. Hospitals that meet the reporting requirements receive
the full OPPS payment update without the reduction. For a more detailed
discussion of how this payment reduction was initially implemented, we
refer readers to the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68769 through 68772).
The national unadjusted payment rates for many services paid under
the OPPS equal the product of the OPPS conversion factor and the scaled
relative payment weight for the APC to which the service is assigned.
The OPPS conversion factor, which is updated annually by the OPD fee
schedule increase factor, is used to calculate the OPPS payment rate
for services with the following status indicators (listed in Addendum B
to this proposed rule, which is available via the Internet on
[[Page 33685]]
the CMS Web site): ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'',
``R'', ``S'', ``T'', ``V'', or ``U''. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79796), we clarified that the reporting
ratio does not apply to codes with status indicator ``Q4'' because
services and procedures coded with status indicator ``Q4'' are either
packaged or paid through the Clinical Laboratory Fee Schedule and are
never paid separately through the OPPS. Payment for all services
assigned to these status indicators will be subject to the reduction of
the national unadjusted payment rates for hospitals that fail to meet
Hospital OQR Program requirements, with the exception of services
assigned to New Technology APCs with assigned status indicator ``S'' or
```T''. We refer readers to the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68770 through 68771) for a discussion of this
policy.
The OPD fee schedule increase factor is an input into the OPPS
conversion factor, which is used to calculate OPPS payment rates. To
reduce the OPD fee schedule increase factor for hospitals that fail to
meet reporting requirements, we calculate two conversion factors--a
full market basket conversion factor (that is, the full conversion
factor), and a reduced market basket conversion factor (that is, the
reduced conversion factor). We then calculate a reduction ratio by
dividing the reduced conversion factor by the full conversion factor.
We refer to this reduction ratio as the ``reporting ratio'' to indicate
that it applies to payment for hospitals that fail to meet their
reporting requirements. Applying this reporting ratio to the OPPS
payment amounts results in reduced national unadjusted payment rates
that are mathematically equivalent to the reduced national unadjusted
payment rates that would result if we multiplied the scaled OPPS
relative payment weights by the reduced conversion factor. For example,
to determine the reduced national unadjusted payment rates that applied
to hospitals that failed to meet their quality reporting requirements
for the CY 2010 OPPS, we multiplied the final full national unadjusted
payment rate found in Addendum B of the CY 2010 OPPS/ASC final rule
with comment period by the CY 2010 OPPS final reporting ratio of 0.980
(74 FR 60642).
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771
through 68772), we established a policy that the Medicare beneficiary's
minimum unadjusted copayment and national unadjusted copayment for a
service to which a reduced national unadjusted payment rate applies
would each equal the product of the reporting ratio and the national
unadjusted copayment or the minimum unadjusted copayment, as
applicable, for the service. Under this policy, we apply the reporting
ratio to both the minimum unadjusted copayment and national unadjusted
copayment for services provided by hospitals that receive the payment
reduction for failure to meet the Hospital OQR Program reporting
requirements. This application of the reporting ratio to the national
unadjusted and minimum unadjusted copayments is calculated according to
Sec. 419.41 of our regulations, prior to any adjustment for a
hospital's failure to meet the quality reporting standards according to
Sec. 419.43(h). Beneficiaries and secondary payers thereby share in
the reduction of payments to these hospitals.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68772), we established the policy that all other applicable adjustments
to the OPPS national unadjusted payment rates apply when the OPD fee
schedule increase factor is reduced for hospitals that fail to meet the
requirements of the Hospital OQR Program. For example, the following
standard adjustments apply to the reduced national unadjusted payment
rates: The wage index adjustment; the multiple procedure adjustment;
the interrupted procedure adjustment; the rural sole community hospital
adjustment; and the adjustment for devices furnished with full or
partial credit or without cost. Similarly, OPPS outlier payments made
for high cost and complex procedures will continue to be made when
outlier criteria are met. For hospitals that fail to meet the quality
data reporting requirements, the hospitals' costs are compared to the
reduced payments for purposes of outlier eligibility and payment
calculation. We established this policy in the OPPS beginning in the CY
2010 OPPS/ASC final rule with comment period (74 FR 60642). For a
complete discussion of the OPPS outlier calculation and eligibility
criteria, we refer readers to section II.G. of this proposed rule.
2. Proposed Reporting Ratio Application and Associated Adjustment
Policy for CY 2018
We are proposing to continue our established policy of applying the
reduction of the OPD fee schedule increase factor through the use of a
reporting ratio for those hospitals that fail to meet the Hospital OQR
Program requirements for the full CY 2018 annual payment update factor.
For the CY 2018 OPPS, the proposed reporting ratio is 0.980, calculated
by dividing the proposed reduced conversion factor of 74.953 by the
proposed full conversion factor of 76.483. We are proposing to continue
to apply the reporting ratio to all services calculated using the OPPS
conversion factor. For the CY 2018 OPPS, we are proposing to apply the
reporting ratio, when applicable, to all HCPCS codes to which we have
proposed status indicator assignments of ``J1'', ``J2'', ``P'', ``Q1'',
``Q2'', ``Q3'', ``R'', ``S'', ``T'', ``V'', and ``U'' (other than new
technology APCs to which we have proposed status indicator assignment
of ``S'' and ``T''). As noted above, in the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79796), we clarified that the reporting
ratio does not apply to codes with status indicator ``Q4'' because
services and procedures coded with status indicator ``Q4'' are either
packaged or paid through the Clinical Laboratory Fee Schedule and are
never paid separately through the OPPS. We are proposing to continue to
exclude services paid under New Technology APCs. We are proposing to
continue to apply the reporting ratio to the national unadjusted
payment rates and the minimum unadjusted and national unadjusted
copayment rates of all applicable services for those hospitals that
fail to meet the Hospital OQR Program reporting requirements. We also
are proposing to continue to apply all other applicable standard
adjustments to the OPPS national unadjusted payment rates for hospitals
that fail to meet the requirements of the Hospital OQR Program.
Similarly, we are proposing to continue to calculate OPPS outlier
eligibility and outlier payment based on the reduced payment rates for
those hospitals that fail to meet the reporting requirements.
We are inviting public comments on these proposals.
XIV. Requirements for the Ambulatory Surgical Center Quality Reporting
(ASCQR) Program
A. Background
1. Overview
We refer readers to section XIII.A.1. of this proposed rule for a
general overview of our quality reporting programs.
2. Statutory History of the ASCQR Program
We refer readers to section XIV.K.1. of the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74492 through 74494) for a detailed
discussion of the statutory history of the ASCQR Program.
[[Page 33686]]
3. Regulatory History of the ASCQR Program
We seek to promote higher quality and more efficient health care
for beneficiaries. This effort is supported by the adoption of widely-
agreed-upon quality measures. We have worked with relevant stakeholders
to define measures of quality in almost every setting and currently
measure some aspect of care for almost all Medicare beneficiaries.
These measures assess structural aspects of care, clinical processes,
patient experiences with care, and outcomes. We have implemented
quality measure reporting programs for multiple settings of care. To
measure the quality of ASC services, we implemented the ASCQR Program.
We refer readers to section XV.A.3. of the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75122), section XIV. of the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66966 through 66987), section
XIV. of the CY 2016 OPPS/ASC final rule with comment period (80 FR
70526 through 70538) and section XIV. of the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79797 through 79826) for an overview of
the regulatory history of the ASCQR Program.
B. ASCQR Program Quality Measures
1. Considerations in the Selection of ASCQR Program Quality Measures
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68493 through 68494) for a detailed discussion of the
priorities we consider for ASCQR Program quality measure selection. We
are not proposing any changes to this policy.
2. Accounting for Social Risk Factors in the ASCQR Program
We understand that social risk factors such as income, education,
race and ethnicity, employment, disability, community resources, and
social support (certain factors of which are also sometimes referred to
as socioeconomic status (SES) factors or socio-demographic status (SDS)
factors) play a major role in health. One of our core objectives is to
improve beneficiary outcomes including reducing health disparities, and
we want to ensure that all beneficiaries, including those with social
risk factors, receive high quality care. In addition, we seek to ensure
that the quality of care furnished by providers and suppliers is
assessed as fairly as possible under our programs while ensuring that
beneficiaries have adequate access to excellent care.
We have been reviewing reports prepared by the Office of the
Assistant Secretary for Planning and Evaluation (ASPE) \46\ and the
National Academies of Sciences, Engineering, and Medicine on the issue
of measuring and accounting for social risk factors in CMS' value-based
purchasing and quality reporting programs, and considering options on
how to address the issue in these programs. On December 21, 2016, ASPE
submitted a Report to Congress on a study it was required to conduct
under section 2(d) of the Improving Medicare Post-Acute Care
Transformation (IMPACT) Act of 2014. The study analyzed the effects of
certain social risk factors of Medicare beneficiaries on quality
measures and measures of resource use used in one or more of nine
Medicare value-based purchasing programs.\47\ The report also included
considerations for strategies to account for social risk factors in
these programs. In a January 10, 2017 report released by the National
Academies of Sciences, Engineering, and Medicine, the body provided
various potential methods for accounting for social risk factors,
including stratified public reporting.\48\
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\46\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs. 21
Dec. 2016. Available at: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\47\ Office of the Assistant Secretary for Planning and
Evaluation. 2016. Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs.
Available at: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
\48\ National Academies of Sciences, Engineering, and Medicine.
2017. Accounting for social risk factors in Medicare payment.
Washington, DC: The National Academies Press.
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As noted in the FY 2017 IPPS/LTCH PPS final rule, the NQF has
undertaken a 2-year trial period in which new measures, measures
undergoing maintenance review, and measures endorsed with the condition
that they enter the trial period can be assessed to determine whether
risk adjustment for selected social risk factors is appropriate for
these measures. This trial entails temporarily allowing inclusion of
social risk factors in the risk-adjustment approach for some
performance measures. At the conclusion of the trial, NQF will issue
recommendations on the future inclusion of social risk factors in risk
adjustment for these quality measures, and we will closely review its
findings.
As we continue to consider the analyses and recommendations from
these reports and await the results of the NQF trial on risk adjustment
for quality measures, we are continuing to work with stakeholders in
this process. As we have previously communicated, we are concerned
about holding providers to different standards for the outcomes of
their patients with social risk factors because we do not want to mask
potential disparities or minimize incentives to improve the outcomes
for disadvantaged populations. Keeping this concern in mind, we are
seeking public comment on whether we should account for social risk
factors in the ASCQR Program, and if so, what method or combination of
methods would be most appropriate for accounting for social risk
factors. Examples of methods include: confidential reporting to
providers of measure rates stratified by social risk factors; public
reporting of stratified measure rates; and potential risk adjustment of
a particular measure as appropriate based on data and evidence.
In addition, we are seeking public comment on which social risk
factors might be most appropriate for reporting stratified measure
scores and/or potential risk adjustment of a particular measure.
Examples of social risk factors include, but are not limited to, dual
eligibility/low-income subsidy, race and ethnicity, and geographic area
of residence. We are seeking comments on which of these factors,
including current data sources where this information would be
available, could be used alone or in combination, and whether other
data should be collected to better capture the effects of social risk.
We will take commenters' input into consideration as we continue to
assess the appropriateness and feasibility of accounting for social
risk factors in the ASCQR Program. We note that any such changes would
be proposed through future notice and comment rulemaking.
We look forward to working with stakeholders as we consider the
issue of accounting for social risk factors and reducing health
disparities in CMS programs. Of note, implementing any of the above
methods would be taken into consideration in the context of how this
and other CMS programs operate (for example, data submission methods,
availability of data, statistical considerations relating to
reliability of data calculations, among others), so we also welcome
comment on operational considerations. CMS is committed to ensuring
that its beneficiaries have access to and receive excellent care, and
that the quality of care furnished by providers and suppliers is
assessed fairly in CMS programs.
[[Page 33687]]
3. Policies for Retention and Removal of Quality Measures From the
ASCQR Program
a. Retention of Previously Adopted ASCQR Program Measures
We previously adopted a policy that quality measures adopted for an
ASCQR Program measure set for a previous payment determination year be
retained in the ASCQR Program for measure sets for subsequent payment
determination years, except when they are removed, suspended, or
replaced as indicated (76 FR 74494 and 74504; 77 FR 68494 through
68495; 78 FR 75122; and 79 FR 66967 through 66969). We are not
proposing any changes to this policy.
b. Proposed Measure Removal
We refer readers to the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66967 through 66969) and 42 CFR 416.320 for a detailed
discussion of the process for removing adopted measures from the ASCQR
Program. We are not proposing any changes to this process.
In this proposed rule, we are proposing to remove a total of three
measures for the CY 2019 payment determination and subsequent years:
(1) ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing; (2) ASC-6:
Safe Surgery Checklist Use; and (3) ASC-7: ASC Facility Volume Data on
Selected Procedures. These proposals are discussed in more detail
below.
(1) Proposed Removal of ASC-5: Prophylactic Intravenous (IV) Antibiotic
Timing Beginning with the CY 2019 Payment Determination
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74499 through 74501) where we adopted ASC-5: Prophylactic
Intravenous (IV) Antibiotic Timing measure (formerly NQF #0264)
beginning with the CY 2014 payment determination and finalized the
measure's data collection and data submission timelines (76 FR 74515
through 74516). This measure assesses whether intravenous antibiotics
given for prevention of surgical site infection were administered on
time.
Based on our analysis of ASCQR Program measure data for CY 2014
through 2016 encounters, ASC performance on this measure is so high and
unvarying that meaningful distinctions in improvement cannot be made;
as a result, we believe this measure meets removal criterion number one
under the ASCQR Program's finalized measure removal criteria. The ASCQR
Program previously finalized two criteria for determining when a
measure is ``topped out:'' (1) When there is statistically
indistinguishable performance at the 75th and 90th percentiles of
national facility performance; and (2) when the measure's truncated
coefficient of variation (COV) is less than or equal to 0.10 (79 FR
66968 through 66969). These analyses are captured in the table below.
ASC-5 Topped Out Analysis
----------------------------------------------------------------------------------------------------------------
75th 90th
Encounters Number of ASCs percentile percentile Truncated COV
----------------------------------------------------------------------------------------------------------------
CY 2014......................................... 2,206 100.000 100.000 0.02633
CY 2015......................................... 2,196 100.000 100.000 0.03289
CY 2016......................................... 2,158 100.000 100.000 0.02619
----------------------------------------------------------------------------------------------------------------
As displayed in the table above, there is no distinguishable
difference in ASC performance between the 75th and 90th percentiles
under the ASC-5 measure, and the truncated coefficient of variation has
been below 0.10 since 2014. Therefore, this ASC-5 measure meets both
``topped out'' measure criteria for the ASCQR Program.
Furthermore, we note that the NQF endorsement was removed on
February 13, 2015; in its discussion of whether to continue endorsement
for ASC-5, the Surgery Standing Committee also noted that ASC
performance on this measure was very high, with 99 percent of
facilities meeting the timely antibiotic administration threshold in CY
2013.\49\ We believe that removal of this measure from the ASCQR
Program measure set is appropriate, as there is little room for
improvement and removal would alleviate maintenance costs and
administrative burden to ASCs. As such, we believe the burdens outweigh
the benefits of keeping the measure in the ASCQR Program. Therefore, we
are proposing to remove the ASC-5: Prophylactic Intravenous (IV)
Antibiotic Timing measure for the CY 2019 payment determination and
subsequent years. Furthermore, we note that a similar measure was
removed from the Hospital OQR Program in the CY 2015 OPPS/ASC final
rule with comment period (79 FR 66942 through 66944) due to topped-out
status.
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\49\ NQF. ``NQF-Endorsed Measures for Surgical Procedures''.
Technical Report. Available at: https://www.qualityforum.org/Publications/2015/02/NQF-Endorsed_Measures_for_Surgical_Procedures.aspx.
---------------------------------------------------------------------------
We are inviting public comment on our proposal to remove the ASC-5:
Prophylactic Intravenous (IV) Antibiotic Timing measure for the CY 2019
payment determination and subsequent years as discussed above.
(2) Proposed Removal of ASC-6: Safe Surgery Checklist Use Beginning
With the CY 2019 Payment Determination
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74505 through 74507 and 74509), where we adopted ASC-6:
Safe Surgery Checklist Use beginning with the CY 2015 payment
determination. This structural measure of facility process assesses
whether an ASC employed a safe surgery checklist that covered each of
the three critical perioperative periods (prior to administering
anesthesia, prior to skin incision, and prior to patient leaving the
operating room) for the entire data collection period.
Based on our analysis of ASCQR Program measure data for CYs 2014 to
2016 encounters, the ASC-6 measure meets our first criterion for
measure removal that measure performance is so high and unvarying that
meaningful distinctions and improvements in performance can no longer
be made. The ASCQR Program previously finalized two criteria for
determining when a measure is ``topped out:'' (1) when there is
statistically indistinguishable performance at the 75th and 90th
percentiles of national facility performance; and (2) when the
measure's truncated coefficient of variation is less than or equal to
0.10 (79 FR 66968 through 66969). These analyses are captured in the
table below.
[[Page 33688]]
ASC-6 Performance Analysis
----------------------------------------------------------------------------------------------------------------
75th 90th
Encounters Number of ASCs Rate percentile percentile Truncated COV
----------------------------------------------------------------------------------------------------------------
CY 2012......................... 4,356 0.989 100.000 100.000 0.106
CY 2013 50...................... (*) (*) (*) (*) (*)
CY 2014......................... 4,328 0.997 100.000 100.000 0.050
CY 2015......................... 4,305 0.998 100.000 100.000 0.043
----------------------------------------------------------------------------------------------------------------
Based on the analysis above the national rate of ``Yes'' response
for the ASC-6 measure is nearly 1.0, or 100 percent, nationwide, and
has remained at this level for the last 2 years. In addition, there is
no distinguishable difference in ASC performance between the 75th and
90th percentiles under measure, and the truncated coefficient of
variation has been below 0.10 since 2014. We believe that removal of
this measure from the ASCQR Program measure set is appropriate, as
there is little room for improvement. In addition, removal of this
measure would alleviate the maintenance costs and administrative burden
to ASCs associated with retaining the measure. As such, we believe the
burdens of this measure outweigh the benefits of keeping the measure in
the Program.
---------------------------------------------------------------------------
\50\ We note that no performance data was collected for CY 2013
events for the web-based measures; therefore, we lack performance
data for the ASC-6 measure for this year of the ASCQR Program.
https://www.qualitynet.org/dcs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1228890196351&blobheader=multipart%2Foctet-stream&blobheadername1=Content-Disposition&blobheadervalue1attachment%3Bfilename%3DASC_wbnr_prsntn_121813_1ppg.pdf&blobcol=urldata&blobtable=MungoBlobs.
---------------------------------------------------------------------------
Therefore, we are proposing to remove ASC-6 from the ASCQR Program
measure set beginning with the CY 2019 payment determination. We also
refer readers to section XIII.B.4.c.(6) of this proposed rule, where
the Hospital OQR Program is also proposing to remove a similar measure.
We are inviting public comment on our proposal to remove the ASC-6:
Safe Surgery Checklist Use measure for the CY 2019 payment
determination and subsequent years as discussed above.
(3) Proposed Removal of ASC-7: ASC Facility Volume Data on Selected
Procedures Beginning With the CY 2019 Payment Determination
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74507 through 74509), where we adopted ASC-7: ASC
Facility Volume Data on Selected Procedures beginning with the CY 2015
payment determination. This structural measure of facility capacity
collects surgical procedure volume data on six categories of procedures
frequently performed in the ASC setting (76 FR 74507).
We adopted the ASC-7 measure based on evidence that volume of
surgical procedures, particularly of high-risk surgical procedures, is
related to better patient outcomes, including decreased medical errors
and mortality (76 FR 74507). We further stated our belief that publicly
reporting volume data would provide patients with beneficial
performance information to use in selecting a care provider. However,
over time, we have adopted, and are proposing and intend to continue to
adopt, more measures assessing ASCs' performance on specific procedure
types. For example, in the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79801 through 79803), we adopted ASC-14: Unplanned
Anterior Vitrectomy, a measure assessing patient outcomes following
ophthalmologic procedures, and are proposing to adopt a second
ophthalmology-specific measure, ASC-16: Toxic Anterior Segment
Syndrome, in section XIV.B.6.a. of this proposed rule. We believe these
procedure-type-specific measures will provide patients with more
valuable ASC performance data than the ASC-7 measure in selecting an
ASC for their care. For this reason, we believe the ASC-7 measure meets
our second criterion for removal from the program; specifically, that
there are other measures available that are more strongly associated
with desired patient outcomes for the particular topic. In addition,
removal of this measure would alleviate the maintenance costs and
administrative burden to ASCs associated with retaining the measure. As
such, we believe the burdens of this measure outweigh the benefits of
keeping the measure in the ASCQRR Program. Therefore, we are proposing
to remove ASC-7: ASC Facility Volume Data on Selected Procedures from
the ASCQR Program beginning with the CY 2019 payment determination. We
refer readers to section XIII.B.4.c.(2) of this proposed rule where we
are proposing to remove a similar measure from the Hospital OQR
Program.
We are inviting public comment on our proposal to remove the ASC-7:
ASC Facility Volume Data on Selected Procedures measure for the CY 2019
payment determination and subsequent years as discussed above.
4. Proposal to Delay ASC-15a-e: Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS)
Survey-Based Measures Beginning With the CY 2020 Payment Determination
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period where we adopted ASC-15a-e (81 FR 79803 through 79817), and
finalized data collection and data submission timelines (81 FR 79822
through 79824). These measures assess patients' experience with care
following a procedure or surgery in an ASC by rating patient experience
as a means for empowering patients and improving the quality of their
care.
In this proposed rule, we are proposing to delay implementation of
the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare
Providers and Systems (OAS CAHPS) Survey-based Measures (ASC-15a-e)
beginning with the CY 2020 payment determination (CY 2018 data
collection) until further action in future rulemaking. Since our
adoption of these measures, we have come to believe that we lack
important operational and implementation data. Specifically, we want to
ensure that the survey measures appropriately account for patient
response rates, both aggregate and by survey administration method;
reaffirm the reliability of national OAS CAHPS Survey data; and
appropriately account for the burden associated with administering the
survey in the outpatient setting of care. We note that commenters
expressed concern over the burden associated with the survey in the CY
2017 OPPS/ASC final rule with comment period (81 FR 79810). We believe
that the national implementation of the survey, which began in January
2016 and will conclude in December 2017, would provide valuable
information moving forward. We plan to conduct analyses of the national
implementation data to undertake any necessary modifications to the
survey tool and/or CMS systems. We believe it is important to allow
time
[[Page 33689]]
for any modifications before requiring the survey under the ASCQR
Program. However, we continue to believe that these measures address an
area of care that is not adequately addressed in our current measure
set and will be useful to assess aspects of care where the patient is
the best or only source of information.
Further, we continue to believe these measures will enable
objective and meaningful comparisons between ASCs. Therefore, we are
proposing to delay implementation of ASC-15a-e beginning with the CY
2020 payment determination (CY 2018 data collection) until further
action in future rulemaking. We also refer readers to section XIII.B.5.
of this proposed rule where we are making a similar proposal in the
Hospital OQR Program.
We are inviting public comment on our proposal to delay the OAS
CAHPS Survey-based measures beginning with the CY 2020 payment
determination as discussed above.
5. ASCQR Program Quality Measures Adopted in Previous Rulemaking
For the CY 2020 payment determination and subsequent years, we have
previously finalized the following measure set. We note that this chart
includes the ASC-5, ASC-6, and ASC-7 measures, which are being proposed
for removal as discussed above, as well as the ASC-15a-e. measures,
which are being proposed for delay beginning with the CY 2020 payment
determination and until further action as discussed above:
ASCQR Program Measure Set Previously Finalized for the CY 2020 Payment
Determination and Subsequent Years
------------------------------------------------------------------------
ASC No. NQF No. Measure name
------------------------------------------------------------------------
ASC-1........................ 0263............... Patient Burn.
ASC-2........................ 0266............... Patient Fall.
ASC-3........................ 0267............... Wrong Site, Wrong
Side, Wrong
Patient, Wrong
Procedure, Wrong
Implant.
ASC-4........................ 0265 [dagger]...... All-Cause Hospital
Transfer/Admission.
ASC-5........................ 0264 [dagger]...... Prophylactic
Intravenous (IV)
Antibiotic Timing.*
ASC-6........................ None............... Safe Surgery
Checklist Use.*
ASC-7........................ None............... ASC Facility Volume
Data on Selected
Procedures.*
ASC-8........................ 0431............... Influenza
Vaccination
Coverage Among
Healthcare
Personnel.
ASC-9........................ 0658............... Endoscopy/Polyp
Surveillance:
Appropriate Follow-
Up Interval for
Normal Colonoscopy
in Average Risk
Patients.
ASC-10....................... 0659............... Endoscopy/Polyp
Surveillance:
Colonoscopy
Interval for
Patients with a
History of
Adenomatous Polyps-
Avoidance of
Inappropriate Use.
ASC-11....................... 1536............... Cataracts:
Improvement in
Patient's Visual
Function within 90
Days Following
Cataract Surgery.**
ASC-12....................... 2539............... Facility 7-Day Risk-
Standardized
Hospital Visit Rate
after Outpatient
Colonoscopy.
ASC-13....................... None............... Normothermia
Outcome.
ASC-14....................... None............... Unplanned Anterior
Vitrectomy.
ASC-15a...................... None............... OAS CAHPS--About
Facilities and
Staff.***
ASC-15b...................... None............... OAS CAHPS--
Communication About
Procedure.***
ASC-15c...................... None............... OAS CAHPS--
Preparation for
Discharge and
Recovery.***
ASC-15d...................... None............... OAS CAHPS--Overall
Rating of
Facility.***
ASC-15e...................... None............... OAS CAHPS--
Recommendation of
Facility.***
------------------------------------------------------------------------
[dagger] We note that NQF endorsement for this measure was removed.
* Measure proposed for removal beginning with the CY 2019 payment
determination, as discussed in section XIV.B.3.b. of this proposed
rule.
** Measure voluntarily collected effective beginning with the CY 2017
payment determination as set forth in section XIV.E.3.c. of the CY
2015 OPPS/ASC final rule with comment period (79 FR 66984 through
66985).
*** Measure proposed for delay in reporting beginning with the CY 2020
payment determination (CY 2018 data collection) until further action
in future rulemaking as discussed in section XIV.B.4. of this proposed
rule.
6. Proposed New ASCQR Program Quality Measures for the CY 2021 and CY
2022 Payment Determinations and Subsequent Years
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75124) for a detailed discussion of our approach to
measure selection for the ASCQR Program. In this proposed rule, we are
proposing to adopt a total of three new measures for the ASCQR Program:
One measure collected via a CMS web-based tool for the CY 2021 payment
determination and subsequent years (ASC-16: Toxic Anterior Segment
Syndrome), and two measures collected via claims for the CY 2022
payment determination and subsequent years (ASC-17: Hospital Visits
after Orthopedic Ambulatory Surgical Center Procedures; and ASC-18:
Hospital Visits after Urology Ambulatory Surgical Center Procedures).
These measures are discussed in detail below.
a. Proposed Adoption of ASC-16: Toxic Anterior Segment Syndrome
Beginning With the CY 2021 Payment Determination
(1) Background
Toxic Anterior Segment Syndrome (TASS), an acute, noninfectious
inflammation of the anterior segment of the eye, is a complication of
anterior segment eye surgery that typically develops within 24 hours
after surgery.\51\ The TASS measure assesses the number of ophthalmic
anterior segment surgery patients diagnosed with TASS within two days
of surgery. Although most cases of TASS can be treated, the
inflammatory response associated with TASS can cause serious damage to
intraocular tissues, resulting in vision loss.\52\ Prevention requires
careful attention to solutions, medications, and ophthalmic devices and
to cleaning and sterilization of surgical equipment because of the
numerous potential etiologies.\53\ Despite
[[Page 33690]]
a recent focus on prevention, cases of TASS continue to occur,
sometimes in clusters.\54\ With millions of anterior segment surgeries
being performed in the United States each year, measurement and public
reporting have the potential to serve as an additional tool to drive
further preventive efforts.
---------------------------------------------------------------------------
\51\ Centers for Disease Control and Prevention. Toxic Anterior
Segment Syndrome after Cataract Surgery--Maine, 2006. MMWR Morb
Mortal Wkly Rep. 2007 Jun 29;56(25):629-630.
\52\ Breebaart AC, Nuyts RM, Pels E, Edelhauser HF, Verbraak FD.
Toxic Endothelial Cell Destruction of the Cornea after Routine
Extracapsular Cataract Surgery. Arch Ophthalmol 1990; 108:1121-1125.
\53\ Hellinger WC, Bacalis LP, Erdhauser HF, Mamalis N, Milstein
B, Masket S. ASCRS Ad Hoc Task Force on Cleaning and Sterilization
of Intraocular Instruments: Recommended Practices for Cleaning and
Sterilizing Intraocular Surgical Instruments. J Cataract Refract
Surg. 2007 Jun;33(6):1095-1100.
\54\ Moyle W, Yee RD, Burns JK, Biggins T. Two Consecutive
Clusters of Toxic Anterior Segment Syndrome. Optom Vis Sci. 2013
Jan;90(1):e11-23.
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TASS is of interest to the ASCQR Program because cataract surgery
is an anterior segment surgery commonly performed at ASCs. In addition,
the TASS measure addresses the MAP-identified priority measure area of
procedure complications for the ASCQR Program.\55\
---------------------------------------------------------------------------
\55\ National Quality Forum. ``MAP 2017 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: https://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
---------------------------------------------------------------------------
(2) Overview of Measure
We believe it is important to monitor the rate of TASS in the ASC
setting because ophthalmologic procedures such as anterior segment
surgery are commonly performed in this setting of care. Therefore, we
are proposing to adopt the ASC-16: Toxic Anterior Segment Syndrome
measure, which is based on aggregate measure data collected by the ASC
and submitted via a CMS online data submission tool (QualityNet), in
the ASCQR Program for the CY 2021 payment determination and subsequent
years. We expect the measure would promote improvement in patient care
over time, because measurement coupled with transparency in publicly
reporting of measure information would make patient outcomes following
anterior segment procedures more visible to ASCs and patients and
incentivize ASCs to incorporate quality improvement activities to
reduce the incidence of TASS where necessary.
Section 1890A of the Act requires the Secretary to establish a
prerulemaking process with respect to the selection of certain
categories of quality and efficiency measures. Under section
1890A(a)(2) of the Act, the Secretary must make available to the public
by December 1 of each year a list of quality and efficiency measures
that the Secretary is considering for the Medicare program. The
proposed ASC-16 measure was included on the 2015 MUC list \56\ and
reviewed by the MAP. The MAP reviewed the measure (MUC15-1047) and
conditionally supported it for the ASCQR Program pending NQF review and
endorsement.\57\ The MAP noted the high value and urgency of this
measure, given many new entrants to the ambulatory surgical center
space, as well as the clustering outbreaks of TASS. The MAP also
cautioned that the measure be reviewed and endorsed by NQF before
adoption into the ASCQR Program, so that a specialized standing
committee can evaluate the measure for scientific acceptability.\58\ A
summary of the MAP recommendations can be found at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
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\56\ National Quality Forum. 2015 Measures Under Consideration
List. National Quality Forum, Dec. 2016. Available at: https://www.qualityforum.org/2015_Measures_Under_Consideration.aspx, under
``2015 Measures Under Consideration List (PDF).''
\57\ National Quality Forum. 2016 Spreadsheet of Final
Recommendations to HHS and CMS. Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
\58\ National Quality Forum. 2016 Spreadsheet of Final
Recommendations to HHS and CMS. Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
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Sections 1833(i)(7)(B) and 1833(t)(17)(C)(i) of the Act, when read
together, require the Secretary, except as the Secretary may otherwise
provide, to develop measures appropriate for the measurement of the
quality of care furnished by ASCs that reflect consensus among affected
parties and, to the extent feasible and practicable, that include
measures set forth by one or more national consensus building entities.
However, we note that section 1833(i)(7)(B) of the Act does not require
that each measure we adopt for the ASCQR Program be endorsed by a
national consensus building entity, or by the NQF specifically.
Further, under section 1833(i)(7)(B) of the Act, section
1833(t)(17)(C)(i) of the Act applies to the ASCQR Program, except as
the Secretary may otherwise provide. Under this provision, the
Secretary has further authority to adopt non-endorsed measures. As
stated in the CY 2012 OPPS/ASC final rule with comment period (76 FR
74465 and 74505), we believe that consensus among affected parties can
be reflected through means other than NQF endorsement, including
consensus achieved during the measure development process, consensus
shown through broad acceptance and use of measures, and consensus
through public comment. We believe this proposed measure meets these
statutory requirements.
The proposed ASC-16 measure is not NQF-endorsed. However, this
measure is maintained by the ASC Quality Collaboration,\59\ an entity
recognized within the community as an expert in measure development for
the ASC setting. We believe that this measure is appropriate for the
measurement of quality care furnished by ASCs because ophthalmologic
procedures are commonly performed in ASCs and, as discussed above, the
inflammatory response associated with TASS can cause serious damage to
patients' vision, but TASS is also preventable through careful
attention to solutions, medications, ophthalmic devices, and to
cleaning and sterilization of surgical equipment. While the Toxic
Anterior Segment Syndrome measure is not NQF-endorsed, we believe this
measure reflects consensus among affected parties, because the MAP,
which represents stakeholder groups, reviewed and conditionally
supported the measure \60\ for use in the ASCQR Program. The MAP agreed
that this measure is high-value and urgent in the current healthcare
marketplace and the number of new entrants to the surgical center
place, as well as the clustering outbreaks of TASS.\61\ Furthermore, we
believe that this measure is scientifically acceptable, because the
measure steward has completed reliability testing and validity
assessment of the measure.\62\ Specifically, a retrospective chart
audit of the ASCs participating in measurement testing found no
differences between the originally submitted and re-abstracted TASS
rates, providing strong evidence the measure is reliable. The measure
steward also conducted a formal consensus review to assess the
measure's validity; the results of this assessment showed participants
believe the measure appears to measure what it is intended to, and is
defined in a way that will allow for consistent interpretation of the
inclusion and exclusion criteria from ASC to ASC.
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\59\ ASC Quality Collaboration. ``ASC Quality Collaboration.''
Available at: https://www.ascquality.org/.
\60\ National Quality Forum. 2016 Spreadsheet of Final
Recommendations to HHS and CMS. Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
\61\ National Quality Forum. 2016 Spreadsheet of Final
Recommendations to HHS and CMS. Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
\62\ AHRQ Measure Summary. Retrieved from: https://www.qualitymeasures.ahrq.gov/summaries/summary/49582/ambulatory-surgery-percentage-of-ophthalmic-anterior-segment-surgery-patients-diagnosed-with-toxic-anterior-segment-syndrome-tass-within-2-days-of-surgery.
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[[Page 33691]]
(3) Data Sources
This measure is based on aggregate measure data collected via
chart-abstraction by the ASC and submitted via a CMS online data
submission tool (that is, QualityNet).
We are proposing that the data collection period for the proposed
ASC-16 measure would be the calendar year two years prior to the
applicable payment determination year. For example, for the CY 2021
payment determination, the data collection period would be CY 2019. We
also are proposing that ASCs submit these data to CMS during the time
period of January 1 to May 15 in the year prior to the affected payment
determination year. For example, for the CY 2021 payment determination,
the submission period would be January 1, 2020 to May 15, 2020. We
refer readers to section XIV.D.3.b. of this proposed rule for a more
detailed discussion of the requirements for data submitted via a CMS
online data submission tool.
(4) Measure Calculation
The outcome measured in the proposed ASC-16 measure is the number
of ophthalmic anterior segment surgery patients diagnosed with TASS
within 2 days of surgery. The numerator for this measure is all
anterior segment surgery patients diagnosed with TASS within 2 days of
surgery. The denominator for this measure is all anterior segment
surgery patients. The specifications for this measure for the ASC
setting can be found at: https://ascquality.org/documents/ASC%20QC%20Implementation%20Guide%203.2%20October%202015.pdf.
(5) Cohort
The measure includes all patients, regardless of age, undergoing
anterior segment surgery at an ASC. Additional methodology and measure
development details are available at: https://www.ascquality.org/qualitymeasures.cfm under ``ASC Quality Collaboration Measures
Implementation Guide.''
(6) Risk Adjustment
The proposed ASC-16 measure is not risk-adjusted; risk adjustment
for patient characteristics is not appropriate for this measure.
We are inviting public comment on our proposal to adopt the ASC-16:
Toxic Anterior Segment Syndrome measure for the CY 2021 payment
determination and subsequent years as discussed above. If the proposals
in section XIV.B.3.b., XIB.b.4. and XIV.B.6.a. of this proposed rule
are finalized, the measure set for the ASCQR Program CY 2021 payment
determination and subsequent years would be as listed below. We note
that the measures being proposed for removal in this proposed rule are
not included in this chart.
ASCQR Program Measure Set Previously Finalized and Proposed for the CY
2021 Payment Determination and Subsequent Years
------------------------------------------------------------------------
ASC No. NQF No. Measure name
------------------------------------------------------------------------
ASC-1........................ 0263............... Patient Burn.
ASC-2........................ 0266............... Patient Fall.
ASC-3........................ 0267............... Wrong Site, Wrong
Side, Wrong
Patient, Wrong
Procedure, Wrong
Implant.
ASC-4........................ 0265 [dagger]...... All-Cause Hospital
Transfer/Admission.
ASC-8........................ 0431............... Influenza
Vaccination
Coverage among
Healthcare
Personnel.
ASC-9........................ 0658............... Endoscopy/Polyp
Surveillance:
Appropriate Follow-
Up Interval for
Normal Colonoscopy
in Average Risk
Patients.
ASC-10....................... 0659............... Endoscopy/Polyp
Surveillance:
Colonoscopy
Interval for
Patients with a
History of
Adenomatous Polyps-
Avoidance of
Inappropriate Use.
ASC-11....................... 1536............... Cataracts:
Improvement in
Patient's Visual
Function within 90
Days Following
Cataract Surgery.*
ASC-12....................... 2539............... Facility 7-Day Risk-
Standardized
Hospital Visit Rate
after Outpatient
Colonoscopy.
ASC-13....................... None............... Normothermia
Outcome.
ASC-14....................... None............... Unplanned Anterior
Vitrectomy.
ASC-15a...................... None............... OAS CAHPS--About
Facilities and
Staff.**
ASC-15b...................... None............... OAS CAHPS--
Communication About
Procedure.**
ASC-15c...................... None............... OAS CAHPS--
Preparation for
Discharge and
Recovery.**
ASC-15d...................... None............... OAS CAHPS--Overall
Rating of
Facility.**
ASC-15e...................... None............... OAS CAHPS--
Recommendation of
Facility.**
ASC-16....................... None............... Toxic Anterior
Segment
Syndrome.***
------------------------------------------------------------------------
[dagger] We note that NQF endorsement for this measure was removed.
* Measure voluntarily collected effective beginning with the CY 2017
payment determination as set forth in section XIV.E.3.c. of the CY
2015 OPPS/ASC final rule with comment period (79 FR 66984 through
66985).
** Measure proposed for delay in reporting beginning with the CY 2020
payment determination (CY 2018 data collection) and until further
action in future rulemaking, as discussed in section XIV.B.4. of this
proposed rule.
*** New measure proposed for the CY 2021 payment determination and
subsequent years.
b. Proposed Adoption of ASC-17: Hospital Visits After Orthopedic
Ambulatory Surgical Center Procedures Beginning With the CY 2022
Payment Determination
(1) Background
Reporting the quality of care provided at ASCs is a key priority in
the context of growth in the number of ASCs and the number of
procedures performed in this setting. More than 60 percent of all
medical or surgical procedures performed in 2006 were performed at
ASCs; this represents a three-fold increase from the late 1990s.\63\ In
2015, more than 3.4 million fee-for-service Medicare beneficiaries were
treated at 5,475 Medicare-certified ASCs, and spending on ASC services
by Medicare and its beneficiaries amounted to 4.1 billion dollars.\64\
The patient population served at ASCs has increased not only in volume,
but also in age and complexity, which can be partially
[[Page 33692]]
attributed to improvements in anesthetic care and innovations in
minimally invasive surgical techniques.65 66 As such, ASCs
have become the preferred setting for the provision of low-risk
surgical and medical procedures in the United States, as many patients
experience shorter wait times, prefer to avoid hospitalization, and are
able to return to work more quickly.\67\ As the number of orthopedic
procedures performed in ASCs increases, it is increasingly important to
report the quality of care for patients undergoing these procedures.
According to Medicare claims data, approximately seven percent of
surgeries performed in ASCs in 2007 were orthopedic in nature, which
reflects a 77-percent increase in orthopedic procedures performed at
ASCs from 2000 to 2007.\68\
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\63\ Cullen KA, Hall MJ, Golosinskiy A, Statistics NFcH.
Ambulatory Surgery in the United States, 2006. Nat Health Stat Rept;
2009.
\64\ Medicare Payment Advisory Commission (MedPAC). Report to
Congress: Medicare Payment Policy. March 2017; available at: https://www.medpac.gov/docs/default-source/reports/mar17_entirereport.pdf?sfvrsn=0.
\65\ Bettelli G. High Risk Patients in Day Surgery. Minerva
Anestesiologica. 2009;75(5):259-268. See also Fuchs K. Minimally
Invasive Surgery. Endoscopy. 2002;34(2):154-159.
\66\ Fuchs K. Minimally invasive surgery. Endoscopy.
2002;34(2):154159.
\67\ Cullen KA, Hall MJ, Golosinskiy A, Statistics NFcH.
Ambulatory Surgery in the United States, 2006. Nat Health Stat Rept;
2009.
\68\ Goyal KS, Jain S, Buterbaugh GA, et al. The Safety of Hang
and Upper-Extremity Surgical Procedures at a Freestanding Ambulatory
Surgical Center. The Journal of Bone and Joint Surgery. 2016;90:600-
604.
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We believe measuring and reporting seven-day unplanned hospital
visits following orthopedic ASC procedures will incentivize ASCs to
improve care and care transitions. Patients that have hospital visits
that occur at or after discharge from the ASC and may not be readily
visible to clinicians because such patients often present to
alternative facilities, such as emergency departments where patient
information is not linked back to the ASC. Furthermore, many of the
reasons for hospital visits following surgery at an ASC are
preventable; patients often present to the hospital for complications
of medical care, including infection, post-operative bleeding, urinary
retention, nausea and vomiting, and pain. One study found that of
10,032 patients who underwent orthopedic surgery in an ASC between 1993
and 2012, 121 (1.2 percent) needed attention in the emergency
department in the first 24 hours after discharge due to pain or
bleeding, while others were admitted later for issues related to pain
and swelling.\69\ Therefore, we believe tracking and reporting these
events would facilitate efforts to lower the rate of preventable
adverse events and to improve the quality of care following orthopedic
surgeries performed at an ASC.
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\69\ Mart[iacute]n-Ferrero MA, Faour-Mart[iacute]n O. Ambulatory
surgery in orthopedics: experience of over 10,000 patients. Journal
of Orthopaedic Surgery. 2014;19:332-338.
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(2) Overview of Measure
Based on the increasing prevalence of orthopedic surgery in the ASC
setting, we believe it is important to minimize adverse patient
outcomes associated with these orthopedic ASC surgeries. Therefore, we
are proposing to adopt the ASC-17: Hospital Visits after Orthopedic
Ambulatory Surgical Center Procedures measure in the ASCQR Program for
the CY 2022 payment determination and subsequent years. We expect the
measure would promote improvement in patient care over time, because
measurement coupled with transparency in publicly reporting measure
information would make the rate of unplanned hospital visits (emergency
department visits, observation stays, and unplanned inpatient
admissions) following orthopedic surgery at ASCs more visible to both
ASCs and patients and would incentivize ASCs to incorporate quality
improvement activities to reduce these unplanned hospital visits. The
measure also addresses the CMS National Quality Strategy domains of
making care safer by reducing harm caused in the delivery of care and
promoting effective communication and coordination of care.
Section 1890A of the Act requires the Secretary to establish a
prerulemaking process with respect to the selection of certain
categories of quality and efficiency measures. Under section
1890A(a)(2) of the Act, the Secretary must make available to the public
by December 1 of each year a list of quality and efficiency measures
that the Secretary is considering for the Medicare program. The ASC-17
measure we are proposing was included on a publicly available document
entitled ``List of Measures under Consideration for December 1, 2016.''
\70\ The MAP reviewed this measure (MUC16-152) and recommended this
measure be refined and resubmitted prior to adoption, stating that
testing results should demonstrate reliability and validity at the
facility level in the ambulatory surgical setting.\71\ MAP also
recommended that this measure be submitted to NQF for review and
endorsement.\72\ At the time of the MAP's review, this measure was
still undergoing field testing.
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\70\ National Quality Forum. List of Measures under
Consideration for December 1, 2016. National Quality Forum, Dec.
2016. Available at: https://www.qualityforum.org/map/.
\71\ National Quality Forum. 2016-2017 Spreadsheet of Final
Recommendations to HHS and CMS. Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
\72\ National Quality Forum. 2016-2017 Spreadsheet of Final
Recommendations to HHS and CMS. Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
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Since the MAP's review and recommendation of `Refine and Resubmit'
in 2016, we have completed testing for this measure and continued to
refine this proposed measure in response to the MAP's recommendations.
Results of continued development activities, including stakeholder
feedback from the public comment period and pilot test findings will be
presented to the MAP during the MAP feedback loop meeting in fall 2017.
The proposed measure is consistent with the information submitted to
the MAP, and the original MAP submission and our continued refinements
support its scientific acceptability for use in quality reporting
programs. Facility-level testing showed variation in unplanned hospital
visits among ASCs after adjusting for case-mix differences, which
suggests variation in quality of care and opportunities for quality
improvement; and reliability testing showed fair measure score
reliability.\73\ As expected, the reliability increased for ASCs with
more patients; ASCs with at least 250 cases showed moderate
reliability, consistent with other publicly reported Medicare claims-
based, risk-adjusted outcome measures.\74\ The validity testing results
demonstrated that the measure scores are valid and useful measures of
ASC orthopedic surgical quality of care and will provide ASCs with
information that can be used to improve their quality of care. Detailed
testing results are available in the technical report for this measure,
located at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
---------------------------------------------------------------------------
\73\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
\74\ Yale New Haven Health Services Corporation--Center for
Outcomes Research and Evaluation (CORE) Measure Technical Report:
Hospital Visits after Orthopedic Ambulatory Surgical Center
Procedures (Version 1.0). May 2017. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Downloads/Version-10_Hospital-Visits_Orthopedic-ASC-Procedures_Measure-Technical-Report_052017.pdf.
---------------------------------------------------------------------------
Sections 1833(i)(7)(B) and 1833(t)(17)(C)(i) of the Act, when read
together, require the Secretary, except as the Secretary may otherwise
provide, to develop measures appropriate for the measurement of the
quality of care
[[Page 33693]]
furnished by ASCs that reflect consensus among affected parties and, to
the extent feasible and practicable, that include measures set forth by
one or more national consensus building entities. However, we note that
section 1833(i)(7)(B) of the Act does not require that each measure we
adopt for the ASCQR Program be endorsed by a national consensus
building entity, or by the NQF specifically. Further, under section
1833(i)(7)(B) of the Act, section 1833(t)(17)(C)(i) of the Act applies
to the ASCQR Program, except as the Secretary may otherwise provide.
Under this provision, the Secretary has further authority to adopt non-
NQF-endorsed measures. As stated in the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74465 and 74505), we believe that consensus
among affected parties can be reflected through means other than NQF
endorsement, including consensus achieved during the measure
development process, consensus shown through broad acceptance and use
of measures, and consensus through public comment. We believe this
proposed measure meets these statutory requirements.
The proposed ASC-17 measure is not currently NQF-endorsed. However,
we intend to submit this measure for review and endorsement by NQF once
an appropriate NQF project has a call for measures. We believe that
this measure is appropriate for the measurement of quality care
furnished by ASCs, because surgeries are becoming increasingly common
in ASCs and, as discussed above, can signify unanticipated admissions
after care provided in ASCs. Such visits are an unexpected and
potentially preventable outcome for patients with a low anticipated
perioperative risk. We also believe this proposed measure reflects
consensus among affected parties, because it was developed with
stakeholder input from a Technical Expert Panel convened by a CMS
contractor as well as from the measure development public comment
period.\75\ During the MAP and measure development processes, public
commenters supported the measure's focus on assessing patient outcomes
after orthopedic surgery performed in ASC setting of care, and agreed
that the measure would be meaningful and improve quality of care. In
addition, the ASC-17 measure addresses the MAP-identified priority
measure area of surgical complications for the ASCQR Program.\76\
Therefore, we believe it is appropriate to incorporate this measure
into the ASCQR Program measure set because collecting and publicly
reporting these data will improve transparency, inform patients and
providers, and foster quality improvement efforts.
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\75\ National Quality Forum. ``MAP 2017 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: https://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
\76\ National Quality Forum. ``MAP 2017 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: https://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
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(3) Data Sources
This measure is claims-based and uses Part A and Part B Medicare
administrative claims and Medicare enrollment data to calculate the
measure.
We are proposing that the data collection period for the proposed
ASC-17 measure would be the two calendar years ending two years prior
to the applicable payment determination year. For example, for the CY
2022 payment determination, the data collection period would be CY 2019
to 2020. Because the measure data are collected via claims, ASCs will
not need to submit any additional data directly to CMS. We refer
readers to section XIV.D.4. of this proposed rule for a more detailed
discussion of the requirements for data submitted via claims.
(4) Measure Calculation
The measure outcome is all-cause, unplanned hospital visits within
seven days of an orthopedic procedure performed at an ASC. For the
purposes of this measure, ``hospital visits'' include emergency
department visits, observation stays, and unplanned inpatient
admissions. When there are two or more qualifying surgical procedures
within a 7-day period, the measure considers all procedures as index
procedures; however, the timeframe for outcome assessment is defined as
the interval between procedures (including the day of the next
procedure) and then 7 days after the last procedure.
The facility-level score is a risk-standardized hospital visit
rate, calculated by multiplying the ratio of the predicted to the
expected number of post-surgical hospital visits among the given ASC's
patients by the national observed hospital visit rate for all ASCs. For
each ASC, the numerator of the ratio is the number of hospital visits
predicted for the ASC's patients accounting for its observed rate, the
number of the orthopedic surgeries performed at the ASC, the case-mix,
and the surgical complexity mix. The denominator of the ratio is the
expected number of hospital visits given the ASC's case-mix and
surgical complexity mix. A ratio of less than one indicates the ASC
facility's patients were estimated as having fewer post-surgical visits
than expected compared to ASCs with similar surgical complexity and
patients; and a ratio of greater than one indicates the ASC facility's
patients were estimated as having more visits than expected. The
national observed hospital visit rate is the national unadjusted
proportion of patients who had a hospital visit following an orthopedic
ASC surgery. For more information on measure calculations, we refer
readers to: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
(5) Cohort
The patient cohort for the proposed ASC-17 measure includes all
Medicare beneficiaries ages 65 and older undergoing outpatient
orthopedic surgery at an ASC who have 12 prior months of Medicare fee-
for-service Parts A and B enrollment. The target group of procedures
includes those that: (1) Are routinely performed at ASCs; (2) involve
some increased risk of post-surgery hospital visits; and (3) are
routinely performed by orthopedists.
Procedures included in the measure cohort are on Medicare's list of
covered ambulatory surgical center (ASC) procedures.\77\ Medicare
developed this list to identify surgeries that have a low to moderate
risk profile. Surgeries on the ASC list of covered procedures do not
involve or require major or prolonged invasion of body cavities,
extensive blood loss, major blood vessels, or care that is either
emergent or life threatening. Medicare annually reviews and updates
this list, and includes a transparent public comment submission and
review process for addition and/or removal of procedures codes.\78\ The
current list is accessible in the Downloads section at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
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\77\ Centers for Medicare and Medicaid Services. ``Ambulatory
Surgical Center (ASC) Payment: Addenda Updates''. Available at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
\78\ Centers for Medicare and Medicaid Services. ``Ambulatory
Surgical Center (ASC) Payment: Addenda Updates''. Available at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
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In addition, to focus the measure only on the subset of surgeries
on Medicare's list of covered ASC procedures that impose a meaningful
risk of post-
[[Page 33694]]
orthopedic ASC surgery hospital visits, the measure includes only
``major'' and ``minor'' procedures, as indicated by the Medicare
Physician Fee Schedule global surgery indicator (GSI) values of 090 and
010, respectively. This list of GSI values is publicly available at:
https://www.cms.gov/Medicare/Medicare-fee-for-service-payment/physicianfeesched/pfs-federal-regulation-notices-items/cms-1590-fc.html
(download Addendum B). Moreover, to identify the subset of ASC
procedures typically performed by orthopedists, we used the Clinical
Classifications Software (CCS) developed by the Agency for Healthcare
Research and Quality (AHRQ) and include in this measure procedures from
AHRQ's ``operations on the musculoskeletal system'' group of
procedures.\79\ For more cohort details, we refer readers to the
measure technical report located at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\79\ Healthcare Cost and Utilization Project. Clinical
Classifications Software for Services and Procedures. Available at:
https://www.hcup-us.ahrq.gov/toolssoftware/ccs_svcsproc/ccssvcproc.jsp.
---------------------------------------------------------------------------
The measure excludes patients who survived at least 7 days
following orthopedic surgery at an ASC, but were not continuously
enrolled in Medicare fee-for-service Parts A and B in the 7 days after
surgery. These patients are excluded to ensure all patients captured
under this measure have full data available for outcome assessment.
There are no additional inclusion or exclusion criteria for the
proposed ASC-17 measure. Additional methodology and measure development
details are available at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
(6) Risk Adjustment
The statistical risk-adjustment model includes 29 clinically
relevant risk-adjustment variables that are strongly associated with
risk of hospital visits within seven days following ASC orthopedic
surgery. The measure risk adjusts for age, 27 comorbidities, and a
variable for work Relative Value Units (RVUs) to adjust for surgical
complexity.\80\ Additional risk adjustment details are available in the
technical report at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\80\ S. Coberly. The Basics; Relative Value Units (RVUs).
National Health Policy Forum. January 12, 2015. Available at: https://www.nhpf.org/library/the-basics/Basics_RVUs_01-12-15.pdf.
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(7) Public Reporting
As stated above, facility-level testing showed variation in
unplanned hospital visits among ASCs after adjusting for case-mix
differences, which suggests variation in quality of care and
opportunities for quality improvement.\81\ Reliability testing showed
fair measure score reliability.\82\ As expected, the reliability
increased for ASCs with more patients; ASCs with at least 250 cases
showed moderate reliability, consistent with other publicly reported
Medicare claims-based, risk-adjusted outcome measures. If this measure
is adopted, we are proposing to publicly report results only for
facilities with sufficient case numbers to meet moderate reliability
standards.\83\ CMS will determine the case size cutoff for meeting
moderate reliability standards using the interclass correlation (ICC)
during the measure dry run (discussed below) by testing the reliability
of the scores at different case sizes in the dry run data. However, we
would also provide confidential performance data directly to smaller
facilities, which do not meet the criteria for sufficient case numbers
for reliability considerations, that would benefit from seeing their
measure results and individual patient-level outcomes. These data are
currently largely unknown to ASCs and providers. The validity testing
results demonstrated that the measure scores are valid and useful
measures of ASC orthopedic surgical quality of care and will provide
ASCs with information that can be used to improve their quality of
care. Detailed testing results are available in the technical report
for this measure, located at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
---------------------------------------------------------------------------
\81\ Yale New Haven Health Services Corporation. Hospital Visits
after Orthopedic Ambulatory Surgical Center Procedures (Version
1.0). May 2017. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Downloads/Version-10_Hospital-Visits_Orthopedic-ASC-Procedures_Measure-Technical-Report_052017.pdf.
\82\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
\83\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
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(8) Provision of Facility-Specific Information Prior to Public
Reporting
If this proposed measure is finalized as proposed, we intend to
conduct a dry run before the official data collection period or any
public reporting. A dry run is a period of confidential reporting and
feedback during which ASCs may review their dry-run measure results,
and in addition, further familiarize themselves with the measure
methodology and ask questions. For the dry-run, we intend to use the
most current 2-year set of complete claims (usually 12 months prior to
the start date) available at the time of dry run. For example, if the
dry run began in June 2018, the most current 2-year set of data
available would likely be July 2015 to June 2017. Because we use paid,
final action Medicare claims, ASCs would not need to submit any
additional data for the dry run. The dry run would generate
confidential feedback reports for ASCs, including patient-level data
indicating whether the patient had a hospital visit and, if so, the
type of visit (emergency department visit, observation stay, or
unplanned inpatient admission), the admitting facility, and the
principal discharge diagnosis. Further, the dry run would enable ASCs
to see their risk-standardized hospital visit rate prior to the measure
being implemented. General information about the dry run as well as
confidential facility-specific reports would be made available for ASCs
to review on their accounts at: https://www.qualitynet.org. We plan to
continue to generate these reports for ASCs after we implement the
measure so ASCs can use the information to identify performance gaps
and develop quality improvement strategies.
These confidential dry run results are not publicly reported and do
not affect payment. We expect the dry run to take approximately one
month to conduct, during which facilities would be provided the
confidential report and the opportunity to review their performance and
provide feedback to us. However, after the dry run, measure results
would have a payment impact and be publicly reported beginning with the
CY 2022 payment determination and for subsequent years as proposed.
We are inviting public comment on our proposal to adopt the ASC-17:
Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures
measure beginning with the CY 2022 payment determination as discussed
above.
[[Page 33695]]
c. Proposed Adoption of ASC-18: Hospital Visits After Urology
Ambulatory Surgical Center Procedures Beginning With the CY 2022
Payment Determination
(1) Background
As the number of urology procedures performed in ASCs increases, it
is of increasing importance to report the quality of care provided to
patients undergoing these procedures. One study found that urology
procedures accounted for 4.8 percent of unanticipated admissions, and
that urology surgery patients were almost twice as likely as
orthopedics, plastic surgery, or neurosurgery to be admitted following
surgery.\84\ Similarly, a recent study found outpatient urology surgery
has an overall 3.7 percent readmission rate.\85\ A third study using a
5-percent national sample of Medicare beneficiaries ages 65 and older
who underwent one of 22 common outpatient urologic procedures at ASCs
from 1998 to 2006 found a 7.9 percent 30-day risk-adjusted rate of
inpatient admission following surgery, with more frequent same-day
admissions following outpatient surgery at ASCs than at hospitals.\86\
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\84\ Fortier J. Unanticipated Admission after Ambulatory
Surgery--A Prospective Study. Can J Anaesth. 1998;45(7):612-619.
\85\ Rambachan A. Predictors of Readmission Following Outpatient
Urological Surgery, Annals of the Royal College of Surgeons of
England. Journal of Urology. 2014;192(1):183-188.
\86\ Hollingsworth JM. Surgical Quality Among Medicare
Beneficiaries Undergoing Outpatient Urological Surgery. The Journal
of Urology. 2012;188(4):1274-1278.
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Because urology surgery performed at an ASC is a significant
predictive factor for unanticipated admissions compared to other
procedures,\87\ we believe measuring and reporting 7-day unplanned
hospital visits following urology procedures will incentivize ASCs to
improve care and care transitions. Many of the reasons for hospital
visits following surgery at an ASC are preventable; patients often
present to the hospital following urology surgery for complications of
medical care, including urinary tract infection, calculus of the
ureter, urinary retention, hematuria, and septicemia.\88\ However,
increased patient and staff education present opportunities to improve
the success rate of urology surgeries in ASCs.\89\ Therefore, we
believe tracking and reporting these events would facilitate efforts to
lower the rate of preventable adverse events and to improve the quality
of care following urology procedures performed at an ASC.
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\87\ Fortier J. Unanticipated Admission after Ambulatory
Surgery--A Prospective Study. Can J Anaesth. 1998;45(7):612-619.
\88\ Paez, A. Adverse Events and Readmissions after Day-Care
Urological Surgery. International Braz J Urol. 2007;33(3):330-338.
\89\ Paez, A. Adverse Events and Readmissions after Day-Care
Urological Surgery. International Braz J Urol. 2007;33(3):330-338.
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(2) Overview of Measure
We believe it is important to minimize adverse patient outcomes
associated with urology ASC surgeries. Therefore, we are proposing to
adopt the ASC-18: Hospital Visits after Urology Ambulatory Surgical
Center Procedures measure in the ASCQR Program for the CY 2022 payment
determination and subsequent years. We expect the measure would promote
improvement in patient care over time, because measurement coupled with
transparency in publicly reporting measure information would make the
rate of unplanned hospital visits (emergency department visits,
observation stays, and unplanned inpatient admissions) following
urology procedures at ASCs more visible to both ASCs and patients, and
would incentivize ASCs to incorporate quality improvement activities to
reduce these unplanned hospital visits. The measure also addresses the
CMS National Quality Strategy domains of making care safer by reducing
harm caused in the delivery of care and promoting effective
communication and coordination of care.
Section 1890A of the Act requires the Secretary to establish a
prerulemaking process with respect to the selection of certain
categories of quality and efficiency measures. Under section
1890A(a)(2) of the Act, the Secretary must make available to the public
by December 1 of each year a list of quality and efficiency measures
that the Secretary is considering for the Medicare program. The ASC-18
measure we are proposing was included on a publicly available document
entitled ``List of Measures under Consideration for December 1, 2016.''
\90\ The MAP reviewed this measure (MUC16-153) and recommended that
this measure be refined and resubmitted prior to adoption by the ASCQR
Program because, at the time of the MAP's review, this measure was
still undergoing field testing. The Workgroup stated testing results
should demonstrate reliability and validity at the facility level in
the ambulatory surgical setting, and recommended this measure be
submitted to NQF for review and endorsement.\91\
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\90\ National Quality Forum. List of Measures under
Consideration for December 1, 2016. National Quality Forum, Dec.
2016. Available at: https://www.qualityforum.org/map/.
\91\ National Quality Forum. 2016-2017 Spreadsheet of Final
Recommendations to HHS and CMS, available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593 ItemID=81593.
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Since the MAP's review and recommendation of `Refine and Resubmit'
in 2016, we have completed testing for this measure and continued to
refine this proposed measure in response to the MAP's recommendations.
Results of continued development activities, including stakeholder
feedback from the public comment period and pilot test findings will be
presented to the MAP during the MAP feedback loop meeting in fall 2017.
The proposed measure is consistent with the information submitted to
the MAP, and the original MAP submission and our continued refinements
support its scientific acceptability for use in quality reporting
programs. Facility-level testing showed significant variation in
unplanned hospital visits among ASCs after adjusting for case-mix
differences, which suggests variation in quality of care. Our testing
found moderate measure score reliability \92\ for this measure, which
is consistent with existing measures of patient outcomes in the ASC
setting, such as ASC-12: Facility Seven-Day Risk-Standardized Hospital
Visit Rate after Outpatient Colonoscopy (described in the CY 2015 OPPS/
ASC final rule with comment period at 79 FR 66973). Validity testing
demonstrated that the measure scores identify differences in quality
across facilities. Detailed testing results are available in the
technical report for this measure, located at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\92\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
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Sections 1833(i)(7)(B) and 1833(t)(17)(C)(i) of the Act, when read
together, require the Secretary, except as the Secretary may otherwise
provide, to develop measures appropriate for the measurement of the
quality of care furnished by ASCs that reflect consensus among affected
parties and, to the extent feasible and practicable, that include
measures set forth by one or more national consensus building entities.
However, we note that section 1833(i)(7)(B) of the Act does not require
that each measure we adopt for the ASCQR Program be endorsed by a
[[Page 33696]]
national consensus building entity, or by the NQF specifically.
Further, under section 1833(i)(7)(B) of the Act, section
1833(t)(17)(C)(i) of the Act applies to the ASCQR Program, except as
the Secretary may otherwise provide. Under this provision, the
Secretary has further authority to adopt non-endorsed measures. As
stated in the CY 2012 OPPS/ASC final rule with comment period (76 FR
74465 and 74505), we believe that consensus among affected parties can
be reflected through means other than NQF endorsement, including
consensus achieved during the measure development process, consensus
shown through broad acceptance and use of measures, and consensus
through public comment. We believe this proposed measure meets these
statutory requirements.
The proposed ASC-18 measure is not currently NQF-endorsed. However,
we intend to submit this measure for review and endorsement by the NQF
once an appropriate measure endorsement project has a call for
measures. We believe that this measure is appropriate for the
measurement of quality care furnished by ASCs because urology
procedures are becoming increasingly common in ASCs and, as discussed
above, can signify unanticipated admissions after care provided in
ASCs. Such visits are an unexpected and potentially preventable outcome
for patients with a low anticipated perioperative risk. We also believe
this measure depicts consensus among affected parties, as it was
developed with stakeholder input from both a Technical Expert Panel
convened by a contractor as well as the measure development public
comment period.\93\ During the MAP and measure development processes,
public commenters supported the measure's focus on assessing patient
outcomes after urology ASC and agreed that the measure would be
meaningful and improve quality of care. In addition, the ASC-18 measure
addresses the MAP-identified priority measure area of surgical
complications for the ASCQR Program.\94\ Therefore, we believe it is
appropriate to incorporate this measure into the ASCQR Program measure
set because collecting and publicly reporting this data will improve
transparency, inform patients and providers, and foster quality
improvement efforts.
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\93\ Yale New Haven Health Services Corporation--Center for
Outcomes Research and Evaluation (CORE). Public Comment Summary
Report: Development of Facility-Level Quality Measures of Unplanned
Hospital Visits after Selected Ambulatory Surgical Center
Procedures. Fall 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/CallforPublicComment.html.
\94\ National Quality Forum. ``MAP 2017 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: https://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
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(3) Data Sources
This measure is claims-based and uses Part A and Part B Medicare
administrative claims and Medicare enrollment data to calculate the
measure.
We are proposing that the data collection period for the proposed
ASC-18 measure would be the 2 calendar years ending 2 years prior to
the applicable payment determination year. For example, for the CY 2022
payment determination, the data collection period would be CY 2019 to
2020. Because these measure data are collected via claims, ASCs will
not need to submit any additional data directly to CMS. We refer
readers to section XIV.D.4. of this proposed rule for a more detailed
discussion of the requirements for data submitted via claims.
(4) Measure Calculations
The measure outcome is all-cause, unplanned hospital visit
occurring within seven days of the urology procedure performed at an
ASC. For the purpose of this measure, ``hospital visits'' include
emergency department visits, observation stays, and unplanned inpatient
admissions. When there are two or more qualifying surgical procedures
within a 7-day period, the measure considers all procedures as index
procedures. However, the timeframe for outcome assessment is defined as
the interval between procedures (including the day of the next
procedure) and then 7 days after the last procedure.
The facility-level score is a risk-standardized hospital visit
rate, calculated by multiplying the ratio of the predicted to the
expected number of postsurgical hospital visits among the given ASC's
patients by the national observed hospital visit rate for all ASCs. For
each ASC, the numerator of the ratio is the number of hospital visits
predicted for the ASC's patients accounting for its observed rate, the
number of the urology procedures performed at the ASCs, the case-mix,
and the surgical complexity mix. The denominator of the ratio is the
expected number of hospital visits given the ASC's case-mix and
surgical complexity mix. A ratio of less than one indicates the ASC
facility's patients were estimated as having fewer post-surgical visits
than expected compared to ASCs with similar surgical complexity and
patients; and a ratio of greater than one indicates the ASC facility's
patients were estimated as having more visits than expected. The
national observed hospital visit rate is the national unadjusted
proportion of patients who had a hospital visit following a urology ASC
surgery. For more information on measure calculations, we refer readers
to: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
(5) Cohort
The patient cohort for the proposed ASC-18 measure includes all
Medicare beneficiaries ages 65 and older undergoing outpatient urology
procedures at an ASC who have 12 prior months of Medicare fee-for-
service Parts A and B enrollment. The target group of procedures are
those that: (1) Are routinely performed at ASCs; (2) involve increased
risk of post-surgery hospital visits; and (3) are routinely performed
by urologists.
Procedures included in the measure cohort are on Medicare's list of
covered ambulatory surgical center (ASC) procedures.\95\ Medicare
developed this list to identify surgeries have a low to moderate risk
profile. Surgeries on the ASC list of covered procedures do not involve
or require major or prolonged invasion of body cavities, extensive
blood loss, major blood vessels, or care that is either emergent or
life threatening.\96\ Medicare annually reviews and updates this list,
and includes a transparent public comment submission and review process
for addition and/or removal of procedures codes.\97\ The current list
is accessible in the Downloads section at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html. In addition, to focus the measure only on the
subset of surgeries on Medicare's list of covered ASC procedures that
impose a meaningful risk of post-urology ASC surgery hospital visits,
the measure includes only ``major'' and ``minor'' procedures, as
indicated by the MPFS
[[Page 33697]]
global surgery indicator (GSI) values of 090 and 010, respectively, and
therapeutic cystoscopy procedures. This list of GSI values is publicly
available at: https://www.cms.gov/Medicare/Medicare-fee-for-service-payment/physicianfeesched/pfs-federal-regulation-notices-items/cms-1590-fc.html (download Addendum B). Moreover, to identify the subset of
ASC procedures typically performed by urologists, we used the Clinical
Classifications Software (CCS) developed by the Agency for Healthcare
Research and Quality (AHRQ) and include in this measure procedures from
two of AHRQ's categories, ``operations on the urinary system'' and
``operations on the male genital organs.'' \98\ For more cohort
details, we refer readers to the measure technical report located at:
https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\95\ Centers for Medicare and Medicaid Services. ``Ambulatory
Surgical Center (ASC) Payment: Addenda Updates''. Available at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
\96\ Centers for Medicare and Medicaid Services. ``Ambulatory
Surgical Center (ASC) Payment: Addenda Updates''. Available at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
\97\ Centers for Medicare and Medicaid Services. ``Ambulatory
Surgical Center (ASC) Payment: Addenda Updates''. Available at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
\98\ Healthcare Cost and Utilization Project. Clinical
Classifications Software for Services and Procedures. Available at:
https://www.hcup-us.ahrq.gov/toolssoftware/ccs_svcsproc/ccssvcproc.jsp.
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The measure excludes patients who survived at least 7 days
following a urology procedure at an ASC, but were not continuously
enrolled in Medicare fee-for-service Parts A and B in the 7 days after
surgery. These patients are excluded to ensure all patients captured
under this measure have full data available for outcome assessment.
There are no additional inclusion or exclusion criteria for the
proposed ASC-18 measure. Additional methodology and measure development
details are available at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
(6) Risk Adjustment
The statistical risk-adjustment model includes nine clinically
relevant risk-adjustment variables that are strongly associated with
risk of hospital visits within seven days following ASC urology
surgery. The measure risk adjusts for age, six comorbidities, number of
qualifying procedures, and work Relative Value Units (RVUs) to adjust
for surgical complexity.\99\ Additional risk adjustment details are
available in the technical report at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\99\ S. Coberly. The Basics; Relative Value Units (RVUs).
National Health Policy Forum. January 12, 2015. Available at: https://www.nhpf.org/library/the-basics/Basics_RVUs_01-12-15.pdf.
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(7) Public Reporting
As stated above, facility-level testing showed variation in
unplanned hospital visits among ASCs after adjusting for case-mix
differences, which suggests variation in quality of care and
opportunities for quality improvement.\100\ Reliability testing showed
fair measure score reliability.\101\ As expected, the reliability
increased for ASCs with more patients; ASCs with at least 250 cases
showed moderate reliability, consistent with other publicly reported
Medicare claims-based, risk-adjusted outcome measures. If this measure
is adopted, we are proposing to publicly report results only for
facilities with sufficient case numbers to meet moderate reliability
standards.\102\ CMS will determine the case size cutoff for meeting
moderate reliability standards using the interclass correlation (ICC)
during the measure dry run (discussed below) by testing the reliability
of the scores at different case sizes in the dry run data. However, we
would also provide confidential performance data directly to smaller
facilities which do not meet the criteria for sufficient case numbers
for reliability considerations that would benefit from seeing their
measure results and individual patient-level outcomes, as these data
are currently largely unknown to ASCs and providers. The validity
testing results demonstrated that the measure scores are valid and
useful measures of ASC urology surgical quality of care and will
provide ASCs with information that can be used to improve their quality
of care. Detailed testing results are available in the technical report
for this measure, located at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\100\ Yale New Haven Health Services Corporation. Hospital
Visits after Orthopedic Ambulatory Surgical Center Procedures
(Version 1.0). May 2017. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Downloads/Version-10_Hospital-Visits_Orthopedic-ASC-Procedures_Measure-Technical-Report_052017.pdf.
\101\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
\102\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
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(8) Provision of Facility-Specific Information Prior to Public
Reporting
If this proposed measure is finalized, but before the official data
collection period or public reporting for the proposed ASC-18 measure,
we intend to conduct a dry run. A dry run is a period of confidential
feedback during which ASCs may review their dry-run measure results,
and in addition, further familiarize themselves with the measure
methodology, and ask questions. For the dry-run, we intend to use the
most current 2-year set of complete claims (usually 12 months prior to
the start date) available at the time of dry run. For example, if the
dry run began in June 2018, the most current 2-year set of data
available would likely be July 2015 to June 2017. Because we use paid,
final action Medicare claims, ASCs would not need to submit any
additional data for the dry run. The dry run would generate
confidential feedback reports for ASCs, including patient-level data
indicating whether the patient had a hospital visit and, if so, the
type of visit (emergency department visit, observation stay, or
unplanned inpatient admission), the admitting facility, and the
principal discharge diagnosis. Further, the dry run would enable ASCs
to see their risk-standardized hospital visit rate prior to the measure
being implemented. General information about the dry run as well as
confidential facility-specific reports would be made available for ASCs
to review on their accounts at: https://www.qualitynet.org. We intend to
continue to generate these reports for ASCs after we implement the
measure so ASCs can use the information to identify performance gaps
and develop quality improvement strategies.
Confidential dry run results are not publicly reported and do not
affect payment. We expect the dry run to take approximately 1 month to
conduct, during which facilities would be provided the confidential
report and the opportunity to review their performance and provide
feedback to us. However, the measure would affect payment and would be
publicly reported beginning with the CY 2022 payment determination and
subsequent years as proposed.
We are inviting public comment on our proposal to adopt the ASC-18:
Hospital Visits after Urology Ambulatory Surgical Center Procedures
measure beginning with the CY 2022 payment determination as discussed
above.
d. Summary of Previously Adopted Measures and Newly Proposed ASCQR
Program Measures for the CY 2022 Payment Determination and Subsequent
Years
If the proposals in sections XIV.B.3.b., XIV.B.4. and XIV.B.6.a.
through c. of
[[Page 33698]]
this proposed rule are finalized, the measure set for the ASCQR Program
CY 2022 payment determination and subsequent years would be as listed
below.
ASCQR Program Measure Set With Previously Finalized and Newly Proposed
Measures for the CY 2022 Payment Determination and Subsequent Years
------------------------------------------------------------------------
ASC No. NQF No. Measure name
------------------------------------------------------------------------
ASC-1................. 0263................. Patient Burn.
ASC-2................. 0266................. Patient Fall.
ASC-3................. 0267................. Wrong Site, Wrong Side,
Wrong Patient, Wrong
Procedure, Wrong
Implant.
ASC-4................. 0265 [dagger]........ All-Cause Hospital
Transfer/Admission.
ASC-8................. 0431................. Influenza Vaccination
Coverage among
Healthcare Personnel.
ASC-9................. 0658................. Endoscopy/Polyp
Surveillance:
Appropriate Follow-Up
Interval for Normal
Colonoscopy in Average
Risk Patients.
ASC-10................ 0659................. Endoscopy/Polyp
Surveillance:
Colonoscopy Interval for
Patients with a History
of Adenomatous Polyps-
Avoidance of
Inappropriate Use.
ASC-11................ 1536................. Cataracts: Improvement in
Patient's Visual
Function within 90 Days
Following Cataract
Surgery.*
ASC-12................ 2539................. Facility 7-Day Risk-
Standardized Hospital
Visit Rate after
Outpatient Colonoscopy.
ASC-13................ None................. Normothermia Outcome.
ASC-14................ None................. Unplanned Anterior
Vitrectomy.
ASC-15a............... None................. OAS CAHPS--About
Facilities and Staff.**
ASC-15b............... None................. OAS CAHPS--Communication
About Procedure.**
ASC-15c............... None................. OAS CAHPS--Preparation
for Discharge and
Recovery.**
ASC-15d............... None................. OAS CAHPS--Overall Rating
of Facility.**
ASC-15e............... None................. OAS CAHPS--Recommendation
of Facility.**
ASC-16................ None................. Toxic Anterior Segment
Syndrome.***
ASC-17................ None................. Hospital Visits after
Orthopedic Ambulatory
Surgical Center
Procedures.***
ASC-18................ None................. Hospital Visits after
Urology Ambulatory
Surgical Center
Procedures.****
------------------------------------------------------------------------
[dagger] We note that NQF endorsement for this measure was removed.
* Measure voluntarily collected effective beginning with the CY 2017
payment determination as set forth in section XIV.E.3.c. of the CY
2015 OPPS/ASC final rule with comment period (79 FR 66984 through
66985).
** Measure proposed for delay beginning with CY 2018 reporting until
further action in future rulemaking as discussed in section XIV.B.4.
of this proposed rule.
*** New measure proposed for the CY 2021 payment determination and
subsequent years.
**** New measure proposed for the CY 2022 payment determination and
subsequent years.
7. ASCQR Program Measures and Topics for Future Consideration
In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68493
through 68494), we set forth our considerations in the selection of
ASCQR Program quality measures. We seek to develop a comprehensive set
of quality measures to be available for widespread use for making
informed decisions and quality improvement in the ASC setting (77 FR
68496). We also seek to align these quality measures with the National
Quality Strategy (NQS), the CMS Strategic Plan (which includes the CMS
Quality Strategy), and our other quality reporting and value-based
purchasing (VBP) programs, as appropriate. Accordingly, as we stated in
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66979), in
considering future ASCQR Program measures, we are focusing on the
following NQS and CMS Quality Strategy measure domains: Make care safer
by reducing harm caused in the delivery of care; strengthen person and
family engagement as partners in their care; promote effective
communication and coordination of care; promote effective prevention
and treatment of chronic disease; work with communities to promote best
practices of healthy living; and make care affordable.
In this proposed rule, we are inviting public comment on one
measure developed by the CDC for potential inclusion in the ASCQR
Program in future rulemaking, the Ambulatory Breast Procedure Surgical
Site Infection Outcome measure (NQF #3025), and are seeking public
comment on accounting for social risk factors in the ASCQR Program.
This potential measure is discussed in more detail below.
Healthcare-associated infections (HAIs) are a major cause of
morbidity and mortality in healthcare settings in the United States,
with the most recent prevalence surveys of HAIs estimating that
approximately four percent of inpatients in acute care settings have
developed at least one HAI, translating to 721,800 infections in
648,000 patients in 2011.\103\ Surgical site infection (SSI) is one of
the most common HAIs, comprising approximately 22 percent of all HAIs,
and contribute greatly to the mortality and cost burden of HAIs.\104\
Breast SSIs represent a substantial proportion of SSIs overall in
inpatient settings, and have one of the highest infection risks of any
procedure type in outpatient settings.\105\ While SSI rates following
breast procedures vary from one percent to over 30 percent depending on
procedure type,\106\ the trend in surgery transitioning to outpatient
and ambulatory surgery
[[Page 33699]]
settings due to advances in surgical techniques and economic incentives
for ambulatory surgery make these events an outcome of interest for the
ASCQR Program.
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\103\ Magill S.S., Edwards J.R., Bamberg W., Beldavs Z.G.,
Dumyati G., Kainer M.A. Multistate Point-Prevalence Survey of Health
Care-Associated Infections. N Engl J Med. 2014;370:1198-1208.
\104\ Magill S.S., Edwards J.R., Bamberg W., Beldavs Z.G.,
Dumyati G., Kainer M.A. Multistate Point-Prevalence Survey of Health
Care-Associated Infections. N Engl J Med. 2014;370:1198-1208.
\105\ This statement is based on an analysis of data reported to
the National Healthcare Safety Network (NHSN). Out of 67,150 ASC
procedures report to NHSN from 2010 to 2013, 30,787 (45.9 percent)
were breast procedures. Out of the 142 surgical site infections
reported from ASCs during the same time period, 78 (54.9 percent)
were related to breast procedures, indicating an SSI risk of 0.25
percent. This was the highest volume and SSI risk out of all
outpatient ASC procedures reported in the timeframe.
\106\ Vilar-Compte D. Jacquemin B., Robles-Vidal C., and Volkow
P. Surgical Site Infections in Breast Surgery: Case-Control Study.
World Journal of Surgery. 2004;28(3):242-246; Mannien J., Wille
J.C., Snoeren R.L. van den Hof S. Impact of Postdischarge
Surveillance on Surgical Site Infection Rates for Several Surgical
Procedures: Results from the Nosocomial Surveillance Network in the
Netherlands. Infect Control Hosp Epidemiol. 2006;27:809-816; Vilar-
Compte D., Rosales S., Hernandez-Mello N., Maafs E. and Volkow P.
Surveillance, Control, and Prevention of Surgical Site Infections in
Breast Cancer Surgery: a 5-year Experience. American Journal of
Infection Control. 2009;37(8):674-679.
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Numerous individual studies and systematic reviews provide strong
evidence that measurement and feedback of surgical site infections
leads to lower SSI rates in the long term.\107\ Although standardized
metrics have been developed to measure SSI rates for inpatient
surgeries in the hospital setting,\108\ these have not yet been
developed for outpatient surgeries in ASCs, which comprise a fast-
growing proportion of all surgeries performed in the United States.
\109\ We believe this measure, if adopted in the future, could serve as
a quantitative guide for ASCs, enabling them to benchmark SSI rates in
their facilities against nationally aggregated data and set targets for
improvement.
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\107\ Anderson D.J., Podgorny K., Berr[iacute]os-Torres S. et
al. Strategies to Prevent Surgical Site Infections in Acute Care
Hospitals: 2014 Update. Infection Control & Hospital Epidemiology.
2014;35:605-627; Mangram A.J, Horan T.C., Pearson M.L., Silver L.C.,
Jarvis W.R. Guideline for Prevention of Surgical Site Infection.
Hospital Infection Control Practices Advisory Committee. Infect
Control Hosp Epidemiol. 1999;?20:250-278; Gaynes R., Richards C.,
Edwards J.R., et al Feeding Back Surveillance Data to Prevent
Hospital-Acquired Infections. Emerg Infect Dis. 2001;7:295-298.
\108\ Mu Y., et al. Improving Risk-Adjusted Measures of Surgical
Site Infection for the National Healthcare Safety Network. Infect
Control Hosp Epidemiol. 2011;32(10):970-986.
\109\ Mu Y., et al. Improving Risk-Adjusted Measures of Surgical
Site Infection for the National Healthcare Safety Network. Infect
Control Hosp Epidemiol. 2011;32(10):970-986.
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This issue is of interest to the ASCQR Program because breast
procedures are becoming increasingly common at ASCs.\110\ In addition,
the Ambulatory Breast Procedure Surgical Site Infection Outcome measure
addresses the MAP-identified measure gap area of surgical quality
measures, including surgical site infection measures, for the ASCQR
Program.\111\
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\110\ Cullen KA, Hall MJ, Golosinskiy A, Statistics NFcH.
Ambulatory Surgery in the United States, 2006. Nat Health Stat Rept;
2009.
\111\ National Quality Forum. ``MAP 2017 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: https://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
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The Ambulatory Breast Procedure Surgical Site Infection Outcome
measure was included on the 2016 MUC list \112\ and reviewed by the
MAP. The MAP conditionally supported the measure (MUC16-155), noting
the rapid shift of care to the ambulatory surgery setting and the need
to ensure transparency about the safety of ambulatory surgery
centers.\113\ The MAP further noted that this measure should be
submitted for NQF review and endorsement.\114\ A summary of the MAP
recommendations can be found at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593. We note that this measure
received NQF endorsement in January 2017, and therefore satisfies the
MAP's condition for support.\115\
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\112\ https://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx, under ``2016
Measures Under Consideration List (PDF).''
\113\ National Quality Forum. 2016-2017 Spreadsheet of Final
Recommendations to HHS and CMS, available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
\114\ National Quality Forum. 2016-2017 Spreadsheet of Final
Recommendations to HHS and CMS, available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
\115\ National Quality Forum. Endorsed measure specification
available at: https://www.qualityforum.org/QPS/3025.
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The Ambulatory Breast Procedure Surgical Site Infection (SSI)
Outcome measure is used to assess the risk-adjusted Standardized
Infection Ratio (SIR) for all SSIs following breast procedures
conducted at ASCs among adult patients and reported to the CDC's
National Healthcare Safety Network. The measure compares the reported
number of SSIs observed at an ASC with a predicted value based on
nationally aggregated data. The numerator for this measure is all SSIs
during the 30-day and 90-day postoperative periods following breast
procedures in ASCs. The term SSI as used in this measure is defined in
accordance with the CDC NHSN's surveillance protocol as an infection,
following a breast procedure, of either the skin, subcutaneous tissue
and breast parenchyma at the incision site (superficial incisional
SSI), deep soft tissues of the incision site (deep incisional SSI), or
any part of the body deeper than the fascial/muscle layers that is
opened or manipulated during the operative procedure (organ/space
SSI).\116\ The denominator for this measure is all adult patients
(defined as patients ages 18 to 108 years) undergoing breast
procedures, as specified by the operative codes that comprise the
breast procedure category of the NHSN Patient Safety Component
Protocol, at an ASC. This measure cohort excludes hospital inpatient
and outpatient departments, pediatric patients (patients younger than
18 years) and very elderly patients (older than 108 years), and brain-
dead patients whose organs are being removed for donor purposes. The
specifications for this measure for the ASC setting can be found at:
https://www.qualityforum.org/QPS/ after searching ``Ambulatory Breast
Procedure Surgical Site Infection Outcome Measure.''
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\116\ Centers for Disease Control and Prevention. ``Surgical
Site Infection (SSI) Event. Available at: https://www.cdc.gov/nhsn/pdfs/pscmanual/9pscssicurrent.pdf.
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We are inviting public comment on the possible inclusion of this
measure in the ASCQR Program measure set in the future.
8. Maintenance of Technical Specifications for Quality Measures
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74513 through 74514), where we finalized our proposal to
follow the same process for updating the ASCQR Program measures that we
adopted for the Hospital OQR Program measures, including the
subregulatory process for making updates to the adopted measures. In
the CY 2013 OPPS/ASC final rule with comment period (77 FR 68496
through 68497), the CY 2014 OPPS/ASC final rule with comment period (78
FR 75131), and the CY 2015 OPPS/ASC final rule with comment period (79
FR 66981), we provided additional clarification regarding the ASCQR
Program policy in the context of the previously finalized Hospital OQR
Program policy, including the processes for addressing nonsubstantive
and substantive changes to adopted measures. In the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70531), we provided clarification
regarding our decision to not display the technical specifications for
the ASCQR Program on the CMS Web site, but stated that we will continue
to display the technical specifications for the ASCQR Program on the
QualityNet Web site. In addition, our policies regarding the
maintenance of technical specifications for the ASCQR Program are
codified at 42 CFR 416.325. We are not proposing any changes to our
policies regarding the maintenance of technical specifications for the
ASCQR Program.
9. Public Reporting of ASCQR Program Data
In the CY 2012 OPPS/ASC final rule with comment period (76 FR 74514
through 74515), we finalized a policy to make data that an ASC
submitted for the ASCQR Program publicly available on a CMS Web site
after providing an ASC an opportunity to review the data to be made
public. In the CY 2016 OPPS/ASC final rule with comment period (80 FR
70531 through 70533), we finalized our policy to publicly display data
by the National Provider Identifier (NPI) when the data are submitted
by the NPI and to publicly display data by the CCN
[[Page 33700]]
when the data are submitted by the CCN. In addition, we codified our
policies regarding the public reporting of ASCQR Program data at 42 CFR
416.315 (80 FR 70533). In the CY 2017 OPPS/ASC final rule with comment
period, we formalized our current public display practices regarding
timing of public display and the preview period by finalizing our
proposals to publicly display data on the Hospital Compare Web site, or
other CMS Web site as soon as practicable after measure data have been
submitted to CMS; to generally provide ASCs with approximately 30 days
to review their data before publicly reporting the data; and to
announce the timeframes for each preview period starting with the CY
2018 payment determination on a CMS Web site and/or on our applicable
listservs (81 FR 79819 through 79820). We are not proposing any changes
to these policies. However, we note that in section XIV.B.6.b. and c.
of this proposed rule we are proposing two new measures: ASC-17:
Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures,
and ASC-18: Hospital Visits after Urology Ambulatory Surgical Center
Procedures, beginning with the CY 2022 payment determination, and
specific public reporting policies associated with these proposed
measures.
C. Administrative Requirements
1. Requirements Regarding QualityNet Account and Security Administrator
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75132 through 75133) for a detailed discussion of the
QualityNet security administrator requirements, including setting up a
QualityNet account, and the associated timelines, for the CY 2014
payment determination and subsequent years. In the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70533), we codified the
administrative requirements regarding maintenance of a QualityNet
account and security administrator for the ASCQR Program at 42 CFR
416.310(c)(1)(i). In section XIV.D.3. of this proposed rule, we are
proposing to expand submission via the CMS online tool to also allow
for batch data submission and make corresponding changes to the 42 CFR
416.310(c)(1)(i).
2. Requirements Regarding Participation Status
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75133 through 75135) for a complete discussion of the
participation status requirements for the CY 2014 payment determination
and subsequent years. In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70533 and 70534), we codified these requirements
regarding participation status for the ASCQR Program at 42 CFR 416.305.
We are not proposing any changes to these policies.
D. Form, Manner, and Timing of Data Submitted for the ASCQR Program
1. Requirements Regarding Data Processing and Collection Periods for
Claims-Based Measures Using Quality Data Codes (QDCs)
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75135) for a complete summary of the data processing and
collection periods for the claims-based measures using QDCs for the CY
2014 payment determination and subsequent years. In the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70534), we codified the
requirements regarding data processing and collection periods for
claims-based measures using QDCs for the ASCQR Program at 42 CFR
416.310(a)(1) and (2). We are not proposing any changes to these
requirements.
We note that, in section XIV.B.3.b.(1) of this proposed rule, we
are proposing to remove one claims-based measure using QDCs, ASC-5:
Prophylactic Intravenous (IV) Antibiotic Timing, beginning with the CY
2019 payment determination. If this proposal is finalized as proposed,
the following previously finalized claims-based measures using QDCs
will be collected for the CY 2020 payment determination and subsequent
years:
ASC-1: Patient Burn;
ASC-2: Patient Fall;
ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong
Procedure, Wrong Implant; and
ASC-4: Hospital Transfer/Admission.
2. Minimum Threshold, Minimum Case Volume, and Data Completeness for
Claims-Based Measures Using QDCs
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75135 through 75137), the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70534 through 70535) as well as 42 CFR
416.310(a)(3) and 42 CFR 416.305(c) for our policies about minimum
threshold, minimum case volume, and data completeness for claims-based
measures using QDCs. We are not proposing any changes to these
policies.
3. Requirements for Data Submitted via an Online Data Submission Tool
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74505 through 74509); CY 2014 OPPS/ASC final rule with
comment period (78 FR 75137 through 75140); CY 2015 OPPS/ASC final rule
with comment period (79 FR 66983 through 66986); CY 2016 OPPS/ASC final
rule with comment period (80 FR 70535 through 70536); CY 2017 OPPS/ASC
final rule with comment period (81 FR 79820 through 79822); and 42 CFR
416.310(c) for our previously finalized policies for data submitted via
an online data submission tool. For more information on data submission
using QualityNet, we refer readers to: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1228773314768. We note that we are proposing to remove two measures submitted
via a CMS online data submission tool in section XIV.B.3.b.(2) and
XIV.B.3.b.(3) of this proposed rule and to adopt one measure submitted
via a CMS online data submission tool in section XIV.B.6.a. of this
proposed rule.
a. Requirements for Data Submitted via a Non-CMS Online Data Submission
Tool
We refer readers to CY 2014 OPPS/ASC final rule with comment period
(78 FR 75139 through 75140) and CY 2015 OPPS/ASC final rule with
comment period (79 FR 66985 through 66986) for our requirements
regarding data submitted via a non-CMS online data submission tool (CDC
NHSN Web site). We codified our existing policies regarding the data
collection time periods for measures involving online data submission
and the deadline for data submission via a non-CMS online data
submission tool at 42 CFR 416.310(c)(2). Currently, we only have one
measure (ASC-8: Influenza Vaccination Coverage among Healthcare
Personnel) that is submitted via a non-CMS online data submission tool.
We are not proposing any changes to the reporting requirements for
this measure.
b. Proposals Regarding Requirements for Data Submitted via a CMS Online
Data Submission Tool
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75137 through 75139), CY 2016 OPPS/ASC final rule with
comment period (80 FR 70535 through 70536), CY 2017 OPPS/ASC final rule
with comment period (81 FR 79821 through 79822), and 42 CFR
[[Page 33701]]
416.310(c)(1) for our requirements regarding data submitted via a CMS
online data submission tool. We are currently using the QualityNet Web
site as our CMS online data submission tool: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetHomepage&cid=1120143435383. In this proposed rule, we are making one proposal to the
method of data submission via a CMS online data submission tool.
(1) Batch Submission
We are not proposing any changes to our policies regarding data
submitted via a CMS online data submission tool when data is entered
for individual facilities. Currently, for individual facility data
entry, users must have a QualityNet account and use one Hospital
Quality Reporting (HQR) External File per facility that is uploaded
into the QualityNet secure portal. However, using one HQR External File
that only allows data entry for one facility can be burdensome for
entities responsible for submitting such data for multiple facilities,
such as multi-facility ASCs. Therefore, in an effort to streamline the
process, we are proposing to expand the CMS online tool to also allow
for batch submission beginning with data submitted during CY 2018 for
the CY 2020 payment determination and subsequent years.
Batch submission is submission of data for multiple facilities
simultaneously using a single, electronic file containing data from
multiple facilities submitted via one agent QualityNet account. Under
the batch submission process, ASC agents (for example, a corporate
representative for a corporate entity consisting of multiple ASC
facilities with separate NPIs) would be assigned a vendor ID and an
ASC's representative would submit the Security Administrator (SA) form
with the assigned vendor ID for the agent to establish their own
QualityNet account. Once approved, the agent may submit data for any
ASC associated with that ID, individually or in a batch, and access
data reports for the same ASCs. Agents would only have access to data
reports for facilities that have authorized them to have access. For
batch submission, agents would be provided the HQR external file layout
with which to upload their associated ASCs' data under the agents'
QualityNet account. In order to submit batch data, agents would need to
meet all QualityNet account requirements, such as establishing a
QualityNet account and maintaining a QualityNet security administrator.
Additional details regarding logistics of batch data submission would
be included in future guidance in the Specifications Manual.
In addition, we are proposing to make corresponding changes to 42
CFR 416.310(c)(1)(i) to reflect this proposal and replace the term
``ASCs'' with the phrase ``ASCs, and any agents submitting data on an
ASC's behalf.''
We are inviting public comment on our proposals, as discussed
above, to: (1) Expand the CMS online tool to also allow for batch
submission of measure data beginning with data submitted during CY
2018, and (2) make corresponding changes to modify 42 CFR
416.310(c)(1)(i) to reflect the aforementioned proposal.
(2) Measures Using the CMS Online Data Submission Tool for the CY 2020
Payment Determination And Subsequent Years
In sections XIV.B.3.b.(2) and XIV.B.3.b.(3) of this proposed rule,
respectively, we are proposing to remove two measures collected via a
CMS online data submission tool--ASC-6: Safe Survey Checklist Use and
ASC-7: ASC Facility Volume Data on Selected Surgical Procedures--
beginning with the CY 2019 payment determination. If these proposals
are finalized as proposed, the following previously finalized measures
will require data to be submitted via a CMS online data submission tool
for the CY 2020 payment determination and subsequent years:
ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up
Interval for Normal Colonoscopy in Average Risk Patients;
ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval
for Patients with a History of Adenomatous Polyps--Avoidance of
Inappropriate Use; and
ASC-11: Cataracts: Improvement in Patients' Visual
Function within 90 Days Following Cataract Surgery.\117\
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\117\ We note that the ASC-11 measure is voluntarily collected
effective beginning with the CY 2017 payment determination, as set
forth in section XIV.E.3.c. of the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66984 through 66985).
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Furthermore, in section XIV.B.6.a. of this proposed rule, we are
proposing to adopt one new measure collected via a CMS online data
submission tool, ASC-16: Toxic Anterior Segment Syndrome, beginning
with the CY 2021 payment determination.
4. Requirements for Claims-Based Measure Data
We refer readers to the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66985) and the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70536) for our previously adopted policies regarding data
processing and collection periods for claims-based measures for the CY
2018 payment determination and subsequent years. In addition, in the CY
2016 OPPS/ASC final rule with comment period (80 FR 70536), we codified
these policies at 42 CFR 416.310(b). We are not proposing any changes
to these requirements.
We note that one previously finalized measure, ASC-12: Facility 7-
Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy,
will be collected via claims for the CY 2020 payment determination and
subsequent years (79 FR 66970 through 66978). In addition, in sections
XIV.B.6.b. and c., respectively, of this proposed rule, we are
proposing to adopt two new claims-based measures--ASC-17: Hospital
Visits after Orthopedic Ambulatory Surgical Center Procedures, and ASC-
18: Hospital Visits after Urology Ambulatory Surgical Center
Procedures--beginning with the CY 2022 payment determination.
5. Requirements for Data Submission for ASC-15a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79822 through 79824) for our previously finalized
policies regarding survey administration and vendor requirements for
the CY 2020 payment determination and subsequent years. In addition, we
codified these policies at 42 CFR 416.310(e). However, in section
XIV.B.4. of this proposed rule, we are proposing to delay
implementation of the ASC-15a-e: OAS CAHPS Survey-based measures
beginning with the CY 2020 payment determination (CY 2018 data
submission) until further action in future rulemaking and refer readers
to that section for more details.
As noted in the CY 2017 OPPS/ASC final rule with comment period (81
FR 79815), some commenters suggested shortening sections of the survey,
such as the ``About You'' section. We continue to evaluate the utility
of individual questions as we collect new data from the survey's
voluntary national implementation, and will consider different options
for shortening the OAS CAHPS Survey without the loss of important data
in the future. Specifically, we continue to consider the removal of two
demographic questions--the ``gender'' and ``age''
[[Page 33702]]
questions--from the OAS CAHPS Survey in a future update.
6. Extraordinary Circumstances Extensions or Exemptions for the CY 2019
Payment Determination and Subsequent Years
a. Background
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR
53642 through 53643), the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75140 through 75141), the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79824 through 79825), and 42 CFR 416.310(d)
for the ASCQR Program's policies for extraordinary circumstance
extensions or exemptions (ECE) requests.\118\
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\118\ In the CY 2015 OPPS/ASC final rule with comment period (79
FR 66987), we stated that we will refer to the process as the
``Extraordinary Circumstances Extensions or Exemptions'' process
rather than the ``Extraordinary Circumstances Extensions or
Waivers'' process.
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Many of our quality reporting and value-based purchasing programs
share a common process for requesting an exception from program
reporting due to an extraordinary circumstance not within a provider's
control. We refer readers to the Hospital IQR Program (76 FR 51615
through 51652, 78 FR 50836 through 50837, 79 FR 50277, 81 FR 57181
through 57182, and 42 CFR 412.140(c)(2)), the Hospital OQR Program (77
FR 68489, 78 FR 75119 through 75120, 79 FR 66966, and 80 FR 70524), the
IPFQR Program (77 FR 53659 through 53660 and 79 FR 45978), and the
PCHQR Program (78 FR 50848), as well as the HAC Reduction Program (80
FR 49542 through 49543) and the Hospital Readmissions Reduction Program
(80 FR 49542 through 49543), for program-specific information about
extraordinary circumstances exemption requests.
In reviewing the policies for these programs, we recognized that
there are five areas in which these programs have variances regarding
ECE requests. These are: (1) Allowing the facilities or hospitals to
submit a form signed by the facility's or hospital's CEO versus CEO or
designated personnel; (2) requiring the form be submitted within 30
days following the date that the extraordinary circumstance occurred
versus within 90 days following the date the extraordinary circumstance
occurred; (3) inconsistency regarding specification of a timeline for
us to provide our formal response notifying the facility or hospital of
our decision; (4) inconsistency regarding specification of our
authority to grant ECEs due to CMS data system issues; and (5)
referring to the program as ``extraordinary extensions/exemptions''
versus as ``extraordinary circumstances exceptions.'' We believe
addressing these five areas, as appropriate, can improve administrative
efficiencies for affected facilities or hospitals. We note that, in the
FY 2018 IPPS/LTCH PPS proposed rule, we examined our policies in these
areas for the Hospital Readmissions Reduction Program, the HAC
Reduction Program, the Hospital IQR Program, the PCHQR Program and the
IPFQR Program (82 FR 19967, 19990, 20074 through 20075, 20085 through
20086 and 20128 through 20130, respectively) and proposed to address
differences in these areas for those programs. In section XIII.D.8. of
this proposed rule, we are also proposing revisions to our ECE policies
for the Hospital OQR Program.
With the exception of the terminology used to describe these
processes (item 5 above), the ASCQR Program is aligned with other
quality reporting programs. As a result, in this proposed rule, we are
proposing to rename the process as the extraordinary circumstances
exceptions (ECE) policy and make conforming changes to 42 CFR
416.310(d).
b. ECE Policy Nomenclature
We have observed that while all quality programs listed above have
developed similar policies to provide exceptions from program
requirements to facilities that have experienced extraordinary
circumstances, such as natural disasters, these programs refer to these
policies using inconsistent terminology. Some programs refer to these
policies as ``extraordinary circumstances extensions/exemptions'' while
others refer to the set of policies as ``extraordinary circumstances
exceptions.'' Several programs (specifically, the Hospital VBP Program,
the HAC Reduction Program, and the Hospital Readmissions Reduction
Program) are not able to grant extensions to required data reporting
timelines due to their reliance on data external to their program, and
thus the term, ``extraordinary circumstances extensions/exemptions'' is
not applicable to all programs. However, all of the described programs
are able to offer exceptions from their reporting requirements.
Therefore, in an effort to align across CMS quality programs, we are
proposing to change the name of this policy from ``extraordinary
circumstances extensions or exemption'' to ``extraordinary
circumstances exceptions'' for the ASCQR Program, beginning January 1,
2018, and to revise Sec. 416.310(d) of our regulations to reflect this
change.
We are inviting public comment on this proposal as discussed above.
c. Timeline for CMS Response to ECE Requests
We also note that we believe it is important for facilities to
receive timely feedback regarding the status of ECE requests. We strive
to complete our review of each ECE request as quickly as possible.
However, we recognize that the number of requests we receive, and the
complexity of the information provided impacts the actual timeframe to
make ECE determinations. To improve transparency of our process, we
believe it is appropriate to clarify that we will strive to complete
our review of each request within 90 days of receipt.
7. ASCQR Program Reconsideration Procedures
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR
53643 through 53644), the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75141), the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70537), and 42 CFR 416.330 for the ASCQR Program's
reconsideration policy. We are not proposing any changes to this
policy.
E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program
Requirements
1. Statutory Background
We refer readers to section XVI.D.1. of the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68499) for a detailed discussion of the
statutory background regarding payment reductions for ASCs that fail to
meet the ASCQR Program requirements.
2. Reduction to the ASC Payment Rates for ASCs That Fail To Meet the
ASCQR Program Requirements for a Payment Determination Year
The national unadjusted payment rates for many services paid under
the ASC payment system equal the product of the ASC conversion factor
and the scaled relative payment weight for the APC to which the service
is assigned. Currently, the ASC conversion factor is equal to the
conversion factor calculated for the previous year updated by the
multifactor productivity (MFP)-adjusted CPI-U update factor, which is
the adjustment set forth in section 1833(i)(2)(D)(v) of the Act. The
MFP-adjusted CPI-U update factor is the Consumer Price Index for all
urban consumers (CPI-U), which currently is the annual update for the
ASC payment system, minus the MFP adjustment. As discussed in the CY
2011 MPFS final rule with comment period (75 FR
[[Page 33703]]
73397), if the CPI-U is a negative number, the CPI-U would be held to
zero. Under the ASCQR Program in accordance with section 1833(i)(7)(A)
of the Act and as discussed in the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68499), any annual increase shall be reduced by
2.0 percentage points for ASCs that fail to meet the reporting
requirements of the ASCQR Program. This reduction applied beginning
with the CY 2014 payment rates (77 FR 68500). For a complete discussion
of the calculation of the ASC conversion factor, we refer readers to
section XII.G. of this proposed rule.
In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499
through 68500), in order to implement the requirement to reduce the
annual update for ASCs that fail to meet the ASCQR Program
requirements, we finalized our proposal that we would calculate two
conversion factors: A full update conversion factor and an ASCQR
Program reduced update conversion factor. We finalized our proposal to
calculate the reduced national unadjusted payment rates using the ASCQR
Program reduced update conversion factor that would apply to ASCs that
fail to meet their quality reporting requirements for that calendar
year payment determination. We finalized our proposal that application
of the 2.0 percentage point reduction to the annual update may result
in the update to the ASC payment system being less than zero prior to
the application of the MFP adjustment.
The ASC conversion factor is used to calculate the ASC payment rate
for services with the following payment indicators (listed in Addenda
AA and BB to the proposed rule, which are available via the Internet on
the CMS Web site): ``A2'', ``G2'', ``P2'', ``R2'', and ``Z2'', as well
as the service portion of device-intensive procedures identified by
``J8'' (77 FR 68500). We finalized our proposal that payment for all
services assigned the payment indicators listed above would be subject
to the reduction of the national unadjusted payment rates for
applicable ASCs using the ASCQR Program reduced update conversion
factor (77 FR 68500).
The conversion factor is not used to calculate the ASC payment
rates for separately payable services that are assigned status
indicators other than payment indicators ``A2'', ``G2'', ``J8'',
``P2'', ``R2'', and ``Z2.'' These services include separately payable
drugs and biologicals, pass-through devices that are contractor-priced,
brachytherapy sources that are paid based on the OPPS payment rates,
and certain office-based procedures, certain radiology services and
diagnostic tests where payment is based on the MPFS nonfacility PE RVU-
based amount, and a few other specific services that receive cost-based
payment (77 FR 68500). As a result, we also finalized our proposal that
the ASC payment rates for these services would not be reduced for
failure to meet the ASCQR Program requirements because the payment
rates for these services are not calculated using the ASC conversion
factor and, therefore, not affected by reductions to the annual update
(77 FR 68500).
Office-based surgical procedures (performed more than 50 percent of
the time in physicians' offices) and separately paid radiology services
(excluding covered ancillary radiology services involving certain
nuclear medicine procedures or involving the use of contrast agents)
are paid at the lesser of the MPFS nonfacility PE RVU-based amounts or
the amount calculated under the standard ASC ratesetting methodology.
Similarly, in section XII.D.2.b. of the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66933 through 66934), we finalized our
proposal that payment for the new category of covered ancillary
services (that is, certain diagnostic test codes within the medical
range of CPT codes for which separate payment is allowed under the OPPS
and when they are integral to covered ASC surgical procedures) will be
at the lower of the MPFS nonfacility PE RVU-based (or technical
component) amount or the rate calculated according to the standard ASC
ratesetting methodology. In the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68500), we finalized our proposal that the
standard ASC ratesetting methodology for this type of comparison would
use the ASC conversion factor that has been calculated using the full
ASC update adjusted for productivity. This is necessary so that the
resulting ASC payment indicator, based on the comparison, assigned to
these procedures or services is consistent for each HCPCS code,
regardless of whether payment is based on the full update conversion
factor or the reduced update conversion factor.
For ASCs that receive the reduced ASC payment for failure to meet
the ASCQR Program requirements, we believe that it is both equitable
and appropriate that a reduction in the payment for a service should
result in proportionately reduced coinsurance liability for
beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68500), we finalized our proposal that
the Medicare beneficiary's national unadjusted coinsurance for a
service to which a reduced national unadjusted payment rate applies
will be based on the reduced national unadjusted payment rate.
In that final rule with comment period, we finalized our proposal
that all other applicable adjustments to the ASC national unadjusted
payment rates would apply in those cases when the annual update is
reduced for ASCs that fail to meet the requirements of the ASCQR
Program (77 FR 68500). For example, the following standard adjustments
would apply to the reduced national unadjusted payment rates: The wage
index adjustment; the multiple procedure adjustment; the interrupted
procedure adjustment; and the adjustment for devices furnished with
full or partial credit or without cost (77 FR 68500). We believe that
these adjustments continue to be equally applicable to payment for ASCs
that do not meet the ASCQR Program requirements (77 FR 68500).
In the CY 2015, CY 2016 and CY 2017 OPPS/ASC final rules with
comment period (79 FR 66981 through 66982; 80 FR 70537 through 70538;
and 81 FR 79825 through 79826, respectively), we did not make any other
changes to these policies.
We are not proposing any changes to these policies for CY 2018.
XV. Request for Information and Public Comments
A. Request for Information on CMS Flexibilities and Efficiencies
CMS is committed to transforming the health care delivery system--
and the Medicare program--by putting an additional focus on patient-
centered care and working with providers, physicians, and patients to
improve outcomes. We seek to reduce burdens for hospitals, physicians,
and patients, improve the quality of care, decrease costs, and ensure
that patients and their providers and physicians are making the best
health care choices possible. These are the reasons we are including
this Request for Information in this proposed rule.
As we work to maintain flexibility and efficiency throughout the
Medicare program, we would like to start a national conversation about
improvements that can be made to the health care delivery system that
reduce unnecessary burdens for clinicians, other providers, and
patients and their families. We aim to increase quality of care, lower
costs, improve program integrity, and make the health care
[[Page 33704]]
system more effective, simple, and accessible.
We would like to take this opportunity to invite the public to
submit their ideas for regulatory, subregulatory, policy, practice, and
procedural changes to better accomplish these goals. Ideas could
include payment system redesign, elimination or streamlining of
reporting, monitoring and documentation requirements, aligning Medicare
requirements and processes with those of Medicaid and other payers,
operational flexibility, feedback mechanisms and data sharing that
would enhance patient care, support of the physician-patient
relationship in care delivery, and facilitation of individual
preferences. Responses to this Request for Information could also
include recommendations regarding when and how CMS issues regulations
and policies and how CMS can simplify rules and policies for
beneficiaries, clinicians, physicians, providers, and suppliers. Where
practicable, data and specific examples would be helpful. If the
proposals involve novel legal questions, analysis regarding CMS'
authority is welcome for CMS' consideration. We are particularly
interested in ideas for incentivizing organizations and the full range
of relevant professionals and paraprofessionals to provide screening,
assessment, and evidence-based treatment for individuals with opioid
use disorder and other substance use disorders, including payment
methodologies, care coordination, systems and services integration, use
of paraprofessionals such as community paramedics, and other
strategies. We are requesting commenters to provide clear and concise
proposals that include data and specific examples that could be
implemented within the law.
We note that this is a Request for Information only. Respondents
are encouraged to provide complete but concise responses. This Request
for Information is issued solely for information and planning purposes;
it does not constitute a Request for Proposal (RFP), applications,
proposal abstracts, or quotations. This Request for Information does
not commit the U.S. Government to contract for any supplies or services
or make a grant award. Further, CMS is not seeking proposals through
this Request for Information and will not accept unsolicited proposals.
Responders are advised that the U.S. Government will not pay for any
information or administrative costs incurred in response to this
Request for Information; all costs associated with responding to this
Request for Information will be solely at the interested party's
expense. We note that not responding to this Request for Information
does not preclude participation in any future procurement, if
conducted. It is the responsibility of the potential responders to
monitor this Request for Information announcement for additional
information pertaining to this request. In addition, we note that CMS
will not respond to questions about the policy issues raised in this
Request for Information. CMS will not respond to comment submissions in
response to this Request for Information in the CY 2018 OPPS/ASC final
rule with comment period. Rather, CMS will actively consider all input
as we develop future regulatory proposals or future subregulatory
policy guidance. CMS may or may not choose to contact individual
responders. Such communications would be for the sole purpose of
clarifying statements in the responders' written responses. Contractor
support personnel may be used to review responses to this Request for
Information. Responses to this Request for Information are not offers
and cannot be accepted by the U.S. Government to form a binding
contract or issue a grant. Information obtained as a result of this
Request for Information may be used by the U.S. Government for program
planning on a nonattribution basis. Respondents should not include any
information that might be considered proprietary or confidential. This
Request for Information should not be construed as a commitment or
authorization to incur cost for which reimbursement would be required
or sought. All submissions become U.S. Government property and will not
be returned. CMS may post on a Web site for public use the public
comments received, or a summary of those public comments, in response
to this Request for Information.
B. Eliminating Inappropriate Medicare Payment Differentials for Similar
Services in the Inpatient and Outpatient Settings
In the past, CMS has requested public comment on potential payment
policy options to address the issue of payment differentials between
hospital services provided in the inpatient and outpatient settings.
CMS has recognized that, even when particular hospital inpatient
services and hospital outpatient services are similar, Medicare payment
differentials may exist because different statutory provisions and
different payment methodologies apply. CMS is committed to eliminating
inappropriate Medicare payment differentials for similar services in
the inpatient and outpatient settings in order to execute our
responsibility to taxpayers to prudently pay for high quality care. As
MedPAC has previously noted, ``The high profitability of one-day stays
under the inpatient prospective payment system (IPPS) and the generally
lower payment rates for similar care under the outpatient prospective
payment system (OPPS) have heightened concern about the appropriateness
of inpatient one-day stays'' (Medicare and the Health Care Delivery
System Report to Congress, June 2015). Furthermore, we are concerned
that, to the extent Medicare payment differentials exist (and may be
inappropriate), there is a corresponding effect on financial liability
of patients.
Our most recent solicitation for public comments on these issues
occurred in the CY 2016 OPPS/ASC final rule with comment period (80 FR
70549). Since that time, both hospitals and CMS have had the
opportunity to gain experience under the various policy changes that
have occurred with respect to short inpatient hospital stays. In this
context, we believe it is an appropriate time to seek public comment
again on transparent ways to identify and eliminate inappropriate
payment differentials for similar services provided in the inpatient
and outpatient settings.
C. Request for Information Regarding Physician-Owned Hospitals
We are seeking public comments on the appropriate role of
physician-owned hospitals in the delivery system. We would like to
explore whether physician-owned hospitals could play a more prominent
role in the delivery system. In addition, we are seeking public
comments on the impact of the current requirements of the physician
self-referral law regarding physician-owned hospitals. In particular,
we are interested in comments on the impact on Medicare beneficiaries.
XVI. Files Available to the Public via the Internet
The Addenda to the OPPS/ASC proposed rules and the final rules with
comment period are published and available only via the Internet on the
CMS Web site. To view the Addenda to this proposed rule pertaining to
proposed CY 2018 payments under the OPPS, we refer readers to the CMS
Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; select ``1678-P'' from the list of regulations. All OPPS
Addenda to this proposed rule are contained in the zipped folder
entitled ``2018 OPPS
[[Page 33705]]
1678-P Addenda'' at the bottom of the page. To view the Addenda to this
proposed rule pertaining to the proposed CY 2018 payments under the ASC
payment system, we refer readers to the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.html; select ``1678-P'' from the list of
regulations. All ASC Addenda to this proposed rule are contained in the
zipped folders entitled ``Addendum AA, BB, DD1, DD2, and EE.''
XVII. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
In this proposed rule, we are soliciting public comment on each of
these issues for the following sections of this document that contain
information collection requirements (ICRs).
B. ICRs for the Hospital OQR Program
1. Background
The Hospital OQR Program is generally aligned with the CMS quality
reporting program for hospital inpatient services known as the Hospital
IQR Program (82 FR 20031 through 20075). We refer readers to the CY
2011 through CY 2017 OPPS/ASC final rules with comment periods (75 FR
72111 through 72114; 76 FR 74549 through 74554; 77 FR 68527 through
68532; 78 FR 75170 through 75172; 79 FR 67012 through 67015; 80 FR
70580 through 70582; and 81 FR 79862 through 79863, respectively) for
detailed discussions of Hospital OQR Program information collection
requirements we have previously finalized. The information collection
requirements associated with the Hospital OQR Program are currently
approved under OMB control number 0938-1109.
In section XIII.B.4.c. of this proposed rule, we are proposing to
remove six measures: (1) OP-21: Median Time to Pain Management for Long
Bone Fracture beginning with the CY 2020 payment determination; (2) OP-
26: Hospital Outpatient Volume Data on Selected Outpatient Surgical
Procedures beginning with the CY 2020 payment determination; (3) OP-1:
Median Time to Fibrinolysis beginning with the CY 2021 payment
determination; (4) OP-4: Aspirin at Arrival beginning with the CY 2021
payment determination; (5) OP-20: Door to Diagnostic Evaluation by a
Qualified Medical Professional beginning with the CY 2021 payment
determination; and (6) OP-25: Safe Surgery Checklist beginning with the
CY 2021 payment determination. We expect these proposals would reduce
the burden of reporting for the Hospital OQR Program, as discussed
below. We note that we discuss only the changes in burden resulting
from the provisions in this proposed rule.
In this proposed rule, we are proposing to publicly report OP-18c
using data beginning with patient encounters during the third quarter
of 2017. We are also proposing to delay the OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-based measures beginning with the CY 2020
payment determination (CY 2018 data collection period) until further
notice in future rulemaking. In addition, in this proposed rule,
beginning with the CY 2020 payment determination, we are proposing: (1)
To codify at Sec. 419.46(e) our previously finalized process for
targeting hospitals for validation of chart-abstracted measures; (2) to
formalize the educational review process and use it to correct
incorrect validation results for chart-abstracted measures; (3) to
change the NOP submission deadlines such that hospitals are required to
submit the NOP any time prior to registering on the QualityNet Web site
and to make conforming revisions at 42 CFR 419.46(a); (4) to align the
first quarter for which hospitals must submit data for all hospitals
that did not participate in the previous year's Hospital OQR Program,
and make corresponding revisions at 42 CFR 419.46(c)(3); and (5) to
align the naming of the Extraordinary Circumstances Exceptions (ECE)
policy and make conforming changes to the CFR. We do not believe that
these proposed changes would affect our burden estimates, as further
discussed below.
2. Proposed Change in Hourly Labor Cost for Burden Calculation for the
Hospital OQR Program
In previous rules (80 FR 70581), we estimated that a hospital pays
an individual approximately $30 per hour to abstract and submit
clinical data. In this proposed rule, we are proposing to estimate that
reporting data for the Hospital OQR Program can be accomplished by
staff with a median hourly wage of $18.29 per hour.\119\ This labor
rate is based on the Bureau of Labor Statistics (BLS) median hourly
wage for a Medical Records and Health Information Technician. The BLS
is the principal Federal agency responsible for measuring labor market
activity, working conditions, and price changes in the economy.\120\
Acting as an independent agency, the BLS provides objective information
for not only the government, but also for the public.\121\ The BLS
describes Medical Records and Health Information Technicians as those
responsible for processing and maintaining health information
data.\122\ Therefore, we believe is reasonable to assume that these
individuals would be tasked with abstracting clinical data for the
Hospital OQR Program measures.
---------------------------------------------------------------------------
\119\ BLS Occupational Employment Statistics; May 2016.
Retrieved from: https://www.bls.gov/oes/current/oes292071.htm.
\120\ https://www.bls.gov/bls/infohome.htm.
\121\ https://www.bls.gov/bls/infohome.htm.
\122\ BLS Occupational Employment Statistics; May 2016.
Retrieved from: https://www.bls.gov/oes/current/oes292071.htm.
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We also are proposing to calculate the cost of overhead, including
fringe benefits, at 100 percent of the mean hourly wage. This is
necessarily a rough adjustment, both because fringe benefits and
overhead costs vary significantly from employer to employer and because
methods of estimating these costs vary widely from study to study.
Nonetheless, we believe that doubling the hourly wage rate ($18.29 x 2
= $36.58) to estimate total cost is a reasonably accurate estimation
method. Accordingly, we calculate cost burden to hospitals using a wage
plus benefits estimate of $36.58 throughout the discussion below for
the Hospital OQR Program.
We are inviting public comment on these proposals.
[[Page 33706]]
3. Estimated Burden Due to Proposal To Delay OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures Beginning With the CY 2020
Payment Determination
As described in section XIII.B.5. of this proposed rule, we are
proposing to delay OP-37a-e: Outpatient and Ambulatory Surgery Consumer
Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based
measures beginning with the CY 2020 payment determination (CY 2018 data
collection period). We recognize that delaying mandatory implementation
of the survey-based measures will reduce the number of HOPDs
administering the OAS CAHPS Survey in CY 2018 and future years.
Implementation of the survey-based measures would have made survey
administration mandatory for all eligible HOPDs participating in the
program. Delaying implementation of the survey-based measures also
delays the requirement that HOPDs must administer the survey to
eligible patients and we therefore expect fewer HOPDs to administer the
survey. Given the proposed delay in mandatory implementation of the OAS
CAHPS Survey, there is a corresponding reduction in burden for HOPDs.
As stated in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79863), the information collection requirements associated with the
five OAS CAHPS Survey-based measures (OP-37a, OP-37b, OP-37c, OP-37d,
and OP-37e) are currently approved under OMB Control Number 0938-1240.
This PRA package assumes 4,006 HOPDs would administer the OAS CAHPS
Survey. The estimated average burden per HOPD as captured in this PRA
package is $6,070 annually and includes patient/respondent burden, time
for preparing patient records to send to a survey vendor, and
contracting with a survey vendor. Consistent with the voluntary
national implementation of the OAS CAHPS Survey that began in 2016,
however, we anticipate that not all HOPDs will voluntarily administer
the survey.\123\ For this reason, we anticipate that each HOPD
participating in the Hospital OQR Program that chooses not to
voluntarily administer the OAS CAHPS Survey under the voluntary
national implementation in CY 2018 and future years would experience an
anticipated burden reduction of approximately $6,070 as a result of
this proposal. However, as noted above, this burden reduction is
included under OMB Control Number 0938-1240 and is not included in our
burden estimates for the Hospital OQR Program.
---------------------------------------------------------------------------
\123\ Currently, 1,124 HOPDs have selected a vendor to conduct
the survey on their behalf as part of a national voluntary
implementation of the OAS CAHPS Survey, for a total estimated burden
of voluntary survey administration of $6,822,680 (1,124 HOPDs x
$6,070 per HOPD). If the survey were to become part of the Hospital
OQR Program as mandatory, we estimate approximately 3,228 HOPDs that
meet eligibility requirements for the Hospital OQR Program would
begin administering the survey and reporting data to CMS under OMB
Control Number 0938-1240. We assume HOPDs voluntarily administering
the survey will continue to do so even if implementation of the
survey-based measures is delayed for the Hospital OQR Program;
therefore, we anticipate that approximately 2,104 HOPDs (3,228
eligible HOPDs--1,124 HOPDs voluntarily reporting under the
voluntary national implementation) that would have administered the
survey as a mandatory requirement of the Hospital OQR Program will
not do so for CY 2018 and future years if the survey-based measures
are delayed. This results in an estimated aggregate burden reduction
of $12,771,280 (2,104 HOPDs x $6,070 per HOPD) across all HOPDs
meeting eligibility requirements for the Hospital OQR Program. As
noted above, this burden reduction is included under OMB Control
Number 0938-1240 and is not included in our burden estimates for the
Hospital OQR Program.
---------------------------------------------------------------------------
4. Estimated Burden Due to Proposal to Publicly Report OP-18c: Median
Time From Emergency Department Arrival to Emergency Department
Departure for Discharged Emergency Department Patients- Psychiatric/
Mental Health Patients
In section XIII.B.10.b. of this proposed rule we are proposing to
publicly report 18c: Median Time from Emergency Department Arrival to
Emergency Department Departure for Discharged Emergency Department
Patients- Psychiatric/Mental Health Patients beginning with patient
encounters from the third quarter of 2017. As noted in that section,
the data required for public reporting of OP-18c is already collected
as part of the existing Hospital OQR Program requirements. Accordingly,
we do not expect this proposal to affect burden.
5. Estimated Burden Due to Proposals for the CY 2020 Payment
Determination and Subsequent Years
a. Burden Due to Proposed Measure Removals
In section XIII.B.4.c.(1) and (2) of this proposed rule, we are
proposing, beginning with the CY 2020 payment determination, to remove
one chart-abstracted measure (OP-21: Median Time to Pain Management for
Long Bone Fracture) and one web-based measure (OP-26: Hospital
Outpatient Volume Data on Selected Outpatient Surgical Procedures). In
total, we expect these proposals would reduce burden by 152,680 hours
and $5.6 million for the CY 2020 payment determination. These estimates
are described in detail below.
We calculated the burden reduction associated with the proposed
removal of OP-21: Median Time to Pain Management for Long Bone Fracture
by considering the time per case to report chart-abstracted measures,
which are submitted using a web-based tool, as well as the number of
cases per hospital and the number of participating hospitals. In the CY
2016 OPPS/ASC final rule with comment period (80 FR 70582), we
estimated the burden to collect chart-abstracted data for a single web-
based measure, including OP-21, to be 2.92 minutes. In this proposed
rule, we estimate that 3,300 Hospital Outpatient Departments (HOPDs)
report data under the Hospital OQR Program. Based on the most recent
data from CY 2015 reporting, we also estimate that 947 cases are
reported per hospital for each chart-abstracted measure. Accordingly,
we estimate a total burden reduction of 46.1 hours per HOPD due to the
removal of one chart-abstracted measure (2.92 minutes per measure/60
minutes per hour x 1 measure x 947 cases per hospital). In total,
across 3,300 HOPDs, we estimate a burden reduction of 152,130 hours
(46.1 hours per hospital x 3,300 hospitals) and $5,564,915 (152,130
total hours x $36.58 per hour) for the CY 2020 payment determination
due to the proposed removal of OP-21: Median Time to Pain Management
for Long Bone Fracture.
We calculated the burden reduction associated with the proposed
removal of OP-26: Hospital Outpatient Volume Data on Selected
Outpatient Surgical Procedures by considering the time per measure to
report web-based measures as well as the number of participating
hospitals. As previously stated in the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70582), we estimate that hospitals spend
approximately 10 minutes per measure to report web-based measures and
that 3,300 HOPDs report data under the Hospital OQR Program.
Accordingly, for the CY 2020 payment determination, we estimate a total
burden reduction of 550 hours across 3,300 HOPDs due to the removal of
one web-based measure (10 minutes per measure/60 minutes per hour x 1
measure x 3,300 hospitals). We further estimate a cost reduction of
$20,119 due to this proposal (550 total hours x $36.58 per hour).
In total, we expect these proposals would reduce burden by 152,680
hours (152,130 + 550) and $5,585,034 ($5,564,915 + $20,119) for the CY
2020 payment determination.
[[Page 33707]]
b. Burden Due to Updates to Previously Finalized Chart-Abstracted
Measure Validation Procedures and the Educational Review Process
We previously estimated the burden associated with validation of
chart-abstracted measures in the CY 2013 and CY 2014 OPPS/ASC final
rules with comment period (77 FR 68531 and 78 FR 75172, respectively).
In section XIII.D.7.a. of this proposed rule, we are providing
clarification on our procedures for validation of chart-abstracted
measures to note that the 50 poorest performing outlier hospitals will
be targeted for validation. We do not expect this clarification to
influence burden because it does not alter the number of hospitals
selected for validation or the requirements for those hospitals that
are selected.
In addition, in section XIII.D.7.c. of this proposed rule, we are
proposing to formalize the process of allowing hospitals to use an
educational review process to correct incorrect validation results for
the first three quarters of validation for chart-abstracted measures.
We are also proposing to update the process to specify that if the
results of an educational review indicate that we incorrectly scored a
hospital's medical records selected for validation, the corrected
quarterly validation score would be used to compute the hospital's
final validation score at the end of the calendar year. Under this
proposal, the educational review request process remains the same for
the CY 2020 payment determination and subsequent years, except that
revised scores identified through an educational review would be used
to correct a hospital's validation score. As stated in the CY 2014
OPPS/ASC final rule (78 FR 75171), we believe there is a burden
associated with successful participation in the Hospital OQR Program,
where successful participation results in a full annual payment update
(APU) for a particular payment determination. This burden would
include, but would not be limited to, maintaining familiarity with the
Hospital OQR Program requirements, which includes checking feedback
reports to indicate a facility's current status or performance. The
overall administrative burden, which we believe includes the
educational review process, is estimated at 42 hours per hospital and
has previously been calculated (78 FR 75171). This burden would not be
changed by the proposal to use revised scores identified through an
educational review to correct a hospital's validation score.
c. Burden Due to Proposed Update to NOP Submission Deadline
We previously estimated the burden associated with Hospital OQR
Program participation and requirements in the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75171). In section XIII.C.2. of this
proposed rule, we are proposing to revise the NOP submission deadlines
such that hospitals are required to submit the NOP any time prior to
registering on the QualityNet Web site. While we expect this proposal
to make it generally easier for hospitals to comply with the Hospital
OQR Program requirements by extending the NOP deadline, we anticipate a
negligible effect on the time and cost of completing the participation
requirements. As a result, the proposal to revise the NOP submission
deadline would not impact our burden estimates.
d. Burden Due to Proposal To Align the First Quarter for Which
Hospitals Must Submit Data for All Hospitals That Did Not Participate
in the Previous Year's Hospital OQR Program
In section XIII.D.1 of this proposed rule, we are proposing to
align the timeline specifying the initial quarter for which hospitals
must submit data for all hospitals that did not participate in the
previous year's Hospital OQR Program, rather than specifying different
timelines for hospitals with Medicare acceptance dates before versus
after January 1 of the year prior to an affected annual payment update.
Although this proposal alters the timeline for hospitals to begin
submitting data for the Hospital OQR Program, it does not alter program
requirements. As a result, we do not anticipate that this proposal will
influence burden.
e. Burden Due to Proposed Updates to the Previously Finalized ECE
Policy
We previously estimated the burden associated with general and
administrative Hospital OQR Program requirements in the CY 2014 OPPS/
ASC final rule with comment period (78 FR 75171). In section XIII.D.8.
of this proposed rule, we discuss our intent to align the naming of
this exception policy and to update 42 CFR 419.46(d) to reflect our
current ECE policies. We are also clarifying the timing of our response
to ECE requests. Because we are not seeking any new or additional
information in our ECE proposals, we believe the updates would have no
effect on burden for hospitals.
6. Estimated Burden Due to Proposals for the CY 2021 Payment
Determination and Subsequent Years
In section XIII.B.4.c.(3) through (6) of this proposed rule, we are
proposing to remove four measures beginning with the CY 2021 payment
determination: three chart-abstracted measures (OP-1: Median Time to
Fibrinolysis, OP-4: Aspirin at Arrival, and OP-20: Door to Diagnostic
Evaluation by a Qualified Medical Professional); and one web-based
measure (OP-25: Safe Surgery Checklist Use). In total, we expect the
removal of these measures would reduce burden by 304,810 hours and
$11.1 million for the CY 2021 payment determination, as described
below.
We calculated the burden reduction associated with the removal of
chart-abstracted measures by considering the time per case to report
chart-abstracted measures, as well as the number of cases per hospital
and the number of participating hospitals. As previously stated in the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70582), we
estimate that hospitals spend approximately 2.92 minutes per case per
chart-abstracted measure and that 3,300 HOPDs report data under the
Hospital OQR program. In addition, based on the most recently available
data from CY 2015 reporting, we estimate that 947 cases are reported
per hospital for each chart-abstracted measures. We note that although
OP-1: Median Time to Fibrinolysis is a chart-abstracted measure, we do
not expect removing this measure would reduce burden, as the data
collected for this measure is required to calculate another program
measure in the AMI measure set (OP-2: Fibrinolytic Therapy Received
Within 30 Minutes of ED Arrival) and will, therefore, continue to be
collected as an underlying part of OP-2 even if the proposal to remove
OP-1 is finalized as proposed. Accordingly, there is no change in
burden associated with the proposed removal of this measure included in
our calculations below.
We estimate a total burden reduction of 92.2 hours per HOPD due to
the removal of OP-4: Aspirin at Arrival and OP-20: Door to Diagnostic
Evaluation by a Qualified Medical Professional (2.92 minutes per
measure/60 minutes per hour x 2 measures x 947 cases per hospital). In
total, across 3,300 HOPDs we estimate a burden reduction of 304,260
hours (92.2 hours per hospital x 3,300 hospitals) and $11,129,831
(304,260 total hours x $36.58 per hour) for the CY 2021 payment
determination due to the proposed removal of OP-4: Aspirin at Arrival
and OP-20: Door to
[[Page 33708]]
Diagnostic Evaluation by a Qualified Medical Professional.
We calculated the burden reduction associated with the removal of
OP-25: Safe Surgery Checklist Use by considering the time per measure
to report web-based measures as well as the number of participating
hospitals. As previously stated in the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70582), we estimate that hospitals spend
approximately 10 minutes per measure to report web-based measures and
that 3,300 HOPDs report data under the Hospital OQR program.
Accordingly, for the CY 2021 payment determination, we estimate a total
burden reduction of 550 hours across 3,300 HOPDs due to the removal of
one web-based measure (10 minutes per measure/60 minutes per hour x 1
measure x 3,300 hospitals). We further estimate a cost reduction of
$20,119 due to this proposal (550 total hours x $36.58 per hour).
In total, we expect these proposals would reduce burden by 304,810
hours (304,260 + 550) and $11,149,950 ($11,129,831 + $20,119) for the
CY 2021 payment determination for the Hospital OQR Program.
We are inviting public comment on the burden associated with these
information collection requirements.
C. ICRs for the ASCQR Program
1. Background
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74554), the FY 2013 IPPS/LTCH PPS final rule (77 FR
53672), and the CY 2013, CY 2014, CY 2015, CY 2016, and CY 2017 OPPS/
ASC final rules with comment periods (77 FR 68532 through 68533; 78 FR
75172 through 75174; 79 FR 67015 through 67016; 80 FR 70582 through
70584; and 81 FR 79863 through 79865, respectively) for detailed
discussions of the ASCQR Program information collection requirements we
have previously finalized. The information collection requirements
associated with the ASCQR Program are currently approved under OMB
control number 0938-1270. Below we discuss only the changes in burden
that would result from the provisions in this proposed rule.
In section XIV.B.3.b. of this proposed rule, we are proposing,
beginning with the CY 2019 payment determination, to remove three
measures (ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing, ASC-
6: Safe Surgery Checklist Use, and ASC-7: Ambulatory Surgical Center
Facility Volume Data on Selected Ambulatory Surgical Center Surgical
Procedures) from the ASCQR Program measure set. In section XIV.B.6.a.
of this proposed rule, we are proposing, beginning with the CY 2021
payment determination, to adopt one new measure, ASC-16: Toxic Anterior
Segment Syndrome. In section XIV.B.6.b. and c. of this proposed rule,
we are proposing, beginning with the CY 2022 payment determination, to
adopt two new measures collected via claims (ASC-17: Hospital Visits
after Orthopedic Ambulatory Surgical Center Procedures and ASC-18:
Hospital Visits after Urology Ambulatory Surgical Center Procedures).
We expect these proposals would reduce the overall burden of reporting
data for the ASCQR Program, as discussed below.
In this proposed rule, we are also proposing: (1) To delay ASC-15a-
e: OAS CAHPS survey-based measures beginning with the CY 2020 payment
determination (CY 2018 data collection); (2) to expand the CMS online
tool to also allow for batch submission beginning with data submitted
during CY 2018 and to make corresponding revisions to the CFR; and, (3)
to align the naming of the Extraordinary Circumstances Exceptions (ECE)
policy beginning with CY 2018 and to make conforming changes to the
CFR. As discussed below, we do not expect these proposals to influence
our burden estimates.
2. Proposed Change in Hourly Labor Cost for Burden Calculation for the
ASCQR Program
To better align this program with our other quality reporting and
value-based purchasing programs, we are proposing to update our burden
calculation methodology to standardize elements within our burden
calculation. Specifically, we are proposing to utilize an updated
standard hourly labor cost for data reporting activities.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79863
through 79864), we finalized our proposal to use the hourly labor cost
of $32.84 (hourly wage plus fringe and overhead, discussed in more
detail below) in estimating the labor costs associated with abstracting
clinical data. This labor rate was based on the Bureau of Labor
Statistics (BLS) median hourly wage for a Medical Records and Health
Information Technician of $16.42 per hour.\124\ The BLS is the
principal Federal agency responsible for measuring labor market
activity, working conditions, and price changes in the economy.\125\
Acting as an independent agency, the BLS provides objective information
for not only the government, but also for the public.\126\ The BLS
describes Medical Records and Health Information Technicians as those
responsible for processing and maintaining health information
data.\127\ Therefore, we believe is reasonable to assume that these
individuals would be tasked with abstracting clinical data for ASCQR
Program measures.
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\124\ https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm.
\125\ https://www.bls.gov/bls/infohome.htm.
\126\ https://www.bls.gov/bls/infohome.htm.
\127\ BLS Occupational Employment Statistics; May 2016.
Retrieved from: https://www.bls.gov/oes/current/oes292071.htm.
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The BLS recently released updated wage estimates for Medical
Records and Health Information Technicians. These updates increased the
median hourly wage from $16.42 per hour to $18.29 per hour.\128\
Applying the same 100 percent overhead cost estimate finalized in the
CY 2017 OPPS/ASC final rule with comment period (81 FR 79863 through
79864) to estimate the elements assigned as ``indirect'' or
``overhead'' costs, we estimate an updated total hourly labor cost of
$36.58. Therefore, we are proposing to apply an updated hourly labor
cost of $36.58 ($18.29 base salary + $18.29 fringe and overhead) to our
burden calculations for chart abstraction.
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\128\ https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm.
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We are inviting public comment on this proposal.
3. Estimated Burden of ASCQR Program Proposals Beginning With CY 2018
In section XIV.B.4. of this proposed rule we are proposing to delay
ASC-15a-e: OAS CAHPS Survey-based measures beginning with the CY 2020
payment determination (CY 2018 data collection) until further notice in
future rulemaking. We recognize that delaying mandatory implementation
of the survey-based measures will reduce the number of ASCs
administering the OAS CAHPS Survey in CY 2018 and future years.
Implementation of the survey-based measures would have made survey
administration mandatory for all eligible ASCs participating in the
program. Delaying implementation of the survey-based measures also
delays the requirement that ASCs must administer the survey to eligible
patients and we therefore expect fewer ASCs to administer the survey.
Given the proposed delay in mandatory implementation of the OAS CAHPS
Survey, there is a corresponding reduction in burden for ASCs. As
described in the CY 2017 OPPS/ASC final rule with comment period (81 FR
[[Page 33709]]
79864), the information collection requirements associated with the
five OAS CAHPS Survey based measures (ASC-15a, ASC-15b, ASC-15c, ASC-
15d, and ASC-15e) are currently approved under OMB Control Number 0938-
1240. This PRA package assumes 5,357 ASCs, or roughly all ASCs paid
under the ASC payment system, would administer the OAS CAHPS Survey.
The estimated average burden per ASC as captured in this PRA package is
$6,070 annually and includes patient/respondent burden, time for
preparing patient records to send to a survey vendor, and contracting
with a survey vendor. Consistent with the voluntary national
implementation of the OAS CAHPS Survey that began in 2016, however, we
anticipate that not all ASCs will voluntarily administer the
survey.\129\ For this reason, we anticipate that each ASC participating
in the ASCQR Program that chooses not to voluntarily administer the OAS
CAHPS Survey under the voluntary national implementation in CY 2018 and
future years would experience an anticipated burden reduction of
approximately $6,070 as a result of this proposal. However, as noted
above, this burden reduction is included under OMB Control Number 0938-
1240 and is not included in our burden estimates for the ASCQR Program.
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\129\ Currently, 719 ASCs have selected a vendor to conduct the
survey on their behalf as part of a national voluntary
implementation of the OAS CAHPS Survey, for a total estimated burden
of voluntary survey administration of $4,364,330 (719 ASCs x $6,070
per ASC). If the survey were to become part of the ASCQR Program as
mandatory, we estimate approximately 3,937 ASCs that meet
eligibility requirements for the ASCQR Program would begin
administering the survey and reporting data to CMS under OMB Control
Number 0938-1240. We assume ASCs voluntarily administering the
survey will continue to do so even if implementation of the survey-
based measures is delayed for the ASCQR Program; therefore, we
anticipate that approximately 3,218 ASCs (3,937 eligible ASCs--719
ASCs voluntarily reporting under the voluntary national
implementation) that would have administered the survey as a
mandatory requirement of the ASCQR Program will not do so for CY
2018 and future years if the survey-based measures are delayed. This
results in an estimated aggregate burden reduction of $19,533,260
(3,218 ASCs x $6,070 per ASC) across all ASCs meeting eligibility
requirements for the ASCQR Program. As noted above, this burden
reduction is included under OMB Control Number 0938-1240 and is not
included in our burden estimates for the ASCQR Program.
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In section XIV.D.3. of this proposed rule, we are proposing to
expand the CMS online tool to also allow for batch submission beginning
with data submitted during the CY 2018 reporting period and to make
corresponding revisions to the CFR. We expect this proposal to increase
the efficiency of data submission via the CMS online tool. However, the
proposal does not change our data reporting requirements, and
therefore, we do not expect a change in the burden experienced by ASCs.
In section XIV.D.6. of this proposed rule, we are proposing to
align the naming of the Extraordinary Circumstances Exceptions (ECE)
policy beginning with CY 2018 and to make conforming changes to the
CFR. We are also clarifying the timing of our response to ECE requests.
Because we are not seeking any new or additional information in our ECE
proposals, we believe the updates would have no effect on burden for
hospitals.
4. Estimated Burden of ASCQR Program Proposals for the CY 2019 Payment
Determination
In section XIV.B.3.b. of this proposed rule, we are proposing,
beginning with the CY 2019 payment determination, to remove three
measures from the ASCQR Program. These measures include one claims-
based measure (ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing)
and two collected via a CMS online data submission tool (ASC-6: Safe
Surgery Checklist Use and ASC-7: Ambulatory Surgical Center Facility
Volume Data on Selected Ambulatory Surgical Center Surgical
Procedures).
Data for ASC-5 is submitted via CMS claims using Quality Data
Codes, which impose only a nominal burden on providers because these
claims are already submitted for the purposes of payment. Therefore, we
estimate a nominal reduction in burden associated with our proposal to
remove the ASC-5 measure from the ASCQR Program measure set beginning
with the CY 2019 payment determination.
We believe 3,937 ASCs would experience a reduction in burden
associated with our proposals to remove ASC-6 and ASC-7 from the ASCQR
Program measure set. In the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75173), we finalized our estimates that each
participating ASC would spend 10 minutes per measure per year to
collect and submit the required data for the ASC-6 and ASC-7 measures,
making the total estimated annual burden associated with each of these
measures 657 hours (3,937 ASCs x 0.167 hours per ASC) and $24,033 (657
hours x $36.58 per hour). Therefore, we estimate a total reduction in
burden of 1,314 (657 hours x 2 measures) hours and $48,066 (1,314 hours
x $36.58 per hour) for all ASCs as a result of our proposals to remove
ASC-6 and ASC-7 from the ASCQR Program measure set. The reduction in
burden associated with these requirements is available for review and
comment under OMB Control Number 0938-1270.
5. Estimated Burden of ASCQR Program Proposals for the CY 2021 Payment
Determination
In section XIV.B.6.a. of this proposed rule, we are proposing,
beginning with the CY 2021 payment determination, to adopt one new
measure collected via a CMS online data submission tool, ASC-16: Toxic
Anterior Segment Syndrome.
We believe 3,937 ASCs would incur a burden associated with
abstracting numerators, denominators, and exclusions for the proposed
ASC-16 measure collected and reported via a CMS online data submission
tool. In addition, we estimate that each ASC reporting data for this
measure would report data on approximately one case per year, and would
spend 15 minutes (0.25 hours) per case to collect and submit this data.
Therefore, we estimate a total burden for all reporting ASCs with a
single case per ASC of 984 hours (3,937 ASCs x 1 case per ASC x 0.25
hours per case) and $36,004 (984 hours x $36.58 per hour). The
additional burden associated with these requirements is available for
review and comment under OMB Control Number 0938-1270.
6. Estimated Burden of ASCQR Program Proposals for the CY 2022 Payment
Determination
In section XIV.B.6.b. and c. of this this proposed rule, we are
proposing, beginning with the CY 2022 payment determination, to adopt
two measures collected via claims: (1) ASC-17: Hospital Visits after
Orthopedic Ambulatory Surgical Center Procedures; and (2) ASC-18:
Hospital Visits after Urology Ambulatory Surgical Center Procedures.
Data used to calculate scores for these measures is collected via Part
A and Part B Medicare administrative claims and Medicare enrollment
data, and therefore does not require ASCs to report any additional
data. Because these measures do not require ASCs to submit any
additional data, we do not believe there would be any additional burden
associated with these proposals.
We are inviting public comment on the burden associated with these
information collection requirements.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
[[Page 33710]]
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
CMS-1678-P, Fax: (202) 395-6974; or, Email:
OIRA_submission@omb.eop.gov.
XVIII. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this proposed
rule, and, when we proceed with a subsequent document(s), we will
respond to those comments in the preamble to that document.
XIX. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this proposed rule, as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA) (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), the Contract with America Advancement Act
of 1996 (Pub. L. 104-121) (5 U.S.C. 804(2)), and Executive Order 13771
on Reducing Regulation and Controlling Regulatory Costs (January 30,
2017). This section of the proposed rule contains the impact and other
economic analyses for the provisions that we are proposing for CY 2018.
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This proposed rule has been designated as an economically
significant rule under section 3(f)(1) of Executive Order 12866 and a
major rule under the Contract with America Advancement Act of 1996
(Pub. L. 104-121). Accordingly, this proposed rule has been reviewed by
the Office of Management and Budget. We have prepared a regulatory
impact analysis that, to the best of our ability, presents the costs
and benefits of this proposed rule. We are soliciting public comments
on the regulatory impact analysis in this proposed rule, and we will
address any public comments we receive in the final rule with comment
period as appropriate.
2. Statement of Need
This proposed rule is necessary to make updates to the Medicare
hospital OPPS rates. It is necessary to make proposed changes to the
payment policies and rates for outpatient services furnished by
hospitals and CMHCs in CY 2018. We are required under section
1833(t)(3)(C)(ii) of the Act to update annually the OPPS conversion
factor used to determine the payment rates for APCs. We also are
required under section 1833(t)(9)(A) of the Act to review, not less
often than annually, and revise the groups, the relative payment
weights, and the wage and other adjustments described in section
1833(t)(2) of the Act. We must review the clinical integrity of payment
groups and relative payment weights at least annually. We are proposing
to revise the APC relative payment weights using claims data for
services furnished on and after January 1, 2016, through and including
December 31, 2016, and processed through December 31, 2016, and updated
cost report information.
This proposed rule also is necessary to make updates to the ASC
payment rates for CY 2018, enabling CMS to make changes to payment
policies and payment rates for covered surgical procedures and covered
ancillary services that are performed in an ASC in CY 2018. Because ASC
payment rates are based on the OPPS relative payment weights for the
majority of the procedures performed in ASCs, the ASC payment rates are
updated annually to reflect annual changes to the OPPS relative payment
weights. In addition, we are required under section 1833(i)(1) of the
Act to review and update the list of surgical procedures that can be
performed in an ASC not less frequently than every 2 years.
3. Overall Impacts for the Proposed OPPS and ASC Payment Provisions
We estimate that the total increase in Federal government
expenditures under the OPPS for CY 2018, compared to CY 2017 due to the
changes in this proposed rule, will be approximately $897 million.
Taking into account our estimated changes in enrollment, utilization,
and case-mix, we estimate that the OPPS expenditures for CY 2018 will
be approximately $5.7 billion higher relative to expenditures in CY
2017. Because this proposed rule is economically significant as
measured by the threshold of an additional $100 million in expenditures
in 1 year, we have prepared this regulatory impact analysis that, to
the best of our ability, presents its costs and benefits. Table 38
displays the distributional impact of the proposed CY 2018 changes in
OPPS payment to various groups of hospitals and for CMHCs.
We estimate that the proposed update to the conversion factor and
other proposed adjustments (not including the effects of proposed
outlier payments, the proposed pass-through estimates, and the proposed
application of the frontier State wage adjustment for CY 2017) would
increase total OPPS payments by 1.8 percent in CY 2018. The proposed
changes to the APC relative payment weights, the proposed changes to
the wage indexes, the proposed continuation of a payment adjustment for
rural SCHs, including EACHs, and the proposed payment adjustment for
cancer hospitals would not increase OPPS payments because these changes
to the OPPS are budget neutral. However, these proposed updates would
change the distribution of payments within the budget neutral system.
We estimate that the proposed total change in payments between CY 2017
and CY 2018, considering all payments, proposed changes in estimated
total outlier payments, pass-through payments, and the application of
the frontier State wage adjustment outside of budget neutrality, in
addition to the application of the OPD fee schedule increase factor
after all adjustments required by sections 1833(t)(3)(F),
1833(t)(3)(G), and 1833(t)(17) of the Act, would increase total
estimated OPPS payments by 1.9 percent.
We estimate the proposed total increase (from proposed changes to
the ASC provisions in this proposed rule as well as from enrollment,
utilization, and case-mix changes) in Medicare expenditures under the
ASC payment system for CY 2018 compared to CY 2017 to be approximately
$67 million. Because the provisions for the ASC payment system are part
of a proposed rule that is economically significant as measured by the
$100 million threshold, we have prepared a regulatory impact analysis
of the proposed changes to the ASC payment system that, to the best of
our ability, presents the costs and benefits of this portion of this
proposed rule. Table 39 and 40 of this proposed rule display the
redistributive impact of the proposed CY 2018 changes regarding ASC
payments, grouped by
[[Page 33711]]
specialty area and then grouped by procedures with the greatest ASC
expenditures, respectively.
4. Regulatory Review Costs
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on last year's proposed rule will be the number of reviewers
of this proposed rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this rule. It is
possible that not all commenters reviewed last year's rule in detail,
and it is also possible that some reviewers chose not to comment on the
proposed rule. For these reasons, we believe that the number of past
commenters would be a fair estimate of the number of reviewers of this
proposed rule. We welcome any comments on the approach in estimating
the number of entities that will review this proposed rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this proposed rule,
and therefore for the purposes of our estimate, we assume that each
reviewer reads approximately 50 percent of the rule. We are seeking
public comments on this assumption.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $105.16 per hour, including overhead and fringe benefits
(https://www.bls.gov/oes/2016/may/naics4_621100.htm). Assuming an
average reading speed, we estimate that it would take approximately 6.4
hours for the staff to review half of this proposed rule. For each
facility that reviews the rule, the estimated cost is $673 (6.4 hours x
$105.16). Therefore, we estimate that the total cost of reviewing this
regulation is $1,708,074 ($673 x 2,538 reviewers).
5. Detailed Economic Analyses
a. Estimated Effects of OPPS Changes in This Proposed Rule
(1) Limitations of Our Analysis
The distributional impacts presented here are the projected effects
of the proposed CY 2018 policy changes on various hospital groups. We
post on the CMS Web site our hospital-specific estimated payments for
CY 2018 with the other supporting documentation for this proposed rule.
To view the hospital-specific estimates, we refer readers to the CMS
Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/. At the Web site, select
``regulations and notices'' from the left side of the page and then
select ``CMS-1678-P'' from the list of regulations and notices. The
hospital-specific file layout and the hospital-specific file are listed
with the other supporting documentation for this proposed rule. We show
hospital-specific data only for hospitals whose claims were used for
modeling the impacts shown in Table 38 below. We do not show hospital-
specific impacts for hospitals whose claims we were unable to use. We
refer readers to section II.A. of this proposed rule for a discussion
of the hospitals whose claims we do not use for ratesetting and impact
purposes.
We estimate the effects of the proposed individual policy changes
by estimating payments per service, while holding all other payment
policies constant. We use the best data available, but do not attempt
to predict behavioral responses to our policy changes. In addition, we
have not made adjustments for future changes in variables such as
service volume, service-mix, or number of encounters.
We are soliciting public comment and information about the
anticipated effects of the proposed changes included in this proposed
rule on providers and our methodology for estimating them. Any public
comments that we receive will be addressed in the applicable sections
of the final rule with comment period that discuss the specific
policies.
(2) Estimated Effects of Proposed OPPS Changes to Part B Drug Payment
on 340B Eligible Hospitals Paid Under the OPPS
In section V.B.7. of this proposed rule, we discuss our proposal to
reduce the payment for nonpass-through, separately payable drugs
purchased by 340B-participating hospitals through the 340B drug pricing
program. Specifically, we are proposing to pay for separately payable
drugs and biologicals that are obtained with a 340B discount, excluding
those on pass-through status and vaccines, at the average sales price
(ASP) minus 22.5 percent instead of ASP+6 percent.
We recognize that it is difficult to determine precisely what the
impact on Medicare spending would be because OPPS claims data do not
currently indicate if the drug being provided was purchased with a 340B
discount. Furthermore, a list of outpatient drugs covered under the
340B program is not publicly available. Accordingly, for purposes of
estimating the impact, we assumed that all applicable drugs purchased
by hospitals eligible to participate in the 340B drug pricing program
were purchased at a discounted price under the 340B program. We assumed
that all governmental-owned, cancer, and children's hospitals, as well
as those hospitals with a DSH percentage greater than 11.75 percent,
sole community hospitals with a DSH percentage greater than 8 percent,
and rural referral centers with a DSH percentage greater than 8
percent, all participated in the 340B program. We did not assume
changes in the quantity of 340B purchased drugs provided (thereby
affecting unit volume) or changes in the number of hospitals
participating in the 340B program that may occur due to the proposed
payment reduction.
While we acknowledge that there are some limitations in Medicare's
ability to prospectively calculate a precise estimate for purposes of
this proposed rule, we note that each hospital has the ability to
calculate how this proposal would change its Medicare payments for
separately payable drugs in CY 2018. Specifically, each hospital that
is not participating in the 340B program would know that its Medicare
payments for drugs would be unaffected by this proposal; whereas each
hospital participating in the 340B program has access to 340B ceiling
prices (and subceiling prices if it participates in the Prime Vendor
Program), knows the volume of 340B drugs that it has historically
billed to Medicare, and can generally project the specific covered 340B
drugs (and volume thereof) for which it expects to bill Medicare in CY
2018. Accordingly, an affected hospital is able to estimate the
difference in payment that it would receive if Medicare were to pay ASP
minus 22.5 percent instead of ASP+6 percent for 340B drugs.
Using CY 2016 claims data for the applicable separately payable
drugs and biologicals, excluding those on pass-through status and
vaccines, billed by hospitals eligible to participate in the 340B
program, we estimate that OPPS payments for separately payable drugs,
including beneficiary copayment, could decrease by as much as $900
million under this proposal. Because we are proposing to implement this
payment reduction in a budget neutral manner within the OPPS, the
reduced payments for separately payable drugs purchased through the
340B drug pricing program would increase payment rates (and by
extension, beneficiary coinsurance
[[Page 33712]]
liabilities) for other items and services paid under the OPPS by an
offsetting aggregate amount.
Because data on drugs that are purchased with a 340B discount are
not publicly available, it is not possible to more accurately estimate
the amount of the aggregate payment reduction and the offsetting amount
of the adjustment that is necessary to ensure budget neutrality through
higher payment rates for other services. Furthermore, there are
potential offsetting factors, including possible changes in provider
behavior and overall market changes that would likely lower the impact
of the payment reduction. As a result, if we finalize this proposal in
the CY 2018 OPPS/ASC final rule with comment period, we may need to
make an adjustment in future years to revise the conversion factor once
we have received more accurate data on drugs purchased with a 340B
discount within the OPPS, similar to the adjustment we made for
clinical diagnostic laboratory test packaging policy in the CY 2017
OPPS/ASC final rule with comment period (81 FR 79592).
We project that reducing payment for 340B drugs to ASP minus 22.5
percent would increase non-drug OPPS payment rates by approximately 1.4
percent in CY 2018. We note that the proposed payment rates and
estimated impacts included in this proposed rule do not reflect the
effects of this proposal. We remind commenters that this estimate could
change in the final rule based on a number of factors, including other
policies that are adopted in the final rule and the availability of
updated data and/or method of assessing the impact in the final rule.
We are seeking public comment on our estimate and are especially
interested in whether commenters believe there are other publicly
available data sources or proxies that can be used for determining
which drugs billed by hospitals paid under the OPPS were acquired under
the 340B program.
In addition, we are soliciting public comment on whether we should
apply all or part of the savings generated by this payment reduction to
increase payments for specific services paid under the OPPS, or under
Part B generally, in CY 2018, rather than simply increasing the
conversion factor. In particular, we are seeking public comment on
whether and how the offsetting increase could be targeted to hospitals
that treat a large share of indigent patients, especially those
patients who are uninsured. Finally, we are seeking public comment on
whether the redistribution of savings associated with this proposal
would result in unnecessary increases in the volume of covered services
paid under the OPPS that should be adjusted in accordance with section
1833(t)(2)(F) of the Act.
(3) Estimated Effects of Proposed OPPS Changes on Hospitals
Table 38 below shows the estimated impact of this proposed rule on
hospitals. Historically, the first line of the impact table, which
estimates the change in payments to all facilities, has always included
cancer and children's hospitals, which are held harmless to their pre-
BBA amount. We also include CMHCs in the first line that includes all
providers. We now include a second line for all hospitals, excluding
permanently held harmless hospitals and CMHCs.
We present separate impacts for CMHCs in Table 38, and we discuss
them separately below, because CMHCs are paid only for partial
hospitalization services under the OPPS and are a different provider
type from hospitals. In CY 2018, we are proposing to pay CMHCs for
partial hospitalization services under APC 5853 (Partial
Hospitalization for CMHCs), and we are proposing to pay hospitals for
partial hospitalization services under APC 5863 (Partial
Hospitalization for Hospital-Based PHPs).
The estimated increase in the proposed total payments made under
the OPPS is determined largely by the increase to the conversion factor
under the statutory methodology. The distributional impacts presented
do not include assumptions about changes in volume and service-mix. The
conversion factor is updated annually by the OPD fee schedule increase
factor as discussed in detail in section II.B. of this proposed rule.
Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee schedule
increase factor is equal to the market basket percentage increase
applicable under section 1886(b)(3)(B)(iii) of the Act, which we refer
to as the IPPS market basket percentage increase. The proposed IPPS
market basket percentage increase for FY 2018 is 2.9 percent (82 FR
19931). Section 1833(t)(3)(F)(i) of the Act reduces that 2.9 percent by
the multifactor productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act, which is proposed to be 0.4
percentage point for FY 2018 (which is also the proposed MFP adjustment
for FY 2018 in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19931
through 19932)), and sections 1833(t)(3)(F)(ii) and 1833(t)(3)(G)(v) of
the Act further reduce the market basket percentage increase by 0.75
percentage point, resulting in the proposed OPD fee schedule increase
factor of 1.75 percent. We are using the proposed OPD fee schedule
increase factor of 1.75 percent in the calculation of the CY 2018 OPPS
conversion factor. Section 10324 of the Affordable Care Act, as amended
by HCERA, further authorized additional expenditures outside budget
neutrality for hospitals in certain frontier States that have a wage
index less than 1.0000. The amounts attributable to this frontier State
wage index adjustment are incorporated in the CY 2018 estimates in
Table 38.
To illustrate the impact of the proposed CY 2018 changes, our
analysis begins with a baseline simulation model that uses the CY 2017
relative payment weights, the FY 2017 final IPPS wage indexes that
include reclassifications, and the final CY 2017 conversion factor.
Table 38 shows the estimated redistribution of the proposed increase or
decrease in payments for CY 2018 over CY 2017 payments to hospitals and
CMHCs as a result of the following factors: the impact of the proposed
APC reconfiguration and recalibration changes between CY 2017 and CY
2018 (Column 2); the proposed wage indexes and the provider adjustments
(Column 3); the combined impact of all of the proposed changes
described in the preceding columns plus the proposed 1.75 percent OPD
fee schedule increase factor update to the conversion factor; and the
estimated impact taking into account all proposed payments for CY 2018
relative to all payments for CY 2017, including the impact of proposed
changes in estimated outlier payments, the frontier State wage
adjustment, and proposed changes to the pass-through payment estimate
(Column 5).
We did not model an explicit budget neutrality adjustment for the
rural adjustment for SCHs because we are proposing to maintain the
current adjustment percentage for CY 2018. Because the proposed updates
to the conversion factor (including the proposed update of the OPD fee
schedule increase factor), the estimated cost of the proposed rural
adjustment, and the estimated cost of proposed projected pass-through
payment for CY 2018 are applied uniformly across services, observed
redistributions of payments in the impact table for hospitals largely
depend on the mix of services furnished by a hospital (for example, how
the APCs for the hospital's most frequently furnished services would
change), and the impact of the proposed wage index changes on the
hospital. However, proposed total payments made under this system and
the extent to which this proposed rule would redistribute money during
[[Page 33713]]
implementation also will depend on changes in volume, practice
patterns, and the mix of services billed between CY 2017 and CY 2018 by
various groups of hospitals, which CMS cannot forecast.
In CY 2016, we excluded all molecular pathology laboratory tests
from our packaging policy, and in CY 2017, we expanded the laboratory
packaging exception to apply to all advanced diagnostic laboratory
tests (ADLTs) that meet the criteria of section 1834A(d)(5)(A) of the
Act. For CY 2018, we are seeking public comments on whether
laboratories (instead of hospitals) should be permitted to bill
Medicare directly for molecular pathology tests and ADLTs that meet the
criteria of section 1834A(d)(5)(A) of the Act (and are granted ADLT
status by CMS), that are ordered less than 14 days following the date
of a hospital outpatient's discharge from the hospital outpatient
department.
The laboratory date of service issue is discussed in section X.F.
of this proposed rule. Because there are currently no laboratory tests
designated as ADLTs and because the payment rate for laboratory tests
excluded from our packaging policy billed by a hospital would have been
the applicable rate for the laboratory test under the CLFS, if any
aspect of this discussion would be finalized, it would not result in a
net costs or savings to the program. Accordingly, section X.F. of this
proposed rule is not included in the impact table in the regulatory
impact analysis.
Overall, we estimate that the proposed rates for CY 2018 would
increase Medicare OPPS payments by an estimated 1.9 percent. Removing
payments to cancer and children's hospitals because their payments are
held harmless to the pre-OPPS ratio between payment and cost and
removing payments to CMHCs results in a proposed estimated 2.0 percent
increase in Medicare payments to all other hospitals. These estimated
payments would not significantly impact other providers.
Column 1: Total Number of Hospitals
The first line in Column 1 in Table 38 shows the total number of
facilities (3,828), including designated cancer and children's
hospitals and CMHCs, for which we were able to use CY 2016 hospital
outpatient and CMHC claims data to model CY 2017 and proposed CY 2018
payments, by classes of hospitals, for CMHCs and for dedicated cancer
hospitals. We excluded all hospitals and CMHCs for which we could not
plausibly estimate CY 2017 or proposed CY 2018 payment and entities
that are not paid under the OPPS. The latter entities include CAHs,
all-inclusive hospitals, and hospitals located in Guam, the U.S. Virgin
Islands, Northern Mariana Islands, American Samoa, and the State of
Maryland. This process is discussed in greater detail in section II.A.
of this proposed rule. At this time, we are unable to calculate a
disproportionate share hospital (DSH) variable for hospitals that are
not also paid under the IPPS because DSH payments are only made to
hospitals paid under the IPPS. Hospitals for which we do not have a DSH
variable are grouped separately and generally include freestanding
psychiatric hospitals, rehabilitation hospitals, and long-term care
hospitals. We show the total number of OPPS hospitals (3,714),
excluding the hold-harmless cancer and children's hospitals and CMHCs,
on the second line of the table. We excluded cancer and children's
hospitals because section 1833(t)(7)(D) of the Act permanently holds
harmless cancer hospitals and children's hospitals to their ``pre-BBA
amount'' as specified under the terms of the statute, and therefore, we
removed them from our impact analyses. We show the isolated impact on
the 48 CMHCs at the bottom of the impact table and discuss that impact
separately below.
Column 2: APC Recalibration--All Proposed Changes
Column 2 shows the estimated effect of proposed APC recalibration.
Column 2 also reflects any proposed changes in multiple procedure
discount patterns or conditional packaging that occur as a result of
the proposed changes in the relative magnitude of payment weights. As a
result of proposed APC recalibration, we estimate that urban hospitals
would experience no change, with the impact ranging from an increase of
0.2 percent to a decrease of 0.1 percent, depending on the number of
beds. Rural hospitals would experience no change, with the impact
ranging from an increase of 0.1 percent to a decrease of 0.1 percent,
depending on the number of beds. Major teaching hospitals would
experience a decrease of 0.1 percent overall.
Column 3: Proposed Wage Indexes and the Effect of the Proposed Provider
Adjustments
Column 3 demonstrates the combined budget neutral impact of the
proposed APC recalibration; the proposed updates for the wage indexes
with the proposed FY 2018 IPPS post-reclassification wage indexes; the
proposed rural adjustment; and the proposed cancer hospital payment
adjustment. We modeled the independent effect of the proposed budget
neutrality adjustments and the proposed OPD fee schedule increase
factor by using the relative payment weights and wage indexes for each
year, and using a CY 2017 conversion factor that included the OPD fee
schedule increase and a budget neutrality adjustment for differences in
wage indexes.
Column 3 reflects the independent effects of the proposed updated
wage indexes, including the application of proposed budget neutrality
for the proposed rural floor policy on a nationwide basis. This column
excludes the effects of the proposed frontier State wage index
adjustment, which is not budget neutral and is included in Column 5. We
did not model a budget neutrality adjustment for the proposed rural
adjustment for SCHs because we are proposing to continue the rural
payment adjustment of 7.1 percent to rural SCHs for CY 2018, as
described in section II.E. of this proposed rule.
We modeled the independent effect of proposing to update the wage
indexes by varying only the wage indexes, holding APC relative payment
weights, service-mix, and the rural adjustment constant and using the
proposed CY 2018 scaled weights and a CY 2017 conversion factor that
included a budget neutrality adjustment for the effect of the proposed
changes to the wage indexes between CY 2017 and CY 2018. The proposed
FY 2018 wage policy results in modest redistributions.
There is a slight increase of less than 0.1 in Column 3 for the
proposed CY 2018 cancer hospital payment adjustment budget neutrality
calculation because we are using a payment-to-cost ratio target for the
cancer hospital payment adjustment in CY 2018 of 0.89, compared to the
CY 2017 OPPS/ASC final rule with comment period (81 FR 79869) payment-
to-cost ratio target of 0.91. We note that, in accordance with section
16002 of the 21st Century Cures Act, we are applying a budget
neutrality factor calculated as if the proposed cancer hospital
adjustment target payment-to-cost ratio was 0.90, not the 0.89 target
payment-to-cost ratio we are proposing to apply in section II.F. of
this proposed rule.
Column 4: All Proposed Budget Neutrality Changes Combined With the
Proposed Market Basket Update
Column 4 demonstrates the combined impact of all of the proposed
changes previously described and the proposed update to the conversion
factor of 1.75 percent. Overall, these proposed changes would increase
payments to
[[Page 33714]]
urban hospitals by 1.8 percent and to rural hospitals by 1.8 percent.
Most classes of hospitals would receive an increase in line with the
proposed 1.8 percent overall increase after the proposed update is
applied to the proposed budget neutrality adjustments.
Column 5: All Proposed Changes for CY 2018
Column 5 depicts the full impact of the proposed CY 2018 policies
on each hospital group by including the effect of all of the proposed
changes for CY 2018 and comparing them to all estimated payments in CY
2017. Column 5 shows the combined budget neutral effects of Columns 2
and 3; the proposed OPD fee schedule increase; the impact of the
proposed frontier State wage index adjustment; the impact of estimated
proposed OPPS outlier payments as discussed in section II.G. of this
proposed rule; the proposed change in the Hospital OQR Program payment
reduction for the small number of hospitals in our impact model that
failed to meet the reporting requirements (discussed in section XIII.
of this proposed rule); and the difference in total OPPS payments
dedicated to transitional pass-through payments.
Of those hospitals that failed to meet the Hospital OQR Program
reporting requirements for the full CY 2017 update (and assumed, for
modeling purposes, to be the same number for CY 2018), we included 30
hospitals in our model because they had both CY 2016 claims data and
recent cost report data. We estimate that the cumulative effect of all
of the proposed changes for CY 2018 would increase payments to all
facilities by 1.9 percent for CY 2018. We modeled the independent
effect of all of the proposed changes in Column 5 using the final
relative payment weights for CY 2017 and the proposed relative payment
weights for CY 2018. We used the final conversion factor for CY 2017 of
$75.001 and the proposed CY 2018 conversion factor of $76.483 discussed
in section II.B. of this proposed rule.
Column 5 contains simulated outlier payments for each year. We used
the proposed 1-year charge inflation factor used in the FY 2018 IPPS/
LTCH PPS proposed rule (82 FR 20173) of 5.1 percent (1.05074) to
increase individual costs on the CY 2016 claims, and we used the most
recent overall CCR in the April 2017 Outpatient Provider-Specific File
(OPSF) to estimate outlier payments for CY 2017. Using the CY 2016
claims and a proposed 5.1 percent charge inflation factor, we currently
estimate that outlier payments for CY 2017, using a multiple threshold
of 1.75 and a fixed-dollar threshold of $3,825 would be approximately
1.04 percent of total payments. The estimated current outlier payments
of 1.04 percent are incorporated in the comparison in Column 5. We used
the same set of claims and a charge inflation factor of 10.4 percent
(1.104055) and the CCRs in the April 2017 OPSF, with an adjustment of
0.979187, to reflect relative changes in cost and charge inflation
between CY 2016 and CY 2018, to model the proposed CY 2018 outliers at
1.0 percent of estimated total payments using a multiple threshold of
1.75 and a fixed-dollar threshold of $4,325. The charge inflation and
CCR inflation factors are discussed in detail in the FY 2018 IPPS/LTCH
PPS proposed rule (82 FR 20173).
Overall, we estimate that facilities would experience an increase
of 1.9 percent under this proposed rule in CY 2018 relative to total
spending in CY 2017. This projected increase (shown in Column 5) of
Table 38 reflects the proposed 1.75 percent OPD fee schedule increase
factor, plus 0.22 percent for the proposed change in the pass-through
estimate between CY 2017 and CY 2018, minus a decrease of 0.04 percent
for the difference in estimated outlier payments between CY 2017 (1.04
percent) and CY 2018 (proposed 1.0 percent). We estimate that the
combined effect of all of the proposed changes for CY 2018 would
increase payments to urban hospitals by 2.0 percent. Overall, we
estimate that rural hospitals would experience a 2.0 percent increase
as a result of the combined effects of all of the proposed changes for
CY 2018.
Among hospitals by teaching status, we estimate that the impacts
resulting from the combined effects of all changes would include an
increase of 1.7 percent for major teaching hospitals and an increase of
2.1 percent for nonteaching hospitals. Minor teaching hospitals would
experience an estimated increase of 2.0 percent.
In our analysis, we also have categorized hospitals by type of
ownership. Based on this analysis, we estimate that voluntary hospitals
would experience an increase of 1.9 percent, proprietary hospitals
would experience an increase of 2.3 percent, and governmental hospitals
would experience an increase of 1.9 percent.
Table 38--Estimated Impact of the Proposed CY 2018 Changes for the Hospital Outpatient Prospective Payment
System
----------------------------------------------------------------------------------------------------------------
All proposed
budget neutral
APC Proposed new changes
Number of recalibration wage index and (combined cols All proposed
hospitals (all proposed provider 2,3) with changes
changes) adjustments market basket
update
(1) (2) (3) (4) (5)
----------------------------------------------------------------------------------------------------------------
ALL FACILITIES *................ 3,828 0.0 0.0 1.8 1.9
ALL HOSPITALS (excludes 3,714 0.0 0.0 1.8 2.0
hospitals permanently held
harmless and CMHCs)............
URBAN HOSPITALS................. 2,902 0.0 0.0 1.8 2.0
LARGE URBAN (GT 1 MILL.).... 1,577 0.1 -0.1 1.8 1.9
OTHER URBAN (LE 1 MILL.).... 1,325 0.0 0.1 1.9 2.0
RURAL HOSPITALS................. 812 0.0 0.0 1.8 2.0
SOLE COMMUNITY.............. 371 0.0 0.2 1.9 2.1
OTHER RURAL................. 441 0.0 -0.2 1.6 1.8
BEDS (URBAN)
0-99 BEDS................... 988 0.2 0.0 1.9 2.1
100-199 BEDS................ 841 0.2 0.0 1.9 2.1
200-299 BEDS................ 465 0.1 0.0 1.8 2.0
300-499 BEDS................ 395 0.0 0.0 1.8 2.0
[[Page 33715]]
500 + BEDS.................. 213 -0.1 0.1 1.7 1.8
BEDS (RURAL)
0-49 BEDS................... 337 0.0 -0.2 1.5 1.7
50-100 BEDS................. 289 0.1 -0.2 1.6 1.9
101-149 BEDS................ 101 0.0 0.1 1.9 2.1
150-199 BEDS................ 46 0.0 0.1 1.9 2.1
200 + BEDS.................. 39 -0.1 0.3 2.0 2.1
REGION (URBAN)
NEW ENGLAND................. 144 0.2 0.1 2.1 2.2
MIDDLE ATLANTIC............. 343 0.1 -0.3 1.5 1.7
SOUTH ATLANTIC.............. 461 0.1 0.2 2.0 2.2
EAST NORTH CENT............. 464 0.0 0.1 1.8 1.9
EAST SOUTH CENT............. 172 -0.2 -0.1 1.5 1.7
WEST NORTH CENT............. 185 -0.2 0.5 2.0 2.2
WEST SOUTH CENT............. 501 0.1 0.2 2.0 2.2
MOUNTAIN.................... 202 0.2 -0.9 1.0 1.3
PACIFIC..................... 382 0.1 0.0 1.8 2.0
PUERTO RICO................. 48 -0.3 0.3 1.7 1.9
REGION (RURAL)
NEW ENGLAND................. 21 0.0 1.6 3.4 3.5
MIDDLE ATLANTIC............. 53 0.1 -0.1 1.8 2.0
SOUTH ATLANTIC.............. 123 0.0 -0.7 1.0 1.2
EAST NORTH CENT............. 121 0.0 -0.1 1.7 1.9
EAST SOUTH CENT............. 155 -0.1 -0.1 1.5 1.7
WEST NORTH CENT............. 96 0.0 0.2 2.0 2.3
WEST SOUTH CENT............. 162 0.1 0.3 2.1 2.3
MOUNTAIN.................... 57 0.0 -0.3 1.5 1.9
PACIFIC..................... 24 0.1 0.1 1.9 2.1
TEACHING STATUS
NON-TEACHING................ 2,624 0.1 0.1 2.0 2.1
MINOR....................... 746 0.0 0.0 1.8 2.0
MAJOR....................... 344 -0.1 -0.1 1.6 1.7
DSH PATIENT PERCENT
0........................... 11 0.0 -0.1 1.7 1.8
GT 0-0.10................... 277 0.2 0.0 2.0 2.1
0.10-0.16................... 269 0.2 -0.1 1.8 2.0
0.16-0.23................... 577 0.1 0.2 2.1 2.2
0.23-0.35................... 1,121 0.0 0.0 1.8 1.9
GE 0.35..................... 920 0.0 -0.1 1.7 1.8
DSH NOT AVAILABLE **........ 539 -1.5 0.1 0.3 0.5
URBAN TEACHING/DSH
TEACHING & DSH.............. 982 0.0 -0.1 1.7 1.8
NO TEACHING/DSH............. 1,394 0.2 0.2 2.1 2.2
NO TEACHING/NO DSH.......... 11 0.0 -0.1 1.7 1.8
DSH NOT AVAILABLE **........ 515 -1.5 0.1 0.4 0.5
TYPE OF OWNERSHIP
VOLUNTARY................... 1,970 0.0 0.0 1.8 1.9
PROPRIETARY................. 1,253 0.2 0.1 2.1 2.3
GOVERNMENT.................. 491 -0.1 0.1 1.8 1.9
CMHCs 48 -0.1 0.2 1.9 2.1
----------------------------------------------------------------------------------------------------------------
Column (1) shows total hospitals and/or CMHCs.
Column (2) includes all proposed CY 2018 OPPS policies and compares those to the CY 2017 OPPS.
Column (3) shows the budget neutral impact of updating the wage index by applying the proposed FY 2018 hospital
inpatient wage index, including all hold harmless policies and transitional wages. The proposed rural
adjustment continues our current policy of 7.1 percent so the budget neutrality factor is 1. The proposed
budget neutrality adjustment for the cancer hospital adjustment is 1.0003 because the target payment-to-cost
ratio changes from 0.91 in CY 2017 to 0.90 in CY 2018 and is further reduced by one percentage point to 0.89
in accordance with the 21st Century Cures Act; however this reduction does not affect the budget neutrality
adjustment consistent with statute.
Column (4) shows the impact of all budget neutrality adjustments and the addition of the proposed 1.75 percent
OPD fee schedule update factor (2.9 percent reduced by 0.4 percentage points for the proposed productivity
adjustment and further reduced by 0.75 percentage point as required by law).
Column (5) shows the additional adjustments to the conversion factor resulting from the frontier adjustment, a
change in the pass-through estimate, and adding estimated outlier payments.
* These 3,828 providers include children and cancer hospitals, which are held harmless to pre-BBA amounts, and
CMHCs.
** Complete DSH numbers are not available for providers that are not paid under IPPS, including rehabilitation,
psychiatric, and long-term care hospitals.
[[Page 33716]]
(4) Estimated Effects of Proposed OPPS Changes on CMHCs
The last line of Table 38 demonstrates the isolated impact on
CMHCs, which furnish only partial hospitalization services under the
OPPS. In CY 2017, CMHCs are paid under APC 5853 (Partial
Hospitalization (3 or more services) for CMHCs). We modeled the impact
of this APC policy assuming that CMHCs will continue to provide the
same number of days of PHP care as seen in the CY 2016 claims data used
for this proposed rule. We excluded days with 1 or 2 services because
our policy only pays a per diem rate for partial hospitalization when 3
or more qualifying services are provided to the beneficiary. We
estimate that CMHCs would experience an overall 2.1 percent increase in
payments from CY 2017 (shown in Column 5). We note that this includes
the trimming methodology described in section VIII.B. of this proposed
rule.
Column 3 shows that the estimated impact of adopting the proposed
FY 2018 wage index values would result in a small increase of 0.2
percent to CMHCs. Column 4 shows that combining this proposed OPD fee
schedule increase factor, along with proposed changes in APC policy for
CY 2018 and the proposed FY 2018 wage index updates, would result in an
estimated increase of 1.9 percent. Column 5 shows that adding the
proposed changes in outlier and pass-though payments would result in a
total 2.1 percent increase in payment for CMHCs. This reflects all
proposed changes to CMHCs for CY 2018.
(5) Estimated Effect of Proposed OPPS Changes on Beneficiaries
For services for which the beneficiary pays a copayment of 20
percent of the payment rate, the beneficiary's payment will increase
for services for which the OPPS payments will rise and will decrease
for services for which the OPPS payments will fall. For further
discussion on the calculation of the national unadjusted copayments and
minimum unadjusted copayments, we refer readers to section II.I. of
this proposed rule. In all cases, section 1833(t)(8)(C)(i) of the Act
limits beneficiary liability for copayment for a procedure performed in
a year to the hospital inpatient deductible for the applicable year.
We estimate that the aggregate beneficiary coinsurance percentage
would be 18.5 percent for all services paid under the OPPS in CY 2018.
The estimated aggregate beneficiary coinsurance reflects general system
adjustments, including the CY 2018 comprehensive APC payment policy
discussed in section II.A.2.e. of this proposed rule.
(6) Estimated Effects of Proposed OPPS Changes on Other Providers
The relative payment weights and payment amounts established under
the OPPS affect the payments made to ASCs as discussed in section XII.
of this proposed rule. No types of providers or suppliers other than
hospitals, CMHCs, and ASCs would be affected by the proposed changes in
this proposed rule.
(7) Estimated Effects of Proposed OPPS Changes on the Medicare and
Medicaid Programs
The effect on the Medicare program is expected to be an increase of
$897 million in program payments for OPPS services furnished in CY
2018. The effect on the Medicaid program is expected to be limited to
copayments that Medicaid may make on behalf of Medicaid recipients who
are also Medicare beneficiaries. We refer readers to our discussion of
the impact on beneficiaries in section XIX.A.4.a.(4) of this proposed
rule.
(8) Alternative OPPS Policies Considered
Alternatives to the OPPS changes we are proposing and the reasons
for our selected alternatives are discussed throughout this proposed
rule.
Alternatives considered for the enforcement instruction
for the supervision of outpatient therapeutic services in critical
access hospitals (CAHs) and certain small rural hospitals.
We considered whether to address enforcement of the direct
supervision requirement for outpatient therapeutic services in CAHs and
small, rural hospitals with fewer than 100 beds by extending the notice
of nonenforcement while we further develop our policies. There are
grounds for applying the same supervision requirements to CAHs as to
all other hospitals. One of these grounds is that hospital outpatient
services are furnished ``incident to'' physicians' services, and we
believe that the incident to rules apply equally to critical access and
other types of hospitals. We also believe that Medicare should purchase
the same basic level of quality and safe outpatient care for all
beneficiaries, whether from a CAH, a small rural hospital, or other
hospitals. At the same time, we acknowledge that in order to ensure the
same level of outpatient care is furnished in CAHs and small rural
hospitals as other hospitals, we need to continue the national
discussion about what constitutes the appropriate supervision for a
given service. We also need to acknowledge the challenges CAHs and
small, rural hospitals have in recruiting and retaining physicians and
qualified nonphysician practitioners.
Therefore, we are proposing to extend the notice of nonenforcement
for CAHs and small rural hospitals with fewer than 100 beds for CY 2018
and CY 2019, to give all parties time to submit specific services to be
considered for a reduced minimum supervision standard. We believe that
the policies in this proposed rule will address industry concerns while
maintaining an adequate level of safety and quality of care in the
hospital outpatient services that Medicare purchases.
Alternatives Considered for the Methodology for Assigning
Skin Substitutes to High or Low Cost Groups
We refer readers to section V.B.1.d. of this proposed rule for a
discussion of our proposal to assign any skin substitute product that
was assigned to the high cost group in CY 2017 to the high cost group
in CY 2018, regardless of whether the product's mean unit cost (MUC) or
the product's per day cost (PDC) exceeds or falls below the overall CY
2018 MUC or PDC threshold. We would continue to assign products that
exceed either the overall CY 2018 MUC or PDC threshold to the high cost
group. We also considered, but did not propose, retaining our
methodology from CY 2017 and assigning skin substitutes to the high
cost group based on whether an individual product's MUC or PDC exceeded
the overall CY 2018 MUC or PDC threshold based on calculations done for
either the proposed rule or final rule with comment period.
b. Estimated Effects of Proposed CY 2018 ASC Payment System Policies
Most ASC payment rates are calculated by multiplying the ASC
conversion factor by the ASC relative payment weight. As discussed
fully in section XII. of this proposed rule, we are proposing to set
the CY 2018 ASC relative payment weights by scaling the proposed CY
2018 OPPS relative payment weights by the ASC scalar of 0.9002. The
estimated effects of the proposed updated relative payment weights on
payment rates are varied and are reflected in the estimated payments
displayed in Tables 39 and 40 below.
Beginning in CY 2011, section 3401 of the Affordable Care Act
requires that the annual update to the ASC payment system (which
currently is the CPI-U) after application of any quality reporting
reduction be reduced by a productivity
[[Page 33717]]
adjustment. The Affordable Care Act defines the productivity adjustment
to be equal to the 10-year moving average of changes in annual economy-
wide private nonfarm business multifactor productivity (MFP) (as
projected by the Secretary for the 10-year period ending with the
applicable fiscal year, year, cost reporting period, or other annual
period). For ASCs that fail to meet their quality reporting
requirements, the CY 2018 payment determinations will be based on the
application of a 2.0 percentage points reduction to the annual update
factor, which currently is the CPI-U. We calculated the proposed CY
2018 ASC conversion factor by adjusting the CY 2017 ASC conversion
factor by 1.0004 to account for changes in the pre-floor and pre-
reclassified hospital wage indexes between CY 2017 and CY 2018 and by
applying the proposed CY 2018 MFP-adjusted CPI-U update factor of 1.9
percent (projected CPI-U update of 2.3 percent minus a proposed
projected productivity adjustment of 0.4 percentage point). The
proposed CY 2018 ASC conversion factor is $45.876.
(1) Limitations of Our Analysis
Presented here are the projected effects of the proposed changes
for CY 2018 on Medicare payment to ASCs. A key limitation of our
analysis is our inability to predict changes in ASC service-mix between
CY 2016 and CY 2018 with precision. We believe that the net effect on
Medicare expenditures resulting from the proposed CY 2018 changes will
be small in the aggregate for all ASCs. However, such changes may have
differential effects across surgical specialty groups as ASCs continue
to adjust to the payment rates based on the policies of the revised ASC
payment system. We are unable to accurately project such changes at a
disaggregated level. Clearly, individual ASCs will experience changes
in payment that differ from the aggregated estimated impacts presented
below.
(2) Estimated Effects of Proposed ASC Payment System Policies on ASCs
Some ASCs are multispecialty facilities that perform a wide range
of surgical procedures from excision of lesions to hernia repair to
cataract extraction; others focus on a single specialty and perform
only a limited range of surgical procedures, such as eye, digestive
system, or orthopedic procedures. The combined effect on an individual
ASC of the proposed update to the CY 2018 payments will depend on a
number of factors, including, but not limited to, the mix of services
the ASC provides, the volume of specific services provided by the ASC,
the percentage of its patients who are Medicare beneficiaries, and the
extent to which an ASC provides different services in the coming year.
The following discussion presents tables that display estimates of the
impact of the proposed CY 2018 updates to the ASC payment system on
Medicare payments to ASCs, assuming the same mix of services as
reflected in our CY 2016 claims data. Table 39 depicts the estimated
aggregate percent change in payment by surgical specialty or ancillary
items and services group by comparing estimated CY 2017 payments to
estimated CY 2018 payments, and Table 40 shows a comparison of
estimated CY 2017 payments to estimated CY 2018 payments for procedures
that we estimate will receive the most Medicare payment in CY 2017.
Table 39 shows the estimated effects on aggregate Medicare payments
under the ASC payment system by surgical specialty or ancillary items
and services group. We have aggregated the surgical HCPCS codes by
specialty group, grouped all HCPCS codes for covered ancillary items
and services into a single group, and then estimated the effect on
aggregated payment for surgical specialty and ancillary items and
services groups. The groups are sorted for display in descending order
by estimated Medicare program payment to ASCs. The following is an
explanation of the information presented in Table 39.
Column 1--Surgical Specialty or Ancillary Items and
Services Group indicates the surgical specialty into which ASC
procedures are grouped and the ancillary items and services group which
includes all HCPCS codes for covered ancillary items and services. To
group surgical procedures by surgical specialty, we used the CPT code
range definitions and Level II HCPCS codes and Category III CPT codes
as appropriate, to account for all surgical procedures to which the
Medicare program payments are attributed.
Column 2--Estimated CY 2017 ASC Payments were calculated
using CY 2016 ASC utilization (the most recent full year of ASC
utilization) and CY 2017 ASC payment rates. The surgical specialty and
ancillary items and services groups are displayed in descending order
based on estimated CY 2017 ASC payments.
Column 3--Estimated Proposed CY 2018 Percent Change is the
aggregate percentage increase or decrease in Medicare program payment
to ASCs for each surgical specialty or ancillary items and services
group that are attributable to proposed updates to ASC payment rates
for CY 2018 compared to CY 2017.
As seen in Table 39, for the six specialty groups that account for
the most ASC utilization and spending, we estimate that the update to
ASC payment rates for CY 2017 will result in a 2-percent increase in
aggregate payment amounts for eye and ocular adnexa procedures, a 3-
percent increase in aggregate payment amounts for digestive system
procedures, 2-percent increase in aggregate payment amounts for nervous
system procedures, a 4-percent increase in aggregate payment amounts
for musculoskeletal system procedures, a 1-percent increase in
aggregate payment amounts for genitourinary system procedures, and a 5-
percent increase in aggregate payment amounts for integumentary system
procedures.
Also displayed in Table 39 is a separate estimate of Medicare ASC
payments for the group of separately payable covered ancillary items
and services. The payment estimates for the covered surgical procedures
include the costs of packaged ancillary items and services. We estimate
that aggregate payments for these items and services would decrease by
43 percent for CY 2018.
[[Page 33718]]
Table 39.--Estimated Impact of the Proposed CY 2018 Update to the ASC
Payment System on Aggregate CY 2018 Medicare Program Payments by
Surgical Specialty or Ancillary Items and Services Group
------------------------------------------------------------------------
Estimated CY Estimated
2017 ASC Proposed CY
Surgical Specialty Group payments (in 2018 percent
millions) change
(1) (2) (3)
------------------------------------------------------------------------
Total................................... $4,460 2%
Eye and ocular adnexa................... 1,688 2
Digestive system........................ 852 3
Nervous system.......................... 849 2
Musculoskeletal system.................. 530 3
Genitourinary system.................... 186 1
Integumentary system.................... 141 5
Ancillary items and services............ 55 -43
------------------------------------------------------------------------
Table 40 below shows the estimated impact of the proposed updates
to the revised ASC payment system on aggregate ASC payments for
selected surgical procedures during CY 2018. The table displays 30 of
the procedures receiving the greatest estimated CY 2017 aggregate
Medicare payments to ASCs. The HCPCS codes are sorted in descending
order by estimated CY 2017 program payment.
Column 1--CPT/HCPCS code.
Column 2--Short Descriptor of the HCPCS code.
Column 3--Estimated CY 2017 ASC Payments were calculated
using CY 2016.
ASC utilization (the most recent full year of ASC utilization) and
the CY 2017 ASC payment rates. The estimated CY 2017 payments are
expressed in millions of dollars.
Column 4--Estimated CY 2018 Percent Change reflects the
percent differences between the estimated ASC payment for CY 2017 and
the estimated proposed payment for CY 2018 based on the proposed
update.
Table 40--Estimated Impact of the Proposed CY 2018 Update to the ADC Payment System on Aggregate Payments for
Selected Procedures
----------------------------------------------------------------------------------------------------------------
Estimated CY
2017 ASC Estimated CY
CPT/HCPCS code Short descriptor payment (in 2018 percent
millions) change
(1) (2)............................. (3) (4)
----------------------------------------------------------------------------------------------------------------
66984......................................... Cataract surg w/iol 1 stage..... $1,172 %2
45380......................................... Colonoscopy and biopsy.......... 216 3
43239......................................... Egd biopsy single/multiple...... 178 3
63685......................................... Insrt/redo spine n generator.... 151 -4
45385......................................... Colonoscopy w/lesion removal.... 146 3
63650......................................... Implant neuroelectrodes......... 118 3
64483......................................... Inj foramen epidural l/s........ 99 3
66982......................................... Cataract surgery complex........ 94 2
0191T......................................... Insert ant segment drain int.... 86 1
66821......................................... After cataract laser surgery.... 69 1
64635......................................... Destroy lumb/sac facet jnt...... 68 2
29827......................................... Arthroscop rotator cuff repr.... 61 3
64493......................................... Inj paravert f jnt l/s 1 lev.... 60 3
64590......................................... Insrt/redo pn/gastr stimul...... 50 -1
G0105......................................... Colorectal scrn; hi risk ind.... 45 3
62323......................................... Njx interlaminar lmbr/sc........ 45 4
45378......................................... Diagnostic colonoscopy.......... 44 3
G0121......................................... Colon ca scrn not hi rsk ind.... 42 3
64721......................................... Carpal tunnel surgery........... 34 2
15823......................................... Revision of upper eyelid........ 32 6
29881......................................... Knee arthroscopy/surgery........ 30 3
29880......................................... Knee arthroscopy/surgery........ 26 3
67042......................................... Vit for macular hole............ 25 2
28285......................................... Repair of hammertoe............. 24 3
52000......................................... Cystoscopy...................... 23 -1
26055......................................... Incise finger tendon sheath..... 23 2
43235......................................... Egd diagnostic brush wash....... 23 2
64561......................................... Implant neuroelectrodes......... 22 6
50590......................................... Fragmenting of kidney stone..... 21 2
67904......................................... Repair eyelid defect............ 20 1
----------------------------------------------------------------------------------------------------------------
[[Page 33719]]
(3) Estimated Effects of Proposed ASC Payment System Policies on
Beneficiaries
We estimate that the proposed CY 2018 update to the ASC payment
system would be generally positive for beneficiaries with respect to
the new procedures that we are proposing to add to the ASC list of
covered surgical procedures and for those that we are proposing to
designate as office-based for CY 2018. First, other than certain
preventive services where coinsurance and the Part B deductible is
waived to comply with sections 1833(a)(1) and (b) of the Act, the ASC
coinsurance rate for all procedures is 20 percent. This contrasts with
procedures performed in HOPDs under the OPPS, where the beneficiary is
responsible for copayments that range from 20 percent to 40 percent of
the procedure payment (other than for certain preventive services).
Second, in almost all cases, the ASC payment rates under the ASC
payment system are lower than payment rates for the same procedures
under the OPPS. Therefore, the beneficiary coinsurance amount under the
ASC payment system will almost always be less than the OPPS copayment
amount for the same services. (The only exceptions would be if the ASC
coinsurance amount exceeds the inpatient deductible. The statute
requires that copayment amounts under the OPPS not exceed the inpatient
deductible.) Beneficiary coinsurance for services migrating from
physicians' offices to ASCs may decrease or increase under the revised
ASC payment system, depending on the particular service and the
relative payment amounts under the MPFS compared to the ASC. However,
for those additional procedures that we are proposing to designate as
office-based in CY 2018, the beneficiary coinsurance amount under the
ASC payment system generally will be no greater than the beneficiary
coinsurance under the MPFS because the coinsurance under both payment
systems generally is 20 percent (except for certain preventive services
where the coinsurance is waived under both payment systems).
(4) Alternative ASC Payment Policies Considered
Alternatives to the ASC changes we are proposing and the reasons
for our selected alternatives are discussed throughout this proposed
rule.
c. Accounting Statements and Tables
As required by OMB Circular A-4 (available on the Office of
Management and Budget Web site at: https://www.whitehouse.gov/omb/circulars_a004_a-4#a), we have prepared two accounting statements to
illustrate the impacts of this proposed rule. The first accounting
statement, Table 41 below, illustrates the classification of
expenditures for the proposed CY 2018 estimated hospital OPPS incurred
benefit impacts associated with the proposed CY 2018 OPD fee schedule
increase, based on the 2017 Trustee's Report. The second accounting
statement, Table 42 below, illustrates the classification of
expenditures associated with the proposed 1.9 percent CY 2018 update to
the ASC payment system, based on the provisions of this proposed rule
and the baseline spending estimates for ASCs in the 2017 Trustee's
Report. Lastly, the tables classify most estimated impacts as
transfers.
Table 41--Accounting Statement: Proposed CY 2018 Estimated Hospital OPPS
Transfers From CY 2017 to CY 2018 Associated With the Proposed CY 2018
Hospital Outpatient OPD Fee Schedule Increase
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $897 million.
From Whom to Whom......................... Federal Government to
outpatient hospitals and
other providers who receive
payment under the hospital
OPPS.
Total................................. $897 million.
------------------------------------------------------------------------
Table 42--Accounting Statement: Classification of Estimated Transfers
From CY 2017 to CY 2018 as a Result of the Proposed CY 2018 Update to
the ASC Payment System
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $67 million.
From Whom to Whom......................... Federal Government to
Medicare Providers and
Suppliers.
Total................................. $67 million.
------------------------------------------------------------------------
d. Effects of Requirements for the Hospital OQR Program
(1) Background
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79874), for the previously estimated effects of changes
to the Hospital OQR Program for the CY 2018, CY 2019, and CY 2020
payment determinations. Of the 3,228 hospitals that met eligibility
requirements for the CY 2017 payment determination, we determined that
87 hospitals did not meet the requirements to receive the full OPD fee
schedule increase factor. Most of these hospitals (66 of the 87), chose
not to participate in the Hospital OQR Program for the CY 2017 payment
determination. We estimate that approximately 100 hospitals will not
receive the full OPD fee schedule increase factor for the CY 2018
payment determination and subsequent years.
In section XIII.B.4.c.(1) and (2) of this proposed rule, we are
proposing to remove: (1) OP-21: Median Time to Pain Management for Long
Bone Fracture; and (2) OP-26: Hospital Outpatient Volume Data on
Selected Outpatient Surgical Procedures beginning with the CY 2020
payment determination and for subsequent years. In section
XIII.B.4.c.(3) through (6) of this proposed rule, we are proposing to
remove: (1) OP-1: Median Time to Fibrinolysis; (2) OP-4: Aspirin at
Arrival; (3) OP-20: Door to Diagnostic Evaluation by a Qualified
Medical Professional; and (4) OP-25: Safe Surgery Checklist beginning
with the CY 2021 payment determination and for subsequent years. We
expect these proposals to reduce the burden of reporting for the
Hospital OQR Program, as discussed below.
In this proposed rule, we are proposing to publicly report OP-18c
using data from patient encounters beginning with the third quarter of
2017. We are also proposing to delay OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-based measures beginning with the CY 2020
payment determination (CY 2018 data collection) and until further
notice in future rulemaking. In addition, in this proposed rule,
beginning with the CY 2020 payment determination, we are proposing: (1)
To codify at Sec. 419.46(e) our previously finalized process for
targeting hospitals for validation of chart-abstracted measures; (2) to
formalize the educational review process and use it to correct
incorrect validation results for chart-abstracted measures; (3) to
change the NOP submission deadlines such that hospitals are required to
submit the NOP any time prior to registering on the QualityNet Web site
and to make conforming revisions at 42 CFR 419.46(a); (4) to align the
first quarter for which hospitals must submit data for all hospitals
that did not participate in the
[[Page 33720]]
previous year's Hospital OQR Program, and make corresponding revisions
at 42 CFR 419.46(c)(3); and (5) to align the naming of the
Extraordinary Circumstances Exceptions (ECE) policy and make conforming
changes to the CFR. We do not believe that these proposed changes would
affect our burden estimates, as further discussed below.
(2) Estimated Burden Due to Proposal to Delay OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures Beginning with the CY 2020
Payment Determination
As described in section XIII.B.5. of this proposed rule, we are
proposing to delay OP-37a-e: Outpatient and Ambulatory Surgery Consumer
Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based
measures beginning with the CY 2020 payment determination (CY 2018 data
collection). As stated in the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79863), the information collection requirements
associated with the five OAS CAHPS Survey-based measures (OP-37a, OP-
37b, OP- 37c, OP-37d, and OP-37e) are currently approved under OMB
Control Number 0938-1240. For this reason, in the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79863), we did not provide an
independent estimate of the burden associated with OAS CAHPS Survey
based measures for the Hospital OQR Program. Similarly, our proposal to
delay reporting for these measures does not influence our current
burden estimates.
(3) Estimated Burden Due to Proposal to Publicly Report OP-18c: Median
Time from Emergency Department Arrival to Emergency Department
Departure for Discharged Emergency Department Patients--Psychiatric/
Mental Health Patients
In section XIII.B.10.b. of this proposed rule, we are proposing to
publicly report 18c: Median Time from Emergency Department Arrival to
Emergency Department Departure for Discharged Emergency Department
Patients--Psychiatric/Mental Health Patients beginning with patient
encounters from the third quarter of 2017. As noted in that section,
the data required for public reporting of OP-18c is already collected
as part of the existing Hospital OQR Program requirements. Accordingly,
we do not expect this proposal to affect burden.
(4) Estimated Impact of Proposals for the CY 2020 Payment Determination
and Subsequent Years
(a) Impact of Proposed Measure Removals
In section XIII.B.4.c.(1) and (2) of this proposed rule, we are
proposing to remove one chart-abstracted measure (OP-21: Median Time to
Pain Management for Long Bone Fracture) and one web-based measure (OP-
26: Hospital Outpatient Volume Data on Selected Outpatient Surgical
Procedures) for the CY 2020 payment determination and subsequent years.
As described in detail in section XVII.B. of this proposed rule, we
expect these proposals to reduce burden by 152,680 hours and $5.6
million for the CY 2020 payment determination for the Hospital OQR
Program.
(b) Impact of Updates to Previously Finalized Validation Procedures and
the Educational Review Process
In section XIII.D.7.a. of this proposed rule, we provide
clarification on our procedures for validation of chart-abstracted
measures to note that the 50 poorest performing outlier hospitals will
be targeted for validation. We do not expect this clarification to
influence burden, as it does not alter the number of hospitals selected
for validation or the requirements for those hospitals that are
selected.
In addition, in section XIII.D.7.c. of this proposed rule, we are
proposing to formalize the process of allowing hospitals to use an
educational review process to correct incorrect validation results for
the first three quarters of validation for chart-abstracted measures.
Additionally, we are proposing to update the process to specify that if
the results of an educational review indicate that we incorrectly
scored a hospital, the corrected score would be used to compute the
hospital's final validation score whether or not the hospital submits a
reconsideration request. Under this proposal, the educational review
request process remains the same for the CY 2020 payment determination
and subsequent years, except that revised scores identified through an
educational review would be used to correct a hospital's validation
score. As stated in the CY 2014 OPPS/ASC final rule with comment period
(78 FR 75171), we believe there is a burden associated with successful
participation in the Hospital OQR Program, where successful
participation results in a full annual payment update (APU) for a
particular payment determination. This burden would include, but would
not be limited to, maintaining familiarity with the Hospital OQR
Program requirements, which includes checking feedback reports to
indicate a facility's current status or performance. The overall
administrative burden, which we believe includes the educational review
process, is estimated at 42 hours per hospital (78 FR 75171) and would
not be changed by the proposal to use revised scores identified through
an educational review to correct a hospital's validation score.
(c) Impact of Proposed Updates to NOP Submission Deadlines
In section XIII.C.2. of this proposed rule, we are proposing to
revise the NOP submission deadlines such that hospitals are required to
submit the NOP any time prior to registering on the QualityNet Web
site. While we expect this proposal to make it generally easier for
hospitals to comply with the Hospital OQR Program requirements by
extending the NOP deadline, we anticipate a negligible effect on the
time and cost of completing the participation requirements. As a
result, the proposal to revise the NOP submission deadlines does not
impact our burden estimates.
(d) Burden Due to Proposal To Align the First Quarter for Which
Hospitals Must Submit Data for All Hospitals That Did Not Participate
in the Previous Year's Hospital OQR Program
In section XIII.D.1. of this proposed rule, we are proposing to
align the timeline specifying the initial quarter for which hospitals
must submit data for all hospitals that did not participate in the
previous year's Hospital OQR Program, rather than specifying different
timelines for hospitals with Medicare acceptance dates before versus
after January 1 of the year prior to an affected annual payment update.
Although this proposal alters the timeline for hospitals to begin
submitting data for the Hospital OQR Program, it does not alter program
requirements. As a result, we do not anticipate that this proposal will
influence burden.
(e) Impact of Proposed Updates to the Previously Finalized ECE Policy
In section XIII.D.8. of this proposed rule, we discuss our intent
to align the naming of this exception policy and update 42 CFR
419.46(d) to reflect our current ECE policies. We are also clarifying
the timing of CMS' response to ECE requests. Because we are not seeking
any new or additional information in our ECE proposals, we believe the
updates will have no effect on burden for hospitals.
[[Page 33721]]
(5) Estimated Impact of Proposals for the CY 2021 Payment Determination
and Subsequent Years
In section XIII.B.4.c. of this proposed rule, we are proposing to
remove three chart-abstracted measures (OP-1: Median Time to
Fibrinolysis, OP-4: Aspirin at Arrival, and OP-20: Door to Diagnostic
Evaluation by a Qualified Medical Professional) and one web-based
measure (OP-25: Safe Surgery Checklist Use) for the CY 2021 payment
determination and subsequent years. As described in detail in section
XVII.B. of this proposed rule, we expect the removal of one web-based
measure and three chart-abstracted measures to reduce burden by $11.1
million and 304,810 hours for the CY 2021 payment determination.
We refer readers to section XVII.B. of this proposed rule
(information collection requirements) for a detailed discussion of the
burden of the requirements for submitting data to the Hospital OQR
Program.
e. Effects of Proposed Requirements for the ASCQR Program
1. Background
In section XIV. of this proposed rule, we discuss our proposals to
adopt policies affecting the ASCQR Program. For the CY 2017 payment
determination, of the 3,937 ASCs that met eligibility requirements for
the ASCQR Program, 209 ASCs did not meet the requirements to receive
the full annual payment update. We note that, in the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79874), we used the CY 2016
payment determination numbers as a baseline, and estimated that
approximately 200 ASCs will not receive the full annual payment update
in CY 2018 due to failure to meet the ASCQR Program requirements (CY
2017 and CY 2018 payment determination information were not yet
available).
In this proposed rule, we are also proposing: (1) To delay ASC-15a-
e: OAS CAHPS survey-based measures beginning with the CY 2020 payment
determination (CY 2018 data collection); (2) to expand the CMS online
tool to also allow for batch submission beginning with data submitted
during CY 2018 and to make corresponding revisions to the CFR; and, (3)
to align the naming of the Extraordinary Circumstances Exceptions (ECE)
policy beginning with CY 2018 and to make conforming changes to the
CFR. As discussed below, we do not expect these proposals to influence
our burden estimates.
2. Estimated Burden of ASCQR Program Proposals Beginning With CY 2018
As described in section XIV.B.4. of this proposed rule, we are
proposing to delay ASC-15a-e: Outpatient and Ambulatory Surgery
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS)
Survey-based measures beginning with the CY 2020 payment determination
(CY 2018 data collection). As described in the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79864), the information collection
requirements associated with the five OAS CAHPS Survey based measures
(ASC-15a, ASC-15b, ASC-15c, ASC-15d, and ASC-15e) are currently
approved under OMB Control Number 0938-1240. For this reason, we did
not provide an independent estimate of the burden associated with OAS
CAHPS Survey administration for the ASCQR Program in the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79864). Similarly, our
proposal to delay reporting on these measures does not affect our
current burden estimates.
For CY 2018, we are making two additional proposals. First, in
section XIV.D.3.b. of this proposed rule, we are proposing to expand
the CMS online tool to also allow for batch submission beginning with
data submitted during CY 2018 and to make corresponding revisions to
the CFR. Second, in section XIV.D.6. of this proposed rule, we discuss
our intent to align the naming of this exception policy and update 42
CFR 416.310(d) to reflect our current ECE policies. We are also
clarifying the timing of CMS' response to ECE requests. Because neither
of these proposals changes the reporting requirements of the ASCQR
Program nor require ASCs to submit any new or additional information,
we believe the updates will have no effect on burden for ASCs.
3. Estimated Burden of ASCQR Program Proposals for the CY 2019 Payment
Determination
In section XIV.B.3.b. of this proposed rule, we are proposing to
remove one claims-based measure (ASC-5: Prophylactic Intravenous (IV)
Antibiotic Timing \130\) and two measures collected via a CMS online
data submission tool (ASC-6: Safe Surgery Checklist Use and ASC-7: ASC
Facility Volume Data on Selected ASC Surgical Procedures) from the
ASCQR Program measure set beginning with the CY 2019 payment
determination. As discussed in section XVII.C.4. of this proposed rule,
we estimate the proposals to remove ASC-6 and ASC-7 from the ASCQR
Program measure set would reduce ASCs' data collection and submission
burden by approximately 657 hours (3,937 ASCs x 0.167 hours per ASC)
and $24,033 (657 hours x $36.58 per hour) per measure, or a total
burden reduction of 1,314 (657 hours x 2 measures) and $48,066 (1,314
hours x $36.58 per hour) across all ASCs.
---------------------------------------------------------------------------
\130\ As discussed in section XVII.C.4. of this proposed rule,
data for ASC-5 is submitted via CMS claims using Quality Data Codes,
which impose only a nominal burden on providers because these claims
are already submitted for the purposes of payment. We therefore
estimate a nominal reduction in burden associated with our proposal
to remove the ASC-5 measure from the ASCQR Program measure set
beginning with the CY 2019 payment determination.
---------------------------------------------------------------------------
We are not proposing to add any quality measures to the ASCQR
measure set for the CY 2020 payment determination, and we do not
believe that the other measures we previously adopted would cause any
additional ASCs to fail to meet the ASCQR Program requirements. (We
refer readers to section XIV.B.5. of this proposed rule for a list of
these measures.) Therefore, we do not believe that these proposals
would increase the number of ASCs that do not receive a full annual
payment update for the CY 2020 payment determination.
4. Estimated Burden of ASCQR Program Proposals for the CY 2021 Payment
Determination
For the CY 2021 payment determination and subsequent years, we are
making one new proposal. In section XIV.B.6.a. of this proposed rule,
we are proposing to adopt one measure collected via a CMS online data
submission tool, ASC-16: Toxic Anterior Segment Syndrome. As discussed
in section XXI.C.5. of this proposed rule, we estimate a data
collection and submission burden of approximately 0.25 hours per ASC
for reporting data for the proposed ASC-16 measure. This results in a
total estimated burden of 984 hours (3,937 ASCs x 1 case per ASC x 0.25
hours per case) and $36,004 (984 hours x $36.58 per hour) for the
proposed ASC-16 measure across all ASCs.
5. Estimated Burden of ASCQR Program Proposals for the CY 2022 Payment
Determination
In sections XIV.B.6.b. and c. of this proposed rule, we are
proposing to add two new measures collected via claims to the ASCQR
program measure set for the CY 2022 payment determination: (1) ASC-17:
Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures;
and (2) ASC-18: Hospital Visits after Urology Ambulatory
[[Page 33722]]
Surgical Center Procedures. As discussed in sections XIV.B.6.b. and c.
of this proposed rule, data used to assess performance under these
measures is collected via Part A and Part B Medicare administrative
claims and Medicare enrollment data and therefore does not require
facilities to report any additional data. Because these measures do not
require facilities to submit any additional data, we do not believe
there is any additional burden associated with these proposals.
We refer readers to the information collection requirements in
section XVII.C. of this proposed rule for a detailed discussion of the
financial and hourly burden of the ASCQR Program's current and proposed
requirements.
We are inviting public comment on the burden associated with these
proposals.
B. Regulatory Flexibility Act (RFA) Analysis
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
most hospitals, ASCs and CMHCs are small entities as that term is used
in the RFA. For purposes of the RFA, most hospitals are considered
small businesses according to the Small Business Administration's size
standards with total revenues of $38.5 million or less in any single
year or by the hospital's not-for-profit status. Most ASCs and most
CMHCs are considered small businesses with total revenues of $15
million or less in any single year. For details, see the Small Business
Administration's ``Table of Small Business Size Standards'' at https://www.sba.gov/content/table-small-business-size-standards.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has 100 or fewer beds. We estimate that this
proposed rule would increase payments to small rural hospitals by less
than 2 percent; therefore, it should not have a significant impact on
approximately 626 small rural hospitals.
The analysis above, together with the remainder of this preamble,
provides a regulatory flexibility analysis and a regulatory impact
analysis.
C. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $148 million. This proposed rule does
not mandate any requirements for State, local, or tribal governments,
or for the private sector.
D. Reducing Regulation and Controlling Regulatory Costs
Executive Order 13771, titled ``Reducing Regulation and Controlling
Regulatory Costs,'' was issued on January 30, 2017. It has been
determined that this proposed rule is a transfer rule that does not
impose more than de minimis costs as described above and thus is not a
regulatory action for the purposes of Executive Order 13771.
E. Conclusion
The changes we are proposing to make in this proposed rule would
affect all classes of hospitals paid under the OPPS and will affect
both CMHCs and ASCs. We estimate that most classes of hospitals paid
under the OPPS would experience a modest increase or a minimal decrease
in payment for services furnished under the OPPS in CY 2018. Table 38
demonstrates the estimated distributional impact of the OPPS budget
neutrality requirements that would result in a 1.9 percent increase in
payments for all services paid under the OPPS in CY 2018, after
considering all of the proposed changes to APC reconfiguration and
recalibration, as well as the proposed OPD fee schedule increase
factor, proposed wage index changes, including the proposed frontier
State wage index adjustment, proposed estimated payment for outliers,
and proposed changes to the pass-through payment estimate. However,
some classes of providers that are paid under the OPPS would experience
more significant gains or losses in OPPS payments in CY 2018.
The proposed updates to the ASC payment system for CY 2018 would
affect each of the approximately 5,500 ASCs currently approved for
participation in the Medicare program. The effect on an individual ASC
will depend on its mix of patients, the proportion of the ASC's
patients who are Medicare beneficiaries, the degree to which the
payments for the procedures offered by the ASC are changed under the
ASC payment system, and the extent to which the ASC provides a
different set of procedures in the coming year. Table 39 demonstrates
the estimated distributional impact among ASC surgical specialties of
the proposed MFP-adjusted CPI-U update factor of 1.9 percent for CY
2018.
XX. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct costs on State and local
governments, preempts State law, or otherwise has Federalism
implications. We have examined the OPPS and ASC provisions included in
this proposed rule in accordance with Executive Order 13132,
Federalism, and have determined that they will not have a substantial
direct effect on State, local or tribal governments, preempt State law,
or otherwise have a Federalism implication. As reflected in Table 38 of
this proposed rule, we estimate that OPPS payments to governmental
hospitals (including State and local governmental hospitals) would
increase by 1.9 percent under this proposed rule. While we do not know
the number of ASCs or CMHCs with government ownership, we anticipate
that it is small. The analyses we have provided in this section of this
proposed rule, in conjunction with the remainder of this document,
demonstrate that this proposed rule is consistent with the regulatory
philosophy and principles identified in Executive Order 12866, the RFA,
and section 1102(b) of the Act.
This proposed rule would affect payments to a substantial number of
small rural hospitals and a small number of rural ASCs, as well as
other classes of hospitals, CMHCs, and ASCs, and some effects may be
significant.
List of Subjects
42 CFR Part 416
Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 419
Hospitals, Medicare, Reporting and recordkeeping requirements.
For reasons stated in the preamble of this document, the Centers
for Medicare & Medicaid Services is proposing to amend 42 CFR chapter
IV as set forth below:
[[Page 33723]]
PART 416--AMBULATORY SURGICAL SERVICES
0
1. The authority citation for part 416 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Section 416.310 is amended by revising paragraphs (c)(1)(i) and (d)
to read as follows:
Sec. 416.310 Data collection and submission requirements under the
ASCQR Program.
* * * * *
(c) * * *
(1) * * *
(i) QualityNet account for web-based measures. ASCs, and any agents
submitting data on an ASC's behalf, must maintain a QualityNet account
in order to submit quality measure data to the QualityNet Web site for
all web-based measures submitted via a CMS online data submission tool.
A QualityNet security administrator is necessary to set up such an
account for the purpose of submitting this information.
* * * * *
(d) Extraordinary circumstances exceptions. CMS may grant an
exception with respect to quality data reporting requirements in the
event of extraordinary circumstances beyond the control of the
hospital, such as when an act of nature affects an entire region or if
CMS determines that a systemic problem with one of its data collection
systems directly affected the ability of the hospitals to submit data.
CMS may grant an exception as follows:
(1) Upon request of the ASC. Specific requirements for submission
of a request for an exception are available on the QualityNet Web site;
or
(2) At the discretion of CMS. CMS may grant exceptions to ASCs that
have not requested them when CMS determines that an extraordinary
circumstance has occurred.
* * * * *
PART 419--PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES
0
3. The authority citation for part 419 continues to read as follows:
Authority: Secs. 1102, 1833(t), and 1871 of the Social Security
Act (42 U.S.C. 1302, 1395l(t), and 1395hh).
0
4. Section 419.32 is amended by adding paragraph (b)(1)(iv)(B)(9) to
read as follows:
Sec. 419.32 Calculation of prospective payment rates for hospital
outpatient services.
* * * * *
(b) * * *
(1) * * *
(iv) * * *
(B) * * *
(9) For calendar year 2018, a multiproductivity adjustment (as
determined by CMS) and 0.75 percentage point.
* * * * *
0
5. Section 419.46 is amended by--
0
a. Amending paragraph (a)(1) by removing the phrase ``Web site'' and
adding in its place the term ``website'';
0
b. Revising paragraph (a)(3);
0
c. Amending paragraphs (b) and (c)(2) by removing the phrase ``Web
site'' and adding in its place the term ``website'';
0
d. Revising paragraphs (c)(3)(i) and (ii) and (d);
0
e. Adding paragraph (e)(3); and
0
f. Amending paragraphs (f)(1) and (g)(2) by removing the phrase ``Web
site'' and adding in its place the term ``website'' wherever it
appears.
The revisions and additions read as follow:
Sec. 419.46 Participation, data submission, and validation
requirements under the Hospital Outpatient Quality Reporting (OQR)
Program.
(a) * * *
(3) Complete and submit an online participation form available at
the QualityNet.org Web site if this form has not been previously
completed, if a hospital has previously withdrawn, or if the hospital
acquires a new CMS Certification Number (CCN). For Hospital OQR Program
purposes, hospitals that share the same CCN are required to complete a
single online participation form. Once a hospital has submitted a
participation form, it is considered to be an active Hospital OQR
Program participant until such time as it submits a withdrawal form to
CMS or no longer has an effective Medicare provider agreement.
Hospitals must submit the online participation form at any time prior
to registering on the QualityNet Web site.
* * * * *
(c) * * *
(3) * * *
(i) Hospitals that did not participate in the previous year's
Hospital OQR Program must initially submit data beginning with
encounters occurring during the first calendar quarter of the year
prior to the affected annual payment update.
(ii) Hospitals that did not participate in the previous year's
Hospital OQR Program must follow data submission deadlines as specified
in paragraph (c)(2) of this section.
* * * * *
(d) Exception. CMS may grant an exception to one or more data
submission deadlines and requirements in the event of extraordinary
circumstances beyond the control of the hospital, such as when an act
of nature affects an entire region or locale or a systemic problem with
one of CMS' data collection systems directly or indirectly affects data
submission. CMS may grant an exception as follows:
(1) Upon request by the hospital. Specific requirements for
submission of a request for an exception are available on the
QualityNet Web site.
(2) At the discretion of CMS. CMS may grant exceptions to hospitals
that have not requested them when CMS determines that an extraordinary
circumstance has occurred.
(e) * * *
(3) CMS will select a random sample of 450 hospitals for validation
purposes, and will select an additional 50 hospitals for validation
purposes based on the following criteria:
(i) The hospital fails the validation requirement that applies to
the previous year's payment determination; or
(ii) The hospital has an outlier value for a measure based on the
data it submits. An ``outlier value'' is a measure value that is
greater than 5 standard deviations from the mean of the measure values
for other hospitals, and indicates a poor score.
* * * * *
0
6. Section 419.71 is added to read as follows:
Sec. 419.71 Payment reduction for certain X-ray imaging services.
(a) Definition. For purposes of this section, the term ``computed
radiography technology'' means cassette-based imaging which utilizes an
imaging plate to create the image involved.
(b) Payment reduction for film X-ray imaging services. For an
imaging service that is an X-ray taken using film and that is furnished
during 2017 or a subsequent year, the payment amount for such service
(including the X-ray component of a packaged service) is reduced by 20
percent.
(c) Payment reduction for computed radiography imaging services.
The payment amount for an imaging service that is an X-ray taken using
computed radiography technology (including the X-ray component of a
packaged service) is reduced by--
(1) 7 percent, for such services furnished in CY 2018, 2019, 2020,
2021, or 2022.
[[Page 33724]]
(2) 10 percent, for such services furnished in CY 2023 or a
subsequent calendar year.
(d) Application without regard to budget neutrality. The reductions
taken under this section are not considered adjustments under section
1833(t)(2)(E) of the Act and are not implemented in a budget neutral
manner.
Dated: June 28, 2017.
Seema Verma,
Administrator, Centers for Medicare and Medicaid Services.
Dated: June 30, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-14883 Filed 7-13-17; 4:15 pm]
BILLING CODE 4120-01-P