[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]]
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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.
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SUMMARY: This proposed rule would revise the Medicare hospital
outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for 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 http://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 [email protected].
Ambulatory Surgical Center (ASC) Payment System, contact Elisabeth
Daniel at 410-786-0237 or via email [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia at 410-786-7236 or via email [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Vinitha Meyyur at 410-786-8819 or via email
[email protected].
Blood and Blood Products, contact Josh McFeeters at 410-786-9732 or
via email [email protected].
Cancer Hospital Payments, contact Scott Talaga at 410-786-4142 or
via email [email protected].
Care Management Services, contact Scott Talaga at 410-786-4142 or
via email [email protected].
CPT Codes, contact Marjorie Baldo at 410-786-4617 or via email
[email protected].
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver at 410-786-6719 or via email [email protected].
Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
contact Twi Jackson at 410-786-1159 or via email
[email protected].
Comprehensive APCs (C-APCs), contact Lela Strong at 410-786-3213 or
via email [email protected].
Hospital Outpatient Quality Reporting (OQR) Program Administration,
Validation, and Reconsideration Issues, contact Anita Bhatia at 410-
786-7236 or via email [email protected].
Hospital Outpatient Quality Reporting (OQR) Program Measures,
contact Vinitha Meyyur at 410-786-8819 or via email
[email protected].
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Twi Jackson at 410-786-1159 or via email
[email protected].
Inpatient Only (IPO) Procedures List, contact Lela Strong at 410-
786-3213 or via email [email protected].
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga at
410-786-4142 or via email [email protected].
No Cost/Full Credit and Partial Credit Devices, contact Twi Jackson
at 410-786-1159 or via email [email protected].
OPPS Brachytherapy, contact Scott Talaga at 410-786-4142 or via
email [email protected].
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
Payments, and Wage Index), contact Erick Chuang
[[Page 33559]]
at 410-786-1816 or via email [email protected] or contact
Elisabeth Daniel at 410-786-0237 or via email
[email protected].
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Elisabeth Daniel at 410-786-0237 or via email
[email protected].
OPPS New Technology Procedures/Services, contact the New Technology
APC email at [email protected].
OPPS Exceptions to the 2 Times Rule, contact Marjorie Baldo at 410-
786-4617 or via email [email protected].
OPPS Packaged Items/Services, contact Elisabeth Daniel at 410-786-
0237 or via email [email protected].
OPPS Pass-Through Devices, contact the Device Pass-Through email at
[email protected].
OPPS Status Indicators (SI) and Comment Indicators (CI), contact
Marina Kushnirova at 410-786-2682 or via email
[email protected].
Partial Hospitalization Program (PHP) and Community Mental Health
Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
[email protected].
Potential Revisions to the Laboratory Date of Service Policy,
contact Rasheeda Johnson at 410-786-3434 or via email
[email protected] or Susan Janeczko at 410-786-4529 or via
email [email protected].
Rural Hospital Payments, contact Josh McFeeters at 410-786-9732 or
via email [email protected].
Skin Substitutes, contact Josh McFeeters at 410-786-9732 or via
email [email protected].
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 [email protected].
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://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/index.html. The Addenda relating
to the ASC payment system are available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
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
[[Page 33561]]
(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
[[Page 33562]]
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
[[Page 33563]]
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
[[Page 33564]]
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
[[Page 33568]]
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: http://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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
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
(http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) provides an accounting of claims used in the
development of the proposed payment rates. That accounting provides
additional detail regarding the number of claims derived at each stage
of the process. In addition, 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,
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes information about obtaining
the ``OPPS Limited Data Set,'' which now includes the additional
variables previously available only in the OPPS Identifiable Data Set,
including ICD-10-CM diagnosis codes and revenue code payment amounts.
This file is derived from the CY 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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/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 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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. 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/index.html.
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
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/index.html. 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: http://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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section. In addition, CMS is amenable to meeting with
applicants or potential applicants to discuss research trial design in
advance of any device pass-through application or to discuss
application criteria, including the substantial clinical improvement
criterion.
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 [email protected]. Additional information
can be submitted prior to issuance of an OPPS/ASC proposed rule or as a
public comment in response to an issued OPPS/ASC proposed rule. Device
offset percentages will be set in each year's final rule.
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
The pass-through application and review process for drugs and
biologicals is described on the CMS Web site at: http://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 http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html a file that contains the APC offset
amounts that will be used for that year for purposes of both evaluating
cost significance for candidate pass-through 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\
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\14\ Medicare Payment Advisory Committee. June 2005 Report to
the Congress. Chapter 6: Payment for pharmacy handling costs in
hospital outpatient departments. Available at: http://www.medpac.gov/docs/default-source/reports/June05_ch6.pdf?sfvrsn=0.
---------------------------------------------------------------------------
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
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)).
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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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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: http://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:
http://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.
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\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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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/index.html.
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/index.html.
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/index.html.
[[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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
We announce annually, in the proposed rule updating the
ASC and OPPS payment rates for the following calendar year, a list of
all requests to establish new NTIOL classes accepted for review during
the calendar year in which the proposal is published. In accordance
with section 141(b)(3) of Public Law 103-432 and our regulations at 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:
http://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\ http://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''. http://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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
\31\ OP-26 Measure Information Form. Retrieved from: http://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
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\33\ eCQI Resource Center: https://ecqi.healthit.gov/eh/ecqms-2016-reporting-period/fibrinolytic-therapy-received-within-30-minutes-hospital-arrival.
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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.
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\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: http://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
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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\
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\36\ Hospital OQR Program ED Throughput Measures Information
Form: http://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
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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).
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\37\ Hospital OQR Program ED Throughput Measures Information
Form: http://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FSpecsManualTemplate&cid=1228775748170.
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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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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.
http://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:
Retrieved from: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228764927987.
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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:
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1228758729356.
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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
interval report. Detail at: http://www.qualityreportingcenter.com/wp-content/uploads/2017/01/OQR-CY18-Validation-Webinar.508.2.pdf.
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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.
---------------------------------------------------------------------------
\49\ NQF. ``NQF-Endorsed Measures for Surgical Procedures''.
Technical Report. Available at: http://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.
---------------------------------------------------------------------------
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: http://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.
---------------------------------------------------------------------------
\56\ National Quality Forum. 2015 Measures Under Consideration
List. National Quality Forum, Dec. 2016. Available at: http://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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\59\ ASC Quality Collaboration. ``ASC Quality Collaboration.''
Available at: http://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.
---------------------------------------------------------------------------
[[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: http://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: http://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: http://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: http://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.
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\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.
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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
[[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.
---------------------------------------------------------------------------
\75\ National Quality Forum. ``MAP 2017 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: http://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: http://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: http://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: http://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: http://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.
---------------------------------------------------------------------------
\92\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
---------------------------------------------------------------------------
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: http://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
---------------------------------------------------------------------------
(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: http://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: http://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: http://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\ http://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: http://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:
http://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\
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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: http://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: http://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\ http://www.bls.gov/bls/infohome.htm.
\121\ http://www.bls.gov/bls/infohome.htm.
\122\ BLS Occupational Employment Statistics; May 2016.
Retrieved from: https://www.bls.gov/oes/current/oes292071.htm.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\124\ http://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm.
\125\ http://www.bls.gov/bls/infohome.htm.
\126\ http://www.bls.gov/bls/infohome.htm.
\127\ BLS Occupational Employment Statistics; May 2016.
Retrieved from: https://www.bls.gov/oes/current/oes292071.htm.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\128\ https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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:
[email protected].
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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. 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 http://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