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Start Preamble Start Printed Page 63458 Centers for Medicare & how can i get a prescription for levitra. Medicaid Services (CMS), Department of Health and Human Services (HHS). Final rule how can i get a prescription for levitra with comment period.

This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for Calendar Year (CY) 2022 based on our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program, updates Hospital Price Transparency requirements, and updates and refines the design of the how can i get a prescription for levitra Radiation Oncology Model.

Effective date. The provisions of the final rule with comment are effective January 1, 2022. Comment period how can i get a prescription for levitra.

To be assured consideration, comments on the payment classifications assigned to the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes in this final rule with comment period (CMS-1753-FC) must be received at one of the addresses provided in the ADDRESSES section no later than 5 p.m. EST on December 2, 2021. In commenting, please refer to how can i get a prescription for levitra file code CMS-1753-FC.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed). 1 how can i get a prescription for levitra. Electronically.

You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit how can i get a prescription for levitra a comment” instructions. 2.

By regular mail. You may mail written comments to the following how can i get a prescription for levitra address ONLY. Centers for Medicare &.

Medicaid Services, Department of Health and Human Services, Attention. CMS-1753-FC, P.O how can i get a prescription for levitra. Box 8010, Baltimore, MD 21244-1810.

Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail.

You may send written comments to the following address ONLY. Centers for Medicare &. Medicaid Services, Department of Health and Human Services, Attention.

CMS-1753-FC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. Start Further Info Marjorie.Baldo@cms.hhs.gov or at 410-786-4617.

Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at APCPanel@cms.hhs.gov. Ambulatory Surgical Center (ASC) Payment System, contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov or Mitali Dayal via email at Mitali.Dayal2@cms.hhs.gov. Ambulatory Surgical Center Quality Reporting (ASCQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email at Anita.Bhatia@cms.hhs.gov.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Cyra Duncan via email Cyra.Duncan@cms.hhs.gov. Blood and Blood Products, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov. Cancer Hospital Payments, contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov.

CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email at Chuck.Braver@cms.hhs.gov. Comment Solicitation on Temporary Policies for the PHE for erectile dysfunction treatment, contact Emily Yoder via email at Emily.Yoder@cms.hhs.gov or Abigail Cesnik via email at Abigail.Cesnik@cms.hhs.gov. Composite APCs (Low Dose Brachytherapy and Multiple Imaging), contact Au'Sha Washington via email at AuSha.Washington@cms.hhs.gov.

Comprehensive APCs (C-APCs), contact Mitali Dayal via email at Mitali.Dayal2@cms.hhs.gov. Hospital Inpatient Quality Reporting Program—Administration Issues, contact Julia Venanzi, julia.venanzi@cms.hhs.gov. Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Shaili Patel via email Shaili.Patel@cms.hhs.gov.

Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Janis Grady via email Janis.Grady@cms.hhs.gov. Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Allison Bramlett via email at Allison.Bramlett@cms.hhs.gov, or Emily Yoder via email at Emily.Yoder@cms.hhs.gov. Hospital Price Transparency, contact the Hospital Price Transparency email box at PriceTransparencyHospitalCharges@cms.hhs.gov.

Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via email at Ausha.Washington@cms.hhs.gov , or Allison Bramlett at Allison.Bramlett@cms.hhs.gov , or Abigail Cesnik at Abigail.Cesnik@cms.hhs.gov. Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2022 and Subsequent Years (2-Midnight Rule), contact Abigail Cesnik via email at Abigail.Cesnik@cms.hhs.gov. New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov.

No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov. OPPS Brachytherapy, contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov. OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact Erick Chuang via email at Erick.Chuang@cms.hhs.gov, or Scott Talaga via email at Scott.Talaga@cms.hhs.gov, or Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov.

OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov, or Gil Ngan via email at Gil.Ngan@cms.hhs.gov, or Cory Duke via email at Cory.Duke@cms.hhs.gov, or Au'Sha Washington via email at Ausha.Washington@cms.hhs.gov. OPPS New Technology Procedures/Services, contact the New Technology Start Printed Page 63459 APC mailbox at NewTechAPCapplications@cms.hhs.gov. OPPS Packaged Items/Services, contact Mitali Dayal via email at Mitali.Dayal2@cms.hhs.gov or Cory Duke via email at Cory.Duke@cms.hhs.gov.

OPPS Pass-Through Devices, contact the Device Pass-Through mailbox at DevicePTapplications@cms.hhs.gov. OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email at Marina.Kushnirova@cms.hhs.gov. Partial Hospitalization Program (PHP) and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at PHPPaymentPolicy@cms.hhs.gov.

RO Model, contact RadiationTherapy@cms.hhs.gov or at 844-711-2664, Option 5. Skin Substitutes, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov. Supervision of Outpatient Therapeutic Services in Hospitals and CAHs, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov.

All Other Issues Related to Hospital Outpatient Payments Not Previously Identified, contact the OPPS mailbox at OutpatientPPS@cms.hhs.gov. All Other Issues Related to the Ambulatory Surgical Center Payments Not Previously Identified, contact the ASC mailbox at ASCPPS@cms.hhs.gov. End Further Info End Preamble Start Supplemental Information Inspection of Public Comments.

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received. Http://www.regulations.gov.

Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments.

We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. Addenda Available Only Through the Internet on the CMS Website In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in the Federal Register as part of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC proposed rule, all of the Addenda no longer appear in the Federal Register as part of the annual OPPS/ASC proposed and final rules to decrease administrative burden and reduce costs associated with publishing lengthy tables.

Instead, these Addenda are published and available only on the CMS website. The Addenda relating to the OPPS are available at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.

The Addenda relating to the ASC payment system are available at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​ASCPayment/​ASC-Regulations-and-Notices. Current Procedural Terminology (CPT) Copyright Notice Throughout this final rule with comment period, we use CPT codes and descriptions to refer to a variety of services.

We note that CPT codes and descriptions are copyright 2021 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA).

Applicable Federal Acquisition Regulations (FAR and Defense Federal Acquisition Regulations (DFAR) apply. Table of Contents I. Summary and Background A.

Executive Summary of This Document B. Legislative and Regulatory Authority for the Hospital OPPS C. Excluded OPPS Services and Hospitals D.

Prior Rulemaking E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel) F. Public Comments Received in Response to the CY 2022 OPPS/ASC Proposed Rule G.

Public Comments Received on the CY 2021 OPPS/ASC Final Rule With Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights B.

Conversion Factor Update C. Wage Index Changes D. Statewide Average Default Cost-to-Charge Ratios (CCRs) E.

Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2022 F. Payment Adjustment for Certain Cancer Hospitals for CY 2022 G. Hospital Outpatient Outlier Payments H.

Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment I. Beneficiary Copayments III. OPPS Ambulatory Payment Classification (APC) Group Policies A.

OPPS Treatment of New and Revised HCPCS Codes B. OPPS Changes—Variations Within APCs C. New Technology APCs D.

OPPS APC-Specific Policies IV. OPPS Payment for Devices A. Pass-Through Payments for Devices B.

Device-Intensive Procedures V. OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals B.

OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Payment Status VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices A. Background B.

Estimate of Pass-Through Spending VII. OPPS Payment for Hospital Outpatient Visits and Critical Care Services VIII. Payment for Partial Hospitalization Services A.

Background B. PHP APC Update for CY 2022 C. Outlier Policy for CMHCs IX.

Services That Would Be Paid Only as Inpatient Services A. Background B. Changes to the Inpatient Only (IPO) List C.

Summary of Final Policy and Changes to the IPO List for CY 2022 X. Nonrecurring Policy Changes A. Medical Review of Certain Inpatient Hospital Admissions Under Medicare Part A for CY 2022 and Subsequent Years B.

Changes to Beneficiary Coinsurance for Additional Procedures Furnished During the Same Clinical Encounter as Certain Colorectal Cancer Screening Tests C. Low Volume Policy for Clinical and Brachytherapy APCs D. Comment Solicitation on Temporary Policies To Address the erectile dysfunction treatment PHE E.

Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment System Ratesetting Due to the PHE F. Separate Payment in CY 2022 for the Device Category, Drugs, and Biologicals With Transitional Pass-Through Payment Status Expiring Between December 31, 2021 and September 30, 2022 XI. CY 2022 OPPS Payment Status and Comment Indicators A.

CY 2022 OPPS Payment Status Indicator Definitions B. CY 2022 Comment Indicator Definitions XII. MedPAC Recommendations A.

OPPS Payment Rates Update B. ASC Conversion Factor Update C. ASC Cost Data XIII.

Updates to the Ambulatory Surgical Center (ASC) Payment System A. Background B. ASC Treatment of New and Revised Codes C.

Update to the List of ASC Covered Surgical Procedures and Covered Ancillary Services D. Update and Payment for ASC Covered Surgical Procedures and Covered Ancillary Services Start Printed Page 63460 E. New Technology Intraocular Lenses (NTIOLs) F.

ASC Payment and Comment Indicators G. Calculation of the ASC Payment Rates and the ASC Conversion Factor XIV. Advancing to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Outpatient Quality Programs—Request for Information A.

Background B. Definition of Digital Quality Measures C. Use of FHIR for Current eCQMs D.

Changes Under Consideration to Advance Digital Quality Measurement. Potential Actions in Four Areas to Transition to Digital Quality Measures by 2025 E. Solicitation of Comments XV.

Requirements for the Hospital Outpatient Quality Reporting (OQR) Program A. Background B. Hospital OQR Program Quality Measures C.

Administrative Requirements D. Form, Manner, and Timing of Data Submitted for the Hospital OQR Program E. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2022 Payment Determination XVI.

Requirements for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program A. Background B. ASCQR Program Quality Measures C.

Administrative Requirements D. Form, Manner, and Timing of Data Submitted for the ASCQR Program E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements XVII.

Radiation Oncology Model A. Introduction B. Background C.

RO Model Regulations XVIII. Updates to Requirements for Hospitals To Make Public a List of Their Standard Charges A. Introduction and Overview B.

Increasing the Civil Monetary Penalty (CMP) Amounts Using a Scaling Factor C. Deeming of Certain State Forensic Hospitals as Having Met Requirements D. Improving Access to the Machine-Readable File E.

Clarification and Requests for Comment XIX. Additional Hospital Inpatient Quality Reporting (IQR) Program Policies XX. Additional Medicare Promoting Interoperability Program Policies XXI.

Files Available to the Public via the Internet XXII. Collection of Information Requirements A. Statutory Requirement for Solicitation of Comments B.

ICRs for the Hospital OQR Program C. ICRs for the ASCQR Program XXIII. Response to Comments XXIV.

Economic Analyses A. Statement of Need B. Overall Impact for the Provisions of This Final Rule With Comment Period C.

Detailed Economic Analyses D. Regulatory Review Costs E. Regulatory Flexibility Act (RFA) Analysis F.

Unfunded Mandates Reform Act Analysis G. Conclusion H. Federalism Analysis I.

Summary and Background A. Executive Summary of This Document 1. Purpose In this final rule with comment period, we are updating 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, 2022.

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 often than annually, and to revise the groups, the relative payment weights, and the wage and other adjustments that take into account changes in medical practices, changes in technology, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i)(D)(v) of the Act, we annually review and update the ASC payment rates.

This final rule with comment period also includes additional policy changes made in accordance with our experience with the OPPS and the ASC payment system and recent changes in our statutory authority. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) Program, Hospital Price Transparency requirements, and the design of the Radiation Oncology Model.

2. Summary of the Major Provisions • OPPS Update. For 2022, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.0 percent.

This increase factor is based on the proposed hospital inpatient market basket percentage increase of 2.7 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS) reduced by a proposed productivity adjustment of 0.7 percentage point. Based on this update, we estimate that total payments to OPPS providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for calendar year (CY) 2022 would be approximately $82.078 billion, an increase of approximately $5.913 billion compared to estimated CY 2022 OPPS payments. We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals that fail to meet the hospital outpatient quality reporting requirements by applying a reporting factor of 0.9804 to the OPPS payments and copayments for all applicable services.

• Data used in CY 2022 OPPS/ASC Ratesetting. To set CY 2022 OPPS and ASC payment rates, we would normally use the most updated claims and cost report data available. However, because the CY 2020 claims data include services furnished during the erectile dysfunction treatment PHE, which significantly affected outpatient service utilization, we have determined that CY 2019 data would better approximate expected CY 2022 outpatient service utilization than CY 2020 data.

As a result, we are utilizing CY 2019 data to set CY 2022 OPPS and ASC payment rates. • Partial Hospitalization Update. For CY 2022, we are using the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs, consistent with existing methodology, but with a cost floor that will maintain the per diem costs finalized in CY 2021.

We are also using the CY 2019 claims and cost report data for each provider type, consistent with the use of claims and cost report data prior to the PHE within the broader CY 2022 OPPS ratesetting. • Changes to the Inpatient Only (IPO) List. For 2022, we are finalizing our proposal with modification to pause the elimination of the IPO list and add back to the IPO list the services removed in 2021, except for CPT code 22630 (Arthrodesis, posterior interbody technique, including laminectomy and/or discectomy to prepare interspace (other than for decompression), single interspace.

Lumbar). CPT code 23472 (Arthroplasty, glenohumeral joint. Total shoulder (glenoid and proximal humeral replacement (for example, total shoulder))).

CPT code 27702 (Arthroplasty, ankle. With implant (total ankle)) and their corresponding anesthesia codes. CPT code 00630 (Anesthesia for procedures in lumbar region.

Not otherwise specified), CPT code 00670 (Anesthesia for extensive spine and spinal cord procedures ( e.g., spinal instrumentation or vascular procedures)). CPT code 01638 (Anesthesia for open or surgical arthroscopic procedures on humeral Start Printed Page 63461 head and neck, sternoclavicular joint, acromioclavicular joint, and shoulder joint. Total shoulder replacement).

And CPT 01486 (Anesthesia for open procedures on bones of lower leg, ankle, and foot. Total ankle replacement). We are also classifying CPT code 0643T (Transcatheter left ventricular restoration device implantation including right and left heart catheterization and left ventriculography when performed, arterial approach) as an inpatient only procedure.

We are finalizing our proposal to amend the regulation at § 419.22(n) to remove the reference to the elimination of the list of services and procedures designated as requiring inpatient care through a 3-year transition and to codify our five longstanding criteria for determining whether a service or procedure should be removed from the IPO list in the regulation in a new § 419.23. • Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule). For CY 2022, we are finalizing a policy to exempt procedures that are removed from the inpatient only (IPO) list under the OPPS beginning on or after January 1, 2022, from site-of-service claim denials, Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO) referrals to Recovery Audit Contractor (RAC) for persistent noncompliance with the 2-midnight rule, and RAC reviews for “patient status” (that is, site-of-service) for a time period of 2 years.

• 340B -Acquired Drugs. For CY 2022, we are continuing our current policy of paying an adjusted amount of ASP minus 22.5 percent for drugs and biologicals acquired under the 340B program. We are continuing to exempt Rural SCHs, PPS-exempt cancer hospitals and children's hospitals from our 340B payment policy.

• Device Pass-Through Payment Applications. For CY 2022, we received eight applications for device pass-through payments. One of these applications received preliminary approval for pass-through payment status through our quarterly review process.

We solicited public comment on all eight of these applications and are making final determinations on these applications in this CY 2022 OPPS/ASC final rule with comment period. • Equitable Adjustment for Device Category, Drugs, and Biologicals with Expiring Pass-through Status. As a result of our proposal to use CY 2019 claims data, rather than CY 2020 claims data, to inform CY 2022 ratesetting, we are using our equitable adjustment authority under 1833(t)(2)(E) to provide up to four quarters of separate payment for 27 drugs and biologicals and one device category whose pass-through payment status will expire between December 31, 2021 and September 30, 2022.

• Cancer Hospital Payment Adjustment. For CY 2022, we are continuing to provide additional payments to cancer hospitals so that a cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. However, section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point.

Based on the data and the required 1.0 percentage point reduction, we are using a target PCR of 0.89 to determine the CY 2022 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.89 for each cancer hospital. • ASC Payment Update.

For CYs 2019 through 2023, we adopted a policy to update the ASC payment system using the hospital market basket update. Using the hospital market basket methodology, for CY 2022, we are increasing payment rates under the ASC payment system by 2.0 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a hospital market basket percentage increase of 2.7 percent reduced by a productivity adjustment of 0.7 percentage point.

Based on this update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2022 would be approximately 5.41 billion, an increase of approximately 40 million compared to estimated CY 2021 Medicare payments. • ASC Payment Policy for Non-Opioid Pain Management Drugs and Biologicals under Section 6082 of the SUPPORT Act (Section 1833(t)(22) of the Social Security Act). Under section 1833(t)(22)(A) of the Act, the Secretary was required to conduct a review (part of which may include a request for information) of payments for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives.

Section 1833(t)(22)(A)(ii) provides that the Secretary may, as the Secretary determines appropriate, conduct subsequent reviews of such payments. In accordance with our review and comments from stakeholders, for CY 2022, we are finalizing our proposal to modify the current non-opioid pain management payment policy and regulatory text to require that evidence-based non-opioid alternatives for pain management must be approved under a new drug application under section 505(c) of the Federal Food, Drug, and Cosmetic Act, under an abbreviated new drug application under section 505(j), or, in the case of a biological product, be licensed under section 351 of the Public Health Service Act. We further proposed that the drug or biological must also have an FDA-approved indication for pain management or analgesia and have a per-day cost in excess of the OPPS drug packaging threshold, which is finalized at $130 for CY 2022 and described in section V.B.1.a.

Of this final rule with comment period, to qualify for separate payment in the ASC setting. We appreciate the comments received on our multiple comment solicitations. We are not finalizing any policy modifications or additional criteria as a result of these comments but will take this information into consideration for future notice and comment rulemaking.

For CY 2022, in accordance with our finalized criteria, CMS review, and stakeholder comments, we will pay separately in the ASC setting for four drugs that are non-opioid pain management drugs that function as surgical supplies. • Changes to the List of ASC Covered Surgical Procedures. For CY 2022, we are reinstating the ASC Covered Procedures List (CPL) criteria that were in effect in CY 2020 and removing several of the procedures that were added to the ASC CPL in CY 2021.

We requested comments on whether any of the procedures that we proposed to remove from the ASC CPL in CY 2021 met the CY 2020 criteria that we proposed to reinstate. After reviewing these recommendations, we determined that a total of six procedures should either remain on or be added to the CPL We are also finalizing our proposal to adopt a nomination process, under which stakeholders may nominate procedures they believe meet the requirements to be added to the ASC CPL. CMS will provide subregulatory guidance on the nomination process in early 2022, with procedure nominations due in March 2022, and the formal nomination process beginning in CY 2023.

Start Printed Page 63462 • Hospital Outpatient Quality Reporting (OQR) Program. For the Hospital OQR Program, we proposed changes for the CY 2023, CY 2024, CY 2025, and CY 2026 payment determinations and subsequent years in the CY 2022 OPPS/ASC proposed rule (86 FR 42018). In this final rule, we are finalizing our proposals to.

(1) Remove the OP-02. Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival measure beginning with the CY 2025 payment determination. (2) remove the OP-3.

Median Time to Transfer to Another Facility for Acute Coronary Intervention measure beginning with the CY 2025 payment determination. (3) adopt OP-38. erectile dysfunction treatment Vaccination Coverage Among Health Care Personnel (HCP) measure beginning with the CY 2024 payment determination.

(4) adopt OP-39. The Breast Screening Recall Rates measure beginning with the CY 2023 payment determination. (5) adopt OP-40.

The ST-Segment Elevation Myocardial Infarction (STEMI) electronic clinical quality measure (eCQM) beginning with voluntary reporting for the CY 2023 reporting period and mandatory reporting beginning with the CY 2024 reporting period/CY 2026 payment determination. And (6) restart reporting of the OP-37a-e. Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based measures beginning with voluntary reporting during the CY 2023 reporting period and mandatory reporting beginning with the CY 2024 reporting period/CY 2026 payment determination.

We are finalizing as proposed the data submission requirements for the OAS CAHPS Survey-based measures and the erectile dysfunction treatment Vaccination Coverage Among HCP measure (OP-38). Similarly, we are finalizing as proposed the data submission and certification requirements for eCQMs and expanding our Extraordinary Circumstances Exemption (ECE) policy to these measures. Beginning with the CY 2024 payment determination, we are finalizing as proposed three updates to our validation requirements to.

(1) Use electronic file submissions for chart-abstracted measure medical record requests. (2) change the chart validation requirements and methods. And (3) update the targeting criteria.

In the CY 2022 OPPS/ASC proposed rule (86 FR 42018) we requested comment from stakeholders on. (1) The potential future development and inclusion of a patient-reported outcomes measure following elective total hip and/or total knee arthroplasty (THA/TKA). (2) the possibility of expanding our current disparities methods to include reporting by race and ethnicity.

And (3) the possibility of hospital collection of standardized demographic information for quality reporting and measure stratification. We also requested feedback across programs on potential actions and priority areas that would enable the continued transformation of our quality measurement toward greater digital capture of data and use of the FHIR standard. We are finalizing with modification, our proposal to make mandatory the reporting of the OP-31.

Cataracts. Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery measure. We are finalizing to make reporting of this measure mandatory beginning with the CY 2027 payment determination, instead of the CY 2025 payment determination.

• Ambulatory Surgical Center Quality Reporting (ASCQR) Program. For the ASCQR Program, we proposed changes for the CY 2024, CY 2025, and CY 2026 payment determinations and subsequent years in the CY 2022 OPPS/ASC proposed rule (86 FR 42018). For the ASCQR Program measure set, we are finalizing our proposals to.

(1) Adopt ASC-20. erectile dysfunction treatment Vaccination Coverage Among HCP measure beginning with the CY 2024 payment determination. And (2) resume data collection for four measures beginning with the CY 2025 payment determination.

Patient Fall. (c) ASC-3. Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant.

And (d) ASC-4. All-Cause Hospital Transfer/Admission. We are also finalizing as proposed the data submission requirements for the OAS CAHPS Survey-based measures and the erectile dysfunction treatment Vaccination Coverage Among HCP measure (ASC-20).

We are finalizing, with modification, the proposal to require the ASC-15a-e. OAS CAHPS Survey-based measures with voluntary reporting beginning with the CY 2024 reporting period and mandatory reporting beginning with the CY 2025 reporting period/CY 2027 payment determination. We are also finalizing with modification the proposal to require the ASC-11.

Cataracts. Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery measure. We are finalizing mandatory reporting of this measure beginning with the CY 2027 payment determination, instead of the CY 2025 payment determination.

In the CY 2022 OPPS/ASC proposed rule (86 FR 42018) we requested stakeholder comment on. (1) The potential future development and inclusion of a patient-reported outcomes measure following elective THA/TKA. (2) potential measurement approaches or social risk factors that influence health disparities in the ASC setting.

And (3) the future inclusion of a measure to assess pain management surgical procedures performed in ASCs. We also requested feedback across programs on potential actions and priority areas that would enable the continued transformation of our quality measurement toward greater digital capture of data and use of the FHIR standard. • Hospital Inpatient Quality Reporting (IQR) Program Update.

In the CY 2022 OPPS/ASC proposed rule (86 FR 25549 through 25628) we requested information from stakeholders on potential measure updates on reporting and submission requirements for the Safe Use of Opioids—Concurrent Prescribing eCQM. • Updates to Requirements for Hospitals to Make Public a List of Their Standard Charges. We are amending several hospital price transparency policies codified at 45 CFR part 180 in order to encourage compliance.

We are. (1) Increasing the amount of the penalties for noncompliance through the use of a scaling factor based on hospital bed count. (2) deeming state forensic hospitals that meet certain requirements to be in compliance with the requirements of 45 CFR part 180.

And (3) finalizing a requirement that the machine-readable file be accessible to automated searches and direct downloads. In addition, we clarify the expected output of hospital online price estimator tools when hospitals choose to use an online price estimator tool in lieu of posting its standard charges for the required shoppable services in a consumer-friendly format. • Radiation Oncology Model (RO Model).

Section 133 of the Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), enacted on December 27, 2020, includes a provision that prohibits the RO Model from beginning before January 1, 2022.

This law supersedes the RO Model delayed start date established in the CY 2021 OPPS/ASC final rule with comment period. We are finalizing proposed provisions related to the additional delayed implementation of the RO Model due to the CAA, 2021, as well as modifications to certain RO Model policies not related to the delay. Start Printed Page 63463 • Comment Solicitation on Temporary Policies for the PHE for erectile dysfunction treatment.

In response to the erectile dysfunction treatment levitra, CMS undertook emergency rulemaking to implement a number of flexibilities to address the levitra, such as preventing spread of the and supporting diagnosis of erectile dysfunction treatment. While many of these flexibilities will expire at the conclusion of the PHE, we sought comment on whether there are certain policies that should be made permanent. Specifically, we sought comment on services furnished by hospital staff to beneficiaries in their homes through use of communication technology, direct supervision when the supervising practitioner is available through two-way, audio/video communication technology, and a code and payment for erectile dysfunction treatment specimen collection.

We will consider comments received for future rulemaking. • Changes to Beneficiary Coinsurance for Colorectal Cancer Screening Test. Section 122 of the Consolidated Appropriations Act (CAA) of 2021 amends section 1833(a) of the Act to offer a special coinsurance rule for screening flexible sigmoidoscopies and screening colonoscopies regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test.

We are finalizing our proposal that all surgical services furnished on the same date as a planned screening colonoscopy or planned flexible sigmoidoscopy could be viewed as being furnished in connection with, as a result of, and in the same clinical encounter as the screening test for purposes of determining the coinsurance required of Medicare beneficiaries for planned colorectal cancer screening tests that result in additional procedures furnished in the same clinical encounter. 3. Summary of Costs and Benefits In sections XXIV.

And XXV. Of this final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the changes would have on affected entities and beneficiaries. Key estimated impacts are described below.

A. Impacts of All OPPS Changes Table 84 in section XXIV.C. Of this final rule with comment period displays the distributional impact of all the OPPS changes on various groups of hospitals and CMHCs for CY 2022 compared to all estimated OPPS payments in CY 2021.

We estimate that the policies in this final rule with comment period will result in a 1.6 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2022, including beneficiary cost-sharing, to the approximately 3,659 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) will increase by approximately $1.3 billion compared to CY 2021 payments, excluding our estimated changes in enrollment, utilization, and case-mix. We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs are only paid for partial hospitalization services under the OPPS.

Continuing the provider-specific structure we adopted beginning in CY 2011, and basing payment fully on the type of provider furnishing the service, we estimate a 1.1 percent increase in CY 2022 payments to CMHCs relative to their CY 2021 payments. B. Impacts of the Updated Wage Indexes We estimate that our update of the wage indexes based on the FY 2022 IPPS final rule wage indexes will result in no change for urban hospitals under the OPPS and no change for rural hospitals.

These wage indexes include the continued implementation of the OMB labor market area delineations based on 2010 Decennial Census data, with updates, as discussed in section II.C. Of this final rule with comment period. C.

Impacts of the Rural Adjustment and the Cancer Hospital Payment Adjustment There are no significant impacts of our CY 2022 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not making any change in policies for determining the rural hospital payment adjustments. While we are implementing the reduction to the cancer hospital payment adjustment for CY 2022 required by section 1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st Century Cures Act, the target payment-to-cost ratio (PCR) for CY 2021 is 0.89, equivalent to the 0.89 target PCR for CY 2021, and therefore has no budget neutrality adjustment.

D. Impacts of the OPD Fee Schedule Increase Factor For the CY 2022 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 2.0 percent and applying that increase factor to the conversion factor for CY 2022. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that urban hospitals will experience an increase in payments of approximately 2.1 percent and that rural hospitals will experience an increase in payments of 2.3 percent.

Classifying hospitals by teaching status, we estimate nonteaching hospitals will experience an increase in payments of 2.2 percent, minor teaching hospitals will experience an increase in payments of 2.2 percent, and major teaching hospitals will experience an increase in payments of 1.8 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership will experience an increase of 2.2 percent in payments, while hospitals with government ownership would experience an increase of 1.7 percent in payments.

We estimate that hospitals with proprietary ownership will experience an increase of 2.3 percent in payments. E. Impacts of the ASC Payment Update For impact purposes, the surgical procedures on the ASC covered surgical procedure list are aggregated into surgical specialty groups using CPT and HCPCS code range definitions.

The percentage change in estimated total payments by specialty groups under the CY 2022 payment rates, compared to estimated CY 2021 payment rates, generally ranges between an increase of 2 and 4 percent, depending on the service, with some exceptions. We estimate the impact of applying the hospital market basket update to ASC payment rates will increase payments by $80 million under the ASC payment system in CY 2022. B.

Legislative and Regulatory Authority for the Hospital OPPS When Title XVIII of the Act was enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, the Congress mandated replacement of the reasonable cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub.

L. 105-33) added section 1833(t) to the Act, authorizing implementation of a PPS for hospital outpatient services. The OPPS was first implemented for services furnished on or after August 1, 2000.

Implementing regulations for the OPPS are located at 42 CFR parts 410 and 419. Start Printed Page 63464 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 (MCTRJCA, Pub. L.

112-96), enacted on February 22, 2012. The American Taxpayer Relief Act of 2012 (Pub. L.

112-240), enacted January 2, 2013. The Pathway for SGR Reform Act of 2013 (Pub. L.

113-67) enacted on December 26, 2013. The Protecting Access to Medicare Act of 2014 (PAMA, Pub. L.

113-93), enacted on March 27, 2014. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L.

114-10), enacted April 16, 2015. The Bipartisan Budget Act of 2015 (Pub. L.

114-74), enacted November 2, 2015. The Consolidated Appropriations Act, 2016 (Pub. L.

114-113), enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016.

The Consolidated Appropriations Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018.

The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271), enacted on October 24, 2018.

The Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94), enacted on December 20, 2019.

The erectile dysfunction Aid, Relief, and Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020.

And the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on December 27, 2020.

Under the OPPS, we generally pay for hospital Part B services on a rate-per-service basis that varies according to the APC group to which the service is assigned. We use the Healthcare Common Procedure Coding System (HCPCS) (which includes certain Current Procedural Terminology (CPT) codes) to identify and group the services within each APC. The OPPS includes payment for most hospital outpatient services, except those identified in section I.C.

Of this final rule with comment period. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Medicare Part B. The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment.

This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage differences using the hospital inpatient wage index value for the locality in which the hospital or CMHC is located. All services and items within an APC group are comparable clinically and with respect to resource use, as required by section 1833(t)(2)(B) of the Act.

In accordance with section 1833(t)(2)(B) of the Act, subject to certain exceptions, items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest median cost (or mean cost, if elected by the Secretary) for an item or service in the APC group is more than 2 times greater than the lowest median cost (or mean cost, if elected by the Secretary) for an item or service within the same APC group (referred to as the “2 times rule”). In implementing this provision, we generally use the cost of the item or service assigned to an APC group. For new technology items and services, special payments under the OPPS may be made in one of two ways.

Section 1833(t)(6) of the Act provides for temporary additional payments, which we refer to as “transitional pass-through payments,” for at least 2 but not more than 3 years for certain drugs, biological agents, brachytherapy devices used for the treatment of cancer, and categories of other medical devices. For new technology services that are not eligible for transitional pass-through payments, and for which we lack sufficient clinical information and cost data to appropriately assign them to a clinical APC group, we have established special APC groups based on costs, which we refer to as New Technology APCs. These New Technology APCs are designated by cost bands which allow us to provide appropriate and consistent payment for designated new procedures that are not yet reflected in our claims data.

Similar to pass-through payments, an assignment to a New Technology APC is temporary. That is, we retain a service within a New Technology APC until we acquire sufficient data to assign it to a clinically appropriate APC group. C.

Excluded OPPS Services and Hospitals Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. It also excludes screening mammography, diagnostic mammography, and effective January 1, 2011, an annual wellness visit providing personalized prevention plan services.

The Secretary exercises the authority granted under the statute to also exclude from the OPPS certain services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS). Certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS).

Services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD prospective payment system. And services and procedures that require an inpatient stay that are paid under the hospital IPPS. In addition, section 1833(t)(1)(B)(v) of the Act does not include applicable items and services (as defined in subparagraph (A) of paragraph (21)) that are furnished on or after January 1, 2017 by an off-campus outpatient department of a provider (as defined in subparagraph (B) of paragraph (21)).

We set forth the services that are excluded from payment under the OPPS in regulations at 42 CFR 419.22. Under § 419.20(b) of the regulations, we specify the types of hospitals that are Start Printed Page 63465 excluded from payment under the OPPS. These excluded hospitals are.

Critical access hospitals (CAHs). Hospitals located in Maryland and paid under Maryland's All-Payer or Total Cost of Care Model. Hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico.

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, the relative payment weights, and the wage and other adjustments to take into account changes in medical practices, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Since initially implementing the OPPS, we have published final rules in the Federal Register annually to implement statutory requirements and changes arising from our continuing experience with this system.

These rules can be viewed on the CMS website at. Https://www.cms.gov/​Medicare/​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 expert outside advisory panel composed of an appropriate selection of representatives of providers to annually review (and advise the Secretary concerning) the clinical integrity of the payment groups and their weights under the OPPS. In CY 2000, based on section 1833(t)(9)(A) of the Act, the Secretary established the Advisory Panel on Ambulatory Payment Classification Groups (APC Panel) to fulfill this requirement.

In CY 2011, based on section 222 of the Public Health Service Act (the PHS Act), which gives discretionary authority to the Secretary to convene advisory councils and committees, the Secretary expanded the panel's scope to include the supervision of hospital outpatient therapeutic services in addition to the APC groups and weights. To reflect this new role of the panel, the Secretary changed the panel's name to the Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel). The HOP Panel is not restricted to using data compiled by CMS, and in conducting its review, it may use data collected or developed by organizations outside the Department.

2. Establishment of the Panel On November 21, 2000, the Secretary signed the initial charter establishing the Panel, and, at that time, named the APC Panel. This expert panel is composed of appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise) who review clinical data and advise CMS about the clinical integrity of the APC groups and their payment weights.

Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that the Panel— May advise on the clinical integrity of Ambulatory Payment Classification (APC) groups and their associated weights.

May advise on the appropriate supervision level for hospital outpatient services. May advise on OPPS APC rates for ASC covered surgical procedures. Continues to be technical in nature.

Is governed by the provisions of the FACA. Has a Designated Federal Official (DFO). And Is chaired by a Federal Official designated by the Secretary.

The Panel's charter was amended on November 15, 2011, renaming the Panel and expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and to add critical access hospital (CAH) representation to its membership. The Panel's charter was also amended on November 6, 2014 (80 FR 23009), and the number of members was revised from up to 19 to up to 15 members. The Panel's current charter was approved on November 20, 2020, for a 2-year period.

The current Panel membership and other information pertaining to the Panel, including its charter, Federal Register notices, membership, meeting dates, agenda topics, and meeting reports, can be viewed on the CMS website at. Https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​FACA/​AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html. 3.

Panel Meetings and Organizational Structure The Panel has held many meetings, with the last meeting taking place on August 31, 2020. Prior to each meeting, we publish a notice in the Federal Register to announce the meeting, new members, and any other changes of which the public should be aware. Beginning in CY 2017, we have transitioned to one meeting per year (81 FR 31941).

In CY 2018, we published a Federal Register notice requesting nominations to fill vacancies on the Panel (83 FR 3715). As published in this notice, CMS is accepting nominations on a continuous basis. In addition, the Panel has established an administrative structure that, in part, currently includes the use of three subcommittee workgroups to provide preparatory meeting and subject support to the larger panel.

The three current subcommittees include the following. APC Groups and Status Indicator Assignments Subcommittee, which advises and provides recommendations to the Panel on the appropriate status indicators to be assigned to HCPCS codes, including but not limited to whether a HCPCS code or a category of codes should be packaged or separately paid, as well as the appropriate APC assignment of HCPCS codes regarding services for which separate payment is made. Data Subcommittee, which is responsible for studying the data issues confronting the Panel and for recommending options for resolving them.

And Visits and Observation Subcommittee, which reviews and makes recommendations to the Panel on all technical issues pertaining to observation services and hospital outpatient visits paid under the OPPS. Each of these workgroup subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 23, 2021, meeting that the subcommittees continue. We accepted this recommendation.

For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS website mentioned earlier in this Start Printed Page 63466 section, and the FACA database at http://facadatabase.gov. F. Public Comments Received in Response to the CY 2022 OPPS/ASC Proposed Rule We received approximately 18,864 timely pieces of correspondence on the CY 2022 OPPS/ASC proposed rule that appeared in the Federal Register on August 4, 2021 (86 FR 42018).

We note that we received some public comments that were outside the scope of the CY 2022 OPPS/ASC proposed rule. Out-of-scope-public comments are not addressed in this CY 2022 OPPS/ASC final rule with comment period. Summaries of those public comments that are within the scope of the proposed rule and our responses are set forth in the various sections of this final rule with comment period under the appropriate headings.

G. Public Comments Received on the CY 2021 OPPS/ASC Final Rule With Comment Period We received approximately 32 timely pieces of correspondence on the CY 2021 OPPS/ASC final rule with comment period that appeared in the Federal Register on December 2, 2020 (85 FR 85866), most of which were outside of the scope of the final rule. In-scope comments related to 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).

II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights 1.

Database Construction a. Use of CY 2019 Data in the CY 2022 OPPS Ratesetting We primarily use two data sources in OPPS ratesetting. Claims data and cost report data.

Our goal is always to use the best available data overall for ratesetting. Ordinarily, the best available full year of claims data would be the data from the year two years prior to the calendar year that is the subject of the rulemaking. As discussed in further detail in Section X.E.

Of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190), given our concerns with CY2020 data as a result of the erectile dysfunction treatment PHE we proposed to generally use CY 2019 claims data and the data components related to it in establishing the CY 2022 OPPS. As discussed in further detail in Section X.E. Of this final rule with comment period, we are finalizing our proposal to generally use CY 2019 claims data and the data components related to it in establishing the CY 2022 OPPS.

B. 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.

For the CY 2022 OPPS, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2022, and before January 1, 2023 (CY 2022), using the same basic methodology that we described in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85873), using CY 2019 claims data. That is, we proposed to recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services to construct a database for calculating APC group weights. For the purpose of recalibrating the proposed APC relative payment weights for CY 2022, we began with approximately 180 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, 2019, and before January 1, 2020, before applying our exclusionary criteria and other methodological adjustments.

After the application of those data processing changes, we used approximately 93 million final action claims to develop the proposed CY 2022 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 the CY 2022 OPPS/ASC proposed rule on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

Addendum N to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Feefor-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html ) includes the proposed list of bypass codes for CY 2022. The proposed list of bypass codes contains codes that are reported on claims for services in CY 2019 and, therefore, includes codes that were in effect in CY 2019 and used for billing.

We proposed to retain deleted bypass codes on the proposed CY 2022 bypass list because these codes existed in CY 2019 and were covered OPD services in that period, and CY 2019 claims data were used to calculate proposed CY 2022 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo” single procedure claims for ratesetting purposes. €œOverlap bypass codes” that are members of the proposed multiple imaging composite APCs are identified by asterisks (*) in the third column of Addendum N to the proposed rule.

HCPCS codes that we proposed to add for CY 2022 are identified by asterisks (*) in the fourth column of Addendum N. We did not receive any public comments on our general proposal to recalibrate the relative payment weights for each APC based on claims and cost report data for HOPD services or on our proposed bypass code process. We are adopting as final the proposed “pseudo” single claims process and the final CY 2022 bypass list of 173 HCPCS codes, as displayed in Addendum N to this final rule with comment period (which is available via the internet on the CMS website).

For this final rule with comment period, for the purpose of recalibrating the final APC relative payment weights for CY 2022, we used approximately 93 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, 2019, and before January 1, 2020. 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 final rule with comment period on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

c. Calculation and Use of Cost-to-Charge Ratios (CCRs) For 2022, in the CY 2022 OPPS/ASC proposed rule (86 FR 42046) we proposed 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 CY 2022 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 2019 claims data by comparing these claims data to hospital Start Printed Page 63467 cost reports available for the CY 2021 OPPS/ASC final rule with comment period ratesetting, which, in most cases, are from CY 2019.

For the proposed CY 2022 OPPS payment rates, we used the set of CY 2019 claims processed through June 30, 2020. We applied the hospital-specific CCR to the hospital's charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code. To ensure the completeness of the revenue code-to-cost center crosswalk, we reviewed changes to the list of revenue codes for CY 2019 (the year of claims data we used to calculate the proposed CY 2022 OPPS payment rates) and updates to the National Uniform Billing Committee (NUBC) 2020 Data Specifications Manual.

That crosswalk is available for review and continuous comment on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. 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 the CY 2022 OPPS/ASC 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, magnetic resonance imaging (MRIs), computed tomography (CT) scans, and cardiac catheterization. However, in response to comments we received from our CY 2014 OPPS/ASC proposed rule, we finalized a policy in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74847) to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs associated with the APCs for CT and MRI.

As finalized in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), beginning in CY 2021, we use all claims with valid CT and MRI cost center CCRs, including those that use a “square feet” cost allocation method, to estimate costs for the CT and MRI APCs. Comment. One commenter stated that coronary CT angiography (CCTA) requires considerably more resources than the procedures that are currently assigned to the CT cost center.

The commenter suggests that this has resulted in over a decade of inadequate reimbursement for CCTA below the actual cost of performing the test. The commenter recommends that CMS provide specific instructions that allow hospitals to submit charges for cardiac CT using revenue codes that provide more accurate cost estimates. The commenter stated that hospitals do not have the ability to directly report costs for cardiac CT services and that CMS regulations mandate that cardiac CT be lumped into generic diagnostic CT revenue codes.

Response. Hospital outpatient facilities make the final determination for reporting the appropriate cost centers and revenue codes. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing Manual, CMS “does not instruct hospitals on the assignment of HCPCS codes to revenue codes for services provided under OPPS since hospitals' assignment of cost vary.

Where explicit instructions are not provided, providers should report their charges under the revenue code that will result in the charge being assigned to the same cost center to which the cost of those services are assigned in the cost report.” Therefore, HOPDs must determine the most appropriate cost center and revenue code for the cardiac CT exams. After consideration of the public comment we received on the general CCR process, we are finalizing for CY 2022 using the hospital-specific overall ancillary and departmental CCRs to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk and the established methodology. 2.

Final Data Development and Calculation of Costs Used for Ratesetting In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2022. The Hospital OPPS page on the CMS website on which the CY 2022 OPPS/ASC final rule with comment period 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, later in this section we discuss the file of claims that comprises the data set that is available upon payment of an administrative fee under a CMS data use agreement. The CMS website, 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 2019 claims that were used to calculate the final payment rates for the CY 2022 OPPS/ASC final rule with comment period.

Previously, the OPPS established the scaled relative weights on which payments are based using APC median costs, a process described in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). However, as discussed in more detail in section II.A.2.f. Of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we finalized the use of geometric mean costs to calculate the relative weights on which the CY 2013 OPPS payment rates were based.

While this policy changed the cost metric on which the relative payments are based, the data process in general remained the same under the methodologies that we used to obtain appropriate claims data and accurate cost information in determining estimated service cost. We did not receive any public comments on our proposed process and are finalizing our proposed methodology to continue to use geometric mean costs to calculate the relative weights on which the final CY 2022 OPPS payment rates are based. We used the methodology described in sections II.A.2.a.

Through II.A.2.c. Of this final rule with comment period to calculate the costs we used to establish the final relative payment weights used in calculating the OPPS payment rates for CY 2022 shown in Addenda A and B to the CY 2022 OPPS/ASC final rule with comment period (which are available via the internet on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Feefor-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html ).

We refer readers to section II.A.4. Of this final rule with comment period for a discussion of the Start Printed Page 63468 conversion of APC costs to scaled payment weights. We note that under the OPPS, CY 2019 was the first year in which the claims data used for setting payment rates (CY 2017 data) contained lines with the modifier “PN”, which indicates nonexcepted items and services furnished and billed by off-campus provider-based departments (PBDs) of hospitals.

Because nonexcepted services are not paid under the OPPS, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58832), we finalized a policy to remove those claim lines reported with modifier “PN” from the claims data used in ratesetting for the CY 2019 OPPS and subsequent years. For the CY 2022 OPPS, we will continue to remove claim lines with modifier “PN” from the ratesetting process. For details of the claims accounting process used in the CY 2022 OPPS/ASC final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for the CY 2022 OPPS/ASC final rule with comment period on the CMS website at.

Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. a. Calculation of Single Procedure APC Criteria-Based Costs (1) Blood and Blood Products Since the implementation of the OPPS in August 2000, we have made separate payments for blood and blood products through APCs rather than packaging payment for them into payments for the procedures with which they are administered.

Hospital payments for the costs of blood and blood products, as well as for the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs. We proposed 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, to address the differences in CCRs and to better reflect hospitals' costs, we proposed 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 proposed to apply this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports to simulate blood-specific CCRs for those hospitals.

We proposed to calculate the costs upon which the proposed CY 2022 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 using this methodology in CY 2022 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 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 proposed 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 proposed not to 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 66795 through 66796) for more information about our policy not to make separate payments for blood and blood products when they appear on the same claims as services assigned to a C-APC). We refer readers to Addendum B to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website) for the proposed CY 2022 payment rates for blood and blood products (which are generally 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). For CY 2022, we proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology.

We did not receive any comments on our proposal to establish payment rates for blood and blood products using our blood-specific CCR methodology and we are finalizing this policy as proposed. Please refer to Addendum B to the CY 2022 OPPS/ASC final rule with comment period (which is available via the internet on the CMS website) for the final CY 2022 payment rates for blood and blood products. (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 Start Printed Page 63469 source across hospitals by averaging the extremely high and low values, in contrast to payment based on hospitals' charges adjusted to costs. We believe that the OPPS methodology, as opposed to payment based on hospitals' charges adjusted to cost, also would provide hospitals with incentives for efficiency in the provision of brachytherapy services to Medicare beneficiaries.

Moreover, this approach is consistent with our payment methodology for the vast majority of items and services paid under the OPPS. We refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323 through 70325) for further discussion of the history of OPPS payment for brachytherapy sources. For CY 2022, except where otherwise indicated, we proposed to use the costs derived from CY 2019 claims data to set the proposed CY 2022 payment rates for brachytherapy sources because CY 2019 is the year of data we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2022 OPPS.

With the exception of the proposed payment rate for brachytherapy source C2645 (Brachytherapy planar source, palladium-103, per square millimeter) and brachytherapy source C2636 (Brachytherapy linear source, non-stranded, palladium-103, per 1 mm), we proposed to base the payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we proposed for other items and services paid under the OPPS, as discussed in section II.A.2. Of the CY 2022 OPPS/ASC proposed rule. We also proposed 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 proposed to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source, stranded, not otherwise specified, per source) and C2699 (Brachytherapy source, non-stranded, not otherwise specified, per source), at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per-source basis (as opposed to, for example, 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). We also proposed 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 2022 payment rates for brachytherapy sources are included in Addendum B to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and identified with status indicator “U”. For CY 2018, we assigned status indicator “U” (Brachytherapy Sources, Paid under OPPS. Separate APC payment) to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) in the absence of claims data and established a payment rate using external data (invoice price) at $4.69 per mm2.

For CY 2019, in the absence of sufficient claims data, we continued to establish a payment rate for C2645 at $4.69 per mm2. Our CY 2018 claims data available for the CY 2020 OPPS/ASC final rule with comment period included two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per mm2. In response to comments from stakeholders, we agreed with commenters that given the limited claims data available and a new outpatient indication for C2645, a payment rate for HCPCS code C2645 based on the geometric mean cost of $1.02 per mm2 may not adequately reflect the cost of HCPCS code C2645.

In the CY 2020 OPPS/ASC final rule with comment period, we finalized our policy to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to maintain the CY 2019 payment rate of $4.69 per mm2 for HCPCS code C2645 for CY 2020. Similarly, in the absence of sufficient claims data to establish an APC payment rate, in the CY 2021 OPPS/ASC final rule with comment period, we finalized our policy to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate of $4.69 per mm2 for HCPCS code C2645 for CY 2021. As discussed in Section X.E.

Of the CY 2022 OPPS/ASC proposed rule, given our concerns with CY 2020 data as a result of the erectile dysfunction treatment PHE, in general we proposed to use CY 2019 claims data and the data components related to it in establishing the CY 2022 OPPS. Therefore, we proposed to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate of $4.69 per mm2 for HCPCS code C2645 for CY 2022. We received no public comments and are finalizing our proposal, without modification, to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate of $4.69 per mm2 for HCPCS code C2645 for CY 2022.

Additionally, for CY 2022 and subsequent calendar years, as discussed in Section X.C. Of the CY 2022 OPPS/ASC proposed rule, we proposed to establish a Low Volume APC policy for New Technology APCs, clinical APCs, and brachytherapy APCs. For these APCs with fewer than 100 single claims that can be used for ratesetting purposes in the existing claims year, we proposed to use up to four years of claims data to establish a payment rate for each item or service as we currently do for low volume services assigned to New Technology APCs.

Further, we proposed to calculate the cost for Low Volume APCs based on the greatest of the arithmetic mean cost, median cost, or geometric mean cost. We proposed to designate 5 brachytherapy APCs as Low Volume APCs for CY 2022 as these APCs met our proposed criteria to be designated as a Low Volume APC. In Section X.C.

Of this final rule with comment period, we are finalizing our proposal to designate 5 brachytherapy APCs as Low Volume APCs for CY 2022. For more information on the brachytherapy APCs we are designating as Low Volume APCs, see Section X.C. Of this final rule with comment period.

We continue to invite stakeholders to submit recommendations for new codes to describe new brachytherapy sources. Such recommendations should be directed via email to outpatientpps@cms.hhs.gov or by mail to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244. We will continue to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis.

b. Comprehensive APCs (C-APCs) for CY 2022 (1) Background In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 Start Printed Page 63470 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 and added one additional level to both the Orthopedic Surgery and Vascular Procedures clinical families, which increased the total number of C-APCs to 37 for CY 2016. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584 through 79585), we finalized another 25 C-APCs for a total of 62 C-APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did not change the total number of C-APCs from 62.

In the CY 2019 OPPS/ASC final rule with comment period, we created three new C-APCs, increasing the total number to 65 (83 FR 58844 through 58846). In the CY 2020 OPPS/ASC final rule with comment period, we created two new C-APCs, increasing the total number to 67 C-APCs (84 FR 61158 through 61166). Most recently, in the CY 2021 OPPS/ASC final rule, we created two new C-APCs, increasing the total number to 69 C-APCs (85 FR 85885).

Under our C-APC policy, we designate a service described by a HCPCS code assigned to a C-APC as the primary service when the service is identified by OPPS status indicator “J1”. When such a primary service is reported on a hospital outpatient claim, taking into consideration the few exceptions that are discussed below, we make payment for all other items and services reported on the hospital outpatient claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a complete comprehensive service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services are packaged into the payments for the primary services.

This results in a single prospective payment for each of the primary, comprehensive services based on the costs of all reported services at the claim level. Services excluded from the C-APC policy under the OPPS include services that are not covered OPD services, services that cannot by statute be paid for under the OPPS, and services that are required by statute to be separately paid. This includes certain mammography and ambulance services that are not covered OPD services in accordance with section 1833(t)(1)(B)(iv) of the Act.

Brachytherapy seeds, which also are required by statute to receive separate payment under section 1833(t)(2)(H) of the Act. Pass-through payment drugs and devices, which also require separate payment under section 1833(t)(6) of the Act. Self-administered drugs (SADs) that are not otherwise packaged as supplies because they are not covered under Medicare Part B under section 1861(s)(2)(B) of the Act.

And certain preventive services (78 FR 74865 and 79 FR 66800 through 66801). A list of services excluded from the C-APC policy is included in Addendum J to the CY 2022 OPPS/ASC final rule (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices ). In the interim final rule with request for comments (IFC) titled, “Additional Policy and Regulatory Revisions in Response to the erectile dysfunction treatment Public Health Emergency”, published on November 6, 2020, we stated that, effective for services furnished on or after the effective date of the IFC and until the end of the PHE for erectile dysfunction treatment, there is an exception to the OPPS C-APC policy to ensure separate payment for new erectile dysfunction treatments that meet certain criteria (85 FR 71158 through 71160).

Under this exception, any new erectile dysfunction treatment that meets the following two criteria will, for the remainder of the PHE for erectile dysfunction treatment, always be separately paid and will not be packaged into a C-APC when it is provided on the same claim as the primary C-APC service. First, the treatment must be a drug or biological product (which could include a blood product) authorized to treat erectile dysfunction treatment, as indicated in section “I. Criteria for Issuance of Authorization” of the FDA letter of authorization for the emergency use of the drug or biological product, or the drug or biological product must be approved by FDA for treating erectile dysfunction treatment.

Second, the emergency use authorization (EUA) for the drug or biological product (which could include a blood product) must authorize the use of the product in the outpatient setting or not limit its use to the inpatient setting, or the product must be approved by FDA to treat erectile dysfunction treatment disease and not limit its use to the inpatient setting. For further information regarding the exception to the C-APC policy for erectile dysfunction treatments, please refer to the November 6, 2020 IFC (85 FR 71158 through 71160). 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”. Contains 8 or more units of services described by HCPCS code G0378 (Hospital observation services, per hour). • Contains services provided on the same date of service or one day before the date of service for HCPCS code G0378 that are described by one of the following codes.

HCPCS code G0379 Start Printed Page 63471 (Direct admission of patient for hospital observation care) on the same date of service as HCPCS code G0378. CPT code 99281 (Emergency department visit for the evaluation and management of a patient (Level 1)). CPT code 99282 (Emergency department visit for the evaluation and management of a patient (Level 2)).

CPT code 99283 (Emergency department visit for the evaluation and management of a patient (Level 3)). CPT code 99284 (Emergency department visit for the evaluation and management of a patient (Level 4)). CPT code 99285 (Emergency department visit for the evaluation and management of a patient (Level 5)) or HCPCS code G0380 (Type B emergency department visit (Level 1)).

HCPCS code G0381 (Type B emergency department visit (Level 2)). HCPCS code G0382 (Type B emergency department visit (Level 3)). HCPCS code G0383 (Type B emergency department visit (Level 4)).

HCPCS code G0384 (Type B emergency department visit (Level 5)). CPT code 99291 (Critical care, evaluation and management of the critically ill or critically injured patient. First 30-74 minutes).

Or HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient). And Does not contain services described by a HCPCS code to which we have assigned status indicator “J1”. The assignment of status indicator “J2” to a specific set of services performed in combination with each other allows for all other OPPS payable services and items reported on the claim (excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS) to be deemed adjunctive services representing components of a comprehensive service and resulting in a single prospective payment for the comprehensive service based on the costs of all reported services on the claim (80 FR 70333 through 70336).

Services included under the C-APC payment packaging policy, that is, services that are typically adjunctive to the primary service and provided during the delivery of the comprehensive service, include diagnostic procedures, laboratory tests, and other diagnostic tests and treatments that assist in the delivery of the primary procedure. Visits and evaluations performed in association with the procedure. Uncoded services and supplies used during the service.

Durable medical equipment as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service. And any other components reported by HCPCS codes that represent services that are provided during the complete comprehensive service (78 FR 74865 and 79 FR 66800). In addition, payment for hospital outpatient department services that are similar to therapy services and delivered either by therapists or nontherapists is included as part of the payment for the packaged complete comprehensive service.

These services that are provided during the perioperative period are adjunctive services and are deemed not to be therapy services as described in section 1834(k) of the Act, regardless of whether the services are delivered by therapists or other nontherapist health care workers. We have previously noted that therapy services are those provided by therapists under a plan of care in accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid for under section 1834(k) of the Act, subject to annual therapy caps as applicable (78 FR 74867 and 79 FR 66800). However, certain other services similar to therapy services are considered and paid for as hospital outpatient department services.

Payment for these nontherapy outpatient department services that are reported with therapy codes and provided with a comprehensive service is included in the payment for the packaged complete comprehensive service. We note that these services, even though they are reported with therapy codes, are hospital outpatient department services and not therapy services. We refer readers to the July 2016 OPPS Change Request 9658 (Transmittal 3523) for further instructions on reporting these services in the context of a C-APC service.

Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and SADs, unless they function as packaged supplies (78 FR 74868 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 indicator “J1” as a single “J1” unit procedure claim (78 FR 74871 and 79 FR 66801).

Line item charges for services included on the C-APC claim are converted to line item costs, which are then summed to develop the estimated APC costs. These claims are then assigned one unit of the service with status indicator “J1” and later used to develop the geometric mean costs for the C-APC relative payment weights. (We note that we use the term “comprehensive” to describe the geometric mean cost of a claim reporting “J1” service(s) or the geometric mean cost of a C-APC, inclusive of all 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 its comprehensive geometric mean costs. For the minority of claims reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned.

If the reported “J1” services on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the same C-APC, we designate the most costly service (at the HCPCS code level) as the primary service for that claim. This process results in initial assignments of claims for the primary services assigned to status indicator “J1” to the most appropriate C-APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity.

Complexity Adjustments. We use complexity adjustments to provide increased payment for certain comprehensive services. We apply a complexity adjustment by promoting qualifying paired “J1” service code combinations or paired code combinations of “J1” services and certain add-on codes (as described further below) from the originating C- Start Printed Page 63472 APC (the C-APC to which the designated primary service is first assigned) to the next higher paying C-APC in the same clinical family of C-APCs.

We apply this type of complexity adjustment when the paired code combination represents a complex, costly form or version of the primary service according to the following criteria. Frequency of 25 or more claims reporting the code combination (frequency threshold). And Violation of the 2 times rule, as stated in section 1833(t)(2) of the Act and section III.B.2.

Of this final rule with comment period, 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 2022, we proposed 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 for “J1” and add-on code combinations for CY 2022, along with all of the other final complexity adjustments, in Addendum J to the CY 2022 OPPS/ASC final rule (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices ).

Addendum J to the CY 2022 OPPS/ASC final rule includes the cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to the CY 2022 OPPS/ASC final 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 finalized 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 four digits of the designated primary service followed by a letter.

For example, the proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), includes all paired code combinations that 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 the CY 2022 OPPS/ASC proposed rule allows stakeholders the opportunity to better assess the impact associated with the proposed assignment of claims with each of the paired code combinations eligible for a complexity adjustment. Comment.

One commenter expressed support of CMS' proposal to maintain existing complexity adjustment code pairs that were in effect for 2021 and to create new complexity adjustments for certain code pairs for CY 2022. Response. We thank the commenter for their support.

Comment. Several commenters requested that CMS modify or eliminate the established C-APC complexity adjustment eligibility criteria of 25 or more claims reporting the code combination (frequency) and a violation of the 2 times rule in the originating C-APC (cost) to allow additional code combinations to qualify for complexity adjustments. These commenters expressed concern that CMS' methodology for determining complexity adjustments is unnecessarily restrictive, specifically the 25-claim threshold.

One commenter also requested that CMS apply the complexity adjustment to all blue light cystoscopy procedures performed with Cysview ®in the HOPD. The specific C-APC complexity adjustments requested by the commenters are listed in Table 1 below. Several commenters reiterated their request to allow clusters of procedures, consisting of a “J1” code-pair and multiple other associated add-on codes used in combination with that “J1” Start Printed Page 63473 code-pair to qualify for complexity adjustments, stating that this may allow for more accurate reflection of medical practice when multiple procedures are performed together or there are certain complex procedures that include numerous add-on codes.

Commenters also requested that CMS continue to monitor and report on the impact of applying complexity criteria on APC assignments for code combinations within C-APCs. Response. We appreciate these comments.

We note that we did not propose that claims with the code combinations suggested by commenters would receive complexity adjustments because they failed to meet either the cost or frequency criteria. We also note that, at this time, we do not believe changes to the C-APC complexity adjustment criteria are necessary or that we should make exceptions to the criteria to allow claims with the code combinations suggested by the commenters to receive complexity adjustments. As we stated in the CY 2017 OPPS/ASC final rule (81 FR 79582), we believe that the complexity adjustment criteria, which require a frequency of 25 or more claims reporting a code combination and a violation of the 2 times rule in the originating C-APC, are appropriate to determine if a combination of procedures represents a complex, costly subset of the primary service that should qualify for the adjustment and be paid at the next higher paying C-APC in the clinical family.

If a code combination meets these criteria, the combination receives payment at the next higher cost C-APC. Code combinations that do not meet these Start Printed Page 63474 criteria receive the C-APC payment rate associated with the primary “J1” service. As we previously stated in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61161), a minimum of 25 claims is already a very low threshold for a national payment system.

Lowering the minimum of 25 claims further could lead to unnecessary complexity adjustments for service combinations that are rarely performed. As stated in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58843), we do not believe that it is necessary to adjust the complexity adjustment criteria to allow claims that include more than two “J1” procedures or procedures that are not assigned to C-APCs to qualify for a complexity adjustment. As previously mentioned, we believe the current criteria are adequate to determine if a combination of procedures represents a complex, costly subset of the primary service.

We will continue to monitor the application of the complexity adjustment criteria. After consideration of the public comments we received on the proposed complexity adjustment policy, we are finalizing the C-APC complexity adjustment policy for CY 2022 as proposed. We are also finalizing the complexity adjustments proposed without modification.

(2) Exclusion of Procedures Assigned to New Technology APCs from the C-APC Policy Services that are assigned to New Technology APCs are typically new procedures that do not have sufficient claims history to establish an accurate payment for the procedures. 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 two years if sufficient data are available.

It also allows us to retain a service in a New Technology APC for more than two years if sufficient data upon which to base a decision for reassignment have not been collected (82 FR 59277). The C-APC payment policy packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. Prior to CY 2019, when a procedure assigned to a New Technology APC was included on the claim with a primary procedure, identified by OPPS status indicator “J1”, payment for the new technology service was typically packaged into the payment for the primary procedure.

Because the new technology service was not separately paid in this scenario, the overall number of single claims available to determine an appropriate clinical APC for the new service was reduced. This was contrary to the objective of the New Technology APC payment policy, which is to gather sufficient claims data to enable us to assign the service to an appropriate clinical APC. To address this issue and ensure that there are sufficient claims data for services assigned to New Technology APCs, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58847), we finalized excluding payment for any procedure that is assigned to a New Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from being packaged when included on a claim with a “J1” service assigned to a C-APC.

In the CY 2020 OPPS/ASC final rule with comment period, we finalized that payment for services assigned to a New Technology APC would be excluded from being packaged into the payment for comprehensive observation services assigned status indicator “J2” when they are included on a claim with a “J2” service starting in CY 2020 (84 FR 61167). We proposed to continue to exclude payment for any procedure that is assigned to a New Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from being packaged when included on a claim with a “J1” or “J2” service assigned to a C-APC. We did not receive any comments on this policy.

We are finalizing as proposed without modification to continue this exclusion policy. (3) Additional C-APCs for CY 2022 In the CY 2022 proposed rule, we proposed to continue to apply the C-APC payment policy methodology. We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583) for a discussion of the C-APC payment policy methodology and revisions.

Each year, in accordance with section 1833(t)(9)(A) of the Act, we review and revise the services within each APC group and the APC assignments under the OPPS. As a result of our annual review of the services and the APC assignments under the OPPS, we did not propose to convert any standard APCs to C-APCs in CY 2022, thus we proposed that the number of C-APCs for CY 2022 would be the same as the number for CY 2021, which is 69 C-APCs. Comment.

One commenter requested that CMS designate APC 5372 (Level 2 Urology and Related Services) as a Comprehensive APC, noting that all other Urology and Related Services APCs are C-APCs and multiple procedures within this APC would qualify for complexity adjustments. Response. We appreciate the commenter's suggestion and will consider it for future rulemaking.

Comment. Several commenters requested that CMS discontinue the C-APC payment policy for all surgical insertion codes required for brachytherapy treatment. The commenters were concerned that the C-APC methodology lacks the charge capture mechanisms to accurately reflect the cost of radiation oncology services, particularly the delivery of brachytherapy for the treatment of cervical cancer.

They also stated that they oppose C-APC payment for cancer care given the complexity of coding, use of serial billing, and the potential for different sites of service for the initial surgical device insertion and subsequent treatment delivery or other supportive services. These commenters suggested that CMS assign brachytherapy procedures to traditional APCs, move brachytherapy procedures to higher paying C-APC, or pay separately for preparation and planning services to fully account for the costs associated with these procedures. Response.

We appreciate the comments. The calculations provided by commenters as to the cost of these services do not match how we calculate C-APC costs. We believe that the current C-APC methodology is appropriately applied to these surgical procedures and is accurately capturing costs.

We will continue to examine these concerns and will determine if any modifications to this policy are warranted in future rulemaking. After consideration of the public comments we received, we are finalizing our C-APC policy and the proposed C-APCs as proposed for CY 2022. Table 2 below lists the final C-APCs for CY 2022, all of which were established in past rules.

All C-APCs are displayed in Addendum J to this CY 2022 OPPS/ASC final rule with comment period (which is available via the internet at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices ). Addendum J to this final rule with comment period also contains all of the data related to the C-APC payment policy methodology, including the list of complexity adjustments and other information for CY 2022. Start Printed Page 63475 Start Printed Page 63476 Start Printed Page 63477 c.

Calculation of Composite APC Criteria-Based Costs As discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66613), we believe it is important that the OPPS enhance incentives for hospitals to provide necessary, high quality care as efficiently as possible. For CY 2008, we developed composite APCs to provide a single payment for groups of services that are typically performed together during a single clinical encounter and that result in the provision of a complete service. Combining payment for multiple, independent services into a single OPPS payment in this way enables hospitals to manage their resources with maximum flexibility by monitoring and adjusting the volume and efficiency of services themselves.

An additional advantage to the composite APC model is that we can use data from correctly coded multiple procedure claims to calculate payment rates for the specified combinations of services, rather than relying upon single procedure claims which may be low in volume and/or incorrectly coded. Under the OPPS, we currently have composite policies for mental health services and multiple imaging services. (We note that, in the CY 2018 OPPS/ASC final rule with comment period, we finalized a policy to delete the composite APC 8001 (LDR Prostate Brachytherapy Composite) for CY 2018 and subsequent years.) We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66611 through 66614 and 66650 through 66652) for a full discussion of the development of the composite APC methodology, and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241 through 59242 and 59246 through 52950) for more recent background.

(1) Mental Health Services Composite APC We proposed 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. In the CY 2017 OPPS/ASC final rule with comment period (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 APC 5863 (Partial Hospitalization (3 or more services per day)).

In the CY 2018 OPPS/ASC proposed rule and final rule with comment period (82 FR 33580 through 33581 and 59246 through 59247, respectively), we proposed and finalized the policy for CY 2018 and subsequent years that, when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services will be paid through composite APC 8010 (Mental Health Services Composite). In addition, we set the payment rate for composite APC 8010 for CY 2018 at the same payment rate that will be paid for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and finalized a policy that the hospital will continue to be paid the payment rate for composite APC 8010. Under this policy, the I/OCE will 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. We proposed 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 for CY 2022.

In addition, we proposed to set the payment rate for composite APC 8010 at the same payment rate that we proposed 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 proposed payment rate for composite APC 8010. We did not receive any public comment on these proposals and are finalizing them as proposed. In particular, we are finalizing our proposal, without modification, 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 for CY 2022.

In addition, we are finalizing our proposal to set the payment rate for composite APC 8010 for CY 2022 at the same payment rate that we set for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital. (2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) Effective January 1, 2009, we provide a single payment each time a hospital submits a claim for more than one imaging procedure within an imaging family on the same date of service, to reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session (73 FR 41448 through 41450). We utilize three imaging families based on imaging modality for purposes of this methodology.

(1) Uasound. (2) computed tomography (CT) and computed tomographic angiography (CTA). And (3) magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA).

The HCPCS codes subject to the multiple imaging composite policy and their respective families are listed in Table 3 below. While there are three imaging families, there are five multiple imaging composite APCs due to the statutory requirement under section 1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging services provided with and without contrast. While the uasound procedures included under the policy do not involve contrast, both CT/CTA and MRI/MRA scans can be Start Printed Page 63478 provided either with or without contrast.

The five multiple imaging composite APCs established in CY 2009 are. APC 8004 (Uasound Composite). APC 8005 (CT and CTA without Contrast Composite).

APC 8006 (CT and CTA with Contrast Composite). APC 8007 (MRI and MRA without Contrast Composite). And APC 8008 (MRI and MRA with Contrast Composite).

We define the single imaging session for the “with contrast” composite APCs as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the “with contrast” composite APC. We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service.

The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569). For CY 2022, we proposed to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology.

We continue to believe that this policy would reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session. For CY 2022, except where otherwise indicated, we proposed to use the costs derived from CY 2019 claims data to set the proposed CY 2022 payment rates. Therefore, for CY 2022, the 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 CY 2019 claims available for the CY 2022 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 have used to calculate the geometric mean costs for these composite APCs since CY 2014, as described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging HCPCS codes referred to as “overlap bypass codes” that we removed from the bypass list for purposes of calculating the proposed multiple imaging composite APC geometric mean costs, in accordance with our established methodology as stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918), are identified by asterisks in Addendum N to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website[] ) and are discussed in more detail in section II.A.1.b. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42034 through 42040).

For the CY 2022 OPPS/ASC proposed rule, we were able to identify approximately 1.04 million “single session” claims out of an estimated 2.2 million potential claims for payment through composite APCs from our ratesetting claims data, which represents approximately 47 percent of all eligible claims, to calculate the proposed CY 2022 geometric mean costs for the multiple imaging composite APCs. Table 2 of the CY 2022 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 2022 (86 FR 42037 through 42040). We did not receive any public comments on these proposals.

We are finalizing our proposal to continue the use of multiple imaging composite APCs to pay for services providing more than one imaging procedure from the same family on the same date, without modification. Table 3 below lists the HCPCS codes that will be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC final geometric mean costs for CY 2022. Start Printed Page 63479 Start Printed Page 63480 Start Printed Page 63481 Start Printed Page 63482 Start Printed Page 63483 3.

Changes to Packaged Items and Services a. Background and Rationale for Packaging in the OPPS Like other prospective payment systems, the OPPS relies on the concept of averaging to establish a payment rate for services. The payment may be more or less than the estimated cost of providing a specific service or a bundle of specific services for a particular beneficiary.

The OPPS packages payments for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. Our packaging policies support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. For example, where there are a variety of devices, drugs, items, and supplies that could be used to furnish a service, some of which are more costly than others, packaging encourages hospitals to use the most cost-efficient item that meets the patient's needs, rather than to routinely use a more expensive item, which may occur if separate payment is provided for the item.

Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time.

Finally, packaging may reduce the importance of refining service-specific payment because packaged payments include costs associated with higher cost cases requiring many ancillary items and services and lower cost cases requiring fewer ancillary items and services. Because packaging encourages efficiency and is an essential component of a prospective payment system, packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service has been a fundamental part of the OPPS since its implementation in August 2000. For an extensive discussion of the history and background of the OPPS packaging policy, we refer readers to the CY 2000 OPPS final rule with comment period (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), the CY 2017 OPPS/ASC final rule with comment period (81 FR 79592), the CY 2018 OPPS/ASC final rule with comment period (82 FR 59250), the CY 2019 OPPS/ASC final rule with comment period (83 FR 58854), the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173), and the CY 2021 OPPS/ASC final rule with comment period (85 FR 85894).

As we continue to develop larger payment groups that more broadly reflect services provided in an encounter or episode of care, we have expanded the OPPS packaging policies. Most, but not necessarily all, categories of items and services currently packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching goal is to make payments for all services under the OPPS more consistent with those of a prospective payment system and less like those of a per-service fee schedule, which pays separately for each coded item.

As a part of this effort, we have continued to examine the payment for items and services provided under the OPPS to determine which OPPS services can be packaged to further achieve the objective of advancing the OPPS toward a more prospective payment system. For CY 2022, we examined the items and services currently provided under the OPPS, reviewing categories of integral, ancillary, supportive, dependent, or adjunctive items and services for which we believe payment would be appropriately packaged into payment for the primary service that they support. Specifically, we examined the HCPCS code definitions (including CPT code descriptors) and hospital outpatient department billing patterns to determine whether there were categories of codes for which packaging would be appropriate according to existing OPPS packaging policies or a logical expansion of those existing OPPS packaging policies.

For CY 2022, we proposed no changes to the overall packaging policy previously discussed. We proposed to continue to conditionally package the costs of selected newly identified ancillary services into payment for a primary service where we believe that the packaged item or service is integral, ancillary, supportive, dependent, or adjunctive to the provision of care that was reported by the primary service HCPCS code. Below we discuss a proposed change to an ASC payment system packaging policy for CY 2022 and solicit comment on potential additional changes to that policy and application of that policy to the OPPS.

We did not receive any public comments on the overall OPPS packaging policy and are finalizing our packaging policy as proposed. Specific packaging concerns are discussed in detail in their respective sections throughout this final rule with comment period. B.

ASC Payment System Policy for Non-Opioid Pain Management Drugs and Biologicals That Function as Surgical Supplies (1) Background on OPPS/ASC Non-Opioid Pain Management Packaging Policies In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the framework of existing packaging categories, such as drugs that function as supplies in a surgical procedure or diagnostic test or procedure, we requested stakeholder feedback on common clinical scenarios involving currently packaged items and services described by HCPCS codes that stakeholders believe should not be packaged under the OPPS. We also expressed interest in stakeholder feedback on common clinical scenarios Start Printed Page 63484 involving separately payable HCPCS codes for which payment would be most appropriately packaged under the OPPS. Commenters who responded to the CY 2018 OPPS/ASC proposed rule expressed a variety of views on packaging under the OPPS.

While several commenters supported maintaining packaging policies, most of the public comments ranged from requests to unpackage most items and services that are unconditionally packaged under the OPPS, including drugs and devices, to specific requests for separate payment for a particular drug or device. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 52485), we reiterated our position with regard to payment for Exparel®, a non-opioid analgesic that functions as a surgical supply, stating that we believed that payment for this drug is appropriately packaged with the primary surgical procedure. We also stated in the CY 2018 OPPS/ASC final rule with comment period that we would continue to explore and evaluate packaging policies under the OPPS and consider these policies in future rulemaking.

In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58855), we explained that, in addition to stakeholder feedback regarding OPPS packaging policies, the President's Commission on Combating Drug Addiction and the Opioid Crisis (the Commission) [] had recently recommended that CMS examine payment policies for certain drugs that function as a supply, specifically non-opioid pain management treatments. The Commission was established in 2017 to study the scope and effectiveness of the Federal response to drug addiction and the opioid crisis and to make recommendations to the President for improving the Federal response to the crisis. The Commission's report included a recommendation for CMS to “.

. . Review and modify ratesetting policies that discourage the use of non-opioid treatments for pain, such as certain bundled payments that make alternative treatment options cost prohibitive for hospitals and doctors, particularly those options for treating immediate postsurgical pain.

. . .” We explained that, as discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37068 through 37071), in response to stakeholder comments on the CY 2018 OPPS/ASC proposed rule and in light of the recommendations regarding payment policies for certain drugs, we had recently evaluated the impact of our packaging policy for drugs that function as a supply when used in a surgical procedure on the utilization of these drugs in both the hospital outpatient department and the ASC setting.

We stated that, although we found increases in utilization of Exparel when it was paid under the OPPS, we noticed decreased utilization of Exparel under the ASC payment system. Accordingly, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58855 through 58860), we finalized a policy to unpackage and pay separately at ASP+6 percent for non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting for CY 2019, due to decreased utilization in the ASC setting. Historically, we stated that 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).

On October 24, 2018, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT) Act (Pub. L. 115-271) was enacted.

Section 1833(t)(22)(A)(i) of the Act, as added by section 6082(a) of the SUPPORT Act, states that the Secretary must review payments under the OPPS for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. As part of this review, under section 1833(t)(22)(A)(iii) of the Act, the Secretary must consider the extent to which revisions to such payments (such as the creation of additional groups of covered outpatient department (OPD) services to separately classify those procedures that utilize opioids and non-opioid alternatives for pain management) would reduce the payment incentives for using opioids instead of non-opioid alternatives for pain management. In conducting this review and considering any revisions, the Secretary must focus on covered OPD services (or groups of services) assigned to C-APCs, APCs that include surgical services, or services determined by the Secretary that generally involve treatment for pain management.

If the Secretary identifies revisions to payments pursuant to section 1833(t)(22)(A)(iii) of the Act, section 1833(t)(22)(C) of the Act requires the Secretary to, as determined appropriate, begin making revisions for services furnished on or after January 1, 2020. Revisions under this paragraph are required to be treated as adjustments for purposes of paragraph (9)(B) of the Act, which requires any adjustments to be made in a budget neutral manner. Section 1833(i)(8) of the Act, as added by section 6082(b) of the SUPPORT Act, requires the Secretary to conduct a similar type of review as required for the OPPS and to make revisions to the ASC payment system in an appropriate manner, as determined by the Secretary.

For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), as required by section 1833(t)(22)(A)(i) of the Act, we reviewed payments under the OPPS for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. We used currently available data to analyze the payment and utilization patterns associated with specific non-opioid alternatives, including drugs that function as a supply, nerve blocks, and neuromodulation products, to determine whether our packaging policies may have reduced the use of non-opioid alternatives. For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), we proposed to continue our policy to pay separately at ASP+6 percent for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting and to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting for CY 2020.

In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173 through 61180), after reviewing data from stakeholders and Medicare claims data, we did not find compelling evidence to suggest that revisions to our OPPS payment policies for non-opioid pain management alternatives were necessary for CY 2020. We finalized our proposal to continue to unpackage and pay separately at ASP+6 percent for non-opioid pain management drugs that function as surgical supplies when furnished in the ASC setting for CY 2020. Under this Start Printed Page 63485 policy, for CY 2020, the only drug that qualified for separate payment in the ASC setting as a non-opioid pain management drug that functions as a surgical supply was Exparel.

In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896 to 85899), we continued the policy to pay separately at ASP+6 percent for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting and to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting for CY 2021. For CY 2021, only two drug products met the criteria as non-opioid pain management drugs that function as surgical supplies in the ASC setting, and thus receive separate payment under the ASC payment system. These drugs are Exparel and Omidria.

(2) CY 2022 Evaluation of Payments for Opioids and Non-Opioid Alternatives for Pain Management and Comment Solicitation on Extending the Policy to the OPPS As noted in the background above, over the past several years we have reviewed non-opioid alternatives and evaluated the impact of our packaging policies on access to these products. In our previous evaluations, we used currently available data to analyze the payment and utilization patterns associated with specific non-opioid alternatives, including drugs that function as a supply, nerve blocks, and neuromodulation products, to determine whether our packaging policies may have reduced the use of non-opioid alternatives. In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896 through 85899), we stated that we would continue to analyze the issue of access to non-opioid pain management alternatives in the HOPD and the ASC settings as part of any reviews we conduct under section 1833(t)(22)(A)(ii) of the Act, with a specific focus on whether there is evidence that our current payment policies are creating access barriers for other non-opioid pain management alternatives for which there is evidence-based support that these products help to deter or avoid prescription opioid use and opioid use disorder.

For CY 2022, we conducted a subsequent review of payments for opioids and non-opioid alternatives as authorized by section 1833(t)(22)(A)(ii) of the Act. We analyzed utilization patterns in both the HOPD and ASC settings for multiple non-opioid pain management drugs, including the two drugs that are receiving separate payment when furnished in the ASC setting under our current policy for CY 2021. Exparel and Omidria.

The results of our CY 2022 review were similar to the results of our reviews in previous years. Generally, utilization of non-opioid pain management drugs continued to increase year after year in the HOPD setting, where payment for these non-opioid alternatives is packaged with the payment for the associated surgical procedure. In the ASC setting, where Exparel and Omidria are separately paid, we also saw utilization increases for these two drugs.

However, in the ASC setting, the rate of increase in utilization is much more substantial than in the HOPD setting. In particular, in the HOPD setting where payment for Exparel is packaged, utilization of Exparel increased from 19.7 million units in 2019 to 21.8 million units in 2020, whereas utilization of Exparel increased from 1.5 million units in 2019 to 3.3 million units in 2020 in the ASC setting, where Exparel is separately paid. We note that a number of reasons could explain this discrepancy other than our policy to pay separately for Exparel under the ASC payment system, including evolving clinical practice in the ASC setting, which could increase the number of surgeries performed in ASCs for which Exparel is an appropriate pain management drug.

We have consistently explained, including as recently as in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85894), that our packaging policies support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. For example, where there are a variety of devices, drugs, items, and supplies that could be used to furnish a service, some of which are more costly than others, packaging encourages hospitals to use the most cost-efficient item that meets the patient's needs, rather than to routinely use a more expensive item, which may occur if separate payment is provided for the item. We have not found conclusive evidence to support the notion that the OPPS packaging policy, under which non-opioid drugs and biologicals are packaged when they function as a supply in a surgical procedure, has created financial incentives to use opioids instead of evidence-based non-opioid alternatives for pain management.

For example, we have not observed decreased utilization of non-opioid alternatives for pain management in the HOPD setting. Therefore, for CY 2022, we proposed to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting. As explained earlier in this section, while packaging encourages efficiency and is a fundamental component of a prospective payment system, where there is an overriding policy objective to reduce disincentives for use of non-opioid products to the extent possible, we believe it may be appropriate to establish payment that reduces disincentives for use of non-opioid drugs and biologicals for pain management when there is evidence that use of those products reduces unnecessary opioid use.

For these reasons, we solicited comment as to whether we should expand our current policy that only applies in the ASC setting—to pay separately at ASP+6 percent for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting—to the HOPD setting. In the CY 2022 OPPS/ASC proposed rule, we stated we were interested in learning from stakeholders whether similar disincentives for the use of non-opioid pain management drugs and biologicals identified in the ASC setting exist in the HOPD setting. Previously, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 59067), we identified several disincentives that were unique to the ASC setting compared to the HOPD setting, including the fact that ASCs tend to provide specialized care and a more limited range of services in comparison to hospital outpatient departments.

Also, ASCs are paid, in aggregate, approximately 55 percent of the OPPS rate. Therefore, fluctuations in payment rates for specific services may affect these providers more acutely than hospital outpatient departments. And ASCs may be less likely to choose to furnish non-opioid postsurgical pain management treatments, which are typically more expensive than opioids, as a result.

Additionally, we sought comment on what evidence supports the expansion of this policy to the HOPD setting, including the clinical benefit that Medicare beneficiaries may receive from the availability of separate or modified payment for these products in the HOPD setting. Finally, in the proposed rule we sought comment on if we should treat Start Printed Page 63486 products the same depending on the setting, ASC or HOPD. For example, we sought comment on whether products should have the same eligibility requirements to qualify for revised payment in the ASC and the HOPD settings.

We also sought comment on how the additional comment solicitations described below, which refer to the ASC setting, could also be applied to the HOPD setting. Comment. MedPAC commented that while it appreciated CMS's interest in addressing the issue of opioid overuse it continued to support a policy that maintains the packaging of drugs that function as supplies in surgical procedures.

MedPAC stated that this policy is contrary to CMS's efforts to increase the size of payment bundles in the OPPS to increase incentives for efficient delivery of care. Response. We appreciate this feedback.

We agree that packaging policies are a fundamental component of the OPPS and ASC payment systems. We strive to balance the importance of our packaging policies with the importance of addressing the opioid epidemic. In this specific scenario, we believe separate payment in the ASC setting for non-opioid pain management drugs and biologicals that function as surgical supplies is appropriate given the financial disincentives we have observed for these products in the ASC setting.

As previously discussed, we identified several disincentives that were unique to the ASC setting compared to the HOPD setting, including the fact that ASCs tend to provide specialized care and a more limited range of services in comparison to hospital outpatient departments. Comment. Most commenters were in favor of expanding the policy to provide separate payment under the ASC payment system for certain non-opioid pain management drugs that function as surgical supplies to the HOPD setting.

Many providers commented that non-opioid pain management therapies are often superior to opioid-based ones in reducing pain, and indicated that they generally would prefer to use non-opioid therapies. However, many stated that payment dictated whether they could use a specific therapy. As such, commenters stated that the pain management therapies available in the ASC setting are not used to the same degree as in the HOPD setting.

Commenters stated that although there has not been a drastic decrease in HOPD utilization of non-opioid pain management drugs, the utilization of opioid alternatives could be much higher if separate payment for these products was provided. Similarly, several commenters acknowledged that the disincentives to provide non-opioid pain management drugs in the HOPD setting were not as substantial as the ASC setting. However, according to these stakeholders, there are still financial disincentives to use opioids instead of opioid alternatives in the HOPD setting.

A drug manufacturer discussed its view on the disparities in utilization and access to non-opioid pain management therapies in the HOPD setting compared to the ASC setting. Based on this commenter's geo-sociodemographic analysis, they believe that ASC access to their drug outpaced access in the HOPD setting due to CMS payment policies. A few drug manufacturers provided specific data on utilization of their individual products.

Omeros, the manufacturer of the drug Omidria, cited that the drug's utilization had, in their view, decreased in the HOPD setting as a result of CMS packaging polices. Many commenters suggested that opioids were more cost effective for their HOPD facilities to use compared to non-opioid pain management drugs due to CMS payment policies. Some commenters suggested that a greater number of surgeries, particularly those with higher acuity and complexity that require pain management drugs, occur in the HOPD setting, compared to the ASC setting.

The commenters contended that separate payment for non-opioid pain management drugs in this setting could potentially increase access to these treatments. Therefore, the commenters encouraged CMS to expand this policy to the HOPD setting. The commenters generally encouraged payment parity across the ASC and HOPD settings in order to enhance site neutrality and prevent a diversion of patients to the ASC setting based solely on the availability of separate payment for non-opioid pain management drugs.

MedPAC had concerns that our proposed policy would further distort payment differences between two care settings that are the sites of many of the same services, creating financial incentives for providers to direct patients to one setting of care. Many commenters and providers pointed to the clinical benefit of non-opioid treatments, and encouraged CMS to pay separately, incentivize, or otherwise recognize the value of these drugs in the HOPD setting, regardless of utilization patterns. Commenters provided literature supporting the benefits of non-opioid pain management approaches, including how certain non-opioid pain management products were effective for pain and reduced opioid consumption.

Response. We appreciate the many detailed comments we received from a wide variety of stakeholders in response to our comment solicitation on expanding our non-opioid pain management payment policy to the HOPD setting as well as those regarding the clinical benefit of non-opioid pain management treatments used in their clinical practice. As discussed in the CY 2022 OPPS/ASC proposed rule, we did not make a proposal to expand this policy to the HOPD setting based on many factors, including our continued claims analysis that demonstrates increasing utilization year after year of these products in the HOPD setting.

In the proposed rule, we described our claims analysis for Exparel, a drug for which we have more than five years of reliable claims data. As stated in the proposed rule, even while Exparel was packaged in the HOPD setting, claims data shows that utilization continued to steadily increase year over year. For other drugs described by stakeholders, we found similar increases over years of claims data.

We will continue to track the utilization in the HOPD and ASC settings for all of these drugs. However, as Exparel is the only drug that has been not recently been on pass-through and has been packaged in the HOPD setting over the last three years, we believe that Exparel's utilization is a good indicator of whether our payment policies are causing disincentives for non-opioids in the HOPD setting. We have explained in several prior rulemakings, including in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85894), that 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.

As previously discussed, we strive to balance the importance of our packaging policies with the importance of addressing the opioid epidemic. In this specific scenario, we believe separate payment in the ASC setting for non-opioid pain management drugs and biologicals that function as surgical supplies is appropriate, given the financial disincentives we have observed for these products in the ASC setting. We identified several disincentives that were unique to the ASC setting compared to the HOPD setting, including the fact that ASCs tend to provide specialized care and a more limited range of services in comparison to hospital outpatient departments.

Also, ASCs are paid, in aggregate, approximately 55 percent of the OPPS Start Printed Page 63487 rate. Therefore, fluctuations in payment rates for specific services may affect these providers more acutely than hospital outpatient departments. And ASCs may be less likely to choose to furnish non-opioid postsurgical pain management treatments, which are typically more expensive than opioids, as a result.

We have not observed the same financial disincentives in the HOPD setting. We have also not observed conclusive trends that our packaging policies for non-opioid pain management are shifting patients from the HOPD setting to the ASC setting. After reviewing the public comments received, as described previously, we have not found conclusive evidence to support the notion that the OPPS packaging policy, under which non-opioid drugs and biologicals are packaged when they function as a supply in a surgical procedure, has created financial incentives to use opioids instead of evidence-based non-opioid alternatives for pain management.

Our goal is to eliminate the disincentive to use non-opioid pain management drugs, rather than to incentivize products in the HOPD setting as some commenters have suggested. At this time, we have not observed any clear and conclusive financial disincentive to use non-opioid pain management drugs over opioids in the HOPD setting. However, based on the comments we received, we will continue to carefully analyze utilization data and engage with stakeholders.

Therefore, for CY 2022, we are finalizing as proposed our proposal to continue to package payment under the OPPS for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the HOPD setting. (3) Criteria for Eligibility for Separate Payment Under the ASC Payment System for Non-Opioid Pain Management Drugs and Biologicals That Function as Surgical Supplies As described in section 1833(t)(22)(A)(i) of the Act, the Secretary shall conduct a review of payments for opioids and evidence-based non-opioid alternatives for pain management with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. In any future reviews the Secretary may determine appropriate to conduct under section 1833(t)(22)(A)(ii) of the Act, we believe it is important to establish the evidence base for non-opioid alternatives for pain management when evaluating whether current payment policies result in an incentive for providers to use opioids instead of such evidence-based non-opioid alternatives for pain management.

Accordingly, for CY 2022 and subsequent years, we proposed two criteria that non-opioid pain management drugs and biologicals would be required to meet to be eligible for a payment revision under the ASC payment system in accordance with section 1833(t)(22)(C). The proposed criteria were intended to identify non-opioid pain management drugs and biologicals that function as supplies in surgical procedures for which revised payment under the ASC payment system would be appropriate. Comment.

Most commenters supported continuing our policy of separate payment for non-opioid pain management drugs that function as surgical supplies in the ASC setting. Commenters believe continuing separate payment in the ASC setting is essential given the continued overall low utilization of these drugs in the ASC setting and the positive clinical benefit the drugs provide. Response.

We thank commenters for their support for our proposal. In the following sections we discuss in greater detail the specific aspects of the policy that commenters addressed. Comment.

MedPAC expressed reservations regarding our policy to pay ASCs separately for non-opioid pain management drugs that function as supplies. It stated this policy is contrary to CMS's policy efforts to increase the size of payment bundles in order to increase incentives for efficient delivery of care. Additionally, it stated paying separately in the ASC would distort payment differences between the ASC and HOPD settings.

Generally, MedPAC supported a policy that maintains the packaging of drugs that function as supplies in surgical procedures, especially in the absence of evidence in peer-reviewed publications indicating that the drug in question reduces the use of opioids. Response. We appreciate this comment and agree with the importance of maintaining our overarching packaging policies in the OPPS and ASC payment systems.

However, given the seriousness of the opioid epidemic, we continue to believe this policy plays an important role in maintaining beneficiary access and enhancing patient care in the ASC setting by eliminating the financial disincentive to use non-opioid pain management drugs that function as surgical supplies over opioids. Based on public comments received, for CY 2022, we are finalizing our proposal as proposed to continue our current policy to pay separately for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the ASC setting. We are also finalizing the new additional eligibility criteria we proposed for this policy, as discussed in the following section.

Specifically, for CY 2022, we proposed the following criteria that non-opioid pain management drugs and biologicals that function as surgical supplies would be required to meet to be eligible for separate payment under the ASC payment system in accordance with section 1833(t)(22)(C) of the Act. Criterion One. FDA Approval and FDA-Approved Indication for Pain Management or Analgesia We proposed that the drug or biological product must be safe and effective, as determined by FDA.

We proposed that the drug must be approved under a new drug application under section 505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), under an abbreviated new drug application under section 505(j), or, in the case of a biological product, be licensed under section 351 of the Public Health Service Act (the PHS Act). We further proposed that the drug or biological must also have an FDA-approved indication for pain management or analgesia. We believe FDA approval is an appropriate requirement for a drug or biological to be eligible for this policy because FDA reviews new drugs and biologicals for safety and effectiveness, which would allow us to identify safe and effective non-opioid products to which this separate payment policy would apply.

Given that FDA has an existing and detailed review process already in place, we believe it would be appropriate and administratively efficient to utilize FDA approval as a requirement to ensure that the new drugs and biologicals approved under this policy are safe and effective for their intended use. We believe the vast majority of drugs and biologicals on the market have undergone FDA review and approval, and we do not anticipate this criterion would prevent otherwise eligible drugs or biologicals from qualifying. In addition, section 1833(t)(22)(A) of the Act, our current policy, and our proposed policy all focus on pain management products.

Specifically, section 1833(t)(22)(A) of the Act refers to reviews of opioid and evidence-based non-opioid products for pain management. Therefore, we proposed to require an FDA-approved indication for pain management or analgesia for a drug or biological to qualify as a pain management product. Start Printed Page 63488 The FDA approval process would also allow us to confirm that a drug or biological is, in fact, a non-opioid.

Drugs and biologicals that are characterized as opioids or opioid agonists in the labeling for the FDA-approved product would not be eligible for separate payment under this policy. Comment. Many commenters recommended CMS finalize its proposal to require an FDA-approved indication for pain management or analgesia for a drug or biological to qualify as a pain management product.

Numerous commenters believe that this criterion is objective and would provide a transparent requirement for this policy moving forward. Commenters stated that FDA has a thorough and comprehensive process for evaluating drugs for approval and for specific FDA-approved indications. Other commenters did not express outright support for this criterion, but rather said they were not opposed to it.

Generally, commenters were in favor of establishing an FDA approval requirement. Response. We thank commenters for their support.

As described in our proposal, we agree with the importance of utilizing FDA approval and an indication for pain management as a criterion for separate payment for eligible non-opioids. Comment. Some commenters did not support requiring a specific FDA-approved indication for pain management or analgesia because the commenters believed this requirement may limit the number of products to which the policy would apply.

One commenter asked us to clarify whether an FDA-approved indication for the treatment of pain would be considered appropriate and satisfy this criterion. One drug manufacturer more generally asked for flexibility in the exact FDA-approved indication. This commenter stated CMS should allow flexibility for a variety of indication statements that demonstrate that a drug mitigates or otherwise alleviates pain.

Additionally, this commenter asked CMS to clarify if providing a drug during the pre-operative, post-operative, or intraoperative period could potentially qualify under the proposed policy. Some commenters asked CMS to expand this FDA-approved indication criterion to include anesthesia drugs, drugs used to treat inflammation, or more generally, any drugs that may have pain management properties. An additional commenter suggested limiting eligibility to drugs or biologicals with more restrictive FDA-approved indications, such as those drugs with opioid-sparing pain management indications.

Response. Regarding comments on a specific FDA-approved indication, we believe an FDA-approved indication for pain management or analgesia is appropriate for this policy. Section 1833(t)(22) of the Act required us to assess incentives to use opioids rather than non-opioid products used for pain management.

We believe using the FDA-approved indications as a method to determine which drug products are safe and effective for pain management is appropriate. Therefore, we do not believe drugs or biologicals that do not have an FDA—approved indication for pain management or as an analgesic, such as certain anesthesia drugs mentioned by stakeholders, would be appropriate under this policy. We do believe “treatment of pain” as described by one commenter, would be an appropriate indication to satisfy this criterion.

In response to the recommendation that we include drugs used to treat inflammation, or more generally, any drugs that may have pain management properties, we are not modifying our proposal to include these types of drugs in the definition of an FDA-approved indication for pain management or analgesia. Additionally, we remind commenters that 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 (83 FR 58855). Additionally, a drug product must meet all other requirements for payment and coverage under Medicare Part B in order to be paid and covered under this policy.

We believe including those drugs with FDA-approved indications for pain management or analgesia will capture the appropriate drug products intended for this policy without being so broad as to include drugs that may not be used for pain management or so restrictive as to exclude potentially useful non-opioid pain management products. Based on our review of public comments, we are finalizing criterion one as proposed, under which the drug or biological product must be safe and effective, as determined by FDA, and that the drug must be approved under a new drug application under section 505(c) of FDCA, under an abbreviated new drug application under section 505(j), or, in the case of a biological product, be licensed under section 351 of the PHS Act. We are also finalizing for CY 2022 as part of criterion one the requirement that the drug or biological also have an FDA-approved indication for pain management or analgesia.

Criterion Two. Cost of the Product Currently under the OPPS, drugs that are not policy-packaged are subject to the drug 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 at $50 per administration during CYs 2005 and 2006.

We set the packaging threshold for establishing separate APCs for drugs and biologicals through annual notice and comment rulemaking. The proposed per-day drug packaging threshold for CY 2022 was $130, and the finalized per-day drug packaging threshold for CY 2022 is $130, as described in V.B.1.a of this final rule with comment period. As our second criterion, we proposed that a drug or biological would only be eligible for a payment revision under the ASC payment system in accordance with section 1833(t)(22)(C) of the Act if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a.

Of this final rule with comment period. We believe this is an appropriate requirement because we believe that not all non-opioid alternative treatments are equally disincentivized by our packaging policies. In particular, when the cost of non-opioid drugs and biologicals falls below the packaging threshold of $130 per-day, we believe the drug does not generally have a significant impact on the overall procedure costs.

Therefore, we believe use of these drugs and biologicals is less likely to be disincentivized by CMS packaging policies. However, when the per-day cost of the drug is above the drug packaging threshold, we believe the cost of these drugs or biologicals is more likely to have a significant impact on the overall procedure costs. Section 1833(t)(22)(A)(i) of the Act discusses financial incentives to use opioids instead of non-opioid alternative treatments.

As such, we do not believe non-opioid pain management drugs that are lower in cost are generally disincentivized by our packaging policies, as their cost is more easily absorbed into the payment for the primary procedure in which they are used when compared to drugs and biologicals with costs above the threshold. We proposed to use the existing OPPS drug packaging threshold as it is familiar to stakeholders and its application to drugs and biologicals under this policy creates uniformity across the OPPS and ASC payment systems. Therefore, CMS proposed that drugs and biologicals would be required to have a per-day cost that exceeds the drug packaging threshold that CMS sets Start Printed Page 63489 annually through notice and comment rulemaking.

We also believe the use of this threshold as an eligibility criterion for drugs under consideration for separate payment under this policy is appropriate, as it conforms with the broader goals of the OPPS and ASC payment systems. Like other prospective payment systems, the OPPS relies on the concept of averaging to establish a payment rate for services. The payment may be more or less than the estimated cost of providing a specific service or a bundle of specific services for a particular beneficiary.

The OPPS packages payments for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. Our packaging policies, including the drug packaging threshold, support our strategic goal of using larger payment bundles to maximize hospitals' incentives to provide care in the most efficient manner. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time.

For the reasons mentioned above, we believe it is appropriate to continue to package drugs that would otherwise qualify for separate payment under this policy where their per-day cost is below the OPPS drug packaging threshold. Comment. Most commenters supported this criterion.

Some commenters stated that they agreed with CMS's rationale that use of drugs and biologicals with per-day costs below the packaging threshold is not generally disincentivized by CMS packaging policies. Commenters generally thought this was a clear, transparent, and objective criterion. Other commenters did not express outright support for this criterion but stated that they were not opposed to it.

Response. We thank commenters for their support of this proposed criterion. Comment.

A few commenters stated that non-opioid pain management drugs that fall below the drug packaging threshold are still expensive relative to opioids, and therefore, the commenters believed CMS should not finalize a cost threshold for this policy. Specifically, the manufacturer of Anjeso (HCPCS code J1738. Injection, meloxicam, 1 mg ), Baudax Bio, supported CMS adopting policies that encourage use of non-opioid pain alternatives.

However, they recognized that the per-day cost of their product fell below the drug packaging threshold and disagreed with CMS's proposed criterion two regarding per-day cost, because they indicated that the relative cost of opioids is still less than most non-opioid pain management products. Other commenters recommended that CMS pay for drugs and biologicals with per-day costs that fall below the drug packaging threshold, such as intravenous (IV) acetaminophen. Response.

We thank the commenters for their feedback on this proposed criterion. At this time, we continue to believe that drugs and biologicals with per-day costs below the OPPS drug packaging threshold are not generally disincentivized by CMS packaging policies, as the drug cost is less likely to represent a substantial portion of the payment rate of the primary procedure in which the product is used. This criterion aligns with our policy objective of eliminating financial disincentives to use of non-opioid pain management products.

Based on our rationale described above and feedback from stakeholders, we believe it is appropriate to finalize the second criterion as proposed. For CY 2022, we are finalizing our proposal that a non-opioid pain management drug or biological that functions as a supply in a surgical procedure would only be eligible for separate payment under the ASC payment system if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period.

In addition, we proposed that non-opioid drugs and biologicals currently receiving transitional drug pass-through status in the OPPS would not be candidates for this policy as they are already paid separately under the OPPS and ASC payment system. We proposed that once transitional drug pass-through status expires, the non-opioid drug or biological may qualify for separate payment under the ASC payment system if it meets the proposed eligibility requirements. Comment.

Commenters requested that CMS determine the payment status of non-opioid drugs and biologicals after pass-through status expires as soon as possible through rulemaking. Response. We thank commenters for their feedback.

We will make payment determinations for applicable drugs in the appropriate calendar year rule. For example, those drugs that may be eligible for separate payment under this policy for the first time in CY 2023 will be discussed during the CY 2023 rulemaking cycle and evaluated against the appropriate eligibility criteria for that year. Based on stakeholder feedback, we are finalizing as proposed that non-opioid pain management drugs and biologicals that function as supplies in surgical procedures that are already paid separately, or have transitional drug pass-through status under the OPPS, would not be candidates for this policy as they are already paid separately under the OPPS and ASC payment system.

We also note that if a product has not received transitional pass-through status in the OPPS and ASC settings, separate payment in the ASC setting through this policy for non-opioid pain management drugs that function as surgical supplies does not preclude the manufacturer from applying for and receiving transitional pass-through status for their drug or biological if the drug or biological meets the criteria for transitional drug pass-through status. Please see section V.A., OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals, of this CY 2022 OPPS/ASC final rule for additional details on transitional pass-through payments. (4) Regulation Text Changes We proposed to codify our proposed criteria for separate payment for qualifying non-opioid pain management drugs and biologicals that function as surgical supplies in the regulation text for the ASC payment system in a new § 416.174.

In particular, we proposed to provide in a new § 416.174(a)(1) that non-opioid pain management drugs or biologicals that function as a supply in a surgical procedure are eligible for separate payment if they are approved under a new drug application under section 505(c) of FDCA, under an abbreviated new drug application under section 505(j) of FDCA, or, in the case of a biological product, are licensed under section 351 of the PHS Act. Section 416.174(a)(1) would also provide that the drug or biological must have an FDA-approved indication for pain management or analgesia. New § 416.174(a)(2) would require that the per-day cost of the drug or biological must exceed the OPPS drug packaging threshold set annually through notice and comment rulemaking.

We also proposed to amend § 416.164(b)(6) to provide that non-opioid pain management drugs and biologicals that function as a supply when used in a surgical procedure as determined by CMS under § 416.174 are ancillary items that are integral to a covered surgical procedure and for which separate payment is allowed. We also proposed to amend § 416.171(b)(1) to provide that the payment rate for non-opioid pain management drugs and biologicals that function as a supply when used in a surgical procedure as determined by CMS under § 416.174 are Start Printed Page 63490 not paid an amount derived from the payment rate for the equivalent item or service under the OPPS. We received no comments on the specific regulation text changes.

As we are finalizing the two criteria as proposed, we are also finalizing the corresponding regulation text changes as proposed. (5) Eligibility for Separate Payment in CY 2022 for Exparel, Omidria, and Other Non-Opioid Drugs or Biologicals for Pain Management As discussed in the CY 2021 OPPS/ASC final rule with comment period, there are two products receiving separate payment in the ASC setting in CY 2021 under our current policy to pay separately for non-opioid pain management treatments that function as surgical supplies when furnished in the ASC setting (85 FR 86171). These two products are Exparel ( HCPCS Code C9290, Injection, bupivacaine liposome, 1 mg ) and Omidria (HCPCS Code J1097, phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml ).

Based on the current information available to us, as we explain below, we proposed that both products would be eligible for separate payment in CY 2022 under our proposed policy. We sought comment on whether there are any other non-opioid drug or biological products that would meet the proposed criteria if finalized. We have included our evaluations of these products based on stakeholder comments in the follow sections.

(a) Eligibility for Separate Payment in CY 2022 for Exparel We proposed that Exparel ( C9290. Injection, bupivacaine liposome, 1 mg ) would continue to receive separate payment in the ASC setting as a non-opioid pain management drug that functions as a surgical supply for CY 2022. As we stated in the CY 2022 OPPS/ASC proposed rule, based on CMS's internal review, we believed Exparel met criterion one.

Exparel was approved by FDA with a New Drug Application (NDA #022496) on 10/28/2011.[] Exparel's FDA-approved indication is “in patients 6 years of age and older for single-dose infiation to produce postsurgical local analgesia (1). In adults as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia”.[] No component of Exparel is opioid-based. Accordingly, we proposed that Exparel meets criterion one.

As discussed in section (3) above, for criterion two we proposed that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period. The finalized per-day cost threshold for CY 2022 is $130.

Using the methodology described at V.B.1.a. Of this final rule with comment period, the per-day cost of Exparel exceeds the $130 per-day cost threshold. Therefore, we proposed that Exparel meets criterion two.

Based on the above discussion, we proposed that Exparel meets criteria 1 and 2, and should receive separate payment under the ASC payment system for CY 2022. Comment. The manufacturer of Exparel, Pacira BioSciences, supported finalizing both criteria as proposed and urged CMS to finalize the proposal to pay separately for Exparel in the ASC setting.

The manufacturer also noted that numerous peer-reviewed studies demonstrate that Exparel can reduce or even replace use of postsurgical opioid pain medication and lead to improved patient outcomes. Several commenters, including a hospital association and surgery associations, also supported CMS's proposal to continue to unpackage and pay separately for Exparel in the ASC setting. Response.

We appreciate the commenters' input. After reviewing the information provided during the public comment period, and as described in our proposal above, we have determined that Exparel meets criterion one for FDA approval and an FDA-approved pain management indication and that the per-day cost of Exparel exceeds the finalized $130 per-day cost threshold, meeting criterion two. Additionally, no component of Exparel is opioid-based.

After consideration of the public comments we received and consistent with the eligibility criteria we are adopting, we are finalizing our proposal that Exparel will continue to receive separate payment under the ASC payment system in CY 2022 as a non-opioid pain management drug that functions as a surgical supply. (b) Eligibility for Separate Payment for Omidria in CY 2022 We proposed that Omidria (J1097. Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml ) would continue to receive separate payment in the ASC setting as a non-opioid pain management drug that functions as a surgical supply for CY 2022.

Based on our internal review during the proposed rule, we stated that we believed Omidria would meet criterion one. Omidria was approved by FDA with a New Drug Application (NDA #205388) on May 30, 2014.[] Additionally, Omidria's FDA-approved indication is as “an alpha 1-adrenergic receptor agonist and nonselective cyclooxygenase inhibitor indicated for. Maintaining pupil size by preventing intraoperative miosis.

Reducing postoperative pain”.[] No component of Omidria is opioid-based. Therefore, we proposed that Omidria would meet proposed criterion one. Using the methodology described at V.B.1.a.

Of this final rule with comment period, the per-day cost of Omidria exceeds the $130 per-day cost threshold. Therefore, we proposed that Omidria meets criterion two. Because we proposed that Omidria meets criteria one and two, we proposed that it should receive separate payment under the ASC payment system for CY 2022.

Comment. The manufacturer of Omidria, Omeros, agreed with CMS's proposal that Omidria would satisfy the proposed criteria for CY 2022 and noted their support for Omidria continuing to receive separate payment in ASC setting. The manufacturer noted that Omidria decreases the need for the opioid fentanyl during surgery and reduces opioids prescribed post operatively, but did not submit literature to support these assertions.

One commenter, a hospital association, also supported CMS's proposal to continue to unpackage Omidria in the ASC setting. However, another individual commenter stated their opposition to this proposal, noting that Omidria should be treated as an incidental part of an ophthalmic surgery and not paid for separately, as, in this commenter's view, Omidria does not meaningfully ameliorate the opioid crisis, is not indicated or useful for the treatment of an opioid use disorder, and that separate payment does not provide a clinical benefit for Medicare beneficiaries. Additionally, this commenter noted that ophthalmic surgeons rarely prescribe opioids.

Response. We appreciate the public comments on our proposal. We note that we have not proposed or adopted a requirement that a product must meaningfully ameliorate the opioid crisis or have a clinically significant Start Printed Page 63491 impact on opioid usage.

As such, after reviewing the information provided during the public comment period, and as described in our proposal above, we have determined that Omidria meets finalized criterion one because it is FDA approved and has an FDA-approved pain management indication and meets finalized criterion two because it has a per-day cost that exceeds the $130 per-day cost threshold. After consideration of the public comments we received and our review of the criteria, we are finalizing the proposal for Omidria to continue to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022. (c) Eligibility for Separate Payment in CY 2022 for Other Non-Opioid for Pain Management Drugs and Biologicals We received comments on the CY 2022 OPPS/ASC proposed rule on additional non-opioid pain management drugs and biologicals that commenters believe would be eligible for separate payment in CY 2022 under our proposed policy.

We have included a summary of these comments below as well as our analysis of whether these products meet the final eligibility criteria. Comment. The manufacturer of Dextenza (J1096.

Dexamethasone, lacrimal ophthalmic insert, 0.1 mg ), Ocular Therapeutix, commented that separate payment for Dextenza is necessary in the ASC setting for beneficiary access, as it is frequently used in that setting. The manufacturer requested continued separate payment after Dextenza's pass-through status expires. Response.

Based on CMS's internal review, we believe Dextenza meets criterion one. Dextenza was approved by FDA with a New Drug Application (NDA #208742) on November 30, 2018.[] Dextenza's FDA-approved indication is as “a corticosteroid indicated for the treatment of ocular pain following ophthalmic surgery”.[] No component of Dextenza is opioid-based. Accordingly, we believe that Dextenza meets criterion one.

As discussed in section (3) above, for criterion two we proposed that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period. Using that methodology, the per-day cost of Dextenza exceeds the $130 per-day cost threshold.

Therefore, we believe that Dextenza meets criterion two. We agree that Dextenza meets criteria one and two, and would be eligible to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022 if it was not already receiving separate payment-in CY 2022 as a pass-through drug. Please see section V.A.

€œOPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals” of this final rule with comment period for additional details on transitional pass-through payments for drugs and biologicals, as well as section X. F. Of this final rule with comment period, “Separate Payment in CY 2022 for the Device Category, Drugs, and Biologicals with Transitional Pass-Through Payment Status Expiring between December 31, 2021, and September 30, 2022.” Comment.

The manufacturer of Dexycu (J1095. Injection, dexamethasone 9 percent, intraocular, 1 microgram ), EyePoint Pharmaceuticals, commented that Dexycu should be eligible for separate payment in the ASC setting as a non-opioid pain management drug that functions as a surgical supply. An individual commenter, an ophthalmologist, noted that Dexycu is indicated for the treatment of inflammation following ocular surgery and provided summaries of several studies that discussed Dexycu's utility in controlling pain.

Other commenters more broadly suggested that CMS provide separate payment for products that prevent inflammation. Response. Based on CMS's internal review, we do not believe Dexycu meets criterion one.

Dexycu was approved by FDA with a New Drug Application (NDA #208912) on February 9, 2018.[] Dexycu's FDA-approved indication is as “a corticosteroid indicated for the treatment of postoperative inflammation”.[] No component of Dexycu is opioid-based. However, Dexycu does not have an FDA-approved indication for pain management or analgesia. Accordingly, we do not believe Dexycu meets criterion one.

As discussed in section II.A.3. Of this final rule with comment period, for criterion two we proposed that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period.

Using that methodology, the per-day cost of Dexycu does exceed the $130 per-day cost threshold. Therefore, we believe Dexycu meets criterion two. After consideration of the public comments we received and our review of the criteria, we have determined that Dexycu does not meet criteria one and, therefore, would not eligible to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022.

Additionally, we note that Dexycu is already receiving separate payment through CY 2022. Please see section V.A. €œOPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals” of this final rule with comment period for additional details on transitional pass-through payments for drugs and biologicals as well as section X.

F. €œSeparate Payment in CY 2022 for the Device Category, Drugs, and Biologicals with Transitional Pass-Through Payment Status Expiring between December 31, 2021, and September 30, 2022.” Comment. The manufacturer of Xaracoll, Innocoll Pharmaceuticals, commented that Xaracoll meets the two proposed CMS criteria and qualifies for separate payment as a non-opioid pain management drug that functions as a surgical supply in the ASC setting.

The manufacturer also provided additional details regarding the clinical benefit of their product, including discussion of studies in which Xaracoll demonstrated significant pain relief and opioid reduction in open inguinal hernia repair. Response. We appreciate the commenter's input.

Based on CMS's internal review, we believe Xaracoll meets criterion one. Xaracoll was approved by FDA with a New Drug Application (NDA #209511) on August 28, 2020.[] Regarding the specific FDA-approved indication requirement, Xaracoll is “indicated in adults for placement into the surgical site to produce postsurgical analgesia for up to 24 hours following open inguinal hernia repair”.[] No component of Xaracoll is Start Printed Page 63492 opioid-based. Accordingly, we believe that Xaracoll meets criterion one.

As discussed in section II.A.3. Of this final rule with comment period, for criterion two we proposed that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period.

Using that methodology, the per-day cost of Xaracoll exceeds the $130 per-day cost threshold. Therefore, we believe that Xaracoll meets criterion two. After consideration of the public comments we received and our review of the finalized criteria, we have determined that Xaracoll meets criteria one and two, and are approving Xaracoll (C9089.

Bupivacaine, collagen-matrix implant, 1 mg ) to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022. Comment. The manufacturer of Zynrelef, Heron Therapeutics, stated how Zynrelef meets CMS's proposed criteria for separate payment in the ASC setting and should be receive separate payment in that setting.

The manufacturer also provided additional details regarding the clinical benefit of their product, including studies where Zynrelef demonstrated reduced opioid use. Response. We appreciate the commenter's input.

Based on CMS's internal review, we believe Zynrelef meets criterion one. Zynrelef was approved by FDA with a New Drug Application (NDA #211988) on May 12, 2021.[] Regarding the specific FDA-approved indication requirement, Zynrelef is “indicated in adults for soft tissue or periarticular instillation to produce postsurgical analgesia for up to 72 hours after bunionectomy, open inguinal herniorrhaphy and total knee arthroplasty”.[] No component of Zynrelef is opioid-based. Accordingly, we believe that Zynrelef meets criterion one.

As discussed in section (3) above, for criterion two we proposed that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period. Using that methodology, the per-day cost of Zynrelef exceeds the $130 per-day cost threshold.

Therefore, we believe that Zynrelef meets criterion two. After consideration of the public comments we received and our review of the finalized criteria, we have determined that Zynrelef meets criteria one and two, and are approving Zynrelef (C9088. Instillation, bupivacaine and meloxicam, 1 mg/0.03 mg ) to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022.

Comment. The manufacturer of Anjeso (HCPCS code J1738. Injection, meloxicam, 1 mg ), Baudax Bio, expressed support for policies that encourage the use of non-opioid pain alternatives.

In their comment, Baudax Bio discussed the clinical benefits of their product. Response. We appreciate the commenter's input.

Based on CMS's internal review, we believe Anjeso meets criterion one. Anjeso was approved by FDA with a New Drug Application (NDA #210583) on February 20, 2020.[] Anjeso's FDA-approved indication is “indicated for use in adults for the management of moderate-to-severe pain, alone or in combination with non-NSAID analgesics”.[] No component of Anjeso is opioid-based. Accordingly, we believe that Anjeso meets criterion one.

As discussed in section II.A.3. Of this final rule with comment period, for criterion two we proposed that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period.

Using that methodology, the per-day cost of Anjeso does not exceed the $130 per-day cost threshold. Therefore, we do not believe that Anjeso meets criterion two. After consideration of the public comments we received and our review of the finalized criteria, we have determined that Anjeso meets criteria one but not criterion two, and would not be eligible to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022.

However, Anjeso remains on transitional pass-through status throughout CY 2022 and accordingly, is already receiving separate payment in the HOPD and ASC settings for CY 2022. Please see section V.A., OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals, of this final rule with comment period for additional details on transitional pass-through payments for drugs and biologicals. Comment.

Several commenters, including hospital and professional associations, recommended separate payment for Ofirmev, IV acetaminophen, stating they believed it decreased use of post-operative opioids. Response. We appreciate the commenters' input.

Based on CMS's internal review, we believe Ofirmev meets criterion one. Ofirmev was approved by FDA with a New Drug Application (NDA #022450) on October 2, 2010.[] Ofirmev's FDA-approved indication is “management of mild to moderate pain, management of moderate to severe pain with adjunctive opioid analgesics, and reduction of fever”.[] No component of Ofirmev is opioid-based. Accordingly, we believe that Ofirmev meets criterion one.

As discussed in section (3) above, under criterion two a drug or biological is only eligible for separate payment if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. Of this final rule with comment period. Using the methodology described at V.B.1.a.

Of this final rule with comment period, the per-day cost of Ofirmev does not exceed the $130 per-day cost threshold. Therefore, we do not believe Ofirmev meets criterion two. After consideration of the public comments we received and our review of the criteria, we have determined that Ofirmev meets criteria one but not criterion two and is not eligible to receive separate payment under the ASC payment system as a non-opioid pain management drug that functions as a surgical supply for CY 2022.

Comment. Several commenters, including professional and hospital associations, commented that classes of drugs, such as NSAIDS, including IV ibuprofen and IV ketorolac, may reduce opioid usage if CMS paid separately for them. However, they did not request that CMS consider a specific non-opioid product for separate payment in the ASC setting.

Response. We thank commenters for their comments. For both of these Start Printed Page 63493 products, we did not receive recommendations for a specific product, for a specific FDA approval, or from a specific manufacturer.

We note that based on our review of these products, we do believe IV ibuprofen and IV ketorolac products, which have FDA approval and an FDA-approved indication for pain management or as an analgesic, would satisfy criterion one. However, based on our review of these products, using the methodology described at V.B.1.a. Of this final rule with comment period, the per-day costs of HCPCS code 1741 ( Injection, ibuprofen, 100 mg) and HCPCS code J1885 ( Injection, ketorolac tromethamine, per 15 mg) do not exceed the packaging threshold for criterion two.

Comment. Commenters requested CMS consider the clinical value of Prialt (HCPCS Code J2278. Injection, ziconotide, 1 microgram ) and Dsuvia, a sufentanil sublingual tablet, for separate payment in the ASC setting Response.

Prialt is not eligible for separate payment under our final policy because it is not a drug that functions as a supply in a surgical procedure and is already receiving separate payment. Dsuvia is not eligible for separate payment under our final policy because it contains an opioid and therefore is not a non-opioid drug. We are not revising our policy to provide separate payment for opioid pain management products for CY 2022.

As previously explained above, we are not modifying the eligibility criteria for our policy to include such products. However, we appreciate these comments and suggestions from stakeholders and will take them into consideration for future rulemaking. (6) Comment Solicitation on Policy Modifications and Potential Additional Criteria for Revised Payment for Non-Opioid Pain Management Treatments In addition to the proposed eligibility criteria above, we also sought comment on potential policy modifications and additional criteria that may help further align this policy with the intent of section 1833(t)(22) of the Act.

Below we discuss potential additional criteria. We noted in the CY 2022 OPPS/ASC proposed rule that, depending on the public comments we received and our continued consideration of these potential criteria, we may adopt these criteria as part of our final policy and include them in the final regulation text. Accordingly, we provided substantial details, explanations, and considerations about these potential criteria.

We welcomed input from stakeholders on these and any additional policy modifications or criteria they believe would enhance our proposed policy. We also sought comment on other barriers to access to non-opioid pain management products that may exist, and to what extent our policies under the OPPS or ASC payment system could be modified to address these barriers. Comment.

A few comments from providers and drug manufacturers discussed additional barriers they faced in providing non-opioid pain management products. One commenter recommended CMS provide education to providers on non-opioid pain medications and to encourage patients to ask their providers about which medications they are being prescribed. One commenter noted that not allowing separate payment for non-opioid products in the HOPD setting limits the expansion of patient access to non-opioid therapies in new geographic areas.

Another commenter noted that rural and underserved areas have been disproportionately harmed by opioid addiction and that geography, lack of provider education and training, and payment and coverage for these services may be barriers to treatment in these communities. Response. We are committed to implementing measures to combat the opioid epidemic.

We appreciate stakeholders' comments in response to this solicitation. We will take these comments into consideration for future rulemaking. Comment.

Many commenters appreciated CMS soliciting comment on potential additional criteria in the proposed rule. A few commenters recommended that CMS not finalize additional criteria based on responses to the comment solicitations. Rather, they suggested CMS finalize the two proposed criteria and assess the policy in the future to assess whether additional criteria are warranted.

Response. We thank commenters for their input. We are not finalizing additional criteria or policy modifications based on the comments were received in response to the comment solicitations in the CY 2022 OPPS/ASC proposed rule.

Please see the following sections for a summary of the comments received. (a) Utilization of the Product We have historically used utilization as a metric to determine whether a change in our payment policy was necessary to determine whether our policies create a disincentive to use non-opioid alternatives. For example, as previously discussed, Exparel's decreasing utilization in the ASC setting caused us to propose to pay separately for non-opioid pain management drugs that function as surgical supplies in the ASC setting.

We have used currently available claims data in prior years to analyze the payment and utilization patterns associated with specific non-opioid alternatives to determine whether our packaging policies may have reduced the use of non-opioid alternatives. We believe that higher utilization may be a potential indicator that the packaged payment is not causing an access to care issue and that the payment rate for the primary procedure adequately reflects the cost of the drug or biological. We also believe decreased utilization could potentially indicate that our packaging policy is discouraging use of a drug or biological and that providers are choosing less expensive treatments.

We note that it is difficult to attribute product-specific changes in utilization to our packaging policies alone. Nonetheless, while we acknowledge certain limitations of utilization data, we believe analyzing utilization either on a product-specific basis or on a broader basis could be an important criterion in determining whether separate payment is warranted for a non-opioid pain management alternative. Therefore, we solicited comment on whether specific evidence of reduced utilization should be part of our evaluation and determination as to whether a non-opioid pain management product should qualify for modified payment.

This data may help to demonstrate that our packaging policies are causing an access issue for these products. Additionally, we realize that new products to the market may not have utilization data available, or reliable utilization data may be difficult to obtain for some products. Therefore, we also requested comment on whether utilization data requirements should vary based on the newness of a product or its FDA marketing approval date.

Comment. Generally, commenters did not support adding a utilization requirement criterion. Several commenters stated that utilization data was useful in the original analysis to establish the original policy in the ASC setting, but they believe would be inappropriate to require new products to prove they are disincentivized by CMS packaging policies.

These commenters noted it would take significant time for this data to be available after a new drug was introduced to the market. Additionally, several comments stated that utilization data is imperfect, as CMS described in the CY 2022 OPPS/ASC proposed rule. Start Printed Page 63494 Response.

We thank commenters for their feedback on a potential utilization requirement. However, we are not finalizing any policy modifications, including adopting a utilization requirement, for CY 2022. We will take these comments into consideration for future rulemaking.

(b) FDA-Approved Indication for Pain Management or Analgesia for the Drug or Biological Product As previously discussed, section 1833(t)(22)(A) of the Act specifically refers to reviews of opioid and evidence-based non-opioid products for pain management. We believe the majority of drugs and biologicals that would meet the requirements of our proposed policy would already have FDA approval as a pain management drug or as an analgesic. However, we acknowledge there may be other non-opioid products that would benefit from inclusion under this policy, but do not have a specific FDA-approved indication for pain management or analgesia, and would not satisfy criterion one.

Therefore, we solicited comment on whether we should allow certain FDA-approved drugs and biologicals to be eligible for separate payment under this policy without a specific FDA-approved indication for pain management or as an analgesic drug. In lieu of an FDA-approved indication for pain management or analgesia, we sought comment on whether it would be appropriate to approve a product for inclusion under this policy if the pain-management or analgesia attributes of the drug or biological are recognized by a medical compendium. Similarly, we sought comment as to whether we should consider specialty society or national organization (such as a national surgery organization) recommendations of non-opioid pain management products that function as surgical supplies and reduce opioid use in the ASC setting, as evidence that a product meets criterion one, when a drug or biological does not have an FDA-approved indication for pain management or analgesia.

Comment. Some commenters were supportive of CMS taking into consideration other factors, such as specialty society endorsements, medical compendia, or inclusion in clinical practice guidelines, as part of the qualifying criteria if an FDA-approved indication for pain management or analgesia was not present. Commenters stated a specific FDA-approved indication may be too restrictive as some products may be used off-label for pain management.

A few commenters suggested CMS take an individualized and holistic approach to each drug it evaluates, and therefore, consider association recommendations outside of FDA-approved indications. Commenters thought this would support increased access to drugs for off-label uses. Response.

We appreciate the comments received as a part of this specific comment solicitation. However, for CY 2022, we are not making any policy modifications based on the public comments we received in response to this comment solicitation. (c) Peer-Reviewed Literature Requirement Comment Solicitation We note that section 1833(t)(22)(B) of the Act requires the Secretary to focus on covered OPD services (or groups of services) assigned to a comprehensive ambulatory payment classification, ambulatory payment classifications that primarily include surgical services, and other services determined by the Secretary that generally involve treatment for pain management.

Therefore, we solicited comment as to whether we should only adopt a payment revision for drugs and biologicals that function as surgical supplies in the ASC setting when those products have evidence in peer-reviewed literature supporting that the product actually decreases opioid usage associated with the surgical procedure. We believe this may be appropriate to ensure Medicare payment policies would not financially incentivize use of opioids rather than evidence-based non-opioid alternative treatments, as required by section 1833(t)(22)(A)(iii) of the Act. Specifically, we sought comment as to whether the drug or biological's use in a surgical procedure as a non-opioid pain management product should be supported by peer-reviewed literature demonstrating a clinically significant decrease in opioid usage compared to the standard of care, and we sought comment on whether such decreases in opioid usage should be sustained decreases that continue into the post-operative period.

Additionally, we sought input from commenters as to what they believe the requirements for peer-reviewed literature should be. For example, we solicited stakeholder feedback as to whether peer-reviewed literature should demonstrate that use of the drug or biological results in at least one, or several, of the following. Decreased post-operative opioid use following surgery, decreased opioid misuse following surgery, or decreased opioid use disorder and dependency following surgery.

Additionally, we asked stakeholders if specific thresholds are necessary to determine whether these decreases are statistically and clinically significant and whether the decreases should simply be measured against placebo or the standard of care. We also requested information on how stakeholders would define the standard of care in these circumstances. In the proposed rule we stated, when evaluating literature, we would expect to examine the study methods, sample size, limitations, possible conflicts of interest, patient populations studied, and how the evidence supports the conclusion that the product can serve as a non-opioid pain management product and provide a clinically significant reduction in opioid use that continues into the post-operative period.

However, we welcomed input from stakeholders about additional aspects of these studies that they believe CMS should focus on for this potential criterion. Additionally, we stated we would expect to use our discretion to assess whether the submitted studies meet these criteria, as well as for clinical applicability, literature integrity, and potential biases in consultation with our clinical advisors. In order to provide stakeholders with some examples of what supporting evidence CMS may consider for this potential criterion, we stated in the proposed rule that we believed it would be helpful for CMS to receive literature demonstrating that use of a non-opioid drug or biological results in a statistically and clinically significant decreased day supply of outpatient opioids prescribed after surgery discharge compared to the generally accepted standard of care, or a statistically and clinically significant decreased morphine milligram equivalents (MME) per opioid dose prescribed after surgery discharge compared to the generally accepted standard of care.

We would consider the generally accepted standard of care to include pain management therapy a patient would receive in the absence of the non-opioid alternative, such as the use of localized analgesia and/or an opioid. As previously discussed, we would then expect the use of a non-opioid pain management drug or biological to result in a decline in opioids used compared to the pain management therapy a patient would receive in the absence of the non-opioid alternative. We would expect this decline in opioids to include a decreased number of opioids received by a patient intraoperatively, post-operatively, and most significantly at discharge.

We solicited comment on additional examples or measures that Start Printed Page 63495 would be beneficial for CMS to take into consideration. Additionally, we sought comment on whether we should require a specific objective measure for this criterion. We also sought input on how to assess whether changes are statistically and clinically significant.

We requested comment on whether stakeholders believe evidence of statistical significance should be sufficient, or whether stakeholders believe the literature should also demonstrate clinically significant differences between treatment groups as well. Comment. Many commenters did not support CMS finalizing any additional criteria, including a peer-reviewed literature requirement.

A few commenters disagreed that a peer-reviewed literature requirement was necessary as they believed an FDA-approved indication for pain management or analgesia would be sufficient. Several commenters suggested CMS collect, review, and consider peer-reviewed literature, but not explicitly require it. Response.

We appreciate the comments received as a part of this specific comment solicitation. However, for CY 2022, we are not making any policy modifications based on the public comments we received in response to this comment solicitation. We will take these comments into consideration for future rulemaking.

Comment. A few commenters supported CMS requiring peer-reviewed literature that demonstrates that the drug in question reduces opioid use in the post-operative period. One commenter specified which type of literature endpoints would be important to incorporate into our review process.

Specifically, one drug manufacturer recommended that CMS require that use of a drug demonstrate a significant reduction in the need for opioids and increase the number of patients who are opioid free in a randomized, well-controlled, head-to-head clinical trial versus an active comparator. A number of commenters requested that CMS provide separate payment for evidence-based, non-opioid pain management drugs. Specifically, in regards to peer-reviewed literature, MedPAC asserted that separately payable status should only be granted when evidence in peer-reviewed publications indicates that the drug in question reduces the use of opioids.

Other commenters supported a criterion that requires a product to demonstrate the ability to replace, reduce, or avoid opioid use or the quantity of opioids prescribed. Response. We thank commenters for their detailed comments.

We agree it is important that a non-opioid pain management product serve as an alternative to an opioid, and therefore replace, reduce, or avoid opioid use. We once again thank commenters for their detailed insights on this comment solicitation. However, for CY 2022, we are not making any policy modifications based on the public comments we received in response to this comment solicitation.

We will take these comments into consideration for future rulemaking. (d) Alternative Payment Mechanisms for Non-Opioid Drugs and Biologicals As previously discussed, for CY 2022, we proposed to pay separately at ASP+6 percent for non-opioid pain management drugs and biologicals that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting and meet our other proposed criteria. Section 1833(t)(22)(A)(iii) of the Act requires the Secretary to consider the extent to which revisions to payments (such as the creation of additional groups of covered OPD services to classify separately those procedures that utilize opioids and non-opioid alternatives for pain management) would reduce payment incentives to use opioids instead of non-opioid alternatives for pain management.

Accordingly, separate payment is not the only possible revision that may be appropriate. We sought comment on additional payment mechanisms that may be appropriate aside from separate payment. For instance, we requested feedback from stakeholders as to whether a single, flat add-on payment, or separate APC assignment, for products or procedures that use a product that meets eligibility criteria would be preferable to separate payment.

We note that any revisions the Secretary determines appropriate under section 1833(t)(22)(C) of the Act must be applied in a budget neutral manner under section 1833(t)(9)(B) of the Act. We also sought input from stakeholders on any other innovative payment mechanisms for eligible non-opioid drugs and biologicals for pain management. Comment.

Most commenters opposed any other payment methodologies aside from paying separately for non-opioid pain management drugs or biologicals at ASP+6 percent. Several commenters contended that an add-on payment would not be appropriate because this would create differentials in payment across care settings, such as physician offices, and emphasized that stakeholders are more familiar with the ASP payment methodology. Some commenters also emphasized that drugs and biologicals are generally paid at ASP+6 percent when furnished in the physician office setting and encouraged CMS to pay ASP+6 percent under this policy to ensure payment parity across the different treatment settings.

One commenter asked that CMS apply its final payment policy for 340B-acquired drugs, to pay for non-opioid drug products at ASP minus 22.5 percent instead of ASP+ 6 percent. Additionally, one commenter asked that CMS create new CPT codes in order to account for the work associated with opioid-sparing therapies furnished by surgeons. Response.

We appreciate the comments received as a part of this specific comment solicitation. However, for CY 2022, we are not making any policy modifications based on the public comments we received in response to this comment solicitation. We will take these comments into consideration for future rulemaking.

(e) Non-Drug Products In the CY 2022 OPPS/ASC proposed rule, we stated we were also interested in information on any non-opioid non-drug products that function as surgical supplies that commenters believe should be eligible for separate payment under this policy. Although we have not currently identified any non-opioid pain management non-drug products that are disincentivized by CMS packaging policies based on utilization data, we believe it is reasonable to assume that if disincentives exist for the use of non-opioid pain management drugs and biological products under the ASC payment system, they may also exist for non-opioid, non-drug products under the ASC payment system. If this is the case, we would like to address these disincentives given the severity and importance of combatting the opioid epidemic, regardless of whether the non-opioid product is a drug, biological, or non-drug product.

We remain interested in whether there are any non-opioid non-drug products that may meet the proposed eligibility criteria and should qualify for separate or modified payment as discussed in section (d) above, in the ASC setting. Similarly, we also sought comment on whether there are unique qualities of non-drug products that would make revised payment in the HOPD setting appropriate instead of, or in addition to, the ASC setting. We sought comment on whether it is appropriate to require non-drug products to meet the same criteria being proposed for drugs and biologicals.

Additionally, we sought comment from Start Printed Page 63496 stakeholders on whether they believe it would be appropriate to create a broad category for non-drug products, or if a more limited category, such as for devices, would be appropriate. Specifically, we sought comment on whether there is information in the FDA approval for devices that would be an appropriate criterion to determine eligibility for separate payment, similar to how we proposed to require FDA approval with an FDA-approved indication for pain management or analgesia for drugs and biologicals. We sought comment on whether, if the non-drug product is a “device” as defined in section 201(h) of FDCA, the device should have received FDA premarket approval (PMA), grant of a de novo request, 510(k) clearance or meet an exemption from premarket review.

Finally, we solicited comment on all aspects of an extension of our current policy to include appropriate products that are not drugs or biologicals. We also sought comment on how peer-reviewed literature and utilization claims data could be used as potential criteria for a policy that would apply to non-drug products. Additionally, should a payment revision be determined necessary, we solicited comment on appropriate payment mechanisms for non-opioid, non-drug products, including assigning the non-drug product to its own APC to ensure that the product is paid separately or establishing an add-on adjustment for the cost of the non-drug product in addition to the payment for the APC to which the non-drug product is assigned.

Additionally, we sought comment on whether it would be appropriate to subject non-drug products to a cost threshold similar to the one we proposed to apply to drugs and biologicals. Comment. A few commenters supported CMS exploring a payment adjustment for non-opioid, non-drug items, including items such as devices.

Some commenters discussed the benefit of spinal cord stimulators, and one commenter recommended an add-on payment for a narrowly constructed payment category, such as spinal cord stimulators. Commenters also cited the CMS prior authorization policy on spinal cord stimulators as inappropriately creating barriers to access to these devices, as beneficiaries could be prescribed opioids for longer periods of time while waiting for prior authorization to be approved. Commenters recommended CMS provide separate payment for nerve blocks, pain blocks (represented by CPT codes 64415, 64416, 64417, 64445, 64446, 64447, 64448, 64450), joint injections, and neuromodulation.

Some commenters stated that barriers for non-drug items are often more severe in the ASC setting. Commenters also suggested CMS consider payment methodologies for various other non-drug items, including for multi-modal pain management ERAS protocols, physical therapy, acupuncture, massage therapy, ON-Q pain relief system, devices that use ice water, dry needling, THC oil applied topically, and polar ice devices. Commenters pointed to the opioid-sparing abilities of some of these products.

For example, commenters noted that spinal cord stimulators are useful in reducing opioid usage for chronic pain patients. Commenters urged CMS to change payment polices to make spinal cord stimulators a front-line option in combating chronic pain. Response.

We appreciate the responses from commenters on this topic. As discussed in prior rulemaking (85 FR 85899), we have not found compelling evidence for non-drug, non-opioid pain management alternatives that commenters described to warrant separate payment under the OPPS or ASC payment system. For CY 2022, we are not finalizing any policy modifications in response to the comments we received on this comment solicitation.

We will take these comments into consideration for future rulemaking. Comment. Some commenters recommended that criteria similar to those proposed for drug items also apply to non-drug items, including a potential requirement for peer-reviewed literature demonstrating that the product significantly limits or eliminates prescription opioids.

Response. We thank commenters for their feedback regarding potential criteria for non-drug items and how we may incorporate non-drug products into our non-opioid pain management packaging policy in the future. We will take these comments into consideration for future rulemaking.

(f) Coinsurance Waiver Request Comment. Multiple commenters, including providers and the manufacturer of Prialt, an intrathecal drug, requested CMS waive the 20 percent coinsurance requirement for non-opioid pain management drugs. Specifically, these commenters discussed that waiving coinsurance for non-opioid drugs that are indicated for severe chronic pain in patients requiring intrathecal therapy could bolster patient access Response.

The services described here, including intrathecal therapy, do not meet the statutory requirements process for “additional preventive services” in section 1861(ddd)(1) of the Act that would be subject to coinsurance waiver under 1833(a)(1)(W). Providers may waive coinsurance amounts only if they comply with applicable law, including the Federal Anti-Kickback Statute and the civil monetary penalty provision prohibiting inducements to beneficiaries. We note that the drugs these commenters describe are already paid separately.

Additionally, the intrathecal drug, Prialt, frequently described by commenters, does not function as a supply to a surgical procedure. As such, it would not qualify under our current policy to pay separately in the ASC setting for non-opioid pain management drugs and biologicals that function as surgical supplies. However, we appreciate the commenters' input about the potential value of these drugs.

Summary of Finalized Policy As discussed in the preceding sections, after consideration of the public comments we received, we are finalizing the proposed policy for CY 2022 to unpackage and pay separately at ASP plus 6 percent for non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting, are FDA-approved, have an FDA-approved indication for pain management or as an analgesic, and have a per-day cost above the OPPS/ASC drug packaging threshold for CY 2022. As noted above, we are finalizing the proposed regulation text changes at § 416.164(a)(4) and (b)(6), § 416.171(b)(1), and § 416.174 as proposed. We determined that four products are eligible for separate payment in the ASC setting under our final policy for CY 2022.

Future products, or products not discussed in this rulemaking that may be eligible for separate payment under this policy will be evaluated in future notice and comment rulemaking. We will continue to analyze the issue of access to non-opioid pain management alternatives in the OPPS and the ASC settings as part of any subsequent reviews we conduct under section 1833(t)(22)(A)(ii) of the Act, which would be discussed in future notice and comment rulemaking. We will also continue to evaluate whether there are other non-opioid pain management alternatives for which our payment policy should be revised to allow separate payment in future rulemaking.

Table 4 below lists the four Start Printed Page 63497 drugs that meet our finalized criteria and will receive separate payment under the ASC payment system when furnished in the ASC setting for CY 2022. 4. 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 2021 OPPS/ASC final rule with comment period (85 FR 85902 through 85903), we applied this policy and calculated the relative payment weights for each APC for CY 2021 that were shown in Addenda A and B of the CY 2021 OPPS/ASC final rule with comment period (which were made available via the internet on the CMS website) using the APC costs discussed in sections II.A.1. And II.A.2. Of the CY 2021 OPPS/ASC final rule with comment period.

For CY 2022, as we did for CY 2021, we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2022 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 70372). For CY 2022, as we did for CY 2021, we proposed 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 2022, as we did for CY 2021, we proposed 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. We note that in the CY 2019 OPPS/ASC final rule with comment period (83 FR 59004 through 59015) and the CY 2020 OPPS/ASC final rule with comment period (84 FR 61365 through 61369), we discuss our policy, implemented on January 1, 2019, to control for unnecessary increases in the volume of covered outpatient department services by paying for clinic visits furnished at excepted off-campus provider-based department (PBD) at a reduced rate.

While the volume associated with these visits is included in the impact model, and thus used in calculating the weight scalar, the policy has a negligible effect on the scalar. Specifically, under this policy, there is no change to the relativity of the OPPS Start Printed Page 63498 payment weights because the adjustment is made at the payment level rather than in the cost modeling. Further, under this policy, the savings that result from the change in payments for these clinic visits are not budget neutral.

Therefore, the impact of this policy will generally not be reflected in the budget neutrality adjustments, whether the adjustment is to the OPPS relative weights or to the OPPS conversion factor. For a full discussion of this policy, we refer readers to the CY 2020 OPPS/ASC final rule with comment period (84 FR 61142). 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 2022 is neither greater than nor less than the estimated aggregate weight that would have been calculated without the changes. To comply with this requirement concerning the APC changes, we proposed to compare the estimated aggregate weight using the CY 2021 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2022 unscaled relative payment weights. For CY 2021, we multiplied the CY 2021 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2019 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 2022, we proposed to apply the same process using the estimated CY 2022 unscaled relative payment weights rather than scaled relative payment weights. We proposed to calculate the weight scalar by dividing the CY 2021 estimated aggregate weight by the unscaled CY 2022 estimated aggregate weight.

For a detailed discussion of the weight scalar calculation, we refer readers to the OPPS claims accounting document available on the CMS website at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. Click on the link labeled “CY 2022 OPPS/ASC Notice of Proposed Rulemaking”, which can be found under the heading “Hospital Outpatient Prospective Payment System Rulemaking” and open the claims accounting document link at the bottom of the page, which is labeled “2022 NPRM OPPS Claims Accounting (PDF)”.

We proposed to compare the estimated unscaled relative payment weights in CY 2022 to the estimated total relative payment weights in CY 2021 using CY 2019 claims data, holding all other components of the payment system constant to isolate changes in total weight. Based on this comparison, we proposed to adjust the calculated CY 2022 unscaled relative payment weights for purposes of budget neutrality. We proposed to adjust the estimated CY 2022 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.4436 to ensure that the proposed CY 2022 relative payment weights are scaled to be budget neutral.

The proposed CY 2022 relative payment weights listed in Addenda A and B to the CY 2022 OPPS/ASC proposed rule (which are available via the internet on the CMS website) are scaled and incorporate the recalibration adjustments discussed in sections II.A.1 and II.A.2 of the CY 2022 OPPS/ASC proposed rule (86 FR 42026). Section 1833(t)(14) of the Act provides the payment rates for certain specified covered outpatient drugs (SCODs). Section 1833(t)(14)(H) of the Act provides that additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion factor, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9), but shall be taken into account for subsequent years.

Therefore, the cost of those SCODs (as discussed in section V.B.2 of the CY 2022 OPPS/ASC proposed rule (86 FR 42131 through 42133) is included in the budget neutrality calculations for the CY 2022 OPPS. We did not receive any public comments on the proposed weight scalar calculation. Therefore, we are finalizing our proposal to use the calculation process described in the proposed rule, without modification, for CY 2022.

Using updated final rule claims data, we are updating the estimated CY 2022 unscaled relative payment weights by multiplying them by a weight scalar of 1.4416 to ensure that the final CY 2022 relative payment weights are scaled to be budget neutral. The final CY 2022 relative payments weights listed in Addenda A and B of this final rule with comment period (which are available via the internet on the CMS website) were scaled and incorporate the recalibration adjustments discussed in sections II.A.1 and II.A.2 of this final rule with comment period. B.

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 2022 IPPS/LTCH PPS proposed rule (86 FR 25435), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2020 forecast of the FY 2022 market basket increase, the proposed FY 2022 IPPS market basket update was 2.5 percent.

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 2022 IPPS/LTCH PPS proposed rule (86 FR 25435), the proposed MFP adjustment for FY 2022 was 0.2 percentage point. Therefore, we proposed that the MFP adjustment for the CY 2022 OPPS is 0.2 percentage point. We also proposed that if more recent data become subsequently available after the publication of the CY 2022 OPPS/ASC proposed rule (for example, a more recent estimate of the market basket increase and/or the MFP adjustment), we will use such updated data, if appropriate, to determine the CY 2022 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 2022 OPPS/ASC final rule.

Start Printed Page 63499 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 proposed for CY 2022 an OPD fee schedule increase factor of 2.3 percent for the CY 2022 OPPS (which is the proposed estimate of the hospital inpatient market basket percentage increase of 2.5 percent, less the proposed 0.2 percentage point MFP adjustment). We proposed that hospitals that fail to meet the Hospital OQR Program reporting requirements would be 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 XIV. Of the proposed rule. To set the OPPS conversion factor for 2022, we proposed to increase the CY 2021 conversion factor of $82.797 by 2.3 percent.

In accordance with section 1833(t)(9)(B) of the Act, we proposed further to adjust the conversion factor for CY 2022 to ensure that any revisions made to the wage index and rural adjustment are made on a budget neutral basis. We proposed to calculate an overall budget neutrality factor of 1.0012 for wage index changes by comparing proposed total estimated payments from our simulation model using the proposed FY 2022 IPPS wage indexes to those payments using the FY 2021 IPPS wage indexes, as adopted on a calendar year basis for the OPPS. For the CY 2022 OPPS, we proposed to maintain the current rural adjustment policy, as discussed in section II.E.

Of the CY 2022 OPPS/ASC proposed rule. Therefore, the proposed budget neutrality factor for the rural adjustment is 1.0000. We proposed 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 the CY 2022 OPPS/ASC proposed rule. We proposed to calculate a CY 2022 budget neutrality adjustment factor for the cancer hospital payment adjustment by comparing estimated total CY 2022 payments under section 1833(t) of the Act, including the proposed CY 2022 cancer hospital payment adjustment, to estimated CY 2022 total payments using the CY 2021 final cancer hospital payment adjustment, as required under section 1833(t)(18)(B) of the Act. The proposed CY 2022 estimated payments applying the proposed CY 2022 cancer hospital payment adjustment were the same as estimated payments applying the CY 2021 final cancer hospital payment adjustment.

Therefore, we proposed to apply a budget neutrality adjustment factor of 1.0000 to the conversion factor for the cancer hospital payment adjustment. In accordance with section 1833(t)(18)(C), as added by section 16002(b) of the 21st Century Cures Act (Pub. L.

114-255), 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 applied as stated in section II.F. Of the proposed rule. For the CY 2022 OPPS/ASC proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2022 would equal approximately $1.03 billion, which represented 1.24 percent of total projected CY 2022 OPPS spending.

Therefore, the proposed conversion factor would be adjusted by the difference between the 0.92 percent estimate of pass-through spending for CY 2021 and the 1.24 percent estimate of proposed pass-through spending for CY 2022, resulting in a proposed decrease to the conversion factor for CY 2022 of 0.32 percent. Proposed estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2022. We estimated for the proposed rule that outlier payments would be 1.06 percent of total OPPS payments in CY 2021.

The 1.00 percent for proposed outlier payments in CY 2022 would constitute a 0.06 percent decrease in payment in CY 2022 relative to CY 2021. For the CY 2022 OPPS/ASC proposed rule, we also proposed 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 proposed to make all other adjustments discussed above, but use a reduced OPD fee schedule update factor of 0.3 percent (that is, the proposed OPD fee schedule increase factor of 2.3 percent further reduced by 2.0 percentage points).

This would result in a proposed reduced conversion factor for CY 2022 of $82.810 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.647 in the conversion factor relative to hospitals that met the requirements). In summary, for 2022, we proposed to use a reduced conversion factor of $82.810 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.647 in the conversion factor relative to hospitals that met the requirements). For 2022, we proposed to use a conversion factor of $84.457 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs.

That is, the proposed OPD fee schedule increase factor of 2.3 percent for CY 2022, the required proposed wage index budget neutrality adjustment of approximately 1.0012, the proposed cancer hospital payment adjustment of 1.0000, and the proposed adjustment of 0.32 percentage point of projected OPPS spending for the difference in pass-through spending that resulted in a proposed conversion factor for CY 2022 of $84.457. Comment. Two commenters request that the OPD fee schedule update factor be larger than the proposed 2.3 percent increase.

One commenter cited a MedPAC study [] that reported for 2019 that the aggregate Medicare margin for inpatient hospital providers was −8.7 percent among all inpatient hospital providers, and that the median Medicare margin was −1 percent for relatively efficient providers. This commenter appeared to request the OPD fee schedule update factor be increased sufficiently to substantially reduce the aggregate margin for hospital providers. The commenter also mentioned that the annual Consumer Price Index was 5.4 percent which was over 3 percentage points higher than the proposed 2.3 percent OPD fee schedule increase.

The second commenter, a state hospital association, claimed that unspecified recent payment cuts for outpatient hospital services have hurt the financial position of hospitals in their state. The commenter asks us to identify additional ways to increase hospital payment more than the proposed 2.3 percent OPD fee schedule increase. Response.

The OPD fee schedule update factor is designed to maintain a consistent level of payment for outpatient hospital services in Medicare year over year after taking into account changes in medical inflation and business productivity. In addition, the Start Printed Page 63500 OPPS conversion factor is not designed to redress payment reductions made in a non-budget neutral manner. The MedPAC study cited by one of the commenters reported, in addition to the aggregate Medicare margin for inpatient hospital providers, that the median margin for Medicare spending for relatively efficient hospitals was around −1 percent for 2019.

The same MedPAC study also recommended a 2.0 percent increase in outpatient hospital spending for 2022, which is actually lower than our proposed conversion factor update of 2.3 percent. The same commenter also suggested that the Consumer Price Index may be a better measure of medical inflation than the hospital market basket index used by CMS. The percentage change in the hospital market basket reflects the average change in the price of goods and services purchased by hospitals in order to provide medical care.

A general measure of health care inflation (such as the Consumer Price Index for Medical Care Services) would not be appropriate as it is not specific to hospital medical services and is not reflective of the input price changes experienced by hospitals but rather the inflation experienced by the consumer for their medical expenses. Comment. Two commenters supported our proposed CY 2022 OPD fee schedule increase factor percentage increase of 2.3 percent.

Response. We appreciate the support of the commenters. After reviewing the public comments that we received, we are finalizing these proposals with modification.

For CY 2022, we proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act (discussed in section II.F. Of this final rule with comment period). Based on the final rule updated data used in calculating the cancer hospital payment adjustment in section II.F.

Of this final rule with comment period, the target payment-to-cost ratio for the cancer hospital payment adjustment, which was 0.90 for CY 2021, is also 0.90 for CY 2022. As a result, we are applying a budget neutrality adjustment factor of 1.0000 to the conversion factor for the cancer hospital payment adjustment. For this CY 2022 OPPS/ASC final rule with comment period, as published in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45214), based on IGI's 2021 second quarter forecast with historical data through the first quarter of 2021, the hospital market basket update for CY 2022 is 2.7 percent and the estimate of the 10-year moving average growth of MFP for FY 2022 is 0.7 percent.

We note that as a result of the modifications in final policy for the CY 2022 wage index we are also including a change to the wage index budget neutrality adjustment so that the final overall budget neutrality factor of 1.0000 would apply for wage index changes. This adjustment is comprised of a 1.0001 budget neutrality adjustment, using our standard calculation of comparing proposed total estimated payments from our simulation model using the final FY 2022 IPPS wage indexes to those payments using the FY 2022 IPPS wage indexes, as adopted on a calendar year basis for the OPPS as well as a 0.9999 budget neutrality adjustment for the final CY 2022 5 percent cap on wage index decreases, requiring application of the 5 percent cap on CY 2021 wages, to ensure that this transition wage index is implemented in a budget neutral manner, consistent with the proposed FY 2022 IPPS wage index policy (86 FR 45552). As a result of these finalized policies, the OPD fee schedule increase factor for the CY 2022 OPPS is 2.0 percent (which reflects the 2.7 percent final estimate of the hospital inpatient market basket percentage increase with a 0.7 percentage point MFP adjustment).

For CY 2022, we are using a conversion factor of $84.177 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 OPD fee schedule increase factor of 2.0 percent for CY 2022, the required wage index budget neutrality adjustment of 1.0000, and the adjustment of−0.32 percentage point of projected OPPS spending for the difference in pass-through spending that results in a conversion factor for CY 2022 of $84.177. C.

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 the CY 2022 OPPS/ASC proposed rule (86 FR 42048 through 42049). 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 proposed to continue this policy for the CY 2022 OPPS. We referred readers to section II.H.

Of the CY 2022 OPPS/ASC proposed rule (86 FR 42056 through 42058) for a description and an example of how the wage index for a particular hospital is used to determine payment for the hospital. We did not receive any public comments on this proposal. Accordingly, for the reasons discussed above and in the CY 2022 OPPS/ASC proposed rule, we are finalizing our proposal, without modification, to continue this policy for the CY 2022 OPPS.

As discussed in the claims accounting narrative included with the supporting documentation for this final rule with comment period (which is available via the internet on the CMS website), for estimating APC costs, we are standardizing 60 percent of estimated claims costs for geographic area wage variation using the same FY 2022 pre-reclassified wage index that we use under the IPPS to standardize costs. This standardization process removes the effects of differences in area wage levels from the determination of a national unadjusted OPPS payment rate and copayment amount. Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS April 7, 2000 final rule with comment period (65 FR 18495 and 18545)), the OPPS adopted the final fiscal year IPPS post-reclassified wage index as the calendar year wage index for adjusting the OPPS standard payment amounts for labor market differences.

Therefore, the wage index that applies to a particular acute care, short-stay hospital under the IPPS also applies to that hospital under the OPPS. As initially explained in the September 8, 1998 OPPS 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 Start Printed Page 63501 with comment period (76 FR 74191). Section 10324 of the Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, which defines a frontier State and amended section 1833(t) of the Act to add paragraph (19), which requires a frontier State wage index floor of 1.00 in certain cases, and states that the frontier State floor shall not be applied in a budget neutral manner.

We codified these requirements at § 419.43(c)(2) and (3) of our regulations. For 2022, we proposed to implement this provision in the same manner as we have since CY 2011. Under this policy, the frontier State hospitals would receive a wage index of 1.00 if the otherwise applicable wage index (including reclassification, the rural floor, and rural floor budget neutrality) is less than 1.00.

Because the HOPD receives a wage index based on the geographic location of the specific inpatient hospital with which it is associated, the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. We referred readers to the FY 2011 through FY 2021 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. For FY 2017, 81 FR 56922.

For FY 2018, 82 FR 38142. For FY 2019, 83 FR 41380. For FY 2020, 84 FR 42312.

And for FY 2021, 85 FR 58765. We did not receive any public comments on this proposal. Accordingly, for the reasons discussed above and in the CY 2022 OPPS/ASC proposed rule, we are finalizing our proposal, without modification, to continue to implement the frontier State floor under the OPPS in the same manner as we have since CY 2011.

In addition to the changes required by the Affordable Care Act, we noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42050) that the proposed FY 2022 IPPS wage indexes continue to reflect a number of adjustments implemented in past years, including, but not limited to, reclassification of hospitals to different geographic areas, the rural floor provisions, an adjustment for occupational mix, an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment), and an adjustment to the wage index for certain low wage index hospitals to help address wage index disparities between low and high wage index hospitals. In addition, we noted that in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25405 through 25407), we proposed to implement section 9831 of the American Rescue Plan Act of 2021 (Pub. L.

117-2) which reinstates the imputed floor wage index adjustment under the IPPS for hospitals in all-urban states effective for discharges on or after October 1, 2021 (FY 2022) using the methodology described in § 412.64(h)(4)(vi) as in effect for FY 2018. Specifically, section 1886(d)(3)(E)(iv)(I) and (II) of the Act, as added by section 9831 of the American Rescue Plan Act, provides that for discharges occurring on or after October 1, 2021, the area wage index applicable under the IPPS to any hospital in an all-urban State may not be less than the minimum area wage index for the fiscal year for hospitals in that State established using the methodology described in § 412.64(h)(4)(vi) as in effect for FY 2018. We further noted in the FY 2022 IPPS/LTCH PPS proposed rule that, given the recent enactment of section 9831 of Public Law 117-2 on March 11, 2021, there was not sufficient time available to incorporate the changes required by this statutory provision (the reinstatement of the imputed floor wage index) into the calculation of the IPPS provider wage index for the FY 2022 IPPS/LTCH PPS proposed rule, and we stated that we would include the imputed floor wage index adjustment in the calculation of the IPPS provider wage index in the FY 2022 IPPS/LTCH PPS final rule.

We noted that CMS posted, concurrent with the issuance of the FY 2022 IPPS/LTCH proposed rule, estimated imputed floor values by state in a separate data file on the FY 2022 IPPS Proposed Rule web page on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index. In addition, we stated in the FY 2022 IPPS/LTCH PPS proposed rule that, based on data available for the FY 2022 IPPS/LTCH PPS proposed rule, the following States would be all-urban States as defined in section 1886(d)(3)(E)(iv)(IV) of the Act, and thus hospitals in such States would be eligible to receive an increase in their wage index due to application of the imputed floor for FY 2022. New Jersey, Rhode Island, Delaware, Connecticut, and Washington, DC.

We referred readers to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417) for a detailed discussion of all proposed changes to the FY 2022 IPPS wage indexes. A summary of the comments we received regarding the rural floor and the imputed floor for all-urban states and our responses to those comments appear below. Comment.

Some commenters expressed their support for the application of the rural floor policy which included support for the continued exclusion of the wage data of hospitals that have reclassified as rural under § 412.103 when calculating the wage index for the rural floor. Response. We appreciate the commenters' support for the application of the rural floor policy.

Comment. Some commenters opposed the continued application of a nationwide rural floor budget neutrality adjustment, noting that the policy does nothing more than benefit a few hospitals and exacerbate a downward spiral of the wage index for low wage index hospitals. Response.

We appreciate the commenters' concerns about application of the nationwide rural floor budget neutrality policy. However, as stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56920), for discharges occurring on or after October 1, 2010, for purposes of applying the rural floor, section 3141 of the Affordable Care Act replaced the statewide budget neutrality adjustment policy with the national budget neutrality adjustment policy that was in place during FY 2008. That is, section 3141 required that budget neutrality for the rural floor be applied “through a uniform, national adjustment to the area wage index” instead of within each State beginning in FY 2011 (75 FR 50160).

We continue to believe it is reasonable and appropriate to continue the current policy of applying budget neutrality for the rural floor under the OPPS on a national basis, consistent with the IPPS. We believe that hospital inpatient and outpatient departments are subject to the same labor cost environment, and therefore, the wage index and any applicable wage index adjustments (including the rural floor and rural floor budget neutrality) should be applied in the same manner under the IPPS and OPPS. Furthermore, we believe that applying the rural floor and rural floor budget neutrality in the same manner under the IPPS and OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.

In addition, we believe the application of different wage indexes and wage index adjustments under the IPPS and OPPS would add a level of administrative complexity that is overly burdensome and unnecessary. Therefore, we are Start Printed Page 63502 continuing the current policy of applying budget neutrality for the rural floor under the OPPS on a national basis, consistent with the IPPS. Comment.

Some commenters supported the proposed implementation of the imputed floor wage index policy. However, one commenter opposed the reinstatement of the imputed floor, stating that it exacerbates wage index disparities, but acknowledged that the proposal was in accordance with legislation enacted by Congress. This commenter requested CMS include details by state of the effects of the imputed floor.

Commenters both in support and in opposition of the imputed floor policy applauded its implementation without the application of budget neutrality, per section 9831 of the American Rescue Plan Act of 2021. A commenter specifically concurred with CMS' interpretation that the definition of an all-urban state according to section 9831 of the American Rescue Plan Act of 2021 is one in which no hospital receives the rural area wage index. Response.

We appreciate the commenters' support of the proposed implementation of the imputed floor policy, which we note has been finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through 45178). Responding to the commenter opposed to this policy, we underscore that, as the commenter itself pointed out, the imputed floor has been reinstated by statute in section 9831 of the American Rescue Plan Act of 2021. We believe that it is appropriate to apply the imputed floor policy in the OPPS in the same manner as under the IPPS, given the inseparable, subordinate status of the HOPD within the hospital overall.

In response to the commenter's request for details by state of the effects of the imputed floor, we direct the commenter to the data file that CMS posted concurrent with the FY 2022 IPPS/LTCH PPS proposed rule with estimated imputed floor value by state at https://www.cms.gov/​files/​zip/​fy2022-ipps-nprm-imputed-state-floors.zip. Finally, we note that section 9831 of the American Rescue Plan Act of 2021 excluded the imputed floor from the budget neutrality requirement under the IPPS (section 1886(d)(3)(E)(i) of the Act) but did not specify that the same budget neutral treatment also would apply under the OPPS. As a result, the changes related to the reinstatement of the imputed floor would be budget neutralized through the standard OPPS wage index budget neutrality adjustment, as discussed in section II.B.

Of this final rule with comment period. For more information about the imputed floor required by section 1886(d)(3)(E)(iv) of the Act, we refer readers to the regulations at § 412.64(e)(1) and (4) and (h)(4) and (5), and the discussion in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through 45178). In the CY 2022 OPPS/ASC proposed rule (86 FR 42050), we noted that as discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963) and in each subsequent IPPS/LTCH PPS final rule, including the FY 2021 IPPS/LTCH PPS final rule (85 FR 58743 through 58755), 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), for purposes of the IPPS, we adopted the use of the OMB statistical area delineations contained in OMB Bulletin No.

13-01, effective October 1, 2014. For purposes of the OPPS, in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66826 through 66828), we adopted the use of the OMB statistical area delineations contained in OMB Bulletin No. 13-01, effective January 1, 2015, beginning with the CY 2015 OPPS wage indexes.

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.

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. On August 15, 2017, OMB issued OMB Bulletin No.

17-01, which provided updates to and superseded OMB Bulletin No. 15-01 that was issued on July 15, 2015. The attachments to OMB Bulletin No.

17-01 provided detailed information on the update to the statistical areas since July 15, 2015, and were based on the application of the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas to Census Bureau population estimates for July 1, 2014 and July 1, 2015. For purposes of the OPPS, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58863 through 58865), we adopted the updates set forth in OMB Bulletin No. 17-01, effective January 1, 2019, beginning with the CY 2019 wage index.

On April 10, 2018, OMB issued OMB Bulletin No. 18-03 which superseded the August 15, 2017 OMB Bulletin No. 17-01.

On September 14, 2018, OMB issued OMB Bulletin No. 18-04 which superseded the April 10, 2018 OMB Bulletin No. 18-03.

Typically, interim OMB bulletins (those issued between decennial censuses) have only contained minor modifications to labor market delineations. However, the April 10, 2018 OMB Bulletin No. 18-03 and the September 14, 2018 OMB Bulletin No.

18-04 included more modifications to the labor market areas than are typical for OMB bulletins issued between decennial censuses, including some new CBSAs, urban counties that became rural, rural counties that became urban, and some existing CBSAs that were split apart. In addition, some of these modifications had a number of downstream effects, such as reclassification changes. These bulletins established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, and provided guidance on the use of the delineations of these statistical areas.

For purposes of the OPPS, in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85907 through 85908), we adopted the updates set forth in OMB Bulletin No. 18-04 effective January 1, 2021, beginning with the CY 2021 wage index. For a complete discussion of the adoption of the updates set forth in OMB Bulletin No.

18-04, we refer readers to the CY 2021 OPPS/ASC final rule with comment period. On March 6, 2020, OMB issued Bulletin No. 20-01, which provided updates to and superseded OMB Bulletin No.

18-04 that was issued on September 14, 2018. The attachments to OMB Bulletin No. 20-01 provided detailed information on the updates to statistical areas since September 14, 2018, and were based on the application of the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas to Census Bureau population estimates for July 1, 2017 and July 1, 2018.

(For a copy of this bulletin, we refer readers to the following website. Https://www.whitehouse.gov/​wp-content/​uploads/​2020/​03/​Bulletin-20-01.pdf .) In Start Printed Page 63503 OMB Bulletin No. 20-01, OMB announced one new Micropolitan Statistical Area, one new component of an existing Combined Statistical Area and changes to New England City and Town Area (NECTA) delineations.

As we stated in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397), after reviewing OMB Bulletin No. 20-01, we determined that the changes in Bulletin 20-01 encompassed delineation changes that would not affect the Medicare IPPS wage index for FY 2022. Specifically, the updates consisted of changes to NECTA delineations and the creation of a new Micropolitan Statistical Area, which was then added as a new component to an existing Micropolitan Statistical Area.

The Medicare wage index does not utilize NECTA definitions, and, as most recently discussed in FY 2021 IPPS/LTCH PPS final rule (85 FR 58746), we include hospitals located in Micropolitan Statistical areas in each State's rural wage index. Therefore, consistent with our discussion in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45164), while we are adopting the updates set forth in OMB Bulletin No. 20-01 consistent with our general policy of adopting OMB delineation updates, we note that specific OPPS wage index updates would not be necessary for CY 2022 as a result of adopting these OMB updates.

In other words, these OMB updates would not affect any hospital's geographic area for purposes of the OPPS wage index calculation for CY 2022. For CY 2022, we are continuing to use the OMB delineations that were adopted beginning with FY 2015 (based on the revised delineations issued in OMB Bulletin No. 13-01) to calculate the area wage indexes, with updates as reflected in OMB Bulletin Nos.

15-01, 17-01, 18-04, and 20-01, although as noted above the latter Bulletin did not require any wage area updates. We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42051) that, in connection with our adoption in FY 2021 of the updates in OMB Bulletin 18-04, we adopted a policy to place a 5 percent cap, for FY 2021, on any decrease in a hospital's wage index from the hospital's final wage index in FY 2020 so that a hospital's final wage index for FY 2021 would not be less than 95 percent of its final wage index for FY 2020. We referred the reader to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58753 through 58755) for a complete discussion of this transition.

As finalized in the FY 2021 IPPS/LTCH PPS final rule, this transition was set to expire at the end of FY 2021. However, as discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397), given the unprecedented nature of the ongoing erectile dysfunction treatment PHE, we sought comment in the FY 2022 IPPS/LTCH PPS proposed rule on whether it would be appropriate to continue to apply a transition for the FY 2022 IPPS wage index for hospitals negatively impacted by our adoption of the updates in OMB Bulletin 18-04. For example, we stated that such an extended transition could potentially take the form of holding the FY 2022 IPPS wage index for those hospitals harmless from any reduction relative to their FY 2021 wage index.

We further stated that if we were to apply a transition to the FY 2022 IPPS wage index for hospitals negatively impacted by our adoption of the updates in OMB Bulletin 18-04, we also sought comment on making this transition budget neutral under the IPPS, as is our usual practice, in the same manner that the FY 2021 IPPS wage index transition was made budget neutral as discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58755). A summary of the comments we received regarding a wage index transition policy for 2022 as described above, and our responses to those comments, appear below. Comment.

We received multiple comments strongly recommending CMS extend a transition policy similar to that implemented in FY 2020 and FY 2021 in the IPPS. Multiple commenters, citing the severity and continuing impact of changes related to the OMB updates, the low wage index policy, and the lingering financial burden caused by the erectile dysfunction treatment PHE, urged CMS to add an additional year of transition for both inpatient hospital and outpatient hospital providers, applied in a budget neutral manner. These commenters stated that given the wide-ranging factors impacting wage index values, it would not be equitable to limit the transition adjustment only to the effects of the revised labor market delineations.

The commenters requested the transition be implemented more broadly to all hospitals experiencing large declines in wage index values. Many of these commenters recommended CMS consider making a permanent 5 percent maximum reduction policy to protect hospitals from large year-to-year variations in wage index values as a means to reduce overall volatility. Multiple commenters requested that CMS extend a hold harmless policy for all hospitals negatively affected by CMS' adoption of revised delineations until OMB releases further revisions predicated on the results of the 2020 decennial census.

A commenter recommended a hold-harmless transition be applied specifically to hospitals in CBSAs that were negatively affected by the FY 2021 adoption of revised CBSAs, citing specific CBSAs they believed warranted an additional transition adjustment. Multiple commenters, while supporting some form of transition adjustment for negatively affected hospitals, requested any such adjustment be made in a non-budget neutral manner. These commenters expressed their preference that any such adjustment should not come at the expense of the providers themselves.

Some commenters stated that such a budget neutrality adjustment would disadvantage providers who have increased their wage index values due to a variety of factors. Response. We refer readers to the FY 2022 IPPS/LTCH PPS final rule (86 FR 45164 through 45165) for a detailed discussion of the wage index transition policy finalized for the FY 2022 IPPS wage index and for responses to these and other comments relating to the wage index transition policy.

As we noted, in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45164 through 45165), we finalized a wage index transition policy for the FY 2022 IPPS wage index. Specifically, for hospitals that received the transition in FY 2021, we are continuing a wage index transition for FY 2022 under which we will apply a 5 percent cap on any decrease in the hospital's wage index compared to its wage index for FY 2021 to mitigate significant negative impacts of, and provide additional time for hospitals to adapt to, the CMS decision to adopt the revised OMB delineations (86 FR 45164). We stated that, as discussed in the FY 2021 IPPS/LTCH final rule, we believe applying a 5-percent cap on any decrease in a hospital's wage index from the hospital's final wage index from the prior fiscal year is an appropriate transition as it provides predictability in payment levels from FY 2021 to the upcoming FY 2022 as well as effectively mitigating any significant decreases in the wage index for FY 2022 (86 FR 45164).

We considered and responded to comments requesting that we apply the transition adjustment in FY 2022 to all hospitals with significant reductions in wage index values (not just those that received the transition adjustment in FY 2021), as well as comments recommending a 5-percent cap become a permanent policy for future fiscal years (86 FR 45164 through 45165). In addition, we considered and responded to comments recommending we not apply the transition in a budget neutral manner (86 FR 45165). We stated that Start Printed Page 63504 for FY 2022, similar to FY 2021, we are applying a budget neutrality adjustment to the standardized amount so that our transition, as previously described, is implemented in a budget neutral manner under our authority in section 1886(d)(5)(I) of the Act (86 FR 45165).

In the CY 2022 OPPS/ASC proposed rule (86 FR 42051 through 42052), we proposed to use the FY 2022 IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2022. Therefore, as we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42052), any adjustments for the FY 2022 IPPS post-reclassified wage index, including without limitation any wage index transition policy that may be applied, would be reflected in the final CY 2022 OPPS wage index beginning on January 1, 2022. We continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.

For this reason, as discussed later in this section, we are finalizing our proposal to use the FY 2022 IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2022, which will include the wage index transition policy discussed previously. CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes.

The FY 2018 IPPS/LTCH PPS final rule (82 FR 38130) discussed the two different lists of codes to identify counties. Social Security Administration (SSA) codes and Federal Information Processing Standard (FIPS) codes. Historically, CMS listed and used SSA and FIPS county codes to identify and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS wage indexes.

However, the SSA county codes are no longer being maintained and updated, although the FIPS codes continue to be maintained by the U.S. Census Bureau. The Census Bureau's most current statistical area information is derived from ongoing census data received since 2010.

The most recent data are from 2015. The Census Bureau maintains a complete list of changes to counties or county equivalent entities on the website at. Https://www.census.gov/​geo/​reference/​county-changes.html (which, as of May 6, 2019, migrated to.

Https://www.census.gov/​programs-surveys/​geography.html ). In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130), for purposes of crosswalking counties to CBSAs for the IPPS wage index, we finalized our proposal to discontinue the use of the SSA county codes and begin using only the FIPS county codes. Similarly, for the purposes of crosswalking counties to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59260), we finalized our proposal to discontinue the use of SSA county codes and begin using only the FIPS county codes.

For CY 2022, under the OPPS, we are continuing to use only the FIPS county codes for purposes of crosswalking counties to CBSAs. We proposed to use the FY 2022 IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2022. Therefore, we stated that any adjustments for the FY 2022 IPPS post-reclassified wage index, including, but not limited to, the imputed floor adjustment and any transition that may be applied (as discussed previously), would be reflected in the final CY 2022 OPPS wage index beginning on January 1, 2022.

(We referred readers to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417) and the proposed FY 2022 hospital wage index files posted on the CMS website.) With regard to budget neutrality for the CY 2022 OPPS wage index, we referred readers to section II.B. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42048 through 42049). We stated that we continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.

We refer readers to the discussion of comments on the wage index transition policy for 2022, and our responses to those comments, earlier in this section. We did not receive any additional comments on this proposal and are finalizing it without modification. Hospitals that are paid under the OPPS, but not under the IPPS, do not have an assigned hospital wage index under the IPPS.

Therefore, for non-IPPS hospitals paid under the OPPS, it is our longstanding policy to assign the wage index that would be applicable if the hospital was paid under the IPPS, based on its geographic location and any applicable wage index adjustments. In the CY 2022 OPPS/ASC proposed rule, we proposed to continue this policy for CY 2022, and included a brief summary of the major proposed FY 2022 IPPS wage index policies and adjustments that we proposed to apply to these hospitals under the OPPS for CY 2022. Which we have summarized below.

We referred readers to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417) for a detailed discussion of the proposed changes to the FY 2022 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 are eligible for the out-migration wage index adjustment if they are located in a section 505 out-migration county. This is the same out-migration adjustment policy that would apply if the hospital were paid under the IPPS. For CY 2022, we proposed to continue our policy of allowing non-IPPS hospitals paid under the OPPS to qualify for the outmigration adjustment if they are located in a section 505 out-migration county (section 505 of the MMA).

Furthermore, we proposed that the wage index that would apply for CY 2022 to non-IPPS hospitals paid under the OPPS would continue to include the rural floor adjustment and any adjustments applied to the IPPS wage index to address wage index disparities. In addition, the wage index that would apply to non-IPPS hospitals paid under the OPPS would include any transition we may finalize for the FY 2022 IPPS wage index as discussed previously. We did not receive any comments on these proposals and are finalizing them without modification.

For CMHCs, for CY 2022, we proposed to continue to calculate the wage index by using the post-reclassification IPPS wage index based on the CBSA where the CMHC is located. Furthermore, we proposed that the wage index that would apply to CMHCs for CY 2022 would continue to include the rural floor adjustment and any adjustments applied to the IPPS wage index to address wage index disparities. In addition, the wage index that would apply to CMHCs would include any transition we may finalize for the FY 2022 IPPS wage index as discussed above.

Also, we proposed that the wage index that would apply to CMHCs would not include the outmigration adjustment because that Start Printed Page 63505 adjustment only applies to hospitals. We did not receive any comments on these proposals and are finalizing them without modification. Table 4A associated with the FY 2022 IPPS/LTCH PPS final rule (available via the internet on the CMS website at.

Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index ) identifies counties eligible for the out-migration adjustment. Table 2 associated with the FY 2022 IPPS/LTCH PPS final rule (available for download via the website above) identifies IPPS hospitals that receive the out-migration adjustment for FY 2022. We are including the outmigration adjustment information from Table 2 associated with the FY 2022 IPPS/LTCH PPS final rule as Addendum L to the CY 2022 OPPS/ASC final rule with the addition of non-IPPS hospitals that will receive the section 505 outmigration adjustment under the CY 2022 OPPS/ASC final rule.

Addendum L is available via the internet on the CMS website. We refer readers to the CMS website for the OPPS at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.

At this link, readers will find a link to the final FY 2022 IPPS wage index tables and Addendum L. D. Statewide Average Default Cost-to-Charge Ratios (CCRs) In addition to using CCRs to estimate costs from charges on claims for ratesetting, we use overall hospital-specific CCRs calculated from the hospital's most recent cost report to determine outlier payments, payments for pass-through devices, and monthly interim transitional corridor payments under the OPPS during the PPS year.

For certain hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii), we use the statewide average default CCRs to determine the payments mentioned earlier if it is not possible to determine an accurate CCR for a hospital in certain circumstances. This includes hospitals that are new, hospitals that have not accepted assignment of an existing hospital's provider agreement, and hospitals that have not yet submitted a cost report. We also use the statewide average default CCRs to determine payments for hospitals whose CCR falls outside the predetermined ceiling threshold for a valid CCR or for hospitals in which the most recent cost report reflects an all-inclusive rate status (Medicare Claims Processing Manual (Pub.

100-04), Chapter 4, Section 10.11). We discussed our policy for using default CCRs, including setting the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599) in the context of our adoption of an outlier reconciliation policy for cost reports beginning on or after January 1, 2009. For details on our process for calculating the statewide average CCRs, we refer readers to the CY 2022 OPPS final rule Claims Accounting Narrative that is posted on our website.

We proposed to calculate the default ratios for CY 2022 using cost report data from the same set of cost reports we originally used in the CY 2021 OPPS ratesetting, consistent with the broader proposal regarding 2022 OPPS ratesetting discussed in section X.E. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190). We did not receive any public comments on our proposal and are finalizing our proposal, without modification, to calculate the default ratios for CY 2022 using cost report data from the same set of cost reports we originally used in the CY 2021 OPPS ratesetting.

We no longer publish a table in the Federal Register containing the statewide average CCRs in the annual OPPS proposed rule and final rule with comment period. These CCRs with the upper limit will be available for download with each OPPS CY proposed rule and final rule on the CMS website. We refer readers to our website at.

Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html. Click on the link on the left of the page titled “Hospital Outpatient Regulations and Notices” and then select the relevant regulation to download the statewide CCRs and upper limit in the Downloads section of the web page. E.

Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2022 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) (Pub. L. 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, items paid at charges reduced to costs, and devices paid under the pass-through payment policy, in accordance with section 1833(t)(13)(B) of the Act.

In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010 and 68227), for purposes of receiving this rural adjustment, we revised our regulations at § 419.43(g) to clarify that essential access community hospitals (EACHs) are also eligible to receive the rural SCH adjustment, assuming these entities otherwise meet the rural adjustment criteria. Currently, two hospitals are classified as EACHs, and as of CY 1998, under section 4201(c) of 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 2021. Further, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated the regulations at § 419.43(g)(4) to specify, in general terms, that items paid at charges adjusted to costs by application of a hospital-specific CCR are excluded from the 7.1 percent payment adjustment.

For CY 2022, we proposed to continue the current 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, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy. Comment. One commenter requested that CMS make the 7.1 percent rural adjustment permanent.

The commenter appreciated the policy that CMS Start Printed Page 63506 adopted in CY 2019 and reaffirmed in CY 2020 where we stated that the 7.1 percent rural adjustment would continue to be in place until our data support establishing a different rural adjustment percentage. However, the commenter believes that this policy still does not provide enough certainty for rural SCHs and EACHs to know whether they should take into account the rural SCH adjustment when attempting to calculate expected revenues for their hospital budgets. Response.

We thank the commenter for their input. We believe that our current policy, which states that the 7.1 percent payment adjustment for rural SCHs and EACHs will remain in effect until our data show that a different percentage for the rural payment adjustment is necessary, provides sufficient budget predictability for rural SCHs and EACHs. Providers would receive notice in a proposed rule and have the opportunity to provide comments before any changes to the rural adjustment percentage would be implemented.

After consideration of the public comment we received, we are finalizing our proposal, without modification, to continue the current 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 passthrough payment policy, and items paid at charges reduced to costs. F. Payment Adjustment for Certain Cancer Hospitals for CY 2022 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), the Congress added section 1833(t)(7), “Transitional Adjustment to Limit Decline in Payment,” to the Act, which requires the Secretary to determine OPPS payments to cancer and children's hospitals based on their pre-BBA payment amount (these hospitals are often referred to under this policy as “held harmless” and their payments are often referred to as “hold harmless” payments). As required under section 1833(t)(7)(D)(ii) of the Act, a cancer hospital receives the full amount of the difference between payments for covered outpatient 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 § 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 recently submitted or settled cost report data that are available at the time of final rulemaking for the calendar year. The amount of the payment adjustment is made on an aggregate basis at cost report settlement.

We note that the changes made by section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs are assessed, as usual, after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period. Table 5 displays the target PCR for purposes of the cancer hospital adjustment for CY 2012 through CY 2021.

Start Printed Page 63507 2. Policy for CY 2022 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 § 419.43(i) (that is, the payment adjustment for certain cancer hospitals) for services furnished on or after January 1, 2018, the target PCR adjustment be reduced by 1.0 percentage point less than what would otherwise apply. Section 16002(b) also provides that, in addition to the percentage reduction, the Secretary may consider making an additional percentage point reduction to the target PCR that takes into account payment rates for applicable items and services described under section 1833(t)(21)(C) of the Act for hospitals that are not cancer hospitals described under section 1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality adjustment under section 1833(t) of the Act, the Secretary shall not take into account the reduced expenditures that result from application of section 1833(t)(18)(C) of the Act.

We proposed 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 were available at the time of the development of the proposed rule, reduced by 1.0 percentage point, to comply with section 16002(b) of the 21st Century Cures Act. We did not propose an additional reduction beyond the 1.0 percentage point reduction required by section 16002(b) of the 21st Century Cures Act for CY 2022. Under our established policy, to calculate the proposed CY 2022 target PCR, we would use the same extract of cost report data from HCRIS used to estimate costs for the CY 2022 OPPS which would be the most recently available hospital cost reports which, in most cases, would be from CY 2020.

However, as discussed in section II.A.1.a of the CY 2022 OPPS/ASC proposed rule, given our concerns with CY 2020 claims data as a result of the PHE, we believe a target PCR based on CY 2020 claims and the most recently available cost reports may provide a less accurate estimation of cancer hospital PCRs and non-cancer hospital PCRs than the data used for the CY 2021 rulemaking cycle. Therefore, for CY 2022, we proposed to continue to use the CY 2021 target PCR of 0.89. This proposed CY 2022 target PCR of 0.89 includes the 1.0-percentage point reduction required by section 16002(b) of the 21st Century Cures Act for CY 2022.

For a description of the CY 2021 target PCR calculation, we refer readers to the CY 2021 OPPS/ASC final rule with comment period (84 FR 85912 through 85914). We did not receive any public comments on our proposal and we are finalizing our proposal to continue to use the CY 2021 target PCR of 0.89 for the 11 specified cancer hospitals for CY 2022 without modification. Table 6 shows the estimated percentage increase in OPPS payments to each cancer hospital for CY 2022, due to the cancer hospital payment adjustment policy.

The actual amount of the CY 2022 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2022 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.

Start Printed Page 63508 G. 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 2021, the outlier threshold was met when the hospital's cost of furnishing a service exceeded 1.75 times (the multiplier threshold) the APC payment amount and exceeded the APC payment amount plus $5,300 (the fixed-dollar amount threshold) (85 FR 85914 through 85916).

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.

Using CY 2019 claims available for this final rule with comment period, we estimate that we paid approximately 0.89 percent of the total aggregated OPPS payments in outliers for CY 2019. Therefore, for CY 2019, we estimate that we paid 0.11 percentage points below the CY 2019 outlier target of 1.0 percent of total aggregated OPPS payments. For this final rule with comment period, using CY 2019 claims data and CY 2021 payment rates, we estimate that the aggregate outlier payments for CY 2021 would be approximately 1.07 percent of the total CY 2021 OPPS payments.

We provide estimated CY 2021 outlier payments for hospitals and CMHCs with claims included in the claims data that we used to model impacts in the Hospital-Specific Impacts—Provider-Specific Data file on the CMS website at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. 2.

Outlier Calculation for CY 2022 For CY 2022, we proposed to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS. We proposed 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.

We proposed 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 Start Printed Page 63509 proposed 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.C. Of the CY 2022 OPPS/ASC proposed rule.

To ensure that the estimated CY 2022 aggregate outlier payments would equal 1.0 percent of estimated aggregate total payments under the OPPS, we proposed 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 $6,100. We calculated the proposed fixed-dollar threshold of $6,100 using the standard methodology most recently used for CY 2021 (85 FR 85914 through 85916). For purposes of estimating outlier payments for the CY 2022 OPPS/ASC proposed rule, we used the hospital-specific overall ancillary CCRs available in the April 2020 update to the Outpatient Provider-Specific File (OPSF).

The OPSF contains provider-specific data, such as the most current CCRs, which are maintained by the MACs and used by the OPPS Pricer to pay claims. The claims that we generally use to model each OPPS update lag by 2 years. However, as discussed in section X.E.

Of the CY 2022 OPPS/ASC proposed rule, we proposed to use CY 2019 claims in establishing the CY 2022 OPPS. In order to estimate the CY 2022 hospital outlier payments for the proposed rule, we inflated the charges on the CY 2019 claims using the same inflation factor of 1.20469 that we used to estimate the IPPS fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25718). We used an inflation factor of 1.13218 to estimate CY 2021 charges from the CY 2019 charges reported on CY 2019 claims, applying the charge inflation factor for two years, to estimate CY 2021 hospital outlier payments.

The methodology for determining this charge inflation factor is discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 59037 through 59040). As we stated in the CY 2005 OPPS final rule with comment period (69 FR 65844 through 65846), we believe that the use of these charge inflation factors is appropriate for the OPPS because, with the exception of the inpatient routine service cost centers, hospitals use the same ancillary and cost centers to capture costs and charges for inpatient and outpatient services. As noted in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68011), we are concerned that we could systematically overestimate the OPPS hospital outlier threshold if we did not apply a CCR inflation adjustment factor.

Therefore, we proposed to apply the same CCR inflation adjustment factor that we proposed to apply for the FY 2022 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2022 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2022, we proposed to apply an adjustment factor of 0.94964 (or 0.974495 * 0.974495) to the CCRs that were in the April 2020 OPSF to trend them forward from CY 2020 to CY 2022. We note that we proposed to use the April 2020 OPSF to address concerns regarding the impact of the PHE on data used in OPPS ratesetting, as discussed in section X.E.

Of the CY 2022 OPPS/ASC proposed rule. The methodology for calculating the proposed adjustment is discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25717 through 25719). To model hospital outlier payments for the CY 2022 OPPS/ASC proposed rule, we applied the overall CCRs from the April 2020 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 0.94964 to approximate CY 2022 CCRs) to charges on CY 2019 claims that were adjusted (using the proposed charge inflation factor of 1.20469 to approximate CY 2022 charges).

We note that the additional year in the charge inflation factor and CCR inflation factors is a result of the use of claims and OPSF data from a year earlier than the year that we would typically use in a standard ratesetting cycle. We simulated aggregated CY 2021 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 2021 OPPS payments. We estimated that a proposed fixed-dollar threshold of $6,100, 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 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 proposed 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 XIV.

Of the CY 2022 OPPS/ASC proposed rule. Comment. One commenter recommended that, in light of the PHE, CMS should not update the OPPS outlier fixed-dollar threshold at a time when hospitals are struggling financially.

Response. We maintain the target outlier percentage of 1.0 percent of estimated aggregate total payments under the OPPS and have a fixed-dollar threshold so that OPPS outlier payments are made only when the hospital would experience a significant loss for furnishing a particular service. We continue to believe that the 1.0 percent OPPS outlier spending target appropriately mitigates the financial risk associated with exceptionally costly or complex cases.

In addition, in a budget neutral system any spending for OPPS outliers would require a corresponding reduction to all other OPPS payments, which would have a universal impact on hospitals because every OPPS payment would be reduced. The fixed-dollar outlier threshold is specifically developed in order to best estimate aggregate outlier payments of 1.0 percent of the OPPS and ensure that outlier payments are directed towards the high cost and complex procedures associated with potential financial risk. Failing to update this outlier threshold would systemically underestimate the Start Printed Page 63510 amount of OPPS outlier payments and result in OPPS outlier payments in excess of 1.0 percent of aggregate OPPS payments.

After consideration of the public comment we received, we are finalizing our proposal, without modification, to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS and to use our established methodology to set the OPPS outlier fixed-dollar loss threshold for CY 2022. 3. Final Outlier Calculation Historically, we have used updated data for the outlier fixed-dollar threshold calculation for the final rule.

However, as discussed in section X.E. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190) claims and other data that we would typically have used as part of our ratesetting process would have been affected by the PHE. As a result, we proposed to use CY 2019 OPPS claims as part of the CY 2022 OPPS ratesetting process.

For purposes of estimating the outlier threshold, we are finalizing our proposal to apply the same CCR inflation adjustment factor that we finalized to apply for the FY 2022 IPPS outlier calculation to the CCRs used to simulate the final CY 2022 OPPS outlier payments to determine the fixed-dollar threshold. As discussed in the FY 2022 IPPS/LTCH PPS final rule with comment period (86 FR 45537 through 45543), there are some changes to the typical charge and CCR inflation factors we would use for outlier estimating purposes as a result of the proposed and final policy to use data prior to the PHE. Ordinarily, we would use updated CCRs of the OPSF and apply an adjustment factor to adjust the CCRs from the most recent update of OPSF.

However, as discussed previously, we believe the most recent CCRs in the OPSF may be significantly impacted by the PHE. As a result, and similar to the proposed use of CY 2019 claims in CY 2022 OPPS ratesetting more broadly, we proposed to use OPSF CCRs from the April 2020 OPSF for CY 2022 outlier estimation purposes. The claims and OPSF data are not the most updated data available and therefore to properly update them for the prospective year—CY 2022—we needed to apply an additional year of CCRs and charge inflation.

For CY 2022, we are applying the overall CCRs from the April 2020 OPSF file (using the CCR inflation adjustment factor of 0.94964 to approximate CY 2021 CCRs) to charges on CY 2019 claims that were adjusted using a charge inflation factor of 1.20469 to approximate CY 2022 charges. These are the same CCR adjustment and charge inflation factors that were used to set the IPPS fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS final rule (86 FR 45537 through 45543). We simulate aggregate CY 2022 hospital outlier payments using these costs for several different fixed-dollar thresholds, holding the 1.75 multiple-threshold constant and assuming that outlier payments will 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 total outlier payments equal 1.0 percent of aggregated estimated total CY 2022 OPPS payments.

We estimate that a fixed-dollar amount threshold of $6,175 combined with the multiplier threshold of 1.75 times the APC payment rate, will allocate the 1.0 percent of aggregated total OPPS payments to outlier payments. For CY 2022, we are finalizing a multiplier threshold of 1.75 times the APC payment rate and a fixed-dollar amount threshold of $6,175. For CMHCs, if a CMHC's cost for partial hospitalization services, paid under APC 5853, exceeds 3.40 times the payment rate the outlier payment will be calculated as 50 percent of the amount by which the cost exceeds 3.40 times APC 5853.

H. 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 final rule with comment period, the payment rate for most services and procedures for which payment is made under the OPPS is the product of the conversion factor calculated in accordance with section II.B.

Of this final rule with comment period and the relative payment weight determined under section II.A. Of this final rule with comment period. Therefore, the national unadjusted payment rate for most APCs contained in Addendum A to this final rule with comment period (which is available via the internet on the CMS website) and for most HCPCS codes to which separate payment under the OPPS has been assigned in Addendum B to this final rule with comment period (which is available via the internet on the CMS website) was calculated by multiplying the final CY 2022 scaled weight for the APC by the CY 2022 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 XIV.

Of this final rule with comment period. We demonstrate the steps used to determine the APC payments that will be made in a CY under the OPPS to a hospital that fulfills the Hospital OQR Program requirements and to a hospital that fails to meet the Hospital OQR Program requirements for a service that has any of the following status indicator assignments. €œJ1”, “J2”, “P”, “Q1”, “Q2”, “Q3”, “Q4”, “R”, “S”, “T”, “U”, or “V” (as defined in Addendum D1 to the proposed rule, which is available via the internet on the CMS website), in a circumstance in which the multiple procedure discount does not apply, the procedure is not bilateral, and conditionally packaged services (status indicator of “Q1” and “Q2”) qualify for separate payment.

We note that, although blood and blood products with status indicator “R” and brachytherapy sources with status indicator “U” are not subject to wage adjustment, they are subject to reduced payments when a hospital fails to meet the Hospital OQR Program requirements. Individual providers interested in calculating the payment amount that they will receive for a specific service from the national unadjusted payment rates presented in Addenda A and B to the proposed rule (which are available via the internet on the CMS website) should follow the formulas presented in the following steps. For purposes of the payment calculations below, we refer to the national unadjusted payment rate for hospitals that meet the requirements of the Hospital OQR Program as the “full” national unadjusted payment rate.

We refer to the national unadjusted payment rate for hospitals that fail to meet the requirements of the Hospital OQR Program as the “reduced” national unadjusted payment rate. The reduced Start Printed Page 63511 national unadjusted payment rate is calculated by multiplying the reporting ratio of 0.9804 times the “full” national unadjusted payment rate. The national unadjusted payment rate used in the calculations below is either the full national unadjusted payment rate or the reduced national unadjusted payment rate, depending on whether the hospital met its Hospital OQR Program requirements to receive the full CY 2022 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. The wage index values assigned to each area would reflect the geographic statistical areas (which are based upon OMB standards) to which hospitals are assigned for FY 2022 under the IPPS, reclassifications through the Medicare Geographic Classification Review Board (MGCRB), section 1886(d)(8)(B) “Lugar” hospitals, and reclassifications under section 1886(d)(8)(E) of the Act, as implemented in § 412.103 of the regulations. We are continuing to apply for the CY 2022 OPPS wage index any adjustments for the FY 2022 IPPS post-reclassified wage index, including, but not limited to, the rural floor adjustment, a wage index floor of 1.00 in frontier states, in accordance with section 10324 of the Affordable Care Act of 2010, and an adjustment to the wage index for certain low wage index hospitals.

For further discussion of the wage index we are applying for the CY 2022 OPPS, we refer readers to section II.C. Of this final rule with comment period. 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 Pub. L. 108-173.

Addendum L to this final rule with comment period (which is available via the internet on the CMS website) contains the qualifying counties and the associated wage index increase developed for the final FY 2022 IPPS wage index, which are listed in Table 2 associated with the FY 2022 IPPS/LTCH PPS final rule and available via the internet on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. (Click on the link on the left side of the screen titled “FY 2022 IPPS Final Rule Home Page” and select “FY 2022 Final Rule Tables.”) This step is to be followed only if the hospital is not reclassified or redesignated under section 1886(d)(8) or section 1886(d)(10) of the Act.

Step 4. Multiply the applicable wage index determined under Steps 2 and 3 by the amount determined under Step 1 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.

Xais the labor-related portion of the national unadjusted payment rate (wage adjusted). Xa = .60 * (national unadjusted payment rate) * applicable wage index. Step 5.

Calculate 40 percent (the nonlabor-related portion) of the national unadjusted payment rate and add that amount to the resulting product of Step 4. The result is the wage index adjusted payment rate for the relevant wage index area. The formula below is a mathematical representation of Step 5 and calculates the remaining portion of the national payment rate, the amount not attributable to labor, and the adjusted payment for the specific service.

Y is the nonlabor-related portion of the national unadjusted payment rate. Y = .40 * (national unadjusted payment rate). Adjusted Medicare Payment = Y + Xa.

Step 6. If a provider is an SCH, as set forth in the regulations at § 412.92, or an EACH, which is considered to be an SCH under section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural area, as defined in § 412.64(b), or is treated as being located in a rural area under § 412.103, multiply the wage index adjusted payment rate by 1.071 to calculate the total payment. The formula below is a mathematical representation of Step 6 and applies the rural adjustment for rural SCHs.

Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment * 1.071. We are providing examples below of the calculation of both the full and reduced national unadjusted payment rates that will apply to certain outpatient items and services performed by hospitals that meet and that fail to meet the Hospital OQR Program requirements, using the steps outlined previously. For purposes of this example, we are using a provider that is located in Brooklyn, New York that is assigned to CBSA 35614.

This provider bills one service that is assigned to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage). The CY 2022 full national unadjusted payment rate for APC 5071 is $635.54. The proposed reduced national unadjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is $623.08.

This proposed reduced rate is calculated by multiplying the reporting ratio of 0.9804 by the full unadjusted payment rate for APC 5071. The FY 2022 wage index for a provider located in CBSA 35614 in New York, which includes the proposed adoption of IPPS 2022 wage index policies, is 1.3427. The labor-related portion of the proposed full national unadjusted payment is approximately $512.00 (.60 * $635.54 * 1.3427).

The labor-related portion of the proposed reduced national unadjusted payment is approximately $501.97 (.60 * $623.08 * 1.3427). The nonlabor-related portion of the proposed full national unadjusted payment is approximately $254.22 (.40 * $635.54). The nonlabor-related portion of the proposed reduced national unadjusted payment is approximately $249.23 (.40 * $623.08).

The sum of the labor-related and nonlabor-related portions of the proposed full national adjusted payment is approximately $766.22 ($512.00 + $254.22). The sum of the portions of the proposed reduced national adjusted payment is approximately $751.20 ($501.97 + $249.23). We did not receive any public comments on these steps under the methodology that we included in the proposed rule to determine the APC payments for CY 2022.

Therefore, we are using the steps in the methodology specified above, as we proposed, to demonstrate the calculation of the final Start Printed Page 63512 CY 2021 OPPS payments using the same parameters. I. Beneficiary Copayments 1.

Background Section 1833(t)(3)(B) of the Act requires the Secretary to set rules for determining the unadjusted copayment amounts to be paid by beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of the Act specifies that the Secretary must reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed a specified percentage. As specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective copayment rate for a covered OPD service paid under the OPPS in CY 2006, and in CYs thereafter, shall not exceed 40 percent of the APC payment rate.

Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered OPD service (or group of such services) furnished in a year, the national unadjusted copayment amount cannot be less than 20 percent of the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure (including items such as drugs and biologicals) performed in a year to the amount of the inpatient hospital deductible for that year. Section 4104 of the Affordable Care Act eliminated the Medicare Part B coinsurance for preventive services furnished on and after January 1, 2011, that meet certain requirements, including flexible sigmoidoscopies and screening colonoscopies, and waived the Part B deductible for screening colonoscopies that become diagnostic during the procedure.

For a discussion of the changes made by the Affordable Care Act with regard to copayments for preventive services furnished on and after January 1, 2011 we refer readers to section XII.B. Of the CY 2011 OPPS/ASC final rule with comment period (75 FR 72013). 2.

OPPS Copayment Policy For CY 2022, we proposed 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 proposed 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, 2022 are included in Addenda A and B to the proposed rule (which are available via the internet on the CMS website).

As discussed in section XIV.E. Of the CY 2022 OPPS/ASC proposed rule and this final rule with comment period, for CY 2022, the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies will equal the product of the reporting ratio and the national unadjusted copayment, or the product of the reporting ratio and the minimum unadjusted copayment, respectively, for the service. We note that OPPS copayments may increase or decrease each year based on changes in the calculated APC payment rates, due to updated cost report and claims data, and any changes to the OPPS cost modeling process.

However, as described in the CY 2004 OPPS final rule with comment period, the development of the copayment methodology generally moves beneficiary copayments closer to 20 percent of OPPS APC payments (68 FR 63458 through 63459). In the CY 2004 OPPS final rule with comment period (68 FR 63459), we adopted a new methodology to calculate unadjusted copayment amounts in situations including reorganizing APCs, and we finalized the following rules to determine copayment amounts in CY 2004 and subsequent years. When an APC group consists solely of HCPCS codes that were not paid under the OPPS the prior year because they were packaged or excluded or are new codes, the unadjusted copayment amount would be 20 percent of the APC payment rate.

If a new APC that did not exist during the prior year is created and consists of HCPCS codes previously assigned to other APCs, the copayment amount is calculated as the product of the APC payment rate and the lowest coinsurance percentage of the codes comprising the new APC. • If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is equal to or greater than the prior year's rate, the copayment amount remains constant (unless the resulting coinsurance percentage is less than 20 percent). • If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is less than the prior year's rate, the copayment amount is calculated as the product of the new payment rate and the prior year's coinsurance percentage.

If HCPCS codes are added to or deleted from an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in a decrease in the coinsurance percentage for the reconfigured APC, the copayment amount would not change (unless retaining the copayment amount would result in a coinsurance rate less than 20 percent). If HCPCS codes are added to an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in an increase in the coinsurance percentage for the reconfigured APC, the copayment amount would be calculated as the product of the payment rate of the reconfigured APC and the lowest coinsurance percentage of the codes being added to the reconfigured APC. We noted in the CY 2004 OPPS final rule with comment period that we would seek to lower the copayment percentage for a service in an APC from the prior year if the copayment percentage was greater than 20 percent.

We noted that this principle was consistent with section 1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the national unadjusted coinsurance rate so that beneficiary liability will eventually equal 20 percent of the OPPS payment rate for all OPPS services to which a copayment applies, and with section 1833(t)(3)(B) of the Act, which achieves a 20-percent copayment percentage when fully phased in and gives the Secretary the 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). Section 122 of the Consolidated Appropriations Act (CAA) of 2021 (Pub.

L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal Cancer Screening Tests, amends section Start Printed Page 63513 1833(a) of the Act to offer a special coinsurance rule for screening flexible sigmoidoscopies and screening colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test. We refer readers to section X.B., “Changes to Beneficiary Coinsurance for Certain Colorectal Cancer Screening Tests” of this final rule with comment period for the full discussion of this policy.

Comment. One commenter requested that CMS waive the patient coinsurance and deductible for Biomechanical Computed Tomography (BCT) analysis, CPT 0554T to 0558T under the Medicare preventive services benefit 42 CFR 410.152(l)(6). The commenter stated that these codes are considered preventive services for diagnostic screening of osteoporosis and that Change Request (CR) 11392 directed contractors to apply the same rules applied to CPT code 77078 (Computed tomography, bone mineral density study, 1 or more sites, axial skeleton (for example, hips, pelvis, spine)) to these BCT codes.

Response. We disagree with the commenter that the BCT codes are not subject to coinsurance and the Part B deductible at this time. The service described by CPT code 77078 meets the National Coverage Determination (NCD) process for preventive services coverage and subject to its coinsurance and deductible waiver.

However, the USPSTF has not changed its current recommendation for bone measurement testing (available here. Https://www.uspreventiveservicestaskforce.org/​uspstf/​recommendation/​osteoporosis-screening#fullrecommendationstart ) since 2018. These new BCT codes became effective July 1, 2019, and the services described by these codes are not specifically included in the USPSTF grade B recommendation.

Therefore, they do not meet requirements to have beneficiary coinsurance and deductible waived. We note that CMS may add preventive services coverage through the National Coverage Determination (NCD) process if the service meets all of the following criteria. Reasonable and necessary for prevention or early detection of illness or disability, USPSTF recommended with grade A or B, and appropriate for individuals entitled to benefits under Part A or enrolled under Medicare Part B.

In the event that the USPSTF updates its recommendation for bone measurement testing to specifically include these services described by the new BCT codes, CMS would reevaluate whether to apply the coinsurance and deductible waiver. 3. 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, $127.11 is approximately 20 percent of the full national unadjusted payment rate of $635.54.

For APCs with only a minimum unadjusted copayment in Addenda A and B to the CY 2022 OPPS/ASC proposed rule (which are available via the internet on the CMS website), the beneficiary payment percentage is 20 percent. The formula below is a mathematical representation of Step 1 and calculates the national copayment as a percentage of national payment for a given service. B is the beneficiary payment percentage.

B = National unadjusted copayment for APC/national unadjusted payment rate for APC. Step 2. Calculate the appropriate wage-adjusted payment rate for the APC for the provider in question, as indicated in Steps 2 through 4 under section II.H.

Of the CY 2022 OPPS/ASC proposed rule. Calculate the rural adjustment for eligible providers, as indicated in Step 6 under section II.H. Of the CY 2022 OPPS/ASC 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 final rule with comment period, 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 0.9804.

The unadjusted copayments for services payable under the OPPS that will be effective January 1, 2022 are shown in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website). We note that the national unadjusted payment rates and copayment rates shown in Addenda A and B to this final rule with comment period reflect the CY 2022 OPD fee schedule increase factor discussed in section II.B. Of this final rule with comment period.

In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure performed in a year to the amount of the inpatient hospital deductible for that year. III. OPPS Ambulatory Payment Classification (APC) Group Policies A.

OPPS Treatment of New and Revised HCPCS Codes Payments for OPPS procedures, services, and items are generally based on medical billing codes, specifically, HCPCS codes, that are reported on HOPD claims. The HCPCS is divided into two principal subsystems, referred to as Level I and Level II of the HCPCS. Level I is comprised of CPT (Current Procedural Terminology) codes, a numeric and alphanumeric coding system maintained by the American Medical Association (AMA), and consists of Category I, II, and III CPT codes.

Level II, which is maintained by CMS, is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes. HCPCS codes are used to report surgical procedures, medical 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, diagnostic and therapeutic services, and treatment codes. Category III CPT codes, which describe new and emerging technologies, services, and procedures. And • Level II HCPCS codes (also known as alphanumeric codes), which are used primarily to identify drugs, devices, ambulance services, durable medical equipment, orthotics, prosthetics, supplies, temporary surgical Start Printed Page 63514 procedures, and medical services not described by CPT codes.

CPT codes are established by the 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 Level II HCPCS code changes that affect the OPPS are published through the annual rulemaking cycle and through the OPPS quarterly update Change Requests (CRs).

Generally, these code changes are effective January 1, April 1, July 1, or October 1. CPT code changes are released by the AMA (via their website) while Level II HCPCS code changes are released to the public via the CMS HCPCS website. CMS recognizes the release of new CPT and Level II HCPCS codes and makes the 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 codes to interim status indicators (SIs) and APCs. These interim assignments are finalized in the OPPS/ASC final rules. This quarterly process offers hospitals access to codes that more accurately describe the items or services furnished and provides payment for these items or services in a timelier manner than if we waited for the annual rulemaking process.

We solicit public comments on the new CPT and Level II HCPCS codes, status indicators, and APC assignments through our annual rulemaking process. We note that, under the OPPS, the APC assignment determines the payment rate for an item, procedure, or service. Those items, procedures, or services not exclusively paid separately under the hospital OPPS are assigned to appropriate status indicators.

Certain payment status indicators provide separate payment while other payment status indicators do not. In section XI. €œCY 2022 OPPS Payment Status and Comment Indicators” of this final rule with comment period, we discuss the various status indicators used under the OPPS.

We also provide a complete list of status indicators and their definitions in Addendum D1 to this final rule with comment period. 1. HCPCS Codes That Were Effective April 1, 2021 for Which We Solicited Public Comments in the CY 2022 OPPS/ASC Proposed Rule For the April 2021 update, 26 new HCPCS codes were established and made effective on April 1, 2021.

These codes and their long descriptors were included in Table 5 of the proposed rule and are now listed in Table 7 of this final rule with comment period. Through the April 2021 OPPS quarterly update CR (Transmittal 10666, Change Request 12175, dated March 8, 2021), we recognized several new HCPCS codes for separate payment under the OPPS. In the CY 2022 OPPS/ASC proposed rule, we solicited public comments on the proposed APC and status indicator assignments for the codes which were listed in Table 5 of this CY 2022 OPPS/ASC proposed rule with comment period.

We did not receive any public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes implemented in April 2021. Therefore, we are finalizing the proposed APC and SI assignments for these codes, as indicated in Table 7. The status indicator, APC assignment, and payment rate for each HCPCS code can be found in Addendum B to this final rule with comment period.

In addition, the complete list of status indicators and corresponding definitions used under the OPPS can be found in Addendum D1 to this final rule with comment period. These new codes that were effective April 1, 2021 were assigned to comment indicator “NP” in Addendum B to the CY 2022 OPPS/ASC proposed rule to indicate that the codes were assigned to an interim APC assignment and that comments would be accepted on their interim APC assignments. Also, the complete list of comment indicators and definitions used under the OPPS can be found in Addendum D2 to this final rule with comment period.

We note that OPPS Addendum B, Addendum D1, and Addendum D2 are available via the internet on the CMS website. Start Printed Page 63515 Start Printed Page 63516 Start Printed Page 63517 2. HCPCS Codes That Were Effective July 1, 2021 for Which We Solicited Public Comments in the CY 2022 OPPS/ASC Proposed Rule For the July 2021 update, 55 new codes were established and made effective July 1, 2021.

The codes and long descriptors were listed in Table 6 of the proposed rule and are now also listed in Table 8 of this final rule with comment period. Through the July 2021 OPPS quarterly update CR (Transmittal 10825, Change Request 12316, dated June 11, 2021), we recognized several new codes for separate payment and assigned them to appropriate interim OPPS status indicators and APCs. In the CY 2022 OPPS/ASC proposed rule, we solicited public comments on the proposed APC and status indicator assignments for the codes implemented on July 1, 2021, all of which are listed in Table 8.

We did not receive any public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes implemented in July 2021 and we are finalizing the proposed APC and SI assignments for these codes, as indicated in Table 8. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective October 1, 2021. Their replacement codes are listed in Table 8.

The final payment rates for these codes can be found in Addendum B to this final rule with comment period. The status indicator, APC assignment, and payment rate for each HCPCS code can be found in Addendum B to this final rule with comment period. The complete list of status indicators and corresponding definitions used under the OPPS can be found in Addendum D1 to this final rule with comment period.

These new codes that were effective July 1, 2021 were assigned to comment indicator “NP” in Addendum B to the CY 2022 OPPS/ASC proposed rule to indicate that the codes were assigned to an interim APC assignment and that comments would be accepted on their interim APC assignments. Also, the complete list of comment indicators and definitions used under the OPPS can be found in Addendum D2 to this final rule with comment period. We note that OPPS Addendum B, Addendum D1, and Addendum D2 are available via the internet on the CMS website.

Start Printed Page 63518 Start Printed Page 63519 Start Printed Page 63520 Start Printed Page 63521 Start Printed Page 63522 3. October 2021 HCPCS Codes for Which We Are Soliciting Public Comments in the CY 2022 OPPS/ASC Final Rule With Comment Period As has been our practice in the past, we incorporate those new HCPCS codes that are effective October 1 in the final rule with comment period, thereby updating the OPPS for the following calendar year, as displayed in Table 7 of the CY 2022 OPPS/ASC proposed rule with comment period and reprinted as Table 9 of this final rule with comment period. These codes are released to the public through the October OPPS quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS codes).

For CY 2022, these codes are flagged with comment indicator “NI” in Addendum B to this OPPS/ASC final rule with comment period to indicate that we are assigning them an interim payment status which is subject to public comment. Specifically, the interim SI and APC assignments for codes flagged with comment indicator “NI” are open to public comment in this final rule with comment period, and we will respond to these public comments in the OPPS/ASC final rule with comment period for the next year's OPPS/ASC update. In the CY 2022 OPPS/ASC proposed rule (86 FR 42068), we proposed to continue this process for CY 2022.

Specifically, for CY 2022, we proposed to include in Addendum B to the CY 2022 OPPS/ASC final rule with comment period the new HCPCS codes effective October 1, 2021 that would be incorporated in the October 2021 OPPS quarterly update CR. Also, as stated above, the October 1, 2021 codes are flagged with comment indicator “NI” in Addendum B to this CY 2022 OPPS/ Start Printed Page 63523 ASC final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2022. We are inviting public comments on the interim SI and APC assignments for these codes, if applicable, that will be finalized in the CY 2023 OPPS/ASC final rule with comment period.

4. January 2022 HCPCS Codes a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments in This CY 2022 OPPS/ASC Final Rule With Comment Period Consistent with past practice, we are soliciting comments on the new Level II HCPCS codes that will be effective January 1, 2022 of this final rule with comment period, thereby allowing us to finalize the status indicators and APC assignments for the codes in the CY 2023 OPPS/ASC final rule with comment period.

Unlike the CPT codes that are effective January 1 and are included in the OPPS/ASC proposed rules, and except for the G-codes listed in Addendum O of the CY 2022 OPPS/ASC proposed rule, most Level II HCPCS codes are not released until sometime around November to be effective January 1. Because these codes are not available until November, we are unable to include them in the OPPS/ASC proposed rules. Consequently, for CY 2022, we proposed to include in Addendum B to this final rule with comment period the new Level II HCPCS codes effective January 1, 2022 that would be incorporated in the January 2022 OPPS quarterly update CR.

These codes will be released to the public through the January OPPS quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS codes). For CY 2022, the Level II HCPCS codes effective January 1, 2022 are flagged with comment indicator “NI” in Addendum B to this final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2022. We are inviting public comments on the interim SI and APC assignments for these codes, if applicable, that will be finalized in the CY 2023 OPPS/ASC final rule with comment period.

B. CPT Codes for Which We Solicited Public Comments in the CY 2022 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 PFS proposed rule, we do not anticipate that these HCPCS G-codes will always be necessary for OPPS purposes. We will make every effort to include proposed APC and status indicator assignments for all new and revised CPT codes that the AMA makes publicly available in time for us to include them in the proposed rule, and to avoid resorting to use of HCPCS G-codes and the resulting delay in utilization of the most current CPT codes.

Also, we finalized our proposal to make interim APC and status indicator assignments for CPT codes that are not available in time for the proposed rule and that describe wholly new services (such as new technologies or new surgical procedures), to solicit public comments in the final rule, and to finalize the specific APC and status indicator assignments for those codes in the following year's final rule. For the CY 2022 OPPS update, we received the CPT codes that will be effective January 1, 2022 from the AMA in time to be included in the CY 2022 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes can be found in Addendum B to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website).

We note that the new and revised CPT codes are assigned to comment indicator “NP” in Addendum B of the CY 2022 OPPS/ASC proposed rule to indicate that the code is new for the next calendar year or the code is an existing code with substantial revision to its code descriptor in the next calendar year as compared to the current calendar year with a proposed APC assignment, and that comments will be accepted on the proposed APC assignment and status indicator. Further, we note that the CPT code descriptors that appear in Addendum B are short descriptors and do not accurately describe the complete procedure, service, or item described by the CPT code. Therefore, we included the 5-digit placeholder codes and the long descriptors for the new and revised CY 2022 CPT codes in Addendum O to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website) 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 2022 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code”. The final CPT code numbers would be included in this final rule with comment period. We also noted that not every code listed in Addendum O is subject to public comment.

For the new and revised CPT codes, we requested public comments on only those codes that are assigned comment indicator “NP”. In summary, in the CY 2022 OPPS/ASC proposed rule, we solicited public comments on the proposed CY 2022 status indicators and APC assignments for the new and revised CPT codes that will be effective January 1, 2022. Because the CPT codes listed in Addendum B appear with short descriptors only, we listed them again in Addendum O to the CY 2022 OPPS/ASC proposed rule with long descriptors.

In addition, we proposed to finalize the status indicator and APC assignments for these codes (with their final CPT code numbers) in this final rule with comment period. The proposed status indicator and APC assignment for these codes can be found in Addendum B to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website). Commenters addressed several of the new CPT codes that were assigned to comment indicator “NP” in Addendum B of the 2022 OPPS/ASC Proposed Rule.

We have responded to those public comments in sections III.D. €œOPPS APC-Specific Policies” of this final rule with comment period. Finally, in Table 9, which is a reprint of Table 7 from the CY 2022 OPPS/ASC proposed rule, we summarize our current process for updating codes through our OPPS quarterly update CRs, seeking public comments, and finalizing the treatment of these codes under the OPPS.

Start Printed Page 63524 B. 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 419.31. We use Level I (also known as CPT codes) and Level II HCPCS codes (also known as alphanumeric codes) to identify and group the services within each APC.

The APCs are organized such that each group is homogeneous both clinically and in terms of resource use. Using this classification system, we have established distinct groups of similar services. We also have developed separate APC groups for certain medical devices, drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy devices that are not packaged into the payment for the procedure.

We have packaged into the payment for each procedure or service within an APC group the costs associated with those items and services that are typically ancillary and supportive to a primary diagnostic or therapeutic modality and, in those cases, are an integral part of the primary service they support. Therefore, we do not make separate payment for these packaged items or services. In general, packaged items and services include, but are not limited to, the items and services listed in regulations at 42 CFR 419.2(b).

A further discussion of packaged services is included in section II.A.3. Of this final rule with comment period. 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 2022, we proposed that each APC relative payment weight represents the hospital cost of the services included in that APC, relative to the hospital cost of the services included in APC 5012 (Clinic Visits and Related Services). The APC relative payment weights are scaled to APC 5012 because it is the hospital clinic visit APC and clinic visits are among the most frequently furnished services in the hospital outpatient setting.

2. Application of the 2 Times Rule Section 1833(t)(9)(A) of the Act requires the Secretary to review, not less often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Section 1833(t)(9)(A) of the Act also requires the Secretary to consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) Start Printed Page 63525 the clinical integrity of the APC groups and the relative payment weights.

We note that the HOP Panel recommendations for specific services for the CY 2022 OPPS update will be discussed in the relevant specific sections throughout this final rule with comment period. In addition, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest cost for an item or service in the group is more than 2 times greater than the lowest cost for an item or service within the same group (referred to as the “2 times rule”). The statute authorizes the Secretary to make exceptions to the 2 times rule in unusual cases, such as for low-volume items and services (but the Secretary may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act (FDCA)).

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 the CY 2022 OPPS/ASC proposed rule, for CY 2022, we proposed 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 2022 OPPS update, in the CY 2022 OPPS/ASC proposed rule, we identified the APCs with violations of the 2 times rule.

Therefore, we proposed changes to the procedure codes assigned to these APCs in Addendum B to the CY 2022 OPPS/ASC proposed rule. We noted that Addendum B does not appear in the printed version of the Federal Register as part of the CY 2022 OPPS/ASC proposed rule. Rather, it is published and made available via the internet on the CMS website at.

Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. To eliminate a violation of the 2 times rule and improve clinical and resource homogeneity, we proposed 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 2022 included in the CY 2022 OPPS/ASC proposed rule are related to changes in costs of services that were observed in the CY 2019 claims data available for CY 2022 ratesetting.

Addendum B to the CY 2021 OPPS/ASC proposed rule identified with a comment indicator “CH” those procedure codes for which we proposed a change to the APC assignment or status indicator, or both, that were initially assigned in the July 1, 2021 OPPS Addendum B Update (available via the internet on the CMS website at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Addendum-A-and-Addendum-B-Updates.html ). 3.

APC Exceptions to the 2 Times Rule Taking into account the APC changes that we proposed to make for CY 2022, 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. Based on the CY 2019 claims data available for the CY 2022 proposed rule, we found 23 APCs with violations of the 2 times rule. We applied the criteria as described above to identify the APCs for which we proposed to make exceptions under the 2 times rule for CY 2022, and found that all of the 23 APCs we identified meet the criteria for an exception to the 2 times rule based on the CY 2019 claims data available for the CY 2022 OPPS/ASC 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 similar geometric mean costs and do not create a 2 times rule violation. Therefore, we only identified those APCs, including those with criteria-based costs, such as device-dependent CPT/HCPCS codes, with violations of the 2 times rule. 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 8 of the CY 2022 OPPS/ASC proposed rule listed the 23 APCs for which we proposed to make an exception under the 2 times rule for CY 2021 based on the criteria cited above and claims data submitted between January 1, 2019 and December 31, 2019, and processed on or before June 30, 2020, and updated CCRs, if available. The proposed geometric mean costs for covered hospital outpatient services for these and all other APCs that were used in the development of the CY 2022 OPPS/ASC proposed rule can be found on the CMS website at. Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html.

Based on the updated final rule CY 2019 claims data used for this final rule with comment period, we identified the same 23 APCs that appeared in Table 8 of the CY 2022 OPPS/ASC proposed rule. Comment. We received two comments that agreed with the proposed exceptions identified in Table 8 of the CY 2021 OPPS proposed rule.

Response. We appreciate the commenters' support. Comment.

One commenter requested that CMS adjust the definition of a significant procedure code for cost significance purposes in evaluating the 2 times rule to only require 500 single claims rather than the current requirement of 1,000 single claims. Response. As stated earlier, in determining whether a 2 times rule violation exists in an APC, we consider only those HCPCS codes that are significant based on the number of claims for the codes.

For purposes of identifying significant HCPCS codes to examine for 2 times rule violations, we consider codes that have more than 1,000 single major claims or codes that have both greater than 99 single major Start Printed Page 63526 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 HCPCS code is significant for purposes of the 2 times rule was selected because we believe that a subset of 1,000 claims is negligible within the set of approximately 100 million single procedure or single session claims we use for establishing costs. Similarly, a HCPCS code for which there are fewer than 99 single claims and which comprises less than 2 percent of the single major claims within an APC will have a negligible impact on the APC cost.

We continue to believe that these definitions remain appropriate and are therefore making no changes in this final rule with comment period. Comment. One commenter opposed the allowance of a 2 times rule exception for APC 5161 (Level 1 ENT Procedures) in Table 8 of the CY 2021 OPPS proposed rule, based on the current construct of codes included in the APC.

Response. We have reviewed the CY 2019 claims data available for CY 2022 OPPS ratesetting for APC 5161 and believe that this APC remains appropriate as currently structured because it optimizes clinical and resource cost homogeneity. In addition, we note that the 2 times rule violation is based on the cost range of approximately $155.55 for CPT code 31500 (Insert emergency airway) and $315.60 for CPT code 69100 (Biopsy of external ear) between the geometric mean costs for the lowest and highest cost significant codes in the APC.

The difference between the geometric mean costs for CPT codes 31500 and 69100 violates the 2 times rule by a minimal amount and does not suggest there is a broader issue with the APC. However, we will continue to monitor the claims data for APC 5161 as they become available. After considering the public comments we received on proposed APC assignments and our analysis of the CY 2019 costs from hospital claims and cost report data available for this final rule with comment period, we are finalizing our proposals, with some modifications.

Specifically, we are finalizing our proposal to except the 23 proposed APCs from the 2 times rule for CY 2022. Table 10 below lists the 23 APCs that we are excepting from the 2 times rule for CY 2022 based on the criteria described earlier and a review of claims data for dates of service between January 1, 2019, and December 31, 2019, that were processed on or before June 30, 2020. 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 generally accept the HOP Panel's recommendation because those recommendations are based on explicit consideration of resource use, clinical homogeneity, site of service, and the quality of the claims data used to determine the APC payment rates.

The geometric mean costs for hospital outpatient services for these and all other APCs that were used in the development of this final rule with comment period can be found on the CMS website at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices. Start Printed Page 63527 C.

New Technology APCs 1. Background In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes to the time period in which a service can be eligible for payment under a New Technology APC. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to an appropriate clinical APC.

This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient data upon which to base a decision for reassignment have not been collected. In the CY 2004 OPPS final rule with comment period (68 FR 63416), we restructured the New Technology APCs to make the cost intervals more consistent across payment levels and refined the cost bands for these APCs to retain two parallel sets of New Technology APCs, one set with a status indicator of “S” (Significant Procedures, Not Discounted when Multiple.

Paid under OPPS. Separate APC payment) and the other set with a status indicator of “T” (Significant Procedure, Multiple Reduction Applies. Paid under OPPS.

Separate APC payment). These current New Technology APC configurations allow us to price new technology services more appropriately and consistently. For CY 2021, there were 52 New Technology APC levels, ranging from the lowest cost band assigned to APC 1491 (New Technology—Level 1A ($0-$10)) to the highest cost band assigned to APC 1908 (New Technology—Level 52 ($145,001-$160,000)).

We note that the cost bands for the New Technology APCs, specifically, APCs 1491 through 1599 and 1901 through 1908, vary with increments ranging from $10 to $14,999. These cost bands identify the APCs to which new technology procedures and services with estimated service costs that fall within those cost bands are assigned under the OPPS. Payment for each APC is made at the mid-point of the APC's assigned cost band.

For example, payment for New Technology APC 1507 (New Technology—Level 7 ($501-$600)) is made at $550.50. Under the OPPS, one of our goals is to make payments that are appropriate for the services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is budget neutral and increases are limited to the annual hospital market basket increase reduced by the productivity adjustment.

We believe that our payment rates reflect the costs that are associated with providing care to Medicare beneficiaries and are adequate to ensure access to services (80 FR 70374). For many emerging technologies, there is a transitional period during which utilization may be low, often because providers are first learning about the technologies and their clinical utility. Quite often, parties request that Medicare make higher payments under the New Technology APCs for new procedures in that transitional phase.

Start Printed Page 63528 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 system, payments may not fully cover hospitals' costs in a particular circumstance, including those for the purchase and maintenance of capital equipment. We rely on hospitals to make their decisions regarding the acquisition of high-cost equipment with the understanding that the Medicare program must be careful to establish its initial payment rates, including those made through New Technology APCs, for new services that lack hospital claims data based on realistic utilization projections for all such services delivered in cost-efficient hospital outpatient settings.

As the OPPS acquires claims data regarding hospital costs associated with new procedures, we regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures as they transition into mainstream medical practice (77 FR 68314). For CY 2022, we included the proposed payment rates for New Technology APCs 1491 to 1599 and 1901 through 1908 in Addendum A to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website). 2.

Establishing Payment Rates for Low-Volume New Technology Services Services that are assigned to New Technology APCs are typically new services that do not have sufficient claims history to establish an accurate payment for the services. One of the objectives of establishing New Technology APCs is to generate sufficient claims data for a new service so that it can be assigned to an appropriate clinical APC. Some services that are assigned to New Technology APCs have very low annual volume, which we consider to be fewer than 100 claims.

We consider services with fewer than 100 claims annually to be low-volume services because there is a higher probability that the payment data for a service may not have a normal statistical distribution, which could affect the quality of our standard cost methodology that is used to assign services to an APC. In addition, services with fewer than 100 claims per year are not generally considered to be a significant contributor to the APC ratesetting calculations and, therefore, are not included in the assessment of the 2 times rule. As we explained in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58890), we were concerned that the methodology we use to estimate the cost of a service under the OPPS by calculating the geometric mean for all separately paid claims for a HCPCS service code from the most recent available year of claims data may not generate an accurate estimate of the actual cost of the service for these low-volume services.

In accordance with section 1833(t)(2)(B) of the Act, services classified within each APC must be comparable clinically and with respect to the use of resources. As described earlier, assigning a service to a New Technology APC allows us to gather claims data to price the service and assign it to the APC with services that use similar resources and are clinically comparable. However, where utilization of services assigned to a New Technology APC is low, it can lead to wide variation in payment rates from year to year, resulting in even lower utilization and potential barriers to access to new technologies, which ultimately limits our ability to assign the service to the appropriate clinical APC.

To mitigate these issues, we determined in the CY 2019 OPPS/ASC final rule with comment period that it was appropriate to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to adjust how we determined the costs for low-volume services assigned to New Technology APCs (83 FR 58892 through 58893). We have utilized our equitable adjustment authority at section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to estimate an appropriate payment amount for low-volume new technology services in the past (82 FR 59281). Although we have used this adjustment authority on a case-by-case basis in the past, we stated in the CY 2019 OPPS/ASC final rule with comment period that we believed it was appropriate to adopt an adjustment for low-volume services assigned to New Technology APCs in order to mitigate the wide payment fluctuations that have occurred for new technology services with fewer than 100 claims and to provide more predictable payment for these services.

For purposes of this adjustment, we stated that we believed that it was appropriate to use up to 4 years of claims data in calculating the applicable payment rate for the prospective year, rather than using solely the most recent available year of claims data, when a service assigned to a New Technology APC has a low annual volume of claims, which, for purposes of this adjustment, we defined as fewer than 100 claims annually. We adopted a policy to consider services with fewer than 100 claims annually as low-volume services because there is a higher probability that the payment data for a service may not have a normal statistical distribution, which could affect the quality of our standard cost methodology that is used to assign services to an APC. We explained that we were concerned that the methodology we use to estimate the cost of a service under the OPPS by calculating the geometric mean for all separately paid claims for a HCPCS procedure code from the most recent available year of claims data may not generate an accurate estimate of the actual cost of the low-volume service.

Using multiple years of claims data will potentially allow for more than 100 claims to be used to set the payment rate, which would, in turn, create a more statistically reliable payment rate. In addition, to better approximate the cost of a low-volume service within a New Technology APC, we stated that we believed using the median or arithmetic mean rather than the geometric mean (which “trims” the costs of certain claims out) could be more appropriate in some circumstances, given the extremely low volume of claims. Low claim volumes increase the impact of “outlier” claims.

That is, claims with either a very low or very high payment rate as compared to the average claim, which would have a substantial impact on any statistical methodology used to estimate the most appropriate payment rate for a service. We also explained that we believed having the flexibility to utilize an alternative statistical Start Printed Page 63529 methodology to calculate the payment rate in the case of low-volume new technology services would help to create a more stable payment rate. Therefore, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58893), we established that, in each of our annual rulemakings, we would seek public comments on which statistical methodology should be used for each low-volume service assigned to a New Technology APC.

In the preamble of each annual rulemaking, we stated that we would present the result of each statistical methodology and solicit public comment on which methodology should be used to establish the payment rate for a low-volume new technology service. In addition, we explained that we would use our assessment of the resources used to perform a service and guidance from the developer or manufacturer of the service, as well as other stakeholders, to determine the most appropriate payment rate. Once we identified the most appropriate payment rate for a service, we would assign the service to the New Technology APC with the cost band that includes its payment rate.

For CY 2022, we proposed to continue to utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median using up to 4 years of claims data to select the appropriate payment rate for purposes of assigning services with fewer than 100 claims per year to a New Technology APC. However, we proposed to utilize our equitable adjustment authority through our proposed universal low volume APC policy described in section X.C. Of the CY 2022 OPPS/ASC proposed rule.

Our proposed universal low volume APC policy is similar to our current New Technology APC low volume policy with the difference between the two policies being that the universal low volume APC policy would apply to clinical APCs and brachytherapy APCs, in addition to procedures assigned to New Technology APCs, and would use the highest of the geometric mean, arithmetic mean, or median based on up to 4 years of claims data to set the payment rate for the APC. For New Technology APCs with fewer than 100 single claims at the procedure level that can be used for ratesetting, we would apply our proposed methodology for determining a low volume APC's cost, choosing the “greatest of” the median, arithmetic mean, or geometric mean at the procedure level, to apply to the individual services assigned to New Technology APCs and provide the final New Technology APC assignment for each procedure. We proposed to end our separate New Technology APC low volume policy if we adopt the proposed universal low volume APC policy, as it also applies to New Technology APCs as well as clinical and brachytherapy APCs.

We did not receive any comments on our proposal to end our separate New Technology APC low volume policy if we adopt the proposed universal low volume APC policy and we have decided to implement our universal low volume APC policy as described in section X.C. Of this final rule with comment period. Therefore, we are implementing our proposal without modification and applying our universal low volume APC policy to procedures assigned to New Technology APCs as well as clinical and brachytherapy APCs.

3. Procedures Assigned to New Technology APC Groups for CY 2022 As we described in the CY 2002 OPPS final rule (66 FR 59902), we generally retain a procedure in the New Technology APC to which it is initially assigned until we have obtained sufficient claims data to justify reassignment of the procedure to a clinically appropriate APC. In addition, in cases where we find that our initial New Technology APC assignment was based on inaccurate or inadequate information (although it was the best information available at the time), where we obtain new information that was not available at the time of our initial New Technology APC assignment, or where the New Technology APCs are restructured, we may, based on more recent resource utilization information (including claims data) or the availability of refined New Technology APC cost bands, reassign the procedure or service to a different New Technology APC that more appropriately reflects its cost (66 FR 59903).

Consistent with our current policy, for CY 2022, we proposed to retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment of the service to an appropriate clinical APC. The flexibility associated with this policy allows us to reassign a service from a New Technology APC in less than 2 years if we have not obtained sufficient claims data. It also allows us to retain a service in a New Technology APC for more than 2 years if we have not obtained sufficient claims data upon which to base a reassignment decision (66 FR 59902).

A. Retinal Prosthesis Implant Procedure (APC 1908) CPT code 0100T (Placement of a subconjunctival retinal prosthesis receiver and pulse generator, and implantation of intra-ocular retinal electrode array, with vitrectomy) describes the implantation of a retinal prosthesis, specifically, a procedure involving the use of the Argus® II Retinal Prosthesis System. This first retinal prosthesis was approved by FDA in 2013 for adult patients diagnosed with severe to profound retinitis pigmentosa.

For information on the utilization and payment history of the Argus® II procedure and the Argus® II device prior to CY 2020, please refer to the CY 2021 OPPS final rule (85 FR 85937 through 85938). For CY 2020, we identified 35 claims reporting the procedure described by CPT code 0100T for the 4-year period of CY 2015 through CY 2018. We found the geometric mean cost for the procedure described by CPT code 0100T to be approximately $146,059, the arithmetic mean cost to be approximately $152,123, and the median cost to be approximately $151,267.

All of the resulting estimates from using the three statistical methodologies fell within the same New Technology APC cost band ($145,001-$160,000), where the Argus® II procedure was assigned for CY 2019. Consistent with our policy stated in section III.C.2 of this final rule with comment period, we presented the result of each statistical methodology in the CY 2022 OPPS/ASC proposed rule, and we sought public comments on which method should be used to assign procedures described by CPT code 0100T to a New Technology APC. All three potential statistical methodologies used to estimate the cost of the Argus® II procedure fell within the cost band for New Technology APC 1908, with the estimated cost being between $145,001 and $160,000.

Accordingly, we assigned CPT code 0100T in APC 1908 (New Technology—Level 52 ($145,001-$160,000)), with a payment rate of $152,500.50 for CY 2020. For CY 2021, the number of reported claims for the Argus® II procedure continued to be very low with a substantial fluctuation in cost from year to year. The high annual variability of the cost of the Argus® II procedure continued to make it difficult to establish a consistent and stable payment rate for the procedure.

As previously mentioned, in accordance with section 1833(t)(2)(B) of the Act, we are required to establish that services classified within each APC are Start Printed Page 63530 comparable clinically and with respect to the use of resources. We identified 35 claims reporting the procedure described by CPT code 0100T for the 4-year period of CY 2016 through CY 2019. We found the geometric mean cost for the procedure described by CPT code 0100T to be approximately $148,148, the arithmetic mean cost to be approximately $153,682, and the median cost to be approximately $151,974.

All three potential statistical methodologies used to estimate the cost of the Argus® II procedure fell within the cost band for New Technology APC 1908, with the estimated cost being between $145,001 and $160,000, and accordingly, we assigned the Argus II procedure to New Technology APC 1908 for CY 2021. For 2022, we proposed to utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to establish the universal low volume APC policy described in section X.C. Of the CY 2022 OPPS/ASC proposed rule.

Consistent with this proposed policy, we calculated the geometric mean, arithmetic mean, and median costs using multiple years of claims data to select the appropriate payment rate for purposes of assigning the Argus® II procedure (CPT code 0100T) to a New Technology APC. We proposed to use claims data from CY 2016 through CY 2019, which are the last 4 years of available OPPS claims data that we believe are appropriate for ratesetting, to determine the proposed payment rate for the Argus® II procedure for CY 2022. The claims data are the same 35 claims that were used to determine the payment rate for CPT code 0100T in CY 2021, and the estimates of the geometric mean ($148,148), the arithmetic mean ($153,682), and the median ($151,974) are the same as the estimates for CY 2021.

All three potential statistical methodologies used to estimate the cost of the Argus® II procedure are within the cost band for New Technology APC 1908, with the proposed payment rate being between $145,001 and $160,000. Accordingly, we proposed to continue to assign the Argus® II procedure to New Technology APC 1908 for CY 2022. For our analysis for this final rule with comment period, we identified 35 claims reporting the procedure described by CPT code 0100T for the 4-year period of CY 2016 through CY 2019, which were the same claims analyzed for the CY 2022 OPPS/ASC proposed rule.

We found the geometric mean cost for the procedure described by CPT code 0100T to be approximately $148,148, the arithmetic mean cost to be approximately $153,682, and the median cost to be approximately $151,974, which are the same results that we calculated for the proposed rule. All three potential statistical methodologies used to estimate the cost of the Argus® II procedure fall within the cost band for New Technology APC 1908, with the estimated cost being between $145,001 and $160,000. We received no public comments on our proposal.

Therefore, we are finalizing our proposal without modification. We will maintain the assignment of the procedure described by CPT code 0100T in APC 1908 (New Technology—Level 52 ($145,001- $160,000)), with a payment rate of $152,500.50 for CY 2021. We note that the final payment rate includes both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841).

Please see Table 11 below for the final OPPS APC and status indicator for the Argus® II procedure (CPT code 0100T) for CY 2022. Start Printed Page 63531 b. Administration of Subretinal Therapies Requiring Vitrectomy (APC 1561) Effective January 1, 2021, CMS established HCPCS code C9770 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) and assigned it to a New Technology APC based on the geometric mean cost of HCPCS code 67036.

For CY 2021, HCPCS code C9770 was assigned to APC 1561 (New Technology—Level 24 ($3001-$3500)). This procedure may be used to describe the administration of CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes). This procedure was previously discussed in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85939 through 85940).

CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes) is a gene therapy for a rare mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna®), was approved by FDA in December of 2017, and is indicated as an adeno-associated levitra vector-based gene therapy indicated for the treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy.[] This therapy is administered through a subretinal injection, which stakeholders describe as an extremely delicate and sensitive surgical procedure. The FDA package insert describes one of the steps for administering Luxturna as, “after completing a vitrectomy, identify the intended site of administration.

The subretinal injection can be introduced via pars plana.” Stakeholders, including the manufacturer of Luxturna®, recommended HCPCS code 67036 (Vitrectomy, mechanical, pars plana approach) for the administration of the gene therapy.[] However, the manufacturer previously contended the administration was not accurately described by any existing codes as HCPCS code 67036 (Vitrectomy, mechanical, pars plana approach) does not account for the administration itself. CMS recognized the need to accurately describe the unique administration procedure that is required to administer the therapy described by HCPCS code J3398. Therefore, in the CY 2021 OPPS/ASC proposed rule (85 FR 48832), we proposed to establish a new HCPCS code, C97X1 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) to describe this process.

We stated that we believed that this new HCPCS code accurately described the unique service associated with intraocular administration of HCPCS code J3398. We recognized that HCPCS code 67036 represents a clinically similar procedure and process that approximates similar resource utilization that is associated with C97X1. However, we also recognized that it is not prudent for the code that describes the administration of this unique gene therapy, C97X1, to be assigned to the same C-APC to which HCPCS code 67036 is assigned, as this would package the primary therapy, HCPCS code J3398, into the code that represents the process to administer the gene therapy.

Therefore, for CY 2021, we proposed to assign the services described by C97X1 to a New Technology APC with a cost band that contains the geometric mean cost for HCPCS code 67036. The placeholder code C97X1 was replaced by C9770 in this final rule with comment period. For CY 2021, we finalized our proposal to create C9770 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent), and we assigned this code to APC 1561 (New Technology—Level 24 ($3,001-$3,500)) using the geometric mean cost of HCPCS code 67036.

See Table 12 for the final descriptor and APC assignment of HCPCS code C9770 for CY 2021. For CY 2022, we proposed to continue our policy from CY 2021 to assign the services described by HCPCS code C9770 to a New Technology APC with a cost band that contains the geometric mean cost for HCPCS code 67036. We proposed to continue to assign the services described by C9770 to a New Technology APC with a payment band based on the geometric mean cost for HCPCS code 67036 based on its geometric mean cost using CY 2019 claims data for CY 2022.

Based on this data, the geometric mean cost of HCPCS code 67036 is $3,434.91. Therefore, we proposed to assign C9770 to the corresponding New Technology APC payment band, APC 1561 New Technology—Level 24 ($3,001-$3,500), with a payment rate of $3,250.50. Refer to Table 12 below for the proposed OPPS APC and status indicator for HCPCS code C9770 for CY 2022.

Start Printed Page 63532 We received no comment on this proposal. Therefore, we are finalizing our proposal as proposed to continue our policy from CY 2021 to assign the services described by HCPCS code C9770 to a New Technology APC with a cost band that contains the geometric mean cost for HCPCS code 67036. As we proposed to continue to assign the services described by C9770 to a New Technology APC with a payment band based on the geometric mean cost for HCPCS code 67036 based on its geometric mean cost using CY 2019 claims data for CY 2022, we are finalizing this proposal.

Based on CY 2019 claims data, the geometric mean cost of HCPCS code 67036 is $3,435.25 Therefore, we will assign C9770 to the corresponding New Technology APC payment band, APC 1561 New Technology—Level 24 ($3,001-$3,500), with a payment rate of $3,250.50. Please see Table 13 below for the final and proposed OPPS APC and status indicator for HCPCS code C9770 for CY 2022. c.

Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave Energy (APC 1562) Effective January 1, 2019, CMS established HCPCS code C9751 (Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s) by microwave energy, including fluoroscopic guidance, when performed, with computed tomography acquisition(s) and 3-D rendering, computer-assisted, image-guided navigation, and endobronchial uasound (EBUS) guided transtracheal and/or transbronchial sampling (for example, aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node stations or structures and therapeutic intervention(s)). This microwave ablation procedure utilizes a flexible catheter to access the lung tumor via a working channel and may be used as an alternative procedure to a percutaneous microwave approach. Based on our review of the New Technology APC application for this service and the service's clinical similarity to existing services paid under the OPPS, we estimated the likely cost of the procedure would be between $8,001 and $8,500.

In claims data available for CY 2019 for the CY 2021 OPPS/ASC final rule with comment period, there were four claims reported for bronchoscopy with transbronchial ablation of lesions by microwave energy. Given the low volume of claims for the service, we proposed for CY 2021 to apply the policy we adopted in CY 2019, under which we utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median costs to calculate an appropriate payment rate for purposes of assigning bronchoscopy with transbronchial ablation of lesions by microwave energy to a New Technology APC. We found the geometric mean cost for the service to be approximately $2,693, the arithmetic mean cost to be approximately $3,086, and the median cost to be approximately $3,708.

The median was the statistical methodology that estimated the highest cost for the service and provided a reasonable estimate of the midpoint cost of the three claims that have been paid for this service. The payment rate calculated using this methodology fell within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3,501-$4,000)). Therefore, we assigned HCPCS code C9751 to APC 1562 for CY 2021.

For CY 2022, the only available claims for HCPCS code C9751 are from CY 2019. Therefore, we proposed given the low number of claims for this procedure to utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median costs to calculate an appropriate payment rate for purposes of assigning bronchoscopy with transbronchial ablation of lesions by microwave energy to a New Technology APC, consistent with our proposed universal low volume APC policy. Because we proposed to use the same claims as we did for CY 2021, we found the same values for the geometric mean cost, arithmetic mean cost, and the median cost for CY 2022.

Once again, the median was the statistical methodology that estimated the highest cost for the service and provided a reasonable estimate of the midpoint cost of the three claims that have been paid for this service. The payment rate calculated using this methodology falls again within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3,501-$4,000)). Therefore, we proposed to continue to assign HCPCS code C9751 to APC 1562 (New Technology—Level 25 ($3,501-$4,000)), with a proposed payment rate of $3,750.50 for CY 2022.

For our analysis for this final rule with comment period, we again used CY 2019 data, and we identified the same four claims reported for bronchoscopy with transbronchial ablation of lesions by microwave energy that were analyzed for the proposed rule and in CY 2021. Since the same claims were analyzed we received the same values for the geometric mean cost ($2,693), arithmetic mean cost ($3,086), and the median cost ($3,708) as we did for the proposed rule. As before, the median was the statistical methodology that estimated the highest cost for the service and provides a reasonable estimate of the midpoint cost of the three claims that have been paid for this service.

The payment rate calculated using this methodology falls again within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3,501-$4,000)). We did not receive any public comments regarding our proposal. We Start Printed Page 63533 are finalizing our proposal without modification to continue to assign HCPCS code C9751 to APC 1562 (New Technology—Level 25 ($3,501-$4,000)), with a final payment rate of $3,750.50 for CY 2022.

Details regarding HCPCS code C9751 are included in Table 14. d. Fractional Flow Reserve Derived From Computed Tomography (FFRCT) (APC 1511) Fractional Flow Reserve Derived from Computed Tomography (FFRCT), also known by the trade name HeartFlow, is a noninvasive diagnostic service that allows physicians to measure coronary artery disease in a patient through the use of coronary CT scans.

The HeartFlow procedure is intended for clinically stable symptomatic patients with coronary artery disease, and, in many cases, may avoid the need for an invasive coronary angiogram procedure. HeartFlow uses a proprietary data analysis process performed at a central facility to develop a three-dimensional image of a patient's coronary arteries, which allows physicians to identify the fractional flow reserve to assess whether or not patients should undergo further invasive testing (that is, a coronary angiogram). For many services paid under the OPPS, payment for analytics that are performed after the main diagnostic/image procedure are packaged into the payment for the primary service.

However, in CY 2018, we determined that HeartFlow should receive a separate payment because the service is performed by a separate entity (that is, a HeartFlow technician who conducts computer analysis offsite) rather than the provider performing the CT scan. We assigned CPT code 0503T, which describes the analytics performed, to New Technology APC 1516 (New Technology—Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50 based on pricing information provided by the developer of the procedure that indicated the price of the procedure was approximately $1,500. We did not have Medicare claims data in CY 2019 for CPT code 0503T, and we continued to assign the service to New Technology APC 1516 (New Technology—Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50.

CY 2020 was the first year for which we had Medicare claims data to calculate the cost of HCPCS code 0503T. For the CY 2020 OPPS/ASC final rule with comment period, there were 957 claims with CPT code 0503T of which 101 of the claims were single frequency claims that were used to calculate the geometric mean of the procedure. We planned to use the geometric mean to report the cost of HeartFlow.

However, the number of single claims for CPT code 0503T was below the low-volume payment policy threshold for the proposed rule, and this number of single claims was only two claims above the threshold for the New Technology APC low-volume policy for the final rule. Therefore, we decided to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median using the CY 2018 claims data to determine an appropriate payment rate for HeartFlow using our New Technology APC low-volume payment policy. While the number of single frequency claims was just above our threshold to use the low-volume payment policy, we still had concerns about the normal cost distribution of the claims used to calculate the payment rate for HeartFlow, and we decided the low-volume payment policy would be the best approach to address those concerns.

Our analysis found that the geometric mean cost for CPT code 0503T was $768.26, the arithmetic mean cost for CPT code 0503T was $960.12, and the median cost for CPT code 0503T was $900.28. Of the three cost methods, the highest amount was for the arithmetic mean. The arithmetic mean fell within the cost band for New Technology APC 1511 (New Technology—Level 11 ($901-$1,000)) with a payment rate of $950.50.

The arithmetic mean helped to account for some of the higher costs of CPT code 0503T identified by the developer and other stakeholders that may not have been reflected by either the median or the geometric mean. For CY 2021, we observed a significant increase in the number of claims billed with CPT code 0503T. Specifically, using CY 2019 data, we identified 3,188 claims billed with CPT code 0503T including 465 single frequency claims.

These totals are well above the threshold of 100 claims for a procedure to be evaluated using the New Technology APC low-volume policy. Therefore, we used our standard methodology rather than the low-volume methodology we previously Start Printed Page 63534 used to determine the cost of CPT code 0503T. Our analysis found that the geometric mean for CPT code 0503T was $804.35, and the geometric mean cost for the service fell within the cost band for New Technology APC 1510 (New Technology—Level 10 ($801-$900)).

However, providers and other stakeholders have noted that the FFRCT service costs $1,100 and that there are additional staff costs related to the submission of coronary CT image data for processing by HeartFlow. We noted that HeartFlow is one of the first procedures utilizing artificial intelligence to be separately payable in the OPPS, and providers are still learning how to accurately report their charges to Medicare when billing for artificial intelligence services (85 FR 85943). This is especially the case for allocating the cost of staff resources between the HeartFlow procedure and the coronary CT imaging services.

Therefore, we decided it would be appropriate to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to assign CPT code 0503T to the same New Technology APC in CY 2021 as in CY 2020 in order to provide payment stability and equitable payment for providers as they continue to become more familiar with the proper cost reporting for HeartFlow and other artificial intelligence services. Accordingly, we assigned CPT code 0503T to New Technology APC 1511 (New Technology—Level 11 ($901-$1,000)) with a payment rate of $950.50 for CY 2020, and we continued to assign CPT code 0503T to New Technology APC 1511 for CY 2021. For CY 2022, we proposed to use claims data from CY 2019 to estimate the cost of the HeartFlow service.

Because we are using the same claims data as in CY 2021, these data continue to reflect that providers were learning how to accurately report their charges to Medicare when billing for artificial intelligence services. Therefore, we proposed to continue to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to assign CPT code 0503T to the same New Technology APC in CY 2022 as in CY 2020 and CY 2021. New Technology APC 1511 (New Technology—Level 11 ($901-$1000)), with a payment rate of $950.50 for CY 2022, which is the same payment rate for the service as in CY 2020 and CY 2021.

Comment. The developer of HeartFlow and multiple other commenters stated that CPT code 0503T should not be assigned to New Technology APC 1510. Instead, they suggested that the HeartFlow procedure be assigned to APC 5593 (Level 3 Nuclear Medicine and Related Services) with a payment rate of around $1,270.

The developer asserted that even though the payment for APC 5593 is substantially higher than the estimated cost of CPT code 0503T, the cost of the service fits reasonably well with the cost of other procedures assigned to APC 5593. The developer and other commenters also assert that the HeartFlow procedure has enough clinical similarity to other procedures currently assigned to the Nuclear Medicine and Related Services APCs. According to the developer and the other commenters, HeartFlow is comparable to other nuclear medicine procedures that are image analysis tests characterizing organ-specific function.

The developer and the other commenters also note that cardiac CT procedures, which are used to identify coronary artery disease, are assigned to the nuclear medicine APC family. Finally, the developer cited two examples of procedures in the OPPS that are assigned to APCs where the procedure in question does not have clinical similarity to the other procedures in the APC. Response.

We disagree with the suggestion that CPT code 0503T should be assigned to APC 5593. As we stated in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85942), the Nuclear Medicine and Related Procedures APCs describe diagnostic and therapeutic procedures, many of them involving imaging, where radiopharmaceuticals and other nuclear materials are critical supplies for the performance of the procedure. In comparison, HeartFlow is a computer algorithm that does not directly take images nor is it used on its own to generate a diagnosis for a patient.

Instead, HeartFlow analyzes diagnostic images obtained through other medical procedures and assists with the interpretation of those diagnostic images to determine if a patient has coronary artery disease. We appreciate that there may be a limited number of examples where a procedure may have only a little clinical similarity to other procedures in the same APC, but we attempt to make those situations an exception rather than our regular practice. There is little clinical similarity between the HeartFlow procedure and the procedures currently assigned to the Nuclear Medicine and Related Procedures APCs and we are therefore not assigning CPT code 0503T to APC 5593.

Comment. One commenter, the developer, suggested that, if we decided not to assign CPT code 0503T to a Nuclear Medicine and Related Services APC, that we assign the service to APC 5724 (Level 4—Level 4 Diagnostic Tests and Related Services) with a payment rate of $896.09. The commenter states Heartflow generates critical diagnostic information for the treating physician and an anatomical mapping of FFR values that assists the physician in determining whether an invasive procedure is needed for a patient.

Because HeartFlow generates diagnostic information, the commenter believes it can be described as a diagnostic service or a service related to a diagnostic service and can be assigned to APC 5724. The commenter gives examples of software-based services that are already assigned to APC 5724 and notes that the geometric mean cost of CPT code 0503T places the service in the midrange of cost for separately paid services assigned to APC 5724. Response.

We appreciate the commenter's suggestion. However, one of the key reasons we assigned CPT code 0503T to a New Technology APC for CY 2021 and proposed assigning the service again to a New Technology APC for CY 2022, is that we are continuing to seek more cost data for the service before assigning it to a clinical APC. As mentioned earlier, we want to get a better understanding of the cost of HeartFlow as providers become more familiar with reporting and billing for artificial intelligence services.

More broadly, we believe we need at least one more year of cost data before assigning HeartFlow to a clinical APC. Our concerns that the CY 2020 claims data and may not represent the outpatient hospital experience in CY 2022 make it challenging to refine or update our payment quality for HeartFlow given the need for additional claims data. Comment.

Several commenters asserted the proposed payment rate for CPT code 0503T is too low and does not reflect their individual hospital's cost to use HeartFlow. Commenters mentioned cost issues, including the $1,100 list price for each individual HeartFlow service and the staff resources involved to transmit data to the HeartFlow analysis facility and review the results of the analyses performed by HeartFlow. Commenters suggested a range of potential payments for a HeartFlow procedure from $1,151 up to $2,100, and they encouraged CMS to use our equitable adjustment authority at section 1833(t)(2)(E) of the Act to establish an OPPS payment rate that would more closely reflect the costs the commenters believe they are incurring to perform the HeartFlow procedure.

Response. For this final rule with comment period, we identified 3,188 Start Printed Page 63535 claims billed with CPT code 0503T including 465 single frequency claims for CPT code 0503T using claims from CY 2019. Our analysis has found that the geometric mean for CPT code 0503T is $807.58, and the geometric mean cost is lower than the cost band for New Technology APC 1511 New Technology—Level 11 ($901-$1000) where CPT code 0503T is assigned.

This result is similar to our results for the proposed rule and the CY 2021 OPPS/ASC final rule, which all used CY 2019 claims data. However, multiple commenters have noted that the FFRCT service costs $1,100 and that there are additional staff costs related to the submission of coronary CT image data for processing by HeartFlow. HeartFlow is one of the first procedures utilizing artificial intelligence to be separately payable in the OPPS, and providers are still learning how to accurately report their charges to Medicare when billing for artificial intelligence services.

This is especially the case for allocating the cost of staff resources between the HeartFlow procedure and the coronary CT imaging services. Also, the erectile dysfunction treatment PHE potentially has affected the quality of the claims and cost data from CY 2020, and we have decided not to use that data to determine the payment rate for CPT code 0503T. That means it is difficult to determine whether the additional costs for HeartFlow that commenters state that their practices are incurring are reflected in the cost data for the service.

Therefore, we believe it is appropriate to continue to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to assign CPT code 0503T to the same New Technology APC in CY 2022 as in CY 2020 and CY 2021 in order to provide payment stability and equitable payment for providers as they continue to become more familiar with the proper cost reporting for HeartFlow and other artificial intelligence services until we can review more recent reliable claims data. As mentioned earlier in this section, CPT code 0503T was assigned to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) with a payment rate of $950.50 for CY 2020, and we will continue to assign CPT code 0503T to New Technology APC 1511 for CY 2022. After reviewing all of the public comments, we are finalizing our proposal without modification to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to continue to assign CPT code 0503T to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) for CY 2022.

Refer to Table 15 below for the final OPPS APC and status indicator for CPT code 0503T for CY 2022. e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) Studies (APCs 1522 and 1523) Effective January 1, 2020, we assigned three CPT codes (78431, 78432, and 78433) that describe the services associated with cardiac PET/CT studies to New Technology APCs.

Table 16 lists the code descriptors, status indicators, and APC assignments for these CPT codes. CPT code 78431 was assigned to APC 1522 (New Technology—Level 22 ($2001-$2500)) with a payment rate of $2,250.50. CPT codes 78432 and 78433 were assigned to APC 1523 (New Technology—Level 23 ($2501-$3000)) with a payment rate of $2,750.50.

We did not receive any claims data for these services for CY 2021. Therefore, we continued to assign CPT code 78431 to APC 1522 (New Technology—Level 22 ($2001-$2500)) with a payment rate of $2,250.50. Likewise, CPT codes 78432 and 78433 continued to be assigned to APC 1523 (New Technology—Level 23 ($2501-$3000)) with a payment rate of $2,750.50.

For CY 2022, we proposed to use CY 2019 claims data to determine the payment rates for CPT codes 78431, 78432, and 78433. Because these codes did not become active until CY 2020, there are no claims for these three services. Accordingly, we proposed to continue to assign CPT code 78431 to APC 1522 (New Technology—Level 22 ($2001-$2500)) with a payment rate of $2,250.50.

Likewise, we proposed that CPT codes 78432 and 78433 would continue to be assigned to APC 1523 (New Technology—Level 23 ($2501-$3000)) with a payment rate of $2,750.50. Comment. Multiple commenters supported our proposal to assign CPT code 78431 to APC 1522 (New Technology—Level 22 ($2001-$2500)) with a payment rate of $2,250.50, and to assign CPT codes 78432 and 78433 to APC 1523 (New Technology—Level 23 Start Printed Page 63536 ($2501-$3000)) with a payment rate of $2,750.50.

Commenters noted that there were no available claims data for these services as we are using CY 2019 claims data for CY 2022 ratesetting, and these codes did not become active until January 2020. Response. We appreciate the support of the commenters for our policy.

After our review of the public comments, we have decided to implement our proposal without modification. Table 16 lists code descriptors, status indicators, and APC assignments for these CPT codes. f.

V-Wave Medical Interatrial Shunt Procedure (APC 1590) A randomized, double-blinded, controlled IDE study is currently in progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt is for patients with severe symptomatic heart failure and is designed to regulate left atrial pressure in the heart. All participants who passed initial screening for the study receive a right heart catheterization procedure described by CPT code 93451 (Right heart catheterization including measurement(s) of oxygen saturation and cardiac output, when performed).

Participants assigned to the experimental group also receive the V-Wave interatrial shunt procedure while participants assigned to the control group only receive right heart catheterization. The developer of V-Wave was concerned that the current coding of these services by Medicare would reveal to the study participants whether they have received the interatrial shunt because an additional procedure code, CPT code 93799 (Unlisted cardiovascular service or procedure), would be included on the claims for participants receiving the interatrial shunt. Therefore, for CY 2020, we created a temporary HCPCS code to describe the V-wave interatrial shunt procedure for both the experimental group and the control group in the study.

Specifically, we established HCPCS code C9758 (Blinded procedure for NYHA class III/IV heart failure. Transcatheter implantation of interatrial shunt or placebo control, including right heart catheterization, trans-esophageal echocardiography (TEE)/intracardiac echocardiography Start Printed Page 63537 (ICE), and all imaging with or without guidance (for example, uasound, fluoroscopy), performed in an approved investigational device exemption (IDE) study) to describe the service, and we assigned the service to New Technology APC 1589 (New Technology—Level 38 ($10,001-$15,000)). We stated in the CY 2021 OPPS/ASC final rule with comment period that we believe that similar resources and device costs are involved with the V-Wave interatrial shunt procedure and the Corvia Medical interatrial shunt procedure (85 FR 85946).

Therefore, the difference in the payment for HCPCS codes C9758 and C9760 is based on how often the interatrial shunt is implanted when each code is billed. An interatrial shunt is implanted one-half of the time HCPCS code C9758 is billed. Accordingly, for CY 2021, we reassigned HCPCS code C9758 to New Technology APC 1590, which reflects the cost of having surgery every time and receiving the interatrial shunt one-half of the time when the procedure is performed.

For CY 2022, we are using the same claims data that we did for CY 2021. Because there are no claims reporting HCPCS code C9758, we proposed to continue to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2022. Comment.

Multiple commenters including the manufacturer supported our proposal to continue to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2022. Response. We appreciate the support of the commenters for our proposal.

After reviewing the public comments, we are finalizing our proposal without modification. Details about the HCPCS code and its APC assignment are shown in Table 17. The final CY 2022 payment rate for C9758 can be found in Addendum B to this final rule with comment period.

g. Corvia Medical Interatrial Shunt Procedure (APC 1592) Corvia Medical is currently conducting its pivotal trial for their interatrial shunt procedure. The trial started in Quarter 1 of CY 2017 and is scheduled to continue through CY 2021.[] On July 1, 2020, we established HCPCS code C9760 (Non-randomized, non-blinded procedure for nyha class ii, iii, iv heart failure.

Transcatheter implantation of interatrial shunt or placebo control, including right and left heart catheterization, transeptal puncture, trans-esophageal echocardiography (tee)/intracardiac echocardiography (ice), and all imaging with or without guidance (for example, uasound, fluoroscopy), performed in an approved investigational device exemption (ide) study) to facilitate the implantation of the Corvia Medical interatrial shunt. As we stated in the CY 2021 OPPS final rule with comment period, we believe that similar resources and device costs are involved with the Corvia Medical interatrial shunt procedure and the V-Wave interatrial shunt procedure (85 FR 85947). Therefore, the difference in the payment for HCPCS codes C9760 and C9758 is based on how often the interatrial shunt is implanted when each code is billed.

The Corvia Medical interatrial shunt is implanted every time HCPCS code C9760 is billed. Therefore, for CY 2021, we assigned HCPCS code C9760 to New Technology APC 1592 (New Technology—Level 41 ($25,001-$30,000)) with a payment rate of $27,500.50. We also modified the code descriptor for HCPCS code C9760 to remove the phrase “or placebo control,” from the descriptor.

For CY 2022, we proposed to use the same claims data as in CY 2021 to establish payment rates for services. Therefore, there are no claims for HCPCS code C9760, and we proposed to continue to assign HCPCS code C9760 to New Technology APC 1592. Comment.

Multiple commenters, including the manufacturer, supported our proposal to continue to assign HCPCS code C9760 to New Technology APC 1592. Response. We appreciate the support of the commenters of our proposal.

Comment. One commenter, the manufacturer, requested that CPT code 0613T (Percutaneous transcatheter implantation of interatrial septal shunt device, including right and left heart catheterization, intracardiac echocardiography, and imaging guidance by the proceduralist, when performed) be assigned to comprehensive APC 5194 (Level 4 Start Printed Page 63538 Endovascular Procedures) for CY 2022 and assigned a status indicator of “J1”. CPT code 0613T is the CPT code that will be used to report the Corvia Medical interatrial shunt procedure once the Corvia Medical interatrial shunt device associated with the procedure receives approval from the FDA, which the manufacturer believes will occur in CY 2022.

Currently, CPT code 0613T is a non-payable service code and is assigned a status indicator of “E1”. Response. We will assign CPT code 0613T to a payable status indicator and assign the service to a clinically-appropriate APC when the Corvia Medical interatrial shunt device associated with the procedure has received approval from the FDA.

OPPS payment policies are updated quarterly through a sub-regulatory process. If the Corvia Medical interatrial shunt device receives FDA approval, we will work to ensure a timely transition for the overall procedure to be reported with CPT code 0613T and end reporting of the service with HCPCS code C9760. We will also work to assign CPT code 0613T to an APC that reflects clinical and resource similarity to CPT code 0613T.

Details about the HCPCS code and its APC assignment are shown in Table 18. The final CY 2022 payment rate for C9760 can be found in Addendum B to this final rule with comment period. h.

Supervised Visits for Esketamine Self-Administration (APCs 1508 and 1511) On March 5, 2019, FDA approved SpravatoTM (esketamine) nasal spray, used in conjunction with an oral antidepressant, for treatment of depression in adults who have tried other antidepressant medicines but have not benefited from them (treatment-resistant depression (TRD)). Because of the risk of serious adverse outcomes resulting from sedation and dissociation caused by Spravato administration, and the potential for abuse and misuse of the product, it is only available through a restricted distribution system under a Risk Evaluation and Mitigation Strategy (REMS). A REMS is a drug safety program that FDA can require for certain medications with serious safety concerns to help ensure the benefits of the medication outweigh its risks.

A treatment session of esketamine consists of instructed nasal self-administration by the patient, followed by a period of post-administration observation of the patient under direct supervision of a health care professional. Esketamine is a noncompetitive N-methyl D-aspartate (NMDA) receptor antagonist. It is a nasal spray supplied as an aqueous solution of esketamine hydrochloride in a vial with a nasal spray device.

This is the first FDA approval of esketamine for any use. Each device delivers two sprays containing a total of 28 mg of esketamine. Patients would require either two (2) devices (for a 56 mg dose) or three (3) devices (for an 84 mg dose) per treatment.

Because of the risk of serious adverse outcomes resulting from sedation and dissociation caused by Spravato administration, and the potential for abuse and misuse of the product, Spravato is only available through a restricted distribution system under a REMS. Patients must be monitored by a health care provider for at least 2 hours after receiving their Spravato dose. The prescriber and patient must both sign a Patient Enrollment Form.

And the product will only be administered in a certified medical office where the health care provider can monitor the patient. Please refer to the CY 2020 PFS final rule and interim final rule for more information about supervised visits for esketamine self-administration (84 FR 63102 through 63105). To facilitate prompt beneficiary access to the new, potentially life-saving treatment for TRD using esketamine, we created two new HCPCS G codes, G2082 and G2083, effective January 1, 2020.

HCPCS code G2082 is for an outpatient visit for the evaluation and management of an established patient that requires the supervision of a physician or other qualified health care professional and provision of up to 56 mg of esketamine through nasal self-administration and includes 2 hours post-administration observation. HCPCS code G2082 was assigned to New Technology APC 1508 (New Technology—Level 8 ($601—$700)) with a payment rate of $650.50. HCPCS code G2083 describes a similar Start Printed Page 63539 service to HCPCS code G2082, but involves the administration of more than 56 mg of esketamine.

HCPCS code G2083 was assigned to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) with a payment rate of $950.50. For CY 2022, we are using CY 2019 claims data to determine the payment rates for HCPCS codes G2082 and G2083. Since these codes did not become active until CY 2020, there are no claims for these two services.

Therefore, for CY 2022, we proposed to continue to assign HCPCS code G2082 to New Technology APC 1508 (New Technology—Level 8 ($601-$700)) and to assign HCPCS code G2083 to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)). Comment. One commenter, the manufacturer, while understanding the rationale for our proposal to use CY 2019 claims data for CY 2022 ratesetting, asked us to take into consideration CY 2020 claims data to finalize payment rates for HCPCS codes G2082 and G2083.

The commenter noted that HCPCS codes G2082 and G2083 were not payable in CY 2019, and therefore there is no cost information in the CY 2019 claims data for these two procedures. The commenter also believes that CY 2020 data may show that the cost of G2082 and G2083 is substantially higher than the current New Technology APC assignments for the two services. Response.

We reviewed the available CY 2020 OPPS claims data in response to the request by the commenter for HCPCS codes G2082 and G2083, but we decided that there were not enough data available to determine whether to change the APC assignments for HCPCS codes G2082 and G2083. We would like to review another year of claims data for HCPCS codes G2082 and G2083 to assess the reliability of the cost information for CY 2020 and CY 2021 before using claims data to base our APC assignments for these services. Therefore, we will continue to use the same APC assignments for HCPCS codes G2082 and G2083 for CY 2022 as for CY 2021.

After reviewing the public comments for this proposal, we have decided to implement our proposal without modification to assign HCPCS code G2082 to New Technology APC 1508 and to assign HCPCS code G2083 to New Technology APC 1511. Details about the HCPCS codes and their APC assignments are shown in Table 19. The final CY 2022 payment rate for esketamine self-administration can be found in Addendum B to this final rule with comment period.

i. DARI Motion Procedure (APC 1505) CPT code 0693T (Comprehensive full body computer-based markerless 3D kinematic and kinetic motion analysis and report) will be effective January 1, 2022. The technology consists of eight cameras that surround a patient.

The cameras send live video to a computer workstation that analyzes the video to create a 3D reconstruction of the patient without the need for special clothing, markers or devices attached to the patient's clothing or skin. The technology is intended to guide health care providers on pre and post-operative surgical intervention and on the best course of physical therapy and rehabilitation for patients. As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule, we Start Printed Page 63540 proposed to assign CPT code 0693T to APC 5721 (Level 1 Diagnostics and Related Services) with a proposed payment rate of $143.21.

We note that CPT code 0693T was listed as placeholder code 0X60T in OPPS Addendum B of the CY 2021 OPPS/ASC proposed rule. Comment. One commenter, the manufacturer of the DARI Motion procedure, requested that CMS assign CPT code 0693T to APC 5723 (Level 3 Diagnostics and Related Services) with a payment rate of $498.53.

The commenter believed that the payment rate for APC 5721 is inadequate and will create a barrier to patient access. Response. We appreciate the concerns of the commenter and, for the reasons set forth below, agree that the proposed payment rate for CPT code 0693T may be too low and the procedure should be reassigned to a different APC.

The AMA releases Category III codes in January, for implementation beginning the following July, and in July, for implementation beginning the following January. DARI Motion received a Category III code scheduled for implementation January 1, 2022. Some Category III CPT codes describe services that we have determined are not compatible with an existing clinical APC, yet are appropriately provided in the hospital outpatient setting.

In these cases, we may assign the Category III CPT code to what we estimate is an appropriately priced New Technology APC (71 FR 68015). In addition, it should be noted that, with all new codes, CMS's policy has been to assign the service to an APC based on input from a variety of sources, including but not limited to review of the clinical similarity of the service to existing procedures, input from CMS medical advisors, information from interested specialty societies, review of all other information available to us, including information provided to us by the public, whether through meetings with stakeholders or additional information that is mailed or otherwise communicated to us. Based on information from the manufacturer, resources involved for the procedure described by CPT code 0693T appear to be higher than the payment rate for APC 5721 (Level 1 Diagnostics and Related Services).

CPT code 0693T is new for CY 2022 and, therefore, we had no claims data available for OPPS ratesetting. Further, based on input from our medical advisors and our understanding of the service, we believe that it is more appropriate to assign the DARI Motion procedure to APC 1505 (New Technology—Level 5 ($301-$400)), for CY 2022. We believe that assigning CPT code 0693T to New Technology APC 1505 will allow CMS to collect claims data before assigning CPT code 0693T to a clinical APC.

Comment. A commenter argued the assignment of CPT code 0693T to APC 5721 would create a 2 times rule violation within the APC based on geometric mean costs. The commenter calculated the 2-times threshold by multiplying the lowest cost significant procedure by 2 and arrived at a 2-times threshold.

According to the commenter, the 2-times threshold they calculated for APC 5721 is a lower payment rate than the technology described by CPT code 0693T. The commenter asserted that assigning CPT code 0693T to APC 5721 is a violation of the 2 times rule. Response.

We thank the commenter for their feedback. To clarify, we determine APC 2 times rule violations by considering 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).

CPT code 0693T is new for CY 2022 and, therefore, we had no claims data available for purposes of determining whether a 2 times rule violation occurs based on the code. In summary, after consideration of the public comments, we are finalizing our proposal with modification, and assigning CPT code 0693T to New Technology APC 1505 (New Technology—Level 5 ($301-$400)), for CY 2022. The final APC assignment and status indicator for CPT code 0693T are found in Table 20.

We refer readers to Addendum B of this final rule with comment period or the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. As we do for all codes, we will reevaluate the APC assignments for CPT code 0693T once we have claims data.

We remind hospitals that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on the latest claims data. Start Printed Page 63541 j. Histotripsy Service (APC 1575) Histotripsy is a non-invasive, non-thermal, mechanical process that uses a focused beam of sonic energy to destroy targeted cancerous liver tumors.

The AMA's CPT Editorial Panel established a new code to describe the service associated with histotripsy, specifically, Category III CPT code, 0686T (Histotripsy (that is, non-thermal ablation via acoustic energy delivery) of malignant hepatocellular tissue, including image guidance), effective July 1, 2021. As displayed in Addendum B of the CY 2022 OPPS/ASC proposed rule with comment period, for CY 2022, we proposed to assign the new code to APC 5311 (Level 1 Lower GI Procedures) with a payment rate of $814.44 effective January 1, 2022. Comment.

One commenter, the manufacturer of histotripsy, stated that histotripsy is a new technology that delivers short pulses of uasound energy, resulting in acoustic cavitation that mechanically destroys the targeted cancerous liver tumors while avoiding damage to intervening or surrounding healthy tissues. The commenter stated that the proposed assignment of CPT code 0686T to APC 5311 (Level 1 Lower GI Procedures) was not clinically or resource cohesive to histotripsy. The commenter reported a list of HCPCS codes currently assigned to APC 5311 and argued that the codes are not clinically or resource similar to histotripsy.

The commenter referenced histotripsy's IDE clinical study (G200253-NCT04573881) and provided a description of the histotripsy procedure and a breakdown of the associated resource components. The commenter also provided a cost estimate of each resource, such as the device cost, the associated imaging cost, and total room time. The commenter stated that the total cost for the procedure is $22,782.51 and requested assignment to a New Technology APC 1577 for the histotripsy service.

Response. We appreciate the commenter's input on this new technology. As stated in the CY 2002 OPPS final rule, CMS staff will obtain information on cost from other appropriate sources before making a final determination on the cost of the procedure or service to hospital outpatient facilities (66 FR 59900).

We note that for Category A IDE studies, Medicare may not furnish payment for costs associated with the histotripsy device since Category A devices are statutorily excluded from Medicare coverage. Based on our evaluation, for CY 2022, we estimated the cost of histotripsy, after removing the device cost, is within the cost band between $10,001 and $15,000. Accordingly, we believe reassigning CPT code 0686T to APC 1575 (New Technology—Level 38 ($10,001-$15,000)), with a payment rate of $12,500.50, more appropriately reflects the costs for which Medicare may provide payment.

We note that we retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment of the service to a clinically appropriate APC. In summary, after consideration of the public comments, we are finalizing our proposal with modifications. Specifically, we are assigning CPT code 0686T to APC 1575 for CY 2022.

The final CY 2022 OPPS payment rates for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addenda B and D1 are available via the internet on the CMS website.

K. Liver Multiscan Service (APC 1511) Liver MultiScan is a Software as a medical Service (SaaS) that is intended to aid the diagnosis and management of chronic liver disease, the most prevalent of which is Non-Alcoholic Fatty Liver Disease (NAFLD). It provides standardized, quantitative imaging biomarkers for the characterization and assessment of inflammation, hepatocyte ballooning, and fibrosis, as well as steatosis, and iron accumulation.

The SaaS receives MR images acquired from patients' providers and analyzes the images using their proprietary Artificial Intelligence (AI) algorithms. The SaaS then send the providers a quantitative metric report of the patient's liver fibrosis and inflammation. The AMA CPT Editorial Panel established two new codes, specifically, Category III CPT codes 0648T and 0649T for LiverMultiScan effective July 1, 2021, and CMS assigned the Category III CPT code 0648T to APC 5523 (Level 3 Imaging without Contrast) with a status indicator of “S” effective July 1, 2021.

We note that CPT code 0649T is packaged per our packaging policy for add-on code procedures. For the complete code descriptors for both codes, refer to Table 21. For CY 2022, we proposed to assign CPT code 0648T to APC 5523 (Level 3 Imaging without Contrast) with a payment rate of $236.14 effective January 1, 2022, and assign the add-on code, CPT code 0649T, to OPPS status indicator “N” (packaged) to indicate that payment for the add-on service is included in the primary service.

Start Printed Page 63542 Comment. Several commenters stated that LiverMultiScan is a new technology that represents a breakthrough for the diagnosis and monitoring of chronic parenchymal liver disease that will reduce the number of invasive procedures. The commenters stated that LiverMultiScan is an MRI measure of hepatic steatosis with performance equivalent to liver biopsy and superior to liver fat measures using uasound.

Some commenters cited that biopsy is the gold standard for diagnosis, but it is not commonly used because of cost, patient discomfort, risk of complications, and possible sampling error. Another commenter stated that LiverMultiScan has excellent diagnostic accuracy for at-risk Nonalcoholic steotohepatitis (NASH), detects changes in response to investigational treatments within a very short timeframe, and predicts clinical outcomes in patients with liver disease as well as liver biopsy. The commenters believe LiverMultiScan improves the management of NAFLD by helping patients connect with their liver health, which encourages these patients to their recommended course of treatment.

The commenters stated the assignment of CPT code 0648T to APC 5523 (Level 3 Imaging without Contrast) does not adequately cover the cost of delivering this service and discourages adoption of advanced liver care. The commenters stated that their hospital outpatient cost for the service is between $1,300 to $1,500 (versus approximately $7,000 for a liver biopsy), and they requested assignment of LiverMultiScan to a New Technology APC. One commenter referenced CMS's decision on Heartflow, which was initially packaged and then later recognized as a distinct service.

The commenter requested CMS recognize LiverMultiScan as a distinct service. Response. We appreciate the commenters' feedback on this new technology.

We note that before we assign a new service to a New Technology APC, we first perform our own cost analysis and cost estimate. As we stated in the CY 2002 OPPS final rule (66 FR 59900), we do not limit our determination of the cost of the procedure to information suggested by the commenters (or information submitted by the applicant for New Technology applications). To appropriately assign a service to a New Technology APC, our staff will obtain information on cost from other appropriate sources, including acquiring input from our medical advisors on the appropriateness of the service in the hospital outpatient setting, before making a final determination on the cost of the procedure or service.

Based on the information provided, we recognize that LiverMultiScan is a new technology that will aid in the management of beneficiaries with NAFLD, which may avoid liver biopsies. We note that liver biopsy remains the current gold standard for diagnosing NASH, determining grade disease severity, and accurately staging fibrosis. Based on our evaluation of the service, we agree with the commenter's suggested reference to Heartflow.

That is, we believe that LiverMultiScan and Heartflow share similar characteristics based on the nature of how the service is provided in the hospital outpatient setting. Both LiverMultiScan and Heartflow require the acquisition of radiological images as well as analysis of the images using proprietary AI algorithms to assist clinicians in appropriately diagnosing a patient's medical condition. In addition, our analysis of the estimated cost associated for this service is between $901 and $1,000.

Therefore, after further evaluation of the service and the resources required to perform the LiverMultiScan analysis, we believe it is appropriate to assign this service to a New Technology APC, specifically, APC 1511 (New Technology—Level 11 ($901-$1000)), which is the same APC assignment for Heartflow. Accordingly, we are assigning CPT code 0648T to New Technology APC 1511). We note that we retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment of the service to a clinically appropriate APC.

For CPT code 0649T, an add-on code, we believe that our assignment of the status indicator of “N” is appropriate under 42 CFR 419.2(b). We note that CMS does not create the Category III CPT codes or their descriptors, but we follow an established set of payment policies consistent with our OPPS packaging policy. As stated in section III.A.

€œOPPS Treatment of New and Revised HCPCS Codes” of this final rule with comment period, CPT codes are established and maintained by the American Medical Association (AMA), and changes to CPT codes should be referred to the AMA. In summary, after consideration of the public comment, we are finalizing our proposal with modification, to assign CPT code 0648T to New Technology APC 1511 ((New Technology—Level 11 ($901-$1000), for CY 2022. Also, we are finalizing our proposal, without Start Printed Page 63543 modification, for CPT code 0649T and assigning the code to OPPS status indicator “N” for CY 2022.

The final APC assignment and status indicators for CPT codes 0648T and 0649T can be found in OPPS Addendum B. We refer readers to Addendum B of the final rule for the final payment rates for all codes reportable under the OPPS. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS.

Both Addendum B and Addendum D1 are available via the internet on the CMS website. l. Minimally Invasive Glaucoma Surgery (MIGS) (APCs 5491 and 5492) Prior to CY 2022, extracapsular cataract removal with insertion of intraocular lens was reported using CPT codes describing cataract removal alongside a CPT code for device insertion.

Specifically, the procedure was described using CPT codes 66982 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (for example, iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage. Without endoscopic cyclophotocoagulation) or 66984 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification). Without endoscopic cyclophotocoagulation) and 0191T (Insertion of anterior segment aqueous drainage device, without extraocular reservoir, internal approach, into the trabecular meshwork.

Initial insertion). For CY 2022, the AMA's CPT Editorial Panel created two new Category I CPT codes describing extracapsular cataract removal with insertion of intraocular lens prosthesis, specifically, CPT codes 66989 and 6691, deleted a Category III CPT code, specifically, CPT code 0191T, describing insertion of anterior segment aqueous drainage device, and created a new Category III CPT code, specifically, CPT code 0671T, describing interior segment aqueous drainage device without concomitant cataract removal. We proposed the following APC assignment.

• CPT code 66989 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique ( e.g., irrigation and aspiration or phacoemulsification), complex, 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) or performed on patients in the amblyogenic developmental stage. With insertion of intraocular ( e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more) to APC 5492 (Level 2 Intraocular Procedures) with a proposed status indicator (SI) of “J1” and proposed payment rate of $4,018.82. We note this code was listed as placeholder code 669X1 in the OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule.

CPT code 66991 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification). With insertion of intraocular (for example, trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more) to APC 5492. We note this code was listed as placeholder code 669X2 in the OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule.

CPT code 0671T (Insertion of anterior segment aqueous drainage device into the trabecular meshwork, without external reservoir, and without concomitant cataract removal, one or more) to APC 5491 (Level 1 Intraocular Procedures) with a proposed SI of “J1” and a proposed payment rate of $2,131.25. We note this code was listed as placeholder code 0X12T in the OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. At the August 23, 2021 HOP Panel Meeting, a presenter requested that we reassign CPT codes 66989 and 66991 to APC 5493 (Level 3 Intraocular Procedures) with a proposed payment rate of $7,529.00, and reassign 0671T to APC 5492, citing concerns over a decrease in payment for MIGS between how it is currently coded and how it will be coded beginning January 1, 2022.

Based on the discussion during the meeting, the HOP Panel recommended that CMS reassign CPT codes 66989 and 66991 to APC 5493 and reassign 0671T to APC 5492. Comment. Most commenters opposed the proposed APC assignment for these services and recommended that CMS implement the APC assignments recommended by the HOP Panel.

They stated that the proposed APC assignments do not accurately account for the costs associated with MIGS and would result in an overall decrease in payment for MIGS from the current payment rates and that this decrease would negatively impact access to this service. Commenters stated placement in APC 5493 and APC 5492 would better account for the resources associated with performing CPT codes 66989 and 66991, and CPT code 0671T, respectively. Commenters also suggested that CMS could consider assignment of these services to a New Technology APC or create an incremental intraocular APC between APC 5492 and 5493.

Response. We do not believe that the costs associated with performing MIGS are accurately reflected by APC 5493. We note that while APC 5491 (Level 1 Intraocular Procedures) and APC 5492 have 40 or greater separately payable services assigned to them, only one service is assigned to the APCs 5493, 5494, and 5495 (Level 3-5 Intraocular Procedures, respectively).

In instances where a single procedure is assigned to an APC, the geometric mean cost and the resulting payment rate is largely based on the geometric mean of the individual service assigned to the APC. However, we note that while only one service is assigned to APC 5493, there are certain complexity adjustments that move certain services assigned to the APC 5492 to APC 5493 when billed concurrently. These changes are also reflected in the claims data we use to develop geometric mean costs and the resulting payment rates.

We note that the proposed payment rate for APC 5493 is almost double the payment rate for APC 5492. We also believe that the change in coding for MIGS is significant in that it changes longstanding billing for the service from reporting two separate CPT codes to reporting a single bundled code. Without claims data, and given the magnitude of the coding change, we do not believe we have the necessary information on the costs associated with CPT codes 66989 and 66991 to assign them to a clinical APC at this time.

We agree with commenters that reassignment to a New Technology APC will maintain payment accuracy for these services while we collect cost data to support reassignment to the relevant clinical APC. We believe that APC 1526 (New Technology—Level 26 ($4001-$4500)), with a payment rate of $4,250.50, most accurately accounts for the resources associated with furnishing MIGS. We regard to CPT code 0671T, we note that this code describes insertion of Start Printed Page 63544 intraocular lens without concurrent cataract removal and would not be billed alongside CPT codes 66989 or 66991.

Based on our review of the clinical characteristics of the procedure and input from our medical advisors, we continue to believe that this service is more similar to the other services in APC 5491. In summary, after consideration of the public comments, we are finalizing the reassignment of CPT codes 66989 and 66991 to APC 1526 and assignment of CPT code 0671T to APC 5491. The final CY 2022 OPPS payment rates for this code can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 to this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. M.

Scalp Cooling (APC 1520) For July 1, 2021, the CPT Editorial Panel created CPT code 0662T to describe initial measurement and calibration of a scalp cooling device for use during chemotherapy administration to prevent hair loss. For CY 2022, we proposed to assign CPT code 0662T (Scalp cooling, mechanical. Initial measurement and calibration of cap) to APC 5732 (Level 2 Minor Procedures) with a proposed payment rate of $34.72.

At the August 23, 2021 HOP Panel Meeting, a presenter requested that we reassign CPT code 0662T to one of the following APCs. APC 5054 (Level 4 Skin Procedures) with a proposed payment rate of $1,759.21, APC 5055 (Level 5 Skin Procedures) with a proposed payment rate of $3,613.14, APC 1519 (New Technology—Level 19 ($1,701-$1,800)) with a proposed payment rate of $1,750.50, or APC 1520 (New Technology—Level 20 ($1,801-$1,900)) with a proposed payment rate of $1,850.50 Based on the information presented, the HOP Panel recommended that CMS assign CPT code 0662T to a New Technology APC. Comment.

Commenters encouraged CMS to accept the HOP Panel's recommendation and assign CPT code 0662T to APC 1519 or 1520 or reassign CPT code 0662T to either APC 5054 or 5055. Commenters stated that the cost of the scalp cooling cap itself was around $600 and that the rest of the costs associated with performing the measurement and calibration were around $2,500-$3,000. Response.

Based on the information presented at the HOP Panel meeting, as well as input from our clinical advisors, and analysis of the information provided by the commenters, we believe that the procedure described by CPT code 0662T should be assigned to a New Technology APC. We note that according to Medicare's National Coverage Determination (NCD) policy, specifically, NCD 110.6 (Scalp Hypothermia During Chemotherapy to Prevent Hair Loss), the scalp cooling cap itself is classified as an incident to supply to a physician service, and would not be paid under the OPPS. However, stakeholders have indicated that there are substantial resource costs associated with calibration and fitting of the cap.

Based on the estimate of costs provided by the commenter, without taking into account the costs of the cap, the overall cost associated with CPT code 0662T is between $1,900-$2,400, supporting reassignment to New Technology APC 1520. CPT guidance states that CPT code 0662T should be billed once per chemotherapy session, which we interpret to mean once per course of chemotherapy. Therefore, if a course of chemotherapy involves 6 or 18 sessions, HOPDs should report CPT 0662T only once for that 6 or 18 therapy sessions.

We note that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS. In summary, after consideration of the public comments, we are finalizing our proposal with modification. Specifically, we are finalizing assignment of CPT code 0662T to APC New Technology 1520.

The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

D. OPPS APC-Specific Policies 1. AccuCinch Ventricular Restoration Procedure For the July 2021 update, the AMA's CPT Editorial Panel established CPT code 0643T (Transcatheter left ventricular restoration device implantation including right and left heart catheterization and left ventriculography when performed, arterial approach) to describe the AccuCinch device implantation procedure.

For CY 2022, we proposed to assign the code to OPPS status indicator “E1” (Items, codes, and services not covered by any Medicare outpatient benefit category. Statutorily excluded. Not reasonable and necessary) to indicate that the service is not covered by Medicare.

Comment. A commenter requested the reassignment in the status indicator to OPPS status indicator “C” (inpatient-only) since this is the more appropriate assignment for the ventricular restoration therapy based on the complex patient population enrolled in the US clinical trial. The commenter explained that the investigational device, the AccuCinch® Ventricular Restoration System, is currently under evaluation in the CORCINCH-HF pivotal trial (NCT04331769).

Response. Based on our review of the clinical study, input from our medical advisors, as well review of Medicare's coverage policy for this clinical trial, we agree with the commenter. Review of the clinical study indicates that the CORCINCH-HF study ( https://clinicaials.gov/​ct2/​show/​NCT04331769 ) is a prospective, randomized, control multicenter clinical study that evaluates the safety and efficacy of the AccuCinch Ventricular Restoration System in patients with heart failure and reduced ejection fraction (HFrEF).

Based on the interventional structural heart (SH) technique involved in the procedure, use of an experimental device, and close monitoring of the patient that is required during the intra- and post-op period consistent with the resources available in the hospital inpatient setting, we believe the AccuCinch procedure should be designated as an inpatient-only procedure. We note that the CORCINCH-HF pivotal trial (NCT04331769) was approved by Medicare and meet's CMS' standards for coverage as an Investigation Device Exemption (IDE) study effective November 11, 2020. In summary, after consideration of the public comment, we are modifying our proposal and revising the status indicator for CPT code 0643T from “E1” to “C” (inpatient-only) for CY 2022.

We refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addendum D1 is available via the internet on the CMS website. 2.

Administration of Lacrimal Ophthalmic Insert Into Lacrimal Canaliculus (APC 5694) HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg) is a drug indicated “for the treatment of ocular inflammation and pain following Start Printed Page 63545 ophthalmic surgery.” [] Stakeholders assert that this drug is administered through CPT code 0356T (Insertion of drug-eluting implant (including punctal dilation and implant removal when performed) into lacrimal canaliculus, each). Stakeholders also state the drug is inserted in a natural opening in the eyelid (called the punctum) and that the drug is designed to deliver a tapered dose of dexamethasone to the ocular surface for up to 30 days. HCPCS code J1096 is currently on pass-through status and assigned to APC 9308 (Dexametha opth insert 0.1 mg) with status indicator “G”.

Please see section V.A.5. Of this final rule with comment period for further information regarding the pass-through status of J1096. CPT code 0356T is currently assigned to status indicator “Q1”, indicating conditionally packaged payment under the OPPS.

Packaged payment applies if a code assigned status indicator “Q1” is billed on the same claim as a HCPCS code assigned status indicator “S”, “T”, or “V”. Accordingly, based on the OPPS assigned status indicator, CPT code 0356T is assigned to payment indicator “N1” in the ASC setting, meaning a packaged service/item. We refer readers to Addendum D1 of this final rule with comment period for a list of OPPS status indicators and their definitions, available via the internet on the CMS website.

We also refer readers to Addendum AA for ASC payment indicator assignments and to Addendum DD1 for payment indicator definitions, available via the internet on the CMS website. For CY 2021, CPT code 0356T is assigned to APC 5692 (Level 2 Drug Administration). Effective January 1, 2022, CPT code 0356T will be deleted.

CPT code 68841, represented by placeholder code 68XXX in the proposed rule, will become effective on January 1, 2022. Due to the similarity between CPT code 0356T and CPT code 68841, we proposed to assign CPT code 68841 to the same APC, status indicator, and payment indicator assignments as CPT code 0356T. Additionally, we note that the manufacturer of the product that is usually administered through 0356T and placeholder code 68XXX, brought the issue of payment of this code to the Advisory Panel on Hospital Outpatient Payment (also known as HOP Panel) in 2021 for CY 2022 rulemaking and requested a new APC placement.

The HOP Panel did not make a recommendation to reassign placeholder code 68XXX to a different APC, OPPS status indicator, or ASC payment indicator as suggested by the presenters. Comment. Commenters asserted that the proposed placeholder code 68XXX is used to describe the administration of Dextenza and the drug insertion procedure is typically performed after the completion of an ophthalmic procedure, such as a cataract, glaucoma, or retina procedure.

Commenters state this procedure is typically done in the ASC setting 80 percent of the time, and is performed in the HOPD setting 20 percent of the time. Several commenters had concerns with continuing the same APC placement of APC 5692 for CPT code 68XXX for CY 2022. Commenters generally advocated for increased payment for this CPT code in the HOPD and ASC settings.

Some commenters did not make a specific suggestion as to what the final APC assignment should be, rather they argued the proposed payment was inadequate. However, some commenters made specific recommendations to change the APC assignment to APC 5503 (Level 3 Extraocular, Repair and Plastic Eye Procedures). Commenters felt this would be a more appropriate and fair APC placement due to its resource similarity to procedures in this APC.

Commenters frequently cited CPT 66030 (Injection, anterior chamber of eye (separate procedure). Medication) and CPT 0X78T (Injection, posterior chamber of eye. Medication), which were proposed to be assigned to APC 5491 (Level 1 Intraocular Procedures), as similar procedures to which 68XXX should be compared.

However, commenters did recognize that 68XXX represents an extraocular procedure. Therefore, they felt APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures) would be an appropriate alternative APC assignment. A minority of commenters discussed the proposed status indicator assignment and payment indicator assignment for 68XXX.

Some said a “Q1” status indicator was inappropriate, but did not provide an alternative suggestion. One commenter provided an alternate crosswalk for 68XXX and stated that, in their view, 68XXX was clinically similar to CPT Code 68761 (Closure of the lacrimal punctum. By plug, each), which is assigned to APC 5501 (Level 1 Extraocular, Repair and Plastic Eye Procedures), and is assigned to status indicator “T”.

Additionally, a commenter mentioned using available 2020 claims data for 0356T, instead of the zero claims data available using 2019 claims as proposed, which would suggest a higher APC placement. Several stakeholders commented that the clinical importance of providing HCPCS code J1096 to patients is that it reduces ocular pain, inflammation, and reduces the burden of topical eyedrop application. Additionally, providers stated that they usually perform the procedure to administer Dextenza after the conclusion of ophthalmic surgeries.

Commenters believe the procedure is a distinct surgical procedure that requires additional operating room time and resources. Commenters were concerned that the lack of increased or separate payment may reduce access to Dextenza, particularly in the ASC setting. Response.

We thank commenters for their feedback. We note that placeholder code 68XXX will be replaced by CPT code 68841, and we will refer to this code from here on. Based on input from stakeholders, we believe an APC reassignment is appropriate for CY 2022.

After careful consideration of the statements from commenters, we analyzed available claims data and similar procedures that approximate the clinical resources associated with CPT code 68841. We agree with a commenter that CPT code 68761 (Closure of the lacrimal punctum. By plug, each) may more appropriately approximate the resources associated with CPT code 68841.

We also believe that CPT code 68801 (Dilation of lacrimal punctum, with or without irrigation) represents a clinically similar procedure and would also be an appropriate procedure with which to compare CPT code 68841. Additionally, based on our review of comments, we do not find it appropriate to use the three single frequency claims that are associated with the CY 2020 claims data for CPT code 0356T as a basis for CPT code 68841, as they seem anomalous compared to the 1,543 total frequency claims available in the CY 2020 claims data dataset. Additionally, we do not find it appropriate to use CY 2019 claims data for 0356T as there are zero single frequency claims, 53 total frequency claims, and a zero-dollar geometric mean.

Rather, we believe estimating the clinical resources needed for CPT code 68841 through comparison to clinically similar codes is more appropriate for CY 2022. Based on the CY 2019 claims data available for CY 2022 OPPS ratesetting, the geometric mean cost associated with CPT code 68761 is $211.17 and the geometric mean cost associated with CPT code 68801 is $300.27. Based on these geometric mean costs, we believe assignment of CPT code 68841 to APC 5694 (Level 4 Drug Administration) is Start Printed Page 63546 appropriate.

Additionally, we continue to believe that assignment of CPT code 68841 to an OPPS status indicator “Q1” and an associated ASC payment indicator of “N1”, is appropriate. Commenters have stated that CPT code 68841 is performed during ophthalmic surgeries, such as cataract surgeries. A status indicator “Q1”, conditionally packaged procedure, describes a HCPCS code where the payment is packaged when it is provided with a significant procedure but is separately paid when the service appears on the claim without a significant procedure.

Because ASC services always include a surgical procedure, HCPCS codes that are conditionally packaged under the OPPS are generally packaged (payment indictor “N1”) under the ASC payment system. Although stakeholders state this is an independent surgical procedure and should not be packaged into the primary ophthalmic procedure in which the drug and drug administration are associated, based on stakeholder comment regarding clinical patterns as to how the drug is used, we do not agree. We find it appropriate to conditionally package CPT code 68841 based on its clinical use patterns as described by commenters.

This is consistent with 42 CFR 419.2(b). The conditional packaging of this code supports our overarching goal to make payments for all services paid under the OPPS and ASC payment system more consistent with those of a prospective payment system and less like those of a per-service fee schedule. We believe that packaging encourages efficiency and is an essential component of a prospective payment system, and that packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service is a fundamental part of the OPPS.

We therefore believe packaging of CPT code 68841 is appropriate. After consideration of the public comments, we are finalizing our proposal to assign CPT code 68841 to APC 5694 (Level 4 Drug Administration) with OPPS status indicator “Q1” for CY 2022. In addition, based on the OPPS assignments, we are finalizing an ASC payment indicator of “N1” for CPT code 68841 for CY 2022.

Please see Table 22 for the code descriptor, APC assignment, status indicator assignment, and payment indicator assignment for CPT code 68841 for CY 2022. 3. Allergy Testing (APC 5724) For CY 2022, we proposed to continue to assign CPT code 95004 (Percutaneous tests (scratch, puncture, prick) with allergenic extracts, immediate type reaction, including test interpretation and report, specify number of tests) and CPT code 95044 to APC 5724 (Level 4 Diagnostic Tests and Related Services) with a proposed payment rate of $943.96.

Comment. One commenter expressed concerns with the overall reimbursement for allergy testing, stating that reimbursement has increased dramatically over time for what the commenter asserted was a relatively routine procedure. The commenter recommended that CMS review the payment rates for these services to ensure that they are being accurately reimbursed.

Response. We thank the commenter for their insight and will consider it for future rulemaking. In summary, after consideration of the public comment, we are finalizing our proposal without modification.

Specifically, we are finalizing assignment of CPT codes 95004 and 95044 to APC 5724. The final CY 2022 OPPS payment rates for these codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 4. Blood Not Otherwise Classified (NOC) (APC 9537) Providers and stakeholders in the blood products field have reported that product development for new blood products has accelerated.

There may be several additional new blood products entering the market by the end of by CY 2022, compared to only one or two new products entering the market over the previous 15 to 20 years. To encourage providers to use these new products, providers and stakeholders requested that we establish a new HCPCS code to allow for payment for unclassified blood products prior to these products receiving their own HCPCS code. Under the OPPS, unclassified procedures are generally assigned to the lowest APC payment level of an APC family.

However, since blood products are each assigned to their own unique APC, the concept of a lowest APC payment level does not apply in this context. Starting January 1, 2020, we established a new HCPCS code, P9099 (Blood component or product not otherwise classified) which allows providers to report unclassified blood products. We assigned HCPCS code P9099 to status indicator “E2” (Not payable by Medicare when submitted on an outpatient claim) for CY 2020.

We took this action because HCPCS code P9099 potentially could be reported for multiple products with different costs during the same period of time. Therefore, we could not identify an individual blood product HCPCS code that would have a similar cost to HCPCS code P9099, and were not able to crosswalk a payment rate from an Start Printed Page 63547 established blood product HCPCS code to HCPCS code P9099. Some stakeholders expressed concerns that assigning HCPCS code P9099 to a non-payable status in the OPPS meant that hospitals would receive no payment when they used unclassified blood products.

Also, claim lines billed with P9099 are rejected by Medicare, which prevents providers from tracking the utilization of unclassified blood products. Because of the challenges of determining an appropriate payment rate for unclassified blood products, we stated in the CY 2021 OPPS/ASC proposed rule that we were considering packaging the cost of unclassified blood products into their affiliated primary medical procedure. Although we typically do not package blood products under the OPPS, for unclassified blood products, we stated that we do not believe it is possible to accurately determine an appropriate rate that would apply for all of the products (potentially several, with varying costs) that may be reported using HCPCS code P9099.

Packaging the cost of unclassified blood products into the payment for the primary medical service by assigning HCPCS code P9099 a status indicator of “N” would allow providers to report the cost of unclassified blood products to Medicare. Over time, the costs of unspecified blood products would be reflected in the payment rate for the primary medical service if the blood product remains unclassified. However, we stated that we expect that most blood products would seek and be granted more specific coding such that the unclassified HCPCS code P9099 would no longer be applicable.

We also explained that we believe that packaging the costs of unclassified blood products would be an improvement over the current non-payable status for HCPCS code P9099 as it would allow for tracking of the costs and utilization of unclassified blood products. We had concerns about this approach because providers would not receive separate payment for the blood products reported with HCPCS code P9099, and providers would have had to wait at least two years for the primary service billed with HCPCS code P9099 to potentially reflect some of the cost of the unclassified product. After considering the other payment options for HCPCS code P9099 and comments from providers and stakeholders, we decided against packaging HCPCS code P9099 for CY 2021.

The CMS HOP Panel and multiple stakeholders suggested another payment alternative to have unclassified blood products paid separately by using a weighted average of the payment rates of all separately payable blood products in the OPPS. The average payment rate would be weighted by the number of units billed for each service in the OPPS. Stakeholders believed a weighted average would be consistent with OPPS policy to provide separate payment for all blood products and would encourage the use of HCPCS code P9099 to track the utilization of unclassified blood products until the new products could receive individual HCPCS codes.

Other stakeholders suggested that unclassified blood products be paid either at charges reduced to cost or at reasonable cost to appropriately compensate providers billing unclassified blood products. We decided against paying for HCPCS code P9099 through either a weighted average payment, charges reduced to cost, or reasonable cost for CY 2021. We had concerns that these payment methods could provide incentives to discourage manufacturers of new blood products from seeking individual HCPCS codes for their products.

A weighted average payment would encourage manufacturers of relatively inexpensive unclassified blood products not to seek a HCPCS code for their products because the payment using HCPCS code P9099 for the products would be substantially higher than payment the products would receive once an individual code is established for the blood products. In addition, the level of payment from a weighted average payment may reduce the urgency of manufacturers to seek an individual HCPCS code even for higher-cost products, which would delay our ability to track payment for individual blood products. After considering our options, we decided for CY 2021 to pay for HCPCS code P9099 by making the blood not otherwise classified code separately payable, assigning it a status indicator of “R”, and paying the code at a rate equal to the lowest paid separately payable blood product in the OPPS, which is P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml) with a payment rate of $7.79 per unit.

This policy aligns with our overall OPPS policy to pay NOC codes at the lowest available APC rate for a service category, while providing a payment for unclassified blood products when a service is reported on the claim. Our policy also provides incentives for manufacturers to seek individual HCPCS codes for new blood products, which helps us to track the utilization of these new blood products and establish a payment rate for these new products that better reflects their cost. For CY 2022, we proposed to continue our policy that was established in CY 2021 without modification.

Comment. The HOP Panel and multiple commenters have requested that unclassified blood products assigned to HCPCS code P9099 be paid based on reasonable cost and that HCPCS code P9099 be assigned a status indicator of “F” (paid at reasonable cost). Unclassified blood products paid on the basis of reasonable cost would receive payment based on individual invoices submitted by the provider that detail the actual cost of the unclassified blood products for the provider.

The commenters believe our current policy severely underpays for most unclassified blood products, which limits the ability of providers to use these new products, and discourages innovation in the blood products field. Commenters assert that the universe of blood products is very heterogeneous with each product having its own APC and payment rate, and our policy that assigns unclassified clinical services HCPCS codes to the lowest-paying APC in a clinical series is not appropriate for the payment of blood products. Commenters also believe the administrative burdens of submitting claims to receive payment through reasonable cost would encourage blood product manufacturers to classify their unclassified products.

Relatedly, two other commenters urged us to reduce administrative burden for providers if we decide to implement reasonable cost payment for HCPCS code P9099. Response. We have concerns about paying unclassified blood products using reasonable cost and assigning HCPCS code P9099 a status indicator of “F”.

Although reasonable cost would likely provide a more granular reflection of the cost of unclassified blood products to providers, there would be no incentive for providers to manage their costs when using unclassified blood products, and no incentives for the manufacturers to seek individual HCPCS codes for the unclassified blood products. We agree with the commenters that the administrative burdens of seeking payment through reasonable cost methodology may provide some incentive to classify currently unclassified blood products. However, we believe that providers will prefer to receive full cost reimbursement for an unclassified blood product rather than risk receiving a prospective payment that could be less than full cost of the blood product if the blood product is classified and assigned a HCPCS code.

Finally, we do not support reasonable cost payment for HCPCS code P9099 because the OPPS is a prospective payment system, and we Start Printed Page 63548 want to limit rather than expand the types of services within the OPPS that do not receive prospective payment. After reviewing the public comments we received, we have decided to implement our proposal without modification to keep HCPCS code P9099 separately payable with a status indicator of “R”, and pay the code at a rate equal to the lowest paid separately payable blood product in the OPPS, which is P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml) with a payment rate of $7.79 per unit. Therefore, we are finalizing our proposal to continue to assign HCPCS code P9099 to APC 9537 (Blood component/product noc) for CY 2022.

We appreciate that establishing a fair and equitable payment methodology for HCPCS code P9099 continues to be a challenge, and we plan to explore other possible ideas for the payment of HCPCS code P9099 in future rulemaking. 5. Bone Substitute Material Injection (APC 5113) For January 1, 2022, the AMA's CPT Editorial Panel established new CPT code 0707T (Injection(s), bone substitute material (for example, calcium phosphate) into subchondral bone defect (that is, bone marrow lesion, bone bruise, stress injury, microtrabecular fracture), including imaging guidance and arthroscopic assistance for joint visualization).

We note that CPT code 0707T was listed as placeholder code 0X79T in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. For CY 2022, we proposed to assign CPT code 0707T to APC 5111 (Level 1 Musculoskeletal Procedures) with a proposed payment rate of $211.47. Comment.

Commenters did not agree with our proposed APC assignment. Instead, commenters stated that CPT code 0707T should be assigned to APC 5114 (Level 4 Musculoskeletal Procedure) with a proposed payment rate of $6,428.51 based on its clinical and resource homogeneity to the procedures and services in the APC. Commenters stated that 0707T is most clinically similar to Zimmer Biomet's AccuFill BSM procedure, which is the service described by CPT code 29855 (Arthroscopically aided treatment of tibial fracture, proximal (plateau).

Unicondylar, includes internal fixation, when performed (includes arthroscopy)), and assigned to APC 5114. Commenters stated that the injection of a bone substitute material into a subchondral bone defect is mainly accounted for by two products, Zimmer Biomet's AccuFill BSM and Anika, which range in price from $2,600-$2,800. Response.

We do not agree that CPT code 0707T is comparable to CPT code 29855. However, based on our review of the clinical characteristics of the procedure and input from our medical advisors, we believe CPT code 0707T is more similar to the procedures assigned to APC 5113 (Level 3 Musculoskeletal Procedures) with a proposed payment rate of $2,906.75, and this payment rate better accounts for the cost of the procedure as well as the bone substitute material. In summary, after consideration of the public comments, we are assigning CPT code 0707T to APC 5113 for CY 2022 based on its resource and clinical similarity to the procedures in APC 5113.

The final CY 2022 OPPS payment rates for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 to this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

As we do every year, we will reevaluate the APC assignment for CPT code 0707T for the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS. 6.

Calculus Aspiration With Lithotripsy Procedure (APC 5376) For CY 2022, we proposed to assign HCPCS code C9761 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with lithotripsy (ureteral catheterization is included) and vacuum aspiration of the kidney, collecting system and urethra if applicable) to APC 5375 (Level 5 Urology and Related Services) with a proposed payment of $4,527.23. HCPCS code C9761 describes the procedure that uses a sterile, single-use aspiration-irrigation catheter that is designed to assist in the removal of stone fragments during standard ureteroscopy. Based on our analysis of the latest CY 2020 claims data for this CY 2022 OPPS/ASC final rule with comment period, our data reveals two single claims for HCPCS code C9761 with a geometric mean cost of $9,342.

Comment. Several commenters expressed concerns that a significant difference between cost and payment prevented hospitals from providing this procedure to their patients. The commenters urged CMS to change the APC assignment of HCPCS code C9761 to APC 5376 (Level 6 Urology and Related Services).

The commenters asked that CMS assign HCPCS code C9761 to APC 5376 for two reasons. (1) The current and proposed reimbursement rates for services in APC 5375 are inadequate to pay hospitals appropriately for the costs of furnishing the Steerable Ureteroscopic Renal Evacuation (SURE) procedure. And (2) the clinical characteristics and resources associated with HCPCS code C9761 are similar to codes in APC 5376 than services in APC 5375.

Response. We thank the commenters for their feedback. Based on information from the manufacturer, resources involved for the procedure described by HCPCS code C9761 appear to be higher than for those procedures assigned to APC 5375.

At this time, only two CY 2020 claims are available to assist in identifying costs associated with the procedure. The geometric mean cost of $9,342 for the two claims indicate that the cost of HCPCS code C9761 is substantially higher than the proposed payment rate of $4,527.23. However, two claims is not a significant data set.

And we have concerns that the costs reported from the two claims for the procedure described by HCPCS code C9761 may not accurately reflect the geometric mean costs of the procedure. We also note that, in the manufacturer's 2020 New Technology APC application, they indicated that an appropriate payment for the procedure described by HCPCS code C9761 would be approximately $5,627.39 and that assignment to New Technology APC 1566 (New Technology—Level 29 ($5,501-$6,000)) would be appropriate. Based on the claims data along with the reported costs associated with the procedure presented to us by the manufacturer, we believe that it is appropriate to assign the procedure described by HCPCS code C9761 to APC 5376 (Level 6 Urology and Related Services), for CY 2022.

As we do every year we will reevaluate the APC assignment for CPT code 9761 in the next rulemaking cycle. We remind hospitals that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on the latest claims data available to us. In summary, after consideration of the public comments we received, we are modifying our proposal for the APC assignment of HCPCS code C9761.

Instead of assigning this code to APC 5375 (Level 5 Urology and Related Services), for CY 2022, we are reassigning HCPCS code C9761 to APC 5376 (Level 6 Urology and Related Services). Table 23 below lists the final CY 2022 status indicator and APC assignments for the calculus aspiration Start Printed Page 63549 with lithotripsy procedure. We refer readers to Addendum B to this final rule with comment period for the final payment rates for all codes reportable under the OPPS.

Addendum B is available via the internet on the CMS website. 7. Cardiac Computed Tomography (CT) (APC 5571) For CY 2022, we proposed to continue to assign the following cardiac CT exam codes to APC 5571 (Level 1 Imaging with Contrast) with a proposed payment rate of $183.30.

75572 (Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology (including 3d image postprocessing, assessment of cardiac function, and evaluation of venous structures, if performed)). 75573 (Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology in the setting of congenital heart disease (including 3d image postprocessing, assessment of lv cardiac function, rv structure and function and evaluation of venous structures, if performed)). And 75574 (Computed tomographic angiography, heart, coronary arteries and bypass grafts (when present), with contrast material, including 3d image postprocessing (including evaluation of cardiac structure and morphology, assessment of cardiac function, and evaluation of venous structures, if performed)).

Comment. Many commenters opposed the assignment of CPT codes 75572, 75573, and 75574 to APC 5571. They stated that the proposed CY 2022 OPPS payment rate for APC 5571 is inadequate to cover the total cost of providing the service.

Commenters stated that they also believe that the resource costs required to perform cardiac CT scans are similar to the tests that are assigned to APC 5573 rather than APC 5571. They noted that the low payment for the test limits patient access, and requested that CMS take action to increase reimbursement to levels in line with the actual testing costs. The commenters requested an APC reassignment for all three codes.

Specifically, the commenters suggested reassigning CPT codes 75572 and 75573 to APC 5572 (Level 2 Imaging with Contrast) and CPT code 75574 to APC 5573 (Level 3 Imaging with Contrast). Most of the commenters reported that cardiac CT scans are more resource intensive than other CT and x-ray scans in APC 5571 and expressed concerns that APC-misallocation would suppress utilization for these services. Response.

As we stated in the CY 2021 OPPS final rule with comment period (85 FR 85956), payments under the OPPS are based on our analysis of the latest available claims and cost report data submitted to Medicare. We have many years of claims data for CPT codes 75572, 75573, and 75574. Based on the geometric mean costs for these codes, we do not believe that CPT codes 75572, 75573, and 75574 utilize similar resources as the exams assigned to APC 5572 or APC 5573.

We refer readers to the CY 2021 OPPS final rule with comment period for a more detailed discussion of the pricing methodology for CPT codes 75572, 75573, and 75574 (85 FR 85956 through 85959). In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign the cardiac CT exam codes, specifically, CPT codes 75572, 75573, and 75574 to APC 5571. The final CY 2022 OPPS payment rates for these codes can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. 8.

Cardiac Magnetic Resonance (CMR) Imaging (APC 5523, 5524, 5572, and 5573) For CY 2022, we proposed to continue to assign the following cardiac magnetic resonance imaging (MRI) CPT codes to APC 5523, 5524, 5572, and 5573, respectively. CPT code 75557 (Cardiac magnetic resonance imaging for morphology and function without contrast material) to APC 5523 (Level 3 Imaging without Contrast) with a proposed payment of $236.14. CPT code 75559 (Cardiac magnetic resonance imaging for morphology and function without contrast material.

With stress imaging) to APC 5524 (Level 3 Imaging without Contrast) with a proposed payment of $495.76. CPT code 75561 (Cardiac magnetic resonance imaging for morphology and function without contrast material(s), followed by contrast material(s) and further sequences) to APC 5572 (Level 2 Imaging with Contrast) with a proposed payment of $377.80. And CPT code 75563 (Cardiac magnetic resonance imaging for morphology and function without contrast material(s), followed by contrast material(s) and further sequences.

With stress imaging) to APC 5573 (Level 3 Imaging with Contrast) with a proposed payment of $733.76. Comment. A few commenters expressed concern with the lack of payment stability for cardiac MRI services, specifically, those described by CPT codes 75557, 75559, 75561, and 75563.

They indicated that the payments for these codes have decreased in the last several years, and prior to CY 2017, the codes were placed in appropriate APCs. Of significant concern are the payment rates for CPT codes 75561 and 75563, which, according to the commenters, are grouped with services that are not Start Printed Page 63550 clinically similar. The commenters stated that CPT code 75561 is unlike CT of the abdomen or pelvis or MRI of the neck and spine in APC 5572, and instead, the code should be placed in APC 5573 with comparable services.

The commenters further added that CPT code 75563 is labor-intensive and should be assigned to APC 5593 (Level 3 Nuclear Medicine and Related Services). Response. As stated in the CY 2021 OPPS final rule with comment period, payments under the OPPS are based on our analysis of the latest available claims and cost report data submitted to Medicare.

We have many years of claims data for CPT codes 75561 and 75563. Based on the geometric mean costs for these codes, we do not believe that CPT codes 75561 and 75563 utilize similar resources as the exams assigned to APC 5573 or APC 5593. We refer readers to the CY 2021 OPPS final rule with comment period for a more detailed discussion of the pricing methodology for CPT codes 75561 and 75563 (85 FR 85959 through 85960).

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign the cardiac MRI codes, specifically, CPT codes 75561 and 75563 to APCs 5572 and 5573. The final CY 2022 OPPS payment rates for these codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 9. Chimeric Antigen Receptor Therapy (CAR-T) (APCs 5694, 9035, 9194, 9391, 9413, and 9422) Chimeric Antigen Receptor T-Cell (CAR T-cell) therapy is a cell-based gene therapy in which T-cells are collected and genetically engineered to express a chimeric antigen receptor that will bind to a certain protein on a patient's cancerous cells.

The CAR T-cells are then administered to the patient to attack certain cancerous cells and the individual is observed for potential serious side effects that would require medical intervention. We refer readers to previous discussions in the OPPS/ASC final rules with comment period for background regarding the specific CAR T-cell products, in both the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231 through 61234) and the CY 2019 OPPS/ASC final rule with comment period (83 FR 58904 through 58908). In addition, for discussion about CY 2022 OPPS payment policies for separately paid drugs with pass-through status expiring or continuing in CY 2022, please see sections V.A.4.

And V.A.5. Of this final rule with comment period. The AMA created four Category III CPT codes that are related to CAR T-cell therapy, effective January 1, 2019.

As discussed in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58904 through 58908), the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231 through 61234), and the CY 2021 OPPS/ASC final rule with comment period (85 FR 85949 through 85951) we finalized our proposal to assign procedures described by CPT codes 0537T, 0538T, and 0539T to status indicator “B” (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS. The procedures described by CPT codes 0537T, 0538T, and 0539T describe the various steps required to collect and prepare the genetically modified T-cells, and Medicare does not generally pay separately for each step used to manufacture a drug or biological. We also finalized that the procedures described by CPT code 0540T would be assigned status indicator “S” (Procedure or Service, Not Discounted when Multiple) and APC 5694 (Level 4 Drug Administration) for CY 2019, CY 2020, and CY 2021 and made no proposal to change the assignment for CY 2022.

Additionally, the National Uniform Billing Committee (NUBC) established CAR T-cell-related revenue codes and a value code to be reportable on Hospital Outpatient Department (HOPD) claims effective for claims received on or after April 1, 2019. We made no specific proposal related to the CAR T-cell preparation codes, as described by CPT codes 0537T, 0538T, 0539T. As listed in Addendum B of the CY 2022 OPPS/ASC proposed rule, we proposed to continue to assign procedures described by these CPT codes, 0537T, 0538T, and 0539T, to status indicator “B” (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS.

We proposed to continue to assign CPT code 0540T to status indicator “S” (Procedure or Service, Not Discounted when Multiple) and APC 5694 (Level IV Drug Administration). Comment. Two commenters opposed our proposal to continue to assign status indicator “B” to CPT codes 0537T, 0538T, and 0539T for CY 2022.

One commenter did not have a specific recommendation, but rather suggested CMS take into consideration the complex process and separately recognize the efforts associated with leukapheresis, cell handling, and processing. This commenter additionally mentioned the administrative burden associated with CAR T-cell therapy administration, among other resources that are specific to the process in which CAR-T is processed, manufactured, and then administered. The other commenter discussed a wide variety of topics related to CAR T-cell therapy and stated that a change in status indicator would be appropriate, with a preference for assigning CPT codes 0537T, 0538T, and 0539T to status indicator “Q1”.

This commenter believed that the procedures these CPT codes describe did not represent the steps required to manufacture the CAR T-cell product, as CMS has stated. Generally, this commenter advocated for a change in status indicator as they believed this change is necessary to allow services furnished to the patient to be eligible for payment and for hospitals to be paid appropriately for the services they provide during each step of the CAR T-cell process. This commenter pointed out that a number of patients may receive the preparation procedures, but then fail to receive the final CAR-T product.

Accordingly, this commenter asked CMS to release new cost centers and to revise the instructions in MLN Matters Article SE19009 in order to no longer allow hospitals to put outpatient cell collection and process charges occurring more than three days prior to an inpatient stay on inpatient claims or to report cell collection and cell processing charges as part of the product charge. Response. We thank the commenters for their feedback.

CMS does not believe that separate or packaged payment under the OPPS is necessary for the procedures described by CPT codes 0537T, 0538T, and 0539T for CY 2022. The procedures described by CPT codes 0537T, 0538T, and 0539T describe the various steps required to collect and prepare the genetically modified T-cells. And Medicare does not generally pay separately for each step used to manufacture a drug or biological product.

Additionally, we note that CAR T-cell therapy is a unique therapy approved as a biologic, with unique preparation procedures, that cannot be directly compared to other therapies or existing CPT codes. We note that the current HCPCS coding for the currently approved CAR T-cell therapies include leukapheresis and dose preparation procedures, as these services are included in the manufacturing of these Start Printed Page 63551 biologicals. Therefore, payment for these services is incorporated into the drug codes.

Please see Table 24 for HCPCS coding for CAR T-cell therapies. We note that although there is no payment associated with CPT codes 0537T, 0538T, and 0539T for reasons stated previously, these codes can still be reported to CMS for tracking purposes. We thank commenters for their feedback related to our guidance contained in MLN Matters Article SE19009.

We are not revising this document at this time as we believe these instructions are consistent with our longstanding policies, but we appreciate the feedback from stakeholders. We believe that the comments in reference to payment for services in settings not payable under the OPPS are outside the scope of the CY 2022 OPPS/ASC proposed rule. Accordingly, we are not revising the existing codes for CAR T-cell therapies to remove leukapheresis and dose preparation procedures, and we are not accepting the recommendations at this time to revise the status indicators for procedures described by CPT codes 0537T, 0538T, and 0539T.

We will continue to evaluate and monitor payment for CAR T-cell therapies. In summary, after consideration of the public comments we received, we are finalizing our proposal to assign status indicator “B” to CPT codes 0537T, 0538T, and 0539T for CY 2022. Additionally, we are continuing our policy from CY 2019 to assign status indicator “S” to CPT code 0540T for CY 2022.

Table 25 below shows the final SI and APC assignments for HCPCS codes 0537T, 0538T, 0539T, and 0540T for CY 2022. For more information on CY 2022 OPPS final status indicators, APC assignments, and payment rates for HCPCS codes, including the CAR T-cell drug codes, we refer readers to Addendum B to this final rule with comment period. In addition, the status indicator definitions can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2022) to this final rule with comment period.

Both Addendum B and D1 are available via the internet on the CMS website. Start Printed Page 63552 10. ClariFix Procedure (APC 5164) For CY 2022, we proposed to continue to assign HCPCS code C9771 (Nasal/sinus endoscopy, cryoablation nasal tissue(s) and/or nerve(s), unilateral or bilateral)) to APC 5164 Level 4 ENT Procedures.

We created HCPCS code C9771 to describe the technology associated with nasal endoscopy with cryoablation of nasal tissues and/or nerves, based on our review of a New Technology APC application submitted by the manufacturer of the technology. HCPCS code C9771 was effective on January 1, 2021. Comment.

We received one comment from the manufacturer requesting that HCPCS code C9771 be reassigned to APC 5165 Level 5 ENT Procedures, which had a proposed CY 2022 OPPS payment rate of $5,218.17. The commenter believed that assigning HCPCS code C9771 to APC 5165 would be more appropriate due to the resource and clinical similarity to the procedures in that APC. Response.

We thank the commenter for their recommendation. After reviewing the comment, and after further evaluation of the procedure, as well as input from our medical advisors, we continue to believe that the current APC assignment for HCPCS code C9771 is appropriate, based on its resource and clinical similarity to the procedures in APC 5164. Therefore, we are not accepting the commenter's recommendation.

We remind hospitals that every year we review the APC assignments for all services and items paid under the OPPS. We will reassess the APC assignment for the procedure described by HCPCS C9771 once we have claims data for the code. We note that the first year that claims data will be available for HCPCS code C9771 will be during the CY 2023 rulemaking cycle.

In summary, after consideration of the public comment, we are finalizing our proposal without modification. The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 11. Dilapan-S Cervical Dilation Procedure (APC 5412) For CY 2022, we proposed to continue to assign CPT code 59200 (Insertion of cervical dilator (for example, laminaria, prostaglandin) (separate procedure)) to APC 5412 (Level 2 Gynecologic Procedures) with a proposed payment rate of $289.30.

Comment. A few commenters requested that CMS reassign CPT code 59200 to APC 5413 (Level 3 Gynecologic Procedures) with a proposed payment rate of $650.81. These commenters state that the cost of Dilapan-S, a cervical softening and dilation device, is not reflected in the payment rate for APC 5412.

Response. For CY 2022, OPPS payments are based on claims submitted between January 1, 2019, through December 31, 2019, that were processed on or before June 30, 2020. Based on our evaluation of the claims data for this final rule with comment period, the geometric mean cost for CPT code 59200 is $456.73, which, while it does fall outside the range of geometric mean costs for APC 5412 ($206.24-$402.55) it does not fall within the range of geometric mean costs for APC 5413 ($516.27-$874.50.) Given that the Dilapan-S device and CPT code 59200 have both existed for a significant period of time, the fact that payment for CPT code 59200 does not reflect the costs of Dilapan-S suggests that this device is not routinely used to furnish CPT code 59200.

Furthermore, based on our review of the clinical characteristics of the procedure and input from our medical advisors, we continue to believe that CPT code 59200 is more clinically similar to the other services in APC 5412. In summary, after consideration of the public comments, we are finalizing our proposal to continue to assign CPT code 59200 to APC 5412. The final CY 2022 OPPS payment rates for these codes can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. Start Printed Page 63553 12.

Ellipsys System Hemodialysis Arteriovenous Fistula (AVF) Procedure (APC 5194) For CY 2022, we proposed to continue to assign HCPCS code G2170 to APC 5194 (Level 4 Endovascular Procedures) with a proposed payment rate of $16,484.41. Comment. Commenters supported this proposal.

Response. We appreciate commenters' support. In summary, after consideration of the public comments, we are finalizing our proposal without modification.

Specifically, we are finalizing our APC proposal to continue to assign HCPCS code G2170 to APC 5194. The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 13. Esophagogastroduodenoscopy (APC 5331) For CY 2022, we proposed to continue to assign CPT code 43240 (Esophagogastroduodenoscopy, flexible, transoral.

With transmural drainage of pseudocyst (includes placement of transmural drainage catheter[s]/stent[s], when performed, and endoscopic uasound, when performed)) to APC 5303 (Level 3 Upper GI Procedures) with a proposed payment rate of $3,160.76. Comment. One commenter requested the reassignment of CPT code 43240 to APC 5331 (Complex GI Procedures) with a proposed payment rate of $5,159.81.

The commenter stated that the geometric mean cost of CPT code 43240 ($5827.94) exceeds the 2 times threshold for APC 5303 and is within the range of the geometric mean costs for APC 5331 ($4,706.48-$6,277.12). Furthermore, the commenter stated that CPT code 43240 is more clinically similar to the services in APC 5331, which includes all other gastroenterology stent placement codes. Response.

Based on our review of the cost data and input from our clinical advisors, we agree that CPT code 43240 would be more appropriately placed in APC 5331 based on its clinical and resource homogeneity to the procedures in the APC. Therefore, we are reassigning CPT code 43240 to APC 5331. In summary, after consideration of the public comments, we are finalizing the reassignment of CPT code 43240 to APC 5331.

The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

14. External Electrocardiogram (ECG) (APCs 5733 and 5734) For CY 2022, we proposed to continue to assign CPT code 93242 (External ECG recording for more than 48 hours up to 7 days by continuous rhythm recording) to APC 5732 (Level 2 Minor Procedures) with a proposed payment rate of $34.72 and CPT code 93243 (External ECG recording for more than 48 hours up to 7 days scanning analysis with report) to APC 5733 (Level 3 Minor Procedures) with a proposed payment rate of $57.12. Comment.

A few commenters suggested that, based on clinical similarity to CPT codes 93225 (External electrocardiographic recording up to 48 hours by continuous rhythm recording and storage. Recording (includes connection, recording, and disconnection)) and 93226 (External electrocardiographic recording up to 48 hours by continuous rhythm recording and storage. Scanning analysis with report), which include payment for a holter monitor, CMS should reassign CPT codes 93242 and 93243 to APC 5734 (Level 4 Minor Procedures) with a proposed payment rate of $115.71.

Commenters further stated that placement in APC 5734 would be consistent with the placement of the predecessor codes, CPT codes 0296T (External electrocardiographic recording for more than 48 hours up to 21 days by continuous rhythm recording and storage. Recording (includes connection and initial recording)) and 0296T (External electrocardiographic recording for more than 48 hours up to 21 days by continuous rhythm recording and storage. Scanning analysis with report).

Response. Based on our review of the clinical characteristics of the procedure and input from our medical advisors, we agree with commenters that resources associated with furnishing CPT codes 93242 and 93243 may not be accurately reflected in their current APC assignment. We do not agree with commenters that both codes should be reassigned to APC 5734.

We note that the predecessor codes, CPT codes 0296T and 0297T, described 21 days of continuous monitoring, while the current codes, CPT codes 93242 and 93243, describe 7 days of monitoring. We believe that CPT code 93242 shares greater clinical and cost similarities to the services in APC 5733 (Level 3 Minor Procedures), which has a proposed payment rate of $57.12. We agree with commenters, however, the CPT code 93243 does share clinical and cost similarities with the other services in APC 5734.

In summary, after consideration of the public comments, we are finalizing our proposal with modification. Specifically, we are assigning CPT code 93242 to APC 5733 and CPT code 93243 to APC 5734. The final CY 2022 OPPS payment rates for these codes can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. 15.

Eye-Movement Analysis Without Spatial Calibration (CPT Code 0615T) The CPT Editorial Panel established a new CPT code 0615T, effective July 1, 2020, to describe eye-movement analysis without spatial calibration that involves the use of the EyeBOX system as an aid in the diagnosis of concussion, also known as mild traumatic brain injury (mTBI). The EyeBOX is intended to measure and analyze eye movements as an aid in the diagnosis of concussion within one week of head injury in patients 5 through 67 years of age in conjunction with a standard neurological assessment of concussion. A negative EyeBOX classification may correspond to eye movement that is consistent with a lack of concussion.

A positive EyeBOX classification corresponds to eye movement that may be present in both patients with or without a concussion. We included this new code in the July quarterly OPPS update CR (Transmittal 10224, Change Request 11814, dated July 15, 2020). Effective July 1, 2020, we assigned CPT code 0615T to APC 5734 (Level 4 Minor Procedures) with status indicator “Q1” (conditionally packaged).

As displayed in the Addendum B to the CY 2022 ASC/OPPS proposed rule, we proposed to continue to assign 0615T to APC 5734 with status indicator “Q1” and a proposed OPPS payment rate of $115.71 for CY 2022. Comment. The manufacturer of the EyeBOX resubmitted their comment again this year because they are still concerned that the lack of adequate, separate reimbursement will strongly discourage hospitals from providing this important technology to their patients.

Start Printed Page 63554 The commenter urged CMS to. (1) Change the APC assignment of CPT code 0615T to APC 5722 (Level 2 Diagnostic Tests and Related Services). And (2) change the status indicator for the service to “S” to allow for separate payment under the OPPS.

The commenter continues to claim that the proposed reimbursement rate for services in APC 5734 is inadequate to pay hospitals appropriately for the costs of furnishing the EyeBOX test. They assert the EyeBOX test costs hospitals at least $200.00 to provide and the clinical characteristics and resources associated with 0615T are more similar to codes in APC 5722 than services in APC 5734. Response.

We note that OPPS payment rates for the CY 2022 final rule are based on claims submitted between January 1, 2019, through December 31, 2019, that were processed on or before June 30, 2020. Because HCPCS code 0615T was established on July 1, 2020, we did not have claims data available for CY 2022 OPPS ratesetting. As far as the resource similarity of CPT code 0615T to other eye-related diagnostic tests that are assigned to APC 5722, such as CPT code 92240 (Indocyanine-green angiography (includes multiframe imaging) with interpretation and report, unilateral or bilateral) and CPT code 92242 (Fluorescein angiography and indocyanine-green angiography (includes multiframe imaging) performed at the same patient encounter with interpretation and report, unilateral or bilateral), the EyeBOX test does not involve an injection.

Therefore, we continue to believe that the resource costs for CPT code 0615T are not comparable to other eye-related diagnostic tests in APC 5722. Updated CY 2019 claims data for this final rule with comment period indicate that the geometric mean cost of APC 5722 is 257.89, while the geometric mean cost of APC 5734 is $109.88. Based on the lack of claims data, we believe that maintaining assignment of APC 5734 for CPT code 0615T for CY 2022 continues to be appropriate.

Depending on the procedures submitted on the claim, and whether the procedure described by CPT code 0615T is performed with any other services on the same day, the procedure described by CPT code 0615T may be paid separately through an APC (in this case APC 5734) or receive packaged payment when accompanying a more significant procedure that is reported on the claim. Based on the nature of this procedure, which may be performed by itself or with other procedures on the same claim, we believe that the continued assignment of status indicator “Q1” is appropriate for the procedure described by CPT code 0615T. As we do every year, we will reevaluate the APC assignment for CPT code 0615T for the next rulemaking cycle.

We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS. We are finalizing our proposal, without modification, to continue to assign CPT code 0615T to status indicator “Q1” and APC 5734 for CY 2022. The final CY 2022 payment rate for the CPT code can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).

16. FemSelect Enplace Procedure (APC 5415) For CY 2022, we proposed to continue to assign HCPCS code C9778 (Colpopexy, vaginal. Minimally invasive extra-peritoneal approach (sacrospinous)) to APC 5414 Level 4 Gynecologic Procedures.

We created HCPCS code C9778 to describe the technology associated with vaginal colpopexy by sacrospinous ligament fixation, based on our review of a New Technology APC application submitted by the manufacturer of the technology. HCPCS code C9778 was effective on July 1, 2021. Comment.

We received many comments from providers and the manufacturer requesting that HCPCS code C9778 be reassigned to APC 5415 Level 5 Gynecologic Procedures, which had a proposed CY 2022 OPPS payment rate of $4,525.49. Commenters stated that the resource cost exceeded the payment provided by APC 5414, and that APC 5415 would be a more appropriate APC assignment. Response.

We thank the commenters for their recommendations. Based on input from our medical advisors, further evaluation of the resources to perform the surgery, and its similarity to existing procedures, we believe that HCPCS code C9778 should be reassigned to APC 5415. Based on our assessment, we believe that the service described by HCPCS code C9778 shares similar resource and clinical characteristics to the procedures included in APC 5415.

In summary, after consideration of the public comments, we are reassigning HCPCS code C9778 to APC 5415 Level 5 Gynecologic Procedures for CY 2022, as shown in Table 26 below. The final CY 2022 OPPS payment rates for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. As we do every year, we will reevaluate the APC assignment for HCPCS code C9778 for the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS.

The first year that claims data will be available for HCPCS code C9778 will be during the CY 2023 rulemaking cycle. Start Printed Page 63555 17. Hypoglossal Nerve Neurostimulator (HGNS) Procedure (APC 5465) Effective January 1, 2022, the AMA's CPT Editorial Panel created a new code to describe open implantation of hypoglossal nerve neurostimulator array.

For CY 2022, we proposed to assign CPT code 64582 to APC 5465 (Level 5 Neurostimulator and Related Procedures) with a proposed payment rate of $30,208.51. We note that CPT code 64582 was listed as placeholder code 645X1 in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. Comment.

One commenter expressed support for the proposed APC assignment. Response. We thank the commenter for their support.

In summary, after consideration of the public comments, we are finalizing our proposal without modification. Specifically, we are finalizing our APC proposal to assign CPT code 64582 to APC 5465. The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. 18.

IDx-DR. Artificial Intelligence System To Detect Diabetic Retinopathy (APC 5733) For CY 2022, we proposed to continue to assign CPT code 92229 (Imaging of retina for detection or monitoring of disease. With point-of care automated analysis with diagnostic report.

Unilateral or bilateral) to APC 5733 (Level 3 Minor Procedures) with a proposed payment rate of $57.12. Comment. Some commenters disagreed with the proposed payment amount and requested a revision in the assignment from APC 5733 to APC 5734 (Level 4 Minor Procedures) with a proposed payment rate of $115.71.

The commenters reported that the service described by CPT code 92229 is similar to the technical components described by existing CPT code 92250 (Fundus photography with interpretation and report), which was proposed for assignment to APC 5734. They stated that providers previously billed for this service on an interim basis under CPT code 92250. The commenters indicated that APC 5734, which is the APC assigned to the predecessor CPT code 92250, is the more appropriate assignment for CPT code 92229 until sufficient Medicare claims data can be collected by CMS to either retain that assignment or reassign to another APC.

One commenter expressed support for our proposal to continue APC assignment of CPT code 92229 to APC 5733. Response. As discussed in the CY 2021 OPPS final rule with comment period (85 FR 85962), we do not believe that CPT code 92250, which the commenters reported to be the predecessor code, is similar to the IDx-DR test.

Otherwise, the placement of the new IDx-DR code would have been close to CPT code 92250. As the commenter did not provide any additional clinical information or cost data, we continue to believe that CPT code 92229 should be assigned to APC 5733. In summary, after consideration of the public comments, we are finalizing our proposal without modification.

Specifically, we are continuing to assign CPT code 92229 to APC 5733. The final CY 2022 payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 19. Intravascular Lithotripsy (IVL) Procedure (APCs 5193 and 5194) As explained in the CY 2021 OPPS/ASC final rule with comment period, we finalized our proposal to assign HCPCS codes C9764 (Revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal.

With intravascular lithotripsy, includes angioplasty within the same vessel(s), when performed) and C9765 (Revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal. With intravascular lithotripsy, and transluminal stent placement(s), includes angioplasty within the same vessel(s), when performed) to APC 5192 and C9766 (Revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal. With intravascular lithotripsy and atherectomy, includes angioplasty within the same vessel(s), when performed) to APC 5193 (85 FR 85975 through 85976).

For a detailed discussion on the APC assignments for HCPCS code(s) describing the IVL procedures, we refer readers to the CY 2021 OPPS/ASC final rule with comment period (85 FR 85975 through 85976). At the August 23, 2021 meeting, the HOP Panel recommended that CMS reassign HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766 to APC 5194, as long as the cost of the IVL device is within 10 percent of other devices currently available. Comment.

Several commenters, including the manufacturer, disagreed with CMS's proposed CY 2022 APC assignments for the IVL service described by HCPCS codes C9764, C9765, and C9766. They argued that, for new procedures that did not have claims in the CY 2019 claims data, current claims data should be used when reviewing for APC placement. The commenter also noted the CY 2020 claims data provided evidence to support their argument that the service described by HCPCS code C9764 is not adequately reimbursed under APC 5192, and recommended reassignment to APC 5193 (Level 3 Endovascular Procedures).

Similarly, the commenters indicated that assignment of HCPCS codes C9765 and C9766 to APC 5193 does not provide adequate payment for the service based on 2020 claims data and that those codes should instead be placed in APC 5194 (Level 4 Endovascular Procedures). Response. In the CY 2022 OPPS/ASC proposed rule, we proposed to use 2019 claims data in the OPPS due to the effects of the PHE on the CY 2020 claims data.

As the commenter noted, claims data are not available for HCPCS codes C9764 through C9766 in the CY 2019 claims data, only in CY 2020. As discussed in more detail in section X.E. Of this final rule with comment period, we are not using CY 2020 claims data for ratesetting because of data integrity concerns with respect to the broader OPPS.

However, based on stakeholder request, we are reviewing the CY 2020 claims data for determining potential APC assignments in cases where CY 2019 claims data did not include any information on new procedures. Under what would otherwise be the standard ratesetting process, we would typically use CY 2020 claims data submitted for services furnished in CY 2020, that were processed on or before June 30, 2021. Our analysis of that CY 2020 claims data supports reassigning CPT code C9764 to APC 5193 and CPT codes C9765 and C9766 to APC 5194, based on their estimated geometric mean costs.

Specifically, our claims data show a geometric mean cost of approximately $11,442.47 for HCPCS code C9764 based on 253 single claims, which is comparable to the geometric mean cost of about $10,258.49 for APC 5193, rather than the geometric mean cost of approximately $5,061.89 for APC 5192. The geometric mean cost of approximately $17,372.02 for HCPCS code C9765 and the geometric mean Start Printed Page 63556 cost of approximately $19,285.11 for HCPCS code C9766 is also consistent with the costs for significant services in APC 5194, which range between about $10,670.16 (for HCPCS code C9754) to $24,311.10 (for HCPCS code C9767). Based on our analysis of the latest available CY 2020 claims data, we believe that HCPCS codes C9765 and C9766 are more appropriately assigned to APC 5194.

In summary, after consideration of the public comments, we are assigning HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766 to APC 5194. Table 27 below lists the three HCPCS codes for the IVL procedure and their APC and SI assignments for CY 2022. The final CY 2022 OPPS payment rates for the codes can be found in Addendum B of this final rule with comment period.

Addendum B is available via the internet on the CMS website. 20. Lixelle Apheresis Lixelle β2-microglobulin Apheresis Column is indicated for use in the treatment of dialysis‐related amyloidosis (DRA), a disease that affects people with end-stage renal disease (ESRD).

DRA is a metabolic disorder from the failure of the kidney to filter and remove β2-microglobulin, typically from chronic hemodialysis (typically 5 years or longer). The Lixelle device is used in an apheresis procedure that selectively removes β2-microglobulin from circulating blood and used pursuant to a physician prescription in conjunction with hemodialysis. It is intended to be used at each hemodialysis session (that is, frequency of treatment is expected to be 3 times per week).

In March 2015, FDA approved LIXELLE® as a Class III Humanitarian Use Device (HUD) with an approved Humanitarian Device Exemption (HDE). There are currently no specific HCPCS or CPT code that represent the Lixelle service. Comment.

Two commenters, including the manufacturer of Lixelle apheresis column, requested payment for the procedure under the OPPS. One commenter stated that Lixelle is the only device available for the treatment DRA and that all DRA patients are Medicare beneficiaries. The commenter stated that they have been unable to complete the FDA-required post-approval study as a condition of the HDE, due to difficulty in securing patient enrollment because of lack of CMS payment for the Lixelle apheresis procedure.

The commenter stated that CMS should rely upon the HUD program requirements and post-approval clinical studies mandated and approved by FDA for coverage and payment of Lixelle apheresis in the OPPS. The commenter acknowledged that Medicare payment under the ESRD PPS is not possible at this time but stated that payment under the OPPS may be more clinically appropriate. The commenter requested that CMS provide payment under the OPPS because the Lixelle apheresis is not eligible for Medicare payment when furnished in the dialysis facility at this time, and therefore, these treatments (even though technically not “scheduled” or “non-routine”) should be eligible for payment when furnished in the hospital outpatient department under the OPPS.

Specifically, the commenter requested that CMS provide payment under the OPPS using the following pathways. (1) By paying for the apheresis procedure used with the Lixelle device through CPT code 36516 (Therapeutic apheresis with extracorporeal immunoadsorption, selective adsorption or selective fiation and plasma reinfusion), proposed to be assigned to APC 5243 (Level 3 Blood Product Exchange and Related Services) for CY 2022, and requiring the use of a modifier or add-on code when the Lixelle apheresis procedure is billed to reduce the payment for the procedure to the payment rate for APC 5242 (Level 2 Blood Product Exchange and Related Services). (2) by allowing payment for Start Printed Page 63557 the dialysis performed as part of Lixelle apheresis procedure through HCPCS code G0257 (Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility), which is assigned to APC 5401 (Dialysis) for CY 2022, and requiring the use of a modifier or add-on code to provide additional payment beyond that provided for APC 5401.

Or (3) by creating a HCPCS C code or G code for the Lixelle apheresis procedure and assigning the code to APC 5242 (Level 2 Blood Product Exchange and Related Services). Response. We appreciate the commenters' input on the Lixelle device and will consider their recommendations for future rulemaking.

21. Low Dose Computed Tomography (LDCT) (APC 5522) For CY 2022, we proposed to continue to assign CPT code 71271 (Computed tomography, thorax, low dose for lung cancer screening, without contrast material(s)) to APC 5521 (Level 1 Imaging without Contrast) with a proposed payment rate of $83.01. Comment.

Several commenters stated that CPT code 71271 should be reassigned to APC 5523 (Level 3 Imaging without Contrast) with a proposed payment rate of $236.14. These commenters stated that CPT code 71271 should not be in a lower APC than CPT code 71270 (Computed tomography, thorax. Without contrast material, followed by contrast material(s) and further sections) given that CPT code 71271 has additional resource costs, such as greater clinical staff time.

The commenter noted that we proposed to assign CPT code 71270 to APC 5571 (Level 1 Imaging With Contrast) with a payment rate of $183.30. Response. The predecessor code to CPT code 71271 was HCPCS code G0297 (Low dose ct (ldct) scan for lung cancer screening) which was assigned to APC 5521.

However, in the CY 2021 Physician Fee Schedule final rule, we stated that it was a longstanding CMS policy that the payment for HCPCS code G0297 match the payment rate for CPT code 71250, which we proposed to assign to APC 5522 (Level 2 Imaging without Contrast) with a payment rate of $111.73, as the services are almost identical in terms of clinical similarity and resource costs (85 FR 84621 through 84622). In the interests of preserving the relationship between the predecessor code and CPT code 71250, and based on our review of the clinical characteristics of the procedure and input from our medical advisors, we believe that CPT code 71271 should be reassigned to APC 5522 (Level 2 Imaging without Contrast). We believe that assignment to APC 5522 for both CPT codes 71250 and 71271 accurately reflects the resources associated with performing this service.

In summary, after consideration of the public comments, we are finalizing our proposal, with modification. Specifically, we are reassigning CPT code 71271 to APC 5522. The final CY 2022 payment rate for this code can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 to this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. 22.

Magnetic Resonance-Guided Focused Uasound Surgery (MRgFUS) (APC 5463) CPT code 0398T (Magnetic resonance image guided high intensity focused uasound (mrgfus), stereotactic ablation lesion, intracranial for movement disorder including stereotactic navigation and frame placement when performed) describes MRgFUS procedures for the treatment of essential tremor. We have identified 175 paid claims for CY 2019 with a geometric mean of $12,334.67. CPT code 0398T had been assigned to a New Technology APC for several years.

Then, in CY 2021, we reorganized the Neurostimulator and Related Procedures APCs to add a new Level 3 category (APC 5463) that had a geometric mean of approximately $10,950. While the payment rate for APC 5463 was somewhat lower than the geometric mean of CPT code 0398T, it was a reasonable estimate of the cost of MRgFUS for the treatment of essential tremor in a prospective payment system where some services receive more payment than their geometric mean cost, while other services receive less payment than their geometric mean cost. For CY 2022, we proposed continuing to assign CPT code 0398T to APC 5463 with a payment rate of approximately $10,956.33.

Comment. One commenter, the manufacturer, requests a higher paying APC for CPT code 0398T because the current payment rate for APC 5463 (Level 3 Neurostimulator and Related Procedures) of approximately $10,956.33 is substantially lower than the geometric mean cost of the service. According to the commenter, the geometric mean of CPT code 0398T has steadily increased from $10,136 in CY 2018 to $13,907 in CY 2020.

Response. We appreciate the commenter's concerns about the level of payment for CPT code 0398T. However, the OPPS is a prospective payment system and it is expected that any individual service may be paid more or less than the geometric mean cost of the service.

The current payment difference between the geometric mean cost of CPT code 0398T and the payment rate for APC 5463 is $1,153.66 ($12,109.99 minus $10,956.33) with the payment rate of APC 5463 equal to $10,956.33. That means there is no violation of the two-times rule to assign CPT code 0398T to APC 5463, and the service is assigned to an APC that covers around 90 percent of the geometric mean cost of the service. Also, CPT code 0398T is grouped with other neurostimulator and related procedures that have clinical and resource similarity to the MRgFUS.

After our review of the public comments, we have decided to implement our proposal without modification to continue to assign CPT code 0398T to APC 5463 (Level 3 Neurostimulator and Related Procedures). The final CY 2022 payment rate for CPT code 0398T can be found in Addendum B to this final rule with comment period, which is available via the internet on the CMS website. 23.

Medical Physics Dose (APC 5612) For CY 2022, we proposed to continue to assign CPT code 76145 (Medical physics dose evaluation for radiation exposure that exceeds institutional review threshold, including report (medical physicist/dosimetrist)) in APC 5611 (Level 1 Therapeutic Radiation Treatment Preparation) with a proposed payment rate of $130.19. Comment. Several commenters disagreed with the assignment to APC 5611 and requested a reassignment to APC 5724 (Level 4 Diagnostic Tests and Related Services) with a proposed payment rate of $943.96.

The commenters stated that the services assigned to APC 5724 require similar resource use as CPT code 76145. Commenters also stated that APC 5724 contains a range of services that are clinically similar to CPT 76145. Response.

Given that we have no claims data for this service, and that APC 5724 does not contain any radiation oncology services, we do not believe that APC 5724 is an appropriate assignment on the basis of clinical similarity or similar costs. However, based on our review of the service associated with CPT code 76145 and input from our medical advisors, we believe that APC code 5612, with a proposed payment rate of $347.44, may be a more appropriate assignment for Start Printed Page 63558 the code. APC 5612 contains CPT code 77307 (Teletherapy isodose plan.

Complex (multiple treatment areas, tangential ports, the use of wedges, blocking, rotational beam, or special beam considerations), includes basic dosimetry calculation(s)), which is clinically similar to CPT code 76145 in that CPT code 77307 describes the work of a medical physicist and dosimetrist. Once we have claims data, we will review the APC assignment and determine whether a change is necessary. We note that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS.

In summary, after consideration of the public comments, we are reassigning CPT code 76145 to APC 5612. The final CY 2022 payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 to this final rule with comment period for the SI meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 24. MiVu Mucosal Integrity Testing System (APC 5303) For CY 2022, we proposed to continue to assign HCPCS code C9777 (Esophageal mucosal integrity testing by electrical impedance, transoral (list separately in addition to code for primary procedure)) to OPPS status indicator “N,” to indicate that the payment for HCPCS code C9777 is packaged into the payment for the primary procedure.

We created HCPCS code C9777 to describe mucosal integrity testing by electrical impedance, based on our review of a New Technology APC application submitted by the manufacturer of the technology. HCPCS code C9777 was effective on April 1, 2021. Based on the application submitted to CMS and our initial review of the procedure, we believed the MiVu test to be performed with another primary procedure on the same day.

Because the MiVu test is always performed as an add-on test to either an esophagoscopy or esophagogastroduodenoscopy, we established a C-code to appropriately describe the add-on component. Under the regulation at 42 CFR 419.2, payment for add-on codes is packaged or conditionally packaged into the payment for the related procedures or services under the OPPS. Comment.

We received several comments from providers and the manufacturer requesting that HCPCS code C9777 be separately reimbursed and reassigned to APC 5303 Level 3 Upper GI Procedures, which had a proposed CY 2022 OPPS payment rate of $3,160.76. Commenters argued that MiVuTM should be considered the primary procedure, not the esophagoscopy or esophagogastroduodenoscopy and that based on the cost of the device and procedure, the appropriate APC assignment is APC 5303. Response.

We thank the commenters for their recommendations. After further evaluation of procedures performed in conjunction with the MiVu test on the same day, review of the comments, and input from our medical advisors, we believe that modifying the descriptor for the C-code is appropriate. We believe that revising the long descriptor to describe the service of performing both the MiVu test with either an esophagoscopy or esophagogastroduodenoscopy on the same day would ensure accurate tracking and reporting of the service and minimize inappropriate reporting of the services.

Consequently, effective January 1, 2022, we are revising the descriptor for HCPCS code C9777 to read “Esophageal mucosal integrity testing by electrical impedance, transoral, includes esophagoscopy or esophagogastroduodenoscopy,” to accurately reflect how the procedure is currently performed in the hospital outpatient setting. With the change in the descriptor for HCPCS code C9777, we are assigning HCPCS code C9777 to APC 5303 based on its resource and clinical homogeneity to the other procedures in the APC. We remind hospitals that because HCPCS code C9777 describes both the MiVu test performed with either an esophagoscopy or esophagogastroduodenoscopy on the same day, HOPDs should not report separate HCPCS codes for the esophagoscopy or esophagogastroduodenoscopy.

In summary, after consideration of the public comments, we are modifying the long descriptor for HCPCS code C9777, as shown in Table 28 below, and reassigning HCPCS code C9777 to APC 5303 (Level 3 Upper GI Procedures) for CY 2022. The final CY 2022 OPPS payment rates for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. As we do every year, we will reevaluate the APC assignment for HCPCS code C9777 for the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS.

Start Printed Page 63559 25. Musculoskeletal Procedures (APCs 5111 Through 5116) Prior to the CY 2016 OPPS, payment for musculoskeletal procedures was primarily divided according to anatomy and the type of musculoskeletal procedure. As part of the CY 2016 reorganization to better structure the OPPS payments to utilize prospective payment packages, we consolidated these individual APCs so that they became a general Musculoskeletal APC series (80 FR 70397 through 70398).

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59300), we continued to apply a six-level structure for the Musculoskeletal APCs because doing so provided an appropriate distinction for resource costs at each level and provided clinical homogeneity. However, we indicated that we would continue to review the structure of these APCs to determine whether additional granularity would be necessary. In the CY 2019 OPPS proposed rule (83 FR 37096), we recognized that commenters had previously expressed concerns regarding the granularity of the current APC levels and, therefore, requested comment on the establishment of additional levels.

Specifically, we solicited comments on the creation of a new APC level between the current Level 5 and Level 6 within the Musculoskeletal APC series. While some commenters suggested APC reconfigurations and requests for change to APC assignments, many commenters requested that we maintain the current six-level structure and continue to monitor the claims data as they become available. Therefore, in the CY 2019 OPPS/ASC final rule with comment period, we maintained the six-level APC structure for the Musculoskeletal Procedures APCs (83 FR 58920 through 58921).

Based on the claims data available for the CY 2022 OPPS/ASC proposed rule, we continued to believe that the six-level APC structure for the Musculoskeletal Procedures APC series is appropriate and we proposed to maintain the it for the CY 2022 OPPS update. Comment. One commenter requested that we assign CPT code 28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed.

With first metatarsal and medial cuneiform joint arthrodesis, any method) and CPT code 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint) from APC 5114 to APC 5115. They noted that if these codes were considered cost significant for purposes of the 2 times rule, then these codes would cause 2 times rule violations in APC 5114. Response.

We appreciate the commenter's recommendation regarding the APC assignment of CPT 28297 and 28740. CPT codes 28297 and 28740 are currently assigned to APC 5114 (Level 4 Musculoskeletal Procedures). We note that APC 5114 does not currently have a 2 times rule violation, under the requirements for cost significance as described in section III.B.2.

Of this final rule with comment period. In addition, we have reviewed the codes' geometric mean cost in both the CY 2019 and CY 2020 claims data available as well as their clinical similarity to other codes within APC 5114 and believe that their current APC assignment continues to be appropriate. Comment.

One commenter supported the proposed assignment of HCPCS code 0627T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar. First level) and HCPCS code 0629T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with ct guidance, lumbar. First level) to APC 5115.

Another commenter supported the proposed assignment of HCPCS code 0627T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar. First level) and 0630T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with ct guidance, lumbar. Each additional level (list separately in addition to code for primary procedure)) to APC 5115.

Response. We appreciate the commenters' support. We note that that the availability of these codes does not mean that the product(s) are legally marketed under the Federal Food, Drug and Cosmetic Act and/or the Public Health Service Act.

Comment. A commenter requested that we allow an exception from the broader proposed OPPS ratesetting process to use the CY 2020 claims data for ratesetting for the musculoskeletal APC series (5111 through 5116). Two commenters also requested that we allow an exception for the use of CY 2020 claims data for CPT code 27130 (Arthroplasty, acetabular and proximal femoral prosthetic replacement (total hip arthroplasty), with or without autograft or allograft), which was removed from the IPO list beginning in CY 2020.

Response. We appreciate the commenters' concerns regarding available data and its use in OPPS ratesetting. However, we note that widespread use of claims data from two different years to set rates for a items and services in a single year could distort the OPPS relative payment weights, which we believe would be inappropriate and unnecessary when claims data from a single year—in this case, 2019—are largely available for ratesetting and using these data generally to set CY 2022 rates allows us to avoid this sort of distortion.

As a result, we are establishing a final policy of using CY 2019 claims for establishing the OPPS relative weights but allowing limited use of CY 2020 claims for informational purposes where CY 2019 claims are not otherwise available. For additional detail regarding the use of CY 2019 claims in CY 2022 OPPS ratesetting, please see section X.E. Of this final rule with comment period.

After consideration of the comments, we are finalizing the proposed assignment of CPT codes 28297 and 28740 to APC 5114, and the proposed assignment of CPT codes 0627T, 0629T and 0630T to APC 5115 for the CY 2022 OPPS. 26. Non-Highly Enriched Uranium (Non-HEU) Sources (APC 1442) 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 Tc99m 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 Start Printed Page 63560 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).

Comment. Multiple commenters requested that we increase the payment rate for HCPCS add-on code Q9969 from $10 and to make the add-on code permanent. The commenters noted that we have not increased the payment rate for Q9969 since the code was established in CY 2013, and one of the commenters believes that we have made only token efforts to promote the use of non-HEU produced Mo-99, the parent nuclide to Tc-99m.

One of the commenters supported a rate increase to Q9969 to fully reflect the additional cost to providers to obtain non-HEU medical isotopes. The same commenter suggested that if such a cost-analysis could not be done for CY 2022, we should increase the payment for Q9969 by the annual market basket increase for CY 2022 along with a one-time increase to reflect prior increases to the market basket between CY 2013 and CY 2021. Alternatively, the commenter suggested the payment rate could be increased by the change in the drug cost threshold packaging amount between CY 2013 and CY 2022.

Response. We appreciate the information we received from the commenters supporting an increase to the payment rate of $10 for HCPCS code Q9969, especially since the conversion to non-HEU sources for medical isotopes has not been completed by all producers. As discussed in the CY 2013 OPPS/ASC final rule with comment period, we did not finalize a policy to use the usual OPPS methodologies to update the non-HEU add-on payment (77 FR 68317).

The purpose of the additional payment is limited to mitigating any adverse impact of transitioning to non-HEU sources, and we believe the add-on is appropriate at this time. Comment. Multiple commenters supported the current payment amount for HCPCS code Q9969, and they requested that we finalize our proposed payment rate for the add-on.

Response. We appreciate the support of the commenters for the proposed payment rate for HCPCS code Q9969. After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue the policy of providing an additional $10 payment for radioisotopes produced by non-HEU sources for CY 2022 as represented by HCPCS code Q9969.

27. Nuclear Medicine Services. Single-Photon Emission Computed Tomography (SPECT) Studies (APC 5593) For CY 2022, we proposed to continue to assign CPT code 78803 (Radiopharmaceutical localization of tumor, inflammatory process or distribution of radiopharmaceutical agent(s) (includes vascular flow and blood pool imaging, when performed).

Tomographic (spect), single area (eg, head, neck, chest, pelvis), single day imaging)) to APC 5593 (Level 3 Nuclear Medicine and Related Services) with a proposed payment rate of $1,340.84. Comment. One commenter expressed support for the proposed APC assignment.

Response. We thank the commenter for their support. We note that, based on our analysis of the claims data for this CY 2022 OPPS/ASC final rule with comment period, our data reveals a geometric mean cost of about $529.69 based on 4157 single claims (out of 9451 total claims), which is in line with the geometric mean cost of $1,273.36 for APC 5593.

In summary, after consideration of the public comments, we are finalizing our proposal without modification to assign CPT code 78803 to APC 5593. The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS.

Both Addendum B and D1 are available via the internet on the CMS website. 28. Pathogen Test(s) for Platelets (APC 5733) For the July 2017 update, the HCPCS Workgroup established HCPCS code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017.

This new code and the OPPS APC assignment was announced in the July 2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017). Subsequently, HCPCS code Q9987 was deleted on December 31, 2017, and replaced with permanent HCPCS code P9100 (Pathogen(s) test for platelets) effective January 1, 2018. Each of the HCPCS codes were assigned to New Technology APCs for the period of July 2017 through December 2020 with payment rates for the service ranging between $25.50 and $35.50.

Starting in January 2021, we decided to assign P9100 to APC 5732 (Level 2 Minor Procedures) with a payment rate of approximately $33. From July 2017 until 2021, only one type of pathogen test for platelets, rapid bacterial testing, was described by HCPCS code P9100. The estimated cost for a rapid bacterial test was around $30, which has been confirmed through claims data.

Starting in 2021, a new type of pathogen test for platelets, culture-based bacterial testing, using large volume delayed sampling (LVDS), was introduced. This culture-based method is used to test for bacterial contamination of leukocyte-reduced apheresis platelets and leukocyte-reduced whole blood platelet concentrates. We do not have claims data describing the cost of the LVDS test.

For CY 2022, we proposed to assign HCPCS code P9100 to APC 5732 (Level 2 Minor Procedures with a payment rate of approximately $33, which is the same APC assignment for HCPCS code P9100 as in CY 2021. Comment. Two commenters requested we increase the payment rate for HCPCS code P9100 by moving the service from APC 5732 (Level 2 Minor Procedures) with payment rate of $32.98 to APC 5733 (Level 3 Minor Procedures) with a payment rate of $54.24.

The commenters claim that the cost of the LVDS test is either $75 or $83, depending on which manufacturer's test is used, which is substantially higher than the approximately $30 cost of the rapid bacterial test for platelets. The commenters believe that the proposed payment rate of $32.98 for APC 5732 is too low to adequately compensate hospitals for the share of pathogen tests for platelets using the more expensive culture-based test, using LVDS. Commenters believed assigning HCPCS code P9100 to APC 5733 with a payment rate of $54.24 would better reflect the mixture of costs between culture-based platelet tests using LVDS and rapid bacterial tests.

Response. We agree with the commenters that the payment rate for HCPCS code P9100 should better reflect the resource cost of the anticipated mixture of rapid bacterial platelet tests and culture-based platelet tests, using LVDS, that will be used in CY 2022 to test for bacterial contamination in platelets. Therefore, we support the suggestion of the commenters to reassign HCPCS code P9100 to APC 5733 (Level 3 Minor Procedures) with a payment rate of $54.24.

After reviewing the public comments, we have decided to modify our proposal and reassign HCPCS code P9100 from APC 5732 (Level 2 Minor Procedures) to APC 5733 (Level 3 Minor Procedures) for CY 2022. The final CY 2022 payment rate for HCPCS code P9100 can be found in Addendum B to this CY 2022 OPPS/ASC final rule with comment period Start Printed Page 63561 which is available via the internet on the CMS website. 29.

Pulmonary Rehabilitation (APC 5733) For CY 2022, the AMA's CPT Editorial Panel created two new codes describing pulmonary rehabilitation services and requested that CMS delete HCPCS code G0424 (Pulmonary rehabilitation, including exercise (includes monitoring), one hour, per session, up to two sessions per day). We proposed to assign CPT code 94625 (Physician or other qualified health care professional services for outpatient pulmonary rehabilitation. Without continuous oximetry monitoring (per session)) and CPT code 94626 (Physician or other qualified health care professional services for outpatient pulmonary rehabilitation.

With continuous oximetry monitoring (per session)) to APC 5733 (Level 3 Minor Procedures) with a proposed payment rate of $57.12. We note that CPT codes 94625 and 94626 were listed as placeholder codes 946X1 and 946X2, respectively, in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. Comment.

Several commenters disagreed with the proposed APC assignment and requested that CMS reassign CPT codes 94625 and 94626 to either APC 5721 (Level 1 Diagnostic Tests and Related Services) with a proposed payment rate of $143.21 or to APC 5771 (Cardiac Rehabilitation) with a proposed payment rate of $119.09. These commenters stated that these APCs better reflected the clinical similarity and costs associated with furnishing these services. Response.

CPT codes 94625 and 94626 do not describe diagnostic tests and so are not clinically similar to the other services in APC 5721. While clinically similar to cardiac rehabilitation services, predecessor HCPCS code G0424 has a geometric mean cost of $45.63 based on 198,132 single claims (out of 199,356 total claims), which is significantly lower than the geometric mean cost of $113.12 for the services in APC 5771. Based on our analysis, we believe that assignment of CPT codes 94625 and 94626 to APC 5733 is appropriate because their costs are consistent with the cost data of the predecessor code.

We note that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS. We will consider whether the current APC structure adequately reflects the clinical similarities and costs associated with pulmonary rehabilitation services in future rulemaking. In summary, after consideration of the public comments, we are finalizing our proposal without modification to assign CPT codes 94625 and 94626 to APC 5733.

The final CY 2022 OPPS payment rates for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

30. Sclerotherapy (APC 5054) For CY 2022, we proposed to continue assignment of both CPT codes 36465 (Injection of non-compounded foam sclerosant with uasound compression maneuvers to guide dispersion of the injectate, inclusive of all imaging guidance and monitoring. Single incompetent extremity truncal vein (for example, great saphenous vein, accessory saphenous vein)) and CPT code 36466 (Injection of non-compounded foam sclerosant with uasound compression maneuvers to guide dispersion of the injectate, inclusive of all imaging guidance and monitoring.

Multiple incompetent truncal veins (for example, great saphenous vein, accessory saphenous vein), same leg) to APC 5054 (Level 4 Skin Procedures) with a proposed payment rate of $1,759.21. Comment. One commenter disagreed with the proposed assignment of the procedures described by CPT codes 36465 and 36466 to APC 5054 and requested a reassignment to APC 5183 (Level 3 Vascular Procedures), which had a proposed payment rate of $2,937.76.

The commenter stated that the per-procedure cost for the Varithena foam sclerosant used in the procedure is $1,054. The commenter stated that APC 5183 is more clinically appropriate and reflects the resources required to perform the procedure. Specifically, the commenter indicated that the procedures described by CPT codes 36465 and 36466 share similar clinical and resource characteristics to the following surgical procedures that are assigned to APC 5183.

CPT code 36473 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, mechanochemical. First vein treated). CPT code 36475 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, radiofrequency.

First vein treated). And CPT code 36478 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, laser. First vein treated).

The commenter also stated that the proposed geometric mean cost of $1,567.45 for 36465 would not be the lowest cost procedure if placed in APC 5183 and that the geometric mean costs of CPT code 36466 would be better aligned with APC 5183. Response. Based on input from our clinical advisors, we believe that the procedures described by CPT codes 36465 and 36466 are clinically similar to the procedures assigned to APC 5054.

We do not believe that the resources used for the procedures described by CPT codes 36465 and 36466 are comparable to the procedures described by CPT codes 36473, 36475, and 36478, which are assigned to APC 5183. We also note that the proposed geometric mean cost of $2,314.25 for CPT code 36466 is greater than the other codes with significant volume in APC 5183 and above the highest geometric mean cost of codes with significant volume in the next lower APC 5182 (Level 2 Vascular Procedures). Consequently, we believe that APC 5054 appropriately reflects the resources and clinical characteristics associated with the procedures described by CPT codes 36465 and 36466.

We note that the geometric mean cost for APC 5054 is approximately $1,668.97, which exceeds the cost of the Varithena foam sclerosant ($1,054, as reported by the commenter) used in the procedure. We also note that the geometric mean costs for CPT codes 36465 and 36466 are well within the range of significant costs associated with APC 5054 ($1,402.75-$2,752.68). Therefore, after consideration of the public comment received, we are finalizing our proposal without modification for assignment of the procedures described by CPT codes 36465 and 36466 to APC 5054.

The final CY 2022 OPPS payment rates for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

31. Stromal Vascular Fraction (SVF) Therapy For CY 2022, we proposed to continue assignment of CPT codes 0565T (Autologous cellular implant derived from adipose tissue for the treatment of osteoarthritis of the knees. Tissue harvesting and cellular implant creation) and 0566T (Autologous Start Printed Page 63562 cellular implant derived from adipose tissue for the treatment of osteoarthritis of the knees.

Injection of cellular implant into knee joint including uasound guidance, unilateral) to status indicator “E1”, indicating that these services are not paid by Medicare when submitted on outpatient claims. Comment. One commenter supported this proposal and indicated that adipose-derived stromal vascular fraction (SVF) therapy for osteoarthritis is an unproven treatment.

The commenter stated that FDA has issued several warnings about unproven cellular therapies and regenerative medicines since they offer no proven clinical benefits and may harm patients. The commenter further reported there is no indication for which SVF has been proven to be safe and effective in well-controlled clinical trials. To eliminate abuse by businesses seeking to profit from unproven treatments, the commenter suggested not paying for SVF therapy since unproven therapies create economic burdens on health systems and patients.

Response. We thank the commenter for their support. In summary, after consideration of the public comment, we are finalizing our proposal without modification to continue assignment of CPT codes 0565T and 0566T to status indicator “E1”.

We refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addendum D1 is available via the internet on the CMS website. 32.

Synthetic Resorbable Skin Substitute The CY 2014 OPPS/ASC final rule with comment period describes skin substitute products as “. . .

A category of products that are most commonly used in outpatient settings for the treatment of diabetic foot ulcers and venous leg ulcers. . .

[T]hese products do not actually function like human skin that is grafted onto a wound. They are not a substitute for a skin graft. Instead, these products are applied to wounds to aid wound healing and through various mechanisms of action that stimulate the host to regenerate lost tissue.” (78 FR 74930 through 74931).

The CY 2014 OPPS/ASC final rule with comment period also described skin substitutes as “. . .

A class of products that we treat as biologicals. . .” and mentioned that prior to CY 2014, skin substitutes were separately paid in the OPPS as if they were biologicals according to the ASP methodology (78 FR 74930 through 74931).

The CY 2014 OPPS final rule with comment period did not specifically mention whether synthetic products could be considered to be skin substitute products in the same manner as biological products, because there were no synthetic products at that time that were identified as skin substitute products. Then in 2018, a manufacturer made a request that an entirely synthetic product that it claimed is used in the same manner as biological skin substitutes, receive a HCPCS code that would allow the product to be billed with graft skin substitute procedure codes, including CPT codes 15271 through 15278 and C5271 through C5278, starting in 2019. Initially, the synthetic product was not described as a graft skin substitute product.

However, we now believe that both biological and synthetic products could be considered to be skin substitutes for Medicare payment purposes. This view is supported by a paper referenced in a report we cited in the CY 2014 OPPS/ASC final rule with comment period titled “Skin Substitutes for Treating Chronic Wounds Technology Assessment Report at ES- 2”, which is available on the AHRQ website at. Https://www.ahrq.gov/​sites/​default/​files/​wysiwyg/​research/​findings/​ta/​skinsubs/​HCPR0610_​skinsubst-final.pdf.

That paper, titled “Regenerative medicine in dermatology. Biomaterials, tissue engineering, stem cells, gene transfer and beyond” by Dieckmann et al., states that skin substitutes should be divided into two broad categories. Biomaterial and cellular.

Biomaterial skin substitutes do not contain cells (acellular) and are derived from natural or synthetic sources. . .” The paper continues by describing biomaterial skin substitutes further.

€œSynthetic sources include various degradable polymers such as polylactide and polyglycolide. Whether natural or synthetic, the biomaterial provides an extracellular matrix that allows for infiation of surrounding cells.” The paper by Dieckmann et al. Indicates that skin substitute products may be synthetic products as well as biological products.

For CY 2021, we established a policy to include synthetic products in addition to biological products in our description of skin substitutes. Our new description defines skin substitutes as a category of biological and synthetic products that are most commonly used in outpatient settings for the treatment of diabetic foot ulcers and venous leg ulcers. We also retained the additional description of skin substitute products from the CY 2014 OPPS final rule which states “.

. . That skin substitute products do not actually function like human skin that is grafted onto a wound.

They are not a substitute for a skin graft. Instead, these products are applied to wounds to aid wound healing and through various mechanisms of action they stimulate the host to regenerate lost tissue. .

.” (78 FR 74930 through 74931). Finally, our definition of skin substitutes does not include bandages or standard dressings and these items cannot be assigned to either the high cost or low cost skin substitute groups or be reported with either CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278. For CY 2022, we proposed to continue to report synthetic graft skin substitute products using HCPCS code C1849 in the same manner as in CY 2021.

Comment. As previously requested for CY 2021, several commenters requested that we establish product-specific HCPCS codes for synthetic graft skin substitute products and requested that we delete HCPCS code C1849 because the code is not product-specific. The primary reason commenters want product-specific codes for synthetic graft skin substitute is they feel that synthetic products should be assigned to either the high cost or low cost skin substitute group based on the cost of each individual product in a similar manner to biological skin substitute products.

Commenters feel that because multiple synthetic graft skin substitute products can be assigned to HCPCS code C1849, there may be some synthetic products that should be in the low cost skin substitute group that will receive payment in the high cost skin substitute group if HCPCS code C1849 is assigned to the high cost group. Commenters also expressed concern about the opposite situation, in which high cost synthetic products would potentially be underpaid if HCPCS code C1849 is assigned to the low cost skin substitute group. Commenters believed the only resolution to these issues with HCPCS code C1849 is to delete the code and replace it with product-specific HCPCS codes for each graft synthetic product so there are not cases of synthetic products being either overpaid or underpaid.

Response. HCPCS code C1849 was established in response to the need to pay for graft skin substitute application services performed with synthetic graft skin substitute products in the OPPS in a manner comparable to how we pay for graft skin substitute application services performed with biological graft skin substitute products. As mentioned earlier in this section, when we established our policy in the CY 2014 OPPS/ASC final rule with comment period to package graft skin substitute Start Printed Page 63563 products into their associated application procedures (78 FR 74930 through 74931), we did not specifically mention whether synthetic products could be considered skin substitute products in the same manner as biological products.

The reason for this was that there were no synthetic products at that time that were identified as skin substitute products. We note that unless a graft skin substitute product has pass-through status, graft skin substitute products are not paid separately under unique HCPCS or CPT codes in OPPS. However, in CY 2018, a manufacturer requested that CMS develop methodologies to allow synthetic graft skin substitute products to receive payment in the outpatient hospital setting and in the physician office setting.

After extensive review, we made the determination to assign the synthetic product in CY 2019 to HCPCS codes A6460 and A6461, which were newly created HCPCS codes to report synthetic, resorbable wound dressings. HCPCS codes A6460 and A6461 are packaged under the OPPS and cannot be assigned to either the high cost or low cost skin substitute group. This meant that graft skin substitute products could not be billed with CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278, even though synthetic graft skin substitute products and biological graft skin substitute products perform the same function and have similar efficacy.

We quickly realized that using HCPCS codes A6460 and A6461 would not work to appropriately describe the application of synthetic graft products when used in similar manner to biological graft skin substitute products. Therefore, we needed to consider other approaches to this issue. Because all skin substitutes, except those with pass-through status, are packaged under the OPPS, we explored solutions that would permit synthetic skin substitute products to be billed with either CPT codes 15271 through 15278 or HCPCS codes C5271 though C5278.

We decided to create HCPCS code C1849 to describe any synthetic graft skin substitute product, and we revised the payment logic for the graft skin substitute application procedure codes to allow HCPCS code C1849 to be billed with those procedures. Multiple synthetic graft skin substitute products have now been identified as being described by HCPCS code C1849. We will average the pricing data from the various products to determine an amount for the products described by HCPCS code C1849 to compare against the MUC threshold.

This comparison will determine if HCPCS code C1849 should be assigned to the high cost or low cost skin substitute category. We appreciate the concerns expressed by commenters that one service code for synthetic products could lead to low cost synthetic graft products receiving excess payment if HCPCS code C1849 is assigned to the high cost group, or lead to high cost synthetic graft products being underpaid if HCPCS code C1849 is assigned to the low cost group. We will take these concerns into consideration in future rulemaking.

Comment. One commenter suggested that, if we do not establish product-specific HCPCS codes for each synthetic graft skin substitute product, we delete C1849 and establish two new HCPCS codes in its place. Specifically, the commenter recommended that one HCPCS code would be for high cost synthetic graft skin substitute products and the other HCPCS code would be for low cost synthetic graft skin substitute products.

These two payment codes would ensure that all synthetic graft skin substitute products are assigned to the cost group that reflects whether the mean unit cost of any given synthetic graft skin substitute product is above or below the mean unit cost threshold for determining assignment to the high cost or low cost skin substitute group. Response. We appreciate the suggestion from the commenter.

We note that our policy is to allow all synthetic skin substitutes described by C1849 to bill the skin graft application CPT codes for high cost skin substitute products (CPT codes 15271 through 15278). We appreciate the commenters suggestion, which we will consider for future rulemaking. Comment.

One commenter provided suggestions on how we could revise our definition of synthetic graft skin substitute products to reduce the possibility that synthetic dressings or non-resorbable polymeric sheets could be considered synthetic skin substitute products and be reported using HCPCS code C1849. Response. We thank the commenter for their suggestions.

Currently, we do not believe that there is an issue with the definition of synthetic skin substitute products that we established for the CY 2021 OPPS/ASC final rule (85 FR 86064 through 86067). If during future rulemaking we find that synthetic graft products that do not function as skin substitutes are being reported using HCPCS code C1849, we may refer to the commenter's suggestions to help us revise our definition of synthetic graft skin substitute products. 33.

Therapeutic Uafiation (APC 5241) As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule, we proposed to assign placeholder CPT code 0692T (Therapeutic Uafiation) to SI “E1” to indicate that the code is not payable by Medicare when submitted on outpatient claims (any outpatient bill type) because the service associated with the code is either not covered by any Medicare outpatient benefit category, is statutorily excluded from Medicare payment, or is not reasonable and necessary. We note that CPT code 0692T was listed as placeholder code 057XT in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. Comment.

Some commenters reported that the device associated with the CPT code 0692T describing therapeutic uafiation received FDA approval by the U.S. Food and Drug Administration (FDA) in 2020 and requested separate payment for the code. They specifically requested assignment to APC 5242 (Level 2 Blood Product Exchange and Related Services) and SI “S” (Paid under OPPS.

Separate APC payment). They stated that CPT codes 36511 (Therapeutic apheresis. For white blood cells), and 36514 (Therapeutic apheresis.

For plasma pheresis), which are assigned to APC 5242 and SI “S,” can be considered similar to therapeutic uafiation in clinical and resource coherence. Response. For CY 2022, OPPS payments are based on claims submitted between January 1, 2019, through December 31, 2019, and processed through June 30, 2020.

Because CPT code 0692T is a new code that will be effective January 1, 2022, we have no claims data available for ratesetting. However, after further review of the service, we believe that CPT code 0692T shares similar clinical characteristics and resource costs as CPT code 36513 (Therapeutic apheresis. For platelets), which is currently assigned to APC 5241 (Level 1 Blood Product Exchange and Related Services).

Therefore, we are assigning CPT code 0692T to APC 5241 and SI “S” for CY 2022. The final payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, the SI definitions can be found in Addendum D1 to this final rule with comment period.

Both Addendum B and Addendum D1 are available via the internet on the CMS website. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS. As a result, we will reevaluate the APC Start Printed Page 63564 placement for CPT code 0692T for the next rulemaking cycle.

34. Transcatheter Implantation of Coronary Sinus Reduction Device The Neovasc Reducer System is a novel device implanted into the coronary sinus vein using minimally invasive techniques. The Reducer is implanted by transvenous percutaneous approach from the right or left jugular vein into the coronary sinus.

After positioning the balloon catheter at the implantation site, the Reducer is deployed by inflating the balloon catheter until apposition of the vessel wall is achieved. The balloon catheter is then deflated and removed from the coronary sinus, leaving the Reducer permanently inflated. After 6 to 8 weeks the hourglass shaped wire mesh is covered with endothelium and narrowing becomes effective by redistributing blood flow to ischemic areas of the heart.

In 2021, Neovasc received FDA approval for the Investigational Device Exemption (IDE) regarding the COSIRA-II Clinical Trial. COSIRA-II is a randomized, sham-controlled trial investigating the safety and effectiveness of the Reducer for patients suffering from refractory angina. Neovasc has been classified as a Category B device by FDA.

In addition, the AMA's Editorial Panel established a new code, specifically, CPT code 0645T (Transcatheter implantation of coronary sinus reduction device including vascular access and closure, right heart catheterization, venous angiography, coronary sinus angiography, imaging guidance, and supervision and interpretation, when performed), to describe the implantation of a coronary sinus reduction device that is associated with the Neovasc Reducer System. This code was effective July 1, 2021. For CY 2022, we proposed to assign CPT code 0645T to SI “E1” to indicate that the code is not paid by Medicare when submitted on outpatient claims (any outpatient bill type).

Comment. One commenter, specifically, the manufacturer of the Neovasc Reducer System, requested assignment to either New Technology APC 1576 (New Technology—Level 39 ($15,001-$20,000) with the payment rate of $17,500.50, or New Technology APC 1577 (New Technology—Level 40 ($20,001-$25,000) with the payment rate of $22,500.50, in anticipation of its approval by Medicare for its Category B IDE study. The company stated there are no other surgical procedures that are similar in terms of resource costs and clinical homogeneity that would allow for the Neovasc Reducer System to be assigned to an appropriate clinical APC.

Response. Based on the information presented by the commenter, and our review of the IDE study, we do not believe that it is appropriate to assign a payable status indicator under the OPPS to CPT code 0645T prior to the approval of the Category B IDE study. In addition, the clinical study has not yet met CMS' standards for coverage, nor does it appear on the CMS Approved IDE List, which can be found at this CMS website.

Https://www.cms.gov/​Medicare/​Coverage/​IDE/​Approved-IDE-Studies.html. Because the Neovasc Reducer System has not been approved for Medicare coverage as a Category B IDE, we believe that we should continue to assign CPT code 0645T to status indicator “E1”. If this technology later meets CMS's standards for coverage, we will assess the APC assignment for the code in a future quarterly update and/or rulemaking cycle.

Therefore, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 0645T to SI “E1”. We refer readers to Addendum D1 to this final rule with comment period for the complete list of the OPPS payment status indicators and their definitions for CY 2022. Addendum D1 is available via the internet on the CMS website.

35. Tympanostomy Using an Automated Tube Delivery System (APC 5163) For CY 2022, we proposed to continue to assign CPT code 0583T to APC 5163 (Level 3 ENT Procedures) with a proposed payment rate of $1,387.72. Comment.

A few commenters disagreed with our proposed APC assignment. These commenters stated that CPT code 0583T should be reassigned to APC 5164 (Level 4 ENT Procedures) or APC 1523 (New Technology—Level 23 ($2,501-$3,000)) with proposed payment rates of $2,806.94 and $2,750.50, respectively. Commenters stated that CPT code 0583T is clinically similar to CPT code 69421 (Myringotomy including aspiration and/or eustachian tube inflation requiring general anesthesia), which is assigned to APC 5164.

Commenters further stated that APC 5164 also includes many other middle ear procedures that involve an incision, revision, repair, and removal of tubes. Response. We disagree with commenters on the clinical similarity between CPT code 0583T and the other services in APC 5164.

For the reasons discussed in the CY 2021 OPPS final rule with comment period (85 FR 85983), based on our review of the procedure and input from our medical advisors, we continue to believe that the surgical procedure described by CPT code 0583T is most similar, in terms of clinical homogeneity and resource cost, to CPT code 69436 (Tympanostomy (requiring insertion of ventilating tube), local or topical anesthesia), which is assigned to APC 5163. Both procedures (as described by CPT codes 0583T and 69436) require ventilating tubes that require anesthesia. In summary, after consideration of the public comments, we are finalizing our proposal without modification to continue assignment of CPT code 0583T to APC 5163.

The final CY 2022 OPPS payment rates for these codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

36. Urology and Related Services (APCs 5371 Through 5378) For CY 2016, we established the APC reorganization and developed a urology specific series of APCs 5371-5377. Since that time, we have maintained that structure and added an additional level 8, APC 5378 (Level 8 Urology and Related Services).

Based on our analysis of the CY 2019 claims available for ratesetting, we proposed to continue the 8 level structure of Urology APCs in the CY 2022 OPPS. We received comments on the CY 2022 OPPS/ASC proposed rule suggesting we revise the APC assignments for the services assigned to the Urology &. Related Services APCs.

A commenter specifically noted that a reorganization for APCs 5375 through 5376 would be appropriate, but added that there were other adjustments across services within the Urology APCs that could improve the structure of these APCs. We received several comments on APC reassignments. Below are the comments and our responses.

A. High-Intensity Focused Uasound of the Prostate (HIFU) Procedure (APC 5375) In 2017, CMS received a new technology application for the prostate HIFU procedure and established a new code, specifically, HCPCS code C9747 (Ablation of prostate, transrectal, high intensity focused uasound (hifu), including imaging guidance). Based on the estimated cost provided in the new technology application, we assigned the new code to APC 5376 (Level 6 Urology and Related Services) with a payment rate of $7,452.66 effective July 1, 2017.

Start Printed Page 63565 We announced the SI and APC assignment in the July 2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017). For the CY 2018 update, we maintained the assignment of HCPCS code C9747 to APC 5376 with a payment rate of $7,596.26. We note that the payment rates for the CY 2018 OPPS update were based on claims submitted between January 1, 2016 through December 30, 2016, that were processed on or before June 30, 2017.

Since HCPCS code C9747 was established on July 1, 2017, we had no claims data for the procedure for use in ratesetting for CY 2018. However, for the CY 2019 update, based on the latest claims data for the final rule, we revised the APC assignment for HCPCS code C9747 from APC 5376 to APC 5375 with a payment rate of $4,020.54. We note that the payment rates for CY 2019 were based on claims submitted between January 1, 2017 through December 30, 2017, that were processed on or before June 30, 2018.

Our claims data showed a geometric mean cost of approximately $5,000 for HCPCS code C9747 based on 64 single claims (out of 64 total claims), which was significantly lower than the geometric mean cost of about $7,717 for APC 5376. We believed that the geometric mean cost for HCPCS code C9747 was more comparable to the geometric mean cost of approximately $4,055 for APC 5375. Consequently, we reassigned the code from APC 5376 to APC 5375 (Level 5 Urology and Related Services) for CY 2019 and C9747 remained in APC 5375 for CY 2020.

For the CY 2021 update, we replaced HCPCS code C9747 with CPT code 55880 (Ablation of malignant prostate tissue, transrectal, with high intensity-focused uasound (hifu), including uasound guidance) on January 1, 2019. We maintained the assignment of HCPCS code C9747 to APC 5375 with a payment rate of $4,413.90. We note that the payment rates for the CY 2021 OPPS update were based on claims submitted between January 1, 2019 through December 30, 2019, that were processed on or before June 30, 2020.

Our claims data showed a geometric mean cost of approximately $5,744,43 for HCPCS code C9747 (CPT code 55880) based on 279 single claims (out of 284 total claims), which was assigned to APC 5375 with a geometric mean cost of about $4,299.81. For CY 2022, we proposed to continue to assign HCPCS code C9747 to APC 5375 with a proposed payment rate $4,527.23. Comment.

Several commenters requested CPT code 55880 be reassigned to APC 5376 from APC 5375. The commenters argued that the average cost of the HIFU procedure is closer to the APC 5376 proposed payment rate of $8,468.32. Several commenters recommended we assign this procedure to APC 5376 because they believe the service is clinically similar and comparable in terms of resources to cryoablation of the prostate, which is described by CPT code 55873 (Cryosurgical ablation of the prostate (includes uasonic guidance and monitoring) and assigned to APC 5376 (Level 6 Urology and Related Services), with a proposed payment rate of $8,468.32.

They also stated that the new CPT code 55880 descriptor treats malignant prostate tissue, which requires additional resources relative to its predecessor code descriptor that treated BPH. Some commenters stated that the CY 2019 OPPS reassignment of HCPCS code C9747 to APC 5375 from APC 5376 was due to inaccurate and incomplete claims that did not include the substantial cost of the disposable device required for the procedure and stated that HIFU is a device-intensive procedure. They alleged the underpayment for HIFU discourages hospitals from providing this procedure for Medicare patients because the APC 5375 payment rate does not cover the hospital facility cost for this procedure.

They alleged that maintaining the assignment in APC 5375 will deter HOPD facilities from offering the HIFU treatment to Medicare beneficiaries because the payment is insufficient to cover the cost of the procedure. Several commenters argued that the current HIFU payment is a health equity issue because Americans in a lower socio-economic class will have less access to high-quality healthcare. Furthermore, the commenters stated that prostate cancer affects more men of color whose rate of death is almost twice that of non-Hispanic white men.

Response. We review, on an annual basis, the APC assignments for all services and items (including devices) paid under the OPPS based on our analysis of the latest claims data. For CY 2021, based on predecessor HCPCS code C9747, our claims data supported maintaining CPT code 55880 in APC 5375.

For CY 2022, based on our analysis of the claims for this CY 2022 OPPS/ASC final rule with comment period, our data shows a geometric mean cost of approximately $5,708 for HCPCS code C9747 based on 279 single claims, which is more comparable to the geometric mean cost of about $4,299 for APC 5375, rather than the geometric mean cost of approximately $8,042 for APC 5376. Although we are not applying the CY 2020 claims data for the CY 2022 ratesetting due to the PHE, we noted that the geometric mean cost associated with HCPCS code C9747 is about $6,654, which is between the geometric means of APC 5375 and APC 5376. Our clinical advisors also acknowledge the clinical and resource similarity between CPT code 55880 and CPT code 55873, both of which are treatment options for prostate cancer.

We performed several APC modeling studies on the impact of reassigning a set of codes to better balance the procedures within APC 5375 and 5376, and we found that the reassignment of these codes would impact the payment level of both APC 5375 and 5376. In summary, after careful consideration of the public comments, and after our analysis of the claims data for this final rule with comment period, we are maintaining the APC assignment for CPT code 55880 in APC 5375, but will consider its reassignment in future rulemaking. The final CY 2022 payment rate for CPT code 55880 can be found in Addendum B to this final rule with comment period.

In addition, we refer readers to Addendum D1 to this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. B.

Rezūm Procedure—Water Vapor Thermotherapy (APC 5373) In 2018, CMS established a new code, specifically, HCPCS code C9748 (Transurethral destruction of prostate tissue. By radiofrequency water vapor (steam) thermal therapy). Based on its estimated cost, we assigned the new code to APC 5373 (Level 3 Urology and Related Services) with a payment rate of $1,695.68 effective January 1, 2018.

We announced the SI and APC assignment in the January 2018 OPPS quarterly update CR (Transmittal 3941, Change Request 10417, dated December 22, 2017). For the CY 2019 update, we replaced HCPCS code C9748 with CPT 53854 (Transurethral destruction of prostate tissue. By radiofrequency generated water vapor thermotherapy) on January 1, 2019.

We maintained the assignment of CPT 53854 (HCPCS code C9748) to APC 5373 with a payment rate of $1,695.57. We note that the payment rates for the CY 2018 OPPS update were based on claims submitted between January 1, 2017 through December 30, 2017, that were processed on or before June 30, 2018. Since HCPCS code C9748 Start Printed Page 63566 was established on January 1, 2018, we had no claims data for the procedure for use in ratesetting for CY 2019.

For the CY 2020 update, we maintained the assignment of HCPCS code 53854 to APC 5373 with a payment rate of $1,771.35. We note that the payment rates for the CY 2020 OPPS update were based on claims submitted between January 1, 2018 through December 30, 2018, that were processed on or before June 30, 2019. Our claims data showed a geometric mean cost of approximately $1,899.18 for HCPCS code C9748 based on 191 single claims (out of 192 total claims), which was assigned to APC 5373 with a geometric mean of about $1,733.35.

For the CY 2021 update, we maintained the assignment of HCPCS code 53854 to APC 5373 with a payment rate of $1,792.99. We note that the payment rates for the CY 2020 OPPS update were based on claims submitted between January 1, 2019, through December 30, 2019, that were processed on or before June 30, 2020. Our claims data showed a geometric mean cost of approximately $2,414.69 for HCPCS code 53854 based on 751 single claims (out of 752 total claims), which was assigned to APC 5373 with a geometric mean cost of about $1,746.64.

For CY 2022, we proposed to continue to assign HCPCS code 53854 to APC 5373 with a proposed payment rate $1,839.83. Comment. A commenter requested the reassignment of CPT code 53854 to APC 5374 (Level 4 Urology and Related Services) from APC 5373 (Level 3 Urology and Related Services).

The commenter stated the geometric mean costs associated with CPT Code 53854 are significantly higher than either all significant or almost all significant other procedures in APC 5373. The commenter further stated that based on the CY 2019 claims data, CPT code 53854 yields a geometric mean cost of about $2,410 with 751 single frequency claims and suggested the geometric mean cost of CPT code 53854 is much closer to the geometric mean cost of APC 5374, which is approximately $2,996. The commenter cited the year over year increase in geometric cost of 18 percent or $423 from 2019 to 2020.

In addition, the commenter stated CPT 53854 is a transurethral procedure for the treatment of benign prostatic hyperplasia (BPH) and is more clinically similar to the two transurethral BPH procedure codes CPT 53850 (Transurethral destruction of prostate tissue. By microwave thermotherapy) and CPT 53852 (Transurethral destruction of prostate tissue. By radiofrequency thermotherapy) assigned to APC 5374.

Response. We appreciate the commenter's input on this subject. Based on our evaluation of the latest claims data for this final rule with comment period, we noted the geometric mean cost associated with CPT code 53854 (HCPCS C9748) increased from $1,899.18 (from the CY 2018 claims data) to $2,412.55 (from the CY 2019 claims data), which represented an approximately 27 percent increase year-over-year.

Based on our review, our medical advisors agreed with the commenter that CPT code 53854 is similar to CPT code 53850 and CPT code 53852 in terms of clinical characteristics and resource. We noted that CPT codes 53850 and 53852 represent treatment options for BPH which are assigned to APC 5374 (Level 4 Urology and Related Services) while there are no BPH treatment procedures assigned to APC 5373 with the exception of CPT code 53854. In summary, after consideration of the public comments, we are finalizing our proposal with modification and reassigning CPT code 53854 to APC 5374 from APC 5373 for CY 2022.

The final CY 2022 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 to this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

37. VisONE Synchronized Diaphragmatic Stimulation (SDS) System For CY 2022, the CPT Editorial Panel created CPT codes 0674T through 0685T, which are listed in Table 29, to describe the VisONE® Synchronized Diaphragmatic StimulationTM (SDS®) System. For CY 2022, we proposed to assign these codes to OPPS SI “E1”, indicating that these services are not paid by Medicare when submitted on outpatient claims.

We note these codes were listed as placeholder codes 050XT through 055XT in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. Start Printed Page 63567 Start Printed Page 63568 Comment. A commenter reported that the device associated with these codes has been approved for Breakthrough Device Designation by the FDA.

The commenter added that they are currently in the process of applying for Medicare national coverage for the clinical trial as a Category B IDE study. The commenter requested that we crosswalk the new codes to the SIs and APC assignments of comparable procedures involving other stimulation technologies so that appropriate hospital outpatient payment may be made in the event the Category B IDE study is approved for Medicare coverage. The commenter listed the comparable codes with the SI and APCs assignments.

See Table 30 for SI and APC assignments requested by commenter. Start Printed Page 63569 Response. The clinical trial associated with CPT codes 0674T through 0685T does not appear on the CMS Approved IDE List, which can be found at this CMS website.

Https://www.cms.gov/​Medicare/​Coverage/​IDE/​Approved-IDE-Studies.html. While we recognize the commenter's assertion that is was accepted for FDA's Breakthrough Device Designation and that it intends to apply for Medicare coverage as a Category B IDE clinical trial, since the clinical trial associated with these codes has not been approved for Medicare coverage, we believe we should continue to assign CPT codes 0674T through 0685T to SI “E1” for CY 2022. If Medicare approves the clinical trial as a Category B IDE study, we will reassess the SI and APC assignments for the codes.

In summary, after consideration of the public comments, we are finalizing our proposal without modification. Specifically, we are finalizing our continued assignment of CPT code=0674T through 0685T to OPPS SI “E1.” IV. OPPS Payment for Devices A.

Pass-Through Payment for Devices 1. Beginning Eligibility Date for Device Pass-Through Status and Quarterly Expiration of Device Pass-Through Payments a. Background The intent of transitional device pass-through payment, as implemented at § 419.66, is to facilitate access for beneficiaries to the advantages of new and truly innovative devices by allowing for adequate payment for these new devices while the necessary cost data is collected to incorporate the costs for these devices into the procedure APC rate (66 FR 55861).

Under section 1833(t)(6)(B)(iii) of the Act, the period for which a device category eligible for transitional pass-through payments under the OPPS can be in effect is at least 2 years but not more than 3 years. Prior to CY 2017, our regulation at § 419.66(g) provided that this pass-through payment eligibility period began on the date CMS established a particular transitional pass-through category of devices, and we based the pass-through status expiration date for a device category on the date on which pass-through payment was effective for the category. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79654), in accordance with section 1833(t)(6)(B)(iii)(II) of the Act, we amended § 419.66(g) to provide that the pass-through eligibility period for a device category begins on the first date on which pass-through payment is made under the OPPS for any medical device described by such category.

In addition, prior to CY 2017, our policy was to propose and finalize the Start Printed Page 63570 dates for expiration of pass-through status for device categories as part of the OPPS annual update. This means that device pass-through status would expire at the end of a calendar year when at least 2 years of pass-through payments had been made, regardless of the quarter in which the device was approved. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79655), we changed our policy to allow for quarterly expiration of pass-through payment status for devices, beginning with pass-through devices approved in CY 2017 and subsequent calendar years, to afford a pass-through payment period that is as close to a full 3 years as possible for all pass-through payment devices.

We also have an established policy to package the costs of the devices that are no longer eligible for pass-through payments into the costs of the procedures with which the devices are reported in the claims data used to set the payment rates (67 FR 66763). We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79648 through 79661) for a full discussion of the current device pass-through payment policy. B.

Expiration of Transitional Pass-Through Payments for Certain Devices As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires that, under the OPPS, a category of devices be eligible for transitional pass-through payments for at least 2 years, but not more than 3 years. Currently, there are 11 device categories eligible for pass-through payment. These devices are listed in Table 31.

Below, we detail the expiration dates of pass-through payment status for each of the 11 devices currently receiving device pass-through payment. The pass-through payment status of the device category for HCPCS code C1823 is scheduled to expire on December 31, 2021. Typically, we would propose to package the costs of the device described by C1823 into the costs related to the procedure with which the device is reported in the hospital claims data for CY 2022.

The data for the CY 2022 OPPS proposed rule ratesetting for the procedure reported with C1823 would have been set using CY 2020 outpatient claims data processed through December 31, 2020, however, as described in section X.E. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42188), due to the effects of the erectile dysfunction treatment PHE, we proposed to use CY 2019 claims data instead of CY 2020 claims data in establishing the CY 2022 OPPS rates and to use cost report data from the same set of cost reports originally used in final rule 2021 OPPS ratesetting. Therefore, we proposed to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to provide separate payment for C1823 for four quarters of CY 2022 to end on December 31, 2022.

This would allow for CY 2021 claims data to inform CY 2023 rate setting for the procedure reported with C1823. This is the only device whose costs would typically be packaged into the related procedure in CY 2022 using CY 2020 claims data for ratesetting and is the only device to which this proposed policy would apply. A full discussion of this finalized policy is included in section X.F.

Of this CY 2022 OPPS/ASC final rule. The pass-through payment status of the device category for HCPCS code C1823 will end on December 31, 2021. The pass-through payment status of the device categories for HCPCS codes C1824, C1982, C1839, C1734, and C2596 is set to expire on December 31, 2022.

The pass-through payment status of the device category for HCPCS code C1748 is set to expire on June 30, 2023. The pass-through payment status of the device category for HCPCS codes C1052, C1062, and C1825 is set to expire on December 31, 2023 and the pass-through payment status of the device category for HCPCS code C1761 is set to expire on June 30, 2024. Table 31 shows the expiration dates of transitional pass-through payments for these devices.

Start Printed Page 63571 2. New Device Pass-Through Applications for CY 2022 a. Background Section 1833(t)(6) of the Act provides for pass-through payments for devices, and section 1833(t)(6)(B) of the Act requires CMS to use categories in determining the eligibility of devices for pass-through payments.

As part of implementing the statute through regulations, we have continued to believe that it is important for hospitals to receive pass-through payments for devices that offer substantial clinical improvement in the treatment of Medicare beneficiaries to facilitate access by beneficiaries to the advantages of the new technology. Conversely, we have noted that the need for additional payments for devices that offer little or no clinical improvement over previously existing devices is less apparent. In such cases, these devices can still be used by hospitals, and hospitals will be paid for them through appropriate APC payment.

Moreover, a goal is to target pass-through payments for those devices where cost considerations are most likely to interfere with patient access (66 FR 55852. 67 FR 66782. And 70 FR 68629).

We note that, as discussed in section IV.A.2. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42085), we created an alternative pathway in the CY 2020 OPPS/ASC final rule that granted fast-track device pass-through payment under the OPPS for devices approved under the FDA Breakthrough Device Program for OPPS device pass-through payment applications received on or after January 1, 2020. We refer readers to section IV.A.4.

Of the CY 2022 OPPS/ASC proposed rule for a complete discussion of this pathway. As specified in regulations at § 419.66(b)(1) through (3), to be eligible for transitional pass-through payment under the OPPS, a device must meet the following criteria. • If required by FDA, the device must have received FDA marketing authorization (except for a device that has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by FDA), or meet another appropriate FDA exemption.

And the pass-through payment application must be submitted within 3 years from the date of the initial FDA marketing authorization, if required, unless there is a documented, verifiable delay in U.S. Market availability after FDA marketing Start Printed Page 63572 authorization is granted, in which case CMS will consider the pass-through payment application if it is submitted within 3 years from the date of market availability. he device is determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part, as required by section 1862(a)(1)(A) of the Act.

And The device is an integral part of the service furnished, is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted (either permanently or temporarily), or applied in or on a wound or other skin lesion. In addition, according to § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following. (1) Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub.

15-1). Or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). Separately, we use the following criteria, as set forth under § 419.66(c), to determine whether a new category of pass-through payment devices should be established.

The device to be included in the new category must— Not be appropriately described by an existing category or by any category previously in effect established for transitional pass-through payments, and was not being paid for as an outpatient service as of December 31, 1996. Have an average cost that is not “insignificant” relative to the payment amount for the procedure or service with which the device is associated as determined under § 419.66(d) by demonstrating. (1) The estimated average reasonable cost of devices in the category exceeds 25 percent of the applicable APC payment amount for the service related to the category of devices.

(2) the estimated average reasonable cost of the devices in the category exceeds the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent. And (3) the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device exceeds 10 percent of the APC payment amount for the related service (with the exception of brachytherapy and temperature-monitored cryoablation, which are exempt from the cost requirements as specified at § 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 of the criteria for device pass-through payment under the quarterly review process to receive timely pass-through payment status, while still allowing for a transparent, public review process for all applications (80 FR 70417 through 70418). In the CY 2020 annual rulemaking process, we finalized an alternative pathway for devices that are granted a Breakthrough Device designation (84 FR 61295) and receive FDA marketing authorization.

Under this alternative pathway, devices that are granted an FDA Breakthrough Device designation are not evaluated in terms of the current substantial clinical improvement criterion at § 419.66(c)(2) for the purposes of determining device pass-through payment status, but do need to meet the other requirements for pass-through payment status in our regulation at § 419.66. Devices that are part of the Breakthrough Devices Program, have received FDA marketing authorization, and meet the other criteria in the regulation can be approved through the quarterly process and announced through that process (81 FR 79655). Proposals regarding these devices and whether pass-through payment status should continue to apply are included in the next applicable OPPS rulemaking cycle.

This process promotes timely pass-through payment status for innovative devices, while also recognizing that such devices may not have a sufficient evidence base to demonstrate substantial clinical improvement at the time of FDA marketing authorization. More details on the requirements for device pass-through payment applications are included on the CMS website in the application form itself at. 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. Comment. One commenter recommended that, for devices with FDA Breakthrough Device designation, CMS remove the requirement that the device prove they are not described by an existing transitional pass-through category.

The commenter asserted that FDA Breakthrough Device designation implies that a device is a first of kind in addressing the condition for which it is indicated. Response. We appreciate the commenter's input but note that we did not propose to eliminate the device category requirement in the CY 2022 OPPS/ASC proposed rule.

Moreover, section 1833(t)(6)(B)(ii) requires the Secretary to establish categories of medical devices in a manner such that no medical device is described by more than one category and to promptly establish a new category of medical devices for any new medical devices for which none of the categories in effect or previously in effect is appropriate. Comment. One commenter asked that CMS provide additional guidance to medical technology innovators to help clarify requirements for demonstrating “substantial clinical improvement” for purposes of transitional pass-through payment eligibility.

The commenter stated that greater clarity should be provided in particular with regard to the evidence types and study designs that may be considered in evaluating substantial clinical improvement, including methods beyond randomized clinical trials (RCTs) that would produce evidence sufficient to demonstrate substantial clinical Start Printed Page 63573 improvement in a shorter period of time and at reduced cost. Response. We appreciate the commenter's input, but note that this comment is outside the scope of this rulemaking.

We refer the commenter to the Device Pass-through application located on the CMS website ( https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Downloads/​catapp.pdf ) for further information regarding what evidence is considered in evaluating substantial clinical improvement of devices. Comment. One commenter offered their general support for our proposal to approve all eight applications for device pass-through status included in the CY 2022 OPPS/ASC proposed rule.

The commenter added that CMS needs to ensure that pass-through payment amounts adequately cover the cost of the device to ensure that Medicare beneficiaries have access to innovative services and reduce facilities' economic burdens. The commenter also believed CMS should refrain from factoring a procedure off-set amount into the calculation of payment for these transitional pass though approved services. Response.

We appreciate the general support for our proposals to approve the applications discussed in the CY 2022 OPPS/ASC proposed rule and the recommendations provided by the commenter. Our determinations on each application are described in detail in the next section. As we have in prior years, CMS continues to evaluate the application of the device offset amount on a case by case basis to ensure the appropriate payment is made for a device on pass-through status.

In cases where a device on pass-through status replaces previously existing technologies, we continue to believe it is appropriate to apply the device offset amount. b. Applications Received for Device Pass-Through Payment for CY 2022 We received eight complete applications by the March 1, 2021 quarterly deadline, which was the last quarterly deadline for applications to be received in time to be included in the CY 2022 OPPS/ASC proposed rule.

We received three of the applications in the third quarter of 2020, two of the applications in the fourth quarter of 2020, and three of the applications in the first quarter of 2021. One of the applications was approved for device pass-through payment during the quarterly review process. The Shockwave C2 Coronary Intravascular Lithotripsy (IVL) catheter, which received fast-track approval under the alternative pathway effective July 1, 2021.

As previously stated, all applications that are preliminarily approved upon quarterly review will automatically be included in the next applicable OPPS annual rulemaking cycle. Therefore, the Shockwave C2 Coronary Intravascular Lithotripsy (IVL) catheter is discussed in section IV.2.b.1. Of this final rule with comment period.

Applications received for the later deadlines for the remaining 2021 quarters (June 1, September 1, and December 1), if any, will be discussed in the CY 2023 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 website at.

Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Downloads/​catapp.pdf. Discussions of the applications we received by the March 1, 2021 deadline are included below. 1.

Alternative Pathway Device Pass-through Applications We received two device pass-through applications by the March 2021 quarterly application deadline for devices that have received Breakthrough Device designation from FDA and FDA marketing authorization, and therefore are eligible to apply under the alternative pathway. As stated above in section IV.2.a of the CY2022 OPPS/ASC proposed rule, under this alternative pathway, devices that are granted an FDA Breakthrough Device designation are not evaluated in terms of the substantial clinical improvement criterion at § 419.66(c)(2)(i) for purposes of determining device pass-through payment status, but need to meet the other requirements for pass-through payment status in our regulation at § 419.66. (1) RECELL® System AVITA Medical submitted an application for a new device category for transitional pass-through payment status for the RECELL® System (RECELL®) for CY 2022.

According to the applicant, RECELL® is used to process autologous donor tissue into a cell suspension autograft that is then immediately applied to the surgically prepared acute thermal burn wound. The applicant stated RECELL® is a stand-alone, single-use, battery-powered device used to process and apply an autologous skin cell suspension. According to the applicant, RECELL® is a Class III medical device indicated for the treatment of acute partial-thickness and full-thickness/mixed depth thermal burn wounds and is not categorized as a skin substitute.

According to the applicant, the autograft procedure utilizing the RECELL® system involves harvesting a small graft from the patient's healthy skin and placing it into the RECELL® System for immediate processing into an autologous skin cell suspension. The applicant asserts that a significantly smaller autograft harvest is needed for procedures involving RECELL® when compared to procedures involving a split-thickness skin graft (STSG) without RECELL®. Where typical STSG expansion ranges from 2:1 to 6:1, RECELL® may expand skin by up to 80:1.

The applicant adds the entire procedure takes place in the operating room, including surgically preparing the acute burn wound, harvesting the autograft, processing the skin cell suspension through a disaggregation process, and applying the cell suspension autograft to the wound with no culturing in a laboratory. The applicant described the RECELL® procedure in 27 steps. (1) The autograft site is identified.

(2) the patient is anesthetized and prepared. (3) the nurse opens and transfers the sterile RECELL® System to the operative field. (4) a self-test is performed.

(5) the nurse prepares and dispenses the enzyme into the incubation well. (6) the buffer solution is drawn and dispensed into the buffering and rinsing well. (7) the RECELL® processing unit is activated to heat the enzyme.

(8) a thin epidermal autograft is harvested. (9) the harvested skin graft is placed in the enzyme. (10) the donor graft incubates for 15-20 minutes.

(11) the sample is placed dermal side down in the mechanical scraping tray. (12) a scalpel is used to scrape the edges of the skin sample. (13) once ready, the donor skin is rinsed in the buffer solution.

(14) the skin is returned to the mechanical scraping tray. (15) buffer is applied to the skin sample. (16) the skin sample is held in place with forceps.

(17) the surgeon scrapes the epidermal cells. (18) the buffer syringe is used to rinse the disaggregated skin cells. (19) the surgeon draws up the autologous skin cell suspension from the tray into a syringe.

(20) the suspension is then dispensed through the cell strainer to filter the suspension. (21) the filtered autologous skin cell suspension is drawn into a new 10 ml syringe. (22) the cell suspension autograft is prepared.

(23) the burn wound is debrided. (24) the primary dressing (non-adherent, Start Printed Page 63574 non-absorbent, small pore) is fixed or held only at the lower aspect of the burn wound. (25) the cell suspension autograft is applied by either spraying or dripping over the prepared wound bed.

(26) after application, the primary dressing is immediately secured over the wound bed. And (27) absorbent and protective dressings are then applied as needed. The applicant states the autologous skin cell suspension prepared using the RECELL® System contains keratinocytes, fibroblasts and melanocytes.

According to the applicant, keratinocytes are the primary cells of the epidermis that are responsible for healing. Fibroblasts enable the creation of new extracellular matrix proteins. And melanocytes produce melanin to allow restoration of normal pigmentation.

The applicant asserts the unique delivery system allows for broad and even distribution of the cell suspension autograft directly onto a prepared wound surface or in combination with a meshed skin graft. According to the applicant, there is one commercially available product (Epicel) that is also used to create an autograft from the patient's skin that is then applied to treat acute thermal burns. The applicant's claims regarding the differences between the two products are summarized in the following Table 32.

Start Printed Page 63575 With respect to the newness criterion at § 419.66(b)(1), RECELL® is part of the FDA Breakthrough Devices Program. The applicant stated that RECELL® received PMA on September 20, 2018. The applicant added that RECELL® is a Class III medical device indicated for the treatment of acute thermal burn wounds in patients 18 years of age and older.

We received the application for a new device category for transitional pass-through payment status for RECELL® on August 7, 2020, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the RECELL® meets the newness criterion. Comment.

The applicant reiterated that RECELL® received FDA PMA on September 20, 2018. Response. We appreciate the commenter's input.

Because we received the RECELL® pass-through application on August 7, 2020, which is within 3 years of September 20, 2018, the date of FDA premarketing approval, we agree that the RECELL® meets the newness criterion. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, RECELL® is integral to the service provided, 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. The applicant also claimed that RECELL® meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, 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.

However, given the applicant's description of RECELL® as a device that processes tissue into an autograft, we stated that it appears that the RECELL® system may not be surgically implanted or inserted (either permanently or temporarily) or applied in or on a wound or other skin lesion. We noted that we believed the product of the RECELL® system, the suspension, may be applied on a wound, but we were not certain that this suspension qualifies as a device. We invited public comments on whether RECELL® meets the eligibility criteria at § 419.66(b).

Comment. In response to our concern regarding whether the suspension, that is applied in or on a wound or other skin lesion is the device for purposes of the requirement in § 419.66(b) one commenter stated that FDA approved all components of the RECELL® as a device, and that in order to treat a patient, all components of the RECELL® device are required to treat the patient. Multiple commenters stated the process of harvesting, creating and applying the suspension as one continuous process would not be possible without the device hardware.

The hardware and suspension are tightly integrated and there is no treatment without the suspension. Another commenter added that the buffer solution is a component of the RECELL® device, which allows the expansion of the donor skin and provides a suspension mechanism for the skin cells to be applied directly on the patient's burn wound. Response.

We thank the commenters for their input. We have taken this information into consideration in our final determination of whether the device meets the criteria in § 419.66(b)(3) and § 419.66(b)(4), discussed below. Comment.

The applicant asserted that RECELL® is an integral part of the service, which cannot be performed without all device components including the suspension, is used for a single patient only, comes in contact with human tissue and is applied on a wound, and therefore, the applicant believes the RECELL® device meets the criteria in § 419.66(b)(3). In response to our concern that the device is not applied in or on a wound or other skin lesion, the applicant stated that the RECELL® device is intended to harvest the cells from the patient's own donor skin to create a skin cell suspension which is then applied directly on the debrided and excised burn wound using a syringe fitted with a spray nozzle. According to the applicant, the RES Regenerative Epidermal Suspension (“Suspension”) contains autologous skin cells and buffer solution, a RECELL® device component, which is directly applied in or on a wound.

The applicant added that the buffer is a pH neutral solution (sodium lactate) in liquid form that is used to carry, expand, and deliver the harvested skin cells in the RES Suspension for direct application to the burn wound. According to the applicant, RECELL® could not accomplish its intended use as described in its FDA label without the buffer, which is a necessary component of the device. The applicant and another commenter also contended that the Suspension qualifies as a device under FDA's definition, and cited provisions of the Federal Food, Drug, and Cosmetic Act and FDA guidance that they believed supported this position, Response.

We appreciate the additional information from the applicant and commenters. The applicant and commenters indicated that the RECELL® device consists of several components, one of which is the buffer, which is combined with harvested skin cells to create the suspension that is then applied to a wound. Because the buffer, a component of the device, is part of the Start Printed Page 63576 suspension that is applied in or on a wound, RECELL® meets the eligibility criterion specified at § 419.66(b)(3)).

We did not receive any comments in regard to § 419.66(b)(4), whether the device is equipment, an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and whether the device is a supply or material furnished incident to a service. Because the applicant asserted that the RECELL® device met the eligibility requirements at § 419.66(b)(4) and we agree, we conclude that the RECELL® device meets this eligibility criterion. The criteria for establishing new device categories are specified at § 419.66(c).

The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. We stated in the CY 2022 OPPS/ASC proposed rule that we have not yet identified an existing pass-through payment category that describes RECELL®. We invited public comment on whether RECELL® meets the device category criterion.

Comment. The applicant asserted the RECELL® meets the first criterion for establishing a new device category at § 419.66(c)(1) because there are no existing categories established for device TPT that describe the RECELL® device. Response.

We agree there is no existing pass-through payment category that appropriately describes the RECELL® because no current category appropriately describes a device that creates a suspension from an autograft of the patient's skin that is then applied to treat acute thermal burns. Based on this information, we have determined that the RECELL® meets the first eligibility criterion at § 419.66(c)(1). The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following.

(i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of FDA's Breakthrough Devices Program and has received FDA marketing authorization. As previously discussed in section IV.2.a above, we finalized the alternative pathway for devices that are granted a Breakthrough Device designation and receive FDA marketing authorization in the CY 2020 OPPS/ASC final rule (84 FR 61295).

The RECELL® System has a Breakthrough Device designation and marketing authorization from FDA, and therefore, is not evaluated for substantial clinical improvement. We note that the applicant applied for new technology add-on payment under the alternative pathway for Breakthrough devices, as discussed in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45150 through 45151). While we have determined that the RECELL® device meets the newness criterion for OPPS device pass-through eligibility, in the FY 2022 IPPS/LTCH PPS final rule, we found that the RECELL® device was not within the newness period for FY 2022 for eligibility for new technology add-on payments and was therefore ineligible to receive these payments (86 FR 45151).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements.

The applicant stated that RECELL® would be reported with the HCPCS codes listed in the following Table 33. Start Printed Page 63577 To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. In the CY 2022 OPPS/ASC proposed rule, we stated that for our calculations, we used APC 5054—Level 4 Skin Procedures, which had a CY 2020 payment rate of $1,622.74 at the time the application was received.

Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657). HCPCS code 15110 had a device offset amount of $13.47 at the time the application was received. According to the applicant, the cost of the RECELL® is $7,500.

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 $7,500 for RECELL® is 462 percent of the applicable APC payment amount for the service related to the category of devices of $1,622.74 ((7,500/1,622.74) × 100 = 462.2 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe RECELL® meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $7,500 for RECELL® is 55,679 percent of the cost of the device-related portion of the APC payment amount for the related service of $13.47 (($7,500/$13.47) × 100 = 55,679.3 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe RECELL® meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $7,500 for RECELL® and the portion of the APC payment amount for the device of $13.47 is 461 percent of the APC payment amount for the related service of $1,622.74 ((($7,500−$13.47)/$1,622.74) × 100 = 461.4 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe RECELL® meets the third cost significance requirement.

We invited public comment on whether the RECELL® meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. Comment. One commenter asserted that RECELL® expands the donor skin by up to 80x compared to 2-4x for most autografts, the current standard of care.

The commenter stated this is an important treatment option in light of the ongoing erectile dysfunction treatment levitra and its drain on the availability of inpatient bed space. The commenter respectfully requested that CMS approve the RECELL® pass-through payment application to make RECELL® available in the outpatient setting. A second commenter offered their general support for approval of RECELL® based on what they believe to be substantial improvements compared to current burn treatments.

A third commenter urged CMS to finalize pass-through status for RECELL® so that they could offer the treatment to patients on an outpatient basis. Response. We thank the commenters for their support and we note that, as explained further below, we are approving RECELL® for device pass-through status beginning in CY 2022.

Comment. The applicant stated that the cost of RECELL® is not insignificant and exceeds 25 percent of the applicable APC amount for the relevant procedures that would be reported with RECELL®. The applicant further stated that the cost of the RECELL® device also exceeds the device-related portion of the applicable APC amount by more than 25 percent for the relevant procedures that would be reported with RECELL®.

Response. After consideration of the public comments we received and our review of the device pass-through application, we have determined that RECELL® meets the requirements for device pass-through payment status described at § 419.66. As stated previously, devices that are granted an FDA Breakthrough Device designation are not evaluated in terms of the current substantial clinical improvement criterion at § 419.66(c)(2)(i) for purposes of determining device pass-through payment status, but must meet the other criteria for device pass-through status, and we believe RECELL® meets those other criteria.

Therefore, effective beginning January 1, 2022, we are finalizing approval for device pass-through payment status for RECELL® under the alternative pathway for devices that have an FDA Breakthrough Device designation and have received FDA marketing authorization. (2) Shockwave C2 Coronary Intravascular Lithotripsy (IVL) Catheter Shockwave Medical submitted an application for a new device category for transitional pass-through payment status for the Shockwave C2 Coronary Intravascular Lithotripsy (IVL) catheter (Coronary IVL Catheter) for CY 2022. The applicant asserts the Coronary IVL Catheter is a proprietary lithotripsy device delivered through the coronary arterial system of the heart to the site of an otherwise difficult to treat calcified stenosis, including calcified stenosis that is anticipated to exhibit resistance to full balloon dilation or subsequent uniform coronary stent expansion.

According to the applicant, energizing the lithotripsy device generates intermittent sound waves within the target treatment site, disrupting calcium within the lesion and allowing subsequent dilation of a coronary artery stenosis using low balloon pressure. According to the applicant, the Coronary IVL System is comprised of the following components. (1) IVL Generator—a portable, rechargeable power source that is capital equipment and reusable.

(2) IVL Connect Cable—a reusable cable used to connect the IVL Generator to the IVL Catheter. (3) Coronary IVL Catheter—a sterile, single-use catheter that delivers intravascular lithotripsy within the target coronary lesion. According to the applicant, during a percutaneous coronary intervention (PCI) procedure, the physician determines that a lesion has severe calcification.

The applicant states the Coronary IVL Catheter is introduced into the lesion where lithotripsy is delivered to crack the calcification to facilitate the optimal dilatation of the vessel and placement of a coronary stent. The applicant adds that the Coronary IVL Catheter is removed, and the physician then implants a coronary stent to treat the lesion. The applicant asserts that the Coronary IVL Catheter is different from other devices used during PCI procedures as it delivers localized lithotripsy to crack the calcified lesion prior to the placement of a coronary stent.

According to the applicant there are other devices that may be utilized to remove calcium within the vessel (that is, atherectomy), however, these devices utilize some form of cutting or laser to remove or ablate the calcium and can Start Printed Page 63578 only address the calcium nearest to the vessel lumen. According to the applicant, the Coronary IVL Catheter addresses the calcium within the lumen as well as within the vessel walls. According to the applicant, the Coronary IVL Catheter is used to treat a subset of patients identified for a PCI procedure to treat their coronary artery disease where approximately 15 percent of lesions in patients being eligible for a PCI procedure have severe calcification.

The applicant adds the Coronary IVL Catheter is utilized during PCI procedures and does not replace any devices currently utilized to complete the procedure (for example, guidewires, angioplasty balloons, stent(s), vascular closure, etc.) that are packaged into the APC payment rate. According to the applicant, based on the FDA labeling for the Coronary IVL catheter, it is utilized prior to the placement of a coronary stent. With respect to the newness criterion at § 419.66(b)(1), the Coronary IVL Catheter received FDA PMA for the Shockwave Intravascular Lithotripsy (IVL) System with Shockwave C2 Coronary Intravascular Lithotripsy (IVL) Catheter on February 12, 2021 and is indicated for lithotripsy-enabled, low-pressure balloon dilatation of severely calcified, stenotic de novo coronary arteries prior to stenting.

The Coronary IVL Catheter received FDA Breakthrough Device designation on August 19, 2019, and is indicated for lithotripsy-enabled, low-pressure dilatation of calcified, stenotic de novo coronary arteries prior to stenting. We received the application for a new device category for transitional pass-through payment status for the Coronary IVL Catheter on February 26, 2021, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the Coronary IVL Catheter meets the newness criterion.

Comment. One commenter stated that the Coronary IVL Catheter meets the newness criteria. Response.

We thank the commenter for the information. Comment. In their comment the applicant concurred with CMS' conclusion that Coronary IVL Catheter meets the transitional pass-through criteria and supported CMS finalizing the transitional-pass through status for three years.

Response. Because we received the Coronary IVL Catheter pass-through application on February 26, 2021, which is within 3 years of February 12, 2021, the date of FDA premarketing approval for the device, we agree that the Coronary IVL Catheter meets the newness criterion. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the Coronary IVL Catheter is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically inserted in a patient until the procedure is completed.

The applicant also claimed that the Coronary IVL Catheter meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, 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. In the CY 2022 OPPS/ASC proposed rule, we invited public comments on whether the Coronary IVL Catheter meets the eligibility criteria at § 419.66(b). Comment.

One commenter stated that the regulation at § 419.66(b)(3) is clear that pass-through is not appropriate for “equipment, an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1).” [] The commenter stated we acknowledged in the CY 2022 OPPS/ASC proposed rule that the Shockwave System Generator, which is the “power source” for the Shockwave System, is “capital equipment” [] with the list price referenced for the Coronary IVL System and not just the Coronary IVL Catheter.[] Next the commenter stated that the proposed rule does not consider if the Generator, an excluded piece of capital equipment, is the key component of the Coronary IVL System, and contended that CMS did not consider whether the Generator, an excluded piece of capital equipment is a “key therapeutic component” of the Shockwave System, and as such, that the Shockwave System as a whole should not be eligible for device pass-through status. Response.

As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42089), Shockwave Medical submitted an application for a new device category for transitional pass-through payment status for the Coronary IVL Catheter, and not for the remainder of the Coronary IVL System, which includes the IVL Cable and Generator. Given that the IVL Cable and Generator are not single-use devices, they are not eligible for device pass-through status. The only part of this device that is eligible for device pass-through status is the Coronary IVL Catheter—a sterile, single-use catheter.

In terms of the commenter's contention that we have not evaluated which portion of the device is the key therapeutic component, we emphasize that the Coronary IVL Catheter is the device for which the applicant submitted an application for device pass-through status. We also note that we consider which portion of a combination product is the key therapeutic or diagnostic component solely for purposes of determining whether implantable biological products should be evaluated as drugs or devices for pass-through payment purposes (74 FR 60476). We do not determine which portion of a combination product is the key therapeutic or diagnostic component for purposes of analyzing a device's eligibility for pass-through status.

Nonetheless, if we were to consider the Shockwave Coronary IVL System as a whole, we would conclude that the Coronary IVL Catheter is the key therapeutic component as it is the component in the Shockwave System that is introduced into the lesion where lithotripsy is delivered to crack the calcification to facilitate the optimal dilatation of the vessel and placement of a coronary stent. Comment. The applicant concurred with CMS' conclusion that the Coronary IVL Catheter meets the transitional pass-through criteria, including the criteria at § 419.66(b), and supported CMS finalizing the transitional-pass through status for the Coronary IVL Catheter for 3 years.

Response. Based on the information we have received and our review of the application, we agree with the applicant that the Coronary IVL Catheter is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted, and therefore meets the requirements in § 419.66(b)(3). We also agree with the commenter that the Coronary IVL Catheter meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, 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.

Based on this assessment we have determined that the Coronary IVL Catheter meets the eligibility criteria at § 419.66(b)(3) and (4). The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS Start Printed Page 63579 determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996.

The applicant identified five established categories which they believe are not appropriate representatives of the Coronary IVL Catheter. (1) C1714 and C1724, which include devices that use mechanical cutting tools. (2) C1725, which includes balloon angioplasty.

(3) C1885, which uses laser, beams of light to break up vessel obstructions. And (4) C2623, which includes a drug coated balloon. We stated in the CY 2022 OPPS/ASC proposed rule that we had not identified an existing pass-through device category that describes Coronary IVL Catheter and we invited public comment on this issue.

Comment. In its comment, the applicant concurred with CMS' conclusion that Coronary IVL Catheter meets the transitional pass-through device category eligibility criteria at § 419.66(c)(1) and supported CMS finalizing transitional pass-through status for three years. Response.

We agree there is no existing pass-through device category that appropriately describes the Coronary IVL Catheter because no current category describes a balloon catheter that generates sonic pressure waves using lithotripsy that can break up calcification in arterial walls. Based on this information, we have determined that the Coronary IVL Catheter meets the eligibility criterion at § 419.66(c)(1). The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following.

(i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of FDA's Breakthrough Devices Program and has received FDA marketing authorization. As previously discussed in section IV.2.a above, we finalized the alternative pathway for devices that are granted a Breakthrough Device designation and receive FDA marketing authorization in the CY 2020 OPPS/ASC final rule (84 FR 61295).

The Coronary IVL Catheter has a Breakthrough Device designation and marketing authorization from FDA, and therefore, is not evaluated for substantial clinical improvement. We note that the applicant applied for the new technology add-on payment under the alternative pathway for Breakthrough devices as discussed in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45151 through 45153). In the FY 2022 IPPS/LTCH PPS final rule (86 FR 45153), CMS approved the Coronary IVL Catheter for new technology add-on payments.

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the Coronary IVL Catheter meeting the cost significance requirements.

The applicant stated that the Coronary IVL Catheter would be reported with the HCPCS codes listed in the following Table 34. Start Printed Page 63580 To meet the cost criterion for establishing a device category, a device must pass all three cost criteria for at least one APC. For our calculations for the CY 2022 OPPS/ASC proposed rule, we used APC 5193—Level 3 Endovascular Procedures, which had a CY 2021 payment rate of $10,042.94 at the time the application was received.

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 for the Coronary IVL Catheter of $5,640 is 56 percent of the applicable APC payment amount for the service related to the category of devices of $10,042.94 (($5,640/10,042.94) × 100 = 56 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe the Coronary IVL Catheter meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657). HCPCS code 92928 had a device offset amount of $3,607.42 at the time the application was received.

The estimated average reasonable cost for the Coronary IVL Catheter of $5,640 is 156 percent of the cost of the device-related portion of the APC payment amount for the related service of $3,607.42 (($5,640/$3,607.42) × 100 = 156 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe that the Coronary IVL Catheter meets the second cost significance requirement. The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service.

The difference between the estimated average reasonable cost of $5,640 for the Coronary IVL Catheter and the portion of the APC payment amount for the device of $3,607.42 is 20 percent of the APC payment amount for the related service of $10,042.94 (($5,640−$3,607.42)/$10,042.94) × 100= 20 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe that the Coronary IVL Catheter meets the third cost significance requirement. We invited public comment on whether the Coronary IVL Catheter meets the device pass-through payment criteria discussed in this section, Start Printed Page 63581 including the cost criterion for device pass-through payment status.

Comment. One commenter asserted that CMS' review of the Shockwave System (Coronary IVL) was based on an incorrect CPT/APC pairing and an assessment of charges, not actual costs. The commenter stated that CMS' analysis is contrary to its own regulation because it did not reference “the applicable APC.” [] According to the commenter, if APC 5194 (Level 4 Endovascular Procedures) is used to assess the Shockwave System, and not APC 5193 (Level 3 Endovascular Procedures), it is clear that the Shockwave System would not meet any of the three cost criteria.

The commenter makes a number of arguments about why it believes APC 5194 is “the applicable APC,” including that that the applicant referenced 92933 (Percutaneous transluminal coronary atherectomy, with intracoronary stent, with coronary angioplasty when performed. Single major coronary artery or branch) which the commenter explains maps to APC 5194, not APC 5193.[] According to the commenter, the applicant is clearly targeting this APC, as the applicant references a targeted population of patients with calcified lesions of approximately 15 percent of patients; [] this population maps to I25.84 (Coronary atherosclerosis due to calcified coronary lesion) for which a matching percentage of patients links to 92933 (and APC 5194), not 92928 (Percutaneous transcatheter placement of intracoronary stent(s), with coronary angioplasty when performed. Single major coronary artery or branch) (and APC 5193).[] The commenter further asserted that in its development of the Shockwave System, the applicant references coronary orbital atherectomy (OA), which, in fact, breaks up and removes calcium, as occurs in atherectomy.[] According to the commenter, the applicant's public comments clearly present the Shockwave System as a replacement to atherectomy.[] The commenter stated that the proposed rule states that the pass-through criteria can be satisfied if “any” APC meets the criteria but refers to the regulation, which states the pass-through cost criteria can be met if “the applicable” APC is used.

The commenter contended that it is clear the applicable APC for the Shockwave System is 5194 and not 5193. The commenter added that some stakeholders are under a misconception that, if the Shockwave System is granted pass-through status based on an analysis of the cost criterion using a pairing of 92928 and APC 5153, additional pass-through payments will nevertheless be available when the Shockwave System is billed under APC 5194. The commenter asked CMS to ensure, if the agency confirms its quarterly pass-through determination for the Shockwave System, that appropriate safeguards are in place so that inappropriate payments are not made in connection with APC 5194.

The commenter next asserted that the Shockwave System cost significance test is based on list prices and not costs, is inadequately supported, and is inconsistent with available cost data. According to the commenter, the device cost used in assessing the cost criteria requirement reflects a list price and is contrary to publicly available information on Shockwave System pricing. The commenter stated that there are substantially more C9600 (Percutaneous transcatheter placement of drug eluting intracoronary stent(s), with coronary angioplasty when performed.

Single major coronary artery or branch) claims ( i.e., 90,889) with drug-eluting stents than 92928 ( i.e., 6,357) with bare metal stents, where the device-related portion is higher. The commenter asserted that CMS did not provide any information in the CY 2022 OPPS/ASC proposed rule about why 92928 was used instead of C9600. The commenter explained that it is not clear to them why CMS chose 92928 instead of C9600 to perform the cost significance calculations for the cost criterion.

The commenter then asserted that CMS, without providing factual support, stated that the average reasonable cost for Coronary IVL is $5,640. According to the commenter, in the IPPS/LTCH final rule (86 FR 44774, 45153) CMS used a value of $5,640 for the Shockwave System, but did not reference the IPPS/LTCH final rule in the CY 2022 OPPS/ASC proposed rule. The commenter went on to explain that CMS based this figure on a cost for the Shockwave System of $4,700 per device × 1.2 devices required per case, and stated that CMS finalized this cost for the System “as a whole” without supporting this calculation except using preliminary information from the applicant.

The commenter asserted that, under the Administrative Procedures Act, 5 U.S.C. 553(b), an agency is required, in order to provide stakeholders with reasonable notice and opportunity to comment, to provide the factual basis that supports its proposal. The commenter added that CMS' failure to provide any support for its proposal is precisely the kind of defect in process that courts have repeatedly cautioned against.

According to the commenter, in a published article, citing a Shockwave earnings call, the Shockwave national list price was stated to be $4,700.[] The commenter asserted that a list price is a charge and not a reflection of actual cost and does not address any discounts, rebates, free goods contingent on a purchase, or other price concessions. The commenter noted that blinded market research revealed prices to some purchasers as low as $4,200 and possibly lower. Additionally, the commenter noted that in the proposed rule the applicant used a multiplier of 1.2 devices required per case to calculate the $5,640 used in assessing whether the device meets the cost criterion.

According to the commenter, such a multiplier is not cited in the proposed rule and was not, therefore, framed appropriately for comment as part of this rulemaking. The commenter added three concerns related to the multiplier. (1) Use of a multiplier magnifies the invalid impact of incorrectly included “equipment” (the Generator) and a reusable item (the Cable) because the Generator and Cable would not be used in more than one case.

(2) neither the CY 2022 OPPS proposed rule nor the FY 2022 IPPS/LTCH final rule included data or support for the assertion that 1.2 devices are required per case. And (3) use of a multiplier is not appropriate where, as here, the pass-through regulation requires a “reasonable” estimate of costs and more than one device would be used in less than twenty percent of all cases. The commenter contended that CMS should use medians, rather than Start Printed Page 63582 averages, because of what the commenter believed was the inaccurate nature of averages in circumstances like these.[] Response.

We appreciate the additional information provided by the commenter. We disagree with the commenter's assertion that the proposed rule references the incorrect HCPCS/APC pairing. Question D.7.

Of the device pass-through application states. Using Healthcare Common Procedure Coding System (HCPCS) Level I and/or Level II code(s), list all of the specific procedure(s) and/or services with which the nominated device is used. The applicant for the Coronary IVL Catheter provided a complete list of HCPCS codes with which their device can be billed.

CMS evaluated the complete list of HCPCS codes to ensure each code represented a procedure with which the Coronary IVL Catheter could be used. Consistent with our evaluation of every other device pass-through application, we identify the applicable APC with which to evaluate the cost of the device against the cost significance tests at § 419.66(d). There are numerous APCs to which procedures with which the Coronary IVL Catheter can be performed are assigned.

As we explained in the CY 2005 OPPS final rule (69 FR 65775), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Furthermore, we disagree with the commenter's assertion that CMS should limit pass-through payments to one APC (5193) versus another (5194). The applicant identified HCPCS codes which CMS agrees align appropriately to both APC 5193 and 5194.

Consistent with CMS' policy, we are not limited in applying pass-through payments to only the HCPCS/APC combination that was used in the cost significance test, but rather the entire list of procedures which appropriately represent the technology. We disagree with the commenter's assertions that the CY 2022 OPPS/ASC proposed rule uses an assessment of charges, as opposed to cost, and failed to give commenters an opportunity to comment. As we stated in the proposed rule, according to the applicant the Coronary IVL System is comprised of the following components.

(1) IVL Generator—a portable, rechargeable power source that is capital equipment and reusable. (2) IVL Connect Cable—a reusable cable used to connect the IVL Generator to the IVL Catheter. (3) Coronary IVL Catheter—a sterile, single-use catheter that delivers intravascular lithotripsy within the target coronary lesion.

Given that parts one and two are not single-use devices, they are not under consideration for device pass-through status. The only part of this device which is under consideration for device pass-through payments is the Coronary IVL Catheter—a sterile, single-use catheter. According to the applicant, the expected average sales price of each Shockwave C2 Coronary IVL single-use catheter is $4,700.

We acknowledge that in the CY 2022 OPPS/ASC proposed rule, we did not state that, per the applicant, the average number of catheters required per case is 1.2 based on the applicant's clinical trial experience. The applicant therefore calculated an expected cost to hospitals on a per-case basis for the Coronary IVL Catheter of $5,640. Based on our analysis, which includes a review by CMS clinical professionals, we agree with the applicant that the average number of catheters required per case is 1.2 and therefore, that a multiplier of 1.2 is appropriate in this situation.

We appreciate the commenter identifying this information. We note that regardless of the value used, $4,700 (for one Coronary IVL Catheter per case) or $5,640 (for 1.2 Coronary IVL Catheters per case), the Coronary IVL Catheter meets the cost significance tests at § 419.66(d). Finally, we are clarifying that although the FY 2022 IPPS/LTCH PPS final rule referred to the Shockwave C2 Intravascular Lithotripsy (IVL) System when discussing whether the device met the cost criterion for new technology add-on payments, we considered the cost only of the Coronary IVL Catheter in that determination.

Comment. This same commenter asserts that the proposed rule failed to provide stakeholders with a reasonable opportunity to comment on issues central to the pass-through determination. The commenter asserted that the quarterly, sub-regulatory determination made for pass-through status for the Coronary IVL Catheter is invalid following the Supreme Court's decision in Azar v.

Allina Health Services, 139 S. Ct. 1804 (2019).

Based on these assertions, the commenter stated that the Coronary IVL Catheter should not be approved for pass-through status and the quarterly determination should be rescinded. The commenter stated that our process of approving applications for device pass-through status on a quarterly basis predates the Supreme Court's decision in Allina and should “appropriately conform to the rulemaking obligations set forth in Allina ”.[] The commenter concludes that the Shockwave System pass-through determination was invalid and in excess of CMS' authority and it should, therefore, be rescinded. Response.

We disagree with the commenter's assertion that the quarterly determination process is invalid, and that the quarterly, sub-regulatory determination to grant pass-through status for the Coronary IVL Catheter is invalid following Allina. We note that in the CY 2016 OPPS/ASC final rule (80 FR 70417-70418) CMS finalized through notice and comment rulemaking its proposal to revise the application process for device pass-through payments. Specifically, CMS stated that starting in CY 2016 all device pass-through payment applications submitted through the quarterly process would be subject to notice-and-comment rulemaking in the next applicable OPPS annual rulemaking cycle.

Furthermore, under the finalized policy, CMS stated that all applications that are approved upon quarterly review will automatically be included in the next applicable OPPS annual rulemaking cycle, and any information provided by the applicant would be available for consideration during the public comment process for the proposed rule. CMS stated that this process would allow those applications that meet all criteria to receive timely pass-through payment status, while also allowing for a transparent public review process for all applications as part of the next available rulemaking. Finally, we note that the quarterly approval process does not establish or change a substantive legal standard governing the scope of benefits or the payment for services, but only applies substantive legal standards adopted through notice and comment rulemaking to determine whether a particular device should qualify for pass-through status.

Comment. In their public comment, the applicant stated that there are two issues associated with CMS' evaluation and implementation of transitional device pass-through payment status for the Coronary IVL Catheter that they wanted to bring to CMS' attention. In CMS Transmittal 10825, dated June 11, 2021, CMS limited HCPCS code C1761 to being reported with two procedures that describe placement of a coronary stent (HCPCS codes 92928 and C9600).

The applicant noted that CMS most recently published Transmittal 10997, dated September 16, 2021, which added four additional HCPCS codes—92933, Start Printed Page 63583 92943, C9602, and C9607—that can also be billed in conjunction with HCPCS code C1761 and be eligible for transitional pass-through effective July 1, 2021. The applicant noted that CMS included the device offset associated with these codes when calculating the incremental transitional pass-through payment when HCPCS code C1761 is billed. The applicant believes CMS applied the device offset for HCPCS codes 92933, 92943, C9602, and C9607 as an oversight, and requested that CMS remove the device offset for these codes when calculating the incremental transitional pass-through payment when billed in conjunction with C1761 because, similar to the determination for HCPCS codes 92928 and C9600, no device offset should be implemented as IVL costs are completely additive to the procedure and the devices represented by the device offset in each procedure are still required.

Response. We disagree with the applicant's request to remove the device offset for HCPCS codes 92933, 92943, C9602 and C9607 when calculating the incremental transitional pass-through payment when billed in conjunction with HCPCS code C1761. In the above-identified procedures, the Coronary IVL Catheter is used in lieu of atherectomy to achieve a therapeutic outcome.

Therefore, we believe a device offset as identified in Transmittal 10997 dated September 16, 2021 is warranted when HCPCS code C1761 is used in conjunction with these particular procedures. Comment. The applicant stated that while they agree that Coronary IVL Catheter meets all three cost criteria based on CMS' methodology, they are concerned that the methodology CMS utilizes is not the most appropriate for procedures that require the use of multiple devices.

The applicant contends that CMS utilizes the entire device-related portion (DRP) as reported for the applicable procedure instead of evaluating the cost of the new technology relative to the specific devices that it is replacing. The applicant asserted that CMS has removed the device offset for other technologies that have received transitional pass-through payment where new technologies are completely additive to the procedure. The applicant stated that CMS does not utilize a similar methodology when evaluating the three cost criteria.

The applicant asserted that this may create an artificially high bar that would make new technology that would otherwise qualify for pass-through status ineligible, which the applicant believes is the case for the EluviaTM system. The applicant requested that CMS update its methodology for current and future transitional pass-through applications where multiple devices are utilized. Response.

We thank the applicant for their input in regard to the calculation of the cost significance criterion, which we will take into consideration for future rulemaking. For a more detailed discussion of this issue as it relates to the EluviaTM system, please see section IV(a)(2)(b)(3) of this final rule with comment period. After consideration of the public comments we received and our review of the device pass-through application, we have determined that Coronary IVL Catheter meets the requirements for device pass-through payment status described at § 419.66.

As stated previously, devices that are granted an FDA Breakthrough Device designation are not evaluated in terms of the substantial clinical improvement criterion at § 419.66(c)(2)(i) for purposes of determining device pass-through payment status, but must meet the other criteria for device pass-through status, which we believe the Coronary IVL Catheter does. As specified above, the Coronary IVL Catheter pass-through application was preliminarily approved for transitional pass-through payment under the alternative pathway effective July 1, 2021. We note that in the CY 2022 OPPS/ASC proposed rule we invited public comments on whether the Coronary IVL Catheter should continue to receive transitional pass-through payment under the alternative pathway for devices that are FDA market authorized and that have an FDA Breakthrough Device designation.

We are finalizing our proposal to continue in 2022 device pass-through payment status for the Coronary IVL Catheter under the alternative pathway for devices that have an FDA Breakthrough Device designation and have FDA marketing authorization. 2. Traditional Device Pass-Through Applications (1) AngelMed Guardian® System Angel Medical Systems submitted an application for a new device category for transitional pass-through payment status for the AngelMed Guardian® System (the Guardian®) for CY 2022.

The applicant asserted that the Guardian® is a proactive diagnostic technology that monitors a patient's heart's electrical activity for changes that may indicate an Acute Coronary Syndrome (ACS) event (that is, STEMI, NSTEMI, or unstable angina) related to blockage of a coronary artery which prevents the heart muscle from receiving sufficient oxygen. The Guardian® is a device implanted in the upper left chest and connects to an active fixation intracardiac lead attached to the apex of the right ventricle. The applicant asserts the Guardian® consists of an implantable medical device (IMD) which is composed of the header with an antenna for communication and the can with circuitry, radio, vibratory motor, and battery.

According to the applicant, the Guardian® system also includes an external device that communicates with the IMD and provides redundant patient notification using auditory and visual alarms. Lastly, the applicant states the Guardian® system includes a physician programmer, a capital device, used to program the IMD and download cardiac data captured by the IMD. According to the applicant, the Guardian® system relies upon the gold standard of changes to the ST-segment of a patient's heartbeat to diagnose a heart attack.

According to the applicant, the Guardian® system uses an intracardiac lead to sense cardiac data and proprietary machine learning algorithms to assess acute changes to the ST-segment on a continuous, real-time basis. The applicant asserts these changes are compared to a patient's normal baseline reference that is computed over the prior twenty-four hours of monitored heart activity. According to the applicant, if the Guardian® detects a statistically abnormal acute change relative to this baseline, it notifies the patient to the potential ACS event by providing an alarm.

The implanted device will vibrate, and the external device will flash and beep. According to the applicant, patients are instructed to seek urgent medical assistance when the system activates, even in the absence of ACS symptoms. According to the applicant, the Guardian® system implantation will typically be an outpatient procedure and, following 10-14 days, is programmed in the physician office.

The applicant asserts the patient undergoes training on the Guardian® and has follow-up visits every six months to review the device data. The applicant states that the emergency alarm is intended to be used as an adjunct to symptoms. In the absence of an emergency alarm patients are instructed not to ignore symptoms of an ACS event.

The applicant asserts that while current technologies detect and provide therapy for cardiac medical conditions related to abnormal heart rate and rhythm, the AngelMed Guardian® system is the only FDA- Start Printed Page 63584 approved technology for providing detection and patient notification of ACS events so that patients more reliably and urgently seek medical care. With respect to the newness criterion at § 419.66(b)(1), the AngelMed Guardian® system first received FDA 510(k) clearance on April 9, 2018 under PMA number P150009. The manufacturers received a Category B Investigational Device Exemption (IDE) as of January 27, 2020 for the use of the device in their continued access study, AngelMed for Early Recognition and Treatment of STEMI (ALERTS).

According to the applicant, the device is anticipated for US market availability in quarter three of 2021. We received the application for a new device category for transitional pass-through payment status for the Guardian® system on February 28, 2021, which is within 3 years of the date of the initial FDA marketing authorization. We solicited public comment in the CY 2022 OPPS/ASC proposed rule on whether the Guardian® system meets the newness criterion.

Comment. The applicant reasserted that the Guardian® meets the newness criterion at § 419.66(b)(1) as the application was submitted within 3 years of FDA approval. Response.

We appreciate the commenter's input and agree that because we received the application for the Guardian® on February 28, 2021, which was within 3 years of the FDA premarketing approval on April 9, 2018, the Guardian® meets the newness criterion. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the Guardian® is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically inserted temporarily. The applicant also claimed that the Guardian® meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service.

We invited public comments in the CY 2022 OPPS/ASC proposed rule on whether the Guardian® meets the eligibility criteria at § 419.66(b). Comment. The applicant stated the Guardian® meets the eligibility criteria at § 419.66(b)(3) and 419.66(b)(4) as the Guardian® is used for one patient only, comes in contact with human tissue, and is surgically inserted.

Response. Based on the information we have received and our review of the application, we agree with the applicant that the device is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted. We also agree with the commenter that the Guardian® meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, 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.

Based on this assessment we have determined that the Guardian® meets the eligibility criterion at § 419.66(b)(3) and (4). The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996.

We stated in the CY 2022 OPPS/ASC proposed rule that we have not yet identified an existing pass-through payment category that describes the Guardian®. We invited public comment on whether the Guardian® meets the device category criterion. Comment.

The applicant asserted the Guardian® meets the first criterion for establishing a new device category, at § 419.66(c)(1), as no existing categories or categories previously in effect appropriately describe the technology. Response. We agree there is no existing pass-through payment category that appropriately describes the Guardian® because no current or previously in effect category describes a device that provides detection of ACS events and notification to a patient.

Based on this information, we have determined that the Guardian® meets the eligibility criterion at § 419.66(c)(1). The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following. (i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment.

Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of FDA's Breakthrough Devices Program and has received FDA marketing authorization. The applicant stated that the Guardian® represents a substantial clinical improvement over existing technologies. With respect to this criterion, the applicant asserted that the Guardian® offers the ability to diagnose a medical condition in a patient population where that medical condition is currently undetectable or offers the ability to diagnose a medical condition earlier in a patient population than is currently possible and this earlier diagnosis results in better outcomes.[] In support of this claim the applicant submitted two published articles, the first by Gibson et al.

And the second by Holmes et al.[] The first study is a randomized control trial with 907 subjects who were implanted with the Guardian® system and randomized 1:1 to either active or deactivated alarms.[] According to the authors, all subjects received education regarding the importance of minimizing symptom-to-door time in the presence of chest pain or ischemic equivalents, regardless of alarm status. The authors state that patients were not blinded to their randomization status. After randomization patients returned for follow-up visits at 1, 3, 6, and every six months thereafter.

In all patients, the Guardian® system captured electrogram data up to 24 hours before and 8 hours after a triggered alarm for later review. According to the authors, the primary safety endpoint was the absence of system-related complications that required a system revision or invasive intervention to resolve in at least 90 percent of subjects through six months. The primary efficacy endpoint was a composite of.

(1) Cardiac or unexplained death. (2) new Q-wave MI. And (3) detection-to-presentation time >2 h for a documented coronary occlusion event.

Electrocardiogram (ECG) tracings were obtained prior to implantation, at randomization, at 1, 3, and 6 months, and at every emergency presentation to evaluate for a Q-wave MI not present at baseline. An exploratory Start Printed Page 63585 dual baseline ECG analysis was performed, according to the authors, because Q-waves may be transient between implantation and randomization. The dual baseline ECG analysis evaluates for the presence of new Q waves across subsequent ECGs.

At the start of the trial, 456 patients were identified as controls and 451 as treated. At 6 months, 446 controls remained and 437 treated remained. The authors stated that subject enrollment ceased after 900 subjects were randomized and therefore an alpha penalty of 0.25 was taken for the interim look at event rates after 600 subjects.

According to the authors, the control and treatment groups were well matched at baseline.[] The primary safety endpoint was met with 96.7 percent freedom (posterior probability >0.999) with a total of 31 system-related complications in 30 (3.3 percent) subjects with s being the predominant cause of complications. The authors stated that ACS events occurrence was low. At 7, 30, 50, 70, and 90 days there were no statistical differences between the control and treated groups on the primary composite efficacy endpoint.

At each time interval, the treated group had lower rates of the primary endpoint than the control group. Statistical differences were observed between treated and control groups in the dual baseline ECG exploratory analysis particularly at 50, 70, and 90 days after a confirmed occlusive event favoring the treated group. At the pre-specified 7-day look back window, the median time from the Guardian® notification to arrival at a medical facility was 51 minutes for the treated subjects as compared to 30.6 hours for control subjects (Pr [pt <.

Pc] >0.999). Subject arrival within 2 hours of a detected and confirmed coronary occlusion occurred in 85 percent (29 of 34) of the treatment group compared with only 5 percent of the control group, with the majority of patients in the control arm presenting after 7 days. However, the authors asserted that despite a numerical reduction in new Q-wave MI using single and dual baseline ECGs at any of the pre-specified look-back windows, the posterior probability of superiority did not reach statistical significance.

The applicant added that 22 percent (42/193) of the confirmed ACS events were detected due to Emergency Department (ED) visits prompted by alarms in the absence of symptoms. That silent MIs typically account for approximately 30 percent of all MIs and are historically associated with increased rates of morbidity and mortality.[] The second article expanded on the previously discussed study with a post hoc analysis of two coprimary efficacy endpoints. Superiority of positive predictive value (PPV) and noninferiority of false positive rate for ED visits prompted by alarms compared to symptoms-only.[] According to the authors, these primary endpoints were assessed by comparing ED visits for an Alarms OFF group (control subjects during the randomized 6-month period) to those of an Alarms ON group (including both the treatment subjects during the first 6 months and all implanted patients beyond 6 months with alarms activated).

The authors stated the expanded analysis adjudicated ED visits into either true or false-positive ACS events based on independent review of cardiac test data. The authors stated that the annual rate for Clinical Events Committee (CEC)-adjudicated ACS events was 0.151 (33 of 218.15) in the Alarms OFF group and 0.124 (193 of 1,557.64) in the Alarms ON group. In the Alarms OFF group, of the 181 ED visits, the CEC adjudicated 33 (18 percent) as ACS events (MI = 22 [67 percent].

Unstable angina (UA) 1/4 11 [33 percent]), with the remaining visits adjudicated as due to either stable CAD or indeterminate etiology. The median symptom-to-door time for Alarms OFF ACS events was 8.0 h (95 percent confidence interval [CI]. 3.2 to 47.5 h).

In Alarms ON subjects, of the 970 ED visits, the CEC adjudicated 193 (20 percent) as ACS events, with the remainder classified as stable CAD, indeterminate events, and/or a false-positive alarm. Of the 193 ACS events, 89 events (46 percent) were prompted by alarms (with or without symptoms. MI 1/4 40 [45 percent].

UA 1/4 49 [55 percent]). The remaining 104 visits (54 percent) were prompted by symptoms only (MI 1/4 60 [58 percent]. UA 1/4 44 [42 percent]).

An overall median arrival time of 1.7 h was found for the Alarms ON group composite including all 3 prompt types for ED arrival (alarms only, alarms þ symptoms, or symptoms only), which was significantly shorter than the 8.0 h delay of the Alarms OFF group (p <. 0.0001). The applicant asserts that the Guardian® system allows patients with asymptomatic ACS events to respond to the ED faster with a median pre-hospital delay of 1.4 hours.

The applicant further asserts that the Guardian® system offers more rapid beneficial resolution of the disease process treated because of the use of the device. According to the applicant, the Guardian® system increases the likelihood that a patient will correctly seek medical care for an ACS event in a timely manner that reduces pre-hospital delay and associated risk of heart damage (for example, larger infarct size, ejection fraction decrement) [] and associated downstream sequelae. More specifically, the applicant asserts that based on the results of the second discussed study, the Guardian® system Alarms ON group showed reduced pre-hospital delays, with 55 percent (95 percent confidence interval [CI].

46 percent to 63 percent) of Emergency department visits for ACS events <2 hours compared with 10 percent (95 percent CI. 2 percent to 27 percent) in the Alarms OFF group (p <. 0.0001).[] The applicant adds that results were similar when restricted to myocardial infarction (MI) events.[] The applicant states the median pre-hospital delay for MI was 12.7 hours for Alarms OFF compared to 1.6 hours in Alarms ON subjects (p <.

0.0089) as reported in Start Printed Page 63586 Holmes et al. (2019).[] The applicant asserts that it is clinically recognized, due to numerous lines of evidence, that shorter total ischemia time is associated with better outcomes for ACS events.[] The applicant asserts that prompt responsiveness to symptoms and decreased pre-hospital delay is a universally understood benefit which improves the health outcomes of ACS events. According to the applicant, the American Heart Association (Mission Lifeline), American College of Cardiology (Door to Balloon (D2B) Alliance), Society for Angiographic Intervention (Seconds CountTM program) and the National Heart, Lung, and Blood Institute have organized task forces and launched national programs with the goal of improving patient awareness and response to symptoms which are indicative of potential ACS events and reducing total ischemia time (that is, prehospital delay and in-hospital delay) to improve outcomes.

The applicant next asserts the device offers more rapid beneficial resolution of the disease process because the use of the Guardian® system, as compared to the standard of care relying on symptoms alone, being in the Alarm ON group was associated with a reduction in the rate of new onset of left ventricular dysfunction.[] Lastly the applicant asserts the use of the Guardian® system will decrease the number of future hospitalizations or physician visits. According to the applicant, the Guardian® system reduces the annual false positive rate (FPR) of Emergency Department visits (that is, spurious ED visits where no ACS is found) by 26 percent.[] The applicant states that the FPR for all alarms on emergency visits was 0.499 per patient-year compared to 0.678 for alarms off (p <. 0.001).[] Based on the evidence submitted with the application, we have the following observations.

Much of the claims for substantial clinical improvement are derived from two primary studies identified by the applicant and discussed above.[] We note that the first study (Gibson et al. 2019) did not demonstrate statistically significant superiority of the intervention during the pre-determined study window. The authors noted a lower than expected frequency of events and the study was terminated early, two factors which may have affected these results.

The results from the second study are based entirely on a post hoc analysis of data from the first article. We note that the findings presented are valuable but we sought comment on whether a post hoc analysis provides sufficient evidence to support the claim of substantial clinical improvement. Furthermore, we note that the primary efficacy endpoint was a composite of three outcomes.

We are not certain that this endpoint is an appropriate measure with which to evaluate substantial clinical improvement among patients experiencing ACS events. We invited public comments on whether the Guardian® system meets the substantial clinical improvement criterion. Comment.

Many commenters offered support for the approval of the Guardian®. Numerous commenters noted that according to published studies a reduction in ischemic time is associated with less cardiac damage and better outcomes for ACS events. These commenters asserted that the Guardian® brought patients to the emergency room earlier and more reliably, which resulted in better outcomes.

Some commenters stated that the two studies submitted by the applicant and described in the CY 2022 OPPS/ASC proposed rule [] support the finding of a substantial clinical improvement. Some commenters noted that detection of silent MI enables the diagnosis of a medical condition that is currently undetectable, which the commenters believe is a substantial clinical improvement. Many commenters stated that the use of the Guardian® will reduce unnecessary medical utilization, will be beneficial particularly for those who experience silent myocardial infarction, and will prevent cardiac deaths.

Many commenters offered patient stories that in their opinion showed that the Guardian® offers an improvement over existing treatment options. Multiple commenters noted that the Guardian® offers patients positive mental health outcomes given a reduction in experience anxiety in high-risk ACS patients. Additionally, multiple commenters stated that the total false positive rate for the ALERTS ON group was statistically less than that of the ALERTS OFF group.

One commenter stated they have been using the Guardian® for more than ten years, that the device is a valuable addition to diagnostic capabilities, and that in many cases it reduces health care utilization. A second commenter stated this technology represents a significant improvement to detecting myocardial infarction promptly. One commenter who described their experience seeing the exam prevent multiple cardiac catheterizations noted the exam is invaluable to modern medicine and that a reduction in reimbursement would threaten its realization in the appropriate context.

Another commenter noted that almost all patients requested replacement of the Guardian® when it reached end of battery life, which is indicative of its safety and effectiveness. Response. We thank the commenters for additional information to support their belief that the Guardian® device is a substantial clinical improvement over Start Printed Page 63587 devices in existing categories or other available treatments.

Comment. The applicant asserted the Guardian® meets the second criterion for establishing a new device category, at § 419.66(c)(2), by providing a substantial clinical improvement over existing therapies because the Guardian® “has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury compared to the benefits of a device or devices in a previously established category or other available treatment”. The applicant pointed out that in the CY 2022 OPPS/ASC proposed rule we stated that the positive predictive value (PPV), false positive rate (FPR), and Silent myocardial infarction (MI) endpoints were reported in the “second study” (that is, Holmes et al.).

The applicant clarified that Gibson et al. Reported on both the original study analysis and the Expanded analysis, including the PPV, FPR, and Silent MI endpoints. Holmes et al.

Reported on pre-hospital delays and their distribution as a function of both prompt (alarm only, alarm + symptom, symptom only) and group (Alarms On vs Alarms OFF). In response to our concerns about the primary endpoints lacking statistical significance the applicant stated both AngelMed and FDA have expressed the position that the results of the ALERTS study are best assessed using the lens that statistical significance of primary endpoints should be assessed with respect to the totality of the data. The applicant stated the endpoint analyses requested by FDA for primary endpoints during its evaluation of the study data (for example, event based or crossover analysis) reached statistical significance.

The applicant added as an example that an event-based analyses of the composite primary endpoints of the original study reached statistical significance when multiple events within patients were counted, rather than relying upon a patient-based analysis in which each patient could only be counted once. According to the applicant, since multiple events may occur in a single patient, they believe that the primary endpoint data is also valid and more accurately and realistically reflects Medicare patient experiences. The applicant added that the non-primary endpoint of sustained left ventricular ejection fraction (LVEF), which was independent of the primary endpoint measures, was statistically superior (Gibson et al.

2019, p. 1924).[] The applicant added that the Expanded analysis was explicitly designed to address the event rate seen in the original study design by leveraging the post-randomization data to derive a dataset covering an approximately three times larger study interval, which according to the applicant, greatly increased the number of events and statistical power. The applicant concluded that while not all endpoints reached statistical significance, AngelMed believes that the totality of the data supports substantial clinical improvement.

In response to our concerns about post-hoc validity, the applicant believes the Expanded analysis supports substantial clinical improvement for a number of reasons. The applicant acknowledged as noted by Gibson et al.,[] some post-hoc analyses were done in the original analysis but that the Expanded analysis was not post-hoc. The applicant asserted the Expanded analysis was a pre-specified analysis proposed by FDA, and agreed upon by AngelMed, that was completed using data both from the original randomized period and a large amount of data from the post-randomization period.

While the post-randomization data was captured with the same rigor and predefined procedures as the randomization period, the Expanded analysis increased the pool of data from less than 450 years to 1,500 years. The applicant explained that this approach was adopted by FDA and AngelMed specifically with the aim of greatly increasing the number of endpoint events and maximizing the statistical power of the Expanded analysis for the new endpoints, new definition of acute coronary syndrome (ACS), etc. The applicant added that the Expanded analysis used a new analysis protocol which resulted in data which were analyzed to obtain new, distinct, and meaningful endpoints that used clearer measurements than the ALERTS design.

Lastly, the applicant responded to our concerns regarding appropriate measure[s] with which to evaluate substantial clinical improvement. The applicant reasserted that the original analysis used a composite primary efficacy endpoint of three outcomes that provided an initial assessment of the technology. The applicant asserted that the individual components of the primary efficacy endpoint for arrival times and new Q-waves were consistently in favor of the Guardian® with arrival times reaching significance.

The applicant stated, as CMS noted, in the original ALERTS analysis “at the pre-specified 7-day look back window, the median time from the Guardian® notification to arrival at a medical facility was 51 minutes for the treated subjects as compared to 30.6 hours for control subjects (Pr [pt <. Pc] >0.999)” (86 FR 42092). The applicant added these results should be combined with the Expanded analysis endpoints, which used new measures that reflected a better understanding by FDA and AngelMed for how best to evaluate the real-world impact of the Guardian System, when assessing substantial clinical improvement.

The applicant asserted that more specifically, the co-primary endpoints ( i.e., PPV and FPR) reflected real-world performance measures that were suggested by FDA and that more accurately demonstrate, and provide a complementary view of, the clinical benefit than the composite endpoints of the original ALERTS design. The applicant asserted that the main topics of interest for the Expanded analysis were the alarms in terms of frequency and accuracy, and how the subjects responded ( e.g., distribution of patient pre-hospital delay for each of the different prompts. Alarm + symptom.

Alarms only. Or, symptom only). According to the applicant the Expanded analysis not only assessed device performance but also the behavior of the individual subjects in the Alarms ON group prompted by the alarms, symptoms or both.

The applicant contended that the combination of the original study endpoints and Expanded analysis endpoints are the correct measures since these are able to show substantial clinical improvement according to multiple device pass-through criteria the ability to diagnose a medical condition that is currently undetectable, diagnose a medical condition earlier in a patient population then is currently available, decrease future hospitalizations, and improve patient outcomes. The applicant asserted that all the ALERTS data consistently showed compelling and statistically significant reduction in pre-hospital delays in the Alarms ON group compared to the Alarms OFF group. According to the applicant, reduced total ischemic time is a correct measure for assessing substantial clinical improvement since Start Printed Page 63588 it is a universal axiom that decreased delay decreases the associated risk of heart damage ( e.g., larger infarct size, ejection fraction decrement);[] the applicant asserted that shorter total ischemic time is associated with better outcomes for ACS events.[] That is why, according to the applicant, multiple national agencies, including ACC, SCAI, AMA and NHLBI, have created programs specifically focused on reducing time to treatment for ACS events and have used time-based metrics as their sole assessment of provider quality for ACS care.[] For these reasons the applicant believes that the combination of original and Expanded analysis results provides clear evidence of substantial clinical improvement for high-risk ACS patients experiencing ACS events.

Response. We appreciate the additional information provided by the commenters. In the proposed rule, we articulated tour concern about the sufficiency of a post-hoc analysis.

In their public comment the applicant asserted that while some post-hoc analyses were performed, the expanded analysis was a pre-specified analysis proposed by FDA. We further appreciate the clarification from the applicant that the expanded analysis increased the number of endpoint events. Given the additional endpoints evaluated in the expanded analysis that specifically show faster visits for real events while not increasing unnecessary emergency department visits, we agree that the Guardian® system meets the substantial clinical improvement criterion at § 419.66(c)(2).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements.

The applicant stated that the Guardian® would be reported with the HCPCS codes listed in the following Table 35. To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. For our calculations for the CY 2022 OPPS/ASC proposed rule, we used APC 5222—Level 2 Pacemaker and Similar Procedures, which had a CY 2021 payment rate of $8,152.58 at the time the application was received.

Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657). HCPCS code 0527T was assigned to APC 5222 and had a device Start Printed Page 63589 offset amount of $1,598.72 at the time the application was received. 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 for the Guardian® is 126 percent of the applicable APC payment amount for the service related to the category of devices of $8,152.58 ((10,250/8,153) * 100 = 125.7 percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe the Guardian® meets the first cost significance requirement. The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list).

We stated in the CY 2022 OPPS/ASC proposed rule that the estimated average reasonable cost for the Guardian® is 641 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,598.72 ((10,250/1,599) * 100 = 641.0 percent). Therefore, we stated that we believe that the Guardian® meets the second cost significance requirement. The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service.

We stated in the CY 2022 OPPS/ASC proposed rule that the difference between the estimated average reasonable cost for the Guardian® and the portion of the APC payment amount for the device of $1,598.72 is 106 percent of the APC payment amount for the related service of $8,152.58 (((10,250−1,599)/8,153) * 100 = 106.1 percent). Therefore, we explained that we believe that the Guardian® meets the third cost significance requirement. In the CY 2022 OPPS/ASC proposed rule we invited public comment on whether the Guardian® meets the device pass-through payment criteria, including the cost criterion for device pass-through payment status.

Comment. The applicant stated the Guardian® meets the three cost criteria at § 419.66(d), consistent with CMS' analysis. Response.

We appreciate the applicant's input and agree that the Guardian® meets the cost criterion for device pass-through payment status. After considering the public comments we received and our review of the device pass-through application, we have determined that the Guardian® system meets the criteria for device pass-through. Therefore, we are finalizing approval for device pass-through payment status for the Guardian® system effective beginning January 1, 2022.

(2) BONEBRIDGE Bone Conduction Implant System MED-EL Corporation submitted an application for a new device category for transitional pass-through payment status for the BONEBRIDGE Bone Conduction Implant System (hereinafter referred to as the BONEBRIDGE) by the March 2021 quarterly deadline for CY 2022. The BONEBRIDGE is a transcutaneous, active auditory osseointegrated device that replaces the function of the damaged outer or middle ear and can help people for whom hearing aids are ineffective or not recommended. According to the applicant, the device consists of a bone conduction implant and electronics components, and an externally worn audio processor.

The bone conduction implant is called the BONEBRIDGE Bone Conduction Implant (BCI 602) and the externally worn audio processor is called the SAMBA 2 Audio Processor. The BCI 602 consists of two main sections, the coil section and the transducer section. The BCI 602 consists of a magnet surrounded by the receiver coil, the transition, the Bone Conduction Floating Mass Transducer (BC-FMT), and the electronics package in a hermetic housing.

The SAMBA 2 Audio Processor is 30.4 mm x 36.4 mm x 10.2 mm and weighs 9.3g, including the battery and magnet (strength 1). It has an 18-band digital equalizer, 18 independent compression channels, and an audio frequency range of 250 Hz to 8kHz. The audio processor is powered by a non-rechargeable 675 zinc-air button cell with a nominal 1.4-volt supply and 600mA-Hrs of capacity offering the user up to 133 hours (8 to 10 days) on a single battery.

The applicant stated that the bone conduction implant is surgically attached to the skull, is subcutaneous, and is connected to the external audio processor by transcutaneous magnetic attraction. The external audio processor picks up sound from the environment and converts those sounds to a radiofrequency (RF) signal that can be transmitted across the skin to the implant. The implant converts the signal to controlled vibrations which are conducted via the skull and perceived as sound.

More specifically, the applicant stated that the BCI 602 is activated by placing the external audio processor over the magnet of the BCI 602. The signal and the energy to drive the BC-FMT are transferred via an inductive link to the internal coil, and then relayed to the BC-FMT. The BC-FMT transduces the signal into mechanical vibrations, which are conducted to the skull via the cortical titanium screws.

These vibrations stimulate the auditory system through the bone conduction pathway to allow the patient to hear. With respect to the newness criterion at § 419.66(b)(1), FDA granted a de novo request classifying the BONEBRIDGE as a Class II device under section 513(f)(2) of the Federal Food, Drug, and Cosmetic Act on July 20, 2018. The BONEBRIDGE is indicated for use in the following patients.

(1) Patients 12 years of age or older. And (2) patients who have a conductive or mixed hearing loss and still can benefit from sound amplification. The pure tone average (PTA) bone conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz) should be better than or equal to 45 dB HL.

(3) Bilateral fitting of the BONEBRIDGE is intended for patients having a symmetrically conductive or mixed hearing loss. The difference between the left and right sides' BC thresholds should be less than 10 dB on average measured at 0.5, 1, 2, and 3 kHz, or less than 15 dB at individual frequencies. (4) Patients who have profound sensorineural hearing loss in one ear and normal hearing in the opposite ear (that is, single-sided deafness or “SSD”).

The pure tone average air conduction hearing thresholds of the hearing ear should be better than or equal to 20 dB HL (measured at 0.5, 1, 2, and 3 kHz). (5) The BONEBRIDGE for SSD is also indicated for any patient who is indicated for an air conduction contralateral routing of signals (AC CROS) hearing aid, but who for some reason cannot or will not use an AC CROS. Prior to receiving the device, it is recommended that an individual have experience with appropriately fit air conduction or bone conduction hearing aids.

We received the application for a new device category for transitional pass-through payment status for the BONEBRIDGE on December 10, 2020, which is within 3 years of the date of the initial FDA marketing authorization. In the CY 2022 OPPS/ASC proposed rule, we invited public comments on Start Printed Page 63590 whether the BONEBRIDGE meets the newness criterion. We did not receive any comments in regard to whether the BONEBRIDGE meets the newness criterion at § 419.66(b)(1).

Because we received the BONEBRIDGE application on December 10, 2020, which is within 3 years of the FDA premarketing approval date of July 20, 2018, which is within 3 years, we have concluded that the BONEBRIDGE meets the newness criterion. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the BONEBRIDGE is integral to the service provided, is used for one patient only, comes in contact with human skin and is surgically implanted or inserted. The applicant also claimed that the BONEBRIDGE meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, 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.

Additionally, the BONEBRIDGE is not subject to the hearing aid exclusion at § 411.15(d)(1). The BONEBRIDGE Bone Conduction Implant (BCI 602) component is an osseointegrated implant, surgically attached to the skull that converts a radiofrequency signal from an external audio processor to controlled vibrations which are conducted via the skull to the cochlea. Therefore, we explained in the CY 2022 OPPS/ASC proposed rule that we believe the BONEBRIDGE meets the criterion at § 411.15(d)(2)(i) and is not subject to the hearing aid exclusion.

In accordance with the Medicare Benefit Policy Manual, Chapter 16 “General Exclusions from Coverage,” section 100, certain devices that produce perception of sound by replacing the function of the middle ear, cochlea or auditory nerve are payable by Medicare as prosthetic devices. These include osseointegrated implants, that is, devices implanted in the skull that replace the function of the middle ear and provide mechanical energy to the cochlea via a mechanical transducer. We believe the BONEBRIDGE device meets the criteria for this benefit category.

We invited public comments on whether the BONEBRIDGE meets the eligibility criteria at § 419.66(b) as well as the criterion at § 411.15(d)(2)(i). Comment. One commenter agreed with CMS that BONEBRIDGE is not subject to the hearing aid exclusion at § 411.15(d)(1).

Response. We did not receive any comments on whether the BONEBRIDGE meets the eligibility criteria at § 419.66(b)(3) or § 419.66(b)(4). We agree with the applicant that the BONEBRIDGE device meets the criteria of § 419.66(b).

We believe discussion concerning § 411.15(d)(2)(i) is beyond the scope of the discussion here. The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996.

The applicant stated that the previous device category, L8690 (Auditory osseointegrated device, includes all internal and external components), which was in effect from January 1, 2007 through December 31, 2008 does not appropriately describe the BONEBRIDGE. The applicant stated that at the time the category was established, BONEBRIDGE did not exist and the devices described by the category included auditory osseointegrated implant (AOI) devices or bone-anchored hearing aids (BAHAs). The applicant claimed that AOI devices and BAHAs are distinct from the BONEBRIDGE because they are implant systems composed of an external sound processor connected via a percutaneous abutment to a titanium implant that is implanted in the skull.

In these devices, the titanium implant protrudes through the skin creating a titanium post, which directly attaches to an external sound processor. The system replaces the function of the middle ear by transmitting mechanical energy from the external transducer/sound processor directly to the titanium implant to the cochlea thereby resulting in better hearing. The applicant stated that the titanium abutment used by percutaneous systems permanently pierce the skin to allow the sound processor to transmit sound and create vibrations within the skull that stimulate the nerve fibers of the inner ear.

The applicant also stated that in the percutaneous systems, the external component (sound processor) receives and processes the sound and generates the vibrations. The applicant claimed that the BONEBRIDGE is a new technology compared to the AOI devices and BAHAs and unlike these devices, it does not use a percutaneous abutment. The applicant described BONEBRIDGE as an active, transcutaneous device that consists of a completely implanted transducer and electronics components, and an externally worn audio processor.

The active implant is surgically attached to the skull, is subcutaneous, and is connected to the external audio processor by transcutaneous magnetic attraction. The external audio processor picks up sound from the environment and converts those sounds to a radiofrequency (RF) signal that can be transmitted across the skin to the implant. The implant converts the signal to controlled vibrations, which are conducted via the skull and perceived as sound.

The applicant proposed the device pass-through category descriptor “Auditory osseointegrated device, transcutaneous, with implanted transducer and radiofrequency link to external sound processor” and suggested that L8690 be revised to read, “Auditory osseointegrated device, percutaneous, includes all internal and external components”. The applicant stated that the Cochlear Osia®2 System, which also submitted a device pass-through application for CY 2022, would also be described by the proposed additional category. Web stated in the CY 2022 OPPS/ASC proposed rule that we believe that the BONEBRIDGE is described by L8690 —Auditory osseointegrated device, includes all internal and external components.

The applicant has noted differences between the BONEBRIDGE and the devices that were described by L8690, specifically percutaneous, auditory osseointegrated devices, regarding the connection between the implanted transducer and the external audio processor (percutaneous abutment vs. Transcutaneous magnetic attraction). However, we believe that there is a similar mechanism of action for all these devices specifically, vibratory stimulation of the skull to stimulate the receptors in the cochlea (inner ear).

Further, we believe that the broad descriptor for L8690 of “Auditory osseointegrated device, includes all internal and external components” includes the applicant's device. In the CY 2022 OPPS/ASC proposed rule, we invited public comment on whether the BONEBRIDGE meets the device category criterion. Comment.

One commenter stated they do not support CMS' position that the BONEBRIDGE and Osia® 2 system should not be granted a new category, because these devices take much longer to implant surgically than percutaneous bone conduction implants, they are active sound processors, and they work differently than percutaneous devices like the BAHA or Oticon implants. Another commenter who also disagreed with CMS that the BONEBRIDGE and Osia® 2 system are Start Printed Page 63591 adequately described by L8690 stated that the BONEBRIDGE and Osia® 2 system are transcutaneous hearing implants, and that CMS should create a new HCPCS code that describes both the procedure and the implant for these devices. The commenter expressed their disappointment in what they described as CMS' continual resistance to conduct rulemaking specifically on Middle Ear Implants (MEIs) because they believe CMS should hear the opinions of clinical experts, physicians, and Medicare beneficiaries regarding the appropriateness of classifying MEIs as prosthetic implants.

A different commenter supported CMS' conclusion in the proposed rule that BONEBRIDGE and Cochlear Osia® are appropriately described by a pass-through category previously in effect Two commenters stated that CMS must support the inclusion of middle ear implants in the prosthetic category. The commenters asserted that not including these devices denies beneficiaries access to all FDA-approved hearing prosthetics and discourages in new technology for the hearing impaired. Response.

We appreciate the input provided by these commenters. We have taken this information into consideration in our determination of the eligibility criterion at § 419.66(c)(1), discussed below. We note some of the comments, those addressing hearing prosthetics, are outside of the scope of this rule.

Comment. The applicant stated that BONEBRIDGE is not appropriately described by the previous device category L8690, “Auditory osseointegrated device, includes all internal and external components”. The applicant asserted that even though the mechanism of action is the same (that is, replacing the function of the middle ear by transmitting mechanical energy from the external transducer/audio processor to the cochlea), there are significant differences between BONEBRIDGE and the devices described by the previous category of L8690, “Auditory osseointegrated device, includes all internal and external components” that enable BONEBRIDGE to furnish a substantial clinical improvement over existing technology.

According to the applicant, L8690 was established in 2007 at a time when the technology to fully implant a transducer did not exist. The devices for which L8960 was established were percutaneous passive devices. According to the applicant, FDA created a new device classification for active implantable bone conduction hearing systems in response to BONEBRIDGE's application in 2018 (21 CFR 874.3340) which is specifically for active systems as opposed to passive systems (21 CFR 874.3300).

According to the applicant, FDA's description of active implantable bone conduction is that the transducer is implanted and the description of the technical method refers to the transcutaneous nature of the technology. The applicant stated that while they recognize that FDA and CMS classify devices differently for different purposes, they believe that the way FDA classifies bone conduction implants reinforces why CMS should distinguish active implantable bone conduction devices from passive, percutaneous systems for purposes of transitional pass-through payment status. The applicant asserted that CMS has modified broadly worded device categories to recognize technological advances within a device class and to grant transitional pass-through payment status to the newer technologies.

According to the applicant, in the neurostimulator category, the original descriptor of HCPCS code C1767 was “Generator, neurostimulator (implantable).” The applicant asserted that CMS modified this descriptor to “Generator, neurostimulator (implantable), non-rechargeable” to create a new device category and grant transitional pass-through payment status for rechargeable neurostimulators described by HCPCS codes C1820 (Generator, neurostimulator (implantable), with rechargeable battery and charging system) and C1822 (Generator, neurostimulator (implantable), high frequency, with rechargeable battery and charging system). The applicant added that CMS previously recognized differences in transluminal angioplasty catheters to support transitional pass-through payment status (for example, C2623, C1885, and C1725). The applicant asserted the new pass-through device category code should specifically describe active devices, which are those that have a fully implanted transducer attached transcutaneously to the external audio processor.

The applicant suggested. CXXXX (Active auditory osseointegrated device, transcutaneous, requires implanted transducer and radiofrequency link to external sound processor). The applicant further suggested that CMS could refine L8960 to ( Passive auditory osseointegrated device, percutaneous or transcutaneous, includes all internal and external components (new language underlined)).

The applicant concluded that effective on January 1, 2022 there will be new and revised CPT codes that differentiate the surgical procedures for osseointegrated implants by the type of attachment (for example, 69X50 (Implantation, osseointegrated implant, skull. With magnetic transcutaneous attachment to external speech processor), 69X51 (Revision/replacement (including removal of existing device), osseointegrated implant, skull. With magnetic transcutaneous attachment to external speech processor)), 69717 (Revision/replacement (including removal of existing device), osseointegrated implant, skull.

With percutaneous attachment to external speech processor), and 69X51 (Revision/replacement (including removal of existing device), osseointegrated implant, skull. With magnetic transcutaneous attachment to external speech processor). Response.

After consideration of the public comments we received, we agree there is no existing pass-through payment category that appropriately describes the BONEBRIDGE. The BONEBRIDGE device consists of an external processor that receives sound pressure energy and converts this to a radiofrequency signal which communicates with a surgically implanted subcutaneous transducer/actuator which is osseointegrated into the skull with screws. The transducer/actuator converts this signal to mechanical vibrations that are transmitted to the skull and inner ear.

As stated by the applicant, when the existing pass-through category, Auditory osseointegrated device (L8690), was issued in 2007, the technology to implant the transducer/actuator did not exist. Based on this information, we have determined that the BONEBRIDGE meets the eligibility criterion at § 419.66(c)(1). Due to the similarity between the devices, we refer the reader to section IV(A)(2)(b)(4) of this rule for a similar discussion of the Osia®2 system.

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following. (i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of FDA's Breakthrough Start Printed Page 63592 Devices Program and has received FDA marketing authorization.

With respect to the substantial clinical improvement criterion, the applicant stated that the BONEBRIDGE represents a substantial clinical improvement because it provides a reduced rate of device-related complications and a more rapid beneficial resolution of the disease process treated because of the use of the device compared to currently available treatments. The applicant submitted six studies to support these claims. The applicant also submitted references for four retrospective case studies of complications with percutaneous devices, specifically BAHAs, including s, pain, soft tissue hypertrophy, loss of osseointegration, and need for further surgery.

These studies did not involve the applicant's device. In support of the claim that the BONEBRIDGE reduced the rate of device-related complications compared to currently available treatments, the applicant submitted a white paper that reviewed the literature reporting on safety outcomes in bone conduction implants authored by the manufacturer of the BONEBRIDGE, MED-EL.[] The review included five products used to treat conductive hearing loss, mixed hearing loss or single side deafness, which were either percutaneous systems that had an abutment that permanently pierced through the skin or transcutaneous systems without permanent skin penetration. The authors further defined the products as either active or passive, depending on the placement of the vibrating (or active) device component.

According to the authors, active bone conduction systems, the active device component, is located within the implantable part of the system. According to the authors, passive bone conduction systems, the vibrating device component, is located outside of the skull.[] The literature review compared the safety outcomes of the BAHA Connect and the Ponto, (passive, percutaneous systems,) the BONEBRIDGE, (an active, transcutaneous systems), and the Sophono Alpha and the BAHA Attract, (passive, transcutaneous systems). In total, 156 studies were included in the literature review.

There were seven studies with 234 patients reported on the Ponto, thirteen studies with 175 patients reported on the BONEBRIDGE, twelve publications with 143 patients reported on the Sophono Alpha, seven studies reported on the BAHA Attract system with 114 patients, and 117 studies reported on the BAHA Connect system with a total of 6,965 patients. Of all reported adverse events, 38 percent were major and 62 percent were minor. Major adverse events reported in the review included revision surgery, explantation, removal at patient request, implant loss, implant device failure, skin revision surgery or skin .

Minor adverse events included skin s, soft tissue reactions, and healing difficulties. The results showed that 9.8 percent of patients using the BONEBRIDGE system experienced an adverse event (major or minor), compared to 68.4 percent of BAHA Attract patients, 46.9 percent of Sophono Alpha patients, 44.0 percent of Ponto system patients and 51.7 percent of BAHA Connect patients. When comparing the percentage of patients who experienced a major adverse event, 2.9 percent of BONEBRIDGE patients had a major adverse event compared to 1.8 percent of BAHA Attract patients, 4.2 percent of Sophono Alpha patients, 5.1 percent of Ponto system patients, and 21.1 percent of BAHA Connect patients.

To support the claim that the BONEBRIDGE reduced the rate of device-related complications compared to currently available treatments, the applicant also submitted a systematic review of the current literature on safety, efficacy and subjective benefit after implantation with the BONEBRIDGE device.[] The systematic review assessed 39 publications and included randomized controlled trials, clinical controlled trials and cohort studies, case series and case reports investigating subjective and objective outcomes. In the 39 publications included in the review, 487 participants were evaluated. 303 participants had conductive hearing loss, 67 participants had mixed hearing loss, and 53 participants had single-sided deafness.

The mean age of the patients in the included studies was 35.6±16.9 years. Using the guidelines available from the Cochrane Collaboration, a search strategy and review protocol was developed using PubMed (MEDLINE) and Cochrane databases to identify all publications on the BONEBRIDGE from 2012 to October 31, 2018. The researchers excluded studies that assessed a device or treatment other than the BONEBRIDGE, did not include human participants, focused on a type of hearing loss other than the losses that BONEBRIDGE is indicated for (that is, conductive hearing loss, mixed hearing loss or single-sided deafness), did not report on safety or performance/quality of life data, were not related to hearing loss or treatment thereof, lacked sufficient information for evaluation, and included overlapping samples.

The outcomes extracted from the studies were assessed via meta-analysis. The safety of the device was assessed by collecting information on complications during surgery and adverse events in the postoperative period. Of the 39 identified studies, there were 25 studies that reported on safety during a mean period of 11.7 months (range 3-36 months).

The reported complications were categorized into minor and major complications, with a major complication described as requiring surgical attention leading to revision surgery or explantation. Minor complications included skin edema or erythema, skin s, and hematomas. Out of 286 ears implanted with the device, there were no complications in 259 ears (90.6 percent).

Minor complications occurred in 22 ears (7.7 percent) over a cumulative period of reported mean follow-up of 12.7 years (mean. 11.7 months ± 4.5). Major complications occurred in three studies comprising five ears (1.7 percent).[] The applicant submitted an additional study by Schmerber, et al.

To support the claim that the BONEBRIDGE reduced the rate of device-related complications compared to currently available treatments.[] The study of 28 participants was a multicenter, prospective study with intra-subject measurements with the purpose of the study to validate the safety and efficacy of the BONEBRIDGE 12 months after implementation. The study included nine university hospitals, seven in France and two in Belgium. Sixteen participants with conductive or mixed hearing loss with bone-conduction hearing thresholds under the upper limit of 45 dB HL for each frequency from 500 to 4000 Hz, and 12 participants with SSD (contralateral hearing within normal range) were enrolled in the study.

Three of the 28 participants (with mixed or conductive hearing loss) did not complete the study. One requested that the device be removed (due to “severe psychological problems”) and two were lost to follow Start Printed Page 63593 up. The skin safety of the participants was evaluated by the surgeon who implanted the device up to 12 months post-operatively using an ordinal scale (“very good”, “good”, “acceptable”, “bad skin condition”) and a visual analogue scale (between 1 and 10 from “very bad” to “excellent”) to rate cutaneous tolerance.

In the study, no complications or device failures occurred, no revision surgery was necessary and no skin injury was reported. The scoring was judged as `excellent' or `good' for all subjects (n = 25), corresponding to scores 8 to 10 on the scale. No complication (0 percent) was observed [95 percent confidence interval = (0 percent-14.9 percent)].

The authors stated that there was a lower rate of complications for the BONEBRIDGE device compared to percutaneous systems, like the BAHA, whose complication rate was up to 24 percent in a large series of 602 ears and a revision surgery rate of 12 percent.[] The applicant also submitted a study by Siegel et al. As evidence to support the claim that the BONEBRIDGE reduced the rate of device-related complications compared to currently available treatments.[] The study was a retrospective review that included 37 adult patients with conductive/mixed hearing loss who met the indications for use and were implanted with BONEBRIDGE over a 5-year period from April 2013 to May 2018. Patient charts were reviewed for surgical outcomes and complications over the 6-year period.

The mean time of follow-up was 32 months (range. 9-71 months). There were no events of surgical complications in the patients included in the study, specifically no instances of dural injury, cerebrospinal fluid (CSF) leak, or intracranial bleeding.

There were also no skin complications and no postoperative symptoms of tinnitus/vertigo or dizziness.[] In support of the assertion that the use of BONEBRIDGE resulted in a more rapid beneficial resolution of the disease process compared to currently available treatments, the applicant also referenced the Magele et al., and Siegel et al. Studies as well as a study conducted by Yang et al.[] As previously noted, the Magele et al. Study assessed 39 publications that included 487 participants.

303 participants had conductive hearing loss, 67 participants had mixed hearing loss, and 53 participants had single-sided deafness.[] Functional gain was available for analysis from 14 articles and was measured as the difference between unaided and aided (with the BONEBRIDGE) warble tone thresholds. On average, functional gain of 32.7 dB ±16dB was observed. Overall, the results showed a 30.89 dB (95 percent CI 27.53 dB-34.24 dB) improvement at speech presentation level.

For the 30 conductive hearing loss patients, the improvement was 39.48 dB (95 percent CI 35.25 dB−43.71 dB). For the mixed hearing loss group, the improvement was 29.08 dB (95 percent CI 26.32 dB—31.83 dB) and the improvement was 28.94 dB (95 percent CI 16.92 dB—40.96 dB) for the 10 subjects with single-sided deafness. The applicant also noted the study by Siegel et al.

To support the claim that the use of BONEBRIDGE resulted in a more rapid beneficial resolution of the disease process compared to currently available treatments.[] As previously stated, in this study, 37 adult patients with conductive/mixed hearing loss who met the indications for use were implanted with BONEBRIDGE over a 6-year period. The patients' charts were reviewed for surgical outcomes and complications over the 6-year period. Preoperative air conduction (AC), preoperative bone conduction (BC), and 3-month postoperative aided thresholds were recorded.

Speech perception was assessed using two different tests, consonant-nucleus-consonant (CNC) words and AzBio sentences. Pure-tone averages (PTAs. Measured at 0.5, 1.0, 2.0 and 3.0 kHz), air-bone gap (ABG), and functional gain (FG) were calculated.

The preoperative air-bone gap was calculated as the difference between AC thresholds and BC thresholds of the implanted ear. The postoperative ABG was calculated as the difference between the preoperative BC and postoperative BONEBRIDGE aided thresholds measured at 3 months postoperatively. Functional gain was calculated as the difference between preoperative AC thresholds and BONEBRIDGE aided thresholds measured 3 months postoperatively.

The results of this study showed audiological improvement in the 37 patients with a functional gain (averaged over 4 frequencies, 500 kHz to 3000 kHz) of 40.3 dB (±19.0 dB) for air conduction 3 months postoperatively. The difference between the average air to bone conduction gap fell from 44.9 dB preoperative to 4.6 dB three months after surgery. The postoperative air conduction thresholds for the 21 patients with mixed hearing loss ranged between 30-40 dB and the air conduction thresholds for the 16 patients with conductive hearing loss ranged between 20-30 dB.

For patients with mixed hearing loss, nearly a full ABG closure was achieved at all frequencies by 3 months postoperatively. In the same study, speech perception testing was available for 21 patients (57 percent). At activation, mean speech perception results for CNC words (13 patients) and AzBio sentences (14 patients) were 79 and 93 percent, respectively.

At six months postoperatively, CNC words (17 patients) and AzBio sentences (21 patients) were 81 and 93 percent, respectively. The authors stated that the results of the study were comparable with what has been accomplished using traditional percutaneous conduction devices and passive transcutaneous bone conduction devices. Lastly, to support the claim that the use of the BONEBRIDGE resulted in a more rapid beneficial resolution of the disease process, the applicant submitted a study that compared the use of the BONEBRIDGE with a non-implantable bone conduction hearing aid (BCHA).[] This single center, prospective study involved 100 patients in Beijing, China with bilateral congenital microtia-atresia (CMA).

The patients had a mean age of 11.9 ± 6.0 years old at the time the BONEBRIDGE was implanted. All patients had worn the passive bone anchored hearing aid for at least a year prior to the implantation of the BONEBRIDGE and patients were tested Start Printed Page 63594 an average of 25 weeks after surgery. Measured outcomes in the study included sound field thresholds (SFT), functional gain (FG) [aided threshold minus the unaided threshold], word recognition, speech reception thresholds (SRT), preoperative and postoperative bone and air conduction and patient subjective satisfaction.

Bone conduction of pure tones at any frequency did not change significantly from preoperative to postoperative testing. The mean bone-conduction pure-tone threshold (PTA) before implantation was 8.7 ± 6.1 dB HL and after surgery was 8.9 ± 5.6 dB HL (p >. .745, paired t-test).

Furthermore, bone conduction did not significantly change at any frequency after surgery (p >. .05, t-test). The mean SFT of the BONEBRIDGE (61.6 ± 7.1 dB HL) was significantly higher than the BCHA (31.3 ± 6.1 dB HL) (paired t-test, p <.

.001) and the SFT was significantly better with BONEBRIDGE at 500, 1000, 2000, and 4000 Hz sound frequencies (paired t-test, p <. .002). Further, the FG of the BONEBRIDGE (31.2 ± 9.5 dB HL) was significantly better than the FG of the BCHA (26.5 ± 10.3 dB HL) (paired t-test, p <.

.001). The FG measured at 250 Hz in the two aided conditions had less improvement compared to other frequencies (p <. .001).

A comparison of BCHA and BONEBRIDGE resulted in a significant difference in word recognition (68.0 percent for monosyllabic words and 79.0 percent for disyllabic words with the BCHA vs. 78.0 percent for monosyllabic and 84.0 percent for disyllabic words with the BONEBRIDGE) in favor of the BONEBRIDGE (p <. .001).

Regarding the applicant's evidence of substantial clinical improvement, we noted in the CY 2022 OPPS/ASC proposed rule that the studies submitted did not involve a direct comparison to other currently available treatments, namely percutaneous or passive, transcutaneous auditory osseointegrated devices. Therefore, we explained that it was difficult to determine whether the BONEBRIDGE provided a substantial clinical improvement over existing devices. We also indicated that the studies submitted included a small number of participants which may affect the generalizability of the data provided in support of the device.

In the white paper by MED-EL, the authors compared the complication rates associated with various studies that differed by design, population characteristics and follow-up time. We explained in the CY 2022 OPPS/ASC proposed rule we are not confident that differences seen or elucidated by the applicant are due to the differences in treatments or instead due to differences in study characteristics. Additionally, although the overall, both major and minor, adverse event ratio was significantly lower for the BONEBRIDGE device (9.8 percent) versus other bone conduction hearing devices in the study, we noted that when comparing the percent of patients who experienced a major adverse event, BONEBRIDGE patients had a major adverse event (2.9 percent) that was more comparable to other devices included in the paper.

With regard to the Yang et al. Study, given the young age of the patients and the congenital nature of the hearing loss being treated, we stated in the proposed rule that we are concerned that these results may not be generalizable to the Medicare population, which tends to be significantly older in age and potentially less likely to have hearing loss related to congenital causes. We invited public comments on whether BONEBRIDGE meets the substantial clinical improvement criterion.

Comment. The applicant submitted a comment in response to CMS' concerns regarding the lack of direct comparison to existing technology. Differences in adverse events.

And small number of study participants in the studies submitted to illustrate that BONEBRIDGE meets the substantial clinical improvement criterion. In response to CMS' concern about a direct comparison to existing technology, the applicant stated that direct head-to-head trials are not necessary or appropriate in this situation. According to the applicant, differences in the devices make a blinded randomized controlled trial impossible.

The applicant asserted that while a non-blinded randomized trial would be possible, it is unclear what additional data would be gained from that approach because the applicant believed the pass-through application already contained extensive, robust, and definitive data to support that BONEBRIDGE is a substantial clinical improvement over existing technologies. The applicant asserted that enrolling patients in a head-to-head trial in which the primary difference is expected to be adverse events associated with one treatment arm is extremely challenging. The applicant stated that the studies on BONEBRIDGE that were submitted with the pass-through application are primarily controlled case series and case reports.

The applicant asserted that because the submitted studies used measures of device performance and adverse events that are consistent with studies of other devices, they allowed for direct comparison between different devices which demonstrate that BONEBRIDGE represents a substantial improvement over other bone conduction technology by achieving comparable performance in hearing improvement with fewer adverse events. In regard to CMS' concerns about differences in adverse events, the applicant agreed with CMS that the occurrence of both overall and minor adverse event ratio was significantly lower for BONEBRIDGE than other devices but disagreed with CMS' characterization of the major adverse event rate. The applicant stated that major adverse events are far less common across all devices, including BONEBRIDGE, than minor events.

Next the applicant responded to CMS' concern that the small number of study participants could affect the generalizability of the data provided and that, because of the young age of the patients and the congenital nature of the hearing loss being treated, the study results may not be generalizable to the Medicare population. The applicant stated that BONEBRIDGE is indicated for patient who are 12 years or older, with conductive or mixed hearing loss and still can benefit from sound amplification, and who have profound sensorineural hearing loss in one ear and normal hearing in the opposite ear ( i.e., single-sided deafness or “SSD”). The applicant stated that the study sample sizes (and overall number of patients in those studies) are consistent with the anticipated number of implantations.

The applicant stated that while the typical BONEBRIDGE patient is expected to be under age 65, several studies included patients of Medicare age and the experience of those patients was consistent with overall experience. The applicant concluded that the studies are generalizable to the Medicare population and reflective of expected results in the indicated population generally. Lastly, the applicant asserted the otologic community has accepted and adopted active transcutaneous devices as the standard of care for implanted bone conduction devices.

Response. We appreciate the additional information from commenters' about the BONEBRIDGE device but note that none of the commenters provided new empirical evidence that demonstrates that BONEBRIDGE is a substantial clinical improvement over existing treatment options. Based on our review of the study evidence, the only purported differences between BONEBRIDGE and predicate technologies relate to the major and minor adverse events from the respective technologies.

Based on the information we have, it appears that Start Printed Page 63595 while there is a difference amongst the rates of minor adverse event incidence favoring BONEBRIDGE, patients had a major adverse event occurrence (2.9 percent) that was comparable to other devices included in the provided evidence. While the incidence of minor adverse events ( e.g., skin s, soft tissue reactions, and healing difficulties) may benefit BONEBRIDGE, we believe these are less impactful on patient outcomes as compared to the incidence of major adverse events ( e.g., revision surgery, explantation, removal at patient request, implant loss, implant device failure, skin revision surgery or skin ) which is comparable to previous technologies. We maintain our concerns listed in the proposed rule, that the studies submitted included a small number of participants which may affect the generalizability of the data provided in support of the device, and the applicant's comparison of outcome data across multiple studies as opposed to direct comparisons controlling for confounding variables.

Because of these reasons, we do not believe that BONEBRIDGE represents a substantial clinical improvement relative to existing therapies currently available. After consideration of the public comments we received and our review of the device pass-through application, we are not approving BONEBRIDGE for transitional pass-through payment status in CY 2022 because the product does not meet the substantial clinical improvement criterion. Because we have determined that BONEBRIDGE does not meet the substantial clinical improvement criterion, we are not evaluating whether the device meets the cost criterion.

(3) EluviaTM Drug-Eluting Vascular Stent System Boston Scientific Corporation submitted an application for device pass-through status for the EluviaTM Drug-Eluting Vascular Stent System (the EluviaTM system) for CY 2022. According to the applicant, the EluviaTM system is a combination product composed of an implantable endoprosthesis, a non-bonded freely dispersed drug layer (a formulation of paclitaxel contained in a polymer matrix), and a stent delivery system indicated for the treatment of symptomatic de novo or restenotic lesions in the native superficial femoral artery (SFA) and/or proximal popliteal artery (PPA). According to the applicant, the EluviaTM system stent is a laser-cut self-expanding stent composed of nickel titanium alloy with radiopaque markers made of tantalum on the proximal and distal ends.

The applicant states that the 6-French delivery system is a triaxial design with an outer shaft to stabilize the stent delivery system, a middle shaft to protect and constrain the stent, and an inner shaft to provide a guidewire lumen. The delivery system is compatible with 0.035 inch (0.89mm) guidewires and is offered in two working lengths (75 and 130 cm). According to the applicant, peripheral artery disease (PAD) occurs when fatty or calcified material (plaque) builds up in the walls of the arteries and makes them narrower, thus restricting blood flow.

The applicant asserts that when this occurs, the muscles in the legs cannot get enough blood and oxygen, especially during exertion such as exercise or walking. According to the applicant, the main symptoms of PAD are pain, burning sensation, or general discomfort in the muscles of the feet, calves, or thighs. As the disease progresses, plaque accumulation may significantly reduce blood flow through the arteries, resulting in claudication and increasing disability, with severe cases often leading to amputation of the affected limb.

The applicant states that according to the Centers for Disease Control and Prevention approximately 8.5 million people age 40 and older in the United States have PAD, including 6-26 percent of individuals older than age 60.[] According to the applicant, PAD disproportionately affects African American and American Indian populations [] and nonrevascularized lower extremity PAD is among the most common causes of lower extremity amputation. According to the applicant, the EluviaTM system is designed to restore blood flow in the peripheral arteries above the knee, specifically the superficial femoral artery and proximal popliteal artery. The applicant states that the stent features a unique drug-polymer combination intended to facilitate sustained elution of the drug paclitaxel that can prevent narrowing (restenosis) of the vessel.

The applicant adds that restenosis is often the cause of pain and disability for patients diagnosed with PAD. The applicant asserts that no other endovascular technologies that are approved for the treatment of PAD provide sustained elution of a drug over at least 12 months to prevent restenosis. According to the applicant, two of the most common endovascular treatments for PAD are angioplasty and stenting.

The applicant states that following an intervention within the SFA or PPA, these arteries elicit a healing response that leads to restenosis starting with inflammation, followed by smooth muscle cell proliferation and matrix formation.[] According to the applicant, because of the unique mechanical forces in the SFA and PPA, the restenotic process can continue well beyond 12 months from the initial intervention. The applicant asserts the EluviaTM system is designed to elute anti-restenotic drug paclitaxel beyond 12 months, which is longer than the two-month duration of drug applied from drug-coated balloons and the drug-coated stent Zilver PTX. With respect to the newness criterion at § 419.66(b)(1), the EluviaTM system received FDA PMA on September 18, 2018.

The application for a new device category for transitional pass-through payment status for the EluviaTM system was received on February 26, 2021, which is within 3 years of the date of the initial FDA approval or clearance. In the CY 2022 OPPS/ASC proposed rule we invited public comments on whether the EluviaTM system meets the newness criterion. Comment.

The applicant stated that the EluviaTM system application was submitted within three years of regulatory approval and therefore meets the newness criterion for transitional device pass-through eligibility. Response. We appreciate the commenter's input.

And agree that the EluviaTM system meets the newness criterion because we received its device pass-through application on February 26, 2021, which is within 3 years of the September 18, 2018, the date of FDA PMA. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the EluviaTM system is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically impacted or inserted. The applicant also claimed that the EluviaTM system meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, an instrument, apparatus, implement, or items for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service.

In the CY 2020 OPPS/ASC final rule with comment period, we stated that we determined that the EluviaTM system Start Printed Page 63596 device meets the eligibility criteria at § 419.66(b)(3) and (4) in response to a pass-through application that the applicant submitted on November 15, 2018 (84 FR 61286). Because the applicant submitted a new application for device pass-through status for the EluviaTM system, we again invited public comments on whether the EluviaTM system continues to meet the eligibility criteria at § 419.66(b(3) and (4). Comment.

The applicant stated that the EluviaTM system continues to meet the transitional pass-through eligibility criteria at § 419.66(b)(3) and (4) as CMS initially concluded in the CY 2020 OPPS/ASC final rule with comment period. Response. We agree with the applicant and continue to believe that the EluviaTM system meets the eligibility criteria at § 419.66(b)(3) and (4).

The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. We stated that we have not identified an existing pass-through payment category that describes the EluviaTM system.

The applicant proposed a category descriptor for the EluviaTM system of “Stent, non-coronary, polymer matrix, minimum 12-month sustained drug release, with delivery system.” Previously, we invited public comment and subsequently determined that the EluviaTM system device meets the device category eligibility criterion. For a complete discussion of comments received, please see the CY 2020 OPPS/ASC final rule with comment period (84 FR 61286 through 61287). We invited public comments on whether the EluviaTM system continues to meet this criterion.

Comment. One commenter, a manufacturer of a competing product stated that CMS has reviewed drug-eluting vascular stents in the past and determined they fell into an already existing pass-through payment category. The commenter stated that in August of 2002, CMS concluded that coronary drug-eluting stents were described by existing pass-through device categories C1874 (Stent, coated/covered, with delivery system) and C1875 (Stent, coated/covered, without delivery system).[] The commenter stated that at the time drug eluting stents were coated with paclitaxel and the same polymer currently used on the EluviaTM system.

The commenter stated that in 2012, Zilver PTX DES was denied pass-through payment status and quotes a letter received from CMS which stated, “. . .

The outpatient clinical review team believes that the Zilver PTX Stent is appropriately described by previously active device pass-through category C1874, Stent, coated/covered, with delivery system. This category describes drug-eluting stents.” [] According to the commenter, FDA has grouped the EluviaTM system and Zilver PTX DES into the same product code. “NIU.

Stent, Superficial Femoral Artery, Drug-Eluting—a metal scaffold with a drug coating placed via a delivery catheter into the SFA to maintain the lumen. The drug coating is intended to inhibit restenosis. Class III.

Cardiovascular Review Panel.” The commenter asserted that both devices are self-expanding nitinol stents coated with the drug paclitaxel.[] The commenter further asserted that the EluviaTM system's underlying stent platform and delivery system is the same as Boston Scientific's Innova self-expanding stent (an uncoated stent for treating the superficial femoral artery); [] the drug paclitaxel is the same drug used on the Zilver PTX DES and earlier generation coronary drug-eluting stents. And the polymers used in the EluviaTM system coating are the same polymers as those used in the Xience V and Promus Element coronary stents.[] The commenter stated that this history precludes the establishment of a new device category for the EluviaTM system. Response.

We appreciate the information provided by the commenter and have taken this into consideration in making our determination of § 419.66(c)(1), discussed below. Comment. The applicant stated that in the CY 2020 OPPS/ASC proposed rule CMS stated that no existing device category describes the EluviaTM system and that since that time no new categories that would describe the system have been established.

Response. We appreciate the information submitted by the commenters. Given the additional information provided by commenters CMS is concerned that the applicant's proposed long descriptor of `Stent, non-coronary, polymer matrix, minimum 12-month sustained drug release, with delivery system” may not suitably differentiate the EluviaTM system from Zilver PTX.

Specifically, given that CMS has previously determined that coronary drug-eluting stents were described by existing pass-through device categories C1874 (Stent, coated/covered, with delivery system) and C1875 (Stent, coated/covered, without delivery system), that FDA has classified the EluviaTM system and Zilver PTX into the same product code, and finally that CMS previously denied pass-through status to Zilver PTX, stating that it is appropriately described by previously active device pass-through category C1874 (Stent, coated/covered, with delivery system), we believe the same pass-through category code C1874 appropriately describes the EluviaTM system. We note that HCPCS code C1874 is agnostic to the length of time a drug is released and therefore encapsulates the EluviaTM system's proposed long descriptor. Further, we do not believe it is appropriate for a discussion of substantial clinical improvement, i.e., the length of time a drug release is maintained, to be the primary motivating determinant in a determination of whether a device meets the device category criterion in § 419.66(c)(1).

After consideration of the public comments we received, we conclude there is an existing pass-through payment category or pass-through category previously in effect that appropriately describes the EluviaTM system. Based on this information, we have determined that the EluviaTM system does not meets the eligibility criterion at § 419.66(c)(1). The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment.

With respect to this criterion, the applicant claims the EluviaTM system provides a substantial clinical improvement over existing technologies for the following reasons. (1) The EluviaTM system achieves superior primary patency. (2) the EluviaTM Start Printed Page 63597 system achieves reduced lesion revascularization, leading to a reduced rate of subsequent therapeutic interventions at one year and a statistically significant reduction of target lesion revascularization (TLR) at 2 years.

(3) the EluviaTM system decreases the number of future hospitalizations or physician visits. (4) the EluviaTM system reduces hospital readmission rates. (5) the EluviaTM system reduces the rate of device-related complications.

And (6) the EluviaTM system achieves similar functional outcomes and quality of life index values while associated with half the rate of TLRs. Many of the assertions made by the applicant are derived from the IMPERIAL trial which is reported in three citations supplied by the applicant.[] We discuss results from the MAJESTIC study and then these publications from the IMPERIAL study to provide context for the assertions made by the applicant. The first article, by Müller-Hülsbeck et al., discusses the three-year results of the MAJESTIC study, the first-in-human prospective, single-arm, multicenter, clinical trial involving 57 patients with symptomatic lower limb ischemia and lesions in the superficial femoral artery or proximal popliteal artery.[] Patients who were treated with the EluviaTM system were followed for a 3-year time period during which they took acetylsalicylic acid as an antiplatelet therapy.

At 24 months, patients received a duplex uasound, ankle-brachial index, and Rutherford classification at a clinical visit. At 36 months patients completed a telephone or clinical visit which included adverse event and antiplatelet medication assessments. The authors report that long-term results from the MAJESTIC study of the EluviaTM system continue to demonstrate good technical and clinical outcomes (assessed through 2 years) and a low reintervention rate (through 3 years).

The second article, by Gray et al., discusses the IMPERIAL trial, a prospective randomized (2:1) (the Eluvia[] system vs. Zilver PTX), single-blind, non-inferiority study in 465 patients with symptomatic lower-limb ischemia manifesting as claudication with atherosclerotic lesions in the native superficial femoral artery or proximal popliteal artery across 65 centers and multiple countries.[] Of the 465 patients enrolled, 309 were assigned to the EluviaTM system and 156 were assigned to Zilver PTX. The authors state the overall sample size in the randomized trial was selected to preserve adequate statistical power for non-inferiority testing of the primary efficacy and safety endpoints at a prespecified, one-sided significance level of 5 percent for each, without adjustment for multiplicity.

The authors state baseline demographic, clinical, and angiographic characteristics were similar between the two study groups, indicative of successful randomization. The primary efficacy endpoint of the trial was primary vessel patency at 12 months which was a binary endpoint based on a duplex uasound peak systolic velocity ratio of 2.4 or lower in the absence of clinically driven target lesion revascularization or bypass of the target lesion. Secondary endpoints at 12 months were technical success, procedural success, adverse events, stent integrity, major adverse events, and clinical outcomes.

The authors note that the funder of the study was involved in study design, data collection, data analysis, data interpretation, and writing of the report. To identify statistically meaningful results for the non-inferiority test, the authors used a test such as the Farrington-Manning method, to estimate the lower bound for the 95 percent CI of the difference between treatment groups.[] According to the authors, if this lower bound was greater than the non-inferiority margin of -10 percent, the EluviaTM system would be considered non-inferior to Zilver PTX in terms of device efficacy. For all other statistical comparisons, the authors used a p value of less than 0.05 as indicative of a significant difference.

According to the authors, the primary non-inferiority analyses were done when 409 patients (276 in the Eluvia group and 133 in the Zilver PTX group) had completed 12 months of follow-up or had a primary efficacy or safety endpoint event.[] Primary patency was observed for 231 (87 percent) of 266 patients in the Eluvia[] system group and for 106 (82 percent) of 130 patients in the Zilver PTX stent group (difference 5.3 percent [one-sided lower bound of 95 percent CI -0.66]. P <. 0.0001).

259 (95 percent) of 273 patients in the Eluvia group and 121 (91 percent) of 133 patients in the Zilver PTX group had not had a major adverse event at 12 months (difference 3.9 percent [one-sided lower bound of 95 percent CI -0.46]. P <. .0.0001).

According to the authors, superiority of the Eluvia[] system over Zilver PTX (primary patency in 86.8 percent vs. 77.5 percent, respectively, p = 0.0144) was met in the post-hoc analysis of 12 month primary patency data in the full-analysis cohort. The authors summarize by stating the proportions of patients with stent thrombosis or clinically driven target lesion revascularisation in the Eluvia stent group were about half those in the Zilver PTX group while both groups showed improvements in clinical symptoms and walking function and the occurrence of stent fracture was low.[] The third article, by Golzar et al, discusses the one-year follow up of the single-arm long lesion substudy portion of the IMPERIAL trial.[] Fifty patients were enrolled in the study where 20 patients had diabetes, 16 were current smokers, 35 had moderately or severely calcified lesions, and 16 lesions were total occlusions.

To be eligible, patients needed a lesion ranging from 140 mm to 190 mm which required two overlapping Eluvia stents. At 12 months, no deaths, stent thrombosis, or target limb amputation had occurred. The primary patency rate was 87.0 Start Printed Page 63598 percent at 12 months which exceeded the 60 percent performance goal.

Forty-three patients (91 percent) had Rutherford category improvement without the need for TLR. The authors concluded that one year patency with the EluviaTM system was independent of lesion length. The fourth article, by Müller-Hülsbeck et al., discusses the two-year follow up to the IMPERIAL trial.[] The authors found that through 24 months, the patency rates and Rutherford category improvements were largely sustained, with a significantly lower clinically driven TLR rate for Eluvia versus Zilver PTX at 2 years.

At 2 years the TLR rate for patients treated with Eluvia was 12.7 percent as compared to patients treated with Zilver PTX at 20.1 percent (P = 0.0495). As with the previous citation, both study arms show sustained clinical improvement (that is improvement in Rutherford classification by one or more categories as compared with baseline and without TLR) of 84.4 percent for patients treated with Eluvia and 78.2 percent for patients treated with Zilver PTX (p = 0.140). For all-cause mortality, Eluvia (7.1 percent) and Zilver PTX (8.3 percent) did not statistically differ (p = 0.6649).

The authors conclude that the IMPERIAL trial provides support for the benefit of drug-eluting treatment in this population. According to the applicant, the Eluvia[] system achieves superior primary patency compared to Zilver PTX. The applicant states that, based on the IMPERIAL trial, the Eluvia[] system demonstrated superior primary patency over Zilver PTX, 86.8 percent vs.

77.5 percent, respectively (p=0.0144), based on pre-specific post-hoc analysis. The applicant further states that at 12 months, the Eluvia[] system had greater primary patency than Zilver PTX at 88.5 percent vs. 79.5 percent, respectively (p=0.0119).

According to the applicant, these results are consistent with the 96.4 percent primary patency rate at 12 months in the MAJESTIC study, the single-arm first-in-human study of the Eluvia[] system.[] Furthermore, in regard to this point, the applicant asserts among patients 65 and older, the primary patency rate in the Eluvia[] system was 92.6 percent compared to 75.0 percent in Zilver PTX (p=0.0386). Lastly, the application states that among 50 patients with an average lesion length of 162.8 mm (long lesions), each treated with two Eluvia stents, there was a 12 month primary patency of 87 percent and a TLR of 6.5 percent.[] According to the applicant, the Eluvia[] system reduced subsequent therapeutic interventions at one year and reduced target lesion revascularization at two years. Based on the IMPERIAL trial, the applicant asserts the Eluvia[] system achieved a substantial reduction in re-intervention with a target lesion revascularization (TLR) of 4.5 percent compared to 9.0 percent (p=0.0672) in the Zilver PTX group.[] The applicant states that at two years the Eluvia[] system had a statistically significantly lower rate of TLRs than Zilver PTX of 12.7 percent vs.

20.1 percent, respectively (p=0.0495).[] The applicant notes that the published analysis presented in this application has a slightly different clinically-driven TLR rate at 2 years than internal analysis provided in the Eluvia CY 2020 device pass-through application (12.7 percent and 20.1 percent (p=0.0495) vs. 12.9 percent and 20.5 percent (p=0.0472), respectively). We note that the applicant provides a table which compares TLR rates between the EluviaTM system and Zilver PTX by all patients 65 and older, U.S.

Patients 65 and older, and patients with diabetes. The applicant asserts that patients treated with the EluviaTM system required fewer days of hospital care than in the Zilver PTX group. According to the applicant, patients treated with the EluviaTM system had fewer days in the hospital as compared to Zilver PTX for all adverse events (13.9 vs.

17.7 respectively), TLR (2.8 vs. 7.1 respectively), and procedure and device-related adverse events (2.7 vs. 4.5 respectively).

We note that statistical significance was not assessed. The applicant asserts that patients treated with the Eluvia[] system had reduced hospital readmission rates compared to those treated with Zilver PTX at 12 months at 3.9 percent and 7.1 percent respectively (p=0.1369).[] The applicant asserts that while rates of adverse events were similar in total between treatment arms in the IMPERIAL trial, device-related adverse-events were reported in 8 percent of patients treated with the Eluvia[] system as compared to 14 percent of patients treated with Zilver PTX.[] Lastly, the applicant asserts that the Eluvia[] system is able to achieve similar functional outcomes to Zilver PTX while associated with half the rate of TLRs. The applicant states while functional outcomes appear similar between the Eluvia Stent System and Zilver PTX groups at 12 months, these improvements for the Zilver PTX group are associated with twice as many TLRs to achieve similar EQ-5D index values.[] The applicant provides multiple tables which show similar improvements in walking, distance, speed, stair climbing, and health-related quality of life (EQ-5D) between the EluviaTM system and Zilver PTX.

For a complete discussion of the applicant's previous submission regarding substantial clinical improvement please see the CY 2020 OPPS/ASC final rule with comment period (84 FR 61287 through 61292). We note that we did not approve the EluviaTM system for CY 2020 transitional device pass-through payment due to the potential increased long-term mortality signal that FDA was evaluating at the time. We further note that in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58657), we discussed the FDA August 7, 2019 update, which concluded that the benefits of paclitaxel-coated devices (for example, reduced reinterventions) should be considered in individual patients along with potential risks (for example, late mortality) as well as for individual patients judged to be at particularly high Start Printed Page 63599 risk for restenosis and repeat femoropopliteal interventions, clinicians may determine that the benefits of using a paclitaxel-coated device outweigh the risk of late mortality.

The applicant asserted that the EluviaTM system has demonstrated substantial clinical improvement over Zilver PTX in the IMPERIAL trial to include no increase in all-cause mortality. In response to this new information, we no longer have concerns regarding the increased long-term mortality signal we described in the CY 2020 OPPS/ASC final rule with comment period. In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61289) we noted that the IMPERIAL study, which showed significant differences in primary patency at 12 months, was designed for noninferiority and not superiority.

Therefore, we were concerned that results showing primary patency at 12 months may not be valid given the study design. In response, the applicant stated that a non-inferiority study is consistent with accepted research methodology and is typical of many head-to-head trials of medical devices. For the complete discussion of this issue, please see the CY 2020 OPPS/ASC final rule with comment period (84 FR 61290).

In the CY 2022 OPPS/ASC proposed rule, we invited public comments on whether the EluviaTM Drug-Eluting Vascular Stent System meets the substantial clinical improvement criterion. Comment. One commenter, a manufacturer of a competitor device, asserted that EluviaTM does not meet the substantial clinical improvement criterion.

The commenter asserted that the MAJESTIC study is inadequate to demonstrate substantial clinical improvement as use of a single arm study to support this criterion is problematic due to the small (n=57) and highly selective patient population ( e.g., lesion length limited to a maximum of 11 cm).[] Further, the commenter stated that despite a very high primary patency rate of 96.4 percent at 12 months the rate drops substantially to 77.9 percent at just 25 months,[] which suggests the potential of late catch-up phenomenon as previously observed with other polymer-coated peripheral DES.[] The commenter added that the target lesion revascularization (TLR) rate appears to double each year ( i.e., quadruple from year 1 to year 3), increasing from 3.6 percent at 1 year to 7.2 percent at 2 years to 14.7 percent at 3 years.[] The commenter next asserted that errors in the data analysis have been reported in scientific meetings[] and require a correction of the 1-year publication and results;[] the commenter also asserted that other publications also require a correction.[] The commenter stated that patency results are inconsistently presented and also contended that the primary endpoint of the 12-month patency study (n=409) indicate primary patency of 86.8 percent (231/266) for Eluvia vs. 81.5 percent (106/130) for Zilver PTX with the subsequent post-hoc analysis showing a larger difference of 86.8 percent (243/280) for EluviaTM vs. 77.5 percent (110/142) for Zilver PTX.

The commenter asserted that the post-hoc analysis represents an additional 14 EluviaTM and 12 Zilver PTX patients. The commenter notes that the results for the final 12 Zilver PTX patients added to the post-hoc analysis appear to be outliers who had significantly worse outcomes than the primary patient cohort (patency 77.5 percent [110/142] in primary cohort vs. 33.3 percent [4/12] in post-hoc cohort, p=0.002) and raises doubt about the poolability of the data between these two cohorts.

The commenter also asserted that in the most recently presented 2-year results (with data correction),[] there is no significant difference in patency between Eluvia and Zilver PTX at 2 years (83.0 percent vs. 77.1 percent, p=0.10, not significant). The commenter contended that based on these results a claim of superior primary patency cannot be maintained.

The commenter was concerned by the claim of “highest reported” two-year primary patency, stating. (1) The modified definition of primary patency is inconsistent across multiple studies, (example, the Zilver PTX randomized trial and the IMPERIAL trial) which limits appropriate comparability. (2) the second Zilver PTX randomized trial, which had a higher 2-year primary patency rate of 83.4 percent compared with 83.0 percent for the EluviaTM system, was excluded from the comparison; [] and (3) the claim of superiority requires head-to-head comparative studies or at a minimum an attempt to account for differences between compared studies.

The commenter next asserted that the long-term safety of the EluviaTM system has not been demonstrated due to. (1) A lack of long-term safety data. (2) multiple reports noting the presence of aneurysmal degeneration, peri-stent inflammation, or negative late lumen loss associated with the EluviaTM system,.

(3) the total dose and not just the density must be considered. (4) paclitaxel is released directly to the target lesion by the Zilver PTX DES and not by the EluviaTM system. (5) avoiding use of a polymer, if possible, is a preferred stent design.

And (6) long-term paclitaxel release may not be necessary or desired. Another commenter stated that the EluviaTM system meets the substantial clinical improvement criterion because CMS already concluded the same in the FY 2022 IPPS/LTCH final rule for new technology add-on payment. Response.

We appreciate the information provided by the commenters and have taken this into consideration when making our determination of the substantial clinical improvement criterion, discussed below. Comment. The applicant submitted a comment in support of the substantial clinical improvement criterion.

The applicant stated that in the CY 2022 OPPS/ASC proposed rule CMS referenced the FY 2021 IPPS/LTCH final Start Printed Page 63600 rule (85 FR 58657) and stated that CMS no longer has concerns about the long-term mortality signal. The applicant further stated that in the FY 2021 IPPS/LTCH final rule, CMS determined that the EluviaTM system represents a substantial clinical improvement over existing technologies. The applicant added that despite the assessment in the FY 2021 IPPS/LTCH final rule, in the CY 2022 OPPS/ASC proposed rule, CMS asked for input regarding whether the EluviaTM system meets the substantial clinical improvement criterion, even raising concerns that CMS agreed were not an issue in the discussion of its NTAP decision.

The applicant asserted that the regulations governing the substantial clinical improvement criterion for NTAP and for transitional device pass-through status are nearly identical. The applicant asserted that in its discussion of substantial clinical improvement for the EluviaTM system under the IPPS NTAP application, CMS found that the EluviaTM system met the criterion based on the following endpoints. Superior primary patency.

Reduced rate of subsequent therapeutic interventions. Decreased future hospitalizations and physician visits. Reduced hospital readmission rates.

Reduced rate of device-related complications. And similar functional outcomes and EQ-5D index values with half the rate of target lesion revascularizations (TLRs). The applicant added that these endpoints are clinically meaningful for all patients with PAD and not just for those in the inpatient setting.

The applicant asserted that there is no evidence-based rationale that would lead CMS to a reach a different conclusion regarding substantial clinical improvement for the EluviaTM system for transitional device pass-through status versus NTAP. The applicant added that there is no difference in the indicated patient population for the EluviaTM system based on site of service, which is determined by physicians based on the totality of a patient's condition. Response.

We appreciate the additional information provided by the commenters. We note in the FY 2021 IPPS/LTCH final rule (85 FR 58657) CMS determined that the EluviaTM system met the substantial clinical improvement criterion after consideration of the comments received and for the reasons discussed, including the improved outcomes shown in the IMPERIAL and MAJESTIC trials as well as the updated August 7, 2019 FDA guidance in regard to paclitaxel-coated devices. As we stated in the FY 2021 IPPS/LTCH final rule, the applicant provided the following two-year results from the IMPERIAL global randomized controlled clinical trial, comparing the EluviaTM system to Zilver® PTX®.

• The EluviaTM system maintains higher primary patency than Zilver® PTX® at 2 years, 83.0 percent compared to 77.1 percent. The applicant contended that guidelines recognize the importance of primary patency in assessing the efficacy of peripheral endovascular therapies.[] • The EluviaTM system's 2-year primary patency is the highest reported in a superficial femoral artery US pivotal trial for a drug-eluting stent or drug coated balloon.[] Per the applicant, the 2-year primary patency results are consistent with the 2-year TLR results released earlier in 2019.[] According to the applicant, the EluviaTM system sustained a statistically significant reduction in TLR at 2 years compared to Zilver PTX, 12.9 percent vs. 20.5 percent (p = 0.0472).[] • In a subgroup analysis of patients 65 years and older (Medicare population), the primary patency rate in the EluviaTM system stent group is 92.6 percent, compared to 75.0 percent for the Zilver® PTX® stent group (p=0.0386).

One commenter identified potential issues with the data used to evaluate the EluviaTM system for substantial clinical improvement. In spite of the information presented by the commenter, we concur with the assessment discussed in the FY 2021 IPPS/LTCH final rule and the applicant's additional clarification concerning the specific endpoints for which they believe the EluviaTM system meets the substantial clinical improvement criterion. We note one commenter takes issue with two of the above points that CMS relied upon in the FY 2021 IPPS/LTCH final rule in its determination of substantial clinical improvement, ( e.g.

The higher primary patency, the 2-year primary patency being the “highest reported”, and the target lesion revascularization rate). However, based upon the data and comments received we note that the EluviaTM system group maintained a higher primary patency rate than the Zilver® PTX® stent group (92.6 percent vs. 75.0 percent, p <.

0.05) in the subgroup analysis of patients 65 years and older. Given this information and the information provided by the applicant and commenters in their comments, we agree that the EluviaTM system meets the substantial clinical improvement criterion at § 419.66(c)(2). The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d).

Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that EluviaTM system would be reported with the HCPCS codes in the following Table 36.

Start Printed Page 63601 To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. For our calculations, we used APC 5193—Level 3 Endovascular Procedures, which had a CY 2021 payment rate of $10,042.94 at the time the application was received. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657).

HCPCS code 37226 had a device offset amount of $4,843.71 at the time the application was received. 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 the EluviaTM system is 56 percent of the applicable APC payment amount for the service related to the category of devices of $10,042.94 ((5,645/10,042.94) × 100 = 56.2 percent).

Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we believe the EluviaTM system meets the first cost significance requirement. The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost for the EluviaTM system is 117 percent of the cost of the device-related portion of the APC payment amount for the related service of $4,843.71 ((5,645/4,843.71) × 100 = 116.5 percent).

Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we do not believe that the EluviaTM system meets the second cost significance requirement. The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost for the EluviaTM system and the portion of the APC payment amount for the device of $4,843.71 is 8 percent of the APC payment amount for the related service of $10,042.94 (((5,645−4,843.71)/10,042.94) × 100 = 7.98 percent).

Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we do not believe that the EluviaTM system meets the third cost significance requirement. We invited public comments on whether the EluviaTM system meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. Comment.

A manufacturer of a competitor device and a second commenter agreed that based on calculations included in the CY 2022 OPPS/ASC proposed rule for the second and third cost significance tests, the EluviaTM system does not meet the cost significance requirements for device pass-through payment. A third commenter stated that in response to the CY 2021 OPPS/ASC proposed rule they noted that a device that meets the newness and substantial clinical improvement criteria for transitional pass-through payment may only replace some of the devices included in the device-related portion (DRP). Multiple commenters asserted that the EluviaTM system meets the cost criteria for transitional device pass-through status.

The commenters stated that the current methodology of the cost significance criterion uses a single number, which includes all devices utilized in a particular procedure. The commenters explained that since the DRP contains all devices for respective claims, the DRP is artificially high as a benchmark for the EluviaTM system since it only replaces one stent in the procedure. The commenters concluded that as a result of this issue, the EluviaTM system does not meet the cost criteria because the average sales price of the device is not sufficient to account for all the other devices included in the DRP, and not just the stent it is replacing.

Response. We appreciate the information provided by the commenters and have taken this into consideration in making our final determination of the cost significance criterion discussed below. Comment.

The applicant agreed that the EluviaTM system meets the first cost test. Regarding the second and third cost significance tests, the applicant stated that CMS overestimated the DRP used in the cost significance tests. According to the applicant, when calculating the OPPS payment for a procedure that uses a pass-through device, CMS has an established policy of only subtracting (as the DRP) the cost of those devices that are replaced by the transitional pass-through device.

The applicant asserted that the payment policy methodology for calculating the DRP should also be applied to the calculating cost significance for the cost criteria. The applicant asserted of the cost significance tests that the first question addresses the cost of the transitional pass-through device relative to total payment, whereas the second two questions address cases where the transitional pass-through device would replace device costs currently reflected in the associated procedure payment amount. The applicant offered three scenarios concerning candidate devices and the DRP.

(1) A candidate device may replace all or nearly all of the devices that are accounted for in the DRP of the related procedures ( e.g., neurostimulators). (2) a candidate device may replace only some of the devices included in the DRP ( e.g., the EluviaTM system). And (3) a candidate device may not replace any of the devices included in the DRP ( e.g., a single-use endoscope).

According to the applicant, CMS' calculation of the DRP to include all the devices used in the related procedure overestimates the DRP in the latter two scenarios. The applicant asserted that because of this novel technologies that otherwise meet the transitional pass-through criteria would fail the cost significance tests since they will be compared to the cost of all devices used in a procedure and manufacturers may establish higher device prices to exceed an inflated DRP. The applicant asserted that CMS' current approach to calculating the DRP is contrary to the intent of the TPT program, which is to recognize the costs associated with novel, clinically beneficial technologies that are not yet incorporated into the procedural cost calculation with temporary, separate device-related payment until the new device cost is reflected in rate setting data.

The applicant added, the intent of the DRP in the cost significance test is to compare the cost of the pass-through candidate device to the costs of the device(s) that the pass-through candidate device would replace and not to compare the costs of the candidate device to the total costs of all devices used in a procedure to include those that are unrelated and not replaced by the candidate device. Next the applicant stated that in its discussion of the pass-through device offset policy for OPPS payment in the CY 2004 Outpatient Prospective Payment System (OPPS) Final Rule, CMS stated, “Beginning with the implementation of the 2002 OPPS update (April 1, 2002), we deduct from the pass-through payments for the identified devices an amount that offsets the portion of the APC payment amount that we determine is associated with the Start Printed Page 63602 device, as required by section 1833(t)(6)(D)(ii) of the Act.”[] The applicant continued, “We will apply an offset to a new device category only when we are able to determine that an APC contains costs associated with the new device. We will also continue our existing methodology for determining any offset amount if we find that device costs associated with a new device category are packaged into the APCs.

We will include information about any applicable offset in the transmittal we issue to announce information regarding the new category”.[] The applicant stated that on at least two occasions, CMS has referenced the above-stated policy in decisions not to apply a device offset when calculating payment for pass-through devices. The applicant cited two instances where they believe CMS has chosen to not apply a device offset, first with C2623 (Drug coated angioplasty balloon) [] and C1748 (Single use [disposable] endoscope).[] According to the applicant, with these two decisions, CMS has acknowledged that it does not consider the cost of devices that are not replaced by the pass-through device when calculating the pass-through payment amount. The applicant asserted that given these decisions and the associated payment policy, CMS has not only shown that it has the authority to define the DRP calculation methodology, but it has also established a precedent for defining the DRP as only those devices that are replaced by the pass-through device.

The applicant stated that it is therefore inconsistent for CMS to apply a different DRP methodology in the cost test for devices seeking transitional pass-through payment. According to the applicant the prior precedents and this inconsistency are central to the application of the TPT cost significance test for the EluviaTM system. The applicant stated that as requested in their 2018 transitional pass-through application submission, they again ask CMS to consider only the cost of those devices replaced by the EluviaTM system when calculating the DRP for CPT Code 37226 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral.

With transluminal stent placement(s), includes angioplasty within the same vessel, when performed). According to the applicant the average femoral, popliteal stent placement procedure (CPT 37226) includes ancillary (non-stent) device costs of $2,311.26 and average stent device costs of $3,406.93. The applicant asserts then that a more appropriate comparison is of the EluviaTM system to the $3,406.93 in average stent device costs.

The applicant contends that the non-stent devices should not be considered in the DRP utilized in the 3-part cost significance test because the EluviaTM system is not replacing these costs associated with the non-stent devices. The applicant concluded that should the $3,406.93 be used as the DRP, then the EluviaTM system passes the second and third cost significance tests at approximately 166 percent and 22 percent, respectively. Response.

As we stated above in section IV.2.a. Of this final rule with comment period, to be eligible for device pass-through payments a device must have an average cost that is not “insignificant” relative to the payment amount for the procedure or service with which the device is associated as determined under § 419.66(d). Since the CY 2017 OPPS/ASC final rule (81 FR 79648 through 79649), CMS has described the manner in which it evaluates device pass-through applicants against the cost significance criterion at § 419.66(d).

Per the applicant, CMS has stated in prior rules that we will deduct from the pass-through payments for a device an amount that offsets the portion of the APC payment amount that we determine is associated with the device. Once a device is approved for pass-through payments CMS appropriately applies this rationale to determine the payment rate for devices with pass-through status. However, except in rare circumstances, CMS has consistently applied the full device offset amount associated with the applicable APC used to evaluate the cost significance tests at § 419.66(d).

In this manner we believe we are identifying devices whose average cost is not “insignificant”. In reference to the prior precedents identified by the applicant (C2623 and C1748) where CMS determined to not apply an offset we disagree with the applicant's conclusion that these situations apply to the EluviaTM system and the request for a partial device offset. In some cases, CMS determines that none of the costs of a new device are included in the applicable APC.

For example, in the CY 2021 OPPS/ASC final rule (85 FR 85994), CMS determined for the EXALTTM Model D Single-Use Duodenoscope that the costs associated with the device were not already reflected in the device portions of APCs 5303 (Level 3 Upper GI Procedures) or 5331 (Complex GI Procedures) because there were no single-use duodenoscopes on the market previously so no operating cost data associated with such devices could be included in the historical OPPS claims data. Additionally, none of the costs associated with the device were reflected in the device portions of the applicable APCs. This is similarly reflected in the CMS transmittal 10541 dated December 31, 2020 where CMS stated, “we have determined that the costs associated with C1748 are not already reflected in APCs 5303 or 5331”.[] In its comment to CMS, the applicant asserts that the EluviaTM system replaces a portion of the previous related devices and not all of previous related devices.

This is further evidenced by the applicant's request for a partial device-related portion (that is, device offset) of $3,406.93. CMS has historically used a full device offset related to the applicable APC in the majority of cases when assessing the cost criterion. To our knowledge CMS has never utilized a partial device offset in this manner.

If CMS desired to change the cost criterion evaluation it must do so through notice and comment rulemaking to provide ample notice and an opportunity for public comment. Therefore, we do not believe the use of a partial device offset, as the applicant has requested, would be consistent with CMS' application of the cost significance criterion specified at § 419.66(d). Because the applicant did not meet the second and third cost significance tests, we do not believe the EluviaTM system meets the cost significance criterion specified at § 419.66(d).

After consideration of the public comments we received and our review of the device pass-through application, we are not approving the EluviaTM system for transitional pass-through payment status in CY 2022 because the product does not meet the cost significance criterion. (4) CochlearTM Osia® 2 System Cochlear Americas submitted an application for a new device category Start Printed Page 63603 for transitional pass-through payment status for the CochlearTM Osia® 2 System (hereinafter referred to as the Osia® 2 System) by the December 2020 quarterly deadline for CY 2022. The Osia® 2 System is a transcutaneous, active auditory osseointegrated device that replaces the function of the middle ear by providing mechanical energy to the cochlea.

According to the applicant, the device consists of four components including. (1) An external sound processor, the Osia 2 Sound Processor. (2) the Osia OSI200 Implant Piezo PowerTM transducer.

(3) the BI300 osseointegrated implant for anchoring and single point transmission. And (4) a fixation screw for attaching the OSI200 implant to the BI300 implant which is implanted in the skull. The external sound processor captures environmental sounds and converts the sound signal into a digital signal transmitted as a radiofrequency.

The external sound processor also contains a magnet and a battery (rechargeable 675 zinc air button 1.4Volt. 600 mA-hrs capacity). The magnets couple the external and internal components across the skin.

The transducer (Piezo PowerTM) detects the radiofrequency signals after they pass through the intact skin and transforms the signal to vibrations, which are then transmitted to the bone-implanted fixation screw. The screw vibrates the skull bone (temporal portion) which stimulates the cochlea (inner ear) to transmit the information to the brain so that the vibrations are perceived as sounds. The implanted portion is 7.2 cm x 3 cm x 0.49 cm.

The system has a fitting range of 55 dB sensory neural hearing loss. The applicant stated that unlike hearing aids, which make sounds louder, an auditory osseointegrated device, such as the Osia® 2 System can improve clarity of hearing and improve hearing at higher frequencies. With respect to the newness criterion at § 419.66(b)(1), the Osia® 2 System received FDA 510(k) clearance on November 15, 2019, based on a determination of substantial equivalence to a legally marketed predicate device.

The Osia® 2 System is intended for the following patients and indications. (1) Patients 12 years of age or older. (2) patients who have a conductive or mixed hearing loss and still can benefit from sound amplification.

The pure tone average (PTA) bone conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz) should be better than or equal to 55 dBHL. (3) Bilateral fitting of the Osia® 2 System is intended for patients having a symmetrically conductive or mixed hearing loss. The difference between the left and right sides' BC thresholds should be less than 10 dB on average measured at 0.5, 1, 2, and 3 kHz, or less than 15 dB at individual frequencies.

(4) patients who have profound sensorineural hearing loss in one ear and normal hearing in the opposite ear (that is, single-sided deafness or “SSD”). The pure tone average air conduction hearing thresholds of the hearing ear should be better than or equal to 20 dB HL (measured at 0.5, 1, 2, and 3 kHz). The Osia® 2 System for SSD is also indicated for any patient who is indicated for an air-conduction contralateral routing of signals (AC CROS) hearing aid, but who for some reason cannot or will not use an AC CROS.

Prior to receiving the device, it is recommended that an individual have experience with appropriately fitted air conduction or bone conduction hearing aids. We received the application for a new device category for transitional pass-through payment status for the Osia® 2 System on December 1, 2020, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comments on whether the Osia® 2 System meets the newness criterion.

Comment. The applicant asserted that the Osia® 2 system is new because it received FDA clearance on November 15, 2019 and its predicate device received FDA clearance on July 3, 2019, both of which are within 3 years of December 1, 2020, the date on which we received the device pass-through application for the Osia® 2 System. The applicant asserted that the predicate to these devices, the BONEBRIDGE System, received FDA authorization on July 20, 2018 which is also within the newness period for transitional pass-through status.

Response. We appreciate the applicant's input and agree that the Osia® 2 system meets the newness criterion. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the Osia® 2 System is integral to the service provided, is used for one patient only, comes in contact with human skin, and is surgically implanted or inserted.

The applicant also claimed that the Osia® 2 System meets the device eligibility requirements of § 419.66(b)(4) because it is not equipment, 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. We invited public comments on whether the Osia® 2 System meets the eligibility criteria at § 419.66(b). We did not receive public comments in regard to whether the Osia® 2 system meets the eligibility criteria at § 419.66(b)(3) or § 419.66(b)(4), therefore we agree with the applicant that the Osia® 2 system meets the criteria of § 419.66(b).

The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant stated that the Osia® 2 System differs significantly from the devices that were included in the previous category for auditory osseointegrated devices (L8690—Auditory osseointegrated device, includes all internal and external components) which was effective from effective from January 1, 2007 through December 31, 2008.

The applicant claimed that the devices that were described by this category include a transducer/actuator and sound processor that is worn externally with the transducer/actuator connected to the skull by a percutaneous post or abutment that penetrates the skin. In these devices, the sound processor converts sound into a digital signal which the transducer/actuator converts to vibrations that are transmitted to the skull through the abutment. The vibrations are transmitted directly to the inner ear and are reproduced as sound.

The applicant stated that the Osia® 2 System is distinct from devices with a percutaneous connection between the transducer and the sound processor because the transducer/actuator for the Osia® 2 system is surgically implanted and has a magnetic transcutaneous attachment to the external sound processor. The applicant also claimed that the percutaneously coupled osseointegrated devices included in the previous device pass-through category convert sound to mechanical vibrations in the external sound processor/actuator, then transmit the vibrations to the internal components. The applicant claimed that the Osia® 2 system instead converts the sound to mechanical vibrations after it has reached the internal components.

The applicant claimed that the technology to fully implant the transducer/actuator did not exist when the previous device pass-through category was established. The applicant proposed the device pass- Start Printed Page 63604 through category descriptor “Auditory osseointegrated device, including implanted transducer/actuator with radiofrequency link to external sound processor”. The applicant stated that the BONEBRIDGE Bone Conduction Implant System, which also submitted a device pass-through application for CY 2022 and is described in this section under number (2) above, would also be described by the proposed additional category.

We stated in the CY 2022 OPPS/ASC proposed rule that we believe that the Osia® 2 system is described by L8690—Auditory osseointegrated device, includes all internal and external components. The applicant has noted differences between the Osia® 2 system and the devices that were described by L8690, specifically percutaneous, auditory osseointegrated devices, regarding the connection between the implanted transducer and the external audio processor (percutaneous abutment vs. Transcutaneous magnetic attraction) however, we believe that there is a similar mechanism of action for all these devices specifically, vibratory stimulation of the skull to stimulate the receptors in the cochlea (inner ear).

Further, we believe that the broad descriptor for L8690 of “Auditory osseointegrated device, includes all internal and external components” includes the applicant's device. In the CY 2022 OPPS/ASC proposed rule, we invited public comment on whether the Osia® 2 system meets the device category criterion. Comment.

We received multiple comments addressing § 419.66(c)(1) for both BONEBRIDGE and the Osia® 2 system. One commenter stated they do not support CMS' position that the BONEBRIDGE and Osia® 2 system should not be granted a new category, because these devices take much longer to implant surgically than percutaneous bone conduction implants, they are active sound processors, and they work differently than percutaneous devices like the BAHA or Oticon implants. Another commenter who also disagreed with CMS that the BONEBRIDGE and Osia® 2 system are adequately described by L8690 stated that the BONEBRIDGE and Osia® 2 system are transcutaneous hearing implants, and that CMS should create a new HCPCS code that describes both the procedure and the implant because both are new.

The commenter expressed their disappointment in what they described as CMS' continual resistance to conduct rulemaking specifically on Middle Ear Implants (MEIs) because they believe CMS should hear the opinions of clinical experts, physicians, and Medicare beneficiaries regarding the appropriateness of classifying MEIs as prosthetic implants. A different commenter stated their support for CMS' conclusion in the proposed rule that BONEBRIDGE and Cochlear Osia® are appropriately described by a pass-through category previously in effect. Two commenters stated that CMS must support the inclusion of middle ear implants in the prosthetic category.

The commenters asserted that not including these devices denies beneficiaries access to all FDA-approved hearing prosthetics and discourages in new technology for the hearing impaired. Response. We appreciate the input provided by these commenters.

We have taken this information into consideration in our determination of the eligibility criterion at § 419.66(c)(1), discussed below. We note some of the comments, those addressing hearing prosthetics, are outside of the scope of this rule. Please refer to the above section (2) BONEBRIDGE where we summarize these comments in full.

Comment. One commenter stated that the pass-through category identified by CMS, L8690, does not provide an accurate description of the Osia® 2 system as it does not account for several material differences that exist between Osia (and other active auditory osseointegrated implant (AOI) systems) and the devices intended to be described by L8690. The commenter asserted that the mechanism by which the vibrations are generated and reach the skull are entirely different, which is reflected by the FDA device classification.

The commenter asserted that L8690, developed in 2007, could not account for active devices. Response. We appreciate the information provided by the commenter and have taken this into account in our determination of the § 419.66(c)(1) eligibility criterion, discussed below.

Comment. The applicant stated that L8690 does not describe active, transcutaneous systems like Osia® 2 and BONEBRIDGE. First, the applicant stated that L8690 did not extend to active, transcutaneous active osseointegrated implants (AOIs) when it was created in 2007 because the only osseointegrated implant at that time was passive and percutaneous.

Second, the applicant, responding to CMS' statement, “that there is a similar mechanism of action for all these devices. . .” [] , stated that the mechanism by which the vibrations are generated and reach the skull are entirely different and can affect safety, clinical outcomes, and patient quality of life.

The applicant asserted that the active nature of the Osia® 2 system, which diminishes skin-related complications associated with percutaneous devices and at the same time improves audiological outcomes, differs from passive systems which involve the transmission of mechanical vibrations from the external components to the internal components. As opposed to previous technologies, the applicant asserted that active systems incorporate a new mechanism of action that sends digital signals from the external sound processor to the internal components, which then convert a digital signal to a vibration directly at the point of bone contact, eliminating the need for percutaneous attachment. The applicant stated that although both active and passive systems ultimately generate a vibration to stimulate the cochlea, the way they do so and where the vibration is generated are entirely different.

The applicant added that FDA created a new device classification for active implantable bone conducting hearing systems in response to BONEBRIDGE's application in 2018 (21 CFR 874.3340), which is specifically for active systems as opposed to that for passive systems (21 CFR 874.3300). The applicant stated that while they recognize that FDA and CMS classify devices differently for different purposes, they believe that the way FDA classifies bone conduction implants reinforces why CMS should distinguish active implantable bone conduction devices from passive, percutaneous systems for purposes of transitional device pass-through payment status. The applicant next stated that in other situations, CMS has modified broadly worded device categories to recognize technological advances within a device class.

The applicant noted that the descriptor for HCPCS code C1767—“Generator, neurostimulator (implantable)”—was modified to “Generator, neurostimulator (implantable), non-rechargeable” to create a new device pass-through category for HCPCS codes C1820 (Generator, neurostimulator (implantable), with rechargeable battery and charging system) and C1822 (Generator, neurostimulator (implantable), high frequency, with rechargeable battery and charging system). Response. After consideration of the public comments we received, we agree there is no existing pass-through payment category that appropriately describes the Osia® 2 system.

The Osia® 2 system device consists of an external Start Printed Page 63605 processor that receives sound pressure energy and converts this to a radiofrequency signal which communicates with a surgically implanted subcutaneous transducer/actuator via a stud. The transducer/actuator converts this signal to mechanical vibrations that are transmitted to the skull and inner ear. As stated by the applicant, when the existing pass-through category, Auditory osseointegrated device (L8690), was issued in 2007, the technology to implant the transducer/actuator did not exist.

Based on this information, we have determined that the Osia® 2 system meets the eligibility criterion at § 419.66(c)(1). Due to the similarity between the devices, we refer the reader to section IV(A)(2)(b)(2) of this rule for a similar discussion of the BONEBRIDGE. The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following.

(i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of FDA's Breakthrough Devices Program and has received FDA marketing authorization. With respect to the substantial clinical improvement criterion, the applicant stated that the Osia® 2 system represents a substantial clinical improvement because it provides a reduced rate of device-related complications compared to currently available treatments.

The applicant submitted five references to retrospective case series that studied the long-term complications associated with percutaneous osseointegrated bone conduction hearing devices, specifically bone-anchored hearing aids.[] The applicant stated that complications associated with bone-anchored hearing aids include irritation and/or of the skin surrounding the abutment, skin flap necrosis, wound dehiscence, bleeding or hematoma formation, soft tissue overgrowth and persistent pain.[] Additionally, the applicant also submitted five references to clinical studies and case series involving the use of transcutaneous osseointegrated bone conduction hearing devices. Of these five references, three of these studies involved the use of the BONEBRIDGE device and have been previously discussed in this section, one study that involved the use of the BAHA Attract device, and one study that involved the use of the Osia® system, an earlier version of the Osia® 2 system. In support of their claim that the Osia® 2 system reduced the rate of device-related complications compared to currently available treatments, the applicant submitted a multicenter prospective within-subject study conducted at five centers in Europe, Australia, and USA.

This study investigated clinical performance, safety, and benefit of the Osia® system and included 51 adult subjects with mixed and conductive hearing loss (MHL/CHL, n = 37) and single-sided sensorineural deafness (SSD, n = 14). In regard to safety outcomes, patients experienced the following minor adverse events including pain (n = 7), numbness (n = 1), vertigo (n = 3), swelling (n = 3), tension implant site (n = 1), warmth at the SP site (n = 3), headache (n = 3), hematoma/bleeding (n = 2).[] One participant developed an implant-site three days after implantation, which subsequently developed into skin necrosis and dehiscence. The implant had to be removed 55 days after implantation.

In the CY 2022 OPPS/ASC proposed rule, we expressed concern that the applicant did not submit studies that involved the use of the Osia® 2 system to demonstrate substantial clinical improvement of the device. The applicant submitted one study that investigated the Osia® system that utilizes an earlier model of the device. We explained in the proposed rule that we were concerned that the evidence of substantial clinical improvement submitted by the applicant did not directly compare the Osia® 2 system to other currently available treatments, namely percutaneous or passive, transcutaneous auditory osseointegrated devices.

Therefore, in the CY 2022 OPPS/ASC proposed rule we explained that we were concerned that we are unable to determine a substantial clinical improvement of the Osia 2 system as compared to existing devices. We stated that we would be interested in any additional studies that involve the use of the Osia® 2 system and compare the device to other currently available auditory osseointegrated devices. We invited public comments in the CY 2022 OPPS/ASC proposed rule on whether the Osia® 2 system meets the substantial clinical improvement criterion.

Comment. In response to our concerns about whether the Osia® 2 system meets the substantial clinical improvement criterion, one commenter stated that head-to-head comparisons are not a requirement for transitional pass-through status. The commenter added that because the Osia® 2 System and its predecessor system are substantially similar as determined by FDA, the clinical evidence for the predecessor system applies equally to the Osia® 2 System.

The commenter asserted that the clinical evidence submitted by the applicant, as described by CMS in the CY 2022 OPPS/ASC proposed rule, supports that the Osia® 2 System is a substantial clinical improvement compared to percutaneous systems. Response. We thank the commenter for the information and have taken it into consideration in our determination of whether the Osia® 2 System meets the substantial clinical improvement, discussed below.

Comment. The applicant submitted a comment in support of its position that the Osia® 2 System meets the substantial clinical improvement criterion. The applicant contended, based on the discussion in the CY 2022 OPPS/ASC proposed rule, that CMS does not appear to be concerned that there is insufficient evidence to conclude that active/transcutaneous systems are a substantial clinical improvement over passive/percutaneous systems.

Rather, the applicant believes our concerns relate to the fact that Start Printed Page 63606 evidence was submitted for Osia® 1 and not Osia® 2.[] In response to CMS' concerns, the applicant stated that first, head-to-head trials are not a requirement for demonstrating substantial clinical improvement for purposes of qualifying for transitional pass-through device—status and would not be appropriate in this situation. First, the applicant stated that enrolling patients in a head-to-head trial in which the primary difference is expected to be adverse events associated with one treatment arm is extremely challenging, and it is unclear what additional data would be gained, particularly since the nature and frequency of device-related complications between passive percutaneous and transcutaneous devices is established and commonly reported in the literature. Second, the applicant stated that clinical studies involving the first Osia® device are applicable to the Osia® 2 System because the devices are substantially equivalent and only minor differences exist between the two versions of the device.

The applicant notes that the FDA 510(k) clearance for the Osia® 2 system expressly noted clinical performance data did not reveal significant differences in hearing performance between either system and did not raise new issues of safety or effectiveness. Next the applicant discussed two studies that involve the Osia® 2 system. The first study reported the surgical and audiological experience with the Osia 2 System based on a U.S.

Nationwide controlled market release (CMR) conducted between December 9, 2019 and February 14, 2020 involving 23 surgeons who performed 44 operations on 43 recipients.[] The applicant noted that no device-related complications were reported and five complications not associated with the Osia® 2 system were reported that were all successfully resolved. According to the applicant, the authors concluded that the Osia® 2 system, “. .

. Represents an important advance in hearing implant technology. Utilizing innovative digital piezoelectric stimulation, this active auditory osseointegrated implant (OSI) delivers high-power output and improved high frequency gain for optimizing speech perception while maintaining safety and engendering high patient satisfaction.” [] The second study is a systematic review that, according to the applicant, provides evidence of substantial clinical improvement for both the Osia® and Osia® 2 systems.[] According to the applicant, the authors reported their findings from reviewing adverse event reports associated with active transcutaneous bone conduction implants (atBCls) in the Manufacturer and User Facility Device Experience (MAUDE) database of FDA.

According to the applicant, after removing irrelevant reports and duplicates, 83 MDRs describing 91 adverse events (patient injuries and device malfunctions) were analyzed, all of which occurred postoperatively. The applicant asserted that the five most comment types of events, device malfunctions leading to a lack of conduction or hearing (n=26, 29 percent), s (n=14, 15 percent), device malfunctions of intermittent or reduced hearing (n=12, 13 percent), and pain and wound formation (n=9 or 10 percent), accounted for 77 percent of all events reported. The applicant asserted that device malfunctions were predominantly associated with BONEBRIDGE (93 percent of all device malfunctions reported), while patient injuries such as s were more commonly reported for Osia® (67 percent of all reported injuries).

According to the applicant, the authors concluded that complications observed with active transcutaneous BCI use are similar to those with passive transcutaneous BCIs.[] In regard to evidence submitted with their application, the applicant stated commonly reported adverse events which include ear inflammations, dizziness, and headache, are clearly not related to the implantation. Based on reported events in a comparison between the Osia® system [] and the Baha Connect System [] the applicant asserted that it is clear that the Osia® System has significantly lower rates of implantation-related adverse events than the passive/percutaneous system. Response.

We thank the applicant for their submission and the additional information provided. Because of the overlap between comments for the Osia® 2 system and BONEBRIDGE, we direct readers to section (IV)(2)(b)(2)(2) of this final rule with comment period. We appreciate the commenters' responses on the Osia®2 system application.

We disagree with the applicant's comment that commonly reported adverse events which include ear inflammations, dizziness, and headache, are clearly not related to the implantation. We note, the term “dizziness” can be used to explain a variety of symptoms that can include weakness, lightheadedness, unsteadiness and vertigo, and an argument against causality may be reasonable. €œHeadache”, however, is pain affecting the head or face.

To dismiss a possible connection between the skull implantation procedure and a complaint of post-procedure headache does not seem reasonable. While new evidence was submitted by the applicant which attempts to address substantial clinical improvement for the Osia® 2 system, we are unable to conclude that the device meets the substantial clinical improvement criterion. Specifically, we note that the results of a meta-analysis are informative, however without controlling for the differences across studies (for example, study design, sampling technique, etc.) we are unable to determine if the treatment effects seen are due to the Osia® 2 system or due to differences in study design.

In regard to commenter's suggestion that a head-to-head analysis not being required for an assessment of substantial clinical improvement, we agree in part. While it may be the case that a direct head-to-head comparison may not always be feasible or appropriate, we acknowledge that this is the ideal manner in which to address comparisons between one technology and another. For example, CMS utilized meta-analyses and historical controls as evidence of substantial clinical improvement when robust critical efforts have been made to account for variations in study design ( i.e., confounding) in the former and comprehensive reviews to establish the validity of the latter.

In regard to the second study [] discussed in the applicant's comment, we note that the small sample size of 43 recipients and 44 procedures may not be generalizable to a larger Medicare beneficiary population. Therefore, we are unable to determine a substantial clinical Start Printed Page 63607 improvement of the Osia® 2 system as compared to existing devices. After consideration of the public comments and additional information we have received, we are not approving the Osia® 2 system for transitional pass-through payment status in CY 2022 because the product does not meet the substantial clinical improvement criterion.

Because we have determined that the Osia® 2 system does not meet the substantial clinical improvement criterion, we have not evaluated the cost criterion. (5) Pure-Vu® System Motus GI submitted an application for a new device category for transitional pass-through payment status for the Pure-Vu® System (Pure-Vu®) for CY 2022. The applicant asserted that the Pure-Vu® System helps to avoid aborted and delayed colonoscopy procedures due to poor visualization of the colon mucosa by creating a unique High Intensity, Pulsed Vortex Irrigation Jet that consists of a mixture of air and water to break-up fecal matter, blood clots, and other debris, and scrub the walls of the colon while simultaneously removing the debris through two suction channels.

The applicant stated that the suction channels have a sensor to detect the formation of a clog in the channels, triggering the system to automatically purge and then revert to suction mode once the channel is clear. According to the applicant, this combination of the agitation of the fluid in the colon via the pulsed vortex irrigation and simultaneous removal of the debris allows the physician to visualize the colon and achieve a successful colonoscopy or other advanced procedure through the colonoscope even if the patient is not properly prepped and has debris either blocking the ability to navigate the colon or covering the colon wall obscuring the mucosa and any pathology that may be present. The applicant asserted that the constant volume suction pumps do not cause the colon to collapse, which allows the physician to continue to navigate the colon while cleansing and avoids the need to constantly insufflate the colon, which may be required with other colonoscopy irrigation systems.

The applicant stated that the Pure-Vu® System is comprised of a workstation that controls the function of the system, a disposable oversleeve that is mounted on a colonoscope and inserted into the patient, and a disposable connector with tubing (umbilical tubing with main connector) that provides the interface between the workstation, the oversleeve, and off the shelf waste containers. The applicant explained that the workstation has two main functions. Cleansing via irrigation and evacuation, and acting as the user interface of the system.

The applicant explained that the irrigation into the colon is achieved by an electrical pump that supplies pressurized gas (air) and a peristaltic pump that supplies the liquid (water or saline). According to the applicant, the pressurized gas and liquid flow through the “main connector” and are mixed upon entry into the umbilical tubing that connects to the oversleeve. The applicant explained that the gas pressure and flow are controlled via regulators and the flow is adjusted up or down depending on the cleansing mode selected.

The applicant stated that a foot pedal connected to the user interface activates the main functions of the system so that the user's hands are free to perform the colonoscope procedure in a standard fashion. The applicant stated that the evacuation mode (also referred to as suction) removes fecal matter and fluids out of the colon. The applicant noted that the evacuation function is active during cleansing so that fluid is inserted and removed from the colon simultaneously.

The applicant explained that the evacuation pumps are designed in a manner that prevents the colon from collapsing when suctioning, which facilitates the ability to simultaneously irrigate and evacuate the colon. According to the applicant, during evacuation, the system continuously monitors the pressure in the evacuation channels of the oversleeve and if the pressure drops below pre-set limits the pumps will automatically reverse the flow. The applicant explained that the clog sensor triggers the system to automatically purge the material out of the channel and back into the colon where it can be further emulsified by the Pulsed Vortex Irrigation Jet, and then automatically reverts back into evacuation mode once the channel is cleared.

The applicant stated that the evacuation (suction) that drains fecal matter and fluids out of the colon is generated by peristaltic pumps that can rotate in both directions, either to evacuate fluids and fecal matter from the colon through the evacuation tubes and into a waste container, or while in the reverse direction, to purge the evacuation tubes. The applicant claimed the suction created by this type of pump creates a constant volume draw of material from the colon and therefore prevents the colon from collapsing rapidly. According to the applicant, purging of evacuation tubes may be activated in two ways.

The purging cycle is automatically activated when low pressure is noted by the evacuation-line sensor (it is also activated for the first 0.5 seconds when evacuation is activated to make sure the line is clear from the start). Or a manual purge may be activated by the user by pushing the “manual purge” button on the foot pedal. The applicant claimed the pressure-sensing channel is kept patent by using an air perfusion mechanism where an electrical pump is used to perfuse air through the main connector and into the oversleeve, while the sensor located in the workstation calculates the pressure via sensing of the channel.

The applicant explained the Pure-Vu® System is loaded over a colonoscope and that the colonoscope with the Pure-Vu® Oversleeve is advanced through the colon in the same manner as a standard colonoscopy. The applicant stated that the body of the oversleeve consists of inner and outer sleeves with tubes intended for providing fluid path for the cleansing irrigation (2X), the evacuation of fluids (2X), the evacuation sensor (1X) and that the flexible head is at the distal end of the oversleeve and is designed to align with the colonoscope's distal end in a consistent orientation. The applicant explained that the distal cleansing and evacuation head contains the irrigation ports, evacuation openings, and a sensing port.

According to the applicant, the system gives the physician the control to cleanse the colon as needed based on visual feedback from the colonoscope to make sure they have an unobstructed view of the colon mucosa to detect and treat any pathology. The applicant noted that since the Pure-Vu® System does not interfere with the working channel of the colonoscope, the physician is able to perform all diagnostic or therapeutic interventions in a standard fashion with an unobstructed field of view. With respect to the newness criterion at § 419.66(b)(1), the Pure-Vu® System first received FDA 510(k) clearance on September 22, 2016 under 510(k) number K60015.

Per the applicant, this initial device was very cumbersome to set up and required direct support from the company and therefore was not viable for a small company with limited resources to market the device. The applicant noted that the initial device could have been sold starting on January 27, 2017 when the first device came off the manufacturing line. Per the applicant, the device was allocated for clinical evaluations but 10 institutions throughout the country did purchase the device outside of any true clinical study, mostly based on the fact that Start Printed Page 63608 physicians wanted to try the product prior to committing to a clinical trial.

The applicant further noted that minor modifications were made to the Pure-Vu® System in additional 510(k) clearances dated December 12, 2017 and June 21, 2018. The current marketed Pure-Vu® System was then granted 510(k) clearance on June 6, 2019 under 510(k) number K191220. Per the applicant, this clearance changed the entire set-up of the device, redesigned the user interface, and reduced the size, among other changes.

According to the applicant, this updated version was commercially available as of September 19, 2019. Comment. In response to CMS' summary, the applicant stated that the Pure-Vu® System Generation 1 (Gen 1) received FDA 510(k) clearance in September 2016.

The applicant added that the Gen 1 version of the system was used to gather clinical data using disposables sold at a discounted rate to one institution and five institutions in 2017 and 2018, respectively. According to the applicant, after receiving feedback from providers concerning the Gen 1 system, the company decided not to make the Gen 1 product available to the market. According to the applicant, the Generation 2 (Gen 2) version of the Pure-Vu® System obtained FDA 510(k) clearance in June 2019.

The applicant clarified that no application for the Gen 1 device was submitted for pass-through payment in the outpatient setting and asserted that since only a few institutions purchased the device, the cost burden of the Gen 1 system is not factored into the current marketplace. The applicant stated that the Gen 2 version is the product for which the applicant is seeking transitional device pass-through status. Response.

We appreciate the commenter's input and agree that the Pure-Vu® System meets the newness criterion because we received its device pass-through application on September 1, 2020, which is within 3 years of the June 21, 2018, the date of FDA PMA. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, Pure-Vu® is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically inserted temporarily. The applicant also claimed that Pure-Vu® meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service.

We invited public comments on whether Pure-Vu® meets the eligibility criteria at § 419.66(b). We did not receive any comments on whether Pure-Vu® meets the eligibility criteria at § 419.66(b)(3) or § 419.66(b)(4). We agree with the applicant that Pure-Vu® device meets the criteria of § 419.66(b).

The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. We stated in the CY 2022 OPPS/ASC proposed rule that we have not identified an existing pass-through payment category that describes Pure-Vu®.

We invited public comment on whether Pure-Vu® meets the device category criterion. We did not receive any comments on whether Pure-Vu® meets the eligibility criteria at § 419.66(c)(1). We continue to believe that Pure-Vu® device meets the criteria of § 419.66(c)(1) because we have not identified an existing pass-through payment category that describes Pure-Vu®.

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following. (i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization.

The applicant stated that Pure-Vu® represents a substantial clinical improvement over existing technologies. With respect to this criterion, the applicant submitted studies that examined the impact of Pure-Vu® on endoscopic hemostasis outcomes, rebleeding occurrence, and mortality. We note that the applicant has applied for and was denied the New Technology Add-on Payment in the FY 2022 IPPS/LTCH proposed rule (86 FR 25299 through 25304).

According to the applicant, the Pure-Vu® System offers the ability to achieve rapid beneficial resolution of the disease process treatment by achieving rapid and full visualization of the colon, which will improve diagnostic yield and the effectiveness of treatment of diseases of the bowel. The applicant claimed that Pure-Vu® is indicated for use in emergent issues such as acute lower gastrointestinal (GI) bleeding, unknown abdominal pain, foreign body removal, chronic disease management, and preventive medicine such as screening and surveillance. The applicant states these procedures are typically performed using a colonoscope to visualize the colon and provide a conduit to deliver therapeutic treatments.

According to the applicant, the current standard of care requires the colon to be cleansed to ensure the success of any procedure. The applicant asserts that in the case where pre-procedural preparations are not adequate to achieve proper visualization, current technology provides limited ability to remove debris from the colon during the procedure to facilitate the process. The applicant states that regardless of indication, the bowel preparation remains the constant across patients who may have a wide range of comorbidities which may limit patient tolerability.

According to the applicant the consumption of a purgative and the dietary restriction to be on clear liquids for approximately 24 hours can be problematic for the diabetic and elderly populations.[] In support of its application, the applicant submitted three outpatient clinical studies to demonstrate the Pure-Vu® System's capability to convert patients to adequate preparation where preparation was previously inadequate and the visualization was poor based on the Boston Bowel Preparation Scale (BBPS). In the first study, Perez J., et al. Conducted an outpatient prospective pilot study using the Pure-Vu® System.[] The study observed 50 patients with poorly prepared colons undergoing colonoscopy at two outpatient clinical sites in Spain and Israel, respectively.

The applicant claimed study patients underwent a reduced bowel preparation consisting of the following. No dried fruits, seeds, or nuts starting 2 days before the colonoscopy, a clear liquid diet starting 18 to 24 hours before colonoscopy, and a split dose of 20mg oral bisacodyl. The study found the number of patients with Start Printed Page 63609 an adequate cleansing level (BBPS≥2 in each colon segment) increased significantly from 31 percent (15/49) prior to use of the Pure-Vu System (baseline) to 98 percent (48/49) after use of the Pure-Vu® System ( P <.

0.001), with no serious adverse events reported. In the second study provided by the applicant, van Keulen, et al. Also conducted a single-arm, prospective study on 47 patients with a median age of 61 years in the outpatient setting in the Netherlands using the Pure-Vu® System.[] Within the study, cecal intubation was achieved in 46/47 patients.

This multicenter feasibility study found that the Pure-Vu® System significantly improved the proportion of patients with adequate bowel cleansing from 19.1 percent prior to the use of the Pure-Vu® System to 97.9 percent after its use ( P <. 0.001) and median BBPS score (from 3.0 [IQR 0.0-5.0] to 9.0 [IQR 8.0-9.0]). In the third study provided by the applicant that directly evaluated the Pure-Vu® System in a clinical setting, Bertiger G., et al.

Performed a United States-based single center, prospective, outpatient study investigating regimes of reduced outpatient bowel preparations, which included low doses of over-the-counter laxatives, and eliminating the typical 24 hour clear liquid diet restriction, which was replaced by a low residue diet the day before the procedure.[] In this study, 46 of a possible 49 patients received a colonoscopy, 8 of which took the over-the-counter laxative (“MiraLAX arm”), 21 patients ingested two doses of 7.5oz Magnesium Citrate (MgC) each taken with 19.5oz of clear liquid (“Mag Citrate 15oz arm”), and 18 patients ingested 2 doses of 5oz MgC taken with 16oz of clear liquid (“Mag Citrate 10oz arm”). Of the 46 subjects, 59 percent were males and there was a mean age of 61±9.48 years. The study found that each of the 3 study arms revealed significant differences in BBPS score between the baseline preparation and post-cleansing via Pure-Vu®.

All the preparation regimens resulted in inadequately prepped colons. Comparing the mean BBPS rating for both pre- and post- Pure-Vu® use, the MiraLAX arm was inferior ( P <. 0.05) to both Mag Citrate arms.

For the MiraLAX arm, the mean BBPS Score improved from 1.50 to 8.63. For the Mag Citrate 15oz arm, the mean BBPS score improved from 3.62 to 8.95. For the Mag Citrate 10oz arm, the mean BBPS Score improved from 4.76 to 9.0.

The applicant also provided a self-sponsored, U.S.-based, multicenter, prospective, single arm study in the inpatient setting, analyzing 94 patients, 65 of which (68 percent) had a GI bleed.[] Of the 94 patients (41 percent females/59 percent males), the mean age was 62 years. According to the applicant, the study's primary endpoint was the rate of improved bowel cleansing level from baseline to after use of the Pure-Vu® System per colon segment using the BBPS. The BBPS score was recorded for each colorectal segment (left colon, transverse colon, and right colon segments) both prior to (baseline) and after colon cleansing with the Pure-Vu® System.

An adequate cleansing level was a priori defined as a BBPS ≥2 in all evaluated colon segments. The study found that in 79 of the 94 patients (84 percent), the physician was able to successfully diagnose or rule out a GI bleed in the colon per the patients' colonoscopy indication using only the Pure-Vu® System. The analysis showed statistically significant visualization improvement in each colon segment after Pure-Vu® use with a mean BBPS score in the descending colon, sigmoid, and rectum of 1.74 pre-Pure-Vu® use and 2.89 post-Pure-Vu® use ( P <.

0.001). In the transverse colon of 1.74 pre-Pure-Vu® use and 2.91 post Pure-Vu® use ( P <. 0.001).

And the ascending colon and cecum of 1.50 pre-Pure-Vu® use and 2.86 post Pure-Vu® use ( P <. 0.001). The study found only 2 percent of cases where the diagnosis could not be achieved due to inadequate preparation.

Overall, the 84 (89.4 percent) patients that received the Pure-Vu® System within the study improved BBPS scores from 38 percent (95 percent CI 28, 49) to 96 percent (95 percent CI 90, 99) in segments evaluated. The study noted one procedure related perforation which required surgical repair, and the patient was discharged 48 hours post operatively and recovered fully. In addition to the previously discussed studies, the applicant also submitted two case studies to highlight the various clinical presentations of lower gastrointestinal bleed (LGIB) with the use of the Pure-Vu® System.

In the first case, the applicant described a patient with a history of scleroderma and chronic constipation who was referred for a surveillance colonoscopy after a prior endoscopic mucosal resection due to a large polyp. The applicant states this was the patient's third colonoscopy in twelve months due to a history of poor preparation in the prior exams. Despite an aggressive prep regime, the applicant states the patient still had solid stool and debris throughout the colon.

The applicant states the Pure-Vu® system was used extensively and the physician was able to fully cleanse the colon during which the physician was able to uncover a poorly defined over 1 cm sessile serrated polyp that could not be appreciated before cleansing with Pure-Vu®. The applicant states a successful polypectomy was performed. In the second case, the applicant described a patient presenting with hemorrhagic shock and acute kidney injury six days after a colonoscopy where nine polyps were removed, including two polyps greater than 2 cm.

The applicant states angiographic control of the bleeding was not considered because of the patient's acute kidney injury with a rising creatinine. According to the applicant, the physician elected to use Pure-Vu® to immediately exam the patient without any preparation doing a bedside colonoscopy in the ICU. The applicant states, the physician was able to cleanse the colon, locate the source of the bleed and create hemostasis by placing two clips on the bleed.

According to the applicant, the entire colon was visualized to confirm there were no other sources of bleeding, the physician was able to downgrade the patient out of the ICU that same day, and the patient was discharged from the hospital the following day. The applicant concludes that based on the provided evidence, Pure-Vu® has the ability to improve adenoma detection rates which can reduce the rate of colorectal cancer (CRC) and diagnose and treat emergent patients in a more expeditious fashion by removing the need to have successful pre-procedural preparation that can take time and be very burdensome to the most needy and fragile patients. According to the applicant, Pure-Vu® can minimize the number of aborted and early repeat colonoscopies that carry inherent risks and add unnecessary costs to the healthcare system.

Based on the evidence submitted with the application, we explained in the CY 2022 OPPS/ASC proposed rule that we have the following observations. While Start Printed Page 63610 the studies provided in support of the Pure-Vu® System measure improvement of bowel preparation using the BBPS, the applicant did not provide data indicating that the improved BBPS directly leads to improved clinical outcomes (for example, reduction of blood loss in LGIB or reduction of missed polyps) based on use of the Pure-Vu® System. Additionally, we noted that the applicant has not provided any studies comparing the efficacy of the Pure-Vu® System to other existing methods or products for irrigation in support of its claims that the product is superior at removing debris from the colon while simultaneously preventing the colon from collapsing, allowing use of the working channel, or improving outcomes.

Furthermore, we noted that many of the provided studies were based on small sample sizes, which may affect the quality and reliability of the data provided in support of the technology. In addition, we noted in the CY 2022 OPPS/ASC proposed rule that it is unclear whether this device would have less utility in the outpatient setting as compared to the inpatient setting, given that patients will typically have time to adequately prepare for scheduled outpatient procedures. We further noted that this device may not be broadly applicable in the outpatient setting and are solicited comment on situations in which this device would have a substantial clinical benefit for patients or subpopulations of patients.

For instance, in the outpatient setting, we explained that we are not certain that it would be appropriate to use this device in the case of a patient with a poorly prepared bowel as opposed to simply rescheduling the appointment. Lastly, we noted that the Helmut et al. Study noted one procedure-related perforation which required surgical repair and we invited public comments regarding the concern of procedure-related perforation.[] Based upon the evidence presented, we invited public comments on whether the Pure-Vu® meets the substantial clinical improvement criterion.

Comment. One commenter stated that Pure-Vu® is a unique device with the ability to potentially change a patient's course of care due to its ability to create high-quality colonoscopies in patients that are unable to fully prep for an exam. The commenter stated that they want to make sure that patients who suffer from functional GI and motility disorders which affect the lower GI tract can get the surveillance and care that they need and Pure-Vu® can directly impact this.

The commenter asserted there is a direct correlation between being able to provide a high-quality colonoscopy where the more the colon mucosa can be observed and the ability to better diagnose patients. Response. We appreciate the information provided by the commenter and have taken this into consideration in making our final determination, discussed below.

Comment. In support of the substantial clinical improvement criterion, the applicant submitted a comment. The applicant responded to CMS' concerns in the proposed rule related to the Boston Bowel Preparation Score (BBPS) and stated that this is a measure of the amount of the colon mucosa that can be visualized and is independent of a particular technology or method used to clear fecal matter or debris.

The applicant asserted that if significant areas of the colon tissue cannot be visualized due to retained debris, the endoscopist will miss any pathology covered. The applicant stated that this is especially critical as sessile serrated adenomas are pre-cancerous flat lesions that do not protrude from the colon wall making them impossible to detect in the presence of debris. According to the applicant, multiple publications validating the BBPS as a reliable measurement to predict adenoma and/or polyps have been published, for example.

The polyp detection percentage in inadequate (BBPS 0, 1) and adequate (BBPS 2, 3) colon prep were 6 percent and 27 percent (p <. 0.0001), respectively and,[] the polyp detection rate was 40 percent for patients with a BBPS score >5 compared to 24 percent for patients with a BBPS score of <5 (p <. 0.02) with an increased percentage of recommendation for repeat procedures in the later group.[] The applicant further described the Aronchick scale and the Ottawa score which are other validated methods available to assess colon visualization.[] According to the applicant, these cited studies were based on current standard of care for performing colonoscopy.

The applicant stated that despite use of the current standard of irrigation and suction through the working channel of a colonoscope, these patients continued to have inadequate bowel preparation over 7 percent. The applicant asserted that to the extent there is a reduction in the number of patients that have an inadequate/poor preparation, as noted by a low BBPS score, the endoscopist will improve the overall adenoma detection rate. According to the applicant, there is a clear relationship between adenoma detection rates to the risk of receiving a diagnosis of an interval cancer as evidenced in an evaluation of 314,872 patients.[] Citing the article, the applicant states that, “The risk of interval cancer decreased approximately linearly with increasing adenoma detection rates, without evidence of a threshold effect within the observed range of rates.

With adenoma detection rate modeled as a continuous variable, each 1.0 percent increase in the rate predicted a 3.0 percent decrease in the risk of interval cancer (hazard ration, 0.97;95 percent CI, 0.96 to 0.98).” [] According to the applicant, this study shows the clinical benefit to the patient population with low adenoma detection rates due to inadequate preparation, especially in high risk colorectal cancer patients who present with GI bleeding or a positive screening test, may be significant. The applicant next responded to CMS' concerns about the sample sizes from the studies used in support of Pure-Vu®. In response, the applicant performed a meta-analysis of the four studies which were performed at different centers with different investigators to minimize the bias of any physician or institution.

According to the applicant, for outpatient studies, the overall rate of adequate colonoscopy preparation was 99.4 percent compared to 25.3 percent for baseline. And the overall difference was 74.1 percent (95 percent CI = 60.3 percent, 87.8 percent. P <.

0.0001). The inpatient study had a lower overall success rate in the Pure-Vu® System (86.2 percent) but the impact of the Pure-Vu® was still dramatic with the overall rate of adequate colonoscopy preparation of 95.0 percent compared to 28.2 percent Start Printed Page 63611 for baseline. And the overall difference was 66.8 percent (95 percent CI = 55.5 percent, 78.0 percent.

P <. 0.0001). Next the applicant responded to CMS' concern that the benefit of Pure-Vu® in the outpatient setting may be limited because patients have more time to prepare for the colonoscopy.

According to the applicant, there are many patients that the physician may pre-procedurally deem ready for the examination but upon insertion of the colonoscope the patient is found to be inadequately prepared to receive a quality examination. The applicant stated that, rather than terminate the procedure at this point, an endoscopist can remove the colonoscope and load the Pure-Vu® and complete the examination. The applicant added that in the studies used in the meta-analysis, Pure-Vu® was able to convert inadequate preparation to adequate even in patients with a BBPS of 0 in one or more segments of the colon while the patient was on the table and under sedation, thereby avoiding another procedure.

The applicant asserted that in addition to the risks associated with a repeat procedure, approximately 54 percent of patients do not come back for the repeat examination which places these patients at a higher risk for CRC.[] The applicant added that since history of inadequate preparation is one of the main indicators of poor preparation along with advanced age, those with motility issues, patients allergic to the PEG (key ingredient in the purgatives) and those with comorbidities there is no guarantee the follow-up colonoscopy will be successful. Next the applicant addressed CMS' concern that there was no data to support that Pure-Vu® minimizes the colon collapsing during suctioning of debris while allowing use of the working channel of the scope. The applicant asserted that the provision of a pulsed mixture of air and fluid to break up and facilitate removal of adherent films of fecal matter from the mucosal lining of the colon, at a much higher energy level than irrigation through a scope, allows the endoscopist to simultaneously suction the debris, which is not possible through a scope with only one working channel.

The applicant stated, the simultaneous action of pumping water and air into the colon while suctioning out debris inherently reduces the likelihood that the colon will collapse. Lastly, in response to CMS' concern related to one procedure-related perforation, the applicant stated that this study focused on the inpatient population which is known to be at higher risk for perforation than the outpatient population.[] The applicant stated that this patient was discharged 48 hours post operatively and fully recovered with no additional clinical sequelae. The applicant asserted that inpatient cases undergoing colonoscopy are a high risk for perforation with a rate of approximately 1 in 500, which is more than two times higher than the outpatient population.[] The applicant stated that since the Helmut paper they have developed the Gen 2 Pure-Vu® and have received no adverse reports in the last 18 months even with increased utilization across multiple institutions.

Response. We appreciate the comment in support of the clinical benefits of the Pure-Vu® system. As we stated in the FY 2022 IPPS/LTCH final rule (86 FR 45056), we continue to have concerns regarding the substantial clinical improvement criterion.

In response to commenters' assertion that there is a direct correlation to being able to provide high-quality colonoscopy where the more the colon mucosa can be observed and the ability to better diagnose patients, we agree but are aware that correlation is not causation. While these data are correlated, without data testing this relationship (for example, the Pure-Vu® system and patient outcomes such as adenoma detection rates), we cannot be certain this relationship is true and not spurious or mediated by other factors. We note the further input provided by the applicant concerning the validity of the BBPS and agree that this is likely a well validated scoring tool.

However, we remain concerned that the studies provided in support of the Pure-Vu® System measure improvement of bowel preparation using the BBPS but do not provide data indicating that the improved BBPS directly leads to improved clinical outcomes. In addition, the studies did not demonstrate outcomes in the emergent situations the Pure-Vu® System is intended to address. While an additional study provided by the applicant in their comment indicated a general link between improved BBPS and advanced adenoma detection rates, we note that the study occurred in patients undergoing screening colonoscopy, and did not include the use of the Pure-Vu® system.

We also remain concerned about the lack of studies comparing the Pure-Vu® System to other existing methods or products for irrigation in support of its claims that the product is superior at removing debris from the colon while simultaneously preventing the colon from collapsing, allowing use of the working channel, or improving outcomes. After consideration of the public comments we received and our review of the device pass-through application, we are not approving the Pure-Vu® system for transitional pass-through payment status in CY 2022 because the product does not meet the substantial clinical improvement criterion. Because we have determined that the Pure-Vu® system does not meet the substantial clinical improvement criterion, we are not evaluating whether the device meets the cost criterion.

(6) XenoscopeTM Xenocor Inc. Submitted an application for a new device category for transitional pass-through payment status for the Articulating Xenoscope Laparoscope (hereinafter referred to as the XenoscopeTM) by the March 2021 quarterly deadline for CY 2022. The applicant described the XenoscopeTM as a disposable laparoscope which consists of a high-definition camera chip on the tip of a composite shaft, paired with led lights with a handle comprised of a clamshell design and made with molded plastic.

The applicant stated that the XenoscopeTM provides visualization in the abdominal and thoracic cavities through small, minimally invasive incisions for diagnostic and therapeutic laparoscopic procedures in a similar fashion to established, reusable versions of laparoscopes. It is paired with an image processing unit, the Xenobox, that can plug into any HD monitor to display anatomy in the abdomen, pelvis or chest. The Xenobox uses pre-installed firmware that is upgradable.

The applicant claimed that the XenoscopeTM is the first disposable laparoscope. The applicant also claimed that the use of the XenoscopeTM reduces the number of cords in the operating room, eliminates intraoperative fogging and associated image compromise and eliminates up-front capital expenditures associated with reusable laparoscopes. With respect to the newness criterion, the XenoscopeTM received FDA 510(k) clearance on January 27, 2020, based on Start Printed Page 63612 a determination of substantial equivalence to a legally marketed predicate device.

The XenoscopeTM is indicated for use in diagnostic and therapeutic procedures for endoscopy and endoscopic surgery within the thoracic and peritoneal cavities including the female reproductive organs. We received the application for a new device category for transitional pass-through payment status for the XenoscopeTM on August 6, 2020, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comments in the CY 2022 OPPS/ASC proposed rule on whether the XenoscopeTM meets the newness criterion.

We did not receive any comments with respect to the newness criterion. We agree with the applicant that the XenoscopeTM meets the newness criterion because we received its device pass-through application on August 6, 2020, which is within 3 years of January 27, 2020, the date of FDA 510(k) clearance. With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the use of the XenoscopeTM is integral to the service, is used for one patient only, comes in contact with human skin, and is surgically implanted or inserted into the patient.

Specifically, the applicant explained that the XenoscopeTM is plugged into the Xenobox image processing unit (which is connected to an HD monitor and an A/C power source). A surgeon then makes a small incision and a trocar (tube-like device with a seal to maintain abdominal pressure) is inserted to gain access to the body cavity. The XenoscopeTM is then inserted through the trocar in order to provide a full view of the anatomy for diagnostic and therapeutic procedures.

The applicant also claimed the XenoscopeTM meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. We invited public comments on whether the XenoscopeTM meets the eligibility criteria at § 419.66(b). We did not receive any comments in regard to the eligibility criteria at § 419.66(b).

We agree with the applicant and believe that the XenoscopeTM meets the eligibility criterion at § 419.66(b)(3) and (4). The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996.

The applicant described the XenoscopeTM as disposable laparoscope. The applicant reported that it does not believe that the XenoscopeTM is described by an existing category and requested category descriptor “Single-use laparoscopes.” The applicant also stated that the currently existing category, C1748—Endoscope, single-use (that is, disposable), upper gi, imaging/illumination device (insertable), did not describe this device because it is limited to single-use duodenoscopes inserted orally, to reach the small intestine versus minimally invasive abdominal surgery (laparoscopy). We stated in the CY 2022 OPPS/ASC proposed rule that we have not identified an existing pass-through payment category that is applicable to the XenoscopeTM.

We invited public comment on whether the XenoscopeTM meets the device category criterion. We did not receive any comments in regard to the eligibility criteria at § 419.66(c). We continue to believe that the XenoscopeTM meets the eligibility criterion at § 419.66(c)(1) because we have not identified an existing pass-through payment category that is applicable to the XenoscopeTM.

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following. (i) That a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. Or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization.

With respect to the substantial clinical improvement criterion, the applicant stated that the XenoscopeTM provides a substantial clinical improvement over reusable laparoscopes because of its single-use nature. Specifically, the applicant claimed that because the XenoscopeTM is a disposable, single-use device, the XenoscopeTM provides for less risk of scope-related cross-contamination and from improperly handled or reprocessed scopes compared to traditional laparoscopy. The applicant also claimed that the XenoscopeTM includes a fog-free scope and provides a substantial clinical improvement over currently available laparoscopes which, according to the applicant, fog often, and can put patients at risk for surgical errors and more time under anesthesia.

Additionally, the applicant claimed that the XenoscopeTM reaches 104 degrees Fahrenheit at the tip, eliminating risk of patient burns and drape fires associated with hotter Xenon bulbs used in currently available laparoscopes. Lastly, that applicant stated that there can be significant economic benefits through the use of the XenoscopeTM due to the processing costs and up-front capital expenditures required for reusable laparoscopes. In support of the assertion that the XenoscopeTM reduces the risk of cross-contamination from improperly cleaned reusable laparoscopic instruments, the applicant referenced two articles.

The first article was published in 2002 and describes the problem of surgical site (SSI), the Centers for Disease Control (CDC) guidelines for SSI, and some cases of SSI related to improper cleaning of reusable laparoscopic instruments. The article also discusses practices to avoid these s.[] The applicant also submitted a draft of a manuscript titled “Novel Laparoscopic System for Quality Improvement and Increased Efficiency” that summarizes some of the evidence that laparoscopy, in general, is superior to open surgical approaches in terms of pain management and risk.[] In support of the claim that the XenoscopeTM eliminates the risk of patient burns and drape fires associated with Xenon bulbs used by currently available laparoscopes, the applicant submitted two articles. The first was an article published in 2011 that discusses the problem of laparoscopic related burn injuries and a potential solution using Active Electrode Monitoring (AEM).[] AEM instruments reportedly use a “shielded and monitored” design to prevent the risk of stray energy burn injury from insulation failure and capacitive coupling.

According to the article, the AEM technology is currently Start Printed Page 63613 licensed by Intuitive Surgical's da Vinci® Surgical Systems. The applicant does not compare the XenoscopeTM to AEM technology in terms of burn injury reduction. The second article examined the variation and extent of thermal injuries that could be induced by laparoscopic light sources to porcine tissue.

In the study, the maximum temperature at the tip of the optical cable varied between 119.5 degrees C and 268.6 degrees C. When surgical drapes were exposed to the tip of the light source, the time to char was 3-6 seconds. The degree and volume of injury increased with longer exposure times, and significant injury was recorded with the optical cable 3 mm from the skin.[] In support of the claim that there could be significant economic benefits realized through the use the XenoscopeTM compared to reusable laparoscopes, the applicant also referenced the manuscript entitled “Novel Laparoscopic System for Quality Improvement and Increased Efficiency”.[] In this study, a three-page survey was created to collect data regarding laparoscope-related practices and costs.

The survey was completed by three different institutions, including an ambulatory surgery center (ASC), a rural hospital and a suburban hospital. The sites provided the capital equipment cost required at the time of purchase at their facility which ranged from $837,184 to $2,786,348. The average cost per use for one surgical procedure involving a reusable laparoscope was $1,019.24 across the three institutions.

We stated in the CY 2022 OPPS/ASC proposed rule that we are concerned that the application and the articles submitted as evidence of substantial clinical improvement discuss potential adverse effects from laparoscopic procedures, but do not appear to directly show any clinical improvement that result from the use of the XenoscopeTM. The applicant has provided evidence which seems to rely on indirect inferences from other sources of data. The articles provided did not involve the clinical use of the XenoscopeTM and did not compare the device to an appropriate comparator, such as a reusable laparoscope.

Therefore, we stated that it is difficult to determine whether the XenoscopeTM offers substantial clinical improvement over standard, reusable laparoscopes based on the information provided. In order to demonstrate substantial clinical improvement over currently available treatments, we consider supporting evidence, preferably published peer-reviewed clinical trials, that shows improved clinical outcomes, such as reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process compared to the standard of care. We invited public comment on whether the XenoscopeTM meets the substantial clinical improvement criterion.

Comment. One commenter stated their opposition to the use of HCPCS code 58570 (Tlh uterus 250 g or less) in conjunction with the XenoscopeTM. The commenter stated that multiple searches in PubMed did not produce evidence of use or clinical improvement for gynecologic laparoscopic procedures, including HCPCS code 58570 (Tlh uterus 250 g or less).

The commenter asserted that Obstetrician-gynecologists and gynecologic oncologists are the primary billers of 58570 and employ laparoscopy for many other surgeries such as tubal ligation and hysterectomy, positioning them as potential high-utilizers of new devices such as the XenoscopeTM. The commenter stated their concern for the unintended consequences of promoting the payment of a device for which a substantial clinical improvement in gynecologic surgery is undetermined.[] Response. We appreciate the input from the commenter and we have noted the lack of data demonstrating evidence of use or clinical improvement for gynecologic laparoscopic procedures.

We refer the commenter to our final response and determination regarding the substantial clinical improvement criterion below for a discussion of this concern. However, we note that the indication for use as stated by the FDA in the 510(k) clearance letter is, “The Articulating XenoscopeTM is intended to be used in diagnostic and therapeutic procedures for endoscopy and endoscopic surgery within the thoracic and peritoneal cavities including the female reproductive organs.” Given the role of the FDA in defining device indications, we believe the device is appropriately described by HCPCS 58570. Comment.

A commenter representing Xenocor, Inc. Stated that the safety profile for patients could be improved in the following ways. (1) Cross-contamination for the XenoscopeTM is not possible.

(2) the XenoscopeTM has a top temperature of 129 degrees Fahrenheit where one of the most frequent causes of operating room fires and burns are traditional, reusable laparoscopes which often exceed 350 degrees Fahrenheit. (3) the XenoscopeTM 's composite shaft is non-conductive which avoids risks with traditional laparoscopes which can arc stray current when using monopolar electrocautery where the scope acts as an antenna and burns adjacent structures. And (4) the XenoscopeTM eliminates fog and sees better through smoke and steam than any currently marketed resuables.

We also received multiple comments stating general support for the XenoscopeTM. Two of the commenters stated that the XenoscopeTM reaches a temperature of 129 °F, as opposed to the 350 °F reached by light cords which can cause burns or patient injury, is fully shielded and will not cause stray energy burns or arcing issues that exist with other like products, its single-use nature ensures complete sterility and consistent image quality due to the new out of the box feature with each use, and the fog-free picture helps to ensure a consistent clear visualization of critical anatomy. One commenter stated the benefits of the XenoscopeTM are critical to both patient safety and cost control.

Another commenter stated that having a disposable scope would enable surgery to be done more easily in a wider variety of places while also eliminating many problems associated with traditional scopes. Another commenter added that the ability to use XenoscopeTM with any USB enabled video device obviates the need for expensive auxiliary light sources, video drivers, etc. Response.

We thank the commenters for their input. We agree that improved patient safety and a reduction in complications are clinical outcomes that may represent a substantial clinical improvement. However, we remain concerned that we did not receive any data to demonstrate improved outcomes using the XenoscopeTM.

Further, we remain concerned that the applicant did not provide any comparison to existing technologies such as reusable scopes to demonstrate an improvement in clinical outcomes. Lastly, we note that the cost effectiveness of a technology does not substantially improve the diagnosis or treatment of a disease and therefore is not relevant to the discussion of substantial clinical improvement. Start Printed Page 63614 After consideration of the public comments we received and our review of the device pass-through application, we are not approving the XenoscopeTM for transitional pass-through payment status in CY 2022 because the product does not meet the substantial clinical improvement criterion.

Because we have determined that the XenoscopeTM does not meet the substantial clinical improvement criterion, we are not evaluating whether the device meets the cost criterion. B. Device-Intensive Procedures 1.

Background Under the OPPS, prior to CY 2017, device-intensive status for procedures was determined at the APC level for APCs with a device offset percentage greater than 40 percent (79 FR 66795). Beginning in CY 2017, CMS began determining device-intensive status at the HCPCS code level. In assigning device-intensive status to an APC prior to CY 2017, the device costs of all the procedures within the APC were calculated and the geometric mean device offset of all of the procedures had to exceed 40 percent.

Almost all of the procedures assigned to device-intensive APCs utilized devices, and the device costs for the associated HCPCS codes exceeded the 40-percent threshold. The no cost/full credit and partial credit device policy (79 FR 66872 through 66873) applies to device-intensive APCs and is discussed in detail in section IV.B. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42112 through 42114).

A related device policy was the requirement that certain procedures assigned to device-intensive APCs require the reporting of a device code on the claim (80 FR 70422) and is discussed in detail in section IV.B.3 of the CY 2022 OPPS/ASC proposed rule (86 FR 42114). For further background information on the device-intensive APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70421 through 70426). A.

HCPCS Code-Level Device-Intensive Determination As stated earlier, prior to CY 2017, under the device-intensive methodology we assigned device-intensive status to all procedures requiring the implantation of a device that were assigned to an APC with a device offset greater than 40 percent and, beginning in CY 2015, that met the three criteria listed below. Historically, the device-intensive designation was at the APC level and applied to the applicable procedures within that APC. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658), we changed our methodology to assign device-intensive status at the individual HCPCS code level rather than at the APC level.

Under this policy, a procedure could be assigned device-intensive status regardless of its APC assignment, and device-intensive APC designations were no longer applied under the OPPS or the ASC payment system. We believe that a HCPCS code-level device offset is, in most cases, a better representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all of the procedures assigned to an APC. Unlike a device offset calculated at the APC level, which is a weighted average offset for all devices used in all of the procedures assigned to an APC, a HCPCS code-level device offset is calculated using only claims for a single HCPCS code.

We believe that this methodological change results in a more accurate representation of the cost attributable to implantation of a high-cost device, which ensures consistent device-intensive designation of procedures with a significant device cost. Further, we believe a HCPCS code-level device offset removes inappropriate device-intensive status for procedures without a significant device cost that are granted such status because of their APC assignment. Under our existing policy, procedures that meet the criteria listed in section IV.B.1.b.

Of the CY 2022 OPPS/ASC proposed rule (86 FR 42112 through 42114) are identified as device-intensive procedures and are subject to all the policies applicable to procedures assigned device-intensive status under our established methodology, including our policies on device edits and no cost/full credit and partial credit devices discussed in sections IV.B.3. And IV.B.4. Of the CY 2022 OPPS/ASC proposed rule, respectively (86 FR 42114 thorough 42115).

B. Use of the Three Criteria To Designate Device-Intensive Procedures We clarified our established policy in the CY 2018 OPPS/ASC final rule with comment period (82 FR 52474), where we explained that device-intensive procedures require the implantation of a device and additionally are subject to the following criteria. All procedures must involve implantable devices that would be reported if device insertion procedures were performed.

The required devices must be surgically inserted or implanted devices that remain in the patient's body after the conclusion of the procedure (at least temporarily). And The device offset amount must be significant, which is defined as exceeding 40 percent of the procedure's mean cost. We changed our policy to apply these three criteria to determine whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66926), where we stated that we would apply the no cost/full credit and partial credit device policy—which includes the three criteria listed previously—to all device-intensive procedures beginning in CY 2015.

We reiterated this position in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), where we explained that we were finalizing our proposal to continue using the three criteria established in the CY 2007 OPPS/ASC final rule with comment period for determining the APCs to which the CY 2016 device intensive policy will apply. Under the policies we adopted in CYs 2015, 2016, and 2017, all procedures that require the implantation of a device and meet the previously described criteria are assigned device-intensive status, regardless of their APC placement. 2.

Device-Intensive Procedure Policy for CY 2019 and Subsequent Years As part of our effort to better capture costs for procedures with significant device costs, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58944 through 58948), for CY 2019, we modified our criteria for device-intensive procedures. We had heard from stakeholders that the criteria excluded some procedures that stakeholders believed should qualify as device-intensive procedures. Specifically, we were persuaded by stakeholder arguments that procedures requiring expensive surgically inserted or implanted devices that are not capital equipment should qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure.

We agreed that a broader definition of -device-intensive procedures was warranted, and made two modifications to the criteria for CY 2019 (83 FR 58948). First, we allowed procedures that involve surgically inserted or implanted single-use devices that meet the device offset percentage threshold to qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure. We established this policy because we no longer believe that whether a device remains in the patient's body should Start Printed Page 63615 affect a procedure's designation as a device-intensive procedure, as such devices could, nonetheless, comprise a large portion of the cost of the applicable procedure.

Second, we modified our criteria to lower the device offset percentage threshold from 40 percent to 30 percent, to allow a greater number of procedures to qualify as device-intensive. We stated that we believe allowing these additional procedures to qualify for -device-intensive status will help ensure these procedures receive more appropriate payment in the ASC setting, which will help encourage the provision of these services in the ASC setting. In addition, we stated that this change would help to ensure that more procedures containing relatively high-cost devices are subject to the device edits, which leads to more correctly coded claims and greater accuracy in our claims data.

Specifically, for CY 2019 and subsequent years, we finalized that—device-intensive procedures will be subject to the following criteria. All procedures must involve implantable devices assigned a CPT or HCPCS code. The required devices (including single-use devices) must be surgically inserted or implanted.

And The device offset amount must be significant, which is defined as exceeding 30 percent of the procedure's mean cost (83 FR 58945). In addition, to further align the device-intensive policy with the criteria used for device pass-through payment status, we finalized, for CY 2019 and subsequent years, that for purposes of satisfying the device-intensive criteria, a device-intensive procedure must involve a device that. Has received FDA marketing authorization, has received an FDA investigational device exemption (IDE), and has been classified as a Category B device by FDA in accordance with §§ 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review.

Is an integral part of the service furnished. Is used for one patient only. Comes in contact with human tissue.

Is surgically implanted or inserted (either permanently or temporarily). And Is not either of the following. (a) Equipment, an instrument, apparatus, implement, or item of the type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub.

15-1). Or (b) A material or supply furnished incident to a service (for example, a suture, customized surgical kit, scalpel, or clip, other than a radiological site marker) (83 FR 58945). In addition, for new HCPCS codes describing procedures requiring the implantation of devices that do not yet have associated claims data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658), we finalized a policy for CY 2017 to apply device-intensive status with a default device offset set at 41 percent for new HCPCS codes describing procedures requiring the implantation or insertion of a device that did not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures.

This default device offset amount of 41 percent was not calculated from claims data. Instead, it was applied as a default until claims data were available upon which to calculate an actual device offset for the new code. The purpose of applying the 41-percent default device offset to new codes that describe procedures that implant or insert devices was to ensure ASC access for new procedures until claims data become available.

As discussed in the CY 2019 OPPS/ASC proposed rule and final rule with comment period (83 FR 37108 through 37109 and 58945 through 58946, respectively), in accordance with our policy stated previously to lower the device offset percentage threshold for procedures to qualify as device-intensive from greater than 40 percent to greater than 30 percent, for CY 2019 and subsequent years, we modified this policy to apply a 31-percent default device offset to new HCPCS codes describing procedures requiring the implantation of a device that do not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. In conjunction with the policy to lower the default device offset from 41 percent to 31 percent, we continued our current policy of, in certain rare instances (for example, in the case of a very expensive implantable device), temporarily assigning a higher offset percentage if warranted by additional information such as pricing data from a device manufacturer (81 FR 79658). Once claims data are available for a new procedure requiring the implantation or insertion of a device, device-intensive status is applied to the code if the HCPCS code-level device offset is greater than 30 percent, according to our policy of determining—device-intensive status by calculating the HCPCS code-level device offset.

In addition, in the CY 2019 OPPS/ASC final rule with comment period, we clarified that since the adoption of our policy in effect as of CY 2018, the associated claims data used for purposes of determining whether or not to apply the default device offset are the associated claims data for either the new HCPCS code or any predecessor code, as described by CPT coding guidance, for the new HCPCS code. Additionally, for CY 2019 and subsequent years, in limited instances where a new HCPCS code does not have a predecessor code as defined by CPT, but describes a procedure that was previously described by an existing code, we use clinical discretion to identify HCPCS codes that are clinically related or similar to the new HCPCS code but are not officially recognized as a predecessor code by CPT, and to use the claims data of the clinically related or similar code(s) for purposes of determining whether or not to apply the default device offset to the new HCPCS code (83 FR 58946). Clinically related and similar procedures for purposes of this policy are procedures that have little or no clinical differences and use the same devices as the new HCPCS code.

In addition, clinically related and similar codes for purposes of this policy are codes that either currently or previously describe the procedure described by the new HCPCS code. Under this policy, claims data from clinically related and similar codes are included as associated claims data for a new code, and where an existing HCPCS code is found to be clinically related or similar to a new HCPCS code, we apply the device offset percentage derived from the existing clinically related or similar HCPCS code's claims data to the new HCPCS code for determining the device offset percentage. We stated that we believe that claims data for HCPCS codes describing procedures that have minor differences from the procedures described by new HCPCS codes will provide an accurate depiction of the cost relationship between the procedure and the device(s) that are used, and will be appropriate to use to set a new code's device offset percentage, in the same way that predecessor codes are used.

If a new HCPCS code has multiple predecessor codes, the claims data for the predecessor code that has the highest individual HCPCS-level device offset percentage is used to determine whether the new HCPCS code qualifies for device-intensive status. Similarly, in the event that a new HCPCS code does Start Printed Page 63616 not have a predecessor code but has multiple clinically related or similar codes, the claims data for the clinically related or similar code that has the highest individual HCPCS level device offset percentage is used to determine whether the new HCPCS code qualifies for device-intensive status. As we indicated in the CY 2019 OPPS/ASC proposed rule and final rule with comment period, additional information for our consideration of an offset percentage higher than the default of 31 percent for new HCPCS codes describing procedures requiring the implantation (or, in some cases, the insertion) of a device that do not yet have associated claims data, such as pricing data or invoices from a device manufacturer, should be directed to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare &.

Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850, or electronically at outpatientpps@cms.hhs.gov. Additional information can be submitted prior to issuance of an OPPS/ASC proposed rule or as a public comment in response to an issued OPPS/ASC proposed rule. Device offset percentages will be set in each year's final rule.

As discussed in section X.E of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190), given our concerns regarding CY 2020 data as a result of the erectile dysfunction treatment-PHE, we proposed to use CY 2019 claims data to establish CY 2022 prospective rates. While we continue to believe CY 2019 represents the best full year of claims data for ratesetting, we believe our policy of temporarily assigning a higher offset percentage if warranted by additional information would provide a more accurate device offset percentage for certain procedures. Specifically, for procedures that were assigned device-intensive status, but were assigned a default device offset percentage of 31 percent or a device offset percentage based on claims from a clinically-similar code in the absence of CY 2019 claims data, we proposed to assign a device offset percentage for such procedures based on CY 2020 data if CY 2020 claims information is available.

While we believe that CY 2019 claims data is a better basis for CY 2022 OPPS rates overall, because we have specifically noted that we would consider using more recent data than the data available for ratesetting in a given year to determine device offset percentages for services that do not have any claims data in the year used for ratesetting, we believe it would be consistent with this policy for us to use CY 2020 claims data to determine the device offset percentage for services that meet the above criteria. For CY 2022, our proposal would assign device offset percentages using CY 2020 claims data to the following 11 procedures. 0266T (Implantation or replacement of carotid sinus baroreflex activation device.

Total system (includes generator placement, unilateral or bilateral lead placement, intra-operative interrogation, programming, and repositioning, when performed)). 0414T (Removal and replacement of permanent cardiac contractility modulation system pulse generator only). 0511T (Removal and reinsertion of sinus tarsi implant).

0587T (Percutaneous implantation or replacement of integrated single device neurostimulation system including electrode array and receiver or pulse generator, including analysis, programming, and imaging guidance when performed, posterior tibial nerve). 0600T (Ablation, irreversible electroporation. 1 or more tumors per organ, including imaging guidance, when performed, percutaneous).

0614T (Removal and replacement of substernal implantable defibrillator pulse generator). 66987 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (for example, iris ansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage. With endoscopic cyclophotocoagulation).

66988 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification). With endoscopic cyclophotocoagulation). C9757 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and excision of herniated intervertebral disc, and repair of annular defect with implantation of bone anchored annular closure device, including annular defect measurement, alignment and sizing assessment, and image guidance.

1 interspace, lumbar). C9765 (Revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal. With intravascular lithotripsy, and transluminal stent placement(s), includes angioplasty within the same vessel(s), when performed).

And C9767 (Revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal. With intravascular lithotripsy and transluminal stent placement(s), and atherectomy, includes angioplasty within the same vessel(s), when performed). Comment.

Many commenters supported our proposal to establish the CY 2022 device offset percentage using CY 2020 claims data for device-intensive procedures with no claims in the CY 2019 claims data. One commenter requested that we use CY 2020 claims where CY 2020 claims volume is greater than CY 2019 claims volume. Another commenter requested that we apply the greater of the device offset percentage when comparing CY 2019 claims with CY 2020 claims.

Response. We thank the commenters for their support. We are not accepting the recommendation to apply data from CY 2020 claims where CY 2020 claims volume is greater than CY 2019 claims volume or to apply the greater of the device offset percentage when comparing CY 2019 claims with CY 2020 claims.

Specifically, as discussed in section X.E of this final rule with comment period, we continue to believe CY 2019 represents the best full year of claims data for ratesetting. Therefore, we believe our proposal provides a more accurate device offset percentage only for certain device-intensive procedures that had no claims data in CY 2019 and for which the device offset percentage would otherwise be based on the default percentage or a similar procedure code's device offset percentage. Comment.

Many commenters requested that we set the device offset percentage for several new procedures using the predecessor code's device offset percentage based on CY 2019 claims data. These procedures include. • The predecessor CPT code 0191T in assigning the device offset percentage for CPT code 66989 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (for example, iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage.

With insertion of intraocular (for example, trabecular Start Printed Page 63617 meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more). The predecessor CPT code 0191T in assigning the device offset percentage for CPT code 66991 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique (for example, irrigation and aspiration or phacoemulsification). With insertion of intraocular (for example, trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more).

The predecessor CPT code 0191T in assigning the device offset percentage for CPT code 0671T (Insertion of anterior segment aqueous drainage device into the trabecular meshwork, without external reservoir, and without concomitant cataract removal, one or more). The predecessor CPT code 0548T in assigning the device offset percentage for CPT code 53451 (Periurethral transperineal adjustable balloon continence device. Bilateral insertion, including cystourethroscopy and imaging guidance).

The predecessor CPT code 0549T in assigning the device offset percentage for CPT code 53452 (Periurethral transperineal adjustable balloon continence device. Unilateral insertion, including cystourethroscopy and imaging guidance). And The predecessor HCPCS code C9752 in assigning the device offset percentage for CPT code 64628 (Thermal destruction of intraosseous basivertebral nerve, including all imaging guidance.

First 2 vertebral bodies, lumbar or sacral). Additionally, at the August 23, 2021 HOP Panel Meeting, a presenter requested that we use the predecessor CPT code 64568 in assigning the device offset percentage for CPT code 64582 (Open implantation of hypoglossal nerve neurostimulator array, pulse generator, and distal respiratory sensor electrode or electrode array). Based on the information presented at the meeting, the HOP Panel recommended we use CPT code 64568 to assign the device offset percentage for CPT code 64582.

Response. We agree with the commenters and the HOP Panel's recommendation. We note that we inadvertently did not apply the device offset percentage to several new HCPCS codes where claims data for a predecessor code was available.

Therefore, we are revising the device offset percentage for these procedures for this final rule with comment period using CY 2019 claims data from these procedures' predecessor codes. Comment. A number of commenters recommended we assign device-intensive status to CPT codes 0627T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar.

First level) and 0630T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with ct guidance, lumbar. Each additional level (list separately in addition to code for primary procedure)). Response.

We appreciate the commenters' recommendation. As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42113), we finalized, for CY 2019 and subsequent years, that for purposes of satisfying the device-intensive criteria, a device-intensive procedure must involve a device that “has received FDA marketing authorization, has received an FDA investigational device exemption (IDE), and has been classified as a Category B device by FDA in accordance with §§ 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review.” The products involved when reporting CPT code 0627T and 0630T that the commenter believed should necessitate a device intensive designation do not meet this requirement. Therefore, we are not accepting the commenters' recommendations and are not granting device-intensive status to these codes.

Comment. One commenter requested that we assign HCPCS code C9778 (Colpopexy, vaginal. Minimally invasive extra-peritoneal approach (sacrospinous)) device-intensive status as this procedure meets our device-intensive criteria.

Response. After further review, we agree with the commenter that HCPCS code C9778 meets our criteria for device-intensive status. We are accepting the commenter's recommendation and assigning a default device offset percentage of 31 percent to HCPCS code C9778 for CY 2022.

Comment. One commenter recommended assigning CPT code 66179 (Aqueous shunt to extraocular equatorial plate reservoir, external approach. Without graft) as device-intensive as the procedure's device offset percentage is 32.78 percent in Addendum P to the CY 2022 OPPS/ASC proposed rule, which exceeds our 30-percent threshold for device-intensive status.

Response. We have reviewed this procedure code with our medical officers and have determined that this procedure satisfies all of our device-intensive criteria. In particular, we agree with the commenter that this procedure involves an implantable single-use device and that the device meets the requirements for the procedure to receive device-intensive assignment.

Comment. Commenters requested that we assign device-intensive status to. CPT code 0499T (Cystourethroscopy, with mechanical dilation and urethral therapeutic drug delivery for urethral stricture or stenosis, including fluoroscopy, when performed).

CPT code 58674 (Laparoscopy, surgical, ablation of uterine fibroid(s) including intraoperative uasound guidance and monitoring, radiofrequency). CPT code 50590 (Lithotripsy, extracorporeal shock wave). • CPT code 59200 (Insertion of cervical dilator ( e.g., laminaria, prostaglandin) (separate procedure)).

CPT code 66174 (Transluminal dilation of aqueous outflow canal. Without retention of device or stent). CPT code 66175 (Transluminal dilation of aqueous outflow canal.

With retention of device or stent). CPT code 93571 (Intravascular doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress. Initial vessel (list separately in addition to code for primary procedure).

And HCPCS code C9757 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and excision of herniated intervertebral disc, and repair of annular defect with implantation of bone anchored annular closure device, including annular defect measurement, alignment and sizing assessment, and image guidance. 1 interspace, lumbar). Response.

Based on CY 2019 claims data available for this final rule with comment period, the procedures requested by commenters do not have device offset percentages that exceed the 30-percent threshold required for device-intensive status and, therefore, are not eligible to be assigned device-intensive status under the OPPS. Comment. Some commenters submitted invoices and requested a greater device offset amount and greater device offset percentage to reflect the invoice price of a particular device.

Start Printed Page 63618 Other commenters also recommended utilizing invoice prices to establish device offset percentages for procedures with low or no claims volume or to correct situations commenters contend reflect underreported device costs attributable to hospital confusion when reporting HCPCS code C1889 (Implantable/insertable device, not otherwise classified). Response. While we appreciate the recommendations and additional information submitted by commenters, we are not applying the invoice prices submitted by commenters to establish the device offset amount and device offset percentage for these procedures.

None of the invoice prices that were submitted suggest that we should apply our policy of temporarily applying a higher device offset percentage if warranted by additional information. As we have stated in previous rulemaking (85 FR 86015), this policy of temporarily assigning a higher device offset percentage should be applied in rare instances, such as using CY 2020 claims data in light of the erectile dysfunction treatment PHE or where a device has an extremely abnormal cost and, in the absence of claims data, may be significantly underpaid under our policy to apply a default device offset percentage for the procedure that involves such device. Additionally, it would be inappropriate to apply a higher device offset percentage or increase the payment rate in the ASC setting simply because a device's invoice price is greater than the procedure's device offset amount.

Our packaging policies are intended to promote the efficient use of resources both in the HOPD as well as ASC setting and these policies include the packaging of medical devices. While we provide separate transitional pass-through payments for devices for the cost of devices approved for transitional pass-through status, as we stated previously, the intent of transitional pass-through status for devices is to facilitate access for beneficiaries to the advantages of truly innovative devices by allowing for adequate payment for these new devices while the necessary cost data is collected. We believe it would be inappropriate to provide a similar method of calculating payment solely based on a device's cost or invoice price for devices that are not approved for transitional pass-through status.

Lastly, we have heard concerns from stakeholders regarding hospitals' coding decisions for particular devices. Specifically, stakeholders have contended that hospitals do not report HCPCS code C1889 for a particular insertable device as the NUBC billing guidelines recommend that such HCPCS code crosswalk to revenue code 0278—Other Implants—and this revenue code would be inappropriate for the costs attributable to devices that are insertable and not implantable. While we understand stakeholder concerns regarding accurate device cost reporting, we expect hospitals to adhere to the guidelines of correct coding and append the correct device code to the claim when applicable.

However, while we do not believe additional guidance from CMS or adjustment to the device offset calculation to exclude certain claims is warranted at this time, we will continue to monitor this issue going forward. After reviewing the public comments we received, we are finalizing our proposal to assign a device offset percentage based on CY 2020 data if CY 2020 claims information is available, for procedures that were assigned device-intensive status, but, because CY 2019 claims data is not available, would otherwise be assigned a default device offset percentage of 31 percent or a device offset percentage based on claims from a clinically-similar code. Based on updated data for this CY 2022 OPPS/ASC final rule with comment period, we are applying device offset percentages from 2020 claims data to 14 procedures.

These include the 11 procedures described previously plus three additional procedures that were assigned default device offset percentages for CY 2021 and have available device offset percentages from CY 2020 claims data. • CPT code 0519T (Removal and replacement of wireless cardiac stimulator for left ventricular pacing. Pulse generator component(s) (battery and/or transmitter)).

• CPT code 0618T (Insertion of iris prosthesis, including suture fixation and repair or removal of iris, when performed. With secondary intraocular lens placement or intraocular lens exchange). And • HCPCS code C9761 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with lithotripsy (ureteral catheterization is included) and vacuum aspiration of the kidney, collecting system and urethra if applicable).

Additionally, in this final rule with comment period, we are correcting the device offset percentages for several new device-intensive procedures to reflect available claims data from predecessor codes. The full listing of the final CY 2022 device-intensive procedures can be found in Addendum P to the CY 2022 OPPS/ASC final rule with comment period (which is available via the internet on the CMS website). Further, our claims accounting narrative contains a description of our device offset percentage calculation.

Our claims accounting narrative for this final rule with comment period can be found under supporting documentation for the CY 2022 OPPS/ASC final rule on our website at. Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. 3.

Device Edit Policy In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66795), we finalized a policy and implemented claims processing edits that require any of the device codes used in the previous device-to-procedure edits to be present on the claim whenever a procedure code assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC final rule with comment period (the CY 2015 device-dependent APCs) 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 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. In the CY 2019 OPPS/ASC final rule with comment period, we revised the description of HCPCS code C1889 to remove the specific applicability to device-intensive procedures (83 FR 58950). For CY 2019 and subsequent years, the description of Start Printed Page 63619 HCPCS code C1889 is “Implantable/insertable device, not otherwise classified”.

We did not propose any changes to this policy for CY 2022. Comment. Some commenters recommended that we reinstate specific device-to-procedure edits.

One commenter recommended we reinstate specific device-to-procedure edits for arthroplasty procedures and another commenter recommended we reinstate specific device edits for C-code device-intensive procedures. One commenter contended that the removal of specific device-to-procedure edits has contributed to erosion in accuracy in the data highlighted by certain procedures having device offset percentages that are nearly 100 percent of the procedures' costs. Response.

As we stated in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66794), we continue to believe that the elimination of device-to-procedure edits and procedure-to-device edits is appropriate due to the experience hospitals now have in coding and reporting these claims fully. More specifically, for the most costly devices, we believe the C-APCs reliably reflect the cost of the device if charges for the device are included anywhere on the claim. We note that, under our current policy, hospitals are still expected to adhere to the guidelines of correct coding and append the correct device code to the claim when applicable.

We also note that, as with all other items and services recognized under the OPPS, we expect hospitals to code and report their costs appropriately, regardless of whether there are claims processing edits in place. Additionally, we have not observed any increase in frequency of procedures with device offset percentages that are nearly 100 percent. And we do not believe the absence of device-to-procedure edits has precipitated an erosion in accuracy of our device cost statistics.

Procedures with extremely significant device offset percentages of greater than 90 percent can be attributed to procedures with little claims volume as well as extremely significant device costs and not the absence of device-to-procedure edits. Therefore, we are not accepting the commenters' recommendations to reinstate device-to-procedure edits. 4.

Adjustment to OPPS Payment for No Cost/Full Credit and Partial Credit Devices a. Background To ensure equitable OPPS payment when a hospital receives a device without cost or with full credit, in CY 2007, we implemented a policy to reduce the payment for specified device-dependent APCs by the estimated portion of the APC payment attributable to device costs (that is, the device offset) when the hospital receives a specified device at no cost or with full credit (71 FR 68071 through 68077). Hospitals were instructed to report no cost/full credit device cases on the claim using the “FB” modifier on the line with the procedure code in which the no cost/full credit device is used.

In cases in which the device is furnished without cost or with full credit, hospitals were instructed to report a token device charge of less than $1.01. In cases in which the device being inserted is an upgrade (either of the same type of device or to a different type of device) with a full credit for the device being replaced, hospitals were instructed to report as the device charge the difference between the hospital's usual charge for the device being implanted and the hospital's usual charge for the device for which it received full credit. In CY 2008, we expanded this payment adjustment policy to include cases in which hospitals receive partial credit of 50 percent or more of the cost of a specified device.

Hospitals were instructed to append the “FC” modifier to the procedure code that reports the service provided to furnish the device when they receive a partial credit of 50 percent or more of the cost of the new device. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for more background information on the “FB” and “FC” modifiers payment adjustment policies (72 FR 66743 through 66749). In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), beginning in CY 2014, we modified our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit.

For CY 2013 and prior years, our policy had been to reduce OPPS payment by 100 percent of the device offset amount when a hospital furnishes a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital receives partial credit in the amount of 50 percent or more of the cost for the specified device. For CY 2014, we reduced OPPS payment, for the applicable APCs, by the full or partial credit a hospital receives for a replaced device. Specifically, under this modified policy, hospitals are required to report on the claim the amount of the credit in the amount portion for value code “FD” (Credit Received from the Manufacturer for a Replaced Device) when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device.

For CY 2014, we also limited the OPPS payment deduction for the applicable APCs to the total amount of the device offset when the “FD” value code appears on a claim. For CY 2015, we continued our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit and to use the three criteria established in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68072 through 68077) for determining the APCs to which our CY 2015 policy will apply (79 FR 66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), we finalized our policy to no longer specify a list of devices to which the OPPS payment adjustment for no cost/full credit and partial credit devices would apply and instead apply this APC payment adjustment to all replaced devices furnished in conjunction with a procedure assigned to a device-intensive APC when the hospital receives a credit for a replaced specified device that is 50 percent or greater than the cost of the device.

B. Policy for No Cost/Full Credit and Partial Credit Devices In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659 through 79660), for CY 2017 and subsequent years, we finalized a policy to reduce OPPS payment for device-intensive procedures, by the full or partial credit a provider receives for a replaced device, when a hospital furnishes a specified device without cost or with a full or partial credit. Under our current policy, hospitals continue to be required to report on the claim the amount of the credit in the amount portion for value code “FD” when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device.

In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), we adopted a policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit by the lesser of the device offset amount for the APC or the Start Printed Page 63620 amount of the credit. We adopted this change in policy in the preamble of the CY 2014 OPPS/ASC final rule with comment period and discussed it in subregulatory guidance, including Chapter 4, Section 61.3.6 of the Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86017 through 86018, 86302), we made conforming changes to our regulations at § 419.45(b)(1) and (2) that codified this policy.

We did not propose any changes and we did not receive any public comments related to our policies regarding payment for no cost/full credit and partial credit devices in CY 2022. 5. Payment Policy for Low-Volume Device-Intensive Procedures In 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 noted 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).

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 previously for the policy applied to the procedure described by CPT code 0308T in CY 2016. For CYs 2019 through 2021, we continued our 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 by using the median cost instead of the geometric mean (85 FR 86019). As discussed in further detail in Section X.C of the CY 2022 OPPS/ASC proposed rule (86 FR 42181 through 42185), we proposed to establish a universal low volume APC policy for clinical APCs, brachytherapy APCs, and New Technology APCs with fewer than 100 single claims in the claims data used for ratesetting (for CY 2022 rates, this is proposed to be the CY 2019 claim data).

For APCs designated as low volume APCs (those with fewer than 100 single claims in the claims year) under our proposed policy, we proposed to establish a payment rate using the highest of the median cost, arithmetic mean cost, or the geometric mean cost. In conjunction with our new, broader low volume APC proposal for clinical APCs, brachytherapy APCs, and New Technology APCs, we proposed to eliminate our payment policy for low-volume device-intensive procedures for CY 2022 and subsequent calendar years. Currently, CPT code 0308T is the only code subject to our low-volume device-intensive policy.

Given that our proposed universal low volume APC policy would utilize a greater number of claims and provide additional cost metric alternatives for ratesetting than our existing low-volume device-intensive policy, we believe that the cost and ratesetting issues previously discussed with respect to CPT code 0308T would be appropriately addressed under our broader universal low volume APC proposal. We did not receive any public comments on our proposal to eliminate our payment policy for low-volume device-intensive procedures and address low-volume, device-intensive procedures through our broader proposal to designate low volume APCs among eligible clinical APCs, brachytherapy APCs, and New Technology APCs and we are finalizing our proposal without modification. Public comments related to our proposed Low Volume APC policy are discussed in section X.C (Low Volume Policy for Clinical and Brachytherapy APCs) of this final rule with comment period.

V. OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals A. 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 the 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 the proposed rule includes (but is not necessarily limited to) a “biological product” or a “biologic” as defined under section 351 of the PHS Act.

As enacted by the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), this pass-through payment provision requires the Secretary to make additional payments to hospitals for.

Current orphan drugs for rare diseases and conditions, as designated under section 526 of the Federal Food, Drug, and Cosmetic Act. Current drugs and biologicals and brachytherapy sources used in cancer therapy. And current radiopharmaceutical drugs and biologicals.

€œCurrent” refers to those types of drugs or biologicals mentioned above that are hospital outpatient services under Medicare Part B for which transitional pass-through payment was made on the first date the hospital OPPS was implemented. Transitional pass-through payments also are provided for certain “new” drugs and biologicals that were not being paid for as an HOPD service as of December 31, 1996, and whose cost is “not insignificant” in relation to the OPPS payments for the procedures or services associated with the new drug or biological. For pass-through payment purposes, radiopharmaceuticals are included as “drugs.” As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug as a hospital outpatient service under Medicare Part B.

Proposed CY 2022 pass-through drugs and Start Printed Page 63621 biologicals and their designated APCs are assigned status indicator “G” in Addenda A and B to the proposed rule (which are available via the internet on the CMS website). 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 the proposed rule, the term “ASP methodology” and “ASP-based” are inclusive of all data sources and methodologies described therein. Additional information on the ASP methodology can be found on our website at. 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 our website at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​passthrough_​payment.html. 2.

Transitional Pass-Through Payment Period for Pass-Through Drugs, Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-Through Status As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug or biological as a hospital outpatient service under Medicare Part B. Our current policy is to accept pass-through applications on a quarterly basis and to begin pass-through payments for newly approved pass-through drugs and biologicals on a quarterly basis through the next available OPPS quarterly update after the approval of a drug's or biological's pass-through status. However, prior to CY 2017, we expired pass-through status for drugs and biologicals on an annual basis through notice-and-comment rulemaking (74 FR 60480).

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79662), we finalized a policy change, beginning with pass-through drugs and biologicals newly approved in CY 2017 and subsequent calendar years, to allow for a quarterly expiration of pass-through payment status for drugs, biologicals, and radiopharmaceuticals to afford a pass-through payment period that is as close to a full 3 years as possible for all pass-through drugs, biologicals, and radiopharmaceuticals. This change eliminated the variability of the pass-through payment eligibility period, which previously varied based on when a particular application was initially received. We adopted this change for pass-through approvals beginning on or after CY 2017, to allow, on a prospective basis, for the maximum pass-through payment period for each pass-through drug without exceeding the statutory limit of 3 years.

Notice of drugs whose pass-through payment status is ending during the calendar year will continue to be included in the quarterly OPPS Change Request transmittals. Comment. One commenter commended CMS for continuing the policy to provide for quarterly expiration of pass-through payment status, which allows a pass-through period that is as close to a full 3 years as possible.

Response. We thank the commenter for their input and support of this policy, which was adopted in the CY 2017 OPPS/ASC final rule (81 FR 79654 through 79655). 3.

Drugs and Biologicals With Expiring Pass-Through Payment Status in CY 2021 There are 25 drugs and biologicals whose pass-through payment status will expire during CY 2021, as listed in Table 37. Most of these drugs and biologicals will have received OPPS pass-through payment for 3 years during the period of April 1, 2018, through December 31, 2021. In accordance with the policy finalized in CY 2017 and described earlier, 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 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 $130 for CY 2022), as discussed further in section V.B.1.

Of the CY 2022 OPPS/ASC proposed rule (86 FR 42127 through 42148). We proposed 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 proposed to provide separate payment at the applicable ASP-based payment amount (which is proposed at ASP+6 percent for non-340B drugs for CY 2022, as discussed further in section V.B.2.

Of the CY 2022 OPPS/ASC proposed rule (86 FR 42132). We did not receive any public comments regarding our proposals. Therefore, we are adopting these proposals as final for CY 2022 without modification.

Refer to Table 37 for the list of drugs and biologicals for which pass-through payment status will expire between March 31, 2021 and December 31, 2021. The packaged or separately payable status of each of these drugs or biologicals is listed in Addendum B of the CY 2022 OPPS/ASC final rule (which is available via the internet on the CMS website). Start Printed Page 63622 Start Printed Page 63623 Start Printed Page 63624 4.

Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through Payment Status Expiring in CY 2022 We proposed to end pass-through payment status in CY 2022 for 26 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status between April 1, 2019, and January 1, 2020, are listed in Table 28 of the CY 2022 OPPS/ASC proposed rule (86 FR 42121 through 42122). The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that will end by December 31, 2022, are assigned status indicator “G” in Addenda A and B to the CY 2022 OPPS/ASC proposed rule (which are available via the internet on the CMS website).

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 2022, we proposed 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 2022. We proposed that a $0 pass-through payment amount would be paid for pass-through drugs and biologicals that are not policy-packaged as described in section V.B.1.c.

(86 FR 42120) under the CY 2022 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 proposed that their pass-through payment amount would be equal to ASP+6 percent for CY 2022 minus a payment offset for the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological as described in section V.A.6. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42126).

We proposed this policy because, if not for the pass-through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure. We proposed to continue to update pass-through payment rates on a quarterly basis on the CMS website during CY 2022 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through payment drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period (70 FR 68632 through 68635).

For CY 2022, consistent with our CY 2021 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass-through payment status during CY 2022, we proposed 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 proposed to provide pass-through payment at WAC+3 percent (consistent with our proposed policy in section V.B.2.b. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42132)), the equivalent payment provided to pass-through drugs and biologicals without ASP information. Additional detail on the WAC+3 percent payment policy can be found in section V.B.2.b.

Of the CY 2022 OPPS/ASC proposed rule. If WAC information also is not available, we proposed to provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP. Refer to Table 38 below for the list of drugs and biologicals with pass-through payment status expiring during CY 2022.

Start Printed Page 63625 Start Printed Page 63626 Start Printed Page 63627 5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through Payment Status Continuing in CY 2022 We proposed to continue pass-through payment status in CY 2022 for 46 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status with effective dates beginning between April 1, 2020, and January 1, 2022, are listed in Table 39.

The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that will continue after December 31, 2022, are assigned status indicator “G” in Addenda A and B to the CY 2022 OPPS/ASC proposed rule (which are available via the internet on the CMS website). 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 2023, we proposed 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 2022.

We proposed that a $0 pass-through payment amount would be paid for pass-through drugs and biologicals that are not policy-packaged as described in section V.B.1.c. Under the CY 2022 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 proposed that their pass-through payment amount would be equal to ASP+6 percent for CY 2022 minus a payment offset for any predecessor drug products contributing to the pass-through payment as described in section V.A.6.

Of the CY 2022 OPPS/ASC proposed rule (86 FR 42126). We proposed this policy because, if not for the pass-through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure. We proposed to continue to update pass-through payment rates on a quarterly basis on our website during CY 2022 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through payment drugs or biologicals are necessary.

For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period (70 FR 68632 through 68635). For CY 2022, consistent with our CY 2021 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS.

Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass-through payment status during CY 2023, we proposed 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 proposed to provide pass-through payment at WAC+3 percent (consistent with our proposed policy in section V.B.2.b. Of the CY 2022 OPPS/ASC proposed rule (86 FR 42132)), the equivalent payment provided to pass-through drugs and biologicals without ASP information.

Additional detail on the WAC+3 percent payment policy can be found in section V.B.2.b. Of the CY 2022 OPPS/ASC proposed rule. If WAC information also is not available, we proposed to provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP.

The drugs and biologicals that we proposed to have pass-through payment status expire after December 31, 2022, are shown in Table 39. Start Printed Page 63628 Start Printed Page 63629 Start Printed Page 63630 Start Printed Page 63631 Start Printed Page 63632 Start Printed Page 63633 Start Printed Page 63634 6. Provisions for Reducing Transitional Pass-Through Payments for Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals to Offset Costs Packaged Into APC Groups Under the regulation 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 the regulation at 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 policy-packaged drugs, which include 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 2022, as we did in CY 2021, we proposed 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 40. Start Printed Page 63635 We proposed to continue to post annually on our website at. Https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Annual-Policy-Files.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 payment 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. Comment. One commenter requested that CMS release a copy of the APC offset file with future OPPS/ASC proposed rules to enable the public to calculate the percentage of APC payment associated with packaged drug costs using APC offset data for the upcoming calendar year.

Response. We thank the commenter for their suggestion, and we will consider addressing this request in future rulemaking. B.

OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Payment Status 1. Criteria for Packaging Payment for Drugs, Biologicals, and Radiopharmaceuticals a. 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 $130 for CY 2021 (84 FR 61312 through 61313). Following the CY 2007 methodology, for the CY 2022 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 2022 and rounded the resulting dollar amount ($132.44) to the nearest $5 increment, which yielded a figure of $130.

In performing this calculation, we used the most recent forecast of the quarterly index levels for the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from CMS's Office of the Actuary. For the CY 2022 OPPS/ASC proposed rule, based on these calculations using the CY 2007 OPPS methodology, we proposed a packaging threshold for CY 2022 of $130. Comment.

Two commenters expressed their support for maintaining the drug packaging threshold for CY 2022 at $130. One commenter believes, however, that the drug packaging threshold has been increasing faster than payment increases under the OPPS. This commenter would like us to research if the drug packaging threshold should be lowered in future years.

Response. We appreciate the support of the commenters of the drug packaging threshold level of $130. We also thank the one commenter for their suggestion to consider reducing the drug packaging threshold in future years and will consider it for future rulemaking.

After consideration of the public comments, we repeated our drug packaging threshold calculations for the final rule with the most current data available. Once again, we calculated a drug packaging threshold for CY 2022 of Start Printed Page 63636 $130. Therefore, we are finalizing our proposal without modification to have a drug packaging threshold for CY 2022 of $130.

b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs, Certain Biologicals, and Certain Therapeutic Radiopharmaceuticals Under the Cost Threshold (“Threshold-Packaged Drugs”) To determine the proposed CY 2022 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 that had a HCPCS code in CY 2019 and were paid (via packaged or separate payment) under the OPPS. We used data from CY 2019 claims processed through June 30, 2020, 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42129), or for the following policy-packaged items that we proposed to continue to package in CY 2022. 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 2022, we use 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 proposed for separately payable drugs and biologicals (other than 340B drugs)) for CY 2022, as discussed in more detail in section V.B.2.b. Of the proposed rule) to calculate the CY 2022 proposed rule per day costs. We used the manufacturer-submitted ASP data from the fourth quarter of CY 2020 (data that were used for payment purposes in the physician's office setting, effective April 1, 2021) to determine the proposed rule per day cost.

While the CY 2020 ASP data were collected during the PHE, ASP data are not affected by changes in utilization the way non-drug services are for setting payment rates, and so we believe CY 2020 ASP data continues to be representative of the price of drugs in the market. We have continued to use ASP data from CY 2020 to report quarterly drug rates for CY 2020 and CY 2021. As is our standard methodology, for 2022, we proposed to use payment rates based on the ASP data from the fourth quarter of CY 2020 for budget neutrality estimates, packaging determinations, impact analyses, and completion of Addenda A and B to the proposed rule (which are available via the internet on the CMS website) because these are the most recent data available for use at the time of development of the proposed rule.

These data also were the basis for drug payments in the physician's office setting, effective April 1, 2021. 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 2019 hospital claims data to determine their per day cost. We proposed to package items with a per day cost less than or equal to $130, and identify items with a per day cost greater than $130 as separately payable unless they are policy-packaged.

Consistent with our past practice, we cross-walked historical OPPS claims data from the CY 2019 HCPCS codes that were reported to the CY 2021 HCPCS codes that we display in Addendum B to the CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website) for proposed payment in CY 2022. 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 the CY 2022 OPPS/ASC proposed rule, we proposed to use ASP data from the fourth quarter of CY 2020, 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, 2021, along with updated hospital claims data from CY 2019. We note that we also proposed to use these data for budget neutrality estimates and impact analyses for the CY 2022 OPPS/ASC proposed rule.

Payment rates for HCPCS codes for separately payable drugs and biologicals included in Addenda A and B of the final rule with comment period will be based on ASP data from the second quarter of CY 2021. 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, 2021. These payment rates would then be updated in the January 2022 OPPS update, based on the most recent ASP data to be used for physicians' office and OPPS payment as of January 1, 2022.

For items that do not currently have an ASP-based payment rate, we proposed to recalculate their mean unit cost from all of the CY 2019 claims data and update cost report information available for the CY 2022 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 the proposed rule may be different from the same drugs' HCPCS codes' packaging status determined based on the data used for the final rule with comment period. Under such circumstances, we proposed to continue to follow the established policies initially adopted for the CY 2005 OPPS (69 FR 65780) in order to more equitably pay for those drugs whose costs fluctuate relative to the proposed CY 2022 OPPS drug packaging threshold and the drug's payment status (packaged or separately payable) in CY 2021.

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 2022, consistent with our historical practice, we proposed 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 2021 and that are proposed for separate payment in CY 2022, and that then have per day costs equal to or less than the CY 2022 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2022 final rule, would continue to receive separate payment in CY 2022.

• HCPCS codes for drugs and biologicals that were packaged in CY 2021 and that are proposed for separate payment in CY 2022, and that then have Start Printed Page 63637 per day costs equal to or less than the CY 2022 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2022 final rule, would remain packaged in CY 2022. HCPCS codes for drugs and biologicals for which we proposed packaged payment in CY 2022 but that then have per-day costs greater than the CY 2022 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2022 final rule, would receive separate payment in CY 2022. We did not receive any public comments on our proposal to recalculate the mean unit cost for items that do not currently have an ASP-based payment rate from all of the CY 2019 claims data and updated cost report information available for this CY 2022 final rule with comment period to determine their final per day cost.

We also did not receive any public comments on our proposal to continue to follow the established policies, initially adopted for the CY 2005 OPPS (69 FR 65780), when the packaging status of some HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals in the 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. For CY 2022, we are finalizing these two proposals without modification. Please refer to Addendum B to this final rule with comment period, which is available via the internet on the CMS website, for information on the packaging status of drugs, biologicals, and therapeutic radiopharmaceuticals.

C. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals As mentioned earlier in this section, under the OPPS, we package several categories of nonpass-through drugs, biologicals, and radiopharmaceuticals, regardless of the cost of the products. Because the products are packaged according to the policies in 42 CFR 419.2(b), we refer to these packaged drugs, biologicals, and radiopharmaceuticals as “policy-packaged” drugs, biologicals, and radiopharmaceuticals.

These policies are either longstanding or based on longstanding principles and inherent to the OPPS and are as follows. Anesthesia, certain drugs, biologicals, and other pharmaceuticals. Medical and surgical supplies and equipment.

Surgical dressings. And devices used for external reduction of fractures and dislocations (§ 419.2(b)(4)). Intraoperative items and services (§ 419.2(b)(14)).

Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure (including, but not limited to, diagnostic radiopharmaceuticals, contrast agents, and pharmacologic stress agents) (§ 419.2(b)(15)). And Drugs and biologicals that function as supplies when used in a surgical procedure (including, but not limited to, skin substitutes and similar products that aid wound healing and implantable biologicals) (§ 419.2(b)(16)). The policy at § 419.2(b)(16) is broader than that at § 419.2(b)(14).

As we stated in the CY 2015 OPPS/ASC final rule with comment period. €œWe 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 § 419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, contrast agents, stress agents, and some other products.

The category described by § 419.2(b)(16) includes skin substitutes and some other products. We believe it is important to reiterate that cost consideration is not a factor when determining whether an item is a surgical supply (79 FR 66875). Comment.

One commenter requested that we develop a policy to provide separate payment for drugs that are administered at the time of ophthalmic surgery and have an FDA-approved indication to treat or prevent postoperative issues. Response. A surgical procedure episode consists of both pre-operative and post-operative care in addition to the surgical procedure itself.

If a drug used to address a post-operative concern, such as pain management, is billed together with a surgical procedure, we assume that the pain management drug was given as a part of the overall surgical procedure. Since the pain management drug is ancillary to the primary ophthalmic surgery procedure, it is considered a surgical supply. The pain management drug is only administered to the patient because the patient has received ophthalmic surgery, and the drug would not have been administered to the patient if the patient did not have the surgery.

In the OPPS, we pay one rate for the entire surgical procedure, and payment for supplies, such as pain management drugs, is packaged into the payment rate for the surgical procedure. We note exceptions to this policy in the ASC setting are discussed in II.A.3.b. (Payment Policy for Non-Opioid Pain Management Drugs and Biologicals that Function as Surgical Supplies under the ASC Payment System) of this final rule with comment period.

Comment. One commenter recommended that CMS continue to apply radiolabeled product edits to the nuclear medicine procedures to ensure that all packaged costs are included on nuclear medicine claims in order to establish appropriate payment rates in the future. The commenter was concerned that many providers performing nuclear medicine procedures are not including the cost of diagnostic radiopharmaceuticals used for the procedures in their claims submissions.

The commenter believes this lack of drug cost reporting could be causing the cost of nuclear medicine procedures to be underreported and therefore request that the radiolabeled product edits be reinstated. Response. We appreciated the commenter's feedback.

However, we are not reinstating the radiolabeled product edits to nuclear medicine procedures, which required a diagnostic radiopharmaceutical to be present on the same claim as a nuclear medicine procedure for payment to be made under the OPPS. As previously discussed in the CY 2020 OPPS/ASC final rule with comment period (85 FR 86033 through 86034), the edits were in place between CY 2008 and CY 2014 (78 FR 75033). We believe the period of time in which the edits were in place was sufficient for hospitals to gain experience reporting procedures involving radiolabeled products and to become accustomed to ensuring that they code and report charges so that their claims fully and appropriately reflect the costs of those radiolabeled products.

As with all other items and services recognized under the OPPS, we expect hospitals to code and report their costs appropriately, regardless of whether there are claims processing edits in place. Comment. Several commenters requested that diagnostic radiopharmaceuticals be paid separately in all cases, not just when the drugs have pass-through payment status.

One commenter suggested payment based upon ASP, WAC, AWP, or mean unit cost data derived from hospital claims. Some commenters mentioned that pass-through payment status helps the diffusion of new diagnostic radiopharmaceuticals into the market, but is not enough to make up for what the commenters believe is inadequate payment after pass-through status Start Printed Page 63638 expires. Commenters opposed incorporating the cost of the drug into the associated APC, and provided evidence showing procedures in which diagnostic radiopharmaceuticals are considered to be a surgical supply, which the commenter believed are often paid at a lower rate than the payment rate for the diagnostic radiopharmaceutical itself when the drug had pass-through payment status.

Additionally, commenters proposed alternative payment methodologies such as subjecting diagnostic radiopharmaceuticals to the drug packaging threshold, creating separate APC payments for diagnostic radiopharmaceuticals that cost more than $500, or using ASP, WAC, or AWP to account for packaged radiopharmaceutical costs. Response. We thank commenters for their suggestions.

Commenters have made many of these suggestions in the past and we addressed them in previous rules, including the CY 2020 OPPS/ASC final rule (84 FR 61314 through 61315) and the CY 2021 OPPS/ASC final rule (85 FR 86034). We continue to believe that diagnostic radiopharmaceuticals are an integral component of many nuclear medicine and imaging procedures and charges associated with them should be reported on hospital claims to the extent they are used, and accordingly, the payment for the radiopharmaceuticals is reflected within the payment for the primary procedure. In response to the comment regarding the proposed cost of the packaged procedure in CY 2022 being substantially lower than the payment rate of the radiopharmaceutical when it was on pass-through payment status plus the payment rate of the procedure associated with the radiopharmaceutical, we note that rates are established in a manner that uses the geometric mean of reported costs to furnish the procedure based on data submitted to CMS from all hospitals paid under the OPPS to set the payment rate for the service.

Accordingly, the costs that are calculated by Medicare reflect the average costs of items and services that are packaged into a primary procedure and will not necessarily equal the sum of the cost of the primary procedure and the average sales price of the specific items and services used in the procedure in each case. Furthermore, the costs will be based on the reported costs submitted to Medicare by the hospitals and not the list price established by the manufacturer. Claims data that include the radiopharmaceutical packaged with the associated procedure reflect the combined cost of the procedure and the radiopharmaceutical used in the procedure.

Additionally, we do not believe it is appropriate to create a new packaging threshold specifically for diagnostic radiopharmaceuticals as such a threshold would not align with our overall packaging policy and commenters have submitted only limited data to support a specific threshold. With respect to the request that we create a new APC for each radiopharmaceutical product, we do not believe it is appropriate to create unique APCs for diagnostic radiopharmaceuticals. Diagnostic radiopharmaceuticals function as supplies during a diagnostic test or procedure and following our longstanding packaging policy, these items are packaged under the OPPS.

Packaging supports our goal of making OPPS payments consistent with those of a prospective payment system, which packages costs into a single aggregate payment for a service, encounter, or episode of care. Furthermore, diagnostic radiopharmaceuticals function as supplies that enable the provision of an independent service, and are not themselves the primary therapeutic modality, and therefore, we do not believe they warrant separate payment through creation of a unique APC at this time. We welcome ongoing dialogue with stakeholders regarding suggestions for payment changes for consideration in future rulemaking.

Comment. One commenter expressed their approval of the drugs proposed to be included in our policy-packaged drug policy. Response.

We appreciate the support of the commenter. After consideration of the public comments we received, we are finalizing our proposals without modification to continue our drug packaging policies, which are included in the regulation text 42 CFR 419.2(b). D.

Packaging Determination for HCPCS Codes That Describe the Same Drug or Biological but Different Dosages In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490 through 60491), we finalized a policy to make a single packaging determination for a drug, rather than an individual HCPCS code, when a drug has multiple HCPCS codes describing different dosages because we believe that adopting the standard HCPCS code-specific packaging determinations for these codes could lead to inappropriate payment incentives for hospitals to report certain HCPCS codes instead of others. We continue to believe that making packaging determinations on a drug-specific basis eliminates payment incentives for hospitals to report certain HCPCS codes for drugs and allows hospitals flexibility in choosing to report all HCPCS codes for different dosages of the same drug or only the lowest dosage HCPCS code. Therefore, we proposed 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 2022.

For CY 2022, 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 2019 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 the CY 2022 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 2019 claims data to make the proposed packaging determinations for these drugs. HCPCS code C9257 (Injection, bevacizumab, 0.25 mg).

HCPCS code J1840 (Injection, kanamycin sulfate, up to 500 mg). HCPCS code J1850 (Injection, kanamycin sulfate, up to 75 mg). HCPCS code J3472 (Injection, hyaluronidase, ovine, preservative free, per 1000 usp units).

HCPCS code J7100 (Infusion, dextran 40, 500 ml). And HCPCS code J7110 (Infusion, dextran 75, 500 ml). For all other drugs and biologicals that have HCPCS codes describing different doses, we then multiplied the proposed weighted average ASP+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 2022 drug packaging threshold of $130 (so that all HCPCS codes for the same drug or biological would be packaged) or greater than the proposed CY 2022 drug packaging threshold of $130 (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 2022 is displayed in Table 41. Start Printed Page 63639 Comment. One commenter supported our proposal to continue our current policy to make packaging determinations on a drug-specific basis rather than a HCPCS code basis when multiple HCPCS codes are used to describe different quantities of a drug or biological.

Response. We appreciate the support of the commenter. After reviewing the public comments, we are finalizing our proposal, without modification, 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.

The packaging status of each drug and biological HCPCS code to which this methodology applies in CY 2022 is displayed in Table 41. Start Printed Page 63640 2. 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 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 to payment rates established under the methodology described in section 1842(o), section 1847A, or section 1847B of the Act, as calculated and adjusted by the Secretary as necessary for purposes of paragraph (14). We refer to this alternative methodology as the “statutory default.” Most physician Part B drugs are paid at ASP+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.[] It has been our policy since CY 2006 to apply the same treatment to all separately payable drugs and biologicals, which include SCODs, and drugs and biologicals that are not SCODs.

Therefore, we apply the payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs, as required by statute, but we also apply it to separately payable drugs and biologicals that are not SCODs, which is a policy determination rather than a statutory requirement. In the CY 2022 OPPS/ASC proposed rule, we proposed 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 have continued this policy of paying for separately payable drugs and biologicals at the statutory default for CYs 2014 through 2021.

B. CY 2022 Payment Policy For 2022, we proposed to continue our payment policy that has been in effect since CY 2013 to pay for separately payable drugs and biologicals, with the exception of 340B-acquired drugs, at ASP+6 percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We proposed to pay for separately payable nonpass-through drugs acquired with a 340B discount at a rate of ASP minus 22.5 percent (as described in section V.B.6).

We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through 59371), and the CY 2021 OPPS/ASC final rule with comment period (85 FR 86042 through 86055) for more information about our current payment policy for drugs and biologicals acquired with a 340B discount. In the case of a drug or biological during an initial sales period in which data on the prices for sales of the drug or biological are not sufficiently available from the manufacturer, section 1847A(c)(4) of the Act permits the Secretary to make payments that are based on WAC. Under section 1833(t)(14)(A)(iii)(II) of the Act, the amount of payment for a separately payable drug equals the average price for the drug for the year established under, among other authorities, section 1847A of the Act.

As explained in greater detail in the CY 2019 PFS final rule, under section 1847A(c)(4) of the Act, although payments may be based on WAC, unlike section 1847A(b) of the Act (which specifies that payments using ASP or WAC must be made with a 6 percent add-on), section 1847A(c)(4) of the Act does not require that a particular add-on amount be applied to WAC-based pricing for this initial period when ASP data is not available. Consistent with section 1847A(c)(4) of the Act, in the CY 2019 PFS final rule (83 FR 59661 to 59666), we finalized a policy that, effective January 1, 2019, WAC-based payments for Part B drugs made under section 1847A(c)(4) of the Act will utilize a 3-percent add-on in place of the 6-percent add-on that was being used according to our policy in effect as of CY 2018. For the CY 2019 OPPS, we followed the same policy finalized in the CY 2019 PFS final rule (83 FR 59661 to 59666).

For CYs 2020 and 2021, we adopted a policy to utilize a 3-percent add-on instead of a 6-percent add-on for drugs that are paid based on WAC under section 1847A(c)(4) of the Act pursuant to our authority under section 1833(t)(14)(A)(iii)(II) (84 FR 61318 and 85 FR 86039). For 2022, we proposed to continue to utilize a 3-percent add-on instead of a 6-percent add-on for drugs that are paid based on WAC pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of the Act, which Start Printed Page 63641 provides, in part, that the amount of payment for a SCOD is the average price of the drug in the year established under section 1847A of the Act. We also proposed to apply this provision to non-SCOD separately payable drugs.

Because we proposed to establish the average price for a drug paid based on WAC under section 1847A of the Act as WAC+3 percent instead of WAC+6 percent, we believe it is appropriate to price separately payable drugs paid based on WAC at the same amount under the OPPS. We proposed that, if finalized, our proposal to pay for drugs or biologicals at WAC+3 percent, rather than WAC+6 percent, would apply whenever WAC-based pricing is used for a drug or biological under 1847A(c)(4). For drugs and biologicals that would otherwise be subject to a payment reduction because they were acquired under the 340B Program, the payment amount for these drugs (proposed as a rate of WAC minus 22.5 percent) would continue to apply.

We refer readers to the CY 2019 PFS final rule (83 FR 59661 to 59666) for additional background on this policy. We proposed that payments for separately payable drugs and biologicals would be included in the budget neutrality adjustments, under the requirements in section 1833(t)(9)(B) of the Act. We also proposed that the budget neutral weight scalar would not be applied in determining payments for these separately payable drugs and biologicals.

We note that separately payable drug and biological payment rates listed in Addenda A and B to the CY 2022 OPPS/ASC proposed rule (available via the internet on the CMS website), which illustrate the proposed CY 2022 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, 2021, or WAC, AWP, or mean unit cost from CY 2019 claims data and updated cost report information available for the CY 2022 OPPS/ASC proposed rule. In general, these published payment rates are not the same as the actual January 2022 payment rates. This is because payment rates for drugs and biologicals with ASP information for January 2022 will be determined through the standard quarterly process where ASP data submitted by manufacturers for the third quarter of CY 2021 (July 1, 2021, through September 30, 2021) will be used to set the payment rates that are released for the quarter beginning in January 2022 in December 2021.

In addition, payment rates for drugs and biologicals in Addenda A and B to the proposed rule for which there was no ASP information available for April 2021 are based on mean unit cost in the available CY 2019 claims data. If ASP information becomes available for payment for the quarter beginning in January 2022, 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 the proposed rule (reflecting April 2021 ASP data) that do not have ASP information available for the quarter beginning in January 2022.

These drugs and biologicals would then be paid based on mean unit cost data derived from CY 2019 hospital claims. Therefore, the proposed payment rates listed in Addenda A and B to the proposed rule are not for January 2022 payment purposes and are only illustrative of the CY 2022 OPPS payment methodology using the most recently available information at the time of issuance of the proposed rule. Comment.

Multiple commenters expressed their support for paying for separately payable drugs and biologicals at ASP+6 percent. The commenters believe this policy is consistent with statute and Congressional intent, and generates more predictable payment for providers than previous payment methodologies for drugs and biologicals. The commenters believe the ASP+6 percent payment policy ensures equivalent payment for drugs and biologicals between the outpatient hospital setting and the physician office, which encourages Medicare beneficiaries to receive care in the most clinically appropriate setting.

Response. We appreciate the commenters' feedback. Comment.

One commenter requested that an add-on percentage of greater than 6 percent of ASP be paid for separately payable radiopharmaceuticals to reflect higher overhead and handling costs for these products. Response. The add-on percentage of 6 percent is generally viewed as reflecting the overhead and handling cost of most drugs, radiopharmaceuticals, and biologicals that are separately payable in the OPPS even though the overhead and handling costs for individual products may be higher or lower than 6 percent of the ASP.

We believe that the add-on percentage of 6 percent is appropriate for separately payable radiopharmaceuticals. Comment. Two commenters requested that we exclude both diagnostic and therapeutic radiopharmaceuticals from our proposed policy that during an initial sales period in which data on the prices for sales of the drug or biological are not sufficiently available from the manufacturer, that payments can be made for drugs using WAC pricing plus a 3 percent price add-on.

The commenters believe the cost of preparing radiopharmaceuticals is higher than the cost of preparing other drugs and biologicals and a 6 percent price add-on should be required anytime that we use WAC to price a radiopharmaceutical. Response. The WAC of a drug or biological is defined in section 1847A(c)(6)(B) of the Act as the manufacturer's list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.

Because the WAC does not include discounts, it typically exceeds ASP, and the use of a WAC-based payment amount for the same drug results in higher dollar payments than the use of an ASP-based payment amount. Also, MedPAC in their June 2017 Report to the Congress ( http://www.medpac.gov/​docs/​default-source/​reports/​jun17_​reporttocongress_​sec.pdf , pages 42 through 44) suggested that greater parity between ASP-based acquisition costs and WAC-based payments for Part B drugs could be achieved and recommended changing the 6 percent add-on for WAC-based payments to 3 percent. Given this evidence that WAC pricing tends to overestimate drug cost, we believe our current and proposed policy to pay drugs at WAC plus 3 percent for all drugs, biologicals, and radiopharmaceuticals when ASP is not available more accurately reflects the cost of new products recently entering the market than does WAC plus 6 percent.

After considering the public comments we received, we are finalizing our proposals related to payment for SCODs and other separately payable drugs and biologicals without modification. 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 Start Printed Page 63642 Act and to subject nonpass-through biosimilar biological products to our annual threshold-packaged policy (for CY 2016, 80 FR 70445 through 70446.

And for CY 2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed rule (82 FR 33630), for CY 2018, we proposed to continue this same payment policy for biosimilar biological products. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59351), we noted that, with respect to comments we received regarding OPPS payment for biosimilar biological products, in the CY 2018 PFS final rule, CMS finalized a policy to implement separate HCPCS codes for biosimilar biological products.

Therefore, consistent with our established OPPS drug, biological, and radiopharmaceutical payment policy, HCPCS coding for biosimilar biological products is based on the policy established under the CY 2018 PFS final rule. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59351), after consideration of the public comments we received, we finalized our proposed payment policy for biosimilar biological products, with the following technical correction. All biosimilar biological products are eligible for pass-through payment and not just the first biosimilar biological product for a reference product.

In the CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed to continue the policy in place from CY 2018 to make all biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product. In addition, in CY 2018, we adopted a policy that biosimilars without pass-through payment status that were acquired under the 340B Program would be paid the ASP of the biosimilar minus 22.5 percent of the reference product's ASP (82 FR 59367). We adopted this policy in the CY 2018 OPPS/ASC final rule with comment period because we believe that biosimilars without pass-through payment status acquired under the 340B Program should be treated in the same manner as other drugs and biologicals acquired through the 340B Program.

As noted earlier, biosimilars with pass-through payment status are paid their own ASP+6 percent of the reference product's ASP. Separately payable biosimilars that do not have pass-through payment status and are not acquired under the 340B Program are also paid their own ASP plus 6 percent of the reference product's ASP. If a biosimilar does not have ASP pricing, but instead has WAC pricing, the WAC pricing add-on of either 3 percent or 6 percent is calculated from the biosimilar's WAC and is not calculated from the WAC price of the reference product.

As noted in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), several stakeholders raised concerns to us that the payment policy for biosimilars acquired under the 340B Program could unfairly lower the OPPS payment for biosimilars not on pass-through payment status because the payment reduction would be based on the reference product's ASP, which would generally be expected to be priced higher than the biosimilar, thus resulting in a more significant reduction in payment than if the 22.5 percent was calculated based on the biosimilar's ASP. We agreed with stakeholders that the current payment policy could unfairly lower the price of biosimilars without pass-through payment status that are acquired under the 340B Program. In addition, we noted that we believed that these changes would better reflect the resources and production costs that biosimilar manufacturers incur.

We also stated that we believe this approach is more consistent with the payment methodology for 340B-acquired drugs and biologicals, for which the 22.5 percent reduction is calculated based on the drug or biological's ASP, rather than the ASP of another product. In addition, we explained that we believed that paying for biosimilars acquired under the 340B Program at ASP minus 22.5 percent of the biosimilar's ASP, rather than 22.5 percent of the reference product's ASP, will more closely approximate hospitals' acquisition costs for these products. Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), we proposed changes to our Medicare Part B drug payment methodology for biosimilars acquired under the 340B Program.

Specifically, for CY 2019 and subsequent years, in accordance with section 1833(t)(14)(A)(iii)(II) of the Act, we proposed to pay nonpass-through biosimilars acquired under the 340B Program at ASP minus 22.5 percent of the biosimilar's ASP instead of the biosimilar's ASP minus 22.5 percent of the reference product's ASP. This proposal was finalized without modification in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58977). For 2022, we proposed to continue our policy to make all biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product.

We also proposed to continue our current policy of paying for nonpass-through biosimilars acquired under the 340B program at the biosimilar's ASP minus 22.5 percent of the biosimilar's ASP instead of the biosimilar's ASP minus 22.5 percent of the reference product's ASP, in accordance with section 1833(t)(14)(A)(iii)(II) of the Act. Comment. One commenter supported our proposal to continue our policy from CY 2018 to make biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product.

Response. We appreciate the commenter's support of this established policy. Comment.

Multiple commenters supported our proposal to pay nonpass-through biosimilars acquired under the 340B Program at ASP minus 22.5 percent of the biosimilar's ASP, rather than the reference product's ASP. Response. We appreciate the commenters' support.

Please see section V.B.6. Of this final rule with comment period for a discussion of payment policy for drugs and biologicals acquired under the 340B program. Comment.

One commenter did not support our proposal to continue our CY 2018 policy to make all biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product. The commenter believes that there should be a “level playing field” between biosimilars and their reference products in order to increase competition and reduce costs for beneficiaries. The commenter does not believe it is fair for biosimilars of a reference product to be receiving passthrough payment of ASP plus 6 percent of the reference product's ASP.

The commenter pointed out that when the reference product is no longer eligible for pass-through payment, if it is acquired under the 340B program, hospitals would be paid for the product at ASP minus 22.5 percent, while the biosimilar that has pass-through status continues to receive payment at ASP plus 6 percent of the reference product's ASP. The commenter believes that this difference in the payment rates for biosimilars and their reference products could potentially lead to increased Medicare spending on biosimilars as providers utilize biosimilars instead of the biosimilars' reference products because of the higher payment rates for biosimilars in these circumstances. Response.

As discussed in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58977), we continue to believe that eligibility for pass-through payment status reflects the unique, complex nature of biosimilars Start Printed Page 63643 and is important as biosimilars become established in the market, just as it is for all other new drugs and biologicals. In terms of the potential increased payment for biosimilars under our policy to allow biosimilars to be eligible for pass-through status, overall increased competition due to the presence of more biosimilars on the market as a result of this policy is expected to drive payments down for both Medicare and for beneficiaries over time, even if there may be increased spending on biosimilars in the short term. After consideration of the public comments we received, we are finalizing our proposed payment policy for biosimilar products, without modification, to continue the policy established in CY 2018 to make all biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product.

We are also finalizing our proposal to continue to pay nonpass-through biosimilars acquired under the 340B Program at the biosimilar's ASP minus 22.5 percent of the biosimilar's, rather than the reference product's ASP. Our final policy regarding the payment rate for drugs and biologicals that are acquired under the 340B program is described in section V.B.6 of this final rule with comment period. 3.

Payment Policy for Therapeutic Radiopharmaceuticals For CY 2022, we proposed to continue the payment policy for therapeutic radiopharmaceuticals that began in CY 2010. We pay for separately payable 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 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 2022. Therefore, we proposed for CY 2022 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 proposed to rely on CY 2019 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 2022 payment rates for nonpass-through, separately payable therapeutic radiopharmaceuticals are included in Addenda A and B to the CY 2022 OPPS/ASC proposed rule (which are available via the internet on the CMS website).

Comment. One commenter supported the continuation of this policy to provide a predicable payment methodology and avoid the payment swings that occurred prior to adoption of the statutory default rate for therapeutic radiopharmaceuticals. Response.

We thank the commenter for their support. We did not receive any additional public comments on this proposal and are finalizing our proposal, without modification, to continue to pay all nonpass-through, separately payable therapeutic radiopharmaceuticals at ASP+6 percent. We are also finalizing our proposal to continue to rely on CY 2019 mean unit cost data derived from hospital claims data for payment rates for therapeutic radiopharmaceuticals for which ASP data are unavailable.

The CY 2022 final payment rates for nonpass-through separately payable therapeutic radiopharmaceuticals are included in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website). 4. Payment for Blood Clotting Factors For CY 2021, 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 (85 FR 86041).

That is, for CY 2021, 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 2021 updated furnishing fee was $0.238 per unit.

For 2022, we proposed 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 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 PFS 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 proposed 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 our website at.

Http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Part-B-Drugs/​McrPartBDrugAvgSalesPrice/​index.html. We proposed to provide payment for blood clotting factors under the same methodology as other separately payable drugs and biologicals under the OPPS and to continue payment of an updated furnishing fee. We will announce the actual figure of the percent change in the applicable CPI and the updated furnishing fee calculation based on that figure through the applicable program instructions and posting on the CMS website.

Comment. One commenter supports our proposal to continue to pay for blood clotting factors at ASP+6 percent plus a furnishing fee for the clotting factor update annually using the CPI. The commenter also supports our policy to pay the same clotting factor Start Printed Page 63644 furnishing fee in both the hospital outpatient and physician office settings.

Response. We appreciate the commenter's support for our policies. After reviewing the public comment that we received, we are finalizing our proposal, without modification, to provide payment for blood clotting factors under the same methodology as other separately payable drugs and biologicals under the OPPS and to continue payment of an updated furnishing fee.

We will announce the actual figure of the percent change in the applicable CPI and the updated furnishing fee calculation based on that figure through the applicable program instructions and posting on the CMS website. 5. Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims Data For CY 2022, we proposed to continue to use the same payment policy as in CY 2021 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 to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70442 through 70443). The proposed CY 2022 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 the CY 2022 OPPS/ASC proposed rule, which is available via the internet on the CMS website. We did not receive any comments on our proposal.

Therefore, we are finalizing our CY 2022 proposal without modification, including our proposal to assign drug or biological products status indicator “K” and pay for them separately for the remainder of CY 2022 if pricing information becomes available. The CY 2022 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 final rule with comment period, which is available via the internet on the CMS website. 6.

CY 2022 OPPS Payment Methodology for 340B Purchased Drugs a. Overview Under the OPPS, payment rates for drugs are generally provided for in section 1833(t)(14)(A). Under that provision, the payment amount is more specifically set forth by cross-reference to section 1847A, which generally sets a default rate of ASP+6 percent for certain drugs.

However, the Secretary has statutory authority to adjust that rate under the OPPS. As described below, beginning in CY 2018, the Secretary adjusted the 340B drug payment rate to ASP minus 22.5 percent to approximate a minimum average discount for 340B drugs, which was based on findings of the GAO and MedPAC that hospitals were acquiring drugs at a significant discount under HRSA's 340B Drug Pricing Program. As described in the following sections, in December 2018, the United States District Court for the District of Columbia (the district court) concluded that the Secretary lacks the authority to bring the default rate in line with average acquisition cost unless the Secretary obtains survey data from hospitals on their acquisition costs.

On July 10, 2019, the district court entered final judgment. The agency appealed to the United States Court of Appeals for the District of Columbia Circuit (hereinafter referred to as “the D.C. Circuit”), and on July 31, 2020, the court entered an opinion reversing the district court's judgment in this matter.

Following the D.C. Circuit's reversal of the lower court's decision, appellees' petition for panel rehearing and petition for rehearing en banc were denied on October 16, 2020. For CY 2021, CMS continued its policy of paying for drugs and biologicals acquired through the 340B Program at ASP minus 22.5 percent.

On January 10, 2021, the appellees filed a petition for a writ of certiorari in the United States Supreme Court. On July 2, 2021, the Supreme Court granted their petition for a writ of certiorari and directed the parties to argue whether the petitioners' suit challenging HHS's 340B drugs payment adjustment is precluded by section 1833(t)(12).[] b. Background In the CY 2018 OPPS/ASC proposed rule (82 FR 33558 through 33724), we proposed changes to the OPPS payment methodology for drugs and biologicals (hereinafter referred to collectively as “drugs”) acquired under the 340B Program.

We proposed these changes to better, and more accurately, reflect the resources and acquisition costs that these hospitals incur. We stated our belief that such changes would allow Medicare beneficiaries (and the Medicare program) to pay a more appropriate amount when hospitals participating in the 340B Program furnish drugs to Medicare beneficiaries that are purchased under the 340B Program. Subsequently, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59369 through 59370), we finalized our proposal and adjusted the payment rate for separately payable drugs and biologicals (other than drugs with pass-through payment status and treatments) acquired under the 340B Program from ASP+6 percent to ASP minus 22.5 percent.

We stated that our goal was 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 in ways that enable hospitals to continue providing access to care for Medicare beneficiaries and other patients. Congress created the 340B Drug Pricing Program so that the eligible entities—safety net providers identified in the statute—could stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. By design, the 340B Program increases the resources available to these safety net providers by providing discounts on covered outpatient drugs that generate savings that can be used to support patient care or other services.

When the program was created, there was an understanding that many of the patients seen by these safety net providers were Medicare and Medicaid beneficiaries. This rule aims to fulfill the goals of different Federal programs, each of which helps ensure access to care for vulnerable populations. We note, however, that the 340B program does not contemplate subsidization from Medicare in the form of payments far exceeding hospitals' acquisition costs.

We also note that critical access hospitals are not paid under the OPPS, and therefore are not subject to the OPPS payment policy for 340B-acquired drugs. We also excepted rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals from the 340B payment adjustment in CY 2018. In addition, as stated in the CY 2018 OPPS/ASC final rule with comment period, this policy change does not apply to drugs with pass-through payment status, which are required to be paid based on the ASP methodology, or treatments, which are excluded from the 340B Program.

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 Start Printed Page 63645 through 79706), we implemented section 603 of the Bipartisan Budget Act of 2015. As a general matter, applicable items and services furnished in certain off-campus outpatient departments of a provider on or after January 1, 2017, are not considered covered outpatient services for purposes of payment under the OPPS and are paid “under the applicable payment system,” which is generally the Physician Fee Schedule (PFS). However, consistent with our policy to pay separately payable, covered outpatient drugs and biologicals acquired under the 340B Program at ASP minus 22.5 percent, rather than ASP+6 percent, when billed by a hospital paid under the OPPS that is not excepted from the payment adjustment, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 59015 through 59022), we finalized a policy to pay ASP minus 22.5 percent for 340B-acquired drugs and biologicals furnished in non-excepted off-campus PBDs paid under the PFS.

We adopted this payment policy effective for CY 2019 and subsequent years. We clarified in the CY 2019 OPPS/ASC proposed rule (83 FR 37125) that the 340B payment adjustment applies to drugs that are priced using either WAC or AWP, and that it has been our policy to subject 340B-acquired drugs that use these pricing methodologies to the 340B payment adjustment since the policy was first adopted. The 340B payment adjustment for WAC-priced drugs is WAC minus 22.5 percent.

340B-acquired drugs that are priced using AWP are paid an adjusted amount of 69.46 percent of AWP. The 69.46 percent of AWP is calculated by first reducing the original 95 percent of AWP price by 6 percent to generate a value that is similar to ASP or WAC with no percentage markup. Then we apply the 22.5 percent reduction to ASP/WAC-similar AWP value to obtain the 69.46 percent of AWP, which is similar to either ASP minus 22.5 percent or WAC minus 22.5 percent.

As discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59369 through 59370), to effectuate the payment adjustment for 340B-acquired drugs, we implemented modifier “JG”, effective January 1, 2018. Hospitals paid under the OPPS, other than a type of hospital excluded from the OPPS (such as critical access hospitals), or excepted from the 340B drug payment policy for CY 2018, were required to report modifier “JG” on the same claim line as the drug HCPCS code to identify a 340B-acquired drug. For CY 2018, rural sole community hospitals, children's hospitals and PPS-exempt cancer hospitals were excepted from the 340B payment adjustment.

These hospitals were required to report informational modifier “TB” for 340B-acquired drugs, and continue to be paid ASP+6 percent. We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through 59370) for a full discussion and rationale for the CY 2018 policies and use of modifiers “JG” and “TB”. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58981), we continued the Medicare 340B payment policies that were implemented in CY 2018 and adopted a policy to pay for nonpass-through 340B-acquired biosimilars at ASP minus 22.5 percent of the biosimilar's ASP, rather than of the reference product's ASP.

In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61321), we continued the 340B policies that were implemented in CY 2018 and CY 2019. Our CY 2018 and 2019 OPPS payment policies for 340B-acquired drugs have been the subject of ongoing litigation. On December 27, 2018, in the case of American Hospital Association, et al.

V. Azar, et al., the district court concluded in the context of reimbursement requests for CY 2018 that the Secretary exceeded his statutory authority by adjusting the Medicare payment rates for drugs acquired under the 340B Program to ASP minus 22.5 percent for that year.[] In that same decision, the district court recognized the “havoc that piecemeal review of OPPS payment could bring about' in light of the budget neutrality requirement,” and ordered supplemental briefing on the appropriate remedy.[] On May 6, 2019, after briefing on remedy, the district court issued an opinion that reiterated that the 2018 rate reduction exceeded the Secretary's authority, and declared that the rate reduction for 2019 (which had been finalized since the Court's initial order was entered) also exceeded his authority.[] Rather than ordering HHS to pay plaintiffs their alleged underpayments, however, the district court recognized that crafting a remedy is “no easy task, given Medicare's complexity,” [] and initially remanded the issue to HHS to devise an appropriate remedy while also retaining jurisdiction. The district court acknowledged that “if the Secretary were to retroactively raise the 2018 and 2019 340B rates, budget neutrality would require him to retroactively lower the 2018 and 2019 rates for other Medicare Part B products and services.” [] “And because HHS has already processed claims under the previous rates, the Secretary would potentially be required to recoup certain payments made to providers.

An expensive and time-consuming prospect.” [] We respectfully disagreed with the district court's understanding of the scope of the Secretary's adjustment authority. On July 10, 2019, the district court entered final judgment. The agency appealed to the D.C.

Circuit, and on July 31, 2020, the court entered an opinion reversing the district court's judgment in this matter. Following the D.C. Circuit's decision, appellees' petition for panel rehearing and petition for rehearing en banc were denied on October 16, 2020.

In January of 2021, appellees petitioned the United States Supreme Court for a writ of certiorari. On July 2, 2021, the Court granted the petition. Before the D.C.

Circuit upheld our authority to pay ASP minus 22.5 percent, we stated in the CY 2020 OPPS/ASC final rule with comment period that we were taking the steps necessary to craft an appropriate remedy in the event of an unfavorable decision on appeal. Notably, after the CY 2020 OPPS/ASC proposed rule was issued, we announced in the Federal Register (84 FR 51590) our intent to conduct a 340B hospital survey to collect drug acquisition cost data for certain quarters in CY 2018 and 2019. We stated that such survey data may be used in setting the Medicare payment amount for drugs acquired by 340B hospitals for cost years going forward, and also may be used to devise a remedy for prior years if the district court's ruling was upheld on appeal.

The district court itself acknowledged that CMS may base the Medicare payment amount on average acquisition cost when survey data are available.[] No 340B hospital disputed in the rulemakings for CY 2018 and 2019 that the ASP minus 22.5 percent formula was a conservative adjustment that represented the minimum discount that hospitals receive for drugs acquired through the 340B program, which is significant because 340B hospitals have internal data regarding their own drug acquisition costs. We stated in the CY 2020 OPPS/ASC final rule with comment period that we thus Start Printed Page 63646 anticipated that survey data collected for CY 2018 and 2019 would confirm that the ASP minus 22.5 percent rate is a conservative amount that overcompensates covered entity hospitals for drugs acquired under the 340B program. We also explained that a remedy that relies on such survey data could avoid the complexities referenced in the district court's opinion.

For a complete discussion of the Hospital Acquisition Cost Survey for 340B-Acquired Specified Covered Outpatient Drugs, we refer readers to the CY 2021 OPPS/ASC proposed rule (85 FR 48882 through 48891) and the CY 2021 OPPS/ASC final rule with comment period (85 FR 86042 through 86055). We proposed a payment rate for 340B drugs of ASP minus 28.7 percent based on survey data, and also proposed in the alternative that the agency could continue its current policy of paying ASP minus 22.5 percent for CY 2021. We explained that we adopted the OPPS 340B payment policy based on the average minimum discount for 340B-acquired drugs being approximately ASP minus 22.5 percent.

The estimated discount was based on a MedPAC analysis identifying 22.5 percent as a conservative minimum discount that 340B entities receive when they purchase drugs under the 340B program, which we discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 52496). We emphasized that we continue to believe that ASP minus 22.5 percent is an appropriate payment rate for 340B-acquired drugs under the authority of section 1833(t)(14)(A)(iii)(II) for the reasons we stated when we adopted this policy in CY 2018 (82 FR 59216). We pointed out that on July 31, 2020, the D.C.

Circuit reversed the decision of the district court, holding that this interpretation of the statute was reasonable. Therefore, we also proposed in the alternative that the agency could continue the current Medicare payment policy for CY 2021. If adopted, we stated that this proposed policy would continue the current Medicare payment policy for CY 2021.

Based on feedback from stakeholders, we stated that we believed maintaining the current payment policy of paying ASP minus 22.5 percent for 340B drugs was appropriate in order to maintain consistent and reliable payment for these drugs both for the remainder of the PHE, and after its conclusion, to give hospitals increased certainty as to payments for these drugs. We explained that continuing our current policy also gives us more time to conduct further analysis of hospital survey data for potential future use for 340B drug payment. We also noted that any changes to the current 340B payment policy would be adopted through public notice and comment rulemaking.

Finally, we stated that while we believe our methods to conduct the 340B Drug Acquisition Cost Survey, as well as the methodology we used to calculate the proposed average or typical discount received by 340B entities on 340B drugs, are valid, we nonetheless recognize the comments that we received from stakeholders. Utilization of the survey data is complex, and we emphasized that we wish to continue to evaluate how to balance and weigh the use of the survey data, the necessary adjustments to the data, and the weighting and incorporation of ceiling prices—all to determine how best to take the relevant factors into account for potentially using the survey to set Medicare OPPS drug payment policy. We stated that we would continue to assess commenters' feedback as we explore whether survey data should be considered hospital acquisition cost data for purposes of paying for drugs acquired under section 1833(t)(14)(A)(iii)(I) of the Act.

C. CY 2022 Proposed 340B Drug Payment Policy For CY 2022, we proposed to continue our current policy of paying ASP minus 22.5 percent for 340B-acquired drugs and biologicals, including when furnished in nonexcepted off-campus PBDs paid under the PFS. We proposed, in accordance with section 1833(t)(14)(A)(iii)(II) of the Act, to pay for separately payable Medicare Part B drugs and biologicals (assigned status indicator “K”), other than treatments and drugs on pass-through status, that are acquired through the 340B Program at ASP minus 22.5 percent when billed by a hospital paid under the OPPS that is not excepted from the payment adjustment.

We proposed to continue our current policy for calculating payment for 340B-acquired biosimilars, which is discussed in section V.B.2.c. Of the CY 2019 OPPS/ASC final rule with comment period, and would continue the policy we finalized in CY 2019 to pay ASP minus 22.5 percent for 340B-acquired drugs and biologicals furnished in nonexcepted off-campus PBDs paid under the PFS. We also proposed to continue the 340B payment adjustment for WAC-priced drugs, which is WAC minus 22.5 percent.

340B-acquired drugs that are priced using AWP would continue to be paid an adjusted amount of 69.46 percent of AWP. Additionally, we proposed to continue to exempt rural sole community hospitals (as described under the regulations at § 412.92 and designated as rural for Medicare purposes), children's hospitals, and PPS-exempt cancer hospitals from the 340B payment adjustment. We stated that these hospitals would continue to report informational modifier “TB” for 340B-acquired drugs, and would continue to be paid ASP+6 percent.

We also explained that we may revisit our policy to exempt rural SCHs, as well as other hospital types, from the 340B drug payment reduction in future rulemaking. We stated that we are also continuing to require hospitals to use modifiers to identify 340B-acquired drugs. We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through 59370) for a full discussion and rationale for the CY 2018 policies and the requirements for use of modifiers “JG” and “TB”.

We explained that we believe maintaining the current policy of paying ASP minus 22.5 percent for 340B drugs is appropriate given the July 31, 2020 D.C. Circuit decision, which reversed the district court's decision and held that the interpretation of the statute was reasonable when the 340B drug payment policy was implemented in CY 2018. We noted that any changes to the current 340B payment policy would be adopted through public notice and comment rulemaking.

While we believe the Secretary has discretion to propose a payment rate for 340B drugs based on the 2020 survey results, we explained that we also continue to believe that the current payment rate of ASP minus 22.5 percent represents the minimum discount that 340B covered entities receive, which more closely aligns the payment rate with the resources expended by 340B hospitals to acquire such drugs compared to a payment rate of ASP+6 percent, while also recognizing the intent of the 340B program to allow covered entities, including eligible hospitals, to stretch scarce resources in ways that enable hospitals to continue providing access to care for Medicare beneficiaries and other patients. Additionall