2023-24293: Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Payment for Intensive Outpatient Services in Hospital Outpatient Departments, Community Mental Health Centers, Rural Health Clinics, Federally Qualified Health Centers, and Opioid Treatment Programs; Hospital Price Transparency; Changes to Community Mental Health Centers Conditions of Participation, Changes to the Inpatient Prospective Payment System Medicare Code Editor; Rural Emergency Hospital Conditions of Participation Technical Correction

1. Electronically. You may submit electronic comments on this

regulation to https://www.regulations.gov. Follow the ``Submit a comment'' instructions.

2. By regular mail. You may mail written comments to the following

address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1786-FC, P.O. Box 8010, Baltimore, MD 21244-8010. 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-1786-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.

G. Public Comments Received on the CY 2023 OPPS/ASC Final Rule

With Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights B. Conversion Factor Update C. Proposed Wage Index Changes D. Proposed Statewide Average Default Cost-to-Charge Ratios (CCRs)

E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs)

and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2024

H. Proposed Calculation of an Adjusted Medicare Payment From the

National Unadjusted Medicare Payment I. Proposed Beneficiary Copayments B. Conversion Factor Update C. Wage Index Changes [[Page 81542]]

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 2024 F. Payment Adjustment for Certain Cancer Hospitals for CY 2024 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. Universal Low Volume APC Policy for Clinical and Brachytherapy APCs E. APC-Specific Policies IV. OPPS Payment for Devices A. Pass-Through Payment for Devices B. Device-Intensive Procedures V. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals

C. Requirement in the Physician Fee Schedule CY 2024 Proposed

Rule for HOPDs and ASCs To Report Discarded Amounts of Certain Single-Dose or Single-Use Package Drugs

G. Modifications Related to Medicare Coverage for Opioid Use

Disorder (OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)

B. Payment for Intensive Cardiac Rehabilitation Services (ICR)

Provided by an Off-Campus, Non-Excepted Provider Based Department (PBD) of a Hospital C. OPPS Payment for Specimen Collection for COVID-19 Tests D. Remote Services E. OPPS Payment for Dental Services F. Use of Claims and Cost Report Data for CY 2024 OPPS and ASC Payment System Ratesetting Due to the PHE

G. Comment Solicitation on Payment for High-Cost Drugs Provided

by Indian Health Service and Tribal Facilities

H. Technical Changes to Hospital Billing for Marriage and Family

Therapist Services and Mental Health Counselor Services XI. CY 2024 OPPS Payment Status and Comment Indicators A. CY 2024 OPPS Payment Status Indicator Definitions B. CY 2024 Comment Indicator Definitions XII. MedPAC Recommendations A. OPPS Payment Rates Update B. Medicare Safety Net Index C. ASC Cost Data XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System A. Background, Legislative History, Statutory Authority, and Prior Rulemaking for the ASC Payment System B. ASC Treatment of New and Revised Codes C. Payment Policies Under the ASC Payment System D. Additions to ASC Covered Surgical Procedures and Covered Ancillary Services Lists

E. ASC Payment Policy for Non-Opioid Post-Surgery Pain

Management Drugs, Biologicals, and Devices

F. Comment Solicitation on Access to Non-Opioid Treatments for

Pain Relief Under the OPPS and ASC Payment System

F. Payment Reduction for Hospitals That Fail To Meet the

Hospital OQR Program Requirements for the CY 2024 Payment Determination

B. Summary of the CMHC Proposed Provisions, Public Comments and

Responses to Comments XVIII. Updates to Requirements for Hospitals To Make Public a List of Their Standard Charges

D. Comments on CMS' Request for Information Related to Consumer-

Friendly Displays and Alignment With Transparency in Coverage and No Surprises Act XIX. Changes to the Inpatient Prospective Payment System Medicare Code Editor XX. Technical Edits for REH Conditions of Participation and Critical Access Hospital (CAH) CoP Updates XXI. Rural Emergency Hospitals (REHs): Payment for Rural Emergency Hospitals (REHs) A. Background on Rural Emergency Hospitals (REHs) B. REH Payment Methodology C. Background on the IHS Outpatient All-Inclusive Rate (AIR) for Tribal and IHS Hospitals

E. Exclusion of REHs From the OPPS

XXII. Request for Public Comments on Potential Payment Under the IPPS and OPPS for Establishing and Maintaining Access to Essential Medicines

C. Potential Separate Payment Under IPPS and OPPS for

Establishing and Maintaining Access to a Buffer Stock of Essential Medicines D. Comment Solicitation on Additional Considerations E. Overview of Comments Received F. Next Steps XXIII. Files Available to the Public via the Internet XXIV. Collection of Information Requirements

A. ICRs Related to Proposed Intensive Outpatient Physician

Certification Requirements [[Page 81543]] B. ICRs Related to the Hospital OQR Program C. ICRs Related to the ASCQR Program D. ICRs Related to the REHQR Program E. ICRs Related to Conditions of Participation (CoPs): Admission, Initial Evaluation, Comprehensive Assessment, and Discharge or Transfer of the Client (Sec. 485.914)

F. ICR's Related to Conditions of Participation (CoPs):

Treatment Team, Person-Centered Active Treatment Plan, and Coordination of Services (Sec. 485.916)

G. ICR's Related to Conditions of Participation (CoPs):

Organization, Governance, Administration of Services, Partial Hospitalization Services (Sec. 485.918)

H. ICRs Related to Hospital Price Transparency

XXV. Response to Comments XXVI. Economic Analyses

B. Overall Impact of Provisions of This Final Rule With Comment

Period C. Detailed Economic Analyses D. Regulatory Review Cost Estimation E. Regulatory Flexibility Act (RFA) Analysis F. Unfunded Mandates Reform Act Analysis G. Federalism H. Conclusion I. Congressional Review

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, 2024. 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 of the Department of Health and Human Services (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 practice, 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, and Rural Emergency Hospital Quality Reporting (REHQR) Program. In addition, this final rule with comment period establishes payment for intensive outpatient services under Medicare, beginning January 1, 2024. This final rule with comment period also updates and refines the requirements for hospitals to make public their standard charges and CMS enforcement of hospital price transparency regulations. In addition, we are finalizing changes to the CMHC CoPs to provide requirements for furnishing IOP services. In addition, we are finalizing changes to the CMHC CoPs to provide requirements for furnishing IOP services, as well as finalizing the proposed personnel qualifications for MHCs and MFTs. We are also finalizing the removal of discussion of the IPPS Medicare Code Editor (MCE) from the annual IPPS rulemakings, beginning with the FY 2025 rulemaking. Finally, we are finalizing a technical correction to the Rural Emergency Hospital (REH) CoPs under the standard for the designation and certification of REHs.

2. Summary of the Major Provisions

OPPS Update: For 2024, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 3.1 percent. This increase factor is based on the final inpatient hospital market basket percentage increase of 3.3 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS) reduced by a final productivity adjustment of 0.2 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) 2024 will be approximately $88.9 billion, an increase of approximately $6.0 billion compared to estimated CY 2023 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 0.9806 to the OPPS payments and copayments for all applicable services. Data used in CY 2024 OPPS/ASC Ratesetting: To set OPPS and ASC payment rates, we normally use the most updated claims and cost report data available. The best available claims data is the most recent set of data which would be from 2 years prior to the calendar year that is the subject of rulemaking. Cost report data usually lags the claims data by a year and we believe that using the most updated cost report extract available from the Healthcare Cost Report Information System (HCRIS) is appropriate for CY 2024 OPPS ratesetting. Therefore, we are using our typical data process of using the most updated cost reports and claims data available for CY 2024 OPPS ratesetting. Partial Hospitalization Update: For CY 2024, we are finalizing changes to our methodology used to calculate the Community Mental Health Center (CMHC) and hospital-based PHP (HB PHP) geometric mean per diem costs. We also are finalizing changes to expand PHP payment from two APCs to four APCs. Medicare Payment for Intensive Outpatient Programs: Beginning in CY 2024, we are finalizing payment for intensive outpatient program (IOP) services under Medicare. We are finalizing the scope of benefits, physician certification requirements, coding and billing, and payment rates under the IOP benefit. IOP services may be furnished in hospital outpatient departments, community mental health centers (CMHCs), federally qualified health centers (FQHCs), and rural health clinics (RHCs). We also are finalizing payment for intensive outpatient services provided by opioid treatment programs (OTPs) under the existing OTP benefit. Changes to the Inpatient Only (IPO) List: For 2024, we are finalizing our proposal to not remove any services from the IPO list for CY 2024. 340BAcquired Drugs: For CY 2024, we are continuing to apply the default rate, generally average sales price (ASP) plus 6 percent, to 340B acquired drugs and biologicals in this final rule with comment period. Therefore, drugs and biologicals acquired under the 340B program will be paid at the same payment rate as those drugs and biologicals not acquired under the 340B program. Biosimilar Packaging Exception: For CY 2024, we are finalizing our proposal to except biosimilars from the OPPS threshold packaging policy when their reference products are separately paid. However, we are not finalizing that all the biosimilars related to the reference product would be similarly [[Page 81544]] packaged if a reference product's per-day cost falls below the threshold packaging policy. Finalizing to Pay IHS and Tribal Hospitals that Convert to a Rural Emergency Hospital (REH) Under the IHS All-Inclusive Rate (AIR): For CY 2024, we are finalizing that IHS and tribal hospitals that convert to an REH be paid for hospital outpatient services under the same all-inclusive rate that would otherwise apply if these services were performed by an IHS or tribal hospital that is not an REH. We also are finalizing that IHS and tribal hospitals that convert to an REH would receive the REH monthly facility payment consistent with how this payment is applied to REHs that are not tribally or IHS operated. Device Pass-Through Payment Applications: For CY 2024, we received six applications for device pass-through payments. We sought public comment on these applications and are approving four applicants for device pass-through payment status in this final rule with comment period. Cancer Hospital Payment Adjustment: For CY 2024, 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. Section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point. In light of the public health emergency (PHE) impact on claims and cost data used to calculate the target PCR, we have maintained the CY 2021 target PCR of 0.89 through CYs 2022 and 2023. In this final rule with comment period, we are finalizing to reduce the target PCR by 1.0 percentage point each calendar year until the target PCR equals the PCR of non- cancer hospitals using the most recently submitted or settled cost report data. For CY 2024, we are finalizing a target PCR of 0.88 to determine the CY 2024 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 0.88 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. In light of the impact of the COVID-19 PHE on healthcare utilization, we are finalizing to extend our policy to update the ASC payment system using the hospital market basket update an additional 2 years--through CYs 2024 and 2025. Using the hospital market basket methodology, for CY 2024, we are increasing payment rates under the ASC payment system by 3.1 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 3.3 percent reduced by a productivity adjustment of 0.2 percentage point. Based on this final update, we estimate that total payments to ASCs (including beneficiary cost sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2024 will be approximately $7.1 billion, an increase of approximately $207 million compared to estimated CY 2023 Medicare payments. Changes to the List of ASC Covered Surgical Procedures: For CY 2024, we are adding 37 surgical procedures, including total shoulder arthroplasty (TSA) (Healthcare Common Procedure Coding System (HCPCS) code 23472), to the ASC covered procedures list (CPL) based upon existing criteria at Sec. 416.166. Hospital Outpatient Quality Reporting (OQR) Program: We are finalizing our proposals to: (1) modify the COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure beginning with the CY 2024 reporting period/CY 2026 payment determination; (2) modify the Cataracts: Improvement in Patient's Visual Function Within 90 Days Following Cataract Surgery measure beginning with the voluntary CY 2024 reporting period; (3) modify the Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients measure beginning with the CY 2024 reporting period/CY 2026 payment determination; and (4) amend multiple codified regulations to replace references to ``QualityNet'' with ``CMS-designated information system'' or ``CMS website,'' and to make other conforming technical edits, to accommodate recent and future systems requirements and mitigate confusion for program participants. We are finalizing with modification the proposal to adopt the Risk- Standardized Patient-Reported Outcome-Based Performance Measure (PRO- PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in the HOPD Setting (THA/TKA PRO-PM) with voluntary reporting beginning with the CY 2025 reporting period through the CY 2027 reporting period followed by mandatory reporting beginning one year later than proposed with the CY 2028 reporting period/CY 2031 payment determination. We are finalizing with modification the proposal to adopt the Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults (Hospital Level--Outpatient) measure with voluntary reporting beginning with the CY 2025 reporting period and mandatory reporting beginning 1 year later than proposed with the CY 2027 reporting period/CY 2029 payment determination. We are not finalizing our proposal to remove the Left without Being Seen measure. We are also not finalizing our proposal to re-adopt with modification the Hospital Outpatient Volume Data on Selected Outpatient Procedures measure. We also requested public comment on: (1) patient and workforce safety (including sepsis); (2) behavioral health (including suicide prevention); and (3) telehealth as potential future measurement topic areas in the Hospital OQR Program. Ambulatory Surgical Center Quality Reporting (ASCQR) Program: We are finalizing our proposals to: (1) modify the COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure beginning with the CY 2024 Reporting Period/CY 2026 payment determination; (2) modify the Cataracts: Improvement in Patient's Visual Function Within 90 Days Following Cataract Surgery measure beginning with the voluntary CY 2024 reporting period; (3) modify the Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients measure beginning with the CY 2024 reporting period/CY 2026 payment determination; and (4) amend multiple codified regulations to replace references to ``QualityNet'' with ``CMS-designated information system'' or ``CMS website,'' and to make other conforming technical edits, to accommodate recent and future systems requirements and mitigate confusion for program participants. We are finalizing with modification the proposal to adopt the Risk- Standardized Patient-Reported Outcome-Based Performance Measure (PRO- PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in the ASC Setting (THA/TKA PRO-PM) with voluntary reporting beginning with the CY 2025 reporting period through the CY 2027 reporting period followed by mandatory reporting beginning 1 year later than proposed with the CY 2028 reporting period/CY 2031 payment determination. [[Page 81545]] We are not finalizing our proposal to re-adopt with modification the ASC Facility Volume Data on Selected ASC Surgical Procedures measure. Rural Emergency Hospital Quality Reporting (REHQR) Program: We are finalizing our proposals to: (1) codify the statutory authority for the REHQR Program; (2) adopt and codify policies related to measure retention and measure modification; (3) adopt one chart- abstracted measure, Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients, beginning with the CY 2024 reporting period; (4) adopt three claims-based measures, Abdomen Computed Tomography (CT)--Use of Contrast Material, Facility 7-Day Risk-Standardized Hospital Visit Rate After Outpatient Colonoscopy, and Risk-Standardized Hospital Visits Within 7 Days After Hospital Outpatient Surgery, beginning with the CY 2024 reporting period; (5) establish related reporting requirements beginning with the CY 2024 reporting period; (6) adopt and codify policies related to public reporting of data; (7) codify foundational requirements related to REHQR Program participation; (8) adopt and codify policies related to the form, manner, and timing of data submission under the REHQR Program; (9) adopt and codify a review and corrections period for submitted data; and (10) adopt and codify an Extraordinary Circumstances Exception (ECE) process for data submission requirements. We are finalizing with modification the proposal to adopt and codify a policy related to immediate measure removal such that it is referred to more appropriately as immediate measure suspension. In such a case, a quality measure considered by CMS to have potential patient safety concerns will be immediately suspended from the program and then addressed in the next appropriate rulemaking cycle. We also requested comment on the following potential measures and approaches for implementing quality reporting under the REHQR Program: (1) electronic clinical quality measures (eCQMs); (2) care coordination measures; and (3) a tiered approach for quality measure reporting. Mental Health Services Furnished Remotely by Hospital Staff to Beneficiaries in Their Homes: For CY 2024, we are finalizing technical refinements to the existing coding for remote mental health services to allow for multiple units to be billed daily. We also are finalizing to create a new, untimed code to describe group psychotherapy. Finally, we are delaying the in-person visit requirements until January 1, 2025. OPPS Payment for Dental Services: For CY 2024, we are assigning over 240 HCPCS codes describing dental services to various clinical APCs to align with Medicare payment provisions regarding dental services adopted in the CY 2024 Physician Fee Schedule (PFS) final rule (87 FR 69404; November 18, 2023). Comment Solicitation on Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities: We sought comment on whether Medicare should pay separately for high-cost drugs provided by IHS and tribal facilities. Commenters supported establishing a payment methodology that would allow IHS and Tribal healthcare facilities to receive separate payment outside of the IHS outpatient hospital all-inclusive rate (AIR) for oncology drugs and services whose costs exceed the AIR. Their preferred approach was to treat the AIR payment amount as a payment threshold and to have a separate payment for a drug if the cost of the drug was more than the AIR. Commenters also wanted CMS to ensure the integrity of the AIR if separate payment is established for high-cost oncology drugs and other high-cost services. We will consider these comments for future rulemaking. Supervision by Nurse Practitioners, Physician Assistants and Clinical Nurse Specialists of Cardiac, Intensive Cardiac and Pulmonary Rehabilitation Services Furnished to Outpatients: For CY 2024, to comply with section 51008 of the Bipartisan Budget Act of 2018 and to ensure consistency with final revisions to Sec. Sec. 410.47 and 410.49 in the CY 2024 PFS final rule, published in the Federal Register of November 16, 2023 (FR Doc. 2023-24184), we are revising Sec. 410.27(a)(1)(iv)(B)(1) to expand the practitioners who may supervise cardiac rehabilitation (CR), intensive cardiac rehabilitation (ICR), and pulmonary rehabilitation (PR) services to include nurse practitioners (NPs), physician assistants (PAs), and clinical nurse specialists (CNSs). We also are allowing for the direct supervision requirement for CR, ICR, and PR to include virtual presence of the physician through audio-video real-time communications technology (excluding audio-only) through December 31, 2024, and extend this policy to the nonphysician practitioners, that is NPs, PAs, and CNSs, who are eligible to supervise these services in CY 2024. Payment for Intensive Cardiac Rehabilitation Services (ICR) Provided by an Off-Campus, Non-Excepted Provider Based Department (PBD) of a Hospital: For CY 2024, to address an unintended reimbursement disparity created by application of the off-campus, non- excepted payment rate to intensive cardiac rehabilitation services (ICR), we are paying for ICR services furnished by an off-campus, non- excepted PBD of a hospital at 100 percent of the OPPS rate, which is the amount paid for these services under the PFS. Final Updates to Requirements for Hospitals to Make Public a List of Their Standard Charges: We are finalizing our proposals to revise several of our HPT requirements in order to improve our monitoring and enforcement capabilities by improving access to, and the usability of, hospital standard charge information; reducing the compliance burden on hospitals by providing CMS templates and technical guidance for display of hospital standard charge information; aligning, where feasible, certain HPT requirements and processes with requirements and processes we have implemented in the Transparency in Coverage (TIC) initiative; and making other modifications to our monitoring and enforcement capabilities that will, among other things, increase its transparency to the public. Together, we believe these activities will enhance existing and future enforcement actions while also providing the public with more meaningful standard charge information that can be used to improve the accuracy of consumer- friendly price estimator tools. Specifically, we are finalizing: (1) definitions of several terms; (2) a requirement that hospitals make a good faith effort to ensure standard charge information is true, accurate, and complete, and to include a statement affirming this in the machine-readable file (MRF); (3) new data elements that hospitals must include in their MRFs, as well a requirement that hospitals encode standard charge information in a CMS template layout; (4) phased implementation timeline applicable to the new requirements we are finalizing in this final rule with comment period; (5) a requirement that hospitals to include a .txt file in the root folder that includes a direct link to the MRF and a link in the footer on its website that links directly to the publicly available web page that hosts the link to the MRF; and (6) improvements to our enforcement process by updating our methods to assess hospital compliance, requiring hospitals to acknowledge receipt of warning notices, working with health system officials to address noncompliance issues in one or more hospitals that are part of a health system, and publicizing more [[Page 81546]] information about CMS enforcement activities related to individual hospital compliance. Specifically, and as discussed in more detail in section XVIII of this final rule with comment, we are finalizing that the effective date of the changes to the hospital price transparency regulations at 45 CFR part 180 will be January 1, 2024. However, the regulation text will specify later dates by which hospitals must be in compliance with some of these new requirements, and we will begin enforcing those requirements on those specified dates. We believe this phased implementation approach is necessary to provide hospitals time to collect and encode the required standard charge information completely and accurately. Community Mental Health Center (CMHC) Conditions of Participation (CoPs): The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-238) established in section 4124 coverage of intensive outpatient (IOP) services in CMHCs. The legislation extended Medicare coverage and payment of IOP services furnished by a CMHC beginning January 1, 2024, adding to the existing coverage and payment for partial hospitalization (PHP) services in CMHCs. Section 4121 of the CAA, 2023 also established a new Medicare benefit category for services furnished and directly billed by Mental Health Counselors (MHCs) and Marriage and Family Therapists (MFTs). To implement these provisions of section 4121 of the CAA, 2023, CMS is finalizing, as proposed, to modify the requirements for CMHCs to include IOP services throughout the CoPs. We are also finalizing our proposal to modify the CMHC CoPs for personnel qualifications to add a definition of marriage and family therapists and revise the current definition of mental health counselors. In addition, we are adding MFTs and MHCs to the list of practitioners who can lead interdisciplinary team meetings when deemed necessary. Changes to the Inpatient Prospective Payment System Medicare Code Editor: Consistent with the process that is used for updates to the Integrated Outpatient Code Editor (I/OCE) and other Medicare claims editing systems, we are finalizing our proposal to remove discussion of the IPPS Medicare Code Editor (MCE) from the annual IPPS rulemakings, beginning with the FY 2025 rulemaking, and to generally address future changes or updates to the MCE through instruction to the MACs. Request for Public Comments on Potential Payment under the IPPS and OPPS for Establishing and Maintaining Access to Essential Medicines: We sought comment on potential separate payment under the IPPS for establishing and maintaining access to a buffer stock of essential medicines. Rural Emergency Hospital (REH) Conditions of Participation (CoPs): On November 23, 2022, we published a final rule for the REH health and safety standards, which was included in the ``Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Acquisition; Rural Emergency Hospitals: Payment Policies, Conditions of Participation, Provider Enrollment, Physician Self-Referral; New Service Category for Hospital Outpatient Department Prior Authorization Process; Overall Hospital Quality Star Rating; COVID-19'' final rule with comment period (87 FR 71748). We are finalizing as proposed a technical correction to the REH CoPs under the standard for the designation and certification of REHs.

3. Summary of Costs and Benefits

In section XXVI of this final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the changes will have on affected entities and beneficiaries. Key estimated impacts are described below. a. Impacts of All OPPS Changes Table 168 in section XXVI.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 2024 compared to all estimated OPPS payments in CY 2023. We estimate that the final policies in this final rule would result in a 3.2 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2024, including beneficiary cost-sharing, to the approximately 3,600 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) will increase by approximately $2.2 billion compared to CY 2023 payments, excluding our estimated changes in enrollment, utilization, and case-mix. We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs have historically only been paid for partial hospitalization services under the OPPS. Beginning in CY 2024, they will also be paid for new intensive outpatient program (IOP) 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 9.2 percent increase in CY 2024 payments to CMHCs relative to their CY 2023 payments. b. Impacts of the Updated Wage Indexes We estimate that our update of the wage indexes based on the fiscal year (FY) 2024 IPPS final rule wage indexes will result in a 0.0 percent increase for urban hospitals under the OPPS and a 1.2 percent increase for rural hospitals. These wage indexes include the continued implementation of the Office of Management and Budget (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 We are implementing the reduction to the cancer hospital payment adjustment for CY 2024 required by section 1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st Century Cures Act, and the final target payment-to-cost ratio (PCR) for CY 2024 cancer hospital adjustment of 0.89. However, as section 16002 requires that we reduce the target PCR by 0.01, that brings the final target PCR to 0.88 instead. This is 0.01 less than the target PCR of 0.89 from CY 2021 through CY 2023, which was previously held at the pre-PHE target. d. Impacts of the OPD Fee Schedule Increase Factor For the CY 2024 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 3.1 percent and applying that increase factor to the conversion factor for CY 2024. 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 3.2 percent and that rural hospitals will experience an increase in payments of 4.2 percent. Classifying hospitals by teaching status, we estimate non-teaching hospitals will experience an increase in payments of 3.9 percent, minor teaching hospitals will experience an increase in payments of 3.5 percent, and major teaching hospitals will experience an increase in payments of 2.4 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership will experience an increase of 3.2 percent in payments, while hospitals with government ownership will experience an increase of 2.8 percent in payments. We estimate that hospitals with proprietary ownership will experience an increase of 4.6 percent in payments. [[Page 81547]] e. Impacts of the Final 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 2024 payment rates, compared to estimated CY 2023 payment rates, generally ranges between a decrease of 11 percent and an increase of 8 percent, depending on the service, with some exceptions. We estimate the impact of applying the final inpatient hospital market basket update to ASC payment rates will increase payments by $207 million under the ASC payment system in CY 2024. We note that an increase based on the Consumer Price Index for all urban consumers (CPI-U) update would be 2.5 percent and would increase payments by $174 million under the ASC payment system in CY 2024. This increase would have been based on a projected CPI-U update of 2.9 percent minus a multifactor productivity adjustment required by the Affordable Care Act of 0.4 percentage point. f. Impacts of Hospital Price Transparency The policies we are finalizing to enhance automated access to hospital MRFs and aggregation and use of MRF data are estimated to increase burden on hospitals, including a one-time mean of $2,787 per hospital, and a total national cost of $19,784,539 ($2,787 x 7,098 hospitals). The cost estimate reflects estimated costs ranging from $1,274 and $4,181 per hospital, and a total national cost ranging from $9,040,620 to $29,676,809. As discussed in detail in section XXVI of this final rule with comment period, we believe that the benefits to the public (and to hospitals themselves) outweigh the burden imposed on hospitals.

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. 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 Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020; the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on December 27, 2020; the Inflation Reduction Act, 2022 (Pub. L. 117-169), enacted on August 16, 2022; and Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-238), enacted December 29, 2022. 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. [[Page 81548]] 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 Sec. 419.20(b) of the regulations, we specify the types of hospitals that are 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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.

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). 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 [[Page 81549]] 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 21, 2022, 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 21, 2023. 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). CMS is currently accepting nominations at: https://mearis.cms.gov. 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 21, 2023, 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 section, and the FACA database at https://facadatabase.gov.

F. Public Comments Received on the CY 2024 OPPS/ASC Proposed Rule

We received approximately 3,777 timely pieces of correspondence on the CY 2024 OPPS/ASC proposed rule that appeared in the Federal Register on July 31, 2023 (88 FR 49552 through 49921), from individuals, elected officials, providers and suppliers, practitioners, manufacturers and advocacy groups. We provide summaries of the public comments, and our responses are set forth in the various sections of this final rule with comment period under the appropriate headings. We note that we received some public comments that were outside the scope of the CY 2024 OPPS/ASC proposed rule. Out-of-scope-public comments are not addressed in this CY 2024 OPPS/ASC final rule with comment period.

G. Public Comments Received on the CY 2023 OPPS/ASC Final Rule With

Comment Period We received approximately 12 timely pieces of correspondence on the CY 2023 OPPS/ASC final rule with comment period that appeared in the Federal Register on November 23, 2022 (87 FR 71748).

1. Database Construction

a. Database Source and Methodology Section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the relative payment weights for Ambulatory Payment Classifications (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 2024 OPPS, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2024, and before January 1, 2025 (CY 2024), using the same basic methodology that we described in the CY 2023 OPPS/ASC final rule with comment period (86 FR 63466), using CY 2022 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 2024, 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, 2022, and before January 1, 2023, 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 2024 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 2024 OPPS/ASC proposed rule on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. Addendum N to the CY 2024 OPPS/ASC proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices) included the proposed list of bypass codes for CY 2024. The proposed list of bypass codes contains codes that are reported on claims for services in CY 2022 and, therefore, includes codes that were in effect in CY 2022 and used for billing. We retained these deleted bypass codes on the proposed CY 2024 bypass list because these codes existed in CY 2022 and were covered OPD services in that period, and CY 2022 claims data were used to calculate proposed CY 2024 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more ``pseudo'' single procedure claims for ratesetting purposes. ``Overlap bypass codes'' that are members of the proposed multiple imaging composite APCs are identified by asterisks (*) in the third column of Addendum N to the CY 2024 OPPS/ASC proposed rule. HCPCS codes that we proposed to add for CY 2024 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 [[Page 81550]] proposed bypass code process. We are finalizing as proposed the ``pseudo'' single claims process and the final CY 2024 list of bypass 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 2024, we used approximately 103 million final actions 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, 2022, and before January 1, 2023. 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: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. b. Calculation and Use of Cost-to-Charge Ratios (CCRs) For CY 2024, 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 proposed CY 2024 APC payment rates are based, we calculated hospital- specific departmental CCRs for each hospital for which we had CY 2022 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2021. For the proposed CY 2024 OPPS payment rates, we used the set of claims processed during CY 2022. 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 2022 (the year of claims data we used to calculate the proposed CY 2024 OPPS payment rates) and updates to the National Uniform Billing Committee (NUBC) 2022 Data specifications Manual. That crosswalk is available for review and continuous comment on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. In the CY 2023 OPPS/ASC final rule with comment period, a few commenters recommended that we revise our revenue code-to-cost center crosswalk to provide consistency with the NUBC definitions and to improve the accuracy of cost data for OPPS ratesetting with respect to chimeric antigen receptor therapy (CAR-T) administration services (87 FR 71758). In that final rule with comment period, we stated that we intend to explore the implications of this recommendation further and may consider such changes in future rulemaking. In the CY 2024 OPPS/ASC proposed rule, we explored the impacts of the commenters' recommendation from the CY 2023 OPPS/ASC final rule with comment period that we assign primary cost centers to certain CAR-T-related revenue codes that were not previously assigned cost centers. Specifically, in the CY 2024 OPPS/ASC proposed rule, we explored the commenter's recommendations regarding changes to the revenue code-to-cost center crosswalk, which included: Revising revenue codes 0870 (Cell/Gene Therapy General Classification) and 0871 (Cell Collection) to be mapped to a primary cost center of 9000 (Clinic); Revising revenue codes 0872 (Specialized Biologic Processing and Storage--Prior to Transport) and 0873 (Storage and Processing After Receipt of Cells from Manufacturer) to be mapped to a primary cost center of 3350 (Hematology); Revising revenue codes 0874 (Infusion of Modified Cells) and 0875 (Injection of Modified Cells) to be mapped to a primary cost center of 6400 (Intravenous Therapy); and Revising revenue codes 0891 (Special Processed Drugs--FDA Approved Cell Therapy) and 0892 (Special Processed Drugs--FDA Approved Gene Therapy) to be mapped to a primary cost center of 7300 (Drugs Charged to Patients). After reviewing the impact of these crosswalk revisions on our proposed CY 2024 OPPS APC geometric mean costs, we only observed an increase in the geometric mean cost of CPT code 0540T (Chimeric antigen receptor t-cell (car-t) therapy; car-t cell administration, autologous)--from $148.31 to $294.17 for the CY 2024 OPPS/ASC proposed rule--as a result of the revenue code for CPT code 0540T being assigned to a new cost center and the new corresponding cost-to-charge ratio. We did not observe any significant impact on APC geometric mean costs or payment as a result of these revisions. We stated that we believe these revisions would provide greater consistency with the NUBC definitions (which already adopted these revenue code revisions) and more accurately account for the costs of CAR-T administration services under the OPPS. Therefore, for CY 2024 and subsequent years, we proposed to adopt the aforementioned revisions to revenue codes 0870, 0871 0872, 0873, 0874, 0875, 0891, and 0892 in our revenue code-to-cost center crosswalk. We solicited comment on our proposed changes to the revenue code- to-cost center crosswalk for CY 2024. In accordance with our longstanding policy, similar to our finalized policy for CY 2023 OPPS ratesetting, we proposed to calculate CCRs for the standard cost centers--cost centers with a predefined label--and nonstandard cost centers--cost centers defined by a hospital--accepted by the electronic cost report database. In general, the most detailed level at which we calculate CCRs is the hospital- specific departmental level. While we generally view the use of additional cost data as improving our OPPS ratesetting process, we have historically not included cost report lines for certain nonstandard cost centers in the OPPS ratesetting database construction when hospitals have reported these nonstandard cost centers on cost report lines that do not correspond to the cost center number. We believe it is important to further investigate the accuracy of these cost report data before including such data in the ratesetting process. Further, we believe it is appropriate to gather additional information from the public as well before including them in OPPS ratesetting. For CY 2024, we proposed not to include the nonstandard cost centers reported in this way in the OPPS ratesetting database construction. Comment: Two commenters supported our proposed revenue code-to-cost center crosswalk changes associated with CAR-T. Response: We appreciate the commenters' support for our proposal. Comment: A few commenters listed a number of concerns regarding the revenue code-to-cost center crosswalk mappings associated with revenue codes 0815 and 0819. They noted that the 2552-96 revenue code-to-cost center crosswalk does not show the cost center used for ratesetting. They also noted that the current 2552-10 revenue code-to-cost center crosswalk includes a primary cost center mapping to 112.50 and no secondary or tertiary cost centers listed. A commenter requested more detail around the cost reporting and billing patterns related to revenue codes 0815 and cost centers 112.50 and 7700. A commenter believed that the mapping [[Page 81551]] for revenue code 0819 to cost center 8600 was incongruent with CMS instructions for cost reporting periods after 2017 to no longer include donor costs in cost center 8600. They believed that this mapping should not apply. Commenters stated that cost center 7700 represented a logical alternative mapping for revenue code 0815 but noted that it did not represent all donor search and cell acquisition costs because those costs were only recently calculated through Worksheet D-6 of the Medicare cost report and that data would not be available for ratesetting for several years. They also suggested that CMS review the use of the hospital overall ancillary CCR until more accurate information could be obtained in both cost center 7700 and Worksheet D- 6. A commenter also requested that CMS ensure that the Worksheet D-6 is available for all cost reporting periods beginning on or after October 1, 2020. Response: As discussed in this section and briefly in the claims accounting narrative available online, the revenue code-to-cost center crosswalk is a hierarchy that attempts to apply departmental cost center CCRs to estimate costs from charges. Where no specific CCR is available, the provider's overall ancillary CCR will be applied. There may be significant differences in the cost reports used in our ratesetting process, based on providers' charging structures as well as cost reporting periods. As a result, the revenue code-to-cost center crosswalk is designed to accommodate that flexibility by selecting what we believe to be the most accurate CCRs available. The Medicare cost report form 2552-10 was implemented for cost reporting periods on or after May 1, 2010. Providers have familiarity with cost reporting using this form. While there may be a range in the cost reporting periods available, all cost report data used in ratesetting for the CY 2024 OPPS final rule with comment period are based on the Medicare cost report form 2552-10. The 2552-96 crosswalk is largely provided for historical reference purposes and not because it is actively used in our ratesetting process. However, we can consider removing those worksheets from the form if they no longer serve a purpose for hospitals. With regard to the primary mapping of revenue code 0815 to cost center 112.50 (Stem Cell Acquisition) indicated in the display version of the revenue code-to-cost center crosswalk, the cost center was inadvertently listed as a primary mapping. The primary and sole mapping for revenue code 0815 in our current ratesetting process is to cost center 7700 (Allogeneic Stem Cell Acquisition). In cases where that cost center CCR is not available in a provider's cost report but services are billed using revenue code 0815, the overall ancillary CCR would instead be applied to reduce charges to estimated cost. We note that there are no cost reports we are including in the CY 2024 OPPS ratesetting process that report cost and charges under 112.50, and there are no revenue code-to-cost center crosswalk mappings to that cost center. As discussed earlier, the cost reports used in OPPS ratesetting can have varying cost reporting periods and varying cost reporting structures. Therefore, the cost center CCR mappings included in the revenue code-to-cost center crosswalk are designed to accommodate this variability. For revenue code 0815 (Allogeneic Stem Cell Acquisition Services), most of the providers billing using this revenue code are also cost reporting with cost center 7700. Within our ratesetting process, the CCRs for cost center 7700 are significantly higher than those for the overall ancillary CCR; and we continue to believe that the preference should be to use the cost center 7700 CCR unless it is not otherwise available. We note that billing using revenue code 0819 (Organ Acquisition: Other donor) is extremely limited, with only a single line observed within our data. We believe that having the flexibility to use its cost center 8600 mapping where this revenue code is billed is more reflective than the overall ancillary CCR. However, we will monitor the data to determine if this cost center CCR mapping continues to remain appropriate in the future. While we do not have any specific changes at this time associated with the data from Worksheet D-6 of the Medicare cost report form, we will review the data as they become available. Based on that review, we will consider inclusion of that data and integration into the cost estimation process, if appropriate. We appreciate commenter input as we consider possible changes in the OPPS ratesetting process we use to estimate service costs. We also note that the cost reporting software has already been updated to allow for submission of data regarding these acquisition costs for cost reporting periods on or after October 1, 2020. After consideration of the public comments we received, we are finalizing the proposed crosswalk, including the proposed changes associated with CAR-T. In addition, we are making the change to our display copy of the revenue code-to-cost center crosswalk to assign cost center 77 as the primary cost center CCR mapping for revenue code 0815.

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 2024. The Hospital OPPS page on the CMS website on which this final rule with comment period is posted (https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient) provides an accounting of claims used in the development of the final 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, https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient, 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 International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnosis codes and revenue code payment amounts. This file is derived from the CY 2022 claims that are used to calculate the final payment rates for this 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 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 2024 shown in Addenda A and B to this final rule with comment period (which are available via the internet on [[Page 81552]] the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). We refer readers to section II.A.4 of this final rule with comment period for a discussion of the 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 items and 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 2024 OPPS, we proposed to continue to remove claim lines with modifier ``PN'' from the ratesetting process. For details of the claims accounting process used in final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for this final rule with comment period on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. We did not receive any public comments on our proposal and are finalizing our proposal to continue to remove claim lines reported with modifier ``PN'' from the ratesetting process. 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. In the CY 2024 OPPS/ASC proposed rule, we proposed to continue to establish payment rates for blood and blood products using our blood- specific CCR methodology (88 FR 49562), 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. To address the differences in CCRs and to better reflect hospitals' costs, our methodology simulates 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 and applies this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports. We proposed to calculate the costs upon which the proposed 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 takes into account the unique charging and cost accounting structure of each hospital, it 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. This methodology also yields more accurate estimated costs for these products and results in payment rates for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and for these blood products in general. We refer readers to Addendum B to this final rule with comment period (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices) for the final CY 2024 payment rates for blood and blood products (which are generally identified with status indicator ``R''). For a more detailed discussion of payments for blood and blood products through APCs, we refer readers to: the CY 2005 OPPS proposed rule (69 FR 50524 and 50525) for a more comprehensive discussion of the blood-specific CCR methodology; the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807 through 66810) for a detailed history of the OPPS payment for blood and blood products; and the CY 2015 OPPS/ASC final rule with comment period (79 FR 66795 and 66796) for additional discussion of 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. Comment: Two commenters discussed our payment policies for blood and blood products. One commenter expressed concerns about lower payment rates for some blood products in CY 2024 as compared to CY 2023 and encouraged CMS to work with interested parties in the blood products and blood services community to address this issue. The other commenter expressed their support for separate payment for blood and blood products in the OPPS for most services. Response: We appreciate the input from the commenters, and we will keep these issues in mind in future rulemaking. After consideration of the public comments we received, we are adopting as final our proposals for blood and blood products using our blood-specific CCR methodology without modification. Refer to Addendum B to this final rule with comment period (which is available via the internet on the CMS website) for the final CY 2024 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--cancer treatment through solid source radioactive implants--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 and 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 [[Page 81553]] for hospital outpatient services. This payment methodology results in more consistent, predictable, and equitable payment amounts per source across hospitals by averaging the extremely high and low values, in contrast to payment based on hospitals' charges adjusted to costs. We believe that the OPPS methodology, as opposed 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 2024, except where otherwise indicated, we proposed to use the costs derived from CY 2022 claims data to set the proposed CY 2024 payment rates for brachytherapy sources because CY 2022 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 2024 OPPS. We proposed this methodology for CY 2024 and subsequent years. With the exception of the proposed payment rate for brachytherapy source C2645 (Brachytherapy planar source, palladium-103, per square millimeter) and the proposed payment rates for low-volume brachytherapy APCs discussed in section III.D of the CY 2024 OPPS/ASC proposed rule (88 FR 49563), 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 2024 OPPS/ASC proposed rule (88 FR 49563). We also proposed for CY 2024 and subsequent years 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). For CY 2024 and subsequent years, 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, per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). For CY 2024 and subsequent years, 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 2024 payment rates for brachytherapy sources are included on Addendum B to the CY 2024 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 mm\2\ for the brachytherapy source's APC--APC 2648 (Brachytx planar, p-103). For CY 2019, in the absence of sufficient claims data, we continued to establish a payment rate for C2645 at $4.69 per mm\2\ for APC 2648 (Brachytx planar, p- 103). Our CY 2018 claims data available for the CY 2020 OPPS/ASC final rule with comment period (84 FR 61142) included two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per mm\2\. In response to comments from interested parties, we agreed 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 mm\2\ 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 mm\2\ 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, CY 2022, and CY 2023 OPPS/ASC final rules with comment period (85 FR 85879 and 85880 and 86 FR 63469 and 87 FR 71760 and 71761), 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 mm\2\ for HCPCS code C2645 for CY 2021, for CY 2022, and for CY 2023. We reviewed CY 2022 claims data available for the CY 2024 OPPS/ASC proposed rule, and we observed three claims that reported HCPCS code C2645. Each claim reported one unit of HCPCS code C2645 and the geometric mean unit cost from these three claims was $168.67. We stated we were unable to use these claims for ratesetting purposes given the reporting of only one unit per claim and the high geometric mean cost. Therefore, we proposed to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2023 payment rate of $4.69 per mm\2\ for HCPCS code C2645, which we proposed to assign to APC 2648 (Brachytx planar, p-103), for CY 2024. For this final rule with comment period, we once again reviewed CY 2022 claims data available; and we observed the same three claims that reported HCPCS code C2645. Additionally, for CY 2022 and subsequent calendar years, we adopted a Universal Low Volume APC policy for clinical and brachytherapy APCs. As discussed in further detail in section X.C of the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743 through 63747), we adopted this policy to mitigate wide variation in payment rates that occur from year to year for APCs with low utilization. Such volatility in payment rates from year to year can result in even lower utilization and potential barriers to access. Brachytherapy APCs that have fewer than 100 single claims used for ratesetting purposes are designated as Low Volume APCs unless an alternative payment rate is applied, such as the use of our equitable adjustment authority under section 1833(t)(2)(E) of the Act in the case of APC 2648 (Brachytx planar, p-103), for which HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) is the only code assigned as discussed previously in this section. For CY 2024, we proposed to designate five brachytherapy APCs as Low Volume APCs as these APCs meet [[Page 81554]] our criteria to be designated as a Low Volume APC. For more information on the brachytherapy APCs we proposed to designate as Low Volume APCs, see section III.D of the CY 2024 OPPS/ASC proposed rule (88 FR 49628) and section III.D of this final rule with comment period. We invited interested parties to submit recommendations for new codes to describe new brachytherapy sources. We will continue to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis. We did not receive any public comments on either proposal described. We are finalizing, without modification, to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2023 payment rate of $4.69 per mm\2\ for HCPCS code C2645, which is assigned to APC 2648 (Brachytx planar, p-103), for CY 2024. Similarly, for CY 2024 and subsequent years we are finalizing, without modification, our proposal to continue to set the payment rates for other brachytherapy sources that are not otherwise assigned to designated Low Volume APCs for CY 2024 using our established prospective payment methodology. The final CY 2024 payment rates for brachytherapy sources are included in Addendum B to this final rule with comment period (which is available via the internet on the CMS website) and are identified with status indicator ``U.'' We continue to invite interested parties 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 2024 (1) Background In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a comprehensive payment policy that packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. The policy was finalized in CY 2014, but the effective date was delayed until January 1, 2015, to allow additional time for further analysis, opportunity for public comment, and systems preparation. The comprehensive APC (C-APC) policy was implemented effective January 1, 2015, with modifications and clarifications in response to public comments received regarding specific provisions of the C-APC policy (79 FR 66798 through 66810). A C-APC is defined as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. We established C-APCs as a category broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 (79 FR 66809 and 66810). We have gradually added new C-APCs since the policy was implemented beginning in CY 2015, with the number of C-APCs now totaling 72 (80 FR 70332; 81 FR 79584 and 79585; 83 FR 58844 through 58846; 84 FR 61158 through 61166; 85 FR 85885; 86 FR 63474; and 87 FR 71769). 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. One example of a primary service would be a partial mastectomy and an example of a secondary service packaged into that primary service would be a radiation therapy procedure. 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 and 66801). A list of services excluded from the C-APC policy is included in Addendum J to this final rule with comment period (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). If a service does not appear on this list of excluded services, payment for it will be packaged into the payment for the primary C-APC service when it appears on an outpatient claim with a primary C-APC service. The C-APC policy payment methodology set forth in the CY 2014 OPPS/ ASC final rule with comment period 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,'' \1\ 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. --------------------------------------------------------------------------- \1\ Status indicator ``J1'' denotes Hospital Part B Services Paid Through a Comprehensive APC. Further information can be found in CY 2024 Addendum D1. --------------------------------------------------------------------------- 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.'' \2\ Specifically, we make a payment through C- APC 8011 for a claim that: --------------------------------------------------------------------------- \2\ Status indicator ``J2'' denotes Hospital Part B Services That May Be Paid Through a Comprehensive APC. Further information can be found in CY 2024 Addendum D1. --------------------------------------------------------------------------- [[Page 81555]] 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 (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, such as speech language pathology, 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, 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.\3\ --------------------------------------------------------------------------- \3\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf. --------------------------------------------------------------------------- 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 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 [[Page 81556]] process results in initial assignments of claims for the primary services assigned to status indicator ``J1'' to the most appropriate C- APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity. Complexity Adjustments. We use complexity adjustments to provide increased payment for certain comprehensive services. We apply a complexity adjustment by promoting qualifying paired ``J1'' service code combinations or paired code combinations of ``J1'' services and certain add-on codes (as described further below) from the originating C-APC (the C-APC to which the designated primary service is first assigned) to the next higher paying C-APC in the same clinical family of C-APCs. We apply this type of complexity adjustment when the paired code combination represents a complex, costly form or version of the primary service according to the following criteria: Frequency of 25 or more claims reporting the code combination (frequency threshold); and Violation of the 2 times rule, 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 2024, we 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 2024, along with all the other final complexity adjustments, in Addendum J to this final rule with comment period (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). Addendum J to this final rule with comment period 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 this final rule with comment period 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 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 final 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 will be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to this final rule with comment period allows interested parties the opportunity to better assess the impact associated with the assignment of claims with each of the paired code combinations eligible for a complexity adjustment. Comment: We received support from commenters for a variety of existing and proposed complexity adjustments. Response: We thank the commenters for their support. Comment: Multiple commenters requested that CMS apply a complexity adjustment to additional code combinations. The specific C-APC complexity adjustment code combinations requested by the commenters for CY 2024 are listed in Table 1 below. BILLING CODE 4150-28-P [[Page 81557]] [GRAPHIC] [TIFF OMITTED] TR22NO23.000 [[Page 81558]] [GRAPHIC] [TIFF OMITTED] TR22NO23.001 [[Page 81559]] [GRAPHIC] [TIFF OMITTED] TR22NO23.002 [[Page 81560]] [GRAPHIC] [TIFF OMITTED] TR22NO23.003 BILLING CODE 4150-28-C Response: We reviewed each of the requested code combinations suggested by commenters, listed in Table 1, against our complexity adjustment criteria. The code combination for primary HCPCS code 43270 with secondary HCPCS code 43252 meets our cost and frequency criteria, qualifying for a complexity adjustment for CY 2024. All the remaining code combinations listed failed to meet our cost or frequency criteria and do not qualify for complexity adjustments for CY 2024. Additionally, the code combinations for primary HCPCS codes, C9600, 92928, 92943, and 92920 with secondary HCPCS code C1761 would not qualify for complexity adjustments for CY 2024 as the Coronary IVL device, described by C1761, is still on transitional pass-through status through June 2024. Addendum J to this final rule with comment period includes the cost statistics for each code combination that was evaluated for a complexity adjustment. Comment: Commenters requested that CMS modify, waive, 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 were concerned that C-APC packaging and a lack of complexity adjustment would limit access to procedures. Specifically, some commenters expressed concern that CMS's methodology for determining complexity adjustments is unnecessarily restrictive, particularly the 25-claim threshold, and suggested that CMS eliminate the 25-claim threshold and implement a complexity adjustment whenever a code pair exceeds the cost threshold. Other commenter suggestions included considering an amount halfway between the standard APC and the complexity-adjusted APC as a cost threshold, as well as a implementing a sliding scale approach for procedures with high frequency that do not meet the cost criteria. Commenters were concerned that when multiple ``J1'' primary services are reported on a claim, along with an add-on service, the add-on service is not evaluated for a complexity adjustment. Commenters cited examples where significant claims volume from add-on services may not be incorporated into the complexity adjustment evaluation. Commenters also reiterated requests to broaden the complexity adjustment policy and allow clusters of procedures, consisting of a ``J1'' code pair and multiple other associated add-on codes used in combination with that ``J1'' code pair, to qualify for complexity adjustments. Commenters stated that there are certain complex procedures that include numerous add-on codes and this approach would allow more accurate reflection of medical practice when multiple procedures are performed together. They noted that lack of additional payment for these code combinations can present a financial challenge for the providers who perform these more resource intensive services. In addition, commenters requested that CMS expand its review of procedure combinations to include ``J1'' and expiring transitional pass-through codes to allow facilities to continue to provide these services after pass-through expiration. Response: We appreciate these comments. 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. 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 we explained 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, add-on codes, 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 for future rulemaking. After consideration of the public comments we received, we are finalizing the C-APC complexity adjustment policy for CY 2024 as proposed. We are also finalizing the proposed complexity adjustments, with the addition of one new code combination suggested by commenters, that meet our complexity adjustment criteria. (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 them. 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 [[Page 81561]] 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 beginning in CY 2020, 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 (84 FR 61167). (3) Exclusion of Drugs and Biologicals Described by HCPCS Code C9399 (Unclassified Drugs or Biologicals) From the C-APC Policy Section 1833(t)(15) of the Act, as added by section 621(a)(1) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173), provides for payment under the OPPS for new drugs and biologicals until HCPCS codes are assigned. Under this provision, we are required to make payment for a covered outpatient drug or biological that is furnished as part of covered outpatient department services but for which a HCPCS code has not yet been assigned in an amount equal to 95 percent of average wholesale price (AWP) for the drug or biological. In the CY 2005 OPPS/ASC final rule with comment period (69 FR 65805), we implemented section 1833(t)(15) of the Act by instructing hospitals to bill for a drug or biological that is newly approved by the Food and Drug Administration (FDA) and that does not yet have a HCPCS code by reporting the National Drug Code (NDC) for the product along with the newly created HCPCS code C9399 (Unclassified drugs or biologicals). We explained that when HCPCS code C9399 appears on a claim, the Outpatient Code Editor (OCE) suspends the claim for manual pricing by the Medicare Administrative Contractor (MAC). The MAC prices the claim at 95 percent of the drug or biological's AWP, using Red Book or an equivalent recognized compendium, and processes the claim for payment. We emphasized that this approach enables hospitals to bill and receive payment for a new drug or biological concurrent with its approval by the FDA. The hospital does not have to wait for the next quarterly release or for approval of a product specific HCPCS code to receive payment for a newly approved drug or biological or to resubmit claims for adjustment. We instructed that hospitals would discontinue billing HCPCS code C9399 and the NDC upon implementation of a product specific HCPCS code, status indicator, and appropriate payment amount with the next quarterly update. We also note that HCPCS code C9399 is paid in a similar manner in the ASC setting, as 42 CFR 416.171(b) outlines that certain drugs and biologicals for which separate payment is allowed under the OPPS are considered covered ancillary services for which the OPPS payment rate, which is 95 percent of AWP for HCPCS code C9399, applies. Since the implementation of the C-APC policy in 2015, payment for drugs and biologicals described by HCPCS code C9399 had been included in the C-APC payment when these products appear on a claim with a primary C-APC service. Packaging payment for these drugs and biologicals that appear on a hospital outpatient claim with a primary C-APC service is consistent with our C-APC packaging policy under which we make payment for all items and services, including all non-pass-through drugs, reported on the hospital outpatient claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service and representing components of a complete comprehensive service, with certain limited exceptions (78 FR 74869). It was our position that the total payment for the C-APC with which payment for a drug or biological described by HCPCS code C9399 is packaged includes payment for the drug or biological at 95 percent of its AWP. However, we determined that in certain instances, drugs and biologicals described by HCPCS code C9399 are not being paid at 95 percent of their AWPs when payment for them is packaged with payment for a primary C-APC service. In order to ensure payment for new drugs, biologicals, and radiopharmaceuticals described by HCPCS code C9399 at 95 percent of their AWP, for CY 2023 and subsequent years, we finalized our proposal to exclude any drug, biological, or radiopharmaceutical described by HCPCS code C9399 from packaging when the drug, biological, or radiopharmaceutical is included on a claim with a ``J1'' service, which is the status indicator assigned to a C-APC, and a claim with a ``J2'' service, which is the status indicator assigned to comprehensive observation services. See Addendum J for the CY 2024 C-APC payment policy exclusions. In the CY 2023 OPPS/ASC final rule with comment period, we finalized the proposal in section XI. ``CY 2023 OPPS Payment Status and Comment Indicators'' of the CY 2024 OPPS/ASC proposed rule to add a new definition to status indicator ``A'' to include unclassified drugs and biologicals that are reportable with HCPCS code C9399 (87 FR 72051). The definition, found in Addendum D1, would ensure the MAC prices claims for drugs, biologicals, or radiopharmaceuticals billed with HCPCS code C9399 at 95 percent of the drug or biological's AWP and pays separately for the drug, biological, or radiopharmaceutical under the OPPS when it appears on the same claim as a primary C-APC service. (4) Additional C-APCs for CY 2024 For CY 2024 and subsequent years, 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 2024, but we did propose to create two new APCs that will both be C-APCs. Thus, we [[Page 81562]] proposed that the number of C-APCs for CY 2024 would be 72 C-APCs. We proposed to split the Level 2 Intraocular APC (APC 5492) into two and assign the higher cost procedures previously within this APC to a new Level 3 Intraocular APC (APC 5493). The previous Level 3, Level 4, and Level 5 Intraocular APCs (APCs 5493, 5494, and 5495) would be renamed the Level 4, Level 5, and Level 6 Intraocular APC (APCs 5494, 5495, and 5496), respectively. We refer readers to section III.E of the CY 2024 OPPS/ASC proposed rule (88 FR 49552) for more information regarding the proposal. We also proposed to add a new Level 2 Abdominal/Peritoneal/Biliary and Related Procedures APC (APC 5342) to improve clinical and resource homogeneity in the Level 1 Abdominal/Peritoneal/Biliary and Related Procedures APC (APC 5341). Comment: Commenters supported the creation of the two new proposed C-APCs, C-APCs 5342 (Level 2 Abdominal/Peritoneal/Biliary and Related Procedures APC) and 5496 (Level 6 Intraocular APC) for CY 2024, based on resource cost and clinical characteristics. Response: We appreciate commenters' support. Comment: Several commenters expressed concerns with the C-APC methodology for surgical insertion codes for brachytherapy treatment, noting that these concerns impact beneficiary access to brachytherapy in the HOPD setting. These commenters stated that the C-APC methodology lacks the appropriate charge capture mechanisms to accurately reflect the services associated with the C-APC, that there are significant variations in the clinical practice and billing patterns in the hospital claims data used for ratesetting, and that the C-APC rates do not accurately or fully reflect the services and costs associated with the primary procedure. Commenters urged the agency to explore alternatives, including that CMS discontinue the C-APC policy for all brachytherapy insertion codes, implementing a modified C-APC methodology to allow separate payment for specified preparation and planning codes, or moving brachytherapy for cervical cancer treatment to C-APC 5416 (Level 6 Gynecologic Procedures). Response: We appreciate the comments on the C-APC methodology. However, we believe that the current C-APC methodology is appropriately applied to these surgical procedures and is accurately capturing costs, particularly as the brachytherapy sources used for these procedures are excluded from C-APC packaging and are separately payable. This methodology also enables hospitals to manage their resources with maximum flexibility by monitoring and adjusting the volume and efficiency of services themselves. We reviewed the request by commenters to move brachytherapy procedures, CPT code 57155 and CPT code 58346, to a higher paying C- APC. For CPT code 57155, the claims data in the two times rule evaluation show that this code is being paid at the appropriate level in C-APC 5415 (Level 5 Gynecologic Procedures). For CPT code 53846, given that this code has fewer than 100 claims, it does not meet the significance threshold for the two times rule evaluation, and we do not believe the few claims available provide an accurate reflection of the service's cost sufficient to move this procedure to a higher C-APC. We will continue to examine these concerns and will determine if any modifications to this policy are warranted in future rulemaking. Comment: Several commenters requested that CMS unpackage and pay separately for all status indicator ``K'' drugs from C-APCs due to certain instances of high-cost drugs and biologics, such as CAR-T, being paid through C-APC 8011 and potentially impacting beneficiary access to high-cost therapies. Response: We thank the commenters for their comments. We will take the issue of C-APCs and payments for high-cost drugs into consideration for future rulemaking. After consideration of the public comments we received, we are finalizing as proposed C-APCs 5342 (Level 2 Abdominal/Peritoneal/ Biliary and Related Procedures APC) and 5496 (Level 6 Intraocular APC) for CY 2024. Table 2 lists the final C-APCs for CY 2024. All C-APCs are displayed in Addendum J to this CY 2024 OPPS/ASC final rule with comment period (which is available via the internet on the CMS website). Addendum J to this final rule with comment period also contains all the data related to the C-APC payment policy methodology, including the list of complexity adjustments and other information for CY 2024. BILLING CODE 4150-28-P [[Page 81563]] [GRAPHIC] [TIFF OMITTED] TR22NO23.004 [[Page 81564]] [GRAPHIC] [TIFF OMITTED] TR22NO23.005 [[Page 81565]] [GRAPHIC] [TIFF OMITTED] TR22NO23.006 BILLING CODE 4150-28-C 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 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, 59242, and 59246 through 52950) for more recent background. (1) Mental Health Services Composite APC For CY 2024, 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 (88 FR 49572). 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 2018 OPPS/ASC proposed rule and final rule with comment period (82 FR 33580, 33581, 59246, and 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 Integrated OCE (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 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. 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 per diem payment rate for 3 partial hospitalization services provided in a [[Page 81566]] day by a hospital, those specified mental health services would be paid through composite APC 8010 for CY 2024. 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 a partial hospitalization per diem payment rate for 3 partial hospitalization services furnished in a day by a hospital, and that the hospital continue to be paid the proposed payment rate for composite APC 8010. We explained that while APC 5863 is no longer the maximum partial hospitalization per diem payment rate for a hospital, due to proposed APC 5864, which is 4 or more hospital- based PHP services per day, discussed in section VIII.B of this CY 2024 OPPS/ASC proposed rule, we believed it was still appropriate to apply the APC 5863 per diem payment amount as the upper limit on payment per day for individual OPPS mental health services. This is because the daily mental health cap would not be expected to reach a level of intensity beyond 3 services per day, as described by APC 5863. The PHP is meant to be the most intensive mental health services program, requiring inpatient care if PHP is not received. We would not anticipate more than three services per patient on a given day, as patients needing additional services in 1 day would potentially require an inpatient admission, as described by APC 5863. Thus, setting the mental health cap at APC 5863, rather than the 4 service per day APC 5864, is more consistent with our longstanding policy, which has been for the 3 service per day APC. We note that the proposed CY 2024 payment amount for APC 5863 would be comparable to the CY 2023 payment amount for APC 5863, which is the PHP APC used to set the daily mental health cap for CY 2023. However, as we have historically set the daily mental health cap for composite APC 8010 at the maximum partial hospitalization per diem payment rate for a hospital, we also solicited comment on whether the next higher-level APC, proposed APC 5864, which is for four hospital- based PHP services per day, would be appropriate to use as the daily mental health cap. Comment: One commenter supported CMS's alternative proposal to use APC 5864 as the basis for setting the daily mental health cap for APC 8010. They stated that as CMS is introducing APC 5864 to capture four or more hospital-based PHP services per day, as opposed to three services in APC 5863, the mental health cap should be increased to match this new code. Response: We thank the commenter for their comment. Although setting the daily mental health cap at APC 5863 would be comparable to the CY 2023 payment for APC 5863, we recognize that raising the cap allows hospitals increased flexibility to determine the level of care necessary for their patient. Additionally, setting the mental health cap at APC 5864 aligns with 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. Based upon the comment we received as well as the fact that we have historically set the daily mental health cap for composite APC 8010 at the maximum partial hospitalization per diem payment rate for a hospital, we are finalizing APC 5864, which is for four hospital-based PHP services per day, as the daily mental health cap. Comment: Several commenters recommended that CMS change the status indicator for two neuropsychological testing codes (HCPCS codes 96133 and 96137) from SI = N to SI = Q3 to allow separate payment for additional hours of testing on the same date or increase the payment rate for the primary testing procedure code. The commenters noted that the payment rate for Composite APC 8010, which is capped at the maximum per diem partial hospitalization rate, is lower than the individual HCPCS code APC payment rates and does not provide sufficient payment for these procedures. Response: After reviewing this issue, we believe the Composite APC methodology is being appropriately applied in this case, as packaging multiple testing services performed on a single date of service creates incentives for hospitals to provide these services in the most cost- efficient manner. 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 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 2024. In addition, we are finalizing setting the payment rate for composite APC 8010 for CY 2024 at the same payment rate that we set for APC 5864, 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) ultrasound; (2) computed tomography (CT) and computed tomographic angiography (CTA); and (3) magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes subject to the multiple imaging composite policy and their respective families are listed in Table 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 ultrasound procedures included under the policy do not involve contrast, both CT/ CTA and MRI/MRA scans can be provided either with or without contrast. The five multiple imaging composite APCs established in CY 2009 are: APC 8004 (Ultrasound Composite); APC 8005 (CT and CTA without Contrast Composite); APC 8006 (CT and CTA with Contrast Composite); APC 8007 (MRI and MRA without Contrast Composite); and APC 8008 (MRI and MRA with Contrast Composite). We define the single imaging session for the ``with contrast'' composite APCs as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the ``with contrast'' composite APC. [[Page 81567]] 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 2024, 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 2024, except where otherwise indicated, we proposed to use the costs derived from CY 2022 claims data to set the proposed CY 2024 payment rates. Therefore, for CY 2024, the payment rates for the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) were based on proposed geometric mean costs calculated from CY 2022 claims available for the CY 2024 OPPS/ASC proposed rule that qualify for composite payment under the current policy (that is, those claims reporting more than one procedure within the same family on a single date of service). To calculate the proposed geometric mean costs, we used the same methodology that we used to calculate the 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), were identified by asterisks in Addendum N to the CY 2024 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 2024 OPPS/ASC proposed rule (88 FR 49561). For this CY 2024 OPPS/ASC final rule, we were able to identify approximately 0.99 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 45.0 percent of all eligible claims, to calculate the final CY 2024 geometric mean costs for the multiple imaging composite APCs. Table 2 of this CY 2024 OPPS/ASC final rule lists the final HCPCS codes that would be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC final geometric mean costs for CY 2024. We did not receive any public comments on this policy. 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 2024. BILLING CODE 4150-28-P [[Page 81568]] [GRAPHIC] [TIFF OMITTED] TR22NO23.007 [[Page 81569]] [GRAPHIC] [TIFF OMITTED] TR22NO23.008 [[Page 81570]] [GRAPHIC] [TIFF OMITTED] TR22NO23.009 [[Page 81571]] [GRAPHIC] [TIFF OMITTED] TR22NO23.010 [[Page 81572]] [GRAPHIC] [TIFF OMITTED] TR22NO23.011 BILLING CODE 4150-28-P

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 [[Page 81573]] 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. 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. b. Policy and Comment Solicitation on Packaged Items and Services For CY 2024, 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 2024, we did not propose any changes to the overall packaging policy discussed above. 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. While we did not propose any changes to the overall packaging policy, we solicited comments on potential modifications to our packaging policy as described in the following sections. Comment: Several commenters expressed concerns that packaging policies may create access barriers and incentives for stinting on care. They urged CMS to do a comprehensive evaluation and study all OPPS packaging policies to determine whether they reduce patients' access to appropriate therapies and quality of care. They also requested CMS provide continued opportunity for interested parties to weigh in to help advance patient access to new innovations. One commenter suggested that packaging can only create the types of efficiency incentives CMS intends when there are certain principles in place, recommending CMS only package items/services that truly have substitutes, take cost and volume into consideration when determining whether to package an item/service, and package the charges for packaged items and/or services in a more logical and deliberate manner. Another commenter clarified that potential access issues cannot always be identified by a decline in volume of packaged services; access issues also occur when patients do not receive the most clinically appropriate drug, biological, or service because of how packaging policies prioritize minimizing costs. Commenters felt that these issues are increasingly important as health care moves toward more personalized medicine and new innovations. Commenters stated that, when CMS defines a packaging threshold, manufacturers may select a price to ensure that the costs exceed the packaging threshold to market the fact that separate CMS payment is available. Commenter felt this conflicted with CMS' goal to provide hospitals with incentives to choose the most clinically viable and cost-effective option for their patients. Response: We appreciate the comments on this issue, and we will take these suggestions into consideration for future rulemaking. After consideration of the public comments we received, we are finalizing our overall OPPS packing policy, as proposed, for CY 2024. c. Comment Solicitation on Access to Non-Opioid Treatments for Pain Relief The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328), was signed into law on December 29, 2022. Section 4135(a) and (b) of the CAA, 2023, titled ``Access to Non-Opioid Treatments for Pain Relief,'' amended sections 1833(t)(16) and 1833(i) of the Act, respectively, to provide for temporary additional payments for non- opioid treatments for pain relief (as that term is defined in section 1833(t)(16)(G)(i) of the Act). In particular, section 1833(t)(16)(G) of the Act provides that with respect to a non-opioid treatment for pain relief furnished on or after January 1, 2025, and before January 1, 2028, the Secretary shall not package payment for the non-opioid treatment for pain relief into payment for a covered OPD service (or group of services) and shall make an additional payment for the non- opioid treatment for pain relief as specified in clause (ii) of that section. Clauses (ii) and (iii) of section 1833(t)(16)(G) of the Act provide for the amount of additional payment and set a limitation on that amount, respectively. Because the additional payments are required to begin on January 1, 2025, we previously stated that we will include our proposals to implement the CAA, 2023, section 4135 amendments in the CY 2025 OPPS/ASC proposed rule. We discussed section 4135 of CAA, 2023, at length in section XIII.F of the CY 2024 OPPS/ASC proposed rule (88 FR 49767), and we solicited comment on numerous aspects of this future policy. While we expect this policy to operate similarly in the ASC and HOPD settings, we welcomed comment on whether there are any HOPD-specific payment issues we should take into consideration as we plan to implement section 1833(t)(16)(G) of the Act for CY 2025. We thank commenters for their detailed comments regarding the implementation of section 4135 of the CAA, 2023. We received a range of comments regarding potential qualifying drugs, biologicals, devices, and services, as well as evidence requirements for medical devices, payment amounts, and payment limitations. See section XIII.F of this final rule with comment period for a brief summary of the comments received. We intend to take these comments into consideration as we develop our proposals for the CY 2025 OPPS/ASC proposed rule. d. Comment Solicitation on OPPS Packaging Policy for Diagnostic Radiopharmaceuticals (i) Background on OPPS Packaging Policy for Diagnostic Radiopharmaceuticals Under the OPPS, we package several categories of nonpass-through drugs, biologicals, and radiopharmaceuticals, regardless of the cost of the products. As the products are packaged according to [[Page 81574]] the policies in Sec. 419.2(b), we refer to these packaged drugs, biologicals, and radiopharmaceuticals as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals. In particular, under Sec. 419.2(b)(15), payment for drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure is packaged with the payment for the related procedure or service. Packaging costs into a single aggregate payment for a service, encounter, or episode of care is a fundamental principle that distinguishes a prospective payment system from a fee schedule. In general, packaging the costs of supportive items and services into the payment for the primary procedure or service with which they are associated encourages hospital efficiencies and enables hospitals to manage their resources with maximum flexibility. Diagnostic radiopharmaceuticals, which include contrast agents, stress agents, and other products, are one specific type of product that is policy packaged under the category described by Sec. 419.2(b)(15). Since we implemented this policy in CY 2008, interested parties have raised concerns regarding policy packaging of diagnostic radiopharmaceuticals. In previous rulemaking (87 FR 71962 and 71963), commenters recommended that CMS always pay separately for diagnostic radiopharmaceuticals paid under the OPPS, not just when the products have pass-through payment status. Many of these commenters mentioned that pass-through payment status helps the diffusion of new diagnostic radiopharmaceuticals into the market. However, commenters believe the packaged payment rate is often inadequate after pass-through status expires, especially in cases where the diagnostic radiopharmaceutical is high-cost and has low utilization. CMS has previously heard from interested parties regarding alternative payment methodologies, such as subjecting diagnostic radiopharmaceuticals to the drug packaging threshold and creating separate APC payments for diagnostic radiopharmaceuticals with a per- day cost greater than $500. Interested parties have also recommended that we analyze our nuclear medicine APC structure and consider establishing additional nuclear medicine APCs to more accurately reflect the costs of diagnostic radiopharmaceuticals. Historically, commenters opposed incorporating the cost of diagnostic radiopharmaceuticals into the associated nuclear medicine APC as the nuclear medicine APCs are sometimes paid at a lower rate than the payment rate for the diagnostic radiopharmaceutical itself when it has pass-through payment status (87 FR 71962 and 71963). Importantly, commenters historically have also been concerned that packaging payment for precision diagnostic radiopharmaceuticals in the outpatient setting creates barriers to beneficiary access for safety net hospitals serving a high proportion of Medicare beneficiaries and hospitals serving underserved communities (87 FR 71962 and 71963). Commenters specified that certain populations, such as those with Alzheimer's disease, depend on the use of certain high-cost diagnostic radiopharmaceuticals. Commenters discussed difficulties enrolling hospitals in clinical studies due to OPPS packaging policies. Commenters also suggested that CMS pay separately under the OPPS specifically for radiopharmaceuticals that are used for Alzheimer's disease. Additionally, commenters have 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. Many of these comments and our responses have been discussed in rulemaking since the policy to package diagnostic radiopharmaceuticals was adopted. We refer readers to the CY 2023 OPPS/ASC final rule with comment period (87 FR 71962 and 71963) for the most recent discussion of this subject. As stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49577), 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. Accordingly, the payment for the radiopharmaceuticals should be reflected within the payment for the primary procedure. We note that ratesetting uses the geometric mean of reported procedure costs based on data submitted to CMS from all hospitals paid under the OPPS to set the payment rate for the service. 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 are 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. As CMS has reiterated over the years, we believe these packaging policies are inherent principles of the OPPS and are essential to a prospective payment system. We are also committed to ensuring beneficiary access to diagnostic radiopharmaceuticals while also ensuring the availability of new and innovative diagnostic tools for Medicare beneficiaries. Therefore, we sought public comments on potential modifications to our packaging policy for diagnostic radiopharmaceuticals in order to ensure equitable payment and continued beneficiary access. Below we include the comment solicitation described in the CY 2024 OPPS/ASC proposed rule (88 FR 49578) followed by a brief summary of the public comments we received. (ii) Comment Solicitation on Potential Issues Caused by Current Payment of Diagnostic Radiopharmaceuticals Under the OPPS As described in the CY 2024 OPPS/ASC proposed rule (88 FR 49578), we solicited comment on how the OPPS packaging policy for diagnostic radiopharmaceuticals has impacted beneficiary access, including whether there are specific patient populations or clinical disease states for whom this issue is especially critical. We sought information on specific cost-prohibitive diagnostic radiopharmaceuticals that commenters believe are superior to alternative diagnostic modalities. We were interested to learn the specific clinical scenarios that exist for which it is only clinically appropriate to use the more expensive diagnostic radiopharmaceutical, rather than a lower cost alternative, as well as what clinical scenarios exist in which the only diagnostic modality is a high-cost radiopharmaceutical. We sought information or evidence that these high-cost diagnostic radiopharmaceuticals have unique clinical value, and access has been negatively impacted by our packaging policy. We also sought information about whether commenters believe these high-cost and low-utilization diagnostic radiopharmaceuticals are being appropriately utilized according to their clinical treatment algorithm, meaning the stepwise procedures generally accepted by the medical community for diagnosis, or clinical practice guidelines. [[Page 81575]] We were also interested in learning more about whether there is a difference in outcomes for patients, or patient quality of care, based on the radiopharmaceutical used as well as whether there is a difference for hospitals, such as in terms of financial outcomes, based on the radiopharmaceutical that used. (iii) Comment Solicitation on New Approaches To Payment of Diagnostic Radiopharmaceuticals Under the OPPS In addition, we solicited comment on the following potential approaches that would enhance beneficiary access, while also maintaining the principles of the outpatient prospective payment system. These approaches included: (1) paying separately for diagnostic radiopharmaceuticals with per-day costs above the OPPS drug packaging threshold of $140; (2) establishing a specific per-day cost threshold that may be greater or less than the OPPS drug packaging threshold; (3) restructuring APCs, including by adding nuclear medicine APCs for services that utilize high-cost diagnostic radiopharmaceuticals; (4) creating specific payment policies for diagnostic radiopharmaceuticals used in clinical trials; and (5) adopting codes that incorporate the disease state being diagnosed or a diagnostic indication of a particular class of diagnostic radiopharmaceuticals. To expand upon the first listed option on which we solicited comments, we specifically sought comments about whether we should use our statutory authority for separately payable drugs, biologicals, and radiopharmaceuticals under 1833(t)(14)(A)(iii)(II) of the Act in order to pay separately for diagnostic radiopharmaceuticals and subject those diagnostic radiopharmaceuticals to the longstanding OPPS drug packaging threshold policy, proposed to be $140 for CY 2023. Or said another way, payment for diagnostic radiopharmaceuticals with per-day costs greater than $140 would not be packaged and would be paid separately based on available average sales price (ASP), wholesale acquisition cost (WAC), or average wholesale price (AWP) data with the applicable add-on. This would be similar to payment for therapeutic radiopharmaceuticals and other drugs and biologicals as discussed in section V.B. of the CY 2024 OPPS/ASC proposed rule. We believe this could be a reasonable first step as this threshold is well understood and known to commenters as therapeutic drugs, biologicals, and radiopharmaceuticals are currently paid separately if they have a calculated per-day cost above this threshold and are not policy-packaged. However, it is also our longstanding belief that diagnostic radiopharmaceuticals should have their payment packaged as they function as supplies during a diagnostic test or procedure and enable the provision of an independent service and are not themselves the primary therapeutic modality. We sought additional information from interested parties on this approach. We note, for CY 2024, the OPPS drug packaging threshold was proposed to be $140. However, based on updated data, we are finalizing a threshold of $135 for CY 2024. For more information on the drug packaging threshold, see section V.B.1.a of this final rule with comment period. Regarding the second listed option, we sought comment on whether to pay separately for a diagnostic radiopharmaceutical with a specific per-day cost threshold that may be greater or less than the OPPS drug packaging threshold. Specifically, we were interested to learn why interested parties believe a threshold-based policy is important as well as interested parties' rationale for creating a threshold that would be different from the OPPS drug packaging threshold. Regarding the third listed option, we have heard from some interested parties that they believe APC restructuring, including adding additional nuclear medicine APCs for services utilizing high- cost diagnostic radiopharmaceuticals, would be appropriate. We sought comment as to how these interested parties specifically envision operationalizing this approach and what advantage this approach would have for beneficiaries, hospitals, and CMS over other options. For the fourth listed option, we recently became aware that some interested parties believe that CMS packaging policies could influence participation of beneficiaries and testing sites in clinical trials, particularly those studying Alzheimer's disease, and were interested to learn more about these concerns. While we believe there could be a multitude of reasons for difficulty in recruiting study sites and beneficiaries for clinical trials, including the COVID-19 PHE, we requested comment as to whether CMS should consider creating payment policies for diagnostic radiopharmaceuticals used in clinical trials. Specifically, we were interested to learn what commenters believe an appropriate payment mechanism would be for these diagnostic radiopharmaceuticals, whether there are certain disease states or categories of trials for which we should target our payment policies, ways in which this policy could help promote equitable recruitment and diverse participation, and the method by which CMS should determine which clinical trial diagnostic radiopharmaceuticals should be subject to this policy. Finally, for approach five, we sought comment on new codes that CMS could adopt that may incorporate the disease state being diagnosed or a diagnostic indication of a particular class of diagnostic radiopharmaceuticals. CMS could create indication-specific coding to reflect the imaging procedure and the target of the imaging procedure. For example, CMS could create a code to represent a positron emission tomography (PET) scan that detects a specific protein. If multiple diagnostic radiopharmaceuticals are available to use during this PET scan to detect this specific protein, then their payment would be packaged into the payment for this newly created code and reflected in the payment for this code. Therefore, if there is a specific clinical indication for which only very costly diagnostic radiopharmaceuticals are available, our data would appropriately reflect their utilization. Alternatively, if there is a specific clinical indication in which a wide variety of diagnostic radiopharmaceuticals can be used, all with varying costs, then our data would reflect this and our payment rates would not incentivize a higher-cost diagnostic radiopharmaceutical when there is a lower-cost, but clinically similar, diagnostic radiopharmaceutical alternative. This coding approach could be coupled with the restructuring of the nuclear medicine APC family. We believe this approach of more granular coding could allow for more specific data to be reported and thus more targeted and appropriate payment rates to be developed. This approach would also help to maintain the principles of a prospective payment system by maintaining current packaging policies as payment for the diagnostic radiopharmaceutical would continue to be packaged into the payment for the procedure in which the diagnostic radiopharmaceutical is used. We also sought additional explanation from interested parties as to why they believe their suggested approach is the best policy approach to ensure beneficiary access to diagnostic radiopharmaceuticals and equitable payment for innovative and effective technologies. We welcomed comment regarding ideas discussed in this section, discussed in prior rulemaking, or new ideas for payment for diagnostic radiopharmaceuticals in the OPPS. [[Page 81576]] Finally, we were interested in hearing from stakeholders how the discussed policy modifications might impact our overarching goal of utilizing packaging policies to better align OPPS policies with those of a prospective payment system rather than a fee schedule. We stated we would also like to know if making any of the policy changes discussed previously could have negative consequences for beneficiaries, such as unintentionally influencing clinical practice decisions, increasing beneficiary cost-sharing obligations, or inadvertently encouraging the use of higher-cost diagnostic radiopharmaceuticals over lower cost, but equally effective, diagnostic options. In the CY 2024 OPPS/ASC proposed rule (88 FR 49578), we noted that depending on the comments received, we may adopt as final one or more alternative payment mechanisms for radiopharmaceuticals for CY 2024. Comment: We received a significant number of comments in response to the comment solicitation on potential issues caused by our current payment policy for diagnostic radiopharmaceuticals under the OPPS and on new approaches to payment for these products. Overall, commenters described clinical scenarios in which they believed CMS' payment policies created the most significant access issues, and accordingly, commenters urged CMS to reform payment policy for diagnostic radiopharmaceuticals to address these concerns. However, there was not a general consensus among commenters as to the most effective way for CMS to reform its OPPS diagnostic radiopharmaceutical payment policy. Commenters expressed concerns regarding the CMS policy to package diagnostic radiopharmaceuticals and the financial burden it has on facilities. These commenters believed radiopharmaceuticals are not supplies but instead are essential elements in driving the procedures themselves. Commenters believe that, for newer, more innovative radiopharmaceuticals, the current OPPS packaging policy has led to a lack of patient access to the technologies after their pass-through status expires, especially if there is no clinical alternative. Commenters also suggested that many of these diagnostic radiopharmaceuticals offer additional precision and improved clinical outcomes compared to predecessor products for a variety of disease states. Commenters also discussed that, in their view, some groups were more disadvantaged than others, such as rural communities and minority groups, from the lack of access. Similarly, some commenters discussed that the impact was more profound on certain disease states, such as neuroendocrine tumors, Alzheimer's disease, Parkinson's disease, Lewy body dementia, epilepsy, brain disorders, thyroid disorders, neuroendocrine tumors, heart disease, and a variety of cancers. Many commenters suggested potential ways to develop a payment policy to address some of these issues. Predominately, most commenters requested that CMS provide separate payment for diagnostic radiopharmaceuticals. However, we received many different suggestions as to the best way to pay separately. Some commenters believed paying separately for all diagnostic radiopharmaceuticals regardless of their per-day cost was the best methodology to avoid encouraging upward price inflation to above a certain threshold. Other commenters thought that applying the existing OPPS per-day cost threshold (finalized to be $135 for CY 2024) to the payment of diagnostic radiopharmaceuticals would be an adequate solution. Others supported a $500 threshold, and many cited the Facilitating Innovative Nuclear Diagnostics Act (FIND Act) of 2023 as their rationale for that number. Some of commenters recommended the OPPS drug packaging threshold but recognized the $500 threshold number may be a more targeted approach relative to the OPPS drug packaging threshold as the higher cost diagnostic radiopharmaceuticals were the most disadvantaged by the OPPS packaging policy in their view. Still others contended the opposite that $500 would be too high a threshold. Many deferred to CMS to pick an appropriate packaging threshold for diagnostic radiopharmaceuticals. Others requested more information to allow them to make a more well-informed comment on this issue. Many commenters requested CMS use the ASP methodology in order to pay for diagnostic radiopharmaceuticals. Similarly, some suggested we pay for diagnostic radiopharmaceuticals similarly to the Physician Fee Schedule methodology and others recommended CMS reassess the pass-through payment methodology. The majority of commenters discussed their views on providing separate payment for diagnostic radiopharmaceuticals, but some commenters also discussed the other aspects of the policy we solicited comment on. Commenters' views were mixed on these aspects. For example, some commenters supported CMS restructuring the nuclear medicine APCs and more specifically, one commenter supported packaging diagnostic radiopharmaceuticals in a new APC. However, other commenters did not believe this was sufficiently targeted enough or that it did not provide the needed granularity, and some thought new APCs would not accurately account for the variable costs of diagnostic radiopharmaceuticals and those yet to be approved. Similarly, many acknowledged that diagnostic radiopharmaceuticals should be paid separately in clinical trials, but that a clinical trial-specific policy would not address the broader issue at hand. Several commenters did recognize the difficulties that some clinical trials that utilize diagnostic radiopharmaceuticals have had in recruiting patients, such as the NEW IDEAS trial. Many commenters did not recommend CMS pursue issuing new HCPCS codes for disease-specific diagnostic radiopharmaceuticals as the process would be too complex, burdensome, lack the required specificity, and require continual updating. Alternatively, at least one commenter indicated that this methodology could have some merit in addressing this issue. This commenter stated that a specific code that incorporates the disease state would provide clinical and scientific specificity, which would enable CMS to collect data to improve care. Many requested CMS create a new policy to be implemented for CY 2024, while others requested that CMS release more information on the per-day threshold and any proposed changes to the payment methodology before finalizing a new payment policy. These commenters acknowledged that reimbursement policy changes are complex and require careful consideration and an evaluation of all relevant factors. Some commenters were concerned with how any changes for CY 2024 could impact the Nuclear Medicine APC rates and requested an opportunity to evaluate and comment on those changes before they become the new policy. Response: We sincerely thank commenters for their interest and engagement on this important issue. We agree this is a complex and important issue and, given the wide array of information presented through the public comment process, we intend to further consider these points and take them into consideration for future notice and comment rulemaking. We welcome ongoing dialogue and engagement from stakeholders regarding suggestions for potential future payment changes, including on any of the five potential approaches included in the original comment solicitation as well as any other potential solutions. [[Page 81577]] Please also see section V of this final rule with comment period, OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals, for additional details on payment for diagnostic radiopharmaceuticals in the OPPS.

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 2023 OPPS/ ASC final rule with comment period (87 FR 71778 through 71780), we applied this policy and calculated the relative payment weights for each APC for CY 2023 that were shown in Addenda A and B of the CY 2023 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 2023 OPPS/ASC final rule with comment period (87 FR 71757 through 71777). For CY 2024, as we did for CY 2023, we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2024 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 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 Evaluation or Assessment and Management (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 2024, as we did for CY 2023, we propose 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 2024, as we did for CY 2023, 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. 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 2024 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 2023 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2024 unscaled relative payment weights. For CY 2023, we multiplied the CY 2023 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2022 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 2024, we proposed to apply the same process using the estimated CY 2024 unscaled relative payment weights rather than scaled relative payment weights. We proposed to calculate the weight scalar by dividing the CY 2023 estimated aggregate weight by the unscaled CY 2024 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/payment/prospective-payment-systems/hospital-outpatient. Click on the link labeled ``Hospital Outpatient Prospective Paymen--Notice of Final Rulemaking with Comment Period (NFRM)'' for 2024, which can be found under the heading ``Hospital Outpatient Regulations and Notices'' and open the claims accounting document link, which is labeled ``2024 NPRM OPPS Claims Accounting (PDF).'' We proposed to compare the estimated unscaled relative payment weights in CY 2024 to the estimated total relative payment weights in CY 2023 using CY 2022 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 2024 unscaled relative payment weights for purposes of budget neutrality. We proposed to adjust the estimated CY 2024 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.4529 to ensure that the proposed CY 2024 relative payment weights are scaled to be budget neutral. The proposed CY 2024 relative payment weights listed in Addenda A and B to the CY 2024 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 2024 OPPS/ASC proposed rule. 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 2024 OPPS/ASC proposed rule) is included in the budget neutrality calculations for the CY 2024 OPPS. We did not receive any public comments on the proposed weight scalar calculation, and we are finalizing our proposal to use the calculation process described in the proposed rule, without modification, for CY 2024. For CY 2024, as we did for CY 2023, we will continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2024 using geometric mean- based APC costs. For CY 2024, as we did for CY 2023, we will assign APC 5012 a relative payment weight of 1.00; and we will 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. To comply with this requirement concerning the APC changes, we will compare the estimated aggregate weight using the CY 2023 scaled relative payment weights to the estimated [[Page 81578]] aggregate weight using the CY 2024 unscaled relative payment weights. Using updated final rule claims data, we are updating the estimated CY 2024 unscaled relative payment weights by multiplying them by a weight scalar of 1.4429 to ensure that the final CY 2024 relative payment weights are scaled to be budget neutral. The final CY 2024 relative payments weights listed in Addenda A and B of this final rule with comment period (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.

1. OPD Fee Schedule Increase Factor

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 2024 IPPS/Long Term Care Hospital (LTCH) PPS proposed rule (88 FR 27004 and 27005), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2022 forecast, the proposed FY 2024 IPPS market basket percentage increase was 3.0 percent. We noted that under our regular process for the CY 2024 OPPS/ASC final rule with comment period, we would use the market basket update for the FY 2024 IPPS/LTCH PPS final rule (88 FR 58640) which would be based on IHS Global, Inc.'s second quarter 2023 forecast of the FY 2024 IPPS market basket percentage increase. We stated that if that forecast is different than the IPPS market basket percentage increase used for the CY 2024 OPPS/ASC proposed rule, the CY 2024 OPPS/ASC final rule with comment period OPD fee schedule increase factor would reflect that updated forecast of the market basket percentage increase. We proposed for CY 2024 an OPD fee schedule increase factor of 2.8 percent for the CY 2024 OPPS (which is the proposed estimate of the hospital inpatient market basket percentage increase of 3.0 percent, less the proposed 0.2 percentage point productivity adjustment). Comment: Many commenters indicated that the proposed CY 2024 OPPS fee schedule increase factor was inadequate because it failed to take into account the fiscal reality currently faced by hospitals due to inflation, operating margins, increased labor costs, and other economic factors. Some of these commenters reiterated concerns included in public comments submitted in response to the FY 2024 IPPS/LTCH PPS proposed rule about what they believed was the inadequacy of the IPPS market basket percentage increase. Commenters explained that because section 1833(t)(3)(C)(iv) requires the OPD fee schedule increase factor for a year to equal the IPPS market basket percentage increase factor applicable under section 1886(b)(3)(B)(iii) to hospital discharges in the fiscal year ending in such year, the same concerns that they articulated about the IPPS market basket apply with respect to the OPPS fee schedule increase factor. Several commenters, in support of their argument that the proposed market basket percentage increase is inadequate, stated that hospitals continue to face significant inflationary pressures. Commenters specifically expressed concern that the proposed OPPS payment update for CY 2024 does not adequately consider the cost growth that hospitals have faced over the last few years, noting cost increases related to workforce (including contract labor), drugs, medical supplies, personal protective equipment (PPE), and capital investment. The commenters stated that the significant inflation over the past several years due to the COVID-19 PHE has not been fully captured by the OPPS payment update. Multiple commenters were concerned that CMS use of time-lagged data did not reflect current inflationary trends and encouraged CMS to use more recent economic data to calculate the market basket increase. Many commenters, in support of their argument that the CY 2024 proposed market basket percentage increase is inadequate, pointed to a February 2022 analysis from the American Hospital Association stating that Medicare only pays 84 percent of hospital costs; and they cited MedPAC's March 2023 report to Congress, which stated that overall Medicare hospital margins were minus 8.2 percent without COVID-19 relief funds in 2021 and were projected to be minus 10 percent in 2023. Several commenters appreciated the proposed payment increase but also agreed with other commenters that the proposed update is inadequate given inflation and labor and supply pressures that hospitals, particularly rural hospitals, have been facing and continue to face. Many commenters had significant concerns that the proposed OPPS payment update does not adequately reflect labor costs. Commenters stated the significant increases in labor expenses over the last couple of years have been largely driven by increased utilization of contract staff (due to workforce shortages) and growth in employee salaries. Two commenters cited their own independent analysis of payroll data done by one of the commenters to calculate the increased cost of labor, which they stated was significantly higher than the annual increases for compensation prices that CMS finalized over the last several years. Given the significant difference between the increased cost of labor versus what CMS estimates using the Bureau of Labor Statistics' Employment Cost Index (ECI), many commenters stated they had significant concerns that CMS's data source for estimating the cost of labor does not capture current market dynamics and underestimates the actual cost of healthcare labor. They cited analysis predicting that nursing staff shortages will continue for the next several years. Specifically, commenters raised concerns about CMS's use of the ECI in the market basket. Commenters stated they believe the Bureau of Labor Statistics' (BLS) ECI does not accurately reflect the shift from salaried employees to contract labor since the ECI does not collect data for contract staff, and thus does not capture extraordinary labor cost growth associated with hospitals' increased reliance on clinicians contracted through staffing agencies in response to supply shortages. Multiple commenters highlighted their belief that a closely related measure--the Employer Costs for Employee Compensation (ECEC)--may be a better and more timely data source for growth in hospital compensation costs compared to the ECI. One commenter claimed that all else being equal, if the hospital ECI growth had matched the hospital ECEC growth, this would have meant an additional three percentage point increase in the IPPS market basket percentage increase over the 2019 to 2022 time period. The commenter noted that, in the FY 2024 IPPS/LTCH PPS final rule (88 FR 59032), CMS rejected the use of the ECEC as an alternative to the ECI as a measure of change in hospital wage costs because it includes both changes in compensation as well as changes in employment. However, the commenter felt there were flaws in both the ECI and the ECEC; and, according to the commenter, the ECEC has, based on a retrospective analysis, better predicted labor costs during this period of high inflation and price instability. Several commenters recommended that CMS [[Page 81579]] use its exceptions and adjustments authority under section 1886(d)(5)(I) of the Act to adopt new or supplemental data sources such as commercial databases on hospital payrolls, to ensure labor costs are adequately reflected in the payment update in the OPPS final rule. One commenter also requested CMS identify more accurate data inputs and use its existing authority to calculate the final rule ``base'' (before additional adjustments) market basket update with data that better reflect the rapidly increasing input prices facing hospitals. The commenter suggested that CMS should consider using the average growth rate in allowable Medicare costs per risk adjusted discharge for IPPS hospitals between FY 2019 and FY 2021 to calculate the CY 2024 final rule market basket update rather than using the growth in the ECI as the price proxy for compensation in the IPPS and OPPS market basket. The commenter requested using Medicare cost report data from Worksheets D-1, Part II, Lines 48 and 49 and S-3, Part 1, Column 13 to determine the Medicare costs per discharge. The commenter stated that this growth rate will capture the increased cost of contract labor, unlike the ECI. Based on their analysis of Medicare cost report data, they found that this methodology would yield an unadjusted market basket update of 4.39 percent for FY 2024 and CY 2024 rather than the 2.8 percent net market basket update proposed by CMS. The commenter also responded to CMS's analysis of using Medicare cost report data to Calculate the market basket increase in the FY 2024 IPPS/LTCH PPS final rule (88 FR 59032). The commenter believes that using the Medicare case mix index to risk adjust the costs per discharge will eliminate any case-mix changes and provide an accurate comparison of the resources used to treat patients. The commenter also believes that because they are measuring changes in costs from FY 2019 to FY 2021 there should be only a minimal impact on service inputs based on changes in technology. Finally, they assert the increase in case mix CMS observes is a direct result of hospitals caring for sicker, more resource-intensive patients as procedures that previously performed in the inpatient setting have become outpatient procedures. The commenter also stated that Medicare margins have declined over the last 20 years and believes this is due to persistently inadequate Medicare market basket updates. They further stated that hospitals' financial situations are so precarious that MedPAC recommended to Congress that it increase IPPS and OPPS payments over what is currently in the law to preserve access. Finally, several commenters also requested that CMS use its exceptions and adjustments authority under section 1886(d)(5)(I) to increase the CY 2024 OPPS hospital market basket update higher than the proposed percentage increase. One commenter urged CMS to review the hospital cost data and the margin on Medicare reimbursement and readjust payment rates based on the new baseline cost of care that includes the results of supply shocks and labor shortages. Two other commenters requested that CMS use its authority to increase the FY 2024 IPPS market basket percentage increase to at least 5 percent, which would result in a CY 2024 OPPS/ASC fee schedule increase factor of the same amount. Response: We acknowledge commenters' concerns, however, as we stated in the CY 2024 OPPS/ASC proposed rule, section 1833(t)(3)(C)(iv) of the Act requires the OPD fee schedule increase factor for a year to equal the IPPS market basket percentage increase factor applicable under section 1886(b)(3)(B)(iii) to hospital discharges in the fiscal year ending in such year. Accordingly, we are unable to adopt a final OPD fee schedule increase factor different than the IPPS market basket percentage increase factor finalized in the FY 2024 IPPS/LTCH PPS final rule. We refer commenters to that final rule for responses regarding the issues commenters raised (88 FR 59032 and 59033).

2. Productivity Adjustment

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 ``productivity adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through 51692), we finalized our methodology for calculating and applying the productivity adjustment. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) publishes the official measures of private nonfarm business productivity for the U.S. economy. We note that previously the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private nonfarm business multifactor productivity. Beginning with the November 18, 2021, release of productivity data, BLS replaced the term multifactor productivity (MFP) with total factor productivity (TFP). BLS noted that this is a change in terminology only and will not affect the data or methodology. As a result of the BLS name change, the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as private nonfarm business total factor productivity. However, as mentioned, the data and methods are unchanged. Please see www.bls.gov for the BLS historical published TFP data. A complete description of IHS Global, Inc.'s (IGI) TFP projection methodology is available on the CMS website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. In addition, we note that beginning with the FY 2022 IPPS/LTCH PPS final rule, we refer to this adjustment as the productivity adjustment rather than the MFP adjustment to more closely track the statutory language in section 1886(b)(3)(B)(xi)(II) of the Act. We note that the adjustment continues to rely on the same underlying data and methodology. In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 27005), the proposed productivity adjustment for FY 2024 was 0.2 percentage point. Therefore, we proposed that the productivity adjustment for the CY 2024 OPPS/ASC would be 0.2 percentage point. We also proposed that if more recent data subsequently became available after the publication of the CY 2024 OPPS/ASC proposed rule (for example, a more recent estimate of the market basket percentage increase and/or the productivity adjustment), we would use such updated data, if appropriate, to determine the CY 2024 market basket update and the productivity 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. 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 [[Page 81580]] proposed for CY 2024 an OPD fee schedule increase factor of 2.8 percent for the CY 2024 OPPS/ASC (which is the proposed estimate of the hospital inpatient market basket percentage increase of 3.0 percent, less the proposed 0.2 percentage point productivity adjustment). Comment: Several commenters expressed concern about the application of the productivity adjustment, stating that the PHE has had unimaginable impacts on hospital productivity. They stated that even before the PHE, the CMS Office of the Actuary (OACT) indicated that hospital productivity will be less than the general economy-wide productivity, which is the measure that is required by law to be used to derive the productivity adjustment. Commenters noted that hospitals are highly labor intensive and the large amounts of staff turnover during the PHE substantially reduced hospital productivity. Given that CMS is required by statute to implement a productivity adjustment to the market basket update, commenters asked the agency to work with Congress to permanently eliminate what they stated is an unjustified reduction to hospital payments. Further, they asked CMS to use its ``exceptions and adjustments'' authority under section 1886(d)(5)(I) of the Act to remove the productivity adjustment for any fiscal year that was covered under PHE determination (i.e., 2020 (0.4 percent), 2021 (0.0 percent), 2022 (0.7 percent), and 2023 (0.3 percent)) from the calculation of the market basket update for FY 2024 and any year thereafter. A few commenters expressed concerns about the proposed productivity adjustment given the extreme and uncertain circumstances under which hospitals and health systems are currently operating and urged CMS to eliminate the productivity cut for FY 2024. Response: While we appreciate the commenters' concerns, section 1833(t)(3)(F)(i) requires that after determining the OPD fee schedule increase factor under subparagraph (C)(iv), the Secretary shall reduce such increase factor by the productivity adjustment described in section 1886(b)(3)(B)(xi) of the Act. As required by statute, the FY 2024 productivity adjustment is derived based on the 10-year moving average growth in economy-wide productivity for the period ending FY 2024. We thank the commenters for their comments. After consideration of the comments received and consistent with our proposal, we are finalizing an OPD fee schedule increase factor of 3.1 percent for CY 2024, which consists of the IPPS market basket increase factor of 3.3 percent less a 0.2 percentage point productivity adjustment.

3. Other Conversion Factor Adjustments

To set the OPPS conversion factor for 2024, we proposed to increase the CY 2023 conversion factor of $85.585 by 2.8 percent. In accordance with section 1833(t)(9)(B) of the Act, we proposed further to adjust the conversion factor for CY 2024 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 0.9974 for wage index changes by comparing proposed total estimated payments from our simulation model using the proposed FY 2024 IPPS wage indexes to those payments using the FY 2023 IPPS wage indexes, as adopted on a calendar year basis for the OPPS. We further proposed to calculate an additional budget neutrality factor of 0.9975 to account for our proposed policy to cap wage index reductions for hospitals at 5 percent on an annual basis. For CY 2024, we proposed to maintain the current rural adjustment policy, as discussed in section II.E of the CY 2024 OPPS/ASC proposed rule. Therefore, the proposed budget neutrality factor for the rural adjustment was 1.0000. We proposed to calculate a CY 2024 budget neutrality adjustment factor for the cancer hospital payment adjustment by transitioning from the target PCR of 0.89 we finalized for CYs 2020 through 2023 (which included the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act) and incrementally reducing the target PCR by an additional 1.0 percentage point for each calendar year, beginning with CY 2024, until the target PCR equals the PCR of non-cancer hospitals calculated using the most recent data minus 1.0 percentage point as required by section 16002(b) of the 21st Century Cures Act. Therefore, we proposed to apply a budget neutrality adjustment factor of 1.0005 to the conversion factor for the cancer hospital payment adjustment. In accordance with section 1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255), we reduce the target PCR by 0.01, which brings the proposed target PCR to 0.88. This is 0.01 less than the target PCR of 0.89 from CY 2021 through CY 2023, which was held at the pre-PHE target. For the CY 2024 OPPS/ASC proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2024 would equal approximately $234.1 million, which represents 0.26 percent of total projected CY 2024 OPPS spending. Therefore, we stated that the proposed conversion factor would be adjusted by the difference between the 0.16 percent estimate of pass-through spending for CY 2023 and the 0.26 percent estimate of proposed pass-through spending for CY 2024, resulting in a proposed decrease to the conversion factor for CY 2024 of 0.1 percent. We proposed that estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2024. We estimated for the CY 2024 OPPS/ASC proposed rule that outlier payments would be approximately 0.78 percent of total OPPS payments in CY 2023; the 1.00 percent for proposed outlier payments in CY 2024 would constitute a 0.22 percent increase in payment in CY 2024 relative to CY 2023. For 2024, we proposed to use a conversion factor of $87.488 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 2.8 percent for CY 2024, the required proposed wage index budget neutrality adjustment of approximately 0.9974, the proposed 5 percent annual cap for individual hospital wage index reductions adjustment of approximately 0.9975, the proposed cancer hospital payment adjustment of 1.0005, and the proposed adjustment of an decrease of 0.1 percentage point of projected OPPS spending for the difference in pass-through spending, which resulted in a proposed conversion factor for CY 2024 of $87.488. For CY 2024, 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 0.8 percent (that is, the proposed OPD fee schedule increase factor of 2.8 percent further reduced by 2.0 percentage points). This resulted in a proposed reduced conversion factor for CY 2024 of $85.782 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of -1.706 in the conversion factor relative to hospitals that met the requirements). For further discussion of the Hospital OQR Program, we refer readers to section XIV of the CY 2024 OPPS/ASC [[Page 81581]] proposed rule. For 2024, we proposed to use a reduced conversion factor of $85.782 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of -1.706 in the conversion factor relative to hospitals that met the requirements). We received no comments on our proposed adjustments to the conversion factor for CY 2024. For this CY 2024 OPPS/ASC final rule with comment period, based on more recent data available, the OPD fee schedule increase factor for the CY 2024 OPPS is 3.1 percent (which reflects the 3.3 percent final estimate of the hospital inpatient market basket percentage increase with a-0.2 percentage point productivity adjustment). For CY 2024, we are using a conversion factor of $87.382 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 3.1 percent for CY 2024, the required wage index budget neutrality adjustment of 0.9912, the 5 percent annual cap for individual hospital wage index reductions of 0.9997, the cancer hospital payment adjustment of 1.0005, and the adjustment of 0.11 (or 0.27 less 0.16) percentage point of projected OPPS spending for the difference in pass-through spending that results in a conversion factor for CY 2024 of $87.382. We are also finalizing a reduced conversion factor of $85.687 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of - 1.695 in the conversion factor relative to hospitals that met the requirements). The calculations we performed to determine the CY 2024 final conversion factor are shown in Table 4. BILLING CODE 4150-28-P [[Page 81582]] [GRAPHIC] [TIFF OMITTED] TR22NO23.012 [[Page 81583]] [GRAPHIC] [TIFF OMITTED] TR22NO23.013

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 this CY 2024 OPPS/ASC final rule with comment period. 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 2024 OPPS/ASC (88 FR 49584). We refer readers to section II.H of the CY 2024 OPPS/ASC proposed rule for a description and an example of how the wage index for a particular hospital is used to determine payment for the hospital. We did not receive any public comments on our proposal, and we are finalizing our proposal without modification. 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 (https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices)), for estimating APC costs, we would standardize 60 percent of estimated claims costs for geographic area wage variation using the same FY 2024 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/ASC proposed rule (63 FR 47576), we believe that using the IPPS wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index is updated annually. The Affordable Care Act contained several provisions affecting the wage index. These provisions were discussed in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74191). Section 10324 of the Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, which defines a frontier State and amended section 1833(t) of the Act to add paragraph (19), which requires a frontier State wage index floor of 1.00 in certain cases, and states that the frontier State floor shall not be applied in a budget neutral manner. We codified these requirements at Sec. 419.43(c)(2) and (3) of our regulations. In the CY 2024 OPPS/ASC proposed rule (88 FR 49584 and 49585), 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 [[Page 81584]] inpatient hospital with which it is associated, the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. We refer readers to the FY 2011 through FY 2023 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 and 53370; for FY 2014, 78 FR 50590 and 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; for FY 2021, 85 FR 58765; for FY 2022, 86 FR 45178; and for FY 2023, 87 FR 49006. We did not receive any public comments on our proposal, and we are finalizing our proposal without modification. In addition to the changes required by the Affordable Care Act, we noted in the CY 2024 OPPS/ASC proposed rule (88 FR 49585) that the proposed FY 2024 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, the imputed floor wage index adjustment in all-urban states, an adjustment for occupational mix, an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment), and the permanent 5-percent cap on any decrease to a hospital's wage index from its wage index in a prior FY. Beginning with FY 2024, we proposed to include hospitals with Sec. 412.103 reclassification along with geographically rural hospitals in all rural wage index calculations, and to exclude ``dual reclass'' hospitals (hospitals with simultaneous Sec. 412.103 and Medicare Geographic Classification Review Board (MGCRB) reclassifications) implicated by the hold harmless provision at section 1886(d)(8)(C)(ii) of the Act (88 FR 26973 and 26974). We also proposed to continue the low wage index hospital policy, under which we increase the wage index for hospitals with a wage index value below the 25th percentile wage index value for a fiscal year by half the difference between the otherwise applicable final wage index value for a year for that hospital and the 25th percentile wage index value for that year across all hospitals. We refer readers to the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26963 through 26986) for a detailed discussion of all proposed changes to the FY 2024 IPPS wage indexes. We noted that in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49018 through 49021), we finalized a permanent approach to smooth year-to- year decreases in hospitals' wage indexes. Specifically, for FY 2023 and subsequent years, we apply a 5-percent cap on any decrease to a hospital's wage index from its wage index in the prior FY, regardless of the circumstances causing the decline. That is, a hospital's wage index for FY 2024 would not be less than 95 percent of its final wage index for FY 2023, and for subsequent years, a hospital's wage index would not be less than 95 percent of its final wage index for the prior FY. We stated that we believe this policy would increase the predictability of IPPS payments for hospitals and mitigate instability and significant negative impacts to hospitals resulting from changes to the wage index. It would also eliminate the need for temporary and potentially uncertain transition adjustments to the wage index in the future due to specific policy changes or circumstances outside hospitals' control. Except for newly opened hospitals, we will apply the cap for a fiscal year using the final wage index applicable to the hospital on the last day of the prior fiscal year. A newly opened hospital would be paid the wage index for the area in which it is geographically located for its first full or partial fiscal year, and it would not receive a cap for that first year, because it would not have been assigned a wage index in the prior year (in accordance with 42 CFR 419.41(c)(1) and 419.43(c), as noted above). Core Based Statistical Areas (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 2024, under the OPPS, we are continuing to use only the FIPS county codes for purposes of crosswalking counties to CBSAs. In the CY 2024 OPPS/ASC proposed rule, we proposed to use the FY 2024 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 2024 (88 FR 49585). Therefore, any policies and adjustments for the FY 2024 IPPS post- reclassified wage index would be reflected in the final CY 2024 OPPS wage index beginning on January 1, 2024. We refer readers to the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26963 through 26986) and the proposed FY 2024 hospital wage index files posted on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-proposed-rule-home-page. Regarding budget neutrality for the CY 2024 OPPS wage index, we refer readers to section II.B of this CY 2024 OPPS/ASC final rule with comment period. 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. 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 policies and adjustments. We proposed to continue this policy for CY 2024 (88 FR 49585 and 49586). We refer readers to the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26963 through 26986) for a detailed [[Page 81585]] discussion of the proposed changes to the FY 2024 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)) (Pub. L. 108-173). 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 2024, 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) (88 FR 49585 and 49586). Furthermore, we proposed that the wage index that would apply for CY 2024 to non-IPPS hospitals paid under the OPPS would continue to include the rural floor adjustment and any policies and adjustments applied to the IPPS wage index to address wage index disparities. In addition, we proposed that the wage index that would apply to non-IPPS hospitals paid under the OPPS would include the 5- percent cap on wage index decreases. Comment: Multiple commenters supported our policy to apply a 5- percent cap on any decrease to a hospital's wage index from its wage index in the prior FY. Commenters also requested that the proposed 5- percent cap policy be excluded from budget neutrality, which would allow the cap to be applied while avoiding decreases to the wage index in areas with high wage indexes. Response: We appreciate the commenters' support of our policy to apply a 5-percent cap on any decrease to a hospital's wage index from its wage index in the prior FY. We finalized the proposal and the associated proposed budget neutrality adjustment in the FY 2023 IPPS/ LTCH PPS final rule (87 FR 49018 through 49021) and agree that the policy will promote payment stability for HOPDs as well. We stated in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49021) that we will apply the cap in a budget neutral manner through a national adjustment to the standardized amount each fiscal year. Specifically, we will apply a budget neutrality adjustment to ensure that estimated aggregate payments under our wage index cap policy for hospitals that would have a decrease in their wage indexes for the upcoming fiscal year of more than 5 percent would equal what estimated aggregate payments would have been without the wage index cap policy. We proposed to apply a similar budget neutrality adjustment in the OPPS for each calendar year (87 FR 44530). For the OPPS, 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, which is inconsistent with the commenters' request to exclude the wage index cap policy from budget neutrality. Comment: Multiple commenters supported our policy to treat urban hospitals reclassified as rural hospitals under Sec. 412.103 as rural hospitals for purposes of the rural wage indexes and the rural floor. Response: We appreciate the commenters' support of our policy. Comment: Multiple commenters supported our low-wage index policy, which, for hospitals with a wage index value below the 25th percentile, increases the hospital's wage index by half the difference between the otherwise applicable wage index value for that hospital and the 25th percentile wage index value for all hospitals. Response: We appreciate the support of the commenters. After consideration of the public comments we received, we are finalizing our proposal without modification to use the FY 2024 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 2024. Any policies and adjustments for the FY 2024 IPPS post-reclassified wage index will be reflected in the final CY 2024 OPPS wage index beginning on January 1, 2024, including, but not limited to, reclassification of hospitals to different geographic areas, the rural floor provisions, the imputed floor wage index adjustment in all-urban states, an adjustment for occupational mix, an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment), 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, and a 5-percent cap on any decrease to a hospital's wage index from its wage index in the prior FY. We refer readers to the FY 2024 IPPS/LTCH PPS final rule (88 FR 58958 through 58988) and the FY 2024 hospital wage index files posted on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page. Regarding budget neutrality for the CY 2024 OPPS wage index, we refer readers to section II.B. of this final rule with comment period. For CMHCs, for CY 2024, 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 (88 FR 48586). Furthermore, we proposed that the wage index that would apply to a CMHC for CY 2024 would continue to include the rural floor adjustment and any policies and adjustments applied to the IPPS wage index to address wage index disparities. In addition, the wage index that would apply to CMHCs would include the 5-percent cap on wage index decreases. Also, we proposed that the wage index that would apply to CMHCs would not include the outmigration adjustment because that adjustment only applies to hospitals. We did not receive any public comments on our proposals, and we are finalizing our proposals regarding CMHC wage index calculations without modification. Table 4A associated with the FY 2024 IPPS/LTCH PPS final rule (available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page) identifies counties that would be eligible for the out-migration adjustment. Table 2 associated with the FY 2024 IPPS/LTCH PPS final rule (available for download via the website above) identifies IPPS hospitals that would receive the out-migration adjustment for FY 2024. We are including the outmigration adjustment information from Table 2 associated with the FY 2024 IPPS/LTCH PPS final rule as Addendum L to this final rule with comment period, with the addition of non-IPPS hospitals that would receive the section 505 outmigration adjustment under this final rule with comment period. 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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. At this link, readers will find a link to the final FY 2024 IPPS wage index tables and Addendum L. [[Page 81586]]

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 (OMB NO: 0938-0050 for Form CMS- 2552-10) 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 Claims Accounting Narrative for this CY 2024 OPPS/ASC final rule with comment period, which is posted on our website. We proposed to calculate the default ratios for CY 2024 using the most recent cost report data. We did not receive any public comments on our proposal, and we are finalizing our proposal without modification to calculate the default ratios for CY 2024 using the June 2021 HCRIS cost reports, consistent with the broader proposal regarding CY 2024 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 2024 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 provides 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 Sec. 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 the Balanced Budget Act of 1997 (BBA) (Pub. L. 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 2023. For CY 2024, we proposed to continue the current policy of a 7.1 percent payment adjustment 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, applied in a budget neutral manner. Comment: Two commenters requested that the 7.1 percent payment adjustment be allowed for providers other than rural SCHs and EACHs. The commenters suggested that Medicare dependent hospitals and urban sole community hospitals either receive the adjustment or be studied to see if they are eligible to receive the adjustment. Response: Our study of the difference in costs by APC between hospitals in rural areas and hospitals in urban areas only showed a significant difference in costs for rural SCHs. We did not identify significant cost differences between hospitals in urban areas and Medicare dependent hospitals. In addition, our authority under section 1833(t)(13) of the Act only extends to rural hospitals. Therefore, we are not expanding the types of hospitals eligible for the 7.1 percent payment adjustment at this time. Comment: Multiple commenters are in favor of our policy to apply a 7.1 percent payment adjustment for rural SCHs, including EACHs. Response: We appreciate the commenters' support of our policy. After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue in CY 2024 our current policy of utilizing a budget neutral 7.1 percent payment adjustment for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs.

1. Background

Since the inception of the OPPS, which was authorized by the Balanced [[Page 81587]] 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 department 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 department 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 department 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 Sec. 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 (OMB NO: 0938-0050), 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 (Pub. L. 111-148) 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 and 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 2023. [GRAPHIC] [TIFF OMITTED] TR22NO23.014 [[Page 81588]]

2. Policy for CY 2024

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 Sec. 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. In the CY 2024 OPPS/ASC proposed rule (88 FR 49587 through 49589), we proposed to provide additional payments to the 11 specified cancer hospitals so that each cancer hospital's proposed PCR is equal to the weighted average PCR (or ``target PCR'') for the other OPPS hospitals, generally using the most recent submitted or settled cost report data that are available, reduced by 1.0 percentage point, to comply with section 16002(b) of the 21st Century Cures Act, and adjusted by the proposed post-Public Health Emergency transition as described later in this section. 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 2024. Under our established policy, to calculate the proposed CY 2024 target PCR, we used the same extract of cost report data from HCRIS used to estimate costs for the CY 2024 OPPS which, in most cases, would be the most recently available hospital cost reports. Using these cost report data, we included data from Worksheet E, Part B, for each hospital, using data from each hospital's most recent cost report, whether as submitted or settled. We then limited the dataset to the hospitals with CY 2022 claims data that we used to model the impact of the proposed CY 2024 APC relative payment weights (3,406 hospitals) because it is appropriate to use the same set of hospitals that are being used to calibrate the modeled CY 2024 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2017 to 2022; however, the cost reporting periods were predominantly from fiscal years ending in 2021 and 2022. We then removed the cost report data of the 47 hospitals located in Puerto Rico from our dataset because we did not believe their cost structure reflected the costs of most hospitals paid under the OPPS, and, therefore, their inclusion may bias the calculation of hospital- weighted statistics. We also removed the cost report data of 14 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to a proposed analytic file of 3,345 hospitals with cost report data. Using this smaller dataset of cost report data, we estimated that, on average, the OPPS payments to other hospitals furnishing services under the OPPS were approximately 86 percent of reasonable cost (weighted average PCR of 0.86). Therefore, after applying the 1.0 percentage point reduction, as required by section 16002(b) of the 21st Century Cures Act, using our standard process the payment amount associated with the cancer hospital payment adjustment to be determined at cost report settlement would be the additional payment needed to result in a target PCR equal to 0.85 for each cancer hospital. However, we noted that a proposed cancer hospital target PCR of 0.85 for CY 2024 is dramatically lower than the target PCR from previous years. Historically, as shown in Table 5 of the final rule, the target PCR for cancer hospitals has been between 0.88 and 0.92. In light of our concerns about the impact of the COVID-19 PHE on CY 2020 claims and cost data, we finalized a policy to continue the target PCR of 0.89 from CY 2021 for CY 2022 and for CY 2023 as an appropriate cancer hospital adjustment under our authority described in section 1833(t)(2)(E) of the Act. We explained that we believe the impact of the COVID-19 PHE claims and cost data used to calculate the target PCR of 0.85 may continue to have some limited influence on our target PCR calculations. However, we also explained that we believe we should begin to take into consideration the PCR of non-cancer hospitals based on the most recently available data for calculating the target PCR. We noted that we do not know if the changes in the data that have yielded a significantly lower PCR for non-cancer hospitals using the most recently available data are likely to continue in future years or if, when data from after the PHE is available, we will see the target PCR increase toward its historical norm. We stated that we are concerned that using the 0.85 target PCR calculated from the most recent data could lead to instability in cancer hospital adjustment payments and volatility in the PCR as we transition to utilizing post-PHE data. Therefore, in the CY 2024 OPPS/ASC proposed rule, we proposed to transition from the target PCR of 0.89 we finalized for CYs 2020 through 2023 (which included the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act) and incrementally reduce the target PCR by an additional 1.0 percentage point for each calendar year, beginning with CY 2024, until the target PCR equals the PCR of non-cancer hospitals calculated using the most recent data minus 1.0 percentage point as required by section 16002(b) of the 21st Century Cures Act. Therefore, utilizing this methodology for the CY 2024 OPPS/ASC proposed rule, we proposed to reduce the CY 2023 target PCR of 0.89 by 1 percentage point and proposed a cancer hospital target PCR of 0.88 for CY 2024. Comment: Several commenters supported the proposed methodology of incrementally reducing the target PCR until it equals the target PCR based on cost report data. A few of those commenters also requested that the repayments made to 340B hospitals associated with the prior 340B-acquired drug policy be included in the final CY 2024 target PCR. Response: We appreciate commenters' support for our proposal. We also appreciate the commenters' suggestion to include repayments made to 340B hospitals in calculating the CY 2024 target PCR. The cancer hospital adjustment target PCR calculation relies on historical cost report data, and we believe that the proposed methodology continues to remain appropriate for the CY 2024 target PCR without the addition of anticipated future payments. However, the request raises a valid concern regarding if and how best to accommodate changes made as part of the final 340B Remedy policy. We believe that having public input on how to appropriately account for those changes once the 340B Remedy policy is finalized and implemented will be important, including because the cancer hospital adjustment is budget neutral within the OPPS and thus any changes to it will affect not only cancer [[Page 81589]] hospitals, but all hospitals paid under the system. After consideration of the public comments we received, we are finalizing without modification our proposed policy to reduce the target PCR by 1 percentage point until such time that it equals the target PCR calculated based on cost report data. Therefore, a CY 2024 target PCR of 0.88 will apply to the 11 specified cancer hospitals for CY 2024. Table 6 shows the estimated percentage increase in OPPS payments to each cancer hospital for CY 2024, due to the cancer hospital payment adjustment policy. The actual, final amount of the CY 2024 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2024 payments and costs from the settled CY 2024 cost report. 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. [GRAPHIC] [TIFF OMITTED] TR22NO23.015

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 dollar amount). In CY 2023, the outlier threshold was met when the hospital's cost of furnishing a service exceeded 1.75 times the APC payment amount (the multiplier threshold) and exceeded the APC payment amount plus $8,625 (the fixed-dollar amount threshold) (87 FR 71788 through 71790). If the hospital's cost of furnishing 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 hospital's cost of furnishing the service exceeds 1.75 times the APC payment amount. Beginning with CY 2009 payments, outlier payments are subject to a reconciliation process similar to the IPPS outlier reconciliation process for cost reports, as discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599). It has been our policy to report the actual amount of outlier payments as a percent of total spending in the claims being used to model the OPPS. Our estimate of total outlier payments as a percent of total CY 2022 OPPS payments, using CY 2022 claims available for this CY 2024 OPPS final rule, is approximately 0.95 percent. Therefore, for CY 2022, we estimate that [[Page 81590]] we did not meet the outlier target by 0.05 percent of total aggregated OPPS payments. For this final rule with comment period, using CY 2022 claims data and CY 2023 payment rates, we estimate that the aggregate outlier payments for CY 2023 would be approximately 0.83 percent of the total CY 2023 OPPS payments. We provide estimated CY 2024 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/payment/prospective-payment-systems/hospital-outpatient.

2. Outlier Calculation for CY 2024

For CY 2024, 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 and IOP 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 modify our outlier policy and which APCs are eligible for an outlier payment if a CMHC's cost for services exceeds 3.40 times the APC payment rate. The outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the proposed APC payment rate. For further discussion of CMHC outlier payments, we refer readers to section VIII.C of this final rule with comment period. To ensure that the estimated CY 2024 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 the fixed-dollar threshold. We calculated the proposed fixed-dollar threshold using the standard methodology most recently used for CY 2023 (87 FR 71788 through 71790). For purposes of estimating outlier payments for CY 2024, we use the hospital-specific overall ancillary CCRs available in the April 2023 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 two years. In order to estimate the CY 2024 hospital outlier payments, we inflate the charges on the CY 2022 claims using the same proposed charge inflation factor of 1.118412 that we used to estimate the IPPS fixed-loss cost threshold for the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 27220). We used an inflation factor of 1.05755 to estimate CY 2023 charges from the CY 2022 charges reported on CY 2022 claims before applying CY 2023 CCRs to estimate the percent of outliers paid in CY 2023. The proposed methodology for determining these charge inflation factors is discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 27219 and 27220). As we stated in the CY 2005 OPPS final rule with comment period (69 FR 65844 through 65846), we believe that the use of the same 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 adjustment factor that we proposed to apply for the FY 2024 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2024 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2024, we proposed to apply an adjustment factor of 0.977799 to the CCRs that were in the April 2023 OPSF to trend them forward from CY 2023 to CY 2024. The methodology for calculating the proposed CCR adjustment factor, as well as the solicitation of comments on an alternative approach, is discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 27221). To model hospital outlier payments for the CY 2024 proposed rule, we applied the overall CCRs from the April 2023 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 0.977799 to approximate CY 2024 CCRs) to charges on CY 2022 claims that were adjusted (using the proposed charge inflation factor of 1.118412 to approximate CY 2024 charges). We simulated aggregated CY 2022 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 2024 OPPS payments. We estimated that a proposed fixed-dollar threshold of $8,350, 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 or intensive outpatient services exceeds 3.40 times the APC payment rate, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the APC 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 would 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 Outpatient Quality Reporting (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 would 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 2024 OPPS/ASC proposed rule. We note that in section II.G. of the CY 2024 OPPS/ASC proposed rule and our references here to that proposal, discussion of the proposed fixed-dollar threshold referenced the prior year's proposal of $8,350 rather than the correct proposed threshold, which was $6,875. However, the correct proposed fixed-dollar outlier threshold of $6,875 was used in developing the hospital impacts and was noted in the discussion of the effect of the CY 2024 proposed [[Page 81591]] rule policies on payments to hospitals (88 FR 49895). Comment: A commenter expressed concern about the increases in the fixed-dollar outlier threshold, noting that fewer cases would qualify for OPPS outlier payments. Response: We appreciate the commenter's concern; however, we note that both the incorrect proposed fixed-dollar outlier threshold of $8,350 and the correct proposed threshold of $6,875 are a decrease from the CY 2023 fixed-dollar outlier threshold of $8,625. We have reviewed and analyzed our methodology as well as the most up to date CCRs available in the July 2023 OPSF for determining estimated outlier payments. We continue to believe that they are appropriate for estimating hospital costs for establishing the fixed-dollar outlier threshold. The fixed-dollar threshold better targets outlier payments to those high-cost and complex procedures where a very costly service could present a hospital with significant financial loss. We maintain the target outlier percentage of 1.0 percent of estimated aggregate total payment 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. The methodology we use to calculate the fixed-dollar threshold for the prospective payment year is based on several data inputs that may change from prior payment years. For instance, updated hospital CCR data and changes to the OPPS payment methodology influence projected outlier payments in the prospective year. As a result of those and other factors, the fixed-dollar threshold can also fluctuate from year to year. In the past several years, we have seen significant increases in the fixed-dollar outlier threshold; however, the proposed CY 2024 fixed-dollar outlier threshold would have decreased relative to CY 2023. Further, we continue to observe a decrease under our final fixed- dollar outlier threshold when compared to the CY 2023. We believe that the changes that we observe in the fixed-dollar outlier threshold accurately reflect changes that hospitals are experiencing in providing healthcare. However, we will continue to monitor changes as more updated data are available. 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 2024.

3. Final Outlier Calculation

Consistent with historical practice, we used updated data for this final rule with comment period for outlier calculations. For CY 2024, we are applying the overall CCRs from the July 2023 OPSF file after adjustment (using the CCR adjustment factor of 0.990843 to approximate CY 2024 CCRs) to charges on CY 2022 claims that were adjusted using a charge inflation factor of 1.11904 to approximate CY 2024 charges. These are the same CCR adjustment and charge inflation factors that were used to set the IPPS fixed-dollar thresholds for the FY 2024 IPPS/ LTCH PPS final rule (88 FR 59353). We simulated aggregated CY 2024 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 the total outlier payment equaled 1.0 percent of aggregated estimated total CY 2024 OPPS payments. We estimate that a fixed-dollar threshold of $7,750 combined with the multiple threshold of 1.75 times the APC payment rate, will allocate the 1.0 percent of aggregated total OPPS payments to outlier payments. For CMHCs, if a CMHC's cost for partial hospitalization or intensive outpatient services exceeds 3.40 times the APC payment rate, the outlier payment will be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the APC payment rate.

H. Calculation of an Adjusted Medicare Payment From the National

Unadjusted Medicare Payment The national unadjusted payment rate is the payment rate for most APCs before accounting for the wage index adjustment or any applicable adjustments. The basic methodology for determining prospective payment rates for HOPD services under the OPPS is set forth in existing regulations at 42 CFR part 419, subparts C and D. For this CY 2024 OPPS/ASC 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 described in section II.A of this final rule with comment period. The national unadjusted payment rate for most APCs contained in Addendum A to this final rule with comment period (which is available via the CMS website ``Hospital Outpatient Regulations and Notices'') 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 on the CMS website link above) is calculated by multiplying the final CY 2024 scaled weight for the APC by the CY 2024 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 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. Below 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: ``J1,'' ``J2,'' ``P,'' ``Q1,'' ``Q2,'' ``Q3,'' ``Q4,'' ``R,'' ``S,'' ``T,'' ``U,'' or ``V'' (as defined in Addendum D1 to this final rule with comment period, 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 would receive for a specific service [[Page 81592]] from the national unadjusted payment rates presented in Addenda A and B to this final rule with comment period (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 national unadjusted payment rate is calculated by multiplying the reporting ratio of 0.9805 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 2024 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/ASC final rule with comment period (65 FR 18496 and 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 2024 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 Sec. 412.103 of the regulations. We are continuing to apply for the CY 2024 OPPS wage index any adjustments for the FY 2024 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 2024 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 the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (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 2024 IPPS wage index (which are listed in Table 3 associated with the FY 2024 IPPS/LTCH PPS final rule and available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps). (Click on the link on the left side of the screen titled ``FY 2024 IPPS Final Rule Home Page'' and select ``FY 2024 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. Xa is the labor-related portion of the national unadjusted payment rate (wage adjusted). Xa = labor-portion of the 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 = 0.40 * (national unadjusted payment rate). Step 6. If a provider is an SCH, as set forth in the regulations at Sec. 412.92, or an EACH, which is considered to be an SCH under section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural area, as defined in Sec. 412.64(b), or is treated as being located in a rural area under Sec. 412.103, multiply the wage index adjusted payment rate by 1.071 to calculate the total payment. The formula below is a mathematical representation of Step 6 and applies the rural adjustment for rural SCHs. Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment * 1.071. Step 7. The adjusted payment rate is the sum of the wage adjusted labor-related portion of the national unadjusted payment rate and the nonlabor-related portion of the national unadjusted payment rate. Xa is the labor-related portion of the national unadjusted payment rate (wage adjusted). Y is the nonlabor-related portion of the national unadjusted payment rate. Adjusted Medicare Payment = Xa + Y We are providing examples below of the calculation of both the full and reduced national unadjusted payment rates that would 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 final CY 2024 full national unadjusted payment rate for APC 5071 is $671.05. The final reduced national adjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is $658.03. This reduced rate is calculated by multiplying the reporting ratio of 0.9806 by the full unadjusted payment rate for APC 5071. Step 1. The labor-related portion of the final full national unadjusted payment is approximately $402.63 (0.60 * $671.05). The labor-related portion of the final reduced national adjusted payment is approximately $394.82 (0.60 * $658.03). [[Page 81593]] Step 2 & 3. The FY 2024 wage index for a provider located in CBSA 35614 in New York, which includes the adoption of the final IPPS 2024 wage index policies, is 1.3562. Step 4. The wage adjusted labor-related portion of the final full national unadjusted payment is approximately $546.05 ($402.63 *1.3562). The wage adjusted labor-related portion of the final reduced national adjusted payment is approximately $535.45 ($394.82 * 1.3562). Step 5. The nonlabor-related portion of the final full national unadjusted payment is approximately $268.42 (0.40 * $671.05). The nonlabor-related portion of the final reduced national adjusted payment is approximately $263.21 (0.40 * $658.03). Step 6. For this example of a provider located in Brooklyn, New York, the rural adjustment for rural SCHs does not apply. Step 7. The sum of the labor-related and nonlabor-related portions of the final full national unadjusted payment is approximately $814.47 ($546.05 + $268.42). The sum of the portions of the final reduced national adjusted payment is approximately $798.66 ($535.45 + $263.21) as shown in Table 7. [GRAPHIC] [TIFF OMITTED] TR22NO23.016 We did not receive any public comments on these steps under the methodology that we included in the CY 2024 OPPS/ASC proposed rule to determine the APC payments for CY 2024. Therefore, we are using the steps in the methodology specified above, to demonstrate the calculation of the final CY 2024 OPPS payments using the same parameters.

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). 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 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 of the CY 2022 OPPS/ASC final rule with comment period for the full discussion of this policy (86 FR 63740 through 63743). Under the regulation at 42 CFR 410.152(l)(5)(i)(B), the Medicare Part B payment percentage for colorectal cancer screening tests described in the regulation at Sec. 410.37(j) that are furnished in CY 2023 through 2026 is 85 percent, with beneficiary coinsurance equal to 15 percent. On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub.

L. 117-169) was signed into law. Section 11101(a) of the IRA amended

section 1847A of the Act by adding a new subsection (i), which requires the payment of rebates into the Supplementary Medical Insurance Trust Fund for Part B rebatable drugs if the payment limit amount exceeds the inflation-adjusted payment amount, which is calculated as set forth in section 1847A(i)(3)(C) of the Act. The provisions of section 11101 of the IRA are currently being implemented through program instruction, as permitted under section 1847A(c)(5)(C) of the Act. As such, we issued guidance for the computation of inflation-adjusted beneficiary coinsurance under section 1847A(i)(5) of the Act and amounts paid under section 1833(a)(1)(EE) of the Act on February 9, 2023.4 5 For additional information regarding implementation of section 11101 of the IRA, please see the inflation rebates resources page at https://www.cms.gov/inflation-reduction-act-and-medicare/inflation-rebates-medicare. We also refer readers [[Page 81594]] to the CY 2024 PFS proposed rule (88 FR 52262) for a detailed discussion of proposals related to inflation-adjusted beneficiary coinsurance and Medicare payment for Medicare Part B rebatable drugs. --------------------------------------------------------------------------- \4\ https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-initial-guidance.pdf. \5\ In addition, beginning with the April 2023 ASP Drug Pricing file, the file includes the coinsurance percentage for each drug and specifies ``inflation-adjusted coinsurance'' in the ``Notes'' column if the coinsurance for a drug is less than 20 percent of the Medicare Part B payment amount. Drug pricing files are available at https://www.cms.gov/medicare/medicare-fee-for-service-part-b-drugs/mcrpartbdrugavgsalesprice price. --------------------------------------------------------------------------- Section 11101(b) of the IRA amended sections 1833(i) and 1833(t)(8) of the Act by adding a new paragraph (9) and subparagraph (F), respectively. Section 1833(i)(9) requires under the ASC payment system that in the case of a Part B rebatable drug, in lieu of calculation of coinsurance that would otherwise apply under the ASC payment system, the provisions of section 1847A(i)(5) of the Act shall, as determined appropriate by the Secretary, apply for calculation of beneficiary coinsurance in the same manner as the provisions of section 1847A(i)(5) of the Act apply under that section. Similarly, section 1833(t)(8)(F) of the Act requires under the OPPS that in the case of a Part B rebatable drug (except for a drug that has no copayment applied under subparagraph (E) of such section or for which payment is packaged into the payment for a covered OPD service or group of services), in lieu of the calculation of the copayment amount that would otherwise apply under the OPPS, the provisions of section 1847A(i)(5) of the Act shall, as determined appropriate by the Secretary, apply in the same manner as the provisions of section 1847A(i)(5) of the Act apply under that section. Section 1847A(i)(5) of the Act requires that for Part B rebatable drugs, as defined in section 1847A(i)(2)(A) of the Act, furnished on or after April 1, 2023, in calendar quarters in which the amount specified in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in the case of selected drugs described under section 1192(c) of the Act, the amount specified in section 1847A(b)(1)(B) of the Act), exceeds the inflation-adjusted payment amount determined in accordance with section 1847A(i)(3)(C) of the Act, the coinsurance will be 20 percent of the inflation-adjusted payment amount for such quarter (hereafter, the inflation-adjusted coinsurance amount). This inflation-adjusted coinsurance amount is applied as a percent, as determined by the Secretary, to the payment amount that would otherwise apply for such calendar quarter in accordance with section 1847A(b)(1)(B) or (C) of the Act, as applicable, including in the case of a selected drug. Paragraph (9) of section 1833(i) of the Act and subparagraph (F) of section 1833(t)(8) of the Act, as added by section 11101(b) of the IRA, also provide that in lieu of the amounts of payment otherwise applicable under the ASC payment system and the OPPS, the provisions of paragraph (1)(EE) of subsection (a) of section 1833 of the Act shall apply, as determined appropriate by the Secretary. Section 11101(b) of the IRA amended section 1833(a)(1) of the Act by adding a new subparagraph (EE), which requires that if the specific payment amount described in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in the case of a selected drug, the payment amount described in section 1847A(b)(1)(B) of the Act) exceeds the inflation-adjusted payment amount of a Part B rebatable drug, the Part B payment will, subject to the deductible and sequestration, equal the difference between such payment amount and the inflation-adjusted coinsurance amount. In the CY 2024 OPPS/ASC proposed rule, we proposed to codify the OPPS program payment and cost sharing amounts for Part B rebatable drugs as required by section 1833(t)(8)(F) by adding a new paragraph (e) to Sec. 419.41, which cross-references the regulations proposed in the CY 2024 PFS proposed rule (Sec. Sec. 410.152(m) and 489.30(b)(6)). We also proposed to amend the regulation text to reflect our longstanding policies for calculating the Medicare program payment and cost sharing amounts for separately payable drugs and biologicals by adding a new paragraph (d) to Sec. 419.41. Similarly, we proposed to codify the ASC cost sharing amounts for Part B rebatable drugs as required by section 1833(i)(9) of the Act by revising Sec. 416.172(d) to include a cross-reference to 42 CFR 489.30(b)(6), as proposed in the CY 2024 PFS proposed rule to codify the cost sharing amounts for Part B rebatable drugs with prices increasing at a rate faster than inflation. We did not propose any changes to the ASC regulations at 42 CFR part 416 to reflect the Medicare payment amount for Part B rebatable drugs with prices increasing at a rate faster than inflation, because 42 CFR 416.171(b) already incorporates, for the ASC payment system, the payment amounts that apply for the OPPS under 42 CFR part 419. Part 419 would include our proposed new Sec. 419.41(e), which addresses Medicare payment for Part B rebatable drugs under the OPPS. We did not receive any public comments on our proposal to codify amendments to Sec. Sec. 419.41 and 416.172. Therefore, we are finalizing our proposal to codify the OPPS program payment and cost sharing amounts for Part B rebatable drugs as required by section 1833(t)(8)(F) of the Act by adding a new paragraph (e) to Sec. 419.41. We are also finalizing our proposal to amend the regulation text to reflect our longstanding policies for calculating the Medicare program payment and cost sharing amounts for separately payable drugs and biologicals by adding a new paragraph (d) to Sec. 419.41. We are finalizing our proposal to codify the ASC cost sharing amounts for Part B rebatable drugs as required by section 1833(i)(9) of the Act by revising Sec. 416.172(d) to include a cross-reference to 42 CFR 489.30(b)(6), as finalized in the CY 2024 PFS final rule to codify the cost sharing amounts for Part B rebatable drugs with prices increasing at a rate faster than inflation. Comment: A commenter pointed out an error in the preamble of the CY 2024 OPPS/ASC proposed rule related to the rebatable drugs under the IRA. Specifically, the commenter noted that the preamble language incorrectly suggested that a provider is paid the amount specified in section 1833(a)(1)(EE) with respect to a Part B rebatable drug when the inflation-adjusted amount exceeds the specified payment amount, which is the inverse of what the statute provides and therefore, is incorrect. Response: We thank the commenter for pointing out the error where the references to the specified payment amount and the inflation- adjusted amount were inadvertently transposed in the preamble. We have corrected the preamble for this final rule with comment period. 2. OPPS Copayment Policy For CY 2024, 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 for a discussion of that methodology (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 final national unadjusted copayment amounts for services payable under the OPPS that would be effective January 1, 2024, are included in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website). As discussed in section XIV.E of the CY 2024 OPPS/ASC proposed rule (88 [[Page 81595]] FR 49594) and this final rule with comment period, for CY 2024, 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 and 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). We did not receive any public comments on our proposal, and we are finalizing our proposal to determine copayment amounts for new and revised APCs using the same methodology that we implemented beginning in CY 2004. In addition, we are finalizing the use of 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 finalized national unadjusted copayment amounts for services payable under the OPPS that would be effective January 1, 2024, are included in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website). 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, $134.21 is approximately 20 percent of the full national unadjusted payment rate of $671.05. For APCs with only a minimum unadjusted copayment in Addenda A and B to this final rule with comment period (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 this with comment period. Calculate the rural adjustment for eligible providers, as indicated in Step 6 under section II.H of this final rule with comment period. 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 [[Page 81596]] calculated in Step 3 by the reporting ratio of 0.9806. The finalized unadjusted copayments for services payable under the OPPS that would be effective January 1, 2024, are shown in Addenda A and B to this final rule with comment period (which are available via the CMS website). We note that the final national unadjusted payment rates and copayment rates shown in Addenda A and B to this final rule with comment period reflect the CY 2024 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.

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. HCPCS codes are used to report surgical procedures, medical services, items, and supplies under the hospital OPPS. 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 that is established and maintained by the American Medical Association (AMA), and consists of Category I, II, III, multianalyte assays with algorithmic analyses (MAAA), and proprietary laboratory analyses (PLAA) CPT codes. Level II, which is established and maintained by CMS, is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes. Together, Level I and II HCPCS codes are used to report procedures, services, items, and supplies under the OPPS payment system. Specifically, we recognize the following codes on OPPS claims: Category I CPT codes, which describe surgical procedures, diagnostic and therapeutic services, and vaccine codes; Category III CPT codes, which describe new and emerging technologies, services, and procedures; MAAA CPT codes, which describe laboratory multianalyte assays with algorithmic analyses (MAA); PLA CPT codes, which describe proprietary laboratory analyses (PLA) services; and Level II HCPCS codes (also known as alpha-numeric codes), which are used primarily to identify drugs, devices, supplies, temporary procedures, and services not described by CPT codes. The 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 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. The 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. (CY 2024 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 the status indicators and their definitions in Addendum D1 to this final rule with comment period.

1. April 2023 HCPCS Codes Proposed Rule Comment Solicitation

For the April 2023 update, 67 new HCPCS codes were established and made effective on April 1, 2023. Through the April 2023 OPPS quarterly update CR (Transmittal 11937, Change Request 13136, dated March 31, 2023), we recognized several new HCPCS codes for separate payment under the OPPS. We solicited public comments on the proposed APC and status indicator assignments for the codes listed in Table 6 (New HCPCS Codes Effective April 1, 2023) of the CY 2024 OPPS/ASC proposed rule (88 FR 49595 through 49599), which are also displayed in Table 8. We received some public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes implemented in April 2023. The comments and our responses are addressed in their respective sections of this final rule with comment period, which include, but are not limited to: sections III.C. (New Technology APCs), III.E. (OPPS APC-Specific Policies), and IV. (OPPS Payment for Devices). For those April 2023 codes for which we received no comments, we are finalizing the proposed APC and status indicator assignments. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective January 1, 2024. Their replacement codes are listed in Table 8. In addition, in prior years we included the final OPPS status indicators and APC assignments in the coding preamble tables, however, because the same information can be found in Addendum B, we are no longer including them in Table 8. Therefore, readers are advised to refer to the OPPS Addendum B for the final OPPS status indicators, APC assignments, and payment rates for all codes reportable under the hospital OPPS. These new codes that were effective April 1, 2023, were assigned to comment indicator ``NP'' in Addendum B to the CY 2024 OPPS/ASC proposed rule to indicate that the codes are assigned to an interim APC assignment and comments would be accepted on their interim APC assignments. The complete list of status indicators and definitions used under the OPPS can be found in Addendum D1 to this final rule with comment period, while the complete list of comment indicators and definitions can be found in Addendum D2 to this final rule with comment period. We note that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are available via the internet on the CMS website. BILLING CODE 4150-28-P [[Page 81597]] [GRAPHIC] [TIFF OMITTED] TR22NO23.017 [[Page 81598]] [GRAPHIC] [TIFF OMITTED] TR22NO23.018 [[Page 81599]] [GRAPHIC] [TIFF OMITTED] TR22NO23.019 [[Page 81600]] BILLING CODE 4150-28-C

2. July 2023 HCPCS Codes Proposed Rule Comment Solicitation

For the July 2023 update, 97 new codes were established and made effective July 1, 2023. Through the July 2023 OPPS quarterly update CR (Transmittal 12077, Change Request 13210, dated June 13, 2023), we recognized several new codes for separate payment and assigned them to appropriate interim OPPS status indicators and APCs. We solicited public comments on the proposed APC and status indicator assignments for the codes listed in Table 7 (New HCPCS Codes Effective July 1, 2023) of the CY 2024 OPPS/ASC proposed rule (88 FR 49599-49605), which are also listed in Table 9. We received some public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes implemented on July 1, 2023. The comments and our responses are addressed in their respective sections of this final rule with comment period, which include, but are not limited to: sections III.C (New Technology APCs), III.E (OPPS APC- Specific Policies), and IV (OPPS Payment for Devices). For those July 1, 2023, codes for which we received no comments, we are finalizing the proposed APC and status indicator assignments. We note that one HCPCS C-code has been replaced with a HCPCS J-code. The replacement code is listed in Table 9. Additionally, we note that in prior years we included the final OPPS status indicators and APC assignments in the coding preamble tables, however, because the same information can be found in Addendum B, we are no longer including them in Table 9. Therefore, readers are advised to refer to the OPPS Addendum B for the final OPPS status indicators, APC assignments, and payment rates for all codes reportable under the hospital OPPS. These new codes that were effective July 1, 2023, were assigned to comment indicator ``NP'' in Addendum B to the CY 2024 OPPS/ASC proposed rule to indicate that the codes are assigned to an interim APC assignment and comments would be accepted on their interim APC assignments. The complete list of status indicators and definitions used under the OPPS can be found in Addendum D1 to this final rule with comment period, while the complete list of comment indicators and definitions can be found in Addendum D2 to this final rule with comment period. We note that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are available via the internet on the CMS website. BILLING CODE 4150-28-P [[Page 81601]] [GRAPHIC] [TIFF OMITTED] TR22NO23.020 [[Page 81602]] [GRAPHIC] [TIFF OMITTED] TR22NO23.021 [[Page 81603]] [GRAPHIC] [TIFF OMITTED] TR22NO23.022 [[Page 81604]] [GRAPHIC] [TIFF OMITTED] TR22NO23.023 [[Page 81605]] [GRAPHIC] [TIFF OMITTED] TR22NO23.024 BILLING CODE 4150-28-C

3. October 2023 HCPCS Codes Final Rule Comment Solicitation

For the October 2023 update, 64 new codes were established and made effective October 1, 2023. Through the October 2023 OPPS quarterly update CR (Transmittal 12077, Change Request 13210, dated June 13, 2023), we recognized several new codes for separate payment and assigned them to appropriate interim OPPS status indicators and APCs. For CY 2024, consistent with our established policy, we proposed in the CY 2024 OPPS/ASC [[Page 81606]] proposed rule (88 FR 49605) that the HCPCS codes that would be effective October 1, 2023, would be flagged with comment indicator ``NI'' in Addendum B in the CY 2024 OPPS/ASC final rule with comment period to indicate that we have assigned the codes to interim OPPS status indicators for CY 2024. Table 10 below lists the codes that were effective October 1, 2023. We note that several of the temporary C- codes have been replaced with permanent J-codes effective January 1, 2024. We are inviting public comments in this final rule on the interim payment indicators, which will be finalized in the CY 2025 OPPS/ASC final rule with comment period. We note these same codes will be subject to comment in the CY 2025 OPPS/ASC proposed rule with comment period, and will be finalized in the CY 2025 OPPS/ASC final rule with comment period. BILLING CODE 4150-28-P [[Page 81607]] [GRAPHIC] [TIFF OMITTED] TR22NO23.025 [[Page 81608]] [GRAPHIC] [TIFF OMITTED] TR22NO23.026 [[Page 81609]] [GRAPHIC] [TIFF OMITTED] TR22NO23.027 [[Page 81610]] [GRAPHIC] [TIFF OMITTED] TR22NO23.028 BILLING CODE 4150-28-C

4. January 2024 HCPCS Codes

a. New Level II HCPCS Codes Final Rule Comment Solicitation Consistent with past practice, we are soliciting comments on the new Level II HCPCS codes that will be effective January 1, 2024, in this final rule with comment period, thereby allowing us to finalize the status indicators and APC assignments for the codes in the CY 2025 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 proposed new C-codes and G-codes listed in Addendum O of the CY 2024 OPPS/ASC proposed rule, most Level II HCPCS codes are not released until sometime around November to be effective [[Page 81611]] 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 2024, we proposed to include the new Level II HCPCS codes effective January 1, 2024 (that would be incorporated in the January 2024 OPPS quarterly update CR), in Addendum B to the CY 2024 OPPS/ASC final rule with comment period. Specifically, for CY 2024, we proposed to continue our established policy of assigning comment indicator ``NI'' in Addendum B to this final rule with comment period to the new HCPCS codes that will be effective January 1, 2024, to indicate that we are assigning them an interim status indicator, which is subject to public comment. We are inviting public comments in this final rule with comment period on the status indicators and APC assignments, which will be finalized in the CY 2025 OPPS/ASC final rule with comment period. Similar to the codes effective October 1, 2023, these new Level II HCPCS codes that will be effective January 1, 2024, will be subject to comment in the CY 2025 OPPS/ASC proposed rule with comment period, and will be finalized in the CY 2025 OPPS/ASC final rule with comment period. b. New CY 2024 CPT Codes Proposed Rule Comment Solicitation In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 through 66844), we finalized a revised process of assigning APCs 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 2024 OPPS update, we received the CPT codes that will be effective January 1, 2024, from the AMA in time to be included in the CY 2024 OPPS/ASC proposed rule with comment period. The new, revised, and deleted CPT codes can be found in Addendum B to the proposed rule (which is available via the internet on the CMS website). We note that the new and revised CPT codes are assigned to a proposed APC assignment and comment indicator ``NP'' in Addendum B of the 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, and that comments will be accepted on the proposed APC assignment and status indicator. Further, we reminded readers that the CPT code descriptors that appear in Addendum B are short descriptors and do not accurately describe the complete procedure, service, or item described by the CPT code. Therefore, we included the 5-digit placeholder codes and their long descriptors for the new and revised CY 2024 CPT codes in Addendum O to the proposed rule (which is available via the internet on the CMS website) so that the public could adequately comment on the proposed APCs and SI assignments. The 5-digit placeholder codes were included in Addendum O, specifically under the column labeled ``CY 2024 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,'' to the proposed rule. We noted that the final CPT code numbers would be included in this CY 2024 OPPS/ASC 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 Category I and III CPT codes, we requested public comments on only those codes that are assigned comment indicator ``NP.'' In summary, in the CY 2024 OPPS/ASC proposed rule, we solicited public comments on the proposed CY 2024 SI and APC assignments for the new and revised Category I and III CPT codes that would be effective January 1, 2024. The CPT codes were listed in Addendum B to the proposed rule with short descriptors only. We listed them again in Addendum O to the proposed rule with long descriptors. We also proposed to finalize the SI and APC assignments for these codes (with their final CPT code numbers) in the CY 2024 OPPS/ASC final rule with comment period. The proposed SI and APC assignments for these codes were included in Addendum B to the proposed rule (which is available via the internet on the CMS website). We received comments on several of the new CPT codes that were assigned to comment indicator ``NP'' in Addendum B to the CY 2024 OPPS/ ASC proposed rule. We have responded to those public comments in sections III.C, III.E, and IV of this CY 2024 OPPS/ASC final rule with comment period. The final SIs, APC assignments, and payment rates for the new CPT codes that are effective January 1, 2024, can be found in Addendum B to this final rule with comment period. In addition, the SI meanings can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2024) to this final rule with comment period. Addenda B and D1 are available via the internet on the CMS website. Finally, Table 11, which is a reprint of Table 8 from the CY 2024 OPPS/ASC proposed rule (88 FR 49606), shows the comment timeframe for new and revised HCPCS codes. The table provides information on 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. [[Page 81612]] [GRAPHIC] [TIFF OMITTED] TR22NO23.029

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. In the CY 2024 OPPS/ASC proposed rule (88 FR 49607), for CY 2024, 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 [[Page 81613]] representatives of providers to review (and advise the Secretary concerning) the clinical integrity of the APC groups and the relative payment weights. We note that the Advisory Panel on Hospital Outpatient Payment (also known as the HOP Panel or the Panel) recommendations for specific services for the CY 2024 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). 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 the CY 2024 OPPS/ ASC proposed rule, for CY 2024, 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 2024 OPPS update, we identified the APCs with violations of the 2 times rule; and we proposed changes to the procedure codes assigned to these APCs (with the exception of those APCs for which we proposed a 2 times rule exception) in Addendum B to the CY 2024 OPPS/ ASC proposed rule. We note that Addendum B does not appear in the printed version of the Federal Register as part of this final rule with comment period. Rather, it is published and made available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. To eliminate a violation of the 2 times rule and improve clinical and resource homogeneity in the APCs for which we did not propose a 2 times rule exception, 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 2024 included in the CY 2024 OPPS/ASC proposed rule are related to changes in costs of services that were observed in the CY 2022 claims data available for CY 2024 ratesetting. Addendum B to the CY 2024 OPPS/ ASC proposed rule identifies 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, 2023 OPPS Addendum B Update (available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).

3. APC Exceptions to the 2 Times Rule

Taking into account the APC changes that we proposed to make for CY 2024, we reviewed all of the APCs for which we identified 2 times rule violations to determine whether any of the APCs would qualify for an exception. We used the following criteria to evaluate whether to propose exceptions to the 2 times rule for affected APCs: Resource homogeneity; Clinical homogeneity; Hospital outpatient setting utilization; Frequency of service (volume); and Opportunity for upcoding and code fragments. For a detailed discussion of these criteria, we refer readers to the April 7, 2000 final rule (65 FR 18457 and 18458). Based on the CY 2022 claims data available for the CY 2024 OPPS/ASC proposed rule, we found 21 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 2024 and found that all of the 21 APCs we identified met the criteria for an exception to the 2 times rule based on the CY 2022 claims data available for the CY 2024 OPPS/ASC proposed rule. We note that, on an annual basis, based on our analysis of the latest claims data, we identify violations to the 2 times rule and propose changes when appropriate. Those APCs that violate the 2 times rule are identified and appear in Table 12 below. In addition, 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 have only identified those APCs, including those with criteria-based costs, such as device- dependent CPT/HCPCS codes, with violations of the 2 times rule, where a 2 times rule violation is a relevant concept. Table 9 of the CY 2024 OPPS/ASC proposed rule (88 FR 49608) listed the 21 APCs for which we proposed to make an exception under the 2 times rule for CY 2024 based on the criteria cited above and claims data submitted between January 1, 2022, and December 31, 2022, and processed on or before June 30, 2023, and 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 proposed rule can be found on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. Based on the updated final rule CY 2022 claims data used for this CY 2024 final rule with comment period, we found a total of 22 APCs with violations of the 2 times rule. Of these 22 total APCs, 19 were identified in the proposed rule and three are newly identified APCs. The following two APCs appeared in Table 9 of the CY 2024 OPPS/ASC proposed rule (88 FR 49608) as violating the 2 times rule, however, after conducting our data analysis for this final rule with comment period, we found that the APCs no longer violate the 2 times rule: APC 5303 (Level 3 Upper GI Procedures) APC 5822 (Health and Behavior Services) In addition, the three newly identified APCs with violations of the 2 times rule include the following: APC 5734 (Level 4 Minor Procedures) [[Page 81614]] APC 5743 (Level 3 Electronic Analysis of Devices) APC 5791 (Level 1 Pulmonary Treatment) Although we did not receive any comments on Table 9 of the proposed rule, we did receive comments on APC assignments for specific HCPCS codes. The comments, and our responses, can be found in section III.E. of this final rule with comment period. In addition, we received a comment related to the application of the 2 times rule to the nuclear medicine APCs and packaged diagnostic radiopharmaceuticals. Below is the comment and our response. Comment: A commenter stated that the statutory standard at section 1833(t)(2)(B) of the Social Security Act applies to the resources of both items and services, and if CMS continues to package diagnostic radiopharmaceuticals, the commenter suggested including the cost of the packaged radiopharmaceuticals when evaluating the nuclear medicine APCs for 2 times rule violations. The commenter added that, if needed, CMS should consider establishing additional APCs to ensure that the nuclear medicine APCs do not violate the 2 times rule when the costs of the packaged diagnostic radiopharmaceuticals are included. Response: As we stated in the CY 2023 OPPS/ASC final rule (87 FR 71963), diagnostic radiopharmaceuticals are an integral component of many nuclear medicine and imaging procedures, and the payment for them is packaged with the primary procedure. We reiterate that the payment rates for the nuclear medicine APCs are established in a manner that uses the reported costs to furnish the procedure based on data submitted to CMS from all hospitals paid under the OPPS. The costs that are calculated for the nuclear medicine APCs 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 diagnostic radiopharmaceutical used in the procedure. 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. Consequently, we believe that our general standard of applying the 2 times rule to all clinical APCs, including the nuclear medicine APCs, is appropriate. After considering the public comments we received on APC assignments and our analysis of the CY 2022 costs from hospital claims and cost report data available for this CY 2024 final rule with comment period, we are finalizing our proposals with some modifications. Specifically, we are finalizing our proposal to except 19 of the 21 proposed APCs from the 2 times rule for CY 2022 claims data and also excepting three additional APCs (APCs 5734, 5743, and 5791) for a total of 22 APCs. In summary, Table 12 lists the 22 APCs that we are excepting from the 2 times rule for CY 2024 based on the criteria described earlier and a review of updated claims data for dates of service between January 1, 2022, and December 31, 2022, that were processed on or before June 30, 2023, and updated CCRs, if available. 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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. BILLING CODE 4150-28-P [[Page 81615]] [GRAPHIC] [TIFF OMITTED] TR22NO23.030 BILLING CODE 4150-28-C

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. We also adopted in the CY 2002 OPPS final rule the following criteria for assigning a complete or comprehensive service to a New Technology APC: (1) the service must be truly new, meaning it cannot be appropriately reported by an existing HCPCS code assigned to a clinical APC and does not appropriately fit within an existing clinical APC; (2) the service is not eligible for transitional pass-through payment (however, a truly new, comprehensive service could qualify for assignment to a new technology APC even if it involves a device or drug that could, on its own, qualify for a pass-through payment); and (3) the service falls within the scope of Medicare benefits under section 1832(a) of the Act and is reasonable and necessary in accordance with section 1862(a)(1)(A) of the Act (66 FR 59898 through 59903). For additional information about our New Technology APC policy, we refer readers to https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/pass-through-payment-status-new-technology-ambulatory-payment-classification-apc and then follow the instructions to access the MEARIS\TM\ system for OPPS New Technology APC applications. 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 2023, 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 [[Page 81616]] 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. 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. Some services assigned to New Technology APCs have very low annual volume, which we consider to be fewer than 100 claims (86 FR 63528). 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 finalized a policy, in the CY 2019 OPPS/ASC final rule with comment period, to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to adjust how we determine the costs for low- volume services assigned to New Technology APCs (83 FR 58892 and 58893). Specifically, 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 calculate and present the result of each statistical methodology (arithmetic mean, geometric mean, and median) based on up to 4 years of claims data and solicit public comment on which methodology should be used to establish the payment rate for the low-volume new technology service. In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63529), we replaced the New Technology APC low volume policy with the universal low volume APC policy. Unlike the New Technology APC low volume policy, the universal low volume APC policy applies to clinical APCs and brachytherapy APCs, in addition to procedures assigned to New Technology APCs, and uses 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. We refer readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR 63529) for further discussion regarding this policy. Finally, 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 2024, we included the proposed payment rates for New Technology APCs 1491 to 1599 and 1901 through 1908 in Addendum A to the CY 2024 OPPS/ASC proposed rule (which is available on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).

2. Procedures Assigned to New Technology APC Groups for CY 2024

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 2024, 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 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. Administration of Subretinal Therapies Requiring Vitrectomy (APC 1563) 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 CPT code 67036 (Vitrectomy, [[Page 81617]] mechanical, pars plana approach) due to similar resource utilization. For CY 2021, HCPCS code C9770 was assigned to APC 1561 (New Technology--Level 24 ($3001-$3500)). This code may be used to describe the administration of HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes). This procedure was previously discussed in depth in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85939 and 85940). For CY 2022, we maintained the APC assignment of APC 1561 (New Technology--Level 24 ($3001-$3500)) for HCPCS code C9770 (86 FR 63531 and 63532). HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes) is for a gene therapy product indicated for a rare mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna[supreg]) was approved by FDA in December of 2017 and is an adeno-associated virus vector-based gene therapy indicated for the treatment of patients with confirmed biallelic RPE65 mutation- associated retinal dystrophy.\6\ This therapy is administered through a subretinal injection, which interested parties 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.'' --------------------------------------------------------------------------- \6\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download. --------------------------------------------------------------------------- Interested parties, including the manufacturer of Luxturna[supreg], recommended CPT code 67036 (Vitrectomy, mechanical, pars plana approach) for the administration of the gene therapy.\7\ However, the manufacturer previously contended the administration was not accurately described by any existing codes as CPT code 67036 (Vitrectomy, mechanical, pars plana approach) does not account for the administration itself. --------------------------------------------------------------------------- \7\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/uploads/2022/09/LUXTURNA-Reimbursement-Guide-for-Treatment-Centers-ISI-Update-April-2022-P-RPE65-US-320025.pdf. --------------------------------------------------------------------------- CMS recognized the need to accurately describe the unique 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 this new HCPCS code accurately described the unique service associated with intraocular administration of HCPCS code J3398. We recognized that CPT code 67036 represents a clinically similar procedure and process that approximates similar resource utilization to 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 CPT 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 CPT code 67036. The placeholder code C97X1 was replaced by HCPCS code C9770. For CY 2021, we finalized our proposal to create HCPCS code 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 ($3001-$3500)) using the geometric mean cost of CPT code 67036. For CY 2022, we continued to assign HCPCS code C9770 to APC 1561 (New Technology--Level 24 ($3001-$3500)) using the geometric mean cost of CPT code 67036. CY 2023 was the first year that claims data were available for HCPCS code C9770; so we proposed and finalized a policy to base the payment rate of HCPCS code C9770 on claims data for that code rather than on the geometric mean cost of CPT code 67036. Given the low number of claims for this procedure, we designated HCPCS code C9770 as a low volume procedure under our universal low volume APC policy and used the greater of the geometric mean, arithmetic mean, or median cost calculated based on the available claims data to calculate an appropriate payment rate for purposes of assigning HCPCS code C9770 to a New Technology APC. Based on the claims data available for the CY 2023 OPPS/ASC final rule with comment period, we found the median was the statistical methodology that estimated the highest cost for the service. The payment rate calculated using this methodology fell within the cost band for New Technology APC 1562 (New Technology--Level 25 ($3501- $4000)). Therefore, we finalized our proposal to assign HCPCS code C9770 to APC 1562 for CY 2023. CPT code 0810T (Subretinal injection of a pharmacologic agent, including vitrectomy and 1 or more retinotomies) will be effective July 1, 2023. We recognized the similarity between HCPCS code C9770 and CPT code 0810T; therefore, we proposed to delete HCPCS code C9770 effective December 31, 2023, and to recognize CPT code 0810T starting January 1, 2024. We proposed to determine the payment rate for the procedure using the claims data for HCPCS code C9770. Similar to CY 2023, for CY 2024, given that there are only 10 single frequency claims available for ratesetting, we proposed to designate CPT code 0810T as a low volume procedure under our universal low volume APC policy and to use the greater of the geometric mean, arithmetic mean, or median cost calculated based on the available claims data for HCPCS code C9770 to calculate an appropriate payment rate for purposes of assigning CPT code 0810T to a New Technology APC. Using all available claims from the 4-year lookback period, we determined the geometric mean cost to be $3,944, the arithmetic mean cost to be $4,192, and the median cost to be $4,148. Because the arithmetic mean is the statistical methodology that estimated the highest cost for the service, we proposed to use this cost to determine the New Technology APC placement. The arithmetic mean of $4,192 falls within the cost band for New Technology APC 1563 (New Technology--Level 26 ($4001-$4500)). Therefore, we proposed to assign CPT code 0810T to APC 1563 for CY 2024. Additionally, we proposed to perform a similar analysis using updated claims data in the CY 2024 OPPS/ASC final rule with comment period and update the APC placement as needed. Please refer to Table 13 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9770 and CPT code 0810T for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 81618]] [GRAPHIC] [TIFF OMITTED] TR22NO23.031 Comment: We received three comments in support of our proposal to delete HCPCS code C9770 and reassign CPT code 0810T to APC 1563 for CY 2024. Response: We thank the commenters for their support. After consideration of the public comment we received, we are finalizing our policy as proposed. Specifically, we are finalizing our proposal to delete HCPCS code C9770 and assign CPT code 0810T to APC 1563 (New Technology--Level 26 ($4001-$4500)) for CY 2024. We are also finalizing our proposal to designate CPT code 0810T as a low volume procedure under our universal low volume APC policy and use the greater of the geometric mean, arithmetic mean, or median cost calculated based on the available claims data for HCPCS code C9770 to calculate an appropriate payment rate for purposes of assigning CPT code 0810T to a New Technology APC. Based on updated claims data available for this final rule with comment period from the 4-year lookback period, we found the geometric mean cost for the service to be approximately $3,901.57, the arithmetic mean cost to be approximately $4,129.91, and the median cost to be approximately $4,141.06. The median was the statistical methodology that estimated the highest cost for the service. The payment rate calculated using this methodology falls within the cost band for New Technology APC 1563 (New Technology--Level 26 ($4001-$4500)). Therefore, we are assigning HCPCS code C9770 to APC 1563 for CY 2023. Please refer to Table 14 below for the final OPPS New Technology APC and status indicator assignments for HCPCS code C9770 and CPT code 0810T for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 81619]] [GRAPHIC] [TIFF OMITTED] TR22NO23.032 b. 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 ultrasound (EBUS) guided transtracheal and/or transbronchial sampling (eg, 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 universal low volume APC 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 determine 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. The payment rate calculated using this methodology fell within the cost band for New Technology APC 1562 (New Technology--Level 25 ($3501- $4000)). Therefore, we assigned HCPCS code C9751 to APC 1562 for CY 2021. In CY 2022, we again used the claims data from CY 2019 for HCPCS code C9751. Because the claims data was unchanged from when it was used in CY 2021, the values for the geometric mean cost ($2,693), the arithmetic mean cost ($3,086), and the median cost ($3,708) for the service described by HCPCS code C9751 remained the same. The highest cost metric using these methodologies was again the median and within the cost band for New Technology APC 1562 (New Technology--Level 25 ($3,501-$4,000)). Therefore, we continued to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3,501- $4,000)), with a payment rate of $3,750.50 for CY 2022. There were no claims reported in CY 2020, CY 2021, or CY 2022 for HCPCS code C9751. Therefore, for CY 2024, the only available claims for HCPCS code C9751 continue to be from CY 2019; and the reported claims are the same claims used to calculate the payment rate for the service in the CY 2021, CY 2022, and CY 2023 OPPS/ASC final rules with comment period. Given the low number of claims for this procedure, we proposed to continue to designate this procedure as a low volume procedure under our universal low volume policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign the procedure to the appropriate New Technology APC. Because our proposal uses the same claims as we used for CY 2021, CY 2022, and CY 2023, the same values for the geometric mean cost, arithmetic mean cost, and the median cost are used to propose a payment rate for CY 2024. Once again, the median ($3,708) was the statistical methodology that estimated the highest cost for the service. The payment rate calculated using this methodology continues to fall within the cost band for New Technology APC 1562 (New Technology--Level 25 ($3501-$4000)). Therefore, we proposed to continue to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3501-$4000)), with a proposed payment rate of $3,750.50 for CY 2024. Comment: We received one comment in support of our proposal to continue to assign HCPCS code C9751 to APC 1562. Response: We thank the commenter for their support. After consideration of the public comment we received, we are finalizing our policy as proposed. Please refer to Table 15 below for the final [[Page 81620]] OPPS New Technology APC and status indicator assignment for HCPCS code C9751 for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.033 c. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) Studies (APCs 1520, 1521, and 1522) 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. 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 either of the CY 2021 or CY 2022 OPPS proposed or final rules. 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 in CY 2021 and CY 2022. Likewise, we continued to assign CPT codes 78432 and 78433 to APC 1523 (New Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50. For CY 2023, we used CY 2021 claims data to determine the payment rates for CPT codes 78431, 78432, and 78433. Based on our analysis of the available claims data, for CY 2023, we assigned CPT code 78431 to APC 1523 (New Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50; CPT code 78432 to APC 1520 (New Technology--Level 20 ($1801-$1900)) with a payment rate of $1,850.50 based on the application of the universal low-volume policy; and CPT code 78433 to APC 1521 (New Technology--Level 21 ($1901-$2000)) with a payment rate of $1,950.50. For CY 2024, the OPPS payment rates were proposed to be based on available CY 2022 claims data. CPT code 78431 had over 22,000 single frequency claims in CY 2022. The geometric mean for CPT code 78431 was approximately $2,300, which is an amount that is below the cost band for APC 1523 (New Technology--Level 23 ($2501-$3000)), where the procedure is currently assigned. We proposed, for CY 2024, that CPT code 78431 be reassigned to APC 1522 (New Technology--Level 22 ($2001- $2500)) with a payment rate of $2,250.50. Please refer to Table 16 below for the proposed New Technology APC and status indicator assignments for CPT code 78431. There were only six single frequency claims in CY 2022 for CPT code 78432. As this is below the threshold of 100 claims for a service within a year, we proposed to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT code 78432 to the appropriate New Technology APC. Using available claims data from CY 2021 and CY 2022, our analysis found the geometric mean cost of the service is approximately $1,658, the arithmetic mean cost of the service is approximately $1,445, and the median cost of the service is approximately $1,562. The geometric mean was the statistical methodology that estimated the highest cost for the service. The geometric mean cost of $1,658, is an amount that is below the cost band for APC 1520 (New Technology--Level 20 ($1801-$1900)), where the procedure is currently assigned. Therefore, we proposed, for CY 2024, to assign CPT code 78432 to APC 1518 (New Technology--Level 18 ($1601- $1700)) with a payment rate of $1,650.50. Please refer to Table G12 for the proposed New Technology APC and status indicator assignments for CPT code 78432. There were over 1200 single frequency claims for CPT code 78433 in CY 2022. The geometric mean for CPT code 78433 was approximately $1,960, which is an amount that is within the cost band for APC 1521 (New Technology--Level 21 ($1901-$2000)), to which it is currently assigned. Therefore, for CY 2024, we propose to continue to assign CPT code 78433 to APC 1521 with a payment rate of $1,950.50. Please refer to Table 16 below for the proposed OPPS New Technology APC and status indicator assignment for CPT codes 78431, 78432, and 78433 for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 81621]] [GRAPHIC] [TIFF OMITTED] TR22NO23.034 Comment: We received several comments disagreeing with the proposed payment rates for CPT codes 78431, 78432, and 78433. Several commenters stated that the proposed APC assignments for 2024 are not consistent with the resources needed to perform these services and requested that CMS assign all three CPT codes to New Technology APC 1523 (New Technology--Level 23 ($2501-$3000)). While commenters explained differences between each service, commenters still requested that all three codes be assigned to the same New Technology APC. Response: We thank the commenters for their input on our proposal. We do not agree that it would be appropriate to assign all three codes describing the services associated with cardiac PET/CT studies to the same New Technology APC. Since CPT codes 78431, 78432, and 78433 first became effective on January 1, 2020, they have all been assigned to different New Technology APCs based on the perceived resource expenditures stemming from clinical differences in their code descriptors. Since first receiving claims data for these codes for the CY 2023 rulemaking cycle, there are differences between the codes in terms of claims data and claims frequency that serve as further evidence for the need for variations in New Technology APC assignments. Additionally, public comments regarding the clinical and resource differences between each code further underscore the need for different New Technology APC assignments. Therefore, we are not accepting commenters' suggestion to reverse course at this time and assign the three codes describing different services associated with cardiac PET/ CT studies to the same New Technology APC. Comment: Some commenters urged that CMS maintain stable payment rates for three to five years to allow for [[Page 81622]] appropriate adoption and implementation of the cardiac PET/CT services. Commenters explained that it takes time for hospitals to gain experience with new codes and for providers to become aware of how to appropriately bill new codes. Commenters pointed out that CPT codes 78431, 78432, and 78432 were made effective in 2020, which coincided with the COVID-19 public health emergency, and explained that there are still lingering effects of COVID-19 in terms of hospitals ordering and implementing new technology. Response: We note that we did not change the New Technology APC assignments for CPT codes 78431, 78432, and 78433 between CY 2020 through CY 2022. Therefore, CPT codes 78431, 78432, and 78433 had the exact same payment rate for three full calendar years. We believe that the time that has already been provided is sufficient for interested parties to educate providers on coding and for hospitals to appropriately report the services performed. Additionally, it is generally not our policy to judge the accuracy of provider coding and charging for purposes of ratesetting. We rely on hospitals and providers to accurately report the use of HCPCS codes in accordance with their code descriptors, and CPT and CMS instructions, and to report services accurately on claims and charges and costs for the services on their Medicare hospital cost report. Comment: Commenters strongly disagreed with the proposed APC reassignment for CPT code 78432 from APC 1520 to APC 1518 for CY 2024, and urged that CMS reassign CPT code 78432 to New Technology APC 1523, the New Technology APC to which it was first assigned in CY 2020 when there were no claims data yet available for the code. Commenters stated that they believed that six single frequency claims is not sufficient data to set payment rates for CPT code 78432. Other commenters explained that CPT code 78432 uses more resources than CPT code 78431 and requested that CMS consider collecting additional claims data in CY 2024 for CPT code 78432 before proposing to make an APC reassignment. Some commenters stated that they did not believe that it would benefit hospitals to adjust APC assignments year to year. These commenters stated that changes in APC assignments causes instability in payments and angst for hospitals. Response: We thank the commenters for their input, but note that section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the groups, the relative payment weights, and the wage and other adjustments to take into account, among other things, new cost data. For services assigned to New Technology APCs, 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). Therefore, we do not agree with commenters' suggestions that we should not regularly update the APC assignments for services like cardiac PET/CT. With that said, we are sympathetic to comments regarding the instability of the payment rate for CPT code 78432 if we were to finalize its proposed APC assignment based on the extremely limited number of claims that exist for the code. While there have been 2 more claims processed for CPT code 78432 since the time of the publication of the CY 2024 OPPS/ASC proposed rule, the claims frequency for CPT code 78432 remains extremely low at only 7 claims. As we have stated previously, low utilization of services assigned to a New Technology APC 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 in turn limits our ability to assign the service to an appropriate clinical APC (83 FR 58893). 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, 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 (arithmetic mean, geometric mean, or median) should be used for each low-volume service assigned to a New Technology APC. 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. 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. Because there were fewer than 100 claims per year for CPT code 78432, we would usually apply our universal low volume APC policy to determine its New Technology APC assignment. However, we recognize that if we utilized our universal low volume APC policy to establish a New Technology APC assignment for CY 2024 for CPT 78432, the same negative impacts caused by wide variations in payment rate that we sought to mitigate by adopting the universal low volume APC policy would result if we assigned CPT 78432 to the APC we proposed based on our universal low volume APC policy. While some payment fluctuations are expected and would not justify deviating from applying our universal low volume APC policy or making regular ratesetting changes, we have concerns that if we were to apply the universal low volume APC policy in this case to CPT code 78432 as proposed, we would see even lower utilization of CPT code 78432 compared to CPT codes 78431 and 78433, which have seen steady claims frequency increases since first being assigned to New Technology APCs. For example, for the CY 2023 OPPS/ASC final rule, we assigned CPT code 78431 to New Technology APC 1523 based on over 18,000 claims and CPT code 78433 to APC 1521 based on nearly 1,000 claims. For CY 2024, the claims volumes for both CPT code 78431 and 78433 have continued to increase to over 24,000 and 1,300 claims respectively, while utilization for CPT code 78432 has remained extremely limited. Specifically, there are only two more claims, 7 total, that we can use to set the payment rate for CPT code 78432 for CY 2024 compared to CY 2023. Because CPT code 78432 is one of three codes that describe the services associated with cardiac PET/CT studies, we have concerns that continued low claims frequency for CPT code 78432 will limit our ability to assign the service to an appropriate clinical APC. We believe that changing the APC payment rate based on an extremely low number of claims for CPT code 78432 for CY 2024 would further discourage utilization of the code as compared to CPT codes 78431 and 78433. While it is possible that patients may have a greater need for the services described by CPT code 78431 or 78433 rather than the service described by CPT code 78432, such that claims volume may always be lower for CPT code 78432 than the other codes describing cardiac PET/CT imaging [[Page 81623]] services, we would not want to make a change in payment that may further discourage utility of CPT code 78432 without first confirming that this is the case. Furthermore, we did not receive any comments on our proposal that explained that the service described by CPT code 78432 should only be furnished in extremely rare circumstances compared to CPT codes 78431 and 78433. Therefore, for CY 2024, we believe it is appropriate to utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the New Technology APC assignment for CPT code 78432 as finalized in the CY 2023 OPPS Final Rule for one additional year by assigning the code to New Technology APC 1520. Comment: Several commenters also disagreed with the proposal to reassign CPT code 78431 from APC 1523 to APC 1522 based on the claims data available. Although one commenter stated that with over 22,000 claims considered for CPT code 78431, the proposed APC payment for CPT code 78431 appears to be based on a large volume of information and appears to be reliable, the commenter disagreed with the proposal due to the impact a $500 reduction in payment rate may have on service lines. Response: We disagree that it is inappropriate to change the APC assignment for CPT code 78431 based on the claims available. We based our proposal on over 22,000 claims for CPT code 78431, which demonstrate that the code had a geometric mean cost of approximately $2,300. Since the publication of the CY 2024 OPPS proposed rule (88 FR 49552), there are over 2,000 additional claims available for rate setting for CPT code 78431 for CY 2024. With the significant number of claims available for CPT code 78431, we believe it is appropriate to modify the APC assignment for CPT code 78431 based on our claims data for CY 2024. Comment: Some commenters suggested that CMS consider alternatives to making adjustments in payment rates for services assigned to New Technology APCs that would allow for greater stability and predictability in payment rates from year to year. For example, one commenter suggested that CMS consider creating New Technology APCs with narrower cost bands between each APC or utilize several years of cost data--not unlike the low volume APC policy--to smooth the potential for large fluctuations. Response: We appreciate the commenters' feedback and will consider the suggestions for future rulemaking. Based on the comments received, we are finalizing our proposals for CPT codes 78431, 78432, and 78433 with modification. For CY 2024, we are finalizing the APC assignments for CPT codes 78431 and 78433 as proposed. Therefore, for CY 2024, we are assigning CPT code 78431 to New Technology APC 1522 and CPT code 78433 to New Technology APC 1521, as proposed. For CPT code 78432, we are invoking our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the New Technology APC assignment for CPT code 78432 as finalized in the CY 2023 OPPS final rule for an additional year. Therefore, we are assigning CPT code 78432 to APC 1520 for CY 2024. Please refer to Table 17 below for the final OPPS New Technology APC and status indicator assignments for CPT codes 7843, 78432, and 78433 for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. BILLING CODE 4150-28-P [[Page 81624]] [GRAPHIC] [TIFF OMITTED] TR22NO23.035 d. 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 had 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, [[Page 81625]] trans-esophageal echocardiography (TEE)/intracardiac echocardiography (ICE), and all imaging with or without guidance (e.g., ultrasound, 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)) with a payment rate of $12,500.50. In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85946), we stated that we believe similar resources and device costs are involved with the V-Wave interatrial shunt procedure and the Corvia Medical interatrial shunt procedure (HCPCS code C9760), except that payment for HCPCS codes C9758 and C9760 differs 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, whereas an interatrial shunt is implanted every time HCPCS code C9760 is billed. Accordingly, for CY 2021, we reassigned HCPCS code C9758 to New Technology APC 1590 (New Technology--Level 39 ($15,001-$20,000)), which reflects the cost of receiving the interatrial shunt one-half of the time the procedure is performed. For CY 2022, we used the same claims data from CY 2019 that we did for the CY 2021 OPPS final rule with comment period. Because there were no claims reporting HCPCS code C9758, we continued to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2022. For CY 2023 we used claims data from CY 2019 through CY 2022. Because there were no claims reporting HCPCS code C9758, we continued to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2023. For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. Although HCPCS code C9758 was effective January 1, 2020, we have no claims data at this time. Because we have no claims data, for CY 2024, we proposed to continue to assign HCPCS code C9758 to New Technology APC 1590 with a proposed payment rate of $17,500.50. Please refer to Table 18 below for the proposed OPPS New Technology APC and status indicator assignment for HCPCS code C9758 for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.036 Comment: We received one comment on our proposal. The commenter supports our assignment of HCPCS code C9758 to APC 1590 for CY 2024. Response: We appreciate the commenter's support for our proposal. After consideration of the public comments we received, we are finalizing our proposal without modification. Please refer to Table 19 below for the final OPPS New Technology APC and status indicator assignments for HCPCS code C9758 for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. BILLING CODE 4150-28-C [[Page 81626]] [GRAPHIC] [TIFF OMITTED] TR22NO23.037 e. Corvia Medical Interatrial Shunt Procedure (APC 1592) 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 (e.g., ultrasound, fluoroscopy), performed in an approved investigational device exemption (ide) study) to facilitate payment for the implantation of the Corvia Medical interatrial shunt. As we stated in the CY 2021 OPPS final rule with comment period (85 FR 85947), we believe that similar resources and device costs are involved with the Corvia Medical interatrial shunt procedure and the V- Wave interatrial shunt procedure. But unlike the V-Wave interatrial shunt, which is implanted half the time the associated interatrial shunt procedure described by HCPCS code C9758 is billed, the Corvia Medical interatrial shunt is implanted every time the associated interatrial shunt procedure (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. In CY 2022, we used the same claims data as was used in the CY 2021 OPPS final rule to determine the payment rate for HCPCS code C9760 because there were no claims for this service in CY 2019, the year used for ratesetting for CY 2022. Accordingly, we continued to assign HCPCS code C9760 to New Technology APC 1592 in CY 2022. For CY 2023, we used claims data from CY 2021 through CY 2022 to determine the payment rate for HCPCS code C9760. Because there were no claims for this service, we continued to assign HCPCS code C9760 to New Technology APC 1592 in CY 2023. For CY 2024, the OPPS payment rates were proposed to be based on available CY 2022 claims data. There was only one claim for HCPCS code C9760 within this time period. As this is below the threshold of 100 claims for a service within a year, we would designate C9760 as a low volume service and apply our universal low volume APC policy. Under this policy, we would use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign HCPCS code C9760 to the appropriate New Technology APC. Using the only one claim available for HCPCS code C9760, the geometric mean, arithmetic mean, and median costs were estimated to be approximately $7,945 for this service. However, because there is only a single claim for HCPCS code C9760, its payment rate appears to be an outlier based on the cost information we received from the manufacturer. Therefore, we have concerns that the [[Page 81627]] universal low volume APC policy calculations do not accurately capture the cost of the service. Therefore, we proposed to continue assigning HCPCS code C9760 to New Technology APC 1592. Please refer to Table 20 below for the proposed OPPS New Technology APC and status indicator assignment for HCPCS code C9760 for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.038 Comment: We received one comment on our proposal. The commenter expressed support for finalizing the New Technology APC assignment as proposed. The commenter stated that continuing the current APC assignments is critical to ensure that HCPCS codes C9758 and C9760 can be furnished during ongoing CMS-approved IDE trials. The commenter further stated that the proposed APC assignment for HCPCS code C9760 will enable studies to proceed, preserve beneficiary access, and allow a more robust claims history to be developed on which to base permanent clinical APC assignment in the future. Response: We appreciate the commenter's support for our proposal to assign HCPCS code C9760 to APC 1592. First, we note that based on update claims data available for this final rule with comment period, we received one additional claim for CY 2022 since the publication of the CY 2024 OPPS proposed rule. Using the only two claims available for HCPCS code C9760, the geometric mean, arithmetic mean, and median costs are estimated to be approximately $10,520 for this service. However, because there are only two claims for HCPCS code C9760, we continue to believe its payment rate appears to be an outlier based on the cost information we received from the manufacturer. We continue to have concerns that application of the universal low volume APC policy in this case would not accurately capture the cost of the service. Therefore, after consideration of the public comment we received and our analysis of the extremely limited claims data available, we are finalizing our policy as proposed. Specifically, we are finalizing our proposal to assign HCPCS code C9760 to APC 1592 New Technology--Level 41 ($25,001-$30,000) for CY 2024. After consideration of the public comment we received, we are finalizing our proposal without modification. Please refer to Table 21 below for the final OPPS New Technology APC and status indicator assignments for HCPCS code C9760 for CY 2024. The CY 2024 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 81628]] [GRAPHIC] [TIFF OMITTED] TR22NO23.039 f. Supervised Visits for Esketamine Self-Administration (APCs 1513 and 1520) 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)). This is the first FDA approval of esketamine for any use. 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. 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 esketamine nasal spray administration, and the potential for misuse or abuse 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 the FDA can require for certain medications with serious safety concerns to help ensure the benefits of the medication outweigh its risks. The SpravatoTM REMS program requires the esketamine nasal spray to be dispensed and administered to enrolled patients in health care settings that are certified in the REMS. See www.fda.gov for more information regarding the SpravatoTM REMS program compliance requirements. A treatment session of esketamine consists of instructed nasal self-administration by the patient followed by a period of at least two (2) hours post-administration observation of the patient under direct supervision of a health care professional in the certified health care setting. Please refer to the CY 2020 PFS final rule and interim final rule for more information about supervised visits for esketamine nasal spray 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 two hours of post-administration observation. For CY 2020, 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 service to HCPCS code G2082 but involves the administration of more than 56 mg of esketamine. For CY 2020, HCPCS code G2083 was assigned to New Technology APC 1511 (New Technology--Level 11 ($901- $1,000)) with a payment rate of $950.50. Updates to the APC assignments for G2082 and G2083 have been made in past rules. Please see the CY 2021 OPPS/ASC final rule with comment period (85 FR 85948), CY 2022 OPPS/ASC final rule with comment period (86 FR 63538), and the CY 2023 OPPS/ASC final rule with comment period (87 FR 71816). For CY 2024, we proposed to use CY 2022 available claims data to determine the payment rates for HCPCS codes G2082 and G2083. Therefore, for CY 2024, we proposed to assign these two HCPCS codes to New Technology APCs based on the codes' geometric mean costs. Specifically, we proposed to assign HCPCS code G2082 to New Technology APC 1513 (New Technology--Level 13 ($1,101-$1,200)) based on its geometric mean cost of $1,123. We also proposed to assign HCPCS code G2083 to New Technology [[Page 81629]] APC 1518 (New Technology--Level 18 ($1,601-$1,700)) based on its geometric mean cost of $1,628. The proposed New Technology APC and status indicator assignments for HCPCS codes G2082 and G2083 are shown in Table 22. The CY 2024 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. BILLING CODE 4150-28-P [GRAPHIC] [TIFF OMITTED] TR22NO23.040 Comment: We received one comment in support of our proposals to assign HCPCS code G2082 to APC 1513 and HCPCS code G2083 to APC 1518. Response: We thank the commenter for their support. We note the geometric mean costs for both HCPCS code G2082 and HCPCS code G2083 have changed since the proposed rule. Based on the updated claims data available for this final rule, the approximate geometric mean cost for HCPCS code G2082 is $1,189.24. Even though the geometric mean cost has increased slightly since the proposed rule, the proposed APC assignment of APC 1513 (New Technology--Level 13 ($1,101- $1,200)) is still appropriate and we are adopting this APC assignment as the final APC assignment for this HCPCS code G2082. Based on updated claims data available for this final rule with comment period, the approximate geometric mean cost for HCPCS code G2083 has increased to $1,821.48. Based on the updated claims available, we are finalizing a New Technology APC assignment for HCPCS code G2083 to APC 1520 (New Technology--Level 20 ($1,801-$1,900)) for CY 2024. As a final note, as we have begun to gather adequate claims data, we are considering placement of HCPCS codes G2082 and G2083 into clinical APCs through future rulemaking. Details about the New Technology APC and status indicator assignments for these HCPCS codes are shown in Table 23. The CY 2024 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 81630]] [GRAPHIC] [TIFF OMITTED] TR22NO23.041 BILLING CODE 4150-28-C g. DARI Motion Procedure (APC 1505) Effective January 1, 2022, CPT code 0693T (Comprehensive full body computer-based markerless 3D kinematic and kinetic motion analysis and report) is associated with the DARI Motion Procedure, a service that provides human motion analysis to aid clinicians in pre- and post- operative surgical intervention and in making other treatment decisions, including selecting the best course of physical therapy and rehabilitation. The technology consists of eight cameras that surround a patient, which 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. For CY 2022, we assigned CPT code 0693T to New Technology APC 1505 (New Technology--Level 5 ($301-$400)). For CY 2023, the OPPS payment rates were based on claims submitted between January 1, 2021, and December 31, 2021, processed through June 30, 2022. Due to its effective date of January 1, 2022, there were no claims available for CPT code 0693T for rate setting in CY 2023. Therefore, in CY 2023, we continued to assign CPT code 0693T to New Technology APC 1505. For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. Although CPT code 0693T was effective January 1, 2022, we did not have any claims data at the time of the CY 2024 OPPS/ASC proposed rule. Therefore, for CY 2024, we proposed to continue to assign CPT code 0693T to APC 1505 with a proposed payment rate of $350.50. Please refer to Table 24 below for the proposed OPPS New Technology APC and status indicator assignment for CPT code 0693T for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 81631]] [GRAPHIC] [TIFF OMITTED] TR22NO23.042 We did not receive any public comments on our proposal, and we still do not have any claims for the service. Therefore, for CY 2024, we are finalizing our proposal without modification. Specifically, for CY 2024, we are assigning CPT code 0693T to APC 1505 and SI ``S.'' The final New Technology APC and status indicator assignments for CPT code 0693T for CY 2024 are found in Table 25. The CY 2024 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. 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. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.043 h. Liver Histotripsy Service (APC 1576) CPT code 0686T (Histotripsy (i.e., non-thermal ablation via acoustic energy delivery) of malignant hepatocellular tissue, including image guidance) was first effective July 1, 2021, and describes the histotripsy service associated with the use of the HistoSonics system. Histotripsy is a non-invasive, non-thermal, mechanical process that uses a focused beam of sonic energy to destroy cancerous liver tumors and is currently in a non-randomized, prospective clinical trial to evaluate the efficacy and safety of the device for the treatment of primary or metastatic tumors located in the liver.\8\ When HCPCS code 0686T was first effective, the histotripsy procedure was designated as a Category A IDE clinical study (NCT04573881). Since devices in Category A IDE studies are excluded from Medicare payment, payment for CPT code 0686T only reflected the cost of the service that is performed each time it is reported on a claim. For CY 2023, we assigned CPT code 0686T to New Technology APC 1575 (New Technology--Level 38 ($10,000- $15,000) with a payment rate of $12,500. However, on March 2, 2023, the histotripsy IDE clinical study was re-designated as a Category B (Non- experimental/Investigational) IDE study. Due to this new designation, the proposed payment for CPT code 0686T in CY 2024 would reflect payment for both the service that is performed and the device used each time it is reported on a claim. --------------------------------------------------------------------------- \8\ ClinicalTrials.gov. ``The HistoSonics System for Treatment of Primary and Metastatic Liver Tumors Using Histotripsy (HOPE4LIVER) (HOPE4LIVER).'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/study/NCT04573881. --------------------------------------------------------------------------- For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. There are only two claims for CPT code 0686T within this time period. We note that 0686T was still designated as a Category A IDE study for these claims and therefore, the payment for these claims only included payment for the cost of the service. As the available claims data is below the threshold of 100 claims for a service within a year, we could propose to designate CPT code 0686T as a low volume service under our universal low volume APC policy, and use the highest of the geometric mean cost, arithmetic mean cost, or median cost to assign CPT code 0686T to the appropriate New Technology APC. Based on the two available claims in CY 2022, when CPT [[Page 81632]] code 0686T was still designated as a Category A IDE study, the geometric mean is estimated to be: $4,466; the median is estimated to be: $4,480; and the arithmetic mean is estimated to be: $4,480. Because $4,480 is the greatest of these methodologies, we would use this value to set the payment rate for CPT code 0686T. However, we have concerns that the available claims data and universal low volume APC policy calculations would not accurately capture the cost of the service following its approval as a Category B IDE study in March of 2023. If 0686T were still designated as a Category A IDE study, then the two claims available would be appropriate to set its payment rate, as the claims reflect the cost of the service and exclude the cost of the device. However, because CPT code 0686T was approved as a Category B IDE study, meaning Medicare coverage and payment of the device is no longer statutorily prohibited, the two CY 2022 claims available would not accurately capture the cost of 0686T for CY 2024. Therefore, based on the service costs reflected in the available claims and our estimates of the cost of the Category B device, for CY 2024, we proposed to maintain CPT code 0686T's current APC assignment. Specifically, we proposed to assign CPT code 0686T to APC 1575 (New Technology--Level 38 ($10,001-$15,000)) with a payment rate of $12,500.50 as shown in Table 26. [GRAPHIC] [TIFF OMITTED] TR22NO23.044 Comment: Two commenters, including the developer of the liver histotripsy procedure have asked us to reassign CPT code 0686T to APC 1577 (New Technology--Level 40 ($20,001-$25,000)) with a payment rate of $22,500.50 because on March 2, 2023, the FDA changed the device classification to a Category B IDE study, which allows a device that is used in the medical procedure to receive additional payment. The developer stated that the cost of the device used in the procedure was around $7,500 and asked us to assign the liver histotripsy to a higher- paying new technology APC cost band that would reflect the cost of both the procedure and the device used in the procedure. Response: We agree with the commenters that payment for CPT code 0686T should be increased to reflect that providers participating the Category B IDE study for the procedure may now receive payment for both the services provided and the device used to perform the procedure described by CPT code 0686T. However, we do not believe that a $10,000 payment increase for the procedure is supported by the data when the device only costs $7,500 and there are only two claims for the service. Therefore, we are assigning CPT code 0686T to APC 1576 (New Technology--Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50. HCPCS code 0686T (Histotripsy (that is, non-thermal ablation via acoustic energy delivery) of malignant hepatocellular tissue, including image guidance) will be assigned to APC 1576 (New Technology--Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50. Please refer to Table 27 below for the OPPS New Technology APC and status indicator assignment for CPT code 0686T for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule via the internet on the CMS website. [[Page 81633]] [GRAPHIC] [TIFF OMITTED] TR22NO23.045 i. Liver Multiscan Service (APC 1511) Effective July 1, 2021, CPT codes 0648T (Quantitative magnetic resonance for analysis of tissue composition (e.g., fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained without diagnostic mri examination of the same anatomy (e.g., organ, gland, tissue, target structure) during the same session; single organ) and 0649T (Quantitative magnetic resonance for analysis of tissue composition (e.g., fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained with diagnostic mri examination of the same anatomy (e.g., organ, gland, tissue, target structure); single organ (list separately in addition to code for primary procedure)) are associated with the Liver MultiScan service. LiverMultiScan 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. LiverMultiScan receives MR images acquired from patients' providers and analyzes the images using their proprietary Artificial Intelligence (AI) algorithms. It then sends the providers a quantitative metric report of the patient's liver fibrosis and inflammation. For CY 2023, we assigned CPT codes 0648T and 0649T to New Technology APC 1511 (New Technology--Level 11 ($901-$1,000) with a payment rate of $950.50. For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. We identified only 39 claims each for CPT code 0648T and CPT code 0649T during this time period. As this is below the threshold of 100 claims for a service within a year, we proposed to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT codes 0648T and 0649T to the appropriate New Technology APC. There are available claims data from CY 2021 and CY 2022 for CPT codes 0648T and 0649T. Our analysis of the data for CPT code 0648T found the geometric mean cost of the service is approximately $269, the arithmetic mean cost of the service is approximately $320, and the median cost of the service is approximately $313. Our analysis of the data for CPT code 0649T found the geometric mean cost of the service is approximately $102, the arithmetic mean cost of the service is approximately $136, and the median cost of the service is approximately $83. The arithmetic mean was the statistical methodology that estimated the highest cost for CPT codes 0648T and 0649T. In accordance with our SaaS Add-on Codes policy (87 FR 72032 and 72033), SaaS CPT add-on codes are assigned to the identical APCs and the same status indicator assignments as their standalone codes. Consistent with our SaaS Add-on Codes policy, CPT code 0649T, the add-on code for Liver MultiScan would be assigned to the identical APC and status indicator to CPT code 0648T, the standalone code for the same service. Therefore, we proposed, for CY 2024, to assign CPT codes 0648T and 0649T to APC 1505 (New Technology-- Level 5 ($301-$400)) with a payment rate of $350.50 as shown in Table 28. BILLING CODE 4150-28-P [[Page 81634]] [GRAPHIC] [TIFF OMITTED] TR22NO23.046 Comment: Multiple commenters asked that we not change the APC assignment for both Liver Multiscan procedures. Many commenters stated that the cost of each of the services is at least $950, which is the current payment rate for these services. Other commenters noted that only 40 claims have been received for each service, which they believe is an insufficient number of claims to estimate the cost for these services. Response: We recognize that software-based technologies are rapidly evolving, like the product used for both CPT code 0648 and CPT code 0649T. As noted in our comment solicitation on payment policy for software as a service (SaaS) procedures in the CY 2023 OPPS final rule (87 FR 72035 and 72036), we are considering for future rulemaking whether specific adjustments to payment policies and rate calculations are necessary to more accurately and appropriately pay for these products and services across settings of care. CMS remains open to feedback on these issues and welcomes engagement from interested parties, including from manufacturers, providers, and beneficiaries. We agree with the commenters that for both CPT code 0648 and CPT code 0649T, we should wait for more claims data before adjusting the current payment rates for these services. Comment: One commenter supported our proposal because it would help lower the cost of non-invasive liver evaluations performed for liver fibrosis and liver fat quantification by encouraging providers to use a broader array of diagnostic approaches. Response: We appreciate the support of the commenter for our original proposal, but we are adopting a final policy not to change the payment rates for CPT code 0648T and CPT code 0649T in CY 2024. After consideration of the public comments we received, we are implementing our proposal with modifications. We will use our equitable adjustment authority under section 1833(t)(2)(E) to continue to assign CPT codes 0648T and 0649T to New Technology APC 1511 (New Technology-- Level 11 ($901-$1,000) with a payment rate of $950.50. Please refer to Table 29 below for the final OPPS New Technology APC and status indicator assignments for CPT codes 0648T and 0649T for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule via the internet on the CMS website. [[Page 81635]] [GRAPHIC] [TIFF OMITTED] TR22NO23.047 BILLING CODE 4150-28-C j. Minimally Invasive Glaucoma Surgery (MIGS) (APC 5493) 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 (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; without endoscopic cyclophotocoagulation) or 66984 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., 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 (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) and 66991 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification); with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more); 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 anterior segment aqueous drainage device without concomitant cataract removal. For CY 2022, we finalized the assignment of CPT codes 66989 and 66991 to New Technology APC 1563 (New Technology--Level 26 ($4,001- $4,500)). We stated that we believed 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 explained that we did not believe we had the necessary information on the costs associated with CPT codes 66989 and 66991 to assign them to a clinical APC at that time. We maintained these APC assignments for CY 2023. For CY 2023, the payment rates were based on claims data submitted between January 1, 2021, and December 31, 2021, and processed on or before June 30, 2022, and CCRs, if available. Because CPT codes 66989 and 66991 were [[Page 81636]] effective January 1, 2022, and we had no claims data for CY 2022, we finalized continued assignment of CPT codes 66989 and 66991 to New Technology APC 1563. For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. For CY 2024, based on our analysis of claims data, we found a total of 898 single frequency claims and an estimated geometric mean cost of $5,241.55 for CPT code 66989 and a total of 5,576 single frequency claims and an estimated geometric mean cost of $4,957.01 for CPT code 66991. Given the claims volume, we believe it is appropriate to reassign the service to a clinical APC using our regular process of using the most recent year of claims data for a procedure. Upon review, we determined that the most appropriate clinical APC family for CPT codes 66989 and 66991 would be the Intraocular Procedures APC family (APC 5491 through 5495). However, there was a large payment rate difference between the level 2 Intraocular Procedures APC (APC 5492), which has a payment rate of $3,970.62, and the level 3 Intraocular Procedures APC (APC 5493), which has a payment rate of $14,067.62. Assigning CPT codes 66989 and 66991 to either APC 5492 or 5493 would result in a payment rate that would not reflect the cost for these procedures. Therefore, given the significant difference in payment between APC 5492 and APC 5493, we believe it is appropriate to restructure the Intraocular Procedures APC family. Specifically, we proposed to create a sixth level in the Intraocular Procedures APC family by dividing APC 5492 into two APCs--an APC for services with a geometric mean cost of less than $5,000 and an APC for services with a geometric mean cost of greater than, or equal to, $5000. We believe that the creation of an additional level in the Intraocular APC family will create a smoother distribution of the costs between the different levels based on their resource costs and clinical characteristics. See section III.E. of the CY 2024 OPPS/ASC proposed rule for a detailed discussion of our proposal to restructure the Intraocular Procedures APC family. Reorganizing the Intraocular Procedures APCs would create a proposed Level 3 APC to be referred to as ``Proposed APC 5493'' with a payment rate of approximately $5,110.58, which is closer to the geometric mean of CPT codes 66989 and 66991. We note that, although these services have different estimated geometric mean costs, interested parties have indicated that it is preferable that they be placed within the same APC due to clinical similarity; therefore, we propose to reassign CPT codes 66989 and 66991 to Proposed APC 5493 for CY 2024. The proposed clinical APC and status indicator assignments for CPT codes 66989 and 66991 are found in Table 30. [[Page 81637]] [GRAPHIC] [TIFF OMITTED] TR22NO23.048 Comment: We received three comments in support of our proposal to reassign CPT codes 66989 and 66991 to Proposed APC 5493 for CY 2024. Response: We appreciate the commenters' support for our proposals. After consideration of the public comments we received, we are finalizing our proposal without modification. Please refer to Table 31 below for the final OPPS New Technology APC and status indicator assignment for CPT codes 66989 and 66991. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [[Page 81638]] [GRAPHIC] [TIFF OMITTED] TR22NO23.049 k. Scalp Cooling (APC 1514) CPT code 0662T (Scalp cooling, mechanical; initial measurement and calibration of cap) became effective on July 1, 2021, to describe initial measurement and calibration of a scalp cooling device for use during chemotherapy administration to prevent hair loss. 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, interested parties have indicated that there are substantial resource costs of around $1,900 to $2,400 associated with calibration and fitting of the cap. 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, for example, 6 or 18 sessions, HOPDs should report CPT 0662T only once for that 6 or 18 therapy sessions. For CY 2022, we assigned CPT code 0662T to APC New Technology 1520 (New Technology--Level 20 ($1801-$1900)) with a payment rate of $1,850.50. For CY 2023, we did not have any claims data; so, we continued to assign CPT code 0662T to APC 1520. For CY 2024, the OPPS payment rates are proposed to be based on available [[Page 81639]] CY 2022 claims data. The Scalp Cooling service became effective in the OPPS in CY 2022, and we have identified 11 single frequency paid claims for CPT code 0662T for CY 2022. As this is below the threshold of 100 claims for a service within a year, we proposed to designate CPT code 0662T as a low volume service under our universal low volume APC policy and to use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign the service to the appropriate New Technology APC. Based on our review of the available claims, the geometric mean cost for CPT code 0662T is $831.16; the median is $797.63; and the arithmetic mean is $1,284.59. Therefore, for CY 2024, we proposed to designate this service as a low volume service under our universal low volume APC policy and reassign CPT code 0662T to APC 1514 (New Technology--Level 14 ($1201-$1300)) with a payment rate of $1,250.50 for CY 2024 based on the arithmetic mean of $1,284.59 as shown in Table 32. [GRAPHIC] [TIFF OMITTED] TR22NO23.050 Comment: Multiple commenters asked that we continue to assign CPT code 0662T to APC New Technology 1520 (New Technology--Level 20 ($1801- $1900)) with a payment rate of $1,850.50 for CY 2024. The commenters believe that 12 claims are not enough data to determine the cost of the procedure and that we should wait for more paid claims for the service before reducing payment for the service. Commenters stated that they had concerns with how hospital outpatient departments were billing CPT code 0662T and believed that they were incorrectly billing for the service. Response: We disagree with the commenters. First, it is generally not our policy to judge the accuracy of provider coding and charging for purposes of ratesetting. We rely on hospitals and providers to accurately report the use of HCPCS codes in accordance with their code descriptors, and CPT and CMS instructions, and to report services accurately on claims and charges and costs for the services on their Medicare hospital cost report. The 12 claims for CPT code 0662T have a geometric mean of around $833 which is over $1,000 below the current $1,850.50 payment rate for the service. While there may be some future variation with the geometric mean for this service, it is likely to be closer to $830 than $1,850. CPT code 0662T is eligible to be evaluated through the new technology service low volume APC policy and has a median of $780.47, an arithmetic mean of $1,217.74, and a geometric mean of $832.96. Therefore, we will assign CPT code 0662T to the APC we proposed, APC 1514 (New Technology--Level 14 ($1201-$1300)) with a payment rate of $1,250.50 based on the updated arithmetic mean for the service of $1,217.74. After consideration of the public comments we received, we are implementing our proposal without modification. Please refer to Table 33 below for the final OPPS New Technology APC and status indicator assignment for CPT code 0662T. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [[Page 81640]] [GRAPHIC] [TIFF OMITTED] TR22NO23.051 l. Optellum Lung Cancer Prediction (LCP) (APC 1508) CPT codes 0721T (Quantitative computed tomography (CT) tissue characterization, including interpretation and report, obtained without concurrent CT examination of any structure contained in previously acquired diagnostic imaging) and 0722T (Quantitative computed tomography (CT) tissue characterization, including interpretation and report, obtained with concurrent CT examination of any structure contained in the concurrently acquired diagnostic imaging dataset (list separately in addition to code for primary procedure)) became effective July 1, 2022, and are associated with the Optellum LCP technology. The Optellum LCP applies an algorithm to a patient's CT scan to produce a raw risk score for a patient's pulmonary nodule. The physician uses the risk score to quantify the risk of lung cancer and to determine what the next management step should be for the patient (for example, CT surveillance versus invasive procedure). For CY 2023, we assigned CPT codes 0721T and 0722T to APC New Technology 1508 (New Technology--Level 8 ($601-$700)). For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. There are no claims available for CPT codes 0721T and 0722T. Therefore, for CY 2024, we proposed to continue assigning CPT codes 0721T and 0722T to New Technology APC 1508. Please refer to Table 34 below for the proposed OPPS New Technology APC and status indicator assignment for HCPCS codes 0721T and 0722T for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.052 We did not receive any public comments on our proposal and are finalizing it without modification. HCPCS codes 0721T and 0722T will be assigned to New Technology APC 1508 with a status indication of ``S'' for CY 2024. Please refer to Table 35 below for the final OPPS New Technology APC and status indicator assignment for CPT [[Page 81641]] codes 0721T and 0722T. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.053 m. Quantitative Magnetic Resonance Cholangiopancreatography (QMRCP) (APC 1511) Effective July 1, 2022, CPT codes 0723T (Quantitative magnetic resonance cholangiopancreatography (QMRCP) including data preparation and transmission, interpretation and report, obtained without diagnostic magnetic resonance imaging (MRI) examination of the same anatomy (eg, organ, gland, tissue, target structure) during the same session) and 0724T (Quantitative magnetic resonance cholangiopancreatography (QMRCP), including data preparation and transmission, interpretation and report, obtained with diagnostic magnetic resonance imaging (MRI) examination of the same anatomy (eg, organ, gland, tissue, target structure) (list separately in addition to code for primary procedure)) are associated with the QMRCP Software as a medical Service (SaaS). The service performs quantitative assessment of the biliary tree and gallbladder. It uses a proprietary algorithm that produces a three-dimensional reconstruction of the biliary tree and pancreatic duct and also provides precise quantitative information of biliary tree volume and duct metrics. For CY 2023, we assigned CPT codes 0723T and 0724T to New Technology APC 1511 (New Technology--Level 11 ($900-$1,000)). For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. For CPT code 0723T, there were no claims during this time period. Because there are no claims available, we proposed to continue to assign CPT code 0723T to New Technology APC 1511 with a payment rate of $950.50. For CPT code 0724T, there was only one claim for CY 2022. As this is below the threshold of 100 claims for a service within a year, we explained that we could propose to designate CPT code 0724T as a low volume service under our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign the service to an appropriate New Technology APC. Because there is only one claim available, the geometric mean, arithmetic mean, and median costs are estimated to be $26 for this service. However, we explained that because there is only a single claim for CPT code 0724T, the single claim available appears to be an outlier based on the cost information we received from the manufacturer. Therefore, we stated that we had concerns that the universal low volume APC policy calculations would not accurately capture the cost of the service. Therefore, for CY 2024, we proposed to continue assigning CPT code 0724T to New Technology APC 1511 with a payment rate of $950.50. Please refer to Table 36 below for the proposed OPPS New Technology APC and status indicator assignment for HCPCS codes 0723T and 0724T for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 81642]] [GRAPHIC] [TIFF OMITTED] TR22NO23.054 We did not receive any public comments on our proposal and are finalizing it without modification. HCPCS codes 0723T and 0724T will be assigned to New Technology APC 1511 with a status indication of ``S'' for CY 2024. Please refer to Table 37 below for the final OPPS New Technology APC and status indicator assignment for HCPCS codes 0723T and 0724T. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [[Page 81643]] [GRAPHIC] [TIFF OMITTED] TR22NO23.055 n. CardiAMP (APC 1590) The CardiAMP cell therapy IDE studies are two randomized, double- blinded, controlled IDE studies: the CardiAMP Cell Therapy Chronic Myocardial Ischemia Trial \9\ and the CardiAMP Cell Therapy Heart Failure Trial.\10\ The two trials are designed to investigate the safety and efficacy of autologous bone marrow mononuclear cells treatment for the following: (1) patients with medically refractory and symptomatic ischemic cardiomyopathy; and (2) patients with refractory angina pectoris and chronic myocardial ischemia. On April 1, 2022, we established HCPCS code C9782 to describe the CardiAMP cell therapy IDE studies and assigned HCPCS code C9782 to APC 1574 (New Technology-- Level 37 ($9,501-$10,000)) with the status indicator ``T.'' We subsequently revised the descriptor for HCPCS code C9782 to: (Blinded procedure for New York Heart Association (NYHA) Class II or III heart failure, or Canadian Cardiovascular Society (CCS) Class III or IV chronic refractory angina; transcatheter intramyocardial transplantation of autologous bone marrow cells (e.g., mononuclear) or placebo control, autologous bone marrow harvesting and preparation for transplantation, left heart catheterization including ventriculography, all laboratory services, and all imaging with or without guidance (e.g., transthoracic echocardiography, ultrasound, fluoroscopy), all device(s), performed in an approved Investigational Device Exemption (IDE) study) to clarify the inclusion of the Helix transendocardial injection catheter device in the descriptor. Additionally, we determined that APC 1590 (New Technology--Level 39 ($15,001-$20,000)) most accurately accounted for the resources associated with furnishing the procedure described by HCPCS code C9782. --------------------------------------------------------------------------- \9\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial of Autologous Bone Marrow Cells Using the CardiAMP Cell Therapy System in Patients With Refractory Angina Pectoris and Chronic Myocardial Ischemia.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT03455725?term=NCT03455725&rank=1. \10\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial of Autologous Bone Marrow Mononuclear Cells Using the CardiAMP Cell Therapy System in Patients With Post Myocardial Infarction Heart Failure.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT02438306. --------------------------------------------------------------------------- For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. There are no available claims for ratesetting for CY 2024. Therefore, for CY 2024, we proposed to continue assigning HCPCS code C9782 to New Technology APC 1590 with a payment rate of $17,050.50. Please refer to Table 38 below for the proposed OPPS New Technology APC and status indicator assignment for HCPCS code C9782 for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 81644]] [GRAPHIC] [TIFF OMITTED] TR22NO23.056 We did not receive any public comments on our proposal and are finalizing it without modification. HCPCS code C9782 will be assigned to New Technology APC 1590 with a status indication of ``T'' for CY 2024. Please refer to Table 39 below for the final OPPS New Technology APC and status indicator assignment for CPT code C9782. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.057 [[Page 81645]] o. Surfacer[supreg] Inside-Out[supreg] Access Catheter System (APC 1534) HCPCS code C9780 (Insertion of central venous catheter through central venous occlusion via inferior and superior approaches (e.g., inside-out technique), including imaging guidance) describes the procedure associated with the use of the Surfacer[supreg] Inside- Out[supreg] Access Catheter System that is designed to address central venous occlusion. HCPCS code C9780 was established on October 1, 2021, and since its establishment the code has been assigned to New Technology APC 1534 (New Technology--Level 34 ($8001-$8500)). For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. Although HCPCS code C9780 was effective October 1, 2021, we have no claims data at this time. Because we have no claims data available, for CY 2024, we proposed to continue to assign HCPCS code C9780 to APC 1534 with a proposed payment rate of $8,250.50 as shown in Table 40. [GRAPHIC] [TIFF OMITTED] TR22NO23.058 We did not receive any public comments on our proposal and are finalizing it without modification. There are no paid claims for the service described by HCPCS code 9780 for CY 2024. Therefore, we will continue to assign this service to APC 1534 with a proposed payment rate of $8,250.50. Please refer to Table 41 below for the final OPPS New Technology APC and status indicator assignment for HCPCS code C9780 for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.059 p. Insertion or Replacement of Neurostimulator System for Treatment of Central Sleep Apnea; Complete System (APC 1580) HCPCS code 0424T (Insertion or replacement of a neurostimulator system for treatment of central sleep apnea; complete system (transvenous placement of right or left stimulation lead, sensing lead, implantable pulse generator)) is associated with the use of the Remede[supreg] System, which is used to treat adult patients with moderate to severe Central Sleep Apnea. HCPCS code 0424T was first effective in January 1, 2016, and subsequently assigned to Comprehensive APC 5464 (Neurostimulator and Related Procedures APC-- Level 4). For CY 2021, we created a 5-level structure for the Neurostimulator and Related Procedure APC series, and consequently, assigned HCPCS code 0424T to the highest level in the series: Comprehensive APC 5465 (Neurostimulator & Related Procedures APC--Level 5). For CY 2023, we proposed to continue the 5-level structure for the Neurostimulator and Related Procedure APC series, while also soliciting comment on the creation of an additional Level 6 APC in the series. In the CY 2023 final rule with comment period, we finalized our proposal to continue the 5-level APC structure based on a determination that [[Page 81646]] the existing structure remained appropriate based on clinical and cost characteristics. However, we also recognized that CPT code 0424T was not appropriately assigned to the Comprehensive APC 5465 based on a significant difference between its geometric mean cost and that of the APC. Therefore, for CY 2023, we finalized the assignment of HCPCS code 0424T to New Technology APC 1581 (New Technology--Level 44 ($50,001- $60,000)). For CY 2024, the OPPS payment rates are proposed to be based on available CY 2022 claims data. There are only 30 claims for HCPCS code 0424T available during this time period. As this is below the threshold of 100 claims for a service within a year, we propose to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign HCPCS code 0424T to the appropriate New Technology APC. Considering the available claims data for HCPCS code 0424T, the arithmetic mean is $49,468; the median is $48,285; and the geometric mean cost is $44,287. Of these, the arithmetic mean is the statistical methodology that estimates the highest cost for the service. The payment rate calculated using this methodology falls within the cost band for New Technology APC 1580 (New Technology--Level 43 ($40,001-$50,000)) with a payment rate of $45,000.50. Therefore, for CY 2024, we proposed to assign HCPCS code 0424T to New Technology APC 1580. We note that for the CY 2024 update, the CPT Editorial Panel is deleting HCPCS code 0424T and replacing it with placeholder code 3X008 effective January 1, 2024. Consequently, we proposed to assign HCPCS code 0424T to status indicator ``D'' to indicate the code will be deleted and assigning its replacement code, specifically, placeholder code 3X008, to APC 1580 for CY 2024. For placeholder code 3X008, we stated the final 5-digit CPT code number would be listed in the CY 2024 OPPS/ASC final rule with comment period. This information is summarized in Table 42. [GRAPHIC] [TIFF OMITTED] TR22NO23.060 Comment: One commenter, the manufacturer, claimed that in CY 2022 two of the 21 paid claims for CPT code 0424T were inappropriately billed by hospitals that according to the manufacturer's records could not have purchased the device used in the procedure described by CPT code 0424T. The manufacturer asked that we exclude the two claims from our analysis to determine the payment rate for the procedure. Response: We appreciate the comment, but as have regularly stated since the establishment of the OPPS, it is the responsibility of providers and other interested parties to work with the MACs to fix any claims that may have been billed or paid inappropriately for a service. In this case, and in most cases, we assume that if a paid claim has been present on the claims file for several months that the claim as been paid appropriately. Therefore, we will not remove the two claims in question when performing our new technology low volume analyses to determine the payment rate for HCPCS code 0424T. After consideration of the public comments we received, we are implementing our proposal without modification. Our updated low volume analysis for HCPCS code 0424T finds that the median for paid claims for the service is $47,387.06, the arithmetic mean is $47,967.41, and the geometric mean is $43,063.94. The highest amount of the three values is the arithmetic mean of $47,967.41. Therefore, the service described by 0424T and placeholder code 3X008 will be assigned to New Technology APC 1580 [[Page 81647]] (New Technology--Level 43 ($40,001-$50,000)) with a payment rate of $45,000.50. In addition, placeholder code 3X008 has been replaced with CPT code 33276 (Insertion of phrenic nerve stimulator system (pulse generator and stimulating lead[s]), including vessel catheterization, all imaging guidance, and pulse generator initial analysis with diagnostic mode activation, when performed). Please refer to Table 43 below for the final OPPS New Technology APC and status indicator assignment for CPT code 33276 for CY 2024. The final CY 2024 payment rates can be found in Addendum B to this final rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.061 q. Cleerly Labs (APC 1511) Cleerly Labs is a Software as a Service (SaaS) that assesses the extent of coronary artery disease severity using Atherosclerosis Imaging-Quantitative Computer Tomography (AI-QCT). This procedure is performed to quantify the extent of coronary plaque and stenosis in patients who have undergone coronary computed tomography analysis (CCTA). The AMA CPT Editorial Panel established the following four codes associated with this service, effective January 1, 2021: 0623T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic; angiography; data preparation and transmission, computerized analysis of data, with review of computerized analysis output to reconcile discordant data, interpretation and report. 0624T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; data preparation and transmission. 0625T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; computerized analysis of data from coronary computed tomographic angiography. 0626T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; review of computerized analysis output to reconcile discordant data, interpretation and report. In the CY 2021 OPPS/ASC final rule with comment period, we assigned the CPT codes 0623T, 06234T, 0625T, and 0626T to status indicator ``E1'' to indicate that the codes are not payable by Medicare when submitted on outpatient claims because the service had not received FDA clearance at the time of the assignment. For the October 2022 update, based on our review of the New Technology application submitted to CMS for OPPS payment consideration, we evaluated the current status indicator assignments for CPT codes 0623T-0626T. Based on the technology and its potential utilization in the HOPD setting, our evaluation of the service, as well as input from our medical advisors, we assigned CPT code 0625T to a separately payable status. Specifically, in the October 2022 OPPS Update CR (Change Request 12885, Transmittal 11594, dated September 9, 2022), we reassigned CPT code 0625T to status indicator ``S'' (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment) and APC 1511 (New Technology--Level 11 ($900-$1000)) with a payment rate of $950.50, effective October 1, 2022, following our review of the manufacturer's New Technology APC application. For CY 2024, the OPPS payment rates were proposed to be based on available CY 2022 claims data. There are 90 claims for CPT code 0625T during this time period. As this is below the threshold of 100 claims for a service within a year, we explained that we could propose to designate CPT code 0625T as a low volume service under our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign code 0625T to the appropriate New Technology APC. We found the geometric mean cost for the service to be approximately $3.70, the [[Page 81648]] arithmetic mean cost to be approximately $4.10, and the median cost to be approximately $3.50. Under our universal low volume APC policy, we would use the greatest of the statistical methodologies, the arithmetic mean, to assign CPT code 0625T to New Technology 1491 (New Technology Level 1A--(0-$10)) with a payment rate of $5.00. However, we acknowledged that, because CPT code 0625T was only made separately payable as part of the OPPS in October 2022, and, therefore, the claims available only reflect two months of data, we were concerned that we do not have sufficient claims data to justify reassignment to another New Technology APC (66 FR 69902). Therefore, consistent with our current policy to retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment (66 FR 59902), for CY 2024 we proposed to maintain CPT code 0625T's current assignment. Specifically, for CY 2024, we proposed to continue to assign CPT code 0625T to New Technology APC 1511 with a payment rate of $950.50. Please refer to Table 44 below for the proposed OPPS New Technology APC and status indicator assignment for CPT code 0625T for CY 2024. The proposed CY 2024 payment rates can be found in Addendum B to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.062 Comment: We received comments supporting our proposal for 0625T. Commenters stated that they agree with our reasoning that there are limited claims data available because CPT code 0625T was only made separately payable as part of the OPPS in October 2022. One commenter noted that there may also be a limited number of claims in CY 2023 and urged CMS to be cognizant of that in developing the CY 2025 payment rate for CPT code 0625T. The commenter also stated that there will likely be sufficient CY 2024 claims data for CMS to consider a different APC assignment for CPT code 0625T for CY 2026 with the availability of a new device that may be utilized with service described by CPT code 0625T. Response: We thank the commenters for their support of our proposal. We note that the policy being finalized in this final rule with comment with regard to CPT code 0625T applies only for CY 2024. Regarding the APC assignments for CPT code 0625T for future years, we will similarly consider the claims data available and public comments received in selecting the APC assignment for the code. We note that based on updated claims data available for this final rule with comment period, the low volume policy calculations have changed slightly. However, the concerns stated in the CY 2024 OPPS/ASC proposed rule regarding having insufficient claims data to justify reassignment to another New Technology APC remain. Therefore, after consideration of the public comments we received and the limited claims data available, we are finalizing the APC assignment for CPT code 0625T as proposed. Please refer to Table 45 below for the final OPPS New Technology APC and status indicator assignment for CPT code 0625T. The final CY 2024 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [[Page 81649]] [GRAPHIC] [TIFF OMITTED] TR22NO23.063

D. Universal Low Volume APC Policy for Clinical and Brachytherapy APCs

In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743 through 63747), we adopted a policy to designate clinical and brachytherapy APCs as low volume APCs if they have fewer than 100 single claims that can be used for ratesetting purposes in the claims year used for ratesetting for the prospective year. For the CY 2024 OPPS/ASC proposed rule, CY 2022 claims are generally the claims used for ratesetting; and clinical and brachytherapy APCs with fewer than 100 single claims from CY 2022 that can be used for ratesetting would be low volume APCs subject to our universal low volume APC policy. As we stated in the CY 2022 OPPS/ASC final rule with comment period, we adopted this policy to reduce the volatility in the payment rate for those APCs with fewer than 100 single claims. Where a clinical or brachytherapy APC has fewer than 100 single claims that can be used for ratesetting, under our low volume APC payment adjustment policy, we determine the APC cost as the greatest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data. We excluded APC 5853 (Partial Hospitalization for CMHCs) and APC 5863 (Partial Hospitalization for Hospital-based PHPs) from our universal low volume APC policy given the different nature of policies that affect the partial hospitalization program. We also excluded APC 2698 (Brachytx, stranded, nos) and APC 2699 (Brachytx, non-stranded, nos) as our current methodology for determining payment rates for non- specified brachytherapy sources is appropriate. Based on claims data available for the CY 2024 OPPS/ASC proposed rule, we proposed to designate five brachytherapy APCs and five clinical APCs as low volume APCs under the OPPS. The five brachytherapy APCs and five clinical APCs meet our criteria of having fewer than 100 single claims in the claims year used for ratesetting (CY 2022 for the CY 2024 OPPS/ASC proposed rule). Eight of the ten APCs were designated as low volume APCs in CY 2023. Based on data for the CY 2024 OPPS/ASC proposed rule, APC 2642 (Brachytx, stranded, C-131) now meets our criteria to be designated a Low Volume APC; and we proposed to designate it as such for CY 2024. Further, with the proposed addition of Level 6 Intraocular APC (APC 5496), as discussed in section III.E of the CY 2024 OPPS/ASC proposed rule, and the reassignment of certain intraocular procedures from Level 2 to Level 3, the Level 4 Intraocular APC (which was the Level 3 Intraocular APC in CY 2023), now meets our criteria to be designated a Low Volume APC; and we proposed to designate it as such for CY 2024. Table 46 includes the APC geometric mean cost without the low volume APC designation, that is, if we calculated the geometric mean cost based on CY 2022 claims data available for ratesetting; the median, arithmetic mean, and geometric mean cost using up to 4 years of claims data based on the APC's designation as a low volume APC; and the statistical methodology we proposed to use to determine the APC's cost for ratesetting purposes for CY 2024. As discussed in our CY 2022 OPPS/ ASC final rule with comment period (86 FR 63751 through 63754), given our concerns with CY 2020 claims data as a result of the PHE, the 4 years of claims data we proposed to use to calculate the costs for these APCs are CYs 2018, 2019, 2021, and 2022. [[Page 81650]] [GRAPHIC] [TIFF OMITTED] TR22NO23.064 Comment: One commenter requested clarification about the meaning of the statement ``using up to four years of data'' regarding the calculation of the geometric mean, arithmetic mean, and median for the universal low volume APC policy for clinical and brachytherapy APCs (88 FR 49627). The commenter also requested more information on why there was a difference in the geometric mean amount reported in the CY 2024 OPPS proposed rule in Table 27 for APC 5244 (Level 4 Blood Product Exchanges and Related Services), which was $52,105 based on claims from CY 2022 as compared to the geometric mean reported for APC 5244 in the 2 times rule discussion for the CY 2024 OPPS proposed rule, which was $71,154 and also based on claims from CY 2022 (88 FR 49628). Response: When we state that we are using up to four years of data for the universal low volume APC policy for clinical and brachytherapy APCs, we mean that we will use four years of data [[Page 81651]] if four years of data is available for an APC, but we may need to use between one and three years of data if fewer years of data are available. We will use the greatest number of years of data available, unless there is a substantial reason not to use a particular year of data. The data will also be for consecutive years unless, again, there is substantial reason not to use a particular year of data. For example, we stated in the CY 2024 OPPS proposed rule (88 FR 49627) that we had concerns with CY 2020 claims data as a result of the COVID-19 PHE, and that we were therefore using data from CYs 2018, 2019, 2021, and 2022. The commenter correctly noted that we inadvertently provided an outdated geometric mean cost for APC 5244 based on only CY 2022 claims data. Based on data available for the proposed rule, the correct geometric mean cost without low volume APC designation that should have been displayed in Table 27 for APC 5244 was $71,154. Comment: One commenter supports the universal low volume APC policy for clinical and brachytherapy APCs in general but requests that the policy only be invoked when application of the universal low volume policy would increase the payment amount for the low-volume APC. Response: The purpose of the universal low volume APC policy for clinical and brachytherapy APCs is to bring payment stability to these low-volume APCs rather than to ensure higher payment rates. With payment stability, whether it is limiting annual increases or decreases in the payment rate, providers are better able to plan what their expenses and compensation will be for performing certain low-volume services, and they can use that information to help budget for the cost of these low-volume services over several years. After consideration of the public comments we received, we are implementing our proposals without modification except where we are updating the payment rates for low-volume clinical and brachytherapy APCs with claims data updated through June 20, 2023.

1. Ablation of Bone Tumors CPT Code 20982 (APC 5115)

CPT code 20982 (Ablation therapy for reduction or eradication of 1 or more bone tumors (eg, metastasis) including adjacent soft tissue when involved by tumor extension, percutaneous, including imaging guidance when performed; radiofrequency) describes a primarily palliative procedure that reduces the size of bone tumors and lessens the pain from the tumors. For the CY 2024 OPPS proposed rule, CPT code 20982 had a geometric mean of around $11,773 and we proposed to assign the procedure to APC 5114 (Level 4 Musculoskeletal Procedures), which has a payment rate of around $6,974. Comment: One commenter asked that we reassign CPT code 20982 from APC 5114 to APC 5115 (Level 5 Musculoskeletal Procedures) with a payment rate of around $13,421. The commenter noted that this bone tumor ablation procedure was one of the highest cost procedures assigned to APC 5114 and that the payment rate for APC 5114 only covered around 60 percent of the cost of CPT code 20982. The commenter also noted that while the bone tumor ablation procedure would be overpaid in APC 5115, the additional payment was only 13 percent of the cost of CPT code 20982. Response: We agree with the commenter. In addition to the underpayment and overpayment amounts cited by the commenter, we also found that if CPT code 20982 had enough claims to be a significant procedure in APC 5114, it would be in violation of the 2 times rule by over $1,000 as two times the lowest cost significant procedure in that APC was around $10,700 while the payment rate for CPT code 20982 is around $11,773. After consideration of the public comments we received, we are assigning CPT code 20982 to APC 5115 (Level 5 Musculoskeletal Procedures). Table 47 shows the finalized status indicator and APC assignment for this procedure code. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.065

2. Administration of Lacrimal Ophthalmic Insert Into Lacrimal

Canaliculus (APC 5503) Dextenza, which is described by HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg), is a drug indicated for ``the treatment of ocular inflammation and pain following ophthalmic surgery'' and for ``the treatment of ocular itching associated with allergic conjunctivitis.'' \11\ --------------------------------------------------------------------------- \11\ Dextenza. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf. --------------------------------------------------------------------------- The manufacturer of the drug previously asserted that this drug is administered and described by CPT code 0356T (Insertion of drug-eluting implant (including punctal dilation and implant removal when performed) into lacrimal canaliculus, each). Interested parties also previously stated that Dextenza is inserted in a natural opening in the eyelid (called the punctum) and that the drug is designed [[Page 81652]] to deliver a tapered dose of dexamethasone to the ocular surface for up to 30 days. CPT code 0356T was deleted December 31, 2021, and replaced with CPT code 68841 (Insertion of drug-eluting implant, including punctal dilation when performed, into lacrimal canaliculus, each), effective January 1, 2022. Interested parties currently assert that the drug, Dextenza, is administered and described by CPT code 68841. We refer readers to the CY 2023 OPPS/ASC final rule with comment period for a detailed history on CMS payment assignments for CPT code 0356T and CPT code 68841 (87 FR 71840). In the CY 2024 OPPS/ASC proposed rule (87 FR 49765), we proposed that Dextenza (HCPCS code J1096) continues to function as a surgical supply that meets the criteria described at Sec. 416.174, and we proposed to continue to make separate payment for Dextenza as a non- opioid pain management drug that functions as a supply in a surgical procedure under the ASC payment system for CY 2024. We proposed that payment for Dextenza would continue to be packaged when furnished in the HOPD but paid separately when furnished in an ASC. We proposed to package HCPCS code J1096 under the OPPS and assign the code to a status indicator of ``N'' (packaged). This is consistent with our packaging policy outlined at 42 CFR 419.2(b), which lists the types of items and services for which payment is packaged under the OPPS. Specifically, Sec. 419.2(b)(16) includes drugs and biologicals that function as supplies when used in a surgical procedure as packaged costs. Historically, we have 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). For CY 2024, we proposed to continue to assign CPT code 68841 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures) with a proposed payment rate of $2,249.64. We also proposed to continue to assign CPT code 68841 OPPS status indicator ``Q1'' and an ASC payment indicator of ``N1.'' The issue of payment for CPT code 68841 was brought to the Advisory Panel on Hospital Outpatient Payment (also known as HOP Panel) in 2023 for CY 2024 rulemaking. At the August 2023 meeting, based on the information presented, the Panel recommended that CMS assign HCPCS code 68841 a status indicator (SI) of ``J1'' (Hospital Part B Services Paid Through a Comprehensive APC) as they believed this assignment would treat CPT code 68841 similarly to other clinically related codes. Comment: Several commenters stated that increased payment, and separate payment, for CPT code 68841, the code that describes the administration of the drug, was required to ensure continued beneficiary access to the drug Dextenza (HCPCS code J1096) in both the HOPD and ASC settings. Some commenters did not make a specific suggestion as to the final APC assignment but contended that the proposed payment was inadequate. Commenters cited various payment rates, such as $500, $1,200, $2,350, and $2,500 as potential appropriate payment rates for CPT 68841 under the OPPS and ASC payment system. Commenters emphasized that a change was needed to ensure adequate payment in the ASC setting, where the commenters stated the majority of these Dextenza administrations occur. Several commenters argued for a change in the OPPS status indicator and the ASC payment indicator to allow separate payment for CPT code 68841. Some commenters stated that a ``Q1'' status indicator (STV- Packaged Codes) was inappropriate but did not provide an alternative suggestion. However, some other commenters suggested assignment to a ``J1''(Hospital Part B Services Paid Through a Comprehensive APC) status indicator. One commenter contended that a status indicator of ``S'' (Procedure or Service, Not Discounted When Multiple) or ``T'' (Procedure or Service, Multiple Procedure Reduction Applies) would also be appropriate but believed that ``J1'' would be the most accurate and would generate consistency among APC 5503, as all other codes within APC 5503 are assigned to status indicator ``J1.'' Several commenters pointed to the clinical importance of providing Dextenza to patients, noting that it reduces ocular pain and inflammation and reduces the burden of topical eyedrop application. Additionally, commenters stated that they usually perform the procedure to administer Dextenza in conjunction with ophthalmic surgeries. Commenters believed the procedure is a distinct surgical procedure that requires additional operating room time and resources. These commenters believed that the cataract surgery is conducted and concluded, as evidenced by the removal of the surgical drape and speculum, and then the Dextenza administration procedure begins. The commenters further mentioned that additional payment was needed to compensate for a variety of tasks associated with the administration of Dextenza, such as ordering, billing, counting inventory, technician training, surgical tools, and instrument sterilization, among others. Commenters also pointed to the fact that there are 112 single frequency claims as evidence that both Dextenza and its administration should be paid separately as there is no other procedure on the claim. Overall, 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 agree with commenters that it is still appropriate to assign CPT code 68841 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures). For the CY 2024 OPPS update, based on claims submitted between January 1, 2022, and December 30, 2022, processed through June 30, 2023, our analysis of the latest claims data for this final rule with comment period shows a geometric mean cost of approximately $1,993.20 for predecessor CPT code 68841 based on 172 single claims, which is comparable to the geometric mean cost of about $2,288.49 for APC 5503. Based on the data, we continue to believe that assignment to APC 5503 for CPT code 68841 is appropriate. We also continue to believe that assignment of CPT code 68841 to an OPPS status indicator of ``Q1'' and an associated ASC payment indicator of ``N1,'' is appropriate. We continue to believe that CPT code 68841 is mostly performed during ophthalmic surgeries, such as cataract surgeries. A status indicator ``Q1,'' indicating a 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 observed clinical patterns as to how the drug is used, we do not agree. Based on claims data, out of over 7,000 total frequency claims, CPT code 68841 is used independently only about 2 percent of the time, [[Page 81653]] meaning that the other 98 percent of the time CPT code 68841 has its payment packaged into the primary procedure with which it is associated. These data reinforce our belief that Dextenza and CPT code 68841 are not furnished independent of a surgical procedure and should be packaged into the primary ophthalmic procedure with which the drug and drug administration are associated. While we recognize that there are some claims that may only include CPT code 68841 without a primary ophthalmic surgery on the claim, we do not believe that this is a frequent occurrence based on our claims data and clinical use patterns; as previously mentioned, our claims data shows that only 172 out of 7,327 claims are performed independently of another primary procedure (only about 2 percent of claims). After consideration of the public comments, we are finalizing our proposal, without modification, to assign CPT code 68841 to APC 5503 with OPPS status indicator ``Q1'' (STVPackaged Codes) for CY 2024, which typically means there will be a packaged APC payment if this code is billed on the same claims as a HCPCS code assigned to status indictor ``S,'' ``T,'' or ``V'' (Clinic or Emergency Department Visit). In addition, based on the OPPS assignments, we are finalizing an ASC payment indicator of ``N1'' (Packaged service/item; no separate payment made) for CPT code 68841 for CY 2024. For the final CY 2024 OPPS payment rates, we refer readers to OPPS Addendum B to this final rule with comment period. In addition, we refer readers to OPPS Addendum D1 to this final rule with comment period for the status indicator definitions for all codes reported under the OPPS. For the final CY 2024 ASC payment rates and payment indicators, we refer readers to Addendum AA and Addendum BB for the ASC payment rates, and Addendum DD1 for the ASC payment indicator and their definitions. The OPPS Addenda B and D1 and ASC Addenda AA, BB, and DD1 are available via the internet on the CMS website.\12\ --------------------------------------------------------------------------- \12\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. --------------------------------------------------------------------------- Please refer to Table 48 for the code descriptor, APC assignment, status indicator assignment, and payment indicator assignment for CPT code 68841 for CY 2024. [GRAPHIC] [TIFF OMITTED] TR22NO23.066 Similar to our rationale outlined for CPT code 68841, we also find it appropriate to package Dextenza (HCPCS code J1096) based on its clinical use patterns. Consistent with our clinical review and commenters' input, we believe this drug is mostly administered during ophthalmic surgeries, such as cataract surgeries. The packaging of this drug is consistent with our regulations at 42 CFR 419.2(b). Specifically, 42 CFR 419.2(b)(16) includes among the items and services for which payment is packaged under the OPPS, drugs and biologicals that function as supplies when used in a surgical procedure. Historically, we have 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). We therefore believe packaging of HCPCS code J1096 is appropriate in the HOPD setting for CY 2024. Although packaged under the OPPS, as discussed in section XIII.E. of this final rule with comment period, we believe Dextenza (HCPCS code J1096), meets the criteria described at Sec. 416.174; and we are finalizing our proposal to make separate payment for Dextenza as a non- opioid pain management drug that functions as a supply in a surgical procedure under the ASC payment system for CY 2024. For more information on the ASC payment for HCPCS code J1096 for CY 2024, refer to section XIII.E. of this final rule with comment period. As a reminder, for OPPS billing, because charges related to packaged services are used for outlier and future rate setting, hospitals are advised to report both CPT code 68841, the administration service, and HCPCS code J1096, the Dextenza drug, on the claim whenever Dextenza is provided in the HOPD setting. It is extremely important that hospitals report all HCPCS codes consistent with their descriptors, CPT and/or CMS instructions and correct coding principles, and all charges for all services they furnish, whether payment for the services is made separately or is packaged. Finally, for the final CY 2024 OPPS payment rates, we refer readers to OPPS Addendum B to this final rule with comment period. In addition, we refer readers to OPPS Addendum D1 to this final rule with comment period for the status indicator definitions for all codes reported under the OPPS. For the final CY 2024 ASC payment rates and payment indicators, we refer readers to Addendum AA and Addendum BB for the ASC payment rates and Addendum DD1 for the ASC payment indicator and their definitions. The OPPS Addenda B and D1 and ASC Addenda AA, BB, and DD1 are available via the internet on the CMS website.\13\ --------------------------------------------------------------------------- \13\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. --------------------------------------------------------------------------- [[Page 81654]]

3. Aquabeam Waterjet Ablation Service CPT Code 0421T (APC 5376)

CPT code 0421T (Transurethral waterjet ablation of prostate, including control of post-operative bleeding, including ultrasound guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included when performed) describes the Aquabeam waterjet ablation service. According to the manufacturer, Aquabeam is for treating lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH) by using a high-velocity water stream to ablate and remove tissue from enlarged prostates. For the OPPS CY 2024 proposed rule, we calculated the geometric mean for CPT code 0421T to be $9,609.07, and we assigned the service to APC 5376 (Level 6 Urology and Related Services), which has a payment rate of $8,947.91. There were 2,375 claims used to calculate the geometric mean for CPT code 0421T. Comment: One commenter, the manufacturer of the Aquabeam system, requested that we assign CPT code 0421T to APC 5377 (Level 7 Urology and Related Services) with a payment rate of $12,712.15 instead of assigning the service to APC 5376 with a payment rate of $8,947.91. The commenter asserts that the Aquabeam procedure has more clinical and resource similarity to procedures in APC 5377 than in APC 5376 because, according to the commenter, the procedures in APC 5377 are device- intensive procedures similar to how the Aquabeam procedure is a device- intensive procedure. The commenter also notes that the Aquabeam procedure is one of the highest cost procedures assigned to APC 5376. Response: We disagree with the commenter. CPT code 0421T is one of the more costly procedures in APC 5376 but it is not the costliest. The cost of the procedure is around $800 more than the payment rate of APC 5376, but it is over $2,700 less than the payment rate of APC 5377. The Aquabeam procedure also does not violate the 2 times rule in its current assignment in APC 5376, and several of the procedures with similar cost to the Aquabeam procedure are device-intensive procedures with a similar percentage device offset as the Aquabeam procedure. Finally, if CPT code 0421T were to be reassigned into APC 5377, its cost would be over $2,000 less than the lowest-cost significant procedure in that APC. After consideration of the public comments we received, we are finalizing our proposal without modification for CPT code 0421T. Table 49 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.067

4. Aquadex[supreg] Ultrafiltration (APC 5241)

CPT code 0692T (Therapeutic ultrafiltration) describes an apheresis procedure through which plasma water and sodium are removed from the blood using the Aquadex[supreg] SmartFlow System. The procedure is indicated in patients who are diagnosed with hypervolemia and are non- responsive to the more traditional treatments such as diuretic medications. CPT code 0692T was established effective January 1, 2022, and since its establishment, the code has been assigned to APC 5241 (Level 1 Blood Product Exchange and Related Services). At the August 21, 2023, HOP Panel Meeting, a presenter provided information to the Panel on the description of the service and the cost of the Aquadex[supreg] Ultrafiltration device and procedure. At the conclusion of the presentation, the presenter advised the Panel to request that CMS reassign CPT code 0692T from APC 5241 to APC 5242. The HOP Panel had no recommendations. For CY 2024, we proposed to maintain the assignment to APC 5241, with a payment rate of $417.32. Comment: We received one comment from the manufacturer requesting that CMS reassign CPT code 0692T from APC 5241 with a payment of $426.24 to APC 5242 (Level 2 Blood Product Exchange and Related Services) with a payment of $1,504.13. The commenter stated that the proposed APC assignment and payment does not accurately reflect the resources, time, and costs necessary to complete the therapeutic ultrafiltration procedure. The commenter pointed out that the current APC assignment consists of mostly transfusion procedures, with CPT code 36430 (Transfusion, blood or blood components) accounting for 99 percent of the more than 200,000 single frequency claims for services assigned to this APC. They also note that there are several apheresis procedures assigned to APC 5242. Response: Under the OPPS, we review our claims data on an annual basis to determine the payment rates. For CY 2024, the OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Because the code was new in 2022, we have very limited claims data (1 claim). However, we note that with all new codes for which we lack pricing information, our policy has been to assign the service to an existing APC based on input from a variety of sources, including, but not limited to, review of the clinical similarity of the [[Page 81655]] service to existing procedures, input from CMS medical advisors, and review of all other information available to us. The OPPS is a prospective payment system that provides payment for groups of services that share clinical and resource use characteristics. Based on our understanding of the service and input from our medical advisors, we do not agree that CPT code 0692T is dissimilar to other services in APC 5241 such that it should be assigned to a different APC. In particular, our medical advisors noted the similarities between platelet apheresis (CPT code 36513) and the therapeutic ultrafiltration procedure. For CY 2024, based on our evaluation, we are finalizing our proposal to continue the assignment to APC 5241 for CPT code 0692T. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 0692T to APC 5241 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

5. Aqueous Shunt Procedure (APC 5492)

For CY 2023, we assigned CPT code 66180 (Aqueous shunt to extraocular equatorial plate reservoir, external approach; with graft) to APC 5492 (Level 2 Intraocular Procedures) with a payment of $3,995.58. For CY 2024, as shown in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule with comment period, we proposed to maintain the APC assignment to APC 5492 with a payment rate of $3,970.62 for CPT code 66180. Comment: One commenter suggested reassigning CPT code 66180 to APC 5493 (Level 3 Intraocular Procedures, with a payment rate of $5,110.58, based on its similarity to CPT code 66179 (Aqueous shunt to extraocular equatorial plate reservoir, external approach; without graft), which is proposed in APC 5493. The commenter explained that CPT code 66180 and CPT code 66179 are very similar procedures but clarified that CPT code 66180 requires additional time and resources to affix the scleral patch graft used in the procedure. Based on their similarity, the commenter urged CMS to reassign CPT code 66179 to APC 5493. Response: While the procedures may be the same, our claims data for this final rule with comment period shows that the resources to perform the procedures are significantly different. For 2024, the OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Based on our evaluation of the claims data, the geometric mean cost for CPT code 66180 is lower than CPT code 66179. Specifically, our claims data show a geometric mean cost of about $4,595 for CPT code 66180 based on 3,124 single claims (out of 3,140 total claims). In contrast, the geometric mean cost for CPT code 66179 is slightly higher at approximately $4,988 based on 134 single claims (out of 135 total claims). The cost range for the significant procedures assigned to APC 5492 is between approximately $3,138 (for CPT code 65820) and $4,694 (for CPT code 66183), while the cost range for the significant procedures assigned to APC 5493 is between about $4,943 (for CPT code 66991) and $5,357 (for CPT code 66989). Based on the cost range for APC 5492 and 5493, we believe that the resource costs and clinical homogeneity for CPT code 66180 are consistent with those procedures in APC 5492, rather than APC 5493. Therefore, we believe we should continue to assign CPT code 66180 to APC 5492. In summary, after consideration of the public comment we received, we are finalizing our proposal, without modification, to continue to assign CPT code 66180 to APC 5492 for CY 2024. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reported under the OPPS. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator meanings for all codes reported under the OPPS. Addenda D1 and Addendum B are available via the internet on the CMS website.

6. Arthrodesis, Sacroiliac Joint, Percutaneous, with Image Guidance,

Including Placement of Intra-Articular Implant(s) (e.g., Bone Allograft[s], Synthetic Device[s]), Without Placement of Transfixation Device (APC 5116) The CPT Editorial Panel established CPT code 27278, to describe arthrodesis, sacroiliac joint, percutaneous, with image guidance, including placement of intra-articular implant(s) (e.g., bone allograft[s], synthetic device[s]), without placement of transfixation device, effective January 1, 2024. Because the final CY 2024 CPT code numbers were not available when we published the proposed rule, the code was listed as placeholder code 2X000 in the OPPS Addendum B of the CY 2024 OPPS/ASC proposed rule. For CY 2024, we proposed to assign CPT code 27278 to status indicator ``J1'' and APC 5116 (Level 6 Musculoskeletal Procedures) with a proposed payment rate of $20,692.25 based on clinical similarity and resource use to the predecessor code 0775T. Comment: One commenter supported our proposal to assign CPT code 27278 to APC 5116 due to clinical similarity and resource use to the predecessor code 0775T. Response: We appreciate the commenter's feedback on this new CPT code and we agree with the commenter's recommendation to finalize the APC assignment. In summary, after reviewing the public comment for the proposal, we are adopting as final our proposal to assign CPT code 27278 to APC 5116. The final CY 2024 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 meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

7. Artificial Iris Insertion Procedures (APC 5496)

For the July 2020 update, the AMA's CPT Editorial Panel established three CPT codes to describe the CustomFlex Artificial Iris device implantation procedure. Table 50 below lists the long descriptors for the codes. In addition to the surgical CPT codes, as discussed in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85990 through 85992), we approved the associated device, specifically, the CustomFlex Artificial Iris, for pass-through status effective January 1, 2021, and established a new category for this device, specifically, HCPCS code C1839 (Iris prosthesis). The designation of pass-through status for the device indicates that, under the OPPS, the device is paid separately in addition to the surgical CPT codes. In the CY 2023 OPPS/ASC final rule with comment period (87 FR 71889), we listed device category HCPCS code C1839 in Table 52 (Devices with Pass-Through Status (Or Adjusted Separate Payment) Expiring At The End of the Fourth Quarter of 2022, In 2023, or In 2024), as one of the device codes whose pass-through status would expire on December 31, 2022. However, section 4141 (Extension of Pass-Through Status Under the Medicare Program for Certain Devices Impacted by COVID-19) of the Consolidated Appropriations Act, 2023 extended pass-through status for a 1-year period beginning on January 1, [[Page 81656]] 2023, for devices whose pass-through status would have ended on December 31, 2022. Consequently, pass-through for HCPCS code C1839 will now expire on December 31, 2023. As listed in Table 50 below, for CY 2023, we assigned HCPCS code C1839 to status indicator ``H'' to indicate that the device is on pass- through status. In addition, we assigned CPT codes 0616T-0618T to APC 5495 (Level 5 Intraocular Procedures) with a payment rate of $18,089.98. For CY 2024, we proposed to reassign device category code C1839 from status indicator ``H'' (device pass-through) to status indicator ``N'' (packaged) since its pass-through status expires on December 31, 2023. With the additional costs from the expired pass- through device, we proposed to reassign CPT codes 0616T, 0617T, and 0618T from APC 5495 to APC 5496 (Level 6 Intraocular APC), which is a Low Volume APC and is discussed in further detail in section III.D of this final rule with comment period. In addition, the discussion related to device HCPCS code C1839 can be found in section IV.b of this final rule with comment period. [GRAPHIC] [TIFF OMITTED] TR22NO23.068 Comment: Some commenters applauded our proposal to reassign CPT codes 0616T, 0617T, and 0618T to APC 5496, and requested that CMS finalize the APC assignment. Response: As listed in Table 46 in section III.D. of this final rule with comment period, APC 5496 is designated as one of the low volume APCs for CY 2024. Based on our review of the claims data for APC 5496, we found the cost for CPT code 0616T to be about $18,080 based on 15 single claims, approximately $12,873 for CPT code 0617T based on 7 claims, and about $17,733 for CPT code 1618T based on 13 single claims. Based on our analysis of the updated data for this final rule, we identified APC 5496 as a Low Volume APC with a cost of $16,990.74, and a final payment amount of $16,547.60 for CY 2024. We believe that APC 5496 is the appropriate assignment for CPT codes 0616T, 0617T, and 0618T based on their clinical characteristic and resource similarity to the procedure in the APC. In summary, after consideration of the public comments, we are finalizing our proposal, without modification, and assigning CPT codes 0616T, 0617T, and 0618T to APC 5496 for CY 2024. Table 51 list the final OPPS SIs and APC for the codes. The final CY 2024 OPPS payment rate 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 status indicator (SI) meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. [[Page 81657]] [GRAPHIC] [TIFF OMITTED] TR22NO23.069

8. Autologous Adipose-Derived Regenerative Cell (ADRC) Therapy for

Partial Thickness Rotator Cuff Tear (APC 5055) Effective July 1, 2022, the AMA's CPT Editorial Panel created two new Category III CPT codes to describe autologous adipose-derived regenerative cell (ADRC) therapy for partial thickness rotator cuff tear: 0717T: Autologous adipose-derived regenerative cell (ADRC) therapy for partial thickness rotator cuff tear; adipose tissue harvesting, isolation and preparation of harvested cells, including incubation with cell dissociation enzymes, filtration, washing, and concentration of ADRCs 0718T: Autologous adipose-derived regenerative cell (ADRC) therapy for partial thickness rotator cuff tear; injection into supraspinatus tendon including ultrasound guidance, unilateral These codes describe a prospective, randomized multicenter pivotal trial of autologous adult adipose-derived regenerative cell (ADRC) injection into partial-thickness rotator cuff tears that is currently in progress. The purpose of this investigation is to evaluate the safety and superior effectiveness in functional improvement in patients with partial-thickness rotator cuff tears (PTRCTs) after the administration of a single injection of adipose-derived regenerative cells (ADRCs) into the partial-thickness rotator cuff tear compared to the administration of a single corticosteroid injection into the associated subacromial space. For CY 2024, we proposed to assign CPT codes 0717T and 0718T to status indicator ``E1'' to indicate that these codes are not paid by Medicare when submitted on outpatient claims (any outpatient bill type) since, at the time, the clinical trial had not been approved by CMS as IDE Category B study. Comment: One commenter requested that we reassign CPT codes 0717T and 0718T from status indicator ``E1'' to status indicator ``J1'' and assign them to APC 5114 (Level 4 Musculoskeletal Procedures) with a proposed payment rate of $6,895.06. The commenter stated that this was the best placement based on clinical and resource coherence. The commenter also stated that this was consistent with their calculation that the total cost of the device was $3,186.11. The commenter stated that the cost of their procedure including the device was $6,316 in 2022. The commenter noted that on August 24, 2023, the CMS Coverage and Analysis Group (CAG) approved their Category B IDE study and included it on the approved list of covered Category B IDE trials. Response: We thank the commenter for the recommendation. Because the clinical trial was approved by CMS as a Category B IDE study on August 24, 2023, we are assigning CPT codes 0717T and 0718T to separate payment under OPPS. Based on input from our medical advisors, we are assigning both CPT codes 0717T and 0718T to status indicator ``T'' and APC 5055 (Level 5 Skin Procedures) based on clinical similarity with CPT code 15771 (Grafting of autologous fat harvested by liposuction technique to trunk, breasts, scalp, arms, and/or legs; 50 cc or less injectate). The final 2024 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 status indicator (SI) meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. [[Page 81658]]

9. Barostim CPT Code 0266T (APC 1580)

Barostim is a fully implantable neurostimulator system with an indication to treat heart failure symptoms in a limited number of patients who meet the FDA-approved eligibility criteria. Barostim received device pass-through status in the OPPS starting in January 2021 and its device pass-through status is scheduled to end on December 31, 2023. In the OPPS, once pass-through status ends for a device, the cost of the device is packaged into its associated procedure, which for Barostim is CPT code 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)). Claims from CY 2022 will be used to set the payment rate for the Barostim implant procedure. There are 123 claims for the Barostim implant procedure in CY 2022, and all claims report using Barostim as a part of the Barostim implant procedure. Therefore, the geometric mean cost of the Barostim implant procedure reflects the full cost of the device and the resources used to implant it. The Neurostimulator and Related Procedures APC has five payment levels. The estimated payment amount for CY 2024 for Level 5, which is the highest level, is around $30,700. The geometric mean cost of the Barostim implant procedure is nearly $46,000. In the CY 2024 OPPS proposed rule, we proposed to assign the Barostim implant procedure to APC 5465 (Level 5 Neurostimulator and Related Procedures). Comment: The HOP Panel and multiple commenters including the manufacturer requested that CPT code 0266T be assigned to APC 1580 (New Technology--Level 43 ($40,001-$50,000)) with a payment rate of around $45,000. The commenters noted that in the CY 2023 OPPS/ASC final rule we assigned a different neurostimulator procedure whose geometric mean cost was over $25,000 more than the payment rate for APC 5465, CPT code 0424T (Insertion or replacement of neurostimulator system for treatment of central sleep apnea; complete system (transvenous placement of right or left stimulation lead, sensing lead, implantable pulse generator)), to New Technology APC 1581 (New Technology--Level 44 ($50,001-$60,000) with a payment rate of around $55,000 as APC 1581 more closely reflected the cost of the service. Response: We agree with the commenters. The updated geometric mean for CPT code 0266T is around $47,300 which is nearly $17,000 more than the updated payment rate for APC 5465 of around $30,500. Also as noted by the commenters, we had in CY 2023 moved another neurostimulator procedure described by CPT code 0424T to a new technology APC when its geometric mean was found to be substantially higher than the payment rate for APC 5465. After consideration of the public comments we received, we are not adopting our proposal as final. Instead, we are adopting a final APC assignment for CPT code 0266T to APC 1580 (New Technology--Level 43 ($40,001-$50,000)). Table 52 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.070

10. Barricaid[supreg] Spine/Lumbar Disk Surgery (APC 5115)

For CY 2024, we proposed to assign 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) to APC 5115 (Level 5 Musculoskeletal Procedures) with a proposed payment rate of $13,269.40. The proposed short descriptor for HCPCS code C9757 was ``spine/lumbar disk surgery.'' Comment: We received a comment from the manufacturer of the Barricaid[supreg] device, which is the bone-anchored annular closure device that is implanted during the procedure described by HCPCS code C9757. Specifically, the commenter requested that we revise the short descriptor for HCPCS code C9757 from ``spine/lumbar disk surgery'' to ``spine bone-anchor implant surgery,'' which could help limit erroneous claims for HCPCS code C9757 that do not include the Barricaid[supreg] device. The commenter also requested that CMS issue a transmittal or Medicare Learning Network[supreg] (MLN) Matters article to educate hospital outpatient departments that a bone-anchored implant must be used to report HCPCS code C9757, and that the code cannot be reported using any other type of non-FDA approved technology or when a suture- based supply is used. Response: We thank the commenter for their input. First, we note that coders are generally aware that they need to read the entire long descriptors, and not rely on short descriptors alone, for the codes they are billing to ensure they are [[Page 81659]] reporting the procedures, services, and items accurately. In addition, it is generally not our policy to judge the accuracy of provider coding and charging for purposes of ratesetting. We rely on hospitals and providers to accurately report the use of HCPCS codes in accordance with their code descriptors and CPT and CMS instructions, and to report services accurately on claims and charges and costs for the services on their Medicare hospital cost report. Nonetheless, we are sympathetic to the commenter's concern regarding the descriptor, and consequently, we believe that a slight modification to the short descriptor may be helpful to ensuring that a device is used every time the HCPCS code C9757 is billed on a claim. We note that there is a maximum number of characters that can be used for the short descriptor field. In light of this character field limitation and to further clarify that a device should be implanted each time HCPCS code C9757 is billed, for CY 2024 we are revising the short descriptor for the code from ``Spine/lumbar disk surgery'' to ``Spine device implant surgery.'' After consideration of the public comment, we are finalizing our proposal to assign HCPCS code C9757 to APC 5115 with one modification to the code's short descriptor. For CY 2024, the short descriptor for HCPCS code C9757 is ``Spine device implant surgery'' to clarify that a device must be implanted each time the service is performed. The final CY 2024 short descriptor for HCPCS code C9757 can be found in Addendum B to this final rule with comment period. Addendum B is available via the internet on the CMS website. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

11. Biliary Endoscopy CPT Codes 47539 and 47564 (APCs 5361 and 5362)

CPT code 47539 (Placement of stent(s) into a bile duct, percutaneous, including diagnostic cholangiography, imaging guidance (eg, fluoroscopy and/or ultrasound), balloon dilation, catheter exchange(s) and catheter removal(s) when performed, and all associated radiological supervision and interpretation; new access, without placement of separate biliary drainage catheter) with a geometric mean cost of around $7,576 and CPT code 47564 (Laparoscopy, surgical; cholecystectomy with exploration of common duct) with a geometric mean cost of around $7,576 describe procedures that are performed when a patient has a blockage of their bile duct. For the CY 2024 OPPS proposed rule, we proposed to assign both procedures to APC 5361 (Level 1 Laparoscopy and Related Services) with a payment rate of around $5,608. Comment: One commenter requested that we assign both CPT code 47539 and CPT code 47564 to APC 5362 (Level 2 Laparoscopy and Related Services) with a payment rate of around $9,984. The commenter noted that both of these procedures had a geometric mean cost that was more than 2-times the lowest-cost significant procedure assigned to APC 5361 (CPT code 49587), with a 2-times limit of around $7,207, which is less than the $7,576 geometric mean rate for both procedures. The commenters contended the only reason there is not a 2-times violation is neither CPT code 47539 nor CPT code 47564 is a significant procedure for determining the payment rate for APC 5361. The commenter also noted that the procedures described by CPT codes 47539 and 47564 have clinical and resource similarities to both the procedures in the higher-cost portion of APC 5361 and the lower-cost portion of APC 5362, which was another reason the commenters believed the procedures should be moved to APC 5362. Response: We appreciate the request of the commenter. Since the release of the CY 2024 OPPS proposed rule, we have updated our 2-times analysis of claims from CY 2022 that are used to set rates for CY 2024. Our updated results find that the 2-times limit for APC 5361 based on CPT code 49587 as the lowest-cost significant procedure is around $7,318. The updated geometric mean cost for CPT code 47539 is around $7,316, which means by just $2 there would not be a 2 times rule violation if CPT code 47539 was a significant procedure in determining the payment rate for APC 5361. For CPT code 47564, the updated geometric mean cost for the procedure is $7,557, which means there would be a 2 times rule violation if the procedure was significant in APC 5361. Our review of the procedures assigned to APC 5361 and APC 5362 found the procedure described by CPT code 47539 had more clinical and resource similarities with the procedures in APC 5361, while the procedure described by CPT code 47564 appeared to have more clinical and resource similarities with the procedures in APC 5362. After consideration of the public comments we received, we are implementing our proposal without modification for CPT code 47539 to assign the procedure to APC 5361 (Level 1 Laparoscopy and Related Services). We also are implementing our proposal with modification for CPT code 47564 by assigning the procedure to APC 5362 (Level 2 Laparoscopy and Related Services). Table 53 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 81660]] [GRAPHIC] [TIFF OMITTED] TR22NO23.071

12. Bone Density Tests/Bone Mass Measurement: Biomechanical Computed

Tomography (BCT) Analysis and Digital X-ray Radiogrammetry-Bone Mineral Density (DXR-BMD) Analysis) (APCs 5521, 5523, and 5731) CPT code 0743T (Bone strength and fracture risk using finite element analysis of functional data and bone mineral density (BMD), with concurrent vertebral fracture assessment, utilizing data from a computed tomography scan, retrieval and transmission of the scan data, measurement of bone strength and BMD and classification of any vertebral fractures, with overall fracture-risk assessment, interpretation and report) became effective January 1, 2023. This code describes the service associated with BCT analysis with concurrent vertebral fracture assessment (VFA). In addition to new CPT code 0743T, there are five existing CPT codes describing BCT analysis that were effective July 1, 2019. The codes and their long descriptors are listed below. 0554T: Bone strength and fracture risk using finite element analysis of functional data and bone-mineral density utilizing data from a computed tomography scan; retrieval and transmission of the scan data, assessment of bone strength and fracture risk and bone- mineral density, interpretation and report. 0555T: Bone strength and fracture risk using finite element analysis of functional data and bone-mineral density utilizing data from a computed tomography scan; retrieval and transmission of the scan data. 0556T: Bone strength and fracture risk using finite element analysis of functional data and bone-mineral density utilizing data from a computed tomography scan; assessment of bone strength and fracture risk and bone mineral density. 0557T: Bone strength and fracture risk using finite element analysis of functional data and bone-mineral density utilizing data from a computed tomography scan; interpretation and report. 0558T: Computed tomography scan taken for the purpose of biomechanical computed tomography analysis. In the CY 2023 OPPS/ASC notice of proposed rulemaking (NPRM), we proposed to reassign CPT codes 0554T-0558T to status indicator E1. In response to public comment on the proposal, in the CY 2023 OPPS/ASC final rule (87 FR71844 through 71846), we stated that, based on our review and understanding of the service, BCT analysis does not meet Medicare's definition of bone mass measurement, as specified in Sec. 410.31(a), which specifies the coverage of, and payment for, bone mass measurements for Medicare beneficiaries. Therefore, we assigned CPT codes 0554T-0558T and CPT code 0743T to status indicator ``E1'' to indicate that these codes are not covered by Medicare, and not paid by Medicare when submitted on outpatient claims (any outpatient bill type). In the CY 2024 OPPS/ASC proposed rule, we proposed to continue to assign CPT codes 0554T-0558T and CPT code 0743T to status indicator ``E1.'' Comment: Several commenters stated that they disagree with the status indicator assignment of ``E1'' and that the BCT CPT codes 0554- 0558T and CPT Code 0743T (BCT+VFA) meet the regulatory definition of Bone Mass Measurement (BMM). Commenters contended that the BCT and BCT+VFA procedures are reasonable and necessary diagnostic tests that meet all aspects of both the statutory and regulatory definitions of BMM. Another commenter stated that they urge CMS to restore coverage for BCT codes and BCT with concurrent VFA as covered bone mass measurement and assign them to status indicators ``S.'' Response: We appreciate these comments. While CMS further considers this issue, we will not finalize, as proposed, the status indicator of ``E1'' for these codes, but instead are assigning certain BCT codes describing HOPD services to clinical APCs. Specifically, for CY 2024, we are assigning CPT code 0555T to APC 5731 (Level 1 Minor Procedures) and SI ``S,'' CPT code 0556T to APC 5523 (Level 3 Imaging without Contrast) and SI ``S,'' and CPT code 0558T to APC 5521 (Level 1 Imaging without Contrast) with SI of ``S,'' which were the same APC assignments for the codes between CY 2019 and CY 2022. In addition, we are assigning CPT codes 0554T, 0557T, and 0743T to SI ``M'' (Items and Services Not Billable to the MAC. Not paid under OPPS.) to indicate that these codes are not payable under the OPPS since they describe physician-only services. As we have consistently stated in past rules (87 FR 71879) and quarterly change requests to assign new codes to APCs (see, e.g., Pub 100-04 Medicare Claims Processing, Transmittal 11937), the fact that a drug, device, procedure or service is assigned a HCPCS code and a payment rate under the OPPS does not imply coverage by the Medicare program, but indicates only how the product, procedure, or service may be paid if covered by the program. [[Page 81661]] Medicare Administrative Contractors (MACs) determine whether a drug, device, procedure, or other service meets all program requirements and conditions for coverage and payment. Accordingly, we emphasize that HOPDs would only receive payment for these services when the appropriate MAC determines that the service meets the relevant conditions for coverage and payment. In summary, after consideration of the public comments, we are not finalizing our proposal for CPT codes 0554T-0558T and CPT code 0743T. The final payment rates for the separately payable 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. Addenda B and D1 are available via the internet on the CMS website.

13. Cardiac Computed Tomography Angiography (CCTA) (APC 5571)

For the 2006 update, the AMA's CPT Editorial Panel established six Category III CPT codes to describe cardiac computed tomography angiography with contrast materials effective January 1, 2006. The codes were active and separately payable under the OPPS between January 1, 2006, through December 31, 2009. The CPT Editorial Panel deleted the Category III CPT codes and replaced them with Category I CPT codes 75572 through 75574 effective January 1, 2010. With the deletion of the Category III CPT codes on December 31, 2009, we crosswalked the APC assignments from the Category III CPT codes (predecessor codes) to the new Category I CPT codes effective January 1, 2010. Since 2010, the Category I CPT codes describing cardiac computed tomography angiography with contrast materials are CPT codes 75572, 75573, and 75574. The codes and their long descriptors are listed below. 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 left ventricular (LV) cardiac function, right ventricular (RV) structure and function and evaluation of vascular structures, if performed) 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) For CY 2023, as we indicated in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71847 through 71850), we assigned the codes to APC 5571 (Level 1 Imaging with Contrast). As listed in the OPPS Addendum A (OPPS APCs) that was released with the CY 2023 OPPS/ASC final rule with comment period, APC 5571 was assigned a payment rate of $180.34 effective January 1, 2023. We note that the OPPS payment rate applies only to the hospital outpatient facility and does not include the physician service payment. Physician services are paid under Medicare's Physician Fee Schedule (PFS). For reference, the 54 below shows the total CY 2023 Medicare reimbursement for CPT codes 75572, 75573, and 75574. [GRAPHIC] [TIFF OMITTED] TR22NO23.072 For CY 2024, based on the latest claims data, we proposed to continue to assign the codes to APC 5571 with a proposed payment rate of $177.09. As a reminder, we update the OPPS payment rates on an annual basis consistent with the requirements set forth in section 1833(t)(9)(A) of the Act that requires the HHS Secretary to review, not less often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. We received several comments related to our proposed payment for the CCTA codes. Many of the comments, which were form letters, addressed the same issues that were brought to our attention in the CY 2021 OPPS/ASC final rule (85 FR 85956 through 85959). Below is a summary of the public comments to the CY 2024 OPPS/ASC proposed rule and our responses to the comments. Comment: Several commenters noted that the payment for the CCTA codes has declined since 2017 and expressed concern with the continued assignment to APC 5571. They indicated that the reimbursement amount is insufficient to cover the cost of providing the service and argued that the payment amount does not take into account the hospital resources required to perform the test, including the use of the equipment, medication administration, staff time, and scanner time. To pay appropriately for the service, many of the commenters requested the reassignment of CPT codes 75572 and 75573 to APC 5572 (Level 2 Imaging with Contrast), with a proposed payment of $369.86. These same commenters also requested the reassignment of CPT code 75574 to APC 5573 (Level 3 Imaging with Contrast), with a proposed payment rate of $775.83. Response: Under the OPPS, we use the latest claims data to set the annual payment rates. Payment rates for CY 2024 are based on claims with dates of service between January 1, 2022, and December 31, 2022, processed through June 30, 2023. As illustrated in Table 55 [[Page 81662]] below, analysis of our claims data shows that the geometric mean cost for the codes range between $150.58 and $219.06. Specifically, the geometric mean cost for CPT code 75572 is $150.57 based on 22,575 single claims (out of 40,066 total claims), $219.06 for CPT code 75573 based on 437 single claims (out of 678 total claims), and $193.29 for CPT code 75574 based on 55,871 single claims (out of 78,932 total claims). Based on our analysis, the geometric mean costs for all three codes are consistent with the geometric mean cost for APC 5571, whose geometric mean cost is $179.94. In contrast, the geometric mean costs for APCs 5572 and 5573 are $376.62 and $784.12, respectively. Based on the geometric mean costs for CPT codes 75572 (GMC $150.57) and 75573 (GMC $219.06), we do not believe that reassigning the codes to APC 5572 (GMC $376.62) would be appropriate. Similarly, based on the latest claims data for CPT code 75574 (GMC $193.29), we do not believe that reassigning the code to APC 5573 (GMC $784.11) would be appropriate. We believe that reassigning the codes to either APC 5572 or 5573 would significantly overpay for the service. Based on the claims data, we believe that assigning CPT codes 75572, 75573, and 75574 to APC 5571 remains appropriate based on clinical characteristics and resource homogeneity to the other services in the APC. In addition, because the CCTA CPT codes have been in existence since 2010, we do not believe that hospital outpatient facilities have been coding these services inappropriately. Consequently, we believe our claims data reflect the cost of providing the service. [GRAPHIC] [TIFF OMITTED] TR22NO23.073 Comment: A commenter suggested discontinuing payment for CPT code 75573 and instead reassigning the current payment rate for CPT code 75573 for CPT codes 75574, 93571, and 93572. The commenter noted that in addition to CPT code 75574, CPT codes 93571 and 93572 are under- reimbursed. Response: Under the OPPS, we cannot reallocate or remove the reimbursement from one active/existing code and distribute to other codes. In cases where [[Page 81663]] a code is deleted and replaced with another code, we will crosswalk the payment for the deleted code/predecessor code to the new code. However, in this case, CPT code 75573 is an active code under the OPPS, and its payment cannot be removed and reassigned to another code. Payment determination under the OPPS is based on analysis of the latest claims data. For CY 2024, OPPS payments are based on our analysis of claims with dates of service between January 1, 2022, and December 31, 2022, processed through June 30, 2023. As stated above, we have claims data for CPT code 75573, which indicates that the service is performed in the HOPD setting. With regard to CPT codes 93571 and 93572 codes, we note these codes are assigned status indicator ``N'' to indicate that their payment is packaged in the primary code. Below are the complete long descriptors for CPT codes 93571 and 93572: 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) 93572: Intravascular doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; each additional vessel (list separately in addition to code for primary procedure) The words ``list separately in addition to code for primary procedure'' are included in the long descriptors for CPT code 93571 and 93572 to indicate that that the codes are considered ``add-ons'' to another primary code that cannot be reported independently. Specifically, add-on codes must always be reported with another primary code on the same day. The AMA states in the CPT 2024 Professional Edition (page xviii) that ``add-on codes are always performed in addition to the primary service or procedure and must never be reported as a stand-alone code.'' In most cases, add-on codes are typically ancillary and supportive to a primary diagnostic or therapeutic modality and are an integral part of the primary service they support. As specified under regulation 42 CFR 419.2(b)(18), add-on codes are generally packaged under the OPPS, and payment for the codes are bundled with the primary codes. Consequently, CPT codes 93571 and 93572 are not paid separately under the OPPS, but instead, their payment is packaged into the primary code. In addition, because we have claims data for CPT code 75573, we would not reallocate the payment for the code to CPT codes 93571, 93572, and 75574. As stated above, our claims data show a geometric mean cost of $219.06 for CPT code 75573 based on 437 single claims (out of 678 total claims). Therefore, we believe that CPT code 75573 should continue to be paid separately under APC 5571. Comment: Many commenters urged CMS to allow hospitals the flexibility to submit charges for cardiac CT procedures with other than the general CT revenue code (0350) or the general MRI revenue code (0610), thereby allowing future estimates to reflect the true cost of providing the service. Some commenters suggested that the Medicare Administrative Contractors (MACs) have made it mandatory to report only the general CT revenue code (0350) for the CCTA codes. Another commenter reported that MACs have applied edits to the CCTA codes that prevent hospitals from reporting a cardiac revenue code for cardiac CT services when appropriate. Response: Based on our evaluation, we have not found any MAC edits that prevent hospitals from reporting the appropriate revenue code for the CCTA codes. We analyzed our claims data and based on claims with dates of service between January 1, 2022, and December 31, 2022, processed through June 30, 2023, we found seven revenue codes reported with CPT codes 75572, 75573, and 75574, specifically, revenue codes 0320, 0321, 0329, 0350, 0351, 0352, and 0359. Of these seven revenue codes, four apply to CT services, specifically, revenue codes 0350, 0351, 0352, and 0359. As evidenced by the claims data, hospital outpatient facilities are reporting revenue codes that describe CT services for the CCTA codes. We note that the general MRI revenue code, specifically, revenue code 0610, was not reported with the CCTA codes. Moreover, as listed in Table 56 below, we included the costs for these revenue codes in the CY 2024 ratesetting. That is, the costs attributed to the CCTA codes are included in the payment for CPT codes 75572, 75573, and 75574. [[Page 81664]] [GRAPHIC] [TIFF OMITTED] TR22NO23.074 Furthermore, as we stated in the CY 2023 OPPS/ASC final rule (87 FR 71849), hospital outpatient facilities are responsible 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, 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, HOPDs should report their charges under the revenue code that will result in the charges being assigned to the same cost center to which the cost of those services are assigned in the cost report.'' Therefore, hospital outpatient facilities must determine the most appropriate cost center and revenue code for the CCTA codes. This instruction is reiterated in the Medicare Administrative Contractor (MAC) instructions for revenue code reporting for CCT and CCTA services, as noted in the various articles listed in Table 57. As stated in Table 57, MACs ``may specify revenue codes to help providers identify those revenue codes typically used'' to report a service, however, the guidance is purely advisory, and not mandatory, which is in contrast to statements made by several commenters. The MAC instructions can be found on the CMS.gov website, specifically, on the Medicare Coverage Database website. [[Page 81665]] [GRAPHIC] [TIFF OMITTED] TR22NO23.075 In summary, after consideration of the public comments, we are finalizing our proposal, without modification, and assigning the CCTA CPT codes 75572, 75573, and 75574 to APC 5571. The final CY 2024 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 status indicator (SI) meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

14. Cardiac Leadless Pacemaker Procedures (APCs 5183, 5224, and 5741)

For the July 2023 update, the CPT Editorial Panel established 10 new codes effective July 1, 2023, to describe the various procedures related to three new leadless pacemaker systems, specifically, the Aveir VR, Aveir AR, and Aveir DR leadless pacemaker systems. The codes describe the insertion, removal and replacement, removal-only, and programming associated with the new devices. The codes, and their long descriptors are listed in Table 58. Based on our evaluation of the codes, we determined that the Aveir VR received FDA approval, however, the Aveir AR and Aveir DR Systems were still pending FDA approval. Because the Aveir VR System received FDA premarket approval (PMA) in March 2022 and was approved by CMS for Medicare coverage under Coverage with Evidence Development (CED) on June 21, 2022 (Study Title: Aveir VR Coverage With Evidence Development Post-Approval Study; Clinicaltrials.gov number: NCT05336877), we assigned the related CPT codes to specific status indicator and APC assignments effective July 1, 2023. For the Aveir AR, and Aveir DR Systems that were still pending FDA approval, we assigned the codes to status indicator ``E1'' to indicate that they were not payable by Medicare when submitted on outpatient claims (any outpatient bill type) because the services associated with these codes are either not covered by any Medicare outpatient benefit category, statutorily excluded by Medicare, or not reasonable and necessary. These codes, and their OPPS SI and APC assignments were listed in the July 2023 OPPS quarterly update CR (Transmittal 12077, Change Request 13210, dated June 13, 2023). Table 58 below list the codes, long descriptors, status indicators, and APC assignments for the 10 codes that were listed in the July 2023 OPPS quarterly update CR. BILLING CODE 4150-28-P [[Page 81666]] [GRAPHIC] [TIFF OMITTED] TR22NO23.076 [[Page 81667]] [GRAPHIC] [TIFF OMITTED] TR22NO23.077 BILLING CODE 4150-28-C For CY 2024, as listed in the OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to continue to assign the 10 [[Page 81668]] codes to the same status indicator and APC assignments listed in Table 58. In addition to the codes effective July 1, 2023, we also listed the four Aveir AR-related CPT codes, specifically, CPT codes 0823T, 0824T, 0825T, and 0826T, that are effective January 1, 2024, in OPPS Addendum B, and proposed to assign them to status indicator ``E1'' since the device had not received FDA approval. The codes were listed in OPPS Addendum B with their placeholder codes since we had not received the final CPT code numbers from AMA in time for publication of the proposed rule. 0823T (placeholder code X125T): Insertion of permanent right atrial single-chamber leadless pacemaker 0824T (placeholder code X126T): Removal of permanent right atrial single-chamber leadless pacemaker 0825T (placeholder code X127T): Removal and replacement of permanent right atrial single-chamber leadless pacemaker 0826T (placeholder code X128T): Programming device evaluation, single chamber We note a commenter provided background information on the technology associated with the new codes, the FDA approval for the three leadless pacemaker systems, and the cost of the complete system. First, the commenter clarified that the new codes relate to the Aveir DR dual-chamber leadless pacemaker, which is a modular system, that consists of two implanted leadless pacemakers, specifically, the Aveir VR single-chamber right ventricular component, and the Aveir AR single- chamber right atrial component. Secondly, the commenter clarified that the Aveir VR received FDA PMA approval in March 2022, and the Aveir DR and Aveir AR were approved by the FDA for commercial use through a PMA supplement on June 29, 2023. Additionally, the commenter reported that the price for the Aveir DR dual chamber leadless pacemaker is $24,000 and includes the following components: one Aveir VR right ventricular leadless pacemaker, one Aveir AR right atrial leadless pacemaker, two delivery catheters, and one introducer. The commenter indicated that the Aveir VR and Aveir AR devices may be implanted at the same time, thus representing the complete Aveir DR dual-chamber leadless pacemaker. Alternatively, the single-chamber components (Aveir VR and Aveir AR) may be implanted separately. We received several comments related to our proposal. Below are the responses to the comments. Comment: A commenter disagreed with the proposed APC assignment for the codes describing insertion of a leadless pacemaker for the complete system and single-chamber devices. Specifically, the commenter disagreed with the proposed assignment of APC 5194 (Level 4 Endovascular Procedures; proposed payment of $17,195.36) for CPT codes 33274 and 0797T, and suggested assignment to APC 5524 (Level 4 Pacemaker and Similar Procedures; proposed payment of $18,718.23). This same commenter disagreed with the status indicator assignment of ``E1'' for CPT codes 0795T, 0796T, and 0823T, and recommended revision to APC 5524. Another device manufacturer also disagreed with the proposed status indicator assignment of ``E1'' for CPT codes 0795T, 0796T, and 0823T, and recommended assignment to either APC 5231 (Level 1 ICD and Similar Procedures; proposed payment of $23,075.10) or APC 5224. This same device manufacturer recommended reassignment from status indicator ``E1'' to APC 5194 (Level 4 Endovascular Procedures; proposed payment of $17,195.36) for CPT codes 0796T and 0823T. Response: Because the codes are new, specifically, CPT codes 0795T, 0796T, 0797T, and 0823T, we have no claims data. In determining the appropriate APC placement for new codes, we generally rely on input from a variety of sources, including, but not limited to, review of the resource costs and clinical similarity of the service to existing procedures; input from CMS medical advisors; information from interested specialty societies; and review of all other information available to us. Based on our evaluation of the codes, we agree that these insertion codes are more appropriate in APC 5224 (Level 4 Pacemaker and Similar Procedures) based on clinical similarity and resource homogeneity to the procedures in the APC. Therefore, we are assigning CPT codes 0795T, 0796T, 0797T, and 0823T, to APC 5224 for CY 2024. With respect to CPT code 33274, which was effective January 1, 2019, our analysis of the claims data for this final rule shows a geometric mean cost of about $19,560 based on 4,349 single claims (out of 4,408 total claims), which we believe is consistent with the geometric mean cost of approximately $19,082 for APC 5224. Therefore, we agree with the commenter that CPT code 33274 fits more appropriately in APC 5224 rather than APC 5194, whose geometric mean cost is about $17,173. Consequently, we are reassigning CPT code 33274 from APC 5194 to APC 5224 for CY 2024. Comment: For the removal and replacement codes, specifically, CPT codes 0801T, 0802T, 0803T, and 0825T, some commenters disagreed with the proposed status indicator assignment of ``E1.'' For CPT code 0801T, the commenters recommended assignment to either APC 5224 or 5231, and for CPT code 0803T, they disagreed with assignment to APC 5194 and suggested assignment to APC 5224. For CPT codes 0802T and 0825T, the commenters recommended assignment to APC 5224. Response: Because these removal and replacement codes are new, we have no claims data. However, based on our review of the codes, input from our clinicians, and their clinical similarity to the procedures in APC 5224, we believe these codes should be assigned to APC 5224 and the corresponding status indicator ``J1.'' Therefore, for CY 2024, we are assigning CPT codes 0801T, 0802T, 0803T, and 0825T to APC 5224 and SI ``J1.'' Comment: For the removal-only codes, specifically, CPT codes 0798T, 0799T, and 0824T, the commenters disagreed with the proposed status indicator assignment of ``E1.'' For CPT code 0798T, one commenter recommended assignment to APC 5183 (Level 3 Vascular Procedures; proposed payment of $3,054.97), while another commenter suggested assignment to APC 5184 (Level 4 Vascular Procedures; proposed payment of $5,284.18). Similarly, the commenters agreed that CPT codes 0799T and 0824T should be reassigned from status indicator ``E1'' to APC 5183. Another commenter suggested assigning the new leadless pacemaker removal-only codes, specifically, CPT codes 0798T, 0799T, 0800T, and 0824T, to the same APC as CPT code 33275 (APC 5183) since they all describe the same procedure. Response: With the exception of CPT code 33275, which was effective January 1, 2019, we have no claims data for the removal-only codes, specifically, 0798T, 0799T, 0800T, and 0824T. However, based on input from our clinicians, and their similarity to CPT code 33275, we agree that all five codes should be placed in APC 5183. Therefore, for CPT codes 0798T, 0799T, and 0824T, we are reassigning the codes from status indicator ``E1'' to APC 5183 for CY 2024. We note that we did not receive any alternative APC recommendations for CPT codes 33275 and 0800T, therefore, we are finalizing their APC assignments as proposed. Comment: For the programming code, specifically, CPT code 0826T, the commenters disagreed with the [[Page 81669]] proposed status indicator assignment of ``E1,'' and suggested assignment to APC 5741 (Level 1 Electronic Analysis of Devices; proposed payment of $36.79). One commenter recommended the assignment of CPT codes 0804T and 0826T to the same APC as existing CPT code 93279 (APC 5741) since they describe the same service. Response: Because the code is new, we have no claims data. However, based on recommendations from our clinicians, and suggestions from the commenters, we are reassigning CPT code 0826T from status indicator ``E1'' to APC 5741 for CY 2024. Similarly, for CPT code 0804T, because the code is new, we have no claims data. However, based on input from the commenters, and suggestions from our clinicians, we are finalizing our proposal, without modification, to assign the code to APC 5741. For CPT code 93279, our analysis of the claims data for this final rule shows a geometric mean cost of approximately $34 based on 13,655 single claims (out of 22,664 total claims), which is in line with the geometric mean cost of approximately $37 for APC 5741. Therefore, for CPT code 93279, we are finalizing our proposal, without modification, to assign the code to APC 5741. Comment: A device manufacturer reported that their suggested APCs for the new leadless pacemaker CPT codes do not include the device cost since they intend to submit a device pass-through application to CMS. They note that approval of the pass-through application would enable hospital outpatient facilities to receive separate payment for the device for a period of two to three years. Response: We appreciate the clarification, and suggest the commenter refer to the Medicare Electronic Application Request Information System (MEARIS), specifically, at https://mearis.cms.gov/public/home, to submit their device pass-through application. Comment: A commenter mentioned that in OPPS Addendum B of the CY 2024 OPPS/ASC proposed rule, CMS proposed to continue to assign HCPCS code G2066 (Interrogation device evaluation(s), (remote) up to 30 days; implantable cardiovascular physiologic monitor system, implantable loop recorder system, or subcutaneous cardiac rhythm monitor system, remote data acquisition(s), receipt of transmissions and technician review, technical support and distribution of results) to APC 5741, however, in the CY 2024 PFS proposed rule (88 FR 52321), CMS proposed to delete the code, and assign the direct practice expense inputs to CPT codes 93297 and 93298. The commenter requested clarification on whether HCPCS code G2066 will remain active for CY 2024, and if not, what alternative codes should be reported by the hospital outpatient facilities. Response: HCPCS code G2066 will be deleted December 31, 2023, with no replacement code. We note that HCPCS code G2066 does not describe an interrogation device evaluation associated with a leadless pacemaker system, rather, it describes an interrogation device evaluation for an implantable cardiovascular physiologic monitor system, implantable loop recorder system, or subcutaneous cardiac rhythm monitor system. Under the OPPS, the interrogation device evaluation code that should be reported for the leadless pacemaker systems is CPT code 93296. The code was effective January 1, 2009, and is assigned to APC 5741. Below is the complete long descriptor for the code: 93296: Interrogation device evaluation(s) (remote), up to 90 days; single, dual, or multiple lead pacemaker system, leadless pacemaker system, or implantable defibrillator system, remote data acquisition(s), receipt of transmissions and technician review, technical support and distribution of results. In addition, we did not receive any comments on our proposed APC assignment for CPT code 93296. Therefore, for CY 2024, we are finalizing our proposed APC for this code. In summary, after consideration of the comments that we received, we are finalizing our proposal to the status indicator and APC assignments for the 18 codes listed in Tables 59, 60, 61, 62, and 63 below. Because the codes for the leadless pacemaker are new, we have no claims data. We believe that the assignment to APC 5224 for the insertion, as well as for the removal and replacement procedure codes, is the best approach at this time. Similarly, we believe that the assignment to APC 5183 for the removal-only codes are appropriate. We also believe that the assignment to APC 5741 for the programming and the interrogation device evaluation codes is appropriate at this time. We reiterate that we analyze our claims data on an annual basis to establish the annual OPPS payment rates. Once we have data, we will reevaluate and, if necessary, reassign the codes to appropriate APCs based on the latest claims data. Finally, the final 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 status indicator (SI) meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. BILLING CODE 4150-28-P [[Page 81670]] [GRAPHIC] [TIFF OMITTED] TR22NO23.078 [[Page 81671]] [GRAPHIC] [TIFF OMITTED] TR22NO23.079 [[Page 81672]] [GRAPHIC] [TIFF OMITTED] TR22NO23.080 [[Page 81673]] [GRAPHIC] [TIFF OMITTED] TR22NO23.081 [GRAPHIC] [TIFF OMITTED] TR22NO23.082 BILLING CODE 4150-28-C

15. Cardiac Magnetic Resonance Imaging (APC 5572)

For CY 2023, we assigned 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 payment rate of $368.43. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to maintain the assignment to APC 5572 with a payment rate of $369.86. Comment: A commenter disagreed with the assignment to APC 5572 for CPT code 75561 and requested a change to APC 5573. The commenter indicated that the service described by the code is clinically similar to the service described by 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), which is proposed to be assigned to APC 5573 (Level 3 Imaging with Contrast), with a payment of $775.83. Response: We reviewed our claims data for this final rule, which is based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023, and found that the resource costs associated with CPT codes 75561 and 75563 are very different. Specifically, our claims data show a geometric mean cost of about $440 for CPT code 75561 based on [[Page 81674]] 23,451 single claims (out of 27,479 total claims), which is significantly lower than the geometric mean cost of approximately $833 for CPT code 75563 based on 3,377 single claims (out of 3,818 total claims). We believe that the geometric mean cost of about $440 for CPT code 75561 is consistent with the geometric mean cost of approximately $377 for APC 5572, rather than APC 5573, whose geometric mean cost is approximately $784. Based on the data, we believe that the clinical and resource characteristics of CPT code 75561 are sufficiently similar to the other procedures assigned to APC 5572 and should continue to be assigned to the APC. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 75561 to APC 5572 for CY 2024. The final CY 2024 payment rate for the 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 definitions for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

16. Cardiac Resynchronization Therapy Procedures (APCs 5054, 5221,

5223, 5231, 5731, and 5741) On November 1, 2016, CMS approved for Medicare coverage the Category B Investigational Device Exemption (IDE) study associated with EBR System's WiSE System for cardiac resynchronization therapy (Study Title: Stimulation Of the Left Ventricular Endocardium for Cardiac Resynchronization Therapy in Non-Responders and Previously Untreatable Patients, SOLVE CRT; NCT number NCT02922036; IDE number G150244). In 2019, AMA established eight Category III CPT codes associated with the WiSE System effective January 1, 2019. The codes are CPT codes 0515T through 0522T, and describe the implant, removal and replacement, revision, interrogation, and programming of the system. For 2024, the AMA's CPT Editorial Panel revised the descriptors for existing CPT codes 0517T, 0518T, 0519T, 0520T, and established three new codes, specifically, CPT codes 0861T, 0862T, and 0863T, effective January 1, 2024. For the 2024 update, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to assign the codes to the SIs and APCs listed in Table 64 below, for the existing, new, and revised codes. BILLING CODE 4150-28-P [[Page 81675]] [GRAPHIC] [TIFF OMITTED] TR22NO23.083 BILLING CODE 4150-28-C We received comments from the WiSE System manufacturer on our proposed assignments for the codes listed in Table 64. The commenter clarified that the [[Page 81676]] IDE clinical trial associated with the WiSE System has ended and that they expect FDA PMA approval in the second quarter of 2024. The commenter also provided the following target pricing for the components of the WiSE System: WiSE System: $45,000 Electrode: $17,300 Battery: $9,000 Transmitter: $18,700 Battery and Transmitter: $27,700 Of the 11 codes, the device manufacturer disagreed with the proposed APC assignments for seven codes listed in Table 64. Below are the comments associated with certain codes, their suggested APC assignments, and our responses to the comments. Comment: For CPT code 0515T (Insertion of wireless cardiac stimulator for left ventricular pacing, including device interrogation and programming, and imaging supervision and interpretation, when performed; complete system (includes electrode and generator [transmitter and battery])), we proposed to continue to assign to APC 5231 (Level 1 ICD and Similar Procedures; proposed payment of $ 23,075.10). The device manufacturer disagreed with the assignment and suggested reassignment to APC 1581 (New Technology--Level 44 ($50,001- $60,000)) with a proposed payment of $55,000.50, based on its target price of $45,000 for the complete WiSE System. Response: CPT code 0515T was effective January 1, 2019. We note that the 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Analysis of our claims data show a geometric mean cost of about $43,974 based on 2 single claims (out of 2 total claims). The commenter reported a target price of $45,000 for the complete system, however, based on the low volume of only 2 single claims, we believe that we should maintain the code's assignment to APC 5231 before reassigning to a more appropriate APC. We believe that the continued assignment to APC 5231 will enable Medicare to track the services accordingly and establish an appropriate payment for the code. Therefore, we are finalizing our proposal to APC 5231 for CPT code 0515T. Comment: The device manufacturer disagreed with our proposal to continue to assign CPT code 0516T to APC 5222 (Level 2 Pacemaker and Similar Procedures; proposed payment of $8,264.84) and recommended reassignment to APC 5224 (Level 4 Pacemaker and Similar Procedures; proposed payment of $18,718.23). Response: CPT code 0516T was also effective January 1, 2019. Our claims data show a geometric mean cost of about $9,645 based on 2 single claims (out of 2 total claims). Based on our evaluation of the procedure, opinion from our clinicians, and the similarity of the procedure to CPT code 33207 (Insertion of new or replacement of permanent pacemaker with transvenous electrode(s); ventricular), which we proposed for assignment to APC 5223 (Level 3 Pacemaker and Similar Procedures; proposed payment of $10,354.26), we believe that APC 5223 is the more appropriate assignment for CPT code 0516T. Therefore, for CY 2024, we are finalizing our proposal with modification, and assigning CPT code 0516T to APC 5223. Comment: As noted in Table 64, the code descriptor for CPT code 0517T in CY 2023 described the insertion of the battery and/or transmitter only; however, for 2024, the revised descriptor describes the insertion of both the battery and transmitter. We proposed to continue to assign CPT code 0517T to APC 5222 (Level 2 Pacemaker and Similar Procedures; proposed payment of $8,264.84). A commenter disagreed with the assignment and recommended reassignment to APC 5232 (Level 2 ICD and Similar Procedures; proposed payment of $31,975.11). We note the commenter listed APC 5231 (Level 1 ICD; proposed payment of $23,075.10) but included in parentheses the proposed payment of $31,975.11, which is the proposed payment for APC 5232 (Level 2 ICD). We believe the commenter meant to suggest APC 5232 rather than APC 5231. Response: Based on our analysis of the data for this final rule, our claims data shows a geometric mean cost of approximately $51,240 based on 2 single claims (out of 2 total claims) for CPT code 0517T. Based on the revised descriptor which describes insertion of a battery and a transmitter, as well as input from our clinicians, we believe we should reassign the code from APC 5222 (Level 2 Pacemaker and Similar Procedures; proposed payment of $8,264.84) to APC 5223 (Level 3 Pacemaker and Similar Procedures; proposed payment of $10,354.26). Because the IDE clinical study associated with the WiSE System has just ended and the device is still pending FDA PMA approval, we do not believe that we should reassign CPT code 0517T to APC 5232 at this time. We believe that assignment to APC 5223 for CPT code 0517T is the best approach at this time. Therefore, for CY 2024, we are finalizing our proposal with modification, and reassigning CPT code 0517T to APC 5223. We will evaluate the APC assignment for CPT code 0517T in next year's rulemaking to determine whether another APC would be more appropriate. Comment: As noted in Table 64, for CY 2023, CPT code 0518T described the removal of the ``battery and/or transmitter'' and was assigned to APC 5221 (Level 1 Pacemaker and Similar Procedures). However, for 2024, based on its revised description of removal of ``battery component only,'' we proposed to reassign the code to APC 5211 (Level 1 Electrophysiologic Procedures; proposed payment of $1,146.59) to reflect the reduced resources to perform the procedure. A commenter disagreed with the proposed assignment and suggested reassignment to APC 5222 (Level 2 Pacemaker and Similar Procedures; proposed payment of $8,264.84) consistent with the APC assignment for CPT code 33233 (Removal of permanent pacemaker pulse generator only). Response: Based on our analysis of the data for this final rule, we have no claims data for CPT code 0518T. However, based on input from our clinicians and the code's similarity to 33241 (Removal of implantable defibrillator pulse generator only), which is proposed to be assigned to APC 5221 (Level 1 Pacemaker and Similar Procedures), we believe that we should reassign the code to APC 5221. Therefore, for CY 2024, we are finalizing our proposal with modification, and reassigning CPT code 0518T to APC 5221. Comment: As noted in Table 64, for CY 2023, CPT code 0519T described removal and replacement of the battery and/or transmitter. However, for CY 2024, the code has been revised to describe the removal and replacement of both the battery and transmitter. For CY 2024, we proposed to continue to assign the code to APC 5221 (Level 1 Pacemaker and Similar Procedures; proposed payment of $ 3,903.23). A commenter disagreed with the assignment and suggested reassignment to APC 5232 (Level 2 ICD and Similar Procedures; proposed payment of $31,975.11). Similar to CPT code 0517T, the commenter listed APC 5231 (Level 1 ICD; proposed payment of $23,075.10) but included in parentheses a proposed payment amount of $31,975.11, which is the proposed payment for APC 5232 (Level 2 ICD). We believe the commenter meant to suggest APC 5232 rather than APC 5231. Response: Analysis of our claims data show a geometric mean cost of about $6,127 for CPT code 0519T based on 4 [[Page 81677]] single claims (out of 4 total claims). Because the revised code describes the removal and replacement of the battery and transmitter, we believe this code should be assigned to the same APC as CPT code 0517T. Therefore, for CY 2024, we are finalizing our proposal with modification, and assigning CPT code 0519T to APC 5223. Comment: As noted in Table 64, for CY 2023, CPT code 0520T described the removal and replacement of a pulse generator, including a new electrode, and was assigned to APC 5231 (Level 1 ICD and Similar Procedures) with a payment rate of $22,818.32. However, for 2024, the code descriptor has been revised significantly and now describes the removal and replacement of the battery component only. Based on the reduced work associated with the revised descriptor, we proposed to reassign CPT code 0520T to APC 5221 (Level 1 Pacemaker and Similar Procedures; proposed payment of $3,903.23). The device manufacturer disagreed with the proposal and suggested assignment to APC 5223 (Level 3 Pacemaker and Similar Procedures; proposed payment of $10,354.26), consistent with the APC assignment for CPT code 33206 (Insertion of new or replacement of permanent pacemaker with transvenous electrode(s); atrial)). Response: We have no claims data for CPT code 0520T, however, based on our evaluation of the procedure and recommendation from our clinicians, we agree with the commenter that the code should be reassigned to APC 5223. Therefore, for CY 2024, we are finalizing our proposal with modification, and assigning CPT code 0520T to APC 5223. Comment: CPT code 0861T is a new code for CY 2024. We proposed to assign the code to APC 5211 (Level 1 Electrophysiologic Procedures; proposed payment rate of $ 1,146.59), based on its similarity to CPT code 0518T (Removal of only pulse generator component(s) (battery and/ or transmitter) of wireless cardiac stimulator for left ventricular pacing), which is also proposed to APC 5211. The commenter disagreed with the proposal, and recommended assignment to APC 5222 (Level 2 Pacemaker and Similar Procedures; proposed payment of $8,264.84). Response: Consistent with our final policy for CPT code 0518T, we believe that we should reassign CPT code 0861T to APC 5221. Therefore, for CY 2024, we are finalizing our proposal with modification, and assigning CPT code 0861T to APC 5221. Comment: As listed in Table GX1, we proposed to assign CPT codes 0862T, 0863T, 0521T, and 0522T, to the APCs listed in Table GX1. The device manufacturer agreed with our APC assignments for the codes. Response: We appreciate the commenter's feedback. Therefore, for CY 2024, we are finalizing our proposal without modification for CPT codes 0862T, 0863T, 0521T, and 0522T. Finally, we remind the commenter that 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 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. For new procedures and items, we get many requests from manufacturers to increase the reimbursement for the code associated with their procedures and items. 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. On balance, 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). In summary, after consideration of the public comment that we received, we are finalizing the APC assignments for CPT codes 0515T through 0522T, and 0861T through 0863T to the APCs listed in Table 65 below. As we do every year, we will reevaluate the APC assignments for these codes in the next rulemaking cycle. We remind hospitals that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS. The final 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 status indicator (SI) meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. [[Page 81678]] [GRAPHIC] [TIFF OMITTED] TR22NO23.084

17. Catheter Placement Codes (APCs 5181 Through 5184)

For CY 2024, we proposed to continue to assign catheter placement CPT codes 36555-36597 status indicator ``J1'' and to APCs 5181 through 5184 with the proposed payment rates listed in table 66. BILLING CODE 4150-28-P [[Page 81679]] [GRAPHIC] [TIFF OMITTED] TR22NO23.085 [[Page 81680]] [GRAPHIC] [TIFF OMITTED] TR22NO23.086 [[Page 81681]] [GRAPHIC] [TIFF OMITTED] TR22NO23.087 [[Page 81682]] [GRAPHIC] [TIFF OMITTED] TR22NO23.088 BILLING CODE 4150-28-C Comment: We received one comment where the commenter requested that we change the status indicator for all catheter placements CPT codes in the 365XX series from status indicator ``J1'' to status indicator ``T.'' This commenter stated that there are times that patients require placement of such a catheter and then receive an infusion of a drug such as chemotherapy. Because several of those codes are assigned to status indicator ``J1,'' the drug cost, unless the drug is a pass- through drug, is not reimbursed. For one infusion, Lutathera (HCPCS code A9513), the drug cost is $55,000 and the $1,487 payment for C-APC 5182 clearly does not cover that cost. The commenter noted that while outlier payment will apply, it is inadequate to compensate for the actual expenditure for the treatment. Response: The Outpatient Coding Editor (IOCE) will package the drug cost into the Comprehensive APC, even if we change the status indicators for the catheter placement codes from ``J1'' to ``T'' because the APCs that the catheter placement codes are assigned to are assigned to status indicator ``J1.'' Therefore, the drug costs would not be reimbursed separately if we change the status indicators for the catheter placement codes from ``J1'' to ``T.'' Because of this, the only way to receive separate payment for the individual [[Page 81683]] procedures in these situations would be for the status indicator of the APC and all services assigned to the APC to be ``T.'' We continue to believe that this APC is appropriately assigned to comprehensive status. While there may be cases that would involve more complexity and cost, those packaged costs are reflected in claims used for ratesetting and the HCPCS and APC geometric mean costs, to the degree that they are performed in that manner. Nevertheless, we appreciate the comment, and we will take the commenter's recommendation into consideration in future rulemaking. In summary, after consideration of the comment we have received, we are finalizing our proposal without modification. Specifically, we will continue to assign catheter placement codes listed in Table 66 to status indicator ``J1'' for CY2024. We plan to review the comprehensive APC policy for CY 2025 to determine if we need to adopt any packaging changes as part of that rulemaking. The final CY 2024 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 meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

18. Cerene Cryotherapy Endometrial Ablation Procedure (APC 5415)

For CY 2023, we assigned CPT code 58356 (Endometrial cryoablation with ultrasonic guidance, including endometrial curettage, when performed) to APC 5415 (Level 5 Gynecologic Procedures) with a payment rate of $4,635.11. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to maintain the assignment for the code to APC 5415 with a payment rate of $4,783.96. Comment: A commenter requested that we finalize the proposed assignment to APC 5415 for CPT code 58356. Response: We reviewed our claims data for this final rule with comment period, which is based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023, and found no claims data for CPT code 58356. However, because the code has been in existence since January 1, 2005, we reviewed our historical claims data for the last 5 years, specifically, the historical cost statistics released with the CY 2019 through CY 2023 OPPS/ASC final rules, and found some claims for the code. Specifically, our historical claims data show a geometric mean cost that ranged between $1,712 and $5,032, based on 3 and 5 single claims. Because the code has been assigned to this same APC for many years now, we believe we should the maintain the assignment to APC 5415 for CPT code 58356. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 58356 to APC 5415 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

19. Complex Bunion Correction Procedures CPT Codes 28297 and 28740 (APC

5114) CPT code 28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with first metatarsal and medial cuneiform joint arthrodesis, any method) with a geometric mean cost of around $10,664 and CPT code 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint) with a geometric mean cost of around $10,376 describe complex bunion correction procedures. For the CY 2024 OPPS proposed rule, we proposed assigning both procedures to APC 5114 (Level 4 Musculoskeletal Procedures) with a payment rate of around $6,974. Comment: One commenter noted that CPT codes 28297 and 28740 were close to violating the 2 times rule in APC 5114 and eligible for reassignment to APC 5115 (Level 5 Musculoskeletal Procedures) with a payment rate of around $13,421 if these procedures had been identified as significant procedures for 2 times rule purposes as the lowest-cost significant procedure. The lowest cost significant procedure in APC 5114 (CPT code 27385) had a geometric mean cost of around $5,357 and two times the amount would have been $10,714, which is just $50 more than the cost of CPT 28297 and about $350 more than the cost of CPT 28740. The commenter believed that there was a good chance that these procedures may have geometric means exceeding the 2 times rule requirements once the CY 2024 claims data were updated. Response: Our review of updated data for CY 2024 found that neither CPT code 28297 nor CPT code 28740 violates the 2 times rule in their current assignment to APC 5114 if the procedures were significant. The updated estimated 2-times limit based on CPT code 27385 was around $10,797. CPT code 28297's updated geometric mean cost was around $10,728 and CPT code 28740 updated geometric mean cost was around $10,565. Also, these procedures were towards the higher-cost end of APC 5114 but moving them to APC 5115 would group CPT codes 28297 and 28740 with procedures that are generally more complex and resource-intensive than the procedures described by CPT codes 28297 and 28740. After consideration of the public comments we received, we are implementing our proposal without modification for CPT codes 28297 and 28740. Table 67 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 81684]] [GRAPHIC] [TIFF OMITTED] TR22NO23.089

20. Cryoablation of the Prostate (APC 5376)

CPT code 55873 (Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring)) describes the procedure associated with cryoablation of the prostate. For CY 2023, we assigned the code to APC 5376 (Level 6 Urology and Related Services), with a payment rate of $8,557.53. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to continue the code's assignment to APC 5376 with a payment rate of $8,847.08. Comment: A commenter requested that we finalize the proposed assignment to APC 5376 for CPT code 55873. Response: We note that the CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We reviewed the claims data for this final rule, and based on our review, we found the geometric mean cost of approximately $8,942 for CPT code 55873 based on 938 single claims (out of 942 total claims), is consistent with the geometric mean cost of about $9,022 for APC 5376. Based on the resource costs, we believe that CPT code 55873 appropriately fits in APC 5376 based on its clinical similarity and resource homogeneity to the codes in the APC. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 55873 to APC 5376 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

21. Drug Induced Sleep Endoscopy Evaluation CPT Code 42975 (APC 5153)

For the CY 2024 OPPS final rule, we proposed that CPT code 42975 (Drug-induced sleep endoscopy, with dynamic evaluation of velum, pharynx, tongue base, and larynx for evaluation of sleep-disordered breathing, flexible, diagnostic) with a geometric mean around $1,291 be assigned to APC 5153 (Level 3 Airway Endoscopy) with a payment rate of around $1,657. Comment: One commenter supported our decision to assign CPT code 42975 to APC 5153. Response: We appreciate the support of the commenter. After consideration of the public comment we received, we are implementing our proposal without modification for CPT code 42975 to continue to assign the procedure to APC 5153 (Level 3 Airway Endoscopy). Table 68 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.090 [[Page 81685]]

22. EchoGo Echocardiography Image Processing Service (APC 5743)

Effective July 1, 2023, based on a New Technology application received by CMS for an echocardiography image processing service, CMS established C9786 (Echocardiography image post processing for computer aided detection of heart failure with preserved ejection fraction, including interpretation and report) and assigned it to APC 5742 (Level 2 Electronic Analysis of Devices). For CY 2024, CMS proposed to continue to assign HCPCS code C9786 to APC 5742. Comment: One commenter supported the establishment of HCPCS code C9786 to describe the service and believed that the clinical APC group to which we proposed to assign the code for C9786 was appropriate. The commenter recommended that we work with the manufacturer to ensure proper accounting of hospital resources used to furnish the service. Response: We thank the commenter for their support. We welcome ongoing dialogue and engagement from interested parties, including manufacturers, regarding hospital resource costs and suggestions for payment changes for consideration in future rulemaking. Comment: We received a comment from the manufacturer requesting that HCPCS code C9786 be reassigned to APC 5743 (Level 3 Imaging without Contrast), which had a proposed payment rate of $277.18. The commenter believes that assigning HCPCS code C9786 to APC 5743 would be more appropriate based on resources involved in furnishing the service. The commenter explained that in addition to a per-service cost, there are a number of other costs incurred by hospitals to furnish the service, including a cardiac sonographer, use of a Picture Archiving and Communication System (PACS) workstation, and IT related costs. The commenter explained that the combined costs incurred by hospitals to furnish C9786 are considerably greater than those for procedures assigned to APC 5742, but are similar to the costs incurred for procedures assigned to APC 5743. Response: We thank the commenter for their recommendation. Based on our evaluation of the additional information provided and the services assigned to APC 5743, we agree that there are more resource similarities between HCPCS code C9786 and the codes assigned to APC 5743 than to the codes assigned to APC 5742. Therefore, for CY 2024 we are finalizing assigning HCPCS code C9786 to APC 5743. After consideration of the public comments, we are finalizing the assignment of HCPCS code C9786 to APC 5743. The final CY 2024 payment rate for these codes can be found in Addendum B to this final rule with comment period. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. In addition, we note that CMS recognizes that software-based technologies are rapidly evolving, like the product used for HCPCS code C9786. Consistent with our comment solicitation on payment policy for software as a service (SaaS) procedures in the CY 2023 OPPS final rule (87 FR 72035 and 72036), we are considering, for future rulemaking, whether or not specific adjustments to payment policies and rate calculations are necessary to more accurately and appropriately pay for these products and services across settings of care. CMS remains open to feedback on these issues and welcomes engagement from interested parties, including from manufacturers, providers, and beneficiaries.

23. Endoscopic Procedure--Upper GI Tract CPT Code 43252 (APC 5302)

CPT code 43252 (Esophagogastroduo- denoscopy, flexible, transoral; with optical endomicroscopy) describes a service that is used to visualize the upper portions of the GI tract from the esophagus to the duodenum. For the CY 2024 OPPS proposed rule, the geometric mean cost for this procedure was around $1,611, and we proposed to assign CPT code 43252 to APC 5302 (Level 2 Upper GI Procedures) with a payment rate of around $1,854. The payment rate for APC 5302 is approximately $240 more than the geometric mean cost of CPT code 43252. Comment: Two commenters requested that we assign CPT code 43252 to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around $3,803 for CY 2024. The procedure is assigned to APC 5303 for CY 2023 APC. Commenters assert that the payment amount for APC 5302 is too low for the procedure described by CPT code 43252. One commenter referenced an independent data analysis showing the number of claims for the service declined from around 340 services in CY 2021 to around 213 services in CY 2022. The commenter had questions about the quality of the CY 2022 data as some providers who had previously performed the procedure described by CPT code 43252 did not perform the procedure in CY 2022. Response: As we have stated regularly over the history of the OPPS, it is the responsibility of providers and other interested parties and not CMS to resolve potential claims and reporting issues for individual CPT codes and medical services payable by Medicare. There is no clear systematic error with the claims data for CPT code 43252. Also, the geometric mean cost for the service, which is around $1,596, is substantially lower than the payment rate for APC 5302 which is around $1,863. We note as well that in CY 2021, the geometric mean cost for CPT code 43252, which was around $1,985 was roughly $1,350 less than the payment rate for APC 5303, which was around $3,350. Therefore, it is not unexpected that the procedure would be reassigned to a lower- paying APC for CY 2024. After consideration of the public comments we received, we are implementing our proposal without modification for CPT code 43252 to continue to assign the procedure to APC 5302 (Level 2 Upper GI Procedures). Table 69 shows the finalized status indicator and APC assignment for the procedure code. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 81686]] [GRAPHIC] [TIFF OMITTED] TR22NO23.091

24. Endovascular Procedures With Coronary And Peripheral Intravascular

Lithotripsy (IVL) (APC 5192, 5193, 5194) Coronary IVL is a device that, according to its manufacturer, can help surgeons perform a safe and effective angioplasty procedure when arterial plaque is calcified. These procedures also are known as percutaneous coronary intervention (PCI). Coronary IVL received device pass-through status in the OPPS on July 1, 2021, and the device pass- through status is scheduled to expire on June 30, 2024. The device is described by HCPCS code C1761 (Catheter, transluminal intravascular lithotripsy, coronary) and is currently assigned to APC 2033 (Cath, trans intra litho/coro). The procedure also is reported with add-on CPT code 0715T (Percutaneous transluminal coronary lithotripsy (list separately in addition to code for primary procedure)), which is packaged in the OPPS. In CY 2024, CPT code 0715T is being replaced by CPT code 92972 (Percutaneous transluminal coronary lithotripsy (list separately in addition to code for primary procedure)). We propose to package this code as well. According to the manufacturer, the Coronary IVL device is used primarily with four endovascular procedures: C9600 (Percutaneous transcatheter placement of drug eluting intracoronary stent(s), with coronary angioplasty when performed; single major coronary artery or branch); 92928 (Percutaneous transcatheter placement of intracoronary stent(s), with coronary angioplasty when performed; single major coronary artery or branch); 92943 (Percutaneous transluminal revascularization of chronic total occlusion, coronary artery, coronary artery branch, or coronary artery bypass graft, any combination of intracoronary stent, atherectomy and angioplasty; single vessel); and 92920 (Percutaneous transluminal coronary angioplasty; single major coronary artery or branch). For the OPPS CY 2024 proposed rule, we proposed to assign these procedures to either APC 5192 (Level 2 Endovascular Procedures) or APC 5193 (Level 3 Endovascular Procedures), based on the geometric mean cost of each procedure. Because both APC 5192 and APC 5193 are comprehensive APCs, claims with higher costs for the PCI procedures described are eligible for a complexity adjustment which can provide one higher APC level of payment for these procedures. We also proposed to continue to assign HCPCS code C1761 to APC 2033 until June 30, 2024, when device pass-through status ends for HCPCS code C1761. Starting July 1, 2024, HCPCS code C1761 is proposed to be packaged with its associated endovascular procedures. Comment: Three commenters including the manufacturer of the Coronary IVL have requested that we take action to preserve the additional payment for the device described by HCPCS code C1761 that is used for PCI procedures through the end of CY 2024. The commenters suggest that we either use our equitable adjustment authority to extend pass-through status for HCPCS code C1761 through December 31, 2024, or increase the payment for the procedures most frequently used with Coronary IVL starting on July 1, 2024. Response: We appreciate the commenters' request to ensure consistent payment throughout CY 2024 for PCI procedures (HCPCS code C9600, CPT codes 92928, 92943, and 92920) that are performed using the Coronary IVL device described by HCPCS code C1761. However, only a small share of the PCI procedures are using the Coronary IVL device. Less than 6 percent of the procedures billed with HCPCS code C9600, CPT code 92928, and CPT code 92943 use the device described by HCPCS code C1761. For CPT code 92920, the percentage of procedures using the Coronary IVL device is less than 0.5 percent. The low amount of utilization of the Coronary IVL device with these PCI procedures means that it would not be appropriate to assign these procedures to a higher-paying APC to account for the cost of the device. These code combinations would also not meet the criteria for a complexity adjustment, as discussed in section II.A.2.b of this final rule with comment period. Likewise, we do not see a justification for extending device pass-through status for HCPCS code C1761. Device pass-through did not start for the Coronary IVL device until after the most serious disruptions in medical care occurred with the COVID-19 PHE, and none of the commenters suggested that CMS did not get adequate cost data for the device. In fact, the manufacturer was even willing to have pass- through status end early for HCPCS code C1761 because they felt enough cost data regarding the device had been collected. After consideration of the public comments we received, we are implementing our proposal without modification for HCPCS codes C1761 and C9600 and CPT codes 92920, 92928, 92943, and 92972. Table 70 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period or the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. BILLING CODE 4150-28-P [[Page 81687]] [GRAPHIC] [TIFF OMITTED] TR22NO23.092 BILLING CODE 4150-28-C

25. Extracorporeal Shock Wave Lithotripsy CPT Code 50590 (APC 5374)

Extracorporeal shock wave lithotripsy is a procedure used to break up stone in the urinary tract using directed shock wave therapy. Shock waves are generated by a lithotripter which is a machine and capital equipment for the provider. The procedure is described by CPT code 50590 (Lithotripsy, extracorporeal shock wave). For the CY 2024 OPPS proposed rule, CPT code 50590 had a geometric mean of around $3,450, and we proposed to assign the [[Page 81688]] service to APC 5374 (Level 4 Urology and Related Services). Comment: The HOP Panel and multiple commenters requested that CPT code 50590 be reassigned to APC 5375 (Level 5 Urology and Related Services) with a payment rate of around $5,016 to account for some of the capital cost of the procedure. The capital costs identified were primarily the purchase and maintenance of the lithotripter which, according to one commenter, cost $600,000 to purchase and another $60,000 a year to maintain. The commenters also stated that the procedure described by CPT code 50590 has clinical and resource similarity with procedures currently assigned to APC 5375. Response: We disagree with the commenters. Payments for services are for costs for providing individual procedures, but capital costs, depreciation, and other similar costs are largely excluded from our determination of the cost of a procedure. We note that the OPPS is a budget neutral system and, as such, the OPPS does not pay the full hospital cost of services, including for services that require the purchase and maintenance of high-cost capital equipment. We also compared the cost of CPT code 50590 to the cost of procedures currently assigned to APC 5375. While the cost of the procedure described by CPT code 50590 is around the middle of the cost range for APC 5374, it would be one of the lowest cost procedures in APC 5375. The number of procedures for CPT code 50590 would mean it would be a significant procedure in APC 5375, but its cost is around $700 lower than the current lowest-cost significant procedure for that APC. In addition, CPT code 50590 would be overpaid by around $1,500 if it was reassigned to APC 5375. Accordingly, we are continuing to assign CPT code 50590 to APC 5374. After consideration of the public comments we received, we are implementing our proposal without modification for CPT code 50590 to continue to assign the procedure to APC 5374 (Level 4 Urology and Related Services). Table 71 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.093

26. Eye-Movement Analysis Without Spatial Calibration (APC 5734)

The CPT Editorial Panel established CPT code 0615T (Eye-movement analysis without spatial calibration, with interpretation and report), 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. For CY 2023, we assigned CPT code 0615T to APC 5734 (Level 4 Minor Procedures) with a payment rate of $116.11. For CY 2024, we proposed to continue to assign the code to APC 5734 with a payment rate of $123.302. Comment: A device manufacturer disagreed with the proposed APC assignment and requested a revision to APC 5722 (Level 2 Diagnostic Tests and Related Services) with a payment rate of $ 304.35. The device manufacturer indicated that the proposed payment is insufficient since the cost to provide the service is about $250. The commenter noted that the proposed reimbursement of $123.302 does not include the cost of providing the EyeBox service, along with the other services provided on the same day (clinic visit and other services). The device manufacturer suggested reassigning CPT code 0615T to APC 5722 (Level 2 Diagnostic Tests and Related Services) to ensure appropriate payment for the service associated with the EyeBOX test. Response: For 2024, the OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Even with the latest claims data for this final rule with comment period, we still have no claims data for CPT code 0615T. We discussed in the CY 2023 OPPS/ASC final rule with comment period that based on the claims used for the CY 2023 OPPS update, we saw no claims associated with this code (87 FR 71858). Thus, this is the second year in which we have no claims data for the code. We believe that EyeBOX may not be utilized by Medicare patients, and this may be the reason we have no claims data for the code. Based on the lack of claims data, we believe that we should maintain the assignment to APC 5734 for CPT code 0615T. Therefore, we are not revising the APC assignment for CY 2024 for CPT code 0615T. We remind the commenter that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS. In summary, after consideration of the public comment we received, we are finalizing our proposal, without modification, to continue assignment to APC 5734 for CPT code 0615T for CY 2024. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reported under the OPPS. In addition, we refer readers to Addendum A of this final rule with comment period for the status indicator meanings for all codes reported under the OPPS. Addenda A and Addendum B are available via the internet on the CMS website. [[Page 81689]]

27. Femoral Popliteal Revascularization Procedure (APC 5192)

For CY 2023, we assigned CPT code 37224 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal angioplasty) to APC 5192 (Level 2 Endovascular Procedures), with a payment rate of $5,215.40. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to maintain the assignment to APC 5192 with a payment rate of $5,500.17. Comment: A commenter requested an APC reassignment for CPT code 37224 from APC 5192 to APC 5193 (Level 3 Endovascular Procedures), with a payment rate of $10,602.57, based on resource cost and clinical comparability to the procedures in the APC 5193. Response: The CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We analyzed the claims data for this final rule, and based on our review, we found the geometric mean cost of approximately $8,211 for CPT code 37224 based on 6,690 single claims (out of 6,730 total claims), is consistent with the geometric mean cost of about $5,598 for APC 5192, rather than the geometric mean cost of approximately $10,774 for APC 5193. Based on the claims data, we believe that CPT code 37224 fits more appropriately in APC 5192 rather than in APC 5193 based on resource cost and clinical similarity and to the procedures in APC 5192. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 37224 to APC 5192 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

28. Fluorescence In Situ Hybridization (FISH) Laboratory Service (APC

5672) For CY 2024, we proposed to reassign CPT code 88366 ((In situ hybridization (eg, FISH), per specimen; each multiplex procedure) from APC 5673 (Level 3 Pathology) to APC 5672 (Level 2 Pathology) with a proposed payment rate of $165.41. Comment: We received two comments explaining that CMS's proposal to reassign CPT code 88366 to APC 5672 would not capture the resource costs of the service. The commenters stated that, while not reflected in the OPPS claims data, the direct supply and equipment practice expense costs associated with the service reported under CPT code 88366 are nearly $30 higher than the proposed CY 2024 payment rate for APC 5672. The commenters requested that we continue to assign CPT code 88366 to APC 5673, as CMS has in previous years. Response: We appreciate the commenters' feedback on our proposal. However, we have no reason to believe that the claims data used to calculate the cost for CPT code 88366 does not appropriately reflect the hospitals' cost for providing this service, as asserted by the commenter. The commenter did not provide an explanation as to why the OPPS claims data did not reflect the cost of the service. We examined our claims data for the last several years, given the concern raised by the commenter regarding the accuracy of the claims data. In our review of the claims data for CPT code 88366, we found a steadily moderate volume of claims, and geometric mean costs that have remained stable, and consistently lower than the geometric mean costs for APC 5673 while remaining close to the geometric mean cost for APC 5672. For example, for the CY 2021 and CY 2022 final rules, the single frequency claims for CPT code 88366 were approximately 350 per year and the geometric mean costs for the code were just slightly below the geometric mean cost of APC 5672. Similarly, when we reviewed the claims data for the CY 2024 proposed rule, the claims frequency remained consistent at 348 single frequency claims and the geometric mean cost for CPT code 88366 was $113.14, approximately $50 lower than the geometric mean for APC 5672, which was $167.30. Therefore, based on our review of the available claims data, we believe that assigning CPT code 88366 to APC 5672 would be clinically and resource appropriate. After consideration of the public comments, we are finalizing our proposal without modification to assign CPT code 88366 to APC 5672 for CY 2024. The final CY 2024 payment rate for the code can be found in Addendum B to this final rule with comment period. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

29. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)/

HeartFlow (APC 5724) 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 service is indicated 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 patients should undergo further invasive testing (that is, a coronary angiogram). HeartFlow is currently described by CPT code 0503T (Noninvasive estimated coronary fractional flow reserve (ffr) derived from coronary computed tomography angiography data using computation fluid dynamics physiologic simulation software analysis of functional data to assess the severity of coronary artery disease; analysis of fluid dynamics and simulated maximal coronary hyperemia, and generation of estimated ffr model). On January 1, 2024, CPT code 0503T will be replaced by CPT code 75580 (Noninvasive estimate of coronary fractional flow reserve (FFR) derived from augmentative software analysis of the data set from a coronary computed tomography angiography, with interpretation and report by a physician or other qualified health care professional). HeartFlow is currently assigned to APC 5724 (Level 4 Diagnostic Tests and Related Services), and we have proposed for CY 2024 to continue to assign HeartFlow (CPT code 75580) to APC 5724 with a payment rate of around $1,024. Comment: One commenter expressed concerns that HeartFlow is underpaid in its current and proposed APC assignment of APC 5724, which the commenter feels may limit access to the procedure. Response: The geometric mean cost for the HeartFlow procedure in CY 2024 is around $860 which is substantially lower than the payment rate for APC 5724 which is around $1,024. The HeartFlow procedure is receiving a payment that is over $160 the estimated cost of the service, which means most providers are receiving sufficient payment for the service. [[Page 81690]] Comment: Multiple commenters supported our proposal to continue to assign HeartFlow to APC 5724 for CY 2024. Response: We appreciate the support of the commenters of our policy. After consideration of the public comments we received, we are finalizing our proposal without modification. Table 72 shows the finalized status indicator and APC assignment for CPT code 75580 for CY 2024. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.094

30. Gastric Electrophysiology Mapping with Simultaneously Validated

Patient System Profiling (GEMS) Service (APC 5723) Effective July 1, 2023, based on a New Technology application received by CMS for the GEMS service, CMS established HCPCS code C9787 (Gastric electrophysiology mapping with simultaneous patient symptom profiling) and assigned it to APC 5723 (Level 3 Diagnostic Tests and Related Services). For CY 2024, CMS proposed to continue to assign HCPCS code C9787 to APC 5723 with a proposed payment rate of $512.71 for CY 2024. Comment: We received several comments, including a comment from the manufacturer, requesting that we reassign HCPCS code C9787 to New Technology APC 1520 (New Technology--Level 20 ($1801-$1900)) with a payment rate of $1,850 given the lack of resource coherence with APC 5723. The commenters provided invoice costs and stated that the proposed APC assignment would be insufficient to cover the cost of furnishing the service and, therefore, may limit patient access. Per the comments received, hospitals would incur a minimum cost of $1,489 for the single-use device and supply costs associated with the Gastric Alimetry System, in addition to capital equipment costs of $10,000 for the Gastric Alimetry Reader as well as other capital costs. Given these costs, one commenter stated that even reassigning HCPCS code C9787 to the highest level in the same APC series as proposed, APC 5724 (Level 4 Diagnostic Tests and Related Services), would be insufficient to cover the costs of the service. While one commenter stated that the closest clinical APC with clinical and resource coherence for the GEMS service is APC 5302 (Level 2 Upper GI Procedures) with a proposed payment rate of $1,833.10 for CY 2024, the commenter still believed that assignment to a New Technology APC would be most appropriate because the service is new and the technology was first cleared by the FDA in June 2022. The commenter further stated that without an assignment to a New Technology APC, there is a significant risk that CMS will never generate the necessary claims data to assign the service to an appropriate clinical APC because hospitals will not offer the service when payment is less than a third of the cost to provide it. Response: We thank the commenters for their input. We disagree with the APC assignments recommended by commenters based on the purported costs of the service. Based on our review of the technology used as part of the service, clinical similarity of the service to existing procedures, input from CMS medical advisors, and review of all other information available to us, after further evaluation, we have found close resource and clinical similarities between HCPCS code C9787 and certain procedures currently assigned to APC 5723, including CPT code 0779T (Gastrointestinal myoelectrical activity study, stomach through colon, with interpretation and report). For example, both services are non-invasive diagnostic aids for gastrointestinal disorders that collect electrical signals through adhesive patches. From a resource perspective, we believe the costs associated with CPT code 0779T would be similar to those for HCPCS code C9787 based on similarities between the technologies and invoice prices. While the comments submitted focused on the purported resource costs of HCPCS code C9787, we did not find that the information provided was sufficient to differentiate between the service described by CPT code 0779T and that of HCPCS code C9787, and ultimately demonstrate that an assignment to APC 5723 is inappropriate. Because we believe that HCPCS code C9787 has similar clinical and resource characteristics as CPT code 0779T, we are finalizing our proposal to continue to assign C9787 to APC 5723 for CY 2024. After consideration of the public comments, we are finalizing our proposal to continue to assign HCPCS code C9787 to APC 5723. The final CY 2024 payment rate for the code can be found in Addendum B to this final rule with comment period. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

31. High Intensity-Focused Ultrasound (HIFU) of the Prostate (APC 5376)

CPT code 55880 (Ablation of malignant prostate tissue, transrectal, with high intensity-focused ultrasound (hifu), including ultrasound guidance) was effective January 1, 2021. For CY 2023, we assigned the code to APC 5376 (Level 6 Urology and Related Services), [[Page 81691]] with a payment rate of $8,557.53. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to maintain the assignment to APC 5376 with a payment rate of $8,847.08. Comment: A commenter requested that we finalize the proposed assignment to APC 5376 for CPT code 55880. Response: Our analysis of the claims data for this final rule demonstrates that the geometric mean cost for CPT code 55880 is approximately $6,613, which is consistent with APC 5376, whose geometric mean cost ranges between $6,613 and $9,827. We believe the code fits appropriately in APC 5376 based on clinical similarity and resource homogeneity with the procedures in the APC. In summary, after consideration of the public comment, we are finalizing our proposal without modification to assign CPT code 55880 to APC 5376 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

32. Hospital Outpatient Clinic Visit for Assessment and Management of a

Patient (G0463) In 2014, CMS established HCPCS code G0463 to describe the service associated with a hospital outpatient clinic visit for assessment and management of a patient. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75042), we stated that the code is applicable for hospital use only representing any clinic visit under the OPPS. We further stated that HCPCS code G0463 replaces evaluation and management (E&M) CPT codes 99201-99205 (new patient) and 99211-99215 (established patient), thereby eliminating the distinction between new and established clinic visits. Comment: We received two comments requesting CMS revise the definition of HCPCS code G0463 (Hospital Outpatient Clinic Visit for Assessment and Management of a Patient), and issue guidance for the correct use of this code, or alternatively create a new HCPCS code that describes a hospital outpatient department assessment. Both commenters assert that commercial payers are processing institutional claims from hospitals which include HCPCS code G0463 and have implemented billing policies which inappropriately conflate HCPCS code G0463 as a professional Evaluation and Management (E/M) code. The commenters state that the misuse of HCPCS code G0463 does not support orderly, consistent, and standardized hospital outpatient coding and billing for outpatient visits, and it is CMS's responsibility to ensure that the code is used correctly. Response: HCPCS code G0463 was established for use under Medicare's hospital OPPS. We reiterate that HCPCS code G0463 is used to describe hospital outpatient clinic services, not professional services. As part of the Health Insurance Portability and Accountability Act (HIPAA) code set, third-party payers may use any HCPCS code, including HCPCS codes established by CMS, to implement their policies, however, CMS does not establish third-party payer payment policies. Because the request to modify the descriptor is to implement third-party payer payment policies, we disagree that CMS should be responsible for providing instructions for how the code should be reported on non-Medicare claims. Third-party payers routinely provide coding guidance for how providers should report services and items for payment under their specific policies. If the commenters have concerns with the instructions provided by the third-party payers, we recommend the commenters reach out to the third-party payer that provided the guidance. We note that under the OPPS, HCPCS code G0463 is used to report clinic visits and enable Medicare to pay appropriately for those visits. For more information on the history of HCPCS code G0463, refer to the CY 2014 OPPS/ASC final rule with comment period.

33. Imaging of Retina for Detection or Monitoring of Disease (CPT Code

92229) (APC 5733) CPT code 92229 (Imaging of retina for detection or monitoring of disease; point-of-care autonomous analysis and report, unilateral or bilateral) is performed to screen patients with diabetes for signs of diabetic retinopathy and other eye diseases. The code was established in January 2021 and assigned to APC 5733 (Level 3 Minor Procedures). The code was assigned to Level 3 Minor Procedures because the service had clinical and resource similarity to long-established CPT code 92227 (Imaging of retina for detection or monitoring of disease; with remote clinical staff review and report, unilateral or bilateral) which also is assigned to Level 3 Minor Procedures. In CY 2022, there were 174 claims for CPT code 92229 and the geometric mean for the service was $34.53. The cost of the procedure was substantially closer to the payment rate for APC 5732 (Level 2 Minor Procedures) with a payment rate of $34.53 than to the payment rate for APC 5733 of $58.79. Based on these data, we proposed assigning CPT code 92229 to APC 5732 for CY 2024. Comment: Multiple commenters requested that we continue to assign CPT code 92229 to APC 5733 for CY 2024. The commenters asserted that there had not been enough claims data to accurately determine the cost of the procedure. Also, the commenters noted that the procedure described by CPT code 92229 had clinical and resource similarities to other procedures that had been assigned to either Level 3 Minor Procedures (APC 5733) or Level 4 Minor Procedures (APC 5734). Finally, the commenters also expressed concerns that assigning CPT code 92229 to APC 5732 would reduce access to retinal screenings for people with diabetes or at risk for eye diseases, especially for patients who are either poor or members of minority populations. Response: We note that CMS recognizes that software-based technologies are rapidly evolving, like the procedure described by CPT code 92229. In line with our comment solicitation on payment policy for software as a service (SaaS) procedures in the CY 2023 OPPS final rule (87 FR 72035 and 72036), CMS is considering, for future rulemaking, whether or not specific adjustments to payment policies and rate calculations are necessary in order to more accurately and appropriately pay for these products and services across settings of care. CMS remains open to feedback on these issues and welcomes engagement from interested parties, including from manufacturers, providers, and beneficiaries. We agree with the commenters that for CPT code 92229 we should wait for more claims data to be available before adjusting the current payment rates for these services. After consideration of the public comments we received, we are implementing our proposal with modification by maintaining the current assignment for CPT code 92229 in APC 5733 (Level 3 Minor Procedures). Table 73 shows the finalized status indicator and APC assignment for CPT code 92229 for CY 2024. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 81692]] [GRAPHIC] [TIFF OMITTED] TR22NO23.095

34. Imagio[supreg] Breast Imaging Service (APC 5522)

Effective October 1, 2023, based on a New Technology application received by CMS for the Imagio[supreg] Breast Imaging System, CMS established HCPCS code C9788 (Opto-acoustic imaging, breast (including axilla when performed), unilateral, with image documentation, analysis and report, obtained with ultrasound examination) and assigned it to APC 5521 (Level 1 Imaging without Contrast). For CY 2024, CMS proposed to continue to assign HCPCS code C9788 to APC 5521. Additionally, the AMA established a new Category III code to describe the same service, which will be effective January 1, 2024. For CY 2024, CMS also proposed to assign CPT placeholder code X183T (Opto-acoustic imaging, breast, unilateral, including axilla when performed, real-time with image documentation, augmentative analysis and report (List separately in addition to code for primary procedure)) to APC 5521, the same APC to which HCPCS code C9788 is assigned. Since the release of the proposed rule, CPT placeholder code X183T has been finalized as CPT code 0857T. We note that because both HCPCS code C9788 and CPT code 0857T describe the same service, effective January 1, 2024, CMS will delete HCPCS code C9788 and only CPT code 0857T will be used to bill for the service. For clarity, we will refer only to CPT code 0857T throughout this discussion regarding the final payment policy for the service for CY 2024. Comment: We received a comment from the manufacturer stating that the initial assignment to APC 5521 is inappropriately low to cover hospital costs to furnish the service. Based on resource costs, the commenter requested that CMS reassign CPT code 0857T from APC 5521 to APC 5523 (Level 3 Imaging without Contrast) with a proposed CY 2024 payment rate of $236.31. Specifically, the commenter provided a breakdown of the per-use device cost by dividing the price of the capital equipment, the Imagio[supreg] Breast Imaging System, by its useful life of 5 years and further dividing it by an estimated total use per year. The commenter noted that the cost breakdown was provided based on figures that had been updated since the time of their New Technology APC application in December 2022. Based on the calculations of the per-use device cost, as well as the procedure costs for equipment, labor, and supply, the commenter stated that the proposed payment rate for APC 5523 was a more appropriate APC assignment for the service. Response: We thank the commenter for their comment. We note that, in a budget neutral environment, payments may not fully cover hospitals' costs in a particular circumstance, including those for the purchase and maintenance of capital equipment, like that of the Imagio[supreg] Breast Imaging System. 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). Therefore, 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 for new services that lack hospital claims data based on realistic Medicare utilization projections for all such services delivered in cost-efficient hospital outpatient settings. With that said, based on the comment received, including the cost information provided, and further review of the service, we agree that the proposed APC assignment for CPT code 0857T to APC 5521 is not appropriate. However, we also do not believe that Medicare should pay for the entire cost of capital equipment as provided by the manufacturer when hospitals will furnish the service using the same equipment for both Medicare and non-Medicare beneficiaries. Therefore, we believe that an APC assignment to APC 5522 (Level 2 Imaging without Contrast) with a proposed payment rate of $106.04 would be more resource appropriate. Comment: The commenter requested CMS's feedback on what cost data or cost analysis are accepted by CMS when products are new to the market. Specifically, when there are few claims submitted for a new device, the commenter asked whether CMS would be open to accepting invoices provided by the company or other documentation to ensure an appropriate initial APC assignment rather than having to go through multiple rounds of reassignment requests through multiple rulemaking cycles. Response: We appreciate the comment. We generally assign new CPT codes to an APC based on input from a variety of sources, including, but not limited to, review of the resource costs and clinical similarity of the service to existing procedures; input from CMS medical advisors; information from interested specialty societies; and review of all other information available to us. We also believe continued engagement with interested parties through notice and comment rulemaking is a fundamental piece of the OPPS and allows for CMS to gather additional information. Regarding invoice pricing, CMS considers invoices provided by commenters or manufacturers, as well as other available cost information when assigning services to clinical APCs. However, invoice pricing is not the only piece of information that we consider, and therefore, we may appropriately assign a service to a clinical APC based on clinical and resource similarities, with a payment rate that nevertheless may not match the initial invoice costs provided exactly. After consideration of the public comment, we are finalizing the assignment of CPT code 0857T to APC 5522. The final CY 2024 payment rate for the code can be found in Addendum B to this final rule with comment period. We also refer readers to [[Page 81693]] Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

35. InSpace Subacromial Tissue Spacer Procedure (APC 5115)

For 2024, we proposed to continue to assign HCPCS code C9781 Arthroscopy, shoulder, surgical; with implantation of subacromial spacer (e.g., balloon), includes debridement (e.g., limited or extensive), subacromial decompression acromioplasty, and biceps tenodesis when performed) to APC 5115 (Level 5 Musculoskeletal Procedures) with a proposed payment rate of $13,269.40. Comment: We received several comments that endorsed the proposed APC assignment. Commenters expressed strong support for CMS's proposed increase to the payment rates associated with the InSpace balloon placement procedure described by HCPCS code C9781. They stated that the payment rates ensure that both patients and healthcare providers are able to fully leverage the benefits this technology offers. Response: We appreciate the commenters' support of our proposal. Based on our review of claims data available for this final rule with comment period, we believe an assignment to APC 5115 for CPT code C9781 is appropriate for CY 2024. In summary, after consideration of the public comments, we are finalizing our proposal without modification and assigning CPT code C9781 to APC 5115 for CY 2024. The final CY 2024 OPPS payment rate for the code can be found in Addendum B to this final rule with comment period.

36. Integrated Neurostimulation Services for Bladder Dysfunction (APCs

5461 and 5464) For CY 2024, the CPT Editorial Panel established four new Category III CPT codes, specifically, CPT codes 0816T, 0817T, 0818T and 0819T to describe integrated neurostimulation services for bladder dysfunction, effective January 1, 2024. CPT code 0816T is associated with the eCoin System. Because the final CY 2024 CPT code numbers were not available when we published the proposed rule, the codes were listed as placeholder codes X129T, X130T, X131T and X132T in the OPPS Addendum B of the CY 2024 OPPS/ASC proposed rule. 0816T: Open insertion or replacement of integrated neurostimulation system for bladder dysfunction including electrode(s) (e.g., array or leadless), and pulse generator or receiver, including analysis, programming, and imaging guidance, when performed, posterior tibial nerve; subcutaneous 0817T: Open insertion or replacement of integrated neurostimulation system for bladder dysfunction including electrode(s) (e.g., array or leadless), and pulse generator or receiver, including analysis, programming, and imaging guidance, when performed, posterior tibial nerve; subfascial 0818T: Revision or removal of integrated neurostimulation system for bladder dysfunction, including analysis, programming, and imaging, when performed, posterior tibial nerve; subcutaneous 0819T: Revision or removal of integrated neurostimulation system for bladder dysfunction, including analysis, programming, and imaging, when performed, posterior tibial nerve; subfascial In the 2024 OPPS/ASC proposed rule, we proposed to assign CPT codes 0816T and 0817T to APC 5464 (Level 4 Neurostimulator and Related Procedures) with a proposed payment rate of $21,376.53 based on clinical and resource similarity to CPT code 64590 (Insertion or replacement of peripheral or gastric neurostimulator pulse generator or receiver, direct or inductive coupling). In addition, we proposed to assign CPT codes 0818T and 0819T to APC 5461 (Level 1 Neurostimulator and Related Procedures) with a proposed payment rate of $3,364.67 based on clinical and resource similarity to CPT code 64595 (Revision or removal of peripheral or gastric neurostimulator pulse generator or receiver). Comment: Most commenters endorsed the assignment of CPT code 0816T to APC 5464. They were appreciative that CMS recognizes through this APC assignment the importance of advancing healthcare options for Medicare beneficiaries and the need for continued accessibility of new technologies, like the eCoin system procedure, into sites of service that best serve the complexities of treating some Medicare beneficiaries. One commenter stated that they believe the decision by CMS appropriately aligns the proposed payment level with the intended purpose and clinical complexity of the eCoin system described by CPT code 0816T. In doing so, the commenter stated, CMS continues to empower appropriate medical decision-making by providers for Medicare beneficiaries that will best align with each patient's unique healthcare needs. Another commenter expressed that they were very pleased with our decision to assign implantable tibial generator codes 0816T and 0817T to Level 4 APC 5464 and revision/removal generator codes 0818T and 0819T to Level 1 APC 5461. This commenter stated that this decision creates resource and clinical parity with CPT code 64590 (Insertion or replacement of peripheral or gastric neurostimulator pulse generator or receiver, direct or inductive coupling) which describes sacral neuromodulation (SNM) generator implant and CPT code 64595 (Revision or removal of peripheral or gastric neurostimulator pulse generator or receiver) which describes revision/removal procedures which have the same Level 4 APC and Level 1 APC categories, respectively. This supports the fact that implantable tibial procedures require similar resources and support as SNM including pre-op time, recovery, fluoroscopy, patient follow-up, monitoring and anesthesia. Response: We appreciate the commenters' feedback on these new Category III CPT codes. We agree with commenters' recommendations to finalize the proposed APC assignments. In summary, after reviewing the public comments for the proposal, we are finalizing our proposal without modification to assign CPT codes 0816T and 0817T to APC 5464 and to assign CPT codes 0818T and 0819T to APC 5461. The final CY 2024 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 meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. For additional discussion regarding the commenters' request to increase the device offset of CPT codes 0816T and 0817T refer to section IV.B. of this final rule with comment period.

37. LimFlow TADV Procedure CPT Code 0620T (APC 1578)

The LimFlow TADV procedure which is described by CPT code 0620T (Endovascular venous arterialization, tibial or peroneal vein, with transcatheter placement of intravascular stent graft(s) and closure by any method, including percutaneous or open vascular access, ultrasound guidance for vascular access when performed, all catheterization(s) and intraprocedural roadmapping and imaging guidance necessary to complete the intervention, all associated radiological supervision and interpretation, when performed) is a new endovascular procedure that is used to treat patients with chronic limb- [[Page 81694]] threatening ischemia. According to the developer, these patients are no longer eligible for conventional endovascular or open bypass surgery to treat their artery blockage, and without this procedure, they are likely to face limb amputation. According to the developer, the LimFlow TADV procedure received full FDA PMA approval on September 11, 2023. Previously, the procedure could be performed through a Category B IDE study. CPT code 0620T, which describes the LimFlow TADV procedure was established in January of 2021 and was assigned to APC 5194 (Level 4 Endovascular Procedures) with a payment rate of around $17,400, which is the highest-paying APC for endovascular procedures. For the CY 2024 proposed rule, we proposed to continue to assign CPT code 0266T to APC 5194. Comment: The HOP Panel and two commenters, including the developer of LimFlow TADV procedure, requested that CPT code 0620T be reassigned to a New Technology APC that better reflects the cost of the procedure. Commenters were concerned that if CPT code 0620T continued to be assigned to APC 5194, the low payment for the procedure would discourage providers from performing the procedure and deny access to LimFlow TADV to vulnerable and underserved populations. Response: We agree with the HOP Panel and commenters that CPT code 0620T should be reassigned to a New Technology APC that better reflect the costs of the procedure. Because there are only 15 claims for the procedure for CY 2021 and CY 2022, the LimFlow TADV procedure is subject to our new technology procedure low-volume policy. An analysis of the median, arithmetic mean, and geometric mean of CPT code 0620T found that the median was $25,801.85, the arithmetic mean was $28,628.62, and the geometric mean was $26,716.31. Based on our policy, we estimate the cost of the LimFlow TADV procedure to be $28,628.62 as the arithmetic mean has the highest value of the three cost statistics. Therefore, we plan to reassign CPT code 0620T to New Technology APC 1578 (New Technology--Level 41 ($25,001-$30,000)) with a payment rate of around $27,500. After consideration of the public comments we received, we are implementing our proposal with modification for CPT code 0620T as we will update its APC assignment to APC 1578 (New Technology--Level 41 ($25,001-$30,000)). Table 74 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.096

38. Lixelle Apheresis

Lixelle [beta]2-microglobulin Apheresis Column is indicated for use in the treatment of dialysis[hyphen]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 [beta]2-microglobulin, typically from chronic hemodialysis (typically 5 years or longer). The Lixelle device is used in an apheresis procedure that selectively removes [beta]2-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[supreg] 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: A commenter urged CMS to provide reimbursement for Lixelle to benefit patients with DRA. Another commenter requested separate payment under the Medicare ESRD PPS. This same commenter stated that if separate payment does not apply under the ESRD PPS, the service should be paid separately under the OPPS when furnished in the HOPD facility. Specifically, the commenter requested that CMS provide separate payment under the OPPS, and offered the following options: (1) establish a new HCPCS C code or G code for the Lixelle apheresis procedure and assign the code to APC 5242 (Level 2 Blood Product Exchange and Related Services); or (2) pay separately for the apheresis procedure used with the Lixelle device through CPT code 36516 (Therapeutic apheresis with extracorporeal immunoadsorption, selective adsorption or selective filtration and plasma [[Page 81695]] reinfusion), proposed to be assigned to APC 5243 (Level 3 Blood Product Exchange and Related Services) for CY 2024, and require 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); or (3) allow separate payment for 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 2024, and require the use of a modifier or add-on code to provide additional payment beyond that provided for APC 5401 Response: We appreciate the recommendations and will consider them for future rulemaking. We note this complex, ongoing issue is still under consideration and a thorough evaluation is necessary to ensure the appropriate Medicare benefit category and payment for the service.

39. Meibomian Gland Repair (MGR) (APC 5733)

For 2020, the AMA's Editorial Panel established CPT code 0563T (Evacuation of meibomian glands, using heat delivered through wearable, open-eye eyelid treatment devices and manual gland expression, bilateral), effective January 1, 2020, to describe the treatment associated meibomian gland dysfunction (MGD) and dry eye disease (DED). For CY 2023, we assigned the code to APC 5733 (Level 3 Minor Procedures) with a payment rate of $57.48. For CY 2024, we proposed to continue with the assignment to APC 5733 with a payment of $58.13. Comment: A commenter disagreed with proposed assignment to APC 5733 and stated that the proposed payment for CPT code 0563T does not reflect the time, intensity, clinical resources, and technology required to provide the service. The commenter indicated that the time and resources required to perform the service is significantly greater than the proposed reimbursement for APC 5733. The commenter further stated that based on the clinical complexity of the service, CPT code 0563T would be more appropriately placed in APC 5502 (Level 2 Extraocular, Repair, and Plastic Eye Procedures) with a payment of $991.30, based on its clinical similarity to the procedures in the APC, and urged CMS to revise the assignment to APC 5502. Response: We reviewed our claims data for this final rule with comment period. We note that the CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Based on our evaluation of the claims data for this final rule with comment period, we found no claims data for the code. Due to the lack of claims data, we believe that we should continue to assign the code to APC 5733. Once we have adequate claims data, we will review and determine whether a change in the APC assignment is necessary. In summary, after consideration of the public comment, we are finalizing our proposal without modification, and assigning CPT code 0563T to APC 5733 for CY 2024. As we do every year, we will reevaluate the APC assignment for the code in the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS. The final CY 2024 OPPS payment rate for all the codes payable under the OPPS 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. Addendum D1 is available via the internet on the CMS website.

40. MindMotion[supreg] GO Neurorehabilitative Remote Therapy Service

(APC 5741) Effective July 1, 2022, the CPT Editorial Panel created CPT codes 0733T (Remote real-time, motion capture-based neurorehabilitative therapy ordered by a physician or other qualified health care professional; supply and technical support, per 30 days) and 0734T (Remote real-time, motion capture-based neurorehabilitative therapy ordered by a physician or other qualified health care professional; treatment management services by a physician or other qualified healthcare professional, per calendar month) to describe the clinician services associated with patient use of MindMotion[supreg] GO, a rehabilitative at home therapy program, remotely monitored by a therapist, for patients who have suffered certain neurological conditions. For CY 2024, CMS proposed to continue to assign CPT code 0733T to APC 5741 (Level 1 Electronic Analysis of Devices) with a proposed payment rate of $36.79. CMS also proposed to continue to assign status indicator ``B'' to CPT code 0734T for CY 2024. Comment: We received a comment from the manufacturer requesting that we assign CPT code 0733T to a more clinically and resource appropriate APC for CY 2024. The commenter stated that the proposed APC assignment to APC 5741 for CPT code 0733T was not resource appropriate because it did not cover the cost of several items and capital equipment, including a mini-PC to run the treatment software, 3D motion-tracking camera to track patient movement, camera to enable certain hand rehabilitative exercises, and a pressure-sensitive peripheral to measure hand grip for different hand rehab exercises. The commenter did not provide invoice costs or estimated costs for these components. Additionally, the commenter stated that they believed APC 5741 is not clinically appropriate for CPT code 0733T because the APC contains several monitoring services, and, per the commenter, CPT code 0733T performs remote monitoring subsequent to its ability to provide treatment. Finally, the commenter pointed to CPT code 0693T (Comprehensive full body computer-based markerless 3D kinematic and kinetic motion analysis and report), which describes the service involving the DARI Motion Procedure and has a proposed APC assignment to New Technology APC 1505 (New Technology--Level 5 ($301-$400)) for CY 2024, as a clinically similar service. Response: We thank the commenter for their input regarding the proposed CY 2024 APC assignment for CPT 0733T. First, because the code was first made effective on July 1, 2022, and is relatively new, we do not have any claims data at this time. However, we note that as is our policy for new codes for which we lack pricing information, we assign the service to an existing 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, and review of all other information available to us. Based on our understanding of the service and input from our medical advisors, we do not agree that CPT code 0733T is dissimilar to other services in APC 5741 such that it should be assigned to a different APC. We believe that CPT code 0733T is more similar to services in APC 5741 than services in other APCs, including CPT code 0693T, which is currently assigned to New Technology APC. We note that the long descriptor for CPT code 0733T describes a remote service similar to other codes with remote components in APC 5741, including CPT code 98976. Based on the [[Page 81696]] nature of the procedure and the information available to us, we continue to believe that CPT code 0733T is appropriate for assignment to APC 5741 for CY 2024. Comment: The manufacturer also commented to support the reassignment of the status indicator for CPT code 0734T from status indicator ``B'' to status indicator ``S,'' based on a public presentation at the Advisory Panel on Outpatient Payment (HOP Panel) on August 22, 2023, recommending that the status indicator assignment of CPT code 0734T and other remote monitoring codes change from ``B'' to ``S'' and be assigned to APC 5741. Response: We first note that CMS did not propose to change the status indicator of CPT code 0734T from ``B'' to ``S'' for CY 2024. CPT code 0734T describes a professional service, specifically treatment management services by a physician or other qualified healthcare professional. Therefore, CPT code 0734T is not payable under the OPPS and would not be appropriate for separate payment as indicated by status indicator ``S.'' For CY 2024, we believe it is appropriate to finalize the status indicator for CPT 0734T as proposed. After consideration of the public comment, we are finalizing our proposal to continue to assign CPT code 0733T to APC 5741 as proposed. We are also finalizing our proposal to continue to assign status indicator ``B'' to CPT code 0734T. The final CY 2024 payment rate for CPT code 0733T can be found in Addendum B to this final rule with comment period. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

41. Minimally Invasive Glaucoma Surgery (MIGS) (APC 5493)

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) was effective January 1, 2022. For CY 2023, we assigned CPT code 0671T to APC 5491 (Level 1 Intraocular Procedures) with a payment rate of $2,159.44. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to reassign the code to APC 5492 (Level 2 Intraocular Procedures), with a payment rate of $3,970.62. We received some comments related to the proposal. Comment: Several commenters agreed with our proposal and requested that we finalize the assignment to APC 5492. However, other commenters disagreed with the assignment to APC 5492, and instead suggested assignment to APC 5493 (Level 3 Intraocular Procedures), with a payment rate of $5,110.58. These commenters reported that CPT code 0671T is one of three MIG codes that the CPT Editorial Panel established effective January 1, 2022, and noted that the other two MIG codes (66989 and 66991) are proposed for assignment to APC 5493. Because of its similarity to CPT codes 66989 and 66991, the commenters suggested reassignment to APC 5493 for CPT code 0671T. Response: We reviewed our claims data for this final rule with comment period. The CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We note that CY 2024 is the first year that we have claims data for the code. Based on our analysis of the claims data for this final rule, the resource costs related to CPT code 0671T seems more appropriately in APC 5493 rather than APC 5492. Specifically, our claims data shows a geometric mean cost of about $5,610 for CPT code 0671T based on 79 single claims (out of 79 total claims), which is consistent with the geometric mean cost of approximately $5,118 for APC 5493, rather than the geometric mean cost of approximately $3,982 for APC 5492. Based on the resource costs to furnish the service associated with CPT code 0671T, which are consistent with APC 5493, we believe that reassignment to APC 5493 is appropriate. Therefore, we are revising the assignment for CPT code 0671T, to APC 5493 for CY 2024. With regard to the other two MIG codes mentioned by the commenter, specifically, CPT codes 66989 and 66991, refer to section III.C. of this final rule with comment period for the discussion related to the payment for the codes. In summary, after consideration of the public comments, we are finalizing the APC assignment for CPT code 0671T with modification. Specifically, we are revising the APC assignment for CPT code 0671T to APC 5493 for CY 2024. The final CY 2024 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. Addendum D1 is available via the internet on the CMS website.

42. 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 and 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 requested changes 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 and 58921). For CY 2024, based on the claims data available for the CY 2024 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 it for the CY 2024 OPPS update. Comment: One commenter requested that CMS reassign CPT code 23472 (Arthroplasty, glenohumeral joint; total shoulder) from APC 5115to APC 5116 (Level 6 Musculoskeletal Procedures). According to the commenter, the requested assignment would more closely track hospital resources used in performing these procedures and appropriately align with other clinically similar procedures. The commenter stated that with regard to cost, according [[Page 81697]] to CMS's 2 Times Listing document released with the proposed rule, the geometric mean cost (GMC) of claims reporting total shoulder CPT 23472 is $17,423.52, which represents the highest cost ``significant'' procedure within APC 5115. In fact, the GMC of CPT code 23472 exceeds the GMC of four ``significant'' procedures that CMS proposes to assign to APC 5116: CPT 22867 (Insertion of interlaminar/interspinous process stabilization/distraction device, without fusion, including image guidance when performed, with open decompression, lumbar; single level)--GMC of $14,803.74 CPT 27279 (Arthrodesis, sacroiliac joint, percutaneous or minimally invasive (indirect visualization), with image guidance, includes obtaining bone graft when performed, and placement of transfixing device)--GMC of $15,788.69 CPT 22856 (Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection); single interspace, cervical)--GMC of $16,078.32 CPT 22612 (Arthrodesis, posterior or posterolateral technique, single interspace; lumbar (with lateral transverse technique, when performed))--GMC of $16,870.82 This commenter stated that the GMC of CPT code 23472 is about $500.00 closer to the GMC of APC 5116 ($20,928.08) than APC 5115 ($13,420.64), reinforcing that APC 5116 is a more appropriate assignment for CPT 23472 and furthermore, this payment misalignment-- resulting in a $4,000 opportunity cost to hospitals performing this procedure on average--threatens the availability of this procedure on an outpatient basis. The commenter also provided clinical information, stating that shoulder replacement and reverse shoulder replacement procedures represented by CPT code 23472 are very complex, involving three bones and limited access space due to the muscles, ligaments, and tendons surrounding the joint. These procedures are clinically comparable to other procedures assigned to APC 5116, such as total elbow arthroplasty (TEA) CPT code 24363. TEA and TSA procedures involve similar complexity and are typically performed by specialized, fellowship- or subspecialty-trained shoulder and elbow orthopaedic surgeons. Response: We appreciate the commenter's recommendation. Based on our analysis of the latest CY 2022 claims data available for CY 2024 OPPS ratesetting, the geometric mean cost associated with CPT code 23472 is $17,370.78 based on 51,120 single claims (out of 51,506 total claims), which is consistent with the geometric mean cost of $18,250.77 for APC 5116. We also note that the APC 5115 has a range of HCPCS geometric mean costs for cost significant codes from $10,641.75 to $16,292.97with the geometric mean cost of CPT code 23472 being at the higher end of the cost range. The geometric mean cost for APC 5115 is $12,889.60. Based on the data, we believe that APC 5116 is the more appropriate assignment rather than APC 5115 for CPT code 23472. Therefore, we agree with the commenter and are reassigning CPT code 23472 from APC 5115 to APC 5116 for CY 2024. The final CY 2024 OPPS payment rates for the codes can be found in Addendum B to this final rule with comment period. After consideration of the public comments, we are finalizing our proposal to maintain the six-level Musculoskeletal Procedures APC structure. We are also finalizing an assignment of CPT code 23472 to APC 5116, rather than APC 5115, for the CY 2024 OPPS.

43. Noncontact Near-infrared (NIR) Spectroscopy (APC 5732)

In July 2021, the AMA's CPT Editorial Panel established three new codes to describe the service related to noncontact near-infrared spectroscopy. For CY 2024, the CPT Editorial Panel made several changes to the codes to accurately describe the services currently performed in the medical setting for noncontact near-infrared spectroscopy. Specifically, the CPT Editorial Panel took the following actions for CY 2024: deleted CPT code 0641T and 0642T, effective December 31, 2023; revised the descriptor for existing CPT code 0640T to include the services previously described in CPT codes 0641T and 0642T; and established two new codes, specifically, CPT code 0859T, which was listed as placeholder code X1914T in the CY 2024 OPPS/ASC proposed rule, and CPT code 0860T, which was listed as placeholder code X171T, effective January 1, 2024. The complete long descriptors for the codes are listed below in Table 75, along with the CY 2023 and proposed CY 2024 OPPS status indicator and APC assignments (where applicable). [[Page 81698]] [GRAPHIC] [TIFF OMITTED] TR22NO23.097 Based on the code changes, we proposed to take the following actions for CY 2024: CPT code 0640T: With the revised descriptor to include the descriptions that were listed in CPT codes 0641T and 0642T, we proposed to revise the status indicator for CPT code 0640T from ``M'' (professional-only service) to ``T'' and assigned the code to APC 5732 (Level 2 Minor Procedures), with a payment $ 37.05. Under the OPPS, the predecessor code for CPT code 0640T is CPT code 0641T. CPT code 0641T: We proposed to assign the code to status indicator ``D'' to indicate that the code would be deleted at the end of the year, and crosswalked the separate payment status indicator of ``T'' and assignment of APC 5732 to CPT code 0640T. [[Page 81699]] CPT code 0642T: We proposed to assign the code to status indicator ``D'' to indicate that the code would be deleted at the end of the year. Because the code was assigned to status indicator ``M'' (professional-only service), we did not crosswalk this code to any payable indicators or APC. CPT code 0859T: Because the code describes an add-on service to CPT code 0640T, and must always be reported on the same day with CPT code 0640T, we proposed to assign the code to status indicator ``N'' to indicate that the code is packaged and payment is included in the primary service. Under the OPPS, most add-on codes are packaged, as specified in 42 CFR 419.2(b)(18). CPT code 0860T: We proposed to assign this code to status indicator ``E1'' to indicate that the code is not covered or payable by Medicare for CY 2024. We received several comments related to our proposals. Below are the comments and our responses. Comment: Many commenters requested separate payment for CPT code 0860T and indicated that Medicare beneficiaries would benefit from essential screening for peripheral arterial disease (PAD). Some commenters clarified that one-third of patients over age 65 with diabetes or a history of smoking have PAD, and with the increased risk of death and other cardiovascular complications, including heart attack and stroke, the commenters believe that it is essential to diagnose and treat PAD as early as possible. The commenters urged CMS to make available PAD screening options to the Medicare population and requested separate payment for the service. Response: CPT code 0860T describes a screening for peripheral arterial disease (PAD). Currently, Medicare has not established coverage for screening for PAD. Specifically, this screening code does not qualify for Medicare coverage since there is no national coverage determination (NCD) for PAD screening. Consequently, we proposed to assign the code to status indicator ``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, statutorily excluded by Medicare, or not reasonable and necessary. We note that on August 7, 2013, CMS published a Federal Register notice (78 FR 48164 through 48169), updating the process used for opening, deciding or reconsidering national coverage determinations (NCDs). If the commenter would like to request Medicare coverage for PAD screening, we strongly recommend submitting an application to CMS. New screening and preventive tests coverage are added through the National Coverage Determination (NCD) process. Information on the Medicare coverage determination process, the application process, as well how to request a new NCD, or revision to an existing NCD, can be found on the CMS website, specifically, at https://www.cms.gov/medicare/coverage/determination-process/request. Comment: Several commenters requested separate payment for CPT code 0640T, and suggested reassignment to status indicator ``S'' (Procedure or Service, Not Discounted When Multiple. Paid under OPPS; separate APC payment.), and APC 5722 (Level 2 Diagnostic Tests; proposed payment of $304.35). The commenters reported that the NIR technology described by CPT code 0640T is similar to the technology described with CPT code 0598T, which is assigned to status indicator ``S'' and APC 5722. Specifically, CPT code 0598T describes a hand-held device that detects bacteria in a wound through fluorescence color, while CPT code 0640T and CPT code 0859T describes a hand-held device that detect a wound's blood oxygen level at the point of care. Because of its similarity to CPT code 0598T, the commenters recommended reassignment to APC 5722 for CPT code 0640T. Response: Prior to the descriptor revision for CPT code 0640T, the technical service associated with noncontact near-infrared spectroscopy was described by CPT code 0641T, which was assigned to APC 5732 for CY 2023. Under the OPPS, the predecessor code for CPT code 0640T is CPT code 0641T. We note that the CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Based on our analysis of the claims data for this final rule with comment period, we found a geometric mean cost of about $14 for predecessor CPT code 0641T based on 46 single claims (out of 266 total claims). In contrast, we found a geometric mean cost of approximately $239 for CPT code 0598T based on 529 single claims (out of 1,317 total claims). Based on the data, the resource cost associated with noncontact real-time fluorescence imaging (CPT code 0598T), is significantly higher compared to noncontact near- infrared (NIR) spectroscopy (CPT code 0640T/0641T). While both technologies may have the same indication, we disagree that the resource cost for noncontact near-infrared (NIR) spectroscopy is similar to noncontact real-time fluorescence imaging. Therefore, we do not agree that both technologies should be placed in the same APC. We believe that the code describing noncontact near-infrared (NIR) spectroscopy, specifically, CPT code 0640T, is appropriately placed in APC 5732. Comment: Many commenters requested separate payment for CPT code 0859T, and suggested assignment to status indicator ``S'' and APC 5722. Response: Under the OPPS, CPT code 0859T is assigned to status indicator ``N'' to indicate that the payment is packaged in the primary code. The phrase ``list separately in addition to code for primary procedure'' is included in the long descriptor for CPT code 0859T to indicate that that the code is considered an ``add-on'' to another primary code and cannot be reported independently. Add-on codes must always be reported with another primary code on the same day. The AMA states in the CPT 2024 Professional Edition (page xviii) that ``add-on codes are always performed in addition to the primary service or procedure and must never be reported as a stand-alone code.'' In most cases, add-on codes are typically ancillary and supportive to a primary diagnostic or therapeutic modality and are an integral part of the primary service they support. As specified under regulation 42 CFR 419.2(b)(18), add-on codes are packaged under the OPPS, and payment for the codes are bundled with the primary codes. Consequently, CPT code 0859T is not paid separately under the OPPS, but instead, the payment is packaged into the primary code. In this instance, the primary code for CPT code 0859T is CPT code 0640T. In summary, after consideration of the public comments, we are finalizing the status indicators and APC assignment, without modification, for CPT codes 0640T, 0641T, 0642T, 0859T, and 0860T. Table 76 below list the final CY 2024 OPPS SI and APC assignment for the codes. As we do every year, we will reevaluate the APC assignment for the codes in the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS. The final CY 2024 OPPS payment rate for all the codes payable under the OPPS 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. Addendum D1 is available via the internet on the CMS website. [[Page 81700]] [GRAPHIC] [TIFF OMITTED] TR22NO23.098

44. Optilume Benign Prostatic Hyperplasia (BPH) Procedure (APC 5376)

On February 5, 2020, CMS approved for Medicare coverage the Category B Investigational Device Exemption (IDE) study associated with Urotronic's BPH Catheter System (Study Title: A Clinical Study to Evaluate the Safety and Efficacy of the OptilumeTM BPH Catheter System in Men With Symptomatic BPH (PINNACLE); NCT number NCT04131907; IDE number G190217). In July 2020, AMA's CPT Editorial Panel established CPT code 0619T (Cystourethroscopy with transurethral anterior prostate commissurotomy and drug delivery, including transrectal ultrasound and fluoroscopy, when performed), effective July 1, 2020, to describe the surgery related to the BPH Catheter System. For 2023, we assigned CPT code 0619T to APC 5375 (Level 5 Urology and Related Procedures) with a payment rate of $4,702.18. For 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to maintain the assignment to APC 5375 with a payment of $4,959.89. Comment: A commenter made some requests related to CPT code 0619T. First, the commenter explained that the surgery associated with the code involves a $5,700 Optilume BPH Catheter System Kit that contains two balloon catheters, one that is drug-coated, and another that is non-drug coated. The commenter indicated that the estimate for the total surgery cost, which includes the cost of the device, is approximately $12,109. Based on their estimate for the total surgery cost, the commenter requested a reassignment from APC 5375 to APC 5377 (Level 7 Urology and Related Procedures, proposed payment of $12,568.91), which would include the cost of both the procedure and the device kit. Secondly, as an alternative, if CMS is unable to reassign the code to APC 5377, the commenter requested the approval of their New Technology Procedure/Service application, and the establishment of a new HCPCS C-code to describe the procedure whose payment is assigned to New Technology APC 1575 with a payment of $12,500.50. In addition, the commenter clarified that the 2 claims for CPT code 0619T do not apply to the Optilume BPH procedure since the device received FDA Premarket Approval (PMA) just recently in June 2023. Response: First, with regards to the New Technology APC application submitted to CMS, in general, New Technology APC application determinations are not made via rulemaking. We note that in this specific case, the application is pending review and still under consideration. Therefore, we are unable to respond to the APC request for the New Technology APC application in this final rule with comment period. Secondly, we note that the CY 2024 OPPS payment rates are based on claims [[Page 81701]] submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We reviewed the claims data for this final rule, and based on our review, we found the geometric mean cost of approximately $6,218 for CPT code 0619T based on 3 single claims (out of 3 total claims). Although one commenter suggested that the 2 claims we have for the CY 2024 ratesetting are not valid because the device received FDA PMA approval in June 2023 and could not represent the Optilume BPH device, we note that Medicare approved coverage of the Category B IDE study that involves the use of this device in February 2020. Although the Optilume BPH device received FDA approval in June 2023, because the Category B IDE study was approved much earlier in February 2020, HOPD facilities may have reported the device on Medicare claims by using an unlisted device code (for example, C1889) or device revenue code (for example, 027X). Based on the comments received, evaluation of the procedure, and our assessment of the request, we believe that CPT code 0619T is most similar to CPT code 0421T (Transurethral waterjet ablation of prostate, including control of post-operative bleeding, including ultrasound guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included when performed)), which is assigned to APC 5376 with a proposed payment rate of $8,847.08. We note that APC 5376 contains several BPH-related procedures, which include the following: 0421T: Transurethral waterjet ablation of prostate, including control of post-operative bleeding, including ultrasound guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included when performed) 55873: Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring 55880: Ablation of malignant prostate tissue, transrectal, with high intensity-focused ultrasound (hifu), including ultrasound guidance), and C9740: Cystourethroscopy, with insertion of transprostatic implant; 4 or more implants Based on the similarity to CPT code 0421T and the other BPH-related procedures in APC 5376, we believe that assigning CPT code 0619T to APC 5376 is the best approach at this time. We reiterate that we review our claims data on an annual basis to establish the OPPS payment rates. Once we have data, we will evaluate and, if necessary, reassign the code to an appropriate APC based on the latest claims data. Finally, we remind the commenter that 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 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. For new procedures and items, we get many requests from manufacturers to increase the reimbursement for the code associated with their procedures and items. 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. On balance, 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). In summary, after consideration of the public comment that we received, we are finalizing our proposal, with modification. Specifically, we are finalizing our proposal and assigning CPT code 0619T to APC 5376 for CY 2024. The final payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

45. Optilume Urethral Stricture Procedure (APC 5375)

Effective January 1, 2018, the AMA's CPT Editorial Panel established Category III CPT code 0499T (Cystourethroscopy, with mechanical dilation and urethral therapeutic drug delivery for urethral stricture or stenosis, including fluoroscopy, when performed) to describe the procedure related to the Optilume Urethral Stricture Device System. For 2024, AMA is deleting the Category III CPT code on December 31, 2023, and replacing it with a Category I CPT code, specifically, CPT code 52284 (Cystourethroscopy, with mechanical urethral dilation and urethral therapeutic drug delivery by drug-coated balloon catheter for urethral stricture or stenosis, male, including fluoroscopy, when performed), effective January 1, 2024. We note that CPT code 52284 was listed as placeholder code 5X000 in OPPS Addendum B and Addendum O that was released with the CY 2024 OPPS/ASC proposed rule with comment period. Because we had not received the final CPT code numbers from AMA for the new codes that would be effective January 1, 2024, in time for the publication of the proposed rule, we listed the new CPT codes with their respective placeholder codes in OPPS Addendum B and Addendum O. For CY 2023, we assigned CPT code 0499T to APC 5374 (Level 4 Urology and Related Services) with a payment rate of $4,702.18. Because CPT code 0499T was scheduled for deletion on December 31, 2023, and replaced with CPT code 52284 effective January 1, 2024, we proposed some changes to the codes for CY 2024. Specifically, for CY 2024, as listed in the OPPS Addendum B that was released with the CY 2024 OPPS/ ASC proposed rule, we proposed to: Assign CPT code 0499T to status indicator ``D'' to indicate that the code would be deleted at the end of the year; and Crosswalk the replacement code, specifically, CPT 52284, to APC 5374 with a payment rate of $3,337.81 We note that at the August 21, 2023, HOP Panel Meeting, a presentation was made requesting the reassignment to APC 5375 for CPT code 52284 (placeholder code 5X000). Based on the information presented at the meeting, the Panel made no recommendation on the APC assignment for the code. Comment: Several commenters requested the reassignment for CPT code 52284 from APC 5374 to APC 5375 (Level 5 Urology and Related Services), with a payment rate of $4,959.89. They indicated that the procedure involves [[Page 81702]] the use of a single-use device whose cost is $2,395, and they believe that the payment amount of approximately $3,338 for APC 5374 is insufficient to cover the total cost of the procedure. These commenters suggested the reassignment of CPT code 52284 to APC 5375. One commenter clarified that the Optilume Urethral Stricture device was commercially available in January 2022, however, prior to this date, the device was provided free of charge for clinical trials. This same commenter noted that the claims data in the CY 2024 OPPS/ASC proposed rule shows an increase in claims volume for predecessor CPT code 0499T, as well as an increase in the geometric mean cost, that they believe warrants a change in the assignment from APC 5374 to APC 5375. Response: The CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We reviewed the claims data for this final rule, and based on our analysis, we found the geometric mean cost of approximately $4,489 for (predecessor code) CPT 0499T based on 77 single claims (out of 79 total claims), which is consistent with the geometric mean cost of about $5,067 for APC 5375, rather than the geometric mean cost of approximately $3,414 for APC 5374. Based on our evaluation, we believe that the resource costs of furnishing the service associated with CPT code 52284 are higher than the resource costs associated with APC 5374. Consequently, we believe that CPT code 52284 fits accurately in APC 5375 based on its clinical and resource homogeneity to the procedures in the APC. In summary, after consideration of the public comments, we are finalizing the APC assignment for CPT code 52284 with modification. Specifically, we are revising the APC assignment for CPT code 52284 to APC 5375 for CY 2024. The final CY 2024 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. Addendum D1 is available via the internet on the CMS website.

46. Payment for Procedures Using an Amniotic Membrane (APCs 5502 and

5503) CPT code 65426 (Excision or transposition of pterygium; with graft) describes a surgical ocular procedure that requires the use of graft tissue. This procedure can be performed either with the patient's own tissue (a graft from the patient's eye) or with an amniotic membrane tissue product that is purchased by the provider. CPT code 65778 (Placement of amniotic membrane on the ocular surface; without sutures) describes the placement of an amniotic membrane on the ocular surface. For the CY 2024 OPPS proposed rule, we proposed to assign CPT code 65426 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures) and we proposed to assign CPT code 65778 to APC 5502 (Level 2 Extraocular, Repair, and Plastic Eye Procedures). Comment: One commenter, a manufacturer of the amniotic membrane used in both CPT codes 65426 and 65778, requested that payment for CPT code 65426 be increased from APC 5503 with a payment rate of around $2,300 to APC 5504 (Level 4 Extraocular, Repair, and Plastic Eye Procedures) with a payment rate of around $3,800. Likewise, the commenter requested that the payment for CPT code 65778 be increased from APC 5502 with a payment rate of around $1,000 to APC 5503 with a payment rate of around $2,300. The commenter requested the payment increases because the offset amounts for the amniotic membrane devices used in these procedures was substantially lower than the expected cost of the device. The commenter believes the cause of the low device percentage for these services is that many hospitals are not reporting the cost of the amniotic device, and an increased payment would ensure that providers receive a payment that recognizes the cost of the amniotic device. Response: We disagree with the request of the commenter. Reporting service charges and appropriately coding expenditures on claims is the responsibility of the provider, and we do not adjust service payments to remedy potential coding errors. The commenter believes there is some type of systemic coding error that is leading to the low device offsets for CPT codes 65426 and 65778. We encourage the commenter to engage in provider education to encourage more thorough reporting of the device costs of these procedures. The commenter may also choose to work with the MACs to develop approaches to ensure the cost of the amniotic membrane device is included more regularly with these procedures. After consideration of the public comments we received, we are implementing our proposal without modification for CPT codes 65426 and 65778. Table 77 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.099 [[Page 81703]]

47. Peroral Endoscopic Myotomy (POEM) CPT Code 43497 (APC 5331)

According to interested parties, the POEM (Peroral Endoscopic Myotomy) procedure is a newer technique for the management of achalasia and is similar to laparoscopic Heller Myotomy performed by both advanced gastroenterologists and endoscopic surgeons. Achalasia is a disease that occurs due to the inability of the lower esophageal sphincter to relax and is also associated with loss of peristalsis in the esophagus. This procedure is described by CPT code 43497 (Lower esophageal myotomy, transoral (i.e., peroral endoscopic myotomy [poem])), which has a geometric mean cost for CY 2024 of around $6,736. For the CY 2024 OPPS proposed rule, we proposed to assign the procedure to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around $3,803. APC 5303 is the highest-paying APC in the Upper GI Procedures APC series. CPT code 43497 is a significant procedure that contributes to the establishment of the overall payment rate for APC 5303. Comment: Two commenters requested that we assign CPT code 43497 to APC 5331 (Complex GI Procedures) to resolve a 2 times rule violation with the procedure. The commenters noted that the geometric mean cost of CPT code 43497, which is around $6,736 is more than twice the cost of the lowest-cost significant procedure (CPT code 43260), which is around $6,454. Also, the geometric mean cost of CPT code 43497 is nearly $3,000 more than the payment rate for APC 5303. Response: We agree with the request of the commenters that CPT code 43497 should be reassigned from APC 5303 to APC 5331 not only because of the 2 times rule violation and the substantial difference between the cost of CPT code 43497 and the payment rate for APC 5303, but in addition, we determined that the procedure described by CPT code 43497 has clinical and resource similarities with the other procedures of similar cost that are assigned to APC 5313. After consideration of the public comments we received, we are implementing our proposal with modification for CPT code 43497 as we will update its APC assignment to APC 5331 (Complex GI Procedures). Table 78 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.100

48. Transluminal Mechanical Thrombectomy, Noncoronary, Non-

intracranial, Arterial or Arterial Bypass Graft, Including Fluoroscopic Guidance and Intraprocedural Pharmacological Thrombolytic Injection(s); Initial Vessel (APC 5194) For 2024, we proposed to move CPT code 37184 (Primary percutaneous transluminal mechanical thrombectomy, noncoronary, non-intracranial, arterial or arterial bypass graft, including fluoroscopic guidance and intraprocedural pharmacological thrombolytic injection(s); initial vessel) from APC 5193 (Level 3 Endovascular Procedures) with a proposed payment rate of $10,602.57 to APC 5194 (Level 4 Endovascular Procedures) with a proposed payment rate of $17,195.36. Comment: One commenter supported our proposal to move CPT code 37184 to APC 5194, stating that this APC assignment more accurately reflects the costs and resources associated with these procedures. Response: We thank the commenter for the support of the CMS' proposal. Based on our examination of the latest claims data for this final rule with comment period, we believe that the assignment of CPT code 37184 to APC 5194 is appropriate for CY 2024. In summary, after consideration of the public comment, we are finalizing our proposal without modification and assigning CPT code 37184 to APC 5194. The final CY 2024 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. Addenda B and D1 are available via the internet on the CMS website.

49. ProSense Cryoablation Procedure (APC 5091)

For CY 2023, we assigned CPT code 0581T (Ablation, malignant breast tumor(s), percutaneous, cryotherapy, including imaging guidance when performed, unilateral) to APC 5091 (Level 1 Breast/Lymphatic Surgery and Related Procedures) with a payment rate of $3,437.80. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ ASC proposed rule, we proposed to maintain the assignment to the same APC with a payment rate of $3,652.27. Comment: A commenter disagreed with the assignment to APC 5091 for CPT code 0581T and requested a revision to APC 5092 (Level 2 Breast/ Lymphatic Surgery and Related Procedures), with a payment rate $6,241.92. The commenter clarified that the procedure described by the code involves the use of a single-use device that cost $2,200. With the device cost, the commenter estimated the total procedure cost to be $7,019.79. This estimate was derived from the CY 2023 Medicare Physician Fee Schedule Final Rule CMS Public Use File, which include cost estimates for labor, equipment, time, and supply. The commenter indicated that the proposed payment rate of $3,652.27 for APC 5091 is insufficient to cover the total procedure cost, and believes the proposed payment of $6,241.92 for APC 5092 is more appropriate. This same commenter explained that in CY 2022, CPT code was assigned to ``E1,'' to indicate that the code was not [[Page 81704]] separately payable under the OPPS. To address the lack of claims data for CY 2022, the commenter performed their own data analysis that included claims for two procedures (0581T and 19105) as billed to Medicare and private payers. Based on the dataset, they found an average provider charge of $9,450 and with a maximum charge amount of $24,294 for CPT code 0581T (N=8 private payer, N=1 Medicare) based on fully paid claims for CY 2022 and the first half of 2023. The commenter further noted that CPT code 0581T violates the 2 times rule in APC 5091, and therefore, should be reassigned to APC 5092 to correct the violation. Response: First, APC 5091 does not violate the 2 times rule. As specified in section III.B (OPPS Changes--Variations Within APCs) of this final rule with comment period, we consider only those HCPCS codes that are significant based on the number of claims to determine the APCs with2 times rule violation. For APC 5091, the geometric mean cost for the significant procedures range between approximately $2,745 (for CPT code 19120) and $4,807 (for CPT code 19371). Based on this range, APC 5091 does not violate the 2 times rule. Secondly, although CPT code 0581T was not separately payable under the OPPS during CY 2022, some HOPDs submitted CPT code 0581T on Medicare claims. For this final rule we are using claims that were submitted for services between January 1, 2022, and December 31, 2022, processed through June 30, 2023. This includes claims that potentially had different policies and SI and APC assignments applied to them in the claims year. Our ratesetting process takes those claims and simulates the prospective OPPS payment, in which we observed a geometric mean cost of approximately $4,357 for CPT code 0581T based on 37 single claims (out of 37 total claims) for this code. Based on this information, we believe that we should maintain CPT code 0581T in APC 5091 since the observed geometric mean cost of $4,357 is consistent with the geometric mean cost of approximately $3,733 for APC 5091, rather than the geometric mean cost of about $6,386 for APC 5092. As we do every year, we will reevaluate the APC assignment for CPT code 0581T for the CY 2025 rulemaking cycle. We remind the commenter, that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 0581T to APC 5091 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

50. Radiofrequency Ablation Procedures--CPT Codes 32998, 47382, and

50592 (APC 5361) For CY 2023, we assigned certain radiofrequency ablation procedures, specifically, CPT codes 32998, 47382, and 50592 to APC 5361 (Level 1 Laparoscopy and Related Services), with a payment rate of $5,212.15. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to continue the assignment to APC 5361, with a payment rate of $5,544.60. Below are the long descriptors for CPT codes 32998, 47382, and 50592: 32998: Ablation therapy for reduction or eradication of 1 or more pulmonary tumor(s) including pleura or chest wall when involved by tumor extension, percutaneous, including imaging guidance when performed, unilateral; radiofrequency 47382: Ablation, 1 or more liver tumor(s), percutaneous, radiofrequency 50592: Ablation, 1 or more renal tumor(s), percutaneous, unilateral, radiofrequency Comment: A commenter disagreed with the proposed assignment to APC 5361 and requested a revision to APC 5362 (Level 2 Laparoscopy and Related Services), with a payment rate of $9,871.90, based on clinical and resource homogeneity to the codes in the APC. The commenter indicated that CPT codes 32998, 47382, and 50592 are very similar to certain procedures in APC 5362, specifically, the laparoscopic ablation procedures described by CPT codes 47370, 47371, and 50542, and the percutaneous cryoablation procedures described by CPT codes 47383, 50593, and 32994. Response: We note the CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We analyzed our data, and below in Table 79 are the claims data for this final rule with comment period for the codes mentioned by the commenter. [[Page 81705]] [GRAPHIC] [TIFF OMITTED] TR22NO23.101 As illustrated in Table 79, the resource costs associated with the laparoscopic ablation procedures and the percutaneous cryoablation procedures are higher than the resource costs associated with the radiofrequency ablation procedures. In particular, we found the geometric mean cost for CPT codes 32998, 47382, and 50592 ranged between approximately $6,538 and $7,141, which is consistent with the geometric mean cost of about $5,651 for APC 5361. We do not agree that the resource costs to perform these procedures are similar to those of the laparoscopic ablation procedures described by CPT codes 47370, 47371, and 50542, whose geometric mean cost range between $9,467 to $13,120, or the percutaneous cryoablation procedures described by CPT codes 47383, 50593, and 32994, whose geometric mean cost range between $8,189 and $9,269. We believe the resource costs related to the laparoscopic ablation procedures and percutaneous cryoablation procedures are appropriately reflected in APC 5362, whose geometric mean cost is approximately $10,081. Based on our analysis, we do not agree that the resource costs of the radiofrequency ablation procedures are similar to those of the laparoscopic ablation procedures or the percutaneous cryoablation procedures, which are in APC 5362. Therefore, we believe that CPT codes 32998, 47382, and 50592 should be maintained in APC 5361 based on clinical coherence and resource cost homogeneity. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT codes 32998, 47382, and 50592 to APC 5361 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

51. Radiofrequency Ablation, Posterior Nasal Nerve CPT Code 31242 (APC

5165) For the CY 2024 OPPS final rule, we proposed that CPT code 31242 (placeholder code 3X016) (Nasal/sinus endoscopy, surgical; with destruction by radiofrequency ablation, posterior nasal nerve) be assigned to APC 5165 (Level 5 ENT Procedures) with a payment rate of around $5,647. There are currently no claims data available for the procedure. Comment: Two commenters expressed their support of our assignment of CPT code 31242/3X016 to APC 5165. Response: We appreciate the support of the commenters for payment rate proposal. After consideration of the public comments we received, we are finalizing our proposal without modification for CPT code 31242 (listed as placeholder code 3X016 in the CY 2024 OPPS/ASC proposed rule with comment period) to continue to assign the procedure to APC 5165 (Level 5 ENT Procedures). Table 80 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 81706]] [GRAPHIC] [TIFF OMITTED] TR22NO23.102

52. Remote Physiological Monitoring Services

For CY 2024, we proposed to continue to assign CPT codes 99457 (Remote physiologic monitoring treatment management services, clinical staff/physician/other qualified health care professional time in a calendar month requiring interactive communication with the patient/ caregiver during the month; first 20 minutes) and 99458 (Remote physiologic monitoring treatment management services, clinical staff/ physician/other qualified health care professional time in a calendar month requiring interactive communication with the patient/caregiver during the month; each additional 20 minutes (list separately in addition to code for primary procedure) to status indicator ``B.'' At the August 21, 2023, HOP Panel Meeting, a presenter advised the Panel to request that CMS reassign CPT code 99457 to APC 5741 (Level 1 Electronic Data Analysis) with a proposed payment rate of $36.79 and CPT code 99458 is reassigned to status indicator ``N.'' Based on the information presented at the meeting, the Panel recommended that CMS considered changing the SI for CPT codes 99457 and 99458 to make them separately payable under the OPPS such that the services can be bundled with clinical visits in the month in which they occur and separately payable when no clinical visit with the appropriate supervising clinician occurs in the same month as the service. Comment: We received one public comment, and the commenter requested a separate payment under OPPS for RPM treatment management services CPT codes 99457 and 99458. The commenter stated that separate payment under the OPPS for 99457 and 99458 is appropriate because they closely mirror the time-based chronic care management (CCM), described by CPT code 99490 (Chronic care management services with the following required elements: multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions that place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, comprehensive care plan established, implemented, revised, or monitored; first 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month), which is assigned to status indicator ``S'' and APC 5822 (Level 2 Health and Behavior Services) with a proposed payment rate of $86.86. Response: We continue to believe that, since CPT code 99457 primarily describes the work associated with the billing of professional services, which would not be paid separately under the OPPS, and CPT code 99458 describes an add-on service to CPT code 99457, neither service is appropriate for separate payment under the OPPS. Therefore, we will continue to assign these codes to status indicator ``B'' for CY 2024. In summary, after consideration of the public comment, we are finalizing our proposal without modification. Specifically, we are continuing to assign HCPCS codes 99457 and 99458 to status indicator ``B'' for CY 2024. 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. Addendum D1 is available via the internet on the CMS website.

53. Remote Therapeutic Monitoring Treatment Management Services

For CY 2024, we proposed to change the status indicator for CPT codes 98980 (Remote therapeutic monitoring treatment management services, physician or other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient or caregiver during the calendar month; first 20 minutes) and 98981 (Remote therapeutic monitoring treatment management services, physician or other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient or caregiver during the calendar month; each additional 20 minutes (list separately in addition to code for primary procedure) from status indicator ``M'' to status indicator ``B'' since these services describe work associated with billing for professional services. At the August 21, 2023, HOP Panel Meeting, a presenter advised the Panel to request that CMS reassign CPT code 98980 to APC 5741 (Level 1 Electronic Data Analysis) with a proposed payment rate of $36.79 and CPT code 98981 is reassigned to status indicator ``N.'' Based on the information presented at the meeting, the Panel recommended that CMS considered changing the SI for CPT code 98980 to ``S'' and assign the code to APC 5741 (Level 1 Electronic Analysis of Devices) and changed the status indicator for CPT code 98981 to ``N'' per OPPS policy. Comment: We received one comment and the commenter requested assigning a relative value unit (RVU) value for CPT codes 98980 and 98981 and removing status indicator ``B.'' Response: We thank the commenter for the input but note that the comment related to an assignment of the RVU value is out of scope for the purposes of this OPPS/ASC final rule with comment period as RVUs are used to value services paid under the PFS. We continue to believe that, since CPT code 98980 primarily describes the work associated with the billing of professional services, which would not be paid separately under the OPPS, and CPT code 98981 describes an add-on service to CPT code 98980, neither service is appropriate for payment under the OPPS. Therefore, we will continue to assign these codes to status indicator ``B'' to indicate that the codes are not paid under OPPS and that alternate codes that are recognized by OPPS may be available. In summary, after consideration of the public comment, we are finalizing our proposal without modification. Specifically, we are continuing to assign HCPCS codes 98980 and 98981 to status indicator ``B'' for CY 2024. We will [[Page 81707]] review these codes again for future rulemaking. 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. Addendum D1 is available via the internet on the CMS website.

54. RNS Neurostimulator Surgical Service (APCs 5113 and 5464)

For CY 2024, the AMA CPT Editorial Board created three new CPT codes to describe the services associated with the RNS System, a skull- mounted cranial neurostimulator and treatment option for persons with medically intractable epilepsy. Specifically, effective January 1, 2024, the three new CPT codes are: 61889 (placeholder code 619X1)--Insertion of skull-mounted cranial neurostimulator pulse generator or receiver, including craniectomy or craniotomy, when performed, with direct or inductive coupling, with connection to depth and/or cortical strip electrode array(s). 61891 (placeholder code 619X2)--Revision or replacement of skull-mounted cranial neurostimulator pulse generator or receiver with connection to depth and/or cortical strip electrode array(s). 61892 (placeholder code 619X3)--Removal of skull-mounted cranial neurostimulator pulse generator or receiver with cranioplasty, when performed. Because 61889 is only performed in the inpatient setting, CMS proposed to assign the code to status indicator ``C'' for CY 2024 and, therefore, did not assign the code to an APC. For CY 2024, CMS proposed to assign 61891 to APC 5463 (Level 3 Neurostimulator and Related Procedures) with a proposed payment rate of $13,899.52 and 61892 to APC 5113 (Level 3 Musculoskeletal Procedures) with a proposed payment rate of $3111.88. We note that CPT codes 61889, 61891, and 61892 were listed as placeholder codes 619X1, 619X2, and 619X3, respectively, in OPPS Addendum B and Addendum O that were released with the CY 2024 OPPS/ASC proposed rule with comment period. Because we had not received the final CPT code numbers from AMA for the new codes that would be effective January 1, 2024, in time for the publication of the proposed rule, we listed the new CPT codes with their respective placeholder codes in OPPS Addendum B and Addendum O. Comment: We received several comments, including one from the manufacturer, requesting that we reassign CPT codes 61891 and 61892 to higher paying APCs based on cost concerns. The commenters requested that, for CY 2024, CMS assign CPT code 61891 to APC 5465 (Level 5 Neurostimulator and Related Procedures) with a proposed payment rate of $30,354.65 and CPT code 61892 to APC 5463 (Level 3 Neurostimulator and Related Procedures) with a proposed payment rate of $13,899.52. One commenter stated that the proposed APC assignments for CPT codes 61891 and 61892 would result in a 54 percent and a 78 percent reduction, respectively, in hospital outpatient payment, which they stated would impact Medicare beneficiary access. To support their requested APC changes, the commenter referred to two codes that are currently used to describe the services as predecessor codes for CPT codes 61891 and 61892. The commenter stated that for purposes of APC assignment, CMS should consider CPT code 61886 (Insertion or replacement of cranial neurostimulator pulse generator or receiver, direct or inductive coupling; with connection to 2 or more electrode arrays) as the predecessor code for 61891 and CPT code 61888 (Revision or removal of cranial neurostimulator pulse generator or receiver) as the predecessor code for 61892. The commenter noted the change in the code descriptions of the new CPT codes (61891, 61892) compared to the code descriptors of the existing codes (61886, 61888) as related to revision procedures. The commenter stated that it was unknown to them why the new CPT codes included revision and replacement in the same code (61891) compared to the existing CPT codes where replacement is a separate code (61886) and removal and revision procedures are included in the same code (61888). However, the commenter pointed out that revisions of the RNS neurostimulator are exceedingly rare and that they expect the vast majority, if not all, of the procedures reported with 61891 to be a replacement of the RNS neurostimulator, rather than a revision, where no neurostimulator device is implanted. Finally, the commenter provided their own analyses comparing epilepsy vs non-epilepsy-related claims for CPT codes 61886 and 61888 to demonstrate that epilepsy related claims for both codes, for which the RNS neurostimulator surgical service would be used, had higher geometric mean costs than non- epilepsy related claims. Response: We thank the commenters for their input on our proposal. First, we disagree with the commenter's assertion that we should use CPT code 61886 as the predecessor code for CPT code 61891 because the long descriptors for each code are substantially different. Specifically, while CPT code 61886 describes the insertion or replacement of a neurostimulator, where a neurostimulator device will be implanted each time the service is billed, CPT code 61891 describes the revision or replacement of the neurostimulator, where a neurostimulator device may or may not be implanted when the service is billed. While we appreciate the additional feedback from commenters explaining that revision procedures are extremely rare, we have an obligation to set APC assignments according to the long descriptor provided by the AMA. Because we believe the resource costs for a service where a high-cost neurostimulator device may or may not be implanted are lower than the resource costs for a service where a high- cost neurostimulator device is implanted each time, we disagree that CPT code 61891 should be assigned to the same APC as CPT code 61886. However, in light of the comments provided regarding the rarity of revision procedures and based on clinical similarities between CPT code 61891 and other cranial neurostimulator codes currently assigned to APC 5464 (Level 4 Neurostimulators), we believe that assigning CPT code 61891 to APC 5464 would be clinically and resource appropriate. Regarding the assignment for CPT code 61892, we also disagree with the comments recommending that we use CPT code 61888 as the predecessor code for CPT code 61892. While CPT code 61888 may describe a removal of the neurostimulator or a revision, CPT code 61892 only describes the removal procedure. Therefore, we do not believe that CPT code 61892 should be assigned to the same APC as CPT code 61888 because the codes are different in terms of resource and clinical considerations based on the disparity between the codes' long descriptors. After review of the comments provided and further analysis from our medical advisors, we believe that the removal procedure described by CPT code 61892 is similar to the service described by CPT 69727 (Removal, entire osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor, within the mastoid and/or involving a bony defect less than 100 sq mm surface area of bone deep to the outer cranial cortex), and should be assigned to the same clinical APC. Therefore, we continue to believe that an assignment to APC 5113 (Level 3 Musculoskeletal Procedures) is [[Page 81708]] clinically and resource appropriate for CPT code 61892. After consideration of the public comments, we are finalizing the assignment of CPT code 61891 to APC 5464. Additionally, we are finalizing the assignment of CPT code 61892 to APC 5113. The final CY 2024 payment rate for both codes can be found in Addendum B to this final rule with comment period. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

55. Scleral Reinforcement (APC 5492)

For CY 2023, we assigned CPT code 67255 (Scleral reinforcement (separate procedure); with graft) to APC 5491 (Level 1 Intraocular Procedures) with a payment rate of $2,159.44. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to maintain assignment to APC 5491 (Level 1 Intraocular Procedures) with a payment rate of $2,255.61. Comment: A commenter disagreed with the assignment to APC 5491 and suggested reassignment to APC 5492 (Level 2 Intraocular Procedures), with a payment rate of $3,970.62, based on the latest claims data. Response: We reviewed our claims data for this final rule with comment period. We note the CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Based on our examination of the claims data, we found the geometric mean cost of approximately $3,990 for CPT code 67255 based on 111 single claims (out of 111 total claims), which is consistent with the geometric mean cost of about $3,982 for APC 5492. We believe that the resource costs related to CPT code 67255 are higher compared to that of APC 5491, whose geometric mean cost is approximately $2,282, and more comparable to APC 5492. Therefore, we believe that we should reassign CPT code 67255 to APC 5492, since the procedure fits more appropriately in this APC based on clinical similarity and resource homogeneity. In summary, after consideration of the public comment, we are finalizing the APC assignment for CPT code 67255 with modification. Specifically, we are revising the APC assignment from APC 5491 to APC 5492 for CPT code 67255 for CY 2024. The final CY 2024 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. Addendum D1 is available via the internet on the CMS website.

56. SpaceOAR Hydrogel Procedure (APC 5375)

CPT code 55874 (Transperineal placement of biodegradable material, peri-prostatic, single or multiple injection(s), including image guidance, when performed) describes the procedure associated with the SpaceOAR Hydrogel, a perirectal spacer made of gel-like material that temporarily creates a space between the prostate and rectum in prostate patients undergoing radiation therapy. For CY 2023, we assigned the code to APC 5375 (Level 5 Urology and Related Services), with a payment rate of $4,702.18. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to continue the assignment to APC 5376 (Level 6 Urology and Related Services) with a payment rate of $4,959.89. Comment: Several commenters requested a reassignment to APC 5376 based on the claims data for the CY 2024 update. Response: The CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We reviewed the claims data for this final rule, and based on our analysis, we found the geometric mean cost of approximately $6,634 for CPT code 55874 based on 9,361 single claims (out of 9,470 total claims), is consistent with the geometric mean cost of about $5,067 for APC 5375, rather than the geometric mean cost of approximately $9,022 for APC 5376. Based on the resource costs, we believe that CPT code 55874 fits more appropriately in APC 5375 based on its clinical similarity and resource homogeneity to the procedures in the APC. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 55874 to APC 5375 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

57. Spinal Injection Service (APC 5115)

For CY 2024, we proposed to assign 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 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 (Level 5 Musculoskeletal Procedures) with a proposed payment rate of $13,269.40. Comment: We received a comment supporting our proposal to assign CPT codes 0627T and 0629T to APC 5115 (Level 5 Musculoskeletal Procedures). Response: We thank the commenter for support of our proposal to assign CPT codes to APC 5115. After consideration of the public comment received, we are finalizing our proposal without modification. The final CY 2024 payment rate 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. Addenda B and D1 are available via the internet on the CMS website.

58. Synchronized Diaphragmatic Stimulation (SDS) System for

Augmentation of Cardiac Function For the 2022 update, the CPT Editorial Panel established 12 new codes, specifically, CPT codes 0674T through 0685T, to describe the various services related to the synchronized diaphragmatic stimulation (SDS) system that is used to treat certain patients with chronic heart failure. The codes were effective January 1, 2022, and describe the implanting, revising, removing and replacing the implantable stimulator and leads, as well as interrogation and programming of the SDS system. The complete long descriptors for the 12 codes are listed in Table 81 below. For the 2022 and 2023 update, we assigned the codes to status indicator ``E1'' to indicate that they are not payable by Medicare when submitted on outpatient claims (any outpatient bill type) because the services associated with these codes are either not covered by any Medicare outpatient benefit category, statutorily excluded by Medicare, or not reasonable and necessary. For CY 2024, we proposed to continue to assign the codes to status indicator ``E1.'' Comment: A device manufacturer reported that the device associated with the codes received Breakthrough Device [[Page 81709]] Designation from the FDA and is scheduled to start a Category B Investigational Device Exemption (IDE) clinical trial in early 2024. In anticipation of the clinical trial and to ensure that hospitals receive Medicare reimbursement for the clinical trial, the manufacturer requested a reassignment in the status indicator, and suggested specific APCs and status indicator assignments for the 12 codes. In particular, the commenter suggested specific APC assignments for nine of the 12 codes, and recommended the assignment of status indicator ``N'' (packaged) for the three add-on codes. The manufacturer indicated that once they receive approval from the FDA for the IDE study, they intend to submit an application to CMS for Medicare coverage of their IDE clinical trial. Response: Because the IDE study protocol has not received FDA approval, and has not been approved for Medicare coverage, we believe that we should continue to assign CPT codes 0674T through 0685T to status indicator ``E1'' for CY 2024. If this technology later meets CMS' standards for coverage, we will reassess the status indicator and APC assignments in a future quarterly update and/or rulemaking cycle. In summary, after consideration of the public comment received, we are finalizing our proposal, without modification, to assign status indicator ``E1'' to CPT codes 0674T through 0685T. The final status indicator assignment for the codes is listed in Table 81. We refer readers to Addendum D1 of this final rule with comment period for the complete list of the OPPS payment status indicators and their definitions for CY 2024. Addendum D1 is available via the internet on the CMS website. BILLING CODE 4150-28-P [GRAPHIC] [TIFF OMITTED] TR22NO23.103 [[Page 81710]] [GRAPHIC] [TIFF OMITTED] TR22NO23.104 BILLING CODE 4150-28-C

59. Transcatheter Renal Sympathetic Denervation Procedure (APC 5192)

For CY 2023, we assigned CPT code 0338T and 0339T to APC 5192 (Level 2 Endovascular Procedures), with a payment rate of $5,215.40. For CY 2024, as listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, we proposed to continue the assignment to APC 5192 with a payment rate of $5,500.17. Below are the long descriptors for the codes: 0338T: Transcatheter renal sympathetic denervation, percutaneous approach including arterial puncture, selective catheter placement(s) renal artery(ies), fluoroscopy, contrast injection(s), intraprocedural roadmapping and radiological supervision and interpretation, including pressure gradient measurements, flush aortogram and [[Page 81711]] diagnostic renal angiography when performed; unilateral 0339T: Transcatheter renal sympathetic denervation, percutaneous approach including arterial puncture, selective catheter placement(s) renal artery(ies), fluoroscopy, contrast injection(s), intraprocedural roadmapping and radiological supervision and interpretation, including pressure gradient measurements, flush aortogram and diagnostic renal angiography when performed; bilateral Comment: A commenter requested a reassignment to APC 5193 (Level 3 Endovascular Procedures, with a payment rate of $10,602.57, based on clinical similarity to the procedures in the APC. Response: The CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. We evaluated the claims data for this final rule, and based on our review, we found no claims for CPT code 0338T. We also reviewed our historical claims data for the last 5 years, specifically, the cost statistics data that was released with the CY 2019 through CY 2023 OPPS/ASC final rules, and found that we have no claims data for CPT code 0338T. In contrast, we found some data for CPT code 0339T. For this final rule with comment period, our claims data show a geometric mean cost of about $16,423 for CPT code 0339T based on 1 single claim (out of 1 total claim). Similar to CPT code 0338T, we reviewed our historical claims data for the last 5 years and found inconsistent cost information. Specifically, our claims data show a geometric mean cost that has ranged between $651 and $1,081, based on 1 and 9 single claims. Based on the historical and current claims data for this final rule with comment period, we believe that both codes should be maintained in APC 5192. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 0338T and 0339T to APC 5192 for CY 2024. The final CY 2024 payment rate for the 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. Addenda B and D1 are available via the internet on the CMS website.

60. Transnasal EGD CPT Codes 0652T-0654T (APCs 5302 and 5303)

For the CY 2024 OPPS final rule, we proposed to assign CPT code 0652T (Esophagogastroduodenoscopy, flexible, transnasal; diagnostic, including collection of specimen(s) by brushing or washing, when performed (separate procedure)) with no claims data for CY 2024 and CPT code 0653T (Esophagogastroduodenoscopy, flexible, transnasal; with biopsy, single or multiple) with a geometric mean cost of around $3,987 to APC 5302 (Level 2 Upper GI Procedures) with a payment rate of around $1,854. In addition, we proposed to assign CPT code 0654T (Esophagogastroduodenoscopy, flexible, transnasal; with insertion of intraluminal tube or catheter) with a geometric mean cost of around $2,057 to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of $3,803. Comment: One commenter supported our decision to assign CPT codes 0652T and 0653T to APC 5302. The commenter also supported our decision to assign CPT code 0654T to APC 5303. Response: We appreciate the commenter's support for our proposals. After consideration of the public comments we received, we are finalizing our proposal without modification to continue to assign CPT codes 0652T and 0653T to APC 5302 (Level 2 Upper GI Procedures). We also are finalizing our proposal without modification to continue to assign CPT code 0654T to APC 5303 (Level 3 Upper GI Procedures). Table 82 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.105

61. Upper GI Tract Endoscopy Bile and Pancreatic Ducts (APC 5302)

CPT code 43275 (Endoscopic retrograde cholangiopancreatography (ERCP); with removal of foreign body(s) or stent(s) from biliary/ pancreatic duct(s)) describes an endoscopy procedure that is performed to treat medical issues with the bile and pancreatic ducts. CPT code 43275 has a geometric mean cost of around $2,725 for CY 2024. In the CY 2024 OPPS proposed rule, we assigned CPT code 43275 to APC 5302 (Level 2 Upper GI [[Page 81712]] Procedures) with a payment rate of around $1,854. Comment: One commenter requested that CPT code 43275 be reassigned to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around $3,803. The commenter states that performing endoscopic retrograde cholangiopancreatography (ERCP) requires more training and experience for gastrointestinal endoscopists as compared to other gastrointestinal endoscopic procedures leading to higher cost for the procedure described by CPT code 43275. The commenter also notes that CPT code was assigned to APC 5202 for CY 2023 where it is the lowest-cost significant procedure. Moving CPT code 43275 to APC 5302 would increase the 2 times rule threshold in APC 5303, which according to the commenter, may reduce the procedure code combinations that would be eligible for complexity adjustments. The commenter also notes that CPT code 43275 while in APC 5302 is less than $300 away from a 2 times rule violation in that APC. Finally, the commenter believes that there no significant financial impact whether CPT code 43275 is assigned to either APC 5302 or APC 5303. Response: We appreciate the request of the commenter. We note that while CPT code 43275 would be one of the higher-paid procedures in APC 5302, the procedure will be underpaid by less than $900 and there are several other procedures in APC 5302 with similar geometric costs as CPT code 43275. Assigning CPT code 43275 to APC 5303 would make the procedure the second lowest-paid procedure in APC 5303. In addition, the payment rate of APC 5303 would be around $1,000 more than the geometric mean cost of CPT code 43275. After consideration of the public comments we received, we are finalizing our proposal without modification for CPT code 43275 to continue to assign the procedure to APC 5302 (Level 2 Upper GI Procedures). Table 83 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR22NO23.106

62. Xen Glaucoma Treatment Procedure (APC 5493)

For 2017, the AMA's Editorial Panel established two new codes, specifically, CPT code 0449T and 0450T, effective January 1, 2017, to describe the surgical procedure associated with the Xen Glaucoma Treatment System. The complete long descriptors for the codes, are listed below: 0449T (Insertion of aqueous drainage device, without extraocular reservoir, internal approach, into the subconjunctival space; initial device) 0450T (Insertion of aqueous drainage device, without extraocular reservoir, internal approach, into the subconjunctival space; each additional device (list separately in addition to code for primary procedure)) For CY 2023, CPT code 0449T is assigned to APC 5492 (Level 2 Intraocular Procedures) with a payment of $3,995.58. In addition, we assigned CPT code 0450T to status indicator ``N'' to indicate that the code is packaged, and payment for the service is included in the primary code. For CY 2024, we proposed to continue the assignment to APC 5492 for CPT code 0449T. Similarly, we proposed to maintain the assignment of status indicator ``N'' (packaged) for CPT code 0450T. Comment: A commenter reported that the proposed reassignment for CPT 66991, which is one of the existing MIG codes, from APC 1563 (New Technology--Level 26 ($4001-$4500)) to APC 5493 (Level 3 Intraocular Procedures), seems appropriate. However, the commenter indicated that the geometric mean cost for CPT code 0449T is higher than the cost of CPT code 66991, yet CPT code 0449T has been proposed to continue to be assigned to APC 5492. In addition, the commenter suggested that the work associated with CPT code 0449T is significantly more complex than that of CPT code 66991. Based on the claims data and the clinical complexity of the work associated with the service described by CPT code 0449T, the commenter urged CMS to reassign CPT code 0449T to APC 5493, which is the same APC proposed for CPT code 66991. Response: We reviewed our claims data for this final rule with comment period. The CY 2024 OPPS payment rates are based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Based on our evaluation of the claims data for this final rule with comment period, we agree that the geometric mean cost for CPT code 0449T is higher compared to the geometric mean cost for CPT code 66991. Specifically, our claims data show a geometric mean cost of approximately $4,995 for CPT code 0449T based on 415 single claims (out of 421), which is higher than the geometric mean cost of about $4,943 for CPT code 66991 based on 6,011 single claims (out of 6,069) total claims. We agree that CPT code 0449T should be reassigned to APC 5493 based on clinical and resource homogeneity with the procedures assigned to APC 5493. We believe the resource costs associated with CPT code 0449T are similar to those procedures in APC 5493, rather than APC 5492. Therefore, we are revising the assignment for CPT code 0449T to APC 5493 for CY 2024. With regard to CPT code 66991 (MIG code) mentioned by the commenter, we refer readers to section III.C (New Technology APCs) of this final rule with comment period for the discussion [[Page 81713]] related to the CY 2024 payment for the code. In summary, after consideration of the public comments, we are finalizing the APC assignment for CPT code 0449T with modification. Specifically, we are revising the APC assignment from APC 5492 to APC 5493 for CPT code 0449T for CY 2024. We note we did not receive any comment for CPT code 0450T, therefore, we are finalizing the proposed status indicator. The final CY 2024 OPPS payment rate for all the codes payable under the OPPS 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. Addendum D1 is available via the internet on the CMS website.

63. XV Lung Ventilation Analysis Software (APC 5722)

Effective July 1, 2023, the CPT Editorial Panel created CPT codes 0807T (Pulmonary tissue ventilation analysis using software-based processing of data from separately captured cinefluorograph images; in combination with previously acquired computed tomography (CT) images, including data preparation and transmission, quantification of pulmonary tissue ventilation, data review, interpretation and report) and 0808T (Pulmonary tissue ventilation analysis using software-based processing of data from separately captured cinefluorograph images; in combination with computed tomography (CT) images taken for the purpose of pulmonary tissue ventilation analysis, including data preparation and transmission, quantification of pulmonary tissue ventilation, data review, interpretation and report). Both CPT codes 0807T and 0808T are used with the XV Lung Ventilation Analysis Software, which is a respiratory imaging platform to identify respiratory deficiencies. The difference between the two codes is that CPT code 0808T includes a CT scan during the service, and CPT code 0807T does not. For CY 2024, we proposed to assign CPT code 0807T to APC 5721 (Level 1 Diagnostic Tests and Related Services) with a proposed payment rate of $151 and CPT code 0808T to APC 5722 (Level 2 Diagnostic Tests and Related Services) with a proposed payment rate of $304. Comment: We received a comment from the manufacturer of the XV Lung Ventilation Analysis Software expressing support for the proposed APC assignment for 0808T. Response: We thank the commenter for their support for the APC assignment for CPT code 0808T and agree that the proposed APC assignment for CPT code 0808T accurately captures the costs associated with the service. Therefore, we are finalizing the APC assignment for CPT code 0808T as proposed. Comment: The manufacturer also commented on the proposed APC assignment for CPT code 0807T. The commenter stated that the proposed APC assignment for CPT code 0807T does not properly account for the costs associated with the required fluoroscopy imaging that is a part of the service. The commenter provided the CY 2024 proposed rule geometric mean costs for two fluoroscopy codes: CPT code 76000 (Fluoroscopy (separate procedure), up to 1 hour physician or other qualified health care professional time) with a proposed geometric mean cost of $262, and CPT code 76496 (Unlisted fluoroscopic procedure (eg, diagnostic, interventional) with a proposed geometric mean cost of $133, and explained that the proposed APC assignment for CPT code 0807T would not cover the costs of the fluoroscopy based on the proposed geometric mean costs of the two fluoroscopy codes. To account for the costs of the fluoroscopy that is performed as part of the service, the commenter requested that CMS assign CPT code 0807T to APC 5722 for CY 2024. Response: After further evaluation of CPT code 0807T, the resources required to perform the procedure, and input from our medical advisors, we believe it is appropriate to reassign CPT code 0807T to APC 5722. Based on our evaluation of the additional information provided to CMS as well as the claims data for existing fluoroscopy codes, we believe that the resource costs associated with CPT code 0807T are higher than those associated with the code's proposed APC assignment. Therefore, we are revising the APC assignment for CPT code 0807T for CY 2024. After consideration of the public comment, we are finalizing our proposal without modification to assign CPT code 0808T to APC 5722 for CY 2024. We are also finalizing the reassignment of CPT code 0807T to APC 5722 for CY 2024. The final CY 2024 payment rate for these codes can be found in Addendum B to this final rule with comment period. We also refer readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. In addition, we note that CMS recognizes that software-based technologies are rapidly evolving, like the product used for HCPCS code C9786. In line with our comment solicitation on payment policy for software as a service (SaaS) procedures in the CY 2023 OPPS final rule (87 FR 72035 and 72036), CMS is considering, for future rulemaking, whether or not specific adjustments to payment policies and rate calculations are necessary in order to more accurately and appropriately pay for these products and services across settings of care. CMS remains open to feedback on these issues and welcomes engagement from interested parties, including from manufacturers, providers, and beneficiaries.

64. New Technology Applications Submitted to CMS

Comment: We received comments regarding three pending New Technology APC applications, for the TriNavTM Infusion System, Trabeculocanalicular Outflow Restoration, and Optilume Benign Prostatic Hyperplasia (BPH) services. Response: We note that pending New Technology APC applications are reviewed via a sub-regulatory process, and therefore, application determinations are not made via rulemaking. As a result, we did not propose to create new codes for any of these services or assign them to New Technology APCs in the CY 2024 OPPS/ASC proposed rule. These New Technology APC applications are currently being reviewed and applicants will be notified of CMS's decision through our normal process.

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 Sec. 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 Sec. 419.66(g) provided that this pass-through payment eligibility period began on the date CMS established a [[Page 81714]] particular transitional pass-through category of devices, and we based the pass-through status expiration date for a device category on the date on which pass-through payment was effective for the category. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79654), in accordance with section 1833(t)(6)(B)(iii)(II) of the Act, we amended Sec. 419.66(g) to provide that the pass-through eligibility period for a device category begins on the first date on which pass-through payment is made under the OPPS for any medical device described by such category. In addition, prior to CY 2017, our policy was to propose and finalize the dates for expiration of pass-through status for device categories as part of the OPPS annual update. This means that device pass-through status would expire at the end of a calendar year when at least 2 years of pass-through payments 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.\14\ --------------------------------------------------------------------------- \14\ To apply for OPPS transitional device pass-through status, applicants complete an application that is subject to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This information collection (CMS-10052) is currently approved under OMB control number 0938-0857 and has an expiration date of November 30, 2025. --------------------------------------------------------------------------- In the CY 2023 OPPS/ASC final rule with comment period, we finalized our policy to publicly post online OPPS device pass-through applications received on or after March 1, 2023, beginning with the issuance of the CY 2025 proposed rule and for each OPPS rulemaking thereafter. We refer readers to the CY 2023 OPPS/ASC final rule with comment period (87 FR 71934 through 71938) for a full discussion of the policy to publicly post OPPS device pass-through applications. 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 15 device categories eligible for pass-through payment. These devices are listed in Table 84 of this final rule with comment where we detail the expiration dates of pass- through payment status for each of the 15 devices currently receiving device pass-through payment. In the CY 2022 OPPS/ASC final rule with comment period we used CY 2019 claims data, rather than CY 2020 claims data, to inform CY 2022 ratesetting (86 FR 63755). As a result, we utilized our equitable adjustment authority at section 1833(t)(2)(E) of the Act to provide up to four quarters of separate payment for 27 drugs and biologicals and one device category whose pass-through payment status expired between December 31, 2021 and September 30, 2022 to mimic continued pass- through payment, promote adequate access to innovative therapies for Medicare beneficiaries, and gather sufficient data for purposes of assigning these devices to clinical APCs (86 FR 63755). A full discussion of this final policy is included in section X.F of the CY 2022 OPPS/ASC final rule with comment (86 FR 63755). Section 4141(a)(2) of the Consolidated Appropriations Act, 2023 (CAA, 2023) (Pub. L. 117-328) amended section 1833(t)(6) by adding a new subparagraph (K), which extended the device pass-through status under paragraph (6) for a 1-year period beginning January 1, 2023, for device categories whose period of pass-through status would have ended on December 31, 2022. There are five device categories for which pass- through status would have ended on December 31, 2022, but which will now end on December 31, 2023. Pass-through status began for these device categories on January 1, 2020. BILLING CODE 4150-28-P [[Page 81715]] [GRAPHIC] [TIFF OMITTED] TR22NO23.107 [[Page 81716]] BILLING CODE 4150-28-C

2. New Device Pass-Through Applications for CY 2024

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). As specified in regulations at Sec. 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 approval or clearance and 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 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; The device is determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part, as required by section 1862(a)(1)(A) of the Act; and The device is an integral part of the service furnished, is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted (either permanently or temporarily), or applied in or on a wound or other skin lesion. In addition, according to Sec. 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). Separately, we use the following criteria, as set forth under Sec. 419.66(c), to determine whether a new category of pass-through payment devices should be established. The device to be included in the new category must-- Not be appropriately described by an existing category or by any category previously in effect established for transitional pass- through payments, and was not being paid for as an outpatient service as of December 31, 1996; Have an average cost that is not ``insignificant'' relative to the payment amount for the procedure or service with which the device is associated as determined under Sec. 419.66(d) by demonstrating: (1) the estimated average reasonable 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 Sec. 419.66(c)(3) and (e)); and Demonstrate a substantial clinical improvement, that is, substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment, or, for devices for which pass- through payment status will begin on or after January 1, 2020, as an alternative pathway to demonstrating substantial clinical improvement, a device is part of the FDA's Breakthrough Devices Program and has received marketing authorization for the indication covered by the Breakthrough Device designation. 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 sub-regulatory process, but the applications are 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 and 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 for the indication covered by the Breakthrough Device designation. 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 Sec. 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 Sec. 419.66. Devices that are part of the Breakthrough Devices Program, have received FDA marketing authorization for the indication covered by the Breakthrough Devices designation, 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 [[Page 81717]] 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: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the ``Downloads'' section. In addition, CMS is amenable to meeting with applicants or potential applicants to facilitate information sharing to support the evaluation of an OPPS device pass-through payment application or discuss general application criteria, including the substantial clinical improvement criterion. b. Applications Received for Device Pass-Through Status for CY 2024 We received six complete applications by the March 1, 2023, quarterly deadline, which was the last quarterly deadline for applications to be received in time to be included in this rule. We received three of the applications in the second quarter of 2022, one of the applications in the third quarter of 2022, no applications in the fourth quarter of 2022, and two of the applications in the first quarter of 2023. One of the applications was approved for device pass- through status during the quarterly review process: MY01 Continuous Compartmental Pressure Monitor, which was submitted on May 31, 2022, and conditionally approved as HCPCS code C1834 on October 1, 2022. However, after further review, we determined that the conditional approval was in error, and consequently, we deleted code C1834 on March 31, 2023. Applications received for the later deadlines for the remaining 2023 quarters (the quarters beginning June 1, September 1, and December 1 of 2023), if any, will be discussed in the CY 2025 OPPS/ASC proposed rule. We note that the quarterly application process and requirements have not changed because 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, 2023, deadline are included below. (1) Alternative Pathway Device Pass-Through Applications We received two device pass-through applications by the March 2023 quarterly application deadline for devices that have received Breakthrough Device designation from FDA and FDA marketing authorization for the indication for which they have a Breakthrough Device designation, and therefore are eligible to apply under the alternative pathway. (a) CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath Phillips North America, LLC submitted an application for a new device category for transitional pass-through payment status for CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath (CavaClear) for CY 2024. Per the applicant, CavaClear is a breakthrough device intended for tissue ablation in the removal of embedded IVC filters that have failed a previous retrieval method. IVC filters are used to capture blood clots and prevent them from moving to the lungs in patients with venous thromboembolism. Per the applicant, research has shown that IVC filters may have long-term complications, including device migration, filter fracture, and IVC occlusion; as a result, FDA issued a safety notice that recommends that physicians remove retrievable IVC filters as soon as they are no longer needed. The applicant stated that CavaClear facilitates the detachment of firmly adherent IVC filters using ultraviolet laser energy. The applicant explained that CavaClear uses circumferential tissue ablation that can aid in capturing the filter within seconds of laser activation, which can help increase physician efficiency, and may help lower costs by reducing the number of retrieval attempts to remove an embedded IVC filter. According to the applicant, CavaClear is a 14F or 16F laser catheter used for the intra-operative removal of IVC filters. The applicant further explained that CavaClear consists of optical fibers arranged in a circle, sandwiched between inner and outer polymer tubing. The fibers terminate at the distal end within a polished tip and at the proximal end within a coupler that mates with the excimer laser. According to the applicant, inner and outer stainless-steel bands, which form a radiopaque marker, protect the optical fibers at the distal tip. The applicant also stated that CavaClear was designed to slide through an introducer sheath with an inner lumen to allow an appropriate traction platform to pass through it. Per the applicant, the device facilitates detachment of IVC filters from the IVC wall using ultraviolet laser energy and subsequent collapse of the filter, partially within the laser sheath and entirely within the introducer sheath. The laser sheath was designed for use with the CVX-300[supreg] Excimer Laser or Philips Laser System (PLS), which allows the multifiber laser sheaths to transmit ultraviolet energy to the tissue at the distal tip of the device. The applicant further explained that, when activated, the laser ablates the tissue and frees the IVC filter from overgrowth in a controllable fashion. The applicant stated that by using cool ultraviolet laser energy around the embedded IVC filter, CavaClear can assist in fast filter capture with low force. As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at Sec. 419.66(b)(1) through (4). With respect to the newness criterion at Sec. 419.66(b)(1), CavaClear received FDA Breakthrough Device designation effective April 23, 2021, for the ablation of tissue in the removal of IVC filters that have failed a previous retrieval method. FDA granted the applicant De Novo classification for CavaClear (laser- powered IVC filter retrieval catheter) on December 21, 2021, for the same indication as the one covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for CavaClear on May 30, 2022, which is within 3 years of the date of the initial FDA marketing authorization. We solicited public comment on whether CavaClear meets the newness criterion at Sec. 419.66(b)(1). Comment: The applicant submitted a comment reiterating that CavaClear meets the newness criterion at 42 CFR 419.66(b)(1), stating that CMS received the application for a new device category for transitional pass-through payment status for CavaClear on May 30, 2022, which is within 3 years of the date of the initial FDA marketing authorization. Response: We appreciate the commenter's input and agree that because we received the application for CavaClear on May 30, 2022, which is within 3 years of FDA approval on April 23, 2021, that CavaClear meets the newness criterion. With respect to the eligibility criterion at Sec. 419.66(b)(3), according to the applicant, CavaClear is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically implanted or [[Page 81718]] inserted into the patient through the insertion of a laser catheter temporarily for the interoperative removal of IVC filters as required at Sec. 419.66(b)(3). We invited public comment on whether CavaClear meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment reiterating that CavaClear satisfies the eligibility criterion at 42 CFR 419.66(b)(3) because the device is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted into the patient through the insertion of a laser catheter temporarily for the interoperative removal of IVC filters. Response: We appreciate the commenter's input. Based on the information we have received and our review of the application, we agree with the applicant that CavaClear is integral to the service provided, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted. Therefore, we have determined that CavaClear meets the eligibility criteria at Sec. 419.66(b)(3). With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant also claimed that CavaClear meets the criterion because it is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. We invited public comment on whether CavaClear meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment reiterating that CavaClear satisfies the exclusion criterion at 42 CFR 419.66(b)(4) because it is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. Response: We appreciate the commenter's input. Based on the information we have received and our review of the application, we agree with the applicant that CavaClear meets the device eligibility requirements of Sec. 419.66(b)(4) because it is not a piece of equipment, 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 have therefore determined that CavaClear meets the device eligibility requirements of Sec. 419.66(b)(4). In addition to the criteria at Sec. 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described CavaClear as an IVC filter removal device that uses a laser to ablate tissue and is intended to facilitate detaching and removing indwelling IVC filters. Per the applicant, CavaClear is the first and only FDA- cleared solution for advanced IVC filter removal, and the applicant claimed that no previous device categories for pass-through payment appropriately describe CavaClear. Per the applicant, the possible existing pass-through code, HCPCS code C2629 (Introducer/sheath, other than guiding, other than intracardiac electrophysiological, laser), does not appropriately describe CavaClear because CavaClear uses a unique laser mechanism of action, unlike the snag, snare, and forceps method to remove IVC filters. Per the applicant, CavaClear is not intended to remove pacemaker and defibrillator leads like the products described by C2629, and CavaClear impacts different anatomy than the products described by C2629. Specifically, the applicant asserted that C2629 includes devices that are indicated to remove implanted pacemaker and defibrillator leads and devices via a catheter inserted into the vascular system. In addition, the applicant noted that FDA granted CavaClear De Novo classification, reflecting that there is no legally marketed predicate device for CavaClear. In the proposed rule, we noted, based on the description the applicant provided, that CavaClear is a laser sheath intended for use in the IVC, which is not intracardiac, and thus could be encompassed by the descriptor of C2629. We also noted that another existing pass- through payment category may appropriately describe CavaClear. Specifically, we stated that we believed that C1773 (Retrieval device, insertable (used to retrieve fractured medical devices)) may appropriately describe CavaClear. Pass-through payment category C1773 is a broad category descriptor for a device that retrieves another device within a patient's vascular system. Based on the description the applicant provided, CavaClear is a device (a laser-powered sheath that uses a laser to ablate tissue in the IVC) used to retrieve another medical device (an IVC filter device), which is consistent with the descriptor for C1773. In this context, we believe CavaClear may be similar to the devices currently described by C2629 and C1773, and therefore, CavaClear may also be appropriately described by C2629 and C1773. We invited public comment on whether CavaClear meets the device category criterion at Sec. 419.66(c)(1). Comment: In response to our concerns that CavaClear may be appropriately described by C2629 or C1773, the applicant and several commenters commented that CavaClear meets eligibility requirements of Sec. 419.66(c)(1), stating that CavaClear can be distinguished from the devices currently described by HCPCS codes C2629 and C1773 and, as such, meets the device category criterion. Specifically, the commenters asserted that CavaClear differs from devices described in C2629 and C1773 by mechanism of action, clinical use, impacted anatomy, and FDA clearance pathway. All commenters addressing the device category criterion offered support for approval of the application. Commenters stated that CavaClear's mechanism of action is unique because it uses laser energy to ablate scar tissue to facilitate the safe detachment and removal of indwelling IVC filters. Commenters also noted that CavaClear's photothermal laser tissue ablation is administered with individualized tools and a unique traction platform different from other devices. One commenter stated that there is no other device that uses excimer laser technology to ablate the scar tissue that embeds IVC filter struts. Finally, the applicant and multiple commenters provided that CavaClear is also the only device to address the unmet medical need identified by FDA safety communications on IVC retrievals. Multiple commenters also noted that CavaClear was granted De Novo classification by FDA, reflecting FDA's determination that there is no legally marketed predicate device for CavaClear. In addition, the applicant stated that CavaClear received Breakthrough Device designation from FDA, which they believe implies that CavaClear is the first device of its kind to address the condition for which it is designed and is the only FDA-cleared treatment option for advanced IVC filter removal. With respect to our concern that CavaClear may be appropriately described by C2629, the applicant stated that CavaClear differs significantly from devices described in the C2629 category (Introducer/ sheath, other than guiding, other than intracardiac [[Page 81719]] electrophysiological, laser). First, the applicant asserted, and multiple commenters agreed, that the devices described by C2629 are used to remove pacemaker and defibrillator leads from the superior vena cava (SVC) while CavaClear removes IVC filters from the inferior vena cava. Specifically, the applicant stated that CavaClear removes a different implant (IVC filter), as compared to other devices in need of removal (pacemaker and defibrillator leads). In addition, the impacted anatomy is different than that of the other products. The applicant explained that the IVC filter is placed in the IVC and the cardiac leads are placed via the SVC. The applicant also sought to clarify how, in comparison to the devices described in the C2629 category, CavaClear's mechanism of action is unique. The applicant asserted that CavaClear's mechanism of action is different and is based on four components: vessel access, traction platform, tissue separation, and physical removal of the implanted device. The applicant stated that the vessel access site for CavaClear is via internal jugular or femoral vein, as opposed to the subclavian vein for the other laser sheath devices. The applicant also asserted that CavaClear's traction platform is different than the other laser sheath products, with no additional rail required for traction other than a snare, and the tools used to perform extraction are specific to the CavaClear device. Further, the applicant and a few commenters provided that the photothermal cool tissue ablation cannot be administered without the individualized tools and traction platform. Finally, the applicant provided clarification regarding the physical removal of the implanted device using CavaClear. The applicant stated that to remove the IVC filter the CavaClear device interacts to collapse the filter in combination with the application of energy. By contrast, for other devices, there is no such interaction to physically alter the explanted device. With respect to our concern that CavaClear may be appropriately described by C1773, the applicant asserted that CavaClear differs significantly from devices described in C1773 (Retrieval device, insertable (used to retrieve fractured medical devices)). As with devices in the C2629 category, the applicant sought to clarify how, in comparison to the devices described in the C1773 category, CavaClear's mechanism of action is unique. The applicant reiterated that CavaClear's mechanism of action is different and is based on four components: vessel access, traction platform, tissue separation, and physical removal of the implanted device through photothermal cool tissue laser ablation. Commenters asserted that CavaClear can be distinguished from the devices broadly described in C1773 because those described devices represent mechanical (non[hyphen]laser) or more rudimentary approaches to retrieval as compared to CavaClear. Specifically, the applicant provided that for the devices described in C1773 that retrieve IVC filters (for example, endovascular snares, goose neck snares), the mechanism of action relies on the device to capture the apical hook of the filter (often embedded in the wall of the IVC or encapsulated). If accessible, the snare requires straight pulling, sometimes substantially, of the filter into a sheath with equal and opposite traction/countertraction applied to the snare and sheath to disengage the filter from the IVC wall. The applicant asserted that excessive pull forces have a higher risk of vasculature injury, filter breakage and fragmentation, and a potential for fragment embolization to the heart and/or lungs. The applicant also clarified that devices in C1773 that do not retrieve IVC filters but are used for lead extraction (for example, Tightrail), generally feature a stainless steel cutting tool to mechanically dilate tissue surrounding a pacemaker or defibrillator lead. The device's stainless steel cutting tool features a handle, trigger, and drive mechanism that allows trigger pulls of the device to be converted into torque for mechanical dilation of tissue on the distal end. By contrast, CavaClear features fiberoptics for transmission of ultraviolet light to ablate tissue surrounding an IVC filter. Finally, the applicant noted that retrieval devices included in C1773 that are used to remove pacemaker and/or defibrillator cardiac implantable electronic devices are not indicated for and should not be used for retrieving IVC filters; the physician specialty performing lead extractions are electrophysiologists and cardiac surgeons, as compared to interventional radiologists and vascular surgeons who perform IVC filter removals; and the access site for these devices is different from CavaClear as the device is typically inserted into the subclavian vein as opposed to the jugular or femoral vein for CavaClear. Response: We appreciate the input provided by these commenters. We have taken this information into consideration in making our final determination of the device category criterion, discussed below. Comment: Along with the applicant, commenters urged CMS to establish a new pass-through payment category that describes CavaClear. The applicant asserted that CMS has set past precedent that would allow establishment of a narrower device category to account for new innovative technologies that were not contemplated when categories were first established. For example, CMS has established narrower device pass-through categories describing neurostimulators and transluminal angioplasty catheters to facilitate pass-through status for new technologies. Commenters asserted that these examples illustrate that CMS has, in the past, exercised flexibility in establishing new device categories that involve new technologies that appear to be described by existing broad categories. In doing so, the applicant asserted, CMS recognized that historical overly broad device categories may not necessarily be appropriate for new technologies that were not contemplated when the categories were established. The applicant urged CMS to exercise similar flexibility in evaluating CavaClear and creating a narrower device category to accurately describe the new technology. Several other commenters agreed with the applicant's assertion that CMS has the flexibility to create new device categories from existing broad categories to recognize technological advances within a device class. Response: We appreciate the commenters' input. We agree with the applicant and commenters that CMS has the flexibility to create new device categories when we recognize that the existing device categories do not accurately describe the new proposed technology. However, we note that we must clearly establish that a proposed device is not described by existing device categories prior to exercising that flexibility. After consideration of the public comments we received, we agree there is no existing pass-through payment category that appropriately describes CavaClear because no current category appropriately describes an insertable introducer/sheath retrieval device that utilizes a photothermal cool laser to ablate caval tissue and retrieve intact IVC filters that are no longer clinically indicated. Neither pass-through category C2629 nor C1773 fully describes CavaClear and its complex mechanism of action. Based on this information, we have determined that CavaClear meets the first eligibility criterion at Sec. 419.66(c)(1). We received additional public comments regarding Sec. 419.66(c)(1) that [[Page 81720]] did not impact our decision on whether or not CavaClear meets the Sec. 419.66(c)(1) criterion, however we address these comments below. Comment: The applicant stated that they believe CMS is adopting an overly restrictive interpretation of the device category requirements, particularly as they relate to devices with FDA Breakthrough Device designation. The applicant asserted that CMS' interpretation of the criteria for a new device category for CavaClear suggests that any new technology that could be aligned to an existing category that was created more than 20 years ago, despite unique characteristics that differentiate it from other devices in the category, would automatically fail to meet the threshold for a new device category. The applicant further stated that both categories CMS identifies as potentially describing CavaClear (C2629 and C1773) were established over two decades ago and use very broad language to describe existing technologies and technology development at the time; however, technologies have advanced significantly since then, and thus, these broad categories may be unnecessarily restricting pass-through status for technologies that are indeed novel. Response: We appreciate the commenter's feedback; however, we disagree that our current interpretation of the device category requirements suggests that any new technology that could be aligned to a previous or existing device category would automatically fail to meet the threshold for a new device category. To the contrary, as the commenters noted, CMS has historically established device codes for new and innovative technologies when it has been determined that the proposed category is not appropriately described by any of the existing categories or by any category previously in effect. Device pass-through applications in no way automatically fail to meet the threshold for a new device category, rather, CMS' goal is to evaluate each application to clearly ascertain whether the proposed device is described by any of the existing categories or by any category previously in effect in order to determine if a new device category should be established. Comment: The applicant expressed concern that CMS' interpretation of the device category requirement will result in inappropriate limits upon the use of the Alternative Pathway for device pass-through and encouraged CMS to consider the totality of evidence when assessing whether a device falls into an existing device category. Specifically, the applicant encouraged CMS to consider factors such as different mechanisms of action, unmet medical need, and differentiated clinical use when evaluating a new category. Response: We appreciate the commenters' feedback. We disagree that our current interpretation of the device category requirement will result in inappropriate limits upon the use of the Alternative Pathway for device pass-through. CMS has established an evaluation process that ensures that we have the information we need to evaluate applications and make determinations based on the totality of the evidence; part of that evaluation is determining if a previous or existing device code appropriately describes the proposed device. We appreciate the suggestions made by the commenters regarding the factors CMS should use to evaluate the device category requirement and appreciate their support to our current process. Comment: The applicant requested that CMS modify the device pass- through criteria to automatically consider devices with FDA Breakthrough Device designation to not be appropriately described by any of the existing or previous device categories, and therefore, meet the Sec. 419.66(c)(1) criterion. The applicant noted that when CMS established an alternative pathway for Breakthrough Devices seeking new technology add-on payment in the inpatient hospital setting, CMS stated, ``if a medical device is part of FDA's Breakthrough Devices Program and received FDA marketing authorization, it would be considered new and not substantially similar to an existing technology for purposes of the new technology add-on payment.'' The applicant argued that to ensure consistency in policy across payment systems, CMS should deem CavaClear new for the purpose of device pass-through, and not described by an existing or past category. Response: We appreciate the commenters' feedback. Under the IPPS, beginning with applications for FY 2021, a medical device designated under FDA's Breakthrough Devices Program that has received marketing authorization as a Breakthrough Device, for the indication covered by the Breakthrough Device designation, may qualify for the new technology add-on payment under an alternative pathway. Under an alternative pathway, a technology will be considered not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS and will not need to meet the requirement that it represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. These technologies must still be within the 2- to 3-year newness period to be considered ``new'' and must also still meet the cost criterion (88 FR 58919). When we adopted the alternative pathway for device pass-through payments under the OPPS, we stated that applications for devices that have received FDA marketing authorization and are part of the FDA Breakthrough Devices Program would not be evaluated in terms of the current substantial clinical improvement criterion at Sec. 419.66(c)(2) for purposes of determining device pass-through payment status, but would continue to need to meet the other requirements for pass-through payment status in our regulations at Sec. 419.66(c)(1) (84 FR 61295). The commenter is correct that under the alternative pathway for device pass-through status under the OPPS, a device must still meet the device category criterion at Sec. 419.66(c)(1), consistent with the policy we adopted beginning in CY 2020. We recognize that this feature of the OPPS alternative pathway for Breakthrough Devices differs from the IPPS alternative pathway because Breakthrough Devices do not need to meet the substantial similarity requirement. Nonetheless, we do not believe that the current policy creates a barrier to devices with Breakthrough Device designation and note that we have previously granted OPPS device pass-through status for Breakthrough Devices that have applied for the alternative pathway, including the devices discussed in this final rule with comment period, because these devices have not been described by existing device categories or those previously in effect. The second criterion for establishing a device category, at Sec. 419.66(c)(2), provides that CMS determines either of the following: (i) that a device is included in the category that has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body party 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 for the indication covered by the Breakthrough Device designation. We explained in the proposed rule that CavaClear has a Breakthrough Device designation and [[Page 81721]] marketing authorization from FDA for the indication covered by the Breakthrough Device designation, and therefore, appears to meet the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement. The third criterion for establishing a device category, at Sec. 419.66(c)(3), requires us to determine if the cost of the device is not insignificant, as described in Sec. 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of cost significance requirements. The applicant stated that CavaClear would be reported with HCPCS code listed in Table 85. [GRAPHIC] [TIFF OMITTED] TR22NO23.108 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. As we explained in the CY 2005 OPPS final rule with comment period (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. For our calculations, we used APC 5183, which had a CY 2022 payment rate of $2,923.63 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 37193 had a device offset amount of $762.48 at the time the application was received.\15\ According to the applicant, the cost of CavaClear is $3,165.00. --------------------------------------------------------------------------- \15\ We noted that the applicant selected a value of $537.36 for the device offset amount. However, the value selected is inconsistent with the device offset amount related to HCPCS 37193 in APC 5183 found in Addendum P to the CY 2022 OPPS/ASC final rule with comment period, as corrected in the 2022 Correction Notification OPPS Addendum (87 FR 2060). We selected the value of $762.48, which we believe is the accurate value. Based on our initial assessment for the proposed rule, using the device offset amount of $762.48 would result in CavaClear meeting the cost significance requirement. --------------------------------------------------------------------------- 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 $3,165.00 for CavaClear is 108.26 percent of the applicable APC payment amount for the service related to the category of devices of $2,923.63 (($3,165.00/$2,923.63) x 100 = 108.26 percent). Therefore, we stated that we believed CavaClear meets the first cost significance requirement. The second cost significance requirement, at Sec. 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $3,165 for CavaClear is 415.09 percent of the cost of the device-related portion of the APC payment amount for the related service of $762.48 (($3,165.00/$762.48) x 100 = 415.09 percent). Therefore, we stated that we believed CavaClear meets the second cost significance requirement. The third cost significance requirement, at Sec. 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 $3,165.00 for CavaClear and the portion of the APC payment amount for the device of $762.48 is 82.18 percent of the APC payment amount for the related service of $2,923.63 ((($3,165.00 - 762.48)/$2,923.63) x 100 = 82.18 percent). Therefore, we stated that we believed that CavaClear meets the third cost significance requirement. We invited public comment on whether CavaClear meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. Comment: The applicant reiterated that it believes it satisfies the criterion at 42 CFR 419.66(c)(3) and that the cost of the device is not insignificant as determined by CMS' analysis of the three cost significance criteria for CavaClear. Response: We appreciate the commenter's input. Based on our findings from the first, second, and third cost significant tests, we believe that CavaClear meets the cost significance criteria specified at Sec. 419.66(d). We invited public comment on whether CavaClear meets the device pass-through payment criteria discussed in this section. Comment: Several commenters, including the applicant, submitted comments in support of pass-through payment approval for CavaClear. A few commenters underlined that pass-through payment approval for CavaClear will help increase Medicare beneficiary access to technological advancements in treatment. Several commenters also stated that CavaClear addresses an unmet medical need and provides the ability to remove IVC filters that otherwise would remain in place, leaving patients with significant symptoms. They further asserted that CavaClear will have an impact on reducing complications from IVC filter removals, time spent on IVC filter removals, and associated healthcare costs. Response: We appreciate the commenters' input on the potential impact on Medicare beneficiary access, safety, and associated healthcare costs. After our review of the device pass-through application and consideration of the public comments we received, we have determined that CavaClear meets [[Page 81722]] the requirements for device pass-through status described at Sec. 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 Sec. 419.66(c)(2)(i) for the purposes of determining device pass-through payment status but must meet the other criteria for device pass-through status. We believe CavaClear meets those other criteria, and therefore, effective beginning January 1, 2024, we are finalizing approval for device pass-through payment status for CavaClear under the alternative pathway for devices that have an FDA Breakthrough Device designation and have received FDA marketing authorization for the indication covered by the Breakthrough Device designation. (b) CERAMENT[supreg] G BONESUPPORT AB submitted an application for a new device category for transitional pass-through payment status for CERAMENT[supreg] G for CY 2024. Per the applicant, CERAMENT[supreg] G is a single-use implantable bone void filler combination device/drug that remodels into bone and elutes gentamicin. The applicant further explained that CERAMENT[supreg] G is an adjunct to systematic antibiotic therapy as part of the surgical treatment of osteomyelitis (that is, bone infection) in the extremities and is used where there is a need for supplemental bone void filler material. The applicant asserted that CERAMENT[supreg] G can reduce the recurrence of chronic osteomyelitis from gentamicin-sensitive microorganisms to protect bone healing and augment provisional hardware to help support bone fragments during the surgical procedure. The applicant stated that CERAMENT[supreg] G is the first on-label solution for a one-stage surgical approach to treating bone infections with its unique dual mode of action: (1) promote bone healing (bone remodeling), and (2) protect bone healing (elution of a local broad-spectrum antibiotic). According to the applicant, once implanted, CERAMENT[supreg] G resorbs overtime and remodels into bone in 6 to 12 months. Per the applicant, CERAMENT[supreg] G is comprised of three key compounds: (1) hydroxyapatite (HA), (2) calcium sulfate (CaS), and (3) gentamicin sulfate. According to the applicant, by combining calcium sulfate and hydroxyapatite, a balance is achieved between implant resorption rate and bone remodeling rate. The applicant further explained that the CaS acts as a resorbable carrier for HA. The applicant described that HA has a slow resorption rate and high osteoconductivity promoting bone remodeling and thus gives long-term structural support to the newly-formed bone. The gentamicin sulfate is a broad-spectrum aminoglycoside antibiotic that is sensitive to a spectrum of aerobic bacteria, particularly gram-negative bacilli, as well as aerobic gram-positive cocci, in particular Staphylococcus aureus, some coagulase negative staphylococci (CoNS) (for example, Staphylococcus epidermidis), and some strains of streptococci. According to the applicant, the gentamicin sulfate is present in the bone void filler to prevent colonization from gentamicin-sensitive microorganisms to protect bone healing. Per the applicant, CERAMENT[supreg] G is comprised of eight components (these components contain the three key compounds as well as other parts for the successful application of CERAMENT[supreg] G): (1) CERAMENT[supreg] CMI, a closed mixing injection system pre-packed with ceramic bone substitute (CBS), is a mixture of the CaS (60 wt percent) and HA (40 wt percent). The applicant further explained that the mixing device is comprised of a 60 mL syringe, which in its proximal part is equipped with a movable combined plunger and mixing paddle, and in its distal part with a luer-lock connection. The movable mixing paddle allows effective mixing of the material inside the syringe. Calcium Sulfate and Hydroxyapatite (CSH) are the setting component of the bone void filler, and per the applicant, this component will react to calcium sulfate dihydrate (CSD) and will be resorbed over time, giving place for natural bone to grow into the bone graft. The applicant described that CSD is added as a seeding agent to accelerate the setting reaction of CSH to CSD, and that HA is an osteoconductive mineral similar to natural bone (this part of the bone graft substitute will not be resorbed and does not need to be surgically removed). The applicant stated that CSH and CSD conform to specifications based on the monograph Calcium Sulfate Dihydrate 0982, European Pharmacopoeia (EP) and the Official Monograph for Calcium Sulfate U.S. Pharmacopoeia/ National Formulary (USP) as well as internal requirements; (2) CERAMENT[supreg] ID, an injection device used to inject the paste into the bone void or gap; (3) Valve, a needleless valve needed for the transfer of the ceramic paste from the CERAMENT[supreg] CMI to the CERAMENT[supreg] ID; (4) Tip Extenders, which are sterile, plastic needles with an inner diameter of 2.55 mm and two lengths (50 and 100 mm), that are connected to the CERAMENT[supreg] ID to facilitate placement of the paste at the debridement site; (5) CERAMENT[supreg] GENTAMICIN, the gentamicin sulfate in a glass vial equipped with a stopper and a cap. The gentamicin sulfate subcomponent has a potency equivalent to >=590[mu]g gentamicin/mg (anhydrous substance) and is dissolved in the 0.9 percent sterile sodium chloride solution and mixed with the CBS powder. Per the applicant, the prepared paste sets to a calcium sulfate dihydrate matrix with embedded hydroxyapatite particles, and gentamicin sulfate. The applicant further explained that it delivers 17.5 mg gentamicin per mL paste. Per the applicant, the gentamicin sulfate subcomponent complies with the EP monograph for gentamicin sulfate; (6) CERAMENT[supreg] MIXING LIQUID, a sterile sodium chloride, (NaCl) solution, 9 mg per mL in a glass vial. Per the applicant, it is the liquid component of CERAMENT[supreg] G. This component contains water which is needed for the calcium sulfate reaction to occur. The liquid meets requirements of the compendial excipient of USP/EP grade and is also registered in the inactive ingredient database; (7) BONESUPPORT DP, which includes two ventilated dispensing pins to facilitate easy handling when preparing the gentamicin solution; and (8) BONESUPPORT SYRINGE, a single packed, sterile 10 mL syringe with a male/female rotator assembly, and is used when preparing the gentamicin solution. According to the applicant, after the surgical site has been prepared and any dead bone is debrided (that is, removed), the CERAMENT[supreg] G paste is prepared by the surgeon or surgical technician by: (1) mixing the gentamicin powder with the provided saline to make a gentamicin liquid; (2) adding the gentamicin liquid to the powder in the CERAMENT[supreg] CMI syringe and mixing the gentamicin liquid and powder; and (3) transferring the resulting paste to a smaller delivery syringe. Four minutes after the start of mixing, the paste is ready to be used as a bone void filler. Per the applicant, it can be injected using the tip extenders provided in the kit or by attaching a needle to the delivery syringe, or it can be placed into a bead mold to form beads. Fifteen minutes after the start of mixing, CERAMENT[supreg] G can be drilled into, if required. At 20 minutes, it is fully set, at which time the wound can be closed. As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at Sec. 419.66(b)(1) through (4). [[Page 81723]] With respect to the newness criterion at Sec. 419.66(b)(1), CERAMENT[supreg] G received FDA Breakthrough Device designation effective March 12, 2020, as a resorbable, gentamicin-eluting ceramic bone graft substitute intended for use as a bone void filler as an adjunct to systemic antibiotic therapy and surgical debridement (standard treatment approach to a bone infection) as part of the surgical treatment of osteomyelitis. By eluting gentamicin, CERAMENT[supreg] G can inhibit the colonization of gentamicin-sensitive microorganisms to protect bone healing. CERAMENT[supreg] G can augment provisional hardware to help support bone fragments during the surgical procedure and is resorbed and replaced by bone during the healing process. FDA granted the applicant De Novo classification for CERAMENT[supreg] G under the generic name, ``Resorbable calcium salt bone void filler containing a single approved aminoglycoside antibacterial substance'' on May 17, 2022, for the same indication as the one covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for CERAMENT[supreg] G on May 31, 2022, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether CERAMENT[supreg] G meets the newness criterion at Sec. 419.6C6(b)(1). We did not receive public comments regarding whether CERAMENT[supreg] G meets the newness criterion at Sec. 419.66(b)(1). We received the application for a new device category for transitional pass-through payment status for CERAMENT[supreg] G on May 31, 2022, which is within 3 years of FDA Breakthrough Device designation effective March 12, 2020, and the FDA De Novo classification on May 17, 2022. As such we have concluded that CERAMENT[supreg] G meets the newness criterion. With respect to the integral part of the service criterion at Sec. 419.66(b)(3), the applicant did not indicate whether CERAMENT[supreg] G is integral to the service provided. However, per the applicant, CERAMENT[supreg] G is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted into the patient as required at Sec. 419.66(b)(3). We invited public comment on whether CERAMENT[supreg] G meets the eligibility criterion at Sec. 419.66(b)(3). We did not receive public comments regarding whether CERAMENT[supreg] G meets the eligibility requirements at Sec. 419.66(b)(3). Based on the information we have received and our review of the application, we determined that CERAMENT[supreg] G is integral to the service provided, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted. Therefore, based on our review of the application, we have determined that CERAMENT[supreg] G meets the eligibility criteria at Sec. 419.66(b)(3). With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant did not address whether CERAMENT[supreg] G is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if CERAMENT[supreg] G is a supply or material furnished incident to a service. We invited public comment on whether CERAMENT[supreg] G meets the exclusion criterion at Sec. 419.66(b)(4). We did not receive public comments regarding whether CERAMENT[supreg] G meets the eligibility requirements at Sec. 419.66(b)(4). Based on the information we have received and our review of the application, we determined that CERAMENT[supreg] G is not a piece of equipment, 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. Therefore, based on our review of the application, we have determined that CERAMENT[supreg] G meets the eligibility criteria at Sec. 419.66(b)(4). In addition to the criteria at Sec. 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described CERAMENT[supreg] G as a single-use implantable bone void filler combination device/drug that remodels into bone and elutes gentamicin. The applicant asserted that there are no existing bone void filler devices cleared or approved for use in the U.S. for single stage surgical reconstruction of bone defects that provide stability, promote bone formation, and effectively support the surgical treatment of infection by antibiotic elution. However, for comparison purposes, the applicant listed HCPCS code C1734 (Orthopedic/device/drug matrix for opposing bone-to-bone or soft-tissue-to-bone (implantable), as a device category that it considers similar to CERAMENT[supreg] G's device category.\16\ --------------------------------------------------------------------------- \16\ HCPCS code C1734 is a device category for which pass- through status was extended for a 1-year period beginning January 1, 2023, by section (a)(2) of the Consolidated Appropriations Act, 2023 (CAA, 2023) (Pub. L. 117-328), titled ``Extension of Pass-Through Status Under the Medicare Program for Certain Devices Impacted by COVID-19.'' https://www.cms.gov/files/document/r11801cp.pdf. --------------------------------------------------------------------------- The applicant stated that CERAMENT[supreg] G differs from the bone substitutes AUGMENT[supreg] and AUGMENT[supreg] Injectable \17\ (devices described by HCPCS code C1734). We noted that CMS approved an application for AUGMENT[supreg] Bone Graft as a new device category for transitional pass-through payment status and established HCPCS code C1734 as a new device category beginning in CY 2020. We referred readers to the CY 2019 OPPS/ASC final rule with comment period (84 FR 61292 through 61294) for a full discussion of the AUGMENT[supreg] Bone Graft application and decision.\18\ The applicant asserted that CERAMENT[supreg] G and AUGMENT[supreg] differ in terms of the product composition and mechanism of action or intended use. In addition, the applicant asserted that the products are intended for different groups of patients. With respect to composition, per the applicant, CERAMENT[supreg] G consists of HA, CaS, and gentamicin sulfate. In contrast, the applicant stated that AUGMENT[supreg] consists of beta- tricalcium phosphate ([beta]-TCP) and recombinant human platelet- derived growth factor (rhPDGF-BB), and AUGMENT[supreg] Injectable consists of [beta]-TCP, rhPDGF-BB, and a collagen matrix. With respect to the mechanism of action, the applicant stated that CaS in CERAMENT[supreg] G acts as a resorbable carrier for HA, which has a slow resorption rate and high osteoconductivity, providing a scaffold for new bone generation. The applicant further explained that by combining CaS and HA, a gentamicin, CERAMENT[supreg] G can reduce the recurrence of chronic osteomyelitis from gentamicin-sensitive microorganisms to protect bone healing. In contrast, according to the applicant, the rhPDGF-BB in AUGMENT[supreg] acts as [[Page 81724]] a chemo-attractant and mitogen for cells involved in wound healing and promotes angiogenesis at the site of healing, and the [beta]-TCP acts as a bone void filler to prevent soft tissue from collapsing into the void. --------------------------------------------------------------------------- \17\ The applicant differentiates itself from AUGMENT[supreg] and AUGMENT[supreg] Injectable, but does not use the term ``AUGMENT[supreg] Bone Graft'' in the application. However, the link provided in the application goes to the AUGMENT[supreg] web page that describes AUGMENT[supreg] Regenerative Solutions, AUGMENT[supreg] Bone Graft and AUGMENT[supreg] Injectable. We use the term ``AUGMENT[supreg]'' to collectively refer to the AUGMENT[supreg] products described herein and those listed on the AUGMENT[supreg] website. The applicant provided web page (in footnote): AUGMENT BONE GRAFT website: http://www.augmentbonegraft.com/healthcare-professionals/. \18\ https://www.govinfo.gov/content/pkg/FR-2019-11-12/pdf/2019-24138.pdf. --------------------------------------------------------------------------- Per the applicant, CERAMENT[supreg] G is indicated for use as a bone void filler in skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement (standard treatment approach to a bone infection) as part of the surgical treatment of osteomyelitis in defects in the extremities. In contrast, per the applicant, AUGMENT[supreg] and AUGMENT[supreg] Injectable are indicated for use as an alternative to autograft in arthrodesis in patients who require a bone fusion, such as patients who have arthritis, avascular necrosis, joint instability or deformity, or require joint arthroplasty of the ankle and/or hindfoot. Further, the applicant asserted that AUGMENT[supreg] cannot be used in the patients for whom CERAMENT[supreg] G is indicated because AUGMENT[supreg] is specifically contraindicated in patients with an active infection at the operative site. We noted that, based on the description of the device provided by the applicant, CERAMENT[supreg] G and AUGMENT[supreg] differ in terms of composition and intended use, but also noted that device categories are not intended to be device-specific. Rather, device categories are intended to encompass any device that can be appropriately described by the category. As such, when we evaluate a potential pass-through device to determine whether it meets the device category criterion at Sec. 419.66(c)(1), we compare the subject device to the device category descriptor rather than to the specific device for which the device category was created. Specifically, C1734 describes any device that meets the following descriptor: Orthopedic/device/drug matrix for opposing bone-to-bone or soft-tissue-to-bone (implantable), and per the applicant, CERAMENT[supreg] G is described as an implantable device/ drug matrix that, with its intended use, will oppose soft-tissue-to- bone. In this context, we stated that we believe CERAMENT[supreg] G may be similar to the devices currently described by C1734, and therefore CERAMENT[supreg] G may also be appropriately described by C1734. We invited public comment on whether CERAMENT[supreg] G meets the device category criterion at Sec. 419.66(c)(1). Comment: In response to our concerns that CERAMENT[supreg] G may be appropriately described by C1734, the applicant commented that CERAMENT[supreg] G meets eligibility requirements of Sec. 419.66(c)(1), stating that CERAMENT[supreg] G can be distinguished from the device currently described by HCPCS code C1734 and, as such, meets the device category criterion. Specifically, the applicant asserted that CERAMENT[supreg] G differs from the device described in C1734 by composition, mechanisms of action, indication for use, intended patient population, associated treatment cases and procedures, and by FDA designation and classification. All commenters addressing the CERAMENT[supreg] G transitional pass- through application offered support for approval of the application and creation of a new device category. The applicant provided that CERAMENT[supreg] G was granted Breakthrough Device designation by FDA as a class II device with the following indication for use: CERAMENT[supreg] G is a resorbable, gentamicin-eluting ceramic bone void filler intended for use as a bone void filler in skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement (standard treatment approach to a bone infection) as part of the surgical treatment of osteomyelitis in defects in the extremities. The applicant further commented that one of the requirements of FDA class II designation was to assure that there is no risk of antimicrobial resistance from using the product, and that the antimicrobial properties of CERAMENT[supreg] G are unique, and robust clinical evidence demonstrates that recurrence of infection is reduced with the use of CERAMENT[supreg] G in the management of bone infection. With respect to our concern that CERAMENT[supreg] G may be appropriately described by C1734, the applicant stated that CERAMENT[supreg] G differs significantly from the device, AUGMENT[supreg], described in the C1734 category (Orthopedic/device/ drug matrix for opposing bone-to-bone or soft-tissue-to-bone (implantable)). The applicant asserted that the most important fundamental differences between CERAMENT[supreg] G and AUGMENT[supreg] is their composition and their intended patient population. Specifically, the applicant asserted, and all commenters agreed, that the antimicrobial properties in the CERAMENT[supreg] G composition are unique. Further, the applicant reiterated that CERAMENT[supreg] G is intended for patients with bone infection as an adjunct to systemic antibiotic therapy and surgical debridement (standard treatment approach to a bone infection) as part of the surgical treatment of osteomyelitis in defects in the extremities, with all commenters stating that CERAMENT[supreg] G is the only approved bone void filler that does this. The only device described by C1734, AUGMENT[supreg], does not contain an antimicrobial agent, is intended for patients requiring ankle and foot bone fusion due to arthritis-related conditions, avascular necrosis and/or joint instability, is not intended for use in patients with bone infection, and is contraindicated to local infection at the site of implantation. The applicant also sought to clarify how, in comparison to the device described in C1734 category, CERAMENT[supreg] G's mechanism of action is unique. Commenters stated that CERAMENT[supreg] G's mechanism of action is unique, in that it is the only approved bone void filler that elutes antibiotics directly into the site of infection and bone. Some commenters also noted that this unique mechanism of action allows for single-stage procedures in the outpatient setting for a patient with osteomyelitis compared to treatment that consists of six weeks or more of intravenous antibiotics that can lead to adverse events such as acute kidney injury and the development of multidrug resistant bacteria. The applicant reiterated that CERAMENT[supreg] G's unique mechanism of action is that it elutes gentamicin (the antimicrobial agent) to protect against gentamicin-sensitive microorganisms. Specifically, while both CERAMENT[supreg] G's and AUGMENT[supreg]'s mechanisms of action include providing an osteoconductive scaffold for new bone generation, CERAMENT[supreg] G also elutes gentamicin to protect against microorganisms, which AUGMENT[supreg] does not. The applicant further clarified that CERAMENT[supreg] G augments provisional hardware to help support bone fragments during the surgical procedure and acts only as a temporary support media and is not intended to provide structural support during the healing process. One commenter noted that having predictable and sustained release of gentamicin with CERAMENT[supreg] G is a major differentiator which contributes to successful clinical outcomes, and that CERAMENT[supreg] G's antimicrobial property is important to protect bone healing and in turn, prevent the recurrence of infection. The applicant also asserted that CERAMENT[supreg] G can be distinguished from the only device described in C1734, AUGMENT[supreg], based on their associated treatment cases and procedures. The applicant reiterated that CERAMENT[supreg] G's associated treatment cases are those addressing patients with a bone infection, whereas [[Page 81725]] AUGMENT[supreg]'s associated treatment cases are those addressing patients who require ankle and foot bone fusion. Further, the applicant clarified that CERAMENT[supreg] G's associated procedures (CPT codes) are in Musculoskeletal Procedure Levels 2, 3, and 4, which correspond to APC 5112, 5113, and 5114. In contrast, the procedures indicated for AUGMENT[supreg] are for Musculoskeletal Procedures Levels 5 and 6, which correspond to APC 5115 and 5116. The applicant noted that this results in distinct APC payment ranges for CERAMENT[supreg] G and AUGMENT[supreg]. Specifically, based on the corresponding APC for each device, the Medicare payment range for CERAMENT[supreg] G would be $1,535.85 to $6,895.06, and for AUGMENT[supreg] it is $13,269.40 to $20,692.25. Response: We appreciate the input provided by these commenters. We have taken this information into consideration in making our final determination of whether to establish a new device category for CERAMENT[supreg] G, discussed below. Comment: Along with the applicant, commenters urged CMS to establish a new device category that describes CERAMENT[supreg] G's unique composition and mechanism of action. The applicant asserted that CMS has set past precedent that would allow establishment of a new device category to account for new-technology antimicrobial products. For example, per the applicant, CMS has routinely recognized the diversity of physician-administered drugs and biologicals within its policy for granting transitional pass-through payment status and has not lumped all drugs and biologicals into a single category. The applicant asserted this unique antimicrobial composition and mechanism of action of CERAMENT[supreg] G merits a new and different device category than that described by C1734, and that a new category should acknowledge the antimicrobial properties of CERAMENT[supreg] G. The applicant urged CMS to exercise similar flexibility in evaluating CERAMENT[supreg] G and to create a new device category to accurately describe the new technology, in this case a new device/drug antimicrobial technology. Response: We appreciate the commenters' input. We agree with commenters that CMS has a precedent of establishing new device categories to account for new and innovative technologies not described by existing device categories. While the evaluation of physician- administered drugs and biologicals provided as an example by the applicant is not applicable to our determination of whether to grant transitional pass-through payment status for a particular device, we nevertheless agree with the applicant and commenters that there are circumstances where a new device category must be created because the existing device categories do not describe a new technology. After consideration of the public comments we received, we agree there is no existing pass-through payment device category that appropriately describes CERAMENT[supreg] G because no current category appropriately describes bone void filler devices cleared or approved for use for single stage surgical reconstruction of bone defects that provide stability, promote bone formation, and support the surgical treatment of infection by antibiotic elution antimicrobial agent. Based on this information, we have determined that CERAMENT[supreg] G meets the first eligibility criterion at Sec. 419.66(c)(1). We received additional public comments regarding Sec. 419.66(c)(1) that did not impact our decision on whether or not CERAMENT[supreg] G meets the Sec. 419.66(c)(1) criterion, however we address these comments below. Comment: The applicant commented that antimicrobial products should receive equal benefits in the outpatient setting as they do in the inpatient setting. The applicant suggested that CMS should acknowledge the importance of preventing antimicrobial resistance and promoting antibiotic stewardship in the hospital outpatient setting by creating new device categories for device pass-through payment that differentiate antimicrobial products from non-antimicrobial products. Specifically, the applicant proposed that CMS adopt an initiative similar to the alternative technology add-on payment pathway for Qualified Infectious Disease Products (QIDPs) established in the FY 2020 IPPS/LTCH PPS final rule.\19\ The applicant urged CMS to grant new device categories to technologies that promote CMS goal of confronting antimicrobial resistance, asserting that separating these technologies acknowledges the fact that products with antimicrobial fighting properties can be more expensive and ensures that companies are adequately reimbursed for their products while avoiding excessive reimbursement of less expensive non-antimicrobial devices. --------------------------------------------------------------------------- \19\ We refer readers to the FY 2020 IPPS/LTCH PPS final rule with comment period (84 FR 42294 through 42297) for a full discussion of the Qualified Infectious Disease Products (QIDPs) policy. --------------------------------------------------------------------------- The applicant requested that CMS take the antimicrobial performance of CERAMENT[supreg] G into account when considering approval of the device pass-through payment application. Specifically, the applicant further stated that the antimicrobial properties in CERAMENT[supreg] G effectively reduce the recurrence of infection. Citing McNally et al.,\20\ the applicant stated that mid- to long-term clinical outcomes of CERAMENT[supreg] G in a single-stage protocol show high levels of effectiveness where 94 percent of patients were infection-free after a mean follow-up of 6.05 years, and that in patients with recurrent infection, no cultures identified new resistance to gentamicin. --------------------------------------------------------------------------- \20\ McNally, M.A., Ferguson, J.Y., Scarborough, M., Ramsden, A., Stubbs, D.A., and Atkins, B.L. (2022) Mid- to long-term results of single-stage surgery for patients with chronic osteomyelitis using a bioabsorbable loaded ceramic carrier. The bone & joint journal, 104.B(9), 1095-1100. --------------------------------------------------------------------------- Response: We appreciate the commenters' feedback. Regarding the request to develop an alternative pathway for device pass-through payments for other special designations (other than those that are part of the FDA's Breakthrough Device program and have received marketing authorization for the indication covered by the Breakthrough Device designation, as previously discussed), we recognize that the goal of facilitating access to new technologies for Medicare beneficiaries could also apply to other designations, and we will keep these suggestions in mind for consideration in future rulemaking. With respect to the applicant's request that CMS take the antimicrobial performance of CERAMENT[supreg] G into account when considering approval of the device pass-through payment application, we appreciate the input provided by these commenters. We have taken this information into consideration in making our final determination of whether to establish a new device category for CERAMENT[supreg] G, discussed below. Comment: The applicant, and all commenters, asserted that without a new device category, CERAMENT[supreg] G will not be accessible in the outpatient setting because the reimbursement without a transitional pass-through payment would not cover the cost of outpatient surgery with CERAMENT[supreg] G. Specifically, the applicant reiterated the information in their application that the average cost per case treated with CERAMENT[supreg] G of $7,567 is much greater than the Medicare payment rates for the assigned APCs. The applicant further asserted that several doctors have expressed their concerns about being able to access and provide [[Page 81726]] CERAMENT[supreg] G to patients in the hospital outpatient setting without the additional transitional pass-through payment available to supplement the existing APC payment rates. Commenters noted that access to CERAMENT[supreg] G in the outpatient setting is in the interest of Medicare beneficiaries to allow for outpatient surgeries that are otherwise moved to inpatient care. Response: We appreciate the commenters' feedback and acknowledge the cost concerns related to the utilization of CERAMENT[supreg] G in the outpatient setting. The third criterion for establishing a device category at Sec. 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in Sec. 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. We address the cost of the CERAMENT[supreg] G and the cost significance criteria below. The second criterion for establishing a device category, at Sec. 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 for the indication covered by the Breakthrough Device designation. CERAMENT[supreg] G has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore appears to meet the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement. The third criterion for establishing a device category, at Sec. 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in Sec. 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that CERAMENT[supreg] G would be reported with HCPCS codes listed in Table 86. BILLING CODE 4150-28-P [[Page 81727]] [GRAPHIC] [TIFF OMITTED] TR22NO23.109 [[Page 81728]] [GRAPHIC] [TIFF OMITTED] TR22NO23.110 BILLING CODE 4150-28-C 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. As we explained in the CY 2005 OPPS final rule with comment period (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. For our calculations, we used APC 5112, which had a CY 2022 payment rate of $1,422.51 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 23035 had a device offset amount of $217.36 at the time the application was received. We noted that the applicant submitted cost information for two different device sizes (5 ml and 10 ml) for CERAMENT[supreg] G. Per the applicant, the average patient will require approximately 10 ml per procedure, with a weighted cost of $7,567.00 per patient. 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 $7,567.00 for CERAMENT[supreg] G is 531.95 percent of the applicable APC payment amount for the service related to the category of devices of $1,422.51 (($7,567.00/$1,422.51) x 100 = 531.95 percent). Therefore, we stated that we believe CERAMENT[supreg] G meets the first cost significance requirement. The second cost significance requirement, at Sec. 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $7,567.00 for CERAMENT[supreg] G is 3,481.32 percent of the cost of the device- related portion of the APC payment amount for the related service of $217.36 (($7,567.00/$217.36) x 100 = 3,481.32 percent). Therefore, we stated that we believe CERAMENT[supreg] G meets the second cost significance requirement. The third cost significance requirement, at Sec. 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 $7,567.00 for CERAMENT[supreg] G and the portion of the APC payment amount for the device of $217.36 is 516.67 percent of the APC payment amount for the related service of $1,422.51 ((($7,567.00 [[Page 81729]] - $217.36)/$1,422.51) x 100 = 516.67 percent). Therefore, we stated that we believe CERAMENT[supreg] G meets the third cost significance requirement. We invited public comment on whether the CERAMENT[supreg] G meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. We did not receive public comments regarding whether CERAMENT[supreg] G meets the cost criteria at Sec. 419.66(d)(1) through (3). Based on the information we have received, we have determined that CERAMENT[supreg] G meets the cost criterion for device pass-through payment status. After consideration of the public comments we received, and our review of the device pass-through application, we have determined that CERAMENT[supreg] G meets the requirements for device pass-through status described at Sec. 419.66. As stated previously, devices that are granted an FDA Breakthrough Device designation and have marketing authorization for the indication covered by the Breakthrough Device designation are not evaluated in terms of the current substantial clinical improvement criterion at Sec. 419.66(c)(2)(i) for the purposes of determining device pass-through payment status but must meet the other criteria for device pass-through status. We believe CERAMENT[supreg] G meets the criteria at Sec. 419.66, and therefore, effective beginning January 1, 2024, we are finalizing approval for device pass-through payment status for CERAMENT[supreg] G under the alternative pathway for devices that have an FDA Breakthrough Device designation and have received FDA marketing authorization for the indication covered by the Breakthrough Device designation. (2) Traditional Device Pass-Through Applications (a) Ambu[supreg] aScope\TM\ 5 Broncho HD Ambu Inc. submitted an application for a new device category for transitional pass- through payment status for the Ambu[supreg] aScope\TM\ 5 Broncho HD for CY 2024. Per the applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD is one component of the Ambu[supreg] aScope\TM\ 5 Broncho HD System which consists of: (1) the Ambu[supreg] aScope\TM\ 5 Broncho HD (5.0/2.2 or 5.6/2.8), a sterile, single-use, disposable flexible/rigid bronchoscope; and (2) Ambu[supreg] aBox\TM\ 2, a compatible, reusable display unit. The applicant is only seeking a new device category for transitional pass through payment status for the Ambu[supreg] aScope\TM\ 5 Broncho HD component. Per the applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD, consists of: (1) a handle, to hold the scope (designed for left or right hand); (2) a control lever, to move the distal tip up or down in a single plane; (3) a working channel and working channel port, for instillation of fluids and insertion of endotherapy instruments; (4) a biopsy valve, to be attached to the working channel port, for insertion of endotherapy instruments or attachment of a syringe; (5) a suction connector, for connection of suction tubing; (6) a suction button, to activate suction when pressed; (7) endoscope buttons 1 and 2 (depending on settings in display unit, the two remote switches allow for direct activation on handle of four different functionalities such as image and video capturing, initiate advanced red contrast (ARC), and zoom); (8) a rotation control ring, for rotation of the insertion cord during procedure; (9) a tube connection, for fixation of tubes with standard connector during procedure; (10) an insertion cord and insertion portion, flexible airway insertion cord; (11) bending section, maneuverable part; (12) distal tip, which contains the camera, light source (two light-emitting diodes (LEDs)), and the working channel exit; (13) display unit connector, to connect to the port on the Ambu[supreg] aBox\TM\ 2 display unit; (14) a cable, to transmit the image signal to the Ambu[supreg] aBox\TM\ 2 display unit; (15) a protective handle cover, to protect the control lever during transport and storage; (16) a protective pipe, to protect the insertion cord during transport and storage; and (17) an introducer, to facilitate introduction of luer lock syringes. The applicant stated that the Ambu[supreg] aScope\TM\ 5 Broncho HD is an imaging/illumination bronchoscope device that uses an integrated camera module and built-in dual LED illumination to provide access to, and imaging of, the lungs for diagnostic and therapeutic purposes for patients with pulmonary pathology. The device is intended for endoscopy and endoscopic surgery within the lungs, also known as bronchoscopy. According to the applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD was designed to perform a wide array of diagnostic and interventional pulmonology procedures. The applicant noted that the Ambu[supreg] aScope\TM\ 5 Broncho HD is a single-use bronchoscope designed to be used with the Ambu[supreg] aBox\TM\ 2 display unit, endotherapy instruments and other ancillary equipment for bronchoscopic procedures, and examination within the airways and the tracheobronchial tree. It is intended to provide visualization via the compatible display unit, the Ambu[supreg] aBox\TM\ 2, and to allow passage of endotherapy instruments via its working channel. Per the applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD bronchoscope is inserted into the patient airway through either the mouth, nose, or via a tracheostomy, if present. The applicant explained that when the Ambu[supreg] aScope\TM\ 5 Broncho HD bronchoscope has reached the correct position, endotherapy instruments can be inserted into the working channel system of the bronchoscope. Per the applicant, an introducer supplied with the bronchoscope can be attached to the working channel port via a luer lock adaptor while the bronchoscope is in use. The applicant noted that the suction system may be used to remove blood, saliva, and mucus from the airway. The applicant indicated that a bronchoscope operator monitors the field of view via the integrated camera of the Ambu[supreg] aScope\TM\ 5 Broncho HD bronchoscope and the procedure is finished when the device is pulled out completely. As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at Sec. 419.66(b)(1) through (4). With respect to the newness criterion at Sec. 419.66(b)(1), on July 25, 2022, the applicant received 510(k) clearance from FDA for the Ambu[supreg] aScope\TM\ 5 Broncho HD as a device to be used for endoscopic procedures and examination within the airways and tracheobronchial tree. We received the application for a new device category for transitional pass-through payment status for the Ambu[supreg] aScope\TM\ 5 Broncho HD on February 28, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the newness criterion at Sec. 419.66(b)(1). We did not receive public comments regarding whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the newness criterion at Sec. 419.66(b)(1). We received the application for a new device category for transitional pass-through payment status for Ambu[supreg] aScope\TM\ 5 Broncho HD on February 28, 2023, which is within 3 years of July 25, 2022, the date of FDA 510(k) approval to market the Ambu[supreg] aScope\TM\ 5 Broncho HD, and as such we have concluded that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the newness criterion. With respect to the eligibility criterion at Sec. 419.66(b)(3), according to the [[Page 81730]] applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically inserted as required by Sec. 4189.66(b)(3). We invited public comment on whether the Ambu[supreg] aScope \TM\ 5 Broncho HD meets the criterion at Sec. 419.66(b)(3). We did not receive any comments on whether the Ambu[supreg] aScope \TM\ 5 Broncho HD meets the eligibility criteria at Sec. 419.66(b)(3). Based on the information we have received and our review of the application, we agree with the applicant that Ambu[supreg] aScope \TM\ 5 Broncho HD is integral to the service provided, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted. Therefore, we have determined that Ambu[supreg] aScope \TM\ 5 Broncho HD meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant did not address whether the Ambu[supreg] aScope \TM\ 5 Broncho HD is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if the Ambu[supreg] aScope \TM\ 5 Broncho HD is a supply or material furnished incident to a service. We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant asserted that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the eligibility requirements at Sec. 419.66(b)(4). The applicant clarified that the device is not equipment, an instrument, apparatus, implement, or item for which depreciation and financing are recovered. The applicant indicated that the device is not a material or supply furnished incident to a service. The applicant stated that the device is purely an operating cost and is not subject to capitalization or a depreciation schedule. Response: We appreciate the applicant's input. Based on the information we have received and our review of the application, we agree with the applicant that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the device eligibility requirements of Sec. 419.66(b)(4) because it is not a piece of equipment, 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. Therefore, we have determined that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the eligibility criterion at Sec. 419.66 (b)(4). In addition to the criteria at Sec. 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described the Ambu[supreg] aScope\TM\ 5 Broncho HD as a single-use, disposable, digital flexible/rigid bronchoscope that is used in pulmonary procedures (bronchoscopy) to diagnose and treat conditions of the lungs, including tumors or bronchial cancer, airway blockage (obstruction), narrowed areas in airways (strictures), inflammation, and infections such as tuberculosis (TB), pneumonia, fungal or parasitic lung infections, interstitial pulmonary disease, causes of persistent cough, causes of coughing up blood, spots seen on chest X- rays, and vocal cord paralysis. The applicant claimed that the Ambu[supreg] aScope\TM\ 5 Broncho HD is different from other endoscopes because it is a single-use endoscope indicated for use in the respiratory system, the device records snapshots or video of images, and the device is temporarily inserted into the patient airway to diagnose and treat lung problems. According to the applicant, there are two possible existing pass-through device categories, represented by the following codes: C1748 (Endoscope, single-use (that is, disposable), upper gastrointestinal tract (GI), imaging/illumination device (insertable)); and C1747 (Endoscope, single-use (that is, disposable), urinary tract, imaging/illumination device (insertable)). The applicant noted that while these two codes are for single-use endoscopic devices, they are only appropriate for GI and urinary tract imaging, respectively. Therefore, the applicant asserted that these two codes would not apply to a single-use, disposable, bronchoscope for use in pulmonary procedures. We noted that while C1748 and C1747 are intended to be used in different anatomical areas of the patient, the codes for both device categories describe devices that are single use and have imaging capabilities. We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the device category criterion at Sec. 419.66(c)(1). Comment: The applicant reiterated that the device is not appropriately described by any existing device categories. The applicant noted that although HCPCS codes C1747 and C1748 do describe single-use endoscopes and have imaging capabilities, they are intended to be used in different anatomical areas, specifically the urinary tract and the upper GI tract, respectively. The applicant asserted that the device is used in pulmonary procedures and meets the device category criterion. Another commenter referenced an FDA guidance \21\ on the 510(k) Program issued on July 28, 2014, to support the applicant's assertion by stating that the device was cleared for marketing under 21 CFR 874.4680, and therefore the device cannot be legally labeled for use or otherwise promoted for GI/urology use. --------------------------------------------------------------------------- \21\ FDA Guidance July 28, 2014. ``The 510(k) Program: Evaluating Substantial Equivalence in Premarket Notification [510(k)]: Guidance for Industry and Food and Drug Administration Staff''. --------------------------------------------------------------------------- Response: We appreciate the applicant and commenter's input. Based on the information we have received and our review of the application, we agree there is no existing pass-through payment category that appropriately describes the Ambu[supreg] aScope\TM\ 5 Broncho HD because no current or previously in effect category describes a single- use endoscope indicated for use in the respiratory system. Based on this information, we have determined that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the eligibility criterion at Sec. 419.66(c)(1). The second criterion for establishing a device category, at Sec. 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 for the indication covered by the Breakthrough Device designation. The applicant claimed that the Ambu[supreg] aScope\TM\ 5 Broncho HD represents a substantial clinical improvement over existing technologies by: (1) eliminating complex cleaning/reprocessing procedures, (2) reducing microbial transmission and infection since it is single-use, (3) eliminating the need for continuous training of reprocessing staff, (4) minimizing the risk of patient [[Page 81731]] cross-contamination, (5) assuring that a sterilized scope will be used each time, and (6) assuring that there will be no biofilm from endoscope channels. The applicant provided four articles, an FDA guidance letter, and an FDA safety notice specifically for the purpose of addressing the substantial clinical improvement criterion. In support of its claim that the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD eliminates complex cleaning/reprocessing procedures because it is a single-use device, the applicant referenced an FDA Reprocessing Final Guidance document \22\ issued March 17, 2015. This FDA document provides guidance to medical device manufacturers on the complex activities involved in crafting and validating reprocessing instructions that ensure that the device can be used safely and for the purpose for which it is intended. The guidance document is limited to reusable medical devices and single-use medical devices that are initially supplied as non-sterile to the user and require the user to process the device prior to its use. In this guidance document, the FDA identifies a subset of reusable medical devices (including bronchoscopes and accessories) that pose a greater likelihood of microbial transmission and represent a high risk of infection (subclinical or clinical) if they are not adequately reprocessed and indicates design features which may pose a challenge to adequate reprocessing for arthroscopes, laparoscopic instruments, and electrosurgical instruments, and their respective accessories. However, the FDA guidance does not mention sterile, single-use medical devices in this document. --------------------------------------------------------------------------- \22\ FDA Guidance March 17, 2015. ``Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling: Guidance for Industry and Food and Drug Administration Staff''. https://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm253010.pdf. --------------------------------------------------------------------------- In support of its claim that the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD reduces microbial transmission and infection because it is single use, the applicant referenced an FDA safety notice \23\ issued on September 17, 2015 (2015 FDA safety notice). The FDA notice discussed the findings of an investigation into infections associated with reprocessed reusable medical devices, including an analysis of Medical Device Reports (MDRs) submitted to FDA from manufacturers and health care facilities. The notice provided that between January 2010 and June 2015, FDA received 109 MDRs concerning infections or device contamination associated with flexible bronchoscopes. However, FDA noted that, when compared to the number of bronchoscopy procedures performed in the U.S. each year, this is considered a small number of MDRs. In 2014, FDA received 50 MDRs that mentioned infections or device contamination associated with reprocessed flexible bronchoscopes, which prompted additional investigation of this issue. FDA indicated that a small number of the reported infections were from persistent device contamination despite following the manufacturer's reprocessing instructions, however, most of the infections were the result of the failure to meticulously follow manufacturer instructions for reprocessing, or the continued use of devices despite integrity, maintenance, and mechanical issues. FDA provided additional recommendations for health care facilities and staff that reprocess flexible bronchoscopes, and for patients considering bronchoscopy procedures, but did not reference single-use bronchoscopes in the notice. --------------------------------------------------------------------------- \23\ FDA Safety Communications, Infections Associated with Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647. --------------------------------------------------------------------------- In support of its claim that the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD eliminates the need for continuous training of reprocessing staff, the applicant referenced a study by Ch[acirc]teauvieux et al.,\24\ which assessed the organizational and economic impacts of the introduction of a single[hyphen]use flexible bronchoscope (FB) (Ambu[supreg] aScopeTM, versions 2 and 3) in comparison with a reusable FB (Pentax[supreg]) at the hospital level. The study took place between May 2016 and October 2016 in the Georges Pompidou European Hospital, an 800-bed university hospital in France. Ch[acirc]teauvieux et al. noted that the introduction of single-use FBs led to a more simplified process, less stress for medical and paramedical staff in emergency situations, teaching benefits, and easier management of transport, in comparison with reusable FBs. However, the authors recommended limiting the use of single use FBs to specific situations, and to prioritize the use of reusable devices for most of the bronchoscopies for cost savings. --------------------------------------------------------------------------- \24\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. (2018). Single-use flexible bronchoscopes compared with reusable bronchoscopes: Positive organizational impact but a costly solution. Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904. --------------------------------------------------------------------------- The applicant referred to a meta study by Barron and Kennedy \25\ to support its claim that the use of Ambu[supreg] aScope\TM\ 5 Broncho HD minimizes the risk of patient cross-contamination, ensuring that health care providers have taken optimal steps to safeguard their patients. Barron and Kennedy summarized the major advantages of single- use FBs over the standard reusable FBs in clinical scenarios. The authors noted that single-use FBs offer a safer alternative to standard reusable FBs in specific scenarios where reduced risk of cross infection was critical in the immunocompromised patient and in rare cases of prior contamination due to transmissible spongiform encephalopathies. --------------------------------------------------------------------------- \25\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. --------------------------------------------------------------------------- The applicant referred to a self-sponsored study \26\ by Ofstead et al.\27\ in 2019, in support of its claim that the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD ensures a sterilized scope is available for each procedure while reusable endoscopes may not be sterile even if manufacturers' cleaning protocols are followed. The study first referenced Ofstead et al.'s 2017 \28\ evaluation of the effectiveness of bronchoscope processing in three large hospitals where every bronchoscope had visible defects, protein was detected on 100 percent of high-level disinfected bronchoscopes, and bacteria or mold was found on 58 percent of the patient-ready bronchoscopes. Then, in 2019, Ofstead et al. conducted a study to determine the time and cost of acquiring, maintaining, and reprocessing bronchoscopes in four hospitals (two in the Midwest and two in the West Coast). Three hospitals had obtained single-use Ambu[supreg] bronchoscopes (2018, version unspecified) for procedures done in certain departments, after hours, or in emergency situations. Per Ofstead et al. [[Page 81732]] (2019), the cost for procedures with reusable bronchoscopes ($281 to $803) were comparable or higher than the cost of single-use bronchoscopes ($220 to $315), due to acquisition and maintenance of large inventories of bronchoscopes to ensure real-time availability for various hospital departments. Ofstead et al. (2019) suggested the use of single-use bronchoscopes and accessories for after hours and emergency situations and any procedures that do not require advanced bronchoscopy capabilities. Ofstead et al. (2019) summarized the steps that can be taken to reduce risks related to bronchoscope contamination and to focus on implementing quality management systems to improve personnel competence, bronchoscope inventory management, maintenance, reprocessing effectiveness, and storage. In addition to following manufacturer's steps for reprocessing the devices, Ofstead et al. (2019) suggest the use of single-use bronchoscopes and accessories for after hours and emergency situations and any procedures that do not require advanced bronchoscopy capabilities, which are currently available in the list of recommendations. --------------------------------------------------------------------------- \26\ Ofstead et al. acknowledged that this study was supported by an unrestricted research grant from Ambu Inc. The study sponsor did not participate in designing the study, identifying sites, collecting data, compiling results, interpreting the findings, or writing this article. \27\ Ofstead, C.L., Hopkins, K.M., Eiland, J.E., & Wetzler, H.P. Managing bronchoscope quality and cost: results of a real-world study. https://www.ambu.com/Files/Files/Ambu/Investor/News/English/2019/Managing%20Bronchoscope%20cost%20a%20real%20world%20study.pdf. \28\ Ofstead C.L., Quick M.R., Wetzler H.P., et al. (2018) Effectiveness of reprocessing for flexible bronchoscopes and endobronchial ultrasound bronchoscopes. Chest, 154(5):1024-34. --------------------------------------------------------------------------- The applicant referenced a review article by Kovaleva et al.\29\ in support of its claim that the Ambu[supreg] aScope\TM\ 5 Broncho HD's single-use feature is free of biofilm from endoscope channels since routine cleaning procedures do not remove biofilm reliably from endoscope channels. This review presents an overview of the infections and cross-contaminations related to flexible gastrointestinal endoscopy and bronchoscopy and illustrates the impact of biofilm on endoscope reprocessing and post-endoscopic infection. Kovaleva et al. noted that the use of antibiofilm-oxidizing agents with an antimicrobial coating inside washer disinfectors could reduce biofilm build-up inside endoscopes and automated endoscope re-processors and decrease the risk of transmitting infections.\30\ Per Kovaleva et al. while sterilization can be helpful to destroy microorganisms within biofilms, ethylene oxide sterilization may fail in the presence of organic debris after an inadequate cleaning procedure before reprocessing of flexible endoscopes. There was no mention of single-use bronchoscopes in the study. --------------------------------------------------------------------------- \29\ Kovaleva, J., Peters, F.T., van der Mei, H.C., & Degener, J.E. (2013). Transmission of infection by flexible gastrointestinal endoscopy and bronchoscopy. Clinical microbiology reviews, 26(2), 231-254. https://doi.org/10.1128/CMR.00085-12. \30\ Ibid. --------------------------------------------------------------------------- The applicant cited a self-sponsored, laboratory study by Kurman et al.,\31\ in general support of its application. Kurman et al. evaluated and assessed four different manufacturers' single-use flexible bronchoscopes (SFB), including the nominated device and its prior model, against their reusable flexible bronchoscopes (RFB) on a cadaver (that is, corpse) model, benchtop fixturing, and an artificial plastic lung model. The study compared the Ambu[supreg] aScope\TM\ 5 Broncho HD with four devices: (1) Olympus H-SteriScope; (2) Verathon BFLEX; (3) Boston Scientific Exalt-B; and (4) Ambu[supreg] aScopeTM 4 Broncho (the prior model of the nominated device). The study concluded that the Ambu[supreg] aScope\TM\ 5 Broncho HD has the highest overall performance, the highest overall rating for sampling, and highest maneuverability in difficult segmental airways among the comparator devices. --------------------------------------------------------------------------- \31\ Kurman, J., Wagh, A., Benn, B., & Islam, S., (2023). A comparison of single-use bronchoscopes and reusable bronchoscopes for interventional pulmonology applications. Confidential. Ambu Inc., funded evaluation and testing. --------------------------------------------------------------------------- The applicant indicated that the Ambu[supreg] aScope\TM\ 5 Broncho HD differs from these comparator devices as it is the only device that is compatible with argon gas plasma coagulation, cryotherapy, and laser, with an HD (1200x800) chip, has more degrees of articulation with tools, and provides image and video capture from the scope handle with multiple programmable functions including capture photo, start/end video, enable zoom, and initiate ARC. In addition, the applicant stated that the nominated device is superior to its earlier legally marketed device in terms of maneuverability into difficult segmental airways, overall performance, and overall sampling assessment. The applicant asserted that the nominated device differs from the predicate device due to a rotation mechanism on the handle and its superior articulation, which allow for more complicated procedures to be performed such as cryotherapy and coagulation. The applicant stated that the nominated device is equipped with an HD image chip and increased depth-of-field and field-of-view, which allow interventional pulmonologists to perform inspections, biopsies, and debulking. The applicant also stated that the nominated device's programmable buttons allow for superior documentation than the earlier bronchoscope device. We noted that the nominated device was determined to be substantially equivalent to the earlier device that the applicant had previously legally marketed. The FDA 510(k) summary indicated that both devices share similar technological characteristics including the optical system, bending section, diameter of insertion cord and distal end, and insertion portion length. Furthermore, the 510(k) summary indicated that both have the same technical characteristics, which include a maneuverable tip controlled by the user, flexible insertion cord, camera and a LED light source at the distal tip. Both are sterilized by ethylene oxide, are single-use devices, and have the ability to aspirate and collect samples in bronchoalveolar lavage and bronchial wash procedures. We noted that in its application, the applicant provided a comparison of certain devices or device categories that it believed are most closely related or similar to the Ambu[supreg] aScope\TM\ 5 Broncho HD. The applicant identified six reusable devices that it believed are most closely related: (1) Olympus Evis Exera Iii Bronchovideoscope Bf-h190; (2) Pentax EB-J10 Video Bronchoscope; (3) Fujifilm EB-580S Video Bronchoscope; (4) Olympus BF-Q190; (5) Olympus BF-1TH190; and (6) Olympus BF-XT190. According to the applicant, these devices are used during the same specific procedure(s) and/or services with which the Ambu[supreg] aScope\TM\ 5 Broncho HD is used. The applicant stated that the Ambu[supreg] aScope\TM\ 5 Broncho HD's single-use feature is unique among the comparators. According to the applicant, the single-use feature eliminates bronchoscope reprocessing. The applicant further submitted several articles reporting results on the prevalence of infection due to incomplete or inadequate processing for reusable bronchoscopes, which we summarize as follows. An article by Shimizu et al.\32\ concluded that patients with larger lesions, endobronchial lesions, histology of small-cell lung cancer, and advanced-disease stage tended to develop pulmonary infectious complications more often than other patients. A 2020 systematic literature review and meta-analysis by Travis et al.\33\ reported an estimated average reusable FB cross-contamination rate of 8.69 percent 1.86 (standard division [SD]) (95 percent confidence interval [CI]: 5.06-12.33 percent) among eight [[Page 81733]] studies from the U.S. and four European countries. Travis et al.\34\ attributed the infection rate to the differences in the study design and sampling methods, geography, low number of data points, clinical settings, and an aversion towards publishing negative findings among the eight studies. Furthermore, the applicant submitted a 2019 systematic review and cost-effective analysis by Mouritsen et al.,\35\ which reported an average 2.8 percent cross-contamination rate from reusable, flexible bronchoscopes among 16 studies from the United Kingdom, U.S., France, Spain, Australia, and Taiwan. Mouristen et al. identified that the single-use flexible bronchoscopes were cost effective and associated with a reduction of infection risk of approximately 1.71-4.07 percent compared with reusable flexible bronchoscopes. Lastly, the applicant again cited the meta study by Barron and Kennedy \36\ referencing the findings from Ofstead et al.,\37\ the review by Mouristen et al., and the Emergency Care Research Institute's (ECRI's) report.\38\ Of note, ECRI highlighted the recontamination of flexible endoscopes due to mishandling or improper storage as one of the top 10 health technology hazards. --------------------------------------------------------------------------- \32\ Shimizu, T., Okachi, S., Imai, N., Hase, T., Morise, M., Hashimoto, N., Sato, M., & Hasegawa, Y. (2020). Risk factors for pulmonary infection after diagnostic bronchoscopy in patients with lung cancer. Nagoya journal of medical science, 82(1), 69-77. https://doi.org/10.18999/nagjms.82.1.69. \33\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross- contamination rate of reusable flexible bronchoscopes: A systematic literature review and meta-analysis. Journal of infection prevention, 17571774231158203. \34\ Ibid. \35\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El- Boghdadly, K. (2020). A systematic review and cost effectiveness analysis of reusable vs. single-use flexible bronchoscopes. Anaesthesia, 75(4), 529-540. \36\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. \37\ Ofstead C.L., Quick M.R., Wetzler H.P., et al. (2018) Effectiveness of reprocessing for flexible bronchoscopes and endobronchial ultrasound bronchoscopes. Chest, 154(5):1024-34. \38\ ECRI. Top 10 health technology hazards. Executive brief. Pennsylvania: ECRI Institute, Health devices; 2019. p. 2019. --------------------------------------------------------------------------- Based on the evidence submitted with the application, we noted the following concerns: We noted concern about whether the Ambu[supreg] aScope\TM\ 5 Broncho HD can be distinguished from similar devices on the market and the earlier versions of the nominated device on the market sufficiently to demonstrate substantial clinical improvement. Four of the studies the applicant submitted, Ch[acirc]teauvieux et al.,\39\ Barron and Kennedy, Kurman et al., and Ofstead et al., investigated and provided data on the applicant's earlier models of the device, but did not provide comparisons to the nominated device. In addition, we noted that the studies provided also did not compare the nominated device to an appropriate comparator such as a single-use bronchoscope from a different manufacturer or a standard reusable bronchoscope, in a clinical setting. In addition, we noted that the applicant's self-sponsored study by Kurman, et al. was conducted in the laboratory (that is, on cadaver, benchtop fixturing, and artificial plastic lung) and not in the clinical setting. 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. --------------------------------------------------------------------------- \39\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. (2018). Single-use flexible bronchoscopes compared with reusable bronchoscopes: Positive organizational impact but a costly solution. Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904. --------------------------------------------------------------------------- Furthermore, we noted that the Ch[acirc]teauvieux et al.\40\ and Barron and Kennedy \41\ studies suggested limiting the use of single- use bronchoscope device to specific situations (that is, after hours or emergency), immunocompromised patients, and in rare cases of preventing prior contamination in the inpatient setting. We believed that further investigation with comparators in these specified cases would be particularly helpful to determine whether the device demonstrates a substantial clinical improvement over currently available treatment options in the clinical setting where it is most likely to be used. --------------------------------------------------------------------------- \40\ Ibid. \41\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. --------------------------------------------------------------------------- We noted concern that the application and all the articles submitted as evidence of substantial clinical improvement discuss potential adverse events from reusable bronchoscope procedures, but do not directly show any clinical improvement that results from the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD. We noted that Shimizu et al.,\42\ Travis et al.,\43\ Barron and Kennedy,\44\ and Ofstead et al.\45\ provided information about the risks associated with reprocessing reusable devices and reported mixed results. --------------------------------------------------------------------------- \42\ Shimizu, T., Okachi, S., Imai, N., Hase, T., Morise, M., Hashimoto, N., Sato, M., & Hasegawa, Y. (2020). Risk factors for pulmonary infection after diagnostic bronchoscopy in patients with lung cancer. Nagoya journal of medical science, 82(1), 69-77. https://doi.org/10.18999/nagjms.82.1.69. \43\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross- contamination rate of reusable flexible bronchoscopes: A systematic literature review and meta-analysis. Journal of infection prevention, 17571774231158203. \44\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. \45\ Ofstead, C.L., Hopkins, K.M., Eiland, J.E., & Wetzler, H.P. Managing bronchoscope quality and cost: results of a real-world study. https://www.ambu.com/Files/Files/Ambu/Investor/News/English/2019/Managing%20Bronchoscope%20cost%20a%20real%20world%20study.pdf. --------------------------------------------------------------------------- We also noted that the 2015 FDA safety notice \46\ provided preliminary information regarding infections associated with the use of reprocessed flexible bronchoscopes, but did not discuss or recommend the use of disposable, single-use devices in the notice. Furthermore, we noted the following concerns about studies on the prevalence of infection due to incomplete/inadequate reprocessing of reusable bronchoscopes. The studies authored by Ch[acirc]teauvieux et al.,\47\ Shimizu et al.,\48\ Travis et al.,\49\ and Mouritsen et al.\50\ have small sample sizes. Furthermore, the Barron and Kennedy,\51\ Travis et al.,\52\ and Mouritsen et al.\53\ studies used different [[Page 81734]] study designs and sampling methodologies or were performed in various clinical settings other than outpatient, which may affect the quality and reliability of the data provided in support of the applicant's assertions. We did not believe that we had sufficient information on the prevalence of infection to evaluate the applicant's substantial clinical improvement claims for the nominated device. We sought comments on the prevalence of infection due to incomplete/inadequate processing for bronchoscopes in the U.S. and whether single-use bronchoscopes reduce the infection rate in patients to identify the extent of the problem with existing technologies. --------------------------------------------------------------------------- \46\ FDA Safety Communications, Infections Associated with Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647. \47\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. (2018). Single-use flexible bronchoscopes compared with reusable bronchoscopes: Positive organizational impact but a costly solution. Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904. \48\ Shimizu, T., Okachi, S., Imai, N., Hase, T., Morise, M., Hashimoto, N., Sato, M., & Hasegawa, Y. (2020). Risk factors for pulmonary infection after diagnostic bronchoscopy in patients with lung cancer. Nagoya journal of medical science, 82(1), 69-77. https://doi.org/10.18999/nagjms.82.1.69. \49\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross- contamination rate of reusable flexible bronchoscopes: A systematic literature review and meta-analysis. Journal of Infection Prevention, 17571774231158203. \50\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El- Boghdadly, K. (2020). A systematic review and cost effectiveness analysis of reusable vs. single-use flexible bronchoscopes. Anaesthesia, 75(4), 529-540. \51\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. \52\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross- contamination rate of reusable flexible bronchoscopes: A systematic literature review and meta-analysis. Journal of Infection Prevention, 17571774231158203. \53\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El- Boghdadly, K. (2020). A systematic review and cost effectiveness analysis of reusable vs. single-use flexible bronchoscopes. Anaesthesia, 75(4), 529-540. --------------------------------------------------------------------------- The applicant provided evidence which seemed to rely on indirect inferences from other sources of data. We questioned the relevance of the 2015 FDA safety notice \54\ to the nominated device because as stated above, the guidance applies to reprocessed flexible bronchoscopes broadly, but not to disposable, single-use devices comparable to the nominated device. We expressed concern that many of the applicant's substantial clinical improvement claims rely on an assumption that inadequate reprocessing of reusable bronchoscopes is positively correlated with heightened risk of infection. We expressed concern that the applicant provided studies with small sample sizes and other limitations, as described above, as their only support. We noted that the applicant provided background information on the established reprocessing guidelines \55\ for reusable devices; however, the existence of reprocessing guidelines does not provide evidence on the prevalence of infection rates, establish a relationship between infection risk and reprocessing procedures, or substantiate that single-use disposable scopes, or the nominated device specifically, would be a substantial clinical improvement over currently available treatments. --------------------------------------------------------------------------- \54\ FDA Safety Communications, Infections Associated with Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647. \55\ FDA Guidance March 17, 2015 ``Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling: Guidance for Industry and Food and Drug Administration Staff''. --------------------------------------------------------------------------- We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the substantial clinical improvement criterion at Sec. 419.66(c)(2)(i). Comment: The applicant and several commenters responded to our concern about whether the Ambu[supreg] aScopeTM 5 Broncho HD could be distinguished from similar devices on the market and the earlier versions of the nominated device on the market sufficiently to demonstrate substantial clinical improvement and that four of the studies the applicant submitted, Ch[acirc]teauvieux et al., Barron and Kennedy, Kurman et al.,\56\ and Ofstead et al., investigated and provided data on the applicant's earlier models of the device, but did not provide comparisons to the nominated device. The applicant and commenters provided feedback that Ambu[supreg] aScope\TM\ 5 Broncho HD improves clinical applications and reduces cross-contamination compared to other single-use and reusable bronchoscopes, including its predicate device. Several commenters stated that the device can perform advanced bronchoscopy procedures, without concern for contamination, infection, and scope damage. One commenter stated that they have witnessed the usage of this bronchoscope for advanced procedures without incident, noting that it is the preferred device in their clinical practice for valve placement, rigid bronchoscopy, and all cases outside of the endoscopy suite. Another commenter noted that reusable bronchoscopes have a complex design with variable disinfection/sterilization requirements which leads to issues with reprocessing. Multiple commenters stated that single-use bronchoscopes create an assurance that a sterilized scope will be used each time, reduce the risk of patient cross-contamination in the ICUs, and allow improved patient access and room turnover compared with reusable scopes. One commenter asserted that the nominated device is superior to other devices in specific patient populations needing interventional pulmonology procedures. --------------------------------------------------------------------------- \56\ Kurman, J., Wagh, A., Benn, B., & Islam, S. (2023). A comparison of single-use bronchoscopes and reusable bronchoscopes for interventional pulmonology applications. Confidential. Ambu Inc., funded evaluation and testing. --------------------------------------------------------------------------- Commenters cited personal experience with Ambu[supreg] aScope\TM\ 5 Broncho HD, asserting that transitioning to the nominated device several months ago has eliminated iatrogenic bronchoscopy-related transmission of infection in their health care facility and Ambu[supreg] aScope\TM\ 5 Broncho HD has directly led to clinical improvement in cases of endobronchial valve insertion in their facility, as more patients can be treated with endobronchial valve insertion for bronchoscopic lung volume reduction. The applicant provided that after being commercially available for one year in Europe, the USA, Canada, Australia, New Zealand, and Japan, they observed that more than 80 percent of users have adopted the nominated device into their bronchoscopy suites for advanced procedures, including but not limited to tumor debulking, endobronchial valve placement, cryobiopsy, as well as endobronchial and transbronchial biopsies, which single-use bronchoscopes were previously unable to perform. The applicant reiterated that the device is the only single- use flexible bronchoscopy (FB) capable of performing advanced bronchoscopy as it has superior bending angles, an HD imaging chip, and is compatible with argon gas plasma coagulation, cryotherapy, and laser. The applicant also asserted that early clinical feedback suggests that the device is a viable alternative to reusable bronchoscopes due to its superior angulation range and flexibility. Further, the applicant clarified that the Kurman et al.\57\ study did provide data on the nominated device, including table providing a side- by-side comparison of the technical specs of the Ambu[supreg] aScope\TM\ 5 Broncho HD and its comparators which showed that the nominated device had better flexion and extension without tools compared to the reusable scope, the nominated device had the most degrees of flexion and extension with all accessory tools compared to other single-use scopes and the reusable scope, the nominated the device was able to reach the same anatomical location with biopsy forceps in the right-upper lobe segment, and the nominated device rated similar to the reusable scope and better than the other single-use scopes in image sharpness and near and far field resolutions. --------------------------------------------------------------------------- \57\ Ibid. --------------------------------------------------------------------------- Finally, the applicant asserted that while there are similarities between Ambu[supreg] aScope\TM\ 5 Broncho HD and the predicate devices, the Ambu[supreg] aScope\TM\ 5 Broncho HD can be distinguished from the predicate devices because its technical characteristics, such as a rotation mechanism on the handle and superior articulation, which allow it to perform more complex bronchoscopy procedures, are unique to the Ambu[supreg] aScope\TM\ 5 Broncho HD. Response: We appreciate the commenters' examples supporting the superiority of the Ambu[supreg] aScope\TM\ 5 Broncho HD. In addition, we appreciate the clarification on the Kurman et al.\58\ [[Page 81735]] study along with the table providing a side-by-side comparison of the technical specs of the Ambu[supreg] aScope\TM\ 5 Broncho HD and its comparators. After reviewing the information provided in the public comment and clarifications from the applicant on the Kurman et al.\59\ study that directly compare the nominated device with other single-use scopes, we agree with the commenters' and the applicant's statements that the device can be distinguished from similar devices on the market and the earlier versions of the nominated device on the market sufficiently to demonstrate substantial clinical improvement. --------------------------------------------------------------------------- \58\ Ibid. \59\ Ibid. --------------------------------------------------------------------------- Comment: In response to our concern that the nominated device was determined to be substantially equivalent to the earlier device that the applicant had previously legally marketed, and the FDA 510(k) summary indicated that both devices have the same technical characteristics, the applicant along with a few commenters expressed their belief that the FDA 510K term ``substantially equivalent'' does not imply the device is the same as its predicate device. Rather, the applicant asserted that the 510(k) term ``substantially equivalent'' indicates that a nominated device is as safe and effective as its predicate device. One commenter noted that as defined in 21 CFR part 807,\60\ every 510(k)-cleared medical device has been found substantially equivalent to one or more predicate devices. One commenter suggested that the regulatory substantial equivalence cannot be used to conclude the inability to demonstrate substantial clinical improvement in the context of CFR 419.66(c)(2). --------------------------------------------------------------------------- \60\ 21 CFR part 807, subpart E. --------------------------------------------------------------------------- Response: We appreciate the comments regarding the FDA 510K term ``substantially equivalent'' and the reference to 21 CFR part 807.\61\ We agree that FDA determination of substantial equivalence cannot alone be used to conclude that a device cannot to demonstrate substantial clinical improvement as required by the regulation at 42 CFR 419.66(c)(2). However, we note that the FDA 510(k) summary provided by the applicant indicated that both nominated and predicate devices share similar technological characteristics such as optical system, bending section, diameter of insertion cord and distal end, and insertion portion length. We expressed concern in the proposed rule regarding the language in the FDA 510(k) summary because we could not determine, based on the information available to us at the time, whether the Ambu[supreg] aScope\TM\ 5 Broncho HD could be distinguished from similar devices on the market and the earlier versions of the nominated device on the market sufficiently to demonstrate substantial clinical improvement. Neither could we determine exactly how the nominated device is superior to its earlier legally marketed device, as per the applicant's assertion. As noted above, after reviewing the information provided in the public comment, particularly the Kurman et al.\62\ study, we agree with the commenters' and the applicant's statements that the device can be distinguished from similar devices on the market and the earlier versions of the nominated device on the market sufficiently to demonstrate substantial clinical improvement. --------------------------------------------------------------------------- \61\ Ibid. \62\ Kurman, J., Wagh, A., Benn, B., & Islam, S. (2023). A comparison of single-use bronchoscopes and reusable bronchoscopes for interventional pulmonology applications. Confidential. Ambu Inc., funded evaluation and testing. --------------------------------------------------------------------------- Comment: In response to the concern that the applicant's self- sponsored study by Kurman et al.\63\ may not be sufficient to show improved clinical outcomes because it was conducted in the laboratory (that is, on cadaver, benchtop fixturing, and artificial plastic lung) and not in the clinical setting, the applicant asserted that the benchtop studies in this category are considered the industry standard and have been well accepted as the best way to compare single use and reusable bronchoscopes. In support of this assertion, the applicant provided six studies 64 65 66 67 68 69 as examples and indicated that there is no feasible way to accurately measure the flexion and deflection angles of a tool in vivo. Commenters supported the applicant's assertion and indicated that benchtop studies are standard and commonly utilized throughout the medical community. The applicant referenced results of one benchtop study (among the six examples referenced earlier) by Ho et al.,\70\ published prior to the device's release. The study reviewed the published evidence on the applications of single-use (SU) and reusable bronchoscopes in bronchoscopy suites and intensive care units, and concluded that the portability, immediate availability, and theoretical reduced risk of clinically relevant infections confer an advantage of using SUFB over reusable FB in certain scenarios in the bronchoscopy and intensive care units. The applicant stated that improvements in maneuverability, angle tip deflection, and image quality are critical for a broader adoption of single-use FBs in more complex procedures. --------------------------------------------------------------------------- \63\ Ibid. \64\ Liu, L., Wahidi, M., Mahmood, K., Giovacchini, C., Shofer, S., Cheng, G. (2020) Operator perception of a single-use flexible bronchoscope: comparison with current standard bronchoscopes. Respiratory care, 65(11):1655-1662. Doi: 10.4187/respcare.07574. Epub 2020 Jun 2. PMID: 32487752. \65\ Darrell, N., Grant, S., Abdurrahman, H., Matthew, N., Russell, M., et al. (2022). Operator perception of the performance of multiple single-use bronchoscopes compared to standard re-usable bronchoscope. Am J Biomed Sci & Res, 17(2). AJBSR.MS.ID: 002333, DOI: 10.34297/AJBSR.2022.17.002333. \66\ Lamb, C.R., Yavarovich, E., Kang, V. et al. (2022). Performance of a new single-use bronchoscope versus a marketed single-use comparator: a bench study. BMC Pulm Med 22, 189). Retrieved from: https://bmcpulmmed.biomedcentral.com/articles/10.1186/s12890-022-01982-4. \67\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use and reusable flexible bronchoscopes in pulmonary and critical care medicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174. \68\ Liang, Z., Zhou, G., Li, Y. et al. (2022). Evaluation of a new developed disposable and portable bronchoscopy system. BMC PulmMed 22, 136. https://doi.org/10.1186/s12890-022-01933-z. \69\ Deasy, K.F., Sweeney, A.M., Danish, H., O'Reilly, E., Ibrahim, H., Kennedy, M.P. (2023). Single use or disposable flexible bronchoscopes: bench top and preclinical comparison of currently available devices. J Intensive Care Med, 38(6):519-528. Doi:10.1177/ 08850666221148645. Epub 2023 Jan 7. PMID: 36609193; PMCID: PMC10114257. \70\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use and reusable flexible bronchoscopes in pulmonary and critical care medicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174. --------------------------------------------------------------------------- Response: We thank the commenters for their input. While we maintain our belief that data which indicates that a device demonstrates substantial clinical improvements over currently available treatments in the clinical setting where it is most likely to be used is beneficial, we recognize that obtaining such data is not always feasible. After reviewing the information provided in the public comment, including clarifications from the applicant on the Kurman et al.\71\ study, the additional six benchtop studies (as referenced above) supplied by the applicant, and the comments supporting the applicant's assertion that benchtop studies for bronchoscopes are considered to be the industry standard and have been well accepted as the best way to compare single-use and reusable bronchoscopes, we agree that the applicant's self-sponsored study by Kurman et al.\72\ is sufficient to show improved clinical outcomes. --------------------------------------------------------------------------- \71\ Kurman, J., Wagh, A., Benn, B., & Islam, S. (2023). A comparison of single-use bronchoscopes and reusable bronchoscopes for interventional pulmonology applications. Confidential. Ambu Inc., funded evaluation and testing. \72\ Ibid. --------------------------------------------------------------------------- Comment: In response to our concern that the submitted evidence of substantial clinical improvement [[Page 81736]] discussed potential adverse events from reusable bronchoscope procedures, but did not directly show any clinical improvement that resulted from the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD, the applicant reiterated that the single use nature of the Ambu[supreg] aScope\TM\ 5 Broncho HD avoids the adverse issues and risk associated with reprocessing detailed in the articles referenced in its application as there is no reprocessing or reuse of the bronchoscope. The applicant noted that, the successful Uretero 1 device pass-through application included the Bozzini et al. study which does not include the nominated device as the comparator. The applicant stated that, in the same fashion as the Uretero 1 device pass-through application, the Ambu[supreg] aScope\TM\ 5 Broncho HD application is using the transitive property to highlight that because clinical benefits can be seen with single-use endoscopes and the nominated device is single-use, the nominated device is therefore an improvement over reusable endoscopes. Another commenter referenced the CY 2023 OPPS/ASC final rule with comment period, wherein CMS approved the Uretero 1 device pass-through application and established device pass-through code HCPCS C1747 (Endoscope, single-use (that is, disposable), urinary tract, imaging/illumination device (insertable)). Specifically, the commenter pointed out that CMS stated that we agreed that the evidence demonstrating the improved patient outcomes and reduced patient risk associated with the disposable device in comparison with reusable devices represents substantial clinical improvement. This commenter suggested that this conclusion should also apply to single-use bronchoscopes as well. The commenters believed that single-use scopes reduce reprocessing-related bronchoscope infection risk, and that this risk reduction is a substantial clinical improvement. Response: We appreciate the commenters' input. As the applicant and commenter indicated, CMS approved Uretero1 \73\ for transitional pass- through payment status in the CY 2023 OPPS/ASC final rule with comment period. We note that we expressed similar concerns relating to the lack of comparative studies between the single-use Uretero1 device and other disposable devices and indicated that, while we ultimately agreed that the totality of evidence demonstrated improved patient outcomes and reduced patient risk associated with the disposable device in comparison with reusable devices represents substantial clinical improvement, it would have been helpful to see comparative studies. The applicant and the commenter seem to suggest that because we determined that the Uretero 1 device demonstrated substantial clinical improvement despite providing a study which does not include the nominated device as a comparator, that we should similarly determine that the type of evidence submitted by Ambu[supreg] aScope\TM\ 5 Broncho HD represents substantial clinical improvement. We note that we do not believe that this implied approach to application evaluation is appropriate. Rather, we continue to believe that our current process wherein we evaluate all evidence submitted for each device pass-through application as it applies to the nominated device is appropriate. Due to inherent differences in the devices themselves and the supporting documentation submitted, CMS may have different concerns as they relate to the nominated device. In addition, we are not precluded from evaluating evidence and expressing concerns regarding evidence submitted in support of an application simply because that type of evidence has been submitted in support of a previous application. While we encourage applicants to read the application summaries presented in previous OPPS/ASC rules as they can help applicants determine the types of documentation that have been submitted and assess areas of potential concern with their technology, we caution applicants not to rely solely on the presumption that previously submitted types of evidence, evaluated for a different device, either need not be submitted or need not be fully addressed as it relates to their technology. Further, we encourage applicants to submit all relevant supporting evidence with their device pass-through application to allow us to adequately evaluate and include the data in the notice of proposed rulemaking. --------------------------------------------------------------------------- \73\ In the CY 2023 OPPS/ASC final rule with comment period CMS approved Uretero1 as a new device category for transitional pass- through payment status and established HCPCS code C1747 as a new device category beginning in January 2023 (87 FR 7129 through 71934) effective January 1, 2023. --------------------------------------------------------------------------- With regard to our concern that the submitted evidence of substantial clinical improvement discussed potential adverse events from reusable bronchoscope procedures but did not directly show any clinical improvement that resulted from the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD, we indicated that it would be helpful to see published peer-reviewed comparative studies between the single-use Ambu[supreg] aScope\TM\ 5 Broncho HD device and other disposable devices. After reviewing the information provided in the public comment, specifically the 2021 FDA safety notice,\74\ the Ho et al.\75\ study that supported the increased risks associated with using reusable devices, and the Kurman et al. study which distinguished the device from similar devices on the market and the earlier versions of the nominated device on the market, we agree that the evidence demonstrates there are improved patient outcomes and reduced patient risk associated with the single-use Ambu[supreg] aScope\TM\ 5 Broncho HD device in comparison with reusable devices. --------------------------------------------------------------------------- \74\ FDA Safety Communications, Flexible Bronchoscopes and Updated Recommendations for Reprocessing: FDA Safety Communication, issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication. \75\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use and reusable flexible bronchoscopes in pulmonary and critical caremedicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174. --------------------------------------------------------------------------- Comment: In response to the concern regarding the relevance of the 2015 FDA safety notice to the nominated device, specifically that the guidance appeared to apply to reprocessed flexible bronchoscopes broadly, not to disposable, single-use devices comparable to the nominated device, and that many of the applicant's substantial clinical improvement claims rely on an assumption that inadequate reprocessing of reusable bronchoscopes is positively correlated with heightened risk of infection, the applicant submitted a 2021 FDA safety notice \76\ showing FDA's analysis of Medical Device Reports (MDRs) related to infections or device contamination associated with reusable flexible bronchoscopes from 2015-2021. The document states that between January 2010 and June 2015, the FDA received 109 MDRs related to infections or device contamination associated with reusable flexible bronchoscopes, and between July 2015 and January 2021, the FDA received 867 additional MDRs. Of the 867 reports received between July 2015 and January 2021, there were seven reports of deaths. Since 2015, the number of MDRs relevant to infection or contamination submitted to the FDA has increased from under 100 per year to between 100-200 per year. In addition, the applicant noted that FDA received at [[Page 81737]] least 226 bronchoscope-related MDRs from July 2021 to July 2023. The applicant asserted that the latest MDR numbers highlight the sustained increase of these MDRs. The applicant also noted that the MDR system is a passive surveillance system and may undercount the true number of bronchoscope infections and/or contaminations. --------------------------------------------------------------------------- \76\ FDA Safety Communications, Flexible Bronchoscopes and Updated Recommendations for Reprocessing: FDA Safety Communication, issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication. --------------------------------------------------------------------------- In reference to CMS's concern regarding the relevance of the 2015 FDA safety notice, the applicant stated that CMS determined that a similar communication (FDA advisory notice) was sufficient to demonstrate substantial clinical improvement for Uretero 1 in CY 2023. The applicant further provided that compared to ureteroscopes, which received 450 reports from 2017-2021 (from roughly 600,000 cases per year), reusable bronchoscopes received 867 from 2015-2021 (out of roughly 500,000 cases per year). The applicant asserted that given CMS' previous acceptance of FDA guidance documents as evidence of substantial clinical improvement and the increased incidents of MDRs for bronchoscopes when compared to ureteroscopes, the bronchoscope MDR data provided must also be considered sufficient evidence. A few commenters, including the applicant, pointed out that the supplemental update \77\ issued on June 25, 2021, directly addresses the omission of single-use medical devices from the FDA safety communication \78\ originally dated September 17, 2015, regarding infections associated with reprocessed flexible bronchoscopes. The commenters stated that the supplemental update urges health care providers to consider using single-use bronchoscopes in situations where there is an increased risk of spreading infection and recommends the use of sterilization instead of high-level disinfection for all flexible bronchoscope reprocessing. One commenter clarified that some reusable flexible bronchoscopes are physically incompatible with some or all sterilization methods, while others may be capable of withstanding the sterilization process, but the manufacturers have not provided a validated sterilization process in the 510(k) cleared device labeling. Another commenter stated that the single-use flexible bronchoscopes minimize the risk of patient cross-contamination and agreed with the applicant's assertation that reusable bronchoscopes frequently lead to issues of cross-contamination and infection because of complex designs and issues with reprocessing, especially for patients who are immunocompromised. --------------------------------------------------------------------------- \77\ Ibid. \78\ FDA Safety Communications, Infections Associated with Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647. --------------------------------------------------------------------------- A few commenters also provided additional data on the prevalence of inadequately reprocessed bronchoscopes posing an increased risk of remaining contaminated and cross-infecting patients with multidrug- resistant organisms. One commenter cited a recently published peer- reviewed article by Mehta and Muscarella (2020),\79\ which provides evidence both for the significance of this application and the prevalence of infection due to, among other risk factors, the inadequate reprocessing of reusable bronchoscopes. The primary objectives of the study were to investigate the risk of bronchoscopes transmitting infections of carbapenem-resistant Enterobacteriaceae (CRE) and related multidrug-resistant organisms (MDROs). This study's findings suggest that bronchoscopes may pose an under-recognized potential for transmission of CRE and related MDROs, warranting greater public awareness, enhanced preventive measures, and updated reprocessing guidance. Per the commenter, this study's data suggests that the cleaning and high-level disinfection of bronchoscopes performed in accordance with published guidelines and manufacturer instructions may not always be sufficiently effective to eliminate this risk. The study concluded that inadequate reprocessing of reusable bronchoscopes is positively correlated with heightened risk of infection. Another commenter indicated that while it is important for hospitals to improve reprocessing practices in general, a clean reusable scope will never be as clean as a sterile, single-use scope, even following the most rigorous cleaning protocols. The commenter stated that while CMS highlighted the low number of reported infections given the number of bronchoscopies that occur each year, unlike many other types of endoscopes that enter a sterile or otherwise clean anatomy (ureter), patients who need a bronchoscopy often require such procedures due to potential infection which could mask bronchoscope- mediated transmission of infectious agents. --------------------------------------------------------------------------- \79\ Mehta, A.C., Muscarella, L.F. (2020). Bronchoscope-related ``superbug'' infections. Chest, 157(2):454-469. --------------------------------------------------------------------------- Response: We appreciate the applicant's and the commenters' responses and additional evidence. We found the data contained in the updated 2021 FDA safety notice \80\ compelling. While FDA noted in the 2015 FDA safety notice submitted as part of the application that when compared to the number of bronchoscopy procedures performed in the U.S. each year this is considered a small number of MDRs, we agree with the applicant's assertion that the latest MDR numbers provided in the 2021 FDA safety notice \81\ highlight the sustained increase of these MDRs. While we acknowledge some of the data limitations, after reviewing the information provided in the public comment and the 2021 FDA safety notice,\82\ we agree with the commenters that reusable bronchoscopes present a risk of cross-infection due to contamination. We understand that despite strictly adhering to the manufacturers' recommendations for reprocessing, some bronchoscopes still show evidence of biofilms, which are a source of cross-contamination. The applicant and other commenters provided sources: Mehta and Muscarella (2020) \83\ and the 2021 FDA safety notice,\84\ that demonstrate that even ``properly'' re- processed bronchoscopes have positive microbial growth via reusable bronchoscopes which is mitigated by single-use bronchoscopes like Ambu aScopeTM 5 Broncho HD sufficiently to demonstrate substantial clinical improvement in situations where there is an increased risk of spreading infection. After consideration of the public comments received, we believe that commenters have addressed our concerns regarding whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the substantial clinical improvement criterion and that the Ambu[supreg] aScope\TM\ 5 Broncho HD represents a substantial clinical improvement over existing technologies due to compelling evidence from the applicant and other commenters as discussed above, [[Page 81738]] specifically the 2021 FDA safety notice \85\ and Ho et al.\86\ study that demonstrated the increased risks associated with using reusable devices --------------------------------------------------------------------------- \80\ FDA Safety Communications, Flexible Bronchoscopes and Updated Recommendations for Reprocessing: FDA Safety Communication, issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication. \81\ Ibid. \82\ Ibid. \83\ Mehta, A.C., Muscarella, L.F. (2020). Bronchoscope-related ``superbug'' infections. Chest, 157(2):454-469. \84\ FDA Safety Communications, Flexible Bronchoscopes and Updated Recommendations for Reprocessing: FDA Safety Communication, issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication. \85\ Ibid. \86\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use and reusable flexible bronchoscopes in pulmonary and critical caremedicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174. --------------------------------------------------------------------------- In response to the applicant's comments comparing the Uretero 1 application summary included in the CY 2023 OPPS/ASC final rule with comment period with the application summary for the nominated device included in this final rule with comment period, we note that we expressed a similar concern in the Uretero 1 application summary that the FDA advisory letter regarding ureteroscopes did not mention single- use devices and it was not clear how the recommendations in the letter supported the applicant's claims of substantial clinical improvement related to Uretero1. While we ultimately determined that evidence was sufficient to demonstrate substantial clinical improvement, we would like to reiterate that we evaluate all evidence submitted for each device pass-through application as it applies to the nominated device. While we agree that data provided regarding the increased incidents of MDRs for bronchoscopes and the nominated devices' impact of mitigating infection risk, we do not agree that CMS' previous acceptance of FDA guidance documents must be considered sufficient evidence of substantial clinical improvement for the nominated device. The ultimate determination of whether evidence demonstrates substantial clinical improvement for one application, while taken into consideration as appropriate, is not controlling on future determinations. Again, due to inherent differences in the devices themselves and the supporting documentation submitted, CMS may have different concerns as they relate to the nominated device. In addition, we are not precluded from evaluating evidence and expressing concerns regarding types of evidence submitted in support of an application simply because that type of evidence has been submitted in support of a previous application. As we stated previously, while we encourage applicants to read the application summaries presented in previous OPPS/ASC rules as they can help applicants determine the types of documentation that have been submitted and assess areas of potential concern with their technology, we caution applicants from relying solely on the presumption that previously submitted types of evidence, evaluated for a different device, either need not be submitted or need not be fully addressed as it relates to their technology. We encourage applicants to submit all relevant supporting evidence with their device pass-through application to allow us to adequately evaluate and include the data in the notice of proposed rulemaking. Comment: In response to our concern that the Ch[acirc]teauvieux et al.\87\ and Barron and Kennedy \88\ studies suggested limiting the use of single-use bronchoscope devices to specific situations (that is, after hours or emergency), immunocompromised patients, and in rare cases of preventing prior contamination in the inpatient setting, the applicant asserted that this recommendation was made due to the potential cost burdens of reusable scopes referenced in the study. The applicant further asserted that if cost was not a barrier and facilities widely adopted single-use bronchoscopes, such as the Ambu[supreg] aScope\TM\ 5 Broncho HD, the benefits of advanced bronchoscopy procedures would be more accessible. One commenter, writing in support of approval of the nominated device for pass-through payment, expressed concern that the cost of Ambu[supreg] aScope\TM\ 5 Broncho HD created a barrier to utilization, and agreed with the applicant that Ch[acirc]teauvieux et al.\89\ and Barron and Kennedy \90\ suggest limiting single-use scopes to specific case types because of cost. However, this commenter noted that studies by Maerkedahl et al., Mouritsen et al., and Kurman et al. all found that single-use scopes are economically advantageous relative to reusable scopes. This commenter stated that despite these findings, cost does admittedly remain a major barrier to broader adoption of single-use scopes. This commenter noted that improving reimbursement would help mitigate this barrier and allow more physicians to use the device for advanced bronchoscopy cases where it is now the preferred option. The applicant, in response to this comment indicated that, as this section (the substantial clinical improvement section under which the comment was submitted) is not about cost, it is not relevant to whether the Ambu[supreg] aScope\TM\ 5 Broncho HD can provide a substantial clinical improvement. --------------------------------------------------------------------------- \87\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. (2018). Single-use flexible bronchoscopes compared with reusable bronchoscopes: Positive organizational impact but a costly solution. Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904. \88\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. \89\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. (2018). Single-use flexible bronchoscopes compared with reusable bronchoscopes: Positive organizational impact but a costly solution. Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904. \90\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. --------------------------------------------------------------------------- Response: We appreciate the commenters' input. While the applicant did not provide in its application additional information about situations where use of single-use bronchoscopes would be optimal, we appreciate the insight provided from the applicant and several commenters who gave specific examples for how the device allows for advanced bronchoscopy procedures to be performed with a single-use scope, without concern for contamination, specifically for procedures that include but are not limited to: transbronchial biopsy, airway inspection for high-risk/immunocompromised patients, and procedures with high-frequency tools. While we maintain our belief that further investigation with comparators in these specified cases would more directly establish whether the device demonstrates a substantial clinical improvement over currently available treatment options in the clinical setting where it is most likely to be used, we understand that this data may not be available. We agree with the commenters that Ch[acirc]teauvieux et al.\91\ and Barron and Kennedy \92\ studies suggested limiting the use of single-use bronchoscope device to specific situations, in part, due to cost considerations. After consideration of the public comments received, we agree that the evidence demonstrates that the device is a substantial clinical improvement over currently available treatment options in the clinical setting. --------------------------------------------------------------------------- \91\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. (2018). Single-use flexible bronchoscopes compared with reusable bronchoscopes: Positive organizational impact but a costly solution. Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904. \92\ Barron, S.P., & Kennedy, M.P. (2020). Single-use (disposable) flexible bronchoscopes: the future of bronchoscopy? Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8. --------------------------------------------------------------------------- In addition, we thank the commenter for their input on how approval would impact existing barriers to broader adoption of single-use scopes. While the [[Page 81739]] applicant is correct that we do not assess cost in Sec. 419.66(c)(2), CMS recognizes the importance of addressing cost as a barrier to utilization, and as stated in section 2.a., a goal of transitional pass-through 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 address the cost of Ambu[supreg] aScope\TM\ 5 Broncho HD and the cost significance criteria below. The third criterion for establishing a device category, at Sec. 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in Sec. 419.66(d). Section 419.66(d) includes three cost significance criteria that must be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the Ambu[supreg] aScope\TM\ 5 Broncho HD would be reported with HCPCS codes listed in Table 87. BILLING CODE 4150-28-P [[Page 81740]] [GRAPHIC] [TIFF OMITTED] TR22NO23.111 [[Page 81741]] [GRAPHIC] [TIFF OMITTED] TR22NO23.112 [[Page 81742]] [GRAPHIC] [TIFF OMITTED] TR22NO23.113 BILLING CODE 4150-28-C 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. As we explained in the CY 2005 OPPS final rule with comment period (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. For our calculations, we used APC 5152, which had a CY 2022 payment rate of $383.33 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). We noted that the HCPCS code 31646 identified by the applicant had a device offset amount of $0.00 at the time the application was received. Accordingly, we are evaluating the cost significance requirements using $0.00 as the appropriate device offset amount. According to the applicant, the cost of the Ambu[supreg] aScope\TM\ 5 Broncho HD is $799.00. 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 $799.00 for the Ambu[supreg] aScope\TM\ 5 Broncho HD is 208.44 percent of the applicable APC payment amount for the service related to the category of devices of $383.33 (($799.00/ $383.33) x 100 = 208.44 percent). Therefore, we stated that we believe the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the first cost significance requirement. The second cost significance requirement, at Sec. 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). Given that there are no device-related costs in the APC payment amount, and the Ambu[supreg] aScope\TM\ 5 Broncho HD has an estimated average reasonable cost of $799.00, we stated that we believe the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the second cost significance requirement. The third cost significance requirement, at Sec. 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 $799.00 for the Ambu[supreg] aScope\TM\ 5 Broncho HD and the portion of the APC payment amount for the device of $0.00 exceeds the APC payment amount for the related service of $799.00 by 208.44 percent ((($799.00-$0.00)/$383.33) x 100 = 208.44 percent). Therefore, we stated that we believe the Ambu aScope\TM\ 5 Broncho HD meets the third cost significance requirement. We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. We did not receive any comments with regard to any of the cost significance requirements specified at Sec. 419.66(d). Based on our findings from the first, second, and third cost significant tests, we believe that the Ambu[supreg] aScopeTM 5 Broncho HD device [[Page 81743]] meets the cost significance criterion specified at Sec. 419.66(d). After consideration of the public comments we received and our review of the device pass-through application, we have determined that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the criteria for device pass-through status. We are approving this application because the documentation (namely the FDA document and additional studies) that were submitted in response to the proposed rule address our concerns and provide evidence of substantial clinical improvement that is required. Therefore, we are approving the Ambu[supreg] aScope\TM\ 5 Broncho HD for transitional pass-through payment status beginning January 1, 2024. (b) Praxis Medical CytoCore Praxis Medical, LLC submitted an application for a new device category for transitional pass-through payment status for Praxis Medical CytoCore (CytoCore) for CY 2024. Per the applicant, CytoCore is a single-use disposable biopsy instrument. Per the applicant, at the time of biopsy, the motorized CytoCore device contains gears and an internal motor that spins a minimally invasive needle to increase cellular yields in fewer passes. The applicant further explained that CytoCore is vacuum-assisted and can easily be operated using one hand. According to the applicant, the primary use is for biopsy of any suspicious thyroid nodule. The applicant stated that the CytoCore Biopsy Instrument device package includes: (1) a single CytoCore biopsy instrument, powered by an alkaline type battery; (2) three luer adaptors; (3) a 5ml syringe; and (4) an instructions for use (IFU) booklet. Per the applicant, the CytoCore is compatible with disposable needles of 22-to-25-gauge and 4- to-10-cm length that are intended for soft tissue biopsy procedures (needles are not included in the device package). The applicant further explained that only the CytoCore luer adapters and syringes provided by Praxis can be used on CytoCore and that the CytoCore luer adapters can only be used with the CytoCore Biopsy Instrument. Per the applicant, the operator of CytoCore can direct the needle and draw back the plunger with only one hand, thereby diminishing the need to move the needle in an in-and-out motion to harvest cells. As with other types of biopsies, the sample collected can help make a diagnosis or rule out conditions such as cancer. The applicant claimed that CytoCore enables the physician to collect more cellular material in fewer passes and reduce the number of repeat biopsies and surgeries resulting from inadequate cellular samples obtained using standard fine needle aspiration (FNA). According to the applicant, CytoCore is designed to collect enough DNA for pathology to definitively rule in or out cancer and inform subsequent treatment at the time of the first biopsy. Per the applicant, studies report nondiagnostic rates for biopsies to be as high as 30 to 50 percent using FNA biopsy.\93\ --------------------------------------------------------------------------- \93\ CMS made minor edits to the device description in this final rule with public comment to improve clarity. --------------------------------------------------------------------------- As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at Sec. 419.66(b)(1) through (4). With respect to the newness criterion at Sec. 419.66(b)(1), on March 31, 2020, the applicant received 510(k) clearance from FDA for CytoCore for use as a device to hold a syringe for performing a biopsy of an identified mass with one hand. We received the application for a new device category for transitional pass-through payment status for CytoCore on August 31, 2022, which is within 3 years from the date of the initial FDA marketing authorization. We invited public comments on whether CytoCore meets the newness criterion at Sec. 419.66(b)(1). We did not receive public comments regarding whether CytoCore meets the newness criterion at Sec. 419.66(b)(1). We received the application for a new device category for transitional pass-through payment status for CytoCore on August 31, 2022, which is within 3 years of the initial FDA marketing authorization on March 31, 2020, and as such, we have concluded that CytoCore meets the newness criterion. With respect to the eligibility criterion at Sec. 419.66(b)(3), the applicant did not assert whether CytoCore is integral to the service provided. According to the applicant, CytoCore is used for one patient only. Per the applicant, CytoCore comes into contact with human tissue and is surgically inserted via the syringe attached to the motorized CytoCore device. Per the applicant, CytoCore is used with a 22-to-25-gauge standard fine needle (not included in the device package), which is inserted into human tissue to collect cellular samples. The applicant stated that the fine needle is attached to CytoCore, inserted into the nodule, and cellular material is collected through the needle into the syringe. The applicant further explained that the cellular material is visible in the hub of the needle or the luer adapter. However, we noted that the motorized CytoCore device itself is not surgically implanted or inserted (either permanently or temporarily) or applied in or on a wound or other skin lesion, as required at Sec. 419.66(b)(3). Further, we noted that according to the FDA 510(k) Summary and Indication for Use, CytoCore is a device to hold a syringe for performing a biopsy of an identified mass with one hand and that the device never comes in contact with the patient. With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant did not address whether CytoCore is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets. The applicant also did not address whether CytoCore is a supply or material furnished incident to a service or whether the device is surgically implanted or inserted (either permanently or temporarily) or applied in or on a wound or other skin lesion, as required by Sec. 419.66(b)(3). However, in the CY 2000 OPPS interim final rule with comment period (65 FR 67804 and 67805), we explained how we interpret the exclusion criterion at Sec. 419.66(b)(3). We stated that we consider a device to be surgically implanted or inserted if it is surgically inserted or implanted via a natural or surgically created orifice or inserted or implanted via a surgically created incision. We also stated that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. We consider items used to create incisions, such as scalpels, electrocautery units, biopsy apparatuses, or other commonly used operating room instruments, to be supplies or capital equipment not eligible for transitional pass- through payments. We stated that we believe the function of these items is different and distinct from that of devices that are used for surgical implantation or insertion. Finally, we stated that, generally, we would expect that surgical implantation or insertion of a device occurs after the surgeon uses certain primary tools, supplies, or instruments to create the surgical path or site for implanting the device. In the CY 2006 OPPS final rule with comment period (70 FR 68516, 70 FR 68629 and 68630), we adopted as final our interpretation that the surgical insertion or implantation criterion can be met by devices that are surgically inserted or implanted via a natural or surgically created orifice, as well as those devices that are inserted or implanted via a surgically created incision. We reiterated that we maintain all of the other criteria in Sec. 419.66 of the [[Page 81744]] regulations, namely, that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. We invited public comments on whether CytoCore meets the exclusion criteria at Sec. 419.66(b)(3) and (4). Comment: The applicant asserted that CytoCore meets the eligibility requirements at Sec. 419.66(b)(3) and (4). In response to our concerns that the motorized CytoCore device itself is not surgically implanted or inserted (either permanently or temporarily) or applied in or on a wound or other skin lesion, as required at Sec. 419.66(b)(3), the applicant asserted that CytoCore is integral to the service provided for Fine Needle Aspiration (FNA) of suspicious thyroid nodules because the CytoCore motorized device is an essential component, offering precise control with a needle that is attached to the device, and CytoCore is adaptable for various lesion characteristics. Further, the applicant explained that, using ultrasound guidance, the needle is advanced through the patient's skin into the nodule, ensuring collection of adequate material. In response to our concerns that Cytocore may be considered a supply or material furnished incident to a service as described in Sec. 419.66(b)(4), the applicant stated that CytoCore does not function as a surgical tool. In support of this assertion, the applicant referenced the FDA definition of a manual surgical instrument (21 CFR 878.4800). The applicant stated that, because CytoCore is powered and non-resuable, it does not meet the definition of a ``surgical instrument'' per the FDA definition. Response: We appreciate the commenter's input regarding whether CytoCore meets the eligibility criteria at Sec. 419.66(b)(4). However, we do not believe that CytoCore meets the eligibility criteria described at Sec. 419.66(b)(4). With respect to the eligibility criterion at Sec. 419.66(b)(4), while we appreciate the assertion that CytoCore may not be defined as a ``surgical instrument'' according to the FDA definition (21 CFR 878.4800), we note that FDA and CMS utilize different definitions for many terms. In this instance, CMS has established a clear definition for a supply or material furnished incident to a service for the purposes of determining OPPS device pass-through payment eligibility. In the proposed rule, we reiterated that for the criteria at Sec. 419.66, CMS adopted the interpretation of Sec. 419.66(b)(4) in the CY 2006 OPPS final rule with comment period (70 FR 68629 and 68630). Specifically, we stated that CMS does not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. CMS considers a device to be surgically implanted or inserted if it is surgically inserted or implanted via a natural or surgically created orifice or inserted or implanted via a surgically created incision. Further, we provided that CMS considers items used to create incisions, such as scalpels, electrocautery units, biopsy apparatuses, or other commonly used operating room instruments, to be supplies or capital equipment not eligible for transitional pass-through payments. The function of these items is different and distinct from surgical implantation or insertion and CMS expects that surgical implantation or insertion of a device occurs after the surgeon uses certain primary tools, supplies, or instruments to create the surgical path or site for implanting the device. With respect to the eligibility criterion at Sec. 419.66(b)(4), based on the information we received in the application and the public comments as well as discussion of the criterion in Sec. 419.66(b)(4) that we adopted in the CY 2006 OPPS final rule with comment period (70 FR 68629 and 68630), we have determined that CytoCore is a biopsy apparatus and, as such, is a material or supply furnished incident to a service, in accordance with the device eligibility requirements in the proposed rule and, as such, does not meet the eligibility criteria at Sec. 419.66(b)(4). CytoCore does not meet the eligibility criteria to be considered a device for transitional pass-through payment. Therefore, we did not evaluate whether the product meets the other criteria required for transitional pass-through payment for devices, including whether it is described by existing or previous categories, whether it is a substantial clinical improvement, or whether it meets the cost criteria. We are not approving CytoCore for transitional pass-through payment status for CY 2024 because the product does not meet the eligibility criteria at Sec. 419.66(b)(4). We note that we received public comments with regard to the substantial clinical improvement criterion for this device, but because we have determined that the device does not meet the eligibility criteria and therefore, is not eligible for approval for transitional pass-through payment status for CY 2024, we are not summarizing comments received or making a determination on that criterion in this final rule. (c) EchoTip[supreg] Cook Medical submitted an application for a new device category for transitional pass-through payment status for the EchoTip[supreg] Insight Portosystemic Pressure Gradient Measurement System[supreg] (EchoTip[supreg]) for CY 2024. According to the applicant, EchoTip[supreg] is used in the diagnosis and management of patient populations with chronic liver diseases (CLDs), and especially with non-alcoholic fatty liver Disease (NAFLD). The applicant stated that EchoTip[supreg] directly measures pressures in the hepatic and portal venous vasculatures and is used in conjunction with an ultrasound endoscope. A curvilinear array echoendoscope is advanced to the stomach, and the portal and hepatic veins are visualized under ultrasound guidance. A 25-gauge needle (which is prepared prior to the endoscopy by attaching it to connection tubing and a disposable transducer) is advanced through the echoendoscope which then punctures the hepatic vein through the liver parenchyma, and a pressure measurement is obtained. Per the applicant, a total of three measurements are obtained, after which the needle is retracted into the echoendoscope which is then repositioned for portal vein access. The needle is then advanced to the portal vein where another set of three pressure measurements is obtained. The portosystemic pressure gradient is calculated by determining the difference between the two averaged measurements. According to the applicant, EchoTip[supreg] is a single-use, disposable device comprised of the EchoTip[supreg] Insight Needle, a connecting tube, and a Compass CT transducer. EchoTip[supreg] is supplied with a 10 ml syringe. Once assembled, EchoTip[supreg] is used with an ultrasound endoscope and directly measures pressures in the hepatic and portal venous vasculatures. The EchoTip[supreg] Insight Needle is stainless steel, has a handle and protective outer sheath, and attaches to the accessory channel of the endoscope. The polyethylene connecting tube consists of a 90 cm tube, a female luer fitting, a male luer fitting, and a stopcock. The connecting tube is used to attach the transducer to the needle handle. The stopcock is used to aid priming of the assembled components. The Compass CT transducer is a self-calibrating disposable pressure transducer with integrated digital display. EchoTip[supreg] is intended for direct measurement and monitoring of physiological pressure, [[Page 81745]] including during the infusion of fluids and therapeutic and diagnostic agents.\94\ --------------------------------------------------------------------------- \94\ CMS made minor edits to the device description in this final rule with public comment to improve clarity. --------------------------------------------------------------------------- As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at Sec. 419.66(b)(1) through (4). We invited public comment on whether EchoTip[supreg] meets the newness criterion at Sec. 419.66(b)(1). Comment: With respect to the newness criterion at Sec. 419.66(b)(1), the applicant reiterated their belief that EchoTip[supreg] meets the newness criterion. The applicant stated that the FDA granted de Novo authorization on November 20, 2019, therefore meeting the criteria at Sec. 419.66(b)(1) because the application is within 3 years of the date of the initial FDA marketing authorization on November 20, 2019. Response: We appreciate the commenter's input and agree that because we received the application for EchoTip[supreg] on June 29, 2022, which is within 3 years of FDA approval on November 20, 2019, EchoTip[supreg] meets the newness criterion. With respect to the eligibility criterion at Sec. 419.66(b)(3), the applicant stated that EchoTip[supreg] is integral to the service provided, is used for one patient only, comes in contact with human skin, and is applied in or on a wound or other skin lesion. According to the applicant, the hepatic vein and portal vein are punctured through the liver parenchyma to obtain pressure measurements. We invited public comment on whether EchoTip[supreg] meets the integral part of the service criterion at Sec. 419.66(b)(3). Comment: The applicant asserted that EchoTip[supreg] meets the eligibility requirements at Sec. 419.66(b)(3), stating that EchoTip[supreg] is a prescription, single-use device consisting of the EchoTip[supreg] Insight Needle, a connecting tube, and a Compass CT transducer that is integral to the service provided. Response: After consideration of the public comments we received, we agree that the applicant meets the eligibility criterion at Sec. 419.66(b)(3) because it is integral to the service provided, is used for one patient only, and punctures the hepatic vein and portal vein through the liver parenchyma to obtain pressure measurements. With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant claimed that EchoTip[supreg] meets the device eligibility requirements because it is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. We invited public comment on whether EchoTip[supreg] meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant asserted that EchoTip[supreg] meets the device eligibility requirements because it is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. Response: We appreciate the commenter's input. We agree with the applicant that EchoTip[supreg] meets the device eligibility requirements at Sec. 419.66(b)(4) because it is not a piece of equipment, 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. Therefore, based on the public comments we have received and our review of the application, we have determined that EchoTip[supreg] meets the eligibility criteria at Sec. 419.66(b)(4). In addition to the criteria at Sec. 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described EchoTip[supreg] as the only device authorized by the FDA with an indication to directly access and measure pressure in the hepatic and portal venous vasculatures in conjunction with an ultrasound endoscope. Per the applicant, FDA established that there is no recognized predicate product, or other similar approved device with a similar mechanism of action. Per the applicant, no previous device categories for pass-through payment have encompassed EchoTip[supreg] and there are no similar device categories. We stated in the CY 2024 OPPS/ASC proposed rule that, upon review, it does not appear that there are any existing pass-through payment categories that might apply to EchoTip[supreg]. We invited public comment on whether EchoTip[supreg] meets the device category criterion at Sec. 419.66(c)(1). Comment: Regarding the eligibility criterion at Sec. 419.66(c)(1), the applicant reiterated that there is no comparable existing pass- through payment category that describes EchoTip[supreg]. Response: We appreciate the commenter's input. After consideration of the public comments we received, we continue to believe that there is not an existing pass-through payment category that describes EchoTip[supreg], and therefore, EchoTip[supreg] meets the device category eligibility criterion at Sec. 419.66(c)(1). The second criterion for establishing a device category, at Sec. 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 for the indication covered by the Breakthrough Device designation. The applicant claimed that EchoTip[supreg] represents a substantial clinical improvement over existing technologies in the diagnosis and management of chronic liver disease because: (1) Endoscopic ultra-sound-guided direct portal- systemic pressure gradient measurement (EUS-PPG)-guided measurement is clinically safer and more accurate than the current standard transjugular endovascular indirect measurement, referred to as the hepatic venous pressure gradient (HVPG); (2) EUS-PPG is technically feasible and superior to HVPG; (3) EUS-PPG has benefits in non- cirrhotic patients; and (4) EUS-PPG has utility in the evaluation of ESRD patients and kidney transplant candidacy. The applicant provided four articles specifically for the purpose of addressing the substantial clinical improvement criterion claims. The applicant also included one background article that discussed social determinants of health and disparities in liver disease.\95\ --------------------------------------------------------------------------- \95\ Kardashian, A., Wilder, J., Terrault, N. Price, J. (2021). Addressing social determinants of liver disease during the COVID-19 pandemic and beyond: A call to action. Hepatology, 73(2): 811-820. --------------------------------------------------------------------------- [[Page 81746]] In support of the first claim, the applicant submitted an article on a prospective, single-armed, single-academic center study.\96\ Patients with suspected liver disease or cirrhosis were enrolled prospectively from 2020 to 2021. EUS-PPG was measured by calculating the difference between the mean portal pressure and the mean hepatic vein pressure. PH was defined as PPG >5 mm Hg and clinically significant PH as PPG<10 mm Hg. The primary outcomes were procedural technical success rate and correlation of EUS-PPG with fibrosis stage obtained from concurrent EUS-guided liver biopsy sampling and the correlation of EUS-PPG with patients' imaging, clinical, and laboratory findings. The secondary outcome was occurrence of procedural adverse events. EUS-PPG measurement was successful in 23 patients, leading to a technical success rate of 96 percent. The authors reported that there was no statistically significant correlation between the fibrosis stage on histology and measured PPG (P=.559). According to the authors, this did not change after excluding three patients without established chronic liver disease from the analysis. The authors reported that one patient experienced a mild adverse event with postprocedural abdominal pain resulting in an emergency department visit. The authors also reported that five patients (28 percent) received oral acetaminophen in the post anesthesia care unit for mild abdominal pain after the procedure, which resolved in all cases before discharge without the need for further pharmacotherapy. --------------------------------------------------------------------------- \96\ Hajifathalian, K., Westerveld, D., Kaplan, A. et al. (2022). Simultaneous EUS-guided portosystemic pressure measurement and liver biopsy sampling correlate with clinically meaningful outcomes. Gastrointestinal endoscopy 95(4): 703-710. --------------------------------------------------------------------------- In support of its second claim, the applicant submitted a single- center retrospective study on patients with various CLDs undergoing EUS-PPG and EUS-guided liver biopsy (EUS-bx) to assess correlation with histological hepatic fibrosis stage and various clinical, laboratory, endoscopic and imaging variables indicative of advanced liver disease.\97\ Cases with EUS-PPG were identified at the University of California Irvine, a tertiary endoscopy center, between January 2014 and March 2020. Three different ways of evaluating the EUS-PPG outcomes were assessed: (1) success rate of the EUS-PPG measurement; (2) performance; and (3) safety profile. The primary outcome evaluated was the association between EUS-PPG and the presence of histologic liver fibrosis, stage >= 3. EUS-PPG procedures were successfully completed in all 64 cases. On multivariate analysis, EUS-PPG >= 5 mmHg was significantly associated with fibrosis stage >= 3 on EUG-liver biopsy (LR 27.0, 95 percent CI = 1.653-360.597, p = 0.004), independent from C-cirrhosis, clinical portal hypertension, thrombocytopenia, splenomegaly, aspartate aminotransferase to platelet ration index score > 2, and fibrosis-4 score > 3.25. There were six complications in total, including abdominal pain (n = 3) and sore throat (n = 3). The authors reported that there were no subjects who had post-EUS-PPG emergency room (ER) visits or hospital admissions. --------------------------------------------------------------------------- \97\ Choi, A., Chang, K., Samaransena, J. et al. (2022). Endoscopic ultrasound-guided porto-systemic pressure gradient measurement correlates with histological hepatic fibrosis. Digestive Diseases and Sciences. https://doi.org/10.1007/s10620-022-07418-7. --------------------------------------------------------------------------- In support of its third claim, the applicant submitted a review of endoscopic ultrasound guided interventions. The article \98\ discussed the diagnosis and treatment of portal hypertension and treatment of gastric varices (GV) and compared liver biopsy, HVPG, and EUS-PPG. With respect to the utility of HVPG, the authors explained that in the absence of fibrosis/nodules (that is, cirrhosis) the pressure equalizes throughout the interconnected sinusoidal network, and results in minimal gradient (that is, normal; up to 4 mmHg). Thus, according to the authors, HVPG does not provide useful information regarding prehepatic or presinusoidal portal hypertension (PH) (that is, non- cirrhotic causes of PH). In comparison, EUS-guided portal pressure gradient (PPG) measurements employ a direct sampling technique. Thus, the study authors found direct measurement of the portal vein pressure could be considered the gold standard because it is not an estimate of sinusoidal pressure as is HVPG. The difference in the mean measurement of these pressures is termed the PPG which is analogous to the HVPG, with the caveat that direct portal vein measurement also allows for the assessment of prehepatic/presinusoidal PH; a limitation of the transjugular approach. The study authors cited a study by Huang et al.\99\ that used a porcine animal model with a novel EUS-guided system which included a manometer attached to a 25-gauge fine needle aspiration (FNA) needle for directly measuring pressures in the hepatic and portal veins. The purpose of this animal study was to assess clinical feasibility and assess correlation with the standard of care: HVPG measurement through transjugular approach. The study authors further cited a pilot study involving 28 patients between the age of 18-75 years with a history of liver disease or suspected cirrhosis that underwent EUS-PPG measurements using the technique and equipment in the animal study. The portal vein and hepatic vein were targeted via a transgastric-transduodenal approach (inferior vena cava (IVC) was substituted for hepatic vein when not technically feasible). The technical success rate of EUS-PPG measurement was 100 percent without any adverse events. The study authors concluded that EUS-PPG measurement was a safe and feasible alternative to HVPG measurement. --------------------------------------------------------------------------- \98\ Rudnick, S., Conway, J., Russo, M. (2021). Current state of endohepatology: Diagnosis and treatment of portal hypertension and its complications with endoscopic ultrasound. World Journal of Hepatology, 13(8): 887-895. \99\ Huang, J.Y., Samarasena, J.B., Tsujino, T., Chang, K.J. (2016). EUS-guided portal pressure gradient measurement with a novel 25-gauge needle device versus standard transjugular approach: A comparison animal study. Gastrointest Endosc, 84: 358-362 [PMID: 26945557 DOI: 10.1016/j.gie.2016.02.032]. --------------------------------------------------------------------------- In support of its fourth claim, the applicant submitted a letter in which the author described a retrospective, single-center study to determine feasibility, safety, and utility of EUS-PPG using EUS-liver biopsy as comparison in patients with end stage renal disease (ESRD) and suspected portal hypertension.\100\ According to the letter author, the purpose of the study was to investigate the use of EUS-PPG to assess pressure and the recommendation to decide between kidney transplant (KT) or combined liver KT. According to the letter author, the study suggested that new endoscopic and EUS findings were discovered with successful/reproducible EUS-PPG in 10 out of 11 (91 percent) subjects. The author stated there were no significant adverse events such as bleeding related to venous punctures, transfusions, or EUS-PPG-related hospitalizations. The author referenced conclusions from the study citing the need for further studies correlating EUS-PPG with wedged hepatic vein pressure gradient (WHVPG), assessing patient experience, and analyzing cost/benefit of one-stop versus piecemeal procedures. It is also noted in the letter that WHVPG may not always be feasible in ESRD patients due to catheter-related suprapubic thromboses. We noted that [[Page 81747]] this source did not include the original retrospective study, only a letter referencing it and highlighting its potential value to further research. --------------------------------------------------------------------------- \100\ Rubin, R, Mehta, M., Rossi, A., Joeslon, D., Shrestha, R. (2021). Letter to the Editor: Endoscopic ultrasound guided portal- systemic pressure gradient measurement to determine candidacy for kidney transplant alone versus combined liver kidney transplant in patients with advanced fibrosis or cirrhosis. Transplant International 2021(34): 2903-2904. --------------------------------------------------------------------------- Based on the evidence submitted with the application, we noted the following concerns: a lack of direct comparison of EUS-PPG with HVPG and non-invasive methods, a lack of consistent correlation with liver biopsy, the reliance on non-peer reviewed studies, and small sample sizes. In the first two claims, the applicant asserted EUS-PPG is clinically safer and more accurate than HVPG and technically superior to HVPG. However, the applicant did not directly compare EUS-PPG and HVPG. The Hajifathalian et al. study,\101\ which was submitted in support of the first claim, stated EUS-PPG offers an alternative and potentially superior methodology to measure PPG regardless of liver disease etiology, without showing evidence of a direct comparison between EUS-PPG and HVPG. The Choi et al. study,\102\ which was submitted in support of the second claim, directly compared EUS-PPG with EUS-liver biopsy, but it did not compare EUS-PPG with HVPG. The authors cited the lack of direct comparison between EUS-PPG and HVPG as a limitation in the study. Further these two studies had small sample sizes and were conducted at a single site; the Hajifathalian et al. study included 24 patients while the Choi et al. study included 64 patients. --------------------------------------------------------------------------- \101\ Hajifathalian, K., Westerveld, D., Kaplan, A. et al. (2022). Simultaneous EUS-guided portosystemic pressure measurement and liver biopsy sampling correlate with clinically meaningful outcomes. Gastrointestinal Endoscopy 95(4): 703-710. \102\ Choi, A., Chang, K., Samaransena, J. et al. (2022). Endoscopic ultrasound-guided porto-systemic pressure gradient measurement correlates with histological hepatic fibrosis. Digestive Diseases and Sciences. P.7. https://doi.org/10.1007/s10620-022-07418-7. --------------------------------------------------------------------------- In addition, we noted that the Hajifathalian et al. study results did not demonstrate correlation with fibrosis stage obtained from concurrent EUS-guided liver biopsy sampling. According to the authors, there was no statistically significant correlation between the fibrosis stage on histology and measured PPG (P=.559). We expressed concern that the lack of correlation would not support the claim that EUS-guided PPG measurement is more accurate than the current method using an indirect measurement with the use of HVPG. In support of its fourth claim, we noted that the applicant relied on a letter to the editor that provides a study description rather than submitting the study directly as evidence for its claim.\103\ In the enclosed letter, the author also noted that future studies are needed to correlate EUS-PPG with WHVPG. Lastly, the article the applicant provided in support of social determinants of health and disparities did not directly discuss the device. Additional supporting evidence, preferably published peer-reviewed clinical trials that show improved clinical outcomes would help with our assessment of whether EchoTip[supreg] demonstrates substantial clinical improvement over existing technologies. --------------------------------------------------------------------------- \103\ Rubin, R, Mehta, M., Rossi, A., Joeslon, D., Shrestha, R. (2021). Letter to the Editor: Endoscopic ultrasound guided portal- systemic pressure gradient measurement to determine candidacy for kidney transplant alone versus combined liver kidney transplant in patients with advanced fibrosis or cirrhosis. Transplant International 2021(34): 2903-2904. --------------------------------------------------------------------------- We invited public comment on whether EchoTip[supreg] meets the substantial clinical improvement criterion at Sec. 419.66(c)(2)(i). Comment: In response to our concern that the applicant has not demonstrated the endoscopic ultra-sound-guided direct portal-systemic pressure gradient measurement (EUS-PPG) is clinically safer and more accurate than hepatic venous pressure gradient (HVPG) and technically superior to HVPG without directly comparing EUS-PPG and HVPG, we received comments from the applicant reiterating that the Huang et al.\104\ studies compared EchoTip[supreg] direct EUS-PPG with the indirect HVPG method in a swine model using rapid dextran infusion to create transient portal hypertension and confirmed EchoTip[supreg] direct EUS-PPG matches pressures measured using a transjugular balloon catheter. The applicant asserted that the findings comparing preoperative EchoTip[supreg] direct EUS-PPG with HVPG in patients with cirrhosis or suspected cirrhosis undergoing abdominal surgery showed results that match findings from literature substantiating that direct portal vein pressures (PVP) correlate to the indirect Wedged Hepatic Vein Pressures (WHVP). The applicant commented that an additional finding was that patients preferred the EchoTip[supreg] procedure to the transjugular HVPG. --------------------------------------------------------------------------- \104\ Huang, J.Y., Samarasena, J.B., Tsujino, T., et al. (2016). EUS-guided portal pressure gradient measurement with a novel 25- gauge needle device versus standard transjugular approach: a comparison animal study. Gastrointest Endosc 84(2); 358-362. --------------------------------------------------------------------------- The applicant further summarized multiple historical documents from the 1950s,105 106 1970s,107 108 109 1980s,\110\ and early 2000s 111 112 demonstrating the limitations of HVPG especially in diabetic patients. The applicant, through these historical studies, asserted that it has been well established that direct measurement of portal venous pressure correlates with indirect measurement of portal pressure using WHVP, and that the HVPG determined using either direct PVP or indirect WHVP correlate with one another in patients with sinusoidal portal hypertension. --------------------------------------------------------------------------- \105\ Meyers, J.D., Taylor, J.W. (1951). An estimation of portal venous pressure by occlusive catheterization on a hepatic venule. J Clin Invest 30: 662. \106\ Taylor, J.W., Myers, J.D. (1956). Occlusive hepatic venous catheterization in the study of normal liver, cirrhosis of the liver, and noncirrhotic portal hypertension. Circulation 13:368-379. \107\ Reynolds, T.B., Ito, S., Iwatsuki, S. (1970). Measurement of portal pressure and its clinical application. Am J Med 49: 649- 657. \108\ Grozmann, R.J., Glickmann, M., Blei, A., et al. (1979). Wedged and free hepatic venous pressure measured with a balloon catheter. Gastroenterology 77: 253-258. \109\ Viallet, A., Joly, J.G., Marleau, D., Lavoie, P. (1970). Comparison of free portal venous pressure and wedged hepatic venous pressure in patients with cirrhosis of the liver. Gastroenterology, 59:372-5. \110\ Marleau, D., Cote, J., et al. (1985). Presinusoidal portal hypertension in nonalcoholic cirrhosis. Hepatology, 5: 415-8. \111\ Keiding, S., Vilstrup, H. (2002). Intrahepatic heterogeneity of hepatic venous pressure gradient in human cirrhosis. Scand J Gastroenterol, 37: 960-4. \112\ Thalheimer, U., Leandro, G., Samonakis, D.N., et.al. (2005). Assessment of the agreement between wedge hepatic vein pressure and portal vein pressure in cirrhotic patients. Digestive and Liver Disease, 37:601-608. --------------------------------------------------------------------------- The applicant asserted that direct measurement with EchoTip[supreg] addresses known limitations of the transjugular HVPG and non-invasive assessment. The applicant asserted HVPG with the indirect method can provide erroneous results. According to the applicant, Tandon et al. has shown good interobserver agreement between appropriately performed transjugular HVPG, but that adherence to specific techniques is critical for accurate measurement.\113\ However, because of the variety of complicated portal hemodynamics and because the procedure is so complicated, the HVPG may not always reflect the substantial severity of portal hypertension in over 16 percent of patients with sinusoidal portal hypertension. The applicant also submitted preliminary findings from the Lim, et al. study comparing preoperative EchoTip[supreg] direct EUS-PPG with HVPG [[Page 81748]] in patients with cirrhosis or suspected cirrhosis undergoing abdominal surgery. The applicant stated that the study showed the median pressure gradient was similar between the EUS-PPG measurements and transjugular HVPG measurements, with a high correlation coefficient between the two techniques (r = 0.972; P = 0.006). The applicant stated that while only six patients were included, the results match findings from the considerable literature substantiating that direct portal vein pressures (PVP) correlate to the indirect Wedged Hepatic Vein Pressures (WHVP). The applicant stated that an additional finding was that patients preferred the EchoTip[supreg] procedure to the transjugular HVPG. --------------------------------------------------------------------------- \113\ Tandon, P., Ripoll, C., Assis, D., et. al. (2016). The interpretation of hepatic venous pressure gradient tracings-- excellent interobserver agreement unrelated to experience. Liver Int, 36(8): 1160-6. --------------------------------------------------------------------------- Response: We thank the applicant for their comments. However, we maintain the concerns we articulated in the proposed rule. While we agree that the limitations of HVPG for obtaining clinical information are well established, the additional literature provided does not address our concern about the lack of data comparing EUS-PPG to HVPG. The additional literature is based on patient data that is several decades out of date that may not be comparable to more recent patient data or clinical practices and does not rely on direct comparison between HVPG and other measurements, and rather only cites the limitations of HVPG in certain patient populations. The applicant restated its references to the Huang, et al. study, which offers the only direct comparison between EchoTip[supreg] and HVPG and provided new references to the Lim et al. study, in which the human patient model only included six study participants. We do not agree that data from animal studies is sufficient to extrapolate to human populations for the purposes of demonstrating substantial clinical improvement. Furthermore, we cited concerns about small sample sizes specifically in the Hajifathalian et al. and the Choi et al. studies, which included 24 and 64 patients respectively, while the applicant's more recently submitted data in the Lim et al. study includes even fewer patients. Comment: In response to our concern that the Hajifathalian et al. study results did not achieve correlation with fibrosis stage obtained from concurrent EUS-guided liver biopsy sampling, the applicant asserted that the lack of correlation was due to a small heterogenous sample, but offered that the authors noted good correlation in true negatives and true positives. The applicant further asserted that direct comparison between EchoTip[supreg] PPG and HVPG and concurrent liver biopsy during the same encounter could only be accomplished in a highly specialized and controlled setting due to the need for simultaneous endoscopic ultrasound and transjugular catheterization. The applicant reiterated that in the Choi, et al. study included in their application, EUS-PPG was significantly associated with fibrosis stage >= 3 on EUG-liver biopsy (LR 27.0, 95 percent CI = 1.653-360.597, p = 0.004).\114\ --------------------------------------------------------------------------- \114\ Choi, A., Chang, K., Samaransena, J. et al. (2022). Endoscopic ultrasound-guided porto-systemic pressure gradient measurement correlates with histological hepatic fibrosis. Digestive Diseases and Sciences. https://doi.org/10.1007/s10620-022-07418-7. --------------------------------------------------------------------------- Response: We thank the applicant for their comments and the additional context. However, we maintain the concerns we articulated in the proposed rule, specifically, as indicated by the applicant, that the Hajifathalian et al. study is too small to show significant clinical improvement. In addition, the comments do not address our earlier concerns with the Hajifathalian et al. and Choi et al. studies regarding the lack of direct comparison between HVPG and EUS-PPG. Comment: In response to our concern that supporting evidence, preferably published peer-reviewed clinical trials, that show improved clinical outcomes would help inform our assessment of whether EchoTip[supreg] demonstrates substantial clinical improvement over existing technologies, the applicant submitted comments stating that the goal for both the referring physician and general gastroenterologist is to identify patients truly in need of specialized care from the hepatology specialist. The applicant stated that most gastroenterology practices have access to interventional gastroenterologists who can perform the EchoTip[supreg] procedure and can identify patients who need to be referred to the appropriate practitioner for intervention to manage their disease. In addition, EchoTip[supreg] fits into existing workflow in the endoscopy suite and eliminates the concerns with the high false positive rates found with non-invasive tests such as transient elastography and various risk score calculations. The applicant stated that therefore, EchoTip[supreg] does meet the criterion for substantial clinical improvement by offering an efficient way to identify patients needing specialty hepatology care, overcomes the issues with the traditional transjugular HVPG in the population with metabolic associated steatohepatitis (MASH) and metabolic dysfunction-associated steatotic liver disease (MASLD), and prevents misclassification of disease severity with non-invasive tests. In support of the claim that direct portal vein pressure measurement is more accurate for determining the presence of portal hypertension in certain cases, the applicant submitted additional literature on the use of EchoTip[supreg] in clinical care. The applicant discussed the Jirapinyo et al. study,\115\ in which the author found a significant reduction in PPG, with 79 percent of patients experiencing a reduction of over 20 percent within 6 months after use of EchoTip[supreg] during the endoscopic gastric plication (EGP) procedure. The applicant also referenced a case study in which EchoTip[supreg] was used to clear a patient for a successful EGP after previous endoscopic findings showed esophageal varicosities.\116\ The applicant also asserted that EchoTip[supreg] can be used by gastroenterologists, in addition to hepatology specialists who may be less accessible. --------------------------------------------------------------------------- \115\ Jirapinyo, P., Thompson, C., Garcia-Tsao, L., et al. (2023). Endoscopic gastric plication reduces portosystemic pressure gradients in patients with nafld and compensated advanced chronic liver disease. Endoscopy. DOI: 10.1055/a-2146-8857. \116\ Krishnan, A., Shah-Khan, S.M., Hadi, Y., et al. (2023). Convergence of endobariatrics and endohepatology for evaluation and treatment of obesity and nonalcoholic fatty liver disease. Endoscopy, 55: E841-E843. DOI 10.1055/a-2094-9794. --------------------------------------------------------------------------- Response: We thank the applicant for their comments and additional literature. However, while the literature discusses the limitations of HVPG and the need for direct measurement, it did not provide peer- reviewed literature on whether EchoTip[supreg] improves clinical outcomes in comparison to HVPG. In addition, while the applicant referenced the Jirapinyo et al. study and a case study to show a significant reduction in PPG associated with a reduction in the risks of variceal bleeding and death, the full studies were not included with the submitted comments. We understand the applicant claims EchoTip[supreg] may be more readily available in settings where hepatologists are not easily accessible, however, the applicant has not addressed our concern as to whether EchoTip[supreg] direct EUS-PPG is a substantial clinical improvement over HVPG. Comment: Several commenters stated support for EchoTip[supreg]'s eligibility for transitional pass-through status, stating that EchoTip[supreg] is helpful in the measurement of portal hypertension and diagnosis of multiple conditions related to elevated pressures of the liver. One commenter asserted EchoTip[supreg] meets substantial clinical improvement because EchoTip[supreg] identifies patients that need intensive hepatology care [[Page 81749]] based on the gold standard of portal pressure measurement. According to the commenter, it offers a solution to the inaccuracies in the current standard of care (transjugular hepatic venous pressure gradient (HVPG)) in patients who have pre-sinusoidal conditions, such as nonalcoholic steatohepatitis (NASH) and nonalcoholic fatty liver disease (NAFLD). The commenter also asserted EchoTip[supreg] improves patient safety by eliminating radiation exposure risks with HVPG. A few commenters stated EchoTip[supreg] allows for a single procedure in a single setting compared to other clinical options that might require multiple visits across multiple specialties. In addition, a few commenters stated their patients preferred EchoTip[supreg] to other procedures. One commenter stated using EchoTip[supreg] was particularly useful for patients with morbid obesity where other options may not be available or as accurate, further stating that in such cases PPG measurement has been invaluable because it has given very good and accurate clinical information that could not be obtained from other means such as CT scan, fibroscan, etc. The commenter also stated that EchoTip[supreg] has significant clinical value because it obviates the need for patient to go to two separate procedures--HVPG measurement and then a separate session to get a percutaneous liver biopsy. One commenter stated that EchoTip[supreg] has been very beneficial by differentiating patients that have cirrhosis as a new diagnosis and those that were mislabeled, leading to life-changing consequences. One commenter stated that EchoTip[supreg] allows them to determine which patients with liver disease are safe to undergo surgery. Another commenter stated that EchoTip[supreg] has a unique yet intuitive design that offers the capability to accurately measure portal pressures and commented that a distinctive feature is its echogenic tip. The commenter opined that this aspect of the device dramatically enhances procedural accuracy, ensuring that the needle tip is correctly positioned within the desired vein each time. The commenter stated that additionally, the use of a 25-gauge needle simplifies access to both the portal and hepatic veins, minimizing tissue disruption and elevating the overall patient experience. The commenter further praised the device's compact design, and integration of a display with the system's self-calibrating transducer which provides clear, real-time pressure readings to aid in making informed clinical decisions. The commenter concluded that the device has significantly enhanced diagnostic precision for cases indicating portal hypertension, thereby assisting their team in treatment planning and improved patient outcomes. Response: We thank the commenters for their responses. We appreciate that EchoTip[supreg] has changed the way some physicians practice, but due to the concerns stated above concerning small sample size and a lack of peer-reviewed direct comparison between EchoTip[supreg] and HVPG, we do not believe there is enough data to support the applicant's claims about significant clinical improvement over existing methods for measurement of portal gradient pressures. Further, despite the prognostic information measurement of portal gradient pressure provides, given all other current and evolving non- invasive technologies, it remains unclear whether obtaining this measurement is the standard of care in the management of patients with CLD. As noted by Rudnick et al., with the exception of intrahepatic portosystemic shunts and trans-jugular liver biopsies, HVPG measurements are not routinely obtained.\117\ Additionally, we were not provided any literature to support the claim that EchoTip[supreg] eliminates radiation exposure risks with HVPG. --------------------------------------------------------------------------- \117\ Rudnick, S., Conway, J., Russo, M. (2021). Current state of endohepatology: Diagnosis and treatment of portal hypertension and its complications with endoscopic ultrasound. World Journal of Hepatology, 13(8): 887-895. --------------------------------------------------------------------------- After consideration of the public comments we received, we are not approving EchoTip[supreg] for transitional pass-through payment status in CY 2024 because the technology does not meet the substantial clinical improvement criterion at Sec. 419.66(c)(2)(i). Because we have determined that EchoTip[supreg] does not meet the substantial clinical improvement criterion, we are not evaluating whether the device meets the cost criterion. We note that we received public comments with regard to the cost criteria for EchoTip[supreg], but because we have determined that the device does not meet the substantial clinical improvement eligibility criterion and therefore, is not eligible for approval for transitional pass-through payment status for CY 2024, we are not summarizing comments received or making a determination on those criteria in this final rule. (d) FLEX Vessel PrepTM System Venture Med Group, Inc. submitted an application for a new device category for transitional pass-through payment status for FLEX Vessel PrepTM System (FLEX VPTM) for CY 2024. Per the applicant, FLEX VPTM is an endovascular, over-the-wire, retractable, sheathed catheter with a three-strut treatment element at the distal tip used to help resolve stenoses occluding vascular access in patients with End-Stage Renal Disease (ESRD) on hemodialysis. According to the applicant, FLEX VPTM is used with percutaneous transluminal angioplasty (PTA) catheters to facilitate dilation of stenoses and for the treatment of in-stent restenosis of balloon expandable and self-expanding stents in the peripheral vasculature. The applicant asserted that FLEX VPTM consists of three integrated components: (1) control handle, which includes the flush and guidewire ports and sheath and treatment element actuators; (2) catheter shaft; and (3) treatment element, which includes three proximally mounted micro-surgical blades on protective skids. The struts are radially opposed, and the proximal portion of each strut includes a micro-surgical blade. A radiopaque marker is located distally to assist in the positioning of the catheter. According to the applicant, when deployed, FLEX VPTM's struts independently engage with neointimal hyperplastic stenoses occluding an arteriovenous fistula or graft used for hemodialysis. As the device is pulled back through the lesion, the blades create three continuous, parallel micro-incisions, approximately 250 microns in depth, along the lesion's entire length. The applicant provided that this is a non-balloon-based device where the struts exert a consistent force of approximately one atmosphere on the vessel wall. Per the applicant, additional micro-incisions may be created by using several passes of the device. According to the applicant, the device breaks the lesion surface to facilitate the effectiveness of a percutaneous transluminal balloon angioplasty, which immediately follows use of the device in restoring patency to the vascular access. The applicant asserted that the micro-incisions improve acute luminal gain and vessel compliance by releasing circumferential tension in the lesion. The applicant asserted that this preparation could help reduce vessel trauma and complications (including severe dissection and need for a bail-out stent) and the need for high pressure balloons (which risk barotrauma). Per the applicant, the interventionalist advances FLEX VPTM past the lesion, then unsheathes and expands the treatment element and slowly draws the catheter back, allowing each micro-surgical blade to simultaneously and independently engage with the lesion. [[Page 81750]] This step produces three continuous, parallel micro-incisions along the lesion's length. According to the applicant, this process may be repeated several times; once the lesion is crossed on the first pass, the treatment element is re-sheathed, advanced again through the lesion, and rotated approximately 30 to 90 degrees. The treatment element is then re-deployed and the process is repeated.\118\ --------------------------------------------------------------------------- \118\ CMS made minor edits to the device description in this final rule with public comment to improve clarity. --------------------------------------------------------------------------- As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at Sec. 419.66(b)(1) through (4). With respect to the newness criterion at Sec. 419.66(b)(1), on September 11, 2020, the applicant received 510(k) clearance from FDA for FLEX VPTM for use with PTA catheters to facilitate dilation of stenoses in the femoral and popliteal arteries and treatment of obstructive lesions of native or synthetic arteriovenous dialysis fistulae. The device is also indicated for treatment of in-stent restenosis of balloon expandable and self- expanding stents in the peripheral vasculature. We received the application for a new device category for transitional pass-through payment status for FLEX VPTM on February 28, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether FLEX VPTM meets the newness criterion at Sec. 419.66(b)(1). Comment: With respect to the newness criterion at Sec. 419.66(b)(1), the applicant reiterated that FLEX VPTM received 510(k) clearance from the FDA on September 11, 2020, and that CMS received VentureMed Group's application for a new device category on February 28, 2023, which is within 3 years of the date of FDA clearance. Since CMS received the application within the required 3 years, the applicant stated that it is clear FLEX VPTM meets the newness criterion. Response: We appreciate the applicant's input and agree that because we received the application for FLEX VPTM on February 28, 2023, which is within 3 years of the FDA clearance date of September 11, 2020, FLEX VPTM meets the newness criterion. With respect to the eligibility criterion at Sec. 419.66(b)(3), according to the applicant, FLEX VPTM is integral to the service provided, is used for one patient only, comes in contact with human skin, and is applied through an incision (for hemodialysis patients, the incision is in the wrist or arm area). Prior to balloon angioplasty, FLEX VPTM is inserted through an incision, over an endovascular guidewire until the device is positioned distal to the lesion to be treated. We invited public comment on whether FLEX VPTM meets the integral part of the service criterion at Sec. 419.66(b)(3). Comment: With respect to the eligibility criterion at Sec. 419.66(b)(3), the applicant reiterated that FLEX VPTM is integral to the service provided, is used for one patient only, comes in contact with human skin, and is applied through an incision. Because of these attributes the applicant stated it is clear that FLEX VPTM meets the eligibility criteria at Sec. 419.66(b)(3). Response: We appreciate the applicant's input. We agree with the applicant and have determined that FLEX VPTM meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant claimed that FLEX VPTM meets the device eligibility requirements of Sec. 419.66(b)(4) because it is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. We invited public comment on whether FLEX VPTM meets the exclusion criterion at Sec. 419.66(b)(4). Comment: With respect to the exclusion criterion at Sec. 419.66(b)(4), the applicant reiterated that FLEX VPTM is not equipment, an instrument, apparatus, implement or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. Accordingly, the applicant stated it is clear that FLEX VPTM meets the exclusion criterion at Sec. 419.66(b)(4). Response: We appreciate the applicant's input. We agree with the applicant and have determined that FLEX VPTM meets the exclusion criterion at Sec. 419.66(b)(4). In addition to the criteria at Sec. 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described FLEX VPTM as an endovascular, over-the-wire, retractable, sheathed catheter with a three-strut treatment element at the distal tip used to help resolve stenoses occluding vascular access in patients with ESRD on hemodialysis. Per the applicant, no previous device categories for pass-through payment have encompassed FLEX VPTM and there are no similar device categories. Upon review, it did not appear that there are any existing pass-through payment categories that might apply to FLEX VPTM. We invited public comment on whether FLEX VPTM meets the device category criterion at Sec. 419.66(c)(1). Comment: With respect to the new device category criterion at Sec. 419.66(c)(1), the applicant reiterated that no pass-through payment categories now exist that might apply to the FLEX VPTM and, therefore, the device meets the new device category criterion at Sec. 419.66(c)(1). Response: We appreciate the applicant's input. We continue to believe that there is not an existing pass-through payment category that describes FLEX VPTM, and therefore, that FLEX VPTM meets the device category eligibility criterion at Sec. 419.66(c)(1). The second criterion for establishing a device category, at Sec. 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 for the indication covered by the Breakthrough Device designation. The applicant stated that FLEX VPTM represents a substantial clinical improvement over existing technologies by: (1) improving clinical outcomes for the hemodialysis patient population with dysfunctional arteriovenous (AV) access; and (2) reducing the rate of device-related complications. The applicant cited two studies describing the findings of a single clinical trial specifically for the purpose of addressing the substantial clinical improvement criterion. The first study presented findings six months after patients were treated with FLEX VPTM followed by balloon angioplasty (Aruny et al.),\119\ and the [[Page 81751]] second study presented findings at 12 months post-treatment with FLEX VPTM followed by balloon angioplasty (author not identified in the manuscript for the 12-month follow up).\120\ Both studies focused on results from methods used to show the durability of the treatments of blocked vascular accesses with FLEX VPTM. The trial was a prospective, observational controlled clinical trial. A total of 148 lesions or blockages were treated with FLEX VPTM prior to a PTA in 114 subjects (the population was 53.5 percent female; 65.8 percent Black or African American (B/AA)), treated at eight clinical sites. All subjects were hemodialysis patients with vascular blockages. Of the 114 subjects, 104 patients had prior treatments to correct stenoses before enrolling in the trial. A primary endpoint was anatomic success, defined as angiographic confirmation of <30 percent residual stenosis post-procedure without adverse event. Additional assessments included dialysis circuit primary patency or vascular openness, clinical success and procedural success. The trial also measured the target lesion primary patency (TLPP) and freedom from target lesion restenosis (FFTLR) to determine if there is a decreased rate of subsequent therapeutic interventions. The two studies of the single clinical trial also examined the rate of device-related complications. No serious adverse events were reported initially (Aruny et al.), or in the 12-month follow-up (author not identified in the manuscript for the 12-month follow-up). The studies looked at differences in outcomes based on race and sex and found no significant differences. Per the applicant, the results suggest that FLEX VPTM followed by angioplasty can substantially reduce the number and burden of maintenance procedures for hemodialysis patients with arteriovenous fistula (AVF), arteriovenous graft (AVG), and AV disfunctions that cause cephalic arch stenoses. --------------------------------------------------------------------------- \119\ Aruny et al. Real-world results of a novel vessel preparation device prior to balloon angioplasty for arteriovenous access repair in diverse populations on dialysis, under review, JVA, Feb. 2023. \120\ Durability of arteriovenous access repair involving vessel preparation by longitudinal micro-incisions before balloon angioplasty, unpublished manuscript (no author identified). --------------------------------------------------------------------------- In support of its first claim, that FLEX VPTM improves clinical outcomes for the hemodialysis patient population with dysfunctional AV access, the applicant asserted that FLEX VPTM decreased both the rates of therapeutic interventions and subsequent therapeutic interventions. The applicant provided the following evidence from the clinical trial and two studies. FLEX VPTM treatment prior to angioplasty benefits hemodialysis patients by improving the level of openness of blocked (or stenosed) arteriovenous access; a recurring issue that occurs because of the fistulas created to facilitate hemodialysis. The use of FLEX VPTM also allows the site with prior blockage (also known as lesions) to stay open for a longer period of time, reducing the frequency of future angioplasty procedures. The applicant discussed how the initial study (Aruny et al.), found that patients treated with FLEX VPTM prior to PTA (FLEX+PTA) had 6 months TLPP of 63.7 percent openness, versus the 15.6 percent to 50.5 percent rates of vascular openness after PTA alone, observed in other publications. This study also presented results for FFTLR, a calculation to determine an average number of days of durability of the percentage of the patency or lesion openness reported; for the overall hemodialysis population studied it was 206.7 days. The applicant also described results for patients with only AVFs or AVGs. For FLEX+PTA in AVF patients, TLPP was 70.6 percent and FFTLR was 219.7 days. For FLEX+PTA in AVG patients, TLPP was 46.6 percent and FFTLR was 173.9 days. Confirmation of reliability of the findings was shown by dialysis access circuit primary patency: 54.3 percent (AVF 54.1 percent; AVG 47.4 percent). According to the applicant, per the literature, the results of dialysis access circuit primary patency with only angioplasty performed, ranged from 0 percent to 48 percent. The applicant also presented results 12 months post-treatment (author not identified in the manuscript for the 12-month follow up) supporting the durability of the FLEX+PTA. Per the applicant, results generally accord with Aruny et al.'s 6-month results and exceed PTA-only results from the literature. Overall, TLPP was 45.7 percent (versus 62.2 percent at 6 months) and FFTLR was 250.9 days (versus literature (PTA only), 131.4 days). Per the applicant, this result suggests that compared to the durability of PTA only, FTA+PTA would result in a lower frequency of treatments to remove stenosis in hemodialysis patients overall. For AVFs, TLPP was 47.4 percent (versus 67.5 percent at 6 months); FFTLR was 258.5 days (versus literature, 156.9 days). For AVGs, TLPP was 43.8 percent (versus 52.4 percent at 6 months); FFTLR was 239.4 days (versus literature, 76.6 days). Overall, 12 months circuit primary patency was 36.5 percent (versus 54.3 percent at 6 months).\121\ --------------------------------------------------------------------------- \121\ Ibid. --------------------------------------------------------------------------- In further support of the applicant's first claim, the applicant presented results from the clinical trial comparing B/AA patients to non-B/AA patients. In support of FLEX VPTM prior to PTA improving clinical outcomes for B/AA hemodialysis patient population with dysfunctional AV access, the applicant discussed the initial Aruny et al. study, in which B/AA patients had better results with FLEX VPTM intervention than did non-B/AA patients. The B/AA cohort (65.8 percent of sample) had TLPP of 63.76 percent versus 58.8 percent for the non-B/AA cohort after treatment with FLEX+PTA. FFTLR was 207.8 days for B/AA versus 192.2 days for non-B/AA. For B/AA patients with cephalic arch lesions, TLPP was 78.6 percent versus 58.3 percent for non-B/AA. The applicant asserted that these results were achieved despite pre-existing disparities in patient's experience with AV access care. B/AA patients had more years since they started hemodialysis (p<0.01), suggesting a possibility of increased severity or complexity of lesions in the B/AA patients.\122\ The applicant also presented results 12 months post-treatment.\123\ In terms of B/AA patient outcomes comparable to the overall sample, the B/AA cohort (65.8 percent of sample) had TLPP of 45.9 percent versus 45.7 percent overall patients and FFTLR was 257.8 days for B/AA versus 250.9 days overall patients. In B/AA patients with cephalic arch lesions, TLPP was 71.8 percent versus 59.7 percent overall patients. --------------------------------------------------------------------------- \122\ Aruny et al. Real-world results of a novel vessel preparation device prior to balloon angioplasty for arteriovenous access repair in diverse populations on dialysis, under review, JVA, Feb. 2023. \123\ Durability of arteriovenous access repair involving vessel preparation by longitudinal micro-incisions before balloon angioplasty, unpublished manuscript (no author identified). --------------------------------------------------------------------------- Furthermore, in support of the applicant's first claim, the applicant provided the following evidence from the clinical trial. In support of FLEX VPTM improving clinical outcomes for a female hemodialysis patient population with dysfunctional AV access, the applicant stated that in the initial Aruny et al. study, females differed from males significantly in their pre-existing experiences with AV care. Female patients had more years since they started hemodialysis (p<0.01) and since AV access creation (p<0.01); females had more prior AV access interventions (p<0.05). According to the applicant, this potentially suggests that female [[Page 81752]] patients are more prone to complexity of lesions or recurrence of stenosis. However, no statistically significant differences in results of TLPP and FFTLR measures at 6 months post treatment were observed between females and males treated with FLX VPTM followed by PTA. Therefore, females receiving a FLEX VPTM intervention prior to PTA achieved results comparable to males, notwithstanding pre- existing disparities.\124\ --------------------------------------------------------------------------- \124\ Aruny et al. Real-world results of a novel vessel preparation device prior to balloon angioplasty for arteriovenous access repair in diverse populations on dialysis, under review, JVA, Feb. 2023. --------------------------------------------------------------------------- In further support of the applicant's first claim, the applicant explained that cephalic arch (CA) stenoses are notoriously difficult to treat effectively and have some of the worst dialysis access and frequency of recurrence results. The applicant explained that complications are also high. In this sample, the target stenosis was in the CA in 25/114 patients (21.9 percent). TLPP following FLEX+PTA at 6 months (Aruny et al.) was 70.6 percent overall patients, and 76.8 percent in the B/AA cohort. According to the applicant comparable figures in the literature ranged from 0 percent to 51.6 percent. Access dialysis circuit primary patency obtained from the literature for PTA only was 66.4 percent for CA cases.\125\ The applicant also presented results 12-month post-treatment (author not identified in the manuscript for the 12-month follow up). TLPP for these patients following FLEX+PTA at 12 months was 59.7 percent for overall patients and 71.8 percent in the B/AA cohort. According to the applicant, comparable figures in the clinical literature ranged from 0 percent to 33.9 percent and access dialysis circuit primary patency was 55.3 percent for CA cases.\126\ --------------------------------------------------------------------------- \125\ Ibid. \126\ Durability of arteriovenous access repair involving vessel preparation by longitudinal micro-incisions before balloon angioplasty, unpublished manuscript (no author identified). --------------------------------------------------------------------------- In support of the applicant's second claim, the applicant asserted that no serious adverse events were reported from the initial study (Aruny et al.). Five procedural complications and one dissection related to the FLEX VPTM device were recorded. Three dissections were associated with PTA.\127\ The applicant also presented results 12 months post-treatment (author not identified in the manuscript for the 12-month follow-up), noting that no serious adverse events were reported during 12-month follow-up. --------------------------------------------------------------------------- \127\ Aruny et al. Real-world results on a novel vessel preparation device prior to balloon angioplasty for arteriovenous access repair in diverse populations on dialysis, under review, JVA, Feb. 2023. --------------------------------------------------------------------------- According to the applicant, these findings confirm the safety record for FLEX VPTM, which is better when compared to the Journal of Vascular and Interventional Radiology (JVIR) Quality Improvement Guidelines thresholds for AVF and AVG. According to the applicant, in the literature, up to 15 percent cephalic arch lesions result in vessel rupture and about 12 percent of PTAs in B/AA patients are reported to result in major complications.\128\ --------------------------------------------------------------------------- \128\ Durability of arteriovenous access repair involving vessel preparation by longitudinal micro-incisions before balloon angioplasty, unpublished manuscript (no author identified). --------------------------------------------------------------------------- Ultimately, the applicant concluded that FLEX VPTM is safe and effective, notably in patients with AVGs and those with CA stenoses, and furthermore, despite observed differences in time since hemodialysis onset, clinical success was similar across sex and race, suggesting an opportunity to enhance health equity.\129\ The applicant also added that FLEX VPTM, when used with PTA, provides sustained clinical improvement over existing technologies by increasing the patency and time to reintervention of PTA procedures in AVFs and AVGs at 12 months (author not identified in the manuscript for the 12- month follow-up), while reducing the potential for serious complications, such as perforations and vessel rupture. Favorable results at 6 months for the B/AA cohort reported in Aruny et al.'s article were sustained in the 12 month results. Further, according to the applicant, the use of FLEX VPTM offers the prospect of improved treatment of unresponsive or difficult to treat stenosis in the cephalic arch.\130\ --------------------------------------------------------------------------- \129\ Aruny et al. Real-world results of a novel vessel preparation device prior to balloon angioplasty for arteriovenous access repair in diverse populations on dialysis, under review, JVA, Feb. 2023. \130\ Durability of arteriovenous access repair involving vessel preparation by longitudinal micro-incisions before balloon angioplasty, unpublished manuscript (no author identified). --------------------------------------------------------------------------- Based on the evidence submitted in the application, we noted the following concerns: The applicant presented two studies (Aruny et al. [a 6-month follow up], and an unpublished manuscript which did not identify an author [12-month follow up] submitted with the application that are based on a single clinical trial of 114 patients followed for 12 months. Per the applicant, the results from the 6-months follow up are not yet published, and the results from 12-months post-treatment are also unpublished and only available at the FLEX VPTM registry. Therefore, we noted that the evidence presented on benefits to patients in hemodialysis is not peer-reviewed and this may reduce the strength of the evidence presented and the opinion of peers on study quality. 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 also noted that, due to the clinical trial design, there is insufficient data on the impact of angioplasty with the drug-coated balloon option. The drug in these balloons may play a role in the improvement of patency or openness durability and additional studies to strengthen the initial observations presented by the applicant would be helpful. Lastly, we noted the applicant did not show a clear crosswalk of findings or data in terms of device-related complications (including dissection and embolectomy) observed in the trial and compared to those referenced in literature. For example, procedural complications and dissection were mentioned in the FLEX VPTM group while rupture and major complications were mentioned in the literature. The clinical trial results presented one dissection attributed to FLEX VPTM after 148 lesions were treated with FLEX VPTM plus PTA. Per the applicant, there are approximately 732,000 interventions per year in the U.S. to maintain lifesaving arteriovenous access and FLEX VPTM could potentially be used in a fraction of those; this increases the concern for frequency of complications and therefore, additional studies may be needed to strengthen the second substantial clinical improvement claim. We invited public comment on whether FLEX VPTM meets the substantial clinical improvement criterion at Sec. 419.66(c)(2)(i). Comment: All commenters addressing the substantial clinical improvement criterion offered support for approval of the FLEX VPTM application. Commenters highlighted a number of added benefits when FLEX VPTM was used prior to PTA in hemodialysis patents, including: positive outcomes for a cephalic arch and AV graft case; reduction on barotrauma associated with angioplasty; and its effectiveness and easy usability, specifically during AV interventions. A few commenters, [[Page 81753]] including the applicant, explained that reporting procedural complications was based on the Society of Interventional Radiology (SIR) typology and under this typology all complications reported in the AV registry were minor. With zero major complications reported, all commenters agreed on the safety of FLEX VPTM compared to what is reported in the peer-reviewed literature. One commenter stated that FLEX VPTM substantially reduced procedural complications for patients by lowering the need for bail-out stenting. Several commenters, including the applicant, stated that the use of FLEX VPTM prior to PTA enables a longer and lasting patency for AV procedures, thereby reducing the frequency of interventions as patients treated using the device returned for access repair less often than patients without the use of FLEX VPTM. A few commenters, including the applicant, noted the FLEX VPTM benefits for patient populations underserved and underrepresented in trials as demonstrated through the studies submitted with the application. One commenter stated that dialysis patients should have every option available that will improve clinical outcomes for their AV access and quality of care. Response: We appreciate the input provided by these commenters. We have taken this information into consideration in making our final determination of whether FLEX VPTM meets the substantial clinical improvement criterion, discussed below. Comment: To address our concerns that the evidence presented with the application regarding the benefits to patients on hemodialysis was not peer-reviewed; the applicant and a commenter noted that the data in the application is now published in three separate peer-reviewed journals.131 132 133 --------------------------------------------------------------------------- \131\ Aruny, J., et al. (2023). Longitudinal micro-incision creation prior to balloon angioplasty for treatment of arteriovenous access dysfunction in a real-world patient population: 6-month cohort analysis. Hemodialysis International 2023 Aug 17: 1-10. (Online ahead of print) https://onlinelibrary.wiley.com/doi/10.1111/hdi.13111. \132\ Aruny et al. (2023). Longitudinal micro-incision prior to balloon angioplasty for treatment of arteriovenous access dysfunction in a real-world patient population: 12-month cohort analysis. Journal of Interventional Nephrology, 6(4): 88-97. https://www.openaccessjournals.com/articles/longitudinal-microincisions-prior-to-balloon-angioplasty-for-treatment-ofarteriovenous-access-dysfunction-in-a-realworld-patient-16713.htm. \133\ Davis, O., et al. (2023). Novel device prior to balloon angioplasty for dysfunctional arteriovenous access: Analysis of a real-world registry by race and sex cohorts. Journal of Interventional Nephrology, 6(4): 158-164. https://www.openaccessjournals.com/articles/novel-device-prior-to-balloon-angioplasty-for-dysfunctional-arteriovenousaccess-analysis-of-a-realworld-registry-by-race-and-sex-16852.html. --------------------------------------------------------------------------- Response: We appreciate the applicant's and the commenter's responses to our concern regarding publication of the data presented in the application and for including the references. We agree with commenters that the published peer-reviewed clinical data shows improved clinical outcomes through the reduction in the frequency of subsequent interventions to maintain patency in hemodialysis patients with AV grafts. Comment: To address our concerns that, due to the clinical trial design, there was insufficient data on the impact of angioplasty with drug coated balloons (DCBs), as presented by the applicant, and that the drug in these balloons may play a role in the improvement of patency or openness durability, the applicant commented that DCBs are not the standard of care for AV access interventions, and that is the reason for the low number of DCB interventions captured in the FLEX VPTM Registry (also referred to as the AV Registry by commenters). Additionally, the applicant discussed the results of a meta-analysis suggesting that DCBs did not improve primary patency in target lesions at six months and 12 months when compared to conventional balloon angioplasty.\134\ A few commenters also stated that DCBs are not the standard of care relative to angioplasty with traditional balloons for AV access procedures. The applicant asserted that DCBs are not approved for use with AV grafts in the United States. In addition to the applicant, a few commenters noted that drug collated balloons (DCBs) were infrequently included in the real-world registry used on the studies presented in the application. A commenter stated that although the body of positive evidence for DCBs is growing, debate remains about their broad application to AV access procedures and suggested that FLEX VPTM may enhance the benefits of DCBs. --------------------------------------------------------------------------- \134\ Liao, M.T., et al. (2020). Drug-coated balloon versus conventional balloon angioplasty of hemodialysis arteriovenous fistula or graft: A systematic review and meta-analysis of randomized controlled trials. PloS One, 15(4): e0231463. DOI: 10.1371/jounal.pone.0231463. --------------------------------------------------------------------------- Response: We appreciate the applicant's and other commenters' responses to our concern that there is insufficient data on the impact of angioplasty with DCB. We have taken this information into consideration in making our final determination of the substantial clinical improvement criterion, discussed below. Comment: To address our concerns that the applicant did not present a clear crosswalk of findings or data in terms of device-related complications (including dissection and embolectomy) observed in the trial and compared to those referenced in the literature, the applicant asserted that specific data was collected in the AV Registry related to the following procedural complications: dissections, perforations, and embolization. The applicant stated that the data collected in the AV Registry on procedural complications would be considered minor complications in the SIR typology. One commenter agreed with the approach to use SIR typology to address complications. The applicant stated that the AV Registry data shows zero major complications for FLEX VPTM plus PTA in their studies. The applicant added that a review of recent literature found that: ``The major complication rates following PTA for failing AVFs ranged from 0 to 2.1 percent, while for the AVGs ranged from 2.1 to 6 percent. Papers with mixed AVGs and AVFs reported major complication rates of 3-5 percent.'' \135\ --------------------------------------------------------------------------- \135\ Raman, L., et al. (2023). Dialysis access maintenance: Plain balloon angioplasty. Cardiovascular Interventional Radiology, published online May 8, 2023. https://doi.org/10.1007/s00270-023-03441-x. Internal footnotes to the studies summarized are omitted in this quotation. (``The most significant complications reported are thrombosis, rupture and dissection requiring either stent graft placement or surgical revision of the fistula.'') --------------------------------------------------------------------------- Response: We appreciate the applicant's and commenter's responses to our concerns that the applicant did not present a clear crosswalk of findings or data in terms of device-related complications (including dissection and embolectomy) observed in the trial and compared to those referenced in the literature. We agree with the commenter's assertions, including the applicant, that according to SIR typology, the data on procedural complications using FLEX VPTM resulted in minor complications only. We agree with the applicant's and commenter's assertions that DCB interventions were infrequent in the AV Registry because this procedure is not the standard of care for AV interventions. We also agree with the suggestion from the applicant and the commenters that FLEX VPTM could enhance the benefits of DCBs. Finally, we agree with the applicant's and commenter's assertions that the published peer-reviewed clinical data shows improved clinical outcomes through the reduction in the frequency of subsequent interventions to maintain patency. After consideration of the [[Page 81754]] applicant's response and the public comments received, we believe that commenters have addressed our concerns regarding whether FLEX VPTM meets the substantial clinical improvement criterion and that FLEX VPTM represents a substantial clinical improvement over existing technologies. The third criterion for establishing a device category, at Sec. 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in Sec. 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that FLEX VPTM would be reported with HCPCS codes listed in Table 88. [GRAPHIC] [TIFF OMITTED] TR22NO23.114 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. As we explained in the CY 2005 OPPS final rule with comment period (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. For our calculations, we used APC 5192, which had a CY 2022 payment rate of $5,061.89 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 36902 had a device offset amount of $1,271.04 at the time the application was received.\136\ According to the applicant, the cost of FLEX VPTM is $1,995.00. --------------------------------------------------------------------------- \136\ We noted that the applicant selected a value of $1391.99 for the device offset amount. However, the value selected is inconsistent with the device offset amount related to HCPCS 36902 in APC 5192 found in Addendum P to the CY 2022 OPPS/ASC final rule with comment period, as corrected in the 2022 Correction Notification OPPS Addendum (87 FR 2060). We selected the value of $1271.04, which we believe is the accurate value. Based on our initial assessment for the proposed rule, using the device offset amount of $1271.04 would result in FLEX VPTM meeting the cost significance requirement. --------------------------------------------------------------------------- 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 $1,995.00 for FLEX VPTM is 39.41 percent of the applicable APC payment amount for the service related to the category of devices of $5,061.89 (($1,995.00/$5,061.89) x 100 = 39.41 percent). Therefore, we stated that we believe FLEX VPTM meets the first cost significance requirement. The second cost significance requirement, at Sec. 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $1,995.00 for FLEX VPTM is 156.96 percent of the cost of the device- related portion of the APC payment amount for the related service of $1,271.04 (($1,995.00/$1,271.04) x 100 = 156.96 percent). Therefore, we stated that we believe that FLEX VPTM meets the second cost significance requirement. The third cost significance requirement, at Sec. 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 $1,995.00 for FLEX VPTM and the portion of the APC payment amount for the device of $1,271.04 is 14.30 percent of the APC payment amount for the related service of $5,061.89 ((($1,995.00 - $1,271.04)/$5,061.89) x 100 = 14.30 percent). Therefore, we stated that we believed that FLEX VPTM meets the third cost significance requirement. We invited public comment on whether FLEX VPTM meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. Comment: With respect to cost significance criteria, the applicant reiterated that FLEX VPTM meets all three of the cost significance criteria. Response: We appreciate the commenter's input. Based on our findings from the first, second, and third cost significant tests, we believe that FLEX VPTM meets the cost significance criteria specified at Sec. 419.66(d). Comment: A commenter expressed concerns on how the device offset amounts are calculated and stated that CMS should calculate the device- related portion of APCs for purposes of determining transitional pass- through eligibility and the device offset using only the cost of the devices replaced by the proposed transitional pass-through device category. The commenter asserted that this approach results in adequate reimbursement to facilities. The commenter recommended that CMS [[Page 81755]] apply this methodology to FLEX VPTM if applicable. Response: We appreciate the commenter's input. As we have done 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. We have reviewed FLEX VPTM offset amounts and confirm that the device offset amount is accurate. After considering the public comments we received and consideration of the cost criterion, we have determined that FLEX VP TM meets the cost criterion for device pass-through status. After considering the public comments we received and our review of the device pass-through application, we have determined that FLEX VP TM meets the criteria for device pass-through status. Therefore, we are finalizing approval for device pass-through payment status for FLEX VP TM effective beginning January 1, 2024.

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 and 66873) applies to device-intensive procedures and is discussed in detail in section IV.B.4 of this final rule. A related device policy was the requirement that certain procedures assigned to device- intensive APCs require the reporting of a device code on the claim (80 FR 70422) and is discussed in detail in section IV.B.3 of this final rule. 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.C.1.b of this final rule 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.C.3 and IV.C.4 of this final rule. 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 interested parties that the criteria excluded some procedures that interested parties believed should qualify as device-intensive procedures. Specifically, we were persuaded by interested party 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, [[Page 81756]] 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 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 Sec. Sec. 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: ++ 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 ++ 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, 37109, 58945, and 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 few 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 [[Page 81757]] 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 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. Comment: Commenters requested that we assign device-intensive status to the following procedures: CPT code 0581T (Ablation, malignant breast tumor(s), percutaneous, cryotherapy, including imaging guidance when performed, unilateral) CPT code 31242 (Nasal/sinus endoscopy, surgical; with destruction by radiofrequency ablation, posterior nasal nerve) CPT code 52284 (Cystourethroscopy, with mechanical urethral dilation and urethral therapeutic drug delivery by drug-coated balloon catheter for urethral stricture or stenosis, male, including fluoroscopy, when performed) CPT code 53854 (Transurethral destruction of prostate tissue; by radiofrequency generated water vapor thermotherapy) 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); HCPCS code C9761 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with lithotripsy, and ureteral catheterization for steerable vacuum aspiration of the kidney, collecting system, ureter, bladder, and urethra if applicable (must use a steerable ureteral catheter) Response: Based on CY 2022 claims data available for this final rule, the procedures requested by commenters do not have device offset percentages that exceed the 30-percent threshold required for device- intensive status under the OPPS or ASC payment system and, therefore, are not eligible to be assigned device-intensive status. CPT codes 31242 and 52284 were issued after publication of the proposed rule and have an effective date of January 1, 2024. CPT code 52284 is replacing CPT code 0499T (Cystourethroscopy, with mechanical dilation and urethral therapeutic drug delivery for urethral stricture or stenosis, including fluoroscopy, when performed), which has a device offset percentage of 25.33 percent based on the most recent claims data. Since the predecessor code of CPT code 52284, CPT code 0499T, would not meet our criteria for device-intensive status, we are not accepting the commenter's recommendation to assign device-intensive status to CPT code 52284 for CY 2024. However, CPT code 31242 does not have claims data from a predecessor code that may be used to determine a device offset percentage. After reviewing the clinical description and characteristics of the procedure, we agree with commenters that CPT code 31242 meets our requirements to be assigned device-intensive status. Therefore, for CY 2024, we are assigning CPT code 31242 device- intensive with a default device offset percentage of 31 percent. Comment: Two commenters requested that we assign the device offset percentage for CPT codes 0816T (Open insertion or replacement of integrated neurostimulation system for bladder dysfunction including electrode(s) (eg, array or leadless), and pulse generator or receiver, including analysis, programming, and imaging guidance, when performed, posterior tibial nerve; subcutaneous) and 0817T (Open insertion or replacement of integrated neurostimulation system for bladder dysfunction including electrode(s) (eg, array or leadless), and pulse generator or receiver, including analysis, programming, and imaging guidance, when performed, posterior tibial nerve; subfascial) using claims data from CPT code 64590 (Insertion or replacement of peripheral, sacral, or gastric neurostimulator pulse generator or receiver, direct or inductive coupling requiring pocket creation and connection between electrode array and pulse generator or receiver) rather than using the default 31 percent device offset percentage. Commenters suggested claims data for CPT code 64590 would provide a more accurate device offset amount. Response: We are not accepting the commenters' recommendation. While we may assign device-intensive status to new procedures that have significant device costs, we generally assign the percentage of such device costs at 31 percent of total procedure costs until claims data become available. However, if there is available claims data from the predecessor code of a new procedure or claims data from a clinically similar procedure that uses the same device, our current policy allows us to use this proxy claims data to establish a device offset percentage in lieu of the default 31 percent. We do not agree that CPT code 64590 was the predecessor code for either CPT code 0816T or 0817T and believe that CPT code 64999 (Unlisted procedure, nervous system) was the CPT code previously used when reporting the procedures described by the new CPT codes 0816T and 0817T. CPT code 64999 does not exceed our device-intensive threshold under the OPPS; and, since this CPT code can be used for various types of unlisted procedures, we do not believe this procedure would be an accurate reflection of the device costs of CPT code 0816T or 0817T. Because 0816T and 0817T do not have claims data from a predecessor code or a similar code that uses the same device, we are finalizing our proposal to assign the default 31 percent device offset percentage to CPT codes 0816T and 0817T for CY 2024. Comment: Two commenters requested that we increase the device offset for CPT 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 be in alignment with CPT code 0627T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar; first level) as both procedures use the same device. [[Page 81758]] Response: We thank the commenters for their suggestion. We stated in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71941) that we did not have any claims data for CPT code 0629T to determine a device offset percentage. Under our current policy, we may assign an alternative device offset percentage if we have claims data from a clinically similar procedure code that uses the same device. We agreed with commenters to apply the device offset percentage from claims data for CPT code 0627T to CPT code 0629T for CY 2023 as the procedures are clinically similar and utilize the same device. Similarly, for CY 2024, because we do not have claims data to determine a device offset percentage for CPT code 0629T, we are accepting the commenters' recommendation and will continue to use the most recent claims data from CPT code 0627T to assign the device offset percentage for CPT code 0629T. Comment: One commenter requested that we reexamine the claims data for CPT codes 31296, 31297, and 31298 and designate them as device- intensive procedures. Response: After examining the claims data for CPT codes 31296, 31297, and 31298, we have determined that the device offset percentages for these procedures do not exceed the 30 percent device-intensive threshold. Therefore, we are not assigning device-intensive status to these procedures for CY 2024. The full listing of the final CY 2024 device-intensive procedures can be found in Addendum P to this 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 this CY 2024 OPPS/ASC final rule with comment period on our website at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps.

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 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 HCPCS code C1889 is ``Implantable/insertable device, not otherwise classified.'' In the CY 2023 OPPS/ASC final rule with comment period (87 FR 71830), we described a commenter's concern about the potentially inadequate payment rate for APC 5495 (Level 5 Intraocular Procedures) and their recommendation that we use our equitable adjustment authority to limit the potential reduction in the CY 2023 APC payment rate by applying a 10 percent cap on the reduction in relative weights for Low Volume APCs in CY 2023. While we did not accept the commenter's recommendation to limit a Low Volume APC's decline in relative weight to no more than 10 percent, we stated we would continue to monitor the costs and payment rates for procedures assigned to Low Volume APCs to determine if additional changes or refinements to our current policy are needed. In our review of claims data for CPT code 0308T (Insertion of ocular telescope prosthesis including removal of crystalline lens or intraocular lens prosthesis), we noticed unusual coding, charge, and cost data in the claims data from CY 2017, CY 2018, CY 2019, and CY 2021. Some claims did not report the correct device code--HCPCS code C1840 (Lens, intraocular (telescopic))--and such claims had substantially lower costs than claims that reported the correct device code. In particular, claims that reported the correct device code had an average device cost of $15,030.04, while claims that did not report the correct device code had an average device cost of $430.72. The vast majority of claims for CPT code 0308T in our 4-year analysis did report the correct device code; however, the limited number of claims that either reported the wrong procedure code or reported the wrong device code had an outsized impact on the APC payment rate because of the very low volume of claims for this APC. Because payment stability for this Low Volume APC relies so critically on accurate reporting of the procedure's associated costs, we believe this APC would benefit from a procedure-to-device edit--a claims processing edit that requires a certain device code to be included on the claim when hospitals report a specific procedure code. The procedures associated with the Level 5 Intraocular APC, which we proposed to reassign to a new Level 6 Intraocular APC (APC 5496) in section III.E of the CY 2024 OPPS/ASC proposed rule, describe the implantation of specific device codes: CPT code 0308T (Insertion of ocular telescope prosthesis including removal of crystalline lens or intraocular lens prosthesis) describes the implantation of device HCPCS code C1840 (Lens, intraocular (telescopic)); CPT code 0616T (Insertion of iris prosthesis, including suture fixation and repair or removal of iris, when performed; without removal of crystalline lens or intraocular lens, without insertion of intraocular lens) describes the implantation of device HCPCS code C1839 (Iris prosthesis); CPT code 0617T (Insertion of iris prosthesis, including suture fixation and repair or removal of iris, when performed; with removal of crystalline lens and insertion of intraocular lens) describes the implantation of device HCPCS code C1839 (Iris prosthesis); or 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) also describes the implantation of device HCPCS code C1839 (Iris prosthesis). [[Page 81759]] We proposed to establish a procedure-to-device edit for the four aforementioned procedures assigned to APC 5496 (Level 6 Intraocular Procedures) and require hospitals to report the correct device HCPCS codes when reporting any of the four procedures. While some interested parties have previously recommended in past rulemaking that we reestablish all of our previous procedure-to-device edits, we do not expect to extend this policy beyond the procedures assigned to APC 5496 (Level 6 Intraocular Procedures). We explained that we continue to rely on hospitals' accurate reporting and believe our current device edits policy of requiring device-intensive procedures to be subject to an additional device reporting edit has improved our ratesetting for hospital outpatient department procedures without placing an undue burden on hospitals. However, we noted that we believe this APC represents a unique situation--the APC (which was the Level 5 Intraocular APC in previous years) has been a Low Volume APC (fewer than 100 claims in a claims year) since we established our Low Volume APC policy, the procedures associated with this APC have significant procedure costs often greater than $15,000, and the procedures associated with this APC require the implantation of a high-cost intraocular device. We stated that we believe requiring a procedure-to- device edit for procedures assigned to the APC 5496 (Level 6 Intraocular Procedures), would not be administratively burdensome to hospitals given the low volume of services associated for this APC and will have a meaningful and significant impact on the payment rate for this APC and the stability of the payment rate in the future. We solicited comments on our proposal to modify our device edits policy to require a procedure-to-device edit for procedures assigned to APC 5496 (Level 6 Intraocular Procedures) for CY 2024. Comment: We received one comment in support of the proposed procedure-to-device edit for CPT code 0308T. We also received one comment in support of the proposed procedure-to-device edits for CPT codes 0616T, 0617T, and 0618T. Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal to modify our device edits policy to require a procedure-to- device edit for procedures assigned to APC 5496 (Level 6 Intraocular Procedures) for CY 2024. Comment: One commenter requested that CMS restore the device-to- procedure and procedure-to-device edits. The commenter recommended that we apply such edits to specific procedures, such as total hip arthroplasty or total knee arthroplasty procedures, and require a specific device code rather than any device code. We also received one comment requesting that we create device-to-procedure edit for HCPCS code C9761 and CPT code 0715T due to rejected claims. Response: We are not accepting the commenters' recommendations and do not believe additional device-to-procedure edits are warranted for the situations the commenters described. We are finalizing our proposal to reinstate device-to-procedure edits for procedures assigned APC 5496 (Level 6 Intraocular APC) to improve the payment structure for that APC as well as the Intraocular APC family. The high cost, low-volume nature of that APC represents a unique situation that we believe would benefit from a device-to-procedure edit and place extremely little reporting burden on providers. However, as we stated in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66794) and have reiterated in subsequent rulemaking, 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. 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 believe our current device edits policy, which requires that a device code be reported on a claim for procedures that have significant device costs, continues to accurately capture the device costs associated with device-intensive procedures and provides the necessary flexibility to hospitals to code claims accurately. Comment: One commenter suggested that there is confusion among hospitals as to whether to report a device code for certain procedures in the HCPCS C-code range and urged CMS establish a device-to-procedure edit for all C-code procedures to ensure appropriate device costs are collected. Response: We thank the commenter for the suggestion; however, we believe our current policy already addresses the commenter's concern. We are not aware of any provider confusion as to reporting device costs for certain device-intensive procedures in the HCPCS C-code range. However, if such procedures are assigned device-intensive status, then they are subject to our device edits policy; and hospitals would already be required to report a device code on the claim when billing the procedure code.

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 [[Page 81760]] 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 and 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 and 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 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 sub-regulatory 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, 86018, and 86302), we made conforming changes to our regulations at Sec. 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 for CY 2024.

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 this final rule with comment period, the term ``biological'' is used because this is the term that appears in section 1861(t) of the Act. A ``biological'' as used in this final rule with comment period 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. ``Current'' refers to those types of drugs or biologicals mentioned above that are hospital outpatient services under Medicare Part B for which transitional pass- through payment was made on the first date the hospital OPPS was implemented. Transitional pass-through payments also are provided for certain ``new'' drugs and biologicals that were not being paid for as an HOPD service as of December 31, 1996, and whose cost is ``not insignificant'' in relation to the OPPS payments for the procedures or services associated with the new drug or biological. For pass-through payment purposes, radiopharmaceuticals are included as ``drugs.'' As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug as a hospital outpatient service under Medicare Part B. Final CY 2024 pass-through drugs and biologicals and their designated APCs are assigned status indicator ``G'' in Addenda A and B to this CY 2024 OPPS/ASC final rule with comment period (which are available on the CMS website).\137\ --------------------------------------------------------------------------- \137\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through payment amount, in the case of a drug or biological, is the amount by which the amount determined under section 1842(o) of the Act for the drug or biological exceeds the portion of the otherwise applicable Medicare OPD fee schedule that the Secretary determines is associated with the drug or biological. The methodology for determining the pass- through payment amount is set forth in regulations at 42 CFR 419.64. These regulations specify that the pass-through payment equals the amount determined under section 1842(o) of the Act minus the portion of the APC payment that CMS determines is associated with the drug or biological. Section 1847A of the Act establishes the average sales price (ASP) methodology, which is used for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP methodology, as applied under the OPPS, uses several sources of data as a basis for payment, including the ASP, the wholesale acquisition cost (WAC), and the average wholesale price (AWP). In this final rule with comment period, 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: https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price. The pass-through application \138\ and review process for drugs and biologicals [[Page 81761]] is described on our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/pass-through-payment-status-new-technology-ambulatory-payment-classification-apc. --------------------------------------------------------------------------- \138\ To apply for OPPS transitional Pass-Through Payment Status and New Technology Ambulatory Payment Classification (APC), applicants complete an application that is subject to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This information collection (CMS-10008) is currently approved under OMB control number of 0938-0802 and has an expiration date of January 31, 2025. ---------------------------------------------------------------------------

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 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 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 for which pass-through payment status is ending during the calendar year is included in the quarterly OPPS Change Request transmittals.

3. Drugs and Biologicals With Expiring Pass-Through Payment Status in

CY 2023 There are 43 drugs and biologicals for which pass-through payment status expires by December 31, 2023, as listed in Table 89. These drugs and biologicals will have received OPPS pass-through payment for 3 years during the period of April 1, 2020, through December 31, 2023. In accordance with the policy finalized in CY 2017 and described earlier, pass-through payment status for drugs and biologicals 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 will be $135 for CY 2024), as discussed further in section V.B.1 of this final rule with comment period. If the estimated per day cost for the drug or biological is less than or equal to the applicable OPPS drug packaging threshold, we 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 provide separate payment at the applicable ASP methodology-based payment amount (which is generally ASP plus 6 percent), as discussed further in section V.B.2 of this final rule with comment period. BILLING CODE 4150-28-P [[Page 81762]] [GRAPHIC] [TIFF OMITTED] TR22NO23.115 [[Page 81763]] [GRAPHIC] [TIFF OMITTED] TR22NO23.116 [[Page 81764]] [GRAPHIC] [TIFF OMITTED] TR22NO23.117 BILLING CODE 4150-28-C Comment: One commenter requested CMS use its equitable adjustment authority to extend the pass-through eligibility period for three radiopharmaceuticals whose pass-through payment status will expire between September 30, 2023, and December 31, 2023. The commenter stated that if CMS does not unpackage diagnostic radiopharmaceuticals in 2024, they recommended extending pass-through status through at least CY 2024 due to the effect of the PHE on claims data used for ratesetting. This same commenter supported CMS's policy under which radiopharmaceuticals are treated as drugs that are eligible for pass-through status. This commenter additionally commended CMS for proposing to continue its policy to provide for quarterly expiration of pass-through payment status. [[Page 81765]] Response: We thank the commenter for their comment, but we continue to believe that the data collected for CY 2024 ratesetting will result in the necessary cost data being collected and incorporated into the costs for expiring pass-through drugs, biologicals, and devices into the procedure APC rate. Therefore, we believe that the claims data used in CY 2024 OPPS ratesetting for procedures including these drugs, biologicals, and devices with expiring pass-through status is sufficient and an additional extension of separate payment to mimic pass-through status is neither necessary nor appropriate. We refer readers to section IV of the CY 2023 OPPS/ASC final rule with comment period (87 FR 71887) for a full discussion of CMS's final decision not to provide any additional quarters of separate payment for any drug, biological, or device category whose pass-through payment status will expire between December 31, 2022, and December 31, 2023. We appreciate commenters' support for our policy to treat radiopharmaceuticals as drugs that are eligible for drug pass-through status and to continue quarterly expiration of pass-through status.

4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through

Payment Status Expiring in CY 2024 We proposed to end pass-through payment status in CY 2024 for 25 drugs and biologicals. These drugs and biologicals, which were initially approved for pass-through payment status between April 1, 2021, and January 1, 2022, are listed in Table 90. The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that will end by December 31, 2024, are assigned status indicator ``G'' (Pass-Through Drugs and Biologicals) in Addenda A and B to the CY 2024 OPPS/ASC proposed rule (which are available on the CMS website).\139\ The APCs and HCPCS codes for these drugs and biologicals are assigned status indicator ``G'' only for the duration of their pass-through status. --------------------------------------------------------------------------- \139\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2024 and subsequent years, we proposed to continue to pay for pass-through drugs and biologicals using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP, as applicable. This payment rate is generally ASP plus 6 percent, equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2024. We note that, under the OPD fee schedule, separately payable drugs assigned to an APC are generally payable at ASP plus 6 percent. Therefore, we proposed that a $0 pass-through payment amount would be paid for pass-through drugs and biologicals under the CY 2024 OPPS, and in subsequent years, because the difference between the amount authorized under section 1842(o) of the Act, which is generally ASP plus 6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which is also proposed to be the same payment rate, which is generally ASP plus 6 percent, is $0. We proposed that this policy and the other policies proposed in this section would apply in both CY 2024 and subsequent years as they have been our longstanding policies under the OPPS. Therefore, we explained that we do not believe the policies need to be reproposed annually and should apply for subsequent years until such time as we propose to change them. 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 a payment rate calculated using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP. We proposed that this payment rate would generally be ASP plus 6 percent for CY 2024 and subsequent years, 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 this final rule with comment period. 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 and therefore, there are associated OPD fee schedule amounts for them. We proposed to continue to update pass-through payment rates on a quarterly basis on the CMS website during CY 2024 and subsequent years 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 2024 and subsequent years, consistent with our CY 2023 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to continue 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 2024 or subsequent years, 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 generally ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we proposed to provide pass- through payment at WAC plus 3 percent (consistent with our policy in section V.B.2.a of the CY 2024 OPPS/ASC proposed rule (88 FR 49680)), the equivalent payment provided for pass-through drugs and biologicals without ASP information. Additional detail on the WAC plus 3 percent payment policy can be found in section V.B.2.a of this CY 2024 OPPS/ASC final rule with comment period. 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. We refer readers to Table 90 below for the list of drugs and biologicals with pass-through payment status expiring during CY 2024. We did not receive any public comments on this section. BILLING CODE 4150-28-P [[Page 81766]] [GRAPHIC] [TIFF OMITTED] TR22NO23.118 [[Page 81767]] [GRAPHIC] [TIFF OMITTED] TR22NO23.119 [[Page 81768]] [GRAPHIC] [TIFF OMITTED] TR22NO23.120 BILLING CODE 4150-28-C

5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through

Payment Status Continuing Through CY 2024 We proposed to continue pass-through payment status in CY 2024 for 42 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status with effective dates beginning between April 1, 2022, and October 1, 2023, are listed in Table 91. The APCs and HCPCS codes for these drugs and biologicals, which have pass- through payment status that would continue after December 31, 2024, are assigned status indicator ``G'' in Addenda A and B to this final rule with comment period (which are available on the CMS website).\140\ --------------------------------------------------------------------------- \140\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2024 and subsequent years, we proposed to continue to pay for pass-through drugs and biologicals at a payment rate based on the ASP methodology, which may be based on ASP, WAC, or AWP, but is generally ASP plus 6 percent, which is equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2024. We proposed that a $0 pass- through payment amount would be paid for pass-through drugs and biologicals that are not policy-packaged under the [[Page 81769]] CY 2024 OPPS or in subsequent years, because the difference between the amount authorized under section 1842(o) of the Act, which would generally be ASP plus 6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which would also generally be ASP plus 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 a payment rate based on the ASP methodology, which may be based on ASP, WAC, or AWP, but would generally be ASP plus 6 percent for CY 2024, minus a payment offset for any predecessor drug products contributing to the pass-through payment as described in section V.A.6 of this final rule with comment period. 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 and therefore, there are associated OPD fee schedule amounts for them. We proposed to continue to update pass-through payment rates on a quarterly basis on our website during CY 2024, and in subsequent years, 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 2024 and subsequent years, consistent with our CY 2023 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to continue 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 2024, we will continue to follow the standard ASP methodology to determine the pass-through payment rate that drugs receive under section 1842(o) of the Act, which would generally be ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we would provide pass-through payment at WAC plus 3 percent (consistent with our policy in section V.B.2.a of this final rule with comment period), the equivalent payment provided to pass- through drugs and biologicals without ASP information. Additional detail on the WAC plus 3 percent payment policy can be found in section V.B.2.a of this final rule with comment period. If WAC information also is not available, we would provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP. We proposed that the other policies in this section would apply in both CY 2024 and subsequent years as they have been our longstanding policies under the OPPS. Therefore, we do not believe the policies need to be reproposed- annually and should apply for subsequent years until such time as we propose to change them. The drugs and biologicals that we proposed would have pass-through payment status expire after December 31, 2024, are shown in Table 91. We did not receive any public comments on this section. BILLING CODE 4150-28-P [[Page 81770]] [GRAPHIC] [TIFF OMITTED] TR22NO23.121 [[Page 81771]] [GRAPHIC] [TIFF OMITTED] TR22NO23.122 [[Page 81772]] [GRAPHIC] [TIFF OMITTED] TR22NO23.123 [[Page 81773]] [GRAPHIC] [TIFF OMITTED] TR22NO23.124 [[Page 81774]] [GRAPHIC] [TIFF OMITTED] TR22NO23.125 BILLING CODE 4150-28-C

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)(15), 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)(16), nonpass-through [[Page 81775]] 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. Finally, under the regulation at 42 CFR 419.2(b)(4), anesthesia drugs are packaged in the OPPS. 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 2024 and subsequent years, as we did in CY 2023, 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. We proposed that these policies would apply in both CY 2024 and subsequent years as they are our longstanding policies under the OPPS, and we do not believe they need to be reproposed annually. Instead, we believe they should apply for subsequent years until such time as we propose to change them or until such time as the APCs to which a payment offset may be applicable for certain products change. The 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 92. We note that in the CY 2024 OPPS/ASC proposed rule (88 FR 49676), we erroneously labeled these APCs as ``CY 2023'' rather than the correct ``CY 2024.'' [GRAPHIC] [TIFF OMITTED] TR22NO23.136 We proposed to continue to post annually on our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/annual-policy-files 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 we establish a ``two-times rule'' for diagnostic radiopharmaceuticals since they are packaged into the cost of the associated testing or administration procedure. While the commenter did not describe their precise goal, it appears they support a policy where, if the per-day cost of a diagnostic radiopharmaceutical is more than twice the cost of testing or the administration procedure where the product would be used, we should use our process under the OPPS to create a temporary HCPCS code to describe a new testing or administration procedure. The temporary HCPCS code for the new testing or administrative procedure would only be used with high-cost diagnostic radiopharmaceuticals for which the commenter believes payment is not sufficient. The commenter believed creating a temporary code for testing or administrative procedures for [[Page 81776]] use only with high-cost diagnostic radiopharmaceuticals would better reflect the cost of the high-cost diagnostic radiopharmaceutical products as lower-cost products would not be billed with, and would thus be excluded from the cost of, the test or procedure for which the temporary HCPCS would be established. Response: Our packaged payment policies for diagnostic radiopharmaceuticals are designed to encourage the use of the most cost-effective items and services for Medicare beneficiaries. Creating separate HCPCS codes for procedures utilizing high-cost diagnostic radiopharmaceuticals would segment payment for diagnostic radiopharmaceuticals and would reduce the prospective nature of the OPPS. We believe that the policy the commenter is suggesting may discourage the use of effective, lower-cost products. However, we appreciate the comment and will consider it as we explore possible changes to our diagnostic radiopharmaceutical payment policy, which may include new payment and coding approaches for high- cost diagnostic radiopharmaceuticals in the outpatient hospital setting in future rulemaking. Additionally, please refer to section II.A.3 of this final rule with comment period for a discussion of our comment solicitation regarding possible new approaches for the payment of diagnostic radiopharmaceuticals. Comment: One commenter asked for an analysis of how we incorporate the cost of diagnostic radiopharmaceuticals with pass-through status into the payment for the associated test or administration procedure when the pass-through status of the diagnostic radiopharmaceutical ends. Response: We identify single procedure claims that describe a procedure where a diagnostic radiopharmaceutical whose pass-through status is ending is used. The separate cost of the diagnostic radiopharmaceutical is added to the payment rate of the associated single procedure minus any existing drug offset for the service. We then calculate the geometric mean cost of all existing claims for the associated procedure. In many cases, there may be several diagnostic radiopharmaceuticals that can be used with a given procedure. The cost of the procedure will reflect the resource cost to perform the procedure along with the share of the procedures performed with the drug for which pass-through status is ending and the share of other diagnostic radiopharmaceuticals that may already be packaged into the cost of the associated procedure. We advise the commenter to refer to the CY 2024 OPPS final rule claims accounting narrative and to section II.A.3 of this final rule with comment period for information on how costs from drugs, including diagnostic radiopharmaceuticals, and other ancillary services are included in the cost of their associated procedures when payment for those drugs and ancillary services is packaged. 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 it for future rulemaking. Comment: One commenter supported keeping four payment levels (APC 5591 through APC 5594) for the Nuclear Medicine and related services APC. Response: We appreciate the support of the commenter. After consideration of the public comments we received, we are finalizing our proposals without modification regarding the APCs where drug offsets for policy-packaged drugs or radiopharmaceuticals could apply. We are also finalizing our proposal, without modification, to continue to annually post a file that contains the APC offset amounts.

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 and 68086)), we set the packaging threshold for establishing separate APCs for drugs and biologicals at $135 for CY 2023 (87 FR 71960 and 71961). Following the CY 2007 methodology, for the CY 2024 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 2024 and rounded the resulting dollar amount ($138.44) to the nearest $5 increment, which yielded a figure of $140. 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 IHS Global, Inc. IGI is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the various price indexes including the PPI Pharmaceuticals for Human Use (Prescription). Based on these calculations using the CY 2007 OPPS methodology, we proposed a packaging threshold for CY 2024 of $140. Comment: One commenter requested that the drug packaging threshold not be increased for CY 2024, but instead be maintained at $135 per day. The commenter believes that the level of the drug packaging threshold has increased faster over the last several years than the rate of increase in OPPS payment rates. Response: Consistent with our longstanding policy and practices, for the final rule, we recalculated the drug packaging threshold amount with updated data for the four-quarter moving average PPI level. When we trended the $50 threshold forward from the third quarter of CY 2005 to the third quarter of CY 2024 and rounded the resulting dollar amount ($137.36) to the nearest $5 increment, we calculated a threshold amount of $135, which is $5 less than our proposed threshold. We note, however, that we are not changing the methodology by which we calculate the threshold. Rather, recalculating the threshold amount using the updated data for the four-quarter moving average PPI level resulted in a lower amount that rounded to $135. After consideration of the public comments we received and consistent with our standard methodology, we are finalizing our proposal with modification. We will maintain the drug packaging threshold for CY 2024 at $135 per day, as the updated threshold amount calculated rounded to the [[Page 81777]] nearest $5 increment is now $135, rather than the proposed $140. 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 2024 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 2022 and were paid (via packaged or separate payment) under the OPPS. We used data from CY 2022 claims processed through June 30, 2022, for this calculation. However, we did not perform this calculation for those drugs and biologicals with multiple HCPCS codes that include different dosages, as described in section V.B.1.d of this final rule with comment period, or for the following policy-packaged items that we propose to continue to package in CY 2024: 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 2024, we used the methodology that was described in detail in the CY 2006 OPPS proposed rule (70 FR 42723 and 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 based on the ASP methodology, which is generally ASP plus 6 percent (which is the payment rate we proposed for separately payable drugs and biologicals) for CY 2024, as discussed in more detail in section V.B.2.b of this final rule with comment period) to calculate the CY 2024 proposed rule per day costs. We used the manufacturer- submitted ASP data from the fourth quarter of CY 2022 (data that were used for payment purposes in the physician's office setting, effective April 1, 2023) to determine the proposed rule per day cost. As is our standard methodology, for CY 2024, we proposed to use payment rates based on the ASP data from the fourth quarter of CY 2022 for budget neutrality estimates, packaging determinations, impact analyses, and completion of Addenda A and B to the CY 2024 OPPS 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 CY 2024 OPPS proposed rule. These data also were the basis for drug payments in the physician's office setting, effective April 1, 2023. 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 2022 hospital claims data to determine their per day cost. We proposed to package items with a per day cost less than or equal to $140 and identify items with a per day cost greater than $140 as separately payable unless they are policy-packaged. Consistent with our past practice, we cross-walked historical OPPS claims data from the CY 2022 HCPCS codes that were reported to the CY 2023 HCPCS codes that we display in Addendum B to the OPPS CY 2024 proposed rule (which is available on the CMS website) \141\ for proposed payment in CY 2024. --------------------------------------------------------------------------- \141\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- Our policy during previous cycles of OPPS rulemaking 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 2024 OPPS proposed rule, we proposed to use ASP data from the fourth quarter of CY 2022, 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, 2023, along with updated hospital claims data from CY 2022. We note that we also proposed to use these data for budget neutrality estimates and impact analyses for the CY 2024 OPPS proposed rule. Payment rates for HCPCS codes for separately payable drugs and biologicals included in Addenda A and B of the CY 2024 OPPS proposed rule are based on ASP data from the second quarter of CY 2023. 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, 2023. These payment rates would then be updated in the January 2024 OPPS update, based on the most recent ASP data to be used for physicians' office and OPPS payment as of January 1, 2024. For items that do not currently have an ASP-based payment rate, we calculated their mean unit cost from all of the CY 2022 claims data and updated cost report information available for the CY 2024 OPPS proposed rule to determine their final per day cost. Consequently, the packaging status of some HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals in the OPPS/ASC proposed rule may be different from the same drugs' HCPCS codes' packaging status determined based on the data used for this 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 2024 OPPS drug packaging threshold and the drug's payment status (packaged or separately payable) in CY 2023. 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 2024 and subsequent years, consistent with our historical practice, we proposed to apply the following policies to those 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 2023 and that are proposed for separate payment in CY 2024, and that then have per day costs equal to or less than the CY 2024 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2024 final rule, would continue to receive separate payment in CY 2024. HCPCS codes for drugs and biologicals that were packaged in CY 2023 and that are proposed for separate payment in CY 2024, and that then have per day costs equal to or less than the CY 2024 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2024 final rule, would remain packaged in CY 2024. HCPCS codes for drugs and biologicals for which we proposed [[Page 81778]] packaged payment in CY 2024 but that then have per-day costs greater than the CY 2024 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2024 final rule, would receive separate payment in CY 2024. We did not receive any public comments on our proposal, and we are finalizing our proposal with modification because of the change in the amount of the drug packaging threshold that was described in section V.B.1.a of this final rule with comment period. We will package items with a per day cost less than or equal to $135 and identify items with a per day cost greater than $135 as separately payable unless they are policy-packaged. In addition, we are finalizing, without modification, 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 2022 claims data and updated cost report information available for this CY 2024 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 HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals in the proposed rule is different from the same drug's HCPCS code's packaging status determined based on the data used for the final rule with comment period. For CY 2024, we are finalizing these two proposals without modification. Please refer to Addendum B to this final rule with comment period, which is available 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 (Sec. 419.2(b)(4)); Intraoperative items and services (Sec. 419.2(b)(14)); Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure (including, but not limited to, diagnostic radiopharmaceuticals, contrast agents, and pharmacologic stress agents) (Sec. 419.2(b)(15)); and Drugs and biologicals that function as supplies when used in a surgical procedure (including, but not limited to, skin substitutes and similar products that aid wound healing and implantable biologicals) (Sec. 419.2(b)(16)). The policy at Sec. 419.2(b)(16) is broader than that at Sec. 419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with comment period: ``We consider all items related to the surgical outcome and provided during the hospital stay in which the surgery is performed, including postsurgical pain management drugs, to be part of the surgery for purposes of our drug and biological surgical supply packaging policy'' (79 FR 66875). The category described by Sec. 419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, contrast agents, stress agents, and some other products. The category described by Sec. 419.2(b)(16) includes skin substitutes and some other products. We believe it is important to reiterate that cost consideration is not a factor when determining whether an item is a surgical supply (79 FR 66875). 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 claim submissions. The commenter believes this lack of drug cost reporting could be causing the cost of nuclear medicine procedures to be underreported and therefore requested that the radiolabeled product edits be reinstated. Response: We appreciate the commenter's feedback; however, we are not reinstating the radiolabeled product edits for 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 and 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. We welcome ongoing dialogue and engagement from interested parties regarding suggestions for payment changes for consideration in future rulemaking. 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 and 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 2024. 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 2022 claims data and our pricing information, which is based on the ASP methodology, which is generally ASP plus 6 percent, across all of the HCPCS codes that describe each distinct drug or biological in order to determine the mean units per [[Page 81779]] 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 2024 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 2022 claims data to make the proposed packaging determinations for them: 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 methodology based payment rate, which is generally ASP plus 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 if the estimated per day cost of each drug or biological is less than or equal to the proposed CY 2024 drug packaging threshold of $140 (in which case all HCPCS codes for the same drug or biological would be packaged) or greater than the proposed CY 2024 drug packaging threshold of $140 (in which case 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 2024 is displayed in Table 93. BILLING CODE 4150-28-P [[Page 81780]] [GRAPHIC] [TIFF OMITTED] TR22NO23.137 BILLING CODE 4150-28-C We did not receive any public comments on our proposal, and we are finalizing our proposal with the only modification being that the final CY 2024 drug packaging threshold will be $135 per day as described in section V.B.1.a. of this final rule with comment period. All other parts of the proposal are finalized without modification.

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 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 [[Page 81781]] 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 plus 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.\142\ --------------------------------------------------------------------------- \142\ Medicare Payment Advisory Committee. June 2005 Report to the Congress. Chapter 6: Payment for pharmacy handling costs in hospital outpatient departments. Available at: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/June05_ch6.pdf. --------------------------------------------------------------------------- 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. For CY 2023 and subsequent years, we finalized a policy 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 plus 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 2023. 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 are not available. Consistent with section 1847A(c)(4) of the Act, in the CY 2019 PFS final rule (83 FR 59661 through 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 through 59666). Since CY 2020, we have continued 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 (84 FR 61318 and 85 FR 86039), which 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 apply this provision to non-SCOD separately payable drugs. Because we establish the average price for a drug paid based on WAC under section 1847A of the Act as WAC plus 3 percent instead of WAC plus 6 percent, we believe it is appropriate to price separately payable drugs paid based on WAC at the same amount under the OPPS. Our policy to pay for drugs and biologicals at WAC plus 3 percent, rather than WAC plus 6 percent, applies whenever WAC-based pricing is used for a drug or biological under 1847A(c)(4). We refer readers to the CY 2019 PFS final rule (83 FR 59661 through 59666) for additional background on this policy. Consistent with our current policy, payments for separately payable drugs and biologicals are included in the budget neutrality adjustments, under the requirements in section 1833(t)(9)(B) of the Act. Also, the budget neutral weight scalar is not 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 2024 OPPS/ASC proposed rule (available on the CMS website),\143\ which illustrate the proposed CY 2024 payment based on the ASP methodology for separately payable nonpass-through drugs and biologicals and the ASP methodology 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, 2023, or WAC, AWP, or mean unit cost from CY 2022 claims data and updated cost report information available for the CY 2024 OPPS/ASC proposed rule. In general, these published payment rates are not the same as the actual January 2024 payment rates. This is because payment rates for drugs and biologicals [[Page 81782]] with ASP information for January 2024 will be determined through the standard quarterly process where ASP data submitted by manufacturers for the third quarter of CY 2023 (July 1, 2023, through September 30, 2023) will be used to set the payment rates that are released for the quarter beginning in January 2024 in December 2023. In addition, payment rates for drugs and biologicals in Addenda A and B to the proposed rule, for which there was no ASP, WAC, or AWP information available for April 2023, are based on mean unit cost in the available CY 2022 claims data. If new pricing information becomes available for payment for the quarter beginning in January 2024, we will price payment for these drugs and biologicals based on their newly available information. Finally, there may be drugs and biologicals that have ASP, WAC, or AWP information available for the CY 2024 OPPS/ASC proposed rule (reflecting April 2023 ASP data) that do not have ASP, WAC, or AWP information available for the quarter beginning in January 2024. These drugs and biologicals would then be paid based on mean unit cost data derived from CY 2022 hospital claims. Therefore, the proposed payment rates listed in Addenda A and B to the proposed rule are not for January 2024 payment purposes and are only illustrative of the CY 2024 OPPS payment methodology using the most recently available information at the time of issuance of the CY 2024 OPPS/ASC proposed rule. --------------------------------------------------------------------------- \143\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- For CY 2024, we did not propose any changes to our policies for payment for separately payable drugs and biologicals; and we are continuing our payment policy that has been in effect since CY 2013 to pay for separately payable drugs and biologicals in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We did, however, propose to amend the regulation text to reflect our longstanding policies for calculating the Medicare program payment and copayment amounts for separately payable drugs and biologicals by adding a new paragraph (d) to Sec. 419.41. Comment: A few commenters supported separate payment for specific drugs, biologicals, and radiopharmaceuticals for CY 2023. Commenters also supported CMS paying for all separately payable drugs and biologicals as SCODs. Multiple commenters expressed their approval for our proposal to pay for separately payable drugs and biologicals at ASP plus 6 percent. Response: We appreciate the commenters' feedback and support. 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: One commenter requested that we exclude radiopharmaceuticals from our proposed policy, explaining that during an initial sales period in which cost data for the drug or biological are not sufficiently available from the manufacturer, 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 (https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/defaultsource/reports/jun17_reporttocongress_sec.pdf), 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 policy to pay for drugs at WAC plus 3 percent for 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. For CY 2024, we did not propose any changes to our policies for payment for separately payable drugs and biologicals; and we are continuing our payment policy that has been in effect since CY 2013 to pay for separately payable drugs and biologicals in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We did, however, propose to amend the regulation text to reflect our longstanding policies for calculating the Medicare program payment and copayment amounts for separately payable drugs and biologicals by adding a new paragraph (d) to Sec. 419.41. After consideration of the comments received, we are finalizing the proposal without modification. b. Biosimilar Biological Products (1) Provisions of the Inflation Reduction Act Relating to Biologicals The Inflation Reduction Act (Pub. L. 117-169, August 16, 2022) (hereinafter referred to as ``IRA'') contains two provisions that affect payment limits for biosimilar biological products (hereinafter referred to as ``biosimilars''): section 11402 of the IRA amends the payment limit for new biosimilars furnished on or after July 1, 2024, during the initial period when ASP data is not available. Section 11403 of the IRA makes changes to the payment limit for certain biosimilars with an ASP that is not more than the ASP of the reference product for a period of 5 years. We implemented section 11403 of the IRA under program instruction,144 145 as permitted under section 1847A(c)(5)(C) of the Act. --------------------------------------------------------------------------- \144\ https://www.cms.gov/files/document/r11496cp.pdf. \145\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price. --------------------------------------------------------------------------- Section 11402 of the IRA amended section 1847A(c)(4) of the Act by adding subparagraph (B), which limits the payment amount for biosimilars during the initial period described in section 1847A(c)(4)(A). The provision requires that for new biosimilars furnished on or after July 1, 2024, during the initial period when ASP data are not available, the payment limit for the biosimilar is the lesser of (1) an amount not to exceed 103 percent of the WAC of the biosimilar or the Medicare Part B drug [[Page 81783]] payment methodology in effect on November 1, 2003, or (2) 106 percent of the lesser of the WAC or ASP of the reference product, or in the case of a selected drug during a price applicability period, 106 percent of the maximum fair price of the reference product. We referred readers to the CY 2024 PFS proposed rule for the discussion of the proposed changes to the regulation at Sec. 414.904 to codify section 11402 of the IRA (88 FR 52384 and 52385). Section 11403 of the IRA amended section 1847A(b)(8) of the Act by establishing a temporary payment increase for qualifying biosimilar biological products (hereinafter referred to as ``qualifying biosimilars'') furnished during the applicable 5-year period.\146\ Section 1847(b)(8)(B)(iii) of the Act defines ``qualifying biosimilar biological product'' as a biosimilar biological product (as described in section 1847A(b)(1)(C) of the Act) with an ASP (as described in section 1847A(b)(8)(A)(i) of the Act) less than the ASP of the reference product for a calendar quarter during the applicable 5-year period. Section 11403 of the IRA requires that a qualifying biosimilar be paid at ASP plus 8 percent of the reference product's ASP rather than 6 percent during the applicable 5-year period. Section 1847A(b)(8)(B)(ii) of the Act defines the applicable 5-year period for a qualifying biosimilar for which payment has been made using ASP (that is, payment under section 1847A(b)(8) of the Act) as of September 30, 2022, as the 5-year period beginning on October 1, 2022. For a qualifying biosimilar for which payment is first made using ASP during the period beginning October 1, 2022, and ending December 31, 2027, the statute defines the applicable 5-year period as the 5-year period beginning on the first day of such calendar quarter of such payment. We referred readers to the CY 2024 PFS proposed rule for the discussion of the proposed changes to the regulations at Sec. Sec. 414.902 and 414.904 to codify section 11403 of the IRA. --------------------------------------------------------------------------- \146\ https://www.congress.gov/bill/117th-congress/house-bill/5376/text?q=%7B%22search%22%3A%5B%22inflation+reduction+act%22%2C%22inflation%22%2C%22reduction%22%2C%22act%22%5D%7D&r=1&s=1. --------------------------------------------------------------------------- Section 1833(t)(14)(A)(iii) of the Act provides for payment of separately covered outpatient drugs (SCODs), and currently, CMS pays under the OPPS for SCODs consistent with the payment methodology set forth in section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default). Through rulemaking, CMS adopted a policy to apply the statutory default payment methodology to separately payable drugs and biologicals that are not SCODs (70 FR 68715 and 68716). Under this authority, the payment rate for SCODs and applicable separately payable drugs and biologicals is determined in accordance with sections 1842(o) and 1847A of the Act, as calculated and adjusted by the Secretary as necessary for purposes of paragraph (14). Because our current policy is to pay for separately payable drugs and biologicals at payment amounts determined under section 1847A, we proposed that, for a separately payable biosimilar that is new for purposes of section 1847A(c)(4)(A), the OPPS payment amount would be the amount determined under section 1847A, subject to the payment limit in section 1847A(c)(4)(A). We also proposed that, for a separately payable biosimilar that meets the definition of a ``qualifying biosimilar biological product'' for purposes of section 1847A(b)(8)(B)(iii) of the Act, the OPPS payment amount for the biosimilar would be the amount determined under section 1847A, subject to the temporary payment increase under section 1847A(b)(8)(B)(iii). We proposed to codify OPPS payment for biosimilars consistent with sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii) by adding new paragraphs (f) and (g) to the regulation at Sec. 419.41. The proposed regulation text cross-references the regulation text included in the PFS proposed rule, which proposed to codify the requirements in sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii). We referred readers to the PFS proposed rule for more information about those proposed regulations. We did not receive any public comments on our proposal and, for CY 2024, we are finalizing as proposed our proposal that the OPPS payment amount for a separately payable biosimilar that meets the definition of a ``qualifying biosimilar biological product'' for purposes of section 1847A(b)(8)(B)(iii) of the Act will be the amount determined under section 1847A, subject to the temporary payment increase under section 1847A(b)(8)(B)(iii). For CY 2024, we are finalizing as proposed our proposal to codify OPPS payment for biosimilars consistent with sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii) by adding new paragraphs (f) and (g) to the regulation at Sec. 419.41. The final regulation text cross-references the regulation text included in the PFS final rule, which codifies the requirements in sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii). We refer readers to the PFS final rule for more information about those regulations. (2) Proposal To Except Biosimilars From the OPPS Packaging Threshold When Their Reference Products Are Separately Paid Medicare Part B spending for biologicals and biosimilars has significantly outpaced the spending for non-biologic drugs for the past 16 years. According to a 2020 report from the Assistant Secretary for Planning and Evaluation (ASPE), the spending for biologicals and biosimilars represented 77 percent of Medicare Part B prescription drug spending in CY 2017.\147\ In a 2020 MedPAC report, the top 10 Part B drugs based on spending were all biologicals, and spending on them in the HOPD represented 39 percent of total HOPD drug spending in CY 2019.\148\ Although Part B drug spending for biologicals and biosimilars has grown tremendously in the past 16 years, we also recognize that there is evidence that the entry of biosimilars into the market has contributed to lower aggregate spending for the Medicare program.\149\ --------------------------------------------------------------------------- \147\ Assistant Secretary for Planning and Evaluation. ``Medicare Part B Drugs: Trends in Spending and Utilization, 2006- 2017.'' November 2020. Available at https://aspe.hhs.gov/sites/default/files/private/pdf/264416/Part-B-Drugs-Trends-Issue-Brief.pdf. \148\ Medicare Payment Advisory Commission. July 2021 Data Book: Health Care Spending and the Medicare Program. July 2021. Available at https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/data-book/july2021_medpac_databook_sec.pdf. \149\ Medicare Payment Advisory Commission. July 2022 Data Book: Health Care Spending and the Medicare Program. July 2022. Available at https://www.medpac.gov/wp-content/uploads/2022/07/July2022_MedPAC_DataBook_Sec10_v2_SEC.pdf. --------------------------------------------------------------------------- Congress has made legislative changes related to payment for biosimilars. First, it amended the Social Security Act to provide for payment of biosimilars in the Affordable Care Act (ACA) and more recently, in the IRA, to update payment for certain biosimilars. In particular, section 3139 of the ACA amended section 1847A(b) by adding a new paragraph (8), which provides that the payment amount for a biosimilar biological product is the biosimilar's ASP and 6 percent of the reference product's ASP.\150\ And as explained previously, section 11402 of the IRA changed the payment limit for biosimilars during the initial period when ASP data is not available; and section 11403 of the IRA temporarily [[Page 81784]] increased the payment limit for certain biosimilars. --------------------------------------------------------------------------- \150\ https://www.congress.gov/111/plaws/publ148/PLAW-111publ148.pdf. --------------------------------------------------------------------------- Our overarching policy goal is to create incentives for efficiency and selection of the least costly products while still meeting a beneficiary's clinical needs and to protect the long-term solvency of the Part B Trust Fund. When we established a policy to pay for biosimilars, we intended to promote the use of biosimilars as a less expensive alternative to their reference products. For CY 2016 and CY 2017, we finalized a policy to pay for biosimilar biological products based on the payment allowance of the product as determined under section 1847A of the Act and to subject nonpass-through biosimilar biological products to our annual threshold-packaged policy (for CY 2016, 80 FR 70445 and 70446; and for CY 2017, 81 FR 79674). In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59351), we explained that consistent with our established OPPS drug, biological, and radiopharmaceutical payment policy, HCPCS coding for biosimilar biological products will be based on policy established under the CY 2018 PFS final rule with comment period (82 FR 53182 through 53187), where CMS finalized a policy to implement separate HCPCS codes for biosimilar biological products. We also clarified that all biosimilar biological products will be eligible for pass-through payment and not just the first biosimilar biological product for a reference product. Our threshold packaging policy's intent is to create incentives for efficiency, but we have concerns that packaging biosimilars when the reference product or other marketed biosimilars are separately paid may create financial incentives for providers to select more expensive, but clinically similar, products. In most cases, a biosimilar either has pass-through status or is separately payable. However, there have been a few instances where biosimilars are packaged. For example, in CY 2021, we noted that HCPCS code Q5105 (Injection, epoetin alfa-epbx, biosimilar, (Retacrit) (for esrd on dialysis), 100 units), was on pass- through status through September 2021. HCPCS code Q5105 is a biosimilar for HCPCS code Q4081 (injection, epoetin alfa, 1000 units (for esrd on dialysis)), and HCPCS code Q4081 is currently packaged under the OPPS. After HCPCS code Q5105's pass-through status expired, payment for HCPCS code Q5105 was packaged because its per day cost fell below our packaging threshold of $130 for CY 2021. In CY 2023, payment for HCPCS code Q5101 (Injection, filgrastim-sndz, biosimilar, (zarxio), 1 microgram) is packaged because its per day cost fell below our packaging threshold of $135 for CY 2023. HCPCS code Q5101 is the biosimilar for HCPCS code J1442 (Injection, filgrastim (g-csf), excludes biosimilars, 1 microgram), which is currently separately payable with a status indicator ``K.'' Packaging payment for both of these biosimilars is consistent with our policy since CY 2018 to subject nonpass-through biosimilars to the OPPS threshold-packaging policy. However, we believe this policy may create incentives to use the more expensive reference product or biosimilars that are separately payable, as hospitals would be paid less for using the threshold-packaged biosimilar. For example, the CY 2023 threshold packaging of the biosimilar described by HCPCS code Q5101 (Injection, filgrastim-sndz, biosimilar, (zarxio), 1 microgram) may have created a financial incentive for providers to select the separately paid reference product or the separately paid filgrastim biosimilar over the packaged filgrastim biosimilar, which is inconsistent with our policy goal of encouraging efficiency and promoting use of biosimilars as lower cost alternatives to their reference products. Accordingly, for CY 2024, we proposed to except biosimilars from the OPPS threshold packaging policy when their reference products are separately paid, meaning we would pay separately for these biosimilars even if their per-day cost is below the threshold packaging policy. We believe the threshold packaging exception for biosimilars when their reference products are separately paid would preserve our policy intent to promote biosimilar use as a lower cost alternative to higher cost reference products. In addition, if a reference product's per-day cost falls below the threshold packaging policy, we proposed that all the biosimilars related to the reference product would be similarly packaged regardless of whether their per-day costs are above the threshold. This would allow for consistent treatment of similar biological products in the unusual circumstance in which a biosimilar is priced above the reference product. For the purpose of identifying biosimilar(s) related to a reference product, we would rely on the product's FDA approval under section 351(k) of the Public Health Service Act. For example, filgrastimsndz (Zarxio), filgrastim-aafi (Nivestym), and filgrastim- ayow (Releuko-) are biosimilars related to filgrastim (Neupogen).\151\ --------------------------------------------------------------------------- \151\ https://purplebooksearch.fda.gov/results?query=filgrastim&title=Zarxio. --------------------------------------------------------------------------- Comment: Several commenters expressed support for our proposal to except biosimilars from the drug packaging threshold when their reference products are separately paid and not packaged. Response: We thank the commenters for their support to except biosimilars from the current threshold packaging policies when their reference product is above the threshold and paid separately. As stated earlier, when we established a policy to pay for biosimilars, we intended to promote the use of biosimilars as a less expensive alternative to their reference products. Our threshold packaging policy's intent is to create incentives for efficiency, but we have concerns that packaging biosimilars when the reference product or other marketed biosimilars are separately paid may create financial incentives for providers to select more expensive, but clinically similar, products. We believe the threshold packaging exception for biosimilars when their reference products are separately paid would preserve our policy intent to promote biosimilar use as a lower cost alternative to higher cost reference products. Comment: Commenters generally opposed our proposal to package payment for biosimilar(s) when its reference product is below the drug packaging threshold and packaged. The commenters contended the current threshold packaging policy imposes inflationary pressure on drug costs by incentivizing manufacturers to maintain the ASP above the packaging threshold to ensure separate payment while providers are incentivized to select the higher cost biologicals for a similar reason. Response: We thank the commenters for their insights on this subject. The threshold-packaging policy's intent is to create incentives for efficiency. We proposed the threshold-packaging exception for biosimilars when its reference product is separately paid to remove the financial incentives for providers to select a more expensive biological. We believe there are merits to our proposal to package biosimilars when their reference product's per day cost is below the drug packaging threshold and payment for the reference product is packaged. We believe this corresponding policy proposal would also remove the financial incentive to use the more expensive biologic, in this scenario, the biosimilar(s) (the more [[Page 81785]] expensive and separately paid product) when its reference product falls below the packaging threshold. At the same time, we acknowledge that the scenario of the per day cost of a reference product falling below the packaging threshold while the per day cost of a biosimilar remains above the packaging threshold has not yet occurred. For this reason, for CY 2024, we are not finalizing our proposal to package biosimilar(s) when their related reference product's per day cost is below the drug packaging threshold and payment for the reference product is packaged. We will continue to monitor Part B drug utilization and spending for biologicals and potentially revisit this issue in future rulemaking. Comment: We received several comments requesting that the policy of excepting biosimilars from the OPPS drug packaging threshold be applied retroactively beginning with CY 2023. One commenter indicated that making this policy change retroactive to CY 2023 would support the continued use of biosimilars. Response: Under the statute, retroactive rulemaking authority is reserved for certain special circumstances that do not apply here. We believe it would be inappropriate to apply our retroactive rulemaking authority under section 1871(e)(1)(A) of the Act in this case. Comment: Some commenters recommended that CMS categorically exempt reference and biosimilar biological products from its threshold packaging policy. The commenters believed the threshold packaging policy imposes inflationary pressures on drug costs by incentivizing manufacturers to price their products above the packaging threshold and, as a result, incentivizing providers to switch to those products above the packaging threshold, which would be paid separately. Response: We thank the commenters for their comment. We believe our threshold packaging policy encourages efficiency and is an essential component of a prospective payment system. However, we will continue to review new policy ideas that promote the use of biosimilars as a less expensive alternative to their reference products for future rulemaking. Comment: One commenter stated the best policy is to treat biosimilars and their reference product similarly by either packaging all of them or paying separately for all of them. The commenter stated that if any one of the related products (a biosimilar or reference product) is below the packaging threshold, it would be appropriate to package all of them. Conversely, the commenter believed biosimilars and their reference products should be separately payable only if the per day costs of all of the products exceed the packaging threshold. Response: We thank the commenter for their feedback. As mentioned above, we believe the threshold packaging exception for biosimilars when their reference products are separately paid is consistent with our broader policy intent to promote biosimilar use as a lower cost alternative to higher cost reference products. However, we will not finalize our proposal to package biosimilar(s) when their related reference product's per day cost is below the drug packaging threshold and payment for the reference product is packaged for CY 2024. After consideration of the public comments we received, we are finalizing our proposal with modification. Specifically, we are finalizing the exception of biosimilars from the OPPS threshold packaging policy when their reference products are separately paid, meaning for CY 2024, we would pay separately for these biosimilars even if their per-day cost is below the threshold packaging policy. We believe creating a threshold-packaging exception for biosimilars when their reference products are separately paid will remove the financial incentive to use a more expensive separately payable biologic and preserve our policy intent to promote biosimilar use as a lower cost alternative to higher cost reference products. However, we believe our policy proposal to package biosimilar(s) when the reference product's per-day cost falls below the packaging threshold would be unnecessary at this time since this scenario has not yet occurred. We will examine the claims data, monitor Part B drug utilization and spending for biologics, and address this issue in future rulemaking if necessary. (3) Comment Solicitation on Packaging Policy for Reference Products and Biosimilars While we proposed to except biosimilars from the threshold packaging policy when their reference products are separately paid, we also solicited comment on the packaging of payment for a reference product and its biosimilar(s) into the payment for the associated service or procedure when the per-day cost of the reference product, or any of its biosimilar(s), is less than or equal to the applicable OPPS drug packaging threshold. While both our proposed policy and the policy described by this comment solicitation share the goal of consistent treatment of similar biologic products, the method to achieve that goal differs. Our proposed policy would result in biosimilars being paid separately if their reference product is paid separately, whereas here we sought comment on a policy that would result in packaged payment for a biologic if the reference product or any of its biosimilars have per day costs below the drug packaging threshold. For example, for purposes of this comment solicitation, if a biosimilar's per-day cost is above the threshold and separately paid but its reference product is packaged, the biosimilar (and all its related biosimilar(s)) would be packaged. Additionally, we sought comment on other ways to structure payment for biologicals and biosimilars that would encourage efficiency while maintaining beneficiary access. Comment: Commenters generally opposed our comment solicitation to package payment for biosimilar(s) and the reference product when the per-day cost of any of the products fall below the packaging threshold. Response: At this time, we are only finalizing our proposed policy to except biosimilars from the OPPS threshold-packaging policy when their reference products are separately paid, meaning that CMS will pay separately for these biosimilars even if their per-day cost falls below the cost threshold of the threshold-packaging policy. At this time, we are not implementing a policy that packages payment for reference products and biosimilars if the per-day cost of any product drops below the OPPS drug packaging threshold. It is important to note that we have not yet encountered a situation where the per-day cost of the reference product is below the packaging threshold and the per-day cost of biosimilar products is above the packaging threshold. CMS will continue to monitor payment and utilization patterns as well as overall Part B spending for biosimilars and their reference products and address any problematic pricing trends that may develop in future rulemaking. Comment: MedPAC stated that if any one of the products (the biosimilar or reference product) is below the packaging threshold, they should all be treated similarly and packaged, and that biosimilar products and their reference product should be separately payable only if the cost of all of the products exceeds the packaging threshold. Response: We thank MedPAC for their response to this comment solicitation. As mentioned above, we believe our final policy to except biosimilars from the OPPS threshold-packaging policy when their reference products are [[Page 81786]] separately paid will remove the financial incentive to use a more expensive separately payable biological. We believe this policy is consistent with broader agency goals of promoting biosimilars as a lower cost alternative to higher cost reference products. Comment: One commenter appreciated that we solicited comments on alternative methods to structure payments for biosimilars. The commenter noted that the current ASP-based payment methodology for biosimilars has resulted in declining provider reimbursement that may disincentivize use of these products. Response: We thank the commenter for sharing their concerns. We do not have any data to support the assertion that the current ASP-based payment methodology for biosimilars has resulted in declining provider reimbursement that may disincentivize provider use. We reiterate that the ACA requires the ASP add-on for biosimilars to be 6 percent of the reference product's ASP. Additionally, section 11403 of the IRA amended section 1847A(b)(8) of the Act by establishing a temporary payment limit increase for qualifying biosimilar biological products of ASP plus 8 percent of the reference product's ASP rather than 6 percent during the applicable 5-year period. Consistent with these authorities and with the policy we are finalizing to except biosimilars from the threshold packaging policy when their reference products are separately paid, we seek to promote the use of biosimilars as a less expensive alternative to their reference products, to provide more options to patients and physicians, and to encourage competition to provide a robust and comprehensive selection of choices for patients at a fair price. Comment: One commenter urged CMS to work with stakeholders to develop new payment approaches for Part B biosimilars to ensure sustainability. Response: We thank the commenter, and we believe in a strong working relationship with the interested parties on Part B issues. We continue to believe that biosimilars are a less expensive alternative to their reference products. For CY 2016 and CY 2017, we finalized a policy to provide for the separate coding and payment for products approved under each individual abbreviated application, rather than grouping all biosimilars with a common reference product into codes (80 FR 70445 and 70446 and 81 FR 79674). Additionally, as required by section 11403, we established a temporary payment limit increase for qualifying biosimilar biological products of ASP plus 8 percent of the reference product's ASP rather than 6 percent during the applicable 5- year period. We believe that these policies together will encourage greater manufacturer participation in the marketplace and the introduction of more biosimilar products, thus driving competition and providing savings in the long term. Comment: One commenter urged CMS to consider how the Agency can encourage other payers to similarly promote biosimilars. Response: We thank the commenter, but we note this comment is out of scope for this final rule. We thank commenters for their valuable feedback, and we will continue to explore policy ideas to increase healthcare efficiency and promote biosimilar use in future rulemaking.

3. Payment Policy for Therapeutic Radiopharmaceuticals

In the CY 2023 OPPS/ASC final rule with comment period, we adopted as final our proposal to continue our longstanding payment policy for therapeutic radiopharmaceuticals for CY 2023 and subsequent years. Accordingly, this payment policy for therapeutic radiopharmaceuticals continues to apply in CY 2024. We pay for separately payable therapeutic radiopharmaceuticals under the ASP methodology adopted for separately payable drugs and biologicals. If ASP methodology (ASP, WAC, and AWP) information is unavailable for a therapeutic radiopharmaceutical, we base therapeutic radiopharmaceutical payment on mean unit cost data derived from hospital claims. The rationale outlined in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524 and 60525) for applying the principles of separately payable drug pricing to therapeutic radiopharmaceuticals continues to be appropriate for nonpass-through, separately payable therapeutic radiopharmaceuticals. Therefore, we are paying for all nonpass-through, separately payable therapeutic radiopharmaceuticals at ASP plus 6 percent (or applicable WAC or AWP amount) 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 and 60521). Consistent with the policy we adopted for CY 2023 and subsequent years, for CY 2024, we will rely on the most recently available mean unit cost data derived from hospital claims data for payment rates for therapeutic radiopharmaceuticals for which ASP methodology (ASP, WAC, and AWP) 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 methodology (ASP, WAC, and AWP) 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 2024 payment rates for nonpass-through, separately payable therapeutic radiopharmaceuticals are included in Addenda A and B of the CY 2024 OPPS/ASC proposed rule (which are available on the CMS website).\152\ --------------------------------------------------------------------------- \152\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- We did not receive any public comments on our payment policy for therapeutic radiopharmaceuticals or our proposed CY 2024 final payment rates for nonpass-through, separately payable therapeutic radiopharmaceuticals, and we are finalizing our proposed rates without modification.

4. Payment for Blood Clotting Factors

For CY 2023, 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 (87 FR 71969 and 71970). That is, for CY 2023, we provided payment for blood clotting factors under the OPPS at ASP plus 6 percent, plus an additional payment for the furnishing fee. We note that when blood clotting factors are provided in physicians' offices or other settings for which Medicare makes payment under Part B, a furnishing fee is also applied to the payment. The CY 2023 updated furnishing fee was $0.250 per unit. In the CY 2023 OPPS/ASC final rule with comment period, we adopted as final for CY 2023 and subsequent years a policy to pay for blood clotting factors at ASP plus 6 percent, consistent with our payment policy for other nonpass-through, separately payable drugs and biologicals, and to pay an updated furnishing fee. Our policy to pay a furnishing fee for blood clotting factors under the OPPS is consistent with the methodology applied in the physician's [[Page 81787]] 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 will 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: https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price. We did not receive any public comments on our proposed payment policy for blood clotting factors and are finalizing our proposal without modification. For CY 2024, we will continue to pay for blood clotting factors using the same methodology as other separately payable drugs and biologicals under the OPPS and will continue to pay 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 In the CY 2023 OPPS/ASC final rule with comment period, we adopted as final our proposal to continue our longstanding payment policy for nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data for CY 2023 and subsequent years. Therefore, for CY 2024, this policy will continue to apply. 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 and 70443). Consistent with our policy, because we have no claims data and must determine if these products exceed the per-day cost threshold, we estimated the average number of units of each product that would typically be furnished to a patient during one day in the hospital outpatient setting and utilized the ASP methodology to determine whether their payment will be packaged as well as their payment status indicators. We refer readers to Table 94 below for the final CY 2024 status indicator for each of the nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data, which are also listed in Addendum B to this rule on the CMS website.\153\ --------------------------------------------------------------------------- \153\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- BILLING CODE 4150-28-P [[Page 81788]] [GRAPHIC] [TIFF OMITTED] TR22NO23.126 [[Page 81789]] [GRAPHIC] [TIFF OMITTED] TR22NO23.127 BILLING CODE 4150-28-C We did not receive any specific public comments regarding our payment for non-pass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data. For CY 2024, we will continue to assign drug or biological products status indicator ``K'' and pay for these products separately for the remainder of CY 2024 if pricing information becomes available. The CY 2024 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 on the CMS website.

6. OPPS Payment Methodology for 340B Purchased Drugs and Biologicals

a. Overview Under the OPPS, we generally set payment rates for separately payable drugs and biologicals under section 1833(t)(14)(A) of the Act. Section 1833(t)(14)(A)(iii)(II) of the Act provides that, if hospital acquisition cost data is not available, the payment amount is the average price for the drug in a year established under section 1842(o) of the Act, which cross-references section 1847A of the Act, which generally sets a default rate of ASP plus 6 percent for certain drugs and biologicals. The provision also provides that the average price for the drug or biological in the year as established under section 1847A of the Act is calculated and adjusted by the Secretary as necessary for purposes of paragraph (14). 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 and biologicals, which was based on findings of the GAO \154\ and MedPAC \155\ that 340B hospitals were acquiring drugs and biologicals at a significant discount under HRSA's 340B Drug Pricing Program. We direct readers to the CY 2018 OPPS/ASC final rule with comment period for a more detailed discussion of the 340B drug payment policy (82 FR 52493 through 52511). --------------------------------------------------------------------------- \154\ Government Accountability Office. ``Medicare Part B Drugs: ``Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals.'' June 2015. Available at https://www.gao.gov/assets/gao-15-442.pdf. \155\ Medicare Payment Advisory Commission. March 2016 Report to the Congress: Medicare Payment Policy. March 2016. Available at Medicare Payment Advisory Commission. March 2016 Report to the Congress: Medicare Payment Policy. March 2016. Available at https://www.medpac.gov/document/http-www-medpac-gov-docs-default-source-reports-may-2015-report-to-the-congress-overview-of-the-340b-drug-pricing-program-pdf/. --------------------------------------------------------------------------- This policy has been the subject of extensive litigation, including before the Supreme Court of the United States. On June 15, 2022, the Supreme Court held in American Hospital Association v. Becerra, 142 S. Ct. 1896, that if CMS has not conducted a survey of hospitals' acquisition costs, it may not vary the payment rates for outpatient prescription drugs by hospital group. While the Supreme Court's decision addressed payment rates for CYs 2018 and 2019, it had implications for subsequent payment rates. Therefore, for CY 2023, we finalized a policy to revert to the default payment rate, which is generally ASP plus 6 percent, for 340B acquired drugs and biologicals and finalized a policy to pay for 340B [[Page 81790]] acquired drugs and biologicals no differently than we pay for drugs and biologicals that are not acquired through the 340B program. We also finalized a budget neutrality adjustment to the CY 2023 OPPS conversion factor of 0.9691 percent rather than the 0.9596 percent adjustment we had proposed. This adjustment offset the prior increase of 3.19 percent that was applied to the conversion factor when we implemented the 340B payment policy in CY 2018 in a budget neutral manner and ensured the CY 2023 conversion factor was equivalent to the conversion factor that would be in place if the 340B drug payment policy had never been implemented. After the publication of the proposed CY 2023 OPPS rule, on September 28, 2022, the District Court issued a final judgment vacating the 340B reimbursement rate for the remainder of 2022, which the District Court explained would automatically reestablish the default rate for 340B-acquired drugs and biologicals. The agency took the necessary steps, including issuing instructions to Medicare contractors and updating drug payment files, to implement that September 28, 2022, decision and has since paid the default rate, which is generally ASP plus 6 percent, for 340B acquired drugs and biologicals.\156\ --------------------------------------------------------------------------- \156\ Vacating Differential Payment Rate for 340B-Acquired Drugs in 2022 Outpatient Prospective Payment System Final Rule with Comment Period. https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- Comment: Many commenters supported our proposal to continue to pay a rate of ASP plus 6 percent, or equivalent, for 340B-acquired drugs and biologicals. Several commenters acknowledged the benefit of the 340B program for their particular hospital and reiterated their belief that CMS should maintain the same payment rate for 340B-acquired drugs and those drugs not acquired through the 340B program. When explaining the benefit of the 340B program, one commenter asked CMS to work with HRSA, Congress, and others to protect the 340B program. Response: We thank commenters for their support. We note that the 340B Drug Pricing Program is a program administered by HRSA and comments regarding its administration are outside the scope of this final rule with comment period. Comment: Some commenters believed that CMS should not continue the increased ASP plus 6 percent payment rate for 340B-acquired drugs. These commenters believed that this would increase out-of-pocket costs for beneficiaries for these drugs and were concerned about the benefit of the 340B drug pricing program to vulnerable patients. One commenter spoke about the perverse incentive that the significant difference between 340B drug acquisition costs and the Medicare payment rate creates. The commenter was concerned that this incentive could further exacerbate the issue of increased drug spending and drug prices. Several commenters encouraged CMS to take appropriate steps to curtail payments that are significantly greater than the rate at which hospitals acquire 340B drugs and noted that a survey of hospital acquisition costs could help CMS achieve significant drug savings. Similarly, one commenter believed that CMS's proposed policy would be paying hospitals close to 50 percent more than their 340B drug acquisitions costs and that CMS has already determined that a generous reimbursement rate for 340B-acquired drugs would be ASP minus 28.7 percent per a previous drug acquisition cost survey. This commenter was concerned that CMS was ignoring the Supreme Court ruling that, in their view, stated that the CMS could vary reimbursement rates based on survey data and that payment rates based on ASP plus 6 percent were arbitrary. There were also concerns from this commenter that CMS violated the Administrative Procedure Act by not acknowledging and using this survey data to inform payment rates. Response: We thank the commenters for their viewpoints expressed here and for their suggestions regarding drug cost surveys. For CY 2024, we are continuing our policy to apply to longstanding payment methodologies for 340B-acquired drugs that existed prior to CY 2018. In the CY 2021 OPPS/ASC final rule with comment period, we adopted as final our proposal to continue the Medicare payment policy for 340B drugs in place at that time (that is, the policy to pay a general rate of ASP minus 22.5 percent), rather than finalizing our alternative proposal to pay for 340B drugs at a rate of ASP minus 28.7 percent based on survey data (86 FR 63646 through 63648). We stated that while we believed our methods to conduct the 340B drug acquisition cost survey referenced in that rule, as well as the methodology we used to calculate the proposed average or typical discount received by 340B entities on 340B drugs, were valid, we nonetheless recognized that we received many comments on that survey from stakeholders. We noted that using survey data is complex, and we emphasized that we wished to continue to evaluate how to balance and weigh the use of 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 (86 FR 63646). Since the CY 2021 OPPS/ASC final rule with comment period was issued, the Supreme Court held that because CMS had not conducted a survey of hospitals' acquisition costs, it could not vary the payment rates for outpatient prescription drugs by hospital group. See Am. Hosp. Ass'n v. Becerra, 142 S. Ct. 1896, 1906 (2022). We are concerned that using data from the 2020 survey, which surveyed only 340B hospitals, might not comport with the Supreme Court's decision. We are also mindful of the burden surveys place on hospitals and CMS, should we decide to conduct an updated survey. The survey we previously conducted was just a survey of 340B hospitals; we did not conduct a survey of additional hospital groups at that time. And while that more limited survey placed a certain burden on 340B providers (a comment we received at the time), a survey of all hospital groups would be a much larger, more complex endeavor. According to the GAO hospitals survey in 2005, surveys may be useful on occasion to validate ratesetting data CMS receives, such as ASP. However, they also create significant work for hospitals and CMS as the data collector. For these reasons, GAO recommended that CMS survey hospitals only occasionally to validate hospital acquisition costs. We are mindful of these concerns but will take the commenters' feedback regarding a survey of hospital drug acquisition costs into consideration as we consider potential future rulemaking. After a consideration of comments received, for CY 2024, we are finalizing the general payment rate of ASP plus 6 percent as the default payment rate for drugs and biologicals acquired under the 340B program and will pay for these drugs and biologicals no differently than we pay for those drugs and biologicals that are not acquired under the 340B program. We note that many commenters also referenced the 340B Remedy proposed rule (88 FR 44078) in their comments. We note that these comments were out of scope for purposes of this CY 2024 OPPS/ASC final rule with comment period; however, the 340B Remedy final rule publishes in the Federal Register of November 8, 2023 (FR Doc. 2023-24407), and the summaries of and our responses to the public comments can be found on the CMS OPPS website.\157\ [[Page 81791]] b. Payment for 340B Drugs and Biologicals in CYs 2018 Through 2022 For full descriptions of our OPPS payment policy for drugs and biologicals acquired under the 340B program beginning in CY 2018, we refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through 59371); the CY 2019 OPPS/ASC final rule with comment period (83 FR 59015 through 59022); the CY 2021 OPPS/ASC final rule with comment period (85 FR 86042 through 86055); the CY 2022 OPPS/ ASC final rule with comment period (86 FR 63640 through 63649); and the CY 2023 OPPS/ASC final rule with comment period (87 FR 71970 through 71976). In July of 2023, CMS published a proposed rule, referred to as the ``remedy proposed rule'' to address the reduced payment amounts to 340B hospitals under the reimbursement rates in effect for CYs 2018 through 2022 and to comply with the statutory requirement to maintain budget neutrality under the OPPS. The remedy proposed rule does not propose changes to our CY 2024 OPPS drug payment policy or the CY 2024 OPPS conversion factor, but it does propose changes to the calculation of the OPPS conversion factor beginning in CY 2025. We believe our proposed remedy rule is consistent with the Supreme Court's decision in American Hospital Association and the District Court's remand order. We refer readers to the 340B Remedy proposed rule (88 FR 44078) for a full description of the proposed remedy policy as well as the 340B Remedy final rule. c. CY 2024 Proposed 340B Drug Payment Policy For CY 2024, consistent with our policy finalized for CY 2023, we proposed to continue to pay the statutory default rate, which is generally ASP plus 6 percent, for 340B acquired drugs and biologicals. The payment for 340B acquired drugs and biologicals will not differ from the payment rate for drugs and biologicals not acquired through the 340B program. We believe this policy is appropriate given the Supreme Court decision discussed previously. In the CY 2023 OPPS/ASC final rule with comment period, we maintained the requirement that 340B hospitals report the ``JG'' (Drug or biological acquired with 340B drug pricing program discount, reported for informational purposes) or ``TB'' (Drug or biological acquired with 340B drug pricing program discount, reported for informational purposes for select entities) modifiers to identify drugs and biologicals acquired through the 340B Program for informational purposes (87 FR 71974). We explained that we believed maintaining both modifiers would reduce provider burden compared to shifting to a single modifier, as all providers can continue utilizing the modifier (either ``JG'' or ``TB'') that they had been using for the previous five calendar years. On December 20, 2022, we issued ``Part B Inflation Rebate Guidance: Use of 340B Modifiers,'' which, in accordance with section 1847A(i) of the Act, requires all 340B covered entities, including hospital-based and non-hospital-based entities, to report the applicable modifier for separately payable drugs and biologicals acquired through the 340B Program.\158\ Section 1847A(i) of the Act, as added by the Inflation Reduction Act, requires the Secretary to establish a Part B inflation rebate by manufacturers of certain single source drugs and biologicals with prices increasing faster than the rate of inflation. Section 1847A(i)(3)(B)(ii)(I) of the Act specifically excludes units of drugs and biologicals for which the manufacturer provides a discount under the 340B program from the units of drugs and biologicals for which a manufacturer otherwise may have a Part B inflation rebate liability. Effective implementation of the Part B inflation rebate requires CMS to identify units of drugs and biologicals acquired through the 340B Program so they can be subtracted from the total number of otherwise rebatable units as applicable. This guidance explained that the ``JG'' and ``TB'' modifiers provide an existing mechanism to identify drugs and biologicals acquired through the 340B Program that is familiar to most 340B covered entities paid under the OPPS, and stated that it did not change the requirements in the CY 2023 OPPS/ASC final rule with comment period (i.e., that 340B covered entity hospitals should continue to use the modifiers they used previously to identify 340B drugs and biologicals). For claims with dates of service beginning no later than January 1, 2024, the guidance instructed all 340B covered entities to report the appropriate modifier, including those not currently reporting the ``JG'' or ``TB'' modifier, such as Ryan White clinics and hemophilia clinics, which should report the ``JG'' modifier on separately payable Part B claim lines for drugs and biologicals acquired through the 340B Program. --------------------------------------------------------------------------- \158\ https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf. --------------------------------------------------------------------------- Although we stated in the CY 2023 OPPS/ASC final rule with comment period and in the ``Part B Inflation Rebate Guidance: Use of 340B Modifiers'' that hospital-based 340B covered entities should continue to use the modifier they used previously (either the ``JG'' or ``TB'' modifier), we now believe utilizing a single modifier will allow for greater simplicity, especially because both modifiers are used for the same purpose: to identify separately payable drugs and biologicals acquired under the 340B Program. Requiring hospitals to report a single modifier would allow CMS to continue to identify and exclude 340B- acquired drugs and biologicals from the definition of units for the purpose of Part B inflation rebate liability, while eliminating the need to use two modifiers for the same purpose. Additionally, we believed the proposal would lessen the burden on providers as they would only have to report one modifier for all scenarios in which a 340B drug is acquired. Accordingly, we proposed that all 340B covered entity hospitals paid under the OPPS would report the ``TB'' modifier effective January 1, 2025, even if the hospital previously reported the ``JG'' modifier. The ``JG'' modifier would remain effective through December 31, 2024. Hospitals that currently report the ``JG'' modifier could choose to continue to use it in CY 2024 or choose to transition to use of the ``TB'' modifier during that year. Beginning on January 1, 2025, the ``JG'' modifier would be deleted, and hospitals would be required to report drugs and biologicals acquired through the 340B program using the ``TB'' modifier. Additionally, beginning January 1, 2025, we would revise the ``TB'' modifier descriptor (Drug or biological acquired with 340B drug pricing program discount, reported for informational purposes for select entities) to no longer include ``. . .for select entities'' as all entities would report this modifier after this date. We noted that the proposal, if finalized, would update the December 20, 2022, guidance titled ``Part B Inflation Rebate Guidance: Use of the 340B Modifiers.'' \159\ Additionally, CMS plans to further update this guidance to align the modifier requirements for 340B covered entity providers and suppliers not paid under the OPPS with the modifier requirement changes for 340B covered entity hospitals paid under the OPPS. --------------------------------------------------------------------------- \159\ https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf. --------------------------------------------------------------------------- For more information on the Medicare Part B inflation rebate program, please visit ``Inflation Rebates in Medicare'' at https:// www.cms.gov/inflation- [[Page 81792]] reduction-act-and-medicare/inflation-rebates-medicare. Comment: Commenters generally opposed the continued requirement to report the 340B modifiers, citing the administrative burden associated with the required reporting. Commenters believed CMS should abandon the requirement of any 340B modifiers after the Supreme Court decision that the 340B drug payment policy was unlawful. Response: We thank the commenters for their feedback. We reiterate that the 340B modifier requirement is to identify and exclude 340B- acquired drugs and biologicals from the definition of units for the purpose of Part B inflation rebate liability. We note that the requirement for the 340B modifier(s) was not the subject of the Supreme Court 340B decision. We believe it is appropriate to consolidate the 340B modifier to a single modifier, which will allow for greater operational simplicity to achieve the IRA policy objective. Comment: A commenter requested that CMS clarify the purpose for the continued requirement of a 340B modifier. The commenter stated the CY 2024 OPPS/ASC proposed rule on this subject is unclear if the only purpose of the modifier is for implementing the Inflation Reduction Act requirements related to Part B inflation rebates. Response: We thank the commenter for their feedback. We reiterate the purpose of the 340B modifier requirement is to is to identify and exclude 340B-acquired drugs and biologicals from the definition of units for the purpose of Part B inflation rebate liability. Comment: Commenters stated that the 340B modifier requirement presents a considerable administrative burden for 340B hospitals, demanding substantial staff time and resources. One commenter explained that hospital pharmacists devote significant time to determining if new drug codes require the 340B modifier. Once the drugs have been identified, the pharmacists must then communicate with other departments to ensure the drugs are properly coded and billed. This is in addition to the regular self-audits pharmacists perform. Some commenters stated that reporting only one 340B modifier could eventually be less burdensome (by reducing potential confusion) than the current two modifiers. However, they noted that hospitals currently billing with the ``JG'' modifier will still be required to change their processes and bill using the ``TB'' modifier by January 1, 2025, presenting an additional unnecessary administrative burden. The commenters stated it is not necessary for CMS to collect the information via the 340B modifier(s) in order to comply with the IRA and that CMS could exclude all drug claims with the status indicator ``K'' that are billed by 340B hospitals from the IRA rebate calculations as a less burdensome alternative. Response: We thank commenters for their feedback. As mentioned above, we note that this continued requirement for the 340B modifier is to identify and exclude 340B-acquired drugs and biologicals from the Part B inflation rebate liability. Many 340B hospitals have been reporting the 340B modifiers since CY 2018, and many hospitals already report a modifier through their State Medicaid program. We believe that the continued requirement for a single 340B modifier on outpatient claims for 340B-acquired drugs would promote consistency between the two programs. We disagree with commenters that CMS could accurately exclude 340B drugs from the IRA rebate calculation without imposing a burden on 340B providers. Some 340B covered entities provide healthcare services to both 340B and non-340B patients, and the payment status indicator ``K'' does not differentiate between340B and non-340B claims. Therefore, the 340B modifier is needed to identify 340B drugs. Comment: Some commenters supported the requirement of a single 340B modifier and agreed a single modifier will simplify the identification of 340B drugs or biologicals and help support reducing duplicate discounts and diversion. They also stated that their study showed 340B participating rural referral centers and sole community centers reported only 61 percent of Part B separately payable products with the applicable 340B modifiers. The commenters noted that there is no penalty for 340B providers that choose not to comply with the policy and recommended that CMS establish a robust audit process with appropriate penalties to deter abuses of the 340B program. They also suggested CMS adopt a ``non-340B'' modifier to enhance enforcement of the policy to report the appropriate modifier, thereby reducing duplicate discounts and diversion. Response: We thank the commenters for their feedback. We are not aware that covered entities are underreporting 340B claims. We note that some 340B covered entities often provide healthcare services to both 340B and non-340B patients, but it is their responsibility to submit accurate claims. Under the False Claims Act 31, U.S.C. 3729- 3733, Medicare has the authority to fine providers who knowingly, willfully, and repeatedly bill inaccurately coded claims. Providers are required to maintain current knowledge of Medicare billing policies and to submit accurate claims. Providers are also required to maintain all documentation to support the validity of the services reported on the claim and ensure this information is available upon request. We noted that we had received a similar suggestion for a ``non- 340B'' modifier in the CY 2018 OPPS/ASC final rule with comment period (82 FR 52508 and 52509). We disagree with the commenters and as noted in the 2018 OPPS/ASC final rule with comment period, we believe a consistent application of the modifier being required for a drug that was purchased under the 340B Program instead of a drug not purchased under the 340B Program will help improve program integrity by helping ensure that hospitals are not receiving ``duplicate discounts'' through both the Medicaid rebate program and the 340B Program. After consideration of the public comments we received, we are finalizing our proposal without modification to require that all 340B covered entity hospitals paid under the OPPS report the ``TB'' modifier effective January 1, 2025, even if the hospital previously reported the ``JG'' modifier, for 340B-acquired drugs and biologicals. We believe the transition to a single 340B modifier ``TB'' will allow for greater simplicity, especially because both modifiers are used for the same purpose to continue to identify and exclude 340B-acquired drugs and biologicals from the definition of units for the purpose of Part B inflation rebate liability. We believe this policy will reduce the burden on providers as they would only have to report one modifier for all scenarios in which a 340B drug is acquired. The ``JG'' modifier will remain effective through December 31, 2024. Hospitals that currently report the ``JG'' modifier may choose to continue to use it in CY 2024 or choose to transition to use of the ``TB'' modifier sooner, provided all hospitals are using the ``TB'' modifier by January 1, 2025.

7. High-Cost/Low-Cost Threshold for Packaged Skin Substitutes

a. Background In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74938), we unconditionally packaged skin substitute products into their associated surgical procedures as part of a broader policy to package all drugs and biologicals that function as supplies [[Page 81793]] when used in a surgical procedure. As part of the policy to package skin substitutes, we also finalized a methodology that divides the skin substitutes into a high-cost group and a low-cost group, to ensure adequate resource homogeneity among APC assignments for the skin substitute application procedures (78 FR 74933). In the CY 2015 OPPS/ ASC final rule with comment period (79 FR 66886), we stated that skin substitutes are best characterized as either surgical supplies or devices because of their required surgical application and because they share significant clinical similarity with other surgical devices and supplies. Skin substitutes assigned to the high-cost group are described by HCPCS codes 15271 through 15278. Skin substitutes assigned to the low- cost group are described by HCPCS codes C5271 through C5278. Geometric mean costs for the various procedures are calculated using only claims for the skin substitutes that are assigned to each group. Specifically, claims billed with HCPCS code 15271, 15273, 15275, or 15277 are used to calculate the geometric mean costs for procedures assigned to the high- cost group, and claims billed with HCPCS code C5271, C5273, C5275, or C5277 are used to calculate the geometric mean costs for procedures assigned to the low-cost group (78 FR 74935). Each of the HCPCS codes described earlier are assigned to one of the following three skin procedure APCs according to the geometric mean cost for the code: APC 5053 (Level 3 Skin Procedures): HCPCS codes C5271, C5275, and C5277; APC 5054 (Level 4 Skin Procedures): HCPCS codes C5273, 15271, 15275, and 15277; or APC 5055 (Level 5 Skin Procedures): HCPCS code 15273. In CY 2023, the payment rate for APC 5053 (Level 3 Skin Procedures) was $580.95, the payment rate for APC 5054 (Level 4 Skin Procedures) was $1,725.86, and the payment rate for APC 5055 (Level 5 Skin Procedures) was $3,253.04. This information is also available in Addenda A and B of the CY 2023 final rule with comment period (87 FR 71748) (Addenda A and B are available on the CMS website: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). We have continued the high-cost/low-cost categories policy since CY 2014, and we proposed to continue it for CY 2024. Under the current policy, skin substitutes in the high-cost category are reported with the skin substitute application CPT codes, and skin substitutes in the low-cost category are reported with the analogous skin substitute HCPCS C-codes. For a discussion of the CY 2014 and CY 2015 methodologies for assigning skin substitutes to either the high-cost group or the low- cost group, we refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 74932 through 74935) and the CY 2015 OPPS/ASC final rule with comment period (79 FR 66882 through 66885). For a discussion of the high-cost/low-cost methodology that was adopted in CY 2016 and has been in effect since then, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434 and 70435). Beginning in CY 2016 and in subsequent years, we adopted a policy where we determined the high-cost/low-cost status for each skin substitute product based on either a product's geometric mean unit cost (MUC) exceeding the geometric MUC threshold or the product's per day cost (PDC) (the total units of a skin substitute multiplied by the mean unit cost and divided by the total number of days) exceeding the PDC threshold. We assigned each skin substitute that exceeded either the MUC threshold or the PDC threshold to the high-cost group. In addition, we assigned any skin substitute with a MUC or a PDC that did not exceed either the MUC threshold or the PDC threshold to the low-cost group (87 FR 71976). However, some skin substitute manufacturers have raised concerns about significant fluctuation in both the MUC threshold and the PDC threshold from year to year using the methodology developed in CY 2016. The fluctuation in the thresholds may result in the reassignment of several skin substitutes from the high-cost group to the low-cost group, which, under current payment rates, can be a difference of over $1,000 in the payment amount for the same procedure. In addition, these interested parties were concerned that the inclusion of cost data from skin substitutes with pass-through payment status in the MUC and PDC calculations would artificially inflate the thresholds. Skin substitute interested parties requested that CMS consider alternatives to the current methodology used to calculate the MUC and PDC thresholds and whether it might be appropriate to establish a new cost group in between the low-cost group and the high-cost group to allow for assignment of moderately priced skin substitutes to a newly created middle group. We share the goal of promoting payment stability for skin substitute products and their related procedures as price stability allows hospitals using such products to more easily anticipate future payments associated with these products. We have attempted to limit year-to-year shifts for skin substitute products between the high-cost and low-cost groups through multiple initiatives implemented since CY 2014, including: establishing separate skin substitute application procedure codes for low-cost skin substitutes (78 FR 74935); using a skin substitute's MUC calculated from outpatient hospital claims data instead of an average of ASP plus 6 percent as the primary methodology to assign products to the high-cost or low-cost group (79 FR 66883); and establishing the PDC threshold as an alternate methodology to assign a skin substitute to the high-cost group (80 FR 70434 through 70435). To allow additional time to evaluate concerns and suggestions from interested parties about the volatility of the MUC and PDC thresholds, in the CY 2018 OPPS/ASC proposed rule (82 FR 33627), we proposed that a skin substitute that was assigned to the high-cost group for CY 2017 would be assigned to the high-cost group for CY 2018, even if it did not exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347). For more detailed information and discussion regarding the goals of this policy and the subsequent comment solicitations in CY 2019 and CY 2020 regarding possible alternative payment methodologies for graft skin substitute products, please refer to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347); the CY 2019 OPPS/ASC final rule with comment period (83 FR 58967 and 58968); and the CY 2020 OPPS/ASC final rule with comment period (84 FR 61328 through 61331). b. Proposals for Packaged Skin Substitutes for CY 2024 For CY 2024, consistent with our policy since CY 2016, we proposed to continue to determine the high-cost/low-cost status for each skin substitute product based on either a product's geometric MUC exceeding the geometric MUC threshold or the product's PDC (the total units of a skin substitute multiplied by the MUC and divided by the total number of days) exceeding the PDC threshold. Consistent with the methodology as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final rules with comment period, we analyzed CY 2022 claims data to calculate the MUC threshold (a weighted average of all skin substitutes' MUCs) and the PDC threshold (a weighted average of all skin substitutes' [[Page 81794]] PDCs). The proposed CY 2024 MUC threshold was $47 per cm\2\ (rounded to the nearest $1) and the proposed CY 2024 PDC threshold was $817 (rounded to the nearest $1). Also, the availability of a HCPCS code for a particular human cell, tissue, or cellular or tissue-based product (HCT/P) does not mean that that product is appropriately regulated solely under section 361 of the PHS Act and the FDA regulations in 21 CFR part 1271. Manufacturers of HCT/Ps should consult with the FDA Tissue Reference Group (TRG) or obtain a determination through a Request for Designation (RFD) on whether their HCT/Ps are appropriately regulated solely under section 361 of the PHS Act and the regulations in 21 CFR part 1271. For CY 2024, as we did for CY 2023, we proposed to assign each skin substitute that exceeds either the MUC threshold or the PDC threshold to the high-cost group. In addition, we proposed to assign any skin substitute that does not exceed either the MUC threshold or the PDC threshold to the low-cost group except that we proposed that any skin substitute product that was assigned to the high-cost group in CY 2023 would be assigned to the high-cost group for CY 2024, regardless of whether it exceeds or falls below the CY 2024 MUC or PDC threshold. This policy was established in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59346 through 59348). For CY 2024, we proposed to continue to assign skin substitutes with pass-through payment status to the high-cost category. We proposed to assign skin substitutes with pricing information but without claims data to calculate a geometric MUC or PDC to either the high-cost or low-cost category based on the product's ASP plus 6 percent payment rate as compared to the MUC threshold. If ASP is not available, we proposed to use WAC plus 3 percent to assign a product to either the high-cost or low-cost category. Finally, if neither ASP nor WAC is available, we proposed to use 95 percent of AWP to assign a skin substitute to either the high-cost or low-cost category. We proposed to continue to use WAC plus 3 percent instead of WAC plus 6 percent to conform to our proposed policy described in section V.B.2.b of the CY 2024 OPPS/ASC proposed rule to establish a payment rate of WAC plus 3 percent for separately payable drugs and biologicals that do not have ASP data available. We proposed that any skin substitute product that is assigned a code in the HCPCS A2XXX series would be assigned to the high-cost skin substitute group including new products without pricing information. New skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series would be assigned to the low-cost category until pricing information is available to compare to the CY 2024 MUC and PDC thresholds. For a discussion of our existing policy under which we assign skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series to the low-cost category until pricing information is available, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70436). Comment: The HOP Panel recommended, and several commenters supported, ending the packaging of the graft skin substitute administration add-on codes (CPT codes 15272, 15274, 15276, and 15278; HCPCS codes C5272, C5274, C5276, and C5278). The HOP Panel and the commenters requested that these codes be assigned to APCs that reflect the estimated costs of these service codes. Commenters claim that packaging the graft skin substitute administration add-on codes eliminates the variation in payment for wound care treatments based on the size of the wound. They assert that providers are discouraged from treating wounds between 26 and 99 cm\2\ and over 100 cm\2\ in the outpatient hospital setting because of the financial losses they experience to provide such care. Commenters believe that packaging graft skin substitute administration add-on codes disrupts the methodology of how the American Medical Association (AMA), the organization that manages CPT service codes, intended graft skin substitute procedures to be paid. The CPT codes describe the actual amount of the graft skin substitute product that is used for an individual service when the amount of product used is 25 cm\2\ or more. Commenters request that providers receive additive payment for the actual amount of skin substitute product used for the individual service as described by both the procedure code and the associated add- on code. Response: We do not agree with the HOP Panel or the commenters that we should pay separately for graft skin substitute add-on codes under the OPPS. The OPPS is a prospective payment system and not a fee-for- service payment system. That means that we generally attempt to make one payment for all of the services billed with the primary medical procedure, including add-on procedures such as the ones described by CPT codes 15272, 15274, 15276, and 15278, and HCPCS codes C5272, C5274, C5276, and C5278. More specifically, we calculate the OPPS payment rate by first calculating the geometric mean cost of the procedure. This calculation includes claims for individual services that used a lower level of resources and claims for individual services that used a higher level of resources. The resulting geometric mean cost will reflect the median service cost for a given medical procedure. Next, we group the medical procedure with other medical procedures with clinical and resource similarity in an APC and calculate the geometric mean of these related procedures to generate a base payment rate for all procedures assigned to the APC. Skin substitutes are surgical supplies and are packaged into the cost of the associated procedure. The application of graft skin substitutes cannot occur unless a graft skin substitute is used. So, the cost of the product will be reflected in the overall cost of the application procedure. A prospective payment system like the OPPS is designed to pay providers the median cost of the primary service they provide, and such a system encourages efficiencies and cost-savings in the administration of health care. However, a prospective payment system is not intended to discourage providers from rendering medically necessary care to patients. For example, it is possible that a provider could experience a financial loss when they perform a service where a patient receives 85 cm\2\ of a graft skin substitute product, but that same provider could see a financial gain when the next patient receives a skin graft where only 10 cm\2\ of product is used. Paying separately for add-on codes for the administration of graft skin substitutes in a prospective payment system defeats the goals of such a payment system. Therefore, we will continue to package the add-on codes for the administration of graft skin substitutes in the OPPS to encourage cost-savings and efficiencies with wound care treatment. If providers are paid at cost or nearly at cost for each individual service they render, there is no incentive for them to control costs. Add-on codes for the administration of graft skin substitutes should be packaged with the primary medical service to be able to establish a median payment rate that gives providers incentives to keep their costs in line with typical providers throughout the Medicare program. The need for cost efficiencies in the application of graft skin substitutes to treat wounds is no different than need for cost efficiencies in other procedures administered in the outpatient hospital setting. Therefore, we believe that add-on codes, including the add-on codes for the administration [[Page 81795]] of graft skin substitutes, should remain packaged to maintain the integrity of the OPPS. Comment: The HOP Panel recommended, and several commenters supported, ensuring that the payment rate for graft skin substitute procedures be the same no matter where on the body the graft skin substitute product is applied to the patient. There are four graft skin substitute application procedures for high-cost skin substitute products (CPT codes 15271, 15273, 15275, and 15277) and a similar four graft skin substitute application procedures for low-cost skin substitute products (HCPCS codes C5271, C5273, C5275, and C5277). Commenters claim that the cost to apply graft skin substitute products does not depend on the location of the wound because the same amount of product is used on the wound and the same clinical resources are used to treat the wound independent of the location of the wound. Other commenters made a similar request, asking that CPT code 15277 (Application of skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area greater than or equal to 100 sq cm; first 100 sq cm wound surface area, or 1 percent of body area of infants and children) that is currently assigned to APC 5054 (Level 4 Skin Procedures) be reassigned to APC 5055 (Level 5 Skin Procedures). That would mean that the two graft skin substitute application procedures for the application of high-cost skin substitute products for wounds greater than 100 cm\2\ (CPT code 15273 and 15277) would be in the same APC. Response: The reason there are four CPT codes describing graft skin substitute application services is that there are different CPT codes for applying graft skin substitutes for wounds up to 100 cm\2\ and for wounds that are greater than 100 cm\2\; and there are different CPT codes for applying graft skin substitutes to the trunk, arms, and legs as compared to the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, fingers, and toes. We appreciate commenters' concerns and note that current codes describing the application of high-cost graft skin substitutes for wounds less than 100 cm\2\ (CPT codes 15271 and 15275) have been assigned to the same APC (5054), and the current codes describing the application of low-cost graft skin substitutes for wounds less than 100 cm\2\ (HCPCS codes C5271 and C5275) have been assigned to the same APC (5053). Because they are currently included in the same APC, the OPPS payment for them is the same; and this payment policy is consistent with the recommendation from the HOP Panel and other commenters. This means for the application of graft skin substitute products up to 100 cm\2\, the location where the graft skin substitute is applied does not affect the payment rate for the service. We note that the code describing the application of high-cost products for wounds that are greater than 100 cm\2\ on the trunk, arms, and legs (CPT code 15273) has been assigned to a higher- paying APC (APC 5055) than the APC assignment for the code describing the application of high-cost graft skin substitute products for wounds greater than 100 cm\2\ on the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hand, feet, fingers, and toes (CPT code 15277), which is assigned to APC 5054. Likewise, the code describing the application of low-cost products for wounds that are greater than 100 cm\2\ on the trunk, arms, and legs (HCPCS code C5273) has been assigned to a higher-paying APC (APC 5054) than the code for the application of low-cost graft skin substitute products for wounds greater than 100 cm\2\ on the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hand, feet, fingers, and toes (HCPCS code C5277), which is assigned to APC 5054. The differences in costs that have determined APC assignments for these services for wounds greater than 100 cm\2\ have been supported by historical cost data. We also note that none of these service codes are in violation of the 2 times rule, which requires that the geometric mean cost of significant items and services within an APC group to be no more than two-times the geometric mean cost of the lowest geometric mean cost for a significant item or service within the same APC group. Comment: The HOP Panel recommended, and several commenters supported, having us realign both the high-cost and low-cost application procedure codes to potentially higher-paying APC groups that reflect the current average sales prices of graft skin substitute products as manufacturers now are required to submit average sales prices for graft skin substitute products. Commenters believe combining ASP prices for graft skin substitutes and the cost of the graft skin substitute application procedures would better reflect the costs of those procedures than our current methodology of using cost data from claims to assign application procedures to APCs. Commenters believe that the product cost information that is packaged into the graft skin substitute application procedures is lower than the ASP price for graft skin substitute products and leads to the graft skin substitute application procedures being assigned APCs with lower payment rates than the actual cost of the procedures. Commenters feel that this approach also may provide more cost stability to the APC assignments for the graft skin substitute application procedures. Response: We disagree with the commenters that using ASP pricing instead of using claims cost data would be a preferrable method for estimating the graft skin substitute product cost of graft skin substitute application procedures. It is unclear from the commenters' suggestion how the product cost of the graft skin substitute would be calculated if not using the charges reported by providers. Presumably, their approach would involve extracting the units of graft skin substitute product used on a particular packaged service and then multiplying by an ASP on file to revise the cost of packaged procedure to reflect the ASP price of the graft skin substitute product units. We do not believe this is a feasible approach for CY 2024, and it appears to be a different approach to pricing one group of packaged supplies as compared to how all other packaged supplies are priced in the OPPS. We normally use a provider's reported charges for supplies and use the appropriate cost-to-charge ratio to estimate the contribution of the supply cost to the overall cost of the procedure. However, we remain open to new payment methodologies. We welcome feedback from interested parties in future rulemaking about how this payment approach could work and why it would improve the pricing of graft skin substitute application procedures. Comment: Two commenters asked that we eliminate the high-cost and low-cost skin substitute groups for graft skin substitute products. Instead, the commenter requested that we no longer policy package skin substitute products in the OPPS. The commenter suggested we should pay for graft skin substitutes separate from the application procedure based on their ASP plus 6 percent price where available. Response: A substantial portion of the cost of a skin substitute graft application procedure is the graft skin substitute product itself, and the cost of the skin substitute graft products is reflected in the cost of the overall procedure. Packaging the cost of graft skin substitute products into the affiliated procedures leads to cost savings and efficiencies in the use of graft skin substitute products. Providers have the opportunity to assess the value of products of varying costs. The payment [[Page 81796]] rates for the application procedures for graft skin substitute products reflect the decisions of providers across the United States between the costs and benefits of all available products and should limit the use of the highest-cost graft skin substitute products over lower-cost products unless the highest-cost products are found to be clinically superior. Packaging of graft skin substitute products helps to reduce costs for graft skin substitute procedures and allows more Medicare resources to be used for other categories of medical services. Comment: The HOP Panel recommended, and several commenters supported, that all new graft skin substitute products be assigned to the low-cost group whether they have a Q-code or an A-code until cost data become available for the product. Commenters believe it is not appropriate that products assigned Q-codes are assigned to the low-cost group while products assigned A-codes are assigned to the high-cost group. Commenters note that A-codes are being assigned to graft skin substitute products that have FDA 510(k) clearance but are not synthetic products, which conflicts with the expectation that only graft skin substitute products that would have been described by the now-deleted HCPCS code C1849 (Skin substitute, synthetic, resorbable, per square centimeter) be assigned to the high-cost group. More broadly, commenters believed that no category of graft skin substitute products should be assigned to the high-cost group until there is cost data supporting that assignment. Response: We appreciate the concerns of the commenters. However, we decided on an approach that would ensure that any graft skin substitute product that could potentially have been described by deleted HCPCS code C1849 be included in the high-cost group. As explained in the CY 2023 OPPS final rule (87 FR 71980 and 71981), we wanted to ensure that graft skin substitute products that were described by HCPCS code C1849 or could potentially be described by HCPCS code C1849 would be granted time to develop the cost data necessary to allow us to determine if the product should stay in the high-cost group, which provides stability for the payment of these graft skin substitute products. We wanted to avoid having products with less than two years of claims data that were originally in the high-cost group be reassigned to the low-cost group simply because of a lack of available data. Also, as discussed in the CY 2023 OPPS final rule (87 FR 71981), the current categorization of skin substitutes as either synthetic or non-synthetic is not mutually exclusive given the expansion of skin substitute products that may contain both biological and synthetic elements. Having products with both biological and synthetic elements leads to difficulty defining which of the products assigned to the A2XXX series would be considered ``synthetic'' and described by HCPCS code C1849. Therefore, for CY 2023, we finalized a policy, which will continue for CY 2024, to assign to the high-cost group any skin substitute product that is assigned a code in the HCPCS A2XXX series including new products without pricing information. This policy gives the broadest definition of products that could have been described by HCPCS code C1849 and ensures that none of those graft skin substitute products would be assigned to the low-cost group until we receive cost data for them. Comment: The HOP Panel recommended, and several commenters supported, our current policy not to assign graft skin substitute products that are not in sheet form (e.g., gel, powder, ointment, foam, liquid, or injected) to any APC group, because these products cannot be reported with the graft skin substitute application codes of CPT codes 15271 through 15278 (the high-cost group) or with HCPCS codes C5271 through C5278 (the low-cost group). Commenters note that skin substitutes that are not in sheet form are used primarily for clinic visits and the debridement of chronic wounds. Also, according to the commenters, the use of skin substitutes that are not in sheet form does not conform to the AMA's directions for the application of skin substitute products. Response: We appreciate the HOP Panel's and the commenters' support of our policy. Comment: One commenter disagreed with the HOP Panel recommendation not to assign graft skin substitute products that are not in sheet form (e.g., gel, powder, ointment, foam, liquid, or injected) to any APC group. The commenter understands that current coding guidelines for CPT codes 15271 through 15278 precludes products that are not in sheet form from being billed with these CPT codes. However, the commenter anticipates that in the future procedure codes for the application of non-sheet products will be created; and the commenter thinks it is best for us to prepare for the establishment of these new procedure codes. Response: We appreciate the views of the commenter, but we did not make any proposals related to payment for application of non-sheet skin substitute products in this year's OPPS proposed rule. We may consider this topic for future rulemaking if CPT or HCPCS codes are established for the application of non-sheet skin substitute products. Comment: Several commenters supported our current skin substitute payment policy to assign graft skin substitute products to either a high-cost or a low-cost group based on the product's cost. Likewise, commenters also supported our policy of keeping graft skin substitute products in the high-cost group once the cost of the product exceeds either the MUC or the PDC threshold for at least one year even if in future years the cost of the product is less than either the MUC or PDC threshold. Response: We appreciate the commenters' support of our policies. Comment: Manufacturers of two products that are not traditional graft skin substitute products requested that their products be assigned to either of the high-cost skin or low-cost skin substitute groups based on the cost of their products. One product is HCPCS code A2014 (Omeza collagen matrix, per 100 mg) that is an amorphous solid, which, according to its manufacturer, Omeza, is used to treat wounds similar to the wounds treated by graft skin substitute products. The second product is HCPCS code A2025 (Miro3d, per cubic centimeter) that is a dry, thick sheet of uncompressed decellularized porcine liver that has enough thickness for its base unit to be a cubic centimeter. According to its manufacturer, Reprise Biomedical, Miro3d must be rehydrated before being applied. Response: We do not believe either HCPCS code A2014 (Omeza collagen matrix, per 100 mg) or HCPCS code A2025 (Miro3d, per cubic centimeter) should be assigned to either the high-cost or low-cost group. Regarding Omeza collagen matrix, an amorphous solid is not a graft skin substitute product even if the product forms a sheet-like layer after application. Therefore, we cannot assign the product to either the high-cost skin or the low-cost skin substitute group. For Miro3d, normally a product with a base unit of cubic centimeter is a liquid product. This is the first product with a base unit of a cubic centimeter that we are aware of to be in solid form. We request further information regarding this product to help us to determine whether Miro3d should be assigned to the high-cost or low-cost skin substitute group in a future OPPS quarterly update, including whether the product could be reported with either CPT codes 15271 [[Page 81797]] through 15278 or HCPCS codes C5271 through C5278. Comment: The manufacturer of the product described by HCPCS code Q4278 (Epieffect, per square centimeter) requested that the product be assigned to the high-cost skin substitute group based on its ASP as reported in a pricing compendium. Response: We request that the manufacturer provide us with the pricing information that they have cited regarding HCPCS code Q4278. Once we receive this information, we will determine if HCPCS code Q4278 should be assigned to the high-cost group. Comment: The manufacturer of the products described by HCPCS codes Q4122 (Dermacell, dermacell awm or dermacell awm porous, per square centimeter) and Q4150 (Allowrap dds or dry, per square centimeter) requested that these graft skin substitute products continue to be assigned to the high-cost skin substitute group for CY 2024. Response: Based on their cost data and our policies, both HCPCS codes Q4122 (Dermacell, dermacell awm or dermacell awm porous, per square centimeter) and Q4150 (Allowrap dds or dry, per square centimeter) will remain in the high-cost group for CY 2024. After consideration of the public comments we received, we are adopting our proposals without modification. Our final policies are to: Continue assign skin substitutes with pass-through payment status to the high-cost category. Assign skin substitutes with pricing information but without claims data to calculate a geometric MUC or PDC to either the high-cost or low-cost category based on the product's ASP plus 6 percent payment rate as compared to the MUC threshold. If ASP is not available for the product, we will use WAC plus 3 percent to assign a product to either the high-cost or low-cost category. Finally, if neither ASP nor WAC is available, we will use 95 percent of AWP to assign a skin substitute to either the high-cost or low-cost category. Continue to use WAC plus 3 percent instead of WAC plus 6 percent to conform to our policy described in section V.B.2.b of this final rule with comment period to establish a payment rate of WAC plus 3 percent for separately payable drugs and biologicals that do not have ASP data available. Assign any skin substitute product that is assigned a code in the HCPCS A2XXX series to the high-cost skin substitute group, including new products without pricing information. New skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series would be assigned to the low-cost category until pricing information is available to compare to the CY 2024 MUC and PDC thresholds. Finally, we have updated the MUC and PDC thresholds for CY 2024. The final MUC threshold will be $47 per cm\2\ (rounded to the nearest $1) and the final PDC threshold will be $807 (rounded to the nearest $1). Table 95 includes the final CY 2024 cost category assignment for each skin substitute product. BILLING CODE 4150-28-P [[Page 81798]] [GRAPHIC] [TIFF OMITTED] TR22NO23.128 [[Page 81799]] [GRAPHIC] [TIFF OMITTED] TR22NO23.129 [[Page 81800]] [GRAPHIC] [TIFF OMITTED] TR22NO23.130 [[Page 81801]] [GRAPHIC] [TIFF OMITTED] TR22NO23.131 [[Page 81802]] [GRAPHIC] [TIFF OMITTED] TR22NO23.132 BILLING CODE 4150-28-C

8. Radioisotopes Derived From Non-Highly Enriched Uranium (non-HEU)

Sources Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Some of the Technetium-99 (Tc-99m), the radioisotope used in the majority of such diagnostic imaging services, has been produced in legacy reactors outside of the United States using highly enriched uranium (HEU). The United States wanted to eliminate domestic reliance on these reactors and has been promoting the conversion of all medical radioisotope production to non-HEU sources. Alternative methods for producing Tc-99m without HEU are technologically and economically viable, but it was expected that this change in the supply source for the radioisotope used for modern medical imaging would introduce new costs into the payment system that were not accounted for in the historical claims data. Therefore, beginning in CY 2013, we finalized a policy to provide an additional payment of $10 for the marginal cost for radioisotopes produced by non-HEU sources (77 FR 68323). Under this policy, hospitals report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium source, full cost recovery add-on per study dose) once per dose along with any diagnostic scan or scans furnished using Tc-99m as long as the Tc-99m doses used can be certified by the hospital to be at least 95 percent derived from non-HEU sources (77 FR 68323). We stated in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68321) that our expectation was that this additional payment would be needed for the duration of the industry's conversion to alternative methods of producing Tc-99m without HEU. We also stated that we would reassess, and propose, if necessary, on an annual basis whether such an adjustment continued to be necessary and whether any changes to the adjustment were warranted (77 FR 68321). A 2016 report from the National Academies of Sciences, Engineering, and Medicine anticipated the conversion of Tc-99m production from non-HEU sources would be completed at the end of 2019.\160\ However, the Secretary of Energy issued a certification effective January 2, 2020, stating that there continued to be an insufficient global supply of molybdenum-99 (Mo-99), which is the source of Tc-99m, produced without the use of HEU, available to satisfy the domestic U.S. market (85 FR 3362). The January 2, 2020, certification was to remain in effect for up to 2 years. --------------------------------------------------------------------------- \160\ National Academies of Sciences, Engineering, and Medicine. 2016. Molybdenum-99 for Medical Imaging. Washington, DC: The National Academies Press. Available at: https://doi.org/10.17226/23563. --------------------------------------------------------------------------- The Secretary of Energy issued a new certification regarding the supply of non-HEU- sourced Mo-99 effective January 2, 2022 (86 FR 73270). This certification stated that there was a sufficient global supply of Mo-99 produced without the use of HEU available to meet the needs of patients in the United States. The Department of Energy also expected that the last HEU reactor that produces Mo-99 for medical providers in the United States would finish its conversion to a non-HEU reactor by December 31, 2022. In CY 2019, we stated that we would reassess the non-HEU incentive payment policy once conversion to non- HEU sources is closer to completion or has been completed (83 FR 58979). There is now a sufficient supply of non-HEU-sourced Mo-99 in the United States, and there is no available supply of HEU-sourced Mo- 99 in the United States. In the CY 2023 OPPS/ASC final rule with comment period, we stated that we believed the conversion to non-HEU sources of Tc-99m had reached a point where it was necessary to reassess our policy of providing an additional payment of $10 for the marginal cost for radioisotopes produced by non-HEU sources (87 FR 71987). In the OPPS, diagnostic radiopharmaceuticals are packaged into the cost of the associated diagnostic imaging procedure no matter the per day cost of the radiopharmaceutical. The cost of the radiopharmaceutical is included as a part of the cost of the diagnostic imaging procedure and is reported through Medicare claims data. Medicare claims data used to set payment rates under the OPPS generally is from 2 years prior to the payment year. As we explained in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71987), the claims data we would use to set payment rates for [[Page 81803]] CY 2024 (likely CY 2022 claims data) contain claims for diagnostic radiopharmaceuticals that reflect both HEU-sourced Tc-99m and non-HEU- sourced Tc99m, rather than radiopharmaceuticals sourced solely from non-HEU Tc-99m. The cost of HEU-sourced Tc-99m is substantially lower than the cost of non-HEU- sourced Tc-99m. Therefore, we explained that providers who use radiopharmaceuticals in CY 2024 that contain only non-HEU-sourced Tc-99m might not receive a payment that is reflective of the radiopharmaceutical's current cost without the add-on payment. We believed that extending the additional $10 add-on payment described by HCPCS code Q9969 for non-HEU-sourced Tc-99m through the end of CY 2024 would ensure adequate payment for non-HEU-sourced Tc-99m. Starting in CY 2025, we believed the Medicare claims data utilized to set payment rates (likely CY 2023 claims data) would only include claims for diagnostic radiopharmaceuticals that utilized non-HEU-sourced Tc- 99m, meaning the data would reflect the full cost of the Tc-99m diagnostic radiopharmaceuticals that would be used by providers in CY 2025. As a result, we believed there would no longer be a need for the additional $10 add-on payment for CY 2025 or future years. This policy was based on the Secretary of Energy's certification that the last HEU reactor that produces Mo-99 for medical providers in the United States would finish its conversion to a non-HEU reactor by December 31, 2022, and that all Tc-99m used for radiopharmaceuticals in 2023 would be produced from non-HEU sources. However, we understand that the conversion of the last HEU reactor that produces Tc-99m to a non-HEU reactor did not occur until March 2023, so it is possible that some claims for diagnostic radiopharmaceuticals in CY 2023 would report the cost of HEU-sourced Tc-99m. This means that in CY 2025, as in CY 2024, there is the possibility that the payment rate for procedures using diagnostic radiopharmaceuticals could be lower than the costs providers will face for these procedures because providers will only have access to non-HEU-sourced Tc-99m. We believe that extending the additional $10 add-on payment described by HCPCS code Q9969 for non-HEU-sourced Tc-99m through the end of CY 2025 rather than the end of CY 2024, as we previously finalized, would ensure adequate payment for non-HEU-sourced Tc-99m now that the conversion from HEU-sourced Tc-99m to non-HEU-sourced Tc-99m is complete. Starting in CY 2026, the Medicare claims data utilized to set payment rates (likely CY 2024 claims data) will only include claims for diagnostic radiopharmaceuticals that utilized non-HEU-sourced Tc- 99m, which means the data will more closely reflect the cost of the Tc- 99m diagnostic radiopharmaceuticals that will be used by providers in CY 2026. As a result, there will no longer be a need for the additional $10 add-on payment for CY 2026 or future years. We proposed to continue the additional $10 payment through December 31, 2025, as, beginning in CY 2026, the Medicare claims data used to set payment rates will reflect the full cost of non-HEU-sourced Tc-99m. Comment: Multiple commenters supported making the additional $10 payment permanent rather than ending it after December 31, 2025. Some of the commenters wanted a permanent $10 payment to help encourage the domestic production of Tc-99m starting in CY 2026. One of the commenters suggested adding a new claim edit to require providers to identify whether the Tc-99m radiopharmaceutical product they use is sourced from non-HEU or HEU reactors to confirm the transition from HEU-sourced to non-HEU-sourced Tc-99m products has been completed. Multiple commenters also requested that the $10 additional payment be increased to an amount that reflects what the payment would have been if it was adjusted annually by the hospital market basket since it was implemented in 2013. The commenters also requested that the copayment amount for HCPCS code Q9969 be eliminated because they are concerned that the administrative burden of handling the beneficiary copayment is discouraging providers from reporting the $10 additional payment. Response: As stated in the CY 2023 OPPS final rule, the purpose of the $10 additional payment is limited to mitigating any adverse impact of transitioning to non-HEU sources (87 FR 71986). As the transition is now complete, we do not think it is necessary to increase the amount of the adjustment for its final two years. Once the transition is complete and payment rates reported for Tc-99m radiopharmaceuticals no longer include costs from HEU-sourced Tc-99m, the original purpose of the $10 additional payment to encourage the use of non-HEU-sourced Tc-99m will be achieved. We will take the comments regarding using the $10 additional payment to encourage the domestic production of Tc-99m into consideration for future rulemaking. We also disagree with the request to waive the copayment for HCPCS code Q9969 as we do not believe the administrative burden associated with collecting copayments in this situation is unique or significant to justify such an action. Providers regularly collect copayments for services paid under the OPPS, and we do not believe that collecting a copayment for the additional $10 payment is a significant added burden for providers. Likewise, we do not agree with the suggestion to require a claim edit to identify a radiopharmaceutical as non-HEU or HEU sourced. We believe such a requirement would likely increase the administrative burden on providers unnecessarily, because the adjustment will only be in place for two more years and very few claims will report Tc-99m radiopharmaceuticals that are HEU sourced. Comment: Multiple commenters supported the portion of our proposal that would continue the $10 additional payment for non-HEU sourced Tc- 99m radiopharmaceuticals through December 31, 2025. Response: We appreciate the support of the commenters. After consideration of the public comments we received, we are finalizing without modification our proposal to continue the additional $10 payment for CYs 2024 and 2025 to ensure providers receive sufficient payment for diagnostic radiopharmaceuticals containing Tc99m until such time as the full cost of non-HEU-sourced Tc-99m is reflected in the Medicare claims data. We also are finalizing without modification our proposal that the additional $10 payment will end after December 31, 2025, as, beginning with CY 2026, the Medicare claims data used to set payment rates will reflect the full cost of non-HEU-sourced Tc-99m.

C. Requirement in the Physician Fee Schedule CY 2024 Proposed Rule for

HOPDs and ASCs To Report Discarded Amounts of Certain Single-Dose or Single-Use Package Drugs Section 90004 of the Infrastructure Investment and Jobs Act (Pub.

L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended

section 1847A of the Act to redesignate subsection (h) as subsection (i) and insert a new subsection (h), which requires manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The CY 2024 PFS proposed rule [[Page 81804]] includes proposals to operationalize section 90004 of the Infrastructure Act, including a proposal that impacts hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs). Similar to our CY 2023 notice in the OPPS/ASC proposed rule (87 FR 71988), we wanted to ensure interested parties were aware of these proposals and knew to refer to the Physician Fee Schedule (PFS) proposed rule for a full description of the proposed policy. Interested parties were asked to submit comments on any proposals related to implementation of section 90004 of the Infrastructure Act on the CY 2024 PFS proposed rule. We stated that public comments on these proposals would be addressed in the CY 2024 PFS final rule with comment period. We note that this same notice appeared in section XIII.D.3 of the proposed rule. As explained in the CY 2024 OPPS/ASC proposed rule (88 FR 49759), because the CY 2024 PFS proposed rule discussed and proposed to codify certain billing requirements for HOPDs and ASCs, we wanted to ensure interested parties were aware of them and knew to refer to that rule for a full description of the proposed policy. Interested parties were asked to submit comments on this and any other proposals to implement section 90004 of the Infrastructure Act in response to the CY 2024 PFS proposed rule. We stated public comments on these proposals would be addressed in the CY 2024 PFS final rule. We thank commenters for their feedback on the proposal. For final details on this policy, we refer readers to the CY 2024 PFS final rule.

A. Amount of Additional Payment and Limit on Aggregate Annual

Adjustment Section 1833(t)(6)(E) of the Act limits the total projected amount of transitional pass-through payment for drugs, biologicals, and categories of devices for a given year to an ``applicable percentage,'' currently not to exceed 2.0 percent of total program payments estimated to be made for all covered services under the OPPS furnished for that year. If we estimate before the beginning of the calendar year that the total amount of pass-through payments in that year would exceed the applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a uniform prospective reduction in the amount of each of the transitional pass-through payments made in that year to ensure that the limit is not exceeded. We estimate the pass-through spending to determine whether payments exceed the applicable percentage and the appropriate pro rata reduction to the conversion factor for the projected level of pass- through spending in the following year to ensure that total estimated pass-through spending for the prospective payment year is budget neutral, as required by section 1833(t)(6)(E) of the Act. For devices, developing a proposed estimate of pass-through spending in CY 2024 entails estimating spending for two groups of items. The first group of items consists of device categories that are currently eligible for pass-through payment and that will continue to be eligible for pass-through payment in CY 2024. The CY 2008 OPPS/ASC final rule with comment period (72 FR 66778) describes the methodology we have used in previous years to develop the pass-through spending estimate for known device categories continuing into the applicable update year. The second group of items consists of devices that we know are newly eligible, or project may be newly eligible, for device pass- through payment in the remaining quarters of CY 2023 or beginning in CY 2024. The sum of the proposed CY 2024 pass-through spending estimates for these two groups of device categories equals the proposed total CY 2024 pass-through spending estimate for device categories with pass- through payment status. We determined the device pass-through estimated payments for each device category based on the amount of payment as required by section 1833(t)(6)(D)(ii) of the Act, and as outlined in previous rules, including the CY 2014 OPPS/ASC final rule with comment period (78 FR 75034 through 75036). We note that, beginning in CY 2010, the pass-through evaluation process and pass-through payment methodology for implantable biologicals newly approved for pass-through payment beginning on or after January 1, 2010, that are surgically inserted or implanted (through a surgical incision or a natural orifice) use the device pass-through process and payment methodology (74 FR 60476). As has been our past practice (76 FR 74335), in the proposed rule, we proposed to include an estimate of any implantable biologicals eligible for pass-through payment in our estimate of pass- through spending for devices. Similarly, we finalized a policy in CY 2015 that applications for pass-through payment for skin substitutes and similar products be evaluated using the medical device pass-through process and payment methodology (76 FR 66885 through 66888). Therefore, as we did beginning in CY 2015, for CY 2024, we also proposed to include an estimate of any skin substitutes and similar products in our estimate of pass-through spending for devices. For drugs and biologicals eligible for pass-through payment, section 1833(t)(6)(D)(i) of the Act establishes the pass-through payment amount as the amount by which the amount authorized under section 1842(o) of the Act (or, if the drug or biological is covered under a competitive acquisition contract under section 1847B of the Act, an amount determined by the Secretary equal to the average price for the drug or biological for all competitive acquisition areas and year established under such section as calculated and adjusted by the Secretary) exceeds the portion of the otherwise applicable fee schedule amount that the Secretary determines is associated with the drug or biological. Consistent with current policy, we proposed to apply a rate of ASP plus 6 percent to most drugs and biologicals for CY 2024, and therefore our estimate of drug and biological pass-through payment for CY 2024 for this group of items was $100 million. Payment for certain drugs, specifically diagnostic radiopharmaceuticals and contrast agents without pass-through payment status, is packaged into payment for the associated procedures, and these products are not separately paid. In addition, we policy-package all non-pass-through drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure, drugs and biologicals that function as supplies when used in a surgical procedure, drugs and biologicals used for anesthesia, and other categories of drugs and biologicals, as discussed in section V.B.1.c of the CY 2024 OPPS/ASC proposed rule (88 FR 49678). Consistent with current policy, we proposed that all of these policy-packaged drugs and biologicals with pass-through payment status will be paid at ASP+6 percent, like other pass-through drugs and biologicals, for CY 2024, less the policy-packaged drug APC offset amount described below. Our estimate of pass-through payment for policy-packaged drugs and biologicals with pass-through payment status approved prior to CY 2024 is not $0. This is because the pass-through payment amount and the fee schedule amount associated with the drug or biological will not be the same, unlike for separately payable drugs and biologicals. In section V.A.6 of the CY [[Page 81805]] 2024 OPPS/ASC proposed rule (88 FR 49675 and 49676), we discuss our policy to determine if the costs of certain policy-packaged drugs or biologicals are already packaged into the existing APC structure. If we determine that a policy-packaged drug or biological approved for pass- through payment resembles predecessor drugs or biologicals already included in the costs of the APCs that are associated with the drug receiving pass-through payment, we proposed to offset the amount of pass-through payment for the policy-packaged drug or biological. For these drugs or biologicals, the APC offset amount is the portion of the APC payment for the specific procedure performed with the pass-through drug or biological, which we refer to as the policy-packaged drug APC offset amount. Consistent with current policy, if we determine that an offset is appropriate for a specific policy-packaged drug or biological receiving pass-through payment, we proposed to reduce our estimate of pass-through payments for these drugs or biologicals by the APC offset amount. Similar to pass-through spending estimates for devices, the first group of drugs and biologicals requiring a pass-through payment estimate consists of those products that were recently made eligible for pass-through payment and that will continue to be eligible for pass-through payment in CY 2024. The second group contains drugs and biologicals that we know are newly eligible, or project will be newly eligible, in the remaining quarters of CY 2023 or beginning in CY 2024. The sum of the CY 2024 pass-through spending estimates for these two groups of drugs and biologicals equals the total CY 2024 pass-through spending estimate for drugs and biologicals with pass-through payment status.

B. Estimate of Pass-Through Spending for CY 2024

For CY 2024, we proposed to set the applicable pass-through payment percentage limit at 2.0 percent of the total projected OPPS payments for CY 2024, consistent with section 1833(t)(6)(E)(ii)(II) of the Act and our OPPS policy from CY 2004 through CY 2023 (87 FR 71989). The pass-through payment percentage limit is calculated using pass-through spending estimates for devices and for drugs and biologicals. For the first group of devices, consisting of device categories that are currently eligible for pass-through payment and will continue to be eligible for pass-through payment in CY 2024, there are 7 active categories for CY 2024. The active categories are described by HCPCS codes C1747, C1761, C1826, C1827, C1831, C1832, and C1833. Based on the information from the device manufacturers, we estimated that HCPCS code C1747 will cost $37.5 million in pass-through expenditures in CY 2024, HCPCS code C1761 will cost $19.6 million in pass-through expenditures in CY 2024, HCPCS code C1826 will cost $7.4 million in pass-through expenditures in CY 2024, HCPCS code C1827 will cost $28.8 million in pass-through expenditures in CY 2024, HCPCS code C1831 will cost $163,436 in pass-through expenditures in CY 2024, HCPCS code C1832 will cost $37,603 in pass-through expenditures in CY 2024, and HCPCS code C1833 will cost $281,238 in pass-through expenditures in CY 2024. Therefore, we proposed an estimate for the first group of devices of $93.7 million. We did not receive any public comments on our proposal. Using our methodology for this final rule with comment period, we estimate that HCPCS code C1747 will cost $37.5 million in pass-through expenditures in CY 2024, HCPCS code C1761 will cost $19.4 million in pass-through expenditures in CY 2024, HCPCS code C1826 will cost $7.4 million in pass-through expenditures in CY 2024, HCPCS code C1827 will cost $28.8 million in pass-through expenditures in CY 2024, HCPCS code C1831 will cost $266,665 in pass-through expenditures in CY 2024, HCPCS code C1832 will cost $44,830 in pass-through expenditures in CY 2024, and HCPCS code C1833 will cost $278,751 in pass-through expenditures in CY 2024. Therefore, we have finalized the CY 2024 spending estimate for this first group of devices of approximately $93.7 million. In estimating our proposed CY 2024 pass-through spending for device categories in the second group, we included the following: (1) device categories that we assumed at the time of the development of the proposed rule would be newly eligible for pass-through payment in CY 2024; (2) additional device categories that we estimated could be approved for pass-through status after the development of the CY 2024 OPPS/ASC proposed rule (88 FR 49696) and before January 1, 2024; and (3) contingent projections for new device categories established in the second through fourth quarters of CY 2024. For CY 2024, we proposed to use the general methodology described in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66778), while also taking into account recent OPPS experience in approving new pass-through device categories. For the CY 2024 OPPS/ASC proposed rule (88 FR 49696), the proposed estimate of CY 2024 pass-through spending for this second group of device categories was $40.4 million. We did not receive any public comments on the proposal. As stated earlier in this final rule with comment period, we are approving four devices for pass-through payment status in the CY 2024 rulemaking cycle: Ambu[supreg] aScope\TM\ 5 Broncho HD; FLEX Vessel PrepTM System; CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath; and CERAMENT[supreg] G. The manufacturers of these systems provided utilization and cost data that indicate the amount of spending for the devices would be approximately $14.4 million for Ambu[supreg] aScope\TM\ 5 Broncho HD; $6.0 million for FLEX Vessel PrepTM System; $5.2 million for CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath; and $8.2 million for CERAMENT[supreg] G. Therefore, we are finalizing an estimate of $33.8 million for this second group of devices for CY 2024. To estimate proposed CY 2024 pass-through spending for drugs and biologicals in the first group, specifically those drugs and biologicals recently made eligible for pass-through payment and continuing on pass-through payment status for at least one quarter in CY 2024, we proposed to use the CY 2022 Medicare hospital outpatient claims data regarding their utilization, information provided in their respective pass-through applications, other historical hospital claims data, pharmaceutical industry information, and clinical information regarding these drugs and biologicals to project the CY 2024 OPPS utilization of the products. For the known drugs and biologicals (excluding policy-packaged diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure, and drugs and biologicals that function as supplies when used in a surgical procedure) that will be continuing on pass-through payment status in CY 2024, we estimated the pass- through payment amount as the difference between the general payment rate of ASP+6 percent and the payment rate for non pass-through drugs and biologicals that would be separately paid. Because we proposed to utilize a payment rate of ASP plus 6 percent for most separately payable drugs and biologicals in the proposed rule, the proposed payment rate difference between the pass-through payment [[Page 81806]] amount and the non pass-through payment amount was $0 for this group of drugs. We did not receive any comments on our proposal. Because payment for policy-packaged drugs and biologicals is packaged if the product is not paid separately due to its pass-through payment status, we proposed to include in the CY 2024 pass-through estimate the difference between payment for the policy-packaged drug or biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP, if ASP or WAC information is not available) and the policy-packaged drug APC offset amount, if we determine that the policy-packaged drug or biological approved for pass-through payment resembles a predecessor drug or biological already included in the costs of the APCs that are associated with the drug receiving pass-through payment. For this first group of policy-packaged drugs and biologicals, we estimated a pass-through for CY 2024 spending of $90 million. We did not receive any public comments on our proposal. Using our methodology for this final rule with comment period, we calculated the CY 2024 spending estimate for this first group of drugs and biologicals of approximately $90 million using a rate of ASP+6 percent, which remained unchanged from the proposed rule. To estimate proposed CY 2024 pass-through spending for drugs and biologicals in the second group (that is, drugs and biologicals that we knew at the time of development of the CY 2024 OPPS/ASC proposed rule (88 FR 49696) were newly eligible or recently became eligible for pass- through payment in CY 2024, additional drugs and biologicals that we estimated could be approved for pass-through status subsequent to the development of the CY 2024 OPPS/ASC proposed rule (88 FR 49696) and before January 1, 2024, and projections for new drugs and biologicals that could be initially eligible for pass-through payment in the second through fourth quarters of CY 2024), we proposed to use utilization estimates from pass-through applicants, pharmaceutical industry data, clinical information, recent trends in the per unit ASPs of hospital outpatient drugs, and projected annual changes in service volume and intensity as our basis for making the CY 2024 pass-through payment estimate. We also proposed to consider the most recent OPPS experience in approving new pass-through drugs and biologicals. Using our proposed methodology for estimating CY 2024 pass-through payments for this second group of drugs, we calculated a proposed spending estimate for this second group of drugs and biologicals of approximately $10 million. We did not receive any public comments on our proposal. Since the release of the CY 2024 OPPS/ASC proposed rule, we have identified two additional policy-packaged drugs in addition to the two policy-packaged drugs that had pass-through status when the proposed rule was released. Therefore, we have identified a total of four policy-packaged drugs that have pass-through status. Our original proposed estimate of $10 million of additional pass-through payments for the second group of drugs and biologicals did anticipate the approval of some of the additional policy-packaged drugs and biologicals with pass-through status, but not all of them. Therefore, for this final rule with comment period, we are revising our estimate of pass-through spending for the second group of drugs and biologicals to be $18.5 million. We estimated for the CY 2024 OPPS/ASC proposed rule (88 FR 49696) that the amount of pass-through spending for the device categories and the drugs and biologicals that are continuing to receive pass-through payment in CY 2024 and those device categories, drugs, and biologicals that first become eligible for pass-through payment during CY 2024 would be approximately $234.1 million (approximately $134.1 million for device categories and approximately $100 million for drugs and biologicals) which represented 0.26 percent of total projected OPPS payments for CY 2024 (approximately $88.6 billion). Therefore, we estimated for the proposed rule that pass-through spending in CY 2024 would not amount to 2.0 percent of total projected OPPS CY 2024 program spending. We estimate for this final rule with comment period that the amount of pass-through spending for the device categories and the drugs and biologicals that are continuing to receive pass-through payment in CY 2024 and the amount of pass-through spending for those device categories, drugs, and biologicals that first become eligible for pass- through payment during CY 2024 would be approximately $236 million (approximately $127.5 million for device categories and approximately $108.5 million for drugs and biologicals), which represents only 0.27 percent of total projected OPPS payments for CY 2024 (approximately $88.9 billion). Therefore, we estimate that pass-through spending in CY 2024 will not exceed the 2.0 percent of total projected OPPS CY 2024 program spending limit provided for in section 1833(t)(6)(E) of the Act.

1. Background

A partial hospitalization program (PHP) is an intensive outpatient program of psychiatric services provided as an alternative to inpatient psychiatric care for individuals who have an acute mental illness, which includes, but is not limited to, conditions such as depression, schizophrenia, and substance use disorders (SUD). Section 1861(ff)(1) of the Act defines partial hospitalization services as the items and services described in paragraph (2) prescribed by a physician and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. Section 1861(ff)(2) of the Act describes the items and services included in partial hospitalization services. Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program furnished by a hospital to its outpatients or by a community mental health center (CMHC), as a distinct and organized intensive ambulatory treatment service, offering less than 24-hour- daily care, in a location other than an individual's home or inpatient or residential setting. Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B), 1833(t)(2)(C), and 1833(t)(9)(A) of the Act and 42 CFR 419.21, for additional information regarding PHP. Partial hospitalization program policies and payment have been addressed under OPPS since CY 2000. In CY 2008, we began efforts to strengthen the PHP benefit through extensive data analysis, along with policy and payment changes by implementing two refinements to the methodology for computing the PHP median. For a detailed discussion on these policies, we refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66670 through 66676). In CY 2009, we implemented several regulatory, policy, and payment changes. For a detailed discussion on these policies, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68688 through 68697). In CY 2010, we retained the two-tier payment approach for partial hospitalization services and used only hospital-based PHP data in computing the PHP APC per diem costs, upon which PHP APC per diem payment rates are based (74 FR 60556 through 60559). In CY 2011 (75 FR 71994), we established four separate PHP APC per diem payment rates: two for CMHCs (APC 0172 and APC 0173) and two for hospital-based PHPs (APC 0175 and APC 0176) and instituted a 2-year transition period for CMHCs to the CMHC APC per diem payment rates. For a detailed discussion, we refer readers to section X.B of the CY 2011 OPPS/ASC final rule with comment period (75 FR 71991 through 71994). In CY 2012, we determined the relative payment weights for partial hospitalization services provided by CMHCs based on data derived solely from CMHCs and the relative payment weights for partial hospitalization services provided by hospital-based PHPs based exclusively on hospital data (76 FR 74348 through 74352). In the CY 2013 OPPS/ASC final rule with comment period, we finalized our proposal to base the relative payment weights that underpin the OPPS APCs, including the four PHP APCs (APCs 0172, 0173, 0175, and 0176), on geometric mean costs rather than on the median costs. For a detailed discussion on this policy, we refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68406 through 68412). In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 and 43622) and CY 2015 OPPS/ASC final rule with comment period (79 FR 66902 through 66908), we continued to apply our established policies to calculate the four PHP APC per diem payment rates based on geometric mean per diem costs using the most recent claims data for each provider type. For a detailed discussion on this policy, we refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75047 through 75050). In the CY 2016, we described our extensive analysis of the claims and cost data and ratesetting methodology, corrected a cost inversion that occurred in the final rule data with respect to hospital-based PHP providers and renumbered the PHP APCs. In CY 2017 OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs and finalized a policy to combine the Level 1 and Level 2 PHP APCs for CMHCs and for hospital- based PHPs. We also implemented an eight-percent outlier cap for CMHCs to mitigate potential outlier billing vulnerabilities. For a comprehensive description of PHP payment policy, including a detailed methodology for determining PHP per diem amounts, we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with comment period (80 FR 70453 through 70455 and 81 FR 79678 through 79680, respectively). In the CYs 2018 and 2019 OPPS/ASC final rules with comment period (82 FR 59373 through 59381, and 83 FR 58983 through 58998, respectively), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs, designated a portion of the estimated 1.0 percent hospital outpatient outlier threshold specifically for CMHCs, and proposed updates to the PHP allowable HCPCS codes. We finalized these proposals in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61352). In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61339 through 61350), we finalized a proposal to use the calculated CY 2020 CMHC geometric mean per diem cost and the calculated CY 2020 hospital- based PHP geometric mean per diem cost, but with a cost floor equal to the CY 2019 final geometric mean per diem costs as the basis for developing the CY 2020 PHP APC per diem rates. Also, we continued to designate a portion of the estimated 1.0 percent hospital outpatient outlier threshold specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS, excluding outlier payments. In the April 30, 2020 interim final rule with comment (85 FR 27562 through 27566), effective as of March 1, 2020, and for the duration of the COVID-19 Public Health Emergency (PHE), hospital and CMHC staff were [[Page 81810]] permitted to furnish certain outpatient therapy, counseling, and educational services (including certain PHP services), incident to a physician's services, to beneficiaries in temporary expansion locations, including the beneficiary's home, so long as the location meets all conditions of participation to the extent not waived. A hospital or CMHC can furnish such services using telecommunications technology to a beneficiary in a temporary expansion location if that beneficiary is registered as an outpatient. In the CY 2023 OPPS/ASC final rule (87 FR 72247), we confirmed these provisions as final, including that they apply only for the duration of the COVID-19 PHE. On May 11, 2023, the COVID-19 PHE ended, and accordingly, these flexibilities ended as well. In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86073 through 86080), we continued our current methodology to utilize cost floors, as needed. Since the final calculated geometric mean per diem costs for both CMHCs and hospital-based PHPs were significantly higher than each proposed cost floor, a floor was not necessary at the time, and we did not finalize the proposed cost floors in the CY 2021 OPPS/ ASC final rule with comment period. In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63665 and 63666), we explained that we observed a number of changes, likely as a result of the COVID-19 PHE, in the CY 2020 OPPS claims that we would have ordinarily used for CY 2022 ratesetting, and this included changes in the claims for partial hospitalization. We explained that significant decreases in utilization and in the number of hospital- based PHP providers who submitted CY 2020 claims led us to believe that CY 2020 data were not the best overall approximation of expected PHP services in CY 2022. Therefore, we finalized our proposal to calculate the PHP per diem costs using the year of claims consistent with the calculations that would be used for other OPPS services, by using the CY 2019 claims and the cost reports that were used for CY 2021 final rulemaking to calculate the CY 2022 PHP per diem costs. In addition, for CY 2022 and subsequent years, we finalized our proposal to use cost and charge data from the Hospital Cost Report Information System (HCRIS) as the source for the CMHC cost-to-charge ratios (CCRs), instead of using the Outpatient Provider Specific File (OPSF) (86 FR 63666). In the CY 2023 OPPS/ASC final rule with comment period (87 FR 71995), we explained that we continued to observe a decrease in the number of hospital-based and CMHC PHP days in our trimmed dataset due to the continued effects of COVID-19, however, the Medicare outpatient service volumes appeared to be returning to more normal, pre-pandemic levels. Therefore, we finalized our proposal to use the latest available CY 2021 claims, but use the cost information from prior to the COVID-19 PHE for calculating the CY 2023 CMHC and hospital-based PHP APC per diem costs. The application of the OPPS standard methodology, including the effect of budget neutralizing all other OPPS policy changes unique to CY 2023, resulted in the final calculated CMHC PHP APC payment rate being unexpectedly lower than the CY 2022 final CMHC PHP APC rate. Therefore, in the interest of accurately paying for CMHC PHP services, under the unique circumstances of budget neutralizing all other OPPS policy changes for CY 2023, and in keeping with our longstanding goal of protecting continued access to PHP services provided by CMHCs by ensuring that CMHCs remain a viable option as providers of mental health care in the beneficiary's own community, we finalized utilizing the equitable adjustment authority of section 1833(t)(2)(E) of the Act to appropriately pay for CMHC PHP services at the same payment rate as for CY 2022, that is, $142.70. In addition, we clarified the payment under the OPPS for new HCPCS codes that designate non-PHP services provided for the purposes of diagnosis, evaluation, or treatment of a mental health disorder and are furnished to beneficiaries in their homes by clinical staff of the hospital would not be recognized as PHP services, however, none of the PHP regulations would preclude a patient that is under a PHP plan of care from receiving other reasonable and medically necessary non-PHP services from a hospital (87 FR 72001 and 72002). Section 4124(a) of Division FF of the CAA, 2023 amends section 1861(ff)(1) of the Act to modify the definition of partial hospitalization services furnished on or after January 1, 2024. Specifically, section 4124(a) of the CAA, 2023 amends section 1861(ff)(1) of the Act by adding to the current definition that partial hospitalization services are ``for an individual determined (not less frequently than monthly) by a physician to have a need for such services for a minimum of 20 hours per week.'' We discuss these revisions to the definition of partial hospitalization services in section VIII.A.2 of this CY 2024 OPPS/ASC final rule.

2. Revisions to PHP Physician Certification Requirements

As amended by section 4124(a) of the CAA, 2023, section 1861(ff)(1) requires that a physician determine that each patient needs a minimum of 20 hours of PHP services per week, and this determination must occur no less frequently than monthly. We proposed to codify this requirement in regulation as an additional requirement for the physician certification applicable for PHP services that we would add to Sec. 424.24(e)(1)(i). We did not propose any changes to the existing physician certification requirements for PHP, including that the patient would require inpatient hospitalization if they did not receive PHP services, which will remain at Sec. 424.24(e)(1)(i). Existing regulations at Sec. 410.43 set forth conditions and exclusions that apply for partial hospitalization services. Under Sec. 410.43(a)(3), partial hospitalization services are services that are furnished in accordance with a physician certification and plan of care as specified under Sec. 424.24(e). Additionally, current patient eligibility criteria at Sec. 410.43(c)(1) state that partial hospitalization programs are intended for patients who require a minimum of 20 hours per week of therapeutic services as evidenced in their plan of care. Because partial hospitalization services are already required to be furnished in accordance with a physician certification and plan of care, we stated in the proposed rule that we believe it is appropriate to include this 20-hour minimum weekly requirement as a physician certification requirement at Sec. 424.24(e)(1)(i). We noted that we do not believe the proposed change to the regulation would create a new requirement for PHPs from a practical perspective, as the change to the definition of partial hospitalization services made by the CAA, 2023 is consistent with the longstanding 20- hour minimum weekly regulatory requirement at Sec. 410.43(c)(1) that Medicare has applied to PHP. We proposed to modify the regulation at Sec. 424.24(e)(1)(i) to require the physician certification for PHP services include a certification that the patient requires such services for a minimum of 20 hours per week. Current regulations at Sec. 424.24(e)(3)(ii) require an initial recertification after 18 days, with subsequent recertifications of PHP services no less frequently than every 30 days. We stated that we believe this interval is consistent with the CAA, 2023 requirement that the physician's [[Page 81811]] determination of the need for PHP services at least 20 hours per week must occur no less frequently than monthly. Comment: Overall, commenters agreed that the proposed modification to the regulation at Sec. 424.24(e)(1)(i) is consistent with the CAA, 2023 requirement that the physician certifies the need for PHP services for at least 20 hours per week. One commenter recommended CMS consider allowing any addiction treatment professional operating within their scope of practice under state regulation to certify the need for PHP for SUD treatment. Response: We appreciate the commenters' support. Section 4124(a) of the CAA, 2023 specifically states that the certification must be determined by a physician. Section 1861(r) of the Act defines ``physician'' as a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action. Therefore, we do not believe we are able to expand the certification of the need for PHP services to any addiction treatment professional. Comment: Commenters recommended that CMS reconsider the timing associated with the initial PHP recertification requirement. Commenters noted section 1861(ff)(1) of the Act, as amended by section 4124(a) of the CAA, 2023, specifies that recertification should occur ``not less frequently than monthly''. The commenters further noted that the current regulation at Sec. 424.24(e)(3)(ii) requires the initial PHP recertification as of the 18th day of partial hospitalization services, which is significantly earlier than one month after the patient begins receiving PHP services. The commenters stated it may be clinically beneficial for the PHP to have more days of furnishing partial hospitalization before determining whether recertification is warranted for the person. Response: We appreciate the commenter's concerns regarding the timing of the first recertification of PHP services. We did not propose to modify the regulation at Sec. 424.24(e)(3)(ii) which requires the first recertification of PHP services occur as of the 18th day of partial hospitalization services. As discussed in the April 2000 OPPS final rule with comment period (65 FR 18454), because partial hospitalization is the outpatient substitute for inpatient psychiatric care, we stated that we believed it was appropriate to adopt the standard used for inpatient psychiatric care at that time. The requirement for initial recertification by the 18th day of an inpatient psychiatric stay was codified in regulation at Sec. 424.14(d)(2) in the March 1988 final rule with comment period (53 FR 6636 and 6637). We later modified the initial recertification interval from 18 days to 12 days. As we explained in the RY 2007 IPF PPS final rule (71 FR 27076 and 27077), the standard for IPF initial recertification was determined by the average length of stay (LOS) for inpatient psychiatric hospitalization in the 1980s, which was 18 days. For RY 2007, we amended the regulation at Sec. 424.14(d)(2) to require the initial recertification for IPF patients as of the 12th day of hospitalization. This change was based on analysis of the MedPAR 2002 claims data for IPF services. Although the timing requirement for inpatient psychiatric hospitalization was shortened, we continue to believe that the current timing requirements for PHP initial recertification--that is, as of the 18th day of PHP services--is appropriate. We note that our analysis shows that 18 days generally corresponds to the median length of stay for PHP patients. Final Decision: After consideration of the public comments we received, we are finalizing our proposed revision to the regulation at Sec. 424.24(e)(1)(i) to require the physician certification for PHP services include a certification that the patient requires such services for a minimum of 20 hours per week.

1. Establishment of Intensive Outpatient Services Benefit by Section

4124 of the CAA, 2023 Section 4124(b) of the CAA, 2023 established Medicare coverage for intensive outpatient services effective for items and services furnished on or after January 1, 2024. Section 4124(b)(1)(A) of the CAA, 2023 amended section 1832(a)(2)(J) of the Act to add intensive outpatient services to the scope of covered benefits provided by CMHCs, and section 4124(b)(1)(B) amended section 1861(s)(2)(B) to add intensive outpatient services to the definition of ``medical and other health services'', specifically, as a service furnished ``incident to a physicians' services.'' Intensive outpatient services are furnished under an intensive outpatient program (IOP). Similar to PHP, an IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness, which includes, but is not limited to, conditions such as depression, schizophrenia, and SUD. Generally speaking, an IOP is thought to be less intensive than a PHP, and the statutory definition of IOP services reflects this difference in intensity. Specifically, section 4124(b)(2)(B) of the CAA, 2023 amended section 1861(ff) of the Act to add a new paragraph (4) to define the term ``intensive outpatient services'' as having the same meaning as ``partial hospitalization services'' in paragraph (1). In particular, intensive outpatient services are the items and services described in paragraph (2) prescribed by a physician for an individual determined (not less frequently than once every other month) by a physician to have a need for such services for a minimum of 9 hours per week and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. For patients of an IOP, section 1835(a)(2)(F)(i) of the Act does not apply, that is, individuals receiving IOP would not require inpatient psychiatric care in the absence of such services. Lastly, section 4124(b)(2)(B) of the CAA, 2023 further added to section 1861(ff)(4)(C), which cross- references paragraph (3), that an IOP is a program furnished by a hospital to its outpatients, or by a community mental health center (CMHC), a Federally qualified health center (FQHC), or a rural health clinic (RHC), as a distinct and organized intensive ambulatory treatment service, offering less than 24-hour-daily care, in a location other than an individual's home or inpatient or residential setting. Section 4124(c) of the CAA, 2023 amends section 1834 of the Act by adding a new paragraph (5) to subsection (o) and a new paragraph (3) to subsection (y), which include special payment rules for intensive outpatient services furnished in FQHCs and RHCs, which are discussed in greater detail in section VIII.F of this final rule with comment period. This final rule establishes payment and program requirements for the IOP benefit in all of the above-described settings. Section VIII.B.2 of this final rule with comment period discusses the scope of benefits for IOP services, and section VIII.B.3 of this final rule with comment period discusses physician certification requirements. Section VIII.C of this final rule with comment period discusses coding and billing for [[Page 81812]] both PHP and IOP services under the OPPS beginning in CY 2024. Section VIII.D of this final rule with comment period discusses the payment methodology. Section VIII.E of this final rule with comment period discusses the outlier policy for CMHCs. Section VIII.F of this final rule with comment period discusses payment for IOP services in FQHCs and RHCs, and section VIII.G of this final rule with comment period discusses payment for IOP services in Opioid Treatment Programs (OTPs).

2. IOP Scope of Benefits

Section 1861(ff)(2) of the Act describes the items and services available under the IOP benefit. These items and services include: individual and group therapy with physicians or psychologists (or other mental health professionals to the extent authorized under State law); occupational therapy requiring the skills of a qualified occupational therapist; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes (which cannot, as determined in accordance with regulations, be self-administered); individualized activity therapies that are not primarily recreational or diversionary; family counseling (the primary purpose of which is treatment of the individual's condition); patient training and education (to the extent that training and educational activities are closely and clearly related to individual's care and treatment); diagnostic services; and such other items and services as the Secretary may provide (excluding meals and transportation) that are reasonable and necessary for the diagnosis or active treatment of the individual's condition, reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization, and furnished pursuant to such guidelines relating to frequency and duration of services as the Secretary shall by regulation establish, taking into account accepted norms of medical practice and the reasonable expectation of patient improvement. Consistent with the statutory definition of intensive outpatient services under section 1861(ff)(2) of the Act, we proposed to add regulations at 42 CFR 410.44 to set forth the conditions and exclusions that would apply for intensive outpatient services. Consistent with the existing regulations for partial hospitalization services, we proposed to require that intensive outpatient services must be furnished in accordance with a physician certification and plan of care. However, where partial hospitalization requires the physician to certify that the services are instead of inpatient hospitalization, intensive outpatient program services are not intended for those who otherwise need an inpatient level of care. That is, section 1861(ff)(4)(A) of the Act, as added by section 4124 of the CAA, 2023, states that for intensive outpatient services, section 1835(a)(2)(F)(i) of the Act shall not apply. As further discussed in section VIII.B.3 of this final rule with comment period, we proposed to add language to the regulation at Sec. 424.24(d), which is currently reserved, that would set forth the physician certification and plan of care requirements for intensive outpatient services. Additionally, we proposed to revise certain existing regulations at Sec. Sec. 410.2, 410.3, 410.10, 410.27, 410.150, and 419.21 to add a regulatory definition of intensive outpatient services and to include intensive outpatient services in the regulations for medical and other health services paid for under Medicare Part B, and in the case of Sec. 419.21, under the OPPS. We proposed to create regulations at Sec. 410.111 to establish the requirements for coverage of IOP services furnished in CMHCs, and at Sec. 410.173 to establish conditions of payment for IOP services furnished in CMHCs. Lastly, we proposed to revise Sec. 410.155 to exclude IOP services from the outpatient mental health treatment limitation, consistent with the statutory requirement of section 1833(c)(2) of the Act, as amended by section 4124(b)(3) of the CAA, 2023. We discuss our proposals and the comments we received in the following paragraphs. a. Definition of Intensive Outpatient Services We proposed the following definition at Sec. 410.2 for intensive outpatient services: Intensive outpatient services means a distinct and organized intensive ambulatory treatment program that offers less than 24-hour daily care other than in an individual's home or in an inpatient or residential setting and furnishes the services as described in Sec. 410.44. Intensive outpatient services are not required to be provided in lieu of inpatient hospitalization. We noted that the proposed definition for intensive outpatient services is consistent with the statutory requirements of section 1861(ff)(3)(A), which apply to both IOP and PHP services. Accordingly, the proposed definition is largely consistent with the existing regulatory definition of partial hospitalization services. However, in accordance with section 1861(ff)(4)(A) of the Act, as added by the CAA, 2023, we included a clarification in the regulatory definition of ``intensive outpatient services'' that they are not required to be provided in lieu of inpatient hospitalization. We stated that we included this clarification in order to more clearly differentiate between the definitions of partial hospitalization and intensive outpatient at Sec. 410.2. Comment: Commenters were generally supportive of the proposed definition at Sec. 410.2 for intensive outpatient services. However, commenters recommended that language specifying IOP represents a less intensive service than partial hospitalization be included in the definition. The commenters stated this addition could avoid any misconception that IOP is substantively different from PHP. Response: We thank commenters for their suggestions. We proposed the regulations for IOP to be similar to PHP due to the similarities of both programs as enacted by section 4124(b) of the CAA, 2023. The key distinctions between IOP and PHP can be found in the proposed regulations at Sec. 424.24(d). The proposed regulations at Sec. 424.24(d) outline the content of certification and plan of treatment requirements for IOP, which differ from PHP requirements. Specifically, proposed regulations at Sec. 424.24(d)(1) do not include a requirement that individuals receiving IOP would require inpatient psychiatric care in the absence of such services, which is required under PHP at Sec. 424.24(e)(1)(i). Additionally, the proposed modification to the PHP regulation at Sec. 424.24(e)(1)(i) requires individuals receiving PHP be certified by a physician to need a minimum of 20 hours per week of such services; while the proposed IOP regulation at Sec. 424.24(d)(1)(i) requires individuals receiving IOP be certified by a physician to need a minimum of 9 hours per week of such services. Therefore, we believe the proposed definition at Sec. 410.2 for intensive outpatient services sufficiently defines an intensive outpatient program. Comment: A few commenters were concerned CMS did not propose to include IOP services furnished remotely. Commenters noted how the availability of remote PHP services during the COVID-19 public health emergency (PHE) has increased access to these services, especially in rural areas. The commenters stated remote IOP services would also be beneficial to increase access to the benefit. Response: We appreciate the comments on how the availability of remote services increased access during the COVID-19 PHE. Section [[Page 81813]] 1861(ff)(3)(A) of the Act does not allow Medicare to pay for partial hospitalization services furnished to beneficiaries in a home or residential setting. As discussed in the CY 2023 OPPS/ASC final rule with comment period (87 FR 72000 through 72002), we did not propose to recognize OPPS remote services, as described in section X.A.5 of the CY 2023 OPPS/ASC final rule with comment period (87 FR 72014 through 72017), as PHP services, because we do not have statutory authority to pay for services furnished in a home or residential setting as partial hospitalization services. However, we clarified that none of the PHP regulations would preclude a patient that is under a PHP plan of care from receiving other reasonable and medically necessary non-PHP services from a hospital. This means that patients in a PHP are not precluded from receiving remote mental health services provided outside of the PHP by the same or another hospital, when such services are reasonable and medically necessary. In response to IOP services being furnished remotely to beneficiaries in their homes, we note that section 1861(ff) of the Act, as amended by section 4124(b)(2)(B) of the CAA, 2023 adopts much of the statutory definition for PHP and applies it to IOP. Specifically, section 1861(ff)(3)(A) prohibits both PHP and IOP services from being furnished other than in an individual's home or in an inpatient or residential setting. However, as we discussed in the CY 2023 OPPS/ASC final rule with comment period for PHP, we are clarifying in this final rule that none of the proposed IOP regulations would preclude a patient that is under an IOP plan of care from receiving other reasonable and medically necessary non-IOP services from a hospital. Additionally, we are reiterating and clarifying in this final rule that we would expect that a physician would update the patient's PHP or IOP plan of care to appropriately reflect any change to the type, amount, duration, or frequency of the therapeutic services planned for that patient in circumstances when a PHP or IOP patient receives non- PHP/IOP remote mental health services from a hospital outpatient department. We also note that the medical documentation should continue to support the patient's eligibility for participation in a PHP or IOP. Final Decision: After consideration of the public comments we received, we are finalizing the proposed definition at Sec. 410.2 for intensive outpatient services: Intensive outpatient services means a distinct and organized intensive ambulatory treatment program that offers less than 24-hour daily care other than in an individual's home or in an inpatient or residential setting and furnishes the services as described in Sec. 410.44. The conditions and exclusions for partial hospitalization services are included in the regulation at Sec. 410.43. We proposed that the conditions and exclusions for intensive outpatient services would be included in new regulations at Sec. 410.44. At new Sec. 410.44, we proposed to establish regulatory language for intensive outpatient services that is consistent with the existing language for partial hospitalization conditions and exclusions and the statutory definition of intensive outpatient services. Specifically, under Sec. 410.44(a) we proposed that IOP services are services that: (1) are reasonable and necessary for the diagnosis or active treatment of the individual's condition; (2) are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization; (3) are furnished in accordance with a physician certification and plan of care as specified under new regulations at Sec. 424.24(d); and include any of the services listed in Sec. 410.44(a)(4). Under Sec. 410.44(a)(4), we include a list of the types of services that we proposed would be covered as intensive outpatient services: Individual and group therapy with physicians or psychologists or other mental health professionals to the extent authorized under State law. Occupational therapy requiring the skills of a qualified occupational therapist, provided by an occupational therapist, or under appropriate supervision of a qualified occupational therapist by an occupational therapy assistant as specified in part 484. Services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients. Drugs and biologicals furnished for therapeutic purposes, subject to the limitations specified in Sec. 410.29. Individualized activity therapies that are not primarily recreational or diversionary. Family counseling, the primary purpose of which is treatment of the individual's condition. Patient training and education, to the extent the training and educational activities are closely and clearly related to the individual's care and treatment. Diagnostic services. The proposed list at Sec. 410.44(a)(4) is based on the list of items and services described in section 1861(ff)(2) of the Act. We note that 1861(ff)(2) of the Act also provides that intensive outpatient services may include such other items and services as the Secretary may provide (but in no event to include meals and transportation). As discussed in section VIII.C of this final rule with comment period, we solicited comments on whether additional codes should be added to the list of services recognized as appropriate for PHP and IOP. We discuss the comments we received and provide our responses in that section of this final rule with comment period, and we note that none of the codes we are adopting in that section of this final rule with comment period necessitate changes to the proposed list at Sec. 410.44(a)(4). In the proposed rule, we further noted that both the statute at section 1861(ff)(2)(C) of the Act and our proposed regulation at Sec. 410.44(a)(4)(iii) refer to ``trained psychiatric nurses, and other staff trained to work with psychiatric patients.'' We explained that under our longstanding policy for partial hospitalization services, we have considered nurses and other staff trained to work with patients within their state scope of practice who are receiving treatment for SUD to be included under this statutory definition and the regulatory definition of PHP at Sec. 410.43(a)(4). We stated that we have heard from interested parties that there could be a misconception that Medicare does not cover PHP for the treatment of SUD. We are clarifying that, in general, notwithstanding the requirement that PHP services are provided in lieu of inpatient hospitalization, Medicare covers PHP for the treatment of SUD, and we consider services that are for the treatment of SUD and behavioral health generally to be consistent with the statutory and regulatory definition of PHP. We clarified in the proposed rule that the terms ``trained psychiatric nurses, and other staff trained to work with psychiatric patients,'' as used in Sec. Sec. 410.43(a)(4) and 410.44(a)(4) would include trained SUD nurses and other staff trained to work with SUD patients. Under Sec. 410.44(b), we proposed that the following services are separately covered and not paid as intensive outpatient services: (1) physician services; (2) physician assistant services; (3) nurse practitioner and clinical nurse specialist services; (4) qualified psychologist services; and (5) services furnished to residents of a skilled nursing facility (SNF). We note that these proposed exclusions are consistent with the services excluded from payment as partial hospitalization [[Page 81814]] program services at Sec. 410.43(b). The services listed under Sec. Sec. 410.43(b) and 410.44(b) would be paid under the applicable systems for such services. Lastly, under Sec. 410.44(c), we proposed to establish patient eligibility criteria for intensive outpatient services. Specifically, we proposed that intensive outpatient services are intended for patients who: (1) require a minimum of 9 hours per week of therapeutic services as evidenced in their plan of care; (2) are likely to benefit from a coordinated program of services and require more than isolated sessions of outpatient treatment; (3) do not require 24-hour care; (4) have an adequate support system while not actively engaged in the program; (5) have a mental health diagnosis; (6) are not judged to be dangerous to self or others; and (7) have the cognitive and emotional ability to participate in the active treatment process and can tolerate the intensity of the intensive outpatient program. We noted that these proposed patient eligibility criteria at Sec. 410.44(c) are consistent with the existing partial hospitalization patient eligibility criteria at Sec. 410.43(c). With respect to the proposed criterion of a ``mental health diagnosis'', we clarified that a mental health diagnosis would include SUD and behavioral health diagnoses generally under both the existing partial hospitalization regulation at Sec. 410.43(c)(5) and the proposed intensive outpatient services regulation at Sec. 410.44(c)(5). As discussed earlier in this section, this inclusion of SUD and behavioral health diagnoses as among the patient eligibility criteria for PHP services is consistent with our longstanding policy. However, we noted that interested parties have raised concerns that this policy may not be clear. Therefore, we clarified that the term ``mental health diagnosis'' as used at both Sec. Sec. 410.43(c)(5) and 410.44(c)(5) would include SUD and behavioral health diagnoses. Comment: Commenters suggested the proposed regulation at Sec. 410.44(a)(2) codifying the condition that IOP services ``are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization'' be modified. Specifically, commenters suggested the regulation at Sec. 410.44(a)(2) be modified to read as follows: ``Are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or worsening of the individual's condition.'' The commenters stated that as IOP is not provided in lieu of hospitalization, more expansive language may be appropriate. Response: We appreciate the concern that commenters raised that more expansive language may be appropriate for patients of an IOP. As discussed above, at new Sec. 410.44, we proposed to establish regulatory language for intensive outpatient services that is consistent with the existing language for partial hospitalization conditions and exclusions and the statutory definition of intensive outpatient services. The regulatory language for IOP and PHP is derived from the language of section 1861(ff)(2) of the Act. We do not believe it is appropriate to revise the language for IOP. Comment: A majority of commenters appreciated the clarification that the terms ``trained psychiatric nurses, and other staff trained to work with psychiatric patients,'' as referenced in Sec. 410.43(a)(4) and proposed Sec. 410.44(a)(4) would include trained SUD nurses and other staff trained to work with SUD patients; however, they requested CMS codify this interpretation in the regulations. Specifically, commenters requested that CMS amend the regulations at Sec. 410.43(a)(4)(i) and (iii), proposed Sec. 410.44(a)(4)(i) and (iii) for PHP and IOP, respectively, to include services furnished by SUD counselors, and reference individuals with mental health or SUD diagnoses. In addition, commenters requested CMS amend Sec. 410.43(c)(5) and proposed Sec. 410.44(c)(5) to reference ``mental health or SUD diagnosis'' as acceptable for both the PHP and IOP benefits. Response: As discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 49700 and 49701) under our longstanding policy for partial hospitalization services, we have considered nurses and other staff trained to work with patients within their state scope of practice who are receiving treatment for SUD to be included under this statutory definition and the regulatory definition of PHP at Sec. 410.43(a)(4). After consideration of the public comments received, and the misconception we have heard that Medicare does not cover PHP for the treatment of SUD, we are finalizing an amendment the PHP regulations at Sec. 410.43(a)(4)(i) and (iii) to include references to SUD professionals and patients with SUD, respectively. Additionally, we are finalizing a modification to the proposed IOP regulations at Sec. Sec. 410.44 (a)(4)(i) and 410.43(a)(4)(iii) to include references to SUD professionals and patients with SUD, respectively. Furthermore, we are finalizing a modification to the PHP regulation at Sec. 410.43(c)(5), as well as the proposed IOP regulation at Sec. 410.44(c)(5), to include references to SUD diagnoses. We remind readers that the inclusion of SUD in these regulations does not change the applicability of any other existing PHP regulations or proposed IOP regulations. In all cases, these services must be reasonable and necessary, furnished in accordance with a physician certification and plan of treatment, and provided by an individual working within his or her scope of practice. Further, in the case of PHP services for the treatment of SUD, such services must be provided in lieu of inpatient hospitalization. Comment: Some commenters requested that CMS amend the regulation at Sec. 410.43(a)(4)(iii) to specifically reference that the services of marriage and family therapists (MFTs) and mental health counselors (MHCs) comprise a portion of partial hospitalization services; while other commenters requested CMS amend the regulatory exclusions at Sec. 410.43(b) and proposed Sec. 410.44(b) of PHP and IOP, respectively, to encompass the professional services of MFTs and MHCs. Response: As we discussed in the 2000 OPPS final rule (65 FR 18452), payment for partial hospitalization services under the OPPS represents the provider's overhead costs, support staff, and the services of clinical social workers (CSWs) and occupational therapists (OTs), whose professional services are considered to be partial hospitalization services for which payment is made to the provider. These same components of cost discussed in that 2000 OPPS final rule were used to determine the per diem costs for both PHP and IOP for this CY 2024 OPPS/ASC final rule. Although we did not propose to name MHCs or MFTs in the regulatory language of Sec. 410.43(a) or Sec. 410.44(a), the services of these providers, when furnished to PHP or IOP patients, would constitute services of ``other mental health professionals'' under Sec. Sec. 410.43(a)(4)(i) and 410.44(a)(4)(i). We did not propose to exclude MHCs or MFTs under Sec. 410.43(b) or Sec. 410.44(b), and in accordance with our longstanding policy, to maintain the historical patterns of treatment billed during the base year, we are clarifying that the services of MFTs and MHCs are considered to be partial hospitalization and intensive outpatient services. The services of MFTs and MHCs should not be billed separately when provided to PHP or IOP patients, because they are included within the overhead costs and costs for support staff which are made [[Page 81815]] to the provider through the per diem PHP or IOP payment. Comment: Commenters requested CMS remove the proposed regulation at Sec. 410.44(c)(4) which states an IOP is intended for patients who have an adequate support system while not actively engaged in the program. Commenters noted that while mental health outcomes are enhanced by a patient's support system, many IOP patients have housing insecurities or are at risk of being housing insecure. The commenters stated conditioning treatment on a patient's support system may prohibit patients from enrolling in an IOP. Response: As discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68695) our goal is to improve the level of service furnished in a PHP day, while also ensuring that the partial hospitalization benefit is being utilized by the appropriate population. In addition, for the program to be fully beneficial, a PHP participant should have a strong support system outside of the PHP program to help to ensure success. We also believe having a strong support system outside of the IOP program to help ensure success will further our goal to improve the level of service across the mental health continuum of care. Final Decision: After consideration of the public comments we received, we are finalizing the proposed regulations at Sec. 410.44 with modifications to include references to SUD. In addition, we are modifying the parallel existing regulations for PHP at Sec. 410.43 to include the same references to SUD. b. Coverage of IOP as Medical and Other Health Services Paid under Part B We proposed to amend the regulation at Sec. 410.10(c) to add a reference to ``intensive outpatient services'' to the list of services that are covered as medical and other health services under Part B, when furnished as hospital or CAH services incident to a physician's professional services. We believe this is consistent with section 1861(s)(2)(B) of the Act, as amended by section 4124(b)(1)(B) of the CAA, 2023 to include ``intensive outpatient services'' under the definition of medical and other health services; specifically, hospital services incident to a physicians' services. We note that the services described at Sec. 410.10(c) are furnished by a hospital or CAH. Accordingly, we proposed conforming changes to the regulations at Sec. 410.27(a)(2) and (e) introductory text to include references to intensive outpatient services. We did not receive any public comments on our proposal, and we are finalizing our proposal without modification to amend the regulation at Sec. 410.10(c) to add a reference to ``intensive outpatient services'' to the list of services that are covered as medical and other health services under Part B, when furnished as hospital or CAH services incident to a physician's professional services. Additionally, we are finalizing our proposal to codify conforming changes to the regulations at Sec. 410.27(a)(2) and (e) introductory text to include references to intensive outpatient services. c. Technical Changes to Codify Requirements for IOP at CMHCs We proposed technical changes to the regulations at 42 CFR parts 488 and 489. First, we proposed to add the statutory basis for IOP at CMHCs at Sec. 488.2. The proposed technical revision would add section 1832(a)(2)(J) of the Act, which sets forth the statutory basis of intensive outpatient services provided by CMHCs at Sec. 488.2. We also proposed to revise the provision at 42 CFR 489.2(c)(2) so that CMHCs may enter into provider agreements to furnish intensive outpatient services. We proposed to revise the current requirement that allows for CMHCs to enter into provider agreements only for the provision of partial hospitalization services. The proposed revisions to this provision would allow CMHCs to enter into provider agreements only to furnish partial hospitalization services and intensive outpatient services. Comment: Commenters expressed concern that there may be a mistaken impression that 42 CFR 489.2 means that the only clinical activities for which an entity enrolled as a CMHC may bill Medicare are PHP and IOP services. The commenters requested CMS clarify that nothing in the CMHC conditions for participation prevents or discourages entities enrolled as CMHCs from also being enrolled in Medicare as Part B suppliers (physician groups) furnishing outpatient behavioral health services covered under the Physician Fee Schedule (PFS). Response: We thank the commenters for raising concerns about a potential misinterpretation of Sec. 489.2 to mean that an entity enrolled as a CMHC may only bill Medicare for PHP and IOP services. In response to these concerns, we are clarifying that nothing in regulation, including the CMHC conditions of participation, prohibits an entity from enrolling as a CMHC and also enrolling in Medicare as a physician group to provide and bill for outpatient behavioral health services under Medicare Part B. In fact, CMHC conditions of participation at Sec. 485.918(b) require CMHCs to provide a broad array of outpatient behavioral health services to the individuals they serve. When billing for PHP or IOP, the CMHC would submit a facility bill for payment under the OPPS at the applicable PHP or IOP per diem rate. When billing for other outpatient behavioral health services under Medicare Part B, including services for PHP and IOP patients that are excluded under Sec. Sec. 410.43(b) and 410.44(b) and paid separately, the billing practitioner would bill for the services provided, subject to all applicable billing requirements under the PFS. We also note that CMHC conditions of participation under part 485, subpart J, apply to all patients of the CMHC, so if a patient is discharged from a PHP or IOP and begins receiving behavioral health services billed under Medicare Part B, the CMHC conditions of participation would continue to apply. Final Decision: After consideration of the public comments we received, we are finalizing our proposals without modification to add the statutory basis for IOP at CMHCs at Sec. 488.2 and to revise the provision at 42 CFR 489.2(c)(2) so that CMHCs may enter into provider agreements to furnish IOP services. d. Technical Changes to Codify Coverage of IOP at CMHCs We proposed several technical changes and additions to the regulations at Sec. Sec. 410.2, 410.3, 410.111, 410.150, and 410.173. First, we proposed to revise the definition of ``Community Mental Health Center (CMHC)'' at Sec. 410.2 to refer to intensive outpatient services. Specifically, we proposed to revise the regulation to state that a CMHC is an entity that provides day treatment or other partial hospitalization services or intensive outpatient services, or psychosocial rehabilitation services. Second, we proposed to revise the definition of ``Participating'' at Sec. 410.2 to refer to intensive outpatient services as services that CMHCs can provide. Specifically, we proposed that ``Participating'' refers to a CMHC that has in effect an agreement to participate in Medicare, but only for the purposes of providing partial hospitalization services and intensive outpatient services. We clarified that the proposed definition would allow a CMHC to be considered a participating provider of both partial hospitalization services and intensive outpatient services, but would not require a CMHC to provide both [[Page 81816]] types of services in order to be considered participating. Comment: Commenters appreciated the clarification that organizations need not furnish both PHP and IOP in order to qualify as a CMHCs and were generally supportive of the proposed regulation at Sec. 410.2 to refer to intensive outpatient services as part of the definition of ``Community Mental Health Center (CMHC)''. However, commenters requested clarification on why the reference to psychosocial rehabilitation is included in the definition of CMHC. The commenters stated their understanding that PHP and IOP are the only two discrete Medicare services for which CMHCs may bill the program under the CMHC enrollment. Response: We appreciate commenters' support of the proposed definition of CMHC at regulation Sec. 410.2. In response to the comments regarding CMHCs providing psychosocial rehabilitation, as discussed in the 1994 interim final rule with comment period (59 FR 6571) section 1916(c)(4) of the Public Health Service (PHS) Act (42 U.S.C. 300x-4(c)(4)) requires a CMHC to provide specialized outpatient services; 24-hour-a-day emergency care services; day treatment, other partial hospitalization services, or psychosocial rehabilitation services; screenings to determine appropriateness of admission to State mental health facilities; and consultation and education services. Accordingly, in that same interim final rule with comment period (59 FR 6577) CMS (formerly known as Health Care Financing Administration (HCFA)) finalized the definition of CMHC in regulation at Sec. 410.2 to include an entity that provides psychosocial rehabilitation services. In addition, we proposed to revise the scope of benefits provision at Sec. 410.3(a)(2) to provide that the covered services for which the Medicare Part B supplementary medical insurance (SMI) program helps pay include partial hospitalization services and intensive outpatient services provided by CMHCs. We believe these proposed changes are consistent with the scope of benefits provision at section 1832(a)(2)(J) of the Act, as amended by section 4124(b)(1)(A) of the CAA, 2023 to include intensive outpatient services, as well as the proposed CMHC conditions of participation at Sec. 485.918(b)(1)(iii). We refer readers to section XVII.B.5 of this final rule with comment period for discussion on the proposed amendments to regulations at Sec. 485.918(b)(1)(iii). We did not receive any public comments on our proposal and are finalizing a revision to the scope of benefits provision at Sec. 410.3(a)(2) to provide that the covered services for which the Medicare Part B supplementary medical insurance (SMI) program helps pay include partial hospitalization services and intensive outpatient services provided by CMHCs. In addition, subpart E of part 410 includes requirements for Community Mental Health Centers (CMHCs) Providing Partial Hospitalization Services. We proposed to modify the subpart E heading to include a reference to intensive outpatient services as well. Under subpart E, we proposed to add a new Sec. 410.111 to set forth Requirements for coverage of intensive outpatient services furnished in CMHCs. We proposed that Medicare Part B would cover IOP services furnished by or under arrangements made by a CMHC if the CMHC has in effect a provider agreement and the services are prescribed by a physician and furnished under the general supervision of a physician, and subject to the proposed physician certification and plan of care requirements under Sec. 424.24(d). We did not receive any public comments on our proposals and are finalizing a modification to the subpart E heading to include a reference to intensive outpatient services, and the addition of a new Sec. 410.111 to set forth Requirements for coverage of intensive outpatient services furnished in CMHCs. Additionally, we proposed to revise Sec. 410.150(b)(13) to include a reference to intensive outpatient services. Specifically, we proposed that payment would be made to a CMHC on an individual's behalf for partial hospitalization services or intensive outpatient services furnished by or under arrangements made by the CMHC. We did not receive any public comments on our proposal and are finalizing a revision to Sec. 410.150(b)(13) to include a reference to intensive outpatient services. We also proposed to add a new Sec. 410.173 to establish conditions of payment for IOP services furnished in CMHCs. We proposed to state that Medicare Part B pays for intensive outpatient services furnished in a CMHC on behalf of an individual only if the following conditions are met: (a) The CMHC files a written request for payment on the CMS form 1450 and in the manner prescribed by CMS; and (b) The services are furnished in accordance with the requirements described in Sec. 410.111. We did not receive any public comments on our proposal and are finalizing the addition of Sec. 410.173 as proposed. Lastly, we proposed to amend Sec. 419.21(c) to refer to intensive outpatient services provided by CMHCs as services for which payment is made under the OPPS. The proposed amendment would be consistent with current regulations at Sec. 419.21(c), which include partial hospitalization services provided by CMHCs. We note that further discussion of the payment methodology under the OPPS for intensive outpatient services is found in section VIII.D of this final rule with comment period. Final Decision: After consideration of the public comments we received, we are finalizing the proposed technical changes and additions to the regulations at Sec. Sec. 410.2, 410.3, 410.111, 410.150, and 419.21 as proposed. e. Exclusion of Intensive Outpatient Services From the Outpatient Mental Health Treatment Limitation Section 1833(c)(2) of the Act, as amended by section 4124(b)(3) of the CAA, 2023, excludes intensive outpatient services that are not directly provided by a physician from the term ``treatment'' for the purposes of the outpatient mental health treatment limitation under section 1833(c)(1) of the Act, similar to partial hospitalization services. Accordingly, we proposed to amend the regulations at Sec. 410.155(b)(2)(iii) to state that intensive outpatient services not directly provided by a physician are not subject to the outpatient mental health treatment limitation. Comment: Commenters were supportive of the proposal to amend the regulations at Sec. 410.155(b)(2)(iii) to state that intensive outpatient services not directly provided by a physician are not subject to the outpatient mental health treatment limitation. However, commenters requested clarification whether the proposed regulation at 42 CFR 410.155(b)(2)(iii) means that the mental health treatment limitation does not apply to the professional services furnished to PHP or IOP participants, under the PHP or IOP plan of care, by clinicians other than physicians even though those services are billed under the Part B PFS rather than the OPPS. Response: Under Sec. 410.155(b)(1), services furnished by physicians and other practitioners, whether furnished directly or incident to those practitioners' services, are subject to the limitation if they are furnished in connection with the treatment of a mental, psychoneurotic, or personality disorder and are furnished to an individual who is not an inpatient of a hospital. This includes services furnished directly by physicians to PHP [[Page 81817]] and IOP patients. However, we are clarifying that since CY 2014, under current regulation at Sec. 410.155(a)(5), 100 percent of the expenses incurred for such services during a calendar year are considered incurred expenses under Medicare Part B when determining the amount of payment and deductible. Final Decision: After consideration of the public comments we received, we are finalizing without modification our proposed regulations at Sec. 410.155(b)(2)(iii) to state that intensive outpatient services not directly provided by a physician are not subject to the outpatient mental health treatment limitation.

3. IOP Certification and Plan of Care Requirements

Section 4124(b)(2)(B) of the CAA, 2023 amended section 1861(ff) of the Act by adding a new paragraph (4) to define intensive outpatient services as the items and services prescribed by a physician for an individual determined (not less frequently than once every other month) by a physician to have a need for such services for a minimum of 9 hours per week. This certification must occur no less frequently than once every other month, and there is no requirement to certify that IOP patients would need inpatient hospitalization if they did not receive such services, which is required for PHP patients. We proposed to codify the content of the certification and plan of treatment requirements for intensive outpatient services at Sec. 424.24(d). Specifically, we proposed to mirror the PHP content of certification and plan of care treatment requirements at Sec. 424.24(e), with the following exceptions: require the content of certification to include documentation that the individual requires such services for a minimum of 9 hours per week (with no requirement for the patient to need inpatient psychiatric care if the IOP services were not provided). The physician's certification of the patient's need for either IOP or PHP services should be based on the physician's determination of the patient's needs and whether the patient meets the IOP or PHP patient eligibility criteria under Sec. 410.44(c) or Sec. 410.43(c), respectively. We noted that the physician's certification should certify the patient's need for either IOP or PHP, and that patients participating in an IOP or PHP should not be under any other IOP or PHP plan of care for the same date of service. The patient's individualized plan of treatment should address all of the conditions that are being treated by the IOP or PHP. Comment: Commenters disagreed that the certification for IOP services should be limited to a physician. Commenters requested that CMS explicitly allow psychiatric nurse practitioners to certify the need for IOP services and plan of care. Response: We understand the commenter's request to expand the certification of IOP services to non-physician mental health professionals. However, section 1861(ff) of the Act, as amended by section 4124(b)(2)(B) of the CAA, 2023, specifically states the certification must be determined by a physician. Section 1861(r) of the Act defines ``physician'' as a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action. Therefore, we do not believe we have the ability to expand the certification of the need for IOP services to psychiatric nurse practitioners or other mental health professionals. Comment: A few commenters requested that CMS revise the minimum hours per week for the IOP program from 9 hours per week to 6 hours per week. The commenters stated that IOPs should be highly flexible and reducing the number of required hours would allow a patient to ``step down'' within the confines of IOP treatment, without immediately jumping to individual mental health services. Response: We appreciate the commenter's suggestions to provide greater flexibility within the mental health continuum of care. However, section 1861(ff) of the Act, as amended by section 4124(b)(2)(B) of the CAA, 2023 specifically states that a patient must require a minimum of 9 hours of IOP services per week. As discussed in section VIII.D.3 of this final rule with comment period, we proposed to apply the three-service payment rate (that is, payment for PHP APCs 5853 for CMHCs and 5863 for hospitals, and IOP APCs 5851 for CMHCs and 5861 for hospitals) for days with three or fewer services while we monitor the initial utilization of IOP services. In addition, patients who do not meet the requirement of needing at least 9 hours per week of IOP services may still receive individual mental health services under the OPPS. Additionally, we proposed to require in the regulation at Sec. 424.24(d)(3)(ii) that the recertification of IOP services occur no less frequently than every 60 days. We stated that we believe the IOP recertification timing of no less frequently than every 60 days is consistent with the requirement in the statute that an individual be determined by a physician to have a need for IOP services ``not less frequently than once every other month'' because the minimum number of days for two consecutive months is 59 days. We stated that we believe that a consistent 60-day interval would be the most appropriate way to implement the statutory recertification requirement for IOP. We solicited public comments on whether it would be appropriate to consider finalizing a shorter interval for the first recertification and for subsequent recertification for IOP patients. For example, we requested comments on whether we should consider requiring an initial recertification by the 30th day of IOP services, and no less frequently than every 60 days thereafter. We requested that commenters provide as much detail as possible about the rationale for a shorter recertification interval, if appropriate. Lastly, we proposed to make conforming changes to Sec. 424.24(b) to add a reference to paragraph (d)(1) in the list of paragraphs that specify the content for which physician certification is required for medical and other health services furnished by providers (and not exempted under Sec. 424.24(a)) which are paid for under Medicare Part B. Comment: Most commenters supported the proposal to require in the regulation at Sec. 424.24(d)(3)(ii) that the recertification of IOP services occur no less frequently than every 60 days. These commenters agreed that the proposal is consistent with the CAA, 2023 requirements and that a shorter than 60-day recertification interval for IOP patients would not be beneficial. A few other commenters stated the recertification interval should be no less frequently than every 30 days. The commenters advocating for a 30-day recertification interval argued that patients at the IOP level of care should be in a significantly more stable condition than at the PHP level of care, and after 30 days of service, should continue to improve their stability. Further, the commenters stated a 60-day recertification interval may encourage a longer length of stay and go against the preference for always keeping the patient at the least restrictive level of care. Response: We appreciate the input from commenters. As we stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49702) we believe that a consistent 60-day interval would be the most appropriate way to implement the statutory recertification requirement for IOP. We intend to monitor the provision of services and lengths of stay in the IOP program, and may consider changes to [[Page 81818]] the IOP recertification interval, if necessary, in future rulemaking. Final Decision: After consideration of the public comments we received, we are finalizing, without modification, our proposal to codify the content of the certification and plan of treatment requirements for intensive outpatient services at Sec. 424.24(d).

1. Condition Code 41 and 92

In the CY 2024 OPPS/ASC proposed rule, we explained that we considered the similarities between the types of items and services covered by both PHP and IOP, and the larger continuum of care, when developing the proposed list of services that we believe would appropriately identify the range of services that IOPs provide to Medicare beneficiaries. Since the statutory definitions of both IOP and PHP generally include the same types of items and services covered, we stated that we believe it is appropriate to align the programs using a consistent list of services, so that level of intensity would be the only differentiating factor between partial hospitalization services and intensive outpatient services. We noted that currently, hospital outpatient departments use condition code 41 to indicate that a claim is for partial hospitalization services. CMHCs do not currently use a condition code on the bill type used--that is, 76X--to indicate that a claim is for partial hospitalization services, because they are only considered a provider of services for partial hospitalization; and therefore, partial hospitalization services are identified by the 76X bill type. We explained that in order to differentiate between IOP and PHP for billing purposes, the National Uniform Billing Committee (NUBC) has approved a new condition code, condition code 92, to identify intensive outpatient claims. Therefore, we proposed to require hospitals and CMHCs to report condition code 92 on claims to indicate that a claim is for intensive outpatient services. We proposed to continue to require hospitals to report condition code 41 for partial hospitalization claims. Additionally, because CMHCs would be permitted to provide both PHP and IOP beginning January 1, 2024, we also proposed to require CMHCs to report condition code 41 for partial hospitalization claims. We stated that we believe this requirement would better allow us to identify which claims are for PHP and which are for IOP. We solicited comment on these proposed reporting requirements for PHP and IOP. Comment: Commenters supported the proposal that hospitals and CMHCs report condition code 41 to identify partial hospitalization claims, and condition code 92 to identify intensive outpatient claims. The commenters agreed with the importance of distinguishing between PHP and IOP claims. Response: We appreciate the commenters' support. Beginning January 1, 2024, we will require the use of condition code 41 on all PHP claims from hospitals and CMHCs and require the use of condition code 92 on all IOP claims from hospitals and CMHCs. We will issue operational guidance explaining the use of these condition codes in further detail.

2. Proposed HCPCS Coding for CY 2024

Under current policy, PHPs submit claims with HCPCS codes to identify the services provided during each PHP day. Therefore, we worked in conjunction with physicians to develop a consolidated list of all HCPCS codes that we believe would appropriately identify the full range of services that both IOPs and PHPs provide to Medicare beneficiaries. For reference, Table 42 includes the current list of HCPCS codes that are recognized for PHP payment. For CY 2024, we proposed to add certain codes to the list, change the descriptions of other codes, and remove one code from the list. The list of proposed consolidated HCPCS codes is included in Table 96. We recognize that the level of intensity of mental health services a patient requires may vary over time; therefore, we believe utilizing a consolidated list of HCPCS codes to identify services under both the IOP and PHP benefits would ensure a smooth transition for patients when a change in the intensity or their services is necessary to best meet their needs. For example, a patient receiving IOP services may experience an acute mental health need that necessitates more intense services through a PHP. Alternatively, an IOP patient that no longer requires the level of intensity provided by the IOP can access less intense mental health services, such as individual mental health services. Therefore, we proposed to add several HCPCS codes that are currently recognized as mental health codes under the OPPS, but are not recognized as PHP codes, to the list of codes that would be recognized for PHP payment. We proposed to maintain all of the existing PHP codes, except for one. We proposed to remove 90865 Narcosynthesis, because we stated that we do not believe this code is widely used in the provision of PHP, and we do not anticipate it would be widely used in the provision of IOP in the future. We proposed that the HCPCS codes listed in Table 43 of the CY 2024 OPPS/ASC proposed rule (88 FR 49704 and 49705) would be payable when furnished by PHPs or IOPs. For reference, this list of codes is reproduced in Table 96 of this final rule with comment period. BILLING CODE 4150-28-P [[Page 81819]] [GRAPHIC] [TIFF OMITTED] TR22NO23.133 [[Page 81820]] [GRAPHIC] [TIFF OMITTED] TR22NO23.134 We proposed to add 18 codes to the list of recognized PHP/IOP codes, as shown in Table 96 of this final rule with comment period. These codes are currently recognized as mental health codes under the OPPS, and we stated we believe it would be appropriate to recognize them for PHP and IOP as well. Additionally, we proposed to update the descriptions of five existing Level II HCPCS codes that are currently recognized for PHP to also refer to IOP. As shown in Table 96, we proposed to add CPT code 90853 Group psychotherapy to the list of service codes recognized for PHP and IOP. We stated we believe there could be overlap between 90853 and two existing Level II HCPCS codes for PHP group psychotherapy, specifically G0410 and G0411. We stated that we considered whether it would be appropriate to remove G0410 and G0411 from the list of recognized service codes for PHP and IOP, and retain only CPT code 90853. We solicited comments on this topic, and were interested in hearing specific reasons commenters believe support either keeping G0410 and G0411 on the list or removing them. We stated that we were particularly interested in understanding whether it would be appropriate to maintain these codes on a temporary basis to provide a transition for existing PHPs that are using these codes. We proposed to use the list of HCPCS codes in Table 96 to determine the number of services per PHP or IOP day, and therefore to determine the APC per diem payment amount for each day, as discussed in section VIII.D of this final rule with comment period. In addition, as discussed in section VIII.D of this final rule with comment period, we proposed to calculate the costs for 3-service and 4-service days based on the list of HCPCS codes in Table 96. We reminded readers that currently, to qualify for payment at the applicable PHP APC (5853 or 5863) one service must be from the Partial Hospitalization Primary list, and we identified the services that are currently included in the Partial Hospitalization Primary list along with those which we proposed to add based on our analysis of the services included on days with three and four services from the proposed list shown in Table 96 of this final rule with comment period. We proposed to maintain this requirement for CY 2024 and subsequent years to qualify for payment at the PHP or IOP APC. Thus, we proposed that to qualify for payment for an IOP APC, at least one service must be from the Partial Hospitalization and Intensive Outpatient Primary list. Specifically, we proposed that to qualify for payment for the IOP APC (5851, 5852, 5861 or 5862) or the PHP APC (5853, 5854, 5863, or 5864) one service must be from the Partial Hospitalization and Intensive Outpatient Primary list, which is reproduced in Table 97 of this final rule with comment period for reference. [[Page 81821]] [GRAPHIC] [TIFF OMITTED] TR22NO23.135 BILLING CODE 4150-28-C Lastly, we proposed that in the future, in the event there are new codes that represent the PHP and IOP services described under Sec. Sec. 410.43(a)(4) and 410.44(a)(4), respectively, we would add such codes to Table 96 through sub-regulatory guidance, and that these codes would be payable when furnished by a PHP or IOP. We note that coding updates frequently occur outside of the standard rulemaking timeline. We proposed this sub-regulatory process in order to pay expeditiously when new codes are created that describe any of the services enumerated at Sec. Sec. 410.43(a)(4) and 410.44(a)(4), which PHPs and IOPs, respectively, would provide. We would identify codes to be added sub-regulatorily if a new code is cross-walked to a previously included code, or if the code descriptor is substantially similar to a descriptor for a code on the list or describes a service on the list. We proposed that any additional services not described at Sec. 410.43(a)(4) or Sec. 410.44(a)(4) would be added to the lists in regulation through notice and comment rulemaking. We invited public comment on the proposed consolidated list of HCPCS codes that would be payable when furnished in a PHP and IOP. As discussed in the following section of this CY 2024 OPPS/ASC final rule, we also solicited comment on any additional codes that we should consider adding. Specifically, we stated that we were interested in hearing from commenters if there are any other existing codes that CMS should consider adding to the list, or new codes that CMS should consider creating, to describe specific services not appropriately described by the codes shown in Table 96 of this final rule with comment period. Comment: Commenters supported the removal of 90865 Narcosynthesis and agreed this code is not widely used in the provision of PHP. The commenters also supported a consolidated list of HCPCS codes that would align both the PHP and IOP benefits. Response: We appreciate the commenters' support. After consideration of the public comments we received, we are finalizing the removal of 90865 Narcosynthesis from the list of HCPCS codes applicable for PHP and IOP. Comment: One commenter expressed support for adding 90839 (Psytx crisis initial 60 min) to the PHP and IOP code list, but also requested that CMS include 90840 (Psytx crisis ea addl 30 min) to recognize the time associated with additional crisis psychotherapy services. Response: We appreciate the commenter's suggestion, and we agree that this code would be appropriate to recognize for PHP and IOP. We have [[Page 81822]] included 90840 (Psytx crisis ea addl 30 min) in Table 98 of this final rule with comment period. Comment: Commenters supported adding 90853 (Group psychotherapy) as well as maintaining G0410 (Grp psych partial hosp/IOP 45-50) and G0411 (Inter active grp psych PHP/IOP) on the list of HCPCS codes applicable to PHP and IOP. The commenters stated there are differences in the application and descriptions between these codes. Accordingly, commenters stated including codes G0410, G0411, and 90853 on the list would avoid unintentional billing errors. Response: We appreciate the commenters' input. After consideration of the public comments we received, we are finalizing adding code 90853 Group psychotherapy and maintaining G0410 and G0411 on the list of HCPCS codes applicable to PHP and IOP. We intend to monitor the utilization of these codes and may consider changes in future rulemaking, if necessary. Comment: Commenters supported adding codes to the list of HCPCS applicable for PHP and IOP through a sub-regulatory process when the codes added describe a service already enumerated at Sec. 410.43(a)(4) or Sec. 410.44(a)(4). Response: We appreciate the commenters' support. After consideration of the public comments we received, we are finalizing our proposal to add codes to the list of HCPCS applicable for PHP and IOP through a sub-regulatory process when the codes to be added describe a service already enumerated at Sec. 410.43(a)(4) or Sec. 410.44(a)(4). Comment: Commenters did not support the proposal requiring that to qualify for payment for the IOP APC (5851, 5852, 5861 or 5862) one service must be from the Partial Hospitalization and Intensive Outpatient Primary list. The commenters stated that the requirement of a primary service may undermine the flexibility to provide the full scope of services within IOP. Commenters suggested CMS review utilization data to determine which services should be added or removed from the Partial Hospitalization and Intensive Outpatient Primary Services list. Response: While we appreciate commenters' input, we disagree that requiring one service from the Partial Hospitalization and Intensive Outpatient Primary list in order to qualify for payment for under IOP may undermine the flexibility to provide the full scope of services. To ensure program integrity, we expect that at least one of the services on the Partial Hospitalization and Intensive Outpatient Primary list will be indicated per day for patients who need the level of care offered by a PHP or IOP program. Final Decision: After consideration of the public comments we received, we are finalizing our proposal to add code 90853 Group psychotherapy, as well as to maintain G0410 and G0411 on the list of HCPCS codes applicable to PHP and IOP, as well as to add additional codes describing a service already enumerated at Sec. 410.43(a)(4) or Sec. 410.44(a)(4) through a sub-regulatory process. Further, we are finalizing that at least one service must be from the Partial Hospitalization and Intensive Outpatient Primary Services list to qualify for payment for the PHP or IOP APC. The final list of Partial Hospitalization and Intensive Outpatient Primary Services is found in table 99 of this final rule with comment period.

3. Additional HCPCS Codes Considered for CY 2024 in Response to

Comments As we noted in the prior section, we solicited comment in the CY 2024 OPPS/ASC proposed rule on any additional codes that we should consider adding to the list of HCPCS Applicable for PHP and IOP. Specifically, we stated that we were interested in hearing from commenters if there are any other existing codes that CMS should consider adding to the list, or new codes that CMS should consider creating, to describe specific services not appropriately described by the codes shown in Table 96 of this final rule with comment period. We provided some examples of such services for public consideration and comment, including caregiver-focused services, services of peer support specialists, and services related to discharge planning and care coordination. In addition, commenters suggested additional services for consideration, as discussed in the following sections. a. Caregiver-Focused Services In the proposed rule, we explained that we were particularly interested in whether it would be appropriate to include caregiver- focused services in the list of recognized services for PHP and IOP. We identified and solicited comment on including the following HCPCS codes describing services related to caregivers: 96202 multiple -family group behavior management/ modification training for parents(s) guardians(s) caregivers(s) with a mental or physical health diagnosis, administered by a physician or other QHP without the patient present, face to face up to 60 minutes. 96203 each additional 15 minutes. 96161 administration of caregiver-focused health risk assessment instrument (that is, depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument. 9X015 CAREGIVER TRAINING 1ST 30 MIN 9X016 CAREGIVER TRAINING EA ADDL 15 9X017 GROUP CAREGIVER TRAINING We noted that the CMHC conditions of participation at Sec. 485.916(b) and (c) already include references to the role of caregivers in the development and implementation of the individualized treatment plan for PHP patients, and we referred readers to section XVII.B.4 of the CY 2024 OPPS/ASC proposed rule for discussion of proposed amendments to the regulations at Sec. 485.916(d). We solicited comments on whether it would be appropriate to include costs for such services in the calculation of PHP and IOP per diem payment rates. We noted that if we were to include such services, we believe it would be appropriate to exclude them from the determination of the number of services provided per day, but we could include such services in the calculation of cost per day for determining the PHP and IOP payment rates. Comment: Many commenters supported the inclusion of caregiver- focused services, such as codes 96202, 96203, 96161, 9X015, 9X016, and 9X017, in the list of recognized services for PHP and IOP. A majority of commenters advocated for both including caregiver-focused services in the cost per day and in the determination of the number of services provided per day. One commenter supported including caregiver-focused services in the cost per day but excluding them from the determination of number of services provided per day. Response: In light of commenters' input, we are adopting the identified codes for caregiver-focused services in the final consolidated list of HCPCs codes recognized for PHP and IOP. We note that placeholder codes 9X015, 9X016, and 9X017 have been replaced with CPT codes 97550, 97551, and 97552 respectively. We believe that including caregiver services as covered under the PHP and IOP benefits supports the directive to consider family caregivers across policies and programs under the Executive Order on Increasing [[Page 81823]] Access to High-Quality Care and Supporting Caregivers.\163\ --------------------------------------------------------------------------- \163\ https://www.whitehouse.gov/briefing-room/presidential-actions/2023/04/18/executive-order-on-increasing-access-to-high-quality-care-and-supporting-caregivers/. --------------------------------------------------------------------------- We believe that these services can be appropriately considered patient training and education services under Sec. Sec. 410.43(a)(4)(vii) and 410.44(a)(4)(vii), and therefore we are not making any changes to the conditions and exclusions for PHP or IOP in adopting these codes. When these codes are reported, they will not count toward payment for a 3-service or 4-service day; however, we will include the costs associated with providing such services when calculating the PHP and IOP payment rates in future years. b. Discharge and Transition Planning In addition, we solicited comments on whether it would be appropriate to add services related to coordinating a patient's discharge from a PHP or IOP, or their transition from one level of care to another. We note that current regulations require physicians, hospitals, and CMHCs to address discharge planning for PHP patients, and we proposed the same requirements for IOP patients. Specifically, physician recertification requirements for PHP at Sec. 424.24(e)(3)(iii)(C) state that the physician's recertification must address treatment goals for coordination of services to facilitate discharge from the partial hospitalization program. We noted that we proposed the same requirement for IOP at Sec. 424.24(d)(3)(iii)(C), which we are finalizing in this final rule. Additionally, hospital CoPs at Sec. 482.43, which apply to hospital outpatient departments providing PHP and IOP, and CMHC CoPs at Sec. 485.914(e), require appropriate discharge planning to meet each patient's needs. We solicited comments on whether the proposed codes shown in Table 96 of this final rule with comment period represent the services that PHPs and IOPs provide to support transition and discharge planning for their patients, or whether we should consider additional codes. We asked commenters to provide as much detail as possible about the nature of any additional services, and whether there are any existing codes that could describe such services. Comment: Commenters supported the inclusion of services related to discharge and transition between one level of care to another. Specifically, commenters suggested codes for discharge-related services, care coordination, and case management services, such as 99484 (Coordinated care services/care coordination). One commenter suggested codes 99424-99427 (Principal care management services), 99437 and 99439 (Chronic care management services), and 99489-99491 (Complex chronic care management services). Commenters stated these services are especially important for patients with co-occurring conditions that are being treated in multiple settings simultaneously. Several commenters recommended that CMS recognize proposed coding for Principal Illness Navigation (PIN), social determinants of health (SDOH) risk assessment, and community health integration (CHI) under the Physician Fee Schedule as PHP and IOP codes. Response: We thank commenters for their suggestions to consider adopting PIN, CHI, and SDOH risk assessment codes, which are described in the CY 2024 Physician Fee Schedule proposed rule (88 FR 52325 through 52336), for inclusion in the list of PHP and IOP codes. As discussed in the CY 2024 PFS proposed rule (88 FR 52325), the proposed PIN, CHI, and SDOH risk assessment codes are intended to better identify and value practitioners' work when they incur additional time and resources helping patients with serious illnesses navigate the healthcare system or removing health-related social barriers that are interfering with the practitioner's ability to execute a medically necessary plan of care. CMS proposed the following descriptions for CHI codes: GXXX1 Community health integration services performed by certified or trained auxiliary personnel, including a community health worker, under the direction of a physician or other practitioner; 60 minutes per calendar month, in the following activities to address social determinants of health (SDOH) need(s) that are significantly limiting ability to diagnose or treat problem(s) addressed in an initiating E/M visit: Person-centered assessment, performed to better understand the individualized context of the intersection between the SDOH need(s) and the problem(s) addressed in the initiating E/M visit. ++ Conducting a person-centered assessment to understand patient's life story, strengths, needs, goals, preferences and desired outcomes, including understanding cultural and linguistic factors. ++ Facilitating patient-driven goalsetting and establishing an action plan. ++ Providing tailored support to the patient as needed to accomplish the practitioner's treatment plan. Practitioner, Home-, and Community-Based Care Coordination. ++ Coordinating receipt of needed services from healthcare practitioners, providers, and facilities; and from home- and community- based service providers, social service providers, and caregiver (if applicable). ++ Communication with practitioners, home- and community-based service providers, hospitals, and skilled nursing facilities (or other health care facilities) regarding the patient's psychosocial strengths and needs, functional deficits, goals, preferences, and desired outcomes, including cultural and linguistic factors. ++ Coordination of care transitions between and among health care practitioners and settings, including transitions involving referral to other clinicians; follow-up after an emergency department visit; or follow-up after discharges from hospitals, skilled nursing facilities or other health care facilities. ++ Facilitating access to community-based social services (e.g., housing, utilities, transportation, food assistance) to address the SDOH need(s). Health education--Helping the patient contextualize health education provided by the patient's treatment team with the patient's individual needs, goals, and preferences, in the context of the SDOH need(s), and educating the patient on how to best participate in medical decision-making. Building patient self-advocacy skills, so that the patient can interact with members of the health care team and related community-based services addressing the SDOH need(s), in ways that are more likely to promote personalized and effective diagnosis or treatment. Health care access/health system navigation ++ Helping the patient access healthcare, including identifying appropriate practitioners or providers for clinical care and helping secure appointments with them. Facilitating behavioral change as necessary for meeting diagnosis and treatment goals, including promoting patient motivation to participate in care and reach person-centered diagnosis or treatment goals. Facilitating and providing social and emotional support to help the patient cope with the problem(s) addressed in the initiating visit, the SDOH need(s), and adjust daily routines to better meet diagnosis and treatment goals. [[Page 81824]] Leveraging lived experience when applicable to provide support, mentorship, or inspiration to meet treatment goals. GXXX2--Community health integration services, each additional 30 minutes per calendar month (List separately in addition to GXXX1). CMS proposed the following description for PIN codes: GXXX3 Principal Illness Navigation services by certified or trained auxiliary personnel under the direction of a physician or other practitioner, including a patient navigator or certified peer specialist; 60 minutes per calendar month, in the following activities: Person-centered assessment, performed to better understand the individual context of the serious, high-risk condition. ++ Conducting a person-centered assessment to understand the patient's life story, strengths, needs, goals, preferences, and desired outcomes, including understanding cultural and linguistic factors. ++ Facilitating patient-driven goal setting and establishing an action plan. ++ Providing tailored support as needed to accomplish the practitioner's treatment plan. Identifying or referring patient (and caregiver or family, if applicable) to appropriate supportive services. Practitioner, Home, and Community-Based Care Coordination ++ Coordinating receipt of needed services from healthcare practitioners, providers, and facilities; home- and community-based service providers; and caregiver (if applicable). ++ Communication with practitioners, home-, and community-based service providers, hospitals, and skilled nursing facilities (or other health care facilities) regarding the patient's psychosocial strengths and needs, functional deficits, goals, preferences, and desired outcomes, including cultural and linguistic factors. ++ Coordination of care transitions between and among health care practitioners and settings, including transitions involving referral to other clinicians; follow-up after an emergency department visit; or follow-up after discharges from hospitals, skilled nursing facilities or other health care facilities. ++ Facilitating access to community-based social services (e.g., housing, utilities, transportation, food assistance) as needed to address SDOH need(s). Health education--Helping the patient contextualize health education provided by the patient's treatment team with the patient's individual needs, goals, preferences, and SDOH need(s), and educating the patient (and caregiver if applicable) on how to best participate in medical decision-making. Building patient self-advocacy skills, so that the patient can interact with members of the health care team and related community-based services (as needed), in ways that are more likely to promote personalized and effective treatment of their condition. Health care access/health system navigation. ++ Helping the patient access healthcare, including identifying appropriate practitioners or providers for clinical care, and helping secure appointments with them. ++ Providing the patient with information/resources to consider participation in clinical trials or clinical research as applicable. Facilitating behavioral change as necessary for meeting diagnosis and treatment goals, including promoting patient motivation to participate in care and reach person-centered diagnosis or treatment goals. Facilitating and providing social and emotional support to help the patient cope with the condition, SDOH need(s), and adjust daily routines to better meet diagnosis and treatment goals. Leverage knowledge of the serious, high-risk condition and/or lived experience when applicable to provide support, mentorship, or inspiration to meet treatment goals. GXXX4--Principal Illness Navigation services, additional 30 minutes per calendar month (List separately in addition to GXXX3). CMS proposed the following description for SDOH risk assessment: GXXX5, Administration of a standardized, evidence-based Social Determinants of Health Risk Assessment, 5-15 minutes, not more often than every 6 months We note that placeholder codes GXXX1 and GXXX2 have been replaced with GCPCS codes G0019 and G0022, respectively; placeholder codes GXXX3 and GXXX4 have been replaced with HCPCS codes G0023 and G0024 respectively; and placeholder code GXXX5 has been replaced with HCPCS code G0136. As described above, all of these proposed codes include activities related to addressing social needs. Both PIN and CHI include certain care coordination activities and care transitions for the patient. However, there are distinct differences in the primary focus of PIN and CHI codes. As discussed in the CY 2024 PFS proposed rule (88 FR 52334), CMS proposed that in order to bill for PIN, time spent providing such services must be documented in the medical record in its relationship to the serious, high-risk illness. On the other hand, in the case of CHI services, CMS proposed that time spent providing such services must be documented in the patient's medical record in its relationship to the SDOH need(s) they are intended to address and the clinical problem(s) they are intended to help resolve (88 FR 52329). As discussed in the CY 2024 Physician Fee Schedule proposed rule (88 FR 52335), CMS proposed that a practitioner could bill separately for other care management services during the same month as PIN or CHI, if time and effort are not counted more than once, requirements to bill the other care management services are met, and the services are medically reasonable and necessary. However, in the case of a patient participating in a PHP or IOP, we anticipate that the time and effort of facility staff in addressing the components of PIN services would generally be duplicative of the time and effort of providing CHI services. Furthermore, because PIN also includes an assessment of and activities related to addressing social needs, we believe that for PHP and IOP patients, the time and effort of facility staff associated with PIN services would generally be duplicative of the time and effort of providing SDOH risk assessment services. We believe PIN would generally be the most appropriate code for patients participating in a PHP or IOP, because a patient's participation in one of these programs indicates the presence of a serious, high-risk mental health condition (inclusive of SUD). In addition, participation in a PHP or IOP requires certification and periodic recertification of the need for such services by a physician, which we believe is analogous to an initiating visit that is required for PIN services billed under the PFS. Therefore, after consideration of the public comments we received, we are adopting PIN services as applicable for PHP and IOP. We believe the PIN services described by codes G0023, G0024 appropriately describe the broad range of services that PHP and IOP staff provide to program participants each patient month, which include discharge and transition planning, care coordination, and case management services within PHPs and IOPs. We note that as discussed in the CY 2024 PFS final rule, CMS is removing references to peer support specialists from the final descriptions for G0023 and G0024, and is finalizing separate codes that better represent the [[Page 81825]] scope of practice for peer support specialists. In addition, we note that these PIN services are reported monthly and represent time spent throughout the month; therefore, we will not count PIN services in the evaluation of whether a PHP or IOP day receives the 3-service or 4-service day for payment; however, we intend to analyze utilization and cost data for these services and consider any payment changes in future rulemaking to better recognize such costs. We are not adopting SDOH risk assessment or CHI services described by G0136, G0019, and G0022 because we believe the inclusion of these codes would likely be duplicative of PIN services for a patient participating in a PHP or IOP. With respect to the principal care management, chronic care management, and complex chronic care management services that commenters suggested, we discussed these recommendations with CMS medical officers and have determined these services are more appropriate for the primary care setting, rather than a defined program of services like a PHP or IOP. c. Peer Support Specialists Additionally, we solicited comments in the proposed rule on peer services, and whether these would be appropriate to include for PHPs and IOPs. Peer support workers are people who have been successful in the recovery process who help others experiencing similar situations. Through shared understanding, respect, and mutual empowerment, peer support workers help people become and stay engaged in the recovery process and reduce the likelihood of relapse. Peer support services can effectively extend the reach of treatment beyond the clinical setting into the everyday environment of those seeking a successful, sustained recovery process. Peer support workers typically engage in a wide range of activities, including: advocating for people in recovery; sharing resources and building skills; building community and relationships; leading recovery groups; and mentoring and setting goals.\164\ We stated in the CY 2024 OPPS/ASC proposed rule that we were interested in information about any available codes that would appropriately describe such services. --------------------------------------------------------------------------- \164\ https://www.samhsa.gov/brss-tacs/recovery-support-tools/peers. --------------------------------------------------------------------------- Comment: Commenters strongly supported the inclusion of peer support services in the list of codes recognized for PHP and IOP. Response: As discussed above, we are adopting coding for PIN services. Additionally, as discussed in the CY 2024 PFS final rule, CMS is finalizing additional PIN codes which describe the set of services that are within the scope of practice of peer support specialists. As shown in Table 98 of this final rule with comment period, we are adopting these codes as applicable for PHP and IOP. We believe it is appropriate to recognize the services of peer support specialists working within the scope of practice for which they are licensed or certified under applicable State law, or meeting the requirements set forth in the CY 2024 PFS final rule if no applicable State requirements exist, as the services of staff trained to work with psychiatric patients, which is included under section 1861(ff)(2)(c) and which we have codified under the PHP benefit at Sec. 410.43(a)(4)(iii) and are finalizing under the IOP benefit at Sec. 410.44(a)(4)(iii) in this final rule. As we noted above for PIN services, these peer support PIN service codes are reported monthly and represent time spent throughout the month; therefore, we will not count them in the evaluation of whether a PHP or IOP day receives the 3-service or 4-service day for payment; however, we intend to analyze utilization and cost data for these services and consider any payment changes in future rulemaking to better recognize such costs. d. Testing and Diagnostic Services We noted in the proposed rule that our analysis of PHP claims showed that the provision of testing and diagnostic services is very low among PHPs, although such services are covered under the PHP benefit. We included testing and diagnostic services in the proposed list of codes shown in Table 96 of this final rule with comment period, and we proposed to cover such services under the IOP benefit as well. We noted that our analysis of non-PHP days with 3 and 4 services, which we believe could represent IOP days in the future, shows a higher provision of testing and diagnostic services than is found among PHP days. We stated that we believe testing and diagnostic services would be included as component services of PHPs and IOPs, and we are interested in information from the public about why PHPs are not more frequently billing for these services. In particular, we welcomed information from commenters about whether there are specific challenges that PHPs face in providing these services, as well as whether there are different codes, other than those shown in Table 96 of this final rule with comment period, that could better describe the testing and diagnostic services that are provided to PHP patients. In addition, we stated that we are interested in understanding whether these services are typically provided by an entity other than the PHP, such as by a referring provider. Comment: Commenters provided useful information about why PHPs are not more frequently billing for testing and diagnostic services. Specifically, the commenters stated that the vast majority of PHPs and IOPs are generally designed to treat common types of behavioral health issues and typically focus on depression, anxiety, bipolar disorder, and self-harm. Commenters stated that testing and diagnostic services are usually more common in specialty programs such as eating disorders, obsessive-compulsive disorders, anger management, and child/adolescent programs. Additionally, commenters stated that while diagnostic services are covered under the PHP benefit, since PHP is intended for patients who have a mental health diagnosis, patients that are admitted to a PHP typically have a mental health diagnosis from a referring provider. Response: We appreciate the information that commenters provided regarding testing and diagnostic services. While we recognize that these may not be used in most programs, we note that section 1861(ff)(2)(H) specifically includes diagnostic services in the definition of partial hospitalization and intensive outpatient services. We continue to believe it is appropriate to include these codes in the available PHP and IOP code set for those programs that do provide these services. We intend to monitor the provision of these services for PHP and IOP patients and may consider coding changes in the future. e. Other Categories of Services Comment: One commenter suggested including a variety of codes commonly billed for occupational therapy. For example, codes 97165- 97167 for low, moderate, and high complexity occupational therapy evaluations; and code 97168 Occupational therapy re-evaluation. Response: We appreciate the commenter's recommendation to adopt more detailed coding for occupational therapy. We note that occupational therapy services are an important part of PHPs, specifically listed under 1861(ff)(2)(B) and Sec. 410.43(a)(4)(ii). We also proposed to include occupational therapy services under Sec. 410.44(a)(4). We proposed to include G0129, which is the currently recognized code for [[Page 81826]] occupational therapy services provided for PHP patients, and we proposed to recognize this code for IOP patients beginning in CY 2024 as well. We are not including the more detailed list of CPT codes that the commenter recommended; however, we will take this comment into consideration to potentially inform future rulemaking. Comment: Commenters suggested adding SUD screening and diagnostic evaluations (including G0396 and G0397), GXXX5 Social determinants of health assessment, and individual and group SUD counseling. Additionally, commenters suggested including codes 99446-99449 Interprofessional phone/internet/electronic health record consultation services, as well as withdrawal management, medication management, and psychoeducation services. One commenter advocated the creation of a new add-on code for psychoeducation services. Response: After consideration of the public comments received, we do not believe SUD screening and diagnostic evaluations, social determinants of health assessment, individual and group SUD counseling, withdrawal management, medication management, or psychoeducation services are appropriate for the PHP or IOP benefits. We consulted with physicians and have determined these services are typically provided by a primary care provider for screening purposes. Comment: A few commenters suggested including transportation and meals. Response: While we appreciate the commenters' input, we remind readers that section 1861(ff)(2)(I) of the Act excludes transportation and meals from the items and services that may be offered provided under the PHP and IOP benefits. Final Decision: After consideration of the public comments we received, we are adopting as final the following list of PHP and IOP codes for CY 2024, which is presented in Table 98. BILLING CODE 4150-28-P [[Page 81827]] [GRAPHIC] [TIFF OMITTED] TR22NO23.138 [[Page 81828]] [GRAPHIC] [TIFF OMITTED] TR22NO23.139 [[Page 81829]] [GRAPHIC] [TIFF OMITTED] TR22NO23.140 BILLING CODE 4150-28-P

D. Payment Rate Methodology for PHP and IOP

In summary, we proposed for CY 2024 to revise our methodology for calculating PHP payment rates. We proposed to establish four separate PHP APC per diem payment rates: one for CMHCs for 3-service days and another for CMHCs for 4-service days (APC 5853 and APC 5854, respectively), and one for hospital-based PHPs for 3-service days and another for hospital-based PHPs for 4-service days (APC 5863 and APC 5864, respectively). In addition, for hospital-based PHPs, we proposed to calculate payment rates using the broader OPPS data set, instead of hospital-based PHP data only, because we believe using the broader OPPS data set would allow CMS to capture data from claims not identified as PHP, but that also include the service codes and intensity required for a PHP day. Because we proposed to establish consistent coding and payment between the PHP and IOP benefits, we proposed to consider all OPPS data for PHP days and non-PHP days that include 3 or more of the same service codes. We proposed to establish four separate IOP APC per diem payment rates at the same rates we proposed for PHP APCs: one for CMHCs for 3-service days and another for CMHCs for 4-service days (APC 5851 and APC 5852, respectively), and one for hospital-based IOPs for 3-service days and another for hospital-based IOPs for 4-service days (APC 5861 and APC 5862, respectively). We received public comments on these proposals, which we discuss and provide responses to in the following sections of this CY 2024 OPPS/ASC final rule.

1. Background

The standard PHP day is typically four services or more per day. We currently provide payment for three services a day for extenuating circumstances when a beneficiary would be unable to complete a full day of PHP treatment. As we stated in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66672), it was never our intention that days with only three units of service should represent the number of services provided in a typical PHP day. Our intention was to cover days that consisted of three units of service only in certain limited circumstances. For example, as we noted in the CY 2009 OPPS/ASC proposed rule (73 FR 41513), we believe 3-service days may be appropriate when a patient is transitioning towards discharge (or days when a patient who is transitioning at the beginning of his or her PHP stay). Another example of when it may be appropriate for a program to provide only three units of service in a day is when a patient is [[Page 81830]] required to leave the PHP early for the day due to an unexpected medical appointment.

2. Current Payment Rate Methodology for PHP

Since CY 2017, our longstanding policy has been to pay PHP on a per diem basis for days that include three or more PHP services, which are identified using a defined list of codes in the Healthcare Common Procedure Coding System (HCPCS). We currently (for CY 2023) utilize two separate PHP APC per diem payment rates: CMHC PHP APC 5853 (Partial Hospitalization (three or More Services Per Day)) using only CMHC data, and hospital-based PHP APC 8563 (Partial Hospitalization (three or More Services Per Day)) using only hospital-based PHP data. Under longstanding OPPS policy, the hospital-based PHP APC per diem payment amount is also applied as a daily mental health cap, which serves as an upper limit on payment per day for individual OPPS mental health services. Under the current methodology, for CY 2023, hospital- based PHPs are paid a per diem rate of $268.22 for three or more PHP services per day, and CMHCs are paid a per diem rate of $142.70 for three or more PHP services per day. We refer readers to the PHP ratesetting methodology described in section VIII.B.2 of the CY 2016 OPPS/ASC final rule with comment period (80 FR 70462 through 70466) for information on the current calculation of geometric mean per diem costs and payment rates for PHP APCs 5853 and 5863, and the CY 2017 OPPS/ASC final rule with comment period (81 FR 79680 through 79687) and the CY 2022 OPPS/ASC final rule with comment period (86 FR 63665 and 63666) for information on modifications incorporated into the PHP ratesetting methodology. We note that under our current methodology, we have historically prepared the data by first applying PHP-specific trims and data exclusions and assessing CCRs. We direct the reader to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70463 through 70465) for a more complete discussion of these trims, data exclusions, and CCR adjustments. In prior rules, we have typically included a discussion of PHP-specific data trims, exclusions, and CCR adjustments; we are not including that discussion in this rule. These PHP-specific data trims and exclusions addressed limitations as well as anomalies in the PHP data. However, as discussed in the following section, we proposed for CY 2024 to calculate hospital-based PHP payment rates for 3 services per day and 4 services per day based on cost per day using the broader OPPS data set. Accordingly, we proposed not to apply PHP-specific trims and data exclusions, but rather to apply the same trims and data exclusions consistent with the OPPS. We did not receive any public comments regarding the proposal, and we are finalizing it as proposed. Additional information about the data trims, data exclusions, and CCR adjustments applicable to the data used for this final rule can be found online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).\165\ --------------------------------------------------------------------------- \165\ Click on the link labeled ``CY 2024 OPPS/ASC Notice of Final 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 ``2024 NFRM OPPS Claims Accounting (PDF)''. ---------------------------------------------------------------------------

3. CY 2024 Payment Rate Methodology for PHP and IOP

As we noted in the proposed rule, the CAA, 2023 established IOP within the continuum of care, and the statute makes reference to weekly hour requirements. Specifically, IOP patients are required to be certified by a physician as needing at least 9 hours of services per week; while PHP patients are required to be certified by a physician as needing at least 20 hours of services per week. We stated in the proposed rule that while no IOP benefit existed prior to the CAA, 2023, the types of items and services included in IOP have been, and are, paid for by Medicare either as part of the PHP benefit or under the OPPS more generally. Additionally, we stated that prior to the CAA, 2023, CMS had begun gathering information from interested parties on IOP under Medicare. In the CY 2023 OPPS/ASC proposed rule (87 FR 44679), we issued a comment solicitation on intensive outpatient mental health treatment, including SUD treatment furnished by IOPs, to collect information regarding whether there are any gaps in coding that may be limiting access to needed levels of care for treatment of mental health disorders or SUDs for Medicare beneficiaries, and specific information about IOP services, such as the settings of care in which these programs typically furnish services, the range of services typically offered, and the range of practitioner types that typically furnish these services. We explained that along with the requirements for IOP mandated by the CAA, 2023, we took into consideration information we received from the comment solicitation to construct an appropriate data set to develop proposed rates for IOP. Since IOPs furnish the same types of services as PHP, just at a lower intensity, we stated that we believe it is appropriate to use the same data and methodology for calculating payment rates for both PHP and IOP for CY 2024. We explained that although PHP claims can be specifically identified, there is no specific identifier or billing code to indicate IOP services. However, we noted that hospitals are permitted to furnish and bill for many of these services as outpatient services under the OPPS. Thus, we analyzed a broader set of data that includes both PHP and non-PHP days with 3 or more services in order to calculate proposed payment for PHP services. In order to establish consistent payment between PHP and IOP, we proposed to set IOP payment rates at the same rates as PHP. We stated that the primary goal in developing the proposed payment rate methodology for IOP and PHP services was to pay providers an appropriate amount relative to the patients' needs, and to avoid cost inversion in future years. For CY 2024, we proposed to calculate hospital-based PHP payment rates for 3 services per day and 4 services per day based on cost per day using the broader OPPS data set, a change from the current methodology of using only PHP data. We stated that we believe using the broader OPPS data set would allow us to capture data from claims that are not identified as PHP, but that include the service codes and intensity required for a PHP day. We stated that the larger data set would expand the sample size to allow for more precise rate calculations. In addition, we proposed to calculate the 3 services per day and 4 services per day PHP rates for CMHCs and hospital-based programs separately. We also proposed to set payment rates for IOP APCs at amounts equal to the payment rates for PHP APCs. We stated that setting the IOP payment rates equal to the PHP payments would be appropriate because IOP is a newly established benefit, and we do not have definitive data on utilization. However, we explained that both programs utilize the same services, but furnish them at different levels of intensity, with different numbers of services furnished per day and per week, depending on the program. Therefore, we stated that we expect it would be appropriate to pay the same per diem rates for IOP and PHP services unless future data analysis supports calculating rates independently. Table 100 below shows the proposed APCs and the calculated [[Page 81831]] geometric mean per diem costs for the CY 2024 OPPS/ASC proposed rule. [GRAPHIC] [TIFF OMITTED] TR22NO23.141 For beneficiaries in a PHP or IOP, we proposed applying the four- service payment rate (that is, payment for PHP APCs 5854 for CMHCs and 5864 for hospitals, and IOP APCs 5852 for CMHCs and 5862 for hospitals) for days with 4 or more services. For days with three or fewer services, we proposed to apply the three-service payment rate (that is, payment for PHP APCs 5853 for CMHCs and 5863 for hospitals, and IOP APCs 5851 for CMHCs and 5861 for hospitals), which we noted would be a departure from our current policy. We explained that under our current policy, we do not make payment for any PHP days with fewer than three services. We stated that we have heard from interested parties that this policy could discourage treatment of PHP patients when, due to extenuating circumstances, they cannot complete a full day. We stated that we believe paying for a day with three or fewer services would allow us to more easily monitor the actual utilization of services, particularly IOP. Specifically, we stated that we believe utilizing the three-service payment rate (that is, payment for PHP APCs 5853 for CMHCs and 5863 for hospitals, and IOP APCs 5851 for CMHCs and 5861 for hospitals) for days with three or fewer service would accommodate occasional instances when a patient is unable to complete a full day of PHP or IOP. We stated that we expect days with fewer than three services would be very infrequent, and that we intend to monitor the provision of these days among providers and individual patients. Additionally, we proposed that the 3 service per day hospital-based PHP APC per diem payment amount for APC 5863 would also be applied as the daily mental health cap, which serves as the upper limit on payment per day for individual OPPS mental health services. We explained that setting the 3 service per day hospital-based PHP APC per diem payment amount as the daily mental health cap would be appropriate because currently the daily mental health cap is equal to the payment amount for hospital-based PHP APC 5863, which is payment for 3 or more services per day. Therefore, we noted that consistency with the current daily mental health cap would be maintained. Additionally, we stated that PHP is meant to be the most intensive mental health services program, requiring inpatient care if PHP is not received, and the daily mental health cap is not expected to reach such level of intensity. We stated that we believe applying the 3 service per day hospital-based PHP APC per diem payment amount for APC 5863 as the daily mental health cap would preserve the difference of intensity between PHP and individual OPPS mental health services to not incentivize one over the other. We noted that the proposed CY 2024 payment amount for APC 5863 would be comparable to the CY 2023 payment amount for APC 5863, which is currently applied as the daily mental health cap. Lastly, we noted that section 4124(c) of the CAA, 2023 requires that the payment amount for intensive outpatient services furnished in FQHCs and RHCs be equal to the payment amount that would have been paid for the same service furnished by a hospital outpatient department, thus establishing site-neutral payment for hospital outpatient departments, FQHCs, and RHCs. We explained that the CAA, 2023 is silent with respect to the payment methodology for IOP services provided by CMHCs. Based on our analysis of CMHC costs, we stated that we continue to observe that CMHCs incur significantly different costs than hospitals in the provision of PHP services, and stated that we anticipate in the future there will be significant differences between CMHCs' and hospitals' costs of furnishing IOP services as well. We explained that we believe it is appropriate to continue to recognize the differences in cost structures for different providers of PHP. We further explained that this is of particular importance not only to the Medicare program, but also for the Medicare beneficiaries that CMHCs serve, who incur a 20 percent copay on all PHP services under Part B. Therefore, we proposed to continue calculating CMHC payment rates based solely on CMHC claims. However, we stated that we were also considering whether establishing a site-neutral payment for all providers of IOP using data from all providers of IOP would be more appropriate in an effort to increase access to mental health services. In order to inform public awareness, we calculated combined payment rates for the proposed rule by using the broader OPPS data from both hospitals and CMHCs to estimate the costs associated [[Page 81832]] with providing days with three and four services from the proposed list of services, which is reproduced in Table 96 of this final rule with comment period. We provided these alternative cost calculations in Table 46 in section VIII.D.3.b of the CY 2024 OPPS/ASC proposed rule. We solicited comments on whether this approach would be more appropriate to consider for establishing payment beginning in CY 2024. Specifically, we stated that we were interested in any information from commenters on how IOPs may structure their service days, and how the differences in cost structures of CMHCs might affect a site-neutral payment for IOP services. We also solicited comments on any ways IOP days could differ from PHP days, and considerations that could affect payment. We received a number of public comments on these proposals. Our summaries and responses to the comments we received are included in the following paragraphs. Comment: Overall, commenters expressed support for the proposed methodology of calculating PHP and IOP rates using a broader set of OPPS data. Several commenters expressed support for the proposed payment for intensive outpatient services and the proposed increases to payment rates for partial hospitalization services for CY 2024. One commenter raised concerns that using a broader set of OPPS data may result in inadequate reimbursement for hospital-based PHPs that furnish IOPs, given the additional resource costs associated with these sites of care. Response: We appreciate the support from commenters. As noted earlier, we proposed to use a broader set of OPPS data in order to capture data from claims that are not identified as PHP, but that include the service codes and intensity required for a PHP day. In general, our analysis finds that non-PHP days furnished in the hospital outpatient setting that include 3 services and 4 or more services generally have comparable costs to PHP days furnished in the hospital setting with a comparable number of services provided. As we have discussed in prior rulemaking (85 FR 86075; 84 FR 61343), data from a small number of providers with low service costs per day have driven fluctuations in PHP payment rates, which has necessitated certain policies to stabilize payment in the past. We believe that using a broader set of OPPS data for days with a similar type and number of services appropriately provides stability for the calculation of PHP and IOP payment rates for CY 2024. Comment: Commenters strongly supported the proposal to stratify payment for PHP and IOP days into 3-service and 4-service days. Several commenters stated that bifurcating each service into two tiers takes into account the varying levels of need among individuals receiving services. Commenters also strongly supported our proposal to make payment at the applicable 3-service rate for PHP and IOP days with fewer than 3 services. Commenters expressed that this flexibility is particularly important for ensuring that the new IOP benefit is made available to patients. Response: We appreciate the support for the proposal to stratify payment and to make payment for days with fewer than 3 services. We share the commenters' view that these proposed policies are important for supporting access to the new IOP benefit and appropriately matching payment to daily service intensity for patients participating in both PHPs and IOPs. We are reiterating our expectation that days with fewer than three services should be very infrequent, and we are reminding readers that we intend to monitor the provision of these days among providers and individual patients. Comment: Commenters generally supported the proposal to calculate the per diem payment rates for IOP based on the proposed per diem payment rates for PHP. As noted earlier in this final rule, several commenters raised concerns that the proposal to pay the same rates for PHP and IOP may be driving the proposed requirement that a service from the ``primary list'' be provided for each day that received payment. These commenters encouraged CMS to revisit this question in future rulemaking as cost and claims data are available, to analyze the key differences between IOP and PHP, including the prevalence of certain services within the bundle. Response: We appreciate the support from commenters regarding the proposal. As we stated in the proposed rule, we proposed to use the PHP rates, calculated using the broader OPPS data set, as the basis for the proposed CY 2024 IOP rates, because IOP is a newly established benefit for which we do not have definitive data on utilization. Regarding the statement that the proposed payment policy is the reason for the proposal to require a primary service for each day that receives payment, we are clarifying that this is not the case. As we noted earlier in this CY 2024 OPPS/ASC final rule, the purpose of the primary list is to ensure that IOPs and PHPs are being provided with an appropriate level of intensity to ensure program integrity. Although we expect IOPs to be less intensive than PHPs and to involve fewer weekly hours, we nevertheless expect the services provided to be of an intensity that is commensurate with treating the patient's condition. Because we have proposed to pay IOP on a per diem basis, we believe it is important to ensure a minimum standard of program intensity for each date of service. Comment: A few commenters expressed support for establishing separate payment rates that recognize the cost differences between hospital outpatient departments and CMHCs. These commenters agreed with CMS that hospitals and CMHCs have different cost structures, and encouraged CMS to finalize payment rates that reflect these differences. In contrast, several commenters opposed the proposal to establish separate payment rates for hospital outpatient departments and CMHCs, advocating for the alternative combined site-neutral payment rates presented in the proposed rule. These commenters stated that the stark discrepancy in rates between HOPDs and CMHCs for partial hospitalization services may not be representative of these entities' true cost structures. These commenters further noted that the addition of IOP to the Medicare service array may encourage additional facilities around the country to elect to enroll in Medicare as CMHCs. Commenters advocating for site-neutral payment responded to CMS' concerns regarding coinsurance burdens for CMHC patients by stating a large percentage of the low-income patients served by community-based behavioral health providers are dual eligible beneficiaries, for whom Medicaid typically covers Medicare coinsurance costs. Response: We appreciate the comments we received on this topic. As we noted in the proposed rule, the best available data that we have at this time for assessing the cost of IOP services comes from PHP and OPPS days with similar services provided at the expected intensity level. Current data for partial hospitalization do reflect significant cost structure differences between hospitals and CMHCs, and our longstanding payment policies reflect those differences. We have no factual basis at this time on which to assume, as many commenters suggest, that the stark difference between hospital and CMHC payment rates for PHP services indicate that such services do not reflect the actual cost structure differences between facility types. We recognize that there is uncertainty about the cost structures of CMHCs that [[Page 81833]] may in the future enroll in Medicare to provide IOP services. As we noted in the proposed rule, we intend to analyze actual IOP utilization data beginning in CY 2024 to understand the actual structure and costs associated with these programs. We are not adopting the commenter's recommendation to finalize the alternative site neutral payment rates for this CY 2024 OPPS/ASC final rule, but we will take these comments into consideration to potentially inform future rulemaking. Comment: Interested parties overwhelming advocated for establishing the OPPS daily mental health cap based on proposed APC 5864, rather than APC 5863 as proposed. Commenters stated that this would be consistent with CMS's historical use of the highest PHP per diem payment amount as the basis for the OPPS daily mental health cap. Response: We appreciate the comments' feedback regarding the proposal. We agree with commenters that the proposed APC 5864 would be the most resource intensive mental health service and would be appropriate to finalize as the basis for the OPPS daily mental health cap in CY 2024. As discussed in section II.A.2.c.(1) of this CY 2024 OPPS/ASC final rule, we are finalizing the use of APC 5864 to establish the payment rate for APC 8010 in CY 2024, rather than using APC 5863 as proposed. Final Decision: After consideration of the public comments we received, we are finalizing our proposal to establish separate APC per diem payment rates for PHP days with 3 services and 4 or more services and to establish separate APC per diem payment rates for CMHCs and hospital-based PHPs. We are also finalizing our proposal to set APC per diem payment rates for IOP days based on the APC per diem payment rates for PHP in CY 2024. Lastly, we are finalizing our proposal to make payment at the 3-service rate for PHP or IOP days that have fewer than 3 services. a. PHP APC Changes and Effects on Geometric Mean Per Diem Costs For CY 2024 and subsequent years, we are finalizing a revision to our existing methodology to calculate the CMHC and hospital-based PHP geometric mean per diem costs to incorporate the larger data set under the OPPS, including PHP and non-PHP hospital claims for mental health services. We are finalizing our proposal to use the latest available CY 2022 claims data, and CY 2021 cost data. This is consistent with the overall use of cost data for the OPPS, which is discussed in section II.A.1.a. of this final rule with comment period. In addition, we are establishing four separate PHP APC per diem payment rates: two for CMHCs (APC 5853 and APC 5854) and two for hospital-based PHPs (APC 5863 and APC 5864). Following this methodology, we will use the geometric mean per diem cost of $90.02 for CMHCs providing 3-service days (APC 5853), and the geometric mean per diem cost of $161.80 for CMHCs providing 4-service days (APC 5854), as the basis for developing the CY 2024 CMHC PHP APC per diem rates. Additionally, we will use the geometric mean per diem cost of $266.35 for hospital-based providers providing 3-service days (APC 5863), and the geometric mean per diem cost of $367.79 for hospital-based providers providing 4-service days (APC 5864) as the basis for developing the CY 2024 hospital-based PHP APC per diem rates. Lastly, we are establishing four separate IOP APC per diem payment rates: two for CMHCs (APC 5851 and APC 5852 for 3- service days and 4-service days, respectively) and two for hospital- based IOPs (APC 5861 and APC 5862 for 3-service days and 4-service days, respectively) using the same above 3-service day and 4-service day geometric mean per diem costs finalized for the PHP APC per diem rates. b. Development of the PHP and IOP APC Geometric Mean Per Diem Costs The types of items and services paid as PHP (and that will be paid as IOP) can also be provided outside of those benefits by hospitals; therefore, we sought to understand the costs of those services in our preliminary analysis to consider options for the proposed payment rates for IOP services. In preparation for this CY 2024 final rule, in collaboration with physicians, we developed a consolidated list of all HCPCS codes that would be appropriate for identifying IOP and PHP services for analytic purposes. We refer readers to section VIII.C of this final rule with comment period for more detailed information on the consolidated list of HCPCS codes applicable for IOP and PHP services. We calculated the final payment rates for hospital-based providers based on costs for days with three services and days with four services using the data from all OPPS claims for hospitals and calculated the final payment rates for CMHCs based on costs for days with three services and days with four services using only the data from CMHC claims. As discussed in section VIII.B.1.a of the CY 2022 OPPS/ASC final rule with comment period (86 FR 63666 through 63668), the costs for CMHC service days are calculated using cost report information from HCRIS. Although we anticipate that IOP weeks would generally include 9- 19 hours of services and PHP weeks would generally include 20 or more hours of services, we did not restrict the data for this analysis by weekly hours. Because IOP is a new benefit, we do not have definitive data on utilization. However, if IOP utilization is similar to the data we analyzed for beneficiary weeks with 9 to 19 hours of mental health services, then we expect that IOP days will mostly include three services or fewer but may sometimes include four or more. Given the uncertainty about how IOPs will structure their service days in the future, we proposed and believe it is appropriate to finalize 3-service day and 4-service day APCs for IOP with payment rates that are the same as the rates for the 3-service day and 4-service day APCs for PHP. We analyzed all CMHC and hospital claims data under the OPPS used to set final rates for this CY 2024 final rule. We identified all patient days that included three or more services from the list in Table 98. As discussed in section VIII.D.3 of this final rule with comment period, we calculated PHP payment rates for days with three services and days with four or more services, and we utilized these PHP payment rates for the IOP APCs as well. We are finalizing our proposal to calculate separate rates for hospitals and CMHCs. c. CY 2024 PHP and IOP APC Geometric Mean Per Diem Costs Following this structure, the final calculated CY 2024 PHP geometric mean per diem cost for all CMHCs for providing 3 services per day is $90.02, which we will use for calculating the payment rate for the 3-service day APC, CMHC APC 5853. The final calculated CY 2024 geometric mean per diem cost for all CMHCs for providing four or more services per day is $161.80, which we will use for calculating the payment rate for the 4-service day APC, CMHC APC 5854. As noted, the calculated CY 2024 hospital-based PHP APC geometric mean per diem cost for hospital-based PHP providers that provide 3 services per service day is $266.35, which we will use for calculating the payment rate for the 3-service day hospital-based PHP APC 5863. The calculated CY 2024 hospital-based PHP APC geometric mean per diem cost for hospital-based PHP providers that provide 4 or more services per day is $367.79, which we will use for calculating the payment rate for the 4-service day hospital-based PHP APC 5864. Similarly, the calculated CY 2024 IOP geometric mean per diem cost for all [[Page 81834]] CMHCs for providing 3 services per day is $90.02, which we will use for calculating the payment rate for the 3-service day APC, CMHC APC 5851. The calculated CY 2024 geometric mean per diem cost for all CMHCs for providing 4 or more services per day is $161.80, which we will use for calculating the payment rate for the 4-service day APC, CMHC APC 5852. The calculated CY 2024 hospital-based IOP APC geometric mean per diem cost for hospital-based IOP providers that provide 3 services per service day is $266.35, which we will use for calculating the payment rate for the 3-service day hospital-based IOP APC 5861. The calculated CY 2024 hospital-based IOP APC geometric mean per diem cost for hospital-based IOP providers that provide 4 services per day is $367.79, which we proposed to use for calculating the payment rate for the 4-service day hospital-based IOP APC 5862. We intend to monitor the provision of services in both PHP and IOP programs to better understand utilization patterns, and we are finalizing our proposal to set equal payment rates for PHP and IOP services until actual IOP utilization data becomes available for CY 2026 ratesetting, at which point we anticipate reevaluating our payment rate methodology if necessary. In addition, we solicited comments on the service mix used to develop the per diem amounts for both PHP and IOP. We stated that we are interested in whether the proposed approach is appropriate, and any feedback commenters have on the service mix provided within each program. The final CY 2024 PHP geometric mean per diem costs are shown in Table 101 and are used to derive the final CY 2024 PHP APC per diem rates for CMHCs and hospital-based PHPs-. As stated in section VIII.D.3 of this final rule with comment period, we are finalizing our proposal to use the same 3--service day and 4-service day geometric mean per diem PHP costs for the CY 2024 CMHC and hospital-based IOP APCs. The final CY 2024 PHP and IOP APC per diem rates are included in Addendum A to this final rule with comment period (which is available on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) and in Table 101. [GRAPHIC] [TIFF OMITTED] TR22NO23.142

E. Outlier Policy for CMHCs

For CY 2024, we proposed to update the calculations of the CMHC outlier percentage, cutoff point and percentage payment amount, outlier reconciliation, outlier payment cap, and fixed dollar threshold according to previously established policies to include intensive outpatient services. These topics are discussed in more detail. We refer readers to section II.G.1 of this final rule with comment period for our general policies for hospital outpatient outlier payments.

1. Background

As discussed in the CY 2004 OPPS final rule with comment period (68 FR 63469 through 63470), we noted a significant difference in the amount of outlier payments made to hospitals and CMHCs for PHP services. Given the difference in PHP charges between hospitals and CMHCs, we did not believe it was appropriate to make outlier payments to CMHCs using the outlier percentage target amount and threshold established for hospitals. Therefore, beginning in CY 2004, we created a separate outlier policy specific to the estimated costs and OPPS payments provided to CMHCs. We designated a portion of the estimated OPPS outlier threshold specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS each year, excluding outlier payments, and established a separate outlier threshold for CMHCs. This separate outlier threshold for CMHCs resulted in $1.8 million in outlier payments to CMHCs in CY 2004 and $0.5 million in outlier payments to CMHCs in CY 2005 (82 FR 59381). In contrast, in CY 2003, more than $30 million was paid to CMHCs in outlier payments (82 FR 59381).

2. CMHC Outlier Percentage

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 and 59268), we described the current outlier policy for hospital outpatient payments and CMHCs. We note that we also discussed our outlier policy for CMHCs in more detail in section VIII.C of that same final rule (82 FR 59381). We set our projected target for all OPPS aggregate outlier payments at 1.0 percent of the estimated aggregate total payments under the OPPS (82 FR 59267). This same policy was also reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58996), the CY 2020 OPPS/ASC final rule with comment period (84 FR 61350), and the CY 2021 OPPS/ASC final rule with comment period (85 FR 86082). We estimated CMHC per diem payments and outlier payments for this rule by using the most recent available utilization and charges from CMHC claims, updated CCRs, and the proposed payment rates for PHP APCs 5853 and 5854. We recognize that CMHCs would be permitted to provide and bill for IOP beginning in CY 2024 and would be paid under IOP APCs 5851 and 5852. However, we have not included estimates of utilization for these APCs, because the latest available claims from CY 2022 do not reflect the provision of IOP services. For increased transparency, we are providing a more detailed explanation of the existing [[Page 81835]] calculation process for determining the CMHC outlier percentages. To calculate the CMHC outlier percentage, we follow three steps: Step 1: We multiply the OPPS outlier threshold, which is 1.0 percent, by the total estimated OPPS Medicare payments (before outliers) for the prospective year to calculate the estimated total OPPS outlier payments: (0.01 x Estimated Total OPPS Payments) = Estimated Total OPPS Outlier Payments. Step 2: We estimate CMHC outlier payments by taking each provider's estimated costs (based on their allowable charges multiplied by the provider's CCR) minus each provider's estimated CMHC outlier multiplier threshold (we refer readers to section VIII.C.3 of the CY 2022 OPPS/ASC proposed rule). That threshold is determined by multiplying the provider's estimated paid days by 3.4 times the total of CMHC PHP APC and CMHC IOP payment rates. If the provider's costs exceed the threshold, we multiply that excess by 50 percent, as described in section VIII.E.3 of this final rule with comment period, to determine the estimated outlier payments for that provider. CMHC outlier payments are capped at 8 percent of the provider's estimated total per diem payments (including the beneficiary's copayment), as described in section VIII.E.5 of this final rule with comment period, so any provider's costs that exceed the CMHC outlier cap will have its payments adjusted downward. After accounting for the CMHC outlier cap, we sum all of the estimated outlier payments to determine the estimated total CMHC outlier payments. (Each Provider's Estimated Costs - Each Provider's Estimated Multiplier Threshold) = A. If A is greater than 0, then (A x 0.50) = Estimated CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 x Provider's Total Estimated Per Diem Payments), then cap adjusted B = (0.08 x Provider's Total Estimated Per Diem Payments); otherwise, B = B. Sum (B or cap-adjusted-B) for Each Provider = Total CMHC Outlier Payments. Step 3: We determine the percentage of all OPPS outlier payments that CMHCs represent by dividing the estimated CMHC outlier payments from Step 2 by the total OPPS outlier payments from Step 1: (Estimated CMHC Outlier Payments/Total OPPS Outlier Payments). We proposed to continue to calculate the CMHC outlier percentage according to previously established policies. However, beginning in CY 2024, CMHCs will be permitted to provide and bill for intensive outpatient services for Medicare patients. Therefore, we proposed to expand the calculation of the CMHC outlier percentage to include PHP and IOP, because we anticipate that total payments will increase for CMHCs in CY 2024. We proposed to maintain our current methodology for calculating the CMHC outlier percentage, but to apply it to payments for IOP services as well as PHP services beginning in CY 2024. Therefore, based on our CY 2024 payment estimates, including our estimates of both PHP and IOP services, CMHCs are projected to receive 0.01 percent of total hospital outpatient payments in CY 2024, excluding outlier payments. We proposed to designate approximately less than 0.01 percent of the estimated 1.0 percent hospital outpatient outlier threshold for CMHCs. This percentage is based upon the formula given in Step 3. We did not receive any public comments on our proposal and are finalizing our proposal as proposed.

3. Cutoff Point and Percentage Payment Amount

As described in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59381), our policy has been to pay CMHCs for outliers if the estimated cost of the day exceeds a cutoff point. In CY 2006, we set the cutoff point for outlier payments at 3.4 times the highest CMHC PHP APC payment rate implemented for that calendar year (70 FR 68551). For CY 2018, the highest CMHC PHP APC payment rate was the payment rate for CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier payment percentage for costs above the multiplier threshold was set at 50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50 percent outlier payment percentage that applies to hospitals to CMHCs and continued to use the existing cutoff point (82 FR 59381). Therefore, for CY 2018, we continued to pay for partial hospitalization services that exceeded 3.4 times the CMHC PHP APC payment rate at 50 percent of the amount of CMHC PHP APC geometric mean per diem costs over the cutoff point. For example, for CY 2018, if a CMHC's cost for partial hospitalization services paid under CMHC PHP APC 5853 exceeded 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853 [0.50 x (CMHC Cost-(3.4 x APC 5853 rate))]. This same policy was also reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58996 through 58997), CY 2020 OPPS/ASC final rule with comment period (84 FR 61351), the CY 2021 OPPS/ASC final rule with comment period (85 FR 86082 through 86083), the CY 2022 OPPS/ASC final rule with comment period (86 FR 63670), and the CY 2023 OPPS/ASC final rule with comment period (87 FR 72004). For CY 2024, we proposed to continue to pay for partial hospitalization services that exceed 3.4 times the proposed CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC geometric mean per diem costs over the cutoff point. In addition, we proposed to extend this policy to intensive outpatient services. That is, for CY 2024, if a CMHC's cost for partial hospitalization services paid under CMHC PHP APCs 5853 or 5854 exceeds 3.4 times the payment rate for the APC (either CMHC APC 5853 or 5854), the outlier payment would be calculated as: [0.50 x (CMHC cost-(3.4 x (PHP APC payment)))]. Similarly, if a CMHC's cost for intensive outpatient services paid under CMHC IOP APCs 5851 or 5852 exceeds 3.4 times the payment rate for the APC (either CMHC APCs 5851 or 5852), the outlier payment would be calculated as: [0.50 x (CMHC cost-(3.4 x (IOP APC payment)))]. We did not receive any public comments on our proposal and are finalizing our proposed policy as proposed.

4. Outlier Reconciliation

In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599), we established an outlier reconciliation policy to address charging aberrations related to OPPS outlier payments. We addressed vulnerabilities in the OPPS outlier payment system that led to differences between billed charges and charges included in the overall CCR, which are used to estimate cost and would apply to all hospitals and CMHCs paid under the OPPS. We initiated steps to ensure that outlier payments appropriately account for the financial risk when providing an extraordinarily costly and complex service but are only being made for services that legitimately qualify for the additional payment. For a comprehensive description of outlier reconciliation, we refer readers to the CY 2023 OPPS/ASC and CY 2019 OPPS/ASC final rules with comment period (83 FR 58874 and 58875 and 81 FR 79678 through 79680). We proposed to continue these policies for partial hospitalization services provided through PHPs for CY 2024. In addition, since CMHCs will be permitted to provide and bill for [[Page 81836]] intensive outpatient services for Medicare patients we proposed to extend these policies to include intensive outpatient services in order to encompass the full scope of services that CMHCs will be permitted to furnish. The current outlier reconciliation policy requires that providers whose outlier payments meet a specified threshold and whose overall ancillary CCRs change by plus or minus 10 percentage points or more, are subject to outlier reconciliation, pending approval of the CMS Central Office and Regional Office (as established in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68596 through 68599)). We note that the current threshold for outlier reconciliation for hospitals is $500,000, and there is no threshold for CMHCs (that is, all outlier payments are subject to reconciliation for CMHCs whose overall ancillary CCRs change by plus or minus 10 percentage points or more). The policy also includes provisions related to CCRs and to calculating the time value of money for reconciled outlier payments due to or due from Medicare, as detailed in the CY 2009 OPPS/ASC final rule with comment period and in the Medicare Claims Processing Manual (73 FR 68595 through 68599 and Medicare Claims Processing internet Only Manual, Chapter 4, Section 10.7.2 and its subsections, available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf). We did not receive any public comments on our proposal and are finalizing our proposed policy as proposed.

5. Outlier Payment Cap

In the CY 2017 OPPS/ASC final rule with comment period, we implemented a CMHC outlier payment cap to be applied at the provider level, such that in any given year, an individual CMHC will receive no more than a set percentage of its CMHC total per diem payments in outlier payments (81 FR 79692 through 79695). Our analysis of CY 2014 claims data found that CMHC outlier payments began to increase similarly to the way they had prior to CY 2004. This was due to inflated cost from three CMHCs that accounted for 98 percent of all CMHC outlier payments that year and received outlier payments that ranged from 104 percent to 713 percent of their total per diem payments. To balance our concern about disadvantaging CMHCs with our interest in protecting the benefit from excessive outlier payments and to mitigate potential inappropriate outlier billing vulnerabilities, we finalized the CMHC outlier payment cap at 8 percent of the CMHC's total per diem payments (81 FR 79694 and 79695) to limit the impact of inflated CMHC charges on outlier payments. This outlier payment cap only affects CMHCs, it does not affect other provider types (that is, hospital-based PHPs), and is in addition to and separate from the current outlier policy and reconciliation policy in effect. In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61351), we finalized a proposal to continue this policy in CY 2020 and subsequent years. We proposed to maintain the 8 percent outlier payment cap for CY 2024 and apply it to both PHP and IOP payments. We note that the 8 percent would be calculated as 8 percent of total per diem PHP and IOP payments for CY 2024. As discussed earlier in this rule, beginning in CY 2024, CMHCs will be permitted to provide and bill for intensive outpatient services for Medicare patients. Therefore, we proposed to expand the calculation of the CMHC outlier cap to include both PHP and IOP, because we anticipate that total payments will increase for CMHCs in CY 2024. Therefore, we proposed to calculate the 8 percent outlier payment cap for each CMHC in a way that would encompass the full scope of services that CMHCs will be permitted to furnish in CY 2024. We did not receive any public comments on our proposal and therefore, we are finalizing as proposed.

6. Fixed-Dollar Threshold

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 and 59268), for the hospital outpatient outlier payment policy, we set a fixed-dollar threshold in addition to an APC multiplier threshold. Fixed-dollar thresholds are typically used to drive outlier payments for very costly items or services, such as cardiac pacemaker insertions. Currently, for CY 2023, CMHC PHP APC 5853 is the only APC for which CMHCs may receive payment under the OPPS and is for providing a defined set of services that are relatively low cost when compared to other OPPS services. Because of the relatively low cost of CMHC services that are used to comprise the structure of CMHC PHP APC 5853, it is not necessary to also impose a fixed-dollar threshold on CMHCs. Therefore, in the CY 2018 OPPS/ASC final rule with comment period, we did not set a fixed-dollar threshold for CMHC outlier payments (82 FR 59381). This same policy was also reiterated in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61351), the CY 2021 OPPS/ASC final rule with comment period (85 FR 86083), the CY 2022 OPPS/ASC final rule with comment period (86 FR 63508), and the CY 2023 OPPS/ASC final rule with comment period (87 FR 72004). We proposed to continue this policy for CY 2024 and not set a fixed-dollar threshold for the CMHC PHP APCs (5853 or 5854) or IOP APCs (5851 or 5852). Comment: Several commenters urged CMS to implement a site-neutral payment for CMHCs and hospital-based providers for PHP and IOP services. Commenters stated that a site-neutral payment would eliminate the need for a separate outlier policy for CMHCs. Response: We disagree with commenters who believe that a site- neutral payment would eliminate the need for a separate outlier policy for CMHCs. As discussed in the CY 2004 OPPS final rule with comment period (68 FR 63469 and 63470), we noted a significant difference in the amount of outlier payments made to hospitals and CMHCs for PHP services. Given the difference in PHP charges between hospitals and CMHCs, we did not believe it was appropriate to make outlier payments to CMHCs using the outlier percentage target amount and threshold established for hospitals. Therefore, beginning in CY 2004, we created a separate outlier policy specific to the estimated costs and OPPS payments provided to CMHCs. We designated a portion of the estimated OPPS outlier threshold specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS each year, excluding outlier payments, and established a separate outlier threshold for CMHCs. Furthermore, to balance our concern about disadvantaging CMHCs with our interest in protecting the benefit from excessive outlier payments and to mitigate potential inappropriate outlier billing vulnerabilities, we finalized the CMHC outlier payment cap at 8 percent of the CMHC's total per diem payments (81 FR 79694 and 79695) to limit the impact of inflated CMHC charges on outlier payments. In conclusion, CMS does not believe payment methodology has any effect on outlier policy. Final Decision: After consideration of the public comments we received, we are finalizing our proposed policy as proposed. [[Page 81837]]

1. Background

a. Statutory Background The Rural Health Clinic Services Act of 1977 (Pub. L. 95-210, December 13, 1977), amended the Act by enacting section 1861(aa) of the Act to extend Medicare and Medicaid entitlement and payment for rural health clinics (RHCs), which are defined as being primarily engaged in furnishing outpatient services by physicians and certain nonphysician practitioners, and for services and supplies incidental to their services. ``Nonphysician practitioners'' included nurse practitioners and physician assistants. (Subsequent legislation extended the definition of covered RHC services to include the services of clinical psychologists, clinical social workers, certified nurse midwives, marriage and family therapist, and mental health counselors). The statutory payment requirements for RHC services are set forth at section 1833(a)(3) of the Act, which states that RHCs are paid reasonable costs, less the amount a provider may charge as described in clause of section 1866(a)(2)(A) of the Act, but in no case may the payment exceed 80 percent of such costs. Section 1861(aa)(2) of the Social Security Act (42 U.S.C. 1395x(aa)(2)) defines the term ``rural health clinic'', in relevant part, as a facility that is located in an area that is not an urbanized area and in which there are insufficient numbers of needed health care practitioners and is not a rehabilitation agency or a facility primarily for the care and treatment of mental diseases. Additionally, the law includes a basic requirement that the facility is primarily engaged in providing health care services furnished by physicians, physician assistants, nurse practitioners, clinical psychologists, and clinical social workers to outpatients. Section 4161 of the Omnibus Budget Reconciliation Act of 1990 (Pub.

L. 101-508, November 5, 1990) (OBRA 90) established Federally Qualified

Health Centers (FQHCs) in 1990 to be effective beginning on October 1, 1991. The law mandated that FQHCs furnish services that are typically furnished in an outpatient setting. Section 1861(aa)(3) of the Act extends Medicare and Medicaid entitlement and payment for those services defined as RHC services under section 1861(aa)(1) of the Act, preventive services defined under section 1861(ddd)(3) of the Act, and preventive primary health services that a center is required to provide under section 330 of the Public Health Service Act furnished at a FQHC. Section 1861(aa)(4) of the Act describes the statutory requirements that FQHCs must meet to qualify for Medicare payment. Section 10501(i)(3)(A) of the Affordable Care Act (Pub. L. 111-148) added section 1834(o) of the Act to establish a new system of payment for the costs of FQHC services under Medicare Part B (Supplemental Medical Insurance) based on prospectively set rates. Section 1834(o)(2)(A) of the Act, the FQHC prospective payment system (PPS) was effective beginning on October 1, 2014. In addition, section 10501(i)(3)(B) of the Affordable Care Act added section 1833(a)(1)(Z) to the Act to specify that Medicare payment for FQHC services under section 1834(o) of the Act shall be 80 percent of the lesser of the actual charge or the amount determined under section 1834(o) of the Act. Regulations pertaining to RHC and FQHC benefits are codified at 42 CFR part 405, subpart X. b. Medicare Part B Payment of RHC and FQHC Services As provided in 42 CFR part 405, subpart X, of our regulations, RHC and FQHC visits generally are face-to-face encounters between a patient and one or more RHC or FQHC practitioners during which one or more RHC or FQHC qualifying services are furnished. RHC and FQHC practitioners are physicians, NPs, PAs, certified nurse-midwife (CNMs), clinical psychologists (CPs), and clinical social workers, and under certain conditions, a registered nurse or licensed practical nurse furnishing care to a homebound RHC or FQHC patient in an area with a shortage of home health agencies. We note, effective January 1, 2024, marriage and family therapist and mental health counselor services are considered RHC services in accordance with section 1861(aa)(1)(B) of the Act as amended by section 4121(b) of CAA, 2023, which is incorporated into FQHC services through section 1861(aa)(3)(A) of the Act. In the CY 2024 PFS proposed rule, we propose to codify payment for MFTs and MHCs at Sec. 405.2411 (88 FR 52398). Only medically necessary medical, mental health, or qualified preventive health services that require the skill level of an RHC or FQHC practitioner are RHC or FQHC billable visits. Services furnished by auxiliary personnel (for example, nurses, medical assistants, or other clinical personnel acting under the supervision of the RHC or FQHC practitioner) are considered incident to the visit and are included in the per-visit payment. Section 130 of the Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260, December 27, 2020), updated section 1833(f) of the Act by restructuring the payment limits for RHCs beginning April 1, 2021. As of April 1, 2021, all RHCs are subject to payment limits on the all-inclusive rate (AIR), and this limit will be determined for each RHC in accordance with section 1833(f) of the Act. RHCs generally are paid an AIR for all medically necessary medical and mental health services and qualified preventive health services furnished on the same day (with some exceptions). The AIR is subject to a payment limit, meaning that an RHC will not receive any payment beyond the specified limit amount. FQHCs were paid under the same AIR methodology until October 1, 2014. Subsequently, FQHCs began to transition to the FQHC PPS system, in which they are paid based on the lesser of the FQHC PPS rate or their actual charges. The FQHC PPS rate is adjusted for geographic differences in the cost of services by the FQHC PPS geographic adjustment factor (GAF). The rate is increased by 34 percent when an FQHC furnishes care to a patient that is new to the FQHC, or to a beneficiary receiving an initial preventive physical examination (IPPE) or has an annual wellness visit (AWV). Both the RHC AIR and FQHC PPS payment rates were designed to reflect the cost of all services and supplies that an RHC or FQHC furnishes to a patient in a single day. The rates are not adjusted for the complexity of the patient health care needs, the length of the visit, or the number or type of practitioners involved in the patient's care. RHCs and FQHCs are required to file a cost report annually to determine their payment rate, which reflects adjustments for GME payments, bad debt, and influenza, pneumococcal and COVID-19 vaccines and covered monoclonal antibody products used as pre-exposure prophylaxis prevention of COVID-19 and their administration. There are additional payments for non-face-to-face services for care management services including chronic care management (CCM), principal care management (PCM), chronic pain management (CPM), general behavior health integration (GBHI), psychiatric collaborative care model (CoCM), and virtual communications (Sec. 405.2464(c)). Additionally, for FQHCs, Sec. 405.2462(d) describes a ``grandfathered tribal FQHC'' as a FQHC that is operated by a tribe or tribal organization under the Indian Self- [[Page 81838]] Determination and Education Assistance Act (ISDEAA); was billing as if it were a provider-based to an Indian Health Service (IHS) hospital on or before April 7, 2000, and is not currently operating as a provider- based department of an IHS hospital. We refer to these tribal FQHCs as ``grandfathered tribal FQHCs'' to distinguish them from freestanding tribal FQHCs that are currently being paid the lesser of their charges or the adjusted national FQHC PPS rate, and from provider-based tribal clinics that may have begun operations subsequent to April 7, 2000. Under the authority in section 1834(o) of the Act to include adjustments determined appropriate by the Secretary, we revised Sec. Sec. 405.2462 and 405.2464 to pay these grandfathered tribal FQHCs on the Medicare outpatient per visit rate as set annually by the IHS, and not the FQHC PPS payment rates (80 FR 71089). Such payment rates for outpatient medical care (also referred to as outpatient hospital services) furnished by the IHS and tribal facilities is set annually by the IHS under the authority of sections 321(a) and 322(b) of the Public Health Service Act (the PHS Act) (42 U.S.C. 248 and 249(b)) (Pub. L. 83-568 (42 U.S.C. 2001(a)), and the IHCIA, based on the previous year cost reports from Federal and tribal hospitals. The outpatient per visit rate is only applicable for those IHS or tribal facilities that meet the definition of a provider-based department as described at Sec. 413.65(m), or a ``grandfathered'' tribal FQHC as described at Sec. 405.2462(d)(1). There is a higher outpatient per visit rate for IHS and tribal Medicare visits in Alaska and a lower general outpatient per visit rate for IHS/tribal Medicare visits in the lower 48 States (IHS does not operate any hospitals or facilities in Hawaii or the territories, and thus, no rates are set in those localities). For CY 2023, the outpatient per visit rate for Medicare visits in Alaska is $801 and $620 in the lower 48 States. 2. Establishment of Intensive Outpatient Services Benefit by Section 4124 of the CAA, 2023 a. Section 4124 of the Consolidated Appropriations Act of 2023 As we discuss in the CY 2024 OPPS proposed rule (88 FR 49714 and 49715) section 4124 of Division FF of the CAA, 2023 established Medicare coverage for intensive outpatient program (IOP) services furnished by a hospital to its outpatients, or by a community mental health center (CMHC)), a FQHC or a RHC, as a distinct and organized intensive ambulatory treatment service offering less than 24-hour daily care in a location other than an individual's home or inpatient or residential setting, effective January 1, 2024. We explained that an IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness, which includes, but is not limited to conditions such as depression, schizophrenia, and substance use disorders. We noted an IOP is thought to be less intensive than a partial hospitalization program (PHP). This new provision mandated several changes to the RHC and FQHC policies, including scope of benefits and services, certification and plan of care requirements, and special payment rules for IOP services in RHCs and FQHCs, all of which are discussed in the paragraphs below. 3. IOP Scope of Benefits and Scope of Services in RHC and FQHC Settings a. Background As described in section 1861(aa) of the Act and codified under Sec. Sec. 405.2411 and 405.2446, the current scope of benefits for RHC and FQHC services are those services covered in a RHC, FQHC, or other outpatient setting, including a patient's place of residence, or a Medicare-covered Part A skilled nursing facility (SNF) when provided by a physician, nurse practitioner, physician assistant, certified nurse midwife, clinical psychologist, or a clinical social worker. RHC/FQHC services may also be covered for individuals who have elected hospice when provided by an RHC/FQHC physician, nurse practitioner, or physician assistant employed or under contract with the RHC or FQHC at the time the services are furnished, who has been designated by the patient as his or her attending physician. Starting January 1, 2024, services of a marriage and family therapist (MFT) or mental health counselor (MHC) are covered under RHC/FQHC services if such MFT or MHC is employed or under contract with the RHC or FQHC at the time the services are furnished. As defined in Sec. 405.2415, RHCs and FQHCs furnish physicians' services; services and supplies ``incident to'' the services of physicians: Nurse practitioner (NP), physician assistant (PA), certified nurse-midwife (CNM), clinical psychologist (CP), and clinical social worker (CSW) services; and services and supplies incident to the services of NPs, PAs, CNMs, CPs, and CSWs. They may also furnish diabetes self-management training and medical nutrition therapy (DSMT/ MNT), transitional care management (TCM) services, and in some cases, visiting nurse services furnished by a registered professional nurse or a licensed practical nurse. Only medically necessary medical, mental health, or qualified preventive health services that require the skill level of an RHC or FQHC practitioner are RHC or FQHC billable visits. Services furnished by auxiliary personnel (for example, nurses, medical assistants, or other clinical personnel acting under the supervision of the RHC or FQHC practitioner) are considered incident to the visit and are included in the per-visit payment. RHC and FQHC services also include certain preventive services when specified in statute or when established through the National Coverage Determination (NCD) process. RHCs and FQHCs are paid for the professional component of allowable preventive services when all of the program requirements are met and frequency limits (where applicable) have not been exceeded. As discussed in the CY 2024 OPPS proposed rule (88 FR 49715), section 4124(b)(4) of the CAA, 2023, amended section 1861(aa)(1) of the Act by adding subparagraph (D) to establish Medicare Part B coverage for IOP services as defined in section 1861(ff)(4) of the Act when these services are furnished by RHCs, which is incorporated for FQHCs by reference in section 1861(aa)(3)(A) of the Act, effective January 1, 2024. We explained that, section 1861(ff)(2) of the Act describes the items and services available under the PHP and IOP benefits. These items and services include: individual and group therapy with physicians or psychologists (or other mental health professionals to the extent authorized under State law); occupational therapy requiring the skills of a qualified occupational therapist; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes (which cannot, as determined in accordance with regulations, be self-administered); individualized activity therapies that are not primarily recreational or diversionary; family counseling (the primary purpose of which is treatment of the individual's condition); patient training and education (to the extent that training and educational activities are closely and clearly related to individual's care and treatment); diagnostic services; and such other items and services as the Secretary may provide (excluding meals and transportation) that are reasonable [[Page 81839]] and necessary for the diagnosis or active treatment of the individual's condition, reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization, and furnished pursuant to such guidelines relating to frequency and duration of services as the Secretary shall by regulation establish, taking into account accepted norms of medical practice and the reasonable expectation of patient improvement. In the CY 2024 OPPS proposed rule (88 FR 49715), we stated that, in order to be consistent with the scope of benefits required for IOP services under section 1861(ff)(2) of the Act, we proposed to adopt the same standards for IOP services furnished in RHCs and FQHCs as they were proposed for the outpatient hospital setting. For the outpatient hospital setting, we proposed to add regulations at Sec. 410.44 to set forth the conditions and exclusions that would apply for intensive outpatient services (88 FR 49700). Therefore, to be consistent with the statute, we proposed revisions to the RHC and FQHC regulations at 42 CFR part 405, subpart X, that would crosswalk to Sec. 410.44. Specifically, we proposed the following conforming regulatory changes: At Sec. 405.2401, Scope and definitions, we proposed to amend the section to add IOP services. At Sec. 405.2411, Scope of benefits, we proposed to amend the section to include IOP services. At Sec. 405.2446, Scope of services, we proposed to amend this section to include IOP services. We noted that these proposals would expand access to behavioral health treatment for Medicare beneficiaries and to ensure continuity of care for IOP services to best meet patient needs. The following is a summary of the public comments received on the scope of benefits for IOP services furnished in RHCs/FQHCs and our responses: Comment: Many commenters supported our proposal to use the same standards for IOP services furnished in RHCs/FQHCs as in other settings. Commenters stated that these services would expand access to affordable and culturally competent services for the most vulnerable Medicare beneficiaries and hopefully increase rural uptake of this program. One commenter urged CMS to implement these proposals permanently as they will reduce barriers for patients, increase access to crucial services, and improve equity. One commenter encouraged CMS to continue to seek ways to clarify and enhance occupational therapy's role within FQHCs and RHCs. Other commenters urged CMS to provide additional guidance to health centers on classifying professional services furnished by physicians, NPs, PAs, and psychologists during an IOP service. Response: We appreciate the commenters support. As we noted in the CY 2024 OPPS proposed rule (88 FR 49714) and as discussed in section VIII.B.2 of this final rule with comment period, section 4124 of the CAA, 2023 established Medicare coverage for IOP services to be furnished by FQHCs and RHCs, effective January 1, 2024. Therefore, beginning January 1, 2024, IOP is a permanent benefit that RHCs and FQHCs will be able to furnish in their respective settings. Regarding occupational therapy's role within RHCs and FQHCs, we note the IOP benefit includes occupational therapy as part of its list of items and services. To reiterate, the types of services covered as intensive outpatient services and the classifications of the types of professional that can provide some of the services include: individual and group therapy with physicians or psychologists or other mental health professionals to the extent authorized under State law; occupational therapy requiring the skills of a qualified occupational therapist, provided by an occupational therapist, or under appropriate supervision of a qualified occupational therapist by an occupational therapy assistant; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes; individualized activity therapies that are not primarily recreational or diversionary; family counseling, the primary purpose of which is treatment of the individual's condition; patient training and education, to the extent the training and educational activities are closely and clearly related to the individual's care and treatment; and diagnostic services. CMS is unclear about what the commenter meant by ``classifying professional services,'' but we note that physicians, NPs, PAs, and psychologists are practitioners in FQHCs and as such can furnish IOP services. As with any new benefit under Medicare for RHCs and FQHCs, we will be updating our sub-regulatory guidance and providing outreach and education. After consideration of the public comments we received, we are finalizing our proposal to adopt the same standards for IOP services furnished in RHCs and FQHCs as in the outpatient hospital and CMHC settings, as proposed. That is, IOP services are services that: (1) are reasonable and necessary for the diagnosis or active treatment of the individual's condition; (2) are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization; (3) are furnished in accordance with a physician certification and plan of care as specified under new regulations at Sec. 424.24(d); and can be individual and group therapy, occupational therapy, drugs and biologicals furnished for therapeutic purposes, which cannot be self-administered, family counseling, beneficiary education, and diagnostic services. Accordingly, we are finalizing our proposal to make conforming regulatory changes to Sec. Sec. 405.2401, 405.2411, and 405.2446. We note a detailed discussion regarding the final policies under Sec. 410.44 are available in section VIII.B.2 of this final rule with comment period. b. Certification and Plan of Care Requirements for IOPs in RHC and FQHC Settings Section 4124(b)(2)(B) of the CAA, 2023 amended section 1861(ff) of the Act to add paragraph (4) to define intensive outpatient services as the items and services prescribed by a physician for an individual determined (not less frequently than once every other month) by a physician to have a need for such services for a minimum of 9 hours per week and provided under a program described in paragraph (3) (that is, an outpatient program of mostly mental health related services and therapies provided by a hospital or CMHC on an outpatient basis) under the supervision of a physician. The services must be provided pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. In the CY 2024 OPPS proposed rule (88 FR 49716), we stated to be consistent with physician certification and plan of care requirements required for IOP under section 1861(ff)(4) of the Act, we proposed to adopt the same standards for RHCs and FQHCs as they were proposed for the outpatient hospital setting. For the outpatient hospital setting, we proposed to codify the content of the certification and plan of treatment requirements for intensive outpatient services at Sec. 424.24(d) (88 FR 49702). We explained that physicians would be required to certify that an [[Page 81840]] individual needs IOP services for a minimum of 9 hours per week and no more than 19 hours per week, as set out in section 4124 of CAA, 2023. This certification would require documentation to include that the individual requires such services for a minimum of 9 hours per week; require the first certification as of the 30th day of IOP services; and require that the certification of IOP services occur no less frequently than every other month. Therefore, to be consistent with the statute, we proposed to revise our regulations at 42 CFR part 405, subpart X, to specify that for the purpose of furnishing IOP services RHCs and FQHCs must similarly meet the certification and plan of care requirements at proposed Sec. 424.24(d). As discussed in the CY 2024 OPPS proposed rule (88 FR 49716), we also proposed to establish the same patient eligibility criteria for intensive outpatient services as described in proposed Sec. 410.44(c). Specifically, we proposed that intensive outpatient services are intended for patients who: (1) require a minimum of 9 hours per week of therapeutic services as evidenced in their plan of care; (2) are likely to benefit from a coordinated program of services and require more than isolated sessions of outpatient treatment; (3) do not require 24-hour care; (4) have an adequate support system while not actively engaged in the program; (5) have a mental health diagnosis; (6) are not judged to be dangerous to self or others; and (7) have the cognitive and emotional ability to participate in the active treatment process and can tolerate the intensity of the intensive outpatient program. The following is a summary of the public comments received on the certification and plan of care requirements for IOP services furnished in RHCs/FQHCs and our responses: Comment: Commenters were supportive of CMS' proposal to adopt the same standards of physician certification and plan of care requirements for IOP services furnished in RHCs and FQHCs. One commenter recommended that CMS ensure that IOP certification appointments count as FQHC visits by amending the Medicare FQHC-specific payment codes to allow for a physician visit with the purpose of evaluating a patient for IOP (or recertifying the patient) to qualify as a billable mental health ``visit.'' Response: We appreciate the support received from commenters. In response to comments regarding the IOP certification appointments counting as an FQHC visit, we note that medically necessary medical, mental health, or qualified preventive health services that require the skill level of an RHC or FQHC practitioner are RHC or FQHC billable visits. We believe that the physician determination of the need for a patient to receive IOP services, certification for IOP services and recertification would generally be tied to an E/M visit and qualify as an RHC or FQHC billable visit. We believe that the FQHC Specific Payment Code list of qualifying visits under FQHC PPS \166\ includes an array of services and appears to capture the type of visit, that is a medical or mental health service that could determine a patient's need for IOP and certification or recertification. --------------------------------------------------------------------------- \166\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/fqhcpps/downloads/fqhc-pps-specific-payment-codes.pdf. --------------------------------------------------------------------------- Comment: We received a comment from an RHC association in response to the comment solicitation in the CY 2024 OPPS proposed rule on peer services, and whether these would be appropriate to include for PHPs and IOPs (88 FR 49707). The commenter supports including services that are furnished by a peer support specialist as IOP services. They stated that rural areas are facing a dearth of behavioral health practitioners and oftentimes rely upon professionals with less intensive education and training requirements, like peer support specialists. The commenter further stated that peer support specialists also bring lived experience to their work, which can help them address the unique needs of rural beneficiaries with behavioral health diagnoses and that peer support specialists could be treated similarly to community health workers in CMS' proposed community health integration services. Response: We thank the commenter for raising this concern. As discussed in section VIII.C of this final rule with comment period, CMS is adopting principal illness navigation (PIN) services as applicable to IOP to be included as IOP services after consideration of the comments received in support of the inclusion of peer support specialist services. Specifically, we discuss the appropriateness of the PIN services described by codes G0023, G0024, G0140, and G0146. Consequently, to the extent that such services are permissible under Sec. 410.44, RHCs and FQHCs could provide them as part of the IOP benefit. We believe peer support workers are people who have been successful in the recovery process who help others experiencing similar situations. Through shared understanding, respect, and mutual empowerment, peer support workers help people become and stay engaged in the recovery process and reduce the likelihood of relapse. Peer support services can effectively extend the reach of treatment beyond the clinical setting into the everyday environment of those seeking a successful, sustained recovery process. Peer support workers typically engage in a wide range of activities, including: advocating for people in recovery; sharing resources and building skills; building community and relationships; leading recovery groups; and mentoring and setting goals. With regard to RHCs and FQHCs, we believe that peer support specialists are considered auxiliary personnel, and as such can provide RHC/FQHC services under the direct supervision of the RHC or FQHC practitioner, as long as the peer support specialists are certified or trained to provide all elements in the corresponding service and be authorized to perform them under applicable State law and regulations. A detailed discussion regarding PIN services is available in section II.E of the CY 2024 PFS final rule. After consideration of the public comments we received, we are finalizing our proposal to adopt the same standards for physician certification and plan of care requirements for RHCs and FQHCs providing IOP services as in the outpatient hospital and CMHC settings. In summary, certification requirements include the physician certifying and documenting that the patient has a need for a minimum of 9 hours of IOP services and must occur at least once every other month.\167\ The patient's individualized plan of treatment should address all of the conditions that are being treated by the IOP. Recertification of IOP should occur at least every 60 days. --------------------------------------------------------------------------- \167\ We note in the CY 2024 OPPS proposed rule (88 FR 49716), we incorrectly summarized the proposed language for Sec. 424.24(d), that is, (1) that the physician must also certify that an individual needs IOP services for no more than 19 hours per week and (2) that it is a requirement for the first certification take place as of the 30th day of IOP services. --------------------------------------------------------------------------- Accordingly, we are finalizing that for the purpose of furnishing IOP services, RHCs and FQHCs must similarly meet the certification and plan of care requirements at Sec. 424.24(d). This provision is codified in the RHC/FQHC regulations in the final revisions to Sec. Sec. 405.2401, 405.2411, and 405.2446 by way of the crosswalk to Sec. 410.44 as finalized above in section VIII.B.3. of this final rule with comment period. That is, in Sec. 410.44(a)(3) we have finalized requirements that intensive outpatient services are furnished in [[Page 81841]] accordance with a physician certification and plan of care as specified under Sec. 424.24(d). We note a detailed discussion regarding the final policies under Sec. 424.24(d) are available in section VIII.B.3 of this final rule with comment period. In addition, we are finalizing the same patient eligibility criteria for intensive outpatient services as described Sec. 410.44(c), as proposed. Specifically, we are finalizing requirements that intensive outpatient services are available for patients who meet the following criteria: (1) require a minimum of 9 hours per week of therapeutic services as evidenced in their plan of care; (2) are likely to benefit from a coordinated program of services and require more than isolated sessions of outpatient treatment; (3) do not require 24-hour care; (4) have an adequate support system while not actively engaged in the program; (5) have a mental health diagnosis; (6) are not judged to be dangerous to self or others; and (7) have the cognitive and emotional ability to participate in the active treatment process and can tolerate the intensity of the intensive outpatient program. We note a detailed discussion regarding the final policies under Sec. 410.44(c) are available in section VIII.B.2.a. of this final rule with comment period. 4. Special Payment Rules for Intensive Outpatient Services Under Medicare Part B, payment to RHCs for services (defined in Sec. 405.2411) furnished to beneficiaries is made on the basis of an all-inclusive payment methodology subject to a maximum payment per- visit and annual reconciliation. Our regulations at Sec. 405.2470 provide that RHCs are required to submit cost reports to allow the Medicare Administrative Contractor (MAC) to determine payment in accordance with 42 CFR part 405, subpart X, and instructions issued by CMS. The beneficiary is responsible for the Medicare Part B deductible and coinsurance amounts. Section 1866(a)(2)(A)(ii) of the Act and implementing regulations at Sec. 405.2410(b) establish beneficiary coinsurance at an amount not to exceed 20 percent of the clinic's reasonable charges for covered services. Under Medicare Part B, FQHCs are paid under the FQHC PPS for services (defined in Sec. 405.2446) furnished to beneficiaries. The statutory payment requirements for FQHC services are set forth at section 1834(o) of the Act. In addition, section 1833(a)(1)(Z) of the Act requires Medicare payment for FQHC services, determined under section 1834(o) of the Act, to be 80 percent of the lesser of the actual charge or the amount determined under section 1834(o) of the Act. Under the FQHC PPS, FQHCs are paid based on the lesser of the FQHC's actual charge for the service or the PPS rate (Sec. 405.2462(g)(1)). The FQHC PPS rate is subsequently adjusted for certain circumstances as described under Sec. 405.2464(b)(2). The Medicare Part B deductible does not apply to FQHC services. The beneficiary is responsible for a coinsurance amount of 20 percent of the lesser of the FQHC's actual charge for the service or the adjusted PPS rate. As we discuss in the CY 2021 PFS final rule (85 FR 84699 through 84710), the FQHC PPS base payment is annually increased by the percentage increase in the FQHC market basket, which reflects the operating and capital cost structures for freestanding FQHC facilities. Beginning with CY 2017, FQHC PPS payments were updated using a 2013- based FQHC market basket. A complete discussion of the 2013-based FQHC market basket can be found in the CY 2017 PFS final rule (81 FR 80393 through 80403). In the CY 2021 PFS final rule, we finalized the rebasing and revising of the FQHC market basket to reflect a 2017 base year. The 2017-based FQHC market basket is primarily based on Medicare cost report data for freestanding FQHCs for 2017, which are for cost reporting periods beginning on and after October 1, 2016, and prior to September 31, 2017. We explained that we used data from cost reports beginning in FY 2017 because these data were the latest available, complete data for calculating the major cost weights for the market basket at the time of rulemaking. We also explained that CMS updates the market basket periodically so that the cost weights reflect a current mix of goods and services purchased in providing FQHC services. Seven FQHCs that have been determined to be grandfathered tribal FQHCs and due to this designation are paid based on the lesser of the outpatient per visit rate or their actual charges, as set out at Sec. 405.2462(f). These grandfathered tribal FQHCs are paid the outpatient per visit rate for furnishing FQHC services. In addition to the normal package of services, RHCs and FQHCs receive payment for certain additional services. In the CY 2022 PFS final rule (86 FR 65205 and 65206), we implemented section 132 of CAA, 2021, which amended section 1834(o) of the Act and added a new section 1834(y) to the Act, to provide statutory authority for FQHCs and RHCs, respectively, to receive payment for hospice attending physician services. In the CY 2023 PFS final rule (87 FR 69463, 69737 through 69739) we implemented sections 304(b) and (c) of division P of the CAA, 2022 (Pub. L. 117-103, March 15, 2022). Those subsections modified sections 1834(y) and 1834(o)(4) of the Act, respectively, to delay in- person visit requirements in order to for RHCs and FQHCs to receive payment for mental health visits furnished via telecommunications technology. As we discuss in the CY 2024 OPPS proposed rule (88 FR 49716 and 49717), section 4124(c) of the CAA, 2023 further amended section 1834(o) of the Act and section 1834(y) of the Act, to provide special payment rules for both FQHCs and RHCs, respectively, for furnishing intensive outpatient services. Section 4124(c)(1) of the CAA, 2023 amended section 1834(o) of the Act to add a new paragraph (5)(A) to require that payment for IOP services furnished by FQHCs be equal to the amount that would have been paid under Medicare for IOP services had they been covered outpatient department services furnished by a hospital. In addition, section 4124(c)(2) of the CAA, 2023 amended section 1834(y) of the Act to add a new paragraph (3)(A) to require that payment for IOP services furnished by RHCs be equal to the amount that would have been paid under Medicare for IOP services had they been covered outpatient department services furnished by a hospital. In the CY 2024 OPPS proposed rule (88 FR 49707 through 49711), we provide a detailed discussion of the proposed CY 2024 payment rate methodology for IOP. We proposed to establish two IOP APC per diem payment rates for hospital-based IOPs (APC 5861 and APC 5862 for 3- service days and 4-service days, respectively). Consequently, in the CY 2024 OPPS proposed rule (88 FR 49716 and 49717), we addressed our proposed payment policy for RHCs and FQHCs that furnish IOP services. We stated that we believe that it is appropriate to provide a payment structure that supports beneficiaries in an IOP where the utilization is typically structured to be days with three or fewer services. Therefore, we proposed that the rate determined for APC 5861 (Intensive Outpatient (3 services per day) for hospital-based IOPs) would be the payment rate for IOP services furnished in an RHC. For IOP services furnished in FQHCs, we proposed that payment be based on the lesser of a FQHC's actual charges or the rate determined for APC 5861. Additionally, we proposed that grandfathered tribal FQHCs will [[Page 81842]] continue to have their payment based on the outpatient per visit rate when furnishing IOP services. That is, payment is based on the lesser of a grandfathered tribal FQHC's actual charges or the outpatient per visit rate. We proposed to revise Sec. Sec. 405.2410, 405.2462, and 405.2464 in the regulations to reflect the payment amount for IOP services and how the Medicare Part B deductible and coinsurance are applied. In addition, we solicited comment on whether the payment rate for IOP services furnished in RHCs and FQHCs should be adjusted to reflect the variations in costs of furnishing services in different geographic areas and what approaches would be appropriate for determining the value of the adjustment. We also solicited comment on whether the hospital-based IOP APC 5862 for 4-service days would be appropriate for RHCs and FQHCs. In the CY 2024 OPPS proposed rule (88 FR 49716 and 49717), we discussed the proposals for coding and billing for IOP services under the OPPS. We explained that beginning January 1, 2024, the hospital outpatient department and CMHCs would be able to furnish items and services of both PHPs and IOPs. We stated that we believed it was appropriate to align these programs by using a consolidated list of HCPCS codes would identify the full range of services that both IOPs and PHPs provide to Medicare beneficiaries for billing purposes. We explained that those settings are paid under the OPPS and since they can furnish either PHP or IOP, when submitting a claim to CMS for payment they would be required to report a new condition code 92 to differentiate between PHP and IOP. We explained that, while RHCs and FQHCs are not authorized to furnish PHP services, we proposed to also require RHCs and FQHCs to report condition code 92 to identify intensive outpatient claims. Since RHCs and FQHCs are paid for IOP services outside of the RHC AIR methodology and FQHC PPS, we believe the condition code reporting approach would allow us to operationalize a 3 service per day payment amount using the final list of HCPCS codes used to identify the full range of services for IOP. In addition, we proposed to align with the requirement under the OPPS, which is in order to qualify for IOP payment, at least one service must be from the Intensive Outpatient Primary list. We stated, section 4124(c)(1) of the CAA, 2023 amended section 1834(o) of the Act to add a new paragraph (5)(B) to require that costs associated with intensive outpatient services not be used to determine the amount of payment for FQHC services under the FQHC PPS. Likewise, section 4124(c)(2) of the CAA, 2023 amended section 1834(y) of the Act to add a new paragraph (3)(B) to require that costs associated with intensive outpatient services not be used to determine the amount of payment for RHC services under the methodology for all-inclusive rates (established by the Secretary) under section 1833(a)(3) of the Act. Therefore, we proposed conforming revisions under Sec. 405.2468. In addition, we stated conforming revisions would be made to the cost reporting instructions to account for these changes. We received many comments on our proposals to implement the special payment rule provisions required by section 4124(c)(1) and (2) of the CAA, 2023. The following is a summary of the public comments received on the special payment rules for IOP services furnished in RHCs/FQHCs and our responses: Comment: Commenters were generally supportive of payment for IOP services furnished by RHCs/FQHCs to be paid outside of the RHC AIR and the FQHC PPS and be paid at the hospital outpatient department (HOPD) rate. Commenters were supportive of CMS' proposal for establishing an IOP APC per diem payment rates for hospital-based IOP for a 3-service day and the use of the condition code for IOP services and agreed with the applicability for RHCs and FQHCs. Commenters also supported CMS' calculation of the IOP payment methodology. Commenters stated that they understood that the statutory language is clear on RHC payment being ``equal to the amount that would have been paid under this title for such services had such services been covered HOPD services furnished by a hospital.'' Response: We appreciate the commenters support on the special payment rules as it relates to payment for IOP services at the HOPD rate. Comment: One commenter stated that flexibilities granted within this new benefit for other providers should be extended to RHCs as well and asked CMS to allow RHCs to bill for the 3-service day, in the occasional instance when a patient completes three or fewer services in a day, as well. Response: As we discuss above, in the CY 2024 OPPS proposed rule (88 FR 49717) we proposed to align with the requirement under the OPPS, that in order to qualify for IOP payment, at least one service must be from the Intensive Outpatient Primary list. We note Table 99 of this final rule with comment period identifies the list of intensive outpatient primary services. We believe that this policy is consistent with the commenter's request. In addition, since we otherwise did not receive comment on the proposal, we are finalizing it as proposed. We continue to believe that it is appropriate to provide a payment structure that supports beneficiaries in an IOP where the utilization is typically structured to be days with three or fewer services. Comment: We received a few comments with respect to CMS' solicitation of comments on whether the hospital-based IOP APC 5862 for 4-service days would be appropriate for RHCs and FQHCs. Several commenters requested that CMS apply the hospital-based IOP rate for 4- service days to RHCs/FQHCs to account for any variations in the cost of furnishing these services in RHCs compared to other settings and geographic areas. One commenter stated that to help address disparities that hinders access to diagnosis and treatment for severe mental illness (SMI), major depressive disorder (MDD), and postpartum depression (PPD) due to severe mental health provider shortages, CMS should finalize an upward variation in the payment rate. The commenter stated that this issue disproportionately impacts rural communities and minorities. Another commenter stated that given IOP is an entirely new benefit and that there is no data on its utilization or cost, CMS should grant broad flexibilities to all providers eligible for the benefit so it can be used as necessary for patients whether three or four separate qualifying IOP services are reported on the claim with condition code 92, the RHC should be eligible to receive the associated payment, $284.00 or $368.18, respectively, similar to how the program will be structured for hospital-based IOPs. Response: We appreciate feedback in response to our comment solicitation on whether the hospital-based IOP APC 5862 for 4-service days would be appropriate for RHCs and FQHCs. We did not propose the stratified payment rate structure in the initial year of this new benefit for a couple reasons. Section 1861(aa)(2)(K)(iv) of the Act describes an RHC and states that an RHC is not a rehabilitation agency or a facility which is primarily for the care and treatment of mental diseases. Given this statutory provision, we believe uptake will be slow since these settings currently focus on primary care service. We believe providing a single payment rate valued at 3 services is adequate in these settings since the expected acuity of the patients are such that they [[Page 81843]] typically do not need more than 3 services per day. We do not believe that access would be hindered in these early stages of a new benefit. Considering a week's worth of care which is how the physician certifies the individual, RHCs and FQHCs will be paid each day an IOP service is furnished whether it is 1 or more so in the rare occasion someone is in the clinic and receives 4 services (but is paid for 3), there could be days that week where someone is in the clinic and receives 1 service (but is paid for 3). Since this is a new program for these settings, we encourage RHCs and FQHCs to report all of the IOP services they furnish on the claim so that we can gather data. We are excited for RHCs and FQHCs to have the opportunity to furnish IOP services and we are interested to see these programs grow. We plan to monitor utilization of IOP services in these and other settings to inform refinements in the future. Comment: A few commenters requested that CMS clarify that an FQHC's payment amount for IOP services would be the lesser of the FQHC's actual charges for IOP services or the payment amount for a hospital outpatient department providing IOP services. Response: In response to commenters request that CMS clarify FQHC payment, we refer the commenter to the discussion in the proposed rule (88 FR 49716 and 49717), that the statutory payment requirements for FQHC services are set forth in section 1834(o) of the Act. In addition, section 1833(a)(1)(Z) of the Act requires Medicare payment for FQHC services, determined under section 1834(o) of the Act, to be 80 percent of the lesser of the actual charge or the amount determined under section 1834(o) of the Act. When we apply this framework, section 1834(o)(5)(A) of the Act as amended by CAA, 2023 requires payment for IOP services furnished by FQHCs be equal to the amount that would have been paid under Medicare for IOP services had they been covered outpatient department services furnished by a hospital. Therefore, this payment amount determined under section 1834(o) of the Act, is subject to the lesser of provisions required under section 1833(a)(1)(Z) of the Act. To clarify, as we finalize above, an FQHC's payment amount for IOP services would be the lesser of the FQHC's actual charges for IOP services or the rate determined for APC 5861. Comment: With respect to CMS' solicitation of comments on whether the payment rate for IOP services furnished in RHCs/FQHCs should be adjusted to reflect the variations in cost of furnishing services in different geographic areas, one commenter stated that to offer these services, RHCs may need to recruit and retain additional providers and staff or make additional investments in their clinics with associated expenses that may be higher due to their rural locations. The commenter further stated that many RHCs face challenges with reliable broadband connection, limited professional staff, etc. Therefore, they would support a payment adjustment of 5% for rural providers (practicing in areas of 50,000 or less) offering IOP services. A few commenters did not support a geographic adjustment for reimbursement of IOP services furnished in RHCs because RHC reimbursement methodology for the Original Medicare program does not have a mechanism for applying a geographic adjustment, and adding the geographic adjustment as an additional factor will result in inconsistency and unnecessary complexity. Other commenters stated that they did not believe the application of a geographical adjuster is statutorily required or required by regulation since payment for IOP is not under the FQHC PPS and did not believe a geographical adjuster is necessary for the purposes of payment for IOP services. These commenters urged CMS adopt policies that ensure payments for IOP services are equal, no matter the location of the health center. Response: We appreciate feedback in response to our comment solicitation on whether the payment rate for IOP services furnished in RHCs and FQHCs should be adjusted to reflect the variations in costs of furnishing services in different geographic areas and what approaches would be appropriate for determining the value of the adjustment and may take this information into consideration for future rulemaking. Comment: There were a few comments related to billing for IOP services. Some commenters stated that the proposal did not mention whether RHCs/FQHCs will be required to use specific coding (i.e., list each HCPCS code for each discreet service provided in an IOP service day) on IOP claims and think that doing so would be beneficial in that it would improve CMS' access to complete information on the provision of IOP across various settings. Other commenters stated that CMS should clarify if FQHCs should bill for professionals' services (i.e., MD, NPs, PA, and psychologists) via the FQHC PPS or use their Part B enrollment. These commenters believe that health centers should be permitted to allocate the allowable costs like salary, contracting and/ or benefits costs associated with these professionals' time under the ``FQHC services'' cost report, if it cannot be included under their IOP cost report. Some commenters requested that CMS provide operational clarifications on how it plans to require FQHCs to bill for IOP services. Response: We thank the commenters for their questions on billing for IOP services. We agree that specific coding for IOP services will improve CMS access to complete information and provide us with more data with which to monitor IOP services. In response to comments on the use of specific coding on IOP claims, we stated in CY 2024 OPPS proposed rule (88 FR 49717), we proposed to also require RHCs and FQHCs to report condition code 92 to identify intensive outpatient claims. Since RHCs and FQHCs are paid outside of the RHC AIR methodology and FQHC PPS, respectively, for IOP services we believe the condition code reporting approach will allow us to operationalize a 3 service per day payment amount using the final list of HCPCS codes used to identify the full range of services for IOP and therefore we proposed to adopt the same list of services. The list of proposed HCPCS codes is included in Table 96 of this final rule with comment period for reference. In addition, we proposed to align with the requirement under the OPPS, which is in order to qualify for IOP payment, at least one service must be from the Intensive Outpatient Primary list. Table 97 of this final rule with comment period identifies the proposed list of intensive outpatient primary services. Regarding commenters' request for CMS to clarify if FQHCs should bill for professionals' services (i.e., MD, NPs, PA, and psychologists) via the FQHC PPS or use their Part B enrollment, as IOP services are a new benefit for RHCs and FQHCs, the service is billed on the FQHC claim and not on a professional claim using the practitioners Part B enrollment. Therefore, we would like to reiterate that although RHCs and FQHCs are paid outside of the RHC AIR methodology and FQHC PPS, respectively, for IOP services, FQHCs should bill the same way that they currently bill today, that is, on the FQHC claim. We will be issuing sub regulatory guidance and billing instructions related to the RHC and FQHC IOP policies finalized in this final rule as is typically done with any new service. Comment: One commenter agrees and supports the proposal to pay Grandfathered Tribal FQHCs that furnish IOP services based on the outpatient per visit rate via the IHS AIR. [[Page 81844]] Response: We appreciate the support received from the commenter. After consideration of the public comments we received, we are finalizing our proposal to implement the special payment rules for IOP services as proposed. We are finalizing that the rate determined for APC 5861 (Intensive Outpatient (3 services per day) for hospital-based IOPs) is the payment rate for IOP services furnished in an RHC. For IOP services furnished in FQHCs, the payment is based on the lesser of a FQHC's actual charges or the rate determined for APC 5861. Additionally, grandfathered tribal FQHCs will continue to have their payment based on the outpatient per visit rate when furnishing IOP services. That is, payment is based on the lesser of a grandfathered tribal FQHC's actual charges or the outpatient per visit rate. Accordingly, we are finalizing revisions to Sec. Sec. 405.2410, 405.2462, and 405.2464 in the regulations to reflect the payment amount for IOP services and how the Medicare Part B deductible and coinsurance are applied. Finally, we are finalizing to require RHCs and FQHCs to report condition code 92 to identify intensive outpatient claims. Tables 98 and 99 of this final rule with comment period display the final HCPCS applicable for IOP and the final IOP primary services, respectively. c. FQHC Supplemental Payments As discussed in the May 2, 2014 final rule with comment period (79 FR 25461), section 1833(a)(3)(B)(i)(II) of the Act requires that FQHCs that contract with MA organizations be paid at least the same amount they would have received for the same service under the FQHC PPS. This provision ensures FQHCs are paid at least the Medicare amount for FQHC services. Therefore, if the MA organization contract rate is lower than the amount Medicare would otherwise pay for FQHC services, FQHCs that contract with MA organizations would receive a wrap-around payment from Medicare to cover the difference (see Sec. 422.316). If the MA organization contract rate is higher than the amount Medicare would otherwise pay for FQHC services, there is no additional payment from Medicare. In the CY 2024 OPPS proposed rule (88 FR 49717), we stated that we believe the special payment rule, is also included in the FQHC PPS rate as described in section 1834(o) of the Act and therefore, IOP services are included in the wrap-around payment. We proposed to make revisions under Sec. 405.2469 to reflect these changes. The following is a summary of the public comments received on the FQHC supplemental payment for IOP services furnished in FQHCs and our responses: Comment: Commenters were generally supportive of CMS' proposal on the FQHC supplemental payments. Some commenters stated that the proposed rule failed to acknowledge that health centers are reimbursed outside of the FQHC PPS rate for IOP, which requires a different supplemental payment rate methodology and strongly urged CMS to adopt a broader interpretation of the special payment rule to ensure health centers are paid up to the original Medicare amount that would be paid for IOP services, which is not FQHC PPS. Commenters requested that CMS clarify in the final rule that supplemental payments for Medicare Advantage (MA) beneficiaries cover the difference between the contract rate and the IOP service rate. Response: We would like to reiterate that we stated in the CY 2024 OPPS proposed rule (88 FR 49717), that IOP services provided in an FQHC are also subject to the wrap-around payment. We stated that this provision ensures FQHCs are paid at least the Medicare amount for FQHC services, which includes FQHC PPS and now IOP services. Therefore, if the MA organization contract rate is lower than the amount Medicare would otherwise pay for FQHC IOP services, FQHCs that contract with MA organizations would receive a wraparound payment from Medicare to cover the difference (see Sec. 422.316). We further stated that if the MA organization contract rate is higher than the amount Medicare would otherwise pay for FQHC IOP services, there is no additional payment from Medicare for IOP services. After consideration of the public comments, we are finalizing our proposal as proposed, that is revising Sec. 405.2469 to reflect that payment for IOP services are subject to the wrap-around payments. 5. Multiple Visits a. Background Currently, RHC and FQHC encounters with more than one health professional and multiple encounters with the same health professional that take place on the same day and a single location constitute a single visit, with the following exceptions: A patient has a medical visit and a mental health visit on the same day; or A patient has an initial preventive physical exam visit and a separate medical or mental health visit on the same day. In the CY 2024 OPPS proposed rule (88 FR 49717), we explained that since IOP services are behavioral health services, we did not believe it would be appropriate to pay for a mental health visit and IOP services on the same day. In the case of a medical visit, an encounter can include a medical visit and a mental health visit or a medical visit and IOP services. An encounter cannot include two mental health visits on the same day. As such, we proposed to make amend Sec. 405.2463(c) in the regulations to clarify that we will permit a mental health visit or IOP services on the same day as a medical visit. The following is a summary of the public comments received on multiple visits for IOP services furnished in FQHCs and our responses: Comment: We received a few comments on multiple visits. Commenters were generally supportive of CMS' proposal. Some commenters suggested that CMS allow, at a minimum, for an exception so that under emergency circumstances, an FQHC/RHC mental health visit could be furnished (and billable) on the same day that IOP services are provided. The commenters understood that that payment for IOP in FQHCs/RHCs, like IOP in other settings, will be subject to the clinician exclusions described in proposed 42 CFR 410.44(b) and that under this provision, the clinical services of various professionals, when delivered as part of an IOP care plan, are nonetheless unbundled and not paid for as IOP services under the OPPS, but instead, under the relevant Part B methodology. However, given that this provision will also apply to IOP furnished in FQHCs/RHCs, commenters stated that a prohibition on same- day payment for mental health visits in RHC/FQHC settings may be inappropriate. Other commenters strongly urged CMS to allow for a FQHC ``mental health visit'' to occur on the same day as IOP services. These commenters expressed concern that under the proposed rule, health centers risk providing a range of services to a patient without adequate reimbursement due to same-day billing restrictions and believe there could be instances where same-day IOP and mental health visits could occur. They stated as an example that when an IOP patient receives individual therapy sessions with physicians or psychologists as part of an IOP day, it appears that such a service would be billed separately under the relevant methodology (FQHC PPS). They further state that as patient centered medical homes, health centers should not be precluded from providing two different services to a patient on a single day and should be able to bill an FQHC PPS [[Page 81845]] mental health service and IOP service if delivered on the same day. Another commenter recommended CMS clarify that the IOP benefit does not preclude beneficiaries from receiving other services, including remote mental health services. Response: We thank the commenters for raising these concerns. As we stated in the proposed rule (88 FR 49717), IOP services are behavioral health services, and we did not believe it would be appropriate to pay for a mental health visit and IOP services on the same day. We understand that in the HOPD setting, additional mental health services may be provided, but are capped at a payment amount not to exceed the IOP or PHP payment amounts. We did not intend to imply that additional services would not be reportable. Under the RHC AIR and FQHC PPS, when there are multiple visits on the same day, we permit those services to be reported, however, we only pay for one visit. We believe the same situation applies here, that is, if additional mental health visits are needed in addition of the 3-IOP services per day, we would expect an RHC or FQHC to report those services on the claim. Payment for the service would be included in the IOP rate similar to how the additional mental health services would be paid for under the OPPS. After consideration of the public comments, we are finalizing our proposal with a clarification. We are amending Sec. 405.2463(c) in the regulations to state that we will pay a mental health visit or IOP services on the same day as a medical visit. We are clarifying that if a mental health visit is furnished the same day as IOP services, all services are covered under Medicare Part B, however, we will only pay the IOP rate and the mental health visit will be considered packaged. While there could be emergency circumstances for which a mental health visit and IOP services are furnished, at this time we believe that it is unlikely that an FQHC or RHC would simultaneously have a specific patient enrolled in the IOP and need a separate and distinct mental health service delivered at the same FQHC or RHC, in a given day of service. In addition, we believe that the payment amount is adequate if these situations occur, since the rate is based on the costs associated with administering an IOP in the hospital setting which represent a resource intensive program and, therefore, we should not pay more for a day with individual services. As we mentioned above, we recognize that this is a new program for these settings, we encourage RHCs and FQHCs to report all of the services they furnish on the claim so that we can gather data. We plan to monitor utilization of IOP services in these and other settings to inform refinements in the future. 6. Other Regulatory Updates In addition to the regulatory changes described in this section of the rule, we proposed a revision to Sec. 405.2400 to reflect that 42 CFR part 405, subpart X, is based not only on the provisions of sections 1833, 1861(aa), 1834(o) of the Act, but also the provisions under section 1834(y) of the Act. We believed we inadvertently did not revise the regulations when the CAA, 2021 amended section 1834 of the Act to add new paragraph (y), as we discuss in the CY 2022 PFS final rule (86 FR 65205 through 65206). We did not receive any comments on the proposal. Therefore, we are finalizing our proposal as proposed to revise Sec. 405.2400 to reflect that 42 CFR part 405, subpart X, is not based only on the provisions of sections 1833, 1861(aa), 1834(o) of the Act, but also the provisions under section 1834(y) of the Act.

G. Modifications Related to Medicare Coverage for Opioid Use Disorder

(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)

1. Background

Section 2005 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018) established a new Medicare Part B benefit category for OUD treatment services furnished by OTPs during an episode of care beginning on or after January 1, 2020. In the CY 2020 Physician Fee Schedule (PFS) final rule (84 FR 62630 through 62677 and 84 FR 62919 through 62926), we implemented Medicare coverage and provider enrollment requirements and established a methodology for determining the bundled payments for episodes of care for the treatment of OUD furnished by OTPs. We established new codes and bundled payments for weekly episodes of care that include methadone, oral buprenorphine, implantable buprenorphine, injectable buprenorphine or naltrexone, and non-drug episodes of care, as well as add-on codes for intake and periodic assessments, take-home dosages for methadone and oral buprenorphine, and additional counseling. For CY 2024, we proposed modifications to the regulations and policies governing Medicare coverage and payment for OUD treatment services furnished by OTPs in both the CY 2024 OPPS proposed rule (88 FR 49717 through 49723) as well as the CY 2024 PFS proposed rule (88 FR 52413 through 52416).

2. Statutory Authority for Coverage of Opioid Use Disorder Treatment

Service Provided by OTPs Intensive outpatient programs (IOPs) [American Society of Addiction Medicine (ASAM) Level 2.1 of Care] are diverse and flexible programs that can provide both a step-up and step-down level of care for the treatment of substance use disorders (SUDs). IOPs may offer a step-down level of care in cases where a patient has been stabilized in a hospital facility or residential treatment program but continues to need services to maintain or achieve further treatment progress. IOPs also offer a step-up level of care in cases where a patient may need a higher level of care that is more structured or intensive than what can be provided in a typical outpatient treatment setting that offers care on a less frequent basis.\168\ IOPs can be housed in an OTP, specialty addiction treatment facility, community mental health center (CHMC), or another setting.\169\ According to the National Substance Use and Mental Health Services Survey, as of 2021, approximately 557 OTPs offer IOP services nationwide (30.1 percent of SUD treatment facilities offering OTPs).\170\ Section 4124 of the Consolidated Appropriations Act (CAA), 2023, which was enacted on December 29, 2022, provides for Medicare coverage and payment for IOP services in hospital outpatient department (HOPDs), CMHCs, rural health clinics (RHCs), and federally qualified health centers (FQHCs). However, section 4124 of the CAA, 2023 did not address coverage for IOP services furnished in OTP settings. --------------------------------------------------------------------------- \168\ https://www.ncbi.nlm.nih.gov/books/NBK64088/. \169\ The ASAM National Guideline for the Treatment of Opioid Use Disorder (2020): https://sitefinitystorage.blob.core.windows.net/sitefinity-production-blobs/docs/default-source/guidelines/npg-jam-supplement.pdf?sfvrsn=a00a52c2_2 2. \170\ Substance Abuse and Mental Health Services Administration, National Substance Use and Mental Health Services Survey (N-SUMHSS), 2021: Annual Detailed Tables. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2023. Weblink: https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf. --------------------------------------------------------------------------- Section 1861(jjj)(1) of the Act defines ``opioid use disorder (OUD) treatment services'' as items and services that are furnished by an OTP for the treatment of OUD, including FDA-approved opioid agonist and antagonist [[Page 81846]] medications, dispensing and administration of such medications, substance use counseling, individual and group therapy, toxicology testing, and other items and services that the Secretary determines are appropriate (not including meals or transportation). For matters related to payment for OUD treatment services, section 1834(w) of the Act establishes that the Secretary shall pay bundled payments to OTPs when they furnish OUD treatment services to an individual during an episode of care. Section 1834(w)(2) of the Act states that for purposes of making payments to OTPs, the Secretary may establish one or more bundles based on the type of medication provided (such as buprenorphine, methadone, naltrexone, or a new innovative drug), the frequency of services, the scope of services furnished, characteristics of the individuals furnished such services, or other factors as the Secretary determine[s] appropriate. We interpret the statutory language at sections 1861(jjj) and 1834(w) of the Act to grant the Secretary authority to establish more than one bundled payment to OTPs for OUD treatment services furnished during an episode of care provided that the scope of services is medically reasonable and necessary for the treatment of OUD. In the CY 2020 PFS final rule (84 FR 62644), we finalized a definition of OUD treatment services as those items and services that are specifically enumerated in section 1861(jjj)(1) of the Act and finalized the weekly bundled payment for an episode of care. After considering public comments, under the discretion granted to the Secretary under section 1861(jjj)(1)(F) of the Act, we also included additional items and services, including intake activities and periodic assessments within the definition of OUD treatment services specified in 42 CFR 410.67(b) (84 FR 62634). In addition, under our authority under section 1834(w)(2) to create one or more bundled payments, we finalized that we would utilize add-on codes as a way to operationalize the creation of more than one bundled payment by making payment adjustments to the weekly bundled payment for the additional items and services. Furthermore, CMS aims to ensure that Medicare beneficiaries have appropriate access to high quality care for the treatment of OUD, and that services provided to treat SUD under the Medicare OTP benefit are consistent with the services that are available in other settings covered under Medicare Part B. For example, when CMS first established payment policy for OTPs under Medicare Part B in the CY 2020 PFS final rule (84 FR 62630 through 62677 and 84 FR 62919 through 62926), we considered the available benefits payable under Medicare at that time in determining what items to propose to include in the bundled payment for OUD treatment services furnished by OTPs. In light of new legislation (CAA, 2023) granting authority for Medicare payment of IOP services provided by other types of health care providers, we believe it is appropriate to revisit the range of services covered under the current benefit for OUD treatment services furnished by OTPs. In the CY 2023 PFS proposed rule, we solicited comments on whether there is a gap in coding under the PFS or other Medicare payment systems that may be limiting access to needed levels of care for treatment of mental health or SUD treatment for Medicare beneficiaries (87 FR 45943 and 45944). Specifically, we sought information on multiple issues, including: whether there is a gap in coding under Medicare payment systems that may be limiting access to needed levels of care for treatment of SUD; the extent to which potential gaps would best be addressed by the creation of new codes or billing rules; additional information related to IOP services, including their settings, scope and types of offered services, and practitioners involved; and, other relevant information to the extent it would inform our ability to ensure Medicare beneficiaries have access to this care. In response, many commenters noted that IOPs serve as a ``step-up'' level of care for individuals in need of more services/supports, close monitoring, and structured therapy, but who cannot stabilize at a lower level of care provided in an office setting. Commenters also noted that IOPs simultaneously serve as a ``step-down'' level of care for individuals who have more stabilized biomedical conditions and may no longer need to be hospitalized but cannot be discharged safely. Commenters mentioned that IOPs are tailorable to patient characteristics and are often flexible in the length, frequency, and days of treatment, but that typically patients receive at least 9 hours a week of care. Moreover, commenters stated that IOPs may be provided at stand-alone IOP facilities, OTPs, partial hospitalization programs, residential treatment centers, detoxification centers, or within a private outpatient office setting. Commenters further encouraged CMS to allow coverage for IOP services across the full continuum of care settings so that patients can receive the care they need in the setting that is most clinically appropriate. Furthermore, several commenters emphasized the importance of ensuring access to care for IOP services provided in OTP settings. For example, one commenter recommended ``that CMS also consider whether the agency has regulatory authority to extend coverage of any new IOP billing codes to OTPs.'' Other commenters also preferred the IOP payment methodology to be amenable and complementary to the weekly bundled payment of OTPs, including a building block methodology with drug and non-drug components, and add-on codes for greater clinical complexity. As a whole, commenters were very receptive to expanding access to IOP services in multiple settings of care, including within OTPs. Addressing the opioid crisis by expanding coverage for quality treatment options and reducing barriers to care continues to remain a high priority for CMS. Across the U.S., the rates of OUD have increased more than threefold and opioid-related mortality has increased by almost 18 percent amongst older adults in the past decade.\171\ From 2015-2019, nearly 1.7 million (3 percent of all) Medicare beneficiaries had a SUD, though only 11 percent of those beneficiaries received treatment for their condition in a given year.\172\ Among Medicare beneficiaries with a SUD, one-third reported that financial barriers were a reason for not receiving treatment. Research from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) indicates that health plans that offer coverage for a greater number of IOP services per enrollee experience higher rates of SUD treatment initiation and continued engagement within their enrollee populations.\173\ This suggests that IOP services could result in an increased rate of SUD treatment initiation and continued engagement. Therefore, expanding access to IOP services in other settings and reducing financial barriers to access to IOP services through coverage could potentially increase the number of Medicare beneficiaries seeking and completing treatment for a SUD, including among Medicare beneficiaries who are members of populations that have historically been less likely to receive such treatment. Studies have shown that among individuals in need of SUD treatment, Hispanic, Black, and [[Page 81847]] Asian populations are less likely to receive outpatient SUD treatment for their condition than their White counterparts, suggesting greater barriers to treatment access for these populations.\174\ Other evidence indicates that Black Americans significantly underutilize specialty SUD treatment and are also less likely to complete their SUD treatment programs compared to White Americans, but these disparities are reduced when Black Americans have access to health insurance.\175\ This evidence suggests that financial barriers impede initiation and completion of SUD treatment; in turn, providing health insurance coverage for SUD treatment services (such as IOP services) may lessen the impact of these financial barriers for all Medicare beneficiaries, including those who are more likely to experience these barriers. Some evidence also shows that zip codes in the U.S. within which there is at least one OTP tend to have a higher proportion of residents who are minorities (Black and Hispanic) and a lower proportion of White residents, compared to zip codes in the U.S. without any OTPs,\176\ and surveys of services provided by OTPs demonstrate that the majority of OTPs (82.6 percent) conduct community outreach services to those in need of treatment for OUD.\177\ This suggests that OTPs may be uniquely positioned to reach minority populations in need of IOP services, which would improve their access to SUD treatment services. In addition, from 2015 to 2019 and prior to implementation of the OTP benefit, Medicare beneficiaries younger than 65 years old were more likely to receive SUD treatment than those aged 65 years old or greater, due to more beneficiaries over age 65 reporting they could not afford treatment or that the treatment was not covered by Medicare or other insurance.\178\ Even after implementation of the OTP benefit, eliminating health disparities in access to SUD treatment for this older age bracket remains a priority. Therefore, we believe that expanding access to coverage and payment under Medicare for IOP services provided by OTPs may have a meaningful and positive impact on health equity, including for Medicare beneficiaries that may face barriers in accessing treatment, such as racial/ethnic minorities and/or beneficiaries aged 65 or older. Lastly, CMS' Behavioral Health Strategy includes multiple stated goals and objectives to promote person-centered behavioral health care.\179\ Expanding access to coverage and payment under Medicare for IOP services provided by OTPs may help strengthen access to SUD prevention, evidence-based treatment, and recovery services, as well as advance the equity and quality of behavioral health services, which are consistent with the goals of CMS' Behavioral Health Strategy. --------------------------------------------------------------------------- \171\ https://www.sciencedirect.com/science/article/pii/S0749379721000921?via%3Dihub. \172\ https://doi.org/10.15585/mmwr.mm675152e1. \173\ https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf. \174\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35326/2021NSDUHSUChartbook102221B.pdf. \175\ https://www.sciencedirect.com/science/article/pii/S0376871619302443. \176\ https://pubmed.ncbi.nlm.nih.gov/36645315/. \177\ https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf. \178\ https://www.sciencedirect.com/science/article/pii/S0749379722001040. \179\ https://www.cms.gov/cms-behavioral-health-strategy. ---------------------------------------------------------------------------

3. Coverage of IOP Services Furnished by OTPs

a. Inclusion of IOP Services Furnished by OTPs in the Definition of Opioid Use Disorder Treatment Service In recognition of the evidence provided in the discussion above, we understand that some Medicare beneficiaries may continue to face barriers in accessing treatment for their OUD. Additionally, we note that many OTPs nationwide already provide IOP services and that IOP services can be effective in promoting greater treatment initiation and engagement, which may improve health outcomes. For these reasons, and in order to expand access to behavioral health treatment for Medicare beneficiaries with OUD and ensure continuity of care between different treatment settings and levels of care, in the CY 2024 OPPS/ASC proposed rule CMS proposed to establish payment under Part B for IOP services furnished by OTPs for the treatment of OUD for CY 2024 and subsequent years. As explained previously, section 1861(jjj)(1) of the Act defines ``opioid use disorder treatment service'' as items and services that are furnished by an OTP for the treatment of OUD, including FDA- approved opioid agonist and antagonist medications, dispensing and administration of such medications, substance use counseling, individual and group therapy, toxicology testing, and other items and services that the Secretary determines are appropriate (not including meals or transportation). IOP services are intended to treat individuals with an acute mental illness and/or substance use disorder, including those with an OUD. We believe that IOP services are similar to the specific services enumerated in section 1861(jjj)(1) of the Act, and the services and intensity of care required to provide intensive outpatient services under Level 2.1 of the ASAM continuum of care are a step-up from the services within the existing OTP benefit. The ASAM criteria's strength-based multidimensional assessment takes into account a patient's needs, obstacles and liabilities, as well as their strengths, assets, resources, and support structure; this information is used to determine the appropriate level of care across a continuum.\180\ OTP services that are currently covered under the OTP benefit are at the Outpatient (Level 1) level of care, whereas IOP services are classified as Level 2.1 on ASAM's continuum of care. Individuals who meet the criteria for IOP services generally require more frequent and intensive services. --------------------------------------------------------------------------- \180\ https://www.asam.org/asam-criteria/about-the-asam-criteria. --------------------------------------------------------------------------- Because the Secretary has discretion under section 1861(jjj)(1)(F) of the Act to add other items and services furnished by an OTP for the treatment of OUD, as appropriate, we proposed to add a new paragraph (ix) to the definition of ``opioid use disorder treatment service'' in Sec. 410.67(b) defining a new category of services called ``OTP intensive outpatient services'' and incorporate OTP intensive outpatient services in the definition that are covered under the Part B OTP benefit. Specifically, we proposed to define OTP intensive outpatient services as those services specified in proposed 42 CFR 410.44(a)(4) when furnished by an OTP as part of a distinct and organized intensive ambulatory treatment program for the treatment of Opioid Use Disorder and that offers less than 24-hour daily care other than in an individual's home or in an inpatient or residential setting. OTP intensive outpatient services are services that are reasonable and necessary for the diagnosis or active treatment of the individual's condition; are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization; and are furnished in accordance with a physician certification and plan of care. We proposed that in order to qualify as ``OTP intensive outpatient services,'' a physician must certify that the individual has a need for such services for a minimum of 9 hours per week and requires a higher level of care intensity compared to existing OTP services. The specific services that we proposed to be considered OTP intensive outpatient services would include any of the following: [[Page 81848]] Individual and group therapy with physicians or psychologists or other mental health professionals to the extent authorized under State law. Occupational therapy requiring the skills of a qualified occupational therapist, provided by an occupational therapist, or under appropriate supervision of a qualified occupational therapist by an occupational therapy assistant as specified in part 484. Services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients. Drugs and biologicals furnished for therapeutic purposes, subject to the limitations specified in Sec. 410.29, excluding opioid agonist and antagonist medications that are FDA-approved for use in treatment of OUD or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose. Individualized activity therapies that are not primarily recreational or diversionary. Family counseling, the primary purpose of which is treatment of the individual's condition. Patient training and education, to the extent the training and educational activities are closely and clearly related to the individual's care and treatment. Diagnostic services that are reasonable and necessary for the diagnosis or active treatment of the individual's condition, with the exception of toxicology testing. We proposed to exclude FDA-approved opioid agonist or antagonist medications for the treatment of OUD or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose, specifically, methadone, buprenorphine, naltrexone and naloxone, from the definition of OTP intensive outpatient services because these medications are already included as part of the weekly bundled payment for an episode of care or as an adjustment to the bundled payment. However, we solicited comment on the types of drugs and biologicals that are furnished as part of an IOP program (for example, whether IOPs furnish drugs used for emergent interventions), and the extent to which these drugs overlap with medications included in the existing weekly bundles described by HCPCS codes G2067 through G2073 and/or add-on codes described by G2078 (take-home supply of methadone), G2079 (take- home supply of oral buprenorphine), G2215 (take-home supply of nasal naloxone), G2216 (take-home supply of injectable naloxone), and G1028 (take-home supply of nasal naloxone; 2-pack of 8mg per 0.1 mL nasal spray). We explained that this information would help to inform our consideration of the extent to which the drugs and biologicals furnished as part of an IOP program would already be covered under the drug component of the weekly bundled payment and the existing add-on payments or would need to be reflected in the proposed IOP add-on payment adjustment discussed in the next section. Similarly, we proposed to exclude toxicology testing from the types of diagnostic services that would be included in the definition of OTP intensive outpatient services because toxicology testing is already included within the definition of ``opioid use disorder treatment service'' and paid for as part of the weekly bundled payment for an episode of care. We received many public comments from a variety of commenters on our proposal to establish coverage for IOP services provided by OTPs and to include IOP services furnished by OTPs in the definition of opioid use disorder treatment service. The comments and our responses to these comments are included below. Comment: We received many comments in strong support of our proposal to establish coverage for IOP services provided by OTPs, with some commenters expressing appreciation specifically for the proposed inclusion of ``OTP intensive outpatient services'' under ``OUD treatment services'' at Sec. 410.67(b). Commenters agreed with CMS exercising its authority under sections 1861(jjj)(1)(F) and 1834(w) of the Act to establish coverage and payment for IOP services furnished at OTPs for beneficiaries who have an OUD. Commenters expressed that the proposal would improve access to OUD treatment, enhance continuity of care for patients with an OUD who need more intensive support and services, ensure that OTPs are reimbursed by Medicare for the full range of services they provide to beneficiaries, and promote efforts to improve health equity for racial/ethnic populations and older beneficiaries. Commenters expressed that establishing coverage for IOP services at additional sites of care, like OTPs, would further drive value for patients and provide another tool for providers to fight the ongoing opioid epidemic. Another commenter expressed support for our proposal and stated that our proposal goes beyond what was required of CMS in the original provisions specified in the CAA, 2023, which first authorized coverage and payment for IOP services under Medicare in only hospital outpatient departments, CMHCs, RHCs, and FQHCs. Response: We appreciate the support from commenters for our proposal to extend coverage for IOP services to OTPs for the treatment of OUD among Medicare beneficiaries and for recognition that our proposal would extend coverage for IOP services beyond the care settings addressed in the CAA, 2023 by allowing IOP services to be furnished in OTP settings. We agree that establishing coverage for IOP services at OTPs and including OTP intensive outpatient services under the definition of OUD treatment services could improve continuity of care between different treatment settings and levels of care, expand access to treatment for Medicare beneficiaries with an OUD, and further promote health equity among Medicare beneficiaries. Comment: Several commenters agreed with the proposal to exclude FDA-approved opioid agonist or antagonist medications for the treatment of OUD or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose (e.g, methadone, buprenorphine, naltrexone, and naloxone) from the definition of OTP intensive outpatient services since these medications are already included as part of the weekly bundled payment for an episode of care or as an adjustment to the bundled payment and since all necessary and appropriate Medications for Opioid Use Disorder (MOUD) should already be included in the bundle. Additionally, one commenter responded to our comment solicitation requesting additional details on the types of drugs or biologicals that can be provided within an IOP program, and if these drugs or biologicals overlap with existing medications included in the OTP weekly bundles or add-on codes for take-home medications. They stated that often medications administered as part of an IOP include drugs that cannot be self-administered such as extended-release formulations of buprenorphine and naltrexone used to treat OUD. The same commenter further requested that CMS provide clarification on whether the service associated with the administration of extended- release formulations of buprenorphine and naltrexone would be billed outside the add-on code for IOP services. Response: We thank commenters for agreeing with our proposal to exclude FDA-approved opioid agonist or antagonist medications for the emergency treatment of known or suspected opioid overdose from the definition of OTP intensive outpatient services. We also thank the commenter [[Page 81849]] who submitted additional information on the types of medications that are typically administered under an IOP. We note that extended-release formulations of buprenorphine and naltrexone, which the commenter stated are common medications used in IOP settings, and their administration by a healthcare professional are already covered under the existing weekly bundles described by HCPCS codes G2069 (medication- assisted treatment, buprenorphine (injectable)) and G2073 (medication- assisted treatment, naltrexone). Therefore, these services should continue to be billed using the existing codes describing weekly bundled payments to OTPs and not by billing the add-on payment for IOP services furnished by OTPs. Comment: One commenter stated that they supported CMS' proposal that would permit IOP and partial hospitalization program (PHP) services to be offered in OTPs. Response: We would like to clarify that the CY 2024 OPPS/ASC proposed rule included a proposal to provide coverage for IOP services furnished at OTPs, but not a proposal to provide coverage for PHP services furnished at OTPs. PHPs provide services to patients needing higher levels of care, requiring 20 or more hours of services per week (ASAM Level of Care 2.5), compared to IOPs which consists of at least 9 hours and no more than 20 hours per week of treatment services (ASAM Level of Care 2.1).\181\ --------------------------------------------------------------------------- \181\ https://www.asam.org/asam-criteria/about-the-asam-criteria. --------------------------------------------------------------------------- Comment: One commenter requested that the requirement for an ``adequate support system while not engaged in the program'' be removed, since this requirement is not reflected in the eligibility criteria for many other Medicare services and since individuals who need IOP services often do not have an adequate support system. Response: We clarify here that the requirement for an ``adequate support system while not engaged in the program'' was not proposed as a requirement for beneficiaries in need of IOP services in OTP settings. Rather, we proposed requirements under paragraph (ix) of the definition of ``opioid use disorder treatment service'' in 42 CFR 410.67(b) that ``OTP intensive outpatient services'' must be ``reasonable and necessary for the diagnosis or active treatment of the individual's condition; are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization; and are furnished in accordance with a physician certification and plan of care, in which a physician must certify that the individual has a need for at least a minimum of nine hours of services per week and requires a higher level of care intensity compared to other non-intensive outpatient OTP services.'' We note that this requirement for an ``adequate support system while not engaged in the program'' applies to PHP programs and for IOP services in other settings but not OTPs. For a discussion of this requirement and other conditions and exclusions pertaining to IOP services furnished in other settings, please reference section VIII.B.2.a of this final rule with comment period. Comment: We received multiple comments encouraging CMS to allow IOP services furnished by OTPs under Medicare to be extended to individuals with mental health conditions and SUDs other than OUD. Another commenter recommended that CMS articulate these broader diagnostic eligibilities for OTP intensive outpatient services in regulation. Response: We thank commenters for this feedback and acknowledge that OTPs may be treating individuals with a variety of mental health and SUD-related conditions, as well as co-occurring conditions in addition to OUD. However, section 1861(jjj)(1) of the Act, as added by section 2005 of the SUPPORT Act, established Medicare coverage for OUD treatment services furnished by OTPs and defined ``opioid use disorder treatment services'' as ``items and services that are furnished by an opioid treatment program for the treatment of opioid use disorder.'' Therefore, Medicare payment to OTPs must be for the purposes of treating OUD. When OTPs provide mental health and/or SUD services to individuals for primary conditions other than OUD, they would not be payable under Medicare. However, IOP services for the treatment of mental health and/or SUD services are payable under Medicare at hospital outpatient departments, CMHCs, FQHCs, and RHCs. Comment: One commenter requested that CMS remove the requirement for a minimum of 9 hours per week to receive coverage for IOP services, since they believed that some patients may face challenges meeting these standards if they do not have adequate means or resources. In contrast, several other commenters stated that CMS' proposal to require nine hours of services per week is appropriate. Response: We did not propose to require a minimum of 9 hours of services per week for IOP services furnished by an OTP, as the commenter suggests. Rather, we proposed, at paragraph (ix) of the definition of ``opioid use disorder treatment service'' in Sec. 410.67(b) that ``a physician must certify that the individual has a need for a minimum of nine hours of services per week and requires a higher level of care intensity compared to other non-intensive outpatient OTP services.'' Requiring a physician to certify this level of need, that is, a minimum of 9 hours of IOP services per week, is consistent with existing clinical standards that describe the intensity of these services as specified under the Substance Abuse and Mental Health Services Administration's (SAMHSA) treatment guidance. Additionally, we proposed that by billing for IOP services, OTPs would be attesting to the fact that they have furnished at least nine services for that week that would otherwise qualify as OTP intensive outpatient services as discussed in section VIII.G.3.a of the CY 2024 OPPS proposed rule (88 FR 49720). We acknowledge that not all services will necessarily be 60 minutes in duration, therefore, if an OTP furnishes a minimum of nine services, regardless of the length of each service, these would meet the threshold to bill for IOP services for the treatment of OUD. We understand that there may be weeks where beneficiaries do not necessarily meet the minimum of 9 services per week for IOP services, and we note that if a beneficiary does not meet the minimum of 9 services per week of IOP services, an OTP can still continue to bill the weekly bundles and add-on codes described by G2067 through G2080, and G2115, G2216, and G1028, as long as all applicable requirements are met. Comment: Several commenters requested additional services be considered for the purposes of payment for IOP services, including FDA- approved medical devices that aid in the reduction of withdrawal symptoms associated with SUDs, community health integration (CHI), social determinants of health, principal illness navigation services, and case management and care coordination services. Response: We appreciate commenters raising awareness of other types of services that could be considered as potential IOP services furnished by an OTP. In the proposed rule, we proposed to include coverage for IOP services furnished by OTPs for the treatment of OUD in a manner that would be consistent with the scope of services proposed in other settings as specified in the proposed 42 CFR 410.44(a)(4). We [[Page 81850]] believed this would help ensure Medicare beneficiaries have access to the same types of services across benefit categories and settings of care for IOP services. For a more in-depth discussion regarding the list of potential services for IOP payment, please see the discussion in section VIII.B.2.a of this final rule with comment period. We may consider future updates to this list of services for Medicare payment purposes, including to OTPs through future rulemaking. Comment: Multiple commenters recommended that CMS specify the practitioners who would be permitted to deliver OTP IOP services. Other commenters requested that CMS ensure flexibility in the types of professionals that are able to provide counseling to patients as it does with the existing OTP benefit. Response: We thank the commenters for this comment. In the proposed rule, we did not propose to limit the types of professionals that can provide IOP services. Instead, in section VIII.G.3.a of the CY 2024 OPPS proposed rule (88 FR 49720), as reflected in proposed paragraph (ix) of the definition of ``opioid use disorder treatment service'' in Sec. 410.67(b) in the cross reference to Sec. 410.44(a)(4), we listed examples of the types of professionals who could potentially provide OTP IOP services, such as physicians, psychologists, occupational therapists, social workers, trained psychiatrist nurses, or other mental health professionals to the extent authorized under State law and scope of practice requirements. However, this was not a comprehensive list. We additionally note that if any professionals are not authorized under state law or scope of practice requirements to furnish therapy and counseling services, the therapy or counseling services provided by these professionals would not be covered as OTP intensive outpatient services. This would also be consistent with existing guidance for counseling and therapy services under the non- drug component of the existing OTP weekly bundles.\182\ --------------------------------------------------------------------------- \182\ Page 5, 40.1.1 Aspects of the Bundle, Non-drug component: https://www.cms.gov/files/document/chapter-17-opioid-treatment-programs-otps.pdf. --------------------------------------------------------------------------- Comment: One commenter said they would appreciate if CMS could clarify any distinction between the existing scope of services included in the OTP benefit and the scope of services described under the proposed add-on payment adjustment for IOP services. They also stated they would appreciate learning how billing and coding requirements may differ under the proposed IOP add-on payment adjustment versus the existing OTP bundles and/or add-on codes. Response: We appreciate this request for clarification. The existing OTP weekly bundled payment includes both non-drug and drug components for an episode of care, as well as add-on codes for additional services furnished and take-home medications, as specified in 42 CFR 410.67(d)(2) and (4). Specifically, these are described by HCPCS codes G2067 through G2080, and G2115, G2216, and G1028. OTP services that are currently covered under the OTP benefit are at the Outpatient (Level 1) level of care and typically require less than 9 hours of care per week, according to ASAM's criteria for the continuum of care.\183\ The services included as part of the OTP bundles and/or add-on codes, which are specified at 42 CFR 410.67(b) in the definition of ``opioid use disorder treatment service,'' include FDA-approved opioid agonist and antagonist medications (buprenorphine, methadone, and naltrexone) or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose; overdose education; dispensing and administering of MOUD, if applicable; substance use counseling; individual and group therapy; toxicology testing; intake activities; and periodic assessments. For these services, at least one OUD treatment service must be furnished (from either the drug or non- drug component) to the patient in order to meet the threshold to bill for an episode of care. --------------------------------------------------------------------------- \183\ https://www.asam.org/asam-criteria/about-the-asam-criteria. --------------------------------------------------------------------------- Some of the services included in the non-drug component of the OTP bundled payments may be furnished via telecommunications technology. Individual and group therapy and substance use counseling may be furnished using audio-video technology, as clinically appropriate, and via audio-only technology if two-way audio/video communications technology is not available to the beneficiary, provided all other applicable requirements are met, as specified in paragraphs (iii) and (iv) of the definition of ``opioid use disorder treatment service'' in 42 CFR 410.67(b). Initiation of treatment with buprenorphine (but not methadone) via the OTP intake add-on code may be furnished via two-way audio-video communications technology, and via audio-only communication technology when audio-video technology is not available to the beneficiary, to the extent that the use of audio-video telecommunications technology to initiate treatment with buprenorphine is authorized by the Drug Enforcement Administration (DEA) and SAMHSA at the time the service is furnished, as specified in paragraph (vi) of the definition of ``opioid use disorder treatment service'' in 42 CFR 410.67(b). Additionally, as of CY 2023, these services furnished via OTP mobile units are considered for the purposes of determining Medicare payments to OTPs under the bundled payment codes and/or add-on codes to the extent that the services are medically reasonable and necessary and are furnished in accordance with SAMHSA and DEA guidance. Currently, periodic assessments are allowed to be furnished via audio- only telecommunication through CY 2023, and finalized in the CY 2024 PFS final rule (87 FR 69404; November 18, 2023) so that these services may be furnished audio-only through the end of CY 2024, to the extent that use of audio-only communications technology is permitted under the applicable SAMHSA and DEA requirements at the time the service is furnished, and all other applicable requirements are met. For additional details regarding existing flexibilities regarding use of telecommunications under the OTP benefit, commenters can also reference Chapter 17 of the Medicare Benefit Policy Manual for Opioid Treatment Programs.\184\ --------------------------------------------------------------------------- \184\ https://www.cms.gov/files/document/chapter-17-opioid-treatment-programs-otps.pdf. --------------------------------------------------------------------------- In contrast, IOP services correspond to Level 2.1 of ASAM's continuum of care and range between 9 hours or more per week and no more than 20 hours per week for adults requiring a higher acuity of care compared to those at the outpatient level of care (Level 1), which reflects the intensity of services currently described by the existing OTP benefit. The proposed adjustment for IOP services furnished at OTPs for the treatment of OUD would serve as an add-on code that can be billed in conjunction with the existing weekly bundles for medication assisted treatment, such as HCPCS codes G2067 through G2075, and would reflect additional services required for patients with an OUD who need more intensive and more frequent care than is typical at the outpatient level. The proposed list of services for IOP services furnished at OTPs, which is reflected in proposed paragraph (ix) of the definition of ``opioid use disorder treatment service'' in Sec. 410.67(b) by the inclusion of the language, ``one or more services specified in Sec. 410.44(a)(4),'' includes [[Page 81851]] individual and group therapy with physicians or psychologists or other mental health professionals to the extent authorized under State law, which may be more intensive in nature than other therapy services delivered to patients at Level 1 of the ASAM continuum of care as in the existing OTP benefit; occupational therapy requiring the skills of a qualified occupational therapist, provided by an occupational therapist, or under appropriate supervision of a qualified occupational therapist by an occupational therapy assistant; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes, subject to the limitations specified in Sec. 410.29, excluding opioid agonist and antagonist medications that are FDA-approved for use in treatment of OUD or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose; individualized activity therapies that are not primarily recreational or diversionary; family counseling, the primary purpose of which is treatment of the individual's condition; patient training and education, to the extent the training and educational activities are closely and clearly related to the individual's care and treatment; and, diagnostic services that are reasonable and necessary for the diagnosis or active treatment of the individual's condition, with the exception of toxicology testing. We proposed, at Sec. 410.67(d)(4)(i)(F), that at least nine IOP services per week would need to be furnished by an OTP in order to reach the threshold to bill for IOP services. Lastly, we note that while certain services under the existing OTP benefit have additional flexibilities for being furnished via audio- only/audio-video technologies, we did not propose similar telecommunications technology flexibilities for OTP intensive outpatient services and are not finalizing these type of flexibilities for intensive outpatient services at this time. Not extending telecommunications technology flexibilities to OTP intensive outpatient services is consistent with policies being finalized in HOPDs, CMHCs, RHCs, and FQHCs that are also not permitting these types of flexibilities for IOP services. This will also allow CMS additional time to examine the clinical evidence and guidance to ensure that any IOP services furnished to beneficiaries with an OUD can be conducted in a manner that maintains safety and a high quality of care for Medicare beneficiaries. After consideration of the public comments we received, we are finalizing our proposal to add a new paragraph (ix) to the definition of ``opioid use disorder treatment service'' in Sec. 410.67(b) defining a new category of services called ``OTP intensive outpatient services'' and incorporating ``OTP intensive outpatient services'' in the definition of OUD treatment services that are covered under the Part B OTP benefit. We are excluding FDA-approved opioid agonist or antagonist medications for the treatment of OUD or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose, from the definition of ``OTP intensive outpatient services'' because these medications are already included as part of the weekly bundled payment for an episode of care or as an adjustment to the bundled payment. Additionally, we are finalizing our proposal to exclude toxicology testing from the types of diagnostic services that would be included in the definition of ``OTP intensive outpatient services'' because, similarly, toxicology testing is already included as part of the bundled payment for an episode of care. b. Establishment of a Weekly Payment Adjustment for IOP Services Furnished by OTPs Section 1834(w)(2) of the Act provides the Secretary discretion to implement one or more payment bundles based on the type of medication provided, frequency of services, scope of services furnished, characteristics of the individuals furnished such services, and other factors as the Secretary determines appropriate. Currently, ASAM classifies OTP services as outpatient treatment services (under Level 1 of the continuum of care), which are typically provided for less than 9 hours a week, or as a step-down from intensive outpatient services, whereas intensive outpatient services (under Level 2.1 of the continuum of care) are typically provided for more than 9 hours a week and no more than 20 hours a week for adults with more severe needs than those for whom treatment provided according to Level 1 of the continuum of care is clinically appropriate.\185\ In order to appropriately reflect the more intensive treatment profile for those individuals receiving IOP services versus OTP services, we proposed to establish a weekly payment adjustment via an add-on code for OTP intensive outpatient services, which is consistent with the weekly bundled payment structure under the existing Medicare OTP benefit. We stated in the CY 2024 OPPS proposed rule that we believe that a code billed on a weekly basis would allow greater flexibility with respect to how IOP services are rendered and how service hours may be distributed over a given week to best meet patient needs. Under the proposal, we proposed that an OTP could bill for the weekly add-on code for OTP intensive services in the same week for the same beneficiary as the existing coding describing a weekly OTP bundle, so long as all applicable billing requirements for each code are met (88 FR 49720). However, we noted that under the proposal, each OTP intensive outpatient service must be medically reasonable and necessary and not duplicative of any service(s) for which OTPs received bundled payments for an episode of care in a given week. --------------------------------------------------------------------------- \185\ https://americanaddictioncenters.org/rehab-guide/asam-criteria-levels-of-care. --------------------------------------------------------------------------- For OTP intensive outpatient services, we proposed to permit OTPs to bill new HCPCS code GOTP1 (Intensive outpatient services; minimum of nine services over a 7-contiguous day period, which can include: individual and group therapy with physicians or psychologists (or other mental health professionals to the extent authorized under State law); occupational therapy requiring the skills of a qualified occupational therapist; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; individualized activity therapies that are not primarily recreational or diversionary; family counseling (the primary purpose of which is treatment of the individual's condition); patient training and education (to the extent that training and educational activities are closely and clearly related to individual's care and treatment); diagnostic services; List separately in addition to code for primary procedure. (88 FR 49721) We proposed to value HCPCS code GOTP1 based on an assumption of a typical case of three IOP services furnished per day for approximately 3 days per week. In response to the comment solicitation on IOP services in the CY 2023 PFS proposed rule, many commenters stated that a typical IOP treatment plan consists of at least 9 hours of skilled treatment services per week, which would follow both the treatment protocol advised by SAMHSA and ASAM level placement criteria.\186\ Moreover, the definition of intensive outpatient services in section 4124(b)(2)(B) of the CAA, 2023 specifies [[Page 81852]] that in community mental health centers, hospital-based IOPs, RHCs, and FQHCs, an individual in need of IOP services must be certified by a physician to have a need for such services for a minimum of 9 hours per week compared to a minimum of 20 hours per week in a partial hospitalization service treatment program. Therefore, we proposed to calculate the payment rate for add-on code GOTP1 based on 9 services per week. We welcomed comments on whether 9 services per week is representative of the typical number of services furnished to patients with an OUD who receive IOP services at OTPs. (88 FR 49721) --------------------------------------------------------------------------- \186\ https://www.ncbi.nlm.nih.gov/books/NBK64088/; https://store.samhsa.gov/product/TIP-47-Substance-Abuse-Clinical-Issues-in-Intensive-Outpatient-Treatment/SMA13-4182. --------------------------------------------------------------------------- We proposed that by billing HCPCS code GOTP1, the OTP would be attesting to the fact that it has furnished at least nine services for that week that would otherwise qualify as OTP intensive outpatient services as discussed in section VIII.G.3.a of the CY 2024 OPPS proposed rule. We acknowledged that not all OTP intensive outpatient services will necessarily be 60 minutes in duration, or be a time-based service, therefore, we proposed that furnishing nine OTP intensive outpatient services, regardless of the length of each service, would meet the threshold to bill for HCPCS code GOTP1. We noted that this aspect of our proposal differs from the proposed requirement for physician certification, discussed in section VIII.G.3.c. of the CY 2024 OPPS proposed rule, pursuant to which a physician must certify that the individual requires nine hours of OTP intensive outpatient services, and not simply nine OTP intensive outpatient services. Under the proposal to establish a weekly add-on payment for OTP intensive outpatient services, we stated that no single service could be counted more than once for the purpose of meeting the criteria for billing for any given code. In other words, the same service could not be used to qualify to bill both the weekly bundle and the add-on payment adjustment for OTP intensive outpatient services. Additionally, we recognized that some services furnished as part of OTP intensive outpatient services may be required multiple times a week (for example, occupational therapy, patient education, family counseling, activity therapies) to meet individual patient needs and varying clinical complexity. Such services of the same type would be allowable to meet the minimum of 9 services per week, provided that all services are medically reasonable and necessary. We noted that the proposal for the calculation of the payment rate for HCPCS code GOTP1 is similar to the payment methodology proposed for IOP services furnished in other settings. We stated that we believed that calculating the payment rate for the proposed add-on payment adjustment for OTP intensive outpatient services based on the rate provided in a hospital setting would promote greater consistency, site neutrality, and parity with payment rates proposed for IOPs in a majority of other settings, including hospital-based IOPs, FQHCs, and RHCs. Please see a more detailed discussion regarding this payment methodology in section VIII.D of this final rule. We acknowledged that, since IOP services have not been covered or paid under Medicare to date, CMS did not have direct data to estimate utilization and costs of IOP services. However, many of the items and services included in IOP services have been and are currently paid for by Medicare as part of the PHP benefit or under the OPPS more generally. Therefore, in our preliminary ratesetting exercise, we identified, in consultation with clinicians, a list of HCPCS codes for services that would be reasonably included as part of IOP services. Please see a more comprehensive list of these HCPCS codes used to inform the payment methodology during our preliminary ratesetting exercise in Table 43 within section VIII.C of the CY 2024 OPPS proposed rule (88 FR 49704 and 49705). The inclusion of many of these services was informed by comments we received in response to comment solicitations in the CY 2023 OPPS/ASC and PFS proposed rules. For example, some of these codes correspond to services for individual and group therapy, occupational therapy, individualized activity therapies, family counseling, and patient training and education. For the majority of these identified HCPCS codes, the most recent utilization data available was for OPPS claims paid for dates of service in CY 2022, and the most recent cost data available was from the cost reports in CY 2021. Based on this cost and utilization data from CY 2021 and CY 2022, respectively, the estimated payment rate for 3 services per day based on APC 5861 (Intensive Outpatient (1-3 services) for Hospital-based IOPs) was $280.80, at the time of drafting the proposed rule; 3 services per day for 3 days a week would therefore be equal to $842.40. Because we proposed that OTP intensive outpatient services include individual and group therapy, which are also already included in the non-drug component of the OTP bundled payments for an episode of care, we proposed to subtract the amount that corresponds to the individual and group therapy rate in the non-drug component of the OTP bundled payment from our estimate of $842.40 in order to establish the amount of the OTP intensive outpatient services add-on payment. Specifically, in the CY 2020 PFS final rule (84 FR 62658), we finalized a building block methodology to calculate the rate for the non-drug component based on established non-facility rates for similar services under the Medicare PFS, the Medicare Clinical Laboratory Fee Schedule (CLFS), and state Medicaid programs. For group therapy, we used CPT code 90853 (Group psychotherapy (other than of a multiple-family group)) as a reference code, which at the time of drafting the CY 2020 PFS final rule, in CY 2019, was assigned a non-facility rate of $27.39. In order to account for the application of the annual update to the non-drug component, the adjusted amount for group psychotherapy was $28.36. For individual therapy, in the CY 2023 PFS final rule (87 FR 69773), we finalized an update to the reference code used in the non- drug component to be based on the CY 2019 non-facility rate for CPT code 90834 (Psychotherapy, 45 minutes with patient), which was $91.18, and which we adjusted to account for the application of the annual update in the intervening years, resulting in $94.37. Therefore, we proposed an add-on payment adjustment of approximately $719.67 for HCPCS code GOTP1 ($842.40-($28.36 + $94.37)). We sought comment on whether the proposed add-on payment adjustment accurately reflects the typical resource costs involved in furnishing IOP services at OTPs. We also sought comment on our proposal to adjust the proposed add-on payment adjustment to account for individual and group therapy included in the non-drug component of OTP bundled payments for an episode of care. In accordance with the methodology used to update the payment rate for other services payable under the OTP benefit, we proposed to apply an annual update based on the percentage increase in the Medicare Economic Index (MEI) to the payment rate HCPCS code GOTP1, as described in Sec. 414.30. Additionally, consistent with the methodology used to determine payment for non-drug services furnished under the OTP benefit, we proposed to apply a geographic adjustment to the payment for HCPCS [[Page 81853]] code GOTP1 based on the Geographic Adjustment Factor (GAF), as described in Sec. 414.26. Furthermore, consistent with the policy that applies for other OUD treatment services furnished by OTPs, a beneficiary copayment amount of zero would apply for OTP intensive outpatient services. Lastly, we also sought comment on the impact the proposal may have on dually eligible individuals, specifically, the extent to which this expanded coverage and payment may supplant Medicaid coverage for dually eligible individuals, versus the extent to which it would supplement Medicaid if it were fundamentally different from what Medicaid covers in a given state. We recognized in the CY 2024 OPPS proposed rule (88 FR 49722) that we proposed to adopt per diem rates for IOP services furnished in other settings, including CMHCs, hospital-based settings, FQHCs, and RHCs, and that per diem rates are used in the payment methodology for IOP services in some state Medicaid programs. Therefore, we also sought comment on whether a daily per diem rate based on 3 service hours per day would be more appropriate for OTP settings, especially if one payment methodology over the other would be less disruptive to OTPs as it relates to coordination of benefits. Lastly, we sought feedback about the experiences of furnishing IOP services within OTP settings, including the extent to which it is similar to or different than furnishing IOP services in other settings. We stated that we believed this additional information may be helpful to understand the clinical complexity of patients enrolled in OTPs who are in need of IOP services for OUD and to compare the level of care and type of services that may supplement and/or exceed those ordinarily provided under the existing OTP benefit, in order to help inform potential future rulemaking on this topic. We proposed to add a new paragraph (d)(4)(i)(F) to Sec. 410.67 in order to describe the new adjustment to the bundled payment for OTP intensive outpatient services. Additionally, we proposed to amend Sec. 410.67(d)(4)(ii) to add that the payment amounts for OTP intensive outpatient services will be geographically adjusted using the Geographic Adjustment Factor described in Sec. 414.26. Lastly, we proposed to amend Sec. 410.67(d)(4)(iii) to add that payment for OTP intensive outpatient services will be updated annually using the Medicare Economic Index described in Sec. 405.504(d). We received many public comments on our proposal to establish a weekly payment adjustment for IOP services furnished by OTPs. These public comments and our responses to these comments are addressed in the section below. Comment: We received a few comments regarding our proposal to apply a beneficiary copayment amount of zero for OTP intensive outpatient services, which is consistent with the policy for other OUD treatment services furnished by OTPs. Commenters were very supportive of this, since they stated patient out of pocket costs, even if they are small, are one of the largest deterrents for patients being able to access care. Response: We thank commenters for expressing their support for this policy regarding beneficiary copayment amounts. Comment: Many commenters submitted comments regarding the frequency of payment (per-diem or weekly) for the proposed payment rate methodology. The comments were mixed regarding whether a per-diem versus a weekly payment rate would be more appropriate in an OTP setting. Commenters in support of a per-diem approach raised that a beneficiary may need nine or more hours of IOP services per week but may not be able to always attend all the scheduled services each week due to extenuating circumstances. Commenters also noted that in these cases especially, a per diem rate may better approximate the actual number of services delivered in a given week. One commenter recommended a mixed approach, requesting that CMS make a per diem rate available for providers to bill in cases where patients are unable to receive all the scheduled services in a given week, but that CMS should also allow providers to bill the weekly rate when the minimum nine services requirement is met. This commenter also stated that providers should not be penalized if patients cannot attend the minimum number of nine services per week. Many other commenters supported the weekly billing approach. A few commenters stated that a weekly structure would be the easiest to implement, given that Medicare already pays OTPs on a weekly basis, as well as TRICARE, and many State Medicaid programs. One commenter encouraged CMS to allow some level of flexibility if a weekly payment is finalized, such as partial payment or allowing OTPs to average the number of service hours over multiple weeks, so that an OTP is not expected to go without payment for the week when less than nine services are furnished. Response: We appreciate the comments related to the proposed frequency of payment for OTP intensive outpatient services. We understand that a beneficiary may have one or a number of extenuating circumstances, which may make it difficult in a given week to meet the weekly minimum nine services requirement for the weekly payment approach. However, in the CY 2024 OPPS/ASC proposed rule, we stated that a code billed on a weekly basis may allow greater flexibility than a per diem approach with respect to how IOP services are rendered. We believe that a weekly payment approach would allow more flexibility for how service hours could be distributed over a given week to best meet patient needs, including in a manner to balance frequent IOP treatment with other obligations such as work, childcare, school, household activities, etc., compared to a per-diem approach that would require a specific number of service hours per day. Furthermore, we believe that a weekly billing structure may allow OTPs to more easily verify that the required number of IOP services have been furnished. Statutory requirements, SAMHSA treatment guidance, and clinical standards from ASAM indicate that a minimum of nine skilled treatment services is standard for IOPs. The proposed payment amount for GOTP1 is based on nine services per week, which is consistent with these existing standards. Additionally, less than nine IOP services rendered per week would be consistent with the intensity of care at the outpatient level, which is already reflected in the existing OTP benefit. In response to commenters' who stated that OTPs should not be penalized if patients cannot attend the minimum number of nine services per week, we affirm that OTPs can continue to bill the weekly bundles and add-on codes described by G2067 through G2080, and G2115, G2216, and G1028, to receive payment for treating Medicare beneficiaries with an OUD, as long as all applicable requirements are met. Finally, most comments in response to the CY 2023 PFS comment solicitation on IOPs and in response to the proposed rule indicated a preference for a weekly billing structure in OTP settings. We continue to believe that a weekly billing structure is appropriate at this time. However, we will continue to monitor the billing structure to ensure that Medicare beneficiaries with an OUD do not face barriers to accessing OTP intensive outpatient services and may consider adjustments as needed through future rulemaking. Comment: Multiple commenters expressed concern regarding our proposal to subtract the payment rate for individual and group therapy when [[Page 81854]] calculating the weekly payment adjustment for IOP services furnished by OTPs. Commenters stated that OTPs who offer individual and group therapy services as part of an IOP conduct these services in a way that is separate and distinct from the therapy services they are already providing to Medicare beneficiaries under the existing OTP benefit. Commenters further explained that these individual and group therapy services are more intensive and would be additional, not duplicative services, compared to the existing covered therapy services built into the weekly bundled payment. Commenters also stated that an IOP is a critically important level of care for individuals who need more intensive and structured treatment than outpatient services, but who can live safely in their homes and communities without needing 24-hour treatment in residential or inpatient settings. Therefore, commenters requested that CMS not exclude the payment amount for individual and group counseling services from the payment methodology for the IOP payment adjustment. Response: We appreciate commenters raising these concerns. We proposed to deduct the payment rates for individual and group therapy services from the payment rate for IOP services because we believed that these therapy services may be duplicative of services included in the non-drug component of the OTP bundled payment. However, we are persuaded by the public comments received that requested that we do not deduct the payment rate for individual and group therapy services from the payment methodology for the IOP payment adjustment. Commenters explained that the individual and group therapy services furnished as part of an IOP are more intensive in nature and may be furnished on a more frequent basis than those therapy services in the non-drug component of the OTP bundled payment, thus they would not be duplicative in nature. Additionally, we were persuaded by the rationale that IOP services are often more intense than at an outpatient level since they are often provided as a step-down from residential or inpatient settings, whereby patients may still need intensive therapy services at a higher acuity of care but may not necessarily require 24- hour treatment. Furthermore, in response to the comment solicitation for IOP services in the CY 2023 PFS proposed rule, commenters raised that therapy services furnished in IOP services are structured, goal- oriented, and often focus on social skill rehabilitation and ongoing engagement. We also note that IOP services are usually provided at Level 2.1 of the ASAM continuum of care, which is likely to reflect therapy services that are more intensive, compared to services provided at the outpatient level within the existing OTP benefit and that are described by Level 1 of the ASAM continuum of care. We understand that individual and group therapy services are fundamental to many IOPs. We do not want to disincentivize OTPs furnishing necessary care for Medicare beneficiaries with an OUD who need more intensive therapy, by establishing a payment rate that does not reflect the resources involved in furnishing these services. Therefore, in consideration of these comments, we are finalizing a payment methodology for the IOP payment adjustment that does not deduct the amount for individual therapy (based on the CY 2019 non-facility rate for CPT code 90834, which was $91.18) and for group therapy (based on the CY 2019 non- facility rate for CPT code 90853, which was $27.39) and their annual update adjustments. The finalized payment amount for GOTP1 for CY 2024 is $778.20. We are reflecting this policy change in new Sec. 410.67(d)(4)(i)(F) by removing the proposed language, ``excluding an amount equivalent to the amount included in the OTP weekly bundled payment for individual and group therapy.'' Comment: We received a few comments regarding payment neutrality among multiple care settings. Specifically, commenters advocated that a site-neutral set of payment rates should be applied to all providers of IOP services, including hospital outpatient departments, CMHCs, FQHCs, RHCs, and OTPs. One commenter further noted that as additional claims and cost data become available in the years after the IOP benefit is implemented, CMS can then evaluate whether adjustments and different payment rates are appropriate for different settings. Response: We thank the commenters for their feedback. As we stated in the proposed rule, we did not have direct data to estimate utilization and cost of IOP services at the time of setting proposed payment rates since IOP services have not been covered or paid under Medicare to date. We agree with the commenter that it would be appropriate to continue to monitor cost and utilization data over time, and if future adjustments are needed, we may consider these refinements to the payment rate for future rulemaking. Additionally, we note that by finalizing a policy to not deduct an amount for individual and group therapy from the adjustment for IOP services furnished by OTPs, as detailed in the discussion above, the payment rate for OTPs would be consistent with the payment rate for most other settings under Medicare. We would continue to base our payment rate for OTPs on APC 5861 (Intensive Outpatient (1-3 services) for Hospital-based IOPs), which is reflected in the payment methodologies for the other settings and would help promote site neutrality. Comment: One commenter expressed appreciation that CMS clarified that OTP intensive outpatient services do not necessarily need to be one hour in duration and that the same IOP service can be performed more than once per week to meet the nine-services threshold per week. The commenter requested that CMS finalize these flexibilities. Response: We thank the commenter for their support of these proposed flexibilities for OTPs furnishing intensive outpatient services. Comment: One commenter expressed concern regarding the proposal to update the payment for OTP intensive outpatient services annually using the Medicare Economic Index (MEI). The commenter stated that the MEI reflects the cost of physician practices but does not adequately capture the cost and care delivery structures in the OTP setting. The commenter raised that OTPs are more similar to hospital outpatient departments because they include interdisciplinary teams, case management services, Clinical Laboratory Improvement Amendments (CLIA)- waived services, medication management and diversion control systems, and other services. The commenter further added that OTPs are subject to rigorous oversight, accreditation, and certification standards. For these reasons, and because the MEI mirrors general inflation more than medical inflation, the commenter contended that the MEI is not an appropriate update factor and suggested that instead the Inpatient Prospective Payment System (IPPS) market basket update would be a better indicator for annual price growth. Response: We appreciate hearing from the commenter on this issue. However, we note that the payment amounts for other services under the existing OTP benefit are annually updated by the MEI, as described in 42 CFR 410.67(d)(4)(iii). We did not propose to modify the update factor for the non-drug component of the bundled payment for an episode of care, and we do not believe it would be appropriate to apply a different update factor for IOP [[Page 81855]] services furnished by OTPs without also adjusting the update factor for the non-drug component in the existing weekly bundle. However, we may consider this issue for future rulemaking. Comment: One commenter did not object to the payment methodology for setting the weekly payment rate for IOP services furnished in OTPs or the actual payment amount, but pointed out that OTPs may be benefitting from a higher payment rate for IOP services than CMHCs. The same commenter believed it would be inequitable for CMS to provide the higher IOP rate to new entity types furnishing IOP services compared to CMHCs. Response: We thank the commenter for their feedback. While we are uncertain how long OTPs have historically furnished IOP services, we do note that SAMHSA data suggests that approximately 557 OTPs offer IOP services nationwide as of 2021, thus we do not necessarily believe OTPs would be new entities furnishing intensive outpatient services.\187\ In establishing payment to OTPs for these services, we are seeking to finalize a payment rate that would be consistent with the payment rate for IOP services in most other settings under Medicare, which would promote site neutrality. For additional information on the payment methodology for IOP services delivered in CMHCs, please reference section VIII.D.3. of this final rule with comment period. --------------------------------------------------------------------------- \187\ Substance Abuse and Mental Health Services Administration, National Substance Use and Mental Health Services Survey (N-SUMHSS), 2021: Annual Detailed Tables. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2023. Weblink: https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf. --------------------------------------------------------------------------- Comment: In response to our request for comment regarding the experiences of furnishing IOP services within OTP settings, including to the extent to which it is similar to or different than furnishing IOP services in other settings, several commenters expressed that Medicare beneficiaries who need IOP services in addition to other traditional OTP services often have complex and co-occurring SUDs and/ or mental health conditions. One commenter described that often patients in an OTP will have OUD in addition to co-occurring SUDs and or mental health conditions, where patients in other settings may not. Another commenter mentioned that some OTPs may be treating other individuals who only have a mental health condition and are receiving IOP treatment, but who do not receive other treatment at the OTP. Finally, one commenter urged CMS to develop payment policies or crosswalk codes that enable OTPs to deliver IOP services to patients who have mental health conditions or SUDs that are not just OUD. Response: We appreciate commenters sharing this valuable information regarding various experiences of furnishing IOP services in an OTP setting. As previously stated, we note that section 1861 of the Act requires Medicare coverage for services furnished by OTPs to be for the treatment of OUD. However, we may consider these issues, including ways to further improve access to care for Medicare beneficiaries with an OUD who experience other co-occurring conditions, for future rulemaking. After considering public comments, we are modifying our proposed payment methodology for calculating the payment adjustment for IOP services furnished by OTPs in one respect. We are finalizing our proposal to add a new paragraph (d)(4)(i)(F) to Sec. 410.67 to describe the new adjustment to the bundled payment for OTP intensive outpatient services. However, we are not finalizing our proposal to deduct the amount for individual and group therapy that is included in the non-drug component of the OTP bundled rates. Accordingly, we are revising the proposed new Sec. 410.67(d)(4)(i)(F) to strike ``, excluding an amount equivalent to the amount included in the OTP weekly bundled payment for individual and group therapy,'' in response to the public comments. We are finalizing that the adjustment will be made when at least nine services of OTP intensive outpatient services are furnished in a week. We are also finalizing a payment methodology to price HCPCS code GOTP1 based on the estimated payment rate of 3 services per day based on APC 5861 (Intensive Outpatient (1-3 services) for Hospital-based IOPs), which is $259.40, multiplied by 3 to reflect 3 days a week (for a weekly payment methodology), which results in a final payment rate of $778.20.\188\ Additionally, we note that GOTP1 was a placeholder code for OTPs to bill for providing IOP services and that the final code is HCPCS code G0137 (Intensive outpatient services; minimum of nine services over a 7-contiguous day period, which can include individual and group therapy with physicians or psychologists (or other mental health professionals to the extent authorized under State law); occupational therapy requiring the skills of a qualified occupational therapist; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes, excluding opioid agonist and antagonist medications that are FDA-approved for use in treatment of OUD or opioid antagonist medications for the emergency treatment of known or suspected opioid overdose; individualized activity therapies that are not primarily recreational or diversionary; family counseling (the primary purpose of which is treatment of the individual's condition); patient training and education (to the extent that training and educational activities are closely and clearly related to individual's care and treatment); diagnostic services (not including toxicology testing); (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure, if applicable). --------------------------------------------------------------------------- \188\ We note that in the CY 2024 OPPS/ASC proposed rule, the payment rate of 3 services per day for APC 5861 (Intensive Outpatient (1-3 services) for Hospital-based IOPs) was $280.80. However, this payment rate has been updated to $259.40 following the publication of the proposed rule based on more recent cost data and is used as the base rate for IOP services furnished by OTPs. --------------------------------------------------------------------------- We are also finalizing our proposal to amend Sec. 410.67(d)(4)(ii) to add that the payment amount for OTP intensive outpatient services will be geographically adjusted using the Geographic Adjustment Factor (GAF) described in Sec. 414.26. Lastly, we are finalizing our proposal to amend Sec. 410.67(d)(4)(iii) to add that payment for OTP intensive outpatient services will be updated annually using the Medicare Economic Index described in Sec. 405.504(d). c. Certification and Plan of Care Requirements for IOPs in OTP Settings In order to be consistent with physician certification and plan of care requirements for IOP services furnished in other settings of care and to ensure, to the extent possible, that IOP services are only provided and paid for when medically necessary and appropriate for the beneficiary, we proposed to adopt the same standards set forth in Sec. 424.24(d)(1) through (3) for OTPs providing OTP intensive outpatient services (for more detailed discussions of these proposed standards, please see section VIII.B.3 of the CY 2024 OPPS proposed rule). Specifically, under the proposal, a physician would be required to certify that an individual needs OTP intensive outpatient services for a minimum of 9 hours per week, which is consistent with treatment standards specified by SAMHSA and minimum hour standards described by ASAM's [[Page 81856]] Level 2.1 of care for IOP services.\189\ This certification would require: documentation in the patient's medical record to include that the individual requires such services for a minimum of 9 hours of services per week; the first recertification as of the 30th day of IOP services; and that the certification of IOP services occur no less frequently than every other month. Accordingly, we proposed to revise Sec. 410.67 of our regulations to add a paragraph (c)(5) to specify that OTPs must furnish OTP intensive outpatient services consistent with the requirements regarding content of certification, plan of care requirements, and recertification requirements as set forth under proposed Sec. 424.24(d)(1) through (3). --------------------------------------------------------------------------- \189\ https://www.ncbi.nlm.nih.gov/books/NBK64088/; https://store.samhsa.gov/product/TIP-47-Substance-Abuse-Clinical-Issues-in-Intensive-Outpatient-Treatment/SMA13-4182. --------------------------------------------------------------------------- Regarding the recertification requirements, given that OTP services are billed on a weekly basis, we proposed that the required recertification could occur any time during an episode of care in which the 30th day from the start of IOP services (and every other month thereafter) falls. We noted that in the CY 2020 PFS final rule (84 FR 62641), we defined an episode of care as a 1-week (contiguous 7-day) period at Sec. 410.67(b). In the CY 2021 PFS final rule (85 FR 84691), we clarified that OTPs may choose to apply a standard billing cycle by setting a particular day of the week to begin all episodes of care, or they may choose to adopt weekly billing cycles that vary across patients, and we proposed to adopt the same approach here. We welcomed comments on these proposals. We noted that the proposal requires that the physician certify a need for at least 9 hours of services per week, which differs from our proposal that in order to bill for the add-on payment adjustment for OTP intensive outpatient services, the OTP must attest that it provided 9 such services to the beneficiary in a week. Given that services can vary in duration and that some services are not time-based, we stated that we believed it would be administratively simpler for OTPs to count the number of services furnished rather than to count the number of hours for purposes of billing the add-on payment adjustment for OTP intensive outpatient services. Additionally, as described in section VIII.G.3.b. of this final rule with comment period, our proposed payment rate was based on the number of services furnished per day, rather than the number of hours, consistent with the proposals for IOP payment in other settings. In contrast, for the purposes of certification and plan of care requirements for IOPs in OTP settings, we stated that we believed that requiring a physician to certify that a beneficiary requires a minimum of 9 hours of services per week is consistent with existing clinical guidance describing the intensity of care for IOP services.\190\ Additionally, a minimum of 9 hours of services per week is consistent with proposals for the certification and plan of care requirements for IOPs in other care settings. We welcomed comments on both of these proposals, including whether this distinction accurately reflects the practice patterns of OTPs furnishing IOP services. --------------------------------------------------------------------------- \190\ https://www.ncbi.nlm.nih.gov/books/NBK64088/; https://store.samhsa.gov/product/TIP-47-Substance-Abuse-Clinical-Issues-in-Intensive-Outpatient-Treatment/SMA13-4182. --------------------------------------------------------------------------- We received multiple comments on our proposal for certification and plan of care requirements for IOPs in OTP settings. The comments and our responses to these commenters are included below. Comment: A few commenters requested that CMS not finalize the proposed requirement for recertification for OTP intensive outpatient services ``as of the 30th day'' of IOP services as written in proposed paragraph (c)(5) to Sec. 410.67. Commenters raised that they did not believe it is appropriate to consider finalizing a shorter interval for the first recertification or for the subsequent recertification. Instead, they suggested that the first recertification should be modified for OTPs to be consistent with the proposal for recertification in other settings at Sec. 424.24(d)(3)(ii), which states, ``no less frequently than every 60 days.'' Commenters believed this may reduce burden and unnecessary documentation requirements on providers. Another commenter did not believe that recertification should be required every other month and instead recommended that a redetermination occur when it is clinically necessary according to the treatment plan, such as when a new episode of care begins. A different commenter urged CMS to consider extending recertification to every 90 days instead. Response: We appreciate commenters raising these issues regarding the shorter interval for the first recertification in OTP settings. In the CY 2024 OPPS proposed rule (88 FR 49722), we stated that ``this certification would require documentation in the patient's medical record to include that the individual requires such services for a minimum of 9 hours per week; require the first recertification as of the 30th day of IOP services; and require that the certification of IOP services occur no less frequently than every other month.'' In the proposed regulatory text, we stated ``OTPs that provide OTP intensive outpatient services must meet the requirements set forth in Sec. 424.24(d)(1) through (3) of this chapter related to content of certification, plan of treatment, and recertification for the purposes of furnishing OTP intensive outpatient services, except that the recertification required under Sec. 424.24(d)(3)(ii) may occur any time during an episode of care in which the 30th day from the start of IOP services falls.'' We are persuaded by the majority of commenters who requested that we not require a recertification ``as of the 30th day of services,'' as we agree that the recertification requirements should be consistent with the other settings paying for IOP services under Medicare. Accordingly, we are not finalizing our proposal to require a recertification as of the 30th date of services, and are instead finalizing that recertification must occur no less frequently than every 60 days, which is consistent with the requirement at Sec. 424.24(d)(3)(ii). We believe this change will promote consistency with the requirements for IOP services in other care settings under Medicare, as well as limit potential additional and unnecessary administrative requirements for OTPs. Accordingly, we are deleting the phrase ``, except that the recertification required under Sec. 424.24(d)(3)(ii) of this chapter may occur any time during an episode of care in which the 30th day from the start of IOP services falls'' from paragraph (c)(5) of Sec. 410.67. Comment: Multiple commenters requested that CMS modify the physician certification and plan of care requirements to include other behavioral health professionals. A few commenters recommended that CMS align these requirements for certification and plan of care with existing clinical standards of practice and state requirements to permit other non-physician professionals, including psychologists, clinical social workers, and other behavioral health professionals to perform eligibility assessments, develop treatment plans, and certify the need for services. Multiple commenters noted that requiring only a physician to complete these requirements would be a significant barrier to care and add additional burden on providers. Other commenters noted that ASAM level of [[Page 81857]] care determinations do not require a physician to complete the assessment and that anyone trained to do level of care determinations may complete them and that SUD counselors are certified and licensed differently at the state level and this should be explicitly permitted and addressed. Response: We thank commenters for raising this important issue. After considering the public comments, we understand that requiring a physician to conduct certification and develop a plan of care may create additional issues for practices and regions that face a provider shortage and/or limited capacity to regularly complete these requirements. Evidence indicates that there is less access to OTPs in rural areas,\191\ and also that nearly 60 percent of all mental health professional shortage areas are located in rural areas.\192\ Additionally, we recognize that evidence has shown physicians spend up to one-fifth of working hours per week on administrative tasks with psychiatrists spending the highest proportion of their time on administration compared to other types of physicians.\193\ We also understand that other non-physician practitioners, including but not limited to, clinical social workers, psychologists, nurse practitioners, mental health counselors, and marriage and family therapists, have increasingly played a critical role in interdisciplinary care teams and filling important gaps in care. --------------------------------------------------------------------------- \191\ https://pubmed.ncbi.nlm.nih.gov/35512612/. \192\ Designated Health Professional Shortage Areas Statistics, Third Quarter of Fiscal Year 2023, Designated HPSA Quarterly Summary: https://data.hrsa.gov/default/generatehpsaquarterlyreport quarterlyreport. \193\ https://pubmed.ncbi.nlm.nih.gov/25626223/. --------------------------------------------------------------------------- We note that section 4124 of the CAA, 2023 includes provisions for physician certification and plan of care requirements that require a physician to certify a need for IOP services. However, while the CAA, 2023 does not address IOP services furnished in OTP settings, our proposals to pay for IOP services in OTP settings were made under the statutory authority of sections 1861(jjj)(1) and 1834(w)(2) of the Act. We are persuaded by the commenters that practitioners other than physicians can appropriately conduct the certification, recertification, and plan of care requirements, and we agree that allowing additional practitioner types to perform the certification, recertification, and plan of care requirements will likely help to expand access to care. We believe we have statutory flexibility to finalize that the certification, recertification, and plan of care requirements may be performed by non-physician practitioners, as permitted by state law and consistent with scope of practice requirements. Additionally, we note that certain non-physician practitioners are authorized under Medicare to perform certification activities.\194\ Therefore, we are finalizing that in addition to physicians, the following non-physician practitioners may perform the required certification and plan of care requirements for IOP services furnished in the OTP setting: nurse practitioners, physician assistants, clinical psychologists, clinical social workers, mental health counselors, marriage and family therapists, and any other non- physician practitioners as defined in section 1842(b)(18)(C) of the Act, as permitted by state law and consistent with scope of practice requirements. These flexibilities would also be extended to any physician requirements, pertaining to the individual being under the care of a physician and to a physician's diagnosis, as described in Sec. 424.24(d)(1)(ii) and (d)(2)(A), so that they could also be performed by non-physician practitioners. --------------------------------------------------------------------------- \194\ https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/chain-ownership-system-pecos/ordering-certifying#eligible-specialty-types. --------------------------------------------------------------------------- Comment: We received comments on several topics that were outside the scope of the proposed rule. Those topics included the following: a recommendation that CMS develop crosswalk codes that enable IOP to be delivered in freestanding community-based SUD treatment facilities; a request that CMS allow structured outpatient addiction programs to bill the add-on payment adjustment for OTP intensive outpatient services; and a request that CMS develop an add-on code for contingency management services in OTPs for individuals with a stimulant use disorder. Response: While some of these comments are either outside of our statutory authority and/or out of scope for this final rule because they do not relate to the specific proposals included in the proposed rule, we appreciate the feedback and may consider these recommendations for future rulemaking. After consideration of the public comments received, we are finalizing our proposed definition of OTP intensive outpatient services in paragraph (ix) of definition of ``opioid use disorder treatment service'' at 42 CFR 410.67(b), with modifications to specify that non- physician practitioners, in addition to physicians, may perform the required certification that the individual has a need for such services, plan of treatment requirements, and recertification requirements, as permitted by state law and consistent with scope of practice requirements. These non-physician practitioners may include, but are not limited to, nurse practitioners, physician assistants, clinical psychologists, clinical social workers, mental health counselors, licensed marriage and family therapists, and other non- physician practitioners, as defined in section 1842(b)(18)(C) of the Act. We are finalizing a modification to our proposal for certification and plan of care requirements for OTP intensive outpatient services at proposed new paragraph (c)(5) at Sec. 410.67 by specifying that, for the standards set forth in the proposed Sec. 424.24(d)(1) through (3), a physician and/or non-physician practitioner could perform the requirements for certification, plan of care, and recertification for the purposes of furnishing OTP intensive outpatient services, as permitted by state law and scope of practice requirements. We are also striking language that states ``in which the 30th day from the start of IOP services falls'' for consistency with policies in other care settings under Medicare. We are finalizing that the first recertification and subsequent recertifications for OTP intensive outpatient services must occur no less frequently than every 60 days, consistent with Sec. 424.24(d)(3)(ii). Accordingly, we are finalizing at Sec. 410.67(c)(5) that OTPs that provide OTP intensive outpatient services must meet the requirements set forth in Sec. 424.24(d)(1) through (3) related to content of certification, plan of treatment, and recertification for the purposes of furnishing OTP intensive outpatient services, except that the recertification required under Sec. 424.24(d)(3)(ii) may occur any time during an episode of care. d. Correction to the OTP Regulation Text We also proposed to correct a typographical error at Sec. 410.67(d)(3), which currently states ``At least one OUD treatment service described in paragraphs (b)(1) through (5) of this section must be furnished to bill for the bundled payment for an episode of care.'' This provision should refer to paragraphs (i) through (v) of the definition of OUD treatment service in paragraph (b). Accordingly, we propose to correct this sentence to read, ``At least one OUD treatment service described in paragraphs (i) through (v) of the definition of opioid use disorder treatment service in paragraph (b) of this section must be furnished to bill for the [[Page 81858]] bundled payment for an episode of care.'' We did not receive any public comments on our proposal to correct a typographical error at Sec. 410.67(d)(3). We are finalizing our proposal to revise Sec. 410.67(d)(3) to instead state ``At least one OUD treatment service described in paragraphs (i) through (v) of the definition of opioid use disorder treatment service in paragraph (b) of this section must be furnished to bill for the bundled payment for an episode of care.''

H. Payment Rates Under the Medicare Physician Fee Schedule for

Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital

1. Background

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79727) in the discussion of the proposed implementation of section 603 of the Bipartisan Budget Act (BBA) of 2015 (Pub. L. 114-74, November 2, 2015), we established the PHP payment rate under the Medicare Physician Fee Schedule (MPFS) for nonexcepted off-campus PBDs as equivalent to the level of payment made to CMHCs for furnishing three or more PHP services per day. We noted that when a beneficiary received outpatient services in an off-campus department of a hospital, the total Medicare payment for those services is generally higher than when those same services are provided in a physician's office. Similarly, when partial hospitalization services are provided in a hospital-based PHP, Medicare pays more than when those same services are provided by a CMHC. Our rationale for adopting the CMHC per diem rate for APC 5853 as the MPFS payment amount for nonexcepted PBDs providing PHP services was because CMHCs are freestanding entities that are not part of a hospital, but they provide the same PHP services as hospital-based PHPs. This is similar to the differences between freestanding entities paid under the MPFS that furnish other services also provided by hospital-based entities. Similar to other entities currently paid for their technical component services under the MPFS, we believe CMHCs would typically have lower cost structures than hospital-based PHPs, largely due to lower overhead costs and other indirect costs such as administration, personnel, and security. We explained that we believe that paying for nonexcepted hospital-based partial hospitalization services at the lower CMHC per diem rate aligns with section 603 of the BBA of 2015, while also preserving access to PHP services.

2. Payment for PHP and IOP Furnished by Nonexcepted Off-Campus Hospital

Outpatient Departments As discussed in section VIII.D of the CY 2024 OPPS/ASC proposed rule, we proposed to change our methodology for calculating PHP payment rates by establishing separate payment rates for 3-service and 4- service days. We also proposed to establish IOP payment rates for 3- service and 4-service days beginning in CY 2024. Because CMHCs have different cost structures than hospitals, we proposed to establish separate CMHC and hospital rates for 3-service and 4-service PHP and IOP days. We proposed to utilize the CMHC rates for PHP and IOP as the payment rates for PHP and IOP services furnished by nonexcepted off- campus hospital outpatient departments. Specifically, we proposed to utilize the separate CMHC rates for 3-service and 4-service PHP days as the MPFS rates, depending upon whether a nonexcepted off-campus hospital outpatient department furnishes 3 or 4 PHP services in a day. Similarly, we also proposed to utilize the CMHC rates for 3-service and 4-service IOP days as the MPFS rates, depending upon whether a nonexcepted hospital outpatient department furnishes 3 or 4 IOP services in a day. As discussed in section VIII.D of the CY 2024 OPPS/ASC proposed rule, we solicited comment on our proposed payment rates for PHP and IOP services, as well as whether commenters believe it would be appropriate to consider establishing a combined rate for 3-service days in hospitals and CMHCs, and a combined rate for 4-service days in hospitals and CMHCs. We also considered whether it would be appropriate to apply a different methodology for calculating the PHP and IOP rates for nonexcepted off-campus hospital outpatient departments and we solicited comments on alternative methodologies commenters believed would be appropriate. For example, we considered whether it would be appropriate to apply the PFS Relativity Adjuster of 40 percent, which was established in the CY 2018 PFS rule (82 FR 53030) and which applies to most other nonexcepted OPPS services furnished by a nonexcepted off- campus hospital outpatient department. Comment: Several commenters urged CMS to implement a site-neutral payment for nonexcepted off-campus provider-based hospital departments (PBDs). Commentors argued that Congress' goal for enacting section 603 of the Bipartisan Budget Act (BBA) of 2015 (Pub. L. 114-74, November 2, 2015) and CMS's 2017 transition to PFS payment rates for PBDs was motivated by a desire to move to a site-neutral payment methodology. Furthermore, commenters stated that providing reduced payment for PHP and IOP services furnished by excepted off-campus PBDs could reduce beneficiaries' access to behavioral health services. Response: We appreciate the concerns that commenters raised about Medicare beneficiaries' access to behavioral and mental health services. We note that our longstanding policy to pay nonexcepted off- campus provider-based departments at the CMHC rate for PHP services aligns with section 603 of the BBA of 2015, while also preserving access to PHP services. We do not believe that this policy reduces access to behavioral health services, because similar to other entities currently paid for their technical component services under the MPFS, we believe CMHCs would typically have lower cost structures than hospital-based PHPs, largely due to lower overhead costs and other indirect costs such as administration, personnel, and security. After consideration of the public comments we received, we are finalizing our proposal to apply the CMHC PHP and IOP per diem rates as the MPFS rates for PHP and IOP services furnished by nonexcepted off- campus PBDs.

A. Background

Established in rulemaking as part of the initial implementation of the OPPS, the inpatient only (IPO) list identifies services for which Medicare will only make payment when the services are furnished in the inpatient hospital setting because of the invasive nature of the procedure, the underlying physical condition of the patient, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged (70 FR 68695). The IPO list was created based on the premise (rooted in the practice of medicine at that time), that Medicare should not pay for procedures furnished as outpatient services that are performed on an inpatient basis virtually all of the time for the Medicare population, for the reasons described above, because performing these procedures on an outpatient basis would not be safe or appropriate, and therefore not reasonable and necessary under Medicare rules (63 FR 47571). Services [[Page 81859]] included on the IPO list were those determined to require inpatient care, such as those that are highly invasive, result in major blood loss or temporary deficits of organ systems (such as neurological impairment or respiratory insufficiency), or otherwise require intensive or extensive postoperative care (65 FR 67826). There are some services designated as inpatient only that, given their clinical intensity, would not be expected to be performed in the hospital outpatient setting. For example, we have traditionally considered certain surgically invasive procedures on the brain, heart, and abdomen, such as craniotomies, coronary-artery bypass grafting, and laparotomies, to require inpatient care (65 FR 18456). Designation of a service as inpatient only does not preclude the service from being furnished in a hospital outpatient setting but rather means that Medicare will not make payment for the service if it is furnished to a Medicare beneficiary in the hospital outpatient setting (65 FR 18443). Conversely, the fact that a procedure is not on the IPO list should not be interpreted to mean the procedure is only appropriately performed in the hospital outpatient setting (70 FR 68696). As part of the annual update process, we have historically worked with interested parties, including professional societies, hospitals, surgeons, hospital associations, and beneficiary advocacy groups, to evaluate the IPO list and to determine whether services should be added to or removed from the list. Interested parties are encouraged to request reviews for a particular code or group of codes; and we have asked that their requests include evidence that demonstrates that the procedure was performed on an outpatient basis in a safe and appropriate manner in a variety of different types of hospitals-- including but not limited to--operative reports of actual cases, peer- reviewed medical literature, community medical standards and practice, physician comments, outcome data, and post-procedure care data (67 FR 66740). We traditionally have used five longstanding criteria to determine whether a procedure should be removed from the IPO list. As noted in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74353), we assessed whether a procedure or service met these criteria to determine whether it should be removed from the IPO list and assigned to an APC group for payment under the OPPS when provided in the hospital outpatient setting. We have explained that while we only require a service to meet one criterion to be considered for removal, satisfying only one criterion does not guarantee that the service will be removed; instead, the case for removal is strengthened with the more criteria the service meets. The criteria for assessing procedures for removal from the IPO list are as follows:

4. A determination is made that the procedure is being furnished in

numerous hospitals on an outpatient basis.

5. A determination is made that the procedure can be appropriately

and safely furnished in an ASC and is on the list of approved ASC services or has been proposed by us for addition to the ASC covered procedures list. In the past, we have requested that interested parties submit corresponding evidence in support of their claims that a code or group of codes met the longstanding criteria for removal from the IPO list and was safe to perform on the Medicare population in the hospital outpatient setting--including, but not limited to case reports, operative reports of actual cases, peer-reviewed medical literature, medical professional analysis, clinical criteria sets, and patient selection protocols. Our clinicians then thoroughly review all information submitted within the context of the established criteria and if, following this review, we determine that there is sufficient evidence to confirm that the code could be safely and appropriately performed on an outpatient basis, we assign the service to an APC and include it as a payable procedure under the OPPS (67 FR 66740). We determine the APC assignment for services removed from the IPO list by evaluating the clinical similarity and resource costs of the service compared to other services paid under the OPPS and by reviewing the Medicare Severity Diagnosis Related Groups (MS-DRG) rate for the service under the IPPS, though we note we would generally expect the cost to provide a service in the outpatient setting to be less than the cost to provide the service in the inpatient setting. We stated in prior rulemaking that, over time, given advances in technology and surgical technique, we would continue to evaluate services to determine whether they should be removed from the IPO list. Our goal is to ensure that inpatient only designations are consistent with the current standards of practice. We have asserted in prior rulemaking that, insofar as advances in medical practice mitigate concerns about these procedures being performed on an outpatient basis, we would be prepared to remove procedures from the IPO list and provide for payment for them under the OPPS (65 FR 18443). Further, CMS has at times had to reclassify codes as inpatient only services with the emergence of new information. We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74352 and 74353) for a full discussion of our historic policies for identifying services that are typically provided only in an inpatient setting and that, therefore, will not be paid by Medicare under the OPPS, as well as the criteria we have used to review the IPO list to determine whether any services should be removed.

B. Changes to the Inpatient Only (IPO) List

As stated above, we encourage interested parties to request reviews for a particular code or group of codes for removal from the IPO list. For CY 2024, we received several requests from interested parties recommending particular services to be removed from the IPO list. Following our clinical review, we did not find sufficient evidence that, using the five criteria listed above, these services meet the criteria to be removed from the IPO list for CY 2024. Therefore, we did not propose to remove any services from the IPO list for CY 2024. We proposed to add nine services for which codes were newly created by the AMA CPT Editorial Panel for CY 2024 to the IPO list. These new services are described by the CPT codes 0790T, 22836, 22837, 22838, 61889, 76984, 76987, 76988, and 76989 (described by placeholder codes X114T, 2X002, 2X003, 2X004, 619X1, 7X000, 7X001, 7X002, and 7X003 respectively in the CY 2024 OPPS/ASC proposed rule) which will be effective on January 1, 2024. After clinical review of these services, we found that they require a hospital inpatient admission or stay and thus, we believe they are not appropriate for payment under the OPPS. We proposed to assign these services to status indicator ``C'' (Inpatient Only) for CY 2024. Additionally, we proposed to reassign CPT code 0646T from status indicator ``E1'' (not payable by Medicare) to ``C,'' effective CY 2024. The CPT codes, long descriptors, and the proposed CY 2024 [[Page 81860]] payment indicators are displayed in Table 102. Table 102 below contains the proposed changes to the IPO list for CY 2024. The complete list of codes describing services that we proposed to designate as inpatient only services beginning in CY 2024 was also included as Addendum E to the CY 2024 OPPS/ASC proposed rule, which is available via the internet on the CMS website. BILLING CODE 4150-28-P [GRAPHIC] [TIFF OMITTED] TR22NO23.143 BILLING CODE 4150-28-C Comment: We received several comments in support of our proposal to add the ten services listed in Table 102 above to the IPO list for CY 2024. Response: We thank the commenters for their support. [[Page 81861]] Comment: We received one comment requesting that we remove CPT codes 49596 (Repair of anterior abdominal hernia(s) (i.e., epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis when performed, total length of defect(s); greater than 10 cm, incarcerated or strangulated), 49616 (Repair of anterior abdominal hernia(s) (i.e., epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis when performed, total length of defect(s); 3 cm to 10 cm, incarcerated or strangulated), 49617 (Repair of anterior abdominal hernia(s) (i.e., epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis when performed, total length of defect(s); greater than 10 cm, reducible), 49618 (Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis when performed, total length of defect(s); greater than 10 cm, incarcerated or strangulated), 49621 (Repair of parastomal hernia, any approach (i.e., open, laparoscopic, robotic), initial or recurrent, including placement of mesh or other prosthesis, when performed; reducible), and 49622 (Repair of parastomal hernia, any approach (i.e., open, laparoscopic, robotic), initial or recurrent, including placement of mesh or other prosthesis, when performed; incarcerated or strangulated) from the IPO list for CY 2024. The commenter stated that these codes were related to predecessor codes that were not on the IPO list. The commenter also stated that while patients will typically be admitted to the hospital as inpatients for these services, there are instances when it will be appropriate for the patient to undergo these procedures on an outpatient basis. Response: We thank the commenter for their recommendation. Our clinical analysis of these services indicates that they require a hospital inpatient admission or stay. While these services are associated with predecessor codes that were not on the IPO list, our OPPS claims review found that many of those predecessor codes had lengths of stay greater than 2 days. Without further evidence that these procedures can be safely performed in the outpatient setting on the majority of the Medicare population, we do not believe that these services can be appropriately removed from the IPO list at this time. Additionally, as we stated in the CY 2022 OPPS/ASC final rule with comment period, while we recognize that there are services currently classified as inpatient only that may be appropriate in the hospital outpatient setting for some Medicare beneficiaries, we continue to strive to balance the goals of increasing physician and patient choice of setting of care with consideration for patient safety for all Medicare beneficiaries (86 FR 63673). Therefore, we are finalizing our proposal to continue to assign these services to status indicator ``C'' for CY 2024. Comment: We received a few comments requesting that CMS consider reinstating the elimination of the IPO list that was halted in the CY 2022 OPPS/ASC final rule with comment period. Response: We thank the commenters for their feedback. We are not considering eliminating the IPO list at this time. As stated in the CY 2022 OPPS/ASC final rule with comment period, we believe the IPO list is a valuable tool for ensuring that the OPPS only pays for services that can safely be performed in the hospital outpatient setting and remains a necessary safeguard. In that final rule, we explained that we recognized that while physicians are able to make safety determinations for a specific beneficiary, CMS is in the position to make safety determinations for the broader population of Medicare beneficiaries, that is, the typical Medicare beneficiary. Furthermore, we explained that while we want to afford physicians and hospitals the maximum flexibility in choosing the most clinically appropriate site of service for the procedure, as long as the characteristics of the procedure are consistent with the criteria listed above. For further discussion on our decision to halt the elimination of the IPO list, we refer readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR 63671 through 63711). Comment: We received multiple comments requesting that we assign services newly removed from the IPO list to New Technology APCs until sufficient data is collected to assign these services to clinical APCs. Response: We thank the commenters for their input. As we previously stated in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86093), consistent with our regulation at 42 CFR 419.31(a)(1), we classify outpatient services and procedures that are comparable clinically and in terms of resource use into APC groups. As we stated in the CY 2012 OPPS/ASC final rule (76 FR 74224), the OPPS is a prospective payment system that provides payment for groups of services that share clinical and resource use characteristics. It should be noted that for all codes newly paid under the OPPS, including codes removed from the IPO list, our policy has been to assign the service or procedure to an APC based on feedback from a variety of sources, including but not limited to, review of the clinical similarity of the service to existing procedures; advice from CMS medical advisors; information from interested specialty societies; and 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 (84 FR 61229). Therefore, we believe assigning procedures removed from the IPO list to existing clinical APCs that are similar in clinical characteristics and resource costs is appropriate. We note that procedures assigned to New Technology APCs cannot be placed in clinical APCs due to insufficient clinical and cost data, unlike the procedures transitioning from the IPO list. Comment: One commenter wrote that the following statement in the CY 2024 OPPS/ASC proposed rule was incorrect: ``Designation of a service as inpatient only does not preclude the service from being furnished in a hospital outpatient setting but rather means that Medicare will not make payment for the service if it is furnished to a Medicare beneficiary in the hospital outpatient setting'' (65 FR 18443). The commenter stated that this was incorrect because in the Change Request 9097 published on March 13, 2015, CMS revised its billing instructions to allow payment for procedures on the IPO list that are provided to a patient in the outpatient setting on the date of the inpatient admission or during the 3-calendar days preceding the date of inpatient admission to be bundled into the billing of the inpatient admission. Response: The commenter is correct services on the IPO list performed in the outpatient setting can receive IPPS payment if the patient is admitted on the day of the procedure or within the following 3-calendar days. However, services on the IPO list will not receive payment under the OPPS. In summary, after consideration of the public comments we received, we are finalizing our proposal to assign CPT codes 0790T, 22836, 22837, 22838, 61889, 76984, 76987, 76988, 76989, and [[Page 81862]] 0646T to status indicator ``C'' for CY 2024. Table 103 below contains the changes to the IPO list for CY 2024. The complete list of codes describing services that are designated as inpatient only services beginning in CY 2024 is also included as Addendum E to this final rule with comment period, which is available via the internet on the CMS website. BILLING CODE 4150-28-P [GRAPHIC] [TIFF OMITTED] TR22NO23.144 [[Page 81863]] BILLING CODE 4150-28-C

C. Solicitation of Public Comments on the Services Described by CPT

Codes 43775, 43644, 43645, and 44204 We solicited comments regarding whether the services described by CPT codes 43775 (Laparoscopy, surgical, gastric restrictive procedure; longitudinal gastrectomy (i.e., sleeve gastrectomy)), 43644 (Laparoscopy, surgical, gastric restrictive procedure; with gastric bypass and roux-en-y gastroenterostomy (roux limb 150 cm or less)), 43645 (Laparoscopy, surgical, gastric restrictive procedure; with gastric bypass and small intestine reconstruction to limit absorption), and 44204 (Laparoscopy, surgical; colectomy, partial, with anastomosis) are appropriate to be removed from the IPO list. At this time, we do not believe that we have adequate information to determine whether the services described by CPT codes 43775, 43644, 43645, and 44204 can be safely performed in the hospital outpatient department setting on the Medicare population. Therefore, we specifically requested information or evidence that these services can be performed safely on the Medicare population in the outpatient setting. We also sought public comments on whether the services described by CPT codes 43775, 43644, 43645, and 44204 specifically meet any of the five criteria to be removed from the IPO list mentioned above. Comment: We received a significant number of comments in support of maintaining CPT codes 43775, 43644, 43645, and 44204 on the IPO list, many of which were from bariatric surgery healthcare providers and societies. Commenters strongly recommended keeping these four services on the IPO list, with safety being the primary concern. Some commenters noted that while these services can be safely performed in the outpatient setting, those patients are carefully selected and tend to be a younger and healthier population. Commenters had great concern about the safety of performing these services on the Medicare population in the outpatient setting, noting that Medicare beneficiaries tend to be an older population with more comorbidities, even among those younger than 65. Commenters noted that performing these procedures in the outpatient setting could lead to greater risks and complications following the procedures. Many commenters also noted logistical concerns. Commenters wrote that receiving these services in the outpatient setting often requires additional follow-up appointments and at-home care, which many Medicare beneficiaries may not have access to. Patients may need to travel extended distances to receive these surgeries and follow-up care, however transportation may be difficult for some beneficiaries, especially in rural areas. Access to these services for Medicare beneficiaries if they are removed from the IPO list was another major concern among commenters, stating that if these services are removed from the IPO list, access to these services at their facilities in the inpatient setting may be limited, affecting those who would require inpatient care. Additionally, several commenters agreed that these services did not meet the criteria to be removed from the IPO list. Response: We thank the commenters for their feedback. Comment: We received a few comments in support of removing the four laparoscopic services from the IPO list for CY 2024, with commenters stating that these procedures can be safely performed in the outpatient setting. The commenters noted that advances in medical technology and surgical techniques have increased the safety of these surgeries. Response: We thank the commenters for their feedback. However, we did not receive additional literature or evidence that these services can be performed safely on the Medicare population in the outpatient setting. We continue to believe that these services do not meet the criteria to be removed from the IPO list. Therefore, after consideration of the public comments we received, we are maintaining CPT codes 43775, 43644, 43645, and 44204 on the IPO list for CY 2024.

A. Supervision by Nurse Practitioners, Physician Assistants, and

Clinical Nurse Specialists of Cardiac Rehabilitation, Intensive Cardiac Rehabilitation, and Pulmonary Rehabilitation Services Furnished to Hospital Outpatients

1. Background

Section 51008(a) of the Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123) amended section 1861(eee)(1) and (2) of the Act to revise the definitions of cardiac rehabilitation (CR) program and intensive cardiac rehabilitation (ICR) program, respectively, to provide that services these programs furnish can be under the supervision of a physician assistant (PA), nurse practitioner (NP), or clinical nurse specialist (CNS). Section 51008(b) of the BBA of 2018 amended section 1861(fff)(1) of the Act similarly to revise the definition of a pulmonary rehabilitation (PR) program to provide that PR services can be furnished under the supervision of these same types of practitioners. Section 51008(c) of the BBA of 2018 provides that these amendments apply to items and services furnished on or after January 1, 2024. Before the effective date of these amendments, only physicians could supervise services furnished as part of CR, ICR, and PR programs. To implement these amendments, we proposed in the CY 2024 PFS proposed rule to revise the regulations at 42 CFR 410.47 and 410.49, which describe the conditions of coverage for the CR, ICR and PR programs, to provide that physician assistants, nurse practitioners, and clinical nurse specialists can supervise CR, ICR and PR program services. Specifically, the CY 2024 PFS proposed rule proposed to amend Sec. Sec. 410.47 and 410.49 to provide that supervision of PR, CR, and ICR services can be provided by a physician, PA, NP, or CNS.

2. Conforming Revisions to Sec. 410.27

Correspondingly, to implement the amendments to section 1861(eee)(1) and (2) and (fff) of the Act, and to be consistent with the proposed revisions to Sec. Sec. 410.47 and 410.49, we proposed to make conforming revisions to Sec. 410.27, which describes the conditions for coverage for therapeutic outpatient hospital or CAH services and supplies provided incident to a physician's or nonphysician practitioner's service. We explained that currently, Sec. 410.27(a)(1)(iv)(B)(1) provides that for PR, CR, and ICR services, direct supervision must be furnished by a doctor of medicine or osteopathy as specified in Sec. Sec. 410.47 and 410.49. We proposed to delete the reference to a doctor of medicine or osteopathy and retain the cross-reference to Sec. Sec. 410.47 and 410.49. As the text remaining following this deletion would consist solely of cross-references to the newly revised Sec. Sec. 410.47 and 410.49, we explained that this would have the effect of expanding who may provide supervision for CR, ICR and PR services under Sec. 410.27 to include PAs, NPs, and CNSs under Sec. 410.27. In the interim final rule with comment period (IFC) titled ``Policy and Regulatory Provisions in Response to the COVID-19 Public Health Emergency,'' published on April 6, 2020 (the April 6th COVID-19 IFC) (85 FR 19230, 19246, 19286), we changed the regulation at 42 CFR 410.27(a)(1)(iv)(D) to provide that, during a Public Health Emergency as defined in 42 CFR 400.200, the presence of the physician for purposes of the direct supervision [[Page 81864]] requirement for PR, CR, and ICR services includes virtual presence through audio/video real-time communications technology when use of such technology is indicated to reduce exposure risks for the beneficiary or health care provider. Specifically, the required direct physician supervision can be provided through virtual presence using audio/video real-time communications technology (excluding audio-only) subject to the clinical judgment of the supervising practitioner. We further amended Sec. 410.27(a)(1)(iv)(D) in the CY 2021 OPPS/ASC final rule with comment period to provide that this flexibility continues until the later of the end of the calendar year in which the PHE as defined in Sec. 400.200 ends or December 31, 2021 (85 FR 86113 and 86299). In the CY 2021 OPPS/ASC final rule with comment period we also clarified that this flexibility excluded the presence of the supervising practitioner via audio-only telecommunications technology (85 FR 86113). In the CY 2022 PFS final rule, CMS added CPT codes 93797 (Physician or other qualified health care professional services for outpatient cardiac rehabilitation; without continuous ECG monitoring (per session)) and 93798 (Physician or other qualified health care professional services for outpatient cardiac rehabilitation; with continuous ECG monitoring (per session)) and HCPCS codes G0422 (Intensive cardiac rehabilitation; with or without continuous ecg monitoring with exercise, per session) and G0423 (Intensive cardiac rehabilitation; with or without continuous ecg monitoring; without exercise, per session) to the Medicare Telehealth Services List on a Category 3 basis (86 FR 65055). In order to effectuate a similar policy under the OPPS, where PR, CR, and ICR rehabilitation services could be furnished during the PHE to beneficiaries in hospitals under direct supervision of a physician where the supervising practitioner is immediately available to be present via two-way, audio/video communications technology, in the CY 2023 OPPS/ASC final rule with comment period, we finalized a policy to extend the revised definition of direct supervision to include the presence of the supervising practitioner through two-way, audio/video telecommunications technology until December 31, 2023 (87 FR 72019 and 72020). Under the telehealth flexibilities extended in the CAA, 2023, these services will remain on the Medicare Telehealth Services List through the end of CY 2024. In the interest of maintaining similar policies for direct supervision of PR, CR, and ICR under the OPPS and PFS, we proposed to further revise Sec. 410.27(a)(1)(iv)(B)(1) to allow for the direct supervision requirement for CR, ICR, and PR to include virtual presence of the physician through audio-video real-time communications technology (excluding audio-only) through December 31, 2024 and to extend this policy to the nonphysician practitioners, that is NPs, PAs, and CNSs, who are eligible to supervise these services in CY 2024. We solicited comments on whether there are safety and/or quality of care concerns regarding adopting this policy beyond the current or proposed extensions and what policies CMS could adopt to address those concerns if the policy were extended beyond 2023. For the complete discussion of the final revisions to Sec. Sec. 410.47 and 410.49, we refer readers to the CY 2024 PFS final rule. The following is a summary of the comments we received and our responses to those comments. Comment: All commenters supported our proposal to make conforming revisions to Sec. 410.27 to expand who may provide supervision for CR, ICR, and PR to include Pas, NPs, and CNSs and to allow for the direct supervision requirement for CR, ICR, and PR to include the virtual presence of the physician/nonphysician practitioner through audio-video real-time communications technology (excluding audio-only) through December 31, 2024. These commenters indicated that these changes will improve patient access to historically underutilized services, reduce burden on providers, and be of particular value in rural and other underserved areas where workforce shortages remain acute. Response: We thank commenters for their support. Comment: Many of these commenters requested that the availability of virtual direct supervision of these services be made permanent. One of these commenters additionally requested that once the policy is made permanent that CMS retire the requirement for a service-level modifier to identify when direct supervision is provided via appropriate telehealth technology. Response: We appreciate the commenters' suggestions to make the virtual direct supervision of ICR, CR, and PR permanent. One of our motives for extending the availability of virtual direct supervision of these services until the end of CY 2024 is to allow us to continue to evaluate safety, quality of care, and other considerations related to virtual direct supervision. As such, we will take commenter's suggestions into account in future rulemaking. Comment: One commenter requested clarity as to how a hospital registered patient could continue to receive CR and PR remotely in their home. The commenter suggested that CMS create a separate HCPCS code for remote cardiac and/or remote pulmonary rehabilitation services, which would temporarily permit hospitals to continue to furnish these services remotely to patients in their homes and receive reimbursement under the OPPS. Another commenter requested that CMS reinstate the PHE flexibilities that allowed a beneficiary's home to serve as a provider-based department of a hospital for cardiac and pulmonary rehabilitation services. Acknowledging that the waiver related to the PHE allowing for this flexibility has ended, this commenter suggested that CMS rely on other waiver authority (such as section 402 demonstration authority) to ensure the continuation of the flexibility. Response: We appreciate commenters' interest in providing cardiac and pulmonary rehabilitation services remotely to a patient in their home. However, a hospital registered patient cannot currently receive CR or PR remotely in their home. The flexibility to provide CR, PR, and ICR services remotely to a beneficiary in his or her home ended with the expiration of the PHE on May 11, 2023. Comment: One commenter requested that CMS revise the definition of ``physician prescribed exercise'' under Sec. Sec. 410.47(a) and 410.49(a) to include Pas. Citing the 2014 final decision memorandum for Cardiac Rehabilitation (CR) Programs--Chronic Heart Failure,\195\ this commenter stated that CMS previously declined to modify language in this manner because the Act specifies that the program is under the supervision of a physician. This commenter believed that since this section of the Act has been revised to allow Pas to supervise these programs, CMS should now modify this language accordingly to ``provider prescribed exercise.'' This commenter further requested that if the exact wording cannot be modified due to statutory constraints, CMS should reinterpret the intent of this section to indicate that health professionals authorized to supervise may also prescribe exercise. Additionally, this commenter urged CMS to work with Congress to modify physician-centric language in U.S. Code that prohibits Pas and other health [[Page 81865]] professionals from ordering PR, CR, and ICR. Another commenter noted that under the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) model, NPs are allowed to establish, review and sign a written care plan for PR and CR and requested that this waiver be standardized across all relevant payment models and that CMS should explore regulatory avenues to remove the barrier for patients to be seen by NPs to increase PR and CR participation. --------------------------------------------------------------------------- \195\ https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=270. --------------------------------------------------------------------------- Response: In the 2014 final decision memorandum for Cardiac Rehabilitation (CR) Programs--Chronic Heart Failure \196\ public comment section, CMS responded to a similar request that the language describing CR be changed from ``physician prescribed'' to ``provider prescribed.'' In response to this comment, CMS reiterated that per the Act a CR program (at the time) ``means a physician-supervised program'' at section 1861(eee)(1) of the Act. CMS then further explained that ``physician-prescribed exercise'' is one of the required items listed in section 1861(eee)(3). While the BBA of 2018 expanded the types of practitioners that may supervise PR in section 1861(fff)(1) and CR/ICR in section 1861(eee)(1), it did not amend the items and services that these programs must furnish to also include exercise prescribed by other practitioners in addition to physicians, as section 1861(fff)(2)(A) for PR and section 1861(eee)(3)(A) for CR/ICR were not amended. We understand commenters' requests to expand the role for NPPs in prescribing and ordering these services, and establishing, reviewing, and signing plans of care, however the statutory language does not support the requested changes and CMS does not interpret the statutory changes to allow for such modifications using only a regulatory pathway. We encourage interested parties to work with Congress to explore further statutory changes to support these requests. --------------------------------------------------------------------------- \196\ https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=270. --------------------------------------------------------------------------- Comment: One commenter objected to the term ``nonphysician provider'' and encouraged CMS to fully transition to the use of the practitioner's professional title or to utilize the term ``advanced practice providers'' (APPs) when necessary and to remove all references to ``nonphysician practitioner'' within regulations, guidance, and information collection instruments. The commenter argues that CMS should do so because the term ``nonphysician provider'' fails to recognize the established scope of practice for APPs and their authority to practice to the full extent of their education and clinical preparation. Response: We appreciate the commenter's concerns and agree with the importance of employing the appropriate designations for practitioners. We note that Sec. 410.27(g) specifically lists the individual practitioners (clinical psychologist, licensed clinical social worker, PA, NP, CNS, or certified nurse-midwife) that are included in the term ``nonphysician practitioner'' for purposes of Sec. 410.27 and Sec. Sec. 410.47(a) and 410.49(a), which Sec. 410.27, as finalized, now cross-references, specifically lists the individual practitioners (PA, NP, and CNS) that are included in the term ``nonphysician practitioner'' for the purposes of the supervision of ICR, CR and PR. It is therefore unnecessary and would be impractical to replace all instances of ``nonphysician practitioner'' throughout each regulation with a list of each practitioner's professional titles. With respect to replacing ``nonphysician practitioner'' with ``advance practice providers,'' we understand the importance of using the most relevant and up to date terminology to describe these practitioners. However, as acknowledged by the commenter, ``nonphysician practitioner'' is used in multiple regulations, guidance, and other documents and any change in terminology would need to be considered in light of ensuring consistency across these authorities. We will take this suggestion into consideration for future rulemaking. Comment: One commenter requested clarification as to whether the flexibility for Pas, NPs, and CNSs to directly supervise ICR, CR and PR applies to both PPS hospitals and CAHs. Response: Yes, the flexibility for Pas, NPs, and CNSs to directly supervise ICR, CR and PR applies to ICR, CR and PR services furnished by CAHs. Comment: One commenter requested that CMS not restrict direct supervision through virtual presence to a subset of services. In the commenter's view, the decision whether to provide direct supervision through virtual presence via real-time, two-way audio/virtual telecommunications should be left up to the practitioner overseeing the patient's care. Response: We thank the commenter for their comment and note that for therapeutic services under Sec. 410.27, ICR, CR and PR, are the only services that are subject to direct supervision requirements when furnished to hospital outpatients. For a full discussion of the change in the generally applicable minimum required level of supervision for hospital outpatient therapeutic services from direct supervision to general supervision for services furnished by hospitals and CAHs, we refer readers to the CY 2020 OPPS final rule (84 FR 61359 through 61363) and the CY 2021 OPPS final rule with comment period (85 FR 86110 and 86111). Comment: Several commenters provided input in response to our comment solicitation as to the existence of safety and/or quality of care concerns regarding the adoption of virtual supervision beyond the current (end of 2023) or proposed (end of 2024) extensions and what policies CMS might adopt to address any such concerns if the policy were extended beyond 2023. One commenter opined that requiring the physician or other supervising professional to be physically present in the same building has negligible patient-safety benefits because a physician's office, clinic, or hospital outpatient department typically has many other practitioners on site who would be available to assist if a physical presence was required. This commenter further contended that a virtually available supervisor might actually enhance patient safety in an emergency because the most appropriate course of action in an emergency is to transfer the patient to an emergency department, not wait for the supervising physician or other practitioner to arrive. The commenter noted that a virtually available supervisor may facilitate a faster transfer of the patient to the emergency department. Another commenter indicated that they and other interested parties had previously provided CMS with literature on the absence of safety issues when supervision is provided virtually and offered to provide additional information to this effect for CMS's consideration for 2025 rulemaking. A third commenter stated that because the option to provide direct supervision virtually has only become available recently as a consequence of the PHE, it is unlikely there are any peer-reviewed studies that focus on this aspect of virtual care. However, the commenter indicated that they had included with their comment numerous studies demonstrating the effectiveness and safety of virtual CR and PR services. In the commenter's view, the studies demonstrate that virtual and hybrid delivery of CR and PR services provided by staff are safe, improve health outcomes and adherence, and address barriers to access. [[Page 81866]] Finally, a commenter, prefacing their remarks with a statement that they do not share CMS's concern that virtual supervision inherently gives rise to patient safety issues, indicated that in their experience, numerous clinical staff and auxiliary personnel perform a wide range of tasks easily supervised virtually. The commenter argues that such staff categorically do not perform ``complex, high-risk, surgical, interventional, or endoscopic procedures, or anesthesia procedures'' that CMS has described in the past to explain its concerns with virtual direct supervision and that nonphysician practitioners, to the extent that they assist with such procedures, are subject to higher standards, certifications, and oversight. Response: We thank commenters for their input regarding safety and/ or quality of care concerns related to virtual direct supervision. We will take these comments into consideration for future rulemaking. Comment: Several commenters appeared to assume that our proposal to extend the availability of virtual direct supervision until the end of 2024 included both outpatient hospital therapeutic services (under Sec. 410.27) and outpatient hospital diagnostic services (under Sec. 410.28), in the same way that the PFS proposed rule proposed to extend the availability of virtual direct supervision to both therapeutic and diagnostic services (under Sec. 410.32) furnished by physicians (88 FR 52302). One commenter encouraged CMS to extend ``virtual direct supervision'' through the end of 2024, if not beyond, ``and in a manner comparable to the physician fee schedule,'' to ensure that patients continued to have access to robust healthcare choices. Another commenter submitted complementary comments to both the CY 2024 proposed PFS rule and CY 2024 proposed OPPS rule, referring to the two rules' overlap with respect to certain policies and using nearly identical language to describe its endorsement of both rules' proposals relating to the extension of the availability of virtual direct supervision through 2024. In its comment to the CY 2024 proposed PFS rule, this commenter stated: ``The Agency proposes extending through CY2024 several PHE-era policies not directly addressed by CAA2023, including permitting virtual Direct Supervision of auxiliary personnel by physicians and/or non-physician practitioners. We support the Agency's proposal to extend the present Direct Supervision waiver policies through CY2024.'' In the commenter's corresponding comment to the CY 2024 proposed OPPS rule, they similarly stated: ``The Agency also proposes extending through CY2024 several PHE-era virtual care policies not directly addressed by The Consolidated Appropriations Act of 2023 (``CAA2023''), including permitting virtual Direct Supervision of auxiliary personnel by physicians and/or non-physician practitioners. . . [commenter] strongly supports extending all of those policies in their present state through CY2024. We direct the Agency to our public response to the 2024 MPFS proposed rule for a full discussion.'' Another commenter, in support of their suggestion to make the flexibility to provide direct supervision through real-time audio/video technology permanent, attested to their experience of successfully providing ``clinically appropriate supervision for impacted services such as diagnostic tests and incident-to services through synchronous audio-visual telehealth.'' Response: We appreciate commenters' support and would like to make a clarification with respect to the availability of the virtual direct supervision of hospital and CAH diagnostic services furnished to outpatients in CY 2024. Historically, our policy has been to require that all hospital diagnostic services that are provided directly or under arrangement, whether provided in the main buildings of the hospital, in a PBD of a hospital, or at a nonhospital location, follow the physician supervision requirements adopted in the annual PFS rulemaking (74 FR 60590). Consistent with this policy, until CY 2023 the regulation at 42 CFR 410.28 regarding diagnostic tests furnished to hospital outpatients cross-referenced the definition of supervision levels for diagnostic services in the regulation at 42 CFR 410.32(b)(3), thereby incorporating the definitions of levels of supervision for diagnostic tests for which payment is made under the PFS. This policy--to align the supervision levels for diagnostic services furnished to hospital outpatients with those provided for in the regulation at 42 CFR 410.32(b)(3)--is also reflected in section 20.4.4 of Chapter 6 of the Medicare Benefit Policy Manual,\197\ which provides that the supervision levels listed in the quarterly updated Medicare PFS Relative File apply to individual outpatient diagnostic tests. --------------------------------------------------------------------------- \197\ Available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/bp102c06.pdf. --------------------------------------------------------------------------- In the CY 2023 OPPS/ASC final rule with comment period, we revised the regulation at Sec. 410.28 to remove the cross-reference to Sec. 410.32 and include within the regulation text in that provision the definitions of different levels of supervision. Although we removed the cross-reference to section Sec. 410.32, our intent was to continue to align the rules regarding the supervision levels for diagnostic services furnished to hospital outpatients with the rules for supervision levels for diagnostic services described in section Sec. 410.32. When we removed the cross-references in 42 CFR 410.28 to 42 CFR 410.32, we anticipated continuing to make changes to Sec. 410.28 to ensure that the definitions of the supervision levels remained consistent between the two provisions. Consequently, when the CY 2024 PFS proposed rule proposed to revise Sec. 410.32 to extend the availability of the virtual supervision of direct supervision until the end of 2024, we intended to propose a corresponding revision to Sec. 410.28 in the proposed 2024 OPPS rule to provide for this flexibility for diagnostic services furnished to hospital outpatients. Unfortunately, we inadvertently failed to propose this revision. Because until CY 2023, an update to the supervision requirements under Sec. 410.32 applied to diagnostic services furnished to hospital outpatients because of the cross-reference to Sec. 410.32 in the regulation at Sec. 410.28, we believe it is possible that the public, long accustomed to section Sec. 410.28 incorporating the definitions in Sec. 410.32 through the cross-reference to that provision, did not realize that an update to Sec. 410.28 had not been proposed and thus did not comment on our unintended failure to update Sec. 410.28. This is supported by comments we received that suggested that commenters were unaware that we had not proposed a revision to the regulation at Sec. 410.28 to extend the virtual supervision of outpatient diagnostic services through the end of 2024. Instead, commenters seemed to assume that our proposal to extend the ability of practitioners to meet the direct supervision requirement through virtual presence included all diagnostic services, whether furnished in a hospital outpatient department or otherwise. Because our intention was to propose a corresponding revision to the regulation text at Sec. 410.28 for consistency with the proposed revision to Sec. 410.27 and commenters supported such a policy, we are812inalizingg a revision to Sec. 410.28(e)(2)(iii) to allow for the direct supervision of diagnostic services to include the virtual presence of the physician or nonphysician practitioner through audio/video real-time communications technology [[Page 81867]] (excluding audio-only) through December 31, 2024. After consideration of the public comments we received, we are also finalizing, without modification, our proposal to revise Sec. 410.27(a)(1)(iv)(B)(1) to expand the practitioners who may supervise CR, ICR, and PR services to include NPs, Pas, and CNSs and to allow for the direct supervision requirement for CR, ICR, and PR to include the virtual presence of the physician, NP, PA or CNS through audio-video real-time communications technology (excluding audio-only) through December 31, 2024.

B. Payment for Intensive Cardiac Rehabilitation Services (ICR) Provided

by an Off-Campus, Non-Excepted Provider Based Department (PBD) of a Hospital

1. Background on Intensive Cardiac Rehabilitation

Section 144(a) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275) made a number of changes to the Act related to coverage and payment for pulmonary and cardiac rehabilitation services furnished to beneficiaries with chronic obstructive pulmonary disease and certain other conditions, effective January 1, 2010. Specifically, section 144(a)(1)(A) of MIPPA amended section 1861(s)(2) of the Act by adding new subparagraphs (CC) and (DD) to provide for Medicare Part B coverage of items and services furnished under a cardiac rehabilitation (CR) program (as defined in a new section 1861(eee)(1) of the Act); a pulmonary rehabilitation (PR) program (as defined in a new section 1861(fff)(1) of the Act); and an intensive cardiac rehabilitation (ICR) program (as defined in a new section 1861(eee)(4) of the Act). The amendments made by section 144(a) of MIPPA provide for coverage of CR, PR, and ICR program services provided in a physician's office, in a hospital on an outpatient basis, and in other settings determined appropriate by the Secretary. Section 144(a)(2) of MIPPA amended section 1848(j)(3) of the Act to provide for payment for services furnished in an ICR program under the PFS and also added a new paragraph (5) to section 1848(b) of the Act. Section 1848(b)(5)(A) requires the Secretary for ICR program services to substitute the Medicare OPD fee schedule amount established under the OPPS for cardiac rehabilitation (under HCPCS codes 93797 and 93798 for calendar year 2007, or any succeeding HCPCS codes for cardiac rehabilitation). For a full discussion of implementation of the MIPPA amendments related to coverage and payment for PR, CR, and ICR programs under the OPPS, we refer readers to the CY 2010 OPPS/ASC final rule with comment period (74 FR 60566 through 60574).

2. Background on Section 603 of the Bipartisan Budget Act of 2015 and

the PFS Relativity Adjuster Section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74) (BBA, 2015) (hereinafter referred to as ``section 603'') amended section 1833(t) of the Act by adding a new clause (v) to paragraph (1)(B) and adding a new paragraph (21). As a general matter, under sections 1833(t)(1)(B)(v) and (t)(21) of the Act, applicable items and services furnished by certain off-campus outpatient departments of a provider on or after January 1, 2017, are not considered covered OPD services as defined under section 1833(t)(1)(B) of the Act for purposes of payment under the OPPS and are instead paid ``under the applicable payment system'' under Medicare Part B if the requirements for such payment are otherwise met. Section 603 amended section 1833(t)(1)(B) of the Act by adding a new clause (v), which excludes from the definition of ``covered OPD services'' applicable items and services (defined in paragraph (21)(A) of the section) that are furnished on or after January 1, 2017, by an off-campus PBD, as defined in paragraph (21)(B) of the section. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719), we adopted a number of policies to implement section 603. Broadly, we: (1) defined applicable items and services in accordance with section 1833(t)(21)(A) of the Act for purposes of determining whether such items and services are covered OPD services under section 1833(t)(1)(B)(v) of the Act or whether payment for such items and services will instead be made under the applicable payment system designated under section 1833(t)(21)(C) of the Act; (2) defined off-campus PBD for purposes of sections 1833(t)(1)(B)(v) and (t)(21) of the Act; and (3) established policies for payment for applicable items and services furnished by an off-campus PBD (nonexcepted items and services) under section 1833(t)(21)(C) of the Act. To do so, we finalized policies that define whether certain items and services furnished by a given off-campus PBD may be considered excepted and, thus, continue to be paid under the OPPS; established the requirements for the off-campus PBDs to maintain excepted status (both for the excepted off-campus PBDs and for the items and services furnished by such excepted off-campus PBDs); and described the applicable payment system for nonexcepted items and services (generally, the PFS). To effectuate payment for nonexcepted items and services, in the CY 2017 interim final rule with comment period (81 FR 79720 through 79729), we established a new set of payment rates under the PFS that reflected the relative resource costs of furnishing the technical component of a broad range of services to be paid under the PFS specific to the nonexcepted off-campus PBDs of a hospital. Specifically, we established a PFS Relativity Adjuster that is applied to the OPPS rate for the billed nonexcepted items and services furnished in a nonexcepted off-campus PBD in order to calculate payment rates under the PFS. The PFS Relativity Adjuster reflects the estimated overall difference between the payment that would otherwise be made to a hospital under the OPPS for the nonexcepted items and services furnished in nonexcepted off-campus PBDs and the resource-based payment under the PFS for the technical aspect of those services with reference to the difference between the facility and nonfacility (office) rates and policies under the PFS. Nonexcepted items and services furnished by nonexcepted off-campus PBDs are generally paid under the PFS at the applicable OPPS payment rate adjusted by the PFS Relativity Adjuster of 40 percent (that is, 60 percent less than the OPPS rate) (82 FR 53030). In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79719 and 79725), we created modifier ``PN'' to collect data for purposes of implementing section 603 but also to trigger payment under the newly adopted PFS-equivalent rates for nonexcepted items and services. Nonexcepted off-campus PBDs bill for nonexcepted items and services on the institutional claim utilizing modifier ``PN'' to indicate that an item or service is a nonexcepted item or service. For a full discussion of our initial implementation of section 603, we refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719) and the interim final rule with comment period (79720 through 79729). For a detailed discussion of the current PFS Relativity Adjuster related to payments under section 603, we refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 52356 through 52637) and the CY 2019 PFS final rule with comment period (82 FR 59505 through 59513). [[Page 81868]]

3. Proposal To Modify Claims Processing of HCPCs Codes G0422 and G0423

To Address an Unintended Payment Disparity Caused by Application of the PFS Relativity Adjuster to ICR Services Furnished by Off-Campus Non- Excepted PBDs Hospitals Since 2010, ICR services provided in the physician's office have been paid at 100 percent of the OPPS rate for CR services as required by 1848(b)(5). Since 2017, ICR services provided by an off-campus, non- excepted PBD of a hospital have been paid at the above-described ``PFS- equivalent'' rate through application of the PFS Relativity Adjuster, which was 50 percent of the OPPS rate in CY 2017 and 40 percent of the OPPS rate in CY 2018 and thereafter, consistent with the above- described implementation of section 603. This has produced an outcome inconsistent with the text of section 1848(a)(5)(A) and at odds with the intent of section 603, which was to remove the significant disparity in payment rates for the same services depending on whether they were furnished in a physician's office or an off-campus, non-excepted PBD of a hospital. When the PFS Relativity Adjuster was implemented in 2017, payment for the ICR service provided in a physician's office and a PBD of an off-campus, non-excepted hospital was already the same pursuant to section 1848(b)(5)(A), which requires ICR services provided in a physician's office to be paid at the OPPS rate for cardiac rehabilitation. Consequently, application of the 40 percent PFS Relativity Adjuster to payment for ICR provided by an off-campus, non-excepted PBD has resulted in an unintended reimbursement disparity between the two sites of the service, as shown in Table 104. [GRAPHIC] [TIFF OMITTED] TR22NO23.145 This disparity creates a significant barrier to beneficiary access to an already underutilized service. To eliminate this unintended outcome and for consistency with the requirement in section 1848(b)(5)(A) of the Act to substitute the OPPS rate for CR services for the PFS rate for ICR services, we proposed to pay for ICR services provided by an off-campus, non-excepted provider-based department of a hospital at 100 percent of the OPPS rate for CR services (which is also 100 percent of the PFS rate) rather than at 40 percent of the OPPS rate. Effective January 1, 2024, we proposed to exclude ICR from the 40 percent PFS Relativity Adjuster policy at the code level by modifying the claims processing of HCPCS codes G0422 (Intensive cardiac rehabilitation; with or without continuous ECG monitoring with exercise, per session) and G0423 (Intensive cardiac rehabilitation; with or without continuous ECG monitoring without exercise, per session) so that 100 percent of the OPPS rate for CR is paid irrespective of the presence of the ``PN'' modifier (signifying a service provided in a non-excepted off-campus provider-based department of a hospital) on the claim. We solicited comment on whether there are other services for which the OPPS rate is unconditionally used under the PFS, such that these services should be treated similarly for purposes of payment to off-campus, non-excepted provider-based departments of hospitals. The following is a summary of the comments we received and our responses to those comments. Comment: All commenters supported our proposal to exclude ICR from the 40 percent PFS Relativity Adjuster at the code level by modifying the claims processing of HCPCS codes G0422 and G0423 so that 100 percent of the OPPS rate for CR is paid irrespective of the presence of the ``PN'' modifier on the claim. These commenters indicated that this change will increase patient access to an underutilized program, particularly in rural and underserved areas. Response: We thank commenters for their support. Comment: Many commenters requested that we retroactively review payments made from CY 2017 through CY 2023 for ICR services (HCPCS codes G0422 and G0423) provided by a non-excepted, off-campus PBD and prospectively adjust payment rates to reimburse off-campus PBDs the difference between what was paid what should have been paid. Response: We appreciate commenters' suggestion and will consider it for future rulemaking. Comment: Several commenters provided input in response to our request for comment on whether there are other services for which the OPPS rate is unconditionally used under the PFS, such that these services should be treated similarly for purposes of payment to off- campus, non-excepted provider-based departments of hospitals. One commenter stated that the OPPS rate is unconditionally used under the PFS for the technical component of all diagnostic services subject to the OPPS imaging cap mandated by section 1848(b)(4) of the Act, which limits the [[Page 81869]] PFS rate to no more than the OPPS rate. The commenter contends that it is illogical to apply a PFS Relative Adjustor to the OPPS rates for these services when doing so results in payment that is lower than what a physician's office would receive, particularly since the OPPS payment rates include packaging of drugs, devices, laboratory, and other ancillary services that are all separately billed by an office. This commenter requested that CMS exempt all imaging tests whereby the OPPS imaging cap is applied and pay these services at 100 percent of the OPPS rate when furnished in a non-excepted, off-campus location. Response: We do not agree that the OPPS rate is unconditionally used under the PFS for the technical component of all diagnostic services subject to the OPPS imaging cap mandated by section 1848(b)(4), such that these services should be treated similarly for purposes of payment to off-campus, non-excepted provider-based departments of hospitals. There is a fundamental difference between section 1848(j)(3), which is intended to ensure site neutrality between the PFS and the OPPS for payment for ICR rehabilitation services, and section 1848(b)(4), which is intended to impose a limit on the PFS payment for certain imaging services if the payment rate for a particular imaging service exceeds the OPPS payment rate for the same service in a given year. Comment: The remaining responses to our comment solicitation did not identify any other services for which the OPPS rate is unconditionally used under the PFS but instead suggested services that commenters believed should be excluded from the 40 percent PFS Relativity Adjuster based on payment rate comparisons and other considerations. One commenter, while acknowledging that CR services were not included in the original MIPPA statute that directs coverage and payment of ICR, argued that since CR services are clinically very similar to ICR services and are also underutilized services with a proven record of improving patient quality of life and rehospitalization outcomes, that it would be appropriate for CMS to also exclude CPT codes 93797 (Physician or other qualified health care professional services for outpatient cardiac rehabilitation; without continuous ECG monitoring (per session)) and 93798 (Physician or other qualified health care professional services for outpatient cardiac rehabilitation; with continuous ECG monitoring (per session)) from the 40 percent PFS Relativity Adjuster. Another commenter requested that CMS consider exempting both CR and PR. Two commenters referred CMS to a recent report by MedPAC which stated that some services are more safely provided in the PBD setting and that limiting payment for these services could limit beneficiary access. These commenters suggested that CMS identify the ambulatory payment classifications for these services and exclude them from the 40 percent PFS Relativity Adjuster. Additionally, these commenters requested that CMS identify payment codes for which payment to freestanding physician offices under the PFS is higher than 40 percent of the OPPS rate and exclude them from the 40 percent PFS Relativity Adjuster. One of these commenters also requested that CMS conduct a comprehensive review of services provided in the physician office and PBD settings to identify other services that should be paid at the OPPS rate to ``preserve beneficiary access.'' Finally, one commenter reported that they compared the non-facility practice expense (PE) national payment amounts to 40 percent of the OPPS rate for the service and discovered 602 HCPCS services for which 40 percent of the OPPS rate is less than the non-facility PE rate. Acknowledging that many of these codes are the imaging codes previously discussed, the commenter stated that the list also included codes for services that are not covered or allowed to be paid in the non-facility setting and for which facility resources are not included in the non- facility PE RVUs. The commenter stated that these procedures should be paid 100 percent of OPPS and not be subject to the PFS Relatively Adjustor because they are not allowed to be performed in physicians' offices. The commenter additionally requested that CMS review a selection of services included in an appendix to the comment, which highlights instances where 40 percent of the OPPS payment rate is less than the non-facility PE payment rate and requests that, where the PFS Relatively Adjustor is less than the non-facility PE payment rate from the MPFS, that CMS pay either 100 percent of the OPPS rate or, at a minimum, use the non-facility PE payment rate as a floor. Response: We appreciate commenters' many thoughtful responses to our comment solicitation as well as their many nominations of services that they believe should be excluded from the 40 percent PFS Relativity Adjuster based on payment rate comparisons and other non-statutory considerations. While we will take these suggestions into consideration in future rulemaking, we emphasize that our primary rationale for making this change was adherence to the statute which explicitly requires the PFS rate for ICR services be the same as the OPPS rate for CR services. After consideration of the public comments we received, we are finalizing, without modification, our proposal to exclude ICR from the 40 percent PFS Relativity Adjuster at the code level by modifying the claims processing of HCPCS codes G0422 and G0423 so that 100 percent of the OPPS rate for CR is paid irrespective of the presence of the ``PN'' modifier on the claim.

C. OPPS Payment for Specimen Collection for COVID-19 Tests

In the May 8, 2020 COVID-19 interim final rule with comment period titled ``Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program'', we created a new E/M code to support COVID-19 testing during the PHE: HCPCS code C9803 (Hospital outpatient clinic visit specimen collection for severe acute respiratory syndrome coronavirus 2 (sars- cov-2) (coronavirus disease [covid-19]), any specimen source) (85 FR 27604). In our review of available HCPCS and CPT codes for the May 8, 2020 COVID-19 IFC, we did not identify a prior code that explicitly described the exact services of symptom assessment and specimen collection that HOPDs were undertaking to facilitate widespread testing for COVID-19. We believed that HCPCS code C9803 was necessary to meet the resource requirements for HOPDs to provide extensive testing for the duration of the COVID-19 PHE. This code was created only to meet the need of the COVID-19 PHE and we stated that we expected to retire this code at the conclusion of the COVID-19 PHE (85 FR 27604). We assigned HCPCS code C9803 to APC 5731--Level 1 Minor Procedures effective March 1, 2020, for the duration of the COVID-19 PHE. In accordance with section 1833(t)(2)(B) of the Act, APC 5731--Level 1 Minor Procedures contains services similar to HCPCS code C9803. APC 5731--Level 1 Minor Procedures has a payment rate of $24.96 for CY 2023. HCPCS code C9803 was also assigned a status indicator of ``Q1.'' The Q1 status indicator indicates that the OPPS will package services billed under HCPCS code C9803 when billed with a separately payable primary service in the same encounter. When HCPCS code C9803 is billed without [[Page 81870]] another separately payable primary service, we explained that we will make separate payment for the service under the OPPS. The OPPS also makes separate payment for HCPCS code C9803 when it is billed with a clinical diagnostic laboratory test with a status indicator of ``A'' on Addendum B of the OPPS. On May 11, 2023, the COVID-19 PHE concluded.\198\ As stated above, we created HCPCS code C9803 to meet the need of the COVID-19 PHE and the resource requirements for HOPDs during the PHE and planned to retire the code following the conclusion of the PHE. While the code will remain active for the remainder of CY 2023 for technical reasons, we do not believe it is necessary for the code remain active in CY 2024 now that the PHE has concluded. Therefore, we proposed to delete HCPCS code C9803 effective January 1, 2024; and we solicited comment on our proposal to delete this code for CY 2024. --------------------------------------------------------------------------- \198\ https://www.hhs.gov/about/news/2023/05/11/hhs-secretary-xavier-becerra-statement-on-end-of-the-covid-19-public-health-emergency.html. --------------------------------------------------------------------------- We received two comments in support of maintaining the code for purposes of reporting and reimbursement. One commenter requested that if we do retire the code, that we implement a similar code for ongoing nasopharyngeal swab specimen collection. After consideration of the public comments we received, we do not believe it is necessary for the code to remain active in CY 2024 with the conclusion of the COVID-19 PHE. We continue to believe that the utility of HCPCS code C9803 ended when the COVID-19 PHE ended. Therefore, we believe it appropriate to delete HCPCS code C9803 effective January 1, 2024. However, we will continue to explore coding opportunities for nasopharyngeal swab specimen collection, where appropriate.

1. Mental Health Services Furnished Remotely by Hospital Staff to

Beneficiaries in Their Homes In the CY 2023 OPPS final rule with comment period (87 FR 72012 through 72017), we finalized creation of three HCPCS C-codes to describe mental health services furnished by hospital staff to beneficiaries in their homes through communications technology. See Table 105 for the C-code numbers and their descriptors. [GRAPHIC] [TIFF OMITTED] TR22NO23.146 When we created HCPCS codes C7900 through C7902, we did not specify whether they should be used for individual or group services, preferring to keep the coding more general while we gathered information about the use of these new codes. However, we have heard from interested parties that, in instances when a beneficiary is receiving multiple units of group therapy a day, it is administratively burdensome to report and document each unit of time using multiple codes. Instead, interested parties requested that we create a single, untimed code that can be reported when a beneficiary receives multiple hours of group therapy per day. In order to reduce administrative burden and enhance access to these services, we proposed to create a new, untimed, HCPCS C-code describing group therapy. Please see Table 106 for the proposed C-code and long descriptor. [[Page 81871]] [GRAPHIC] [TIFF OMITTED] TR22NO23.147 As we stated in the CY 2023 OPPS final rule with comment period, when beneficiaries are in their homes and not physically within the hospital, the hospital is not accruing all the costs associated with an in-person service; and the full OPPS rate would not accurately reflect these reduced costs. We believe that the costs associated with hospital clinical staff remotely furnishing a mental health service to a beneficiary who is in their home using communications technology more closely resembles the PFS payment amount for similar services when performed in a facility, which reflects the time and intensity of the professional work associated with performing the mental health service but does not reflect certain practice expense costs, such as clinical labor, equipment, or supplies (87 FR 72015). In keeping with that methodology, we proposed to assign HCPCS code C79XX to an APC based on the facility payment amount for a clinically similar service, CPT code 90853 (Group psychotherapy (other than of a multiple-family group)) under the PFS. See Table 107 for the proposed SI and APC assignments and payment rates for HCPCS code C79XX. [GRAPHIC] [TIFF OMITTED] TR22NO23.148 We sought comment on whether HCPCS code C79XX sufficiently describes group psychotherapy to the extent that group psychotherapy would no longer be reported with HCPCS codes C7900-C7902, in which case we would need to refine the code descriptors for HCPCS codes C7900- C7902 to stipulate that they are solely for services furnished to an individual beneficiary. Alternatively, we sought comment on whether or there are circumstances where interested parties believe it would be appropriate to bill for group services using HCPCS codes C7900-C7902. We also sought comment on any further refinements to the code descriptors, valuation, or billing guidance. We have also heard from interested parties that there is confusion about the presence of the word ``initial'' in the descriptors for HCPCS codes C7900 and C7901 and that this is preventing billing for remote behavioral health services furnished subsequent to either the first 15 to 29 minutes or 30 to 60 minutes. In order to facilitate accurate billing, regardless of whether the remote mental health service is being furnished as an initial or subsequent service, we proposed to revise the code descriptors to remove the word ``initial.'' We also proposed to revise the descriptor for HCPCS code C7902 to limit billing with HCPCS code C7901. See Table 108 for revised code descriptors. [[Page 81872]] [GRAPHIC] [TIFF OMITTED] TR22NO23.149 The following is a summary of the comments we received and our responses to those comments. Comment: Most commenters supported our proposal to create to a new, untimed, HCPCS C-code (C79XX) describing group therapy, citing reduced confusion and administrative burden, and ensuring appropriate patient access to the services. Response: We thank commenters for their support. Comment: Several commenters opposed the creation of the group therapy code, objecting to our proposal to assign the code to an APC based on the facility payment amount for a similar service (CPT code 90853 Group Psychotherapy (other than of a multiple-family group)) under the PFS. Several other commenters neither supported nor objected to the creation of the group therapy code but expressed concern with basing reimbursement on the facility PFS payment for remote mental health services generally. These commenters disagreed with CMS's assumption that when beneficiaries are in their homes and not physically within the hospital, the hospital is not accruing all the costs associated with an in-person service. These commenters pointed to many factors in support of their contention, including investments in infrastructure, equipment, and technology to provide remote services, the clinical and administrative staff necessary to provide remote services while maintaining access to in-person care, the staff time and resources necessary to make the remote visit run smoothly (scheduling and setting up the appointment, assisting patients with connecting to the appointment, screening patients, making referrals and scheduling follow ups), the fact that salaries and operating costs do not decrease simply because some services are provided remotely and that the only cost savings are for supplies, which are negligible because the services being provided remotely are mental health services. In recognition of these costs, these commenters requested payment for remote mental health services at the full OPPS rate. One commenter supported CMS's conclusion that mental health services provided remotely cost less than mental health services provided in-person, noting that even though the work RVU remains the same, the practice expenses are significantly reduced. Response: We continue to believe that when beneficiaries are in their homes and not physically within the hospital, that the hospital is not accruing all the costs associated with an in-person service and as such the full OPPS rate would not accurately reflect these costs. However, we do agree that the non-facility payment rate is likely a better reflection of the resources associated with furnishing these services than the facility payment rate. However, as demonstrated in Table 109 below, using the non-facility rate to inform the APC assignment still results in assignment to the same APCs. [[Page 81873]] [GRAPHIC] [TIFF OMITTED] TR22NO23.150 We appreciate commenters insights and will consider further updates to the payment rates as needed in future rulemaking. Comment: All commenters supported our proposal to revise the code descriptors C7900 and C7901 to remove the word ``initial.'' Response: We thank commenters for their support. Comment: One commenter, in response to CMS's request for comment on the HCPCS codes C7900-7902, stated that because the nomenclature and minutes in these codes are similar to other HCPCS codes, the commenter would support keeping the codes as currently written. Response: We thank the commenter for this input. Comment: One commenter encouraged CMS to clearly define a beneficiary's home as broadly as possible, in recognition that not all beneficiaries own, rent, or occupy a space that might traditionally be considered a ``home.'' This commenter points out that shelters, tents, parked vehicles, and other settings may well be considered a ``home'' to some or might offer a safe environment that is necessary for the beneficiary to openly engage with their clinician during a mental health disorder, or other, visit. Response: We appreciate commenter's suggestion and agree that one's home can cover a wide breadth of settings and arrangements. As we have previously explained, our definition of ``home,'' both in general and in terms of a mental healthcare delivery site, is broad and includes temporary lodging such as hotels and homeless shelters (86 FR 65048 and 65049). Comment: One commenter stated that the new remote mental health services are not fully understood by many providers and therefore not utilized as often as they could be. The commenter expressed concern that there will be significant confusion in the community between these services (which are sometimes used to bill for remote IOP services) and the new IOS services covered by Medicare. The commenter requests that CMS issue informational materials to smaller rural providers (like CAHs) to help them to understand the circumstances under which each service is appropriate and how each option would help them to meet the needs of their patient populations. Response: We appreciate the commenter's suggestion and will consider the creation of additional informational materials related to remote mental health services. Comment: One commenter emphasized the importance of CMS providing explicit billing guidance when clinicians in hospitals furnish telehealth services to patients in their homes. The commenter requested that CMS confirm the appropriate billing and payment for telehealth services when the clinician is in the hospital and the patient is in the home and asked several specific billing questions. Response: We direct the commenter to the CY 2024 PFS final rule for specific information relating to billing for telehealth services furnished to patients in their homes. We will consider additional sub- regulatory clarifications, as needed, in the future. Comment: One commenter emphasized that remote monitoring tools must play a central role in CMS's efforts to make its OPPS more efficient and effective and encouraged CMS to fully support the use of remote monitoring (both physiologic and therapeutic) through its OPPS policies. This commenter also requested that CMS ensure that critical access hospitals (CAHs) and REHs be able to provide services via the most appropriate and accessible modality, whether live voice/video or asynchronous modalities, including remote monitoring. The commenter [[Page 81874]] argued that CAHs and REHs should enjoy the same fee-for-service carve out that FQHCs and RHCs already enjoy for Chronic Care Management (CCM), Transitional Care Management (TCM), and Behavioral Health Integration (BHI) services. The commenter urged CMS to act to support the use of Remote Patient Monitoring (RPM) and Remote Therapeutic Management (RTM) by CAHs and REHs. Finally, the commenter notes that CMS has proposed to provide new support for RPM and RTM to FQHCs and RHCs, and requests that the OPPS rules provide similar support for CAHs and REHs. Response: We appreciate the commenter's input and recommendations with respect to remote monitoring tools and we will consider them for future rulemaking. After consideration of the public comments we received, we are finalizing, without modification, our proposal to create a new, untimed, HCPCS C-code, specifically, C7903, describing group therapy and to assign that code to an APC based on the facility payment amount for a clinically similar service, CPT code 90853 (Group psychotherapy (other than of a multiple-family group)) under the PFS. We are also finalizing our proposal to revise the code descriptors for HCPCS codes C7900 and C7901 to remove the word ``initial'' and HCPCS code C7902 to limit billing with HCPCS code C7901.

2. Periodic In-Person Visits

In the CY 2023 OPPS final rule with comment period (87 FR 72017), we finalized a requirement that payment for mental health services furnished remotely to beneficiaries in their homes using telecommunications technology may only be made if the beneficiary receives an in-person service within 6 months prior to the first time the hospital clinical staff provides the mental health services remotely; and that there must be an in-person service without the use of telecommunications technology within 12 months of each mental health service furnished remotely by the hospital clinical staff. We also finalized that we would permit exceptions to the requirement that there be an in-person service without the use of communications technology within 12 months of each remotely furnished mental health service when the hospital clinical staff member and beneficiary agree that the risks and burdens of an in-person service outweigh the benefits of it. We stated that exceptions to the in-person visit requirement should involve a clear justification documented in the beneficiary's medical record including the clinician's professional judgement that the patient is clinically stable and/or that an in-person visit has the risk of worsening the person's condition, creating undue hardship on the person or their family, or would otherwise result in disengaging with care that has been effective in managing the person's illness. We also finalized that hospitals must document that the patient has a regular source of general medical care and has the ability to obtain any needed point of care testing, including vital sign monitoring and laboratory studies. We finalized that these requirements would not go into effect until the 152nd day after the PHE for COVID-19 ends to maintain consistency with similar policies implemented for professional services paid under the PFS, and for RHCs/FQHCs (87 FR 72018). Section 4113(d) of the Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328), extended the delay in implementing the in-person visit requirements until January 1, 2025, for both professionals billing for mental health services via Medicare telehealth and for RHCs/FQHCs furnishing remote mental health visits. As previously stated, we believe it is important to maintain consistent requirements for these policies across payment systems; therefore, we proposed to delay the in-person visit requirements for mental health services furnished remotely by hospital staff to beneficiaries in their homes until January 1, 2025. The following is a summary of the comments we received and our responses to those comments. Comment: All commenters supported our proposal to delay the in- person requirements and the majority of those commenters requested that CMS work with Congress to eliminate the in-person requirements altogether. These commenters stated that the in-person requirements should be eliminated because the requirements are arbitrary and not based upon any clinical guidelines or evidence, they create logistical hurdles for patients and providers, they perpetuate stigma related to receiving mental health care, they are problematic for those in rural communities and those with inconsistent transportation accessibility, remote mental health services were overwhelmingly successful during the PHE when there were no in-person visit requirements, and clinicians, rather than the government, should make the determination of the need for an in-person visit on a patient-by-patient basis. Response: We thank commenters for their support and appreciate their concerns related to the in-person requirements. As acknowledged by commenters, Congressional legislation would be required to eliminate these requirements. Comment: One of these commenters requested that in future rulemaking CMS consider changing the in-person visit requirements to allow a broader array of practitioners to fulfill the in-person obligation. Another commenter requested that CMS implement a broad exception to the in-person visit requirements criteria based on clinical discretion, as well as an expansive view of the types of in- person visits that can meet the requirements. Response: We thank commenters for their suggestions and will take them into consideration for future rulemaking. We note, however, that in the CY 2023 final OPPS rule (87 FR 72017), we finalized an exception to the requirement that there be an in-person service within 12 months of each remotely furnished mental health service. This exception may be exercised when the hospital clinical staff member and beneficiary agree that the risks and burdens of an in-person service outweigh the benefits of it and a clear justification for the exception is documented in the beneficiary's medical record, including the clinician's professional judgement that the patient is clinically stable and/or that an in-person visit has the risk of worsening the person's condition, creating undue hardship on the person or their family, or would otherwise result in disengaging with care that has been effective in managing the person's illness. Hospitals must also document that the patient has a regular source of general medical care and has the ability to obtain any needed point of care testing, including vital sign monitoring and laboratory studies. After consideration of the public comments we received, we are finalizing, without modification, our proposal to delay the in-person visit requirements for mental health services furnished remotely by hospital staff to beneficiaries in their homes until January 1, 2025.

3. Payment for Outpatient Therapy Services, Diabetes Self-Management

Training, and Medical Nutrition Therapy When Furnished by Hospital Staff to Beneficiaries in Their Homes Through Communication Technology The CAA, 2023 extended most flexibilities for Medicare telehealth services, including retention of physical and occupational therapists and speech-language pathologists as telehealth distant site practitioners, through the end of CY 2024. In the CY 2024 PFS proposed rule, we proposed to continue [[Page 81875]] to make payment for outpatient therapy (physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP)) services, Diabetes Self-Management Training (DSMT), and Medical Nutrition Therapy (MNT) when furnished via telehealth by qualified employed staff of institutional providers through the end of CY 2024. We note that the proposal includes outpatient therapy, DSMT, and MNT services furnished via telehealth by staff of hospital outpatient departments. For further discussion, please see the CY 2024 PFS final rule. The following is a summary of the comments we received and our responses to those comments. Comment: All commenters supported our proposal to make payment for outpatient therapy, DSMT, and MNT when furnished via telehealth by qualified employed staff of institutional providers, including staff of hospital outpatient departments, through the end of 2024. One commenter stated that the extension would provide the flexibility needed to offer these outpatient therapy services to patients, especially those who have difficulty traveling to a hospital and otherwise would not have access to these critical services. Another commenter opined that enabling Medicare beneficiaries to engage with their hospital's dietary/nutrition staff from the comfort of their homes allows more frequent and productive communication that helps ensure patients persevere through the difficult dietary and lifestyle changes necessary to manage endemic chronic conditions associated with obesity and malnutrition alike, diabetes in particular. The commenter further stated that permitting hospitals to bill for these services delivered via telehealth helps ensure their availability, especially in rural communities where the local hospital may be the only available provider. Another commenter stated that it finds the inclusion of these therapists as eligible telehealth provider types to be particularly representative of CMS's stated goals of building in health equity and access measures to its program offerings. Response: We thank commenters for their support and note that additional comments on the proposal to make payment for PT, OT, SLP, DSMT, and MNT when furnished via telehealth by qualified employed staff of institutional providers, including staff of hospital outpatient departments, through the end of 2024 are discussed in the CY 2024 PFS final rule. Comment: One commenter requested that CMS provide billing instructions to hospitals about how PT, OT, SLP, DSMT, and MNT therapists are allowed to furnish rehabilitation and that hospitals can receive Part B MPFS payment. Response: We direct the commenter to the CY 2024 PFS final rule for specific information relating to billing for telehealth services furnished to patients in their homes. We will consider additional sub- regulatory clarifications, as needed, in the future. We refer readers to the CY 2024 PFS final rule for details relating to the final policy for payment for outpatient therapy (PT, OT, and SLP) services, DSMT, and MNT when furnished via telehealth by qualified employed staff of institutional providers, including staff of hospital outpatient departments, through the end of CY 2024.

1. Background

Section 1862(a)(12) of the Act generally precludes payment under Medicare Parts A or B for any expenses incurred for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth. (Collectively here, we will refer to ``the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth'' as ``dental services.'') In the CY 2023 Physician Fee Schedule (PFS) final rule (87 FR 69663), we explained that we believe there are instances where dental services are so integral to other medically necessary services that they are not in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth within the meaning of section 1862(a)(12) of the Act. Rather, such dental services are inextricably linked to the clinical success of an otherwise covered medical service, and therefore, are instead substantially related and integral to that primary medical service. To provide greater clarity to our current policies and respond to issues raised by interested parties, in the CY 2023 PFS final rule, we finalized: (1) a clarification of our interpretation of section 1862(a)(12) of the Act to permit payment for dental services that are inextricably linked to, and substantially related and integral to the clinical success of, other covered medical services (hereafter in this discussion, ``inextricably linked to other covered services''); (2) clarification and codification of certain longstanding Medicare Fee- For-Service (FFS) payment policies for inextricably linked dental services; (3) that, beginning for CY 2023, Medicare Parts A and B payment can be made for certain dental services inextricably linked to Medicare-covered organ transplant, cardiac valve replacement, or valvuloplasty procedures; (4) for CY 2024, that Medicare Part A and B payment can be made for certain dental services inextricably linked to Medicare-covered services for treatment of head and neck cancers; and (5) beginning for CY 2023, the establishment of a process to submit for our consideration and review additional dental services that are inextricably linked to other covered medical services (87 FR 69670 and 69671). The CY 2023 PFS final rule specified that Medicare payment for these dental services may be made regardless of whether the services are furnished in an inpatient or outpatient setting. We directed readers to the CY 2023 PFS final rule (87 FR 69663 through 69688) for a full discussion of these policies as well as to the CY 2024 PFS proposed rule for proposals related to dental services. In the CY 2023 PFS final rule, CMS identified various examples of HCPCS codes, mostly Current Dental Terminology (CDT[supreg]) codes, that could be used to describe the types of dental services identified in the CY 2023 PFS final rule for which Medicare payment can be made when coverage and payment policy requirements are met (87 FR 69667). We refer readers to the PFS Relative Value Files that are released quarterly on the CMS website for a comprehensive list of HCPCS codes, including D-codes, that may be payable under the PFS, available at https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched/pfs-relative-value-files. We explained that the policies adopted in the CY 2023 PFS final rule allow payment for certain dental services performed in outpatient settings. However, the current dental codes assigned to APCs for CY 2023 do not fully describe the dental services that may be inextricably linked to covered medical services and payable under Medicare Part B. Specifically, for the OPPS for CY 2023, only 57 CDT codes are assigned to APCs and payable under the OPPS when coverage and payment conditions are met. In addition to the small number of CDT codes assigned to APCs for CY 2023, there is also a limited number of CPT codes that may describe dental services, including CPT code 41899 (Unlisted px dentalvlr strux), that are currently assigned to APCs and payable under the OPPS. In the CY 2023 OPPS/ASC final rule with comment period, we created HCPCS code G0330 to describe facility [[Page 81876]] services for dental rehabilitation procedure(s) furnished to patients who require monitored anesthesia (e.g., general, intravenous sedation (monitored anesthesia care)) and use of an operating room. We finalized this code based on extensive public comments expressing the need for a coding and payment mechanism to improve access to covered dental procedures under anesthesia, especially dental rehabilitation procedures, an issue that commenters to the CY 2023 OPPS proposed rule explained is caused by barriers to securing sufficient operating room time to furnish these services. We further noted that HCPCS code G0330 must only be used to describe facility fees for dental rehabilitation services that meet Medicare payment and coverage requirements as interpreted in the CY 2023 PFS final rule. We explained that HCPCS code G0330 cannot be used to describe or bill the facility fee for noncovered dental professional services. We assigned HCPCS code G0330 to APC 5871 (Dental Procedures) for CY 2023. We directed readers to the CY 2023 OPPS/ASC final rule with comment period for a full discussion on HCPCS code G0330 (87 FR 71882 and 71883). For CY 2024, we proposed to continue to assign HCPCS code G0330 to APC 5871 (Dental Procedures). Comment: We received several comments requesting clarification on the billing of HCPCS code G0330 in light of our proposal to price additional dental codes. Commenters stated that CMS should provide guidance as to whether HCPCS code G0330 should also be reported when one or more of the 229 dental codes are performed in an operating room under anesthesia. A few commenters asked whether G0330 should be billed under the OPPS similarly to how we proposed for the code to be billed when the service is performed in an ASC setting. Response: We appreciate the opportunity to provide clarification regarding billing of HCPCS code G0330 under the OPPS. Under the OPPS, HCPCS code G0330 is payable without requiring the billing of any other code on the same day, so long as the service performed meets all Medicare coverage and payment requirements. We are clarifying that providers should bill any other more specific CPT and/or CDT codes assigned to APCs that describe the service performed, instead of HCPCS code G0330, whenever possible. HCPCS code G0330 should only be billed when no other, more specific code is available to describe the service performed. For instance, if a dentist performs a prophylactic cleaning (CPT code D1110), several imaging services (e.g., D705-D709), and alveoloplasty with extraction (D7310), each of these codes are assigned to APCs, and, therefore, even if the services meet the description of HCPCS code G0330, hospital outpatient departments should only bill the more specific codes without HCPCS code G0330. We believe that as we continue to price additional codes describing dental services, the situations where it is necessary to bill HCPCS code G0330 will be increasingly limited. However, we believe HCPCS code G0330 is still necessary to fill the need for a billing and payment mechanism for dental rehabilitation services performed under monitored anesthesia in an operating room that meets Medicare coverage and payment requirements, but has not been assigned to an APC. Finally, the clarification regarding billing of HCPCS code G0330 provided here only applies to billing and payment under the OPPS. For information regarding the billing and payment for HCPCS code G0330 in the ASC setting, we refer readers to our discussion on this issue in section XIII.D of this final rule with comment period. Comment: We received several comments expressing concern over the impact of the proposed payment rate for HCPCS code G0330 for CY 2024. One commenter requested that we recalculate the payment rate for the APC. Another commenter stated that because the proposed G0330 payment rate for HCPCS code G0330 is 45 percent lower than the CY 2023 payment rate, and even lower for the ASC payment, the payment rate may be insufficient in light of specialized dental equipment and personnel required to furnish these services in hospital outpatient departments and ASCs. Another commenter stated that the inadequacy of the proposed payment rates for HCPCS code G0330 for both hospital and ASC settings is likely to stymie use of the code. Several commenters urged CMS to not finalize our proposal to continue to assign HCPCS code G0330 to APC 5871 due to concerns over the APC's payment rate. Some commenters requested that CMS finalize an APC reassignment for HCPCS code G0330 from APC 5871 to APC 5164 (Level 4 ENT Procedures) with a proposed payment rate of $3,087.88 for CY 2024. One commenter stated that reassignment to APC 5164 would be consistent with available cost and charge data for dental procedures likely to be reported using HCPCS code G0330. To support their request for reassignment to APC 5164, commenters stated that prior to CMS's establishment of HCPCS code G0330, these same dental rehabilitation procedures were reported using unlisted CPT code 41899, with a geometric mean cost of approximately $2,200, which is within the range of costs for procedures classified into APC 5164. Another commenter stated that CMS's proposal to allow for multiple procedure discounting for HCPCS code G0330 by proposing to assign status indicator ``T'' to the code would further lower the payment rate for services described by the code. Response: We thank the commenters for their input. First, we note that APC geometric mean costs can change from year to year as a result of data updates and policy changes. In this case, we proposed to assign 229 dental procedures to APCs, with many proposed for assignment to APC 5871, the same APC to which HCPCS code G0330 was proposed to be assigned. Additionally, we proposed to change the APC assignments of some codes that were previously paid under the OPPS based on clinical similarity, including codes describing dental imaging services. We also note, APC 5871 is an APC with a low volume of claims and, therefore, is more prone to volatility in its geometric mean cost and payment rate changes from year to year based on the claims data available for ratesetting. The proposed coding changes, as well as the fact that APC 5871 has a low volume of claims, resulted in an unintentional reduction to APC 5871's geometric mean cost and payment rate for CY 2024. As we explained in our proposal for CY 2024, we encountered various challenges in securing accurate cost information for the hospital outpatient setting for the dental codes we proposed to assign to APC payment rates. We believe that as utilization increases and we receive claims data on the codes that we proposed to assign to various APCs for CY 2024, we will make changes to APC assignments and APC groups, including considering creating additional APC levels and new clinical APCs in future rulemaking, based on clinical and resource needs. We reiterate that the proposed payment rate for the services assigned to the Dental Procedures APC was the result of our ratesetting process, which we apply consistently to set the payment rates for other clinical APCs. With that said, we are sympathetic to commenters' concerns regarding the reduction in the proposed payment rate for HCPCS code G0330 from CY 2023 to CY 2024, especially without having claims data for the code that would indicate that the proposed payment rate [[Page 81877]] is appropriate. Based on comments received stating that CPT code 41899 was used to describe the services currently described by HCPCS code G0330 prior to the code's effective date of January 1, 2023, we analyzed the available claims data for surgical claims for CPT code 41899 in CY 2021 to get a benchmark for the geometric mean costs of services that are described by HCPCS code G0330. While CPT code 41899 is an unlisted code describing unlisted procedures on the dentoalveolar structures that may or may not be surgical in nature and performed under the same conditions as described by HCPCS code G0330, we ran a study to isolate the claims performed with monitored anesthesia codes to more closely mimic the conditions required for services billed under HCPCS code G0330. Based on this analysis, we believe that the proposed APC assignment for HCPCS code G0330 for CY 2024 would be inappropriate in terms of estimated resource costs. Therefore, for CY 2024, we are not finalizing the APC assignment of HCPCS code G0330 to APC 5871 as proposed. Although we believe isolating the surgical claims gives us a better idea of the geometric mean costs of HCPCS code G0330, we also believe that the approximation using surgical services billed with CPT code 41899 will not be as accurate as the claims information we will receive for HCPCS code G0330 in future years. We also note the crosswalk to CPT code 41899 is not a perfect comparator given that it is an unlisted code, which, per our billing instructions, should only be used when there is no other more specific code available. Therefore, we will determine whether the APC assignment we are finalizing for HCPCS code G0330 is appropriate based on claims data received in future years and consider further APC assignment changes in future rulemaking. However, based on the comments received, the fact that we do not have existing claims data for HCPCS code G0330 at this time, and our analysis of surgical claims using CPT code 41899, which demonstrate that the geometric mean costs for surgical claims for CPT code 41899 are notably higher than the proposed payment rate for procedures assigned to APC 5871 for CY 2024, we believe reassigning HCPCS code G0330 from APC 5871 to APC 5164 is appropriate for CY 2024. After consideration of the public comments we received, we are finalizing an APC reassignment for HCPCS code G0330 from APC 5871 to APC 5164 with status indicator ``J1'' for CY 2024. We refer readers to Addendum B to this final rule with comment period rule for the final CY 2024 APC assignment and associated payment rate for HCPCS code G0330. Addendum B is available via the internet on the CMS website. We also refer readers to Addendum D1 for a definition of status indicators including ``J1.''

2. OPPS Payment for Additional Dental Codes Beginning in CY 2024

To ensure that dental services can be paid under the OPPS when consistent with the policies and clarifications included in the CY 2023 PFS final rule, we proposed to assign additional dental codes to APCs for CY 2024. Specifically, for CY 2024, we proposed to assign 229 additional dental codes to clinical APCs to enable them to be paid for under the OPPS when payment and coverage requirements are met. We explained that assigning additional dental codes to clinical APCs would result in greater consistency in Medicare payment for different sites of service and help ensure patient access to dental services for which payment can be made when performed in the hospital outpatient setting. Prior to detailing our proposals, we noted two things for readers' awareness. First, OPPS payment will only be made for a dental code that we proposed to assign to an APC for CY 2024 if it is among the types of dental services for which payment can be made as described in the regulation at Sec. 411.15(i)(3)(i). As we have consistently stated in past rules (87 FR 71879) and quarterly change requests to assign new codes to APCs (see, e.g., Pub 100-04 Medicare Claims Processing, Transmittal 11937), the fact that a drug, device, procedure or service is assigned a HCPCS code and a payment rate under the OPPS does not imply coverage by the Medicare program, but indicates only how the product, procedure, or service may be paid if covered by the program. Medicare Administrative Contractors (MACs) determine whether a drug, device, procedure, or other service meets all program requirements and conditions for coverage and payment. Accordingly, we emphasize that HOPDs would only receive payment for a dental service assigned to an APC when the appropriate MAC determines that the service meets the relevant conditions for coverage and payment. Second, we anticipate that we would continue to assess our policies for OPPS payment for dental services in future rulemaking. We believe that as we collect claims data, gather input from the public and interested parties, and learn more about the services performed in the HOPD setting, we will be able to make more informed decisions regarding payment rates, APC assignments, and status indicators for dental services. The dental services for which we proposed APC assignments in the CY 2024 OPPS/ASC proposed rule are those dental services described in the CY 2023 PFS final rule for which Medicare Part B payment can be made when they are inextricably linked to other covered services. Based on the dental services identified in that final rule, we generated a list of codes that describe those services for which we believed we needed to propose APC assignments to ensure payment is available under the OPPS. To generate this list, we reviewed the dental codes that were specifically listed as examples of payable dental services in the CY 2023 PFS final rule (87 FR 69676). We also reviewed the clinical vignettes provided in the CY 2023 PFS final rule to identify whether there are other dental codes in addition to the dental code examples already identified for which we should propose APC assignments. The CY 2023 PFS final rule amended Sec. 411.15(i)(3)(i) to allow for payment under Medicare Part A and Part B for dental services, furnished in an inpatient or outpatient setting, that are inextricably linked to, and substantially related and integral to the success of, certain other covered medical services, including, but not limited to: (1) dental or oral examination as part of a comprehensive workup prior to a Medicare covered organ transplant, cardiac valve replacement, or valvuloplasty procedures; and the necessary diagnostic and treatment services to eliminate an oral or dental infection prior to, or contemporaneously with, the organ transplant, cardiac valve replacement, or valvuloplasty procedure; (2) reconstruction of a dental ridge performed as a result of, and at the same time as, the surgical removal of a tumor; (3) the stabilization or immobilization of teeth in connection with the reduction of a jaw fracture, and dental splints only when used in conjunction with covered treatment of a covered medical condition such as dislocated jaw joints; and (4) the extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease. For CY 2024, we established that Medicare Parts A and B payment may also be made for dental services, such as dental examinations, including necessary treatments, performed as part of a comprehensive workup prior to treatment for head and neck cancers. We included a proposal in the CY 2024 PFS proposed rule to codify this example [[Page 81878]] under Sec. 411.15(i)(3)(i). We identified dental services described in the regulation at Sec. 411.15(i)(3)(i) and those that may be part of a comprehensive workup prior to treatment for head and neck cancers that could be payable under the OPPS if payment and coverage requirements are met. For example, consistent with Sec. 411.15(i)(3)(i)(A), which describes dental or oral examinations as part of a comprehensive workup prior to a Medicare covered organ transplant, cardiac valve replacement, or valvuloplasty procedure, we identified several codes describing dental examinations for which we proposed APC assignments (e.g., D0120, D0140, D0150, D0160, D0170, D0180, D0191, D0171). Section 411.15(i)(3)(i)(C) describes services for the stabilization or immobilization of the teeth in connection with the reduction of a jaw fracture, and dental splints only when used with a covered treatment of a covered medical condition. We identified an additional 16 dental codes (e.g., D7670-D7671; D4322; D5988) that we believe identify these services and for which we proposed APC assignments. While it is appropriate for CMS to assign certain dental codes to APCs for payment under the OPPS, we explained that we do not believe that every dental code should be assigned to an APC and made payable under the OPPS. For instance, there are services described by CDT codes that may already be described by existing CPT codes assigned to clinical APCs. When this is the case, we proposed that HOPDs would use the existing CPT codes to bill for the services performed. We also did not propose APC assignments for all dental codes, even if they describe dental services that are payable consistent with the policies and clarifications included in the CY 2023 PFS final rule. This is because under our regulation at 42 CFR 419.22, the following services are not paid under the OPPS (except when packaged as part of a bundled payment): physician services that meet the requirements of 42 CFR 415.102(a); nurse practitioner or clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act; physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act; and services of an anesthetist as defined in Sec. 410.9. We note that dentists are considered physicians for purposes of Medicare payment policy, including this regulation. There are a number of existing CDT codes that describe the professional services of dentists that could be paid under the PFS (e.g., D9990-D9997), but that we do not believe are appropriate for payment under the OPPS. Therefore, we did not propose to assign CDT codes that describe professional services of dentists and other dental professionals to clinical APCs. Finally, there are dental codes that we believe would not meet our current interpretation of dental services that may be inextricably linked to other covered medical services. For instance, there are CDT codes that describe removable prosthodontic procedures, including codes that describe complete or partial denture procedures (e.g., D5110; D5120; D5211-D5214). Because denture procedures are not covered medical procedures under Medicare, we did not propose to assign any dental codes describing denture procedures to clinical APCs. In sum, in consultation with medical experts, we identified 229 dental codes as appropriate for payment under the OPPS when relevant conditions for payment and coverage are met. In addition to the dental codes already assigned to APCs, we proposed to assign the 229 additional dental codes listed in Table 110 below to various clinical APCs for CY 2024: BILLING CODE 4150-28-P [[Page 81879]] [GRAPHIC] [TIFF OMITTED] TR22NO23.151 [[Page 81880]] [GRAPHIC] [TIFF OMITTED] TR22NO23.152 [[Page 81881]] [GRAPHIC] [TIFF OMITTED] TR22NO23.153 [[Page 81882]] [GRAPHIC] [TIFF OMITTED] TR22NO23.154 [[Page 81883]] [GRAPHIC] [TIFF OMITTED] TR22NO23.155 [[Page 81884]] [GRAPHIC] [TIFF OMITTED] TR22NO23.156 We requested comments on the list of 229 dental codes that we proposed to assign to APCs for OPPS payment for CY 2024. We also requested comments on any additional dental codes that may fall within the scope of dental services for which payment is permitted as explained in the CY 2023 PFS final rule and provided in Sec. 411.14(i)(3)(i), and for which payment should be made available under the OPPS when payment and coverage requirements are met. Comment: Commenters supported our proposal to assign 229 dental codes to various APCs and considered it a positive step towards increased access to dental services for Medicare beneficiaries. Commenters requested that CMS continue to expand Medicare coverage of dental services. Many commenters expressed support for the dental proposals regarding Medicare payment for dental services in the CY 2024 PFS proposed rule. Other commenters suggested additional covered medical services for which they believe Medicare should pay for dental care. Response: We appreciate the support from commenters but want to make a few clarifications on the policy proposal. First, we are clarifying that our proposal to assign additional dental codes to APCs is not a coverage determination. Billed services will only be paid under the OPPS when the applicable payment and coverage requirements are met. That said, we appreciate commenters' support for our proposal to assign additional dental codes to APCs, to enable payment when Medicare coverage and payment requirements are met. The comments received on the payment proposals in the CY 2024 PFS proposed rule are outside of the scope of this final rule with comment period. We direct readers to the discussion of dental services in the CY 2024 PFS proposed and final rules (88 FR 52371 through 52384) for more information on Medicare payment for dental services. Comment: We received one comment requesting CMS assign an additional 18 CDT codes to APCs for CY 2024. The commenter explained that it would be appropriate to assign the 18 additional codes to APCs because they may be necessary to treat oral or dental infections for patients with certain acute conditions. Response: We thank the commenter for their suggestion. We reviewed the list of codes recommended and believe some of the codes commenters suggested identify services that would be payable consistent with the dental payment policies specified in the CY 2023 PFS final rule, provided conditions for payment and coverage are met. Specifically, we believe some of the codes recommended for APC assignment describe dental services that may be considered medically necessary diagnostic and treatment services immediately necessary to eliminate or eradicate an oral or dental infection prior to, or contemporaneously with, certain Medicare-covered medical services specified in the CY 2023 PFS final rule, including organ transplant, cardiac valve replacement, or valvuloplasty procedures (42 CFR 411.15). The recommended codes that we believe are consistent with the dental payment policies specified in the CY 2023 PFS final rule are the following: CDT codes D7251 (Coronectomy), D7280 (Exposure of unerupted tooth), D7410 (Rad exc lesion up to 1.25 cm), D7411 (Excision benign lesion>1.25c), D7412 (Excision benign lesion compl), D7413 (Excision malig lesion<=1.25c), D7414 (Excision malig lesion>1.25cm), D7415 (Excision malig les complicat), D7440 (Malig tumor exc to 1.25 cm), D7441 (Malig tumor >1.25 cm), D7450 (Rem odontogen cyst to 1.25cm), D7451 (Rem odontogen cyst >1.25 cm), D7530 (Removal fb skin/areolar tiss), and D7540 (Removal of fb reaction). We note that Medicare would only pay for these services when all payment and coverage requirements are met but we are finalizing APC assignments for these codes to make payment available in circumstances when those requirements are met. We would need additional information on how certain codes the commenter recommended for APC assignment, including CDT codes D7471 (Rem exostosis any site), D7283 (Place device impacted tooth), D7320 (Alveoplasty w/o extraction), and D7321 (Alveoloplasty not w/extracts), are consistent with the dental payment policies provided in the CY 2023 PFS final rule, and will revisit the issue in future rulemaking. We refer readers to Addendum B to this final rule with comment period for the finalized CY 2024 APC assignments and associated payment rates for the dental codes. Addendum B is available via the internet on the CMS website. Comment: Some commentors requested additional information regarding how CMS arrived at its dental proposal. One commenter stated that CMS did not specify the criteria used to determine which dental procedures to assign to APCs. Response: We thank the commenters for their feedback but disagree that we did not specify how we determined which dental procedures to assign to APCs for CY 2024. The dental services we proposed to assign to APCs in the CY 2024 OPPS/ASC proposed rule are those dental services described in the CY 2023 PFS final rule for which Medicare Part B payment can be made when they are inextricably linked to [[Page 81885]] other covered services. As we stated in our proposal, we generated a list of codes to assign to APCs based on the specific dental services and clinical vignettes provided in the CY 2023 PFS final rule. This list was reviewed by our medical experts to ensure that the codes identified would be appropriate for payment under the OPPS when relevant conditions for payment and coverage are met. After consideration of the public comments we received, we are finalizing our initial list of proposed dental codes for assignment to clinical APCs as well as assigning additional dental codes to APCs for CY 2024. Specifically, we are assigning the following CDT codes to APCs for CY 2024: D7251, D7280, D7410, D7411, D7412, D7413, D7414, D7415, D7440, D7441, D7450, D7451, D7530, and D7540. Table 111 contains the list of dental codes assigned to a clinical APC for CY 2024. We note that the assignment of these codes to APCs is not a determination of Medicare coverage or payment. We refer readers to Addendum B to this final rule with comment period for the finalized CY 2024 APC assignments and associated payment rates for the dental codes. Addendum B is available via the internet on the CMS website. BILLING CODE 4150-28-P [[Page 81886]] [GRAPHIC] [TIFF OMITTED] TR22NO23.157 [[Page 81887]] [GRAPHIC] [TIFF OMITTED] TR22NO23.158 [[Page 81888]] [GRAPHIC] [TIFF OMITTED] TR22NO23.159 [[Page 81889]] [GRAPHIC] [TIFF OMITTED] TR22NO23.160 [[Page 81890]] [GRAPHIC] [TIFF OMITTED] TR22NO23.161 [[Page 81891]] [GRAPHIC] [TIFF OMITTED] TR22NO23.162 BILLING CODE 4150-28-C

3. APC Assignments for Additional Dental Codes

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. Accordingly, when considering the appropriateness of an APC assignment for a code, we consider the clinical characteristics and resource costs of the service described by the code compared to other services in a clinical APC. Consistent with our existing processes, we were able to crosswalk many of the dental codes to existing CPT codes assigned to APCs for purposes of assessing clinical similarity. For instance, we crosswalked certain tissue graft procedures (e.g., D4270) to CPT code 41870 (gum graft). Because both are surgical procedures where gum tissue near the area of recession is used to cover and protect the exposed tooth root, the codes are clinically similar and we believe are appropriate for grouping within the same clinical APC (that is, APC 5163 (Level 3 ENT Procedures)). We also found clinical similarities between several dental imaging services and the services assigned to the various levels of the Imaging without Contrast APC series (that is, APCs 5521 (Level 1, Imaging without Contrast); 5522 (Level 2, Imaging without Contrast); and 5523 (Level 3, Imaging without Contrast)). For example, we crosswalked D0210 (Intraor complete film series) to CPT code 70320 (Full mouth x-ray of teeth) and therefore proposed to assign D0210 to APC 5523 based on the crosswalk analysis. With regard to resource similarity, because the 229 dental codes we proposed to assign to APCs for CY 2024 were not previously paid under the OPPS, we do not have existing claims information to inform proposed APC placements based on resource costs. We considered gathering cost information from several non-Medicare data sources to aid in assigning the dental codes to APCs. For instance, we considered requesting cost information from the Department of Veterans Affairs (VA). However, the VA's dental reimbursement rates are proprietary and are not publicly available. We also considered requesting data from State Medicaid agencies but found the available data too inconsistent and limited to be useful given that payment rates vary between states. Additionally, not every State Medicaid Agency provides the same dental benefits, so not every state would have cost information for each of the dental codes we propose for OPPS payment. Lastly, while many State Medicaid Agencies provide robust information on the dental benefits covered for Medicaid beneficiaries in their state, the fee schedules published by State Medicaid Agencies most likely include payments to practitioners only and would not be informative for our purposes of assigning payment rates under the OPPS. Finally, we considered analyzing private insurance claims from third-party databases but determined that the [[Page 81892]] cost information available would also not be relevant for OPPS ratesetting. For example, because most dental services covered by private insurance are provided in the office setting, there is a very limited number of claims that would be relevant for OPPS ratesetting purposes. Of the limited dental claims performed in the hospital setting, we learned that many of the dental services are performed in combination with several other services; therefore, it would be extremely difficult to isolate the facility fee payment for the dental services performed. Although specific cost information is informative for making proposed APC assignments, it is not essential. For example, each quarter, after consultation with clinical experts, CMS assigns new CPT codes for which no cost information is available to APCs using crosswalk code analyses. Similar to our process for assigning new codes to APCs, we used a crosswalk code analysis and consulted with clinical experts to propose appropriate APC assignments for the 229 dental codes. In our conversations with the clinical experts, we discussed the clinical aspects of each dental service and learned about the resources, including supplies, used to perform each dental service, in order to more accurately identify crosswalk codes and propose APC assignments for them. We solicited comments regarding the proposed APC assignments for the dental codes for CY 2024. We refer readers to Addendum B to the CY 2024 OPPS/ASC proposed rule for the proposed CY 2024 APC assignments and associated payment rates for the dental codes. Addendum B is available via the internet on the CMS website. Comment: One commenter asked for clarification on which crosswalks were used to determine the proposed APC assignments, and for data validation on these crosswalks. The commenter provided two examples of proposed APC assignments that they believed did not reflect relative clinical complexity and resource use. Specifically, the commenter disagreed with the proposed APC assignment for CDT code D4240 (Gingival flap proc w/planin) because they believed that the clinical intensity, resource utilization, and supply costs for CDT code D4240 would be expected to be greater than CDT code D4210 (Gingivectomy/plasty 4 or mor), which was proposed to be assigned to a higher paying APC. Similarly, the commenter disagreed with the proposed APC assignment for CDT code D7210 (Rem imp tooth w mucoper flp) because they believed that the clinical intensity, and resource use would be similar to those for CDT code D7310 (Alveoplasty w/extraction), which was proposed to be assigned to a higher paying APC. Response: We appreciate the opportunity to provide additional information on our proposed APC assignments for dental services for CY 2024. Our proposals for APC assignments for the 229 dental codes were made using a process that is consistent with our processes for assigning non-dental codes and services for which we do not have pricing information to clinical APCs. As we stated in our proposal, we do not yet have claims data or pricing information available for the dental codes we proposed to assign to APCs for CY 2024. As is our policy for all new HCPCS codes for which we lack pricing information, we proposed to assign the dental codes to existing APCs based on input from a variety of sources, including, but not limited to, review of the clinical similarity of the service to existing procedures including by using CPT crosswalk analyses, input from CMS medical advisors, and review of all other information available to us. The OPPS is a prospective payment system that provides payment for groups of services that share clinical and resource use characteristics. Therefore, we proposed to assign the dental codes to various APCs based on our evaluation of their clinical and resource similarities to other codes using the information available to us. Regarding releasing the crosswalks for all 229 dental codes we proposed to assign to APCs for CY 2024, it is not our policy to release crosswalks for every single code we assign to APCs in either our quarterly updates or in annual rulemaking. Additionally, as we have stated, CPT crosswalk analyses are just one method we use to assign codes to APCs for which we have no pricing information, and therefore, releasing CPT crosswalk codes would not fully explain our reasons for proposing to assign every dental code to a clinical APC. Regarding the specific examples of inaccurate proposed APC assignments and the explanations provided by the commenter regarding resource and clinical similarities to codes in different clinical APCs than proposed, we agree with the commenter's concerns. Therefore, based on the commenter's arguments explaining the clinical and resource similarities to codes assigned to other clinical APCs than what was proposed we will finalize APC assignments according to the commenter's suggestions. Comment: We received comments requesting that a dentist or dental specialist serve on the Advisory Panel on Hospital Outpatient Payment to be able to issue recommendations to CMS on dental issues brought forth to the Panel, including the appropriate APC assignments for dental services. Response: We welcome nominations for representatives of providers to serve on the Advisory Panel on Hospital Outpatient Payment through the MEARISTM module. We direct readers and interested parties to the CMS website for additional information regarding the purpose, responsibilities of the Advisory Panel on Hospital Outpatient Payment, and member requirements at: https://www.cms.gov/medicare/regulations-guidance/advisory-committees/hospital-outpatient-payment. Comment: We received a comment from an organization representing the interests of people with disabilities expressing concern that our CY 2024 dental proposal may have the impact of ultimately prohibiting people with disabilities, particularly those residing in rural communities or who are otherwise unable to access a hospital outpatient department, from getting the dental procedures they need for their health and wellbeing. Response: We appreciate the comment. It is unclear whether the commenter's concern was that the proposal to assign additional dental codes to APCs or the proposed payment rates for certain dental codes would have the negative effects described in their comment. Nonetheless, we take the concerns raised by the commenter seriously but reiterate that we believe our proposal to set payment rates for over 200 dental services, which would allow for payment under the OPPS when Medicare payment and coverage requirements are met, will improve access to dental services for Medicare beneficiaries, including beneficiaries with disabilities. As we stated in the CY 2023 PFS final rule (87 FR 69675), the policy changes for payment under Medicare Parts A and B for dental services that meet the conditions specified in that rule have the potential to advance health equity for people who are medically underserved. Finally, CMS will continue to consider how our dental policies may impact beneficiaries with disabilities. Comment: We received two comments requesting that we remain vigilant and aware of unintended consequences that may occur if we were to finalize the proposed APC assignments for dental codes in the CY 2024 OPPS proposed rule. One commenter stated that CMS should diligently monitor the impacts the proposed APC assignments would have on APCs. Another commenter [[Page 81893]] cautioned CMS that if the OPPS payment rate for dental services is higher than other settings of care, our policies may have the unintended effect of shifting procedures that have traditionally been done in a dentist's office to the hospital outpatient setting. The commenter encouraged CMS to ensure that we are not creating a financial incentive to shift dental care services to the hospital outpatient department. Response: We understand and appreciate the commenters' concerns and agree that the potential for higher payments in the hospital outpatient setting may incentivize providing dental care in the hospital outpatient department setting rather than dental offices. In an effort to control costs and promote more efficient care, our proposal for CY 2024 would package payment and implement multiple procedure discounting for almost every code that was proposed to be assigned to an APC. As we do every year, we will review the APC assignments for all services and items paid under the OPPS, including dental services, and make changes as appropriate. We anticipate that we will make adjustments in APC code assignments and APC groups to more accurately pay for dental services in future rulemaking based on claims data we collect. Finally, we encourage interested parties to continue to communicate their concerns and ideas with CMS so that we may address adverse incentives. Comment: We received one comment requesting additional changes to the proposed APC assignments for dental codes. The commenter submitted a list of over 40 dental codes for which they requested different APC assignments than the ones we proposed. The commenter included CPT crosswalks for some of the dental codes to justify their suggested APC assignment changes, but not all. The commenter also did not provide a justification or their reasoning for why their suggested APC assignments were appropriate. Response: We thank the commenter for their suggestions. However, based on the comment received, we do not have sufficient information to make the suggested APC assignment changes because minimal or sometimes no justification for the changes was provided. For example, additional information, including why a certain CPT crosswalk was chosen as well as the clinical or resource appropriateness of the suggested APC assignment change is necessary for us to assess the suggested APC assignments. After consideration of the public comments we received, we are finalizing our proposed APC assignments for the dental codes as proposed with slight modifications. Specifically, for CY 2024, we are reassigning CDT code D7210 from APC 5871 to APC 5163, and CDT code D4240 to APC 5164. We refer readers to Addendum B to this final rule with comment period for the finalized CY 2024 APC assignments and status indicators for the dental codes. Addendum B is available via the internet on the CMS website.

4. Packaged Payment and Associated Status Indicators for Dental Codes

For CY 2024, we proposed to package payments for dental services when they are performed with another covered dental or medical service to promote clinical resource efficiencies, a strategic goal of the OPPS. Given our understanding of the nature of dental practice and in consultation with our clinical experts, we explained that we believe packaged payments are appropriate for dental services paid under the OPPS. We noted that we are aware that it is common for several dental services to be performed together, or alongside other medical services, and submitted on one claim. Unlike medical specialties where often only one procedure is performed at a time, it is our understanding that it is common for a patient to undergo several surgical and non-surgical dental procedures on multiple teeth in one day, or for dental services to be performed contemporaneously with other medical services. For example, there are several non-invasive, non-surgical dental services, including a dental exam or X-ray, which would most likely be performed together with other more invasive dental services in the HOPD setting, rather than on their own. Because a dental exam or X-ray is likely to be performed in addition to other more invasive dental services in the HOPD setting, we stated we believe packaging payment for dental codes describing dental exams and X-rays (e.g., D0380-D0386) when performed with another service is appropriate and would further our strategic goal of encouraging hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. We explained that we also are aware that there are several dental services that are performed as part of a primary service, and therefore, we believe would also result in resource efficiencies if paid under the OPPS as a packaged payment. For example, CDT codes D3110 (pulp cap-direct (excluding final restoration)) and D3120 (pulp cap-indirect (excluding final restoration)) are typically performed as part of a restorative procedure (e.g., a crown or amalgam). Thus, we stated that we believe it is appropriate to propose to package payment for CDT codes D3110 and D3120 with payment for the associated restorative procedures. We believe our proposal to package payment for dental services under the OPPS is consistent with existing packaging payment principles in the OPPS. The OPPS regularly 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. We believe applying these principles to the furnishing of dental services in the OPPS is appropriate and would incentivize clinical resource efficiencies. In addition to proposing to package payment for dental services to promote clinical resource efficiencies, there are also several dental services that would nevertheless be packaged under our regulation at 42 CFR 419.2(b). For example, payment for dental services described by add-on codes, like CDT code D2953 (each addtnl cast post) would be packaged under the OPPS consistent with Sec. 419.2(b)(18). Therefore, we proposed to package payment for CDT code D2953 with the procedures with which it is performed. We refer readers to the regulation at Sec. 419.2(b) for a full list of items and services for which payment is packaged or conditionally packaged. For CY 2024, we proposed packaging payment for dental services under the OPPS by assigning the dental codes to packaged status indicators. We believe there are clinical resource efficiencies to be gained by packaging payments rather than separately paying for each dental service performed. We refer readers to Addendum B to the CY 2024 OPPS/ASC proposed rule for the proposed CY 2024 status indicators for the dental codes. Addendum B is available via the internet on the CMS website. For more information on all of the proposed status indicators for CY 2024, including explanations of the payment status for each proposed status indicator, we refer readers to Addendum D1 to the CY 2024 OPPS/ASC proposed rule. Comment: We received one comment supporting the proposal to assign ``N'' and ``Q1'' status indicators for certain dental services. The commenter stated that they believed the codes identified to be packaged with a primary service were appropriate. Response: We thank the commenter for their support of our proposal to [[Page 81894]] assign ``N'' and ``Q1'' status indicators to certain dental codes. Comment: We received one comment regarding finalizing proposed status indicator ``T'' for HCPCS code G0330. The commenter stated that since HCPCS code G0330 is used to report the performance of multiple procedures that otherwise would be separately billable, it is inappropriate to apply the multiple surgical procedure discount by assigning status indicator ``T'' to hospital dental rehabilitation claims. Response: For CY 2024, we are not finalizing the APC assignment for HCPCS code G0330 as proposed. Based on our discussion of the final policy in this final rule with comment period, we are assigning HCPCS code G0330 to APC 5164 with status indicator ``J1.'' As stated in Addendum D1 to this final rule with comment period, services that are assigned a status indicator ``J1'' are paid under the OPPS. All covered Part B services on the same claim as a service with status indicator ``J1'' are packaged with the primary ``J1'' on the claim, with certain exceptions. We direct readers to Addendum D1 to this final rule with comment period for more information on the ``J1'' status indicator. Comment: A few commenters stated that they did not support assigning status indicators that would package payments for any of the dental codes we proposed to assign to APCs due to concerns that packaged payments may not be appropriate for dental services and may result in lower payments. Response: We disagree with commenters and continue to believe that packaging payment for certain dental services is appropriate. As stated in our proposal, there are certain packaging principles that are applied to all services paid under the OPPS, whether dental or medical. Additionally, we believe packaging payments will promote clinical resource efficiencies. We direct readers to our discussion on packaged payments for dental services in this final rule with comment for more information. Comment: One commenter stated that there may be significant room for interpretation in terms of packaging. The commenter also stated they did not believe that when a dentist performs dental procedures described by add-on codes, like CPT code D2953 (each addtnl cast post), on the same patient that other dentists are similarly engaging in the same activity. Response: We believe that the commenter is trying to explain that they do not believe providing a single payment for multiple services, including those described by add-on codes, would be appropriate because when multiple services are performed by multiple dentists on the same patient, the dentists are furnishing separate services, which should be paid for individually. First, we are clarifying that the OPPS is the Medicare payment system for hospital outpatient department services, not for the services of individual physicians, dentists, or other practitioners. Medicare payment for physicians' services is made through the PFS to the physicians, health care practitioners, and other suppliers that furnish these services. Second, we reiterate that it is our policy to package payment for most add-on codes, whether dental or medical, as these are codes that describe a procedure or service always performed in addition to a primary service or procedure. Since whenever CPT code D2953 is performed, it would always be performed with a primary service, its payment would always be packaged even though it may not be furnished every time the primary service is performed. Finally, we direct the commenter to section XI ``CY 2024 Payment Status and Comment Indicators'' of this final rule with comment period for a discussion of the various status indicators, including the packaged status indicator ``N,'' used under the OPPS. The complete list of the final status indicators and their definitions is provided in Addendum D1 to this final rule with comment period. After consideration of the public comments we received, we are finalizing our proposal to package payment for certain dental services under the OPPS. We refer readers to Addendum B to this final rule with comment period for the finalized CY 2024 APC assignments and status indicators for the dental codes. Addendum B is available via the internet on the CMS website. In summary, we are finalizing the following dental policy changes for CY 2024. First, after consideration of the public comments we received, we are finalizing the proposed list of dental codes for assignments to APCs for CY 2024 as well as some of the additional codes commenters suggested we make payable under the OPPS when coverage and payment requirements are met. Specifically, in addition to the codes we proposed to assign to APCs for CY 2024, we are assigning the following additional CDT codes to APCs for CY 2024: D7251, D7280, D7410, D7411, D7412, D7413, D7414, D7415, D7440, D7441, D7450, D7451, D7530, and D7540. We note that the assignment of these codes to APCs is not a determination of coverage or Medicare payment. Second, we are finalizing our proposed APC assignments for the dental codes as proposed with slight modifications. Specifically, for CY 2024, we are assigning CDT code D7210 to APC 5163 and assigning CDT code D4240 to APC 5164, rather than finalizing their proposed APC assignments. Additionally, we are finalizing an APC reassignment for HCPCS code G0330 from APC 5871 to APC 5164 for CY 2024. We refer readers to Addendum B to this final rule with comment period for the finalized CY 2024 APC assignments and status indicators for the dental codes. Addendum B is available via the internet on the CMS website. Finally, we are finalizing our proposal to package payments for certain dental services under the OPPS. We refer readers to Addendum B to this final rule with comment period for the specific finalized CY 2024 APC assignments and status indicators for the dental codes. Addendum B is available via the internet on the CMS website.

F. Use of Claims and Cost Report Data for CY 2024 OPPS and ASC Payment

System Ratesetting Due to the PHE As described in section I.A of the CY 2024 OPPS/ASC proposed rule, section 1833(t) of the Act requires the Secretary to annually review and update the payment rates for services payable under the Hospital OPPS. Specifically, section 1833(t)(9)(A) of the Act requires the Secretary to review not less often than annually and to revise the groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) of the Act to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. When updating the OPPS payment rates and system for each rulemaking cycle, we primarily use two sources of information: the outpatient Medicare claims data and Healthcare Cost Report Information System (HCRIS) cost report data. The claims data source is the Outpatient Standard Analytic File, which includes final action Medicare outpatient claims for services furnished in a given calendar year. For the OPPS ratesetting process, our goal is to use the best available data for ratesetting to accurately estimate the costs associated with furnishing outpatient services and to set appropriate payment rates. Ordinarily, the best available claims data are the data from 2 years prior to the calendar year that is the subject of rulemaking. For the CY 2024 OPPS/ ASC [[Page 81895]] proposed rule ratesetting, the best available claims data would typically be the CY 2022 calendar year outpatient claims data processed through December 31, 2022. The cost report data source is typically the Medicare hospital cost report data files from the most recently available quarterly HCRIS file as we begin the ratesetting process. The best available cost report data used in developing the OPPS relative weights would ordinarily be from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking. For CY 2024 OPPS ratesetting, that would be cost report data from HCRIS extracted in December 2022, which would contain many cost reports ending in FY 2020 and 2021 based on each hospital's cost reporting period. As discussed in the CY 2022 OPPS/ASC final rule with comment period, the standard hospital data we would have otherwise used for purposes of CY 2022 ratesetting included significant effects from the COVID-19 PHE, which led to a number of concerns with using this data for CY 2022 ratesetting (86 FR 63751 through 63754). In section X.E of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190), we noted a number of changes in the CY 2020 OPPS claims data we would ordinarily have used for ratesetting, likely as a result of the PHE. These changes included overall aggregate decreases in claims volume (particularly those associated with visits); significant increases in HCPCS code Q3014 (Telehealth originating site facility fee) in the hospital outpatient claims; and increases in certain PHE-related services, such as HCPCS code C9803, which describes COVID-19 specimen collection, and services assigned to APC 5801 (Ventilation Initiation and Management). As a result of the effects, we observed from COVID-19 PHE-related factors in our claims and cost report data, as well as the increasing number of Medicare beneficiaries vaccinated against COVID- 19, which we believed might make the CY 2022 outpatient experience closer to CY 2019 rather than CY 2020, we believed that CY 2020 data were not the best overall approximation of expected outpatient hospital services in CY 2022. Instead, we believed that CY 2019 data, as the most recent complete calendar year of data prior to the COVID-19 PHE, were a better approximation of expected CY 2022 hospital outpatient services. Therefore, in the CY 2022 OPPS/ASC final rule with comment period, we established a policy of using CY 2019 claims data and cost reports prior to the PHE in ratesetting for the CY 2022 OPPS with certain limited exceptions, such as where CY 2019 data were not available (86 FR 63753 and 63754). For the CY 2023 OPPS proposed rule ratesetting, we conducted a review similar to the one we conducted for the CY 2022 OPPS ratesetting to determine the degree to which the effects of the COVID-19 PHE had continued or subsided in our claims data as well as what claims and cost report data would be appropriate for CY 2023 OPPS ratesetting. In general, we saw that the PHE had limited effect on the service and aggregate levels of volume as well as changes in the site of service of care, suggesting that, while clinical and billing patterns had not quite returned to their pre-PHE levels, they were beginning to do so. For the CY 2023 OPPS/ASC final rule, while the effects of the COVID-19 PHE remained at both the aggregate and service levels for certain services, as discussed in that final rule with comment period (87 FR 48795 through 48798) and in FY 2023 IPPS proposed rule (87 FR 28123 through 28125), we recognized that future COVID-19 variants may have potentially varying effects. Therefore, we explained that we believed it was reasonable to assume that there would continue to be some effects of the COVID-19 PHE on the outpatient claims that we use for OPPS ratesetting, similar to the CY 2021 claims data. As a result, we proposed and finalized the use of CY 2021 claims for CY 2023 OPPS ratesetting. We also used cost report data for the CY 2023 OPPS/ASC final rule (87 FR 72021) from the same set of cost reports we originally used in the CY 2021 OPPS/ASC final rule for ratesetting, which included cost reporting periods beginning in CY 2018 in most cases. We typically would have used the most updated available cost reports available in HCRIS in determining the CY 2023 OPPS/APC relative weights, which would have included cost reports with reporting periods that overlap with parts of CY 2020. However, noting that we observed significant impact at the service level when incorporating these cost reports into ratesetting and the effects on billing/clinical patterns, we finalized a policy to continue to use the same set of cost reports that we used in developing CY 2022 OPPS ratesetting. For CY 2024 OPPS rulemaking, we continue to observe some differences at the aggregate and service level volumes in the CY 2022 claims data, relative to the pre-PHE period. However, we believe that it is reasonable to assume that there will be minor variations as a result of the COVID-19 PHE in claims data we use for ratesetting for the foreseeable future. As we have found that the effects are less pronounced, even relative to CY 2021 claims data used in CY 2023 OPPS ratesetting, we anticipate that most of the changes we observe represent a moderate continued return to pre-PHE volume and ongoing changes in clinical practice. As a result, we believe the CY 2022 claims data are appropriate for setting CY 2024 OPPS rates. For CY 2024, we also evaluated the impact of using our standard update for cost reports. If we were to resume our typical process of using the most updated cost reports available, we would predominantly use cost report data from CY 2021, with some portion of the cost reports including cost reporting periods from prior years. While there are some differences compared to pre-PHE data, we generally observed limited impacts. Similar to the claims data approach, we believe it is reasonable to assume there will continue to be a limited influence of the COVID-19 PHE on the cost report data. However, as we continue to receive more updated cost report data, we believe that data will better reflect changes in provider charge and cost reporting structures. Given these factors, we believe that using the most recent cost report data available and resuming our regular cost report update process is appropriate for CY 2024 OPPS ratesetting. As a result of our expectation that the CY 2022 claims that we would typically use are appropriate for establishing the CY 2024 OPPS rates, we proposed to use the CY 2022 claims for the CY 2024 OPPS/ASC ratesetting process. In addition, we proposed to resume our typical cost report update process of including the most recently available cost report data (primarily including cost reports with cost reporting periods including CY 2021). For the reasons previously discussed, we generally do not propose any modifications to our usual OPPS ratesetting methodologies with regard to the use of updated claims and cost report data to account for the impact of COVID-19 on the ratesetting data. We did not receive any public comments on our proposal, and we are finalizing our proposal without modification to resume our typical data update process, using CY 2022 claims data and the most recently available cost report data, in the CY 2024 OPPS ratesetting process. [[Page 81896]]

G. Comment Solicitation on Payment for High-Cost Drugs Provided by

Indian Health Service and Tribal Facilities In the CY 2000 OPPS final rule (65 FR 18433), CMS implemented the prospective payment system for hospital outpatient services furnished to Medicare beneficiaries, as set forth in section 1833(t) of the Act. In this rule, we noted that the Outpatient Prospective Payment System (OPPS) applies to covered hospital outpatient services furnished by all hospitals participating in the Medicare program with a few exceptions. We identified one of these exceptions as ``outpatient services provided by hospitals of the Indian Health Service (IHS).'' While we stated that these services would ``continue to be paid under separately established rates which are published annually in the Federal Register,'' we indicated that our intent was ``to develop a plan that will help these facilities transition to the [O]PPS and will consult with the IHS to develop this plan.'' In the CY 2002 OPPS final rule (66 FR 59855), we finalized our revision to Sec. 419.20 (Hospitals subject to the hospital outpatient prospective payment system) by adding paragraph (b)(4), which specifies that hospitals of the IHS are excluded from the OPPS. However, we reiterated that this exclusion would only be in place until we developed a plan to include IHS hospitals under the OPPS. In the intervening years, IHS and tribal facilities have been paid under the separately established All-Inclusive Rate (AIR). On an annual basis, the IHS calculates and publishes, in the Federal Register, calendar year reimbursement rates. Due to the higher cost of living in Alaska, separate rates are calculated for Alaska and the lower 48 States. For CY 2023, the Medicare Outpatient per Visit Rate is $620 for the lower 48 States and $801 for Alaska. IHS and tribal facilities have continued to expand the breadth of services that they provide to their communities. Increasingly, this has meant providing higher-cost drugs along with more complex and expensive services. While the majority of IHS and tribal facilities appear to be well served by the AIR, there are specialty facilities where the AIR might not be an adequate representation of the Medicare share of costs. If providing a drug or service costs a specialty facility exponentially more than the payment they receive through the AIR, it may not be financially feasible for these facilities to provide that drug or service. For example, the cost of providing expensive cancer drugs or oncology services could greatly exceed payment a specialty IHS facility receives through the AIR. We are concerned that, if payments under the AIR are inadequate for high-cost drugs, this could potentially threaten the viability of the few IHS and tribal hospital outpatient specialty programs currently in operation and provide less incentive to IHS hospitals and tribal facilities not currently offering specialty services to begin doing so. Consequently, we sought comment on a number of potential policies to address payment to IHS and tribal facilities for certain high-cost drugs and services. We sought comment on whether Medicare should pay separately for high-cost drugs provided by IHS and tribal facilities. We requested input on the following: What universe of drugs would be appropriate for separate payment? How could CMS maintain that list and add or remove drugs from it? Would paying separately for all drugs over a certain cost threshold be easier to operationalize than paying separately for a specified list of drugs, while achieving the same policy objective? If so, what would be an appropriate cost threshold and how should it be updated? What would be the appropriate payment rate for any separately paid drugs? How should these rates be updated and should these rates be updated on an annual basis? Would the standard Average Sales Price (ASP) plus 6 percent payment methodology rate be too high of a payment rate if tribal and IHS facilities are able to acquire drugs at a discounted rate through the Federal Supply Schedule? Would a payment rate equivalent to the acquisition cost of the drug through the Federal Supply Schedule be a more appropriate approximation of the cost of these drugs? Should IHS remove the cost of any separately paid drugs from the calculation of the AIR? If the cost of these drugs was not removed from the AIR, would the government be paying twice for these drugs? How would IHS and tribal facilities bill for separately paid drugs? Could they use the UB-04 form like standard OPPS hospitals? 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. We sought comment on whether an outlier policy might be an appropriate mechanism for addressing high-cost drugs and services provided by IHS and tribal facilities. We welcomed input from interested parties on these policy ideas and any additional payment approaches that would enhance our ability to provide equitable payment for high-cost drugs and services provided by IHS and tribal facilities. Comment: We received a total of nine comments in response to this comment solicitation, including from a tribal facility, organizations representing IHS and tribal healthcare providers, pharmaceutical companies, and other interested parties. All of the commenters supported establishing a payment methodology that would allow IHS and Tribal healthcare facilities to receive separate payment outside of the AIR for oncology drugs and services whose costs exceed the AIR. Commenters discussed the different payment approaches that would cover the cost of oncology drugs and services above the AIR payment rate. The preferred approach of the commenters was to treat the AIR payment amount as a payment threshold. If the cost of a drug or service is less than the AIR, the provider would be paid the AIR. If the cost of the drug or service is more than the AIR, then the provider would receive separate payment for the drug or service. Commenters noted that this payment approach is currently being used for drugs receiving payment through Arizona Medicaid (AHCCCS) for IHS and tribal facilities located in Arizona. The commenters explained that the AHCCCS payment methodology was established through a state plan amendment to the AHCCCS program that was approved by CMS. There was less enthusiasm for other possible payment approaches to cover the costs of high-cost oncology drugs and services. One commenter opposed establishing a fixed list of medications that would be eligible for separate payment because of frequent changes in treatment and therapy approaches and the entry of new drugs onto the market. Instead, the commenter would support separate payment for defined classes of drugs using HCPCS coding that would remain stable over several years. The commenter noted that this payment approach would not accommodate separate payment for radiation oncology services. The commenter also was skeptical about using outlier payments for high-cost oncology drugs and services. They stated that while this approach may cover costs that are not currently covered by the AIR, the high threshold to initiate an outlier payment and the limited additional payment would still leave IHS and Tribal [[Page 81897]] facilities who provide high-cost oncology drugs and other high-cost services with significant uncompensated expenditures. Multiple commenters requested that separately payable drugs furnished by IHS and tribal facilities be paid at a rate of ASP + 6 percent rather than using the Federal Supply Schedule rate. Commenters assert that the IHS is chronically underfunded and that paying ASP + 6 percent for high-cost drugs could help with remedying those funding issues. Commenters also wanted to ensure the integrity of the AIR if there is separate payment for high-cost oncology drugs and other high-cost services. They did not support applying offsets to the AIR to avoid double payment to IHS and tribal healthcare providers for separately payable high-cost oncology drugs or for high-cost services that may receive separate payment. Response: We appreciate the suggestions and feedback from the interested parties who responded to this comment solicitation. We will consider the public comments for potential future rulemaking.

H. Technical Changes to Hospital Billing for Marriage and Family

Therapist Services and Mental Health Counselor Services Section 4121(a) of Division FF, Title IV, Subtitle C of the Consolidated Appropriations Act of 2023 (CAA, 2023) (Pub. L. 117-328, December 29, 2022), Coverage of Marriage and Family Therapist Services and Mental Health Counselor Services under Part B of the Medicare Program, provides for Medicare coverage of and payment for the services of mental health care professionals who meet the qualifications for marriage and family therapists (MFTs) and mental health counselors (MHCs) when billed by these professionals. Specifically, section 4121(a)(1) of the CAA, 2023 amended section 1861(s)(2) of the Act by adding a new benefit category under Medicare Part B in new subparagraph (II) to include marriage and family therapist services (as defined in an added section 1861(lll)(1) of the Act) and mental health counselor services (as defined in an added section 1861(lll)(3) of the Act). Section 4121(a)(2) of the CAA, 2023 added a new subsection (lll) to section 1861 of the Act, which defines marriage and family therapist services, marriage and family therapist (MFT), mental health counselor services, and mental health counselor (MHC). Section 1861(lll)(1) of the Act defines ``marriage and family therapist services'' as services furnished by an MFT for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital), which the MFT is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) of the State in which such services are furnished, as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service. Section 1861(lll)(2) of the Act defines the term MFT to mean an individual who: Possesses a master's or doctor's degree which qualifies for licensure or certification as a MFT pursuant to State law of the State in which such individual furnishes marriage and family therapist services; Is licensed or certified as a MFT by the State in which such individual furnishes such services; After obtaining such degree has performed at least 2 years of clinical supervised experience in marriage and family therapy; and Meets such other requirements as specified by the Secretary. Section 1861(lll)(3) of the Act defines ``mental health counselor services'' as services furnished by a mental health counselor (MHC) for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital), which the MHC is legally authorized to perform under State law (or the State regulatory mechanism provided by the State law) of the State in which such services are furnished, as would otherwise be covered if furnished by a physician or as incident to a physician's professional service. Section 1861(lll)(4) of the Act defines MHC as an individual who: Possesses a master's or doctor's degree which qualifies for licensure or certification as a mental health counselor, clinical professional counselor, or professional counselor under State law of the State in which such individual furnishes MHC services; Is licensed or certified as a mental health counselor, clinical professional counselor, or professional counselor by the State in which the services are furnished; After obtaining such degree has performed at least 2 years of clinical supervised experience in mental health counseling; and Meets such other requirements as specified by the Secretary. In the CY 2024 Physician Fee Schedule proposed rule, we proposed to create two new regulation sections at Sec. Sec. 410.53 and 410.54 to codify the coverage provisions for MFTs and MHCs, respectively. We proposed a number of changes (88 FR 52361 through 52364) to implement the amendments made by section 4121 of CAA, 2023. Generally, these amendments added MFTs and MHCs as types of non-physician practitioners who can enroll in Medicare and bill for their professional services to diagnose and treat mental illnesses and specified that payment is made for these services at 80 percent of the lesser of the actual charges for the services or 75 percent of the amount determined under the PFS for services of a clinical psychologist (CP). We received public comments in response to the OPPS proposed rule regarding section 4121 of the CAA, 2023. The following is a summary of the comments we received and our responses. Comment: Several commenters requested that CMS amend the regulations at Sec. 419.22 to add the services of MFTs and MHCs to the list of services that are not paid for under the Hospital Outpatient Prospective Payment System (OPPS) (except when packaged as part of a bundled payment) in order to clarify that MHC and MFT services are excluded from payment under the OPPS. This subject regulation at Sec. 419.22 lists those services that are authorized by Medicare law to be paid under payment systems other than the OPPS, such as the Physician Fee Schedule (PFS), the Skilled Nursing Facility Prospective Payment System (SNF PPS), and the End Stage Renal Disease Prospective Payment System (ESRD PPS). Response: We thank the commenters for bringing this inadvertent omission to our attention. As noted above, we proposed a number of changes (88 FR 52361 through 52364) to implement the amendments made by section 4121 of the CAA, 2023. Generally, these amendments added MFTs and MHCs as types of non-physician practitioners who can enroll in Medicare and bill for their professional services to diagnose and treat mental illnesses and specified that payment is made for these services at 80 percent of the lesser of the actual charges for the services or 75 percent of the amount determined under the PFS for services of a clinical psychologist (CP). In proposing to implement section 4121, we inadvertently did not discuss excluding MFT and MHC services from payment under the hospital outpatient prospective payment system (OPPS). Services paid under fee schedules or other payment systems, including the professional services of physicians or nonphysician practitioners, are not paid [[Page 81898]] under the OPPS (69 FR 65685). The regulation at 42 CFR 419.22 lists the services excluded from payment under the OPPS and includes services of qualified psychologists, as defined in section 1861(ii) of the Act. Because MHC and MFT services are professional services of nonphysician practitioners for which payment is made under the PFS at 75 percent of the amount of payment for services of a psychologist, we believe that in implementing the amendments to the Act made by section 4121 of the CAA, 2023, we must also exclude these services from payment under the OPPS. Accordingly, we are amending the regulation at 42 CFR 419.22 to add the services of MFTs as defined in 1861(lll)(1) and the services of MHCs as defined in section 1861(lll)(3) to the list of hospital services excluded from payment under the OPPS, at new sections (w) and (x), respectively. Comment: A few commenters requested that the regulation at 42 CFR 410.27, which permits certain hospital services to be furnished incident to a physician or nonphysician practitioner's service, be updated to expand the definition of ``nonphysician practitioner'' to include MFTs and MHCs. Response: We thank the commenters for bringing this inadvertent omission to our attention. We are amending the regulation at 42 CFR 410.27(g) to revise the definition of ``nonphysician practitioner'' to include MFTs and MHCs, consistent with section 4121 of the CAA, 2023, and the amendments to the regulations at Sec. Sec. 410.53 and 410.54 that we are adopting in the CY 2024 PFS final rule. After consideration of the public comments, we are amending the regulations at Sec. Sec. 410.27 and 419.22, as described above.

A. CY 2024 OPPS Payment Status Indicator Definitions

Payment status indicators (SIs) that we assign to HCPCS codes and APCs serve an important role in determining payment for services under the OPPS. They indicate whether a service represented by a HCPCS code is payable under the OPPS or another payment system and whether particular OPPS policies apply to the code. For CY 2024, we proposed to change the definition of status indicator ``P'' from ``Partial Hospitalization'' to ``Partial Hospitalization or Intensive Outpatient Program'' in order to account for the proposed payment of intensive outpatient services beginning January 1, 2024, as discussed in section VIII.B of the CY 2024 OPPS/ASC proposed rule. We did not propose to make any other changes to the existing definitions of status indicators that were listed in Addendum D1 to the CY 2023 OPPS/ASC final rule with comment period, which is available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. We solicited public comments on the proposed definitions of the OPPS payment status indicators for 2024. We did not receive any public comments on our proposal, and we are finalizing our proposal to change the definition of status indicator ``P'' from ``Partial Hospitalization'' to ``Partial Hospitalization or Intensive Outpatient Program''. The complete list of CY 2024 payment status indicators and their definitions is displayed in Addendum D1 to this final rule with comment period, which is available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. The CY 2024 payment status indicator assignments for APCs and HCPCS codes are shown in Addendum A and Addendum B, respectively, to this final rule with comment period, which are available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.

B. CY 2024 Comment Indicator Definitions

We proposed to use four comment indicators for the CY 2024 OPPS/ ASC. These comment indicators, ``CH,'' ``NC,'' ``NI,'' and ``NP,'' are in effect for CY 2023; and we proposed to continue their use in CY 2024. The proposed CY 2024 OPPS comment indicators are as follows: ``CH''--Active HCPCS code in current and next calendar year, status indicator and/or APC assignment has changed; or active HCPCS code that will be discontinued at the end of the current calendar year. ``NC''--New code for the next calendar year or existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year for which we requested comments in the CY 2024 OPPS/ASC proposed rule, final APC assignment; comments will not be accepted on the final APC assignment for the new code. ``NI''--New code for the next calendar year or existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year, interim APC assignment; comments will be accepted on the interim APC assignment for the new code. ``NP''--New code for the next calendar year or existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year, proposed APC assignment; comments will be accepted on the proposed APC assignment for the new code. The definitions of the OPPS comment indicators for CY 2024 are listed in Addendum D2 to this final rule with comment period, which is available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. We explained that we believe that the existing CY 2024 definitions of the OPPS/ASC comment indicators continue to be appropriate for CY 2024. Therefore, we proposed to use those definitions without modification for CY 2024. We solicited public comments on our proposed definitions of the OPPS/ASC comment indicators for 2024. We did not receive any public comments on our proposal and are finalizing those definitions without modification for CY 2024.

A. OPPS Payment Rates Update

The March 2023 MedPAC ``Report to the Congress: Medicare Payment Policy,'' recommended that Congress update Medicare OPPS payment rates by the amount specified in current law plus 1 percent. We refer readers to the March 2023 report for a complete discussion of this recommendation.\199\ [[Page 81899]] We appreciate MedPAC's recommendation and, as discussed further in section II.B of the CY 2024 OPPS/ASC proposed rule, we proposed to increase the OPPS payment rates by the amount specified in current law. Comments received from MedPAC for other OPPS policies are discussed in the applicable sections of this final rule with comment period. --------------------------------------------------------------------------- \199\ Medicare Payment Advisory Committee. March 2023 Report to the Congress. Chapter 3: Hospital inpatient and outpatient services, p.57. Available at: https://www.medpac.gov. ---------------------------------------------------------------------------

B. Medicare Safety Net Index

The March 2023 MedPAC ``Report to the Congress: Medicare Payment Policy,'' recommended that Congress should begin a transition to redistribute disproportionate share hospital and uncompensated care payments through the Medicare Safety-Net Index (MSNI). Additionally, MedPAC recommended that Congress add $2 billion to the MSNI pool of funds and distribute such funds through a percentage add-on to payments under the IPPS and OPPS. In light of these recommendations, and in particular those concerning safety net hospitals, in the CY 2024 OPPS/ASC proposed rule, we stated that we look forward to working with Congress and sought comments on approaches CMS could take. We did not receive any public comments in response to our comment solicitation regarding MedPAC's MSNI recommendation.

C. ASC Cost Data

In the March 2023 MedPAC ``Report to the Congress: Medicare Payment Policy,'' MedPAC reiterated its longstanding recommendation that Congress require ASCs to report cost data to enable the Commission to examine the growth of ASCs' costs over time and analyze Medicare payments relative to the costs of efficient providers. MedPAC suggested that such cost data would allow CMS to examine whether an existing Medicare price index is an appropriate proxy for ASC costs or whether an ASC-specific market basket should be developed, stating both the CPI-U and hospital market basket update likely do not reflect an ASC's cost structure. MedPAC contended that it is feasible for small facilities, such as ASCs, to provide cost information since other small facilities, such as home health agencies, hospices, and rural health clinics, currently furnish cost data to CMS. Further, ASCs in Pennsylvania submit cost and revenue data annually to a state agency to estimate margins for those ASCs, and that, as businesses, ASCs keep records of their costs for filing taxes and other purposes.\200\ --------------------------------------------------------------------------- \200\ Medicare Payment Advisory Committee. March 2023 Report to the Congress. Chapter 5: Ambulatory surgical center services, p.163. Available at: https://www.medpac.gov/wp-content/uploads/2023/03/Ch5_Mar23_MedPAC_Report_To_Congress_SEC.pdf. --------------------------------------------------------------------------- While we recognize that the submission of cost data could place additional administrative burden on most ASCs, and we did not propose any cost reporting requirements for ASCs in the CY 2024 OPPS/ASC proposed rule, as in previous years, we sought public comment on methods that would mitigate the burden of reporting costs on ASCs while also collecting enough data to reliably use such data in the determination of ASC costs. Such cost data would be beneficial in establishing an ASC-specific market basket index for updating payment rates under the ASC payment system. We did not receive any public comments on our comment solicitation regarding methods to mitigate the burden of ASC cost reporting and data collection. Comments received from MedPAC for other ASC payment system policies are discussed in the applicable sections of this final rule with comment period.

A. Background, Legislative History, Statutory Authority, and Prior

Rulemaking for the ASC Payment System For a detailed discussion of the legislative history and statutory authority related to payments to ASCs under Medicare, we refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377 and 74378) and the June 12, 1998 proposed rule (63 FR 32291 through 32292). For a discussion of prior rulemaking on the ASC payment system, we refer readers to the CYs 2012 to 2023 OPPS/ASC final rules with comment period (76 FR 74378 and 74379; 77 FR 68434 through 68467; 78 FR 75064 through 75090; 79 FR 66915 through 66940; 80 FR 70474 through 70502; 81 FR 79732 through 79753; 82 FR 59401 through 59424; 83 FR 59028 through 59080; 84 FR 61370 through 61410; 85 FR 86121 through 86179; 86 FR 63761 through 63815; and 87 FR 72054 through 72096).

1. Background on Process for New and Revised HCPCS Codes

We update the lists and payment rates for covered surgical procedures and covered ancillary services in ASCs in conjunction with the annual proposed and final rulemaking process to update the OPPS and the ASC payment systems (Sec. 416.173; 72 FR 42535). We base ASC payment and policies for most covered surgical procedures, drugs, biologicals, and certain other covered ancillary services on the OPPS payment policies and we use quarterly change requests (CRs) to update services paid for under the OPPS. We also provide quarterly update CRs for ASC covered surgical procedures and covered ancillary services throughout the year (January, April, July, and October). We release new and revised Level II HCPCS codes and recognize the release of new and revised CPT codes by the American Medical Association (AMA) and make these codes effective (that is, the codes are recognized on Medicare claims) via these ASC quarterly update CRs. We recognize the release of new and revised Category III CPT codes in the July and January CRs. These updates implement newly created and revised Level II HCPCS and Category III CPT codes for ASC payments and update the payment rates for separately paid drugs and biologicals based on the most recently submitted ASP data. New and revised Category I CPT codes, except vaccine codes, are released only once a year, and are implemented only through the January quarterly CR update. New and revised Category I CPT vaccine codes are released twice a year and are implemented through the January and July quarterly CR updates. We refer readers to Table 41 in the CY 2012 OPPS/ASC proposed rule for an example of how this process is used to update HCPCS and CPT codes, which we finalized in the CY 2012 OPPS/ASC final rule with comment period (76 FR 42291; 76 FR 74380 through 74384). In our annual updates to the ASC list of, and payment rates for, covered surgical procedures and covered ancillary services, we undertake a review of excluded surgical procedures, new codes, and codes with revised descriptors, to identify any that we believe meet the criteria for designation as ASC covered surgical procedures or covered ancillary services. Updating the lists of ASC covered surgical procedures and covered ancillary services, as well as their payment rates, in association with the annual OPPS rulemaking cycle, is particularly important because the OPPS relative payment weights and, in some cases, payment rates, are used as the basis for the payment of many covered surgical procedures and covered ancillary services under the revised ASC payment system. This joint update process ensures that the ASC [[Page 81900]] updates occur in a regular, predictable, and timely manner. Payment for ASC procedures, services, and items are generally based on medical billing codes, specifically, HCPCS codes, that are reported on ASC claims. The HCPCS is divided into two principal subsystems, referred to as Level I and Level II. Level I is comprised of CPT (Current Procedural Terminology) codes, a numeric and alphanumeric coding system maintained by the AMA, and includes Category I, II, and III CPT codes. Level II of the HCPCS, 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. Together, Level I and II HCPCS codes are used to report procedures, services, items, and supplies under the ASC payment system. Specifically, we recognize the following codes on ASC claims: Category I CPT codes, which describe surgical procedures, diagnostic and therapeutic services, and vaccine codes; Category III CPT codes, which describe new and emerging technologies, services, and procedures; and Level II HCPCS codes (also known as alpha-numeric codes), which are used primarily to identify drugs, devices, supplies, temporary procedures, and services not described by CPT codes. We finalized a policy in the August 2, 2007 final rule (72 FR 42533 through 42535) to evaluate each year all new and revised Category I and Category III CPT codes and Level II HCPCS codes that describe surgical procedures, and to make preliminary determinations during the annual OPPS/ASC rulemaking process regarding whether or not they meet the criteria for payment in the ASC setting as covered surgical procedures and, if so, whether or not they are office-based procedures. In addition, we identify new and revised codes as ASC covered ancillary services based upon the final payment policies of the revised ASC payment system. In prior rulemakings, we refer to this process as recognizing new codes. However, this process has always involved the recognition of new and revised codes. We consider revised codes to be new when they have substantial revision to their code descriptors that necessitate a change in the current ASC payment indicator. To clarify, we refer to these codes as new and revised in this CY 2024 OPPS/ASC proposed rule. We have separated our discussion below based on when the codes are released and whether we propose to solicit public comments in the proposed rule (and respond to those comments in this final rule with comment period) or whether we will be soliciting public comments in this CY 2024 OPPS/ASC final rule with comment period (and responding to those comments in the CY 2025 OPPS/ASC final rule with comment period).

2. April 2023 HCPCS Codes Proposed Rule Comment Solicitation

For the April 2023 update, there were no new CPT codes; however, there were several new Level II HCPCS codes. In the April 2023 ASC quarterly update (Transmittal 11927, dated March 24, 2023, CR 13143), we added several new Level II HCPCS codes to the list of covered ancillary services. Table 54 (New Level II HCPCS Codes for Ancillary Services Effective April 1, 2023) of the CY 2024 OPPS/ASC proposed rule (88 FR 49745) displayed the new Level II HCPCS codes that were implemented April 1, 2023. These new codes that were effective April 1, 2023, were assigned to comment indicator ``NP'' in Addendum BB to the 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. In addition, we note that the entire ASC addenda, which consist of the addenda listed below, are available via the internet on the CMS website, specifically, at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices: ASC Addendum AA: ASC Covered Surgical Procedures (Including Surgical Procedures for Which Payment is Packaged) ASC Addendum BB: Covered Ancillary Services Integral to Covered Surgical Procedures (Including Ancillary Services for Which Payment is Packaged) ASC Addendum DD1: ASC Payment Indicators (PI) ASC Addendum DD2: ASC Comment Indicators (CI) ASC Addendum EE: Surgical Procedures Excluded from Payment in ASCs