2024-25521: Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs, Including the Hospital Inpatient Quality Reporting Program; Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals; Prior Authorization; Requests for Information; Medicaid and CHIP Continuous Eligibility; Medicaid Clinic Services Four Walls Exceptions; Individuals Currently or Formerly in Custody of Penal Authorities; Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals; and All-Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities

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-1809-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-1809-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 2024 OPPS/ASC Final Rule

With Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights B. Conversion Factor Update C. Wage Index Changes D. Statewide Average Default Cost-to-Charge Ratios (CCRs) E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2025 F. Payment Adjustment for Certain Cancer Hospitals for CY 2025 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. All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs

Provided by Indian Health Service and Tribal Facilities

E. Request for Comment on Payment Adjustments under the IPPS and

OPPS for Domestic Personal Protective Equipment

G. Payment Policy for Devices in Category B Investigational

Device Exemption (IDE) Clinical Trials Policy and Drugs/Devices With a Medicare Coverage With Evidence Development (CED) Designation XI. CY 2025 OPPS Payment Status and Comment Indicators A. CY 2025 OPPS Payment Status Indicator Definitions B. CY 2025 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

C. Modification of the Immediate Measure Removal Policy for the

Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs Beginning With CY 2025 XV. Hospital Outpatient Quality Reporting (OQR) Program A. Background and Statutory Authority B. Program Measure Set Policies C. Program Measure Updates D. Administrative Requirements E. Form, Manner, and Timing of Data Submission F. Public Reporting of Measure Data G. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2025 Payment Determination XVI. Rural Emergency Hospital Quality Reporting (REHQR) Program A. Background and Statutory Authority B. Program Measure Set Policies C. Program Measure Updates D. Administrative Requirements E. Form, Manner, and Timing of Data Submission F. Public Reporting of Measure Data XVII. Ambulatory Surgical Center Quality Reporting (ASCQR) Program A. Background and Statutory Authority B. Program Measure Set Policies C. Program Measure Updates D. Administrative Requirements E. Form, Manner, and Timing of Data Submission F. Public Reporting of Measure Data G. Request for Information (RFI)--Development of Frameworks for Specialty Focused Reporting and Minimum Case Number for Required Reporting

H. Payment Reduction for ASCs That Fail To Meet the ASCQR

Program Requirements XVIII. Medicaid Clinic Services Four Walls Exceptions

B. Summary of the Medicaid Clinic Services Four Walls Exceptions

Proposed Provisions, Public Comments and Responses to Comments XIX. Changes to the Review Timeframes for the Hospital Outpatient Department (OPD) Prior Authorization Process XX. Provisions Related to Medicaid and the Children's Health Insurance Program (CHIP)

B. Summary of the Proposed Provisions, Public Comments and

Responses to Comments on Medicaid and CHIP Continuous Eligibility [[Page 93915]] XXI. Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals A. Background and Statutory Authority B. The U.S. Maternal Health Crisis C. Summary of the Proposed Provisions, Public Comments and Responses to Comments on Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals XXII. Hospital-Wide All-Cause Risk Standardized Mortality Measures in the Hospital Inpatient Quality Reporting Program

B. Updates to the Form, Time, and Manner Requirements for the

Hybrid Hospital-Wide All-Cause Readmission (HWR) and Hybrid Hospital-Wide All-Cause Risk Standardized Mortality (HWM) Measures for the FY 2026 and the FY 2027 Payment Determinations XXIII. Individuals Currently or Formerly in the Custody of Penal Authorities

A. Medicare FFS No Legal Obligation to Pay Payment Exclusion and

Incarceration (revisions to 42 CFR 411.4)

B. Revision to Medicare Special Enrollment Period for Formerly

Incarcerated Individuals XXIV. Overall Hospital Quality Star Rating Modification To Emphasize the Safety of Care Measure Group: Request for Information (RFI) A. Summary B. Background C. Current Overall Hospital Quality Star Rating Methodology D. Safety of Care in Star Ratings E. Potential Future Options To Greater Emphasize Patient Safety in the Overall Hospital Quality Star Rating

F. Solicitation of Public Comment

XXV. Files Available to the Public via the Internet XXVI. Collection of Information Requirements

E. ICRs for Changes to the Review Timeframes for Hospital

Outpatient Department (OPD) Prior Authorization Process

H. ICRs Regarding Organization, Staffing and Delivery of

Services for Hospitals (Sec. 482.59(a) and (b)) and CAHs (Sec. 485.649(a) and (b))

M. Total Costs for all ICRs Related to Maternal Health

XXVII. Response to Comments XXVIII. 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. Waiver Fiscal Responsibility Act Requirements

1. Purpose

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, 2025. 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 to 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. Also, this final rule with comment period updates the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the Rural Emergency Hospital Quality Reporting (REHQR) Program, the Ambulatory Surgical Center Quality Reporting (ASCQR) Program, and the Hospital Inpatient Quality Reporting (IQR) Program. We summarize information received in response to a Request for Information on potential modifications of the Safety of Care measure group in the Overall Hospital Quality Star Rating methodology. Given that the maternal health crisis in the United States is among the highest in high-income countries and also disproportionately impacts racial and ethnic minorities, we are finalizing updates to the CoPs for hospitals and CAHs in an effort to advance the health and safety of pregnant, birthing, and post-partum women. We are also finalizing an implementation approach in phases that allows additional time for hospitals and CAHs to comply with the requirements of the rule. In addition, we are narrowing the description of ``custody'' for the purposes of Medicare's no legal obligation to pay payment exclusion at Sec. 411.4(b), providing an illustrative list of individuals who are not considered to be in custody, adding a definition of ``penal authority,'' reorganizing the regulation, and making certain technical edits. This rule also revises the eligibility requirements in the special enrollment period (SEP) for formerly incarcerated individuals at Sec. Sec. 406.27(d) (Premium Part A) and 407.23(d) (Part B) to tie the eligibility for this SEP to the determination made by the Social Security Administration (SSA) that they are no longer incarcerated for releases beginning on January 1, 2025, and limit the current eligibility criteria for the SEP, with reference to ``custody'' associated with Sec. 411.4(b) to releases between January 1, 2023, and December 31, 2024. Additionally, we are finalizing our proposed revisions to Medicaid and CHIP regulations to codify the requirement within the CAA, 2023 to require States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. Finally, we are finalizing our proposed exceptions to the Medicaid clinic services benefit four walls requirement, to authorize Medicaid payment for clinic services provided outside the four walls of the clinic for IHS/Tribal clinics, and at State option, behavioral health clinics and clinics located in rural areas. Our current regulation at 42 CFR 440.90(b) includes an exception to the four walls requirement under the Medicaid clinic services benefit only for clinic services furnished to individuals who are unhoused. We believe finalizing these additional exceptions will help maintain and improve access for the populations served by IHS/Tribal clinics, behavioral health clinics, and clinics located in rural areas. [[Page 93916]]

2. Summary of the Major Provisions

OPPS Update: For CY 2025, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.9 percent. This increase factor is based on the final inpatient hospital market basket percentage increase of 3.4 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS) reduced by a final productivity adjustment of 0.5 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) 2025 will be approximately $87.7 billion, an increase of approximately $4.7 billion compared to estimated CY 2024 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. 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 public health emergency (PHE) on healthcare utilization, we extended 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 2025, we increased payment rates under the ASC payment system by 2.9 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a final hospital market basket percentage increase of 3.4 percent reduced by a productivity adjustment of 0.5 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 2025 will be approximately $7.4 billion, an increase of approximately $308 million compared to estimated CY 2024 Medicare payments. Device Pass-Through Payment Applications: For CY 2025, we received 14 complete applications for device pass-through payments. We sought public comment on these applications and make final determinations on these applications in this final rule with comment period. Changes to the List of ASC Covered Surgical Procedures and Ancillary Services Lists: For CY 2025, we are adding 21 medical and dental procedures to the ASC covered procedures list (CPL) and ancillary services lists, based upon existing criteria at Sec. 416.166. Changes to the Inpatient Only (IPO) List: For CY 2025, we are finalizing adding three liver allograft services for which codes were newly created by the AMA CPT Editorial Panel for CY 2025 to the IPO list. Additionally, we are finalizing removing a pelvic fixation code (CPT code 22848) from the IPO list for CY 2025. Remote Services: For CY 2025, we are clarifying our policies for remotely furnished outpatient therapy services, Diabetes Self-Management Training and Medical Nutrition Therapy services and mental health services furnished remotely to beneficiaries in their homes by hospital staff to maintain alignment across payment systems. Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Hospitals: For CY 2025, we are finalizing our policy to separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the AIR under the authorities used to calculate the AIR. Clinical Trials Coding and Payment: We are finalizing a clarification to our Category B clinical trials coding and payment policy for devices and procedures to specify that our policy applies only to IDE studies with a control arm and where a payment adjustment is necessary to preserve the scientific validity of such a study. We are not finalizing our proposal to extend our coding and payment policy to drugs and devices that are being studied in clinical trials under a Coverage with Evidence Development (CED) National Coverage Determination (NCD),\1\ for which the trial includes a treatment and control arm for CY 2025. We are taking additional time to consider the broad implications of a payment methodology for clinical trials for CED drugs and devices. --------------------------------------------------------------------------- \1\ https://www.cms.gov/medicare/coverage/evidence. --------------------------------------------------------------------------- Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital Outpatient Departments: For CY 2025, we are finalizing paying for HIV PrEP drugs covered as an additional preventive service and related services under the OPPS. We are finalizing a site neutral policy where products are generally paid similar rates under the OPPS and Physician Fee Schedule. Diagnostic Radiopharmaceuticals Separate Payment: We are finalizing a policy to pay separately for diagnostic radiopharmaceuticals with per day costs above a threshold of $630, which is approximately two times the volume weighted average cost amount currently associated with diagnostic radiopharmaceuticals in the Nuclear Medicine APCs. We also are finalizing updating the $630 threshold in CY 2026 and subsequent years by the Producer Price Index (PPI) for Pharmaceutical Preparations. Finally, we are finalizing payment for separately payable diagnostic radiopharmaceuticals based on their Mean Unit Cost (MUC) derived from OPPS claims for CY 2025. Exclusion of Cell and Gene Therapies from Comprehensive Ambulatory Payment Classification (C-APC) Packaging: We are finalizing a policy to exclude qualifying cell and gene therapies from C-APC packaging. Add-on Payment for Radiopharmaceutical Technetium-99m (Tc- 99m) Derived from Domestically Produced Mo-99: For CY 2025, an add-on payment applies to radiopharmaceuticals that use Tc-99m produced without use of highly enriched uranium (HEU). For CY 2026, we are finalizing replacing the add-on payment for radiopharmaceuticals produced without the use of Tc-99m derived from non-HEU sources with an add-on payment for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99. Changes to the Review Timeframes for the Hospital Outpatient Department (OPD) Prior Authorization Process: We are changing the current review timeframe for prior authorization requests for OPD services from 10-business days to 7-calendar days for standard reviews. Health Equity Measures for the Hospital Outpatient Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs: We are finalizing: (1) adoption of the Hospital Commitment to Health Equity (HCHE) measure in the Hospital OQR and the REHQR Programs, and adoption of the Facility Commitment to Health Equity (FCHE) measure in the ASCQR Program, beginning with the CY 2025 reporting period/CY 2027 payment or program determinations; (2) adoption of the Screening for Social Drivers of Health (SDOH) measure in all three programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 [[Page 93917]] payment or program determinations; and (3) adoption of the Screen Positive Rate for SDOH measure in all three programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determinations. Modification of the Immediate Measure Removal Policy for the Hospital OQR and ASCQR Programs: We are finalizing modification of the immediate measure removal policy to an immediate measure suspension policy to increase transparency regarding the process for removing adopted measures in the Hospital OQR and ASCQR Programs beginning with CY 2025. Hospital Outpatient Quality Reporting (OQR) Program: In addition to the cross-program measures and policies, we are finalizing: (1) adoption of the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery, Patient Reported Outcome-Based Performance Measure (Information Transfer PRO-PM) beginning with voluntary reporting for the CY 2026 reporting period followed by mandatory reporting beginning with the CY 2027 reporting period/CY 2029 payment determination; (2) removal of the MRI Lumbar Spine for Low Back Pain measure beginning with the CY 2025 reporting period/CY 2027 payment determination; (3) removal of the Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low- Risk Surgery measure beginning with the CY 2025 reporting period/CY 2027 payment determination; (4) the requirement that electronic health record (EHR) technology be certified to all electronic clinical quality measures (eCQMs) available to report beginning with the CY 2025 reporting period/CY 2027 payment determination; and (5) public reporting of the Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients measure--Psychiatric/Mental Health Patients stratification on Care Compare beginning with CY 2025. Rural Emergency Hospital Quality Reporting (REHQR) Program: In addition to the cross-program measures, we are finalizing: (1) extension of the reporting period for the Risk-Standardized Hospital Visits Within 7 Days After Hospital Outpatient Surgery measure from 1 year to 2 years beginning with the CY 2027 program determination; and (2) when, after status conversion, REHs are required to report data under the REHQR Program. Ambulatory Surgical Center Quality Reporting (ASCQR) Program: In addition to finalizing the cross-program measures and policies, we summarize comments received on the potential development of frameworks for specialty focused reporting and minimum case number for required reporting under the ASCQR Program. Hospital Inpatient Quality Reporting (IQR) Program: We are finalizing the voluntary reporting of the core clinical data elements (CCDEs) and linking variables for both the Hybrid Hospital-Wide Readmission (HWR) and Hybrid Hospital-Wide Standardized Mortality (HWM) measures, for the performance period of July 1, 2023, through June 30, 2024, impacting the FY 2026 payment determination for the Hospital IQR Program. Additionally, we are extending voluntary reporting of CCDEs and linking variables for an additional year for the performance period of July 1, 2024, through June 30, 2025, impacting the FY 2027 payment determination for the Hospital IQR Program. Overall Hospital Quality Star Rating: We summarize comments received on potential modifications to the Safety of Care measure group in the Overall Hospital Quality Star Rating methodology. Medicare FFS No Legal Obligation to Pay Payment Exclusion and Incarceration: We are narrowing the description of ``custody'' for purposes of Medicare's no legal obligation to pay payment exclusion at Sec. 411.4(b), stating explicitly in regulatory text that individuals who are released to the community pending trial (including those in pretrial community supervision and those released pursuant to cash bail), on parole, probation, or home detention, or required to reside in halfway houses are not considered to be in ``custody'' for purposes of the payment exclusion, adding a definition of ``penal authority,'' reorganizing the regulation, and making certain technical edits. Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals: We are finalizing the eligibility requirements in the special enrollment period (SEP) for formerly incarcerated individuals at Sec. Sec. 406.27(d) and 407.23(d) to remove the reference to ``custody'' associated with Sec. 411.4(b) and instead tie the eligibility for this SEP to the determination made by SSA that they are no longer incarcerated. We are also expanding the SEP eligibility criteria to include individuals released from confinement to residency in halfway houses. Continuous Eligibility in Medicaid and CHIP: We are finalizing our proposed revisions to Medicaid and CHIP regulations to codify the requirement within the CAA, 2023 for States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. Specifically, we are finalizing the removal of the option to provide continuous eligibility to a subgroup of Medicaid and CHIP enrollees and for a time period of less than 12 months. For CHIP, we are finalizing the removal of the option to disenroll children from CHIP during a continuous eligibility period for failure to pay premiums. Medicaid Clinic Services Four Walls Exceptions: We are finalizing three exceptions to the Medicaid clinic services benefit four walls requirement at 42 CFR 440.90. Our current regulation at 42 CFR 440.90(b) allows for Medicaid payment for clinic services furnished outside of the four walls of the clinic only to individuals who are unhoused. Our final rule adds a mandatory exception to the four walls requirement for IHS/Tribal clinics at 42 CFR 440.90(c) and optional exceptions for behavioral health clinics and clinics located in rural areas at 42 CFR 440.90(d) and (e), respectively. Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals: We are finalizing new Conditions of Participation (CoPs) for hospitals and CAHs for obstetrical services, including new requirements for maternal quality assessment and performance improvement (QAPI), as well as baseline standards for the organization, staffing, and delivery of care within obstetrical units, and staff training on evidence-based best practices every 2 years. We are finalizing revisions to the emergency services CoP related to emergency readiness for hospitals and CAHs that provide emergency services. In addition, we are finalizing revisions to the Discharge Planning CoP for all hospitals related to transfer protocols. Further, we are finalizing a phased-in implementation to provide hospitals and CAHs with additional time to come into compliance with the requirements. Lastly, we sought comments in the proposed rule on whether these requirements should also apply to rural emergency hospitals (REHs), which we discuss below.

3. Summary of Costs and Benefits

In section XXVIII of this final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the proposed [[Page 93918]] changes would have on affected entities and beneficiaries. Key estimated impacts are described below. a. Impacts of All OPPS Changes Table 201 in section XXVIII.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 2025 compared to all estimated OPPS payments in CY 2024. We estimate that the final policies in this final rule with comment period would result in a 3.0 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2025, including beneficiary cost-sharing, to the approximately 3,500 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) would increase by approximately $1.98 billion compared to CY 2024 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 CY 2024, they are also paid for 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 11.9 percent increase in CY 2025 payments to CMHCs relative to their CY 2024 payments. b. Impacts of the Updated Wage Indexes We estimate that our update of the wage indexes based on the fiscal year (FY) 2025 IPPS final rule wage indexes will result in a 0.1 percent increase for urban hospitals under the OPPS and a 0.9 percent increase for rural hospitals. These wage indexes include continued implementation of the Office of Management and Budget (OMB) labor market area delineations based on 2020 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 For CY 2025, 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 COVID-19 PHE impact on claims and cost data used to calculate the target PCR, we had maintained the CY 2021 target PCR of 0.89 through CYs 2022 and 2023. However, in CY 2024, we finalized a policy 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 finalized a target PCR of 0.88. For CY 2025, we are finalizing a target PCR of 0.87 to determine the CY 2025 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments would be the additional payments needed to result in a PCR equal to 0.87 for each cancer hospital. d. Impacts of the OPD Fee Schedule Increase Factor For the CY 2025 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 2.9 percent and applying that increase factor to the conversion factor for CY 2025. 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 3.2 percent. Classifying hospitals by teaching status, we estimate non-teaching hospitals will experience an increase in payments of 3.3 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 2.7 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership will experience an increase of 3.1 percent in payments, while hospitals with government ownership will experience an increase of 2.6 percent in payments. We estimate that hospitals with proprietary ownership will experience an increase of 4.9 percent in payments. e. Impacts of the ASC Payment Update For impact purposes, the surgical procedures on the ASC covered surgical procedure list are aggregated into surgical specialty groups using CPT and HCPCS code range definitions. The percentage change in estimated total payments by specialty groups under the CY 2025 payment rates, compared to estimated CY 2024 payment rates, generally ranges between an increase of 3 percent and an increase of 4 percent, depending on the service, with some exceptions. We estimate the impact of applying the inpatient hospital market basket update to ASC payment rates will increase payments by $193 million under the ASC payment system in CY 2025. f. Impacts of Medicaid Clinic Services Four Walls Exceptions We estimate that the finalized exceptions to the four walls requirement under the Medicaid clinic services benefit for IHS/Tribal clinics, behavioral health clinics, and clinics located in rural areas will increase total expenditures by $1.18 billion from FY 2025 through 2029. Our estimate includes a Federal impact of $1.15 billion and impact to States of $30 million. These estimates are discussed in more detail in section XXVIII of this final rule. g. Impacts of Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals We are finalizing maternal health focused revisions to the CoPs for hospitals and CAHs, which are estimated to increase burden on hospitals and CAHs by $423 million annually with total costs estimated at $4.23 billion over 10 years. We expect an average annual cost of $67,103 per hospital and CAH. As discussed in detail in section XXVIII of this final rule with comment period, we expect the benefits of these policies to include reduced maternal morbidity and mortality, leading to financial benefits for patients, their families, and payors. We also expect that the policies are likely to reduce inequality in maternal health outcomes among pregnant and postpartum women from different groups and lead to overall improvements in patient care. h. Impacts of the Medicaid and CHIP Continuous Eligibility Requirements We are finalizing our proposed revisions to Medicaid and CHIP regulations to codify the requirement within the CAA, 2023 for States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. For CHIP, we are finalizing the removal of the option to disenroll children from CHIP during a continuous eligibility period for failure to pay premiums. Requiring 12months of continuous eligibility in Medicaid and CHIP is estimated to increase annual average enrollment in Medicaid and CHIP by approximately 124,000 by 2028 (75,000 in Medicaid and 49,000 in CHIP). The total estimated impact of this requirement over 5 years is $2,466 million, including Federal impact of [[Page 93919]] $1,592 million and State impact of $874 million.

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 (HCERA, 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 the 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. 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 [[Page 93920]] 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; Indian Health Service (IHS) hospitals; and Rural emergency hospitals (REH).

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 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 26, 2024. The recommendations of the Panel for the most recent meeting are available on the CMS website at: https://www.cms.gov/medicare/regulations-guidance/advisory-committees/hospital-outpatient-payment. 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 2022, we published a Federal Register notice requesting nominations to fill vacancies on the Panel (87 FR 68499). 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 [[Page 93921]] 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 2025 Proposed Rule

We received approximately 3,500 timely pieces of correspondence on the CY 2025 OPPS/ASC proposed rule that appeared in the Federal Register on July 22, 2024 (89 FR 59186). We received comments from elected officials, providers and suppliers, practitioners, 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 2025 OPPS/ASC proposed rule. Out-of-scope-public comments are not addressed in this CY 2025 OPPS/ASC final rule with comment period.

G. Public Comments Received on the CY 2024 OPPS/ASC Final Rule With

Comment Period We received approximately 180 timely pieces of correspondence on the CY 2024 OPPS/ASC final rule with comment period that appeared in the Federal Register on November 22, 2023 (88 FR 81540).

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 2025 OPPS, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2025, and before January 1, 2026 (CY 2025), using the same basic methodology that we described in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81549 through 81552), using CY 2023 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 2025, we began with approximately 145 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, 2023, and before January 1, 2024, before applying our exclusionary criteria and other methodological adjustments. After the application of those data processing changes, we used approximately 73 million final action claims to develop the proposed CY 2025 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 2025 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 2025 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) includes the proposed list of bypass codes for CY 2025. The proposed list of bypass codes contains codes that are reported on claims for services in CY 2023 and, therefore, includes codes that were in effect in CY 2023 and used for billing. We proposed to retain these deleted bypass codes on the proposed CY 2025 bypass list because these codes existed in CY 2023 and were covered OPD services in that period, and CY 2023 claims data were used to calculate proposed CY 2025 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 2025 OPPS/ASC proposed rule. HCPCS codes that we proposed to add for CY 2025 are identified by asterisks (*) in the fourth column of Addendum N. We did not receive any public comments on our general proposal to recalibrate the relative payment weights for each APC based on claims and cost report data for HOPD services or on our proposed bypass code process. We are finalizing as proposed the ``pseudo'' single claims process and the final CY 2025 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 2025, we used approximately 78 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, 2023, and before January 1, 2024. For the 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 2025, 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 2025 APC payment rates are based, we calculated hospital- specific departmental CCRs for each hospital for which we had CY 2023 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most [[Page 93922]] cases, are from CY 2022. For the proposed CY 2025 OPPS payment rates, we used the set of claims processed during CY 2023. 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 2023 (the year of claims data we used to calculate the proposed CY 2025 OPPS payment rates) and updates to the National Uniform Billing Committee (NUBC) 2023 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 accordance with our longstanding policy, similar to our finalized policy for CY 2024 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 2025, we proposed not to include the nonstandard cost centers reported in this way in the OPPS ratesetting database construction. We did not receive any public comments on the general CCR process and therefore, we are finalizing our proposal for CY 2025 to use the hospital-specific overall ancillary and departmental CRs to convert charges to estimated costs through application of a revenue code-to- cost center crosswalk and the proposed methodology.

2. Final Data Development and Calculation of Costs Used for Ratesetting

In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2025. 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 proposed payment rates. That accounting provides additional detail regarding the number of claims derived at each stage of the process. In addition, later in this section we discuss the file of claims that comprises the data set that is available upon payment of an administrative fee under a CMS data use agreement. The CMS website, 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 2023 claims that are used to calculate the proposed payment rates for the CY 2025 OPPS/ ASC proposed rule. 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 proposed relative payment weights used in calculating the OPPS payment rates for CY 2025 shown in Addenda A and B to this final rule with comment period (which are available via the internet on 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 2025 OPPS, we proposed to continue to remove claim lines with modifier ``PN'' from the ratesetting process. 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. For details of the claims accounting process used in this CY 2025 OPPS/ASC 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. a. Calculation of Single Procedure APC Criteria-Based Costs (1) Blood and Blood Products (a) Methodology Since the implementation of the OPPS in August 2000, we have made separate payments for blood and blood products through APCs rather than packaging payment for them into payments for the procedures with which they are administered. Hospital payments for the costs of blood and blood products, as well as for the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs. In the CY 2025 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 [[Page 93923]] 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 propose 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 stated in the CY 2025 OPPS/ASC proposed rule that 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, as 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 2025 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: We received one comment regarding the cost calculations for blood and blood products. The commenter stated that current payment rates do not always cover the cost to process, store, and transport the unit of blood. The commenter recommended that CMS utilize the average wholesale price (AWP) as the payment rate for blood products, in addition to basing payment rates on the hospital CCRs, as they believed using AWP would help eliminate outliers and produce more accurate payment calculations. The commenter explained that cost reporting methodologies may vary among hospitals. For example, some cost centers may combine blood products with blood bank testing which could skew the CCRs for that cost center, which would then impact the payment rates. Response: We thank the commenter for their input and will keep it in mind for future rulemaking. However, we note that reflecting the range and variation of billing patterns across hospitals, as reflected in their claims, is part of establishing prospective payment rates. Additionally, we do not believe at this time that using AWP to set the payment rate for blood products would necessarily result in more accurate payment calculations, because AWP does not factor in volume discounts or rebates and, therefore, may not reflect the true cost of the product. Comment: One commenter supported our proposal to continue to pay separately for blood and blood products. Response: We thank the commenter for their support. After consideration of the public comments we received, we are finalizing our proposals for blood and blood products using our blood- specific CCR methodology without modification. Please refer to Addendum B to this final rule with comment period, which is available on the CMS website, for the final CY 2025 payment rates for blood and blood products. (b) New HCPCS Code for Red Blood Cell Product (HCPCS Code P9027) Effective October 1, 2024, the HCPCS workgroup created HCPCS code P9027 (Red blood cells, leukocytes reduced, oxygen/carbon dioxide reduced, each unit). HCPCS code P9027 may be used to bill for a blood product that utilizes a two-stage process to remove oxygen and maintain a deoxygenated state throughout its storage period, thereby preventing oxidative damage to red blood cells. We note that because HCPCS code P9027 was created after the CY 2025 OPPS/ASC proposed rule was issued, we did not include a proposal regarding the APC assignment for HCPCS code P9027 in the CY 2025 OPPS/ASC proposed rule. Due to its effective date, we assigned HCPCS code P9027 to APC 9541 with an SI = R (Blood and Blood Products) in Change Request 13784. The payment rate for HCPCS code P9027, effective October 1, 2024, is $252.48. While we usually calculate payment rates for blood and blood products using our blood-specific CCR methodology, when there is no claims data on the charges and costs for blood products upon which to apply our blood-specific CCR methodology, we establish a payment rate for the new blood product based on a crosswalk to an existing blood product HCPCS code that we believe provides the best proxy for the costs of the new blood product. Because we did not have any claims data on HCPCS code P9027 ahead of its October 1, 2024, effective date, we used a crosswalk code to assign a payment rate for HCPCS code P9027. Specifically, we found that HCPCS code P9040 (Red blood cells, leukocytes reduced, irradiated, each unit) with a CY 2024 payment rate of $252.48 was sufficiently similar to P9027 to serve as a crosswalk for purposes of a payment rate assignment. Comment: We received a comment from the manufacturer of the blood product described by P9027. HCPCS code P9027 may be used to bill for the blood product involving the Hemanext ONE System. The commenter provided estimated cost information regarding the blood product, including an expected average per-unit anticipated hospital cost of $510. The manufacturer provided the estimated costs based on total blood establishment manufacturing costs, including the costs to manufacture a single unit of the starting materials, the sales price for the Hemanext ONE System, and the blood establishment labor, overhead, [[Page 93924]] administrative, and shipping costs. The commenter noted that they believe their red blood cell product is potentially transformative and would provide improved health outcomes. The commenter stated that they believe the product whose CY 2024 Medicare payment rate reasonably approximates the projected average hospital acquisition cost for HCPCS P9027 is HCPCS code P9057 (Red blood cells, frozen/deglycerolized/ washed/leukocytes reduced, irradiated, each unit), with a CY 2024 payment rate of $493.21 per unit. As such, the commenter recommends that CMS crosswalk the payment rate for HCPCS P9057 to HCPCS P9027. The commenter believes that a crosswalk to any other red blood cell product will result in a payment rate that does not cover the acquisition cost for HCPCS P9027 and creates patient access barriers. Response: We thank the commenter for their comment. Based on the additional cost information provided by the manufacturer, we believe that HCPCS code P9040 is not the best proxy for the costs of the blood product described by HCPCS code P9027. However, we disagree with the commenter that HCPCS code P9057 is the most appropriate crosswalk for new HCPCS code P9027 because the payment rate for HCPCS code P9057 reflects additional processes that are not reflected in the code descriptor for HCPCS code P9027. Given this difference in process, and the associated differences in estimated costs, we believe HCPCS code P9035 is a more appropriate proxy for the costs associated with HCPCS code P9027. Therefore, we are establishing an interim payment rate for HCPCS code P9027 based on a crosswalk to existing blood product HCPCS code P9035. Table 1 lists the new HCPCS code P9027 and its payment crosswalk. [GRAPHIC] [TIFF OMITTED] TR27NO24.000 The interim payment rate for HCPCS code P9027 is open for public comment in this CY 2025 final rule with comment period. Specifically, HCPCS code P9027 is flagged with comment indicator ``NI'' in Addendum B to this final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2025 and are seeking public comments on the APC and status indicator assignments. Once we have claims data for this new HCPCS P-code, we will calculate a payment rate using the claims data that should be available for these new codes beginning in CY 2027, which is our practice for other blood products for which claims data have been available for 2 years. (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 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 2025, except where otherwise indicated, we proposed to continue our policy and use the costs derived from CY 2023 claims data to set the proposed CY 2025 payment rates for brachytherapy sources because CY 2023 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 2025 OPPS. 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 2025 OPPS/ASC proposed rule, 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 2025 OPPS/ASC proposed rule. We also proposed for CY 2025 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 [[Page 93925]] 60537). For CY 2025 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 2025 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 2025 payment rates for brachytherapy sources are included on Addendum B to the CY 2025 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, p103). 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, CY 2023, and CY 2024 OPPS/ASC final rules with comment period (85 FR 85879 through 85880, 86 FR 63469, 87 FR 71760-71761, and 88 FR 81553), 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 CYs 2021 through 2024. There were no CY 2023 claims available that reported HCPCS code C2645 for the CY 2025 OPPS/ASC proposed rule. Therefore, in the absence of claims data, we proposed to continue to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2024 payment rate of $4.69 per mm\2\ for HCPCS code C2645, which we proposed to be assigned to APC 2648 (Brachytx planar, p-103), for CY 2025. 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 2025, we proposed to designate six brachytherapy APCs as Low Volume APCs as these APCs meet our criteria to be designated as Low Volume APCs. For more information on the brachytherapy APCs we proposed to designate as Low Volume APCs, see section III.D of the CY 2025 OPPS/ ASC proposed rule. Comment: We received support from commenters for our proposal to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2024 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 2025. Response: We thank the commenters for their support. After consideration of the public comment we received, we are finalizing, without modification, that we will use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2024 payment rate of $4.69 per mm\2\ for HCPCS code C2645, which we are assigning to APC 2648 (Brachytx planar, p-103), for CY 2025. The final CY 2025 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 [email protected] 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 2025 (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 [[Page 93926]] 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; 87 FR 71769; and 88 FR 81562). 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 (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,'' \2\ 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. --------------------------------------------------------------------------- \2\ Status indicator ``J1'' denotes Hospital Part B Services Paid Through a Comprehensive APC. Further information can be found in CY 2025 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.'' \3\ Specifically, we make a payment through C- APC 8011 for a claim that: --------------------------------------------------------------------------- \3\ Status indicator ``J2'' denotes Hospital Part B Services That May Be Paid Through a Comprehensive APC. Further information can be found in CY 2025 Addendum D1. --------------------------------------------------------------------------- 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 [[Page 93927]] 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.\4\ --------------------------------------------------------------------------- \4\ 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 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 [[Page 93928]] 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 2025, 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 2025, 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 proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), includes all paired code combinations that 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 2025 are listed in Table 2. BILLING CODE 4120-01-P [[Page 93929]] [GRAPHIC] [TIFF OMITTED] TR27NO24.001 [[Page 93930]] [GRAPHIC] [TIFF OMITTED] TR27NO24.002 BILLING CODE 4120-01-C Response: We reviewed each of the requested code combinations suggested by commenters, listed in Table 2, against our complexity adjustment [[Page 93931]] criteria. The code combination for primary HCPCS code 28296 with secondary HCPCS code 28270 meets our cost and frequency criteria, qualifying for a complexity adjustment for CY 2025. All the remaining code combinations listed failed to meet our cost or frequency criteria and do not qualify for complexity adjustments for CY 2025. 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. Some 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 the cost 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. 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 also 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. Comment: A few commenters suggested that to help maintain better stability and predictability of payments associated with complex procedures, CMS should revise the complexity adjustment policy by allowing qualifying codes to maintain the complexity adjusted payment for three calendar years before they are required to go through the eligibility review. For codes that do not qualify in a given year, they could be evaluated in the next calendar year. Commenters asserted that the updated cadence would allow more time for providers and coders to be educated on new code pairs that qualify for complexity adjustments and it would help promote payment stability and predictability for these complex procedures. Response: 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. We evaluate code combinations each year against our complexity adjustment criteria using the latest available data. Potentially maintaining complexity adjustments that are not supported by the latest data could undermine our goals for the ratesetting process. Comment: A few commenters requested that CMS provide additional information on the rationale for not counting claims that reflect code combinations of services that would otherwise meet the frequency criteria needed to receive a complexity adjustment. Commenters conducted their own data modeling using data reflecting all code combinations that met the frequency criteria needed to receive a complexity adjustment. Commenters asked for greater transparency on the methodology CMS used to evaluate the complexity adjustment frequency criteria for code combinations. Response: We refer commenters to the claims accounting narrative under supporting documentation for this CY 2025 OPPS/ASC final rule on the CMS website at: https://www.cms.gov/files/document/2025-nprm-opps-claims-accounting.pdf. The claims accounting narrative provides a detailed overview of how CMS processes the CY 2023 claims data to produce the proposed prospective CY 2025 OPPS payment rates. We are updating the section on Comprehensive APCs in order to provide additional clarity on the claims accounting process used for determining complexity adjustments. After consideration of the public comments we received, we are finalizing the C-APC complexity adjustment policy for CY 2025 as proposed. We are also finalizing the proposed complexity adjustments, with the addition of one new code combination (i.e., primary HCPCS code 28296 with secondary HCPCS code 28270) suggested by commenters that meets 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 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. [[Page 93932]] 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 2025 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'' 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) Exclusion of Cell and Gene Therapies From the C-APC Policy As previously discussed in this section, and in the CY 2014 OPPS/ ASC final rule with comment period (78 FR 74865), the C-APC policy packages payment for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to the primary service and provided during the delivery of the comprehensive service, including diagnostic procedures, laboratory tests and other diagnostic tests and treatments that assist in the delivery of the primary procedure. In the CY 2014 OPPS/ASC final rule (78 FR 74861), we finalized defining a comprehensive APC as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. Because a comprehensive APC treats all individually reported codes as representing components of the comprehensive service, we make a single prospective payment based on the cost of all individually reported codes that represent the provision of a primary service and all adjunctive services provided to support that delivery of the primary service. As discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59201 through 59204), we generally treat all items and services reported on a C-APC claim as integral, ancillary, supportive, dependent, and adjunctive to the primary service and representing [[Page 93933]] components of a comprehensive service. Historically, items packaged for payment provided in conjunction with the primary C-APC service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and those drugs that are usually self-administered (SADs), unless they function as supplies (78 FR 74868 through 74869 and 74909). Our intent has been to make a single prospective payment based on the cost of all individually reported codes that appear on a claim with the primary C-APC service, which we believe represent the provision of a primary service and all adjunctive services provided to support that delivery of the primary service. We discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59201 through 59204), there are rare instances where the cell and gene therapies listed in Table 3, which are usually separately payable under the OPPS, appear on the same claim as a primary C-APC service and therefore, have their payment packaged with payment for the primary C-APC service. The therapies in Table 3 are usually separately paid and priced using the ASP methodology when not on a C-APC claim. Given the unique nature of these therapies, we do not believe they function as integral, ancillary, supportive, dependent, or adjunctive to any of the current C-APCs primary services. The cell therapies described in Table 3 are primarily for the treatment of specific cancers and are administered through an intravenous infusion. The gene therapies listed in Table 3 are generally for the treatment of certain rare ocular or spinal conditions caused by specific genetic mutations and are also either intravenously infused or administered through a subretinal injection. When these products are administered, they are the primary treatment being administered to a patient and thus, are not integral, ancillary, supportive, dependent, or adjunctive to any primary C-APC services. Additionally, the current primary C-APC services describe common surgical procedures, such as breast/lymphatic surgery and musculoskeletal procedures. The cell and gene therapies listed in Table 3 are intended to treat a specific condition and would not be used to support the outcome of any primary C-APC procedure. For example, HCPCS code J3399 (Injection, onasemnogene abeparvovec-xioi, per treatment, up to 5x10[caret]15 vector genomes) may be used to describe the gene therapy Zolgensma. This product is FDA-approved as an adeno-associated virus (AAV) vector-based gene therapy indicated for the treatment of pediatric patients less than 2 years of age with spinal muscular atrophy (SMA) with bi-allelic mutations in the survival motor neuron 1 (SMN1) gene. The specified mechanism of onasemnogene abeparvovec is a recombinant AAV9-based gene therapy designed to deliver a copy of the gene encoding the human SMN protein.\5\ The function of a product such as Zolgensma, is not intended to be integral, ancillary, supportive, dependent, and adjunctive to any C-APC as the gene therapy itself is an independent treatment. --------------------------------------------------------------------------- \5\ Zolgensma. FDA Package Insert. October 2023. https://www.fda.gov/media/126109/download?attachment. --------------------------------------------------------------------------- Yescarta (HCPCS code Q2041) is an example of a cell therapy that functions as an independent treatment. Based on its FDA-approved indication,\6\ this product's intended clinical use would not be integral, ancillary, supportive, dependent, or adjunctive to any current C-APC primary service. Yescarta is indicated as a CD19-directed genetically modified autologous T cell immunotherapy for the treatment of Adult patients with large B-cell lymphoma that is refractory to first-line chemoimmunotherapy or that relapses within 12 months of first-line chemoimmunotherapy and adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (DLBCL) not otherwise specified, primary mediastinal large B-cell lymphoma, high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma. Yescarta is the primary treatment being performed when administered for these FDA- approved indications and should not be packaged as supportive of any C- APC primary service even if the two services appear on the same claim. --------------------------------------------------------------------------- \6\ FDA Package Insert. Yescarta. April 2024. https://www.fda.gov/media/108377/download?attachment. --------------------------------------------------------------------------- We explained in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74868) that intravenous drugs, for example, are OPPS services that are considered adjunctive to the primary procedure because the correct administration of the drug either promotes a beneficial outcome, such as the use of intravenous pain medications, or prevents possible complications, such as the use of intravenous blood pressure medications to temporarily replace oral blood pressure medications and reduce the risk of a sudden rise in blood pressure when a normal daily medication is stopped. In the case of the cell and gene therapies described in Table 3, however, we do not believe the therapies ``promote a beneficial outcome'' or ``prevent possible complications'' of any of the procedures currently designated as primary C-APC services. While the cell and gene therapies in Table 3 may ``promote a beneficial outcome'' for the patient in general, we do not believe the provision of cell and gene therapies are ``promoting a beneficial outcome'' for any of the primary C-APC services themselves, as the cell and gene therapies are serving as independent therapies. These are distinguishable from the previous examples of intravenous pain medications that are directly related to the primary C-APC service and promote a beneficial outcome for that procedure. Further, in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74865), we stated that we proposed to package into C-APCs all of these integral, ancillary, supportive, dependent, and adjunctive services, hereinafter collectively referred to as ``adjunctive services,'' provided during the delivery of the comprehensive service. This includes the diagnostic procedures, laboratory tests and other diagnostic tests, and treatments that assist in the delivery of the primary procedure. In the CY 2025 OPPS/ASC proposed rule (89 FR 59201 through 59204), we stated we did not believe that the cell and gene therapies listed in Table 3 are assisting in the delivery of any primary procedure currently assigned to a C-APC. Therefore, for CY 2025 only, we proposed not to package payment for the cell and gene therapies listed in Table 3 into the payment for the primary C-APC service when they appear on the same claim as primary C- APCs services. We proposed this policy for one year only in order to gather more information from interested parties as to whether the proposed policy appropriately captures all of the unique therapies, such as the cell and gene therapies listed in Table 3, that function as primary treatments and do not support C-APC primary services. As discussed later in this section, we welcomed comments from readers on the proposal and the potential need for a different, modified, expanded, or supplemental policy for future rulemaking. We stated we will assess whether to continue this policy, or a modified version of this policy, beyond one year in future rulemaking, taking into consideration the comments received. We did not propose to include therapies that are on drug pass- through status for all of CY 2025 in Table 3 [[Page 93934]] because pass-through drugs are already excluded from C-APC packaging. We proposed that products for which pass-through status is expiring in CY 2025 would be excluded from C-APC packaging after their pass-through status expires. For example, the product described by HCPCS code Q2056 has pass-through status expiring June 30, 2025. Until its pass-through status expires, the product will be excluded from C-APC packaging due to the pass-through C-APC exclusion policy, but after its pass-through status expires, we propose that the therapy would continue to be excluded from C-APC packaging under our proposed exclusion for cell and gene therapies. For more information on drug pass-through status, including expiring and continuing pass-through status, please see section V.A of this final rule with comment period. BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TR27NO24.003 [[Page 93935]] BILLING CODE 4120-01-C We proposed to exclude the therapies listed in Table 3 from C-APC packaging. We invited comment on the proposal, and we invited comment on whether there are any additional cell and gene therapies that may be appropriate to exclude from C-APC packaging for CY 2025. We asked commenters to explain why any additional cell and gene therapies that they believe should be excluded from C-APC packaging were not integral, ancillary, supportive, dependent, or adjunctive to any C-APC primary service. We invited comment on whether the proposal should be extended beyond 1 year or if a different, expanded, or supplemental policy approach may be warranted in future rulemaking. For example, we were interested in comments on whether there are other classes of drugs, biologicals, or other products that are not clearly integral, ancillary, adjunctive, or supportive of a primary C-APC service but could appear on the same claim as the C-APC for that primary service and for which payment would be packaged into the C-APC payment under our current policy. We stated that we would expect clinical evidence supporting commenters' assertion that other identified classes of drugs, biologicals, medical devices, or other products are not clearly supportive of a primary C-APC service but may nonetheless appear on the same claim as a primary C-APC procedure. Similarly, we invited comment on whether interested parties believe it is appropriate for these other classes of drugs, biologicals, or medical devices to be excluded from packaging with all C-APCs or only specific C-APCs, such as the Comprehensive Observation Services C-APC (SI = ``J2''). Finally, we invited comment on the following: Because the cell and gene therapies listed in Table 3 are not integral, ancillary, supportive, dependent, or adjunctive to any current C-APC procedure, how could CMS structure a new C-APC, or similar packaged payment policy, for the service to administer cell or gene therapies, such by creating as a Chimeric Antigen Receptor (CAR) T-cell therapy administration C-APC, with which the CAR-T or gene therapy would be integral, ancillary, supportive, dependent, or adjunctive to the primary C-APC service? What integral, ancillary, supportive, dependent, or adjunctive items and services are routinely provided as part of the administration of cell and gene therapies or in conjunction with cell and gene therapies generally? We recognized that currently, for CY 2024, the following HCPCS codes are associated with CAR-T therapy: HCPCS code 0537T (Chimeric antigen receptor t-cell (car-t) therapy; harvesting of blood-derived t lymphocytes for development of genetically modified autologous car-t cells, per day), 0538T (Chimeric antigen receptor t-cell (car-t) therapy; preparation of blood-derived t lymphocytes for transportation (eg, cryopreservation, storage)), 0539T (Chimeric antigen receptor t- cell (car-t) therapy; receipt and preparation of car-t cells for administration), and 0540T (Chimeric antigen receptor t-cell (car-t) therapy; car-t cell administration, autologous) as discussed in previous OPPS rulemaking, including the CY 2022 OPPS/ASC final rule with comment period (86 FR 63550 through 63552). Separately, we also invited comment on whether policy revisions to the C-APC policy may be appropriate in future rulemaking, such as a modified outlier payment policy specific to C-APCs to address related situations in the future. We listed all proposed C-APC exclusion categories for CY 2025 in Addendum J to the CY 2025 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). Comment: Commenters were generally very supportive of the proposal and thought this agency action was a positive step forward to ensure access to these new classes of drugs. They agreed with CMS's assessment that the cell and gene therapies listed in the CY 2025 OPPS/ASC proposed rule did not function as integral, ancillary, supportive, dependent, or adjunctive to any of the current C-APCs primary services. Commenters noted that they agreed that these treatments acted as independent therapies and were the reason for a Medicare beneficiary's visit to a hospital outpatient department. Additionally, commenters believed that this policy was necessary and important given the large number of cell and gene therapy products currently being researched that may ultimately be approved and available to Medicare beneficiaries in the coming years. Response: We thank commenters for their support of our proposal and rationale. Comment: Many commenters recommended CMS make this policy permanent as soon as possible. They noted that they agreed with CMS's assessment that it would be inappropriate to package cell and gene therapies into C-APCs for CY 2025 only, but that the same reasons that C-APC packaging would be inappropriate for CY 2025 would also apply to subsequent years. Other commenters recommended that CMS make this policy effective for an extended period of time, such as three years, in order to better understand how the policy is working. Response: We thank commenters for their feedback. Based on the comments received, we are persuaded that the reasoning for excluding these cell and gene therapy products from C-APC packaging in CY 2025 would also apply to subsequent years. As such, we will be finalizing our proposal as later discussed in this section for CY 2025 and subsequent years. Comment: One commenter recommended that its cell therapy be added to the list of qualifying exceptions to C-APC packaging as their product received FDA approval on August 1, 2024, during the public comment period. A few commenters recommended CMS apply this packaging exception to other categories of drugs that they believed fell into a similar clinical category as cell and gene therapies. For example, one commenter suggested that its drug product is one of a growing number of innovative drugs that are administered using surgical procedures that are mapped to a C-APC, resulting in packaging of that product. The commenter stated that the product was the primary treatment being delivered to the patient, and not the C-APC procedure. Another commenter stated they have a product in the pipeline that, according to guidance from a specialty society, requires a procedure corresponding to CPT code 51720 (bladder instillation of anticarcinogenic agent), which is assigned to C-APC 5372, in order to insert the investigational product into the bladder. This commenter believed their product is the primary treatment being administered to a patient and is not supportive to any primary C-APC services. Therefore, they requested this product not be packaged into a C-APC and believed C-APC packaging would be inappropriate. This commenter also requested that in order to prevent C-APC packaging, one option would be for CMS to reassign the code used to describe the administration of its product to a drug administration APC rather than a C-APC. Specifically, they recommended CMS reassign CPT code 51720, which corresponds to the procedure used to administer the investigational product, to a non C-APC, such as a drug administration APC. [[Page 93936]] Some commenters recommended that CMS extend the proposed policy to cell and gene therapies assigned to status indicator ``G'', which correlates to pass-through status. Similarly, commenters recommend CMS exclude a variety of products from C-APC packaging, such as Casgevy, Lyfgenia, Amtagvi, Omisurge, Zynteglo, Obe-cel, Hemgenix, Beqvez, Roctavian, Spinraza and Elevidys. A few commenters suggested CMS should review and identify any other products that may be administered as independent therapies in the hospital outpatient setting and stated that such products should be separately paid. Response: We greatly thank commenters for their detailed comments. For new cell and gene therapy products that are not integral, ancillary, supportive, dependent, or adjunctive to any C-APC primary service that were approved during CY 2024 and that continue to be approved, CMS will add their product specific HCPCS codes, when created, to the C-APC exclusion list. For example, HCPCS code J3392 (Injection, exagamglogene autotemcel, per treatment) effective October 1, 2024, which may be used to describe the product Casgevy, was added to the list of qualifying products. We also thank commenters for their suggestions to add additional drugs and classes of drugs to this C-APC exclusion policy as well as those drugs that are administered during a C-APC procedure. Additionally, we thank the commenter for its suggestion to move some codes that describe the administration of a product from a C-APC to a drug administration APC. We will take this feedback into consideration for future rulemaking. As we stated in the proposed rule, we welcomed comments from readers on the proposal and the potential need for a different, modified, expanded, or supplemental policy for future rulemaking. We believe that cell and gene therapies are a unique class of products, but we believe we need additional evidence and engagement from interested parties concerning whether other identified classes of drugs, biologicals, medical devices, or other products are not supportive of a primary C-APC service but may nonetheless appear on the same claim as a primary C-APC procedure. We strongly believe in the principles of our prospective payment system and the C-APC policy; therefore, we want to ensure than any potential future changes to our C-APC packaging policy maintain these principles. Commenters suggested that we exclude several additional products from C-APC packaging, such as Lyfgenia, Zynteglo, Hemgenix, Beqvez, Roctavian, and Elevidys. We note that these products are currently on OPPS pass-through status for the duration of CY 2025, and therefore will be excluded from C-APC packaging under that policy. Similarly, in response to commenters suggestion that we apply this policy to cell and gene therapy products assigned to status indicator ``G'', we note that we specifically did not propose to include therapies that are on drug pass-through status, represented by status indicator ``G'' for all of CY 2025 because pass-through drugs are already excluded from C-APC packaging. Please see section V.A of this final rule with comment period for additional information on OPPS drug pass-through status. Comment: Several commenters recommended that CMS unpackage all status indicator ``K'' drugs from C-APC packaging, which aligned with the 2024 Advisory Panel on Hospital Outpatient Payment recommendation to no longer package drugs with a status indicator of ``K'' into any C- APC and, instead, they recommended CMS provide separate payment for all drugs and biologicals above the drug packaging threshold. Commenters said these status indicator ``K'' drugs should be paid based on 1847A of the Social Security Act and reimbursed at Average Sales Price plus 6 percent rather than packaged. Similarly, a commenter suggested that since drugs on pass-through status are paid separately when billed with a C-APC, that CMS should continue that separately payable status after passthrough status expiration and the transition of that code's status indicator from ``G'' to ``K.'' Commenters suggested that the proportion of status indicator ``K'' drug charges relative to all other charges appearing on C-APCs claims was less than 2.5 percent across all C-APCs. Meaning, in commenters' views, that C-APCs do not inherently involve the provision of status indicator ``K'' drugs. Another commenter recommended that CMS exclude high-cost primary therapy drugs across drug classes and not only to cell and gene therapies, apply the C-APC exclusion to primary therapy drugs that clinically align to C-APCs, and they included specific examples they researched that serve as the primary therapy drugs similar to cell and gene therapies. Response: We appreciate the information submitted by commenters, but respectfully disagree with their conclusions. The C-APC policy aims to package payment for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to the primary service and provided during the delivery of the comprehensive service, including diagnostic procedures, laboratory tests and other diagnostic tests and treatments that assist in the delivery of the primary procedure. We believe it is appropriate for most drugs and biologicals to be packaged into C-APCs as we believe they function to ``promote a beneficial outcome'' or ``prevent possible complications'' of C-APC services. We explained in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74868) that intravenous drugs, for example, are OPPS services that are considered adjunctive to the primary procedure because the correct administration of the drug either promotes a beneficial outcome, such as the use of intravenous pain medications, or prevents possible complications, such as the use of intravenous blood pressure medications to temporarily replace oral blood pressure medications and reduce the risk of a sudden rise in blood pressure when a normal daily medication is stopped. We are therefore not excluding all status indicator ``K'' drugs above the drug packaging threshold from C-APC packaging. Our packaging policies are a fundamental component of the OPPS and they support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. Additionally, we do not believe at this time that cost alone is a reason to exclude a product from packaging. Comment: Many commenters responded to several of our requests for comment associated with the proposal. Commenters recommended no significant overall changes to the general methodology CMS proposed to exclude products from all C-APC packaging and pay separately based on the individual product's average sales price plus 6 percent. Specifically, commenters strongly conveyed that they did not see an appropriate reason for CMS to structure a new C-APC, or similar packaged payment policy, for the service to administer cell or gene therapies, such as by creating a CAR T-cell therapy administration C- APC. Commenters believed that there is no accurate way to create a bundled payment for a whole group of cell and gene therapies as the costs and resources required are unique and novel between each of the therapies, which also makes it difficult to determine appropriate items and services associated with each therapy for inclusion in C-APC packaging. Commenters broadly believed no [[Page 93937]] different or supplemental policy was warranted given the numerous challenges providers face related to cell and gene therapies currently. They saw any additional change to move towards a packaged payment policy as an additional challenge for the hospitals providing the therapies. Similarly, commenters cautioned CMS against creating C-APCs for cell and gene therapies as this may cause inadequate Medicare reimbursement to hospitals, which, in their view, has the potential to jeopardize beneficiary access to CAR T-cell therapy and other high-cost therapies as commenters communicated that institutions weigh reimbursement challenges with their ability to provide this costly care. Commenters were concerned that creating a new packaged payment policy could lead to a financial loss and decrease the number of facilities offering high-cost cell and gene therapies in the hospital outpatient department. Commenters emphasized that these therapies involve highly specialized procedures, intensive monitoring, and multidisciplinary care teams, all of which contribute to their substantial costs. Commenters were concerned by the fact that the administration of cell and gene therapies are multi-step processes that can take weeks if not months and entail multiple services that would not appear on the same claim. Additional commenters reiterated that all of the various and distinct clinical services for CAR T-cell therapy are furnished over multiple encounters on different dates--making CAR T-cell therapy inappropriate for C-APCs, which are typically specific to a single encounter in their view. Commenters believed a CAR T-cell therapy C- APC, or similar packaged payment policy, would be unprecedented and a huge policy departure for CMS and recommended CMS not pursue the idea any further. Many commenters believed that separate payment based on average sales price plus 6 percent is the most appropriate payment methodology for cell and gene therapies due to its transparency, uniformity and predictability. A few commenters pointed out that current hospital cost data is lower than ASP for CAR T-cell therapy products, potentially leaving products underpaid if paid based on C-APC principles. Commenters similarly took the position that there is no appropriate method in which CMS could modify its outlier payment policy with respect to C-APCs to better pay for these types of products. Response: We appreciate the insights provided by commenters and will take them into consideration for future rulemaking. At this time, we are not considering the creation of a new C-APC, similar packaged payment policy, or modified outlier policy, for services to administer cell or gene therapies. After consideration of the public comments we received, we are finalizing our policy proposal with a modification with respect to how long this policy will apply. For CY 2025 and subsequent years, we are finalizing a policy not to package payment for cell and gene therapies into C-APCs, when those cell and gene therapies are not functioning as integral, ancillary, supportive, dependent, or adjunctive to the primary C-APC service. For new cell and gene therapy products that are not integral, ancillary, supportive, dependent, or adjunctive to any C- APC primary service, we will continue to add their product specific HCPCS codes, when created, to the C-APC exclusion list. The current list of qualifying products can be found in Table 4. We are not adding any additional drug classes to this policy exclusion at this time, and we are not currently considering any additional modifications to our policy, but will continue to consider additional refinements for future rulemaking. We list all final C-APC exclusion categories for CY 2025 in Addendum J to this final 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). BILLING CODE 4120-01-P [[Page 93938]] [GRAPHIC] [TIFF OMITTED] TR27NO24.004 BILLING CODE 4120-01-C (5) Exclusion of Non-Opioid Products for Pain Relief Under Section 4135 of the Consolidated Appropriations Act, 2023 From the C-APC Policy 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 section 1833(t)(16) and section 1833(i) of the Social Security 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) provides that with respect to a non-opioid treatment for pain relief furnished on or after January 1, 2025, [[Page 93939]] 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. As stated earlier in this section, our current policy is to exclude from the packaged C-APC payment those items and services that are required by statute to be separately paid. Accordingly, we proposed to exclude the non-opioid treatments for pain relief identified as satisfying the required criteria for payment under section 4135 of the CAA, 2023 from the C-APC policy to ensure payment is not packaged into any C-APC and that separate payment is made in accordance with the statute. Comment: Commenters were generally supportive of our proposal not to package payment and to pay separately for qualifying drugs, biologicals, and medical devices that met the criteria for payment under section 4135 of the CAA, 2023. A commenter mentioned its support of CMS packaging policies, and noted reservations about paying separately, and not packaging, non-opioid treatments for pain relief; however, they ultimately conceded that CMS must implement section 4135 of the CAA, 2023, which requires separately payable status, and supported CMS's implementation methodology. Response: We thank commenters for their support. After consideration of the public comments we received, we are finalizing our policy as proposed, and will exclude the non-opioid treatments for pain relief identified as satisfying the required criteria for payment under section 4135 of the CAA, 2023 from the C-APC policy to ensure payment is not packaged into any C-APC and that separate payment is made in accordance with the statute. Please see section XIII.F of this final rule with comment period for a list of the products that we are finalizing would qualify for payment under the new payment policy for non-opioid drugs, biologicals, and devices for pain relief. (6) C-APCs for CY 2025 For CY 2025 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 2025; thus, we proposed that the number of C-APCs for CY 2025 would be the same as the number for CY 2024, which is 72 C-APCs. Comment: A few commenters requested that CMS reconsider our packaging policies for C-APC 8011 (Comprehensive Observation Services). They requested that CMS remove the rule that the presence of a SI ``T'' procedure on a claim excludes payment of C-APC 8011 and instead package the payment of the SI ``T'' procedure into C-APC 8011, as is already done with SI ``Q'' procedures. Commenters stated that this requirement violates the basic tenet of the packaging concept in that when observation services are ordered and furnished, the observation services become the primary service provided to such patients and the SI ``T'' procedure is provided ancillary to that primary service. Commenters cited scenarios in which hospitals provide significant, resource-intensive services to a patient but are paid significantly less than if a SI ``T'' procedure was not done. Response: We thank the commenters for bringing this to our attention. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70334-70336), in response to commenters' concerns regarding packaging payment for potentially high-cost surgical procedures into the payment for an observation C-APC, we finalized a policy that claims reporting procedures assigned status indicator ``T'' do not qualify for payment through C-APC 8011, regardless of whether the procedure assigned status indicator ``T'' was furnished before or after observation services (described by HCPCS code G0378) were provided. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79562), we stated that services that would otherwise qualify for C-APC 8011 are not considered to be observation services when they are associated with a surgical procedure (assigned to status indicator ``T''). Instead, they are considered to be perioperative recovery, which is always packaged in with the surgical procedure. We will continue to review the impacts of this issue and may revisit it in future rulemaking. Comment: Two commenters expressed concerns with the C-APC methodology for surgical insertion codes for brachytherapy treatment, stating 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. Alternatively, one commenter suggested that CMS could continue to pay for ``J1'' brachytherapy insertion codes under the C-APC payment methodology but exclude and make separate payment for designated preparation and planning services in addition to the C-APC payment. Another commenter called for education on whether services, like brachytherapy, that are assigned to a J1 indicators and delivered over multiple patient encounters may be reported per encounter. Response: We appreciate the comments on the C-APC methodology. However, we believe that the current C-APC methodology is appropriately applied to surgical insertion for brachytherapy treatment 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. We will evaluate if provider education may be appropriate in this circumstance. We will continue to examine these concerns and will determine if any modifications on this policy are warranted in future rulemaking. After consideration of the public comments we received, we are finalizing the C-APCs as proposed. Table 5 lists the final C-APCs for CY 2025. All C-APCs are displayed in Addendum J to this CY 2025 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 of the data related to the C-APC payment policy methodology, including the list of complexity adjustments and other information for CY 2025. BILLING CODE 4120-01-P [[Page 93940]] [GRAPHIC] [TIFF OMITTED] TR27NO24.005 [[Page 93941]] [GRAPHIC] [TIFF OMITTED] TR27NO24.006 BILLING CODE 4120-01-C C-APC Clinical Family Descriptor Key: AENDO = Airway Endoscopy AICDP = Automatic Implantable Cardiac Defibrillators, Pacemakers, and Related Devices. BREAS = Breast Surgery COCHL = Cochlear Implant EBIDX = Excision/Biopsy/Incision and Drainage ENTXX = ENT Procedures EPHYS = Cardiac Electrophysiology/ EVASC = Endovascular Procedures EXEYE = Extraocular Ophthalmic Surgery GIXXX = Gastrointestinal Procedures GYNXX = Gynecologic Procedures INEYE = Intraocular Surgery LAPXX = Laparoscopic Procedures NERVE = Nerve Procedures NSTIM = Neurostimulators ORTHO = Orthopedic Surgery PUMPS = Implantable Drug Delivery Systems RADTX = Radiation Oncology SCTXX = Stem Cell Transplant [[Page 93942]] UROXX = Urologic Procedures VASCX = Vascular Procedures WPMXX = Wireless PA Pressure Monitor 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 2025, 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 and 33581 and 82 FR 59246 and 59247), 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 for APC 5863, which was the maximum partial hospitalization per diem payment rate for a hospital, and finalized a policy that the hospital would continue to be paid the payment rate for composite APC 8010. This policy applied in CYs 2018 through 2023. In the CY 2024 OPPS/ASC proposed rule, we stated that APC 5863 was no longer the maximum partial hospitalization per diem payment rate for a hospital due to the creation of APC 5864, which is four or more hospital-based PHP services per day (88 FR 49572). We solicited comment on whether APC 5864 would be appropriate to use as the daily mental health cap, 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 (88 FR 49572). Based on public comments received and our longstanding policy, in CY 2024 OPPS/ASC final rule, we finalized APC 5864, four hospital-based PHP services per day, as the daily mental health cap (88 FR 81566). We continue to believe that the costs associated with administering a partial hospitalization program represent the most resource intensive of all outpatient mental health services. For CY 2025 and subsequent years, we proposed to continue this policy 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 4 partial hospitalization services provided in a day by a hospital (the payment amount for APC 5864), those specified mental health services would be paid through composite APC 8010. In addition, we proposed to continue to set the payment rate for composite APC 8010 at the same payment rate that we propose for APC 5864, which is a partial hospitalization per diem payment rate for 4 partial hospitalization services furnished in a day by a hospital. Under the proposed policy, the Integrated OCE (I/OCE) would continue to determine whether to pay for these specified mental health services individually, or to make a single payment at the same payment rate established for APC 5864 for all the specified mental health services furnished by the hospital on that single date of service by paying for the services through composite APC 5863. Comment: One commenter 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 or increase the payment rate for the primary testing procedure codes. Noting the multiple day structure of neuropsychological testing, they requested a daily payment for each date of service. 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. Composite APCs 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. The words ``list separately in addition to code for primary procedure'' are included in the long descriptors for HCPCS codes 96133 and 96137 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 42 CFR 419.2(b)(18), certain services described by add-on codes are generally packaged under the OPPS, and payments for the codes are bundled with the primary codes. [[Page 93943]] Consequently, HCPCS codes 96133 and 96137 are not paid separately under the OPPS, but instead, their payment is packaged into the primary code. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59246 through 59247), we stated 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 continue to believe that the Composite APC methodology, which limits 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, to the per diem payment rate for four partial hospitalization services provided in a day by a hospital (the payment amount for APC 5864), is appropriate. 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 four partial hospitalization services provided in a day by a hospital (the payment amount for APC 5864), those specified mental health services would be paid through composite APC 8010 for CY 2025. In addition, we are finalizing setting the payment rate for composite APC 8010 for CY 2025 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 6. While there are three imaging families, there are five multiple imaging composite APCs due to the statutory requirement under section 1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging services provided with and without contrast. While the ultrasound procedures included under the policy do not involve contrast, both CT/ CTA and MRI/MRA scans can be provided either with or without contrast. The five multiple imaging composite APCs established in CY 2009 are: APC 8004 (Ultrasound Composite); APC 8005 (CT and CTA without Contrast Composite); APC 8006 (CT and CTA with Contrast Composite); APC 8007 (MRI and MRA without Contrast Composite); and APC 8008 (MRI and MRA with Contrast Composite). We define the single imaging session for the ``with contrast'' composite APCs as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the ``with contrast'' composite APC. We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service. The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569). For CY 2025, 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 2025, except where otherwise indicated, we proposed to use the costs derived from CY 2023 claims data to set the proposed CY 2025 payment rates. Therefore, for CY 2025, the proposed 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 2023 claims available for the CY 2025 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), are identified by asterisks in Addendum N to this final rule with comment period (which is available via the internet on the CMS website) and are discussed in more detail in section II.A.1.a of the this final rule with comment period. For this final rule with comment period, we were able to identify approximately 0.95 million ``single session'' claims out of an estimated 2.1 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 2025 geometric mean costs for the multiple imaging composite APCs. Table 6 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 2025. We did not receive any public comments on this policy. We are finalizing without modification our proposal to continue the use of multiple imaging composite APCs to pay for the provision of more than one imaging procedure from the same imaging family on the same date. Table 6 lists the HCPCS codes that will be subject to the multiple imaging composite APC policy and their respective imaging families and approximate composite APC final geometric mean costs for CY 2025. BILLING CODE 4120-01-P [[Page 93944]] [GRAPHIC] [TIFF OMITTED] TR27NO24.007 [[Page 93945]] [GRAPHIC] [TIFF OMITTED] TR27NO24.008 [[Page 93946]] [GRAPHIC] [TIFF OMITTED] TR27NO24.009 [[Page 93947]] [GRAPHIC] [TIFF OMITTED] TR27NO24.010 BILLING CODE 4120-01-C

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 [[Page 93948]] and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. Our packaging policies support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. For example, where there are a variety of devices, drugs, items, and supplies that could be used to furnish a service, some of which are more costly than others, packaging encourages hospitals to use the most cost-efficient item that meets the patient's needs, rather than to routinely use a more expensive item, which may occur if separate payment is provided for the item. Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. Finally, packaging may reduce the importance of refining service- specific payments 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. Packaging encourages efficiency and is an essential component of a prospective payment system, therefore 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. Final CY 2025 Policy on Packaged Items and Services For CY 2025, 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 2025, we did not propose any changes to the overall packaging policy discussed. We proposed to continue to conditionally package the costs of selected newly identified ancillary services into payment for a primary service where we believe that the packaged item or service is integral, ancillary, supportive, dependent, or adjunctive to the provision of care that was reported by the primary service HCPCS code. While we did not propose any changes to the overall packaging policy, we proposed potential modifications to our packaging policy as described in the following sections. We did not receive any public comments on our overall packaging policy proposal and therefore, we are finalizing our proposal 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, as proposed for CY 2025. We did receive specific recommendations regarding C-APC packaging of Cell and Gene Therapies and associated products, which are addressed in section II.b.4 of this final rule with comment period, and the packaging of non-opioid treatments for pain relief, which are addressed in section XIII.E of this final rule with comment period. Additionally, commenters made recommendations on our packaging policies in the context of our diagnostic radiopharmaceutical proposal, which is discussed in the next section. c. Payment for Diagnostic Radiopharmaceuticals (1) 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. Because the products are packaged according to the policies in Sec. 419.2(b), we refer to them 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. In the CY 2008 OPPS/ASC final rule with comment period we finalized the packaging status of diagnostic radiopharmaceuticals as part of our overall enhanced packaging approach for the CY 2008 OPPS and subsequent years (72 FR 66635 through 66641). Importantly, we believed diagnostic radiopharmaceuticals are always intended to be used with a diagnostic nuclear medicine procedure and function as supplies when used in a diagnostic test or procedure, making it appropriate to package the payment for the diagnostic radiopharmaceutical into the payment for the related nuclear medicine procedure. Diagnostic radiopharmaceuticals 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 under the OPPS for diagnostic radiopharmaceuticals, not just when the products have pass-through payment status. Many of these commenters mentioned that pass- [[Page 93949]] 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. We have 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 reflect the costs of diagnostic radiopharmaceuticals more accurately. 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 hospital 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 and suggested that we 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 to establish appropriate payment rates in the future. Beginning January 1, 2008, CMS implemented OPPS edits that require hospitals to include a HCPCS code for a radiolabeled product when a separately payable nuclear medicine procedure is present on a claim. This policy to require hospitals to include a HCPCS code for a radiolabeled product for a separately payable nuclear medicine procedure ended in CY 2014 (78 FR 75033 through 75034). Many of these comments and our responses have been discussed in rulemaking since the policy to package diagnostic radiopharmaceuticals was adopted, and they prompted us to solicit comment on payment for diagnostic radiopharmaceuticals in the CY 2024 OPPS/ASC proposed rule (88 FR 49577). In that proposed rule, we stated 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, we reiterated our belief that the payment for the diagnostic radiopharmaceutical should be reflected within the payment for the primary procedure with which it is used. We noted that ratesetting uses the geometric mean of reported procedure costs, which in the example of nuclear medicine procedures includes the costs of the reported diagnostic radiopharmaceutical, 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 (ASP) of the specific items and services used in the procedure in each case. Furthermore, we explained that 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 diagnostic radiopharmaceutical packaged with the associated procedure should reflect the combined cost of the procedure and the radiopharmaceutical used in the procedure. As we have reiterated over the years, we believe packaging policies are inherent principles of the OPPS and are essential to a prospective payment system. At the same time, we have explained that we are 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 to ensure equitable payment and continued beneficiary access. 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. 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. Finally, we were interested in hearing from stakeholders how the suggested 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 suggested policy changes 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. 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. Commenters expressed concerns regarding the CMS policy to package diagnostic radiopharmaceuticals and the financial implications this policy has for facilities. 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 the radiopharmaceutical's pass-through status expires, especially if there is no clinical alternative to the radiopharmaceutical. Most commenters requested that CMS provide separate payment for diagnostic [[Page 93950]] radiopharmaceuticals. Some commenters believed paying separately for all diagnostic radiopharmaceuticals regardless of their per-day cost was the best methodology to avoid encouraging price inflation for diagnostic radiopharmaceuticals to reach a certain threshold. Other commenters thought that applying the existing OPPS per-day cost threshold ($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 and recognized that the $500 threshold number may be a more targeted approach relative to the OPPS drug packaging threshold as the higher cost diagnostic radiopharmaceuticals are the most disadvantaged by the OPPS packaging policy in their view. For the full discussion on the comment solicitation summarized here, refer to the CY 2024 OPPS/ASC final rule with comment period (88 FR 81573 through 81577). (2) Packaging Threshold for Diagnostic Radiopharmaceuticals As stated in the CY 2024 OPPS final rule with comment period (88 FR 81577), we agree with commenters that payment for diagnostic radiopharmaceuticals is a complex and important issue. We explained that we intended to further consider these points and take them into consideration for future notice and comment rulemaking. As described in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), after significant consideration and ongoing engagement from interested parties, we proposed a change to our current policy that packages diagnostic radiopharmaceuticals regardless of their cost. We continue to believe diagnostic radiopharmaceuticals are always intended to be used with a diagnostic nuclear medicine procedure and function as supplies when used in a diagnostic test or procedure, generally making it appropriate to package payment for them with payment for the related nuclear medicine procedure. In the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), we stated that while we continue to believe that this should be the policy for most diagnostic radiopharmaceuticals, we believe there are certain situations in which the packaged payment amount attributed to the diagnostic radiopharmaceutical used in an imaging procedure assigned to a nuclear medicine APC may not adequately account for the cost of a diagnostic radiopharmaceutical that has a significantly higher cost, but lower utilization relative to the other diagnostic radiopharmaceuticals that may be used with the procedure. In situations where a hospital may have to pay significantly more to purchase a diagnostic radiopharmaceutical than Medicare pays, a hospital may decide not to provide that specific diagnostic radiopharmaceutical imaging agent to Medicare beneficiaries. This could potentially deny access to diagnostic tools for which there is no clinical alternative. To ensure Medicare payment policy is not providing a financial disincentive to using high cost, low utilization diagnostic radiopharmaceuticals, especially when those agents may be the most clinically appropriate, and to ensure appropriate beneficiary access, we believe a subset of diagnostic radiopharmaceuticals with higher per day costs should be paid separately and not packaged into the diagnostic procedure with which the diagnostic radiopharmaceutical is used. To address these concerns, we proposed to pay separately for any diagnostic radiopharmaceutical with a per day cost greater than $630. Any diagnostic radiopharmaceutical with a per day cost below that threshold would continue to be policy packaged under the current policy at Sec. 419.2(b)(15). We discuss our proposed methodology for determining the proposed per day cost threshold of $630 in further detail in this section. To determine an appropriate threshold for our proposal, we estimated the approximate payment that would typically be attributable to diagnostic radiopharmaceutical payment within each nuclear medicine APC (APCs 5591, 5592, 5593, and 5594). We did this by assessing the offsets associated with these APCs that were directly attributable to ``policy packaged'' drugs. The offset amounts used are correlated with the approximate portion of APC payment associated with these ``policy packaged'' drugs. For nuclear medicine APCs, the primary ``policy packaged'' drugs are diagnostic radiopharmaceuticals. To calculate this threshold, we calculated a volume weighted average of the offset dollar amount of each nuclear medicine APC. This involved taking the offset percentage for ``policy packaged'' drugs, multiplying it by the APC geometric mean to get an offset dollar amount, and then multiplying that offset amount by the number of single claims to get the total offset amount for each nuclear medicine APC level. We then calculated the sum of the total offset amount for all 4 of the nuclear medicine APCs. We divided this number by the total number of single claims for all 4 nuclear medicine APCs, resulting in $314.28, which represents the volume weighted average policy packaged offset amount for the nuclear medicine APC series. We then took that number and multiplied it by 2, and rounded it to the nearest $5 increment, which resulted in $630. See Table 7 for the values used to calculate this threshold amount. We noted that the data values in Table 7 were collected without unpackaging the set of diagnostic radiopharmaceuticals listed in Table 8. We noted that if we finalized our proposal and those diagnostic radiopharmaceuticals were unpackaged, it would change the APC geometric mean unit costs (MUCs) as well as the offset percentages. This is why the APC geometric mean cost values listed below are not the same as in the addenda to this rule. [[Page 93951]] [GRAPHIC] [TIFF OMITTED] TR27NO24.011 The offset percentages used were updated based on the available data for the CY 2025 proposed rule and these offset percentages are usually the offsets that are published in the final rule. However, we included the data in Table 7 to illustrate how we arrived at the proposed $630 threshold. Additionally, the file and corresponding offset percentages used for the $630 threshold are similar to and consistent with the ones that can be found in the CY 2024 NFRM APC Offset File. These files are available via the internet on the CMS OPPS website.\7\ --------------------------------------------------------------------------- \7\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/annual-policy-files. --------------------------------------------------------------------------- We proposed to multiply by two the volume weighted average amount of the offset to establish the threshold triggering separate payment because this amount would ensure that separate payment would apply only to diagnostic radiopharmaceuticals whose costs significantly exceed the approximate amount of payment already attributed to the product in the nuclear medicine APC payment. This is consistent with the principles of a prospective payment system where some payments are lower than hospitals' costs while other payments are greater than a hospitals' costs. However, diagnostic radiopharmaceuticals with costs more than double the volume weighted average amount of the offset could present a hospital with a significant financial loss. This is why the OPPS has several payment provisions that rely on a multiplier of costs as a threshold for modifying payment. Our proposed approach to multiply the average offset amount by two is consistent with the two-times rule the OPPS uses to determine Ambulatory Payment Classification (APC) levels, where a significant service that has a cost greater than two times the lowest cost significant service in an APC is generally moved to a higher level APC in the series. The two-times rule requires that the highest calculated cost of an individual procedure categorized to any given APC cannot exceed two times the calculated cost of the lowest cost procedure categorized to that same APC. We note that the two-times rule does not apply to diagnostic radiopharmaceuticals themselves, but only to the procedures in which they are used, which is why we are proposing a diagnostic radiopharmaceutical packaging threshold utilizing a similar two-times methodology. As described in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), our proposed approach to multiply the average offset amount by two is also generally consistent with the OPPS outlier policy applicable to certain high-cost procedures, where costs greater than 1.75 times the APC payment trigger an additional outlier payment. 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. Outlier payments are provided on a service basis when the cost of a service exceeds the APC payment amount multiplier threshold (1.75) as well as the APC payment amount plus a fixed-dollar amount threshold. The proposed diagnostic radiopharmaceutical packaging threshold would serve a similar purpose as the outlier policy, in that it would provide payments to hospitals to help mitigate the financial risk associated with high-cost diagnostic radiopharmaceuticals, where a very costly diagnostic radiopharmaceutical could present a hospital with significant financial loss. We proposed a multiplier of two and explained that we believe two is the most appropriate number for the multiplier for the volume weighted average amount of the offset, but we sought comment on the alternatives of using 1.75 times the volume weighted average amount of the offset as the threshold amount for triggering separate payment, or another appropriate multiplier amount. We stated that, for example, an interested party could present data that a financial disincentive to use diagnostic radiopharmaceuticals exists when costs are 1.75 times, or three times or five times, the volume weighted average offset amount. Since the hospital outpatient outlier payment policy is a longstanding policy familiar to most hospitals, we sought comment on utilizing elements of that policy for purposes of our proposed diagnostic radiopharmaceutical packaging policy in order to help hospitals mitigate the financial risk that may be associated with furnishing high-cost and complex diagnostic radiopharmaceuticals. As previously mentioned, we sought comment on the use of 1.75 times as the multiplier threshold rather than 2. Although the outlier policy uses both a 1.75 multiplier threshold and a fixed-dollar threshold, we sought comment regarding the use of 1.75 as the multiplier to set a fixed dollar threshold for the volume weighted average amount of the offset as the goals of the [[Page 93952]] outlier policy and the proposed diagnostic radiopharmaceutical policy are similar. We also solicited comment on the alternative of using the standard drug packaging threshold, which was proposed to be $140 for CY 2025 and is being finalized as $140 for CY 2025 in section V.B of this final rule with comment period, as the threshold for separate payment for diagnostic radiopharmaceuticals. We believe that diagnostic radiopharmaceuticals are functioning as supplies to the nuclear medicine procedure in which they are used. Because diagnostic radiopharmaceuticals function as supplies in the diagnostic procedures in which they are used, they are serving as an item that is integral, ancillary, supportive, dependent, or adjunctive to the primary diagnostic service. This is in contrast to therapeutic drugs, biologicals, and therapeutic radiopharmaceuticals that are typically packaged under the standard drug packaging threshold. These products could be the only therapeutic modality provided to a patient during an encounter and may not serve as an item that is integral, ancillary, supportive, dependent, or adjunctive to the primary service. Due to this clinical difference, we did not believe that using the standard drug packaging threshold was appropriate for diagnostic radiopharmaceuticals, and therefore we proposed a threshold specific to diagnostic radiopharmaceuticals. As stated in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), we were interested to hear from commenters whether they agreed or disagreed with this assessment. Comment: A significant portion of commenters provided broad support for CMS's overall proposal regarding payment for diagnostic radiopharmaceuticals, stating that this policy will ensure access for Medicare beneficiaries, empower clinicians to make the best treatment decisions, and encourage innovation from industry. Commenters frequently stated that this policy will ensure access for underrepresented populations, which often have higher rates of disease but lower rates of detection. Response: We thank commenters for their support. Comment: Many commenters were supportive of CMS's proposal regarding separate payment for diagnostic radiopharmaceuticals, including the packaging threshold of $630. Commenters appreciated that CMS was targeting those products with costs that significantly exceeded the amount of the current packaged payment. These commenters supported the overall methodology and rationale for the calculation of the threshold, which was based on the approximate payment that would typically be attributable to diagnostic radiopharmaceuticals within each nuclear medicine APC by assessing the offsets associated with these APCs that were directly attributable to ``policy packaged'' drugs. Commenters generally agreed with using two times this amount to establish the threshold as they agreed it correlated with the statutory OPPS two times rule. Response: We thank commenters for their support of our proposal to create a $630 threshold and the associated methodology used to calculate that threshold. Comment: While many commenters were supportive of CMS's proposed $630 using the two times threshold multiplier, several said they also would not be opposed to a 1.75 multiplier, which would result in a $550 threshold. Other commenters advocated solely for a 1.75 multiplier citing consistency with the OPPS outlier policy, which they believed is a more appropriate comparator policy than the OPPS two times rule. Response: 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. Outlier payments are provided on a service basis when the cost of a service exceeds the APC payment amount multiplier threshold (1.75) as well as the APC payment amount plus a fixed-dollar amount threshold. An outlier payment is triggered when the cost of a service exceeds two different thresholds, a fixed dollar threshold and a multiplier threshold. A 1.75 multiplier is appropriate for the outlier payment policy as it is combined with a secondary fixed-dollar threshold, which is appropriate for the broader OPPS outlier policy which can apply to a large number of services with vastly different costs and payment amounts. For the OPPS outlier policy, two separate thresholds must be surpassed in order for separate payment to be made. We believe the lower 1.75 multiplier is appropriate for the outlier policy as there is also a secondary threshold that must be met to trigger outlier payments. The single threshold for separate payment for diagnostic radiopharmaceuticals would apply to a much narrower range of products; therefore, we do not believe the same two- threshold system used for OPPS outlier payments is practical. This makes a single threshold more appropriate, and because we are using a single threshold, we believe the higher two times multiplier is more appropriate, as there is not a secondary threshold that must also be surpassed. We believe our proposed approach to multiply the average offset amount by two to set the threshold is the most appropriate approach to determining this threshold, as this results in only those products whose costs significantly exceed, by two-times, the approximate amount of payment already attributed to the product in the nuclear medicine APC payment. This multiplier is consistent with the two-times rule the OPPS uses to determine Ambulatory Payment Classification (APC) levels, which also uses a single two times multiplier, rather than a two-threshold system like the OPPS outlier policy. The OPPS two times rule instructs that a significant service that has a cost greater than two times the lowest cost significant service in an APC is generally moved to a higher-level APC in the series. The two-times rule requires that the highest calculated cost of an individual procedure categorized to any given APC cannot exceed two times the calculated cost of the lowest cost procedure assigned to that same APC. A two times multiplier ensures that separate payment would apply only to diagnostic radiopharmaceuticals whose costs significantly exceed the approximate amount of payment already attributed to the product in the nuclear medicine APC payment. Comment: A few commenters suggested other thresholds, such as the OPPS drug packaging threshold, in order to treat diagnostic radiopharmaceuticals in a similar manner as other drugs, biologicals, and therapeutic radiopharmaceuticals paid under the OPPS. Commenters also believed that using a lower threshold actually decreased the likelihood that a provider would be financially incentivized to use a product above the threshold, as more products would be paid separately using a lower threshold. They believed a lower threshold decreased the likelihood of a non-clinical financial incentive to use a higher cost radiopharmaceutical. Other commenters believed using a $500 threshold would be appropriate as it coincided with the figure used for separate payment for diagnostic radiopharmaceuticals in draft legislation, titled the Facilitating Innovative Nuclear Diagnostics (FIND) Act. Commenters also suggested using an alternative threshold multiplier, such as 1.51, 1.50, or 1.25. These commenters thought these lower thresholds would [[Page 93953]] allow for more products to be paid separately and argued a cost for a diagnostic radiopharmaceutical even 25 percent higher than the average diagnostic radiopharmaceutical cost could be considered significant and warrant separate payment. Two commenters suggested reassessing the threshold based on the changing costs of products over time or assessing which products are driving the APC payments and then setting the threshold higher than the cost of those high-volume products. Response: We thank commenters for their comments; however, we believe the commenters' suggested thresholds are inconsistent with our OPPS two-times rule as described, which we believe is a longstanding and reasonable proxy for determining when costs exceed payment to a degree that warrants payment modification. The two-times rule utilizes a two times multiplier to determine APC levels, where a significant service that has a cost greater than two times the lowest cost significant service in an APC is generally moved to a higher-level APC in the series. The lower thresholds suggested by commenters would not follow this principle, and therefore, would not exclusively identify diagnostic radiopharmaceuticals whose costs significantly exceed the approximate amount of payment already attributed to the product in the nuclear medicine APC payment. We believe diagnostic radiopharmaceuticals are unique and therefore warrant their own specific threshold that is distinct from the broader drug packaging threshold used for therapeutic drugs, biologicals, and radiopharmaceuticals. This is because diagnostic radiopharmaceuticals are functioning as supplies to the nuclear medicine procedure in which they are used and are serving as an item that is integral, ancillary, supportive, dependent, or adjunctive to the primary diagnostic service. This is in contrast to therapeutic drugs, biologicals, and therapeutic radiopharmaceuticals that are typically packaged under the standard drug packaging threshold. These products could be the only therapeutic modality provided to a patient during an encounter and may not serve as an item that is integral, ancillary, supportive, dependent, or adjunctive to the primary service. Due to these differences, we believe a threshold specific to diagnostic radiopharmaceuticals is appropriate. Comment: Some commenters advocated that CMS use a threshold of at least $630. Several commenters believed that focusing separate payment on those radiopharmaceuticals whose costs significantly exceed the payment already attributable to the product will help concentrate the effects of unbundling on only those products that are most likely to create access issues for beneficiaries while reducing the broader effects on the nuclear medicine APCs. One commenter stated that unpackaging radiopharmaceuticals with per day costs greater than $630 would decrease the nuclear medicine APC procedure payment rates, but that decrease would be exacerbated if CMS used a lower threshold. Response: We thank commenters for their support. We agree a $630 threshold would appropriately identify only those diagnostic radiopharmaceuticals whose costs significantly exceed the approximate amount of payment already attributed to the product in the nuclear medicine APC payment. Comment: Several commenters requested that CMS clarify that the proposal does not alter the qualifications for pass-through payment status or the pass-through payment methodology for those diagnostic radiopharmaceuticals that apply for pass-through status under the OPPS. Response: That is correct. This policy is distinct from the policies described in section V.A of this final rule with comment period, which describe the qualifications and payment methodology for those products that qualify for OPPS pass-through status. Comment: A few commenters recommended CMS monitor the effects of this policy if finalized. For example, one commenter supported the proposal, but suggested CMS carefully monitor the affected nuclear medicine APCs and address any larger than expected alterations to their reimbursement or other unintended consequences. An additional commenter encouraged CMS to continue to evaluate this methodology as new products enter the market. This commenter recommended CMS ensure no unintended consequences of this policy occur, such as manufacturers purposefully pricing their products just above the payment threshold. Response: We thank the commenter for their support. We will monitor the effects of this policy and will consider proposing modifications in future rulemaking if appropriate. Comment: One commenter sought clarification from CMS that, if finalized, its proposal to provide separate payment for diagnostic radiopharmaceutical products would be implemented in a budget neutral manner. Response: Yes. This policy will be implemented in a budget neutral manner. After consideration of the public comments we received, we are finalizing this aspect of our proposal without modification and will pay separately for any diagnostic radiopharmaceutical with a per day cost greater than $630 for CY 2025. Any diagnostic radiopharmaceutical with a per day cost at or below that threshold will continue to be policy packaged under the current policy at Sec. 419.2(b)(15). (3) Calculating the Per Day Cost of Diagnostic Radiopharmaceuticals We proposed to calculate the per day costs for diagnostic radiopharmaceuticals using a methodology similar to the one we use for determining the per day costs of drugs and biologicals for comparison to the OPPS drug packaging threshold, proposed to be $140 for CY 2025. We proposed to calculate the per day cost based on the methodology described in section V.B.1.b of the CY 2025 OPPS/ASC proposed rule, which relies on the methodology in the CY 2006 OPPS/ASC proposed rule (70 FR 42723 and 42724) and finalized in the CY 2006 OPPS final rule with comment period (70 FR 68636 through 68638). Though the clinical use of the drugs, biologicals, and therapeutic radiopharmaceuticals differs from diagnostic radiopharmaceuticals, we believe the method of determining how much of that item is used per day should be similar. Therefore, we proposed to use a similar methodology for determining the per day costs of diagnostic radiopharmaceuticals, as we do drugs, biologicals, and therapeutic radiopharmaceuticals. This methodology consists of nine steps: Step 1. After application of the CCRs, we aggregated all line-items for a single date of service on a single claim for each product. This resulted in creation of a single line-item with the total number of units and the total cost of a diagnostic radiopharmaceutical given to a patient in a single day. Step 2. We then created a separate record for each diagnostic radiopharmaceutical by date of service, regardless of the number of lines on which the diagnostic radiopharmaceutical was billed on each claim. For example, ``diagnostic radiopharmaceutical X'' is billed on a claim with two different dates of service, and for each date of service, the diagnostic radiopharmaceutical is billed on two line-items with a cost of $10 and 5 units for each line-item. In this case, [[Page 93954]] the computer program would create two records for this diagnostic radiopharmaceutical, and each record would have a total cost of $20 and 10 units of the product. Step 3. We trimmed records with unit counts per day greater or less than 3 standard deviations from the geometric mean. Step 4. For each remaining record for a diagnostic radiopharmaceutical, we calculated the cost per unit of the diagnostic radiopharmaceutical. If the HCPCS descriptor for ``diagnostic radiopharmaceutical X'' is ``per 1 millicurie'' and one record was created for a total of 10 millicurie (as indicated by the total number of units for the diagnostic radiopharmaceutical on the claim for each unique date of service), the computer program divided the total cost for the record by 10 to give a per unit cost. We then weighted this unit cost by the total number of units in the record. We did this by generating a number of line-items equivalent to the number of units in that particular claim. Thus, a claim with 100 units of ``diagnostic radiopharmaceutical X'' and a total cost of $200 would be given 100 line-items, each with a cost of $2, while a claim of 50 units with a cost of $50 would be given 50 line items, each with a cost of $1. Step 5. We trimmed the unit records with cost per unit greater or less than 3 standard deviations from the geometric mean. Step 6. We aggregated the remaining unit records to determine the mean cost per unit of the diagnostic radiopharmaceutical. Step 7. Using only the records that remained after records with unit counts per day greater or less than 3 standard deviations from the geometric mean were trimmed (step 3), we determined the total number of units billed for each item and the total number of unique per-day records for each item. We divided the count of the total number of units by the total number of unique per day records for each item to calculate an average number of units per day. Step 8. We used the payment rate (the mean unit cost (MUC) derived from the CY 2023 hospital claims data) for each diagnostic radiopharmaceutical and multiplied the payment rate by the average number of units per day for each diagnostic radiopharmaceutical to arrive at its per day cost. Step 9. We packaged the items with per day costs less than or equal to $630 and designated items with per day costs greater than $630 as separately payable. As just described, to determine the proposed CY 2025 packaging status for all nonpass-through diagnostic radiopharmaceuticals, we proposed to use the per day cost, calculated on a HCPCS code-specific basis, of each diagnostic radiopharmaceutical that had a HCPCS code in CY 2023 and was paid (via packaged or separate payment) under the OPPS. We used data from CY 2023 claims processed through December 31, 2023, for this calculation. We proposed to continue to package payment for diagnostic radiopharmaceuticals with per day costs less than or equal to $630 under our existing packaging policy for diagnostic radiopharmaceuticals that function as surgical supplies under Sec. 419.2(b)(15). Similar to our policy for the drug packaging threshold, we proposed to use updated claims data to make final determinations of the packaging status of HCPCS codes for diagnostic radiopharmaceuticals for each OPPS/ASC final rule with comment period. We proposed to make an annual packaging determination for each diagnostic radiopharmaceutical HCPCS code only when we develop the OPPS/ASC final rule with comment period for the update year. We proposed that only diagnostic radiopharmaceutical HCPCS codes that are identified as separately payable in this final rule with comment period would be subject to quarterly updates. Consequently, the packaging status of some HCPCS codes for diagnostic radiopharmaceuticals in the OPPS/ASC proposed rule may differ from the same HCPCS codes' packaging status determined based on the data used for the final rule with comment period. Under these circumstances, we proposed to follow the established policies for the OPPS drug packaging threshold, which were initially adopted for the CY 2005 OPPS (69 FR 65780), to more equitably pay for those diagnostic radiopharmaceuticals whose costs fluctuate relative to the proposed CY 2025 OPPS diagnostic radiopharmaceutical packaging threshold in a way that affects the product's payment status (packaged or separately payable). Our policy for the OPPS drug packaging threshold has not changed for many years and is the same as described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434). We believe these same policies should apply to diagnostic radiopharmaceuticals in order to ensure payment consistency for those diagnostic radiopharmaceuticals whose costs fluctuate relative to the proposed CY 2025 OPPS diagnostic radiopharmaceutical packaging threshold. For CY 2025, similar to our historical practice for the drug packaging threshold, we proposed to apply the following policies to those HCPCS codes for diagnostic radiopharmaceuticals whose relationship to the diagnostic radiopharmaceutical packaging threshold changes based on the final updated data: HCPCS codes for diagnostic radiopharmaceuticals that are proposed for separate payment in CY 2025, and that then have per day costs equal to or less than the CY 2025 final rule diagnostic radiopharmaceutical packaging threshold, based on the updated hospital claims data used for the CY 2025 final rule, would remain packaged in CY 2025. HCPCS codes for diagnostic radiopharmaceuticals for which we proposed packaged payment in CY 2025 but that then have per-day costs greater than the CY 2025 final rule drug packaging threshold, based on updated hospital claims data used for the CY 2025 final rule, would receive separate payment in CY 2025. Comment: Most commenters were supportive of the methodology used to calculate the per day costs, and many commenters were able to analyze the cost data published with the proposed rule and calculate the same list of products with per day costs exceeding $630. Response: We thank commenters for their support of our proposal, and for their agreement with our calculations of the per day costs. Comment: A few commenters recommended CMS consider alternative methods of calculating per day costs and make refinements in the future as we gain more experience with this policy. Response: We thank commenters for their input. Our methods for calculating per day cost are consistent with our longstanding policies for calculating per day costs for purposes of the OPPS drug packaging threshold and we believe they should be finalized for CY 2025 and subsequent years. We could address this methodology in future rulemaking if the need arises; however, this methodology has worked effectively for calculating per day costs of drugs, biologicals and radiopharmaceuticals for purposes of the OPPS drug packaging threshold, and we believe this well-known process will work equally well for diagnostic radiopharmaceuticals to create a trimmed data set from which from per day costs can be calculated. Comment: Many commenters recommended that CMS not apply the proposed packaging rules in 2025 and pay separately for any product that was proposed for separate payment or that exceeds the cost threshold in the final rule data. Commenters stated that CMS [[Page 93955]] should only consider applying its proposed methodology after the separate payment threshold has been in effect for a reasonable period of time. Specifically, commenters recommended that HCPCS codes for diagnostic radiopharmaceuticals that are proposed for separate payment in CY 2025, and that then have per day costs equal to or less than the threshold for the final rule, be separately paid. Similarly, commenters believed HCPCS codes for diagnostic radiopharmaceuticals for which CMS proposed packaged payment in CY 2025 but that then have per-day costs greater than the CY 2025 final rule drug packaging threshold, based on updated hospital claims data used for the CY 2025 final rule, receive separate payment in CY 2025. Commenters stated that the claims data and the cost report data are updated between the proposed and final rule. Specifically, commenters noted that the determination of whether a diagnostic radiopharmaceutical will qualify for separate payment uses both units and mean cost calculated from Medicare claims data to determine the per day cost. As the mean cost estimate relies on cost-to-charge ratios, in the commenter's view, the diagnostic radiopharmaceutical packaging determination is susceptible to fluctuations in the mean cost estimate and those fluctuations are not necessarily driven by variation in the actual price of the product. The commenter stated that this is in contrast to ASP based payment rates, as ASP is an external estimate of product cost. Response: We thank commenters for their comments and understand their concerns about potential cost data fluctuations changing packaging determinations between the proposed and final rule. However, based on updated data for the final rule, the diagnostic radiopharmaceuticals that have per day costs that exceed $630 are the same 26 diagnostic radiopharmaceuticals that exceeded the $630 threshold using proposed rule data, meaning, for purposes of determining whether a product's per day cost exceeded $630, the updated data for the final rule did not change the list of qualifying products. After consideration of the public comments we received, we are finalizing our proposal regarding the calculation of per day costs of diagnostic radiopharmaceuticals without modification. Specifically, we are finalizing a policy to calculate the per day costs for diagnostic radiopharmaceuticals for purposes of determining whether a diagnostic radiopharmaceutical qualifies for separate payment using a methodology similar to the one we use for determining the per day costs of drugs and biologicals for comparison to the OPPS drug packaging threshold. We calculated the per day cost based on the methodology described in section V.B.1.b of this final rule with comment period, which relies on the methodology in the CY 2006 OPPS/ASC proposed rule (70 FR 42723 and 42724) and finalized in the CY 2006 OPPS final rule with comment period (70 FR 68636 through 68638). (4) Updating the Diagnostic Radiopharmaceutical Packaging Threshold in CY 2026 Starting in CY 2026 and subsequent years, we proposed to update the proposed threshold amount of $630 by the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from IHS Global, Inc (IGI). IGI is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the various price indexes including the Producer Price Index (PPI) Pharmaceuticals for Human Use (Prescription). This is the same as the update factor used for the OPPS drug packaging threshold, where we originally used the four-quarter moving average 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 the applicable calendar year. We believe it is appropriate to use the same PPI for Pharmaceuticals for Human Use (Prescription) for the diagnostic radiopharmaceutical packaging threshold, as diagnostic radiopharmaceuticals are also prescription pharmaceuticals for human use. We proposed that starting for CY 2026, we would use the most recently available four quarter moving average PPI levels to trend the final CY 2025 threshold forward from the third quarter of CY 2024 to the third quarter of CY 2025 and round the resulting dollar amount to the nearest $5 increment. We explained that the proposal to update the diagnostic radiopharmaceutical packaging threshold would maintain consistency with our longstanding methodology for updating the OPPS drug packaging threshold, which is discussed in more detail in section V.B.1.a. of this final rule with comment period and also in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68085 and 68086). Comment: The majority of commenters supported our proposal to update the final threshold by the PPI for Pharmaceuticals for Human Use (Prescription) in CY 2026 and future years. They stated this was appropriate to reflect the increasing cost of diagnostic radiopharmaceuticals annually. Response: We thank commenters for their support. Comment: A small number of commenters were not in favor of our proposal to update the threshold by the PPI for Pharmaceuticals for Human Use (Prescription). One commenter believed CMS should take a broader approach and comprehensively review the appropriateness of the threshold amount yearly based on data for that year. Response: We thank commenters for their insights; however, we continue to believe it is appropriate to subject the diagnostic radiopharmaceutical packaging threshold to the same update factor that is used for the OPPS drug packaging threshold as supported by the majority of commenters. Updating the finalized threshold by the PPI for Pharmaceuticals for Human Use (Prescription) is consistent with our longstanding policy to update the OPPS drug packaging threshold annually. This PPI update factor provides aggregate changes in the selling prices of pharmaceuticals, which makes it an appropriate factor with which to update the diagnostic radiopharmaceutical packaging threshold to ensure that as diagnostic radiopharmaceuticals' costs change over time, the threshold continues to identify products with costs that significantly exceed the otherwise applicable APC payment amounts as determined in this rule and that therefore should be eligible for separate payment. After consideration of the public comments we received, we are finalizing our proposal to update the finalized packaging threshold without modification. Specifically, starting in CY 2026 and for subsequent years, we will update the threshold amount of $630 by the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from IHS Global, Inc (IGI). (5) Amount of Separate Payment for Diagnostic Radiopharmaceuticals Exceeding the Threshold As discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), once we determine that the per day cost of a nonpass- through diagnostic radiopharmaceutical exceeds the cost threshold of $630 per day for CY 2025, we then proposed to assign that radiopharmaceutical to an APC, [[Page 93956]] making it a specified covered outpatient drug (SCOD) per section 1833(t)(14)(B) of the Act. Accordingly, we proposed to pay for those nonpass-through, separately payable diagnostic radiopharmaceuticals based on our authority under section 1833(t)(14)(A)(iii)(II) of the Act. While under this authority we would ordinarily use the ASP methodology under section 1847A of the Act, we find that the ASP data we have is not usable for payment purposes. As previously mentioned, radiopharmaceuticals are not required to report ASP under section 1847A of the Act, and as such, there are very few manufacturers reporting ASP for their products currently. As discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), of those few manufacturers reporting ASP, the ASP values that we do have generally do not align with the ASP we would expect based on the cost and Mean Unit Cost (MUC) data submitted to CMS by hospitals. For example, a frequently used diagnostic radiopharmaceutical had a reported ASP that is over 23,000 percent higher than the MUC derived from claims data. As manufacturers of diagnostic radiopharmaceuticals may be unaware of the correct reporting requirements, we explained that we believe it would be inappropriate to propose to pay for separately payable diagnostic radiopharmaceuticals based on their ASPs as currently reported, without giving manufacturers the opportunity to submit, certify, or restate the ASPs of their products. We believed MUC would be an appropriate proxy for the average price for a diagnostic radiopharmaceutical for a given year, as it is calculated based on the average costs for a particular year and is directly reflective of the actual cost data that hospitals submit to CMS. In the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), we stated that under our policy for therapeutic radiopharmaceuticals (74 FR 60520), there are several requirements for reporting ASP. For example, ASP data submitted would need to be provided for a patient- specific dose, or patient-ready form, of the radiopharmaceutical in order to properly calculate the ASP amount for a given HCPCS code if that HCPCS code dose descriptor was per study dose or similar. ASP data submitted should align with the code's dose descriptor and billing unit. We stated we would expect that the ASP data reported by a manufacturer would be representative of the item(s) sold by the manufacturer. We used the term ``patient-ready'' in that rule to ensure that ASP data submitted for OPPS payment purposes for separately payable radiopharmaceuticals reflect the costs of all the component materials of the finished radiopharmaceutical product. We expected that the ASP data would represent the sales price of all of the component materials of the finished radiopharmaceutical product sold by the manufacturer in terms that reflect the applicable HCPCS code descriptor such as ``per study dose'', ``per millicurie'' and ``up to XX millicuries.'' For the few manufacturers that reported ASP data for their diagnostic radiopharmaceuticals, we believed it may be possible that they are not aware of the reporting requirements or are unaware of how to properly report ASP for their product, as CMS has not used ASP as the basis of payment for nonpass-through diagnostic radiopharmaceuticals before. Therefore, we explained that we believe a reasonable alternative for CY 2025 for separate payment of diagnostic radiopharmaceuticals that exceed the per day cost threshold is to use of their mean unit cost from claims data. This is consistent with our current practice for therapeutic radiopharmaceuticals when ASP data is not available. For diagnostic radiopharmaceuticals, we believe that ASP data is effectively not available for purposes of determining a payment amount and, therefore, payment based on MUC is a reasonable alternative. We previously acknowledged (74 FR 35335), and continue to acknowledge, the complexities associated with reporting ASP for radiopharmaceuticals. We encourage manufacturers to submit ASP information for diagnostic radiopharmaceuticals, if possible. While we proposed to use MUC to pay for separately payable diagnostic radiopharmaceuticals in CY 2025, manufacturers can begin, or continue, to report ASP data for potential future use in paying for diagnostic radiopharmaceuticals. For CY 2025, ASP reporting is voluntary for diagnostic radiopharmaceuticals paid under the OPPS. We encouraged interested parties to submit comments regarding potential issues that may arise that prevent appropriate ASP reporting for diagnostic radiopharmaceuticals. If manufacturers choose to report ASP data, the data must meet reporting requirements to be used for payment under the OPPS. As discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), manufacturers that choose to report ASP data for their diagnostic radiopharmaceuticals would need to provide comprehensive data for CMS to calculate an ASP amount for a given HCPCS code. In instances where there is more than one manufacturer of a particular diagnostic radiopharmaceutical, we proposed that all manufacturers would need to submit ASP information for payment to be made based on ASP. This is because it would be inappropriate for Medicare payment for a HCPCS code to be based on the payment information submitted by one manufacturer, if that payment is used for a product made by different manufacturers. This is because the ASP information reported by one manufacturer might not reflect the ASP of the same product made by other manufacturers. We note that ASP submissions for radiopharmaceutical payment under the OPPS would need to meet all of the existing regulatory and subregulatory requirements of the ASP reporting process under sections 1847A and 1927(b)(3) of the Act. Specifically, we reiterated our ASP reporting requirements outlined in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60520) for products for which we are encouraging the reporting of ASP, but for which reporting is not statutorily required. The ASP data submitted would need to be provided for a patient-specific dose, or patient-ready form, of the diagnostic radiopharmaceutical in order to properly calculate the ASP amount that aligns with the dose descriptor for a given HCPCS code. When reporting an ASP for a separately payable radiopharmaceutical, we expect that the ASP data reported by a manufacturer would be representative of the item(s) sold by the manufacturer. In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60520), we used the term ``patient-ready'' to ensure that ASP data submitted for OPPS payment purposes for separately payable radiopharmaceuticals reflect the costs of all the component materials of the finished radiopharmaceutical product. We expect that the ASP data would represent the sales price of all of the component materials of the finished radiopharmaceutical product sold by the manufacturer in terms that reflect the applicable HCPCS code descriptor, such as ``per study dose'' or ``millicurie.'' We defined a ``patient-ready'' dose for OPPS purposes as including all component materials of the radiopharmaceutical, at a minimum, and any other processing the manufacturer requires to produce the radiopharmaceutical that it sells that are reflected in the sales price, including radiolabeling, as long as any fees paid for such processing done on behalf of [[Page 93957]] the manufacturer meet the definition of ``bona fide service fees'' under Sec. 414.802 (74 FR 60525). As discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), we understand that manufacturers of separately payable radiopharmaceuticals produce radiopharmaceuticals that require a variety of processing steps in order to prepare the product for administration to a beneficiary. To be used for separate OPPS radiopharmaceutical payment, the ASP data reported by a manufacturer must represent sales of all of the component materials associated with the radiopharmaceutical. For our full policy on which factors to incorporate into ASP pricing, please see the CY 2010 OPPS/ASC final rule with comment period (74 FR 60520 through 60521). In order to be used for payment under the OPPS, all radiopharmaceutical ASP submissions should meet the existing regulatory and subregulatory requirements of the ASP submission process under sections 1847A and 1927(b)(3) of the Act. In particular, we explained that we believe the ``bona fide service fee'' test in the ASP regulations is instructive here, and we refer readers to the CY 2010 OPPS/ASC final rule with comment period for our discussion on radiopharmaceutical ASP reporting (74 FR 60521). To summarize our CY 2010 policy for ASP reporting on radiopharmaceuticals for OPPS payment purposes (74 FR 60521), a patient-specific dose or patient-ready form in the context of OPPS ASP submission for radiopharmaceutical payment means that the ASP reflecting manufacturer sales must represent sales of all of the component materials for the radiopharmaceutical, including a minimum of a cold kit and a radioisotope, and be reported in terms that reflect the applicable HCPCS code descriptor, such as ``treatment dose'' or ``millicurie.'' The ASP would not necessarily take into account the preparation of the final form of the radiopharmaceutical for patient administration, including radiolabeling, which may be conducted by the manufacturer, freestanding radiopharmacy, hospital pharmacy, or other entity. With respect to the latter, fees paid by the manufacturer for these services would be excluded from the ASP calculation (that is, would not be considered price concessions that reduce the ASP) only if they are ``bona fide service fees'' as defined in the regulations governing ASP. Thus, if the manufacturer pays a ``bona fide service fee'' for the services of the freestanding radiopharmacy, hospital pharmacy, or other entity, and reflects that fee in its price for the radiopharmaceutical, the amount of the ``bona fide service fee'' would be taken into account in the reported ASP data. However, manufacturers are not required to pay for the preparation of a radiopharmaceutical (including radiolabeling) in a freestanding radiopharmacy, hospital pharmacy, or other entity after sale of all of the component materials, and in that case, the cost of those services would not be reflected in the ASP data submitted to CMS. Manufacturers should submit ASP data for a separately payable radiopharmaceutical that incorporates prices for sales of all of the component materials by the manufacturer. We sought comment on these ASP reporting requirements outlined in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60521) and previous CMS guidance on the guidelines for the Submission of OPPS ASP Data for Nonpass-Through Separately Payable Therapeutic Radiopharmaceuticals and Radiopharmaceuticals with Pass-Through Status.\8\ We continue to believe that these ASP reporting practices should be applicable to radiopharmaceuticals, including both therapeutic and diagnostic radiopharmaceuticals, but sought comment from interested parties in this space to ensure that these reporting guidelines are clear and reflective of clinical practice today. --------------------------------------------------------------------------- \8\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/opps_asp_radiopharm_guidance10302009.pdf. --------------------------------------------------------------------------- We mentioned in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222) that we still see the potential value in the use of ASP data for payment purposes for diagnostic radiopharmaceuticals when reported correctly and by all manufacturers who manufacture a product that is described by a given HCPCS code. We stated that we believe that the use of ASP information for OPPS payment could provide an opportunity to improve payment accuracy for separately payable diagnostic radiopharmaceuticals by applying an established methodology that has already been successfully implemented under the OPPS for other separately payable drugs and biologicals, as well as therapeutic radiopharmaceuticals. Because the per day cost calculations determine whether a diagnostic radiopharmaceutical qualifies for separate payment, using the most accurate pricing information is paramount. The use of ASP information could provide an opportunity to further improve the accuracy of the per day cost calculations and the separate payment amounts for diagnostic radiopharmaceuticals. As previously mentioned, we do not believe that the limited amount of ASP information submitted currently is adequate for the purpose of determining separate payment for those few products that currently do report ASP, which is why we proposed to pay diagnostic radiopharmaceuticals with per day costs above the $630 threshold at each diagnostic radiopharmaceutical's mean unit cost. However, we were still interested in the potential to use ASP for the purpose of determining a diagnostic radiopharmaceutical's per day cost and payment amount in the future. Therefore, we wanted to engage with interested parties to learn about the unique aspects and challenges that may be associated with reporting ASP for diagnostic radiopharmaceuticals, and radiopharmaceuticals in general. We specifically sought comment as to whether interested parties believe CMS should require payment for diagnostic radiopharmaceuticals to be based on ASP in the future, such as in CY 2026 rulemaking, if interested parties are confident in their reporting ability. We discussed in the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222) that we do believe that there could be situations in which it is appropriate to use ASP currently. For example, in section V.A.4 of the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), we proposed to utilize ASP in payment for diagnostic radiopharmaceuticals on OPPS transitional pass-through status. In this situation, we believed the use of ASP is appropriate as the manufacturer of that diagnostic radiopharmaceutical is actively involved in the radiopharmaceutical's pass-through application, and CMS can ensure that pricing is reported appropriately for purposes of the drug pass-through cost significance tests and for purposes of payment if the pass-through status is approved. Typically, there is only one manufacturer for a diagnostic radiopharmaceutical applying for pass- through status, so CMS does not have to ensure all manufacturers are reporting ASP for that particular HCPCS code prior to establishing a separate payment amount based on ASP. Additionally, as discussed in section V.B.5 of the CY 2025 OPPS/ASC proposed rule (Proposed Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals with HCPCS Codes but Without OPPS Hospital [[Page 93958]] Claims Data), we proposed to base the initial payment for new diagnostic radiopharmaceuticals with HCPCS codes, but which do not have pass-through status and are without claims data, on ASP, and on WAC if ASP data for these diagnostic radiopharmaceuticals are not available. If the WAC also is unavailable, we proposed to make payment for new diagnostic radiopharmaceuticals at 95 percent of the products' most recent AWP. We believe the volume of products in this category will typically be very low; however, in these rare situations, we believe it would be appropriate to use ASP until a MUC is available. Similar to drugs applying for pass-through status, there is typically only one manufacturer for a diagnostic radiopharmaceutical that is new and described by a HCPCS code, but without claims data, so CMS does not have to ensure all manufacturers are reporting ASP for that particular HCPCS code prior to establishing a separate payment amount based on ASP. Additionally, although reporting of ASP is not a condition of CMS approving a HCPCS application, CMS has the opportunity to actively engage with the manufacturer, or sponsor of a HCPCS application, during the HCPCS application process. This allows for ongoing dialogue and education regarding the unique ASP reporting requirements that may be associated with a particular product, including how to ensure the reported ASP aligns with the dose descriptor for the newly assigned HCPCS code. We sought comments on additional unique situations in which it still may be appropriate for CMS to use ASP information to assess per day costs and payment amounts for diagnostic radiopharmaceuticals for CY 2025. For example, we stated that one such unique situation could be continuing the use of ASP for a particular HCPCS code once its pass- through status has ended, if the HCPCS code was actively being paid based on ASP while on pass-through status. Under our proposal, payment for a diagnostic radiopharmaceutical would be based on MUC once its pass-through status ends. We sought comment on this potential unique situation, as well as others of which readers may be aware. We stated that we may finalize utilizing ASP in additional situations that commenters bring to our attention in the final rule as policies for CY 2025 depending on comments received. As discussed, we proposed to base the payment rate for diagnostic radiopharmaceuticals on mean unit cost data derived from hospital claims. We did not propose to use ASP data for determining payment rates of nonpass-through diagnostic radiopharmaceuticals with claims data but are seeking comment on its use for determining the per day cost and setting the payment rate for diagnostic radiopharmaceuticals in the future. Additionally, we did not propose to use WAC or AWP as a basis for payment for diagnostic radiopharmaceuticals. Similar to our reasoning for payment of therapeutic radiopharmaceuticals in the CY 2012 OPPS/ASC final rule with comment period (77 FR 68390), we believe that paying for diagnostic radiopharmaceuticals using mean unit cost would appropriately pay for the average price of nonpass-through separately payable diagnostic radiopharmaceuticals for the applicable year. We believe MUC is an appropriate proxy for the average price for a diagnostic radiopharmaceutical for a given year, as it is calculated based on the average costs for a particular year and is directly reflective of the actual cost data that hospitals submit to CMS. As we stated in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60523), we believe that WAC or AWP is not an appropriate proxy to provide OPPS payment for average therapeutic radiopharmaceutical acquisition cost and associated handling costs when manufacturers are not required to submit ASP data because payment based on WAC or AWP for separately payable drugs and biologicals is usually temporary for a calendar quarter until a manufacturer is able to submit the required ASP data in accordance with the quarterly ASP submission timeframes for reporting under section 1847A of the Act. However, WAC and AWP reported to compendia may not be reflective of a patient ready dose. We are additionally concerned about the use of WAC and AWP since ASP reporting for OPPS payment of separately payable diagnostic radiopharmaceuticals would not be required for CY 2025. The absence of appropriate ASP reporting could result in payment for a separately payable diagnostic radiopharmaceutical based on WAC or AWP indefinitely, a result which we believe would be inappropriate, as these pricing metrics do not capture all of the pricing discounts that may be reflected in the ASP. In the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222), we stated that given all of the concerns we had with other pricing methodologies for diagnostic radiopharmaceuticals, we proposed to rely on CY 2023 mean unit cost data derived from hospital claims data for payment rates for diagnostic radiopharmaceuticals for CY 2025. Our proposed payment methodology for diagnostic radiopharmaceuticals that have costs above a $630 threshold would be similar, but not the same, as the methodology adopted for therapeutic radiopharmaceuticals as described in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60518). Although therapeutic radiopharmaceuticals are generally targeted at treating a certain disease or condition, and diagnostic radiopharmaceuticals are generally targeted at diagnosing a certain disease or condition, we believe they are clinically very similar products, manufactured in a similar manner, and should generally be paid using a similar payment methodology when paid separately. As such, we stated that we believe the same payment method as is used for therapeutic radiopharmaceuticals should apply to diagnostic radiopharmaceuticals above the cost threshold. However, as previously discussed, given our concerns with current ASP reporting patterns, we proposed to use MUC as the basis of payment for nonpass- through diagnostic radiopharmaceuticals for CY 2025. Therefore, we explained that we believe it is appropriate for the methodology to determine the proposed payment amounts to differ between diagnostic and therapeutic radiopharmaceuticals, at least for CY 2025. We stated that we will consider aligning the payment methodologies between therapeutic and diagnostic radiopharmaceuticals, either based on ASP or MUC, in future rulemaking. We explained that we believe that mean unit cost data is an appropriate and adequate proxy for the average price for diagnostic radiopharmaceuticals and associated handling costs for these products. Mean unit cost data is reflective of the actual cost data that hospitals submit to CMS. The MUC payment methodology is consistent with our payment policy for therapeutic radiopharmaceuticals as stated in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60523) and is currently the basis of payment for many therapeutic radiopharmaceuticals when ASP is unavailable. As previously discussed, we find that the ASP data we have is not usable for the purpose of paying for diagnostic radiopharmaceuticals and, therefore, we proposed to pay for qualifying nonpass-through diagnostic radiopharmaceuticals with claims data based on MUC. However, we also sought comment on how we could [[Page 93959]] potentially use our equitable adjustment authority at section 1833(t)(2)(E) of the Act to make an adjustment to the ASP data that has been reported in order to make it usable for the purpose of paying equitably for these products. For example, we sought comment as to whether CMS could use its equitable adjustment authority to adjust payment for diagnostic radiopharmaceuticals based on an adjusted ASP value when the ASP amounts reported to CMS deviate by a given threshold, such as two times the MUC calculated for the diagnostic radiopharmaceutical using claims data. Alternatively, the adjusted payment rate could be an average of the reported ASP and MUC, or other methodologies suggested by commenters. We broadly sought comment on this potential use of equitable adjustment authority to make the limited ASP data reported for diagnostic radiopharmaceuticals usable for purposes of setting payment rates for qualifying products. We note, if readers do not believe it is appropriate for CMS to base the payment amount for diagnostic radiopharmaceuticals on MUC for CY 2025, we proposed in the alternative to maintain our current policy of unconditionally policy packaging all diagnostic radiopharmaceuticals regardless of their cost until an appropriate payment methodology can be established to determine a separate payment amount for diagnostic radiopharmaceuticals. We stated that HCPCS codes that describe diagnostic radiopharmaceuticals with per day costs that meet or exceed the proposed diagnostic radiopharmaceutical packaging threshold would be assigned to a status indicator of ``K'', indicating separate payment. An APC and a payment rate would be assigned as shown in Addendum B to the proposed rule. HCPCS codes that describe diagnostic radiopharmaceuticals with per day costs that are at or below the proposed diagnostic radiopharmaceutical packaging threshold would continue to be assigned to a status indicator of ``N'', indicating packaged payment. We welcomed comment on these determinations. The proposed list of diagnostic radiopharmaceuticals that we calculated as having per day costs that exceed $630 and their proposed status indicators can be found in Table 8. [[Page 93960]] [GRAPHIC] [TIFF OMITTED] TR27NO24.012 Proposed definitions of status indicators were included in Addendum D1 to the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222). Addenda to that proposed rule can be found on the CMS OPPS web page. We proposed corresponding regulation text edits at Sec. 419.2(b)(15) to only package diagnostic radiopharmaceuticals when their per day cost is at or below the per day diagnostic radiopharmaceutical packaging threshold for the applicable year. Specifically, we proposed to add the text ``at or below the per-day diagnostic radiopharmaceutical packaging threshold for the applicable year'' to qualify the packaging of diagnostic radiopharmaceuticals. We also proposed corresponding regulation text edits at Sec. 419.41 (Calculation of national beneficiary copayment amounts and national Medicare program payment amounts) to codify our proposed payment policy for diagnostic radiopharmaceuticals and our existing policy for therapeutic radiopharmaceuticals. Comment: Commenters were largely supportive of CMS's proposal to pay diagnostic radiopharmaceuticals based on their mean unit cost for CY 2025. Commenters applauded CMS for recognizing that the uniqueness of diagnostic radiopharmaceuticals could lead to some difficulty or uncertainty around reporting other pricing data, such as Average Sales Price (ASP), for these products. Additionally, commenters generally seemed to understand CMS's concerns with using ASP as a basis for payment broadly for CY 2025 given the limited information available. Response: We thank commenters for their support of our proposal. Comment: Although the majority of commenters were generally supportive of using mean unit cost as the basis for diagnostic radiopharmaceutical payment for CY 2025, many of these commenters saw the use of MUC as a transitional step, and recommended CMS consider Average Sales Price as the [[Page 93961]] methodology to determine the payment amount as soon as possible. Other commenters suggested specific unique situations in which they believed it would be appropriate for CMS to use ASP, such as when a product's OPPS pass-through status expires if the product was being paid based on ASP while on OPPS pass-through status. Similarly, some commenters expressed some drawbacks to using MUC as a payment amount rather than ASP, such as that mean unit cost depends on hospital cost to charge ratios and uses cost data from prior years, rather than from the current payment year. Similarly, a commenter communicated that the MUC methodology underestimates the actual costs to hospitals for higher priced technologies due to charge compression which, in their view, may result in an inaccurate payment rate for a product compared to the actual acquisition cost for a product by a given hospital. Commenters stated that using ASP information was consistent with payment for drugs under the OPPS, and they also stated that ASP information was an established methodology that could provide an opportunity to improve payment accuracy. Commenters believed there was value in using ASP as the basis of payment, and although they acknowledged CMS may not have access to ASP data for patient ready doses for all diagnostic radiopharmaceuticals, commenters recommended we transition to an ASP-based payment. Some commenters stated their belief that separate payment will incentivize reporting of ASP data. CMS was urged to work with manufacturers to obtain ASP data and only consider basing payment on ASP when such data are determined to be reliable. Commenters also recommended that CMS provide at least one year notice of its intent to base payment on ASP to facilitate the most complete reporting and consistent payment methodologies across products. Response: We thank commenters for their feedback and considerations on our proposal. Our concerns from the proposed rule remain for the final rule, in that there are very few manufacturers reporting ASP for their products currently, and of those few manufacturers reporting ASP, the ASP values that we do have generally do not align with the ASP we would expect based on the cost data submitted to CMS by hospitals. While a small number of manufacturers may be reporting ASP correctly, such as those recently on OPPS pass-through status, we believe a consistent payment methodology is most appropriate for nonpass-through diagnostic radiopharmaceuticals with per day costs above the threshold. We do agree that there could be some value in the use of ASP for determining a payment amount in the future; however, if we were to use the ASP methodology, we believe there must be more consistent, validated, and universal reporting in order for ASP to be a viable payment methodology. To maintain a consistent payment methodology for CY 2025, we believe it is appropriate to treat all nonpass-through diagnostic radiopharmaceuticals with claims data the same and pay using MUC without exception, such as for products with recent pass-through expiration. Comment: Commenters expressed a broad interest in using ASP data and learning how to report that data appropriately to CMS, including regarding topics such as ``bona fide service fees.'' Commenters indicated a desire to learn more about how they could report ASP for their specific products. Many manufacturers expressed their intent to initiate discussions with CMS in order to potentially begin to report ASP data. Response: We thank commenters for expressing their interest in use of ASP data and appropriate ASP reporting. As we have previously stated, and as commenters have noted, we recognize the complexities associated with reporting ASP for radiopharmaceuticals. We encourage ongoing engagement with CMS in order for manufacturers to provide information regarding their products' unique reporting complexities. Comment: Some commenters recommended CMS continue to consider the appropriateness of other sources of cost data for future years, such as wholesale acquisition cost (WAC). Response: We continue to believe that neither WAC nor AWP is an appropriate proxy to provide OPPS payment for average radiopharmaceutical acquisition costs and associated handling costs when manufacturers are not required to submit ASP data. This is because payment based on WAC or AWP for separately payable drugs and biologicals is usually temporary for a calendar quarter until a manufacturer is able to submit the required ASP data in accordance with the quarterly ASP submission timeframes for reporting under section 1847A of the Act. WAC and AWP reported to compendia may not be reflective of a patient ready dose. The absence of an ASP reporting requirement and inappropriate or no reporting of ASP could result in payment for a separately payable diagnostic radiopharmaceutical based on WAC or AWP indefinitely, a result which we believe would be inappropriate, as these pricing metrics do not capture all of the pricing discounts that may be reflected in the ASP. Comment: Some commenters were concerned about potential fluctuations in MUC data and the effect on payment for separately payable diagnostic radiopharmaceuticals. Several commenters recommend CMS apply its low volume APC policy to diagnostic radiopharmaceutical APCs, stating that CMS's policy for setting payment rates for low volume APCs, defined as those with fewer than 100 claims, by using up to four years of claims data and basing the rate on the highest value among the arithmetic mean, geometric mean, or median improves payment rate stability for low volume APCs. Response: We thank commenters for their recommendations. We did not propose to subject low volume diagnostic radiopharmaceutical APCs to the broader OPPS low volume policy, and we note that the low volume APC policy does not apply to APCs to which single drugs, biologicals, or radiopharmaceuticals are assigned, even if there is a low volume of claims for these items. We understand the commenter's concerns; however, we do not believe it would be appropriate to finalize this policy modification without further engagement from interested parties. While we agree this suggested policy modification could result in greater payment stability, we want to ensure that there are no unintended consequences of such a policy, such as an unintended decrease in the overall MUC payment rate as a result of using 4 years of cost data. We encourage additional engagement on this issue. Comment: A commenter noted that we proposed that only diagnostic radiopharmaceutical HCPCS codes that are identified as separately payable in the final rule with a comment period would be subject to quarterly updates. The commenter was unsure why quarterly updates would be necessary for MUC-based payment, which they expect would be established annually as part of the rulemaking process and thus not be subject to quarterly updates. Response: We thank the commenter for this comment and confirm that their understanding is correct. MUC will be calculated on an annual basis for the payment of nonpass-through diagnostic radiopharmaceuticals with per day costs exceeding $630. Because we are not adopting an ASP-based payment approach at this time, there is no need to update the payment amounts [[Page 93962]] quarterly as the MUC will be set in this final rule for the entire calendar year. Comment: A few commenters believed that the product Magtrace, which may be described by HCPCS code A9697 (Injection, carboxydextran-coated superparamagnetic iron oxide, per study dose), was inappropriately assigned to a packaged payment status for the proposed rule and should be subject to this policy and designated for separate payment in the final rule. One commenter stated that the product is a magnetic tracer indicated to assist in localizing lymph nodes draining a tumor site, as part of a sentinel lymph node biopsy procedure in patients with breast cancer undergoing mastectomy or lumpectomy. The commenter stated that when HCPCS code A9697 was first incorporated in the October 2023 OPPS Update Transmittal, it was in a table titled ``Table 15.--Newly Established HCPCS Codes for Drugs, Biologicals, and Radiopharmaceuticals as of October 1, 2023'' and that Medicare Administrative Contractors (MACs) have indicated that HCPCS codes in the A9500-A9700 range, which the Magtrace code falls within, are for radiopharmaceuticals. Response: We note that this product is not radioactive 9 10 and is regulated by the FDA as a medical device under the product name ``Magtrace and Sentimag Magnetic Localization System'' with a premarket approval.\11\ Accordingly, we do not believe that this product qualifies as a diagnostic radiopharmaceutical, and do not believe that it should be paid separately under this policy. We believe this product functions as a supply when used in a diagnostic test or procedure and should continue to be packaged under 42 CFR 419.2(b)(15). Please see section V.A. of this final rule with comment period for the payment status of HCPCS code A9697 for CY 2025. --------------------------------------------------------------------------- \9\ Per the manufacturer's website: ``Is Magtrace Radioactive? No. Magtrace is the world's first non-radioactive tracer to offer dual identification. This not only facilitates the eradication of radioactive products from the OR, but provides psychological benefits for the patient.'' https://www.endomag.com/resources/faqs/magtrace/?product=magtrace. \10\ Per the manufacturer's website: ``Magtrace[supreg] is a uniquely designed non-radioactive liquid tracer used to map the potential spread of cancer to the axilla in sentinel lymph node biopsy procedures. The liquid is made up of tiny particles of iron oxide, coated in sugar and suspended in saline.'' https://www.endomag.com/resources/faqs/magtrace/. \11\ https://www.fda.gov/medical-devices/recently-approved-devices/magtrace-and-sentimag-magnetic-localization-system-p160053s002. --------------------------------------------------------------------------- Comment: Broadly, commenters suggested that CMS subject additional classes of drugs, such as contrast agents to this policy. For example, a commenter discussed one such product, Cysview, which may be described by HCPCS code A9589 (Instillation, hexaminolevulinate hydrochloride, 100 mg), and believed CMS's reasoning in the proposed rule for unpackaging and paying separately for diagnostic radiopharmaceuticals applies equally to their product. The commenter believed lack of separate payment was a barrier to beneficiary access and recommended CMS pay for products like theirs when the products' costs exceeded a certain threshold. Response: We thank the commenters for their feedback. We continue to believe that our packaging policies are 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. We will take the information commenters provided into consideration as appropriate for possible future rulemaking. After consideration of the public comments we received, we are finalizing our proposal without modification. In summary, for CY 2025 we are paying separately for any diagnostic radiopharmaceutical with a per day cost greater than $630 using the methodology described. Any diagnostic radiopharmaceutical with a per day cost at or below that threshold would continue to be policy packaged under our longstanding policy at Sec. 419.2(b)(15). We are finalizing our proposal regarding updating the selected packaging threshold without modification. Specifically, starting in CY 2026 and for subsequent years, we will update the threshold amount of $630 by the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from IHS Global, Inc (IGI). We are finalizing our proposal to pay for those nonpass-through, separately payable diagnostic radiopharmaceuticals based on our authority under section 1833(t)(14)(A)(iii)(II) of the Act, and as we find that the ASP data we have is not usable for the purpose of paying for diagnostic radiopharmaceuticals, we are paying for qualifying nonpass-through diagnostic radiopharmaceuticals with claims data based on mean unit cost data derived from hospital claims. We believe that paying for diagnostic radiopharmaceuticals using mean unit cost would appropriately pay for the average price of nonpass-through separately payable diagnostic radiopharmaceuticals for the applicable year. We believe MUC is an appropriate proxy for the average price for a diagnostic radiopharmaceutical for a given year, as it is calculated based on the average costs for a particular year and is directly reflective of the actual cost data that hospitals submit to CMS. The finalized list of diagnostic radiopharmaceuticals that have calculated per day costs that exceed $630 and their status indicators can be found in Table 9. [[Page 93963]] [GRAPHIC] [TIFF OMITTED] TR27NO24.013 Definitions of status indicators can be found in Addendum D1 to this final rule with comment period. Addenda to this final rule with comment period can be found on the CMS OPPS web page. Additionally, we are finalizing with slight modification corresponding regulation text edits at Sec. 419.2(b)(15) to only package diagnostic radiopharmaceuticals when their per day cost is at or below the per day diagnostic radiopharmaceutical packaging threshold for the applicable year. We are adding the language ``with per-day costs at or'' to the regulation text as a technical change to conform with our final policy as the prior text did not make it clear that the per day cost of a diagnostic radiopharmaceutical must be at or below the per-day diagnostic radiopharmaceutical packaging threshold in order for the product to be packaged. Overall, this regulation text is changed by adding the text ``with per-day costs at or below the per-day diagnostic radiopharmaceutical packaging threshold for the applicable year'' rather than only ``below the per-day diagnostic radiopharmaceutical packaging threshold for the applicable year'' to qualify the packaging of diagnostic radiopharmaceuticals. Aside from those changes described in V.B.5 of this CY 2025 OPPS/ASC final rule with comment period to conform with our payment policy for nonpass- through diagnostic radiopharmaceuticals in situations in which claims data are not available, we are finalizing without modification corresponding regulation text edits at Sec. 419.41 (Calculation of national beneficiary copayment amounts and national Medicare program payment amounts) to codify our proposed payment policy for diagnostic radiopharmaceuticals and our existing policy for therapeutic radiopharmaceuticals. [[Page 93964]]

4. Implementation of Section 4135 of the Consolidated Appropriations

Act (CAA) 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. As the additional payments are required to begin on January 1, 2025, we proposed and are finalizing a policy to implement the CAA, 2023 section 4135 amendments in this final rule with comment period. Our finalized policy to implement section 4135 of CAA, 2023 can be found in section XIII.E of this final rule with comment period.

5. 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 2024 OPPS/ ASC final rule with comment period (88 FR 81577 through 81578), we applied this policy and calculated the relative payment weights for each APC for CY 2024 that were shown in Addenda A and B of the CY 2024 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 2024 OPPS/ASC final rule with comment period (88 FR 81549 through 81572). For CY 2025, as we did for CY 2024, we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2025 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 2025, as we did for CY 2024, we proposed to continue to standardize all of the relative payment weights to APC 5012. We believe that standardizing relative payment weights to the geometric mean of the APC to which HCPCS code G0463 is assigned maintains consistency in calculating unscaled weights that represent the cost of some of the most frequently provided OPPS services. For CY 2025, as we did for CY 2024, 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 2025 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 2024 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2025 unscaled relative payment weights. For CY 2024, we multiplied the CY 2024 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2023 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 2025, we proposed to apply the same process using the estimated CY 2025 unscaled relative payment weights rather than scaled relative payment weights. We proposed to calculate the weight scalar by dividing the CY 2024 estimated aggregate weight by the unscaled CY 2025 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/regulations-notices. Click on the link labeled ``Hospital Outpatient Prospective Payment--Notice of Proposed Rulemaking with Comment Period (NPRM)'' for 2025, which can be found under the heading ``Hospital Outpatient Regulations and Notices'' and open the claims accounting document link, which is labeled ``2025 NPRM OPPS Claims Accounting (PDF).'' We proposed to compare the estimated unscaled relative payment weights in CY 2025 to the estimated total relative payment weights in CY 2024 using CY 2023 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 2025 unscaled relative payment weights for purposes of budget neutrality. We proposed to adjust the estimated CY 2025 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.4452 to ensure that the proposed CY 2025 relative payment weights are scaled to be budget neutral. The proposed CY 2025 relative payment weights listed in Addenda A and B to the 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 this final rule with comment period. 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 [[Page 93965]] 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 this final rule with comment period) is included in the budget neutrality calculations for the CY 2025 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 CY 2025 OPPS/ASC proposed rule, without modification, for CY 2025. For CY 2025, as we did for CY 2024, we will continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2025 using geometric mean-based APC costs. For CY 2025, as we did for CY 2024, 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 2024 scaled relative payment weights to the estimated aggregate weight using the CY 2025 unscaled relative payment weights. Using updated final rule claims data, we are updating the estimated CY 2025 unscaled relative payment weights by multiplying them by a weight scalar of 1.4452 to ensure that the final CY 2025 relative payment weights are scaled to be budget neutral. The final CY 2025 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 2025 IPPS/Long Term Care Hospital (LTCH) PPS proposed rule (89 FR 36204), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2023 forecast, the proposed FY 2025 IPPS market basket percentage increase was 3.0 percent. In the CY 2025 OPPS/ASC proposed rule, we noted that under our regular process for the CY 2025 OPPS/ASC final rule with comment period, we would use the market basket update for the FY 2025 IPPS/LTCH PPS final rule (89 FR 68986). We explained that if that forecast is different than the IPPS market basket percentage increase used for the proposed rule, the CY 2025 OPPS/ASC final rule with comment period OPD fee schedule increase factor would reflect that updated forecast of the market basket percentage increase. For CY 2025, we proposed to use the estimate of the hospital inpatient market basket percentage increase of 3.0 percent as one component to calculate the OPD fee schedule increase factor. Comment: Two commenters expressed their support for the proposed hospital inpatient market basket increase of 3.0 percent. Response: We appreciate the support of the commenters. Comment: Several commenters expressed concerns that the proposed CY 2025 market basket update does not adequately reflect the rising inflation and costs that hospitals have faced over the last few years. Commenters stated that economy-wide inflation grew by 12.4 percent from 2021 through 2023 (as measured by the Consumer Price Index (CPI)), more than two times faster than Medicare reimbursement for hospital outpatient services, which increased by 5.9 percent during the same time. A commenter noted that the US Health Care Inflation Rate (USHCIR) for June 2024 was 3.3 percent and long-term USHCIR was 5.1 percent. Another commenter noted that inflation for hospital services in July 2024 was 6.1 percent. The commenters observed these rates are substantially higher that the proposed market basket increase. Many commenters stated that rapid and sustained growth in labor costs have put persistent cost pressure on hospitals. They also noted increases in drug prices, citing a recent study and a report by the Health and Human Services (HHS) Assistant Secretary for Planning and Evaluation which found that in 2022 and 2023, prices for nearly 2,000 drugs increased faster than the rate of general inflation, with an average price increase of 15.2 percent. Several commenters also stated that hospitals have seen significant growth in administrative costs due to what they described as inappropriate practices by large commercial health insurers, including Medicare Advantage and Medicaid managed care plans, such as automatic claim denials and onerous prior authorization requirements. Commenters also discussed the continued costs of addressing past and preventing future cyberattacks and a commenter stated they have seen significant increases in capital costs, particularly since the pandemic. Some commenters stated that hospitals will continue to face increased costs due to the Change Healthcare cyberattack, such as interest costs on loan payments for loans acquired during the cyberattack, expected denials that will require additional administrative costs, and manual processing of claims. Commenters also urged CMS to consider the changing health care environment, which they state is putting enormous financial strain on hospitals and health systems and is expected to continue through 2025. Several commenters proposed CMS apply a payment increase of at least 4.1 percent which is aligned with MedPAC's March 2024 Report to Congress, which recommended a 1.5 percentage points increase over the FY 2025 payment update. These commenters noted that this was the second year that MedPAC made a recommendation of increasing the market basket update. Several commenters suggested various higher market basket increases, which they believe better reflects hospitals' input prices and the contract labor staffing challenge. A commenter encouraged CMS to consider, at a minimum, matching the 3.7 percent increase that the commenter stated Medicare Advantage will receive. Several commenters recommended CMS look to alternative data sources that they asserted better reflect true labor and input cost increases in a timely manner. The commenters stated that the proposed payment update does not recognize these challenges, nor does it factor in the realities of inflation impacting operating costs. Commenters also stated CMS must use data that better reflects the input price inflation that hospitals have experienced and are projected to experience in CY 2025. Multiple commenters recommended CMS use more recent data to update adjustments to 2025 OPPS rates. Many commenters noted their financial pressures due to the PHE, aging, more complex patients, negative Medicare margins of -12.7 percent as [[Page 93966]] estimated by MedPAC, and reliance on public payers. Several commenters urged CMS to consider and assess the financial position of hospitals, particularly those with low margins. Multiple commenters asked for CMS to increase rates to cover the cost of care for Medicaid patients. Many commenters noted financial hardships, particularly in 2022, with high inflation and workforce shortages. They noted that MedPAC found that all-payment operating and overall Medicare margins both fell to record lows, estimating Medicare hospital margins of negative 12.7 percent for FY 2022. MedPAC's FY 2024 recommendation was to increase the market basket update by one percentage point and, for FY 2025, that Congress increase the acute hospital market basket by 1.5 percentage points over current law. Response: We acknowledge commenters' concerns, however, as we stated in the CY 2025 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 2025 IPPS/LTCH PPS final rule. We refer commenters to that final rule for responses regarding the issues commenters raised (89 FR 69340). Comment: Many commenters expressed concerns with the Employment Cost Index (ECI) used to measure changes in labor compensation in the market basket, which they state may no longer accurately capture the changing composition and cost structure of the hospital labor market given the large increases in short-term contract labor use and its growing costs. The commenters stated labor costs have increased by more than 18 percent from CY 2020 to CY 2023. They attributed this increase to expensive contract labor costs (as a result of higher utilization rates and higher costs per hour) and faster growth in salaries for employed workers (reflecting sign-on and retention bonuses). They further stated that while salaries for contract nurses have decreased some from a peak in certain geographical areas, they still remained nearly 60 percent higher at the end of FY 2023 compared to the start of FY 2020. They further stated that CMS recognizes that the ECI does not capture shifts in composition of labor, and the commenters stated that by design, the ECI is not capturing the shifts that have occurred as hospitals have had to turn to contract labor to meet patient demand. Several commenters recommended that CMS use its exceptions and adjustments authority to adopt new or supplemental data sources, to ensure labor costs are adequately reflected in the payment update in the final rule. They further requested CMS utilize supplemental data sources to evaluate the accuracy of the ECI proxy and to modify methodologies, including adopting new or supplemental data, to calculate the payment update if its analysis determines that the ECI is not adequately capturing labor costs. Response: We refer commenters to the FY 2025 IPPS/LTCH PPS final rule, where we responded to similar comments regarding the use of the ECI and related issues raised by commenters (89 FR 69340 through 69341). We further note that, as we stated in the CY 2025 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 2025 IPPS/LTCH PPS final rule, which would occur if we used a different methodology to measure changes in labor compensation in the OPPS market basket. Comment: Several commenters recommended that CMS reevaluate the data sources it uses for rebasing its market basket and calculating the annual market basket update, including labor costs. They strongly encouraged CMS to adopt new or supplemental data sources in future rulemaking that more accurately reflect the costs to hospitals, such as through use of more real time data from the hospital community. They stated that they believe that the current market basket does not account for the higher costs of contract labor, which has become more common in hospitals in an era of clinical labor shortages. A commenter requested that CMS rebase the market baskets more frequently and at least every 3 years to ensure the market basket reflects the appropriate mix of services provided to Medicare beneficiaries. Response: We refer commenters to the FY 2025 IPPS/LTCH PPS final rule, where we responded to similar comments (89 FR 69341). As we stated in the CY 2025 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 2025 IPPS/LTCH PPS final rule. Comment: Commenters stated that since the COVID-19 PHE, IHS Global, Inc (IGI) has shown a consistent 3-year trend of under-forecasting the market basket growth and expressed concern this may indicate a more systematic issue with IGI's forecasting. They stated that these missed forecasts are permanently established in the standard payment rate for IPPS and will continue to compound, which they estimate to be $4 billion. Several commenters, including many associations, urged CMS to use its special exceptions and adjustments authority under section 1886(d)(5)(i) of the Act to implement a retrospective one-time adjustment for CY 2025 to account for the underestimation of the market basket updates over the last several years. Commenters recommended that CMS implement various one-time adjustments to account for underpayments in one or more years between CY 2021 and CY 2023 as well as for forecasted underpayments for CY 2024. The commenters stated the underestimation is, in large part, because the market basket is a time- lagged estimate that cannot fully account for unexpected changes that occur, such as historic inflation and increased labor and supply costs. They stated this is exactly what occurred at the end of the CY 2021 into CY 2022, which resulted in a large forecast error in the CY 2022 market basket update. Several commenters noted that CMS currently implements a capital IPPS market basket forecast error adjustment as well as SNF PPS market basket forecast error adjustment policy, which resulted in FY 2024 and FY 2025 SNF forecast error adjustments of 3.6 percentage points and 1.7 percentage points, respectively. They stated while CMS has not developed an analogous policy for the OPPS operating update, they believe such a forecast error adjustment to the CY 2025 OPPS operating update could be adopted under CMS' existing authority. They noted the forecast errors for CY 2021 through CY 2023 for OPPS exceeded the 0.5 percentage point threshold that is used for the SNF forecast error adjustment policy. A commenter recommended CMS establish a forecast [[Page 93967]] error threshold of 1.5 percentage points, and retroactively adjust payments for that year. Response: We refer commenters to the FY 2025 IPPS/LTCH PPS final rule, where we responded to similar comments (89 FR 69342). As we stated in the CY 2025 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 2025 IPPS/LTCH PPS final rule. Comment: Multiple commenters supported the proposed 3.0 percent market basket increase believing the market basket increase would help rural hospitals. However, the commenters believe inflation for outpatient hospital services is substantially higher than the market basket increase, and they would prefer a higher market basket increase to help rural providers. The commenters stated that the operating margin for independent rural hospitals is -2.2 percent and that the operating margins for system-affiliated rural hospitals is 1.7 percent. Other commenters believe the low market basket increases lead to challenges for rural providers. Those commenters noted that the operating margins for rural hospitals are not sustainable, and they noted that eleven hospitals in rural and underserved areas have closed in the past two years even with the establishment of a new Medicare provider type that allows such hospitals to become rural emergency hospitals. The commenters believe a higher market basket increase would help rural hospitals stay open and provide access to quality care especially maternal care in the areas that they serve. Response: We appreciate the support of the commenters of the proposed market basket increase, and we appreciate the commenters' raising their concerns regarding rural hospitals. As we stated in the CY 2025 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 2025 IPPS/LTCH PPS final rule. Comment: Multiple commenters claim that section 1833(t)(3)(C)(iv) of the Act, which defines the outpatient hospital department market basket increase factor, has provisions that give CMS flexibility to use a different market basket increase factor for outpatient hospital services than the market basket increase factor used for inpatient hospital services. The commenters requested that CMS take advantage of section 1833(t)(3)(C)(iv) to establish a market basket increase for CY 2025 for the OPPS that would be larger than the market basket increase that was finalized for FY 2025 for the IPPS. Response: Section 1833(t)(3)(C)(iv) of the Act permits the Secretary to substitute for the market basket percentage increase an annual percentage increase that is computed and applied with respect to covered OPD services furnished in a year in the same manner as the market basket percentage increase is determined and applied to inpatient hospital services for discharges occurring in a fiscal year. We would only anticipate utilizing a specific outpatient hospital market basket factor if the rate of change in the cost of covered OPD services was substantially different than the rate of change in the cost of inpatient hospital services for the previous fiscal year. We did not find evidence that the rate of change for covered OPD services was substantially different that the rate of changes for inpatient hospital services. Therefore, we are adopting an OPD fee schedule increase factor for CY 2025 equal to 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, as required by section 1833(t)(3)(C)(iv) of the Act. We decline to adopt a final OPD fee schedule increase factor different than the IPPS market basket percentage increase factor finalized in the FY 2025 IPPS/LTCH PPS final rule.

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 2025 IPPS/LTCH PPS proposed rule (89 FR 36204), the proposed productivity adjustment for FY 2025 was 0.4 percentage point. Therefore, we proposed that the productivity adjustment for the CY 2025 OPPS/ASC would be 0.4 percentage point. We also proposed that if more recent data subsequently became available after the publication of the CY 2025 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 2025 hospital inpatient market basket update and the productivity adjustment, which are components in calculating the OPD fee schedule increase factor under [[Page 93968]] 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 proposed for CY 2025 an OPD fee schedule increase factor of 2.6 percent for the CY 2025 OPPS/ASC (which is the proposed estimate of the hospital inpatient market basket percentage increase of 3.0 percent, less the proposed 0.4 percentage point productivity adjustment). Comment: Several commenters expressed concerns about the application of the productivity adjustment, particularly given the extreme pressures in which hospital and health systems operate. They stated the use of the private nonfarm business TFP is meant to capture gains from new technologies, economies of scale, business acumen, managerial skills and changes in productions. Thus, they stated this measure effectively assumes the hospital sector can mirror productivity gains from the private nonfarm business sector. They stated, however, in an economy marked by great uncertainty due to the PHE and labor and other productivity shocks, this assumption is significantly flawed. Other commenters requested that productivity adjustment be eliminated for CY 2025 without any additional reasons. A commenter also requested that CMS use its ``special exceptions and adjustments'' authority to reduce the productivity adjustment for CY 2025. Another commenter asked that the productivity adjustment not apply to small rural and sole community hospitals for CY 2025. Response: 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 2025 productivity adjustment is derived based on the 10-year moving average growth in economy-wide productivity for the period ending FY 2025. 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 2.9 percent for CY 2025, which consists of the IPPS market basket increase factor of 3.4 percent less a 0.5 percentage point productivity adjustment.

3. Other Conversion Factor Adjustments

To set the OPPS conversion factor for 2025, we proposed to increase the CY 2024 conversion factor of $87.382 by 2.6 percent. In accordance with section 1833(t)(9)(B) of the Act, we proposed further to adjust the conversion factor for CY 2025 to ensure that any revisions made to the wage index and rural adjustment are made on a budget neutral basis. We proposed to calculate an overall budget neutrality factor of 1.0026 for wage index changes by comparing proposed total estimated payments from our simulation model using the proposed FY 2025 IPPS wage indexes to those payments using the FY 2024 IPPS wage indexes, as adopted on a calendar year basis for the OPPS. We further proposed to calculate an additional budget neutrality factor of 0.9982 to account for our proposed policy to cap wage index reductions for hospitals at 5 percent on an annual basis. For CY 2025, we proposed to maintain the current rural adjustment policy, as discussed in section II.E of this final rule with comment period. Therefore, the proposed budget neutrality factor for the rural adjustment was 1.0000. We proposed to calculate a CY 2025 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 1.0006 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 0.87. This is 0.02 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 2025 OPPS/ASC proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2025 would equal approximately $625 million, which represented 0.71 percent of total projected CY 2025 OPPS spending. Therefore, we stated that the proposed conversion factor would be adjusted by the difference between the 0.27 percent estimate of pass-through spending for CY 2024 and the 0.71 percent estimate of proposed pass-through spending for CY 2025, resulting in a proposed decrease to the conversion factor for CY 2025 of 0.44 percent. We proposed that estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2025. We estimated for the proposed rule that outlier payments would be approximately 0.85 percent of total OPPS payments in CY 2024; the 1.00 percent for proposed outlier payments in CY 2025 would constitute a 0.15 percent increase in payment in CY 2025 relative to CY 2024. For CY 2025, we proposed to use 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 proposed OPD fee schedule increase factor of 2.6 percent for CY 2025, the required proposed wage index budget neutrality adjustment of approximately 1.0026, the proposed 5 percent annual cap for individual hospital wage index reductions adjustment of approximately 0.9982, the proposed cancer hospital payment adjustment of 1.0006, and the proposed adjustment of a decrease of 0.44 percentage point of projected OPPS spending for the difference in pass-through spending, which resulted in a proposed conversion factor for CY 2025 of $89.379. For CY 2025, 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 0.6 percent (that is, the proposed OPD fee schedule increase factor of 2.6 percent further reduced by 2.0 percentage points). This would result in a proposed reduced conversion factor for CY 2025 of $87.636 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of -1.743 in the conversion factor relative to hospitals that met the requirements). For further discussion of the Hospital OQR Program, we refer readers to section XV of this final rule with comment period. For 2025, we proposed [[Page 93969]] to use a reduced conversion factor of $87.636 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of -1.743 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 2025. For this CY 2025 OPPS/ASC final rule with comment period, based on more recent data available, the OPD fee schedule increase factor for the CY 2025 OPPS is 2.9 percent (which reflects the 3.4 percent final estimate of the hospital inpatient market basket percentage increase reduced by a 0.5 percentage point productivity adjustment). For CY 2025, we are using a conversion factor of $89.169 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the OPD fee schedule increase factor of 2.9 percent for CY 2025, the required wage index budget neutrality adjustment of 0.9927, the 5 percent annual cap for individual hospital wage index reductions of 0.9995, the cancer hospital payment adjustment of 1.0005, and the adjustment of 0.10 (or 0.37 less 0.27) percentage point of projected OPPS spending for the difference in pass-through spending that results in a conversion factor for CY 2024 of $89.169. We are also finalizing a reduced conversion factor of $87.439 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of - 1.730 in the conversion factor relative to hospitals that met the requirements). The calculations we performed to determine the CY 2025 final conversion factor are shown in Table 10. BILLING CODE 4120-01-P [[Page 93970]] [GRAPHIC] [TIFF OMITTED] TR27NO24.014 [[Page 93971]] [GRAPHIC] [TIFF OMITTED] TR27NO24.015 BILLING CODE 4120-01-C

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.A.5 of this 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 2025 OPPS/ASC. We refer readers to section II.C of this final rule with comment period 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 proposed labor- related share, 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 2025 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, in general, the wage index that applies to a particular acute care, short-stay hospital under the IPPS has also applied 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 [[Page 93972]] 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. For CY 2025 we proposed to implement this provision in the same manner as we have since CY 2011. Under this policy, the frontier State hospitals would receive a wage index of 1.00 if the otherwise applicable wage index (including reclassification, the rural floor, and rural floor budget neutrality) is less than 1.00. Because the HOPD receives a wage index based on the geographic location of the specific inpatient hospital with which it is associated, the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. We refer readers to the FY 2011 through FY 2024 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; FY 2023, 87 FR 49006; and for FY 2024, 88 FR 58977. In addition to the changes required by the Affordable Care Act, we note that the proposed FY 2025 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 include hospitals with Sec. 412.103 reclassification along with geographically rural hospitals in all rural wage index calculations, and 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 58971 through 58973). 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 2025 IPPS/LTCH PPS proposed rule (89 FR 36181 through 36186) for a detailed discussion of all proposed changes to the FY 2025 IPPS wage indexes. We note 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 2025 would not be less than 95 percent of its final wage index for FY 2024. Except for newly opened hospitals, we 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 (subject to any reclassification), 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 previously). We delineate hospital labor market areas based on Core-Based Statistical Areas (CBSAs) established by the Office of Management and Budget (OMB). As discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36139 through 36174), OMB issued revisions to the current labor market area delineations on July 21, 2023, that included a number of significant changes such as new CBSAs, urban counties that become rural, rural counties that become urban, and existing CBSAs that are split apart (OMB Bulletin 23-01). This bulletin can be found at: https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf. The proposed changes to the IPPS wage index based on the newest CBSA delineations are available in the FY 2025 IPPS/LTCH PPS proposed rule. We proposed that corresponding changes would be adopted in the OPPS, which uses the IPPS wage index, based on the new OMB delineations in the CY 2025 OPPS/ASC proposed rule, consistent with any proposals in the FY 2025 IPPS/LTCH PPS proposed rule. We believe that using the revised delineations based on OMB Bulletin No. 23-01 will increase the integrity of the OPPS wage index system by creating a more accurate representation of current geographic variations in wage levels. We refer readers to proposed changes based on the new OMB delineations in the FY 2025 IPPS/LTCH PPS proposed rule at 89 FR 36139 through 36174, which includes a discussion of the effects of implementation of the proposal to adopt the revised OMB labor market area delineations on reclassified hospitals. 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 from 2020. 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 cross walking 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 cross walking 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 [[Page 93973]] the use of SSA county codes and begin using only the FIPS county codes. For CY 2025, under the OPPS, we are continuing to use only the FIPS county codes for purposes of cross walking counties to CBSAs. We proposed to use the FY 2025 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 2025. We note that the proposed FY 2025 IPPS wage indexes reflect several proposed changes as a result of the revised OMB delineations, including proposed policies to accommodate changes in rural or urban status for existing counties, as well as addition or removal of certain individual CBSAs compared to the previous delineations. Therefore, policies and adjustments that were finalized for the FY 2025 IPPS post-reclassified wage index would be reflected in the final CY 2025 OPPS wage index beginning on January 1, 2025, if appropriate. We refer readers to the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36181 through 36186) and the proposed FY 2025 hospital wage index files posted on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-proposed-rule-home-page. Regarding budget neutrality for the CY 2025 OPPS wage index, we refer readers to section II.C of this final rule with comment period. As a general matter, we continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. We acknowledge, however, that an interim final action with comment period (IFC) entitled Changes to the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) Rates Due to Court Decision appeared in the October 3, 2024 Federal Register (89 FR 80405), which makes certain changes to the FY 2025 IPPS post-reclassified wage index for some hospitals that were not and could not have been anticipated or accounted for in the OPPS proposed rule. For reasons discussed in detail later in this section, we believe it is more appropriate and consistent with CMS' authority to use the post-reclassified wage index established in the FY 2025 IPPS final rule (89 FR 68986) as corrected in the FY 2025 IPPS final rule correction (89 FR 80098) for purposes of the CY 2025 OPPS wage index than it would be to incorporate the exceptional changes implemented by the IFC. 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 2025. We refer readers to the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36181 through 36186) for a detailed discussion of the proposed changes to the FY 2025 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 general approach to adopt 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 2025, 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 2025 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: One commenter supported CMS's decision to utilize the updated OMB delineations and agreed with the CBSA assignments made in Connecticut based on the regional planning areas. Response: We appreciate the commenter's support. Comment: A commenter did not agree with CMS's adoption of OMB's CBSA delineation revisions. The commenter stated that OMB cautions that CBSAs are not intended for any non-statistical uses and should only be used for other purposes with full consideration of the effects of using the delineations for such purposes. Further, the commenter stated that the Metropolitan Areas Protection and Standardization Act (MAPS Act) bars the automatic propagation of OMB revisions in CBSA delineations to geographic area determinations in nonstatistical Federal programs, and stated that any change to the standards of CBSA delineations shall propagate for any non-statistical use by any domestic assistance program only if the relevant agency determines that such a propagation supports the purposes of the program, is in the public interest, and adopts the change through notice-and-comment rulemaking. The commenter contends that if CMS chooses to adopt new OMB delineations, CMS must fully explain why reliance on the updated CBSAs as set forth by OMB is appropriate for purposes of the FY 2025 hospital wage index adjustments. The commenter stated that CMS has not provided an appropriate rationale for relying on the updated CBSAs and proposed to adopt the revised CBSAs by default. The commenter contends that CMS must make a fact-specific determination of those CBSAs' suitability for Medicare reimbursement purposes, including whether it would be appropriate to use additional data to modify OMB's delineations to ensure that such changes are appropriate for purposes of defining regional labor markets for hospital workers. Response: CMS acknowledges that the CBSA definitions and delineations were not specifically created for the purpose of determining a hospital wage index. However, based on the reasons stated in prior rulemaking, we continue to believe that these definitions and delineations, which are regularly reviewed and updated by OMB, are the best proxy for CMS to use to adjust hospital payment rates based on geographic variations in labor costs in accordance with the statute. We note that the OPPS wage index has historically adopted the IPPS wage index on a calendar year basis, and thus the same structure for organizing geographic areas applied to the IPPS through CBSAs has applied in the OPPS. Section 1886(d)(3)(E) of the Act requires that, as part of the methodology for determining prospective payments to hospitals through the IPPS, the Secretary must adjust the standardized amounts ``for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the [[Page 93974]] geographic area of the hospital compared to the national average hospital wage level.'' Section 1833(t)(2)(D) of the Act provides that for the OPPS, ``the Secretary shall 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.'' We refer readers to the FY 1985 IPPS final rule (50 FR 24375 through 24377) and the FY 1995 IPPS final rule (60 FR 29218 through 29220) for a history of the outreach, consultation, and discussion of the challenges faced in defining appropriate labor market areas for purposes of the wage index methodology. As with any classification system in which boundaries must be established, it is impossible to designate boundaries that will be completely satisfactory to all concerned. There was no consensus among the interested parties on a choice for new labor market areas, and CMS concluded the adoption and continuation of an MSA-based framework was the most prudent course of action. We also refer readers to the FY 2005 rule (69 FR 49027 through 49028) for further discussion regarding the process and outreach CMS undertook before initially adopting OMB CBSAs as the basis for the wage index methodology. We found that the CBSA framework offered a useful proxy for labor market area delineations and that none of the alternative labor market areas that were studied provided a distinct improvement over the use of MSAs. As stated previously, CMS continued to evaluate other potential methods to calculate variations in geographic labor markets in a manner that maintains or improves consistency and equity in hospital payments in response to recommendations from MedPAC. However, as stated in the 2012 Report to Congress: Plan to Reform the Medicare Wage Index (on the web at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-IndexReform), CMS has concluded that implementing any of the recommended revisions to wage index methodologies would require Congressional action. The commenter did not suggest any alternative method for defining geographic labor market areas and, given our decades long history of using OMB CBSA (and the prior Primary MSA) definitions and delineations for wage index purposes, we continue to believe adopting OMB revisions in a timely manner is essential to the wage index by creating a more accurate representation of geographic variations in wage levels. CMS is aware of the MAPS Act requirements for the adoption of CBSA definitions for nonstatistical use and believes that we have provided an adequate rationale to support our proposed adoption through notice and comment rulemaking. As we stated in the proposed rule (89 FR 36140), we believe that using the revised delineations based on OMB Bulletin No. 23-01 will increase the integrity of the wage index by creating a more accurate representation of current geographic variations in wage levels. While the adoption of the revised delineations will have both positive and negative impacts on specific hospitals and labor markets, we believe that periodically updating the labor market delineations using objective criteria and based on the most recently available commuting data will serve the public's interest in ensuring accurate Medicare payments to hospitals under the OPPS by more accurately reflecting current geographic variations in labor costs in the hospital payment methodology. While some CBSAs would be modified in significant ways, the criteria for MSA, Micropolitan Statistical Area, and Metropolitan Division definitions finalized by OMB are generally consistent with past updates, and we do not find that the adoption of these delineations will create extreme variations in payments to hospitals, especially when considering the impact of the policy to cap annual wage index reductions at 5 percent. On this basis, and for the reasons we stated in prior rulemaking, we have determined that their use supports the purpose of adjusting hospital payment rates based on geographic variations in labor costs in accordance with the statute. We have reviewed our findings and impacts relating to the new OMB delineations and find no compelling reason to delay implementation. Therefore, we are finalizing the proposed policies implementing the revised OMB delineations, including the policy for the treatment of Micropolitan Statistical areas, Metropolitan divisions, and the change to county-equivalent definitions for the State of Connecticut. Comment: A commenter requested that in addition to the permanent cap policy, CMS implement a 3-year wage index transition period consistent with prior updates to the CBSA categorizations made due to OMB updates. Response: We note that when we previously adopted revised OMB delineations, the majority of negatively impacted hospitals received a wage index adjustment for only one fiscal year via a 50/50 blend of wage index values using the then-current and newly adopted delineations (79 FR 66827). Hospitals that were reassigned from an urban to rural area as a result of our adoption of the revised OMB delineations received a 3-year transition period from their previous urban area wage index, as long as they did not obtain a new MGCRB reclassification during that time period. As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49018 through 49021), the 5 percent cap on annual wage index reductions was intended to make unnecessary any future transitions in connection with wage index policy implementations, including the adoption of revised labor market area definitions. Based on our analysis of wage index differences between FY 2024 and FY 2025, we estimate that only 136 hospitals (less that 4 percent) will receive a wage index cap that did not receive the cap in FY 2024. This indicates any impact on overall wage index values that could be caused by the adoption of the revised delineations would be relatively small. Furthermore, given the iterative and interactive effects of different reclassification and wage index hold-harmless policies, it is difficult to isolate the effects on wage index values (both positive and negative) that are due solely to the adoption of the revised delineations. That is, hospitals may make different reclassification decisions based on the transition policy, rather than the actual impacts of the revised delineations. We believe that any attempt to tailor a transition policy specifically to the impacts of adopting revised labor market delineations is not likely to yield results that more accurately reflect current differences in area wages than the 5 percent cap policy. We believe the 5 percent cap policy ensures that hospitals will not experience large payment reductions as a result of annual changes in their wage index value, allows adequate time for hospitals to evaluate reclassification options, and provides consistency and predictability in wage index values. Largely due to the modification of the rural wage index calculation finalized in FY 2024 IPPS/LTCH PPS final rule (88 FR 58971 through 58977), a much larger number of urban and rural hospitals within the same state (nearly 60 percent) receive identical wage index values (prior to the application of other policies, such as the outmigration adjustment, 5 percent cap on annual wage index decreases, and low-wage index hospital policy). This [[Page 93975]] fact suggests that there is even less need for separate transition policies for urban and rural hospitals in response to changes in geographic delineations than there was previously. Furthermore, we did not receive a comment from any hospital (urban or rural) citing specific negative impacts due solely or primarily to the proposed adoption of the revised OMB delineations. For these reasons, we do not believe it is necessary to implement any additional or alternative transition policy to the 5 percent cap on wage index decrease policy. Comment: A commenter 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 commenter's support of our policy. Comment: Multiple commenters supported our proposed 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. Some commenters stated that the policy helps to address unjustified disparities in Medicare reimbursement. One commenter supported the continuation of this policy and noted the court decision in Bridgeport Hospital v. Becerra, 108 F.4th 882 (D.C. Cir. 2024) that determined that CMS lacked the statutory authority to adopt this policy in the IPPS. One commenter opposed the proposed low wage index hospital policy. They believe that it has the effect of harming hospitals in high wage areas while having unclear impacts on the hospitals in low wage areas that receive higher payments. The commenter further noted the recent court decision in Bridgeport Hospital v. Becerra. As a result, they urged CMS to discontinue the low wage index policy in the OPPS, but advocated that if CMS maintained the policy, it do so in a non-budget neutral manner. Response: We appreciate these comments. Since the establishment of the OPPS, we have adopted the IPPS wage index on a calendar year basis in the OPPS. As we have noted across the years and earlier in this section, 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 cases where CMS has had statutory authority to implement certain policies under the IPPS in a non-budget neutral manner, to apply the same wage index values in the OPPS we have budget neutralized those adjustments in accordance with section 1833(t)(2)(D) of the Act, such as with the outmigration adjustment (69 FR 65842 through 65844). On July 23, 2024, the Court of Appeals for the D.C. Circuit held that the Secretary lacked authority under section 1886(d)(3)(E) of the Act or under the ``adjustments'' language of section 1886(d)(5)(I)(i) of the Act to adopt the low wage index hospital policy for FY 2020 for the IPPS, and that the policy and related budget neutrality adjustment in the IPPS must be vacated. Bridgeport Hosp. v. Becerra, 108 F.4th 882, 887-91 & n.6 (D.C. Cir. 2024). In consideration of the court decision, CMS subsequently issued the interim final action with comment period (IFC) entitled Changes to the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) Rates Due to Court Decision (CMS-1808-IFC) to remove the low wage index hospital policy for FY 2025 IPPS purposes. At the same time, the IFC included a payment exception under section 1886(d)(5)(I)(i) of the Act that corresponded mathematically to a 5 percent cap on wage index reductions from FY 2024 for certain low wage index hospitals most significantly impacted by the removal of the low wage index policy. We note that we proposed to include the low wage index hospital policy as part of the CY 2025 OPPS wage index and believe that the statutory authority provided under section 1833(t)(2)(D) of the Act allows us to finalize a similar policy for the CY 2025 OPPS, as we have done each year beginning in CY 2020. Specifically, section 1886(d)(3)(E) of the Act requires that CMS base the IPPS wage index on a comparison of ``the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level,'' and on ``a survey conducted by the Secretary (and updated as appropriate) of the wages and wage-related costs of subsection (d) hospitals in the United States,'' whereas section 1833(t)(2)(D) contains no such prescriptions for the manner of determining the OPPS wage index. (We continue to effectuate relevant prescriptions, such as the requirement in sections 1833(t)(2)(D) and 1833(t)(9) of the Act that OPPS wage index policies are generally budget neutral.) In addition, CMS has authority to apply the low wage index hospital policy to the OPPS wage index under section 1833(t)(2)(E) of the Act, which allows the Secretary to ``establish, in budget neutral manner, . . . other adjustments as determined to be necessary to ensure equitable payments, such as adjustments for certain classes of hospitals. We believe implementing the low wage index hospital policy is a valid exercise of the Secretary's authority to adopt ``adjustments'' to OPPS payments under the OPPS statute, where the provision regarding calculation of the OPPS wage adjustment factor does not contain the same language that the D.C. Circuit found to be prescriptive for the calculation of the IPPS wage index found at section 1886(d)(3)(E) of the Act. Additionally, section 1833(t)(2)(E) of the Act--unlike the adjustment authority at section 1886(d)(5)(I)--authorizes us to make adjustments to ``ensure equitable payments.'' In light of the unique circumstances presented by the timing of D.C. Circuit's decision, application of the low wage-index-hospital policy under the OPPS for CY 2025 avoids unexpected and arguably unfair payment consequences for hospitals that were not plaintiffs in the Bridgeport case and so falls within our equitable adjustment authority. While this would create a divergence between the OPPS wage index values in CY 2025 and the ultimate, effective FY 2025 IPPS wage index values for some hospitals, we continue to believe that the concerns related to the wage index that led to the application of this policy to the OPPS wage index in previous years continue to apply, and that the OPPS authority for wage adjustment factors continues to give CMS the authority to implement a budget neutral low wage index hospital policy. Additionally, we believe that the same reasons underlying adoption of the IFC policies for the FY 2025 IPPS wage index weigh against incorporating those policies for purposes of the CY 2025 OPPS wage index. Specifically, we noted in the IFC that the intention of the policies implemented therein is to ``promote certainty regarding. . .payments'' and ``provide for payment stability and promote predictability,'' in light of the court's decision in the Bridgeport Hospital case (89 FR 80408). Given the differences noted in the previous paragraph between the IPPS and OPPS in CMS's statutory authorities related to the wage index, those interests are better served by finalizing the OPPS wage index methodology as proposed, including the low wage index hospital policy. Finally, we acknowledge that in the IFC, we implemented under section 1886(d)(5)(I)(i) of the Act a transitional payment exception for hospitals that benefitted from the FY 2024 low wage [[Page 93976]] index hospital policy in the IPPS without budget neutralizing that exception. But that payment exception serves a different purpose from that of the low wage index hospital policy. And, in any event, unlike the statute authorizing the transitional payment exception, CMS's authority to implement a low wage index hospital policy in the OPPS requires it to budget neutralize that policy. That is, while section 1886(d)(5)(I)(i) contains no budget neutrality requirement, both section 1833(t)(2)(D) and (t)(2)(E) do. Thus, in the context of the OPPS, we will continue to budget neutralize the low wage index hospital policy. For these reasons, and those discussed above, we are finalizing in the CY 2025 OPPS the low wage index hospital policy as we had proposed in the CY 2025 OPPS/ASC proposed rule (89 FR 59227). We recognize that creating different effective wage index values for a hospital under the OPPS than the wage index value for the hospital under the IPPS for CY 2025 differs in some respects from how we have implemented the OPPS wage index previously, where we have used the IPPS wage index value in effect throughout the FY as the OPPS wage index value for all hospitals. However, we believe this is the appropriate approach for the CY 2025 OPPS given the unusual circumstances wherein an appellate court ruled that CMS lacked authority under the IPPS statute for a policy under the FY 2020 IPPS wage index that the OPPS proposed rule had already proposed to include in the OPPS wage index. We further believe the approach in this final rule is consistent with Sec. 419.43(c), which states: ``CMS uses the hospital inpatient prospective payment system wage index established in accordance with Part 412 of this chapter to make the adjustment specified under paragraph (a) of this section.'' The OPPS wage index values will match the IPPS wage index values in the FY 2025 IPPS final rule, as corrected in the FY 2025 IPPS final rule correction (89 FR 80098), which were ``established in accordance with Part 412''; we are merely declining to incorporate certain modifications to those values made in the IFC, which reflect extraordinary steps taken due to the timing of the court's decision in Bridgeport Hospital. CMS will explore options for realigning the IPPS and OPPS wage index values through future rulemaking. 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 applied in a non-budget neutral manner, which the commenter stated 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. 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. After consideration of the public comments we received, we are finalizing our proposal without modification to use the FY 2025 IPPS post-reclassified wage index for urban and rural areas as finalized in the FY 2025 IPPS final rule and corrected in the FY 2025 IPPS final rule correction as the wage index for the OPPS, which includes the OPPS low wage index hospital policy, to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2025. In addition to the low wage index hospital policy, which will only apply in the OPPS in CY 2025, certain FY 2025 post-reclassified wage index policies will be reflected in the final CY 2025 OPPS wage index beginning on January 1, 2025, 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 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 2025 IPPS/LTCH PPS final rule (89 FR 69252 through 69310) and the FY 2025 hospital wage index files posted on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-final-rule-home-page. Regarding budget neutrality for the CY 2025 OPPS wage index, we refer readers to section II.B. of this final rule with comment period. For CMHCs, for CY 2025, we proposed to continue to calculate the wage index by using the post-reclassification IPPS wage index based on the CBSA where the CMHC is located. Furthermore, we proposed that the wage index that would apply to a CMHC for CY 2025 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 2025 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-2025-ipps-final-rule-home-page) identifies counties that would be eligible for the out-migration adjustment. Table 2 associated with the FY 2025 IPPS/LTCH PPS final rule as corrected by the FY 2025 IPPS final rule correction identifies IPPS hospitals that would receive the out- migration adjustment for FY 2025. We are including the outmigration adjustment information from Table 2 associated with the FY 2025 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. 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 FY 2025 IPPS final rule wage index tables and the CY 2025 OPPS final rule Addendum L.

D. Statewide Average Default Cost-to-Charge Ratios (CCRs)

In addition to using CCRs to estimate costs from charges on claims for ratesetting, we use overall hospital-specific CCRs calculated from the hospital's most recent cost report (OMB control number: 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 [[Page 93977]] 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. L. 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 final rule with comment period, which is posted on our website. We proposed to calculate the default ratios for CY 2025 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 2025 using the most recent cost report data, which are from a June 2024 HCRIS cost report extract. We no longer publish a table in the Federal Register containing the statewide average CCRs in the annual OPPS/ASC proposed rule and final rule with comment period. These CCRs and the upper limit CCR value at which we would apply statewide CCRs will be available for download with each OPPS/ASC CY proposed rule and final rule on the CMS website. We refer readers to our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices; click on the link on the left of the page titled ``Annual Policy Files'' and then select the relevant year 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 2025 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 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, 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 2024. For CY 2025, 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: Many commenters supported our policy to continue the 7.1 percent payment adjustment for rural SCHs and EACHs. Response: We thank the commenters for their support of our policy. Comment: Multiple commenters stated that the 7.1 percent payment adjustment should be extended to urban SCHs and Medicare dependent hospitals (MDHs). The commenters suggested CMS perform another study to look at the costs that MDHs incur and that CMS has the authority to extend the adjustment to MDHs and urban SCHs without legislation. Response: We reiterate that our study of the cost difference by APC's between hospitals in rural areas and urban areas only showed a significant difference in costs for rural SCHs. CMS results did not identify significant cost differences between hospitals in urban areas and MDHs. 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. After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue 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 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 [[Page 93978]] 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 11 displays the target PCR for purposes of the cancer hospital adjustment for CY 2012 through CY 2024. [GRAPHIC] [TIFF OMITTED] TR27NO24.016

2. Policy for CY 2025

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 [[Page 93979]] otherwise apply. Section 16002(b) also provides that, in addition to the percentage reduction, the Secretary may consider making an additional percentage point reduction to the target PCR that takes into account payment rates for applicable items and services described under section 1833(t)(21)(C) of the Act for hospitals that are not cancer hospitals described under section 1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality adjustment under section 1833(t) of the Act, the Secretary shall not take into account the reduced expenditures that result from application of section 1833(t)(18)(C) of the Act. We proposed to provide additional payments to the 11 specified cancer hospitals so that each cancer hospital's 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 (PHE) transition as described later in this section. We are not proposing an additional reduction beyond the 1.0 percentage point reduction required by section 16002(b) of the 21st Century Cures Act for CY 2025. To calculate the proposed CY 2025 target PCR, we proposed to use the same extract of cost report data from HCRIS used to estimate costs for the CY 2025 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 2023 claims data that we used to model the impact of the proposed CY 2025 APC relative payment weights (3,448 hospitals) because it is appropriate to use the same set of hospitals that are being used to calibrate the modeled CY 2025 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2019 to 2023; however, the cost reporting periods were predominantly from fiscal years ending in 2022 and 2023. We then removed the cost report data of the 49 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 16 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to a proposed analytic file of 3,421 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 87 percent of reasonable cost (weighted average PCR of 0.87). 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 0.86 for each cancer hospital. In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81586 through 81589), we 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 lower PCRs for non-cancer hospitals 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. Therefore, in the CY 2024 OPPS/ASC final rule with comment period, we finalized our proposal to transition from the target PCR of 0.89 we finalized for CYs 2020 through 2024 (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 2025 OPPS/ASC proposed rule, since the target PCR that would otherwise apply under our standard process would be a target PCR of 0.86, we proposed to reduce the CY 2024 target PCR of 0.88 by 1 percentage point and proposed a cancer hospital target PCR of 0.87 for CY 2025. Comment: Commenters supported the proposed target PCR of 0.87 for CY 2025. One commenter requested that CMS ensure that repayments to 340B hospitals are appropriately reflected in the final 2025 PCR calculation. Response: We thank the commenters for their support. With respect to the commenter's request that the final 2025 PCR calculation include repayments to 340B hospitals, we refer to our response to that same comment in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81588). After consideration of the public comments we received, we are finalizing without modification our proposal to reduce the CY 2024 target PCR by 1 percentage point and apply a target PCR of 0.87 to the 11 specified cancer hospitals for CY 2025. Table 12 shows the estimated percentage increase in OPPS payments to each cancer hospital for CY 2025, due to the cancer hospital payment adjustment policy. The actual, final amount of the CY 2025 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2025 payments and costs from the settled CY 2025 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. [[Page 93980]] [GRAPHIC] [TIFF OMITTED] TR27NO24.017

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 2024, 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 $7,750 (the fixed-dollar amount threshold) (88 FR 81589 through 81591). 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 2023 OPPS payments, using CY 2023 claims available for this CY 2025 OPPS/ASC final rule with comment period, is approximately 0.65 percent. Therefore, for CY 2023, we estimate that we did not meet the outlier target by 0.35 percent of total aggregated OPPS payments. For this CY 2025 OPPS/ASC final rule with comment period, using CY 2023 claims data and CY 2024 payment rates, we estimate that the aggregate outlier payments for CY 2024 would be approximately 0.83 percent of the total CY 2024 OPPS payments. We provide estimated CY 2025 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 2025

For CY 2025, 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 partial hospitalization program (PHP) and intensive outpatient program (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 [[Page 93981]] outlier payments. We proposed to continue our outlier policy that if a CMHC's cost for PHP and IOP 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 2025 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 2024 (88 FR 81589 through 81591). For purposes of estimating outlier payments for CY 2025, we use the hospital-specific overall ancillary CCRs available in the April 2024 update to the Outpatient Provider-Specific File (OPSF). The OPSF contains provider-specific data, such as the most current CCRs, which are maintained by the MACs and used by the OPPS Pricer to pay claims. The claims that we generally use to model each OPPS update lag by 2 years. In order to estimate the CY 2025 hospital outlier payments, we inflated the charges on the CY 2023 claims using the same proposed charge inflation factor of 1.084555 that we used to estimate the IPPS fixed-loss cost threshold for the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36572). We used an inflation factor of 1.04142 to estimate CY 2024 charges from the CY 2023 charges reported on CY 2023 claims before applying CY 2024 CCRs to estimate the percent of outliers paid in CY 2024. The proposed methodology for determining these charge inflation factors is discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36572). 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 2025 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2025 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2025, we proposed to apply an adjustment factor of 1.03331 to the CCRs that were in the April 2024 OPSF to trend them forward from CY 2024 to CY 2025. The methodology for calculating the proposed CCR adjustment factor is discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36572 through 36573). To model hospital outlier payments for the CY 2025 proposed rule, we applied the overall CCRs from the April 2024 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 1.03331 to approximate CY 2025 CCRs) to charges on CY 2023 claims that were adjusted (using the proposed charge inflation factor of 1.084555 to approximate CY 2025 charges). We simulated aggregated CY 2023 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 2025 OPPS payments. We estimated that a proposed fixed-dollar threshold of $8,000, 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 XV of this final rule with comment period. Comment: One commenter noted that they believe the CCR adjustment factors used for the IPPS and OPPS proposed rules overstate the effect of cost increases that took place from 2022 to 2023. The commenter argues that the CCR adjustment factor used in each final rule has been below 1.0; however, we proposed a CCR adjustment factor of 1.03331. The commenter recommended that we substitute a different CCR adjustment factor or cap the CCR adjustment factor at 1.0. Response: As discussed in greater detail in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69955 through 69962), consistent with our usual practice, we are using more recent CCR data for this final rule with comment period which yields a CCR adjustment factor of 1.015123. We do not believe it is necessary to deviate from our usual practice of using the CCR adjustment factor for our calculation, which was finalized under the IPPS for FY 2025. Therefore, we are also not accepting this recommendation under the OPPS. After consideration of the public comments 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 2025.

3. Final Outlier Calculation

Consistent with historical practice, we used updated data for this final rule with comment period for outlier calculations. For CY 2025, we are applying the overall ancillary CCRs from the July 2024 OPSF file after adjustment (using the CCR adjustment factor of 1.015123 to approximate CY 2025 CCRs) to charges on CY 2023 claims that were adjusted using a charge inflation factor of 1.08406 to [[Page 93982]] approximate CY 2025 charges. These are the same CCR adjustment and charge inflation factors that were used to set the IPPS fixed-dollar thresholds for the FY 2025 IPPS/LTCH PPS final rule (89 FR 69955 through 69962). We simulated aggregated CY 2025 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 2025 OPPS payments. We estimate that a fixed-dollar threshold of $7,175 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 the 3.40 times the ACP 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 2025 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 https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates) 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 2025 scaled weight for the APC by the CY 2025 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 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 0.9806 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 2025 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 through 18497) for a detailed discussion of how we derived this percentage. During our regression analysis for the payment adjustment for rural hospitals in the CY 2006 OPPS final rule with comment period (70 FR 68553), we confirmed that this labor-related share for hospital outpatient services is appropriate. The formula below is a mathematical representation of Step 1 and identifies the labor-related portion of a specific payment rate for a specific service. X is the labor-related portion of the national unadjusted payment rate. X = .60 * (national unadjusted payment rate). Step 2. Determine the wage index area in which the hospital is located and identify the wage index level that applies to the specific hospital. The wage index values assigned to each area would reflect the geographic statistical areas (which are based upon OMB standards) to which hospitals are assigned for FY 2025 in the FY 2025 IPPS, as corrected in the FY 2025 IPPS final rule correction (89 FR 80098), 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 2025 OPPS wage index any adjustments for the FY 2025 IPPS final rule post-reclassified wage index, including, but not limited to, the rural floor adjustment and a wage index floor of 1.00 in frontier states, in accordance with section 10324 of the Affordable [[Page 93983]] Care Act of 2010. We are also including the low wage index hospital policy as part of the CY 2025 OPPS wage index. The adoption of this policy for CY 2025 for the OPPS wage index will create different effective wage index values for hospitals that benefit from the policy under the OPPS than the wage index value for those hospitals under the IPPS for FY 2025 as modified by the interim final action with comment period ``Changes to the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) Rates Due to Court Decision'' (89 FR 80405). For further discussion of the wage index we are applying for the CY 2025 OPPS, including the low wage index hospital policy, 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 2025 IPPS wage index, which are listed in Table 3 associated with the FY 2025 IPPS 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 2025 IPPS Final Rule Home Page'' and select ``FY 2025 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. Xais 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 2025 full national unadjusted payment rate for APC 5071 is $703.59. The final reduced national adjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is $689.94. 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 $422.15 (0.60 * $703.59). The labor-related portion of the final reduced national adjusted payment is approximately $413.96 (0.60 * $689.94). Step 2 & 3. The FY 2025 wage index for a provider located in CBSA 35614 in New York, which includes the adoption of the final IPPS 2025 wage index policies, is 1.3056. Step 4. The wage adjusted labor-related portion of the final full national unadjusted payment is approximately $551.16 ($422.15 * 1.3056). The wage adjusted labor-related portion of the final reduced national adjusted payment is approximately $540.47 ($413.96 * 1.3056). Step 5. The nonlabor-related portion of the final full national unadjusted payment is approximately $281.44 (0.40 * $703.59). The nonlabor-related portion of the final reduced national adjusted payment is approximately $275.98 (0.40 * $689.94). 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 $832.60 ($551.16 + $281.44). The sum of the portions of the final reduced national adjusted payment is approximately $816.45 ($540.47 + $275.98) as shown in Table 13. [[Page 93984]] [GRAPHIC] [TIFF OMITTED] TR27NO24.018 We did not receive any public comments on these steps under the methodology that we included in the proposed rule to determine the APC payments for CY 2025. Therefore, we are using the steps in the methodology specified above to demonstrate the calculation of the final CY 2025 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, amended 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, ``Changes to Beneficiary Coinsurance for Certain Colorectal Cancer Screening Tests,'' 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 CY 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 thus far have primarily been 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, 2023.12 13 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. --------------------------------------------------------------------------- \12\ https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-initial-guidance.pdf. \13\ 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. --------------------------------------------------------------------------- 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 quarters in which the payment [[Page 93985]] amount described 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 payment amount described 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 payment amount under 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, for that drug exceeds the inflation-adjusted payment amount for a Part B rebatable drug, the Part B payment amount would, subject to the Part B deductible and sequestration, equal the difference between such payment amount and the inflation-adjusted coinsurance amount. Consistent with the policy adopted in section 40 of the revised Medicare Part B Drug Inflation Rebate Guidance, the calculation to determine the applicable beneficiary coinsurance amount would not be adjusted for sequestration. CMS codified the Medicare payment for Part B rebatable drugs in the CY 2024 PFS final rule by adding new paragraph (m) to Sec. 410.152. In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81594), we codified 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 adopted in the CY 2024 PFS final rule (Sec. Sec. 410.152(m) and 489.30(b)(6)). We also amended 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 codified 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), which codified the cost sharing amounts for Part B rebatable drugs with prices increasing at a rate faster than inflation. In the CY 2025 PFS proposed rule (89 FR 61956), CMS proposed to adopt new provisions at Sec. Sec. 427.200 and 427.201 to codify the policies regarding the computation of the inflation-adjusted beneficiary coinsurance, defined in Sec. 427.200, for Part B rebatable drugs as required by section 1847A(i)(5) of the Act. The proposed new provision at Sec. 427.201 includes references to the existing provisions at Sec. Sec. 410.152(m), 419.41(e), and 489.30(b)(6). CMS further proposed at Sec. 427.201(c) that any category of products that is excluded from the identification of Part B rebatable drugs at Sec. 427.101(b) is not subject to the inflation-adjusted beneficiary coinsurance. Examples of these excluded products include separately payable radiopharmaceuticals, skin substitute products, and qualifying biosimilar biological products. Additionally, CMS proposed at Sec. 427.201(b) that CMS would use the published payment amount in quarterly pricing files 14 15 16 to determine if a Part B rebatable drug should have an adjusted beneficiary coinsurance equal to 20 percent of the inflation-adjusted payment amount as described in section 1847A(i)(3)(C) for a calendar quarter. The proposed approach deviates from the rebate calculation approach proposed in Sec. 427.302, which relies on the specified amount defined at Sec. 427.20 even when the specified amount and the published payment amount in quarterly pricing files differ. The approach proposed at Sec. 427.201(b) will be used only to determine whether there should be a coinsurance adjustment and will not impact the applicability or calculation of inflation rebates. CMS believes this approach is consistent with the statutory language and appropriately reflects the differences in the statutory text of section 1847A(i)(5) of the Act, which sets forth the payment amount that is used to determine whether coinsurance should be adjusted, and section 1847A(i)(3)(A) of the Act, which sets forth the ``specified amount'' used to determine rebate amounts. --------------------------------------------------------------------------- \14\ See: https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files. \15\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates. \16\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-payment-rates-addenda. --------------------------------------------------------------------------- We did not receive any public comments related to inflation- adjusted beneficiary coinsurance or program payment amounts. 2. OPPS Copayment Policy For CY 2025, 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 will be effective January 1, 2025, 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 this final rule with comment period, for CY 2025, the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies will equal the product of the reporting ratio and the national unadjusted copayment, or the product of the reporting ratio and the minimum unadjusted copayment, respectively, for the service. We note that OPPS copayments may increase or decrease each year based on changes in the calculated APC payment rates, due to updated cost report and claims data, and any changes to the OPPS cost modeling process. However, as described in the CY 2004 OPPS final rule with comment period, the development of the copayment methodology generally moves beneficiary copayments closer to 20 percent of OPPS APC payments (68 FR 63458 through 63459). In the CY 2004 OPPS final rule with comment period (68 FR 63459), we adopted a new methodology to calculate unadjusted copayment amounts in situations including reorganizing APCs, [[Page 93986]] 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. The finalized national unadjusted copayment amounts for services payable under the OPPS that will be effective January 1, 2025, are included in Addenda A and B to the CY 2025 OPPS/ASC final rule (which are available 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 proposed payment rate. For example, using APC 5071, $140.72 is approximately 20 percent of the full national unadjusted payment rate of $703.59. 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 final rule 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 calculated in Step 3 by the reporting ratio of 0.9806. The unadjusted copayments for services payable under the OPPS that will be effective January 1, 2025, 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 2025 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. Comment: One commenter suggested beneficiaries should not be responsible for drug pricing increases and that CMS should limit or eliminate cost-sharing for beneficiaries. The commenter also stated that cost-sharing has unintended consequences and negative effects on access to health care and health outcomes, including increased use of emergency rooms. The commenter also acknowledged that CMS is limited by statute and that our copayment methodologies ensure that copayments are minimal. Response: We thank the commenter for the input. We note that the beneficiary copayment is established by section 1833(t)(3)(B) of the Act and Sec. 419.41(d). Section 1847A(i)(5) of the Act provides for an adjustment to the [[Page 93987]] beneficiary coinsurance for Part B rebatable drugs with prices that have increased faster than the rate of inflation beginning April 1, 2023. In the CY 2024 OPPS/ASC OPPS final rule and the CY 2024 Physician Fee Schedule final rule, CMS codified this inflation-adjusted coinsurance amount at Sec. Sec. 419.41(e), 410.152(m), and 489.30(b)(6), respectively. For these drugs and biologicals, the beneficiary coinsurance is 20 percent of the inflation-adjusted payment amount, which is less than what the beneficiary would pay in coinsurance otherwise. Therefore, beneficiaries are insulated from coinsurance amounts calculated based on drug prices that outpace inflation. More information about the beneficiary coinsurance adjustment and the Medicare Part B Inflation Rebate Program is available at https://www.cms.gov/inflation-reduction-act-and-medicare/inflation-rebates-medicare.

A. OPPS Treatment of New and Revised HCPCS Codes

Payments for OPPS procedures, services, and items are generally based on medical billing codes, specifically, Healthcare Common Procedure Coding System (HCPCS) codes, that are reported on hospital outpatient department (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, MAAA, and PLA 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 2025 Payment Status and Comment Indicators) of this final rule with comment period, we discuss the various status indicators and comment 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 2024 HCPCS Codes Proposed Rule Comment Solicitation

For the April 2024 update, 73 new HCPCS codes were established and made effective on April 1, 2024. Through the April 2024 OPPS quarterly update CR (Transmittal 12552, Change Request 13568, dated March 21, 2024), we recognized several new HCPCS codes for payment under the OPPS. We solicited public comments on the proposed APC and status indicator assignments for the codes listed in Table 10 (New HCPCS Codes Effective April 1, 2024) of the CY 2025 OPPS/ASC proposed rule (89 FR 59239 through 59241, which are also displayed in Table 14. We received some public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes that were effective on April 1, 2024. The comments and our responses are addressed in the applicable 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 2024 codes for which we received no comments, we are finalizing the proposed APC and status indicator assignments as proposed. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective January 1, 2025. Their replacement codes are listed in Table 14. 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 14. 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, 2024, were assigned to comment indicator ``NP'' in Addendum B to the CY 2025 OPPS/APC 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 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 4120-01-P [[Page 93988]] [GRAPHIC] [TIFF OMITTED] TR27NO24.019 [[Page 93989]] [GRAPHIC] [TIFF OMITTED] TR27NO24.020 [[Page 93990]] [GRAPHIC] [TIFF OMITTED] TR27NO24.021 [[Page 93991]] BILLING CODE 4120-01-C

2. July 2024 HCPCS Codes Proposed Rule Comment Solicitation

For the July 2024 update, 130 new codes were established and made effective July 1, 2024. Through the July 2024 OPPS quarterly update CR (Transmittal 12665, Change Request 13632, dated May 31, 2024), we recognized several new codes for 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 11 (New HCPCS Codes Effective July 1, 2024) of the CY 2025 OPPS/ASC proposed rule (89 FR 59242 through 59249), which are also listed in Table 15. We received some public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes implemented on July 1, 2024. The comments and our responses are addressed in pertinent 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, 2024, codes for which we received no comments, we are finalizing the proposed APC and status indicator assignments. 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 15. 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, 2024, were assigned to comment indicator ``NP'' in Addendum B to the CY 2025 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 4120-01-P [[Page 93992]] [GRAPHIC] [TIFF OMITTED] TR27NO24.022 [[Page 93993]] [GRAPHIC] [TIFF OMITTED] TR27NO24.023 [[Page 93994]] [GRAPHIC] [TIFF OMITTED] TR27NO24.024 [[Page 93995]] [GRAPHIC] [TIFF OMITTED] TR27NO24.025 [[Page 93996]] [GRAPHIC] [TIFF OMITTED] TR27NO24.026 [[Page 93997]] [GRAPHIC] [TIFF OMITTED] TR27NO24.027 [[Page 93998]] [GRAPHIC] [TIFF OMITTED] TR27NO24.028 [[Page 93999]] [GRAPHIC] [TIFF OMITTED] TR27NO24.029 [[Page 94000]] [GRAPHIC] [TIFF OMITTED] TR27NO24.030 [[Page 94001]] [GRAPHIC] [TIFF OMITTED] TR27NO24.031

3. October 2024 HCPCS Codes Final Rule Comment Solicitation

For the October 2024 update, 107 codes were established and made effective October 1, 2024. Through the October 2024 OPPS quarterly update CR (Transmittal 12816, Change Request 13784, dated August 29, 2024), we recognized several new codes for separate payment and assigned them to appropriate interim OPPS status indicators and APCs. For CY 2025, consistent with our established policy, we proposed in the CY 2025 OPPS/ASC proposed rule (89 FR 59250) that the HCPCS codes that would be effective October 1, 2024, would be flagged with comment indicator ``NI'' in Addendum B to the CY 2025 OPPS/ASC final rule with comment period to indicate that we have assigned the codes to interim OPPS status indicators for CY 2025. Table 16 lists the codes that were effective October 1, 2024. We note that one of the temporary C-codes has been replaced with a permanent J-code effective January 1, 2025. We are inviting public comments in this final rule with comment period on the interim payment indicators, which will be finalized in the CY 2026 OPPS/ASC final rule with comment period. We note the proposed APC assignments and status indicators for these same codes will be subject to comment in the CY 2026 OPPS/ASC proposed rule with comment period, and will be finalized in the CY 2026 OPPS/ASC final rule with comment period. [[Page 94002]] [GRAPHIC] [TIFF OMITTED] TR27NO24.032 [[Page 94003]] [GRAPHIC] [TIFF OMITTED] TR27NO24.033 [[Page 94004]] [GRAPHIC] [TIFF OMITTED] TR27NO24.034 [[Page 94005]] [GRAPHIC] [TIFF OMITTED] TR27NO24.035 [[Page 94006]] [GRAPHIC] [TIFF OMITTED] TR27NO24.036 [[Page 94007]] [GRAPHIC] [TIFF OMITTED] TR27NO24.037 [[Page 94008]] [GRAPHIC] [TIFF OMITTED] TR27NO24.038 [[Page 94009]] [GRAPHIC] [TIFF OMITTED] TR27NO24.039 BILLING CODE 4120-01-C

4. January 2025 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, 2025, in this CY 2025 OPPS/ASC final rule with comment period, thereby allowing us to finalize the status indicators and APC assignments for the codes in the CY 2026 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 2025 OPPS/ASC proposed rule, most Level II HCPCS codes are not released until sometime around November to be effective January 1. Because these codes are not available until November, we are unable to include them in the OPPS/ASC proposed rules. Consequently, for CY 2025, we propose to include the new Level II HCPCS codes that will be effective January 1, 2025 (that would be incorporated in the January 2025 OPPS quarterly update CR), in Addendum B to the CY 2025 OPPS/ASC final rule with comment period. Specifically, for CY 2025, we propose to continue our established policy of assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final rule with comment period to the new HCPCS codes that will be effective January 1, 2025, 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 would then be finalized in the CY 2026 OPPS/ASC final rule with comment period. Similar to the codes effective October 1, 2024, the proposed APC assignments and status indicators for these new Level II HCPCS codes that will be effective January 1, 2025, will also be subject to comment in the CY 2026 OPPS/ ASC proposed rule with comment period, and will be finalized in the CY 2026 OPPS/ASC final rule with comment period. b. New 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 [[Page 94010]] 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 2025 OPPS update, we received the CPT codes that will be effective January 1, 2025, from the AMA in time to be included in the CY 2025 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes were included 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 were assigned to 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 with a proposed APC assignment, and that comments would be accepted on the proposed APC assignment and status indicator. Further, we noted that the CPT code descriptors that appeared in Addendum B were short descriptors and did not accurately describe the complete procedure, service, or item described by the CPT code. Therefore, we included the 5-digit placeholder codes and the long descriptors for the new and revised CY 2025 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 to the proposed rule, specifically under the column labeled ``CY 2025 OPPS/ASC Proposed Rule 5- Digit AMA Placeholder Code''. We noted that the final CPT code numbers would be included in this CY 2025 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 2025 OPPS/ASC proposed rule, we solicited public comments on the proposed CY 2025 SI and APC assignments for the new and revised Category I and III CPT codes that would be effective January 1, 2025. The CPT codes were listed in Addendum B to the proposed rule with short descriptors only. We listed them again, with long descriptors, in Addendum O to the proposed rule. We also proposed to finalize the SI and APC assignments for these codes (with their final CPT code numbers) in the CY 2025 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 2025 OPPS/ASC proposed rule. We have responded to those public comments in sections III.C, III.E, and IV of this CY 2025 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, 2025, can be found in Addendum B to this final rule with comment period. In addition, the SI definitions 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 17, which is a reprint of Table 12 from the CY 2025 OPPS/ASC proposed rule (89 FR 59251), 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 94011]] [GRAPHIC] [TIFF OMITTED] TR27NO24.040

1. Background

Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered hospital outpatient department services. In addition, 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 the regulation 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 the regulation at 42 CFR 419.2(b). A further discussion of packaged services is included in section II.A.3 of this final rule with comment period. Under the OPPS, we generally pay for covered hospital outpatient services on a rate-per-service basis, where the service may be reported with one or more HCPCS codes. Payment varies according to the APC group to which the independent service or combination of services is assigned. For CY 2025, 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 [[Page 94012]] often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to consider changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Section 1833(t)(9)(A) of the Act also requires the Secretary to consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) 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 2025 OPPS update will be discussed in the relevant specific sections throughout this CY 2025 OPPS/ASC 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 regarding 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 2025 OPPS/ ASC proposed rule, for CY 2025, 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 2025 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 CY 2025 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 2025 included in the CY 2025 OPPS/ASC proposed rule are related to changes in costs of services that were observed in the CY 2023 claims data available for CY 2025 ratesetting. Addendum B to the CY 2025 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, 2024, OPPS Addendum B Update, which is available via 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

While considering the APC changes that we proposed for CY 2025, 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 2023 claims data available for the CY 2025 OPPS/ASC proposed rule, we found 23 APCs with violations of the 2 times rule. We applied the criteria as described above to identify the APCs for which we proposed to make exceptions under the 2 times rule for CY 2025 and found that all of the 23 APCs we identified met the criteria for an exception to the 2 times rule based on the CY 2023 claims data available for the CY 2025 OPPS/APC 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 18. 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 13 of the CY 2025 OPPS/ASC proposed rule (89 FR 59253) listed the 23 APCs for which we proposed to make an exception under the 2 times rule for CY 2025 based on the criteria cited above and claims data submitted between January 1, 2023, and December 31, 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 2023 claims data used for this CY 2025 final rule with comment period, we found a total of 28 APCs with violations of the 2 times rule. Of these 28 total APCs, 23 were identified in the proposed rule and five are newly identified in this final rule with comment period. The following two APCs appeared in Table 13 of the CY 2025 OPPS/ASC proposed rule (89 FR [[Page 94013]] 59253) 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 following five APCs are newly identified with 2 times rule violations using updated data for this final rule with comment period: APC 5024 (Level 4 Type A ED Visits) APC 5501 (Level 1 Extraocular, Repair, and Plastic Eye Procedures) APC 5613 (Level 3 Therapeutic Radiation Treatment Preparation) APC 5674 (Level 4 Pathology) APC 5722 (Level 2 Diagnostic Tests and Related Services) Although we did not receive any comments on Table 13 of the CY OPPS/ASC 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. BILLING CODE 4120-01-P [[Page 94014]] [GRAPHIC] [TIFF OMITTED] TR27NO24.041 BILLING CODE 4120-01-C [[Page 94015]] We did not receive any public comments on our proposal. Based on our analysis of the CY 2023 costs from hospital claims and cost report data available for this CY 2025 final rule with comment period, we are finalizing our proposals with some modifications. Specifically, we are finalizing our proposal to except the 23 proposed APCs that continue to have 2 times violations in the final rule data from the 2 times rule for CY 2023 claims data and also excepting five additional APCs (APCs 5024, 5501, 5613, 5674, 5722) that did not violate the 2 times rule in the proposed rule data, but do violate the 2 times rule in the final rule data, for a total of 28 APCs for which we identified 2 times rule violations but that qualify for exceptions. In summary, Table 18 lists the 28 APCs that we are excepting from the 2 times rule for CY 2025 based on the criteria described earlier and a review of updated claims data for dates of service between January 1, 2023, and December 31, 2023, that were processed on or before June 30, 2024, 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.

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 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 on the CMS website and then follow the instructions to access the MEARIS\TM\ system for OPPS New Technology APC applications.\17\ --------------------------------------------------------------------------- \17\ Currently approved under OMB control number 0938-0860; expires 07/31/2024. --------------------------------------------------------------------------- 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 2024, there were 52 New Technology APC levels, ranging from the lowest cost band assigned to APC 1491 (New Technology--Level 1A ($0-$10)) to the highest cost band assigned to APC 1908 (New Technology--Level 52 ($145,001-$160,000)). We note that the cost bands for the New Technology APCs, specifically, APCs 1491 through 1599 and 1901 through 1908, vary with increments ranging from $10 to $14,999. These cost bands identify the APCs to which new technology procedures and services with estimated service costs that fall within those cost bands are assigned under the OPPS. Payment for each APC is made at the mid-point of the APC's assigned cost band. For example, payment for New Technology APC 1507 (New Technology--Level 7 ($501-$600)) is made at $550.50. Under the OPPS, one of our goals is to make payments that are appropriate for the services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is budget neutral and increases are limited to the annual hospital market basket increase reduced by the productivity adjustment. We believe that our payment rates reflect the costs that are associated with providing care to Medicare beneficiaries and are adequate to ensure access to services (80 FR 70374). For many emerging technologies, there is a transitional period during which utilization may be low, often because providers are first learning about the technologies and their clinical utility. Quite often, parties request that Medicare make higher payments under the New Technology APCs for new procedures in that transitional phase. 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 low annual volume, which we consider to be fewer than 100 claims in the year of claims data used for ratesetting (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 [[Page 94016]] 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 through 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 (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 2025, we included the proposed payment rates for New Technology APCs 1491 to 1599 and 1901 through 1908 in Addendum A to the proposed rule (which is available on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). Comment: We received a comment requesting that CMS revise the New Technology APC criteria to accommodate for forms of algorithm-based healthcare services (ABHS). The commenter explained that certain ABHS, that provide new clinical outputs that can impact the diagnosis or treatment of a patient's disease, and represent additional costs to hospitals not currently accounted for in the provision of an underlying service, would most likely not meet the New Technology APC criteria because the service provided by the technology is occurring at the same time as the performance of an underlying service. The commenter also requested that the New Technology APC process allow for the creation of new procedural C-codes when needed. Response: We thank the commenter for their comment. As part of the existing New Technology APC process, CMS creates C-codes when we find that there is no existing code that can appropriately describe a service. CMS will assign a service to a New Technology APC when certain criteria are met, including the criterion that the service is truly new, meaning that 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. In the past, we have found that several SaaS procedures, including those that are algorithm-based, meet the existing New Technology APC criteria. For CY 2025, we proposed to assign several SaaS procedures that meet our criteria to New Technology APCs, many of which have been assigned to New Technology APCs for several years. However, we recognize that software-based technologies are rapidly evolving and, therefore, we are considering for future rulemaking whether specific adjustments to payment policies, including our New Technology APC policies, are needed to more accurately and appropriately pay for these products and services across settings of care. For CY 2025, we did not propose to make any changes to the existing New Technology APC criteria. After consideration of the public comments we received, we are not finalizing any changes to the New Technology APC criterion at this time.

2. Policy To Exempt Services With Very Low Claims Volume From APC

Reassignment Based on the Universal Low Volume Policy We continue to be concerned about payment stability for services assigned to New Technology APCs, specifically services with very low claims volume of fewer than 10 claims in the 4-year lookback period used under the universal low volume APC policy. Historically, we have used our equitable adjustment authority at section 1833(t)(2)(E) of the Act to exempt a number of services with very low claims volume from the universal low volume APC policy in instances where application of the universal low volume policy would lead to significant fluctuations in payment. Given the frequency with which we have needed to utilize our equitable adjustment authority to address significant fluctuations in payment for very low volume services, we noted in the proposed rule that we believed that refinements to our universal low volume policy for services assigned to New Technology APCs may be necessary. We also recognized that determining initial cost estimates for these services may be particularly challenging, given the lack of cost information for new and innovative technologies. To allow time for us to consider these issues, we proposed for CY 2025 to exempt services assigned to New Technology APCs with fewer than 10 claims over the 4-year lookback period used for the universal low volume policy. Instead of assigning these services to a different New Technology APC based on the very few claims available, we proposed that we would maintain the New Technology APC assignment for each service from the prior year, which in this case would be the New Technology APC assignment for CY 2024. We explained that we believed it was appropriate to apply this policy to New Technology APCs because services assigned to New Technology APCs represent new technologies for which it may be more challenging to determine an appropriate cost than for other, more established services. We believed 10 claims was an appropriate ceiling for exempting services from reassignment based on the universal low volume policy because we believed that at 10 claims a rough standard distribution begins to appear. We also believed that services with so few claims over the 4-year lookback period would be especially vulnerable to large changes in payment rates year-to-year as a result of one or two new [[Page 94017]] claims being available or one or two claims from what was previously the fourth year of the lookback period no longer being included in that period. Consistent with our overall policy regarding use of updated claims data in the final rule, we proposed to perform a similar analysis for the final rule using updated claims data, including determining whether specific HCPCS codes continue to meet the criteria for our universal low volume APC policy or our proposal to exempt services with fewer than 10 claims in the 4-year lookback period from the universal low volume APC policy and maintain their CY 2024 New Technology APC assignment. We noted we would update the APC placement as needed in the final rule. Comment: Commenters agreed with our concerns that the application of the universal low volume APC policy may result in payment instability for certain services assigned to New Technology APCs, but offered different perspectives on how to address the issue. One commenter, representing artificial intelligence companies, supported our proposal to exempt certain services from the universal low volume APC policy and recommended that we utilize 25 claims, rather than 10 claims when determining whether to maintain a service's New Technology APC assignment from the previous year. Another commenter, representing manufacturers of medical imaging equipment, did not believe that the proposal sufficiently addressed the policy concern of payment stability for services assigned to New Technology APCs. This commenter also believed that the proposal would create a disincentive for hospitals to furnish the service and, therefore, discourage claims utilization where it would be more prudent to have no claims than to risk being assigned to a lower paying New Technology APC in future years by exceeding the 10-claim threshold. Response: We agree with the commenters' concerns that applying the universal low volume APC policy can result in payment fluctuations from year-to-year. We also recognize that major payment fluctuations that do not reflect the actual cost of the service can have the effect of discouraging usage and keeping claims volume low, which prevents CMS from gathering sufficient claims data upon which to transition the service from a New Technology APC to an appropriate clinical APC. We disagree with one commenter's assertion that our proposal to maintain the New Technology APC placement of a service with extremely low claims volume would disincentivize usage of the service. By maintaining the APC placement for services with fewer than 10 claims in the four-year lookback period, we are removing the potential for a major payment change based on a handful of claims over multiple years, that may not reflect the actual cost of the service. We believe that this policy is an incremental step towards more stable and predictable payments while providers learn about these new technology services, which should have the effect of encouraging utilization in the long-term. We also disagree with the commenter's suggestion to increase the claims threshold from 10 to 25 claims. We proposed to exempt less than 10 claims from the universal low volume APC policy because at 10 claims a rough standard distribution begins to appear, and services with an extremely low number of claims are most vulnerable to significant payment fluctuations. Our proposal is meant to serve as a first step to addressing the issue of payment stability for services assigned to New Technology APCs. As we stated in the proposed rule, we continue to believe that refinements to the universal low volume APC policy with respect to its application to services in New Technology APCs may be necessary. We are finalizing our policy as proposed for CY 2025 and will consider additional changes in future years. Comment: One commenter expressed support for the universal low volume APC policy. Response: We thank the commenter for their input. After consideration of the public comments we received, we are finalizing our proposal to exempt services assigned to New Technology APCs with fewer than 10 claims in the four-year lookback period from the universal low volume APC policy and maintain their CY 2024 New Technology APC assignment as proposed.

3. Procedures Assigned to New Technology APCs for CY 2025

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 2025, 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, 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 through 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 through 63532). [[Page 94018]] 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.\18\ This therapy is administered through a subretinal injection, which interested parties describe as an extremely delicate and sensitive surgical procedure. The FDA-approved 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.'' --------------------------------------------------------------------------- \18\ 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.\19\ 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. --------------------------------------------------------------------------- \19\ 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; therefore, 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. For CY 2024, we proposed and finalized that we would delete HCPCS code C9770 effective December 31, 2023, and recognize CPT code 0810T (Subretinal injection of a pharmacologic agent, including vitrectomy and 1 or more retinotomies) starting January 1, 2024 (88 FR 81617 through 81619). We determined the payment rate for CPT code 0810T using the claims data for HCPCS code C9770 and designated CPT code 0810T 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 for HCPCS code C9770 to calculate an appropriate payment rate for purposes of assigning CPT code 0810T to a New Technology APC. For CY 2024, we finalized assignment of CPT code 0810T to APC 1563 (New Technology--Level 26 ($4001-$4500)) (88 FR 81617 through 81619). Since CMS recognized CPT code 0810T starting January 1, 2024, we do not have claims data for CPT code 0810T available for CY 2025 rulemaking. However, as HCPCS code C9770 was still in use until December 31, 2023, we proposed to determine the payment rate for CPT code 0810T using the claims data for HCPCS code C9770. This is similar to the policy we finalized for CY 2024. For CY 2025, we proposed to designate CPT code 0810T as a low volume procedure under our universal low volume APC policy, given that there were only 34 claims available for HCPCS code C9770 and none for CPT code 0810T. This is below the threshold of 100 claims for a service within a year required to designate a service as a low volume service and apply our universal low volume APC policy. Therefore, we proposed 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, which was 34 claims, we determined the geometric mean cost to be $3,934, the arithmetic mean cost to be $4,173, and the median cost to be $4,103. 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 $4,173 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 2025. Additionally, we proposed to perform a similar analysis using updated claims data in this final rule with comment period, including determining if CPT code 0810T continues to meet the criteria for our universal low volume APC policy, and update the APC assignment as needed. Please refer to Table 19 below for the final CY 2024 and proposed CY 2025 OPPS New Technology APC and status indicator assignments for CPT code 0810T. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 94019]] [GRAPHIC] [TIFF OMITTED] TR27NO24.042 We did not receive any public comments on our proposal to continue to assign HCPCS code 0810T to APC 1563 for CY 2025. Additional claims for CY 2023 have been processed since the proposed rule. Our analysis of the updated claims data found that the greater of the geometric mean, arithmetic mean, or median cost calculated for HCPCS code C9770 is approximately $4,240. This continues to fall into the cost band of New Technology APC 1563. Therefore, we are finalizing our proposal without modification to continue to assign HCPCS code 0810T to APC 1563. Please refer to Table 20 for the final OPPS New Technology APC and status indicator assignment for HCPCS codes 0810T for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.043 b. BgRT (APCs 1521 and 1525) Biology Guided Radiation Therapy (BgRT) uses positron-emitting radiopharmaceuticals to control delivery of radiation therapy to treat primary and metastatic lung or bone tumors. During radiation treatment delivery, the same system applies these firing filters to the real-time positron emission tomography (PET) data collected by the radiation treatment delivery machine. Effective January 1, 2024, CMS created HCPCS codes C9794 (Therapeutic radiology simulation-aided field setting; complex, including acquisition of PET and CT imaging data required for radiopharmaceutical-directed radiation therapy treatment planning (i.e., modeling) and C9795 (Stereotactic body radiation therapy, treatment delivery, per fraction to 1 or more lesions, including image guidance and real-time positron emissions-based delivery adjustments to 1 or more lesions, entire course not to exceed 5 fractions) to describe the modeling and treatment delivery portions of the BgRT service. We assigned HCPCS code C9794 to APC 1521 (New Technology--Level 21 ($1901-$2000)) and HCPCS code C9795 to APC 1525 (New Technology--Level 25 ($3501-$4000)) for CY 2024. For CY 2025, the OPPS payment rates were proposed based on available CY 2023 claims data. As HCPCS codes C9794 and C9795 were effective January 1, 2024, we do not have any claims data for the service. Therefore, for CY 2025, we proposed to continue to assign HCPCS code C9794 to APC 1521 (New Technology--Level 21 ($1901-$2000)) with a payment rate of $1,950.50 and HCPCS code C9795 to APC 1525 (New Technology--Level 25 ($3501-$4000)) with a payment rate of $3,750.50. Please refer to Table 21 below for the proposed [[Page 94020]] OPPS New Technology APC and status indicator assignment for HCPCS codes C9794 and C9795 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.044 Comment: We received several comments supporting our proposal to maintain the APC assignments for HCPCS code C9794 and C9795 until claims data are received. Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal without modification. Specifically, for CY 2025 we are finalizing our proposal to assign C9794 and C9795 to APCs 1521 (New Technology--Level 21 ($1901-$2000)) and 1525 (New Technology-- Level 25 ($3501-$4000)), respectively. We note that, effective January 1, 2025, two new G-codes are replacing HCPCS codes C9794 and C9795. Specifically, effective January 1, 2025, HCPCS codes C9794 and C9795 are being deleted and replaced by G0562 and G0563, respectively, to allow for payment in settings other than hospital outpatient departments for CY 2025. The descriptors for the new G-codes are the same as existing HCPCS codes C9794 and C9795. Please refer to Table 22 for the final OPPS New Technology APC and status indicator assignments for HCPCS codes G0562 and G0563 for CY 2025. The CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [[Page 94021]] [GRAPHIC] [TIFF OMITTED] TR27NO24.045 c. Blinded Procedure for NYHA Class III/IV Heart Failure (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, trans-esophageal echocardiography (TEE)/intracardiac echocardiography (ICE), and all imaging with or without guidance (for example, 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 furnishing 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/ASC 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 in CY 2023 or CY 2024, we continued to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2023 and 2024. For CY 2025, the OPPS payment rates were proposed based on available CY 2023 claims data. There were only three claims for HCPCS code C9758 within this time period. As this is below the threshold of 100 claims for a service within a year, we would designate C9758 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 C9758 to the appropriate New Technology APC. Given our proposal, which we are finalizing, to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low volume APC policy, we proposed to continue assigning HCPCS code C9758 to New Technology APC 1590 with a proposed payment rate of $17,500.50. Please refer to Table 23 for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9758 for CY 2025. [[Page 94022]] [GRAPHIC] [TIFF OMITTED] TR27NO24.046 Comment: We received one comment supporting our proposal to continue to assign HCPCS code C9758 to New Technology APC 1590. Response: We thank the commenter for their support. Our updated claims data for the 4-year lookback period for the universal low volume APC policy continues to show only 3 claims for HCPCS code C9758. Therefore, we are finalizing our proposal without modification to continue assigning HCPCS code C9758 to New Technology APC 1590. Please refer to Table 24 for the final OPPS New Technology APC and status indicator assignment for HCPCS code C9758 for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.047 d. 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 (e.g., 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. We assigned the procedure to New Technology APC 1571 (New Technology-- Level 34 ($8001-$8500)) for CY 2019. In claims data available from 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 [[Page 94023]] 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 ($3501-$4000)), with a payment rate of $3,750.50 for CY 2022. There were no new claims for HCPCS code C9751 for the CY 2024 OPPS/ ASC final rule with comment period. Therefore, we continued to use claims from CY 2019 to determine the payment rate for the service; and continued to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3501-$4000)), with a payment rate of $3,750.50. There continue to be no separately payable claims for HCPCS code C9751 since 2019. Consistent with our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low volume APC policy, we proposed, for CY 2025, to continue to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3501-$4000)), with a payment rate of $3,750.50. Please refer to Table 25 for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9751 for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.048 We did not receive any public comments on our proposal to continue to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3501-$4000)). Additionally, our updated claims data continues to show that there are no new claims for C9751 for CY 2025. Therefore, we are finalizing our proposal without modification to continue to assign HCPCS code C9751 to APC 1562. Please refer to Table 26 for the final OPPS New Technology APC and status indicator assignment for HCPCS codes C9751 for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [[Page 94024]] [GRAPHIC] [TIFF OMITTED] TR27NO24.049 e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) Studies (APCs 1520 and 1522) For CY 2025, the OPPS payment rates for the service described by CPT codes 78431, 78432, and 78433 were proposed to be based on available CY 2023 claims data. CPT code 78431 had over 26,000 single frequency claims in CY 2023. The geometric mean cost for CPT code 78431 was approximately $2,350. The geometric mean falls within APC 1522 (New Technology--Level 22 ($2001-$2500)) with a payment rate of $2,250.50, which is the current APC assignment for this service. Therefore, we proposed, for CY 2025, to continue to assign CPT code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500)) with a payment rate of $2,250.50. There were only 19 single frequency claims in CY 2023 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 New Technology APC policy and used 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, CY 2022, and CY 2023, our analysis found the geometric mean cost of the service was approximately $1,760, the arithmetic mean cost of the service was approximately $1,920, and the median cost of the service was approximately $1,540. The arithmetic mean was the statistical methodology that estimated the highest cost for the service. The arithmetic mean cost of $1,923, is an amount that is above the cost band for APC 1520 (New Technology--Level 20 ($1801-$1900)), where the procedure is currently assigned for CY 2024. Therefore, we proposed, for CY 2025, to assign CPT code 78432 to APC 1521 (New Technology--Level 21 ($1901-$2000)) with a payment rate of $1950.50. There were over 1,400 single frequency claims for CPT code 78433 in CY 2023. The geometric mean cost for CPT code 78433 was approximately $2,010, which is an amount that is above the current New Technology APC cost band for APC 1521 (New Technology--Level 21 ($1901-$2000)) to which it is assigned for CY 2024. Therefore, for CY 2025, we proposed to reassign CPT code 78433 to APC 1522 (New Technology--Level 22 ($2001-$2500)) with a payment rate of $2,250.50. Please refer to Table 27 below for the proposed OPPS New Technology APC and status indicator assignments for CPT codes 78431, 78432, and 78433 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. BILLING CODE 4120-01-P [[Page 94025]] [GRAPHIC] [TIFF OMITTED] TR27NO24.050 BILLING CODE 4120-01-C Comment: We received comments supporting our proposals to assign CPT codes 78431 and 78433 to APC 1522 (New Technology--Level 22 ($2001- $2500)) and to assign CPT code 78432 to APC 1521 (New Technology--Level 21 ($1901-$2000)). One commenter noted that the geometric mean costs and hospital reporting for PET/CT services is stabilizing and that the claims data will support stable payment rates in future years. Response: We thank the commenters for their support. We agree that the claims data for these services have been stabilizing in recent years, and any payment adjustments have been, generally, minor. As we have begun to gather adequate claims data, we will consider whether to assign CPT codes 78431 and 78433 to clinical APCs in future rulemaking. Comment: One commenter supported our proposals to assign CPT codes 78431 and 78433 to APC 1522 but did not support our proposal to assign CPT code 78432 to APC 1521. The commenter explained that CPT code 78431 should be assigned to APC 1522 or higher because, from a clinical workflow perspective, CPT code 78432 requires more resources than CPT code 78431. The commenter explained that they believe the low claims volume is responsible for the lower payment rate for CPT codes 78432. Response: We thank the commenter for their input. We note that New Technology APCs are cost bands rather than clinical groupings. Unlike when we assign a service to a clinical APC and consider resource and clinical similarities to other services in a clinical APC, we assign services to New Technology APCs based on cost. While we appreciate the commenter's information regarding the clinical differences between CPT codes 78431 and 78432, we adjust New Technology APC assignments based on the claims [[Page 94026]] data available rather than clinical characteristics of a service. We note that additional claims for CPT codes 78431 through 78433 have been processed since the proposed rule. Based on updated claims data, CPT code 78431 has an updated geometric mean cost of approximately $2,300. Because the geometric mean cost of CPT code 78431 is still within the range for APC 1522, the proposed APC assignment for CPT code 78431 for CY 2025, we are finalizing the proposed APC assignment of CPT code 78431 without modification. There were close to 15 additional single frequency claims for CY 2023 processed for CPT code 78432 since the proposed rule, bringing the total number of single frequency claims to approximately 33 for CPT code 78432 for CY 2023. Based on the updated claims data for CPT code 78432, the geometric mean cost is approximately $1,750; the arithmetic mean cost is approximately $1,890; and the median cost is approximately $1,590. Of these, the highest statistical methodology is the arithmetic mean cost of $1,890. Since the updated arithmetic mean cost for CPT code 78432 is outside of the cost band for APC 1521 (New Technology-- Level 21 ($1901-$2000), we are not finalizing our proposal to assign CPT code 78432 to APC 1521 for CY 2025. Based on the updated statistical methodologies, we are assigning CPT code 78432 to APC 1520 for CY 2025 (New Technology--Level 20 ($1801-$1900)) with a payment rate of $1,850.50. For CPT code 78433, the geometric mean cost based on the updated claims data has changed to approximately $1964, down from approximately $2010 at the time of the proposed rule. Therefore, we are not finalizing the assignment of CPT code 78433 to APC 1522 as proposed because the geometric mean cost falls outside of the cost band for proposed APC 1522 (New Technology--Level 22 ($2001-$2500)). We are assigning CPT code 78433 to APC 1521 (New Technology--Level 21 ($1901- $2000)) for CY 2025, which is the same New Technology APC to which it is currently assigned for CY 2024. Please refer to Table 28 for the final OPPS New Technology APC and status indicator assignments for CPT codes 7843, 78432, and 78433 for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. BILLING CODE 4120-01-P [[Page 94027]] [GRAPHIC] [TIFF OMITTED] TR27NO24.051 BILLING CODE 4120-01-C f. 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 \20\ and the CardiAMP Cell Therapy Heart Failure Trial.\21\ The two trials are designed to investigate the safety and efficacy of autologous bone marrow mononuclear cell 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 [[Page 94028]] echocardiography, ultrasound, fluoroscopy), all device(s), performed in an approved Investigational Device Exemption (IDE) study) to clarify the inclusion of the Helix trans endocardial 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. --------------------------------------------------------------------------- \20\ 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. \21\ 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 2025, the proposed OPPS payment rates were based on available CY 2023 claims data. We identified three single frequency paid claims for C9782 for ratesetting for CY 2025. As this is below the threshold of 100 claims for a service within a year, we would designate C9782 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 CPT codes C9782 to the appropriate New Technology APC. Our analysis of the data found the geometric mean cost of the service is approximately $18,045, the arithmetic mean cost of the service is approximately $18,332, and the median cost of the service is approximately $20,394. The median was the statistical methodology that estimated the highest cost for the service. However, because there are only three claims for HCPCS code C9782 from the CY 2023 claims data, we had concerns that the universal low volume APC policy calculations would not accurately capture the cost of the service. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we proposed to continue to assign HCPCS code C9782 to New Technology APC 1590 with a payment rate of $17,050.50. Please refer to Table 29 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9782 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.052 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 2025. Please refer to Table 30 for the final OPPS New Technology APC and status indicator assignment for CPT code C9782. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment via the internet on the CMS website. [[Page 94029]] [GRAPHIC] [TIFF OMITTED] TR27NO24.053 g. Atherosclerosis Imaging-Quantitative Computer Tomography (AI-QCT) (APC 1511) Atherosclerosis Imaging-Quantitative Computer Tomography (AI-QCT) is a Software as a Service (SaaS) that assesses the extent of coronary artery disease severity. 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. Of these four CPT codes, only CPT code 0625T was determined to be separately payable in the OPPS and was assigned to status indicator = ``S'' (Procedure or Service, Not Discounted When Multiple) starting October 1, 2022. We assigned CPT code 0625T to a separately payable status indicator 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. The procedure was assigned to APC 1511 (New Technology--Level 11 ($900-$1000)) with a payment rate of $950.50. For CY 2024, the OPPS payment rates were proposed to be based on available CY 2022 claims data. There were 37 claims for CPT code 0625T during this time period. As this was 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 New Technology 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 arithmetic mean cost to be approximately $4.10, and the median cost to be approximately $3.50. Under our universal low volume New Technology 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 did 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 adopted as final our proposal [[Page 94030]] to maintain CPT code 0625T's current assignment to APC 1511 (New Technology--Level 11 ($901-$1000) with a payment rate of $950.50. For setting CY 2025 payment rates, there were only three separately payable claims in the CY 2023 data reported for CPT code 0625T indicating a geometric mean cost of approximately $180, which is substantially lower than the code's current payment rate of $950.50. Additionally, in CY 2022 and CY 2023, there were a total of 40 separately payable claims reported for CPT code 0625T, but it is unlikely that a service with a current payment rate of $950.50 would have a geometric mean of $4.20, an arithmetic mean of $6.60, and a median of $3.52. These findings lead to uncertainty about the appropriate payment rate for the service described by CPT code 0625T. A review of the evidence submitted by the developer of the procedure when this procedure was originally assigned to a New Technology APC, and before any claims data were available, indicated the procedure had a cost between $901 and $1,000. Claims for CPT code 0625T from CY 2021 and CY 2022 indicate that the cost of the procedure is less than $10, which would not appear to cover the basic cost of this procedure, including computing time, generating a report, and having medical personnel interpret the report. For CY 2023, the geometric mean cost of approximately $180 based on three claims may better reflect the cost of the procedure described by CPT code 0625T, but there were not enough claims to be confident about the result. Therefore, we proposed to use our authority under section 1833(t)(2)(E) for CY 2025 to continue to assign CPT code 0625T to APC 1511 (New Technology--Level 11 ($901- $1000) with a payment rate of $950.50 based on the data currently available to us, which we believe best reflects the cost of the service as described by the New Technology APC application. Refer to Table 31 for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0625T for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.054 Comment: We received several comments supporting the assignment of CPT code 0625T to APC 1511 (New Technology--Level 11 ($901-$1000) for CY 2025. Response: We thank the commenters for their support. We note that since the CY 2025 OPPS/ASC proposed rule was issued, two additional claims for CPT code 0625T have been processed, with the updated geometric mean cost increasing to approximately $498. Although we have two additional claims, we are not certain that we have enough claims data to be confident in the calculated geometric mean cost for CPT code 0625T. Therefore, we are finalizing our proposal, without modification, to continue to assign CPT code 0625T to APC 1511 (New Technology--Level 11 ($901-$1000). Please refer to Table 32 for the final OPPS New Technology APC and status indicator assignment for CPT code 0625T. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 94031]] [GRAPHIC] [TIFF OMITTED] TR27NO24.055 h. 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, including right and left heart catheterization, transeptal puncture, trans-esophageal echocardiography (tee)/intracardiac echocardiography (ice), and all imaging with or without guidance (for example, ultrasound, fluoroscopy) performed in an approved investigational device exemption (ide) study, 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. 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 generally used the same claims data as was used in the CY 2021 OPPS final rule to set the payment rates for that year. Accordingly, because there were no claims for this service in CY 2019, we continued to assign HCPCS code C9760 to New Technology APC 1592 in CY 2022. There continued to be no claims data for this service in CY 2021, so we continued to assign HCPCS code C9760 to New Technology APC 1592 in CY 2023, the year for which we used CY 2021 data for ratesetting. While there was one claim in CY 2022, we continued to assign HCPCS code C9760 to New Technology APC 1592 for CY 2024 due to the extremely limited claims data available. For CY 2025, the OPPS payment rates were proposed to be based on available CY 2023 claims data. There were no claims for HCPCS code C9760 in CY 2023. Therefore, we proposed to continue assigning HCPCS code C9760 to New Technology APC 1592. Please refer to Table 33 for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9760. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 94032]] [GRAPHIC] [TIFF OMITTED] TR27NO24.056 We did not receive any public comments on our proposal, and we still do not have any claims for the service. Therefore, for CY 2025, we are finalizing our proposal without modification. Specifically for CY 2025, we are assigning HCPCS code C9760 to APC 1592 (New Technology--Level 41 ($25,001-$30,000)) with a payment rate of $27,500.50. Please refer to Table 34 below for the final OPPS New Technology APC and status indicator assignments for HCPCS code C9760 for CY 2025. The CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.057 i. 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 [[Page 94033]] 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, there were no claims available, so we again continued to assign CPT code 0693T to New Technology APC 1505. For CY 2025, the OPPS payment rates were proposed based on available CY 2023 claims data. Although CPT code 0693T was effective January 1, 2022, we have no claims data at this time. Because we have no claims data, for CY 2025, we proposed to continue to assign CPT code 0693T to APC 1505 with a proposed payment rate of $350.50. Refer to Table 35 for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0693T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.058 We did not receive any public comments on our proposal, and we still do not have any claims for the service. Therefore, for CY 2025, we are finalizing our proposal without modification. Specifically, for CY 2025, we are assigning CPT code 0693T to APC 1505 with a status indicator of ``S''. The final New Technology APC and status indicator assignments for CPT code 0693T for CY 2025 are found in Table 36. The CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.059 j. Instillation of Anti-Neoplastic Pharmacologic/Biologic Agent Into Renal Pelvis (APC 1558) Effective October 1, 2023, CMS established HCPCS code C9789 (Instillation of anti-neoplastic pharmacologic/biologic agent into renal pelvis, any method, including all imaging guidance, including volumetric measurement if performed) and assigned it to New Technology APC 1559 (New Technology--Level 22 ($2001-$2500)), with a payment rate of $2,250.50 based on our review of the clinical and resource characteristics of this service. This code may be used to describe the unique procedure associated with the administration of the drug described by HCPCS code J9281 (Mitomycin pyelocalyceal instillation, 1 mg) or similar products. HCPCS code J9281 may be used to describe the product, Jelmyto (mitomycin for pyelocalyceal solution). The FDA approved Jelmyto in 2020, and the FDA approved indication and usage for Jelmyto is as an alkylating drug indicated for the treatment of adult patients with low-grade Upper Tract Urothelial Cancer (LG-UTUS).\22\ --------------------------------------------------------------------------- \22\ Jelmyto Package Insert. 01/14/2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/211728s002lbl.pdf. --------------------------------------------------------------------------- Because we created HCPCS code C9789 effective October 1, 2023, we have limited claims data from CY 2023 available for CY 2025 rulemaking. Specifically, we only had 6 claims available. Given our proposal to [[Page 94034]] maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we proposed to continue to assign HCPCS code C9789 to New Technology APC 1559 (New Technology--Level 22 ($2001-$2500)). Please refer to Table 37 for the proposed OPPS New Technology APC and status indicator assignments for CPT code C9789 for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.060 Comment: We received one comment in support of our proposal. Response: We thank the commenter for their support. Our updated claims data during the 4-year lookback period applicable for the universal low-volume APC policy continues to show only 6 claims for HCPCS code C9789. Therefore, we are finalizing our proposal without modification to continue assigning HCPCS code C9758 to New Technology APC 1559 (New Technology--Level 22 ($2001-$2500)). Please refer to Table 38 below for the final OPPS New Technology APC and status indicator assignment for HCPCS code C9789 for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.061 k. LimFlow TADV Procedure CPT Code 0620T (APC 1579) 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 an endovascular procedure that is used [[Page 94035]] to treat patients with chronic limb-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. CPT code 0620T was established in January 2021 and was assigned to APC 5194 (Level 4 Endovascular Procedures) with a payment rate of approximately $17,400, which is the highest-paying APC for endovascular procedures. While we proposed to continue to assign CPT code 0620T to APC 5194 for CY 2024, we finalized a reassignment from a clinical APC to a New Technology APC with a higher payment rate based on comments received expressing concern that the low payment rate of the procedure would discourage providers from performing the procedure and deny access to the procedure. To determine the appropriate New Technology APC assignment for CY 2024, we looked at the available cost information. There were only 15 claims for the procedure for CY 2021 and CY 2022, so the LimFlow TADV procedure was subject to our new technology procedure low volume APC policy. An analysis of the median, arithmetic mean, and geometric mean of CPT code 0620T for CY 2024 rulemaking found that the median was approximately $25,800, the arithmetic mean was approximately $28,600, and the geometric mean was approximately $26,700. Because the arithmetic mean had the highest value of the three cost statistics, for CY 2024, we assigned CPT code 0620T to New Technology APC 1578 (New Technology--Level 41 ($25,001- $30,000)) with a payment rate of $27,500.50. For CY 2025, the OPPS payment rates were proposed to be based on available CY 2023 claims data. We identified only six single frequency claims for CPT code 0620T in the CY 2023 claims data. As this is below the threshold of 100 claims for a service within a year, we proposed to again 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 the service to the appropriate New Technology APC. Based on our review of the available claims, we determined that the arithmetic mean was approximately $35,000; the median was approximately $36,000; and the geometric mean cost was approximately $33,000. Of these, 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 1579 (New Technology--Level 42 ($30,001- $40,000)) with a payment rate of $35,000.50. Therefore, for CY 2025, we proposed to designate this service as a low volume service under our universal low volume APC policy and to assign HCPCS code 0620T to New Technology APC 1579. [GRAPHIC] [TIFF OMITTED] TR27NO24.062 Comment: We received a comment from the manufacturer supporting our proposal to designate CPT code 0620T as a low volume service under the universal low volume APC policy and assign the service to New Technology APC 1579 for CY 2025, as they believe the proposed assignment more accurately reflects the resources used in the procedure. Response: We thank the commenter for their support. We note that there are an additional five claims for CPT code 0620T for CY 2023 that have been processed since the proposed rule. Based on the 11 single frequency claims available for CY 2023, in addition to the other 26 claims in the 4-year lookback period, we determined that the arithmetic mean is $35,700; the median is $36,400; and the geometric mean cost is $33,900. Since the total number of claims for CPT code 0620T for CY 2023 is still below the 100-claim threshold, we are finalizing our proposal to designate 0620T as a low volume service under the universal low volume APC policy. The payment rate calculated using the highest of these methodologies, the median, continues to fall within the cost band for New Technology APC 1579 (New Technology--Level 42 ($30,001-$40,000)) with a payment rate of $35,000.50. Therefore, we are also finalizing our proposal without modification to assign CPT code 0620T to New Technology APC 1579 for CY 2025. Please refer to Table 40 for the final OPPS New Technology APC and status indicator assignments for CPT code [[Page 94036]] 0662T for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.063 l. 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.\23\ 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 (absent the cost of the device) each time it is reported on a claim. 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, payment for CPT code 0686T in CY 2024 reflects payment for both the service that is performed and the device used each time it is reported on a claim. For CY 2024, we assigned CPT code 0686T to New Technology APC 1576 (New Technology--Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50. --------------------------------------------------------------------------- \23\ 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 2025, proposed OPPS payment rates were based on available CY 2023 claims data. We have identified one claim for CPT code 0686T within the CY 2023 claims data. As the available claims data is below the threshold of 100 claims for a service within a year, we would 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. However, because there is only a single claim in the CY 2023 data, we have concerns that the universal low volume APC policy calculations do not accurately capture the cost of the service. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low volume APC policy, and based on the fact that there have only been 3 claims for CPT code 0686T in the prior 4-year period, we proposed to continue to assign CPT code 0686T to APC 1576 (New Technology--Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50 as shown in Table 25. Please refer to Table 41 for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0686T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule. [[Page 94037]] [GRAPHIC] [TIFF OMITTED] TR27NO24.064 We did not receive any public comments on our proposal and are finalizing it without modification. HCPCS code 0686T will be assigned to New Technology APC 1576 with a status indication of ``S'' for CY 2025. Please refer to Table 42 below for the final OPPS New Technology APC and status indicator assignment for CPT code 0686T. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.065 m. LiverMultiScan 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 LiverMultiScan 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. In accordance with our SaaS add-on codes policy (87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Thus, CPT code 0649T, the add-on code for LiverMultiScan, is assigned to the identical APC and status indicator as CPT code 0648T, the standalone code for the same service. For CY 2024, 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 2025, the OPPS payment rates were proposed to be based on available CY 2023 claims data. We identified 71 claims for CPT code 0648T and 72 claims for CPT code 0649T for CY 2023. As this is below the threshold of 100 claims for each code within a year, we [[Page 94038]] proposed to utilize 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 combined data, 114 claims for CPT code 0648T and 115 claims for CPT code 0649T, yielded a geometric mean cost of approximately $180, an arithmetic mean cost of approximately $234, and a median cost of approximately $197. We explained that we believed it was appropriate to utilize our universal low volume APC policy to assign the LiverMultiScan service to a New Technology APC because we stated that we believed that the combined claims data from CY 2021 to CY 2023 provided sufficient claims to capture the cost of the service. The arithmetic mean was the statistical methodology that estimated the highest cost for CPT codes 0648T and 0649T. Therefore, we proposed to reassign CPT codes 0648T and 0649T to New Technology APC 1504 (New Technology--Level 4 ($201-$300)) with a payment rate of $250.50 as shown in Table 43. [GRAPHIC] [TIFF OMITTED] TR27NO24.066 Comment: We received several comments, including a comment from the manufacturer, requesting that we maintain the APC assignment for the CPT codes 0648T and 0649T at APC 1511. Many commenters stated that the cost of each of the services is at least $950, and that the proposed payment rate of $250 would be inadequate to ensure patient access. Commenters noted that the claims data used to determine the CY 2025 OPPS proposed APC assignment for this service represent an insufficient number of claims to estimate the cost for this service. One commenter expressed concern about the wide data variability present in the claims data for CPT codes 0648T and 0649T. One commenter requested that we develop a payment policy for SaaS like CPT codes 0648T and 0649T that results in appropriate and consistent payment for innovative new services. We also received one comment signed by ten radiologists stating that the current payment rate for the procedures was too high. Response: We recognize that software-based technologies, like those described by CPT codes 0648T and 0649T, are rapidly evolving and, therefore, we are considering for future rulemaking whether specific adjustments to payment policies, including our New Technology APC policies, are needed to more accurately and appropriately pay for these products and services across settings of care. For CY 2025, we recognize that the few claims available for CPT codes 0648T and 0649T may not truly represent the cost of this service. While we received a comment expressing concern over the potential overpayment of the service, we do not believe we have sufficient claims to justify a reassignment at this time. Therefore, we agree with the commenters that, for both CPT codes 0648T and 0649T, we should maintain the payment rates for CY 2025 until we have additional claims data. Comment: One commenter supported the proposed reassignment of CPT codes 0648T and 0649T to New Technology APC 1504. The commenter stated that the payment rate of $950 created a paradigm where the third-party automated quantitative analytic service was valued greater than the MRI procedure that included technologist staffing, professional interpretation and liability. The commenter believed that the payment of the service should be [[Page 94039]] based on the true cost of these automated digital quantitative services at New Technology APC 1504. Response: We thank the commenter for its support of our proposal. We reiterate that the few claims for CPT codes 0648T and 0649T may not truly represent the cost of this service or justify a reassignment at this time. After consideration of the public comments we received, we are finalizing our proposal with modifications. We are using 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 for CY 2025. Please refer to Table 44 below for the final OPPS New Technology APC and status indicator assignments for CPT codes 0648T and 0649T for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.067 n. 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). In accordance with our SaaS add-on codes policy (87 FR 72032 and 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Thus, CPT code 0722T, the add-on code for the Optellum LCP service, is assigned to the identical APC and status indicator as CPT code 0721T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0721T and 0722T to APC New Technology 1508 (New Technology--Level 8 ($601-$700)). For CY 2025, the OPPS payment rates were proposed based on available CY 2023 claims data. We identified three claims for CPT codes 0721T and 0722T for ratesetting for CY 2025. As this is below the threshold of 100 claims for a service within a year, we would usually 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 CPT codes 0721T and 0722T to the appropriate New Technology APC. There are available claims data only from CY 2023 for CPT codes 0721T and 0722T. Our analysis of the data for CPT code 0721T found the geometric mean cost of the service is approximately $84, the arithmetic mean cost of the service is approximately $98, and the median [[Page 94040]] cost of the service is approximately $130. We did not identify any reported claims for CPT code 0722T. However, because there were only three claims for the Optellum LCP service and these claims show a much lower cost than would be expected based on the current APC assignment of this service, we have concerns that the universal low volume APC policy calculations do not accurately capture the cost of the service. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we proposed to continue to assign CPT codes 0721T and 0722T to New Technology APC 1508 (New Technology--Level 8 ($601-$700)) with a proposed payment rate of $650.50. Please refer to Table 45 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS codes 0721T and 0722T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.068 We did not receive any public comments on our proposal, and we are finalizing our proposal without modification. We are assigning HCPCS codes 0721T and 0722T to New Technology APC 1508 with a status indication of ``S'' for CY 2025. Please refer to Table 46 below for the final OPPS New Technology APC and status indicator assignment for CPT codes 0721T and 0722T. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [[Page 94041]] [GRAPHIC] [TIFF OMITTED] TR27NO24.069 o. Quantitative Magnetic Resonance (QMR) for Analysis of Tissue Composition (APC 1511) Effective January 1, 2022, CPT codes 0697T (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; multiple organs) and 0698T (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); multiple organs (list separately in addition to code for primary procedure)) are associated with the CoverScan Software as a medical Service (SaaS). This service is a medical image management and processing software package that analyzes MR data and provides quantified metrics of multiple organs such as the heart, lungs, liver, spleen, pancreas, and kidney. In accordance with our SaaS add-on codes policy (87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Thus, CPT code 0698T, the add-on code for CoverScan is be assigned to the same APC and status indicator as CPT code 0697T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0697T and 0698T to New Technology APC 1511 (New Technology--Level 11 ($900-$1,000)). For CY 2025, the proposed OPPS payment rates were based on available CY 2023 claims data. We identified 48 claims for CPT code 0698T and no claims for CPT code 0697T in CY 2023. 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 0697T and 0698T to the appropriate New Technology APC. There are also available claims data from CY 2022 for CPT code 0698T. Our analysis of the combined data, approximately 80 claims, yielded a geometric mean cost of approximately $444, an arithmetic mean cost of approximately $622, and a median cost of approximately $786. The median cost is the statistical methodology that estimates the highest cost for CPT codes 0697T and 0698T. Therefore, we proposed, for CY 2025, to reassign CPT codes 0697T and 0698T to APC 1509 (New Technology--Level 9 ($701-$800)) with a payment rate of $750.50. Refer to Table 47 below for the proposed OPPS New Technology APC and status indicator assignments for CPT codes 0697T and 0698T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 94042]] [GRAPHIC] [TIFF OMITTED] TR27NO24.070 Comment: Commenters requested that we maintain the APC assignment for the CPT codes 0697T and 0698T at APC 1511 for CY 2025. Many commenters stated that the cost of each of the services is at least $950, and that the proposed payment rate of $750 does not cover the cost of this service. One commenter noted that the claims data used to determine the CY 2025 OPPS proposed rate for this service represent an insufficient number of claims to estimate the cost for this service. Additionally, the commenter stated that wide variability in claims data distorts the applicability of the universal low volume APC policy and skews the arithmetic mean value. Commenters were concerned that the proposed payment rate would hinder patient access to these services. Response: We recognize that software-based technologies, like those described by CPT codes 0697T and 0698T, are rapidly evolving and, therefore, we are considering for future rulemaking whether specific adjustments to payment policies, including our New Technology APC policies, are needed to more accurately and appropriately pay for these products and services across settings of care. For CY 2025, we recognize that the few claims available for CPT codes 0697T and 0698T may not truly represent the cost of this service. We agree with the commenters that, for both CPT codes 0697T and 0698T, we should maintain the payment rates for CY 2025 until we have additional claims data. After consideration of the public comments we received, we are finalizing our proposal with modifications. We will use our equitable adjustment authority under section 1833(t)(2)(E) to continue to assign CPT codes 0697T and 0698T to New Technology APC 1511 (New Technology-- Level 11 ($901-$1,000) with a payment rate of $950.50 for CY 2025. Please refer to Table 48 below for the final OPPS New Technology APC and status indicator assignments for CPT codes 0697T and 0698T for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [[Page 94043]] [GRAPHIC] [TIFF OMITTED] TR27NO24.070 p. 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 (e.g., 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 (e.g., 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. In accordance with our SaaS add-on codes policy (87 FR 72032 and 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Consistent with our SaaS add-on codes policy, CPT code 0724T, the add-on code for QMRCP is assigned to the identical APC and status indicator as CPT code 0723T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0723T and 0724T to New Technology APC 1511 (New Technology--Level 11 ($900-$1,000)). For CY 2025, the proposed OPPS payment rates were based on available CY 2023 claims data. We identified 3 claims for CPT code 0724T and no claims for CPT code 0723T in CY 2023. As this is below the threshold of 100 claims for a service within a year, we would usually 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 CPT codes 0723T and 0724T to the appropriate New Technology APC. There is only one single claim from CY 2022 for CPT code 0724T and no claims for CPT code 0723T. For CY 2023, we received 3 claims for CPT code for CPT 0724T and no claims for CPT code 0723T. Our analysis of the combined CY 2022 and CY 2023 data for CPT code 0723T and 0724T found the geometric mean cost of the service is approximately $26, the arithmetic mean cost of the service is approximately $26, and the median cost of the service is approximately $27. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low volume APC policy, we proposed to continue to assign the CPT codes 0723T and 0724T to New Technology APC 1511 (New Technology--Level 11 ($901-$1,000)) with a payment rate of $950.50. Refer to Table 49 for the proposed OPPS New Technology APC and status indicator assignments for CPT codes 0723T and 0724T for CY 2025. [[Page 94044]] [GRAPHIC] [TIFF OMITTED] TR27NO24.072 We did not receive any public comments on our proposal to continue to assign the CPT codes 0723T and 0724T to New Technology APC 1511 (New Technology--Level 11 ($901-$1,000)). Our updated claims data did not show any additional claims for CY 2023 for CPT codes 0723T and 0724T. Therefore, we are finalizing our proposal without modification to continue to assign CPT codes 0723T and 0724T to APC 1511. Please refer to Table 50 for the final OPPS New Technology APC and status indicator assignment for CPT codes 0723T and 0724T for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [[Page 94045]] [GRAPHIC] [TIFF OMITTED] TR27NO24.073 q. Scalp Cooling (APC 1519) 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 calibrating and fitting 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 ($1,801-$1,900)) 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 we finalized reassignment of CPT code 0662T to APC 1514 (New Technology-- Level 14 ($1,201-$1,300)) with a payment rate of $1,250.50 based on 11 single frequency claims. For CY 2025, the OPPS payment rates were proposed to be based on available CY 2023 claims data. The Scalp Cooling service became effective in the OPPS in CY 2022, and we identified 38 single frequency paid claims for CPT code 0662T for CY 2023. 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, we determined that the geometric mean cost for CPT code 0662T was approximately $841; the median was approximately $1,351; and the arithmetic mean was approximately $1,361. Therefore, for CY 2025, we proposed to designate this service as a low volume service under our universal low volume APC policy and to reassign CPT code 0662T to APC 1515 (New Technology-- Level 15 ($1301-$1400)) with a payment rate of $1,350.50 for CY 2025 based on the arithmetic mean of approximately $1,361.Please refer to Table 51 below for the proposed OPPS New Technology APC and status indicator assignment for CPT code 0662T. The proposed CY 2025 payment rates can be found in Addendum B CY 2025 OPPS/ASC proposed rule via the internet on the CMS website. [[Page 94046]] [GRAPHIC] [TIFF OMITTED] TR27NO24.074 We did not receive any public comments on our proposal. We note that additional claims for CPT code 0662T have been processed since the proposed rule. Specifically, there are 50 single frequency claims for CPT code 0662T for CY 2023. Since this is below the threshold of 100 claims, we are finalizing our proposal to designate CPT code 0662T as a low volume service under our universal low volume APC policy and use the greater of the geometric mean, arithmetic mean, or median cost based on the available claims data for CPT code 0662T to calculate an appropriate payment rate for purposes of assigning CPT code 0662T to a New Technology APC. Based on the updated claims data available for this final rule, we found the geometric mean cost to be approximately $1,110, the median to be $1,750, and the arithmetic mean to be $1,420. 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 1519 (New Technology--Level 19 ($1701-$1800)). Therefore, we are assigning CPT code 0662T to APC 1519 for CY 2025. Please refer to Table 52 for the final OPPS New Technology APC and status indicator assignments for CPT code 0662T for CY 2025. The final CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.075 r. Supervised Visits for Esketamine Self-Administration (APCs 1513 and 1518) 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 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 2 hours post-administration observation of the patient under direct supervision of a health care professional in the certified health care setting. Refer to the CY 2020 PFS final rule and interim final rule for [[Page 94047]] 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 who requires the supervision of a physician or other qualified health care professional and provision of up to 56 mg of esketamine through nasal self-administration and includes 2 hours 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- $1000)) with a payment rate of $950.50. Updates to the APC assignments for G2082 and G2083 have been made in past rules. 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), CY 2023 OPPS/ASC final rule with comment period (87 FR 71816-71817), and CY 2024 OPPS/ASC final rule with comment period (88 FR 81628--81630) for these updates. For CY 2025, the OPPS payment rates were proposed based on available CY 2023 claims data as the available single frequency claims exceed the 100 claims threshold generally used for our universal low volume policy. Therefore, for CY 2025, we proposed to assign HCPCS codes G2082 and G2083 to New Technology APCs based on the codes' geometric mean costs. Specifically, we proposed to assign HCPCS code G2082 to New Technology APC 1512 (New Technology--Level 12 ($1001- $1100)) with a payment rate of $1,050.50 based on its geometric mean cost of $1,087, which was calculated using the available 424 single frequency claims from CY 2023 claims data. We also proposed to assign HCPCS code G2083 to New Technology APC 1518 (New Technology--Level 18 ($1601-$1700)) with a payment rate of $1,650.50 based on its geometric mean cost of $1,643, which was calculated using the available 2,482 single frequency claims from CY 2023 claims data. Refer to Table 53 for the New Technology APC and status indicator assignments for HCPCS codes G2082 and G2083. The proposed CY 2025 payment rates for these HCPCS codes can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule. [[Page 94048]] [GRAPHIC] [TIFF OMITTED] TR27NO24.076 We did not receive any public comments on our proposal. We note however that 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 geometric mean cost for HCPCS code G2082 is $1,104.71 and the geometric mean cost for G2083 is $1,448.83. Based on updated claims data available for this final rule with comment period, we are finalizing a New Technology APC assignment for HCPCS code G2082 to APC 1513 (New Technology--Level 13 ($1101-$1200)) with a payment of $1150.50 and we are finalizing a New Technology APC assignment for HCPCS code G2083 to APC 1516 (New Technology--Level 16 ($1401-$1500)) with a payment of $1450.50. Please refer to Table 54 for the CY 2025 proposed and final APC and SI assignments for HCPCS codes G2082 and G2083. The CY 2025 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. Finally, we note that because we have gathered additional claims data and seen increases in claims volume, we are considering placing HCPCS codes G2082 and G2083 into clinical APCs through future rulemaking. [[Page 94049]] [GRAPHIC] [TIFF OMITTED] TR27NO24.077 s. 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 2025, there were only 3 single frequency claims in CY 2023 for HCPCS code C9780. There were no available claims from CY 2021 or CY 2022. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low volume APC policy, we proposed to continue to assign HCPCS code C9780 to APC 1534 (New Technology--Level 34 ($8001-$8500)) with a payment rate of $8,250.50. Refer to Table 55 for the proposed New Technology APC and status indicator assignments for HCPCS code C9780. [[Page 94050]] [GRAPHIC] [TIFF OMITTED] TR27NO24.078 We did not receive any public comments on our proposal to continue to assign CPT code C9870 to APC 1534 (New Technology--Level 34 ($8001- $8500)). We note that there was one additional claim in our updated claims data, however, the total number of claims for CY 2023 is still under 10. Therefore, given our new policy to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low volume APC policy, we are finalizing as proposed to continue to assign CPT code C9870 to APC 1534. Please refer to Table 56 below for the final OPPS New Technology APC and status indicator assignment for HCPCS code C9780. The final CY 2025 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] TR27NO24.079 t. TASS (APC 1537) The Transcatheter Atrial Shunt System (TASS) is a nitinol self- expanding cardiovascular implant consisting of four arms including two left atrial (LA) arms and two coronary sinus (CS) arms placed between the left atrium and coronary sinus to create a 7mm flow diameter channel for blood to flow from the high pressure region of the left atrium to the lower pressure region of the right atrium via the coronary sinus. TASS is currently in a Category B IDE clinical trial. Effective October 1, 2023 CMS created HCPCS code C9792 (Blinded or nonblinded procedure for symptomatic New York Heart Association (NYHA) Class II, III, IV a heart failure; transcatheter implantation of left atrial to coronary sinus shunt using jugular vein access, including all imaging necessary to intra procedurally map the coronary sinus for optimal shunt placement (e.g., TEE or ICE ultrasound, fluoroscopy), performed under general anesthesia in an approved investigational device exemption (IDE) study) to describe the TASS service and assigned it to APC 1537 (New Technology--Level 37 ($9501-$10000)) with a payment rate of $9,750.50. For CY 2025, the proposed OPPS payment rates were based on available CY 2023 claims data. Due to the effective date of the code of October 1, 2023, there were no claims available for HCPCS code C9792 for rate setting in CY 2024. Therefore, in CY 2025, we proposed to continue to assign HCPCS code C9792 to APC 1537. Please refer to Table 57 below for the current and proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9792. The proposed CY 2025 payment rates can be found in Addendum B to the proposed rule via the internet on the CMS website. [[Page 94051]] [GRAPHIC] [TIFF OMITTED] TR27NO24.080 Comment: We received a comment supporting our proposal to continue to assign HCPCS code C9792 to APC 1537. 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 to assign CPT code C9792 to APC 1537 (New Technology--Level 37 ($9501-$10000)) with a payment rate of $9,750.50 for CY 2025. Please refer to Table 58 for the final OPPS New Technology APC and status indicator assignment for HCPCS code C9792. 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] TR27NO24.081 u. Magnetic Resonance Imaging With Inhaled Hyperpolarized Xenon-129 Contrast Agent (APC 1551) HCPCS code C9791 (Magnetic resonance imaging with inhaled hyperpolarized xenon-129 contrast agent, chest, including preparation and administration of agent) was established on October 1, 2023. For CY 2023, we assigned HCPCS code C9791 to New Technology APC 1551 (New Technology--Level 14 ($1201-$1300)). For CY 2024, the OPPS payment rates were based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Due to the effective date of the service of October 1, 2023, there were no claims available for HCPCS code C9791 for rate setting in CY 2024. Therefore, in CY 2024, we continued to assign HCPCS code C9791 to New Technology APC 1551. For CY 2025, the proposed OPPS payment rates were based on available CY 2023 claims data. Although HCPCS code C9791 was effective October 1, 2023, we did not have any claims data for the service for the proposed rule. Therefore, for CY 2025, we proposed to continue to assign HCPCS code C9791 to New Technology APC 1551 (New Technology-- Level 14) with a proposed payment rate of $1,250.50. [[Page 94052]] Please refer to Table 59 for the proposed OPPS New Technology APC and status indicator assignment for HCPCS code C9791 for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.082 We did not receive any public comments on our proposal, and we still do not have any claims for the service. Therefore, for CY 2025, we are finalizing our proposal without modification to assign HCPCS code C9791 to New Technology APC 1551 (New Technology--Level 14 ($1201- $1300)) and SI ``T''. The final New Technology APC and status indicator assignments for HCPCS code C9791 for CY 2025 are found in Table 60. The CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.083 v. SAINT Neuromodulation System The SAINT Neuromodulation System is a non-invasive repetitive transcranial magnetic stimulation (rTMS) system that identifies an individualized target and delivers navigationally directed repetitive magnetic pulses to that individualized target located within the left dorsolateral prefrontal cortex to treat major depressive disorder (MDD). The patient first receives structural MRI and functional MRI scans that are analyzed by the provider to identify and localize the personalized stimulation target in the patient's dorsolateral prefrontal cortex. Once the areas targeted for treatment are identified, the patient receives non-invasive magnetic stimulation in the targeted area. The patient has 10 treatment sessions per day with each treatment session lasting 10 minutes followed by 50 minutes of rest before another treatment session occurs. The treatment is administered over five days for a total of 50 sessions of non-invasive magnetic stimulation therapy. There are four CPT codes listed in Table 61 that describe the MRI scans that are used to target the treatment and describe the administration of the non-invasive magnetic stimulation therapy. [[Page 94053]] [GRAPHIC] [TIFF OMITTED] TR27NO24.084 For CY 2025, the OPPS payment rates were proposed based on available CY 2023 claims data. However, CPT codes 0889T, 0890T, 0891T, and 0892T did not become effective until July 1, 2024, which means there was no claims data for the procedures described these CPT codes. We assigned our proposed rates for these services based on our evaluation of the resources needed to perform these services. Table 62 lists CPT codes 0889T, 0890T, 0891T, and 0892T and our proposed status indicator and APC assignment for CY 2025. [[Page 94054]] [GRAPHIC] [TIFF OMITTED] TR27NO24.085 Comment: Several commenters, including clinicians and other interested parties, believe that the payment rate of $2,250.50 for the proposed APC assignment to New Technology APC 1522 (New Technology-- Level 22 ($2001-$2500)) for CPT codes 0890T, 0891T, and 0892T that describes the administration of the non-invasive magnetic stimulation therapy is too low. The commenters are concerned that the proposed payment rate will discourage providers from using the SAINT neuromodulation system to treat MDD. The commenters supported assigning CPT codes 0890T, 0891T, and 0892T to New Technology APC 1528 (New Technology--Level 28 ($5001-$5500)) with a payment rate of $5,250.50 to better reflect the resource cost of each of these three services. Multiple commenters also felt that the IPPS new technology add-on payment amount for the SAINT neuromodulation system acknowledged the cost of the SAINT system. Response: We do not have any claims data to directly determine the cost of the procedures described by CPT codes 0890T, 0891T, and 0892T. Therefore, we make our assessment of the resource costs to perform the procedure based on our judgment of the clinical and resource information presented to us about the SAINT neuromodulation system and the treatment approach in the manufacturer's OPPS New Technology APC application and through comments on the proposed rule. We agree with the commenters that the cost per case used for purposes of determining the IPPS maximum new technology add-on payment amount (88 FR 58938) was a more appropriate estimate of the cost of the SAINT neuromodulation system than our original cost estimate for the procedure in the CY 2025 OPPS proposed rule. For purposes of determining the new technology add- on payment amount, the cost estimate for the entire SAINT course of treatment, which included fifty sessions over five days of the non- invasive magnetic stimulation therapy and related operating costs, was $19,500. Our review has determined that the cost estimate of the procedure described by CPT code 0899T should remain the same and CPT code 0899T should [[Page 94055]] continue to be assigned to New Technology APC 1511 (New Technology-- Level 11 ($901-$1000)) with a payment rate of $950.50. However, we now have determined that the per day cost of the services described by CPT codes 0890T, 0891T, and 0892T is around $3,710 instead of our proposed estimate of around $2,250. We are changing the APC assignment for CPT codes 0890T, 0891T, and 0892T to New Technology APC 1525 (New Technology--Level 25 ($3501-$4000)) with a payment rate of $3,750.50. Comment: Several commenters described their experiences with MDD and receiving treatment for their MDD using the SAINT neuromodulation system. All of these commenters claimed that the SAINT therapy was beneficial to them and helped to reduce the symptoms of MDD, which substantially improved their mental health. Many of these commenters were able to receive SAINT because they participated in clinical trials for the therapy or were able to afford the treatment even if it was not covered by health insurance. The commenters want us to ensure that SAINT will be affordable to patients who receive treatment, and that SAINT will be widely available throughout the United States, so those who have MDD are able to access this therapy. Response: We thank commenters for their input, and we are committed to establishing appropriate payment for the services described by CPT codes 0890T, 0891T, and 0892T. After consideration of the public comments we received, we are finalizing our proposal with modification for CY 2025 to assign CPT code 0899T to New Technology APC 1511 (New Technology--Level 11 ($901- $1000)) and SI of ``S'' and to assign CPT codes 0890T, 0891T and 0892T to New Technology APC 1525 (New Technology--Level 25 ($3501-$4000)) and SI of ``S''. The final New Technology APC and status indicator assignments for CPT codes 0889T, 0890T, 0891T, and 0892T for CY 2025 are found in Table 63. The CY 2025 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 meanings for all codes reported under the OPPS. Addendum D1 can also be found via the internet on the CMS website. [[Page 94056]] [GRAPHIC] [TIFF OMITTED] TR27NO24.086

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 2025 OPPS/ASC proposed rule, CY 2023 claims are generally the claims used for ratesetting; and clinical and brachytherapy APCs with fewer than 100 single claims from CY 2023 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 2025 OPPS/ASC proposed rule, we proposed to designate six brachytherapy APCs and five clinical APCs as low volume APCs under the OPPS. The six brachytherapy APCs and five clinical APCs meet our criteria of having fewer than 100 single claims in the claims' year used for ratesetting (CY 2023 for the CY 2025 OPPS/ASC proposed rule). Nine of the 11 APCs were designated as low volume APCs in CY 2024. Based on data for the CY 2025 OPPS/ASC proposed rule, APC 2645 (Brachytx, [[Page 94057]] non-stranded, gold-198) and APC 5881 (Ancillary Outpatient Services When Patient Dies) met our criteria to be designated a Low Volume APCs; and we proposed to designate those APCs as such for CY 2025. We did not receive any public comments on our proposal. Based on CY 2023 claims data available for this final rule with comment period, we are finalizing our proposal to designate six brachytherapy APCs and five clinical APCs as low volume APCs under the OPPS. Table 64 includes the CY 2023 claims available for ratesetting for each of the APCs we are designating as Low Volume APCs for CY 2025. The final cost statistics for our CY 2025 Low Volume APCs, such as the median, arithmetic mean, and geometric mean cost are available for download with this final rule with comment period on the CMS website. We refer readers to our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices; click on the relevant regulation to download the low volume APC cost statistics under the comprehensive (OPPS) ratesetting methodology in the downloads section of the web page. [GRAPHIC] [TIFF OMITTED] TR27NO24.087

1. Cardiac CT Services, CPT Codes 75572, 75573, and 75574 (APC 5572)

For the 2006 coding update, the AMA's CPT Editorial Panel established six Category III CPT codes to describe cardiac computed tomography angiography with contrast materials (cardiac CT services) effective January 1, 2006. The codes were active and separately payable under the OPPS between January 1, 2006, and 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 CT services 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). Like the predecessor codes, CPT codes 75572, 75573, and 75574 have been paid separately under the OPPS since 2010. From CY 2015 through CY 2024, the OPPS payment rate, based on the geometric mean cost for the cardiac CT codes, has ranged between $175 and $265 for these codes, as listed in Table 65 below. [[Page 94058]] [GRAPHIC] [TIFF OMITTED] TR27NO24.088 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). 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, which 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. Because of the annual updates, OPPS payment rates for services may fluctuate from year to year. We note that we generally use the latest claims data available to set the annual payment rates. Payment rates for this CY 2025 OPPS/ASC final rule with comment period are based on claims with dates of service between January 1, 2023, and December 31, 2023, processed through June 30, 2024. Over the years we have received comments noting that the payment for these codes has declined since 2017. Comments on previous OPPS proposed rules have indicated that the payment amount is insufficient to cover the cost of providing the service and have stated that the payment amount does not consider the hospital resources required to perform these services, including the use of the equipment, medication administration, staff time, and scanner time. We have maintained over the years that an analysis of our claims data for these three codes have shown geometric mean costs consistent with the geometric mean cost for APC 5571 (Level 1 Imaging with Contrast), the APC to which the cardiac CT codes have been assigned since 2015. We have also received comments in the past urging CMS to allow hospitals the flexibility to submit charges for cardiac CT services with a revenue code other than CT scan (035X) and Radiology Diagnostic (032X) revenue codes, implying that MACs had applied edits to the cardiac CT codes that prevented hospitals from reporting a cardiology (048X) revenue code when appropriate. It is longstanding CMS policy that hospital outpatient facilities are responsible for reporting the appropriate cost centers and revenue codes on claims. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing Manual, CMS ``does not instruct hospitals on the assignment of HCPCS codes to revenue codes for services provided under OPPS since hospitals' assignments 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.'' We have consistently stated that hospital outpatient facilities must determine the most appropriate cost center and revenue code for the cardiac CT codes (87 FR 71849, 88 FR 81664). After we issued the CY 2024 OPPS/ASC final rule, interested parties notified us of a specific claims edit that may have limited the revenue codes reported with the cardiac CT codes in prior years' claims data. CMS removed the revenue code edit in early December 2023 to allow for the cardiac CT codes to be billed with any appropriate revenue code. We informed the public of our findings and the changes that we made in the January 2024 OPPS Update (Transmittal 12421, Change Request 13488), dated December 21, 2023. We believe the edit may have prevented some providers from reporting the cardiology revenue code (048X), which maps to the cardiology cost center (03140), when billing for cardiac CT services. In the past, commenters have indicated that the cardiology cost center has a higher cost-to-charge ratio (CCR) than the imaging cost centers, and they believe the inability to report the cardiology revenue code has resulted in a lower payment rate for cardiac CT services. Since the OPPS ratesetting process utilizes the applicable cost center's CCR to reduce the charges on the claim to estimated cost, utilizing cost centers with lower CCRs results in a lower OPPS payment compared to utilizing cost centers with higher CCRs. With the edit no longer in place, hospitals may bill for cardiac CT services with whichever revenue code they believe appropriate for CY 2024, including cardiology revenue code 048X, and the CY 2026 OPPS payment rates (which most likely will be based on CY 2024 claims) will reflect those updated revenue code billing patterns. We note that for CY 2025, based on our standard ratesetting methodology using claims submitted during CY 2023, our analysis reveals that the angiocardiography and CT scan revenue codes were reported with CPT codes 75572 through 75574, which were mapped to angiography and CT scan cost centers, as shown in Table 66. [[Page 94059]] [GRAPHIC] [TIFF OMITTED] TR27NO24.089 Because we wanted to determine whether the revenue edit could have affected the geometric mean costs for CPT codes 75572 through 75574, we conducted studies prior to the CY 2025 proposed rule and during the comment period to calculate HCPCS geometric mean costs for these codes based on a simulation that assumed that differing numbers of HOPDs (specifically 25 percent, 50 percent, and 75 percent of the total number of HOPDs billing for these services) would have assigned these services to the cardiology revenue code (048X) and cardiology cost center (03140). Based upon the results of the studies, we found that if 50 percent or more of HOPDs had billed these services with the cardiology revenue code (048X) and cardiology cost center (03140), the geometric mean cost for these codes would have increased and would have resulted in a revised APC assignment from APC 5571 (Level 1 Imaging with Contrast) to APC 5572 (Level 2 Imaging with Contrast). As noted in Table 67, under our standard ratesetting methodology, the geometric mean cost for the cardiac CT codes would be approximately $182, which maps to APC 5571, while an assumption that 50 percent of HOPDs billed with the cardiology revenue code (048X) and cardiology cost center (03140) on CY 2023 claims would result in a geometric mean cost of about $386, which maps to APC 5572. We also reviewed the limited CY 2024 claims data for cardiac CT services available to determine the percentage of HOPDs that are utilizing the cardiology revenue code (048X) and cardiology cost center (03140) with the understanding that many HOPDs may still be updating their current billing practices. We did not find any appreciable change in current billing practices. [GRAPHIC] [TIFF OMITTED] TR27NO24.090 [[Page 94060]] Because the RTP edit associated with the cardiac CT codes may have affected the CY 2023 data we have available to establish the CY 2025 OPPS payment rates for these services, in the CY 2025 OPPS/ASC proposed rule, we requested information on the following topics regarding hospitals' billing practices for cardiac CT services: (1) Where are cardiac CT services performed in a hospital? Are cardiac CT services performed in a dedicated cardiology department, radiology department, or some other hospital outpatient department? (2) What factors determine the revenue code assignment for cardiac CT services (i.e., the department in which the service is performed, the type of service that is performed, or some other factor)? (3) What revenue codes are HOPDs reporting for these services in CY 2024? Are HOPDs using the cardiology revenue code on claims for cardiac CT services now that they are no longer restricted from using this revenue code? We stated in the CY 2025 OPPS/ASC proposed rule that we would use the comments received and the information from the CY 2024 claims data to help us identify whether the current OPPS payment is appropriate for the cardiac CT codes, or whether we should revise the payment methodology for the CY 2025 OPPS. We received a significant number of comments in response to our Request for Information. While a major portion of the comments were part of a large write-in campaign, commenters provided information specific to their experiences in their facilities. We appreciate all the feedback and address the comments below. Comment: We received a significant number of comments in response to our Request for Information about cardiac CT services and the billing practices for these services. Commenters ranged from specialty societies to healthcare providers who practice in a variety of settings of different sizes and in various locations throughout the United States. In terms of where cardiac CT services are performed, commenters shared that cardiac CT services may be performed in a radiology department, an interventional radiology department, a cardiology department, or a clinic setting. Resources to furnish the services, such as staff, are utilized from both the cardiology and radiology departments. Many commenters described the test being performed in radiology departments utilizing cardiology nursing staff to prepare the patient, administer medications (such as IV beta blockers and nitroglycerin), and monitor the patient during and after the procedure. In terms of the factors that determine the revenue code assignment for cardiac CT services, most commenters stated that the resources used for these services are very similar to other cardiac procedures such as cardiac stress tests or even cardiac catheterizations, which are assigned to the cardiology revenue code. Commenters described cardiac CT services as resource intensive, stating that the cross-department coordination between cardiology and radiology, the skill level of staff (technicians, nurses, and physicians), the expense of up-to-date CT equipment, and the amount of testing time involved is comparable to other more expensive and invasive cardiac tests. In response to our request for the revenue codes hospital outpatient departments are reporting with cardiac CT services now that there is not an edit in place prohibiting them from using the cardiology revenue code, commenters stated that they want to use the cardiology revenue code when billing cardiac CT services, but they are unable to due to third-party edits (billing and payer) in place from clearinghouses, billing companies, or billing software companies. Some stated that they have continued to use the radiology revenue codes to prevent receiving claims denials. Another commenter stated their coding staff expressed compliance concerns with assigning cardiac CT services to a cardiology revenue code versus the CT revenue code. Commenters requested that CMS provide education about revenue code use for providers, healthcare facilities, clearinghouses, and health plans and indicated that explicit education would facilitate use of the cardiac revenue code with cardiac CT services. Many commenters shared how many cardiac CT services are completed per year at their facilities. They expressed concern about the declining payment for such a complex, resource-intensive test that is used to accurately diagnose and manage coronary artery disease and the impact that insufficient payment could have on beneficiary access. Commenters noted that cardiac CT has been identified by the American College of Cardiology as a first line approach to manage patients with chest pain and asserted that cardiac CT is more clinically useful than more expensive, invasive tests such as cardiac catheterizations. Response: We thank the commenters for their feedback regarding the clinical value cardiac CT services provide for clinicians diagnosing and managing patients with chest pain and coronary artery disease. We also thank commenters for describing the process of cardiac CT tests and all the resources used in providing those services and sharing information about selection of revenue code assignment when billing for CT services. We acknowledge commenters' concerns that, even with the revenue code edit removed for CY 2024, there are a number of procedural and logistical hurdles to providers billing with the cardiology revenue codes in CY 2024 and that it would not be realistic to expect a majority of providers to be billing with the cardiology revenue codes at this point due to those issues. We acknowledge that process changes often happen slowly and that it may take time for facilities to update their billing practices, even if the majority of providers would prefer to bill these codes with the cardiology revenue code. We appreciate commenters sharing their concerns about third-party edits that are still affecting the billing process and understand their request for additional guidance from CMS. We remind readers that we informed the public of our findings and the changes that we made in the January 2024 OPPS Update (Transmittal 12421, Change Request 13488), dated December 21, 2023. Specifically, we stated the following: ``We recently identified an outdated return-to-provider (RTP) Healthcare Common Procedure Coding System-to-revenue code edit that resulted in certain claims submissions being limited to specific revenue codes for CPT codes 75572, 75573, and 75574. These claims were returned to the providers for resubmission. The outdated edit has been removed; and providers, when appropriate, may begin billing these codes with any appropriate revenue code.'' We have also stated in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing Manual, CMS ``does not instruct hospitals on the assignment of HCPCS codes to revenue codes for services provided under OPPS since hospitals' assignments 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.'' We have consistently stated that hospital outpatient facilities must determine the most appropriate cost center and revenue code for the cardiac CT codes (87 FR 71849, 88 FR 81664). While we believe that this information should suffice for education to third parties who may have edits in place that affect the selection of a cardiology [[Page 94061]] revenue code when billing for cardiac CT services and for other interested parties who have compliance concerns, we will be providing public education and instruction through the CMS Medicare Learning Network (MLN). We are persuaded after a review of the comments submitted that a majority of providers who bill these codes would prefer to bill them with the cardiology revenue code but have not been able to do so due to the prior revenue code edit and remaining procedural hurdles that flow from the prior revenue code edit. As stated above, if there had not been a systems edit in place preventing providers from choosing the cardiology revenue code (048X) and cardiology cost center (03140) and 50 percent or more of HOPDs had billed these services with the cardiology revenue code and cardiology cost center, the geometric mean cost for these codes would have increased and would have resulted in a revised APC assignment from APC 5571 (Level 1 Imaging with Contrast) to APC 5572 (Level 2 Imaging with Contrast). Therefore, for CY 2025, we are using our equitable adjustment authority under section 1833(t)(2)(E) of the Act to utilize an alternative methodology to calculate the payment for the cardiac CT services in CY 2025 and subsequent years. Specifically, we are finalizing a temporary reassignment of the cardiac CT codes (CPT code 75572 through 75574) to APC 5572 (Level 2 Imaging with Contrast). See Table 68 for the CY 2025 Proposed and Final OPPS SI and APC assignments for CPT codes 75572 through 75574. We anticipate that it may take 3 to 4 years to see an impact from changes in billing practices from providers based on the comments we received on the proposed rule. If we do not see a significant change in the geometric mean costs after several years, we would revert payment for these services to the standard OPPS payment methodology and assign the cardiac CT codes to appropriate APCs based on their geometric mean costs. We note that this APC reassignment will not involve reprocessing of claims with dates prior to January 1, 2025. [[Page 94062]] [GRAPHIC] [TIFF OMITTED] TR27NO24.091 The final CY 2025 payment with rates for the cardiac CT CPT 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 definitions for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

2. Neurostimulator and Related Procedures (APCs 5461 Through 5465)

In the CY 2021 OPPS/ASC final rule with comment period, we finalized a five-level APC structure for the Neurostimulator and Related Procedures series (85 FR 85968 through 85970). For a detailed discussion of the history of neurostimulators policy, we refer readers to the CY 2015, CY 2020, CY 2021, CY 2023, and CY 2024 OPPS/ASC final rules with comment period (79 FR 66807 through 66808; 84 FR 61162 through 6116, 85 FR 85968 through 85970; 87 FR 71869; 88 FR 81645 through 81658). In the CY 2024 OPPS/ASC final rule with comment period, we did not make any changes to the 5 level APC structure for the Neurostimulator and Related Procedures series. However, we made temporary changes to services previously assigned to the neurostimulator APCS: reassigning HCPCS 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), with predecessor code 0424T, and 33287 (Removal and replacement of phrenic nerve stimulator, including vessel [[Page 94063]] catheterization, all imaging guidance, and interrogation and programming, when performed; pulse generator), from New Technology APC 1581 to New Technology APC 1580 (88 FR 81645 through 81647) and assigning HCPCS 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)) to New Tech APC 1580 (88 FR 81658). For the CY 2025 OPPS/ASC proposed rule, we proposed to maintain the 5 level APC structure for the Neurostimulator series. We proposed to assign HCPCS codes 0266T and 33276 to the APC 5465 (Level 5 Neurostimulator and Related Procedures), given the cost and coding changes associated with those codes. We noted that while we have claims data available for HCPCS codes in the neurostimulator APC series that are no longer active, there would also be cost and coding changes associated with new CPT codes as their claims data become available. While we continued to believe that a five-level structure for the Neurostimulator and Related Procedures APC series remained appropriate, we also solicited comments from interested parties in CY 2025 OPPS/ASC proposed rule on the need for a Level 6 APC, given the clinical and estimated cost characteristics of the services currently assigned to APC 5465 (Level 5 Neurostimulator and Related Procedures). In summary, for the CY 2025 OPPS, we proposed to maintain the current 5-level structure for the Neurostimulator and Related Procedure APC series, assign HCPCS codes 0266T and 33276 to APC 5465, and solicited comment creating an additional Level 6 Neurostimulator APC. See Table 69 for the services that we proposed to reassign to the Level 5 APC and Table 70 below for the proposed CY 2025 Neurostimulator and Related Procedures APCs. [GRAPHIC] [TIFF OMITTED] TR27NO24.092 [[Page 94064]] [GRAPHIC] [TIFF OMITTED] TR27NO24.093 At the August 26, 2024, HOP Panel Meeting, several presenters provided information to the Panel regarding HCPCS codes 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), 64568 (Open implantation of cranial nerve (e.g., vagus nerve) neurostimulator electrode array and pulse generator), and 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)). The presenters advised the Panel to request that CMS either create a new Level 6 Neurostimulator and Related Procedures APC and consider including the three codes mentioned above in the Level 6 Neurostimulator APC, or alternatively assign the three codes mentioned above to New Technology APC 1580 (New Technology--Level 43 ($40,001- $50,000)). The HOP Panel agreed with the presenter and made that recommendation. Comment: Many commenters requested the creation of a Level 6 Neurostimulator and Related Procedures APC, noting that creating an additional APC would align payment more closely with costs incurred while maintaining access to services assigned to that APC. Many of these commenters requested that if a Level 6 APC could not be created, that HCPCS code 0266T be maintained in New Technology APC 1580 for an additional year. Other commenters asked that CMS reconsider the proposed assignment of HCPCS code 33276 to APC 5465 and place the code in an APC consistent with the resources required for the procedure. One of those commenters specifically requested an APC assignment to New Technology APC 1580 until a more permanent solution to address disparity between payment and resource costs could be determined. Some commenters requested that HCPCS code 64568 be moved from APC 5465 (Level 5 Neurostimulator and Related Procedures) to New Technology APC 1580. Two commenters supported maintaining the current 5 level APC structure for the Neurostimulator series. One of those commenters recommended that HCPCS codes 33276 and 0266T continue to be assigned to New Technology APC 1580 to maintain beneficiary access while additional claims data are collected, while the other recommended more broadly that New Technology APCs be used for similar scenarios where codes had high cost but low volume. One commenter believed that HCPCS code 64568 should remain assigned to APC 5465 (Level 5 Neurostimulator and Related Procedures) since it is a long-established procedure and would not be expected to have changes in cost or volume the way ``new'' technologies would. Response: We appreciate the thoughtful responses commenters have provided with regard to the proposed policy and our requests for comments. While we understand the concerns and issues commenters have raised, we believe that the 5 level APC structure for the series continues to remain appropriate in grouping together procedures with similar cost and clinical characteristics. Therefore, we are finalizing the 5 level APC structure for the Neurostimulator and Related Procedures APCs. However, we also recognize the concerns commenters have raised regarding HCPCS codes 0266T and 33276 and in particular, the request that we return those codes to their current New Technology APC placements should we establish a final policy of not creating an additional APC level. Thus, we are assigning these codes to New Tech APC 1580, the same APC these codes were assigned to in CY 2024, in this CY 2025 OPPS/ASC final rule with comment period. For HCPCS code 64568, we believe its current assignment to the Level 5 APC remains appropriate. The code has been assigned to the Neurostimulator and Related Procedures APC series for many years and the claims volume we have for the procedure allow for an estimate of the associated resource costs. Therefore, we do not believe a New Tech APC assignment is appropriate at this time, as New Technology APC placements are typically used when insufficient cost and claims data are available to make appropriate clinical APC assignments. We will continue to monitor the data as additional claims become available for these codes. After consideration of the public comments we received, we are finalizing our proposal with modification. We are finalizing the [[Page 94065]] proposed 5 level APC structure for the Neurostimulator and Related Procedures APC series. However, we are continuing to assign HCPCS codes 33276 and 0266T to New Technology APC 1580 (New Technology--Level 43 ($40,001-$50,000)) in CY 2025 rather than finalizing our proposal to assign them to APC 5465. See Table 71 for the status indicators and APC assignments for HCPCS codes 0266T and 33276. We note that we have previously discussed the placement of these codes in New Technology APCs until such time that sufficient claims data were available to assign those codes to clinical APCs (87 FR 81769, 88 FR 81645 through 81647, 88 FR 81658). We will continue to monitor the data as more claims for these codes become available. Finally, we are maintaining the APC assignment of HCPCS code 64568 to APC 5465 (Level 5 Neurostimulator and Related Procedures). Please see Table 74 for the final CY 2025 OPPS APC and SI assignments for HCPCS codes 0266T and 33276. [GRAPHIC] [TIFF OMITTED] TR27NO24.094

3. Focal Laser Ablation, CPT Code 0655T (APC 5375)

Focal laser ablation is an MRI directed and image guided, minimally invasive procedure that targets prostate cancer tissue. The focal laser ablation procedure, represented by CPT code 0655T (Transperineal focal laser ablation of malignant prostate tissue, including transrectal imaging guidance, with mr-fused images or other enhanced ultrasound imaging), became effective July 1, 2021, and describes the destruction of localized prostate cancer tissue with the high energy source of focal laser radiation. The procedure utilizes real-time intraoperative prostate ultrasound fused with MRI guidance to allow the surgeon to plan the ablation and guide the laser targeting as well as providing real-time feedback to minimize changes to the tissues outside of the targeted ablation zone. This procedure offers another therapy option for select patients with localized intermediate risk prostate cancer. For the CY 2025 OPPS/ASC proposed rule, we reviewed the CY 2023 claims submitted between January 1, 2023, through December 31, 2023, that were processed on or before December 31, 2023, for CPT code 0655T and found seven single frequency claims available for ratesetting, with a resulting geometric mean cost of $12,777. Additionally, for the CY 2025 OPPS/ASC proposed rule, we examined the procedures assigned to the Urology Procedures APCs. Based on our examination of the procedures assigned to Urology and Related Procedures APCs and the available CY 2023 claims data, we stated that we believe it is appropriate to move CPT code 0655T to APC 5375 (Level 5 Urology and Related Services) from APC 5374 (Level 4 Urology and Related Services) because 0655T shares more resource cost and clinical homogeneity with procedures in APC 5375. Specifically, we explained that we believe CPT code 0655T shares resources and is clinical homogeneous with CPT code 0714T (Transperineal laser ablation of benign prostatic hyperplasia, including imaging guidance), and CPT code 52648 (Laser vaporization of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed)). We noted that the seven available CY 2023 single frequency claims for CPT code 0655T would not significantly impact the geometric mean cost calculations for APC 5374 and APC 5375. Therefore, for CY 2025, we proposed to reassign CPT code 0655T from APC 5374 (Level 4 Urology and Related Services) to APC 5375 (Level 5 Urology and Related Services). Comment: One commenter supported our proposal to reassign CPT code 0655T from APC 5374 (Level 4 Urology and Related Services) to APC 5375 (Level 5 Urology and Related Services), citing the clinical and resource homogeneity with CPT codes 52648 and 0714T. Furthermore, the commenter suggested we monitor the impact of the [[Page 94066]] reassignment on the geometric mean cost for APCs 5374 and 5375 to ensure payment stability. Response: We thank the commenter for the support. Based on evaluation of their clinical and resource similarities, and taking into account updated claims data for this final rule with comment period, we continue to believe it is appropriate to reassign CPT code 0655T to APC 5375. After consideration of the public comment we received, we are finalizing our policy without modification for CPT code 0655T. Please refer to Table 72 below for the final OPPS APC and status indicator assignments for HCPCS code 0655T for CY 2025. The final CY 2025 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] TR27NO24.095

4. Bone Mass Measurement: Biomechanical Computed Tomography (BCT)

Analysis With and Without Vertebral Fracture Assessment, CPT Codes 0554T-0558T, 0743T (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 biomechanical computed tomography (BCT) analysis with concurrent vertebral fracture assessment (VFA). 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 the BCT codes (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). The complete long descriptors for the codes can be found 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 2024 OPPS/ASC proposed rule, we proposed to continue to assign the codes to status indicator ``E1'' to indicate non-coverage and non-payment for the services. (See Addendum B for CY 2024/ASC proposed rule via the internet on the CMS website.) However, as discussed in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81660 through 81661), based on comments received and further review of the issue, we did not finalize our proposal. We instead assigned CPT code 0555T to APC 5731 (Level 1 Minor Procedures) and SI of ``S,'' (Procedure or Service, Not Discounted When Multiple; Paid under OPPS; separate APC payment), CPT code 0556T to APC 5523 (Level 3 Imaging without Contrast) and SI of ``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 assigned CPT codes 0554T, 0557T, and 0743T to SI of ``M'' (Items and Services Not Billable to the MAC. Not paid under OPPS) to indicate that these codes are not payable under the OPPS because they describe physician-only services. The final payment rates for these codes were listed in the OPPS Addendum B that was released with the CY 2024 OPPS/ASC final rule via the internet on the CMS website. For the CY 2025 OPPS/ASC proposed rule, we proposed to assign CPT codes 0554T and 0557T to status indicator of ``M'' as the codes include or describe a professional component of the service [[Page 94067]] that is provided by a physician as evidenced by ``interpretation and report'' in the descriptor. It is important to note that CPT code 0554T is a comprehensive code (or ``parent code'') that includes both technical and professional components. Because there are additional CPT codes (``child codes'') that facilities can use to describe the technical components of BCT analysis, we explained that we believed it was appropriate for the comprehensive code that includes the professional component to be assigned a SI of ``M''. In addition, we proposed to assign CPT code 0555T to APC 5731 (Level 1 Minor Procedures) and a SI of ``S,'' CPT code 0556T to APC 5523 (Level 3 Imaging without Contrast) and a SI of ``S,'' and CPT code 0558T to APC 5521 (Level 1 Imaging without Contrast) with a SI of ``S.'' For the CY 2025 OPPS/ASC proposed rule, we explained that we believe the service described by CPT code 0743T is a comprehensive code and involves both a technical component and a professional component that are performed by hospital outpatient facilities. Unlike CPT 0554T, there are no additional codes to describe the technical component(s) of this service (BCT analysis and VFA) and there is a parenthetical note instructing facilities to not report the BCT analysis codes (0554T- 0557T) with CPT code 0743T. Consequently, we proposed to assign CPT code 0743T to APC 5523 (Level 3 Imaging without Contrast) and we proposed to change the status indicator for 0743T from ``M'' to ``S'' (Procedure or Service, Not Discounted When Multiple; Paid under OPPS; separate APC payment) for CY 2025. See Table 73 below. Comment: We received several comments describing support for the use of BCT services to assess bone strength, bone mineral density, and fracture risk indicating that these services were cost-effective and provided valuable clinical information. Commenters noted the significant impact that osteoporosis has on Medicare beneficiaries, especially women. They shared that BCT is effective in clinical practice when determining use and approval of anti-osteoporotic medications that are dependent on bone density assessments. They also noted that DXA (dual-energy X-ray absorptiometry) scans (most common test used to measure bone mineral density) may be difficult to do when patients have scoliosis or extensive degenerative diseases and thus prefer to use BCT. Response: We appreciate the feedback supporting BCT services. Comment: We received one comment requesting that we assign payable status indicators for CPT codes 0554T and 0557T. Response: We thank the commenter for their request. As stated above, we proposed to continue to assign CPT codes 0554T and 0557T a status indicator of ``M'' as the codes include or describe a professional component of the service that is provided by a physician as evidenced by ``interpretation and report'' in the descriptor. CPT code 0554T is a comprehensive code (or ``parent code'') that includes both technical and professional components. Because there are additional CPT codes (``child codes'') that facilities can use to describe the technical components of BCT analysis, it is appropriate for the comprehensive code that includes the professional component to be assigned a SI of ``M''. CPT code 0557T describes only the professional component of the BCT analysis code and therefore, is appropriately assigned a SI of ``M''. Comment: We received several comments expressing support for the proposed APC and status indicator assignments. Response: We thank the commenters for their support. Comment: Several commenters believe that Medicare has limited access to some BCT services in the hospital outpatient setting by assigning non-payable status indicators. Consequently, they are requesting that the pertinent codes be allowed through national coverage. Response: We appreciate these comments. In Transmittal 2362 dated September 19, 2019, we note the BCT codes, specifically CPT codes 0554T, 0555T, 0556T, 0557T, and 0558T were listed as covered effective July 1, 2019 under NCD 150.3 Bone Mineral Density Studies. These services were added in error and were retracted due to ``added in error'' in Transmittal 11952 dated April 12, 2023. We apologize for the confusion this has caused and the mistaken belief that ``coverage was revoked'' when in fact these services had not been approved for national coverage. While CMS further considers the issue of national coverage, we will finalize our proposed status indicator and (if applicable) APC assignments for CPT codes 0554T-0558T and CPT code 0743T as listed in Table G42 below. The regulation at 42 CFR 410.31(f) (Bone mass measurement: Conditions for coverage and frequency standards) recognizes that CMS may use the Medicare National Coverage Determination (NCD) process to examine additional BMM systems for coverage. The public may request an NCD for a particular item or service by following the procedures established at 78 FR 48164 (August7, 2013). The commenter may request a new NCD (or seek reconsideration of an existing NCD). As a reminder to our readers, National Coverage Determinations do not include coding and payment decisions. In summary, after consideration of the public comments, we are finalizing our proposed status indicator and (if applicable) APC assignments for CPT codes 0554T-0558T and CPT code 0743T without modification. 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. [[Page 94068]] [GRAPHIC] [TIFF OMITTED] TR27NO24.096 [[Page 94069]] [GRAPHIC] [TIFF OMITTED] TR27NO24.097

5. 3D Contour Simulation, CPT Code 0944T (APC 5523)

CAS-One[supreg] IR is Software as a Service (SaaS) that assists a physician or other qualified health care professional during percutaneous liver ablation treatments by providing 3D images that allow the physician to visualize the liver lesions, as well as define suitable margins and pathways to perform the ablation procedure. The AMA CPT Editorial Panel established CPT code 0944T effective January 1, 2025: The long descriptor for CPT code 0944T is as follows: 3D contour simulation of target liver lesion(s) and margin(s) for image-guided percutaneous microwave ablation. In the CY 2025 OPPS/ASC proposed rule with comment period, we proposed to assign 0944T to status indicator ``E1'' to indicate that the code is not payable by Medicare when submitted on outpatient claims because the service had not received FDA clearance at the time of the assignment. Comment: We received one comment from the manufacturer. The commenter states that the 3D simulation is always performed with CPT code 47382 (Ablation, 1 or more liver tumor(s), percutaneous, radiofrequency) which is assigned to APC 5361 (Level 1 Laparoscopy and Related Services) and has a payment rate of approximately $5,800. The manufacturer asserts the costs for the 3D simulation service are approximately $3,000 which include a CT of the abdomen with contrast, utilization of the CAS-One[supreg] system, sterile accessories (patient markers, instrument markers, drapes, and marker templates), and annual services for the system (including maintenance, warranty, software subscription, and clinical support). They have requested that we reassign CPT code 0944T to APC 5362 (Level 2 Laparoscopy and Related Service) with a payment rate of approximately $10,400 and a status indicator of J1, representing a comprehensive service that includes both the ablation procedure (CPT code 47382) and the 3D simulation service (CPT code 0944T). Response: We thank the commenter for their input. We disagree that we should consider adding the costs of both the ablation procedure (CPT code 47382) and the 3D simulation service (CPT code 0944T) to determine the appropriate payment for the 3D simulation service. The ablation procedure (CPT code 47382) is a primary service as identified by the OPPS status indicator ``J1'' (Hospital Part B Services Paid Through a Comprehensive APC; Paid under OPPS). The ablation procedure can be done with or without 3D simulation services, but 3D simulation services are never provided without the primary ablation services. 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''. Because the 3D simulation service is always performed with the ablation service, we believe the 3D simulation could be considered an adjunctive service. (See 78 FR 74865 and 79 FR 66799.) Payments for adjunctive services are generally packaged into the payments for the primary services. After review of the procedure description for 3D simulation and input from our CMS medical officers, we do not believe it would be appropriate to always package the costs of the 3D simulation procedure into the ablation procedure. Based on the technology and its potential use in the HOPD setting, we used CPT code 75557 (Cardiac magnetic resonance imaging for morphology and function without contrast material) as a comparator code to determine an APC and status indicator assignment for CPT 0944T. While we realize that there are significant differences between these two codes, we believe that both codes use a type of imaging service to provide valuable information for the clinician to assist in further diagnosing and treating patients. CPT code 75557 is assigned to APC 5523 (Level 3 Imaging without Contrast) and a status indicator of ``Q1'' (STV-Packaged Codes; Paid under OPPS). We also note that the CAS-One[supreg] IR has received 510(k) Premarket Notification from the FDA and should no longer be assigned status indicator ``E1''. In summary, we are revising the status indicator for CPT code 0944T from status indicator ``E1'' to status indicator ``Q1'' (STV-Packaged Codes; Paid under OPPS), indicating a conditionally packaged procedure. CPT code 0944T will be packaged when it is provided with a significant procedure but will be separately paid when the service appears on the claim without a significant procedure (see Table 74). We are assigning CPT code 0944T to APC 5523 (Level 3 Imaging without Contrast) with a final payment rate of around $240.00. Please refer to Table G43 for the code descriptor, APC assignment, and status indicator assignment for CPT code 0944T for CY 2025. The final payment rate for 0944T 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 94070]] [GRAPHIC] [TIFF OMITTED] TR27NO24.098

6. Administration of Lacrimal Ophthalmic Insert Into Lacrimal

Canaliculus, CPT Code 68841(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.'' \24\ The drug manufacturer 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 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. --------------------------------------------------------------------------- \24\ FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf. --------------------------------------------------------------------------- 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 of CMS payment assignments for CPT code 0356T and CPT code 68841 (87 FR 71840). See section XIII.F. of this final rule with comment period for the CY 2025 payment status of the drug, Dextenza, which may be described by HCPCS code J1096. In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81651 through 81653), we stated that based on the claims data available at the time, we continued to believe that the assignment of CPT code 68841 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures) was appropriate based on the geometric mean costs. We also reiterated our reasoning that CPT code 68841 was appropriately assigned to an OPPS status indicator of ``Q1'' and ASC payment indicator of ``N1.'' We continued 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 stated 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, we did not agree based on observed clinical patterns of how the drug is used. Based on CY 2024 claims data, out of over 7,000 total frequency claims, CPT code 68841 was used independently only about 2 percent of the time, meaning that the other 98 percent of the time CPT code 68841 had its payment packaged into the primary procedure with which it is associated. These data reinforced our belief that Dextenza and CPT code 68841 are not furnished independently of a surgical procedure and should be packaged into the primary ophthalmic procedure with which the drug and drug administration are associated. While we recognized that there are some claims that may only include CPT code 68841 without a primary ophthalmic surgery on the claim, we did not believe that this is a frequent occurrence based on our claims data and clinical use patterns; as previously mentioned, our claims data showed that only 2 percent of claims are performed independently of another primary procedure. For CY 2025, we proposed to continue to assign CPT code 68841 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures). We also proposed to continue to assign CPT code 68841 to 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 2024 for CY 2025 rulemaking. At the August 2024 meeting, based on the information presented, the Panel made no recommendation to CMS regarding changing the proposed status indicator assignment, Q1, for HCPCS code 68841 for CY 2025. Comment: We received input from several interested parties contending that increased and separate payment for CPT code 68841, the code that can be used to describe the administration of the drug Dextenza, is required to ensure continued beneficiary access to Dextenza (HCPCS code J1096) in both the HOPD and ASC settings. Commenters emphasized that the lack of payment disproportionately and negatively affects the ASC setting. 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 generally did not disagree with the proposed APC assignment, but rather recommended CMS pay separately for the procedure. [[Page 94071]] Many of these commenters recommended CMS assign CPT code 68841 to a status indicator of ``J1,'' indicating a comprehensive APC procedure. Commenters believed that ``J1'' would be the most accurate status indicator assignment and would generate consistency within APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures), as all other codes in APC 5503 are assigned to status indicator ``J1.'' Commenters stated that CPT code 68841 required an additional 5 minutes of operating time and the assistance of an ophthalmic technician, and without payment for those costs, it was difficult to provide the drug to Medicare beneficiaries. Commenters did not agree with CMS that the fact that CPT code 68841 was performed as a standalone procedure only two percent of the time was an adequate justification for assigning a ``Q1'' status indicator. They believed, and provided examples, that there are many other procedures that are performed independently at that frequency or a lower percentage of the time, that are assigned to a payable status indicator for hospital outpatient purposes and thus also are paid separately in the ASC setting. For example, commenters mentioned CPT code 64415 (Injection(s), anesthetic agent(s) and/or steroid; brachial plexus, including imaging guidance when performed) as an example of a procedure with a lower percentage of single frequency claims and that is assigned to a payable status indicator; a status indicator of ``T'' in this example. Commenters also believed that CPT code 68841 was similar to other procedures for introducing a product to the eye, such as CPT code 66020 (Injection, anterior chamber of eye (separate procedure); air or liquid) and should be paid in a similar manner. Commenters believed the procedure described by CPT code 68841 is a distinct surgical procedure that requires additional operating room time and resources. These commenters believed that the cataract surgery is conducted and concluded, and then the procedure described by CPT code 68841 begins. Response: We thank commenters for their feedback. We have long maintained that Dextenza is a drug that functions as a surgical supply and should be packaged under our packaging policy 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). As such, the drug administration procedure, CPT code 68841, is also supporting the main ocular procedure being performed. CPT code 68841 should, therefore, be packaged as an intraoperative service under Sec. 419.2(b)(14). Based on the rationale provided in the CY 2024 OPPS/ASC final rule with comment period, (88 FR 81651 through 81653), the procedure described by CPT code 68841 had its payment packaged into another procedure 98 percent of the time, meaning that it is not an independent surgical procedure as commenters assert. Rather, CPT code 68841 is used to support the primary procedure being performed and is a supportive intraoperative service that is a part of that primary procedure. We reiterate that both Dextenza and its administration impact the surgical outcome of the primary procedure and are provided during the hospital stay in which the surgery is performed, which we consider to be part of the surgery for purposes of our drug and biological surgical supply packaging policy. Although interested parties 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 expected and observed clinical patterns as to how the drug is used, we do not agree. When revaluating the claims data available for CY 2025, CPT code 68841 has 94 single frequency claims in the OPPS out of over 4200 total frequency claims, meaning that 98 percent of the time CPT code 68841 was furnished with another primary procedure into which CPT code 68841's payment was packaged. This confirms our belief that CPT code 68841 is a component of another primary procedure, supportive of that procedure, and should have its payment packaged into that procedure. Additionally, as commenters were most concerned about a financial disincentive, we note that utilization has been increasing year over year based on utilization patterns of Dextenza in the ASC setting. For example, from claims year CY 2022 to claims year CY 2023, the number of units of Dextenza billed increased from approximately 260,000 to approximately 320,000 units, which reflects a nearly 20 percent year over year increase in utilization. Therefore, we do not believe that our packaging policies are hindering appropriate utilization as suggested by commenters. We note that HCPCS code J1096, which may be used to describe the drug, Dextenza, is a qualifying product for separate payment in both the OPPS and ASC under our policy to implement section 4135 of the CAA, 2023. Please see section XIII.F. of this final rule with comment period, for additional information. For the reasons discussed, we continue to believe that it is appropriate to assign CPT code 68841 to a status indicator ``Q1,'' indicating a conditionally packaged procedure, which 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. We do not believe the HCPCS codes suggested by commenters that are not conditionally packaged are analogous to CPT code 68841. Therefore, our analysis was based on claims data specific to CPT code 68841 in order to confirm the appropriateness of the assignment to an OPP SI = ``Q1'' and ASC PI = ``N1.'' 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'' (STV Packaged Codes) for CY 2025, 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 2025. For the final CY 2025 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 2025 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 [[Page 94072]] DD1 are available via the internet on the CMS website. Please refer to Table 75 for the code descriptor, APC assignment, status indicator assignment, and payment indicator assignment for CPT code 68841 for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.099

7. Application of Rigid Total Contact Leg Cast, CPT Code 29445 (APC

5102) CPT code 29445 describes the procedure of applying a rigid leg cast. This code specifically refers to the process of immobilizing a leg fracture or injury by encasing the affected area in a hard cast, which helps to stabilize the bone and promote healing. In the CY 2025 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 29445 to APC 5102 (Level 2 Strapping and Cast Application) with status indicator ``T'' (Procedure or service, multiple procedure reduction applies; with a separate APC payment under OPPS) and proposed payment rate of $266.86. Payment for CPT code 29445 was brought to the Advisory Panel on Hospital Outpatient Payment (also known as HOP Panel) at the August 2024 meeting. Based on the information presented, the HOP Panel recommended that ``CMS consider HCPCS code 29445, (Application of rigid total contact leg cast), a separately payable code when performed concurrently on the same date of service as any of the following: HCPCS codes 11402, 11403,11404, 11405, 11406, 11407, 97597, 97598, 15271, 15272, 15273, 15274, 15275, 15276, 15277, 15278.'' We received two public comments endorsing the recommendation of the HOP Panel. Comment: One commenter requested that CMS ensure that hospital outpatient departments are able to receive separate payment for the CPT code 29445 when a debridement or graft is performed on the same date of service, which they are currently are unable to do because of a National Correct Coding Initiative (NCCI) edit that has been put in place. Another commenter stated that if a wound debridement is performed (codes 11042-11047, 97597-97598), any primary or secondary dressing materials used to cover the wound would be included in the debridement and would not be separately reported. However, a TCC is not considered a wound dressing and is not included in the debridement procedure. Therefore, the commenter believed the cast application should be reported in addition to the code for the appropriate level of debridement, if performed, and should be mapped to APC 5102. Response: We thank the commenters for providing this information related to CPT code 29445. We will take commenters' suggestions into consideration for the future rulemaking.

8. Aquabeam Waterjet Ablation Procedure, 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 procedure. 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 CY 2025 proposed rule, we estimated the geometric mean cost for CPT code 0421T to be $10,438 based on 4,743 single claims and proposed to assign the service to APC 5376 (Level 6 Urology and Related Services), which has a geometric mean cost of $9,356. Comment: One commenter supported our proposal to assign CPT code 0421T to APC 5376 due to the clinical and resource similarities to other procedures assigned to APC 5376. Response: We appreciate the commenter's feedback on CPT code 0421T and we agree with the commenter's recommendation to finalize the APC assignment. After consideration of the public comment we received, we are finalizing our proposal without modification to assign CPT code 0421T to APC 5376. Please refer to Table 76 below for the final OPPS APC and status indicator assignment for HCPCS code 0421T for CY 2025. 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 94073]] [GRAPHIC] [TIFF OMITTED] TR27NO24.100

9. Aqueous Shunt to Extraocular Plate Reservoir Procedure, CPT Code

66180 (APC 5493) For CY 2024, we assigned CPT code 66180 (Aqueous shunt to extraocular equatorial plate reservoir, external approach; with graft) to APC 5492 (Level 2 Intraocular Procedures). For CY 2025, as shown in OPPS Addendum B that was released with the CY 2025 OPPS/ASC proposed rule with comment period, we proposed to maintain the APC assignment to APC 5492 with a payment rate of $3,873.90 for CPT code 66180. Comment: We received two comments requesting that we reassign CPT code 66180 to APC 5493 (Level 3 Intraocular Procedures) due to the code's similarity to CPT code 66179 (Aqueous shunt to extraocular equatorial plate reservoir, external approach; without graft), which we proposed to assign to APC 5493 for CY 2025. The commenters explained that the procedures are the same except that CPT code 66180 requires additional clinical work, time, and resources, associated with suturing a patch graft to the eye. The commenters also explained that the available claims data from the CY 2025 OPPS/ASC proposed rule support assigning CPT code 66180 to APC 5493. For example, per the commenters, the geometric mean cost for CPT code 66180 ($5,026.75) is closer to the geometric mean cost of APC 5493 ($5,298.63) than the geometric mean cost of APC 5492 ($4,159.32). Response: We agree with the commenters that APC 5493 is a more appropriate placement for CPT code 66180 due to the additional clinical work and resources utilized to furnish the service due to its similarity to CPT code 66179. We also agree with the commenters that the geometric mean cost of CPT code 66180 confirms that the resources necessary to furnish the service more closely match the geometric mean cost of APC 5493 than APC 5492. After consideration of the public comments received, we are finalizing an APC assignment for CPT code 66180 to APC 5493 for CY 2025. 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.

10. Arteriovenous Fistula (AVF) Creation Procedures, CPT Codes 36836

and 36837 (APC 5194) CPT codes 36836 (Percutaneous arteriovenous fistula creation, upper extremity, single access of both the peripheral artery and peripheral vein, including fistula maturation procedures (e.g., transluminal balloon angioplasty, coil embolization) when performed, including all vascular access, imaging guidance and radiologic supervision and interpretation) and 36837 (Percutaneous arteriovenous fistula creation, upper extremity, separate access sites of the peripheral artery and peripheral vein, including fistula maturation procedures (e.g., transluminal balloon angioplasty, coil embolization) when performed, including all vascular access, imaging guidance and radiologic supervision and interpretation) describe a percutaneous arteriovenous fistula creation of an upper extremity. CPT code 36836 replaced HCPCS codes C9754 and G2170, while CPT code 36837 replaced HCPCS codes C9755 and G2171. In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61246 through 61247), in response to public comment, input from our medical advisors, and the available claims data, we reassigned C9754 and C9755 from APC 5193 to APC 5194. In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85954 through 95955), we used our equitable adjustment authority to maintain the assignment of HCPCS codes G2170 and G2171 to APC 5194 (Level 4 Endovascular Procedures), given that both procedures are for ESRD patients that need dialysis, the predecessor codes had very similar median costs, and there were low claims data available. We continued the assignment of CPT codes 36836 and 36837 to APC 5194, with commenter support, for CY 2022. In the CY 2023 OPPS/ASC final rule with comment period (87 FR 71863 through 71864), we assigned the newly established \25\ CPT codes 36836 and 36837 to APC 5194 based on our assessment of the CY 2023 geometric mean cost of predecessor codes HCPCS codes G2170 ($12,055.90) and G2171 ($13,486.08) and their APC assignment. For CY 2024, we continued assignment to APC 5194 for HCPCS codes G2170 and G2171, with commenter support. --------------------------------------------------------------------------- \25\ The AMA's CPT Editorial Panel established CPT codes 36836 and 36837 during the January 2023 update and CMS deleted HCPCS codes G2170 and G2171, effective January 1, 2023. --------------------------------------------------------------------------- For CY 2025, we proposed to continue assignment of both CPT codes 36836 and 36837 to APC 5194 (Level 4 Endovascular) with a proposed payment rate of around $17,956. For the CY 2025 proposed rule, CPT code 36836 had227 single claims for ratesetting, a geometric mean cost (GMC) of around $11,234, and CPT code 36837 had 121 single claims for ratesetting and a GMC of around $16,770. Comment: A few commenters supported our assignment of CPT code 36837 to APC 5194. Response: We thank the commenters for their support. Comment: Several commenters requested that we avoid a proposed payment reduction for CPT code 36837 by maintaining its CY 2024 APC assignment. Response: We note that for CY 2025 we proposed to maintain the assignment [[Page 94074]] of CPT code 36837 to APC 5194 and did not propose to reassign CPT code 36837 to a lower-paying APC. Comment: Several commenters indicated that CPT codes 36836 and 36837 do not have similar resource costs and that CPT code 36836 would be more appropriately assigned to APC 5193, which had a proposed payment rate of $11,478.26, as opposed to continuing to assign the code to APC 5194, which had a proposed payment rate of $18,167.36. A commenter further suggested that the volume of current claims data is sufficient to support reassigning CPT code 36836 to APC 5193. The commenter believed that the proposed rule geometric mean cost data illustrated distinct differences in required resources to perform the procedures described CPT code 36836 (GMC: $10,123.79) and CPT code 36837 (GMC: $16,849.60) and that CPT code 36836 is significantly overpaid in APC 5194 and would be overpaid in APC 5193, but to a lesser degree. Response: We thank the commenters for their comments. We reiterate 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 and review of the clinical characteristics of the procedure. After further clinical review, we continue to believe that CPT code 36836 is more similar clinically to services in APC 5194, which includes more complex endovascular procedures, than those in APC 5193, which primarily contains less complex revascularization and embolization procedures. Further, while CPT code 36836 does have more available claims than what was available for the initial assignment of CPT code 36836 to APC 5194, we believe additional claims and clinical data would be useful before proposing to move this code to a different APC. However, we note that we review the APC assignments for all items and services paid under the OPPS on an annual basis. We will reevaluate the APC assignment for CPT code 36836 in the next rulemaking cycle. In summary, after consideration of the public comments we received, we are finalizing our proposal, without modification, to continue to assign CPT code 36836 and CPT code 36837 to APC 5194 for CY 2025. We refer readers to Addendum B of this final rule with comment period for the payment rate for all codes paid under the OPPS.

11. Arthroscopic Subacromial Balloon Implant, HCPCS Code C9781 (APC

5115) HCPCS code C9781 describes the implantation of a subacromial spacer, such as a balloon, in the shoulder to treat a torn rotator cuff. The procedure may also include debridement, acromioplasty, subacromial decompression, and biceps tenodesis. In the CY 2025 OPPS/ASC proposed rule, 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 $12,755.58. We received two comments in support of our proposal. Comment: Both commenters endorsed our proposal to assign HCPCS code C9781, which describes InSpaceTM Subacromial Tissue Spacer System, to APC 5115 for CY 2025. They encouraged CMS to maintain this assignment in the final rule. Response: Based on our analysis of the latest CY 2023 claims data available for CY 2025 OPPS ratesetting, the geometric mean cost associated with HCPCS code C9781 is $12,757.71based on 493 single claims, which is consistent with the geometric mean cost of $13,022.88for APC 5115. In summary, after consideration of the public comments we received, we are finalizing our proposal to assign HCPCS code C9781 to APC 5115 without modification. The final CY 2025 OPPS payment rate for this code can be found in Addendum B to this final rule with comment period.

12. Artificial Iris Insertion Procedures, CPT Code 66683 (APC 5496)

For the CY 2025 OPPS proposed rule, we proposed to assign placeholder CPT code 6X004 (Implantation of iris prosthesis, including suture fixation and repair or removal of iris, when performed) to APC 5496 (Level 6 Intraocular Procedures) with a payment rate of around $16,416. CPT code 66683 is the final code for 6X004 and will replace 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); 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); and 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). Comment: One commenter supported our proposal to assign placeholder CPT code 6X004 (CPT code 66683) to APC 5496. Response: We appreciate the support of the commenter for our proposal. After consideration of the public comments we received, we are implementing our proposal without modification to assign CPT code 66683 to APC 5496 (Level 6 Intraocular Procedures). Table 77 shows the finalized status indicator and APC assignment for CPT code 66683. We refer readers to Addendum B of this final rule for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 94075]] [GRAPHIC] [TIFF OMITTED] TR27NO24.101

13. Bronchoscopy With Needle Biopsy, CPT Code 31629 (APC 5154)

CPT code 31629 describes the use of diagnostic rigid or flexible bronchoscope to obtain one or more biopsies from the trachea, main stem, and/or lobar bronchus using a transbronchial needle aspiration technique. In the CY 2025 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 31629 to APC 5154 (Level 4 Airway Endoscopy) with a proposed payment rate of $3,681.38. Comment: We received one public comment that requested CMS reassign CPT code 31629 from APC 5154 (Level 4 Airway Endoscopy) to APC 5155 (Level 5 Airway Endoscopy) in the CY 2025 ASC/OPPS final rule. The commenter stated that CPT code 31629 is the highest cost significant procedure in APC 5154 with a geometric mean cost of $5,123.33. The geometric mean cost of CPT code 31629 exceeds the geometric mean cost of the lowest cost significant procedure in APC 5155, CPT code 31267 with a geometric mean cost of $5,031.74. According to the commenter, given the intraoperative service time and physician skill level required for the procedure, this procedure is aligned with procedures already assigned to APC 5155 including balloon dilation and stenting procedures. The commenter stated that the reassignment of CPT code 31629 from APC 5154 to APC 5155 would better support resource homogeneity within the Airway Endoscopy Procedures APC series. Response: Although the geometric mean cost of the CPT code 31629 is $1,300 higher than the geometric mean cost of APC 5154, it is $1,974 lower than the geometric mean cost of APC 5155. CPT code 31629 also does not violate the 2 times rule in its current assignment in APC 5154. In addition, we believe that CPT code 31629 fits appropriately in APC 5154 based on clinical similarity and resource homogeneity with the procedures in that APC. Therefore, after consideration of the public comment we received, we are finalizing our proposal without modification, to assign CPT code 31629 to APC 5154 for CY 2025. We refer readers to Addendum B of this final rule with comment period for the CY 2025 final payment rate for this code. Addendum B is available via the internet on the CMS website.

14. CADScor System, CPT Code 0716T (APC 5733)

The CADScor System is intended as a diagnostic aid in symptomatic patients suspected of stable coronary artery disease (CAD) and is designed to help reduce invasive and costly diagnostic procedures. The CADScor System is a diagnostic aid that uses sensitive acoustics and advanced computational processing to analyze coronary blood flow to rule out obstructive CAD. CPT code 0716T describes the service that utilizes the CADScor System: Cardiac acoustic waveform recording with automated analysis and generation of coronary artery disease risk score. For CY 2025, we proposed to assign CPT 0716T to APC 5733--Level 3 Minor Procedures, with a payment rate of $59.07 and a status indicator of ``Q1'' (conditionally packaged). Comment: Commenters disagreed with our proposal to assign CPT code 0716T to APC 5733 with a status indicator of ``Q1.'' Commenters suggested that CPT code 0716T should be assigned to APC 5722 based on clinical and resource homogeneity with other services assigned to APC 5722. Commenters also expressed that status indicator ``S'' (separately payable) would be most appropriate for CPT code 0716T. They contended that status indicator ``Q1'' essentially unconditionally packages the code because CPT code 0716T is never furnished without an emergency department visit. Response: Although CPT code 0716T was effective July 1, 2022, we have no claims data for the code. The OPPS payment rates are proposed based on available CY 2023 claims data. Because we have no claims data, we believe that we should continue to assign CPT code 0716T to APC 5733 for CY 2024. We review, on an annual basis, the APC assignments for all services and items paid under the OPPS. As a result, we will reevaluate the APC assignment for CPT code 0716T for the next rulemaking cycle. In addition, as listed in OPPS Addendum D1 of the CY 2025 OPPS/ASC proposed rule, codes assigned to status indicator ``Q1'' may be packaged, assigned to a composite APC, or paid separately under the OPPS. Specifically, a ``Q1'' status indicator may indicate a: Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator ``S'', ``T'', or ``V''; or Composite APC payment if billed with specific combinations of services based on OPPS composite-specific payment criteria. Payment is packaged into a single payment for specific combinations of services; or In other circumstances, payment is made through a separate APC payment After reviewing the public comments, we believe that it is appropriate for the procedure described by CPT code 0716T to be paid separately. We agree with commenters that it is unlikely that CPT code 0716T would be furnished without an emergency department (ED) visit and should not be always be packaged with an ED visit. Therefore, we are revising the status indicator for the code from ``Q1'' (conditionally packaged) to ``S'' (Procedure or Service, Not Discounted When Multiple) to indicate that the service is paid separately. In summary, after consideration of the public comments, we are finalizing the APC and status indicator assignment for [[Page 94076]] CPT code 0716T with modification. Specifically, we are finalizing the assignment of CPT code 0716T to APC 5733 and we are revising the status indicator assignment for CPT code 0716T to ``S'' (separately payable). Please refer to Table 78 for the code descriptor, APC assignment, status indicator assignment, and payment indicator assignment for CPT code 0716T for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.102

15. Cardiac Magnetic Resonance Imaging Procedures, CPT Codes 75561 and

75563 (APCs 5572 and 5573) CPT code 75561 (Cardiac magnetic resonance imaging for morphology and function without contrast material(s), followed by contrast material(s) and further sequences) and CPT code 75563 (Cardiac magnetic resonance imaging for morphology and function without contrast material(s), followed by contrast material(s) and further sequences; with stress imaging) both describe cardiac MRI procedures. For CY 2024, we assigned CPT code 75561 to APC 5572 (Level 2 Imaging with Contrast), and CPT code 75563 to APC 5573 (Level 3 Imaging with Contrast). For the CY 2025 OPPS/ASC proposed rule, we proposed to maintain the current APC assignments for both cardiac MRI codes. Comment: We received one comment requesting that we reassign CPT code 75561 to APC 5573 (Level 3 Imaging with Contrast). The commenter indicated that the other services in APC 5572 (Level 2 Imaging with Contrast) are not clinically similar or similar in resource use to the service described by CPT code 75561. Response: We thank the commenter for their input. The OPPS payment rates are proposed based on available CY 2023 claims data. Our claims data show a geometric mean cost of about $450 for CPT code 75561 based on 27,543 single claims. We believe that the geometric mean cost of about $450 for CPT code 75561 is more consistent with the geometric mean cost of approximately $361 for APC 5572, than the geometric mean cost of approximately $800 for APC 5573. We continue to believe that the clinical and resource characteristics of CPT code 75561 are sufficiently like other procedures assigned to APC 5572 and should continue to be assigned to APC 5572. Comment: The same commenter requested that 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) be reassigned to APC 5593 (Level 3 Nuclear Medicine and Related Services) because of lack of clinical homogeneity and resource utilization with other services currently assigned to APC 5573. The commenter notes that CPT code 75563 was previously assigned to the Nuclear Medicine APC family until the imaging services were restructured during a comprehensive review of the APC series that took place in CY 2016. The purpose of the restructuring of the OPPS APC groupings for imaging services was to improve the clinical and resource homogeneity of the services classified within the imaging APCs (80 FR 70392 and 81 FR 7928). The commenter cites the following reasons to support the reassignment of 75563 to APC 5593: (1) the clinical labor and resources (acquisition time, staffing, medications, and perfusion agents) are very similar to CPT code 78452 which describes myocardial perfusion imaging; (2) both tests are indicated for patients with cardiac angina or coronary artery disease; and (3) both tests provide the same clinical information. We disagreed with a similar argument in the past (81 FR 79630) where commenters asserted that cardiac MRI with stress imaging is very similar to myocardial perfusion imaging because both tests are performed under a stress protocol and therefore should be assigned to APC 5593. APC 5593 contains procedures that describe nuclear medicine tests, and CPT code 75563 is a specific type of MRI and not a nuclear medicine test. Additionally, the geometric mean cost of CPT code 75563 is approximately $887 and the geometric mean cost of the APC to which it is assigned, APC 5573, is approximately $800. These geometric mean costs are very similar. However, the geometric mean cost of APC 5593 is approximately $1,321, which is significantly higher than the geometric mean cost of CPT code 75563. Therefore, assigning CPT code 75563 to APC 5593 would assign the procedure to an APC with clinically dissimilar nuclear medicine tests that have a geometric mean cost of $1,321 (as compared to the $887 geometric mean cost of CPT code 75563). In summary, after consideration of the public comment, we are finalizing our proposal without modification to assign CPT code 75561 to APC 5572 and CPT code 75563 to APC 5573 for CY 2025. The final CY 2025 payment rates for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the SI definitions for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website. [[Page 94077]]

16. CardioMEMS, HCPCS Code GMEM1, CPT Code 93264 (APCs 5724 and 5741)

The CardioMEMS Heart Failure System allows practitioners treating heart failure patients to wirelessly monitor and measure pulmonary artery pressure and heart rate in patients with heart failure and transmit the information to the physician to inform the treatment plan for the patient. The system includes two critical components: first, a miniaturized, wireless monitor, which is implanted into a patient's pulmonary artery, and second, a smart pillow (the CardioMEMS Patient Electronics System), which captures and transmits readings via safe radio frequency from the patient's implanted CardioMEMS Heart Failure System. The CardioMEMS Heart Failure System enables patients to transmit critical heart failure status information to clinicians regularly, potentially eliminating the need for frequent clinic or hospital visits. The CardioMEMS Heart Failure System is described by CPT code 33289 (Transcatheter implantation of wireless pulmonary artery pressure sensor for long-term hemodynamic monitoring, including deployment and calibration of the sensor, right heart catheterization, selective pulmonary catheterization, radiological supervision and interpretation, and pulmonary artery angiography, when performed). Interested parties have met with CMS and highlighted the critical importance of the device for heart failure patients who require close monitoring of weight and blood pressure to prevent fluid buildup around the heart and have requested that CMS establish coding to describe when practitioners and hospitals incur costs during clinical scenarios when crucial components of the system require replacement. Given that these components are crucial for system functionality and there is no existing coding framework to address their replacement, we believe that establishing appropriate coding and payment mechanisms can facilitate the provision of these services more effectively in the office and hospital settings. In the CY 2025 Physician Fee Schedule (PFS) proposed rule, we proposed a new code, HCPCS code GMEM1 (Provision of replacement patient electronics system (for example, system pillow) for home pulmonary artery pressure monitoring including provision of materials for use in the home and reporting of test results to physician or qualified health care professional). The CY 2025 PFS proposed rule (89 FR 61956) sought comment from interested parties regarding direct costs from invoices for the replacement component referenced above, utilization estimates, and potential indicators. CPT Code 93264 (Remote monitoring of a wireless pulmonary artery pressure sensor for up to 30 days, including at least weekly downloads of pulmonary artery pressure recordings, interpretation(s), trend analysis, and report(s) by a physician or other qualified health care professional) can be used by hospitals to bill for the ongoing analysis and monitoring performed with CardioMEMS. While we did not discuss the GMEM1 code in the CY 2025 OPPS proposed rule preamble it was included in Addendum B with an assignment to APC 5741 (Level 1 Electronic Analysis of Devices) with a payment rate of $36.90 and assigned a status indicator of Q1. CPT code 93264 was included in Addendum B with a status indicator of ``M'' to indicate that this code is not payable under the OPPS. The issue of payment for GMEM1 was brought to the Advisory Panel on Hospital Outpatient Payment (also known as HOP Panel) in 2024 for CY 2025 rulemaking. At the August 2024 meeting, based on the information presented, the Panel did not make any recommendations on GMEM1. We note that HCPCS code G0555 is replacing the placeholder code GMEM1. Comment: In their comment letters on the CY 2025 OPPS proposed rule, commenters indicated that the G0555 (placeholder codeGMEM1) code descriptor proposed in the CY 2025 PFS proposed rule introduces confusion by also referencing reporting test results to the physician, which is a separate function furnished by a different party than the replacement Patient Electronics System (PES). Commenters requested that CMS revise the proposed code descriptor for G0555 (placeholder code GMEM1) to clarify that it is for the replacement PES only and remove the following language from the descriptor: ``and reporting of test results to physician or qualified health care professional''). Commenters requested that if the code is finalized under OPPS (and PFS) with the revised descriptor, that CMS assign it to APC 1528, New Technology--Level 28 ($5001-$5500), which they believe is reflective of the cost of the replacement PES. Response: We agree that assignment to APC 5741 is likely not reflective of the cost of the replacement PES. However, assignment to New Technology APCs usually occurs when there is no existing clinical APC that is appropriate in terms of clinical similarity or resources. Based on the nature of the procedure, we believe that the service associated with GMEM1 is more appropriately in APC 5724 (Level 4 Diagnostic Tests and Related Services). We believe that the service described by HCPCS code G0555 (placeholder code GMEM1) shares similar resource costs and clinical characteristics with services included in APC 5724. Assignment to APC 5741 may not have sufficiently covered the cost of the replacement of the PES. Therefore, for CY 2025, we are revising the assignment for HCPCS code G0555 (placeholder code GMEM1) to APC 5724, with a status indicator of ``S''. Comment: Commenters recommend that CMS revise the OPPS status indicator for CPT 93264, which CMS proposed to designate as ``M'' (not payable under the OPPS). They argued that this classification is contrary to CMS's treatment of similar monitoring procedures (e.g., CPT codes 93297 and 93298), which have status indicator ``Q1'' and are assigned to APC 5741 (Level 1 Electronic Analysis of Devices). Response: As listed in OPPS Addendum D1 of the CY 2025 OPPS/ASC proposed rule, codes assigned to status indicator ``Q1'' may be packaged, assigned to a composite APC, or paid separately under the OPPS. Specifically, a ``Q1'' status indicator may indicate a: Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator ``S'', ``T'', or ``V''; or Composite APC payment if billed with specific combinations of services based on OPPS composite-specific payment criteria. Payment is packaged into a single payment for specific combinations of services; or In other circumstances, payment is made through a separate APC payment After reviewing the public comments, we agree with commenters that it is appropriate for the procedure described by CPT code 93264 to be assigned to status indicator Q1(conditionally packaged). Therefore, we are revising the status indicator for the code from ``M'' (not payable under the OPPS'') to ``Q1'' (conditionally packaged). The conditional packaging of this code supports our overarching goal to make payments for all services paid under the OPPS and ASC payment system more consistent with those of a prospective payment system and less like those of a per-service fee schedule. We believe that packaging encourages efficiency and is an essential component of a prospective payment system, and that packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service is a [[Page 94078]] fundamental part of the OPPS. We therefore believe packaging of CPT code 93264 is appropriate. Because CPT code 93264 was assigned status indicator ``M'' (not payable under the OPPS) we have no claims data to use for making an APC assignment for CPT code 93264 in CY 2025. We agree with commenters that the code is similar in clinical and resource use to CPT codes 93297 and 93298. Therefore, we will be assigning CPT code 93264 to APC 5741 (Level 1 Electronic Analysis of Devices) for CY 2025. In summary, after consideration of the public comment, we are finalizing the APC assignment for HCPCS code G0555 (placeholder code GMEM1) with modification. Specifically, we are revising the APC assignment for HCPCS code G0555 (placeholder code GMEM1) to APC 5724 and assigning the code to status indicator ``S'' for CY 2025. We are revising the status indicator for CPT 93264 and assigning a status indicator of ``Q1'' for CY 2025. Lastly, we are assigning CPT 93264 to APC 5741 for CY 2025. The final CY 2025 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. We refer readers to Table 79 for the code descriptor, APC assignment, status indicator assignment, and payment indicator assignment for CPT codes G0555 (placeholder code GMEM1) and 93264 for CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.103

17. Caregiver Training Services, HCPCS Codes GCTD1, GCTD2, and GCTD3

(APC 5731) The CY 2025 Physician Fee Schedule (PFS) proposed rule (89 FR 61956) proposed to establish new coding and payment for caregiver training for direct care services and supports. The topics of training could include, but would not be limited to, techniques to prevent decubitus ulcer formation, wound dressing changes, and infection control. Unlike other caregiver training codes that are currently paid under the PFS, the caregiver training codes for direct care services and supports focus on specific clinical skills aimed at the caregiver effectuating hands-on treatment, reducing complications, and monitoring the patient when the patient is not capable to do so themselves. Three new HCPCS codes were proposed: GCTD1 (Caregiver training in direct care strategies and techniques to support care for patients with an ongoing condition or illness and to reduce complications (including, but not limited to, techniques to prevent decubitus ulcer formation, wound dressing changes, and infection control) (without the patient present), face-to-face; initial 30 minutes), GCTD2 (Caregiver training in direct care strategies and techniques to support care for patients with an ongoing condition or illness and to reduce complications (including, but not limited to, techniques to prevent decubitus ulcer formation, wound dressing changes, and infection control) (without the patient present), face-to-face; each additional 15 minutes (List separately in addition to code for primary service) (Use GCTD2 in conjunction with GCTD1)), and GCTD3 (Group caregiver training in direct care strategies and techniques to support care for patients with an ongoing condition or illness and to reduce complications (including, but not limited to, techniques to prevent [[Page 94079]] decubitus ulcer formation, wound dressing changes, and infection control) (without the patient present), face-to-face with multiple sets of caregivers)). We did not propose APC or status indicator assignments for these G codes in the CY 2025 OPPS proposed rule (89 FR 59186). We note that the HCPCS codes G0541, G0542, and G0543 are replacing their respective placeholder codes GCTD1, GCDT2, and GCTD3. Comment: We received several comments related to the CY 2025 Physician Fee Schedule (PFS) proposal suggesting that we begin providing payment for Caregiver Training Services (CTS) G0541, G0542, and G0543placeholder codes GCTD1, GCTD2, and GCTD3) under the OPPS. Commenters asked for clarification on whether these codes would be given the OPPS status indicator ``A,'' which would limit their use for outpatient hospital payment purposes to therapists only, or whether CMS will assign separately payable status indicators to those codes. Commenters stated that assigning separately payable status would recognize the different types of hospital staff that can render appropriate CTS. Commenters requested that CMS make the newly proposed CTS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3) payable under the OPPS. Response: HCPCS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3) will be effective on January 1, 2025. Based on our evaluation of these new codes, we are proposing an interim assignment of HCPCS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3) to status indicator ``A'' to indicate that these codes are payable under a fee schedule or payment system other than the OPPS. These services are covered Medicare services and will be assigned payable indicators under the Physician Fee Schedule (PFS). While these services are not payable under the OPPS, they are payable under the PFS; therefore, we are proposing to assign them status indicator of ``A.'' Sections 1834(k) and 1833(a)(8) of the Act require that payment be made for outpatient therapy services (physical therapy, speech language pathology, and occupational therapy) furnished by providers of therapy services, including a hospital (to its outpatients and inpatients not under a Part A stay), be made under the PFS. In summary, we are proposing an interim assignment of HCPCS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3) to status indictor ``A'' to indicate that the code is payable under a fee schedule or payment system other than the OPPS. Because we were not able to propose APC and status indicator assignments in the CY 2025 OPPS proposed rule, we will be assigning HCPCS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3) comment indicator ``NI'' in Addendum B of this final rule. This comment indicator is for new HCPCS codes that will be effective January 1, 2025, to indicate that we are assigning them an interim status indicator and APC assignment, which is subject to public comment. We invite public comment on the interim proposed status indicators for HCPCS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3), which will then be finalized in the CY 2026 OPPS/ASC final rule with comment period. Please refer to Table 80 below for the proposed interim status indicator assignments for HCPCS codes G0541, G0542, and G0543 (placeholder codes GCTD1, GCTD2, and GCTD3) for CY 2025. [[Page 94080]] [GRAPHIC] [TIFF OMITTED] TR27NO24.104

18. Chimeric Antigen Receptor Therapy (CAR-T), CPT Codes 0537T, 0538T,

0539T, and 0540T (APC 5694) Chimeric Antigen Receptor T-Cell (CAR T-cell) therapy is a cell- based gene therapy in which T-cells are collected and genetically engineered to express a chimeric antigen receptor that will bind to a certain protein on a patient's cancerous cells. The CAR T-cells are then administered to the patient to attack certain cancerous cells, and the individual is observed for potential serious side effects that would require medical intervention. We refer readers to previous discussions in the OPPS/ASC final rules with comment period for background regarding the specific CAR T-cell products, in both the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231 through 61234) and the CY 2019 OPPS/ASC final rule with comment period (83 FR 58904 through 58908). In addition, for discussion about CY 2022 OPPS payment policies for separately paid drugs with pass-through status expiring or continuing in CY 2022, please see sections V.A.4 and V.A.5 of this final rule with comment period. The AMA created four Category III CPT codes that are related to CAR T-cell therapy, effective January 1, 2019. As discussed in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58904 through 58908), the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231 through 61234), and the CY 2021 OPPS/ ASC final rule with comment period (85 FR 85949 through 85951) we finalized our proposal to assign procedures described by CPT codes 0537T, 0538T, and 0539T to status indicator ``B'' (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS. The procedures described by CPT codes 0537T, 0538T, and 0539T describe the various steps required to collect and prepare the genetically modified T-cells, and Medicare does not generally pay separately for each step used to [[Page 94081]] manufacture a drug or biological. We also finalized that the procedures described by CPT code 0540T would be assigned status indicator ``S'' (Procedure or Service, Not Discounted when Multiple) and APC 5694 (Level 4 Drug Administration) for CY 2019 through CY 2024 and made no proposal to change the assignment for CY 2025. Additionally, the National Uniform Billing Committee (NUBC) established CAR T-cell- related revenue codes and a value code to be reportable on Hospital Outpatient Department (HOPD) claims effective for claims received on or after April 1, 2019. Category III CPT codes 0537T, 0538T, 0539T, and 0540T are being replaced by Category I CPT codes 38225, 38226, 38227, and 38228, which were previously represented by placeholder codes 3X018, 3X019, 3X020, and 3X021. As such, we made no specific proposal related to the CAR T- cell preparation codes but proposed to apply the existing APC and status indicator assignments for the predecessor Category III CPT codes to the replacement Category I CPT codes. As listed in Addendum B of the CY 2025 OPPS/ASC proposed rule, we proposed to continue to assign procedures described by these CPT codes, 3X018, 3X019, and 3X020, to status indicator ``B'' (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS. We proposed to continue to assign CPT code 3X021 to status indicator ``S'' (Procedure or Service, Not Discounted when Multiple) and APC 5694 (Level IV Drug Administration). Comment: Some commenters provided input on the proposed policies in the physician office setting regarding the dose preparation procedures associated with CAR T-cell therapy and other billing topics in the office setting, such as the expansion of digits on MAC claims processing screens for physician office claims. Response: Comments related to the CY 2025 PFS payment policies are out of scope. Comment: Several commenters opposed our proposal to continue to assign status indicator ``B'' to CPT codes 38225, 38226, and 38227, for CY 2025. Many commenters provided alternate status indicator assignment recommendations, such as ``S'', as well as APC assignment recommendations. Commenters stated that by allowing these codes to be billable and paid, CMS could use claims data collected to assign the codes to more accurate APCs. Some commenters explained that CMS's overall practice and billing process should be reevaluated, with some recommending revisions to, or the retirement of, MLN Matters Number SE19009 \26\ which they believed caused confusion, raised numerous program integrity concerns, including confusion regarding what can be included in ASP reporting, increased inconsistencies with Medicare requirements for under arrangement services and with charges reported and hospital billing, and commenters believed the elimination of this guidance, including separate payment of 38225, 38226, and 38227, would reduce hospital burden. One commenter raised the concern that some manufacturers will pay hospitals for the dose preparation services, while other manufacturers will not. In their view, this raises potential program integrity concerns and could influence medical decision making. --------------------------------------------------------------------------- \26\ https://www.cms.gov/regulations-and-guidance/guidance/transmittals/2019-transmittals-items/se19009. --------------------------------------------------------------------------- Commenters stated that the cell collection required as part of the CAR T-cell therapy process is done by leukapheresis, a costly and labor-intensive procedure in commenters' view. Commenters also communicated that the hospital in which the preparation procedure occurs is not always the same facility in which the final infusion of the therapy occurs. In their view, this could disincentivize hospitals from providing the preparation procedures if they are not the hospital ultimately providing the final product. A few commenters emphasized that manufacturers do not provide these services, hospitals do. Commenters believed ``under-arrangements'' made between hospitals were infeasible long term given the likely growth in the volume of these therapies and the costs incurred. Commenters also discussed that the preparation procedures could occur months apart from the final administration of the product. Many of these commenters also stated that 10-15 percent of the time a finalized CAR T-cell therapy product is never administered to a beneficiary, which could occur for a multitude of reasons, such as a manufacturing failure, or disease progression potentially resulting in death or ineligibility for treatment while the CAR T-cell therapy product is being manufactured. Commenters also recommended CMS revise the product specific Q-codes to remove ``leukapheresis and dose preparation procedures'' and they believe it is inappropriate for these services to be described by the HCPCS Level II codes when they can be described by Level I HCPCS codes. Additional commenters recommended CMS transition the product specific Q-codes to permanent J-codes. Several commenters discussed other therapies, such as stem cell transplant, and therapies such as those described by HCPCS codes J3394 (Injection, lovotibeglogene autotemcel, per treatment) and J3393 (Injection, betibeglogene autotemcel, per treatment), which in commenter's view is similar to CAR T-cell therapy and requires similar dose preparation procedures. Commenters supported the 2024 Advisory Panel on Hospital Outpatient Payment recommendation to assign CPT code 38225/3X018, Chimeric antigen receptor T-cell therapy; harvesting of blood-derived T lymphocytes for development of genetically modified autologous CAR-T cells, per day, an SI of S and place the code in APC 5242, Level 2 Blood Product Exchange and Related Services. The Panel further recommended that CMS assign CPT code 38226/3X019, Chimeric antigen receptor T-cell therapy; preparation of blood-derived T lymphocytes for transportation (e.g., cryopreservation, storage); and CPT code 38227/3X020, Chimeric antigen receptor T-cell therapy; receipt and preparation of CAR-T cells for administration; an SI of S and place these codes in APC 5241, Level 1 Blood Product Exchange and Related Services. Response: We thank the commenters for their feedback. CMS continues to believe that the procedures described by CPT codes 0537T, 0538T, and 0539T and replacement CPT codes 38225, 38226, and 38227, describe the various steps required to collect and prepare the genetically modified T-cells, and Medicare does not generally pay separately for each step used to manufacture a drug or biological product. Therefore, CMS does not believe that separate or packaged payment under the OPPS is necessary for the procedures described by CPT codes 38225, 38226, and 38227, for CY 2025. However, we thank commenters for providing their unique perspectives and experiences in situations where the manufacturing process does not result in a final product being administered to a beneficiary. We note that the current HCPCS coding for the currently approved CAR T-cell therapies include leukapheresis and dose preparation procedures, as these services are included in the manufacturing of these biologicals. Therefore, payment for these services is [[Page 94082]] incorporated into the drug codes. CMS is not revising the descriptors for the Q-codes to remove leukapheresis and dose preparation procedures nor are we transitioning the Q-codes to J-codes at this time. We note that, although there is no payment associated with CPT codes 38225, 38226, and 38227, for reasons stated previously, these codes can still be reported to CMS for tracking purposes. We thank commenters for their feedback and for raising concerns related to our guidance contained in MLN Matters Article SE19009. We are not revising this document at this time as we believe these instructions are consistent with our longstanding policies, but we understand the feedback provided. Accordingly, we are not accepting the recommendations at this time to revise the status indicators for procedures described by CPT codes 38225, 38226, and 38227. We will continue to evaluate and monitor payment for CAR T-cell therapies. In summary, after consideration of the public comments we received, we are finalizing our proposal to assign status indicator ``B'' to CPT codes 38225, 38226, and 38227 for CY 2025 without modification. Additionally, we are continuing our policy from CY 2019 to assign status indicator ``S'' to CPT code 38228 for CY 2025. Table 81 shows the final SI and APC assignments for HCPCS codes 38225, 38226, 38227, and 38228 for CY 2025. For more information on CY 2025 OPPS final status indicators, APC assignments, and payment rates for HCPCS codes, including the CAR T-cell drug codes, we refer readers to Addendum B to this final rule with comment period. In addition, the status indicator definitions can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2025) to this final rule with comment period. Both Addendum B and D1 are available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.105

19. Complex Bunion Correction Procedure CPT Code 28297 (APC 5115)

CPT code 28297 describes a surgical procedure to correct a bunion, or hallux valgus, in the foot. The procedure involves: Removing the bunion Realigning the big toe Correcting the bony prominence at the base of the toe [[Page 94083]] Fusing the joint between the first metatarsal bone and the medial cuneiform bone Removing the sesamoid bones, which are pea-shaped bones under the big toe joint In the CY 2025 OPPS/ASC proposed rule, we proposed to move CPT code 28297 (Correction, hallux valgus with bunionectomy, with sesamoidectomy when performed; with first metatarsal and medial cuneiform joint arthrodesis, any method) from APC 5114 (Level 4 Musculoskeletal Procedures) to APC 5115 (Level 5 Musculoskeletal Procedures) with the proposed payment rate of $12,755.58. We received several comments supporting the proposed reassignment of CPT code 28297 from APC 5114 (Level 4 Musculoskeletal Procedures) to APC 5115 (Level 5 Musculoskeletal Procedures). Comment: One commenter stated that CPT code 28297 clearly meets the criteria for reassignment. The total frequency of CPT code 28297 exceeded the significance threshold of 1,000 procedures. The geometric mean cost of CPT code 28297 exceeded two times the geometric mean cost of the lowest significant procedure in APC 5114 (Level 4 Musculoskeletal Procedures). Furthermore, the geometric mean cost of CPT code 28297 was nearly equal to the geometric mean cost of APC 5115 (Level 5 Musculoskeletal Procedures). Several other commenters also supported assigning CPT code 28297 to APC 5114 ((Level 5 Musculoskeletal Procedures). Response: We agree with the commenters, and we thank them for their support. In summary, after consideration of the public comments that we received, we are finalizing our proposal without modification and are assigning CPT code 28297 to APC 5115 (Level 5 Musculoskeletal Procedures) for CY 2025. The final CY 2025 payment rate for this code can be found in Addendum B of this final rule with comment period.

20. Computational Electrocardiogram (ECG) Analysis System (vMap), CPT

Code 0897T (APC 5724) CPT code 0897T (Noninvasive augmentative arrhythmia analysis derived from quantitative computational cardiac arrhythmia simulations, based on selected intervals of interest from 12-lead electrocardiogram and uploaded clinical parameters, including uploading clinical parameters with interpretation and report) utilizes ECG data to identify potential arrhythmia focal points for patients. The vMap provides augmented information which enables physicians to characterize arrhythmia and assists in triage and treatment of abnormal rhythm. CPT code 0897T became effective July 1, 2024 and since its establishment, the code has been assigned to APC 5724 (Level 4 Diagnostic Tests and Related Services) for CY 2024. Because this is a new code for CY 2024, there are no claims available. For CY 2025, we proposed to maintain the assignment to APC 5724, with a payment rate of $1,012.27. Comment: One commenter supported our proposal to assign CPT code 0897T to APC 5724, due to the resource similarity of this technology to other procedures assigned to APC 5724. Response: We appreciate the commenter's feedback on CPT code 0897T and we agree with the commenter's recommendation to finalize the APC assignment. After consideration of the public comment we received, we are finalizing our proposal without modification for CPT code 0897T. Please refer to Table 82 below for the final OPPS APC and status indicator assignment for HCPCS code 0897T for CY 2025. 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] TR27NO24.106

21. Computed Tomographic Colonography, CPT Code 74263 (APC 5523)

For CY 2024, we assigned CPT code 74263 (Computed tomographic (CT) colonography, screening, including image postprocessing) to status indicator ``E1'' indicating that the service was not covered and not payable by Medicare under the OPPS. For the CY 2025 OPPS/ASC proposed rule, we proposed to assign CPT code 74263 to APC 5522 (Level 2 Imaging without Contrast) and a status indicator of ``S'' (Procedure or Service, Not Discounted When Multiple. Paid under OPPS; separate APC payment) to indicate that the code is separately payable under OPPS based on the proposed coverage changes for the colorectal cancer screening. (We refer our readers to section X.E. of this final rule with comment period for a full discussion of the coverage changes for colorectal cancer screening services.) For the CY 2025 OPPS/ASC proposed rule, we believed the time and resources associated with performing a screening virtual colonoscopy is similar to those necessary to furnish a diagnostic virtual colonoscopy, which is described by CPT code 74261 (Computed tomographic (ct) colonography, diagnostic, including image postprocessing; without contrast material). Consequently, we proposed to [[Page 94084]] assign CPT code 74263 to APC 5522 (Level 2 Imaging without Contrast) based on its clinical and resource homogeneity to CPT code 74261, which is assigned to the same clinical APC. Comment: We received one comment requesting to reassign CPT code 74263 to APC 5571 (Level 1 Imaging with Contrast). The commenter is concerned that the proposed payment for the screening CT colonography is insufficient to cover the costs of providing the service. The commenter believed that other services within that APC family such as CT abdomen with contrast have greater clinical homogeneity with CPT code 74263. Response: We thank the commenter for their input. We disagree with the commenter that CPT code 74263 should be placed in APC 5571 (Level 1 Imaging with Contrast) as it is a procedure that is completed without contrast. However, we do believe that this newly covered screening test for colorectal cancer should be assigned to an APC where payment is more comparable to the purported resource costs. Given that any claims data in CY 2023 would be from before the service was payable in the OPPS, it would be difficult to rely on the claims data to determine the APC assignment for this code. Based on our review of the service (CT colonography) compared to other services assigned to the Imaging without Contrast APC series, we believe CPT code 74176 (Computed tomography, abdomen and pelvis; without contrast material) is an appropriate crosswalk code for CPT code 74263. In summary, after consideration of the public comment, we are finalizing our proposal with modification to assign CPT code 74263 to APC 5523 (Level 3 Imaging without Contrast) and a status indicator of ``S'' for CY 2025. The final CY 2025 payment with 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 definitions for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

22. Concurrent Optical and Magnetic Stimulation (COMS) Therapy, CPT

Codes 0906T and 0907T (APC 5051) On June 20, 2023, CMS approved for Medicare coverage the Category B Investigational Device Exemption (IDE) study associated with concurrent optical and magnetic stimulation (Study Title: \27\ Concurrent Optical and Magnetic Stimulation (COMS) for Treatment of Refractory Diabetic Foot Ulcer; a Prospective Randomized, Sham-controlled, Double-blinded, Pivotal Clinical Trial; NCT number NCT05758545; IDE number G220277 \28\). For the July 2024 update, the AMA CPT Editorial Panel established 0906T (placeholder code XX18T) (Concurrent optical and magnetic stimulation therapy, wound assessment and dressing care; first application, total wound(s) surface area less than or equal to 50 sq cm) and 0907T (placeholder code XX37T) (Concurrent optical and magnetic stimulation (COMS) therapy, wound assessment and dressing care; each additional application, total wound(s) surface area less than or equal to 50 sq cm (List separately in addition to code for primary procedure)) for COMS, effective January 1, 2025. --------------------------------------------------------------------------- \27\ ClinicalTrials.gov. ``Trial to Evaluate the Safety and Effectiveness of Treatment With COMS One Device in Subjects With Diabetic Foot Ulcers (Mavericks).'' Accessed September 24, 2024. https://clinicaltrials.gov/study/NCT05758545 \28\ Approved IDE Studies- ``G220277-NCT05758545.'' Accessed September 24, 2024. https://www.cms.gov/medicare/coverage/ide/approved-ide-studies/683545095/g220277-nct05758545 --------------------------------------------------------------------------- For the CY 2025 OPPS/ASC proposed rule, CMS proposed to assign the SIs and APCs listed in Table 83 below for the new codes based on the clinical characteristics of the procedures. [GRAPHIC] [TIFF OMITTED] TR27NO24.107 We note that at the August 28, 2024, HOP Panel Meeting, a presentation was made requesting the reassignment to APC 5053 for CPT code 0906T (placeholder code XX18T). Based on the information presented at the meeting, the Panel made no recommendation on the APC assignment for the code. [[Page 94085]] Comment: We received a comment from the manufacturer of COMS on our proposed assignments for the codes listed in Table 83. The commenter stated that the COMS procedures include extensive wound examination, wound bed preparation, and dressing management. With the inclusion of standard wound care administered before and after each active COMS device treatment, the commenter estimates that the total time required for a COMS procedure is 35-50 minutes, during which considerable medical supplies and facility resources are utilized. The manufacturer suggested that the total resource code for CPT code 0906T is $627, with $392 in hospital facility resource costs and $235 specifically for the COMS device-associated costs. The commenter maintains that the assignment to APC 5051, which has a proposed CY 2025 payment rate of $201.14, does not cover the costs of the procedure. The commenter claims that CPT code 0906T is sufficiently similar in terms of resources and time to CPT codes 11043 (Debridement, muscle and/or fascia (includes epidermis, dermis, and subcutaneous tissue, if performed); first 20 sq cm or less) and 12044 (Repair, intermediate, wounds of neck, hands, feet and/or external genitalia; 7.6 cm to 12.5 cm), both assigned to APC 5053 ((Level 3 Skin Procedures, proposed CY 2025 payment rate of $619.63), to warrant the reassignment of CPT code 0906T to APC 5053. The commenter further stated that assigning these procedures to APC 5053 would align with other wound care procedures with similar resource costs and procedural time. Response: We thank the commenter for their input. We have no claims data for CPT code 0906T available for this final rule. However, based on this code's similarity to CPT code 0521T (Extracorporeal shock wave for integumentary wound healing, including topical application and dressing care; initial wound) and CPT code 97610 (Low frequency, non- contact, non-thermal ultrasound, including topical application(s), when performed, wound assessment, and instruction(s) for ongoing care, per day) which are both assigned to APC 5051, we continue to believe CPT code 0906T has clinical and resource similarities to procedures assigned to APC 5051. Therefore, for CY 2025, we are finalizing our proposal without modification and assigning CPT code 0906T to APC 5051. Table 84 lists the final CY 2025 OPPS payment rate for 0906T and 0907T. In summary, after consideration of the public comment that we received, we are finalizing the APC and SI assignments for CPT codes 0906T to APC 5051. 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 meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.108 [[Page 94086]]

23. Cystourethroscopy With Temporarily Implanted Nitinol Device

Procedure, HCPCS Code C9769 (APC 5376) Cystourethroscopy temporarily implanted nitinol device (iTIND) is a minimally invasive surgery to treat bothersome lower urinary tract symptoms (LUTS) caused by benign prostate enlargement. The iTIND serves to re-model the bladder neck and the prostatic urethra. The HCPCS Code C9769 (Cystourethroscopy, with insertion of temporary prostatic implant/stent with fixation/anchor and incisional struts) became effective October 1, 2020. For CY 2025, the proposed OPPS payment rates are based on available CY 2023 claims data. For CY 2025, based on our analysis of claims data, we found a total of 96 single frequency claims and a geometric mean cost of approximately $4,902 for HCPCS code C9769. For CY 2025, we proposed to continue to assign HCPCS code C9769 to APC 5376 (Level 6 Urology and Related Services) with a proposed payment rate of approximately $9,209. Comment: One commenter pointed out that the AMA CPT created a new code, CPT code 5XX05 effective January 1, 2025, to describe the cystourethroscopy with iTIND service represented by HCPCS code C9769. CPT code 5XX05 (Cystourethroscopy with insertion of temporary device for ischemic remodeling (i.e., pressure necrosis) of bladder neck and prostate) becomes effective January 1, 2025. The commenter stated that CMS may either sunset HCPCS code C9769 and reassign the underlying claims to CPT code 5XX05 or maintain HCPCS code C9769 active and assign CPT code 5XX05 to a non-payable status in the OPPS. Response: We thank the commenter for pointing out that CPT code 5XX05 (53865) will become effective January 1, 2025. We note that we will replace HCPCS code C9769 with CPT code 5XX05 (53865) effective January 1, 2025, as well as assign the underlying claims associated with HCPCS code C9769 to CPT code 5XX05 (53865). Therefore, for CY 2025, we are reassigning CPT code 5XX05 (53865) to Level 6 Urology and Related Services (APC 5376). We note that we will continue to evaluate and monitor the cost for CPT code 5XX05 (53865) for future rulemaking. After consideration of the public comment we received, we are finalizing our policy to assign CPT code 5XX05 (53865) to APC 5376 (Level 6 Urology and Related Services) and we will be sunsetting HCPCS code C9769. Please refer to Table 85 for the final OPPS APC and status indicator assignment for CPT code 5XX05 (53865) for CY 2025. 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] TR27NO24.109

24. Dental Alveoloplasty and Exostosis Removal Procedures, CDT Codes

D7320, D7321, and D7471 (APCs 5163, 5164) Effective January 1, 2024, we made 229 additional dental codes payable under the OPPS when payment and coverage requirements are met, as provided in the relevant PFS payment rules regarding Medicare Part B payment for dental services (88 FR 81540-82185). For CY 2025, we did not propose to make additional dental codes payable under the OPPS. As a result, we proposed to continue to assign many dental services to non-payable status indicators, including CDT codes D7320 (Alveoloplasty not in conjunction with extractions--four or more teeth or tooth spaces, per quadrant), D7321(Alveoloplasty not in conjunction with extractions--one to three teeth or tooth spaces, per quadrant), and D7471 (Removal of lateral exostosis (maxilla or mandible), which we proposed to assign to status indicator ``B,'' indicating the service is not paid under OPPS, for CY 2025. Comment: We received a comment from an association representing oral and maxillofacial surgeons requesting that we make CDT codes D7320, D7321, and D7471 payable under the OPPS. The commenter stated that these codes may contribute to the elimination of an oral or dental infection. The commenter explained that alveoloplasty and the removal of lateral exostosis are often necessary procedures for medically compromised patients undergoing tooth removal prior to radiation treatment. Failure to perform these procedures, per the commenter, can put patients at risk for osteoradionecrosis following radiation therapy. In addition, the commenter explained that not performing an alveoloplasty or removing the exostosis when clinically indicated may impede the patient's ability to receive a removable prosthesis due to the risk of tissue trauma. The procedures may also be required to address common sequelae following dental extractions. Per the commenters, excluding the services described by CDT codes D7320, D7321, and D7471 from OPPS payment places patients at considerable risk and diminishes the effectiveness of initial treatments aimed at eliminating oral or dental infections. Finally, the commenters stated that there are existing CPT codes that describe these procedures. Specifically, per the commenters, CPT code 41874 (Alveoloplasty, each quadrant (specify)) may describe alveoloplasty procedures and CPT code 41823 (Excision of osseous tuberosities, dentoalveolar structures) may describe the removal of exostosis. Response: We appreciate the commenter's input. We note that the commenter submitted a similar public comment to the CY 2024 OPPS/ASC final rule to assign several codes, including CDT codes D7320, D7321, and [[Page 94087]] D7471, to APCs for CY 2024. In the CY 2024 OPPS/ASC final rule, we agreed to assign to clinical APCs the codes for which we agreed with the commenter 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 (42 CFR 411.15). We also specified we needed more information on how certain codes the commenter recommended for APC assignment, including CDT codes D7320, D7321, and D7471, were consistent with existing dental payment polices. The comment to the CY 2025 OPPS/ASC proposed rule provided additional information regarding how dental surgical procedures including surgical interventions to facilitate tooth eruption, alveoloplasty or ridge preparation and removal of lateral exostosis of the jaw may contribute to the elimination of an oral or dental infection. Based on the additional information provided, we agree with the commenter that t CDT codes D7320, D7321 and D7471 should be assigned to clinical APCs for CY 2025 as we believe there may be instances where these services 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 and CY 2024 PFS final rules. For CY 2025, we are assigning CDT codes D7320 and D7321 to APC 5163 (Level 3 ENT Procedures), based on clinical and resource similarities to other alveoloplasty codes currently assigned to the same clinical APC, specifically CDT codes D7310 (Alveoloplasty in conjunction with extractions--four or more teeth or tooth spaces, per quadrant) and D7311 (Alveoloplasty in conjunction with extractions--one to three teeth or tooth spaces, per quadrant). We are also assigning CDT code D7471 to APC 5164 (Level 4 ENT Procedures) based on clinical and resource similarities to other exostosis services assigned to the same clinical APC, specifically CPT codes 21031 (Remove exostosis mandible) and 21032 (Remove exostosis maxilla). We note that Medicare Part B does not pay for removable prostheses, such as dentures. While we understand that services like alveoloplasty and the removal of the exostosis can improve the fit and stability of dentures and other dental prosthetics as the commenter explained, we are not finalizing APC assignments for CPT codes D7320, D7321 and D7471 so that these services may be furnished in preparation for a patient's denture or dental implant, and billing Medicare for that purpose would not meet our payment and coverage requirements. 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. After consideration of the public comment received, for CY 2025, we are finalizing clinical APC assignments for CDT codes D7320, D7321, and D7471. Please refer to Table 86for the final APC assignments and status indicators for CDT codes D7320, D7321, and D7471. We refer readers to Addendum D1 to this final rule with comment period for a complete list of status indicators and their definitions. Addendum D1 is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.110

25. Digital Mental Health Treatment Devices, HCPCS Codes GMBT1, GMBT2,

and GMBT3 (APC 5012) In CY 2025 Medicare Physician Fee Schedule proposed rule (89 FR 61956) we stated that we recognize that digital therapeutics may offer innovative means to access certain behavioral health care services. We noted that given nationwide behavioral health workforce shortages combined with increasing demand for behavioral health care services, some Medicare beneficiaries may have limited access to these services. To that end, we proposed to create three new HCPCS codes for Digital Mental Health Treatment Devices (DHMT): GMBT1 (Supply of digital mental health treatment device and initial education and onboarding, per course of treatment that augments a behavioral therapy plan) for furnishing a DMHT device; GMBT2 (First 20 [[Page 94088]] minutes of monthly treatment management services directly related to the patient's therapeutic use of the digital mental health treatment (DMHT) device that augments a behavioral therapy plan, physician/other qualified health care professional time reviewing data generated from the DMHT device from patient observations and patient specific inputs in a calendar month and requiring at least one interactive communication with the patient/caregiver during the calendar month) and GMBT3 (Each additional 20 minutes of monthly treatment management services directly related to the patient's therapeutic use of the digital mental health treatment (DMHT) device that augments a behavioral therapy plan, physician/other qualified health care professional time reviewing data generated from the DMHT device from patient observations and patient specific inputs in a calendar month and requiring at least one interactive communication with the patient/ caregiver during the calendar month). We did not address the new proposed DMHT device G-codes or propose APC or Status Indicator assignments in the CY 2025 OPPS proposed rule (89 FR 59186). The HCPCS codes G0552, G0553, and G0554 are replacing the respective placeholder codes GMBT1, GMBT2, and GMBT3. Comment: We received several comments on the DHMT codes with different suggestions on how these codes be treated in the OPPS. One commenter recommended that CMS assign code G0552 (placeholder code GMBT1) to APC 1511--New Technology Level 11--with a CY 2025 proposed payment rate of $950.50. This commenter went on to say that CMS could then update the applicable APC assignment for DMHT devices over time after it obtains hospital claims data. Commenters who suggested CMS assign HCPCS code G0552 (placeholder code GMBT1) to a New Technology APC explained that this approach is similar to ones the agency has taken in the past--most notably for reimbursing for the technical/ facility components of remote therapeutic monitoring (RTM) and remote physiological monitoring (RPM) codes. One commenter supported contractor pricing for HCPCS code G0552 (placeholder code GMBT1). Commenters urged CMS to establish a payment for the DMHT device supply in the hospital outpatient setting in the CY 2025 OPPS final rule. Response: HCPCS codes G0552, G0553, and G0554 (placeholder codes GMBT1, GMBT2, and GMBT3) will be effective on January 1, 2025. Based on our evaluation of these new codes and in response to commenters' requests, we are proposing an interim assignment of HCPCS code G0552 (placeholder code GMBT1) to status indicator ``V'' (Clinic or Emergency Department Visit; Paid under OPPS; separate APC payment) and APC 5012 (Clinic Visits and Related Services). We are proposing an interim assignment of HCPCS code G0553 (placeholder code GMBT2) to status indicator ``V'' (Clinic or Emergency Department Visit; Paid under OPPS; separate APC payment) and APC 5012 (Clinic Visits and Related Services). Finally, we are proposing an interim assignment of HCPCS code G0554 (placeholder code GMBT3) to status indictor ``N'' to indicate that the code is packaged since it is an add-on service to the primary code, and payment for add-on codes is always packaged with their associated primary service codes under regulation at 419.2(b)(18). Because we were not able to propose APC and status indicator assignments in the CY 2025 OPPS proposed rule, we will be assigning HCPCS codes G0552, G0553, and G0554 (placeholder codes GMBT1, GMBT2, and GMBT3) comment indicator ``NI'' in Addendum B of this final rule. This comment indicator is for new HCPCS codes that will be effective January 1, 2025, to indicate that we are assigning them an interim status indicator and APC assignment, which is subject to public comment. We invite public comment on the interim proposed status indicators and APC assignments for HCPCS codes G0552, G0553, and G0554 (placeholder codes GMBT1, GMBT2, and GMBT3), which will then be finalized in the CY 2026 OPPS/ASC final rule with comment period. Please refer to Table 87 for the proposed interim APC and status indicator assignments for HCPCs codes G0552, G0553, and G0554 (placeholder codes GMBT1, GMBT2, and GMBT3) for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment period. [[Page 94089]] [GRAPHIC] [TIFF OMITTED] TR27NO24.111

26. Drug-Coated Balloon for Esophageal and Bowel Strictures, CPT Codes

0884T, 0885T, and 0886T (APC 5331) ProTractX3\TM\ TTS is a drug-coated balloon that is used to treat strictures in the esophagus, small intestine, and large intestine. For the CY 2025 OPPS proposed rule, we proposed to assign CPT code 0884T (Esophagoscopy, flexible, transoral, with initial transendoscopic mechanical dilation (e.g., nondrug-coated balloon) followed by therapeutic drug delivery by drug-coated balloon catheter for esophageal stricture, including fluoroscopic guidance, when performed) with no claims data for CY 2025 to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around $3,805804. In addition, we proposed to assign both CPT code 0885T (Colonoscopy, flexible, with initial transendoscopic mechanical dilation (e.g., nondrug-coated balloon) followed by therapeutic drug delivery by drug-coated balloon catheter for colonic stricture, including fluoroscopic guidance, when performed) and CPT code 0886T (Sigmoidoscopy, flexible, with initial transendoscopic mechanical dilation (e.g., nondrug-coated balloon) followed by therapeutic drug delivery by drug-coated balloon catheter for colonic stricture, including fluoroscopic guidance, when performed) with no claims data for CY 2025 to APC 5313 (Level 3 Lower GI Procedures) with a payment rate of around $2,742. Comment: One commenter, the manufacturer of the ProTractX3\TM\ TTS, requested that the procedures described CPT codes 0884T-0886T be reassigned to APC 5331 (Complex GI Procedures) with a payment rate of around $5,953. The commenter stated that the cost of the ProTractX3\TM\ TTS is $3,100. The commenter based their cost estimate for the ProTractX3\TM\ TTS on similar drug-coated balloons used for other medical procedures. The commenter believes the cost of ProTractX3\TM\ TTS should be added to the geometric mean cost of the existing procedures that correspond to the procedures described by CPT codes 0884T-0886T, but do not describe the use of a drug-coated balloon with the procedures. These procedures are CPT code 43220 (Esophagoscopy, flexible, transoral; with transendoscopic balloon dilation (less than 30 mm diameter) with a geometric mean cost of around $2,175 that corresponds to procedure described by CPT code 0884T; CPT code 45386 (Colonoscopy, flexible; with transendoscopic balloon dilation) with a geometric mean cost of around $1,662 that corresponds to the procedure described by CPT code 0885T; and CPT code 45340 (Sigmoidoscopy, flexible; with transendoscopic balloon dilation) with a geometric mean cost of around $1,518 that corresponds to the procedure described by CPT code 0886T. The commenter also noted that additional operating room time needed to use the drug-coated balloon adds another $806 to the cost of each of these procedures. According to the commenter, when the cost of ProTractX3\TM\ TTS drug-coated balloon and the cost of the additional operating room time to use the drug-coated balloon is added to the geometric cost of CPT code 43220, the estimated cost of CPT code 0884T is $6,081. The commenter performed similar calculations for CPT code 0885T reporting an estimated procedure cost of $5,568, and for CPT code 0886T, the commenter reported an estimated procedure cost is $5,424. The commenter made the case that these procedure costs are much closer to the payment rate of APC 5331 of $5,953, than the payment rate of $3,805 for APC 5303 where we proposed to assign CPT code 0884T. Likewise, the commenter showed that the procedure costs for CPT codes 0885T and 0886T are much closer to the payment rate of APC 5331 of $5,953, than the payment rate of APC 5313 of $2,742 where we had proposed to assign those CPT codes. Response: We appreciate the detailed analysis by the commenter which demonstrated the additional costs of the ProTractX3\TM\ TTS drug- coated balloon, as well as the use of the drug-coated [[Page 94090]] balloon when compared to the corresponding procedures where no drug- coated balloon is used. Based on the additional cost data provided by the commenter, we agree with the commenter that CPT codes 0884T-0886T should be assigned to APC 5331. After consideration of the public comments we received, we are implementing our proposal with modification to assign CPT codes 0884T, 0885T, and 0886T to APC 5331 (Complex GI Procedures). Table 88 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule 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] TR27NO24.112

27. EchoGo Echocardiography Image Processing Service, HCPCS Code C9786

(APC 5743) Effective July 1, 2023, based on a New Technology application received by CMS for an echocardiography image processing service, CMS established HCPCS code 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). In CY 2024, CMS reassigned HCPCS code C9786 to APC 5743 (Level 3 Electronic Analysis of Devices). For CY 2025, CMS is deleting HCPCS code C9786 because the CPT Editorial Panel established new Category III CPT code, specifically, 0932T (Noninvasive detection of heart failure derived from augmentative analysis of an echocardiogram that demonstrated preserved ejection fraction, with interpretation and report by a physician or other qualified health care professional) to describe the same service, which will be effective January 1, 2025. Because the final CY 2025 CPT code number was not available when we published the CY 2025 OPPS/ASC proposed rule, the code was listed as placeholder code XX68T in the OPPS Addendum B of the CY 2025 OPPS/ASC proposed rule. In the CY 2025 OPPS/ASC proposed rule, we proposed to assign CPT code XX68T (Noninvasive detection of heart failure derived from augmentative analysis of an echocardiogram that demonstrated preserved ejection [[Page 94091]] fraction, with interpretation and report by a physician or other qualified health care professional) to APC 5743 (Level 3 Electronic Analysis of Devices), the same APC to which HCPCS code C9786 is assigned. We note that because both HCPCS code C9786 and CPT code 0932T describe the same service, effective January 1, 2025, CMS will delete HCPCS code C9786 and only CPT code 0932T will be used to bill for the service. We received one public comment in support of our proposal. Comment: The commenter noted that the assignment of XX68T to APC 5743 appropriately reflects the resources required to perform this advanced artificial intelligence (AI) analysis, as well as the clinical value it provides. and stated that this APC assignment would help ensure adequate reimbursement for hospitals, supporting broader access to this important diagnostic tool for Medicare beneficiaries. The commenter appreciated CMS's consideration of this new technology and its potential impact on patient care. Response: We thank the commenter for the support. In summary, after consideration of the public comment we received, we are finalizing our proposal, without modification, to assign CPT code 0932T to APC 5743 for CY 2025. We note that the final CY 2025 payment rate for the code can be found in Addendum B of 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. Endoscopic Submucosal Dissection (ESD) Procedure, HCPCS Code C9779

(APC 5303) CMS established HCPCS code C9779 (Endoscopic submucosal dissection (ESD), including endoscopy or colonoscopy, mucosal closure, when performed) effective October 1, 2021, to describe the endoscopic submucosal dissection (ESD) performed during an endoscopy or colonoscopy. HCPCS code C9779 was established based on a New Technology application that was submitted to CMS for New Technology consideration under the OPPS. Based on our assessment, we assigned the code to APC 5313 (Level 3 Lower GI Procedures) because we believed the ESD procedure had similar clinical characteristics and resource costs as the surgical procedures assigned to APC 5313. We announced the assignment to APC 5313 in the October 2021 OPPS quarterly update CR (Transmittal 10997, Change Request 12436, dated September 16, 2021). In CY 2022, we continued to assign the code to APC 5313. For CY 2023, we assigned HCPCS code C9779 to APC 5303 (Level 3 Upper GI Procedures) after receiving public comments that stated that the ESD procedure's resource requirements and geometric mean cost were more similar to the resource requirements and geometric mean costs of procedures found in APC 5303. Further, commenters noted that the ESD procedure is technically more demanding, requires advanced skills to perform, and is clinically similar to CPT code 43497 (Lower esophageal myotomy, transoral (i.e., peroral endoscopic myotomy [POEM])), which was assigned to APC 5303. For CY 2025, we proposed to maintain HCPCS code C9779 (with a geometric mean cost (GMC) of around $5,093) in APC 5303 (Level 3 Upper GI Procedures). Comment: We received one comment requesting that we reassign HCPCS code C9779 from APC 5303 (Level 3 Upper GI Procedures) to APC 5361 (Level 1 Laparoscopy and Related Procedures). The commenter states that resource requirements for HCPCS code C9779 are well-aligned with other procedures in APC 5361, noting that the geometric mean cost of HCPCS code C9779 is higher than 4 procedures with significant volume assigned to APC 5361. The commenter believes that based on resource cost and clinical homogeneity, HCPCS code C9779 should be reassigned to APC 5361. Response: We thank the commenter for their input. We disagree with the commenter that HCPCS code C9779 should be assigned to APC 5361. Specifically, we do not believe that endoscopic submucosal dissection is a laparoscopic procedure and should not be assigned to a laparoscopic APC family. Additionally, we believe HCPCS code C9779 is appropriately assigned, based on both clinical similarity and resource costs, to APC 5303 (Level 3 Upper GI Procedures). In summary, after consideration of the public comment, we are finalizing our proposal without modification to assign HCPCS code C9779 to APC 5303 (Level 3 Upper GI Procedures). 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. The final CY 2025 OPPS 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. Both Addendum B and D1 are available via the internet on the CMS website.

29. Esophageal Balloon Distention Study, CPT Code 91040 (APC 5723)

Esophageal balloon distension studies are used to diagnose conditions of the esophagus and may be used to determine the source of certain types of pain, such as chest pain. The esophageal balloon study is often performed in conjunction with esophagogastroduodenoscopy procedures. For CY 2025, we proposed to assigned CPT code 91040 (Esophageal balloon distension study, diagnostic, with provocation when performed) to APC 5723 (Level 3 Diagnostic Tests and Related Services) with a proposed payment rate of around $530. Comment: We received one public comment requesting that CPT code 91040 be reassigned from APC 5723 (Level 3 Diagnostic Tests and Related Services) to APC 5724 (Level 4 Diagnostic Tests and Related Services), stating that the costs of this procedure significantly exceed the APC 5723 assignment. The commenter suggested that a higher payment would more closely align with the costs of the resources utilized to perform this test. Response: We thank the commenter for their input. We note that the geometric mean cost (GMC) for CPT code 91040 is around $1,500, and the GMC for APC 5723 is around $537. While this is a significant difference, our claims data show that approximately 70 percent of the costs for this procedure are made up of higher cost items (equipment, drugs, and supplies) that are packaged with the procedure costs. In addition, claims data for CY 2025, show that out of all the claims billed with CPT code 91040 (3,429 total frequency), only 2.7 percent (approximately 95) of those claims were billed with only CPT code 91040. We believe that in addition to the higher costs of the items that are packaged, the costs from the other procedures that are performed with CPT code 91040 have driven up the GMC of CPT code 91040. Based on review of the service and other services in the same APC family, input from CMS medical advisors, and the claims data, we believe that the clinical and resource characteristics of CPT code 91040 are sufficiently like other procedures assigned to APC 5723 and should continue to be assigned to APC 5723. For CY 2025, based on our evaluation, we are finalizing our proposal, without modification, to assign CPT code 91040 to APC 5723. [[Page 94092]] The final CY 2025 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.

30. Esophagogastroduodenoscopy With Optical Endomicroscopy, CPT Code

43252 (APC 5302) An esophagogastroduodenoscopy is a procedure to view the esophagus, stomach, and duodenum by means of a flexible endoscope passed through the mouth. The provider uses an endomicroscopy system to evaluate the structures during this procedure. This procedure is reported with CPT code 43252 (Esophagogastroduodenoscopy, flexible, transoral; with optical endomicroscopy). In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81685), we reassigned CPT code 43252 from APC 5303 (Level 3 Upper GI Procedures) to APC 5302 (Level 2 Upper GI Procedures). In the 2025 OPPS/ASC proposed rule, we proposed to continue to assign this code to APC 5302 with a proposed payment rate of $1,884.11. We received two public comments that disagreed with our proposal. Comment: Both commenters noted that the significant payment reduction for this service could impede access to this service for beneficiaries. One commenter noted that just a few hospital outpatient facilities are offering this procedure and that over 70 percent of cases are performed in ASCs. One commenter stated that CPT code 43252 is similar in clinical intensity, resource utilization and costs to CPT code 0654T (Esophagogastroduodenoscopy, flexible, transnasal; with insertion of intraluminal tube or catheter) which is assigned to APC 5303. This commenter also claimed that some hospitals are underreporting their costs for CPT code 43252. Both commenters requested that CMS reassign CPT code 43252 to APC 5303. Response: We note that the CY 2025 OPPS payment rates are proposed based on available CY 2023 claims data. Based on our latest review of the claims data, we found the geometric mean cost of approximately $1,839.38for CPT code 43252 based on 246 single claims, is consistent with the geometric mean cost of about $1,920.00for APC 5302. We note that the geometric mean cost of APC 5303 is approximately $3,850.67which is about $2,011 more than the geometric mean cost of CPT code 43252. In summary, we are finalizing without modification our proposal to assign CPT code 43252 to APC 5302 for CY 2025. The CY 2025 final payment rate for this code can be found in Addendum B of this final rule with comment period.

31. Extracorporeal Shock Wave Lithotripsy (SWL), 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 CY 2025, the OPPS payment rates are proposed based on available CY 2023 claims data. For the CY 2025 OPPS/ASC proposed rule, we found a total of 26,669 single frequency claims and a geometric mean cost of approximately $3,536 for CPT code 50590. For CY 2025, we proposed to continue to assign CPT code 50590 to APC 5374 (Level 4 Urology and Related Services) with a proposed payment rate of approximately $3,438. Comment: One commenter disagreed with our APC assignment of CPT code 50590 to APC 5374 (Level 4 Urology and Related Services) and suggested that CPT code 50590 should be assigned to APC 5375 (Level 5 Urology and Related Services) like CPT code 52353 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy; with lithotripsy (ureteral catheterization is included)) and CPT code 52356 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy; with lithotripsy including insertion of indwelling ureteral stent (e.g., gibbons or double-j type)). The commenter stated that higher payment for CPT codes 52353 and 52356 has driven service volume toward those codes and away from CPT code 50590. Response: We thank the commenter for the input. We note that, with over 25,000 single claims in CY 2025, the geometric mean cost of CPT code 50590 very closely aligns with the geometric mean cost of the APC to which it is assigned, APC 5374. Furthermore, CPT code's geometric mean cost is well below that of CPT code 52356, which is the primary driver of the geometric mean cost of APC 5375. After consideration of the public comment we received, we are finalizing our proposal without modification for CPT code 50590. Please refer to Table 89 for the final OPPS APC and status indicator assignment for CPT code 50590 for CY 2025. 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] TR27NO24.113 [[Page 94093]]

32. Female Intraurethral Valve-Pump, Insertion and Replacement, CPT

Codes 0596T and 0597T (APC 5372) For CY 2025, we proposed to assign CPT codes 0596T (Temporary female intraurethral valve-pump (i.e., voiding prosthesis); initial insertion, including urethral measurement) and 0597T (Temporary female intraurethral valve-pump (i.e., voiding prosthesis); replacement) to status indicator ``J1'', APC 5372 (Level 2 Urology and Related Services) with a proposed payment rate of $675.64. Comment: Commenters shared support for the proposal to assign CPT code 0597T to APC 5372 and agreed that the proposed assignment to APC 5372 aligns with costs incurred by hospitals to perform this service. Response: We thank commenters for their support. Comment: Commenters, the manufacturer and a trade association, expressed concerns that the proposed assignment of CPT code 0597T to APC 5372 does not sufficiently consider the targeted device cost of $1,885 and is not appropriate from a resource perspective, which the commenters feel may limit access to the procedures. The commenters requested reassignment of CPT code 0596T to APC 5373 (Level 3 Urology and Related Services) with a proposed payment rate of $2,074.53 as they believe that APC 5373 would be appropriate from a clinical and resource perspective and would more appropriately reflect the device costs to hospitals to furnish the service. Response: We thank the commenter for their comment. For this final rule with comment period, we have no claims data for CPT code 0596T for OPPS ratesetting purposes. We continue to believe that CPT code 0596T shares similar clinical characteristics and resource costs to the services assigned to APC 5372. In summary, after consideration of the public comments we received, we are finalizing our proposal, without modification, to continue to assign CPT codes 0596T and 0597T to APC 5372 for CY 2025. 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. Both Addendum A and Addendum B are available via the internet on the CMS website.

33. Fractional Flow Reserve (FFR) With 3D Coronary Mapping, CPT Code

0523T The fractional flow reserve (FFR) with 3D coronary mapping procedure is described by CPT code 0523T (Intraprocedural coronary fractional flow reserve (ffr) with 3d functional mapping of color-coded ffr values for the coronary tree, derived from coronary angiogram data, for real-time review and interpretation of possible atherosclerotic stenosis(es) intervention (list separately in addition to code for primary procedure)). CPT code 0523T became effective January 1, 2019. For CY 2024, CPT code 0523T was assigned the status indicator ``N'' (packaged). Comment: One commenter requested that the packaging exemption for SaaS add-on codes policy should be applied to CPT code 0523T. The commenter further requested that CPT code 0523T be assigned to status indicator ``J1'' (Comprehensive APC) and assigned to APC 5191 (Level 1 Endovascular Procedures) for CY 2025. Response: We note that CPT code 0523T is an add-on code. Add-on codes represent services that are always performed in addition to the primary service or procedure and must never be reported as a stand- alone code. As specified under 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 code 0523T is not paid separately under the OPPS, but instead, has its payment packaged into the payment for the primary code. Under the packaging exemption for SaaS add-on codes (87 FR 72027 to 72035), we adopted a policy that services represented by SaaS add-on codes are not among the ``certain services described by add-on codes'' for which we package payment with the related procedures or services under the regulation at 42 CFR 419.2(b)(18). Specifically, the SaaS CPT add-on codes will be assigned to identical APCs and have the same status indicator assignments as their standalone SaaS codes. As such, the policy exempts SaaS add-on codes for which a standalone SaaS code is separately payable under the OPPS for the identical SaaS service furnished without concurrent imaging and described by the standalone CPT code. In summary, the packaging exemption for SaaS add-on codes policy only exempts SaaS add-on codes when the identical SaaS procedure is also represented by a standalone SaaS code and payable under the OPPS because the procedure requires the same resources regardless of whether it is furnished with or without the imaging service. After consideration of the public comments we received, we are finalizing our proposal without modification for CPT codes 0523T. Please refer to Table 90 below for the final OPPS APC and status indicator assignment for CPT codes 0523T for CY 2025. 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 94094]] [GRAPHIC] [TIFF OMITTED] TR27NO24.114

34. Fractional Flow Reserve Derived From Computed Tomography (FFRCT),

CPT Code 75580 (APC 5724) Fractional Flow Reserve Derived from Computed Tomography (FFRCT), also known by the trade name HeartFlow[supreg], 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[supreg] 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[supreg] 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[supreg] is currently described 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). On January 1, 2024, CPT code 75580 replaced 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). HeartFlow[supreg] was assigned to APC 5724 (Level 4 Diagnostic Tests and Related Services) for CY 2024, and we proposed for CY 2025 to continue to assign HeartFlow[supreg] (CPT code 75580) to APC 5724. Comment: We received one comment stating that several of the Medicare Administrative Contractors (MACs) have an edit in place that prohibits the use of the cardiology revenue code (0480) when billing CPT code 75580 as evidenced by claims denials with ``Invalid Revenue Code'' errors. The commenter asked that we provide guidance that explicitly allows CPT code 75580 to be billed with any appropriate revenue code just as we did for cardiac CT services. (See January 2024 Update (Transmittal 12421, Change Request 13488, dated December 21, 2023.) Response: Based on the information the commenter provided, we were able to identify the outdated edit and remove it. Facilities may bill CPT 75580 with any appropriate revenue code. As a reminder, it is longstanding CMS policy that hospital outpatient facilities are responsible for reporting the appropriate cost centers and revenue codes on claims. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing Manual, CMS ``does not instruct hospitals on the assignment of HCPCS codes to revenue codes for services provided under OPPS since hospitals' assignment of cost vary. Where explicit instructions are not provided, 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.'' In addition to referring readers to the Medicare Claims Processing Manual, we will be providing public education and instruction through the CMS Medicare Learning Network (MLN). Comment: Multiple commenters supported our proposal to continue to assign CPT code 75580 to APC 5724 for CY 2025. Response: We thank the commenters for their input and for their support of our policy. After consideration of the public comments we received, we are finalizing our proposal without modification. 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.

35. Gastric Electrophysiology Mapping With Simultaneously Validated

Patient System Profiling (GEMS) Service, CPT Code 0868T (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). Effective July 1, 2024, HCPCS code C9787 was deleted and replaced by CPT code 0868T (High-resolution gastric electrophysiology mapping with simultaneous patient symptom profiling, with interpretation and report). CMS assigned CPT code 0868T to APC 5723, the same APC to which its predecessor code, HCPCS code C9787, was assigned. For CY 2025, CMS proposed to continue to assign CPT code 0868T to APC 5723 with a proposed payment rate of $527.44 for CY 2025. Comment: We received several comments, including a comment from the manufacturer, requesting that we reassign CPT code 0868T from APC 5723 to APC 1520 (New Technology--Level 20 ($1801-$1900)) with a payment rate of $1850.50, based on the purported cost of the technology and the [[Page 94095]] fact that it is a new service with a low volume of claims. The commenters explained that the proposed payment rate for CPT code 0868T would not cover the costs of the device, supplies, and clinical staff expenses. One commenter explained that the available claims data supports the conclusion that the proposed APC placement is inadequate. Specifically, the commenter pointed to one single frequency claim that shows a geometric mean cost of approximately $1,800 to demonstrate that CPT code 0868T should be assigned to APC 1520. The commenters suggested that if CMS did not agree to finalize an assignment to APC 1520, they would then suggest that CPT code 0868T be assigned to APC 5724 (Level 4 Diagnostic Tests and Related Services) with a proposed payment rate of approximately $1,000 or APC 5302 (Level 2 Upper GI Procedures) with a proposed payment rate of approximately $1,800 for CY 2025. Finally, one commenter drew differences between the clinical characteristics of CPT code 0868T and the other services assigned to APC 5723, including CPT code 0799T. For example, the commenter stated that CPT code 0799T involves a low-resolution electrode patch generating data comparable to traditional legacy electrogastrography, whereas C9787/0868T uses a high-resolution 64-lead array and sophisticated software to provide detailed multimodal diagnostic data. Response: We appreciate the commenters' input. We disagree with the APC assignments recommended by commenters based on the purported costs of the service. Since we issued the proposed rule, additional claims data have been processed which, we believe, confirm that the proposed APC assignment is appropriate for HCPCS code C9787/CPT code 0868T for CY 2025. Our analysis of the available claims data demonstrates that the geometric mean cost for HCPCS code C9787 is approximately $310 based on 5 single frequency claims, which is below the geometric mean cost of $530 for APC 5723, but within the range of geometric mean costs of services assigned to APC 5723 which vary from approximately $150 to $2000. We note that given the effective date of payment, we have only one year of claims data for HCPCS code C9787/CPT code 0868T with an extremely low level of single frequency claims. We will continue to monitor the claims data and adjust the APC placement for CPT code 0868T, based on the claims data in future rulemaking. Additionally, based on our review of the technology used as part of the service, input from CMS medical advisors, and review of all other information available to us, we continue to believe that CPT code 0868T is similar to services assigned to APC 5723. Based on the resource and clinical similarities to other services assigned to APC 5723, including CPT code 0779T (Gi myoelectrical actv study), as well as the available claims data, we believe that our proposal to assign CPT code 0868T is appropriate for CY 2025. After consideration of the public comments, we are finalizing our proposal without modification to continue to assign CPT code 0868T to APC 5723. The final CY 2025 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.

36. Hernia Repair Procedures, CPT Codes 49593, 49595, and 49615 (APCs

5342 and 5361) Effective January 1, 2023, the AMA created new abdominal hernia repair CPT codes 49593 (Repair of anterior abdominal hernia(s) (i.e., epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), initial, including implantation of mesh or other prosthesis when performed, total length of defect(s); 3 cm to 10 cm, reducible), 49595 (Repair of anterior abdominal hernia(s) (i.e., epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), initial, including implantation of mesh or other prosthesis when performed, total length of defect(s); greater than 10 cm, reducible), and 49615 (Repair of anterior abdominal hernia(s) (i.e., epigastric, incisional, ventral, umbilical, spigelian), any approach (i.e., open, laparoscopic, robotic), recurrent, including implantation of mesh or other prosthesis when performed, total length of defect(s); 3 cm to 10 cm, reducible). For CY 2023, we assigned these codes to APC 5341 (Level 1 Abdominal/ Peritoneal/Biliary and Related Procedures). For CY 2025, we proposed to reassign these codes to APC 5342 (Level 2 Abdominal/Peritoneal/Biliary and Related Procedures) to resolve a 2-times violation for APC 5341. Comment: We received two comments supporting the reassignment of CPT codes 49593, 49595, and 49615 to APC 5342 for CY 2025. Response: We thank the commenters for their support. Comment: The two commenters recommended that we also reassign CPT codes 49650 (Laparoscopy, surgical; repair initial inguinal hernia) and 49651 (Laparoscopy, surgical; repair recurrent inguinal hernia) from APC 5361 (Level 1 Laparoscopy and Related Services) to APC 5342. The commenters noted that with the addition of the three ventral hernia procedures, APC 5342 would now contain both open and laparoscopic surgical procedures. Response: We thank the commenter for their suggestions. After further clinical review, we continue to believe that CPT codes 49650 and 49651 are still appropriately assigned to APC 5361 based on clinical and resource homogeneity to the procedures in the APC 5361. After consideration of the public comment we received, we are finalizing our proposal without modification to reassign CPT codes 49593, 49595 and 49615 to APC 5342 (Level 2 Abdominal/Peritoneal/ Biliary and Related Procedures). We are also finalizing our proposal without modification to continue to assign CPT codes 49650 and 49651 to APC 5361 (Level 1 Laparoscopy and Related Services). Table 91 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 94096]] [GRAPHIC] [TIFF OMITTED] TR27NO24.115

37. 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 on January 1, 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 APC 5733 (Level 3 Minor Procedures). In the CY 2023 claims data, there were 370 (single frequency) claims for CPT code 92229 and the geometric mean for the service was $28.53. For CY 2025, we proposed to maintain CPT code 92229 in APC 5733 (Level 3 Minor Procedures) and wait for more claims data to be available before adjusting the payment rates for this service. Comment: We received several comments supporting our decision to maintain CPT 92229 in APC 5733 (Level 3 Minor Procedures). Commenters noted that this service provides potentially sight saving technology to beneficiaries with diabetes in rural and underserved communities. Response: We thank the commenters for their input. Comment: We received one comment requesting that CPT code 92229 be removed from the Deficit Reduction Act (DRA) cap. Response: We thank the commenter for their input, but we note that this comment is out of scope for purposes of this CY 2025 OPPS/ASC final rule with comment period. After consideration of the public comments we received, we are finalizing our proposal without modification to assign CPT code 92229 to APC 5733. 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.

38. Implantable Cardiac Alert System, CPT Codes 0525T and 0527T (APCs

5224 and 5222) The implantable cardiac alert system is a cardiac monitoring and alerting device to detect acute coronary syndrome (ACS) events and alerts the patient to seek urgent medical attention. The CPT codes 0525T (Insertion or replacement of intracardiac ischemia monitoring system, including testing of the lead and monitor, initial system programming, and imaging supervision and interpretation; complete system (electrode and implantable monitor)) and 0527T (Insertion or replacement of intracardiac ischemia monitoring system, including testing of the lead and monitor, initial system programming, and imaging supervision and interpretation; implantable monitor only) became effective January 1, 2019. For CY 2025, the OPPS payment rates are proposed based on available CY 2023 claims data. For the CY 2025 OPPS/ASC proposed rule, based on our [[Page 94097]] analysis of claims data, we found a total of 15 single frequency claims and an estimated geometric mean cost of $3,244 for CPT code 0525T and a total of three single frequency claims and an estimated geometric mean cost of $3,433 for CPT code 0527T. For CY 2025, we proposed to continue to assign CPT code 0525T to Level 3 Pacemaker and Similar Procedures (APC 5223) and CPT code 0527T to Level 2 Pacemaker and Similar Procedures (APC 5222). Comment: One Commenter disagreed with our APC's assignments of CPT codes 0525T and 0527T, suggesting that we did not account for the cost of the device represented by HCPCS code C1833 in the proposed rule. The commenter also stated that we erroneously assigned the status indicator of ``H'' to HCPCS code C1833 in the CY 2025 OPPS/ASC proposed rule. The commenter noted the Transitional Pass-Through period for C1833 expires December 31, 2024, and that HCPCS code C1833 should have been assigned the status indicator of ``N'' for CY 2025. Additionally, the commenter argued that the proposed payment rates for CPT codes 0525T and 0527T are insufficient to cover the procedures' cost because we did not account for the device cost in the proposed CY 2025 payment rates. They claimed that the procedures represented by 0525T and 0527T are similar procedures and should both be assigned to APC 5231 (Level 1 ICD and Similar Procedures). Response: We appreciate the commenter pointing out that HCPCS code C1833's Transitional Pass-through Status expires December 31, 2024. Therefore, we are revising the HCPCS code C1833's status indicator to ``N'' (packaged) for CY 2025. We agree with the commenter the CY 2025 proposed APC assignments for 0525T and 0527T erroneously omitted the device cost (HCPCS code C1833) associated with these procedures. With the updated final rule data including the HCPCS code C1833 device cost, the revised geometric mean cost for CPT code 0525T is approximately $15,167 and the geometric mean cost for 0527T is approximately $7,242. Therefore, we believe an appropriate APC assignment for CPT code 0525T would be APC 5224 (Level 4 Pacemaker and Similar Procedures); and an appropriate assignment for CPT code 0527T would be APC 5222 (Level 2 Pacemaker and Similar Procedures). We disagree with the commenter that CPT code 0525T is similar clinically and in resource costs to CPT code 0527T. We note that CPT code 0525T is for insertion of the complete system while CPT code 0527T is for insertion of the implantable monitor only. After consideration of the public comments we received, we are finalizing a revision to our proposed APC assignment for CPT code 0525T and assigning this code to APC 5224 (Level 4 Pacemaker and Similar Procedures). We are finalizing the assignment of CPT code 0527T to APC 5222 (Level 2 Pacemaker and Similar Procedures) as proposed. Please refer to Table 92 for the final OPPS APC and status indicator assignment for CPT codes 0525T, 0527T and C1833 for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 94098]] [GRAPHIC] [TIFF OMITTED] TR27NO24.116

39. Implantable Glucose Monitoring System, CPT Codes 0446T and 0448T

(APC 5054) In 2017, the AMA CPT Editorial Panel established CPT codes 0446T and 0448T. CPT code 0446T (Creation of subcutaneous pocket with insertion of implantable interstitial glucose sensor, including system activation and patient training) and CPT code 0448T (Removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new implantable sensor, including system activation) describe an implantable glucose sensor for diabetic patients. The current codes are used to describe both 90-day and 180-day sensors. The FDA recently approved a 365-day sensor that is not currently on the market. For CY 2025, we proposed to maintain both CPT codes in APC 5054 (Level 4 Skin Procedures) with a status indicator of ``T'' (Procedure or Service, Multiple Procedure Reduction Applies; Paid under OPPS; separate APC payment.). Comment: We received one comment from the manufacturer requesting that we reassign CPT codes 0446T and 0448T from APC 5054 (Level 4 Skin Procedures) to APC 1531 (New Technology--Level 31 ($6501-$7000)) with a payment of $6,750.50 to reflect the increased expense of the implantable sensor that has quadrupled the life of the 90-day sensor. The manufacturer reiterated the value of the longer sensor duration, including fewer insertion and removal procedures and increased adherence to therapy. Response: We appreciate the request of the commenter and understand the implicated value that a longer life sensor brings to Medicare beneficiaries. Because the current CPT codes do not designate the increased battery life of the sensor, we believe it is more appropriate to create 2 new HCPCS G codes effective January 1, 2025 to describe the implantable interstitial glucose sensor with a 365-day battery life than to make APC reassignments and potentially overpay for the current codes that could be used to describe the 90-day, 180-day, or 365-day sensor. Specifically, we created the following G codes to describe the 365-day sensor: G0564 (Creation of subcutaneous pocket with insertion of 365 day implantable interstitial glucose sensor, including system activation and patient training); and G0565 (Removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new 365 day implantable sensor, including system activation). The manufacturer asserts the supply costs of the 365-day system will be equivalent to two 180-day systems or four 90-day systems. While we agree that there would be inherently increased costs to the new technology of a 365-day system, we do not agree that those costs would be 4 times more than the 90-day system. After reviewing the device and procedure and obtaining input from our medical officers, we are assigning HCPCS codes G0564 and G0565 to APC 1561 (New Technology--Level 24 ($3001-$3500)) with a payment rate of $3,250.50. [[Page 94099]] We currently have very little claims information available for CPT codes 0446T and 0448T as there has only been 1 single frequency claim for CPT 0448T (with a geometric mean cost of around $1,320) and no single frequency claims for 0446T. The geometric mean cost for APC 5054 (Level 4 Skin Procedures) is around $1,850 so we believe APC 5054 is an appropriate assignment. We will continue to monitor these codes as we gather adequate claim information and other relevant clinical information that would be useful in determining appropriate APC assignments. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 0446T and 0448T to APC 5054 (Level 4 Skin Procedures) for CY 2025 and finalizing APC assignments for G0564 and G0565. The final CY 2025 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.

40. Integrated Sacral Neurostimulators, CPT Code 0786T

Effective January 1, 2024, the CPT Editorial Panel separated integrated from non-integrated (i.e., traditional) sacral neurostimulator procedure by establishing new CPT code, 0786T to report procedures using integrated sacral neurostimulator devices, while CPT code 64590 was updated to reflect the use of traditional technology: 0786T: Insertion or replacement of percutaneous electrode array, sacral, with integrated neurostimulator, including imaging guidance, when performed. 64590: Insertion or replacement of peripheral, sacral, or gastric neurostimulator pulse generator or receiver, requiring pocket creation and connection between electrode array and pulse generator or receiver In the CY 2025 OPPS/ASC proposed rule Addendum B, we proposed to continue to assign CPT code 0786T to APC 5463 (Level 3 Neurostimulator and Related Procedures) with a proposed payment rate of $13,029.81. We received several comments related to the proposal. Comment: One commenter disagreed with our proposal. The commenter stated that the proposed assignment for this technology would reduce reimbursement and limit access for Medicare and Medicaid patients seeking care in the outpatient surgery setting. The commenter thought that this decision may have been based on the concept that the Neuspera system is an integrated system, requiring no intra-operative connection. Although physical connections are not required, they stated a considerable amount of time and effort is expended on creating wireless connections and re-positioning the device once partially deployed. One commenter asserted that the integrated sacral neuromodulation system (SNM) represents a disruptive technology that should improve patient satisfaction, with similar efficacy, lower risk, and as a ``one and done'' procedure that will reduce the need for 2-3 devices per patient to only one Neuspera devices per patient. The commenter stated the lead placement takes the majority of the procedure time, while the implantable pulse generator (IPG) placement requires very little time and expertise. Given their claim that the integrated system is nearly identical to the current non-integrated systems, they requested it should be paid on par with the current non-integrated system. Other commenters maintained that the integrated SNM system anticipated to reach the market in 2025 has time and resources substantially equivalent to those for traditional SNM systems. Given this, they noted keeping CPT code 0786T in a lower APC with a lower device-intensive designation than traditional SNM systems will create an economic barrier and restrict hospitals and ASCs from offering this new less invasive form of SNM to patients. Several commenters urged CMS to reassign CPT code 0786T to APC 5464 (Level 4 Neurostimulator and Related Procedures) to reflect the most accurate procedure and cost information related to this novel sacral neuromodulation system. They stated that there is a high degree of parity and similarity in time, work, staffing, costs, and resources required for the Neuspera procedure, compared to traditional sacral neuromodulation systems, which are currently assigned to APC 5464. The commenters also pointed out that if CMS is not willing to reassign CPT code 0786T to APC 5464, status indicator ``E1'' may provide CMS the ability to postpone APC assignment until there is FDA cleared technology to make a decision. Currently no FDA approved ``integrated'' sacral neuromodulation system exists. Response: We proposed to continue to assign CPT code 0786T to APC 5463 for CY 2025, based on input from our clinicians and based on our evaluation of the code. We inadvertently listed Neuspera integrated sacral nerve stimulation system as receiving FDA-approval. However, it is still pending FDA approval and therefore, we agree with most of the commenters who recommended to reassign CPT code 0786T to status indicator ``E1'' until FDA approval has been received. In summary, after consideration of the public comments that we received, we are finalizing our proposal with modification and are reassigning CPT code 0786T from APC 5463 to status indicator ``E1'' (Not covered by any Medicare outpatient benefit category; Statutorily excluded by Medicare; Not reasonable and necessary; Not paid by Medicare when submitted on outpatient claims (any outpatient bill type)) for CY 2025 because this service is not yet FDA approved. 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.

41. Laparoscopic Appendectomy, CPT Code 44970 (APC 5361)

CPT code 44970 (Laparoscopy, surgical, appendectomy) describes the procedure for laparoscopic appendectomy. Using CY 2023 claims data, CPT code 44970 had a geometric mean cost of $6,499.86 in the CY 2025 OPPS/ ASC proposed rule. For CY 2025, we believed this was still appropriately assigned to APC 5361 (Level 1 Laparoscopy and Related Services), which had a proposed payment rate of $5,798.13. Therefore, we proposed to continue assigning CPT code 44970 to APC 5361. Comment: We received one comment requesting that we reassign CPT code 44970 to APC 5342 (Level 2 Abdominal/Peritoneal/Biliary and Related Procedures). The commenter argued that CPT code 44970 had clinical homogeneity and resource utilization similar to CPT code 44950 (Appendectomy), which is currently assigned to APC 5342. Response: We thank the commenter for their input. CPT code 44970 has an updated GMC of $6,404.30 in the final rule data. While this is closer to the payment rate for APC 5342, after clinical review of this procedure, we did not find APC 5342 to be the clinically appropriate APC family for CPT code 44970. We continue to believe that this procedure belongs in the Laparoscopy and Related Procedures family. After consideration of the public comment we received, we are finalizing our proposal without modification to continue to assign CPT code 44970 to APC 5361 (Level 1 Laparoscopy and Related Services). Table 93 shows the [[Page 94100]] 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. [GRAPHIC] [TIFF OMITTED] TR27NO24.117

42. Litholapaxy Procedure, CPT Code 52318 (APC 5374)

Litholapaxy is a procedure that involves crushing bladder stones and extracting the fragmented stones. CPT code 52318 (Litholapaxy: crushing or fragmentation of calculus by any means in bladder and removal of fragments; complicated or large (over 2.5 cm)) became effective January 1, 1985. For CY 2025, OPPS payment rates are proposed based on available CY 2023 claims data. For CY 2025, based on our analysis of claims data, we found a total of 4,215 single frequency claims and a geometric mean cost of approximately $4,298 for CPT code 52318. For CY 2025, we proposed to continue to assign CPT code 52318 to Level 4 Urology and Related Services (APC 5374) with a proposed payment rate of approximately $3,438. Comment: One commenter requested the APC assignment of CPT code 52318 to Level 5 Urology and Related Services (APC 5375). The commenter stated that the complexity and resources required for CPT code 52318 is comparable to CPT code 52601 (Transurethral electrosurgical resection of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included)), which is assigned to APC 5375. Moreover, the commenter alleged that CPT code 52318 is two times greater than the lowest geometric mean of CPT code 54670 (Suture or repair of testicular injury) in APC 5375, which is a two times rule violation. Response: We appreciate the commenter's recommendation regarding the APC assignment of CPT code 52318, but we disagree that the complexity and resources required for CPT code 52318 are comparable to CPT code 52601. Based on the claims data, we believe that CPT code 52318 fits more appropriately in APC 5374, rather than in APC 5375, based on resource cost and clinical similarity to the procedures in APC 5374. Furthermore, CPT codes 52318 and 54670 are currently assigned to APC 5374 (Level 4 Urology and Related Services). We note that APC 5374 does not currently have a 2 times rule violation in the final rule data. In addition, both CPT codes 52318 and 54670 do not meet the requirements for cost significance for 2 times rule violation purposes, under the requirements described in section III.B.2. of this final rule with comment period. We have reviewed the codes' geometric mean cost based on the available CY 2023 claims data within APC 5374 and believe that their current APC assignment continues to be appropriate. After consideration of the public comment we received, we are finalizing our proposal without modification for CPT code 52318 to be reassigned to APC 5374 (Level 4 Urology and Related Services). Please refer to Table 94 for the final OPPS APC and status indicator assignment for CPT code 52318 for CY 2025. 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] TR27NO24.118

43. LIXELLE[supreg] Apheresis

LIXELLE[supreg] [beta]2-microglobulin Apheresis Column is indicated for use in the treatment of dialysis-related amyloidosis (DRA), a disease that affects people with end-stage renal disease (ESRD). DRA is a metabolic disorder from the failure of the kidney to filter and remove [beta]2-microglobulin, typically from chronic hemodialysis (typically 5 years or longer). The LIXELLE[supreg] device is used in an apheresis procedure that selectively removes [beta]2-microglobulin from circulating blood and is used pursuant to a physician prescription in conjunction with hemodialysis. It is intended to be used at each hemodialysis session (that is, frequency [[Page 94101]] 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). For CY 2025, there are currently no specific HCPCS or CPT codes that represent the LIXELLE[supreg] apheresis service. Comment: We received one comment, from the manufacturer, requesting CMS provide reimbursement for LIXELLE[supreg] apheresis procedure under the ESRD payment system or the OPPS to benefit patients with DRA. Specifically, the commenter requested that CMS provide separate payment under the OPPS for the procedure, and offered the following options: (1) establish a new HCPCS C code or G code for the LIXELLE[supreg] 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[supreg] device through CPT code 36516 (Therapeutic apheresis with extracorporeal immunoadsorption, selective adsorption or selective filtration and plasma reinfusion), assigned to APC 5243 (Level 3 Blood Product Exchange and Related Services) for CY 2025, and require the use of a modifier or add-on code when the LIXELLE[supreg] apheresis procedure is billed to reduce the procedure payment APC 5242 (Level 2 Blood Product Exchange and Related Services) payment rate; or (3) allow separate payment for the dialysis performed as part of LIXELLE[supreg] 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 2025 and require the use of a modifier or add-on code to provide additional payment beyond that provided for APC 5401; or (4) assign CPT 90947 (Dialysis procedure other than hemodialysis (e.g., peritoneal dialysis, hemofiltration, or other continuous renal replacement therapies) requiring repeated evaluations by a physician or other qualified health care professional, with or without substantial revision of dialysis prescription) to APC 5242 (Level 2 Blood Product Exchange and Related Services). The commenter also noted the FDA has approved a clarification to the Instructions for Use (IFU) since last year's comment and rulemaking. The IFU for LIXELLE[supreg] expands the list of personnel who can supervise the patient while connected to the extracorporeal system to include not only a physician, but a qualified health care professional such as a physician assistant, nurse practitioner, or registered nurse who is qualified to supervise hemodialysis procedures. Response: We appreciate the thoughtful recommendations and will consider them for future rulemaking. We note this complex, ongoing issue is still under consideration and continues to merit a thorough evaluation to ensure an appropriate Medicare benefit category and payment pathway for the service is determined.

44. Low Ejection Fraction AI-ECG Service, CPT Codes 0764T and 0765T

(APC 5734) The low ejection fraction AI-ECG Service is intended to aid in screening for Left Ventricular Ejection Fraction (LVEF) less than or equal to 40 percent in adults at risk for heart failure. The low ejection fraction AI-ECG Service is an algorithmic SaaS service that aims to detect hidden diseases using algorithms to enhance and improve interventional procedures through real-time AI insights. CPT codes 0764T (Assistive algorithmic electrocardiogram risk-based assessment for cardiac dysfunction (e.g., low ejection fraction, pulmonary hypertension, hypertrophic cardiomyopathy); related to concurrently performed electrocardiogram (List separately in addition to code for primary procedure)) and 0765T (Assistive algorithmic electrocardiogram risk-based assessment for cardiac dysfunction (e.g., low ejection fraction, pulmonary hypertension, hypertrophic cardiomyopathy); related to previously performed electrocardiogram) became effective January 1, 2023 and were assigned to status indicator ``E1'' (Not paid by Medicare when submitted on outpatient claims). For CY 2025, we proposed that CPT codes 0764T and 0765T continue to be assigned to status indicator E1. Comment: One Commenter provided documentation that AI-ECG has been FDA approved on September 28, 2023. The commenter requested separate payment for the low ejection fraction AI-ECG service for CY 2025. In addition, the commenter referenced our CY 2023 packaging exemption for SaaS add-on codes policy and requested separate payment for the add-on CPT code 0764T. Response: We appreciate the commenter providing the FDA documentation for the AI-ECG approval. We agree that CPT code 0765T should be payable for CY 2025. Consistent with our SaaS Add-on Codes policy, CPT code 0764T, the add-on code for the low ejection fraction AI-ECG service would be assigned to the identical APC and status indicator to CPT code 0765T, the standalone code for the same service. After consideration of the public comments we received, we are finalizing revised status indicator and APC assignments for CPT codes 0764T and 0765T. Please refer to Table 95 for the final OPPS APC and status indicator assignment for HCPCS codes 0764T and 0765T for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 94102]] [GRAPHIC] [TIFF OMITTED] TR27NO24.119

45. Lower Esophageal Myotomy (POEM), CPT 43497 (APC 5331)

CPT code 43497 (Lower esophageal myotomy, transoral (i.e., peroral endoscopic myotomy [POEM]) describes a minimally invasive endoscopic procedure that treats swallowing disorders caused by muscle problems in the esophagus. For CY 2025, we proposed to assign CPT code 43497 to APC 5331 (Complex GI Procedures) with a proposed payment rate of around $5,838. Comment: We received one comment requesting that we reassign CPT code 43497 to APC 5361 (Level 1 Laparoscopy and Related Services) with a proposed payment of around $5,798. The commenter stated that the procedure utilizes techniques that are surgical in nature and that APC 5361 would be a more appropriate APC assignment, based on clinical homogeneity and resource utilization with other services in APC 5361. Response: 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 43497 has clinical and resource homogeneity to other services in APC 5361 such that it should be assigned to APC 5361. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 43497 to APC 5331 for CY 2025. The final CY 2025 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.

46. Magnetic Resonance Exam Safety Procedures, CPT Codes 76014 Through

76019 (APCs 5521, 5523, 5731, 5733, and 5742) For CY 2025, the AMA CPT Editorial Panel created six codes to report magnetic resonance (MR) examination safety procedures, effective January 1, 2025. The new codes did not have a predecessor code or a one-to-one match to an existing code. When determining the proposed status indicators and APC assignments for CY 2025, we reviewed the clinical and resource characteristics of the procedures, considered input from our medical advisors, and reviewed existing APC classifications to identify similar and closely related procedures. The codes, their long descriptors, and their proposed CY 2025 OPPS status indicators and APC assignments are listed in Table 96. We note that CPT codes 76014, 76015, 76016, 76017, 76018, and 76019 were listed as placeholder codes 7XX00, 7XX01, 7XX02, 7XX03, 7XX04, and 7XX05 respectively, in OPPS Addendum B and Addendum O that were released with the CY 2025 OPPS/ASC proposed rule. Because we had not received the final CPT code numbers from AMA for the new codes that would be effective January 1, 2025, 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. BILLING CODE 4120-01-P [[Page 94103]] [GRAPHIC] [TIFF OMITTED] TR27NO24.120 BILLING CODE 4120-01-C Comment: Some commenters disagreed with the proposed assignments for the five separately payable codes and provided [[Page 94104]] recommendations for APC reassignments. They stated that the proposed APC assignments for the new codes would be insufficient to cover the cost of furnishing the procedures and would impact beneficiary access. Commenters detailed that the proposed APC assignments for CPT codes 76017, 76018, and 76019 did not reflect the facility costs associated with these procedures, including additional staff time, MR room time and clinical resources for planning, preparation, and patient positioning. The commenters requested that CMS reassign CPT codes 76014 (placeholder code 7XX00) and 76016 (placeholder code 7XX05) to APC 5611(Level 1 Therapeutic Radiation Treatment Preparation) with a proposed payment rate of $89.12. Commenters requested that CMS reassign CPT codes 76017 (placeholder code 7XX03) and 76019 (placeholder code 7XX05) to APC 5612 (Level 2 Therapeutic Radiation Treatment Preparation; proposed payment rate of around $370). Commenters shared that CPT codes 76017 (placeholder code 7XX03) and 76019 (placeholder code 7XX05) require additional staff time and clinical resources for planning, preparation, and positioning which warrants reassignment to APC 5612. One commenter requested that CMS reassign CPT code 76018 (placeholder code 7XX04) to APC 5612 (Level 2 Therapeutic Radiation Treatment Preparation; proposed payment rate of around $370), Another commenter requested a reassignment of CPT code 76018 to APC 5742 (Level 2 Electronic Analysis of Devices; proposed payment rate of around $92). The commenter stated that CPT code 76018 involves interrogation and programming of an implanted device to protect the device and patient against interactions with the MRI scanner and would therefore fit well within APC 5612. Response: We thank the commenters for their feedback and recommendations. In determining the appropriate APC placement for new codes, we 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; and information from interested specialty societies. We evaluated the recommendations, modeled the suggestions, analyzed the cost results of the suggested APC reassignments, and received additional input from our medical advisors. Because we believe that the services assigned to the Therapeutic Radiation Treatment Preparation APC family have higher degrees of technicality, require higher levels of trained professional staff, and therefore have additional facility costs beyond those described by the CPT codes 76014 through 76019, we disagree with the commenter requests to assign these CPT codes to APCs 5611 and 5612. And while we recognize that there is not currently a one-to-one match to crosswalk to the new codes, we based the proposed APC assignments for CPT codes 76014, 76016, and 76019 on crosswalks to CPT codes that have similar service and resource elements, as well as required staff, to the new codes. Specifically, we continue to believe that: CPT code 76014 is similar to the service described by CPT code 0521T (Interrogation device evaluation (in person) with analysis, review and report, includes connection, recording, and disconnection per patient encounter, wireless cardiac stimulator for left ventricular pacing), which is assigned to APC 5731. CPT code 76016 is similar to the service described by CPT code 77091 (Trabecular bone score (tbs), structural condition of the bone microarchitecture; technical calculation only), which is assigned to APC 5521. CPT code 76019 is similar to CPT code 29520 (Strapping; hip), which is assigned to APC 5733. After consideration of the public comments, our review of CPT code 76017 identified procedures in APC 5523 (Level 3 Imaging without Contrast) that we believe better align with the clinical characteristics and resources required for CPT code 76017, including CPT code 73718 (Magnetic resonance (e.g., proton) imaging, lower extremity other than joint; without contrast material(s)). After further input from CMS medical advisors, we believe that it may be appropriate to assign CPT code 76017 to APC 5523. Additionally, we believe that we have identified additional procedures in APC 5742 that share similar resource and clinical characteristics with CPT code 76018. Specifically, we believe that CPT code 76018 shares resource and clinical similarities to the service described by CPT code 29125 (Application of short arm splint (forearm to hand); static). Based on our assessment, we believe it appropriate to assign CPT code 76018 to APC 5742, based on shared resource and clinical characteristics. In summary, we believe that the below assignment of the new codes in Table 97 are the most appropriate, in terms of clinical and resource homogeneity. We note that we review our claims data on an annual basis to establish the OPPS payment rates and we will reevaluate the status indicator and APC assignments annually. After consideration of the public comments we received, we are finalizing our proposal with modification for CPT codes 76014 through 76019. Table 97 shows the finalized status indicators and APC assignments for all of the procedure codes. The final CY 2025 payment rates 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. BILLING CODE 4120-01-P [[Page 94105]] [GRAPHIC] [TIFF OMITTED] TR27NO24.121 [[Page 94106]] BILLING CODE 4120-01-C

47. MindMotion GO Neurorehabilitative Remote Therapy Service, CPT Code

0733T (APC 1505) Effective July 1, 2022, the AMA established CPT code 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) to describe the procedure associated with the use of MindMotion GO, which provides remote real-time, motion capture-based neurorehabilitative therapy. In the CY 2025 OPPS/ASC proposed rule, CMS proposed to continue to assign CPT code 0733T to APC 5741 (Level 1 Electronic Analysis of Devices) with a proposed payment rate of $36.90, due to its similarity to CPT code 98976 (Remote therapeutic monitoring (e.g., therapy adherence, therapy response); device(s) supply with scheduled (e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor respiratory system, each 30 days). Comment: We received one comment from the manufacturer of MindMotion GO requesting that CMS reassign CPT code 0733T to APC 1510 (New Technology--Level 10 ($801-$900)). The commenter stated that the resource costs of this service are $849 and that the MindMotion GO technology will not be commercially available until early 2025, so there is currently no claims data available to assign this service to a clinical APC. The commenter also believed that CPT code 0733T was not clinically homogeneous with APC 5741 as the procedures in the APC are for monitoring services, while CPT code 0733T also describes a device used primarily for treatment of neurological conditions. Response: We thank the commenter for their input. We agree with the commenter that the current assignment of APC 5741 would result in too low of a payment for CPT code 0733T. After further review, we believe this procedure is similar to the procedure described by CPT code 0693T (Comprehensive full body computer-based markerless 3d kinematic and kinetic motion analysis and report), which describes technology for DARI Motion. CPT code 0693T is currently assigned to APC 1505 (New Technology--Level 5 ($301--$400)). Therefore, we are reassigning CPT code 0733T to APC 1505 until we are able to obtain claims data for this procedure. After consideration of the public comment we received, we are finalizing our proposal with modification to reassign CPT code 0733T to APC 1505 (New Technology--Level 5 ($301-$400)). Table 98 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. [GRAPHIC] [TIFF OMITTED] TR27NO24.122

48. 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 2025, 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 2025 OPPS update. Comment: Several commenters supported the assignment of HCPCS code 0737T (Xenograft implantation into the articular surface) to APC 5115 (Level 5 Musculoskeletal Procedures) and recommended that we finalize the assignment in the CY 2025 OPPS. Response: We appreciate the commenters' support of our proposal. We agree and are finalizing the proposed assignment of HCPCS code 0737T (Xenograft implantation into the articular surface) to APC 5115 (Level 5 Musculoskeletal Procedures). We refer [[Page 94107]] readers to section III.E.67 of this final rule with comment period for a detailed discussion of this issue. Comment: A commenter supported the continued assignment of 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). Response: We appreciate the commenter's support of our proposal. We agree and are finalizing the proposed assignment of 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). We refer readers to section III.E.11. of this final rule with comment period for a detailed discussion of this issue. Comment: A few commenters recommended that CMS consider the creation of additional musculoskeletal APC levels. Commenters noted that additional APCs should be considered with the goal of reducing payment gaps and volatility, while aligning cost and clinical homogeneity in the APCs. One commenter recommended that an additional APC level be considered between the current levels 4 and 5 with costs ranging from $7,000 to $12,000. Another commenter requested that we create an additional Musculoskeletal APC level from codes currently in APC 5116 (Level 6 Musculoskeletal Procedures) with geometric mean costs above $22,000, while moving codes with geomean costs above $14,000 in the current level 5 APC to the level 6 APC. Response: We appreciate the commenters' recommendations. We also appreciate the goal of developing APC levels that properly group procedures by clinical and resource similarity. At this time, we believe the six-level structure for the Musculoskeletal APCs that we proposed continues to provide an appropriate distinction between the resource costs at each level and clinical homogeneity and are therefore finalizing that six-level structure for the Musculoskeletal Procedures APC series in the CY 2025 OPPS. However, we will take these comments into consideration for future rulemaking and continue to monitor the claims data as they are available. After consideration of the public comments, we are finalizing our proposal to maintain the six-level Musculoskeletal Procedures APC structure. We are also finalizing the assignment of HCPCS code 0737T (Xenograft implantation into the articular surface) to APC 5115 and 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 for the CY 2025 OPPS.

49. Noncontact Near-Infrared (NIR) Spectroscopy, CPT 0640T (APC 5732)

Effective CY 2024, there are three codes that describe the service related to NIR spectroscopy: CPT codes 0640T (Noncontact near-infrared spectroscopy (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue oxygenation), other than for screening for peripheral arterial disease, image acquisition, interpretation, and report; first anatomic site, 0859T (Noncontact near-infrared spectroscopy (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue oxygenation), other than for screening for peripheral arterial disease, image acquisition, interpretation, and report; each additional anatomic site (list separately in addition to code for primary procedure)), and 0860T (Noncontact near-infrared spectroscopy (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue oxygenation), for screening for peripheral arterial disease, including provocative maneuvers, image acquisition, interpretation, and report, one or both lower extremities). Only CPT code 0640T is separately paid under the OPPS. For CY 2025, CMS proposed to assign CPT code 0640T to APC 5732 (Level 2 Minor Procedures) and status indicator ``S'' with a $39 payment rate. Comment: We received one comment regarding the proposed APC assignment for CPT code 0640T. The commenter requested that we reassign 0640T to APC 5722 (Level 2 Imaging without contrast) with a proposed payment rate of approximately $310 for CY 2025 based on a crosswalk to CPT code 0598T (Noncontact real-time fluorescence wound imaging, for bacterial presence, location, and load, per session; first anatomic site (e.g., lower extremity)). The commenter explained that CPT code 0598T is an appropriate crosswalk code because it yields diagnostic images without contrast, is newer, and utilizes a Category III CPT code. Response: We thank the commenter for their input. First, we note that prior to the AMA's CPT Editorial Panel descriptor revision for CPT code 0640T, the technical service associated with NIR spectroscopy was described by CPT code 0641T, which was assigned to APC 5732 for CY 2023, prior to being deleted for CY 2024. Under the OPPS, the predecessor code for CPT code 0640T is CPT code 0641T. We note for CY 2025, OPPS payment rates are proposed based on available CY 2023 claims data. Based on our analysis of the claims data for this final rule with comment period, we found a geometric mean cost of about $16 for predecessor CPT code 0641T, based on 32 single frequency claims (out of 445 total claims). In contrast, we found a geometric mean cost of approximately $170 for CPT code 0598T based on 1109 single frequency claims (out of 2531 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). We disagree that the resource cost for 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 NIR spectroscopy, specifically, CPT code 0640T, is appropriately placed in APC 5732. In consideration of the public comment we received, we are finalizing our proposal without modification for CPT code 0640T. Specifically, for CY 2025, we are finalizing our proposal to assign CPT code 0640T to APC 5732. The final CY 2025 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.

50. Percutaneous Coronary Revascularization Services by Intracoronary

Antiproliferative Drug Delivery, CPT Codes 0913T and 0914T (APC 5192) For the July 2024 update, the AMA's CPT Editorial Panel established two Category III codes to describe percutaneous coronary revascularization services by intracoronary antiproliferative drug delivery, performed for occlusive disease of the coronary vessels (major coronary arteries, coronary artery branches) using [[Page 94108]] drug-delivery balloon (e.g., drug-coated, drug-eluting) for intracoronary antiproliferative drug delivery: CPT code 0913T (placeholder code XX23T) (Percutaneous transcatheter therapeutic drug delivery by intracoronary drug-delivery balloon (e.g., drug-coated, drug-eluting), including mechanical dilation by nondrug-delivery balloon angioplasty, endoluminal imaging using intravascular ultrasound (IVUS) or optical coherence tomography (OCT) when performed, imaging supervision, interpretation, and report, single major coronary artery or branch)); and, CPT code 0914T (placeholder code XX40T) (Percutaneous transcatheter therapeutic drug delivery by intracoronary drug-delivery balloon (e.g., drug-coated, drug-eluting) performed on a separate target lesion from the target lesion treated with balloon angioplasty, coronary stent placement or coronary atherectomy, including mechanical dilation by nondrug-delivery balloon angioplasty, endoluminal imaging using intravascular ultrasound (IVUS) or optical coherence tomography (OCT) when performed, imaging supervision, interpretation, and report, single major coronary artery or branch (List separately in addition to code for percutaneous coronary stent or atherectomy intervention)). In the CY 2025 OPPS/ASC proposed rule, we proposed to assign CPT code 0913T (placeholder code XX23T) to APC 5192 (Level 2 Endovascular Procedures; geometric mean cost of $5,771.29) based on clinical and resource similarity to other Percutaneous Coronary Intervention (PCI) procedures, including CPT code 92920 (Percutaneous transluminal coronary angioplasty; single major coronary artery or branch). Additionally, as an add-on code, we proposed to assign CPT code 0914T to status indicator ``N.'' We note that a transitional device pass-through application was submitted for the AGENTTM Paclitaxel-Coated Balloon Catheter for CY 2025 to request separate payment for the device under the OPPS, in addition to the surgical CPT codes. We direct readers to section IV.A (Pass-Through Payment for Devices) of this final rule with comment period for a more detailed discussion of the transitional device pass- through applications and the status of the CY 2025 device pass-through application for the AGENTTM Paclitaxel-Coated Balloon Catheter. We also note that a presenter provided information to the Panel on the description of the service and the cost of the AgentTM device and procedure at the August 28, 2024, HOP Panel Meeting. At the conclusion of the presentation, the presenter asked the Panel to request that CMS reassign CPT code 0913T from APC 5192 to APC 5193 (Level 3 Endovascular Procedures). Based on the information presented at the HOP Panel meeting, the HOP Panel recommended reassigning CPT 0913T to APC 5193. Comment: We received several comments from interested parties, including the manufacturer, a trade association, and several practitioners. One commenter reiterated information shared during the 2024 HOP Panel. Commenters stated that coronary drug-delivery by drug- coated balloon (DCB) is a clinically similar procedure to a drug- eluting stent (DES) implant, which is reported with HCPCS code C9600 (Percutaneous transcatheter placement of drug eluting intracoronary stent(s), with coronary angioplasty when performed; single major coronary artery or branch) and is assigned to APC 5193 (Level 3 Endovascular Procedures). The manufacturer also provided a cost analysis of one facility's Medicare outpatient claims for coronary DCB. Their provided cost analysis included eleven claims and indicated that the geometric mean cost of those eleven claims was $18,935.69. Response: We thank the commenters for their comments. After consideration of the public comments, we continue to believe that CPT code 0913T is appropriately assigned to APC 5192. We note that the long descriptor for CPT code 0913T describes a service similar to other codes in APC 5192. After review of the service and input from our CMS medical officers, we believe that CPT code 92920 (Percutaneous transluminal coronary angioplasty; single major coronary artery or branch) which is assigned to APC 5192 is a good crosswalk code for CPT code 0913T because it is clinically similar. In summary, we are finalizing our proposal to assign CPT code 0913T to status indicator ``J1,'' and APC 5192. The final CY 2025 payment rate for CPT code 0913T 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. Addendums B and D1 are available via the internet on the CMS website.

51. Potential Two-Times Rule Violations (APCs 5302, 5415, 5092, and

5114) We received comments on the APC assignments we proposed in the CY 2025 OPPS/ASC proposed rule, which commenters believe result in 2-times rule violations. Endoscopic Esophageal Procedures CPT code 43254 (Esophagogastroduodenoscopy, flexible, transoral; with endoscopic mucosal resection) with a geometric mean cost of around $2,632; CPT code 43270 (Esophagogastroduodenoscopy, flexible, transoral; with ablation of tumor(s), polyp(s), or other lesion(s) (includes pre- and post-dilation and guide wire passage, when performed)) with a geometric mean cost of around $2,985; and CPT code 43275 (Endoscopic retrograde cholangiopancreatography (ERCP); with removal of foreign body(s) or stent(s) from biliary/pancreatic duct(s)) with a geometric mean cost of around $2,886 describe endoscopic procedures that are performed on the esophagus. For the CY 2025 OPPS/ ASC proposed rule, we proposed to assign all 3 procedures to APC 5302 (Level 2 Upper GI Procedures), which had a proposed a payment rate of around $1,884. Comment: One commenter requested that we reassign CPT codes 43254, 43270, and 43275 to APC 5303 (Level 3 Upper GI Procedures) with a proposed payment rate of around $3,648, due to the geometric mean costs of these codes being more than 2 times that of CPT code 0653T (Esophagogastroduodenoscopy, flexible, transnasal; with biopsy, single or multiple). CPT code 0653T has a geometric mean cost of around $1,212. Response: We appreciate the commenter's request. We did not identify a 2-times rule violation for APC 5302. Since the release of the CY 2025 OPPS proposed rule, we have updated our 2-times analysis of claims from CY 2023 that are used to set rates for CY 2025. Our updated claims data found CPT code 0653T has fewer than 100 claims and does not meet the significance threshold for the two times rule evaluation, and therefore is not considered the lowest cost significant procedure for APC 5302. Vaginal Hysterectomy Procedures CPT code 58260 (Vaginal hysterectomy, for uterus 250 g or less) with a geometric mean cost of around $6,083 and CPT code 58262 (Vaginal hysterectomy, for uterus 250 g or less; with removal of tube(s), and/or ovary(s)) with a geometric mean cost of around $6,753 describe vaginal hysterectomy procedures. For the CY 2025 OPPS/ASC proposed rule, we proposed to assign both procedures to APC 5415 (Level 5 Gynecologic Procedures) with a [[Page 94109]] proposed payment rate of around $4,902. Comment: A commenter requested that we reassign CPT codes 58260 and 58262 to APC 5416 (Level 6 Gynecologic Procedures) with a proposed payment rate of around $7,312, citing the geometric mean cost of CPT code 57550 (Excision of cervical stump, vaginal approach) which is around $1,879. Response: We appreciate the commenter's request. We did not identify a 2-times rule violations for APC 5415. Our updated claims data found CPT code 57550 has fewer than 100 claims and does not meet the significance threshold for the 2-times rule evaluation, and therefore is not considered the lowest cost significant procedure for APC 5415. Mastectomy Procedures CPT code 19303 (Mastectomy, simple, complete) with a geometric mean cost of around $7,236 and CPT code 19307 (Mastectomy, modified radical, including axillary lymph nodes, with or without pectoralis minor muscle, but excluding pectoralis major muscle) with a geometric mean cost of around $7,412 describe mastectomy procedures. For the CY 2025 OPPS/ASC proposed rule, we proposed to assign both procedures to APC 5092 (Level 2 Breast/Lymphatic Surgery and Related Procedures) with a proposed payment rate of around $6,473. Comment: Another commenter requested that we reassign CPT code 19303 and 19307 to APC 5093 (Level 3 Breast/Lymphatic Surgery and Related Procedures) with a proposed payment rate of around $9,417, citing the geometric mean cost of CPT code 38555 (Excision of cystic hygroma, axillary or cervical; with deep neurovascular dissection) which is around $3,475. Response: We appreciate the commenter's request. We did not identify a 2-times rule violations for APC 5092. Our updated claims data found CPT code 38555 has fewer than 100 claims and does not meet the significance threshold for the two times rule evaluation and therefore is not considered the lowest cost significant procedure for APC 5092. Arthrodesis Procedure CPT code 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint), which has a geometric mean cost of around $11,058, describes an arthrodesis procedure performed in the foot. For the CY 2025 OPPS/ASC proposed rule, we proposed to assign this procedure to APC 5114 (Level 4 Musculoskeletal Procedures) with a proposed payment rate of around $7,090. Comment: A commenter requested that CPT code 28740 be reassigned to APC 5115 (Level 5 Musculoskeletal Procedures) with a proposed payment rate of around $12,755, citing the geometric mean cost of CPT code 27385 which is around $5,616. Response: We appreciate the commenter's request. Our updated claims data did not identify a 2-times rule violation for APC 5115. We also found that the geometric mean cost for CPT code 28740 is $11,074. This is less than two times the updated cost of the suggested code CPT code 27385, which is $5,616. In summary, after consideration of these public comments, we are finalizing our proposal without modification to assign CPT codes 43254, 43270, and 43275 to APC 5302 (Level 2 Upper GI Procedures); CPT codes 58260 and 58262 to APC 5415 (Level 5 Gynecologic Procedures); CPT codes 19303 and 19307 to APC 5092 (Level 2 Breast/Lymphatic Surgery and Related Procedures); and CPT code 28740 to APC 5114 (Level 4 Musculoskeletal Procedures). 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.

52. Prostate Laser Enucleation Procedure, CPT Code 52649 (APC 5375)

Prostate laser enucleation procedure utilizes laser to remove the prostate tissue to treat benign prostatic hyperplasia. The procedure is described by CPT code 52649 (Laser enucleation of the prostate with morcellation, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed)). For CY 2025, the OPPS payment rates are proposed based on available CY 2023 claims data. For the CY 2025 proposed rule, based on our analysis of claims data, we found a total of 7,494 single frequency claims and a geometric mean cost of approximately $6,812 for CPT code 52649. For CY 2025, we proposed to continue to assign CPT code 52649 to Level 5 Urology and Related Services (APC 5375) with a proposed payment rate of approximately $5,057. Comment: One commenter disagreed with the proposed APC assignment to APC 5375 (Level 5 Urology and Related Services) and requested the reassignment of CPT code 52649 to APC 5376 (Level 6 Urology and Related Services). The commenter argued that CPT code 52649 shared more clinical and resource similarities with CPT code 50562 (Renal endoscopy through established nephrostomy or pyelostomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with resection of tumor) and CPT code 55873 (Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring)), which are currently assigned to APC 5376. Moreover, the commenter argued that there is more work involved in CPT code 52649 than CPT code 52601 (Transurethral electrosurgical resection of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included)) which is currently assigned to APC 5375 (Level 5 Urology and Related Services). Response: The CY 2025 OPPS payment rates were proposed based on available CY 2023 claims data. We analyzed the claims data for this final rule, and based on our review, we found a geometric mean cost of approximately $6,812 for CPT code 52649 based on 7,494 single claims (out of 7,564 total claims), is consistent with the geometric mean cost of about $5,145 for APC 5375, rather than the geometric mean cost of approximately $9,356 for APC 5376. Based on the claims data, we believe that CPT code 52649 fits more appropriately in APC 5375, rather than in APC 5376, based on resource cost and clinical similarity to CPT code 52601 in APC 5375. 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. We also disagree that CPT code 52649 is sufficiently clinically similar to CPT code 50562 because the latter code involves a surgical treatment of the kidney rather than the prostate. Furthermore, we disagreed that CPT code 52649 shares resource similarity with CPT code 55873, as cryosurgical ablation requires many more resources than the prostate laser enucleation procedure. In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to assign CPT code 52649 to APC 5375 for CY 2025. Please refer to Table 99 below for the final OPPS APC and status indicator assignment for HCPCS code 52649 for CY 2025. The final CY 2025 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer [[Page 94110]] readers to Addendum D1 of this final rule with comment period for the SI meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.123

53. Remote Uroflowmetry Service, CPT Code 0812T (APC 5721)

Remote uroflowmetry is a service that allows patients to measure urine output while remotely monitored by health professionals. This service aids in the diagnosis and management of lower urinary tract issues, such as benign prostatic hyperplasia. It is described by CPT code 0812T (Remote multi-day complex uroflowmetry (e.g., calibrated electronic equipment); device supply with automated report generation, up to 10 days) which became effective January 1, 2024. For CY 2025, we proposed to assign CPT code 0812T to APC 5741 (Level 1 Electronic Analysis of Devices). Comment: One commenter disagreed with our proposed APC assignment of APC 5741 (Level 1 Electronic Analysis of Devices), citing higher equipment and labor cost associated with the CPT code 0812T than services assigned to APC 5741. The commenter requested CPT code 0812T be reassigned to APC 5722 (Level 2 Diagnostic Tests and Related Services), citing resource similarity to CPT code 51741(Complex uroflowmetry (e.g., calibrated electronic equipment)). Response: We appreciate the commenter's recommendation regarding the APC assignment for CPT code 0812T. However, we disagree with the commenter that CPT code 51741 shares similar resource requirements with CPT code 0812T, although both CPT codes describe the uroflowmetry service. CPT code 51741 is a more complex procedure than CPT code 0812T, which is why we proposed to assign CPT code 51741 to APC 5722 (Level 2 Diagnostic Tests and Related Services)). However, we also believe CPT code 0812T shares more resource similarity with CPT code 51703 (Insertion of temporary indwelling bladder catheter; complicated (e.g., altered anatomy, fractured catheter/balloon)) than CPT code 51741. Therefore, for CY 2025, we are reassigning CPT code 0812T to APC 5721 (Level 1 Diagnostic Tests and Related Services). After consideration of the public comment we received, we are finalizing our proposal with modification and reassigning CPT code 0812T to APC 5721 (Level 1 Diagnostic Tests and Related Services). Please refer to Table 100 below for the final OPPS APC and status indicator assignment for CPT code 0821T for CY 2025. 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] TR27NO24.124 [[Page 94111]]

54. Skin Cell Suspension Autograft (SCSA) Procedures, CPT Codes 15011

Through 15018 (APCs 5051, 5054, and 1567) The RECELL System is a device used for skin cell suspension autograft (SCSA) procedures. Skin cell suspension autograft procedures treat acute thermal burn injuries by adhering skin cell solutions to the wound site without use of fixation. There are three steps to perform a SCSA procedure: (1) skin harvesting, (2) SCSA preparation (utilizing the RECELL System), and (3) SCSA application to the wound bed. The RECELL System is on transitional pass-through (TPT) effective January 1, 2022, to December 31, 2024. While on TPT, each time the RECELL device is used, providers must bill device code HCPCS C1832 (Autograft suspension, including cell processing and application, and all system components) and either CPT code 15110 (Epidermal autograft, trunk, arms, legs; first 100 sq cm or less, or 1% of body area of infants and children) or CPT code 15115 (Epidermal autograft, face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/ or multiple digits; first 100 sq cm or less, or 1% of body area of infants and children),as provided in the January 2022 OPPS Change Request 12552 (Transmittal R11150CP). While HCPCS code C1832 describes the RECELL System that prepares the SCSA, CPT codes 15110 and 15115 describe the autograft procedure, which includes both the skin harvesting and SCSA application components of the service. For CY 2024, CPT codes 15510 and 15115 were assigned to APC 5054 (Level 4 Skin Procedures), with a payment rate of approximately $1,800. HCPCS code C1832 can also be billed with CPT codes 15100 (Split-thickness autograft, trunk, arms, legs; first 100 sq cm or less, or 1% of body area of infants and children (except 15050)) or 15120 (Split-thickness autograft, face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; first 100 sq cm or less, or 1% of body area of infants and children (except 15050)), so long as it is billed with one of the two preceding codes (CPT codes 15110 or 15115). In September 2023, AMA's CPT Editorial Panel created eight new Category 1 CPT codes to describe SCSA procedures, effective January 1, 2025. The eight new codes are provided in Table 101. [GRAPHIC] [TIFF OMITTED] TR27NO24.125 [[Page 94112]] In creating these eight new CPT codes, the harvesting, preparation, and application components of the service are each split into separate codes. The harvesting of the skin is described by CPT codes 15011 and 15012, the preparation of the SCSA is described by CPT codes 15013 and 15014, and the application of the SCSA is described by CPT codes 15015 through 15018. While the RECELL System is on TPT, it is sufficient to bill the device code HCPCS C1832 and only one procedure code (either CPT code 15110 or CPT 15115) to describe all three components of the service. However, with the creation of the eight new CPT codes, at least three CPT codes will need to be billed each time the RECELL System is used for a SCSA procedure: CPT code 15011 with or without CPT code 15012 for the skin harvesting, CPT code 15013 with or without CPT code 15014 for the SCSA preparation, and CPT code 15015 with or without CPT code 15016 or CPT code 15017 with or without CPT code 15018 for the SCSA application. For CY 2025, we proposed to assign the eight new CPT codes to various clinical APCs and status indicators provided in Table 102. BILLING CODE 4120-01-P [[Page 94113]] [GRAPHIC] [TIFF OMITTED] TR27NO24.126 BILLING CODE 4120-01-C Comment: We received two comments requesting that we finalize our proposal to assign 15011, 15015, and 15017 to [[Page 94114]] APC 5054 (Level 4 Skin Procedures) for CY 2025. Response: We thank the commenters for their support. Comment: We received two comments, including one comment from the manufacturer of the RECELL System, requesting that we reassign CPT code 15013 from APC 5051 (Level 1 Skin Procedures) to APC 1575 (New Technology--Level 38 ($10,001-$15,000) with a payment rate of $12,500.50 for CY 2025. The commenters expressed concern that the proposed APC assignment for CPT code 15013 to APC 5051 does not accurately reflect the hospital-reported costs associated with the RECELL System. The commenters requested that we consider the hospital costs reported with device code C1832 during the TPT period when finalizing the APC assignment for CPT 15013. The comments estimated a combined total cost of $10,188.96 for CPT code 15013 by adding the purported mean cost for device code C1832 ($7,220) with supply and operating room time costs of approximately $2,900. Based on these estimates, the commenters believe assigning CPT code 15013 to APC 1575 with a payment rate of $12,500.50 would sufficiently pay for the preparation step of the SCSA procedure. Response: We thank the commenters for their input. Under the OPPS, once pass-through status ends for a device, the cost of the device is packaged into its associated procedure. For the RECELL System, once TPT expires on December 31, 2024, the associated procedure will be CPT code 15013. We agree with the commenters that we need to use the claims data available while the RECELL System is on TPT to determine the appropriate APC placement for CPT code 15013. However, given the restructuring of how SCSA procedures utilizing the RECELL System will be billed effective January 1, 2025, we also believe we need to consider the costs of the skin harvesting and application steps of the procedure, which are currently billed by only one procedure code (either CPT Code 15110 or CPT code 15115), paid at approximately $1,800, to determine the appropriate payment for the RECELL System and SCSA application step. In other words, we believe that the sum of the payment rates for the new codes describing the three steps of the SCSA procedure should approximate the cost of the RECELL System on TPT and CPT codes 15110 or 15115. Based on our review of the claims data for device code C1832 during the TPT period, as well as the payment rates for CPT codes 15110 and 15115, we believe assigning CPT code 15013 to APC 1567 (New Technology--Level 30 ($6001- $6500)) with a $6,250.50 payment rate would be appropriate for CY 2025, considering that it will be billed with additional procedure codes that describe the other steps of the SCSA procedure. Rather than assigning CPT code 15013 to APC 5051, as proposed, which has a payment rate of approximately $200 for CY 2025, we believe assigning CPT code 15013 to APC 1567 with a payment rate of $6,250.50 will more appropriately pay for the preparation part of the service, which uses the device. When the full service is performed, meaning that the harvesting, preparation, and application steps are performed, the total cost of the service for CY 2025 will be approximately $10,000, an amount that we believe is appropriate based on the data we have collected while the device has had transitional pass-through status. In consideration of the public comments received, we are finalizing our proposal with modification. For CY 2025, we are finalizing the APC assignments for CPT codes 15011, 15015, and 15017 to APC 5054 (Level 4 Skin Procedures) as proposed. However, we are not finalizing our proposal to assign CPT code 15013 to APC 5051 (Level 1 Skin Procedures) as proposed. For CY 2025, we are assigning CPT code 15013 to APC 1567 ((New Technology--Level 30 ($6001-$6500)). The final 2025 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 meanings for all codes reported under the OPPS. Addenda B and D1 are available via the internet on the CMS website.

55. Surgical Pathology Examination, CPT Code 88309 (APC 5674)

CPT code 88309 describes a level VI examination of a surgical pathology specimen performed by the physician, typically a pathologist. The examination includes accessioning the specimen into the lab, which involves formally receiving the specimen, examining gross and microscopic features of the specimen, and reporting findings. In the CY 2025 OPPS/ASC proposed rule, we proposed to reassign CPT code 88309 from APC 5674 (Level 4 Pathology) to APC 5673 (Level 3 Pathology) with a proposed payment rate of $356.00. Comment: Three commenters asked CMS to maintain the assignment of CPT code 88309 in APC 5674. One commenter recommended that CMS maintain the current assignment of CPT 88309 (Level VI--Surgical pathology, gross and microscopic examination) in APC 5674, (Level 4 Pathology), rather than assigning the code to APC 5673, (Level 3 Pathology), to promote resource and clinical cohesion. Two commenters stated that the proposed reassignment is based on claims data that do not reflect the actual costs of performing the test. They stated that the CY 2025 geometric mean cost for this code is over 25% lower than the geometric mean cost for the prior calendar years and that the complexity of specimens and technical work associated with these services requires the maintenance of the code in APC 5674. Therefore, to ensure resource cohesion within the clinical APCs, the commenters asked CMS to maintain the assignment of CPT code 88309 to APC 5674 for CY 2025 and to not finalize an APC reassignment that would result in a greater than 56% reduction in the payment rate for this important service for Medicare beneficiaries. Response: We thank the commenters for their input. We acknowledge a significant drop in the geometric mean cost for CPT code 88309, which is almost 25% lower than the geometric mean cost in previous years. For this final rule with comment period, we once again reviewed the available CY 2023 claims data and observed a wide variation in claims used for ratesetting purposes for CY 2025. We note that the claims included in ratesetting for this code reflect a wide range of estimated costs and providers furnishing this service along with their associated clinical patterns. We believe these claims are an accurate reflection of those changing costs. However, we are sympathetic to commenters' concerns regarding the 25% reduction in the proposed payment rate for CPT code 88309 from CY 2024 to CY 2025. Therefore, we will use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to continue to assign CPT code 88309 to APC 5674 for CY 2025. In summary, after consideration of the public comments that we received, we are finalizing our proposal with modification to assign CPT code 88309 to APC 5674. However, we will continue to monitor the claims data as they are updated and available. We refer readers to Addendum B to this final rule with comment period for the final CY 2025 OPPS payment rate for this code. Addendum B is available via the internet on the CMS website. [[Page 94115]]

56. Therapeutic Ultrafiltration, CPT 0692T (APC 5242)

In the CY 2025 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 0692T (Therapeutic ultrafiltration), which became effective January 1, 2022, to APC 5241 (Level 1 Blood Product Exchange and Related Services) with a proposed payment rate of $431.37. Therapeutic ultrafiltration reported with CPT code 0692T, is an apheresis procedure for fluid-overloaded heart failure patients through which plasma water and sodium are removed from the blood using the Aquadex SmartFlow System. We received several comments requesting CMS reassign CPT code 0692T from APC 5241 (Level 1 Blood Product Exchange and Related Services) to APC 5242 (Level 2 Blood Product Exchange and Related Services). Comment: Several commenters claimed that the payment rate for APC 5241 is inadequate for CPT code 0692T and that APC 5242 better aligns with the resource costs and clinical aspects of the service. According to the commenters, the resources required, and risks associated with ultrafiltration are the same as plasmapheresis, which is assigned to APC 5242. Ultrafiltration (e.g., apheresis) is the extracorporeal removal of isotonic plasma water (water and salt/electrolytes) and is very similar to plasmapheresis according to the commenters, which involves the extracorporeal removal, return, or exchange of blood plasma or components and is assigned to APC 5242. Commenters suggested that reassigning the ultrafiltration therapy code 0692T to APC 5242 would align OPPS payment with the cost of providing the service. Response: We thank commenters for their input. We have limited claims data (9 total claims) for CPT code 0692T available for CY 2025 ratesetting. However, based on the code's clinical similarity and expected resource cost similarity to CPT code 36514 (Therapeutic apheresis; for plasma pheresis), which we have assigned to APC 5242 (Level 2 Blood Product Exchange and Related Services) for CY 2025, we believe that we should reassign CPT code 0692T to APC 5242. In summary, after consideration of the public comments that we received, we are finalizing our proposal with modification, and assigning CPT code 0692T to APC 5242 for CY 2025. The CY 2025 final payment rate for this code can be found in Addendum B of this final rule with comment period.

57. Thyroid Ablation, CPT Codes 60660 and 60661 (APC 5072)

The AMA established CPT codes 60660 (Ablation of 1 or more thyroid nodule(s), one lobe or the isthmus, percutaneous, including imaging guidance, radiofrequency) and 60661 (Ablation of 1 or more thyroid nodule(s), additional lobe, percutaneous, with imaging guidance, radiofrequency (List separately in addition to code for primary service), effective January 1, 2025. These codes were previously described by the placeholder codes 6XX01 and 6XX02. In the CY 2025 OPPS/ASC proposed rule, CMS crosswalked CPT code 60660 to CPT code 0673T (Ablation, benign thyroid nodule(s), percutaneous, laser, including imaging guidance) and proposed to assign it to APC 5072 (Level 2 Excision/Biopsy/Incision and Drainage) for CY 2025. CMS also proposed to assign CPT code 60661 to status indicator ``N'' (packaged), as it is an add-on code. Comment: We received two comments requesting reassignment for CPT codes 60660 and 60661. One comment requested we reassign CPT code 60660 to APC 5073 (Level 3 Excision/Biopsy/Incision and Drainage), due to its clinical similarity and resource homogeneity with the other procedures in APC 5073. A second comment requested we reassign both 60660 and 60661 to APC 5164 (Level 4 ENT Procedures), due to their similarity to CPT code 30140 (Submucous resection inferior turbinate, partial or complete, any method). Response: We thank the commenters for their suggestions. After further clinical review, we continue to believe that CPT code 0673T is the appropriate crosswalk for CPT code 60660 and that CPT code 30140 would not be the correct clinically comparable code. CPT code 0673T has a geometric mean cost of around $1,578 and is assigned to APC 5072, which has a payment rate of around $1,620. We believe that 0673T is appropriately placed in APC 5072, and therefore, CPT code 60660 is appropriately assigned to APC 5072 and should not be reassigned to APC 5073 at this time. Additionally, because CPT code 60661 is an add-on code, we believe that the current status indicator assignment of ``N'' is correct. After consideration of the public comments we received, we are finalizing our proposal without modification to assign CPT code 60660 to APC 5072 (Level 2 Excision/Biopsy/Incision and Drainage) and 60661 to status indicator ``N'' for CY 2025. Table 103 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 94116]] [GRAPHIC] [TIFF OMITTED] TR27NO24.128

58. Thyroid Removal, CPT Code 60240 (APC 5361)

In the CY 2025 OPPS/ASC proposed rule, CPT code 60240 (Thyroidectomy, total or complete), which describes thyroid removal, was proposed to be assigned to APC 5361 (Level 1 Laparoscopy and Related Services) with a proposed geometric mean cost of $7,150.89 and proposed APC payment rate of $5,798.13. Comment: We received one comment requesting that we reassign CPT code 60240 to APC 5362 (Level 2 Laparoscopy and Related Services), which had a proposed payment rate of $10,378.45. The commenter argued that keeping CPT code 60240 in APC 5361 would be a 2 times rule violation because CPT code 60240 has a geometric mean cost that is greater than 2 times the geometric mean value of CPT code 60281(Excision of thyroglossal duct cyst or sinus; recurrent), which had a proposed geometric mean cost of around $3,462 and is also in APC 5361. Response: We thank the commenter for their input. Our review found that APC 5361 was not in violation of the 2 times rule. Because CPT code 60821 has only 2 claims for CY 2025, it does not meet the significance threshold for the 2 times rule evaluation. Additionally, the updated geometric mean cost for CPT code 60240 of $7,022.82 is closer to the payment rate of APC 5361 ($5,834.36) compared to APC 5362 ($10,411.39). After consideration of the public comment we received, we are finalizing our proposal without modification to assign CPT code 60240 to 5361 (Level 1 Laparoscopy and Related Services) for CY 2025. Table 104 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. [GRAPHIC] [TIFF OMITTED] TR27NO24.129

59. Trabecular Bypass Procedures, CPT Codes 66989, 66991, 0660T, 0661T,

and 0671T (APCs 5492 and 5493) Trabecular bypass procedures are used for the treatment of glaucoma and may be performed along with cataract surgery or as a stand-alone procedure. Another glaucoma treatment involves the implantation of a device that releases a drug into the eye. For the CY 2025 OPPS final rule, we proposed to assign CPT code 66989 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more) with a geometric mean cost around $5,440; CPT code 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) with a geometric mean cost around $4,990; and CPT code 0671T (Insertion of anterior segment aqueous drainage device into the trabecular meshwork, without external [[Page 94117]] reservoir, and without concomitant cataract removal, one or more) with a geometric mean cost around $5,527 to APC 5493 (Level 3 Intraocular Procedures) with a payment rate around $5,160. Also, for the CY 2025 OPPS final rule, we proposed to assign CPT code 0660T (Implantation of anterior segment intraocular nonbiodegradable drug-eluting system, internal approach) with no claims data for CY 2025, and CPT code 0661T (Removal and reimplantation of anterior segment intraocular nonbiodegradable drug-eluting implant) with no claims data for CY 2025 to APC 5492 (Level 2 Intraocular Procedures) with a payment rate of around $4,023. Comment: Multiple commenters supported our proposal to assign CPT codes 66989, 66991, and 0671T to APC 5493 (Level 3 Intraocular Procedures) with a payment rate around $5,160. The commenters also supported our proposal to assign CPT codes 0660T and 0661T to APC 5492 (Level 2 Intraocular Procedures) with a payment rate of around $4,023. Response: We appreciate the commenters' support for our proposals. After consideration of the public comments we received, we are finalizing our proposal without modification for CPT codes 66989, 66991, 0660T, 0661T, 0671T to assign these procedures to APC 5493 (Level 3 Intraocular Procedures). We also are implementing our proposal without modification for CPT codes 0660T and 0661T to assign these procedures to APC 5492 (Level 2 Intraocular Procedures). Table 105 shows the finalized status indicator and APC assignment for all of the procedure codes. We refer readers to Addendum B of this final rule for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. [[Page 94118]] [GRAPHIC] [TIFF OMITTED] TR27NO24.130 [[Page 94119]]

60. Transcutaneous Magnetic Peripheral Nerve Stimulation CPT Codes

0766T and 0767T (APC 5722) Transcutaneous Magnetic Peripheral Nerve Stimulation is intended to stimulate peripheral nerves for relief of chronic intractable pain, post[hyphen]traumatic pain, post[hyphen]surgical pain and/or for relief of chronic painful diabetic peripheral neuropathy in the lower extremities for patients 18 and older. CPT code 0766T (Transcutaneous magnetic stimulation by focused low-frequency electromagnetic pulse, peripheral nerve, with identification and marking of the treatment location, including noninvasive electroneurographic localization (nerve conduction localization), when performed; first nerve) became effective January 1, 2023. For CY 2024, CPT code 0766T has been assigned to APC 5721 (Level 1 Diagnostic Tests and Related Services) with the status indicator ``Q1'' (STV-Packaged Codes). There are no claims available for CPT codes 0766T in CY 2023. For CY 2025, we proposed to continue assigning CPT codes 0766T to APC 5721. CPT code 0767T (Transcutaneous magnetic stimulation by focused low- frequency electromagnetic pulse, peripheral nerve, with identification and marking of the treatment location, including noninvasive electroneurographic localization (nerve conduction localization), when performed; each additional nerve (list separately in addition to code for primary procedure)) became effective January 1, 2023. CPT code 0767T is an add-on code and we proposed to assign status indicator ``N'' (packaged) for this code. Comment: Commenters disagreed with the proposed assignment of APC 5721 (Level 1 Diagnostic Tests and Related Services) and the status indicator ``Q1'' for CPT code 0766T, claiming that CPT code 0766T is not clinically similar nor uses comparable resources to other services in APC 5721. The commenters stated that the HOP Panel recommended that 0766T be reassigned to APC 5431 (Level 1 Nerve Procedures) with a status indicator ``S'' (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment). Additionally, commenters disagreed with the status indicator of ``N'' for CPT code 0767T and requested the 0767T be reassigned status indicator ``S'' and assigned to APC 5431 (Level 1 Nerve Procedures). Response: We thank commenters for their input. We disagree that CPT code 0766T is comparable clinically and in resource costs to the services assigned to APC 5431. However, after further evaluation, we believe CPT code 0766T is more comparable clinically and from a resource cost perspective to CPT code 90867 (Therapeutic repetitive transcranial magnetic stimulation (tms) treatment; initial, including cortical mapping, motor threshold determination, delivery and management), which is assigned to APC 5722 (Level 2 Diagnostic Tests and Related Services), because these services share similar magnetic stimulation and nerve localization processes. Additionally, we believe that patients may receive this service as a primary standalone service. Therefore, for CY 2025, we are finalizing the reassignment of CPT code 0766T to APC 5722 (Level 2 Diagnostic Tests and Related Services) and its status indicator to ``S'' (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment). We note that CPT code 0767T is an add-on code. Add-on codes are always performed in addition to the primary service or procedure and must never be reported as a stand-alone code. 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 code 0767T is not paid separately under the OPPS, but instead, its payment is packaged into payment for the primary code. After consideration of the public comments we received, we are finalizing reassigned status indicator and APC assignments for CPT codes 0766T and finalizing as proposed the status indicator assignment for 0767T. Please refer to Table 106 below for the final OPPS APC and status indicator assignment for CPT codes 0766T and 0767T for CY 2025. 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 94120]] [GRAPHIC] [TIFF OMITTED] TR27NO24.131

61. Transurethral Ultrasound Ablation (TULSA) Procedure, HCPCS Code

C9734 and CPT Code 55882 (APC 5377) The TULSA procedure is a minimally invasive procedure that, under MRI guidance, delivers precise doses of therapeutic ultrasound to treat prostate cancer. HCPCS code C9734 (Focused ultrasound ablation/ therapeutic intervention, other than uterine leiomyomata, with magnetic resonance (mr) guidance) became effective April 1, 2013. For CY 2025, the OPPS payment rates are proposed based on available CY 2023 claims data. For CY 2025, based on our analysis of claims data, we found a total of 89 single frequency claims and an estimated geometric mean cost of $10,056 for HCPCS code C9734. For CY 2025, we proposed to continue to assign HCPCS code C9734 to APC 5115 (Level 5 Musculoskeletal Procedures) with a proposed payment rate of approximately $12,756. Comment: Commenters pointed out that the AMA CPT created a new code, CPT code 5X008, to describe the TULSA procedure represented by HCPCS code C9734. CPT code 5X008 (Ablation of prostate tissue, transurethral, using thermal ultrasound, including magnetic resonance imaging guidance for, and monitoring of, tissue ablation; with insertion of transurethral ultrasound transducer for delivery of thermal ultrasound, including suprapubic tube placement and placement of an endorectal cooling device, when performed) becomes effective January 1, 2025. Commenters also recommended that the TULSA procedure be reassigned to the Urology and Related Services APC series, which is more clinically consistent with other urology related procedures. Furthermore, commenters stated TULSA is more similar clinically and in terms of resources to the procedures in APC 5377 (Level 7 Urology and Related Services) than procedures in APC 5376 (Level 6 Urology and Related Services). Commenters referenced the use of a MRI technology, specialized staffing, and the longer procedural time that increases the resources needed to perform the TULSA procedure relative to other prostate ablation procedures in Level 6 Urology and Related Services (APC 5376). Commenters stated that HCPCS code C9734's geometric mean cost aligns more appropriately with APC 5377 (Level 7 Urology and Related Services) with a proposed APC geometric mean cost of $13,217. Response: We thank the commenters for pointing out that CPT code 5X008 (55882) will become effective January 1, 2025. We note that we will replace HCPCS code C9734 with CPT code 5X008 (55882) effective January 1, 2025, as well as assign the underlying claims associated with C9734 to CPT code 5X008 (55882). We agree with the commenters that the TULSA procedure, described by HCPCS code C9734 (CPT code 55882) should be reassigned to the Urology and Related Services APC series to be consistent with other urological related procedures. We also believe that the TULSA procedure is clinically similar to CPT code 55880 (Ablation of malignant prostate tissue, transrectal, with high intensity-focused ultrasound (hifu), including ultrasound guidance) or CPT code 55873 (Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring)) which are assigned to APC 5376. However, we acknowledge that the TULSA procedure requires greater resources from MRI equipment and MRI technologists, and requires a longer procedure time than CPT codes 55880 and 55873. Therefore, for CY 2025, we are reassigning CPT code 5X008 (55882) to APC 5377 (Level 7 Urology and Related Services). We note that we will continue to evaluate and monitor the cost of CPT code 5X008 (55882) for future rulemaking. After consideration of the public comments we received, we are finalizing our policy to assign CPT code 5X008 (55882) to APC 5377 (Level 7 Urology and Related Services). Please refer to Table 107 below for the final OPPS APC and status indicator assignment for CPT code 5X008 (55882) for CY 2025. The final CY 2025 payment rates can be found in Addendum B to this final rule with comment period via the internet on the CMS website. [[Page 94121]] [GRAPHIC] [TIFF OMITTED] TR27NO24.132

62. Unfold AI Service, CPT Code 0898T (APC 5724)

Unfold AI is an algorithm-based test that analyzes multiple clinical data inputs and multi-modal images to create a newly computed 3D visualization of the precise location and dimensions of clinically significant prostate cancer. The generated output assists physicians in identifying the cancer margins for treatment. The Unfold AI service is represented by CPT code 0898T (Noninvasive prostate cancer estimation map, derived from augmentative analysis of image-guided fusion biopsy and pathology, including visualization of margin volume and location, with margin determination and physician interpretation and report) which became effective July 1, 2024. As this is a new code in 2024, we have no claims data for CPT code 0898T. For CY 2025, we proposed to assign CPT Code 0898T to APC 5724 (Level 4 Diagnostic Tests and Related Services). Comment: Commenters supported our proposal to assign CPT code 0898T to Level 4 Diagnostic Tests and Related Services (APC 5724). Response: We thank the commenters for their support on our proposal to assign CPT code 0898T to Level 4 Diagnostic Tests and Related Services (APC 5724). After consideration of the public comments we received, we are finalizing our proposal without modification for CPT code 0898T. Please refer to Table 108 below for the final OPPS APC and status indicator assignment for HCPCS code 0898T for CY 2025. The final CY 2025 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] TR27NO24.133

63. Ureteroscopy, HCPCS Code C9761 (APC 5376)

The ureteroscopy procedure addresses kidney stones and may apply catheterization to vacuum aspirate the fragmented kidney stones. HCPCS code C9761 (Cystourethroscopy, with ureteroscopy and/or, 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) became effective October 1, 2020. For CY 2025, the OPPS payment rates are proposed based on available CY [[Page 94122]] 2023 claims data. For the CY 2025 OPPS/ASC proposed rule, we found a total of 95 single frequency claims and a geometric mean cost of approximately $9,718 for HCPCS code C9761. For CY 2025, we proposed to continue to assign HCPCS code C9761 to APC 5376 (Level 6 Urology and Related Services) with a proposed payment rate of approximately $9,208. Comment: One commenter requested CMS provide coding guidance if HCPCS code C9761 should be reported when the ureteroscopy procedure utilizes the flexible ureteroscopy (fURS) with the flexible and navigable suction (FANS) sheath. Response: This comment is out of scope of this OPPS/ASC final rule with comment period. We note that if hospitals have questions about appropriate coding that they cannot resolve on their own, the appropriate first step would be to review the HCPCS codes or consult a Medicare Administrative Contractor (MAC).

64. V-LAP System Left Atrial Pressure Monitoring Procedure, CPT Code

0933T (APC 5191) On January 1, 2025, CPT code 0933T (Transcatheter implantation of wireless left atrial pressure sensor for long-term left atrial pressure monitoring, including sensor calibration and deployment, right heart catheterization, transseptal puncture, imaging guidance, and radiological supervision and interpretation) will become effective to report the implantation and remote monitoring of the V-LAP System. The system is used to measure and monitor left atrial pressure in patients with advanced congestive heart failure (CHF). The V-LAP system was designated as a Category A IDE clinical study (NCT06147336) on January 30, 2024. Since devices in Category A IDE studies are not covered by Medicare during the study, the payment for CPT code 0933T while in the Category A IDE study will reflect only the cost of the service that is performed each time it is reported on a claim. For CY 2025, we proposed to assign CPT code 0933T to APC 5191 (Level 1 Endovascular Procedures) and status indicator of ``J1'' (Hospital Part B Services Paid Through a Comprehensive APC) with a proposed payment of around $3,210. Comment: We received one comment from the manufacturer requesting that we reassign CPT code 0933T from APC 5191 (Level 1 Endovascular Procedures) to APC 1532 (New Technology--Level 32 ($7001-$7500)), as it more accurately reflects the costs of this procedure. Response: We appreciate the commenter's input. The commenter asserts that the current APC assignment of 5191 (Level 1 Endovascular Procedures) does not adequately reflect the complex nature and resource demands of the V-LAP procedure even though the procedure is described as a standard minimally invasive catheterization. We are unclear what procedural steps makes this procedure more complex than the other procedures assigned to APC 5191. Based on our understanding of the service and input from our medical advisors, we do not agree and believe that CPT code 93451 (Right heart catheterization including measurement(s) of oxygen saturation and cardiac output, when performed) is an appropriate crosswalk code while the V-LAPTM procedure is in a Category A IDE trial. Once the service receives appropriate FDA approval outside of the Category A IDE study (e.g., PMA approval or 510(k)), we will work to assign CPT code 0933T to an APC that is more reflective of the cost of the service, beyond routine care items and services. We remind the readers that for Category A IDE studies, Medicare only provides payment for routine care items and services furnished in the FDA-approved Category A study. We refer readers to the Medicare Benefit Policy Manual, See 20.1--Medicare Requirements for Coverage of Items and Services in FDA-approved Category A and B IDE Studies. After consideration of the public comment we received, we are finalizing our proposal without modification to assign CPT code 0933T to APC 5191. 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.

65. Vagal Nerve Neurostimulator System, CPT Codes 0908T Through 0912T

The CPT Editorial Panel created 5 new Category III CPT codes, effective January 1, 2025, which describe the implantation, replacement, removal, interrogation, and programming of the integrated vagus nerve stimulation device used for the treatment of patients who have rheumatoid arthritis (RA) and are not responsive to pharmacological therapy. The patient is placed under general anesthesia (for about 60-90 minutes) while the neurosurgeon dissects the tissue on the left side of the neck to access the cervical vagus nerve within the carotid sheath. The rechargeable integrated neurostimulator is then placed directly on the cervical vagus nerve. The implant is charged weekly with an external charger. A rheumatologist is responsible for prescribing and making changes to the stimulation therapy via an app. See Table 109 for the CPT codes, their long descriptors, and the proposed payment assignments. [[Page 94123]] [GRAPHIC] [TIFF OMITTED] TR27NO24.134 For CY 2025, we proposed to assign 0908T and 0909T to APC 5462 (Level 2 Neurostimulator and Related Procedures) and status indicator ``J1'' (Hospital Part B Services Paid Through a Comprehensive APC; Paid under OPPS.) based on their similarity to CPT code 0587T (Percutaneous implantation or replacement of integrated single device neurostimulation system for bladder dysfunction including electrode array and receiver or pulse generator, including analysis, programming, and imaging guidance when performed, posterior tibial nerve) and because CPT 0587T also describes an integrated system. We proposed to assign 0910T to APC 5461 (Level 1 Neurostimulator and Related Procedures) and status indicator ``J1'' based on its similarity to CPT code 0588T (Revision or removal of percutaneously placed integrated single device neurostimulation system for bladder dysfunction including electrode array and receiver or pulse generator, including analysis, programming, and imaging guidance when performed, posterior tibial nerve) as both codes describe the removal of an integrated neurostimulation system. We also proposed to assign CPT codes 0911T to APC 5733 (Level 3 Minor Procedures) and status indicator ``Q1'' (STV-Packaged Codes; Paid Under OPPS) using CPT code 95981(Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude and duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient measurements) gastric neurostimulator pulse generator/transmitter; subsequent, without reprogramming) as a crosswalk code and 0912T to APC 5742 (Level 2 Electronic Analysis of Devices) and status indicator of ``S'' (Procedure or Service, Not Discounted When Multiple; Paid under OPPS; separate APC payment.) using CPT code 0589T (Electronic analysis with simple programming of implanted integrated neurostimulation system for bladder dysfunction (e.g., electrode array and receiver), including contact group(s), amplitude, pulse width, frequency (Hz), on/off cycling, burst, dose lockout, patient-selectable parameters, responsive neurostimulation, detection algorithms, closed-loop parameters, and passive parameters, when performed by physician or other qualified health care professional, posterior tibial nerve, 1-3 parameters) as a crosswalk code. Comment: We received several comments from stakeholders requesting that CPT codes XX32T (0908T) and XX33T (0909T) be reassigned from APC 5462 (Level 2 Neurostimulator and Related Procedures) to APC 5465 (Level 5 Neurostimulator and Related Procedures) because the proposed APC assignments do not reflect the costs of the device and procedure or consider the clinical intensity and risk of the procedure. Commenters provided CPT code 64568 (Open implantation of cranial nerve (e.g., vagus nerve) neurostimulator electrode array and pulse generator) as an appropriate comparator code, noting that the integrated devices do not require the creation of an additional subcutaneous pocket. While there are some differences in the two surgical procedures described by CPT codes XX32T (0908T) and XX33T (0909T) compared to CPT code 64568, the commenter asserted that [[Page 94124]] inserting the integrated system is a complex procedure to perform and is similar in cost, resources, and required skill. Another commenter requested that we reassign XX34T (0910T) from APC 5461 (Level 1 Neurostimulator and Related Procedures) to APC 5463 (Level 3 Neurostimulator and Related Procedures) stating that CPT code 61888 (Revision or removal of cranial neurostimulator pulse generator or receiver) is an appropriate comparator code. Commenters noted that the vagal nerve neurostimulation system is a novel treatment for rheumatoid arthritis patients who have exhausted other pharmacological options to manage their disease. They stated that biological therapies are expensive and may cost over $50,000/per year, while this neurostimulation system is expected to have a shelf life of 10 years. They asserted that APC reassignments of XX32T (0908T), XX33T (0909T), and XX34T (0910T) would support CMS' commitment to promoting new innovative treatment options and expanding access for beneficiaries with chronic conditions. In addition to the comments requesting APC reassignments, the manufacturer stated they were expecting FDA approval, specifically Premarket Approval (PMA), in the 2nd quarter of 2025 with an expected statement ``for the treatment of adult patients with moderately to severely active RA who have had an inadequate response, loss of response or intolerance to one (1) or more biological or targeted synthetic DMARDs (disease-modifying antirheumatic drugs)''. They acknowledged that, in the past, CMS has assigned non-FDA approved technologies a status indicator of ``E1'' and addressed the APC assignments once FDA approval is received. The manufacturer asserted the lack of payment assignments (APCs and status indicators) would significantly hinder commercialization of their neurostimulation system. Response: We thank the commenters for all their valuable input. Because this vagal nerve neurostimulation system has not yet received FDA approval, we believe that we should reassign CPT codes 0908T, 0909T, 0910T, 0911T, and 0912T to status indicator ``E1'' to indicate that the code is not payable by Medicare when submitted on outpatient claims (any outpatient bill type). When we are notified by stakeholders that the FDA has approved this neurostimulation system, we will reassess the status indicator and APC assignments for these codes based on the comments we have received, in a future quarterly update and/or rulemaking cycle. In summary, after consideration of the public comments received, we are finalizing our proposal, with modification, to assign status indicator ``E1'' to CPT codes 0909T through 0912T. The final status indicator assignment for the codes is listed in Table 110. 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 2025. Addendum D1 is available via the internet on the CMS website. [GRAPHIC] [TIFF OMITTED] TR27NO24.135 [[Page 94125]]

66. VisONE[supreg] Synchronized Diaphragmatic StimulationTM

(SDS[supreg]) System CPT Codes 0674T Through 0685T The VisONE[supreg] Synchronized Diaphragmatic StimulationTM (SDS[supreg]) System is a technology being studied to treat select patients with chronic heart failure by delivering electrical stimulation to the diaphragm to modulate intrathoracic pressure pulses on the cardiovascular system. The SDS[supreg] System is comprised of an implantable pulse generator (IPG), sensing and therapy lead electrodes, a laparoscopic implant tool to place the leads, and an external programmer and telemetry wand. There are 12 Category III CPT codes that may describe the various procedures related to the procedures involving the SDS[supreg] System: CPT codes 0674T-0685T. For CY 2025, as the SDS[supreg] System did not have FDA approval at the time of the proposed rule, we proposed to assign CPT codes 0674T-0685T to status indicator ``E1'' to indicate that the services are not paid by Medicare when submitted on outpatient claims (any outpatient bill type). Please refer to Table 111 for the full list of CPT codes and the proposed status indicators for CY 2025. BILLING CODE 4120-01-P [[Page 94126]] [GRAPHIC] [TIFF OMITTED] TR27NO24.136 BILLING CODE 4120-01-C Comment: One commenter, specifically, the manufacturer of the SDS[supreg] System, requested clinical APC assignments for 9 of the 12 CPT codes [[Page 94127]] describing the various procedures involving the SDS[supreg] System. The commenter requested assignments to packaged status indicator ``N'' for the remaining three add-on CPT codes for which they did not request a clinical APC assignment. Specifically, the commenter requested that, for CY 2025, CMS assign: CPT code 0674T to APC 5465 (Level 5 Neurostimulator and Related Procedures) with SI ``J1'' based on a crosswalk to CPT code 63685. CPT code 0675T to APC 5463 (Level 3 Neurostimulator and Related Procedures) with SI ``J1'' based on a crosswalk to CPT code 43647. CPT codes 0677T and 0679T to APC 5362 (Level 2 Laparoscopy and Related Services) with SI ``J1'' based on a crosswalk to CPT code 43648. CPT code 0680T to APC 5464 (Level 4 Neurostimulator and Related Procedures) with SI ``J1'' based on a crosswalk to CPT code 64590. CPT code 0681T and 0682T to APC 5461 (Level 1 Neurostimulator and Related Procedures) with SI ``J1'' based on a crosswalk to CPT code 64595. CPT code 0683T and 0685T to APC 5741 (Level 1 Electronic Analysis of Devices) with SI ``Q1'' based on crosswalks to CPT codes 93281 and 93288, respectively. SI ``N'' to CPT codes 0676T, 0678T, and 0684T. The commenter also provided additional information regarding the FDA approval status of the SDS[supreg] System. Per the commenter, on July 26, 2024, the SDS[supreg] System received FDA approval for the Investigational Device Exemption (IDE) regarding the RECOVER-HF trial, which was anticipated to begin in late 2024. The request for Medicare coverage of the RECOVER-HF trial was pending when the comment was submitted. The commenter requested that CMS make the 12 codes payable effective January 1, 2025, in anticipation of Medicare's approval of their Category B IDE trial application. Response: We thank the commenter for their input and agree with the suggested CPT crosswalk codes provided by the commenter. We note that the RECOVER-HF trial was approved for Medicare coverage on September 23, 2024. Because the Category B IDE trial meets the CMS standards for coverage, and appears on the CMS approved IDE list on the CMS website, we are not finalizing our proposal to assign the 12 codes that describe the various procedures associated with the SDS[supreg] System to status indicator ``E1.'' In light of the recent Category B IDE study approval for the RECOVER-HF clinical trial, and based on our review of the comment received, more specifically the crosswalk codes recommended by the commenter, we are finalizing the following clinical APC and status indicator assignments: BILLING CODE 4120-01-P [[Page 94128]] [GRAPHIC] [TIFF OMITTED] TR27NO24.137 [[Page 94129]] [GRAPHIC] [TIFF OMITTED] TR27NO24.138 BILLING CODE 4120-01-C The final CY 2025 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 to this final rule with comment period for the complete list of the OPPS payment status indicators and their definitions for CY 2025. Addendum D1 is available via the internet on the CMS website.

67. Xenograft Implantation Into the Articular Surface, CPT Code 0737T

(APC 5115) For the July 1, 2022, update, the AMA CPT Editorial Panel established CPT code 0737T (Xenograft implantation into the articular surface) to describe xenograft implantation for use in cartilage and osteochondral defects in joints. Since July 1, 2022, CPT code 0737T has been assigned to status indicator ``E1'' (Not paid by Medicare when submitted on outpatient claims (any outpatient bill type)) to indicate that the code was not payable under the OPPS. In the OPPS Quarterly Change Request (Transmittal 12816, CR 13784) dated August 29, 2024, we noted that the device associated with this code (Agili-CTM) had become available, and therefore we reassigned CPT code 0737T to status indicator ``J1'' (Hospital Part B Services Paid Through a Comprehensive APC; Paid under OPPS) and APC 5115 (Level 5 Musculoskeletal Procedures) effective July 1, 2024. For CY 2025, we proposed to continue to assign CPT code 0737T to APC 5115 with a proposed payment assignment of around $12,755. Comment: We received a couple of comments expressing support for assigning CPT code 0737T to APC 5115 and status indicator ``J1''. Commenters noted that the reimbursement was consistent with the costs associated with the procedure and would ensure equitable patient access, even allowing some beneficiaries to possibly avoid more costly knee replacement procedures. They requested that we maintain the APC and status indicator assignments for several years to gather claims data as they anticipate the patient volume will be limited due to the patient selection criteria. Response: We thank the commenters for their input. Under the OPPS, we review our claims data on an annual basis to determine payment rates and will continue to monitor the claims data and the appropriateness of the APC assignment for CPT code 0737T to APC 5115. In summary, we are finalizing our proposal, without modification, to assign CPT code 0737T to APC 5115 for CY 2025. The final CY 2025 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.

68. OPPS Payment for Software as a Service

New clinical software, which includes clinical decision support software, clinical risk modeling, and computer aided detection (CAD), is becoming increasingly available to providers. These technologies often perform data analysis of diagnostic images from patients. While many of these technologies are new, we note that clinical software, particularly CAD, has been used to aid or augment clinical decision making for decades. These technologies rely on complex algorithms or statistical predictive modeling to aid in the diagnosis or treatment of a patient's condition. We refer to these algorithm-driven services that assist practitioners in making clinical assessments, and that providers pay for either on a subscription or per-use basis, as Software as a Service (SaaS). We note the proliferation of SaaS procedures approved by the FDA and their subsequent assignment of CPT codes by the AMA has led the agency to seek a workable SaaS payment strategy. We are seeking a strategy that would provide equitable payment for these new technologies while also preserving the integrity of the OPPS payment bundles, an essential component of a prospective payment system. We are seeking a payment strategy that aligns with our agency's mission to improve quality, health, reduce cost, and strengthen the health care system. We note that the manufacturer-supplied cost data of [[Page 94130]] these SaaS services is often high and the true return in investment for these services is still unknown. Moreover, many SaaS services often do not share clinical and resource similarity to existing medical services. Thus, it generally has been challenging to compare a new SaaS service to existing medical services for the purpose of determining a fair payment rate for these new services. Although some have recently received separate payment for these SaaS procedures under the OPPS, we recognize that certain clinical decision support software, including machine learning or ``AI,'' has been available for many years. In the past ten years, clinical decision support software has been commonly used alongside electronic medical records by medical practitioners. Nonetheless, the number of FDA approved or cleared ``machine learning'' or ``AI'' clinical software programs has rapidly increased in the past few years. We note that the FDA has approved many SaaS procedures for similar functions: there are at least six software products that purport to detect findings in Computed Tomography (CT) studies of the chest.\29\ Additionally, we note some clinical software developers are now using alternative licensing that charges per use rather than using the traditional annual subscription or bulk use subscription. As a result of these variables and potentially others, there is significant price variation within the SaaS procedure space. --------------------------------------------------------------------------- \29\ https://www.fda.gov/medical-devices/software-medical-device-samd/artificial-intelligence-and-machine-learning-aiml-enabled-medical-devices --------------------------------------------------------------------------- We recognize that, as described in the CY 2023 OPPS/ASC final rule with comment period (87 FR 72027), SaaS procedures are a heterogenous group of services, which presents challenges when it comes to adopting payment policy for SaaS procedures as a whole. In the CY 2023 OPPS/ASC final rule, we solicited public comment on a payment approach that would broadly apply to SaaS procedures and have received some valuable feedback. Some of the feedback includes incorporating AI taxonomy across agencies and interested parties, or not to establish a single policy that would apply to all SaaS-type technology but instead separately evaluate each new technology to determine the appropriate HCPCS coding, including whether or not a potential CPT code can be used to support payment for the separate and distinct service under the OPPS. For CY 2025, we are continuing to work to formulate a workable SaaS payment policy that would enhance our ability to provide equitable payment for SaaS procedures while responsibly managing cost and protecting the Medicare trust fund. Specifically, we are working to address the following: Identifying a payment strategy that is applicable across the settings of care (physician offices, for example); Identifying the fair costs associated for SaaS services; Distinguishing services that should be paid separately versus services that should be packaged under a prospective payment system; and Identifying a payment strategy for SaaS services that are part of other medical devices versus those that are distinct services. We did not make any proposals on OPPS payment for SaaS for CY 2025 but received a number of comments on the topic. Comment: Commenters suggested CMS formulate a SaaS payment policy that would incentivize adoption of new AI and ensure access and provide stability for its adoption of SaaS technologies. Commenters stated that CMS payment decisions have not uniformly and consistently ensured appropriate levels of payment. Some commenters recommended that we adopt the term ``Algorithm-based healthcare services'' (ABHS), which include SaaS procedures. ABHS includes these services regardless of whether they are delivered by a third party, or a health care professional using the AI software through the cloud, the web, a workstation, or embedded in imaging acquisition hardware. Commenters also recommended that ABHS codes be initially assigned to New Technology APCs for at least 5 years based on manufacture-supply cost data, until sufficient claims data are available. Some commenters also recommend that we codify the 2023 packaging exemption for SaaS add-on codes policy. Response: We appreciate the commenters' valuable input on a SaaS payment policy approach, and we will consider their input for any future SaaS payment policy. We note that the suggestion for any new SaaS services to remain in the initial New Technology APC assignment for at least 5 years is in contrast to our current Transitional Pass- Through policy of three years for device or drugs. Moreover, we would need to examine the feasibility of payment determination based on manufacture-supplied cost data, which has historically not been comparable when the claims data become available. Comment: One commenter requested CMS clarify that SaaS codes created by the AMA CPT are to be vendor neutral, and that these codes do not represent any single vendor's services. The commenter stated the focus on a single commercial platform for a code is not accurate, confuses the applicability, and limits adoption of other tools for which the code was intended. The commenter recommended removing the current language that these codes are ``associated with'' a specific service, which may result in an increase in claims, therefore allowing for a more accurate understanding of actual costs associated with these services. Response: We thank the commenter for the valuable input. We recognize that the proliferation of SaaS procedures has created a need for the agency to continue to update our payment approach. We are continuing to work to improve SaaS payment policy in future rulemakings to enhance our ability to provide equitable payment for SaaS procedures while responsibly managing cost and protecting the Medicare trust fund.

69. APC and Status Indicator Review Process

Each year, CMS receives a high volume of requests from stakeholders and other interested parties to make certain OPPS payment policy changes, including many requesting changes to the APC and status indicator assignments of new or revised codes. Current APC groupings, APC assignments, and status indicators are reflected in the various addenda to the proposed and final OPPS payment rules. In addition, comments within the scope of the proposed rule, are summarized and responded to in the annual OPPS final rule with comment period. Comment: We received one comment requesting that CMS outline a process that describes the criteria used to determine which stakeholder requests regarding APC assignments are included in the OPPS proposed rule. The commenter suggested that all APC assignment requests, including APC structure requests, be included in the OPPS proposed rule and that we should follow a process similar to the IPPS, which includes an annual deadline, and requests discussed in the following year's proposed rule. Response: We appreciate the feedback and will consider this comment for future rulemaking. As a reminder, 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 [[Page 94131]] 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. Comment: We received one comment requesting information about our process for assigning status indicator ``E1'' to CPT or HCPCS codes that are not FDA approved. The commenter asserts that the delay in timing (from FDA approval to APC and SI assignment) affects beneficiary access to new technologies and services and impacts how other payers will pay for the services. Response: We appreciate the feedback. We believe for items and services that are not FDA approved, it is appropriate to assign 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 are either not covered by any Medicare outpatient benefit category, statutorily excluded by Medicare, or not reasonable and necessary. We rely on stakeholders to notify us upon FDA approval of their device and/or service and we work to ensure a timely transition and assign the applicable codes to APCs that reflect clinical and resource similarity to the new codes. We accept information regarding the device and/or service that the stakeholder can provide to us to assist us in our review. We remind readers that OPPS payment policies are updated quarterly through a sub-regulatory 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 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.\30\ --------------------------------------------------------------------------- \30\ 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 13 device categories eligible for pass-through payment. These devices are listed in Table 112 of this final rule where we detail the expiration dates of pass-through payment status for each of the 13 devices currently receiving device pass- through payment. [[Page 94132]] [GRAPHIC] [TIFF OMITTED] TR27NO24.139 [[Page 94133]] As discussed in section IV.A.2. New Device Pass-Through Applications for CY 2024 of the CY 2024 OPPS/ASC final rule with comment period, we approved HCPCS code C1601 (Endoscope, single-use (i.e. disposable), pulmonary, imaging/illumination device (insertable)), as a new device category for pass-through status under the OPPS, with an effective date of January 1, 2024. For the full discussion of the criteria used to evaluate device pass-through applications, refer to the CY 2024 OPPS/ASC final rule with comment period, which was published in the Federal Register on November 22, 2023 (88 FR 81729 through 81743). We note that HCPCS code C1601 was established for a bronchoscope that can only be used for a single procedure and cannot be reprocessed. As such, HCPCS code C1601 only describes devices that cannot be reprocessed. In addition, as discussed in section IV.A.2 (New Device Pass- Through Applications for CY 2023) of the CY 2023 OPPS/ASC final rule with comment period, we approved HCPCS code C1747 (Endoscope, single- use (i.e. disposable), urinary tract, imaging/illumination device (insertable)), as a new device category for pass-through status under the OPPS, with an effective date of January 1, 2023. For the full discussion on the criteria used to evaluate device pass-through applications, refer to the CY 2023 OPPS/ASC final rule with comment period, which was published in the Federal Register on November 23, 2022 (87 FR 71929 through 71934). We note that HCPCS code C1747 was established for a ureteroscope that can only be used for a single procedure and cannot be reprocessed. As such, HCPCS code C1747 only describes devices that cannot be reprocessed.

2. New Device Pass-Through Applications for CY 2025

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 subregulatory 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 [[Page 94134]] included in the next applicable OPPS annual rulemaking cycle or withdrawing their application from consideration. Under this notice- and-comment process, applicants may submit new evidence, such as clinical trial results published in a peer-reviewed journal or other materials, for consideration during the public comment process for the proposed rule. This process allows those applications that we are able to determine meet all of the criteria for device pass-through payment under the quarterly review process to receive timely pass-through payment status, while still allowing for a transparent, public review process for all applications (80 FR 70417 through 70418). In the CY 2020 annual rulemaking process, we finalized an alternative pathway for devices that are granted a Breakthrough Device designation (84 FR 61295) and receive FDA marketing authorization 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 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 2025 We received 14 complete applications by the March 1, 2024, quarterly deadline, which was the last quarterly deadline for applications to be received in time to be included in this final rule. Of the complete applications, we received two applications in the second quarter of 2023, two application in the third quarter of 2023, three applications in the fourth quarter of 2023, and seven applications in the first quarter of 2024. Three of the applications were approved for device pass-through payment during the quarterly review process: The DETOURTM System, which was preliminarily approved upon quarterly review under the alternative pathway effective January 1, 2024, and the AVEIRTM DR Dual Chamber Leadless Pacemaker System and the EndoSound Vision SystemTM (EVSTM) which both were preliminarily approved upon quarterly review under the alternative pathway effective July 1, 2024. As previously stated, all applications that are preliminarily approved upon quarterly review will automatically be included in the next applicable OPPS annual rulemaking cycle. Therefore, the DETOURTM System, the AVEIRTM DR Dual Chamber Leadless Pacemaker System, and the EndoSound Vision SystemTM (EVSTM) are discussed in the following section IV.2.b.1. 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, 2024, deadline are included below. We did not include the description and discussion of new device category for transitional pass-through payment status applications which were included in the proposed rule that were withdrawn for consideration for the upcoming calendar year. We also do not summarize or respond to public comments received regarding these withdrawn or ineligible applications. (1) Alternative Pathway Device Pass-Through Applications We received 10 device pass-through applications by the March 2024 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 were eligible to apply under the alternative pathway. (a) AGENTTM Paclitaxel-Coated Balloon Catheter Boston Scientific Corporation submitted an application for a new device category for transitional pass-through payment status for the AGENTTM Paclitaxel-Coated Balloon Catheter for CY 2025. Per the applicant, the AGENTTM Paclitaxel-Coated Balloon Catheter is a device/drug combination product consisting of a semi- compliant intracoronary balloon catheter with a paclitaxel/acetyl tributyl citrate drug coating on the balloon component. The applicant asserted that the AGENTTM Paclitaxel-Coated Balloon Catheter delivers paclitaxel, an antiproliferative drug, directly to the arterial tissue which inhibits the proliferation of neointimal smooth muscle cells without introducing an additional stent layer, thereby reducing the rate of restenosis. According to the applicant, the AGENTTM Paclitaxel-Coated Balloon Catheter is intended for use in adult patients, after appropriate vessel preparation, undergoing percutaneous coronary intervention (PCI) in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating in-stent restenosis (ISR) and the management of atherosclerotic coronary artery disease. Please refer to the online application posting for the AGENTTM Paclitaxel-Coated Balloon Catheter, available at https://mearis.cms.gov/public/publications/device-ptp/DEP2402295H2TU, for additional detail describing this device and the disease treated by the device. Comment: Many commenters expressed their support for the approval of transitional pass-through payment for the AGENTTM Paclitaxel-Coated Balloon Catheter. The commenters, including the applicant, emphasized their positive views on the device's transformational nature as a treatment for ISR, the device's ability to demonstrate clinical improvement relative to other available treatments, and the device's safety profile. In addition, many commenters expressed their concerns that without [[Page 94135]] adequate reimbursement many medical facilities may not adopt widespread use of the AGENTTM Paclitaxel-Coated Balloon Catheter. Response: We appreciate the commenters' input and support for the AGENTTM Paclitaxel-Coated Balloon Catheter application for transitional pass-through payment. We have taken these comments into consideration in our final determination for pass-through status for the AGENTTM Paclitaxel-Coated Balloon Catheter. 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), the AGENTTM Paclitaxel-Coated Balloon Catheter received FDA Breakthrough Device designation effective January 22, 2021, as a combination product indicated for percutaneous transluminal coronary angioplasty (PTCA) in coronary arteries 2.0 mm to 4.0 mm in diameter to treat ISR, up to 26 mm in length, for the purpose of improving myocardial perfusion. FDA approved the premarket approval application (PMA) for the AGENTTM Paclitaxel-Coated Balloon Catheter on February 29, 2024, as indicated for use after appropriate vessel preparation in adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating ISR. We noted that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we stated that we believe that FDA premarket approval indication is the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the AGENTTM Paclitaxel-Coated Balloon Catheter on February 29, 2024, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the AGENTTM Paclitaxel-Coated Balloon Catheter 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 the AGENTTM Paclitaxel-Coated Balloon Catheter received FDA premarket approval on February 29, 2024, for use after appropriate vessel preparation in adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating ISR. In addition, a few other commenters expressed their belief that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the newness criterion at Sec. 419.66(b)(1). Response: We appreciate the applicant's and commenters' input. The AGENTTM Paclitaxel-Coated Balloon Catheter received FDA Breakthrough Device designation effective January 22, 2021. We received the application for a new device category for transitional pass-through payment status for the AGENTTM Paclitaxel-Coated Balloon Catheter on February 29, 2024, which is within 3 years of February 29, 2024, the date of FDA premarket approval application. Based on our review of the application, we have determined that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criterion at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not explicitly indicate whether the AGENTTM Paclitaxel-Coated Balloon Catheter is integral to the service provided. The applicant stated that the AGENTTM Paclitaxel-Coated Balloon Catheter is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted as required by Sec. 419.66(b)(3). We invited public comment on whether the AGENT\TM\ Paclitaxel- Coated Balloon Catheter meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant and another commenter asserted that the AGENTTM Paclitaxel-Coated Balloon Catheter meets all the requirements of Sec. 419.66(b)(3). The applicant submitted a comment clarifying that the AGENTTM Paclitaxel-Coated Balloon Catheter is integral to the service provided and meets the eligibility criterion at Sec. 419.66(b)(3) because the service cannot be furnished without the AGENTTM Paclitaxel-Coated Balloon Catheter. Specifically, the applicant commented that that the AGENTTM Paclitaxel-Coated Balloon Catheter is a device/drug combination product consisting of a semi-compliant intracoronary balloon catheter with a drug coating consisting of paclitaxel/acetyl tributyl citrate on the balloon component. In addition, the applicant provided that the AGENTTM Paclitaxel-Coated Balloon Catheter is inserted transiently in a coronary artery suffering from ISR and transfers a long-dwelling, therapeutic dose of paclitaxel to the vessel wall of the artery to prevent ISR reoccurrence. The applicant reiterated that the AGENTTM Paclitaxel-Coated Balloon Catheter is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted. Response: We appreciate the applicant's and commenter's clarification, and we agree that the AGENTTM Paclitaxel- Coated Balloon Catheter is integral to the service furnished. We agree with the applicant and commenter that the AGENTTM Paclitaxel-Coated Balloon Catheter is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted, or applied in or on a wound or other skin lesion. After consideration of the public comments received and our review of the application, we have determined that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant did not indicate whether the AGENTTM Paclitaxel-Coated Balloon Catheter is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if the AGENT\TM\ Paclitaxel-Coated Balloon Catheter is a supply or material furnished incident to a service. We invited public comment on whether the AGENTTM Paclitaxel-Coated Balloon Catheter meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant and commenter submitted a comment clarifying that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the eligibility criterion at Sec. 419.66(b)(4) because it is not equipment, an instrument, apparatus, implement or any type of item for which depreciation and financing expenses are recovered, and because it is the primary therapeutic intervention and is not a supply or material furnished incident to a service. Response: We appreciate the applicant's and commenter's clarification. We agree with the [[Page 94136]] applicant and commenter that the AGENTTM Paclitaxel-Coated Balloon Catheter is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. After consideration of the public comments received and our review of the application, we have determined that the AGENTTM Paclitaxel-Coated Balloon Catheter 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. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the AGENTTM Paclitaxel-Coated Balloon Catheter. Per the applicant, while device category C2623 (Catheter, transluminal angioplasty, drug-coated, non-laser) describes related or similar products to the AGENTTM Paclitaxel-Coated Balloon Catheter, the AGENTTM Paclitaxel-Coated Balloon Catheter is not appropriately described by C2623 because the devices in this category differ from the AGENTTM Paclitaxel-Coated Balloon Catheter in both size and indicated use, and therefore, the device is not appropriately described by C2623. The applicant further claimed that the devices described by C2623 are approved for use in the femoral or popliteal arteries in vessels with a diameter of at least 4.0 mm, whereas the AGENTTM Paclitaxel-Coated Balloon Catheter is indicated for use in coronary arteries that are between 2.0 mm to 4.0 mm in diameter. In addition, the applicant also noted that the length of the lesions (up to 180 mm) treated with devices in this device category greatly exceeds the maximum lesion size of 26 mm for the AGENTTM Paclitaxel-Coated Balloon Catheter. Moreover, the applicant asserted that the devices described by C2623 are used to treat peripheral arterial disease and are contraindicated for use in coronary arteries. Per the applicant, the AGENTTM Paclitaxel-Coated Balloon Catheter is used in conjunction with transluminal PCIs which are described by different procedure codes than the percutaneous transluminal angioplasty services used for the devices in C2623. Lastly, the applicant stated that an analysis of claims found that the devices described by C2623 are typically reported with femoral or popliteal revascularization procedures (HCPCS codes from 37224 to 37227). We noted that, based on the description the applicant provided, the AGENTTM Paclitaxel-Coated Balloon Catheter is a device/drug combination product consisting of a semi-compliant intracoronary balloon catheter with a paclitaxel/acetyl tributyl citrate drug coating on the balloon component and thus could be appropriately described by C2623. Specifically, we stated that we believe that C2623 may appropriately describe the AGENTTM Paclitaxel-Coated Balloon Catheter because it is a non-laser, drug-coated catheter used for transluminal angioplasty procedures. In this context, we noted that we believe the AGENTTM Paclitaxel-Coated Balloon Catheter may be similar to the devices described by C2623, and therefore, the AGENTTM Paclitaxel-Coated Balloon Catheter may also be appropriately described by C2623. In addition, while we acknowledged that when C2623 was established as a device category code effective April 1, 2015, the procedure codes with which C2623 could be reported (HCPCS code 37224 and HCPCS code 37226) were limited to use in the femoral or popliteal arteries. However, based on the subsequent changes that were made to the procedure codes with which C2623 could be reported, we did not agree that C2623 is limited to use with femoral or popliteal revascularization procedures. First, we noted that effective August 25, 2017, while C2623 was in device pass-through payment status, CMS added two procedure codes with which C2623 could be reported that were for procedures other than femoral popliteal revascularization procedures. Specifically, based on the FDA approval of a new indication for an existing device (a drug-coated balloon catheter for use with dialysis circuit procedures for the treatment of patients with dysfunctional arteriovenous fistulae),\31\ CMS added two procedure codes, HCPCS codes 36902 and 36903 (transluminal balloon angioplasty procedures in peripheral dialysis segments),\32\ with which C2623 could be reported effective August 25, 2017. The devices used with these two added HCPCS codes, 36902 and 36903, which are also described by C2623, are drug- coated balloon catheters used for dialysis circuit procedures in the upper extremities. We stated that we believe the inclusion of these additional reportable procedure codes illustrates that devices that may be described by C2623 were neither intended to be restricted to the treatment of vascular lesions of a specified dimension nor anatomically limited to femoral or popliteal revascularization procedures and is inconsistent with the applicant's assertion that the AGENTTM Paclitaxel-Coated Balloon Catheter is not appropriately described by C2623 because the category is only applicable for devices used in femoral or popliteal arteries with a diameter of at least 4.0 mm, and not smaller coronary arteries. --------------------------------------------------------------------------- \31\ Centers for Medicare & Medicaid Services (2017). Pub 100-04 Medicare Claims Processing (Transmittal 3941) in CMS Manual System. Accessed at https://www.cms.gov/regulations-and-guidance/guidance/transmittals/2017downloads/r3941cp.pdf. \32\ HCPCS code 36902 (Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiological supervision and interpretation and image documentation and report; with transluminal balloon angioplasty, peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty) and HCPCS code 36903 (Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiological supervision and interpretation and image documentation and report; with transcatheter placement of intravascular stent(s) peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the stenting, and all angioplasty within the peripheral dialysis segment). --------------------------------------------------------------------------- Further, beginning January 1, 2018, upon the expiration of device pass-through payment status for C2623, CMS packaged the payment for the costs of each of the devices described by C2623 into the payment for the costs related to the procedure with which each device is reported in the hospital claims data (FR 82 59321 through 59323). We further noted that upon becoming packaged for payment, C2623 effectively became reportable with other transluminal angioplasty procedure codes, including procedure codes for percutaneous coronary transluminal angioplasty services. Finally, we noted that while, per the applicant, the devices described by C2623 are typically reported with femoral or popliteal revascularization procedures, other procedure codes, including procedure codes for other percutaneous transluminal angioplasty services and [[Page 94137]] other related coronary procedure codes can and have been performed with devices described by C2623. As such, we stated that we believe the procedures with which the AGENTTM Paclitaxel-Coated Balloon Catheter is utilized could be reported with C2623. In this context, based on the description the applicant provided, we stated that we believe the AGENTTM Paclitaxel-Coated Balloon Catheter may be similar to the devices described by C2623, and therefore, the AGENTTM Paclitaxel-Coated Balloon Catheter may also be appropriately described by C2623. We invited public comment on whether the AGENT\TM\ Paclitaxel- Coated Balloon Catheter meets the device category criterion at Sec. 419.66(c)(1). Comment: In response to our concerns that the AGENTTM Paclitaxel-Coated Balloon Catheter may be appropriately described by C2623, the applicant and many commenters asserted that the AGENTTM Paclitaxel-Coated Balloon Catheter is not described by C2623 because the device is not used to perform transluminal angioplasties. Specifically, these commenters explained that the AGENTTM Paclitaxel-Coated Balloon Catheter is used to effectively deliver its drug to a lesion after the vessel wall has been prepared, typically through an angioplasty. They also asserted that C2623 is used to describe drug-coated balloons indicated for use in the peripheral vasculature which are capable of both angioplasty and drug- delivery; however, according to the commenters, the AGENTTM Paclitaxel-Coated Balloon Catheter is used solely for drug-delivery and cannot be used for performing an angioplasty. In addition, the applicant commented that peripheral drug-coated balloon catheters, like those described by C2623, are primarily used for treating typically diffused atherosclerotic/restenotic lesions in the comparatively elastic femoral or popliteal arteries, whereas coronary drug-coated balloons are used for treatment of substantially smaller, stented (and therefore, relatively inelastic) coronary segments, with largely focal lesions. Similarly, many commenters underlined the differences between the AGENTTM Paclitaxel-Coated Balloon Catheter and peripheral drug-coated balloon catheters, including design, size, deployment location and time length, clinical indication, and procedural complexity. The applicant and a few commenters noted that CMS has historically included specific anatomy in several device categories, including those differentiating coronary and non-coronary devices. The applicant offered the following as examples of device categories that are specific to a particular type of intervention: C1759 (Catheter, intracardiac echocardiography), C1761 (Catheter, transluminal intravascular lithotripsy, coronary), and C1888 (Catheter, ablation, non-cardiac, endovascular). A few commenters highlighted device categories that are more granular in description than C2623, such as C1714 (Catheter, transluminal atherectomy, directional), C1724 (Catheter, transluminal atherectomy, rotational), C1732 (Catheter, electrophysiology, diagnostic/ablation, 3D or vector mapping), and C1733 (Catheter, electrophysiology, diagnostic/ablation, other than 3D or vector mapping, other than cool-tip), and suggested that CMS similarly acknowledge the differences between the AGENTTM Paclitaxel-Coated Balloon Catheter and those devices in device category C2623. Response: We appreciate the applicant's and commenters' input. We note that while the FDA Breakthrough Device designation for the AGENTTM Paclitaxel-Coated Balloon Catheter stated a proposed indication for PTCA in coronary arteries 2.0 mm to 4.0 mm in diameter to treat ISR, up to 26 mm in length, for the purpose of improving myocardial perfusion, the FDA PMA for the AGENTTM Paclitaxel-Coated Balloon Catheter on February 29, 2024, stated the combination drug/device is indicated for use after appropriate vessel preparation in adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating ISR, removing the PTCA indication. This appears to be consistent with the applicant's and commenters' assertions that the AGENTTM Paclitaxel- Coated Balloon Catheter is not utilized in the treatment of PTCA. After consideration of the public comments received, we agree that the AGENTTM Paclitaxel-Coated Balloon Catheter is not indicated for use in transluminal angioplasty; rather, it is intended for improving myocardial perfusion when treating in-stent restenosis after appropriate vessel preparation. Further, we agree that C2623 describes drug-coated balloons which are capable of angioplasty, while the AGENTTM Paclitaxel-Coated Balloon Catheter appears to be used solely for drug-delivery and cannot be used for performing an angioplasty, including PCTAs. As such, we do not believe that the AGENTTM Paclitaxel-Coated Balloon Catheter is described by C2623. We acknowledge that CMS has included specific anatomic language in the descriptors of previous device category codes when such language was necessary based on the unique circumstances surrounding the establishment of a particular device category code. We note that CMS does not establish pass-through device categories for the purposes of describing specific devices, but rather, device categories which are intended to encompass all devices that can be appropriately described by a category. As such, all device categories, regardless of the language utilized in the descriptors, are established in such a way that no medical device is described by more than one category in accordance with section 1833(t)(6)(B)(ii)(II) of the Act. After consideration of the public comments received and our review of the application, we agree there is no existing category or category previously in effect that appropriately describes the AGENTTM Paclitaxel-Coated Balloon Catheter. Based on this information, we have determined that the AGENTTM Paclitaxel- Coated Balloon Catheter 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 AGENTTM Paclitaxel- Coated Balloon Catheter has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in the discussion of the newness criterion), and therefore, is not evaluated for substantial clinical improvement. We invited public comment on whether the AGENTTM Paclitaxel-Coated Balloon Catheter meets the device category criterion at Sec. 419.66(c)(2)(ii). Comment: The applicant and one commenter confirmed that the [[Page 94138]] AGENTTM Paclitaxel-Coated Balloon Catheter has received both Breakthrough Device designation and marketing authorization from FDA, meeting the device category criterion at Sec. 419.66(c)(2). Response: We appreciate the applicant's and commenter's input. The AGENTTM Paclitaxel-Coated Balloon Catheter has a Breakthrough Device designation effective January 22, 2021, and marketing authorization from FDA effective February 29, 2024, for the indication covered by the Breakthrough Device designation. Therefore, the AGENTTM Paclitaxel-Coated Balloon Catheter meets the criterion at 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). Based on our review of the application, we have determined that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the device category criterion at Sec. 419.66(c)(2). 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 the AGENTTM Paclitaxel-Coated Balloon Catheter would be reported with the HCPCS codes as shown in Table 113. [GRAPHIC] [TIFF OMITTED] TR27NO24.140 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 (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. 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 applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2024 payment rate of $5,445.84 at the time the application was received. HCPCS code 92920 in APC 5192 had a device offset amount of $1,662.61 at the time the application was received. According to the applicant, the cost of the AGENTTM Paclitaxel-Coated Balloon Catheter is $5,500.00. 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 average reasonable cost of $5,500.00 for the AGENTTM Paclitaxel- Coated Balloon Catheter is 101.00 percent of the applicable APC payment amount for the service related to the category of devices of $5,445.84 (($5,500.00/$5,445.84) x 100 = 101.00 percent). Therefore, we stated that we believe the AGENTTM Paclitaxel-Coated Balloon Catheter 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 $5,500.00 for the AGENTTM Paclitaxel-Coated Balloon Catheter is 330.81 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,662.61 (($5,500.00/$1,662.61) x 100 = 330.81 percent). Therefore, we stated that we believe the AGENTTM Paclitaxel-Coated Balloon Catheter 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 $5,500.00 for the AGENTTM Paclitaxel- Coated Balloon Catheter and the portion of the APC payment amount for the device of $1,662.61 is 70.46 percent of the APC payment amount for the related service of $5,445.84 ((($5,500.00 - [[Page 94139]] $1,662.61)/$ 5,445.84) x 100 = 70.46 percent). Therefore, we stated that we believe the AGENTTM Paclitaxel-Coated Balloon Catheter meets the third cost significance requirement. We invited public comment on whether the AGENTTM Paclitaxel-Coated Balloon Catheter 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 and a commenter reiterated that the AGENTTM Paclitaxel- Coated Balloon Catheter meets all three of the cost significance criteria. Response: We appreciate the applicant's and commenter's input. After consideration of the public comments received and our findings from the first, second, and third cost significance tests, we agree that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the cost significance criteria specified at Sec. 419.66(d). After consideration of the public comments received and our review of the device pass-through application, we have determined that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the requirements for device pass-through status described at Sec. 419.66. We are finalizing approval for device pass-through payment status for the AGENTTM Paclitaxel-Coated Balloon Catheter effective January 1, 2025 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) AveirTM DR Dual Chamber Leadless Pacemaker System Abbott Laboratories submitted an application for a new device category for transitional pass-through payment status for the AveirTM DR Dual Chamber Leadless Pacemaker System (AveirTM DR System) for CY 2025. Per the applicant, the AveirTM DR System is comprised of two leadless pacemakers, one atrial and one ventricular with each containing a generator and electrodes, that provide dual-chamber pacing therapy after being placed within the heart's myocardium through a minimally invasive catheter- based procedure. According to the applicant, the AveirTM DR System is without the need for traditional wire electrodes and can provide beat-to-beat communication and synchrony between the two pacemakers for the treatment of arrhythmia/bradycardia. Per the applicant, patients with indication for dual-chamber pacing would benefit from a dual-chamber leadless pacemaker system that provides atrial and ventricular bradycardia therapy, while eliminating the complications associated with conventional pacing systems. Please refer to the online application posting for the AveirTM DR System, available at https://mearis.cmsgov/public/publications/device-ptp/DEP230831B8DX0, for additional detail describing the device and the disease treated by the device. 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), the AveirTM DR System received FDA Breakthrough Device designation effective March 27, 2020, as a pacemaker implantation indicated in one or more of the following permanent conditions: syncope, presyncope, fatigue, disorientation due to arrhythmia/bradycardia, or any combination of these symptoms. FDA approved the premarket approval application (PMA) for the AveirTM DR System on June 29, 2023, for the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the AveirTM DR System on March 23, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the AveirTM DR System meets the newness criterion at Sec. 419.66(b)(1). We did not receive public comments regarding whether the AveirTM DR System meets the newness criterion at Sec. 419.66(b)(1). The AveirTM DR System received FDA Breakthrough Device designation effective March 27, 2020. We received the application for a new device category for transitional pass-through payment status for the AveirTM DR System on March 23, 2023, which is within 3 years of June 29, 2023, the date of FDA PMA. Based on our review of the application, we have determined that the AveirTM DR System meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. As noted in the proposed rule, the applicant did not indicate whether the AveirTM DR System is integral to the service furnished. The applicant also did not explicitly state that the AveirTM DR System is single-use; however, the applicant did state that one AveirTM DR System is required per patient per procedure. While the applicant did not explicitly state whether the AveirTM DR System comes in contact with human tissue or is surgically inserted or implanted, the applicant noted that the two AveirTM Delivery Catheters are inserted into the peripheral vasculature and the cardiovascular system to deliver and implant the AveirTM AR Atrial Leadless Pacemaker and the AveirTM VR Ventricular Leadless Pacemaker into the right atrium and right ventricle of the heart, respectively. We invited public comment on whether the AveirTM DR System meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment confirming that the AveirTM DR System is an integral part of the service provided, is used for one patient only, comes in contact with human tissue, and is surgically inserted or implanted using two delivery catheters that are inserted into the peripheral vasculature and cardiovascular system to deliver and implant the AveirTM AR Atrial Leadless Pacemaker and the AveirTM VR Ventricular Leadless Pacemaker into the right atrium and right ventricle of the heart, respectively. The applicant also stated that therefore, it believes the AveirTM DR System meets the eligibility criterion at Sec. 419.66(b)(3). Response: We appreciate the applicant's input. We agree with the applicant that the AveirTM DR System 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, or applied in or on a wound or other skin lesion. After consideration of the public comment received and our review of the application, we have determined that the AveirTM DR System meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant did not indicate whether the AveirTM DR System is equipment, an instrument, apparatus, implement, or item of this type for which depreciating and financing expenses are recovered, [[Page 94140]] or if the AveirTM DR System is a supply or material furnished incident to a service. We invited public comment on whether the AveirTM DR System meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant confirmed that the AveirTM DR System is not an instrument, apparatus, implement, or similar item for which depreciation and financing expenses are recovered. The applicant also stated that the AveirTM DR System is not a supply or material furnished incident to a service, and therefore, meets the eligibility criterion at Sec. 419.66(b)(4). Response: We appreciate the applicant's input. With respect to the eligibility criterion at Sec. 419.66(b)(4), we agree with the applicant that the AveirTM DR System is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. After consideration of the public comment received and our review of the application, we have determined that the AveirTM DR System 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 asserted that the AveirTM DR System is the only dual-chamber leadless pacemaker authorized by FDA and indicated for implantation in patients with one or more of the following permanent conditions: syncope, presyncope, fatigue, disorientation due to arrhythmia/bradycardia, or any combination of those conditions. Per the applicant, the AveirTM DR System is a modular dual-chamber leadless pacemaker system with bidirectional implant-to-implant communication that can accommodate all pacing indications. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the AveirTM DR System. The applicant stated that device categories C1785 (Pacemaker, dual-chamber, rate-responsive (implantable)) and C1889 (Insertable/implantable device, not otherwise classified) do not appropriately describe the AveirTM DR System because the AveirTM DR System received Breakthrough Device designation from FDA and has specific functionality and capabilities that are new to the market. The applicant also asserted that the AveirTM DR system is modular, such that a single device can be implanted in a heart chamber initially, and the second pacemaker added to the other heart chamber in the future should the clinical need arise; and therefore, it is not appropriately described by either C1785 or C1889. We did not identify an existing pass-through payment category that describes the AveirTM DR System. We invited public comment on whether the AveirTM DR System meets the device category criterion at Sec. 419.66(c)(1). Comment: The applicant agreed with CMS's assessment that there are no existing pass-through payment categories that describe the AveirTM DR System. Response: We appreciate the applicant's input. After consideration of the public comment received and our review of the application, we continue to believe that there is no existing category or category previously in effect that appropriately describes the AveirTM DR System. Therefore, we have determined that the AveirTM DR System 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 AveirTM DR System 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, is not evaluated for substantial clinical improvement. We invited public comment on whether the AveirTM DR System meets the device category criterion at Sec. 419.66(c)(2)(ii). We did not receive public comment regarding whether the AveirTM DR System meets the device category criterion at Sec. 419.66(c)(2)(ii). However, the AveirTM DR System has a Breakthrough Device designation effective March 27, 2020, and a marketing authorization from FDA effective June 29, 2023, for the indication covered by the Breakthrough Device designation. Therefore, the AveirTM DR System meets the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). Based on our review of the application, we have determined that the AveirTM DR System meets the device category criterion at Sec. 419.66(c)(2). 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 the AveirTM DR System would be reported with HCPCS codes as shown in Table 114. [[Page 94141]] [GRAPHIC] [TIFF OMITTED] TR27NO24.141 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 (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. 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 applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5224, which had a CY 2023 payment rate of $18,672.01 at the time the application was received. We used the CY 2023 APC level device offset amount of $11,739.09 for APC 5224, as HCPCS codes 0795T and 0801T provided by the applicant were not included in Addendum P to the CY 2023 OPPS/ASC final rule with comment period and no CY 2023 HCPCS/CPT code level device offset amount was available at the time the application was received.\33\ According to the applicant, the cost of the AveirTM DR System is $24,000.00. --------------------------------------------------------------------------- \33\ We noted that the applicant originally utilized APC 5231 (Level 1 ICD and Similar Procedures) for the three tests of the cost criteria in the application. However, the applicant provided supplemental information indicating that, HCPCS codes 0795T and 0801T were assigned to APC 5224 (Level 4 Pacemaker and Similar Procedures) in the corrected Addendum B to the CY 2024 OPPS/ASC final rule with comment period and they believed that APC 5224 is currently the appropriate APC for the purposes of performing the cost significance calculations. We agreed with the applicant and selected APC 5224 for our calculation, which we believe is a more appropriate APC to use based on the assignment of HCPCS codes 0795T and 0801T to APC 5224 and the clinical similarity to other pacemaker insertion codes in APC 5224. --------------------------------------------------------------------------- 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 average reasonable cost of $24,000.00 for the AveirTM DR System is 128.54 percent of the applicable APC payment amount for the service related to the category of devices of $18,672.01 (($24,000.00/ $18,672.01) x 100 = 128.54 percent). Therefore, we stated that we believe the AveirTM DR System 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 $24,000.00 for the AveirTM DR System is 204.45 percent of the cost of the device-related portion of the APC payment amount for the related service of $11,739.09 (($24,000.00/$11,739.09) x 100 = 204.45 percent). Therefore, we stated that we believe the AveirTM DR System 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 $24,000.00 for the AveirTM DR System and the portion of the APC payment amount for the device of $11,739.09 is 65.66 percent of the APC payment amount for the related service of $18,672.01 ((($24,000.00-$11,739.09)/$ 18,672.01) x 100 = 65.66 percent). Therefore, we stated that we believe the AveirTM DR System meets the third cost significance requirement. We invited public comment on whether the AveirTM DR System 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 the AveirTM DR System meets all three of the cost significance criteria. Response: We appreciate the applicant's input. After consideration of the public comment we received and our findings from the first, second, and third cost significance tests, we agree that the AveirTM DR System meets the cost significance criteria specified at Sec. 419.66(d). [[Page 94142]] Comment: The applicant submitted a comment requesting that CMS revise the proposed device offset for HCPCS code 0795T (Transcatheter insertion of permanent dual-chamber leadless pacemaker, including imaging guidance (e.g., fluoroscopy, venous ultrasound, right atrial angiography, right ventriculography, femoral venography) and device evaluation (e.g., interrogation or programming), when performed; complete system (i.e., right atrial and right ventricular pacemaker components)) used to report dual-chamber leadless pacemaker procedures. Response: We appreciate the applicant's input regarding the device offset amount associated with HCPCS code 0795T. We note that we have addressed this comment in Section IV.B of this final rule with comment period. As discussed, the AveirTM DR System pass-through application was preliminarily approved for transitional pass-through payment under the alternative pathway effective July 1, 2024. After consideration of the public comment we received and our review of the device pass-through application, we have determined that the AveirTM DR System meets the requirements for device pass- through status described at Sec. 419.66 and we are finalizing approval for device pass-through payment status for the AveirTM DR System 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. (c) The DETOURTM System Endologix, LLC submitted an application for a new device category for transitional pass-through payment status for the DETOURTM System for CY 2025. According to the applicant, the DETOURTM System is an implantable component, used to create a femoropopliteal bypass routed through the femoral vein. The DETOURTM System is comprised of two main components: (1) the TORUSTM Stent Graft System, which is comprised of the TORUSTM Stent Graft and the TORUSTM Stent Graft Delivery System, and (2) the ENDOCROSSTM Device. Per the applicant, the DETOURTM System is used to treat patients with advanced peripheral vascular disease, specifically those with long complex femoropopliteal artery stenoses and occlusions resulting in lifestyle limiting claudication or severe lower limb threatening ischemia. According to the applicant, the DETOURTM System can restore arterial blood flow to the lower limb around the blocked femoral artery and allows for venous blood flow around the conduit for normal venous return, to reduce signs and symptoms of lower limb ischemia and prevent amputation. Please refer to the online application posting for the DETOURTM System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP23090164QL2, for additional detail describing the device and the disease treated by the device. 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), the DETOURTM System received FDA Breakthrough Device designation effective September 2, 2020, under the name the PQ Bypass System, as a device intended for percutaneous revascularization of symptomatic femoropopliteal lesions 200mm to 460mm with a chronic total occlusion 100mm to 425mm, and/or moderate-to- severe calcification, and/or in-stent-restenosis in patients with severe peripheral arterial disease. FDA approved the premarket approval application (PMA) for the DETOURTM System on June 7, 2023, indicated for use for percutaneous revascularization in patients with symptomatic femoropopliteal lesions from 200 mm to 460 mm in length with chronic total occlusions (100 mm to 425 mm) or diffuse stenosis >70 percent who may be considered suboptimal candidates for surgical or alternative endovascular treatments. The DETOURTM System, or any of its components, is not for use in the coronary and cerebral vasculature. We noted that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we stated we believe that FDA premarket approval indication is the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the DETOURTM System on September 1, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the DETOURTM System meets the newness criterion at Sec. 419.66(b)(1). We did not receive public comments regarding whether the DETOURTM System meets the newness criterion at Sec. 419.66(b)(1). The DETOURTM System received FDA Breakthrough Device designation effective September 2, 2020. We received the application for a new device category for transitional pass-through payment status for the DETOUR[Ocirc] System on September 1, 2023, which is within 3 years of June 7, 2023, the date of FDA PMA. Based on our review of the application, we have determined that the DETOURTM System meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. Per the applicant, the DETOURTM System is integral to the service provided and is used for one patient only. While the applicant did not indicate whether the DETOURTM System comes in contact with human tissue, the applicant did specify that both components of the DETOURTM System, the TORUSTM Stent Graft System and the ENDOCROSSTM Device, are inserted or implanted during the percutaneous transmural femoropopliteal bypass procedure, as required by Sec. 419.66(b)(3). We invited public comments on whether the DETOURTM System meets the eligibility criterion at Sec. 419.66(b)(3). We did not receive public comments regarding whether the DETOURTM System meets the eligibility requirements of Sec. 419.66(b)(3). As noted in the proposed rule, the applicant did not indicate that the DETOURTM System comes in contact with human tissue. However, because both components of the DETOURTM System, the TORUSTM Stent Graft System and the ENDOCROSSTM Device, are inserted or implanted during the percutaneous transmural femoralpopliteal bypass procedure, we believe that the DETOURTM System comes into contact with human tissue. After consideration of the information in the application, we have determined that the DETOURTM System meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant asserted that the DETOURTM System meets the device eligibility [[Page 94143]] requirements because it is not 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 the DETOURTM System meets the exclusion criterion at Sec. 419.66(b)(4). We did not receive public comments regarding whether the DETOURTM System meets the eligibility requirements of Sec. 419.66(b)(4). Based on our review of the application, we agree with the applicant that the DETOURTM System is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. Therefore, we have determined that the DETOURTM System 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 that the DETOURTM System is a minimally invasive, single-use device with an implantable component, used to create a femoropopliteal bypass routed through the femoral vein. The applicant provided a list of existing and previous device categories for pass-through payment for other stents and explained why they do not believe any of the categories describe the DETOURTM System. In summary, the applicant asserted that the referenced device categories do not adequately describe the DETOURTM System because, in contrast to the DETOURTM System, the referenced device categories do not have: (1) a crossing device with long needle for transmural access, (2) a crossing device with high pressure needle delivery for heavily calcified and atherosclerotic arteries, (3) a high radial strength transmural stent graft capable of self-support and sustaining blood flow through conduit bridging artery to vein and back to artery, (4) a percutaneous stent graft delivery catheter, (5) a covered stent graft to allow for arterial blood flow within the conduit as venous blood flows around it in the vein, or (6) a permanent implant to maintain arterial and venous blood flow. The reasons the applicant asserted for why the DETOURTM System is not adequately described by each of the device categories are shown in Table 115. [GRAPHIC] [TIFF OMITTED] TR27NO24.142 [[Page 94144]] We did not identify an existing pass-through payment category that describes the DETOURTM System. We invited public comment on whether the DETOURTM System meets the device category criterion at Sec. 419.66(c)(1). We did not receive any comments regarding whether the DETOURTM System meets the eligibility requirements at Sec. 419.66(c)(1). Based on our review of the application, we continue to believe there is no existing category or category previously in effect that appropriately describes the DETOURTM System. Therefore, we have determined that the DETOURTM System 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 DETOURTM System 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, is not evaluated for substantial clinical improvement. We invited public comment on whether the DETOURTM System meets the device category criterion at Sec. 419.66(c)(2). We did not receive public comment regarding whether the DETOURTM System meets the device category criterion at Sec. 419.66(c)(2). However, the DETOURTM System has a Breakthrough Device designation effective September 2, 2020, and marketing authorization from FDA effective June 7, 2023, for the indication covered by the Breakthrough Device. Therefore, the DETOURTM System meets the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). Based on our review of the application, we have determined that the DETOURTM System meets the device category criterion at Sec. 419.66(c)(2). 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 the DETOURTM System would be reported with the HCPCS code as shown in Table 116. [GRAPHIC] [TIFF OMITTED] TR27NO24.143 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 (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. 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 applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, like the applicant, we used APC 5193, which had a CY 2023 payment rate of $10,615.31 at the time the application was received. HCPCS code 0505T in APC 5193 had a CY 2023 device offset amount of $5,229.10 at the time the application was received. According to the applicant, the cost of the DETOURTM System is $25,000.00. 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 average reasonable cost of $25,000.00 for the DETOURTM System is 235.51 percent of the applicable APC payment amount for the service related to the category of devices of $10,615.31 (($25,000.00/ $10,615.31) x 100 = 235.51 percent). Therefore, we stated that we believe the DETOURTM System 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 $25,000.00 for the DETOURTM System is 478.09 percent of the cost of the device-related portion of the APC payment amount for the related service of $5,229.10 (($25,000.00/$5,229.10) x 100 = 478.09 percent). Therefore, we stated that we believe the DETOURTM System 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 [[Page 94145]] service. The difference between the estimated average reasonable cost of $25,000.00 for the DETOURTM System and the portion of the APC payment amount for the device of $5,229.10 is 186.25 percent of the APC payment amount for the related service of $10,615.31 ((($25,000.00- $5,229.10)/$10,615.31) x 100 = 186.25 percent). Therefore, we stated that we believe the DETOURTM System meets the third cost significance requirement. We invited public comment on whether the DETOURTM System 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 regarding whether the DETOUR[Ocirc] System meets the cost significance criteria as described at Sec. 419.66(d). Based on our findings from the first, second, and third cost significance tests, we have determined that the DETOUR[Ocirc] System meets the cost significance criteria specified at Sec. 419,66(d). Comment: The applicant commented that the device offset amount assigned to HCPCS code 0505T should remain at $0.00 to align with the precedent set for similarly situated devices and ensure that hospitals continue to receive full and fair reimbursement for C1604. Response: We appreciate the applicant's input regarding the device offset amount associated with HCPCS code 0505T. We note that we have addressed this comment in section IV.B of this final rule with comment period. As discussed, the DETOURTM System pass-through application was preliminarily approved for transitional pass-through payment under the alternative pathway effective January 1, 2024. After our review of the device pass-through application, we have determined that the DETOUR[Ocirc] System meets the requirements for device pass- through status described at Sec. 419.66 and we are finalizing approval for device pass-through payment status for the DETOUR[Ocirc] System 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. (d) EndoSound Vision SystemTM (EVSTM) EndoSound, Inc. submitted an application for a new device category for transitional pass-through payment status for the EVSTM for CY 2025. The applicant is only seeking a new device category for transitional pass-through payment status for the Ultrasound Disposable Kit--Diagnostic/Therapeutic (UDK-T) component (hereinafter referred to as ``UDK-T'') of the EVSTM. According to the applicant, the EVSTM is an ultrasound system designed to externally attach to an upper gastrointestinal (GI) endoscope (gastroscope/upper (EGD) endoscope). Per the applicant, the EVSTM is a device that, once attached to an EGD endoscope, temporarily converts the EGD endoscope to a fully capable endoscopic ultrasound (EUS) endoscope. The applicant asserted that the EVSTM can be coupled with an upper GI endoscope device to enable real-time ultrasound imaging, ultrasound guided needle aspiration, and other EUS guided procedures within the upper GI tract and surrounding organs. According to the applicant, the EVSTM consists of: (1) the EVS Scanner, a beamformer/scanner that performs ultrasound signal processing; (2) the Ultrasound Transducer Module (UTM), a reusable transducer assembly that converts the electrical signals from the scanner into ultrasound energy; (3) the Transducer Extension Cable (TEC), a cable/connector to interface the UTM to the EVS Scanner; and (4) the UDK-T, a disposable mounting kit with an operator control mechanism used to externally affix the EVSTM to a standard EGD endoscope and to provide needle and transducer angulation while maintaining the native gastroscope controls. Please refer to the online application posting for the EVSTM, available at https://mearis.cms.gov/public/publications/device-ptp/DEP240228GJT0X, for additional detail describing this device and the disease treated by the device. 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), the EVSTM, which includes the UDK-T, received FDA Breakthrough Device designation effective July 29, 2021, as a device intended to provide optical visualization of, ultrasonic visualization of, and therapeutic access to, the upper GI tract including but not restricted to the organs, tissues, and subsystems: esophagus, stomach, duodenum, and underlying areas. FDA granted the applicant 510(k) clearance for the EVSTM on December 27, 2023, indicated for use such that when affixed to an endoscope, is intended to provide ultrasonic visualization of, and ultrasound guided therapeutic access to the upper GI tract including but not restricted to the organs, tissues, and subsystems: esophagus, stomach, duodenum, and underlying areas. The EVSTM, mounted on an endoscope, is introduced orally when indications consistent with the requirement for a GI procedure are met. The EVSTM is a prescription-only device to be used by a qualified physician. The clinical environments where the system can be used include clinics, hospitals, and ambulatory surgery centers. We noted that while the indication for the FDA Breakthrough Device designation and the indication for the FDA 510(k) clearance vary slightly, we stated we believe that the FDA 510(k) clearance indication is the one covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the EVSTM on February 28, 2024, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the EVSTM, inclusive of the UDK-T component, 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 clarified that the EVSTM received FDA market authorization for 510(k) clearance. The applicant asserted that, according to FDA guidance,\34\ 510(k) clearance is permissible for pre-determined Breakthrough Device designation and stated there were no changes specific to device components, mechanism of use, or indications of use for either the Breakthrough Device designation or the 510(k) clearance. The applicant stated the 510(k) clearance occurred within 3 years of the submission of the pass-through application such that the EVSTM meets the newness criterion at 42 CFR 419.66(b)(1). --------------------------------------------------------------------------- \34\ See Breakthrough Devices Program, Guidance for Industry and Food and Drug Administration Staff Document issued on September 15, 2023. https://www.fda.gov/media/162413/download. --------------------------------------------------------------------------- Response: We appreciate the commenter's input. The EVSTM received Breakthrough Device designation effective July 29, 2021. We received the application for a new device category for transitional pass-through payment status for the EVSTM on February 28, 2024, which is within 3 years of December 27, 2023, the date of FDA 510(k) clearance. Based on our review of the application, we have determined that the EVSTM meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criterion at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in [[Page 94146]] contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the UDK-T component of the EVSTM is integral to the service furnished; however, the applicant did indicate that the UDK-T is single-use, comes in contact with human tissue, and is inserted as part of an endoscopy procedure. We preliminarily approved the EVSTM HCPCS code C1606 (Adapter, single-use (i.e., disposable), for attaching ultrasound system to upper gastrointestinal endoscope) upon quarterly review under the alternative pathway with an effective date of July 1, 2024. We noted that C1606 was established for an adapter for attaching an ultrasound system to an upper GI endoscope that can only be used for a single procedure and cannot be reprocessed. As such, C1606 only describes devices that cannot be reprocessed. We invited public comment on whether the UDK-T component of the EVSTM meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment reiterating that the EVSTM is used for one patient, comes into contact with human tissue, and is surgically implanted or inserted. The applicant clarified that the C1606 device component (i.e., the UDK-T component) of the EVSTM meets the Sec. 419.66(b)(3) criteria and is integral to the function and operation of the EVSTM. The applicant further commented that C1606 was established for an adapter for attaching an ultrasound system to an upper GI endoscope that can only be used for a single procedure and cannot be reprocessed. The applicant asserted that the C1606 device component of the EVSTM meets the eligibility criterion at 42 CFR 419.66(b)(3). Response: We appreciate the applicant's clarification. We agree with the applicant that the UDK-T component of the EVSTM is integral to the function and operation of the EVSTM and that the device is used for one patient only, comes into contact with human tissue, and is surgically implanted or inserted. After consideration of the applicant's comments and our review of the application we have determined that the UDK-T component of the EVSTM meets the eligibility requirement at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant claimed that the UDK-T meets the device eligibility requirements because it is not equipment or an item for which depreciation and financing expenses are recovered. In addition, the applicant asserted that the UDK-T is not a supply or material. We invited public comment on whether the UDK-T component of the EVSTM meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment reiterating that the UDK-T component of the EVSTM is not equipment or an item for which depreciation and financing expenses are recovered and is not a supply or material. Response: We appreciate the applicant's input. We agree with the applicant that the UDK-T component of the EVSTM is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. After consideration of the applicant comments we received and our review of the application, we have determined that the UDK-T component of the EVSTM 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. According to the applicant, the EVSTM is an ultrasound system designed to externally attach to an upper GI endoscope (gastroscope/upper (EGD) endoscope). According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the UDK-T. Per the applicant, device category C1748 (Endoscope, single-use (i.e., disposable), Upper GI, imaging/illumination device (insertable)) does not appropriately describe the EVSTM, inclusive of the UDK- T, because: (1) the EVSTM, inclusive of the UDK-T, enables an endoscope that a hospital has to have added functionalities such as the ability to perform an EUS procedure, but is not an endoscope like the devices in C1748; (2) the EVSTM, inclusive of the UDK-T, when used with an endoscope allows EUS procedures to be done without an elevator, unlike the other devices described in C1748; and (3) the EVSTM, inclusive of the UDK-T, and the devices described in C1748 are used in different procedures. The applicant explained that CMS indicated that C1748 should always be billed with a HCPCS code in the ranges of 43260-43265 and 43274-43278, but there is no overlap between those HCPCS codes billed with C1748 and the HCPCS codes the applicant stated that the EVSTM would be reported with as shown in Table 48 of the CY 2025 OPPS/ASC proposed rule. We did not identify an existing pass-through payment category that describes the UDK-T component of the EVSTM. We invited public comment on whether the UDK-T component of the EVSTM meets the device category criterion at Sec. 419.66(c)(1). Comment: The applicant agreed with CMS' assessment that there are no existing pass-through payment categories that describe the UDK-T component of the EVSTM. The applicant further asserted that there is no other product similar in how the EVSTM assembles, operates, and functions and that, therefore, the device meets the criteria in 42 CFR 419.66(c)(1). Response: We appreciate the applicant's input. After consideration of the comment and our review of the application, we continue to believe that there is no existing category or category previously in effect that appropriately describes the UDK-T component of the EVSTM. Therefore, we have determined that the UDK-T component of the EVSTM 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 [[Page 94147]] Device designation. The EVSTM, inclusive of the UDK-T, 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 is not evaluated for substantial clinical improvement. We invited public comment on whether the EVSTM, inclusive of the UDK-T component, meets the device category criterion at Sec. 419.66(c)(2)(ii). Comment: The applicant reiterated that the EVSTM and its components were granted Breakthrough Device designation and received FDA marketing authorization for the indication covered by the Breakthrough Device designation, and therefore, meets the criteria at 42 CFR 419.66(c)(2)(ii). Response: We appreciate the applicant's comment. The EVSTM and its components have a Breakthrough Device designation effective July 29, 2021, and marketing authorization from FDA effective December 27, 2023, for the indication covered by the Breakthrough designation. Therefore, the EVSTM meets the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). Based on our review of the application and the applicant's comments, we have determined that the EVSTM meets the device category criterion at Sec. 419.66(c)(2). 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 the EVSTM would be reported with HCPCS codes as shown in Table 117. [GRAPHIC] [TIFF OMITTED] TR27NO24.144 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 (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. 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 applicant used the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, [[Page 94148]] we used APC 5302, which had a CY 2024 payment rate of $1,812.99 at the time the application was received. HCPCS code 43232 in APC 5302 had a CY 2024 device offset amount of $14.50 at the time the application was received.\35\ According to the applicant, the cost of the disposable, single-use UDK-T component of the EVSTM is $500.00. --------------------------------------------------------------------------- \35\ We noted that the applicant selected the APC payment rate of $1,814.88 and the APC level device offset amount of $178.95 for APC 5302. However, the values selected are inconsistent with the APC payment rate and the APC level device offset amount found in CY 2024 OPPS APC Offset File, which were corrected as described in the CY 2024 OPPS/ASC final rule with comment period correction (89 FR 9002). The HCPCS/CPT code level device offset amounts for the HCPCS/ CPT codes provided by the applicant are available in the corrected Addendum P to the CY 2024 OPPS/ASC final rule with comment period. For our calculation, we selected the APC payment rate of $1,812.99 and the HCPCS/CPT code level device offset amount of $14.50 related to HCPCS 43232 in APC 5302 found in the corrected Addendum P, which are the accurate values for these codes. Based on our initial assessment in the proposed rule, using the APC payment rate of $1,812.99 and the device offset amount of $14.50 would result in the EVSTM 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 average reasonable cost of $500.00 for the UDK-T is 27.59 percent of the applicable APC payment amount for the service related to the category of devices of $1,812.99 (($500.00/$1,812.99) x 100 = 27.59 percent). Therefore, we stated that we believe the UDK-T component of the EVSTM 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 $500.00 for the UDK-T is 3,448.28 percent of the cost of the device-related portion of the APC payment amount for the related service of $14.50 (($500.00/ $14.50) x 100 = 3,448.28 percent). Therefore, we stated that we believe the UDK-T component of the EVSTM 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 $500.00 for the UDK-T and the portion of the APC payment amount for the device of $14.50 is 26.78 percent of the APC payment amount for the related service of $1,812.99 ((($500.00 - $14.50)/$1,812.99) x 100 = 26.78 percent). Therefore, we stated that we believe the UDK-T component of the EVSTM meets the third cost significance requirement. We invited public comment on whether the UDK-T component of the EVSTM 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 the cost criterion, the applicant agreed that the UDK-T component of the EVSTM meets all three of the cost criterion outlined in 42 CFR 419.66(c)(3) and (d)(1) through (3). Response: We appreciate the applicant's input. After consideration of the comment we received and our findings from the first, second, and third cost significance tests, we agree that the UDK-T component of the EVSTM meets the cost significance criteria specified at Sec. 419.66(d). As discussed, the UDK-T component of the EVSTM pass- through application was preliminarily approved for transitional pass- through payment under the alternative pathway effective July 1, 2024. After considering the applicant comment received and our review of the device pass-through application, we have determined that the UDK-T component of EVSTM meets the requirements for device pass- through status described at Sec. 419.66. We are finalizing approval for device pass-through payment status for the UDK-T component of the EVSTM 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. Comment: The applicant commented that HCPCS codes 43240 and 43253 should be added to the list of procedures that can be reported with C1606. The applicant stated that in Table 48 of the CY 2025 OPPS/ASC proposed rule, there are 6 primary HCPCS procedures codes reported with the nominated device, including HCPCS codes 43231, 43232, 43237, 43238, 43242, and 43259. The applicant stated that in the July 2024 ASC code pairs file,\36\ dated June 14, 2024, 8 primary HCPCS procedures codes were listed with HCPCS code C1606, which included the HCPCS codes listed included those listed in proposed rule, with the addition of HCPCS codes 43240 and 43253. The applicant agreed with the preliminary approval of pass-through status for the nominated device and requested that it should be made clear that the 8 procedures codes on the July 2024 ASC code pairs file for C1606 are the procedures that can be reported with C1606. --------------------------------------------------------------------------- \36\ July 2024 ASC code pairs file: https://www.cms.gov/license/ama?file=/files/zip/july-2024-asc-codepairs.zip. --------------------------------------------------------------------------- Response: We thank the applicant for the comment. We will evaluate this request and add HCPCS codes 43240 and 43253 to the list of procedures that can be reported with C1606 if appropriate. (e) iFuse Bedrock GraniteTM Implant System SI-BONE submitted an application for a new device category for transitional pass-through payment status for the iFuse Bedrock GraniteTM Implant System for CY 2025. According to the applicant, the iFuse Bedrock GraniteTM Implant System consists of iFuse GraniteTM implants of various lengths and diameters and associated instruments sets. The titanium (Ti-6Al-4V ELI) iFuse GraniteTM implant consists of a porous fusion sleeve with threaded length attached to a solid post that has connection and implant placement features of a typical pedicle fixation screw. The iFuse GraniteTM implant is intended to provide sacropelvic fusion of the sacroiliac joint (when placed in the sacral-alar-iliac (SAI) trajectory) and fixation to the pelvis when used in conjunction with commercially available pedicle screw fixation systems as a foundational element for segmental spinal fusion only when performing both a lumbar and a sacroiliac joint (SIJ) fusion procedure in the same operative session. The applicant asserted that joint fusion occurs as a result of the device's porous surface and interstices and fixation occurs through the device's helical threaded design and traditional posterior fixation rod connection. Per the applicant, the device can be placed into the pelvis in two trajectories: the SAI trajectory (i.e., into the sacrum, across the SIJ and into the ilium), or directly into the ilium. The applicant explained that the iFuse GraniteTM implant is typically placed in the SAI trajectory, bilaterally, and [[Page 94149]] oftentimes stacked to achieve two points of fusion and fixation/ stabilization across each SIJ. According to the applicant, the iFuse GraniteTM implant may also be used in a single, but bilateral, configuration, where only two implants may be required when replacing traditional pedicle screws in either a SAI trajectory or iliac trajectory. The applicant asserted that the iFuse Bedrock GraniteTM Implant System is always used in addition to lumbar fusion instrumentation when used to perform lumbar and SIJ fusion at the same time. Please refer to the online application posting for the iFuse Bedrock GraniteTM Implant System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP240220LPFNM, for additional detail describing the device and the disease treated by the device. Comment: One commenter strongly encouraged CMS to consider the iFuse Bedrock GraniteTM Implant System as having met all requirements for transitional pass-through payment status for CY 2025 and noting that that the device has Breakthrough Device designation for lumbar spinal deformity indications and was granted with New Technology Add-on Payment status effective in FY 2023 (87 FR 48780). Response: We appreciate the commenters' input and support for the iFuse Bedrock GraniteTM Implant System application for transitional pass-through payment. We have taken these comments into consideration in our final determination for pass-through status for the iFuse Bedrock GraniteTM Implant System. 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), the iFuse Bedrock GraniteTM Implant System received FDA Breakthrough Device designation effective November 23, 2021, as a treatment of the acute and chronic instabilities or deformities of the thoracic, lumbar, and sacral spine, including: (1) degenerative disc disease (DDD), as defined by back pain of discogenic origin with degeneration of the disc confirmed by patient history and radiographic studies; (2) severe spondylolisthesis (Grades 3 and 4) of the L5-S1 vertebra; (3) skeletally mature patients receiving fusions by autogenous bone graft having implants attached to the lumbar and sacral spine (L3 to sacrum) with removal of the implants after the attainment of a solid fusion; (4) spondylolisthesis; (5) trauma (i.e., fracture or dislocation); (6) spinal stenosis; (7) deformities or curvatures (i.e., scoliosis, kyphosis, and/or lordosis); (8) spinal tumor; and (9) pseudarthrosis, and/or failed previous fusion. Subsequently, FDA also granted the applicant 510(k) clearance for the iFuse Bedrock GraniteTM Implant System on May 26, 2022, and December 22, 2022, for the indication covered by the Breakthrough Device designation with one additional indication for use: SIJ dysfunction that is a direct result of SIJ disruption and degenerative sacroiliitis, including conditions whose symptoms began during pregnancy or in the peripartum period and have persisted postpartum for more than 6 months. We noted that the 510(k) clearance dated December 22, 2022, expanded the previously cleared indication of the iFuse Bedrock GraniteTM Implant System to include general compatibility with certain compatible pedicle screw systems, whereas the indications under the May 26, 2022, 510(k) clearance only addressed compatibility of the iFuse Bedrock GraniteTM Implant System with the SeaSpine Mariner Pedicle Screw System. Each 510(k) clearance, the May 26, 2022, and the December 22, 2022, are covered by the November 23, 2021, Breakthrough Device designation for the iFuse Bedrock GraniteTM Implant System. We received the application for a new device category for transitional pass-through payment status for the iFuse Bedrock GraniteTM Implant System on February 20, 2024, which is within 3 years of the dates of the May 26, 2022, and December 22, 2022, FDA marketing authorizations for the iFuse Bedrock GraniteTM Implant System. We invited public comment on whether the iFuse Bedrock GraniteTM Implant System 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 the iFuse Bedrock GraniteTM Implant System received FDA marketing authorization on May 26, 2022. The applicant requested that CMS begin the newness period for the iFuse Bedrock GraniteTM Implant System using the FDA Breakthrough Device designation of November 23, 2021, and the earlier market availability date of May 26, 2022, for the 510(k) marketing authorization. Response: We appreciate the applicant's input. We agree with the applicant that the market availability date for the iFuse Bedrock GraniteTM Implant System should be May 26, 2022, rather than December 22, 2022, because that is when the device became commercially available. We received the application for a new device category for transitional pass-through payment status for the iFuse Bedrock GraniteTM Implant System on February 20, 2024, which is within 3 years of May 26, 2022, the date of 510(k) clearance. After consideration of the public comments received and our review of the application, we have determined that the iFuse Bedrock GraniteTM Implant System meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criterion at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate if the iFuse Bedrock GraniteTM Implant System is integral to the service furnished. The applicant provided that the iFuse Bedrock GraniteTM Implant System is single-use, permanently implanted, and surgically inserted into the patient. However, we noted that we do not have sufficient information to determine if the associated instruments sets included in the iFuse Bedrock GraniteTM Implant System meet the eligibility criterion at Sec. 419.66(b)(3). We invited public comment on whether the iFuse Bedrock GraniteTM Implant System meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment clarifying that the iFuse Bedrock GraniteTM Implant System, including the associated instrument sets included in the iFuse Bedrock GraniteTM Implant System, meet the eligibility criterion at Sec. 419.66(b)(3). Specifically, the applicant stated that the iFuse Bedrock GraniteTM Implant System technology, including the associated instrument sets is integral to the service furnished, is single-use, permanently implanted, and surgically inserted into the patient, aligning fully with Sec. 419.66(b)(3). Response: We thank the applicant for the additional information. We agree with the applicant that the iFuse Bedrock GraniteTM Implant System, including the associated instrument sets, is an integral part of the service furnished, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted, or applied in or on a wound or other skin lesion. After consideration of the public comments received and our review of the application, we have determined that the iFuse Bedrock GraniteTM Implant System meets the criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at Sec. 419.66(b)(4), a device is not eligible to be considered for device pass-through [[Page 94150]] 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). The applicant did not indicate whether the iFuse Bedrock GraniteTM Implant System is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if the iFuse Bedrock GraniteTM Implant System is a supply or material furnished incident to a service. We invited public comment on whether the iFuse Bedrock GraniteTM Implant System meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment clarifying that the iFuse Bedrock GraniteTM Implant System is not a material or supply furnished incident to a service and meets the eligibility criterion at Sec. 419.66(b)(4) because neither the implant nor its associated instrument sets are a material or supply furnished incident to a service, and that the iFuse Bedrock GraniteTM Implant System operates like a vast majority of spine and orthopedic hardware typically used in surgery of this type. The applicant also confirmed that the iFuse Bedrock GraniteTM Implant System is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets. Response: We appreciate the applicant's input. We agree with the applicant that the iFuse Bedrock GraniteTM Implant System, including the associated instruments, is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply such as a suture or clip furnished incident to a service. After consideration of the public comments received and our review of the application, we have determined that the iFuse Bedrock GraniteTM Implant System 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. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the iFuse Bedrock GraniteTM Implant System. Per the applicant, the device category C1821 (Interspinous process distraction device) does not appropriately describe the iFuse Bedrock Granite\TM\ Implant System because the iFuse Bedrock GraniteTM Implant System is used to fixate and fuse, while the devices described in C1821 are interspinous spacers which, after implantation, are opened or expanded to distract the neural foramina and decompress the nerves. The applicant asserted that device category C1713 (Anchor/screw for opposing bone-to-bone or soft tissue-to-bone (implantable)) also does not appropriately describe the iFuse Bedrock GraniteTM Implant System because the iFuse Bedrock GraniteTM Implant System allows for simultaneous fusion of the SIJ and fixation of the pelvis by connecting via the Tulip Connector to the base of the stabilizing rods within the lumbosacral spinal construct, while C1713 includes implantable pins and/or screws that are used to oppose soft tissue-to-bone, tendon-to-bone, or bone- to-bone. Per the applicant, the device category C1889 (Implantable/ insertable device, not otherwise classified) also does not appropriately describe the iFuse Bedrock GraniteTM Implant System because it does not describe any specific device category, and therefore does not uniquely describe the device category proposed for the iFuse Bedrock GraniteTM Implant System. We noted that, according to the applicant, the iFuse Bedrock GraniteTM Implant System is intended to provide sacropelvic fusion of the sacroiliac joint (when placed in the SAI trajectory) and fixation to the pelvis when used in conjunction with commercially available pedicle screw fixation systems as a foundational element for segmental spinal fusion only when performing both a lumbar and SIJ fusion procedure in the same operative session. The applicant asserted that joint fusion occurs as a result of the device's porous surface and interstices and fixation occurs through the device's helical threaded design and traditional posterior fixation rod connection. We stated that we believe that the device category C1713 may appropriately describe the iFuse Bedrock GraniteTM Implant System and questioned whether a transfixing device utilizing the Tulip Connector is sufficiently distinguishable from traditional implantable pins or screws that it is meant to replace. In this context, based on the description the applicant provided, we stated that we believe the iFuse Bedrock GraniteTM Implant System may be similar to the devices described by C1713, and therefore, the iFuse Bedrock GraniteTM Implant System may also be appropriately described by C1713. In addition, we stated that we believe the device category C1889 may appropriately describe the iFuse Bedrock GraniteTM Implant System because C1889 may be used to describe any implantable/ insertable device that is not otherwise described by a more specific device category and is, therefore, sufficiently broad to include implantable devices that allow for simultaneous fusion of the SIJ and fixation of the pelvis. We noted that in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79562), CMS created C1889 with the specific intent to recognize devices furnished during a device intensive procedure that are not described by a specific Level II HCPCS Category C-code. In this context, we stated that we believe the iFuse Bedrock GraniteTM Implant System may be appropriately described by either C1713 or C1889. We invited public comment on whether the iFuse Bedrock GraniteTM Implant System meets the device category criterion at Sec. 419.66(c)(1). Comment: In response to our concerns that the iFuse Bedrock GraniteTM Implant System may be appropriately described by the device pass-through category C1713, the applicant and a few other commenters asserted that the iFuse Bedrock GraniteTM Implant System is not described by C1713. Specifically, the applicant relied upon the C1713 descriptor and supporting guidance: C1713: Anchor for opposing bone-to-bone or soft tissue-to-bone--Implantable pins and/or screws that are used to oppose soft tissue-to-bone, tendon-to-bone, or bone-to-bone. Screws oppose tissues via drilling as follows: soft tissue-to-bone, tendon-to-bone, or bone to-bone fixation. Pins are inserted or drilled into bone, principally with the intent to facilitate stabilization or oppose bone-to-bone. This may include orthopedic plates with accompanying washers and nuts. This category also applies to synthetic bone substitutes that may be used to fill bony void or gaps (i.e., bone substitute implanted into a bony defect created from trauma or surgery). The applicant and commenters clarified that, unlike [[Page 94151]] devices described by C1713, the iFuse Bedrock GraniteTM Implant System's intended use is not to anchor bone to bone, or soft tissue, tendons, or ligaments to bone, but to promote simultaneous pelvic stabilization and fusion across the SI joint space, via a unique and proprietary Tulip Connector that attaches to the spinal fusion construct. The applicant and another commenter further provided that the typical use scenarios for reporting C1713 include orthopedic procedures involving bone sutures, anchors, small plastic polyether ether ketone (PEEK) screws for bone-to-bone or bone-to-tendon/tissue connections, often in anatomic areas outside of the spine (including the extremities, shoulders, knees and small bones). Furthermore, the applicant and commenter noted that C1713 is used to report procedures that are mostly non-fusion applications with the intent to restore motion or function to anatomy(ies) and that C1713 can also include bone void filler or bone substitute materials (e.g., demineralized bone matrix, Subchondroplasty, etc.). The applicant and commenters specified that other implanted devices in this category restore motion while the iFuse Bedrock GraniteTM Implant System immobilizes; and that the iFuse Bedrock GraniteTM Implant System is intended to traverse an articulating joint space and fuse two bones via bridging the joint to immobilize it so bony fusion may occur. Response: We appreciate the applicant and commenters' clarifications and the additional information. We agree that the ability to simultaneously fuse the SIJ and fixate the pelvis to the spinal fusion construct distinguishes the iFuse Bedrock GraniteTM Implant System from other implant devices described by C1713 that anchor bone-to-bone, or soft tissue-to-bone, tendons-to-bone, or ligaments-to-bone. We also agree that the iFuse Bedrock GraniteTM Implant System is distinguishable from other implant devices described by C1713 because it secures bone to a metal rod via the Tulip Connector, and that typical C1713 implants do not include joint fusion technologies, and are not specific to anatomic areas, nor do they function similarly to the iFuse Bedrock GraniteTM. After consideration of the public comments we received and our review of the application, we agree that existing device category C1713 does not appropriately describe the iFuse Bedrock GraniteTM. Comment: In response to our concerns that the iFuse Bedrock GraniteTM Implant System may be appropriately described by C1889, the applicant and a few commenters noted that C1889 is not, and has not been, a device pass-through category code, and that it is not included in the complete list of device pass-through category codes. Response: We appreciate the commenters' input. We agree that C1889 is not a device pass-through category code, and therefore, agree that it is not relevant to our determination at Sec. 419.66(c)(1). After consideration of the public comments received and our review of the application, we agree there is no existing category or category previously in effect that appropriately describes the iFuse Bedrock GraniteTM Implant System. Based on this information, we have determined that the iFuse Bedrock GraniteTM Implant System 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 iFuse Bedrock GraniteTM Implant System has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement. We invited public comment on whether the iFuse Bedrock GraniteTM Implant System meets the device category criterion at Sec. 419.66(c)(2)(ii). We did not receive any public comment regarding whether the iFuse Bedrock GraniteTM Implant System meets the device category criterion at Sec. 419.66(c)(2)(ii). The iFuse Bedrock GraniteTM Implant System has a Breakthrough Device designation effective November 23, 2021, and marketing authorization from FDA effective May 26, 2022, for the indication covered by the Breakthrough Device designation. Based on our review of the application, we have determined that the iFuse Bedrock GraniteTM Implant System meets the device category criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.636(c)(2)(i). 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 the iFuse Bedrock GraniteTM Implant System would be reported with HCPCS codes shown in Table 118. [[Page 94152]] [GRAPHIC] [TIFF OMITTED] TR27NO24.145 According to the applicant, the iFuse Bedrock GraniteTM Implant System is only used when both a SIJ fusion procedure and a lumbar fusion procedure are performed in the same operative session. The applicant stated that the iFuse Bedrock GraniteTM Implant System is not utilized when only a SIJ fusion procedure is performed (HCPCS code 27279) or when only a lumbar fusion procedure is performed (HCPCS code 22612, 22630, or 22633). Rather, per the applicant, the appropriate coding of the procedure where the iFuse Bedrock GraniteTM Implant System is used should include the HCPCS code for SIJ fusion (HCPCS code 27279) and a HCPCS code for lumbar fusion (HCPCS code 22612, 22630, or 22633). Per the applicant, the selection of the primary lumbar fusion HCPCS code (HCPCS code 22612, 22630, or 22633) is dependent on the procedure performed. 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 (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. 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 applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5116, which had a CY 2024 payment rate of $17,756.28 at the time the application was received. The applicant stated the iFuse Bedrock GraniteTM Implant System device should be reported with the SIJ fusion procedure HCPCS code 27279 along with one of the three lumbar fusion procedures (HCPCS code 22612, 22630 or 22633). While the applicant utilized HCPCS code 22612 for the device offset amount for test two of the cost criterion, we stated that we believe that HCPCS code 27279 is the appropriate HCPCS code for the offset and subsequent calculation. Specifically, we understood that code 27279 is always reported when the iFuse Bedrock GraniteTM Implant System is used along with only one of the three specified lumbar fusion codes and that the SIJ fusion procedure described by code 27279 is always performed when the iFuse Bedrock GraniteTM is used along with just one of three possible lumbar procedures, depending on the specific surgical approach used. Therefore, we stated that we believe that neither HCPCS codes 22612, 22630, nor 22633 is appropriate to use for the cost criterion calculation. As such, we used HCPCS code 27279, the code that should always be reported with the iFuse Bedrock GraniteTM Implant System, for our calculations. HCPCS code 27279 in APC 5116 had a CY 2024 device offset amount of $12,264.26 at the time the application was received. According to the applicant, the cost of the iFuse Bedrock GraniteTM Implant System is $11,689.00. 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 average reasonable cost of $11,689.00 for the iFuse Bedrock GraniteTM Implant System is 65.83 percent of the applicable APC payment amount for the service related to the category of devices of $17,756.28 (($11,689.00/$17,756.28) x 100 = 65.83 percent). Therefore, we stated that we believe the iFuse Bedrock GraniteTM Implant System 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 $11,689.00 for the iFuse Bedrock GraniteTM Implant System is 95.31 percent of the cost of the device-related portion of the APC payment amount for the related service of $12,264.26 (($11,689.00/$12,264.26) x 100 = 95.31 percent). Therefore, we stated that we believe the iFuse Bedrock GraniteTM Implant System does not meet 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 $11,689.00 for the iFuse Bedrock GraniteTM Implant System and the portion of the APC payment amount for the device of $12,264.26 is negative 3.24 percent of the APC payment amount for the related service of $17,756.28 ((($11,689.00- $12,264.26)/$17,756.28) x 100 =-3.24 percent). Therefore, we stated that we believe the iFuse Bedrock [[Page 94153]] GraniteTM Implant System does not meet the third cost significance requirement. We invited public comment on whether the iFuse Bedrock GraniteTM Implant System meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. Comment: In response to our proposal to utilize HCPCS code 27279 for evaluation of cost criteria for the iFuse Bedrock GraniteTM Implant System, the applicant and another commenter asserted that the most appropriate HCPCS code to evaluate the criterion for the iFuse Bedrock GraniteTM Implant System is HCPCS code 22612. The applicant and another commenter provided several reasons: (1) The intended indication and use of the nominated device in the hospital outpatient and ASC setting will be in support of the lumbar spinal construct for lumbar fusion cases; (2) The typical patient for the nominated device has severe lumbar spinal pathology, such as scoliosis or kyphosis of the lumbar spine, as the primary diagnosis, whereas sacroiliac joint disease or dysfunction is not the primary diagnosis or procedure indication for these patients; and (3) As evidence of the consensus on this type of pelvic fixation to support lumbar patients, numerous commercial payers across the U.S. agree and have published medical coverage policies stating that SI joint fusion at the bottom of a long construct is covered for treatment of lumbar disease or dysfunction.\37\ The applicant claimed that in the outpatient setting, the iFuse Bedrock GraniteTM Implant System would always be used in conjunction with one of three spinal fusion procedures and would always be considered as a secondary procedure. The applicant stated that of the four relevant HCPCS codes in its application (HCPCS codes 22612, 22630, 22633, and 27279), the threshold for HCPCS code 22612 is the most appropriate for evaluating the cost criterion for the iFuse Bedrock GraniteTM Implant System. The applicant provided the following reasons: (1) HCPCS code 22612 is the only lumbar spinal fusion procedure payable by Medicare in both hospital outpatient and ASC settings; (2) HCPCS code 22612 has a lower device offset, consistent with CMS' policies; and (3) HCPCS code 22612 is the primary code in spinal fusion procedures in which the iFuse Bedrock GraniteTM will always be used as an adjunctive technology, when connected to compatible posterior spinal rods, to improve the potential outcome of the lumbar fusion case. Finally, the applicant argued that HCPCS code 22612 would also be appropriate from a primary assignment rank perspective, stating that since the nominated device will have multiple J1 HCPCS codes, it would be appropriate to determine which HCPCS code has the highest primary assignment ranking. The applicant referenced Addendum J of the CY 2024 final rule and the CY 2025 proposed rule stating that HCPCS code 22612 has a higher ranking for primary assignment purposes than HCPCS code 27279. The applicant claimed that it would be consistent with CMS' policy on assignment of primary procedures to select the cost threshold for HCPCS code 22612, as opposed to HCPCS code 27279, to assess the cost criterion for the iFuse Bedrock GraniteTM Implant System. --------------------------------------------------------------------------- \37\ Anthem CG-SURG-111: ``Open sacroiliac joint fusion procedures are considered medically necessar y. . . during multisegment spinal constructs (for example, correction of deformity in scoliosis or kyphosis surgery) extending to the ilium.'' Ref: https://www.anthem.com/dam/medpolicies/abcbs/active/guidelines/gl_pw_e001136.html (accessed August 24, 2024). --------------------------------------------------------------------------- Response: We thank the commenters for the additional information. Based on the updated information provided in the comments, we agree HCPCS code 22612 is an appropriate procedure code for the evaluation of the cost criterion for the iFuse Bedrock GraniteTM Implant System. As such, we have updated our calculations accordingly for the second and third cost significance requirements, at Sec. 419.66(d)(2) and (3), respectively as below. 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 average reasonable cost of $11,689 for the iFuse Bedrock GraniteTM Implant System is 136.75 percent of the cost of the device-related portion of the APC payment amount for the related service of $8,547.88 (($11,689.00/$8,547.88) x 100 = 136.75 percent). Therefore, we agree that the iFuse Bedrock GraniteTM Implant System meets the second cost significant 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 $11,689.00 for the iFuse Bedrock GraniteTM Implant System and the portion of the APC payment amount for the device of $8,547.88 is 17.70 percent of the APC payment amount for the related service of $17,756.28 ((($11,689.00-$8,547.88)/ $17,756.28) x 100 = 17.70 percent). Therefore, we agree that the iFuse Bedrock GraniteTM Implant System meets the third cost significance requirement. Comment: The applicant and another commenter stated that they believe it is appropriate for CMS to use the lowest APC payment rate applicable for use with the nominated device regarding the iFuse Bedrock GraniteTM Implant System, stating that this is consistent with increasing probability that the device will pass the cost significance test. The applicant and another commenter asserted that CMS should likewise use the offset amount that gives the nominated device the best opportunity to pass the test, arguing that HCPCS code 22612 is the most appropriate code for assessing the cost threshold in this context. Response: We thank the commenters for their input. As we explained in the CY 2005 OPPS/ASC 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. We note that in both the original evaluation of cost in the proposed rule as well as in the re-evaluation in this final rule, we followed this procedure by selecting the lowest, and in this case only, APC payment rate applicable for APC 5116 of $17,756. While we note that since 2017, we calculate the device offset amount at the HCPCS/CPT[supreg] code level instead of the APC level (89 FR 79657), we disagree that we are bound by the same policy to select the HCPCS code with the lowest offset amount. We believe that doing so would potentially conflict with our stated policy of selecting the lowest APC payment rate, which is intended to increase the probability the device will pass the cost significance test. We do, however, agree to use HCPCS code 22612 and its device offset amount for the evaluation of the cost criterion for the iFuse Bedrock GraniteTM Implant System, based on the updated information we received in the comments. Comment: The applicant requested that the iFuse Bedrock GraniteTM Implant System be approved for the transitional pass-through status and the [[Page 94154]] device offset amount should be set to $0. The applicant asserted that the costs of the iFuse Bedrock GraniteTM Implant System are not included as part of the device-related portion of the APC 5116 payment supporting hospitals performing a primary lumbar fusion procedure. The applicant stated that hospital outpatient departments and ASCs do not typically support combination lumbar fusion with SI joint fusion procedures performed in the same operative session, and claims data reveals an extremely low volume of these codes being reported together each year in the HOPD setting relative to other code pairings. In addition, the applicant stated that the iFuse Bedrock GraniteTM Implant System cannot be used as a stand-alone device; rather, it will only be used in conjunction with one of three lumbar spinal fusion procedures. The applicant referred to the CY 2024 and CY 2025 Addendum J files and stated that all three HCPCS codes describing lumbar fusion which are eligible for payment in the hospital outpatient setting (HCPCS 22612, 22630, and 22633) are all ranked higher for primary assignment purposes than HCPCS code 27279. The applicant therefore argued that the device costs of the iFuse Bedrock GraniteTM Implant System have not been appropriately included in the device offset of any of the fusion procedures. The applicant further stated that, since the costs of the iFuse Bedrock GraniteTM Implant System are purely additive for hospitals currently performing lumbar spinal fusion procedures (HCPCS codes 22612, 22630, or 22633) mapping to Comprehensive APC 5116, the applicant requested that CMS set the device offset to $0 when granting transitional pass-through status for the iFuse Bedrock GraniteTM Implant System for CY 2025. Response: After further review, we are persuaded by commenters that the iFuse Bedrock Granite\TM\ Implant System cannot be used as a stand- alone device and that it is only used in conjunction with the existing device costs for the lumbar spinal fusion procedures. Therefore, we agree that the device is not included in the existing APC payment amount for these procedures and a device offset amount under 42 CFR 419.66(h) would not be appropriate at this time. For CY 2025, for the procedures we described that are performed with this new transitional pass-through device category, we are accepting the commenter's recommendation to apply a $0 offset for the iFuse Bedrock Granite\TM\ Implant System. We refer the reader to Addendum B of this CY 2025 OPPS/ ASC final rule with comment period for APC payment rates. After consideration of the public comments we received and our findings from the first, second, and third cost significance tests, we agree that the iFuse Bedrock GraniteTM meets the cost significance criteria 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 iFuse Bedrock GraniteTM Implant System meets the criteria for device pass-through status described at Sec. 419.66. We are finalizing approval for device pass-through payment status for the iFuse Bedrock GraniteTM Implant System effective January 1, 2025, 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. (f) Paradise[supreg] Ultrasound Renal Denervation (RDN) System ReCor Medical, Inc. submitted an application for a new device category for transitional pass-through payment status for the Paradise[supreg] Ultrasound RDN System for CY 2025. Per the applicant, the Paradise[supreg] Ultrasound RDN System is a catheter-based system that delivers ultrasound energy in the location of sympathetic nerves surrounding the renal arteries. The applicant explained that the Paradise[supreg] Ultrasound RDN System is indicated to reduce blood pressure as an adjunctive treatment in patients with hypertension in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. According to the applicant, the Paradise[supreg] Catheter, when used with the other Paradise[supreg] Ultrasound RDN System components, provides complete 360-degree energy delivery and targeted ablation depth with each energy emission with the goal of disrupting the nerves and consequently achieving a reduction in systemic arterial blood pressure. The applicant asserted that the Paradise[supreg] Catheter protects the artery walls using a cooling system during periods of ultrasound energy emission (also called sonications). Per the applicant's instructions for use, the Paradise[supreg] Ultrasound RDN System includes the following components: (1) Paradise[supreg] Generator, which circulates coolant fluid and electrical energy to the Paradise[supreg] Catheter via the Paradise[supreg] Cable and Paradise[supreg] Cartridge; (2) Paradise[supreg] Catheter, which connects with the Paradise[supreg] Generator and has a distal balloon (available in six different diameters that correspond to varying artery diameter ranges) that is pressurized using coolant fluid; (3) Paradise[supreg] Cartridge, which controls the fluid flow into and out of the Paradise[supreg] Catheter when used in conjunction with the Paradise[supreg] Generator; (4) Paradise[supreg] Connection Cable, which transfers electrical energy from the Paradise[supreg] Generator to the Paradise[supreg] Catheter; (5) Paradise[supreg] Remote, included with the Paradise[supreg] Generator for optional use; and (6) Paradise[supreg] Cart, an optional wheeled cart to which the Paradise[supreg] Generator can be mounted to stabilize the Paradise[supreg] Generator during a procedure and to transport the Paradise[supreg] Generator from one location to another. Per the applicant, additional items required for the procedure include: (1) a bag of coolant fluid for inflation and cooling of balloon; (2) a 0.014 inch guidewire to track the Paradise[supreg] Catheter into position for delivery of ultrasound energy; (3) a push/pull style hemostasis valve; (4) a 6 French (Fr) or larger guide sheath; and (5) a 7 Fr or larger guide catheter. According to the applicant, the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable are single-patient, one-time use components of the system. According to the applicant, key steps for operating the Paradise[supreg] Ultrasound RDN System include: (1) gaining access to the femoral artery using standard interventional techniques and placing a 7 Fr (or larger) guide catheter; (2) advancing the 7 Fr guide catheter into the left or right renal artery under fluoroscopic guidance; (3) performing an angiogram to verify the patency of the left or right renal artery; (4) measuring the distal, mid, and proximal artery diameters and selecting the appropriate Paradise[supreg] Catheter balloon size; (5) preparing and attaching the Paradise[supreg] Cartridge, Paradise[supreg] Connection Cable, and sterile water supply, and connecting the Paradise[supreg] Cartridge extension tubing to the Paradise[supreg] Catheter; (6) preparing and flushing the Paradise[supreg] Catheter; removing access devices from the lumen of the guide catheter and inserting a 0.014 inch guidewire; (7) verifying the balloon on the Paradise[supreg] Catheter is deflated; (8) tracking the Paradise[supreg] Catheter over the guidewire and gently inserting the Paradise[supreg] Catheter into the push/pull style hemostasis valve and guide catheter; (9) advancing and positioning the Paradise[supreg] Catheter in desired locations within the renal arteries; (10) inflating the balloon via [[Page 94155]] the Paradise[supreg] Generator; (11) verifying the position of the balloon and catheter transducer via fluoroscopy and contrast injection; (12) performing denervation of the left and/or right renal artery by delivery of ultrasound energy; (13) verifying balloon deflation via fluoroscopy before moving to the next location; (14) withdrawing the Paradise[supreg] Catheter back into the guide catheter prior to moving the device into an alternate artery or accessory vessel, continuing to another position and exchanging the balloon catheter, as needed; (15) removing the Paradise[supreg] Catheter, ensuring that Paradise[supreg] Catheter balloon is in a deflated state prior to removal, by slowly withdrawing the Paradise[supreg] Catheter through the guide catheter, until completely withdrawn, and removing the guidewire and guide catheter; and (16) closing the wound per standard of practice. Please refer to the online application posting for the Paradise[supreg] RDN System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP231128137E1, for additional detail describing the device and the disease treated by the device. Comment: Many commenters expressed their support for the approval of the Paradise[supreg] Ultrasound RDN System for transitional pass- through payment. In addition, many commenters shared their positive experiences with the Paradise[supreg] Ultrasound RDN System. Response: We appreciate the commenters' input and support for the Paradise[supreg] Ultrasound RDN System application for transitional pass-through payment. We have taken these comments into consideration in our final determination for pass-through status for the Paradise[supreg] Ultrasound RDN System. 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), the Paradise[supreg] Ultrasound RDN System received FDA Breakthrough Device designation effective December 4, 2020, as a device with the indicated use to reduce blood pressure in adult (>=22 years of age) patients with uncontrolled hypertension, who may be inadequately responsive to, or who are intolerant to anti-hypertensive medications. FDA approved the premarket approval application (PMA) for the Paradise[supreg] Ultrasound RDN System on November 7, 2023, for the indicated use to reduce blood pressure as an adjunctive treatment in hypertension patients in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. We noted that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we believed that FDA premarket approval indication is the one covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the Paradise[supreg] Ultrasound RDN System on November 28, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the Paradise[supreg] Ultrasound RDN System 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 the Paradise[supreg] Ultrasound RDN System received Breakthrough Device designation and later FDA approval on November 7, 2023, and CMS received the application for a new device category for transitional pass-through payment status on November 28, 2023, which is within 3 years of FDA approval. A few commenters stated the Paradise[supreg] Ultrasound RDN System meets the newness criterion, with one commenter specifically noting that the Paradise[supreg] Ultrasound RDN System meets the newness criterion based on its FDA Breakthrough Device designation. Response: We appreciate the commenters' input. We agree with the applicant and commenters that the Paradise[supreg] Ultrasound RDN System meets the device eligibility requirements of Sec. 419.66(b)(1); however, while we agree that the Paradise[supreg] Ultrasound RDN System meets the eligibility criterion specified at Sec. 419.66(b)(1), we note that a device's uniqueness or FDA designation does not alone qualify a device for transitional pass-through payment. Specifically, 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 Paradise[supreg] Ultrasound RDN System received Breakthrough Device designation on December 4, 2020. We received the application for a new device category for transitional pass-through payment status for the Paradise[supreg] Ultrasound RDN System on November 28, 2023, which is within 3 years of November 7, 2023, the date of FDA PMA. Based on our review of the application, we have determined that the Paradise[supreg] Ultrasound RDN System meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, be used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not explicitly state whether the Paradise[supreg] Ultrasound RDN System is integral to the service furnished. With respect to whether the Paradise[supreg] Ultrasound RDN System is used for one patient only, the applicant asserted that the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable are single-patient use. However, the Paradise[supreg] Generator, Paradise[supreg] Remote, and Paradise[supreg] Cart are reusable and are capital equipment. While the applicant did not explicitly state whether the Paradise[supreg] Ultrasound RDN System comes into contact with human tissue, the applicant provided that the Paradise[supreg] Catheter is placed within the renal artery. According to the applicant, the Paradise[supreg] Ultrasound RDN System is an implantable device. We noted that the Paradise[supreg] Generator, Paradise[supreg] Remote, and Paradise[supreg] Cart are reusable, do not come in contact with the patient's tissue, are not surgically implanted or inserted, or applied in or on a wound or other skin lesion, as required by Sec. 419.66(b)(3). We invited public comment on whether the Paradise[supreg] Ultrasound RDN System meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment clarifying that the Paradise[supreg] Ultrasound RDN System is an integral part of the service furnished and meets the eligibility criterion at Sec. 419.66(b)(3) because the Paradise[supreg] Ultrasound RDN System performs the ablations via ultrasound which produce the therapeutic effect to reduce blood pressure. The applicant also clarified that the Paradise[supreg] Ultrasound RDN System comes into contact with human tissue and meets the eligibility criterion at Sec. 419.66(b)(3) because the Paradise[supreg] Ultrasound RDN System's ablation catheter comes in contact with human tissue and is surgically inserted into the body and removed at the end of the procedure. Finally, the applicant reiterated that the Paradise[supreg] Connector [[Page 94156]] Cable, Paradise[supreg] Cartridge, and Paradise[supreg] Catheter components of the Paradise[supreg] Ultrasound RDN System are single-use only and the Paradise[supreg] Catheter is surgically inserted into the body and removed at the end of the procedure. Response: We appreciate the applicant's input. We agree with the applicant that the Paradise[supreg] Ultrasound RDN System is an integral part of the service furnished, and is surgically implanted or inserted, or applied in or on a wound or other skin lesion. In addition, we agree that the Paradise[supreg] Connector Cable, Paradise[supreg] Cartridge, and Paradise[supreg] Catheter components of the Paradise[supreg] Ultrasound RDN System are used for one patient only and come in contact with human tissue. We continue our discussion and final determination of the criterion at Sec. 419.66(b)(3) in our response below. With respect to the exclusion criterion at 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). While the applicant did not explicitly state whether the Paradise[supreg] Ultrasound RDN System, or select components, is equipment, an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, per the applicant, the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable are single-use only. The applicant further explained that the Paradise[supreg] Generator, Paradise[supreg] Cart, and Paradise[supreg] Remote are capital equipment; as such, they are excluded from device pass-through payment eligibility under Sec. 419.66(b)(4). The applicant did not explicitly state whether the Paradise[supreg] Ultrasound RDN System is a supply or material furnished incident to a service. The applicant requested pass-through payment for the Paradise[supreg] Ultrasound RDN System, but we questioned whether only the Paradise[supreg] Catheter component of the Paradise[supreg] Ultrasound RDN System, as opposed to the whole system, is eligible for pass-through payments under Sec. 419.66(b)(3) or at Sec. 419.66(b)(4). We stated that we do not believe the Paradise[supreg] Generator, Paradise[supreg] Cable, Paradise[supreg] Cartridge, Paradise[supreg] Connection Cable, Paradise[supreg] Remote, or Paradise[supreg] Cart meet the eligibility requirements under Sec. 419.66(b)(3) or at Sec. 419.66(b)(4), and, as such, are not eligible for pass-through payments. We invited public comment on whether the Paradise[supreg] Ultrasound RDN System meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment clarifying that the Paradise[supreg] Cartridge and Paradise[supreg] Connector Cable meet the eligibility criterion at Sec. 419.66(b)(4) because they are critical parts of a single piece of equipment, they are not sold without the Paradise[supreg] Catheter, and because these two components are not separable from the Paradise[supreg] Catheter component. With regard to our question as to whether only the Paradise[supreg] Catheter component of the Paradise[supreg] Ultrasound RDN System is eligible for pass-through payments under Sec. 419.66(b)(3) or at Sec. 419.66(b)(4), the applicant stated that the Paradise[supreg] Cartridge and Paradise[supreg] Connector Cable are eligible for pass-through payment because the procedure cannot be performed without all three components, i.e., the Paradise[supreg] Catheter, the Paradise[supreg] Cartridge, and the Paradise[supreg] Connector Cable. The applicant further stated that while the Paradise[supreg] Connector Cable and Paradise[supreg] Cartridge are not inserted into the body, the Paradise[supreg] Catheter that is inserted into the body will not function without them. Therefore, the applicant asserted that the Paradise[supreg] Connector Cable and Paradise[supreg] Cartridge should also be eligible for transitional pass-through status along with the Paradise[supreg] Catheter. The applicant also confirmed that the Paradise[supreg] Generator, Paradise[supreg] Remote, and Paradise[supreg] Cart components of the Paradise[supreg] Ultrasound RDN System are capital equipment and are not eligible for pass-through payment. With regard to our question about whether the Paradise[supreg] Ultrasound RDN System is a supply or material furnished incident to a service, the applicant submitted a comment clarifying that the Paradise[supreg] Ultrasound RDN System is not a supply or material furnished incident to a service because the purpose of the procedure is to use the Paradise[supreg] Ultrasound RDN System to treat the patient with renal denervation; therefore, it is integral and essential and it is not a supply that is used incident to or for the purpose of doing another procedure. Response: We thank the applicant for the clarification and agree with the applicant that the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable components of the Paradise[supreg] Ultrasound RDN System meet the eligibility requirements under Sec. 419.66(b)(3) and (4) because the Paradise[supreg] Connector Cable and Paradise[supreg] Cartridge are required parts of a single piece of equipment, they are not sold without the Paradise[supreg] Catheter, they are single-use and they are not separable. We also agree with the applicant that the Paradise[supreg] Generator, Paradise[supreg] Remote, or Paradise[supreg] Cart are capital equipment and do not meet the eligibility requirements under Sec. 419.66(b)(3) or (4). Finally, we agree with the applicant that the Paradise[supreg] Ultrasound RDN System is not a material or supply furnished incident to a service. After consideration of the public comments we received and our review of the application, we have determined that the applicable components of the Paradise[supreg] Ultrasound RDN System meet the eligibility criteria at Sec. 419.66(b)(3) and (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. Per the applicant, the Paradise[supreg] Ultrasound RDN System is a catheter-based system that delivers ultrasound energy in the location of sympathetic nerves surrounding the renal arteries. According to the applicant, no previous or existing device categories for pass-through payment have encompassed the Paradise[supreg] Ultrasound RDN System. Per the applicant, device categories C1753 (Catheter, intravascular ultrasound) and C1888 (Catheter, ablation, noncardiac, endovascular (implantable)) do not appropriately describe the Paradise[supreg] Ultrasound RDN System. The applicant asserted that C1753 does not appropriately describe the Paradise[supreg] Ultrasound RDN System because the Paradise[supreg] Ultrasound RDN System is used to treat a disease and denervates renal nerves, whereas C1753 was created to describe ultrasound catheter devices that are not used to treat a disease and are used for imaging of the vessel. According to the applicant, C1888 does not appropriately describe the Paradise[supreg] Ultrasound RDN System because the Paradise[supreg] Ultrasound RDN System is intended to denervate renal nerves by using ultrasound energy that does not otherwise affect the blood vessel tissue, whereas C1888 was [[Page 94157]] created to describe devices that use radiofrequency or laser technologies to occlude or obliterate blood vessels.\38\ --------------------------------------------------------------------------- \38\ The applicant referenced the Medicare Claims Processing Manual, Chapter 4 to support these assertions. --------------------------------------------------------------------------- We did not identify an existing pass-through payment category that describes the Paradise[supreg] Ultrasound RDN System. We invited public comment on whether the Paradise[supreg] Ultrasound RDN System meets the device category criterion at Sec. 419.66(c)(1). Comment: The applicant and a few other commenters agreed with CMS' assessment that there are no existing pass-through payment categories that describe the Paradise[supreg] Ultrasound RDN System. Response: We appreciate the commenters' input. After consideration of the public comments we received and our review of the application, we continue to believe that there is no existing category or category previously in effect that appropriately describes the Paradise[supreg] Ultrasound RDN System. Therefore, we have determined that the Paradise[supreg] Ultrasound RDN System meets the device category eligibility criterion at Sec. 419.66(c)(1). We noted that the applicant indicated the Paradise[supreg] Ultrasound RDN System is the only device authorized by FDA with an indication for renal denervation using ultrasound energy to achieve reductions in blood pressure. However, we noted that the Symplicity SpyralTM Catheter (Symplicity SpyralTM RDN System) device, for which we also received an application for transitional pass-through payments for CY 2025 as discussed in the proposed rule (89 FR 59312 through 59315) and this final rule with comment, is also authorized by FDA with an indication for renal denervation using a radiofrequency modality to achieve reductions in blood pressure. Accordingly, we noted that while the Paradise[supreg] Ultrasound RDN System device may have a different modality (i.e., ultrasound compared to radiofrequency) than that of the Symplicity SpyralTM Catheter device, the Paradise[supreg] Ultrasound RDN System device may have a similar mechanism of action to that of the Symplicity SpyralTM Catheter device. We questioned whether the device descriptions provided in the respective applications support establishing two modality specific pass-through payment device categories or a single device category that would encompass both RDN device modalities. We address this question in section (i) in detail immediately following the full discussion of all other applicable eligibility criteria for both the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System applications. For the summary of public comments received and our final decision on the question of whether the device descriptions provided in the respective applications support establishing two modality-specific pass-through payment device categories or a single device category that would encompass both RDN device modalities, please see section (i) immediately following the Symplicity SpyralTM RDN System application determination. 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. As previously stated, the Paradise[supreg] Ultrasound RDN System has 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 is not evaluated for substantial clinical improvement. We invited public comment on whether the Paradise[supreg] Ultrasound RDN System meets the device category criterion at Sec. 419.66(c)(2)(ii). Comment: A few commenters stated that the Paradise[supreg] Ultrasound RDN System meets the eligibility criterion at Sec. 419.66(c)(2)(ii), with one commenter asserting that the Paradise[supreg] Ultrasound RDN System meets the clinical improvement criterion based on its FDA Breakthrough Device designation. Response: We appreciate the commenter's input. We agree with the commenters that the Paradise[supreg] Ultrasound RDN System has a Breakthrough Device designation effective December 4, 2020, and marketing authorization from FDA effective November 7, 2023, for the indication covered by the Breakthrough Device designation and therefore, meets the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). Based on our review of the application and consideration of the public comments we received, we have determined that the Paradise[supreg] Ultrasound RDN System meets the device category criterion at Sec. 419.66(c)(2). 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 the Paradise[supreg] Ultrasound RDN System would be reported with HCPCS codes shown in Table 119. [[Page 94158]] [GRAPHIC] [TIFF OMITTED] TR27NO24.146 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 (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. 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 applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2023 payment rate of $5,215.40 at the time the application was received. We used the CY 2023 APC level device offset amount of $1,491.08 for APC 5192, since HCPCS codes 0338T and 0339T were not included in Addendum P to the CY 2023 OPPS/ASC final rule with comment period and no CY 2023 HCPCS/CPT code level device offset amount was available at the time the application was received.\39\ According to the applicant, the operating cost \40\ of the Paradise[supreg] Ultrasound RDN System is $23,000.00. --------------------------------------------------------------------------- \39\ The applicant stated as neither HCPCS code 0338T nor 0339T had a device offset amount listed in Addendum P to the CY 2023 OPPS/ ASC final rule with comment period, it selected a device offset amount of $0.00. However, for our calculation, we selected the CY 2023 APC level device offset amount of $1,491.08 for APC 5192 found in CY 2023 NFRM OPPS APC Offset File, as no CY 2023 HCPCS/CPT code level device offset amount was available at the time the application was received. Based on our initial assessment for the proposed rule, using the device offset amount of $1,491.08 would result in the Paradise[supreg] Ultrasound RDN System meeting the cost significance requirement. \40\ According to the applicant, the current total cost of the Paradise[supreg] Ultrasound RDN System device is $23,235.00. For the cost criteria estimates, the applicant submitted an operating cost of $23,000.00 for the Paradise[supreg] Ultrasound RDN System device. Per the applicant, the individual component costs are as follows: Paradise[supreg] Remote (capital equipment) is $5.00; Paradise[supreg] Cart (capital equipment) is $5.00; Paradise[supreg] Generator (capital equipment) is $225.00; Paradise[supreg] RDN Catheter Kit (one time use) is $22,000.00; Paradise RDN Cable (one time use) is $250.00; and the Paradise[supreg] RDN Cartridge (one time use) is $750.00. --------------------------------------------------------------------------- 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 average reasonable cost of $23,000.00 for the Paradise[supreg] Ultrasound RDN System is 441.00 percent of the applicable APC payment amount for the service related to the category of devices of $5,215.40 (($23,000.00/ $5,215.40) x 100 = 441.00 percent). Therefore, we stated that we believe the Paradise[supreg] Ultrasound RDN System 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 $23,000.00 for the Paradise[supreg] Ultrasound RDN System is 1,542.51 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,491.08 (($23,000.00/$1,491.08) x 100 = 1,542.51 percent). Therefore, we stated that we believe the Paradise[supreg] Ultrasound RDN System 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 $23,000.00 for the Paradise[supreg] Ultrasound [[Page 94159]] RDN System and the portion of the APC payment amount for the device of $1,491.08 is 412.41 percent of the APC payment amount for the related service of $5,215.40 ((($23,000.00-$1,491.08)/$5,215.40) x 100 = 412.41 percent). Therefore, we stated that we believe the Paradise[supreg] Ultrasound RDN System meets the third cost significance requirement. We invited public comment on whether the Paradise[supreg] Ultrasound RDN System 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 and a few other commenters reiterated that the Paradise[supreg] Ultrasound RDN System meets all three of the cost significance criteria. The applicant further clarified that the Paradise[supreg] Ultrasound RDN System meets the cost criteria regardless of whether the Paradise[supreg] Cartridge and Paradise[supreg] Connection Cable are deemed eligible for pass-through or excluded from the calculation. The applicant stated that the Paradise[supreg] Cartridge and Paradise[supreg] Connection Cable should be included when evaluating the cost criteria because they are both single-use items that are required for the Paradise[supreg] Ultrasound RDN System to function as intended and are essential to complete each patient treatment. Response: We appreciate the applicant's and commenters' input. We agree with the applicant that the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable are single-use components that are required for the Paradise[supreg] Ultrasound RDN System to function as intended and are essential to complete each patient treatment and should be included when evaluating the cost criteria. After consideration of the public comments we received and our findings from the first, second, and third cost significance tests, we agree that the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable components of the Paradise[supreg] Ultrasound RDN System meet the cost significance criteria 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 Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and Paradise[supreg] Connection Cable components of the Paradise[supreg] Ultrasound RDN System meet the requirements for device pass-through status described at Sec. 419.66. Therefore, effective beginning January 1, 2025, we are finalizing approval for device pass-through payment status for the applicable components of the Paradise[supreg] Ultrasound RDN System 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. (g) Precision GI Limaca Medical submitted an application for a new device category for transitional pass-through payment status for Precision GI for CY 2025. According to the applicant, Precision GI is a motorized, battery operated, single-use, fully disposable endoscopic ultrasound-guided (EUS) fine needle biopsy device used to obtain biopsies of tissue for definitive diagnosis of pancreatic cancer and other life-threatening gastrointestinal (GI) abnormalities. Per the applicant, Precision GI is untethered and battery operated with an internally powered and controlled motor, featuring a long flexible shaft transferring the proximal force of the motor through the inserted endoscope to the needle circumferential cutting tip. The device is controlled by a physician, who inserts the device into the patient's GI tract via the ultrasound endoscope. Upon reaching the designated biopsy site, the physician operates the device's motorized mechanism that automatically rotates the needle (which is included in the device's package) to cut and extract tissue. The biopsy site is accessed through the instrument channel of an ultrasound imaging endoscope that detects the device's echogenic needle tip. Please refer to the online application posting for Precision GI, available at https://mearis.cms.gov/public/publications/device-ptp/DEP23113023REE, for additional detail describing the device and the disease treated by the device. 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), Precision GI received FDA Breakthrough Device designation effective March 24, 2022, as a device used with an ultrasound endoscope for fine needle biopsy of submucosal lesions, mediastinal masses, lymph nodes, and intraperitoneal masses within or adjacent to the GI tract. FDA granted the applicant 510(k) clearance for Precision GI on August 28, 2023, for the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for Precision GI on November 30, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether Precision GI 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 and one commenter agreed with CMS' assessment and the applicant noted that CMS raised no concerns about Precision-GI meeting the criterion at Sec. 419.66(b)(1). Response: We appreciate the applicant's and the commenter's input. We received the application for a new device category for transitional pass-through payment status for Precision GI on November 30, 2023, which is within 3 years of August 28, 2023, the date of FDA 510(k) clearance. Based on our review of the application and public comments received, we have determined that Precision GI meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether Precision GI is an integral part of the service furnished. The applicant stated that the device is intended for single use. While the applicant did not explicitly state whether Precision GI comes in contact with human tissue and is surgically inserted or implanted, the applicant noted that Precision GI is used to sample targeted submucosal lesions, mediastinal masses, lymph nodes, and intraperitoneal masses within or adjacent to the GI tract and this is achieved by a physician who inserts Precision GI into the patient's GI tract using an ultrasound endoscope. However, we noted that, while the needle (which is a component of the device and is included in the device's package) does come into contact with human tissue and is surgically inserted, the motorized mechanism of the Precision GI device itself may not come in contact with human tissue and may not be 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). We invited public comment on whether Precision GI meets the eligibility criterion at Sec. 419.66(b)(3). Comment: In response to our concern about whether Precision GI is integral to the service furnished and meets the eligibility criterion at Sec. 419.66(b)(3), the [[Page 94160]] applicant clarified that Precision GI is an integral part of the service furnished because the Precision GI device is an endoscopic ultrasound-guided fine needle biopsy (EUS-FNB) medical device and is the essential device that physicians must use to enable the procedures for the services the applicant identified. The applicant clarified that physicians use Precision GI for procedures that are reported using the following HCPCS codes: 43238 (Esophagogastroduodenoscopy, flexible, transoral; with transendoscopic ultrasound-guided intramural or transmural fine needle aspiration/biopsy(s), (includes endoscopic ultrasound examination limited to the esophagus, stomach or duodenum, and adjacent structures), and 43242 (Esophagogastroduodenoscopy, flexible, transoral with transendoscopic ultrasound-guided intramural or transmural fine needle aspiration/biopsy(s), (includes endoscopic ultrasound examination limited to the esophagus stomach and either the duodenum or a surgically altered stomach where the jejunum is examined distal to the anastomosis)) and Precision GI is clearly integral to performing both of these services, given that these procedures are intended to extract suspected cancerous tissue and that Precision GI is the essential device used to obtain and remove the tissue. A commenter stated that based on the Precision GI application, they believe Precision GI would be integral to the procedures with which it is associated. The applicant reiterated that Precision GI is a single-use device and clarified that it is used for one patient only. Response: We appreciate the applicant's and the commenter's input. Based on the information provided in the comments we agree with the applicant and commenter that Precision GI is an essential device that physicians must use to enable the procedures for the services the applicant identified and, as such, Precision GI is an integral part of the service furnished. After consideration of the public comments received and our review of the application, we have determined that Precision GI is integral to the service furnished and is used for one patient only. We have taken this information into consideration in making our final determination of whether Precision GI meets the requirements of Sec. 419.66(b)(3). Comment: In response to our concerns about whether Precision GI comes in contact with human tissue and meets the eligibility criterion at Sec. 419.66(b)(3), the applicant and a commenter submitted comments clarifying that Precision GI comes in contact with human tissue when the device enters the patient and extracts suspected tumor tissue from the body. The applicant and commenter explained that after the Precision GI device is advanced through the mouth via the working channel of the upper GI endoscope to the section of the gastric wall located closest to the mass or tumor as identified by endoscopic ultrasound, the rotating needle component of Precision GI goes through the gastric wall to acquire tissue from the tumor. The applicant clarified that Precision GI operates as a single unit, which includes the needle and emphasized that Precision GI is not provided in separate components, does not require assembly, and does not require any additional supplies or materials to operate. As such, the applicant and the commenter asserted that Precision GI comes into contact with human tissue as required. In response to our concerns about whether Precision GI is surgically inserted or implanted the applicant and another commenter clarified that Precision GI is surgically inserted when Precision GI is inserted through a natural orifice (the mouth) to access the biopsy site, and therefore it meets the eligibility criterion at Sec. 419.66(b)(3). Specifically, the applicant clarified that the surgical path to the tumor is created by the endoscope which is passed through the mouth (natural orifice) where Precision GI is then used to access the site and to extract tissue in or adjacent to the GI tract, meeting the requirements of Sec. 419.66(b)(3). Response: We appreciate the applicant's and the commenter's input. Based on the clarifying information provided in the comments, we agree with the applicant that Precision GI comes in contact with human tissue and is surgically implanted or inserted as required by Sec. 419.66(b)(3). Specifically, we relied upon the clarification that Precision GI functions collectively as a single unit with no separate components and the device enters the patient via an endoscope to extract human tissue from the body, and as such, we believe that Precision GI comes into contact with human tissue. In addition, we agree with the applicant and commenter that Precision GI is surgically inserted when it is advanced through a natural orifice (i.e., the mouth) via an endoscope to create a surgical path to the tumor. After consideration of the public comments received and our review of the application, we have determined that Precision GI comes in contact with human tissue and is surgically inserted in accordance with the eligibility criterion at Sec. 419.66(b)(3). We agree with the applicant and commenter that Precision GI is an integral part of the service furnished, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted, or applied in or on a wound or other skin lesion. After consideration of the public comments received and our review of the application, we have determined that Precision GI meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant indicated that Precision GI is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets; the applicant noted that Precision GI is a motorized, single-use, fully disposable EUS fine needle biopsy device that functions with no related capital component. The applicant stated that Precision GI is not a material or supply furnished incident to a service. However, based on the applicant's description of Precision GI as a biopsy device, we questioned whether Precision GI may be considered a supply or material furnished incident to a service and excluded from device pass-through payment eligibility under Sec. 419.66(b)(4). Specifically, in the CY 2001 OPPS interim final rule with comment period (65 FR 67804 through 67805), we explained how we interpreted Sec. 419.43(e)(4)(iv). We stated that we consider a device to be surgically implanted or inserted if it is introduced into the human body through 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 [[Page 94161]] 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. Further, in the CY 2006 OPPS final rule with comment period (70 FR 68629 through 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 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 reiterated this interpretation in the CY 2024 OPPS final rule (88 FR 81543, 81743). We noted that Precision GI, is inserted into the patient's GI tract via the ultrasound endoscope to reach the designated biopsy site where the device's motorized mechanism is then used for cutting and extraction of tissue endoscopically from within or adjacent to the patient's GI tract. However, we questioned whether Precision GI, which is described as a biopsy device, may be considered a supply or material furnished incident to a service consistent with our previous interpretation of Sec. 419.43(e)(4)(iv) and therefore excluded from device pass-through payment eligibility under Sec. 419.66(b)(4). We welcomed additional evidence regarding whether Precision GI should be considered a material or supply incident to a service based on our previous interpretation of Sec. 419.43(e)(4)(iv) as it has been applied to biopsy devices and we invited public comments on whether Precision GI meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment stating that there is agreement that Precision GI is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets. Response: We appreciate the applicant's input. We agree with the applicant that Precision GI is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets. We have taken this information into consideration in making our final determination of whether Precision GI meets the requirements of Sec. 419.66(b)(4). Comment: The applicant submitted a comment clarifying that Precision GI is not a material or supply incident to a service and meets the eligibility criterion at Sec. 419.66(b)(4) because Precision GI does not create incisions and is not used to create a surgical opening, rather Precision GI is used to capture and extract a diagnostically relevant portion of the tumor. The applicant stated that Precision GI's cutting function does not make the device a commodity supply and that Precision GI should not be placed in the same category as simple cutting or basic commodity tools (e.g., such as scalpel, biopsy forceps, simple exchangeable needles, etc.). Additionally, the applicant stated that Precision GI is not a generic biopsy device as defined by CMS for pass-through devices, referencing section 60.4.3, Chapter 4 of the Medicare Claims Processing Manual. In support, the applicant compared Precision GI to devices described by C1782 (Morcellator), which like Precision GI are also used for tissue removal. The applicant explained that because C1782 devices are used for laparoscopic tissue removal, per the CMS guidance in the Medicare Claims Processing Manual, they are not considered generic biopsy devices.\41\ Thus, the applicant asserted its belief that, similar to C1782 devices, Precision GI is not a generic biopsy device because it is used for tissue removal. Furthermore, the applicant noted that C1782 would not appropriately describe Precision GI because C1782 is specific to laparoscopic removal of tissue, whereas Precision GI is endoscopically inserted to remove tissue within or adjacent to the GI tract. --------------------------------------------------------------------------- \41\ According to the Medicare Claims Processing Manual (60.4.3), the device pass-through category C1782 (Morcellator) is specific to devices used for cutting, coring, and extracting tissue in laparoscopic procedures. These are distinct from biopsy devices because morcellators are used for the laparoscopic removal of tissue. --------------------------------------------------------------------------- The applicant asserted that CMS previously created a pass-through device category C1830 (Powered bone marrow biopsy needle), effective October 1, 2011, and that the device in this category functions similarly to Precision GI in complexity of operation and is not a biopsy needle as the applicant stated CMS defines this term. The applicant further commented that suggesting that Precision GI is a supply ignores the complexity of the device compared to commonly used endoscopic biopsy forceps and interchangeable commodity operating instruments. One commenter stated that, per the application, Precision GI is a single, disposable, mechanized unit that would be integral to the procedures with which it is associated and for this reason, it should not be categorized with scalpels, needles, and other commonly used operating room instruments as a supply furnished incident to a service and should not be excluded from device pass-through eligibility under Sec. 419.66(b)(4). The applicant asserted that the FDA Breakthrough Designation implicitly recognizes the innovative nature of Precision GI and that it would be unlikely to have received this designation if it were deemed a supply. The applicant also asserted that Precision GI obtains tumor tissue in a superior method compared to today's non-motorized EUS-FNB devices, providing consistently higher quality core tumor tissue for the anatomic pathologist to more confidently diagnose. Response: We appreciate the applicant's and commenter's input and the additional information. We agree with the applicant that Precision GI is not a supply or material furnished incident to a service because the device does not appear to be an item used to cut or otherwise create a surgical opening, rather it is inserted through a natural orifice (i.e., the mouth) via an endoscope to create a surgical path to reach the designated biopsy site where the device's motorized mechanism is used for cutting and extraction of tissue endoscopically from within or adjacent to the patient's GI tract. We also agree with the applicant that similar to devices described by C1782 and C1830, Precision GI appears to be distinct from biopsy devices as defined by section 60.4.3, Chapter 4 of the Medicare Claims Processing Manual. In response to the applicant's comment that FDA Breakthrough Designation implicitly recognizes the innovative nature of Precision GI and that it would be unlikely to have received this designation if it were deemed a supply, we note that a device's FDA designation does not alone qualify a device for transitional device pass-through payment; the criteria FDA utilizes to grant medical device approvals differ from the criteria CMS has established to evaluate device eligibility for OPPS device pass-through payments. As such, CMS must evaluate all information submitted for each device pass-through application for each applicable criterion as it applies to the nominated device. In response to the [[Page 94162]] applicant's comment that Precision GI obtains tumor tissue in a superior method compared to today's non-motorized EUS-FNB devices, providing consistently higher quality core tumor tissue for the anatomic pathologist to more confidently diagnose, we note that Sec. 419.66(b)(4) does not require that a device is superior to other available devices. Based on the additional information provided in the comments, we agree with the applicant and commenter that Precision GI is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. After consideration of the public comments received and our review of the application, we have determined that Precision GI meets the eligibility criterion at Sec. 419.66(b)(4). Comment: With respect to our concerns about the eligibility criterion at Sec. 419.66(b)(3), the applicant sought to distinguish Precision GI from the CytoCore device, which was denied pass-through status in CY 2024 (88 FR 81744). The applicant stated that Precision GI differs from CytoCore in two ways: unlike the CytoCore device, Precision GI does not have a separate needle component and Precision GI comes into contact with human tissue. Specifically, the applicant commented that the needle attached to the CytoCore is a separate needle, and not part of the CytoCore device and the needle is the only portion of the device that comes in contact with human tissue, whereas Precision GI's needle is an integral part of the Precision GI device that works in conjunction with Precision GI's long flexible shaft fully driven by its control system and motor, to transfer the proximal driving force of the motor to the highly specialized circumferential cutting and capturing tip to access the tumor tissue and perform the biopsy. The applicant further clarified that the Precision GI's needle is not only an integrated part of the device, but it is also a specifically and uniquely designed cannula with circumferential internal sharpening to enable superior tumor tissue capture when driven by Precision GI as a motor and microchip control program. The applicant stated that Precision GI enables the physician to accomplish motorized, automated, and synchronized axial advancement and rotational cutting and extraction of tissue at the target tissue site. Finally, the applicant noted that the needle used with Precision GI cannot be swapped out for other generic needles. Response: We appreciate the applicant's input and agree that because Precision GI does not have separate components, functions collectively as a single device, and is surgically inserted when it is advanced through a natural orifice (i.e., the mouth) via an endoscope, creating a surgical path to the tumor, the device comes into contact with human tissue and is surgically inserted as required by Sec. 419.66(b)(3). Comment: With regard to our discussion about the eligibility criterion specified at Sec. 419.66(b)(4), a commenter stated that the Precision GI transitional pass-through payment application raises an important policy question about the definition of a biopsy apparatus. According to the commenter, items used to create incisions, such as biopsy apparatuses, or other commonly used operating room instruments, that CMS classified as supplies in in the CY 2006 OPPS final rule (70 FR, 68629 through 68630) \42\ are substantially different from the targeted mechanical core biopsies of today. The commenter explained that technological advances in incision devices began in the late 2010s with various alterations to needle shapes and have continued to improve and progress to the current, mechanical, EUS-guided devices, which do not merely create incisions and should not be classified along with biopsy forceps or even aspiration needles. Therefore, the commenter requested that CMS consider the definition of a supply and consider re- classification of mechanical tissue extraction apparatuses such as Precision GI into a new category of devices outside of the existing definition. The commenter stated their belief that this would enable CMS to determine the benefits and costs of single-use devices and future innovations in this space and determine their role in therapeutic decision-making and associated improvements in patient outcomes. --------------------------------------------------------------------------- \42\ Medicare Program; Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2006 Payment Rates, 70 FR 68516 (November 10, 2005). --------------------------------------------------------------------------- Response: We thank the commenter for their feedback. We will continue to consider issues related to the definition of a biopsy apparatus as it relates to the 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 asserted that Precision GI is authorized by FDA with an indication to sample targeted submucosal lesions, mediastinal masses, lymph nodes, and intraperitoneal masses within or adjacent to the GI tract. Per the applicant, the device category C1830 (Powered bone marrow biopsy needle) does not appropriately describe Precision GI because Precision GI is not targeting bone marrow and instead is targeting sub[hyphen]mucosal and extramural GI lesions. According to the applicant, the device category C1782 (Morcellator) also does not appropriately describe Precision GI because that device category, per Medicare Claims Processing Manual, Ch. 4, section 60.4.3, is only for laparoscopic procedures. The applicant added that Precision GI cuts and extracts tissue endoscopically, not laparoscopically. We did not identify an existing pass-through payment category that describes Precision GI. We invited public comment on whether Precision GI meets the device category criterion at Sec. 419.66(c)(1). Comment: With respect to the device category criterion at Sec. 419.66(c)(1), the applicant agreed with our assessment that there are no existing pass-through payment categories that describe Precision GI. Response: We appreciate the applicant's input. After consideration of the public comments received and our review of the application, we continue to believe there is no existing category or category previously in effect that appropriately describes Precision GI. Therefore, we have determined that Precision GI 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. Precision GI has a Breakthrough Device designation and marketing authorization from FDA for [[Page 94163]] the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement. We invited public comment on whether Precision GI meets the device category criterion at Sec. 419.66(c)(2)(ii). Comment: With respect to the device category criterion at Sec. 410.66(c)(2)(ii), the applicant reiterated that Precision GI received FDA Breakthrough Device designation and marketing authorization for the same indication. The applicant agreed with CMS that Precision GI meets the device category criterion at Sec. 410.66(c)(2)(ii), and therefore, is not evaluated for substantial clinical improvement. Response: We appreciate the applicant's input. FDA granted Precision GI Breakthrough Device designation effective March 24, 2022, and a marketing authorization effective August 28, 2023, for the indication covered by the Breakthrough Device designation. Therefore, Precision GI meets the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). After consideration of public comments received and our review of the application, we have determined that Precision GI meets the device category criterion at Sec. 419.66(c)(2). 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 Precision GI would be reported with HCPCS codes as shown in Table 120. [GRAPHIC] [TIFF OMITTED] TR27NO24.147 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 (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. 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 applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5302, which had a CY 2024 payment rate of $1,812.99 at the time the application was received. HCPCS code 43242 in APC 5302 had a CY 2024 device offset amount of $23.75 at the time the application was received.\43\ According to the applicant, the cost of Precision GI is $1,400.00. --------------------------------------------------------------------------- \43\ We noted that the applicant selected the APC payment rate of $1,814.88 and the APC level device offset amount of $178.95 for APC 5302. However, the values selected are inconsistent with the APC payment rate and the APC level device offset amount found in CY 2024 OPPS APC Offset File, which were corrected as described in the CY 2024 OPPS/ASC final rule with comment period correction (89 FR 9002). The HCPCS/CPT code level device offset amounts for the HCPCS/ CPT codes provided by the applicant are available in the corrected Addendum P to the CY 2024 OPPS/ASC final rule with comment period. For our calculation, we selected the APC payment rate of $1,812.99 and the HCPCS/CPT code level device offset amount of $23.75 related to HCPCS 43242 in APC 5302 found in the corrected Addendum P, which are the accurate values for these codes. Based on our initial assessment for the proposed rule, using the APC payment rate of $1,812.99 and the device offset amount of $23.75 would result in Precision GI 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 average reasonable cost of $1,400.00 for Precision GI is 77.22 percent of the applicable APC payment amount for the service related to the category of devices of $1,812.99 (($1,400.00/$1,812.99) x 100 = 77.22 percent). Therefore, we stated that we believe Precision GI 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 estimated average reasonable cost of $1,400.00 for Precision GI is 5894.74 percent of the cost of the device-related portion of the APC payment amount for the related service of $23.75 (($1,400.00/$23.75) x 100 = 5894.74 percent). Therefore, we stated that we believe Precision GI 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 [[Page 94164]] $1,400.00 for Precision GI and the portion of the APC payment amount for the device of $23.75 is 75.91 percent of the APC payment amount for the related service of $1,812.99 ((($1,400-$23.75)/$1,812.99) x 100 = 75.91 percent). Therefore, we stated that we believe Precision GI meets the third cost significance requirement. We invited public comment on whether Precision GI 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 stated that they agree with CMS that Precision GI satisfies the cost criteria. Response: We appreciate the applicant's input. After consideration of the public comment received and our findings from the first, second, and third cost significance tests, we have determined that Precision GI meets the cost significance criteria specified at Sec. 419.66(d). After consideration of the public comments received, and our review of the device pass-through application, we have determined that Precision GI meets the requirements for device pass-through status described at Sec. 419.66, and we are finalizing approval for device pass-through payment status for Precision GI effective January 1, 2025, 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. (h) Symplicity SpyralTM Renal Denervation (RDN) System Medtronic submitted an application for a new device category for transitional pass-through payment status for the Symplicity SpyralTM RDN System for CY 2025. The applicant is seeking a new device category for transitional pass-through payment status only for the Symplicity SpyralTM Multi-Electrode RDN Catheter (hereinafter Symplicity SpyralTM Catheter) component of the Symplicity SpyralTM RDN System. According to the applicant, the Symplicity SpyralTM RDN System consists of the Symplicity SpyralTM Catheter and the Symplicity G3TM generator; however, the applicant requested device pass-through status for the catheter component of the system only. The applicant further explained that the Symplicity SpyralTM RDN System is indicated to reduce blood pressure as an adjunctive treatment in hypertension patients in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. Per the applicant, the Symplicity SpyralTM Catheter, when used with the Symplicity G3TM generator, delivers radiofrequency (RF) energy through the wall of the renal artery to disrupt the surrounding renal nerves with the aim of modulating or suppressing sympathetic nerve hyperactivity. According to the applicant, the Symplicity SpyralTM Catheter is a single-use catheter used to deliver multiple ablations in both kidneys, in the renal main, accessory, and branch arteries, based on a patient's artery anatomy and size. Per the applicant, the Symplicity SpyralTM Catheter is designed to be used with the Symplicity G3TM generator and includes the following components: (1) four gold radiopaque electrodes at the spiral (helical) distal end that are deployed into a spiral (helical) shape by partially retracting the guidewire proximal to the spiral section of the catheter; (2) self-expanding electrode array assembly which radially spaces the four gold electrodes for quadratic ablation; (3) rapid exchange port; (4) straightening tool intended to facilitate safe insertion of the guidewire into the catheter; (5) cable connector attached to the catheter handle that connects the catheter to the generator; (6) catheter handle; and (7) femoral marker. Per the applicant, additional components of the Symplicity SpyralTM RDN System include the: (1) Symplicity G3TM generator, which is only compatible with the Symplicity SpyralTM Catheter, which includes a remote control, power cable, and output for the Symplicity SpyralTM Catheter; (2) Symplicity G3TM generator cart, an optional mobile cart; and (3) foot switch, an optional component. Per the applicant, additional items required for the procedure include: (1) a 0.36 mm (0.014 in) guidewire, preferably without hydrophilic coating; (2) a dispersive electrode; (3) a sterile bag to cover the remote control if used in the sterile field; (4) a 6 French (Fr) guide-catheter; (5) an introducer sheath; (6) a stopcock sidearm; (7) a Tuohy-Borst adapter; and (8) other standard items used to aid percutaneous transluminal catheterization in renal arteries. According to information submitted by the applicant, key steps for operating the Symplicity SpyralTM Catheter include: (1) connecting the Symplicity SpyralTM Catheter to the Symplicity G3TM generator; (2) inserting the Symplicity SpyralTM Catheter through a small femoral incision and guiding it to the renal artery via the abdominal aorta; (3) advancing the Symplicity SpyralTM Catheter until the distal electrode is located in the desired position within the renal artery; (4) retracting the guidewire, allowing the self-expanding catheter to expand and fit the renal arterial vessel walls; (5) delivering the treatment of RF energy to ablate the renal nerves through the activation of the catheter electrodes, which is controlled using the generator; (6) if treating another vessel, repositioning the guide catheter within the next vessel and repeating the procedure for positioning the catheter and delivering treatments; (7) upon completion of all treatments, straightening the distal end by advancing the guidewire and withdrawing both the guidewire and the straightened catheter from the guide catheter; (8) retracting the guide catheter from the sheath and removing the introducer sheath from the artery; (9) using standard of care procedures to achieve hemostasis at the puncture site; and (10) disposing of the devices. Please refer to the online application posting for the Symplicity SpyralTM RDN System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP231130WPU4J, for additional detail describing the device and the disease treated by the device. Comment: Many commenters expressed their support for the approval of the Symplicity SpyralTM RDN System for transitional pass- through payment. Response: We appreciate the commenters' input and support for the Symplicity SpyralTM RDN System application for transitional pass-through payment. We have taken these comments into consideration in our final determination for pass-through status for the Symplicity SpyralTM RDN System. 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), the Symplicity SpyralTM RDN System received FDA Breakthrough Device designation effective March 27, 2020, as a device with the following indicated use: the Symplicity SpyralTM multi-electrode renal denervation catheter and the Symplicity G3TM RF Generator are indicated for the reduction of blood pressure in patients with uncontrolled hypertension despite the use of anti-hypertensive medications or in patients who may have documented intolerance to anti-hypertensive medications. FDA approved the premarket approval application (PMA) for the Symplicity SpyralTM RDN System on November 17, 2023, for the indicated use to reduce blood pressure as an adjunctive treatment in patients with hypertension [[Page 94165]] in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. We received the application for a new device category for transitional pass-through payment status for the Symplicity SpyralTM Catheter on November 30, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the Symplicity SpyralTM Catheter 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 the Symplicity SpyralTM Catheter received FDA marketing authorization on November 17, 2023, and the Symplicity SpyralTM RDN System was granted Breakthrough Device designation effective March 27, 2020. A few other commenters also stated that they believed the Symplicity SpyralTM RDN System meets the newness criterion. Response: We appreciate the applicant's and commenters' input. The Symplicity SpyralTM RDN System received FDA Breakthrough Device designation on March 27, 2020. We received the application for a new device category for transitional pass-through payment status for the Symplicity SpyralTM Catheter on November 30, 2023, which is within 3 years of November 17, 2023, the date of FDA PMA. After consideration of the public comments received and our review of the application, we have determined that the Symplicity SpyralTM Catheter meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the Symplicity SpyralTM Catheter is integral to the service furnished. Per the applicant, the Symplicity SpyralTM Catheter is intended for single-patient use only. While the applicant did not explicitly state whether the Symplicity SpyralTM Catheter comes into contact with human tissue, the applicant asserted that the SymplicityTM Catheter ablates renal nerve tissue by positioning the catheter within the renal artery, which expands and fits the renal arterial vessel walls. While the applicant did not explicitly state if the Symplicity SpyralTM Catheter is surgically inserted or implanted, per the device description, the Symplicity SpyralTM Catheter is inserted through a small femoral incision, after which it is inserted into the renal arterial vessel. We invited public comment on whether the Symplicity SpyralTM Catheter meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment stating that the Symplicity SpyralTM catheter meets all eligibility criteria as laid out at Sec. 419.66(b)(3). The applicant clarified that the Symplicity SpyralTM Catheter is required to ablate the renal sympathetic nerves in this procedure, is integral to the service furnished, and meets the eligibility criterion at Sec. 419.66(b)(3). The applicant further clarified that the Symplicity SpyralTM Catheter comes into contact with human tissue because it is inserted through the skin and into the arterial system, and is then introduced into the renal artery. Response: We appreciate the applicant's input. We agree with the applicant that the Symplicity SpyralTM Catheter is an integral part of the service furnished, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted, or applied in or on a wound or other skin lesion because the Symplicity SpyralTM Catheter is a single-use catheter and is inserted through a small femoral incision, after which it is inserted into the renal arterial vessel. After consideration of the public comments we received and our review of the application, we have determined that the Symplicity SpyralTM Catheter meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant did not state whether the Symplicity SpyralTM Catheter is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or whether the Symplicity SpyralTM Catheter is a supply or material furnished incident to a service. We invited public comment on whether the Symplicity SpyralTM Catheter meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment confirming that the Symplicity SpyralTM Catheter meets the eligibility criterion at Sec. 419.66(b)(4) because it is not equipment, an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered as defined in Chapter 1 of the Medicare Provider Reimbursement Manual. The applicant clarified that the Symplicity SpyralTM Catheter is not a supply or material furnished incident to a service. The applicant commented that the Symplicity SpyralTM Catheter is used with the Symplicity G3TM generator, which may be considered depreciating equipment as defined at Sec. 419.66(b)(4); however, the applicant noted that it is only seeking pass-through status for the single-use Symplicity SpyralTM Catheter. Response: We thank the applicant for the clarification and agree with the applicant that the Symplicity SpyralTM Catheter is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. After consideration of the public comments we received and our review of the application, we have determined that the Symplicity SpyralTM Catheter 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. According to the applicant, the Symplicity SpyralTM Catheter is a single-use catheter used to deliver multiple ablations in both kidneys, in the renal main, accessory, and branch arteries, based on a patient's artery anatomy and size. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the Symplicity SpyralTM Catheter. The applicant asserted that two categories, C1886 (Catheter, extravascular tissue ablation, any modality (insertable)) and C1888 (Catheter, ablation, noncardiac, endovascular (implantable)), do not appropriately describe the Symplicity SpyralTM Catheter. Per the applicant, C1886 does not appropriately describe the Symplicity SpyralTM Catheter because the Symplicity SpyralTM [[Page 94166]] Catheter ablates renal nerve tissue via an endovascular approach by positioning the catheter within the renal artery and C1886 was created to describe devices that ablate extravascular tissue (via an extravascular approach).\44\ According to the applicant, C1888 does not appropriately describe the Symplicity SpyralTM Catheter because the Symplicity SpyralTM Catheter does not ablate or otherwise affect the blood vessel tissue and C1888 was created to describe devices designed to occlude or obliterate blood vessels.\45\ --------------------------------------------------------------------------- \44\ The applicant referenced CY 2013 OPPS FR (77 FR 68352) and Transmittal 2386, Change Request 7672 (Jan 13, 2012) to support these assertions. \45\ The applicant referenced the Medicare Claims Processing Manual, Chapter 4, section 60.4.3 to support these assertions. --------------------------------------------------------------------------- We did not identify an existing pass-through payment category that describes the Symplicity SpyralTM Catheter. We invited public comment on whether the Symplicity SpyralTM Catheter meets the device category criterion at Sec. 419.66(c)(1). Comment: The applicant and a few other commenters agreed with CMS' assessment that there are no existing pass-through payment categories that describe the Symplicity SpyralTM Catheter. Response: We appreciate the commenters' input. After consideration of the public comments we received and our review of the application, we continue to believe that there is no existing category or category previously in effect that appropriately describes the Symplicity SpyralTM Catheter. Therefore, we have determined that the Symplicity SpyralTM Catheter meets the device category eligibility criterion at Sec. 419.66(c)(1). We noted that the applicant indicated the Symplicity SpyralTM Catheter is not the only device authorized by FDA with an indication for renal denervation to achieve reductions in blood pressure. Paradise[supreg] Ultrasound RDN System, for which we also received an application for transitional pass-through payments for CY 2025 as discussed in more detail in the proposed rule (89 FR 59304 through 59307) and this final rule with comment, is also authorized by FDA with an indication for renal denervation using ultrasound energy to achieve reductions in blood pressure. Per the applicant, the Paradise[supreg] Ultrasound RDN System would also be described by the applicant's proposed pass-through payment category: Ablation catheter, renal nerve, via endovascular approach, any modality. Accordingly, we noted that while the Symplicity SpyralTM Catheter device may have a different modality (i.e., radiofrequency compared to ultrasound), the Symplicity SpyralTM Catheter device may have a similar mechanism of action to that of the Paradise[supreg] Ultrasound RDN System device. We questioned whether the device descriptions provided in the respective applications support establishing two modality specific pass-through payment device categories or a single device category that would encompass both RDN device modalities. We address this question in section (i) in detail immediately following the full discussion of all other applicable eligibility criteria for the Symplicity SpyralTM RDN System application. For the summary of public comments received and our final decision on the question of whether the device descriptions provided in the respective applications support establishing two modality-specific pass-through payment device categories or a single device category that would encompass both RDN device modalities, please see section (i) immediately following the Symplicity SpyralTM RDN System application determination. 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. As previously stated, the Symplicity SpyralTM Catheter has 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 is not evaluated for substantial clinical improvement. We invited public comment on whether the Symplicity SpyralTM Catheter meets the device category criterion at Sec. 419.66(c)(2)(ii). Comment: The applicant submitted a comment confirming that the Symplicity SpyralTM Catheter meets the eligibility criterion at Sec. 419.66(c)(2)(ii) because as an FDA Breakthrough Device, it meets the device category criterion as described at Sec. 419.66(c)(2)(ii). A few commenters also stated that the Symplicity SpyralTM Catheter meets the eligibility criterion at Sec. 419.66(c)(2)(ii). Response: We appreciate the applicant's and commenters' input. The Symplicity SpyralTM RDN System has a Breakthrough Device designation, as stated by the applicant, effective March 27, 2020, and marketing authorization from FDA effective November 17, 2023, for the indication covered by the Breakthrough Device designation and therefore, meets the criterion at Sec. 419.66(c)(2)(ii) and is not evaluated for substantial clinical improvement at Sec. 419.66(c)(2)(i). Based on our review of the application and consideration of the public comments we received, we have determined that the Symplicity SpyralTM Catheter meets the eligibility criterion at Sec. 419.66(c)(2). 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 the Symplicity SpyralTM Catheter would be reported with HCPCS codes shown in Table 121. [[Page 94167]] [GRAPHIC] [TIFF OMITTED] TR27NO24.148 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 (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. 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 applicant used the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2024 payment rate of $5,445.84 at the time the application was received. HCPCS code 0339T in APC 5192 had a CY 2024 device offset amount of $3,362.26 at the time the application was received.\46\ According to the applicant, the cost of the Symplicity SpyralTM Catheter is $16,000.00. --------------------------------------------------------------------------- \46\ We noted that the applicant selected the APC payment rate of $5,451.51 and the HCPCS/CPT code level device offset amount of $3,365.76 for HCPCS 0339T in APC 5192. However, the values selected are inconsistent with the APC payment rate and the device offset amount found in the corrected Addendum P to the CY 2024 OPPS/ASC final rule with comment period. For our calculation, we selected the APC payment rate of $5,445.84 and the HCPCS/CPT code level device offset amount of $3,362.26 for HCPCS 0339T in APC 5192 found in the corrected Addendum P, which are the accurate values for these codes. Based on our initial assessment for the proposed rule, using the APC payment rate of $5,445.84 and the HCPCS/CPT code level device offset amount of $3,362.26 would result in the Symplicity SpyralTM Catheter 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 average reasonable cost of $16,000.00 for the Symplicity SpyralTM Catheter is 293.80 percent of the applicable APC payment amount for the service related to the category of devices of $5,445.84 (($16,000.00/ $5,445.84) x 100 = 293.80 percent). Therefore, we stated that we believe the Symplicity SpyralTM Catheter 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 $16,000.00 for the Symplicity SpyralTM Catheter is 475.87 percent of the cost of the device-related portion of the APC payment amount for the related service of $3,362.26 (($16,000.00/$3,362.26) x 100 = 475.87 percent). Therefore, we stated that we believe the Symplicity SpyralTM Catheter 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 $16,000.00 for the Symplicity SpyralTM Catheter and the portion of the APC payment amount for the device of $3,362.26 is 232.06 percent of the APC payment amount for the related service of $5,445.84 ((($16,000.00-$3,362.26)/$5,445.84) x 100 = 232.06 percent). Therefore, we stated that we believe the Symplicity SpyralTM Catheter meets the third cost significance requirement. We invited public comment on whether the Symplicity SpyralTM Catheter 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 and a few other commenters reiterated that the Symplicity SpyralTM Catheter meets all three of the cost significance criteria. Response: We appreciate the applicant's and commenters' input. After consideration of the public comments we received and our findings from the first, second, and third cost significance tests, we agree that the Symplicity SpyralTM Catheter meets the cost significance criteria 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 Symplicity [[Page 94168]] SpyralTM Catheter meets the requirements for device pass- through status described at Sec. 419.66. Therefore, effective beginning January 1, 2025, we are finalizing approval for device pass- through payment status for the Symplicity SpyralTM Catheter 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. (i) Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System Device Category Code Establishment As previously discussed, we received two applications for transitional device pass-through status for RDN devices: the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System (Symplicity SpyralTM Catheter). Per the applicants, both are RDN devices that use an endovascular approach to enter the renal arteries and ablate renal sympathetic nerves to achieve reductions in blood pressure. We questioned whether the information provided for each nominated device supported establishing two modality-specific device pass-through payment device categories or establishing a single device category that would encompass both RDN devices. We noted that the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System are both authorized by FDA for the indicated use to reduce blood pressure as an adjunctive treatment in patients with hypertension in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. In addition, based on the information provided in the respective applications, we stated that it appears that both devices use the same procedure (renal sympathetic denervation, also called renal sympathetic nerve ablation) with the same underlying mechanism of action (thermal ablation), treat the same disease (hypertension) in the same patient population (patients in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure), and aim to achieve the same therapeutic outcome (to reduce blood pressure). We noted that in addition to having the same indicated use, per the applicants, both devices may be used with the same HCPCS procedure codes: 0338T \47\ or 0339T.\48\ --------------------------------------------------------------------------- \47\ HCPCS procedure code 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 diagnostic renal angiography when performed; unilateral). \48\ HCPCS procedure code 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). --------------------------------------------------------------------------- We noted several differences in procedural technique with use of the Paradise[supreg] Ultrasound RDN System device compared to the Symplicity SpyralTM RDN System device. Per the applicants, the Paradise[supreg] Ultrasound RDN System delivers ablation while positioned in the main renal arteries only, whereas the Symplicity SpyralTM RDN System may deliver ablation while positioned in the main renal, accessory, and branch arteries and therefore may require advancing the catheter beyond the main renal arteries. According to the applicants, the Paradise[supreg] Ultrasound RDN System procedural technique requires the measurement of the main renal artery diameter to select an appropriate size cooling balloon catheter, whereas the Symplicity SpyralTM RDN System does not require a cooling balloon catheter nor this measurement. Similarly, per the applicants, the Paradise[supreg] Catheter's cooling balloon catheter requires additional procedural techniques to ensure the balloon is appropriately inflated and deflated during the procedure, but the Symplicity SpyralTM Catheter does not require this. The two applicants proposed different device category descriptions. Based on the information submitted, we acknowledged that the device category proposed by the applicant for the Paradise[supreg] Ultrasound RDN System would not appropriately describe the Symplicity SpyralTM RDN System, but that the device category proposed by the applicant for the Symplicity SpyralTM RDN System would appropriately describe the Paradise[supreg] Ultrasound RDN System. Specifically, the applicant for the Paradise[supreg] Ultrasound RDN System proposed the following device category: Catheter, intravascular renal denervation, ultrasound, with balloon cooling,\49\ while the applicant for the Symplicity SpyralTM RDN System proposed the following device category: Ablation catheter, renal nerve, via endovascular approach, any modality. The device category descriptor the applicant proposed for the Paradise[supreg] Ultrasound RDN System specifies the device's treatment or procedure (catheter renal denervation), the ablation modality (i.e., ultrasound), and an attribute of the catheter (i.e., the cooling balloon). We noted that while the device category descriptor the applicant proposed for the Symplicity SpyralTM RDN System device also specifies the device's treatment or procedure (catheter ablation of the renal nerves), it does not specify an ablation modality or any additional attributes of the catheter; rather, the proposed device category for the Symplicity SpyralTM RDN System more broadly describes any ablation modality (e.g., radiofrequency or ultrasound). --------------------------------------------------------------------------- \49\ The Paradise[supreg] Ultrasound RDN System device category does not explicitly describe using an endovascular approach; however, it does describe renal nerve ablation via a catheter. We stated that we believe the device category describes the intravascular sonication (ultrasound treatment) delivered by the catheter. We noted that the proposed device description does not preclude an endovascular approach, and that, per the applicant, the Paradise[supreg] Ultrasound RDN system is a catheter-based endovascular based system. --------------------------------------------------------------------------- The applicant for the Symplicity SpyralTM RDN System asserted that the use of a common thermal mechanism of action in both systems supported the establishment of a single device category irrespective of modality. However, we noted the applicant of the Paradise[supreg] Ultrasound RDN System stated a separate device category associated with ultrasound denervation is supported by possible differences in clinical efficacy between RDN devices using ultrasound and those using radiofrequency ablation. However, we noted that we did not evaluate the validity or generalizability of these claims, nor was it clear if the two different ablation modalities (i.e., ultrasound and radiofrequency) would render different clinical results in larger studies or in the long term.50 51 We further noted that we discussed these claims solely for the purpose of [[Page 94169]] determining whether the information provided supports establishing two modality-specific pass-through payment device categories or establishing a single device category that may encompass both RDN devices. --------------------------------------------------------------------------- \50\ Fengler, K., Rommel, K.-P., Kriese, W., Blazek, S., Besler, C., von Roeder, M., Desch, S., Thiele, H., & Lurz, P. (2023, February 13). Research Correspondence: 6- and 12-Month Follow-Up From a Randomized Clinical Trial of Ultrasound vs Radiofrequency Renal Denervation (RADIOSOUND-HTN). JACC: Cardiovascular Interventions, 16(3),: 367-369. https://doi.org/10.1016/j.jcin.2022.10.058 \51\ Fengler, K., Rommel, K.-P., Blazek, S., Besler, C., Hartung, P., von Roeder, M., Petzold, M., Winkler, S., H[ouml]llriegel, R., Desch, S., Thiele, H., & Lurz, P. (2019). A Three-Arm Randomized Trial of Different Renal Denervation Devices and Techniques in Patients With Resistant Hypertension (RADIOSOUND- HTN). Circulation: 139(5), 590-600. https://doi.org/10.1161/CIRCULATIONAHA.118.037654. --------------------------------------------------------------------------- In seeking comment, we noted that in accordance with section 1833(t)(6)(B)(ii)(II) of the Act, new categories must be established in such a way that no medical device is described by more than one category. We further noted that CMS does not establish pass-through device categories for the purposes of describing specific devices, but rather, device categories which are intended to encompass all devices that can be appropriately described by a category. However, there are instances where CMS has defined specific ablation modalities (e.g., high intensity ultrasound, microwave, and cryoablation) in HCPCS codes for use with the OPPS. In addition, we noted the existence of several modality-specific tissue ablation procedure codes in the Current Procedural Terminology (CPT[supreg]) 2024. However, there are examples where CMS has established device categories with additional granularity to differentiate similar devices with special characteristics (e.g., implantable neurostimulators). Further, there are examples where CMS has created HCPCS codes specifying the modality of ablation (e.g., ultrasound, microwave). Finally, we noted that 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). We questioned whether two modality-specific device category codes may facilitate the collection of more accurate data for incorporating the costs of these two devices into the procedure APC rate as well as foster the tracking of efficacy data for these two ablation modalities. As such, we invited public comment on whether the device descriptions provided in the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System applications support establishing two modality-specific pass-through payment device categories or a single device category that would encompass both RDN device modalities. Comment: Commenters, including the Paradise[supreg] Ultrasound RDN System applicant, overwhelmingly supported establishing two pass- through payment device categories. However, some commenters suggested that the device category codes be specific to the physical device characteristics while other commenters suggested the device category codes be specific to modality. Specifically, the applicant for the Paradise[supreg] Ultrasound RDN System and many other commenters stated that two device categories are more appropriate for many reasons such as documented procedural differences between the two treatment modalities, differences in the prices between the two technologies, CMS's previous creation of separate and distinct device categories for similar technologies, CMS's recent creation of different ICD-10-PCS codes for radiofrequency and ultrasound renal denervation modalities in the FY 2025 IPPS final rule, and to facilitate the tracking of each device's efficacy data. We received a few comments, including from the Symplicity SpyralTM RDN System applicant, who suggested that CMS establish a single device category that would encompass both RDN device modalities. The Symplicity SpyralTM RDN System applicant and a few other commenters supported the establishment of an energy modality-agnostic RDN device pass-through payment device category for several reasons. Specifically, the Symplicity SpyralTM RDN System applicant emphasized the similarities between the two devices and procedures, opinions from the physician community, existing policy and coding standards, and potential future consequences of this determination. The Symplicity SpyralTM RDN System applicant also disagreed with many of the reasons for separate pass-through payment device categories provided by the Paradise[supreg] Ultrasound RDN System applicant that were outlined in the proposed rule. Response: We appreciate the feedback provided by the applicants and the commenters on this topic. We have taken the points raised into consideration in our final decision. Comment: Commenters, including the Paradise[supreg] Ultrasound RDN System applicant noted many procedural differences between the two treatment modalities. For example, the radiofrequency system (i.e., Symplicity SpyralTM RDN System) requires ablation of the main renal artery and branches of the main renal artery, whereas the Paradise[supreg] Ultrasound RDN System normally requires ablation of only the main renal artery, leading to significantly fewer ablations 52 53 and the Paradise[supreg] Ultrasound RDN System requires the estimation of the size of the patient's renal artery to ensure the correct balloon size is utilized, which may require additional equipment or procedural steps at the discretion of the operator compared to the Symplicity SpyralTM RDN System procedure, where this is not required. In addition, the applicant and many commenters noted that the Symplicity SpyralTM RDN System procedure takes longer than the overall procedure for the Paradise[supreg] Ultrasound RDN System, and the Paradise[supreg] Ultrasound RDN System applicant specified this difference in procedure time as approximately 30 percent.54 55 56 57 58 Many other commenters also indicated additional potential procedural differences between the two devices, including variation in the number of catheters used, pre- and post-procedure scheduling and workflow protocols, complexity of the procedure, depth of ablation, specialized training requirements, patient selection and management issues, and recovery time. --------------------------------------------------------------------------- \52\ Fengler, et al. (2019). A Three-Arm Randomized Trial of Different Renal Denervation Devices and Techniques in Patients With Resistant Hypertension (RADIOSOUND-HTN). Circulation, 139(5), 590- 600. https://doi.org/10.1161/CIRCULATIONAHA.118.037654. \53\ Fengler, et al. (2023). Research Correspondence: 6- and 12- Month Follow-Up From a Randomized Clinical Trial of Ultrasound vs Radiofrequency Renal Denervation (RADIOSOUND-HTN). JACC: Cardiovascular Interventions, 16(3): 367--369. https://doi.org/10.1016/j.jcin.2022.10.058. \54\ Fengler, et al. (2019). \55\ Fengler, et al. (2023). \56\ Symplicity Spyral renal denervation system Instructions for Use. Medtronic. \57\ Azizi, M., Schmieder, R.E., Mahfoud, F., Weber, M.A., Daemen, J., Davies, J., Basile, J., Kirtane, A.J., Wang, Y., Lobo, M.D., Saxena, M., Feyz, L., Rader, F., Lurz, P., Sayer, J., Sapoval, M., Levy, T., Sanghvi, K., Abraham, J., Sharp, A.S.P., Fisher, N.D.L., Bloch, M.., Reeve-Stoffer, H., Coleman, L., Mullin, C., & Mauri, Laura on behalf of the RADIANCE-HTM Investigators (2018). Endovascular ultrasound renal denervation to treat hypertension (RADIANCE-HTN SOLO): a multicentre, international, single-blind, randomised, sham-controlled trial. Lancet, 391(10137), P2335-P2345. https://doi.org/10.1016/S0140-6736(18)31082-1. \58\ Azizi, M., Sanghvi, K., Saxena, M., Gosse, P., Reilly, J.P., Levy, T., Rump, L.C., Persu, A., Basile, J., Bloch, M.J., Daemen, J., Lobo, M.D., Mahfoud, F., Schmieder, R.E., Sharp, A.S.P., Weber, M.A., Sapoval, M., Fong, P., Pathak, A., Lantelme, P., Hsi, D., Bangalore, S., Witkowski, A., Weil, J., Kably, B., Barman, N.C., Reeve-Stoffer, H., Coleman, L., McClure, C.K., Kirtane, A.J. on behalf of the RADIANCE-HTN Investigators (2021). Ultrasound renal denervation for hypertension resistant to a triple medication pill (RADIANCEHTN TRIO): a randomised, multicentre, single-blind, sham- controlled trial. Lancet, 397(10293), P2476-P2486. https://doi.org/10.1016/S0140-6736(21)00788-1. --------------------------------------------------------------------------- With respect to procedural and device similarities, the Symplicity SpyralTM RDN System applicant and another commenter reiterated that both devices share the same intended use, for the same patient population, with identical [[Page 94170]] or nearly identical FDA-approved indications, and are deployed similarly, on the same anatomy. The Symplicity SpyralTM RDN System applicant further stated that the two devices have the same mechanism of action (thermal ablation of renal sympathetic nerves using heat energy), a similar form factor and product composition (single use endovascular catheters, connected to a generator, and delivered over a wire to the renal arteries, with distal ends containing heat energy emitting implements which ablate nerve tissue), and that the RDN procedure performed with either technology is fundamentally the same. The Symplicity SpyralTM RDN System applicant also asserted that even though there may be small differences in the placement of each device along the renal arterial vasculature, they believe these small differences can be expected for devices that are inherently similar but not identical in form factor, size, and deliverability. The Symplicity SpyralTM RDN System applicant asserted that the RDN procedure performed by both devices is also fundamentally the same, as both include catheter-based femoral access and closure, intraprocedural imaging, physician wire skills and expertise, and the ablation targeting of the sympathetic renal nerves to achieve the identical therapeutic goal of reducing blood pressure. The Symplicity SpyralTM RDN System applicant reiterated that the Paradise[supreg] Catheter's cooling balloon requires specific procedural techniques to ensure the balloon is appropriately inflated and deflated during the procedure, noting that the Symplicity SpyralTM Catheter does not have this requirement. The applicant stated that the Symplicity SpyralTM Catheter does not require a cooling balloon as the non-occlusive spiral design of the radiofrequency catheter allows for continued collateral blood flow to cool the artery wall during ablation. Further, while use of the Paradise[supreg] Catheter's cooling balloon does require some different considerations when compared to the Symplicity SpyralTM Catheter, particularly related to vessel size, the cooling balloon itself is not providing the therapeutic effect (i.e. ablation of the nerves); rather, the balloon is preventing vessel damage from heat energy. The applicant stated this distinction makes it similar to many medical devices which provide the same treatment but require slightly different considerations based on manufacturer-specific equipment differences, and while the energy modality has driven some differences in the Symplicity SpyralTM Catheter and the Paradise[supreg] Catheter designs, the overall procedure is substantially similar between the two technologies. With respect to the differences in procedural technique described in the proposed rule that the Paradise[supreg] Ultrasound RDN System only ablates in the main renal arteries, while the Symplicity SpyralTM RDN System typically involves ablation in the main renal arteries, accessories, and branches, the applicant stated that according to the Paradise[supreg] Ultrasound RDN System instructions for use (IFU),\59\ the Paradise[supreg] Ultrasound RDN System is recommended for treatment of branches and accessory arteries, provided they are of appropriate size to accommodate the balloon and meet specific spacing requirements. The Symplicity SpyralTM RDN System applicant explained that the Symplicity SpyralTM RDN System IFU \60\ do not specify or require that distal branches be treated (only a size range for vessel diameters is specified). Furthermore, per the applicant, a thorough treatment strategy typically including distal branches is recommended for the Symplicity SpyralTM RDN System. The applicant noted that this recommendation is based on available knowledge of renal sympathetic nerve anatomy, to increase the likelihood of thorough and complete denervation up to the size limitations of the device, given that the current procedure and technology do not yet have an intraprocedural way to validate successful denervation. Additionally, the Symplicity SpyralTM RDN System applicant noted that several studies, including a sub-analysis of the Paradise[supreg] Ultrasound RDN System applicant's RADIANCE-HTN SOLO \61\ study, point to the importance of thorough ablation, including appropriate branch and accessory renal arteries, to achieving optimal nerve ablation and blood pressure reduction with RDN.62 63 Further, the Symplicity SpyralTM RDN System applicant stated that proceduralists with both devices seek to denervate to the greatest extent possible up to the limitations of the RDN technology used, and there are many considerations in how proceduralists may determine where to denervate, and with how many energy emissions, based on clinical experience and patient anatomical considerations. --------------------------------------------------------------------------- \59\ ReCor Paradise Ultrasound RDN Instructions for Use. https://mearis.cms.gov/public/publications/device-ptp/DEP231128137E1 (accessed July 26, 2024). \60\ Symplicity Spyral Indications for Use. Available at: https://www.accessdata.fda.gov/cdrh_docs/pdf22/P220026D.pdf. Accessed Sept 2024. \61\ Saxena, M., Schmieder, R.E., Kirtane, A.J., Mahfoud, F., Daemen, J., Basile, J., Lurz, P., Gosse, P., Sanghvi, K., Fisher, N.D.L., Rump, L.C., Pathak, A., Blakenstjn, P.J., Mathur, A., Wang, Y., Weber, M.A., Sharp, A.S.P., Bloch, M.J., Barman, N.C., Claude, L., Song, Y., Aziz, M. & Lobo, M.D. (2022). Predictors of blood pressure response to ultrasound renal denervation in the RADIANCE- HTN SOLO study. Journal of Human Hypertension, 36(7), 629-639. https://doi.org/10.1038/s41371-021-00547-y. \62\ Sato, Y., Kawakami, R., Jinnouchi, H., Sakamoto, A., Cornelissen, A., Mori, M., Kawai, K., Guo, L., Coleman, L., Nash, S., Claude, L., Barman, N.C., Romero, M., Kolodgie, F.D., Virmani, R., & Finn, A.V. (2001). Comprehensive Assessment of Human Accessory Renal Artery Periarterial Renal Sympathetic Nerve Distribution. JACC: Cardiovascular Interventions, 14(3), 304-15. https://doi.org/10.1016/j.jcin.2020.09.043. \63\ Struthoff, H., Lauder, L, Hohl, M., Hermens, A., Rami Tzafriri, A., Edelman, E.R., Kunz, M., B[ouml]hm, M., Tschernig, T., & Mahfoud, F. (2023). Histological examination of renal nerve distribution, density, and function in humans. EuroIntervention, 19(7), 612-620. https://doi.org/10.4244/eij-d-23-00264. --------------------------------------------------------------------------- The Symplicity SpyralTM RDN System applicant disagreed with some assertions provided in the Paradise application and discussed in some of the comments supporting the creation of two device category codes. Primarily, the applicant asserted that the differences in intraprocedural metrics cited in the proposed rule noted are not accurate comparisons. For example, the Symplicity SpyralTM RDN System applicant stated that the average procedure times from respective pooled analyses suggest that the total procedure time is 85 minutes for the Symplicity SpyralTM RDN System \64\ and 78 minutes for the Paradise[supreg] Ultrasound RDN but the total procedure times attributed to using either device are variable across studies, and, due to differing trial procedural requirements and physician experience, it is difficult to compare procedure times across studies. In addition, the applicant further stated other intraprocedural metrics, such as total ablation time and ablation time per cycle, are not necessarily reflective of additional resources involved in the procedures. The Symplicity SpyralTM RDN System applicant noted that in the proposed rule CMS stated that the Symplicity SpyralTM Catheter required more ablations per patient at 46.9, compared to 5.4 ablations for the Paradise[supreg] Ultrasound RDN System. However, the applicant stated that as a quadripolar device, each of the Symplicity SpyralTM Catheter's four electrodes may be activated independently for focal treatments, causing the difference in the number of ablations. The applicant clarified that the SPYRAL HTN-OFF MED [[Page 94171]] randomized controlled trial \65\ counted ablations from each of the four electrodes of the Symplicity SpyralTM Catheter as a separate ablation, although most ablation cycles would have counted the four ablations simultaneously as a single ablation. The applicant indicated that given this design difference, it is misleading to draw comparisons between those two data points for each system. The applicant also clarified that regarding ablation depth, cadaveric studies found that >90 percent of the renal nerves lie within 6.39 mm of the arterial lumen.\66\ While the applicant stated that it cannot independently confirm the 1-6 mm ablation depth cited for the Paradise[supreg] Ultrasound RDN System, a histological study of radiofrequency RDN in porcine models using the Symplicity SpyralTM RDN System found a comparable mean lesion depth of 6.26 mm (+/- 1.62) in the main renal segment.\67\ The Symplicity SpyralTM RDN System applicant also stated that regardless of modality, ablation depth is not uniform and occurs asymmetrically as a result of heating different tissue types surrounding the renal artery (given the presence of other organs surrounding the renal artery, and anatomical variability between patients, this heat energy is variably dissipated). Therefore, the applicant asserted that ablation depth, by itself, is an incomplete two-dimensional measure of a three-dimensional phenomenon. --------------------------------------------------------------------------- \64\ Podium presentation. Mahfoud. Pooled, 12-month Blood Pressure Reductions Using the Symplicity Spyral Radiofrequency Renal Denervation Catheter. Transvascular Cardiotherapuetics Conference. October 2023. \65\ B[ouml]hm, M., Kario, K., Kandzari, D.E., Mahfoud, F., Weber, M.A., Schmieder, R.E., Tsioufis, K., Pocock, S., Konstantinidis, D., Choi, J.W., East, C., Lee, D.P., Ma, A., Ewen, S., Cohen, D.L., Wilensky, R., Devireddy, C.M., Lea, J., Schmid, A., Weil, J., Agdirlioglu, T., Reedus, D., Jefferson, B.K., Reyes, D., D'Souza, R., Sharp, A.S.P., Sharif, F., Fahy, M., DeBruin, V., Cohen, S.A., Brar, S., & Townsend, R.R. on behalf of the SPYRAL HTN- OFF MED Pivotal Investigators (2020). Efficacy of catheter-based renal denervation in the absence of antihypertensive medications (SPYRAL HTN-OFF MED Pivotal): a multicentre, randomised, sham- controlled trial. Lancet, 395(10234), 1444-1451. https://doi.org/ 10.1016/s0140-6736(20)30554-7. \66\ Sakakura, K., Ladich, E., Cheng, Q., Otsuka, F., Yahagi, K., Fowler, D.R., Kolodgie, F.D., Virmani, R., & Joner, M. (2014). Anatomic assessment of sympathetic peri-arterial renal nerves in man. Journal of American College of Cardiology, 64(7), 635-43. https://doi.org/10.1016/j.jacc.2014.03.059. \67\ Wolf, M., Hubbard, B., Sakaoka, A., Rousselle, S., Tellez, A., Jiang, X., Kario, K., Hohl, M., B[ouml]hm, M., & Mahfoud, F. (2018). Procedural and anatomical predictors of renal denervation efficacy using two radiofrequency renal denervation catheters in a porcine model. Journal of Hypertension, 36(12), 2453-2459. https://doi.org/10.1097/hjh.0000000000001840. --------------------------------------------------------------------------- Response: We thank the commenters and the applicants for the information. We agree with commenters that the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System have the same underlying thermal mechanism of action, have the same intended use for the same patient population, and have identical FDA- approved primary indications. However, we continue to believe that, while there are similarities, the devices are not identical and warrant separate device categories. We note that commenters, including the applicants, addressed potential clinical impacts, efficacy, and outcomes in the comments. While we have included some of those details in our discussion for the purposes of illustrating the procedural comparison of the two devices and determining whether the information provided supports establishing two modality-specific pass-through payment device categories or establishing a single device category that may encompass both RDN devices, we note that we did not evaluate the validity or generalizability of these claims, nor was it is clear if the two different ablation modalities (i.e., ultrasound and radiofrequency) would render different clinical results in larger studies or in the long term. In regard to comments on the differences in clinical trial data between the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System, we are not evaluating any evidence submitted in relation to the devices' clinical outcomes or the comparison of clinical outcomes to other similar devices because both devices meet the requirements at Sec. 419.66(c)(2)(ii) and are not required to prove substantial clinical improvement for pass-through payment, as discussed in this final rule. With regard to the procedural differences we noted in the proposed rule, we agree with commenters that there are some procedural differences between the two RDN technologies and that the long-term impact of these differences on patient outcomes is unknown. We appreciate that differences between the two treatment modalities may result in different resource requirements such as operating room time, more anesthetic, and more contrast medium. We also agree with the many commenters who stated the Paradise[supreg] Ultrasound RDN System may require additional equipment or procedural steps to determine the estimation of the size of the patient's renal artery to ensure the correct balloon size is utilized. With regards to comments stating the cooling balloon itself is not providing the therapeutic effect (i.e. ablation of the nerves); rather, the balloon is preventing vessel damage from heat energy, we appreciate that the cooling balloon does not constitute a difference in mechanism of action. However, we believe the different considerations of resources due to the differences of the cooling balloon may be considered a significant difference in modalities that could reasonably suggest a need for separate device codes. Comment: The Paradise[supreg] Ultrasound RDN System applicant and many commenters stated that the difference in price between the two technologies also warrants two device categories. The Paradise[supreg] Ultrasound RDN System applicant and many other commenters stated that while the transitional pass-through payment calculation is based on hospital charges, having only one device category could lead to undercharging for one technology and overcharging for the other. The Paradise[supreg] Ultrasound RDN System applicant and many other commenters further stated that having two distinct device categories would allow hospitals to set charges that accurately reflect the cost of each procedure, thereby enabling CMS to more accurately calculate the costs of each procedure. The applicant and a few commenters further stated two distinct device categories would provide additional flexibility for CMS to more fully evaluate both modalities over the pass-through period to determine the most appropriate APC assignment when transitional pass-through payment expires. The Symplicity SpyralTM RDN System applicant commented that it appreciates CMS' intent to facilitate access for beneficiaries to innovative technologies by allowing for adequate payment while cost data is collected for APC assignments, and that the payment calculation methodology for transitional device pass-through provides for adequate payments based on charges on individual hospital claims adjusted to costs during the 3-year eligibility period, regardless of device category assignment. The applicant further commented that when the pass-through period expires and CMS packages the procedures into an APC, payment will be calculated at the level of the CPT code, which both RDN technologies share. The applicant claimed that the RDN device costs for both technologies will be packaged into the payment for the same CPT code, whether these costs are similar or not. The Symplicity SpyralTM RDN System applicant therefore questioned the utility of using separate device categories for cost tracking. The Symplicity SpyralTM RDN System applicant also opined that tracking efficacy data for the two devices is beyond the fundamental purpose of establishing device categories and should not be a primary consideration. The applicant stated that both manufacturers are engaged in post- [[Page 94172]] market research to continue building the body of evidence for RDN specific to each technology, and the research will continue independent of the establishment of pass-through device categories. The applicant urged CMS to prioritize and maintain an OPPS policy-based rationale in establishing new device categories, with focus on the payment-driven mechanisms and purposes of the device category codes. Response: In response to comments on the difference in price between the two technologies and whether that difference warrants two device categories, we note that while price difference considerations are generally outside the scope of the traditional pass-through payment program, we agree with commenters that two distinct device categories will provide an easier mechanism for hospitals to set charges that reflect the price differences between the two device categories which will enable CMS to more accurately calculate the costs of each procedure for future rulemaking. Comment: The Paradise[supreg] Ultrasound RDN System applicant and many commenters asserted that CMS has previously created separate and distinct device categories for similar technologies. The applicant suggested the most notable of these are the neurostimulators, where CMS created categories to differentiate rechargeable, non-rechargeable, high-frequency, and closed feedback loop neurostimulators for the treatment of chronic pain.\68\ The Paradise[supreg] Ultrasound RDN System applicant stated that other neurostimulator categories have also been created for phrenic nerve stimulation, paired stimulation, and carotid sinus baroreceptor stimulation. Further, the applicant stated that there are also currently five device categories \69\ that are all electrophysiology catheters. The applicant stated that they believe that these device categories appropriately capture the characteristics among these groups of technologies to allow for the most accurate reporting of device costs. The Paradise[supreg] Ultrasound RDN System applicant opined that the situation with respect to the Paradise[supreg] Ultrasound RDN System and the SymplicityTM Spryal RDN System is similar to the examples presented, and therefore, it is appropriate to have two device categories to differentiate tracking of ultrasound and radiofrequency renal denervation. Several other commenters also referenced device categories that were differentiated due to their unique characteristics, including examples related to cardiology, neurostimulators, catheters, and ablation modalities (i.e., high-intensity ultrasound, microwave, and cryoablation), to support their position that the Paradise[supreg] Ultrasound RDN System and the SymplicityTM Spryal RDN System should be classified within two different pass-through payment device categories. --------------------------------------------------------------------------- \68\ HCPCS codes C1826 (Generator, neurostimulator (implantable), includes closed feedback loop leads and all implantable components, with rechargeable battery and charging system), C1827 (Generator, neurostimulator (implantable), non- rechargeable, with implantable stimulation lead and external paired stimulation controller), C1821 (Interspinous process distraction device (implantable)), C1822 (Generator, neurostimulator (implantable), high frequency, with rechargeable battery and charging system), C1823 (Generator, neurostimulator (implantable), non-rechargeable, with transvenous sensing and stimulation leads), C1767 (Generator, neurostimulator (implantable), non-rechargeable), C1820 (Generator, neurostimulator (implantable), with rechargeable battery and charging system), and C1825 (Generator, neurostimulator (implantable), non-rechargeable with carotid sinus baroreceptor stimulation lead(s). \69\ HCPCS codes C1730 (Catheter, electrophysiology, diagnostic, other than 3D mapping (19 or fewer electrodes)), C1731 Catheter, electrophysiology, diagnostic, other than 3D mapping (20 or more electrodes)), C1732 (Catheter, electrophysiology, diagnostic/ ablation, 3D or vector mapping), C1733 (Catheter, electrophysiology, diagnostic/ablation, other than 3D or vector mapping, other than cool-tip), and C2630 (Catheter, electrophysiology, diagnostic/ ablation, other than 3D or vector mapping, cool-tip). --------------------------------------------------------------------------- Further, the Paradise[supreg] Ultrasound RDN System applicant and many commenters noted that CMS recently created different ICD-10-PCS codes that differentiate between radiofrequency and ultrasound renal denervation modalities for the new technology add-on payments confirmed in the IPPS final rule for FY 2025. The applicant and several commenters opined that it is important to be consistent across inpatient and outpatient settings as the same rationale for separation and independent tracking of costs applies in both instances. A few commenters stated that the use of separate ICD-10-PCS codes for the two devices reflect their unique contributions to the treatment of hypertension. The applicant for the Symplicity SpyralTM RDN System argued that pass-through device categories are not established for the purpose of describing specific devices; rather, device categories are intended to encompass all devices that can be appropriately described by a category (89 FR 59316). The applicant acknowledged that, as stated in the proposed rule, CMS has established energy-specific device categories in the past; however, the applicant asserted that the establishment of device categories requires a nuanced approach, balancing appropriate granularity without becoming manufacturer- or device-specific. The applicant asserted that CMS must assess each situation on a case-by-case basis, in the context of the procedure and device in question, the existing code set, and established policy. The applicant asserted its belief that a single device category for the two RDN technologies is consistent with the considerations put forth by CMS in the proposed rule and consistent with past precedent, whereas the creation of two categories may conflict with these policy standards. Another commenter stated a preference for a simple single code to be used on claims when performing RDN, regardless of which device is chosen. With regard to broader device category definitions, the Symplicity SpyralTM RDN System applicant asserted that RDN ablation catheters in the future may come with several combinations of modalities and cooling mechanisms, noting that there are other RDN devices currently in development, such as a radiofrequency RDN catheter with balloon cooling under study by Metavention, with an approved Investigational Device Exemption (IDE) in the United States. The applicant stated the belief that other manufacturers may eventually gain FDA authorization with various device structures and features employing either ultrasound or radiofrequency RDN, and thus believed that the specific category description proposed by the Paradise[supreg] Ultrasound RDN System applicant would establish a framework in which different iterations of RDN technology could be considered new by virtue of their brand-specific characteristics. The Symplicity SpyralTM RDN System applicant asserted that, in contrast, a broader device category definition for RDN technologies currently eligible for pass-through would provide flexibility for future RDN devices to be evaluated on their own merits and that, if those devices meet the newness and other criteria for pass-through payment status, a broad category code for RDN can be easily adapted to reflect the distinguishing characteristic that merits such recognition. The Symplicity SpyralTM RDN System applicant noted that the RDN procedure used with either device is currently reported using the same energy modality-agnostic Category III CPT[supreg] codes. This applicant further opined that the broader physician community views RDN as fundamentally a single procedure with multiple technologies [[Page 94173]] available in the same class.70 71 72 73 Specifically, the applicant commented that in a Society for Cardiovascular Angiography & Interventions (SCAI) expert consensus statement published in August 2023, the operator training and experience recommended for the RDN procedure is the same, regardless of which technology is used, with the only device-specific training noted in the statement being operator familiarity with the functionality of each technology's generator and knowledge regarding balloon sizing with ultrasound RDN,\74\ while the European Society of Cardiology/European Society of Hypertension (ESC/ ESH) Guidelines refer only to RDN as a class and do not distinguish between radiofrequency and ultrasound technologies.75 76 A commenter stated that from a physician work perspective, the two systems are similar in time and technique. The applicant further asserted that this issue was addressed at the September 2023 American Medical Association CPT[supreg] Editorial Panel meeting, where a request for a CPT[supreg] code for an energy modality-specific ultrasound RDN procedure was ultimately rejected by the Panel. --------------------------------------------------------------------------- \70\ Mancia, G., Kreutz, R., Brunstr[ouml]m, M., Burnier, M., Grassi, G., Januszewicz, A., Muiesan, M.L., Tsioufis, K., Agabiti- Rosei, E., Algharably, E.A.E., Azizi, M., Benetos, A., Borghi, C., Hitij, J.B., Cifkova, R., Coca, A., Cornelissen, V., Cruickshank, J.K., Cunha, P.G., Danser, A.H.J., Pinho, R.M., Delles, C., Dominiczak, A.F., Dorobantu, M., Doumas, M., Fern[aacute]ndez- Alfonso, M.S., Halimi, J.M., J[aacute]rai, Z., Jelakovi[cacute], B., Jordan, J., Kuznetsova, T., Laurent, S., Lovic, D., Lurbe, E., Mahfoud, F., Manolis, A., Miglinas, M., Narkiewicz, K., Niiranen, T., Palatini, P., Parati, G., Pathak, A., Persu, A., Polonia, J., Redon, J., Sarafidis, P., Schmieder, R., Spronck, B., Stabouli, S., Stergiou, G., Taddei, S., Thomopoulos, C., Tomaszewski, M., Van de Borne, P., Wanner, C., Weber, T., Williams, B., Zhang, Z.Y., & Kjeldsen, SE (2023). 2023 ESH Guidelines for the management of arterial hypertension: The Task Force for the management of arterial hypertension of the European Society of Hypertension. Journal of Hypertension, 41(12), 1874-2071. https://doi.org/10.1097/HJH.0000000000003480. \71\ Barbato, E., Azizi, M., Schmieder, R.E., Lauder, L., B[ouml]hm, M., Brouwers, S., Bruno, R.M., Dudek, D., Kahan, T., Kandzari, D.E., L[uuml]scher, T.F., Parati, G., Pathak, A., Ribichini, F.L., Schlaich, M.P., Sharp, A.S.P., Sudano, I., Volpe, M., Tsioufis, C., Wijns, W., & Mahfoud, F. (2023). Renal denervation in the management of hypertension in adults. A clinical consensus statement of the ESC Council on Hypertension and the European Association of Percutaneous Cardiovascular Interventions (EAPCI). European Heart Journal, 44(15), 1313-1330. https://doi.org/10.1093/eurheartj/ehad054. \72\ Swaminathan, R.V., East, C.A., Feldman, D.N., Fisher, N.D., Garasic, J.M., Giri, J.S., Kandzari, D.E., Kirtane, A.J., Klein, A., Kobayashi, T., Koenig, G., Li, J., Secemsky, E., Townsend, R.R., & Aronow, H.D. (2023). SCAI Position Statement on Renal Denervation for Hypertension: Patient Selection, Operator Competence, Training and Techniques, and Organizational Recommendations. Journal of the Society for Cardiovascular Angiography & Interventions, 2(6), 101121. https://doi.org/10.1016/j.jscai.2023.101121. \73\ Kandzari DE, Townsend RR, Bakris G, Basile, J., Bloch, M.J., Cohen, D.L., East, C., Ferdinand, K.C., Fisher, N., Kirtane, A., Lee, D.P., Puckrein, G., Rader, F., Vassalotti, J.A., Weber, M.A., Willis, K., & Secemsky, E. (2021). Renal denervation in hypertension patients: Proceedings from an expert consensus roundtable cosponsored by SCAI and NKF. Catheterization & Cardiovascular Interventions, 98(3), 416-426. https://doi.org/10.1002/ccd.29884. \74\ Swaminathan, R.V., East, C.A., Feldman, D.N., Fisher, N.D., Garasic, J.M., Giri, J.S., Kandzari, D.E., Kirtane, A.J., Klein, A., Kobayashi, T., Koenig, G., Li, J., Secemsky, E., Townsend, R.R., & Aronow, H.D. (2023). SCAI Position Statement on Renal Denervation for Hypertension: Patient Selection, Operator Competence, Training and Techniques, and Organizational Recommendations. Journal of the Society for Cardiovascular Angiography & Interventions, 2(6), 101121. https://doi.org/10.1016/j.jscai.2023.101121. \75\ Mancia, G., Kreutz, R., Brunstr[ouml]m, M., Burnier, M., Grassi, G., Januszewicz, A., Muiesan, M.L., Tsioufis, K., Agabiti- Rosei, E., Algharably, E.A.E., Azizi, M., Benetos, A., Borghi, C., Hitij, J.B., Cifkova, R., Coca, A., Cornelissen, V., Cruickshank, J.K., Cunha, P.G., Danser, A.H.J., Pinho, R.M., Delles, C., Dominiczak, A.F., Dorobantu, M., Doumas, M., Fern[aacute]ndez- Alfonso, M.S., Halimi, J.M., J[aacute]rai, Z., Jelakovi[cacute], B., Jordan, J., Kuznetsova, T., Laurent, S., Lovic, D., Lurbe, E., Mahfoud, F., Manolis, A., Miglinas, M., Narkiewicz, K., Niiranen, T., Palatini, P., Parati, G., Pathak, A., Persu, A., Polonia, J., Redon, J., Sarafidis, P., Schmieder, R., Spronck, B., Stabouli, S., Stergiou, G., Taddei, S., Thomopoulos, C., Tomaszewski, M., Van de Borne, P., Wanner, C., Weber, T., Williams, B., Zhang, Z.Y., & Kjeldsen, SE (2023). 2023 ESH Guidelines for the management of arterial hypertension: The Task Force for the management of arterial hypertension of the European Society of Hypertension. Journal of Hypertension, 41(12), 1874-2071. https://doi.org/10.1097/HJH.0000000000003480. \76\ Barbato, E., Azizi, M., Schmieder, R.E., Lauder, L., B[ouml]hm, M., Brouwers, S., Bruno, R.M., Dudek, D., Kahan, T., Kandzari, D.E., L[uuml]scher, T.F., Parati, G., Pathak, A., Ribichini, F.L., Schlaich, M.P., Sharp, A.S.P., Sudano, I., Volpe, M., Tsioufis, C., Wijns, W., & Mahfoud, F. (2023). Renal denervation in the management of hypertension in adults. A clinical consensus statement of the ESC Council on Hypertension and the European Association of Percutaneous Cardiovascular Interventions (EAPCI). European Heart Journal, 44(15), 1313-1330. https://doi.org/10.1093/eurheartj/ehad054. --------------------------------------------------------------------------- Response: As commenters stated, we have established precedent for creating both broad and distinct device categories for similar technologies. In fact, there have been many scenarios is which we have established distinct device categories to differentiate between various neurostimulators, electrophysiology catheters, and ablation modalities to ensure 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 due as required by Sec. 419.66(c)(1). We agree with the SymplicityTM Spryal RDN System applicant that the establishment of device categories requires a nuanced approach, and that CMS must assess each situation on a case-by-case basis in accordance with established policy. We believe that we have followed not only our established policy, but our precedent in our evaluation of the device category code determination for the two nominated RDN devices. We agree with commenters that this situation with respect to the Paradise[supreg] Ultrasound RDN System and the SymplicityTM Spryal RDN System is similar to the examples presented. The SymplicityTM Spryal RDN System applicant noted that manufacturers may gain FDA authorization for other RDN devices with various device characteristics employing either ultrasound or radiofrequency RDN and establishing device category codes that are device characteristic specific, like the code descriptor proposed by the Paradise[supreg] Ultrasound RDN System applicant. This, according to the SymplicityTM Spryal RDN System applicant, would establish a framework in which different iterations of RDN technology could be considered new by virtue of their brand-specific characteristics. We acknowledge that concern and agree that the device category codes established for the nominated devices should not typically be differentiated by the specific device characteristics, rather, consistent with the options in the proposed rule, we believe that in this instance the device pass-through payment device categories should be modality-specific. With respect to a comment on the September 2023 AMA CPT[supreg] Editorial Panel meeting, where the SymplicityTM Spryal RDN System applicant stated that a request for a CPT[supreg] code specific to an energy modality ultrasound RDN procedure was ultimately rejected, as of the date this final rule with comment period is issued, we are not aware of any decision made by the AMA CPT[supreg] Editorial Panel regarding this issue. Comment: The Paradise[supreg] Ultrasound RDN System applicant and many commenters also stated creating two categories may facilitate tracking modality-specific efficacy data and shared their belief that having the ability to identify and track which RDN device modality Medicare patients receive via claims data may be beneficial for CMS in the future. The Symplicity SpyralTM RDN System applicant stated that tracking efficacy data for the two devices is beyond the fundamental purpose of establishing device categories and should not be a primary consideration. Response: In response to comments on tracking of long-term efficacy data for the nominated devices, while we note that collecting long-term efficacy data is always a priority of CMS and other interested parties, we agree with the Symplicity SpyralTM RDN System applicant that we do not believe the tracking of long-term efficacy is a fundamental purpose of establishing [[Page 94174]] device category codes, as such, we did not consider this topic in our final decision. We thank the commenters for their feedback and took into account all of the points raised in our final decision. Comment: The applicant for the Symplicity SpyralTM RDN System, Medtronic, submitted another application for its device, PulseSelectTM, for transitional pass-through payment during CY 2025. The proposed rule stated that PulseSelectTM is used to achieve catheter ablation to treat atrial fibrillation, and thus, could be appropriately described by C1733. The Symplicity SpyralTM RDN System applicant stated that the PulseSelectTM application involved the interpretation of an existing device category description, but the applicant stated CMS's conclusion for that application is consistent with the logic for establishing a single device category to describe the two RDN devices. Following the publication of the proposed rule, the applicant withdrew its application for transitional pass-through payment for PulseSelectTM. Response: With respect to the application for the PulseSelectTM included in the CY 2025 notice of proposed rulemaking, we note that we invited comment on whether the PulseSelectTM PFA System was described by C1733 (89 FR 59310 through 59311). We noted that based on the description the applicant provided, the PulseSelectTM PFA System is used to achieve catheter ablation to treat atrial fibrillation, and thus could be appropriately described by C1733. However, because the application was withdrawn prior to making a final determination on the device category criterion at Sec. 419.66(c)(1), we are unable to address whether we would have ultimately determined that the PulseSelectTM PFA System was described by C1733. We thank both applicants and the many commenters for their input. We note that we received overwhelming support in favor of establishing two device category codes to reflect the nominated devices. After review of the applications and the comments we received, we agree with majority of the commenters that we should establish two pass-through payment device categories. We believe that there are procedural differences and potential resource requirement differences between the two treatment modalities that warrant separate device categories. In addition, we believe that the circumstances presented by the nominated devices are sufficiently similar to the previous scenarios in which we established device category codes to differentiate similar devices with different modalities. However, we disagree with the suggestion that the device category codes should be specific to the physical device characteristics rather than modality-specific device categories. As such, consistent with our proposal and our final determination to approve both the Paradise[supreg] Ultrasound RDN System and the Symplicity SpyralTM RDN System for device pass-through payment status effective January 1, 2025, we are finalizing our decision to create two modality-specific pass-through payment device categories for RDN devices: radiofrequency and ultrasound. (2) Traditional Device Pass-Through Applications (a) Ambu[supreg] aScopeTM Gastro Ambu Inc. submitted an application for a new device category for transitional pass- through payment status for the Ambu[supreg] aScopeTM Gastro for CY 2025. Per the applicant, the Ambu[supreg] aScopeTM Gastro is a sterile, single-use, flexible gastroscope intended to be used for: (1) endoscopic access to and examination of the upper gastrointestinal (GI) anatomy; and (2) upper GI endoscopy or esophagogastroduodenoscopy (EGD) to diagnose and treat problems in the upper GI tract, including dysphagia, gastroesophageal reflux disease, narrowing or blockages, esophageal varices, inflammation, ulcers, tumors, hiatal hernia, Celiac disease, Crohn's disease, and infections of the upper GI tract in adult patients. According to the applicant, the Ambu[supreg] aScopeTM Gastro works with the Ambu[supreg] aBoxTM 2, a compatible, reusable displaying unit. The Ambu[supreg] aScopeTM Gastro endoscope is inserted into the upper GI anatomy airway through the mouth, while the Ambu[supreg] aBoxTM 2 is a non-sterile digital monitor intended to display live imaging data from Ambu visualization devices. The applicant is only seeking a new device category for transitional pass-through payment status for the Ambu[supreg] aScopeTM Gastro. Please refer to the online application posting for the Ambu[supreg] aScopeTM Gastro, available at https://mearis.cms.gov/public/publications/device-ptp/DEP2305305795M, for additional detail describing this device and the disease treated by the device. Comment: A few commenters expressed general support for the application for transitional pass-through payments for the Ambu[supreg] aScopeTM Gastro. Response: We appreciate the commenters' input and recognize the commenters' support for the approval of the Ambu[supreg] aScopeTM Gastro for transitional pass-through payment. 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 February 3, 2022, the applicant received 510(k) clearance from FDA for the Ambu[supreg] aScopeTM Gastro, Ambu[supreg] aBoxTM 2, as a sterile, single-use, flexible gastroscope intended to be used for endoscopic access to and examination of the upper GI anatomy. The Ambu[supreg] aScopeTM Gastro is intended to provide visualization via a compatible Ambu displaying unit and to be used with endotherapy accessories and other ancillary equipment. We received the application for a new device category for transitional pass-through payment status for the Ambu[supreg] aScopeTM Gastro on May 30, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether the Ambu[supreg] aScopeTM Gastro 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 the Ambu[supreg] aScopeTM Gastro meets the newness requirement for transitional pass-through payment. Response: We appreciate the applicant's input. We received the application for a new device category for transitional pass-through payment status for the Ambu[supreg] aScopeTM Gastro on May 30, 2023, which is within 3 years of February 3, 2022, the date of FDA 510(k) approval to market for the Ambu[supreg] aScopeTM Gastro. As such we have concluded that the Ambu[supreg] aScopeTM Gastro meets the newness criterion. With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the Ambu[supreg] aScopeTM Gastro is integral to the service furnished. The applicant stated that the device was single-use and is intended to be used with one patient only. We noted that the Ambu[supreg] aScopeTM Gastro, based on the device description provided by the applicant and the evidence provided in support of the substantial clinical improvement as discussed in detail in the Sec. 419.66(c)(2) analysis in this [[Page 94175]] application summary write-up, explicitly provides that the nominated device is intended to be used on one patient, for a single procedure and then disposed of. As such, we noted that our evaluation and final decision as it relates to this potential category of devices (gastroscopes) would be based on the understanding that devices included in this device category (gastroscopes) can only be used for a single procedure, on a single patient, and cannot be reprocessed. While the applicant did not explicitly state whether the device comes in contact with human tissue or is surgically inserted, per the device description, the Ambu[supreg] aScopeTM Gastro is a flexible gastroscope intended to be used for endoscopic access to and examination of the upper GI anatomy. We invited public comment on whether the Ambu[supreg] aScopeTM Gastro meets the eligibility criterion at Sec. 419.66(b)(3). Comment: With respect to the eligibility criterion at Sec. 419.66(b)(3), the applicant submitted a comment confirming that the Ambu[supreg] aScopeTM Gastro is used for one patient only, does come in contact with human tissue, and is surgically inserted during applicable procedures, and that the Ambu[supreg] aScopeTM Gastro is a device that is an integral part of the service furnished. Response: We appreciate the applicant's input. We agree with the applicant that the Ambu[supreg] aScopeTM Gastro is an integral part of the service furnished, used for one patient only, comes in contact with human tissue, and is surgically inserted. After consideration of the public comment received and based on our review of the application, we have determined that the Ambu[supreg] aScopeTM Gastro meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant indicated that the Ambu[supreg] aScopeTM Gastro is single-use equipment, not intended for use in multiple patients, for which depreciation and financing expenses are not recovered. The applicant explained that the Ambu[supreg] aScopeTM Gastro is purely an operating cost and is not subject to capitalization or a depreciation schedule. We noted that the applicant stated in the application that the Ambu[supreg] aScopeTM Gastro is a supply furnished incident to a service rendered, as described, the Ambu[supreg] aScopeTM Gastro would be considered a supply or material furnished incident to a service and excluded from device pass-through payment eligibility under Sec. 419.66(b)(4). We invited public comment on whether the Ambu[supreg] aScopeTM Gastro meets the exclusion criterion at Sec. 419.66(b)(4). Comment: The applicant submitted a comment clarifying that the Ambu[supreg] aScopeTM Gastro is not a material or supply furnished incident to the service and meets the eligibility criterion at Sec. 419.66(b)(4) because it must be purchased for each patient and is a device that is integral to the procedure. The applicant reiterated that as a single-use scope, it is not subject to capital equipment depreciation schedules. Response: We appreciate the applicant's input. We agree with the applicant that the Ambu[supreg] aScopeTM Gastro is not a material or supply furnished incident to the service because it is single-use equipment, not intended for use in multiple patients, for which depreciation and financing expenses are not recovered. In addition, we agree that the Ambu[supreg] aScopeTM Gastro is not a material or supply furnished incident to the service. After consideration of the public comment received and our review of the application, we have determined that the Ambu[supreg] aScopeTM Gastro 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 determine 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. Per the applicant, the Ambu[supreg] aScopeTM Gastro is a sterile, single-use, flexible, imaging/illumination gastroscope device that uses an integrated camera module and built-in dual light-emitting diode (LED) illumination to provide access to, illumination, and imaging of the upper GI anatomy for diagnostic and therapeutic purposes for a GI patient. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the Ambu[supreg] aScopeTM Gastro. Per the applicant, the two device categories, C1747 (Endoscope, single-use (i.e., disposable), urinary tract, imaging/illumination device (insertable)) and C1748 (Endoscope, single-use (i.e., disposable), upper gastrointestinal tract (GI), imaging/illumination device, (insertable)), do not appropriately describe the Ambu[supreg] aScopeTM Gastro. Specifically, the applicant asserted that the urinary tract scopes described in C1747 are not indicated for use in the GI system and therefore, do not appropriately describe Ambu[supreg] aScopeTM Gastro. The applicant further asserted that while C1748 describes a single-use endoscopic device, C1748 is only appropriate for single-use duodenoscopes and endoscopic retrograde cholangiopancreatography (ERCP) services. While the long descriptor of C1748 describes disposable endoscopes with imaging and illumination capabilities intended for use in the upper GI and the applicant describes the Ambu[supreg] aScopeTM Gastro as a single-use, gastroscope with illumination and imaging intended for use in the upper GI anatomy, we noted that C1748 only describes single-use duodenoscopes and ERCP services. As such, the Ambu[supreg] aScopeTM Gastro is not described by C1748. We did not identify an existing pass-through payment category that describes the Ambu[supreg] aScopeTM Gastro. We invited public comment on whether the Ambu[supreg] aScopeTM Gastro meets the device category criterion at Sec. 419.66(c)(1). Comment: The applicant and a commenter agreed with CMS' assessment that there are no existing pass-through payment categories that describe the Ambu[supreg] aScopeTM Gastro. The applicant submitted a comment with supporting documents reiterating that C1747 for single-use ureteroscopes and C1748 for single-use duodenoscopes do not describe the Ambu[supreg] aScopeTM Gastro because the Ambu[supreg] aScopeTM Gastro is a gastroscope and not a duodenoscope.\77\ The applicant also submitted a July 2020 CMS Medicare Learning Network memorandum (MM11842) as a supporting document to confirm that C1748 is specific to ERCP procedures, which does not apply to the Ambu[supreg] [[Page 94176]] aScopeTM Gastro.\78\ The other commenter indicated that endoscopic procedure codes, including those for EGD, were mostly created prior to the invention of single-use endoscopes. The commenter provided a detailed list of procedure codes for different types of endoscopes, including duodenoscopes and gastroscopes, to illustrate the differences in their applications. The commenter recommended the establishment of a new category to allow reporting specifically for gastroscopes, as their indications for use differ from other types of endoscopes like duodenoscopes. --------------------------------------------------------------------------- \77\ Please see the public posting at [https://www.regulations.gov/document/CMS-2024-0199-0002/comment for a complete list of evidence and background documents submitted by the applicant during the public comment process. Please note, that as in the proposed rule, we do not summarize background documents, which are documents that do not support the applicant's assertions. \78\ Centers for Medicare & Medicaid Services (2020). MLN Matters: July 2020 Update of the Ambulatory Surgical Center (ASC) Payment System (HHS-0938-2020-F-6667). U.S. Department of Health and Human Services. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/MM11842.pdf. --------------------------------------------------------------------------- However, a few other commenters stated that they believed that the existing code C1748 appropriately describes the Ambu[supreg] aScopeTM Gastro technology. One of the commenters stated that this code was established to cover all single-use scopes for upper GI procedures, regardless of the camera orientation (forward-facing or side-facing). Another commenter noted that C1748 was established in 2020, following an application from Boston Scientific for its EXALTTM Model D Single-Use Duodenoscope.\79\ The commenter noted that while the EXALTTM Model D Single-Use Duodenoscope is used primarily in ERCP, CMS updated C1748 by assigning additional transnasal procedure codes to C1748 to include devices like the EvoEndo Model LE Single-Use Gastroscope.\80\ The commenter stated that the description of C1748 reflects the use of an upper GI imaging/ illumination device and is not specific only to duodenoscopes. --------------------------------------------------------------------------- \79\ Centers for Medicare & Medicaid Services (2020). MLN Matters: July 2020 Update of the Ambulatory Surgical Center (ASC) Payment System (HHS-0938-2020-F-6667). U.S. Department of Health and Human Services. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/MM11842.pdf. \80\ Centers for Medicare & Medicaid Services (2020). MLN Matters: July 2020 Update of the Ambulatory Surgical Center (ASC) Payment System (HHS-0938-2020-F-6667). U.S. Department of Health and Human Services. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/MM11842.pdf. --------------------------------------------------------------------------- Response: We appreciate the applicant's and commenters' input. We agree with the applicant that C1747 does not describe the Ambu[supreg] aScopeTM Gastro because C1747 is intended to describe devices used in a different anatomical area (the urethra) of the patient. With regard to C1748, we continue to believe that C1748 does not describe the Ambu[supreg] aScopeTM Gastro because C1748 describes devices intended to perform ERCP services and limited transnasal endoscopy services. Unlike the devices described by C1748, according to the description provided by the applicant, the Ambu[supreg] aScopeTM Gastro is intended to be used for transoral endoscopy and is not indicated for transnasal endoscopy or ERCP services. Specifically, while we agree that C1748 describes upper GI imaging/illumination devices, which could describe the Ambu[supreg] aScopeTM Gastro, C1748 does not include the types of procedures that the Ambu[supreg] aScopeTM Gastro can perform, such as those described by HCPCS code 43205 (Esophagoscopy, flexible, transoral; with bandligation of esophageal varices). We acknowledge that a list of procedure codes associated with HCPCS code C1748 were updated in 2022 to include transnasal services and were assigned to APC 5301 (Level 1 Upper GI Procedures) and APC 5302 (Level 2 Upper GI Procedures), however, we do not believe that the addition of those codes to the codes for which C1748 can be reported describe the Ambu[supreg] aScopeTM Gastro because, as previously indicated, it is our understanding that the Ambu[supreg] aScopeTM Gastro is intended for transoral services only.\81\ We note that the EvoEndo [supreg] Model LE Single-use Gastroscope is indicated for use both as a transoral and transnasal gastroscope, while the Ambu[supreg] aScopeTM Gastro is only indicated for transoral use. While we believe the devices are comparable for the transoral functions of the devices for the purposes of evaluating substantial clinical improvement as discussed below, we do not believe that adding a subset of applicable procedure codes to C1748 expanded the device category code in such a way that it describes the Ambu[supreg] aScopeTM Gastro. After consideration of the public comments received and our review of the application, we agree that there is no previous or existing pass-through payment category that appropriately describes the Ambu[supreg] aScopeTM Gastro because no current category appropriately describes a single- use, transoral gastroscope with illumination and imaging intended for use in the upper GI anatomy. Therefore, we have determined that the Ambu[supreg] aScopeTM Gastro meets the device eligibility criterion at Sec. 419.66(c)(1). --------------------------------------------------------------------------- \81\ Centers for Medicare & Medicaid Services (2020). MLN Matters: July 2020 Update of the Ambulatory Surgical Center (ASC) Payment System (HHS-0938-2020-F-6667). U.S. Department of Health and Human Services. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/MM11842.pdf. --------------------------------------------------------------------------- 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] aScopeTM Gastro represents a substantial clinical improvement over existing technologies in the diagnosis and management of endoscopic procedures and examination within the upper GI anatomy. The applicant outlined the following areas in which it claimed the Ambu[supreg] aScopeTM Gastro would provide a substantial clinical improvement: (1) elimination of the risk of cross- contamination between patients and scopes, (2) elimination of the risk of cross-contamination for reusable gastroscopes, (3) elimination of the risk of resistant infections that originate from reusable gastroscopes, (4) avoidance of scope damage and debris after reprocessing, (5) avoidance of damaged and contaminated scopes from being used on patients, (6) elimination of the risk of patient-to- patient infections associated with contaminated scopes, and (7) avoidance of infection and death associated with reusable gastroscope contamination. The applicant provided seven background articles about reusable GI endoscopes to support its claims. Table 122 summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for the Ambu[supreg] aScopeTM Gastro for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. BILLING CODE 4120-01-P [[Page 94177]] [GRAPHIC] [TIFF OMITTED] TR27NO24.149 [[Page 94178]] [GRAPHIC] [TIFF OMITTED] TR27NO24.150 BILLING CODE 4120-01-C After review of the information provided by the applicant, we stated we had the following concerns regarding whether the Ambu[supreg] aScopeTM Gastro meets the substantial clinical improvement criterion. First, we noted that the applicant identified 11 other devices that it believed are most like the Ambu[supreg] aScopeTM Gastro: (1) Olympus GIF-HQ 190; (2) Olympus GIF-1TH190; (3) Olympus GIF-H190; (4) Olympus GIF-CP190N; (5) Fujifilm EG-760R; (6) Fujifilm EG-760CT; (7) Fujifilm EG-760Z; (8) Fujifilm EG-740N; (9) Pentax HD Video Gastroscope EG34 i10; (10) Pentax MagniView EG 2990Zi; and (11) Pentax G EYE. According to the applicant, these devices are used during the same specific procedure(s) and/or services with which the nominated device is used. The applicant stated that the nominated device's single-use feature is unique among the comparators because its single- use feature eliminates gastroscope reprocessing. The applicant also indicated that there are no HCPCS Level I and/or Level II code(s) used to identify these existing devices. While the evidence provided demonstrated that the Ambu[supreg] aScopeTM Gastro may be different than the other 11 closely related devices, it does not provide any comparative data that demonstrates that the Ambu[supreg] aScopeTM Gastro offers a substantial clinical improvement when compared to the other 11 devices. Second, we noted that the nominated device was determined to be substantially equivalent to a predicate device: OLYMPUS EVIS EXERA II Gastrointestinal Videoscope GIF H180 (K100584). The FDA 510(k) summary indicated that both devices share the same technological characteristics such as insertion portion length, working channel diameter, direction of view and bending angles. We noted that the 510(k) summary indicated that, unlike the predicate device, the Ambu[supreg] aScopeTM Gastro is a sterile, single-use device and not intended to be reprocessed. Again, while this demonstrated that the Ambu[supreg] aScopeTM Gastro may be different than the predicate device, it is unclear whether this difference demonstrates substantial clinical improvement. No comparative data demonstrating that the Ambu[supreg] aScopeTM Gastro provides a substantial clinical improvement when compared to the Olympus EVIS EXERA II Gastrointestinal Videoscope GIF-H180 was provided. We stated we would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical benefit in comparison to other existing devices. Further, the applicant indicated that while other single-use endoscopes are available, there are no known competitive devices on the market that are single-use, transoral, and marketed in the U.S. The applicant compared the Ambu[supreg] aScopeTM Gastro to the following two existing devices: (1) EndoFresh Single-Use Gastroscope; and (2) EvoEndo Model LE Single-Use Gastroscope. Specifically, the applicant noted that although EndoFresh Single-Use Gastroscope is FDA- cleared and a similar device that could also become eligible for transitional pass-through payment under the proposed additional category, it has no commercial activity in the U.S. According to the applicant, while EvoEndo[supreg] Model LE Single-Use Gastroscope is used during the same specific procedure(s) and/or services as the Ambu[supreg] aScopeTM Gastro, the Ambu[supreg] aScopeTM Gastro is different [[Page 94179]] from EvoEndo[supreg] Model LE Single-Use Gastroscope because the Ambu[supreg] aScopeTM Gastro is a transoral scope, not transnasal. The applicant also indicated that there are no HCPCS Level I and/or Level II code(s) used to identify EvoEndo Model LE Single-Use Gastroscope. However, we noted that EvoEndo[supreg] Model LE Single-Use Gastroscope is both transoral and transnasal, which is indicated on the EvoEndo, Inc.'s website and on its FDA 510(k) clearance letter. We also noted that the applicant did not compare the Ambu[supreg] aScopeTM Gastro to another single-use, FDA-cleared endoscope available on the market--EXALTTM Model D, Single-Use Duodenoscope--which we stated that we believe may be similar. We stated we were interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical improvement in comparison to similar single-use competitive devices such as the EvoEndo[supreg] Model LE Single-Use Gastroscope and the EXALTTM Model D, Single-Use Duodenoscope. In addition, we noted that the applicant's self-sponsored studies, which are background articles by Muscarella, L. F. (2022),\82\ Muscarella, L.F. (2023),\83\ and Ofstead, et. al. (2022),\84\ lack direct comparison of the nominated device to other devices, and do not directly show any clinical improvement that results from the use of the nominated device compared to the use of other devices. 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. Additional supporting evidence, preferably published peer-reviewed clinical trials, that shows these improved clinical outcomes would help inform our assessment of whether the Ambu[supreg] aScopeTM Gastro demonstrates substantial clinical improvement over existing technologies. --------------------------------------------------------------------------- \82\ Muscarella, L.F. (2022). Contamination of Flexible Endoscopes and Associated Infections: A Comprehensive Review and Analysis of FDA Adverse Event Reports. LFM Healthcare Solutions, LLC. https://lfm-hcs.com/2022/01/contamination-of-flexible-endoscopes-and-associated-infections/. \83\ Muscarella, L.F. (2023). Gastroscopes Have Been Linked to A Cluster of Resistant E. coli Infections--Is the Risk Sufficiently Recognized? LFM Healthcare Solutions, LLC. https://lfm-hcs.com/2023/01/gastroscopes-have-been-linked-to-a-cluster-of-resistant-e-coli-infections-is-the-risk-sufficiently-recognized/. \84\ Ofstead, C.L., Smart, A.G., Hopkins, K.M., & Wetzler, H.P. (2023). The utility of lighted magnification and borescopes for visual inspection of flexible endoscopes. American Journal of Infection Control, 51(1), 2-10. https://doi.org/10.1016/j.ajic.2022.08.026. --------------------------------------------------------------------------- Moreover, while the details provided in the application and all the articles submitted as evidence of substantial clinical improvement discuss potential adverse events from reusable gastroscope procedures, they do not appear to directly show any clinical improvement that results from the use of the Ambu[supreg] aScopeTM Gastro. Rather, the applicant provided evidence which seems to rely on indirect inferences from other sources of data. Specifically, the applicant included an FDA Manufacturer and User Facility Device Experience (MAUDE) report \85\ which provides the details of multiple adverse event reports associated with the contamination or suspected contamination of reusable gastroscopes but does not directly show any clinical improvement that results from the use of the Ambu[supreg] aScopeTM Gastro. --------------------------------------------------------------------------- \85\ MAUDE Adverse Event Report: AIZU OLYMPUS CO., LTD. EVIS EXERA III GASTROINTESTINAL VIDEOSCOPE (fda.gov). --------------------------------------------------------------------------- While the applicant claimed that the Ambu[supreg] aScopeTM Gastro eliminates cross-contamination associated with reusable gastroscopes and eliminates the risk of infections that originate from reusable gastroscopes, we stated that we do not believe that we have sufficient information on the prevalence of infection to evaluate the applicant's substantial clinical improvement claims for the Ambu[supreg] aScopeTM Gastro. We noted the analyses on adverse event reports and the FDA MAUDE report appear to apply to flexible, reprocessed gastroscope or endoscopes, broadly, but not to disposable, single-use devices comparable to the nominated device.86 87 88 Therefore, we questioned the direct relevance of these background articles to the nominated device and the applicant's substantial clinical improvement claims. Further, we noted that many of the applicant's substantial clinical improvement claims rely on an assumption that inadequate reprocessing of reusable endoscopes is positively correlated with heightened risk of infection. We noted that the applicant's self-sponsored analyses of FDA adverse event reports and studies and the FDA MAUDE report do not provide evidence on the prevalence of infection, establish a clear 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 devices.89 90 91 92 We stated that we would be interested in more information on the prevalence of infection due to incomplete/inadequate processing for gastroscopes in the U.S. and whether single-use gastroscopes reduce the infection rate in patients to identify the extent of the problem with existing technologies. --------------------------------------------------------------------------- \86\ Muscarella, L.F. (2022). Contamination of Flexible Endoscopes and Associated Infections: A Comprehensive Review and Analysis of FDA Adverse Event Reports. https://lfm-hcs.com/2022/01/contamination-of-flexible-endoscopes-and-associated-infections/. \87\ Muscarella, L.F. (2023). Gastroscopes Have Been Linked to A Cluster of Resistant E. coli Infections--Is the Risk Sufficiently Recognized? https://lfm-hcs.com/2023/01/gastroscopes-have-been-linked-to-a-cluster-of-resistant-e-coli-infections-is-the-risk-sufficiently-recognized/. \88\ MAUDE Adverse Event Report: AIZU OLYMPUS CO., LTD. EVIS EXERA III GASTROINTESTINAL VIDEOSCOPE (fda.gov). \89\ Muscarella, L.F. (2022). Contamination of Flexible Endoscopes and Associated Infections: A Comprehensive Review and Analysis of FDA Adverse Event Reports. https://lfm-hcs.com/2022/01/contamination-of-flexible-endoscopes-and-associated-infections/. \90\ Muscarella, L.F. (2023). Gastroscopes Have Been Linked to A Cluster of Resistant E. coli Infections--Is the Risk Sufficiently Recognized? https://lfm-hcs.com/2023/01/gastroscopes-have-been-linked-to-a-cluster-of-resistant-e-coli-infections-is-the-risk-sufficiently-recognized/. \91\ Ofstead, C.L., Smart, A.G., Hopkins, K.M., & Wetzler, H.P. (2023). The utility of lighted magnification and borescopes for visual inspection of flexible endoscopes. American Journal of Infection Control, 51(1), 2-10. \92\ MAUDE Adverse Event Report: AIZU OLYMPUS CO., LTD. EVIS EXERA III GASTROINTESTINAL VIDEOSCOPE (fda.gov). --------------------------------------------------------------------------- We invited public comment on whether the Ambu[supreg] aScopeTM Gastro meets the device category criterion at Sec. 419.66(c)(2). Comment: In response to our concerns that the Ambu[supreg] aScopeTM Gastro lacked comparative data demonstrating substantial clinical improvement compared to other available treatments, the applicant submitted a comment along with a multitude of articles and background documents.\93\ The applicant submitted these documents as evidence to support the claim that the Ambu[supreg] aScopeTM Gastro is as a single-use device which offers substantial clinical improvements compared to reusable gastroscopes by eliminating infection risks and ensuring consistent functionality, which they assert are significant issues with reusable gastroscopes. The applicant stated that the Ambu[supreg] aScopeTM Gastro reduces infection risks and ensures consistent functionality. To support this claim, the applicant cited over 10,000 [[Page 94180]] Manufacturer and User Facility Device Experience (MAUDE) adverse event database reports for reusable scopes since May 2023 that include 1,500 related to contamination issues. The applicant noted that none of the MAUDE reports include adverse event reports for the Ambu[supreg] aScopeTM Gastro. In addition, the applicant referenced studies showing problems with reusable scopes, such as inadequate cleaning and performance degradation.94 95 96 97 98 The applicant claimed that single-use scopes could be used in various settings without reprocessing delays, potentially expanding access to care. Although no specific studies on the Ambu[supreg] aScopeTM Gastro's impact on patient throughput exist, the applicant cited research on other single-use scopes indicating increased efficiency and reduced wait times, suggesting similar benefits.99 100 101 In response to our concern about the lack of information identifying the extent of the problem with existing technologies, including the prevalence of infection due to incomplete and/or inadequate processing for gastroscopes in the U.S., and whether single-use gastroscopes reduce the infection rate in patients, the applicant stated that contamination issues are primarily relevant to reusable gastroscopes due to their complex reprocessing requirements, which are prone to human error and design flaws. The applicant referenced the studies and MAUDE reports again, reiterating that they show significant contamination rates and adverse events for reusable gastroscopes.102 103 The applicant indicated that one study found a 19.98 percent contamination rate in reprocessed endoscopes. The applicant argued that single-use devices, like the Ambu[supreg] aScopeTM Gastro, eliminate cross-contamination risks, and noted there have been no MAUDE reports including the Ambu[supreg] aScopeTM Gastro.\104\ The applicant anticipated that FDA might recommend single-use gastroscopes, citing severe infections linked to reusable ones, including deaths from Escherichia coli (E. coli) and Carbapenem-resistant Enterobacteriaceae (CRE). The applicant emphasized that single-use gastroscopes would particularly benefit immunosuppressed patients by eliminating these risks. --------------------------------------------------------------------------- \93\ Please see the public posting at https://www.regulations.gov/document/CMS-2024-0199-0002/comment for a complete list of background documents submitted [by the applicant] during the public comment process. \94\ Haislip, I., Hoffman, D., Dehlholm-Lambertsen, E., & Cool,

C. (20223) Single-Use Vs Reusable Endoscope Reprocessing: A Staff

Survey on Safety and Effectiveness. Value in Health, 26(12): S434. https://doi.org/10.1016/j.jval.2023.09.227. \95\ Hoffman, D. & Cool, C. (2024). Gastrointestinal Endoscopy Volume, Efficiency, And Safety Issues: A Case Report. Ambu USA. https://www.ambuusa.com/Files/Files/Downloads/Ambu%20USA/Gastrointestinal-endoscopy-volume_-efficiency_-and-safety-issues-a-case-report-poster.pdf. \96\ Wallace, M.M., Keck, T., Dixon, H., & Yassin, M. (2025). Borescope examination and microbial culture results of endoscopes in a tertiary care hospital led to changes in storage protocols to improve patient safety. American Journal of Infection Control, 51(4): 361-366. https://doi.org/10.1016/j.ajic.2022.09.009. \97\ Ofstead, C.L., Smart, A.G., Hopkins, K.M., & Wetzler, H.P. (2022). The utility of lighted magnification and borescopes for visual inspection of flexible endoscopes. American Journal of Infection Control, (22)00660-5. https://doi.org/10.1016/j.ajic.2022.08.026. \98\ Billy, H. & Pradhan, S. (2024). Superior Backward Articulation in Disposable Gastroscopes versus Reusable Gastroscopes. Surgery for Obesity and Related Diseases, 20(6): S136. https://doi.org/10.1016/j.soard.2024.04.426. \99\ Johnson, B.A., Raman, J.D., Best, S.L., & Lotan, Y. (2023). Prospective Randomized Trial of Single-Use vs Reusable Cystoscope for Ureteral Stent Removal. Journal of Endourology, 37(10): 1139- 1144. https://doi.org/10.1089/end.2023.0134. \100\ G[ouml]ger, Y.E., [Ouml]zkent, M.S., K[inodot]l[inodot]n[ccedil] M.T., Ta[scedil]kapu, H.H., G[ouml]ger, E., Ayd[inodot]n, A., S[ouml]nmez, M.G., & Karalezli, G. (2021). Efficiency of retrograde intrarenal surgery in lower pole stones: disposable flexible ureterorenoscope or reusable flexible ureterorenoscope? World Journal of Urology, 39(9): 3643-3650. https://doi.org/10.1007/s00345-021-03656-y. \101\ Bowen, A.J., Macielak, R.J., Fussell, W., Yeakel, S., McMillan, R., Goates, A, Awadallah, A., & Ekbom, DC (2024). Single- use versus reusable rhinolaryngoscopes for inpatient otorhinolaryngology consults: Resident and patient experience. Laryngoscope: Investigative Otolaryngology, 9(1): e1203. https://doi.org/10.1002/lio2.1203. \102\ Wallace, M.M., Keck, T., Dixon, H., & Yassin, M. (2025). Borescope examination and microbial culture results of endoscopes in a tertiary care hospital led to changes in storage protocols to improve patient safety. American Journal of Infection Control, 51(4): 361-366. https://doi.org/10.1016/j.ajic.2022.09.009. \103\ Goyal, H., Larsen, S., Perisetti, A., Larsen, N.B., Ockert, L.K., Adamsen, S., Tharian, B., & Thosani, N. (2002). Gastrointestinal endoscope contamination rates--elevators are not only to blame: a systematic review and meta-analysis. Endoscopy: International Open, 10(06): E840-E853. https://doi.org/10.1055/a-1795-8883. \104\ Goyal, H., Larsen, S., Perisetti, A., Larsen, N.B., Ockert, L.K., Adamsen, S., Tharian, B., & Thosani, N. (2002). Gastrointestinal endoscope contamination rates--elevators are not only to blame: a systematic review and meta-analysis. Endoscopy: International Open, 10(06): E840-E853. https://doi.org/10.1055/a-1795-8883. --------------------------------------------------------------------------- In response to our concern about the lack of comparative data demonstrating that the Ambu[supreg] aScopeTM Gastro provides substantial clinical improvement over the OLYMPUS EVIS EXERA II Gastrointestinal Videoscope GIF H180, the applicant submitted a study by Billy, et al. (2024), conducted at a Community Memorial Health Systems-Ventura, CA's endoscopic GI lab, that examined the difference in the degrees of retroflexion articulation achieved between an inventory of reusable diagnostic gastroscopes (RUDG: OLYMPUS GIF-HQ190 & H190) compared to that of two, single-use diagnostic gastroscopes (SUDG: Ambu[supreg] aScopeTM Gastro).\105\ Per the applicant, the study demonstrated that the Ambu[supreg] aScopeTM Gastro has superior retroflexion compared to the OLYMPUS GIF-HQ190. The applicant believed that this is significant because articulation is crucial for the procedures these devices perform and reduced effectiveness in RUDGs can hinder optimal patient care. --------------------------------------------------------------------------- \105\ Billy, H. & Pradhan, S. (2024). Superior Backward Articulation in Disposable Gastroscopes versus Reusable Gastroscopes. Surgery for Obesity and Related Diseases, 2 0(6): S136. https://doi.org/10.1016/j.soard.2024.04.426. --------------------------------------------------------------------------- However, one commenter stated that the applicant has not demonstrated substantial clinical improvement over existing technologies. The commenter stated that FDA clearance for the Ambu[supreg] aScopeTM Gastro is based on equivalence to the earlier generation Olympus EVIS Exera II model 180 series. The commenter believed that the applicant has not provided comparative clinical documentation to support its claim. In response to our concern about the lack of information demonstrating substantial clinical improvement with the use of the Ambu[supreg] aScopeTM Gastro device compared to similar single-use competitive devices, such as the EXALTTM Model D, Single-Use Duodenoscope and the EvoEndo Model LE Single-Use Gastroscope, the applicant submitted a comment asserting that there are key differences between the Ambu[supreg] aScopeTM Gastro and the EXALTTM Model D Single-Use Duodenoscope and the EvoEndo Model LE Single-Use Gastroscope. The applicant stated that the Ambu[supreg] aScopeTM Gastro cannot be compared to the EXALTTM Model D because it is not indicated for ERCP procedures. The applicant noted that, compared to the EvoEndo Model LE Single-Use Gastroscope, the Ambu[supreg] aScopeTM Gastro has a larger working channel (2.8 mm vs. 2.0 mm), allowing for more endoscopic accessories and broader capabilities. The applicant also claimed that while the EvoEndo[supreg] Model LE Single-Use Gastroscope can perform some of the same procedures, it is limited compared to the Ambu[supreg] aScopeTM Gastro, which can perform 30 HCPCS procedures versus 10 for the EvoEndo[supreg] Model LE Single-Use Gastroscope. A commenter agreed with CMS, noting that the EvoEndo[supreg] Model LE Single-Use Gastroscope is for both transoral and transnasal use, as stated on EvoEndo[supreg] Model LE Single-Use Gastroscope website and its FDA 510(k) clearance summary. The commenter highlighted similarities in FDA clearances between the Ambu[supreg] [[Page 94181]] aScopeTM Gastro and the EvoEndo[supreg] Model LE Single-Use Gastroscope and noted that the applicant has not shown substantial clinical improvement of the nominated device over this existing device. To bolster its claims that single-use gastroscopes have improved outcomes compared to reusable gastroscopes, the applicant submitted background articles and other documents about the potential adverse events from reusable gastroscope procedures as well as from other reusable types of endoscopes for different anatomy (e.g., bronchoscopy). Many commenters noted numerous challenges and risks associated with the reprocessing of reusable endoscopes, emphasizing the need for single-use alternatives like the Ambu[supreg] aScopeTM Gastro to improve patient safety. A few commenters pointed out that delays in reprocessing due to staffing shortages, union-related issues, and the need to transport scopes across hospitals are common. Several commenters stated that the cleaning process for endoscopes involves many complex steps, making the cleaning process prone to human error and creating difficulty in training staff effectively. One commenter stated that despite proper education, human error remains a significant barrier to successful reprocessing with observations of missed steps and shortcuts due to assumptions or mimicking others. A few commenters further explained that inadequate training and preparation, especially during after-hours procedures, contribute to poor cleaning practices and increased infection risks. Several commenters further noted that continuous cleaning without breaks due to staff shortages and high demand increases the likelihood of errors. Many commenters identified specific reprocessing gaps, including blood dripping from reprocessed scopes, improper handling of Creutzfeldt-Jakob Disease (CJD) cases, non-compliance with cleaning guidelines, and failed competencies among reprocessing technicians. One commenter indicated that problems with automatic preprocessors, inconsistent reprocessing locations, and confusion over Automated Endoscope Reprocessors (AERs) filters add to the complexity and risk. One commenter stated that there is a positive correlation between inadequate reprocessing and increased infection risk. Specifically, the commenter asserted that single-use gastroscopes eliminate this risk, providing a higher standard of care. The commenter cited several FDA reports and peer-reviewed studies asserting that they link reusable gastroscopes to infections and outbreaks, thereby supporting the need for single-use alternatives. The commenter acknowledged that linking or associating a reusable gastroscope with an infection or outbreak does not confirm the gastroscope transmitted or otherwise caused the infection, as one or more other factors could be, in part or solely, responsible. The commenter suggested more data would be required to conclude more definitively that the endoscope caused an infection. The commenter also acknowledged that FDA's MAUDE database has limitations and that its housed adverse event reports may be incomplete, inaccurate, untimely, unverified, or biased. The applicant and several commenters advocated for the adoption of disposable gastroscopes, such as the Ambu[supreg] aScopeTM Gastro in healthcare settings, emphasizing their benefits in terms of efficiency, patient safety, and cost-effectiveness. Several commenters stated that single-use gastroscopes are always ready for use, eliminating delays caused by the need to reprocess reusable scopes because they can be set up quickly, facilitating continuous care, especially in critical situations. Multiple commenters stated that single-use gastroscopes eliminate the risk of cross-infection associated with reusable scopes, which can remain contaminated even after reprocessing. One commenter indicated that sterile single-use devices lower the infection risk for patients with compromised immune systems. Another commenter provided a scenario in which single-use gastroscopes are crucial for patients with diseases like CJD, where reusable scopes might need to be destroyed. Several commenters pointed out that single-use gastroscopes remove the financial and logistical burdens associated with reprocessing, sampling, culturing, and infection surveillance. One commenter considered the single-use gastroscopes serve as a bridge when reusable scopes are out for repair, ensuring uninterrupted patient care. Several commenters stated that the single-use scopes provide consistent performance as they are used only once, avoiding issues related to scope degradation. One commenter believed that single-use scopes can incorporate rapid design improvements, enhancing their clinical capabilities. Response: We appreciate the applicant's and commenters' input and insights on efficiency, patient safety, and cost-effectiveness. However, we wish to reiterate the statement we made in CY 2024 (88 FR 81736) where we encouraged 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. Further, we note that the information submitted by the applicant in support of its CY 2025 application during the comment period did not appear to provide information that demonstrates that the use of the Ambu[supreg] aScopeTM Gastro improves clinical outcomes when compared to the use of similar reusable or single-use gastroscope devices. In order to evaluate substantial clinical improvement over currently available treatments to meet the transitional pass-through payment criterion at Sec. 419.66(c)(2), we consider supporting evidence, preferably published peer-reviewed clinical trials, that demonstrates 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 comparing the nominated device to the standard of care. Based on the information provided and our review, we note that the Ambu[supreg] aScopeTM Gastro and the EvoEndo Model LE Single Use Gastroscope do perform at least 10 of the same procedures. We remain concerned with the lack of evidence comparing these devices' respective clinical outcomes. We further note that the applicant referenced the study by Billy, et al (2024), which compared the nominated device against OLYMPUS EVIS EXERA III GIF-HQ190, not the predicate device, OLYMPUS EVIS EXERA II Gastrointestinal Videoscope GIF H180 for retroflexion articulation (not clinical outcome). We also note that the Billy, et al. (2024) article is not a peer-reviewed publication and does not provide evidence of the Ambu[supreg] aScopeTM Gastro's clinical improvement compared to other single-use gastroscopes. In addition to this study, the applicant submitted numerous background articles; however, these articles did not include evidence that demonstrated or supported the Ambu[supreg] aScopeTM Gastro's substantial clinical improvement compared to other single-use gastroscopes. We also have concerns regarding the submitted articles' relevance and appropriateness. For example, we have concerns about the validity of the findings in the Haislip, et al. (2023) poster submitted as evidence by the applicant because it lacks a full description of the methods, and it is unknown where it was presented and the extent to which it was peer reviewed for the validity of its findings. In the Tomlinson publication, which primarily [[Page 94182]] discusses the complexity of Instructions For Use (IFUs) for noncritical devices but not semi-critical devices like endoscopes that require high-level disinfection, we note that the problematic IFUs mentioned pertain to physical therapy and ophthalmology, not endoscopy.\106\ As such, we question the relevancy of the submitted materials and do not believe that the information provided supported the applicants claims of substantial clinical improvement. --------------------------------------------------------------------------- \106\ Tomlinson L, Halipern N, Alexander M, Townsend S, Zabriskie K, Luper L. Modernizing Medical Device Instructions for Use (IFUs): Infection Preventionists Speak Up for Patient Safety. APIC_Modernizing-Medical-Device-IFUs_5_16_24.pdf (sdapic.org). --------------------------------------------------------------------------- Based on our review of the extensive MAUDE reports provided by one of the commenters, we found that the vast majority did not conclusively link reusable gastroscopes to infections and those with proven or highly likely cross-contamination were few in number. We also note that the references provided by the commenter were about bronchoscopes and duodenoscopes, which are different anatomical areas that may be more vulnerable to infection. Comment: The applicant and a commenter urged CMS to follow precedents set with Uretero1, aScope5 Broncho HD, and other single-use endoscopes and to approve the Ambu[supreg] aScopeTM Gastro for transitional pass-through payment status. The applicant argued that the existing evidence is consistent with the level of evidence provided for previously approved single-use endoscopes like Uretero1 and aScope 5 Broncho HD. Response: We appreciate the applicant's and commenter's input. We evaluate documentation submitted for each application as it applies to that specific device. Due to inherent differences in the devices themselves and/or the supporting documentation submitted, we may have different concerns. In addition, we are not precluded from evaluating and expressing concerns regarding documentation submitted with an application because we have evaluated the document as part of a previous application. We approved the Uretero1 and the aScope5 Broncho HD applications for device pass-through status because the applicants submitted documentation of studies that directly demonstrated the nominated device's improved clinical outcomes compared to other devices. We do not believe that the applicant has submitted documentation that demonstrates a substantial clinical improvement with use of the Ambu[supreg] aScopeTM Gastro compared to the use of other comparable devices. Comment: In regard to our concern about using other sources of data and relying on indirect inferences as evidence, the applicant commented that we should call our attention to the volumes of literature concerning reprocessing issues. The applicant shared MAUDE reports to show that reusable devices have had outbreaks, while disposable gastroscopes, like the Ambu[supreg] aScopeTM Gastro, have not. The applicant also noted a pattern of FDA advisories and subsequent CMS approvals for single-use endoscopes (single-use aScope 5 Broncho HD) suggesting that single-use gastroscopes offer substantial clinical improvements. Additionally, the applicant argued that single- use gastroscopes enhance availability and access to care, especially during equipment failures or staffing shortages. In response to our concern about lack of studies that directly compare the Ambu[supreg] aScopeTM Gastro device to other single-use devices, the applicant argued that due to the nature and relative newness of single-use endoscopes, extensive data is not yet available on the Ambu[supreg] aScopeTM Gastro device specifically. The applicant emphasized reprocessing issues, submitting reports documenting challenges and risks, including bacterial transmission, even with meticulous adherence to instructions. The applicant further argued that conducting a full-scale randomized trial comparing single-use and reusable gastroscopes would be time- prohibitive. The applicant again cited the study by Billy, et al (2024) showing superior retroflexion of single-use devices over reusable ones. The applicant emphasized the sterile nature of the Ambu[supreg] aScopeTM Gastro, eliminating infection risks associated with reprocessing reusable devices. The applicant reiterated that single-use endoscopes save time, improve morale, and reduce reprocessing risks, leading to increased patient throughput and reduced wait times, demonstrating clinical improvements over reusable options. Response: We thank the applicant for its input. However, we continue to have concerns about the studies and evidence submitted, as most of these are background articles that do not directly assess, evaluate, or review the Ambu[supreg] aScopeTM Gastro. When there are currently available treatment options for a patient population (as is the case for the Ambu[supreg] aScopeTM Gastro), substantial clinical improvement is demonstrated when the candidate device demonstrates significantly improved clinical outcomes compared to the currently available treatments.\107\ In this context, the submitted evidence in support of the Ambu[supreg] aScopeTM Gastro's substantial clinical improvement must demonstrate that Ambu[supreg] aScopeTM Gastro results in substantial clinical improvement when compared to available reusable and single-use devices for the treatment of the patient population. Inferences that the device may improve clinical outcomes because it may obviate complications associated with other available treatments are insufficient to demonstrate substantial clinical improvement. Therefore, the inferences derived from submitted evidence, including analysis of adverse event reports and MAUDE reports, do not establish substantial clinical improvement. Specifically, we are concerned that the details provided in the application and the documents submitted as evidence of substantial clinical improvement are background documents that discuss potential adverse events from reusable gastroscope procedures and rely on indirect inferences from other sources of data. In addition, while we acknowledge that we have considered FDA advisories in the evaluation and subsequent CMS approval for single-use endoscopes in the past, we note that the applicant did not submit an FDA safety communication for reusable gastroscope, rather the applicant speculated that FDA will issue a safety communication similar to the safety communications they issued on bronchoscopes, ureteroscope, and duodenoscopes. We are not aware of an FDA safety communication for gastroscope at this time. We do not believe that the documents provided by the applicant and commenters demonstrate any clinical improvements that result from the use of the Ambu[supreg] aScopeTM Gastro when compared to available reusable or single-use devices that are similar to the Ambu[supreg] aScopeTM Gastro. As such, we continue to have the concerns articulated in the CY 2025 OPPS/ASC proposed rule and discussed above. --------------------------------------------------------------------------- \107\ Device Pass-through Requirements: https://mearis.cms.gov/public/resources. --------------------------------------------------------------------------- We appreciate the commenters' input but remain concerned that there has not been an adequate comparison of clinical outcomes between the Ambu[supreg] aScopeTM Gastro and other available reuseable and/or single-use devices used for similar indications. Because of the reasons discussed above, we do not believe that the Ambu[supreg] aScopeTM [[Page 94183]] Gastro represents a substantial clinical improvement relative to existing therapies currently available. Therefore, we have determined that the Ambu[supreg] aScopeTM Gastro does not meet the substantial clinical improvement criterion at Sec. 419.66(c)(2). 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 the Ambu[supreg] aScopeTM Gastro would be reported with HCPCS codes shown in Table 123. [[Page 94184]] [GRAPHIC] [TIFF OMITTED] TR27NO24.151 [[Page 94185]] [GRAPHIC] [TIFF OMITTED] TR27NO24.152 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 (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. 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 applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5301, which had a CY 2023 payment rate of $825.51 at the time the application was received. HCPCS code 43239 in APC 5301 had a CY 2023 device offset amount of $2.64 at the time the application was received.\108\ According to the applicant, the cost of the Ambu[supreg] aScopeTM Gastro is $799.00. --------------------------------------------------------------------------- \108\ We noted that the applicant selected a device offset amount of $21.55 for APC 5301 without selecting a specific HCPCS/CPT code. However, for the HCPCS/CPT codes provided by the applicant, we noted the HCPCS/CPT code level device offset amounts are available in Addendum P to the CY 2023 OPPS/ASC final rule with comment period. For our calculation, we selected the HCPCS/CPT code level device offset amount of $2.64 related to HCPCS 43239 in APC 5301 found in Addendum P to the CY 2023 OPPS/ASC final rule with comment period. Based on our initial assessment for the proposed rule, using the device offset amount of $2.64 would result in Ambu[supreg] aScopeTM Gastro 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 average reasonable cost of $799.00 for the Ambu[supreg] aScopeTM Gastro is 96.79 percent of the applicable APC payment amount for the service related to the category of devices of $825.51 (($799.00/ $825.51) x 100 = 96.79 percent). Therefore, we stated that we believe the Ambu[supreg] aScopeTM Gastro 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 $799.00 for the Ambu[supreg] aScopeTM Gastro is 30,265.15 percent of the cost of the device-related portion of the APC payment amount for the related service of $2.64 (($799.00/$2.64) x 100 = 30,265.15 percent). Therefore, we stated that we believe the Ambu[supreg] aScopeTM Gastro 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] aScopeTM Gastro and the portion of the APC payment amount for the device of $2.64 is 96.47 percent of the APC payment amount for the related service of $825.51 ((($799.00-$2.64)/$825.51) x 100 = 96.47 percent). Therefore, we stated that we believe the Ambu[supreg] aScopeTM Gastro meets the third cost significance requirement. We invited public comment on whether the Ambu[supreg] aScopeTM Gastro 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 the Ambu[supreg] aScopeTM Gastro meets all three of the cost significance criteria. Response: We appreciate the applicant's input. After consideration of [[Page 94186]] the public comment received and our findings from the first, second, and third cost significance tests, we agree that the Ambu[supreg] aScopeTM Gastro meets the cost significance criteria specified at Sec. 419.66(d). After consideration of the public comments received and our review of the device pass-through application, we are not approving the Ambu[supreg] aScopeTM Gastro for transitional pass-through payment status in CY 2024 because the product does not meet the substantial clinical improvement criterion at Sec. 419.66(c)(2). (b) OMEZA Wound Care Matrix (OCMTM) OMEZA LLC submitted an application for a new device category for transitional pass-through payment status for OCMTM for CY 2025. According to the applicant, OCMTM is an amorphous, solid, malleable sheet comprised of hydrolyzed fish peptides infused with cod liver oil which acts as an anhydrous skin protectant. Per the applicant, OCMTM is indicated for the management of wounds. The applicant asserted that, when applied to a clean wound surface, OCMTM is naturally incorporated into the wound over time. Per the applicant, OCMTM's cold water fish peptides provide building blocks for tissue regeneration and cell signaling molecules stimulate tissue growth. Additionally, OCMTM's matrix-like device also contains active pharmaceutical ingredient(s) (API) and nutrients that continuously reduce biofilm impact, reduce inflammation, increase tissue proliferation, and support remodeling of tissue. Please refer to the online application posting for the OCMTM, available at https://mearis.cms.gov/public/publications/device-ptp/DEP2403016HWP6, for additional detail describing the device and the disease treated by the device. Comment: Several commenters with experience treating patients with OCMTM stated their belief that it meets all the criteria outlined in the rule and should be granted pass-through status so that patients with stalled or non-healing wounds can be treated before the wound increases in size or becomes infected. Response: 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 1, 2021, the applicant received 510(k) clearance from FDA for OCMTM as a device to be used for the management of wounds including: (1) partial and full-thickness wounds, (2) pressure ulcers, (3) venous ulcers, (4) diabetic ulcers, (5) chronic vascular ulcers, (6) tunneled/undermined wounds, (7) surgical wounds (donor sites/grafts, post-Moh's surgery, post-laser surgery, podiatric, wound dehiscence), (8) trauma wounds (abrasions, lacerations, superficial partial thickness burns, skin tears), and (9) draining wounds. We received the application for a new device category for transitional pass-through payment status for OCMTM on March 1, 2024, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether OCMTM meets the newness criterion at Sec. 419.66(b)(1). Comment: The applicant thanked CMS for agreeing that OCMTM meets the newness criteria. Response: We appreciate the applicant's comment. We received the application for a new device category for transitional pass-through payment status for OCMTM on March 1, 2024, which is within 3 years of September 1, 2021, the date of FDA 510(k) clearance. Based on our review of the application, we have determined that OCMTM meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether OCMTM is integral to the service furnished. In the CY 2014 final rule with comment period (78 FR 75005), we stated that we have interpreted the term ``integral'' to mean that the device is necessary to furnish or deliver the primary procedure with which it is used. For example, a pacemaker is integral to the procedure of implantation of a pacemaker. We noted that OCMTM does not appear to be necessary to furnish or deliver the primary procedure with which it is used, specifically debridement. Rather, we noted the use of OCMTM following the debridement procedure, including the duration of treatment and the reapplication frequency, seems to be based entirely on provider discretion. As such, we stated that we do not believe that OCMTM is integral to the service furnished as required by Sec. 419.66(b)(3). The applicant stated that OCMTM is classified for one-time use and is designed for intimate contact with both regular and irregular wound beds, and as such, it is applied in or on a wound. We invited public comment on whether OCMTM meets the eligibility criterion at Sec. 419.66(b)(3). Comment: In response to our concern that OCMTM may not meet the eligibility criteria under Sec. 419.66(b)(3), the applicant asserted that OCMTM is integral to services furnished in the outpatient setting for non-healing wounds. Specifically, the applicant stated that OCMTM is integral to both the active wound care management furnished for HCPCS codes 97597, 97598, 97602, and 97605- 97608, and surgical debridement services furnished under HCPCS codes 11000-11012 and 11042-11047. The applicant added that for hard-to-heal, non-healing wounds that fail to respond to four weeks of standard wound care (including debridement), adjunctive application of advanced wound therapies, like OCMTM, is the next recommended wound management step. The applicant stated that OCMTM is indicated for application following initial standard of care failure and may replace the need for negative-pressure wound therapy, placental membranes, bioengineered skin substitutes, several acellular matrices, autologous fibrin, and leukocyte platelet patches, which are all typically used in the hospital outpatient setting. The applicant further explained that OCMTM is not a skin protectant, but instead, a bioactive matrix that conforms to the wounds allowing for more complete coverage of the wound in a safe and effective manner; thus, it supplements the missing necessary components for the natural healing to occur. The applicant asserted that OCMTM performs a similar function to certain collagen-based implantable devices used in internal surgeries to promote healing by improving the structural integrity of joints, soft tissues, and nerves. Per the applicant, debridement alone is insufficient for managing refractory wounds, necessitating adjunctive advanced wound therapies, such as OCMTM. The applicant, therefore, stated that classification of OCMTM as specifically an incident to supply is inconsistent with its necessitated clinical use. Several non-applicant commenters agreed with the applicant that OCMTM does not always require debridement, and therefore, the device is integral to the service performed. As support for the integral function of OCMTM, the applicant quoted the CY 2014 OPPS/ASC final rule \109\ (78 FR [[Page 94187]] 75005) statement that skin substitutes are integral to, dependent on, and supportive to the surgical procedures in which they are used. Specifically, the applicant asserted that while OCMTM is not a skin substitute, it has a distinct composition and mechanism, as well as a higher degree of regulatory oversight, exemplified by its FDA 510(k) clearance for wound management. The applicant stated that, like skin substitutes, OCMTM meets the integral to service criterion for wound management, as outlined in the CY 2014 OPPS final rule, given that OCMTM not only matches but also exceeds the clinical utility of skin substitutes as an advanced wound therapy. The applicant concluded by asserting that OCMTM's indicated use, per its FDA 510(k) clearance, supports the device's classification as integral to the services furnished. --------------------------------------------------------------------------- \109\ Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Hospital Value-Based Purchasing Program; Organ Procurement Organizations; Quality Improvement Organizations; Electronic Health Records (EHR) Incentive Program; Provider Reimbursement Determinations and Appeals (CMS-1601-FC), 78 FR 74826 (Dec. 10, 2013) (amending 42 CFR parts 405, 410, 412, 419, 475, 476, 486, and 495). --------------------------------------------------------------------------- Response: We appreciate the applicant's input. Based on the additional information provided in the comments, we agree that OCMTM is integral to advanced wound therapy because it is used for active wound care management after the patient has received standard of care services with or without debridement including in the management of refractory wounds. Specifically, we agree that OCMTM is integral to active wound care management furnished for HCPCS codes 97597, 97598, 97602, and 97605-97608 and surgical debridement services furnished under HCPCS codes 11000-11012 and 11042- 11047. Additionally, we agree with the applicant that OCMTM is used for one patient only, comes in contact with human tissue, and is applied in or on a wound. After consideration of the public comments received and our review of the application, we have determined that OCMTM meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criteria at 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). The applicant did not indicate whether OCMTM is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OCMTM is a supply or material furnished incident to a service. However, in the CY 2014 final rule, we described skin substitutes as a type of supply used in a surgical procedure (78 FR 74929 through 74930). As explained in the CY 2014 final rule, supplies are a large category of items that typically are either for single- patient use or have a shorter life span in use than equipment. Supplies can be anything that is not equipment and include not only minor, inexpensive, or commodity-type items but also include a wide range of products used in the hospital outpatient setting, including certain implantable medical devices, which we have considered supplies since the inception of the OPPS (78 FR 74929 through 74930). We clarified that we believe skin substitutes are supplies used in a surgical procedure because, as a part of a surgical repair procedure, they reinforce and aid the healing of tissue like implantable biologicals, but with skin substitutes, the tissue is skin instead of internal connective tissues (78 FR 74931). As such, we questioned whether OCMTM would be considered a supply, and as such it would be excluded from device pass-through payments under Sec. 419.66(b)(4). We invited public comment on whether OCMTM meets the exclusion criterion at Sec. 419.66(b)(4). Comment: In response to our concern that OCMTM would be excluded under Sec. 419.66(b)(4), the applicant asserted that OCMTM is not an item for which depreciation and financing expenses are recovered and that, like an implantable biologic or medical device, is used as an integral and necessary supply in a surgical procedure. The applicant stated that OCMTM does not fit the classification of an incident to supply, defined as a material or supply furnished incident to a service because it aids in the management of wounds by supplementing the missing necessary components for the natural function of healing to occur; and is necessary to the wound care procedure itself when debridement alone is insufficient. The applicant asserted that classification of OCMTM as an incident to supply is not consistent with its necessitated clinical use. The applicant asserted that given that OCMTM exceeds the clinical utility of skin substitutes as an advanced wound therapy and that skin substitutes as outlined in the CY 2014 OPPS final rule meet the integral to service criteria for wound management, the applicant believes that OCMTM does not meet the disqualifying criteria of being an incidental supply under Sec. 419.66(b)(4). Response: We appreciate the clarification from the applicant. Based on the additional information provided in the comments, we agree with the applicant that OCMTM is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or are a material or supply furnished incident to a service. Specifically, we believe that OCMTM is necessary to the wound care procedure itself when debridement alone is insufficient and is, therefore, not a material or supply furnished incident to a service. We note that while the applicant did not furnish further detail to explain why OCMTM is not a depreciable asset, we believe that the applicant provided enough additional information about OCMTM to conclude that it is like other cellular and tissue-based products for wound management, and therefore, OCMTM is not an asset subject to depreciation or used in a normal or standby capacity by the provider per the Medicare Reimbursement Manual (CMS Pub. 15-1). After consideration of the public comment received and our review of the application, we have determined that OCMTM 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 asserted that OCMTM is indicated for the comprehensive treatment of advanced wounds and provides continuous delivery of pharmaceutical grade products through an amorphous, anhydrous solid, which reduces biofilm while simultaneously promoting tissue proliferation and remodeling. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe OCMTM. We did not identify an existing pass-through payment category that describes OCMTM. We invited public comment on whether OCMTM meets the device category criterion at Sec. 419.66(c)(1). We did not receive any comments regarding whether OCMTM meets the eligibility requirements at Sec. 419.66(c)(1). Based on our review of the application, we continue to believe there is no [[Page 94188]] existing category or category previously in effect that appropriately describes OCMTM. Therefore, we have determined that OCMTM 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 OCMTM represents a substantial clinical improvement over existing technologies in the treatment of hard to heal or chronic wounds which require advanced wound care procedures such as venous leg ulcers, diabetic foot ulcers, pressure ulcers, and wound dehiscence where proper wound preparation, product application, and proper secondary dressings are a requirement. Specifically, the applicant claimed that OCMTM demonstrates: (1) superior clinical outcomes and healing for Diabetic Foot Ulcers (DFU) compared to standard of care; (2) faster healing rates than standard of care for Venous Leg Ulcers (VLUs); (3) superior clinical outcomes for patients who could not qualify for clinical trials due to comorbidities; (4) improved results when compared to results with standard of care for patients who failed prior treatment; (5) in vitro/in vivo antimicrobial properties and patient safety; and (6) improved patient safety. The applicant provided the following clinical trial data and case studies to support these claims: (1) two randomized controlled trials (a single-site trial of patients with DFUs to evaluate percent area reduction, and a randomized, multicenter, open label study for a patient group with VLUs); (2) two real-world trials comprised of two separate case studies of patients receiving follow-up care at two different wound treatment centers; (3) one in vitro study; (4) one in vivo porcine study; and (5) one consumer research study assessing the safety of OCMTM using the skin prick method. Table 124 summarizes the applicant's assertions regarding the substantial clinical improvement criterion. We noted that there are multiple variations in poster presentations for the same study; these posters are identified by study number and presentation number in parentheses. Please see the online posting for OCMTM for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. BILLING CODE 4120-01-P [[Page 94189]] [GRAPHIC] [TIFF OMITTED] TR27NO24.153 [[Page 94190]] [GRAPHIC] [TIFF OMITTED] TR27NO24.154 [[Page 94191]] [GRAPHIC] [TIFF OMITTED] TR27NO24.155 BILLING CODE 4120-01-C After review of the information provided by the applicant, we stated we had the following concerns regarding whether the applicant presents clinical data to suggest that OCMTM provides a substantial clinical improvement over other similar skin protectant and wound healing products to meet the criterion at Sec. 419.66(c)(2)(i). Based on the evidence submitted in the application, we noted the following concerns: (1) lack of direct comparison between the nominated device and the predicate or reference devices for skin substitutes, particularly with respect to treatment of deep or persistent chronic wounds in people with DFU and VLU; (2) reliance on non-peer-reviewed studies, such as unpublished abstracts or conference posters, the results of which are only presented in a final data table; and (3) reliance on studies which were sponsored by the device manufacturer rather than independent research. We noted that the unpublished abstract for OCMTM lacked a detailed discussion of study limitations, patient population, and assurances that studies have been thoroughly peer-reviewed and free from implicit bias. Furthermore, the abstract does not state if or how standard of care treatment was administered within the same time period to control groups, and therefore, we stated we were unsure if there was a direct comparison between OCMTM and its predicate or reference [[Page 94192]] devices. Furthermore, we noted that the two randomized controlled trials 110 111 and two real world studies 112 113 submitted by the applicant to support its claims had relatively small sample sizes, some investigating only two patients total, which potentially limits the statistical significance of the results. --------------------------------------------------------------------------- \110\ Bell, D.P., et al. (2023). A Clinical Study Using Combination Therapy with Standard of Care for the Treatment of Diabetic Foot Ulcers: Interim Analysis. (poster presented at the 20th Annual Desert Foot Conference, December 6-9, 2023, Phoenix, AZ, USA). \111\ Randomized Controlled Trial in Venous Leg Ulcers (NCT05291169) (no author or publication date given). \112\ Black, G., Bakewell, S., & Bell, D. (2023). A Novel Combination Therapy Technology: Case Studies of Complete Closure of a Diabetic Foot Ulcer and a Charcot Foot Ulcer. (poster presented at the 2023 Diabetic Foot Conference, September 28-30, 2023, Anaheim, CA). \113\ Barrett, C.L., Bakewell, S.J., & Bell, D. (2023). A Novel Combination Therapy Technology: Case Studies of Complete Closure of Diabetic Foot Ulcers. Presented at the 2023 Diabetic Foot Conference, September 28-30, 2023, Anaheim, CA. --------------------------------------------------------------------------- We noted that the applicant did not provide a comparison of OCMTM to other devices it identified are closely related or similar to OCMTM. Specifically, in the FDA authorization letter dated September 1, 2021, FDA identified one predicate device, SweetBio Apis (K182725), and three reference devices, INTEGRATM Flowable Wound Matrix (K072113), Kerecis MariGen Wound Dressing (K132343), and Southwest Technologies Stimulen Collagen (K030774) to which OCMTM may be compared. We noted that we did not approve transitional device pass-through payment for Kerecis MariGen Wound Dressing (K132343) for CY 2018 after determining that the clinical data provided by the applicant did not support the claim that Kerecis Omega3 Wound Dressing provides a substantial clinical improvement over other similar skin substitute products (82 FR 59330 through 59332). The FDA authorization letter noted that OCMTM and the predicate device SweetBio Apis have similar indications and the same intended use, namely, to manage wounds by providing an animal-derived collagen product that is biodegradable and incorporates into the surrounding tissue during the body's natural wound healing processes. Both products supplement the collagen constituent with additional biocompatible materials to achieve a final product that covers and protects the wound, assists in managing wound exudate, and maintains a moist wound environment. Further, the substantial equivalence table included in the FDA authorization letter indicated that OCMTM raised no new questions of safety or effectiveness when compared to the predicate and reference devices. In the first claim, the applicant asserted OCMTM has superior clinical outcomes and healing for DFU compared to the standard of care. Based on the evidence submitted by the applicant, we noted the following concerns: (1) lack of a direct comparison to the predicate or reference devices in the two randomized controlled trials and the two real world clinical studies; (2) reliance on unpublished studies; (3) reliance on manufacturer sponsored studies; and (4) small sample sizes. First, Simman, et al. (2023) describes the results of a single-site trial in patients with DFUs to evaluate percent area reduction in wound healing. The stated goal of this study was to demonstrate that a combination therapy, using OCMTM plus standard of care treatment, moves chronic DFUs from a stalled state to a healing state in a 4-week period. The study enrolled 25 patients, five of whom did not complete the study, and one of whom died during the study from comorbidities related to their underlying condition. Study group DFUs were managed with combination therapy from 4-12 weeks, and control group DFUs (comprised of six total study participants) were managed with standard of care treatment involving cleaning and debridement only. Interim analyses presented as a poster (Bell, et al., 2023) as evidence to support the first claim was limited to 12 total study participants. The interim analysis concluded that healing rates showed an average of 63 percent area reduction for the remaining participants at 4 weeks following standard of care treatment, and an average of 91 percent area reduction at 12 weeks following the treatment in patients with DFUs managed with the combination therapy. The interim analysis study further showed that one patient with a 12-week percent area reduction of 73 percent continued to improve through week 14 while three patients' wounds had not healed at the time of analysis for those receiving combination therapy. In the final results presented in Simman, et al. (2023), the average 4-week percent area reduction was 60 percent, with three patients experiencing 100 percent closure with combination therapy. At 12 weeks, the median wound size was 0.0 cm\2\ (range, 0-2.59), and the average percent area reduction was 93 percent, with five additional patients experiencing 100 percent closure with combination therapy. The average 4- and 12-week percent area reductions with standard of care alone were 42 percent and 45 percent, respectively. According to the final analysis study abstract, every wound treated with OCMTM combination therapy was reduced by more than 70 percent in 12 weeks; and all wounds previously failed treatments. We noted that the Simman, et al. (2023) study abstract and the interim analysis do not provide any direct comparison to standard of care treatment with another collagen-based wound matrix or device that is otherwise similar to the indications for use of OCMTM in nonhealing wounds. In addition, we noted that it is unclear if any of the control group patients received collagen-based treatments including the predicate or reference devices to draw comparisons to collagen- based skin products that perform similarly to OCMTM. While we recognized, given the number of skin substitute products on the U.S. market, it is not possible to compare OCMTM to each product, we stated that we believe studies comparing the product against other powder, liquid, or gel skin substitute products could provide more evidence demonstrating the clinical superiority of OCMTM. In addition to the lack of comparison to other collagen-based wound matrix devices, we noted that the standard of care treatment in this study was limited to cleaning and debridement, which, based on the applicant's description for methods for administering OCMTM, is a step prior to administering OCMTM. In reference to the applicant's statements that debridement combined with application of OCMTM is more effective in the removal of biofilm compared to the standard of care of debridement alone, we noted that neither the abstract nor the interim analysis for this study analyzed results on removal or prevention of biofilm in isolation from the overall metric on wound percent area reduction. We noted that FDA recommends sharp debridement alone as an effective method to remove the biofilm and necrotic tissue in a chronic wound (Bettle, et al., 2023). We questioned whether the results describing the average percent area reduction in wounds transitioning from a nonhealing state to a healing state are sufficient to show substantial clinical improvement in removal or prevention of biofilm. We further questioned whether the results in percent area reduction can be attributed to debridement combined with application of OCMTM as opposed to debridement alone because it is unclear if debridement was performed on all participants in the retrospective control group. [[Page 94193]] Furthermore, we noted that only the effects of historic standard of care treatments administered prior to the start of the study to patients in the control group were included for analysis. While one of the selection criteria for study participants was having failed prior treatment, neither the abstract nor interim analysis discussed how other variables, such as age and comorbidities, may have contributed to treatment failure, or which specific treatments failed in each of the six control group participants. We noted that not all patients in the control group received, or were eligible to receive, the same standard of care treatments prior to the study and did not receive any skin substitute or wound dressing treatments during the study as a comparison to the test group patients that were treated with OCMTM. Due to the stated limitations in the study as previously described, we stated that we do not believe that the applicant has demonstrated that OCMTM offers a substantial clinical improvement over existing treatments. Finally, we noted that the sample size of 19 individuals (six of whom were assigned to the control group) in the Simman, et al. (2023) study limits the generalizability of the findings. Therefore, we questioned whether OCMTM has superior clinical outcomes and healing for DFUs compared to the standard of care or the predicate or reference devices. Additionally, we noted that the Simman, et al. (2023) study abstract and interim analysis were sponsored by the manufacturer and have not been published, and therefore are not based on independent and peer-reviewed findings. In addition to the Simman, et al. (2023) study (including the abstract and interim results), in support of its first claim, the applicant submitted two posters presenting results from limited case studies investigating two patients who received treatment using OCMTM combination therapy at the point of care. The first poster (Black, et al., 2023) discussed the treatment of two patients seeking treatment for DFUs at a wound care clinic: (1) a 75-year-old female patient who developed a DFU on her right third toe whose DFU wound progressed from nonhealing to healing after one application of the combination OCMTM therapy; and (2) a 65-year-old female patient with a history of diabetes and a blister of 3-month duration that progressed from nonhealing (after treatment with collagen powder, a gauze covering, an absorbent dressing, and a protective bandage) to completely closed after nine applications of the combination OCMTM therapy over 63 days. The study authors concluded that these case studies demonstrated: (1) rapid and durable healing of chronic/nonhealing wounds in two patients with diabetes who received the combination therapy for their chronic wounds; (2) significantly faster closure of a DFU within 1 week using OCMTM combination therapy than the average healing rate of 84 days for a 1-3 cm\2\ plantar ulcer managed using standard care practices; and (3) that early treatment of chronic/nonhealing wounds with OCMTM combination therapy improves outcomes and can lead to complete closure. Similarly, the second poster (Barrett, et al., 2023) presented results from a case study of two patients who received follow-up care at an outpatient wound center: (1) a 58-year-old male patient with a distal plantar lateral ulceration with infection, which required hospitalization; and (2) a 56-year-old male patient with leg trauma that had obliterated the patient's anterior tibial and peroneal arteries, leaving him with single vessel runoff to the left foot via the posterior tibial artery. In the first patient, after 5 weeks of initial negative pressure wound therapy following surgery, the percentage area reduction of the wound was 19 percent. In comparison, after three weekly follow-up applications of OCMTM combination therapy, the patient's percentage area reduction was 95 percent. In the second patient, the amputation site was noted as completely necrotic, and therefore not a candidate for standard of care negative pressure wound therapy due to poor skin condition, ischemia, and hyperalgesia. It was noted that after three applications of OCMTM combination therapy, there was a significant improvement in the wound depth and tissue color, with visible epithelialization at the wound edges despite the patient's obvious ischemia. It was noted that the wound size improved and completely healed between the fourth and fifth application of OCMTM combination therapy and after the seventh application of OCMTM combination therapy. The researchers concluded that the case studies demonstrate complete and rapid healing of refractory DFUs in two patients with diabetes who had previously undergone lower extremity amputations and that early use of OCMTM combination therapy has the potential to reduce the rate of amputations and improve patients' quality of life. We noted that both case studies (Barrett, et al., 2023, and Black, et al., 2023) were sponsored by the manufacturer and only had two study participants treated with OCMTM combination therapy, which limits the generalizability of the findings. Although the studies suggest that the two participants treated with OCMTM combination therapy showed transition to a healing state subsequent to the application of OCMTM, the results varied widely in terms of number of applications needed to achieve positive results and treatment duration. Further, we noted that these case studies provide no direct comparison to the standard of care treatment or the predicate or reference devices. We noted that eligibility for standard of care treatments also varied across patients and resulted in varying degrees of percent area reduction or wound closure from prior treatments before application of OCMTM combination therapy. While in one patient, the study showed an improved clinical outcome in percentage area reduction (19 percent to 95 percent) with treatment utilizing OCMTM combination therapy, we noted that the treatment including OCMTM was not only completed subsequent to standard of care treatment with a collagen wound protectant, but also delivered to the same individual rather than as a comparison to standard of care treatments in a control group. We questioned whether the submitted evidence adequately supports the claim that OCMTM has superior clinical outcomes and healing for DFU compared to the standard of care. We stated our interest in additional information to demonstrate whether the nominated device demonstrates a substantial clinical improvement in comparison to similar collagen-based matrix devices. In the second claim, the applicant asserted that OCMTM provides faster healing rates than standard of care for VLUs. However, based on the evidence submitted, we noted the following concerns: (1) reliance on unpublished studies; and (2) a lack of any documentation indicating the study authors, study description, methods, limitations, information on standard of care treatment for the comparison of control groups, analysis, or discussion. The only data provided were in the form of two tables. One table \114\ provided demographic information for the study participants, such as race, age, gender, presence of VLUs, comorbidities, wound area, and wound age; however, there is no indication of how many initial study participants were included in the final results or how many were assigned to either the treatment or control group receiving the standard of [[Page 94194]] care. The other table \115\ presented one row of data from the final results of a randomized controlled trial on VLUs showing an average percent area reduction of 66 percent at 12 weeks in OCMTM treatment group (there was no comparison to the standard of care treatment group) and an average percent area reduction of 34 percent at four weeks in the OCMTM treatment group compared to an average percent area reduction of 31 percent at four weeks in the standard of care group. Due to the lack of a study report, we stated that we have insufficient information to adequately assess this study or make a determination as to whether the study supports the claim that OCMTM provides faster healing rates than standard of care for VLU. --------------------------------------------------------------------------- \114\ Demographics for RCT in VLU (no author or publication date given). \115\ Randomized Controlled Trial in Venous Leg Ulcers (NCT05291169) (no author or publication date given). --------------------------------------------------------------------------- In order to demonstrate substantial clinical improvement over currently available treatments, we noted that 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 noted that additional supporting evidence, preferably published peer-reviewed clinical trials, that shows these improved clinical outcomes would help inform our assessment of whether OCMTM demonstrates substantial clinical improvement over existing technologies. In the third claim, the applicant asserted that OCMTM provides superior clinical outcomes for patients who could not qualify for clinical trials due to comorbidities, and in the fourth claim, the applicant stated that OCMTM improved results when compared to results with standard of care for patients who failed prior treatment. The applicant used the same pair of documents as supporting evidence for both the third and fourth claims: (1) a case study by 16 independent investigators (Bettle, et al., 2023), and (2) a final summary table \116\ of the results of that case study. In the case study by the 16 independent investigators, OCMTM combination therapy was administered to 65 patients with wound ages ranging from 12 weeks to 15 years who failed prior treatment, including six patients with prior failed cellular tissue product therapies. Patients were not otherwise subjected to inclusion or exclusion criteria. According to the applicant, the findings by the 16 independent investigators showed 77 percent of wounds were closed by 12 weeks and the average area reduction was 90 percent. Wounds treated included DFUs, VLUs, pressure injuries, arterial, pyoderma, hematomas, surgical, and trauma. We noted that the study lacked direct comparison to a standard of care treatment. Rather, the study compared patient data to standardized data on wound closure and mean time to total wound closure by wound type based on standardized data from the U.S. Wound Registry. --------------------------------------------------------------------------- \116\ OCM treating Multiple Etiologies Final Trial Data (no author or publication date given). --------------------------------------------------------------------------- We questioned whether the submitted evidence adequately supports the claims that OCMTM provides superior clinical outcomes for patients who could not qualify for clinical trials, due to comorbidities, or that OCMTM improved results when compared to results with standard of care for patients who failed prior treatment. We welcomed further investigation with comparators to help determine whether the device demonstrates substantial clinical improvement over currently available treatments in the clinical setting where it is most likely to be used. In its fifth claim, the applicant asserted that in vitro (Davis, et al., 2023) and in vivo (Davis, Jozic, et al., 2023) study results demonstrate antimicrobial properties and patient safety. The applicant further asserted that OCMTM addresses an unmet medical need, stating that no other product demonstrates antimicrobial properties and leads to complete wound healing. In the in vivo study (Davis, Jozic, et al., 2023), researchers made 31 deep reticular wounds across the paravertebral and thoracic areas on each of specific pathogen-free pigs. Pathogenic strains of Methicillin-Resistant Staphylococcus Aureus (USA300) or Pseudomonas Aeruginosa (ATCC 27312), prepared as 106 CFU/ml inoculum suspensions, were used to inoculate all wounds within 20 minutes after wounding followed by application of polyurethane dressings (Tegaderm, 3M, USA) for 72 hours before being treated. Subsequent treatment consisted of OCMTM alone in one test group, OCMTM plus a skin protectant in another test group, Aquacel Ag Advantage in the positive control group, or the wounds were left untreated in the negative control group. We noted that the only in vivo study (Davis, Jozic, et al., 2023) with direct comparison to a skin protectant was conducted on non-human subjects (pigs). We questioned whether these data can be extrapolated to demonstrate significant clinical improvement in humans. In addition, according to the applicant, the in vitro study (Davis, et al., 2023) showed OCMTM significantly inhibiting Methicillin-resistant Staphylococcus aureus and Pseudomonas aeruginosa compared to negative controls. We noted that the in vitro study (Davis, Jozic, et al., 2023) lacked a direct comparison to performance of other similar skin protectant products or wound therapies besides infection control methods such as silver sulfadiazine or Mupirocin antibiotic. We further noted that both the in vitro and in vivo studies were submitted as poster presentations and that the studies had not been published and peer-reviewed in full. We questioned whether the submitted evidence adequately supports the claims that OCMTM demonstrates antimicrobial properties and patient safety. We noted that additional supporting evidence, preferably published peer-reviewed clinical trials, that demonstrates 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, would help inform our assessment of whether OCMTM demonstrates substantial clinical improvement over the standard of care and existing technologies. For its sixth claim, the applicant asserted that study results demonstrated patient safety of OCMTM. In support of this claim, the applicant provided one consumer research study (Princeton Consumer Research Corp., 2019) \117\ of 25 subjects showing no immediate allergic reaction to OCMTM. We noted that, similar to our previously stated concerns, the study did not include a direct comparison to predicate or reference devices despite claiming an improvement over standard of care treatment. We noted that the submitted evidence does not adequately support the claims that OCMTM demonstrates substantial clinical improvement in product safety in comparison to similar products. --------------------------------------------------------------------------- \117\ Princeton Consumer Research Corp. (2019). Final Report. A safety study to assess the allergy potential of OMEZA collagen matrix in human subjects using the skin prick method. --------------------------------------------------------------------------- Finally, we noted that OCMTM may not demonstrate that it substantially improves the diagnosis or treatment of an illness when compared to the benefits of other available treatments. OCMTM was determined to be substantially equivalent to a legally marketed device, the SweetBio Apis, which received 510(k) clearance on [[Page 94195]] April 29, 2019. The FDA 510(k) summary for OCMTM indicated that both devices share similar technological characteristics. Per FDA, the main differences between OCMTM and the predicate are the specific collagen source (OCMTM uses whitefish skin-derived collagen, while the SweetBio Apis uses porcine skin-derived collagen) and the specific identity of the supplemental components, which serve the same fundamental purpose in enabling each wound dressing to achieve the shared intended use.\118\ --------------------------------------------------------------------------- \118\ The SweetBio Apis is FDA cleared and marketed under 510(k) since 2019 (FDA 510(k)) letter: https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211972.pdf. --------------------------------------------------------------------------- We invited public comment on whether OCMTM meets the substantial clinical improvement criterion at Sec. 419.66(c)(2)(i). Comment: With respect to our concern about the lack of independent peer-reviewed or published clinical evidence, the applicant commented that they recognize the importance of peer-reviewed research. Further, the applicant noted that while at the time of the initial application, none of the studies had been submitted for peer-review or published in indexed journals, the clinical evidence previously referenced has now been published, is in press for an indexed journal, or has been submitted for review at an indexed journal and is publicly available on a preprint server. The applicant submitted these as part of its comment.119 120 121 The applicant also acknowledged that it sponsored the provided studies but asserted that, due to the newness of the product, cost, and unclear coverage status, the lack of investigator-sponsored trials is not unexpected. --------------------------------------------------------------------------- \119\ Bettle III, G., Bell, D.P., & Bakewell, S.J. (2024). A Novel Comprehensive Therapeutic Approach to the Challenges of Chronic Wounds: A Brief Review and Clinical Experience Report. Advances in Therapy, 41: 492-508. https://doi.org/10.1007/s12325-023-02742-4. \120\ Simman, R., Bakewell, S.J., Bell, D., Shuman, S., & Cheney, M. (2024). A novel approach for the treatment of diabetic foot ulcers using a multimodal wound matrix: a clinical study. Journal of Wound Care. https://doi.org/10.12968/jowc.2024.0085. \121\ Cole, W. (2024). Treatment of bacterially contaminated lower extremity ulcers with a fatty acid-containing wound matrix: a case series. Journal of Wound Care, 33(8):554-559. https://doi.org/10.12968/jowc.2024.0101. --------------------------------------------------------------------------- Response: We thank the applicant for their response to our concerns regarding the lack of independent and peer-reviewed studies. After consideration of the applicant's comments, we believe the applicant has addressed our concern about the lack of peer-reviewed and published studies by submitting two studies (Bettle III, et al., 2024, and Simman, et al., 2024) that appear to support the applicant's claims of substantial clinical improvement that have been accepted for publication in peer-reviewed medical journals. Comment: In response to our concerns that the applicant did not provide a comparison of OCMTM to similar wound closure products, the applicant reiterated that OCMTM catalyzes wound closure in patients with nonhealing wounds treated with other advanced wound therapies. The applicant also asserted that OCMTM offers a more rapid beneficial resolution over the best available therapies, including the predicate and reference devices. Specifically, the applicant asserted that in comparison to the protective dressing application, OCMTM application in conjunction with debridement qualifies as an active wound procedure within the scope of active wound care management services. The applicant also noted that OCMTM application following initial standard of care failure may replace the need for negative- pressure wound therapy, placental membranes, bioengineered skin substitutes, several acellular matrices, autologous fibrin, and leukocyte platelet patches, all of which are currently used in the hospital outpatient setting. The applicant clarified that it has not advocated for OCMTM to be used in routine management of wounds as it believes the current standard of care, which includes four weeks of routine therapy, should be utilized prior to the application of OCMTM. Specifically, the applicant asserted that once wounds become refractory, then OCMTM can be applied to re-initiate the healing process, as demonstrated in the submitted studies. The applicant further stated that FDA has specifically acknowledged the lack of innovative products aimed at the treatment of non-healing chronic wounds. The applicant noted that patients with significant medical comorbidities presenting with non-healing wounds of any size have not been enrolled in advanced wound therapy randomized controlled trials, even though these patients represent a high-risk group that most clinicians believe need active treatment beyond the routine standard of care to prevent infection, amputation, and even death. The applicant asserted that OCMTM addresses an unmet need for patients with multiple comorbidities who have refractory wounds of at least four weeks duration, including at least two weeks of care by a wound specialist, who would have likely been excluded from the few randomized control trials in this field. Response: We thank the applicant for its input and clarification. While we appreciate that FDA has specifically acknowledged the lack of innovative products aimed at the treatment of non-healing chronic wounds, we remain concerned with the lack of clinical studies and comparative studies demonstrating whether the use of OCMTM, when applied following initial standard of care failure as an active wound procedure, results in substantial clinical improvement over other available active wound care management services. With respect to replacing the need for negative pressure wound therapy, placental membranes, bioengineered skin substitutes, several acellular matrices, autologous fibrin and leukocyte platelet patches, we address specific substantial clinical improvement claims and responses to our concerns below. Comment: Several commenters stated that they believed for wound infections that could progress to sepsis or necessitate an amputation, OCMTM could prevent patient complications, including disability secondary to the complications of a non-healing wound, or death. The commenters stated that for chronic non-healing and hard-to- heal wounds OCMTM offers several advantages including that its effects can be seen quickly, even though other products used prior to OCMTM failed, and its amorphous property enables optimal use of the product, even in wounds with non-perfect, irregular wound beds. The commenters stated that this amorphous structure allows the product to fill unique areas within wounds, such as tunneling and undermining, that would otherwise be unmanageable using a standard advanced wound graft product. Response: We thank the commenters for their input. We maintain our concerns that the submitted evidence does not adequately support the applicant's claims that OCMTM demonstrates substantial clinical improvement compared to other available treatments. We appreciate that commenters provided information about the unique uses for OCMTM's amorphous structure; however, we note that the commenters did not supply additional data in support of these claims. Furthermore, we note that the applicant did not make any specific claims about the consequential benefits directly attributable to any specific or isolated mechanism of OCMTM. Comment: With respect to our concerns about the lack of direct comparison to the predicate or reference devices in the studies used to support its first three claims, the applicant noted [[Page 94196]] that while OCMTM and the predicate device SweetBio Apis have similar indications and the same intended use, they differ in the chemical and physical properties of the derived collagen product as well as the additional biocompatible materials that supplement the product. The applicant also asserted that SweetBio Apis does not have any published data on its effectiveness in healing wounds in a similar population, as in OCMTM's most recently completed study. The applicant stated that SweetBio Apis's study of real-world evidence featured a small sample size (n = 12) with likely singular etiology (implied to be DFU given diabetic population) and limited transparency into the selection of study participants. The applicant asserted that, in comparison, OCMTM has been investigated in a patient group that is significantly larger, has more variability in ulcer etiology, and has more comorbidities, which is representative of the overall patient population for whom OCMTM is indicated. Additionally, the applicant highlighted that SweetBio Apis has published only one randomized controlled trial involving participants with Mohs Surgical Defects, which demonstrated no significant difference in re-epithelization. The applicant asserted that, as such, a direct comparison of OCMTM's and SweetBio Apis's published evidence indicates that OCMTM has more substantially proven capability to deliver clinical improvement for these hard-to-treat wounds. In addition, the applicant stated that while OCMTM and SweetBio Apis have similar indications and the same intended use, their derived collagen products differ in the chemical and physical properties. The applicant further stated that OCMTM differs from SweetBio Apis in terms of additional biocompatible materials that supplement the product. The applicant asserted that this supplement material (i.e., the additional biocompatible materials) raises no new questions of safety or effectiveness when OCMTM is compared to the predicate and reference devices but does confer additional benefits to OCMTM. The applicant asserted that OCMTM's additional benefits warrant the product's consideration for transitional device pass-through payment. The applicant stated they are planning to work with the HCPCS workgroup to define a more accurate description of OCMTM since it is unlike other collagen products on the market. The applicant also clarified that their most recent clinical studies demonstrate the multi-faceted impact of OCMTM's multiple components on wound healing. Specifically, the applicant asserted that other collagen wound matrix devices' similar compositions confer some, but not all, of the wound healing properties characteristic of OCMTM. The applicant further asserted that a head-to-head comparison of OCMTM to any of these other products would only represent the marginal benefits of OCMTM's supplemental biomaterials. In addition, the applicant stated that their clinical study relies on the metric of wound percent area reduction in hard-to-heal wounds in order to demonstrate OCMTM's total clinical benefit, rather than the consequential benefits directly attributable to any specific mechanism in isolation. The applicant asserted it has not made individual claims about OCMTM's clinical superiority over similar wound healing products in regards to any specific mechanisms that contribute to the totality of OCMTM's clinical benefits conferred to patients with hard-to-heal wounds as it has not performed such independent or multi-factorial statistical analyses. Response: We thank the applicant for the additional information. After reviewing the provided information, we note that the applicant's points regarding the differences between OCMTM and SweetBio Apis are comparisons of volume of data, study design, and test results between studies that each evaluate OCMTM and SweetBio Apis separately and without a direct comparison. Therefore, we remain concerned about the lack of direct comparison of OCMTM to other similar devices, particularly those that are animal-derived collagen-based products in test arms or cohorts within the same study. We note that we were not able to verify the applicant's claims that there is more scientific data supporting the clinical effectiveness of OCMTM while there is none supporting the clinical effectiveness of SweetBio Apis, especially since there appears to be a high volume of data showing clinical effectiveness of SweetBio Apis available on the manufacturer's website.\122\ We also note that even if the applicant could demonstrate that there is comparatively more data on effectiveness in wound healing from treatment with OCMTM than for SweetBio Apis, clinical effectiveness is not an equivalent standard to substantial clinical improvement over existing technologies. With respect to the applicant's argument that SweetBio Apis may not be a suitable comparator because OCMTM's derived collagen products differ in chemical and physical properties as well as the additional biocompatible materials that supplement the products, as we noted previously, the FDA made no distinction between porcine or fish-derived collagen in wound dressings,\123\ or the chemical and physical properties of any additives used to anchor this collagen to the wound.\124\ We do not believe that the applicant has demonstrated that the physical and chemical properties result in substantial clinical improvement because of the lack of direct comparison of OCMTM to these similar products. --------------------------------------------------------------------------- \122\ Sweetbio[supreg]. Citations. https://www.sweetbio.com/apis. \123\ Note that while CMS refers to these materials as ``skin substitutes'' in its 2024 guidance Billing and Coding: Skin Substitutes Grafts/Cellular Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers, https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=59625, the FDA collectively refers to this class of products as Dressings, Wound/Dressings, Wound, Collagen. see e.g. FDA (2022). Traditional 510(k), Kerecis, pg. 6. https://www.accessdata.fda.gov/cdrh_docs/pdf21/K213231.pdf. \124\ The SweetBio Apis is FDA cleared and marketed under 510(k) since 2019 (FDA 510(k)) letter: https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211972.pdf. Note that the FDA collectively refers to this class of products as Dressings, Wound or Dressings, Wound, Collagen. See e.g. FDA (2022). Traditional 510(k), Kerecis, pg. 6. https://www.accessdata.fda.gov/cdrh_docs/pdf21/K213231.pdf. --------------------------------------------------------------------------- In response to the applicant's assertion that a head-to-head comparison of OCMTM to any other products would only represent the marginal benefits of OCMTM's supplemental biomaterials, we believe that this suggests that other products would perform similarly to OCMTM in the metric of percent area reduction across different test arms in patients with the same or similar hard-to-heal wounds. While we appreciate the need to study OCMTM's effect on the total clinical benefits in hard-to- heal wounds in isolation, we continue to believe evaluation of the applicant's first three claims of substantial clinical improvement (i.e., OCMTM's superior outcomes and faster healing rates in comparison to the standard of care) requires a direct comparison of OCMTM's clinical outcomes to those similar products. For the reasons discussed, we do not believe that OCMTM represents a substantial clinical improvement relative to similar currently available therapies. Comment: In regard to the applicant's claim that OCMTM provides a treatment option for a patient population unresponsive to, or ineligible for currently available treatments, the applicant submitted additional information to clarify that OCMTM not [[Page 94197]] only matches but exceeds the clinical utility of skin substitutes as advanced wound therapy for patients with hard-to-heal wounds. Specifically, the applicant asserted that OCMTM's superiority over other forms of wound management is evident in its ability to reduce wound size in patients with non-healing wounds that were failed by alternative wound products, such as gentian violet/ methylene blue foam, manuka honey, cellular tissue products (CTPs), Negative Pressure Wound Therapy (NPWT), and dressings consisting of alginate, collagen, or silver. The applicant stated that the study protocol in Dhillon, et al. (2024) \125\ ensured that patients had wounds that had not responded to therapy for at least eight weeks and had undergone high-quality wound care for a minimum of two weeks that included the use of advanced therapies, such as the predicate and reference devices. Furthermore, the applicant asserted that the OCMTM clinical trial design was intentional in evaluating the device's clinical utility in a patient population that was not served by other alternative wound products. --------------------------------------------------------------------------- \125\ Dhillon, Y., Mulder, G., Patel, K., Moya, L., Boghossian, G., Swain, D., McLafferty, R., Perez, K., Nguyen, J., Wilkinson, N., Arragon, J., Contreras, L., Geiger, D., Cummings, R., LaVigne, B., Bell, D., Bakewell, S. (2024). An open-label, interventional, prospective, real-world evidence study to evaluate a multimodal wound matrix in patients with refractory wounds. Advances in Wound Care, Ed (pre-print). --------------------------------------------------------------------------- Response: We appreciate the applicant's clarification. We agree with the applicant that the Dhillon, et al. (2024) study demonstrated OCMTM's effectiveness in treating a group of 53 patients who did not improve after receiving alternative wound products prior to the study. However, we note that, of the 111 patients that entered the study's screening phase, only 53 patients and 54 wounds (which included 18 DFUs, 19 VLUs, two pressure injuries, one surgical, one lower extremity wound, and 12 unclassified etiology) received treatment and were eligible for the data set. We also note that the study's final analysis excluded the 58 patients who responded to the standard of care (i.e., cleaning and debridement) with wound reduction of more than 30 percent. We are concerned that Dhillon, et al. (2024) fails to provide details about the specific previous wound management treatments that the study participants received to demonstrate that it exceeds the clinical utility of skin substitutes as advanced wound therapy for hard-to-heal wounds as the applicant claims above. Absent this data, we are unable to verify that OCMTM treats a patient population unresponsive to currently available multimodal wound management treatments. Comment: In response to our concerns that the studies provided on OCMTM's antimicrobial properties do not demonstrate results in live human subjects, the applicant commented that OCMTM can play a preventative role in wound management through the inherent antimicrobial properties of its anhydrous matrix. The applicant asserted that a small-scale clinical study signaled OCMTM's antimicrobial capacity and that its antimicrobial properties could enable preventative care of hard-to-heal wounds. Specifically, the applicant stated that OCMTM's non-antibiotic composition may reduce the probability of bacterial colonization progressing to wound infection, which could result in antibiotic resistance or even sepsis and limb amputation. In addition, the applicant asserted that OCMTM has clinical utility as a non-antibiotic decolonization agent in clinically uninfected wounds for which antibiotic prophylaxis is deemed inappropriate, per International Working Group on the Diabetic Foot/Infectious Diseases Society of America (IWGDF/IDSA) Guidelines. The applicant also commented that it is committed to working with FDA to evaluate the extent to which the OCMTM's antimicrobial properties confer substantial clinical benefit over the standard of care treatment. Furthermore, the applicant suggested that transitional device pass- through payments would enable it to continue developing evidence that OCMTM's decolonization function provides substantial clinical benefit over the standard of care. The applicant compared OCMTM's decolonization function to topical prophylactic decolonization methods, for which clinical significance has historically been difficult to substantiate. The applicant asserted that this mechanism of infection prevention and control has been widely practiced for decades in accordance with CDC guidance, as exemplified by chlorhexidine bathing and administration of intranasal mupirocin or Iodophor. Similarly, several non-applicant commenters stated that OCMTM has some unique and validated anti-microbial properties that can potentially reduce the risk of infection, as many hard-to-heal wounds are colonized by bacteria but not yet infected. These commenters also asserted that this may lead to a further reduction in antibiotic prescriptions during treatment of hard-to-heal wounds. Response: We thank the applicant and commenters for their input. After consideration of the comments received, we remain concerned that the applicant has not provided sufficient clinical evidence to demonstrate OCMTM's antimicrobial properties in human subjects. The provided case study of OCMTM's decolonization effects includes only three patients with hard-to-heal wound etiologies and compares OCMTM to non-treatment of periwound skin, rather than wound beds of similar etiology treated with the standard of care.\126\ Therefore, we do not believe this demonstrates that OCMTM application to the wound bed results in fewer bacterial infections. --------------------------------------------------------------------------- \126\ Cole, W. (2024). Treatment of bacterially contaminated lower extremity ulcers with a fatty acid-containing wound matrix: a case series. Journal of Wound Care, 33(8):554-559. https://doi.org/10.12968/jowc.2024.0101. --------------------------------------------------------------------------- Concerning the applicant and other commenters' statements about the claim about antimicrobial properties, we note that these claims appear to be conditional. While the applicant compared OCMTM's decolonization function to topical prophylactic decolonization methods, its claims that OCMTM has the potential to reduce the probability of bacterial colonization, play a preventative role in wound management, and reduce the risk of infection are not proven. In addition, we note that the applicant did not provide the referenced joint CDC/FDA workshop materials describing this study's methods, so we are unable to verify whether topical prophylactic decolonization methods are analogous to OCMTM. Therefore, we remain concerned about the lack of evidence demonstrating that OCMTM antimicrobial properties improve outcomes by reducing the risk of infection. In regard to the applicant's plan to pursue further studies to demonstrate substantial clinical improvement in this area, we are unable to consider future evidence for OCMTM's current transitional pass-through payment application. Comment: In response to our concerns that the submitted evidence does not adequately support the applicant's claim that OCMTM demonstrates substantial clinical improvement in product safety in comparison to similar products, the applicant stated that FDA's clearance of OCMTM through the 510(k) application process involves a comprehensive review of the device's safety and performance data. Specifically, the applicant asserted that [[Page 94198]] OCMTM is among the minority of advanced wound therapies that have passed rigorous FDA review of safety and effectiveness. In addition, the applicant stated that Bettle, et. al. (2024) demonstrates that OCMTM has no potential allergenicity, no potential sensitization, and resulted in no known product-related adverse events. The applicant asserted that this was further corroborated by OCMTM's most recent, real-world evidence dataset presented in Dhillon, et. al. (2024), which showed that treatment with OCMTM resulted in only eight potential product-related adverse events and no serious adverse events. Response: We appreciate the applicant's input. However, we maintain our concern that the submitted evidence does not demonstrate OCMTM's substantial clinical improvement in product safety in comparison to similar products. We acknowledge that FDA's 510(k) clearance process includes a comprehensive review to evaluate the safety and effectiveness of a new product, however, demonstrating substantial clinical improvement for device pass-through payment is different from FDA's 510(k) process. While the applicant has shown that OCMTM is safe, we continue to believe that the applicant has not shown that OCMTM demonstrates substantial clinical improvement in product safety in comparison to currently available therapies. For the reasons discussed, we do not believe that OCMTM represents a substantial clinical improvement relative to existing therapies currently available as discussed in the summary above. Therefore, we have determined that OCMTM does not meet the substantial clinical improvement criterion at Sec. 419.66(c)(2). 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 OCMTM would be reported with HCPCS codes as shown in Table 125. [GRAPHIC] [TIFF OMITTED] TR27NO24.156 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 (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. 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 applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5052, which had a CY 2024 payment rate of $379.92 at the time the application was received. HCPCS code 11042 in APC 5052 had a device offset amount of $0.04 at the time the application was received. According to the applicant, the cost of OCMTM is $1,320.00. 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 [[Page 94199]] percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $1,320.00 of OCMTM is 347.44 percent of the applicable APC payment amount for the service related to the category of devices of $379.92 (($1,320.00/$379.92) x 100 = 347.44 percent). Therefore, we stated that we believe OCMTM 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 $1,320.00 for OCMTM is 3,300,000.00 percent of the cost of the device- related portion of the APC payment amount for the related service of $0.04 (($1,320.00/$0.04) x 100 = 3,300,000.00 percent). Therefore, we stated that we believe OCMTM 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 $1,320.00 for OCMTM and the portion of the APC payment amount for the device of $0.04 is 347.43 percent of the APC payment amount for the related service of $379.92 ((($1,320.00- $0.04)/$379.92) x 100 = 347.43 percent). Therefore, we stated that we believe OCMTM meets the third cost significance requirement. We invited public comment on whether OCMTM meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status. Comment: Several non-applicant commenters asserted that OCMTM warrants transitional pass-through payments because the current construction of the APC bundle includes the services for hard-to-heal wounds but its associated payment rate (i.e., the reimbursement amount for the services assigned to the APC) is not sufficient to cover the cost of more advanced treatments, such as the OCMTM, which are needed to manage complex wounds. The commenters stated that they strongly support the use of OCMTM in the outpatient hospital setting; however, they asserted that the costs are too high given the current APC assignment and its payment rate. The commenters stated that without access to OCM in the hospital outpatient setting patients may be treated in other settings, which can be costlier since these other settings bill separately for advanced wound therapy. The commenters stated that OCMTM represents a clinically effective solution for hard- to-heal wounds that, at present, cannot be used in the outpatient hospital setting given that the cost of using OCMTM is not adequately reflected in the payment rate for the APC to which the product is assigned under the OPPS. Response: We thank the commenters for their additional input. We acknowledge the commenters' concerns about the cost of OCMTM as a treatment option in the hospital outpatient department; however, we note that in order to be eligible for device pass-through, a device must meet all requirements for pass-through payment status in our regulation at Sec. 419.66, in addition to determining that the cost of the device is not insignificant, as described in Sec. 419.66(d). Comment: The applicant thanked CMS for agreeing that it met the cost criterion. Response: We appreciate the applicant's comment. After consideration of the public comment received and our findings from the first, second, and third cost significance tests, we agree that OCMTM meets the cost significance criteria specified at Sec. 419.66(d). After consideration of the public comments received and our review of the device pass-through application, we are not approving OCMTM for transitional pass-through payment status in CY 2025 because the product does not meet the substantial clinical improvement criterion at Sec. 419.66(c)(2). (c) OPN NC SIS Medical AG submitted an application for a new device category for transitional pass-through payment status for OPN NC for CY 2025. Per the applicant, OPN NC percutaneous transluminal coronary angioplasty (PTCA) dilatation catheter is a sterile, single-use, rapid exchange catheter with a distal non-compliant double layer balloon attached to a flexible distal polymer shaft. The applicant explained that OPN NC is intended for balloon dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion. Per the applicant, the balloon dilatation catheter is also indicated for post deployment expansion of balloon expandable coronary stents. The applicant asserted that the device is inserted to position a balloon in a calcified coronary lesion where super-high pressure is used with the intention of achieving acceptable expansion of the lesion. Per the applicant, radiopaque balloon marker bands enable accurate positioning of the device, and shaft markers for brachial and femoral techniques are also in place. According to the applicant, OPN NC is intended for all patient populations. Please refer to the online application posting for OPN NC, available at https://mearis.cms.gov/public/publications/device-ptp/DEP231214L8XQC, for additional detail describing the device and the disease treated by the device. 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 14, 2022, the applicant received 510(k) clearance from FDA for OPN NC as a device intended for balloon dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion. The balloon dilatation catheter is also indicated for post deployment expansion of balloon expandable coronary stents. We received the application for a new device category for transitional pass-through payment status for OPN NC on December 14, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether OPN NC meets the newness criterion at Sec. 419.66(b)(1). Comment: With respect to the newness criterion at Sec. 419.66(b)(1), one commenter stated that they believe OPN NC meets the newness criterion at Sec. 419.66(b)(1) because unlike prior balloons including noncompliant balloons, it is specially designed to achieve 35-55 atmospheres (atm) of pressure, which is far beyond the 20 atm of conventional balloons. The commenter further noted that this can be particularly and uniquely useful for under-expanded stents from fibrotic or calcified vessels, which even new technologies such as lithotripsy and older technologies such as laser are unable to expand. Response: We appreciate the commenter's input; however, the comment relates to an assessment of whether the technology meets the substantial clinical improvement criterion rather than the newness criterion. As such, we have addressed [[Page 94200]] this comment in the substantial clinical improvement criterion discussion below. We received the application for a new device category for transitional pass-through payment status for OPN NC on December 14, 2023, which is within 3 years of March 14, 2022, the date of FDA 510(k) clearance. Based on our review of the application, we have determined that OPN NC meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, comes in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. Per the applicant, OPN NC is integral to the service provided and is used for one patient only. While the applicant did not explicitly state whether the device is surgically inserted or comes in contact with human tissue, per the device description, OPN NC is inserted into the patient for balloon dilation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion. We invited public comment on whether OPN NC meets the eligibility criterion at Sec. 419.66(b)(3). Comment: One commenter submitted a comment stating that they believe that OPN NC meets the Sec. 419.66(b)(3) criterion because it is integral to the service provided and used for one patient only, that is, it is disposable. Response: We appreciate the commenter's input. With respect to the eligibility criterion at Sec. 419.66(b)(3), as noted in the proposed rule, the applicant did not indicate that OPN NC is surgically inserted or comes in contact with human tissue; however, because the device is inserted into the patient for balloon dilation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion, we believe that OPN NC is surgically inserted and comes in contact with human tissue. In addition, we agree with the applicant that OPN NC is an integral part of the service furnished and used for one patient only. After consideration of the public comment we received and our review of the application, we have determined that OPN NC meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant did not address whether OPN NC is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OPN NC is a supply or material furnished incident to a service. We invited public comments on whether OPN NC meets the exclusion criterion at Sec. 419.66(b)(4). Comment: With regards to criterion Sec. 419.66(b)(4), one commenter stated that OPN NC is not equipment. Response: We appreciate the commenter's input. With respect to the eligibility criterion at Sec. 419.66(b)(4), as noted in the proposed rule, the applicant did not indicate that OPN NC is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OPN NC is a supply or material furnished incident to a service; however, because the device is inserted into a calcified coronary lesion where super- high pressure is used for the purpose of improving myocardial perfusion, we believe that OPN NC is not a supply or material furnished incident to a service. In addition, OPN NC is a single-use PTCA dilatation catheter with a distal non-compliant double layer balloon attached to a flexible distal polymer shaft, and therefore does not appear to be equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets. After consideration of the public comment we received and our review of the application, we have determined that OPN NC 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 OPN NC as a PTCA dilatation catheter with a distal non-compliant double layer balloon attached to a flexible distal polymer shaft. According to the applicant, no previous or existing device categories for pass- through payment appropriately describe OPN NC. Per the applicant, the device category, C1725 (Catheter, transluminal angioplasty, non-laser (may include guidance, infusion/perfusion capability)) does not appropriately describe OPN NC, because OPN NC is a super high pressure, non-compliant double (twin) layer balloon. Based on the description the applicant provided, OPN NC is a transluminal vascular dilatation catheter with a balloon intended for dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion, which is consistent with the devices described by C1725. In this context, we stated that we believe OPN NC may be similar to the devices described by C1725, and therefore, OPN NC may also be appropriately described by C1725. We invited public comment on whether OPN NC meets the device category criterion at Sec. 419.66(c)(1). Comment: In response to our concerns that OPN NC may be appropriately described by C1725, one commenter commented that OPN NC is similar in purpose and function to other devices under C1725; however, the double-layer construction is unique in the coronary space, and enables the high-pressure inflation needed for angioplasty of resistant lesions. The commenter further commented that while this is similar in mechanism to conventional angioplasty balloons (dilatation through pressure, rather than through intravascular lithotripsy (IVL)), it creates a unique functionality of using pressure to dilate lesions and stents that would otherwise be resistant to dilatation. Another commenter stated that it thinks OPN NC should be reimbursed and assigned the same codes as coronary IVL (C1761) as it is used for similar patients/treatments. Response: We appreciate the commenters' input. We do not agree that OPN NC is described by the C1761 (Catheter, transluminal intravascular lithotripsy, coronary) device category as suggested. We note that C1761 is used to describe coronary IVL devices that are used to perform IVL, a methodology that delivers sonic pressure waves to break calcium deposits in a coronary vessel, which is inconsistent with the function and purpose of OPN NC. As such, we do not believe that C1761 describes OPN NC. However, we continue to believe OPN NC is similar to the devices described by C1725. Specifically, C1725 (Catheter, transluminal angioplasty, non-laser (may include guidance, infusion/ [[Page 94201]] perfusion capability)) is used to describe devices that rely on inflation of a balloon to directly apply pressure to plaque in a vessel during an angioplasty procedure. The applicant stated that OPN NC is a transluminal vascular dilatation catheter with a balloon intended for dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion, which is consistent with the devices described by C1725. While we recognize that OPN NC may vary in construction from other devices described by C1725, we nevertheless continue to believe that OPN NC is appropriately described by C1725. Therefore, we have determined that OPN NC does not meet the device category eligibility criterion at Sec. 419.66(c)(1) because it is appropriately described by an existing category or a category 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 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. According to the applicant, OPN NC represents a substantial clinical improvement over existing technologies in the management of patients with highly calcified coronary lesions by providing optimal lumen expansion and demonstrating better outcomes in lesion treatment compared to other devices. The applicant provided the following evidence to support its claim: three peer-reviewed studies; a PowerPoint presenting an indirect comparison of OPN NC versus another device, Shockwave Intravascular Lithotripsy (IVL) System with Shockwave C2 Coronary Intravascular Lithotripsy (IVL) Catheter (Shockwave),\127\ that uses IVL to treat calcium lesions; a spreadsheet summarizing the data presented in the PowerPoint document comparing OPN NC and Shockwave; and a background article providing an expert consensus statement from the Society for Cardiovascular Angiography & Interventions on management of in-stent restenosis and stent thrombosis.\128\ Table 126 summarizes the applicant's assertion regarding the substantial clinical improvement criterion. Please see the online posting for OPN NC for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. --------------------------------------------------------------------------- \127\ CMS approved an application for the Shockwave IVL System with Shockwave C2 Coronary IVL Catheter as a new device category for transitional pass-through payment status and established HCPCS code C1761 as a new device category effective July 1, 2021. We refer readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR 63577 through 63583) for a full discussion the Shockwave IVL System with Shockwave C2 Coronary IVL Catheter application and decision. \128\ Background articles are not included in the following table but can be accessed via the online posting for the technology. --------------------------------------------------------------------------- BILLING CODE 4120-01-P [[Page 94202]] [GRAPHIC] [TIFF OMITTED] TR27NO24.157 [[Page 94203]] [GRAPHIC] [TIFF OMITTED] TR27NO24.158 BILLING CODE 4120-01-C After review of the information provided by the applicant, we stated that we have the following concerns regarding whether OPN NC meets the substantial clinical improvement criterion. The applicant presented the published results of one study of 50 patients undergoing optical coherence tomography (OCT)-guided percutaneous coronary interventions, including OPN NC, to treat calcified lesions (Natalia Pinilla-Echeverri, et al., 2023). The retrospective study aimed to gain a better understanding of OPN NC calcium modification mechanisms, such as creating deep and wide calcium fractures during percutaneous coronary interventions with the intended clinical outcome of improving myocardial perfusion. Per the applicant, the study showed a primary efficacy endpoint of >= 80 percent expansion of the mean reference lumen area achieved in 80 percent of the patients treated. The applicant also presented a retrospective study evaluating 326 highly resistant coronary lesions that had failed to achieve adequate post- dilatation luminal gain with conventional NC-balloons (Secco, et al., 2019). Per the study authors, an OPN NC balloon was inflated to achieve a uniform balloon expansion after the failed attempts with conventional NC-balloons. According to the authors, 413 OPN NC balloons were used (1.26 per lesion), and angiographic success was achieved in 318 lesions (97.5 percent), procedural success was achieved in 315 lesions (96.6 percent), and technical success was achieved in 288 patients (90.5 percent). The study authors also reported that the OPN NC balloon alone was able to achieve adequate expansion in 288 cases (90.5 percent), while in 30 patients, rotational atherectomy was needed and performed because of the impossibility to cross the lesion with a proper sized OPN NC balloon. The applicant presented a third study focused on patients needing treatment of in-stent restenosis (ISR) (Seiler, et at., 2023). According to the authors, 208 ISR lesions were treated in 188 patients. The study authors concluded that the use of OPN NC for treatment of ISR lesions was safe (primary endpoint of the study) and may lead to a low rate of target lesion/vessel failure (TLF/TVF) during long-term follow-up. We noted that these studies were not randomized clinical trials with a comparator to demonstrate clinical improvement. Instead, the applicant presented results from registries using non- randomized, retrospective study designs without a control group, which we stated that we believe may reduce the strength of the evidence presented to support the claim. The authors noted in all three studies that randomized trials may be needed to compare OPN NC to other similar devices. Further, we also noted that in one of the studies (Natalia Pinilla- Echeverri, et al., 2023), the study authors indicated that use of other calcium lesion modification devices prior to applying OPN NC to the patients in that study is a potential confounder that could result in overestimation of OPN NC's effectiveness. The study authors stated that this was controlled by having an exclusive OCT pullback pre-OPN NC but indicated that calcium plaque modification caused by other devices may not be evident on OCT. The study authors further noted that since other devices were used before OPN NC, they could not comment on calcium modification from OPN NC use upfront or an OPN NC-only strategy. We welcomed any additional evidence supporting the claim that that OPN NC provides optimal lumen expansion and the impact of using other calcium lesion modification devices prior to applying OPN NC to a patient. With regard to safety, in the Natalia Pinilla-Echeverri, et al. (2023) study, one patient was found to have had a flow limiting dissection requiring stent deployment; however, no coronary perforations or no-reflow were reported. In the Secco, et al. (2019) study, three patients (0.9 percent) were reported to have experienced coronary rupture after balloon inflation and were successfully treated with stent implantation. In the Seiler, et al. (2023) study, coronary perforation was reported to have occurred twice (0.96 percent) with both successfully treated by balloon inflation and implantation of a covered stent; a total of nine (4.3 percent) locally limited, but flow limiting dissections were reported to have occurred and were successfully treated with implantation of a drug-eluting stent; 4 (1.9 percent) cases of flow deterioration due to embolization of thrombotic material (no-reflow) were found; and one patient (0.5 percent) was reported to have suffered from immediate vessel closure after stent implantation. The application did not address whether the use of the device is safe beyond the data on safety endpoints presented in the studies provided. We welcomed additional studies or evidence discussing the risk of adverse events with the use of these types of non-compliant balloons. Finally, we expressed concern that the evidence may not demonstrate that [[Page 94204]] OPN NC substantially improves the treatment of an illness when compared to the benefits of other available treatments. The applicant asserted in a supporting document included in the application, that OPN NC is not the only FDA-authorized device with an indication for balloon dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion and also an indication for post deployment expansion of balloon expandable coronary stents. OPN NC was determined to be substantially equivalent to a legally marketed device, the NC Euphora Rapid Exchange Balloon Dilatation Catheter (Medtronic Inc; K141090), which received 510(k) clearance on August 15, 2014. The FDA 510(k) summary for OPN NC indicated that the devices share similar technological characteristics. In fact, the FDA 510(k) summary indicated that OPN NC differs only in the rated burst pressure of the balloon. We noted that the applicant did not compare the nominated device with the NC Euphora Rapid Exchange Balloon Dilatation Catheter, which we believe may be similar. While the applicant asserted that OPN NC is the only super-high pressure, non- compliant twin layer balloon dilatation catheter available in the U.S. and the only device on the market of this nature and capability, we stated we would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical benefit in comparison to other similar NC balloon devices. We invited public comment on whether OPN NC meets the substantial clinical improvement criterion at Sec. 419.66(c)(2). Comment: We received multiple comments supporting the approval of OPN NC based on personal experience with the product and opinions on the clinical benefit of utilizing OPN NC. The commenters described their experiences using OPN NC and asserted that it works where other interventional strategies, such as traditional non-compliant balloons, atherectomy or intravascular lithotripsy have failed. The commenters added that they believe OPN NC is unique in allowing full expansion of extremely resistant lesions, particularly in the treatment of previous stents with restenosis due to under-expansion of underlying calcium and where the presence of the stent limits the use of technology such as atherectomy to modify the calcium. In addition, the commenters stated that in some cases OPN NC may be used as a stand-alone treatment, particularly in cases involving previously under-expanded stents. Further, the commenters asserted that they believe OPN NC is unique in achieving these results because it is a super high-pressure noncompliant balloon consisting of a double balloon layer and therefore, the rated burst pressure is substantially higher than that of a traditional non-compliant balloon. One commenter stated that the rated burst pressure for OPN NC is 35 atms of pressure, which is significantly higher than traditional non-compliant angioplasty balloons that have rated burst pressures of 20-24 atms of pressure. One commenter stated that OPN NC is specially designed to achieve 35-55 atms of pressure.\129\ While this commenter addressed this device feature in reference to the Sec. 419.66(b)(1) in their comment, we believe the comment was intended to address to address the substantial clinical improvement criterion, and therefore is included in the substantial clinical improvement discussion. --------------------------------------------------------------------------- \129\ The applicant indicated 35 atms of pressure as the rated burst pressure in the information included in the application. --------------------------------------------------------------------------- One commenter acknowledged that while the OPN NC device has not been tested in randomized trials, the commenter believes the device has demonstrated utility in cases of prior device failure, i.e., where conventional balloons have failed to dilate a lesion and effectively demonstrates its use case in selected circumstances. The commenter further commented that, as a result, they believe that the OPN NC balloon is substantially different from the predicate NC Euphora Rapid Exchange Balloon Dilatation Catheter. Response: While we appreciate the commenters input regarding their experiences with OPN NC, we did not receive any additional data to address our concerns related to the applicant's claims of substantial clinical improvement. As such, we maintain our concerns listed in the CY 2025 OPPS/ASC proposed rule regarding the lack of randomized trials data, the lack of information about comparators, potential confounders not being accounted for, potential risk of adverse events, limited data supporting substantial improvement in the treatment of an illness, and insufficient evidence comparing OPN NC to its predicate. Several commenters asserted that OPN NC as an intervention yields results where other interventions failed. These commenters stated that OPN NC is unique in allowing full expansion of extremely resistant lesions. Commenters further stated that OPN NC is unique in treatment compared to previous stents with restenosis due to under-expansion of underlying calcium where the presence of the stent limits the use of technology such as atherectomy to modify the calcium. We note that we did not receive comments from the applicant. While we appreciate the information provided by the commenters, we note that no additional evidence was submitted to support the applicant's claims and we continue to have the same concerns discussed in the proposed rule. After consideration of the public comments we received and our review of the application, we do not believe that OPN NC represents a substantial clinical improvement relative to existing therapies currently available and have determined that OPN NC does not meet the device eligibility criterion at Sec. 419.66(c)(2). 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 OPN NC would be reported with HCPCS codes shown in Table 127. [[Page 94205]] [GRAPHIC] [TIFF OMITTED] TR27NO24.159 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 (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. 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 applicant did not provide details regarding the payment rates it applied for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2023 payment rate of $5,215.40 at the time the application was received. HCPCS code 92920 in APC 5192 had a CY 2023 device offset amount of $1609.99 at the time the application was received. We noted that the applicant provided two cost amounts for OPN NC: (1) a price list showing the cost of OPN NC as $2,200.00; and (2) a product list that lists the cost of OPN NC as $1,200.00. We further noted that the cost included on the product list provided by the applicant for OPN NC ($1,200.00) does not pass any of the three tests of the cost criterion, but the cost included on the price list for OPN NC ($2,200.00) passes all three tests of the cost criterion. When performed with the price list cost for OPN NC of $2,200.00, we noted the following calculation outcomes: Sec. 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 average reasonable cost of $2,200.00 for OPN NC is 42.18 percent of the applicable APC payment amount for the service related to the category of devices of $5,215.40 (($2,200.00/ $5,215.40) x 100 = 42.18 percent). Therefore, when utilizing the price list cost of $2,200.00 provided, we stated that we believe OPN NC 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 $2,200.00 for OPN NC is 136.65 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,609.99 ($2,200.00/ $1,609.99) x 100 = 136.65 percent). Therefore, when utilizing the price list cost of $2,200.00 provided, we stated that we believe OPN NC 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 $2,200.00 for OPN NC and the portion of the APC payment amount for the device of $1,609.99 is 11.31 percent of the APC payment amount for the related service of $5,215.40 ((($2,200.00- $1,609.99)/$5,215.40) x 100 = 11.31 percent). Therefore, when utilizing the price list cost of $2,200.00 provided, we stated that we believe OPN NC meets the third cost significance requirement. When performed with the product list cost for OPN NC of $1,200.00, we noted the following calculation outcomes: Sec. 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 average reasonable cost of $1,200.00 for OPN NC is 23.01 percent of the applicable APC payment amount for the service related to the category of devices of $5,215.40 (($1,200.00/ $5,215.40) x 100 = 23.01 percent). Therefore, when utilizing the product list cost of $1,200.00 provided, we stated that we believe OPN NC does not meet 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 $1,200.00 for OPN NC is 74.53 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,609.99 ($1,200.00/ $1,609.99) x 100 = 74.53 percent). Therefore, when utilizing the product list cost of $1,200.00 provided, we stated that we believe OPN NC does not meet 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 $1,200.00 for OPN NC and the portion of the APC payment amount for the device of $1,609.99 is negative 7.86 percent of the APC payment amount for the related service of $5,215.40 ((($1,200.00-$1,609.99)/$5,215) x 100 = [[Page 94206]] -7.86 percent). Therefore, when utilizing the product list cost of $1,200.00 provided, we stated that we believe OPN NC does not meet the third cost significance requirement. Based on the conflicting amounts provided for the reasonable cost of OPN NC, we questioned whether OPN NC meets the cost significance criterion. We welcomed additional information regarding this inconsistency on the estimated average reasonable cost of OPN NC. We invited public comment on whether the OPN NC 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 regarding whether OPN NC meets the cost significance criteria as described at Sec. 419.66(d). As noted in the proposed rule, the applicant provided two different amounts for the reasonable cost of OPN NC. For this final rule with comment period, we will use the submitted device cost of $2,200 stated in the price list in the proposed rule to perform our cost calculations. As such, based on our findings from the first, second, and third cost significance tests, we believe OPN NC meets the eligibility criterion at Sec. 419.66(d). After consideration of the public comments we received and our review of the device pass-through application, we are not approving OPN NC for transitional pass-through payment status in CY 2025 because the product does not meet eligibility criteria at Sec. 419.66(c)(1) and (2). (d) OSCAR[supreg] Peripheral Multifunctional Catheter Biotronik, Inc. submitted an application for a new device category for transitional pass-through payment status for OSCAR[supreg] Peripheral Multifunctional Catheter (OSCAR[supreg]) for CY 2025. According to the applicant, OSCAR[supreg] is a tool used to simplify the treatment of peripheral artery disease (PAD), a disease process characterized by the narrowing of arteries that supply blood to the limbs, usually the legs. In severe cases, PAD can cause tissue death and gangrene, leading to amputation. Per the applicant, OSCAR[supreg] can simplify the process of peripheral interventions, reduce the time required to perform the procedure and the need for repeat procedures, reduce the risk of complications associated with changing out multiple medical devices, minimize radiation exposure, and enhance patient comfort. Please refer to the online application posting for OSCAR[supreg], available at https://mearis.cms.gov/public/publications/device-ptp/DEP230601F6NM2, for additional detail describing the device and the disease treated by the device. Comment: A few commenters stated that OSCAR[supreg] meets the criteria for transitional pass-through payment. Commenters stated that they believe OSCAR[supreg] is highly effective and safe in crossing multiple occluded vessels of different morphologies above and below the knee, and is a necessary tool to treat patient with critical limb ischemia and calcific blockages of the arteries in the legs. One commenter asserted that OSCAR[supreg] will save money for hospitals because the device will result in less equipment use, faster procedure times, and higher rates of success and case completion. Response: We appreciate the commenters' input and support for the OSCAR[supreg] application for transitional pass-through payment. We have taken these comments into consideration in our final determination regarding pass-through status for OSCAR[supreg]. 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 5, 2022, the applicant received 510(k) clearance from FDA for OSCAR[supreg] as a device to be used for percutaneous transluminal interventions in the peripheral vasculature to provide support during access into, and to dilate stenoses in, femoral, popliteal and infrapopliteal arteries. The product is also intended for injecting radiopaque contrast media for angiography. We received the application for a new device category for transitional pass-through payment status for OSCAR[supreg] on June 1, 2023, which is within 3 years of the date of the initial FDA marketing authorization. We invited public comment on whether OSCAR[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 that the pass-through payment application for OSCAR[supreg] is within the timeframe of 3 years post- FDA approval; therefore, the newness criterion at Sec. 419.66(b)(1) is met. Response: We appreciate the applicant's input. We received the application for a new device category for transitional pass-through payment status for OSCAR[supreg] on June 1, 2023, which is within 3 years of July 5, 2022, the date of FDA 510(k) clearance. Based on our review of the application, we have determined that OSCAR[supreg] meets the newness criterion at Sec. 419.66(b)(1). With respect to the eligibility criteria at Sec. 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not explicitly state whether OSCAR[supreg] is integral to the service provided. While the applicant did not explicitly state whether the device is used for one patient only or whether it comes in contact with human tissue, per the device description, OSCAR[supreg] is surgically inserted into the lower extremity peripheral vascular system and is single-use. We invited public comments on whether OSCAR[supreg] meets the eligibility criterion at Sec. 419.66(b)(3). Comment: The applicant submitted a comment confirming that the OSCAR[supreg] meets the eligibility criterion at Sec. 419.66(b)(3) because it is an integral part of the service furnished, is used for one patient only, comes into contact with human tissue, and is surgically inserted or implanted. Response: We appreciate the applicant's input. We agree with the applicant that OSCAR[supreg] is an integral part of the service furnished, used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted, or applied in or on a wound or other skin lesion. After consideration of the public comments received and our review of the application, we have determined that OSCAR[supreg] meets the eligibility criterion at Sec. 419.66(b)(3). With respect to the exclusion criterion at 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). The applicant did not indicate whether OSCAR[supreg] is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OSCAR[supreg] is a supply or material furnished incident to a service. We invited public comment on whether OSCAR[supreg] meets the exclusion criterion at Sec. 419.66(b)(4). [[Page 94207]] Comment: The applicant submitted a comment confirming that OSCAR[supreg] meets the eligibility criterion at Sec. 419.66(b)(4) because it is not equipment, an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered. The applicant also clarified that OSCAR[supreg] is not a supply or material furnished incident to a service. Response: We appreciate the applicant's input. We agree with the applicant that OSCAR[supreg] is not equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, or a material or supply furnished incident to a service. After consideration of the public comments received and our review of the application, we have determined that OSCAR[supreg] 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 asserted that OSCAR[supreg] is a combination device authorized by FDA with an indication to diagnose and treat peripheral vascular lesions, identify obstructions, and cross the areas of obstruction and restore blood flow using a single system. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe OSCAR[supreg]. Per the applicant, OSCAR[supreg] has the functionality of multiple devices currently used during lower extremity peripheral vasculature interventions. The applicant provided multiple HCPCS codes that could describe some of the components of OSCAR[supreg]; however, only one of the codes provided, C1725 (Catheter, transluminal angioplasty, non-laser (may include guidance, infusion/perfusion capability)), is a pass-through device category HCPCS code, and, therefore, C1725 is the only device category we evaluated for this criterion. Per the applicant, the device category C1725 does not appropriately describe OSCAR[supreg] because OSCAR[supreg] can cover the functionality of support catheters, several sizes of angioplasty balloons, chronic total occlusion crossing devices, reentry catheters, resistant lesion preparation devices, and dissection-reducing devices. According to the applicant, current pass- through coding does not adequately capture OSCAR[supreg]'s full functionality and the added clinical and economic value derived from its simplification of peripheral vascular interventions. We noted, based on the description the applicant provided, that when the OSCAR[supreg] support catheter and OSCAR[supreg] dilator are combined with the OSCAR[supreg] PTA balloon, the device is used to complete a transluminal angioplasty, which is consistent with the devices described by C1725. In this context, we stated that we believe OSCAR[supreg] may be similar to the devices described by C1725 and, therefore, may be appropriately described by C1725. We invited public comment on whether OSCAR[supreg] meets the device category criterion at Sec. 419.66(c)(1). Comment: In response to our concerns that OSCAR[supreg] may be appropriately described by C1725, the applicant commented that while some functionality of OSCAR[supreg] is captured in C1725, OSCAR[supreg]'s functionality of crossing and lesion treatment is not described by C1725. According to the applicant, C1725 does not adequately capture OSCAR[supreg]'s multi-functionality because while C1725 describes non-laser catheters used for transluminal angioplasty, which may include guidance, infusion, or perfusion capability, OSCAR[supreg] facilitates the steps of percutaneous transluminal angioplasty (PTA) procedures through lesion access, lesion crossing, and lesions of different length treatment, achieved using only a single device for the entire procedure. The applicant reiterated that OSCAR[supreg] consists of a support catheter, dilator, and PTA, providing the possibility for several different configurations during peripheral vasculature intervention. Further, the applicant noted that with this versatility, OSCAR[supreg] also provides features that are not available with other devices, such as user-adjustable guidewire support for accessing and crossing lesions and a length-adjustable balloon for lesion-specific angioplasty. Response: We appreciate the applicant's input. After consideration of the public comments received and our review of the application, we continue to believe that C1725 appropriately describes OSCAR[supreg] because, as described by the applicant, when the OSCAR[supreg] support catheter and OSCAR[supreg] dilator are combined with the OSCAR[supreg] PTA balloon, the device is used to complete a transluminal angioplasty, which is consistent with the function of devices that may appropriately be described by C1725. The applicant asserted that OSCAR[supreg] provides features that are not available with other devices, such as a user-adjustable guidewire for accessing and crossing lesions and a length-adjustable balloon for lesion-specific angioplasty. However, based on the information provided, it remains unclear whether some of these additional items are simply supplies incidental to the service. If these additional items are supplies incidental to a service, the inclusion of these supplies along with a device to streamline a service does not materially differentiate the device from similar devices. Therefore, the multi-functionality differences of OSCAR[supreg] described by the applicant would not distinguish it from other devices described by the pass-through device category C1725. After consideration of the public comments received and our review of the application, we continue to believe that C1725 appropriately describes OSCAR[supreg]. Therefore, we have determined that OSCAR[supreg] does not meet the device category eligibility criterion at Sec. 419.66(c)(1) because it is appropriately described by an existing category or a category previously in effect. Comment: The applicant asserted that device category C1725 does not appropriately describe OSCAR[supreg] because the functionality of OSCAR[supreg] allows the operator to perform several procedural steps with only one device, which improves procedural efficiency, reduces radiation exposure for patient and operator, and reduces the number of devices used to complete the procedure. The applicant also stated that OSCAR[supreg] adds clinical and economic value derived from its simplification of peripheral vascular interventions. Response: We appreciate the applicant's input. We believe these comments are more appropriately related to the substantial clinical improvement criterion at Sec. 419.66(c)(2), and, therefore, we will take these comments into consideration in that discussion 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 [[Page 94208]] 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 OSCAR[supreg] represents a substantial clinical improvement over existing technologies in the diagnosis and management of peripheral artery disease because it uses less equipment, cuts down procedure time, and mitigates risks like vascular damage, infections, and radiation exposure, thereby enhancing clinical efficiency and safety. The applicant provided four background documents supporting its substantial clinical improvement claim. Table 128 summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for OSCAR[supreg] for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. [GRAPHIC] [TIFF OMITTED] TR27NO24.160 After review of the information provided by the applicant, we stated we had the following concerns regarding whether OSCAR[supreg] meets the substantial clinical improvement criterion. First, the applicant did not submit peer-reviewed or published clinical evidence to substantiate clinical improvement over existing devices. The applicant submitted four background documents in support of OSCAR[supreg]: (1) a clinical benefit table, (2) a presentation on the Evaluation of Market Acceptance, (3) the OSCAR[supreg] U.S. Evaluation of Market Acceptance Report, and the (4) OSCAR[supreg] Clinical Evaluation Report. All four of these documents rely on data from the Evaluation of Market Acceptance. We noted these documents are not published or peer-reviewed, and reflect data collected for marketing purposes rather than clinical improvement purposes. The data included appear to be opinion-based survey questions asked of physicians recruited by the applicant for the Evaluation of Market Acceptance and noted that these documents suggest an implicit bias. We questioned the link between these documents and the claims the applicant made that OSCAR[supreg] shows substantial clinical improvement because it uses less equipment, cuts down procedure [[Page 94209]] time, and mitigates risks like vascular damage, infections, and radiation exposure, thereby enhancing clinical efficiency and safety. We requested clarification on how the supporting documents directly relate to the substantial clinical improvement claims. Further, we questioned how a collection of devices currently available on the market consolidated into a single packaged product demonstrates substantial clinical improvement. According to the applicant, with OSCAR[supreg], some procedures may be performed with a single device which cuts down procedure time and mitigates risks like vascular damage, infections, and radiation exposure, thereby enhancing clinical efficiency and safety. The applicant asserted several benefits of using OSCAR[supreg] over multiple devices, including reducing (1) the need to remove and replace multiple devices, which may reduce the incidence of complications like infection and vessel damage; (2) the need to use ill-fitting devices; (3) the need for multiple guidewires in several procedures; and (4) the incidence of complications, such as infections and vessel damage. However, we did not receive comparative data supporting the claim that OSCAR[supreg] offers superiority over currently available treatments in terms of clinical benefit or safety. The evidence provided did not discuss any advantages of using a single system of devices rather than multiple individual devices with diverse functionalities. We welcomed any additional evidence supporting these claims. Furthermore, per the applicant, OSCAR[supreg] is effective in preparing intravascular lesions for advanced interventions, particularly stenting, and by ensuring optimal lesion preparation, OSCAR[supreg] elevates the success rate of these procedures, enhances patient safety, and streamlines institutional operations. According to the applicant, OSCAR[supreg] can treat chronic total occlusions (CTOs) and incorporates reentry capabilities, features traditionally found in standalone devices. The applicant asserted this integration enhances patient safety, simplifies procedures, and elevates the efficiency of operations. However, we noted that the applicant did not provide clinical information in support of these claims. Again, we welcomed any additional evidence supporting these claims. In addition, we questioned whether OSCAR[supreg] can be sufficiently distinguished from similar existing technologies to demonstrate substantial clinical improvement. OSCAR[supreg] was determined to be substantially equivalent to a legally marketed device, the INFINITY Angioplasty Balloon CatheterTM, which received 510(k) clearance on May 20, 2020. The FDA 510(k) summary for OSCAR[supreg] indicated that the devices share similar technological characteristics and that OSCAR[supreg] differs only in that it combines support catheters to be used with the dilator and balloon catheter. We did not receive data demonstrating how OSCAR[supreg] offers a substantial clinical improvement compared to the INFINITY Angioplasty Balloon CatheterTM. We stated that we would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical benefit in comparison to INFINITY Angioplasty Balloon CatheterTM. Finally, per the applicant, there are six device types that it believed OSCAR[supreg] is most closely related to: (1) workhorse guidewires (Abbott, Boston Scientific, Terumo, Medtronic, Biotronik, Cook Medical, Cordis); (2) premium guidewires (Abbott, Asahi Intecc, Boston Scientific, Cook Medical and more); (3) workhorse & premium support catheters (Philips, Boston Scientific, Cook Medical, Medtronic, Asahi Intecc, Teleflex and more); (4) angioplasty balloons (Abbott, BD Interventional, Biotronik, Cook Medical, Medtronic and more); (5) lesion preparation balloons (Philips, Medtronic, BD Interventional and Cagent Vascular); and (6) chronic total occlusion and reentry devices. We stated that we do not believe that OSCAR[supreg] is similar to the workhorse guidewires and premium guidewires listed because OSCAR[supreg] does not include guidewires. We welcomed additional information illustrating how OSCAR[supreg] is similar to the listed workhorse guidewires and premium guidewires and evidence demonstrating the benefits of OSCAR[supreg] over these other devices. While we noted that OSCAR[supreg] is comparable to other available technologies, we did not receive data demonstrating how OSCAR[supreg] offers a substantial clinical improvement compared to the workhorse guidewires and premium support catheters, angioplasty balloons, lesion preparation balloons, or chronic total occlusion and reentry devices and stated that we would be interested in additional evidence demonstrating the substantial clinical benefits of OSCAR[supreg] over these other devices. We stated that additional evidence comparing OSCAR[supreg] to existing technologies would be particularly helpful to determine whether the device demonstrates substantial clinical improvement over currently available treatments in the clinical setting where it is most likely to be used. Specifically, we welcomed published peer-reviewed clinical trials that show improved clinical outcomes, such as reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process compared to the standard of care. We invited public comment on whether OSCAR[supreg] meets the device category criterion at Sec. 419.66(c)(2)(i). Comment: In response to our concerns that the applicant did not provide sufficient peer-reviewed or published evidence to substantiate OSCAR[supreg]'s clinical improvement over existing devices, the applicant commented that other data sources are acceptable for transitional pass-through payment applications to prove substantial clinical improvement. Specifically, the applicant asserted that the provided documents show two sources of evidence: internal benchmark tests and a real-world user evaluation. Per the applicant, the clinical benefit table provided summarizes the industry's state-of-the-art device procedural success and complication rates from published literature about similarly marketed devices. The applicant asserted that the real-world market evaluation compares OSCAR[supreg]'s internal benchmark tests to these published state-of-the-art benchmarks to determine whether OSCAR[supreg] met or exceeded the benchmarks. To evaluate market acceptance, the applicant explained that it conducted internal benchmark tests of OSCAR[supreg] in a real-world setup, without any exclusion criteria in terms of lesion characteristic and patient population. The applicant noted that it did this to obtain the opinion of different users--a method of user experience testing that is well-accepted in the field. Furthermore, the applicant stated that the real-world user experience data showed that OSCAR[supreg] has the potential to simplify procedures with one platform, which could reduce device escalations and lead to procedural efficiencies. According to the applicant, this potential simplification is especially important as staffing shortages and availability issues continue to plague U.S. facilities. Response: We appreciate the applicant's input. We acknowledge that data sources other than peer-reviewed or published studies may be submitted for the purpose of supporting substantial clinical improvement in [[Page 94210]] transitional pass-through payment applications. CMS considers all submitted evidence when reviewing transitional pass-through payment applications, however, we note that higher levels of evidence, such as peer-reviewed controlled studies, will typically be more supportive and in some cases may be required to establish a substantial clinical improvement argument. We continue to believe that the predominance of the data submitted appears to be opinion-based survey questions asked of physicians for marketing purposes, is likely subject to implicit bias, and falls significantly short of demonstrating substantial clinical improvement. In addition, we do not believe that the documents submitted by the applicant demonstrate that OSCAR[supreg] mitigates risks like vascular damage, infections, and radiation exposure as claimed. Finally, we do not believe that the applicant has provided an appropriate level of evidence that the use of OSCAR[supreg] reduces procedure time, nor has the applicant established that a potential reduction in procedure time and/or the use of less equipment translates to a substantial improvement in treatment of the affected patient population. After consideration of the public comment received and our review of the application, we continue to have concerns about whether OSCAR[supreg] demonstrates substantial clinical improvement, and we believe that additional peer-reviewed evidence would be helpful. Comment: In response to our concern whether OSCAR[supreg] can be sufficiently distinguished from a legally marketed device, the INFINITY Angioplasty Balloon CatheterTM, to demonstrate substantial clinical improvement, the applicant commented that OSCAR[supreg] is not identical to the INFINITY Angioplasty Balloon CatheterTM. Specifically, the applicant asserted that, in its 510(k) approval summary, FDA stated that OSCAR[supreg] is comparable to the predicate device rather than equivalent. According to the applicant, the term comparable indicates that OSCAR[supreg] has similar characteristics and intended use as the predicate device, but it does not imply that the two devices are identical. The applicant asserted that the INFINITY Angioplasty Balloon CatheterTM is indicated for PTA in the peripheral vasculature, including iliac, femoral, popliteal, infra- popliteal arteries, and for the treatment of obstructive lesions of native or synthetic arteriovenous dialysis fistulae; whereas OSCAR[supreg] facilitates the steps of PTA procedures (lesion access, cross and treat lesions of different length) using a single device for the entire procedure to reduce procedural time and simplify steps. Per the applicant, OSCAR[supreg] was designed to combine features of other marketed devices, such as support catheters and PTA balloon catheters. The applicant asserted the main benefits of OSCAR[supreg] are (1) the device's variable shaft stiffness which allows for lesion- adapted access and crossing, and (2) its length adjustability features which allow for precise adjustment of the balloon length to match the target lesion's length. The applicant further explained that these features allow OSCAR[supreg] to treat residual stenosis using a single balloon, rather than the typical treatment's multiple balloons, resulting in the potential benefits of lower device consumption, fewer device exchanges, reduced overall procedural time, and fewer stock- keeping units needed in the catheterization laboratory. Response: We appreciate the applicant's input. While FDA determination of substantial equivalence cannot alone be used to conclude that a device demonstrates substantial clinical improvement as required by the regulation at 42 CFR 419.66(c)(2), we note that the FDA 510(k) summary provided by the applicant indicated that both the nominated and predicate devices share similar technological characteristics and that OSCAR[supreg] differs only in that it combines support catheters to be used with the dilator and balloon catheter. Specifically, OSCAR[supreg] was determined to be substantially equivalent to a legally marketed device, the INFINITY Angioplasty Balloon CatheterTM, which received 510(k) clearance on May 20, 2020. The FDA 510(k) summary for OSCAR[supreg] indicated that the devices share similar technological characteristics and that OSCAR[supreg] differs only in that it combines support catheters to be used with the dilator and balloon catheter. While the applicant asserted that treatment of complex lesions with OSCAR[supreg] reduces device exchanges and procedural steps, procedure time, radiation exposure, contrast media, and crossing attempts, the applicant did not provide evidence that demonstrated how these reductions result in improved clinical outcomes. We did not receive data demonstrating how OSCAR[supreg] offers a substantial clinical improvement compared to the INFINITY Angioplasty Balloon CatheterTM. We expressed concern in the proposed rule regarding the language in the FDA 510(k) summary because we could not determine whether OSCAR[supreg] could be distinguished from the INFINITY Angioplasty Balloon CatheterTM 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. After consideration of the public comment received and our review of the application, we maintain our concern that OSCAR[supreg] does not demonstrate a substantial clinical improvement compared to the predicate device, INFINITY Angioplasty Balloon CatheterTM. Comment: In response to our concerns that OSCAR[supreg] may be substantially similar to six device types that the applicant indicated OSCAR[supreg] is most closely related to, the applicant commented that OSCAR[supreg] reduces the need for multiple devices and may lower procedural costs. Specifically, the applicant clarified that OSCAR[supreg] requires a guidewire but replaces the need for support catheters and percutaneous balloons and may replace the need for chronic total occlusion devices, reentry catheters, or lesion preparation devices. In response to our request that the applicant submit additional evidence comparing OSCAR[supreg]'s clinical outcomes to those of existing technologies to help us determine whether the device demonstrates substantial clinical improvement, the applicant commented that this request is unreasonable with these types of tools in percutaneous transluminal interventions. Specifically, the applicant asserted that, in below-the-knee interventions, global user experience has shown OSCAR[supreg] to be definitive as it allows length adjustability, which they believe is an improvement over other balloon catheters used for angioplasty. The applicant concluded that real-world user experience has shown that OSCAR[supreg] aids in the treatment of complex lesions through the reduction of device exchanges and procedural steps, reduction of procedure time, reduction of radiation exposure, reduction of contrast media, and fewer crossing attempts. Response: We appreciate the applicant's input. While the applicant asserted, both for this Sec. 419.66(c)(2) criterion and the Sec. 419.66(c)(1) criterion discussed above, that OSCAR[supreg] may reduce the need for support catheters, percutaneous balloons, chronic total occlusion devices, reentry catheters, or lesion preparation devices during percutaneous transluminal interventions, the applicant did not provide evidence demonstrating that OSCAR[supreg]'s potential to reduce the [[Page 94211]] number of devices improved clinical outcomes for patients with PAD. We maintain that these potential reductions in procedural time and cost compared to other devices do not translate to 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, required to demonstrate substantial clinical improvement. Regarding the applicant's statements that OSCAR[supreg] will save money for hospitals because hospitals will use less equipment, procedure times will be faster, and procedures will have higher success rates and case completion and, as a result, patients will avoid limb amputation, we appreciate the commenters' input. However, while reducing costs to the healthcare system is important, it is not a consideration for substantial clinical improvement for purposes of transitional pass-through payments. With respect to the higher success rates, case completion, and decrease in limb amputations, which could demonstrate substantial clinical improvement, the commenters did not provide evidence to support these claims. Similarly, regarding faster procedure times, no link was demonstrated between this and a substantial clinical improvement outcome, nor was evidence provided to support this claim. As such, we maintain our concern about whether the use of OSCAR[supreg] has a substantial clinical benefit compared to the six existing device types noted in the application and over other similar existing technologies. After consideration of the public comments received and our review of the application, we continue to believe the applicant has not demonstrated substantial clinical improvement over existing technologies in the treatment of PAD. Therefore, we have determined that OSCAR[supreg] does not meet the substantial clinical improvement criterion at Sec. 419.66(c)(2). 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 OSCAR[supreg] would be reported with HCPCS codes as shown in Table 129. BILLING CODE 4120-01-P [[Page 94212]] [GRAPHIC] [TIFF OMITTED] TR27NO24.161 [[Page 94213]] [GRAPHIC] [TIFF OMITTED] TR27NO24.162 BILLING CODE 4120-01-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 (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. 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 applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5183, which had a CY 2023 payment rate of $2,978.97 at the time the application was received. HCPCS code 75625 in APC 5183 had a CY 2023 device offset amount of $530.85 at the time the application was received.\130\ According to the applicant, the cost of OSCAR[supreg] is $2,020.00. --------------------------------------------------------------------------- \130\ We noted the applicant selected APC 5192 and an APC payment rate of $5,061.89 for the three tests of the cost criteria. However, for our calculation, we selected APC 5183, which we believe had the lowest applicable APC payment rate of $2,978.97 found in Addendum P to the CY 2023 OPPS/ASC final rule with comment period, among the APCs related to the HCPCS/CPT codes provided by the applicant. We selected the HCPCS/CPT code level device offset amount of $530.85 related to HCPCS 75625 in APC 5183. Based on our initial assessment in the proposed rule, using the APC payment rate of $2,978.97 and the device offset amount of $530.85 would result in OSCAR[supreg] 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 $2,020.00 for OSCAR[supreg] is 67.81 percent of the applicable APC payment amount for the service related to the category of devices of $2,978.97 (($2,020.00/$2,978.97) x 100 = 67.81 percent). Therefore, we stated that we believe OSCAR[supreg] 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 $2,020.00 for OSCAR[supreg] is 380.52 percent of the cost of the device-related portion [[Page 94214]] of the APC payment amount for the related service of $530.85 (($2,020.00/$530.85) x 100 = 380.52 percent). Therefore, we stated that we believe OSCAR[supreg] 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 $2,020.00 for OSCAR[supreg] and the portion of the APC payment amount for the device of $530.85 is 49.99 percent of the APC payment amount for the related service of $2978.97 ((($2,020.00- $530.85)/$ 2,978.97) x 100 = 49.99 percent). Therefore, we stated that we believe OSCAR[supreg] meets the third cost significance requirement. We invited public comment on whether OSCAR[supreg] 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 regarding whether OSCAR[supreg] meets the cost significance criteria as described at Sec. 419.66(d). Based on our findings from the first, second, and third cost significance tests, we have determined that OSCAR[supreg] meets the cost significance criteria specified at Sec. 419.66(d). After consideration of the public comments, we received and our review of the device pass-through application, we are not approving OSCAR[supreg] for transitional pass-through payment status in CY 2025 because the product does not meet the device category eligibility criterion at Sec. 419.66(c)(1) or the substantial clinical improvement criterion at Sec. 419.66(c)(2). Comment: The commenter recommended CMS calculate the device-related portion of APCs for purposes of determining device pass-through payment status eligibility and the device offset using only the cost of the devices replaced by the proposed device pass-through payment status device category. The commenter stated that many procedures with transitional pass-through devices require the use of multiple other devices, and the transitional pass-through device may replace only some (and in some cases none) of the devices included in the device-related portion of the APC. The commenter asserted that, if the device offset is calculated to include other devices that continue to be required to perform the procedure safely and successfully, without properly offsetting the cost of the nominated device, the final payment would fail to adequately reimburse facilities. The commenter requested that CMS also apply this methodology to the TPT applications for AGENTTM Paclitaxel-Coated Balloon Catheter, iFuse Bedrock GraniteTM Implant System, Paradise[supreg] Ultrasound RDN System, and Symplicity SpyralTM RDN System applications. Response: We thank the commenter's recommendation regarding the revision of the methodology for calculating the device-related portion of APCs for the purpose of determining the eligibility of transitional pass-through status of a nominated device. We will continue to consider this issue and any additional public comments related to it.

1. Background

Under the OPPS, prior to CY 2017, device-intensive status for procedures was determined at the APC level for APCs with a device offset percentage greater than 40 percent (79 FR 66795). Beginning in CY 2017, CMS began determining device-intensive status at the HCPCS code level. In assigning device-intensive status to an APC prior to CY 2017, the device costs of all the procedures within the APC were calculated and the geometric mean device offset of all of the procedures had to exceed 40 percent. Almost all of the procedures assigned to device-intensive APCs utilized devices, and the device costs for the associated HCPCS codes exceeded the 40-percent threshold. The no cost/full credit and partial credit device policy (79 FR 66872 through 66873) applies to device-intensive procedures and is discussed in detail in section IV.B.4 of this final rule with comment period. 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 with comment period. 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 as listed. 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 with comment period 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 with comment period. 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. [[Page 94215]] 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

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, 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 through 37109 and 58945 through 58946, respectively), in accordance with our policy stated previously to lower the device offset percentage threshold for procedures to qualify as device-intensive from greater than 40 percent to greater than 30 percent, for CY 2019 and subsequent years, we modified this policy to apply a 31-percent default device offset to new HCPCS codes describing procedures requiring the implantation of a device that do not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. In conjunction with the policy to lower the default device offset from 41 percent to 31 percent, we continued our current policy of, in certain rare instances (for example, in the case of a very expensive implantable device), temporarily assigning a higher offset percentage if warranted by additional information such as pricing data from a device manufacturer (81 FR 79658). Once claims data are available for a new procedure requiring the implantation or insertion of a device, device-intensive status is applied to the code if the HCPCS code-level device offset is greater than 30 percent, [[Page 94216]] 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 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. a. Change to the Device-Intensive Status Default Offset Methodology for New HCPCS Codes As described above, under our existing policies for assigning a device offset percentage to new HCPCS codes, we first rely on the associated claims data for new HCPCS codes. For new HCPCS codes that do not have available claims data yet, we rely on any available claims data from a predecessor code for the new HCPCS code, as described by CPT coding guidance. We assign the device offset percentage to the new HCPCS code that is the device offset percentage of the predecessor code for which we have available claims data. If claims data from the new HCPCS or any predecessor code is unavailable, 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 a device offset percentage 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. If a clinically similar procedure that uses the same devices is not available, then for new HCPCS codes describing procedures requiring the insertion or implantation of devices that do not yet have claims data (from either the new HCPCS code or any predecessor code), we apply a default device offset set at 31 percent. As we stated previously, the purpose of applying the default device offset to new codes that describe procedures that implant or insert devices is to ensure access in the ASC setting for new procedures until claims data become available. Also, under the OPPS, the default device offset is useful for establishing a device amount for new device- intensive procedures. For example, under our policy for no cost/full credit or partial credit devices, we reduce the OPPS payment for device-intensive procedures by the lesser of the full or partial credit a hospital receives for a replaced device or the device offset amount. Additionally, we may remove the device offset amount from the OPPS payment for procedures that are terminated prior to administering anesthesia (since the device was not used for the procedure). While we do allow for additional information in consideration of a higher offset percentage than the default device offset, it would be extremely rare that the appropriate determination of a device offset percentage would rely on pricing data or invoices from a device manufacturer rather than the default device offset percentage. However, we are aware that there may be certain situations where the default device offset percentage would not adequately reflect the existing device portion of the procedure's costs when compared to the cost of similar devices. This difference could impede our ability to accurately remove device offset amounts from new device-intensive procedures under the OPPS. As HOPDs and ASCs perform new procedures with significant device costs, we believe it is appropriate to modify our default device offset methodology to pay HOPDs and ASCs more appropriately when we lack claims data for these newer procedures. Therefore, for CY 2025 and subsequent calendar years, we proposed to modify our default device offset percentage policy for new device-intensive procedures. Specifically, for new HCPCS codes that both describe a procedure that requires the implantation or insertion of a single-use device that meets our requirements of a device as described above and lack claims data (from either the new HCPCS code or any predecessor code), we would apply a default device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. We proposed this methodological change for both the OPPS and ASC Payment System for CY 2025 and subsequent calendar years. We explained that we still believe that a HCPCS code- level device offset is, in most cases, a more accurate representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all the procedures assigned to an APC. However, because newer device-intensive procedures lack claims data, we believe the APC-wide average device offset percentage is, in many cases, a better reflection of the estimated device costs of the procedure than a default 31 percent offset. Additionally, there can be instances where the typical device costs of procedures in an APC can be significantly greater than the 31 percent default device offset. For these reasons, we proposed to modify our default device offset percentage for new device- [[Page 94217]] intensive procedures that describe the implantation or insertion of a single-use device that meets our requirements of a device (as described above) and that do not yet have associated claims data, by applying a default device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. We proposed to apply this policy to new procedures assigned to clinical APCs, but not to new procedures assigned to New Technology APCs. As we indicated in the CY 2019 OPPS/ASC proposed rule and final rule with comment period, we may consider additional information for an offset percentage greater than the default offset percentage (which, for the proposed rule, is the greater of 31 percent or the APC-level offset percentage) 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. This would be for our consideration in extremely rare circumstances, such as an extremely high-cost implantable device. While we explained that we believe our proposed modification to the default device offset policy would improve payment under the OPPS and ASC payment system, we would continue to accept additional information in consideration of an alternative offset percentage. This information would 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 [email protected]. Additional information would 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 would be set in each year's final rule with comment period. Comment: While commenters supported our proposed change to determining default device offset percentages under the ASC payment system, many commenters recommended that we delay implementing our proposed change under the OPPS as we have not fully discussed the implications of such a change under the OPPS. Some stakeholders were concerned that our proposed default device offset methodology could inappropriately inflate the device offset amount for transitional pass- through cost significance tests, which utilize the device offset amounts under the OPPS. Response: Under the OPPS, our proposal, if finalized, would apply whenever a default device offset percentage and the associated device offset amount are utilized. This includes determining eligibility for transitional pass-through payment status for devices, setting the payment amount for transitional pass-through devices, determining the payment amount for discontinued device-intensive procedures, and determining the maximum credit amount for a device-intensive procedure under our device credits policy. The purpose of our proposal was to improve the accuracy of the way in which we determine the device portion for device-intensive procedures in the absence of claims data. We believe the average device cost of the APC can better reflect the expected device portion of a new procedure without claims data than a default device offset of 31 percent since procedures assigned to a clinical APC often have similar device costs. We believe this improvement in the accuracy of determining the device portion of an APC payment should be applied in both settings rather than just one setting as the commenters recommend. We understand that the increased device portion that would result from this change in policy may reduce payment in the OPPS setting if such newer procedures are reported with a transitional pass-through device category or in situations with a device credit or a terminated procedure, but we do not believe it would be appropriate to assign a device offset amount that we believe is less accurate to avoid such a payment reduction under the OPPS. Since our policy has been to keep device costs constant between the OPPS and ASC payment system for device-intensive procedures to appropriately account for the device costs of certain surgical procedures and maintain beneficiary access in the ASC setting for device-intensive procedures, for which interested parties have expressed strong support, we are not accepting the commenter's recommendation to delay implementing our proposed change under the OPPS. Comment: Several commenters noted that the device offset percentage for 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) was inaccurate and did not reflect the total costs for the procedure. The manufacturer of the Barricaid device--a device which is used with HCPCS code C9757--noted that there was an abundance of misreported claims for HCPCS code C9757 which they believe has undermined the integrity of the claims data. The manufacturer and other commenters recommended that we assign a device offset percentage based on claims that reported the use of the Barricaid device, or invoices for the Barricaid device, or using the proposed default device offset methodology that would assign the greater of the APC wide device offset percentage or 31 percent. Commenters also recommended we implement a device-specific edit for this procedure and issue a technical direction letter to ensure appropriate device reporting when billing for HCPCS code C9757. Without such hospital guidance, the commenters believe hospitals may continue to not report the associated device, which they believe could impede our ability to properly set payment rates for device-intensive procedures. Response: We appreciate commenters bringing this issue to our attention. We have taken these comments into consideration with respect to our modification of our device edits policy for CY 2025 in section IV.B.3 of this final rule with comment period. While we continue to rely on hospital claims data rather than external invoices or our default device offset methodology in determining device offset percentages when claims data is available, we believe the stakeholder raises an important issue regarding the nonreporting of device charges and potentially ``missing'' device costs from certain hospital outpatient claims. We are persuaded by commenters that a lack of a device edit for device-intensive procedures, particularly new technologies, might lead to an underreporting of device costs and total procedure costs and impede beneficiary access to such new technologies. Therefore, in conjunction with the modification to our finalized device edits policy as explained further in section IV.B.3 of this final rule with comment period, for procedures subject to our modified device edits policy for CY 2025 that cannot report modifier ``CG'' to bypass this claims processing edit, the device offset percentages calculated for CY 2025 (for the CPT/HCPCS code or its predecessor code) are based on hospital claims that reported a device code. We believe that hospital [[Page 94218]] outpatient claims that report a device code with device-intensive procedures provide, in general, a more accurate representation of the procedures' total costs. Therefore, based on claims data available for CY 2025 subject to this device-reporting requirement, HCPCS code C9757 has a device offset percentage that exceeds the device-intensive threshold and is assigned device-intensive status for CY 2025. Final CY 2025 device offset percentages based on claims data used for this CY 2025 OPPS/ASC final rule with comment period can be found in Addendum P. Comment: Several commenters recommended that we assign device- intensive status to 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) based on the cost of the device or using the default device offset percentage. Further, the manufacturer of the Optilume[supreg] device recommended we create a new HCPCS code to describe the Optilume[supreg] device or a claims processing edit as hospital claims data do not accurately report the device code and device cost. Response: We continue to hear from stakeholders regarding hospital nonreporting of device charges. We note that CPT code 52284 was previously described by CPT code 0499T (Cystourethroscopy, with mechanical dilation and urethral therapeutic drug delivery for urethral stricture or stenosis, including fluoroscopy, when performed), which was effective from January 1, 2018, until January 1, 2024. Therefore, as explained further in section IV.B.3 of this final rule with comment period, in conjunction with our modified device edits policy for CY 2025, we are utilizing the device offset percentages calculated for CY 2025 based on hospital claims that reported a device code. Based on claims data available for CY 2025 subject to this device-reporting requirement, CPT code 0499T has a device offset percentage that exceeds our device-intensive threshold. Therefore, we are assigning device- intensive status to successor CPT code 52284 for CY 2025. Final CY 2025 device offset percentages based on claims data used for this CY 2025 OPPS/ASC final rule with comment period can be found in Addendum P. Comment: One commenter recommended that we assign device-intensive status to CPT codes 0884T, 0885T, and 0886T, which became effective July 1, 2024. Response: We proposed to assign these procedures device-intensive status in the July 2024 OPPS update and in Addendum P to the CY 2025 OPPS/ASC proposed rule. Since these are new procedures with no predecessor or clinically similar codes that use the same device, we are finalizing our proposal to assign device-intensive status to these three procedures and to use our default offset methodology to assign a device offset percentage to CPT codes 0884T, 0885T, and 0886T. Comment: One commenter recommended that we restore device-intensive status to CPT code 27412 (Autologous chondrocyte implantation, knee). The commenter stated the procedure is always performed with HCPCS Code J7330 (Autologous cultured chondrocytes, implant), which they argue is a device. Further, the commenter argues the procedure has historically been device-intensive and should continue to have that designation. Response: We disagree with the commenter. We believe we inadvertently assigned this procedure device-intensive status based on hospitals reporting significant device costs. However, as the commenter noted, CPT code 27412 is performed with J7330 which is categorized as a drug/biological and may have been incorrectly reported as an implantable device by certain hospitals. We note that J7330 is regulated as Human Cells, Tissues, and Cellular and Tissue-Based Products (HTC/Ps) by the FDA under 21 CFR part 1271 and is not regulated as a medical device by the FDA. Since CPT code 27412 does not involve a device that meets our requirement, we are not assigning device-intensive status to CPT code 27412. Comment: One commenter was concerned that Addendum P did not reflect the device offset amount that is applied to the transitional pass-through device performed with CPT code 0505T (Endovenous femoral- popliteal arterial revascularization, 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, with crossing of the occlusive lesion in an extraluminal fashion). The commenter suggested that the device offset amount is $0.00 and Addendum P should reflect this amount. Response: While we agree that the device offset amount for CPT code 0505T is $0.00 as we stated in the July 2024 OPPS Change Request, the amount in Addendum P reflects the total device-related costs of the procedure. In certain situations where an approved transitional pass- through device does not replace existing APC device costs, the amount reflected in Addendum P does not reflect the actual device offset amount that is applied against the separate payment for the transitional pass-through device. Comment: Some commenters recommended that we assign device- intensive status to CPT code 0621T (Trabeculostomy ab interno by laser;) since the procedure was assigned a status indicator of ``E1''-- Items, codes, and services not covered by any Medicare outpatient benefit category; statutorily excluded; not reasonable and necessary-- in CY 2023 and the claims that would be used to determine device- intensive status are invalid and not usable for this purpose. Similarly, one commenter argued that our device offset percentage for CPT code 0795T (Transcatheter insertion of permanent dual-chamber leadless pacemaker, including imaging guidance (e.g., fluoroscopy, venous ultrasound, right atrial angiography, right ventriculography, femoral venography) and device evaluation (e.g., interrogation or programming), when performed; complete system (i.e., right atrial and right ventricular pacemaker components)) should be revised to be set using the default device offset methodology as CPT code 0795T was also assigned status indicator of ``E1'' in CY 2023. Response: We agree with the commenters that claims with a status indicator of ``E1'' may not be appropriate for determining device offset percentages and device offset amounts as this status indicator can be used for procedures that involve a device where such device has not received FDA marketing authorization or received FDA investigational device exemption. For purposes of determining device offset percentages, we will not use claims data from procedures that had a status indicator of ``E1'' for determining device offset percentages. We will revise our claims accounting narrative to reflect this change. Comment: One commenter recommended that we evaluate, as part of rulemaking, procedures that utilize pass-through devices expiring mid- year using the latest final rule claims data available to determine the appropriate APC assignment when the device no [[Page 94219]] longer has transitional pass-through status. Response: We thank the commenter for this recommendation and note we already conduct such an evaluation in our proposed and final rule ratesetting process. Devices for which pass-through status is expiring at any point in the prospective year are packaged in our ratesetting process for that prospective year so that we may reevaluate the APC assignments of these technologies as the commenter noted. Comment: One commenter recommended that we update the device offset percentages from predecessor codes annually rather than just in the first year we calculate the device offset percentage from the predecessor code. Response: We agree with the commenter and will refine our process for applying device offset percentages to use available claims data from predecessor codes annually rather than just in the first year. Comment: Commenters supported the proposed device offset percentage for CPT codes: 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)); 0737T (Xenograft implantation into the articular surface); 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; subfascial); 0817T (Revision or removal of integrated neurostimulation system for bladder dysfunction, including analysis, programming, and imaging, when performed, posterior tibial nerve; subcutaneous); 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); 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); 0671T (Insertion of anterior segment aqueous drainage device into the trabecular meshwork, without external reservoir, and without concomitant cataract removal, one or more); 66683 (Implantation of iris prosthesis, including suture fixation and repair or removal of iris, when performed); 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). Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal with modification to apply a default device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned for a new HCPCS code that describes a procedure that requires the implantation or insertion of a single-use device that meets the definition of a device for purposes of our device offset policy and for which the procedure lacks claims data (from either the new HCPCS code or any predecessor code). Also, in conjunction with the modification to our finalized device edits policy as explained further in section IV.B.3 of this final rule with comment period, for procedures subject to our modified device edits policy for CY 2025 that cannot report modifier ``CG'' to bypass this claims processing edit, the device offset percentages calculated for CY 2025 (for the CPT/HCPCS code or its predecessor code) are based on hospital claims that reported a device code, as we believe that hospital outpatient claims that report a device code for these device-intensive procedures provide, in general, a more accurate representation of the procedures' total costs. We are also finalizing, for purposes of determining device offset percentages, that we will not use claims data from procedures that had a status indicator of ``E1'' during the calendar year we are using for ratesetting and determining device offset percentages. Lastly, we are refining our process for applying device offset percentages to use available claims data from predecessor codes annually, rather than the first year of the successor code's activation date, until we have available claims data from the successor code. The full listing of the final CY 2025 device-intensive procedures, which utilize the revised default device offset policy we are finalizing, can be found in Addendum P to the proposed rule (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 can be found under supporting documentation for this CY 2025 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) was 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 [[Page 94220]] 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 2024 OPPS/ASC final rule with comment period (88 FR 81758 through 81759), we finalized our proposal to establish a procedure-to- device edit for the 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--CPT codes 0308T, 0616T, 0617T, and 0618T. While we noted that interested parties have previously recommended in past rulemaking that we reestablish all of our previous procedure-to-device edits, we did not expect to extend this policy beyond the procedures assigned to APC 5496 (Level 6 Intraocular Procedures). This APC represents a unique situation--the APC (which was the Level 5 Intraocular APC in previous years) had 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. Additionally, in our review of claims data for some of the procedures, we noticed unusual coding, charge, and cost data. These claims had an outsized impact because of the low volume of claims for the APC which impeded our ability to determine a payment rate accurately and appropriately for APC 5496 (Level 6 Intraocular Procedures). Further, because of the low volume of procedures assigned to this APC, we did not believe the reinstatement of procedure-to-device edits for the four procedures assigned to this APC would be administratively burdensome to hospitals. We finalized 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. We proposed to continue this policy for APC 5496 (Level 6 Intraocular Procedures) for CY 2025 and subsequent CYs in the CY 2025 OPPS/ASC proposed rule and noted that new CPT placeholder code 6X004 (Implantation of iris prosthesis, including suture fixation and repair or removal of iris, when performed) is replacing 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) effective January 1, 2025. Additionally, CPT codes 0617T and 0618T currently assigned to APC 5496 (Level 6 Intraocular Procedures) will be deleted effective January 1, 2025. Therefore, for CY 2025, the procedure-to-device edit for procedures assigned to APC 5496 (Level 6 Intraocular Procedures) would apply to CPT code 0308T and 66683 (placeholder code 6X004). We did not propose any other changes to our device edit policy for CY 2025. Comment: One commenter supported our proposal to continue our procedure-to-device edit for the insertion of the Artificial Iris--from CPT code 0616T, which will be deleted on January 1, 2025, to CPT code 66683 will become active on January 1, 2025. Response: We thank the commenters for their support. We are finalizing our proposal to apply the procedure-to-device edit for predecessor code 0616T to successor code 66683. Comment: Several commenters recommended reinstating a claims processing edit to improve hospital reporting of device costs. In particular, the manufacturer of the device Barricaid recommended we implement a device-specific edit for this procedure and issue a technical direction letter to ensure correct device code reporting with 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). Additionally, the manufacturer of the Optilume[supreg] device recommended we create a new HCPCS code to describe the Optilume[supreg] device or a claims processing edit as hospital claims data do not accurately report the device code and device cost on hospital outpatient claims with the appropriate procedure code--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). A few commenters requested that we implement a device edit for CPT code 30469 (Repair of nasal valve collapse with low energy, temperature-controlled (i.e., radiofrequency) subcutaneous/submucosal remodeling) to allow additional years of claims data to determine its device-intensive status as they claim hospitals have been slow to update their chargemasters. Further, one device manufacturer reiterated a longstanding recommendation that we reinstate all our previous device-to-procedure edits. Response: We appreciate commenters bringing to our attention their concerns regarding our assignment of device offset percentages and hospital reporting of device costs. We believe commenters raise an important issue that there may have been instances when a newly created procedure code loses device-intensive status if the device cost fluctuates below the device-intensive threshold of 30 percent of the total procedure cost and then is never able to regain device-intensive status because hospitals are no longer required to report a device code on the claim with that procedure. The commenters have indicated to us that the presence of the device edit requirement can have a significant impact on the device portion and geometric mean cost of a procedure. For example, the geometric mean cost was $9,218.47 for hospitals that reported a device code with HCPCS code C9757 and $6,287.47 for hospitals that did not report a device code. The geometric mean cost was $5,277.22 for hospitals that reported a device code with CPT code 52284 and $3,791.95 for hospitals that did not report a device code. Additionally, removing claims from hospitals that do not report a device code with these procedures increased the device offset percentage for HCPCA code C9757 from 23.62 percent to 43.21 percent and from 32.17 percent to 32.225 percent for CPT code 52284. These results highlight the impact that hospital reporting of device codes can have on our assignment of device offset percentages, device-intensive status, and the geometric mean cost of a procedure and these results impacted our final CY 2025 device-intensive policy as described in section IV.B.2 of this final rule with comment period. We are persuaded by commenters that are our existing device edits policy may be insufficient for [[Page 94221]] certain procedures, particularly newer technologies with device costs that fluctuate around our device-intensive threshold. After consideration of the public comments we received, we are finalizing our proposal with modification. While historically our device edits policy has only applied to procedures that are device- intensive based on the most recent claims data available, for CY 2025 and subsequent calendar years, we are finalizing a policy to apply our device edit policy permanently once a procedure is designated as a device-intensive procedure in a given year. For the procedures designated as device-intensive for CY 2025, we propose that the device edit requirement would apply in CY 2025 and subsequent calendar years as well. We are concerned that the loss of an applicable device edit may impact hospital reporting of device costs and impede our ability to properly set payment rates and determine appropriate device offset percentages for device-intensive procedures. Additionally, we are finalizing a policy to reinstate our device edits policy for procedures that have been device-intensive since we began assigning device- intensive status at the HCPCS code level on January 1, 2017. We believe that by applying our device edit policy to procedures that were device- intensive on or after January 1, 2017, we might continue to receive device cost information for relatively new procedures with limited claims data, which may have been impacted by our policy to require that only existing device-intensive procedures be subject to our device edits policy. For CY 2025, under our modified device edits policy, our device edits requirement will apply to procedures that are device- intensive in CY 2025 as well as procedures that have been device- intensive on or after January 1, 2017.

4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial

Credit Devices a. Background To ensure equitable OPPS payment when a hospital receives a device without cost or with full credit, in CY 2007, we implemented a policy to reduce the payment for specified device-dependent APCs by the estimated portion of the APC payment attributable to device costs (that is, the device offset) when the hospital receives a specified device at no cost or with full credit (71 FR 68071 through 68077). Hospitals were instructed to report no cost/full credit device cases on the claim using the ``FB'' modifier on the line with the procedure code in which the no cost/full credit device is used. In cases in which the device is furnished without cost or with full credit, hospitals were instructed to report a token device charge of less than $1.01. In cases in which the device being inserted is an upgrade (either of the same type of device or to a different type of device) with a full credit for the device being replaced, hospitals were instructed to report as the device charge the difference between the hospital's usual charge for the device being implanted and the hospital's usual charge for the device for which it received full credit. In CY 2008, we expanded this payment adjustment policy to include cases in which hospitals receive partial credit of 50 percent or more of the cost of a specified device. Hospitals were instructed to append the ``FC'' modifier to the procedure code that reports the service provided to furnish the device when they receive a partial credit of 50 percent or more of the cost of the new device. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for more background information on the ``FB'' and ``FC'' modifiers payment adjustment policies (72 FR 66743 through 66749). In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), beginning in CY 2014, we modified our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit. For CY 2013 and prior years, our policy had been to reduce OPPS payment by 100 percent of the device offset amount when a hospital furnishes a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital receives partial credit in the amount of 50 percent or more of the cost for the specified device. For CY 2014, we reduced OPPS payment, for the applicable APCs, by the full or partial credit a hospital receives for a replaced device. Specifically, under this modified policy, hospitals are required to report on the claim the amount of the credit in the amount portion for value code ``FD'' (Credit Received from the Manufacturer for a Replaced Device) when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device. For CY 2014, we also limited the OPPS payment deduction for the applicable APCs to the total amount of the device offset when the ``FD'' value code appears on a claim. For CY 2015, we continued our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit and to use the three criteria established in the CY 2007 OPPS/ ASC final rule with comment period (71 FR 68072 through 68077) for determining the APCs to which our CY 2015 policy will apply (79 FR 66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), we finalized our policy to no longer specify a list of devices to which the OPPS payment adjustment for no cost/full credit and partial credit devices would apply and instead apply this APC payment adjustment to all replaced devices furnished in conjunction with a procedure assigned to a device-intensive APC when the hospital receives a credit for a replaced specified device that is 50 percent or greater than the cost of the device. b. Policy for No Cost/Full Credit and Partial Credit Devices In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659 through 79660), for CY 2017 and subsequent years, we finalized a policy to reduce OPPS payment for device-intensive procedures, by the full or partial credit a provider receives for a replaced device, when a hospital furnishes a specified device without cost or with a full or partial credit. Under our current policy, hospitals continue to be required to report on the claim the amount of the credit in the amount portion for value code ``FD'' when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), we adopted a policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit by the lesser of the device offset amount for the APC or the amount of the credit. We adopted this change in policy in the preamble of the CY 2014 OPPS/ASC final rule with comment period and discussed it in subregulatory guidance, including Chapter 4, section 61.3.6 of the Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86017 through 86018, 86302), we made conforming changes to our regulations at 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 [[Page 94222]] payment for no cost/full credit and partial credit devices for CY 2025.

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 2025 pass-through drugs and biologicals and their designated APCs are assigned status indicator ``G'' in Addenda A and B to this final rule with comment period (which are available on the CMS website).\131\ --------------------------------------------------------------------------- \131\ 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 \132\ and review process for drugs and biologicals 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. --------------------------------------------------------------------------- \132\ 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. Comment: One commenter expressed support for our policy of including radiopharmaceuticals as drugs eligible for pass-through status in the OPPS. In addition, this commenter supported our policy to allow drug pass-through status to expire on a quarterly basis to allow all drugs to have as close to three years of pass-through status as possible. Response: We appreciate the support of the commenter for our policies. Comment: Several commenters requested that we confirm that our proposal to pay separately for diagnostic radiopharmaceuticals with a per day cost greater than $630 that is described in section II.A.3.c of this final rule with comment period would not alter the qualification or payment methodology for those diagnostic radiopharmaceuticals applying for pass-through status under the OPPS. [[Page 94223]] Response: The commenter is correct. This policy, which we are finalizing in section II.A.3.c of this final rule with comment period, is separate from the policies described in this section of this final rule with comment period, which describes the payment methodology for products that qualify for OPPS pass-through status.

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

CY 2024 There are 25 drugs and biologicals for which pass-through payment status expires by December 31, 2024, as listed in Table 130. These drugs and biologicals will have received OPPS pass-through payment for 3 years during the period of April 1, 2021, through December 31, 2024. 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 \133\ 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), 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 $140 for CY 2025 for all drugs, biologicals, and therapeutic radiopharmaceuticals (for diagnostic radiopharmaceuticals we will provide separate payment when their per day cost exceeds the threshold we are adopting of $630). These policies are 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. --------------------------------------------------------------------------- \133\ We are finalizing our proposal to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold. This category of policy-packaged drugs that function as supplies in a diagnostic test or procedure includes diagnostic radiopharmaceuticals with per-day costs below the threshold for the applicable year. Please refer to Section II.A.3.c. for more information regarding this policy. --------------------------------------------------------------------------- BILLING CODE 4120-01-P [[Page 94224]] [GRAPHIC] [TIFF OMITTED] TR27NO24.163 [[Page 94225]] [GRAPHIC] [TIFF OMITTED] TR27NO24.164

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

Payment Status Expiring in CY 2025 We proposed to end pass-through payment status in CY 2025 for 28 drugs and biologicals. These drugs and biologicals, which were initially approved for pass-through payment status between April 1, 2022, and January 1, 2023, are listed in Table 131. The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that will end by December 31, 2025, are assigned status indicator ``G'' (Pass-Through Drugs and Biologicals) in Addenda A and B to this final rule with comment period (which are available on the CMS website).\134\ The APCs and HCPCS codes for these drugs and biologicals are assigned status indicator ``G'' only for the duration of their pass-through status. --------------------------------------------------------------------------- \134\ 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 2025, we are continuing our policy to pay for pass-through drugs and biologicals using the ASP methodology, meaning a [[Page 94226]] 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 2025. We note that, under the OPD fee schedule, separately payable drugs assigned to an APC are generally payable at ASP plus 6 percent. Therefore, a $0 pass-through payment amount would continue to be paid for pass-through drugs and biologicals under the CY 2025 OPPS 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 generally ASP plus 6 percent, is $0. In the case of policy-packaged drugs (which include the following: anesthesia drugs; drugs, biologicals, and radiopharmaceuticals \135\ 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), their pass-through payment amount will continue to be equal to a payment rate calculated using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP. This payment rate will generally continue to be ASP plus 6 percent for CY 2025, 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. We note that 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. --------------------------------------------------------------------------- \135\ We are finalizing our proposal to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold. This category of policy-packaged drugs that function as supplies in a diagnostic test or procedure includes diagnostic radiopharmaceuticals with per-day costs below the threshold for the applicable year. Please refer to section II.A.3.c. for more information regarding this policy. --------------------------------------------------------------------------- We will continue our policy to update pass-through payment rates on a quarterly basis on the CMS website during CY 2025 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 2025, consistent with our CY 2024 policy for diagnostic and therapeutic radiopharmaceuticals, we would 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 2025, we would 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 is generally ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we would continue to 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 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 final rule with comment period. If WAC information also is not available, we would continue to provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP. We refer readers to Table 131 below for the list of drugs and biologicals with pass-through payment status expiring during CY 2025. BILLING CODE 4120-01-P [[Page 94227]] [GRAPHIC] [TIFF OMITTED] TR27NO24.165 [[Page 94228]] [GRAPHIC] [TIFF OMITTED] TR27NO24.166 [[Page 94229]] [GRAPHIC] [TIFF OMITTED] TR27NO24.167 BILLING CODE 4120-01-C We did not receive any public comments on our proposal and therefore, we are finalizing our proposal to end pass-through payment status in CY 2025 for 28 drugs and biologicals.

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

Payment Status Continuing Through CY 2025 We proposed to continue pass-through payment status in CY 2025 for 80 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status with effective dates beginning between April 1, 2023, and January 1, 2025, are listed in Table 132. The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that would continue after December 31, 2025, are assigned status indicator ``G'' in Addenda A and B to this final rule with comment period (which are available on the CMS website).\136\ --------------------------------------------------------------------------- \136\ 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 2025, we are continuing our policy 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 2025. We will continue with our policy of paying a $0 pass-through payment amount for pass-through drugs and biologicals that are not policy-packaged under the CY 2025 OPPS, 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 \137\ 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), their pass-through payment amount would continue to 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 2025, minus a payment offset for any predecessor drug products contributing to the pass-through payment. We note if not for the pass- through payment status of these policy-packaged products, payment for these products would be [[Page 94230]] packaged into the associated procedure and therefore, there are associated OPD fee schedule amounts for them. --------------------------------------------------------------------------- \137\ We are finalizing our proposal to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold. This category of policy-packaged drugs that function as supplies in a diagnostic test or procedure includes diagnostic radiopharmaceuticals with per-day costs below the threshold for the applicable year. Please refer to section II.A.3.c. for more information regarding this policy. --------------------------------------------------------------------------- We are continuing our policy to update pass-through payment rates on a quarterly basis on our website during CY 2025 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 2025, consistent with our CY 2024 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to continue our policy 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 2025, 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 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 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. The drugs and biologicals that would have pass-through payment status expire after December 31, 2025, are shown in Table 132. BILLING CODE 4120-01-P [[Page 94231]] [GRAPHIC] [TIFF OMITTED] TR27NO24.168 [[Page 94232]] [GRAPHIC] [TIFF OMITTED] TR27NO24.169 [[Page 94233]] [GRAPHIC] [TIFF OMITTED] TR27NO24.170 [[Page 94234]] [GRAPHIC] [TIFF OMITTED] TR27NO24.171 [[Page 94235]] [GRAPHIC] [TIFF OMITTED] TR27NO24.172 [[Page 94236]] [GRAPHIC] [TIFF OMITTED] TR27NO24.173 [[Page 94237]] BILLING CODE 4120-01-C We did not receive any public comments on our proposal to continue pass-through payment status in CY 2025 for 80 drugs and biologicals and we are finalizing it as proposed. Additionally, we are finalizing our proposal to continue our policy to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology.

1. Criteria for Packaging Payment for Drugs, Biologicals, and

Radiopharmaceuticals a. Packaging Threshold In accordance with section 1833(t)(16)(B) of the Act, the threshold for establishing separate APCs for payment of drugs and biologicals was set to $50 per administration during CYs 2005 and 2006. In CY 2007, we used the four-quarter moving average Producer Price Index (PPI) levels for Pharmaceutical Preparations (Prescription) to trend the $50 threshold forward from the third quarter of CY 2005 (when the Pub. L. 108-173 mandated threshold became effective) to the third quarter of CY 2007. We then rounded the resulting dollar amount to the nearest $5 increment in order to determine the CY 2007 threshold amount of $55. Using the same methodology as that used in CY 2007 (which is discussed in more detail in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68085 through 68086)), we set the packaging threshold for establishing separate APCs for drugs and biologicals at $135 for CY 2024 (88 FR 81776 through 81777). Following the CY 2007 methodology, for the CY 2025 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 2025 and round the resulting dollar amount ($140.81) 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 IGI. 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 2025 of $140 for drugs, biologicals, and therapeutic radiopharmaceuticals. We proposed in section II.A.3.c of the CY 2025 OPPS/ASC proposed rule (89 FR 59213 through 59222) to pay separately for diagnostic radiopharmaceuticals with a per-day cost above the proposed packaging threshold for CY 2025 of $630. We also proposed that starting in CY 2026 and subsequent years, we would update this threshold by the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from IHS Global, Inc (IGI). For the diagnostic radiopharmaceutical packaging threshold, we proposed to use 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)) to calculate the update to the OPPS drug packaging threshold. Specifically, we proposed that starting for the CY 2026 rulemaking, we would use the most recently available four quarter moving average PPI levels to trend the final CY 2025 threshold forward from the third quarter of CY 2024 to the third quarter of CY 2025 and round the resulting dollar amount to the nearest $5 increment. We refer readers to section II.A.3.c.(4) of the CY 2025 OPPS/ASC proposed rule for information regarding our proposal to update the proposed diagnostic radiopharmaceutical packaging threshold in future years. We refer readers to section II.A.3.c of this final rule with comment period for additional details on our proposal to provide for separate payment for certain diagnostic radiopharmaceuticals, the comments we received on the proposal, and our final policy regarding separate payment for certain diagnostic radiopharmaceuticals in CY 2025. We received no comments on our proposal to increase the drug packaging threshold to $140. We are finalizing our proposal without modification to apply a drug packaging threshold of $140 for CY 2025. b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs, Certain Biologicals, and Certain Radiopharmaceuticals Under the Cost Thresholds To determine the proposed CY 2025 packaging status for all nonpass- through drugs, biologicals, diagnostic and therapeutic radiopharmaceuticals 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 2023 and were paid (via packaged or separate payment) under the OPPS. We used data from CY 2023 claims processed through December 31, 2023, 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 2025: anesthesia drugs; drugs, biologicals, and contrast agents and other drugs 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. Consistent with our policy described in section V.B.5, in situations where 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. In order to calculate the per day costs for drugs, biologicals, diagnostic radiopharmaceuticals, and therapeutic radiopharmaceuticals to determine their proposed packaging status in CY 2025, we used the methodology that was described in detail in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and finalized in the CY 2006 OPPS final rule with comment period (70 FR 68636 through 68638). For each drug and biological HCPCS code, we used an estimated payment rate 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 2025, as discussed in more detail in section V.A.1 of this final rule with comment period) to calculate the CY 2025 proposed rule per day costs. We used the manufacturer-submitted ASP data from the fourth quarter of CY 2023 (data that were used for payment purposes in the physician's office setting, effective April 1, 2024) to determine the CY 2025 OPPS/ASC proposed rule per day cost. As is our standard methodology, for CY 2025, we proposed to use payment rates based on the ASP data from the fourth quarter of CY 2023 for budget neutrality estimates, packaging determinations, impact analyses, and completion of Addenda A and B to the [[Page 94238]] CY 2025 OPPS/ASC 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 2025 OPPS/ASC proposed rule. These data also are the basis for drug payments in the physician's office setting, effective April 1, 2024. Exceptions to our standard methodology include: For therapeutic radiopharmaceuticals that do not have pass-through status as of October 1, 2024, and do not have an ASP-based payment rate, we did not use a payment rate based on WAC or AWP for those items, consistent with our policy described in section V.B.3.a of the CY 2025 OPPS/ASC proposed rule. We used their mean unit cost derived from the CY 2023 hospital claims data to determine their per day cost. For diagnostic radiopharmaceuticals that do not have pass- through status as of October 1, 2024, we used their mean unit cost derived from the CY 2023 hospital claims data to determine their per day cost. We did not use an ASP-based, WAC-based, or AWP-based payment rate for those items unless there was no mean unit cost reported for the product, consistent with our proposed policy described in section V.B.3.b of the CY 2025 OPPS/ASC proposed rule. For items other than diagnostic or therapeutic radiopharmaceuticals that did not have either an ASP-based payment rate, a payment rate based on WAC, or a payment rate based on AWP, we used mean unit cost of the items derived from the CY 2023 hospital claims data to determine their per day cost. We proposed to package drugs, biologicals, and therapeutic radiopharmaceuticals 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. For diagnostic radiopharmaceuticals, we propose to package those items with a per day cost less than or equal to $630 and identify items with a per day cost greater than $630 as separately payable. Consistent with our past practice, we cross-walked historical OPPS claims data from the CY 2023 HCPCS codes that were reported to the CY 2023 HCPCS codes that we display in Addendum B to the CY 2025 OPPS/ASC proposed rule (which is available on the CMS website) \138\ for proposed payment in CY 2025. --------------------------------------------------------------------------- \138\ 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, biologicals, and radiopharmaceuticals in the CY 2025 OPPS/ASC proposed rule, we proposed to use ASP data from the fourth quarter of CY 2023, 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, 2024, along with updated hospital claims data from CY 2023. We note that we also proposed to use these data for budget neutrality estimates and impact analyses for the CY 2025 OPPS/ASC proposed rule. Payment rates for HCPCS codes for separately payable drugs and biologicals included in Addenda A and B of this CY 2025 OPPS/ASC final rule with comment period are based on ASP data from the second quarter of CY 2024. These data are the basis for calculating payment rates for drugs and biologicals in the physician's office setting using the ASP methodology, effective October 1, 2024. These payment rates would then be updated in the January 2025 OPPS update, based on the most recent ASP data to be used for physicians' office and OPPS payment as of January 1, 2025. For drugs and biologicals that do not currently have a payment rate based on ASP, WAC, or AWP, for therapeutic radiopharmaceuticals that do not currently have an ASP payment rate, and for all diagnostic radiopharmaceuticals, we calculated their mean unit cost from all of the CY 2023 claims data and updated cost report information available for this final rule with comment period to determine their final per day cost. All the comments we received regarding calculating per-day costs of drugs, biologicals, and radiopharmaceuticals pertained to our proposal to provide for separate payment for certain diagnostic radiopharmaceuticals for CY 2025. We address comments on the proposal in section II.A.3.c., where we are finalizing our proposal regarding calculating the per-day cost of diagnostic radiopharmaceuticals for purposes of determining eligibility for separate payment as proposed. We refer readers to section II.A.3.c of this final rule with comment period for a summary of the comments we received, our responses, and our final policy regarding separate payment for certain diagnostic radiopharmaceuticals in CY 2025. After consideration of the public comments we received, we are finalizing our proposal regarding the calculation of per day costs of drugs, biologicals, therapeutic radiopharmaceuticals, and diagnostic radiopharmaceuticals without modification. Because we use updated data to determine the packaging status of HCPCS codes for drugs, biologicals and radiopharmaceuticals for this final rule with comment period, the packaging status of some HCPCS codes for drugs, biologicals, and radiopharmaceuticals in this final rule with comment period may differ from the same HCPCS codes' packaging status determined based on the data used for proposed rule. Under such circumstances, we propose 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 2025 OPPS drug packaging threshold and the drug's payment status (packaged or separately payable) in CY 2024. 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 2025 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, biologicals, and radiopharmaceuticals that were paid separately in CY 2024 and that are proposed for separate payment in CY 2025, and that then have per day costs equal to or less than the CY 2025 final rule drug packaging threshold or diagnostic radiopharmaceutical packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2025 final rule, would continue to receive separate payment in CY 2025. HCPCS codes for drugs, biologicals, and radiopharmaceuticals that were packaged in CY 2024 and that are proposed for separate payment in CY 2025, and that then have per day costs [[Page 94239]] equal to or less than the CY 2025 final rule drug packaging threshold or diagnostic radiopharmaceutical packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2025 final rule, would remain packaged in CY 2025. HCPCS codes for drugs, biologicals, and radiopharmaceuticals for which we proposed packaged payment in CY 2025 but that then have per-day costs greater than the CY 2025 final rule drug packaging threshold or diagnostic radiopharmaceutical packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2025 final rule, would receive separate payment in CY 2025. We did not receive any public comments on our proposal and are finalizing it without modification. 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,\139\ contrast agents, and pharmacologic stress agents) (Sec. 419.2(b)(15)); and --------------------------------------------------------------------------- \139\ In this rule we adopt a policy to pay separately beginning in CY 2025 for diagnostic radiopharmaceuticals with per-day costs above a threshold. This category of policy-packaged drugs that function as supplies in a diagnostic test or procedure would include diagnostic radiopharmaceuticals with per-day costs at or below the threshold for the applicable year. Please refer to section II.A.3.c. for more information regarding this policy. --------------------------------------------------------------------------- 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 the policy 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 that have a per day cost below the finalized diagnostic radiopharmaceutical packaging threshold that we discuss in section II.A.3 of this CY 2025 OPPS/ASC final rule,\140\ 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). --------------------------------------------------------------------------- \140\ In section II.A.3 of this rule, we adopt a policy to pay separately for diagnostic radiopharmaceuticals with per-day costs above a d threshold. This category of policy-packaged drugs that function as supplies in a diagnostic test or procedure includes diagnostic radiopharmaceuticals with per-day costs below the threshold for the applicable year. Please refer to section II.A.3.c. for more information regarding this policy. --------------------------------------------------------------------------- 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. The commenter believes that after more than ten years without the radiolabeled product edits in place providers may not be as knowledgeable about ensuring radiolabeled products are reported with nuclear medicine procedures. The commenter believes reinstating the edits will improve billing accuracy. 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 through 60491), we finalized a policy to make a single packaging determination for a drug, rather than an individual HCPCS code, when a drug has multiple HCPCS codes describing different dosages because we believe that adopting the standard HCPCS code-specific packaging determinations for these codes could lead to inappropriate payment incentives for hospitals to report certain HCPCS codes instead of others. We continue to believe that making packaging determinations on a drug-specific basis eliminates payment incentives for hospitals to report certain HCPCS codes for drugs and allows hospitals flexibility in choosing to report all HCPCS codes for different dosages of the same drug or only the lowest dosage HCPCS code. Therefore, we proposed to continue our policy to make packaging determinations on a drug-specific basis, rather than a HCPCS code-specific basis, for those HCPCS codes that describe the same drug or biological but different dosages in CY 2025. 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 2023 claims data and our pricing information, which is based on the ASP methodology, [[Page 94240]] 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 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 2025 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 2023 claims data to make the proposed packaging determinations for them: HCPCS code C9257 (Injection, bevacizumab, 0.25 mg); HCPCS code J3471 (injection, hyaluronidase, ovine, preservative free, per 1 usp unit (up to 999 usp units)); 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 2025 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 2025 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 2025 is displayed in Table 133. [GRAPHIC] [TIFF OMITTED] TR27NO24.174 We proposed that 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 2025 would also apply to diagnostic radiopharmaceuticals. In order to propose a packaging determination that is consistent across all HCPCS codes that describe different dosages of the same diagnostic radiopharmaceutical, we would aggregate our CY 2023 claims data across all of the HCPCS codes that describe each distinct diagnostic radiopharmaceutical in order to determine the mean units per day of the diagnostic radiopharmaceutical in terms of the HCPCS code with the lowest dosage descriptor. We would then analyze the aggregate per day cost of the [[Page 94241]] diagnostic radiopharmaceutical to determine if the per day cost is less than or equal to the proposed CY 2025 diagnostic radiopharmaceutical packaging threshold of $630 (in which case all HCPCS codes for the same diagnostic radiopharmaceutical would be packaged) or greater than the proposed CY 2025 diagnostic radiopharmaceutical packaging threshold of $630 (in which case all HCPCS codes for the same diagnostic radiopharmaceutical would be separately payable). There are currently no diagnostic radiopharmaceuticals that this policy would apply to. We did not receive any public comments on our proposal and are finalizing it 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 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 considering 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 consider 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 consider the findings of the MedPAC study.\141\ --------------------------------------------------------------------------- \141\ 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 2024. 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 to 59666), we finalized a policy that, effective January 1, 2019, WAC-based payments for Part B drugs made under section 1847A(c)(4) of the Act will utilize a 3- percent add-on in place of the 6 percent add-on that was being used according to our policy in effect as of CY 2018. For the CY 2019 OPPS, we followed the same policy finalized in the CY 2019 PFS final rule (83 FR 59661 to 59666). 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 [[Page 94242]] 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 section 1847A(c)(4). We refer readers to the CY 2019 PFS final rule (83 FR 59661 to 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. Separately payable drug, biological, and radiopharmaceutical payment rates are listed in Addenda A and B to the CY 2025 OPPS/ASC proposed rule (available on the CMS website).\142\ These addenda provide the proposed CY 2025 payment rates based on the ASP methodology for separately payable nonpass-through drugs, biologicals, and radiopharmaceuticals and the ASP methodology for pass-through drugs, biologicals, and radiopharmaceuticals. Except for proposed payment rates for radiopharmaceuticals, these rates are based either on ASP information that is the basis for calculating payment rates for drugs and biologicals in the physician's office setting effective April 1, 2024, or WAC, AWP, or mean unit cost from CY 2023 claims data and updated cost report information available for the CY 2025 OPPS/ASC proposed rule. For nonpass-through therapeutic radiopharmaceuticals, payment rates are based on ASP data or mean unit cost. We proposed in section II.A.3.c.(5) to pay separately at mean unit cost for diagnostic radiopharmaceuticals with per day costs above the proposed threshold; the payment rates proposed for qualifying diagnostic radiopharmaceuticals are entirely mean unit cost. In general, these published proposed payment rates are not the same as the actual January 2025 payment rates. This is because payment rates for drugs, biologicals, and therapeutic radiopharmaceuticals with ASP information for January 2025 will be determined through the standard quarterly process where ASP data submitted by manufacturers for the third quarter of CY 2024 (July 1, 2024, through September 30, 2024) will be used to set the payment rates that are released for the quarter beginning in January 2025 in December 2024. In addition, in Addenda A and B to the CY 2025 OPPS/ASC proposed rule, payment rates for drugs, biologicals, and therapeutic radiopharmaceuticals for which there was no ASP, WAC, or AWP information available for April 2024, as well as all separately payable diagnostic radiopharmaceuticals, are based on mean unit cost in the available CY 2023 claims data. If new pricing information becomes available for payment for the quarter beginning in January 2025, we will price payment for these drugs, biologicals, therapeutic radiopharmaceuticals, and diagnostic radiopharmaceuticals based on their newly available information. Finally, there may be drugs, biologicals and therapeutic radiopharmaceuticals that have ASP, WAC, or AWP information available for the proposed rule (reflecting April 2024 ASP data) that do not have ASP, WAC, or AWP information available for the quarter beginning in January 2025. These drugs, biologicals and therapeutic radiopharmaceuticals would then be paid based on mean unit cost data derived from CY 2023 hospital claims. Therefore, the proposed payment rates listed in Addenda A and B to the CY 2025 OPPS/ASC proposed rule are not for January 2025 payment purposes and are only illustrative of the CY 2025 OPPS payment methodology using the most recently available information at the time of issuance of the CY 2025 OPPS/ASC proposed rule. --------------------------------------------------------------------------- \142\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- We note that payment amounts for most drugs separately payable under Medicare Part B are determined using the methodology in section 1847A of the Act, and in many cases, payment is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on. For CY 2025, we proposed to clarify that only ASP data or, if ASP data are not available, mean unit cost data, would be used to set payment rates for separately payable nonpass-through therapeutic radiopharmaceuticals under the OPPS as described further in section V.B.3.a of the proposed rule. We proposed for CY 2025 to use mean unit cost data to set payment rates for separately payable nonpass-through diagnostic radiopharmaceuticals for which we propose separate payment because their cost exceeds the per-day threshold. Otherwise, we are not proposing any changes to our policies for payment for separately payable drugs and biologicals; and we propose to continue 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). Most of the comments we received regarding our proposed policy for separately payable drugs, biologicals, and radiopharmaceuticals pertained to our proposal to pay separately for certain diagnostic radiopharmaceuticals in CY 2025. We refer readers to section II.A.3.c of this final rule with comment period for a summary of the comments we received, our responses to those comments, and our final policy for separate payment for certain diagnostic radiopharmaceuticals in CY 2025. Comment: Multiple commenters expressed their approval for our proposal to pay separately payable for drugs and biologicals, but not radiopharmaceuticals, at ASP plus 6 percent. One commenter supported our proposal to continue to pay for new non-pass-through Part B drugs and biologicals during an initial sales period (two quarters) for which ASP pricing data are not yet available at a rate of wholesale acquisition cost (WAC) plus 3%. The commenter also supported our proposal that if ASP and WAC data are unavailable, Medicare would pay 95% of the average wholesale price (AWP). Response: We appreciate the commenters' support for our policies. After consideration of the public comments we received, we are finalizing without modification our proposals regarding the payment methodology for separately payable drugs, biologicals, and radiopharmaceuticals. b. Biosimilar Biological Products For CY 2024, we finalized the exception of biosimilars from the OPPS threshold packaging policy when their reference products are separately paid (88 FR 81783 through 81785). This policy allows for separate payment for biosimilars even if the biosimilar's per-day cost is below the packaging threshold if the biosimilar's reference product is separately paid. This policy removes the financial incentive to use a more expensive separately payable biological and promotes biosimilar use as a lower cost alternative to higher cost reference products. Payment rates for drugs and biologicals (including biosimilars) under Medicare Part B are determined using the methodology in section 1847A of the Act, and in many cases, payment is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on. Additionally, Section 11403 of the IRA requires that a qualifying [[Page 94243]] 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 (88 FR 81783). These payment rates are published in the quarterly release of Addendum B or ASP pricing files. c. Invoice Drug Pricing for CY 2026 In recent years there has been an increasing number of drug and biological HCPCS codes for which ASP, WAC, AWP, and mean unit cost information is not available. These are often HCPCS codes for new drugs or biologicals that have been approved for marketing, but for which the manufacturer does not have sales data, and WAC, AWP, and mean unit cost information is not available. As a result, we are unable to assign a payable status indicator to these drugs or biologicals due to a lack of payment data. The numbers of drug and biological HCPCS codes without payment rates from Addendum B for the CY 2022 through CY 2024 OPPS/ASC final rules with comment period are listed in Table 134. [GRAPHIC] [TIFF OMITTED] TR27NO24.175 To provide appropriate payment rates for these drugs and biologicals without pricing data, we proposed to adopt an invoice pricing policy beginning in CY 2026. Because this policy necessitates significant operational changes to implement, we proposed to implement it beginning in CY 2026, rather than CY 2025. For CY 2025, we proposed that the affected drugs and biologicals would continue to be assigned a non-payable status indicator until we implement our invoice pricing policy, if adopted. We believe invoice pricing is appropriate for use under the OPPS because it provides temporary drug or biological cost information to generate a representative payment rate for a drug or biological and supports the utilization of new drug or biological HCPCS codes. Otherwise, the new drug and biological HCPCS codes would not receive payment under the OPPS, which would discourage their use by providers. Currently, the Physician Fee Schedule utilizes invoice pricing for drugs and biologicals when other types of pricing information are not available. We proposed that, for separately payable drugs or biologicals for which CMS does not provide a payment rate in Addendum B, which would indicate to MACs that CMS does not have pricing information (specifically, that ASP, WAC, AWP, and mean unit cost information is not available to determine a payment rate), MACs would calculate the payment based on provider invoices. The drug or biological invoice cost would be the net acquisition cost minus any rebates, chargebacks, or post-sale concessions. Before calculating an invoice-based payment amount, MACs would use the provider invoice to determine that: (a) the drug is not policy packaged; and (b) the per-day cost of the drug, biological, therapeutic radiopharmaceutical or diagnostic radiopharmaceutical is above the threshold packaging amount, as applicable. If both conditions are met, we proposed that MACs would use the provider invoice amount to set a payment rate for the separately payable drug, biological, or radiopharmaceutical until its payment amount becomes available to CMS. We generally would expect invoice pricing to be temporary, lasting two to three quarters, for qualified drugs required to report ASP under 1847A of the Act. For drug products that are not required to report ASP under 1847A of the Act (i.e., diagnostic pharmaceuticals), we proposed that invoice pricing may be used longer term until a MUC can be calculated. We proposed that we would not begin using invoice pricing for drugs, biologicals, and radiopharmaceuticals without pricing information until CY 2026 because we would need to make technical updates to outpatient hospital claims to allow the hospitals to report drug invoice pricing. We noted that we intended to work with the National Uniform Billing Committee (NUBC) in order to create a value code that would allow for the reporting of invoice prices of drugs, biologicals, and radiopharmaceuticals for purposes of this policy. Comment: Some commenters opposed our proposed drug invoice pricing policy, citing their concerns that the operational burden this policy would place on providers may lead to providers forgoing reimbursement. These commenters believe it is not feasible to provide these invoices because it would require considerable time and effort to track, document, and submit the necessary information because of the varied arrangements through which hospitals acquire drugs, as well as pricing variability and discount structures. Furthermore, commenters have concerns with using acquisition cost minus any rebates, chargebacks, or post-sale concessions because rebates are often made months after sale and commenters believed it would impede cash flow to hold claims for months until the rebate process has completed. These commenters urged CMS to work with manufacturers to report ASP and other pricing data in a timely [[Page 94244]] manner so that CMS will have up-to-date cost information. Alternatively, commenters suggested that CMS use WAC or AWP, as it does for other drugs without ASP data. WAC data is typically available in advance of ASP data and soon after a drug is on the market. Response: We appreciate the feedback from the commenters. We note that this policy would only apply to drugs where ASP, WAC, AWP, or mean unit cost information is not available. We will continue to examine the operational effect of this policy. We note that this policy has been in effect under the PFS and there is no evidence that healthcare professionals paid under the PFS forgo reimbursement for drugs paid at invoice prices because of administrative burden. We also note that the proposed effective date for this policy is January 1, 2026, which would allow providers a year to prepare for any operational changes. Comment: Some commenters opposed the proposed drug invoice pricing policy, citing concerns with participating 340B providers' disclosure of their 340B drug acquisition cost, which the commenters stated is proprietary data. Some commenters believed that we should exempt 340B providers from the proposed policy if we move forward with the proposal. Response: We understand providers' concerns regarding 340B drug acquisition cost data, and we note that it is not the intention of this policy to collect 340B drug acquisition cost data. Our policy goal is to provide temporary payment for these new drugs until their ASP, WAC, or AWP becomes available and would likely affect only a few new drugs each quarter. Invoice-based payment will result in collection of drug acquisition cost data for only a few drugs for only a short period of time, and only if the provider wants to submit the invoice in order to receive payment for the drug. We also note that CMS does not disclose proprietary data; we only disclose summarized population drug payment data in mean unit cost for ratesetting purposes. Comment: Some commenters supported our proposal to permit invoice pricing or suggested we permit the MACs to pay at WAC or continue our current approach to make retroactive adjustments to payment status and to update quarterly payment files as new data becomes available. Response: We thank the commenters who supported our proposal to allow invoice pricing. We believe the invoice pricing policy we are finalizing in this rule is a more appropriate and efficient way for us to pay for these drugs than our current approach of making retroactive adjustments. We note that this invoice pricing proposal only applies when data from a number of other payment methodologies, including WAC, are not available. After consideration of the public comments we received, we are finalizing our proposal without modification for CY 2026 to allow MACs to use the provider invoice amount to set a payment rate for a separately payable drug, biological, or radiopharmaceutical until its payment amount becomes available and CMS provides a payment rate in Addendum B. HCPCS code(s) with missing payment rate in Addendum B for a separately payable drug, biological, or radiopharmaceutical will indicate to MACs that CMS does not have pricing information (specifically, that ASP, WAC, AWP, and mean unit cost information is not available to determine a payment rate) for a product, and MACs would then calculate the payment for the product based on provider invoices.

3. Payment Policy for Radiopharmaceuticals

For a complete history of the OPPS payment policy for 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). a. 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 will continue to apply in CY 2025. Specifically, our policy of paying for separately payable pass- through therapeutic radiopharmaceuticals under the ASP methodology adopted for separately payable drugs and biologicals described in section V.A.1 of the proposed rule will continue to apply for CY 2025. We will pay for separately payable nonpass-through therapeutic radiopharmaceuticals through a modified ASP methodology where we pay at ASP plus 6 percent if ASP data are available. However, if ASP information is unavailable for a separately payable nonpass-through therapeutic radiopharmaceutical, we will continue to base the payment rate on mean unit cost data derived from hospital claims. Our policy not to use WAC or AWP to establish payment for separately payable nonpass-through therapeutic radiopharmaceuticals if ASP is not available will continue for CY 2025. We explained our rationale in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524 through 60525) when we first adopted our policy to apply the principles of separately payable drug pricing to therapeutic radiopharmaceuticals. We note that in the CY 2024 OPPS final rule with comment period (88 FR 81786), we stated that the ASP payment methodology for separately payable nonpass-through therapeutic radiopharmaceuticals did allow for using WAC or AWP to establish a payment rate for these items. This was an error and conflicted with the policy implemented in CY 2010 and continued in subsequent years. The statement also conflicted with the policy that we proposed and finalized for CY 2023 and subsequent years in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71969). The policy implemented in CY 2010 regarding ASP payment for separately payable nonpass-through therapeutic radiopharmaceuticals remains our intended policy. Therefore, we will pay for all nonpass-through separately payable therapeutic radiopharmaceuticals at ASP plus 6 percent based on the statutory default described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full discussion of ASP-based payment for therapeutic radiopharmaceuticals, we refer readers to the CY 2010 OPPS/ASC final rule with comment period (74 FR 60520 through 60521). We will rely on CY 2023 mean unit cost data derived from hospital claims data for payment rates for separately payable nonpass- through therapeutic radiopharmaceuticals for which ASP data are unavailable and update the payment rates for these products according to our usual process for updating the payment rates for separately payable drugs and biologicals on a quarterly basis if updated ASP information becomes available. The proposed CY 2025 payment rates for separately payable nonpass- through therapeutic radiopharmaceuticals were included in Addenda A and B of the CY 2025 OPPS/ASC proposed rule (which are available on the CMS website).\143\ --------------------------------------------------------------------------- \143\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- The final CY 2025 payment rates for separately payable nonpass- through therapeutic radiopharmaceuticals are included in Addenda A and B of this [[Page 94245]] final rule with comment period (which are available on the CMS website).\144\ --------------------------------------------------------------------------- \144\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- b. Payment Policy for Diagnostic Radiopharmaceuticals For CY 2025, we proposed, as described in section II.A.3 of the CY 2025 OPPS/ASC proposed rule, to pay separately for diagnostic radiopharmaceuticals with a per day cost above our proposed diagnostic radiopharmaceutical packaging threshold (proposed at $630 for CY 2025). We proposed to pay for pass-through diagnostic radiopharmaceuticals based on ASP, WAC, and AWP. We proposed to base the payment rate for separately payable nonpass-through diagnostic radiopharmaceuticals on mean unit cost data derived from hospital claims. As discussed in section II.A.3.c.(5), we did not propose to use ASP data when mean unit cost data are available for a separately payable nonpass-through diagnostic radiopharmaceutical, but we sought comment on using ASP for setting the payment rate for nonpass-through diagnostic radiopharmaceuticals in the future. Additionally, we did not propose to use WAC or AWP as a basis for payment for nonpass-through diagnostic radiopharmaceuticals when mean unit cost data derived from hospital claims is available. We believe that paying for nonpass-through diagnostic radiopharmaceuticals using mean unit cost would appropriately pay for the average price of a nonpass-through separately payable diagnostic radiopharmaceutical. In our view, MUC is an appropriate proxy for the average price for a diagnostic radiopharmaceutical for a given year, as it is calculated based on the average costs for a particular year and is directly reflective of the actual cost data that hospitals submit to CMS. As we stated in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60523), we believe that WAC or AWP is not an appropriate proxy to provide OPPS payment for radiopharmaceuticals because these pricing methodologies do not include discounts. Specifically, the absence of appropriate ASP reporting could result in payment for a separately payable diagnostic radiopharmaceutical based on WAC or AWP indefinitely, a result which we believe would be inappropriate, as these pricing metrics do not capture all of the pricing discounts that may be reflected in the ASP. Additionally, we proposed to base the initial payment for new diagnostic radiopharmaceuticals with HCPCS codes that do not have pass- through status or claims data on ASP, and on the WAC for these products if ASP data for these diagnostic radiopharmaceuticals are not available. If the WAC also is unavailable, we proposed to make payment for new diagnostic radiopharmaceuticals at 95 percent of the products' most recent AWP. We believe the volume of products in this category will typically be very low; however, in these rare situations, we believe it would be appropriate to use ASP until a MUC is established for new diagnostic radiopharmaceuticals with HCPCS codes that do not have passthrough status or claims data. Please refer to section II.A.3.c of this final rule with comment period for information regarding our payment policies for diagnostic radiopharmaceuticals, including our policy to pay separately for diagnostic radiopharmaceuticals above a certain cost threshold, comments we received, and our final policies for CY 2025. The final CY 2025 payment rates for separately payable nonpass-through diagnostic radiopharmaceuticals are included in Addenda A and B of this final rule with comment period (which are available on the CMS website).\145\ --------------------------------------------------------------------------- \145\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. ---------------------------------------------------------------------------

4. Payment for Blood Clotting Factors

For CY 2025, we proposed to continue our established policy to provide payment for blood clotting factors using the same methodology as other separately payable drugs and biologicals under the OPPS and to continue to pay a furnishing fee. For a full discussion of our established payment policy for blood clotting factors, please refer to the CY 2023 OPPS/ASC final rule with comment period (87 FR 71969 through 71970). 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 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 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 proposal and are finalizing it without modification.

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 2025, 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 through 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 did not receive any public comments on our proposal and are finalizing it without modification.

6. Requirement in the CY 2025 Physician Fee Schedule 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 re-designate 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. We explained in the CY 2025 OPPS/ASC proposed rule that the CY 2025 PFS proposed rule included proposals related to the discarded drug refund policy, including proposals that may impact hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs). Similar to our CY 2023 and CY 2024 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 CY 2025 PFS proposed rule for a full description of the proposed policy. Interested parties were asked to submit comments on any proposals to implement section 90004 of the Infrastructure Act to the CY 2025 PFS [[Page 94246]] proposed rule. We noted that public comments on these proposals would be addressed in the CY 2025 PFS final rule with comment period. 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 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 codes 15271, 15273, 15275, or 15277 are used to calculate the geometric mean costs for procedures assigned to the high-cost group, and claims billed with HCPCS codes C5271, C5273, C5275, 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 2024, the payment rate for APC 5053 (Level 3 Skin Procedures) was $599.02, the payment rate for APC 5054 (Level 4 Skin Procedures) was $1,739.33, and the payment rate for APC 5055 (Level 5 Skin Procedures) was $3,421.82. This information is also available in Addenda A and B of the CY 2024 final rule with comment period (88 FR 81540) (the 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. 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 through 70435). Beginning in CY 2016, 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 to 58968); and the CY 2020 OPPS/ASC final rule with comment period (84 FR 61328 to 61331). b. Packaged Skin Substitutes for CY 2025 For CY 2025, 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 [[Page 94247]] 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 2023 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' PDCs). The proposed CY 2025 MUC threshold is $50 per cm\2\ (rounded to the nearest $1) and the proposed CY 2025 PDC threshold is $840 (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 2025, as we did for CY 2024, 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 propose 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 propose that any skin substitute product that is assigned to the high-cost group in CY 2024 would be assigned to the high-cost group for CY 2025, regardless of whether it exceeds or falls below the CY 2025 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 2025, 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 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 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). The CY 2025 OPPS/ASC proposed rule (89 FR 59373 through 593777) includes the proposed CY 2025 cost category assignment for each skin substitute product. 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 claimed 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. One of the commenters cited a recent study finding that between 2014 and 2019 treatment for larger area wounds has shifted from the outpatient hospital setting to the physician office setting where payment for individual services better reflects their cost because of the fee-for-service structure of physician payment. 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 commenters explained that 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 believe that when more than 25 cm\2\ of product is used for a service that the cost of product used in excess of 25 cm\2\ should be paid at cost by making the add-on code reporting the additional product separately payable in addition to the cost to apply the graft skin substitute product. Commenters believe always packaging the cost of graft skin substitute products into the cost of the associated application procedures no matter how much product is used is an indiscriminate form of payment that, according to the commenters, does not promote payment accuracy or patient care and may raise health equity concerns because providers are not compensated for the cost of using more than 25 cm\2\ of graft skin substitute product for a wound. One commenter asserted that providers rarely experience a financial gain from performing a graft skin substitute application procedure and, in most cases, providers experience a financial loss when performing graft skin substitute procedures. Response: We do not agree that we should pay separately for graft skin substitute add-on codes under the OPPS. The OPPS is a prospective payment system rather than a fee-for-service payment system. That means that we generally attempt to make one payment for all 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 average 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 [[Page 94248]] 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. Despite the text of the descriptors for CPT codes 15271 and 15275 and HCPCS codes C5271 and C5275, the geometric mean service cost of these procedures is likely not the cost of the procedures plus 25 cm\2\ of graft skin substitute product. Instead, the geometric mean service cost should reflect the geometric mean of the cost of the graft skin substitute application procedure plus the cost of graft skin substitute product for all procedures where less than 100 cm\2\ of product is used. The commenters claimed that most graft skin substitute procedures use substantially more than 25 cm\2\ of graft skin substitute product. Therefore, the geometric mean cost of these procedures would account for the average amount of product used by providers over 25 cm\2\. A prospective payment system like the OPPS is designed to pay providers the geometric mean 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 40 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 geometric mean 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 the need for cost efficiencies in other procedures administered in the outpatient hospital setting. Packaging product costs with the costs of the associated procedures is not an indiscriminate method of paying for medical care nor is it a system where providers lose money on most of the procedures they administer and rarely receive more payment than the cost of the procedure. Prospective payment methodology helps to control the cost of hospital care, while incentivizing providers to provide quality care in an efficient manner. Packaging add-on codes to have a uniform distribution of costs for individual procedure is critical for prospective payment. Therefore, we believe that add-on codes, including the add-on codes for the administration 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 codes 15273 and 15277) would be in the same APC. One commenter expressed their concern that CMS seems to not understand that provider resources and graft skin substitute product used for the procedures described by CPT codes 15273 and 15277 and for the procedures described by HCPCS codes C5273 and C5277 are the same, and that CPT codes 15273 and 15277 must be assigned to the same APC and C5273 and C5277 also must be assigned to 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 the two 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 two 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 [[Page 94249]] 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. In response to the claim of one of the commenters that we do not understand that similar amounts of product and resources are used for the procedures described by CPT codes 15273 and 15277 or for the procedures described by HCPCS codes C5273 and C5277, we note that the cost data for CY 2023 and for many years prior show substantial cost differences between the procedures described by CPT codes 15273 and 15277 and likewise for the procedures described by HCPCS codes C5273 and C5277. We set our payment rates based on claims cost data which continue to show that these procedures have substantial cost differences and should be assigned to different APCs. 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 of the commenters 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 2025, 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: One commenter 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. The commenter believes 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. Response: We disagree with the commenter that using ASP 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 commenter's 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 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. Comment: One commenter 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). The commenter notes 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 commenter, 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 commenter's support of our policy. Comment: One commenter requested that skin substitute products that receive an FDA approval through either the Premarket Approval (PMA) process, the Biological License Application (BLA) process, or the New Drug Application (NDA) process no longer be packaged in the OPPS, but instead be separately payable at a rate of ASP + 6 percent. In addition, the commenter requested that two previously approved skin substitute products, Apligraf and Dermagraft, should no longer be packaged and should be paid separately at a rate of ASP + 6 percent because these products are now regulated by the Center for Biologics Evaluation and Research (CBER) within the FDA. CBER is the center within FDA that regulates biological products for human use. The commenter notes the rigorous process that biological products must go through to confirm their safety and effectiveness to receive either a PMA, BLA, or NDA approval. The commenter states that when Apligraf and Dermagraft received their FDA approval, the products had a review process comparable to the reviews done for a PMA, BLA, or NDA approval. The commenter believes the intensive review process that skin substitute products undergo to get a PMA, BLA, or NDA approval should allow those products to be separately paid rather than packaged in the OPPS. Response: The commenter appears to be referencing comments that were previously made for the CY 2014 OPPS/ [[Page 94250]] ASC final rule with comment period (78 FR 74931) where commenters asserted that specified covered outpatient drugs (SCODs) under section 1833(t)(14)(B) of the Act cannot be packaged in the OPPS and instead must be paid separately. Section 1833(t)(14)(B) of the Act defines a SCOD as a ``covered outpatient drug (as defined in section 1927(k)(2))''. Covered outpatient drugs under section 1927(k)(2) of the Act are generally limited to products approved as drugs by the FDA, biologicals licensed under section 351 of the Public Health Service Act, and insulin. However, skin substitute products that have either a PMA, BLA, or NDA are still considered to be supplies under the policy we implemented in CY 2014 OPPS/ASC final rule with comment period (78 FR 74938). Under our policy, we unconditionally packaged skin substitute products into their associated surgical procedures as part of a broader policy to package all drugs and biologicals that function as supplies when used in a surgical procedure. Finally, as we explained in finalizing our policies of packaging diagnostic radiopharmaceuticals and contrast agents in the CY 2008 OPPS final rule (72 FR 66766), CMS has the authority to package the payment of SCODs in the OPPS and we may consider additional packaging options for SCODs and other separately payable drugs in the future (78 FR 74931). 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: 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 2025. Response: Based on their cost data and our policies, we are finalizing that 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 2025. Comment: The manufacturer of the products described by HCPCS codes Q4148 (Neox cord 1k, neox cord rt, or clarix cord 1k, per square centimeter) and Q4156 (Neox 100 or clarix 100, per square centimeter) requested that these graft skin substitute products continue to be assigned to the high-cost skin substitute group for CY 2025. Response: Based on their cost data and our policies, we are finalizing that both HCPCS codes Q4148 (Neox cord 1k, neox cord rt, or clarix cord 1k, per square centimeter) and Q4156 (Neox 100 or clarix 100, per square centimeter) will remain in the high-cost group for CY 2025. After consideration of the public comments we received, we are finalizing our proposals without modification. Our final policies are to: Continue to 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 2025. The final MUC threshold will be $50 per cm\2\ (rounded to the nearest $1) and the final PDC threshold will be $833 (rounded to the nearest $1). Table 135 includes the final CY 2024 cost category assignment for each skin substitute product. BILLING CODE 4120-01-P [[Page 94251]] [GRAPHIC] [TIFF OMITTED] TR27NO24.176 [[Page 94252]] [GRAPHIC] [TIFF OMITTED] TR27NO24.177 [[Page 94253]] [GRAPHIC] [TIFF OMITTED] TR27NO24.178 [[Page 94254]] [GRAPHIC] [TIFF OMITTED] TR27NO24.179 [[Page 94255]] [GRAPHIC] [TIFF OMITTED] TR27NO24.180 [[Page 94256]] [GRAPHIC] [TIFF OMITTED] TR27NO24.181 BILLING CODE 4120-01-C 8. Radioisotopes Derived From Non-Highly Enriched Uranium (non-HEU) Sources/Radioisotopes Derived From Domestically Produced Mo-99 Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Technetium-99m (Tc-99m), the radioisotope used in the majority of such diagnostic imaging services, is produced through the radioactive decay of molybdenum-99 (Mo-99). Historically, most of the Mo-99 used in the United States was 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 promoted 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 increased costs into the payment system that would not be fully accounted for in the historical claims data until all Tc-99m was produced from non-HEU sources. 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). The Secretaries of Energy and Health and Human Services issued a certification regarding the supply of non-HEU-sourced Mo-99 effective January 2, 2022 (86 FR 73270). Mo-99 is the precursor material from which Tc-99m is sourced. The certification by the Secretary of Energy 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. 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). [[Page 94257]] Historically, diagnostic radiopharmaceuticals have been packaged into the cost of the associated diagnostic imaging procedure no matter the per-day cost (we are adopting a policy beginning in CY 2025 to pay separately for higher cost diagnostic radiopharmaceuticals). The cost of the radiopharmaceutical, whether it is included as a part of the cost of the diagnostic imaging procedure or is separately paid, is reported through Medicare claims data. Medicare claims data used to set payment rates under the OPPS generally are from two 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 used to set payment rates for CY 2024 (generally CY 2022 claims data) contained 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. The conversion of the last major global Mo-99 producer from HEU to Low Enriched Uranium (LEU) was previously expected to be completed by December 31, 2022, but the conversion did not occur until March 2023. As a result, 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 incur for these procedures because providers will only have access to non- HEU-sourced Tc-99m. Therefore, we adopted a policy in the CY 2024 OPPS final rule with comment period (88 FR 81803) to extend the additional $10 add-on payment described by HCPCS code Q9969 for non-HEU-sourced Tc-99m through the end of CY 2025 to continue to ensure adequate payment for non-HEU-sourced Tc-99m. Recently, the Department of Energy and other interested parties raised another issue affecting the domestic supply chain for Mo-99 and Tc-99 that, left unaddressed, could cause payment inequity among outpatient hospital providers. Foreign Mo-99 production has historically been subsidized by foreign governments, resulting in prices below the true cost of production. These artificially low, government-subsidized prices have created a disincentive for investments in Mo-99 production infrastructure, and they also created a barrier to entry for new producers, including U.S. companies. This in turn has resulted in unreliable production and periodic shortages. In response to the 2009-2010 shortages, Congress passed the American Medical Isotopes Production Act of 2012 (AMIPA), which directs the Secretary of Energy to provide financial and technical support to U.S. companies working to build new irradiation and manufacturing facilities to produce Mo-99 without HEU. It was expected that the transition from HEU to LEU-based production would also involve the transition to a Full Cost Recovery pricing model; however, it does not appear that this transition has occurred in practice. Foreign producers continue to rely on multipurpose nuclear research reactors for Mo-99 production, and the global Mo-99 supply chain has not established a system of verifying that all of the costs attributable to Mo-99 production are being incorporated into the price of the product. U.S. companies have made significant progress towards establishing the infrastructure needed for large-scale Mo-99 production. Unlike many foreign producers, U.S. companies must price their products high enough to cover the full cost of operating their production facilities. Based in part on the differences in pricing models, U.S. companies have experienced challenges in competing with foreign producers for customers. Currently, there is no domestic production of Mo-99. Once U.S. companies initiate or resume Mo-99 production, the difference in pricing models will likely create a payment inequity, as hospitals purchasing Tc-99m derived from domestically produced Mo-99 would likely pay higher prices than those purchasing Tc-99m derived from imported Mo-99. We proposed to address the payment inequity resulting from the higher cost of domestically produced Tc-99m by establishing a new add-on payment of $10 per dose for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99 starting on January 1, 2026, using our equitable adjustment authority under section 1833(t)(2)(E) of the Act. We stated that we believe the $10 add-on payment for domestically produced Tc-99m would ensure equitable payments by paying providers who use domestically produced Tc-99m radiopharmaceuticals when available an amount that reflects the anticipated higher cost of these products. We explained that the $10 add-on payment will help to ensure provider and beneficiary access to domestically produced Tc-99m radiopharmaceuticals by providing an additional payment amount that addresses the additional costs of domestically produced Tc-99m radiopharmaceuticals. The Department of Energy, National Nuclear Security Administration, (DOE/ NNSA) would establish the criteria to certify whether the Tc-99m radiopharmaceutical dose is domestically produced and eligible for the add-on payment, which would be included in the CY 2026 OPPS/ASC proposed rule. The CY 2026 OPPS/ASC proposed rule would include additional details on how providers would bill for this add-on payment in CY 2026. Comment: Multiple commenters supported our proposal to establish a new add-on payment of $10 per dose for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99. Response: We appreciate the support of the commenters for our proposal. Comment: Multiple commenters expressed support for an add-on payment for domestically produced Tc-99m radiopharmaceuticals, but the commenters expressed several concerns about how the add-on payment policy would work. Some commenters believe the proposed payment amount for the add-on of $10 is too low and encouraged us to work with interested parties to determine a different payment amount that would adequately cover the cost difference between domestically produced Tc- 99m radiopharmaceuticals and foreign produced Tc-99m radiopharmaceuticals. One commenter asked us to provide additional analysis to support the payment amount for the add-on payment. [[Page 94258]] Commenters had concerns about the effectiveness of the policy based on their experiences with the current add-on payment for Tc-99m radiopharmaceuticals produced from non-HEU sources. Commenters do not believe the add-on payment for Tc-99m radiopharmaceuticals produced from non-HEU sources has substantially influenced the types of Tc-99m radiopharmaceuticals purchased by outpatient hospitals or remedied cost differences between HEU and non-HEU Tc-99m for the companies who supply Tc-99m radiopharmaceuticals to hospitals. Commenters encouraged us to work with DOE/NNSA and other government agencies to ensure that domestic Mo-99 producers and Tc-99m generator manufacturers receive assistance to handle the higher costs of their products. Commenters were also concerned about how a Tc-99m radiopharmaceutical will be defined as a domestically produced product. They asked that CMS and other government agencies show flexibility when coming up with a definition of domestically produced Tc-99m radiopharmaceuticals to avoid increasing production costs. Commenters noted that Tc-99m generators often mix Mo-99 from several sources, which may make it challenging for suppliers to adhere to strict domestic Tc-99m content requirements. Commenters want to ensure that the tracking and documentation requirements for outpatient hospital providers to prove the Tc-99m radiopharmaceuticals they use are domestically produced are easy to understand and use, and do not add an additional burden to hospitals. Response: We will continue to monitor the differences in cost between domestically produced Tc-99m and foreign produced Tc-99m for future rulemaking. Using available information from the Organization for Economic Co-operation and Development, Nuclear Energy Agency (OECD/ NEA), the methodology for a $10 add-on payment accounts for the per- dose cost of implementing full-cost recovery pricing. As such, DOE/NNSA recommends maintaining the $10 value as the add-on payment transitions from a non-HEU payment to a domestically sourced Tc-99m payment. We believe $10 is an appropriate amount for an add-on payment for domestically produced Tc-99m radiopharmaceuticals to address this expected cost difference. We understand commenters' concerns about the ability of the add-on payment to change the purchasing behavior of providers. However, the $10 add-on payment is intended to address the expected additional cost of domestically-produced Tc-99m radiopharmaceuticals if providers choose to utilize these radiopharmaceuticals in the future. If commenters have data showing that the price differential between domestically produced and foreign produced Mo-99 will be significantly more or less than $10, they may provide that data to CMS so we can consider it for CY 2026 OPPS rulemaking. We appreciate commenters' suggestions for how to establish requirements to determine that a Tc-99m radiopharmaceutical is domestically produced. As we stated in the CY 2025 OPPS/ASC proposed rule (89 FR 59378), DOE/NNSA is establishing the criteria to certify whether the Tc-99m radiopharmaceutical dose is domestically produced and eligible for the add-on payment, and those criteria will be included in the CY 2026 OPPS/ASC proposed rule. We will consider in CY 2026 rulemaking any additional requirements for Medicare providers to document that the Tc-99m radiopharmaceutical used in a procedure was domestically produced and can qualify to receive the add-on payment based on the criteria developed by DOE/NNSA. Comment: One commenter was opposed to the $10 add-on payment for domestically produced Tc-99m radiopharmaceuticals. According to the commenter, the central challenge for the proposal is that the Mo-99 used to create the Tc-99m generators will come from both domestic and foreign sources, and suppliers would need to assess each generator individually to determine its domestic Tc-99 content and whether the Tc-99 meets the standard to be considered domestically produced. The Tc-99m generator suppliers would need to communicate the domestic production status of each generator to the provider receiving the generator. The provider would then have to track the Tc-99m generators and link them to the Tc-99m radiopharmaceutical administered to a patient to be able to claim the add-on payment for domestically produced Tc-99m radiopharmaceuticals. The commenter believes most providers will not be able to track or document information on the production source of the Tc-99m generators they purchase. The commenter also does not believe that if a domestic company starts to produce Mo-99, it will price it higher than Mo-99 from foreign sources because the domestic producer will need to charge the same price for Mo-99 to stay competitive with foreign producers. Per the commenter, this would mean when the Tc-99m radiopharmaceuticals are purchased by outpatient hospital providers at the point where the add- on payment may have a policy impact, there will be no price difference between the domestically produced product and the foreign produced product, and no purpose for the add-on payment. The commenter also expressed concern that the add-on payment policy will not help the pharmacies, Tc-99m generator manufacturers, or the Mo-99 producers who supply Tc-99m radiopharmaceuticals to outpatient hospitals, and those suppliers will end up paying for the higher cost of domestically produced Tc-99m, not hospitals. The commenter asked that we not finalize our proposal or at least wait until CY 2027 before implementing it. The commenter believes that it will take until at least 2027 before a domestic producer can start producing Mo-99 for Tc- 99m generators. Response: We appreciate the concerns of the commenter. As stated in the previous comment, DOE/NNSA will be establishing the criteria to certify whether the Tc-99m radiopharmaceutical dose is domestically produced and eligible for the add-on payment, and those criteria will be included in the CY 2026 OPPS/ASC proposed rule. Regarding the challenges providers may face identifying a Tc-99m radiopharmaceutical as a domestically produced product, once requirements are established defining a domestically produced Tc-99m radiopharmaceutical, we will consider in future rulemaking any requirements for providers to document that the Tc-99m radiopharmaceutical used in a procedure was domestically produced and can qualify to receive the add-on payment. We understand commenters' concerns regarding the cost of domestically- produced Tc-99m radiopharmaceuticals for entities other than outpatient hospital departments, but note that this policy is only intended to address the additional cost to hospital outpatient departments of utilizing domestically-produced Tc-99m radiopharmaceuticals. The commenter noted that currently there are no producers of domestically sourced Mo-99 and Tc-99, and the earliest that domestic production of Mo-99 and Tc-99 could begin is in 2027. While there may not be domestic production of Mo-99 and Tc-99in CY 2026, we believe it is better to have a regulatory framework for this policy in place when domestic production of Tc-99m radiopharmaceuticals begins. With [[Page 94259]] a regulatory framework already in place, providers will be knowledgeable about the availability of additional payments for domestically sourced Tc-99m radiopharmaceuticals. Likewise, producers of domestic Mo-99m will have certainty that the Medicare OPPS payment policy takes into account the additional costs of domestic production of Mo-99. After consideration of the public comments we received, we are finalizing our proposal without modification to establish a new add-on payment of $10 per dose for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99 starting on January 1, 2026. As established in the CY 2024 OPPS/ASC final rule with comment period, CY 2025 will be the final year of the $10 add-on payment for TC-99m derived from non-HEU sources.

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 2025 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 2025. 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 2024 or beginning in CY 2025. The sum of the proposed CY 2025 pass-through spending estimates for these two groups of device categories equals the proposed total CY 2025 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 2025, 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 2025, and therefore our estimate of drug and biological pass-through payment for CY 2025 for this group of items was $10.2 million. Payment for certain drugs,\146\ specifically 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 non-pass-through drugs and biologicals that function as supplies when used in a diagnostic test or procedure unless a high-cost diagnostic radiopharmaceutical with a per day cost greater than $630 is used for the test or procedure. We policy-package all drugs and biologicals that function as supplies when used in a surgical procedure or for anesthesia, and other categories of drugs and biologicals, as discussed in section V.B.1.c of the CY 2025 OPPS/ASC proposed rule (89 FR 59364). Consistent with current policy, we propose 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 2025, 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 2025 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 the CY 2024 OPPS/ASC final rule with comment period (88 FR 81774 through 81776), we discussed 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 [[Page 94260]] 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. --------------------------------------------------------------------------- \146\ Please see section II.A.3.c. for more information regarding the payment of diagnostic radiopharmaceuticals. --------------------------------------------------------------------------- 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 2025. The second group contains drugs and biologicals that we know are newly eligible, or project will be newly eligible, in CY 2025. The sum of the CY 2025 pass-through spending estimates for these two groups of drugs and biologicals equals the total CY 2025 pass-through spending estimate for drugs and biologicals with pass-through payment status.

B. Final Estimate of Pass-Through Spending for CY 2025

For CY 2025, we proposed to set the applicable pass-through payment percentage limit at 2.0 percent of the total projected OPPS payments for CY 2025, consistent with section 1833(t)(6)(E)(ii)(II) of the Act and our OPPS policy from CY 2004 through CY 2024 (88 FR 81805). 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 2025, there are 8 active categories for CY 2025. The active categories are described by HCPCS codes C1747, C1826, C1827, C1600, C1601, C1602, C1603 and C1604. Based on the information from the device manufacturers, we estimated that HCPCS code C1747 will cost $19.5 million in pass-through expenditures in CY 2025, HCPCS code C1826 will cost $151,991 in pass-through expenditures in CY 2025, HCPCS code C1827 will cost $364,793 in pass- through expenditures in CY 2025, HCPCS code C1600 will cost $21.9 million in pass-through expenditures in CY 2025, HCPCS code C1601 will cost $14.4 million in pass-through expenditures in CY 2025, HCPCS code C1602 will cost $8.2 million in pass-through expenditures in CY 2025, HCPCS code C1603 will cost $6.6 million in pass-through expenditures in CY 2025, and HCPCS code C1604 will cost $20.0 million in pass-through expenditures in CY 2025. Therefore, we proposed an estimate for the first group of devices of $91.1 million. We did not receive any public comments on our proposed estimate. Using our methodology for this final rule with comment period, the final estimated pass through costs based on updated data for HCPCS code C1747 will cost $18.9 million in pass-through expenditures in CY 2025, HCPCS code C1826 will cost $176,594 in pass-through expenditures in CY 2025, HCPCS code C1827 will cost $844,031 in pass-through expenditures in CY 2025, HCPCS code C1600 will cost $21.9 million in pass-through expenditures in CY 2025, HCPCS code C1601 will cost $14.4 million in pass-through expenditures in CY 2025, HCPCS code C1602 will cost $8.2 million in pass-through expenditures in CY 2025, HCPCS code C1603 will cost $6.6 million in pass-through expenditures in CY 2025, and HCPCS code C1604 will cost $20.0 million in pass-through expenditures in CY 2025. Therefore, we have finalized the CY 2025 spending estimate for the first group of devices of approximately $91.0 million. In estimating our proposed CY 2025 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 2025; (2) additional device categories that we estimated could be approved for pass-through status after the development of the CY 2025 OPPS/ASC proposed rule (89 FR 59379) and before January 1, 2025; and (3) contingent projections for new device categories established in the second through fourth quarters of CY 2025. For CY 2025, 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 2025 OPPS/ASC proposed rule (89 FR 59379), the proposed estimate of CY 2025 pass-through spending for this second group of device categories was $523.7 million. We did not receive any public comments on the proposed estimate. As stated earlier in this final rule with comment period, we are approving eight devices for pass-through payment status in the CY 2025 rulemaking cycle: AGENTTM Paclitaxel-Coated Balloon Catheter, AVEIRTM DR Dual Chamber Leadless Pacemaker System (AveirTM DR System), DETOURTM System, the Ultrasound Disposable Kit--Diagnostic/Therapeutic (UDK-T) component of the EndoSound Vision SystemTM (EVSTM), iFuse Bedrock GraniteTM Implant System, Paradise[supreg] Ultrasound Renal Denervation (RDN) System, Precision GI and Symplicity SpyralTM Renal Denervation (RDN) System.\147\ The manufacturers of these systems provided utilization and cost data that indicate the amount of spending for the devices would be approximately $36.0 million for AGENTTM Paclitaxel-Coated Balloon Catheter; $113.0 million for AVEIRTM DR Dual Chamber Leadless Pacemaker System; $280,000 for the UDK-T component of the EVSTM; $25.3 million for iFuse Bedrock GraniteTM Implant System; $32.8 million for Paradise[supreg] Ultrasound RDN System; $0.78 million for Precision GI; and $16.0 million for Symplicity SpyralTM RDN System. In addition, we note that HCPCS code C8000 was preliminarily approved as part of the device pass- through quarterly review process with an effective date of October 1, 2024.\148\ For this final rule based on updated data, we estimate that HCPCS code C8000 will cost $2.9 million in pass-through expenditures in CY 2025. Therefore, we are finalizing an estimate of $227.1 million for this second group of devices for CY 2025. --------------------------------------------------------------------------- \147\ As discussed in section IV.A.2 of this final rule with comment period, the DETOURTM System pass-through application was preliminarily approved for transitional pass-through payment under the alternative pathway effective January 1, 2024, and the AveirTM DR System pass-through application and the UDK-T component of the EVSTM pass-through application were preliminarily approved for transitional pass-through payment under the alternative pathway effective July 1, 2024. We are finalizing the approvals for device pass-through payment status for the DETOURTM System, the AveirTM DR System and the UDK-T component of the EVSTM in this final rule with comment period. Due to the timing of the preliminary approvals, the CY 2025 spending estimate for the DETOURTM System is included in the CY 2025 spending estimate for the first group of devices; and the CY 2025 spending estimate for the AveirTM DR System and the UDK-T component of the EVSTM is included in the CY 2025 spending estimate for the second group of devices. \148\ The device application associated with HCPCS code C8000 will be included and discussed in the CY 2026 OPPS/ASC proposed and final rules. --------------------------------------------------------------------------- The estimated amount of pass-through spending of $227.1 million in this final rule is substantially less that the estimated amount of pass-through spending in the CY 2025 OPPS/ASC proposed rule (89 FR 59379) of $523.7 [[Page 94261]] million because, in the proposed rule we assumed that all of the devices with pending applications to receive pass-through status would receive approval. For the final rule, we have determined the some of these devices have received pass-through status, and some of these devices have been denied pass-through status, and we adjusted our device pass-through spending estimates accordingly. To estimate proposed CY 2025 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 2025, we proposed to use the CY 2023 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 2025 OPPS utilization of the products. For the known drugs and biologicals (excluding policy-packaged contrast agents, drugs, biologicals, radiopharmaceuticals with per-day costs at or below the packaging threshold 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 2025, 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 amount and the non-pass-through payment amount was $0 for this group of drugs. 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 propose to include in the CY 2025 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. Diagnostic radiopharmaceuticals that currently have pass-through status, but would be paid separately because of the policy we are adopting described in Section II.A.3.c. to separately pay for diagnostic radiopharmaceuticals with a per day cost over $630, are not considered to be policy-packaged and are not included in this group. For this first group of policy- packaged drugs and biologicals, we estimated a pass-through spending for CY 2025 of $200,000. We did not receive any public comments on our proposed estimate. Using our methodology for this final rule with comment period, the CY 2025 spending estimate for this first group of drugs and biologicals is around $200,000. To estimate proposed CY 2025 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 proposed rule 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 proposed rule and before January 1, 2025, and projections for new drugs and biologicals that could be initially eligible for pass-through payment in the second through fourth quarters of CY 2025), 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 2025 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 2025 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 proposed estimate. Using our methodology for this final rule with comment period, we are finalizing our estimate of pass-through spending for the second group of drugs and biologicals to be $10 million. We estimated for the CY 2025 OPPS/ASC proposed rule (89 FR 59380) 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 2025 and the amount of pass-through spending for those device categories, drugs, and biologicals that first become eligible for pass-through payment during CY 2025 would be approximately $625 million (approximately $614.8 million for device categories and approximately $10.2 million for drugs and biologicals), which represented 0.71 percent of total projected OPPS payments for CY 2025 (approximately $88.2 billion). Therefore, we estimated for the proposed rule that pass-through spending in CY 2025 would not amount to 2.0 percent of total projected OPPS CY 2025 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 2025 and the amount of pass-through spending for those device categories, drugs, and biologicals that first become eligible for pass- through payment during CY 2025 would be approximately $328.3 million (approximately $318.1 million for device categories and approximately $10.2 million for drugs and biologicals), which represents only 0.37 percent of total projected OPPS payments for CY 2025 (approximately $87.7 billion). Therefore, we estimate that pass-through spending in CY 2025 will not exceed the 2.0 percent of total projected OPPS CY 2025 program spending limit provided for in section 1833(t)(6)(E) of the Act.

1. Partial Hospitalization

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. PHP 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 through 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 OPPS/ASC final rule with comment period (80 FR 70453 through 70467), 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 the CY 2017 OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs 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 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, as long as the location met all conditions of participation to the extent not waived. A hospital or CMHC could furnish such services using [[Page 94265]] telecommunications technology to a beneficiary in a temporary expansion location if that beneficiary was registered as an outpatient. In the CY 2023 OPPS/ASC final rule with comment period (87 FR 72247), we confirmed that these provisions applied 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 through 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). In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81811), we revised the regulation at Sec. 424.24(e)(1)(i) to require the physician certification for PHP services to include a certification that the patient requires such services for a minimum of 20 hours per week, as required by section 1861(ff)(1) of the Act, as amended by section 4124(a) of Division FF of the CAA, 2023. In addition, we modified the regulations for PHP at Sec. 410.43 to include references to SUD. In the same CY 2024 OPPS/ASC final rule with comment period, we also established separate payment rates for PHP days with 3 services and days with 4 or more services. Accordingly, we established 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). We also finalized a policy to utilize the separate CMHC rates for 3-service and 4-service PHP days as the Medicare Physician Fee Schedule (MPFS) rates, depending upon whether a nonexcepted off-campus hospital outpatient department furnishes 3 or 4 PHP services in a day. Lastly, we finalized several changes beginning in CY 2024 to align coding, billing, and payment between PHPs and intensive outpatient programs.

2. Intensive Outpatient Program Services

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. An intensive outpatient program (IOP) is a distinct and organized program of psychiatric services for individuals who have an acute mental illness, which includes, but is not limited to, conditions such as depression, schizophrenia, and SUD. Intensive outpatient services are not required to be provided in lieu of inpatient hospitalization. Section 1861(ff)(4) of the Act defines intensive outpatient services as the items and services described in paragraph (2) prescribed by a physician for an individual determined (not less frequently than 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 plan 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 intensive outpatient services. Section 1861(ff)(4)(C) of the Act specifies that an IOP is a program furnished by a hospital to its outpatients, a CMHC, a Federally qualified health center (FQHC), or by 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 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 IOP. [[Page 94266]] In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81812 through 81857), we established payment and program requirements for the IOP benefit furnished by a hospital to its outpatients, or by a CMHC, an FQHC, or an RHC. In addition, we established Medicare Part B coverage for IOP services provided by Opioid Treatment Programs (OTPs) for the treatment of opioid use disorder (OUD). Consistent with the statutory definition of intensive outpatient services under section 1861(ff)(2) of the Act, we finalized regulations at 42 CFR 410.44 to set forth the conditions and exclusions applicable for intensive outpatient services, and at Sec. 424.24 to set forth the content of the certification and plan of treatment requirements for intensive outpatient services. We also revised 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. Additionally, we created 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 revised 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. In addition, as discussed in greater detail in the following sections, we established coding, billing, and payment policies for IOP that align with the policies established for PHP provided in the same settings. Specifically, we established four separate IOP APC per diem payment rates at the same rates we proposed for the 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). Similar to the policy finalized for PHP, we finalized a policy 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. We also established payment for IOP provided by an RHC or FQHC at the same rate as APC 5861, which is the 3-service hospital-based IOP rate (Sec. 405.2462(j)). Furthermore, we established a payment adjustment for IOP provided by an OTP based on 3 times the payment rate for APC 5861 beginning in CY 2024 (Sec. 410.67(d)(4)(i)(F)).

B. Coding and Billing for PHP and IOP Services Under the OPPS

In the CY 2024 OPPS/ASC final rule with comment period, we finalized a billing requirement that all providers use condition code 41 to indicate that a claim is for partial hospitalization services and use condition code 92 to identify intensive outpatient claims, effective January 1, 2024. Since the statutory definitions of both IOP and PHP generally include the same types of items and services covered, we stated in the CY 2024 OPPS/ASC final rule with comment period 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. The use of condition codes 41 for PHP claims and 92 for IOP claims allows us to differentiate between these services for billing purposes. We recognize that the level of intensity of mental health services that 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 supports a smooth transition for patients when a change in the intensity of 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. The full list of HCPCs codes recognized under the PHP and IOP benefits can be found in the Medicare Claims Processing internet Only Manual, Chapter 4, sections 260.1 and 261.1, respectively, and their subsections, available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c04.pdf. To qualify for payment for the IOP APC (5851, 5852, 5861, or 5862) or the PHP APC (5853, 5854, 5863, or 5864), one service provided that day must be from the Partial Hospitalization and Intensive Outpatient Primary list. We refer readers to the CY 2024 OPPS final rule with comment period for further discussion regarding our expectation that at least one of the services on the PHP and IOP Primary list will be indicated per day for patients who need the level of care offered by a PHP or IOP program. The PHP and IOP Primary List can be found in the CY 2024 OPPS/ASC final rule with comment period at 88 FR 81821. Beginning in CY 2024, we recognized caregiver training services and Principal Illness Navigation (PIN) services as PHP and IOP services. We explained that the reported costs associated with providing such services are included when we calculate the PHP and IOP payment rates; however, these services do not count toward the determination of whether a PHP or IOP day is paid at the 3-service or 4-service rate. We refer readers to the CY 2024 OPPS/ASC final rule with comment period for a detailed discussion of this policy (88 FR 81823 through 81825). As finalized in the CY 2024 OPPS/ASC final rule with comment period, if new codes are established that represent the PHP and IOP services described under Sec. Sec. 410.43(a)(4) and 410.44(a)(4), respectively, such codes are added to the list of codes recognized for payment for PHP or IOP through sub-regulatory guidance. We note that coding updates frequently occur outside of the standard rulemaking timeline. We adopted 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 explained that this policy applies to new codes that are cross walked to a previously included code, or whose code descriptor is substantially similar to a descriptor for a code on the list or describes a service on the list. We stated 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 note that for CY 2025, we did not propose to add any new services not described at Sec. 410.43(a)(4) or Sec. 410.44(a)(4) to the list of PHP and IOP services. However, we received comments regarding the addition of new services to the PHP and IOP benefits. A summary of these comments and our response is provided. Comment: Several commenters advocated for caregiver training services and principal illness navigation (PIN) services to be included in the number of PHP or IOP services per day for payment. Commenters also strongly supported the inclusion of discharge support and peer services be adopted as applicable for PHP and IOP. [[Page 94267]] Response: We thank commenters for their feedback. As discussed in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81825), PIN services are reported monthly and represent time spent throughout the month; therefore, we did not include these services in the evaluation of whether a particular PHP or IOP day receives the 3-service or 4- service day for payment. We intend to continue to analyze utilization and cost data for these services and consider any payment changes in future rulemaking to better recognize such costs. Additionally, as discussed in the CY 2024 PFS final rule with comment period (88 FR 78938 through 78949), CMS finalized to pay separately for PIN services to account for resources when clinicians involve certain types of health care support staff such as peer support specialists in furnishing medically necessary care. We believe that including these PIN HCPCS codes in the services recognized for PHP and IOP appropriately indicates that the services of peer support specialists are eligible services for inclusion in PHP and IOP. Regarding the suggestion to count caregiver training services in the evaluation of whether a PHP or IOP day receives the 3-service or 4- service day for payment, we note that, as explained in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81822), we believe it would be appropriate to exclude these services from the determination of the number of services provided per day, but we would include such services in the calculation of cost per day for determining the PHP and IOP payment rates. We recognize that caregiver training services are an integral part of many PHPs and IOPs; however, we believe that until we have actual utilization data for the provision of caregiver training services, it would be more appropriate to base the payment for a higher-intensity PHP or IOP day on the provision of therapeutic, diagnostic, and training services that have historically been recognized for PHP or OPPS payment. We did not propose to include caregiver training services in the determination of whether a PHP or IOP day receives the 3-service or 4- service day for payment, and we are not finalizing any changes to this policy for CY 2025. We intend to continue analyzing utilization and cost data for these services to consider whether payment changes may be appropriate in the future. Comment: One commenter suggested CMS include the treatment of postpartum depression as applicable for PHP and IOP. Response: We thank the commenter for their suggestion, and note that currently, the ICD-10-CM code F53.0 (Postpartum depression) is included in the ICD-10-CM Codes that Support Medical Necessity list for PHP.\149\ A patient may receive treatment of postpartum depression under a PHP as long as all other patient eligibility requirements are met, including that PHP patients are required to be certified by a physician as needing at least 20 hours of services per week, and the patient would require inpatient hospitalization if they did not receive PHP services. --------------------------------------------------------------------------- \149\ https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=56850&ver=23&. --------------------------------------------------------------------------- In addition, we are clarifying in this CY 2025 OPPS/ASC final rule with comment period that ICD-10-CM code F53.0 (Postpartum depression) is included in the ICD-10-CM Codes that Support Medical Necessity list for IOP. A patient may receive treatment of postpartum depression under an IOP as long as all other patient eligibility requirements are met, including that IOP patients are required to be certified by a physician as needing at least 9 hours of services per week. Comment: One commenter requested CMS clarify the expectation that PHP and IOP participants identified as needing medically necessary occupational therapy (OT) services should receive those services as part of the overall interdisciplinary plan of care. This commenter also requested that CMS clarify whether occupational therapists can bill for other PHP and IOP services, which the commenter stated are within the scope of practice for occupational therapists. The commenter included the following services in their letter: 97153 Adaptive behavior tx by tech 97154 Grp adapt bhv tx by tech 97155 Adapt behavior tx phys/qhp 97156 Fam adapt bhv tx gdn phy/qhp 97157 Mult fam adapt bhv tx gdn 97158 Grp adapt bhv tx by phy/qhp 96112 Devel tst phys/qhp 1st hr 96156 Hlth bhv assmt/reassessment 96158 Hlth bhv ivntj indiv 1st 30 96161 Admin of caregiver-focused hlth risk asst for ben of patient 96164 Hlth bhv ivntj grp 1st 30 96167 Hlth bhv ivntj fam 1st 30 97151 Bhv id assmt by phys/qhp 97152 Bhv id suprt assmt by 1 tech Response: We thank the commenter for their feedback. We are clarifying in this CY 2025 OPPS/ASC final rule with comment period that occupational therapy services are an important part of PHPs and IOPs, specifically listed in the statute at section 1861(ff)(2)(B) and in the regulations at Sec. Sec. 410.43(a)(4)(ii) and 410.44(a)(4). Currently, HCPCS code G0129 is the recognized code for OT services provided for PHP and IOP patients. However, occupational therapists working within their scope of practice as determined by state law can provide and bill for other services as part of a PHP or IOP, including the services mentioned by the commenter which are listed above. We note that because these codes are already included in the list of HCPCS applicable for PHP and IOP, which are identified in Table 98 in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81827 through 81828), it is not necessary to make any changes to the list to permit them to be billed as part of a PHP or IOP. We are not adding any new HCPCS codes to the list at this time. However, we remind readers that we established a sub-regulatory process in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81818 through 81822) to consider the inclusion of additional codes that represent the PHP and IOP services described under Sec. Sec. 410.43(a)(4) and 410.44(a)(4), respectively. We periodically review these code lists and may add new codes to the list of codes applicable for PHP and IOP if they describe services included under the regulatory definitions of partial hospitalization services or intensive outpatient services. Comment: A few commenters were concerned CMS did not propose to allow PHP and IOP services to be furnished remotely. Commenters noted that the availability of remote PHP services during the COVID-19 Public Health Emergency (PHE) increased access to these services, especially in rural areas. The commenters believed allowing PHP and IOP services to be furnished remotely to beneficiaries in their homes would also increase access to these benefits. Response: As discussed in the March 31, 2020, interim final rule with comment entitled ``Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency'' (85 FR 19232), CMS announced the expansion of telehealth services on a temporary and emergency basis pursuant to waiver authority added under section 1135(b)(8) of the Act by the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (Pub.

L. 116-123, March 6, 2020). In addition, in the April 30, 2020, interim

final rule with comment entitled [[Page 94268]] ``Additional Policy and Regulatory Revisions in Response to the COVID- 19 Public Health Emergency'' (85 FR 27562 through 27566), we discussed that effective March 1, 2020, and for the duration of the COVID-19 PHE, a hospital or CMHC could furnish such services using telecommunications technology to a beneficiary in a temporary expansion location if that beneficiary is registered as an outpatient. The flexibility to provide PHP services remotely to a beneficiary in his or her home ended with the expiration of the PHE on May 11, 2023. In terms of the request to allow IOP services to be 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 of PHP for IOP. Section 1861(ff)(3)(A) provides, in part, that a PHP (and through the cross-reference in section 1861(ff)(4), an IOP) is a distinct and organized intensive ambulatory treatment offering less than 24-hour-daily care other than in an individual's home or in an inpatient or residential setting. Thus, neither PHP nor IOP services can be furnished remotely to beneficiaries in their homes. However, we clarified in the CY 2023 OPPS/ASC final rule with comment period (87 FR 72001) 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. Likewise, none of the 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 in this final rule with comment period 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 maintaining our coding and billing policies for PHP and IOP as established in the CY 2024 OPPS/ASC final rule with comment period.

1. Background

Beginning in CY 2024, we established 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 finalized a policy to calculate payment rates using the broader OPPS data set, instead of using hospital-based PHP data only. We explained that using the broader OPPS data set allows 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 established consistent coding and payment between the PHP and IOP benefits, we considered all OPPS data for PHP days and non-PHP days that include 3 or more of the same service codes. We established four separate IOP APC per diem payment rates at the same rates we proposed for the 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). In the CY 2024 OPPS/ASC final rule with comment period, we noted that the standard PHP day is typically four services or more per day. We explained that we have historically provided 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 is 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 required to leave the PHP early for the day due to an unexpected medical appointment. We also explained that prior to CY 2024, we 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 did not include that discussion in the CY 2024 OPPS/ASC proposed rule or final rule with comment period. We stated that these PHP-specific data trims and exclusions addressed limitations as well as anomalies in the PHP data. However, as noted earlier, we finalized a methodology 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 did not apply PHP-specific trims and data exclusions, but rather we applied the same trims and data exclusions consistent with the OPPS. We stated in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81830) that while no IOP benefit existed prior to the CAA, 2023, the types of items and services included in IOP had been, and were, 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 [[Page 94269]] 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 was 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 was no specific identifier or billing code to indicate IOP services that may have been provided before CY 2024. However, we noted that hospitals have been 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 included 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 set IOP payment rates at the same rates as PHP. We stated that the primary goal in developing the 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. We stated that setting the IOP payment rates equal to the PHP payment rates was appropriate because IOP was a newly established benefit, and we did 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.

2. CY 2025 Payment Rate Methodology for PHP and IOP

For CY 2025, we proposed to use the latest available cost information, from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking, and CY 2023 OPPS claims to update the payment rates for the four PHP APCs and the four IOP APCs finalized in the CY 2024 OPPS/ASC final rule with comment period. The proposal is consistent with the overall proposed use of cost data for the OPPS, which is discussed in section II.A.1.a of this final rule with comment period. In accordance with the methodology finalized in the CY 2024 OPPS/ASC final rule with comment period, we proposed to base the payment rate for each PHP APC on the geometric mean per diem cost for days with three services and four or more services, calculated separately for CMHCs and hospital outpatient departments. We proposed to use the broader set of OPPS data to calculate the geometric mean costs for hospital outpatient departments, and we proposed to apply the same trims and exclusions consistent with the OPPS. We also proposed to set the payment rates for the four IOP APCs based on the geometric mean per diem cost for PHP days with three services and four or more services, calculated separately for CMHCs and hospital outpatient departments. Lastly, we proposed that if more recent data subsequently became available after the publication of the CY 2025 OPPS/ASC proposed rule, we would use such updated data, if appropriate, to determine the CY 2025 payment rates for the four PHP APCs and the four IOP APCs finalized in the CY 2024 OPPS/ASC final rule with comment period. For beneficiaries in a PHP or IOP, we proposed to apply 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 is consistent with the policy we established in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81833). As we noted in the CY 2024 OPPS/ASC final rule with comment period, we expect days with fewer than three services would be very infrequent, and we intend to monitor the provision of these days among providers and individual patients. Comment: We received five comments from providers, hospital associations, and national organizations expressing concerns about the proposed PHP and IOP per diem rates. Commenters expressed that the proposed rates would not be sufficient to ensure the sustainability of PHP and IOP programs and could negatively affect access to PHP services. Some commenters noted that the proposed payment rates for PHP and IOP APCs published in Addendum A were lower than the geometric mean per diem cost figures published in the proposed rule. The commenters requested that CMS reconsider its approach to rate structures for IOPs and PHPs so that rates sufficiently cover the cost of these programs. Response: We understand the concerns that commenters raised regarding the proposed PHP and IOP rates for CY 2025. We proposed to calculate the PHP payment rates based on our longstanding methodology, in accordance with the statutorily required relative payment weight calculations under the OPPS. Under the longstanding OPPS ratesetting methodology, CMS establishes APC payment rates by annually reviewing and revising the APC groups and relative payment weights for APCs in accordance with sections 1833(t)(2) and 1833(t)(9)(A) of the Act, as further described in section II.A.4 of this final rule with comment period. We further note that the OPPS is subject to budget neutral adjustments to the weight scaler as described in section II.A.4 of this final rule with comment period and APC payment rates are calculated using the OPPS conversion factor described in section II.B. of this final rule with comment period. As a result of the OPPS budget neutrality adjustments, the proposed and final APC payment rates may be higher or lower than their estimated APC geometric mean costs. We believe these per diem costs are in line with 2024 per diem costs and appropriately use hospital and CMHC cost data. The final payment rates for the PHP and IOP APCs can be found in Addendum A of this CY 2025 OPPS/ASC final rule with comment period. After consideration of the public comments we received, we are finalizing the payment rate methodology for CY 2025 as proposed. Table 136 below shows the final APCs and the calculated geometric mean per diem costs for this CY 2025 OPPS/ASC final rule with comment period. 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).\150\ --------------------------------------------------------------------------- \150\ Click on the link labeled ``CY 2025 OPPS/ASC Notice of Proposed Rulemaking'', which can be found under the heading ``Hospital Outpatient Prospective Payment System Rulemaking'' and open the claims accounting document link at the bottom of the page, which is labeled ``2025 NPRM OPPS Claims Accounting (PDF)''. --------------------------------------------------------------------------- [[Page 94270]] [GRAPHIC] [TIFF OMITTED] TR27NO24.182

D. Outlier Policy for CMHCs

For CY 2025, we proposed to maintain 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 PHP and IOP services. We refer readers to the CY 2024 OPPS/ASC final rule with comment period (88 FR 81834 through 81836) for more details on CMHC outlier policies, and to section II.G.1 of this final rule with comment period for our general policies for hospital outpatient outlier payments.

2. CMHC Outlier Percentage

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 through 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 did not propose any changes to the CMHC outlier percentage policy for CY 2025.

3. Cutoff Point and Percentage Payment Amount

Also 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. This same policy was also reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58996 through 58997), 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 86082 through 86083), the CY 2022 OPPS/ASC final rule with comment period (86 FR 63670), the CY 2023 OPPS/ASC final rule with comment period (87 FR 72004), and the CY 2024 OPPS/ASC final rule with comment period (88 FR 81835). For CY 2024, we extended this policy to intensive outpatient services. We did not propose any changes to the cutoff point and payment amount policy for CY 2025.

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 through 58875 and 81 FR 79678 through 79680, respectively). We did not propose any changes to the outlier reconciliation policy for CY 2025.

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 [[Page 94271]] 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 through 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. We did not propose any changes to the outlier payment cap for CY 2025. We received comments on the outlier payment cap for CMHCs, which are summarized below and include our responses. Comment: Several commenters urged CMS to implement a site-neutral payment for CMHCs and hospital-based providers for PHP and IOP services, stating CMS policy creates arbitrary incentives for PHP and IOP services in settings other than CMHCs; a few of these commenters went on to state that a site-neutral payment would eliminate the need for a separate outlier policy for CMHCs. Response: We disagree with commenters who believe CMS policy creates an incentive for PHP and IOP services in settings other than CMHCs and that a site-neutral payment would eliminate the need for a separate outlier policy for CMHCs. Current data for partial hospitalization reflect significant cost structure differences between hospitals and CMHCs, and our longstanding payment policies reflect those differences as well. 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. As discussed in the CY 2004 OPPS final rule with comment period (68 FR 63469 and 63470), we noted the use of historical cost-to-charge ratios applied to current charges resulted in an excessive amount of outlier payments being made to CMHCs. As a result of more in-depth analysis of the 2001 data files that were used to compute the CY 2003 PHP per diem amount, we discovered a significant difference in the amount of outlier payments made to hospitals and CMHCs for PHP. Therefore, we finalized a policy to designate a portion of the estimated 2.0 percent outlier target amount specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS in CY 2004, excluding outlier payments. 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 our payment methodology has any effect on outlier policy. Final Decision: After consideration of the public comments we received, we are maintaining our existing policy to apply a cap on outlier payments as we finalized in the CY 2017 OPPS/ASC final rule with comment period,

6. Fixed-Dollar Threshold

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 through 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 2024, CMHC PHP APCs (5853 or 5854) and IOP APCs (5851 or 5852) are the only APCs for which CMHCs may receive payment under the OPPS, and these APCs are 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 APCs (5853 or 5854) and IOP APCs (5851 or 5852), 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), the CY 2023 OPPS/ASC final rule with comment period (87 FR 72004), and the CY 2024 OPPS/ASC final rule with comment period (88 FR 81836). We did not propose any changes to the fixed-dollar threshold policy for CY 2025, which will continue in CY 2025.

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 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 [[Page 94272]] 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 assess whether a procedure or service meets 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: Most outpatient departments are equipped to provide the services to the Medicare population. The simplest procedure described by the code may be furnished in most outpatient departments. The procedure is related to codes that we have already removed from the IPO list. A determination is made that the procedure is being furnished in numerous hospitals on an outpatient basis. 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 meet the longstanding criteria for removal from the IPO list and are 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 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 through 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 the CY 2025, we received requests from interested parties recommending that certain services be removed from the IPO list. Following our clinical review using the five criteria listed above, we did not find sufficient evidence that any of those services meet the criteria to be removed from the IPO list for CY 2025. Therefore, we did not propose to remove any services from the IPO list for CY 2025. We proposed to add three services for which codes were newly created by the AMA CPT Editorial Panel for CY 2025 to the IPO list. These new services are described by CPT codes 0894T, 0895T, and 0896T, which will be effective on January 1, 2025. After clinical review of these services, we found that they require a hospital inpatient admission or stay and are not appropriate for payment under the OPPS. We proposed to assign these services to status indicator ``C'' (Inpatient Procedures) for CY 2025. The CPT codes, long descriptors, and the proposed CY 2025 payment indicators are displayed in Table 137. Table 137 contains the proposed changes to the IPO list for CY 2025. The complete list of codes describing services that we proposed to designate as inpatient only services beginning in CY 2025 is also included as Addendum E to the CY 2025 proposed rule, which is available via the internet on the CMS website. [[Page 94273]] [GRAPHIC] [TIFF OMITTED] TR27NO24.183 Comment: We received several comments in support of our proposal to add CPT codes 0894T, 0895T, and 0896T to the IPO list for CY 2025. Response: We thank the commenters for their support. Comment: We received one comment requesting that we remove CPT code 22848 (Pelvic fixation (attachment of caudal end of instrumentation to pelvic bony structures) other than sacrum (List separately in addition to code for primary procedure)) from the IPO list. Additionally, the commenter presented at the 2024 Hospital Outpatient Panel (HOP) on August 26, 2024, with the Panel recommending CMS remove the service from the IPO list. The commenter stated that the service described by CPT code 22848 met the following criteria for removal: (1) most outpatient departments are equipped to provide the services to the Medicare population; (2) the simplest procedure described by the code may be furnished in most outpatient departments; (3) the procedure is related to codes that we have already removed from the IPO list; and (4) a determination is made that the procedure is being furnished in numerous hospitals on an outpatient basis. Response: We thank the commenter for their feedback. After further in-depth review of the evidence provided, we agree with the commenter that this service meets criteria 1, 2, 3, and 4 in our regulation text at Sec. 419.23(b)(1) through (4). For criteria 1 and 2, we found that most outpatient departments are equipped to provide this service to the Medicare population and the simplest procedure described by CPT code 22848 may be furnished in most outpatient departments. For criterion 3, the procedure is related to codes that we have already removed from the IPO list. Our review found that this procedure is the related to CPT codes 22612 (Arthrodesis, posterior or posterolateral technique, single interspace; lumbar (with lateral transverse technique, when performed)) and 22614 (Arthrodesis, posterior or posterolateral technique, single interspace; each additional interspace (list separately in addition to code for primary procedure)). Finally, for criterion 4, we found that this procedure is being furnished in numerous hospitals on an outpatient basis. Since CPT code 22848 is an add-on code and will always be packaged, we are reassigning this code to status indicator ``N'' (Items and Services Packaged into APC Rates). Comment: We received one comment requesting that we add CPT code 31647 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with balloon occlusion, when performed, assessment of air leak, airway sizing, and insertion of bronchial valve(s), initial lobe) to the IPO list. The commenter cited that the standard of care for this procedure required a stay of 3 to5 days for this procedure. The commenter was also concerned that, while a procedure on the IPO list can be performed as either outpatient or inpatient, outside payors who depend on the IPO list may refuse to approve inpatient admissions for surgeries not on the IPO list that require inpatient stays over two midnights. Response: We thank the commenter for their feedback. CPT code 31647 was created in 2013 and is currently assigned to APC 5155 (Level 5 Airway Endoscopy) and status indicator ``J1'' (Hospital Part B Services Paid Through a Comprehensive APC). While our review found that the mean length of stay from the OPPS claims for CY 2020-2024 ranged from 2.10 to 3.02 days, showing that this procedure does require an overnight hospital stay for some patients, our review also found that a portion of patients are receiving [[Page 94274]] this service in the hospital outpatient setting. Because a portion of beneficiaries have been receiving this procedure in the hospital outpatient setting, we believe that it is appropriate for CPT code 31647 to remain off the IPO list and assigned to a clinical APC. As stated above, 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. Comment: We received four 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 with comment period (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 was concerned about the transparency of CMS's review of requests to remove or add services to the IPO list and asked that CMS publish a list of these requests in the OPPS/ASC proposed rules. Response: We thank the commenter for their input and will consider it for future rulemaking. As stated above, we review the IPO list on a yearly basis and encourage interested parties to request reviews for a particular code or group of codes for removal or addition to the IPO list, after which our clinicians thoroughly review all information submitted within the context of the established criteria. While we have not historically published pre-proposed rule recommendations for which we did not propose any changes, we do address all codes that are recommended during the public comment period in the OPPS/ASC final rule. Comment: We received one comment requesting that CMS preserve the treating physician's autonomy and create a formal review panel of physicians to evaluate changes to the IPO list. Another commenter also stated that the determination of the appropriate surgical site of service should be left to the judgment of surgeons. Response: We thank the commenters for their feedback. In the CY 2022 OPPS/ASC final rule with comment period, 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. Furthermore, we explained that 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 (86 FR 63673). While we are open to suggestions from interested parties on improving the IPO list review process, we reiterate that recommendations and changes to the IPO list are thoroughly reviewed by our clinicians. In summary, after consideration of the public comments we received, we are finalizing our proposal with modification to add CPT codes 0894T, 0895T, and 0896T to the IPO list and assign them to status indicator ``C'' (Inpatient Procedures). We are also removing CPT code 22848 from the IPO list and reassigning it to status indicator ``N'' (Items and Services Packaged into APC Rates). Table 138 below contains the changes to the IPO list for CY 2025. The complete list of codes that are designated as inpatient only services beginning in CY 2025 is also included as Addendum E to this final rule with comment period, which is available via the internet on the CMS website. [[Page 94275]] [GRAPHIC] [TIFF OMITTED] TR27NO24.184

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

Training, and Medical Nutrition Therapy When Furnished by Institutional Staff to Beneficiaries in Their Homes Through Communications Technology Section 1861(p) of the Act establishes the benefit category for outpatient PT, SLP and OT services (expressly for PT services and, through section 1861(ll)(2) of the Act, for outpatient SLP services and, through section 1861(g) of the Act, for outpatient OT services). Section 1861(p) of the Act defines outpatient therapy services in the three disciplines as those furnished by a provider of services, a clinic, rehabilitation agency, or a public health agency, or by others under an arrangement with, and under the supervision of, such provider, clinic, rehabilitation agency, or public health agency to an individual as an outpatient; and those furnished by a therapist not under arrangements with a provider of services, clinic, rehabilitation agency, or a public health agency. As such, section 1861(p) of the Act defines outpatient therapy services very broadly to include those furnished by providers and other institutional settings, as well as those furnished in office settings. Section 1834(k)(3) of the Act requires payment for outpatient therapy services to be made based on the PFS (via section 1848 of the Act), for all institutional providers listed at sections 1833(a)(8) and (9) of the Act. These providers include clinics, rehabilitation agencies, public health agencies, comprehensive outpatient rehabilitation agencies (CORFs), SNFs, home health agencies (HHAs) (to individuals who are not homebound), hospitals to outpatients or hospital inpatients who are entitled to benefits under Part A but have exhausted benefits for inpatient hospital services during a spell of illness or are not so entitled to benefits under Part A, and all other CORF services. Section 1861(qq) of the Act defines Diabetes Self-Management Training (DSMT) services and authorizes CMS to regulate Medicare DSMT outpatient services. A ``certified provider'' of DSMT is further defined in section 1861(qq)(2)(A) of the Act as a physician or other individual or entity designated by the Secretary who meets certain quality requirements described in section 1861(qq)(2)(B) of the Act. In CY 2000, we finalized a standalone rule titled ``Medicare Program; Expanded Coverage for Outpatient Diabetes Self-Management Training and Diabetes Outcome Measurements.'' In that rule, we finalized that payment for outpatient DSMT would be made under the PFS (65 FR 83132). We further established that, in the case of payments made to other approved entities, such as hospital outpatient departments, ESRD facilities, and durable medical equipment suppliers, the payment would be equal to the amounts established under the PFS and made under the appropriate payment systems (65 FR 83142). [[Page 94276]] Section 1861(s)(2)(V) of the Act authorizes Medicare Part B coverage of medical nutrition therapy services (MNT) for certain beneficiaries who have diabetes or a renal disease. In the CY 2002 PFS final rule, we established that payment for MNT services furnished in the institutional setting, including hospital outpatient departments (HOPDs), would be made under the PFS, not under the hospital Outpatient Prospective Payment System (OPPS) (66 FR 55279). Telehealth services may be paid under the PFS only when the services are furnished to a beneficiary at an originating site (defined at Sec. 410.78), which prior to the PHE was not typically defined to include a beneficiary's home. During the PHE for COVID-19, outpatient therapy services, DSMT, and MNT could be furnished via a telecommunications system to beneficiaries in their homes, and bills for these services were submitted and paid either separately or as part of a bundled payment, when either personally provided by the billing practitioner or provided by institutional staff and billed for by institutions, such as HOPDs, SNFs, and HHAs. For professionals, CMS used waiver authority provided under section 1135 of the Act to expand the range of practitioners that could serve as distant site practitioners for Medicare telehealth services as described in section 1834(m)(4)(E) of the Act and 42 CFR 410.78(b)(2), as well as to waive the originating site requirements for Medicare telehealth services described in section 1834(m)(4)(C) of the Act. This allowed for outpatient therapy services to be furnished and billed by therapists (PTs, OTs and SLPs) in private practice, and for DSMT and MNT to be furnished via Medicare telehealth to beneficiaries in urban areas, as well as rural areas, including to beneficiaries located in their homes.\151\ --------------------------------------------------------------------------- \151\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf. --------------------------------------------------------------------------- When CMS expanded the types of practitioners who may bill for their services when furnished as Medicare telehealth services from a distant site to include therapists using section 1135 waiver authority during the PHE for COVID-19, CMS generally took the position for services furnished in HOPDs that separate waiver authority was needed to allow hospitals to bill for services furnished by hospital staff through communication technology to beneficiaries in their homes. CMS implemented the Hospitals Without Walls (HWW) policy that relied on waiver authority, which allowed hospitals to reclassify patients' homes as part of the hospital. HWW allowed hospitals to bill two different kinds of fees for services furnished remotely to patients in their homes: (1) hospital facility payment in association with professional services billed under the PFS; and (2) single payment for a limited number of practitioner services, when statute or other applicable rules only allow the hospital to bill for services personally provided by their staff. These services are either billed by hospitals or by professionals, there would not be separate facility and professional billing. This latter category includes outpatient therapy services, DSMT, and MNT. However, while CMS relied upon PHE-specific waiver authority to allow hospital billing for these services, CMS also issued guidance instructing HOPDs to bill using modifiers consistent with those used for Medicare telehealth services. For further background, we refer readers to https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf. In the same referenced document, CMS also issued specific guidance for other institutional providers of therapy services to use modifier 95 (indicating a Medicare telehealth service), along with the specific bill types for outpatient therapy services furnished by their staff. The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328) extended many of the flexibilities that were available for Medicare telehealth services during the PHE for COVID-19 under emergency waiver authorities, including adding PTs, OTs and SLPs as distant site practitioners through the end of CY 2024. In developing post-PHE guidance, CMS initially took the position that institutions billing for services furnished remotely by their employed practitioners (where the practitioners do not bill for their own services), would end with the PHE for COVID-19 along with the HWW waivers.\152\ However, after reviewing input from interested parties, as well as relevant guidance, including applicable billing instructions, we considered whether certain institutions, as the furnishing providers, can bill for certain remotely furnished services personally performed by employed practitioners. --------------------------------------------------------------------------- \152\ https://www.cms.gov/files/document/frequently-asked-questions-cms-waivers-flexibilities-and-end-covid-19-public-health-emergency.pdf. --------------------------------------------------------------------------- In the CY 2024 PFS final rule, we stated that, while we considered how we might address this topic in future rulemaking, in the interests of maintaining access to outpatient therapy, DSMT, and MNT services furnished remotely by institutional staff to beneficiaries in their homes consistent with the accessibility of these services when furnished by professionals via Medicare telehealth, we finalized that we would continue to allow institutional providers to bill for these services when furnished remotely in the same manner they have during the PHE for COVID-19 through the end of CY 2024. We sought comment on current practice for these services when billed, including how and to what degree they continue to be provided remotely to beneficiaries in their homes. We sought comment as to whether these services may fall within the scope of Medicare telehealth at section 1834(m) of the Act or if there are other relevant authorities CMS might consider in future rulemaking. For further information on this comment solicitation, please see the discussion in the CY 2024 PFS final rule (88 FR 78886 through 78888). For DSMT specifically, we stated that the clinical staff personally delivering the service may be a type of practitioner authorized to furnish Medicare telehealth services under section 1834(m) of the Act; but we also understood that DSMT may be provided by other types of staff. Accordingly, we noted in an FAQ that we were exercising enforcement discretion in reviewing the telehealth eligibility status of the practitioner personally providing any part of a remotely furnished DSMT service, so long as the persons were otherwise qualified to provide the service until the end of 2024. For more background we refer readers to https://www.cms.gov/files/document/frequently-asked-questionscms-waivers-flexibilities-and-end-covid19-public-health-emergency.pdf. While the amendments made by section 4113 of the CAA, 2023 to section 1834(m) of the Act have continued to expand the range of practitioners eligible to furnish telehealth services through CY 2024, without subsequent legislation these practitioners will no longer be able to bill for Medicare telehealth services beginning January 1, 2025. In the CY 2024 PFS final rule, we articulated the importance of maintaining access to outpatient therapy, DSMT, and MNT services furnished remotely by institutional staff to beneficiaries in their homes consistent with the availability of these services when furnished by professionals via Medicare telehealth as part of our rationale for allowing institutional providers to bill for these services when furnished remotely in the [[Page 94277]] same manner they have during the PHE for COVID-19 through the end of CY 2024. We recognize that for the past several years, through the PHE for COVID-19 and several legislative extensions of PHE-related flexibilities for Medicare telehealth services under section 1834(m) of the Act, we have generally aligned payment policies for outpatient therapy, DSMT, and MNT services furnished remotely by hospital staff to beneficiaries in their homes with policies for Medicare telehealth services. We noted in the CY 2025 OPPS/ASC proposed rule that, to the extent that therapists and DSMT and MNT practitioners continue to be distant site practitioners for purposes of Medicare telehealth services, we anticipated aligning our policy for these services with policies under the PFS and continuing to make payment to the hospital for these services when furnished by hospital staff. Comment: Commenters supported our clarification that we would continue to align our policies for outpatient therapy, DSMT, and MNT services when furnished by hospital staff with the Medicare telehealth policies that apply when these services are billed by the same clinicians but in private practice. Commenters stated that aligning these policies would ensure clarity and consistency for providers and beneficiaries. Other commenters, while supportive, requested that CMS provide additional guidance for how outpatient therapy, DSMT, and MNT services should be billed when provided by hospitals staff versus how these services should be billed when furnished by practitioners in private practice. A few commenters suggested that CMS permanently allow payment for remote or virtual services under the OPPS. Response: We thank commenters for their support for our clarification. Section 4113 of the CAA, 2023 expanded the range of practitioners eligible to furnish telehealth services only through CY 2024, which included PTs, OTs, and SLPs. Beginning January 1, 2025, these practitioners will no longer be able to bill for Medicare telehealth services. Consequently, beginning January 1, 2025, we likewise will no longer pay for outpatient therapy, DSMT, and MNT services when furnished remotely by hospital staff to beneficiaries in their homes. As we have stated before, and as noted by other commenters, continuing to align our policies for outpatient therapy, DSMT, and MNT services when furnished by hospital staff with the Medicare telehealth policies that apply when these services are billed by the same clinicians but in private practice ensures clarity and consistency for providers and beneficiaries. We may consider refinements to our policies in future rulemaking.

2. Periodic In-Person Visits for Mental Health Services Furnished

Remotely by Hospital Staff to Beneficiaries in Their Homes In the CY 2023 OPPS/ASC 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. 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 CAA, 2023, 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. In the CY 2024 OPPS final rule with comment period, we reiterated that we believe it is important to maintain consistent requirements for these policies across payment systems; therefore, we finalized delaying the in-person visit requirements for mental health services furnished remotely by hospital staff to beneficiaries in their homes until January 1, 2025. As such, these in-person visit requirements are currently set to take effect for services furnished on or after January 1, 2025 (88 FR 81874). However, we noted in the CY 2025 OPPS/ASC proposed rule that, to the extent that these in-person visit requirements are delayed in the future for professionals billing for mental health telehealth services under the PFS, we anticipate that we would align the requirements for mental health services furnished remotely to beneficiaries in their homes through communications technology with mental health services furnished via Medicare telehealth in future rulemaking. Comment: Commenters supported our clarification that we would continue to align our policies for in person visit requirements for mental health services furnished remotely to beneficiaries in their homes through communications technology with similar policies for mental health services furnished via Medicare telehealth. Of these supportive comments, many recommended that CMS permanently remove the in-person visit requirements for these services. Response: We appreciate the supportive comments but note that the in-person visit requirement for professionals billing for mental health services via Medicare telehealth applies again beginning January 1, 2025. We continue to believe in the principle of aligning payment policy for remotely furnished mental health services across the OPPS and PFS payment systems, and accordingly, the in-person visit requirements will also apply for mental health services furnished remotely by hospital staff to beneficiaries in their homes through communications technology beginning January 1, 2025. We may consider refinements to our policy through future rulemaking.

3. HOPD Payment for Telemedicine Evaluation and Management Services

The CPT Editorial Panel created 17 new codes describing audio/video and audio-only telemedicine E/M services. For further discussion of these 17 new codes and CMS' related proposals, please see section II.E.4.18 of the CY 2025 PFS proposed rule. In 2014, CMS established HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of [[Page 94278]] a patient) 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. Given the similarities between the new telemedicine E/M code set and the office/outpatient E/M code set, we believe that the telemedicine E/M codes fall within the scope of the hospital outpatient clinic visit policy because the predecessor codes (the office/ outpatient E/M code set) would be reported by hospitals using HCPCS code G0463. Under the hospital outpatient clinic visit policy, the CPT codes describing office/outpatient E/M visits are not recognized under the OPPS and instead hospitals report HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient) when billing for the facility costs associated with an outpatient E/M visit. Therefore, we proposed to not recognize the telemedicine E/M code set under OPPS. We invited comment on the hospital resources associated with the telemedicine E/M services, particularly any resource costs that would not be included in the payment for HCPCS code G0463. We also invited comment, should CMS finalize separate payment for these telemedicine E/M codes under the PFS, on the resource costs that would be associated with these services for hospitals and whether we should develop separate coding to describe the resource costs associated with a telemedicine E/M service. We received public comments on the proposal. The following is a summary of the comments we received and our responses. Comment: Some commenters supported our proposal to maintain our policy of not recognizing office/outpatient E/M visits, including those furnished via telemedicine, as payable under the OPPS and instead using HCPCS code G0463 to capture the associated facility costs. Other commenters recommended that CMS allow HCPCS code G0463 to be reported when the beneficiary is not physically in the hospital, while others encouraged CMS to provide separate payment for the telemedicine E/Ms, including recommending clinical APC assignments. Response: We thank commenters for the additional information and may consider this issue, including any refinements to our clinic visit policy, for future rulemaking. As we are not finalizing payment for the telemedicine E/M CPT codes under the PFS, we do not believe there is a programmatic need to recognize these codes for payment under the OPPS. After consideration of the public comments we received, we are finalizing our proposal not to recognize the telemedicine E/M code set under the OPPS as proposed.

B. Virtual Direct Supervision of Cardiac Rehabilitation (CR), Intensive

Cardiac Rehabilitation (ICR), Pulmonary Rehabilitation (PR) Services and Diagnostic Services Furnished to Hospital Outpatients

1. Background

a. Virtual Direct Supervision of CR, ICR and PR Services Furnished to Hospital Outpatients (42 CFR 410.27(a)(1)(B)(1)) In the interim final rule with comment period 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) \153\ 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 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)(B) \154\ 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). --------------------------------------------------------------------------- \153\ In the CY 2023 OPPS/ASC final rule with comment period, we removed Sec. 410.27(a)(1)(iv)(D) in its entirety and added its language regarding pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitation services and the virtual presence of a physician through audio/video real-time communications technology during the PHE to the newly designated Sec. 410.27(a)(1)(iv)(B)(1) (87 FR 72024). \154\ Ibid. --------------------------------------------------------------------------- In the CY 2023 OPPS/ASC final rule with comment period, we finalized a policy to extend the revised definition of direct supervision of CR, ICR, and PR to include the presence of the supervising practitioner through two-way, audio/video telecommunications technology until December 31, 2023 (87 FR 72019 and 72020). In the CY 2024 OPPS/ASC final rule with comment period, we finalized a policy to further revise Sec. 410.27(a)(1)(iv)(B)(1) \155\ to allow for the direct supervision requirement for CR, ICR, and PR to include the 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 were eligible to supervise these services beginning in CY 2024 (88 FR 81863 through 81867). --------------------------------------------------------------------------- \155\ Ibid. --------------------------------------------------------------------------- b. Virtual Direct Supervision of Diagnostic Services Furnished to Hospital Outpatients (42 CFR 410.28(e)(2)(iii)) In the April 6th COVID-19 IFC, for consistency with the revisions made to 42 CFR 410.27(a)(1)(iv)(D) \156\ and 410.32(b)(3)(ii), we changed the regulation at 42 CFR 410.28(e) 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 requirement for diagnostic 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 (85 FR 19245 and 19246). --------------------------------------------------------------------------- \156\ Ibid. --------------------------------------------------------------------------- In the CY 2023 OPPS/ASC final rule with comment period, to ensure consistency with additional revisions made to 42 CFR 410.27(a)(1)(iv)(B)(1) and 410.32(b)(3)(ii) extending the end date of the flexibility allowing for the virtual supervision of the services governed by those regulations, we revised Sec. 410.28(e) to extend the end date of the flexibility allowing for the virtual supervision of outpatient diagnostic services through audio/video real-time communications technology (excluding audio-only) from the end of the PHE to the end of the calendar year [[Page 94279]] in which the PHE ends (87 FR 72024 through 72026). In the CY 2024 final OPPS rule with comment period, to again ensure consistency with further revisions made to 42 CFR 410.27(a)(1)(iv)(B)(1) and 410.32(b)(3)(ii) extending the end date of the flexibility allowing for the virtual supervision of the services governed by those regulations, we revised Sec. 410.28(e) to extend the end date of the flexibility allowing for the virtual supervision of outpatient diagnostic services through audio/video real-time communications technology (excluding audio-only) through December 31, 2024 (88 FR 81866 and 81867).

2. Extension of Virtual Direct Supervision of CR, ICR, PR Services and

Diagnostic Services Furnished to Hospital Outpatients Through December 31, 2025. In the CY 2025 PFS proposed rule, we proposed to revise the definition of direct supervision at Sec. 410.32(b)(3)(ii) to extend the availability of virtual direct supervision of therapeutic and diagnostic services under the PFS through December 31, 2025. As described in that proposed rule, we proposed this extension based on our concern that an immediate reversion to the pre-PHE definition of direct supervision would prohibit virtual direct supervision, which may present a barrier to access to many services that have been facilitated by our PHE-related policy over the past several years; and that physicians and other practitioners need time to reorganize their practice patterns established during the PHE to reimplement the pre-PHE approach to direct supervision without the use of audio/video technology. As we explained in the CY 2025 OPPS/ASC proposed rule, in addition to desiring uniformity under the PFS and OPPS in how regulations are applied to similarly situated providers, the beneficiary access and provider preparedness concerns that motivated us to propose extending the availability of virtual direct supervision of therapeutic and diagnostic services under the PFS through December 31, 2025, were also concerns with respect to the direct supervision of CR, ICR, PR and diagnostic services under the OPPS. Consequently, in the CY 2025 OPPS/ ASC proposed rule, we proposed to revise Sec. Sec. 410.27(a)(1)(iv)(B)(1) and 410.28(e)(2)(iii) to allow for the direct supervision of CR, ICR, PR services and diagnostic services via audio- video real-time communications technology (excluding audio-only) through December 31, 2025. The following is a summary of the comments we received on the proposal and our responses to those comments. Comment: All commenters supported our proposal to make conforming revisions to Sec. Sec. 410.27 and 410.28 to allow for the direct supervision of CR, ICR, PR services and diagnostic services via audio- video real-time communications technology (excluding audio-only) through December 31, 2025. These commenters indicated that this extension would reduce burden on providers, ensure the continuity of ongoing services, allow more time for providers to reorganize and readjust policies to meet pre-PHE requirements, improve patient access to historically underutilized services 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 commenters additionally requested that the availability of virtual direct supervision of these services be made permanent, arguing that virtual supervision has been in place long enough for its safety to have been established and any serious problems identified. One commenter expressed concern that if virtual supervision was not made permanent it would be more difficult to recruit and retain non-physician staff with the necessary training and experience to safely deliver services under virtual supervision and to recruit and retain physicians who can effectively provide virtual supervision because those staff and physicians would be concerned that the policy enabling remote supervision is temporary and could be revoked within a year. One commenter requested that once the virtual supervision of these services 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 CR, ICR, PR and diagnostic services permanent and will take them under consideration for future rulemaking as we continue to evaluate safety, quality of care, and other considerations related to virtual direct supervision. Comment: One commenter, while supporting the proposed extension, specifically requested that the extension not be made permanent. The commenter opined that permanently allowing for the virtual direct supervision of CR, ICR, PR and diagnostic services would be undesirable because it would increase the amount of physician ``incident to'' billing (a Medicare billing provision that applies in the office or clinic setting and allows medical services to be performed by auxiliary personnel as an incident to the services of the billing practitioner and under their supervision) for services provided by PAs and NPs, which would obscure the extent to which PAs and NPs are actually performing the services. Response: We appreciate the commenter's input regarding the appropriate attribution of services performed by PAs and NPs when those services are billed ``incident to'' a physician's service and we look forward to reviewing the information provided as we consider the most appropriate way to balance patient safety concerns with the interest of supporting access that we may address in future rulemaking. We reiterate that we did not propose to extend the availability of the direct supervision of CR, ICR, PR services and diagnostic services via audio-video real-time communications technology (excluding audio-only) beyond December 31, 2025. Comment: One commenter requested that audio-only virtual supervision of CR, ICR and PR be allowed during system downtimes or situations where patients may not be comfortable or willing to participate in the video portion of the supervision of their CR, ICR, and PR. The commenter also contended that allowing this flexibility would reduce barriers to care for patients with disabilities or mobility issues who might have trouble getting into a physical location. Response: We appreciate the commenter's suggestion that we allow for the virtual supervision of CR, ICR, and PR to be provided via audio-only, however, under the applicable definition of direct supervision, the physician/practitioner is required to be available using both audio and video. As a reminder, direct supervision means that the physician or nonphysician practitioner must be immediately available to furnish assistance and direction throughout the performance of the procedure. We have traditionally defined ``immediately available'' to require the physical presence of the supervising practitioner, given the importance of certain services being furnished under direct supervision to ensuring quality of care and patient safety, and in particular the ability of the supervising practitioner to intervene if complications arise. As we continue to evaluate safety, quality of care, and other considerations related to virtual direct supervision and the role of virtual direct supervision after the COVID-19 [[Page 94280]] PHE, we proposed to temporarily extend the availability of virtual direct supervision of therapeutic and diagnostic services only through December 31, 2025. To ensure quality of care and patient safety, any direct supervision furnished remotely will continue to require the use of real-time audio and visual interactive telecommunications technology. We note that does not necessarily mean that any interaction between the patient and the physician/practitioner supervising the service would require a video component. Comment: One commenter questioned whether patient access to care is fully addressed by the virtual supervision of CR services in the absence of nationally available free or low-income access to broadband quality technology and telecommunications services. The commenter requested that CMS simultaneously adjust the facility and non-facility policies and prices under the Physician Fee Schedule (PFS) for outpatient CR services (HCPCS codes 93797 or 93798) so that Medicare pays hospital outpatient departments the PFS non-facility price at higher than current rates to allow facilities to subsidize the cost of supplying patients with broadband internet technologies for the duration of their enrollment in cardiac rehabilitation sessions. Response: We appreciate the commenter's suggestion, but we note this comment is out of scope for this final rule. Comment: One commenter encouraged CMS to consider additional services that could be safely supervised virtually in future years. Response: We thank the commenter for their input and will consider taking it under consideration in future rulemaking. Comment: Two commenters requested that CMS allow for CR and ICR to be provided virtually to patients in their homes, contending that CMS has the authority to do so under existing statute. These commenters stated that CMS has the authority under section 1861(eee) of the Act to (1) designate a patient's home as a setting for delivery of CR and ICR services and (2) allow CR and ICR services to be delivered virtually. Response: We appreciate commenters' suggestion that section 1861(eee) of the Act provides the authority to furnish virtual CR and ICR services to outpatients in their homes and we will take their interpretation under consideration in future rulemaking. After consideration of the public comments we received, we are finalizing, without modification, our proposal to revise Sec. Sec. 410.27(a)(1)(iv)(B)(1) and 410.28(e)(2)(iii) to allow for the direct supervision of CR, ICR, PR services and diagnostic services via audio- video real-time communications technology (excluding audio-only) through December 31, 2025.

C. All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs Provided

by Indian Health Service and Tribal Facilities

1. Background

In the CY 2000 OPPS final rule (65 FR 18434), CMS implemented the PPS for hospital outpatient services furnished to Medicare beneficiaries, as set forth in section 1833(t) of the Act. In this final rule, we noted that the 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).'' We stated that these services would ``continue to be paid under separately established rates which are published annually in the Federal Register'' and, in the CY 2002 OPPS/ASC final rule (66 FR 59856), we finalized a 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. 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.\157\ Due to the higher cost of living in Alaska, separate rates are calculated for Alaska and the lower 48 States. For CY 2024, the Medicare Outpatient per Visit Rate is $667 for the lower 48 states and $961 for Alaska.\158\ --------------------------------------------------------------------------- \157\ https://www.ihs.gov/BusinessOffice/reimbursement-rates/. \158\ 88 FR 87789 (December 19, 2023); https://www.federalregister.gov/documents/2023/12/19/2023-27815/reimbursement-rates-for-calendar-year-2024. --------------------------------------------------------------------------- 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 and biologics (hereinafter referred to as ``drugs'') along with more complex and expensive services. While the majority of IHS and tribal facilities appear to be well served by the AIR, some IHS and tribal facilities provide specialized services for which the AIR might not adequately represent Medicare's share of costs. If providing a drug or service costs IHS and tribal facilities thousands of dollars more than the payment they receive through the AIR, it is likely not financially feasible for these facilities to routinely provide that drug or service. For example, the cost of providing a frequently used cancer drug such as Opdualag (HCPCS code 00003-7125), which has a per day cost of $28,975, greatly exceeds the $667 payment an IHS or tribal 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. This constitutes a significant equity and beneficiary access concern if IHS and tribal hospitals are not able to provide oncology services or other services that require high-cost drugs because the hospital would always receive payment for those services that is far below what it would have to pay to acquire those high-cost drugs. Consequently, in the CY 2024 OPPS/ASC proposed rule, we sought comment on whether Medicare should pay separately for certain high-cost drugs provided by IHS and tribal facilities and, if so, how we might do so. Among other topics, we specifically requested input on which drugs it would be appropriate to pay separately for (high-cost oncology drugs or all high-cost drugs), how we might define high-cost drugs (for example, a list of named drugs versus any drugs exceeding a certain cost threshold), and what the appropriate payment amount for the separately paid drugs should be (ASP plus 6 percent, which is what hospitals are generally paid under the OPPS for separately payable drugs, or the Federal Supply Schedule (FSS), which is where IHS and tribal hospitals acquire the majority of their drugs at rates significantly lower than ASP plus 6 percent). For a full discussion of the comment solicitation, we refer readers to the CY 2024 OPPS/ASC proposed rule (88 FR 49741 through 49742). Commenters, including a tribal facility, the CMS Tribal Technical Advisory Group (TTAG), organizations representing tribal healthcare providers, pharmaceutical companies, and other interested parties, expressed universal support for establishing a policy that would allow IHS and tribal healthcare facilities to receive separate payment outside of the AIR for high-cost drugs. The preferred approach of those [[Page 94281]] commenters who provided input on how to define a high-cost drug eligible for separate payment was to treat the amount of the Medicare Outpatient per Visit Rate for the lower 48 States' AIR (hereinafter referred to as ``the lower 48 AIR'') as a payment threshold. Under this approach, if the cost of a particular drug is less than or equal to the lower 48 AIR, the provider would not receive a separate payment for the drug and if the cost of the drug was more than the lower 48 AIR, then the provider would receive a separate payment for the drug. Commenters noted that this payment approach is currently being used for all drugs (oncology and otherwise) receiving payment through Arizona Medicaid (AHCCCS) for IHS and tribal facilities located in Arizona. With respect to the payment amount, several commenters requested that separately payable drugs furnished by IHS and tribal facilities be paid at a rate of ASP plus 6 percent rather than the FSS rate. These commenters argued that the IHS is chronically underfunded and that paying ASP plus 6 percent for high-cost drugs could help with remedying those funding issues. For a full discussion of the comments we received as a result of our comment solicitation and our responses to those comments, we refer readers to the CY 2024 OPPS/ASC final rule with comment period (88 FR 81896 through 81897).

2. AIR Add-On Payment for High-Cost Drugs Provided by Indian Health

Service and Tribal Facilities In light of the equity and beneficiary access concerns that prompted our CY 2024 comment solicitation and the input received in response to that solicitation, in the CY 2025 OPPS/ASC proposed rule we proposed, starting January 1, 2025, to separately pay IHS and tribal hospitals \159\ for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the AIR using the authority under which the annual AIR is calculated.\160\ We emphasized that the amount of the proposed add-on payment would not be carved out of the annual AIR payment amount calculation. In other words, we proposed that the add-on payment would have no effect on the calculation of the annual AIR payment amount. We invited comment on separately paying IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through the establishment of an add-on payment to the AIR using the authority under which the annual AIR is calculated. --------------------------------------------------------------------------- \159\ IHS Critical Access Hospitals (CAHs) are paid for covered outpatient services based on 101 percent of an all-inclusive facility specific rate rather than the national AIR rate. Consequently, they are excluded from the proposed separate payment policy. \160\ Sections 321(a) and 322(b) of the Public Health Service Act (42 U.S.C. 248), Public Law 83-568 (42 U.S.C. 2001(a)), and the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.). --------------------------------------------------------------------------- Comment: All commenters on the proposed policy supported separately paying IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through the establishment of an add-on payment to the AIR using the authority under which the annual AIR is calculated. These commenters cited as the basis for their support the need to address beneficiary equity and access concerns resulting from the current payment policy for high-cost drugs under the AIR, historic and ongoing health disparities of American Indian and Alaska Native people compared to other Americans, including lower life expectancy, disproportionate disease burden and higher rates of colorectal, kidney, liver, lung, and stomach cancers, ensuring the continued viability of IHS and tribal hospital outpatient specialty programs currently in operation and enabling IHS and tribal facilities not currently offering specialty services to begin doing so. Several of these commenters additionally expressed support for the exclusion of the add-on payment from the calculation of the annual AIR payment, stating that it was a critically important component of the proposal because it would ensure that the add-on payment would have no effect on IHS and tribal facilities that do not seek reimbursement for high-cost drugs. Response: We thank the commenters for their support. After consideration of the public comments we received on the proposed policy to separately pay IHS and tribal hospitals for high- cost drugs furnished in hospital outpatient departments through the establishment of an add-on payment to the AIR using the authority under which the annual AIR is calculated and to exclude the add-on payment from the calculation of the annual AIR payment, we are finalizing the policy as proposed. In the CY 2025 OPPS/ASC proposed rule, we proposed that the drugs to which the add-on payment would apply would not be limited to high- cost oncology drugs but would include all high-cost drugs furnished in hospital outpatient departments of IHS and tribal hospitals to the extent those drugs were covered under Medicare Part B and would be paid for under the OPPS if furnished by a hospital paid under that system. In determining which drugs would be eligible for the add-on payment, we considered limiting the add-on payment to high-cost oncology drugs. However, as we discussed in the CY 2025 OPPS/ASC proposed rule, we determined that it would be appropriate to apply the add-on payment to all high-cost drugs for several reasons. First, the same equity and access concerns that supported utilizing an add-on payment for oncology drugs also supported utilizing an add-on for high-cost drugs used in other care specialties. Although this issue arose in the context of removing barriers to beneficiaries' access to high-cost oncology drugs, we concluded that there were presumably similar barriers to other specialties that used high-cost drugs that would be addressed through a broader application of the add-on payment. Second, we determined that applying the add-on payment to all high-cost drugs would eliminate the possibility of unintentionally excluding an oncology drug from separate payment due to the inherent challenge of defining a class of drugs. Third, the proposal would parallel how drugs are being paid for under Arizona Medicaid (AHCCCS) for IHS and tribal facilities. In the CY 2025 OPPS/ASC proposed rule we invited comment on applying the add-on payment to all high-cost drugs furnished in hospital outpatient departments of IHS and tribal hospitals to the extent those drugs were covered under Medicare Part B and would be paid for under the OPPS if furnished by a hospital paid under that system. Comment: Several commenters supported applying the add-on payment to all high-cost drugs furnished in hospital outpatient departments of IHS and tribal hospitals to the extent those drugs are covered under Medicare Part B and would be paid for under the OPPS if furnished by a hospital paid under that system. These commenters observed that there are many other types of high-cost drugs that can be administered in an outpatient hospital setting that are unrelated to oncology and that the same equity and access concerns that support an add-on payment for high-cost oncology drugs applies to other high-cost drugs. Response: We thank the commenters for their support. After consideration of the public comments we received on the proposed policy to apply the add-on payment to all high-cost drugs furnished in hospital outpatient departments of IHS and tribal hospitals to the extent those drugs are covered under Medicare Part B and would be paid for under the OPPS if furnished by a hospital paid under that [[Page 94282]] system, we are finalizing the policy as proposed. As to what constitutes a high-cost drug, we proposed in the CY 2025 OPPS/ASC proposed rule to define high-cost drugs for the purpose of the policy as all drugs covered under Medicare Part B and for which payment would otherwise be made under the OPPS whose per day cost exceeds two times the lower 48 AIR ($1,334 in CY 2024). We proposed a threshold greater than the lower 48 AIR to account for the fact that IHS and tribal hospitals would continue to receive the lower 48 AIR payment, in addition to the add-on payment, for encounters that include a high-cost drug. While we acknowledged that it was true that under the Arizona Medicaid program, IHS and tribal hospitals are paid the lower 48 AIR payment in addition to an add-on payment for drugs whose costs exceed the lower 48 AIR, we were concerned that providing separate payment for drugs whose costs only slightly exceed the lower 48 AIR could result in excessive payment for those drugs. For example, we pointed out that for a drug costing $700, using the CY 2024 lower 48 AIR as the threshold for our proposal would result in a payment of at least $1,367 (the $667 lower 48 AIR encounter payment plus an add-on payment for the high-cost drug as calculated under the payment methodology we proposed in the CY 2025 OPPS/ASC proposed rule) for the provision of a drug whose cost exceeds the lower 48 AIR by only $33.00. We concluded that such an outcome would be at odds with the objective of the proposed policy, which was to provide adequate payment for drugs that are high cost in relation to the lower 48 AIR. Consequently, in the CY 2025 OPPS/ASC proposed rule, we proposed two times the lower 48 AIR as the threshold triggering the add-on payment because that amount would ensure that the add-on payment would apply only to drugs whose costs significantly exceed the lower 48 AIR. The proposed cost-multiplier approach was also consistent with how CMS has implemented thresholds relating to payments to hospitals under other payment systems. For example, the OPPS outlier policy \161\ requires that the cost of a service exceed 1.75 times the payment amount for the service to qualify for an additional payment. Similarly, the OPPS two-times rule requires that the highest calculated cost of an individual procedure categorized to any given Ambulatory Payment Classification (APC) not exceed two times the calculated cost of the lowest cost procedure categorized to that same APC. --------------------------------------------------------------------------- \161\ 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. Outlier payments are provided on a service basis when the cost of a service exceeds the APC payment amount multiplier threshold (the APC payment amount multiplied by 1.75) as well as the APC payment amount plus a fixed-dollar amount threshold (the APC payment plus a certain dollar amount). --------------------------------------------------------------------------- In the CY 2025 OPPS/ASC proposed rule, we stated that an alternative to our proposal to set the threshold at two times the lower 48 AIR would be to set the threshold at the lower 48 AIR despite our concerns about excessive payment. We also stated that another alternative would be to set the threshold at 1.75 times the lower 48 AIR ($1,167.25 in CY 2024) to align it with the multiplier used to calculate the threshold triggering outlier payments under the OPPS. In the CY 2025 OPPS/ASC proposed rule, we invited comment on the alternatives of using the lower 48 AIR or 1.75 times the lower 48 AIR as the threshold amount for triggering the add-on payment for high-cost drugs. Comment: Three commenters provided input on setting the threshold at the lower 48 AIR, agreeing with CMS that providing a separate payment for drugs whose costs only slightly exceed the lower 48 AIR could result in excessive payment because the facility would be receiving the lower 48 AIR payment plus the add-on payment for the drug. Response: We thank commenters for their feedback. Comment: Four commenters suggested that we set the threshold at 1.75 times the lower 48 AIR. Three of these commenters argued that the threshold be set at 1.75 times the lower 48 AIR because (1) doing so would align it with the multiplier used to calculate the threshold triggering outlier payments under the OPPS and (2) there were, based on the proposed rule data and example threshold of $1,334, three high-use drugs (Bendeka [Bendamustine HCL], Xembify [immune globulin] and Neulasta On-Pro [Pegfilgrastim]) that would not qualify for the add-on payment if the threshold was two times the lower 48 AIR but would qualify for the add-on payment if the threshold was 1.75 times the lower 48 AIR and one high-use drug (Vivitrol [Naltrexone]) that would qualify for the add-on payment if the threshold was two times the lower 48 AIR but was sufficiently close to the threshold that it could easily fall below the threshold and not qualify for separate payment in the future. Response: We appreciate the commenters' preference for using 1.75 times the lower 48 AIR, but our view is that two times the lower 48 AIR is the most appropriate threshold to use as it would best ensure that only those drugs whose costs significantly exceed the amount of the annual lower 48 AIR payment would qualify for the add-on payment. It is also consistent with the two-times rule the OPPS uses to determine Ambulatory Payment Classification (APC) levels and the calculation of the diagnostic radiopharmaceutical packaging threshold that that we are finalizing in section II.A.3.c.(2) of this rule. With respect to the four high-use drugs referenced by the commenters, using final rule data, Bendeka and Xembify have per day costs that are well above $1,334 and thus qualify for the add-on payment under two times the lower 48 AIR threshold. Neulasta has a per day cost significantly below the lower 48 AIR of $667 and thus would not qualify for the add-on payment under any threshold that we are considering. Vivitrol has a per day cost that is slightly above $1,334 and therefore qualifies for the add- on payment under two times the lower 48 AIR threshold. While we acknowledge that this closeness to the threshold could cause Vivitrol to fluctuate from qualifying for separate payment to not qualifying for separate payment on an annual basis, there will always be drugs for which this is true when using any threshold-based payment criterion. Comment: Two commenters suggested that we use non-AIR thresholds to calculate the list of drugs for which the add-on payment would be made. One of these commenters suggested that we use the standard drug packaging threshold of $140 to better recognize the costs for IHS and tribal facilities that furnish expensive drug treatment services to Native Americans with cancer. The other commenter, expressing concern that the proposed threshold was too high and might exclude some drugs that are clinically necessary and significantly costly for IHS and tribal hospitals, suggested that CMS establish a threshold based on CMS' specialty tier cost threshold criteria under Medicare Part D.\162\ --------------------------------------------------------------------------- \162\ 42 CFR 423.104(d)(2)(iv). --------------------------------------------------------------------------- Response: We appreciate the commenters' suggested alternatives to using a multiple of the AIR as the threshold; however, we do not think that these thresholds would achieve the objective of providing a separate add-on payment only for drugs that greatly exceed the lower 48 AIR. [[Page 94283]] Comment: One commenter suggested that, regardless of which approach CMS selects to determine the high-cost threshold, that CMS ``categorically apply separate payment'' for biosimilar \163\ products when administered in IHS and tribal facilities. The commenter observes that American Indians and Alaska Natives experience disparities in healthcare access and outcomes and argues that by ensuring that biosimilar products are financially accessible in IHS and tribal facilities, CMS would be taking a step toward reducing these disparities and promoting health equity. The commenter also stated that a ``separate payment system'' for biosimilar products could also incentivize their use over more expensive reference products, fostering a competitive market that may, in turn, lead to further reductions in prescription drug costs over time. --------------------------------------------------------------------------- \163\ A biosimilar is a biologic medication. It is highly similar to a biologic medication already approved by FDA--the original biologic (also called the reference product). --------------------------------------------------------------------------- Response: It isn't entirely clear what the commenter means by ``categorically apply separate payment'' for biosimilar products or a ``separate payment system'' for biosimilar products, but it appears that the commenter is suggesting that all biosimilars be paid for separately when furnished by an IHS or tribal hospital outpatient department regardless of the payment threshold. We appreciate the commenter's suggestion; however, we do not think that paying separately for all biosimilars would achieve the objective of providing a separate add-on payment only for drugs and biologicals that greatly exceed the lower 48 AIR. After consideration of the public comments we received on the proposed policy to define high-cost drugs as all drugs covered under Medicare Part B and for which payment would otherwise be made under the OPPS whose per day cost exceeds two times the lower 48 AIR ($1,334 in CY 2024), we are finalizing the policy as proposed. We also sought comment in the CY 2025 OPPS/ASC proposed rule on whether we should adopt an exception to whichever AIR-based threshold we adopted that would parallel the drug packaging threshold exception for biosimilars under the OPPS. As we explained in the CY 2025 OPPS/ASC proposed rule, under the OPPS, if a drug's per-day cost is less than or equal to the drug packaging threshold, then payment for the drug is packaged. Conversely, if a drug's per-day cost exceeds the drug packaging threshold, then it is paid for separately (unless it is policy packaged). For a more detailed discussion of the drug packaging threshold, we referred readers to the CY 2024 OPPS/ASC final rule with comment period (88 FR 81776 through 81778). In CY 2024, we established an exception to this threshold for biosimilars when the biosimilar's per-day cost does not exceed the threshold, but its reference product's per-day cost does. In other words, if the biosimilar's reference product is paid separately (because its per-day cost exceeds the threshold), then we also pay separately for the biosimilar even if its per-day cost does not exceed the threshold. This exception was based on our concern that packaging biosimilars when the reference product or other marketed biosimilars are separately paid might create financial incentives for providers to select more expensive, but clinically similar, products. For a more detailed discussion of the exception for biosimilars to the drug packaging threshold, we referred readers to the CY 2024 OPPS/ASC final rule with comment period (88 FR 81783 through 81786). Because we proposed to use a threshold to trigger application of the add-on payment for high-cost drugs to IHS and tribal hospitals, we stated that we had the same concerns about financial incentives that motivated us to establish the exception for biosimilars to the drug packaging threshold. Consequently, in the CY 2025 OPPS/ASC proposed rule, we sought comment on whether we should pay the add-on payment to IHS and tribal hospitals for biosimilars whose per-day costs do not exceed the threshold but whose reference products per-day costs do exceed the threshold. Comment: We received several comments on whether we should pay the add-on payment to IHS and tribal hospitals for biosimilars whose per- day costs do not exceed the threshold but whose reference products do exceed the threshold. All commenters supported doing so, indicating that they shared CMS' concerns that packaging biosimilars when the reference product is separately paid might create financial incentives for providers to select more expensive but clinically similar products. Response: We thank the commenters for their feedback and, based on this feedback, we will adopt a drug packaging threshold exception for biosimilars in which we will pay the add-on payment to IHS and tribal hospitals for biosimilars whose per-day costs do not exceed the threshold of two times the lower 48 AIR but whose reference products do exceed the threshold. In the CY 2025 OPPS/ASC proposed rule, we also proposed that the amount of the add-on payment for a high-cost drug would be the average sales price (ASP) for the drug with no additional payment (i.e., ASP). We explained that this payment amount would be consistent with what hospitals receive as payment for most drugs under the OPPS (ASP plus 6 percent) but would exclude the 6 percent additional payment in recognition of the fact that IHS and tribal facilities, unlike hospitals paid under the OPPS, primarily obtain their drugs through the FSS, whose rates are significantly lower than ASP. We also emphasized that this approach would be consistent with our existing policies of paying ASP without any additional payment for certain Opioid Treatment Program drugs under 42 CFR 410.67(d)(2)(i)(A) and (B). In the event ASP pricing information was not available for a particular drug, we proposed to pay the Wholesale Acquisition Cost (WAC) plus 0 percent and if WAC pricing information was not available, we proposed to pay 89.6 percent of Average Wholesale Price (AWP). In the CY 2025 OPPS/ASC proposed rule, we sought comment on an alternative policy of paying ASP plus 6 percent instead of ASP plus 0 percent. We also proposed that if we were to adopt this alternative policy and pricing information was not available for a particular drug, we would pay WAC plus 6 percent and if WAC pricing information was not available, we would pay 95 percent of AWP. We sought comment on our proposal to pay an add-on of ASP plus 0 percent in addition to the lower 48 AIR for drugs administered by IHS and tribal facilities with costs that exceed two times the lower 48 AIR. We also sought comment on our proposed pricing hierarchy for drugs for which ASP pricing information was not available. Comment: Three tribal commenters supported paying ASP with no additional payment. In their view this would adequately compensate IHS and tribal hospital outpatient departments for their costs because the facilities would be receiving both the add-on payment for the drug and the lower 48 AIR encounter payment. Response: We thank commenters for their support. Comment: Multiple commenters suggested that the payment amount for the add-on payment should be ASP plus 6 percent. One of these commenters additionally requested that CMS pay ASP plus 8 percent for certain [[Page 94284]] qualifying biosimilar products. Many of these commenters argued that paying ASP plus 6 percent is necessary to ensure access to high-cost drugs because only ASP plus 6 percent adequately reflects the true acquisition and administration costs of high-cost drugs. Some of these commenters, while acknowledging that IHS and tribal facilities primarily obtain their drugs through the FSS, argued that not all IHS and tribal facilities might have access to the FSS and that not all drugs are necessarily available through the FSS. One commenter expressed concern that providers might perceive reimbursement without the 6 percent add-on as a ``penalty'' for furnishing higher-cost drugs in these settings. Finally, some of these commenters argued that CMS should pay ASP plus 6 percent for consistency with how separately payable Part B drugs are reimbursed in the OPPS setting. Response: We thank the commenters for their input and share their concerns that the payment amount for separately paid for drugs reflect the acquisition and administration costs of those drugs and that IHS and tribal hospital outpatient departments be paid consistently with how outpatient hospital departments are paid for drugs under the OPPS. However, it is our view that paying ASP plus 0 percent would achieve these goals. We believe that ASP with no add-on payment captures the acquisition and administration costs of the drugs given that (1) IHS and tribal facilities acquire most of their drugs through the FSS at rates significantly lower than ASP plus 6 percent; and (2) IHS and tribal facilities will continue to receive the lower 48 AIR payment for the encounter in addition to the add-on payment for the drug. Given these two factors, we believe that an add-on payment equal to ASP is sufficient. With respect to paying IHS and tribal hospital outpatient departments consistently with how we pay hospital outpatient departments under the OPPS, our view is that paying IHS and tribal hospital outpatient departments ASP with no additional add-on is consistent with how we pay hospital outpatient departments under the OPPS given the differences in how hospitals under the two payment systems primarily acquire their drugs. As we stated in our proposed rule, our rationale for paying ASP was to pay IHS and tribal hospitals the same rate we pay hospital outpatient departments under the OPPS for separately payable drugs, while excluding the 6 percent add-on in recognition of the fact that IHS and tribal hospitals, unlike hospitals under the OPPS, primarily acquire their drugs through the FSS at a significantly lower rate than hospitals under the OPPS. Comment: Three commenters expressed support for our proposed pricing hierarchy for drugs for which ASP pricing information is not available. These commenters indicated that there may be many times when new drugs are available for which an ASP has not yet been set and the proposed hierarchy would allow IHS and tribal facilities to be reimbursed for those high-cost drugs at these other rates until an ASP is set. Without such a hierarchy in place, these commenters warned, many new drugs would not be eligible for the add-on payment. Response: We thank commenters for their support. After consideration of the public comments we received on the proposed policy to set the amount of the add-on payment for a high-cost drug at ASP with no additional payment (ASP plus zero percent) and the proposed pricing hierarchy for drugs for which ASP pricing information was not available, we are finalizing the policies as proposed. To implement this policy, in the CY 2025 OPPS/ASC proposed rule we proposed that, starting with IHS's annual announcement in the Federal Register in December 2024 of the lower 48 AIR amount for CY 2025, we would multiply the lower 48 AIR amount for the payment year by two and then compare the result to the estimated per day costs of all drugs covered under Part B for which payment would otherwise be made under the OPPS. To determine the calculated per day cost for each drug and biological HCPCS code, we proposed to follow a methodology similar to our longstanding methodology used to calculate the per day cost of drugs and biologicals for OPPS payment purposes as discussed in section V.B.1.b of this final rule with comment period. Specifically, to calculate the per day cost, we proposed to use an estimated payment rate based on the ASP methodology payment rate, which for purposes of the proposal was generally ASP plus 0 percent (which is the payment rate we proposed for separately payable IHS drugs and biologicals) for CY 2025. We used the manufacturer-submitted ASP data from the fourth quarter of CY 2023 to determine the proposed rule per day cost. For drugs and biologicals that did not have either an ASP-based payment rate or a payment rate based on WAC, we used mean unit cost of the items derived from the CY 2023 hospital claims data to determine their per day cost. In the CY 2025 OPPS/ASC proposed rule, we proposed that a list of drugs whose costs exceeded two times the lower 48 AIR would be generated using the above-described methodology and then communicated to IHS and tribal hospitals prior to January 1, 2025. During CY 2025, IHS and tribal hospitals would submit claims for drugs included on this list. The list of drugs would be updated on a quarterly basis using existing drug compendia and CMS ASP quarterly reporting only to account for newly introduced drugs. The payment rates for drugs on the list would be updated quarterly as well based on changes in drug prices. We proposed to then repeat this process on an annual basis each December when the lower 48 AIR amount for the following calendar year was announced by IHS. As an example, we included in our proposed rule a list of the drugs for which the add-on payment would have been made (drugs with a per day cost exceeding two times the CY 2024 lower 48 AIR) had our proposed policy been in place for CY 2024. We sought comment on our proposed implementation plan. Comment: We received three comments specifically supporting our proposed implementation plan with one requested alteration. These commenters requested that when we annually create the list of drugs that qualify for the add-on payment that we use the lower 48 AIR in effect at the time of the release of the CY OPPS/ASC final rule with comment period to calculate the threshold for creating the list rather than waiting for IHS's release of the lower 48 AIR for the payment year (typically released in December). For example, to create the drug list for CY 2025, CMS would use the lower 48 AIR for 2024 rather than waiting for the release of the lower 48 AIR for 2025. These commenters indicated that while IHS has issued the lower 48 AIR in December in recent years, that has not always been the case and that in some years the lower 48 AIR was not released until months into the payment year. If that were to occur in future years, the commenters were concerned that it would delay the release of the drug list until after January 1 of the payment year. Accordingly, the commenters suggested that CMS use the lower 48 AIR in effect at the time the final OPPS rule is released and then update the list in the first quarterly update during the payment year using the new lower 48 AIR amount once it has been released by IHS. Response: We share the commenters' concern about the release of the list being delayed beyond January 1 of the [[Page 94285]] payment year. Adopting the commenters' suggestion would allow the final list of covered drugs to be included in the OPPS/ASC final rule which must be released by November 1 of each year. In addition to ensuring that the list would not be delayed beyond January 1 of the payment year, this would also have the advantage of avoiding the operational complexity of having to finalize and release a covered drug list separately from the final OPPS rule. It would also give CMS more time to communicate the drug list to IHS and tribal hospitals and would provide those hospitals with more time to familiarize themselves with the list. With respect to the commenter's suggestion that we update the list in the next quarterly update using the new lower 48 AIR once it's released by IHS, we should explain that, as we stated in the proposed rule, the quarterly updates consist solely of adding newly introduced drugs to the list and updating the ASP for listed drugs. In other words, we will only use the lower 48 AIR once, annually, to establish the list of qualifying drugs for the payment year and we will not update that list again using the AIR during the payment year. The only quarterly updates will be to add new-to-market drugs with per-day costs that exceed two times the lower 48 AIR and to update qualifying drugs' ASPs, not to add to/change the list of qualifying drugs. For both operational simplicity and to ensure that the list of separately paid drugs is released prior to January 1 of each year, we are finalizing using the lower 48 AIR in effect at the time of the release of the CY OPPS/ASC final rule with comment period to annually create the list of drugs qualifying for the add-on payment for the following calendar year. Comment: Two commenters commented on CMS' proposed process to create the list of drugs qualifying for the add-on payment. One suggested that CMS clearly communicate to IHS facilities the final process to develop the list and the results of the quarterly and annual updates to that list. The other recommended that CMS maintain a transparent process that would allow manufacturers to validate the results and establish a process whereby manufacturers could seek to correct any identified errors. Response: We agree with the commenters on the importance of employing a transparent process to develop the list of high-cost drugs for which separate payment will be made and clearly communicating that process and its results to IHS and tribal facilities on an annual and quarterly basis. The process we are using to create the list of drugs qualifying for the add-on payment is described in detail earlier in this section. The results of that process are contained in Addendum Q to this final rule, which is the list of drugs qualifying for the add- on payment for CY 2025. Quarterly updates to the list will be posted on the CMS website \164\ as they occur during CY 2025. Additionally, links to Addendum Q and the quarterly updates to the list during the calendar year will be posted on the IHS website \165\ and IHS will be sending ``Dear Tribal Leader Letters'' \166\ to tribal officials informing them of the new policy and where the list can be found. With respect to allowing for the validation of the results of the process, we direct commenters to the cost statistics files \167\ which can be used to validate the results of the per day cost calculations. --------------------------------------------------------------------------- \164\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates. \165\ https://www.ihs.gov/businessoffice/reimbursement-rates/. \166\ https://www.ihs.gov/newsroom/triballeaderletters/. \167\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. --------------------------------------------------------------------------- Comment: Another commenter encouraged CMS to monitor whether adoption of the separate payment policy will adequately facilitate equitable patient access to drugs administered in hospital outpatient facilities in tribal communities. The commenter also suggested that CMS consider reporting on access to drugs within American Indian/Alaskan Native and other racial and ethnic communities within Health and Human Services Dashboards, such as those produced by the IHS. Response: Given the health equity and beneficiary access concerns motivating our separate payment policy, we agree with the commenter on the importance of monitoring the effects of the separate payment policy on equitable patient access to drugs administered in hospital outpatient facilities in tribal communities and we plan on assessing the impact of our separate payment policy following its implementation. We will take the commenter's suggestion to report the outcome of such monitoring within Health and Human Services Dashboards under consideration for future rulemaking. Comment: We received a comment supporting the policy and requesting that we consider expanding the scope of the add-on payments to include other high-cost services beyond drugs, such as radiology services. Response: We appreciate the commenter's suggestion to expand the scope of the add-on payments to include other high-cost services beyond drugs and may consider this in future rulemaking. Comment: We received two comments supporting the policy and requesting that it be expanded to include Urban Indian Organization (UIOs) clinics. These commenters emphasized that UIOs are severely underfunded and the same equity and access concerns that support providing IHS and tribal facilities with the proposed AIR add-on payment for high-cost drugs are also relevant to the needs of UIOs. Response: We appreciate the commenters' suggestion; however, UIO clinics are not paid the outpatient AIR for hospital outpatient services furnished to Medicare beneficiaries and therefore are outside of the scope of the AIR add-on payment policy that we are finalizing in this rule. Finally, we proposed to implement this policy on a permanent basis but may revisit it in the future if we have any concerns about its impact once it has been implemented. Comment: We received two comments supporting our proposal to implement the policy on a permanent basis. Response: We thank the commenters for their input. After consideration of the public comments we received on our proposed plan to implement the separate payment policy, we are finalizing the policy as proposed except we will use the lower 48 AIR in effect at the time of the release of the CY OPPS/ASC final rule with comment period (rather than the lower 48 AIR for the payment year) to annually create the list of drugs qualifying for the add-on payment for the following calendar year. As discussed in the preceding sections, after consideration of the public comments we received, we are finalizing the policy to separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments as proposed with modifications to (1) use the lower 48 AIR amount in effect at the time of the release of the CY OPPS/ASC final rule with comment period to calculate the threshold for the list of drugs qualifying for the add-on payment for the following calendar year and (2) adopt a drug packaging threshold exception for biosimilars that parallels the drug packaging threshold exception for biosimilars under the OPPS. [[Page 94286]]

D. Request for Information--Paying All IHS and Tribally Operated

Clinics the IHS Medicare Outpatient All Inclusive Rate (AIR) CMS established a Tribal Technical Advisory Group (TTAG) in 2004 to provide advice and input to CMS on policy and program issues impacting American Indians and Alaska Natives (AI/AN) populations served by CMS programs. Although not a substitute for formal consultation with tribal leaders, the TTAG enhances the government-to-government relationship between HHS and federally recognized tribes and improves understanding between CMS and tribes. The TTAG has subject specific subcommittees that meet on a regular basis in order to be more effective and perform in-depth analysis of Medicare, Medicaid, Children's Health Insurance Program (CHIP), and Health Insurance Marketplace[supreg] \168\ policies that may have tribal implications. The TTAG is composed of 17 representatives. It has historically included an elected tribal leader or an appointed representative from each of the 12 geographic areas of the Indian Health Service (IHS) delivery system and a representative from each of the national Indian organizations headquartered in Washington, DC--the National Indian Health Board, the National Congress of American Indians, and the Tribal Self-Governance Advisory Group. Section 5006(e)(1) of the American Recovery and Reinvestment Act of 2009, which became effective July 1, 2009, mandates that TTAG shall be maintained within CMS and added two new representatives: a representative from a national urban Indian health organization; and a representative from the IHS. --------------------------------------------------------------------------- \168\ Health Insurance Marketplace[supreg] is a registered service mark of the U.S. Department of Health & Human Services. --------------------------------------------------------------------------- In June 2020, the TTAG suggested[thinsp]that CMS amend its Medicare regulations to make all IHS and tribally operated outpatient facilities eligible for Medicare payment at the IHS Medicare outpatient per visit rate/AIR. The TTAG explained that outpatient clinics, which are otherwise similar to grandfathered tribal Federally Qualified Health Centers (FQHCs), are paid at different rates depending upon whether they meet the requirements as a provider-based facility, a grandfathered tribal FQHC, a non-grandfathered tribal FQHC, or none of the above. TTAG's position is that the rates vary based on Medicare regulatory definitions, rather than the actual costs of the outpatient clinic.\169\ There are varying payment differentials among Medicare enrolled providers and suppliers under the authorities of the Social Security Administration (SSA). For example, Ambulatory Surgical Centers (ASCs) are paid differently than Hospital Outpatient Departments (HOPDs); which are paid differently depending on whether they are located in a critical access hospital. --------------------------------------------------------------------------- \169\ https://www.nihb.org/tribalhealthreform/wp-content/uploads/2020/06/TTAG-letter-to-CMS-requesting-IHS-rate-for-all-tribal-clinics-06.10.2020.pdf. --------------------------------------------------------------------------- In the CY 2022 PFS proposed rule (86 FR 39240), we acknowledged that the TTAG is concerned about ensuring appropriate Medicare payments for similar services and is also concerned about the impact on tribal Medicare beneficiaries and on ensuring equitable access to healthcare. We take these concerns seriously but noted in the CY 2022 PFS proposed rule that we had insufficient information to evaluate the costs and benefits of potential changes to these policies. Therefore, we solicited comments on the TTAG's request for CMS to amend its Medicare regulations to make all IHS- and tribally operated outpatient facilities/clinics eligible for payment at the Medicare outpatient per visit rate/AIR, regardless of whether they were owned, operated, or leased by IHS. In response to the solicitation, we did not receive specific information on costs or specific types of clinics; however, in the CY 2022 PFS final rule (86 FR 65211 through 65214), we stated we would like to continue these discussions to evaluate the impact of the commenters' proposed changes to the current Medicare payment policies and will consider these recommendations for future rulemaking. Thus, to continue these discussions, we requested this information again in the CY 2025 proposed rule (89 FR 59394). Additionally, beginning in the Fall of 2023, CMS began participating in a workgroup related to the TTAG's Medicare priority to make the IHS Medicare outpatient AIR available to all IHS and tribally operated outpatient facilities that request it. Although we have received some information through the workgroup, we requested additional information consistent with our previous comment solicitation in the CY 2022 PFS proposed rule (86 FR 39238). We requested information on the kinds of and number of facilities or clinics to which the Medicare outpatient IHS AIR could apply; It was unclear whether TTAG anticipated that these facilities enroll in Medicare as FQHCs going forward, or whether they are referring to FQHCs that are currently paid under the FQHC Prospective Payment System (PPS). Moreover, we requested information on whether the facilities in question were freestanding or provider-based. We asked commenters to confirm or clarify whether the clinics are physician offices, or whether they are recommending establishment of a new provider type. We solicited information regarding the relative operating costs of tribally operated outpatient clinics, as well as feedback and supporting evidence to address whether or why payment set at the IHS AIR would be more appropriate than payment rates under the FQHC PPS, the physician fee schedule, or other some other Medicare payment system. Further, we solicited comment on how the Medicare outpatient AIR, which is based upon a limited number of hospital cost reports, related to costs in tribal clinics and the kinds of services that the clinics furnish. Finally, we solicited comment on the concerns that the AI/AN community may have regarding access to or inequity of care in situations where a payment differential exists (86 FR 39240). We noted in the CY 2025 RFI that we have information on historically excepted FQHCs, the outpatient provider-based clinics to the hospital, and some general information about the composition of IHS and tribal facilities and clinics. However, we stated there are still gaps in the data and therefore we requested responses to the following questions: If the clinic or facilities in question are not enrolled in Medicare as an FQHC or provider-based to a hospital, are they physician practices? How are these facilities organized and related? (89 FR 59394.) Because paying the Medicare outpatient AIR to additional IHS and tribally operated facilities that are currently paid under another Medicare payment methodology or not yet enrolled in Medicare as all would potentially increase expenditures, we also solicited information on how tribally operated facilities participate in Medicare currently, which would assist us with estimating the impacts of such a policy change. We received a few comments in response to the information we requested. Below, we provide a summary of the comments we received and our responses. Comment: Commenters support CMS' continuing efforts to better understand the request to make all IHS and tribally operated outpatient facilities eligible for Medicare payment at the IHS Medicare outpatient per visit rate/AIR as it would provide financial stability and improve [[Page 94287]] comprehensive care delivery for tribal communities. Some of the commenters believe the current Medicare payment rates for outpatient Indian health providers are inequitable, increasingly illogical and contrary to National Indian policies, as the requested change would increase Medicare expenditures only a negligible amount. One commenter believes the most efficient, expeditious, reliable and appropriate way for CMS to gather the requested information is through the TTAG, not a Request for Information (RFI), but they provided information on the known or likely enrollment status of potentially affected programs, discussed why many small Indian Health Programs currently bill Medicare (if at all) under the Physician Fee Schedule (PFS), explained why neither the PFS nor the FQHC PPS rates come close to covering their costs, discussed why the AIR is the most appropriate payment option for all Outpatient Indian Programs, and provided some illustrative examples. Another commenter would like CMS to consider using the IHS Medicare outpatient per visit rate/AIR to pay for hospital outpatient services furnished by Urban Indian Organizations (UIOs) to Medicare beneficiaries. Response: CMS acknowledges comments received on this important issue, and, commits to continuing close collaboration with TTAG to evaluate IHS and Tribally Operated Clinics without IHS Medicare outpatient AIR payments to identify opportunities for improving financial stability and equitable healthcare delivery in these communities, including determining whether these clinics would receive a net benefit from being paid the IHS Medicare Outpatient AIR.

D. Coverage Changes for Colorectal Cancer (CRC) Screening Services

Medicare coverage for colorectal cancer (CRC) screening tests under Part B is described in statutes (sections 1861(s)(2)(R), 1861(pp), 1862(a)(1)(H) and 1834(d) of the Social Security Act (the Act)), regulation (42 CFR 410.37), and a National Coverage Determination (NCD) (Section 210.3 of the Medicare National Coverage Determinations Manual). Section 1861(pp)(1)(D) of the Act includes in its definition of colorectal cancer screening test ``[s]uch other tests or procedures, and modifications to the tests and procedures described under this subsection, with such frequency and payment limits, as the Secretary determines appropriate, in consultation with appropriate organizations.'' The regulations at 42 CFR 410.37 list and define the tests and procedures covered by Medicare as colorectal cancer screening tests. Specifically, the following tests and procedures furnished to an individual for the purpose of early detection of colorectal cancer are covered by Medicare: Screening fecal-occult blood tests. Screening flexible sigmoidoscopies. Screening colonoscopies, including anesthesia furnished in conjunction with the service. Screening barium enemas. Other tests or procedures established by a national coverage determination, and modifications to tests under this paragraph, with such frequency and payment limits as CMS determines appropriate, in consultation with appropriate organizations. In recent years we have received recommendations from the public to remove Medicare coverage for the barium enema test since the test no longer meets modern clinical standards and is no longer recommended in clinical guidelines. As a replacement to the barium enema test, organizations have suggested the use of CT colonography, which is a more effective test for colorectal cancer screening. For a more extensive discussion on the background and proposal to revise the Medicare coverage for colorectal cancer screening services, we refer readers to the CY 2025 Physician Fee Schedule (PFS) proposed rule. For CY 2025, based on public input and consultation with specialty societies, and as discussed in the CY 2025 PFS proposed rule, we proposed to exercise our authority under section 1861(pp)(1)(D) of the Act to update and expand coverage for CRC screening. As discussed in the CY 2025 PFS proposed rule, we proposed to make the following revisions to Sec. 410.37: Remove coverage for the barium enema procedure. Add coverage for the computed tomography colonography (CTC) procedure. Expand the existing definition of a ``complete colorectal cancer screening'' to include a follow-on screening colonoscopy after a Medicare covered blood-based biomarker CRC screening test (described and authorized in NCD 210.3). The above screening tests are currently described by existing HCPCS codes. These HCPCS codes are listed in Table 139 along with their long descriptors. [[Page 94288]] [GRAPHIC] [TIFF OMITTED] TR27NO24.185 Based on the proposed coverage changes for CRC screening, we proposed to make the following changes under the OPPS for CY 2025: HCPCS codes G0106 and G0120 (screening barium enema): These codes were established by CMS effective January 1, 1998, to implement Medicare coverage for barium enema as a test for colorectal cancer screening. Since we proposed to remove Medicare coverage for barium enema colorectal cancer screening effective January 1, 2025, and we no longer need to keep these codes active, we proposed to delete them on December 31, 2024. Therefore, we proposed to revise the status indicator for the HCPCS codes from status indicator ``S'' (Procedure or Service, Not Discounted When Multiple. Paid under OPPS; separate APC payment.) to ``D'' (Discontinued code) to indicate that HCPCS codes G0106 and G0120 will be deleted on December 31, 2024. In addition to the deletion of these codes, we also proposed to delete HCPCS code G0122 (Colorectal cancer screening; barium enema), which is already non-covered by Medicare, on December 31, 2024. CPT code 74263 (screening computed tomography colonography (CTC)/virtual colonoscopy): We proposed to reassign this code from status indicator ``E1'' (not covered/not payable) to status indicator ``S'' and APC 5522 (Level 2 Imaging Without Contrast) to indicate that the code is separately payable. Based on our review, we noted that we believed the time and resources associated with performing a screening virtual colonoscopy was similar to a diagnostic virtual colonoscopy, which is described by CPT code 74261 (Computed tomographic (ct) colonography, diagnostic, including image postprocessing; without contrast material). Consequently, the proposed APC assignment for CPT code 74263 was based on its clinical and resource homogeneity to CPT code 74261, which was assigned to APC 5522. HCPCS code G0327 (screening blood-based biomarker): This HCPCS code is currently assigned to status indicator ``A'' to indicate that the test is paid separately under a different Medicare payment system than the OPPS. Since HCPCS G0327 is currently separately payable under the Clinical Laboratory Fee Schedule (CLFS), we did not propose to revise the status indicator. Specifically, with the expanded coverage to include blood-based biomarker as a screening test to detect colorectal cancer, we proposed to continue to assign HCPCS code G0327 to status indicator ``A'' for CY 2025. In summary, based on the proposed coverage changes for colorectal cancer screening services, we proposed to revise the OPPS status indicator for certain HCPCS codes for CY 2025. Table 140 shows the long descriptors, current CY 2024 OPPS status indicators, and proposed CY 2025 OPPS status indicators for HCPCS codes G0106, G0120, G0122, 74263, and G0327. The proposed CY 2025 OPPS payment rates, where applicable, for these HCPCS codes can be found in Addendum B to the proposed rule. In addition, for the complete list of the proposed status indicators and their definitions, refer to Addendum D1 of the CY 2025 OPPS/ASC proposed rule. [[Page 94289]] [GRAPHIC] [TIFF OMITTED] TR27NO24.186 Comment: Overall, commenters supported our proposals of the following Colorectal Cancer (CRC) Screening Services changes: Deleting HCPCS codes G0106 and G0120 (screening barium enema) effective December 31, 2024, and deleting HCPCS code G0122 (Colorectal cancer screening; barium enema), which is already non- covered by Medicare, on December 31, 2024. Reassigning the status indicator of CPT code 74263 (screening computed tomography colonography (CTC)/virtual colonoscopy) from status indicator ``E1'' (not covered/not payable) to status indicator ``S'' to indicate that the code is separately payable and assigning CPT code 74263 to APC 5522 (Level 2 Imaging Without Contrast). Maintaining the status indicator of HCPCS code G0327 (screening blood-based biomarker) as status indicator ``A'' to indicate that the test is paid separately under a different Medicare payment system than the OPPS. Response: We thank commenters for supporting our proposals related to Sec. 410.37 and NCD 210.3 on Colorectal Cancer (CRC) Screening Services. Comment: A commenter requested that CMS exercise our authority in section 1861(pp)(1)(D) of the Act to expand our approach to a ``complete CRC screening'' to add CTC along with the Medicare covered blood-based biomarker CRC screening test and the Medicare covered non- invasive stool-based CRC screening test within the definition of a ``complete colorectal cancer screening.'' Response: We disagree with commenters that requested a further expansion of a complete colorectal cancer screening to include CTC. CTC is a visualization procedure along with colonoscopy and flexible sigmoidoscopy whereas stool-based and blood-based CRC screening tests are non-visualization tests. CTC provides visualization of the contours of the whole colon and demonstrates mucosal surface abnormalities consistent with polyps and tumors. CTC tests are unlike noninvasive modalities such as stool-based and blood-based CRC screening, which present a binary positive/negative result with variable specificity and may result (in the case of a positive test) in the need for a visualization study to confirm the derived suspicion of adenoma or cancer. The follow-on colonoscopy in cases of stool-based or blood- based CRC screenings represents an extension of screening in a patient who has converted from average risk to increased risk as a result of the positive test. In the case of CTC, however, visualization of the colonic mucosal contour, as well as the remainder of the colonic wall and surrounding structures, has already been achieved and the determination of a suspicious finding has already been made. Polyps over the size threshold prompt a referral for diagnostic/therapeutic colonoscopy for the purpose of polypectomy. A follow-up colonoscopy after an abnormal finding from a CTC would be considered a diagnostic colonoscopy to biopsy or remove visualized polyps and/or cancer. After consideration of the public comments we received, we are finalizing the proposals made in the CY 2025 OPPS/ASC proposed rule affecting Colorectal Cancer (CRC) Screening Services with one modification. Specifically, we are finalizing the deletion of HCPCS codes G0106 and G0120 (screening barium enema) effective December 31, 2024. We are finalizing the reassignment of CPT code 74263's status indicator as proposed from status indicator ``E1'' (not covered/not payable) to ``S'' to indicate that the code is separately payable. However, we are reassigning CPT code 74263 to APC 5523 (Level 3 Imaging Without Contrast) in this final rule. We refer readers to section III.E of this final rule with comment period for a detailed discussion of CPT code 74263's APC assignment. We are maintaining the status indicator of HCPCS code G0327 (screening blood-based biomarker) as status indicator ``A'' to indicate that the test is paid separately under a different Medicare payment system than the OPPS. Table 141 shows the long descriptors proposed and final CY 2025 OPPS status indicators for HCPCS codes G0106, G0120, G0122, 74263, and G0327. The finalize CY 2025 OPPS payment rates, where applicable, for these HCPCS codes can be found in Addendum B to [[Page 94290]] this final rule. In addition, for the complete list of the final status indicators and their definitions, refer to Addendum D1 of this final rule with comment period. [GRAPHIC] [TIFF OMITTED] TR27NO24.187

E. Request for Comment on Payment Adjustments Under the IPPS and OPPS

for Domestic Personal Protective Equipment

1. General Background

As discussed in the FY 2023 IPPS/LTCH PPS and CY 2023 OPPS/ASC rules, President Biden issued Executive Order (E.O.) 13987, ``Organizing and Mobilizing the United States Government To Provide a Unified and Effective Response To Combat COVID-19 and To Provide United States Leadership on Global Health and Security,'' on January 20, 2021 (86 FR 7019). This order launched a whole-of-government effort to combat the coronavirus disease 2019 (COVID-19) and prepare for future biological and pandemic threats. As the COVID-19 pandemic eased, work has continued to prepare for future pandemics. As the COVID-19 pandemic demonstrated, sufficient availability of personal protective equipment (PPE) in the health care sector is a critical component of preparedness. The CY 2023 OPPS/ASC final rule with comment period implemented payment adjustments under the OPPS and IPPS to support a resilient and reliable supply of surgical N95 respirators--a specific type of filtering facepiece respirator that is a subset of N95 masks used in some clinical settings under conditions requiring respiratory protection from airborne pathogens and splash protection from exposure to fluids. Early on in the COVID-19 pandemic, ``just-in-time'' supply chains, minimal stockpiling, and overreliance on foreign imports left U.S. hospitals unable to obtain enough N95 respirators to protect health care workers. Prices for surgical N95s soared from an estimated $0.25-$0.40/unit to $5.75/unit (and up to $12.00/unit in some reported cases). Unable to obtain surgical N95s regulated by NIOSH, hospitals had to turn to KN95s--a Chinese standard respirator--and other non- NIOSH-approved respirators under Emergency Use Authorization (EUA). Skyrocketing demand during the COVID-19 pandemic also raised counterfeit respirator concerns. Currently available payment adjustments offset the marginal costs that hospitals face in procuring domestically made NIOSH-approved and FDA-certified surgical N95 respirators. These marginal costs are due to higher per-unit acquisition prices that stem from higher costs of inputs and labor in the U.S., as compared to international suppliers, where many N95 and other respirators are made, as well as a demonstrated record of more consistent high quality for domestically made products.\170\ These payment adjustments offset the additional marginal costs of hospitals that purchase domestically made NIOSH- approved surgical N95 respirators to help sustain demand for--and thus domestic production of--high-quality domestically made respirators in order to ensure quality PPE is available to health care personnel when needed. --------------------------------------------------------------------------- \170\ https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html. --------------------------------------------------------------------------- The policy goal to maintain a baseline domestic production capacity of high-quality PPE in order to ensure that quality PPE is readily available to health care personnel when needed is emphasized in the National Strategy for a Resilient Public Health Supply Chain, published in July 2021 as directed by President Biden's Executive Order 14001 on ``A Sustainable Public Health Supply Chain.'' The U.S. Government has committed to purchase wholly domestically-made PPE in line with section 70953 of the Infrastructure Investment and Jobs Act (Pub. L. 117-58). [[Page 94291]]

2. Potential Modifications to Payment Adjustments for Domestic NIOSH-

Approved Surgical N95 Respirators Although the payment adjustments for domestic NIOSH-approved surgical N95 respirators under the OPPS and IPPS have applied to cost reporting periods beginning on or after January 1, 2023, use of the payment adjustments has been limited. Furthermore, market data suggests that a majority of surgical N95 respirators purchased by hospitals are not wholly domestically made. In the CY 2023 OPPS/ASC final rule with comment period, we stated that as we gain more experience with this policy and the data collected, we may also consider modifications to the reasonable cost-based payment approach we were finalizing. HHS has conducted stakeholder outreach to better understand barriers to awareness and uptake and seek feedback on potential modifications that could increase effectiveness, and continues to engage hospitals and other manufacturers on these payment adjustments. Furthermore, as discussed in more detail below, in the CY 2025 OPPS/ASC proposed rule (89 FR 59396 through 59399), we solicited feedback and comments on potential modifications to the payment adjustment in order to reduce reporting burden and achieve the policy goal to maintain a baseline domestic production capacity of PPE in order to ensure that quality PPE is readily available to health care personnel when needed. Payment adjustment methodology: In the CY 2023 OPPS/ASC final rule with comment period, we finalized to initially base the payment adjustments on the IPPS and OPPS shares of the estimated difference in the reasonable costs. We created a new supplemental cost reporting form to enable calculation of a hospital-specific unit cost differential between domestic and non-domestic NIOSH-approved surgical N95 respirators. We noted that, based on available data, our best estimate of the difference in the average unit cost of domestic and non-domestic NIOSH-approved surgical N95 respirators was $0.20. In the CY 2023 OPPS/ ASC final rule with comment period, we also noted that MedPAC, while not supportive of the proposed payment adjustments, stated that CMS should set the unit cost differential between domestic and non-domestic NIOSH-approved surgical N95 respirators at a national level (rather than on a hospital-by-hospital basis). MedPAC believed this would reduce the administrative burden on hospitals, encourage hospitals to purchase the most economical domestically made product, and reduce the ability of hospitals to increase their payments by artificially inflating reported N95 costs. In the CY 2025 OPPS/ASC proposed rule, we solicited comment on the following questions: Should we consider modifying the payment adjustment methodology calculation to provide a national standard unit cost differential between domestic and non-domestic NIOSH-approved surgical N95 respirators (rather than on a hospital-by-hospital basis)? If so, how should we calculate that standard unit cost differential between domestic and non-domestic NIOSH-approved surgical N95 respirators, and what should the current unit cost differential be? If we modified the payment adjustment methodology calculation to provide a national standard unit cost differential, would it be appropriate to calculate the payment adjustment by multiplying the unit cost differential by the total quantity of domestic NIOSH-approved surgical N95 respirators used by the hospital, and then multiplying by the Medicare Part A hospital inpatient cost share (to calculate the IPPS payment adjustment) or the Medicare Part B hospital outpatient cost share (to calculate the OPPS payment adjustment)? Do hospitals need additional support to purchase domestic- made surgical N95 respirators as opposed to non-domestic surgical N95 respirators? If so, how much support is needed, and in what form? Comment: We received several comments supporting a modification to the payment adjustment methodology calculation that would provide a national standard unit cost differential between domestic and non- domestic NIOSH-approved surgical N95 respirators. Several commenters emphasized that this modification would minimize reporting burden for hospitals and ensure payments to hospitals are equitable. One commenter stated that CMS should provide hospitals the option of calculating their payment adjustment utilizing a national standard unit cost differential or a hospital-specific unit cost differential. A commenter stated that the national differential should be set at $0.50. Other commenters encouraged CMS to collaborate with external partners and use external resources to determine the national standard unit cost differential. Commenters suggested regularly collaborating with reliable benchmarking services, distributors, and group purchasing organizations to establish and recalibrate, if necessary, an accurate national standard unit cost differential. Several commenters provided suggestions on additional support for hospitals to purchase domestic-made surgical N95 respirators as opposed to non-domestic surgical N95 respirators. Several commenters requested that CMS work with Congress to give CMS authority to apply this payment policy in a non-budget neutral manner under the OPPS. Other commenters requested that CMS work with Congress to give CMS authority to offset all the marginal costs incurred by the hospital in procuring domestically made surgical N95 respirators rather than just the Medicare-share of these costs. One commenter stated that CMS should pay the full cost of procuring domestically made surgical N95 respirators rather than the marginal costs of procuring domestically made surgical N95 respirators over non-domestically made surgical N95 respirators. A couple of commenters stated that CMS should reimburse hospitals 5 times the differential between the acquisition cost of domestic surgical N95 respirators and non-domestic surgical N95 respirators. One commenter stated that CMS should create a HCPCS code for surgical N95 respirators and develop a formula that reimburses hospitals that purchase domestic surgical N95s directly from manufacturers at a locked price. A few commenters encouraged CMS to increase education and communication of the payment adjustment to hospital purchasing decision-makers within the healthcare system. Some comments addressed the issue of why use of the payment adjustments has been limited. A few commenters supportive of the payment adjustment stated that they believe providers may not be taking advantage of the adjustment because they still have stockpiles of surgical N95 respirators available to them that were purchased during the COVID-19 pandemic. A commenter stated its belief that use of the payment adjustments has been limited because the current supply and production capacity of wholly domestically made surgical N95 respirators is insufficient. One commenter stated that the payment adjustment does not result in a significant decrease in cost for providers. One commenter expressed that hospitals primarily buy surgical N95 respirators through distributors and that these distributors are not incentivized to purchase and make available to hospitals more expensive domestically produced surgical N95 respirators. [[Page 94292]] One commenter indicated that hospitals would be more inclined to purchase domestically made surgical N95 respirators if more information was made available regarding the production capabilities of domestic suppliers. The commenter stated it is crucial for any health care facility considering incorporating new types of surgical N95 respirators into their operations to understand certain factors such as whether the manufacturer has the capability to scale up production to meet spikes in demand and what the manufacturer's lead time is for supplying new customers with surgical N95 respirators. The commenter stated that due to the fit-testing requirements, it is crucial for health care facilities to understand lead times of N95 manufacturers to ensure that respiratory protection is available when it is needed. As reflected in the following discussion of the comments on payment adjustment eligibility, some commenters also believe that challenges in identifying surgical N95 respirators that are wholly domestically manufactured and documenting that fact for any purchased surgical N95 respirators have disincentivized hospitals from utilizing the payment adjustment. As reflected in the following discussion of the types of N95 respirators, a few commenters indicated that because non-surgical N95 respirators represent most of the N95 respirators purchased by hospitals, the fact that non-surgical N95 respirators are not eligible for the payment adjustment contributes to the lack of uptake for surgical N95 respirators. Payment adjustment eligibility: In the CY 2023 OPPS/ASC final rule with comment period, we stated that we recognize that a hospital cannot fully independently determine if a NIOSH-approved surgical N95 respirator it purchases is domestic under our definition. Therefore, we finalized that a hospital may rely on a written statement from the manufacturer stating that the NIOSH-approved surgical N95 respirator the hospital purchased is domestic under our definition. In the CY 2025 OPPS/ASC proposed rule, we solicited comment on the following questions: Do hospitals have sufficient access to information on which surgical N95 models on the market are wholly domestically made? Have hospitals been able to obtain written statements from manufacturers stating that the NIOSH-approved surgical N95 respirator the hospital purchased is domestic under our definition? Would a publicly available list of products eligible for the payment adjustment (for example, if provided by CMS, NIOSH, or another government entity) make it easier for hospitals to locate products eligible for the payment adjustment? If we modified the payment adjustment such that hospitals that attested to purchasing wholly domestically made surgical N95 models from such a list did not need to obtain a written statement from the manufacturer, would hospitals more easily be able to utilize the payment adjustment? Comment: In general, commenters were supportive of making publicly available a list of products eligible for the payment adjustment. Some commenters indicated that hospitals have had difficulty ascertaining which products meet the definition of domestic under this policy. Some commenters stated that hospitals have had difficulty obtaining written statements from manufacturers attesting to their products meeting the policy's definition of domestic. Commenters stated that a publicly available list would simplify the procurement process and make it easier for hospitals to identify, locate, and purchase products eligible for the payment adjustment. Commenters also indicated that if such a list was made available, CMS should modify the payment adjustment such that hospitals that attest to purchasing wholly domestically made surgical N95 models from such a list do not need to obtain a written statement from the manufacturer. A commenter stated that removing the attestation requirement would streamline the process of purchasing eligible products and could encourage uptake of the payment adjustment. A commenter encouraged CMS to establish an ongoing process that would enable manufacturers or hospitals to submit products for certification and addition to the list. Some commenters stated that, if a list of eligible products were established, products not on the list should still be eligible for the payment adjustment if the product could be verified as domestic by some other means, such as through a written statement from the manufacturer. One commenter stated that requiring hospitals to acquire this written attestation from manufacturers is not burdensome and believes that CMS should retain this requirement to ensure hospital accountability. One commenter stated that CMS should explore labeling requirements for manufacturers to facilitate the identification of domestic and non-domestic products. Another commenter stated that to alleviate hospital burden, CMS should work with hospital and supply chain communities to automate the reporting to CMS of domestic products purchased by hospitals. Types of N95 respirators: In the CY 2023 OPPS/ASC proposed rule, for purposes of the payment adjustment policy, we proposed to categorize all NIOSH-approved surgical N95 respirators purchased by hospitals into two categories: (1) Domestic NIOSH-approved surgical N95 respirators; and (2) Non-domestic NIOSH-approved surgical N95 respirators. Feedback from external stakeholders has suggested that it is a challenge that the payment adjustments are limited to surgical N95 respirators, given some hospitals also procure non-surgical N95 respirators. Both surgical N95 respirators and non-surgical N95 respirators are primarily used to protect the wearer from inhaling airborne particles, including infectious agents like bacteria and viruses. They are highly efficient at filtering out at least 95% of airborne particles and are commonly used by healthcare workers during procedures that may generate aerosols, such as intubation or suctioning, or when caring for patients with infectious respiratory diseases like tuberculosis or coronavirus. Both types of N95 respirators serve as frontline defense for medical professionals. They are crucial for preventing the transmission of diseases within healthcare settings and safeguarding the health and well-being of both healthcare workers and patients. Surgical N95 respirators have the added protection against fluid penetration, and may be most useful in specialized healthcare settings (e.g., ICU, Emergency Department, Operating Room) where the risk of fluid exposure may be greater. Additionally, during the COVID-19 pandemic, both types of N95 respirators saw issues around lack of availability and risk of counterfeit outlined in the CY 2023 OPPS/ASC final rule with comment period--issues which could compromise the safety of healthcare personnel and patients. In the CY 2025 OPPS/ASC proposed rule, we solicited comment on the following questions: Do hospitals procure both surgical N95 respirators and non-surgical N95 respirators? Has the payment adjustment's current focus on surgical N95 respirators inhibited uptake of the payment adjustments? Are the quality differentials between domestic and non- domestic surgical respirators also applicable to non-surgical respirators, and is a [[Page 94293]] sustained and reliable source of domestically made non-surgical N95 respirators important for strengthening hospitals' ability to protect the health and safety of personnel and patients in a public health emergency? Should CMS consider expanding the payment adjustments to include all domestic NIOSH-approved N95 respirators--i.e., non-surgical and surgical N95 respirators? If we expanded the payment adjustments to include all domestic NIOSH-approved N95 respirators, and if we modified the payment adjustment methodology calculation to provide a national standard unit cost differential between domestic and non-domestic NIOSH-approved surgical N95 respirators (rather than on a hospital-by-hospital basis), would the unit cost differential for non-surgical N95 respirators be different than the one for surgical N95 respirators? Comment: Commenters were supportive of expanding the payment adjustment to include non-surgical N95 respirators. Commenters stated that expanding the payment adjustment to include non-surgical N95 respirators would ensure a more comprehensive and resilient domestic supply chain. A few commenters indicated that non-surgical N95 respirators represent most of the N95 respirators purchased by healthcare providers and that including them in the payment adjustment would lead to greater utilization of the payment adjustment by hospitals. A commenter stated that it would be less burdensome and more cost-effective for hospitals to procure and receive the payment adjustment for all domestic NIOSH-approved N95 respirators. A commenter stated the payment adjustment methodology could utilize the same national standard unit cost differential for surgical and non-surgical N95 respirators.

3. Potential Modifications To Include Nitrile Gloves

In addition to N95 respirators, nitrile gloves are another type of PPE for which it is particularly crucial to maintain a resilient, quality supply. Nitrile gloves protect healthcare workers and patients from the spread of micro-organisms that may potentially cause infection or illness during medical procedures and examination. They create a barrier between germs and the wearer's hands, and are generally worn anytime a healthcare worker touches blood, bodily fluids, bodily tissues, mucous membranes, or broken skin. They are disposable, enabling the use of new gloves for each patient. A resilient healthcare system needs readily available, high-quality nitrile gloves to respond efficiently and effectively to public health emergencies. During the COVID-19 pandemic, supply chain breakdowns limited the supply of quality nitrile gloves, putting U.S. healthcare workers and patients at risk. As with N95 respirators, non-domestic-sourced gloves during the COVID-19 pandemic saw counterfeit and quality challenges. The receipt of non-U.S.-made counterfeit or already-used gloves put the safety of healthcare workers and patients at risk.171 172 Prior to 2020, over 95 percent of nitrile gloves sold in the U.S. came from other countries. As the pandemic escalated in 2020, U.S. demand for gloves outstripped available supply, leading to shortages. Around the same time, supply was also limited by coronavirus-related lockdowns in other countries that decreased production capacity, and by export restrictions of PPE. Further adding to supply pressures, forced labor violations by subsidiaries of a major glove producer led U.S. Customs and Border Protection (CBP) to issue a Withhold and Release Order, resulting in seizure of all listed products, including nitrile gloves, at CBP inspections. During the initial months of the pandemic, the cost of gloves increased, rising 18 percent from July to August 2020 (to $0.03 per glove) and then an additional 20 percent from November to December 2020 (to $0.05 per glove).\173\ --------------------------------------------------------------------------- \171\ https://www.cnn.com/2021/10/24/health/medical-gloves-us-thailand-investigation-cmd-intl/index.html. \172\ https://www.propublica.org/article/ppe-covid-scams-fraud-nitrile-gloves. \173\ Glove Story Global Glove Production Amidst the COVID-19 Pandemic (usitc.gov). --------------------------------------------------------------------------- During the pandemic, the U.S. government has invested in domestic glove manufacturing capabilities. U.S. glove-manufacturing projects received approximately $290 million in public funding as part of a broader $1.5-billion investment to support domestic glove manufacturing. These investments have resulted in an increase of 3.91 billion in annual production capacity for domestically manufactured nitrile gloves. The U.S. government also invested in manufacturing capacity for nitrile glove inputs such as nitrile butadiene rubber, and this manufacturing capacity is expected to become available in 2026. However, since the pandemic began, some U.S. factories have been forced to consolidate operations or exit the industry. Further, non- U.S. nitrile glove producers have deployed cost-cutting tactics such as using lower-grade raw materials, prompting some purchasers to seek other sources out of concern for quality.\174\ Producers of these lower quality products began selling gloves for the price of $0.02 each, rapidly increasing U.S. market share, going from 13% of U.S. market share in July 2020 to 19 percent in February 2021. As of 2024, only three producers of nitrile gloves are left in the United States, and they supply an estimated .05% percent of U.S. demand for nitrile gloves. --------------------------------------------------------------------------- \174\ Glove Story Global Glove Production Amidst the COVID-19 Pandemic (usitc.gov). --------------------------------------------------------------------------- As with N95 respirators, a resilient public health industrial base requires baseline manufacturing capacity for nitrile gloves as critical PPE items, to ensure that hospitals and other institutions will be able to procure high quality gloves reliably. To help achieve this goal, certain U.S. Government departments have committed to purchase wholly domestically made nitrile gloves in line with the requirements in section 70953 of the Infrastructure Investment and Jobs Act. However, Federal demand alone cannot sustain a baseline level of nitrile glove production in the U.S. Private medical and health care users are the primary purchasers and users of medical-grade PPE, including nitrile gloves. To ensure access to high quality products, as with N95 respirators, it is critically important to ensure that a sufficient share of nitrile gloves is wholly made in the U.S.--that is, including raw materials and components. In the CY 2023 OPPS/ASC rule, we stated our belief that the most appropriate framework for determining if a NIOSH-approved surgical N95 respirator is wholly made in the U.S. and therefore, considered domestic for purposes of the proposed adjustments, is the Berry Amendment. The Berry Amendment is a statutory requirement familiar to manufacturers that restricts the Department of Defense (DoD) from using funds appropriated or otherwise available to DoD for procurement of food, clothing, fabrics, fibers, yarns, other made-up textiles, and hand or measuring tools that are not grown, reprocessed, reused, or produced in the United States. For nitrile gloves, which are not covered by the Berry Amendment, we believe the Make PPE in America domestic content requirements outlined in section 70953 of the Infrastructure Investment and Jobs Act is the most appropriate framework for determining if a nitrile glove is wholly made in the U.S. These statutory requirements, which apply to procurement of nitrile gloves and other PPE by the U.S. Departments of Health and Human Services, and Veterans Affairs, and Homeland Security, require [[Page 94294]] the procurement PPE, including the materials and components thereof, that is grown, reprocessed, reused, or produced in the U.S. These statutory requirements have become familiar to manufacturers of nitrile gloves and other PPE. With respect to domestic manufacturing capabilities for raw materials and components, we understand that nitrile butadiene rubber (NBR), a key nitrile glove input, is currently not yet available domestically in sufficient quantity or quality to meet market needs. We understand that U.S. manufacturers do anticipate having the capability to source and manufacture all glove components domestically within the next two years. Wholly domestically made, high quality nitrile gloves are generally more expensive than foreign-made ones, especially those of lower quality. This fact is also true for domestically made nitrile gloves that include non-domestically sourced NBR. These higher prices primarily stem from higher costs of manufacturing labor in the U.S. compared to costs in other countries, where most nitrile gloves and their inputs are made, and higher quality standards. These higher prices mean higher marginal costs for hospitals for procuring wholly domestically made nitrile gloves. Based on available data, our best estimate of the difference in the average unit cost of domestic and non-domestic nitrile gloves, is $0.13 per glove. As outlined in this section, quality nitrile gloves are a crucial component of PPE needed to ensure the safety of health care workers and patients. The COVID-19 pandemic highlighted how overreliance on foreign imports of gloves jeopardized public health and the health and safety of healthcare workers and patients. In the CY 2025 OPPS/ASC proposed rule, we solicited comment on the following questions: Would modifying the payment adjustment to include nitrile gloves help offset the marginal costs that hospitals face in procuring high quality domestically made nitrile gloves? Would modifying the payment adjustment to include nitrile gloves help to sustain a baseline level of domestic manufacturing of nitrile gloves to ensure that hospitals and other stakeholders have ongoing, reliable access to an adequate supply of quality product? Would having access to a sustained and reliable source of domestically made nitrile gloves strengthen hospitals' ability to protect the health and safety of personnel and patients in a public health emergency? Are there other reasons why hospitals would benefit from an extension of the payment adjustment to include nitrile gloves not covered in the preceding questions? Do stakeholders believe a significant portion of hospitals would use domestic nitrile gloves if the payment adjustment were offered? If the payment adjustment was modified to include nitrile gloves, how should CMS define wholly domestically made nitrile gloves? Would it be appropriate to categorize all nitrile gloves purchased by hospitals into two categories: (1) domestic nitrile gloves that--with the exception of nitrile butadiene rubber (NBR)--comply with the Infrastructure Investment and Jobs Act's Make PPE in America Act domestic content requirements; and (2) non-domestic nitrile gloves? If the payment adjustment was modified to include nitrile gloves, and the categories were defined as described previously, would it be appropriate to eliminate the domestic content exception for NBR if domestic NBR production reaches a sufficient level to meet market needs? If the payment adjustment was modified to include nitrile gloves, should a national standard unit cost differential between domestic and non-domestic nitrile gloves be used to calculate the payment adjustment, and if so, what should the current unit cost differential be (or, what should the data source be)? Comment: In general, commenters were supportive of modifying the payment adjustment to include nitrile gloves. Commenters explained why they believe it is important for the United States to maintain a baseline level of domestic manufacturing of nitrile gloves. For example, commenters cited quality concerns that have arisen with non- domestic nitrile gloves purchased by hospitals, especially during times of emergencies. A commenter stated that a domestic supply chain of nitrile gloves would significantly improve lead times compared to a foreign supply chain. One commenter stated that hospitals and purchasing entities desire to purchase domestically manufactured nitrile gloves to maintain stable supplies during global supply chain disruptions and to better ensure the health and safety of patients and workers. Commenters indicated that certain domestic nitrile glove manufacturers have ceased operations. A commenter stated that the driving factor in these closures was a lack of market for domestic nitrile gloves due to their higher prices. This commenter, and other commenters, indicated that reducing or eliminating the price difference between domestic and non-domestic nitrile gloves would increase utilization of domestic nitrile gloves. A few commenters that supported including nitrile gloves in the payment adjustment stated that it would be appropriate to apply the Make PPE in America Act requirements when defining domestic nitrile gloves for purposes of this policy. These commenters also agreed that there should be a temporary exception for NBR that could be eliminated when domestic supply of NBR is sufficient to support domestic demand. One commenter expressed concerns that neither the Berry Amendment nor the Make PPE in America Act requirements are commonly used by hospitals and health systems and therefore urged CMS to consider utilizing another standard. A few commenters that supported including nitrile gloves in the payment adjustment also supported using a national standard unit cost differential between domestic and non-domestic nitrile gloves to calculate the payment adjustment. One commenter stated that the $0.13 per glove difference in the average unit cost of domestic and non- domestic nitrile gloves estimated by CMS is accurate and appropriate to use as the national standard unit cost differential. This commenter urged CMS to monitor the nitrile glove market and regularly update this differential to ensure hospitals are adequately reimbursed for their purchases of domestic nitrile gloves. Another commenter stated that the $0.13 per glove estimate was significantly higher than what they believe is the actual price differential between domestic and non- domestic nitrile gloves. This commenter stated that 100 percent domestically produced nitrile medical gloves sell for less than $0.13 per glove and that the actual price differential would likely be between $0.01 to $0.03 per glove. This commenter also requested that CMS work with industry experts to establish the national standard unit cost differential. One commenter that supported including nitrile gloves in the payment adjustment stated that CMS should maintain a publicly available list of nitrile glove products that would qualify as domestic under such a policy. One commenter stated that access to a payment adjustment should be limited to hospitals that purchase at least 25% to 35% of their nitrile gloves from domestic manufacturers. A couple of commenters stated that the current production capability of domestic manufacturers is too small for the inclusion of nitrile gloves in the payment adjustment to have a meaningful impact. For this reason, a [[Page 94295]] commenter urged CMS to not include nitrile gloves in the payment adjustment.

4. Potential Modifications To Include Other PPE and Medical Devices

As noted in the CY 2023 OPPS/ASC final rule with comment period, we received many comments urging CMS to expand this policy to cover other forms of PPE and critical medical supplies. A few commenters stated that other forms of PPE suffered shortages during the pandemic similar to surgical N95 respirators and therefore investing in domestic production for these products was also important for future emergency preparedness. We stated that we will consider these comments for future rulemaking if appropriate as we gain more experience with our policy. We sought comment on other PPE types and medical devices that could be appropriate for a similar payment adjustment. Comment: Several commenters urged CMS to expand the payment adjustment to include other PPE types and medical devices. Examples included gowns, hair nets, beard covers, bouffant caps, shoe covers, face shields, ASTM level II and III surgical masks, powered air purifying respirators, elastomeric respirators, syringes, needles, catheters, and wound care dressings. Commenters indicated that many of these products are currently being purchased from non-domestic manufacturers and have been prone to shortages and quality issues. For example, a commenter cited safety concerns regarding the quality of imported syringes and needles which they stated have had issues ranging from leaks to breakages that compromise patient safety. Some commenters indicated that domestic versions of the products they recommend including in the payment adjustment are more costly to produce than non-domestic versions. For example, one commenter stated that the higher cost of labor in the U.S. in addition to imbalances in costs of manufacturing certain inputs contributes to the cost differential between domestic and non-domestic syringes and needles. Commenters expressed that expanding the payment adjustment to more products would increase uptake of the payment adjustment by hospitals, strengthen the existing U.S. manufacturing base, incentivize other manufacturers to prioritize domestic production, and protect access to high-quality products. Response: We greatly appreciate the many thoughtful and informative comments we received in response to our request for comment on payment adjustments under the IPPS and OPPS for domestic personal protective equipment, including potential modifications to include non-surgical N95 respirators, potential modifications to include nitrile gloves, potential modifications to include other PPE and medical devices, and potential modifications to the methodology used to calculate the payment adjustments. We thank the commenters for their feedback and agree with comments calling for improvements to and expansion of these payment adjustments. In 2026 rulemaking, we intend to propose a new payment methodology, such as one that no longer relies exclusively on hospital-specific data. In this rulemaking, we also intend to propose to expand the payment adjustments to domestic non-surgical N95 respirators and domestic nitrile gloves. We also intend to continue exploring expansion of the payment adjustments to include other types of domestically made PPE and other medical products. Hospitals are the primary purchasers and users of medical PPE, and PPE are essential for the protection of patients and hospital personnel. We believe payment modifications that account for the potentially higher cost of domestically produced critical PPE help to safeguard hospital personnel and beneficiary safety over the long term by sustaining domestic production and availability of these PPE. Finally, we will explore the feasibility of creating a list of qualifying surgical N95 respirators that are domestically made PPE given feedback from commenters. We again thank commenters for their feedback regarding these payment adjustments.

F. Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital

Outpatient Departments On July 12, 2023, we proposed a National Coverage Determination (NCD) to cover Pre-Exposure Prophylaxis (PrEP) to prevent Human Immunodeficiency Virus (HIV) under Medicare Part B. The proposed coverage would include coverage for the PrEP for HIV drugs, drug administration, HIV and hepatitis B screening, and individual counseling performed by either physicians or certain other health care practitioners. We explained that, if finalized as proposed, all of the components would be covered as an additional preventive service without Part B cost-sharing (i.e., deductibles or co-pays). The final NCD was not issued before the proposed rule was issued.\175\ (89 FR 59399 through 59402) The final decision memorandum for the NCD was issued and was effective on September 30, 2024. [https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=310&fromTracking=Y&] --------------------------------------------------------------------------- \175\ https://www.cms.gov/files/document/faq-prep-hiv-06242024.pdf. --------------------------------------------------------------------------- As explained in the proposed rule, the HCPCS codes that describe these services are outlined in Table 142. [[Page 94296]] [GRAPHIC] [TIFF OMITTED] TR27NO24.188 For CY 2025, we proposed to pay for PrEP for HIV drugs and related services as additional preventive services under the OPPS, if covered in the final NCD. We stated that we believe the resource costs for HCPCS codes listed in Table 142 would be similar across different settings of care, including the HOPD and physician office, and therefore the proposed policies for determining the payment limits for drugs covered as additional preventive services (DCAPS drugs) in the CY 2025 PFS proposed rule (89 FR 61596), which would include PrEP for HIV drugs, would be appropriate for use under the OPPS as well. Therefore, we proposed to pay for the HCPCS codes listed in Table 142 that are furnished in HOPDs in a similar manner as when these codes are furnished in the physician office. HCPCS code G0012 (Injection of pre-exposure prophylaxis (prep) drug for hiv prevention, under skin or into muscle) may be used to describe the injection of a PrEP drug for HIV prevention. For CY 2025, if covered as an additional preventive service, we proposed to assign this HCPCS code to APC 5692 (Level 2 Drug Administration) based on the crosswalk to HCPCS code 96372 (Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular) based on the anticipated similarity in resource use. For the PrEP for HIV counseling services performed by hospital staff, specifically HCPCS code G0013, if covered as an additional preventive service, we proposed to assign this service to a clinical APC with a payment rate that approximates the payment rate in the physician office setting. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule on the CMS website. We did not propose to pay for PrEP for HIV counseling, described by HCPCS code G0011, performed by physicians under the OPPS as this is a physician-only service. To determine the OPPS payment amount for PrEP for HIV drugs, we proposed to utilize the ASP methodology under section 1847A of the Act when ASP data is available. As discussed in the CY 2025 PFS proposed rule (89 FR 61596), we believed and continue to believe, that the use of ASP data would be preferable for determining the payment amounts for DCAPS drugs, including PrEP for HIV, for two reasons. First, this approach would determine the payment amount for these drugs in the same way as the payment amount is usually determined for most other drugs that are separately payable under Part B, when possible. This would include the application of payment limit calculations for multiple source drugs, single source drugs and biologicals, and biosimilar biological products, as is done for products under section 1847A of the Act, for each applicable billing and payment code. Second, because section 1847A(c)(3) of the Act requires that calculation of the [[Page 94297]] manufacturer's ASP for an NDC must include volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates (other than rebates under the Medicaid drug rebate program, discounts under the 340B Program, and rebates under the Part B and Part D Medicare inflation rebate program), this would set a payment amount that would likely better reflect acquisition cost of the drug than list prices in available compendia (such as Wholesale Acquisition Cost (WAC)). Specifically, if ASP data is not available for a particular DCAPS drug, the PFS proposal described the use of alternative pricing sources. As previously stated, we believe the resource costs should be similar regardless of whether DCAPS drugs like PrEP for HIV drugs are furnished in the HOPD or the physician office, and we propose to use the same method of utilizing alternative pricing sources for drugs paid under the OPPS as additional preventive services as was proposed under the PFS. If ASP data for DCAPS drugs like PrEP for HIV is not available, we proposed to determine the payment amount for the applicable billing and payment code using the most recently published amount for the drug in Medicaid's National Average Drug Acquisition Cost (NADAC) survey (OMB control number 0938-1041).\176\ When using NADAC data, we proposed to determine the payment amount per billing unit, which would be an average of NADAC prices for all NDCs for the drug. If a drug is available in generic and brand formulations, we proposed all NDCs will be averaged together to determine the payment amount. --------------------------------------------------------------------------- \176\ https://www.medicaid.gov/medicaid/prescription-drugs/retail-price-survey/index.html. --------------------------------------------------------------------------- As described in the CY 2025 OPPS/ASC proposed rule (89 FR 59401), regarding which NADAC survey will be used, we specified that we will use the survey ``most recently published for purposes of this policy,'' which means the most recently updated NADAC survey available 30 days after the close of the quarter for which ASP data would have been reported if it were available.\177\ For example, if NADAC is used to determine the payment amount effective for dates of service in the third calendar quarter, CMS would use the most recent NADAC survey update available on the 30th day after the close of the first calendar quarter. This survey provides a national drug pricing benchmark for certain drugs that is adequately comprehensive to serve as the first alternative pricing source in the case that ASP data is not available. CMS conducts surveys of retail community pharmacy prices to develop the NADAC pricing benchmark in the annual NADAC pricing file. The pricing benchmark is reflective of the prices paid by retail community pharmacies to acquire prescription and over-the-counter covered outpatient drugs. NADAC data is publicly available and it can be accessed at https://data.medicaid.gov/nadac. --------------------------------------------------------------------------- \177\ 42 CFR 414.804(a)(5). --------------------------------------------------------------------------- We stated in the CY 2025 OPPS/ASC proposed rule (89 FR 59401), that since NADAC pricing is only available for drugs typically dispensed through retail community pharmacies, there could be circumstances in which ASP and NADAC are not available for DCAPS drugs like PreP for HIV. Therefore, if both ASP and NADAC pricing data are not available for a DCAPS drug, we proposed to use the most recently published and listed prices for pharmaceutical products in the Federal Supply Schedule (FSS) to calculate the payment amount for the applicable billing and payment code. Most recently published for purposes of this policy means the most recently updated FSS survey available 30 days after the close of the quarter for which ASP data would have been reported if it were available.\178\ For example, if FSS is used to determine the payment amount effective for dates of service in the third calendar quarter, CMS would use the most recent FSS update available on the 30th day after the close of the first calendar quarter. When using the FSS, we proposed that we would calculate the average price per billing unit (as described in the billing and payment code for the drug) for all NDCs listed for a drug. Drug pricing information, including FSS pricing, from the Veteran Affairs' (VA's) pharmaceutical pricing database is publicly available at the NDC level and published at https://www.va.gov/opal/nac/fss/pharmPrices.asp. --------------------------------------------------------------------------- \178\ 42 CFR 414.804(a)(5). --------------------------------------------------------------------------- We proposed to use FSS data when ASP and NADAC data are not available because FSS data is one of the few existing options for drug pricing that includes a wide variety of drug formulations, including both self-administered drugs typically dispensed through retail community pharmacies and drugs administered incident to a physician's service. For more details on the proposed pricing methodology for the physician office setting, please see the CY 2025 PFS proposed rule (89 FR 61596). We note that the PFS proposal included a final step of invoice pricing; however, invoice pricing is not currently available under the OPPS, so we proposed not to adopt that portion of the PFS proposal. However, please see our Invoice Drug Pricing Policy for CY 2026 in section V.B.2.d. of this final rule with comment period. Because invoice pricing is not available in the OPPS currently, we proposed that if ASP, NADAC, and FSS pricing are not available for a particular drug covered as an additional preventive service, we will use WAC plus 6 percent, or 3 percent if in an initial sales period, consistent with payment for separately payable drugs paid under the OPPS. This would result in different pricing between the OPPS and PFS if ASP, NADAC, and FSS pricing are not available, but we believe it is appropriate because invoice pricing is not currently an option under the OPPS and this pricing metric should only apply to a small subset of drugs covered as additional preventive services until one of the other pricing metrics becomes available. We proposed to treat other drugs covered as additional preventive services under this same methodology. As we stated in the CY 2025 OPPS/ASC proposed rule (89 FR 59401), if the PreP for HIV drugs would be covered as additional preventive services, we proposed to update the payment rates determined using the methodologies previously summarized on January 1, 2025, or the date of coverage, whichever is later, which would be further updated on the same schedule as the ASP pricing file, which is updated each calendar quarter. We proposed to assign the drug products covered as additional preventive services to status indicator K (Nonpass-Through Drugs and Nonimplantable Biologicals, Including Therapeutic Radiopharmaceuticals; Paid under OPPS; separate APC payment), as this status indicator identifies drugs and biologicals that are separately paid under the OPPS and therefore would allow us to operationalize separate payment for PrEP drugs. We explained that if the PrEP for HIV drugs are covered as additional preventive services, on January 1, 2025, or the date of coverage, whichever is later, we proposed that we would assign each PrEP for HIV drug covered as an additional preventive service to its own APC, which will have a payment rate assigned according to the previously defined methodology. As described in the CY 2025 OPPS/ASC proposed rule (89 FR 59401 through 59402), HCPCS code J0799 (HIV prep, FDA approved, noc) was created effective January 2, 2024, and may be [[Page 94298]] used to describe a PrEP for HIV drug that is FDA approved but is not otherwise classified. We proposed to pay 95 percent of AWP for HCPCS code J0799, which is consistent with how unlisted drugs and biologicals are paid under the OPPS when they are reported with HCPCS code C9399 (Unclassified drugs or biologicals). As HCPCS code J0799 and HCPCS code C9399 both describe drugs that are unclassified or not otherwise classified, we believe the payment methodologies should be similarly aligned. 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 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 FDA and that does not yet have a HCPCS code by reporting the 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 Shared Systems 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. While the statute does not require DCAPS drugs to be paid at 95 percent of AWP when not assigned to a product specific HCPCS code, we believe it would be appropriate to create a parallel policy given that HCPCS code J0799 and HCPCS code C9399 both describe drugs that are unclassified or not otherwise classified. As the payment amount for HCPCS code C9399 is statutorily mandated at 95 percent of AWP, we believe that the payment amount for HCPCS code J0799 should also be 95 percent of AWP. Therefore, we proposed to establish an identical payment policy for HCPCS code J0799, which may be used to describe drugs that are FDA- approved for PrEP for HIV and are covered as additional preventive services. In order to effectuate payment at 95 percent of AWP, we proposed to require hospitals to bill for a drug that is newly FDA approved for PrEP for HIV, and covered as an additional preventive service, and that does not yet have a HCPCS code, by reporting the NDC for the product along with the newly created HCPCS code J0799. Similar to HCPCS code C9399, when HCPCS code J0799 appears on a claim, the Shared Systems will suspend the claim for manual pricing by the MAC. The MAC would price the claim at 95 percent of the drug or biological's AWP, using Red Book or an equivalent recognized compendium, and process the claim for payment. This approach would enable hospitals to bill and receive payment for a drug that is newly FDA approved for PrEP for HIV and covered as an additional preventive service concurrent with its approval by the FDA. The hospital would 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 to resubmit claims for adjustment. We would instruct hospitals to discontinue billing HCPCS code J0799 and the NDC upon implementation of a product specific HCPCS code, status indicator, and appropriate payment amount with the next quarterly update. Finally, if covered as an additional preventive service, we proposed to assign all HCPCS codes describing pharmacy supplying fees for PrEP for HIV to an OPPS status indicator of ``B''. This follows the longstanding OPPS practice of assigning HCPCS codes that describe a pharmacy supply or dispensing fee to status indicator ``B'' (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x); Not paid under OPPS), such as HCPCS code Q0512 (Pharmacy supply fee for oral anti-cancer, oral anti-emetic or immunosuppressive drug(s); for a subsequent prescription in a 30-day period) and HCPCS code Q0513 (Pharmacy dispensing fee for inhalation drug(s); per 30 days). Comment: Several commenters were supportive of CMS's proposed payment policies and encouraged CMS to use its authority to pay for PrEP for HIV drugs and services as additional preventive services. Response: We thank commenters for their support. The final decision memorandum for the NCD was issued and was effective on September 30, 2024 [https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=310&fromTracking=Y&]. For the interim period of September 30, 2024, until December 31, 2024, before the DCAPS payment policy being finalized in this rule is effective, CMS will pay for PrEP for HIV drugs under the OPPS in a manner that closely aligns with how payment is currently made for drugs under the OPPS, which is generally based off of the ASP methodology. However, beginning January 1, 2025, as discussed in more detail below, we are finalizing a payment approach for determining a payment limit for DCAPS drugs. As PrEP for HIV is a DCAPS drug, payment will be made in accordance with the finalized payment approach. Comment: Several commenters supported CMS's proposal to use ASP plus 6 percent as the basis of payment; however, they recommended CMS revise the proposed payment approach specifically for PrEP for HIV, or in some cases DCAPS payment in general, in situations in which ASP data is unavailable. For example, commenters recommended in situations in which ASP is unavailable, CMS should base payment on WAC plus 3 or 6 percent, rather than NADAC or FSS pricing. There were concerns from commenters that NADAC or FSS pricing were inadequate payment methodologies and could lead to underpayments that would discourage utilization. Response: We continue to believe that NADAC and FSS pricing are appropriate payment methodologies to determine a payment limit under the OPPS for DCAPS drugs in instances in which ASP data is not available. In the CY 2020 PFS final rule (84 FR 62655), we stated that we believe NADAC survey data on invoice prices provides the closest pricing metric to ASP-based payment limits that is available. FSS data is one of the few existing options for drug pricing that includes a wide variety of drug formulations, which is why CMS chose it as an additional alternative for drugs covered as additional preventive services. Thus, our proposal explained that ASP, NADAC, and FSS are all drug pricing options that aim to estimate the accurate acquisition cost of a drug, rather than WAC, which is a list price. [[Page 94299]] Therefore, we believe WAC should be the payment methodology used under the OPPS only if ASP, NADAC, or FSS pricing are not available, as invoice pricing is not currently an option for determining a payment limit for a drug under the OPPS, unlike under the PFS. Comment: A few commenters stated Medicare should ensure adequate payment for these services in a way that takes into account the site of service, since, in their view, hospital outpatient departments are more likely to care for patients who are more medically and socially complex than those cared for in physicians' offices. These commenters recommended that CMS calculate the payment for PrEP for HIV services furnished in an HOPD in the same manner as it does for other OPPS services, and not at the PFS rate. Response: We thank commenters for their feedback. We continue to believe that the additional preventive services discussed in this section generally should have resource costs that align between care settings, such as the HOPD and the physician's office. Accordingly, we are adopting a similar payment approach for the drugs covered as additional preventive services as under the fee schedule for DCAPS drugs in the physician office setting. For the PrEP for HIV counseling services performed by hospital staff, specifically HCPCS code G0013, we are finalizing our proposal to assign this service to a clinical APC with a payment rate that approximates the payment rate in the physician office setting, consistent with our belief that the resource costs would be similar across different settings of care. Based on updated data available for this final rule, as well as the expected physician office setting payment rate, this corresponds to an APC assignment of APC 5821 (Level 1 Health and Behavior Services) for HCPCS G0013. We will continue to monitor the appropriateness of these APC assignments. We note that for the administration of the drug; however, we are finalizing our proposed assignment of HCPCS code G0012 (Injection of pre-exposure prophylaxis (prep) drug for hiv prevention, under skin or into muscle), which may be used to describe the injection of a PrEP drug for HIV prevention, to APC 5692 (Level 2 Drug Administration) based on the OPPS specific crosswalk to HCPCS code 96372 (Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular) based on the anticipated similarity in resource use to other codes assigned to this APC. Since we have an existing crosswalk code under the OPPS on which to base payment for HCPCS code G0012, we believe it is appropriate to finalize the assignment of that code to APC 5692, rather than the PFS payment rate. Comment: Several commenters shared concerns or support for the Proposed NCD for Pre-Exposure Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) Infection Prevention, published on July 12, 2023, as the NCD was not yet finalized as of the end of the comment period for the CY 2025 PFS proposed rule on September 9, 2024. This included concerns regarding unintended consequences of NCD finalization, such as having the same drugs covered under Medicare Part B or Part D depending on the indication in which they are used, which a commenter believed would be administratively burdensome. There were also concerns regarding pharmacists being unable to enroll as prescribers under Medicare Part B. The commenters also included support for certain payment methodologies for Medicare to adopt in the interim period after the NCD was finalized, but before this rule takes effect on January 1, 2025. Commenters also expressed concerns regarding Medicare Advantage Utilization Management controls being used for products potentially covered under the NCD. Response: We thank commenters for their feedback; however, we note comments related to the proposed and final coverage decision are out of scope for purposes of our proposed payment policies. Additionally, as the proposed and finalized policies in this rule are for payment for DCAPS drugs, including PrEP for HIV drugs, beginning January 1, 2025, comments regarding the interim payment rate for PrEP for HIV are outside the scope of this rulemaking. The public comment period on the proposed NCD for PrEP for HIV coverage under Medicare Part B was from January 12, 2023, to February 11, 2023. The final NCD was released on September 30, 2024, and is available at https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=310&fromTracking=Y&. We direct interested parties to https://www.cms.gov/medicare/coverage/prep for more information on the final NCD and the transition of PrEP for HIV coverage and payment from Part D to Part B. This CMS PrEP web page contains and/or will contain additional guidance on implementation of PreP for HIV coverage under Part B, including coding and billing information, payments for PrEP for HIV for the period of September 30- December 31, 2024, and the implementation of the payment approach for DCAPS drugs, including PreP for HIV drugs, effective January 1, 2025. Comment: A commenter strongly opposed use of FSS pricing to pay for PrEP for HIV drugs, but asked that we confirm that we will utilize the Other Government Agency (OGA) FSS price if we proceed with finalizing the use of the FSS price in cases where ASP and NADAC pricing data are not available. The commenter believed basing payment on the OGA FSS price would better support patient access to PrEP for HIV drugs compared to the Big 4 FSS price (the Department of Veterans Affairs (VA), DoD, the Public Health Service, and the Coast Guard), which the commenter stated reflects substantial statutory discounts that do not apply to Medicare Part B providers and they stated this could lead to significant under-payment for PrEP for HIV drugs. Response: We confirm that the FSS pricing data used will be the OGA prices. As previously described, the NCD was finalized on September 30th, 2024. On that date Medicare began coverage and payment for PrEP for HIV and associated services. The payment assignments for the interim period (that is, September 30, 2024, to December 31, 2024) are in Table 143. BILLING CODE 4120-01-P [[Page 94300]] [GRAPHIC] [TIFF OMITTED] TR27NO24.189 [[Page 94301]] [GRAPHIC] [TIFF OMITTED] TR27NO24.190 BILLING CODE 4120-01-C After consideration of the public comments we received, we are finalizing our proposal with slight modifications. For CY 2025, we are finalizing our proposal to pay for PrEP for HIV drugs and related services as additional preventive services under the OPPS. That is, we are finalizing our proposal that PrEP for HIV will be paid in accordance with the payment approach we are finalizing for all DCAPS drugs. We are finalizing the APC assignments in Table 144 generally consistent with our proposal. We are finalizing some modifications to our proposed policies. When using NADAC pricing to determine a payment rate, and the drug is available in generic and brand formulations, we proposed all NDCs will be averaged together to determine the payment amount. Similarly, when using the FSS to determine a payment rate, we proposed that we would calculate the average price per billing unit (as described in the billing and payment code for the drug) for all NDCs listed for a drug. In this final rule, to maintain consistency with the PFS finalized policy and comments received, we are amending our proposal, to finalize a policy to treat brand and generic drugs in a similar manner to the description in the Medicare Claims Processing Manual, Chapter 17, sections 20.1.3 and 20.4. That is, when calculating the price for multiple-source DCAPS drugs using NADAC or FSS pricing, we will use the lesser price of: (1) The median of all generic forms of the drug; or (2) The lowest brand name product. Additionally, after consideration of public comments, we are finalizing the following payment approach for drugs covered as additional preventive services and paid under the OPPS, and note the actual rates used for payment will be published on the CMS website and updated quarterly: If ASP data is available for the DCAPS drug, the payment limit will be determined based on the methodology under section 1847A(b) of the Act (usually 106 percent of ASP); If ASP data is not available, the payment limit will be calculated using NADAC prices for the drug; If ASP data and NADAC prices are not available, the payment limit will be calculated using the FSS prices for the drug; and If ASP data, NADAC prices, and FSS prices are not available, payment will be WAC plus 6 percent, or 3 percent if in an initial sales period, consistent with payment for separately payable drugs paid under the OPPS. Because invoice pricing is not currently available in the OPPS, if ASP, NADAC, and FSS pricing are not available for a particular drug covered as an additional preventive service, we will use WAC plus 6 percent, or 3 percent if in an initial sales period. However, as discussed in section V.B.2.d. (Invoice Drug Pricing for CY 2026) of this final rule with comment period, we are finalizing a policy to begin to price certain drugs based on their invoices starting in CY 2026. As such, we are making a conforming change such that, starting in CY 2026, if ASP data, NADAC prices, and FSS prices are not available, the payment rate would be based on the invoice price. For CY 2025 only, if ASP data, NADAC prices, and FSS prices are not available, payment will be based on WAC plus 6 percent, or 3 percent of in an initial sales period. We note this may result in different approaches to setting a payment rate between the OPPS and PFS if ASP, NADAC, and FSS pricing are not available, but we believe it is appropriate because invoice pricing is not currently an option under the OPPS and this pricing metric should only apply to a small subset of DCAPS drugs, until one of the other pricing metrics becomes available. As mentioned in CMS's responses to comments above, we are clarifying that the FSS price is the ``other government agencies'' price. Finally, in the CY 2025 OPPS/ASC proposed rule, we proposed that if covered as an additional preventive service, we would assign all HCPCS [[Page 94302]] codes describing pharmacy supplying fees for PrEP for HIV to an OPPS status indicator of ``B''. We stated this follows the longstanding OPPS practice of assigning HCPCS codes that describe a pharmacy supply or dispensing fee to status indicator ``B'' (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x); Not paid under OPPS), such as HCPCS code Q0512 (Pharmacy supply fee for oral anti-cancer, oral anti-emetic or immunosuppressive drug(s); for a subsequent prescription in a 30-day period) and HCPCS code Q0513 (Pharmacy dispensing fee for inhalation drug(s); per 30 days). While our longstanding OPPS practice has been to assign all HCPCS codes describing pharmacy supplying or dispensing fees to an OPPS status indicator of ``B'' indicating that the code is not payable under the OPPS, we believe assignment of these HCPCS codes describing pharmacy supplying or dispensing fees would be most accurately assigned to a status indicator of ``M'' (Items and Services Not Billable to the MAC; Not paid under OPPS), which also indicates that the codes are not paid under the OPPS. Status indicator ``M'' codes are not billable to the MAC. We believe status indicator ``M'' more clearly articulates that these codes are not billable to the MAC by hospitals and pharmacies should bill these HCPCS codes to their appropriate MAC. Whereas, status indicator ``B'' states the code is not recognized by OPPS, while that is true, we believe the definition for status indicator ``M'' is more comprehensive and better instructs proper billing as it is communicating to all hospitals that these codes are not billable to their MAC, rather than just not recognized by the OPPS. Therefore, we are finalizing this technical refinement to assign HCPCS code Q0521 (Pharmacy supplying fee for hiv pre-exposure prophylaxis fda approved prescription) to status indicator ``M.'' We note, HCPCS code Q0521 replaces HCPCS codes Q0516, Q0517, Q0518, Q0519, and Q0520 starting January 1, 2025. To maintain consistency with regard to the use of status indicators under the OPPS, we are also applying this technical refinement and assigning a status indicator of ``M'' to other pharmacy supplying and dispensing HCPCS codes. This is consistent with our discussion and intent in the CY 2025 OPPS/ASC proposed rule, where it was discussed that pharmacy supplying and dispensing codes, such as HCPCS codes Q0512 (Pharmacy supply fee for oral anti-cancer, oral anti-emetic or immunosuppressive drug(s); for a subsequent prescription in a 30-day period) and HCPCS code Q0513 (Pharmacy dispensing fee for inhalation drug(s); per 30 days) were historically assigned to a non-payable status indicator. The pharmacy supplying and dispensing codes that we are assigning to a status indicator of ``M'' for CY 2025 include: Q0510 (Pharmacy supply fee for initial immunosuppressive drug(s), first month following transplant); Q0511 (Pharmacy supply fee for oral anti-cancer, oral anti-emetic or immunosuppressive drug(s); for the first prescription in a 30-day period); Q0512 (Pharmacy supply fee for oral anti-cancer, oral anti-emetic or immunosuppressive drug(s); for a subsequent prescription in a 30-day period); Q0513 (Pharmacy dispensing fee for inhalation drug(s); per 30 days); Q0514 (Pharmacy dispensing fee for inhalation drug(s); per 90 days). As described in the preceding paragraph, we believe status indicator ``M'' more clearly articulates that these codes are not billable to the MAC by hospitals and pharmacies should bill these HCPCS codes to their appropriate MAC. Whereas, status indicator ``B'' states the code is not recognized by OPPS, while that is true, we believe the definition for status indicator ``M'' is more comprehensive and better instructs proper billing as it is communicating to all hospitals that these codes are not billable to their MAC, rather than just not recognized by the OPPS. Similarly, as we previously summarized, we are not paying for PrEP for HIV counseling, described by HCPCS code G0011, performed by physicians under the OPPS as this is a physician-only service. Therefore, following the same logic as just discussed for the pharmacy supplying and dispensing codes, we are also finalizing assignment of this code to a status indicator of ``M'' to better instruct proper billing. BILLING CODE 4120-01-P [[Page 94303]] [GRAPHIC] [TIFF OMITTED] TR27NO24.191 [[Page 94304]] [GRAPHIC] [TIFF OMITTED] TR27NO24.192 BILLING CODE 4120-01-C Final definitions of status indicators for CY 2025 can be found in Addendum D1 to this final rule with comment period. Additionally, final CY 2025 APC payment rates can be found in Addenda A and B. Addenda to this final rule with comment period can be found on the CMS OPPS web page. Corresponding with the finalization of this policy, we are adding conforming regulation text changes by adding new paragraph (j) to Sec. 419.41. This new paragraph details the payment amounts for drugs covered as additional preventive services under the OPPS and includes the finalized payment methodology hierarchy as described in this section.

G. Payment Policy for Devices in Category B Investigational Device

Exemption (IDE) Clinical Trials Policy and Drugs/Devices With a Medicare Coverage With Evidence Development (CED) Designation In the CY 2023 OPPS/ASC final rule with comment period (87 FR 72027), and as authorized by section 1833(w) of the Act, we finalized a policy to make a single blended payment for devices and services in Category B IDE studies, in order to preserve the scientific validity of these studies by avoiding differences in Medicare payment methods that would otherwise reveal the group (treatment or control) to which a patient has been assigned. Specifically, we codified our process of utilizing a single packaged payment for Category B IDE studies, including the cost of the device and routine care items and services, in the regulation text for payment to hospitals in a new Sec. 419.47. We provided in new Sec. 419.47(a) and (b) that CMS will create a new HCPCS code, or revise an existing HCPCS code, to describe a Category B IDE study, which will include both the treatment and control arms, related device(s) of the study, as well as routine care items and services, as specified under 42 CFR 405.201, when CMS determines that the Medicare coverage IDE study criteria at Sec. 405.212 are met, and a new or revised code is necessary to preserve the scientific validity of the IDE study, such as by preventing the unblinding of the study. We finalized that the single blended payment rate would be dependent on the specific trial protocol and would account for the frequency with which the investigational device is used compared to the control where the investigational device is not used. For example, in a study for which CMS determines the Medicare coverage IDE study criteria in Sec. 405.212 are met and where there is a 1:1 assignment of the device to control (no device), Medicare's payment rate would prospectively average the payment for the device with the zero payment for the control in a 1:1 ratio. Furthermore, costs for routine care items and services in the study, as specified under Sec. 405.201, would be included in the single blended payment (87 FR 72026 through 72027). Since implementing this policy, we have heard from interested parties that our regulation at Sec. 419.47(a) and (b) excluded clinical trials for which there is no control arm. We appreciate the input. Category B IDE studies with no control arm would be paid normally because an alternative payment methodology would not be necessary to preserve their scientific validity. Our policy at Sec. 419.47 applies only to IDE studies with a control arm and where a payment adjustment is necessary to preserve the scientific validity of such a study. The rule was not intended to suggest that CMS will not pay for Category B IDEs with no control arm, provided the studies meet the coverage criteria. In those circumstances, Medicare payments would be made using the usual Medicare payment methodologies. In many instances, requests for coding and payment for devices in Category B IDE studies are submitted through our New Technology APC application process and include the submission of cost information. However, we have encountered difficulties determining accurate payment rates for Category B IDE studies in the absence of New Technology APC applications, such as [[Page 94305]] when coding for Category B IDE studies is developed through the CPT Editorial Panel process. We encourage interested parties to use the New Technology APC application process, where applicable, to submit cost information to CMS. Absent information on the resource costs associated with the services and devices in a Category B IDE study, we may assign a SI of ``E2'' to indicate an item, code or service for which pricing information and claims data are not available, and, therefore, the item, code or service is not paid by Medicare when submitted by an outpatient claim. For CY 2025, we proposed to utilize a payment methodology similar to the one developed for Category B IDE clinical trials for drugs and devices covered under a national coverage determination (NCD) that uses the Coverage with Evidence Development (CED) paradigm when a payment adjustment is necessary to preserve the scientific validity of such a study. Specifically, we proposed to use our authority at section 1833(w) of the Act to develop alternative methods of payment under Medicare Part B for drugs and devices being studied in clinical trials under a CED NCD. These CED NCDs will be listed on the CMS CED website.\179\ --------------------------------------------------------------------------- \179\ https://www.cms.gov/medicare/coverage/evidence. --------------------------------------------------------------------------- Similar to our policy on devices in Category B IDE trials, for devices under a CED NCD, we proposed to make a single blended payment rate that would be dependent on the specific trial protocol and would account for the frequency with which the investigational device is used compared to the control where the investigational device is not used. For example, in a study for which there is a 1:1 assignment of the device to control (no device), Medicare's payment rate would prospectively average the payment for the device with the zero payment for the control in a 1:1 ratio. As previously described, when necessary to preserve the scientific validity of the study, we proposed to make payment using an adjusted payment level representing the frequency with which the study drug and placebo, or comparator drug, is furnished. A placebo, or comparator drug, could represent what a beneficiary would typically receive in order to serve as a comparator to assess the effectiveness, or therapeutic benefit, of the study drug. These adjusted payments would protect the scientific validity of the trial by avoiding differences in Medicare payment methods that could otherwise invalidate the scientific validity of the trial, such as by revealing the group (treatment or control) to which a patient has been assigned. We proposed to base the payment amount for the study drug, or active comparator drug, on the ASP methodology, that is ASP plus 6 percent if ASP data is available. If ASP data is not available, then we proposed to pay the wholesale acquisition cost (WAC). During an initial sales period, we proposed to base the payment on WAC plus 3 percent, otherwise, we proposed to base payment on WAC plus 6 percent. If WAC is not available, then we proposed to pay 95 percent of average wholesale price (AWP). This payment hierarchy is consistent with CMS payment for non-passthrough separately payable drugs in the OPPS as discussed in section V.B. of the CY 2025 OPPS/ASC proposed rule. These payment amounts would be used to calculate the adjusted payment level representing the frequency with which the study drug and placebo, or comparator drug, is furnished. For purposes of setting this adjusted payment level, we proposed to use a zero dollar amount for a placebo or comparator. A new, or revised, HCPCS code would be created for the drug and placebo or comparator in the CED study. We proposed that we would assign this HCPCS code to its own APC reflecting the payment amount determined appropriate based on available pricing information and the frequency with which the study drug and placebo, or comparator drug, is used. For example, as most drugs are currently paid per dosage unit, such as per 1 mg, a payment rate, potentially priced per 1 mg of drug, placebo, or active comparator, might be based on the average sales price methodology for the drug averaged with a zero-dollar payment for the placebo, or the applicable payment rate of the comparator drug. A single averaged payment would be made regardless of whether 1 mg of study drug, 1 mg of placebo, or 1 mg of comparator drug is used. If the trial is a 1:1 (treatment: placebo) then the payment rate would be the same for every trial participant and would represent half of the total payment for the drug. In a simplified example, if the ASP plus 6 percent payment rate for Drug X was $1 per 1 mg then in this example, the payment rate for the blended code of Drug X and placebo would be $0.50 per 1 mg. If a beneficiary received 100 mg of the study drug, then a $50 payment would be made. If a beneficiary received 100 mg of the placebo, then a $50 payment would be made. The same HCPCS code would be billed in both the study drug and placebo examples. The same payment methodology would apply if the study design was 1:2 (treatment: placebos, which equals payment at \1/3\ the cost of the study drug) or 1:3 (treatment: placebos, which equals payment at \1/4\ the cost of the study drug). In situations where there are multi-arm, or single-arm, cross over trials where participants receive placebo, or sham, for the first half of the trial and then the study drug for the second half of the trial, the payment would be reflective of this, and set in the same manner as a 1:1 trial, since half of the time the beneficiary would receive the placebo and the other half they would receive the study drug. No matter the trial design, CMS payment would be reflective of the expected frequency with which the study treatment, control, active comparator, or placebo is provided. We noted that we proposed to assign payment rates based on an adjusted payment level representing the frequency with which the study drug and placebo, or comparator drug, is projected to be furnished for the trial as a whole, and not necessarily the exact frequency with which the study drug and placebo, or comparator drug, is furnished to a particular hospital enrolled as a clinical trial site. Clinical trial sponsors should work with CMS to ensure timely establishment of payment and coding for drugs being studied under a CED designation requiring an adjusted level of payment. While the items and services furnished as placebo controls may not be considered reasonable and necessary under section 1862(a)(1)(A) of the Act because they have no health benefit, these items and services can be necessary in order to conduct a scientifically valid clinical study. As such, these items can be covered under section 1862(a)(1)(E) of the Act when furnished in the context of a qualifying clinical study.\180\ --------------------------------------------------------------------------- \180\ Coverage with Evidence Development: Guidance Document. August 7, 2024. https://www.cms.gov/medicare-coverage-database/view/medicare-coverage-document.aspx?mcdid=38. --------------------------------------------------------------------------- CMS may cover and pay for routine costs of an approved clinical trial in both the treatment arm and the control (standard of care or placebo). Routine costs include all items and services that are otherwise generally available to Medicare beneficiaries (i.e., there exists a benefit category for the item or service, coverage is not statutorily excluded for the item or service, and there is not a national non-coverage decision for the item or service) that are provided in either the experimental or the control [[Page 94306]] arms of a clinical trial. Although CMS may cover and pay for routine costs of an CED approved clinical trial in both the treatment arm and the control (standard of care or placebo), there may be circumstances, such as single arm studies, where no unique coding or unique payment would be required to preserve the scientific validity of such a study created for routine costs associated with clinical trials. Similarly, if the routine costs are the exact same between different arms of a trial, and routine billing and payment of those routine costs would not unblind a study, then no unique coding or payment would be required for those costs. There would be no need to include these routine costs in the HCPCS code assigned to a blended payment rate. If covered, these routine costs would be paid according to existing coding and Medicare payment mechanisms. Under the proposal, an alternate method of payment would be established only when necessary to maintain the scientific validity of the trial, such as to prevent the billing and payment of routine costs from unblinding the trial. These determinations would be made based on the clinical trial protocol communicated to CMS by the clinical trial sponsor, before CMS would establish an appropriate code with an adjusted payment level for routine costs for CED trials. CMS's determination in CED trials would differ from our policy regarding devices and procedures in Category B IDE trials, where the provision of an investigational device usually requires a combination of procedures or services to implant, or administer, the device to a patient. In contrast, the infusion of a drug is typically a more straightforward process, and associated routine costs may not be provided at the same time that the drug is administered, making it impractical to create a single code to describe the study drug and all associated routine costs. Finally, we wanted to be sure there are no other instances where Medicare payment methodologies might interfere with the scientific validity of a trial. We sought comment on these possible alternative scenarios, such as Medicare payment interfering with clinical trial recruitment in such a way that could compromise the scientific integrity of a clinical trial and would consider adjustments to our payment policy for devices in Category B IDE clinical trials and devices/drugs in clinical trials with a CED designation in future rulemaking. We proposed to codify our coding and payment policy to Category B IDE clinical trials with control arms through revisions to Sec. 419.47(a) to specify that these are placebo control arms. We also proposed to codify our proposed process for developing coding and payment for devices/drugs in CED-designated clinical trials by adding new paragraphs (c) and (d) to Sec. 419.47. Specifically, we proposed to provide in new Sec. 419.47(c) that CMS would create a new HCPCS code, or revise an existing HCPCS code, to describe a device/drug studied in a clinical trial with the Medicare CED designation, which would include the study device/drug and control arm, when CMS determines it is necessary to establish a CED designation for a device/ drug subsequent to a CED NCD. Additionally, in new Sec. 419.47(d) we proposed that when we create a new HCPCS code or revise an existing HCPCS code under proposed paragraph (c), we would make a single payment for the HCPCS code that includes payment for the investigational device/drug and any control. Comment: Several commenters were not supportive of our proposal because they believed the single blended payment rate would lower payments and disincentivize provider participation in clinical trials for drugs and devices with a CED designation. One commenter stated that the practical application of this policy would reduce the pool of eligible providers to those participating in settings such as academic medical centers and facilities that are already performing a high volume of procedures. The commenter further explained that if clinical trial sites were limited to academic medical centers and other facilities performing a high volume of procedures, the commenter believed that communities of color and rural communities would disproportionally face access issues, due to the use of the CED paradigm. Response: We appreciate the commenters' input and will continue to consider the implications of a single blended payment rate to hospital outpatient departments for drugs and devices in clinical trials covered under an NCD with a CED designation, including the access and health equity impacts. Comment: A comment signed by 18 organizations explained that it was unethical to require patients to participate in a study so that they might get access to a drug that is already FDA approved. Another commenter believed it was unethical for patients to pay for a placebo when there is an FDA approved treatment available. Response: We appreciate the input and are sympathetic to the commenters' concerns. Although we appreciate the viewpoint of commenters expressing concern for assigning a CED designation to FDA approved drugs, we note that the comments are out of scope because they do not relate to the proposed payment methodology for CED drugs and devices. With regard to the comment stating that it was unethical for patients enrolled in clinical trials to pay for a placebo, we need additional time to consider the ethical implications of requiring a 20 percent coinsurance for all study participants, as proposed, including those that do not receive the CED drug or device. We welcome public engagement and comments on this final rule with comment period regarding the implications of requiring a coinsurance payment for beneficiaries participating in trials for CED drugs and devices, as well as the relevant statutory authorities that may allow for an adjustment of the coinsurance amount for beneficiaries participating in clinical trials for CED drugs and devices. We will continue to consider the ethical implications as part of future policymaking on payments for clinical trials. Comment: Several commenters did not support CMS applying CED designation to drugs and biologics that are already approved by the FDA because they believe it would impede beneficiary access to medicines that FDA has already determined to be safe and effective. Two commenters stated that our proposed policy seemed to indicate that more FDA-approved drugs and biologics will be covered by Medicare under the CED pathway in the future. Commenters urged CMS to exercise caution, maintain very limited use of CED for Part B drugs, and not use CED to conduct control arm studies or to prevent access to FDA approved treatments. Response: We appreciate hearing the public comments and concerns about the potential coverage of drugs and biologicals in future CED trials. However, these comments are outside the scope of our proposed rule because they relate to the coverage pathway for certain drugs and devices rather than the proposed payment methodology for CED drugs and devices. Because the comments relate to coverage decisions that are entirely separate from the proposed payment methodology for CED drugs and devices, we did not consider the comments submitted for this final rule with comment period. We refer readers to the ``Coverage with Evidence Development: Guidance Document'' issued on August 7, 2024, for more [[Page 94307]] information on CMS's policy for making NCDs using the CED paradigm.\181\ --------------------------------------------------------------------------- \181\ https://www.cms.gov/medicare-coverage-database/view/medicare-coverage-document.aspx?mcdid=38. --------------------------------------------------------------------------- Comment: We received several comments, including from a drug manufacturer, supporting our proposal for both CED drugs and devices. Commenters stated that they believed it was necessary for CMS to finalize this policy to preserve the scientific integrity of future trials. One commenter explained that the policy's emphasis on scientific validity outweighed the small chance of lower payment for trial sites that perform more placebo or sham services versus intervention services. A couple of commenters supported our proposal and requested additional billing and coding guidance for trial sites, as well as timely, transparent, and efficient implementation of the policy. Response: We thank the commenters for their support. While we agree that the proposed payment methodology for CED drugs and devices may have the effect of preserving the scientific integrity of CED trials, other commenters raised concerns regarding the impact of the proposed policy on provider payments, study enrollment, and beneficiary coinsurance amounts for study enrollees, that need to be further considered prior to finalizing a payment policy. Because we are not finalizing the proposed rule at this time, we will consider the comments if we undertake future rulemaking. After consideration of the public comments we received, we are not finalizing our proposal to use our authority at section 1833(w) of the Act to develop alternative methods of payment under Medicare Part B for drugs and devices being studied in clinical trials under a CED NCD at this time. We believe that there are broader policy implications to our proposal that require further consideration prior to finalizing a payment policy for CED drugs and devices. For example, we need additional time to consider the ethical implications of requiring a coinsurance payment for all beneficiaries participating in a clinical trial for a CED drug or device, including those that do not receive the investigational treatment. We also need additional time to consider the potential impacts of a single blended payment rate on clinical trial enrollment for drugs and devices in CED trials. We will carefully consider the issues raised in the public comments received in developing a payment policy for CED drugs and devices for future rulemaking. Accordingly, we are not revising the regulation text at Sec. 419.47 as proposed to include a payment methodology for CED drugs and devices. We are finalizing our proposal to codify our coding and payment policy for Category B IDE clinical trials with control arms through revisions to Sec. 419.47(a) to specify that our policy applies only to IDE studies with a control arm and where a payment adjustment is necessary to preserve the scientific validity of such a study.

A. CY 2025 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 2025 and subsequent years, we proposed to create two new status indicators, ``K1'' and ``H1.'' We proposed these two new status indicators to identify the products that qualify for separate payment under our new payment policy for non-opioid post-surgical pain management drugs, biologicals, and devices, as authorized by section 4135 of the Consolidated Appropriations Act, 2023. This policy is discussed further in section XIII.E of this final rule. The final definitions and payment status of status indicators ``K1'' and ``H1'' can be found in Table 145. [GRAPHIC] [TIFF OMITTED] TR27NO24.193 For CY 2025 and subsequent years, we proposed to modify the definition of status indicator ``K'' to remove the word ``therapeutic'' from the phrase ``therapeutic radiopharmaceuticals'' to indicate that both diagnostic and therapeutic radiopharmaceuticals may be assigned to status indicator ``K'' in accordance with our policy proposal in section II.A.3.a. of this final rule. The final definition and payment status of status indicator ``K'' can be found in Table 146. [[Page 94308]] [GRAPHIC] [TIFF OMITTED] TR27NO24.194 We solicited public comments on the proposed definitions of the OPPS payment status indicators for 2025. We did not propose to make any other changes to the existing definitions of status indicators that were listed in Addendum D1 to this final rule with comment period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices. Comment: Commenters were supportive of our proposed creation of status indicators ``K1'' and ``H1'' to identify the products that qualify for separate payment under our new payment policy for non- opioid post-surgical pain management drugs, biologicals, and devices, as authorized by section 4135 of the Consolidated Appropriations Act, 2023. Response: We thank the commenters for their support. Comment: We did not receive any specific comments regarding our proposal to revise status indicator ``K'' to remove the word ``therapeutic'' from the phrase ``therapeutic radiopharmaceuticals'' to indicate that both diagnostic and therapeutic radiopharmaceuticals may be assigned to status indicator ``K'' in accordance with our policy proposal in section II.A.3.a. of the CY 2025 OPPS/ASC proposed rule (89 FR 59427 through 59433). However, commenters were generally supportive of our proposals to pay separately for qualifying diagnostic radiopharmaceuticals as discussed in section II.A.3.a. of this final rule with comment period. Response: We thank the commenters for their support. After consideration of the public comments received on our proposal related to the definitions of the status indicators ``K1,'' ``H1,'' and ``K,'' we are finalizing our proposal without modification. Additionally, in order to conform with the policy being finalized in section X.F. of this final rule with comment period, we are revising status indicator ``A'' to list HCPCS code J0799 (FDA approved prescription drug, only for use as HIV pre-exposure prophylaxis (not for use as treatment of HIV), not otherwise classified) in addition to HCPCS code C9399 (Unclassified drugs or biologicals) as the finalized policy treats the two unlisted drug related codes in a similar manner. Therefore, the definition for status indicator ``A'' will now read: ``Unclassified drugs and biologicals reportable under HCPCS code C9399 and not otherwise classified FDA-approved prescription drugs for HIV PrEP reported under HCPCS code J0799.'' We are also finalizing additional policies that exclude certain items or services from C-APC packaging, impacting the definitions of status indicators for comprehensive-APCs, as described in section II.A.2.b. We are revising the ``J1'' and ``J2'' descriptors to refer to the most recent OPPS Addendum J for a list of the C-APC exclusions rather than listing them all in the status indicator definition. Therefore, status indicator ``J1'' will be revised to: ``Paid under OPPS; all covered Part B services on the claim are packaged with the primary `J1' service for the claim, except the Comprehensive APC payment policy exclusions found in the most recent Addendum J.'' Similarly, status indicator ``J2'' will be revised to: ``(1) Comprehensive APC payment based on OPPS comprehensive-specific payment criteria. Payment for all covered Part B services on the claim is packaged into a single payment for specific combinations of services, except the Comprehensive APC payment policy exclusions found in the most recent Addendum J.'' The complete list of CY 2025 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 2025 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 2025 Comment Indicator Definitions

We proposed to use four comment indicators for the CY 2025 OPPS. These comment indicators, ``CH,'' ``NC,'' ``NI,'' and ``NP,'' are in effect for CY 2024; and we proposed to continue their use in CY 2025. The proposed CY 2025 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 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 2025 are listed in Addendum D2 to this final rule with comment period, which is available on [[Page 94309]] the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. We solicited public comments on our proposed definitions of the OPPS comment indicators for 2025. We did not receive any public comments on our proposal and therefore, we are finalizing those definitions without modification for CY 2025.

A. OPPS Payment Rates Update

The March 2024 MedPAC ``Report to the Congress: Medicare Payment Policy,'' recommended that Congress update Medicare OPPS payment rates by the amount specified in current law plus 1.5 percent. We refer readers to the March 2024 report for a complete discussion of this recommendation.\182\ We appreciate MedPAC's recommendation and, as discussed further in section II.B of this final rule with comment period, we proposed to increase the OPPS payment rates by the amount specified in current law. Comments received from MedPAC on other OPPS policies are discussed in the applicable sections of this final rule with comment period. --------------------------------------------------------------------------- \182\ Medicare Payment Advisory Committee. March 2024 Report to the Congress. Chapter 3: Hospital inpatient and outpatient services, p.49. Available at: https://www.medpac.gov. ---------------------------------------------------------------------------

B. Medicare Safety Net Index

In the March 2024 MedPAC ``Report to the Congress: Medicare Payment Policy,'' MedPAC stated that their recommended update to IPPS and OPPS payment rates of current law plus 1.5 percent may not be sufficient to ensure the financial viability of some Medicare safety-net hospitals with a poor payer mix. MedPAC recommends redistributing the current Medicare safety-net payments (disproportionate share hospital and uncompensated care payments) using the MedPAC-developed Medicare Safety-Net Index (MSNI) for hospitals. In addition, MedPAC recommends adding $4 billion to this MSNI pool of funds to help maintain the financial viability of Medicare safety-net hospitals and recommended to the Congress transitional approaches for a MSNI policy. As discussed in the FY 2025 IPPS/LTCH PPS final rule with comment period (89 FR 70045), we look forward to working with Congress on these matters. In the FY 2024 IPPS/LTCH PPS proposed rule, we sought comments on the challenges faced by safety-net hospitals and potential approaches to help safety net hospitals meet those challenges. These comments will inform and guide our future rulemaking and other actions in this area.

C. ASC Cost Data

In the March 2024 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 enable policymakers to establish payment rates that accurately reflect ASC costs and are also necessary to determine whether an existing Medicare market basket 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.\183\ --------------------------------------------------------------------------- \183\ Medicare Payment Advisory Committee. March 2024 Report to the Congress. Chapter 10: Ambulatory surgical center services: Status report, p.297. Available at: https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_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 2025 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 for updating payment rates under the ASC payment system. Comment: A trade group representing ASCs suggested that a starting point on reporting ASC costs could be an effort to identify and calculate expense categories as a percentage of total expenses to help determine the appropriate weights and price proxies for the ASC setting. Further, the commenter stated that cost variability can differ greatly based on specialty, facility size, geographic location, and capital equipment of the facility. One commenter recommended that any such cost data collection should be used to inform a market basket index that is applied to both HOPDs and ASCs to ensure payments are aligned over time. Response: We appreciate the commenters' thoughtful responses. We will take these comments into consideration in future rulemaking. 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 through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through 32292). For a discussion of prior rulemaking on the ASC payment system, we refer readers to the CYs 2012 to 2024 OPPS/ASC final rules with comment period (76 FR 74378 through 74379; 77 FR 68434 through 68467; 78 FR 75064 through 75090; 79 FR 66915 through 66940; 80 FR 70474 through 70502; 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; 87 FR 72054 through 72096; and 88 FR 81900 through 81961). [[Page 94310]]

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 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 2025 OPPS/ASC final 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 2025 OPPS/ASC final rule with comment period (and responding to those comments in the CY 2026 OPPS/ASC final rule with comment period).

2. April 2024 HCPCS Codes Proposed Rule Comment Solicitation

For the April 2024 update, there were no new CPT codes; however, there were several new Level II HCPCS codes. In the April 2024 ASC quarterly update (Transmittal 12559, dated March 28, 2024, CR 13577), we added several new Level II HCPCS codes to the list of covered ancillary services. Table 147 (New Level II HCPCS Codes for Ancillary Services Effective April 1, 2024) of the CY 2025 OPPS/ASC proposed rule (89 FR 59408), displayed the new Level II HCPCS codes that were implemented April 1, 2024. These new codes that were effective April 1, 2024, 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: ASC 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 to be Excluded from Payment in ASCs ASC Addendum FF: ASC Device Offset Percentages. Addendum O: Long Descriptors for New Category I CPT Codes, Category III [[Page 94311]] CPT Codes, C-codes, and G-Codes Effective January 1, 2025. We invited public comments on the proposed payment indicators for the new HCPCS codes that were recognized as ASC covered ancillary services in April 2024 through the quarterly update CRs, as listed in Table 147 (New Level II HCPCS Codes for Ancillary Services Effective April 1, 2024). The new codes that were effective April 1, 2024, were assigned to comment indicator ``NP'' in ASC Addendum BB to the CY 2025 OPPS/ASC proposed rule to indicate that the codes are assigned to interim payment indicators and comments would be accepted on their interim assignments. We proposed to finalize the payment indicators in this CY 2025 OPPS/ASC final rule with comment period. We did not receive any comments on the proposed ASC payment indicator assignments for the new Level II HCPCS codes implemented in April 2024 and are finalizing the proposed ASC payment indicator assignments for these codes. We note that several of the temporary drug HCPCS C-codes have been replaced with permanent drug HCPCS J-codes. Their replacement codes are also listed in Table 147. In addition, although in prior years we included the final ASC payment indicators in the coding tables in the preamble, because we include the same information in the ASC addenda, we have not included them in Table 147. Therefore, readers are advised to refer to the ASC addenda for the final ASC payment indicators and payment rates for all codes reported under the ASC payment system. The list of ASC payment indicators and definitions used under the ASC payment system can be found in the ASC addenda. We note that the ASC addenda (AA, BB, DD1, DD2, EE, and FF) are available via the internet on the CMS website. BILLING CODE 4120-01-P [[Page 94312]] [GRAPHIC] [TIFF OMITTED] TR27NO24.195 BILLING CODE 4120-01-C

3. July 2024 HCPCS Codes Proposed Rule Comment Solicitation

In the July 2024 ASC quarterly update (Transmittal 12673, Change Request 13656, dated June 13, 2024), we added several separately payable CPT and Level II HCPCS codes to the list of covered surgical procedures and covered ancillary services. Table 76 (New HCPCS Codes for Covered Surgical Procedures and Covered Ancillary Services Effective July 1, 2024) of the CY 2025 OPPS/ASC proposed rule (89 FR 59409), displayed the new HCPCS codes that are effective July 1, 2024. We invited public comments on the proposed payment indicators for these Level II HCPCS codes, and indicated that the proposed comment indicators, payment indicators, and payment rates for these codes were listed in Addendum AA and Addendum BB of the proposed rule. These new codes that were effective July 1, 2024, were assigned to comment indicator ``NP'' in ASC Addendum AA and Addendum BB to the CY 2025 OPPS/ASC proposed rule to indicate that the codes were assigned to interim payment indicators and comments would be accepted on their interim [[Page 94313]] assignments. We further stated that we proposed to finalize the payment indicators in this CY 2025 OPPS/ASC final rule with comment period. We note that several of the temporary drug HCPCS C-codes have been replaced with HCPCS J-codes. Their replacement codes are also listed in Table 148. In addition, in prior years we included the final ASC payment indicators in the coding preamble tables, however, because the same information can be found in Addendum AA and Addendum BB, we are no longer including them in Table 148. Therefore, readers are advised to refer to the ASC addenda for the final ASC payment indicators and payment rates for all codes reported under the ASC payment system. We did not receive any comments on the proposed ASC payment indicator assignments for the new Level II HCPCS codes that were added to the list of covered surgical procedures and ancillary services implemented in July 2024. Therefore, we are finalizing the proposed ASC payment indicator assignments for the codes. BILLING CODE 4120-01-P [[Page 94314]] [GRAPHIC] [TIFF OMITTED] TR27NO24.196 [[Page 94315]] BILLING CODE 4120-01-C

4. October 2024 HCPCS Codes Final Rule Comment Solicitation

For CY 2025, consistent with our established policy, we proposed in the CY 2025 OPPS/ASC proposed rule (89 FR 59410) that the Level II HCPCS codes that will be effective October 1, 2024, would be flagged with comment indicator ``NI'' in Addendum BB to the CY 2025 OPPS/ASC final rule with comment period to indicate that we have assigned the codes an interim ASC payment status for CY 2025. In the October 2024 ASC quarterly update (Transmittal 12824, Change Request 13800, dated September 5, 2024), we added several separately payable Level II HCPCS codes to the list of covered surgical procedures and covered ancillary services. Table 149 below lists the codes that were effective October 1, 2024. We are inviting public comments on this final rule with comment period on the interim payment indicators, which would be finalized in the CY 2026 OPPS/ASC final rule with comment period. We note these codes will be subject to comment in the CY 2026 OPPS/ASC proposed rule with comment period, which would be finalized in the CY 2026 OPPS/ASC final rule with comment period. [GRAPHIC] [TIFF OMITTED] TR27NO24.197

5. January 2025 HCPCS Codes

a. New Level II HCPCS Codes Final Rule Comment Solicitation As has been our practice in the past, we incorporate those new Level II HCPCS codes that are effective January 1 in the final rule with comment period, thereby updating the ASC payment system for the calendar year. We note that unlike the CPT codes that are effective January 1 and are included in the OPPS/ASC proposed rules, and except for the G-codes listed in Addendum O to the CY 2025 OPPS/ASC proposed rule, most Level II HCPCS codes are not released until sometime around November to be effective January 1. Because these codes are not available until November, we are unable to include them in the OPPS/ASC proposed rule; however, the codes are flagged with comment indicator ``NI'' in ASC Addendum AA and Addendum BB to this final rule with comment period to indicate that we are assigning them an interim payment status, which is subject to public comment. Therefore, as we stated in the CY 2025 OPPS/ASC proposed rule, these Level II HCPCS codes that will be effective January 1, 2025, are included in this final rule with comment period and will also be released to the public through in the January 2025 ASC Update CR and the CMS HCPCS website. We are inviting public comments in this final rule with comment period on the payment indicator assignments, which would be finalized in the CY 2026 OPPS/ASC final rule with comment period. Similar to the codes effective October 1, 2024, these new Level II HCPCS codes that will be effective January 1, 2025, will be subject to comment in the CY 2026 OPPS/ASC proposed rule, which would [[Page 94316]] be finalized in the CY 2026 OPPS/ASC final rule with comment period. b. New CY 2025 CPT Codes Proposed Rule Comment Solicitation For the CY 2025 ASC update, we received the CPT codes that will be effective January 1, 2025, from the AMA in time to be included in the CY 2025 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes can be found in ASC Addendum AA and Addendum BB to the CY 2024 OPPS/ASC proposed rule, which are available via the internet on the CMS website. We note that the new and revised CPT codes are assigned to comment indicator ``NP'' in ASC Addendum AA and Addendum BB of the CY 2025 OPPS/ASC proposed rule to indicate that the code is new for the next calendar year, or the code is an existing code with substantial revision to its code descriptor in the next calendar year as compared to the current calendar year with a proposed payment indicator assignment. We stated that we would accept comments and finalize the payment indicators in this CY 2025 OPPS/ASC final rule with comment period. Further, we remind readers that the CPT code descriptors that appeared in Addendum AA and Addendum BB are short descriptors and do not 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 CY 2025 CPT codes in Addendum O to the CY 2025 OPPS/ASC proposed rule so that the public could comment on our proposed payment indicator assignments. The 5-digit placeholder codes were listed in Addendum O to the CY 2025 OPPS/ASC proposed rule, specifically under the column labeled ``CY 2025 OPPS/ASC Proposed Rule 5-Digit Placeholder Code.'' We also stated that we would include the final CPT code numbers in this CY 2025 OPPS/ASC final rule with comment period. We did not receive any comments on the proposed ASC payment indicators for the new CPT codes effective January 1, 2025, so we are finalizing these codes as proposed. Finally, in Table 150, we summarize our process for updating codes through our ASC quarterly update CRs, seeking public comments, and finalizing the treatment of these new codes under the ASC payment system. BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TR27NO24.198 BILLING CODE 4120-01-C

6. ASC Payment and Comment Indicators

a. Background In addition to the payment indicators that we introduced in the August 2, 2007 ASC final rule, we created final comment indicators for the ASC payment system in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66855). We created Addendum DD1 to define ASC payment indicators that we use in Addenda AA and BB to provide payment information regarding covered surgical procedures and covered ancillary services, respectively, under the revised ASC payment system. The ASC payment indicators in Addendum DD1 are intended to capture policy- relevant characteristics of HCPCS [[Page 94317]] codes that may receive packaged or separate payment in ASCs, such as whether they were on the ASC CPL prior to CY 2008; payment designation, such as device-intensive or office-based, and the corresponding ASC payment methodology; and their classification as separately payable ancillary services, including radiology services, brachytherapy sources, OPPS pass-through devices, corneal tissue acquisition services, drugs or biologicals, or NTIOLs. We also created Addendum DD2 that lists the ASC comment indicators. The ASC comment indicators included in Addenda AA and BB to the proposed rules and final rules with comment period serve to identify, for the revised ASC payment system, the status of a specific HCPCS code and its payment indicator with respect to the timeframe when comments will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC final rule with comment period to indicate new codes for the next calendar year for which the interim payment indicator assigned is subject to comment. The comment indicator ``NI'' also is assigned to existing codes with substantial revisions to their descriptors such that we consider them to be describing new services, and the interim payment indicator assigned is subject to comment, as discussed in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60622). The comment indicator ``NP'' is used in the OPPS/ASC proposed rule to indicate new codes for the next calendar year for which the proposed payment indicator assigned is subject to comment. The comment indicator ``NP'' also is assigned to existing codes with substantial revisions to their descriptors, such that we consider them to be describing new services, and the proposed payment indicator assigned is subject to comment, as discussed in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70497). The ``CH'' comment indicator is used in Addenda AA and BB to the proposed rule (these addenda are available via the internet on the CMS website) to indicate that the payment indicator assignment has changed for an active HCPCS code in the current year and the next calendar year, for example, if an active HCPCS code is newly recognized as payable in ASCs or an active HCPCS code is discontinued at the end of the current calendar year. The ``CH'' comment indicators that are published in the final rule are provided to alert readers that a change has been made from one calendar year to the next, but do not indicate that the change is subject to comment. In the CY 2021 OPPS/ASC final rule with comment period, we finalized the addition of ASC payment indicator ``K5''--Items, Codes, and Services for which pricing information and claims data are not available. No payment made.--to ASC Addendum DD1 (which is available via the internet on the CMS website) to indicate those services and procedures that CMS anticipates will become payable when claims data or payment information becomes available. In CY 2024 OPPS/ASC final rule with comment period, we finalized the addition of two ASC payment indicators, ``D1''--``Ancillary dental service/item; no separate payment made'' and ``D2''--``Non office-based dental procedure added in CY 2024 or later'', for new dental codes for CY 2024 and subsequent calendar years to indicate potentially payable dental services and procedures in the ASC setting (88 FR 81907). We added these two codes to Addendum DD1 (which is available via the internet on the CMS website). b. Final ASC Payment and Comment Indicators for CY 2025 For CY 2025, we proposed new and revised Category I and III CPT codes as well as new and revised Level II HCPCS codes. Proposed Category I and III CPT codes that are new and revised for CY 2025 and any new and existing Level II HCPCS codes with substantial revisions to the code descriptors for CY 2025, compared to the CY 2024 descriptors, are included in ASC Addenda AA and BB to the CY 2025 OPPS/ASC proposed rule and labeled with comment indicator ``NP'' to indicate that these CPT and Level II HCPCS codes are open for comment as part of the CY 2025 OPPS/ASC proposed rule. We proposed to modify the descriptor of ASC payment indicator ``L6''--``New Technology Intraocular Lens (NTIOL); special payment'' to ``Special payment; New Technology Intraocular Lens (NTIOL) or qualifying non-opioid devices'', to account for non-opioid devices paid for under the ASC payment system pursuant to section 4135 of the CAA, 2023. More information about this non-opioid policy can be found in section XIII.E of this final rule with comment period. We refer readers to Addenda DD1 and DD2 of this final rule with comment period (these addenda are available via the internet on the CMS website) for the complete list of ASC payment and comment indicators proposed for the CY 2025 update. We did not receive any public comments on our proposal and therefore, we are finalizing our proposal to modify the descriptor of ASC payment indicator ``L6''--``New Technology Intraocular Lens (NTIOL); special payment'' to ``Special payment; New Technology Intraocular Lens (NTIOL) or qualifying non-opioid devices'', to account for non-opioid devices paid for under the ASC payment system pursuant to section 4135 of the CAA, 2023.

1. Final ASC Payment for Covered Surgical Procedures

a. Background Our ASC payment policies for covered surgical procedures under the revised ASC payment system are described in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66828 through 66831). Under our established policy, we use the ASC standard ratesetting methodology of multiplying the ASC relative payment weight for the procedure by the ASC conversion factor for that same year to calculate the national unadjusted payment rates for procedures with payment indicators ``G2'' and ``A2.'' Payment indicator ``A2'' was developed to identify procedures that were included on the list of ASC covered surgical procedures in CY 2007 and, therefore, were subject to transitional payment prior to CY 2011. Although the 4-year transitional period has ended and payment indicator ``A2'' is no longer required to identify surgical procedures subject to transitional payment, we have retained payment indicator ``A2'' because it is used to identify procedures that are exempted from the application of the office-based designation. Payment rates for office-based procedures (payment indicators ``P2,'' ``P3,'' and ``R2'') are the lower of the PFS nonfacility PE RVU-based amount or the amount calculated using the ASC standard rate setting methodology for the procedure. As detailed in section XIII.C.3.b of this final rule with comment period, we update the payment amounts for office-based procedures (payment indicators ``P2,'' ``P3,'' and ``R2'') using the most recent available MPFS and OPPS data. We compare the estimated current year rate for each of the office-based procedures, calculated according to the ASC standard rate setting methodology, to the PFS nonfacility PE RVU-based amount to determine which is lower and, therefore, would be the current year payment rate for the procedure under our final policy for the revised ASC payment system (Sec. 416.171(d)). [[Page 94318]] The rate calculation established for device-intensive procedures (payment indicator ``J8'') is structured so only the service (non- device) portion of the rate is subject to the ASC conversion factor. We update the payment rates for device-intensive procedures to incorporate the most recent device offset percentages calculated under the ASC standard ratesetting methodology, as discussed in section XIII.C.4 of this final rule with comment period. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75081), we finalized our proposal to calculate the CY 2014 payment rates for ASC covered surgical procedures according to our established methodologies, with the exception of device removal procedures. For CY 2014, we finalized a policy to conditionally package payment for device removal procedures under the OPPS. Under the OPPS, a conditionally packaged procedure (status indicators ``Q1'' and ``Q2'') describes a HCPCS code where the payment is packaged when it is provided with a significant procedure but is separately paid when the service appears on the claim without a significant procedure. Because ASC services always include a covered surgical procedure, HCPCS codes that are conditionally packaged under the OPPS are always packaged (payment indicator ``N1'') under the ASC payment system. Under the OPPS, device removal procedures are conditionally packaged and, therefore, would be packaged under the ASC payment system. There is no Medicare payment made when a device removal procedure is performed in an ASC without another surgical procedure included on the claim; therefore, no Medicare payment would be made if a device was removed but not replaced. To ensure that the ASC payment system provides separate payment for surgical procedures that only involve device removal-- conditionally packaged in the OPPS (status indicator ``Q2'')--we have continued to provide separate payment since CY 2014 and assign the current ASC payment indicators associated with these procedures. b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2025 We proposed to update ASC payment rates for CY 2025 and subsequent years using the established rate calculation methodologies under Sec. 416.171 and using our definition of device-intensive procedures, as discussed in section XIII.C.4 of this final rule with comment period. As the proposed OPPS relative payment weights are generally based on geometric mean costs, we proposed that the ASC payment system will generally use the geometric mean cost to determine proposed relative payment weights under the ASC standard methodology. We proposed to continue to use the amount calculated under the ASC standard ratesetting methodology for procedures assigned payment indicators ``A2'' and ``G2.'' We proposed to calculate payment rates for office-based procedures (payment indicators ``P2,'' ``P3,'' and ``R2'') and device-intensive procedures (payment indicator ``J8'') according to our established policies and to identify device-intensive procedures using the methodology discussed in section XIII.C.4 of this final rule with comment period. Therefore, we proposed to update the payment amount for the service portion (the non-device portion) of the device-intensive procedures using the standard ASC ratesetting methodology and the payment amount for the device portion based on the proposed CY 2025 device offset percentages that have been calculated using the standard OPPS APC ratesetting methodology. We proposed that payment for office- based procedures would be at the lesser of the proposed CY 2025 MPFS nonfacility PE RVU-based amount or the proposed CY 2025 ASC payment amount calculated according to the ASC standard ratesetting methodology. As we did for CYs 2014 through 2024, for CY 2025, we proposed to continue our policy for device removal procedures, such that device removal procedures that are conditionally packaged in the OPPS (status indicators ``Q1'' and ``Q2'') will be assigned the current ASC payment indicators associated with those procedures and will continue to be paid separately under the ASC payment system. Comment: One commenter expressed concern about the lack of a cap on beneficiary coinsurance in the ASC setting while there is a statutory cap on beneficiary coinsurance when a procedure is performed in the HOPD setting. The commenter believes the lack of such a cap poses a financial challenge for beneficiaries, particularly with respect to transitional pass-through devices and higher-cost procedures that are device intensive, because in such cases, the coinsurance could be higher in the ASC setting than in the HOPD setting. Response: We thank the commenter for its input but note that comments related to statutory changes are out of scope for this final rule. After consideration of the public comments we received, we are finalizing our proposed policies without modification to calculate the CY 2025 payment rates for ASC covered surgical procedures according to our established rate calculation methodologies under Sec. 416.171 and our device-intensive methodology as discussed in section XIII.C.1.b. of this CY 2025 OPPS/ASC final rule with comment period. For covered office-based surgical procedures, the payment rate is the lesser of the final CY 2025 MPFS nonfacility PE RVU-based amount or the CY 2025 ASC payment amount calculated according to the ASC standard ratesetting methodology. The final payment indicators and rates set forth in this final rule with comment period are based on a comparison using the PFS PE RVUs and the conversion factor effective January 1, 2025. c. Final Payment for ASC Add-On Procedures Eligible for Complexity Adjustments Under the OPPS In this section, we discuss the policy to provide increased payment under the ASC payment system for combinations of certain ``J1'' service codes and add-on procedure codes that are eligible for a complexity adjustment under the OPPS. (1) OPPS C-APC Complexity Adjustment Policy Under the OPPS, complexity adjustments are utilized to provide increased payment for certain comprehensive services. As discussed in section II.A.2.b of this final rule with comment period, we apply a complexity adjustment by promoting qualifying paired ``J1'' service code combinations or paired code combinations of ``J1'' services and add-on codes from the originating Comprehensive APC (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. A ``J1'' status indicator refers to a hospital outpatient service paid through a C-APC. We package payment for all add-on codes, which are codes that describe a procedure or service always performed in addition to a primary service or procedure, into the payment for the C-APC. However, certain combinations of primary service codes and add-on codes may qualify for a complexity adjustment. We apply complexity adjustments when the paired code combination represents a complex, costly form or version of the primary service when the frequency and cost thresholds are met. The frequency threshold is met when there are 25 or more claims reporting the code combination, and the cost threshold is met when there is a violation of the 2 times rule, as specified in section 1833(t)(2) of the Act and [[Page 94319]] described in section III.A.2.b of this final rule with comment period, in the originating C-APC. These paired code combinations that meet the frequency and cost threshold criteria represent those that exhibit materially greater resource requirements than the primary service. 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 that are either assigned to status indicator ``J1'' or add-on codes to determine if there are paired code combinations that meet the complexity adjustment criteria. Once we have determined that a particular combination of ``J1'' services, or combinations of a ``J1'' service and add-on code, 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 previously, we promote the claim 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 C-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). 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 the primary service code reported with the add-on code is not reassigned to the next higher cost C-APC. We list the final complexity adjustments for ``J1'' and add-on code combinations for CY 2025, along with all of 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). (2) CY 2025 ASC Special Payment Policy for OPPS Complexity-Adjusted C- APCs For CY 2025, we proposed to continue the special payment policy and methodology for OPPS complexity-adjusted C-APCs that was finalized in the CY 2023 OPPS/ASC final rule with comment period (87 FR 72078 through 72080). For those ASC complexity adjustment codes for which we have claims data, we proposed to use the claims data to calculate the code combination utilization and estimated payments for the ASC payment system budget neutrality calculations for CY 2025. The ASC complexity adjustment budget neutrality calculations are discussed further in section XIII.H.2.a of this final rule with comment period. The full list of the proposed ASC complexity adjustment codes for CY 2025 can be found in the CY 2025 proposed ASC addenda and the supplemental policy file, which also includes both the existing ASC complexity adjustment codes and proposed additions and was published on the CMS website at https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/asc-regulations-and-notices. Since the complexity adjustment assignments change each year under the OPPS, the proposed list of ASC complexity adjustment codes eligible for the proposed payment policy changed slightly from the previous year. Comment: A few commenters noted that there was a decline in the number of ASC complexity adjustment codes for the CY 2025 OPPS/ASC proposed rule compared to years prior. The commenters noted that there were 55 ASC complexity adjustment codes in 2023, 47 ASC complexity adjustment codes in 2024, and only 45 ASC proposed complexity adjustment codes for CY 2025. Other commenters recommended specific ASC complexity adjustment codes we did not propose. Several commenters were concerned with how the device portion for ASC complexity adjustment codes are determined. Commenters believed we were potentially missing large device costs associated with the packaged add-on procedure that could only be realized if the device offset percentage of the ASC complexity adjustment code was calculated from the subset of ``J1'' primary service and add-on code claim combinations. Response: Since the number of OPPS complexity adjustments fluctuate on a year-to-year basis, the number of ASC complexity adjustment codes will also fluctuate each calendar year. For this CY 2025 OPPS/ASC final rule with comment period, we are finalizing 49 ASC complexity adjustment codes, which is an increase from the 47 ASC complexity adjustment codes for CY 2024. Additionally, we rely on the complexity adjustment criteria under the OPPS, as described in section II.A.2.b. of this final rule with comment period, for determining eligible ASC complexity adjustment codes under the ASC payment system and do not accept specific code combination recommendations, such as those recommended by commenters, if they do not meet these criteria. With respect to the commenters' concerns regarding the device portion of ASC complexity adjustment codes, we believe the current methodology of assigning the device portion from the primary ``J1'' procedure to the ASC complexity adjustment code is the most appropriate. As shown in Addendum J (which can be found on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices), the evaluation subset for a ``J1'' and add-on code combination is often less than 100 claims and can be significantly less than the total number of claims for that primary ``J1'' procedure used for ratesetting. We are concerned that using such a small subset of a procedure's available claims for determining the device portion of a device-intensive ASC complexity adjustment code would introduce unnecessary volatility. We believe that assigning a device portion for a device-intensive ASC complexity adjustment code based on the device portion of the primary ``J1'' procedure accurately reflects the device costs of the primary ``J1'' procedure--since the device costs associated with the add-on code are already packaged into the cost of the primary procedure--and provides a more stable payment rate by using the greater number of claims that are available from the primary ``J1'' procedure, as opposed to the subset of claims with a ``J1'' and add-on code combination. However, we appreciate the commenters' recommendation and may take this comment into consideration in future rulemaking. After consideration of the public comments we received, we are finalizing the ASC special payment policy for OPPS complexity-adjusted C-APCs, as proposed. The final ASC complexity adjustment codes, based on the most recent data available for this CY 2025 OPPS/ASC final rule with comment period, can be found on the CMS website at: https:// www.cms.gov/medicare/payment/prospective- [[Page 94320]] payment-systems/ambulatory-surgical-center-asc/annual-policy-files. Existing ASC complexity adjustment codes that do not meet our criteria for separate payment for CY 2025 because the code combination is not eligible for a complexity adjustment under the OPPS for CY 2025 will be non-payable and assigned a status indicator of ``B5''--``Alternative code may be available; no payment made''--for CY 2025. Additionally, proposed ASC complexity adjustment codes that met our criteria based on data available for the CY 2025 OPPS/ASC proposed rule but do not meet our criteria based on claims data available for this final rule with comment period will be deleted and assigned a payment indicator of ``D5''--``Deleted/discontinued code; no payment made''. d. Final Low Volume APCs and Limit on ASC Payment Rates for Procedures Assigned to Low Volume APCs As stated in section XIII.D.1.b of the CY 2025 OPPS/ASC proposed rule, the ASC payment system generally uses OPPS geometric mean costs under the standard methodology to determine proposed relative payment weights under the standard ASC ratesetting methodology. In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743 through 63747), we adopted a universal Low Volume APC policy for CY 2022 and subsequent calendar years. Under our policy, we expanded the low volume adjustment policy that is applied to procedures assigned to New Technology APCs to also apply to clinical and brachytherapy APCs. Specifically, a clinical APC or brachytherapy APC with fewer than 100 claims per year would be designated as a Low Volume APC. For items or services assigned to a Low Volume APC, we use up to 4 years of claims data to establish a payment rate for the APC as we currently do for low volume services assigned to New Technology APCs. The payment rate for a Low Volume APC or a low volume New Technology procedure would be based on the highest of the median cost, arithmetic mean cost, or geometric mean cost calculated using multiple years of claims data. Based on claims data available for the CY 2025 OPPS/ASC proposed rule, we proposed to designate six brachytherapy APCs and four clinical APCs as Low Volume APCs under the ASC payment system (89 FR 59414). The four clinical APCs and six brachytherapy APCs met our criteria of having fewer than 100 single claims in the relevant claims year (CY 2023 for the CY 2025 OPPS/ASC proposed rule) and therefore, we proposed that they would be subject to our universal Low Volume APC policy and the APC cost metric would be based on the greater of the median cost, arithmetic mean cost, or geometric mean cost using up to 4 years of claims data. Nine of the ten APCs were designated as low volume APCs in CY 2024. Based on data for the CY 2025 OPPS/ASC proposed rule, APC 2645 (Brachytx, non-stranded, hold-198) met our criteria to be designated a low volume APC; and we proposed to designate it as such for CY 2025. Comment: Commenters supported our proposal to assign the ten APCs as Low Volume APCs. Response: We thank the commenters for their support. Based on claims data available for this final rule with comment period, we are finalizing our proposal to designate the 4 clinical APCs and 6 brachytherapy APCs shown in Table 151 as Low Volume APCs under the ASC payment system, because they continue to meet our criteria of having fewer than 100 single claims in the relevant claims year (2023). Table 151 includes the CY 2023 claims available for ratesetting for each of the APCs we are finalizing to be designated as Low Volume APCs for CY 2025. The cost statistics for our Low Volume APCs, such as the median, arithmetic mean, and geometric mean cost are available for download with this final rule with comment period on the CMS website. We refer readers to our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices; click on the relevant regulation to download the Low Volume APC cost statistics under the standard (ASC) ratesetting methodology in the ``Downloads'' section of the web page. [GRAPHIC] [TIFF OMITTED] TR27NO24.199 [[Page 94321]]

2. Payment for Covered Ancillary Services

a. Background Our payment policies under the ASC payment system for covered ancillary services generally vary according to the particular type of service and its payment policy under the OPPS. Our overall policy provides separate ASC payment for certain ancillary items and services integrally related to the provision of ASC covered surgical procedures that are paid separately under the OPPS and provides packaged ASC payment for other ancillary items and services that are packaged or conditionally packaged (status indicators ``N,'' ``Q1,'' and ``Q2'') under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 FR 68457 through 68458), we further clarified our policy regarding the payment indicator assignment for procedures that are conditionally packaged in the OPPS (status indicators ``Q1'' and ``Q2''). Under the OPPS, 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 (except for device removal procedures, as discussed in the CY 2022 OPPS/ASC proposed rule (86 FR 42083)). Thus, our policy generally aligns ASC payment bundles with those under the OPPS (72 FR 42495). In all cases, in order for ancillary items and services also to be paid, the ancillary items and services must be provided integral to the performance of ASC covered surgical procedures for which the ASC bills Medicare. Our ASC payment policies generally provide separate payment for drugs and biologicals that are separately paid under the OPPS at the OPPS rates and package payment for drugs and biologicals for which payment is packaged under the OPPS. However, as discussed in the CY 2022 OPPS/ASC final rule with comment period, for CY 2022, we finalized a policy to unpackage and pay separately at ASP plus 6 percent for the cost of non-opioid pain management drugs and biologicals that function as a supply when used in a surgical procedure as determined by CMS under Sec. 416.174 (86 FR 63483). We generally pay for separately payable radiology services at the lower of the PFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the ASC standard ratesetting methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/ ASC final rule with comment period (75 FR 72050), payment indicators for all nuclear medicine procedures (defined as CPT codes in the range of 78000 through 78999) that are designated as radiology services that are paid separately when provided integral to a surgical procedure on the ASC list are set to ``Z2'' so that payment is made based on the ASC standard ratesetting methodology rather than the MPFS nonfacility PE RVU amount (``Z3''), regardless of which is lower (Sec. 416.171(d)(1)). Similarly, we also finalized our policy to set the payment indicator to ``Z2'' for radiology services that use contrast agents so that payment for these procedures will be based on the OPPS relative payment weight using the ASC standard ratesetting methodology and, therefore, will include the cost for the contrast agent (Sec. 416.171(d)(2)). ASC payment policy for brachytherapy sources mirrors the payment policy under the OPPS. ASCs are paid for brachytherapy sources provided integral to ASC covered surgical procedures at prospective rates adopted under the OPPS or, if OPPS rates are unavailable, at contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs have been paid for brachytherapy sources provided integral to ASC covered surgical procedures at prospective rates adopted under the OPPS. Our ASC policies also provide separate payment for: (1) certain items and services that CMS designates as contractor-priced, including, but not limited to, the procurement of corneal tissue; and (2) certain implantable items that have pass-through payment status under the OPPS. These categories do not have prospectively established ASC payment rates according to ASC payment system policies (72 FR 42502 and 42508 through 42509; Sec. 416.164(b)). Under the ASC payment system, we have designated corneal tissue acquisition and hepatitis B vaccines as contractor-priced. Corneal tissue acquisition is contractor-priced based on the invoiced costs for acquiring the corneal tissue for transplantation. Hepatitis B vaccines are contractor-priced based on invoiced costs for the vaccine. Devices that are eligible for pass-through payment under the OPPS are separately paid under the ASC payment system and are contractor- priced. Under the revised ASC payment system (72 FR 42502), payment for the surgical procedure associated with the pass-through device is made according to our standard methodology for the ASC payment system, based on only the service (non-device) portion of the procedure's OPPS relative payment weight if the APC weight for the procedure includes other packaged device costs. We also refer to this methodology as applying a ``device offset'' to the ASC payment for the associated surgical procedure. This ensures that duplicate payment is not provided for any portion of an implanted device with OPPS pass-through payment status. In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933 through 66934), we finalized that, beginning in CY 2015, certain diagnostic tests within the medicine range of CPT codes for which separate payment is allowed under the OPPS are covered ancillary services when they are integral to an ASC covered surgical procedure. We finalized that diagnostic tests within the medicine range of CPT codes include all Category I CPT codes in the medicine range established by CPT, from 90000 to 99999, and Category III CPT codes and Level II HCPCS codes that describe diagnostic tests that crosswalk or are clinically similar to procedures in the medicine range established by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also finalized our policy to pay for these tests at the lower of the PFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the ASC standard ratesetting methodology (79 FR 66933 through 66934). We finalized that the diagnostic tests for which the payment is based on the ASC standard ratesetting methodology be assigned to payment indicator ``Z2'' and revised the definition of payment indicator ``Z2'' to include a reference to diagnostic services and those for which the payment is based on the PFS nonfacility PE RVU- based amount be assigned payment indicator ``Z3,'' and revised the definition of payment indicator ``Z3'' to include a reference to diagnostic services. b. Final Payment for Covered Ancillary Services for CY 2025 We proposed to update the ASC payment rates and to make changes to ASC payment indicators, as necessary, to maintain consistency between the OPPS and ASC payment system regarding the packaged or separately payable status of services and the proposed CY 2025 OPPS and ASC [[Page 94322]] payment rates and subsequent years' payment rates. We also proposed to continue to set the CY 2025 ASC payment rates and subsequent years' payment rates for brachytherapy sources and separately payable drugs and biologicals equal to the OPPS payment rates for CY 2025 and subsequent years' payment rates. Covered ancillary services and their final payment indicators for CY 2025 are listed in Addendum BB of this final rule with comment period (which is available via the internet on the CMS website). For those covered ancillary services where the payment rate is the lower of the rate under the ASC standard rate setting methodology and the PFS final rates (similar to our office-based payment policy), the final payment indicators and rates set forth in this final rule are based on a comparison using the final PFS rates effective January 1, 2025. For a discussion of the PFS rates, we refer readers to the CY 2025 PFS proposed rule. Comment: One commenter stated that there is currently no CMS-level guidance on how MACs should establish separate payment under the ASC payment system for devices that are eligible for pass-through payment under the OPPS. The commenter recommends that CMS specify that payment should be at least equal to the device cost as reported by the ASC in box 19 on the ASC claim form. Response: As previously discussed, devices that are eligible for pass-through payment under the OPPS may be separately paid under the ASC payment system and are contractor-priced. Currently, MACs have been instructed to pay for such devices in the ASC setting based on invoice or cost of the approved transitional pass-through device category. While we understand that many products with different price points may use the same approved transitional pass-through device category, we rely on the MACs to efficiently process these claims such that ASCs can be reimbursed in a timely manner for the services provided and that reimbursement for these pass-through devices is justified with supporting documentation. Therefore, we do not believe it would be appropriate to require MACs to provide payment based on the figure reported in box 19 of the ASC claim form. We believe the current guidance provided in Chapter 14, section 50 of the Medicare Claims Processing Manual (Pub. 100-04) is sufficient. After consideration of the public comments we received, we are finalizing our proposal to update the ASC payment rates and to make changes to ASC payment indicators, as necessary, to maintain consistency between the OPPS and ASC payment system regarding the packaged or separately payable status of services and the final CY 2025 OPPS and ASC payment rates and subsequent years' payment rates. We did not receive any public comments on and are also finalizing without modification our proposal to continue to set the CY 2025 ASC payment rates and subsequent years' payment rates for brachytherapy sources and separately payable drugs and biologicals equal to the OPPS payment rates for CY 2025 and subsequent years' payment rates.

3. Covered Surgical Procedures Designated as Office-Based Procedures

a. Background In the August 2, 2007 ASC final rule, we finalized our policy to designate as ``office-based'' those procedures that are added to the ASC Covered Procedures List (CPL) in CY 2008 or later years that we determine are furnished predominantly (more than 50 percent of the time) in physicians' offices based on consideration of the most recent available volume and utilization data for each individual procedure code and/or, if appropriate, the clinical characteristics, utilization, and volume of related codes. In that final rule, we also finalized our policy to exempt all procedures on the CY 2007 ASC list from application of the office-based classification (72 FR 42512). The procedures that were added to the ASC CPL beginning in CY 2008 that we determined were office-based were identified in Addendum AA to that final rule with payment indicator ``P2'' (Office-based surgical procedure added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS relative payment weight); ``P3'' (Office-based surgical procedures added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs; payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-based surgical procedure added to ASC list in CY 2008 or later without MPFS nonfacility PE RVUs; payment based on OPPS relative payment weight), depending on whether we estimated the procedure would be paid according to the ASC standard ratesetting methodology based on its OPPS relative payment weight or at the MPFS nonfacility PE RVU-based amount. Consistent with our final policy to annually review and update the ASC CPL to include all covered surgical procedures eligible for payment in ASCs, each year we identify covered surgical procedures as either temporarily office-based (these are new procedure codes with little or no utilization data that we have determined are clinically similar to other procedures that are permanently office-based), permanently office-based, or nonoffice-based, after taking into account updated volume and utilization data. b. CY 2025 Final Office-Based Procedures In developing the CY 2025 OPPS/ASC proposed rule, we followed our policy to annually review and update the covered surgical procedures for which ASC payment is made and to identify new procedures that may be appropriate for ASC payment, including their potential designation as office-based. Historically, we also review the most recent claims volume and utilization data (CY 2023 claims) and the clinical characteristics for all covered surgical procedures that are currently assigned a payment indicator in CY 2024 of ``G2'' (Non office-based surgical procedure added in CY 2008 or later; payment based on OPPS relative payment weight) as well as for those procedures assigned one of the temporary office-based payment indicators, specifically ``P2,'' ``P3,'' or ``R2'' in the CY 2023 OPPS/ASC final rule with comment period (86 FR 63769 through 63773). Our review of the CY 2023 volume and utilization data of covered surgical procedures currently assigned a payment indicator of ``G2'' (Non office-based surgical procedure added in CY 2008 or later; payment based on OPPS relative payment weight) resulted in the identification of two surgical procedures that we believed met the criteria for designation as permanently office-based. The data indicated that these procedures are performed more than 50 percent of the time in physicians' offices, and the services are of a level of complexity consistent with other procedures performed routinely in physicians' offices. The CPT codes that we proposed to permanently designate as office-based for CY 2025 were CPT code 0447T (Removal of implantable interstitial glucose sensor from subcutaneous pocket via incision) and CPT code 21127 (Augmentation, mandibular body or angle; with bone graft, onlay or interpositional (includes obtaining autograft)) and are listed in Table 79 of the CY 2025 OPPS/ASC proposed rule (89 FR 59416) with the associated payment indicators. As discussed in the August 2, 2007 ASC final rule (72 FR 42533 through 42535), we finalized our policy to [[Page 94323]] designate certain new surgical procedures as temporarily office-based until adequate claims data are available to assess their predominant sites of service, whereupon if we confirm their office-based nature, the procedures are permanently assigned to the list of office-based procedures. In the absence of claims data, we use other available information, including our clinical advisors' judgment, predecessor CPT and Level II HCPCS codes, information submitted by representatives of specialty societies and professional associations, and information submitted by commenters during the public comment period. We reviewed CY 2023 volume and utilization data for nine surgical procedures designated as temporarily office-based in the CY 2023 OPPS/ ASC final rule with comment period and temporarily assigned one of the office-based payment indicators, specifically ``P2,'' ``P3,'' or ``R2.'' In Table 122 of the CY 2024 OPPS/ASC final rule with comment period, we finalized assigning temporary office-based designations to seven surgical procedures for CY 2024 (88 FR 81919). In Table 80 of the CY 2025 OPPS/ASC proposed rule (89 FR 59417), we showed the surgical procedure we proposed to no longer designate as temporarily office- based. This surgical procedure is CPT code 67516 (Suprachoroidal space injection of pharmacologic agent (separate procedure)) which we proposed to permanently designate as office-based. We did not receive any public comments on our proposed permanent office-based designations and therefore, we are finalizing our proposal to designate the procedures in Table 152 as permanently office-based beginning in CY 2025. [GRAPHIC] [TIFF OMITTED] TR27NO24.200 In Table 81 of the CY 2025 OPPS/ASC proposed rule (89 FR 59418), we showed the nine surgical procedures, both new and existing, we proposed to designate as temporarily office-based for CY 2025. For CY 2025, we proposed to designate three new CY 2025 CPT codes for ASC covered surgical procedures as temporarily office-based--CPT codes 0910T (placeholder code XX34T) (Removal of integrated neurostimulation system, vagus nerve), 15013 (placeholder code 15XX3) (Preparation of skin cell suspension autograft, requiring enzymatic processing, manual mechanical disaggregation of skin cells, and filtration; first 25 sq cm or less of harvested skin), and 53866 (placeholder code 5XX06) (Catheterization with removal of temporary device for ischemic remodeling (i.e., pressure necrosis) of bladder neck and prostate). After reviewing the clinical characteristics, utilization, and volume of related procedure codes, we determined that CPT code 0910T is most similar to 0588T, which is temporarily designated as an office-based surgical procedure. Additionally, CPT code 15013 is most similar to CPT code 11310 (Shaving of epidermal or dermal lesion, single lesion, face, ears, eyelids, nose, lips, mucous membrane; lesion diameter 0.5 cm or less), which is designated as an office-based surgical procedure. Lastly, CPT code 53866 is most similar to CPT code 51705 (Change of bladder tube) which is also designated as an office-based surgical procedure. We also proposed to continue to designate six existing procedures as temporarily office-based for CY 2025 since we did not have adequate claims data to remove the temporary designation. Comment: One commenter recommended that we do not finalize our office-based designation for CPT code 15013 and reassign CPT code 15013 from ``R2'' (Office-based surgical procedure added to ASC list in CY 2008 or later without MPFS nonfacility PE RVUs; payment based on OPPS relative payment weight) to ``J8'' (Device-intensive procedure; paid at adjusted rate). Response: We are not accepting this recommendation. We do not believe this procedure meets our requirements of a device-intensive procedure as described in section XIII.C.4. of this final rule with comment period because it does not use an insertable or implantable single-use device. After consideration of the public comments we received, we are finalizing our proposal with modification. We are not finalizing our proposed temporary office-based designation to CPT code 0910T (placeholder code XX34T) (Removal of [[Page 94324]] integrated neurostimulation system, vagus nerve). As discussed in section III.E of this final rule with comment period, since the vagal nerve neurostimulation system has not yet received FDA approval, we are finalizing an OPPS status indicator ``E1'' to indicate that the code is not payable by Medicare when submitted on outpatient claims (any outpatient bill type). Therefore, for the ASC payment system, we are finalizing a payment indicator of ``Y5''--``Nonsurgical procedure/item not valid for Medicare purposes because of coverage, regulation and/or statute; no payment made'' for CY 2025. Further, we are also not finalizing our temporary office-based designation of CPT code 65785 (Implantation of intrastromal corneal ring segments) as this code meets our criteria to be designated as device-intensive for CY 2025 and we are finalizing that designation for this CPT code. While we are finalizing the payment indicators to the other new and existing procedures which are designated as temporary office-based shown in Table 153, we are also modifying our proposal with the addition of three newly created surgical procedure codes: HCPCS codes C8002 (Preparation of skin cell suspension autograft, automated, including all enzymatic processing and device components (do not report with manual suspension preparation)), G0564 (Creation of subcutaneous pocket with insertion of 365 day implantable interstitial glucose sensor, including system activation and patient training), and G0565 (Removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new 365 day implantable sensor, including system activation). We believe HCPCS C8002 is most similar to CPT code 15013 (Preparation of skin cell suspension autograft, requiring enzymatic processing, manual mechanical disaggregation of skin cells, and filtration; first 25 sq cm or less of harvested skin), a CPT code to which we are also finalizing a temporary office-based designation for CY 2025. Additionally, we believe HCPCS codes G0564 and G0565 are most similar to CPT codes 0446T (Creation of subcutaneous pocket with insertion of implantable interstitial glucose sensor, including system activation and patient training) and 0448T (Removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new implantable sensor, including system activation), respectively. Both of these CPT codes are designated as office-based procedures; therefore, we are assigning a temporary office-based designation to HCPCS codes G0564 and G0545 as well. The procedures for which the final office- based designation for CY 2025 is temporary are also indicated by an asterisk in Addendum AA to this final rule with comment period (which is available via the internet on the CMS website at https:// www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC- Regulations-and-Notices). BILLING CODE 4120-01-P [[Page 94325]] [GRAPHIC] [TIFF OMITTED] TR27NO24.201 [[Page 94326]] [GRAPHIC] [TIFF OMITTED] TR27NO24.202 BILLING CODE 4120-01-C

4. Device-Intensive ASC Covered Surgical Procedures

a. Background We refer readers to the CY 2019 OPPS/ASC final rule with comment period (83 FR 59040 through 59041), for a summary of our existing policies regarding ASC covered surgical procedures that are designated as device-intensive. b. CY 2025 Final Device Intensive Procedures In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59040 through 59043), for CY 2019, we modified our criteria for device- intensive procedures to better capture costs for procedures with significant device costs. We adopted a policy to allow procedures that involve surgically inserted or implanted, high-cost, single-use devices to qualify as device-intensive procedures. In addition, we modified our criteria to lower the device offset percentage threshold from 40 percent to 30 percent. The device offset percentage is the percentage of device costs within a procedure's total costs. Specifically, for CY 2019 and subsequent years, we adopted a policy that device-intensive procedures would be subject to the following criteria: All procedures must involve implantable or insertable 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. Corresponding to this change in the cost criterion, we adopted a policy that the default device offset for new codes that describe procedures that involve the implantation of medical devices will be 31 percent beginning in CY 2019. For new codes describing procedures that are payable when furnished in an ASC and involve the implantation of a medical device, we adopted a policy that the default device offset would be applied in the same manner as the policy we adopted in section IV.B.2 of the CY 2019 OPPS/ASC final rule with comment period (83 FR 58944 through 58948). We amended Sec. 416.171(b)(2) of the regulations to reflect these new device criteria. In addition, as also adopted in section IV.B.2 of the CY 2019 OPPS/ ASC final rule with comment period, to further align the device- intensive policy with the criteria used for device pass-through status, we specified, 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) [[Page 94327]] and has been classified as a Category B device by FDA in accordance with 42 CFR 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 any of the following: ++ Equipment, an instrument, apparatus, implement, or item of this 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). In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63773 through 63775), we modified our approach to assigning device-intensive status to surgical procedures under the ASC payment system. First, we adopted a policy of assigning device-intensive status to procedures that involve surgically inserted or implanted, high-cost, single-use devices if their device offset percentage exceeds 30 percent under the ASC standard ratesetting methodology, even if the procedure is not designated as device-intensive under the OPPS. Second, we adopted a policy that if a procedure is assigned device-intensive status under the OPPS, but has a device offset percentage below the device-intensive threshold under the standard ASC ratesetting methodology, the procedure will be assigned device-intensive status under the ASC payment system with a default device offset percentage of 31 percent. The policies were adopted to provide consistency between the OPPS and ASC payment system and provide a more appropriate payment rate for surgical procedures with significant device costs under the ASC payment system. In the CY 2023 OPPS/ASC final rule with comment period (87 FR 72078 through 72080), we finalized our policy to create certain C-codes, or ASC complexity adjustment codes that describe certain combinations of a primary covered surgical procedure as well as a packaged (payment indicator = ``N1'') procedure that are otherwise eligible for a complexity adjustment under the OPPS (as listed in Addendum J). Each ASC complexity adjustment code's APC assignment is based on its corresponding OPPS complexity adjustment code's APC assignment. In the CY 2023 OPPS/ASC final rule with comment period, we stated our belief that it would be appropriate for these ASC complexity adjustment codes to qualify for device-intensive status under the ASC payment system if the primary procedure of the code was also designated as device- intensive. Under our current policy, the ASC complexity adjustment code retains the device portion of the primary procedure (also called the ``device offset amount'') and not the device offset percentage. Therefore, for device-intensive ASC complexity adjustment codes, we set the device portion of the combined procedure equal to the device portion of the primary procedure and calculate the device offset percentage by dividing the device portion by the ASC complexity adjustment code's APC payment rate. Further, we apply our standard ASC payment system ratesetting methodology to the non-device portion of the ASC complexity adjustment code's APC payment rate; that is, we multiply the OPPS relative weight by the ASC budget neutrality adjustment and the ASC conversion factor and sum that amount with the device portion to calculate the ASC payment rate. As discussed in section IV.B of the CY 2025 OPPS/ASC proposed rule, the purpose of applying the default device offset percentage to new codes that describe procedures that implant or insert devices is to ensure access in the ASC setting for new procedures until claims data become available. Our ratesetting methodology sets the ASC device offset amount constant at the OPPS device offset amount. Device offset amounts under the OPPS and ASC Payment System are the device offset percentages of a procedure multiplied by the OPPS or ASC Payment System payment rate, respectively, for that procedure. While the ASC ratesetting methodology relies on the ASC conversion factor and the scaled OPPS APC relative weights to construct ASC payment rates, for device-intensive procedures, the device offset percentage of the procedure relies on the higher OPPS conversion factor while the non device portion relies on the lower ASC conversion factor. For non device-intensive procedures for which the payment is based on OPPS relative payment weight, one hundred percent of the procedure's payment rate relies on the ASC conversion factor. Therefore, the greater the device offset percentage under the ASC Payment System, the greater the ASC payment rate. Device offset percentages, which represent the device cost portion of a procedure's total cost, are determined using the most recent claims data for that procedure. For newer procedures that describe procedures which implant or insert single-use devices that meet our definition of a device and for which the device costs are estimated to be greater than 30 percent of the total procedure cost and lack claims data, we have relied on several policies to determine an appropriate device offset percentage until such claims data becomes available. First, if the new procedure has claims data from a predecessor code, as described by CPT coding guidance, we rely on claims data from the predecessor code in assigning the device offset percentage for the new HCPCS code (88 FR 81919 through 81922). Second, in limited instances where a new device-intensive procedure does not have a predecessor code as defined by CPT, but describes a procedure that was previously described by an existing code, we may 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 use the claims data of the clinically related or similar code(s) for purposes of determining whether to use the device offset percentage of the clinically related or similar code(s) or 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 device(s). If the new device-intensive procedure does not have claims data from a predecessor code or a clinically similar code that uses the same device, we have assigned a default device offset percentage of 31 percent. While we do allow for additional information in our consideration of a higher offset percentage than the default device offset, our payment policies under both the OPPS and ASC Payment System are meant to encourage efficiencies and promote savings to the Medicare program and we believe relying on claims data rather than external pricing data helps put downward pressure on changes in medical device prices. Therefore, it would be extremely rare that the appropriate determination of a device offset percentage would rely on pricing data or invoices from a device manufacturer rather than the default device offset percentage. However, we are aware that there may be certain situations where newer [[Page 94328]] device-intensive procedures lack claims data from a predecessor code and a clinically similar code that uses the same device, but the default device offset percentage would not adequately reflect the existing device portion of the procedure's costs when compared to the cost of similar devices. The difference in the default device portion and the potential device cost could possibly limit access to newer, more complex, device-intensive procedures in the ASC setting if the cost of the new device does indeed reflect a cost equivalent to that of the similar existing devices. As HOPDs and ASCs perform new procedures with significant device costs, we believe it is appropriate to modify our default device offset methodology to pay HOPDs and ASCs more appropriately when we lack claims data for these newer procedures. Therefore, we proposed to modify our default device offset percentage for new device-intensive procedures. Specifically, for all new covered surgical HCPCS codes that describe procedures which implant or insert single-use devices that meet our definition of a device and for which the device costs are estimated to be greater than 30 percent of the total procedure cost and lack claims data, we would apply a default device offset percentage that is the greater of: 31 percent or the device offset percentage of the APC to which the procedure has been assigned. We proposed this methodological change for both the OPPS and ASC Payment System for CY 2025 and subsequent calendar years. We still believe that a HCPCS code-level device offset is, in most cases, a more accurate representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all the procedures assigned to an APC. However, because newer device- intensive procedures lack claims data and therefore a HCPCS code-level device offset may not be possible, we believe the APC-wide average device offset percentage is, in most cases, a better reflection of the estimated device costs of the procedure than a default 31 percent offset. Additionally, there can be instances where the typical device costs of procedures in an APC can be significantly greater than the 31 percent default device offset. For these reasons, we propose to modify our methodology for determining the device offset percentage for new procedures that describe the implantation or insertion of a single-use device that meet our definition of a device and for which the device cost is projected to be greater than 30 percent of the total procedure cost that do not yet have associated claims data to apply a device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. The proposal would apply to new device-intensive procedures assigned to clinical APCs and would not apply to new procedures assigned to New Technology APCs. Under our proposal, we would continue to first rely on the associated claims data for the new HCPCS code or any predecessor code, as described by CPT coding guidance, for the new HCPCS code. If there is no claims data from the new HCPCS or any predecessor code, we may continue to 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 a device offset percentage 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. For new device-intensive procedures that describe the implantation or insertion of a single-use device that meet our definition of a device and for which the device cost is significant, projected to be greater than 30 percent of the total procedure cost, and lack claims data, we would then rely on our proposed device offset policy and apply the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. We solicited comments on our proposed changes to our default device offset policy for CY 2025 and subsequent calendar years under the OPPS and ASC payment system. The listing of proposed payment indicators for covered surgical procedures as well as their respective proposed device offset percentages and device offset amounts, which incorporates our proposed changes to the default device offset policy, can be found in Addendum FF to the proposed rule (which is available via the internet on the CMS website). Comment: Commenters strongly supported our proposed change to our default device offset policy for CY 2025 and subsequent years under the ASC payment system. Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal without modification to apply the greater of the APC-wide device offset percentage or 31 percent for new HCPCS codes that do not have claims data or any predecessor code as described by CPT coding guidance. Comment: Many commenters recommended that we assign device- intensive status to 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) and CPT codes 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) and 30469 (Repair of nasal valve collapse with low energy, temperature-controlled (i.e., radiofrequency) subcutaneous/submucosal remodeling) under the ASC payment system. The commenters argued that the proposed ASC payment rate would not adequately reimburse for the cost of the devices that are used during the procedures. Response: As we discussed in section IV.B. of this final rule with comment period, out of concern for hospital nonreporting of device costs for procedures that require devices, we are finalizing a modification to our device edits policy which reinstates device edits for device-intensive procedures created on or after January 1, 2017. Additionally, such device edits will be permanent and will apply regardless of the procedure's device offset percentage. In conjunction with the modification to our device edits policy for CY 2025, for determining device offset percentages for procedures subject to our device edits policy for CY 2025 that cannot bypass such edit by reporting modifier ``CG'', we are relying only on claims from hospitals that reported a device code for determining device offset percentages under the OPPS and ASC payment systems. Based on our revised methodology for this CY 2025 OPPS/ASC final rule with comment period, the device offset percentages for HCPCS code C9757 and CPT codes 30469 and 52284 exceed our device-intensive threshold. Therefore, we are assigning such procedures device-intensive status under the ASC payment system for CY 2025. Comment: One commenter recommended that we assign device-intensive status to CPT codes 0686T [[Page 94329]] (Histotripsy (ie, non-thermal ablation via acoustic energy delivery) of malignant hepatocellular tissue, including image guidance) and 0888T (Histotripsy (ie, non-thermal ablation via acoustic energy delivery) of malignant renal tissue, including imaging guidance). While the commenter states the procedure is not invasive, the commenter argues the procedure does require a disposable product. Response: We are not accepting this recommendation as this procedure does not meet our requirements for a device-intensive assignment. As previously discussed, among other requirements, a device-intensive procedure must involve a device that is surgically implanted or inserted (either permanently or temporarily). Comment: One commenter recommended that we assign CPT code 58356 (Endometrial cryoablation with ultrasonic guidance, including endometrial curettage, when performed) device-intensive status, or, at the least, to revise the payment indicator to ``A2''--Surgical procedure on ASC list in CY 2007; payment based on OPPS relative payment weight. Response: We are not accepting this recommendation. CPT code 58356 does not have a device offset percentage that exceeds our device- intensive threshold. Additionally, CPT code 58356 has been designated as permanently office-based surgical procedure since CY 2010. Comment: One commenter recommended that we use device cost data from CPT code 64590 (Insertion or replacement of peripheral, sacral, or gastric neurostimulator pulse generator or receiver, requiring pocket creation and connection between electrode array and pulse generator or receiver) to determine the device offset percentage for CPT code 0786T (Insertion or replacement of percutaneous electrode array, sacral, with integrated neurostimulator, including imaging guidance, when performed). The commenter argues the predecessor code for 0786T is CPT code 64590. Response: After further review of the CPT coding guidance associated with the neurostimulator codes that were created for CY 2024, we believe applicable predecessor codes for CPT code 0786T could include both CPT code 64590 and CPT code 64561 (Percutaneous implantation of neurostimulator electrode array; sacral nerve (transforaminal placement) including image guidance, if performed). However, as discussed in section III.E of this final rule with comment period, we inadvertently listed the integrated sacral nerve stimulation system associated with CPT code 0786T as receiving FDA-approval. However, it is still pending FDA approval and therefore, we are finalizing an OPPS status indicator of ``E1'' until FDA approval has been received. Therefore, for the ASC payment system, we are not accepting the commenter's recommendation and we are finalizing a payment indicator of ``Y5''--``Nonsurgical procedure/item not valid for Medicare purposes because of coverage, regulation and/or statute; no payment made'' for CY 2025. Comment: One commenter recommended that we use the device cost data from HCPCS code C9769 (Cystourethroscopy, with insertion of temporary prostatic implant/stent with fixation/anchor and incisional struts) to determine the device offset percentage for CPT code 53865 (Cystourethroscopy with insertion of temporary device for ischemic remodeling (ie, pressure necrosis) of bladder neck and prostate) (placeholder CPT code 5XX05). The commenter argues the predecessor code for CPT code 53865 is HCPCS code C9769. Response: After further review of the CPT coding guidance associated with newly created CPT code 53865, we agree that the predecessor code for CPT code 53865 includes HCPCS code C9769 as well as unlisted procedures. Therefore, we are accepting the commenter's recommendation and assigning a device offset percentage for CPT code 53865 based on its predecessor code HCPCS code C9769. Comment: One commenter supported the device offset percentage for 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) while another commenter recommended that we not reduce the device offset percentage from 64.4% to 61.5% under the ASC payment system. Response: We appreciate the commenters' feedback and are relying on available claims data for this final rule with comment period in our determination of device-intensive status and device offset percentages under the ASC payment system. For final CY 2025 device offset percentages based on claims data for this final rule with comment period, we refer readers to Addendum FF of this final rule with comment period. Comment: One commenter recommended we reevaluate the device portion and device-intensive status for the following CPT codes: 36563 (Insertion of tunneled centrally inserted central venous access device with subcutaneous pump); 36568 (Insertion of peripherally inserted central venous catheter (picc), without subcutaneous port or pump, without imaging guidance; younger than 5 years of age); 36570 (Insertion of peripherally inserted central venous access device, with subcutaneous port; younger than 5 years of age); 36578 (Replacement, catheter only, of central venous access device, with subcutaneous port or pump, central or peripheral insertion site); and 36595 (Mechanical removal of pericatheter obstructive material (e.g, fibrin sheath) from central venous device via separate venous access). The commenter expressed their concerned with the magnitude of the payment reduction with CPT code 36595, a permanently office-based surgical procedure, experiencing a proposed 78.3 percent reduction from CY 2024 as a result of losing device-intensive status and a proposed payment rate based on the proposed CY 2025 PFS rate. Response: Based on claims data available for this final rule with comment period, CPT codes 36563, 36568, 36570, and 36595 do not have device offset percentages that exceed the device-intensive threshold of greater than 30 percent. Therefore, we are not assigning device- intensive status to these procedures for CY 2025. However, the device offset percentage for CPT code 36578 exceeds our device-intensive threshold of 30 percent. Therefore, we are maintaining the CY 2024 device-intensive designation of CPT code 36578 for CY 2025. Regarding the proposed payment rate for CPT code 36595, we believe the stakeholder brings up an important issue regarding the volatility in our payment rates for surgical procedures that are permanently designated as office-based but contain device costs that fluctuate above and below our threshold for device-intensive status. In previous rulemaking, we have stated that office-based surgical procedures that meet our requirements for device-intensive status will be assigned device-intensive status rather than office-based status for the applicable calendar year. However, since this procedure has been assigned office-based status and, based on the most recent claims data available, does not have significant device costs, we believe reassigning the procedure its office-based status for CY 2025 is appropriate. While we believe the number of office-based procedures that may gain or lose device-intensive status [[Page 94330]] each year is very low, we will monitor payment fluctuations for these procedures going forward and may address these concerns in future rulemaking. Comment: Many commenters supported the proposed device offset percentages for the following procedures: 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); CPT code 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); CPT code 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); CPT code 31242 (Nasal/sinus endoscopy, surgical; with destruction by radiofrequency ablation, posterior nasal nerve); CPT code 31298 (Nasal/sinus endoscopy, surgical, with dilation (e.g., balloon dilation); frontal and sphenoid sinus ostia); CPT code 66174 (Transluminal dilation of aqueous outflow canal (e.g., canaloplasty); without retention of device or stent); CPT code 66989 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more); and CPT code 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). Response: We appreciate the commenters' support of the proposed device offset percentages. For these CPT codes, we are finalizing device offset percentages based on claims data available for this final rule with comment period. CPT codes that were designated as device- intensive based on claims data available for the proposed rule may or may not be designated as device-intensive based on claims data available for this final rule with comment period. For final CY 2025 device offset percentages based on claims data for this final rule with comment period, we refer readers to Addendum FF of this final rule with comment period. c. Adjustment to ASC Payments for No Cost/Full Credit and Partial Credit Devices Our ASC payment policy for costly devices implanted or inserted in ASCs at no cost/full credit or partial credit is set forth in Sec. 416.179 of our regulations and is consistent with the OPPS policy that was in effect until CY 2014. We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66845 through 66848) for a full discussion of the ASC payment adjustment policy for no cost/full credit and partial credit devices. ASC payment is reduced by 100 percent of the device offset amount when a hospital furnishes a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital receives partial credit in the amount of 50 percent or more of the cost for the specified device. Effective CY 2014, under the OPPS, we finalized our proposal to reduce OPPS payment for applicable APCs by the full or partial credit a provider receives for a device, capped at the device offset amount. Although we finalized our proposal to modify the policy of reducing payments when a hospital furnishes a specified device without cost or with full or partial credit under the OPPS, in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75076 through 75080), we finalized our proposal to maintain our ASC policy for reducing payments to ASCs for specified device-intensive procedures when the ASC furnishes a device without cost or with full or partial credit. Unlike the OPPS, there is currently no mechanism within the ASC claims processing system for ASCs to submit to CMS the amount of the actual credit received when furnishing a specified device at full or partial credit. Therefore, under the ASC payment system, we finalized our proposal for CY 2014 to continue to reduce ASC payments by 100 percent or 50 percent of the device offset amount when an ASC furnishes a device without cost or with full or partial credit, respectively. Under current ASC policy, all ASC device-intensive covered surgical procedures are subject to the no cost/full credit and partial credit device adjustment policy. Specifically, when a device-intensive procedure is performed to implant or insert a device that is furnished at no cost or with full credit from the manufacturer, the ASC appends the HCPCS ``FB'' modifier on the line in the claim with the procedure to implant or insert the device. The contractor reduces payment to the ASC by the device offset amount that we estimate represents the cost of the device when the necessary device is furnished without cost or with full credit to the ASC. We continue to believe that the reduction of ASC payment in these circumstances is necessary to pay appropriately for the covered surgical procedure furnished by the ASC. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043 through 59044) we adopted a policy to reduce the payment for a device- intensive procedure for which the ASC receives partial credit by one- half of the device offset amount that would be applied if a device was provided at no cost or with full credit if the credit to the ASC is 50 percent or more (but less than 100 percent) of the cost of the new device. The ASC will append the HCPCS ``FC'' modifier to the HCPCS code for the device-intensive surgical procedure when the facility receives a partial credit of 50 percent or more (but less than 100 percent) of the cost of a device. To report that the ASC received a partial credit of 50 percent or more (but less than 100 percent) of the cost of a new device, ASCs have the option of either: (1) submitting the claim for the device-intensive procedure to their Medicare contractor after the procedure's performance, but prior to manufacturer acknowledgment of credit for the device, and subsequently contacting the contractor regarding a claim adjustment, once the credit determination is made; or (2) holding the claim for the device implantation or insertion procedure until a determination is made by the manufacturer on the partial credit and submitting the claim with the ``FC'' modifier appended to the implantation procedure HCPCS code if the partial [[Page 94331]] credit is 50 percent or more (but less than 100 percent) of the cost of the device. Beneficiary coinsurance would be based on the reduced payment amount. As finalized in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66926), to ensure our policy covers any situation involving a device-intensive procedure where an ASC may receive a device at no cost or receive full credit or partial credit for the device, we apply our ``FB''/``FC'' modifier policy to all device- intensive procedures. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043 through 59044) we stated we would reduce the payment for a device- intensive procedure for which the ASC receives partial credit by one- half of the device offset amount that would be applied if a device was provided at no cost or with full credit, if the credit to the ASC is 50 percent or more (but less than 100 percent) of the cost of the device. In the CY 2020 OPPS/ASC final rule with comment period, we finalized continuing our existing policies for CY 2020. We note that we inadvertently omitted language that this policy would apply not just in CY 2019 but also in subsequent calendar years. We intended to apply this policy in CY 2019 and subsequent calendar years. Therefore, we finalized our proposal to apply our policy for partial credits specified in the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043 through 59044) in CY 2022 and subsequent calendar years (86 FR 63775 through 63776). Specifically, for CY 2022 and subsequent calendar years, we would reduce the payment for a device-intensive procedure for which the ASC receives partial credit by one-half of the device offset amount that would be applied if a device was provided at no cost or with full credit, if the credit to the ASC is 50 percent or more (but less than 100 percent) of the cost of the device. To report that the ASC received a partial credit of 50 percent or more (but less than 100 percent) of the cost of a device, ASCs have the option of either: (1) submitting the claim for the device intensive procedure to their Medicare contractor after the procedure's performance, but prior to manufacturer acknowledgment of credit for the device, and subsequently contacting the contractor regarding a claim adjustment, once the credit determination is made; or (2) holding the claim for the device implantation or insertion procedure until a determination is made by the manufacturer on the partial credit and submitting the claim with the ``FC'' modifier appended to the implantation procedure HCPCS code if the partial credit is 50 percent or more (but less than 100 percent) of the cost of the device. Beneficiary coinsurance would be based on the reduced payment amount. We did not receive any comments on our policies related to no cost/ full credit or partial credit devices, and we are finalizing the continuation of our existing policies for CY 2025 without modification.

5. Requirement in the Physician Fee Schedule CY 2025 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 re-designate 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 2025 PFS proposed rule included proposals related to the discarded drug refund policy, including proposals that may impact hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs). Similar to our CY 2023 and CY 2024 notice in the OPPS/ASC proposed rules (87 FR 71988 and 88 FR 49760), we included a notice in the CY 2025 proposed rule (89 FR 59421) to ensure interested parties were aware of these proposals and knew to refer to the CY 2025 Physician Fee Schedule proposed rule for a full description of the proposed policy. Interested parties were asked to submit comments on any proposals to implement section 90004 of the Infrastructure Act to the CY 2025 PFS proposed rule. We stated that public comments on these proposals would be addressed in the CY 2025 PFS final rule with comment period. We note that this same notice appeared in section V.B.6 of the CY 2025 OPPS/ASC proposed rule (89 FR 59370). Please see a full description of the finalized policy in section V.B.6 of this CY 2025 OPPS/ASC final rule with comment period.

1. Additions to the List of ASC Covered Surgical Procedures

Section 1833(i)(1) of the Act requires us, in part, to specify, in consultation with appropriate medical organizations, surgical procedures that are appropriately performed on an inpatient basis in a hospital but that can also be safely performed in an ASC, a CAH, or an HOPD, and to review and update the list of ASC covered surgical procedures at least every 2 years. We evaluate the ASC covered procedures list (ASC CPL) each year to determine whether procedures should be added to or removed from the list, and changes to the list are often made in response to specific concerns raised by stakeholders. Under our regulations at Sec. Sec. 416.2 and 416.166, covered surgical procedures furnished on or after January 1, 2022, are surgical procedures that meet the general standards specified in Sec. 416.166(b) and are not excluded under the general exclusion criteria specified in Sec. 416.166(c). Specifically, under Sec. 416.166(b), the general standards provide that covered surgical procedures are surgical procedures specified by the Secretary and published in the Federal Register and/or via the internet on the CMS website that are separately paid under the OPPS, that would not be expected to pose a significant safety risk to a Medicare beneficiary when performed in an ASC, and for which standard medical practice dictates that the beneficiary would not typically be expected to require active medical monitoring and care at midnight following the procedure. Section 416.166(c) sets out the general exclusion criteria used under the ASC payment system to evaluate the safety of procedures for performance in an ASC. The general exclusion criteria provide that covered surgical procedures do not include those surgical procedures that: (1) generally result in extensive blood loss; (2) require major or prolonged invasion of body cavities; (3) directly involve major blood vessels; (4) are generally emergent or life-threatening in nature; (5) commonly require systemic thrombolytic therapy; (6) are designated as requiring inpatient care under Sec. 419.22(n); (7) can only be reported using a CPT unlisted surgical procedure code; or (8) are otherwise excluded under Sec. 411.15. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59029 through 59030), we defined a surgical procedure under the ASC payment system as any procedure described within the range of Category I CPT codes that the CPT Editorial Panel of the AMA defines as ``surgery'' (CPT codes 10000 through 69999) (72 FR 42476), as well as procedures that are described by Level II HCPCS codes or by Category I CPT codes or by Category III CPT codes that directly crosswalk or are clinically [[Page 94332]] similar to procedures in the CPT surgical range that we determined met the general standards established in previous years for addition to the ASC CPL. In the CY 2024 OPPS/ASC final rule with comment period, we finalized adding several dental surgical procedures to the ASC CPL that met our regulatory criteria at Sec. Sec. 416.166. We noted that there are statutory and regulatory limitations regarding Medicare coverage and payment for dental services. Section 1862(a)(12) of the Act generally precludes Medicare Part A or Part B payment for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth (collectively referred to in this section as ``dental services''). The regulation at Sec. 411.15(i) similarly prohibits payment for dental services. In the CY 2023 PFS final rule (87 FR 69663), we explained that there are certain instances where dental services are so integral to other medically necessary services that they are not in connection with dental services within the meaning of section 1862(a)(12) of the Act. Rather, such dental services are inextricably linked to, and substantially related to the clinical success of, other covered services (hereafter in this section, ``inextricably linked''). To provide greater clarity to current policies, the CY 2023 PFS final rule 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 other covered services; (2) clarification and codification of certain longstanding Medicare FFS payment policies for dental services that are inextricably linked to other covered 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; and, (4) beginning for CY 2024, that Medicare Parts A and B payment can be made for certain dental services inextricably linked to Medicare-covered services for treatment of head and neck cancers (87 FR 69670 through 69671). For the ASC setting, services must meet all applicable Medicare conditions for coverage and payment to be paid by Medicare, including those as specified under the CY 2023 PFS final rule (87 FR 69687 through 69688) and Sec. 411.15(i)(3). Medicare payment may be made in the ASC setting for dental services for which payment may be made under Medicare Part B, paid under the OPPS, and that meet the ASC CPL criteria. The fact that a drug, device, procedure, or service is assigned a HCPCS code and a payment rate under the ASC payment system indicates only how the product, procedure, or service may be paid if covered by the program. MACs will be involved in the final decision regarding whether a drug, device, procedure, or other service meets all program requirements and conditions for coverage and payment. Therefore, even if a code describing a dental service has an associated payment rate on the ASC CPL, Medicare will only make payment for the service if it meets applicable requirements. We also clarify that adding dental procedures to the ASC CPL does not serve as a coverage determination for dental services under general anesthesia. We direct readers to the CY 2025 PFS proposed rule for additional discussion of Medicare coverage and payment for dental services. For a detailed discussion of the history of our policies for adding surgical procedures to the ASC CPL, we refer readers to the CY 2021 through CY 2024 OPPS/ASC final rules with comment period (85 FR 86143 through 86145; 86 FR 63777 through 63805; 87 FR 72068 through 72076; and 88 FR 81923 through 81945).

2. Final Changes to the List of ASC Covered Surgical Procedures for CY

2025 Our current policy, which includes consideration of the general standards and exclusion criteria we have historically used to determine whether a surgical procedure should be added to the ASC CPL, is intended to ensure that surgical procedures added to the ASC CPL can be performed safely in the ASC setting on the typical Medicare beneficiary. As part of our evaluation process to add procedures to the CPL, we assess potential procedures against the specific list of ASC CPL criteria at Sec. 416.166. We also examine clinical data on these procedures from multiple sites of services, review literature and experiential data, and analyze claims data trends to ensure that these procedures meet all our criteria and are not expected to pose a significant risk to beneficiary safety when performed in an ASC. For CY 2025, we also reviewed supporting evidence received in the pre-proposed rule nominations process to inform our procedure evaluations. Based upon this review, we proposed to update the ASC CPL by adding 20 medical and dental surgical procedures to the list for CY 2025. After reviewing the clinical characteristics of these twenty procedures and consulting with stakeholders and multiple clinical advisors, we determined that these procedures are separately paid under the OPPS, would not be expected to pose a significant risk to beneficiary safety when performed in an ASC, and would not be expected to require active medical monitoring and care of the beneficiary at midnight following the procedure. These procedures are surgical or surgery-like, clinically similar to procedures in the CPT surgical range that we determined met the general standards for addition to the ASC CPL. These procedures are not excluded from being included on the ASC CPL because they do not generally result in extensive blood loss, require major or prolonged invasion of body cavities, commonly require systemic thrombolytic therapy, or directly involve major blood vessels; are not generally emergent or life-threatening in nature or designated as requiring inpatient care; or can only be reported using a CPT unlisted surgical procedure code or are otherwise excluded under Medicare. Therefore, we believed these procedures may all be appropriately performed in an ASC and proposed to include them on the ASC CPL for CY 2025. We continue to focus on maximizing patient access to care by adding procedures to the ASC CPL when appropriate. While expanding the ASC CPL offers benefits, such as preserving the capacity of hospitals to treat more acute patients and promoting site neutrality, we also believe that any additions to the CPL should be added in a carefully calibrated fashion to ensure that the procedure is safe to be performed in the ASC setting. We encourage interested parties to submit procedure recommendations to be added to the ASC CPL, particularly if there is evidence that these procedures meet our criteria and can be safely performed in the ASC setting. We expect to continue to gradually expand the ASC CPL, as medical practice and technology continue to evolve and advance in future years. Comment: Multiple commenters supported the proposed addition of 20 procedures, including 16 dental procedures, to the ASC CPL for CY 2025. Response: We thank the commenters for their support. Comment: A few commenters provided feedback on different approaches for CMS to consider when approaching the ASC CPL. These commenters felt there was a lack of transparency in the pre-proposed rule recommendation process and requested [[Page 94333]] that CMS provide the full list of recommended procedures and rationales for all procedures recommended by the public, even if CMS did not propose to add those procedures to the ASC CPL. Additionally, one commenter requested greater clarification on the definition of the ``typical Medicare beneficiary.'' Response: We thank the commenters for their input and will consider it for future rulemaking. As part of our evaluation process, we assess recommended procedures against the specific list of ASC CPL criteria at 42 CFR 416.166, examining clinical data on these procedures from multiple sites of services, reviewing the literature and experiential data provided in public comments, and examining claims volume to ensure that procedures are not expected to pose a significant risk to beneficiary safety when performed in an ASC. While we have not historically published pre-proposed rule recommendations for which we did not propose any changes, we do address and publish a list of all codes that are recommended during the public comment period in the OPPS/ASC final rule. Additionally, in the CY 2022 OPPS/ASC final rule, we provided additional context on the typical Medicare beneficiary, whose health status is representative of the broader Medicare population, and we believe this information is sufficient to understand the typical Medicare beneficiary terminology without additional clarification at this time (86 FR 63777-63779). Comment: One commenter requested that CMS not finalize its proposal to add two leadless pacemaker procedures, CPT codes 0795T (Transcatheter insertion of permanent dual-chamber leadless pacemaker, including imaging guidance (e.g., fluoroscopy, venous ultrasound, right atrial angiography, right ventriculography, femoral venography) and device evaluation (e.g., interrogation or programming), when performed; complete system (i.e., right atrial and right ventricular pacemaker components)) and 0801T (Transcatheter removal and replacement of permanent dual-chamber leadless pacemaker, including imaging guidance (e.g., fluoroscopy, venous ultrasound, right atrial angiography, right ventriculography, femoral venography) and device evaluation (e.g., interrogation or programming), when performed; dual-chamber system (i.e., right atrial and right ventricular pacemaker components)), citing previous CMS guidance that excludes contractors from paying claims for leadless pacemakers when the service is provided in the ASC setting. Response: We thank the commenter for their feedback. As of January 18, 2017, CMS covers leadless pacemakers through Coverage with Evidence Development (CED) when procedures are performed in CMS-approved CED studies and are provided in one of the following places of service: Indian Health Service Provider Based Facility, Inpatient Hospital, On Campus-Outpatient Hospital, and Military Treatment Facility (Medicare Claims Processing Manual (Pub. L. 100-04), Chapter 32, Section 380.1.1). We agree with the commenter that ASCs are excluded from payment for leadless pacemaker procedures under this policy, therefore, we are not finalizing our proposal to add CPT codes 0795T and 0801T to the ASC CPL. Comment: Most commenters on this policy recommended specific codes to be added to the ASC CPL including arthrodesis, cardiac ablations, echocardiography, electrophysiological studies, vascular injections, and electroconvulsive therapy. We received 74 procedure recommendations for the CPL, listed in Table 155, below. Response: We thank commenters for their recommendations. We individually assessed each of the recommended procedures, evaluating clinical data on these procedures from multiple sites of service, reviewing the literature and experiential data provided in public comments, and examining claims volume to determine whether these procedures meet each of the regulatory criteria at 42 CFR 416.166. Based on our review of the clinical characteristics of the procedures and their similarity to other procedures that are currently on the ASC CPL, we believe that 3 procedures (CDT codes D7320, D7321, and D7471) out of the 74 procedure recommendations we received can be safely performed in the ASC setting and meet the general standards and exclusion criteria for the ASC CPL as set forth in 42 CFR 416.166(b) and (c), respectively. We agree with the commenter who provided support and evidence stating that these procedures can be safely performed in an ASC setting. We will continue to monitor clinical data on these services in the ASC setting and address any new trends in future rulemaking. These procedures, listed in Table 155 below, are: D7320 (Alveoloplasty not in conjunction with extractions-- four or more teeth or tooth spaces, per quadrant). D7321 (Alveoloplasty not in conjunction with extractions-- one to three teeth or tooth spaces, per quadrant). D7471 (Removal of lateral exostosis (maxilla or mandible)). Below, we explain our rationale for not including the 71 recommended procedures, organized by category. 1 anesthesia code for total knee arthroplasty. Payment for anesthesia services is packaged into the ASC payment for covered surgical procedures.