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Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs

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Start Preamble Start Printed Page 52356

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Final rule with comment period.

SUMMARY:

This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2018 to implement changes arising from our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.

DATES:

Effective date: This final rule with comment period is effective on January 1, 2018, unless otherwise noted.

Comment period: To be assured consideration, comments on the payment classifications assigned to HCPCS codes identified in Addenda B, AA, and BB with the comment indicator “NI” and on other areas specified throughout this final rule with comment period must be received at one of the addresses provided in the ADDRESSES section no later than 5 p.m. EST on December 31, 2017.

ADDRESSES:

In commenting, please refer to file code CMS-1678-FC when commenting on the issues in this proposed rule. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (no duplicates, please):

1. Electronically. You may (and we encourage you to) submit electronic comments on this regulation to http://www.regulations.gov. Follow the instructions under the “submit a comment” tab.

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

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1678-FC, P.O. Box 8013, Baltimore, MD 21244-1850.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1678-FC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:

a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, please call the telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

(We note that public comments must be submitted through one of the four channels outlined in the ADDRESSES section above. Comments may not be submitted via email.)

Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at APCPanel@cms.hhs.gov.

Ambulatory Surgical Center (ASC) Payment System, contact Elisabeth Daniel via email Elisabeth.Daniel1@cms.hhs.gov or at 410-786-0237.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email Anita.Bhatia@cms.hhs.gov or at 410-786-7236.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Vinitha Meyyur via email Vinitha.Meyyur@cms.hhs.gov or at 410-786-8819.

Blood and Blood Products, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov at 410-786-9732.

Cancer Hospital Payments, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov or at 410-786-4142.

Care Management Services, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov or at 410-786-4142.

CPT Codes, contact Marjorie Baldo via email Marjorie.Baldo@cms.hhs.gov or at 410-786-4617.

CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email Chuck.Braver@cms.hhs.gov or at 410-786-6719.

Composite APCs (Low Dose Brachytherapy and Multiple Imaging), contact Twi Jackson via email Twi.Jackson@cms.hhs.gov or at 410-786-1159.

Comprehensive APCs (C-APCs), contact Lela Strong via email Lela.Strong@cms.hhs.gov or at 410-786-3213.

Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email Anita.Bhatia@cms.hhs.gov or at 410-786-7236.

Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Vinitha Meyyur via email Vinitha.Meyyur@cms.hhs.gov or at 410-786-8819.

Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Twi Jackson via email Twi.Jackson@cms.hhs.gov or at 410-786-1159.

Inpatient Only (IPO) Procedures List, contact Lela Strong via email Lela.Strong@cms.hhs.gov or at 410-786-3213.

New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email Scott.Talaga@cms.hhs.gov or at 410-786-4142.

No Cost/Full Credit and Partial Credit Devices, contact Twi Jackson via email Twi.Jackson@cms.hhs.gov or at 410-786-1159.

OPPS Brachytherapy, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov or at 410-786-4142.

OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact Erick Chuang via email Erick.Chuang@cms.hhs.gov or at 410-786-1816 or Elisabeth Daniel via email Elisabeth.Daniel1@cms.hhs.gov or at 410-786-0237.Start Printed Page 52357

OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Elisabeth Daniel via email Elisabeth.Daniel1@cms.hhs.gov or at 410-786-0237.

OPPS New Technology Procedures/Services, contact the New Technology APC email at NewTechAPCapplications@cms.hhs.gov.

OPPS Exceptions to the 2 Times Rule, contact Marjorie Baldo via email Marjorie.Baldo@cms.hhs.gov or at 410-786-4617.

OPPS Packaged Items/Services, contact Elisabeth Daniel via email Elisabeth.Daniel1@cms.hhs.gov or at 410-786-0237.

OPPS Pass-Through Devices, contact the Device Pass-Through email at DevicePTapplications@cms.hhs.gov.

OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email Marina.Kushnirova@cms.hhs.gov or at 410-786-2682.

Partial Hospitalization Program (PHP) and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at PHPPaymentPolicy@cms.hhs.gov.

Revisions to the Laboratory Date of Service Policy, contact Craig Dobyski via email Craig.Dobyski@cms.hhs.gov or at 410-786-4584 or Rasheeda Johnson via email Rasheeda.Johnson1@cms.hhs.gov or at 410-786-3434 or Marjorie Baldo (for OPPS) via email Marjorie.Baldo@cms.hhs.gov or at 410-786-4617.

Rural Hospital Payments, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov or at 410-786-9732.

Skin Substitutes, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov or at 410-786-9732.

All Other Issues Related to Hospital Outpatient and Ambulatory Surgical Center Payments Not Previously Identified, contact Lela Strong via email Lela.Strong@cms.hhs.gov or at 410-786-3213.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov/​. Follow the search instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection, generally beginning approximately 3 weeks after publication of the rule, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday through Friday of each week from 8:30 a.m. to 4 p.m. EST. To schedule an appointment to view public comments, phone 1-800-743-3951.

Electronic Access

This Federal Register document is also available from the Federal Register online database through Federal Digital System (FDsys), a service of the U.S. Government Printing Office. This database can be accessed via the Internet at https://www.gpo.gov/​fdsys/​.

Addenda Available Only Through the Internet on the CMS Web Site

In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in the Federal Register as part of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC proposed rule, all of the Addenda no longer appear in the Federal Register as part of the annual OPPS/ASC proposed and final rules to decrease administrative burden and reduce costs associated with publishing lengthy tables. Instead, these Addenda are published and available only on the CMS Web site. The Addenda relating to the OPPS are available at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. The Addenda relating to the ASC payment system are available at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

Alphabetical List of Acronyms Appearing in This Federal Register Document

AHA American Hospital Association

AMA American Medical Association

AMI Acute myocardial infarction

APC Ambulatory Payment Classification

API Application programming interface

APU Annual payment update

ASC Ambulatory surgical center

ASCQR Ambulatory Surgical Center Quality Reporting

ASP Average sales price

AUC Appropriate use criteria

AWP Average wholesale price

BBA Balanced Budget Act of 1997, Public Law 105-33

BBRA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Public Law 106-113

BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, Public Law 106-554

BLS Bureau of Labor Statistics

CAH Critical access hospital

CAHPS Consumer Assessment of Healthcare Providers and Systems

CAP Competitive Acquisition Program

C-APC Comprehensive Ambulatory Payment Classification

CASPER Certification and Survey Provider Enhanced Reporting

CAUTI Catheter-associated urinary tract infection

CBSA Core-Based Statistical Area

CCM Chronic care management

CCN CMS Certification Number

CCR Cost-to-charge ratio

CDC Centers for Disease Control and Prevention

CED Coverage with Evidence Development

CERT Comprehensive Error Rate Testing

CFR Code of Federal Regulations

CI Comment indicator

CLABSI Central Line [Catheter] Associated Blood Stream Infection

CLFS Clinical Laboratory Fee Schedule

CMHC Community mental health center

CMS Centers for Medicare & Medicaid Services

CoP Condition of participation

CPI-U Consumer Price Index for All Urban Consumers

CPT Current Procedural Terminology (copyrighted by the American Medical Association)

CR Change request

CRC Colorectal cancer

CSAC Consensus Standards Approval Committee

CT Computed tomography

CV Coefficient of variation

CY Calendar year

DFO Designated Federal Official

DME Durable medical equipment

DMEPOS Durable Medical Equipment, Prosthetic, Orthotics, and Supplies

DOS Date of service

DRA Deficit Reduction Act of 2005, Public Law 109-171

DSH Disproportionate share hospital

EACH Essential access community hospital

EAM Extended assessment and management

ECD Expanded criteria donor

EBRT External beam radiotherapy

ECG Electrocardiogram

ED Emergency department

EDTC Emergency department transfer communication

EHR Electronic health record

E/M Evaluation and management

ESRD End-stage renal disease

ESRDQIP End-Stage Renal Disease Quality Improvement Program

FACA Federal Advisory Committee Act, Public Law 92-463

FDA Food and Drug Administration

FFS [Medicare] Fee-for-service

FY Fiscal year

GAO Government Accountability Office

GI Gastrointestinal

GME Graduate medical education

HAI Healthcare-associated infection

HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems

HCERA Health Care and Education Reconciliation Act of 2010, Public Law 111-152

HCP Health care personnel

HCPCS Healthcare Common Procedure Coding System

HCRIS Healthcare Cost Report Information System

HCUP Healthcare Cost and Utilization Project

HEU Highly enriched uranium

HHQRP Home Health Quality Reporting ProgramStart Printed Page 52358

HHS Department of Health and Human Services

HIE Health information exchange

HIPAA Health Insurance Portability and Accountability Act of 1996, Public Law 104-191

HOP Hospital Outpatient Payment [Panel]

HOPD Hospital outpatient department

HOPQDRP Hospital Outpatient Quality Data Reporting Program

HPMS Health Plan Management System

IBD Inflammatory bowel disease

ICC Interclass correlation coefficient

ICD Implantable cardioverter defibrillator

ICD-9-CM International Classification of Diseases, Ninth Revision, Clinical Modification

ICD-10 International Classification of Diseases, Tenth Revision

ICH In-center hemodialysis

ICR Information collection requirement

IDTF Independent diagnostic testing facility

IGI IHS Global, Inc.

IHS Indian Health Service

I/OCE Integrated Outpatient Code Editor

IOL Intraocular lens

IORT Intraoperative radiation treatment

IPFQR Inpatient Psychiatric Facility Quality Reporting

IPPS [Hospital] Inpatient Prospective Payment System

IQR [Hospital] Inpatient Quality Reporting

IRF Inpatient rehabilitation facility

IRFQRP Inpatient Rehabilitation Facility Quality Reporting Program

IT Information technology

LCD Local coverage determination

LDR Low dose rate

LTCH Long-term care hospital

LTCHQR Long-Term Care Hospital Quality Reporting

MAC Medicare Administrative Contractor

MACRA Medicare Access and CHIP Reauthorization Act of 2015, Public Law 114-10

MAP Measure Application Partnership

MDH Medicare-dependent, small rural hospital

MedPAC Medicare Payment Advisory Commission

MEG Magnetoencephalography

MFP Multifactor productivity

MGCRB Medicare Geographic Classification Review Board

MIEA-TRHCA Medicare Improvements and Extension Act under Division B, Title I of the Tax Relief Health Care Act of 2006, Public Law 109-432

MIPPA Medicare Improvements for Patients and Providers Act of 2008, Public Law 110-275

MLR Medical loss ratio

MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173

MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309

MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173

MPFS Medicare Physician Fee Schedule

MR Medical review

MRA Magnetic resonance angiography

MRgFUS Magnetic Resonance Image Guided Focused Ultrasound

MRI Magnetic resonance imaging

MRSA Methicillin-Resistant Staphylococcus Aureus

MS-DRG Medicare severity diagnosis-related group

MSIS Medicaid Statistical Information System

MUC Measure under consideration

NCCI National Correct Coding Initiative

NEMA National Electrical Manufacturers Association

NHSN National Healthcare Safety Network

NOTA National Organ and Transplantation Act

NOS Not otherwise specified

NPI National Provider Identifier

NQF National Quality Forum

NQS National Quality Strategy

NTIOL New technology intraocular lens

NUBC National Uniform Billing Committee

OACT [CMS] Office of the Actuary

OBRA Omnibus Budget Reconciliation Act of 1996, Public Law 99-509

O/E Observed to expected event

OIG [HHS] Office of the Inspector General

OMB Office of Management and Budget

ONC Office of the National Coordinator for Health Information Technology

OPD [Hospital] Outpatient Department

OPPS [Hospital] Outpatient Prospective Payment System

OPSF Outpatient Provider-Specific File

OQR [Hospital] Outpatient Quality Reporting

OT Occupational therapy

PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93

PCHQR PPS-Exempt Cancer Hospital Quality Reporting

PCR Payment-to-cost ratio

PDC Per day cost

PDE Prescription Drug Event

PE Practice expense

PHP Partial hospitalization program

PHSA Public Health Service Act, Public Law 96-88

PN Pneumonia

POS Place of service

PPI Producer Price Index

PPS Prospective payment system

PQRI Physician Quality Reporting Initiative

PQRS Physician Quality Reporting System

QDC Quality data code

QIO Quality Improvement Organization

RFA Regulatory Flexibility Act

RHQDAPU Reporting Hospital Quality Data for Annual Payment Update

RTI Research Triangle Institute, International

RVU Relative value unit

SAD Self-administered drug

SAMS Secure Access Management Services

SCH Sole community hospital

SCOD Specified covered outpatient drugs

SES Socioeconomic status

SI Status indicator

SIA Systems Improvement Agreement

SIR Standardized infection ratio

SNF Skilled nursing facility

SRS Stereotactic radiosurgery

SRTR Scientific Registry of Transplant Recipients

SSA Social Security Administration

SSI Surgical site infection

TEP Technical Expert Panel

TOPs Transitional Outpatient Payments

VBP Value-based purchasing

WAC Wholesale acquisition cost

Table of Contents

I. Summary and Background

A. Executive Summary of This Document

1. Purpose

2. Summary of the Major Provisions

3. Summary of Costs and Benefits

B. Legislative and Regulatory Authority for the Hospital OPPS

C. Excluded OPPS Services and Hospitals

D. Prior Rulemaking

E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel)

1. Authority of the Panel

2. Establishment of the Panel

3. Panel Meetings and Organizational Structure

F. Public Comments Received in Response to CY 2017 OPPS/ASC Final Rule With Comment Period

II. Updates Affecting OPPS Payments

A. Recalibration of APC Relative Payment Weights

1. Database Construction

a. Database Source and Methodology

b. Calculation and Use of Cost-to-Charge Ratios (CCRs)

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

a. Calculation of Single Procedure APC Criteria-Based Costs

(1) Blood and Blood Products

(2) Brachytherapy Sources

b. Comprehensive APCs (C-APCs) for CY 2018

(1) Background

(2) C-APCs for CY 2018

(3) Brachytherapy Insertion Procedures

(4) C-APC 5627 (Level 7 Radiation) Stereotactic Radiosurgery (SRS)

(5) Complexity Adjustment for Blue Light Cystoscopy Procedures

(6) Analysis of C-APC Packaging Under the OPPS

c. Calculation of Composite APC Criteria-Based Costs

(1) Mental Health Services Composite APC

(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008)

3. Changes to Packaged Items and Services

a. Background and Rationale for Packaging in the OPPS

b. CY 2018 Drug Administration Packaging Policies

(1) Background of Drug Administration Packaging Policy

(2) Packaging of Level 1 and Level 2 Drug Administration Services

(3) Discussion and Summary of Comments Received in Response to Solicitation Regarding Unconditionally Packaging Drug Administration Add-On Codes

c. Analysis of Packaging of Pathology Services in the OPPS

d. Summary of Public Comments and Our Responses Regarding Packaging of Items and Services Under the OPPS

4. Calculation of OPPS Scaled Payment Weights

B. Conversion Factor Update

C. Wage Index Changes

D. Statewide Average Default CCRs

E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the ActStart Printed Page 52359

F. Payment Adjustment for Certain Cancer Hospitals for CY 2018

1. Background

2. Policy for CY 2018

G. Hospital Outpatient Outlier Payments

1. Background

2. Outlier Calculation for CY 2018

H. Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment

I. Beneficiary Copayments

1. Background

2. OPPS Copayment Policy

3. Calculation of an Adjusted Copayment Amount for an APC Group

III. OPPS Ambulatory Payment Classification (APC) Group Policies

A. OPPS Treatment of New CPT and Level II HCPCS Codes

1. Treatment of New HCPCS Codes That Were Effective April 1, 2017 for Which We Solicited Public Comments in the CY 2018 OPPS/ASC Proposed Rule

2. Treatment of New HCPCS Codes Effective July 1, 2017 for Which We Solicited Public Comments in the CY 2018 OPPS/ASC Proposed Rule

3. Process for New Level II HCPCS Codes That Are Effective October 1, 2017 and January 1, 2018 for Which We Are Soliciting Public Comments in This CY 2018 OPPS/ASC Final Rule With Comment Period

4. Treatment of New and Revised CY 2018 Category I and III CPT Codes That Are Effective January 1, 2018 for Which We Solicited Public Comments in the CY 2018 OPPS/ASC Proposed Rule

B. OPPS Changes—Variations Within APCs

1. Background

2. Application of the 2 Times Rule

3. APC Exceptions to the 2 Times Rule

C. New Technology APCs

1. Background

2. Revised and Additional New Technology APC Groups

3. Procedures Assigned to New Technology APC Groups for CY 2018

a. Overall Policy

b. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APCs 1537, 5114, and 5415)

c. Retinal Prosthesis Implant Procedure

d. Pathogen Test for Platelets

e. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)

D. OPPS APC-Specific Policies

1. Blood-Driven Hematopoietic Cell Harvesting

2. Brachytherapy Insertion Procedures (C-APCs 5341 and 5092)

a. C-APC 5341 (Abdominal/Peritoneal/Biliary and Related Procedures)

b. C-APC 5092 (Level 2 Breast/Lymphatic Surgery and Related Procedures)

3. Care Management Coding Changes Effective January 1, 2018 (APCs 5821 and 5822)

4. Cardiac Telemetry (APC 5721)

5. Collagen Cross-Linking of Cornea (C-APC 5503)

6. Cryoablation Procedures for Lung Tumors (C-APC 5361)

7. Diagnostic Bone Marrow Aspiration and Biopsy (C-APC 5072)

8. Discussion of the Comment Solicitation in the Proposed Rule on Intraocular Procedures APCs

9. Endovascular APCs (C-APCs 5191 Through 5194)

10. Esophagogastroduodenoscopy (C-APC 5362)

11. Hemorrhoid Treatment by Thermal Energy (APC 5312)

12. Ileoscopy Through Stoma With Stent Placement (C-APC 5303)

13. Laparoscopic Nephrectomy (C-APC 5362)

14. Multianalyte Assays With Algorithmic Analyses (MAAA)

15. Musculoskeletal APCs (APCs 5111 Through 5116)

16. Nasal/Sinus Endoscopy Procedures (C-APC 5155)

17. Nuclear Medicine Services (APCs 5592 and 5593)

18. Percutaneous Transluminal Mechanical Thrombectomy (C-APC 5192)

19. Peripherally Inserted Central Venous Catheter (APC 5182)

20. Pulmonary Rehabilitation Services (APCs 5732 and 5733) and Cardiac Rehabilitation Services (APC 5771)

21. Radiology and Imaging Procedures and Services

a. Imaging APCs

b. Non-Ophthalmic Fluorescent Vascular Angiography (APC 5523)

22. Sclerotherapy (APC 5054)

23. Skin Substitutes (APCs 5053, 5054, and 5055)

24. Subdermal Drug Implants for the Treatment of Opioid Addiction (APC 5735)

25. Suprachoroidal Delivery of Pharmacologic Agent (APC 5694)

26. Transperineal Placement of Biodegradable Material (C-APC 5375)

27. Transcranial Magnetic Stimulation Therapy (TMS) (APCs 5721 and 5722)

28. Transurethral Waterjet Ablation of Prostate (C-APC 5375)

29. Transurethral Water Vapor Thermal Therapy of Prostate (C-APC 5373)

IV. OPPS Payment for Devices

A. Pass-Through Payments for Devices

1. Beginning Eligibility Date for Device Pass-Through Status and Quarterly Expiration of Device Pass-Through Payments

a. Background

b. Expiration of Transitional Pass-Through Payment for Certain Devices

2. New Device Pass-Through Applications

a. Background

b. Applications Received for Device Pass-Through Payment for CY 2018

B. Device-Intensive Procedures

1. Background

2. HCPCS Code-Level Device-Intensive Determination

3. Device Edit Policy

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

a. Background

b. Policy for No Cost/Full Credit and Partial Credit Devices

5. Payment Policy for Low-Volume Device-Intensive Procedures

V. OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals

A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals

1. Background

2. 3-Year Transitional Pass-Through Payment Period for All Pass-Through Drugs, Biologicals, and Radiopharmaceuticals and Expiration of Pass-Through Status

3. Drugs and Biologicals With Expiring Pass-Through Payment Status in CY 2017

4. Drugs, Biologicals, and Radiopharmaceuticals With New or Continuing Pass-Through Status in CY 2018

5. Provisions for Reducing Transitional Pass-Through Payments for Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals to Offset Costs Packaged Into APC Groups

B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Payment Status

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

a. Packaging Threshold

b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs, Certain Biologicals, and Therapeutic Radiopharmaceuticals Under the Cost Threshold (“Threshold-Packaged Policy”)

c. Policy Packaged Drugs, Biologicals, and Radiopharmaceuticals

d. High Cost/Low Cost Threshold for Packaged Skin Substitutes

e. Packaging Determination for HCPCS Codes That Describe the Same Drug or Biological But Different Dosages

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 and Packaged Drugs and Biologicals

b. CY 2018 Payment Policy

c. Biosimilar Biological Products

3. Payment Policy for Therapeutic Radiopharmaceuticals

4. Payment Adjustment Policy for Radioisotopes Derived From Non-Highly Enriched Uranium Sources

5. Payment for Blood Clotting Factors

6. Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims Data

7. Alternative Payment Methodology for Drugs Purchased Under the 340B Program

a. Background

b. OPPS Payment Rate for 340B Purchased Drugs

c. Summaries of Public Comments Received and Our Responses

d. Summary of Final Policies for CY 2018

e. Comment Solicitation on Additional 340B Considerations

VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices

A. Background

B. Estimate of Pass-Through SpendingStart Printed Page 52360

VII. OPPS Payment for Hospital Outpatient Visits and Critical Care Services

VIII. Payment for Partial Hospitalization Services

A. Background

B. PHP APC Update for CY 2018

1. PHP APC Geometric Mean per Diem Costs

2. Development of the PHP APC Geometric Mean per Diem Costs

a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments

b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions

3. PHP Service Utilization Updates

4. Minimum Service Requirement: 20 Hours per Week

C. Outlier Policy for CMHCs

IX. Procedures That Will Be Paid Only as Inpatient Procedures

A. Background

B. Changes to the Inpatient Only (IPO) List

1. Methodology for Identifying Appropriate Changes to IPO List

2. Removal of Procedures Described by CPT Code 55866

3. Removal of the Total Knee Arthroplasty (TKA) Procedure Described by CPT Code 27447

4. Recovery Audit Contractor (RAC) Review of TKA Procedures

5. Public Requests for Additions to or Removal of Procedures on the IPO List

6. Summary of Changes to the IPO List for CY 2018

C. Discussion of Solicitation of Public Comments on the Possible Removal of Partial Hip Arthroplasty (PHA) and Total Hip Arthroplasty (THA) Procedures From the IPO List

1. Background

2. Topics and Questions Posed for Public Comments

X. Nonrecurring Policy Changes

A. Payment for Certain Items and Services Furnished by Certain Off-Campus Departments of a Provider

1. Background

2. Expansion of Services by Excepted Off-Campus Hospital Outpatient Departments

3. Section 16002 of the 21st Century Cures Act (Treatment of Cancer Hospitals in Off-Campus Outpatient Department of a Provider Policy)

B. Medicare Site-of-Service Price Transparency (Section 4011 of the 21st Century Cures Act)

C. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

D. Enforcement Instruction for the Supervision of Outpatient Therapeutic Services in Critical Access Hospitals (CAHs) and Certain Small Rural Hospitals

E. Payment Changes for Film X-Rays Services and Payment Changes for X-Rays Taken Using Computed Radiography Technology

F. Revisions to the Laboratory Date of Service Policy

XI. CY 2018 OPPS Payment Status and Comment Indicators

A. CY 2018 OPPS Payment Status Indicator Definitions

B. CY 2018 Comment Indicator Definitions

XII. Updates to the Ambulatory Surgical Center (ASC) Payment System

A. Background

1. Legislative History, Statutory Authority, and Prior Rulemaking for the ASC Payment System

2. Policies Governing Changes to the Lists of Codes and Payment Rates for ASC Covered Surgical Procedures and Covered Ancillary Services

3. Definition of ASC Covered Surgical Procedures

B. Treatment of New and Revised Codes

1. Background on Current Process for Recognizing New and Revised Category I and Category III CPT Codes and Level II HCPCS Codes

2. Treatment of New and Revised Level II HCPCS Codes Implemented in April 2017 for Which We Solicited Public Comments in the CY 2018 Proposed Rule

3. Treatment of New and Revised Level II HCPCS Codes Implemented in July 2017 for Which We Solicited Public Comments in the CY 2018 Proposed Rule

4. Process for New and Revised Level II HCPCS Codes That Are Effective October 1, 2017 and January 1, 2018 for Which We Are Soliciting Public Comments in this CY 2018 OPPS/ASC Final Rule With Comment Period

5. Process for Recognizing New and Revised Category I and Category III CPT Codes That Are Effective January 1, 2018 for Which We Are Soliciting Public Comments in This CY 2018 OPPS/ASC Final Rule With Comment Period

C. Update to the List of ASC Covered Surgical Procedures and Covered Ancillary Services

1. Covered Surgical Procedures

a. Covered Surgical Procedures Designated as Office-Based

(1) Background

(2) Changes for CY 2018 to Covered Surgical Procedures Designated as Office-Based

b. ASC Covered Surgical Procedures Designated as Device-Intensive

(1) Background

(2) Changes to List of ASC Covered Surgical Procedures Designated as Device-Intensive for CY 2018

c. Adjustment to ASC Payments for No Cost/Full Credit and Partial Credit Devices

d. Additions to the List of ASC Covered Surgical Procedures

e. Discussion of Comment Solicitation on Adding Additional Procedures to the ASC Covered Procedures List

2. Covered Ancillary Services

D. ASC Payment for Covered Surgical Procedures and Covered Ancillary Services

1. ASC Payment for Covered Surgical Procedures

a. Background

b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2018

2. Payment for Covered Ancillary Services

a. Background

b. Payment for Covered Ancillary Services for CY 2018

E. New Technology Intraocular Lenses (NTIOLs)

1. NTIOL Application Cycle

2. Requests To Establish New NTIOL Classes for CY 2018

3. Payment Adjustment

4. Announcement of CY 2019 Deadline for Submitting Requests for CMS Review of Applications for a New Class of NTIOLs

F. ASC Payment and Comment Indicators

1. Background

2. ASC Payment and Comment Indicators

G. Calculation of the ASC Conversion Factor and the ASC Payment Rates

1. Background

2. Calculation of the ASC Payment Rates

a. Updating the ASC Relative Payment Weights for CY 2018 and Future Years

b. Updating the ASC Conversion Factor

3. Discussion of Comment Solicitation on ASC Payment System Reform

4. Display of CY 2018 ASC Payment Rates

XIII. Requirements for the Hospital Outpatient Quality Reporting (OQR) Program

A. Background

1. Overview

2. Statutory History of the Hospital OQR Program

3. Regulatory History of the Hospital OQR Program

B. Hospital OQR Program Quality Measures

1. Considerations in the Selection of Hospital OQR Program Quality Measures

2. Accounting for Social Risk Factors in the Hospital OQR Program

3. Retention of Hospital OQR Program Measures Adopted in Previous Payment Determinations

4. Removal of Quality Measures From the Hospital OQR Program Measure Set

a. Considerations in Removing Quality Measures From the Hospital OQR Program

b. Criteria for Removal of “Topped-Out” Measures

c. Measure Removal From the Hospital OQR Program Measure Set

5. Make Reporting of OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based Measures Voluntary for CY 2018 Reporting and Subsequent Years

6. Previously Adopted Hospital OQR Program Measure Set for the CY 2020 Payment Determination and Subsequent Years

7. Newly Finalized Hospital OQR Program Measure Set for the CY 2020 Payment Determination and Subsequent Years

8. Hospital OQR Program Measures and Topics for Future Consideration

a. Future Measure Topics

b. Possible Future Adoption of the Electronic Version of OP-2: Fibrinolytic Therapy Received Within 30 Minutes of Emergency Department Arrival

9. Maintenance of Technical Specifications for Quality Measures

10. Public Display of Quality Measures

a. Background

b. Public Reporting of OP-18c: Median Time From Emergency Department Arrival to Emergency Department Departure for Discharged Emergency Department Patients—Psychiatric/Mental Health PatientsStart Printed Page 52361

C. Administrative Requirements

1. QualityNet Account and Security Administrator

2. Requirements Regarding Participation Status

a. Background

b. Changes to the NOP Submission Deadline

D. Form, Manner, and Timing of Data Submitted for the Hospital OQR Program

1. Hospital OQR Program Annual Payment Determinations

2. Requirements for Chart-Abstracted Measures Where Patient-Level Data Are Submitted Directly to CMS for the CY 2021 Payment Determination and Subsequent Years

3. Claims-Based Measure Data Requirements for the CY 2020 Payment Determination and Subsequent Years

4. Data Submission Requirements for OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based Measures for the CY 2020 Payment Determination and Subsequent Years

5. Data Submission Requirements for Previously Finalized Measures for Data Submitted via a Web-Based Tool for the CY 2020 Payment Determination and Subsequent Years

6. Population and Sampling Data Requirements for the CY 2020 Payment Determination and Subsequent Years

7. Hospital OQR Program Validation Requirements for Chart-Abstracted Measure Data Submitted Directly to CMS for the CY 2020 Payment Determination and Subsequent Years

a. Clarification

b. Codification

c. Modifications to the Educational Review Process for Chart-Abstracted Measures Validation

8. Extraordinary Circumstances Exception Process for the CY 2020 Payment Determination and Subsequent Years

a. ECE Policy Nomenclature

b. Timeline for CMS Response to ECE Requests

9. Hospital OQR Program Reconsideration and Appeals Procedures for the CY 2020 Payment Determination and Subsequent Years

E. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2018 Payment Determination

1. Background

2. Reporting Ratio Application and Associated Adjustment Policy for CY 2018

XIV. Requirements for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program

A. Background

1. Overview

2. Statutory History of the ASCQR Program

3. Regulatory History of the ASCQR Program

B. ASCQR Program Quality Measures

1. Considerations in the Selection of ASCQR Program Quality Measures

2. Accounting for Social Risk Factors in the ASCQR Program

3. Policies for Retention and Removal of Quality Measures From the ASCQR Program

a. Retention of Previously Adopted ASCQR Program Measures

b. Measure Removal

4. Delay of ASC-15a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based Measures Beginning With the 2020 Payment Determination

5. ASCQR Program Quality Measures Adopted in Previous Rulemaking

6. ASCQR Program Quality Measures for the CY 2021 and CY 2022 Payment Determinations and Subsequent Years

a. Adoption of ASC-16: Toxic Anterior Segment Syndrome Beginning With the CY 2021 Payment Determination

b. Adoption of ASC-17: Hospital Visits After Orthopedic Ambulatory Surgical Center Procedures Beginning With the CY 2022 Payment Determination

c. Adoption of ASC-18: Hospital Visits After Urology Ambulatory Surgical Center Procedures Beginning With the CY 2022 Payment Determination

d. Summary of Previously Adopted Measurers and Newly Adopted ASCQR Program Measures for the CY 2022 Payment Determination and Subsequent Years

7. ASCQR Program Measures and Topics for Future Consideration

8. Maintenance of Technical Specifications for Quality Measures

9. Public Reporting of ASCQR Program Data

C. Administrative Requirements

1. Requirements Regarding QualityNet Account and Security Administrator

2. Requirements Regarding Participation Status

D. Form, Manner, and Timing of Data Submitted for the ASCQR Program

1. Requirements Regarding Data Processing and Collection Periods for Claims-Based Measures Using Quality Data Codes (QDCs)

2. Minimum Threshold, Minimum Case Volume, and Data Completeness for Claims-Based Measures Using QDCs

3. Requirements for Data Submitted via an Online Data Submission Tool

a. Requirements for Data Submitted via a Non-CMS Online Data Submission Tool

b. Requirements for Data Submitted via a CMS Online Data Submission Tool

4. Requirements for Claims-Based Measure Data

5. Requirements for Data Submission for ASC-15a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based Measures

6. Extraordinary Circumstances Extensions or Exemptions for the CY 2019 Payment Determination and Subsequent Years

a. Background

b. ECE Policy Nomenclature

c. Timeline for CMS Response to ECE Requests

7. ASCQR Program Reconsideration Procedures

E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements

1. Statutory Background

2. Reduction to the ASC Payment Rates for ASCs That Fail To Meet the ASCQR Program Requirements for a Payment Determination Year

XV. Files Available to the Public via the Internet

XVI. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

B. ICRs for the Hospital OQR Program

C. ICRs for the ASCQR Program

XVII. Response to Comments

XVIII. Economic Analyses

A. Regulatory Impact Analysis

1. Introduction

2. Statement of Need

3. Overall Impacts for the OPPS and ASC Payment Provisions

4. Regulatory Review Costs

5. Detailed Economic Analyses

a. Estimated Effects of OPPS Changes in This Final Rule With Comment Period

(1) Limitations of Our Analysis

(2) Estimated Effects of OPPS Changes to Part B Drug Payment on 340B Eligible Hospitals Paid Under the OPPS

(3) Estimated Effects of OPPS Changes on Hospitals

(4) Estimated Effects of OPPS Changes on CMHCs

(5) Estimated Effects of OPPS Changes on Beneficiaries

(6) Estimated Effects of OPPS Changes on Other Providers

(7) Estimated Effects of OPPS Changes on the Medicare and Medicaid Programs

(8) Alternative OPPS Policies Considered

b. Estimated Effects of CY 2018 ASC Payment System Policies

(1) Limitations of Our Analysis

(2) Estimated Effects of CY 2018 ASC Payment System Policies on ASCs

(3) Estimated Effects of ASC Payment System Policies on Beneficiaries

(4) Alternative ASC Payment Policies Considered

c. Accounting Statements and Tables

d. Effects of Requirements for the Hospital OQR Program

e. Effects of Requirements for the ASCQR Program

B. Regulatory Flexibility Act (RFA) Analysis

C. Unfunded Mandates Reform Act Analysis

D. Reducing Regulation and Controlling Regulatory Costs

E. Conclusion

XIX. Federalism Analysis

Regulation Text

I. Summary and Background

A. Executive Summary of This Document

1. Purpose

In this final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments Start Printed Page 52362(HOPDs) and ambulatory surgical centers (ASCs) beginning January 1, 2018. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the payment rates for services payable under the Hospital Outpatient Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS not less often than annually, and to revise the groups, relative payment weights, and other adjustments that take into account changes in medical practices, changes in technologies, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i) of the Act, we annually review and update the ASC payment rates. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.

2. Summary of the Major Provisions

  • OPPS Update: For CY 2018, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 1.35 percent. This increase factor is based on the hospital inpatient market basket percentage increase of 2.7 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the multifactor productivity (MFP) adjustment of 0.6 percentage point, and minus a 0.75 percentage point adjustment required by the Affordable Care Act. 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 CY 2018 is approximately $70 billion, an increase of approximately $5.8 billion compared to estimated CY 2017 OPPS payments.

We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals failing to meet the hospital outpatient quality reporting requirements, by applying a reporting factor of 0.980 to the OPPS payments and copayments for all applicable services.

  • High Cost/Low Cost Threshold for Packaged Skin Substitutes: As we did for CY 2017, we are assigning skin substitutes with a geometric mean unit cost (MUC) or a per day cost (PDC) that exceeds either the MUC threshold or the PDC threshold to the high cost group. In addition, for CY 2018, we are establishing that a skin substitute product that does not exceed either the CY 2018 MUC or PDC threshold for CY 2018, but was assigned to the high cost group for CY 2017, is assigned to the high cost group for CY 2018. The goal of our policy is to maintain similar levels of payment for skin substitute products for CY 2018 while we study our current skin substitute payment methodology to determine whether refinements to our existing methodologies may be warranted.
  • Supervision of Hospital Outpatient Therapeutic Services: In the CY 2009 and CY 2010 OPPS/ASC proposed rules and final rules with comment period, we clarified that direct supervision is required for hospital outpatient therapeutic services covered and paid by Medicare that are furnished in hospitals, CAHs, and in provider-based departments (PBDs) of hospitals, as set forth in the CY 2000 OPPS final rule with comment period. For several years, there has been a moratorium on the enforcement of the direct supervision requirement for CAHs and small rural hospitals, with the latest moratorium on enforcement expiring on December 31, 2016. In this final rule with comment period, as we proposed, we are reinstating the nonenforcement policy for direct supervision of outpatient therapeutic services furnished in CAHs and small rural hospitals having 100 or fewer beds and reinstating our enforcement instruction for CY 2018 and CY 2019.
  • 340B Drug Pricing: We are changing our current Medicare Part B drug payment methodology for 340B hospitals that we believe will better, and more appropriately, reflect the resources and acquisition costs that these hospitals incur. These changes will lower drug costs for Medicare beneficiaries for drugs acquired by hospitals under the 340B Program. For CY 2018, we are exercising the Secretary's authority to adjust the applicable payment rate as necessary for separately payable drugs and biologicals (other than drugs on pass-through payment status and vaccines) acquired under the 340B Program from average sales price (ASP) plus 6 percent to ASP minus 22.5 percent. Rural sole community hospitals (SCHs), children's hospitals, and PPS-exempt cancer hospitals are excluded from this payment adjustment in CY 2018. In addition, in this final rule with comment period, we are establishing two modifiers to identify whether a drug billed under the OPPS was purchased under the 340B Program—one for hospitals that are subject to the payment reduction and another for hospitals not subject to the payment reduction but that acquire drugs under the 340B Program.
  • Device Pass-Through Payment Applications: For CY 2018, we evaluated five devices for eligibility to receive pass through payments and sought public comments in the CY 2018 proposed rule on whether each of these items meet the criteria for device pass-through payment status. None of the applications were approved for device pass-through payments for CY 2018.
  • Rural Adjustment: We are continuing the adjustment of 7.1 percent to the OPPS payments to certain rural SCHs, including essential access community hospitals (EACHs). This adjustment will apply to all services paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to cost.
  • Cancer Hospital Payment Adjustment: For CY 2018, we are continuing to provide additional payments to cancer hospitals so that the cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. However, beginning CY 2018, section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point. Based on the data and the required 1.0 percentage point reduction, a target PCR of 0.88 will be used to determine the CY 2018 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.88 for each cancer hospital.
  • Changes to the Inpatient Only List: For CY 2018, we are finalizing our proposal to remove total knee arthroplasty (TKA) from the inpatient only list. In addition, we are precluding the Recovery Audit Contractors from reviewing TKA procedures for “patient status” (that is, site of service) for a period of 2 years. We note that we will monitor changes in site of service to determine whether changes may be necessary to certain CMS Innovation Center models. In addition, we are removing five other procedures from the inpatient only list and adding one procedure to the list.
  • Comprehensive APCs: For CY 2018, we did not propose to create any new C-APCs or make any extensive changes to the already established methodology used for C-APCs. There will be a total Start Printed Page 52363number of 62 C-APCs as of January 1, 2018. For CY 2018, for the C-APC for stereotactic radio surgery (SRS), specifically, C-APC 5627 (Level 7 Radiation Therapy), we are continuing to make separate payments for the 10 planning and preparation services adjunctive to the delivery of the SRS treatment using either the Cobalt-60-based or LINAC-based technology when furnished to a beneficiary within 30 days of the SRS treatment. In addition, the data collection period for SRS claims with modifier “CP” is set to conclude on December 31, 2017. Accordingly, for CY 2018, we are deleting this modifier and discontinuing its required use.
  • Packaging Policies: In CY 2015, we implemented a policy to conditionally package ancillary services assigned to APCs with a geometric mean cost of $100 or less prior to packaging, with some exceptions, including drug administration services. For CY 2018, we are removing the exception for certain drug administration services and conditionally packaging payment for low-cost drug administration services. We did not propose to package drug administration add-on codes for CY 2018, but solicited comments on this policy. The public comments that we received are discussed in this final rule with comment period. In addition, we solicited comments on existing packaging policies that exist under the OPPS, including those related to drugs that function as a supply in a diagnostic test or procedure or in a surgical procedure. The public comments that we received are also discussed in this final rule with comment period.
  • Payment Changes for X-rays Taken Using Computed Radiography Technology: Section 502(b) of Division O, Title V of the Consolidated Appropriations Act, 2016 (Pub. L. 114-113) amended section 1833(t)(16) of the Act by adding new subparagraph (F). New section 1833(t)(16)(F)(ii) of the Act provides for a phased-in reduction of payments for imaging services that are taken using computed radiography technology. That section provides that payments for such services furnished during CYs 2018 through 2022 shall be reduced by 7 percent, and if such services are furnished during CY 2023 or a subsequent year, payments for such services shall be reduced by 10 percent. We are establishing a new modifier that will be reported on claims to identify those HCPCS codes that describe X-rays taken using computed radiography technology. Specifically, this modifier, as allowed under the provisions of new section 1833(t)(16)(F)(ii) of the Act, will be reported with the applicable HCPCS code to describe imaging services that are taken using computed radiography technology beginning January 1, 2018.
  • ASC Payment Update: For CY 2018, we are increasing payment rates under the ASC payment system by 1.2 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a projected CPI-U update of 1.7 percent minus a multifactor productivity adjustment required by the Affordable Care Act of 0.5 percentage point. Based on this update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2018 is approximately $4.62 billion, an increase of approximately $130 million compared to estimated CY 2017 Medicare payments. In addition, in the CY 2018 proposed rule, we solicited comment on payment reform for ASCs, including the collection of cost data which may support a rate update other than CPI-U. We discuss the public comments that we received in response to this solicitation in this final rule with comment period.
  • Comment Solicitation on ASC Payment Reform: In the CY 2018 proposed rule, we indicated that we were broadly interested in feedback from stakeholders and other interested parties on potential reforms to the current payment system, including, but not limited to (1) the rate update factor applied to ASC payments, (2) whether and how ASCs should submit data relating to costs, (3) whether ASCs should bill on the institutional claim form rather than the professional claim form, and (4) other ideas to improve payment accuracy for ASCs. We discuss the feedback we received in this final rule with comment period.
  • Changes to the List of ASC Covered Surgical Procedures: For CY 2018, we are adding three procedures to the ASC covered procedures list. In addition, in the CY 2018 proposed rule, we solicited comment on whether total knee arthroplasty, partial hip arthroplasty and total hip arthroplasty meet the criteria to be added to the ASC covered procedures list. We also solicited comments from stakeholders on whether there are codes that are outside the AMA-CPT surgical code range that nonetheless, should be considered to be a covered surgical procedure. We discuss the public comments we received on this solicitation in this final rule with comment period.
  • Revisions to the Laboratory Date of Service Policy: To better understand the potential impact of the current date of service (DOS) policy on billing for molecular pathology tests and advanced diagnostic laboratory tests (ADLTs) under the new private payor rate-based Clinical Laboratory Fee Schedule (CLFS), in the CY 2018 proposed rule, we solicited public comments on billing for molecular pathology tests and certain ADLTs ordered less than 14 days of a hospital outpatient discharge and discussed potential modifications to our DOS policy to address those tests. After considering the public comments received, we are adding an additional exception to our current laboratory DOS regulations at 42 CFR 414.510. This new exception to the laboratory DOS policy generally permits laboratories to bill Medicare directly for ADLTs and molecular pathology tests excluded from OPPS packaging policy if the specimen was collected from a hospital outpatient during a hospital outpatient encounter and the test was performed following the patient's discharge from the hospital outpatient department. We discuss the public comments we received on this solicitation in this final rule with comment period.
  • Hospital Outpatient Quality Reporting (OQR) Program: For the Hospital OQR Program, we are finalizing our proposals to remove and delay certain measures for the CY 2020 payment determination and subsequent years. Specifically, beginning with the CY 2020 payment determination, we are finalizing our proposals to remove: (1) OP-21: Median Time to Pain Management for Long Bone Fracture; and (2) OP-26: Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures. While we proposed to remove: OP-1: Median Time to Fibrinolysis, OP-4: Aspirin at Arrival, OP-20: Door to Diagnostic Evaluation by a Qualified Medical Professional, and OP-25: Safe Surgery Checklist for the CY 2021 payment determination and subsequent years, we are finalizing these proposals with modification, such that we are removing them for the CY 2020 payment determination and subsequent years, one year earlier than proposed. We are also finalizing our proposal to delay the OAS CAHPS Survey-based measures (OP-37a-e) beginning with the CY 2020 payment determination (CY 2018 reporting). In addition, for the CY 2020 payment determination and subsequent years we are: (1) Providing clarification on our procedures for validation of chart-abstracted measures for targeting the poorest performing outlier hospitals; (2) formalizing the validation educational review process and updating it to allow corrections of incorrect validation results for chart-abstracted measures, Start Printed Page 52364and modifying the CFR accordingly; (3) aligning the first quarter for which to submit data for hospitals that did not participate in the previous year's Hospital OQR Program and make corresponding changes to the CFR; and (4) aligning the naming of the Extraordinary Circumstances Exceptions (ECE) policy with that used in our other quality reporting and value-based payment programs and making corresponding changes to the CFR. We are not finalizing our proposal to extend the Notice of Participation (NOP) deadline and make corresponding changes to the CFR. Lastly, we are finalizing with modifications, our proposal to publicly report OP-18c: Median Time from Emergency Department Arrival to Emergency Department Departure for Discharged Emergency Department Patients—Psychiatric/Mental Health Patients.
  • Ambulatory Surgical Center Quality Reporting (ASCQR) Program: For the ASCQR Program, we are finalizing measures and policies for the CY 2019 payment determination, 2021 payment determination, and CY 2022 payment determination and subsequent years. Specifically, we are finalizing our proposals to, beginning with the CY 2019 payment determination, remove three measures from the ASCQR Program measure set: (1) ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing; (2) ASC-6: Safe Surgery Checklist Use; and, (3) ASC-7: Ambulatory Surgical Center Facility Volume Data on Selected Ambulatory Surgical Center Surgical Procedures. In addition, we are also finalizing our proposal to delay the OAS CAHPS Survey measures (ASC-15a-e) beginning with the CY 2020 payment determination (CY 2018 data collection). Furthermore, starting with CY 2018, we are finalizing our proposals to: (1) Expand the CMS online tool to also allow for batch submission of measure data and make corresponding changes to the CFR; and (2) align the naming of the Extraordinary Circumstances Exceptions (ECE) policy with that used in our other quality reporting and value-based payment programs and make corresponding changes to the CFR. We are not finalizing our proposal to adopt one new measure, ASC-16: Toxic Anterior Segment Syndrome, beginning with the CY 2021 payment determination. However, we are finalizing proposals to adopt two new measures collected via claims, beginning with the CY 2022 payment determination, ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures and ASC-18: Hospital Visits after Urology Ambulatory Surgical Center Procedures.

Response: We appreciate the commenters' support. However, as we stated earlier in section V.B.1.c. of this final rule with comment period in response to a similar request for additional radiopharmaceutical payment, we continue to believe that a single payment is appropriate for radiopharmaceuticals with pass-through payment status in CY 2018 and that the payment rate of ASP+6 percent is appropriate to provide payment for both the radiopharmaceutical's acquisition cost and any associated nuclear medicine handling and compounding costs incurred by the hospital pharmacy. Payment for the radiopharmaceutical and radiopharmaceutical processing services is made through the single ASP-based payment. We refer readers to the CMS guidance document available via the Internet at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Archives.html for details on submission of ASP data for therapeutic radiopharmaceuticals.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue to pay all nonpass-through, separately payable therapeutic radiopharmaceuticals at ASP+6 percent. We also are finalizing our proposal to continue to rely on CY 2016 mean unit cost data derived from hospital claims data for payment rates for therapeutic radiopharmaceuticals for which ASP data are unavailable. The CY 2018 final rule payment rates for nonpass-through separately payable therapeutic radiopharmaceuticals are included in Addenda A and B to this final rule with comment period (which are available via the Internet on the CMS Web site).

4. Payment Adjustment Policy for Radioisotopes Derived From Non-Highly Enriched Uranium Sources

Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Some of the Technetium-99 (Tc-99m), the radioisotope used in the majority of such diagnostic imaging services, is produced in legacy reactors outside of the United States using highly enriched uranium (HEU).

The United States would like to eliminate domestic reliance on these reactors, and is promoting the conversion of all medical radioisotope production to non-HEU sources. Alternative methods for producing Tc-99m without HEU are technologically and economically viable, and conversion to such production has begun. We expect that this change in the supply source for the radioisotope used for modern medical imaging will introduce new costs into the payment system that are not accounted for in the historical claims data.

Therefore, beginning in CY 2013, we finalized a policy to provide an additional payment of $10 for the marginal cost for radioisotopes produced by non-HEU sources (77 FR 68323). Under this policy, hospitals report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium source, full cost recovery add-on per study dose) once per dose along with any diagnostic scan or scans furnished using Tc-99m as long as the Tc-99m doses used can be certified by the hospital to be at least 95 percent derived from non-HEU sources (77 FR 68321).

We stated in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68321) that our expectation is that this additional payment will be needed for the duration of the industry's conversion to alternative methods to producing Tc-99m without HEU. We also stated that we would reassess, and propose if necessary, on an annual basis whether such an adjustment continued to be necessary and whether any changes to the adjustment were warranted (77 FR 68316). We have reassessed this payment for CY 2018 and did not identify any new information that would cause us to modify payment. Therefore, in the CY 2018 OPPS/ASC proposed rule (82 FR 33631), for CY 2018, we proposed to continue to provide an additional $10 payment for radioisotopes produced by non-HEU sources.

Comment: Commenters supported CMS' proposal to provide an additional $10 payment for the marginal cost of radioisotopes produced by non-HEU sources and supported continuation of the policy. However, the commenters requested that CMS update the payment amount using the hospital market basket update or hospital cost data. The commenters also requested that CMS assess whether the collection of a beneficiary copayment could discourage hospital adoption.

Response: We appreciate the commenters' support. As discussed in the CY 2013 OPPS/ASC final rule with comment period, we did not finalize a policy to use the usual OPPS methodologies to update the non-HEU add-on payment (77 FR 68317). The purpose for the additional payment is limited to mitigating any adverse impact of transitioning to non-HEU sources and Start Printed Page 52365is based on the authority set forth at section 1833(t)(2)(E) of the Act. Accordingly, because we do not have authority to waive beneficiary copayment for this incentive payment, we believe it is unnecessary to assess whether a beneficiary copayment liability would deter a hospital from reporting HCPCS code Q9969. Furthermore, reporting of HCPCS code Q9969 is optional. Hospitals that are not experiencing high volumes of significantly increased costs are not obligated to request this additional payment (77 FR 68323).

Comment: One commenter requested that CMS publish HCPCS code volume and cost data in the proposed and final rule “Drug Blood Brachy Cost Statistics” files yearly.

Response: We appreciate the request and will consider revising the content of the “Drug Blood Brachy Cost statistics” file to include data on HCPCS code Q9969 for future rulemaking. In the interim, claims data on HCPCS code Q9969 are available for purchase in the claims data sets released with publication of this final rule with comment period.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue the policy of providing an additional $10 payment for radioisotopes produced by non-HEU sources for CY 2018, which will be the sixth year in which this policy is in effect in the OPPS. We will continue to reassess this policy annually, consistent with the original policy in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68319).

5. Payment for Blood Clotting Factors

For CY 2017, we provided payment for blood clotting factors under the same methodology as other nonpass-through separately payable drugs and biologicals under the OPPS and continued paying an updated furnishing fee (81 FR 79676). That is, for CY 2017, we provided payment for blood clotting factors under the OPPS at ASP+6 percent, plus an additional payment for the furnishing fee. We note that when blood clotting factors are provided in physicians' offices under Medicare Part B and in other Medicare settings, a furnishing fee is also applied to the payment. The CY 2017 updated furnishing fee was $0.209 per unit.

In the CY 2018 OPPS/ASC proposed rule (82 FR 33631), for CY 2018, we proposed to pay for blood clotting factors at ASP+6 percent, consistent with our proposed payment policy for other nonpass-through, separately payable drugs and biologicals, and to continue our policy for payment of the furnishing fee using an updated amount. Our policy to pay for a furnishing fee for blood clotting factors under the OPPS is consistent with the methodology applied in the physician's office and in the inpatient hospital setting. These methodologies were first articulated in the CY 2006 OPPS final rule with comment period (70 FR 68661) and later discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66765). The proposed furnishing fee update was based on the percentage increase in the Consumer Price Index (CPI) for medical care for the 12-month period ending with June of the previous year. Because the Bureau of Labor Statistics releases the applicable CPI data after the MPFS and OPPS/ASC proposed rules are published, we were not able to include the actual updated furnishing fee in the proposed rules. Therefore, in accordance with our policy, as finalized in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66765), we proposed to announce the actual figure for the percent change in the applicable CPI and the updated furnishing fee calculated based on that figure through applicable program instructions and posting on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Part-B-Drugs/​McrPartBDrugAvgSalesPrice/​index.html.

The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage differences using the hospital inpatient wage index value for the locality in which the hospital or CMHC is located.

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

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

C. Excluded OPPS Services and Hospitals

Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. It also excludes screening mammography, diagnostic mammography, and effective January 1, 2011, an annual wellness visit providing personalized prevention plan services. The Secretary exercises the authority granted under the statute to also exclude from the OPPS certain services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS); certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS); services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD prospective payment system; and services and procedures that require an inpatient stay that are paid under the hospital IPPS. 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 Start Printed Page 52366outpatient department of a provider (as defined in subparagraph (B) of paragraph (21). We set forth the services that are excluded from payment under the OPPS in regulations at 42 CFR 419.22.

Under § 419.20(b) of the regulations, we specify the types of hospitals that are excluded from payment under the OPPS. These excluded hospitals include:

  • Critical access hospitals (CAHs);
  • Hospitals located in Maryland and paid under the Maryland All-Payer Model;
  • Hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico; and
  • Indian Health Service (IHS) hospitals.

D. Prior Rulemaking

On April 7, 2000, we published in the Federal Register a final rule with comment period (65 FR 18434) to implement a prospective payment system for hospital outpatient services. The hospital OPPS was first implemented for services furnished on or after August 1, 2000. Section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS, not less often than annually, and to revise the groups, relative payment weights, and other adjustments that take into account changes in medical practices, changes in technologies, and the addition of new services, new cost data, and other relevant information and factors.

Since initially implementing the OPPS, we have published final rules in the Federal Register annually to implement statutory requirements and changes arising from our continuing experience with this system. These rules can be viewed on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html.

E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel)

1. Authority of the Panel

Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of Public Law 106-113, and redesignated by section 202(a)(2) of Public Law 106-113, requires that we consult with an external advisory panel of experts to annually review the clinical integrity of the payment groups and their weights under the OPPS. In CY 2000, based on section 1833(t)(9)(A) of the Act, the Secretary established the Advisory Panel on Ambulatory Payment Classification Groups (APC Panel) to fulfill this requirement. In CY 2011, based on section 222 of the PHS Act which gives discretionary authority to the Secretary to convene advisory councils and committees, the Secretary expanded the panel's scope to include the supervision of hospital outpatient therapeutic services in addition to the APC groups and weights. To reflect this new role of the panel, the Secretary changed the panel's name to the Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel). The HOP Panel is not restricted to using data compiled by CMS, and in conducting its review, it may use data collected or developed by organizations outside the Department.

2. Establishment of the Panel

On November 21, 2000, the Secretary signed the initial charter establishing the Panel, and at that time named the APC Panel. This expert panel is composed of appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise), reviews clinical data, and advises CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that the Panel—

  • May advise on the clinical integrity of Ambulatory Payment Classification (APC) groups and their associated weights;
  • May advise on the appropriate supervision level for hospital outpatient services;
  • Continues to be technical in nature;
  • Is governed by the provisions of the FACA;
  • Has a Designated Federal Official (DFO); and
  • Is chaired by a Federal Official designated by the Secretary.

The Panel's charter was amended on November 15, 2011, renaming the Panel and expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and to add critical access hospital (CAH) representation to its membership. The Panel's charter was also amended on November 6, 2014 (80 FR 23009), and the number of members was revised from up to 19 to up to 15 members. The Panel's current charter was approved on November 21, 2016, for a 2-year period (81 FR 94378).

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

3. Panel Meetings and Organizational Structure

The Panel has held multiple meetings, with the last meeting taking place on August 21, 2017. Prior to each meeting, we publish a notice in the Federal Register to announce the meeting and, when necessary, to solicit nominations for Panel membership, to announce new members and to announce any other changes of which the public should be aware. Beginning in CY 2017, we have transitioned to one meeting per year (81 FR 31941). Further information on the 2017 summer meeting can be found in the meeting notice titled “Medicare Program: Announcement of the Advisory Panel on Hospital Outpatient Payment (the Panel) Meeting on August 21-22, 2017” (82 FR 24128).

In addition, the Panel has established an operational structure that, in part, currently includes the use of three subcommittees to facilitate its required review process. The three current subcommittees include the following:

  • APC Groups and Status Indicator Assignments Subcommittee, which advises the Panel on the appropriate status indicators to be assigned to HCPCS codes, including but not limited to whether a HCPCS code or a category of codes should be packaged or separately paid, as well as the appropriate APC assignment of HCPCS codes regarding services for which separate payment is made;
  • Data Subcommittee, which is responsible for studying the data issues confronting the Panel and for recommending options for resolving them; and
  • Visits and Observation Subcommittee, which reviews and makes recommendations to the Panel on all technical issues pertaining to observation services and hospital outpatient visits paid under the OPPS.

Each of these subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 21, 2017 meeting that the subcommittees continue. We accepted this recommendation.Start Printed Page 52367

In addition, discussions of the other recommendations made by the Panel at the August 21, 2017 Panel meeting are included in the sections of this final rule with comment period that are specific to each recommendation. For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS Web site mentioned earlier in this section, and the FACA database at http://facadatabase.gov.

We note that we received some public comments on the CY 2018 OPPS/ASC proposed rule related to the HOP Panel meeting presentations, which we address below.

Comment: One commenter supported CMS' extension of the HOP Panel meeting presentation submission deadline when there is a truncated submittal timeframe due to delayed publication of the OPPS/ASC proposed rule. However, to avoid the need to modify the submission deadline in the future, the commenter suggested that CMS revise the submission deadline in the Federal Register notice from a firm date to a fluid 21 days from the proposed rule display date to avoid this deadline issue in the future.

Response: We appreciate the commenter's request to modify the HOP Panel meeting submission deadline format. However, frequency, timing, and presentation deadlines are outside the scope of the proposed rule and are generally announced through either a separate Federal Register notice or subregulatory channel such as the CMS Web site, or both.

Comment: One commenter requested that CMS reinstate the winter Panel meetings as part of a multifaceted process that would allow for multiple proposal refinements with Panel input prior to finalization of a policy. The commenter also suggested that CMS use this winter meeting as a vehicle to allow stakeholders to review and discuss updated cost data for HCPCS codes and APCs prior to the release of the data in the proposed rule.

Response: We appreciate the commenter's request to modify the Panel meeting processes. However, the frequency of Panel meetings is outside the scope of the proposed rule; meetings are generally announced through either a separate Federal Register notice or a subregulatory channel such as the CMS Web site, or both.

F. Public Comments Received on the CY 2017 OPPS/ASC Final Rule With Comment Period

We received 39 timely pieces of correspondence on the CY 2017 OPPS/ASC final rule with comment period that appeared in the Federal Register on November 14, 2016 (81 FR 79562), some of which contained comments on the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes (identified with comment indicator “NI” in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that final rule), the potential limitation on clinical service line expansion or volume of service increases by nonexcepted off-campus provider-based departments, and the Medicare Physician Fee Schedule (MPFS) payment rates for nonexcepted items and services furnished and billed by nonexcepted off-campus provider-based departments of hospitals. Summaries of the public comments are set forth in the CY 2018 proposed rule and this final rule with comment period under the appropriate subject matter headings. Summaries of public comments on the MPFS payment rates for nonexcepted items and services are set forth in the CY 2018 MPFS final rule with comment period.

II. Updates Affecting OPPS Payments

A. Recalibration of APC Relative Payment Weights

1. Database Construction

a. Database Source and Methodology

Section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the relative payment weights for APCs. In the April 7, 2000 OPPS final rule with comment period (65 FR 18482), we explained in detail how we calculated the relative payment weights that were implemented on August 1, 2000 for each APC group.

In the CY 2018 OPPS/ASC proposed rule (82 FR 33568), for CY 2018, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2018, and before January 1, 2019 (CY 2018), using the same basic methodology that we described in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79574 through 79595). For this final rule with comment period, for CY 2018, we recalibrated the APC relative payment weights for services furnished on or after January 1, 2018, and before January 1, 2019 (CY 2018), using the same basic methodology that we described in the CY 2017 OPPS/ASC final rule with comment period, using updated CY 2016 claims data. That is, we recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services, using the most recent available data to construct a database for calculating APC group weights.

For the purpose of recalibrating the APC relative payment weights for CY 2018, we began with approximately 163 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for HOPD services furnished on or after January 1, 2016, and before January 1, 2017, before applying our exclusionary criteria and other methodological adjustments. After the application of those data processing changes, we used approximately 86 million final action claims to develop the CY 2018 OPPS payment weights. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for this CY 2018 OPPS/ASC final rule with comment period on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

Addendum N to this final rule with comment period (which is available via the Internet on the CMS Web site) includes the list of bypass codes for CY 2018. The list of bypass codes contains codes that were reported on claims for services in CY 2016 and, therefore, includes codes that were in effect in CY 2016 and used for billing, but were deleted for CY 2017. We retained these deleted bypass codes on the CY 2018 bypass list because these codes existed in CY 2016 and were covered OPD services in that period, and CY 2016 claims data are used to calculate CY 2018 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo” single procedure claims for ratesetting purposes. “Overlap bypass codes” that are members of the multiple imaging composite APCs are identified by asterisks (*) in the third column of Addendum N to this final rule with comment period. HCPCS codes that we are adding for CY 2018 are identified by asterisks (*) in the fourth column of Addendum N.

Table 1 below contains the list of codes that we are removing from the CY 2018 bypass list.

Table 1—HCPCS Codes Removed From the CY 2018 Bypass List

HCPCS codeHCPCS short descriptor
77305Teletx isodose plan simple.
77310Teletx isodose plan intermed.
77315Teletx isodose plan complex.
77327Brachytx isodose calc intern.
Start Printed Page 52368
90801Psy dx interview.
90802Intac psy dx interview.
90804Psytx office 20-30 min.
90805Psytx off 20-30 min w/e&m.
90806Psytx off 45-50 min.
90807Psytx off 45-50 min w/e&m.
90808Psytx office 75-80 min.
90809Psytx off 75-80 w/e&m.
90810Intac psytx off 20-30 min.
90811Intac psytx 20-40 w/e&m.
90812Intac psytx off 45-50 min.
90857Intac group psytx.
90862Medication management.
95115Immunotherapy one injection.
95117Immunotherapy injections.
95144Antigen therapy services.
95147Antigen therapy services.
95165Antigen therapy services.
96402Chemo hormon antineopl sq/im.
99201Office/outpatient visit new.
99202Office/outpatient visit new.
99203Office/outpatient visit new.
99204Office/outpatient visit new.
99205Office/outpatient visit new.
99212Office/outpatient visit est.
99213Office/outpatient visit est.
99214Office/outpatient visit est.
C1300Hyperbaric oxygen.
G0340Robt lin-radsurg fractx 2-5.
G9141Influenza A H1N1, admin w cou.
M0064Visit for drug monitoring.

b. Calculation and Use of Cost-to-Charge Ratios (CCRs)

For CY 2018, in this CY 2018 OPPS/ASC final rule with comment period, as we proposed, we are continuing to use the hospital-specific overall ancillary and departmental cost-to-charge ratios (CCRs) to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk. To calculate the APC costs on which the CY 2018 APC payment rates are based, we calculated hospital-specific overall ancillary CCRs and hospital-specific departmental CCRs for each hospital for which we had CY 2016 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2015. For the final CY 2018 OPPS payment rates, we used the set of claims processed during CY 2016. We applied the hospital-specific CCR to the hospital's charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code. That crosswalk is available for review and continuous comment on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

To ensure the completeness of the revenue code-to-cost center crosswalk, we reviewed changes to the list of revenue codes for CY 2016 (the year of claims data we used to calculate the CY 2018 OPPS payment rates) and found that the National Uniform Billing Committee (NUBC) did not add any new revenue codes to the NUBC 2016 Data Specifications Manual.

In accordance with our longstanding policy, we calculate CCRs for the standard and nonstandard cost centers accepted by the electronic cost report database. In general, the most detailed level at which we calculate CCRs is the hospital-specific departmental level. For a discussion of the hospital-specific overall ancillary CCR calculation, we refer readers to the CY 2007 OPPS/ASC final rule with comment period (71 FR 67983 through 67985). The calculation of blood costs is a longstanding exception (since the CY 2005 OPPS) to this general methodology for calculation of CCRs used for converting charges to costs on each claim. This exception is discussed in detail in the CY 2007 OPPS/ASC final rule with comment period and discussed further in section II.A.2.a.(1) of this final rule with comment period.

In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840 through 74847), we finalized our policy of creating new cost centers and distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. However, in response to the CY 2014 OPPS/ASC proposed rule, commenters reported that some hospitals currently use an imprecise “square feet” allocation methodology for the costs of large moveable equipment like CT scan and MRI machines. They indicated that while CMS recommended using two alternative allocation methods, “direct assignment” or “dollar value,” as a more accurate methodology for directly assigning equipment costs, industry analysis suggested that approximately only half of the reported cost centers for CT scans and MRIs rely on these preferred methodologies. In response to concerns from commenters, we finalized a policy for the CY 2014 OPPS to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs associated with the CT and MRI APCs (78 FR 74847). Further, we finalized a transitional policy to estimate imaging APC relative payment weights using only CT and MRI cost data from providers that do not use “square feet” as the cost allocation statistic. We provided that this finalized policy would sunset in 4 years to provide a sufficient time for hospitals to transition to a more accurate cost allocation method and for the related data to be available for ratesetting purposes (78 FR 74847). Therefore, beginning CY 2018, with the sunset of the transition policy, we will estimate the imaging APC relative payment weight using cost data from all providers, regardless of the cost allocation statistic employed.

As we discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33570), some stakeholders have raised concerns regarding using claims from all providers to calculate CT and MRI CCRs, regardless of the cost allocations statistic employed (78 FR 74840 through 74847). Stakeholders noted that providers continue to use the “square feet” cost allocation method and that including claims from such providers would cause significant reductions in imaging APC payment rates.

Table 2 below demonstrates the relative effect on imaging APC payments after removing cost data for providers that report CT and MRI standard cost centers using “square feet” as the cost allocation method by extracting HCRIS data on Worksheet B-1. Table 3 below provides statistical values based on the CT and MRI standard cost center CCRs using the different cost allocation methods.

Table 2—Percentage Change in Estimate Cost for CT and MRI APCs When Excluding Claims From Provider Using “Square Feet” as the Cost Allocation Method

APCAPC descriptorPercentage change
5521Level 1 Imaging without Contrast−3.8
5522Level 2 Imaging without Contrast5.3
5523Level 3 Imaging without Contrast6.3
5524Level 4 Imaging without Contrast5.0
Start Printed Page 52369
5571Level 1 Imaging with Contrast9.0
5572Level 2 Imaging with Contrast7.0
5573Level 3 Imaging with Contrast2.1
8005CT and CTA without Contrast Composite14.4
8006CT and CTA with Contrast Composite11.9
8007MRI and MRA without Contrast Composite7.2
8008MRI and MRA with Contrast Composite7.5

Table 3—CCR Statistical Values Based on Use of Different Cost Allocation Methods

Cost allocation methodCTMRI
Median CCRMean CCRMedian CCRMean CCR
All Providers0.03870.05380.07950.1059
Square Feet Only0.03170.04880.07170.0968
Direct Assign0.05570.06500.10320.1222
Dollar Value0.04570.06030.08900.1178
Direct Assign and Dollar Value0.04570.06030.08930.1175

Our analysis showed that since the CY 2014 OPPS in which we established the transition policy, the number of valid MRI CCRs has increased by 17.5 percent to 2,177 providers and the number of valid CT CCRs has increased by 15.1 percent to 2,251 providers. However, in the proposed rule, we noted that, as shown in Table 2 above, nearly all imaging APCs would see an increase in payment rates for CY 2018 if claims from providers that report “square feet” cost allocation method were removed. This can be attributed to the generally lower CCR values from providers that use a cost allocation method of “square feet” as shown in Table 3 above. We stated in the proposed rule that we believe that the imaging CCRs that we have are appropriate for ratesetting. However, in response to provider concerns and to provide added flexibility for hospitals to improve their cost allocation methods, we proposed to extend the transition policy an additional year, for the CY 2018 OPPS.

For the CY 2018 OPPS, we proposed to continue to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs with the CT and MRI APCs identified in Table 2 above. Beginning in CY 2019, we would estimate the imaging APC relative payment weights using cost data from all providers, regardless of the cost allocation statistic employed.

Comment: Commenters supported CMS' proposal to extend the transition policy an additional year, for the CY 2018 OPPS. Several commenters recommended that CMS continue to remove claims from providers that use a cost allocation method of “square feet” to calculate CT and MRI CCRs in subsequent calendar years.

Response: We thank the commenters for their support. As we discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33570), our analysis shows that the number of valid MRI and CT CCRs has increased since we established the transition policy. We believe extending our transition policy for 1 additional year will provide hospitals adequate time to implement a more accurate cost allocation method for the costs of large moveable equipment like CT scan and MRI machines.

Comment: Some commenters recommended that CMS discontinue the use of CT and MRI cost centers for developing CT and MRI CCRs. One commenter believed that creating separate CT and MRI cost centers has resulted in a decline in geometric means for imaging APCs which can be attributed to costs being dropped out and changes in hospital charging practices.

Response: We are not convinced that the change in CT and MRI CCRs over the previous years is a result of costs not being reported accurately. The standard cost centers for CT scans and MRIs have been in effect since cost reporting periods beginning on or after May 1, 2010, on the revised Medicare cost report Form CMS-2552-10. Therefore, the cost reports that we used to develop the CY 2018 OPPS relative payment weights were the fifth or sixth opportunity for hospitals to submit cost reports with the CT and MRI cost centers. However, we will continue to monitor cost reporting practices with respect to CT scan and MRI cost centers as well as trends in CT and MRI CCRs.

After consideration of the public comments we received, we are finalizing our proposal to extend our transition policy for 1 additional year and continue to remove claims from providers that use a cost allocation method of “square feet” to calculate CT and MRI CCRs for the CY 2018 OPPS.

2. Data Development Process 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 2018. The Hospital OPPS page on the CMS Web site on which this final rule with comment period is posted (http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html) provides an accounting of claims used in the development of the payment rates. That accounting provides additional detail regarding the number of claims derived at each stage of the process. In addition, below in this section we discuss the file of claims that comprises the data set that is available upon payment of an administrative fee under a CMS data use agreement. The CMS Web site, http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html, includes information about obtaining the “OPPS Limited Data Set,” which now includes the additional variables previously available only in the OPPS Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue code payment amounts. Start Printed Page 52370This file is derived from the CY 2016 claims that were used to calculate the payment rates for the CY 2018 OPPS.

In the history of the OPPS, we have traditionally established the scaled relative weights on which payments are based using APC median costs, which is a process described in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). However, as discussed in more detail in section II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we finalized the use of geometric mean costs to calculate the relative weights on which the CY 2013 OPPS payment rates were based. While this policy changed the cost metric on which the relative payments are based, the data process in general remained the same, under the methodologies that we used to obtain appropriate claims data and accurate cost information in determining estimated service cost. For CY 2018, in this CY 2018 OPPS/ASC final rule with comment period, as we proposed, we are continuing to use geometric mean costs to calculate the relative weights on which the CY 2018 OPPS payment rates are based.

We used the methodology described in sections II.A.2.a. through II.A.2.c. of this final rule with comment period to calculate the costs we used to establish the relative payment weights used in calculating the OPPS payment rates for CY 2018 shown in Addenda A and B to this final rule with comment period (which are available via the Internet on the CMS Web site). 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.

For details of the claims process used in this final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for this CY 2018 OPPS/ASC final rule with comment period on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

a. Calculation of Single Procedure APC Criteria-Based Costs

(1) Blood and Blood Products

(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 2018 OPPS/ASC proposed rule (82 FR 33571), we proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. This methodology has been our standard ratesetting methodology for blood and blood products since CY 2005. It was developed in response to data analysis indicating that there was a significant difference in CCRs for those hospitals with and without blood-specific cost centers, and past public comments indicating that the former OPPS policy of defaulting to the overall hospital CCR for hospitals not reporting a blood-specific cost center often resulted in an underestimation of the true hospital costs for blood and blood products. Specifically, in order to address the differences in CCRs and to better reflect hospitals' costs, we proposed to continue to simulate blood CCRs for each hospital that does not report a blood cost center by calculating the ratio of the blood-specific CCRs to hospitals' overall CCRs for those hospitals that do report costs and charges for blood cost centers. We also proposed to apply this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports in order to simulate blood-specific CCRs for those hospitals. We proposed to calculate the costs upon which the proposed CY 2018 payment rates for blood and blood products are based using the actual blood-specific CCR for hospitals that reported costs and charges for a blood cost center and a hospital-specific, simulated blood-specific CCR for hospitals that did not report costs and charges for a blood cost center.

We continue to believe that the hospital-specific, simulated blood-specific CCR methodology better responds to the absence of a blood-specific CCR for a hospital than alternative methodologies, such as defaulting to the overall hospital CCR or applying an average blood-specific CCR across hospitals. Because this methodology takes into account the unique charging and cost accounting structure of each hospital, we believe that it yields more accurate estimated costs for these products. We continue to believe that this methodology in CY 2018 would result in costs for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and, therefore, for these blood products in general.

We note that, as discussed in section II.A.2.e. of the CYs 2014 through 2017 OPPS/ASC final rules with comment period (78 FR 74861 through 74910, 79 FR 66798 through 66810, 80 FR 70325 through 70339, and 81 FR 79580 through 79585, respectively), we defined a comprehensive APC (C-APC) as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. Under this policy, we include the costs of blood and blood products when calculating the overall costs of these C-APCs. In the CY 2018 OPPS/ASC proposed rule (82 FR 33571), we proposed to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs. Because the costs of blood and blood products would be reflected in the overall costs of the C-APCs (and, as a result, in the proposed payment rates of the C-APCs), we proposed to not make separate payments for blood and blood products when they appear on the same claims as services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66796)).

We also referred readers to Addendum B to the proposed rule (which is available via the Internet on the CMS Web site) for the proposed CY 2018 payment rates for blood and blood products (which are identified with status indicator “R”). For a more detailed discussion of the blood-specific CCR methodology, we refer readers to the CY 2005 OPPS proposed rule (69 FR 50524 through 50525). For a full history of OPPS payment for blood and blood products, we refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807 through 66810).

We invited public comments on our proposals.

Comment: Several commenters continued to support using the blood-specific CCR methodology to establish payment rates for blood and blood products, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. The commenters also supported using a blood-specific APC with a separate APC for each blood and blood product service code. The commenters viewed the blood-specific Start Printed Page 52371CCR methodology as the best current methodology to report the costs of blood and blood products.

Response: We appreciate the commenters' support.

Comment: Several commenters expressed concerns about reduced payment for several blood and blood products HCPCS codes, including HCPCS codes P9010 (Blood (whole), for transfusion, per unit), P9011 (Blood, split unit), P9012 (Cryoprecipitate, each unit), P9016 (Red blood cells, leukocytes reduced, each unit), P9023 (Plasma, pooled multiple donor, solvent/detergent treated, frozen, each unit), P9035 (Platelets, pheresis, leukocytes reduced, each unit), P9043 (Infusion, plasma protein fraction (human), 5%, 50 ml), P9048 (Infusion, plasma protein fraction (human), 5%, 250 ml), P9055 (Platelets, leukocytes reduced, cmv-negative, apheresis/pheresis, each unit), and P9060 (Fresh frozen plasma, donor retested, each unit). Commenters supported the higher payment rates for several HCPCS codes, including HCPCS codes P9019 (Platelets, each unit) and P9034 (Platelets, pheresis, each unit).

Response: We used claims data from CY 2016 and the same blood-specific CCR methodology we used in previous years to calculate these proposed payment rates and believe the changes in costs for the services mentioned by these commenters are a result of normal variations in the claims data.

Comment: Two commenters expressed concern that the proposed payment rate for HCPCS code P9070 (Plasma, pooled multiple donor, pathogen reduced, frozen, each unit) does not accurately reflect the cost of the blood product.

Response: HCPCS code P9070 was established on January 1, 2016, and for CY 2016 and CY 2017, we linked the payment of HCPCS code P9070 to a blood product, HCPCS code P9059 (Fresh frozen plasma between 8-24 hours of collection, each unit), that we believed would have a comparable cost to HCPCS code P9070. CY 2018 is the first year for which we have claims data that will allow us to directly determine the cost of HCPCS code P9070. In this case, the payment rate for HCPCS code P9070 in CY 2018 is lower than the CY 2017 payment rate. However, we believe the CY 2018 payment rate is appropriate because it is based on actual claims data for HCPCS code P9070 rather than for HCPCS code P9059.

Comment: Commenters requested that CMS immediately include the cost of newly implemented FDA blood safety measures for blood and blood products prior to receiving claims data that would contain the costs for the new safety measures.

Response: As stated earlier in this section, the OPPS covers 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. The cost of blood and blood products is determined using claims data and blood-specific CCRs from hospitals. To the extent that compliance with blood safety measures is included in hospital reporting of the cost of collecting, processing and storing blood and blood products, these costs would be reflected in the hospital rates. It is not possible to estimate the potential costs of new safety measures outside of claims data.

Comment: Several commenters resubmitted the comments they made in response to a solicitation for public comments in the CY 2017 OPPS/ASC proposed rule (81 FR 45617 through 45618) and summarized in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79577) on the current set of active HCPCS P-codes that describe blood products regarding how the code descriptors could be revised and updated (if necessary) to reflect the current blood products provided to hospital outpatients.

The commenters supported a thorough examination of the current set of HCPCS P-codes for blood products as a necessary undertaking because the HCPCS P-codes were created several years ago. Several commenters recommended that CMS convene a stakeholder group that includes representatives of hospitals, blood banks, the American Red Cross, and others to discuss a framework to systematically review and revise the HCPCS P-codes for blood products. Commenters also suggested that CMS establish a “not otherwise classified (NOC)” code for blood products, which would allow hospitals to begin immediately billing for a new blood product that is not described by a specific HCPCS P-code. One commenter supported the use of broader descriptions for HCPCS P-codes when more granular language is no longer meaningful for differentiating between different types of blood and blood products, and where the costs and volume of the HCPCS P-codes are similar. Other commenters suggested specific modifications to the order, classification, and code descriptors of the blood and blood product HCPCS P-codes.

Response: We appreciate the commenters' detailed responses. The safety of the nation's blood supply continues to be among the highest priorities, and we will work with the commenters and other stakeholders to ensure that any future updates to the HCPCS P-codes will support our goal of maintaining the safety of the blood supply.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to establish payment rates for blood and blood products using our blood-specific CCR methodology. Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site) contains the final CY 2018 payment rates for blood and blood products (which are identified with status indicator “R”).

(b) Pathogen-Reduced Platelets and Rapid Bacterial Testing for Platelets

In March 2016, the Food and Drug Administration (FDA) issued draft guidance for blood collection establishments and transfusion services entitled “Bacterial Risk Control Strategies for Blood Collection Establishments and Transfusion Services to Enhance the Safety and Availability of Platelets for Transfusion” (available at: https://www.fda.gov/​downloads/​BiologicsBloodVaccines/​GuidanceComplianceRegulatoryInformation/​Guidances/​Blood/​UCM425952.pdf). This draft guidance recommended, among other things, the use of rapid bacterial testing devices secondary to testing using a culture-based bacterial detection device or the implementation of pathogen-reduction technology for platelets to adequately control the risk of bacterial contamination of platelets.

In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70322), we established HCPCS code P9072 (Platelets, pheresis, pathogen reduced, each unit). The CMS HCPCS Workgroup later revised HCPCS code P9072 to include the use of pathogen-reduction technology or rapid bacterial testing. Specifically, the descriptor for this code was revised, effective January 1, 2017, to read as follows: HCPCS code P9072 (Platelets, pheresis, pathogen reduced or rapid bacterial tested, each unit). The payment rate for HCPCS code P9072 is based on a crosswalk to HCPCS code P9037 (Platelets, pheresis, leukocyte reduced, irradiated, each unit). We refer readers to the CY 2016 OPPS/ASC final rule with comment period for a further discussion of crosswalks for pathogen-reduced blood products (80 FR 70323).

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33571 and 33572), after the release of the CY 2017 OPPS/ASC final rule with comment Start Printed Page 52372period, several blood and blood product stakeholders expressed concerns about the revised code descriptor for HCPCS code P9072. The stakeholders believed that the revision to HCPCS code P9072 to describe both pathogen reduction and rapid bacterial testing was an inappropriate code descriptor. They stated that separate coding is needed to describe each service because each service is distinct. The stakeholders also noted that the code descriptor for HCPCS code P9072 results in hospitals receiving the same payment rate for platelets undergoing rapid bacterial testing that the hospitals receive for platelets treated with pathogen reduction technology, despite the fact that pathogen reduction is significantly more expensive than rapid bacterial testing.

After review of the concerns expressed by the blood and blood product stakeholders, the CMS HCPCS Workgroup deactivated HCPCS code P9072 for Medicare reporting and replaced the code with two new HCPCS codes effective July 1, 2017. Specifically, effective July 1, 2017, HCPCS code Q9988 (Platelets, pheresis, pathogen reduced, each unit) is used to report the use of pathogen-reduction technology and HCPCS code Q9987 (Pathogen(s) test for platelets) is used to report rapid bacterial testing or other pathogen tests for platelets, instead of HCPCS code P9072. We note that HCPCS code Q9987 should be reported to describe the test used for the detection of bacterial contamination in platelets as well as any other test that may be used to detect pathogen contamination. HCPCS code Q9987 should not be used for reporting donation testing for infectious agents such as viruses. The coding changes associated with these codes were published on the CMS HCPCS Quarterly Update Web site, effective July 2017, at: https://www.cms.gov/​Medicare/​Coding/​HCPCSReleaseCodeSets/​HCPCS-Quarterly-Update.html. In addition, for OPPS, we announced the new HCPCS codes that were effective July 1, 2017 through the July 2017 OPPS quarterly update Change Request (Transmittal 3783, Change Request 10122, dated May 26, 2017). We note that, effective July 1, 2017, HCPCS code Q9988 is assigned to APC 9536 (Pathogen Reduced Platelets), with a payment rate of $647.12, and HCPCS code Q9987 is assigned to New Technology APC 1493, with a payment rate of $25.50.

In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70322 through 70323), we reiterated that we calculate payment rates for blood and blood products using our blood-specific CCR methodology, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. Because HCPCS code P9072 was new for CY 2016, there were no claims data available on the charges and costs for this blood product upon which to apply our blood-specific CCR methodology. Therefore, we established an interim payment rates for this HCPCS code based on a crosswalk to existing blood product HCPCS code P9037, which we believed provided the best proxy for the costs of the new blood product. In addition, we stated that once we had claims data for HCPCS code P9072, we would calculate its payment rate using the claims data that should be available for the code beginning in CY 2018, which is our practice for other blood product HCPCS codes for which claims data have been available for 2 years.

We stated in the proposed rule that, although our standard practice for new codes involves using claims data to set payment rates once claims data become available, we are concerned that there may have been confusion among the provider community about the services that HCPCS code P9072 described. That is, as early as 2016, there were discussions about changing the descriptor for HCPCS code P9072 to include the phrase “or rapid bacterial tested”, which is a much less costly technology than pathogen reduction. In addition, as noted above, effective January 2017, the code descriptor for HCPCS code P9072 was, in fact, changed to also describe rapid bacterial testing of platelets and, effective July 1, 2017, the descriptor for the temporary successor code for HCPCS code P9072 (that is, HCPCS code Q9988) was changed again back to the original descriptor for HCPCS code P9072 that was in place for 2016.

Based on the ongoing discussions involving changes to the original HCPCS code P9072 established in CY 2016, we believe that claims for pathogen reduced platelets may potentially reflect certain claims for rapid bacterial testing of platelets. The geometric mean costs based on submitted claims for HCPCS code P9072 based on available claims data from CY 2016 is $491.53, which is a 24-percent reduction from the CY 2017 payment rate of $647.12. Because we believe that there may have been confusion related to ongoing discussions about changes to the original code descriptor for HCPCS code P9072, we believe it is appropriate to continue to crosswalk the payment amount for at least 1 additional year. Therefore, in the CY 2018 OPPS/ASC proposed rule (82 FR 33571 and 33572), we proposed for CY 2018 to determine the payment rate for HCPCS code Q9988 (the successor code to HCPCS code P9072) by continuing to use the payment rate that has been crosswalked from HCPCS code P9037 of $647.12.

In the CY 2018 OPPS/ASC proposed rule, we solicited public comments on the proposed APC and status indicator assignments for HCPCS codes Q9987 and Q9988 for the CY 2018 OPPS update. The proposed payment rates for HCPCS codes Q9987 and Q9988 were included in Addendum B to the proposed rule (which is available via the Internet on the CMS Web site).

Comment: Commenters expressed their appreciation to CMS for working collaboratively with the American Red Cross and other stakeholders in the blood banking community to respond to their concerns about HCPCS code P9072. The commenters supported the actions of CMS to deactivate HCPCS code P9072 and replace it with HCPCS codes Q9987 and Q9988 to have coding options that more accurately reflect available technologies. The commenters also appreciated that separate payment for each code was established in the OPPS and is proposed to continue in CY 2018.

Response: We appreciate the support for our actions in CY 2017 and our proposal for CY 2018.

Comment: One commenter requested that the description of HCPCS code Q9987 (Pathogen(s) test for platelets) be modified by adding the word “secondary” to clarify in the procedure code descriptor that HCPCS code Q9987 is intended to be used for secondary bacterial testing of platelets.

Response: We believe the guidance we have provided through the CY 2018 proposed rule (82 FR 33571 and 33572) and associated subregulatory guidance (Pub. 100-04 Medicare Claims Processing, Transmittal 3783, Change Request 10122) are sufficient for providers to understand how to appropriately report HCPCS code Q9987. We do not agree with the suggestion to modify the descriptor of HCPCS code Q9987, as we want the code to have the flexibility to be used to report new tests that may be developed in the future that are designed to identify pathogen contamination of platelets.

After consideration of the public comments we received, we are finalizing our CY 2018 proposal for reporting pathogen-reduced platelets and rapid bacterial testing for platelets. The only changes are to replace HCPCS code Q9987 (Pathogen(s) test for platelets) with HCPCS code P9100 Start Printed Page 52373(Pathogen(s) test for platelets) and to replace HCPCS code Q9988 (Platelets, pheresis, pathogen-reduced, each unit) with HCPCS code P9073 (Platelets, pheresis, pathogen-reduced, each unit). Details of the replacement of HCPCS codes Q9987 and Q9988 with HCPCS codes P9100 and P9073, respectively, are found in Table 4 below. The final payment rates for HCPCS codes P9100 and P9073 can be found in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site).

Table 4—Replacement Codes for HCPCS Codes Q9987 and Q9988 as of January 1, 2018

CY 2017 HCPCS codeCY 2018 HCPCS codeCY 2018 long descriptorFinal CY 2018 SIFinal CY 2018 APC
Q9987P9100Pathogen(s) test for plateletsS1493
Q9988P9073Platelets, pheresis, pathogen-reduced, each unitR9536

(2) Brachytherapy Sources

Section 1833(t)(2)(H) of the Act mandates the creation of additional groups of covered OPD services that classify devices of brachytherapy consisting of a seed or seeds (or radioactive source) (“brachytherapy sources”) separately from other services or groups of services. The statute provides certain criteria for the additional groups. For the history of OPPS payment for brachytherapy sources, we refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC final rule with comment period (77 FR 68240 through 68241). As we have stated in prior OPPS updates, we believe that adopting the general OPPS prospective payment methodology for brachytherapy sources is appropriate for a number of reasons (77 FR 68240). The general OPPS methodology uses costs based on claims data to set the relative payment weights for hospital outpatient services. This payment methodology results in more consistent, predictable, and equitable payment amounts per source across hospitals by averaging the extremely high and low values, in contrast to payment based on hospitals' charges adjusted to costs. We believe that the OPPS methodology, as opposed to payment based on hospitals' charges adjusted to cost, also would provide hospitals with incentives for efficiency in the provision of brachytherapy services to Medicare beneficiaries. Moreover, this approach is consistent with our payment methodology for the vast majority of items and services paid under the OPPS. We refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323 through 70325) for further discussion of the history of OPPS payment for brachytherapy sources.

In the CY 2018 OPPS/ASC proposed rule (82 FR 33572), for CY 2018, we proposed to use the costs derived from CY 2016 claims data to set the proposed CY 2018 payment rates for brachytherapy sources because CY 2016 is the same year of data we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2018 OPPS. 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 proposed rule. We also proposed to continue the other payment policies for brachytherapy sources that we finalized and first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We proposed to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 and C2699, at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per source basis (as opposed to, for example, a per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). 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 2018 payment rates for brachytherapy sources were included in Addendum B to the proposed rule (which is available via the Internet on the CMS Web site) and were identified with status indicator “U”. For CY 2018, we proposed to assign status indicator “E2” (Items and Services for Which Pricing Information and Claims Data Are Not Available) to HCPCS code C2645 (Brachytherapy planar, palladium-103, per square millimeter) because this code was not reported on CY 2016 claims. Therefore, we are unable to calculate a proposed payment rate based on the general OPPS ratesetting methodology described earlier. Although HCPCS code C2645 became effective January 1, 2016, and although we would expect that if a hospital furnished a brachytherapy source described by this code in CY 2016, HCPCS code C2645 should appear on the CY 2016 claims, there were no CY 2016 claims reporting this code available for the proposed rule. In addition, unlike our policy for new brachytherapy sources HCPCS codes, we did not consider external data to determine a proposed payment rate for HCPCS code C2645 for CY 2018. Therefore, we proposed to assign status indicator “E2” to HCPCS code C2645.

In addition, we assigned status indicator “E2” to HCPCS code C2644 (Brachytherapy, cesium-131 chloride, per square millimeter) because this code was not reported on any CY 2015 claims (that is, there were no Medicare claims submitted by any hospitals in 2015 that reported this HCPCS code). In our review of CY 2016 claims (which are used to set rates for CY 2018), we found that one hospital submitted one claim reporting HCPCS code C2644. Therefore, we proposed to assign status indicator “U” to HCPCS code C2644.

We invited public comments on our proposals.

Comment: One commenter suggested that CMS set the CY 2018 APC payment rate for HCPCS code C2636 (Brachytherapy linear, non-stranded, palladium-103, per 1mm) at $26.99 per millimeter.

Response: As noted in past rulemaking cycles and in the CY 2018 OPPS/ASC proposed rule (82 FR 33572), we believe that adopting the general OPPS prospective payment Start Printed Page 52374methodology for brachytherapy sources is consistent with our payment methodology for the vast majority of items and services paid under the OPPS. Further, while we 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, HCPCS code C2636 is neither new nor lacks claim information. HCPCS code C2636 became effective July 1, 2007. The final CY 2018 APC payment rate for HCPCS code C2636 is $27.08 based on data for the 8 claims we received for the CY 2018 OPPS standard ratesetting process and can be found in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site).

Comment: Some commenters suggested that HCPCS code C2645 (Brachytherapy, planar, palladium-103) had been incorrectly assigned status indicator “E2” (Items and Services for Which Pricing Information and Claims Data Are Not Available). These commenters stated that CMS has considered external data and other relevant information where no claims data exist for new HCPCS codes for new brachytherapy sources. For example, commenters included the following excerpt from the CY 2008 OPPS/ASC final rule with comment period regarding CMS' policy with respect to establishing a payment rate for HCPCS code C2637 (Brachytherapy non-stranded, ytterbium-169, per source) for which CMS lacked claims data: “if in public comments to the proposed rule or later in CYs 2007 or 2008, we would receive relevant and reliable information on the hospital cost for ytterbium-169 and information that this source is being marketed, we could establish a prospective payment rate for the source in the CY 2008 final rule with comment period or in a quarterly OPPS update, respectively” (72 FR 66786).

In addition, commenters noted that, for CY 2016 and CY 2017, HCPCS code C2645 was assigned an OPPS status indicator of “U” (Brachytherapy Sources, Paid under OPPS; separate APC payment) and a payment rate of $4.69 per mm2 and that the payment rate was based upon external pricing data previously supplied by the developer of the brachytherapy source described by HCPCS code C2645. The developer of the brachytherapy source noted that there were no outpatient claims from CY 2016 for HCPCS code C2645 because all of the cases in CY 2016 that used the brachytherapy source were inpatient cases. However, the commenter noted its expectation that such source would begin to be used in the hospital outpatient department setting beginning approximately in mid-2018. This commenter noted that the “E2” status indicator would effectively render the outpatient payment rate as $0 for CY 2018. The commenter supplied external invoices to support maintaining the current payment rate of $4.69 per mm2.

Response: We note that the CY 2008 final rule with comment period preamble language that the commenters referenced to support their argument that external data have been used in the past was in reference to a brachytherapy source for which there appeared to have been erroneous claims submitted since the claims were from 2006, but the brachytherapy source did not come to market until 2007. This is distinguishable from the situation with HCPCS code C2645 which has been on the market since August 29, 2014 and had a code effective date of January 1, 2016. Nonetheless, as the commenters noted, there are no Medicare claims data available at this time. While this brachytherapy source is no longer “new,” the absence of even a single Medicare claim in the outpatient hospital data leads us to agree with the commenter that using an external source of data would be appropriate at this time. Accordingly, for CY 2018, we are assigning status indicator “U” to HCPCS code C2645 and are using external data (invoice prices) and other relevant information to establish the APC payment rate for HCPCS code C2645. Specifically, we are setting the payment rate at $4.69 per mm2, the same rate that was in effect for CYs 2016 and 2017.

After consideration of the public comments we received, we are finalizing our proposal to assign status indicator “U” to HCPCS code C2636 (Brachytherapy linear, non-stranded, palladium-103, per 1mm) and assigning an APC payment rate for HCPCS code C2636 at $27.08 based on the 8 claims we received for the CY 2018 OPPS standard ratesetting process. We also are finalizing our proposal to assign status indicator “U” to HCPCS code C2644 (Brachytherapy, cesium-131 chloride, per millicurie) and are modifying our proposal to assign status indicator “E2” to HCPCS code C2645 (Brachytherapy planar, palladium-103, per square millimeter) and instead adopting a status indicator of “U” for CY 2018. The final CY 2018 payment rates for brachytherapy sources can be found in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site) and are identified with status indicator “U”.

We continue to invite hospitals and other parties to submit recommendations to us for new codes to describe new brachytherapy sources. Such recommendations should be directed to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244. We will continue to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis.

b. Comprehensive APCs (C-APCs) for CY 2018

(1) Background

In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a comprehensive payment policy that packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. The policy was finalized in CY 2014, but the effective date was delayed until January 1, 2015, to allow additional time for further analysis, opportunity for public comment, and systems preparation. The comprehensive APC (C-APC) policy was implemented effective January 1, 2015, with modifications and clarifications in response to public comments received regarding specific provisions of the C-APC policy (79 FR 66798 through 66810).

A C-APC is defined as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. We established C-APCs as a category broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 (79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70332), we finalized 10 additional C-APCs to be paid under the existing C-APC payment policy and added one additional level to both the Orthopedic Surgery and Vascular Procedures clinical families. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584 through 79585), we finalized another 25C-APCs.

Under this 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 Start Printed Page 52375for all other items and services reported on the hospital outpatient claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a complete comprehensive service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services are packaged into the payments for the primary services. This results in a single prospective payment for each of the primary, comprehensive services based on the costs of all reported services at the claim level.

Services excluded from the C-APC policy under the OPPS include services that are not covered OPD services, services that cannot by statute be paid for under the OPPS, and services that are required by statute to be separately paid. This includes certain mammography and ambulance services that are not covered OPD services in accordance with section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also are required by statute to receive separate payment under section 1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which also require separate payment under section 1833(t)(6) of the Act; self-administered drugs (SADs) that are not otherwise packaged as supplies because they are not covered under Medicare Part B under section 1861(s)(2)(B) of the Act; and certain preventive services (78 FR 74865 and 79 FR 66800 through 66801). A list of services excluded from the C-APC policy is included in Addendum J to this final rule with comment period (which is available via the Internet on the CMS Web site).

The C-APC policy payment methodology set forth in the CY 2014 OPPS/ASC final rule with comment period for the C-APCs and modified and implemented beginning in CY 2015 is summarized as follows (78 FR 74887 and 79 FR 66800):

Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule with comment period, we define the C-APC payment policy as including all covered OPD services on a hospital outpatient claim reporting a primary service that is assigned to status indicator “J1”, excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS. Services and procedures described by HCPCS codes assigned to status indicator “J1” are assigned to C-APCs based on our usual APC assignment methodology by evaluating the geometric mean costs of the primary service claims to establish resource similarity and the clinical characteristics of each procedure to establish clinical similarity within each APC.

In the CY 2016 OPPS/ASC final rule with comment period, we expanded the C-APC payment methodology to qualifying extended assessment and management encounters through the “Comprehensive Observation Services” C-APC (C-APC 8011). Services within this APC are assigned status indicator “J2”. Specifically, we make a payment through C-APC 8011 for a claim that:

  • Does not contain a procedure described by a HCPCS code to which we have assigned status indicator “T” that is reported with a date of service on the same day or 1 day earlier than the date of service associated with services described by HCPCS code G0378;
  • Contains 8 or more units of services described by HCPCS code G0378 (Observation services, per hour);
  • Contains services provided on the same date of service or 1 day before the date of service for HCPCS code G0378 that are described by one of the following codes: HCPCS code G0379 (Direct referral of patient for hospital observation care) on the same date of service as HCPCS code G0378; CPT code 99281 (Emergency department visit for the evaluation and management of a patient (Level 1)); CPT code 99282 (Emergency department visit for the evaluation and management of a patient (Level 2)); CPT code 99283 (Emergency department visit for the evaluation and management of a patient (Level 3)); CPT code 99284 (Emergency department visit for the evaluation and management of a patient (Level 4)); CPT code 99285 (Emergency department visit for the evaluation and management of a patient (Level 5)) or HCPCS code G0380 (Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B emergency department visit (Level 2)); HCPCS code G0382 (Type B emergency department visit (Level 3)); HCPCS code G0383 (Type B emergency department visit (Level 4)); HCPCS code G0384 (Type B emergency department visit (Level 5)); CPT code 99291 (Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient); and
  • Does not contain services described by a HCPCS code to which we have assigned status indicator “J1”.

The assignment of status indicator “J2” to a specific combination of services performed in combination with each other allows for all other OPPS payable services and items reported on the claim (excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS) to be deemed adjunctive services representing components of a comprehensive service and resulting in a single prospective payment for the comprehensive service based on the costs of all reported services on the claim (80 FR 70333 through 70336).

Services included under the C-APC payment packaging policy, that is, services that are typically adjunctive to the primary service and provided during the delivery of the comprehensive service, include diagnostic procedures, laboratory tests, and other diagnostic tests and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; uncoded services and supplies used during the service; durable medical equipment as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other components reported by HCPCS codes that represent services that are provided during the complete comprehensive service (78 FR 74865 and 79 FR 66800).

In addition, payment for hospital outpatient department services that are similar to therapy services and delivered either by therapists or nontherapists is included as part of the payment for the packaged complete comprehensive service. These services that are provided during the perioperative period are adjunctive services and are deemed 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. Therefore, the requirement for functional reporting under the regulations at 42 CFR 410.59(a)(4) and Start Printed Page 5237642 CFR 410.60(a)(4) does not apply. We refer readers to the July 2016 OPPS Change Request 9658 (Transmittal 3523) for further instructions on reporting these services in the context of a C-APC service.

Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and SADs, unless they function as packaged supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a description of our policy on SADs treated as hospital outpatient supplies, including lists of SADs that function as supplies and those that do not function as supplies.

We define each hospital outpatient claim reporting a single unit of a single primary service assigned to status indicator “J1” as a single “J1” unit procedure claim (78 FR 74871 and 79 FR 66801). Line item charges for services included on the C-APC claim are converted to line item costs, which are then summed to develop the estimated APC costs. These claims are then assigned one unit of the service with status indicator “J1” and later used to develop the geometric mean costs for the C-APC relative payment weights. (We note that we use the term “comprehensive” to describe the geometric mean cost of a claim reporting “J1” service(s) or the geometric mean cost of a C-APC, inclusive of all of the items and services included in the C-APC service payment bundle.) Charges for services that would otherwise be separately payable are added to the charges for the primary service. This process differs from our traditional cost accounting methodology only in that all such services on the claim are packaged (except certain services as described above). We apply our standard data trims, which exclude claims with extremely high primary units or extreme costs.

The comprehensive geometric mean costs are used to establish resource similarity and, along with clinical similarity, dictate the assignment of the primary services to the C-APCs. We establish a ranking of each primary service (single unit only) to be assigned to status indicator “J1” according to its comprehensive geometric mean costs. For the minority of claims reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned. If the reported “J1” services on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the sameC-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 originatingC-APC (the C-APC to which the designated primary service is first assigned) to the next higher payingC-APC in the same clinical family ofC-APCs. We apply this type of complexity adjustment when the paired code combination represents a complex, costly form or version of the primary service according to the following criteria:

  • Frequency of 25 or more claims reporting the code combination (frequency threshold); and
  • Violation of the 2 times rule in the originating C-APC (cost threshold).

These criteria identify paired code combinations that occur commonly and exhibit materially greater resource requirements than the primary service. The CY 2017 OPPS/ASC final rule with comment period (81 FR 79582) included a revision to the complexity adjustment eligibility criteria. Specifically, we finalized a policy to discontinue the requirement that a code combination (that qualifies for a complexity adjustment by satisfying the frequency and cost criteria thresholds described above) also not create a 2 times rule violation in the higher level or receiving APC.

After designating a single primary service for a claim, we evaluate that service in combination with each of the other procedure codes reported on the claim assigned to status indicator “J1” (or certain add-on codes) to determine if there are paired code combinations that meet the complexity adjustment criteria. For a new HCPCS code, we determine initial C-APC assignment and qualification for a complexity adjustment using the best available information, crosswalking the new HCPCS code to a predecessor code(s) when appropriate.

Once we have determined that a particular code combination of “J1” services (or combinations of “J1” services reported in conjunction with certain add-on codes) represents a complex version of the primary service because it is sufficiently costly, frequent, and a subset of the primary comprehensive service overall according to the criteria described above, we promote the claim including the complex version of the primary service as described by the code combination to the next higher costC-APC within the clinical family, unless the primary service is already assigned to the highest cost APC within the C-APC clinical family or assigned to the only C-APC in a clinical family. We do not create new APCs with a comprehensive geometric mean cost that is higher than the highest geometric mean cost (or only) C-APC in a clinical family just to accommodate potential complexity adjustments. Therefore, the highest payment for any claim including a code combination for services assigned to a C-APC would be the highest paying C-APC in the clinical family (79 FR 66802).

We package payment for all add-on codes into the payment for the C-APC. However, certain primary service add-on combinations may qualify for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70331), all add-on codes that can be appropriately reported in combination with a base code that describes a primary “J1” service are evaluated for a complexity adjustment.

To determine which combinations of primary service codes reported in conjunction with an add-on code may qualify for a complexity adjustment for CY 2018, in the CY 2018 OPPS/ASC proposed rule (82 FR 33575), we proposed to apply the frequency and cost criteria thresholds discussed above, testing claims reporting one unit of a single primary service assigned to status indicator “J1” and any number of units of a single add-on code for the primary J1 service. If the frequency and cost criteria thresholds for a complexity adjustment are met and reassignment to the next higher cost APC in the clinical family is appropriate (based on meeting the criteria outlined above), we make a Start Printed Page 52377complexity 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 listed the complexity adjustments proposed for “J1” and add-on code combinations for CY 2018, along with all of the other proposed complexity adjustments, in Addendum J to the proposed rule (which is available via the Internet on the CMS Web site).

Addendum J to the proposed rule included the cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to the proposed rule also contained summary cost statistics for each of the paired code combinations that describe a complex code combination that would qualify for a complexity adjustment and were proposed to be reassigned to the next higher cost C-APC within the clinical family. The combined statistics for all proposed reassigned complex code combinations were represented by an alphanumeric code with the first 4 digits of the designated primary service followed by a letter. For example, the proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), included all paired code combinations that were proposed to be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to the proposed rule allowed stakeholders the opportunity to better assess the impact associated with the proposed reassignment of claims with each of the paired code combinations eligible for a complexity adjustment.

Comment: Several commenters requested exceptions to the current complexity adjustment criteria of 25 or more claims reporting the code combination (frequency) and a violation of the 2 times rule in the originatingC-APC (cost) to allow claims with code combinations that do not currently meet these criteria to be paid at the next higher paying C-APC. The C-APC complexity adjustments requested by the commenters are listed in Table 5 below. We did not propose for claims with these code combinations to receive complexity adjustments because they failed to meet either the cost or frequency criteria.

Table 5—C-APC Complexity Adjustments Requested by the Commenters

Primary “J1” HCPCS codeSecondary “J1” HCPCS codePrimary APC assignmentRequested complexity adjusted APC assignment
20983 (Ablation therapy for reduction or eradication of 1 or more bone tumors (eg, metastasis including adjacent soft tissue when involved by tumor extension, percutaneous, including imaging guidance when performed; radio frequency)22513 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (eg, kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; thoracic)51145115
20983 (Ablation therapy for reduction or eradication of 1 or more bone tumors (eg, metastasis including adjacent soft tissue when involved by tumor extension, percutaneous, including imaging guidance when performed; radio frequency))22514 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (eg, kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; lumbar)51145115
28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with first metatarsal and medial cuneiform joint with arthrodesis, any method)28285 (Correction, hammertoe (eg, interphalangeal fusion, partial or total phalangectomy))51145115
28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with first metatarsal and medial cuneiform joint with arthrodesis, any method)28292 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with resection of proximal phalanx base, when performed, any method)51145115
28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint)28285 (Correction, hammertoe (eg, interphalangeal fusion, partial or total phalangectomy))51145115
61885 (Insertion or replacement of cranial nuerostimulator pulse generator or receiver, direct or inductive coupling; with connection to a single electrode array)61885 (Insertion or replacement of cranial nuerostimulator pulse generator or receiver, direct or inductive coupling; with connection to a single electrode array)54635464
28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint)28292 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with resection of proximal phalanx base, when performed, any method)51145115
52234 (Cystourethroscopy, with biopsy(s))C9738 * (Adjunctive blue light cystoscopy with fluorescent imaging agent (List separately in addition to code for primary procedure))53745375
52235 (Cystourethroscopy, with fulguration (including cryosurgery or laser surgery) of trigone, bladder neck, prostatic fossa, urethra, or periurethral glands)C9738 * (Adjunctive blue light cystoscopy with fluorescent imaging agent (List separately in addition to code for primary procedure))53745375
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52240 (Cystourethroscopy with fulgration (including cryosurgery or laser surgery) or treatment of MINOR (less than 0.5 cm) lesion(s) with or without biopsy)C9738 * (Adjunctive blue light cystoscopy with fluorescent imaging agent (List separately in addition to code for primary procedure))53755376
* HCPCS code C9738 was identified in the proposed rule as HCPCS code C97XX.

Other commenters requested various changes to the complexity adjustment criteria. One commenter requested that CMS amend the current cost criterion for a complexity adjustment to allow for code combinations that have qualified for a complexity adjustment in the previous year to qualify for a complexity adjustment for the subsequent year if the code combination is within 5 percent of the cost criterion for the subsequent year. Another commenter requested that CMS eliminate the criterion that the code combination must create a violation of the 2 times rule in the originating C-APC in order to qualify for a complexity adjustment.

Some commenters recommended that CMS create a complexity adjustment for endoscopic sinus surgery claims that include a drug or device code (C-code or a J-code), or more than two “J1” procedures. Other commenters requested that CMS revise its complexity adjustment methodology to account for the higher costs that essential hospitals incur when performing complex procedures and treating sicker patients.

Response: We appreciate these comments. However, 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 stated previously (81 FR 79582), we continue to 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 in order to receive payment in the next higher cost C-APC within the clinical family, are adequate to determine if a combination of procedures represents a complex, costly subset of the primary service. If a code combination meets these criteria, the combination receives payment at the next higher cost C-APC. Code combinations that do not meet these criteria receive the C-APC payment rate associated with the primary “J1” service.

A minimum of 25 claims is already very low 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. The complexity adjustment cost threshold compares the code combinations to the lowest cost significant procedure assigned to the APC. If the cost of the code combination does not exceed twice the cost of the lowest cost significant procedure within the APC, no complexity adjustment is made. Lowering or eliminating this threshold could remove so many claims from the accounting for the primary “J1” service that the geometric mean costs attributed to the primary procedure could be skewed.

Regarding the request for a code combination that qualified previously for a complexity adjustment to qualify for the subsequent year if the code combination is within 5 percent of the cost criterion for the subsequent year, we evaluate code combinations each year against our complexity adjustment criteria using the latest available data. We do not believe it is necessary to expand the ability for code combinations to meet the cost criterion in this manner.

We also do not believe that it is necessary to adjust the complexity adjustment criteria to allow claims that include a drug or device code, more than two “J1” procedures, or procedures performed at certain hospitals to qualify for a complexity adjustment. As mentioned earlier, we believe the current criteria are adequate to determine if a combination of procedures represents a complex, costly subset of the primary service.

Comment: Some commenters noted that there were certain code combinations that met the complexity adjustment criteria that were not included in Addendum J of the CY 2018 OPPS/ASC proposed rule. Specifically, commenters noted that the combinations of procedures described by the following codes were not included in Addendum J:

  • CPT code 22510 (Percutaneous vertebroplasty (bone biopsy included when performed), 1 vertebral body, unilateral or bilateral injection, inclusive of all imaging guidance; cervicothoracic) and CPT code 22512 (Percutaneous vertebroplasty (bone biopsy included when performed), 1 vertebral body, unilateral or bilateral injection, inclusive of all imaging guidance; each additional cervicothoracic or lumbosacral vertebral body) for multi-level vertebroplasty in the cervicothoracic region);
  • CPT code 22511 (Percutaneous vertebroplasty (bone biopsy included when performed), 1 vertebral body, unilateral or bilateral injection, inclusive of all imaging guidance; lumbosacral) and CPT code 22512 (Percutaneous vertebroplasty (bone biopsy included when performed), 1 vertebral body, unilateral or bilateral injection, inclusive of all imaging guidance; each additional cervicothoracic or lumbosacral vertebral body); and
  • CPT code 22511 (Percutaneous vertebroplasty (bone biopsy included when performed), 1 vertebral body, unilateral or bilateral injection, inclusive of all imaging guidance; lumbosacral) and CPT code 20982 (Ablation therapy for reduction or eradication of 1 or more bone tumors (e.g., metastasis), including adjacent soft tissue when involved by tumor extension, percutaneous, including imaging guidance when performed; radiofrequency).

Response: These code combinations were inadvertently excluded from Addendum J to the CY 2018 OPPS/ASC proposed rule. These code combinations and all other code combinations that qualify for complexity adjustments are included in Addendum J to this final rule with comment period.

Comment: One commenter stated that CMS should have included the following add-on CPT codes in the complexity adjustment evaluation:

  • CPT code 92978 (Endoluminal imaging of coronary vessel or graft using Start Printed Page 52379intravascular ultrasound (IVUS) or optical coherence tomography (OCT) during diagnostic evaluation and/or therapeutic intervention including imaging supervision, interpretation and report; initial vessel (List separately in addition to code for primary procedure);
  • CPT code 92979 (Endoluminal imaging of coronary vessel or graft using intravascular ultrasound (IVUS) or optical coherence tomography (OCT) during diagnostic evaluation and/or therapeutic intervention including imaging supervision, interpretation and report; each additional vessel (List separately in addition to code for primary procedure));
  • CPT code 93571 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; initial vessel (List separately in addition to code for primary procedure)); and
  • CPT code 93572 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; each additional vessel (List separately in addition to code for primary procedure)) in the complexity adjustment evaluation.

Response: We note that CPT codes 92978 and 93571 were both included in the complexity adjustment evaluation in Addendum J to the CY 2018 OPPS/ASC proposed rule. However, CPT codes 92979 and 93572 are not add-on codes to primary “J1” services. As stated in the CY 2018 OPPS/ASC proposed rule, to determine the code combinations that qualify for complexity adjustments, we apply the established frequency and cost criteria thresholds and tests 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 (82 FR 33575). Accordingly, because CPT codes 92979 and 93572 are not add-on codes for any primary “J1” services, it would not have been appropriate to include them in our complexity adjustment evaluation.

After consideration of the public comments we received, we are applying the complexity adjustment criteria as proposed. The finalized complexity adjustments for CY 2018 can be found in Addendum J to this final rule with comment period (which is available via the Internet on the CMS Web site).

(2) C-APCs for CY 2018

For CY 2018 and subsequent years, in the CY 2018 OPPS/ASC proposed rule (82 FR 33576), we proposed to continue to apply the C-APC payment policy methodology made effective in CY 2015 and updated with the implementation of status indicator “J2” in CY 2016. A discussion of the C-APC payment policy methodology can be found at 81 FR 79583.

As a result of our annual review of the services and APC assignments under the OPPS, we did not propose any additional C-APCs to be paid under the existing C-APC payment policy beginning in CY 2018. Table 4 of the proposed rule listed the proposed C-APCs for CY 2018, all of which were established in past rules. All C-APCs were displayed in Addendum J to the proposed rule (which is available via the Internet on the CMS Web site). Addendum J to the proposed rule also contained all of the data related to the C-APC payment policy methodology, including the list of proposed complexity adjustments and other information.

Comment: Several commenters supported the proposed C-APCs for CY 2018.

Response: We appreciate the commenters' support.

Comment: Several commenters noted that CPT code 67027 (Implantation of intravitreal drug delivery system (e.g., ganciclovir implant), includes concomitant removal of vitreous) is assigned to a single-procedure C-APC (C-APC 5494 (Level 4 Intraocular Procedures)) with status indicator “J1”. The commenters stated that the C-APC policy packages payment for adjunctive services into the payment for the primary “J1” procedure at the claim level, and that when the drug Retisert (described by HCPCS code J7311) is included on the claim with CPT code 62707, payment for the drug is packaged into the C-APC payment. The commenters noted that the costs of claims for the procedure, including the drug (approximately $18,433), were more than twice the proposed CY 2018 geometric mean cost for C-APC 5494 (approximately $9,134) and that, as such, this represents a violation of the 2 times rule. The commenters suggested that CMS address this issue by either separately paying for Retisert (described by HCPCS code J7311) or creating a unique APC for procedures with which HCPCS code J7311 may be billed.

Response: As stated in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79612), section 1833(t)(2) of the Act provides that items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest cost for an item or service in the APC group is more than 2 times greater than the lowest cost for an item or service within the same APC group (the 2 times rule). In accordance with section 1833(t)(2) of the Act and § 419.31 of the regulations, we annually review the items and services within an APC group to determine if there are any APC violations of the 2 times rule and whether there are any appropriate revisions to APC assignments that may be necessary or exceptions to be made. 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.

It is the cost of the primary item or service that drives assignment to an APC group. In this case, the primary service is described by CPT code 67027, which is the only CPT code assigned to C-APC 5494 (Level 4 Intraocular Procedures). The costs of drugs or other packaged ancillary items or services that may be used with a primary service are packaged into the costs of the primary service and are not separately paid. In this case, because CPT code 67027 is assigned to a C-APC, the costs of drugs, such as Retisert, and any other items or services that are billed with the “J1” service are packaged into the geometric mean cost for HCPCS code 67027 and are bundled into the C-APC payment. The geometric mean cost is based on reported costs for all hospitals paid under the OPPS; to the extent that Retisert or other items are billed with the primary service, those costs are also reflected in the cost of the primary service. Therefore, because the cost of the Retisert drug is packaged into the cost of CPT code 67027, assignment of HCPCS code 67027 to C-APC 5494 does not create a 2 times rule violation.

In addition, with regard to the packaging of the drug Retisert based on the C-APC policy, as stated in previous rules (78 FR 74868 through 74869 and 74909 and 79 FR 66800), items included in the packaged payment provided with the primary “J1” service 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. Therefore, we believe that HCPCS code J3711 is appropriately packaged, and we are not providing separate payment for the drug.

Comment: One commenter suggested that APC 5491 (Level 1 Intraocular Procedures) no longer be labeled a C-APC and instead be considered a traditional APC. The commenter noted that there was little cost difference for APC 5491 if it is considered a C-APC or a traditional APC and that no specific Start Printed Page 52380justification was given for making APC 5491 a C-APC. The commenter suggested that only higher level Intraocular Procedure APCs have enough complexity to suggest that they should be classified as C-APCs.

Response: We continue to believe that the procedures assigned to C-APC 5491 are appropriately paid through a comprehensive APC. As stated in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584), procedures assigned to C-APCs are primary services (mostly major surgical procedures) that are typically the focus of the hospital outpatient stay. Therefore, we believe that these procedures are appropriately assigned to a C-APC.

Comment: One commenter expressed concern that the proposal to continue to assign status indicator “J2” to CPT code 99291 (Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes) and to assign it to C-APC 8011 (Comprehensive Observation Services) when certain criteria are met would have negative effects on critical care (CPT codes 99291 and 99292 (Critical care, evaluation and management of the critically ill or critically injured patient; each additional 30 minutes) provided in the intensive care unit ICU). Specifically, the commenter was concerned that the proposal would impact payment for tests that were ordered and furnished in the emergency room when they are appropriately repeated in the ICU and urged CMS to move with caution, and provide transparency and impact tables for hospitals, in continuing C-APC 8011.

Response: We appreciate this comment and will continue to monitor the impact of this C-APC on critical care services. We note that in situations where a patient receives critical care services in the hospital outpatient setting and is subsequently transferred to the ICU as part of an appropriate hospital inpatient admission, payment for the services furnished in the hospital outpatient setting, including critical care services, may be bundled into the Part A hospital inpatient claim via the “Payment Window for Outpatient Services Treated as Inpatient Services (also known as the 3-day payment rule), when certain criteria are met. In addition, when a patient receiving critical care services in the hospital outpatient setting is transferred to the ICU but is not admitted to the hospital as an inpatient, payment for all eligible services is made through C-APC 8011, when certain criteria are met. We also note that CPT code 99292 is an add-on code which is packaged under the OPPS and is not one of the codes eligible to trigger payment through C-APC 8011.

After consideration of the public comments we received, we are finalizing the proposed C-APCs for CY 2018. Table 6 below lists the final C-APCs for CY 2018, all of which were established in past rules. All C-APCs are displayed in Addendum J to this final rule with comment period (which is available via the Internet on the CMS Web site). 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 2018.

Table 6—CY 2018 C-APCs

C-APCCY 2018 APC titleClinical family
5072Level 2 Excision/Biopsy/Incision and DrainageEBIDX
5073Level 3 Excision/Biopsy/Incision and DrainageEBIDX
5091Level 1 Breast/Lymphatic Surgery and Related ProceduresBREAS
5092Level 2 Breast/Lymphatic Surgery and Related ProceduresBREAS
5093Level 3 Breast/Lymphatic Surgery & Related ProceduresBREAS
5094Level 4 Breast/Lymphatic Surgery & Related ProceduresBREAS
5112Level 2 Musculoskeletal ProceduresORTHO
5113Level 3 Musculoskeletal ProceduresORTHO
5114Level 4 Musculoskeletal ProceduresORTHO
5115Level 5 Musculoskeletal ProceduresORTHO
5116Level 6 Musculoskeletal ProceduresORTHO
5153Level 3 Airway EndoscopyAENDO
5154Level 4 Airway EndoscopyAENDO
5155Level 5 Airway EndoscopyAENDO
5164Level 4 ENT ProceduresENTXX
5165Level 5 ENT ProceduresENTXX
5166Cochlear Implant ProcedureCOCHL
5191Level 1 Endovascular ProceduresVASCX
5192Level 2 Endovascular ProceduresVASCX
5193Level 3 Endovascular ProceduresVASCX
5194Level 4 Endovascular ProceduresVASCX
5200Implantation Wireless PA Pressure MonitorWPMXX
5211Level 1 Electrophysiologic ProceduresEPHYS
5212Level 2 Electrophysiologic ProceduresEPHYS
5213Level 3 Electrophysiologic ProceduresEPHYS
5222Level 2 Pacemaker and Similar ProceduresAICDP
5223Level 3 Pacemaker and Similar ProceduresAICDP
5224Level 4 Pacemaker and Similar ProceduresAICDP
5231Level 1 ICD and Similar ProceduresAICDP
5232Level 2 ICD and Similar ProceduresAICDP
5244Level 4 Blood Product Exchange and Related ServicesSCTXX
5302Level 2 Upper GI ProceduresGIXXX
5303Level 3 Upper GI ProceduresGIXXX
5313Level 3 Lower GI ProceduresGIXXX
5331Complex GI ProceduresGIXXX
5341Abdominal/Peritoneal/Biliary and Related ProceduresGIXXX
5361Level 1 Laparoscopy & Related ServicesLAPXX
5362Level 2 Laparoscopy & Related ServicesLAPXX
Start Printed Page 52381
5373Level 3 Urology & Related ServicesUROXX
5374Level 4 Urology & Related ServicesUROXX
5375Level 5 Urology & Related ServicesUROXX
5376Level 6 Urology & Related ServicesUROXX
5377Level 7 Urology & Related ServicesUROXX
5414Level 4 Gynecologic ProceduresGYNXX
5415Level 5 Gynecologic ProceduresGYNXX
5416Level 6 Gynecologic ProceduresGYNXX
5431Level 1 Nerve ProceduresNERVE
5432Level 2 Nerve ProceduresNERVE
5462Level 2 Neurostimulator & Related ProceduresNSTIM
5463Level 3 Neurostimulator & Related ProceduresNSTIM
5464Level 4 Neurostimulator & Related ProceduresNSTIM
5471Implantation of Drug Infusion DevicePUMPS
5491Level 1 Intraocular ProceduresINEYE
5492Level 2 Intraocular ProceduresINEYE
5493Level 3 Intraocular ProceduresINEYE
5494Level 4 Intraocular ProceduresINEYE
5495Level 5 Intraocular ProceduresINEYE
5503Level 3 Extraocular, Repair, and Plastic Eye ProceduresEXEYE
5504Level 4 Extraocular, Repair, and Plastic Eye ProceduresEXEYE
5627Level 7 Radiation TherapyRADTX
5881Ancillary Outpatient Services When Patient DiesN/A
8011Comprehensive Observation ServicesN/A
C-APC Clinical Family Descriptor Key: AENDO = Airway Endoscopy; AICDP = Automatic Implantable Cardiac Defibrillators, Pacemakers, and Related Devices; BREAS = Breast Surgery; COCHL = Cochlear Implant; EBIDX = Excision/Biopsy/Incision and Drainage; ENTXX = ENT Procedures; EPHYS = Cardiac Electrophysiology; EXEYE = Extraocular Ophthalmic Surgery; GIXXX = Gastrointestinal Procedures; GYNXX = Gynecologic Procedures; INEYE = Intraocular Surgery; LAPXX = Laparoscopic Procedures; NERVE = Nerve Procedures; NSTIM = Neurostimulators; ORTHO = Orthopedic Surgery; PUMPS = Implantable Drug Delivery Systems; RADTX = Radiation Oncology; SCTXX = Stem Cell Transplant; UROXX = Urologic Procedures; VASCX = Vascular Procedures; WPMXX = Wireless PA Pressure Monitor.

(3) Brachytherapy Insertion Procedures

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584), we finalized 25 new C-APCs. Some of the HCPCS codes assigned to the C-APCs established for CY 2017 described surgical procedures for inserting brachytherapy catheters/needles and other related brachytherapy procedures such as the insertion of tandem and/or ovoids and the insertion of Heyman capsules. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583), we stated that we received public comments which noted that claims that included several insertion codes for brachytherapy devices often did not also contain a brachytherapy treatment delivery code (CPT codes 77750 through 77799). The brachytherapy insertion codes that commenters asserted were not often billed with a brachytherapy treatment code included the following:

  • CPT code 57155 (Insertion of uterine tandem and/or vaginal ovoids for clinical brachytherapy);
  • CPT code 20555 (Placement of needles or catheters into muscle and/or soft tissue for subsequent interstitial radioelement application (at the time of or subsequent to the procedure));
  • CPT code 31643 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with placement of catheter(s) for intracavitary radioelement application);
  • CPT code 41019 (Placement of needles, catheters, or other device(s) into the head and/or neck region (percutaneous, transoral, or transnasal) for subsequent interstitial radioelement application);
  • CPT code 43241 (Esophagogastroduodenoscopy, flexible, transoral; with insertion of intraluminal tube catheter);
  • CPT code 55920 (Placement of needles or catheters into pelvic organs and/or genitalia (except prostate) for subsequent interstitial radioelement application); and
  • CPT code 58346 (Insertion of Heyman capsules for clinical brachytherapy).

The commenters concluded that brachytherapy delivery charges are being underrepresented in ratesetting under the C-APC methodology because a correctly coded claim should typically include an insertion and treatment delivery code combination. The commenters stated that the insertion procedure and brachytherapy treatment delivery generally occur on the same day or within the same week and therefore the services should appear on a claim together. In the CY 2017 OPPS/ASC final rule with comment period, we indicated that we would not exclude claims from the CY 2017 ratesetting calculation because we generally do not remove claims from the claims accounting when stakeholders believe that hospitals included incorrect information on some claims (81 FR 79583). However, we stated that we would examine the claims for the brachytherapy insertion codes in question and determine if any future adjustment to the methodology (or possibly code edits) would be appropriate.

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33577 through 33578), we analyzed the claims that include brachytherapy insertion codes assigned to status indicator “J1” and that received payment through a C-APC, and we determined that several of these codes are frequently billed without an associated brachytherapy treatment code. As mentioned above, stakeholders have expressed concerns that using claims for ratesetting for brachytherapy insertion procedures that do not also include a brachytherapy treatment code may not capture all of the costs associated with the insertion procedure. To address this issue and base payment on claims for the most common clinical scenario, for CY 2018 and subsequent years, we indicated in the CY 2018 OPPS/ASC proposed rule Start Printed Page 52382(82 FR 33578) that we were establishing a code edit that requires a brachytherapy treatment code when a brachytherapy insertion code is billed.

As noted in section II.A.2.c. of the proposed rule and this final rule with comment period, we also proposed to delete composite APC 8001 (LDR Prostate Brachytherapy Composite) and assign HCPCS code 55875 (Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy) to status indicator “J1” and to provide payment for this procedure through the C-APC payment methodology, similar to the payment methodology for other surgical insertion procedures related to brachytherapy. Specifically, when HCPCS code 55875 is the primary service reported on a hospital outpatient claim, we proposed to package payments for all adjunctive services reported on the claim into the payment for HCPCS code 55875. We proposed to assign HCPCS code 55875 to C-APC 5375 (Level 5 Urology and Related Services). The code edit for claims with brachytherapy services described above that will be effective January 1, 2018, will require the brachytherapy application HCPCS code 77778 (Interstitial radiation source application; complex) to be included on the claim with the brachytherapy insertion procedure (HCPCS code 55875).

Comment: Several commenters opposed the implementation of a code edit that requires a brachytherapy treatment code when a brachytherapy insertion code is billed. These commenters noted that, in some cases, the insertion procedure and the brachytherapy treatment are performed on different days and reported on separate claims. The commenters also noted that the brachytherapy insertion procedure and radiation treatment delivery are not always performed in the same facility, in which case they would be on different claims. The commenters stated that this practice pattern is especially common in the treatment of breast cancer and related breast brachytherapy catheter codes.

Response: We appreciate the commenters' views. We intended to address the concerns raised by commenters in CY 2017 rulemaking regarding ratesetting for C-APCs for brachytherapy insertion procedures by establishing a code edit to require a brachytherapy treatment code when a brachytherapy insertion code is billed. This was largely based on information received from commenters last year, in which commenters had suggested that brachytherapy insertion procedures and brachytherapy radiation treatment are often performed on the same day or within the same week and are often billed on the same claim. However, based on comments received in response to the code edit, it appears that there may be some clinical scenarios where that is not the case. Accordingly, in light of the numerous comments opposing this code edit and the information provided by commenters that suggests that brachytherapy insertion and treatment services may be appropriately furnished on different dates and different claims, we have decided not to implement an edit which would require a brachytherapy treatment code when a brachytherapy insertion code is billed. As we have previously stated, we rely on hospitals to bill all HCPCS codes accurately in accordance with their code descriptors and CPT and CMS instructions, as applicable, and to report charges on claims and charges and costs on their Medicare hospital cost reports appropriately (77 FR 68324). We will continue to examine the issues involving ratesetting for brachytherapy insertion procedures assigned to C-APCs and welcome the public's input regarding alternative payment policies that could appropriately address the issue while maintaining the C-APC policy.

Comment: Some commenters requested that CMS discontinue the C-APC payment policy for all brachytherapy insertion codes identified in the CY 2018 OPPS/ASC proposed rule. These commenters expressed concerns that hospital billing practices for radiation oncology services are variable and inconsistent with the C-APC policy which packages services at the claim level. The commenters stated that, in some cases, needles or catheters are surgically placed prior to the brachytherapy treatment delivery, which consists of multiple fractions over several days or weeks and may be delivered at a different site of service. The commenters also requested that CMS continue the composite APC for Low Dose Rate Brachytherapy instead of assigning CPT code 55875 (Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy) to a C-APC (Level 5 Urology and Related Services). The commenters stated that CPT codes 55920 and 19298 should be assigned to a different C-APC if CMS maintained the C-APC payment policy for brachytherapy insertion procedures in CY 2018.

Response: We continue to believe that the C-APC payment policy is appropriately applied to brachytherapy insertion procedures, including the procedure described by CPT code 55875. These procedures, like other procedures assigned to C-APCs, are primary services (mostly major surgical procedures) that are typically the focus of the hospital outpatient stay. As mentioned previously, we welcome input on alternative payment policies to address concerns surrounding the variation in hospital billing practices for radiation oncology while maintaining the C-APC policy, and we will continue to monitor this issue. The APC assignments for CPT codes 55920 and 19298 are discussed in greater detail in section XII.D.2. of this final rule with comment period.

Comment: Some commenters requested that CMS continue to provide payment for the brachytherapy insertion procedures through the C-APC policy, but exclude all radiation oncology codes on the claim (defined as CPT codes 77261 through 77799) and make separate payment for the brachytherapy treatment delivery and related planning and preparation services in addition to the C-APC payment for the brachytherapy insertion procedures. These commenters stated that this was similar to the C-APC policy for stereotactic radiosurgery (SRS) treatment.

Response: The policy intent of C-APCs is to bundle payment for all services related and adjunctive to the primary “J1” procedure. We do not believe that providing separate payment for radiation oncology codes that are included on a claim with a brachytherapy insertion procedure assigned to status indicator “J1” is in accordance with the C-APC policy. With regard to the SRS treatment policy to pay separately for the planning and preparation procedures, as stated in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583), this policy is a temporary special exception to the C-APC packaging policy that packages all adjunctive services (with a few exceptions listed in Addendum J to this final rule with comment period).

After consideration of the public comments we received, we are not establishing a code edit that requires a brachytherapy treatment code when a brachytherapy insertion code is billed. We are finalizing our proposal to delete composite APC 8001 (LDR Prostate Brachytherapy Composite) and assign HCPCS code 55875 (Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy) to status indicator “J1” and to provide payment for this procedure through the Start Printed Page 52383C-APC payment methodology, similar to the payment methodology for other surgical insertion procedures related to brachytherapy.

(4) C-APC 5627 (Level 7 Radiation Therapy) Stereotactic Radiosurgery (SRS)

Stereotactic radiosurgery (SRS) is a type of radiation therapy that targets multiple beams of radiation to precisely deliver radiation to a brain tumor while sparing the surrounding normal tissue. SRS treatment can be delivered by Cobalt-60-based (also referred to as gamma knife) technology or robotic linear accelerator-based (LINAC)-based technology. As stated in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70336), section 634 of the American Taxpayer Relief Act (ATRA) of 2012 (Pub. L. 112-240) amended section 1833(t)(16) of the Act by adding a new subparagraph (D) to require that OPPS payments for Cobalt-60-based SRS be reduced to equal that of payments for LINAC-based SRS for covered OPD services furnished on or after April 1, 2013. Because section 1833(t)(16)(D) of the Act requires equal payment for SRS treatment delivered by Cobalt-60-based or LINAC-based technology, the two types of services involving SRS delivery instruments (which are described by HCPCS code 77371 (Radiation treatment delivery, stereotactic radiosurgery [SRS], complete course of treatment cranial lesion(s) consisting of 1 session; multi-source Cobalt 60-based) and HCPCS code 77372 (Linear accelerator-based)) are assigned to the same C-APC (C-APC 5627 Level 7 Radiation Therapy).

In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70336), we stated that we had identified differences in the billing patterns for SRS procedures delivered using Cobalt-60-based and LINAC-based technologies. In particular, our claims data analysis revealed that services involving SRS delivered by Cobalt-60-based technologies (as described by HCPCS code 77371) typically included SRS treatment planning services (for example, imaging studies, radiation treatment aids, and treatment planning) and the actual deliveries of SRS treatment on the same date of service and reported on the same claim. In contrast, claims data analysis results revealed that services involving SRS delivered by LINAC-based technologies (as described by HCPCS code 77372) frequently included services related to SRS treatment (for example, imaging studies, radiation treatment aids, and treatment planning) that were provided on different dates of service and reported on claims separate from the actual delivery of SRS treatment.

We stated in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70336) that the intent of the C-APC policy is to package payment for all services adjunctive to the primary “J1” procedure and that we believed that all essential planning and preparation services related to the SRS treatment are adjunctive to the SRS treatment delivery procedure. Therefore, payment for these adjunctive services should be packaged into the C-APC payment for the SRS treatment instead of reported on a different claim and paid separately. To identify services that are adjunctive to the primary SRS treatment described by HCPCS codes 77371 and 77372, but reported on a different claim, we established modifier “CP” which became effective in CY 2016 and required the use of the modifier for CY 2016 and CY 2017.

To ensure appropriate ratesetting for the SRS C-APC, we believed it was necessary to unbundle payment for the adjunctive services for CY 2016 and CY 2017. Therefore, we finalized a policy to change the payment for SRS treatment for the 10 SRS planning and preparation services identified in our claims data (HCPCS codes 70551, 70552, 70553, 77011, 77014, 77280, 77285, 77290, 77295, and 77336) that were reported differentially using HCPCS codes 77371 and 77372 both on the same claim as the SRS services and on claims 1 month prior to the delivery of SRS services. These codes were removed from the geometric mean cost calculations for C-APC 5627. In addition, for CY 2016 and CY 2017, we provided separate payment for the 10 planning and preparation services adjunctive to the delivery of the SRS treatment using either the Cobalt-60-based or LINAC-based technology, even when the planning service was included on the same claim as the primary “J1” SRS treatment service. The use of the modifier “CP” was not required to identify these 10 planning and preparation codes.

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33564 and 33465), the data collection period for SRS claims with modifier “CP” began on January 1, 2016 and concludes on December 31, 2017. Based on our analysis of preliminary data collected with modifier “CP”, we have identified some additional services that are adjunctive to the primary SRS treatment and reported on a different claim outside of the 10 SRS planning and preparation codes that were removed from the SRS C-APC costs calculations and paid separately.

However, the “CP” modifier has been used by a small number of providers since its establishment. In addition, our analysis showed that several of the HCPCS codes that were billed with modifier “CP” belonged to the group of 10 SRS planning and preparation codes that we pay separately and do not require the use of modifier “CP”. Also, some providers erroneously included the modifier when reporting the HCPCS code for the delivery of the LINAC-based SRS treatment. As stated above, the data collection period for SRS claims with modifier “CP” was set to conclude on December 31, 2017. Accordingly, for CY 2018, we are deleting this modifier and discontinuing its required use.

For CY 2018, we also proposed to continue to make separate payments for the 10 planning and preparation services adjunctive to the delivery of the SRS treatment using either the Cobalt-60-based or LINAC-based technology when furnished to a beneficiary within 1 month of the SRS treatment. The continued separate payment of these services will allow us to complete our analysis of the claims data including modifier “CP” from both CY 2016 and CY 2017 claims. As stated in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583), we will consider in the future whether repackaging all adjunctive services (planning, preparation, and imaging, among others) back into cranial single session SRS is appropriate.

We invited public comments on these proposals.

Comment: Commenters generally supported the proposal to continue to make separate payments for the planning and preparation services adjunctive to the delivery of the SRS treatment and requested that CMS continue to pay separately for these services in the future. Commenters also supported the deletion of modifier “CP”.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to make separate payments for the 10 planning and preparation services adjunctive to the delivery of the SRS treatment using either the Cobalt-60-based or LINAC-based technology when furnished to a beneficiary within 1 month of the SRS treatment.

(5) Complexity Adjustment for Blue Light Cystoscopy Procedures

As discussed in prior OPPS/ASC final rules with comment period, and most recently in the CY 2017 OPPS/ASC final Start Printed Page 52384rule with comment period (81 FR 79668), we continue to believe that Cysview® (hexaminolevulinate HCl) (described by HCPCS code C9275) is a drug that functions as a supply in a diagnostic test or procedure and is therefore packaged with payment for the primary procedure. In addition, as discussed in section II.A.2.b.(1) of the CY 2018 OPPS/ASC proposed rule and this final rule with comment period, drugs that are not eligible for pass-through payment are always packaged when billed with a comprehensive service. To maintain the integrity of the OPPS, we believe it is generally not appropriate to allow exceptions to our drug packaging policy or comprehensive APC policy that would result in separate payment for the drug based on the product's ASP+6 percent payment rate. While we did not propose in the CY 2018 proposed rule to pay separately for Cysview®, we have heard concerns from stakeholders that the payment for blue light cystoscopy procedures involving Cysview® may be creating a barrier to beneficiaries receiving access to reasonable and necessary care for which there may not be a clinically comparable alternative. Therefore, as we stated in the proposed rule, we revisited our payment policy for blue light cystoscopy procedures. As described in more detail below, we believe certain code combinations for blue light cystoscopy procedures should be eligible to qualify for a complexity adjustment, given the unique properties of the procedure and resource costs.

Traditionally, white light (or standard) cystoscopy, typically performed by urologists, has been the gold standard for diagnosing bladder cancer. Enhanced bladder cancer diagnostics, such as narrow band imaging or blue light cystoscopy, increase tumor detection in nonmuscle invasive bladder cancer over white light cystoscopy alone, thus enabling more precise tumor removal by the urologist. Blue light cystoscopy can only be performed after performance of white light cystoscopy. Because blue light cystoscopy requires specialized imaging equipment to view cellular uptake of the dye that is not otherwise used in white light cystoscopy procedures, some practitioners consider blue light cystoscopy to be a distinct and adjunctive procedure to white light cystoscopy. However, the current CPT coding structure for cystoscopy procedures does not identify blue light cystoscopy in the coding descriptions separate from white light cystoscopy. Therefore, the existing cystoscopy CPT codes do not distinguish cystoscopy procedures involving only white light cystoscopy from those involving both white and blue light cystoscopy, which require additional resources compared to white light cystoscopy alone.

As discussed in the CY 2018 OPPS/ASC proposed rule, after discussion with our clinical advisors (including a urologist), we believe that blue light cystoscopy represents an additional elective but distinguishable service as compared to white light cystoscopy that, in some cases, may allow greater detection of bladder tumors in beneficiaries relative to white light cystoscopy alone. Given the additional equipment, supplies, operating room time, and other resources required to perform blue light cystoscopy in addition to white light cystoscopy, for CY 2018, in the proposed rule, we proposed to create a new HCPCS C-code to describe blue light cystoscopy and to allow for a complexity adjustment to APC 5374 (Level 4 Urology and Related Services) for certain code combinations in APC 5373 (Level 3 Urology and Related Services). (In the proposed rule, we cited HCPCS code “C97XX” as a placeholder for the new code. However, for ease of reading, hereafter in this section, we refer to the replacement code HCPCS code C9738 (Adjunctive blue light cystoscopy with fluorescent imaging agent (List separately in addition to code for primary procedure)) instead of the placeholder code.) Specifically, to determine which code pair combinations of a procedure described by proposed new HCPCS code C9738 and a cystoscopy procedure would qualify for a complexity adjustment, we first crosswalked the costs of the procedure described by HCPCS code C9275 (Hexaminolevulinate hcl) to the procedure described by proposed new HCPCS code C9738 assigned status indicator “N”. Next, we identified the procedure codes used to describe white light cystoscopy of the bladder which include the following CPT codes and APC assignments:

  • APC 5372 (Level 2 Urology and Related Services)

□ CPT code 52000

  • APC 5373 (Level 3 Urology and Related Services)

□ CPT code 52204

□ CPT code 52214

□ CPT code 52224

  • APC 5374 (Level 4 Urology and Related Services)

□ CPT code 52234

□ CPT code 52235

  • APC 5375 (Level 5 Urology and Related Services)

□ CPT code 52240

Because APC 5372 is not a C-APC, cystoscopy procedures assigned to Level 2 Urology are not eligible for a complexity adjustment, and therefore, we did not analyze these codes to determine whether they met the criteria for this adjustment. We modeled the data to determine which code pair combinations exceed the claim frequency and cost threshold in APC 5373, APC 5374, and APC 5375, which are all C-APCs. In the proposed rule, we stated that the results of our analysis indicate that the code pair combination of procedures described by proposed new HCPCS code C9738 and cystoscopy procedures assigned to APC 5373 would be eligible for a complexity adjustment based on current criteria and cost data because they meet the frequency and cost criteria thresholds. Likewise, our results indicated that the combination of procedures described by proposed new HCPCS code C9738 and cystoscopy procedures assigned to APC 5374 and APC 5375 would not qualify for a complexity adjustment because they do not meet the frequency and cost criteria thresholds.

We indicated in the proposed rule that, under the C-APC policy, blue light cystoscopy would be packaged, but when performed with a cystoscopy procedure in APC 5373 and reported with proposed new HCPCS code C9738 in addition to the cystoscopy CPT code, there would be a complexity adjustment to the next higher level APC in the series, resulting in a higher payment than for the white light cystoscopy procedure alone. That is, if the code pair combination of proposed new HCPCS code C9738 with CPT code 52204, 52214, or 52224 is reported on a claim, the claim will qualify for payment reassignment from APC 5373 to APC 5374. We stated that we plan to track the utilization and the costs associated with white light/blue light cystoscopy procedure combinations that will receive a complexity adjustment.

We invited public comments on our CY 2018 proposal to allow for a complexity adjustment when a white light cystoscopy procedure followed by a blue light cystoscopy procedure is performed. In addition, we sought public comments on whether alternative procedures, such as narrow band imaging, may be disadvantaged by this proposed policy.

Comment: One commenter agreed that there are differences in resource utilization between cystoscopy procedures involving white light only and cystoscopy procedures involving both white light and blue light. However, the commenter recommended that a proposal to expand the Start Printed Page 52385cystoscopy CPT codes be submitted to the American Medical Association (AMA) to capture the resource distinction. The commenter stated that the use of CPT codes and HCPCS C-codes (for example, the proposed HCPCS code C9738) to capture cystoscopy procedures is duplicative, administratively burdensome, and can affect the quality of claims data.

Response: We appreciate the commenter's concerns. However, we proposed to establish this code based on programmatic need under the OPPS to accurately describe blue light cystoscopy procedures. Given that a CPT code that describes blue light cystoscopy with an optical imaging agent does not exist in the CY 2018 CPT code set published by the AMA, it is unclear to us why the commenter believes HCPCS code C9738 would be duplicative, administratively burdensome, or affect the quality of claims data. Moreover, it is the combination of two different procedures that trigger a complexity adjustment; therefore, two distinct CPT or HCPCS codes are necessary to effectuate a complexity adjustment. If the AMA establishes a CPT code that describes blue light cystoscopy with an optical imaging agent, we would consider recognizing that CPT code under the OPPS as a replacement for HCPCS code C9738.

Comment: A few commenters generally supported the proposal to allow for a complexity adjustment for blue light cystoscopy with Cysview procedures. Many commenters, including several commenters with experience utilizing blue light cystoscopy with Cysview, shared their views on how this procedure has positively affected patient care management. These commenters recommended that CMS apply a complexity adjustment to all blue light cystoscopy with Cysview procedures performed in HOPDs to improve utilization and beneficiary access to care. Alternatively, the commenters recommended that CMS pay separately for Cysview to allow access in both white light and blue light cystoscopies in HOPD and ASC settings or establish a payment methodology conceptually similar to the device-intensive payment procedure for ASCs. The commenters suggested that a “device-intensive like” payment for a cystoscopy procedure performed in the ASC would be set based on the service cost and the drug cost (as determined by the manufacturer-reported average sales price).

Response: We appreciate the commenters' support. In developing the blue light cystoscopy procedure complexity adjustment payment proposal, we considered the unique properties and resources required to perform blue light cystoscopy with Cysview. As described in the proposal, we approximated the costs for the additional resources required to perform blue light cystoscopy by crosswalking the costs associated with HCPCS code C9275 to HCPCS code C9738. We then applied the established complexity adjustment criteria to determine which cystoscopy procedures, when performed with blue light cystoscopy, would qualify for a complexity adjustment. For this final rule with comment period, we repeated the analysis to determine which code pair combinations of HCPCS code C9738 with a cystoscopy procedure CPT code satisfied the complexity adjustment criteria. Consistent with the proposed rule results, based on the updated final rule with comment period claims data, the code pair combination of HCPCS code C9738 with CPT code 52204, 52214, or 52224 each will qualify for a complexity adjusted payment from APC 5373 to APC 5374. Because APC 5372 is not a C-APC, cystoscopy procedures assigned to Level 2 Urology are not eligible for a complexity adjustment. Therefore, we did not analyze these codes to determine whether they were eligible for a complexity adjustment. Likewise, our analysis of the final rule claims data indicated that the combination of proposed HCPCS code C9738 and cystoscopy procedures assigned to APC 5374 and APC 5375 would not qualify for a complexity adjustment because they do not meet the frequency and cost criteria thresholds.

We did not propose and the commenters did not provide evidence to support waiving application of the complexity adjustment criteria and allowing for a complexity adjustment whenever a blue light cystoscopy procedure is performed with any white light cystoscopy procedure. To allow for a complexity adjustment under any circumstance would require a change to the complexity adjustment criteria, which we did not propose. Therefore, we are finalizing the blue light cystoscopy complexity adjustment proposal, without modification. In addition we are establishing HCPCS code C9738 (Adjunctive blue light cystoscopy with fluorescent imaging agent (List separately in addition to code for primary procedure)), which replaces proposed HCPCS code C97XX. For CY 2018, the code pair combination of HCPCS code C9738 with CPT code 52204, 52214, or 52224 will qualify for a complexity adjusted payment from APC 5373 to APC 5374.

With respect to the public comments on unpackaging Cysview to allow for separate payment in both the HOPD and ASC settings, as we stated in the background section for the proposal, we continue to believe that Cysview is a drug that functions as a supply in a diagnostic test or procedure and therefore is packaged with payment for the primary procedure. In the CY 2018 OPPS/ASC proposed rule, we did not propose to make any changes to the “drugs that function as a supply” packaging policy or make any corresponding proposals to pay separately for Cysview in the HOPD and ASC settings. Therefore, Cysview will remain packaged.

With respect to the recommendation that we establish a payment methodology for blue light cystoscopy with Cysview procedures conceptually similar to the ASC device intensive payment policy, we did not propose revisions to the ASC device-intensive procedure policy. In addition, it is unclear to us exactly how such a policy would work and to what precise procedures in addition to blue light cystoscopy it might apply. Further, we believe that the C-APC payment adequately reflects the average resources expended by hospitals as reflected in hospital claims data. In addition, for especially costly cases, we believe our proposed policy appropriately recognizes the additional costs of blue light cystoscopy with white light cystoscopy through the complexity adjustment. We will continue to analyze the data and evaluate whether refinements to the C-APC policy, including the complexity adjustment criteria, should be considered in future rulemaking.

Comment: A few commenters responded to the solicitation for public comments on whether an alternative procedure, such as narrow band imaging, would be disadvantaged by the blue light cystoscopy with Cysview complexity adjustment proposal. One commenter, the manufacturer of Cysview, requested that CMS not establish a complexity adjustment for narrow band imaging because this imaging does not require a drug, additional technology, or additional resource. The commenter stated that the equipment used in narrow band imaging cystoscopy procedures is not different than the equipment for white light cystoscopy and does not require more resource time, expense, or cost to the hospital because narrow band imaging technology is part of the standard equipment available for cystoscopic Start Printed Page 52386procedures. Another commenter, the developer of narrow band imaging, contended that the procedure shares many clinical and procedural similarities with blue light cystoscopy with Cysview procedures, and therefore narrow band imaging should be eligible for a complexity adjustment. In addition, the commenter expressed concern that a complexity adjustment for blue light cystoscopy with Cysview and not narrow band imaging would provide a financial incentive for providers to choose one technology over the other. However, the commenter did not provide cost information for narrow band imaging.

Response: We appreciate the commenters' responses. We do not believe that the information presented supports a complexity adjustment for narrow band imaging. The lack of cost information for narrow band imaging and the fact that narrow band imaging does not require use of a contrast agent (and, therefore, avoids the cost of contrast and the time associated with the administration of contrast) lead us to question whether the resource costs of narrow band imaging are the same as those of blue light cystoscopy with Cysview. For these reasons, we do not believe it is appropriate to modify the proposal to allow for a complexity adjustment when narrow band imaging is performed with white light cystoscopy.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to allow for a complexity adjustment when HCPCS code C9738 is reported on the same claim as CPT code 52204, 52214, or 52224. The result of billing any one of these three code pair combinations is a payment reassignment from APC 5373 to APC 5374.

(6) Analysis of C-APC Packaging Under the OPPS

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584), we accepted a recommendation made at the August 22, 2016 HOP Panel meeting to analyze the effects of C-APCs. The HOP panel recommendation did not elucidate specific concerns with the C-APC policy or provide detailed recommendations on particular aspects of the policy to analyze. Therefore, we took a broad approach in studying HCPCS codes and APCs subject to the C-APC policy to determine whether aberrant trends in the data existed. Overall, we observed no such aberrancies and believe that the C-APC policy is working as intended.

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33580), specifically, using OPPS claims data for the CY 2016 final rule with comment period, the CY 2017 final rule with comment period, and the CY 2018 proposed rule, which reflect an observation period of CY 2014 to CY 2016, we examined the effects of C-APCs and their impact on OPPS payments. We started with all hospital outpatient claims billed on the 13X claim-type and, from that, separately identified HCPCS codes and APCs that were subject to the comprehensive methodology in CYs 2015 and 2016 (that is, HCPCS codes or APCs assigned status indicator “J1” or “J2”). Next, we analyzed the claims to create a subset of claims that contain the HCPCS codes and APCs that were subject to the comprehensive methodology. Using the claims noted above, we analyzed claim frequency, line frequency, number of billing units, and the total OPPS payment between CYs 2014 and 2016 for each HCPCS code and APC that had been previously identified. In reviewing the cost statistics for HCPCS codes for procedures with status indicator “S”, “T”, or “V” in CY 2014 that were assigned to a C-APC in either CY 2015 or CY 2016, overall, we observed an increase in claim line frequency, units billed, and Medicare payment, which suggest that the C-APC payment policy did not adversely affect access to care or reduce payments to hospitals. Decreases in these cost statistics would suggest our comprehensive packaging logic is not working as intended and/or the C-APC payment rates were inadequate, resulting in lower volume due to migration of services to other settings or the cessation of providing these services. Likewise, because the cost statistics of major separately payable codes (that is, HCPCS codes with status indicator “S”, “T”, or “V”) that were packaged into a C-APC prospectively were consistent with the cost statistics of the codes packaged on the claim, in actuality, indicate that costs were appropriately redistributed, we believe the C-APC payment methodology is working as intended.

Comment: A few commenters appreciated CMS' analysis of C-APC packaging under the OPPS and urged CMS to continue to monitor the data and report on any changes in billing patterns or utilization for particular items or services.

Response: We appreciate the commenters' support. We will continue to monitor the impact of our C-APC policy on OPPS rate setting and evaluate if future adjustments are needed.

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 low dose rate (LDR) prostate brachytherapy, mental health services, and multiple imaging services. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for a full discussion of the development of the composite APC methodology (72 FR 66611 through 66614 and 66650 through 66652) and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) for more recent background.

In the CY 2018 OPPS/ASC proposed rule (82 FR 33580), for CY 2018 and subsequent years, we proposed to continue our composite APC payment policies for mental health services and multiple imaging services, as discussed below. As discussed in section II.A.2.b. of the proposed rule and this final rule with comment period, we proposed to assign CPT code 55875 (Transperineal placement of needs or catheters into prostate for interstitial radioelement application, with or without cystoscopy) a status indicator of “J1” and assign it to a C-APC. In conjunction with this proposal, we also proposed to delete the low dose rate (LDR) prostate brachytherapy composite APC for CY 2018 and subsequent years. We refer readers to section II.A.2.b. of the CY 2018 OPPS/ASC proposed rule and this final rule with comment period for our discussion on our low dose rate (LDR) prostate brachytherapy APC proposal for CY 2018 and subsequent years.Start Printed Page 52387

(1) Mental Health Services Composite APC

In the CY 2018 OPPS/ASC proposed rule (82 FR 33580), we proposed to continue our longstanding policy of limiting the aggregate payment for specified less resource-intensive mental health services furnished on the same date to the payment for a day of partial hospitalization services provided by a hospital, which we consider to be the most resource intensive of all outpatient mental health services. We refer readers to the April 7, 2000 OPPS final rule with comment period (65 FR 18452 through 18455) for the initial discussion of this longstanding policy and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74168) for more recent background.

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588 through 79589), we finalized a policy to combine the existing Level 1 and Level 2 hospital-based PHP APCs into a single hospital-based PHP APC and, thereby, discontinue APCs 5861 (Level 1 Partial Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level 2 Partial Hospitalization (4 or more services) for Hospital-Based PHPs) and replace them with APC 5863 (Partial Hospitalization (3 or more services per day)). For CY 2018, and subsequent years, we proposed that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be paid through composite APC 8010 (Mental Health Services Composite) for CY 2018. In addition, we proposed to set the payment rate for composite APC 8010 for CY 2018 at the same payment rate that we proposed for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the payment rate for composite APC 8010. Under this policy, the I/OCE would continue to determine whether to pay for these specified mental health services individually, or to make a single payment at the same payment rate established for APC 5863 for all of the specified mental health services furnished by the hospital on that single date of service. We stated that we continue to believe that the costs associated with administering a partial hospitalization program at a hospital represent the most resource intensive of all outpatient mental health services. Therefore, we do not believe that we should pay more for mental health services under the OPPS than the highest partial hospitalization per diem payment rate for hospitals.

We did not receive any public comments on these proposals. Therefore, we are finalizing our CY 2018 proposal, without modification, that when aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a date of service, based on the payment rates 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 for CY 2018. In addition, we are finalizing our CY 2018 proposal, without modification, to set the payment rate for composite APC 8010 for CY 2018 at the same payment rate that we established for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the payment rate for composite APC 8010.

(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008)

Effective January 1, 2009, we provide a single payment each time a hospital submits a claim for more than one imaging procedure within an imaging family on the same date of service, in order to reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session (73 FR 41448 through 41450). We utilize three imaging families based on imaging modality for purposes of this methodology: (1) Ultrasound; (2) computed tomography (CT) and computed tomographic angiography (CTA); and (3) magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes subject to the multiple imaging composite policy and their respective families are listed in Table 12 of the CY 2014 OPPS/ASC final rule with comment period (78 FR 74920 through 74924).

While there are three imaging families, there are five multiple imaging composite APCs due to the statutory requirement under section 1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging services provided with and without contrast. While the ultrasound procedures included under the policy do not involve contrast, both CT/CTA and MRI/MRA scans can be provided either with or without contrast. The five multiple imaging composite APCs established in CY 2009 are:

  • APC 8004 (Ultrasound Composite);
  • APC 8005 (CT and CTA without Contrast Composite);
  • APC 8006 (CT and CTA with Contrast Composite);
  • APC 8007 (MRI and MRA without Contrast Composite); and
  • APC 8008 (MRI and MRA with Contrast Composite).

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

We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service. The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569).

In the CY 2018 OPPS/ASC proposed rule (82 FR 33581), we proposed, for CY 2018 and subsequent years, to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology. We stated that we continue to believe that this policy would reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.

The proposed CY 2018 payment rates for the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) were based on proposed geometric mean costs calculated from a partial year of CY 2016 claims available for the CY 2018 OPPS/ASC proposed rule that qualified for composite payment under the current policy (that is, those claims reporting more than one procedure within the same family on a single date of service). To calculate the proposed geometric mean costs, we used the same methodology that we used to calculate the final geometric Start Printed Page 52388mean costs for these composite APCs since CY 2014, as described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging HCPCS codes referred to as “overlap bypass codes” that we removed from the bypass list for purposes of calculating the proposed multiple imaging composite APC geometric mean costs, in accordance with our established methodology as stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918), were identified by asterisks in Addendum N to the CY 2018 OPPS/ASC proposed rule (which is available via the Internet on the CMS Web site) and were discussed in more detail in section II.A.1.b. of the CY 2018 OPPS/ASC proposed rule.

For the CY 2018 OPPS/ASC proposed rule, we were able to identify approximately 634,918 “single session” claims out of an estimated 1.7 million potential claims for payment through composite APCs from our ratesetting claims data, which represents approximately 36 percent of all eligible claims, to calculate the proposed CY 2018 geometric mean costs for the multiple imaging composite APCs. Table 6 of the CY 2018 OPPS/ASC proposed rule listed the proposed HCPCS codes that would be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC proposed geometric mean costs for CY 2018.

Comment: One commenter supported the composite APC policy for imaging services and recommended that CMS pay composite imaging APCs separately when billed on a claim with a service that has been assigned a “J1” status indicator, that is, as a C-APC.

Response: We appreciate the commenter's support. Regarding the recommendation about paying for composite APCs separately when billed on a claim with a service that has been assigned a “J1” status indicator, procedures assigned to C-APCs are primary services that are typically the focus of the hospital outpatient stay. As discussed in section II.A.2.b. of this final rule with comment period, our C-APC policy packages payment for adjunctive and secondary items, services, and procedures, including diagnostic procedures, into the most costly procedure under the OPPS at the claim level. We believe that paying for composite APCs separately when billed with a service that has been assigned a “J1” status indicator would be in conflict with the intent of our C-APC policy and would not be appropriate.

After consideration of the public comments we received, we are finalizing our proposal to continue the use of multiple imaging composite APCs to pay for services providing more than one imaging procedure from the same family on the same date, without modification. Table 7 below lists the HCPCS codes that will be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC proposed geometric mean costs for CY 2018.

Table 7—OPPS Imaging Families and Multiple Imaging Procedure Composite APCs

CY 2018 APC 8004 (ultrasound composite)CY 2018 approximate APC geometric mean cost = $300
Family 1—Ultrasound
76700Us exam, abdom, complete.
76705Echo exam of abdomen.
76770Us exam abdo back wall, comp.
76776Us exam k transpl w/Doppler.
76831Echo exam, uterus.
76856Us exam, pelvic, complete.
76857Us exam, pelvic, limited.
CY 2018 APC 8005 (CT and CTA without contrast composite) *CY 2018 approximate APC geometric mean cost = $275
Family 2—CT and CTA with and without Contrast
70450Ct head/brain w/o dye.
70480Ct orbit/ear/fossa w/o dye.
70486Ct maxillofacial w/o dye.
70490Ct soft tissue neck w/o dye.
71250Ct thorax w/o dye.
72125Ct neck spine w/o dye.
72128Ct chest spine w/o dye.
72131Ct lumbar spine w/o dye.
72192Ct pelvis w/o dye.
73200Ct upper extremity w/o dye.
73700Ct lower extremity w/o dye.
74150Ct abdomen w/o dye.
74261Ct colonography, w/o dye.
74176Ct angio abd & pelvis.
CY 2018 APC 8006 (CT and CTA with contrast composite)CY 2018 approximate APC geometric mean cost = $501
70487Ct maxillofacial w/dye.
70460Ct head/brain w/dye.
70470Ct head/brain w/o & w/dye.
70481Ct orbit/ear/fossa w/dye.
70482Ct orbit/ear/fossa w/o & w/dye.
70488Ct maxillofacial w/o & w/dye.
70491Ct soft tissue neck w/dye.
70492Ct sft tsue nck w/o & w/dye.
70496Ct angiography, head.
70498Ct angiography, neck.
71260Ct thorax w/dye.
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71270Ct thorax w/o & w/dye.
71275Ct angiography, chest.
72126Ct neck spine w/dye.
72127Ct neck spine w/o & w/dye.
72129Ct chest spine w/dye.
72130Ct chest spine w/o & w/dye.
72132Ct lumbar spine w/dye.
72133Ct lumbar spine w/o & w/dye.
72191Ct angiograph pelv w/o & w/dye.
72193Ct pelvis w/dye.
72194Ct pelvis w/o & w/dye.
73201Ct upper extremity w/dye.
73202Ct uppr extremity w/o & w/dye.
73206Ct angio upr extrm w/o & w/dye.
73701Ct lower extremity w/dye.
73702Ct lwr extremity w/o & w/dye.
73706Ct angio lwr extr w/o & w/dye.
74160Ct abdomen w/dye.
74170Ct abdomen w/o & w/dye.
74175Ct angio abdom w/o & w/dye.
74262Ct colonography, w/dye.
75635Ct angio abdominal arteries.
74177Ct angio abd & pelv w/contrast.
74178Ct angio abd & pelv 1+ regns.
* If a “without contrast” CT or CTA procedure is performed during the same session as a “with contrast” CT or CTA procedure, the I/OCE assigns the procedure to APC 8006 rather than APC 8005.
CY 2018 APC 8007 (MRI and MRA without contrast composite) *CY 2018 approximate APC geometric mean cost = $556
Family 3—MRI and MRA with and without Contrast
70336Magnetic image, jaw joint.
70540Mri orbit/face/neck w/o dye.
70544Mr angiography head w/o dye.
70547Mr angiography neck w/o dye.
70551Mri brain w/o dye.
70554Fmri brain by tech.
71550Mri chest w/o dye.
72141Mri neck spine w/o dye.
72146Mri chest spine w/o dye.
72148Mri lumbar spine w/o dye.
72195Mri pelvis w/o dye.
73218Mri upper extremity w/o dye.
73221Mri joint upr extrem w/o dye.
73718Mri lower extremity w/o dye.
73721Mri jnt of lwr extre w/o dye.
74181Mri abdomen w/o dye.
75557Cardiac mri for morph.
75559Cardiac mri w/stress img.
C8901MRA w/o cont, abd.
C8904MRI w/o cont, breast, uni.
C8907MRI w/o cont, breast, bi.
C8910MRA w/o cont, chest.
C8913MRA w/o cont, lwr ext.
C8919MRA w/o cont, pelvis.
C8932MRA, w/o dye, spinal canal.
C8935MRA, w/o dye, upper extr
CY 2018 APC 8008 (MRI and MRA with contrast composite)CY 2018 approximate APC geometric mean cost = $871
70549Mr angiograph neck w/o & w/dye.
70542Mri orbit/face/neck w/dye.
70543Mri orbt/fac/nck w/o & w/dye.
70545Mr angiography head w/dye.
70546Mr angiograph head w/o & w/dye.
70547Mr angiography neck w/o dye.
70548Mr angiography neck w/dye.
70552Mri brain w/dye.
70553Mri brain w/o & w/dye.
71551Mri chest w/dye.
71552Mri chest w/o & w/dye.
72142Mri neck spine w/dye.
72147Mri chest spine w/dye.
72149Mri lumbar spine w/dye.
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72156Mri neck spine w/o & w/dye.
72157Mri chest spine w/o & w/dye.
72158Mri lumbar spine w/o & w/dye.
72196Mri pelvis w/dye.
72197Mri pelvis w/o & w/dye.
73219Mri upper extremity w/dye.
73220Mri uppr extremity w/o & w/dye.
73222Mri joint upr extrem w/dye.
73223Mri joint upr extr w/o & w/dye.
73719Mri lower extremity w/dye.
73720Mri lwr extremity w/o & w/dye.
73722Mri joint of lwr extr w/dye.
73723Mri joint lwr extr w/o & w/dye.
74182Mri abdomen w/dye.
74183Mri abdomen w/o & w/dye.
75561Cardiac mri for morph w/dye.
75563Card mri w/stress img & dye.
C8900MRA w/cont, abd.
C8902MRA w/o fol w/cont, abd.
C8903MRI w/cont, breast, uni.
C8905MRI w/o fol w/cont, brst, un.
C8906MRI w/cont, breast, bi.
C8908MRI w/o fol w/cont, breast.
C8909MRA w/cont, chest.
C8911MRA w/o fol w/cont, chest.
C8912MRA w/cont, lwr ext.
C8914MRA w/o fol w/cont, lwr ext.
C8918MRA w/cont, pelvis.
C8920MRA w/o fol w/cont, pelvis.
C8931MRA, w/dye, spinal canal.
C8933MRA, w/o&w/dye, spinal canal.
C8934MRA, w/dye, upper extremity.
C8936MRA, w/o&w/dye, upper extr.
* If a “without contrast” MRI or MRA procedure is performed during the same session as a “with contrast” MRI or MRA procedure, the I/OCE assigns the procedure to APC 8008 rather than APC 8007.

3. Changes to Packaged Items and Services

a. Background and Rationale for Packaging in the OPPS

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

Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. Finally, packaging may reduce the importance of refining service-specific payment because packaged payments include costs associated with higher cost cases requiring many ancillary items and services and lower cost cases requiring fewer ancillary items and services. Because packaging encourages efficiency and is an essential component of a prospective payment system, packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service has been a fundamental part of the OPPS since its implementation in August 2000. For an extensive discussion of the history and background of the OPPS packaging policy, we refer readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70343), and the CY 2017 OPPS/ASC final rule with comment period (81 FR 79592). As we continue to develop larger payment groups that more broadly reflect services provided in an encounter or episode of care, we have expanded the OPPS packaging policies. Most, but not necessarily all, items and services currently packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching goal is to make OPPS payments for all services paid under the OPPS more consistent with those of a prospective payment system and less like those of a per-service fee schedule, which pays separately for each coded item. As a part of this effort, we have continued to examine the payment for items and services provided under the Start Printed Page 52391OPPS to determine which OPPS services can be packaged to further achieve the objective of advancing the OPPS toward a more prospective payment system.

For CY 2018, we examined the items and services currently provided under the OPPS, reviewing categories of integral, ancillary, supportive, dependent, or adjunctive items and services for which we believe payment would be appropriately packaged into payment of the primary service that they support. Specifically, we examined the HCPCS code definitions (including CPT code descriptors) and outpatient hospital billing patterns to determine whether there were categories of codes for which packaging would be appropriate according to existing OPPS packaging policies or a logical expansion of those existing OPPS packaging policies. In the CY 2018 OPPS/ASC proposed rule (82 FR 33584 through 33585), for CY 2018, we proposed to conditionally package the costs of selected newly identified ancillary services into payment with a primary service where we believe that the packaged item or service is integral, ancillary, supportive, dependent, or adjunctive to the provision of care that was reported by the primary service HCPCS code. Below we discuss the items and services that we proposed to package beginning in CY 2018.

b. Drug Administration Packaging Policy

(1) Background of Drug Administration Packaging Policy

In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74942 through 74945), we finalized a policy to unconditionally package procedures described by add-on codes. Procedures described by add-on codes represent an extension or continuation of a primary procedure, which means that they are typically supportive, dependent, or adjunctive to a primary service. The primary code defines the purpose and typical scope of the patient encounter and the add-on code describes incremental work, when the extent of the procedure encompasses a range rather than a single defined endpoint applicable to all patients. Given the dependent nature and adjunctive characteristics of procedures described by add-on codes and in light of longstanding OPPS packaging principles, we finalized a policy to unconditionally package add-on codes with the primary procedure. However, in response to stakeholder comments on the appropriateness of packaging drug administration add-on codes, we did not finalize our proposal to package drug administration add-on codes (78 FR 74945).

In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66819 through 66822), we conditionally packaged payment for ancillary services assigned to APCs with a geometric mean cost of less than or equal to $100 (prior to application of the conditional packaging status indicator). The ancillary services that we identified are primarily minor diagnostic tests and procedures that are often performed with a primary service, although there are instances where hospitals provide such services alone and without another primary service during the same encounter. Under this policy, we assigned the conditionally packaged services to status indicator “Q1”, which indicates that the service is separately payable when not billed on the same claim as a HCPCS code assigned status indicator “S”, “T”, or “V”. Exclusions to this ancillary service packaging policy include preventive services, certain psychiatric and counseling-related services, and certain low-cost drug administration services. In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66819), we indicated that we did not propose to package certain low-cost drug administration services because we were examining various alternative payment policies for drug administration, including the associated drug administration add-on codes.

(2) Packaging of Level 1 and Level 2 Drug Administration Services

As stated earlier, our overarching goal is to make OPPS payments for all services paid under the OPPS more consistent with those of a prospective payment system and less like those of a per-service fee schedule. To achieve this goal, it is important that we are consistent in our approach to packaging items and services under the established packaging categories. Although we excluded packaging of low-cost drug administration services from the ancillary services packaging policy in the CY 2015 rulemaking, separate payment for drug administration services is an example of inconsistent application of our packaging policy where we are continuing to pay separately for a service, regardless of cost and performance with another service. Given the frequency of drug administration in hospital outpatient care, in the CY 2018 OPPS/ASC proposed rule, we stated that we believe it is appropriate for us to reconsider whether payment for drug administration services with a geometric mean cost of less than or equal to $100 (prior to application of the conditional packaging status indicator) should continue to be excluded from the ancillary services packaging policy.

As part of our review of CY 2016 claims data used for ratesetting in the CY 2018 OPPS/ASC proposed rule, we examined drug administration billing patterns and payment for drug administration services under the OPPS. Based on our analysis of CY 2016 claims data used for the CY 2018 proposed rule ratesetting, we found that the geometric mean cost for APC 5691 (Level 1 Drug Administration) is approximately $37 and the geometric mean cost for APC 5692 (Level 2 Drug Administration) is approximately $59. In addition, we observed that drug administration services in APC 5692 are frequently reported on the same claim with other separately payable services, such as an emergency department or clinic visit, while drug administration services in APC 5691 are sometimes reported with other separately payable services. Accordingly, Medicare data show that these drug administration services are currently being provided as part of another separately payable service for which two separate payments are made, and support that packaging these services, when they are reported with another separately payable service, is appropriate. Further, packaging for Levels 1 and 2 Drug Administration services is consistent with the ancillary packaging policy that was adopted in CY 2015, as noted earlier in this section. Therefore, given the low geometric mean costs of drug administration services in APC 5691 and APC 5692 as well as their associated billing patterns, we stated in the CY 2018 OPPS/ASC proposed rule that we believe that when these services are performed with another separately payable service, they should be packaged, but that they should be separately paid when performed alone. That is, we stated that we believe it is no longer necessary to exclude low-cost drug administration services from packaging under the ancillary services packaging policy adopted in CY 2015.

In addition, as we examine payment differences between the hospital outpatient department and the physician office for similar services, under the OPPS, hospitals may receive separate payments for a clinic (office) visit and a drug administration service. In contrast, physicians are not eligible to receive payment for an office visit when a drug administration service is also provided. As a result, for furnishing the same drug administration service, hospitals receive an additional payment Start Printed Page 52392for which physician offices are not eligible. We stated in the proposed rule that we believe that conditional packaging of drug administration services would promote equitable payment between the physician office and the hospital outpatient hospital department. Accordingly, for CY 2018, we proposed to conditionally package payment for HCPCS codes describing drug administration services in APC 5691 and APC 5692, except for add-on codes and preventive services, when these services are performed with another service.

Because preventive services are excluded from our packaging policies, we proposed to continue to pay separately for Medicare Part B vaccine administration services. In addition, at that time, we did not propose to package any drug administration services in APC 5693 (Level 3 Drug Administration) or APC 5694 (Level 4 Drug Administration), but indicated our interest in public comments pertaining to whether payment for the services in these APCs may be appropriate for packaging. The proposed status indicators for drug administration services in APC 5691 and APC 5692 were listed in Table 7 of the proposed rule.

Comment: Numerous commenters disagreed with CMS' proposal to conditionally package low-cost drug administration services assigned to APC 5691 and APC 5692. The commonly cited concerns among the commenters who opposed the proposal were as follows:

  • Low-cost drug administration services are dissimilar from other low cost ancillary services in that drug administration services are separate and distinct stand-alone services and not adjunctive, supportive, or dependent to a primary procedure.
  • The proposal would not promote equitable payment between the physician's office and the hospital outpatient department because, in accordance with CMS guidelines, there are clinical circumstances where a physician may receive payment for both a drug administration service and an office visit.
  • Because all drugs are separately payable in the physician's office, unlike under the OPPS, the proposal, if implemented, would exacerbate differences in payment between the hospital outpatient department and the physician office setting. Commenters expressed doubt that the full cost of a packaged drug administration service or drug would be appropriately and accurately reflected in the payment for another separately payable procedure.
  • Packaging drug administration services with other services could result in hospitals scheduling patients for multiple visits, thereby reducing access to care and quality of care.
  • Further analysis of the impact packaging drug administration services would have on APCs should be conducted prior to making a policy change.
  • In general, packaging discourages full reporting of hospital costs, which impacts the accuracy of cost data that are used to calculate OPPS payment rates.

In addition, at the summer 2017 meeting of the HOP Panel, the HOP Panel recommended that CMS not implement its proposal to package drug administration services described under APC 5691 (Level 1 Drug Administration) and APC 5692 (Level 2 Drug Administration).

Response: We appreciate the detailed responses to our proposal and agree with the statements concerning the importance of payment accuracy to maintain access to care. However, we disagree that conditional packaging of low-level drug administration services, which are commonly furnished both in the hospital outpatient setting and in the physician office setting, would lead to payment inaccuracy for hospital rates for these services (which would include the packaged costs of these services) or to decreased access to drug administration services. As stated in the proposed rule, we believe it is no longer necessary to exclude low-cost drug administration services from packaging under the ancillary services packaging policy adopted in CY 2015, which is supported by our analysis of drug administration billing patterns. As described earlier in the introduction to this section, our analysis of CY 2016 OPPS claims data showed that low-cost drug administration services are currently being provided as part of another separately payable service for which two separate payments are made, and supported a policy that packaging low-cost drug administration services, when they are reported with another separately payable service, is appropriate. In response to the commenters who raised concerns regarding potential behavioral changes by providers as a consequence of the proposal, we will continue to monitor the data for changes in drug administration billing patterns.

Furthermore, regarding the comments that low-cost drug administration services are separate and distinct standalone services and not adjunctive, supportive, or dependent to a primary procedure, we disagree based on typical billing patterns for these services. As stated earlier in the introduction to this section, ancillary services are often performed with a primary service. Because these low-cost drug administration services are typically furnished with another primary service and are assigned to APCs with a geometric mean cost of less than or equal to $100 (prior to the application of the conditional packaging status indicator), we believe these services fall under the ancillary services packaging policy.

In addition, as stated in the proposed rule, we believe that conditional packaging of drug administration services will promote equitable payment between the physician office and the hospital outpatient department. However, we clarify that while typically physicians are not eligible to receive payment for an office visit when a drug administration service is also provided, we acknowledge that Medicare will pay for both services when the office visit CPT code is reported with Modifier 25 (Significant, separately identifiable evaluation and management services by the same physician on the day of the procedure).

With respect to data availability and general requests for further CMS analysis, we believe that the data made available to the public as part of the proposed rule were appropriate, clear, and sufficient for interested parties to conduct analyses to evaluate facility-specific impacts of the proposed policy. It is unclear what the commenters meant by requesting that CMS further analyze the effects of the proposal on APCs, as the commenters did not specify any particular analysis that CMS should conduct or data that CMS should provide that is not already available to the public. Because the OPPS is a budget neutral payment system, packaging a procedure does not remove its costs from ratesetting.

With respect to commenters' concerns on reporting of hospital costs for packaged services, we remind commenters that hospitals are expected to report all HCPCS codes that describe the services provided, regardless of whether or not those services are separately paid or their payment is packaged. The calculation of OPPS relative payment weights that reflect the relative resources required for HOPD services is the foundation of the OPPS. We rely on hospitals to bill all HCPCS codes accurately in accordance with their code descriptors and CPT and CMS instructions, as applicable, and to report charges on claims and charges and costs on their Medicare hospital cost report appropriately (77 FR 68324).Start Printed Page 52393

Therefore, for the reasons stated above, we believe that it is appropriate, and a logical expansion of our ancillary services policy, to finalize our proposal to unconditionally package low-cost drug administration services assigned to APCs 5691 and 5692. Accordingly, we are not accepting the HOP Panel's recommendation to not finalize our proposal.

Comment: One commenter stated that the packaging proposal is a logical expansion of the current ancillary packaging policy but recommended a 1-year implementation delay to allow providers time to assess the administrative and fiscal impact.

Response: We appreciate the commenter's support. Packaging is a longstanding payment principle under the OPPS and CMS has packaged a number of items and services through the years and makes OPPS data available to all interested parties on its Web site. Therefore, we do not see a reason to delay implementation of the policy. With each proposed and final rule release, CMS posts on its Web site various public use files (PUFs), including payment rates and cost statistics for applicable items and procedures. Stakeholders interested in a more comprehensive analysis of OPPS claims data used to derive the CY 2018 OPPS/ASC payment rates may purchase the “OPPS Limited Data Set” (LDS) that is available on the CMS Web site at: https://www.cms.gov/​Research-Statistics-Data-and-Systems/​Files-for-Order/​LimitedDataSets/​HospitalOPPS.html. We believe the information contained in the PUF and LDS files is sufficient to allow stakeholders to analyze the effects of our policies on their areas of interest. Therefore, we are finalizing our proposal to conditionally package low-cost drug administration services assigned to APC 5691 and APC 5692, effective January 1, 2018.

Comment: Some commenters believed that the proposal would conditionally package Medicare Part B vaccine administration. In addition, some commenters believed that if a hospital provides a low-cost drug administration service for a drug that is unconditionally packaged, CMS would make no payment to the hospital.

Response: We believe that some commenters may have misunderstood the proposal. Consistent with our existing policy to exclude preventive services from packaging, administration of Part B vaccines—influenza, pneumococcal, and hepatitis B—are exempt from packaging and will continue to be paid separately. With respect to payment for a conditionally packaged low-cost drug administration service and an unconditionally packaged drug, the drug administration service is separately payable when not billed on the same claim as a HCPCS code with status indicator “S”, “T”, or “V”. Payment for the threshold-packaged drug would be packaged with the payment for the highest paying separately payable procedure reported on the claim. For example, if a threshold-packaged drug, a low-cost drug administration service, and a clinic visit are reported on the same claim, payment for the drug and drug administration service would be packaged with the clinic visit payment.

In summary, after consideration of the public comments we received, we are finalizing, without modification, the proposed policy to conditionally package low-cost drug administration services assigned to APC 5691 and APC 5692.

Because preventive services are excluded from our packaging policies, we are continuing to pay separately for Medicare Part B vaccine administration services. In addition, at this time, we are not packaging any drug administration services assigned to APC 5693 (Level 3 Drug Administration) or APC 5694 (Level 4 Drug Administration). The status indicators for drug administration services in APC 5691 and APC 5692 for CY 2018 are listed in Table 8 below.

Table 8—CY 2018 Status Indicators for Drug Administration Services in Level 1 and Level 2 Drug Administration APCs

HCPCS codeShort descriptorCY 2018 status indicator
APC 5691—Level 1 Drug Administration
95115Immunotherapy one injectionQ1
95117Immunotherapy injectionsQ1
95144Antigen therapy servicesQ1
95145Antigen therapy servicesQ1
95146Antigen therapy servicesQ1
95165Antigen therapy servicesQ1
95170Antigen therapy servicesQ1
96361Hydrate iv infusion add-onS
96366Ther/proph/diag iv inf addonS
96370Sc ther infusion addl hrS
96375Tx/pro/dx inj new drug addonS
96377Application on-body injectorQ1
96379Ther/prop/diag inj/inf procQ1
96423Chemo ia infuse each addl hrS
96549Chemotherapy unspecifiedQ1
G0008Admin influenza virus vacS
G0009Admin pneumococcal vaccineS
G0010Admin hepatitis b vaccineS
APC 5692—Level 2 Drug Administration
90471Immunization adminQ1
90473Immune admin oral/nasalQ1
95147Antigen therapy servicesQ1
95148Antigen therapy servicesQ1
95149Antigen therapy servicesQ1
96367Tx/proph/dg addl seq iv infS
Start Printed Page 52394
96371Sc ther infusion reset pumpQ1
96372Ther/proph/diag inj sc/imQ1
96401Chemo anti-neopl sq/imQ1
96402Chemo hormon antineopl sq/imQ1
96405Chemo intralesional up to 7Q1
96411Chemo iv push addl drugS
96415Chemo iv infusion addl hrS
96417Chemo iv infus each addl seqS

(3) Discussion of Comment Solicitation Regarding Unconditionally Packaging Drug Administration Add-On Codes

With respect to drug administration add-on codes, as discussed in the CY 2014 OPPS/ASC proposed rule (78 FR 43573), we proposed to unconditionally package all drug administration services described by add-on codes. In response to the proposal, commenters objected to packaging drug administration add-on codes, which typically describe each additional hour of infusion or each additional intravenous push, among others, in addition to the initial drug administration service. The commenters believed that such a policy could disadvantage providers of longer drug administration services, which are often protocol-driven and are not necessarily dictated by the hospital, but by the characteristics of the specific drug or biological being administered to the patient. In response to these comments, we stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74945) that, given the frequency of drug administration services in the hospital outpatient department and their use in such a wide variety of different drug treatment protocols for various diseases in all types of hospitals, further study of the payment methodology for these services was warranted at that time. Therefore, we did not finalize our proposal to package the drug administration add-on codes in CY 2014. However, we stated we would continue to explore other payment options, including packaging and variations on packaging, in future years.

In the CY 2018 OPPS/ASC proposed rule, we did not propose to package drug administration add-on codes for CY 2018 because we wanted stakeholder input on a payment methodology that supports the principles of a prospective payment system while ensuring patient access to prolonged infusion services. Instead, we solicited public comment on whether conditionally or unconditionally packaging such codes would create access to care issues or have other unintended consequences. Specifically, we requested public comments on the following: (1) Whether we should conditionally or unconditionally package drug administration services add-on codes; (2) how we should consider or incorporate the varied clinical drug protocols that result in different infusion times into a drug administration service add-on code payment proposal; and (3) other recommendations on an encounter-based payment approach for drug administration services that are described by add-on codes when furnished in the hospital outpatient department setting.

Comment: Many commenters raised concerns about the appropriateness of packaging drug administration services add-on codes, given the variation in clinical treatment protocols. The commenters believed that packaging drug administration services add-on codes could create a barrier to access for drugs or biologicals with a long infusion time. Without explicit incremental payment for additional hours of infusion, some commenters suggested hospitals could discontinue offering the infusion. A few commenters suggested that CMS consider the creation of a drug administration C-APC for common drug administration encounters but did not provide details on what specific services should comprise the C-APC.

Response: We appreciate the comments we received on this topic and will take them into consideration for future rulemaking.

c. Analysis of Packaging of Pathology Services in the OPPS

At the August 22, 2016 HOP Panel meeting, a stakeholder expressed concern regarding conditional packaging of multiple pathology services. When multiple conditionally packaged services are billed on the same claim, the costs of the lowest paying services are bundled into the cost of the highest paying service and payment is made based on the highest single payable service. The stakeholder requested that CMS create a pathology composite APC to more appropriately pay for claims with only multiple pathology services and no other separately payable service such as a surgical procedure or a clinic visit. The HOP panel recommended that CMS develop a composite APC for pathology services when multiple pathology services are provided on a claim with no other payable services. The HOP Panel also requested that CMS take into consideration the stakeholder presentation comments made at the August 22, 2016 HOP Panel meeting regarding hospital pathology laboratories as CMS evaluates conditional packaging to determine whether an accommodation can be made. Specifically, the stakeholder expressed concern with conditional packaging of pathology services, particularly when payment is limited to the single highest paying code, regardless of the number of services provided or specimens tested.

In response to these HOP Panel requests and recommendation, we stated that we may consider the stakeholders' request for a pathology composite APC as well as additional composite APCs for future rulemaking (81 FR 79588). In light of these requests and recommendation, in development of the CY 2018 OPPS/ASC proposed rule, we evaluated and considered a pathology composite APC when multiple pathology services are performed and billed without a separately payable service on the same claim. To understand the frequency of billing multiple pathology services and no other separately payable codes on the same claim by hospital outpatient departments, we examined currently available claims data to identify the frequency distribution of pathology codes within the CPT code range 88300 Start Printed Page 52395to 88361. The claim frequency breakdown was displayed in Table 8 of the proposed rule (82 FR 33587).

Based on our analysis of claims data for the proposed rule, the majority of pathology only OPPS claims are reported with one pathology code. Therefore, as we stated in the CY 2018 OPPS/ASC proposed rule (82 FR 33588), we believe that it is neither a frequent occurrence nor a common occurrence for a provider to submit a claim for payment under the OPPS with multiple pathology services and no other separately payable service.

With regard to the HOP Panel's recommendation to develop a composite APC for pathology services when multiple pathology services are provided on a claim with no other payable services, we used CY 2016 claims data available for the CY 2018 OPPS/ASC proposed rule to model four hypothetical pathology composite APCs. That is, following our standard packaging methodology, we modeled four hypothetical pathology composite APCs based on the following clinical scenarios that were specifically requested by a stakeholder at the August 2016 HOP Panel meeting:

  • Hypothetical Composite APC A: Claims that contain 2-4 pathology units (CPT codes 88302 through 88309) with or without special stains (CPT codes 88312 through 88314);
  • Hypothetical Composite APC B: Claims that contain 5 or more pathology units (CPT codes 88302 through 88309) with or without special stains (CPT codes 88312 through 88314);
  • Hypothetical Composite APC C: Claims that contain 2-4 pathology units (CPT codes 88302 through 88309) with immunostains (CPT codes 88341, 88342, 88346, 88350, 88360, 88361); and
  • Hypothetical Composite APC D: Claims that contain 5 or more pathology units (CPT codes 88302 through 88309) with immunostains (CPT codes 88341, 88342, 88346, 88350, 88360, 88361).

In addition, for the proposed rule, we evaluated the volume of services and costs for each hypothetical composite. Results from modeling the four composite scenarios showed low claim volume, which indicates that the suggested pathology code combinations are infrequently billed by hospital outpatient departments and which may mean that these are not likely clinical scenarios in hospital outpatient departments. A summary of the results from our composite analysis was presented in Table 9 of the proposed rule (82 FR 33587). We refer readers to Addendum B to the CY 2018 OPPS/ASC proposed rule (which is available via the Internet on the CMS Web site) for the CPT code descriptors.

As we move toward larger payment bundles under the OPPS, the necessity of composite APCs diminishes. For example, in the CY 2018 OPPS/ASC proposed rule, we proposed to delete composite APC 8001 (LDR Prostate Brachytherapy Composite) and to provide payment for the component procedures through the C-APC payment methodology. Composite APCs were a precursor to C-APCs. In CY 2008, we implemented composite APCs to provide a single payment for groups of services that are typically performed together during a single clinical encounter and that result in the provision of a complete service (72 FR 66650 through 66652). Because a C-APC would treat all individually reported codes as representing components of the comprehensive service, all of the elements of the composite service are included in the C-APC payment. In addition, given the infrequent occurrence of multiple pathology services on the same claim without a separately payable service, we do not believe a composite APC is necessary or warranted.

Therefore, for CY 2018, we did not propose to create a pathology composite APC or additional composite APCs for stakeholder-requested services, such as X-ray services, respiratory services, cardiology services, or allergy testing services. However, we solicited public comments on our packaging policies, as discussed under section II.A.3.d. of this final rule with comment period.

We did not receive any public comments on our analysis of packaging of pathology services.

d. Summary of Public Comments and Our Responses Regarding Packaging of Items and Services Under the OPPS

As previously noted, packaging is an inherent principle of a prospective payment system. The OPPS, like other prospective payment systems, relies on the concept of averaging, where the payment may be more or less than the estimated costs of providing a service or package of services for a particular patient, but with the exception of outlier cases, is adequate to ensure access to appropriate care. Packaging and bundling payments for multiple interrelated services into a single payment create incentives for providers to furnish services in the most efficient way by enabling hospitals to manage their resources with maximum flexibility, thereby encouraging long-term cost containment. Decisions about packaging and bundling payment involve a balance between ensuring some separate payment for individual services or items while establishing incentives for efficiency through larger units of payment.

As the OPPS continues to move toward prospectively determined encounter-based payments and away from separate fee schedule-like payments, we continue to hear concerns from stakeholders that our packaging policies may be hampering patient access or resulting in other undesirable consequences. However, we have not observed significant fluctuations in our data that show a sharp decline of the volume of packaged items and services, nor have we heard from Medicare beneficiaries specifically about access issues or other concerns with packaged items and services. However, given that aggregate spending and utilization continue to increase for covered hospital outpatient services, it is unclear what, if any, adverse effect packaging has on beneficiary access to care. Specifically, in the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the framework of existing packaging categories, such as drugs that function as supplies in a surgical procedure or diagnostic test or procedure, we expressed interest in stakeholder feedback on common clinical scenarios involving currently packaged HCPCS codes for which stakeholders believe packaged payment is not appropriate under the OPPS. Likewise, outside the framework of existing packaging categories, we expressed interest in stakeholder feedback on common clinical scenarios involving separately payable HCPCS codes for which payment would be most appropriately packaged under the OPPS. In the proposed rule, we solicited public comments from a broad cross-section of stakeholders, including beneficiaries, patient advocates, hospital providers, clinicians, manufacturers, and other interested parties.

Comment: Commenters expressed a variety of views on packaging under the OPPS. The comments ranged from requests to unpackage most items and services that are either conditionally or unconditionally packaged under the OPPS, including drugs and devices, to specific requests to unpackage a specific drug or device.

Response: We appreciate the comments received and will review them as we continue to explore and evaluate packaging policies that apply under the OPPS and take them into consideration for future rulemaking.Start Printed Page 52396

4. Calculation of OPPS Scaled Payment Weights

We established a policy in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68283) of using geometric mean-based APC costs to calculate relative payment weights under the OPPS. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79594 through 79595), we applied this policy and calculated the relative payment weights for each APC for CY 2017 that were shown in Addenda A and B to that final rule with comment period (which were made available via the Internet on the CMS Web site) using the APC costs discussed in sections II.A.1. and II.A.2. of that final rule with comment period. For CY 2018, as we did for CY 2017, we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2018 using geometric mean-based APC costs (82 FR 33588).

For CY 2012 and CY 2013, outpatient clinic visits were assigned to one of five levels of clinic visit APCs, with APC 0606 representing a mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75036 through 75043), we finalized a policy that created alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient), representing any and all clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634 (Hospital Clinic Visits). We also finalized a policy to use CY 2012 claims data to develop the CY 2014 OPPS payment rates for HCPCS code G0463 based on the total geometric mean cost of the levels one through five CPT E/M codes for clinic visits previously recognized under the OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In addition, we finalized a policy to no longer recognize a distinction between new and established patient clinic visits.

For CY 2016, we deleted APC 0634 and reassigned the outpatient clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and Related Services) (80 FR 70351). In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), for CY 2018, as we did for CY 2017, we proposed to continue to standardize all of the relative payment weights to APC 5012. We stated that we believe that standardizing relative payment weights to the geometric mean of the APC to which HCPCS code G0463 is assigned maintains consistency in calculating unscaled weights that represent the cost of some of the most frequently provided OPPS services. For CY 2018, as we did for CY 2017, we proposed to assign APC 5012 a relative payment weight of 1.00 and to divide the geometric mean cost of each APC by the geometric mean cost for APC 5012 to derive the unscaled relative payment weight for each APC. The choice of the APC on which to standardize the relative payment weights does not affect payments made under the OPPS because we scale the weights for budget neutrality.

We did not receive any public comments on our proposal to use the geometric mean cost of APC 5012 to standardize relative payment weights for CY 2018. Therefore, we are finalizing our proposal and assigning APC 5012 the relative payment weight of 1.00, and using the relative payment weight for APC 5012 to derive the unscaled relative payment weight for each APC for CY 2018.

Section 1833(t)(9)(B) of the Act requires that APC reclassification and recalibration changes, wage index changes, and other adjustments be made in a budget neutral manner. Budget neutrality ensures that the estimated aggregate weight under the OPPS for CY 2018 is neither greater than nor less than the estimated aggregate weight that would have been made without the changes. To comply with this requirement concerning the APC changes, in the CY 2018 OPPS/ASC proposed rule (82 FR 33588), we proposed to compare the estimated aggregate weight using the CY 2017 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2018 unscaled relative payment weights.

For CY 2017, we multiplied the CY 2017 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2016 claims to calculate the total relative payment weight for each service. We then added together the total relative payment weight for each of these services in order to calculate an estimated aggregate weight for the year. For CY 2018, we proposed to apply the same process using the estimated CY 2018 unscaled relative payment weights rather than scaled relative payment weights. We proposed to calculate the weight scalar by dividing the CY 2017 estimated aggregate weight by the unscaled CY 2018 estimated aggregate weight.

For a detailed discussion of the weight scalar calculation, we refer readers to the OPPS claims accounting document available on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. Click on the CY 2018 OPPS final rule link and open the claims accounting document link at the bottom of the page.

We proposed to compare the estimated unscaled relative payment weights in CY 2018 to the estimated total relative payment weights in CY 2017 using CY 2016 claims data, holding all other components of the payment system constant to isolate changes in total weight. Based on this comparison, we proposed to adjust the calculated CY 2018 unscaled relative payment weights for purposes of budget neutrality. We proposed to adjust the estimated CY 2018 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.328 to ensure that the proposed CY 2018 relative payment weights are scaled to be budget neutral. The proposed CY 2018 relative payment weights listed in Addenda A and B to the proposed rule (which are available via the Internet on the CMS Web site) were scaled and incorporated the recalibration adjustments discussed in sections II.A.1. and II.A.2. of the proposed rule.

The final CY 2018 relative payment weights listed in Addenda A and B to the final rule with comment period (which are available via the Internet on the CMS Web site) were scaled and incorporate the recalibration adjustments discussed in sections II.A.1. and II.A.2. of this final rule with comment period.

Section 1833(t)(14) of the Act provides the payment rates for certain SCODs. Section 1833(t)(14)(H) of the Act provides that additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion factor, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9), but shall be taken into account for subsequent years. Therefore, the cost of those SCODs (as discussed in section V.B.2. of this final rule with comment period) is included in the budget neutrality calculations for the CY 2018 OPPS.

We did not receive any public comments on the proposed weight scalar calculation. Therefore, we are finalizing our proposal to use the calculation process described in the proposed rule, without modification, for CY 2018. Using updated final rule claims data, we are updating the estimated CY 2018 unscaled relative payment weights by multiplying them by a weight scalar of 1.4457 to ensure that the final CY 2018 relative payment weights are scaled to be budget neutral.

B. Conversion Factor Update

Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to update the Start Printed Page 52397conversion 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. As stated in the CY 2018 OPPS/ASC proposed rule, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19931), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2016 forecast of the FY 2018 market basket increase, the proposed FY 2018 IPPS market basket update was 2.9 percent. However, sections 1833(t)(3)(F) and 1833(t)(3)(G)(v) of the Act, as added by section 3401(i) of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148) and as amended by section 10319(g) of that law and further amended by section 1105(e) of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), provide adjustments to the OPD fee schedule increase factor for CY 2018.

Specifically, section 1833(t)(3)(F)(i) of the Act requires that, for 2012 and subsequent years, the OPD fee schedule increase factor under subparagraph (C)(iv) be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period) (the “MFP adjustment”). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through 51692), we finalized our methodology for calculating and applying the MFP adjustment, and then revised this methodology as discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509). In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19931 through 19932), the proposed MFP adjustment for FY 2018 was 0.4 percentage point.

In the CY 2018 OPPS/ASC proposed rule, we proposed that if more recent data became subsequently available after the publication of the proposed rule (for example, a more recent estimate of the market basket increase and the MFP adjustment), we would use such updated data, if appropriate, to determine the CY 2018 market basket update and the MFP adjustment, which are components in calculating the OPD fee schedule increase factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of the Act, in this CY 2018 OPPS/ASC final rule with comment period. Consistent with that proposal, and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38177), we applied the final FY 2018 market basket percentage increase (2.7 percent) and the final FY 2018 MFP adjustment (0.6 percent) to the OPD fee schedule increase factor for the CY 2018 OPPS.

In addition, section 1833(t)(3)(F)(ii) of the Act requires that, for each of years 2010 through 2019, the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act be reduced by the adjustment described in section 1833(t)(3)(G) of the Act. For CY 2018, section 1833(t)(3)(G)(v) of the Act provides a 0.75 percentage point reduction to the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act. Therefore, in accordance with sections 1833(t)(3)(F)(ii) and 1833(t)(3)(G)(v) of the Act, in the CY 2018 OPPS/ASC proposed rule, we proposed to apply a 0.75 percentage point reduction to the OPD fee schedule increase factor for CY 2018.

We note that section 1833(t)(3)(F) of the Act provides that application of this subparagraph may result in the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act being less than 0.0 percent for a year, and may result in OPPS payment rates being less than rates for the preceding year. As described in further detail below, we are applying an OPD fee schedule increase factor of 1.35 percent for the CY 2018 OPPS (which is 2.7 percent, the final estimate of the hospital inpatient market basket percentage increase, less the final 0.6 percentage point MFP adjustment, and less the 0.75 percentage point additional adjustment).

Hospitals that fail to meet the Hospital OQR Program reporting requirements are subject to an additional reduction of 2.0 percentage points from the OPD fee schedule increase factor adjustment to the conversion factor that would be used to calculate the OPPS payment rates for their services, as required by section 1833(t)(17) of the Act. For further discussion of the Hospital OQR Program, we refer readers to section XIII. of this final rule with comment period.

In the CY 2018 OPPS/ASC proposed rule, we proposed to amend 42 CFR 419.32(b)(1)(iv)(B) by adding a new paragraph (9) to reflect the requirement in section 1833(t)(3)(F)(i) of the Act that, for CY 2018, we reduce the OPD fee schedule increase factor by the MFP adjustment as determined by CMS, and to reflect the requirement in section 1833(t)(3)(G)(v) of the Act, as required by section 1833(t)(3)(F)(ii) of the Act, that we reduce the OPD fee schedule increase factor by an additional 0.75 percentage point for CY 2018.

We did not receive any public comments on our proposal. Therefore, we are implementing our proposal without modification.

To set the OPPS conversion factor for the CY 2018 OPPS/ASC proposed rule, we proposed to increase the CY 2017 conversion factor of $75.001 by 1.75 percent (82 FR 33589). In accordance with section 1833(t)(9)(B) of the Act, we proposed further to adjust the conversion factor for CY 2018 to ensure that any revisions made to the wage index and rural adjustment were made on a budget neutral basis. We proposed to calculate an overall budget neutrality factor of 0.9999 for wage index changes by comparing proposed total estimated payments from our simulation model using the proposed FY 2018 IPPS wage indexes to those payments using the FY 2017 IPPS wage indexes, as adopted on a calendar year basis for the OPPS.

For the CY 2018 OPPS/ASC proposed rule, 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.

For the CY 2018 OPPS/ASC proposed rule, we proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act, as discussed in section II.F. of this final rule with comment period. We proposed to calculate a CY 2018 budget neutrality adjustment factor for the cancer hospital payment adjustment by comparing estimated total CY 2018 payments under section 1833(t) of the Act, including the proposed CY 2018 cancer hospital payment adjustment, to estimated CY 2018 total payments using the CY 2017 final cancer hospital payment adjustment as required under section 1833(t)(18)(B) of the Act. The CY 2018 proposed estimated payments applying the proposed CY 2018 cancer hospital payment adjustment were less than estimated payments applying the CY 2017 final cancer hospital payment adjustment. Therefore, we proposed to apply a budget neutrality adjustment factor of 1.0003 to the conversion factor for the cancer hospital payment adjustment. In accordance with section 16002(b) of the 21st Century Cures Act, we stated in the proposed rule that we Start Printed Page 52398are applying a budget neutrality factor calculated as if the proposed cancer hospital adjustment target payment-to-cost ratio was 0.90, not the 0.89 target payment-to-cost ratio we are applying as stated in section II.F. of the proposed rule.

For the CY 2018 OPPS/ASC proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2018 would equal approximately $26.2 million, which represented 0.04 percent of total projected CY 2018 OPPS spending. Therefore, the proposed conversion factor would be adjusted by the difference between the 0.26 percent estimate of pass-through spending for CY 2017 and the 0.04 percent estimate of proposed pass-through spending for CY 2018, resulting in a proposed adjustment for CY 2018 of 0.22 percent. Proposed estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2018. We estimated for the proposed rule that outlier payments would be 1.04 percent of total OPPS payments in CY 2017; the 1.0 percent for proposed outlier payments in CY 2018 would constitute a 0.04 percent decrease in payment in CY 2018 relative to CY 2017.

For the CY 2018 OPPS/ASC proposed rule, we also proposed that hospitals that fail to meet the reporting requirements of the Hospital OQR Program would continue to be subject to a further reduction of 2.0 percentage points to the OPD fee schedule increase factor. For hospitals that fail to meet the requirements of the Hospital OQR Program, we proposed to make all other adjustments discussed above, but use a reduced OPD fee schedule update factor of −0.25 percent (that is, the proposed OPD fee schedule increase factor of 1.75 percent further reduced by 2.0 percentage points). This would result in a proposed reduced conversion factor for CY 2018 of $74.953 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.530 in the conversion factor relative to hospitals that met the requirements).

In summary, for CY 2018, we proposed to amend § 419.32(b)(1)(iv)(B) by adding a new paragraph (9) to reflect the reductions to the OPD fee schedule increase factor that are required for CY 2018 to satisfy the statutory requirements of sections 1833(t)(3)(F) and (t)(3)(G)(v) of the Act. We proposed to use a reduced conversion factor of $74.953 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.530 in the conversion factor relative to hospitals that met the requirements).

For CY 2018, we proposed to use a conversion factor of $76.483 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the proposed OPD fee schedule increase factor of 1.75 percent for CY 2018, the required proposed wage index budget neutrality adjustment of approximately 0.9999, the proposed cancer hospital payment adjustment of 1.0003, and the proposed adjustment of 0.22 percentage point of projected OPPS spending for the difference in the pass-through spending and outlier payments that resulted in a proposed conversion factor for CY 2018 of $76.483.

We invited public comments on these proposals. However, we did not receive any public comments. Therefore, we are finalizing these proposals without modification, as discussed below.

For CY 2018, we proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act, as discussed in section II.F. of this final rule with comment period. Based on the updated claims data for this final rule with comment period used in calculating the cancer hospital payment adjustment in section II.F. of this final rule with comment period, the target PCR for the cancer hospital payment adjustment, which was 0.91 for CY 2017, is 0.88 for CY 2018. Because we budget neutralize using the target PCR ratio prior to implementation of section 16002 (b) of the 21st Century Cures Act, we are applying a budget neutrality adjustment factor of 1.0008 to the conversion factor for the cancer hospital payment adjustment for CY 2018.

In the CY 2018 OPPS/ASC proposed rule (82 FR 33712), we estimated a 1.4 percent adjustment to nondrug OPPS payment rates as a result of the proposed payment adjustment to separately payable nonpass-through drugs purchased under the 340B Program. As part of that proposed policy, we noted that our adjustment in the final rule could potentially change as a result of changes such as updated data, modifications to the estimate methodology, and other factors. Applying the final payment policy for drugs purchased under the 340B Program, as described in section V.B.7. of this final rule with comment period, results in an estimated reduction of approximately $1.6 billion in separately paid OPPS drug payments. To ensure budget neutrality under the OPPS after applying this alternative payment methodology for drugs purchased under the 340B Program, we applied an offset of approximately $1.6 billion into the OPPS conversion factor, which results in a final adjustment of 1.0319 to the OPPS conversion factor.

As a result of these finalized policies, the OPD fee schedule increase factor for the CY 2018 OPPS is 1.35 percent (which is 2.7 percent, the estimate of the hospital inpatient market basket percentage increase, less the 0.6 percentage point MFP adjustment, and less the 0.75 percentage point additional adjustment). For CY 2018, we are using a conversion factor of $78.636 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 1.35 percent for CY 2018, the required wage index budget neutrality adjustment of approximately 0.9997, the cancer hospital payment adjustment of 1.0008, the adjustment for drugs purchased under the 340B Program of 1.0319, and the adjustment of 0.2 percentage point of projected OPPS spending for the difference in the pass-through spending and outlier payments that result in a conversion factor for CY 2018 of $78.636.

C. Wage Index Changes

Section 1833(t)(2)(D) of the Act requires the Secretary to determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion of the OPPS payment rate is called the OPPS labor-related share. Budget neutrality is discussed in section II.B. of this 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). In the CY 2018 OPPS/ASC proposed rule (82 FR 33590), we proposed to continue this policy for the CY 2018 OPPS. We refer readers to section II.H. 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 Start Printed Page 52399this proposal. Therefore, for the reasons discussed above and in the CY 2018 OPPS/ASC proposed rule (82 FR 33590), we are finalizing our proposal to continue this policy as discussed above for the CY 2018 OPPS 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 Web site), for estimating APC costs, we standardize 60 percent of estimated claims costs for geographic area wage variation using the same FY 2018 pre-reclassified wage index that the IPPS uses to standardize costs. This standardization process removes the effects of differences in area wage levels from the determination of a national unadjusted OPPS payment rate and copayment amount.

Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS April 7, 2000 final rule with comment period (65 FR 18495 and 18545)), the OPPS adopted the final fiscal year IPPS post-reclassified wage index as the calendar year wage index for adjusting the OPPS standard payment amounts for labor market differences. Therefore, the wage index that applies to a particular acute care, short-stay hospital under the IPPS also applies to that hospital under the OPPS. As initially explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we believe that using the IPPS wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index is updated annually.

The Affordable Care Act contained several provisions affecting the wage index. These provisions were discussed in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74191). Section 10324 of the Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, which defines a frontier State and amended section 1833(t) of the Act to add paragraph (19), which requires a frontier State wage index floor of 1.00 in certain cases, and states that the frontier State floor shall not be applied in a budget neutral manner. We codified these requirements at § 419.43(c)(2) and (3) of our regulations. For the CY 2018 OPPS, we proposed to implement this provision in the same manner as we have since CY 2011 (82 FR 33591). Under this policy, the frontier State hospitals would receive a wage index of 1.00 if the otherwise applicable wage index (including reclassification, the rural floor, and rural floor budget neutrality) is less than 1.00 (as discussed below and in the CY 2018 OPPS/ASC proposed rule (82 FR 33591 through 33592)), we proposed not to extend the imputed floor under the OPPS for CY 2018 and subsequent years, consistent with our proposal in the FY 2018 IPPS/LTCH PPS proposed rule (81 FR 19904 through 19905) not to extend the imputed floor under the IPPS for FY 2018 and subsequent fiscal years). Because the HOPD receives a wage index based on the geographic location of the specific inpatient hospital with which it is associated, we stated that the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. In the proposed rule (82 FR 33591), we referred readers to the FY 2011 through FY 2017 IPPS/LTCH PPS final rules for discussions regarding this provision, including our methodology for identifying which areas meet the definition of “frontier States” as provided for in section 1886(d)(3)(E)(iii)(II) of the Act. We invited public comments on this proposal.

We did not receive any public comments on this proposal. Therefore, for the reasons discussed above and in the CY 2018 OPPS/ASC proposed rule (82 FR 33591), we are finalizing our proposal to implement the frontier State floor under the OPPS in the same manner as we have since CY 2011. We note that, after we made our proposal in the FY 2018 IPPS/LTCH PPS proposed rule not to extend the imputed floor under the IPPS for FY 2018 and subsequent fiscal years (82 FR 19904 through 19905), and our proposal in the CY 2018 OPPS/ASC proposed rule not to extend the imputed floor under the OPPS for CY 2018 and subsequent years (82 FR 33592), we decided in the FY 2018 IPPS/LTCH PPS final rule not to finalize our proposal to discontinue the imputed floor under the IPPS (82 FR 38138 through 38142). As discussed below, consistent with the FY 2018 IPPS/LTCH PPS final rule, we are not finalizing our proposal to discontinue application of the imputed floor under the OPPS. This means that the applicable wage index, which can be superseded by the frontier State wage index if the applicable criteria are met, could also be affected by the imputed floor. We discuss our policy on the extension of the imputed floor under the IPPS as finalized in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38142), and under the OPPS as finalized in this rule, in more detail later in this section.

In addition to the changes required by the Affordable Care Act, we note that the FY 2018 IPPS wage indexes continue to reflect a number of adjustments implemented over the past few years, including, but not limited to, reclassification of hospitals to different geographic areas, the rural floor provisions, an adjustment for occupational mix, and an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment). In the CY 2018 OPPS/ASC proposed rule, we referred readers to the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through 19915) for a detailed discussion of all proposed changes to the FY 2018 IPPS wage indexes. We note that, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19905), we proposed not to apply the imputed floor to the IPPS wage index computations for FY 2018 and subsequent fiscal years. Consistent with this, we proposed in the CY 2018 OPPS/ASC proposed rule (82 FR 33592) not to extend the imputed floor policy under the OPPS beyond December 31, 2017 (the date the imputed floor policy is set to expire under the OPPS). However, in the FY 2018 IPPS/LTCH PPS final rule, we did not finalize our proposal to discontinue the imputed floor under the IPPS, and instead decided to temporarily extend the imputed floor for an additional year through FY 2018, while we continue to assess the effects of this policy and whether to continue or discontinue the imputed floor for the long term. As discussed below, consistent with the FY 2018 IPPS/LTCH PPS final rule, we are not finalizing our proposal to discontinue application of the imputed floor under the OPPS, but are instead continuing the imputed floor policy under the OPPS for an additional year, through December 31, 2018. We refer readers to the FY 2018 IPPS/LTCH PPS proposed and final rules (82 FR 19898 through 19915 and 82 FR 38129 through 38157, respectively) for a detailed discussion of all proposed and final changes to the FY 2018 IPPS wage indexes (including our proposed and final policy regarding the imputed floor for FY 2018 and subsequent fiscal years). In addition, we refer readers to the CY 2005 OPPS final rule with comment period (69 FR 65842 through 65844) and subsequent OPPS rules for a detailed discussion of the history of these wage index adjustments as applied under the OPPS.

Summarized below are comments we received regarding the application of the rural and imputed floor policies under the OPPS, along with our responses.

Comment: One commenter opposed applying budget neutrality for the rural floor under the OPPS on a national basis. The commenter believed applying budget neutrality on a national basis Start Printed Page 52400disadvantages hospitals in most States while benefiting hospitals in a few States that have taken advantage of the system where a rural hospital has a wage index higher than most or all urban hospitals in a State. The commenter stated that rural floor budget neutrality currently requires all wage indexes for hospitals throughout the nation to be reduced. However, hospitals in those States that have higher wage indexes because of the rural floor are not substantially affected by the wage index reductions. Therefore, the commenter supported calculating rural floor budget neutrality under the OPPS for each individual State.

Response: We appreciate this comment. We acknowledge that the application of the wage index and applicable wage index adjustments to OPPS payment rates may create distributional payment variations, especially within a budget neutral system. However, we continue to believe it is reasonable and appropriate to continue the current policy of applying budget neutrality for the rural floor under the OPPS on a national basis, consistent with the IPPS. We believe that hospital inpatient and outpatient departments are subject to the same labor cost environment, and therefore, the wage index and any applicable wage index adjustments (including the rural floor and rural floor budget neutrality) should be applied in the same manner under the IPPS and OPPS. Furthermore, we believe that applying the rural floor and rural floor budget neutrality in the same manner under the IPPS and OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. In addition, we believe the application of different wage indexes and wage index adjustments under the IPPS and OPPS would add a level of administrative complexity that is overly burdensome and unnecessary. Therefore, we are continuing the current policy of applying budget neutrality for the rural floor under the OPPS on a national basis, consistent with the IPPS.

Comment: One commenter supported the proposal to not apply the imputed floor to the IPPS wage index computations for FY 2018 and subsequent fiscal years when calculating the hospital wage indexes for the OPPS.

Response: In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19905), we proposed not to apply the imputed floor to the IPPS wage index computations for FY 2018 and subsequent fiscal years. Consistent with this proposal, we proposed in the CY 2018 OPPS/ASC proposed rule (82 FR 33592) not to extend the imputed floor policy under the OPPS beyond December 31, 2017 (the date the imputed floor policy is set to expire under the OPPS). As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38138 through 38142), after consideration of the many comments we received both in support of and against our proposal to discontinue the imputed floor under the IPPS, we decided to temporarily extend the imputed floor for an additional year under the IPPS through FY 2018, while we continue to assess the effects of this policy and whether to continue or discontinue the imputed floor for the long term. Therefore, in the FY 2018 IPPS/LTCH PPS final rule, we extended the imputed floor policy under both the original methodology and the alternative methodology for an additional year, through September 30, 2018. We refer readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38138 through 38142) for a detailed discussion of our final policy and rationale regarding application of the imputed floor under the IPPS for FY 2018. Given the inseparable, subordinate status of the HOPD within the hospital overall, we believe that using the IPPS wage index and wage index adjustments, including the imputed floor, as the source of an adjustment factor for the OPPS is reasonable and logical. Furthermore, as we previously stated, we believe that hospital inpatient and outpatient departments are subject to the same labor cost environment and, therefore, the wage index and any applicable wage index adjustments (including the imputed floor) should be applied in the same manner under the IPPS and OPPS. In addition, as discussed above, we believe the application of different wage index adjustments under the IPPS and OPPS would add a level of administrative complexity that is overly burdensome and unnecessary. Thus, as discussed further below, consistent with the FY 2018 IPPS/LTCH PPS final rule, we are not finalizing our proposal to discontinue application of the imputed floor under the OPPS, and instead are temporarily extending the imputed floor policy under the OPPS for an additional year.

After consideration of the public comments we received and for the reasons discussed above, consistent with the FY 2018 IPPS/LTCH PPS final rule, we have decided to extend the imputed floor policy under the OPPS for an additional year, through December 31, 2018, while we continue to assess the effects of this policy and whether to continue or discontinue the imputed floor for the long term. Therefore, we are not finalizing our proposal to discontinue the imputed floor policy under the OPPS. We continue to believe that using the final fiscal year IPPS post-reclassified wage index, inclusive of any adjustments (including the imputed floor), as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.

As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963), the FY 2016 IPPS/LTCH PPS final rule (80 FR 49488 through 49489 and 49494 through 49496), and the FY 2017 IPPS/LTCH PPS final rule (81 FR 56913), the Office of Management and Budget (OMB) issued revisions to the labor market area delineations on February 28, 2013 (based on 2010 Decennial Census data), that included a number of significant changes such as new Core Based Statistical Areas (CBSAs), urban counties that became rural, rural counties that became urban, and existing CBSAs that were split apart (OMB Bulletin 13-01). This bulletin can be found at: https://obamawhitehouse.archives.gov/​sites/​default/​files/​omb/​bulletins/​2013/​b13-01.pdf. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49950 through 49985), we adopted the use of the OMB labor market area delineations contained in OMB Bulletin No. 13-01, effective October 1, 2014. In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56913), we adopted revisions to statistical areas contained in OMB Bulletin No. 15-01, issued on July 15, 2015, which provided updates to and superseded OMB Bulletin No. 13-01 that was issued on February 28, 2013. We believe that it is important for the OPPS to use the latest labor market area delineations available as soon as is reasonably possible in order to maintain a more accurate and up-to-date payment system that reflects the reality of population shifts and labor market conditions. Therefore, for purposes of the OPPS, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79598), we adopted the revisions to the OMB statistical area delineations contained in OMB Bulletin No. 15-01, effective January 1, 2017, beginning with the CY 2017 OPPS wage indexes.

CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes. The FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through 19899) and final rule (82 FR 38130) discuss the two different lists of Start Printed Page 52401codes to identify counties: Social Security Administration (SSA) codes and Federal Information Processing Standard (FIPS) codes. Historically, CMS has listed and used SSA and FIPS county codes to identify and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS wage indexes. However, the SSA county codes are no longer being maintained and updated, although the FIPS codes continue to be maintained by the U.S. Census Bureau. The Census Bureau's most current statistical area information is derived from ongoing census data received since 2010; the most recent data are from 2015. In the FY 2018 IPPS/LTCH PPS proposed rule (81 FR 19898), for purposes of crosswalking counties to CBSAs for the IPPS wage index, we proposed to discontinue the use of the SSA county codes and begin using only the FIPS county codes. (We note that we finalized the proposal to discontinue use of SSA county codes and begin using only the FIPS county codes for purposes of crosswalking counties to CBSAs in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130)). Similarly, for the purposes of crosswalking counties to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC proposed rule (82 FR 33591), we proposed to discontinue the use of SSA county codes and begin using only the FIPS county codes. We invited public comments on this proposal. We did not receive any public comments on this proposal. Thus, for the reasons discussed above and in the CY 2018 OPPS/ASC proposed rule (82 FR 33591), we are finalizing, without modification, our proposal to discontinue the use of SSA county codes and begin using only the FIPS county codes for the purposes of crosswalking counties to CBSAs for the OPPS wage index.

The Census Bureau maintains a complete list of changes to counties or county equivalent entities on the Web site at: https://www.census.gov/​geo/​reference/​county-changes.html. In our proposed transition to using only FIPS codes for counties for the IPPS wage index, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19899), we proposed to update the FIPS codes used for crosswalking counties to CBSAs for the IPPS wage index effective October 1, 2017, to incorporate changes to the counties or county equivalent entities included in the Census Bureau's most recent list. We proposed to include these updates to calculate the area wage indexes in a manner that is generally consistent with the CBSA-based methodologies finalized in the FY 2005 IPPS final rule and the FY 2015 IPPS/LTCH PPS final rule. Based on information included in the Census Bureau's Web site, since 2010, the Census Bureau has made the following updates to the FIPS codes for counties or county equivalent entities:

  • Petersburg Borough, AK (FIPS State County Code 02-195), CBSA 02, was created from part of former Petersburg Census Area (02-195) and part of Hoonah-Angoon Census Area (02-105). The CBSA code remains 02.
  • The name of La Salle Parish, LA (FIPS State County Code 22-059), CBSA 14, is now LaSalle Parish, LA (FIPS State County Code 22-059). The CBSA code remains as 14.
  • The name of Shannon County, SD (FIPS State County Code 46-113), CBSA 43, is now Oglala Lakota County, SD (FIPS State County Code 46-102). The CBSA code remains as 43.

In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130), for the IPPS, we finalized our proposal to implement these FIPS code updates, effective October 1, 2017, beginning with the FY 2018 wage indexes. We note that while the county update changes listed earlier changed the county names, the CBSAs to which these counties map did not change from the prior counties. Therefore, there is no impact or change to hospitals in these counties; they continue to be considered rural for the IPPS wage index under these changes. Consistent with the FY 2018 IPPS/LTCH PPS proposed rule, in the CY 2018 OPPS/ASC proposed rule (82 FR 33592), we proposed to implement these revisions for purposes of the OPPS, effective January 1, 2018, beginning with the CY 2018 OPPS wage indexes. We stated that we believe it is important to use the latest counties or county equivalent entities in order to properly crosswalk hospitals from a county to a CBSA for purposes of the OPPS wage index. In addition, we stated we believe that using the latest FIPS codes will allow us to maintain a more accurate and up-to-date payment system that reflects the reality of population shifts and labor market conditions. We invited public comments on this proposal.

We did not receive any public comments on this proposal. Therefore, for the reasons discussed above and in the CY 2018 OPPS/ASC proposed rule (82 FR 33591 through 33592), we are finalizing our proposal, without modification, to implement the FIPS code updates described above, effective January 1, 2018, beginning with the CY 2018 OPPS wage indexes. Tables 2 and 3 associated with the FY 2018 IPPS/LTCH PPS final rule and the County to CBSA Crosswalk File and Urban CBSAs and Constituent Counties for Acute Care Hospitals File posted on the CMS Web site reflect these county changes.

In the CY 2018 OPPS/ASC proposed rule (82 FR 33592), we proposed to use the FY 2018 hospital IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount for CY 2018. Therefore, we stated in the proposed rule that any adjustments for the FY 2018 IPPS post-reclassified wage index would be reflected in the final CY 2018 OPPS wage index. (We refer readers to the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19898 through 19915) and final rule (82 FR 38129 through 38157), and the proposed and final FY 2018 hospital wage index files posted on the CMS Web site.) We invited public comments on this proposal. As discussed above, we received public comments regarding the application of the rural and imputed floors under the OPPS. We refer readers to our earlier discussion of these comments and our responses. After consideration of these comments, for the reasons discussed above and in the CY 2018 OPPS/ASC proposed rule (82 FR 33592), we are finalizing this proposal without modification. As stated earlier, we continue to believe that using the final fiscal year IPPS post-reclassified wage index, inclusive of any adjustments, as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.

Hospitals that are paid under the OPPS, but not under the IPPS, do not have an assigned hospital wage index under the IPPS. Therefore, for non-IPPS hospitals paid under the OPPS, it is our longstanding policy to assign the wage index that would be applicable if the hospital were paid under the IPPS, based on its geographic location and any applicable wage index adjustments. In the CY 2018 OPPS/ASC proposed rule, we proposed to continue this policy for CY 2018, and included a brief summary of the major proposed FY 2018 IPPS wage index policies and adjustments that we proposed to apply to these hospitals under the OPPS for CY 2018. These proposals are summarized below. We invited public comments on these proposals.

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 Start Printed Page 52402Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)). Applying this adjustment is consistent with our policy of adopting IPPS wage index policies for hospitals paid under the OPPS. We note that, because non-IPPS hospitals cannot reclassify, they are eligible for the out-migration wage adjustment if they are located in a section 505 out-migration county. This is the same out-migration adjustment policy that applies if the hospital were paid under the IPPS. For CY 2018, we proposed to continue our policy of allowing non-IPPS hospitals paid under the OPPS to qualify for the out-migration adjustment if they are located in a section 505 out-migration county (section 505 of the MMA). We did not receive any public comments on this proposal. Therefore, for the reasons discussed above and in the CY 2018 OPPS/ASC proposed rule (82 FR 33592), we are finalizing this proposal without modification.

As stated earlier, in the FY 2015 IPPS/LTCH PPS final rule, we adopted the OMB labor market area delineations issued by OMB in OMB Bulletin No. 13-01 on February 28, 2013, based on standards published on June 28, 2010 (75 FR 37246 through 37252) and the 2010 Census data to delineate labor market areas for purposes of the IPPS wage index. For IPPS wage index purposes, for hospitals that were located in urban CBSAs in FY 2014 but were designated as rural under these revised OMB labor market area delineations, we generally assigned them the urban wage index value of the CBSA in which they were physically located for FY 2014 for a period of 3 fiscal years (79 FR 49957 through 49960). To be consistent, we applied the same policy to hospitals paid under the OPPS but not under the IPPS so that such hospitals will maintain the wage index of the CBSA in which they were physically located for FY 2014 for 3 calendar years (until December 31, 2017). Because this 3-year transition will end at the end of CY 2017, it will no longer be applied in CY 2018.

In addition, under the IPPS, the imputed floor policy was set to expire effective October 1, 2017. However, as discussed above and in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38138 through 38142), we did not finalize our proposal not to extend the imputed floor policy under the IPPS for FY 2018 and subsequent fiscal years (82 FR 38132), and instead decided to extend the imputed floor policy for one additional year, through FY 2018. For purposes of the CY 2018 OPPS, we proposed not to extend the imputed floor policy beyond December 31, 2017. However, consistent with the FY 2018 IPPS/LTCH PPS final rule, as discussed above, we are extending the imputed floor policy under the OPPS for one additional year, through December 31, 2018. Therefore, for CY 2018, for hospitals paid under the OPPS but not under the IPPS, the imputed floor policy will continue to apply through December 31, 2018.

For CMHCs, for CY 2018, 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. As with OPPS hospitals and for the same reasons, for CMHCs previously located in urban CBSAs that were designated as rural under the revised OMB labor market area delineations in OMB Bulletin No. 13-01, we finalized a policy to maintain the urban wage index value of the CBSA in which they were physically located for CY 2014 for 3 calendar years (until December 31, 2017). Because this 3-year transition will end at the end of CY 2017, it will not be applied in CY 2018. Furthermore, in the CY 2018 OPPS/ASC proposed rule (82 FR 33592), we proposed that the wage index that applies to CMHCs would include the rural floor adjustment, but not the imputed floor adjustment, given that we had proposed not to extend the imputed floor policy under the OPPS beyond December 31, 2017 (the expiration date for the imputed floor under the OPPS). We also proposed that the wage index that applies to CMHCs would not include the out-migration adjustment because that adjustment only applies to hospitals. We did not receive any public comments regarding these proposals, and are finalizing these proposals with the following modification. Because, as discussed above, we are extending the application of the imputed floor under the OPPS for an additional year, through December 31, 2018, the wage index that applies to CMHCs will continue to include the imputed floor adjustment through December 31, 2018.

Table 2 associated with the FY 2018 IPPS/LTCH PPS final rule (available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) identifies counties eligible for the out-migration adjustment and IPPS hospitals that will receive the adjustment for FY 2018. We are including the out-migration adjustment information from Table 2 associated with the FY 2018 IPPS/LTCH PPS final rule as Addendum L to this final rule with comment period with the addition of non-IPPS hospitals that will receive the section 505 out-migration adjustment under the CY 2018 OPPS. Addendum L is available via the Internet on the CMS Web site. We refer readers to the CMS Web site for the OPPS at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. At this link, readers will find a link to the final FY 2018 IPPS wage index tables and Addendum L.

D. Statewide Average Default CCRs

In addition to using CCRs to estimate costs from charges on claims for ratesetting, CMS uses overall hospital-specific CCRs calculated from the hospital's most recent cost report to determine outlier payments, payments for pass-through devices, and monthly interim transitional corridor payments under the OPPS during the PPS year. MACs cannot calculate a CCR for some hospitals because there is no cost report available. For these hospitals, CMS uses the statewide average default CCRs to determine the payments mentioned earlier until a hospital's MAC is able to calculate the hospital's actual CCR from its most recently submitted Medicare cost report. These hospitals include, but are not limited to, hospitals that are new, hospitals that have not accepted assignment of an existing hospital's provider agreement, and hospitals that have not yet submitted a cost report. CMS also uses the statewide average default CCRs to determine payments for hospitals that appear to have a biased CCR (that is, the CCR falls outside the predetermined ceiling threshold for a valid CCR) or for hospitals in which the most recent cost report reflects an all-inclusive rate status (Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section 10.11).

In the CY 2018 OPPS/ASC proposed rule (82 FR 33593), we proposed to update the default ratios for CY 2018 using the most recent cost report data. We discussed our policy for using default CCRs, including setting the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599) in the context of our adoption of an outlier reconciliation policy for cost reports beginning on or after January 1, 2009. For detail on our process for calculating the statewide average CCRs, we referred readers to the CY 2018 OPPS proposed rule Claims Accounting Narrative that is posted on the CMS Web site. Table 10 published in the proposed rule (82 FR 33593 through 33594) listed the proposed statewide average default CCRs for OPPS services furnished on or after January 1, 2018, based on proposed rule data.Start Printed Page 52403

We did not receive any public comments on our proposal to use statewide average default CCRs if a MAC cannot calculate a CCR for a hospital and to use these CCRs to adjust charges to costs on claims data for setting the final CY 2018 OPPS relative payment weights. Therefore, we are finalizing our proposal without modification.

Table 9 below lists the statewide average default CCRs for OPPS services furnished on or after January 1, 2018, based on final rule data.

Table 9—CY 2018 Statewide Average CCRs

StateUrban/ruralCY 2018 default CCRPrevious default CCR (CY 2017 OPPS final rule)
ALASKARURAL0.6590.449
ALASKAURBAN0.2180.237
ALABAMARURAL0.1900.196
ALABAMAURBAN0.1550.158
ARKANSASRURAL0.1860.196
ARKANSASURBAN0.2000.205
ARIZONARURAL0.2320.238
ARIZONAURBAN0.1600.176
CALIFORNIARURAL0.1810.179
CALIFORNIAURBAN0.1930.188
COLORADORURAL0.3460.354
COLORADOURBAN0.2040.208
CONNECTICUTRURAL0.3240.402
CONNECTICUTURBAN0.2490.253
DISTRICT OF COLUMBIAURBAN0.2790.286
DELAWAREURBAN0.2950.288
FLORIDARURAL0.1580.169
FLORIDAURBAN0.1380.143
GEORGIARURAL0.2220.230
GEORGIAURBAN0.1980.196
HAWAIIRURAL0.3320.338
HAWAIIURBAN0.3220.319
IOWARURAL0.2960.291
IOWAURBAN0.2540.252
IDAHORURAL0.3390.341
IDAHOURBAN0.3690.401
ILLINOISRURAL0.2140.241
ILLINOISURBAN0.2080.209
INDIANARURAL0.2990.272
INDIANAURBAN0.2130.218
KANSASRURAL0.2640.269
KANSASURBAN0.1990.194
KENTUCKYRURAL0.1840.194
KENTUCKYURBAN0.1870.189
LOUISIANARURAL0.2120.217
LOUISIANAURBAN0.1950.201
MASSACHUSETTSRURAL0.3220.316
MASSACHUSETTSURBAN0.3480.345
MAINERURAL0.4190.425
MAINEURBAN0.4220.413
MARYLANDRURAL0.2580.264
MARYLANDURBAN0.2270.229
MICHIGANRURAL0.3020.295
MICHIGANURBAN0.3180.324
MINNESOTARURAL0.3790.398
MINNESOTAURBAN0.3020.319
MISSOURIRURAL0.2200.222
MISSOURIURBAN0.2400.261
MISSISSIPPIRURAL0.2130.224
MISSISSIPPIURBAN0.1600.167
MONTANARURAL0.4860.450
MONTANAURBAN0.3500.368
NORTH CAROLINARURAL0.2060.216
NORTH CAROLINAURBAN0.2120.223
NORTH DAKOTARURAL0.3660.411
NORTH DAKOTAURBAN0.3690.334
NEBRASKARURAL0.3130.294
NEBRASKAURBAN0.2330.238
NEW HAMPSHIRERURAL0.3070.320
NEW HAMPSHIREURBAN0.2550.279
NEW JERSEYURBAN0.2000.195
NEW MEXICORURAL0.2240.225
Start Printed Page 52404
NEW MEXICOURBAN0.2840.280
NEVADARURAL0.1750.196
NEVADAURBAN0.1140.123
NEW YORKRURAL0.2990.309
NEW YORKURBAN0.3030.292
OHIORURAL0.2800.292
OHIOURBAN0.2030.207
OKLAHOMARURAL0.2150.231
OKLAHOMAURBAN0.1690.180
OREGONRURAL0.2900.280
OREGONURBAN0.3360.344
PENNSYLVANIARURAL0.2670.274
PENNSYLVANIAURBAN0.1730.179
PUERTO RICOURBAN0.5770.527
RHODE ISLANDURBAN0.2760.291
SOUTH CAROLINARURAL0.1700.185
SOUTH CAROLINAURBAN0.1910.190
SOUTH DAKOTARURAL0.3910.383
SOUTH DAKOTAURBAN0.2420.229
TENNESSEERURAL0.1730.181
TENNESSEEURBAN0.1740.180
TEXASRURAL0.2050.214
TEXASURBAN0.1680.177
UTAHRURAL0.3910.349
UTAHURBAN0.3040.315
VIRGINIARURAL0.1770.191
VIRGINIAURBAN0.2150.226
VERMONTRURAL0.3930.426
VERMONTURBAN0.3780.340
WASHINGTONRURAL0.2560.271
WASHINGTONURBAN0.3230.294
WISCONSINRURAL0.3480.354
WISCONSINURBAN0.3080.290
WEST VIRGINIARURAL0.2530.266
WEST VIRGINIAURBAN0.2970.285
WYOMINGRURAL0.4070.429
WYOMINGURBAN0.3270.311

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 2018

In the CY 2006 OPPS final rule with comment period (70 FR 68556), we finalized a payment increase for rural sole community hospitals (SCHs) of 7.1 percent for all services and procedures paid under the OPPS, excluding drugs, biologicals, brachytherapy sources, and devices paid under the pass-through payment policy in accordance with section 1833(t)(13)(B) of the Act, as added by section 411 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173). Section 1833(t)(13) of the Act provided the Secretary the authority to make an adjustment to OPPS payments for rural hospitals, effective January 1, 2006, if justified by a study of the difference in costs by APC between hospitals in rural areas and hospitals in urban areas. Our analysis showed a difference in costs for rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment adjustment for rural SCHs of 7.1 percent for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, brachytherapy sources, and devices paid under the pass-through payment policy, in accordance with section 1833(t)(13)(B) of the Act.

In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010 and 68227), for purposes of receiving this rural adjustment, we revised § 419.43(g) of the regulations to clarify that essential access community hospitals (EACHs) also are eligible to receive the rural SCH adjustment, assuming these entities otherwise meet the rural adjustment criteria. Currently, two hospitals are classified as EACHs, and as of CY 1998, under section 4201(c) of Public Law 105-33, a hospital can no longer become newly classified as an EACH.

This adjustment for rural SCHs is budget neutral and applied before calculating outlier payments and copayments. We stated in the CY 2006 OPPS final rule with comment period (70 FR 68560) that we would not reestablish the adjustment amount on an annual basis, but we may review the adjustment in the future and, if appropriate, would revise the adjustment. We provided the same 7.1 percent adjustment to rural SCHs, including EACHs, again in CYs 2008 through 2017. Further, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated the regulations at § 419.43(g)(4) to specify, in general terms, that items paid at charges adjusted to costs by application of a hospital-specific CCR are excluded from the 7.1 percent payment adjustment.Start Printed Page 52405

In the CY 2018 OPPS/ASC proposed rule (82 FR 33594 through 33595), for the CY 2018 OPPS, we proposed to continue our policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs.

Comment: Commenters supported the proposed payment adjustment for rural SCHs and EACHs, and stated that this adjustment would support access to care in rural areas and provide additional resources for rural SCHs and EACHs.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing the proposal for CY 2017 to continue our policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs.

F. Payment Adjustment for Certain Cancer Hospitals for CY 2018

1. Background

Since the inception of the OPPS, which was authorized by the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid the 11 hospitals that meet the criteria for cancer hospitals identified in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered outpatient hospital services. These cancer hospitals are exempted from payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999 (Pub. L. 106-113), Congress established section 1833(t)(7) of the Act, “Transitional Adjustment to Limit Decline in Payment,” to determine OPPS payments to cancer and children's hospitals based on their pre-BBA payment amount (often referred to as “held harmless”).

As required under section 1833(t)(7)(D)(ii) of the Act, a cancer hospital receives the full amount of the difference between payments for covered outpatient services under the OPPS and a “pre-BBA amount.” That is, cancer hospitals are permanently held harmless to their “pre-BBA amount,” and they receive transitional outpatient payments (TOPs) or hold harmless payments to ensure that they do not receive a payment that is lower in amount under the OPPS than the payment amount they would have received before implementation of the OPPS, as set forth in section 1833(t)(7)(F) of the Act. The “pre-BBA amount” is the product of the hospital's reasonable costs for covered outpatient services occurring in the current year and the base payment-to-cost ratio (PCR) for the hospital defined in section 1833(t)(7)(F)(ii) of the Act. The “pre-BBA amount” and the determination of the base PCR are defined at 42 CFR 419.70(f). TOPs are calculated on Worksheet E, Part B, of the Hospital Cost Report or the Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-2552-10, respectively) as applicable each year. Section 1833(t)(7)(I) of the Act exempts TOPs from budget neutrality calculations.

Section 3138 of the Affordable Care Act amended section 1833(t) of the Act by adding a new paragraph (18), which instructs the Secretary to conduct a study to determine if, under the OPPS, outpatient costs incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of the Act with respect to APC groups exceed outpatient costs incurred by other hospitals furnishing services under section 1833(t) of the Act, as determined appropriate by the Secretary. Section 1833(t)(18)(A) of the Act requires the Secretary to take into consideration the cost of drugs and biologicals incurred by cancer hospitals and other hospitals. Section 1833(t)(18)(B) of the Act provides that, if the Secretary determines that cancer hospitals' costs are higher than those of other hospitals, the Secretary shall provide an appropriate adjustment under section 1833(t)(2)(E) of the Act to reflect these higher costs. In 2011, after conducting the study required by section 1833(t)(18)(A) of the Act, we determined that outpatient costs incurred by the 11 specified cancer hospitals were greater than the costs incurred by other OPPS hospitals. For a complete discussion regarding the cancer hospital cost study, we refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74200 through 74201).

Based on these findings, we finalized a policy to provide a payment adjustment to the 11 specified cancer hospitals that reflects their higher outpatient costs as discussed in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74202 through 74206). Specifically, we adopted a policy to provide additional payments to the cancer hospitals so that each cancer hospital's final PCR for services provided in a given calendar year is equal to the weighted average PCR (which we refer to as the “target PCR”) for other hospitals paid under the OPPS. The target PCR is set in advance of the calendar year and is calculated using the most 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. For CYs 2012 and 2013, the target PCR for purposes of the cancer hospital payment adjustment was 0.91. For CY 2014, the target PCR for purposes of the cancer hospital payment adjustment was 0.89. For CY 2015, the target PCR was 0.90. For CY 2016, the target PCR was 0.92, as discussed in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70362 through 70363). For CY 2017, the target PCR was 0.91, as discussed in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79603 through 7960).

2. Proposed and Finalized Policy for CY 2018

Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255) amended section 1833(t)(18) of the Act by adding subparagraph (C), which requires that in applying 42 CFR 419.43(i), that is, the payment adjustment for certain cancer hospitals, for services furnished on or after January 1, 2018, the target PCR adjustment be reduced by 1.0 percentage point less than what would otherwise apply. Section 16002(b) also provides that, in addition to the percentage reduction, the Secretary may consider making an additional percentage point reduction to the target PCR that takes into account payment rates for applicable items and services described under section 1833(t)(21)(C) of the Act for hospitals that are not cancer hospitals described under section 1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality adjustment under section 1833(t) of the Act, the Secretary shall not take into account the reduced expenditures that result from application of section 1833(t)(18)(C) of the Act. In the CY 2018 OPPS/ASC proposed rule (82 FR 33595), for CY 2018, we proposed to provide additional payments to the 11 specified cancer hospitals so that each cancer hospital's final PCR is equal to the weighted average PCR (or “target PCR”) for the Start Printed Page 52406other OPPS hospitals using the most recent submitted or settled cost report data that were available at the time of the development of the proposed rule, reduced by 1.0 percentage point to comply with section 16002(b) of the 21st Century Cures Act. We did not propose an additional reduction beyond the 1.0 percentage point reduction required by section 16002(b) for CY 2018. To calculate the proposed CY 2018 target PCR, we used the same extract of cost report data from HCRIS, as discussed in section II.A. of the proposed rule, used to estimate costs for the CY 2018 OPPS. Using these cost report data, we included data from Worksheet E, Part B, for each hospital, using data from each hospital's most recent cost report, whether as submitted or settled.

We then limited the dataset to the hospitals with CY 2016 claims data that we used to model the impact of the proposed CY 2018 APC relative payment weights (3,701 hospitals) because it is appropriate to use the same set of hospitals that we are using to calibrate the modeled CY 2018 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2013 to 2016. We then removed the cost report data of the 49 hospitals located in Puerto Rico from our dataset because we do not believe that their cost structure reflects the costs of most hospitals paid under the OPPS and, therefore, their inclusion may bias the calculation of hospital-weighted statistics. We also removed the cost report data of 16 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to a proposed analytic file of 3,636 hospitals with cost report data.

Using this smaller dataset of cost report data, we estimated that, on average, the OPPS payments to other hospitals furnishing services under the OPPS were approximately 90 percent of reasonable cost (weighted average PCR of 0.90). Therefore, after applying the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act, we proposed that the payment amount associated with the cancer hospital payment adjustment to be determined at cost report settlement would be the additional payment needed to result in a proposed target PCR equal to 0.89 for each cancer hospital.

Table 11 of the proposed rule indicated the proposed estimated percentage increase in OPPS payments to each cancer hospital for CY 2018 due to the cancer hospital payment adjustment policy. We stated in the proposed rule that the actual amount of the CY 2018 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2018 payments and costs. We noted 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.

Comment: Several commenters supported the proposed cancer hospital payment adjustment for CY 2018.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our cancer hospital payment adjustment methodology as proposed. For this final rule with comment period, we are using the most recent cost report data through June 30, 2017 to update the adjustment. This update yields a target PCR of 0.88. We limited the dataset to the hospitals with CY 2016 claims data that we used to model the impact of the CY 2018 APC relative payment weights (3,724 hospitals) because it is appropriate to use the same set of hospitals that we are using to calibrate the modeled CY 2018 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2012 to 2017. We then removed the cost report data of the 49 hospitals located in Puerto Rico from our dataset because we do not believe that their cost structure reflects the costs of most hospitals paid under the OPPS and, therefore, their inclusion may bias the calculation of hospital-weighted statistics. We also removed the cost report data of 14 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to an analytic file of 3,661 hospitals with cost report data.

Using this smaller dataset of cost report data, we estimated a target PCR of 0.89. Therefore, after applying the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act, we are finalizing that the payment amount associated with the cancer hospital payment adjustment to be determined at cost report settlement will be the additional payment needed to result in a PCR equal to 0.88 for each cancer hospital. Table 10 below indicates the estimated percentage increase in OPPS payments to each cancer hospital for CY 2018 due to the cancer hospital payment adjustment policy. We note that the requirements contained in section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs will be assessed as usual after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period.

Table 10—Estimated CY 2018 Hospital-Specific Payment Adjustment for Cancer Hospitals To Be Provided at Cost Report Settlement

Provider No.Hospital nameEstimated percentage increase in OPPS payments for CY 2018 due to payment adjustment
050146City of Hope Comprehensive Cancer Center31.5
050660USC Norris Cancer Hospital16.4
100079Sylvester Comprehensive Cancer Center22.9
100271H. Lee Moffitt Cancer Center & Research Institute21.7
Start Printed Page 52407
220162Dana-Farber Cancer Institute44.2
330154Memorial Sloan-Kettering Cancer Center46.9
330354Roswell Park Cancer Institute20.0
360242James Cancer Hospital & Solove Research Institute27.5
390196Fox Chase Cancer Center7.6
450076M.D. Anderson Cancer Center74.9
500138Seattle Cancer Care Alliance52.2

G. Hospital Outpatient Outlier Payments

1. Background

The OPPS provides outlier payments to hospitals to help mitigate the financial risk associated with high-cost and complex procedures, where a very costly service could present a hospital with significant financial loss. As explained in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66832 through 66834), we set our projected target for aggregate outlier payments at 1.0 percent of the estimated aggregate total payments under the OPPS for the prospective year. Outlier payments are provided on a service-by-service basis when the cost of a service exceeds the APC payment amount multiplier threshold (the APC payment amount multiplied by a certain amount) as well as the APC payment amount plus a fixed-dollar amount threshold (the APC payment plus a certain amount of dollars). In CY 2017, the outlier threshold was met when the hospital's cost of furnishing a service exceeded 1.75 times (the multiplier threshold) the APC payment amount and exceeded the APC payment amount plus $3,825 (the fixed-dollar amount threshold) (81 FR 79604 through 79606). If the cost of a service exceeds both the multiplier threshold and the fixed-dollar threshold, the outlier payment is calculated as 50 percent of the amount by which the cost of furnishing the service exceeds 1.75 times the APC payment amount. Beginning with CY 2009 payments, outlier payments are subject to a reconciliation process similar to the IPPS outlier reconciliation process for cost reports, as discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599).

It has been our policy to report the actual amount of outlier payments as a percent of total spending in the claims being used to model the OPPS. Our estimate of total outlier payments as a percent of total CY 2016 OPPS payments, using CY 2016 claims available for this proposed rule, is approximately 1.0 percent of the total aggregated OPPS payments. Therefore, for CY 2016, we estimate that we paid the outlier target of 1.0 percent of total aggregated OPPS payments.

As stated in the proposed rule, using CY 2016 claims data and CY 2017 payment rates, we estimated that the aggregate outlier payments for CY 2017 would be approximately 1.0 percent of the total CY 2017 OPPS payments. Using an updated claims dataset and OPPS ancillary CCRs, we estimate that we paid approximately 1.11 percent of the total CY 2017 OPPS payments, in OPPS outliers. We provided estimated CY 2018 outlier payments for hospitals and CMHCs with claims included in the claims data that we used to model impacts in the Hospital-Specific Impacts—Provider-Specific Data file on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

2. Outlier Calculation for CY 2018

In the CY 2018 OPPS/ASC proposed rule (82 FR 33596), for CY 2018, we proposed to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS. We proposed that a portion of that 1.0 percent, an amount equal to less than 0.01 percent of outlier payments (or 0.0001 percent of total OPPS payments) would be allocated to CMHCs for PHP outlier payments. This is the amount of estimated outlier payments that would result from the proposed CMHC outlier threshold as a proportion of total estimated OPPS outlier payments. As discussed in section VIII.C. of the proposed rule, we proposed to continue our longstanding policy that if a CMHC's cost for partial hospitalization services, paid under APC 5853 (Partial Hospitalization for CMHCs), exceeds 3.40 times the payment rate for proposed APC 5853, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the proposed APC 5853 payment rate. For further discussion of CMHC outlier payments, we refer readers to section VIII.D. of the proposed rule.

To ensure that the estimated CY 2018 aggregate outlier payments would equal 1.0 percent of estimated aggregate total payments under the OPPS, we 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 $4,325.

We calculated the proposed fixed-dollar threshold of $4,325 using the standard methodology most recently used for CY 2017 (81 FR 79604 through 79605). For purposes of estimating outlier payments for the proposed rule, we used the hospital-specific overall ancillary CCRs available in the April 2017 update to the Outpatient Provider-Specific File (OPSF). The OPSF contains provider-specific data, such as the most current CCRs, which are maintained by the MACs and used by the OPPS Pricer to pay claims. The claims that we use to model each OPPS update lag by 2 years.

In order to estimate the CY 2018 hospital outlier payments for the proposed rule, we inflated the charges on the CY 2016 claims using the same inflation factor of 1.104055 that we used to estimate the IPPS fixed-dollar outlier threshold for the FY 2018 IPPS/LTCH Start Printed Page 52408PPS proposed rule (82 FR 20173). We used an inflation factor of 1.05074 to estimate CY 2017 charges from the CY 2016 charges reported on CY 2016 claims. The methodology for determining this charge inflation factor is discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 57286). As we stated in the CY 2005 OPPS final rule with comment period (69 FR 65845), we believe that the use of these charge inflation factors are appropriate for the OPPS because, with the exception of the inpatient routine service cost centers, hospitals use the same ancillary and outpatient cost centers to capture costs and charges for inpatient and outpatient services.

As noted in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68011), we are concerned that we could systematically overestimate the OPPS hospital outlier threshold if we did not apply a CCR inflation adjustment factor. Therefore, we proposed to apply the same CCR inflation adjustment factor that we proposed to apply for the FY 2018 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2018 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2018, we proposed to apply an adjustment factor of 0.979187 to the CCRs that were in the April 2017 OPSF to trend them forward from CY 2017 to CY 2018. The methodology for calculating this proposed adjustment was discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 20173).

To model hospital outlier payments for the proposed rule, we applied the overall CCRs from the April 2017 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 0.979187 to approximate CY 2018 CCRs) to charges on CY 2016 claims that were adjusted (using the proposed charge inflation factor of 1.104055 to approximate CY 2018 charges). We simulated aggregated CY 2018 hospital outlier payments using these costs for several different fixed-dollar thresholds, holding the 1.75 multiplier threshold constant and assuming that outlier payments would continue to be made at 50 percent of the amount by which the cost of furnishing the service would exceed 1.75 times the APC payment amount, until the total outlier payments equaled 1.0 percent of aggregated estimated total CY 2018 OPPS payments. We estimated that a proposed fixed-dollar threshold of $4,325, combined with the proposed multiplier threshold of 1.75 times the APC payment rate, would allocate 1.0 percent of aggregated total OPPS payments to outlier payments. For CMHCs, we proposed that, if a CMHC's cost for partial hospitalization services, paid under APC 5853, exceeds 3.40 times the payment rate for APC 5853, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the APC 5853 payment rate.

Section 1833(t)(17)(A) of the Act, which applies to hospitals as defined under section 1886(d)(1)(B) of the Act, requires that hospitals that fail to report data required for the quality measures selected by the Secretary, in the form and manner required by the Secretary under section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point reduction to their OPD fee schedule increase factor; that is, the annual payment update factor. The application of a reduced OPD fee schedule increase factor results in reduced national unadjusted payment rates that will apply to certain outpatient items and services furnished by hospitals that are required to report outpatient quality data and that fail to meet the Hospital OQR Program requirements. For hospitals that fail to meet the Hospital OQR Program requirements, we proposed to continue the policy that we implemented in CY 2010 that the hospitals' costs will be compared to the reduced payments for purposes of outlier eligibility and payment calculation. For more information on the Hospital OQR Program, we referred readers to section XIII. of the proposed rule.

We did not receive any public comments on our hospital outpatient outlier payment methodology. Therefore, we are finalizing our proposal 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 2018.

3. Final Outlier Calculation

Consistent with historical practice, we used updated data for this final rule with comment period for outlier calculations. For CY 2018, we are applying the overall CCRs from the July 2017 OPSF file after adjustment (using the CCR inflation adjustment factor of 0.9856 to approximate CY 2018 CCRs) to charges on CY 2016 claims that were adjusted using a charge inflation factor of 1.0936 to approximate CY 2018 charges. These are the same CCR adjustment and charge inflation factors that were used to set the IPPS fixed-dollar thresholds for the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527). We simulated aggregated CY 2018 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 2018 OPPS payments. We estimate that a fixed-dollar threshold of $4,150, combined with the multiple threshold of 1.75 times the APC payment rate, will allocate 1.0 percent of aggregated total OPPS payments to outlier payments. We note that the difference in our calculation of the final fixed-dollar threshold of $4,150 and the proposed fixed-dollar threshold of $4,350 is largely attributed to finalized proposals related to reducing payments for drugs purchased under the 340B drug program for CY 2018, as discussed in section V.B.7. of this final rule with comment period.

For CMHCs, if a CMHC's cost for partial hospitalization services, paid under APC 5853, exceeds 3.40 times the payment rate, the outlier payment will be calculated as 50 percent of the amount by which the cost exceeds 3.40 times APC 5853.

H. Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment

The basic methodology for determining prospective payment rates for HOPD services under the OPPS is set forth in existing regulations at 42 CFR part 419, subparts C and D. For this CY 2018 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 determined under section II.A. of this final rule with comment period. Therefore, the national unadjusted payment rate for most APCs contained in Addendum A to this final rule with comment period (which is available via the Internet on the CMS Web site) and for most HCPCS codes to which separate payment under the OPPS has been assigned in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site) was calculated by multiplying the CY 2018 scaled weight for the APC by the CY 2018 conversion factor. We note that this is the same methodology proposed in the CY 2018 OPPS/ASC proposed rule (82 FR 33598), on which Start Printed Page 52409we did not receive any public comments.

We note that section 1833(t)(17) of the Act, which applies to hospitals as defined under section 1886(d)(1)(B) of the Act, requires that hospitals that fail to submit data required to be submitted on quality measures selected by the Secretary, in the form and manner and at a time specified by the Secretary, incur a reduction of 2.0 percentage points to their OPD fee schedule increase factor, that is, the annual payment update factor. The application of a reduced OPD fee schedule increase factor results in reduced national unadjusted payment rates that apply to certain outpatient items and services provided by hospitals that are required to report outpatient quality data and that fail to meet the Hospital OQR Program (formerly referred to as the Hospital Outpatient Quality Data Reporting Program (HOP QDRP)) requirements. For further discussion of the payment reduction for hospitals that fail to meet the requirements of the Hospital OQR Program, we refer readers to section XIII. of this final rule with comment period.

We demonstrate below the steps on how to determine the APC payments that will be made in a calendar year under the OPPS to a hospital that fulfills the Hospital OQR Program requirements and to a hospital that fails to meet the Hospital OQR Program requirements for a service that has any of the following status indicator assignments: “J1”, “J2”, “P”, “Q1”, “Q2”, “Q3”, “Q4”, “R”, “S”, “T”, “U”, or “V” (as defined in Addendum D1 to this final rule with comment period, which is available via the Internet on the CMS Web site), in a circumstance in which the multiple procedure discount does not apply, the procedure is not bilateral, and conditionally packaged services (status indicator of “Q1” and “Q2”) qualify for separate payment. We note that, although blood and blood products with status indicator “R” and brachytherapy sources with status indicator “U” are not subject to wage adjustment, they are subject to reduced payments when a hospital fails to meet the Hospital OQR Program requirements.

Individual providers interested in calculating the payment amount that they will 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 Web site) 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 0.980 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 in order to receive the full CY 2018 OPPS fee schedule increase factor.

Step 1. Calculate 60 percent (the labor-related portion) of the national unadjusted payment rate. Since the initial implementation of the OPPS, we have used 60 percent to represent our estimate of that portion of costs attributable, on average, to labor. We refer readers to the April 7, 2000 OPPS final rule with comment period (65 FR 18496 through 18497) for a detailed discussion of how we derived this percentage. During our regression analysis for the payment adjustment for rural hospitals in the CY 2006 OPPS final rule with comment period (70 FR 68553), we confirmed that this labor-related share for hospital outpatient services is appropriate.

The formula below is a mathematical representation of Step 1 and identifies the labor-related portion of a specific payment rate for a specific service.

X is the labor-related portion of the national unadjusted payment rate.

X = .60 * (national unadjusted payment rate).

Step 2. Determine the wage index area in which the hospital is located and identify the wage index level that applies to the specific hospital. We note that, under the CY 2018 OPPS policy for continuing to use the OMB labor market area delineations based on the 2010 Decennial Census data for the wage indexes used under the IPPS, a hold harmless policy for the wage index may apply, as discussed in section II.C. of this final rule with comment period. The wage index values assigned to each area reflect the geographic statistical areas (which are based upon OMB standards) to which hospitals are assigned for FY 2018 under the IPPS, reclassifications through the Metropolitan Geographic Classification Review Board (MGCRB), section 1886(d)(8)(B) “Lugar” hospitals, reclassifications under section 1886(d)(8)(E) of the Act, as defined in § 412.103 of the regulations, and hospitals designated as urban under section 601(g) of Public Law 98-21. For further discussion of the changes to the FY 2018 IPPS wage indexes, as applied to the CY 2018 OPPS, we refer readers to section II.C. of this final rule with comment period. We are continuing to apply a wage index floor of 1.00 to frontier States, in accordance with section 10324 of the Affordable Care Act of 2010.

Step 3. Adjust the wage index of hospitals located in certain qualifying counties that have a relatively high percentage of hospital employees who reside in the county, but who work in a different county with a higher wage index, in accordance with section 505 of Public Law 108-173. Addendum L to this final rule with comment period (which is available via the Internet on the CMS Web site) contains the qualifying counties and the associated wage index increase developed for the FY 2018 IPPS, which are listed in Table 2 in the FY 2018 IPPS/LTCH PPS final rule available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. (Click on the link on the left side of the screen titled “FY 2018 IPPS Final Rule Home Page” and select “FY 2018 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 = .60 * (national unadjusted payment rate) * applicable wage index.

Step 5. Calculate 40 percent (the nonlabor-related portion) of the national unadjusted payment rate and add that amount to the resulting product of Step 4. The result is the wage index adjusted payment rate for the relevant wage index area.

The formula below is a mathematical representation of Step 5 and calculates the remaining portion of the national payment rate, the amount not Start Printed Page 52410attributable to labor, and the adjusted payment for the specific service.

Y is the nonlabor-related portion of the national unadjusted payment rate.

Y = .40 * (national unadjusted payment rate).

Adjusted Medicare Payment = Y + Xa.

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

The formula below is a mathematical representation of Step 6 and applies the rural adjustment for rural SCHs.

Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment * 1.071.

We are providing examples below of the calculation of both the full and reduced national unadjusted payment rates that will apply to certain outpatient items and services performed by hospitals that meet and that fail to meet the Hospital OQR Program requirements, using the steps outlined above. For purposes of this example, we used a provider that is located in Brooklyn, New York that is assigned to CBSA 35614. This provider bills one service that is assigned to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage). The CY 2018 full national unadjusted payment rate for APC 5071 is approximately $572.81. The reduced national unadjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is approximately $561.35. This reduced rate is calculated by multiplying the reporting ratio of 0.980 by the full unadjusted payment rate for APC 5071.

The FY 2018 wage index for a provider located in CBSA 35614 in New York is 1.2876. The labor-related portion of the full national unadjusted payment is approximately $442.53 (.60 * $572.81 * 1.2876). The labor-related portion of the reduced national unadjusted payment is approximately $433.68 (.60 * $561.35 * 1.2876). The nonlabor-related portion of the full national unadjusted payment is approximately $229.12 (.40 * $572.81). The nonlabor-related portion of the reduced national unadjusted payment is approximately $224.54 (.40 * $561.35). The sum of the labor-related and nonlabor-related portions of the full national adjusted payment is approximately $671.65 ($442.53 + $229.12). The sum of the portions of the reduced national adjusted payment is approximately $658.22 ($433.68 + $224.54).

I. Beneficiary Copayments

1. Background

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

Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered OPD service (or group of such services) furnished in a year, the national unadjusted copayment amount cannot be less than 20 percent of the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure performed in a year to the amount of the inpatient hospital deductible for that year.

Section 4104 of the Affordable Care Act eliminated the Medicare Part B coinsurance for preventive services furnished on and after January 1, 2011, that meet certain requirements, including flexible sigmoidoscopies and screening colonoscopies, and waived the Part B deductible for screening colonoscopies that become diagnostic during the procedure. Our discussion of the changes made by the Affordable Care Act with regard to copayments for preventive services furnished on and after January 1, 2011, may be found in section XII.B. of the CY 2011 OPPS/ASC final rule with comment period (75 FR 72013).

2. OPPS Copayment Policy

In the CY 2018 OPPS/ASC proposed rule (82 FR 33599), for CY 2018, we proposed to determine copayment amounts for new and revised APCs using the same methodology that we implemented beginning in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule with comment period (68 FR 63458).) In addition, we proposed to use the same standard rounding principles that we have historically used in instances where the application of our standard copayment methodology would result in a copayment amount that is less than 20 percent and cannot be rounded, under standard rounding principles, to 20 percent. (We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in which we discuss our rationale for applying these rounding principles.) The proposed national unadjusted copayment amounts for services payable under the OPPS that would be effective January 1, 2018 were included in Addenda A and B to the proposed rule (which are available via the Internet on the CMS Web site).

We did not receive any public comments on the proposed copayment amounts for new and revised APCs using the same methodology we implemented beginning in CY 2004 or the standard rounding principles we apply to our copayment amounts. Therefore, we are finalizing our proposed copayment policies, without modification.

As discussed in section XIII.E. of this final rule with comment period, for CY 2018, the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies will equal the product of the reporting ratio and the national unadjusted copayment, or the product of the reporting ratio and the minimum unadjusted copayment, respectively, for the service.

We note that OPPS copayments may increase or decrease each year based on changes in the calculated APC payment rates due to updated cost report and claims data, and any changes to the OPPS cost modeling process. However, as described in the CY 2004 OPPS final rule with comment period, the development of the copayment methodology generally moves beneficiary copayments closer to 20 percent of OPPS APC payments (68 FR 63458 through 63459).

In the CY 2004 OPPS final rule with comment period (68 FR 63459), we adopted a new methodology to calculate unadjusted copayment amounts in situations including reorganizing APCs, and we finalized the following rules to determine copayment amounts in CY 2004 and subsequent years.

  • When an APC group consists solely of HCPCS codes that were not paid under the OPPS the prior year because they were packaged or excluded or are new codes, the unadjusted copayment Start Printed Page 52411amount would be 20 percent of the APC payment rate.
  • If a new APC that did not exist during the prior year is created and consists of HCPCS codes previously assigned to other APCs, the copayment amount is calculated as the product of the APC payment rate and the lowest coinsurance percentage of the codes comprising the new APC.
  • If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is equal to or greater than the prior year's rate, the copayment amount remains constant (unless the resulting coinsurance percentage is less than 20 percent).
  • If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is less than the prior year's rate, the copayment amount is calculated as the product of the new payment rate and the prior year's coinsurance percentage.
  • If HCPCS codes are added to or deleted from an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in a decrease in the coinsurance percentage for the reconfigured APC, the copayment amount would not change (unless retaining the copayment amount would result in a coinsurance rate less than 20 percent).
  • If HCPCS codes are added to an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in an increase in the coinsurance percentage for the reconfigured APC, the copayment amount would be calculated as the product of the payment rate of the reconfigured APC and the lowest coinsurance percentage of the codes being added to the reconfigured APC.

We noted in the CY 2004 OPPS final rule with comment period that we would seek to lower the copayment percentage for a service in an APC from the prior year if the copayment percentage was greater than 20 percent. We noted that this principle was consistent with section 1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the national unadjusted coinsurance rate so that beneficiary liability will eventually equal 20 percent of the OPPS payment rate for all OPPS services to which a copayment applies, and with section 1833(t)(3)(B) of the Act, which achieves a 20-percent copayment percentage when fully phased in and gives the Secretary the authority to set rules for determining copayment amounts for new services. We further noted that the use of this methodology would, in general, reduce the beneficiary coinsurance rate and copayment amount for APCs for which the payment rate changes as the result of the reconfiguration of APCs and/or recalibration of relative payment weights (68 FR 63459).

3. Calculation of an Adjusted Copayment Amount for an APC Group

As we stated in the CY 2018 OPPS/ASC proposed rule (82 FR 33600), individuals interested in calculating the national copayment liability for a Medicare beneficiary for a given service provided by a hospital that met or failed to meet its Hospital OQR Program requirements should follow the formulas presented in the following steps.

Step 1. Calculate the beneficiary payment percentage for the APC by dividing the APC's national unadjusted copayment by its payment rate. For example, using APC 5071, $114.57 is approximately 20 percent of the full national unadjusted payment rate of $572.81. For APCs with only a minimum unadjusted copayment in Addenda A and B to this final rule with comment period rule (which are available via the Internet on the CMS Web site), the beneficiary payment percentage is 20 percent.

The formula below is a mathematical representation of Step 1 and calculates the national copayment as a percentage of national payment for a given service.

B is the beneficiary payment percentage.

B = National unadjusted copayment for APC/national unadjusted payment rate for APC.

Step 2. Calculate the appropriate wage-adjusted payment rate for the APC for the provider in question, as indicated in Steps 2 through 4 under section II.H. of this 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 0.980.

The unadjusted copayments for services payable under the OPPS that will be effective January 1, 2018, are shown in Addenda A and B to this final rule with comment period (which are available via the Internet on the CMS Web site). We note that the national unadjusted payment rates and copayment rates shown in Addenda A and B to this final rule with comment period reflect the CY 2018 OPD fee schedule increase factor discussed in section II.B. of this final rule with comment period.

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

III. OPPS Ambulatory Payment Classification (APC) Group Policies

A. OPPS Treatment of New CPT and Level II HCPCS Codes

CPT and Level II HCPCS codes are used to report procedures, services, items, and supplies under the hospital OPPS. Specifically, CMS recognizes the following codes on OPPS claims:

  • Category I CPT codes, which describe surgical procedures and medical services;
  • Category III CPT codes, which describe new and emerging technologies, services, and procedures; and
  • Level II HCPCS codes, which are used primarily to identify products, supplies, temporary procedures, and services not described by CPT codes.

CPT codes are established by the American Medical Association (AMA) and the Level II HCPCS codes are established by the CMS HCPCS Workgroup. These codes are updated and changed throughout the year. CPT and HCPCS code changes that affect the OPPS are published both through the annual rulemaking cycle and through the OPPS quarterly update Change Requests (CRs). CMS releases new Level II HCPCS codes to the public or recognizes the release of new CPT codes by the AMA and makes these codes effective (that is, the codes can be reported on Medicare claims) outside of the formal rulemaking process via OPPS Start Printed Page 52412quarterly update CRs. Based on our review, we assign the new CPT and Level II HCPCS codes to interim status indicators (SIs) and APCs. These interim assignments are finalized in the OPPS/ASC final rules. This quarterly process offers hospitals access to codes that may more accurately describe items or services furnished and provides payment or more accurate payment for these items or services in a timelier manner than if we waited for the annual rulemaking process. We solicit public comments on these new codes and finalize our proposals related to these codes through our annual rulemaking process.

We note that, under the OPPS, the APC assignment determines the payment rate for an item, procedure, or service. Those items, procedures, or services not paid separately under the hospital OPPS are assigned to appropriate status indicators. Certain payment status indicators provide separate payment, while other payment status indicators do not. Section XI. of this final rule with comment period discusses the various status indicators used under the OPPS.

As we did in the CY 2018 OPPS/ASC proposed rule, in Table 11 below, we summarize our current process for updating codes through our OPPS quarterly update CRs, seeking public comments, and finalizing the treatment of these new codes under the OPPS.

Table 11—Comment Timeframe for New or Revised HCPCS Codes

OPPS quarterly update CRType of codeEffective dateComments soughtWhen finalized
April 1, 2017Level II HCPCS CodesApril 1, 2017CY 2018 OPPS/ASC proposed ruleCY 2018 OPPS/ASC final rule with comment period.
July 1, 2017Level II HCPCS CodesJuly 1, 2017CY 2018 OPPS/ASC proposed ruleCY 2018 OPPS/ASC final rule with comment period.
Category I (certain vaccine codes) and III CPT codesJuly 1, 2017CY 2018 OPPS/ASC proposed ruleCY 2018 OPPS/ASC final rule with comment period.
October 1, 2017Level II HCPCS CodesOctober 1, 2017CY 2018 OPPS/ASC final rule with comment periodCY 2019 OPPS/ASC final rule with comment period.
January 1, 2018Level II HCPCS CodesJanuary 1, 2018CY 2018 OPPS/ASC final rule with comment periodCY 2019 OPPS/ASC final rule with comment period.
Category I and III CPT CodesJanuary 1, 2018CY 2018 OPPS/ASC proposed ruleCY 2018 OPPS/ASC final rule with comment period.

1. Treatment of New HCPCS Codes That Were Effective April 1, 2017 for Which We Solicited Public Comments in the CY 2018 OPPS/ASC Proposed Rule

Through the April 2017 OPPS quarterly update CR (Transmittal 3728, Change Request 10005, dated March 3, 2017), we made effective five new Level II HCPCS codes for separate payment under the OPPS. In the CY 2018 OPPS/ASC proposed rule (82 FR 33601), we solicited public comments on the proposed APC and status indicator assignments for these Level II HCPCS codes, which were displayed in Table 13 of the proposed rule and are now listed in Table 12 of this final rule with comment period. Specifically, we solicited public comments on HCPCS codes C9484, C9485, C9486, C9487, and C9488. We note that HCPCS code C9487 was deleted on June 30, 2017, and replaced with HCPCS code Q9989, effective July 1, 2017. We indicated that the proposed payment rates for these codes were included in Addendum B to the proposed rule (which is available via the Internet on the CMS Web site).

Table 12—New Level II HCPCS Codes Effective April 1, 2017

CY 2017 HCPCS codeCY 2018 HCPCS codeCY 2018 long descriptorFinal CY 2018 SIFinal CY 2018 APC
C9484J1428Injection, eteplirsen, 10 mgG9484
C9485J9285Injection, olaratumab, 10 mgG9485
C9486J1627Injection, granisetron, extended-release, 0.1 mgG9486
C9487 *J3358Ustekinumab, for intravenous injection, 1 mgG9487
C9488C9488Injection, conivaptan hydrochloride, 1 mgG9488
* HCPCS code C9487, which was effective April 1, 2017, was deleted June 30, 2017 and replaced with HCPCS code Q9989 (Ustekinumab, for intravenous injection, 1 mg) effective July 1, 2017.

We did not receive any public comments on the proposed APC and status indicator assignments for the new Level II HCPCS codes implemented in April 2017. Therefore, we are finalizing the proposed APC and status indicator assignments for these codes, as indicated in Table 12 above. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes effective January 1, 2018. Their replacement codes are listed in Table 12 above. The final payment rates for these codes can be found in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site). In addition, the status indicator meanings can be found in Addendum A to this final rule with comment period (which is available via the Internet on the CMS Web site).Start Printed Page 52413

2. Treatment of New HCPCS Codes That Were Effective July 1, 2017 for Which We Solicited Public Comments in the CY 2018 OPPS/ASC Proposed Rule

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33602), through the July 2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017), we made 10 new Category III CPT codes and 13 Level II HCPCS codes effective July 1, 2017, and assigned them to appropriate interim OPPS status indicators and APCs. In the CY 2018 OPPS/ASC proposed rule, we solicited public comments on the proposed APC and status indicator assignments for CY 2018 for the CPT and Level II HCPCS codes implemented on July 1, 2017, all of which were displayed in Table 14 of the proposed rule, and are now listed in Table 13 of this final rule with comment period. We note that three of the new HCPCS codes effective July 1, 2017 replaced four existing HCPCS codes. Specifically, HCPCS code Q9986 replaced HCPCS code J1725 (Injection, hydroxyprogesterone caproate, 1 mg), HCPCS codes Q9987 and Q9988 replaced HCPCS code P9072 (Platelets, pheresis, pathogen reduced or rapid bacterial tested, each unit), and HCPCS code Q9989 replaced HCPCS code C9487 (Ustekinumab, for intravenous injection, 1 mg). With the establishment of HCPCS codes Q9986, Q9987, and Q9988, we made their predecessor HCPCS codes J1725 and P9072 inactive for reporting and revised the status indicators for both codes to “E1” (Not Payable by Medicare) effective July 1, 2017. In addition, because HCPCS code Q9989 describes the same drug as HCPCS code C9487, in the CY 2018 OPPS/ASC proposed rule, we proposed to continue the drug's pass-through payment status and to assign HCPCS code Q9989 to the same APC and status indicator as its predecessor HCPCS code C9487, as shown in Table 14 of the proposed rule. The proposed payment rates and status indicators for these codes, where applicable, were included in Addendum B to the proposed rule (which is available via the Internet on the CMS Web site).

We did not receive any public comments on the proposed APC and status indicator assignments for the new Category III CPT codes and Level II HCPCS codes implemented in July 2017. Therefore, we are finalizing the proposed APC and status indicator assignments for these codes, as indicated in Table 13 below. We note that several of the HCPCS C and Q-codes have been replaced with HCPCS J-codes effective January 1, 2018. Their replacement codes are listed in Table 13 below. The final payment rates for these codes can be found in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site). In addition, the status indicator meanings can be found in Addendum A to this final rule with comment period (which is available via the Internet on the CMS Web site).

Table 13—New Category III CPT and Level II HCPCS Codes Effective July 1, 2017

CY 2017 HCPCS codeCY 2018 HCPCS codeCY 2018 long descriptorFinal CY 2018 SIFinal CY 2018 APC
C9489J2326Injection, nusinersen, 0.1 mgG9489
C9490J0565Injection, bezlotoxumab, 10 mgG9490
C9745C9745Nasal endoscopy, surgical; balloon dilation of eustachian tubeJ15165
C9746C9746Transperineal implantation of permanent adjustable balloon continence device, with cystourethroscopy, when performed and/or fluoroscopy, when performedJ15377
C9747C9747Ablation of prostate, transrectal, high intensity focused ultrasound (HIFU), including imaging guidanceJ15376
K0553K0553Supply allowance for therapeutic continuous glucose monitor (CGM), includes all supplies and accessories, 1 month supply = 1 Unit Of ServiceYN/A
K0554K0554Receiver (monitor), dedicated, for use with therapeutic glucose continuous monitor systemYN/A
Q9984J7296Levonorgestrel-releasing intrauterine contraceptive system (Kyleena), 19.5 mgE1N/A
Q9985J1729Injection, hydroxyprogesterone caproate, not otherwise specified, 10 mgNN/A
Q9986J1726Injection, hydroxyprogesterone caproate (Makena), 10 mgK9074
Q9987P9100Pathogen(s) test for plateletsS1493
Q9988P9073Platelets, pheresis, pathogen reduced, each unitR9536
Q9989J3358Ustekinumab, for intravenous injection, 1 mgG9487
0469T0469TRetinal polarization scan, ocular screening with on-site automated results, bilateralE1N/A
0470T0470TOptical coherence tomography (OCT) for microstructural and morphological imaging of skin, image acquisition, interpretation, and report; first lesionMN/A
0471T0471TOptical coherence tomography (OCT) for microstructural and morphological imaging of skin, image acquisition, interpretation, and report; each additional lesion (List separately in addition to code for primary procedure)NN/A
0472T0472TDevice evaluation, interrogation, and initial programming of intra- ocular retinal electrode array (eg, retinal prosthesis), in person, with iterative adjustment of the implantable device to test functionality, select optimal permanent programmed values with analysis, including visual training, with review and report by a qualified health care professionalQ15743
0473T0473TDevice evaluation and interrogation of intra-ocular retinal electrode array (eg, retinal prosthesis), in person, including reprogramming and visual training, when performed, with review and report by a qualified health care professionalQ15742
0474T0474TInsertion of anterior segment aqueous drainage device, with creation of intraocular reservoir, internal approach, into the supraciliary spaceJ15492
0475T0475TRecording of fetal magnetic cardiac signal using at least 3 channels; patient recording and storage, data scanning with signal extraction, technical analysis and result, as well as supervision, review, and interpretation of report by a physician or other qualified health care professionalMN/A
Start Printed Page 52414
0476T0476TRecording of fetal magnetic cardiac signal using at least 3 channels; patient recording, data scanning, with raw electronic signal transfer of data and storageQ15734
0477T0477TRecording of fetal magnetic cardiac signal using at least 3 channels; signal extraction, technical analysis, and resultQ15734
0478T0478TRecording of fetal magnetic cardiac signal using at least 3 channels; review, interpretation, report by physician or other qualified health care professionalMN/A

3. Process for New Level II HCPCS Codes That Became Effective October 1, 2017 and New Level II HCPCS Codes That Will Be Effective January 1, 2018 for Which We Are Soliciting Public Comments in This CY 2018 OPPS/ASC Final Rule With Comment Period

As has been our practice in the past, we incorporate those new Level II HCPCS codes that are effective October 1 and January 1 in the final rule with comment period, thereby updating the OPPS for the following calendar year, as displayed in Table 11 of this final rule with comment period. These codes are released to the public through the October and January OPPS quarterly update CRs and via the CMS HCPCS Web site (for Level II HCPCS codes). For CY 2018, these codes are flagged with comment indicator “NI” in Addendum B to this OPPS/ASC final rule with comment period to indicate that we are assigning them an interim payment status which is subject to public comment. Specifically, the status indicators and the APC assignments for codes flagged with comment indicator “NI” are open to public comment in this final rule with comment period, and we will respond to these public comments in the OPPS/ASC final rule with comment period for the next year's OPPS/ASC update. In the CY 2018 OPPS/ASC proposed rule (82 FR 33603), we proposed to continue this process for CY 2018. Specifically, for CY 2018, we proposed to include in Addendum B to the CY 2018 OPPS/ASC final rule with comment period the following new HCPCS codes:

  • New Level II HCPCS codes effective October 1, 2017, that would be incorporated in the October 2017 OPPS quarterly update CR; and
  • New Level II HCPCS codes effective January 1, 2018, that would be incorporated in the January 2018 OPPS quarterly update CR.

As stated above, the October 1, 2017 and January 1, 2018 codes are flagged with comment indicator “NI” in Addendum B to this CY 2018 OPPS/ASC final rule with comment period to indicate that we have assigned these codes an interim OPPS payment status for CY 2018. We are inviting public comments on the interim status indicator and APC assignments for these codes, if applicable, that will be finalized in the CY 2019 OPPS/ASC final rule with comment period.

4. Treatment of New and Revised Category I and III CPT Codes That Will Be Effective January 1, 2018 for Which We Solicited Public Comments in the CY 2018 OPPS/ASC Proposed Rule

In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 through 66844), we finalized a revised process of assigning APC and status indicators for new and revised Category I and III CPT codes that would be effective January 1. Specifically, for the new/revised CPT codes that we receive in a timely manner from the AMA's CPT Editorial Panel, we finalized our proposal to include the codes that would be effective January 1 in the OPPS/ASC proposed rules, along with proposed APC and status indicator assignments for them, and to finalize the APC and status indicator assignments in the OPPS/ASC final rules beginning with the CY 2016 OPPS update. For those new/revised CPT codes that were received too late for inclusion in the OPPS/ASC proposed rule, we finalized our proposal to establish and use HCPCS G-codes that mirror the predecessor CPT codes and retain the current APC and status indicator assignments for a year until we can propose APC and status indicator assignments in the following year's rulemaking cycle. We note that even if we find that we need to create HCPCS G-codes in place of certain CPT codes for the MPFS proposed rule, we do not anticipate that these HCPCS G-codes will always be necessary for OPPS purposes. We will make every effort to include proposed APC and status indicator assignments for all new and revised CPT codes that the AMA makes publicly available in time for us to include them in the proposed rule, and to avoid the resort to HCPCS G-codes and the resulting delay in utilization of the most current CPT codes. Also, we finalized our proposal to make interim APC and status indicator assignments for CPT codes that are not available in time for the proposed rule and that describe wholly new services (such as new technologies or new surgical procedures), solicit public comments, and finalize the specific APC and status indicator assignments for those codes in the following year's final rule.

For the CY 2018 OPPS update, we received the CY 2018 CPT codes from AMA in time for inclusion in the CY 2018 OPPS/ASC proposed rule. The new, revised, and deleted CY 2018 Category I and III CPT codes were included in Addendum B to the CY 2018 OPPS/ASC proposed rule (which is available via the Internet on the CMS Web site). We noted in the proposed rule that the new and revised codes are assigned to new comment indicator “NP” to indicate that the code is new for the next calendar year or the code is an existing code with substantial revision to its code descriptor in the next calendar year as compared to the current calendar year with a proposed APC assignment, and that comments will be accepted on the proposed APC assignment and status indicator.

Further, in the CY 2018 OPPS/ASC proposed rule, we reminded readers that the CPT code descriptors that appear in Addendum B are short descriptors and do not fully describe the complete procedure, service, or item described by the CPT code. Therefore, we included the 5-digit placeholder codes and their long descriptors for the new and revised CY 2018 CPT codes in Addendum O to the proposed rule (which is available via the Internet on the CMS Web site) so that the public could adequately comment on our proposed APCs and status indicator assignments. We indicated that the 5-digit placeholder codes were included in Addendum O, specifically under the column labeled “CY 2018 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,” to the Start Printed Page 52415proposed rule. We stated that the final CPT code numbers will be included in the CY 2018 OPPS/ASC final rule with comment period. We noted that not every code listed in Addendum O is subject to comment. For the new and revised Category I and III CPT codes, we requested comments on only those codes that are assigned to comment indicator “NP”. We indicated that public comments would not be accepted for new Category I CPT laboratory codes that were not assigned to the “NP” comment indicator in Addendum O to the proposed rule. We stated that comments to these codes must be submitted at the Clinical Laboratory Fee Schedule (CLFS) Public Meeting, which was scheduled on July 31-August 1, 2017.

In summary, we solicited public comments on the proposed APC and status indicator assignments for the new and revised Category I and III CPT codes that will be effective January 1, 2018. The CPT codes were listed in Addendum B to the proposed rule with short descriptors only. We listed them again in Addendum O to the proposed rule with long descriptors. We also proposed to finalize the status indicator and APC assignments for these codes (with their final CPT code numbers) in the CY 2018 OPPS/ASC final rule with comment period.

Commenters addressed several of the new CPT codes that were assigned to comment indicator “NP” in Addendum B to the CY 2018 OPPS/ASC proposed rule. We have responded to those public comments in sections II.A.2.b. (Comprehensive APCs), III.D. (OPPS APC-Specific Policies), V. (OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals), and XII. (Updates to the ASC Payment System) of this CY 2018 OPPS/ASC final rule with comment period.

The final status indicators, APC assignments, and payment rates for the new CPT codes that are effective January 1, 2018 can be found in Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site). In addition, the status indicator meanings can be found in Addendum A to this final rule with comment period (which is available via the Internet on the CMS Web site).

B. OPPS Changes—Variations Within APCs

1. Background

Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered hospital outpatient department services. Section 1833(t)(2)(B) of the Act provides that the Secretary may establish groups of covered OPD services within this classification system, so that services classified within each group are comparable clinically and with respect to the use of resources. In accordance with these provisions, we developed a grouping classification system, referred to as Ambulatory Payment Classifications (APCs), as set forth in §  419.31 of the regulations. We use Level I and Level II HCPCS codes to identify and group the services within each APC. The APCs are organized such that each group is homogeneous both clinically and in terms of resource use. Using this classification system, we have established distinct groups of similar services. We also have developed separate APC groups for certain medical devices, drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy devices that are not packaged into the payment for the procedure.

We have packaged into the payment for each procedure or service within an APC group the costs associated with those items and services that are typically ancillary and supportive to a primary diagnostic or therapeutic modality and, in those cases, are an integral part of the primary service they support. Therefore, we do not make separate payment for these packaged items or services. In general, packaged items and services include, but are not limited to, the items and services listed in § 419.2(b) of the regulations. A further discussion of packaged services is included in section II.A.3. of this final rule with comment period.

Under the OPPS, we generally pay for covered hospital outpatient services on a rate-per-service basis, where the service may be reported with one or more HCPCS codes. Payment varies according to the APC group to which the independent service or combination of services is assigned. In the CY 2018 OPPS/ASC proposed rule (82 FR 33604), for CY 2018, we proposed that each APC relative payment weight represents the hospital cost of the services included in that APC, relative to the hospital cost of the services included in APC 5012 (Clinic Visits and Related Services). The APC relative payment weights are scaled to APC 5012 because it is the hospital clinic visit APC and clinic visits are among the most frequently furnished services in the hospital outpatient setting.

2. Application of the 2 Times Rule

Section 1833(t)(9)(A) of the Act requires the Secretary to review, not less often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Section 1833(t)(9)(A) of the Act also requires the Secretary to consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) the clinical integrity of the APC groups and the relative payment weights. We note that the HOP Panel recommendations for specific services for the CY 2018 OPPS and our responses to them are discussed in the relevant specific sections throughout this final rule with comment period.

In addition, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest cost for an item or service in the group is more than 2 times greater than the lowest cost for an item or service within the same group (referred to as the “2 times rule”). The statute authorizes the Secretary to make exceptions to the 2 times rule in unusual cases, such as 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).

Therefore, in accordance with section 1833(t)(2) of the Act and § 419.31 of the regulations, we annually review the items and services within an APC group to determine if there are any APC violations of the 2 times rule and whether there are any appropriate revisions to APC assignments that may be necessary or exceptions to be made. 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 have both greater 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 claims (or less than 1,000 claims) is negligible within Start Printed Page 52416the 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 which comprises less than 2 percent of the single major claims within an APC will have a negligible impact on the APC cost. In the CY 2018 OPPS/ASC proposed rule (81 FR 33604 through 33605), we proposed to make exceptions to this limit on the variation of costs within each APC group in unusual cases, such as low-volume items and services.

For the CY 2018 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 in Addendum B to the CY 2018 OPPS/ASC proposed rule. We noted that Addendum B did not appear in the printed version of the Federal Register as part of the CY 2018 OPPS/ASC proposed rule. Rather, it was published and made available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. In these cases, to eliminate a violation of the 2 times rule or to improve clinical and resource homogeneity, in the CY 2018 OPPS/ASC proposed rule (81 FR 33604 through 33605), 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 2018 included in the proposed rule are related to changes in costs of services that were observed in the CY 2016 claims data newly available for CY 2018 ratesetting. We also proposed changes to the status indicators for some procedure codes that were not specifically and separately discussed in the proposed rule. In these cases, we proposed to change the status indicators for these procedure codes because we believe that another status indicator would more accurately describe their payment status from an OPPS perspective based on the policies that we proposed for CY 2018. Addendum B to the CY 2018 OPPS/ASC proposed rule identified with the 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, 2017 OPPS Addendum B update (available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Addendum-A-and-Addendum-B-Updates.html). Addendum B to this final rule with comment period (available via the Internet on the CMS Web site) identifies with the “CH” comment indicator the final CY 2018 changes compared to the HCPCS codes' status as reflected in the October 2017 Addendum B update.

3. APC Exceptions to the 2 Times Rule

Taking into account the APC changes that we proposed for CY 2018, we reviewed all of the APCs to determine which APCs would not meet the requirements of the 2 times rule. We used the following criteria to evaluate whether to propose exceptions to the 2 times rule for affected APCs:

  • Resource homogeneity;
  • Clinical homogeneity;
  • Hospital outpatient setting utilization;
  • Frequency of service (volume); and
  • Opportunity for upcoding and code fragments.

Based on the CY 2016 claims data available for the CY 2018 proposed rule, we found 12 APCs with violations of the 2 times rule. We applied the criteria as described above to identify the APCs for which we proposed to make exceptions under the 2 times rule for CY 2018, and found that all of the 12 APCs we identified met the criteria for an exception to the 2 times rule based on the CY 2016 claims data available for the proposed rule. We did not include in that determination those APCs where a 2 times rule violation was not a relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS codes assigned to it that have similar geometric mean costs and do not create a 2 times rule violation. Therefore, we have only identified those APCs, including those with criteria-based costs, such as device-dependent CPT/HCPCS codes, with 2 times rule violations.

We note that, for cases in which a recommendation by the HOP Panel appears to result in or allow a violation of the 2 times rule, we may accept the HOP Panel's recommendation because those recommendations are based on explicit consideration (that is, a review of the latest OPPS claims data and group discussion of the issue) of resource use, clinical homogeneity, site of service, and the quality of the claims data used to determine the APC payment rates.

Table 16 of the proposed rule listed the 12 APCs for which we proposed to make exceptions under the 2 times rule for CY 2018 based on the criteria cited above and claims data submitted between January 1, 2016, and December 31, 2016, that were processed on or before December 31, 2016. We indicated that, for the final rule with comment period, we intended to use claims data for dates of service between January 1, 2016, and December 31, 2016, that were processed on or before June 30, 2017, and updated CCRs, if available.

Based on the updated final rule CY 2016 claims data used for this CY 2018 final rule with comment period, we were able to remedy 6 APC violations out of the 12 APCs that appeared in Table 16 of the CY 2018 OPPS/ASC proposed rule. Specifically, we found that the following 6 APCs no longer met the criteria for exception to the 2 times rule in this final rule with comment period:

  • APC 5161 (Level 1 ENT Procedures);
  • APC 5311 (Level 1 Lower GI Procedures);
  • APC 5461 (Level 1 Neurostimulator and Related Procedures);
  • APC 5573 (Level 3 Imaging with Contrast);
  • APC 5611 (Level 1 Therapeutic Radiation Treatment Preparation); and
  • APC 5735 (Level 5 Minor Procedures).

Secondly, based on our analysis of the final rule claims data, we found a total of 11 APCs with violations of the 2 times rule. Of these 11 total APCs, 6 were identified in the proposed rule and 5 are newly identified APCs. Specifically, we found the following 6 APCs from the proposed rule continued to have violations of the 2 times rule for this final rule with comment period:

  • APC 5112 (Level 2 Musculoskeletal Procedures);
  • APC 5521 (Level 1 Imaging without Contrast);
  • APC 5691 (Level 1 Drug Administration);
  • APC 5731 (Level 1 Minor Procedures);
  • APC 5771 (Cardiac Rehabilitation); and
  • APC 5823 (Level 3 Health and Behavior Services).

In addition, we found that the following 5 additional APCs violated the 2 times rule using the final rule with comment period claims data:

  • APC 5522 (Level 2 Imaging without Contrast);
  • APC 5524 (Level 4 Imaging without Contrast);
  • APC 5571 (Level 1 Imaging with Contrast);
  • APC 5721 (Level 1 Diagnostic Tests and Related Services); and
  • APC 5732 (Level 2 Minor Procedures).

Comment: Some commenters requested that CMS not adopt the exception to C-APCs, including C-APC Start Printed Page 524175112 (Level 2 Musculoskeletal Procedures), because they believed it would result in lowering the payments for the procedures assigned to C-APCs. According to the commenters, because C-APCs involve complex combinations of items and services where appropriate valuation is critical, CMS should not adopt exceptions that have the result of lowering the overall payment rate for associated procedures. Instead, as one commenter suggested, CMS should establish additional APC levels to avoid any exceptions to the 2 times rule.

Response: We do not agree that we should establish a new APC for every group that violates the 2 times rule. We believe that excepting certain APCs from the 2 times rule is necessary, especially for procedures assigned to the same APC based on clinical homogeneity. As we have seen throughout the years since the implementation of the OPPS on August 1, 2000, APCs excepted in one year are usually resolved the following year based on our analysis of the latest claims data used for ratesetting. For example, we listed C-APC 5165 (Level 5 ENT Procedures) in Table 19 of the CY 2016 OPPS/ASC final rule with comment period (80 FR 70374) as one of the APCs that violated the 2 times rule for CY 2016. However, this same APC no longer appeared in Table 9 of the CY 2017 OPPS/ASC final rule with comment period (81 FR 79614) as excepted from the 2 times rule. We believe that the anomalies seen in one year but not the next year for a given APC are the result of more accurate coding and charge master identification by HOPDs.

After considering the public comments we received on APC assignments and our analysis of the CY 2016 costs from hospital claims and cost report data available for this CY 2018 final rule with comment period, we are finalizing our proposals with some modifications. Specifically, we are finalizing our proposal to except 6 of the 12 proposed APCs from the 2 times rule for CY 2018 (APCs 5112, 5521, 5691, 5731, 5771, and 5823), and also excepting 5 additional APCs (APCs 5522, 5524, 5571, 5721, and 5732). As noted above, we were able to remedy the other 6 of the proposed rule 2 time violations in this final rule with comment period.

Table 14 below lists the 11 APCs that we are excepting from the 2 times rule for CY 2018 based on the criteria described earlier and a review of updated claims data for dates of service between January 1, 2016 and December 31, 2016, that were processed on or before June 30, 2017, and updated CCRs, if available. 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 Web site at: http://www.cms.gov.

Table 14—APC Exceptions to the 2 Times Rule for CY 2018

APCCY 2018 APC title
5112Level 2 Musculoskeletal Procedures.
5521Level 1 Imaging without Contrast.
5522Level 2 Imaging without Contrast.
5524Level 4 Imaging without Contrast.
5571Level 1 Imaging with Contrast.
5691Level 1 Drug Administration.
5721Level 1 Diagnostic Tests and Related. Services
5731Level 1 Minor Procedures.
5732Level 2 Minor Procedures.
5771Cardiac Rehabilitation.
5823Level 3 Health and Behavior Services.

C. New Technology APCs

1. Background

In the November 30, 2001 final rule (66 FR 59903), we finalized changes to the time period in which a service can be eligible for payment under a New Technology APC. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to an appropriate clinical APC. This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient data upon which to base a decision for reassignment have not been collected.

For CY 2017, there are 51 New Technology APC levels, ranging from the lowest cost band assigned to APC 1491 (New Technology—Level 1A ($0-$10)) through the highest cost band assigned to APC 1906 (New Technology—Level 51 ($140,001-$160,000)). In the CY 2004 OPPS final rule with comment period (68 FR 63416), we restructured the New Technology APCs to make the cost intervals more consistent across payment levels and refined the cost bands for these APCs to retain two parallel sets of New Technology APCs, one set with a status indicator of “S” (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment) and the other set with a status indicator of “T” (Significant Procedure, Multiple Reduction Applies. Paid under OPPS; separate APC payment). These current New Technology APC configurations allow us to price new technology services more appropriately and consistently.

We note that the cost bands for the New Technology APCs, specifically, APCs 1491 through 1599 and 1901 through 1906, vary with increments ranging from $10 to $19,999. These cost bands identify the APCs to which new technology procedures and services with estimated service costs that fall within those cost bands are assigned under the OPPS. Payment for each APC is made at the mid-point of the APC's assigned cost band. For example, payment for New Technology APC 1507 (New Technology—Level 7 ($501-$600)) is made at $550.50.

Every year, we receive several requests for higher payment amounts under the New Technology APCs for specific procedures paid under the OPPS because they require the use of expensive equipment. As we did in the CY 2018 OPPS/ASC proposed rule, we are taking this opportunity to reiterate our response, in general, to the issue of hospitals' capital expenditures as they relate to the OPPS and Medicare, as specified in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70374).

Under the OPPS, one of our goals is to make payments that are appropriate for the services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is budget neutral and increases are limited to the annual hospital inpatient market basket increase. We believe that our payment rates generally reflect the costs that are associated with providing care to Medicare beneficiaries. Furthermore, we believe that our payment rates are adequate to ensure access to services (80 FR 70374).

For many emerging technologies, there is a transitional period during which utilization may be low, often because providers are first learning about the techniques and their clinical utility. Quite often, parties request that Medicare make higher payment amounts under the New Technology APCs for new procedures in that transitional phase. These requests, and their accompanying estimates for Start Printed Page 52418expected total patient utilization, often reflect very low rates of patient use of expensive equipment, resulting in high per use costs for which requesters believe Medicare should make full payment. Medicare does not, and we believe should not, assume responsibility for more than its share of the costs of procedures based on projected utilization for Medicare beneficiaries and does not set its payment rates based on initial projections of low utilization for services that require expensive capital equipment. For the OPPS, we rely on hospitals to make informed business decisions regarding the acquisition of high-cost capital equipment, taking into consideration their knowledge about their entire patient base (Medicare beneficiaries included) and an understanding of Medicare's and other payers' payment policies. (We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68314) for further discussion regarding this payment policy.)

We note that, in a budget neutral environment, payments may not fully cover hospitals' costs in a particular circumstance, including those for the purchase and maintenance of capital equipment. We rely on hospitals to make their decisions regarding the acquisition of high-cost equipment with the understanding that the Medicare program must be careful to establish its initial payment rates, including those made through New Technology APCs, for new services that lack hospital claims data based on realistic utilization projections for all such services delivered in cost-efficient hospital outpatient settings. As the OPPS acquires claims data regarding hospital costs associated with new procedures, we regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures as they transition into mainstream medical practice (77 FR 68314).

2. Revised and Additional New Technology APC Groups

As stated earlier, for CY 2017, there are currently 51 levels of New Technology APCs. To improve our ability to have payments for services over $100,000 more closely match the cost of the service, in the CY 2018 OPPS/ASC proposed rule (82 FR 33606), for CY 2018, we proposed to narrow the increments for New Technology APCs 1901-1906 from $19,999 cost bands to $14,999 cost bands. We also proposed to add New Technology APCs 1907 and 1908 (New Technology Level 52 ($145,001-$160,000), which would allow for an appropriate payment of retinal prosthesis implantation procedures, which is discussed later in this section. Table 17 of the proposed rule included the complete list of the proposed modified and additional New Technology APC groups for CY 2018.

We did not receive any public comments on our proposal. Therefore, we are finalizing the proposal, without modification. Table 15 below includes the complete list of the final modified and additional New Technology APC groups for CY 2018.

Table 15—CY 2018 Additional New Technology APC Groups

CY 2018 APCCY 2018 APC titleCY 2018 SIUpdated or new APC
1901New Technology—Level 49 ($100,001-$115,000)SUpdated.
1902New Technology—Level 49 ($100,001-$115,000)TUpdated.
1903New Technology—Level 50 ($115,001-$130,000)SUpdated.
1904New Technology—Level 50 ($115,001-$130,000)TUpdated.
1905New Technology—Level 51 ($130,001-$145,000)SUpdated.
1906New Technology—Level 51 ($130,001-$145,000)TUpdated.
1907New Technology—Level 52 ($145,001-$160,000)SNew.
1908New Technology—Level 52 ($145,001-$160,000)TNew.

The final payment rates for New Technology APCs 1901 through 1908 are included in Addendum A to this final rule with comment period (which is available via the Internet on the CMS Web site).

3. Procedures Assigned to New Technology APC Groups for CY 2018

As we explained in the CY 2002 OPPS final rule with comment period (66 FR 59902), we generally retain a procedure in the New Technology APC to which it is initially assigned until we have obtained sufficient claims data to justify reassignment of the procedure to a clinically appropriate APC.

In addition, in cases where we find that our initial New Technology APC assignment was based on inaccurate or inadequate information (although it was the best information available at the time), where we obtain new information that was not available at the time of our initial New Technology APC assignment, or where the New Technology APCs are restructured, we may, based on more recent resource utilization information (including claims data) or the availability of refined New Technology APC cost bands, reassign the procedure or service to a different New Technology APC that more appropriately reflects its cost (66 FR 59903).

Consistent with our current policy, for CY 2018, in the CY 2018 OPPS/ASC proposed rule (82 FR 33606), we proposed to retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment of the service to a clinically appropriate APC. The flexibility associated with this policy allows us to reassign a service from a New Technology APC in less than 2 years if sufficient claims data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient claims data upon which to base a decision for reassignment have not been obtained (66 FR 59902).

a. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APCs 1537, 5114, and 5414)

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33607), currently, there are four CPT/HCPCS codes that describe magnetic resonance image guided high intensity focused ultrasound (MRgFUS) procedures, three of which we proposed to continue to assign to standard APCs and one of which we proposed to continue to assign to a New Technology APC for CY 2018. These codes include CPT codes 0071T, 0072T, and 0398T, and HCPCS code C9734. CPT codes 0071T and 0072T are used for the treatment of uterine fibroids, CPT code 0398T is used for the treatment of essential Start Printed Page 52419tremor, and HCPCS code C9734 is used for pain palliation for metastatic bone cancer.

As shown in Table 18 of the proposed rule, and as listed in Addendum B of the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT codes 0071T and 0072T to APC 5414 (Level 4 Gynecologic Procedures), with a proposed payment rate of approximately $2,189 for CY 2018. We also proposed to continue to assign the APC to status indicator “J1” (Hospital Part B services paid through a comprehensive APC) to indicate that all covered Part B services on the claim are packaged with the payment for the primary “J1” service for the claim, except for services assigned to OPPS status indicator “F”, “G”, “H”, “L”, and “U”; ambulance services; diagnostic and screening mammography; all preventive services; and certain Part B inpatient services. In addition, we proposed to continue to assign HCPCS code C9734 (Focused ultrasound ablation/therapeutic intervention, other than uterine leiomyomata, with magnetic resonance (mr) guidance) to APC 5114 (Level 4 Musculoskeletal Procedures), with a proposed payment rate of approximately $5,385 for CY 2018. We also proposed to continue to assign HCPCS code C9734 to status indicator “J1”.

Further, we proposed to continue to assign CPT code 0398T to APC 1537 (New Technology—Level 37 ($9,501-$10,000)), with a proposed payment rate of $9,750.50 for CY 2018. At the time the proposed rule was developed, there was only one claim for CPT code 0398T with a geometric mean cost of $27,516. We referred readers to Addendum B to the proposed rule for the proposed payment rates for all codes reportable under the OPPS. Addendum B is available via the Internet on the CMS Web site.

Comment: Several commenters stated that the proposed payment rate for CPT code 0398T is too low and recommended that CPT code 0398T be assigned to either New Technology APC 1578 (New Technology—Level 41 ($25,001-$30,000)) or APC 5464 (Level 4 Neurostimulator and Related Procedures), which have payment rates closer to the reported cost of the procedure of $27,500 based on the one claim available at the time of the development of the proposed rule. Commenters also noted that the resources required for the procedure described by CPT code 0398T are substantially more than the resources required for the procedure described by CPT code C9734, which had been used by CMS to attempt to model the cost of the procedure described by CPT code 0398T.

Response: We appreciate the concerns of the commenters and, for the reasons set forth below, agree that the proposed payment rate for CPT code 0398T may be too low and the procedure should be reassigned to a different APC. The proposed payment rate for CPT code 0398T was based on the payment rate for HCPCS code C9734 because the MRgFUS equipment used in the performance of the procedure described by CPT code 0398T is very similar to the MRgFUS equipment used in the performance of the procedure described by HCPCS code C9734. Both machines are made by the same manufacturer (81 FR 79642). However, based on information from the manufacturer, resources involved for the procedure described by CPT code 0398T appear to be higher than those involved for the procedure described by HCPCS code C9734. In addition, we still have concerns that the costs reported from the one claim for the procedure described by CPT code 0398T may not accurately reflect the geometric mean costs of the procedure. However, the geometric mean cost of $29,254 for the one claim means the cost of CPT code 0398T is substantially higher than the proposed payment rate of $9,750.50. We note that, for CY 2017, the manufacturer indicated that an appropriate payment for the procedure described by CPT code 0398T would be approximately $18,000 and that either a New Technology APC paying that amount or assignment to clinical APC 5463 (Level 3 Neurostimulator and Related Procedures) would be appropriate. Based on the presence of only one claim along with the reported costs associated with the procedure described by CPT code 0398T presented to us last year by the manufacturer, we believe that it is appropriate to assign the procedure described by CPT code 0398T to APC 1576 (New Technology—Level 39 ($15,001-$20,000)), with a payment rate of $17,500.50 for CY 2018. The continued New Technology APC assignment will allow time to collect more claims data before assigning CPT code 0398T to a clinical APC.

Comment: One commenter supported the proposal to assign CPT code C9734 to APC 5114.

Response: We appreciate the commenter's support.

In summary, after consideration of the public comments we received, we are modifying our proposal for the APC assignment of CPT code 0398T. Instead of continuing to assign this code to New Technology APC 1537 (New Technology—Level 37 ($9,501-$10,000)), with a payment rate of $9,750.50, for CY 2018, we are reassigning CPT code 0398T to New Technology APC 1576 (New Technology—Level 39 ($15,001-$20,000)), with a payment rate of $17,500.50. In addition, we are finalizing our proposal, without modification, to reassign HCPCS code C9734 to APC 5114. We did not receive any public comments related to our proposal for CPT codes 0071T and 0072T. Therefore, we are finalizing our proposal to continue to assign these CPT codes to APC 5414 without modification. Table 16 below lists the final CY 2018 status indicator and APC assignments for the magnetic resonance image guided high intensity focused ultrasound (MRgFUS) procedures. We refer readers to Addendum B of this final rule with comment period for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the Internet on the CMS Web site.

Table 16—CY 2018 Status Indicator (SI) and APC Assignment for the Magnetic Resonance Image Guided High Intensity Focused Ultrasound (MRgFUS) Procedures

CPT/HCPCS codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
0071TFocused ultrasound ablation of uterine leiomyomata, including mr guidance; total leiomyomata volume less than 200 cc of tissueJ15414$2,084.59J15414Refer to OPPS Addendum B.
Start Printed Page 52420
0072TFocused ultrasound ablation of uterine leiomyomata, including mr guidance; total leiomyomata volume greater or equal to 200 cc of tissueJ154142,084.59J15414Refer to OPPS Addendum B.
0398TMagnetic resonance image guided high intensity focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial for movement disorder including stereotactic navigation and frame placement when performedS15379,750.50S1576Refer to OPPS Addendum B.
C9734Focused ultrasound ablation/therapeutic intervention, other than uterine leiomyomata, with magnetic resonance (mr) guidanceJ151145,219.36J15114Refer to OPPS Addendum B.

c. Retinal Prosthesis Implant Procedure

CPT code 0100T (Placement of a subconjunctival retinal prosthesis receiver and pulse generator, and implantation of intra-ocular retinal electrode array, with vitrectomy) describes the implantation of a retinal prosthesis, specifically, a procedure involving the use of the Argus® II Retinal Prosthesis System. This first retinal prosthesis was approved by the FDA in 2013 for adult patients diagnosed with advanced retinitis pigmentosa. Pass-through payment status was granted for the Argus® II device under HCPCS code C1841 (Retinal prosthesis, includes all internal and external components) beginning October 1, 2013, and this status expired on December 31, 2015. We note that after pass-through payment status expires for a medical device, the payment for the device is packaged into the payment for the associated surgical procedure. Consequently, for CY 2016, the device described by HCPCS code C1841 was assigned to OPPS status indicator “N” to indicate that payment for the device is packaged and included in the payment rate for the surgical procedure described by CPT code 0100T. For CY 2016, CPT code 0100T was assigned to New Technology APC 1599 with a payment rate of $95,000, which was the highest paying New Technology APC for that year. This payment includes both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841). However, stakeholders (including the device manufacturer and hospitals) believed that the CY 2016 payment rate for the procedure involving the Argus® II System was insufficient to cover the hospital cost of performing the procedure, which includes the cost of the retinal prosthesis with a retail price of approximately $145,000.

For CY 2017, analysis of the CY 2015 OPPS claims data used for the CY 2017 final rule with comment period showed 9 single claims (out of 13 total claims) for CPT code 0100T, with a geometric mean cost of approximately $142,003 based on claims submitted between January 1, 2015, through December 31, 2015, and processed through June 30, 2016. Based on the CY 2015 OPPS claims data available for the final rule with comment period and our understanding of the Argus® II procedure, we reassigned CPT code 0100T from New Technology APC 1599 to New Technology APC 1906, with a final payment rate of $150,000.50 for CY 2017. We noted that this payment rate included the cost of both the surgical procedure (CPT code 0100T) and the retinal prosthesis device (HCPCS code C1841).

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33607 through 33608), for the CY 2018 update, analysis of the CY 2016 OPPS claims data used for the CY 2018 proposed rule showed 3 single claims (out of 3 total claims) for CPT code 0100T, with a geometric mean cost of approximately $116,239 based on the claims submitted between January 1, 2016 through December 31, 2016, and processed through December 31, 2016. We stated in the proposed rule that, for the CY 2018 OPPS/ASC final rule with comment period, the final payment rate would be based on claims submitted between January 1, 2016 and December 31, 2016, and processed through June 30, 2017.

In the proposed rule, based on the CY 2016 OPPS claims data available, which showed a geometric mean cost of approximately $116,239, we proposed to reassign the Argus® II procedure to a New Technology APC with a payment band that covers the geometric mean cost of the procedure. Therefore, we proposed to reassign CPT code 0100T to APC 1904 (New Technology—Level 50 ($115,001-$130,000)), with a proposed payment of $122,500.50 for CY 2018. We invited public comments on this proposal.

Comment: One commenter, the manufacturer, opposed the proposal to reassign CPT code 0100T to APC 1904, with a proposed payment of $122,500.50 for CY 2018. Instead, the commenter requested that CMS reassign CPT code 0100T to a New Technology APC that would establish a payment rate near the CY 2017 payment rate of $150,000.50. The commenter stated that the estimated cost of the service generated from 3 claims reported in CY 2016 is much lower than the actual cost of the procedure. The commenter believed the lower cost of the procedure described by CPT code 0100T is a result of CMS' decision to set the payment rate of the procedure at $95,000 for CY 2016 based on 2 claims, for which the submitting hospital stated the charges reported were mistakenly low. The commenter asserted that the lower Start Printed Page 52421payment rate forced the manufacturer of the Argus® II to provide a substantial discount for the device, which is reflected in the lower reported cost for the Argus® II procedure in CY 2016. This commenter and a second commenter were concerned with the high level of variation in payment for a low volume service like the Argus® II procedure from year to year. The commenters requested payment of approximately $150,000 for CPT code 0100T in CY 2018 to break the cycle of extremely volatile year-to-year shifts of the payment for the procedure described by this CPT code and noted its expectation that claims for CY 2017 (which would be used for the CY 2019 rulemaking) would reflect a significantly higher average cost than those for CY 2016.

Response: We understand the concerns of the commenters. The reported cost of the Argus® II procedure based on the updated CY 2016 hospital outpatient claims data, which include additional claims received after issuance of the CY 2018 proposed rule and finalized as of June 30, 2017, is approximately $94,455, which is more than $55,000 less than the payment rate for the procedure in CY 2017. We note that the costs of the Argus® II procedure are extraordinarily high compared to many other procedures paid under the OPPS. In addition, the number of claims submitted has, to date, been very low and has not exceeded 10 claims. We believe it is important to mitigate significant payment differences, especially shifts of several tens of thousands of dollars, while also basing payment rates on available costs information and claims data. In CY 2016, the payment rate for the Argus® II procedure was $95,000.50. The payment rate increased to $150,000.50 in CY 2017. For CY 2018, we proposed a payment rate of $122,500.50 based on the most recent claims data available at the time of the development of the proposed rule. However, if we were to assign the payment rate based on updated final rule claims data, the payment rate would decrease, to $95,000.50 for CY 2018, a decrease of $55,000 relative to CY 2017. We are concerned that these large changes in payment could potentially create an access to care issue for the Argus® II procedure. While we believe that the proposed payment rate of $122,500.50 is a significant decrease, we believe that it would be appropriate to finalize the proposed rate to mitigate a much sharper decline in payment from one year to the next (as well as from the proposed rule to the final rule).

In accordance with section 1833(t)(2)(B) of the Act, we must establish that services classified within each APC are comparable clinically and with respect to the use of resources. Accordingly, we are using 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 proposed rate for this procedure, despite the lower geometric mean costs available in the claims data used for this final rule with comment period. As stated earlier, we believe that this situation is unique, given the high cost and very limited number of claims for the procedure. Therefore, for CY 2018, we are reassigning the Argus® II procedure to APC 1904 (New Technology—Level 50 ($115,001-$130,000)). This APC assignment will establish a payment rate for the Argus® II procedure of $122,500.50, which is the arithmetic mean of the payment rates for the service for CY 2016 and CY 2017. As we do each year, we acquire 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 like the Argus® II procedure as they transition into mainstream medical practice (77 FR 68314).

After consideration of the public comments we received, we are finalizing our proposal to reassign CPT code 0100T to APC 1904 through use of our equitable adjustment authority. We are reassigning CPT code 0100T from APC 1906 (New Technology—Level 51 ($140,001-$160,000)), which has a final payment rate of $150,000.50 for CY 2017, to APC 1904 (New Technology—Level 50 $115,001-$130,000)), which has a final payment rate of $122,500.50 for CY 2018. We note this payment includes both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841).

d. Pathogen Test for Platelets

As stated in the CY 2018 OPPS/ASC proposed rule (82 FR 33608), the CMS HCPCS Workgroup established HCPCS code Q9987 (Pathogen(s) test for platelets), effective July 1, 2017. HCPCS code Q9987 will be used to report any test used to identify bacterial or other pathogen contamination in blood platelets. Currently, there is one test approved by the FDA that is described by HCPCS code Q9987. The test is a rapid bacterial test, and the manufacturer estimates the cost of the test to be between $26 and $35. HCPCS code Q9987 was established after concerns from blood and blood product stakeholders that the previous CPT code used to describe pathogen tests for platelets, CPT code P9072 (Platelets, pheresis, pathogen reduced or rapid bacterial tested, each unit), inappropriately described rapid bacterial testing by combining the test with the pathogen reduction of platelets. CPT code P9072 is inactive effective on July 1, 2017.

In the CY 2018 OPPS/ASC proposed rule, we sought more information on the actual costs of pathogen tests for platelets before assigning HCPCS code Q9987 to a clinical APC. Effective July 1, 2017, HCPCS code Q9987 is assigned to New Technology APC 1493 (New Technology—Level 1C ($21-$30)), with a payment rate of $25.50. We proposed to continue to assign HCPCS code Q9987 to New Technology APC 1493, with a proposed payment rate of $25.50, until such time as claims data are available to support the assignment to a clinical APC. We invited public comments on this proposal.

Comment: Two commenters supported the proposal to continue to provide separate payment for HCPCS code Q9987.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to continue separate payment for HCPCS code Q9987 for CY 2018, with a modification that HCPCS code Q9987 will be replaced by HCPCS code P9100 (Pathogen(s) test for platelets). Table 17 below contains more information on the coding change.

Table 17—Replacement Code for HCPCS Code Q9987 as of January 1, 2018

CY 2017 HCPCS codeCY 2018 HCPCS codeCY 2018 long descriptorFinal CY 2018 SIFinal CY 2018 APC
Q9987P9100Pathogen(s) test for plateletsS1493
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e. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)

For CY 2018, the AMA CPT Editorial Panel established four new CPT codes for fractional flow reserve derived from computed tomography (FFRCT). Table 18 below lists the new CPT codes along with their complete descriptors. These codes were listed in Addendum B and Addendum O to the CY 2018 OPPS/ASC proposed rule (which is available via the Internet on the CMS Web site). Addendum B included the proposed status indicator assignments for the new codes and their assignment to comment indicator “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). Addendum O included the proposed/placeholder CY 2018 CPT codes and the long descriptors.

We note that the CPT code descriptors that appeared in Addendum B were short descriptors and did not fully describe the complete procedure, service, or item identified for the CPT codes. Therefore, we included the 5-digit placeholder codes and their long descriptors in Addendum O to the proposed rule, specifically under the column labeled “CY 2018 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,” so that the public could adequately comment on our proposed APC and status indicator assignments. We also indicated that the final CPT code numbers would be included in this CY 2018 OPPS/ASC final rule with comment period. The final CPT code numbers, along with their corresponding 5-digit placeholder codes, can be found in Table 19 below.

As displayed in Table 18 and in Addendum B of the CY 2018 OPPS/ASC proposed rule, we proposed to assign CPT codes 0501T and 0504T to status indicator “M” (Not paid under OPPS; Items and Services Not Billable to the MAC) to indicate that these services are not paid under the OPPS, and to assign CPT codes 0502T and 0503T to status indicator “N” (packaged) to indicate that the payment for these services is packaged into the primary service or procedure that is reported with the codes.

Table 18—Proposed CY 2018 Status Indicator (SI) Assignment for the New FFRCT CPT Codes Effective January 1, 2018

CPT codeCY 2018 OPPS/ASC proposed rule placeholder codeLong descriptorProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment
0501T02X4TNon-invasive 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; data preparation and transmission, analysis of fluid dynamics and simulated maximal coronary hyperemia, generation of estimated FFR model, with anatomical data review in comparison with estimated FFR model to reconcile discordant data, interpretation and reportMN/AN/A
0502T02X5TNon-invasive 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; data preparation and transmissionNN/AN/A
0503T02X6TNon-invasive 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 modelNN/AN/A
0504T02X7TNon-invasive 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; anatomical data review in comparison with estimated FFR model to reconcile discordant data, interpretation and reportMN/AN/A

According to the FDA, FFRCT uses post-processing software to create “a mathematically derived quantity, computed from simulated pressure, velocity and blood flow information obtained from a 3D computer model generated from static coronary CT images.” [1] FFRCT is performed outside the outpatient hospital setting by HeartFlow, which uses proprietary software to conduct the analysis. Hospital outpatient providers use industry-leading protocols and technologies at every step to ensure protection of patient data and that the CT images are securely transferred to HeartFlow.[2] After FFRCT is performed, a report is generated that provides fractional flow reserve values throughout the coronary blood vessels, which allows providers to determine treatment strategies based on the findings of the report while considering the patient's medical history, symptoms, and results of other diagnostic tests.

The developer of FFRCT first submitted an application for the procedure to be given a temporary Start Printed Page 52423procedure code and assigned to a New Technology APC in March 2016. CMS denied the developer's application because we considered the FFRCT procedure to be an image guidance, processing, supervision, or interpretation service whose payment should be packaged into the payment for the related computed tomography service, in accordance with our regulations at 42 CFR 419.2(b)(13). The developer then filed a New Technology APC reconsideration request in March 2017 asking that CMS reverse its denial of the developer's application to have the FFRCT assigned to a New Technology APC. We reviewed the reconsideration request and denied the request for the same reason as we did in March 2016.

In a New Technology APC application for HeartFlow for CY 2018, the developer of the FFRCT service proposed that the service be reported with CPT code 0503T (Non-invasive 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) and requested that the service be assigned to APC 1517 (New Technology—Level 17 ($1,501-$1,600)), with a payment rate of $1,550.50. Because both the initial New Technology APC application and the reconsideration request were denied, we did not describe the associated New Technology APC application for HeartFlow in the CY 2018 OPPS/ASC proposed rule.

Comment: Several commenters, including the developer of HeartFlow and some clinicians who have experience with it, supported having a FFRCT service paid as a separate service and not packaged into the payment for the coronary computed tomography angiography. The commenters stated that FFRCT is performed separately from a coronary computed tomography angiography by an independent testing company that is not affiliated with any outpatient hospital provider and is performed at locations owned by the testing company. These commenters noted that the service may be performed several days or weeks after the original coronary computed tomography angiography is performed. Also, commenters noted that several physician societies involved in cardiac care recognize FFRCT as a separate service from a coronary computed tomography angiography and requested that new CPT codes 0501T, 0502T, 0503T, and 0504T be established for FFRCT services, effective January 1, 2018. The commenters stated that the physician societies and the AMA determined that a coronary computed tomography angiography and a FFRCT service are not connected services.

Commenters asserted that a FFRCT service provides information that cannot be obtained from standard analysis of a coronary computed tomography angiography image. Several commenters stated that FFRCT services can improve the quality of screening for coronary artery disease (CAD) while reducing costs. That is, the commenters stated that, unlike a coronary computed tomography angiography service, which merely produces images, the FFRCT service is able to directly produce FFRCT values by creating a 3-D model of the patient's coronary arteries using the previously acquired image. Moreover, the commenters contended that, because the FFRCT service does not produce images, it is improper to package the costs of FFRCT into the payment for the associated coronary computed tomography angiography service.

Commenters stated that, many times, a coronary computed tomography angiography indicates that a beneficiary may potentially have CAD and that without FFRCT, providers will often request an invasive coronary angiogram to verify the presence of CAD. In many cases, the invasive coronary angiogram finds no occurrence of CAD. FFRCT services can provide analytic services not otherwise available to determine fractional flow rates in coronary arteries using the original coronary computed tomography angiography image and show whether a beneficiary has CAD without performing a coronary procedure.

The developer also stated that hospitals incur a cost charged by HeartFlow of $1,500 to perform the FFRCT analysis, and certain other modest costs (for example, overhead for interpretation and entering results into medical record). Therefore, the commenters stated that bundling the payment for FFRCT with the payment for the coronary computed tomography angiography imaging service would prevent hospitals from using FFRCT because the payment rate for the bundled coronary computed tomography angiography service would be less than $300. One commenter (the developer) requested that the service be assigned to APC 1517 (New Technology—Level 17 ($1,501-$1,600)), with a payment rate of $1,550.50.

Some commenters, including the developer, stated that CMS did not properly interpret the regulation at 42 CFR 419.2(b)(13) in its previous decisions to deny the FFRCT application and reconsideration request to receive separate payment in a New Technology APC. Specifically, the FFRCT developer and other commenters stated that the FFRCT service was not an image guidance service because CMS stated in prior preamble language that an image guidance service must produce images. The commenters stated that a FFRCT service does not produce images, but instead produces FFR values. They stated that the FFRCT service is also not an image processing service because such processing services help to compile diagnostic data to create an image, and noted that, although the FFRCT service analyzes image data, it is not used to construct an anatomic image. In addition, the commenters asserted that the FFRCT service is not an imaging supervision or interpretation service. The commenters believed that imaging supervision and interpretation services should be performed on the same day and at the provider location as the independent imaging service; whereas the FFRCT service can be performed days or weeks after the original coronary computed tomography angiography service is performed and is performed in a specialized location outside of hospital. In addition, the commenters stated that imaging supervision and interpretation services are for radiological services that are mostly billed with the CPT radiological code set (CPT codes 70000-79999) and the FFRCT service is not a radiological service and does not involve supervision or interpretation.

Response: We appreciate the comments we have received about the FFRCT service. We have reviewed our image packaging regulations under 42 CFR 419.2(b)(13). This regulation states, in relevant part, that in determining the packaged costs for hospital outpatient prospective payment rates, the prospective payment system establishes a national payment rate, standardized for geographic wage differences, that includes operating and capital-related costs that are integral, ancillary, supportive, dependent, or adjunctive to performing a procedure or furnishing a service on an outpatient basis. In general, these packaged costs may include, but are not limited to, among other items and services, image guidance, processing, supervision, and interpretation services, the payment for which are packaged or conditionally packaged into the payment for the related procedures or services.

After reviewing the public comments, we agree with the commenters that the Start Printed Page 52424FFRCT service is not image guidance or supervision because FFRCT does not produce images, does not appear to be a supportive guidance service that aids in the performance of an independent procedure, and, unlike typical supervision services, is not generally reported when the initial image is acquired. However, we are concerned that it may be image processing and/or interpretation. We discuss these concerns below.

With respect to image processing, in the CY 2008 OPPS/ASC interim and final rule with comment period, we stated that an “image processing service processes and integrates diagnostic test data that were captured during another independent procedure, usually one that is separately payable under the OPPS. The image processing service is not necessarily provided on the same date of service as the independent procedure. In fact, several of the image processing services that we proposed to package for CY 2008 do not need to be provided face-to-face with the patient in the same encounter as the independent service” (72 FR 66625). In addition, we stated that we believed it was important to package payment for supportive dependent services that accompany independent services but that may not need to be provided face-to-face with the patient in the same encounter because the supportive services utilize data that were collected during the preceding independent services and packaging their payment encourages the most efficient use of hospital resources. We noted that we were particularly concerned with any OPPS payment policies that could encourage certain inefficient and more costly service patterns. In addition, we stated that packaging encourages hospitals to establish protocols that ensure that services are furnished only when they are medically necessary and to carefully scrutinize the services ordered by practitioners to minimize unnecessary use of hospital resources (72 FR 66625).

FFRCT services necessarily require the use of the prior coronary computed tomography angiography image; the fact that the FFRCT service is done on a different date, at a different site, and by nonhospital staff does not, in and of itself, mean that the service is separate and distinct, from the CCTA. This is especially true because it is using a prior image acquired by the hospital for the patient and is used for the same purpose to diagnose CAD.

With respect to imaging interpretation, as stated in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66630), we define “imaging supervision and interpretation codes” as HCPCS codes for services that are defined as “radiological supervision and interpretation” in the radiology series, codes 70000 through 79999 of the book of AMA CPT codes, with the addition of some services in other code ranges of CPT, Category III CPT tracking codes, or Level II HCPCS codes that are clinically similar or directly crosswalk to codes defined as radiological supervision and interpretation services in the CPT radiology range. The current CPT FFRCT codes are Category III codes, and we believe they may be clinically similar to codes in the 70000 through 79999 range of the AMA book of CPT codes.

Nonetheless, we were persuaded by the commenters that the FFRCT service is a separate and distinct service from the original coronary computed tomography angiography service and should receive separate payment. Specifically, the commenters provided additional details since the denial of the new technology reconsideration request that FFRCT is not covered by the image packaging regulations under 42 CFR 419.2(b)(13). Most of the additional detail focuses on whether FFRCT is an image processing service. In particular, the FFRCT service generates data on FFR values that can only be obtained by performing the FFRCT service. Accordingly, we now believe that the FFRCT service should not be considered to be an image processing service because the diagnostic output of the FFRCT service yields functional values (that is, FFR values), which reflect the drop in pressure across a narrowing in a coronary artery as opposed to anatomic images. The CY 2008 OPPS/ASC final rule with comment period (72 FR 66625) states that image processing covers “supportive dependent services to process and integrate diagnostic test data in the development of images, indicating that an image processing service must help develop or otherwise visually enhance an image and the FFRCT service does neither. Further, we agree that the quantitative diagnostic information about the function of the coronary arteries produced by the FFRCT service is not possible to derive from examining anatomic images of the arteries. Additionally, we agree with the commenters that the FFRCT service does not support the diagnostic output of CCTA. Notably, CPT code 0503T does not mention processing, interpretation, or supervision. Further, the FDA clearance refers to the FFRCT service as “post-processing image analysis software . . . using graphics and text [FFRCT] to aid the clinician in the assessment of coronary artery disease.”

Therefore, we conclude, based on the information available to us at this time, that the costs of the FFRCT service, as described by CPT code 0503T, should not be a packaged service under the regulation at 42 CFR 419.2(b)(13). Accordingly, we are assigning CPT code 0503T to a New Technology APC for CY 2018. We remind hospitals that, according to the Medicare statute, this service should only be furnished when reasonable and medically necessary for the purposes of diagnosis of and treatment a Medicare beneficiary.

In summary, after consideration of the public comments we received, we are finalizing our proposal for CPT codes 0501T, 0502T, and 0504T without modification. However, for CPT code 0503T, we are finalizing our proposal with modification. Specifically, we are reassigning CPT code 0503T from packaged status (status indicator “N”) to New Technology APC 1516 (New Technology—Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50 for CY 2018. We note our belief that CPT code 0503T covers payment for the majority of hospital resources involved in the HeartFlow service, and that CPT 0502T, which reflects data preparation and transmission, will be packaged under the OPPS.

Table 19 lists the final status indicator assignments for CPT codes 0501T, 0502T, 0503T, and 0504T. We refer readers to Addendum B to 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 to this final rule with comment period for the status indicator meanings for all codes reported under the OPPS. Both Addendum A and B are available via the Internet on the CMS Web site.Start Printed Page 52425

Table 19—Final CY 2018 Status Indicator (SI) Assignment for the New FFRCT CPT Codes Effective January 1, 2018

CPT codeCY 2018 OPPS/ASC proposed rule placeholder codeLong descriptorCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment
0501T02X4TNon-invasive 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; data preparation and transmission, analysis of fluid dynamics and simulated maximal coronary hyperemia, generation of estimated FFR model, with anatomical data review in comparison with estimated FFR model to reconcile discordant data, interpretation and reportMN/AN/A.
0502T02X5TNon-invasive 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; data preparation and transmissionNN/AN/A.
0503T02X6TNon-invasive 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 modelS1516Refer to OPPS Addendum B.
0504T02X7TNon-invasive 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; anatomical data review in comparison with estimated FFR model to reconcile discordant data, interpretation and reportMN/AN/A.

D. OPPS APC-Specific Policies

1. Blood-Derived Hematopoietic Cell Harvesting

HCPCS code 38205 describes blood-derived hematopoietic progenitor cell harvesting for transplantation, per collection; allogeneic. This code represents a donor acquisition cost for an allogeneic hematopoietic stem cell transplant (HSCT). In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60575), we assigned HCPCS code 38205 to status indicator “B”, which indicates that this code is not recognized by the OPPS when submitted on an outpatient hospital Part B bill (type 12x and 13x).

In CY 2017, we finalized a C-APC for HSCT (81 FR 79586 through 79587). Payment for donor acquisition services for HSCT is included in the C-APC payment for the allogeneic stem cell transplant when the transplant occurs in the hospital outpatient setting. All donor acquisition costs, including the costs for HCPCS code 38205, should be reported on the same date of service as the transplant procedure (HCPCS code 38240 (Hematopoietic progenitor (HPC); allogeneic transplantation per donor)) in order to be appropriately packaged for payment purposes. Hospitals are instructed to identify services required to acquire stem cells from a donor for allogeneic HSCT separately in Field 42 on Form CMS-1450 (or UB-04), with revenue code 0815 when an allogeneic stem cell transplant occurs. (We refer readers to the Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section 231.11, and Chapter 3, Section 90.3.1.)

There are other donor acquisition costs, namely those costs for the procedure described by HCPCS code 38230 (Bone marrow harvesting for transplantation; allogeneic), that are assigned to status indicator “S”. For consistency and to ensure that the donor acquisition costs are captured accurately, in the CY 2018 OPPS/ASC proposed rule (82 FR 33608), for CY 2018, we proposed to change the status indicator assignment for the procedure described by HCPCS code 38205 from “B” to “S”, which indicates that the procedure is paid under the OPPS and receives separate payment.

The CY 2016 claims data used for the proposed rule, which included claims submitted between January 1, 2016, and December 31, 2016, and processed on or before December 31, 2016, showed a geometric mean cost of approximately $580 for HCPCS code 38205 based on 2 single claims (out of 8 total claims). The procedure described by HCPCS code 38205 has resource and clinical similarities to procedures assigned to APC 5242 (Level 2 Blood Product Exchange and Related Services). Therefore, we proposed to assign HCPCS code 38205 to APC 5242. We invited public comments on these proposals.

Comment: Several commenters opposed the proposal to change the status indicator assignment for the procedure described by HCPCS code 38205 from “B” to “S”. The commenters stated that this procedure represents a donor acquisition cost for allogeneic hematopoietic stem cell transplants for Start Printed Page 52426which Medicare does not make separate payment because hospitals may bill and receive payment only for services provided to the Medicare beneficiary who is the recipient of the stem cell transplant and whose illness is being treated with the stem cell transplant. The commenters believed that a change from status indicator “B” to “S” may indicate to providers that they can bill donors for these services and lead to potential for erroneous separate payments if this code is billed with status indicator “S”. In addition, the HOP Panel recommended that CMS retain status indicator “B” for HCPCS code 38205. The commenters also encouraged CMS to look at the entire series of bone marrow and stem cell transplant-related CPT codes to ensure consistency in terms of coding, billing guidance, appropriate APC assignment, and payment.

Response: We appreciate the commenters' responses. We believed that changing the status indicator assignment from “B” to “S” for HCPCS code 38205 would be consistent with other donor acquisition costs and ensure that the donor acquisition costs for allogeneic HSCT are captured accurately. However, we agree with the commenters that this change could result in erroneous billing or misinterpretations by providers.

After consideration of the public comments we received, we are not finalizing our proposal to change the status indicator assignment for the procedure described by HCPCS code 38205 from “B” to “S” and to assign HCPCS code 38205 to APC 5242.

2. Brachytherapy Insertion Procedures (C-APCs 5341 and 5092)

a. C-APC 5341 (Abdominal/Peritoneal/Biliary and Related Procedures)

For CY 2018, as displayed in Table 20 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 55920 to C-APC 5341 (Abdominal/Peritoneal/Biliary and Related Procedures), with a proposed payment rate of $2,788.26.

Table 20—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 55920

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
55920Placement of needles or catheters into pelvic organs and/or genitalia (except prostate) for subsequent interstitial radioelement applicationJ15341$2,861.53J15341$2,788.26

Comment: Commenters disagreed with the proposed APC assignment for CPT code 55920 and recommended that this code be reassigned to an APC that includes gynecologic procedures, specifically C-APC 5415 (Level 5 Gynecologic Procedures). The commenters noted that radiation therapy is an important adjuvant treatment for gynecological malignancies and the vignette for the procedure described by CPT 55920 describes a gynecological implant with a Syed-type intracavitary applicator insertion to the vagina, cervix, or female urethra. The commenters stated that the procedure described by CPT code 55920 was similar, from a clinical and resource perspective, to procedures assigned to C-APC 5415.

Response: Our analysis of the final rule updated claims data revealed a geometric mean cost of approximately $4,791 for CPT code 55920 based on 134 single claims (out of 135 total claims), which is comparable to the geometric mean cost of approximately $4,109 for C-APC 5415. The geometric mean cost for C-APC 5341 is approximately $2,909. After reviewing the procedures assigned to C-APC 5415, we agree with the commenters that CPT code 55920 would be more appropriately reassigned to C-APC 5415 based on its clinical homogeneity and resource costs.

After consideration of the public comments we received, we are finalizing our CY 2018 proposal with modification. Specifically, we are reassigning CPT code 55920 from C-APC 5341 to C-APC 5415 for CY 2018. We refer readers to Addendum B to this final rule with comment period for the final CY 2018 payment rates for all codes reported under the OPPS. In addition, we refer readers to Addendum A to this final rule with comment period for the status indicator meanings for all codes reported under the OPPS for CY 2018. Both Addendum A and Addendum B are available via the Internet on the CMS Web site.

b. C-APC 5092 (Level 2 Breast/Lymphatic Surgery and Related Procedures)

For CY 2018, as displayed in Table 21 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 19298 to C-APC 5092 (Level 2 Breast/Lymphatic Surgery and Related Procedures), with a proposed payment rate of $4,616.48.Start Printed Page 52427

Table 21—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 19298

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
19298Placement of radiotherapy afterloading brachytherapy catheters (multiple tube and button type) into breast for interstitial; radioelement application following (at the time of or subsequent to) partial mastectomy, includes image guidance)J15092$4,417.60J15092$4,616.48

Comment: Commenters disagreed with the proposed continued APC assignment for CPT code 19298 toC-APC 5092. These commenters stated that the CY 2018 proposed payment is inadequate and does not cover the costs associated with the surgical placement of the breast brachytherapy catheter or the brachytherapy treatment delivery and related planning and preparation codes included on the claim. The commenters also stated that, previously, both breast brachytherapy catheter placement codes 19296 (Breast interstitial radiation treatment, delayed (expandable) and 19298 have been assigned to the same APC as they are similar clinically and with regard to resource cost. The commenters requested that CPT code 19298 be assigned to the same C-APC as CPT code 19296 proposed for CY 2018; that is, C-APC 5093 (Level 3 Breast/Lymphatic Surgery and Related Procedures).

Response: Our analysis of the final rule updated claims data revealed a geometric mean cost of approximately $5,944 for CPT code 19298 based on 68 single claims (out of 69 total claims). Based on our updated analysis, we believe that CPT code 19298 is appropriately assigned to C-APC 5092, which has a geometric mean cost of approximately $4,809, rather than toC-APC 5093, which has a geometric mean cost of approximately $7,383 as suggested by the commenters. In addition, our updated analysis showed that the geometric mean cost of approximately $5,944 for CPT code 19298 is within the range of the significant procedures assigned toC-APC 5092, which is between $4,276 (for CPT code 19380) and $6,134 (for CPT code 19340).

After consideration of the public comments we received and based on updated claims data, we are finalizing our proposal to continue to assign CPT code 19298 to C-APC 5092 for CY 2018.

3. Care Management Coding Changes Effective January 1, 2018 (APCs 5821 and 5822)

As noted in the CY 2018 MPFS proposed rule (82 FR 34079), we continue to be interested in the ongoing work of the medical community to refine the set of codes used to describe care management services, including chronic care management. In the CY 2018 OPPS/ASC proposed rule (82 FR 33603 and 33604), we proposed to adopt CPT replacement codes for CY 2018 for several of the care management services finalized last year and sought public comment on ways we might further reduce the burden on reporting providers, including through stronger alignment between CMS requirements and CPT guidance for existing and potential new codes. Table 15 of the CY 2018 OPP/ASC proposed rule detailed the proposed care management coding changes. We referred readers to Addendum B to the proposed rule (which is available via the Internet on the CMS Web site) for the proposed CY 2018 payment rates for the replacement codes.

Comment: Commenters supported CMS' proposed replacement codes for CY 2018 for several of the care management services finalized for CY 2017. One commenter recommended that the new chronic care management codes be removed from the financial settlement of accountable care organizations (ACOs). This commenter also recommended that CMS develop documentation and billing workflow to reduce administrative burden on providers billing transitional care management and chronic care management codes.

Response: We appreciate the commenters' support. We also appreciate the suggestion for reducing provider burden with respect to billing and documentation requirements for chronic care management and will consider these suggestions in future rulemaking. However, we note that ACOs are outside the scope of this final rule with comment period.

After consideration of the public comments we received, we are finalizing our proposal to adopt CPT replacement codes for CY 2018 for several of the care management services finalized last year. Table 22 below details the final care management coding changes. We refer readers to Addendum B to this final rule with comment period (which is available via the Internet on the CMS Web site) for the final CY 2018 payment rates for the replacement codes.

Table 22—Care Management Coding Changes Effective January 1, 2018

CY 2017 HCPCS codeCY 2017 HCPCS code short descriptorCY 2017 OPPS SICY 2017 OPPS ASCCY 2018 replacement CPT codeCY 2018 replacement HCPCS code short descriptor *CY 2018 OPPS SICY 2018 OPPS APC
G0502Init psych care Manag, 70minS5822994921st Psyc collab care mgmtS5822
G0503Subseq psych care man, 60miS582299493Sbsg psyc collab care mgmtS5822
Start Printed Page 52428
G0504Init/sub psych Care add 30 mNN/A994941st/sbsq psyc collab careNN/A
G0505Cog/func assessment outptS582299483Assmt & care pln pt cog impS5822
G0507Care manage serv minimum 20S582199484Care mgmt. svc bhvl hlth condS5821
* The long descriptors for the final CPT codes can be found in Addendum O (New Category I and Category III CPT Codes Effective January 1, 2018) to this final rule with comment period, which is available via the Internet on the CMS Web site.

4. Cardiac Telemetry (APC 5721)

For CY 2018, as noted in Table 23 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to reassign CPT code 93229 from APC 5733 (Level 3 Minor Procedures) to APC 5734 (Level 4 Minor Procedures), with a proposed payment rate of $94.27.

Table 23—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 93229

CPT CodeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
93229External mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ecg data storage (retrievable with query) with ecg triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; technical support for connection and patient instructions for use, attended surveillance, analysis and transmission of daily and emergent data reports as prescribed by a physician or other qualified health care professionalS5733$54.55S5734$94.27

We proposed to revise the APC assignment for CPT code 93229 based on claims data used for the CY 2018 OPPS/ASC proposed rule. We note that the proposed rule data were based on claims data submitted between January 1, 2016, and December 31, 2016, that were processed on or before December 31, 2016. Our analysis of the claims data revealed a geometric mean cost of approximately $156 for CPT code 93229 based on 1,518 single claims (out of 3,370 total claims). Our analysis further revealed a geometric mean cost of approximately $98 for APC 5734. Based on the geometric mean cost, we believed that it was necessary to revise the APC assignment for CPT code 93229 from APC 5733 to APC 5734 to pay appropriately for the service.

Comment: Some commenters disagreed with the proposed reassignment of CPT code 93229 to APC 5734, and instead requested a reassignment to APC 5722 (Level 2 Diagnostic Tests and Related Services), which had a proposed payment rate of $242.21 and which is the same APC assignment for CPT code 93229 as in CY 2016. The commenters believed that the cost data used to set the payment rate for the CY 2017 OPPS update was based on miscoding of the service because mobile outpatient telemetry is a low-volume service in the HOPD setting that is performed by a small number of hospitals. The commenters indicated that since the publication of a 2016 coding guidance in the AHA Coding Clinic for HCPCS on the proper coding of remote cardiac monitoring services, they have noticed that the top billers of this service from prior years are no longer inappropriately reporting the service. In addition, the commenters believed that APC 5734 is an inappropriate assignment both from the clinical and resource cost perspectives. The commenters further indicated that the service is not a minor procedure, as described by the group description for APC 5734, and added that CPT code 93229 is the only code in APC 5734 with a status indicator assignment of “S” (Procedure or Service, Not Discounted When Multiple), while all the other codes in the APC are assigned to status indicator “Q1” (conditionally packaged).

Response: Although CPT code 93229 was assigned to status indicator “S” in APC 5734, it was not the only status indicator assigned to the codes in this APC. As indicated in OPPS Addendum B that was released with the CY 2018 OPPS/ASC proposed rule, three separate status indicators were assigned to the codes in APC 5734. Specifically, CPT code 93229 was assigned to status indicator “S”, CPT codes 30903 and 30905 were assigned to status indicator “T” (Procedure or Service, Discounted Start Printed Page 52429When Multiple), and the remaining codes were assigned to status indicator “Q1”. We note that a specific status indicator assignment does not preclude a code's assignment to a specific APC.

In addition, as we have stated since the implementation of the OPPS in August 2000, section 1833(t)(9) of the Act requires that we annually review all the items and services within an APC group and revise the APC structures accordingly. Included in this review is the identification of any 2 times rule violations as provided under section 1833(t)(2) of the Act and, to the extent possible, rectification of these violations. We review the most recently available OPPS claims data every year and determine whether changes to the current APC assignment are necessary. Although CPT code 93229 was assigned to APC 5722 in CY 2016, we revised the APC assignment to APC 5733 for CY 2017 based on the latest claims data available at that time. The discussion related to this APC revision can be found in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79616 through 79617).

For this CY 2018 OPPS/ASC final rule with comment period, we again reviewed the claims data associated with CPT code 93229. We note that, for this final rule with comment period, we used claims data with dates of service between January 1, 2016, and December 31, 2016 that were processed on or before June 30, 2017. Our analysis revealed a geometric mean cost of approximately $160 for CPT code 93229 based on 1,750 single claims (out of 3,869 total claims). Based on our review of the four levels of Diagnostic Tests and Related Services APCs, we believe that CPT code 93229 appropriately fits in APC 5721 (Level 1 Diagnostic Tests and Related Services), which has a geometric mean cost of approximately $136, rather than in APC 5722, which has a geometric mean cost of approximately $249. In addition, our review shows that the geometric mean cost of approximately $160 for CPT code 93229 is within the range of the significant procedures in APC 5721, which is between $60 (for CPT code 93702) and $181 (for CPT code 94727). Consequently, we believe that a reassignment of CPT code 93229 to APC 5721 is more appropriate.

In summary, after consideration of the public comments we received, we are finalizing our CY 2018 proposal with modification. Specifically, we are revising the assignment for CPT code 93229 to APC 5721 for CY 2018 rather than the proposed APC 5734. Consistent with our policy of reviewing APC assignments annually, we will reevaluate the cost of CPT code 93229 and its APC assignment for the CY 2019 rulemaking. Table 24 below lists the final status indicator and APC assignment for CPT code 93229 for CY 2018. 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 to this final rule with comment period for the status indicator meanings for all codes reported under the OPPS. Both Addenda A and B are available via the Internet on the CMS Web site.

Table 24—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Code 93229

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
93229External mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ecg data storage (retrievable with query) with ecg triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; technical support for connection and patient instructions for use, attended surveillance, analysis and transmission of daily and emergent data reports as prescribed by a physician or other qualified health care professionalS5733$54.55S5721Refer to OPPS Addendum B.

5. Collagen Cross-Linking of Cornea (C-APC 5503)

For CY 2018, as noted in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 0402T (Collagen cross-linking of cornea (including removal of the corneal epithelium and intraoperative pachymetry when performed)) to APC 5502 (Level 2 Extraocular, Repair, and Plastic Eye Procedures) for CY 2018.

Comment: One commenter requested that CMS reassign CPT code 0402T from APC 5502 to APC 5504 (Level 4 Extraocular, Repair, and Plastic Eye Procedures). The commenter recommended reassignment to APC 5504 because it believed that assignment to that APC would more accurately reflect the level of resource utilization (particularly labor time and capital equipment) involved in the corneal collagen cross-linking procedure. In addition, the commenter provided resource information on the supplies, equipment, and labor required to perform the procedure described by CPT code 0402T. According to the commenter, the capital equipment required for the procedure costs approximately $90,000, and disposable supplies and at least one technician or registered nurse are also required. In addition, the commenter stated that the average procedure time can last from 1.25 to 2 hours. The commenter acknowledged that there are no Medicare claims data for CPT code Start Printed Page 524300402T because it was established on January 1, 2016.

Response: We reviewed the updated CY 2016 claims data used for this final rule with comment period. Based on our review, and with consideration of the resource information provided by the commenter, in the absence of data and based on the resources and operating expenses to perform the procedure as described by the commenter, we disagree with the commenter's recommendation that CPT code 0402T should be reassigned to APC 5504, which has a geometric mean cost of approximately $3,000 in CY 2018. In the absence of claims data, we may use other data, such as invoices, to assign a new procedure to a clinical APC. In this case, the commenter did not provide invoices, but did supply some cost information in its comment. We note that the payment rate is not designed to pay for capital equipment costs on a per claim basis. However, taking into account the disposable costs as well as information from the commenter about the time to perform the procedure and the hospital staff involved, we are persuaded to modify our proposal. Given the resource cost and clinical congruence of CPT code 0402T with other procedures assigned to APC 5503 (approximate geometric mean cost of $1,800), such as CPT code 65436 (Removal of corneal epithelium; with application of chelating agent, e.g., EDTA), we believe that the reassignment to APC 5503 is more appropriate for CY 2018. Therefore, we are modifying our proposal, and reassigning CPT code 0402T to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures) for CY 2018. We will consider reassignment of CPT code 0402T to APC 5504 in the CY 2019 rulemaking.

6. Cryoablation Procedure for Lung Tumors (C-APC 5361)

For CY 2018, the AMA CPT Editorial Panel deleted CPT code 0340T and replaced the code with CPT code 32994, effective January 1, 2018. We note that CPT code 0340T was effective January 1, 2014, and deleted on December 31, 2017. Table 25 below lists the complete descriptors for the deleted and replacement code. We note that the deleted and replacement code were both listed in Addendum B and Addendum O to the CY 2018 OPPS/ASC proposed rule (which are available via the Internet on the CMS Web site). Addendum B listed the proposed status indicator assignment for the replacement code and assigned it to comment indicator “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), while Addendum O listed the proposed/placeholder CY 2018 CPT codes and the long descriptors.

Table 25—Coding Changes for CPT Code 32994

CPT CodeCY 2018 OPPS/ASC proposed rule placeholder codeLong descriptor
0340TAblation, pulmonary tumor(s), including pleura or chest wall when involved by tumor extension, percutaneous, cryoablation, unilateral, includes imaging guidance.
3299432X99Ablation therapy for reduction or eradication of 1 or more pulmonary tumor(s) including pleura or chest wall when involved by tumor extension, percutaneous, including imaging guidance when performed, unilateral; cryoablation.

As noted in Table 26 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to delete CPT code 0340T (status indicator “D”) and assign its replacement code, CPT code 32994 (placeholder code 32X99), to C-APC 5361 (Level 1 Laparoscopy and Related Services), with a proposed payment rate of $4,340.65. As noted in Table 26, for CY 2017, CPT code 0340T was assigned to C-APC 5361, which is the same APC assignment for CPT code 32994.

Table 26—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 32994

CPT codeCY 2018 OPPS/ASC proposed rule placeholder codeShort descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
0340TAblate pulm tumors + extnsnJ15361$4,199.13DN/AN/A
3299432X99Ablate pulm tumor perq cryblN/AN/AN/AJ15361$4,340.65

Comment: Commenters presented opposing recommendations on the proposed APC assignment for CPT code 32994. Some commenters supported the proposed APC assignment to C-APC 5361. One commenter stated that the APC assignment maintains clinical homogeneity for services within the APC and addresses resource cost fluctuation and volatility, and suggested that CMS finalize the proposal. However, other commenters disagreed with the proposed APC assignment and recommended that CPT code 32994 be assigned to C-APC 5362 (Level 2 Laparoscopy and Related Services), which had a proposed payment rate of $7,213.53. One commenter understood why CMS proposed to assign CPT code 32994 to C-APC 5361, which is the same APC to which its predecessor code was assigned. However, the commenter believed that the cost of the procedure will only increase as hospitals gain Start Printed Page 52431experience with it. Consequently, the commenter suggested that CMS assign the CPT code to C-APC 5362. Another commenter recommended that CMS assign CPT code 32994 to C-APC 5362 and further noted the importance of new codes to be priced correctly before they are subject to APC placement based on their actual cost data.

Response: Because CPT code 0340T is a predecessor code to CPT code 32994, we have historical claims data on which to base the payment rate for CPT code 32994. Review of our claims data for this final rule with comment period shows a geometric mean cost of approximately $5,471 for CPT code 0340T based on 27 single claims (out of 27 total claims), which is more comparable to the geometric mean cost of approximately $4,486 for C-APC 5361 than to the geometric mean cost of approximately $7,591 for C-APC 5362. We do not agree that we should assign CPT code 32994 to C-APC 5362 because the geometric mean cost for this APC is significantly greater than that of CPT code 32994 (cross-walked from CPT code 0340T) as indicated in our claims data available for this final rule with comment period. In addition, if the cost of the procedure increases, this will be identified through our annual review of the claims data. Consistent with our policy of reviewing APC assignments annually, we will reevaluate the geometric mean cost of CPT code 32994 and its APC assignment in next year's rulemaking for the CY 2019 OPPS update.

In summary, after consideration of the public comments we received and our analysis of the updated claims data for this final rule with comment period, we are finalizing our CY 2018 proposal without modification, and assigning CPT code 32994 to C-APC 5361. The final CY 2018 geometric mean cost for C-APC 5361 is approximately $4,486. Table 27 below lists the final status indicator and APC assignment for CPT code 32994 for CY 2018. We refer readers to Addendum B to 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 to this final rule with comment period for the status indicator meanings for all codes reported under the OPPS. Both Addenda A and B are available via the Internet on the CMS Web site.

Table 27—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Code 32994

CPT codeCY 2018 OPPS/ASC proposed rule placeholder codeShort descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
0340TN/AAblate pulm tumors + extnsnJ15361$4,199.13DN/AN/A.
3299432X99Ablate pulm tumor perq cryblN/AN/AN/AJ15361Refer to OPPS Addendum B.

7. Diagnostic Bone Marrow Aspiration and Biopsy (C-APC 5072)

For CY 2018, the AMA CPT Editorial Panel revised the bone marrow and aspiration CPT codes. Specifically, the descriptors for CPT codes 38220 and 38221 were revised and new CPT codes 20939 (placeholder code 2093X) and 38222 (placeholder code 382X3) were established, effective January 1, 2018. In addition, add-on HCPCS code G0364, which was effective January 1, 2005, will be deleted on December 31, 2017 and replaced with CPT codes 38220, 38221, and 38222, effective January 1, 2018. The deleted and replacement codes were listed in Addendum B and Addendum O to the CY 2018 OPPS/ASC proposed rule. Addendum B listed the proposed status indicator assignment for revised CPT codes 38220 and 38221 and new CPT code 38222, which was assigned to comment indicator “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), while Addendum O listed the proposed/placeholder CY 2018 CPT codes and the long descriptors.

Table 28 below lists the complete descriptors for the bone marrow aspiration and biopsy codes.

Table 28—Coding Changes for the Bone Marrow Aspiration and Biopsy Codes

HCPCS codeCY 2018 OPPS/ASC proposed rule placeholder codeLong descriptor
209392093XBone marrow aspiration for bone grafting, spine surgery only, through separate skin or fascial incision (List separately in addition to code for primary procedure).
38220N/ADiagnostic bone marrow; aspiration.
38221N/ADiagnostic bone marrow; biopsy(ies).
38222382X3Diagnostic bone marrow; biopsy(ies) and aspiration(s).
G0364N/ABone marrow aspiration performed with bone marrow biopsy through the same incision on the same date of service.

As noted in Table 29 below and in Addendum B of the CY 2018 OPPS/ASC proposed rule, we proposed to delete HCPCS code G0364 (status indicator “D”) and assign revised CPT codes 38220 and 38221, as well as new CPT code 38222 (placeholder code 382X3) to C-APC 5072 (Level 2 Excision/Biopsy/Incision and Drainage), with a proposed payment rate of $1,268.53. We note that, under the OPPS, we packaged the payment for HCPCS code G0364 (status Start Printed Page 52432indicator “N”) into the primary service or procedure that is reported with the code because we considered the service to be an add-on furnished as part of a comprehensive service. In addition, we proposed to assign CPT code 20939 (placeholder 2093X) to status indicator “N” (Packaged status) because it is an add-on code. Under Medicare regulations at 42 CFR 419.2(b)(18), add-on codes are packaged under the OPPS. Further, we proposed to continue to assign revised CPT codes 38220 and 38221 to C-APC 5072 for CY 2018.

Table 29—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rates for the Bone Marrow Aspiration and Biopsy Codes

HCPCS CodeCY 2018 OPPS/ASC proposed rule placeholder codeShort descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
209392093XBone marrow aspir bone grfgN/AN/AN/ANN/AN/A
38220N/ADx bone marrow aspirationsJ15072$1,236.62J15072$1,268.53
38221N/ADx bone marrow biopsiesJ150721,236.62J150721,268.53
38222382X3Dx bone marrow bx & aspirN/AN/AN/AJ150721,268.53
G0364N/ABone marrow aspirate &biopsyNN/AN/ADN/AN/A

Comment: One commenter disagreed with the proposed APC assignment of new CPT code 38222 to C-APC 5072 and recommended that the code be assigned to C-APC 5073 (Level 3 Excision/Biopsy/Incision and Drainage), which had a proposed payment rate of $2,222.47. This commenter further noted the importance of new codes being priced correctly before they are subject to APC assignment based on their actual cost data.

Response: As displayed in Table 29, we proposed to make no change to the APC assignments for CPT codes 38220 and 38221. Specifically, we proposed to continue to assign both codes to C-APC 5072 for CY 2018 based on claims data used for the CY 2018 OPPS/ASC proposed rule. We note that the proposed rule data was based on claims data submitted between January 1, 2016, and December 31, 2016, that were processed on or before December 31, 2016. For CPT code 38220, our examination of the claims data revealed a geometric mean cost of approximately $1,645 based on 5,361 single claims (out of 5,431 total claims). For CPT code 38221, our claims data showed a geometric mean cost of approximately $1,615 based on 53,789 single claims (out of 54,335 total claims). We believe that the geometric mean costs of approximately $1,645 for CPT code 38220 and $1,615 for CPT code 38221 are comparable to the geometric mean cost of approximately $1,319 for C-APC 5072. Consequently, we proposed to maintain both codes in C-APC 5072 for CY 2018. We note that we had no claims data for HCPCS code G0364 because this is an add-on code whose payment is packaged into the primary service that is reported with the code.

For this final rule with comment period, we again analyzed updated claims data associated with the four codes. We note that, for this final rule with comment period, we used claims data with dates of service between January 1, 2016, and December 31, 2016, that were processed on or before June 30, 2017. Our review of the final rule claims data revealed a similar pattern for both codes. For CPT code 38220, we found a geometric mean cost of approximately $1,787 based on 5,908 single claims (out of 5,993 total claims), and for CPT code 38221, our claims data revealed a geometric mean cost of approximately $1,799 based on 59,892 single claims (out of 60,467 total claims). Because the geometric mean costs of approximately $1,787 for CPT code 38220 and $1,799 for CPT code 38221 are similar to the geometric mean cost of approximately $1,347 for C-APC 5072, we continue to believe thatC-APC 5072 is the most appropriate APC assignment for both codes for CY 2018.

In addition, based on input from our medical advisors, we believe that C-APC 5072 is the most appropriate APC assignment for new CPT code 38222, consistent with the APC assignment for similar diagnostic bone marrow aspiration and biopsy procedures. As noted in Table 29, CPT codes 38220 and 38221 are assigned to C-APC 5072, and we believe that the service described by new CPT code 38222 is similar to the existing bone marrow aspiration and biopsy codes. Consistent with the statutory requirement under section 1833(t)(9)(A) of the Act, we will reevaluate the APC groupings during the next rulemaking cycle.

After consideration of the public comment we received, we are finalizing our CY 2018 proposals, without modification, for the bone marrow aspiration and biopsy codes, specifically, CPT codes 20939, 38220, 38221, and 38222. Table 30 below lists the final APC and status indicator assignments for CPT codes 20939, 38220, 38221, and 38222 for CY 2018. We refer readers to Addendum B to 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 to 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 Web site.

Table 30—Final CY 2018 Status Indicator (SI) and APC Assignment for the Bone Marrow Aspiration and Biopsy Codes

HCPCS codeCY 2018 OPPS/ASC proposed rule placeholder codeShort descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
209392093XBone marrow aspir bone grfgN/AN/AN/ANN/AN/A.
38220N/ADx bone marrow aspirationsJ15072$1,236.62J15072Refer to OPPS Addendum B.
Start Printed Page 52433
38221N/ADx bone marrow biopsiesJ150721,236.62J15072Refer to OPPS Addendum B.
38222382X3Dx bone marrow bx & aspirN/AN/AN/AJ15072Refer to OPPS Addendum B.
G0364Bone marrow aspirate &biopsyNN/AN/ADN/AN/A.

8. Discussion of Comment Solicitation in the Proposed Rule on Intraocular Procedure APCs

As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33609 through 33610), as part of our CY 2018 comprehensive review of the structure of the APCs and procedure code assignments, we evaluated the intraocular procedure APCs with a particular focus on C-APC 5491 (Level 1 Intraocular Procedures) that contains cataract surgery procedures. We strive to maintain APCs that contain procedures that are relatively homogenous in resource costs and clinical characteristics. While it is impracticable and contrary to the principles of a prospective payment system to assign each procedure to its own APC, thus resulting in a cost-based, fee schedule payment system, we seek to ensure our clinical groupings appropriately group like items and services while maintaining the integrity of a prospective payment system under which bundled, encounter-based payments are essential.

For CY 2018, we considered proposing a new intraocular procedure APC that would further distinguish the resource costs and clinical characteristics between cataract surgery and complex cataract surgery. As listed in Addendum B of the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 66984 (Cataract surgery with IOL 1 stage procedure) and CPT code 66982 (Cataract surgery complex) to C-APC 5491. However, because the 2017 AMA CPT Code manual describes a complex cataract surgery case as “requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis),” we stated that we believe it may be more appropriate to assign CPT code 66982 to a C-APC that is separate from the C-APC assignment for CPT code 66984. However, because this potential APC grouping would assign CPT code 66982 to a higher paying C-APC than CPT code 66984, we indicated that we would monitor claims data for changes in the distribution of coding complex cataract surgery and routine cataract surgery if we were to adopt this change. In the proposed rule, we sought public comments from stakeholders, including ophthalmologists, organizations representing ophthalmologists, beneficiaries, hospitals, and all other interested parties on whether we should create a new C-APC that includes complex cataract surgeries identified by CPT code 66982 (along with other intraocular procedures that are similar in resources) in a newly created C-APC that is separate from those identified by CPT code 66984. That is, we are considering whether to establish a new Level 2 Intraocular Procedures C-APC in between existing C-APCs 5491 and 5492.

Comment: Commenters, including several ophthalmologists and organizations representing ophthalmologists, did not support separation of complex cataract surgery identified by CPT code 66982 and simple cataract surgery identified by CPT code 66984 into separate APCs. Commenters recommended that CMS maintain the current assignment of CPT code 66982 and 66984 in the same APC (APC 5491) because the procedures are similar clinically and the modest variation in cost between the two procedures does not warrant reassignment of CPT code 66982 into a higher payment APC. However, commenters supported CMS' intent to monitor the data for these procedures and make future changes, if needed. In addition, one commenter indicated that variations in payment between simple and complex cataract surgery should be reflected in the physician payment rather than the facility fee.

Response: We thank the commenters for providing detailed responses to the comment solicitation on whether to separate simple and complex cataract surgery into separate APCs. Based on the points raised in response to the comment solicitation with respect to the facility resource costs and clinical similarity between simple and complex cataract surgery, it does not appear necessary to separate these procedures into separate APCs.

After consideration of the public comments we received, we are continuing the assignment of simple and complex cataract surgery procedures (described by CPT codes 66984 and 66982, respectively) to the same APC for CY 2018. We appreciate the commenters' support of CMS' continuing efforts to monitor both the cost and utilization of simple and complex cataract surgery to determine if an APC reassignment or other change may be needed in the future.

9. Endovascular APCs (C-APCs 5191 through 5194)

For CY 2018, we proposed to continue the existing four levels of Endovascular C-APCs (C-APCs 5191 through 5194) as displayed in Table 31 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule.

Table 31—Proposed CY 2018 Geometric Mean Cost and Payment for Endovascular C-APCs

C-APCCY 2018 geometric mean costProposed CY 2018 OPPS payment
5191—Level 1 Endovascular Procedures$2,958.89$2,844
Start Printed Page 52434
5192—Level 2 Endovascular Procedures5,199.874,999
5193—Level 3 Endovascular Procedures10,627.8610,218
5194—Level 4 Endovascular Procedures16,197.5515,572

Comment: Commenters disagreed with the proposal to continue the four levels of the endovascular C-APCs and requested that CMS create more levels within the endovascular C-APCs to improve resource homogeneity within these C-APCs. Specifically, the commenters requested that CMS create a six-level endovascular C-APC family by reassigning endovascular procedures with costs greater than approximately $7,000 up one level, from the currentC-APC 5192 (Level 2 Endovascular Procedures) to a new Level 3 Endovascular Procedures C-APC (519X), and reassigning procedures with costs less than approximately $9,000 down one level, from the current C-APC 5193 (Level 3 Endovascular Procedures) to the new requested Level 3 Endovascular Procedures C-APC. Commenters also requested that procedures with costs greater than approximately $12,000 in the currentC-APC 5193 be moved up one level to a new Level 5 Endovascular Procedures C-APC (519Y), and those procedures with costs greater than approximately $13,000 to be moved down one level from current C-APC 5194 (Level 4 Endovascular Procedures) to the new requested Level 5 C-APC (519Y). The commenters' requested the C-APC structure and estimated payment amount for each C-APC as listed in Table 32 below.

Table 32—CY 2018 Structure for Endovascular C-APCs Requested by Commenters

C-APCEstimated CY 2018 OPPS payment
5191—Level 1 Endovascular Procedures$2,845
5192—Level 2 Endovascular Procedures4,875
519X—New Level 3 Endovascular Procedures8,042
5193—Current Level 3 Endovascular Procedures/New Level 4 Endovascular Procedures10,084
519Y—New Level 5 Endovascular Procedures12,149
5194—Current Level 4 Endovascular Procedures/New Level 6 Endovascular Procedures15,713

At the annual meeting for the HOP Panel held on August 21, 2017, the HOP Panel recommended that, for CY 2018, CMS examine the number of APCs for endovascular procedures. The HOP Panel also recommended that the appropriate Panel subcommittee review the APCs for endovascular procedures to determine whether more granularity (that is, more APCs) is warranted.

Other commenters opposed a reorganization of the endovascularC-APCs for CY 2018 and expressed concerns regarding changing the number of C-APCs in this family without a chance for the public to comment. These commenters encouraged CMS to consider the impact that adding APCs for the endovascular procedures may have on other procedures in existing APCs and recommended that, if CMS plans to make a change to the endovascular APCs, it include a proposal in the CY 2019 OPPS/ASC proposed rule to allow the opportunity for the public to comment.

Response: We thank the commenters for their input. At this time, we continue to believe that the currentC-APC levels for the endovascularC-APC family provide an appropriate distinction between the resource costs at each level and provide clinical homogeneity. We will continue to review this C-APC structure, including consultation with the appropriate HOP Panel subcommittee, to determine if additional granularity is necessary for this C-APC family.

10. Esophagogastroduodenoscopy (EGD) (C-APC 5362)

For CY 2018, as displayed in Table 33 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 43210 to APC 5331 (Complex GI Procedures), with a proposed payment rate of $4,119.27.Start Printed Page 52435

Table 33—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 43210

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
43210Esophagogastroduo-denoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performedJ15331$3,940.61J15331$4,119.27

Comment: One commenter disagreed with the proposed APC assignment for CPT code 43210 and stated that that the proposed payment is inadequate to cover the cost of the procedure. The commenter stated that the device associated with the procedure costs approximately $4,100. The commenter elaborated that because of the inadequate payment for the procedure, providers are reluctant to perform the procedure, and instead are opting to perform the higher paying procedures for the treatment of gastroesophageal reflux disease (GERD). The commenter also stated that, based on the geometric mean cost of $7,013 for CPT code 43210, the code is inappropriately assigned to APC 5331, which has a geometric mean cost of approximately $4,284. To correct the inadequate payment for the procedure, the commenter suggested that CMS either reassign CPT code 43210 to C-APC 5362 (Level 2 Laparoscopy and Related Services), which had a proposed payment rate of $7,214, or establish a new Level 2 Complex GI Procedures APC that contains only the surgical procedures described by the following CPT codes:

  • 43210 (Esophagogastroduodenoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performed);
  • 43257 (Esophagogastroduodenoscopy, flexible, transoral; with delivery of thermal energy to the muscle of lower esophageal sphincter and/or gastric cardia, for treatment of gastroesophageal reflux disease);
  • 43280 (Laparoscopy, surgical, esophagogastric fundoplasty (e.g., nissen, toupet procedures));
  • 43281 (Laparoscopy, surgical, repair of paraesophageal hernia, includes fundoplasty, when performed; without implantation of mesh);
  • 43284 (Laparoscopy, surgical, esophageal sphincter augmentation procedure, placement of sphincter augmentation device (i.e., magnetic band), including cruroplasty when performed);
  • 43770 (Laparoscopy, surgical, gastric restrictive procedure; placement of adjustable gastric restrictive device (e.g., gastric band and subcutaneous port components)); and
  • 46762 (Sphincteroplasty, anal, for incontinence, adult; implantation artificial sphincter).

Response: For the second suggestion, we believe the grouping of procedures in the suggested APC may be inappropriate based on lack of clinical homogeneity. Specifically, CPT code 46762 describes a sphincteroplasty procedure, which is unlike that of the other GERD-related procedures in the suggested APC. However, for the first suggestion, based on our analysis of the final rule claims data, we believe that it would be appropriate to reassign CPT code 43210 to C-APC 5362. We note that, for this final rule with comment period, we used claims data with dates of service between January 1, 2016, and December 31, 2016, that were processed on or before June 30, 2017. Our analysis of the final rule claims data revealed a geometric mean cost of approximately $6,759 for CPT code 43210 based on 91 single claims (out of 92 total claims), which is comparable to the geometric mean cost of approximately $7,591 for C-APC 5362. Compared to the geometric mean cost of approximately $4,291 for C-APC 5331, we agree with the commenter that C-APC 5362 is the more appropriate C-APC assignment for CPT code 43210 based on its clinical homogeneity and resource costs.

In summary, after consideration of the public comment we received, we are finalizing our CY 2018 proposal with modification. Specifically, we are reassigning CPT code 43210 fromC-APC 5331 to C-APC 5362 for CY 2018. As we do every year under the OPPS, we will reevaluate the cost of the procedure and its APC assignment for next year's OPPS rulemaking. Table 34 below lists the final status indicator and APC assignments for CPT code 43210. 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 Web site.

Table 34—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Code 43210

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
43210Esophagogastroduo-denoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performedJ15331$3,940.61J15362Refer to OPPS Addendum B.
Start Printed Page 52436

11. Hemorrhoid Treatment by Thermal Energy (APC 5312)

For CY 2018, as displayed in Table 35 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 46930 to APC 5311 (Level 1 Lower GI Procedures), with a proposed payment rate of $690.37.

Table 35—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 46930

HCPCS codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
46930Destruction of internal hemorrhoid(s) by thermal energy (e.g., infrared coagulation, cautery, radiofrequency)T5311$667.67T5311$690.37

Comment: One commenter requested a reassignment of CPT code 46930 to APC 5312 (Level 2 Lower GI Procedures), which had a CY 2018 proposed payment rate of $907.04. The commenter indicated that review of the geometric mean cost of approximately $879 for CPT code 46930 from the CY 2018 proposed rule claims data is more in line with the geometric mean cost for APC 5312. Specifically, the commenter noted that the geometric mean cost for APC 5312 is approximately $943, which is comparable to the geometric cost of $879 for CPT code 46930, rather than the geometric mean cost of approximately $718 for APC 5311.

Response: For this final rule with comment period, we reviewed the claims data associated with CPT codes 46930. We used claims data for this final rule with comment period with dates of service between January 1, 2016, and December 31, 2016 that were processed on or before June 30, 2017. Our analysis of the final rule claims data revealed that a change in the APC assignment to APC 5312 for CPT code 46930 is appropriate. Specifically, we found a geometric mean cost of approximately $858 for CPT code 46930 based on 363 single claims (out of 970 total claims), which is similar to the geometric mean cost of approximately $936 for APC 5312 rather than the geometric mean cost of approximately $710 for APC 5311. In addition, our analysis of the range of geometric mean costs for the significant procedures within APCs 5311 and 5312 shows that the geometric mean cost for CPT code 46930 is comparable to the costs of procedures assigned to APC 5312. Specifically, the geometric mean costs of the significant procedures assigned to APC 5311 range between approximately $382 (for CPT code 46221) and $750 (for CPT code 45378), while the range for procedures assigned to APC 5312 is between approximately $824 (for CPT code 45341) and $1,579 (for CPT 45390). Consequently, we agree that a reassignment of CPT code 46930 to APC 5312 is more appropriate.

Therefore, after consideration of the public comment we received, we are finalizing our CY 2018 proposal with modification to the APC assignment for CPT code 46930. Specifically, we are reassigning CPT code 46930 from C-APC 5311 to C-APC 5312 for CY 2018. Table 36 below lists the final status indicator and APC assignments for CPT code 49630. We refer readers to Addendum B to 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 to 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 Web site.

Table 36—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Code 46930

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
46930Destruction of internal hemorrhoid(s) by thermal energy (e.g., infrared coagulation, cautery, radiofrequency)T5311$667.67T5312Refer to OPPS Addendum B.

12. Ileoscopy Through Stoma With Stent Placement (C-APC 5303)

For CY 2018, as displayed in Table 37 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT code 44384 to C-APC 5303 (Level 3 Upper GI Procedures).Start Printed Page 52437

Table 37—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 44384

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
44384Ileoscopy, through stoma; with placement of endoscopic stent (includes pre- and post-dilation and guide wire passage, when performed)J15303$2,510.70J15303$2,630.93

Comment: Several commenters opposed the proposed continued assignment of CPT code 44384 toC-APC 5303. The commenters stated that the procedure includes the use of a stent that costs approximately $1,500, and that the resources required to perform the procedure are similar to those other small and large bowel procedures that require stent placement in C-APC 5331 (Complex GI Procedures), which had a CY 2018 proposed payment rate of $4,119.27. The commenters further added that because C-APC 5303 is not a device-dependent designated APC, the continued assignment of CPT code 44384 to C-APC 5303 results in an ASC payment that is below the cost of performing the procedure. Consequently, the commenters urged CMS to revise the APC assignment for CPT code 44384 back to its CY 2016 APC assignment, specifically, C-APC 5331.

Response: We proposed to continue the APC assignment for CPT code 44384 based on claims data used for the CY 2018 OPPS/ASC proposed rule. We note that the proposed rule data was based on claims data submitted between January 1, 2016, and December 31, 2016, that were processed on or before December 31, 2016. For CPT code 44384, our analysis of the claims data revealed a geometric mean cost of approximately $2,404 for the CPT code based on 25 single claims (out of 26 total claims), which is similar to the geometric mean cost of approximately $2,736 for C-APC 5303 rather than the geometric mean cost of approximately $4,284 for C-APC 5331. Consequently, we proposed to continue the APC assignment for CPT code 44384 toC-APC 5303 for CY 2018.

For this final rule with comment period, we again examined updated claims data associated with CPT code 44384. We note that for this final rule with comment period we used claims data with dates of service between January 1, 2016, and December 31, 2016, that were processed on or before June 30, 2017. Our examination of the final rule claims data revealed a similar pattern for CPT code 44384. Specifically, we found a geometric mean cost of approximately $2,492 for CPT code 44384 based on 32 single claims (out of 33 total claims), which is similar to the geometric mean cost of approximately $2,742 for C-APC 5303 rather than the geometric mean cost of approximately $4,291 for C-APC 5331. Assigning CPT code 43384 to C-APC 5331 would result in an overpayment for the procedure. C-APC 5303 contains several GI-related procedures, which are similar to those procedures described by CPT code 44384, based on clinical homogeneity and resource costs.

In response to the comment related to device-dependent APCs, we note that device-dependent APCs are no longer recognized under the OPPS as of CY 2015 and that, effective January 1, 2017, device-intensive status is assigned at the HCPCS code level, not at the APC level. We note that when we implemented the C-APC policy in CY 2015, we eliminated the device-dependent APC policy and replaced it with the device-intensive policy, effective January 1, 2015. For more information on this change, we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66793 through 66795), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70421 through 70422), and the CY 2017 OPPS/ASC final rule with comment period (81 FR 79657 through 79659). In addition, we refer readers to section IV.B. of this final rule with comment period for the discussion related to the device-intensive policy under the OPPS. For a discussion of ASC procedures designated as device-intensive, we refer readers to section XII.C.1.c. of this final rule with comment period.

Finally, we remind readers that, as we have stated since the implementation of the OPPS in August 2000, section 1833(t)(9) of the Act requires that we annually review all the items and services within an APC group and revise the APC structures accordingly. Included in this review is the identification of any 2 times rule violations as provided under section 1833(t)(2) of the Act and, to the extent possible, rectification of these violations. We review our claims data every year and determine whether we need to make changes to the current APC assignment for the following year. Although CPT code 44384 was assigned to C-APC 5331 in CY 2016, we revised the assignment to C-APC 5303 for CY 2017 based on the latest claims data.

In summary, after consideration of the public comments we received, we are finalizing our CY 2018 proposal without modification to continue the assignment of CPT code 44384 to C-APC 5303. Table 38 below lists the final status indicator and APC assignments for CY 2018. We refer readers to Addendum B to 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 to 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 Web site.Start Printed Page 52438

Table 38—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Code 44384

CPT codeLong descriptorsCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
44384Ileoscopy, through stoma; with placement of endoscopic stent (includes pre- and post-dilation and guide wire passage, when performed)J15303$2,510.70J15303Refer to OPPS Addendum B.

13. Laparoscopic Nephrectomy (C-APC 5362)

For CY 2018, as displayed in Table 39 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to reassign CPT code 50543 from C-APC 5377 (Level 7 Urology and Related Services), which had a proposed payment rate of $15,220.83 to C-APC 5362 (Level 2 Laparoscopy and Related Services), which had a proposed payment rate of $7,213.53.

Table 39—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Code 50543

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS paymentProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment
50543Laparoscopy, surgical; partial nephrectomyJ15377$14,363.61J15362$7,213.53

Comment: One commenter applauded CMS' proposal to remove CPT code 50543 from C-APC 5377. The commenter indicated that the code was inappropriately placed in C-APC 5377 because the procedure involves no implantable device, which is in contrast to the device-related procedures in C-APC 5377. The commenter believed that the addition of this CPT code to C-APC 5377 for CY 2017 was an error that disrupted the clinical homogeneity of the APC. The commenter suggested that CMS finalize the proposal to reassign CPT code 50543 from C-APC 5377 to APC 5362.

Response: We appreciate the commenter's support. For this final rule with comment period, we again reviewed the updated claims data associated with CPT code 50543 and continue to believe that C-APC 5362 is the more appropriate assignment for the CPT code based on its clinical coherence and resource similarity to the other procedures in the APC. Although our analysis showed a geometric mean cost of approximately $7,591 for C-APC 5362, which is lower than the geometric mean cost of approximately $10,247 for CPT code 50543 based on 1,008 single claims (out of 1,016 total claims), we found that the geometric mean cost for the CPT code falls within the range of costs for significant procedures assigned to C-APC 5362. Specifically, the cost range for procedures assigned to C-APC 5362 is between approximately $5,997 (for CPT code 50593) and $10,247 (for CPT code 50543). Based on the final rule claims data, we believe that CPT code 50543 is more appropriately assigned to C-APC 5362 based on its clinical coherence and resource similarity to the other procedures assigned to C-APC 5362.

Therefore, after consideration of the public comment we received, we are finalizing our proposal, without modification, to reassign CPT code 50543 to C-APC 5362 for CY 2018. As we do every year, we will review our claims data for the procedure for the CY 2019 OPPS rulemaking. Table 40 below lists the final CY 2018 status indicator and APC assignments for CPT code 50543. We refer readers to Addendum B to 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 to 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 Web site.

Table 40—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Code 50543

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
50543Laparoscopy, surgical; partial nephrectomyJ15377$14,363.61J15362Refer to OPPS Addendum B.

14. Multianalyte Assays With Algorithmic Analyses (MAAA)

For CY 2018, as displayed in Table 41 below and as listed in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to continue to assign CPT codes 81490, 81503, 81535, 81536, 81538, and 81539, to status indicator “Q4” to indicate that the codes are conditionally packaged. Specifically, as defined in Addendum D1 to the CY 2018 OPPS/ASC proposed rule, an Start Printed Page 52439assignment to status indicator “Q4” indicates that payment for the laboratory test is either packaged if billed on the same claim as a HCPCS code assigned to status indicator “J1”, “J2”, “S”, “T”, “V”, “Q1”, “Q2”, or “Q3”, or in other circumstances, is paid through the CLFS.

Table 41—Proposed CY 2018 Status Indicator (SI) for CPT Codes 81490, 81503, 81535, 81536, 81538, and 81539

CPT codeLong descriptorCY 2017 OPPS SIProposed CY 2018 OPPS SI
81490Autoimmune (rheumatoid arthritis), analysis of 12 biomarkers using immunoassays, utilizing serum, prognostic algorithm reported as a disease activity scoreQ4Q4
81503Oncology (ovarian), biochemical assays of five proteins (ca-125, apolipoprotein a1, beta-2 microglobulin, transferrin, and pre-albumin), utilizing serum, algorithm reported as a risk scoreQ4Q4
81535Oncology (gynecologic), live tumor cell culture and chemotherapeutic response by dapi stain and morphology, predictive algorithm reported as a drug response score; first single drug or drug combinationQ4Q4
81536Oncology (gynecologic), live tumor cell culture and chemotherapeutic response by dapi stain and morphology, predictive algorithm reported as a drug response score; each additional single drug or drug combination (list separately in addition to code for primary procedure)Q4Q4
81538Oncology (lung), mass spectrometric 8-protein signature, including amyloid a, utilizing serum, prognostic and predictive algorithm reported as good versus poor overall survivalQ4Q4
81539Oncology (high-grade prostate cancer), biochemical assay of four proteins (total psa, free psa, intact psa, and human kallikrein-2 [hk2]), utilizing plasma or serum, prognostic algorithm reported as a probability scoreQ4Q4

Comment: Some commenters requested a revision to the status indicator assignment for the six MAAA codes (CPT codes 81490, 81503, 81535, 81536, 81538, and 81539) from “Q4” to “A” (Not paid under the OPPS but may be paid under a different Medicare payment system), consistent with the status indicator assignment for the DNA and RNA-based MAAA tests. The commenters stated that these tests are generally not performed in the HOPD setting. Also, the commenters indicated that all of the Category I CPT MAAA codes are already assigned to status indicator “A” except for CPT codes 81490, 81503, 81535, 81536, 81538, and 81539, which are protein-based MAAA codes. The commenters asserted that, based on the June 23, 2016 CLFS final rule entitled “Medicare Program; Medicare Clinical Diagnostic Laboratory Tests Payment System,” CMS defined an ADLT under section 1834A(d)(5)(A) of the Act to include DNA, RNA, and protein-based tests, and, as such, the six protein-based MAAA codes should be reassigned to status indicator “A”.

Response: As we stated in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79594), we will assign status indicator “A” (Separate payment under the CLFS) to ADLTs once a laboratory test is designated as an ADLT under the CLFS. Before a test can be designated as an ADLT, applicants must submit an application for successful designation as an ADLT by CMS. These 6 codes (CPT codes 81490, 81503, 81535, 81536, 81538, and 81539) have not been designated as ADLTs by CMS at this time, and therefore we do not believe they should be reassigned to status indicator “A”. However, once a code has been designated under the CLFS as an ADLT that meets the criteria of section 1834A(d)(5)(A) of the Act, we will update the OPPS payment file (Addendum B) on a quarterly basis to reflect the appropriate status indicator assignment.

Therefore, after consideration of the public comments, we are finalizing our proposal, without modification, for CPT codes 81490, 81503, 81535, 81536, 81538, and 81539. As stated earlier, we will update the OPPS payment file (Addendum B) to appropriately reflect the status indicator assignment once a CPT code has been designated under the CLFS as an ADLT that meets the criteria of section 1834A(d)(5)(A) of the Act. Table 42 below lists the final status indicator for the CPT codes. We refer readers to Addendum B to 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 to 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 Web site.

Table 42—Final CY 2018 Status Indicator (SI) for CPT Codes 81490, 81503, 81535, 81536, 81538, and 81539

CPT codeLong descriptorCY 2017 OPPS SICY 2018 OPPS SI
81490Autoimmune (rheumatoid arthritis), analysis of 12 biomarkers using immunoassays, utilizing serum, prognostic algorithm reported as a disease activity scoreQ4Q4
81503Oncology (ovarian), biochemical assays of five proteins (ca-125, apolipoprotein a1, beta-2 microglobulin, transferrin, and pre-albumin), utilizing serum, algorithm reported as a risk scoreQ4Q4
81535Oncology (gynecologic), live tumor cell culture and chemotherapeutic response by dapi stain and morphology, predictive algorithm reported as a drug response score; first single drug or drug combinationQ4Q4
81536Oncology (gynecologic), live tumor cell culture and chemotherapeutic response by dapi stain and morphology, predictive algorithm reported as a drug response score; each additional single drug or drug combination (list separately in addition to code for primary procedure)Q4Q4
81538Oncology (lung), mass spectrometric 8-protein signature, including amyloid a, utilizing serum, prognostic and predictive algorithm reported as good versus poor overall survivalQ4Q4
Start Printed Page 52440
81539Oncology (high-grade prostate cancer), biochemical assay of four proteins (total psa, free psa, intact psa, and human kallikrein-2 [hk2]), utilizing plasma or serum, prognostic algorithm reported as a probability scoreQ4Q4

15. Musculoskeletal APCs (APC 5111 Through 5116)

For CY 2018, we proposed to continue the existing C-APCs for the six levels of musculoskeletal procedures (C-APCs 5111 through 5116), as displayed in Table 43 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule.

Table 43—Proposed CY 2018 Geometric Mean Cost and Payment for Musculoskeletal C-APCs

C-APCCY 2018 geometric mean costProposed CY 2018 OPPS payment
5111—Level 1 Musculoskeletal Procedures$222.10$214
5112—Level 2 Musculoskeletal Procedures1,311.471,261
5113—Level 3 Musculoskeletal Procedures2,600.942,501
5114—Level 4 Musculoskeletal Procedures5,602.875,385
5115—Level 5 Musculoskeletal Procedures10,310.279,913
5116—Level 6 Musculoskeletal Procedures15,783.5715,175

Comment: Commenters disagreed with the proposal for six levels of the musculoskeletal C-APCs and requested that CMS create two additional levels within the musculoskeletal C-APCs. The commenters stated concerns about the range of costs of procedures assigned to Level 4, Level 5, and Level 6. The commenters believed that the gap between the musculoskeletal procedure levels and payments is too large and results in APCs that include disparate procedures in terms of clinical complexity and resource use.

Response: At this time, we continue to believe that the proposed C-APC levels for the musculoskeletal procedures C-APC family provide an appropriate distinction between the resource costs at each level and provide clinical homogeneity. We will continue to review this C-APC structure to determine if additional granularity is necessary for this C-APC family.

16. Nasal/Sinus Endscopy Procedures (C-APC 5155)

For CY 2018, the AMA CPT Editorial Panel established several new bundled nasal/sinus endoscopy CPT codes. Table 44 below lists the complete descriptors for the new CPT codes. These codes were listed in Addendum B and Addendum O to the CY 2018 OPPS/ASC proposed rule (which is available via the Internet on the CMS Web site). Addendum B listed the proposed status indicator assignments for the new codes and assigned them to comment indicator “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), while Addendum O listed the proposed/placeholder CY 2018 CPT codes and the long descriptors. We note that the CPT code descriptors that appeared in the OPPS 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 their long descriptors in Addendum O to the proposed rule, specifically under the column labeled “CY 2018 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code” so that the public could adequately comment on our proposed APC and status indicator assignments. We also indicated that the final CPT code numbers would be included in this CY 2018 OPPS/ASC final rule with comment period. The final CPT code numbers, along with their corresponding 5-digit placeholder codes, can be found in Table 45 below.

As displayed in Table 44 below and in Addendum B of the CY 2018 OPPS/ASC proposed rule, we proposed to assign CPT code 31241 to status indicator “C” to indicate that this is an inpatient only procedure, and to assign CPT codes 31253, 31257, 31259, and 31298 to C-APC 5155 (Level 5 Airway Endoscopy), with a proposed payment rate of $4,628.89.Start Printed Page 52441

Table 44—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rates for the New Nasal/Sinus Endoscopy CPT Codes Effective January 1, 2018

CPT codeCY 2018 OPPS/ASC proposed rule placeholder codeLong descriptorProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
3124131XX1Nasal/sinus endoscopy, surgical; with ligation of sphenopalatine arteryCN/AN/A
3125331XX2Nasal/sinus endoscopy, surgical with ethmoidectomy; total (anterior and posterior), including frontal sinus exploration, with removal of tissue from frontal sinus, when performedJ15155$4,628.89
3125731XX3Nasal/sinus endoscopy, surgical with ethmoidectomy; total (anterior and posterior), including sphenoidotomyJ151554,628.89
3125931XX4Nasal/sinus endoscopy, surgical with ethmoidectomy; total (anterior and posterior), including sphenoidotomy, with removal of tissue from the sphenoid sinusJ151554,628.89
3129831XX5Nasal/sinus endoscopy, surgical; with dilation of frontal and sphenoid sinus ostia (e.g., balloon dilation)J151554,628.89

Comment: Several commenters expressed concern with the APC placement and indicated that assignment to C-APC 5155 in the OPPS would reduce the ASC payment for the procedures by 32 percent. The commenters requested that CMS assign the new bundled codes to a higher paying APC to provide appropriate payment in the ASC setting. Some commenters clarified that, in CY 2017, these bundled procedures were reported under two separate codes that were separately payable. Because of the effect on the ASC payment, the commenters recommended that CMS establish a new APC for multiple (five or more) sinus procedures, reconfigure the airway APCs to better recognize the complexity associated with performing multiple sinus procedures in a single surgery, or create a complexity adjustment for sinus procedures billed with a device or drug HCPCS C-code or J-code.

Response: C-APC 5155 contains several endoscopic sinus procedures, including the single endoscopic sinus surgeries. Based on input from our medical advisors, we believe this APC is the most appropriate assignment for CPT codes 31253, 31257, 31259, and 31298. C-APC 5155, which has a final rule geometric mean cost of approximately $4,861, is currently the highest paying APC within the airway endoscopy APC series. Because CPT codes 31253, 31257, 31259, and 31298 are new codes for CY 2018, we believe that we should assign these codes to C-APC 5155 where similar endoscopic sinus procedures are assigned.

With regards to the comment recommending separate payment for the single endoscopic sinus procedures performed in 2017, because the codes describing single endoscopic sinus surgery are assigned to status indicator “J1”, HOPDs receive one payment for the multiple surgeries, regardless of the number of endoscopic sinus procedures performed in a day. The status indicator assignment of “J1” to C-APC 5155 indicates that the APC is designated as a comprehensive APC (C-APC) under the OPPS. C-APCs provide a single payment for a primary service, and payment for all adjunctive services reported on the same claim is packaged into payment for the primary service. With few exceptions, all other services reported on a hospital outpatient claim in combination with the primary service are considered to be related to the delivery of the primary service and packaged into the single payment for the primary service and, therefore, separate payment is not available. We note that C-APCs do not apply to ASCs; consequently, the procedures would not be packaged. Instead, the procedures would be separately payable in the ASC setting. As we stated in the CY 2017 OPPS/ASC final rule with comment period, we did not implement C-APCs in the ASC payment system, and consequently, procedures paid separately through the ASC payment system are paid based on the standard ASC methodology (81 FR 79738). We refer readers to section II.A.2.b. (Comprehensive APCs) of this final rule with comment period for the discussion on the payment methodology for C-APCs and to section XII. (ASC Payment System) of this final rule with comment period for the discussion on the ASC Payment System. For the history on the establishment of C-APCs under the OPPS, we refer readers to the CY 2014 OPPS/ASC final rule (78 FR 74861-4910).

In summary, after consideration of the public comments we received, we are finalizing our proposal for CPT codes 31241, 31253, 31257, 31259, and 31298 without modification. Consistent with the statutory requirement under section 1833(t)(9)(A) of the Act, we will reevaluate the APC assignment for these codes in the next rulemaking cycle. Table 45 below lists the final status indicator and APC assignments for CPT codes 31241, 31253, 31257, 31259, and 31298 for CY 2018. We refer readers to Addendum B to 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 to 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 Web site.Start Printed Page 52442

Table 45—Final CY 2018 Status Indicator (SI) and APC Assignment for the New Nasal/Sinus Endoscopy CPT Codes Effective January 1, 2018

CPT codeCY 2018 OPPS/ASC proposed rule placeholder codeLong descriptorCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
3124131XX1Nasal/sinus endoscopy, surgical; with ligation of sphenopalatine arteryCN/ARefer to OPPS Addendum B.
3125331XX2Nasal/sinus endoscopy, surgical with ethmoidectomy; total (anterior and posterior), including frontal sinus exploration, with removal of tissue from frontal sinus, when performedJ15155Refer to OPPS Addendum B.
3125731XX3Nasal/sinus endoscopy, surgical with ethmoidectomy; total (anterior and posterior), including sphenoidotomyJ15155Refer to OPPS Addendum B.
3125931XX4Nasal/sinus endoscopy, surgical with ethmoidectomy; total (anterior and posterior), including sphenoidotomy, with removal of tissue from the sphenoid sinusJ15155Refer to OPPS Addendum B.
3129831XX5Nasal/sinus endoscopy, surgical; with dilation of frontal and sphenoid sinus ostia (eg, balloon dilation)J15155Refer to OPPS Addendum B.

17. Nuclear Medicine Services (APCs 5592 and 5593)

For CY 2018, as illustrated in Table 46 below, we proposed to continue to assign CPT codes 78018 and 78121 to APC 5592 (Level 2 Nuclear Medicine and Related Services) and to also continue to assign CPT codes 78110 and 78111 to APC 5593 (Level 3 Nuclear Medicine and Related Services).

Table 46—Proposed CY 2018 Status Indicator (SI), APC Assignment, and Payment Rate for CPT Codes 78018, 78110, 78111, and 78121

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment Rate
78018Thyroid carcinoma metastases imaging; whole bodyS5592$429.13S5592$439.56
78110Plasma volume, radiopharmaceutical volume-dilution technique (separate procedure); single samplingS55931,138.94S55931,163.30
78111Plasma volume, radiopharmaceutical volume-dilution technique (separate procedure); multiple samplingsS55931,138.94S55931,163.30
78121Red cell volume determination (separate procedure); multiple samplingsS5592429.13S5592439.56

Comment: One commenter stated that CMS proposed to reassign CPT codes 78018, 78110, 78111 and 78121 to new APC groups, and recommended that CMS maintain the CPT codes in the “new APC groups” to ensure stability within the coding structure. The commenter added that CMS has moved these codes several times over the years and believed they are currently assigned to appropriate APC groups. This commenter noted that the codes are low volume with high costs, and recommended that CMS defer to the specialty societies for appropriate APC assignment.

Response: For the CY 2017 update, as indicated in the OPPS Addendum B that was released with the CY 2017 OPPS/ASC final rule with comment period, we assigned CPT codes 78018, 78110, 78111 and 78121 to comment indicator “CH” to indicate that their APC assignments were revised. However, as displayed in Table 46, we proposed to make no change to the APC assignments for all four codes for the CY 2018 OPPS update. Specifically, we proposed to continue to assign CPT codes 78018, 78110, 78111, and 78121 to the same CY 2017 APCs for CY 2018 based on claims data used for the CY 2018 OPPS/ASC proposed rule. We note that the proposed rule data was based on claims data submitted between January 1, 2016, and December 31, 2016, that were processed on or before December 31, 2016. For CPT code 78018, our examination of the claims data revealed a geometric mean cost of approximately $418 based on 5,604 single claims (out of 6,327 total claims). Because the geometric mean cost of $418 is similar to the geometric mean cost of approximately $457 for APC 5592, we proposed to maintain the assignment of this code to APC 5592. For CPT code 78110, our claims data showed a geometric mean cost of approximately $1,046 based on 12 single claims (out of 14 total claims). We believe that the geometric mean cost of $1,046 for CPT code 78110 is comparable to the geometric mean cost of approximately $1,210 for APC 5593. Consequently, we proposed to maintain the assignment of this code to APC 5593. For CPT code 78111, we had no claims data. However, based on its clinical similarity to CPT code 78110, we proposed to continue to assign the CPT code to APC 5593. For CPT code 78121, our analysis revealed a geometric mean cost of approximately $807 based on 3 single claims (out of 3 total claims). Based on the low volume and because revising the assignment to Start Printed Page 52443APC 5593, which had a proposed geometric mean cost of approximately $1,210 would result in an overpayment for the test, we proposed to continue to assign CPT code 78121 to APC 5592, and to review the claims data for the final rule to determine whether a revision to the APC assignment would be necessary.

For this final rule with comment period, we again analyzed updated claims data associated with the four codes. We note that, for this final rule with comment period, we used claims data with dates of service between January 1, 2016, and December 31, 2016, that were processed on or before June 30, 2017. Our review of the final rule claims data revealed a similar pattern for all four codes. For CPT code 78018, we found a geometric mean cost of approximately $418 based on 6,113 single claims (out of 6,923 total claims), which is similar to the geometric mean cost of approximately $453 for APC 5592. Consequently, we believe that it continues to be appropriate to assign CPT code 78018 to APC 5592. For CPT code 78110, our claims data revealed a geometric mean cost of approximately $1,037 based on 12 single claims (out of 14 total claims), which is similar to the geometric mean cost of approximately $1,202 for APC 5593.

Consequently, we are maintaining CPT code 78110 in APC 5593. For CPT code 78111, we again had no claims data. However, because of its clinical similarity to CPT code 78110, we will maintain the assignment to APC 5593. For CPT code 78121, we found a geometric mean cost of approximately $808 based on 3 single claims (out of 3 total claims). Based on the comment received that the APC assignment is appropriate, we will retain CPT code 78121 in APC 5592, whose geometric mean cost is approximately $453, for CY 2018. In addition, given the low volume for the CPT code, we do not believe that we should reassign CPT code 78121 to APC 5593, whose geometric mean cost is approximately $1,202 for CY 2018. To reassign CPT code 78121 to APC 5593 would result in an overpayment for CPT code 78121.

Further, we remind the commenter, that as we do every year, we review the latest OPPS claims data to set the payment rates for the following year. Section 1833(t)(9) of the Act requires that we annually review all the items and services within an APC group and revise the APC structures accordingly. Included in this review is the identification of any 2 times rule violations as provided under section 1833(t)(2) of the Act and, to the extent possible, rectification of these violations.

With regard to the comment of deferring to specialty societies for appropriate APC placement for designated codes, while we rely on our latest claims data to appropriately set payment rates under the OPPS, we welcome and appreciate comments from all stakeholders on our proposals. We note that every year we publish the OPPS/ASC proposed rules with requests for public comments on the OPPS and ASC payment assignments from interested parties, including hospitals, specialty societies, physicians, nurses, health care technicians, other health care professionals, interested individuals, patients, and any other stakeholders interested on commenting on our proposed payment assignments.

In summary, after consideration of the public comment we received, we are finalizing our CY 2018 proposals, without modification, for CPT codes 78018, 78110, 78111, and 78121. Table 47 below lists the final status indicator and APC assignments for the CPT codes. We refer readers to Addendum B to 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 to 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 Web site.

Table 47—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Codes 78018, 78110, 78111, and 78121

CPT codeLong descriptorsCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
78018Thyroid carcinoma metastases imaging; whole bodyS5592$429.13S5592Refer to OPPS Addendum B.
78110Plasma volume, radiopharmaceutical volume-dilution technique (separate procedure); single samplingS55931,138.94S5593Refer to OPPS Addendum B.
78111Plasma volume, radiopharmaceutical volume-dilution technique (separate procedure); multiple samplingsS55931,138.94S5593Refer to OPPS Addendum B.
78121Red cell volume determination (separate procedure); multiple samplingsS5592429.13S5592Refer to OPPS Addendum B.

18. Percutaneous Transluminal Mechanical Thrombectomy (C-APC 5192)

For CY 2018, as noted in Table 48 below and in Addendum B to the CY 2018 OPPS/ASC proposed rule, we proposed to revise the APC assignment for the percutaneous transluminal mechanical thrombectomy procedures, specifically, CPT codes 37184 and 37187. Specifically, we proposed to reassign CPT codes 37184 and 37187 from APC 5183 (Level 3 Vascular Procedures) to APC 5184 (Level 4 Vascular Procedures), with a proposed payment rate of $4,084.25.Start Printed Page 52444

Table 48—Proposed CY 2018 U (SI), APC Assignment, and Payment Rate for CPT Codes 37184 AND 37187

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateProposed CY 2018 OPPS SIProposed CY 2018 OPPS APCProposed CY 2018 OPPS payment rate
37184Primary percutaneous transluminal mechanical thrombectomy, noncoronary, non-intracranial, arterial or arterial bypass graft, including fluoroscopic guidance and intraprocedural pharmacological thrombolytic injection(s); initial vesselT5183$3,924.28T5184$4,084.25
37187Percutaneous transluminal mechanical thrombectomy, vein(s), including intraprocedural pharmacological thrombolytic injections and fluoroscopic guidanceT51833,924.28T51844,084.25

Comment: One commenter requested that CMS revise the proposed APC assignment for CPT codes 37184 and 37187 from APC 5184 to C-APC 5192 based on their clinical and resource homogeneity to the procedures assigned to C-APC 5192 (Level 2 Endovascular Procedures). The commenter indicated that both procedures are clinically similar to other percutaneous transluminal procedures assigned to C-APC 5192, including CPT code 36904 (Percutaneous transluminal mechanical thrombectomy and/or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s)), which CMS proposed to assign to C-APC 5192 for CY 2018, with a proposed payment of $4,999.36. This commenter added that the geometric mean costs associated with the procedures described by CPT codes 37184 and 37187 are similar to the geometric mean costs of other procedures currently assigned to C-APC 5192.

Response: For this final rule with comment period, we reviewed the updated CY 2016 claims data associated with CPT codes 37184 and 37187. We note that, for this final rule with comment period, we used claims data with dates of service between January 1, 2016, and December 31, 2016, that were processed on or before June 30, 2017. Our analysis of the final rule claims data revealed that a change in the APC assignment for CPT codes 37184 and 37187 to C-APC 5192 (rather than proposed APC 5184) is appropriate. Specifically, we found a geometric mean cost of approximately $8,459 for CPT code 37184 based on 149 single claims (out of 150 total claims), and a geometric mean cost of approximately $6,343 for CPT code 37187 based on 188 single claims (out of 190 total claims). We believe that the geometric mean costs for CPT codes 37184 and 37187 are more similar to the geometric mean costs of other procedures assigned to C-APC 5192, whose geometric mean cost is approximately $5,082, rather than the geometric mean costs of procedures assigned to APC 5184, whose geometric mean cost is approximately $4,262. We note that we also considered whether we should reassign CPT codes 37184 and 37187 to C-APC 5193 (Level 3 Endovascular Procedures), which has a geometric mean cost of approximately $10,504. However, based on our review, we believe that C-APC 5192 is more appropriate. Therefore, based on their clinical homogeneity and resource costs in relation to the other procedures assigned to C-APC 5192, we agree with the commenter that C-APC 5192 is the most appropriate APC assignment for CPT codes 37184 and 37187.

After consideration of the public comment we received, we are finalizing our CY 2018 proposal, with modification, for CPT codes 37184 and 37187. Specifically, we are reassigning CPT codes 37184 and 37187 from APC 5183 to C-APC 5192 for CY 2018. As we do every year under the OPPS, we will reevaluate the cost of CPT codes 37184, and 37187 and their APC assignment for next year's OPPS update. Table 49 below lists the final status indicator and APC assignments for both CPT codes. We refer readers to Addendum B to 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 to 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 Web site.Start Printed Page 52445

Table 49—Final CY 2018 Status Indicator (SI) and APC Assignment for CPT Codes 37184 and 37187

CPT codeLong descriptorCY 2017 OPPS SICY 2017 OPPS APCCY 2017 OPPS payment rateCY 2018 OPPS SICY 2018 OPPS APCCY 2018 OPPS payment rate
37184Primary percutaneo